F.N.B. (FNB) 24 Jan 222022 Q4 Earnings call transcript

Good morning, everyone, and welcome to the FNB Fourth 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.

At this time, I would now like to turn the floor over to Lisa Heidi (ph), Manager of Investor Relations. ahead. go Please

and morning conference Good files to earnings forward-looking our the Thank of and F.N.B. This statements contains Commission call and reported financial Corporation call. measures. Securities you. Exchange welcome non-GAAP and with the

viewed measures our prepared directly and results not addition financial materials operating most in with accordance are GAAP GAAP. alternative Non-GAAP financial GAAP in our measures to the an non-GAAP for to in and our comparable measures be should release. presentation reported in as Reconciliations of included to earnings

will contained the our refer our statements XX January non-GAAP Please About of and on corporate of to these and webcast be to the the and section call website. with materials, forward-looking Exchange will Us registration available statement and until corporate be disclosures and Relations website. posted available replay our in Tuesday, reports Commission Investor link Securities related A filed this

turn call Chairman, will I Vince CEO. Delie, and President the now over to

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

me our a our in our Vince to continuing (ph). and on Officer; positioned streak closed we FNB as of Financial Calabrese, landscape in our strong is Chief are Credit Officer. Guerrieri, outstanding Chief capitalize Gary complex performance and economic momentum navigate Joining today XXXX XXXX,

the FNB's deposit further quarter in on loan and cost strong earnings fourth per this to Bancorp record record a quarter share disciplined bringing of of a operating full by the XX% earnings was operating year management, per The revenue, closing linked increasing growth, December. and acquisition $X.XX, share totaled conversion the quarter basis highlighted $X.XX. and continued UB success

revenue the profitability XX% income XX% is operating linked to interest growth. captured fourth tangible on million efficiency XX% In quarter, below with $XXX quarter The metrics XX%. and driver ratio common total contributing net fourth return equity the the exceptional in with its as grew average primary performance strong totaling quarterly quarter's

interest asset with net steps loan favorable hikes, our from taken Fed sheet. of growth, the benefiting position the to income addition funding the reflects costs sensitive rate our has In strategic team balance and strong our

net significantly management margin well expenses leverage interest strong expense linked managed, growth disciplined resulted X.XX% X.XX%. Operating Net to operating linked quarter $XX quarter. the in quarter-over-quarter The increasing and and and positive FNB increase ended XX% and were an billion in expanded leases, billion pre-provision a revenue linked X.X% with increase in from revenue. total nearly X% year loans $XX assets quarter. in

upheld and period the a UB growth demonstrating loans On Continuing an commercial growth grew entire footprint. and whole year. in presence end We strong saw both basis, in trend, markets. we and annualized throughout excluding have consumer our diverse again respectively. geographic mature spanning coverage Bancorp, Once the and high X% XX% of our markets importance loan

conversion closed on UB systems the of The X, Bancorp completed acquisition XXXX and December successfully integrated. with

basis in With mix the despite with bearing XX% result non-interest of deposit franchise. demonstrating end This deposits, our funds which was we XX%. deposit addition bearing at XXX the year the UB of Bancorp’s Fed the points, total includes non-interest rich the line XXXX, needs, increasing of ended with deposit strength

driving introduced results shareholders. are brought fourth and as us impressive success quarter demonstrate to FNB's pleased UB product We financial employees dedicated set. expect to full benefits communities, generate clients, for employees customers with value additional in Bancorp acquisition our and these the our and significant are and robust has year FNB's revenue more to

wide strategic acquisitions, organic two of per the bringing a the assets by earnings out few I'd share FNB record our of in of operating like revenue $XX one $X.X footprint accomplishments. highest year-over-year, to by through levels combination billion of to accretive total completion billion. $X.X billion. Total and loans growth grew XX% $X.XX, led achieved of company call a many history, of

while We economic our Despite currently average deposits. four nearly the provided top a balance XX% non-interest deposit hold an of the grew environment, in comprised MSAs FDIC. by XX% growth data and bearing five in market XXXX, of deposit billion of the maintaining all deposits according share quarters reported total we record challenging also all-time $XX to favorable to mix of

billion We portion generated the over of and year-over-year, interest balance driven XX% deposit $X.X asset loan of income, net solid our sensitive mix favorable sheet. growth, up by the

ratio reported controlled billion and high shareholders' to inflationary equity period, total full of CETX of team year expenses a a ratio X.X%. FNB in contributed efficiency Our FNB's which $X.X XX%. of

$XXX program, company which returning million with even to million has unprecedented Our our flexibility common our active growing with and remaining. $XXX base shareholders after dividends capital provided repurchase share

Our strong an operating dividend more basis, XX% growth capital payout XX% for of position and ending earnings actions. remains the on a Credit also prudent to company our delinquencies and support X solid quality ratio full and total capital year charge throughout providing future with resulted internal basis consistent underwriting net reserve standards year X.XX%. footprint, the offs at with in the at points points, basis XX

credit will to we our We steadfast economic our navigate as on changing focus cycles. culture maintain disciplined continue

Bancorp employees, continued Program and and in D.C. digital mortgage XXXX closed XX% delivery enhanced First North by Driven the Maryland, December, significantly. at households high dedicated in retail have in We comprised Physicians Carolina. and production market our converted Bancorp investment and and in grew value which mortgage Washington. channel of our our two those January UB position acquisitions. Howard FNB's

digital platform, of introduced increased in our and XXX,XXX XXXX, deposit expand increase XX% The XXX% including customer multiple continue online our strategy and adoption up to expanding base, received a consumer We year-over-year over and drove business applications interactions for applications. loan small across online success which our eStore products.

happen of for superior workplace the clients does exceptional and culture the service attractive people. fostering focus provide right our a not shareholders. commitment returns Our We on consistent for where without and performance employees our productive engaged positive

Greenwich alone. XX and Brand this extensive XX XXXX than recognition. in third-party Awards, success led Best received prestigious Our Excellence has has FNB with XXXX, more regard to Since in

middle on partners. based banking commercial, direct our market These from business small and results feedback are

Additionally, Capital's is Diversity America's place one XXXX. FNB awards work regional for choice, in XX Workplaces Newsweek employer employee for national And received of honors XXXX. the Companies and Earning recently including of as with high a named an community development, approximately life multiple in year and exceptionally benefits to JUST balance. sixth consecutive America's list of for most most marks Top JUST

and Our board in portfolio, to technology, times Even in are well-positioned this of achievements are plan of we strong year's ability company's in and flexibility economic historical strategic credit performance. position, liquidity continued confident uncertainty, in leadership XXXX. diversified investments on team our our proud loan are execute we our given strong and capital

call additional provide our on turn quality. the will to over asset I to Gary now detail Gary?

our quality Thank everyone. portfolio historically metrics year good near the morning, ended remaining asset you, levels. level Vince, our credit positioned We and well and with

asset performance XX the and rated Our basis NPLs basis points, net points. flat UB OREO at delinquency remaining period year quarter-over-quarter, reflects and for charge-offs the total at full Bancorp excluding points. basis essentially XX ended at levels X year and

during I on to finally, throughout GAAP for detail we'll followed and the asset provide brief highlights use update quality UB our loan economic year insight the strategy. these will quarter We closed portfolio cycles. December. by credit into manage And cover acquisition full some that a Bancorp in more

payment ended our the the XX low off quarter past X walk NPLs point linked basis NPLs credit on levels a contractually with nearly in increase current in now trailing XX status. at of historically delinquency a and points XX% bps were basis results. Total due points, through OREO up coming basis in Let's quarters. December XX reflecting our at quarter

loan with reserve. charge stood charge-offs from provision charge-offs annualized XXXX basis point totaled also UB million, macroeconomic year million additional the of at net QX requiring expense basis non-PCD includes Net initial for or Total to an that acquired $XX.X that basis for $X.X XX $XX.X quarter offs at updated consistent points levels X million reflected loans remainder million XXXX, for a points. providing forecasts from year, were a for stand solid at provision and for on totaling with softer the environment the very $XX.X full basis economic with X growth, Bancorp,

gross Day $X.X X the million. of Inclusive of up additional PCD

Our funded down peers, million to quarter. prior our end. solid ending year at ticking stand relative compared Reflecting X funded $XXX basis the point the our position a loans or at to X.XX% with reserve of reserves strong

XXX%. Our position at remains NPL strong coverage

I'd of this you conversion the to on million update $XXX briefly acquisition Bancorp now our during fourth successful like and recently quarter. the closed portfolio UB

line as with due the Our credit, portfolio our credit impact and an in year. concentrations from their lending The standard to teams portfolio or continued following to part overall acquisition. of expectations diligently no conversion close risk remains our the book loan profile at process material of with diligence post review loan our

base customer we in forward the Carolina another closing We new provide expansive team bring congratulate growth expand We'd banking set welcome will successful and corporate our Bancorp to deepen markets. look and transaction like on to the additional and support and customers our as opportunity to opportunities these services relationships. of UB objectives the products of desirable we our to our team

in into balanced, in year trends our positioning Consistent our to another that to potential XXXX, we macroeconomic emerging further portfolio a growth our marked positioning maintain continued managing and economic the our stress problem with markets remain throughout well of portfolio steadfast approach favorable moving well consistent strength presence support to and closing, credits credit a acquisitions by successful risk, enhance managing our had and positioned approach environment. underwriting two to attractive as will credit heading to assets, We continue softer we track rating closely as proactive signs objectives. In of aggressive into and risk and cycle. closing loan

call now Officer his our for will Chief Calabrese, I to turn Financial over remarks. the Vince

morning, Good Gary. everyone. Thanks,

quarter fourth $X.X or million to XXXX. related offer costs, expenses of available $X.XX million net adjusting consolidation $X.XX levels million totaled record guidance $XXX.X per net Now per of income or share. financial The fourth we'll merger of and and on focus After the for income reached results for share. $XXX common shareholders branch $XX.X million quarter

highest assets the $XXX $X.XX. driven balance of acquisition and assets and organic growth the The end million nearly in was operating Full increase earning per billion levels share of at annualized the quarter year. UB in date. to billion of XX.X% This brought $XX by loans the XXXX X company's billion the growth of $X.X in linked represented loans also December with coming year one or acquired $XXX the at $XX earnings the million which leases, Bancorp largely of as sheet spot included

three each billion portfolio mortgages loan real Physicians Mortgage Full reflecting commercial estate Program. grew and success continued growth roughly Bancorp half Consumer year organic total sequential quarters discussed Howard the X.X% previously increased basis, the a loans related spot robust $X.X quarter. year-over-year UB rate due was of the a capping-off C&I on remaining organic half to footprint. and or linked growth strong the to with of First growth double-digit adjustable was across of the XX.X% and growth X.X%, growth [indiscernible] and this acquisitions

$XX.X totaled bearing and year. billion a year increasing deposits $XX.X we end acquired fourth weeks XX% mix the Bancorp Bancorp X% deposits of non-interest non-interest linked deposit X% deposit billion of bearing or UB excluding strength UB quarter, at demonstrating million $XXX including granularity quarter last maintained Average and for average the with declined deposits deposits, three the the only over favorable FNB's base. deposits, When

largest of XX.X%. revenue million, XX to interest by asset million XX record funds quarterly increased points, the income points increased on basis margin quarter cost was or as driven $XX.X net increase leases, of points. driver increase the earning in which and $XXX.X X.XX%, linked totaling The of Record increased a net XX yield were increased million yields XX. basis basis loans interest $XXX.X while The

the XXX approximately fact, highest loan since the spot than XXXX higher rate December over the basis and origination quarter end. portfolio X%, yield In at points was

expected loan the rate upper portfolio given continue the of also and record Reserve in March. of in The basis which rank the increase expect we February peers. positive expect we portfolio and point December the to increases had XX.X% quarter XX XX% With operating to our leverage fourth Federal quartile rates repricing, hike of

be to year the at our other the costs. again fourth for deposit customer cumulative ended maintaining sheet, continue previously the forecasted side the interest XX.X% non-interest team. to relationships. favorable bearing the of the for keep deposit below quarter our mentioned the deposit betas were costs deposit average mix significant bearing interest focus below X% On able XX% a deposit by balance and costs managing Total strength demonstrating the actively of bearing We

have strategic to our effectively campaigns able manage pricing We analytics supported data by been deposit platform. costs,

the low deposit cumulative beta in first competitive forecasting the end quarter pricing While pressures rise, continue we on to the are total of be of at XXs to deposit a XXXX.

million income decrease prior non-interest gain sold X.X% income decline to $X.X Mortgage decreased and $X.X compared $XX.X lower in or operations margins. market a sale a million to totaled income expense. banking secondary the quarter. the Turning and Non-interest mortgages million, of in with on

non-interest fees level supported a commissions international reflecting contributions million seasonality in syndications and Capital strong basis, a X.X% again of fees by with business strategy. $XXX.X decrease fee increase On solid the full banking fourth XXXX which markets from reflecting Insurance in swap this year totaled banking. diversified was and $XX income significantly $X.X decreased based several primarily income from partially quarter. offset our and million by an totaled mortgage million, lower importance businesses, other operations a demonstrating the income,

basis primarily X.X% is from million, driven X.X% the $XXX.X year increase an and third qualify basis, outside credits. from acquired during the and in equipment quarter of and contributions an increased Union Other quarter by linked tax Howard Pennsylvania bank primarily ago services. quarter the from to expense On and occupancy quarter which increase expense the non-interest charitable expense shares a operating non-interest totaled for

Salaries from and production lower performance third quarter related decreased and lower medical and costs benefits due seasonally the to incentives. employee

X.X%. XXXX totaling year full million or Excluding XXXX and in million operating non-interest $XX.X increased significant $XX.X items expense in $X.X million

On quarter's a increase operating XXXX. Fourth operating increase ago from XX% year year record net million, was an a $XXX pre-provision XX.X% $XXX.X an quarter. pre-provision revenue million, revenue net of basis, the totaled in full representing

per that the X.X% share was share at and from largely median. be year from totaled or share. Our earnings year value and TCE September $X.XX higher capital XX, book are per X.XX%. ended Tangible a ratios by the to of AOCI of XX, the $X.XX increase ended per at level at decreased peer ratio $X.XX common the impact solid the above an December expected levels of at CETX

at the Let's XXXX financial sheet. the balance with starting now look objectives,

a mid-single loans rates of continues spot projected growth to expect end digits December betas. environment customer as We at to with deposits deposit deposit management a of are XXXX, year-over-year active rising spot XX, XXXX an as on increase basis. Total level similar alongside balances in

$XXX interest is with XXXX $X.X net of and $XXX be the year million. $X.XX first to income expected billion, quarter billion between and Full between million

remainder guidance basis assumes XX the no rate rate year. of February and additional Our March for currently both in point with increases projected the actions

FDIC the expected is first it effect to for $XXX the rates, million, insurance between which assumes $XXX guidance an Full range. expense million assessment an $XXX mid ratio Full additional goal $X and higher insurance costs, remain in million with million long-term is the FDIC's $XX year operating non-interest on X%. non-interest to deposit year of income be million to deposit million reserve meets may $XXX quarter in in basis the reflecting fund

the below XXXX the acquired year-over-year the to XXXX on Union range range This X% XX% to efficiency would expense expense in expense operating full guidance growth guidance, our At X% be and base, increase year basis. be X% When figures. ratio full implies midpoint the a of excluding XXXX. would FDIC XX% of year the for expense

is in between start $XXX first expense is non-interest compensation expense long-term new compensation the normal the due to of year. higher be quarter, quarter $XXX million taxes largely expected to million as The seasonal first to stock the and payroll the at higher

and growth a and net is guidance million year to million provision environment. loan CECL dependent on is macroeconomic softer from builds $XX Full $XX model-related

be full XX% for assume investment does activity tax credit effective should may and rate occur. tax Lastly, any that the which between not year, the XX%

to will turn the Vince. I back that, With call

Vince. Thanks,

strategy year, As our our we serving focused and on new stakeholders. we remain start the executing

with capital effective Vince true on the this values to operating provided to positive culture. risk generating do for our based most efficiently delivering on focus returns the by And and shareholders. adjusted leverage staying in guidance financial deploying a will We optimize way our

will believe to excellent our want I team, contributes the our I of performance today, at Every and the close that who we positive. developed of have strongly employee together. outstanding made we and company, we Before win culture FNB recognize employees to because dedicated to success the continue our

for questions. turn With over that, operator Operator? the to the I'll call

at with the Frank session. your Sandler. we'll today time, gentlemen, Please And from Schiraldi Piper from question question. Ladies and [Operator comes ahead our first Instructions] begin this question-and-answer go

morning. Good

Frank. morning, Good

Just release you geographically. footprint. strongest in about give little coming guys curious little the a where curious And saw you talked out the specifically of what can you the bit growth a the just color there, -- if growth the more seeing percentage of on you're Carolina commercial

the what have in the specifics They Carolina that year. exceptional contributors don't all specific but cross-selling. from has growth. in exceeded can [indiscernible] know just big I our their – contributed planned and get, year the you year in year throughout I had finger those of tell we tremendous Yeah. we an all were objectives loan a They for the tips, areas to had

capital addition footprint. products to are loans and able eliminating also So investment in throughout markets, that cross-sell to and trust insurance that products,

So groups has us were a this driver. solid were in market for given they year. share always market The Pittsburgh our been here. a significant Pittsburgh [indiscernible]

also want has two last Charleston. in down I exceptional over job expansion [Technical two our And an there The market to the team years years. the and done Difficulty] last include

seating region we the to In have were huge various areas -- fairly takeouts, market. the through the contributor, but a able those So past, portfolio Mid-Atlantic has contributors. substantial in size been of been that the reduce

year. we headwind So a coming little a of into had bit the more

globally, pretty have we softened I And pipelines a we next consecutive growth. you of bit two as little that but had of kind move solid into tell will year, the quarters

year, quite uncertainty conservative pipeline player about move a with low being a as more we're little bit And the side. next down year-over-year, a we're and economic seasonal XX% of point. So into typically we careful

geographically originations sit, terms Frank, in though, of spread barely it was excited out. very where because So we about

with assistance and some opportunities Northeast little slower heavier offset and some from the base, in a there -- some CRE in there the growth the they Midwest to got have a of to markets more activity because seems in of be region. the declines the Mid-Atlantic industrial We

kind I strategy been our we've longs all out. to And grow. all has think said it of a as So that along, balanced very have to

actual on portfolio. the Sorry,

already specifically Thanks -- know, I That's income. the of rate sort still seems on wanted number don't the normalize to get the great. follow-up this midpoint quarter, year. And I of fee next color. for guide the item run can sort guide, the other -- you that maybe like even line if sort It you're then at of of I all mid-XXs for just at on

And so can just see any takes and in and some in some where where weakness you kind of provide you fees if growth curious might in see terms we could puts XXXX. further of

comment, could Frank. I

to guess, there. was third from there's solid of quarter. I the slightly non-interest $XX.X quarter, for been income want in normal otherwise the that been down I Mortgage important, more million rate One too in high sheet banking loans mortgages portfolioing we income have point might past. the We've the of out it's down. that Just growth level, been seasonality for $X.X did the coming has thing at million, selling is higher. again balance kind adjusted

and with capital compared We quarter bit $XX banking to quarter, fee strong syndication third solid little contribution a consecutive side. offsetting from So partially contribution No fees. mortgage for the lower quarter, the million. is markets very the higher a reduced second mortgage that revenue the had the on at

the fees As the bit consistently of always syndication you in can piece of sources lumpy. lumpy are lumpy, be some ahead, same swap also look at they are kind like level, little come a revenue the that

as That's changes deposit a had quarter the of again, to as fees mid-XXs to rolling is made kind we through some for what numbers. guided announced really guiding consumer we November. of which to we in of us also So, is the that that function well kind just fourth

the far today. conservative capital you So some look, lumpiness with a it's of as kind on know based would of certainty kind kind say, of component. markets I what can't the we as predict of But

mid-XXs kind So of at that that's why guide the level.

Frank. Hey,

Carolina So produced Carolina Chris last three our over years, the net both roughly [indiscernible] and XX% the loan of growth. South Carolinas, markets, on the

any No, I XX% buyback guess, closer Speakers] and if expect that. wondering reach CETX wondering of closer then just move And trigger I specifically activity through when strategic can sort just we we if could [Multiple And changes getting Great. and just you appreciate that you're Thanks. if Okay. as to that return and ratio about lastly, do it? I pass XXXX. this through capital additional level could -- greater

XX level just Yeah. I the capital the never that had term say, we've in near would creating a here, been flexibility we in past. earnings we've build generating expect to of really given that the

deploy I we all So said [Technical first and is as to along, loan use growth. we've strategy our mean capital, got same the Difficulty] of buybacks. best the into as it

how how growth it more much do So opportunity strong buybacks. you'll down, on slows or depending have the to loan is

it's on for clearly the table XXXX. So

to optimize As know, shareholder on fully with you managing in just capital to shareholder committed way remain we a interest. fully aligned value

So We'll we be opportunistic be through that. go looking we the as will year. at

in think we capacity of or I $XXX remaining so have in about million program. former our total,

So we evaluating are share past to something pursuing basis. the on daily a be and definitely clearly, XX% we'll that expect build as buybacks level,

Great.

Thanks the color, Okay. all for guys.

Jared Please next question. Shaw from our question And with from go ahead Wells Fargo comes Securities. your

morning. Good are guys. How Hey, you?

Jared. morning, Good

to group to a has sustainable drive doing that among give going Can in I your been we you with how sustainable help -- growth comments your utilizing really you is deposit best analytics avenue far. of performance so as beta forward. be deposit and your the starting that you're a level us base. guess of the getting how Maybe strong, or the are on that Vince, go Yeah. and examples some

made we've before. quantities Yes. large our This significant in talked is analyze Delie Steve ability will and that tell to that of data. Vince I actually, in We've a investment comments his you, mentioned about

data. the have We

be really that the team of drill and the We've heavily to that and it systems. over us team invested last client manages governance We that solutions. expectation provide We give early to area to use or understanding enables into and years. five to clients have in a able with and the better an us entire types behavior basically that we have them better of six

answer the an and And think I we're on stability the deposit franchise. outstanding growth, deposit

I very mix, demand to of strong. granularity stability the think is at very is The peers. strong look base the deposit if you mix the the relative The is strong.

a that that portfolio not a size. just there's of So into There's goes one bullet. managing bit deposit silver quite

So single our we that depository analytics may we treasury focus use are analytics us. -- relationship don't We product use to or on opportunities management have customers to product customer customers base. single that fuller within focus with source view the that have a loan a

We need the based helps use tool more the direct to clients us analytics growth. to tier upon resources that drive effectively our

products also services tool present our offering we with the our the we mobile that engage and so analytics had digital views my eStore app eStore in XXX,XXX on into website on the embedded mobile clients as comments, online. can they is mentioned application. our We use to I the and because

of the customers all and and to helps that deposit the the with, the of that outflows -- right So mix for the us engage deposit there it's and manage deposits. betas growth

that that that deployed the portfolio. better flat That's it's answers Speakers] pretty So really complex the strategy towards segment of driving deposit question. your performance and that set are each strategies a tactics Hopefully, geared we in underlie [Multiple pretty in

of scenario? are to we in And steps project you point shifting protect hikes. taking Maybe your future? any more you XX if in looking That more that or start expectation an basis couple expectation a What's expect margin, was margin for DDA the you at for rates lower color. to diminishment great

a with Yeah. in would the big company. just non-interest I bearing deposits, focus again, the start are

that mean, So our team effort. with lot my for about or All analytically less line talked as were front tools X% and the Vince ability, of our quarter on customers takes as relationships the well you so are that prepared in I can a very remarks, down that strong. here see the EAs as our

lot going we've existing to of relationships We're PPP. process and that goodwill with. been broadening new We've in customers customers with that created a

is our to -- customers' instead moving that looking relationships willingness and talk and to us So to valuable. of money move they're those just if money very

on the has team the customers. very to fourth active Talking been throughout our quarter. And line front

well side large corporate the We the fruit have has been bearing deposit lending quarter. on the a as as been side. during initiative That that's

them So DDAs to is sustain and goal the grow here. from our continue to

We a have XX%. percent full to deposits of a slide in there from that shows up XX%

to deposits. Our non-interest team work to bearing is incented hard those grow

a lot don't strategy, focus on tools of margin. our mention place, you asset also have a active in why but preserving We liability

Yeah. I mean would for treasury at six to studies with expect, so hedging, decided and of amounts I mean did were months we year, say small really levels at as I you daily. on I some the looking we and opportunities would been last team we've hedging to don't or because know, rates. but what expected ago, not where of more put was happen our

off two and a that and protection locked the became in are then just the fall have or quarter quarters cliff year expensive. going don't You when one that was to go back to everybody rates that very far into

we've some put on. So

asset our neutral. approaching sensitivity Naturally, been of has kind

down asset look or interest sensitive rate you our you're at XXX, the for plus so to If XXX. like position, X% minus risk

down coming sheet. been we've just balance the organically, cash as of of the natural kind kind been of movement So deploying it's

So swaps it makes period. fixed we'll the balance done the it it But And or when continue price so us, to does us the be we'll over of look continue point, We've points at to done. sense sense received put sheet. at recent billion this haven't Jared. $X monitor smart on about sense. something to But to load it and we'll hedges it, to made up for about if we'll make

So we that have there. component

and net interest base. income down, is you natural as sensitivity know, much asset at But higher the coming a

that. of of off coming kind it's So

more is move a that having positive So forward. lower rate interest rate interest position as a neutral risk and risk we

we deposits So and environment, this main any to have hedging and that monitor are the we'll continue make always sense. valuable. more even in we're evaluate But as valuable opportunities

success our growing a in So will bearing deposits, team's those and key focus. us, always non-interest for that which be is

Vince, state maybe, What's capital your Thanks. sort on of just for current what's me, for the Okay. appetite finally overall? management just the bank mergers And side. here? of the of And view M&A

think be want here. I run banker in I investment the to But an short wouldn't

I XX%, AOCI that have in given we're environment. not it. fees, that's think that to we've interested substantial deal And do it's happened is been book tangible Investment a pretty accretive value. with level what's general, in challenging a was becomes banking repeatedly doesn't very relevance that down stated diluting challenging to it

at become We we back have flexibility dividend loan more Vince operating payout here if that things XX% look could and basis, the have you did we we're the in shares of a growth before, XX% reins we've if down to mean it. which XX%, as never -- mean unheard we ratio slows, of number ratio. took said, I capital payout had aggressive XX% an on buying

have We sure benefits incredible shareholders. moving our it forward. make flexibility we want to So

is of So returns we that move up our the making the at stock sure making can shareholder moving smart we're capital just focus so and price levels with that repatriate that's forward. and driving decisions appropriate capital strategy some

Great. Thanks.

down. the of chart sensitivity shows see did add risk. Slide to time Jared, and there kind it's how risk a we on the moved go XX, interest over just interest can rate that back On rate you

XXX, plus XXX have plus shot. We

to organically come the You can see year, to. close the of end it that how down point neutral has out by

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

Question morning, Thanks. Good strategy. funding everyone. Yeah. on the

flat. outlines billion $X.X loan the about of growth with guide So deposits

borrowings? it the book growth, outlook loan to bond that understand what's for funding or wanted Just be

work. would to cash, some say still Casey, have we I to put Yeah. excess

that So the deploy we year. go as through we'll

is a -- guidance if XX%, get the very the year, kind loan-to-deposit end think XX% to look in for the or down to our which of of at ratio, us. you plan, maybe in I our comfortable still level XX% by and we up what's

have borrowings as cash, of of combination a of So small very get we level the the and comfortable might end deploying But some the levels. year. we loan-to-deposit those towards overall with ratio,

loan-to-deposit And guess is mid-cash Okay. what what guys well to follow-up good. just is as you I as position for Very a is, too comfortable a as ratio? a that high

and open in that started of we I we XX%, promotional got down. some get types when to up some it the actions at those And kind about we Well, mean CDs remember point, bring to I of to things took uncomfortable. past,

history, saying that that's to level, the So things. doing we decided but I'm when start was prior our not

got and options you strategies we we point. at So should other at XX, XX-ish you if I that would think up or to look deploy

is, disposal deposit. margin at want We give in how you The to our up have this environment. question drive many to much tools

good. Very Okay.

to just Casey, a figure front clarify, don't have of Casey, I in me.

there's balance the the at sheet billion look our if year So of deposits. $X.X of at interest-bearing you end

[indiscernible] being cash growth the go. to that would would be deployed loan So the support

Yeah. Understood.

positively coming apologies you Okay. expecting beta versus missed Cume year. updated on updated And Cume were up? what nice I Any very it. this ends thoughts beta then surprise Any if is in where

And Yeah. right? Casey, mentioned comments we In job field overall, on the kind well, managing at my in prepared deposit at remarks, of I team betas, done I XXs of look our low say, would strategically quarter. the an a few if third has the end kind I admiral costs. think of interest-bearing

daily rating effort It's relationships, customers full as effort, about bearing. kind the we're lot would customers, for expect. It's you managing relationships. building that talking of have to While rates being smart a non-interest of

in look cycle. active the It of down you in beta if versus an the today of very total by XXs been cumulative at low will we're process. continue the the the the end the of end as the high hiking XX.X then We us. on the active So here kind And of year, be for projecting XX% quarter. by midpoint we year, it's you what first slide, of kind process getting guidance as will is into ended kind to the XXs a sit last of about be saw our

Okay. you. Got

So I apologies missed that. if

So through what cycle XXs you're thinking? the high is

Speakers] year, [Multiple pretty of the yes, of end kind it's the At

Okay. All right.

for one Gary. maybe me, for last one Just

guide XX the provision to XX. So of

a You environment. struggling softer guys of mention do macroeconomic CECL We're kind all modeling. with

wondering that -- it Just is, softer any be cetera. you et can if GDP, on what unemployment on macro provide color and how rates,

which the impacted Yeah. much to provision economic forecasting the we board, million. And the softer $X the during It's tune in about CECL quarter, models, pretty saw some across of Casey. our also

got through we've that So built XXXX. in

of the to portion across a where that pretty year. is we've So good guided

is as as within talked naturally other we've the move we'll growth a numbers And bit past. naturally in loan as that far other the there. the range, The is little those -- loan driver growth

Thank you.

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

morning, Thank you. Good everyone.

Good morning.

reserve that what XXXX Gary. $X your Sorry, I million say last Did into just that wanted the you for is to built build clarify assumptions was comment, provision?

The macroeconomic was forecast I'm in No. changes million CECL $X sorry. QX.

Okay. or I in growth is charge-off activity? apologize. a to All loan on build right. you have just guidance relative what would thought Terrific. reserve Do kind how be of the much

growth half Loan is impact is about it. a third. of about CECL Yeah.

more -- We Okay. you. get the much of we we've first little if just of a just what what and the margin. look after based margin. a accelerated talk into expansion then that maybe how lot the of talked in on in XXXX All the you're kind interested be? thoughts back betas, the you continue your your quarter terms but the interested on kind would I can to Thank expecting guidance, right. like could but pace about deposit in -- the bit of, how the rest know about just contraction actually would do of And point

I The for additional Dan. of March again, comment outlook hikes points an then that, rest on year. in actions to restate Fed and XX Yeah. and basis of no just includes the the additional February can

on we're increase fourth we they're our but that there. in and movement Our from basis guidance level second would the point a plans, imply single the maybe in at peaking of the margin were based in digits what's quarter slight talking X.XX quarter,

tucking peak, then So in type similarly, level. it there's the other on point comes a And some little but from we're upside bit level. the single basis still to down that that side,

into baked what's that's that. So

Great. Okay. I appreciate.

comment. just And Terrific. I again an to Okay. earlier clarify then wanted

said an you the guidance And you just of your be I stay you question, under you assume that was would ratio midpoint think likely there that kind expense original what XX% do is XXXX. I heard. it if that's -- I a in how make think efficiency or would I that, like under of want had sure to XX%.

So I is you guess be to would assuming XX% your expenses an come in about under accurate where -- you statement? that expect expect

our the of Yeah. different kind right. all you're guidance very statement. Using the an across categories, accurate that's That's of midpoint

that that for lower stay or we ratio a under might if efficiency becoming XX% the think is environment, to goal over. And into drift get longer-term back rate kind Okay. of a do bank you

goal it say forth XX. macroeconomic be over to and continue And in the would company. would under with our the factors, margin swing reinvest based could to I changes XX, upon in the back

low reasonable say, kind would Yeah, be of. I XXs, a longer-term would

forward, will the we required particularly betas competitive, to and stay technology for I for investment the what there to capital maintain with not be tell in us keep you as doing forever. pre-pass it's But a doing to will in and move that margins us future we're

we to have and a we're for for our we have time, period we're keep very benefiting. what our We're organization world margin. this the do, the So to change. good manage to watching in going to -- But going is obviously, and

we diligent we on help. to the So control, continue expense reinvest in and

Sorry, I didn't.

would No, no, $X million. savings -- of add targets cost which kind the is mention that's that, good. I XX, just I to didn't for

of past, I've then continue digital improvement, about I process kind and a a to disciplined variety de digital improvement of say. talked invest, know, initiatives the thing and side our infrastructure. expenses on project manager some And one would I the novos of add, Vince other we're said, in you should As in of kind as of

recently the process corporate-wide of internally, space a resources a adding it, the renegotiating additional always focus to reorganized had drive on on We've process focus improvement improvement. But side that, with facility little some we've bit optimization. vendors,

low think as move type think, sustainably given have to forward, stages of RPA XXs to still you us but that also efforts. really opportunity there's And we as drive lot forward. that, of will those we're further to, contribute I technology go early in the deploying efficiency all a allowing I in the

color. Terrific. That's for the me. all for all Thanks

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

it. Hey. Good for of most taking questions. Thanks morning. Obviously, covered you my guys

Just a here. this up couple of quick ones to wrap

a some terms the Carolinas, Vince, pipeline at the the you bit about look of we there's et Philadelphia, where just years. Just, of mindful of mid-caps been in as a areas bank you taken we mentioned in or focus kind little for should opportunities and guys of, any that of of footprint, some the maybe kind cetera. like out like of lot something couple today, But last geographic XXXX over stuff be

to -- of would you anything radar that, that at convey point? kind Just us on that's this like that you your guys

there. have studied do that Yeah. perspective. you from I we mean a lending Philadelphia I will tell office We an commercial have

model it. the corporate market, competitive middle of to also number There expand MSAs right? continue looked pretty in companies We there's at space. when The dynamic changing. opportunity keeps we It's think the climate. we think our high. domiciled I because of score and large to ran now Philadelphia, are fewer the plan some Our is there competitors, there,

markets it seeing to that tremendous to And as Basically, had Charleston. will opportunistic area expand. are continue we're an we there that other into We've launched success several in boot.

there. continue to grow plan is Our to

areas expansion. novo there's or shattering expansion office novo pretty a We've movement but are those in much earth no Richmond. commercial And the only Atlanta. retail that loan We at and nothing opening production de are we're studied looking de focusing on,

growth immensely the may thing existing have other are opportunities. quality found And growing we've small then there of us footprint, the ATM for our high expanding strategically we done DDA, was I think additional not But business is with opportunities extract our rollout. that's helped we the What in [indiscernible] density. to retention customers increased where that substantially us that

and So branding direct we've done of ATMs both and through that opportunities ITMs. placement

So our than our XX% more grew across ATM network footprint.

X,XXX So locations. we have ATM

So out Washington Virginia in Maryland, XXX of and Baltimore and and then Northern Virginia. XXX D.C., those North South in Carolina were rolled another

existing marketing plenty distribute there's to of delivery our and to that's our from individuals footprint supplement us open Anyway, and channel for a our and then the to perspective, branches cash think geographic I online. businesses small continue for enables channels accounts eStore to within strategy. we're physical to with trying which other grow. opportunity And we're So

Yeah. I sense. makes that mean,

XX it are It West betas constraints? a smaller. area -- a outside deposit seem Philadelphia, coming of would to just balance around lot looking less lot are especially for a up at guys like as would a lend, like willingness the coming value lot sheet New those the attractive lending there Virginia, are there's South more the where there, loaned you and to pretty proposition like much sheets mentioned, from opposed like, corridor, lot the a talent more balance The competitors though, like from right, you York probably in markets have seem higher. some So the from

think Yeah. least at management well pretty through treasury is scores surveys offering, [indiscernible] And other I out our and respected. as it

proven deposits the of and So garner the management go I that think look from non-interest become income We Southeast. our the we've accounts principal go operating if get us lot as in well. in in, And of enables bank. to treasury was we that We cross-sell the that company, you Southeast products well driven expansion into the our the growth a moving at pretty into stand services.

bit our of was there skepticism compete. quite about ability And to a

I think rest. to we've that put

in various it's If fairly and it's the categories, growth very you substantial been look robust. at been

footprint. have So some density our seven we have of within the that to go product into capabilities as well states don't markets we the existing

activity just And any for you also year? just do you there, just at tax like for us Thanks move an with guide, standpoint? remind you last quickly what credit look then can effective activity, no the Great. looked forward assumes what guys transactions typically that. last if on And just me, it says the tax from investment rate opportunity

answer. ahead. Go C it’s I Vince guess

No, each it's one have don't don't couple 'XX, in had a line think we we year. I some for mean, in but in a I had mean, just would business us, I 'XX. say, of I we transactions 'XX, maybe

process it a positive it's I don't year. want business put guidance then mean guidance So may to an have we active this the there's do, and some we additive to there. We there, if into just

credit [Multiple or more it what? is Speakers] though like income tax housing like that like Is stuff

long energy gestation a Renewable may typically have period. tax sold credit

So of there's time lot long -- finish a line. to the a to takes it get

solar panels. even chain with So some supply issues the

those of some elongated projects. that's So

Perfect. guys. Thank you

you. Thank

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

Good quarter Hey. Congrats on nice guys. [indiscernible]. morning,

Just one clarification.

I'm it think I was you consumer. commercial, to it pipeline was guess, is I mentioned more not D, sure speaking were you -- -- XX%? the can you just the if Vince the

commercial I what dots those but on us just an bit update or now pipelines. kind consumer of give softer, they're just the whether connecting here just how know Just it here. trending they're was and a little

was pipeline, This to is I commercial and non-consumer. Vince specifically speaking Delie,

pipeline. that terms on That's pipelines production a and so when comparable we basis, reset. tends and rebuilding of We're that, just what and taking it, at they're rebuilding moving are down strong And look out of I had the -- are our in very the said to have to we period, slower given of So a into it economically. quarters seasonality illustrates you down. seasonal we're two XX% to still something where XX% that all

I to see of to for we that our think, think a uncertainty, be little lot while there's a the right? borrowers bit what are see until back. I build here on little it's sidelines start a to happens, And going

today? second trending to in consumer on Yeah, And then is that how you. side, Got the quarter.

pipelines, there seasonality Consumer Yeah. as there's well.

kind it's say. So tough of to

been I online. seasonally, a down production pretty consistent think there's general have more they've maybe the bit. coming in little where with Mortgage, been pipelines

balance terms In take opportunities to us on for on our of sheet. mortgages rate adjustable

that growth seeing category. we're So in

back to Direct seeing here housing build the normal through move tends in up space little end of at sales season [indiscernible] consumer, on the March. as to we improvement of we're that now. again the But bit a up lowness pick home starts fees the

much pretty across So up. is it's a up little business Small tough to tell board. small business is the

of momentum good the some have markets We that we've number entered.

the good a $X there the and have a positive billion, – to yeah, Carolinas region. the portfolio momentum foot [indiscernible] to it’s some Atlantic over we relative It's are in fairly total but really We seeing commercial bank. not sizable

or Maybe income Thanks just inside just other, for the on the color. side. guide the two the fee one on

the about your on we kind as of level you -- kind year? on can on kind just just thoughts trying activity next mortgage of any guess, of the for sort year being of give you're throughout what and how point viewing saw I given obviously low think the high to mortgage, Just a you thoughts year,

us better world to the little a tracked what a a number always better forecasts statistical basically, We I going what that think to of turn are tend where a I not than -- that a over to do expected better, think to kind do Vince in I'm is minute we from are. tells globally the this be. mortgage lot typical we've of little sources the expectations the business,

So geographic billion. program I now success originators. portfolios in attribute $X well We've over great grown substantially the had that had dispersion of that to as we our that segments Physicians certain

like there's go we dispersed. markets have little Where markets there's after, that generally the but tend our than region. Carolinas So to certain pockets the legacy markets and have housing we also better Atlantic originators that

year, hedge we expect think we'll market been overall us earnings a that outperform for has I that the servicing I think I would good this that probably have again perspective. the an from portfolio

ahead, Vince. go So that's helped but us

had others a of couple You've back.

kind was look $XXX overall to I quarter, production the for at XX%. to going now seasonally of down in million, Yeah. the but fourth quarter, just add third

be So [indiscernible] our to and originations industry a kind of high-level the XX%, baked like expectations Vince's point, is forecast now into XX%. down guidance is down production right our for to more

that. have to would to we do we the done past, we continue said the expect So outperform like and industry Vince that and in

Got you.

Okay.

So lower. little a bit

XX% kind looking there, about year-over-year Vince? of what right, talking is You're at you're

right. to year year, full full Yeah,

Perfect. Okay.

pickup both in just that. thing. in in seen mean, more rate, mortgage lowering I one just interest with and of have consumable, the a year lockup And the saying XX the we volume

December, said you yields, the deposits, were tried the exit guess the about to just on guys were quarter guys deposits the on like you the as been far And were a know of of me, you of make month where I they the quarter for beta. What origination talk on there's I exiting thought were that think sense. the talked but as lot where No, you cost X% betas to, deposits? remind there? I cost in loan Yeah. yields for of guess, about where the -- I I the but they did December, the

ended XX a year at costs deposit December ended interest-bearing Total about basis deposits Yeah. X.XX%. points at and

Got you.

for on Perfect. just me the Okay. And deposits. last was one

you know they it I being the the takes guide are. flat, You guys where talked talked to work mix. I the just keep the about mean, deposits about relatively

bit? as that on the do you you you throughout where number the reset the you guess to your kind are you DDA expect think in to? down this now year? come a I kind kind of of you've forecast -- guys can have you maintain mean, Just or level I look efforts of do Is that

in to hard into some mean in and as funding shift some there's honestly. to been CD. mix staying grow it's into I key us, We're work shifting source CDs of still of going that the mean more there's and the expect, house. you been for that is in side. kind commercial maintain would municipal The I particularly

clients. it's And said new in it's little bearing existing the the also deposits, earlier, clients, with big I So company but a moving a in like bringing bit. non-interest around focus

as existing we move a But you the have deposits into throughout to of book -- Brian. really, how to pressure [indiscernible] year. in be extended going bearing things non-interest period on mean, the high play out we see I there's with rates,

going that really to least the we're going have ability recently, work we're but what to seen the think balances to because our we've what of So reported doing doing we've outperformed at best I to profitability we're those maintain our and through keep mix. drives to really

You are right.

two at is year base had efforts you're you've all money in. the you guys over with now higher taken or And the the here last have a much

granularity interest-bearing considerable deposit in base. that There's

some So Brian. we hope -- there, there's

I got you.

Okay. Thanks, guys. Nice quarter.

much. you Thank it. very Appreciate

go (ph) D.A. from question. with from Navis question comes Please Emmanuel next Davidson. Our your ahead

have the are you about growth? Portfolio? the on? Most You billion, it's color in would First just been over on Any morning. Good answered, Hey. of kind $X What extra a reset of great. coming could questions just but there kind my Physicians loans like year-over-year be give new like of me said

out start program itself, understand. the I'll with so you

We've a loans job. platform products have for on mortgage our a digitized offering eStore terrific dedicated product that out physicians. done We the They've space. set a in team of built bundles, originates the a

product the the we've is, we that's can very I you very, mean that on promote XX% XXXX. portfolio eStore tell offered on I the use electronically well. since started fairly CAGR the we to and this significant, digitally done it's So and eStore been

nicely. grown it's So

originators with the and then effort started the their and We we the up supplemented offering digital first campaign. set with

up at Mid-Atlantic North households with If the look Eastern physicians, in region you just Carolina alone. we're XX% and

billion year market. So billion. we've stands $X.X those had at production at year-end. the some full over It's good been was portfolio The success -- $X.X in

very and be continue those we feel our with households program household capabilities and and additional that the with penetrate products to So will digital worked high-value are our in has well that for analytics able that us, confident services. to

program good a portfolio. for it's is that credit The in stellar quality So us.

rolling also of as business We're equation out speak, we the small practices. side the physician that for

as low. So to activity that's get we're working we into we this XXXX, see something to speak, and that there some guidance base growth start we'll as

I Perfect. that. appreciate

So you're Thank it. building on you.

back I'd to And end Delie Vince turn we'll that, today's over for like with any to gentlemen, remarks. question-and-answer floor ladies closing and session. the

We questions the for all Well, interest and had year. I'd on your to just really like we tremendous a thank cylinders. It everybody good was today. hit

that into come in a and effort doesn't really company the this think employees. position our good without I moving year, a is tremendous from

Directors and thank I'd and employees to of So support their leadership our Board all and for confidence. of team executive the like

four can deliver or proven that on over of what the keeps and a exceeding think number deliver my in terms in of what we employees execute we the I our this we've field. last and expectations five company levels, years,

with really shareholders coming. to thank to our want and sticking the supporting and I forward thank So we're looking them us and us for

the win are, together. to So we're there we're and matter challenges going what no going get to

much. thank very So you

We that, And ladies call. gentlemen, conclude we'll do conference you thank today's and attending. with for

your lines. You disconnect now may