F.N.B. (FNB) 18 Apr 242024 Q1 Earnings call transcript

Good morning, everyone, and welcome to the FNB First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Lisa Hajdu, Manager of Investor Relations. Ma'am, please go ahead.

Good morning, and welcome to the conference call.

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

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

today to million. me $X.XX Guerrieri, Chief a Financial produced Officer. FNB operating Calabrese, are totaling shareholders income quarter, our Gary reporting Credit Chief net available operating per solid share our and earnings Officer; of common $XXX and Vince Joining

Our and at our strong Clicks-to-Bricks resilience, the fee strategy forefront credit balance sheet continued income generation, were robust results progress of this quarter.

tangible evidenced our for during the at X%. flexibility by optimal volatile quarter all-time equity remains team FNB the high period. sheet on of focused This rate physician Our an ratio first is management, balance interest ending common

the high Tangible X%, remain is non-collateralized uninsured on levels mix less X% strategy. FNB growth remains ratio value deposit company a and our growth X% deposit remained prior reached a superior driver which book of as XXX%. year-over-year share liquidity of than key tangible favorable with book and record and basis. addition, a of solid of $X.XX, total year-over-year our to maintained loan value Deposit a strong growth cost quarter expected to of In per XX% at reported an value similar increase also peers. to of coverage deposit

$XX.X decade mortgage, Our noninterest income a investments FNB management markets result level. continues near of in in record syndications of grow capabilities, achievement management, loan the geographic and strategic the our to international expansion capital and banking, including our This launch is markets platform. wealth million, capital the debt treasury of a reaching

Our on $XXX stream, one having of model diverse million basis. noninterest benefit of over another complement has the diversified the various business to recognize to $XXX which revenue enabled an grow during million cycle. from income XXXX XX% annualized in We economic points

experience omnichannel product creating process, of reducing an keystrokes can application, number began QR open XX of Clicks-to-Bricks and digital along and new our customers Looking common our our and for in for diversify with with data our with evolved with analytics use enabling future. What increased ahead, That groundwork income to X of products treasury products FNB's also our well eStore. application has as the success the we further merchant included our of services in decade code for laid significantly and with continue AI products the enabled to as boxes has the enhance launch and to with our streamline investments payment proprietary services noninterest our application, Paired the today bundle past into capabilities. This we efficiencies the will clients. plans vision bank people management, strategy. infrastructure

and also driving generation. enhanced solutions in align retain for to Our analytics based lead data through investments leverages attract revenue high-value need for a product us the our opportunity in infrastructure upon and customers helps FNB bundled manner, offers strategy which clients. growth our

enables machine learning deepen developed of our attributes, at-a-glance our brand. XX,XXX Our proprietary tool snapshot have to our billion to Opportunity utilize their one-page our we This offerings and elevated XX employees need. that a lead product utilizes customers, over IQ, data-driven our to our common enabling analytics the customers, and knowledge. Leveraging offer and loyalty can aggregation data product stores with conversation penetration insight more relationships produce AI to enterprise data across in data effectively. We our records well-being including our warehouse scientists within score data client to improve to best financial proprietary through our next overall to tailored an app, and increase

process. I standards current we to information to gain risk over now and As remains our our credit Gary on turn new management will the continue our call additional credit FNB metrics. and underwriting relationships expand to in consistent Gary? households, steadfast provide

the and XX metrics prior quarter. bps, provide the quarter Vince, NPLs We charge-offs points. I'll ended quality update portfolios X basis Total at a delinquency for providing a to you, loan million, finished our quarter down remaining provision with our and charge-offs. $XX.X basis quarter at the stood overview environment. with strategies management solid at bps good morning, OREO level. current for XX an CRE focus net asset level point everyone. the and our expense XX with around multiyear risk conclude of X from growth of points, an basis and end Total decreased on at Thank credit the and

our peers. When and to $XXX the position flat compared at at remains to quarter, our million unamortized or coverage at relative position discounts. strong acquired X.XX%, stands our reserve including inclusive discounts, funded reflect of loan XXX%, of the continuing to reserve loans, ending stands NPL strong Our prior X.XX% our

maturities, and basis, across and and end, delinquency overall footprint. At market quarter at on continue CRE portfolio to performance improved CRE monthly review continue the and respectively. analyze XX nonowner-occupied NPLs for We closely slightly very points, our remain monitor nonowner-occupied and low the upcoming basis largest exposures to portfolio, XX a

basis quarter. Net solid the performance X weighted CRE the respectively, the Specifically providing LTV, for NPLs office X points, additional portfolio XX% X to the portfolio, for declines. a quarter reflected and review recent prior for most market at reflected to and related with full points, nonowner-occupied basis cycles. On potential nonowner-occupied Delinquency underwriting, which protection to outperforming underwriting continue our we average were consistent quarterly and remain allows in-depth consistent balanced tests. stress focused a charge-offs economic basis, management, our perform portfolios risk our portfolio as well on sponsorship. reviews maintain as various us along specific well-positioned confirming a throughout We portfolio of strong credit

good a economic asset quarter our scenarios. In downturn, charge-offs Our our stress quarter's various our diversified economic stressed XX% covering to confirming this again quality levels. that withstand have lower ACL in projected charge-offs shown portfolio prior closing, to ended the of testing severe current the at stable provision results us approximately with for compared again enables our quarter loan and results net metrics

tenured Our which loan economic from experienced have many management being managed through proactive portfolio further successfully continues to remain stable by teams and and enhanced banking cycles. benefits leadership, risk

approach maintaining continue geographies, credit consistent to loan through to diversified the strong now Officer, philosophy Calabrese, Financial underwriting his We our seek over cycles. I growth and remarks. for Chief while Vince our products call turn will of core through a and to mix the

on-balance increase the billion, good in loans mortgage $XX.X the physicians $XXX driven Gary, million even loans. Total guidance. Total increase and production and headwind sheet million a million Today, in $XX at quarter's with quarter linked mortgages quarter led Thanks, full billion, quarter X.X% linked will through quarter at financial jumbo $XX.X second loans of consumer leases morning. commercial and $XX slight walk this and deposit I seasonal year driven results Residential ended consumer quarter our and review ended deposits loans leases. first and annualized outflows. quarter growth by and in loan of by the a growth the of

and success mid-November penetration through in deposits For an mid-February, the couple on deeper in market benefiting to context, normal our team's our organic should from seasonal and continue basis. and seasonality driving of balances troughed peak quarters, next build

noninterest-bearing level As year-end. XX, deposits XX% of of maintaining total the March deposits, at comprised same

savings While interest deposit shift the market perspective. into CD we continues low outperform and in continue money mix industry will and and both we to to a products, from cost believe higher-yielding products deposit mix the checking

ended rate the in increases XXXX. of quarter the Our first of leading began beta since total March a at current deposit X.XX%, XX% interest cumulative costs deposit to

The first with offset increase basis X.XX% was interest the a modest was total over by than per of less X.XX%, earning a in prior to from during difference point assets on decrease in million quarter first and X cost quarter, down of the margin X points. yield A March's a X XX-basis totaled point was total income quarter's net point day. quarter, slightly Net X.XX%. On a having basis, a more decline the funds to margin the due current half month million, X.XX. basis net interest net XX-basis interest the increase margin only was $X $XXX to the interest monthly

contributions totaled focus quarter. the revenues the business. a $XX.X $XX.X robust a of performance every to banking income quarter figure increased noninterest of to income geographic market in Vince of prior linked totaled record the through with the the and management across growth XX% line highest mentioned, reaching quarter, had footprint. Mortgage our nearly quarterly growth. Noninterest expense. strong on compared continued Several with million, XXXX good $X.X strong driving lines Turning since production operations purchase million million Wealth business, this

prior the on gained had we double revenues Our total around line significant with platform Treasury quarter million, debt initiatives, from quarter. the XX% of items the quarter of capital [ our bond ] expense $X the the is increasing driving platform, charge building a record. transactions which million year the number prior $XX.X record have capital totaled quarter, markets, than increase from out of and item. Operating and markets part strategic $XX.X an as last more revenues million of adjusting this TM execute management momentum increase in noninterest service the for $XXX.X million after quarter ago in current

to a driver February. The expense reduction estimated for of $X.X the long-term indirect million, This noninterest $X.X and primarily salaries and seasonally additional partially assessment, auto that sale and in loss employee loan higher estimated on million given loan the million seasonal increased branch expenses previously million payroll $X.X which largest operating million $X.X salary consolidation included lower FDIC origination deferrals million, expense $XX offset related the normal for $X.X taxes, of which benefits, increased by closed volumes. reduced employer quarter's seasonally compensation significant with special items to

stock earnings. FNB million dividend shareholder redemption February FNB flexibility the continues of our preferred redemption the mentioned, to manage a paid impacting considered preferred optimize significant balance of redeemed was the of our value ample Series on previously carrying excess grow and risk. $X while for As on perpetual over E returns, actively the final the appropriately managing date. million capital position all the and on sheet preferred The item stock $X value XX, of to outstanding

common of per quarter. TCE strategy and $X.XX capital was March and end tangible levels. Tangible value management $X.XX performance X% in $X.XX the ratio March XX.X% record at XXXX. financial at common resulted an Our or to both reduced XX, compared CETX share our share XX, ratio by XX.X%, book AOCI $X.XX for of year compared ago to increase the per value book quarter as reaching

for and Let's now full year second guidance XXXX. look of at quarter the

with are where income land digits year-over-year thoughts provided We balance ending grow full statement increase year last on market the within on a our quarter footprint. consistent our year mid-single maintaining sheet are We balances to our to And year guidance. expect low we guide deposit on expected some to as grow is projected we digits basis. Overall, single share project geographic across spot a total ranges. full projected with period basis loans full diverse our additional

projected Our of point $X.XXX assuming rate year expected XXX net the occurring cuts billion is basis in between to interest $X.XXX half full and XXXX. billion, income still latter be

timing rate those where lower to but expectation given of the rate fluidity the and occur. Our cuts actually in up current that of guide, range be we cuts, half interest rate X number in change the and due full the to environment the ultimately is may end the year of

Second quarter year between income projected income and and noninterest million. net million. $XXX $XXX guide million interest full $XXX is remains The million $XXX between

being in strong the that anticipate half we the quarter, in upper of momentum given range. the first However,

dependent and $XX noninterest million million and and charge-off year year expense net with activity. income $XXX between noninterest and The $XXX guidance expected million. Full is is the million $XXX between be is million. Full noninterest expected to million expense be and provision second loan growth $XXX to guidance between million, is quarter million to second quarter $XX on $XXX guide for $XX

any Lastly, investment rate should and which call activity the that I between will Vince. assume does XX% be tax back turn full credit effective the to occur. With that, not year XX%, tax may

potential half pipeline interest as the FNB benefit return environment of to deposits. more for as loans the second have and leverage had are as to and from well the And rate enter year, a we a favorable good growing a year. the we optimistic operating to start that we positive

experience nation's to eStore. finalist Our and as some a shaped award-winning we among largest technology experience. digital is proud appear innovation banks a for by fintech award client And are our for and of the customer

by recognition. is third-party consistently supported strategy Our

a fact, XXXX received FNB's achievements culture service, middle In excellence. These select for client financial highlights has possible awards recognition upon and we as our in fourth opportunity public our third-party U.S.A. for Intelligence by performing engaged recognition feedback. FNB performance approximately Market market with XX one as to first a S&P examples an based where during quarter workplace FNB excel. named is provide by and for everyone of to made our strength of our banks. The ongoing XX U.S. received the result, And multiple model business We employee top Global receives of the awards alone, being teams. small year financial the is the consecutive led top an that business which company and environment

all want quarter, thank to throughout given employees' and outstanding look the Our the on their team build enables positions momentum together serve efforts our the working of us the dedication environment, year. stakeholders success. difficult in FNB continued I operating our to first forward for and I for to to

[Operator our Sandler. Schiraldi Instructions] first comes it from today from And Piper question Frank

on on NII the also well, Just loan-to-deposit the on guide -- the and -- the on NII ratio.

as to you've mitigate taking XX%, ratio. up getting you to past, the help to XX% up actions in think potential loan-to-deposit about some XXX% I talked get

But side, indirect know -- you auto the might actions indirect could so on had I just of curious I some know but talk there's And deposit some maybe which, sale, the seasonality if sale you on what about those of be? I -- guess, of actions if helped those us could what in bit. a then you interest XX-basis potential rates. you get also about remind curious what look talk like? cut And a just just might some on point

where So say is I Frank, deposits. we've was level our talked XX% taken And franchise kind on have to action. we've loan-to-deposit we the generate about ratio, would a action historically the leveraging of

happened, kind into in generated of of So down to $X close it time last had mid that kind to CDs bring low billion the [indiscernible]. we to back

that we we management, I we mean, And focus have as do. we of focus a close to as deposits manage businesses, a So would lot -- the company, you been. line, there the is that, a company. big -- XXX% a our kind can a generating traditional of know, -- but throughout kind it's always business, on treasury down. there's demand is deposits the It's XX% things got line we throughout of small commercial it

we're of in We've for up key saleable percentage in before. And we So it. new last midyear kind we create low originations like to clients households, of product new strategy more the of the also year then in And were XXs. what part now bringing generating customer, a where the is salable been than things our more managing [indiscernible]. had deposits, to our out mid-XXs additional pricing adjusted

a So the we we business, another also of to that's the as we on how a kind we balance grow shelf have. indirect on lever as in while sheet. any depending sale, lever point space the time In what's there much have far did want

that things of whole are we both and There list asset a look liability. at

of them. So there's -- Vince a mentioned many

our a pipeline think pretty strong I is for from perspective. deposit production new

we're don't I So about that. that think worried

a did is of we mechanisms going and are very So organically that the balanced company. bring event try in accretive. deposits to we prefer to the point, for that that mix need pricing deposits, obviously, That in well generate the but to the we grow

I side. I would expectations assume half previous just but have into where you potentially you lower your up first trends given cuts And the be guiding from one your bit the just now, pick rate baked sit the little less -- rate in less mean, guess here? on I I Or and guide. Great. then quarter you NII a baked I cut of still from guess, Is that range. into the the towards

curious just there. So driver the

You cuts. answered we Because had did pretty our drivers. well it January, key mean, I X how we guidance the of sell. in Frank, in

One December. them of was

So full for an much of off, December have impact the falls doesn't which year.

in we of the X have short-term in We've year is still been So the cuts the in the half neutral. organically back positive. second moving We're asset-sensitive position. an towards

first from that adjusted we were the there's net in we having So at the interest quarter, the that. -- of just benefit a range seasonal the to lower of little our a there deposits, guide short-term, end income. back of is our in for bit. But we flat, of timing potentially borrowers end were quarter, average a by higher, were timing little the up the The cut. The

the And very if first what's rate look -- an ahead. of for kind just be It's the had started interest it just we we'll kind growth of fluid. opportunity stronger, mortgage guided we kind to of we that's loan kind sit, the that, above range. in range So the us the thought bottom appropriate see potential that. But the we There's It's for what the capturing quarter baked as we of half. at the to. half there. how of bottom is of that lower year, is of beat is to kind guide. And was to there's where it's us environment There's

Right.

just you'd in the to third-rate then really the -- be late there, was confirm And year, Okay. so didn't. cut

have rate timing cuts? to cuts the X just the rate really So from an X doesn't of going impact given

Right.

Okay. Great.

Frank. Thanks,

from comes James. next question Tamayo Our Raymond from Daniel

just and gave guys the there. delinquency in NPLs first, if first, loans that the appreciate or I quarter. I touched portion there's down happened I that. then criticized sales detail Looks of dig anything curious There any in you the the on increase small can what? the drove office that like into to guess, there? office I loans, the just and the was in came was wanted provide wondering, in comments, were And if office it -- for you particular there on the other guess, just you the I details the your loans.

XX% point, slight it's It's fixed that out was at a At X for category. moved It credit the into Daniel, that one LTV, swap that not really already another X.X%. originally this us. is years. underwritten at extended concern credit a a and Yes, increase we a through was it's

move but we on credit So was, appropriate it in like they into right the thing. had rated situation. The it replace felt working replacing They're that, said, tenant to out. that one a LTV naturally I at XX% about going on

criticized million right And So and portfolio in $XX $XX that office a X% down balance from around the perspective. to increased was of in million portfolio, down terms the that XX%. in exposure

with have we the some we that business. appropriately. of those that So of loans today it we're pay low levels, very be it, performance seen managing as aggressive manage at and And it in continue we'll around off category book where sit to

that. to on going color. then have That's XXXX. impact swaps that Appreciate are great in place Vince, Okay. you the And that maybe,

Just curious on if off you have could do to in how those the impact you XXXX? provide rolling a the little color margin -- much on expect potentially

'XX, we starting that by last off swaps billion it, mature rest Luckily, the And within kind We while of a off. off some will we we January. There's billion put points -- them those really XXX And the of those comes lot had then that have, X% to negative of to put October, do billion so drag in January. on around currently. did There's that an moving a rolls -- a basis rates of $X XX throughout on we in but the $X of are actually didn't ago. 'XX. received $X are of they'll come

So in in additive, get I can't but that next do will year. my math that head, be will that

it. Got

Okay.

So October. appreciate $XXX billion and me. then in I color. in million for last January the the it $X That's

Motta KBW. Kelly question next from our from And comes

in was the your to took a the into you to half how that bit range. more hoping of dig fee I upper notably guidance,

had you to you continue which last see wondering, with Just better the at some performing maybe opportunities and diversification And where help nice a up bit this been greatest to than expected time fee areas fee have quarter? growth? pick

Yes.

built Capital a pretty businesses the hit capital the debt on we the diversification nail broad decade. in the last is You a I markets We markets head set over answer. out mentioned platform. prepared of added fee-based the comments,

bond So activity know, quarter. of some you in economics clients. And in and our we participate for first of opened the the up, larger quite was as capital there bit could markets a there

that half build, we syndications a I from built that ago. Syndications, flows, the to are as benefited latter would activity move and about up our XX%. the out ebbs pipelines unit but year. we the few So more business pipelines through as we've expect there be years of

So we'll there. get some benefit

teams have well quarter. the pretty counsel program particular risk. And and a them interest to rate address did have help that We this we robust structuring derivatives provide that pretty where group clients in marketplace

about Frank but and of balance the the we pricing. we We bit surprisingly, goes do one to salable loan-to-deposit to became mentioned this as So balance ratios, but up given able Schiraldi's the them comment this rate some quite to environment, the rate help clients more they aggressive off of for we moved how bit gave a loan of a back margin, much cycle. The company, we mortgage sheet. things volatile little kind move interesting strategies mortgage were through manage on sheet

contributing a in they're very So attractive pure volume because we're markets. positioned some perspective from

there's to inventory. where not markets, lot a see purchase activity, our continue We in a legacy lot of money of

So in of in we're pickup. we've the quite the regions, markets seen Mid-Atlantic action. a and bit not lot other of Southeast seeing a But the

very solid had that's contributed. SBA quarter. So a

basically based them of with Some had loans originated built associated that building construction with in yields on construction draws salable. became the the our we that something -- were higher phase

particular. treasury few middle that been in Awards in the small business then gain. And lot last Greenwich we've years and of over So talking some decent received of business we a a management market about, treasury we've moved the the for segments off that with management

our other to business, like getting added we're of continue consumer see merchant. services that we And unit. We've fees the here that and kind the out personnel. We've from nice build fees contributions built to out overdraft strategy fees was a from then XX,XXX fees small value We XXX,XXX offset customers businesses our merchant business kind we building declining in opinion. But of we higher from treasury with -- have perspective. after management to small portfolio. on that that's focused out our going And for our businesses,

have opportunity and in broader eStore. to through a We tremendous drive go relationship a the

now So and small out building include we're focusing management as product will merchant on business treasury that bundled for a bundle. part of the

are I bit those granularity that range work the a on -- it. the hit into lot quite So things got goes -- we the confidence that mean, and us end of upper there's gives of We've the guide. of that a can it

think first weak, others. the XXX, [ weaker usually is Annualizing quarter, right? quarter first it's ] XX. the than I which

So sit. we're we pretty quarter pleased with the

reading to really seems I some correctly, appreciate I'm on the question prepared is the a the last has It to on your with of all color. for side. what if No, qualification of the like commentary Maybe to range of do NII back the balance seeing me, sheet deposits. half you're flow to switching kind the deposit lower

you of get that deposit you can provide any reiterated? you with is So the have customer low cadence the what in to of growth about you're can there terms you me to range remind And single-digit to deposits? that seasonality as color thinking

Yes.

within seasonality I think, first portfolio. extreme deposit -- there the of of all, amount an I is

recurring look to the they're because of it improvements inflows quarter. it's throughout and draw to So the quarter outflows and at starts first difficult And now. the build kind really,

inflows. The XX%, we're So see deposits I on demand to were starting at pretty a think, about steady considerable quarter-over-quarter right, basis.

is basically of little over profitability. higher-priced What's those deposits. It's seen customer the within last with or term happened categories of the that's the some moving CDs few of something the deposit moving quarters imagine So bit base. into core noninterest-bearing our maintaining we've into a

eroded happen. of income, So That's the interest surprising. net saw right? bit not that's little that a We

noninterest-bearing manage You can year, see other escalation able should this we've the stick some seen marketplace. time, in the that grow the believe over margin be the and I we without the in categories lower to data. deposit that range balances it in sacrificing throughout pricing -- in because

be as We have pricing. to the hot on

as through with the of should year, occur. municipalities and balances. that transactions the think us the for to inflows don't just help many deposits, also I we move then do instances, all the rest get of primary truth cover which have even is be So with In disbursement have that movement them. We and just is activity the municipal for of of here increased those about services. the of those the and rule kind a balances to ends up free increasing entities. with where funds We we the to grow bank what amount the activity activity wire happening And ACH those

the the as So X that's next part well. course over of quarters what happens of

I timing. know add you Vince, anyway, So don't if to want anything on the

No, I really...

Interesting from [indiscernible]...

cadence would of through October, kind of the We I all add. that. that commented on and That's November it kind of mid-February -- builds is troughs in

Lorenzoni have [Operator Instructions] we from Next in line, Nick Stephens.

had office some office you the for DC the Baltimore detail breakdown, the specific Gunther. exposure deck. in quick I color geographic on just I regard and provide if including Russell to additional your with in portfolio. I your a in appreciate wondering markets? Filling question was could

Yes.

in the D.C. in at market. able the move of one had of we off We In just on the the last DC, the transaction institutions. We've sheet terms substantially in exposure top other been course a to balance year. normal have over those of few that refinance

while that have we that felt only $XX million a loan. quite market a a a was ago that's we there, is saw one and And we overheated. So transaction extremely it's transaction

were we little very today into with cautious And market. sit [indiscernible]. that very, very So where going we're pleased with we

question from next Martin our from comes Brian And Montgomery. Janney

the on Gary, for you one a Just just maybe, couple, credit side.

trends kind for were on quarter criticized you the we how trends in give specific can rather characterization than went Just whole just this see how XX-Q of in the those levels, filing, just just any terms and trends overall portfolio before broad of of a classified bucket?

Yes.

I In couple got terms credits touched on earlier, have in just very a the movement Long-term credits concerns those criticized. from little was. And aggressive they in or we slightly were We're basically a less them X than performance. trends, slight customers, performance. of softer any into substandard. X were of than where mention less was a move from the criticized category, Those that, type loss some of don't there softer Brian. We with the moved one special which moving credits into those up primarily perspective. that just credits of a into the any

And build that of bit so little we performance. reserve against a software

to movements. turn those XX, that around X XX in of the next over particular to We expect months terms

of tremendous have in confidence of and the of downgrade we That's Brian, top you'll can tell amount different the them very at what the looks a people his top in team. portfolio, they other the on if at credits credits, his it's Gary these And I I necessary on as credit, than quickly. look find are Gary's companies. you, and line

So you're going to see movement.

keeps positive well it relative to risk. it's think because reserved us I

think so I Yes, I and at you fiber. XX, seat old. long as So go as I'm Gary the longer time, has the a to putting were do, years. we're time periods all bag, Maybe been getting you of years. in we XX over XX. least there years It's XX and XX look back long in [indiscernible], for long I'm

a got track we've look record at. to So long

overall delinquencies quality good. are lows. appears be portfolio The low surprisingly at the historical Our of to

on focusing soft. are believe we globally that are We certain segments

culture on. With and think that There have seeing. tremendous at, You've you're encourages prompt we slide That's we credit focused goodness, that's action. opt thank area I presented. one a we was what And mentioned we office. granularity look

than peers. early know don't reserve think to up end reserving our it's I in build very then for at if charge-offs better the tend past, in charge-offs deck and the with the us. versus We I be

a Gary out road, so trouble early, not which and down when charge-offs get exacerbated his you out early creates that testament issues addressing that's cycle. So the helps and not problems team getting of situations you're addressing shortfall, you're the credit a a in experiencing to and waiting

So to say know I great won't that, I but job. we've He -- don't done say it going think I'm a about.

portfolio the mean, is and great I I criticized kind and the to The Gary, numbers it. they're up much themselves, and speak not for even testimony granularity. Vince No, of being the appreciate

stay coming you quarter there just the you of entire things that out? trying testing. Or that this test in pipe. Gary, specific you that just if continue to that front stress are just down the call guys' you So distressed anything to in stress portfolio? you would mentioned Was there's general, tested it

basis, Yes. every Fisher test it his the portfolio stress on a It's and are level review that a that monthly loan a quarter of when made a undertakes. quarter. We Tom Updates basis is on necessary. entire general really deep every Brian, dive team so

practice best forward And and it looking place the put has forward beneficial very keeps road. that we that a it's us think look So what down as that we've the from been through expect into perspective. I we economy

Got you.

X or Okay. then one just maybe others. And

X the pipeline the side, the appreciate things on the how on loan I the -- just maybe guidance for of So just kind just year.

bit more side, Just you were on I kind are commercial quarter. then trying first of just I seasonally a you on to primarily. And weaker typically lot mortgage quarter mentioned the get on sales. where today a aggressive mean, the a is -- of side pipelines the the just think

remain potentially any Is that sales, look on guess balance difference the which mean is you the could the in strategy the expect XQ you year? to So revenue do the for I throughout you aggressive year? it there as go a mortgage to bottom of as

Yes.

slow, they money focusing we're next X the through when I transactions down I think because especially quarters loans are mortgage quarter. typically the less quarter build would expect fewer first right, on that occur of again. in to first the back come then -- because is purchase that and seasonally

to the loans, with that that will areas we -- have the produce we -- money do, speaking which the origination There much are conforming happen. would mortgage expect are side that physicians' that loans and I through purchase other to pretty just throughout On year.

they happen on the offset kind of So later the of declines conforming stuff. in some the

sale. why you'll more loans coming do what what private we do. which to So jumbo out becomes balance we want online, the goes banking on sheet see is balance We and what

a job. Our has done great team

people the for it's business part over last I have consumer. terrific a We XX the mean years grown business. a so. in of and or key our We've the mortgage big it product

clients. seasonality. fair given over and conservatively, more manage the continue on say, few think quarters, So we're ability to it obtain that to focus I would it contribute to but the to our to to it it's going adds think I very And next expect really I

quarter from to little standpoint, into in how down kind of a not then of is banking guidance we which and into guidance And a quarter a like Vince continue I just falls mean, it would income second add do our income falls production, statement much and mortgage third right? level. the I over the then is said, be to and our first I an we'll big coming quite baked what's baked sell, the quarter. bit off from was function That seasonally, it manage mean, going

But think we're doing I'm bell pretty And they're shape. well. I very obvious entrenched. well pretty The

We business, have like that in people said. I great

good So about it. I feel

was the The good, third, activity move to then in second, is it Vince first expect too, quarter up very the good. very see said. and Even the like

But that game [indiscernible] rates interest it be should mean right? down they things in the interest environment up. and We'll by There now, today, given impacted more talk a rate road. are the if should over. pick Obviously that I I for go stable way activity. think about up,

there? And the Got you're -- what on seeing Yes. pipeline, commercial just how you.

they're Yes. The a last pipelines out overall Remember, pipeline up quarter big in the year. the quarter. and last had is -- XX%, closing from of we up December

from So was last solid production a year the perspective. of fourth quarter pretty

their is Carolina rebuilding, second are historically. pipelines at South level highest So

So the pipeline some a there. has a seen we've and region, We've call It capital the a that lot got state. part we always nice of which pipeline tremendous a of is activity a there's central C&I mean Pennsylvania doing [indiscernible] of market sell. opportunities. terrific State and good a middle the his solid I activity some lot and rural activity folks markets. The in good seeing we're of DC team College, in what

economy. So I confidence to would through year hopefully and to pipeline as we continue move become in businesses, the us expect the more the build

Got you.

for capital on that level comfortable just DDA And still growth? outlook then it's reaching the just the sounds kind organic deployment of your it Okay. of like and the here and level? CETX, just the me, of this record with on if level step TCE primarily just around thoughts a Was kind one -- flexibility I'll the kind back. last your current the you of can And sustain maybe capital

would front, producing. and We risk profile still of balance I like our capital been think generation given that the capital target. we've mean, CETX I that's level we sheet also Yes. the on high of say, XX% the is right just our the level,

is what's capital build kind here guidance, gradually If our baked into -- between year. now and of at the you look of from ratio end our the the

saw quarter, you pickup As CETX this ratio. nice TCE we and a in had

be relative of sale We the have that commented ratio. to CETX like cleared in January would XX additive. and basis points kind that Added once indirect TCE

and gradually We'll been do there. And kind we'll as be that look have the have some of we opportunistic we from we'll So then to buybacks. build past. in

We quarter the have could in normal do and to through issuance of incentive repurchase of that stuff. some of first the stock go level we as from year. look we We some activity

X% TCE for building go ratio. so is pretty of us. you nice back Given of a profitability far, we're the a capital the solid company, have options, pretty number and It's we

like question, And and to turn with gentlemen, Vince our floor remarks. over any I'd that the ladies closing for Delie last back to being

was about that $X wanted next to off million we're We're year. There question of billion. earlier one a I rolling just receiving. comment. swaps, what have kind $XXX on make mentioned we I the paying

get around and million the XXXX, quarter of math, kind as into we're basically you far paying as receiving a X.XX%. what just So sub-X% XXX as we're it's

that in I benefit starting just next will that. wanted a to So January. year clarify be

shareholders sure. our very everybody. employees appreciative and desire Appreciate win. teams Yes, the you, again, we to the their and Appreciate Yes. Thank of it. support our from and Excellent. that have

do just their want we think we've can And I compete. So effectively. they proven best we have that a great culture, for that and winning the clients very to culture and do people

So thank you.

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

disconnect You may lines. your now