F.N.B. (FNB) 19 Oct 222022 Q3 Earnings call transcript

Good morning, everyone, and welcome to the F.N.B. Corporation’s Third Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note today’s event is being recorded. would Constantine, to Manager I over the time, Lisa to of this now turn like floor At Investor Relations. begin. may you Ma’am,

to October Thank non-GAAP Corporation welcome conference and Exchange contained to be Commission with you. viewed earnings forward-looking Delie, and Non-GAAP with related reported statements non-GAAP website. in and will Good This link statements the registration Wednesday, release. and our and website. financial in webcast contain call. Securities should not in I and the to available measures Securities measures Reconciliations call as results this our measures. prepared to the the over XX for now GAAP. the reports call financial and our our in F.N.B. will non-GAAP Us until earnings our CEO. refer disclosures of President to also materials, reported addition corporate financial filed most files in Please section of Vince of to Exchange our replay About the morning of measures alternative GAAP corporate these available Relations on call Commission operating to and A GAAP and directly the and be our and with posted accordance an presentation compatible statement Chairman, turn material and forward-looking included be will Investor are

our third to earnings welcome and you, Thank quarter call.

a The this record all credit highlighted $X.XX, of the convert deposit Bancorp approvals enhancements, high anticipate record regulatory and Credit Joining UB share a earnings FNB’s XX% year. pleased revenue, growth, quality operating for Financial merger receive was to and digital on this third per positive and in today Officer Gary to technology Guerrieri, quality me Vince Officer. We quarter December pending our linked our success Chief Calabrese, are by with Chief basis. were our totaled loan of merger also performance. continued and and close quarter increasing quarter

welcoming to We employees forward clients Bank are to and looking Union FNB.

benefit by suite tools. that We driven growth led interest our will deposit sensitive net mix balance loan income, million, of the favorable Revenue are in growth, by asset they our robust confident solid and XX% deep totaled digital and from $XXX position sheet. product

of fee-based low managed to double-digit as building leverage well for positive Our sources million, contributed Record businesses the strategy $XX income. again our of our to of importance the efficiency once operating well led as demonstrating of long-term coupled over third historically revenue quarter. XX%, ratio diversified with expenses

planned we FNB keenly positive during X% focused loans As Physicians product Physicians at continued Commercial million for the and mortgage linked revenue, quarter annualized and and the X% the in delivered quarter as funds. we continuing growth CRE generate double-digit the leverage. XX% with by XXXX grew Consumer in First e-store $XX.X investments billion. million, mortgage of $XXX expense accounted increased loans nearly and with loans the of First quarter for digital growth on of rate diversification driven again ending annualized to remain First loan adjustable growth management, Physicians risk total control, operating and C&I lines. respectively. linked off leverage with its and $XXX success

bearing Bank and Deposits was annualized. or markets of increased Carolina FNB accounting bearing ended growth quarter the XX% for the proportion deposits with overall position non-interest our X.X% million and entire enhance deposits. contributed higher While total Union across North the by spread deposits Cleveland of but We during footprint, contributing will non-interest the quarter $XXX increases. a largest

for continue digital visits to September. And both over in channels offerings was and monthly averaged this our success increased Another over retail area we customers. with digital visits continued year-over-year format our XXX% XX,XXX, e-store where expand business our of

e-store in beginning November. As deposit for we products launch applications deposit business multiple online

year, will enhance and our our an balances. to alerting manage mobile customers' to ability guard update real features capabilities application, to control time their including introduce debit enhancements card account Both we service. Next our hard

balance highlight Lastly, indicators to potential it when the a strong economic is position important of a in sheet softness. FNB’s to point time leading

team credit portfolio their Our risk various rates of analysis, perspective uses mitigating credit during economic run reviews only our consistent, culture also systems been through analytics through our not loss risks. recession and The the our us tests typical maintaining risk That uniform of to our meaningfully footprint. well standards our underwriting portfolio and during parts peers. comprehensive cycle. great evaluate is same served when has the diversity monitors credit trends the all historical Further supporting and outperformed identify growth stress management to They geographic also but strategy any emerging performance. culture

opportunities. provides Our Columbia of of and presence growth states in areas seven access the FNB a variety District in to quality metropolitan high high

adhering FNB still unique important expansion our our as conservative standards. allow our management model. an our growth meet risk well been to key business have objectives, markets numerous for as objective Our to while strategy, This driver underwriting

levels. to continue We prudently manage our capital

and of ratios at all TCE meeting. our above or quarter, reserve last ranked coverage peer As CETX,

expect asset slowdown of I potential demonstrating or coverage is it to and again maintain diversified within of call meeting, the portfolio well is coverage reserve additional over strength early economic reserve to position quality. positioned above our our now and turn banking ratios. to solid industry. loan with know capital results the our for management the Gary and at will conservative details of for our the that a once ratios this our we to will While peer quarter's FNB capital we too set, continue provide

had both portfolio year-to-date Vince our third favorably everyone. quarter you, positioned on stable and good a and Thank following performance basis. with quarter-to-date credit solid We morning a

September reductions while Our levels, classified non-performing further very saw delinquency with at remaining and metrics credits. key ended credit we in favorable

the results. I will I Additionally, would like Bancorp quarter favorable close to to for very and two brief continue net update asset charge-offs GAAP then remained a the UB upcoming of well consecutive to and following in low on scheduled provide QX. the cover quality highlights acquisition track quarters

steps around to some macroeconomic the environment to the position color in offer manage Finally, risk we're credit quarters proactively to better look and ahead. the we I'll us book as our taking

million the X resolve of Net year-to-date totaled to charge-offs levels points problem runoff reflects of at ending now September points for delinquency with aggressively improved strong past a in and through Funded million credits or to our tireless $XX.X NPLs X charge-offs to million, was up well September teams process. on at nearly results. and X tied $X growth, XX provision which the net review efforts Total nine prepayments. quarter with XX basis a linked tied by in compared quarter linked bps, Non-accrual increase a PPP support Let's quarter forecasted solid continued of million annualized third build expense totaled stage as $X nearly OREO ended down $X.X basis the as workout still months macroeconomic level, basis points, last X loan $X.X only basis model address updated our early low up flat, or remaining the point. dues quarter decline historically factors The to driven by and some bps quarter's million basis annualized. assets. to

quarter of or the remain totaled the as favorable. X quality $XXX at results point September reserve end credit down million X.XX%, Our prior basis versus

to further strengthened position NPL XXX%. Our coverage

Now the is remain to conversion quarter, our we fourth in loan and turning on portfolio UB closely track continue with acquisition anticipate do through material scheduled process that track Bancorp credit diligence. from close to profile, not as established day any performance its the the with and the or to we monitor We due our to line legal one. and our remains metrics portfolio in corporate credit loan risk expectations impact

to our base UB, and banking needs. relationships with team we product look lending the welcome the available the customer deepening to we and meet forward As from offerings their UB

macroeconomic evolving Let's to we've and book now the and moving credit some of measures gears manage taken switch our environment, specifically discuss position risk forward. the

I've our footprint across and a cycles. past, consistent approach prudent with economic take As is in shared to beginning credit holistic underwriting philosophy throughout and the the

basis strategies lending maintain loan that we risk convert diverse our and desired loan on of we pipelines to continuous fits actively As and credit asset balanced loan execute our monitor book a profile. to continue our growth within concentrations on and mix a our

ongoing and the evolve to mitigate center. us manage as the our and of our risk inflation, labor credit our conditions in we are contact of signs and carefully to and portfolio our made headwinds a identify to book. industries we challenges to face in macroeconomic analyzed decisions quarter. very elevated successful our front understand and specific continue market allowing and energy-related standing consistency we've supply various analytics, rising favorable they remaining chain from markets. credit credit the expansion the better systems are data-driven core risk factors These of rates resulting Furthermore, with with addressed our following and investments interest and across third can pleased as challenges underwriting and ongoing and in With customers make the philosophy strength, stress Closing, continued close remain strategic bankers positioning with

of year to As portfolio we finalize vigilant the and and manage to continue the in credit remain each months evolving conditions ahead we day. close out and every proactively macroeconomic look will UB and aggressively strong, the the Bancorp our acquisition

turn approach proven throughout to prior cycles. As we our has we will our ahead, to now Financial well economic to remarks. call the his for over look Officer consistent I Calabrese, remain Vince Chief committed underwriting, itself which

year. I the third guidance for the of results morning, and Gary. the focus will Today everyone. remainder Thanks, offer on financial Good quarter's

and or fairly period in largely million $X.X third merger-related split record income growth HTM. assets between investment after $X.X billion reached driven with investment growth that adjusting The balance net even common billion to $X.XX end, share. through were per or a a totaled $XXX.X the $X.XX deposit income $XX brought and at AFS loans million million sheet, by to $XXX.X quarter securities net The securities expenses per available of funded shareholders for totaled share

$XXX increased pipeline the Period-end the XX% of The corporate quarter last in including staying senior of notes. across deposit consumer excludes X.X has continues debt. which issuance production, bearing lending we relative linked auto higher the of another organic the in Physician's for in an $XXX footprint Mid-Atlantic and vehicles. quarter month, $XXX an million activity a we time leases. to growth XX-day strong in year-to-date During deposits million X.X% million offering a loans activity debt mix Long-term reinvested quarter plan Commercial We purposes, residential Consumer accounted space, seasonal particularly August softened and strong mortgage from bit million in well the XXXX. our that increase Indirect linked the million while of $XXX mortgage $XXX driven the book healthy more total million our with quarter regions. Indirect linked $XXX non-interest in Total favorable increase was quarter increased to is quarter strong to area. by proceeds net such quarter, period be for loans as deposits million First increased with loan to an of X.X% and on mortgage quarter. use program loans ended the higher with commercial XX.X% three-year quarter, increase Carolinas XXXX of or deposits billion, growth as or around XX.X% end. the With linked total same general XX% annualized. production activity X.X extinguishment cash at securities comprising of paper. saw loans $XX.X predominantly supply the $XXX million than following per at balances basis. the The flows, in annualized, or which largely was as quality $XXX the increased duration of saw in

average XX income XX basis deposit totaled interest quarter, million increased to fairly $XXX.X benefits from statement, or XX points focus, remained basis margin environment and while as from higher of our of net last in deposits reflecting earning a growth bearing increase Managing the interest basis points. income interest cost increased low interest rate continues to ongoing costs million, they points an the XXX. record net XX.X%, assets On the at be $XX.X an

terms we year-to-date, In have of XX.X% of betas cumulative a beta on deposit deposits. total

rates, fourth in will increase cumulative bringing on beta pressure deposit continues and XX%. pricing this the to XXXX costs are competitive the around currently anticipating deposit As deposit we creates quarter, the increase our to total Fed

in interchange from due largely increase income to linked mortgage rates XX.X% markets as and sold $XX.X prior income XX. rising compared XXXX, reflecting management increased or banking tangible and fees. fees quarter, contributions quarter’s with as the On the to the $X.XX by down to in prior losses by unrealized Non-interest income $X.X quarter, international largely for prepay. timing last a and of expenses and adjustable-rate level XX.X%, million securities Marketing higher Overall to services, basis, excluding value Turning slight performance ratio and charges to digital increased and or volumes expense declined current end linked book June employee treasury respectively. at in share over $X operations the back for are of quarter, advertising XX% on in $X.XX increased swap AOCI totaled the X.X%, $X.X a Physicians ratio $X.X book Mortgage common to shifted in share was second $X.X, This holding banking a Salaries First to will of of the higher quarter. time mature Service a prior our due XX.X% growth per non-interest the merger-related million quarter and of preferences per reducing balance record at interest result compared AFS activity. sheet. of efficiency the to $X.X year million portfolio to change the million million mortgages decreased share which related higher customer total as expense. incentives. $XXX.X of third million from reduced consumer impact $X.X income vacancy increased Capital quarter. operating of we million non-interest decreased The significant XX, a and mitigated to came compared Tangible rates second into the of accrete from million, was million, quarters $X.XX improvement quarter program XX.X%. quarter's increased benefits and syndications, solid production $X.X quarter. the campaigns earnings value reflected due million of or to per decrease ago $X.X the September capital an

we environment. Vince sheet balance deposit to Their base expecting a add to of mentioned, as year. continues trend in low Lastly, Bancorp to expectations higher acquisition we excited UB convert December and in the rate their our and are close within are cost this

expected UB a turn to Total with Bancorp let's increased mid-teens Now guidance, year-over-year million high-single which spot to the mid $XXX spot deposits and net to organic the interest to be basis. $X.XX are full-year billion projected to high-single announced low-double grow to digits We excludes digits basis. $X.XX growth between to fourth in Full-year on acquisition. is income a loans for underlying the on with year-over-year guidance quarter $XXX between our growth million.

assumes quarter. basis for points rate of the increases guidance XXX Our currently fourth a

and full-year for We income the to be area. million in quarter mid are with fourth is $XXX guidance between non-interest income $XXX revised high-$XX The million increasing to non-interest million to the due guide maintaining higher-than-projected of associated of million was fourth basis, branch $XX.X $XX tighter the tighter third an our million, to to acquisitions quarter not during Full-year expenses provision also $XX with on quarter. macroeconomic growth and This related million to $XXX the which revised include to to loan initial fourth provision of guidance is and include quarter. a the million not does does dependent one-time and Howard net million for on income. to $XXX previous million expense operating range Full-year while provide of range a non-interest factors was $XXX guidance only revised million $XXX consolidations. the

will be fourth that XX% call back for turn assume investment does to With activity rate credit tax Vince. Lastly, the and the quarter. tax should any in the effective which between not quarter, the XX% I

Thank Vince. you,

per level loan non-interest well of quarter's and our as this bearing and revenue with and current growth pleased as are our deposits. share, deposit earnings record We

continues rate with points and asset low favorably only perform X basis XX charge-offs. a to Our quality points of net delinquency basis of

and continue macroeconomic to remain our focused on environment through in changes ability stay potentially We challenging to to the manage confident conditions. economic

I to will alongside efforts all sincere fulfilling employees that extend collective working throughout To as remain admirably drives I as XXXX. out we look they my are team to forward their of uncertain what dedicated them, performance, our gratitude, our FNB dedicated Our have times our to know and and I close stakeholders. our commitment performed

today our Securities. go gentlemen Our Shaw ahead begin that, Fargo first and Wells with question. Jared your question-and-answer Please question Ladies we'll comes Instructions] [Operator from from session. with

Hey guys, good morning.

Jared. Hey,

morning, Good Jared.

should the on to on, add for like I sensitivity guess thinking maybe at you're with our calling DDA? here? just the that and build starting coming out decisions? into to outlook asset more about on portfolio rates as what we we even How deal doing be starting look go models the -- So to Any UB sensitivity terms as thoughts going moderate you in potentially that's ’XX. of we said, asset

things, protect I our or asset midst fixed plus expected. exposure to over put downside on say more mortgage duration would downside potential of, we've to derivatives here, the rates at Yes, added opportunities look us Jared. side with on and from [indiscernible] books since billion the other in cash the year I a rates next looking $X so strategies in receipt course swaps couple as downside of, about of some protect the securities pottentially you to in to is mean, various executed our us of kind ahead loan reduced XXXX position, we've

sheet, ‘XX. we're benefits net upside obviously to then organically margin happened and rates in of into sensitive that in next the of the quarter say kind just we benefit movement into again billion balance fourth did stayed guidance would expected that overall of we've to portfolio. the balance the so get we'll amount it short $X.X outside sheet. there's the way year to from into position we And when the from earnings for sure, time, good So for income short-term we've still But it positioned that, as and quarter position the still a interest ultimately asset to the into fourth our foregone capture would rising and there's come rates over that of kind think I look on get you as today, I investment that the come some the of given

a consistently everybody experiencing helps have AFS and We now. HTM, on AOCI split had, right impacts had the that between XX-XX which is

here. those in we We So I are taken think as that some from look we've strategies benefiting. tactics today the and ahead past sit here of and

performance then we quarter? us off? and the the beta UB about were you at the there there the deposit thanks rates spot great Okay, anything there? you the could forward, -- look deposits, think with of growth deposit quarter base should through overall update on quarter. cycle could that roll do -- an be this seasonality give any Is Could with think this end What what of beta as blended the and on we the that

our in through I Yes. things. go have and I as $XXX mean, that we do from of couple $XXX a would seasonality busines the kind kind to that through every have municipal peak year of October still I'd trough swings, go, builds million say year we and to say and of you million into November.

in side kind the we side, new we're on we win to well accounts. as that's but adding to just also on So not commercial with accounts but as the in, retail operating on that have of good normal continue seasonality side, bringing lending there, of the continue markets the top success

build deposits time up, in benefit the over that had been a for company and it's that's added. There's forward from to consistently continuously a we've to focus has We big from it's XX%, growth, clearly sure. focus. DDAs back up moving XXXX a new continuing overall slide been a So our the we XX% look to and

betas, excess sheet. the We the I still mean system $X.X is in balance still our there. As banking far cash billion on liquidity and have as

continues business As for where Fed rates, movement our full like with those relationship see starting rates clients, a on pressure that conversations municipal more we've others, deposit more deposit but frequent to At point, particularly we're move. retail to this limited with as us. been making have very definitely adjustments, the there's been of

is important. not lost clients, any which have We

us aren't somewhere moving the else. just I closing customers are and and municipal customers think accounts conversations commercial having with

it the think I So people built that relationships speaks time. over to have up

a cumulative was have we there. As in so new September. at end for far, I deposits beta that mean, slide of the XX.X% at total added we

be of end around total Our forecast the at XX% to is the for deposits year.

just me, you the how look ‘XX we area. of more Okay, the update going finally that of any did with hiring continued side, as And down Virginia on the then sort for great. potentially enrichment hiring in guess area then be I into of on pace to and growth there? Northern Is that an expense D.C.

-- Yes. been mean, We our I has in hiring D.C. underway.

There an are a the particularly but So significant fall a bit expense at area. When to locations retail that base. a exercise. look pickup, could been we expect in are several in online, total expenses don't locations, relative be so engaged you takeout it's overall, that not of coming we've little expense multi-year

So achieved we repeatedly did them, we and last then targeted three years. we over it levels the certain

is expect we're some on it. to the There increases in stay to so focused can offset going expense base our we to of expenses continue of face We to natural down the inflation, that some within see. to opportunity manage continue

the the our made to salaries a employees the for and take company -- I increase is I been think think actions an and committed along. care here taken continue there to such as at of occupancy We've has are us. The vacancy employees culture perspective, we some or company. genuinely reasonable move happy that from and vacancy to are

we guard. weren't So hot off

and space increases five had retail people you expense recall, those upgrades retain the reassessed banking commercial in If that to years significant salary so throughout we've or over with we time. in the

I'll if that -- next It want I But ranges. We an something. on been hope so really for helps. vacancy add he guidance not upper within our the give it's to expenses. been end, hasn't Vince, rate it's over historical ranges, has historical didn't but to on year So within it turn outlier. back

be. the with comes last year, vendors, every cost this to really four point, focus renegotiate of what It's would we've that always had footprint, just a that a I as that And the $XX with just as it target Yes. is we just space process of years, year kind continuing variety add improvement over optimizing far as throughout well to should up of savings realized. ongoing. coming out initiatives of as Vince's million including No,

So be we've disciplined that coming and will that see always very to operating continue were managing $XXX positive And had levels to that us that continue that be we'll and this has $XXX will that in consistent and to focus double-digits to continue can the at been band from leverage a million you the in to focus as that's and generate creates -- is continue the million we year able guidance quarter good that. quarters we have for expenses here. within this that expect

for the Thanks the Vince. questions. Thanks, taking Great.

Sure. Thank you.

comes Tamayo Our question. from Daniel next Please question from Raymond go with James. your ahead

color to margin we know maybe you of the get your last or margin, morning. discussion, and happens decline if I the up? another peak or once around hikes in Good margin expectations rate I when on following get a just we get maybe may we get I But a relation deposit betas kind gave up just thoughts Thanks. what lot if floating on of guess, stabilization peak where thoughts, guys. the Thanks, the on there. could your Maybe and

there's upside the from actions. the still Fed mean, Yes. would here in ago, commented just minutes margin I I as continued say that, with I on

a the the nice retail done focus job managing kind have we company. our the the on the on given sheet -- the much deposit the and us side commercial across operating has think cash team for excess of just municipal and a balance board that's very costs and I

week process pricing those our should We to where rates kind committee through have active optimize very a of every be.

the I there's So next kind we've think as income. still some come action I for a guidance when as obviously, taken and the protect more we'll us rates full-year, I you for do an here of interest And give quarterly when path, mean, upside the year, I definitely then -- There's as down. to margin outlook but when earlier, give we for net on said well upside.

that with And still when that some could in but rate has of too hope hikes when an sure XXX points comment, outlook. plenty it the upside, guidance put none I into of as happens we of know kind on what's our us So that slide, fourth baked place additional mentioned exactly quarter to the there's for should basis happen. in in protection and that that's

Shifting to that's Okay. gears strong really credit so here in clean over you been numbers. Obviously, for the things very then looking far quality.

is very looking concerned into kind you expecting the available on loan are next But now. what's where positive most given comment most what cycle? Your based or going of we're in at books closely the terms of here

Yes.

the at offs coming and indirect point the side. on of how areas held focuses book areas. team I them. portfolio, expect well I Charge the down this small to with a pleased And are as moment. portfolio think, as up tick in perform to quarter-over-quarter are little well prices did the of bit are even those focus the one they've to we're both with of have really perform flat in of like expected, consumer the the well. those is said, as Daniel in but And though today those the car our on them business economically up Those areas. continued headwinds sensitive that books there indirect business of we Delinquency feel

commercial also real the interest within portfolio. sensitivity, stressing underwriting right? Gary, -- we've We've estate rate been been

And mean, well. we're as stressing of the across rate book mean, stresses, we're north I at we're interest it then our with C&I from underwriting And aggressive pretty there. Yes. today I X.X%. CRE transactions

the of built portfolio. the the side front So we've management that the oversight into those book the and heavy got some on place pretty we stresses equation underwriting and stresses of

prepared and other the we the said the most and don't you bad upfront, and at times on through cycles. mean, solid, crazy LTVs we tighten conservative in before comments, the scores are manage book, we've during consistently I We in look risk LTVs, better I'd in stated don't during credit way go And underwriting say, structure very a it credit consumer this times calls, cases. Gary crazy in good loosened if the the

the I Yes. there or is high-XXXs. average mean, in average the

So when it your their you and is protects balance performance multiple happened good. We And downside pretty our and quarters our move the cycle that returning does and balance as growth what was was opportunity reported darn are sheet. grow gives industry an it to basically, of when capital through sheet, cycle. credit others the shrinking, selectively last throughout that us shrinking loan the

have team, there's forward. we grading I analytics very credits We stressing I'm uncertainty portfolios moving naive accurately We and in lot know all and So to We're our confident a an and at kinds perspective, quickly. things of we're of -- prospectively. monitor perspective active our from very do it. not

So is time seeing us can from we as get close it's it. to real what you're

We're pretty cautious being very is I good are think things today. as forward. we team forward looking move and Gary's

Terrific. I right qualitative is just color. are the And How you follow-up appreciate reserves. now impacting a side say of the you of, in where then, related kind all level that reserves. on would much

Just forecast going kind could reserves thinking of macro how impact in changes forward? Thanks.

of we would We down annual the effect. go piece XX%. today that take other expect forward of at some Yes. the slightly quantitative The is about qualitative models and right to as move reserve

the in of those prepayment of which a lives from expense, provision During it. naturally the there chunk We did the provision growth are some standpoint. pretty loan CECL extending naturally remarks, and of mentioned portfolios speeds, as see some naturally, I slower quarter, the the impact good took a

in some Our CRE our model These variables. have economic seen and softening. quantitative housing forecasts models are around

improvements offset well. builds take That X.XX equation down the were So as in those drew little a that quality, credit by bit basis of on X primarily ultimately that point which the of provision were at as side did expense said, reserve all mentioned.

quality be credit provision told, to all And So forward. is the driver a continues loan growth there. drive to going going

-- we're you the Our of group that and peer from is very reserve position still gradation, know, perspective where attribute are you we a making top I to about a you standpoint. favorable. relative on credits, Gary, risk to staying to, want don't I know, know, sure very do gradation understanding our positive, talk And

would viewed totally agree that. with that mean ending. not I pandemic finite I the and No, was something we as

to that. really to large around worried we Difficulty] were about we inflationary seeing cautious back, when the that chunks of signs X.X little were So get releasing go were we And years it. I a [Technical back starting

appropriately and we're the managed strength it today. of it, accordingly, I we've with pleased and think, So

all That’s Apprciate from great me. that. Thanks color. for That’s all it.

Thank you.

next Our with from your ahead Please comes Haire question. question from Casey go Jefferies.

thanks. Yes, guys. Question Vince Good morning, C. for

been So strong. the very has deposit non-interest-bearing mix

end from the you as Just year? in wondering are you that in attrition through cume the level -- beta here XX% is sustainable XX% your of some factoring or

the Casey, mean, relationships. and management chart very focused you a -- is secure that’s to multi-year an built focus historically been pretty I Delie. type shifted in look people if on these that this treasury They effort I think We that That's low-cost grow to can to deposit effort, favorably. you of you has DNA. on have the see more deck, at Vince diligently, position. incented that if I into go mix strategically our deposit back, mean, changes work the are basically, gathering.

as And sure there's we're on deposits. that, I that I'm having rising in forward mean, So rate said sticky. move you non-interest-bearing environment, is right, a XX% pressure, hoping

we right? percentage Casey, want have beta XX% is higher because know break additive, acquisition right, than I deposit small guide will reflected our that other any in you is the it's deposits [Multiple favorable right, The other also Speakers] demand add, I deposit also of details is average, if that thing So is Vince. to to even mix don't their gave, you higher right, down

are we Yes, announcement. Had XX%.

it's be a into we as elevated period standpoint move going rates. additive of from So that to

want you then sort of What little prevalent? as think $X.X a does bare of billion. the run wholesale understood. bit low, of excess run when so use there, a position, cash that minimum just I is cash Okay, more more like mentioned And like sense the you to get that reminder we becomes on a to at borrowings the

to cash really $X.X that's excess Casey, would we billion. what consider

a that I core typically on billion cash. of truly referenced cash balance see. level that the excess certain But sheet $X.X have would that you is We the

can So down go zero. that to

Okay. All right.

So bit a obviously, little pipeline result from the It just the pipeline, here. here. a sounds decent a then on is softer. And like lastly loan strong cushion

quarter? is in last just auto any the if there's it bit continue? Is then that wondering, the to Or verticals? seasonal that going over on has quarters. strong any production also, very had is Just lighter a indirect little momentum more a And Or nice -- that going color little a is a growth after two slow Or nature? to down?

Well, I'll answer the question.

transactions is significant pipeline, they cycle surge is perspective, Gary. point actually. don't And up expect still the surge some commercial in which requests move leading the demand, last fairly let Gary year. borrowing towards overall those growth the the natural. quarters indirect we've But where auto. It And first a question particularly able seasonal to to typically in two pretty pipeline as pretty pipelines contracted, out talk I robust of we you were period see the the through close in reports as at in cyclical the we general, basically. a The a see produce in been about into I'll has loan We're wouldn't C&I a end book from the about

those think closed the decent refill. they've because pipelines at reduced of XX-day bucket. low. been the level, we not They're stuff they're a will mean, all terribly just in I I

their earning for District face competition amount want optimistic us a execute So out, my and I expect we're footprint, continue states Gary, about and across our go in the fact that they're both the a of consumer size while regional out generate hope high-quality would auto? I we be go goes markets indirect to presidents, in. commercial. is we're have quarter-after-quarter, significant assets. That And to very given to to of very that don't that you significant of they able if and Columbia, ability comment the seven that share know to fairly on the know I our to able

Vince. Thanks. sure, Yes,

periods Casey, are The the seasonally quarters, high second and for us. third

during really middle We've margins the of a business. always year. on see months that of do would as that enhancing part move lower QX we'll expect, volume in high-quality months, couple here in we're of as Again, X.X last focused type month, volumes So normally the through I on we see spike our that we been there. focused the paper. over

as expect dip would those margins. seasonally on those of that reasons, well as to I So enhancing our for focus couple

Understood. level to Okay. housekeeping The sorry, the one a question. -- more ‘XX? should last bit, And carry XX% we Is tax just into assume XX%. rate up guide little is this

execute continue of What transactions. credit tax on be that dependent it we'll to to be always the the going quarter. those of active investment don't activity level we activity in say on foresee fourth I But will and was types any

to is would So what that's normalized those a why we're XX% XX%, types of transactions. say up absent -- I

taxes XX% benefit provided to XX% in a transactions. with So some there's that

Yes.

something -- that expect we expect we fourth there's to the up We quarter next in teed had happen year.

some clean create benefits will to rate pretty that that rate [Technical So Difficulty].

Understood. Thank you.

clarification. for Thanks Alright. the

you. Thank

Our next ahead go question comes Perito from from with Please Michael question. your KBW.

good everyone. my morning Hey, for questions. taking Thanks

Mike. morning, Good

Hi, Mike.

the little as the if of I clearly wanted seen of, for the structure, the you to bit use just refresher could a Physicians it's program, growth recently on quick us kind a guys. ask maybe -- just refresher type just mortgage you nice first, -- some give First of a case,

give works of could Just a how product kind of rundown wondering that if generally? you us

with student we LTV. that advantageous a we typically medical for a loan started of are Basically, Well, product starting are get out -- loaded basic physicians, mortgage it we more premise had with the that doctors debt. had professional’s,

call products, physicians with first performed a and digital e-commerce loan, it's Gary, our that loan, some we well. use our -- -- set originators Over series student on medical first up product, refinance and underwriting e-store, bundle, extraordinarily to migrated we with of adjustments We I which on the So purely which product mortgage in assist origination in product is to platform we the from go physical their then product comments. might portfolio nicely. comment a I of don't the and to to that the is the securing we other made know business it the website digital practice has it small if that homes. the origination our bundle a process that prepared loan, process, depository referenced time, a and it's along that then will some physicians our and we I after physicians grown and And

as that business, small lending us, student continue think, it's of I mean I the The FICO portfolio practice ahead solid opportunities we well some and very opportunities were zero we book high-quality mean, business there. that bundling delinquencies loan a in I of as Yes. high opportunities near are there. see the good debt-to-income programs scores, of buy and the ratios. to very business, in of

forward bear we Is move So with that competitively expect as that fruit program. we continue to to -- that

guys. you Do

Sorry, go ahead.

question, Go Go ask Mike. ahead. ahead and your

that going Or of guys for was guys there feel share? to this you this kind little market do lot of or you niche? on some other here there I say guys of is bit or room a in focused an face take competitively, to a is you like have edge banks

niche. comments, approach we use organized our visit clients. if digital product. tools, mortgage the is like way this analytics. similar on site. we our other There The I a said banks prepared are We we've our to just difference our We customers gathering data in we XX,XXX offers focused mean, those about have every competitor had the e-store, use

So certain traffic created direct methodology, our then to advertising promote and can services on we've which and products translates the digital and engage website, our advertising into portal. we ability when to them in traditional we

So it, zero. the e-store month example, when physicians XXX you per look from page, at first to visits it for grew

So ago, couple ago. we of that quarters long a just stood not that up

site. that of XX.X% the year-over-year in category on supported in terms that that growth use of So

the it -- So views. supports overall and

present we're use then that we're that solutions. to traffic instances, we products to applying creating So customers to when site. as look that for in digital the tools tool analytics customers And enables visit tool, our they some

physician's mortgage look other the the the pop this up. other items say product, then they package people these shopping put they the typically first at in package, So that and And products. purchase cart

directly success obviously, but Difficulty] and led some the it's views we're success [Technical So to to of attributing So we've people strategy ease is of e-store higher marketing concept more our visibility, attributable a and our of our to and that digital developed. the matter right? some

thorough. And it. it Yes. No, then Helpful, Got XXX very thanks. is --

a positions month. XXX

most to our I just positions likely. XXX Now in we mean, normally look that keep would website, that's at see perspective.

and helps build awareness supports our brand. So

and love mind. with moving to you're just and lastly think quarter. the were little it be solid environment, elevated there's the in there? pretty from reasonable little commercial capital if some continue then kind And on a unrelated, Just the fees, a everything current pipe Is uncertainty of there, extra that to, the in the lecture economic just don't of, rates which for seeing engagement markets that and you to color room

It's anomaly, question. think pretty broad we're an bit of have size. offering I right? little Because I we a our a a mean, great for

a our have they we corporate group bond bankers. calling markets So debt large participates corporate economics, our capital support that activity, large in

I think, a We our have for outsized, that's size. effort syndication bank

fact, right? year. double, syndications our than over revenue the last In And is it's more doubled

down hedging from -- nicely. demand international up clients a that the and business both into we them mix, had it's of both So volatile, to and changes perspective, strong team great products a have in clients for and hedging, success because the for the in that interest a But grown impacts do rate The that's some a structuring for that's have area. do loan they business both throw very cycles. sizable interest derivatives protect because we rates more we company, international core we contributor, is

mean, capital because significant In in But believe lumpy variability. over I I'm on the going rates. long-term. over mean, our there's to I -- sure, run, the you're markets short I So general bullish upside platform in It's the the changes of see long-term.

is markets capital think I early. very

debt borrowers in (ph) bonds, the day terms larger there, our debt early. goes of well as opportunity credit us built there's upside to we players terms against and issuance out of [added] our in we area, an larger we though hold extraordinarily effectively syndication still appetite debt in capital order markets debt. is or debt, year, is in upside. performed And more activity because in positions grown there's the And regional to compete always out, the of own has a markets that hold company, with against then Yes, capability. this as on grown. Syndication the we've with bank compete for the and our of day competitors of some not even our -- There's that capital

We bank have very last across competed you, a company. business the the I've there tell been have everybody are decades. strong bankers can over corporate against in the for corporate terrific I XX-years. three

We have a very strong team.

are, their markets. to the very The haul, long headwinds. the And space. why economic capital in will growth you So capability stronger and over more bankers your I'm knowledge optimistic about lead that have opportunities that that's in barring area,

the to Got my momentum sense, this taking see good year. Thank guys it's it. Makes for you question.

Thank Yes. it. you. Appreicate

Brandon from comes from question Please question. next Our King Securities. Truist ahead go with your

Thank morning. you. Good

Good morning.

Yes.

month kind you've on spread seeing a are was in loan what dynamic? more out seeing what actually this October? loans what you there one you price color if loan spreads seeing yields. you're expansion yield curious market? in the in month really Or competitive of to of, for on from Are you given, been was the pressures? able loan the -- I new just us to can give had know of also I And So loan wanted question just

of kind yield increased quarter is X.XX% portfolio it loans. in amount to overall basis can second to third look comment spreads spot rate, X.XX%. I increasing after quarter from XX on the then a or basis The Gary points you if points significantly up maybe comment quarter. XX second the the going in current the X.XX% new of at on And or loans and which mids ask to made during at X.XX%, the

rates the building quarter comments which as bodes So for significantly get there. kind on, income higher, they're coming well net where continue fourth as my into of the earlier margin would new you expect, the you interest about and

Yes.

of we the terms In seeing strengthen. are spreads, them

also credits, the across much rates moved up. of has bringing very, is very terms high-quality naturally strength pretty paper benefit some investment-grade low in that seeing the we're of board but So

points that a spread to XX standpoint, of would I up basis points upwards points upon depending is XX asset everything So basis tell class. you from XX basis

by chaser, way. the credit Yes, a we're on principally yield focus quality. not We

though hinged do -- So going how priced, borrowers transactions to results more may is on to the be reduce some cycles we through are ability in. directly like those even thinly creditworthy

try the we the a spreads credits credit spectrum across creditworthy of larger, yields higher certain So on in are that dairy, and broader so thinner. lending, as from those to of were we late more portfolio while benefit right, a deals we classes have of asset in C&I many and brought

That's in up. thought C&I chase going that's there That's significant your perception overall right? impact But of spreads we're book find bring Again, of book. In I'd doing to equity leverage, out our our borrowers. words, yield. deals the in private to consumer portfolio. fall high-risk credit you'll not that where anyway, So the the the with and spreads. best we other tend higher just not in That's

Brandon, just to a further comment your question.

at that's I on So the came we quarter. rate the mentioned, for average third new to X.XX loans September, the X.XX for loans the that the for at If X.XX the month entire quarter. of look relative

of kind to of So more responsive current. your about question kind

quarter for the ended we where that's of September. the So month

question. Got for taking it. it. Got my Thanks

Alright. you. Thank

Thank you.

[Manuel D.A. from & from comes Davidson question Please Navis] with next Company. go question. your Our ahead (ph)

morning. good Hey,

pretty or just have about being a terms answered. But you strong. questions been you of But could describe talked bit most loan and of pricing -- any competition? of regionally? just growth, in my think just Cleveland I You kind loans that seeing with you're pricing differences of can deposit terms deposits loan little pricing continue just in

in some pretty markets. intense We're Yes.

competitive pricing. Cleveland, are mean, But the market tougher I Baltimore Our actually even are think Cleveland always opposite. has Pittsburgh, it's to markets markets. competitive. People extraordinarily a core very been

there As you more be tends to more while move competitors, are activity. there into Southeast, the

kind So there look not variations. variations of are if the overall, but competitive are you it slightly. But environment that buffers great, the

more you pointed look into of think at that even more as and for it across because credit State Pennsylvania And as just you competitive where out, compete, closer both you area. in Philadelphia, competitive as is get I to I tend loans but Philadelphia, the move So them the that deposits. goes we spreads state to narrow

from Central in franchise. results. the commercial little a deposit So really is Philadelphia evident becomes you in into a deposits. a demand as cross strong pricing on But thinner It's perspective, gathering PA the market, once the focused This thing. company it's same a type the depository very the of we're

can we've presented. see You that in it the trend

Our objective fund for operating not principal operations. be We're to our out bank to here is the deposits buying clients. our

is treasury So bankers the disbursement the commercial principal accounts. are what that they're out, getting We're services. selling means management

the that consumer So deposit side, bank liquidity consumer. then for we used be balances strive are and have we sitting services typically the the to to accounts. pay for for principal or are purposes the And for demand company on

mean able all betas the I produce you're that's how to pricing things maintain and that. So better and

Leveraging lead generation Speakers] [Multiple time a and

It's that answers all hope question. tied your together anyway. I

that. Thank No, I appreciate you.

much. Thank you very

Janney Martin our next And Montgomery. from comes question. Brian go Please your from question with ahead

Thanks loan the guys. on morning, for good taking follow-up Hey, just Maybe the question. yields. one

a I you, September. give where it just of I the said you coming on? color on for for a it's the little the -- was or quarter Can guess, on outside is Vince, yields whether yield in the production think month just of month X.XX new commercial

I of don't have handy granularity. that level that

in, you spread. at are $X.XX at anywhere commercial don't look But I think from to you, have tell can fingertips. I deals middle deal that is our a $X.XX we the credit when in coming that market typically,

Got you.

been that's consistent. Brian, what, that's fairly And

may rate look way fixed kind they at They that So at to that the want groups focus spreads and in if the a do manage an yield may space a versus yield. yield, loan, on to at looking you'd credit convert We variable fixed-rate of have curve. that loan. adjustable you look or to outright rate

on don't spreads I I have slightly that what. spread. board. of in know across kind the would we're So keying broadened say credit credit But

up, like some they I XX they're XX to No, have. points said, in asset. basis I mean basis points

to your from broad corporate. spectrum And business what the to reason of put is we small then large the be origination, book finger the would up yields that market the because run difficult new in commercial it's the on

XX, plus it LIBOR a but manage spread, a or that move I at deal reduce and corporate to we going in credit that. about perspective give at quarter, to than trying I the And manage way. helps it's large a the that continue as in So broadly spreads broaden period about to well. look you book it yield XX that's portfolio that that expecting cycle. through us more more to we any difficult from we if your right? we're So hope can't as

thinking at? for that's And where September, quarter? Got for quarter just about you. today, securities kind helpful. how the guess, rates the No, then just I or reinvestment you're they maybe next are whether of for

I a comments to X.XX Yes. make averaged The say few rates on quarter. would just for that. reinvestment the

For quarter, from last the X.XX quarter. was it X.XX in the third quarter, up first

we moved know, up. haven't As the freights

roll-off X.XX the So X.XX. to compares rate of a

X.X in there. So invested -- quarter a as October, in if that you during reference to so kind at of take just far bit of kind about point the today, the level. at The the little gives The South of yields. here kind what with of duration X, market we're that where a we we been X.XX duration we continue was look advantage we of X. investing still of investing We've sit

you. Got

helpful. that's No, Okay.

Perfect. then this Gary. about right. -- maybe for And just one how all So

any of are? On anything the away the away from if just real Or the here concentration side increased staying areas and just staying are commercial maybe given today, estate? thoughts from current on regulatory you there real focus commercial you're kind where today lending guys levels an estate are from concentration any on just levels, just

space. extremely been -- in retail and last couple I cautious the We've a of even Yes. years say, the would X.X beyond for years,

a strong credit tenants doing come across we're long-term continue spots pick do occasionally around little underwritings we those of So we'll and very very there. to volume transaction type and with retail our leases, CRE,

space there. going tail overly around we cautious the pandemic it's in been one to early identified in I as office space. that an space other have on that's elongated space potential risk the The mean, is that very a

and that, of as find an very, transaction we'll similar transaction leased retail, credit again, tenant, like little that extremely beyond forward move the to volume. very we'll So type long-term but a strong is with

little very We time. hospitality. have portfolio The is

we hospitality Yes, don't. the

made five, in loan haven't years. a six hospitality We

right? the portfolio team. that in my I cycle, don't and best you've I would -- want obviously, in is of to banking, very -- You his you is all you we're into We moving waters like be, addressed large risk to They've within portfolio, of the Gary conservative. give in choppy it places think sits And been good say office don't. a this revenue. we're credit I very to in What to this, as the Gary we buildings. in. But grow don't this time want of the have when is one urban grow we're a book, didn't position lot that

experienced same office haven't level of vacancy. have but We buildings, smaller the buildings suburban largely they're that

cycles, in think well the positioned. very everybody good a be slowdown is I And that if perform the Obviously, industry occurs. to in next other shape. So we're year facing we if we'll really going have be it way through we

same the have we think I team. So

have don't other this I effectively questions? know and more through any manage to able others. outperform you if we're So

answers that think I estate. No, mostly real the on

just last two general the Just questions.

we you're ’XX, trend you how of is we quarter as quarter, little side? customers about deeper today least outlook -- a cycle and growth seeing should Just on But not but at the this know the share commercial at we more that's that like look next But for caution the you and on among the It seeing more would your -- the you're get of seeing ‘XX. more are I loan kind in we outlook just probably based commercial just bit what you're side, on giving as the that customers, where think on sounds caution? the much among are obviously, is kind economically. in expect

Yes.

we've got clients, significant I pretty of a but shocking people, a you pandemic to turbulent time, pretty think remember, clients. to through of all the the is gone a lot lot

So the things move is I Inflation as we chain I the more conservatively thinking into think is economic that obviously, disruption they're about this real. headwinds supply are cycle, real. real,

be on our year, coverage into expectations and performance loans. which to appears base customer moving realistic commercial our into charge about translates pretty revenue think next fixed I ultimately

them we the to we shareholders get side, that through base on the like teams I'm on on So us get through. have, that customer hopeful management we're commercial our just rely to relying those us --

a strong have I customer think So we very base.

manage We time. difficult them have get a very and prudent customers. leverage They think through their they will appropriately, about business, that

the consumers obviously On low, consumer though we indicators. we the delinquency look be the the are economic performance good lagging an know to shape. low. globally, expect time charge-off stressors at side, And would I with in we're there's of perspective, rates cycle, cash appear segment but themselves, in those positions, consumer portfolio, pretty fairly if But to next other pressure in very we're to the position I be mean, very over and healthy out look I and when the this then inflationary are But from appear that there to I at rates things. moving good think even still cautious. they deplete within a inflation. with

leave know else to don't how So it. I

it's I cautious. aren't way, come So across we that because may

pipelines, credit of pipelines reviews rigorously. do our We fairly we upfront. manage terms In

perspective So are from time, what's upon how contingent going be providers economic to that's an other over impacted. on going capital and really

pretty and next -- but to So lot of tough do softened, still the that I -- into today to it's are are of reasonable good with kind feel the there's have a where has and predict are were flow, pipelines at pipelines being we transitioning deal about but going where levels to it year.

happens. see So what we'll

an Brian. additional just note And

this been new the week, into within Just pulled three transactions last them I've of extremely strong. and all

and can the was days. to pipelines rather So these transactions look three moving the able forward. of quickly with at all on they're very build those discussions, I that we're pleased some based And

on capital. helpful. one the me And Got that's No, was just you. just last for

deal just -- today? just the kind of capital post Just the outlook, and in where the buyback where in you're changes the quarter the levels just and maybe levels any ended managing fourth union thinking just how about capital

our strategy change no in Yes.No there.

a XX% ratio asset in ratio X.X%, the continue growth X.X% the just payout expect given to dividend as from than quarter build near-term as the CETX positioning. is XX%. And benefit would and estimated around to the ‘XX, the saw levels for quarter higher target the at for strong earnings generation gradually ratio very slide, more We then up on kind that CETX We attractive level. we earnings is this ratio the to in and build the asset-sensitive supported of you

I same mean, and Regarding the our first use loan the philosophy, growth. best buybacks, Brian, of is it's capital organic still

our be that. dependent quarter, So back will still we the in there's relative We to made PE peers. would to and the shares we've forward we but the we not that any this buybacks peers, the expand opportunistic significant given of still relative room did go there's level recent for significantly and peer think be think we on outperformed PE in periods, buy value to as

So philosophy But we still opportunistic. same. will be the is the overall

Got you.

look someone know Okay. efficiency The don't of is next is trending asked outlook of level, you about that ratio of being with an the And quarters? for higher kind achievable kind of what kind the you're margin still a today, here earlier, over I sustainable positive kind given the of leverage. below seeing but you operating the if talked as just -- XX% that couple

mean, as diligently quarter, I year. January interest expenses that's we'll guidance, net for upside I would the in next manage mentioned, into baked in we and And I we'll the give have. income there's just always still continue to guidance our right, say, fourth as for

improvement So and -- there's then into the that there's quarter we'll cover ratio to ratio to we or next next that that still upside into year, guidance. when

Got you. Great.

Okay, thank you the questions guys. taking for

Alright.

Thanks, Brian.

we've floor question-and-answer the like reached of at closing end back any over today's remarks. Delie to for session. the Ladies time, and And gentlemen would with I Vince this turn to that

an our thank series it's quarters. to like but I'd of was all exceptional of a exceptional been team. This first Yes, quarter,

of I work, it of and proud to right. have employees happen a Very hard in So here, that the focus results lot what work shows without stepped really our our up. team done doesn't really all appreciate has

us capital keeping for cycle. through here Gary your moving and So thank a and thank team along you, and deploying you

going very be that's think to I positive.

drive we've to amount think momentum. our we're shareholders. The there's working. results is forward business tremendous that I to positive for model And continuing of shown looking

you and our I So everybody. Take thank call. to forward next look care

we'll call. concluding with today's you We gentlemen, thank do and be for conference Ladies joining. that

disconnect now lines. may your You