Independent Bank (INDB) 21 Apr 232023 Q1 Earnings call transcript

Good day and welcome to the INDB First Quarter 2023 Earnings Call. [Operator Instructions] Before proceeding, please note that during this call, we will be making forward-looking statements. Actual results may differ materially from these statements due to a number of factors, including those described in our earnings release and other SEC filings. We undertake no obligation to publicly update any such statements.

In addition, some of our discussion today may include references to certain non-GAAP financial measures. measures, earnings to filings. release non-GAAP found measures these our in and about including GAAP reconciliation maybe Information other SEC SEC accessed of be filings Investor These section Relations via our the website. can

this event recorded. Finally, please is note, being

I to Tengel, would CEO. over Jeff ahead. now turn go conference to like the Please

Head thanks by good Bank Consumer call today. as of of joining Independent I CFO my am you and for hosting earnings Thank thrilled I first joined am Corp. and morning and Ruggiero. Mark us to be Lending, CEO

I’d to predecessor, upon. build XX foundation guided for First, like out strong give to to past Chris Rockland a my the years shout a which expertly and laid Oddleifson, who on Trust

and then, at calm. the was have relatively challenges center has month the least at So for I all now been first Since the helm stage. taken the banking in industry, of months X.X

get me but we impact quite let the its upfront, right regarding are you So the interest take banks. that intense say, all-in-all, to will well. me just through individual given on faring topic Mark let details,

respond immune our customer-facing and frontline questions not things the excess to were and higher been rates. continues in in X.X% colleagues That’s quarters the armed to we experienced an in say drawdown concerns. of trends. quarter, with feel seek we deposits Total peer outflow line environment, with from this to depositors but volatile support as At the prior outset, liquidity We do have and/or calm down on prevailing some have been very coaching customer interest manageable.

ourselves than it’s provided on relationships and tapped of sources arise. history of base. liquidity to But can has more to we’ve anything, also We access need reconfirmed that stability easily deposit avail further the our our into focusing considerable core should multiple that

historic at remained has activity be checking retention account and highs household fact, continues to new strong. In

over across outflow management lines. to of our our relationships group some business successfully we migrated manage our investment deposit Also, as

risk well us each granular come diverse throws leaves us. that That us business matters whatever already positioned navigate with no of surprise. coupled many external all a where know stability, customer a as conservative environment should the model, of For challenges at to culture relationship you management, of balanced this and history base well and our

are all as means of plans is in Notwithstanding elevated that, We cycle ever amid no vigilant interest and playing communication rate developments levels to much ongoing complacent we out the by remain this still of uncertainty. with place. contingency

near-term and As other the challenges, the prior considerations as proven despite to our We and environment remain weather pivoted steadfast our in sound at of onset earnings banking prioritize to than ever. out we current has come impacts. safety company quickly stronger uncertain the side results

that punching few job it’s share culture Rockland and impressed the that? is mind thus broke, I not The Zooming makes a to fix I’m franchise the a a Trust special is many the weight amount time, truly that inside. X would built in learning, upon Rockland Rockland comes team far, XX fall change spent I’ve above phrase of our years, company employees over changing and past Chris special. far. so interest unique considerable my few why the the have that to strategic company. the from business out, adage I it listening would I our I’d build the if preserve or guess of a class. reassuring by that observations like initial old in the model and being under of ways, direction Trust was months. is my more don’t My even impressed from company the to Trust on it. I

path down We to. become we’ve growth that the accustomed disciplined of continue will

the had add that to months, our of I’ve and speak to folks shareholders. opportunity in just closing, In including investment a wanted larger the the few community, meet I number to in past

insightful. these and pursuing years, operating position healthy of the are from found a dialogues conversations strategy that reinforced always I’ve strength. and recent These have just right conviction the Over my we

I to Mark. to turn over like call would now the

through Jeff. on Thanks, will earnings website deck and the investor filing our today’s in included I in presentation was is now take us X-K available that our portal.

the quarter key our Slide first of and X summarizes deck results drivers.

on noted on tangible updates many behind some the slide, touch results, recognize in quarter to return importance quarter of assets that will the reflecting in and borrowings. the highlight deck results, of further funding this and we management of As risk was income costs which decreases, first challenging the higher equity this produced common drivers quarter to X.XX XX.X% insight common through on EPS return on X.XX% from addition results $X.XX noted, largely we on XXXX XX.XX% we Also of diluted a net on These upon was and equity. GAAP respectively, primary and environment. key and due $XX.X are average XX.X% million deposits first prior a return rest

the despite you. deposits, the charts, which key we But earnings obviously $XX.XX. highlight deposit cost in activity, deposit typical stock before activity, of moving and full many a slide. for top Addressing areas, will to bullets this well last the in on, on betas will I’ll over includes quarterly we changes as mind details buyback couple strong quarter, highlight additional of value of a reflecting book minutes from X as $XX.XX and our balances comprehensive is increase deposit other I Slide on of first during for future tangible a million focus completed resulted $XXX the those two in in income risk quickly noting modest quarter. And

usage and compared total loss a believe to, last excess is competitive due runoff a positive $XXX X.X% this an seasonality, deposits environment, included attribute We noted, the to to to last important though and insurance factors, upon which, million quarter. extremely alluded wealth to factor. our declined including expand to million the rate $XX a As liquidity as to when general note, of another combination lastly, factors, a it degree, And of on we inflationary team. protection or Jeff moved FDIC that management other

on the monitor is that households, in outflows to Focusing and the words, cases, to very redeploying deposit of their activity liquidity in vast impact, other note customers existing closely existing many we attributable majority accounts continue of money. excess

a The to focusing the the of for levels to households level new of and with highlighting households households, led important of our us core levels record low, which deposit And attributable long-standing in in relationship "new to quarter." to remains QX lost historical further metric growth positive very outflows it’s attributable history consistent X.X% in accounts, deposit is highly on bank attrition.

such strength where on uninsured base, Continuing we the deposit also over risk to to included move focus our we data balances. of points Slide emerging have deposit as X information

municipal our amounts. another by total deposits deposits of of March or additional $XXX estimated million represent This the the noted, And deposits or collateralized XXXX uncollateralized. $X.X providing X.X% approximately not billion relatively insured total results of a in FDIC, As uninsured are being protection XX% over uninsured of those though deposits deposits. of low bank, by XX.X%

our relationship not and outside all concerns educate We strength proven take in franchise, great suite in banking continue of we within and and of our offerings. are of influence model do colleagues, addressed with we While deposit comfort work product it granted. and to take ensure customers our any centers historical for the pride take to

balance on we liquidity Slide both by additional is and liquidity. its Jeff for regarding Federal liquidity, of across to sheet the position, summary, measuring monitoring correlated key In And impact provide metrics and sheet on as some changes now drivers we cash a risk we in the the at X, primarily used priority which, on the our our held manage borrowings. the Turning highlight effective and though various to stated, information monitor company’s major overall of us. liquidity on-balance the Reserve sheet are off-balance industry

in XX. represent X.XX% emerging total in liabilities. and $XXX entered increase interest along into million proactive interest As reflects term a the funding Bank to rate the noted to approximately $XXX of we borrowings risks $XXX on-balance Federal quarter. industry $XXX perspective, observed borrowings increased a March fixing million to average of approximately the of on previously in management as million Home million with borrowings Loan decline an This rate decision of at low of to $XXX X.X% balances, Total direct the mentioned, deposit of a of here, from response the in years. And of rate share activity liquidity a repurchase with cash interest-earning overall sheet bolster borrowings as of million resulted average X.X action, over the Boston hedges weighted an

the channels, borrowing Federal including capacity, could can you see off-balance serve that through Bank of and Loan additional our Boston, Federal borrowing collateral. securities we availability un-pledged the Home as primarily various that Regarding sheet Reserve have here

asset in that and borrowing emerging strategies direct an quarter emphasize industry and to increased risk, also additional the basis. at response we on our assess the pledging will during the Reserve to I ongoing Federal continue capacity significantly

The and impact keenly risk sheet exposure at trends there are is and balance also our capacity deposit XX, estimated We to and deposits analysis XXX% management. on March liquidity monitoring of potential collateralized comprehensive rate of tracking excluding represents of borrowing the when focused ensure XXX% and a deposits. liquidity interest the on and XXXX, approximately our uninsured

by million the related $X.X for principal on risk in some rate securities XXXX, million, our to offset pay-downs management, prior information $XX.X billion. portfolio. security and quarter. quarter reported unrealized AFS of for the sale included information capital Continuing $XX.X focus totaled Slide decrease XX, gains of combined on and and securities interest of $XX.X key as The X portfolio reflects portfolios million we the HTM summarizing have the The available March from additional

AFS balances the those average years, details entire portfolio the portfolio of principal expected of Not loss next the portfolio is unrealized included this losses slide. another $XXX the unrealized position in portfolio. balances. X.X% held-to-maturity is on or on end with over on life years quarter X.X the The reported million of or of the payments included of $XXX X.X% is million X The

tangible the factoring net even our we in capital held-to-maturity tax. tangible by highlight ratio of With AFS position portfolio noting losses strong our at our losses included when unrealized the X.X%, reported remains ratios, already capital strong capital in

approach growth the patient managing over there path balance risks no on environment, of is confident balanced emerging I to the has positioned earnings this long-term our be to challenged sheet will well that stated years our to us last and we continue that and growth. earlier, are denying adapt as our While X in

this in XX, will relatively slides total flat cautiously quickly Slides provide highlights X providing now. activity for to the components a which I remaining with Referring loan The balances detail the opportunistic and loan of results, of reflecting other to the the credit environment. remains quarter’s posture all our will on summarize solid quarter,

long-standing on disciplined Our meet to opportunities our solid that banking pricing continues focus loan credit relationship and provide philosophy.

Recognizing of level the real commercial commercial been Appreciating reiterate today’s competency the environment, that long-standing in provide over bank over portfolio a to exposure, estate this are of and investor credit classes, information estate I to in has underwriting interest and core loss with discipline credit dynamics of lending will monitoring of office-related over additional portfolio. previous there we proven that the has mitigate real relative unique composition that cycles. particular,

While details go very portfolio, metric XX, managed. with balanced we metrics. well credit feel to all credit through data I a won’t highlights portfolio the A Slide – is very and current continue on which strong diverse the

Further over XX. credit brought we last $X.XX the Slide topic for outlook to asset in quarter, large we the C&I the of Staying move of on quarter the that deterioration to the mentioned provision quality, nonperforming million. now

a total We credit, this cover have from now million reserve overall the consistent outstanding $XX.X Separate asset of nonperforming remains specific prior of to balance quarter. strong loan. assets, and with and the delinquencies individual this XXX% allocated quality

X the Turning to When net basis the a the quarter. non-core earlier, basis in net reduction deposit X.XX% cost net due borrowings margin and X wholesale interest items, the the interest and margin, pressure noted to of interest deposits points the in margin for quarter. increase point to core Slide decreased primarily in for XX resulted excluding reported runoff the

profile. in cumulative We snapshot XX% and the beta provide line our building impact both on sheet asset-sensitive with XX%, balance and of in and also we the portfolios, out longer-term right in highlight used respectively, loan deposit are assumptions these a at the results

inflows Noted income on bright expectations to and results in average our timing fee with the with Slide of Though new on continuing management be spot were line wealth fee offering. lower XX, the fueled and market ratios XX from by impacted under new inflows increase net $XXX at $X.X quarter, revenue, money total quarter-over-quarter money appreciation. administration assets of billion million reflect March prior an the or of X%

payroll expense also reflecting on approximately XX, increases CEO line seasonal and in transition. of expectations, associated million costs $X insurance was with with one-time Similarly, expense increased increase of FDIC Slide the taxes, X% in

XX, the a as we near-term limited result Lastly, significant as factors, expectations. set Slide provide macroeconomic and focused of trends a over guidance over general of summarized on emerging uncertainty primarily environment on

the prior expect With the to quarter, reduced approved we total the loan pipelines balances flat compared overall second quarter. for now

of overall anticipate competitiveness spot pressure a deposit market deposit deposits into With products at rate deposit high. basis pricing cost overall rate points, We and the continued March balance remains shift higher and will persist. XX

of we some borrowings a the anticipate changes. We of be of net primarily direct likely outstanding expect in level items loan will margin result Similar and changes to QX, culmination further result contraction. deposit interest these will

loss decline reserved, anticipate credit changes lastly, changes the to regarding overdraft and the recent now C&I anticipate compared to overall from provision flat relatively credit significant loan to non-interest we no low in barring for totals. non-performing to single-digit the environment. QX as flat non-interest increase With to fully items, despite expenses And income large levels QX we fees

That up questions. it to open concludes we will now and my comments,

[Operator with ahead. Mark from go Instructions] Piper Please The Sandler. first comes Fitzgibbon question

Good morning Friday. happy and guys. Hey,

Hey, Mark. Mark. Happy Friday,

loan Mark, year for for saw balances footings sheet the the I as expect flat your balance well? Would be to year. you flattish also guidance for

Yes.

me terms In help there, – what of you mean. out Mark,

assets? total Just

Yes. Yes.

a some cash all, little sheet on total that we impact borrowings, number, won’t on footings. we out. that’s isn’t as the do I balance mean But to big level a have but will big in monitor a I we number continue a have proactive Based too think environment plays talked it all bit, today. of on of an that

say serves of So as course March the proxy I’d end year. for over a good the assets period total

the similar you in second NIM would extra expect of a to in on look way less because first the to the take quarter it we you the did little have And the what Okay. of sort then quarter? is you secondly, sort saw the compression quarter? Or to liquidity in don’t first the

tough sure overall direct a on to I’m going a deposits really to And Mark. our you that of of appreciate it’s Yes, it, on depend impact level honest, balance it’s question, the can as of be borrowings. kind has

only the X.X% we had portion or to give X.XX%. of margin some spot cash perspective, just And So that you included the our quarter. March that was during first a borrowed

the So reflect levels of or the net of $XXX no bit million balance of points. tune the that, cash X when also margin you that on will of sheet, about on income. to keep could a a we has although absolute create impact drag the That basis X on interest

we’re be. point tick reasonable But to starting March deposits balance suggest that little So from endpoint be exactly see up you’ll those a will go to bit really at I you’re a to cost think – I down continue think from think a I cash the I level. continue the from predict of X.XX%. sheet. will we of drag levels. of on do And holding that the can’t I March where just it’s There’ll

a guys stock at you obviously, the quarter I it even $XX. during going be And logical average of first then of bought at aggressive that more an price, to you’re Okay. $XX? Is think, lot

Yes.

our always rate and and moment what the more the But looks on at through of going tool clarity it’s the probably at It’s button like certainty a about future the I something environment the quarter. moment, we’d hit think a like. that that’s we kind the move in just stock toolbox. bit buybacks any as situation assess of pause we’re to kind second

in sort for of seat bit been little And Okay. driver the now Jeff, then, here. a that you’ve Great.

Are the As to sell that where and you opportunity look lines areas books at business? Independent loan there you business think any various has. there shrink an of the pieces of sort or is

really. Not

feel isn’t I the pretty we we’re or there the don’t I much I double too of anything, – hotspots think of is feel haven’t on. hope sort continue progress – like suggests for that think and the portfolios think like. seen would of have example, of I if not business, performance a market we what we exit any anything to that we can any in we’re – would in, gave But business businesses. on risk of C&I we’re are most I’d down taking like – I lines we’d good really to that about middle is one number our make I me that pause that loan that the

at And of your Thank And in you. Great. think of possible wish top so, sort M&A you be if then is environment? the do would what this list? lastly,

That’s as a our But environment. that begin similar somebody appreciate, here. was is like just is markets like to to guess, out test with possible or would think tenure what take M&A very that’s might I’d believe business filling our my sure that that, what whether something guess. be process markets the M&A going through get round really I’m adjacent existing I today. it’s to regulatory in in see longer can strategy to would It looks be bit you that look question. is in or have process It franchise. I to and good this a and where it doing to would already we’re us during Chris’ And going to else

where understanding there But real at of look and environment in I of I is that any have mean, created I would have look think certainly obvious to may accounting in the appreciative just comfortable environment, through the get be No, be to you and this noise you economics would deal. accounting the this really purchase Mark. the add, that marks that be. can you

of capital a always that makes higher sense. that to I deal of proponents – weed noise As having internal make and through sure rate back we’re earn kind governor result dilution likely big return of initial as accounting, of really expected, a and

you. Thank

welcome. are You

comes with Our ahead. Steve Moss Please from next go question Raymond James.

morning. Good

Steve. Good morning,

Maybe with deposits deposit just starting the here, costs.

are migrating see and what how head costs quarter could quantify or higher curious two? upcoming about in higher? deposit the those much pricing thinking those kind costs interest-bearing you you of Just guys for you could If how

Yes.

customers for Steve, perspective, of some earlier, on degree I sure. practical a and that to business one to consumer of tough some alluded side are for number seeing pick looking I our we’re But As small for a think the just is from what lot a to a rate side. on it’s

CD Our offering really resonated. has

a higher incented have CD. the We of of curve, X-month in and We’ve X.XX% obviously, retaining in really this end been that’s well on balances. rates short terms working the environment,

We have the having for exception the such, that money of the money kind would often to and because what to for we’re able to where with really job lot exception franchise And of deposit some have more customer also call the deploy of kind the rate where of We conversation a in of customer. the a a great basis relationship as building have we our loyalty reprice much done with it’s versus pockets ability looking accounts, pricing looking deposit we’ve do type have promotional strategy market we or I of product. a in base. broader

talking the seeing a in they is a that And So are that a we say pricing points would story It’s worked that imagine, But take rate has market, lot our can to or is often game up you deposit. that And will when granted. of relationship a for in we of in play here. again, this about don’t that customer competitive defensive the been to not retain can that environment. in only usually XX get X% has XX a we’ve well. we rate, if our competitive basis as

at the for the cost of proactive points. But seen. So you’ve in to increase dynamic, Steve, March up Xs to created offering price that’s is referenced, a money the it our continue that those up XX to mean deposits CD likely at in now obviously I being rate-sensitive where or that’s And doing I as was job. makes basis the a we’re sense looking right deposits. market

you kind month. of that’s points X over So or that X basis course figure of the

where I very think likely at in see projection the into we of the of end a we are will that’s probably the near-term, quarter. kind heading QX,

have you of maybe the much do I remix realized be at how the any just liquidity, ultimately that? side, but Okay. over look sensitivities kind of next could quarters? quantifying how non-interest-bearing think ongoing customer tough, you excess on could that’s of do here how you And of remixing you think the couple with kind you much when – much or kind if

quarter. tough in lot outflow typically, because have the a it’s one you’re related want a the some now, don’t first tax here Again, dismiss. seeing quarter, Yes. Right to We first seasonality to I usually payments. of

at parse normal start I out reasonable to from what’s of a would the – – it’s but quarter I level off quarter, it may So towards think the it’s the end what comfortable to just first else. in of tough number experienced really will something sort I predicting be suggest point. of course we’ve business to not really it’s pace think this But versus the don’t that.

maybe then you the months? Okay. be service XX in on debt terms disclosures And guys on maybe of maturing – in loan if even may any the office color provide how here, value, And to much next coverage. could the underlying wondering just

number I what Yes. loan-to-value The know is. – don’t is the

I it’s pretty think low.

are think on lot I calculations older with XX% in or is those XX%. problem But of based of the it’s appraisals. loan-to-value the like a that calculation

debt I coverage And health X book of of the north is not our really measure X. service service coverage, office so is because you mark-to-market, a better of in are the it’s maybe a because if sort and portfolio The think, of will. not they that, of the good indication all debt

story million pretty whole roughly of number. of the is I to out that. relatively reprice office slowly. around the a couple have manageable the next think So feel going about to the about that think good pretty is play portfolio office office which we in is And And years, – going we $XXX we

lease are actually it’s not much maturities how the just to be maturities. are because a going tsunami lease determining loan maturities are upon Companies think the still want staggered, staggered, I space they

still a that’s of So an unknown. bit

So number X, is over X, occur years. factors are there going variable is all X that all a of and to

that, So good because of we all feel our of about pretty portfolio. office

maybe for last terms pricing, one you of mentioned have loan one me just Okay. in guys declined. pipelines And Great.

Just these kind for curious the loan of what in rates you’re seeing days? market

Yes. I you, playing, say would But where still historically, also fairly disciplined middle would the in we’re market been it’s very I we’ve tell aggressive. in our pricing.

And because haven’t that we changed so needed very to be spreads that our in all to much continue they because haven’t disciplined regard.

pretty overall the going don’t they feel on nor book I’m about to out again, yield So loan about going good they dramatically in. credit are to that widen the are talking our spread. think come and

Right.

– the of the numbers range quarter forward, low-Xs. first commercial around drive there, going certainly side, has terms quarter in in some cases. even a In of commitments booked that funded terms in X%, terms fundings X% just on will that of lot of first the the up of A some it that or into in were what gone lot was the in higher

lift So, level interest we rates. of the are nice terms of absolute seeing in

what down. level has As and of – the just I hearing certainly you it’s to other are slowed similar the churns, think institutions, portfolio attrition

flat to closings less needed and/or growth. get it’s modest to So, really

on although we the commercial are in side. seeing not impact interest So, be a rates terms may nice overall as the big, of lift

say has but going high-X% continues will resi the get On it range, side, production the continue we area our in been up. of to I monitor go X%, most looking an would that’s forward. closely to consumer to

Thank Great. it. Okay. Appreciate very much for the you all color.

Thank you.

with comes go O’Connell question KBW. ahead. Chris next Please from Our

Mark. morning Jeff Hey. Good and

side to want keep loan of going the business. I just on the So,

of of Is is markets? standards your in are here? you I your is a pricing that there or the that it mean, less slower out you it on being to provide the is it everybody is at some hoping there – could credit top market of color environment think seeing more kind demand growth so tighter drivers. the But loan here. I as

Yes.

have think I of of latter. and think three, historically, on I it’s been probably disciplined all those we the credit both very pricing. Again,

that factors think So, demand changed But is much, all opinion. there really haven’t less my those I two out in there.

companies have to been think cautious. being a down have using pay line. we they their are funds seen, more I And as bit the

as Yes. I you mean or CRE And other any outside are you other or C&I attractive particular you is specific office, industries here? this stress as any far within in market find putting are guys seeing segments? at segments, what of there in the cycle? point like most either and that then guys And on the

of asset generally, to Chris, would well projects. of I I are are in with. with which very we in highlight chime and terms over opportunity see to add we number probably them but comfortable feel stress, free on. Jeff, seeing are very are I and We will that a relationship bank, obviously borrowers can But we we and being continue say no, here, not the know of and sponsors of classes, space pockets Again, we right, selective the types a commercial sponsors. have we done where business that’s in

of a with. comfortable there one primarily still I box credit family of is level There hurdle relationship four are higher developments. But mixed-use. been say the we of construction, and kind would some industrial that I apartment is borrower clear, to sponsor our bit little Again, by it’s have to that with suggest. a would condo a or fits don’t we So, right profile if driven and that a with,

funds down cost to has of some the the estate the in deals in activity increase the tamp given of estate anymore market for the also And served Yes. real commercial just developer. because real rates higher don’t out pencil

just been an activity we that’s that has have effect So, the had I seen. think some limiting of

I loan around comments And the as as the well balance guide. it. appreciate overall sheet the Got

those cash of so deposits, what’s you higher or it’s securities remaining of securities of For flows? the back of year. or think the like million best or in or cost I half that’s maturing to down limit the of Do this – borrowings that the shy kind $XXX pay plan just portfolio guys reinvest use

still Yes. paying borrowings, That will assuming are certainly be those down to redirected outstanding.

than with in have we can have – are and portfolio certainly the operating past. now the higher securities recognize that. We We we acknowledge

certainly position securities allow to to in that a just the are that against we So, near-term. for a borrowings very in portfolio and good redeploy trite

be in securities desire this we back So, have to point. at the no book reinvesting

kind And it that Okay. was the…? with $X mentioned think the compensation you in Got one-time million comments, line I prepared the it. for of

comp That in and level to transition. legal was related all some of

Okay.

and the go-forward that’s kind then some think in trend on in natural $X it you of do to basis? growth the of down So, quarter all, is at there offsetting back or second expenses flat keep that can ramping a million up, business

I the to. some will that That’s we there reflection flat. of Yes. guided projects committed – a are stay

we think of Certainly, future customer-related in the customer don’t bank. this to and of year. initiatives want initiatives efficiency we is continue to to tap have There a top some number back-office experience mind to of for I invest that is that we continue on the improve. the need

opening So, deposit we are looking technology. at account

guidance level draw some there. at we believe back that We embedded spend But one-time will time of the associated technology that right now, flat are there over of efficiencies. a the in on looking end is with

continue invest tightening flexibility that and is more provide of opportunity is suggest pressure, but I near-term. there keep we we areas flat. where technology be obviously if to a game in in earnings see serves sure I if expenses may fair retains, think will expenses some us relatively Chris, there the path where and our we the But costs check to continue be, in So, to compensation future belt looking to making But there. in we do combination to at the pressure be variable us growth the should to arrangements think keep the bit

there, or And looking I Would a would kind look opportunities you up of it following be guys at or of taking produce like it. would kind guess things types what closer of contracts nature? of vendor that be or be Got at? headcounts, it footprints

bit we consolidation the that’s or I mentioned. return, I answer. consulting facility make two, have there. above. renewal, a of hard we vendors those the had have then We side, would of, there be maybe other And an immediate may I the I is the immediate up level are of the mentioned where don’t to anything right rent on, as have into may little as would standpoint, of the coming meaningful Maybe kind that suggest opportunity longer experience say from a say is right in taking [ph] on there I opportunity where kind now Yes. point, anything past, think I to a but cutting details NTL of getting footprint a cost mean we it’s wouldn’t there. I not and your I that expenses think associated, there is have changes. opportunity say an we have to some of I a there widespread. at. expense, it’s But all looks too is opportunity Anything for certainly think don’t

of similar What’s side? schedules the And kind fee given point seems well quarter fee it on on it. starting a wealth the line as the AUM new next as for AUM some maybe the on. timing, Got the of management of good base on as put like well

of total terms revenue, In the or number…?

Yes. Revenue.

Yes.

I quarter fourth want so to remind, So, was elevated. our number

If of large some which over one-time $XXX,XXX we or We recall, one-time a commission $XXX,XXX. money kind of to moved benefit. different had generated you a platform, about had a

it municipal-related laddered of lower a has some kind products. those that customers rate, with and the elevated Certainly looking think of a well for reality first new portfolio, of the being in treasury quarter of was for in certainly saw the into you I going then So, fee associated reason. number that ratio quarter, security a being normalization And the some money more the of as it. as kind are fourth of deposit

you kind a increase think some driving of seeing the little are in or – without of less staying having AUA. the flat, I guess bit So, of the that despite revenues more I

our number as a tax is So, starting bump from fee business. to a get your I thinking We think typically probably good first baseline pretty prep second a quarter be quarter point.

somewhere So, of and QX should it be QX that think see quarter. see numbers you would I my we second But between in will land the probably guess. hit kind

over the And walk you like, reserved just through ago. here past the quarters a is then from fully as couple as credit for to wrong you is Great. that do the reserve or to take come you and in in I guys Can it’s changed continue us think quarter now just going of opportunity direction? time, for back the full there any in kind what guess that C&I that you that far of

of the as not consultants that say to some a bankruptcy. I larger Yes. gleaned trying mentioned, receivables information is true newer filing validity I a proceeds. of At is All closed with first the now those involved the the now at would the is is may syndicated associated we – company is in understand There deal. quarter books receivables. that this materialize number into of we right time is this work the year-end, And there risks the

on those data that that the So, collateral based year-end portion be suggested of still of realization the realized. small receivables as serve a would at

vast is we way of its what think that majority would now materialize back make and to I may into are that not hearing the receivables learning the proceeds those lenders.

at like feel to not full it’s a getting to point, think path and we terms return just liquidation, we appropriate of much in So, upon of the take there reserve. this much proceeds this

to insight more how out, a quarters. clarity the this we play think couple for will know of level of and not on I actually may all

full be. the the to So, we charge-off to point, process the what at regulatory bit in feel I as we result more this of of terms guidance, little see liquidation the appropriate. reserve clarity comes, when will under is need But typically a the end think we

things the obviously balance you sheet as looking are that the that a than the had mean me. it rate for one seems normal. And for And attractive term. bigger the in mean, it. I I last borrowing little like is it’s mentioned, securities, you bit locked Got I that very then on nature other looking can are as that any securities at far out there margin at? is that or mean help you as portfolio the guys of actions, there restructuring is or do to or anything

– certainly that. institutions was that of liquidating are Yes. we Personally, I a of of mean some have know we I securities aware fan huge taken not and the portfolio. other certainly strategy

it we know that. on the of impact – all numbers of paper, the think the I kind

out, loss though, the play think attractive. I inversion you the curve improve more the do and of take earnings this forward. continues now steepness bit to You a becomes as going the

of rule So, we completely there I realistic the as table. in the that a don’t embedded that’s book. answer completely suggest lever or some the the maybe But that there, securities securities off wouldn’t is could it loss off pull accelerate at or this point could we do reduction more Chris, of the maybe smaller have are trades them big cleanup pools a some it’s and of

suggest, to but I are I the that’s there we need but an wouldn’t something committing we secondarily, will residential monitor. we been where think of we has an then balance we past. that have portfolio, continue lot grown point and at think liquidation, a to the a area And That’s on well. as certainly, be in to volume So, one opportunity, is area that I our accelerate it’s saying where retained sheet

book terms borrowings another and funding opportunities kind kind shrinking But investment. sales a true out we maybe could I of cost of put to rightsizing of bit to area of. leverage, that we our portion that’s sell off marginal appropriate spread We that’s Again, with return the and a as of have maybe rates done loan environment, where the I little think sheet in the balance production well. think for that on on a pay type have in down some look

those continue probably Again, two classes to this monitor But I am are that. convinced not at look we point. I the that’s needed asset will So, would to.

Yes.

is think or yielding of to the X.XX? mean how much that I as I sub-X.XX sense makes sense. any securities portfolio

decent balance mean front I don’t you range embedded is sub-X.XX some numbers you talked alright. that but in have here probably pretty trade-off, the a of where losses. is I portion about. me, exact There of that in large the that’s the have Yes. that’s

– right been decision they to that, be to make, which be I So, there confident yet. we haven’t really would have the that’s

the Appreciate it. taking for my time. Thanks Got questions.

Thank you.

you. Thank

I to to the like over for session. Jeff conference turn Tengel concludes our This question-and-answer would any closing remarks. back

continued Corp. thanks interest like for say And just your in I Bank everybody Independent would next to quarter. talk will I to