Cullen/Frost Bankers (CFR) 31 Oct 242024 Q3 Earnings call transcript

Greetings. Welcome to Cullen/Frost Bankers, Inc.

Third Quarter 2024 Earnings Conference Call.

As a reminder, this conference is being recorded. It is now my pleasure to introduce A.B. and Investor President Vice Senior Director Relations. of Mendez, you. Thank

You may begin.

President afternoon's Thanks, Jerry be Vice Dan conference led CFO. This our Salinas, CFO; incoming Geddes, by Executive CEO; will and call Jerry. and Chairman Phil Group and Green,

over the to I moment Phil, Jerry the safe harbor Before need call and take to I to turn a address Dan, provisions.

constitute Reform Some of Securities defined Litigation Act in XXXX as the remarks forward-looking made the statements today amended. of will as Private

the the such safe this Securities last by XXX-XXXX. earnings Relations risk provisions Reform amended. release statements statements needed, associated to (XXX) the release in for intend Act text as calling morning's department on by contained covered We at with forward-looking of harbor be factors XXXX in is website page our of the information the statements. available these for Investor or additional about the Litigation Please forward-looking copy If Private a see of

turn to the At this call time, Phil. over I'll

Thanks, CFO, results for additional Thanks A.B. working anticipation upcoming quarter call I'm have on accompanied and Geddes, review and by as provide who of for Today, the I'll in Dan Good retirement been joining Cullen/Frost, and third Salinas us. they'll together afternoon, Jerry commentary. Jerry's everyone.

in quarter, same the In reported million third quarter share earnings $X.XX $X.XX last a or compared the million with share or Cullen/Frost earned $XXX.X $XXX of year. a

in last the from were in equity period just compares on same and points third quarter $XX.X return Average for with ] Our quarter X.XX% $XX.X XX in quarter X.XX%, the year. third [ XX.XX% XX.XX%, last third down assets common average of billion and basis deposits a year. and were billion, respectively, that average the the

billion XX.X% by quarter the third $XX last in loans the Average with to year. $XX.X quarter of in compared third billion grew

strategy. resulting hard of We solid bankers organic of our growth see our continue the extension work Frost the to from results and

utilize fund didn't deposits quarters, arrangements case insured to As reciprocal deposit was build previous any to liquidity. or broker FHLB or the Cullen/Frost in advances, percentages deposit

look you you as what what again, our you at sheet, balance is So see get.

continue program. We organic see our in results to growth excellent

Houston XX% we deposit basis, of and we our X.X what goal, a at our ], new stand and [ XXX% expansion, our X.X of loan household For XXX% call our on of goal. combined goal Houston

of For expansion, of the new at Dallas market and stand goal. of loan XXX% XX% goal XXX% deposit household goal we our

have there year the and before planned project We X expansion continue X X results with more opened open first locations the and be expansion to early to very Austin markets. this other of end our with of line encouraging new first the in

end households. quarter, expansion the of the new grow $X.X added efforts and in more deposits, and continue than had overall XX,XXX $X.X our billion At generated loans in third to billion

current the of be success the will funding the earnings mentioned, expansion we've and As projects to accretive XXXX. we overall earlier expansion, expect the in are project expansion beginning

in new an checking year-over-year has Consumer use the deposit achieved cash In in by direct in of believe remains had year growth competitors. extremely growth, best the That of of competitive households. programs adding quarter many our we been We at industry-leading growth over our net X,XXX household our business, use incentive checking customer environment. X% without

top convenient on locations. instead quality Our of network technology focus has been a great and expanding service

year-over-year X.X% and recover to continued overall finish quarter increase million. or deposits $XXX the Consumer with a

The marketing, investments across outstanding organic drive we've exceptional over XX%. or making Consumer, million primarily This ninth of the grew area average an comes second annual this growth growth loans rate quarter with from Consumer XX% of in consumer the our loan lien new our $XXX our consecutive this expansion, home well growth equity our and products, in new helping employees Finally, home improvement as as and business. product. technology products are made mortgage year-over-year,

funded mortgage loans mortgage at stood million end, million. We quarter quarter in in at and $XXX total the portfolio third our $XX

third Energy versus balances in by our XX.X% balances Average grew quarter increased loan and grew XX.X% by XX.X%. balances Looking the increased business. year. by X.X%. same Commercial C&I at the CRE quarter balances last

in was relationships commercial in Our the new last same strong, growth quarter the X% increasing quarter third year. over

The loan third We X% $X.XX in and totaled quarter in increase quality a from in during third XX% commitments CRE credit the billion in of much of saw C&I albeit New base. terms problem loans improvement a and that energy, up last on a the resolutions. and the smaller quarter third X% some increase in was quarter, both from came year. increase loan

is $XXX a which and $XXX good year $X.X loans, quarter down the third were historical million charge-offs ago. quarter. million XX and with by as net Grade of at to second loans, levels. nonaccrual end the at Risk million $X.X healthy standards the problem quarter million last charge-offs we the Total of quality the end XX% the from for totaled define at $X both Net quarter, or higher compared Credit million, third

$XXX nonaccrual, of and increase moving basis million Nonperforming points us third loans period-end for was [ with million charge-offs to got list. that ]credit of primarily net assets points quarter XX problem represent quarter figure XX Annualized on at which our compared due XX to the quarter the assets. end previously $XX last year million the points loan total and million to $XXX loans. and the totaled basis increase end basis $XX was And ago, quarter third of a period-end of identified the

of than is closely is balance to XX% investor and the real About credits, estate problem loans of most owner-occupied loans. estate, overall less C&I to which related in are to related tied C&I our commercial real XX% slightly

steady acceptable in values ratios to performance real Regarding what portfolio stable we've at all types operating to overall similar coverage quarters. our estate reported lending, remained with levels Commercial service and and loan prior across asset debt

average weighted service And I exhibited best the at continue that of be totaled of and X.XX%. average to portfolio the CRE loans banking total encouraged growth the about CRE strategy or underwriting markets investor and our overall Investor loan-to-value in billion the at and success by debt XX% are of our outstanding consistent CRE of believe $X.X I time XX% loans U.S. and for organic have outlook what

that, I'll over Dan. it with turn And to

Thank for. for his thank role with these being to gracious you, first transition enjoy Phil. retirement I until working during Jerry year-end. has best his He I next a this with would truly months the in high in the time and to strive for him bar like him will set me process. next this at X wish chapter

margin. Regarding interest the net

basis The increase was the was reported driven X.XX% quarter. loans. points and interest margin net quarter by third on last the percentage Our for from higher primarily volumes up both X.XX%, X yields

quarter, Looking investment $XX.X available-for-sale portfolio. up at total billion the quarter, an $XXX during averaged million second due portfolio the from increase in of to The portfolio. third primarily our fair our investment value

third of the just portfolio available-for-sale a yield $XX from decrease was The basis billion loss $X.XX quarter a up taxable quarter of $X.XX with of second total $XXX million million $XX points the yield end of from end The equivalent the X.XX%, X was total equivalent quarter. investment net the taxable investment quarter, third in the billion, totaled the portfolio unrealized municipals million, being purchases the reported the second with at on the the quarter. on During of X.XX%. at

basis quarter up X.XX%, from the quarter. prior from X at $XX.X a averaged which $XXX portfolio, taxable million yield of up approximately prior the points billion, The

Our $X.X basis had with the of quarter, quarter. during the tax-exempt prior from billion the X.XX%, yield second X municipal and taxable portfolio averaged points third quarter equivalent flat a up

the the quarter, third XX% the duration approximately down of in X.X portfolio of from end quarter PSF end quarter. X.X the the or third At the the of portfolio of years was was investment at pre-refunded second insured. The years, municipal

quarter sources. were million up from of On linked a $XXX the average previous basis, total deposits $XX.X funding at or quarter. X.X% Looking billion

while XX.X% with demand down were deposits X.XX% the X the Based second X.X% of deposits $XXX noninterest-bearing The the or of to from balances, X.XX%, million million, basis flat percentage the a the quarter when second average were compared in was up quarter. interest-bearing increased on Average noninterest-bearing XX.X% total compared deposits quarter. third previous in quarter. to cost quarter, quarter points third essentially interest-bearing in second deposits as deposits $XX

compared driver quarter saw continued CDs October, accounts, shift deposits the a month-to-date the mix are into depository the average interest-bearing fourth on slightly positive deposits start of primarily the we third quarter. far to trend $XXX primary about in basis increase. X above rates While second being quarter, higher-yielding Thus up to the average, decreased point million a

deposits. was XX noninterest-bearing flat repos October average. month-to-date from the of in and quarter. deposits essentially second interest-bearing for third was customer the repos quarter down being basis third with repos The the X/X billion, quarter With of for basically points averaged for customer as October the about X.XX%, cost The $X.X second the average Customer that with X/X balance flat quarter X split quarter.

and noninterest and on were organic on accounts. primarily expense a service net I'll quarter of by regarding looking up Next, charges at linked of out Commercial $X.X unannualized couple driven our income, about point or a deposits noninterest items, X% million growth income Consumer basis.

In wages and higher X.X%, head impacted by was incentive and terms $X.X count accruals. primarily of expense noninterest expense, salaries up or million

capital. at Looking

we did buy million During third quarter, $XX the our back stock. of

have [ we approximately at now ]. XXX,XXX average an For the purchased $XXX.XX of price year, shares

call year to the over guidance. Jerry for on turn now commentary I'll our full

those for you thank and Dan, you, Thank nice words.

for guidance full our Regarding XXXX. year

the remainder point basis Fed of the November and cut with cuts XX over X in include projections XXXX current December. rate for and funds Our a

the of For in to the net continue income year net growth interest interest X%. X% for income, expect full to we range

on XX.X% loans Loans basis. year-to-date. at to a up are Looking last year-to-date average compared

loan double growth than guidance our We growth. double in digits digits, slightly expect low single low the to average year of full previous high digits better

average year-to-date. at deposits, the current Looking compared to X.X% down last is year-to-date

to to current flat from and on we noninterest a in the from our are be year-to-date to up X% year income growth previous growth in down of of between expect projections, guidance our range X% to That X% and We represents previous decrease growth of of projecting deposits full X%. X%, average X%. guidance down X%. Based

and of we in reported is down guidance. results basis the noninterest expense to full a year-to-date growth that X% X.X% to X% X% range are projections, projecting current from on year previous our on Based the

on basis loans. net basis, represent year-to-date XX they a Regarding charge-offs an of points annualized average

XX our be basis loans. basis average to XX the of of full That guidance range expect XX points of the loans. to to in points of from year We XX is down previous average

That's our call for XXXX to full previous taxes, regarding or the slightly come lower. back for that I'll the expect turn currently to Phil now guidance. rate at was over level effective with in And that, we of XX.X%, year-to-date and questions. line the With in year tax

now. open up you. thank questions Well, We'll for it

Peter is from Instructions] with first [Operator Our Davidson. Winter question D.A.

assume less as maybe could environment kind about trajectory steeper for is and the I of cuts yield curve ideal cuts talk cuts an you? the is would more rate just suggesting forward you was rate curve a wondering, Fed margin and and I additional rate gradual the of

we that be our think down, some is what rates is opportunity Yes. pulls going Peter, is portfolio. see to we're I continued what and portfolio to and our rate push will here deposits unknown like there's right hopeful we'll feel fixed going seeing reprice do. to growth you're be deposits. The we're go investment as And in

some there. there's have a think balance -- with we opportunity asset-sensitive so we do sheet. such But And

and So will see to our portfolio our lowering fed. that -- as we're rates of floating holding what down, we go yield that rate on

it think really that see can moving see the of I I fourth mean, I probably quarter. some steadiness. yes, think quarter, you fourth can much around see just I don't for So you

the mean, you and that even the increase costs? cutting ability specific lower with for just see do deposit with can repricing the I to into -- asking margin rates you earning the -- Fed year but the items, on could next And assets benefit think I'm

is billion of $X think have loan I repaying into amortizations we of fixed terms we there next a portfolio and it's quite that year. payoffs, terms do maturing rate our have in our securities portfolio because in And opportunity or of bit expected of about maturities.

So there opportunities. be will

able be of some our our look book both portfolio, investment pick you going yield rate look you at do of at portfolio back kind If and to we're our up there. fixed to if

just Got it. on one loan The growth. more has And question, better than growth been just peers. loan

out we guidance next the think rates build past pent-up new is loan the it could expansion Do contributing. end demand? and you Also, move stronger moved growth of You upper there's Obviously, as to client loan this lead the to get the even that that growth range. election lower, the year? branch

every think I some as do to as branches Peter, canvassed I every there we've quarter, as honestly as managers, do our we people, over is demand our relationship location. year, look I every and pent-up visited talked

theme some consistent area front. maybe most the be single slower, the I not that on are be might for it's it's that's I of people there's But little most think have move a fronts, definitely is on I why somebody there hesitancy -- every heard hesitating? we things to a forward the apply, is why bit election. think seeing repeated

goes, regardless it moving think over, we'll it's up people of way will I think uncertainty fact which I forward. just the be and clear that

quarter, at up But current second last commitments the from I But about a as were down I -- were say bit looked from year I at looked what the about X%. they little quarter. new

flattish. and view, even But looked up for the were new flattish X%. quarter, the little little at Now the in previous opportunities days is second little quarter flattish pipeline a It's was compared to a relationships really new strong. compared was, quarter XX my a previous to

at saw went XX.X%, credit. last quarter under like I the another thing we think, that you that lines revolving XX%. to if from of And look advances was They

pause, the just think. sort it's So of I Erie

because said, I pretty that get comments underlying think much in were them, once who to to are It notes cases good when from that fundamentals like, was people election once talked levels. well, you're the of we going to return expected the will past the election. about and I as that well, It to these read in. see slowing past they And that customers, kick all things got we they continue

of you're everybody's how I pent-up now. way some I absorbing think much think can't tell right. right but too So it's is bandwidth demand. you I much, just There

next is Dave question with Our Rochester Point. Compass from

as beta the wondering the update on through I in was the seeing cut? September appreciate NII what deposit outlook. go is following are early I you your can of the the experience on guide. front for on down cycle? your just expectation What And remind terms that the . you us we rate

first is expectations were one overall mark we of our up. go so when Sure, went up the to rates

it going competition. we're is And expect through time beta -- time take just But in it are think a similar be to our on beta see this work XX bit now, going of is XX -- a our way the but more CDs down, And that around up mindful has going our I points. so little the those to because days. see a And to little of around our down. of basis CDs. Right you'll you'd may bit mix XX% the expectation

going take to quarter just that way a lower to yielding work its it's to So for through CD rates.

to expect deposits. So to just I it mix the interest-bearing be think due similar you can our it's of but

some it? or just Yes. potential maybe year, in the next cuts, That Is growth I if NIM you're seeing think And next stability would with makes about sense. NIM for comments with thinking sheet. the would you're then expansion balance that NII for year about mean decent given the how that your growth

maintain remainder and Jerry We're I give bit to not kind you we'll so little -- the year. that. $XXX held, yielding going -- quarter. of We mature until those guidance have that tradition this just right million the now. That's are a or of portfolio of just give next either investment has will our expected for -- X.XX% to prepay. with do of And

billion So Fed that's portfolio. see. Again, or mentioned in at Whether we'll approximately. go are yielding about just an $X.X ] loan Those We'll the our I that into XXX opportunity. to use [ to have that stay XXXX.

not maybe pickup So in as a 'XX. of much

then expenses. switching And to Great. Okay. just

that better. a X% You X.X% bit mentioned which to you to guide tightened expense range, that is

accelerate? Is just decelerate you've And next how the expansion you growth that your rate on do into preliminary for just quarter year. that the some you year reason fourth growth any there next any As thought you would why to opportunities on into see strategy? given actually look out about and plans thoughts given

technology our I would next people, going customer we're in I guidance don't is, invest the for our with and not going see it but to decelerating. what to But to give again, continue experience. year, say we're

I answer any So that see comments would anyone don't question. that's fill I how I there. think

No.

into to going lean Dallas next to expansion Our We're up year. finish hard going still to got Austin is strong. be

So of you'll from markets. I to back we're And in that. think is have is see that that. going increases we're area off growing, seeing everyone don't lot great we are an Technology in. a

to into going to we're So be lean that. continuing

follow years something anybody hire we're before we as a As much and got of said pretty this you over on mean us, have the the or on expenses. off X I to tight people got sign we to expenditure. in capital you you've room,

So know off. we're now, paying right that we're but pretty requiring, it's investing we also

we're the if organic We're can. to that think this what terms time, do business that careful And think trying same now we're with you, we're that's remarkable. a at overboard lazy being we're right we've as us for stuff we're is be going I important I had the our But not into being reason. with is as not we're -- But of growth with I'm going just not to time we to of us expecting not anything. now, be we for in not that. mindful it, expenses. slowing down and I that really promise spending. and works But our investment think It's

I one Maybe last credit. appreciate on that. one

improvement quarter. something in you you bit this and on outlook there. is were the what in I if was just the economic wondering the growth given problem the for you? that loans up in was about NPAs just a reserves for had driver mentioned reserve You the talked specific big those ratio Or the bump worsen

growth. primarily economic have an that drove was we just And mentioned had that loan It that. one was loan Phil outlook. strong It did our

from of Poonawala is with America. Ebrahim question next Our Bank

deposit upfront to and remarks, promotional coming that Phil, up, in strategies be think follow in without dollars to marketing was your do to growth you and wanted about bring opening I deposits. talked I having

mean made, translating a sense function give if terms some of I'm Just client or a pure mind, terms -- of time investments you don't just checking the in deposit are this acquisition what's that's what to Is the of tied it's avenues of into -- deposit branches but big you us assuming core in lending spend growth? the opening today? and driving acquisition deposit the account

let's for you just I had Ebrahim, if we as making growth, percentage -- lot the client things. client we're a it's think us. household locations first that -- in comments growth, that now think the We acquisition XX% of the acquisitions of online. -- It's look new I through of was at expansion. expansion And the of big Well, -- X% We're great physical I to Yes. I for of look the is all, mentioned throughput deposit We for mentioned those online difference in channels. still at my of coming through is think look our coming to growth at fiscal acquisition plant, got -- still we're opposed customers. a

So the no is -- about rate. outsized growth this helping expansion That's with it, so if doubt very that's solid.

thing The our is is. world-class. service I is mean, just other though it customer

driving word reason mouth a is And of growth. so big

we that sign do at best at have to customers order, look I XX and for get information As our as we'll it's the they us, factors, to why think we factors up. rank gosh, least come

that that. the after add to recommendation from the speaks the got. -- Interestingly, soon I convenient is to fairly things friends. focus to #X that somebody, factor is still is that location. But service fairly the close customer I'll X consumer family recall, And second side, or a other factor, And we've is this as on

financial for in Our was time Apple. app, app looked highest-rated the the Store, App I last

great to got technology. you've so And have

at investment see. we've and better part years customers expertise else. to that's pretty might area of that marketing our growth And in the really infrastructure us really. think about and done a of hadn't you helping we the And We've leaned that last this the our of we gotten And as you build I into remember and everything our we've needed lot dollars. at one growth. made marketing hard we right some an much few But thing really is was expense better talking targeting think time, I that did really

not the Houston thing. I'll submarkets we things it's So all great we picked And with Austin, like also really is any growing we're then these in Dallas and markets. best It in the And up markets. are those say and one can come together. really that

we're to it's think just all it's so I previous learn continue expansion better And it at on as hitting efforts. And cylinders. -- getting from we our

one so hard thing. a optimistic for disciplined And work It's doing our great and really I'm it. job. not any just are people It's

it's relatively as Phil, terms the side, mean, us a I That's year loan of, we upbeat good give in helpful. you're been sounds regional have lending out But, sheets of on landscape, week. next I elections of growth. even competition, banks come And It guess, like markets, balance sense a believe. great repair intense their time guess, a of competitive -- I give to but us I had the some the --

coming So terms what are are of lenders, you or regional the any X private lending, seeing your to nature and are the now the And just one compete bankers banks X, you that of having big direct banks in of credit X, ago years prevalent from against? your in across competition?

competition more Yes. is deals. I on the say heating up. proposals We're will seeing

say, there, will seeing there's many are I it's I but it just some seen to play would so of We've you've pre-covid not right? it's -- it's that we're willing but it's bad players got do. movie same But more the at loosening that think we was look before. the are I more there players ones that mean up as are I CRE, just old that stuff, structures times this -- -- think as and now. as not they're

real people lot particularly deals, a of money, commercial sidelines some estate. a for of were too, kind who think running of ago, of was the I on out are year there these

don't deals now as you quality particular, just some think see see that we makes sense. so in structures And you

maturity. anecdotally see be its a a considering on are let's it places number. As I far is as multifamily the, part equity of other I coming up terms the private it say, loan more market. occupancy a seeing players, to yet that would are in It's of stabilization say we not people the

very So financing, really it efficiently. it sell really can't can't do permanent

So all but longer. leasing, got -- people and just point to to it's is that do get you are taking

private good of a they get solution available there's once person these lot be that projects. equity so that might a there, And liquidity get And to for for to stabilized point.

in So there seeing that of great sort out lay little we've guess a I give of [indiscernible] for I'm right category growth. are that is not the the the banker competition It time. of Frost I I I up just -- consumer the think that's right mean bit. We've product say nervous, me otherwise kind X when And don't we has grown will one or XX% mortgages. the It's had people land. don't place I this a think the any from got X% consecutive that's side, time. quarters. X% of who whack. at but I we've make

through home expand get to or capital their they're or their going or like home a do going something they're it that. in house, if equity And to house excess improvement

-- average credit just and happens only that to it's good. I mortgage million and place now, the to successful going the right it's And around but my is it's there with said being still but time continue like score new, $XXX didn't to grow. said, product. be at I right if I in just [indiscernible] So think -- so to comments, I that is That credit like our then

I hope general market. So the be that comments on helped will it good.

Mealor KBW. Catherine from is question with next Our

the just that to has back Wanted the expenses. typically stock some to higher know fourth quarter circle restricted related first expenses just on I awards.

like. wondered the if you typically Just what could looks us that remind on

start is And go run growth so of to year's better maybe as we kind a rate. rate what into next

guess to I quarter. to would start year's at answer add I you kind trend of the last I and any I color. look fourth and Dan in let that. almost third Yes. send that would back

gives perspective. that I some you good think

we nature immediately. As some you awards your expensed have noted by get in comments, do their

give that you for what feel at of you of think So to a rate. of run that, sort kind our I due look best if things those expense kind

anything to Yes. else I have don't add.

-- think know that's I that. you

one the Okay. then margin. maybe Great. follow-up And on other

rate you securities talked repricing got the fixed and maturities in Just billion loan about amortization. $X you've

On us should year? the what -- securities we annual piece, your maturities that next securities see remind

that. mid-Xs. Sure. go It around And that had again, Yes. let me year. to -- And billion just a was $X.X next yield

that little size over intention bit slowed of book? you Mid-Xs, this it pace see that about to your Would quarter. the the you've Okay. be the balance Or of a thinking couple And similar the how next maybe bond mentioned your of kind are purchases of quarters?

now, things think balance don't really go. I optionality quarters, how anyone building doing is to the knows for just customers let's us. last paid been depend. What I we've the past going it's it's the sheet off think into I for going get exactly few election. are I my kind think mean, to I of like

decide that think decide might we to that. optionality the I some the And utilizing we'll respond. have markets is and And the of where some in value how see market. Let's begin

That makes sense.

up opportunities just And know but I I markets you're think a guidance you seeing expansion on then maybe color you're give And like move then giving it around we little for probably as given may not your really we're moved around that some discussion of to any Fees just there into 'XX? year, us and past in and improve just next feels week. quarter there? kind some 'XX there's your momentum were this seeing strong get you're Can excited one next just all bit. guide one last and fees. what

it's organic think by driven our really growth. I

So could factor that year, be there be that I growth down think We is our seeing the looking downside. a could interchange you're really into regulation fee a next that function -- of volume. comes to

clarity So you will volume fourth well. But X.X%. as to it's it's that just we give quarter. just was that around And again, to for keep primarily into I think it something the yield, in a mind

Great. $X.X maturing next Okay. X.X%. The at year billion

Right.

Our with Gerlinger next question is from Ben Citi.

done I I investment know I'm one, have Houston you on kind of focussing when bigger for are also the 'XX, you think not of have picture just technology. give guidance you know spend, here Austin, but the Dallas, on, going of to you to that

was year, just this kind it into said don't innovation. last earlier want think I year, X%-ish that of is Texas late -- I you of stakes kind for table the the remember, of leans but when kind franchise,

you hate answer? core. after because say think strategy [indiscernible]? But [indiscernible] 'XX a the for there expansion is of just you I But of build-out longer-term is Austin, think about more does kind to about core kind Or when on when thinking branch --

Yes.

as of expansion, our think be this part I'll strategy it's up Dallas, strategy, see months call it you finish And and that bad. Austin, going just the of up kind I I to you're at is just that and say about it's look -- this put XX a it. what and is scalable, looking probably I durable. think mean, way, I finish we that we for

doing doubling expansion be a the that. these time, up go we've old made forward, that first that when I doing began we'll think let's years we Austin. -- what up finishing By is terms be investments. I of I Houston the markets back X.X X couple sometimes that down mean, original years we Dallas, think into about these finishing will of in

you the Houston X in been grown ton about Dallas, last And going the thing same Well, has cetera. what's a years. et can in say

growth to go chunks we'll filling be has and just going where the be period, instead allowing think and us Houston. think is to X-year be weren't go puck currently where those in I been, market areas go I over the growth -- going that to where large -- what let's also of but Dallas is of going. in but great So Houston take those we'll present, continuing it's expand able particularly where is markets, we And we're doing to

that us allow of to location be And earlier. It will markets think some to I helpful these in us. be

I that the us major to expect markets So foreseeable continuing I see do for to doing in us future, these in Texas. be and really

it about very of Is States, obviously growth with when being Texas both and That's think United you. has loan Got people of mean, across the helpful. migration -- just the kind better the backdrop on average. Texas companies. been I you of

even more bit competition people standpoint. do accelerate, more I'm Texas want competitive to competitive pricing growth within like So gets just you there. little already if think double a because lumber starts it down thinking and of a the has to

does but And question, competition follow if here, pricing more accelerates Ebrahim's growth from get up even intensified? loan on

around for yes, would think competitors in, heat but mean, think get we're doing. we've coming anything dealt I new I but do that that as worse it with that that, margins, really I man, the impeding don't see cycles these and markets really -- I through it long. up, so

our we're that with are to I We regard funding. one to balance I'd look if as one mean, and it input of you our price low-cost of of -- argue really at sheet the things -- producers cost relates that deposits, competition, the on

very compete to on So price effectively. we're able

up I most no ], is like see reason, The that the most, to people to We a we will there there's that don't on, -- won't we've us affect like lose that's will [ long there heat we will deals thing and to you of that do. certain compete certain over quarters And probably are for that certain because on -- get in probably we certain years, deals guess, back, whatever do term. we're learned willing kind are money is just deals won't that's in a it right? [ ] And we way. deals paid And where and X/Xs where X structure. lose, so

is question from with Gosalia next Morgan Stanley. Our Manan

next of opportunity you I off rate at I right on loans now? year. at and rate what The coming and about repricing loans For if are loans -- talk the next fixed can rates sorry rolling this, what year? year $X And for but for loans is for what year. had missed are opportunity the billion securities But thought I this this repricing

think I X%. Sure. book Again, back our is around

And we're so those loans fixed able reprice ]. at [ to around X.XX% rate

around 'XX And fourth $XXX $X it's for so and billion then ]. into quarter the [ million

So clear just make sure was to that. I on

Got it.

paydowns paydowns on coming belly missed curve too? we've you're know back book, capital Is your that side. of through the CRE markets the that. lower? I in then Sorry, up, I talk you while seeing any opening were elevated and did And rates some is the see about some something but that had up banks

cap there's side, strong lot CRE, projects one regards a was mainly cap seen the the builder. the quarter. available. occupancy really talking plus on with And stabilized we've money rates. to of was right Well, multifamily yes, I'm rates We've last That in developer that sub-X% now, talked for available big rates. about long-term I -- but a the we've success strong seen about market.

Once really So a challenge. available. project that's the utilization, capital reaches there's

rent you these than down. cases, more seeing kind that again, mainly talking slower just strong. been that you're When but are are But you've has concessions its thing, because getting growth of up. because less see projects people supply you in just taking so has leased units seeing, been the you you're got I'm multifamily do challenge lease-up underwrote some that's challenges, It's

And we're capital that once there's there's seeing there, available. get you --

And needs it, bridge has that's XX, serving of a kind XX I months. a of private where a I'll XX, credit It's call kind place. if project think as,

it's less it's its so higher serving structure, in a And providing the higher maybe capital price but of yielding, market. purpose

much like in get sounds stronger weighing loan sheet. factors despite loan it you're able on growth growth balance those some overall the to So of

the up little velocity more now? is So a than loans of before bit

the -- I still CRE with and we'll of we lot those projects a that They've building did projects are portfolio things those great well. there being capital stack because up sponsors so job the number are been been of So They've okay? last X a built. and our great great over probably No. performing last years. work, a mean, in funding

that, of a thing, of that's in that then got lot it. of industrial, some true been limited So retail amount kind office and you've multifamily in and

that's think that's happening. thing I one So

happens a C&I last growth the and I really going fair it I consumer our been been what strong. be maybe weaker said, I X I piece, the the I see uncertainty has and think, has the to believe amount little a interesting It's forward. there. to going election really with do to -- mean, has As think weeks,

continue hope I I grow. to up. see to will that that think clear

balances real I some I think up for we've done example, the going estate don't last be of some haven't projects of multifamily, commercial lot sold. on one we'll refinancing, we're think projects like going over to built have paying the some maybe of pipeline these to a pressure And for be because year. are we just

there off. as those So there'll up fund then be pressure things and pay a little

still we've when still that other are be But had under construction in successes that funding up.

think So it's outlook positive. pretty but see, to be I going interesting overall, is post-election our to

sets strategy our in from just year-to-date our this in portfolio. that XX organic months. in to, coming an I loan relationships specifically grow, apart. support And important growth in new balances to customers of And with new we've acquired think the increase our that, loan that And bring to I ability think differentiator able XX% us to last that's we're

with Our RBC Markets. final question is from Arfstrom Capital John

flagged it the change typical sheet in us interest-bearing. you and And right the What's numbers, noninterest-bearing quarter. what of -- Dan, right? you similar but the Is the what's fourth seasonal is mix deposit seasonal on terms and the the like in gave some have deposit to that change now feels you balance of

similar. is seeing we're What Yes. Yes.

has There's with there's at their the just nothing bigger But deposit probably thinking would really we increases to much guess in I that some think Historically, there better. noninterest-bearing customers even the because almost And sheet. Yes. larger that will we strengthen growth been balance consistent. down, say trying I'd had got so we're been point going movement. that be will I of that we've rates be say -- this

more a money have funds I against of we'll betas. them think given that able be market XXX% some will some the fact to compete

as But I in we that seasonal quoted, moving standpoint, Dan are direction. a from think

So we how it There's still will it happen. continue. feeling feel some will good really about the But that point. trend we're of at this uncertainty much very about strongly just

Yes.

is incremental interest-bearing interest are the in costs dollar And bearing next down? Okay. generally going down, the

Yes.

terms manage you balance assuming if rates? Fed changes to the Fed Any active in hedging of continues cut sheet to the Okay. guys -- more how the

Not I cash. got mean, really. much we've so

efficient has markets used I been conviction. when cash the most think we thing for us have

that a of companies there have didn't been people think of that have lot kind of lot liquidity. who a I that

a thing them use paying. So that markets. to the premium most there's is -- But they're noncash I efficient for think

when on we've So to the we us premium it get have it. doesn't the got for when liquidity make to sense conviction pay others

So as at look really seen no, cash it I mean now all we those opposed there's in that haven't they markets. we that using time, value but right value. haven't to seen really the there's positions

in accelerating? the too income? And generate reading fee out service accelerating? that? but that It quarter, are revenue, And is you I rate do the branches charge Okay. you on just starting to feel -- then into growth I like am things much know few Or new is that called a

is it I on think a I us don't just bring of -- customers. driver new

again, may number at help growth we should our that ability And Will be growth. that in fee -- customers we a high. driving is just grow may so we our to into X% will be into so that pace, -- of that's Dallas, see, as income and that, grow whether Austin, customers nonannualized

I conference questions over back time, to at this With turn no closing remarks. would for Phil to like the further

We earnings Jerry. appreciate Great All participation conference XX I everybody's last and appreciate job. you on congratulate today. We right. your your call. service years of here

you, Phil. Thank

that, adjourned. With Thank we'll right. be All you.

does This conference. you. today's conclude Thank

thank at disconnect you may this You for and time, your participation.