First Interstate BancSystem (FIBK) 27 Jan 232022 Q4 Earnings call transcript

Hello everyone and welcome to the First Interstate BancSystem, Inc. Fourth Quarter Earnings Call. My name is Nadia, and I will be coordinating the call today. [Operator instructions]

I will now hand over to your host, Lisa Slyter-Bray to begin. ahead. go please Lisa,

morning. earnings for conference Good our us fourth quarter call. Thank Nadia. joining you for Thanks,

As we results begin, those during differ this please from statements. note that will materially forward-looking the contain statements. expressed Actual those or may call outcomes by information provided

statements Relevant risk on in I'd forward-looking recent differ periodic any of the Form well reports identified with not factors SEC statements earnings filed all that and XX-K earnings annual statements our any SEC note direct most release, forward-looking from report the as our in to most cause with to are read to does filed today. the filings. in results and to in like cautionary in company the SEC. the release recent our as undertake the factors listeners regarding actual update forward-looking contained annual made report included could and materially our the The

earnings non-GAAP at may release, be end regarding reconciliation the release, the mostly of a measures our your financial A Information GAAP their copy of release measures comparable the non-GAAP financial body which earnings directly use fibk.com. to is of financial available found included our at for contains and our of website on is earnings measures, the in the reference.

team. Marcy management Officer; Joining our Financial us with from management Chief members Kevin Mutch, our of and Chief Riley, this Executive morning are along other our Officer;

At this time, I'll over Riley. the turn Kevin call to Kevin?

published website accessed Investor you to earnings would again Again have have in quarter, presentation that The be disclosures a presentation joining do on today. copy us Relations can we and encourage we this updated morning, for on be investor thanks our our with if Good helpful. so. to all an I downloaded not Lisa. you has of you that yet, believe Thanks, along our and call release, additional

the of major our I'll the an financials. by to quarter call overview turn of Marcy I'm over on highlights start providing today off details to to and going the then more provide

performance company as we Western, a the with quarter our strong synergies our organic fourth the loan year to merger capped solid very Great while generate Our transaction footprint. off for projected continuing executed we on of integration realizing growth well for throughout cost the

Specific was to XXXX. quarter, the the a stage that it strong set handful bit a clean-up fourth with noisy should of for items

expansion While trends continued to these continued $X.XX saw items on a and execute loan the earnings had in share quarter, positive per quality. impact and well asset core margin our in growth, we

items generated because selected you which that earnings will we the this share. purchase of payoffs. from excluding result, early included fewer account is accretion through, contribution a $X.XX company noting per walk a As It quarter less $X.XX worth of

improvement only despite allowance to We continued also robust losses two credit offs our added of asset points for quality and a net quarter. charge basis already in in

see XX a our per share value financial a our share of Slide the we per deck, book X.X% and tangible coverage quarter. book of prior last end value quarters. strong increase over AOCI, the can you shift ratio in increase a has in performance As X% shift on meaningfully the our saw ACL expanded this and in positive two -- With the investor from

our and favorable ability to back take advantage be in to win loan quarter, seemingly our pull pleased banks position. with to continues which given fourth capital to funding environment rates, banking liquidity we able we production The to on deals. due capital were for us were Many and the strong

our and quality In from newer high our production plenty opportunities. footprint markets, increasing larger saw of we lending

of our we with were rate an total XX.X%. the highest conservative at loans able to loan our maintaining of while year growth increasing result, a level criteria, generate annual As underwriting of

opportunities as growth Going is in forward, we bountiful. remains the will uncertain and less funding environment our selected be

As second growth such, in of in of than XXXX for XXXX. we slower the experienced are we half truly a pace planning

constraint of growth portfolio. which majority multi-family properties, affordable the in were area moving during result of largest many our are are which of low into loans of given credits real and housing the came the The demand projects construction balance The that quarter sheet. estate, of we in the significant these high markets our strong this to the leverage adding was commercial much

between which average prior quarter on up production our considerably was fourth from went progressively X.X% rate on. the was loan and increased X%, Overall, the in new the quarter quarter the and as

construction balance months on with sheet However, the prior rate earlier trend the This projects loans will average impact in funded this for several as was process. made and quarter. lower on commitments next the funding us year the

deposit our the that indicated month side, quarter December. call quarter. earlier expected in of to outflow was we the be on in balance flat the last On relatively and were quarter the in the we earnings fourth concentrated fourth they in The

in were depositors their seasonal element there the nature, appears of to it largely of liquidity an some While outflows work. putting excess is

balances Going expect flat XXXX for year-over-year, forward, deposit our normal first base seasonal do while quarter. declines we suggests case in the

shift anticipate lower non-interest and bearing and mix also market money out cost specials. CD our index of We balances a into

to but compared You cycle full betas over cycles. relatively see when should benign remain expect accordingly, to prior deposit increase the

continue to term offer time to in ability third quarter, In long-term utilize to rates profitable deposits we retain a higher relationships. selectively our add term to of of as -- and

basis some another asset quarter. this upward earning While point, interest deposit expanded expansion those our points our the on placed increases costs, and pressure this net has to outpaced and adjusted yields by has two this margin

this due do sustain net growth income we see to forward interest the be anticipate While going in to good mix, will sheet XXXX. year-over-year harder expansion balance margin trend

this total conditions, challenging of more just and economic loan basis the XX% Despite net decline were asset points. assets by balances performing quality favorable two modestly again were higher. our amount trends quarter with Criticized charge-offs

was nothing inflows there the we However, experienced unusual about here.

mark recognized question the into the heading board our and credit biggest well. know, As acquisition, was you that

non-performing in our of of material. loans by reductions targets adjustment, criticized a board. set quarter, referenced see $X.X During compensation assets targeted incentive resulted -- our This million you we in and the fourth exceeded

portfolio -- Over overall, have perform and acquisition. with the we we since Great improvements over well are -- portfolio continues closing pleased Western extremely to made in the the significant the the

that, the to And some ahead, Marcy's details call results. Marcy. over I'll additional for fourth turn with the around Go quarter

and morning, everyone. good Kevin, Thanks

million fair Just in summarizing financial to related of held additional for had make by asset clarity, settled to merger quarter. been has which $X.X impacted sale. million of that in We incentive to quality compensation litigation improvement, and Kevin sure value the additional related I'll loans accrual, mentioned, start notable $XXX,XXX now our we're reduction million the a providing the $X.X $X.X results expense, items which fourth a

quarter our on In aggregate, had a these per financial share results. $X.XX items impact fourth

Additionally, accretion from of early payoffs. million declined levels planning quarter by the prior or $X.XX the lower purchase to per due $X.X share

which into our financial results, be otherwise comparison XXXX. rest the third I'll will Now, of in move the unless with of noted, quarter

interest Our $X.X fully to account tax due from income net entirely which a just purchase impact decreased was by accretion lower million, noted. I equivalent as

interest Excluding income purchase accounting impacts, increased by $X.X net million.

we by Again, our points XX in adjusted margin favorable point quarter funds. net margin saw two to offset This a earning interest prior the by in increased from cash. basis increase X.XX%. our and the shift to decreased prior mix driven and yields increase XX net from an cost purchase accretion, asset points on basis investments of X.XX% excluding the basis our quarter, loans, accounting reported interest Our

ended quarter, As with term which of use you borrowings have noted we the short deposit already likely outflows, in $X.X growth over and a loan strong billion. increased our little

the portfolio mean assets As wholesale some mix margin first in funds noted but in loan the there, interest of function XX interest net debt, our growth should of balances the securities we a will adjusted cash quarter mostly both to the the higher fund percentage quarter. off Page of on the margin and from flows start liabilities. here, the investor compression will From will be net earning see of

we received During $XXX investment are notional with added sheet, starting both and to in changes our swaps balance rates. in essentially loans now short composition the in against Together the securities. quarter, the changes term fixed of neutral we forward million

purchase of securities interest assets In our of the our of out liabilities XXXX, from net come growth lower net day of of expect be QX to we compared and income net a growth into a combination loans loan margin remixing income into and as impacts, borrowings down out deposits. interest some and result XXXX primarily count compression. accounting to Ex will QX XXXX,

low For expect year full double digits growth be interest we accretion. purchase the in excluding again, accounting income the to net XXXX,

which As see around expect on we be This from the likely immaterial you interest early scheduled XXXX. expect Investor QX purchase $XX.X accounting in given Presentation, we XXXX, $XX will from to of million Overall levels XXXX, XXXX does earning unchanged remain accretion billion. payoffs, XX to Slide current accretion environment. be rate not include about at the for assets in relatively average can

Our total increased quarter-over-quarter to realized $XX.X due $XX.X securities to third loss investment non-interest quarter. the on the primarily income in million, million

included in by to Excluding investment transaction a declining fair sale, $XXX,XXX from to resulting securities in zero from quarter. expectations swap the fell services the short near $X.X held of revenue net million revenue loans lower income our for a prior volumes. losses, value non-interest decline This reduction and payment of declines

our quarter, our accounts. service charges We which on the reduced credits also increased in deposit earnings

lower overdraft swap single fee securities the changes XXXX, and losses. revenue compared other to as expectations, low year expect fee XXXX excluding reported For XXXX, digit when we revenue NSF made we the full percentage non-interest of through by decline a income to income partway the and result

of likely Western within revenue are results half we the the begin Second be as stronger realize half the than footprint. year first to to Great synergies

where little basis, the than while to we in total to $XXX run it expense, we landed quarter million non-interest of $XXX a anticipated, million. this on a messier expected range was rate Moving

reported million OREO related accrual, As adjustments, a million in $X.X as incentive included $X.X expense a related million expense, the million writedown property. $X.X an well results of noted as performance to earlier, $X.X acquisition a litigation

be Net the of fourth quarter, XX% which items, intangible ratio was $XXX.X million definition to $X.X also million the these of expense. efficiency non-interest rate would closer exclude our and run amortization would by in expense

excluding that around we For accounts basis range to expenses expense point the expect $XXX.X FDIC two of from operating The XXXX surcharge million, million. increase X% full in of $X year expenses. merger X% full base X% or to growth the for XXXX, about the year

million the sheet, prior balance commercial. $XXX and our held exception in all the end for major portfolios increased of quarter the with investment loans growth the to from Moving of construction with

portfolio. construction being As loans in estate earlier, attributable decline Kevin projects to mentioned moving real into was and the commercial our primarily completed

On to their of some the excess with much coming in total deposits our noted deposits decline side, bearing as clients seasonal liquidity the non-interest $XXX earlier. utilizing the and of liability decreased due million outflows Kevin

see we The as partially by of in customers deposits held offset now more our balances that was of deposits business being This were in encouraged net rates we and flat. offered. higher taking increases outflow advantage term consumer the deposits

we declining Moving continue positive quality, to Criticized loans to see quarter. increased XX%. from non-performing with last assets only trends modestly asset

continues points of experience $X.X be charge to offs of average loss quarter. loans low million basis Our with just two the very or net in

and at resulting to in a conservative Strong by X.X forecast qualitative our which coverage loan loans, X.XX% in increase up to additions to the non-performing $X.X now a million modest allowance of increase stands economic ACL more quarter, related funded our from and growth times. an our push prior

was expense commitments. million to the quarter $XX.X total unfunded included provision related for million, which $X.X Our

to I'll it that, Kevin. back turn with And

Marcy. Thanks,

is outlook more by and XXXX of I'll with and tightening. be the Now up our macroeconomic more rates, is for priorities a around environment wrap the on year up uncertainty a which quantitative future XXXX. with path the comments interest challenging shaping complicated few to

franchise liquidity with never through While wide we and range well positioned are of our great of scenarios of balance in and shape effectively our reserves. believe and economic levels we manage sheet play stronger to circumstances, capital, has continue to We been is mindful these offense. are a strong

strong ratio With seventies the quality, credit a loan deposit strong. our low in and are fundamentals

know year, of focus all is to core franchise. deposit remain base a as this the you which Our strength core our will

processes, and manual will right continue maintaining also talent. product sizing on to automating our while focus our enhancing departments sets scalability, We

be grown has we decade, will company XXXX the over different. the underwriting our no risk conservative approach As to have not deviated past loan from and management.

to I when to and to, alluded piece likely quarters. compared of few Marcy interest past income is the As have moderate growth the net

we control. As what such, on can are we focused

in our XXXX see We will we in what mid-single should quarters. from remain the have in of delivered this loan growth prudent are yield which We in markets today. growth moderating booking, recent believe pace we we activity selective digit highly is while level for double-digit

on focus we an year greater effort we and later will To lending. plan to intend business our small redouble forward, Going launch business we C&I. to support have in our this this effort, ABL

new are deposit trends. existing deepen household actively favorable generate pursuing We relationships and growth to

synergistic acquisition We year. Interstate Great opportunities viciously is are First physically for which Western the the differentiator managed pursuing affords a this us,

We expect in these indirect. up services, and payment home to lending, show treasury management

to will We continue credit book. our we be out have, actively and front managing

As the solid efficiency and not finally, we such, our XXs. credit managing positive do low expect at to year of this in we'll significant deliver remain on a leverage we as see expenses point, And toward the rise. a high deterioration operating sustainable drive ratio in vigilant

that Ashley I'd I welcome our Russ and us remiss Lee, Russ not time. been wrapping in be In the Hayslip, since like our of Banking would Chief acquisition has who the us IMB year. thank new to up, end also Officer. at to instrumental forward retired moving joined after

the that move she have am With are this place the background. but help continue they'd team confident an ability in in client They are Ashley executive excited continue I grow has to banking challenging confident us I'm diverse our joined company the age, we to very have about. and addition, a gender, forward. in will to team environment, base. I that

to to like as having the more behalf earlier would valuable decade. of I I acknowledge Leckie, month company. served also board, want our thank than a his of years a for to a service this our Director to after Directors for from moment Ross entire retired who On take Ross of many Board

XXXX a challenging are perspective, of be strength our expect when these franchise from we to valuable. is year while the summary, most macro in a So times

strategic believe will well of that to franchise. value positioned We are during continuing initiatives downturn, to an protect the on make while long-term shareholder continue economic we progress our enhance to value

organization, year given the positive to company we we XXXX throughout strong will our for execution seeing the the shareholders. ultimately, be and prove And believe are another

up So with operator, that I for questions. the will call open

comes today And of our Fargo. instructions] Wells first [Operator Jared, ahead. Shaw please go question from Jared

Your line is open.

like lower. Just quarter on thinking seems I questions. being How expectation shift in couple for Maybe there's first sort guess on comments your smaller been definitely of outlook and be funding should last about the a on or beta a it the funding from here do to think funding, in we we see more we and higher back temporary are you expect Or recover DDA, do or the should to think reversal? for that they when continue sit borrowings we that that get DDA you FHLB on outflow balances a FHLB do until borrowings while? we

Jared, the I while, we think FHLB XXXX, but go during see time. we Well, as for will expect over shift, see. and what reduce hopefully That's here a to out slowly be a they

So yes.

from the data on that But what you see about deposits here before out? peeking remaining

right cycle all Jared along We're we're So we've point, at said last XX%. this our below that beta still that -- was now.

this nothing range. We It a in expect material deposit that but still increase at costs, kind it stay may we point. as little up to of bump

yields, Okay. I your were that committed. were the on loan little loans the see hear trend a any for we maybe the from be looking to previously and loan funding should and we thinking ability then yields of here for. on spreads? weaker the starting than yields Where comments were asset

below So kind by loan five. at be lower construction will We'll new core the hampered yield. that of loan those loans high rates, coming which are still on yields are our funding in be

just we're as expense some Okay. growing the of, shifting guess we I non-recurring that expenses, I All to of look be at this maybe you calling right. that should base out guess the stuff quarter. off when includes

'XX? that when thinking looking happened And for are targets one, it two, at then incentive that look triggers quarter incentive incentive way be this that the to right potential should what that through it? for next So you we be at is year comp the says about, payments

Well, Western this that the focus the to was not much back change, proxy that comp to the the we've in on incentive question but a going into mind. incentive item quality that asset acquisition, comp because had board management on going It's Great everybody's is unique probably really our going just and normal so biggest plan years. for would the was pretty

one So what no been. to other with changes that just aspect. comp we've, additional There's regards real have our normal was incentive practices with

the as you all fourth run base kind if quarter $XXX million. of to as And, or we year Jared around far be talked the X.XX%, -- about rate $XXX million

place. insurance If X% you the plus get rate rent same FDIC take to inflation adjustment, X% the that quarterly between times somewhere and you

So to with again, trying and by we expense inflation X% and that X.XX% FDIC simplify between just using the that were includes insurance. X% the base,

place the either get you same way. So

thoughts finally management just me, Okay. then Thanks. And have for capital here. you maybe on

stock do and capital ratios the year You you in for here feel potential buybacks? How back earlier prices. at brought higher about

Well, Jared, you've us as around long you time. been for a know,

that of one in capital. effectively our And number look we to a levels always use. might at have That's our We and analyzing do We we arrows quiver we of what how forward. capital are going use them. our

can I pretty on that. say much all that's So

next goes KBW. And the ahead. -- Chris, next question question McGratty go Chris the of please to

Your open. is line

Q - McGratty Chris

Thanks similarly was or for in question. announced, on that growth merger margin, the I the the guess you gave very gave or $X.XX so, earnings minus. us when great. Marcy, math the Kevin Oh, plus or you to the maps the

like harder so I for am much guess there's much But margin's earnings we've everyone, been changed and it the power the higher in had change. is what I rates but Obviously a missing so feels notable that getting

XXXX? outflows in Deposit

od, recall, we then, we reduce had, as And and you NSF our fees.

McGratty Chris - Q

expense FDIC we additional anticipate. an up is insurance then didn't And the that

So…

in NII ground? are deposit, feels Okay. deposits deposits the FDIC. mainly like I absolutely Yeah, and the got more it's the like feels NNSF the, it It that

Chris McGratty Q -

are following on terms doing for sheet's next the Obviously step of maybe balance in the great what another Jared's question, get thoughts I deal? shape. Kevin, on Yep. in it.

You the but ton deals really are on capital. got a when one good them, no Deals thoughts of doing wants are do struck deal? a -- get what to

I -- get you. when go. People going credit, where you the I do with now, Maybe deals. you Chris, go. that's about look be cause when worried I next Right people to that where question The are might thing as I'll at worried the AOCI well, honest is, Tom. banks, are think about

prepared on scalable. driving if the and we're to institution on focused more But this leverage about. to focused operations comes in right get everything mainly now be rush positive what all operating is one We're, So, anything. and not We're we're making going institution. preparing the within

something believe, we comes that's, if a, But have of something a comes franchise at that that up priority and this look list increase that of we kind of we'll believe we the you it. company. And we're as know, list, to if value sticking will always banks along,

But, there of banks as know, the there sale, for not a we're there's out all for that interested lot you out ones are sale. probably in but

to And go just, franchise at we're bank So our comes that we're the then to if believe this stick the make performance. it. and is, going knitting increase currently something nothing the is, value, right level will sure and, we'll up ultimate is horizon. of on to we performing that's, is But

question Piper to And Sandler. goes of next the Butler Adam

for is This on Matthew Adam Clark.

your down do maybe expect the back a go or deposit came first that. Jared's similar you to quarter decrease slower? comments they the question to Just Curious Overall, about on in on this linked balances. quarter

of I mean, all as pandemic the seasonal trends go through whack. you back, of know, if out seasonally, you Well, sorts

earlier of go in then quarter up in start in a third. faster of seasonal before deposits the little second And we the start back week kind direction. picking So the if and seasonally, seeing That's first we decline quarter. the pandemic a you the bit see

what expecting out as So deposits down. this the seen that's XXXX, go kind excess we're of because think have in slowing I year that's we what

go we rates. deposits, sense market And back CD index to deposit a lot increased then and data the a our where account pricing back in a with our of our while money

some been products these and migrated have of of over to So a are lot already satisfied. customers our

the of So into start things expecting I but little we moving once right the year. in start direction further we're quarter, decline the seasonal feel bit going in a just will first maybe like

to here came in commentary some you but And I know then additional on credit. that uptick credits of concern, kind several the moving where you if over from? could that sectors? mentioned isn't provide geography Was a wondering I it or criticized was

kind that to of Chief going question, have address We're Michael? Officer, Okay. our Credit Michael Lugli

Yes.

no the portfolio. So decline overall, portfolio, overall there the was in

it drove driven X In well. performance $XX really by criticized over totaled fairly fact, that down was credits that did relatively our little that corresponding increased a by which It a large million, million. $XX

the those portfolio, positive credits look But trend the in if So out. you net you can't overall was at criticized. actually three

And Terrell of the next question goes to Andrew Stephens.

is Hey, Zack Andrew. This Kevin, Marcy. on and for

available? here. questions Do monthly housekeeping NIM some you the December have Just

Monthly Yes. ex-purchase NIM low-X.XXs the was in accounting.

interest-bearing on at happen And you the then have do to also spot the XX/XX? deposits

Yes, it was in the high-XXs.

goes RBC question next of Todd the Milliken Management. to Wealth And

appreciate why stock very Today's a Prior calls to in that this were seems sizable you clearly Can miss address results should I based they earnings today. operations. the maybe have price kind results to on same have that investors optimistic notable you about the reflected confidence operational guys viewpoint. of the as previously? on it. change a there's in you listened I've been in should have that quarter's It me

might you what earnings up. -- than were go end might what the back people projections strong. I and pretty they would if earlier operating under not It to that performance is thought in -- they we're to going as that's at XXXX going be overestimated the we Well, perform say look believe

not quarter company the at and performance of that by that is changed the month. fourth The we stronger and that's some The we anticipate, but fundamentals of of only didn't quite the stronger frankly, get month would had changed this company outflows that say deposit much. all, I hasn't really operation have thing the different in

operational back I'm by this clearly Well, And little miss I a is amount. guess bit taken but significant I get an why surprising? a by that, that's

by much us. operational It's by not an mix

that's perspective. just your So

Research. And Zessar to the Bruce Advisory next of goes question

as cost you. at But funds, the XX. at were were widened mean in theirs. to you same of guys time funds in cost They compared I XX know of points reports third your I the basis that Glacier quarter. at looking

So there was a XX bps gap.

in quarter, You're XX. the XX they're fourth

bps And XX yours that could how a theirs? wondering side, out chance look gapped than to performed I'm the differences you've maybe gap. had they why what it's now just are and more if a you So at and on explain

their have this seen performance Well, you deposit quarter?

I haven't.

So in gap is the our CDs. the to third money barely quarter thing performance, our look retain take up our over and and and and started people by taking customers market at the of has The quarter. this, care Their the putting matter care accounts fact And because that out of margin our the deposits of into expanded. paying we customers. and we're expanded if you is, trying margin back third second

quarter, went it down. This

I our margin six a by that margin retain me. in have a and basis think afford lot still over we a only core more increases, whole to business. little paying different the for ballgame. net the expansion can the on We're and and depositors making and the points It's up rate trying money

So a model. different it's just

then right. But why isn't the a closer All earnings. bottom dropping to were line? They on lot it

That's are these expectations. analysts' To whose earnings. --

that, clearly a question. of guidance difference and you expectations And provide off my basis, there aware that's driving a I'm what's going versus people but the of what happened. quarterly on in that was are

let it been run have instead some and that's let money, portfolio to borrowings? didn't lot fall sell made better part just Why you You wouldn't off, of the to expensive just the the loan-to-deposit why taking it said asking case, that if bottom of on the of a up go ratio securities, line? I'm

get if talk that. Well, That's not else -- somebody balance you going effective run how not about you sheet an to I'm because approach. a let

the take will next we question So please.

to Davidson. Jeff D.A. next our of question go Yes, Rulis

for Andrew on Jeff This today. is

Just of quick a couple loan growth. on questions

mentioned the was you're seeing or guys to -- loans. most you most by growth opportunities by earlier, new opportunities seeing you state the guys markets, in wondering just noted grow -- where and region? You production guys what I new higher and are

footprint. across There any that really pretty frankly, market thing, The wasn't whole even another. one interesting is quite outperformed our

pretty it's our So footprint. across level whole

winning And are then Are those new following markets in good Or new general? up in one that. another on guys kind just of you they markets? relationships

assets. growing Well, I because we're think winning the we're relationships

So account we net customer have increases.

So and even we are pretty it's, footprint. winning our much again, across customers

KBW. question [Operator we from have follow-up McGratty Instructions] And a of Chris

of The comment with side the about today, the Fed sheet deck in perhaps the like neutral the balance it that's on being feel rates cuts. to would conservative

the Fed kind the beta funding the seemingly you guide? beta can of ease. me, the And you I full remind guess, cuts, one, pressure in with the the So assumption would Marcy, on agree just two, that's number -- 'XX that? then

haven't 'XX the assumption your be assumption in guide, provided but the full We first beta Chris, would accurate.

less portfolio a Yes, Chris, on higher at as is rate down trying be sensitive sheet said what swap and we're earlier, mentioned that to rate in loans prepare And asset rotating the a in calls the to many past, we I the balance to were environment. our think or do rate variable is that we to we struck that derivatives hedge interest Marcy some for good way downturn.

off dramatically. see, can you the dropped As yield curve has

we're So down. sheet protect trying way on balance to the the

have Terrell Stephen. another from And Andrew of we follow-up

the loan Thinking with about I growth question. incremental margin mid-single-digit can quick help you color some guess, today. just a growth me a on out the you what's guidance. Just is loan dollar on for of

Just be already the relative you're bit or a just funding big the spread margin to like fourth XXX look higher. is in quarter? that would that the incremental the so the seeing little cost what But understanding could growth

mixed a of bag. kind it's Andrew,

yield the going that's high-fours. dampen core on the construction overall loan is going in to our high-fives. of which What's today, So is book funding is yield the again, growth, kind new loan closer to

of inflow. kind it's impacts that of be kind So of of that funding mix

construction Do kind that to you of that that just have quantify book in the territory. dollar is amount impact. of I'm that trying funding

not don't. We That's something.

Number disclosing.

what's last the rate, for the more driving step-up then just rate? one tax just the in tax And me, housekeeping

do to some has accounting with around It LIHTC.

it's up little bit. a So coming

question next goes of Janney our LLC. And to Coffey Tim Montgomery Scott

I it, portfolio? securities out flow Marcy, I from missed is the but cash if what apologize but coming

$XX million a $XX million to month.

absolute for we this as out assets? in your terms total Kevin, across expectation growth sheet year, in And look is the of balance what

Well, depends growth. really deposit it on all

estimated Marcy what we portfolio what the year. and be should is what will that I earning go And the loans down to up. modeling So is think kind for will investment of we're that alluded assets and flat run

will remain balance but get assets assets yields of earning earning on So in better on our flat, we'll sheet total. the kind

question And Butler you, next Sandler. Adam of Piper to our

deposit interest-bearing you for guidance Just guys any where have that going XXXX into is the data. Do headed?

John. It's

assumptions. specifically be. point, guidance we haven't prior prepared Marcy assumptions as think beta disclosed deposit NII versus her interest-bearing cycle, in this the the the said I gave, that assumptions in those we But changing cost at those be you would remarks, what wouldn't

have further Riley now questions. back We to Kevin any I'll for closing remarks. no hand

to calls want thank tuning you our us welcome for And goodbye. have as to if any we I Thank questions. investors and and questions. out everybody follow-up always, you analysts. from reach their in Please for today,

now today's Thank This you. concludes you much so call. for Thank joining.

may now your You lines. disconnect