QCR (QCRH) 31 Jul 222022 Q2 Earnings call transcript

Greetings, and welcome to the QCR Holdings, Inc. Earnings Conference Call for the Second Quarter of 2022. Yesterday, after market close, the company distributed its second quarter earnings press release. If there is anyone on the call who has not received a copy, you may access it on the company's website at www.qcrh.com. With us today from management are Larry Helling, CEO; and Todd Gipple, President, COO and CFO. brief up the from the a then results, analysts. provide open we'll call will summary financial of and Management to questions

some and the guidelines Before remind forward-looking statements will would I by of providing of the defined that Securities be under we management Commission. the falls like today as information Exchange begin, everyone to

results predictions part could statements, company's hopes, the of call this concerning forward-looking those from these As materially are expectations differ guidelines, of and projected. during and future any actual statements made the beliefs,

Additional filings, information on the company's these factors is included which company's in the on SEC are available website.

may the for which the are the financial information to and management on today, The intended substitute comparable to measures. directly available not measures. other well of GAAP quantitative but Additionally, reconciliation non-GAAP discussed as the most press GAAP be refer contains to as non-GAAP website measures, to release supplement, the

being replay one XXXX, will this Mr. also reminder, and time, ahead. to be the recorded be a the accessible after at turn hour this Helling Holdings. go for available call. QCR starting At now call of on the completion conference It As I this website. Larry this over will X, August afternoon is company's Please through will approximately

Overall, given brand a delivered the Thank solid this additional pleased We're carefully additional ROAA our expanding with the $X quarter work excited share an is core and banks. and with X.X%, and the region another for related driven with Guaranty to of the and loan our in brief two nonrecurring vibrant ladies for we activity. of with for our follow discussion join quarter of the Bank. quarter Southwest completed by the that We the you, the the Building expenses. loan you that first and our PPP for to million Todd, Guaranty closing start strong quarter core SFC primarily we Missouri we growth items grow the posting quarter, by and robust Bank on during and quarter, performance, acquisition during second impact delivered of into time managed to increased were generated integration the acquired the combining will generating the call $X.XX operator. second continue involved growth the of margin team growth, the lending adjusting in regarding of strong to Bank on of are Bank Welcome, taking earnings per financial exceptional after financial us We interest will the quarter. results the gentlemen, net thank portfolio and of the Guaranty in again activity today. performance. details delivered annualized I after momentum first excluding XX% quarter loan acquisition. results earnings second

organic Our our strength finance by driven loan business. was in specialty growth leasing lending, traditional quarter and in the commercial

that one service We a model, across are our the and to our This resilience relationships markets is share existing continue of with economic and gain market importance strong to relationship-based emphasizes community of on our new clients. and customized testament capitalizing the charters. banking

loan Our year. the positive. full reaffirming the loan between for remains Therefore, healthy, for outlook growth and XX% we targeted growth near-term and pipelines loan our remain are XX% organic our of

our of sheet, expansion loan was basis Bank. brings addition multiple quarter, of which support the the rate again acquisition fees. Bank growth XX ability Guaranty deposit points on addition the PPP accretion also primarily Guaranty We Bank's our client which up will balance base our deposits Guaranty excess due strong the was impact loan of significantly deposits. to continue quarter, second up to growth. margin and the grew core our asset-sensitive liquidity to to as impact balance interest a and excluding well sheet, and as fund net hikes This core basis Our of expected XX in during the our driven matching our points, by expanded

the expansion rising We very more see remarks. to detail for and rate third environment, into well-positioned the Todd continued meaningful in in go expect current are will his quarter. NIM

Our the quarter, and view to very remained reflected with cautious Bank asset our had total We of assets loans net slightly an level the as We charge-offs strong. potential two in quality Guaranty and acquisition quarter, result leases. our lending X.XX% comfortable the reserve maintain experience challenges relationships. and legacy nonperforming reserves during our and on feel the prudently credit increased a the during economic reserve despite did we coverage. We increase in minimal primarily of

We have focuses underwriting credit that high-quality and disciplined credit on loans, administration. a culture diligent strong

the Given well occur. of challenges level are we uncertainty, potential heightened for any current economic may that prepared economic

earnings, us Todd to a solid reserves, attractive provide prudent and turn to information growth on deliver strong capital now quality to our over With call will which enable shareholders. have returns first to We our continue that, credit will results. and of further level for the position, I disciplined excellent a quarter

for Thank today. my income. I'll Thanks interest morning, with comments Good joining you, start us net Larry. everyone.

with acquisition combination from the mix from loan funded accretion during driven near of a the $XX.X Our a in million outperformance $XX core lease range guidance the favorable expansion. Bank Bank NIM million, obtained we provided income deposits reported we liquidity end Guaranty of and solid quarter the This interest benefit deposits. million, our to strong overnight and to advances. Guaranty the with growth our and continue excess $X.X growth combined by of was net strong was was and for We organic million, quarter upper acquisition million. $XX of $XX.X of robust excluding it loan

represented allowing important deposits overnight demand significantly quarter our managing priced us both of an our over and environment As during are of funding borrowings expand as utilization end cost interest-bearing, in margin. the temporarily of in XX% the better the funds did second rapidly of option. this rising to increase quarter, rate total of a noninterest and factor and our deposits, We

latter during of the plan on we our However, year. funding half reduce to wholesale this reliance modest

reported NIM the NIM and acquisition We related outperforming in more a were our for Our acquisition the strategies of to by we After basis successful income, points, and point quarter. for by to very our successful the our impact anticipated XX as guidance pleased deposit our balance accretion than Guaranty NIM XX XX the excluding significantly expected. performance than X betas, be quarter basis expanded with were sheet of basis points PPP improvement. more Bank proved to managing improved

further sheet to rise, significant our will lead NIM balance expansion. As interest rates to continue asset-sensitive

we've past higher-cost intentionally loan in our deposits us rising the have positioned three wholesale we with our floating years, well combined for For reduced has rate reliance core the index has deposits funds. success grown portfolio, This, and tied on an growing had rates. to which

of adjusted XX we full a June NIM and quarter. quarter X in the as expansion from of hike ahead, Looking factoring basis rate points benefit in to project expected third the today's rate we further hike,

to booked for quarter, was income Now noninterest to from million additional the in as more first the our which Capital guidance well turning The $XX fees, quarter. revenue quarter, our $XX.X within revenue from $X.X primarily the the Guaranty markets totaled the was was and than the range quarter. which increase prior Bank. amount double million swap as capital due markets higher up noninterest from million income, for

quarter to our continues source chain delays transactions, impacted in remainder Given caused expect be fee we of to to by a XXXX. by be while the of supply solid inflationary and of of pipeline the million recognizing pressures, timing income for ongoing $XX per range project million to disruptions $XX continue

Excluding call. guidance provided items, noninterest which swap last fees quarter's for non-core totaled the million, second and $X.X within was on income our range quarter

than our for for which Noninterest nonrecurring expenses items, originally of million. guidance and $XX which to totaled $XX.X was the $XX.X range million, our to and post expenses. significantly acquisition-related turning expense modeled. After adjusting Now million million within noninterest quarter of $X.X $XX included these were acquisition expenses second million, less

well noninterest run remains expense Our rate controlled.

like areas. experiencing the number industry, However of we, of in rest pressures cost are the a

our of in third we core expense of result, in $XX anticipate that the the be a As million noninterest range level $XX to million will quarter.

do that recognized until cost Guaranty we acquisition the not the will full XXXX. anticipate be addition, Bank from savings In

to turning asset Now quality.

As NPAs Bank at and Bank assets of was addition nonperforming Bank initial the closing combination The XX%, in resolutions to prior million as several were relationships. announcement Guaranty NPAs increase Guaranty on mentioned, of $X Guaranty a credit closing the or acquisition our and reached positive at Larry date, two transaction. the than legacy lower

portfolio points Our in represent $XX.X the loan and a the credit acquisition. credit to solely NPAs to million only CECL of provision exposure $XX.X second the due quarter total of allowances We acquired provision sheet establish quite X Bank off for loss are result XX losses for initial non-PCD the an the manageable recorded as million balance of Guaranty basis Day assets. and

credit this for by remains nonperforming solid. The was allowance X.XX% nearly leases in total of assets. strong respect loans Our losses and levels quarter to at remain capital With our our times several represents decline four and capital capital, our quite ratios factors. driven

than points acquisition. when Specifically, points, was in the XXX XX the decline came modeling transaction basis better which in our basis we the our to TCE ratio Guaranty due initial Bank of announced

decrease impact basis Additionally, AOCI our value the in basis points, securities. due during XX of XX available-for-sale our an to points in of and primarily quarter had impact a activity the decline share repurchase an the our had of

Finally, our remaining loan strong decline. basis point growth the to XX contributed

offset arrive at at quarter ratio net of factors end. Our income partially reported X.XX% to TCE these a

these in the AOCI repurchases approximate to XXXX we by arrive same $X.XX better per And $X.XX came repurchased remaining These share. share per The quarter, estimate shares total repurchases value plan. May at and had We X.X The quarter. decline during end quarter. our tangible authorized under Guaranty quarter. value Our acquisition, $XX.XX shares share purchased repurchase $XX.XX repurchase our an the shares the be original on repurchases began Under at shares XXXX XXX,XXX our have an program authorized during per completed of quarter X.X in XXXX second due were authorized offset a was dilution million the than we to With and the was per during share partially in of price Bank average $X.XX and value XXXX impacted at share at of in second the reported we as and reduction average net repurchased of million to tangible it per was TBV XXX,XXX shares share income modeled that program. we the from our our to of per down respect book $X.XX approximately share XXX,XXX pleased under share. the the of this at book of plan are by share our plan, the and initial share per in factors additional repurchased. of $XX.XX book program, tangible an the price remainder $X.XX

with on will approach continue share our future and conditions We market our to repurchases be based capital opportunistic levels. to

Finally, and post was acquisition quarter range effective X.X%, the impact for acquisition-related CECL expenses Day due our to tax X the provision. our expected rate the lower of the than and

expect to normalize for rate XX% we're the year. context for effective second in question. the ready second a With our XX% tax to Operator, of call range financial first questions. to open up on the our We results, back let's the that of quarter added your half

question and from Tamayo Daniel our question of Instructions] begin [Operator Raymond comes now session. first the And James. go will Please We ahead. answer

guys. morning, Good

Daniel. morning, Good

the just on swap fees first start outlook. me Let

item, right in range kind is $XX in then bottom to the $XX half? that back opportunity at million we is line and build forward. decent a mean, in to $XX million $XX $XX you million You I that know you take of? came volatile of that feel Should that but it's guys second from there's to a off million going saying of run quarter like reiterated the the are that the rate a million Or -- growth the the

next two Yes. talked perform to we $XX today. range business in Certainly, market million can in comfortable million about we feel quarters but that see we for given that the conditions the we the $XX past, this headwinds the in

and number a pick our more guidance those But we predictable you the are try trying between with the consistent. comfortable making that comfortable but certainly and and challenging, more we certainly in But economy let more that range. headwinds feel feel make we're to little the I'll -- So, two. it

then, the And on guess margin. I Okay.

one. that then guidance So X first betas deposit go are in you in the all, what of I'll in your ahead to expansion that basis points for look third let -- answer gave assumed and quarter? the you XX And

Thanks, Sure. Danny.

assumes guidance a XX off, X basis first basis XX So point to today. the point increase

necessarily So wanted guidance at not of that out XXX points. in I to That's that just XX%, assumption way. get basis the our

XX increase point rate well in QX costs We Our deposit non-maturity basis had very was interest-bearing of basis a controlled. beta market for XXX on point hikes.

overall So QX million. for the $XX beta was

beta little higher Our going QX is into than assumption a that.

might to our to And bit. able that we As success like hampered accomplish be going a to guess, to the start ability part in continue little you of were of a to is is what lag. beta lag, industry with most

So assumption closer our to for beta be probably XX XX would or QX.

And then on last one, -- Okay. deposit the expectations. guess, just I growth

gives some to fund the expecting you're expectations going forward, growth growth stable think to your at teams to I reduce manageable keep half you'll you back going that to able that level. costs funding I be mentioned on be you deposit You deposit perhaps expecting forward. loan other the of from be guess with deposit able what the you're to to down wholesale confidence year. in for reliance said management to balances heard do be that. of We've kind to that a able And

hear your how on to play? in that wanted your you're thoughts managing Just

Todd, there you then just maybe, fill Yes. a let and I'll bit. in start

a all there's for the And quarters. because of the a balance correspondent including certainly that our historically, is some in move that EBA clients. sheet business, come we've sheet our over meaningful little sheet off banks our have of we get banking than in quarters. that's in some of still to deposits account of down, our less correspondent sheet But about back couple couple our next we clients. things million across bank talked that balance off chunk on $XXX can the of liquidity And One move Fed start has the balance of of we'll next balance we that large parts

the pace of $XXX tag of million a maintain margin size overnight those one of doing more basis do so better XX on to that using took to point can about quarter. $XXX it. balance quickly. course, cost would tier funds. using while was us reasons a moved Larry's we're We the it being filled a wholesale the we the of more bring It tiers, bit more deliberate with some It's to program. helps that. doing gradually deposits in to sheet end. we're to gives be advantage be that, during our already the onto EBA more we gaps in so confidence able on There expensive. But more But starting the us and Being beta a have it's rates, last it. of reason little going on at we've challenge. is really those we're of in And in no dry what allows up advantage million in the Part us quarter doing already We've we so of there. really, half it Danny, the get roughly that better system, we're a doing little the since year little And to to is doing done overview beta. confidence main that. here the the liquidity doubt, from to is make And deliberate and

All that Got I all color. from right. me. it. Thanks. all That's appreciate

Thanks Danny.

Please from of The KBW. comes next Damon question go ahead. DelMonte

hope well Hey, you doing good are today. I guys. guys morning,

Damon. morning, Good

morning. Good

this segments Specialty now a just Finance growth that stand how Group? were quarter. outstandings loan and Finance the talk on of Specialty question bit Like was the first kind much about with little where the what So, the of Could right Group that? you driving

Yes.

sectors. pace company this so during really kind leasing our across past was of So our record at was -- the of quarter. And growing main all growth

for equipment able more go X% quickly. commercial the start probably quarter. be And to banking then, this traditional pace that legacy to clients So, ability our made of in getting in X% range to kind the grew business

So still not pace same solid but numbers, grew overall. the necessarily we

and grew growth. And hence, of of for that's the have ourselves We number will but full what reason at long-term pace. the certainly bit quarterly to those recession credit the into up, during little these little a really, we're our be for mostly has a evidence towards if one tax yet, We've to slow days, talk any loan got the bit. prudent. being than a of just first that months And fastest might don't we all lower six trying guided a the how I year. growth that's, our you we year. So lower group, the pace the think in space guidance add bit specialty the That's XX% been

it. Got

to And Or a today? the for pressures to marketplace realize deal? guide to then, are the Thank with outlook XX%. operational from of Todd, needed kind you. XX% just time Okay, expense function increased that inflationary the respect more in that there that's is Is GFED the savings helpful. and cost of that the

Yes, Sure. question, great Damon.

So really of bit a both.

expecting to platform on We single October. Missouri convert to during in Southwest here a are

would see in we're of as the to some really guess, first all going you savings means of that until not quarter XXXX. So, cost the

So comments. prepared we our that in mentioned

a realized. guide quarter, a XXXX lag would for for So, our those be bit that, in on the said, upper it which of next a reason things. And announcement, move really of we little the we couple expected. But fully are before an

the up we're are just asked of seeing. and people of at where types about whether those little range actual really was is the So and two it prudent a which other quarter we a one, pressure important, XX.X%. was reflecting thought just we slight We you nudge the end bit guidance certainly seeing that about it's prepared cost comments, talked course, expenses. or we're XX%, to that that, was and our end pressures bit other in then toward And being had, inflationary higher of upper that our we

in short of guide little pricing expected, that So, really the more and and slight in about cost the is saves pressures, is in XXXX. the move term, terms a inflation and more up Damon, delay that's

Got the credits What And color. rise industries that Thank side you. it. two the on lastly -- those? in? on The nonperformance legacy the QCRH like the were And the they what of in good were that then credit with That's were size to status. guess I NPA. moved the

is of One really basically, were unrelated totally different both And low collateral our kind seven-figure businesses. Those investment transactions strong. Yes. underlying was an each, property.

real loss we're anticipate we one any So, the about. don't in talking that first

to the homebuilder homebuilder, issues. economic for to continues just things Second didn't but management And funds There business related environment, one because we was strong. the were a some people be that think appropriate. were using

And on both on loss so, minimal expect progress really projects. either we're making those those one of of good and

God it.

Okay. very great. that Thank you That's all much. That's I had.

Thanks Damon.

Damon. Thanks

comes Brian Janney ahead. Montgomery. from next The question go Martin Please of

guys. good Hey, morning,

Good morning, Brian.

Hey, for a couple just me.

today? just Todd, think kind appreciate the stabilize your kind the we next maybe curve expectations But I quarter. some to of -- thoughts do thought you think would transpire understand just just quarter, just just you maybe, about these guidance you how margin to maybe kind and we the specific your the just you stabilization the I as guidance, of or the and on and the we betas the regarding guess is margin, just see if Just of wondering rate if starting rise. trying begin the thoughts talked some year to no last talked of hikes and when out begin the just but just know, about just expect do see but to of as kind about I of rate kind do into get suggesting, you next appears it increases, year back additional year, half of

deposit having that just pure be but permanent based and is question We're with Brian. up. how it is to no to or it's able do I of to yours happy anyone is that what going a and how team to betas that going we're is of clearer lag. all lag lot more much speculate. low my of much else's, I'll our now. of My best on I most and Sure, real is success think. and than The ball catch Larry I'm believe right crystal

very that to expansion catching to are market, we incumbent pretty those some up basis going point, creep deposit XX with and market start QX, for up And to to they're fund. on on So feel continued get significant going range. the comfortable betas be liquidity harder about banks in rates X [ph]. it's leaving to to points going At

us to there's our think So highest going of to know group We We're and interest the tipping up, advantage point feel it there's going line margin margin there, a my and when in still it pressure rates than rates be We very net time interest peer the to take have of lot get took a might long would we there. continue in bullish well-positioned started net highest up. that. was for to punch is the our don't Maybe starting I margin. I before were about runway to want be late. peer our be. group.

some I real just there's the to think But and be into in we going of additional we terms funding of terms to might Fed have will. what costs do next increases. in get challenges when year,

there's tell happen. a I still the QX. like So in just that very we that's could a of flattens out at good gave flattened factors, feel margin about to I we and I'll answer. and depending fair be But expansion amount whole we of know continued some you on host margin. directionally, plateaus a have real solid feel for XXXX guidance not point

we'll to what No, as -- margin more from it's question, see -- two there. you. quarters Todd. like it still pretty as happens just far helpful. are a Got sounds about and goes, next three I the know It's that's the then tough attractive thinking three

taking just it. And or here. at others for maybe stab two one thanks a So,

that feel over of a non income quarter. kind on around you of markets of being revenue kind side, into fee -- the just -- it's the run little non-capital of uncertainty kind other million as I the there bit the and $X and a kind some there's just go a that QX? Just to about that that areas. Does off nine pretty like GFED with about talked, a building we rate? this outlook Todd, the is mortgage -- level think good solid bringing But a over of know

I'm capital about income outside often noninterest don't asked of other Sure, you markets. We talk Brian. about of glad that. the sources

million that settled we like post where feels in post-merger, $X So acquisition.

think linked place to down was happened, us on impacted Certainly, that's terms I was a that, sharply. one, good think quarter. for in XX.X% expectations. might management wealth anyone's down the QX was I continue of AUM down don't that to was happen and and around somewhat that start It by based that, and market. surprised

and we have for don't flattened new rate has least. the continued wealth So, is really run see is maybe kind Mortgage The Larry QX drag at on this recently of out. feedback, kind gotten further management. I of

So, I question, probably in what to $X-ish long into QX short million QX. think we're your is answer for and looking

Got you.

Okay.

clients at that to add add continue space, wealth steady our a management pace. I'd we Brian, in

market issue long certainly to we Love We're you'll go the business. it -- back about pounded, love But long we In not business term, we the that's when the good So forward. term. a that have there. before take gets feel step too. the

that. working a obviously how That helpful. you that know see Got guys play some could in on part I teams, so adding also more you. And are we'll That's goes.

So -- maybe last just two.

of challenges -- just The the two the -- your and of ability or more to Larry, work Todd, markets just On is I kind I economy the where for you through for side, guess, the But in helpful. quarters think next guide the kind capital see heading. that just you. maybe

try the the as is challenges over you it? would more that be maybe it, run could about kind rate expectation make guess, think consistent there more to that I and way is into get of sustainable? back run clear work think economy, kind you of challenges reason as the it about really as out this as as you a holding But that's we through -- and go as back is these up? you of think, wrong Just not time Or tick And maybe in of forward? some level your this year, you these rate the predictable is there to some next obviously

Yes. I'll Todd. start,

foreseeable be at. For XX should where the next it about to that thinking quarters, few we XX feels certainly,

start this supply some issues As of also impacts curve space. to the The certainly, in yield the change, the chain there's potential. pricing

hard term, our to time. we Certainly, we're business, So think grow trying we really we But over can we focus little it's this get the into making longer so on a just on a mostly valuation bit to stock. -- consistent predict. appropriate this

you. Got

Brian, to $XX like We'd start business Larry's million. We to annually. I about basis, million guided $XX on a would to longer-term thinking tag just more more comments. this folks on bit

choppy. Larry necessarily it's might $XX to so, to better million to $XX for Love that think can as pretty Got to great And $XX be about has year $XX it that dramatically. of said. guiding handful it the very of us quarter-to-quarter with million million it just we're versus But number about deals last to all each think for It underpinnings, difficult is the million business. half really move of quarter. a the

talk based try and million to an it to really good more business right. starting annual and away get swing, annual or necessarily we're on revenue $X really, or source really, million feeling as So, a about really from $X bad

think that's Yes. know helpful. that's I right way. But I

quarterly to trending And we'll to down try that it we'll it It and sustainable. as likely the see be how run be it our be annually. it year higher But not would goes what happens. that [ph] sounds the number my trying was what get is expectation -- in is you see that's next you as your just on guys rate like this expectation pin point, issues to. I guys at feel We're should higher, think much would that question. and for the really

Brian. right, it seeing you're think I

Todd, -- obviously be of wouldn't in is off? the then last least accretion level higher the your this kind of and in of appropriate couple about on in just impacted kind income at anything And question that next near just unusual tails the quarter, Okay. here? a term, there quarter thinking Perfect. one, simple Or at the a sustainable by transaction. an is level that quarters it that being this But

of glad Sure. Brian, asked, bit scheduled. for No, in elevated a you here reasons. from couple first One, quarter, a I'm it the was

due number accretion next now, So least quarter. per this more our scheduled at bit a per is two, elevated some like is the Right to payoffs. quarter, $XXX,XXX quarter's

So the baseline. that's scheduled That's the accretion. really

base quarter. we to just it As can But move be know, up and paydowns, payoffs the and core number that all $XXX,XXX transparent, with a is accretion may. number

you down that get as you. to think as it? model steps it's into -- next Got how And that you about year,

but would Correct. you little October, XXXX. give picture And maybe bit clearer on that a year October, we'll January, probably I certainly in full not expect in

Got you.

Perfect. I you congrats results getting and far. good so the questions the and closed taken on appreciate deal Okay.

Thank you.

Brian. Thanks

The comes Race ahead. go question Sandler. Piper from next of Please Nathan

Good Hi, guys. morning.

Good morning, Nathan.

Question forward. going reserve content nonaccrual the legacy sound you on guys are loss the like to just any, quarter. It expecting that in around the moved outlook doesn't two if much, for those relationships

guidance So of the for charge-off kind the about providing you that of for half back are to XX% this in with how XX% outlook, guys just relatively thinking year? benign assuming kind of continued full growth year

of know, levels reserve X.XX% you the Yes, group. of -- we're for as of Nate, first peer top our are all, our

we like credits. what conservative at been, we've large those So reserving prudently as looked of say, couple to we

don't days, to quarters. rectify larger last end and growing reserve stay -- don't about so, that we to talked and now the going meaningful feel certainly of in use reserve in we just our X.XX% much level we transactions. and couple any possibly a And right, can the We into trend we of of X.XX% growth reserve the with look the think and loss in You're few few we're expect we last our will the year. growth the projections probably to as fund above really we're at even between loan that debt, of the those,

to next today. any, reserving given we leads that So, what quarters, if couple a of here the additional see minimal,

XQ. quarter, I shares guess, curious uptick stack just terms you the priorities acquisitions of were just then And But far it of well. you kind repurchased kind relative I'm already imagine in at for forward. buybacks of here still you've it. the integrating Got kind you are quarters Okay. is good in position so Obviously, of terms active a pretty buyback guys some in so about focus far. in going and guys capital sounds where seems like I of the on least several to the future in it guys of like successfully kind in see deployment your what Guaranty. next thinking as

valuation? of just buyback stay the how are it kind kind Where acquisitions opportunities of versus as you with So weighing for outlook curious well? the does guys

in fill maybe the Todd side. let and blanks here start I'll back the Certainly, in Yes.

where feel Our price quality, strategy bit the to how we credit factors, how here, economic here It's how trading, stock about and things. to on levels little continue a those about opportunistic. be because a reserve we see is depends of is we Cube Rubik's it all feel

this And so, about talk at the to juncture, on side. M&A that ready nothing certainly we're

of kind and we're it's changing So continue is going -- changing. is just watch quickly. We're which not outlook the use to it's sure capital here. our And landscape, probably of to direction pretty buybacks just economic best the next the

at could look so, in we impact that the how quarters. it next And few

go Got -- it. And helpful. That's then ahead.

Nate, I on. just tag might

the is us it, when and to of based run things level rate organically high driving we earnings we're XX of intentionally, in can right, on our and and time quarter. our basis Larry's about of how being that payout XX dividend to points TCE low the the One add we point, opportunistic earnings think each helped

thinking that factors we the table. masked from of just with is of the the dilution we're lost XX at here one share really in that get making the the GFED out is add on when TCE of that was did, quarter kind certainly earnings current to to past the this wash And repurchases. around That that we that fact closing dilution about decisions from wanted levels, So can bps organically. repurchases we're XX

forward. me it. not with the at that guys clip building lost are Got X.XX-plus outlook going capital pretty Yes, strong on you ROA a

billion Todd, today? outlook assets last so. quarter interest alluded then I earlier kind Is appreciate dynamics $X guess just or has exceeded the adjusted the sheet? kind think, you addition the the case the all just that the of change balance think, by, that balance context, terms And that rate color of I I'm to liabilities basis. I curious and of does of that -- on I of the great. Okay, margin within GFED, rate-sensitive an in sheet rate-sensitive still sensitivity

the Yes. Guaranty deposit with portfolio core G happy Southwest that retail with here And the Bank. Missouri deposit the very betas Bank Love created. had we're in market experiencing

beta some factors. it's some of of so, rate us and ourselves those helping And the from pressures insulate further

So, very, like bring time it a good to has deposit balance a our sheet, portfolio Bank Guaranty very to consolidated on was built.

It helping. certainly is. it's So

taking I the all color. Well, the guys, great. questions appreciate and Okay,

Thanks Nate.

Nate. Thanks

The Davidson. of Jeff next Rulis ahead. D.A. go question comes from Please

Thanks, good morning.

Jeff. morning, Good

morning, Good Jeff.

the the number the that different expected added, you legacy over? is nonaccruals GFED, the -- resolution on you group of bucket quick that piece the legacy? -- see maybe brought on those. follow-ups, that two was maybe the over, a there and resolution Are of on any that the Guaranty Maybe But Do the -- on -- some came angle even them. the on or any just a that

actually say, I'd Jeff, on think message is be. the a you an far. no been of And -- quick we are it we give a credits has we some the It's one thought would so acquired there's acquired. to surprises do with couple Yes. there important chance resolution most maybe that portfolio, fairly get what could larger

those quarters. for in of we There's on the big couple things resolution that we could also meaningful next the potential so, couple paydowns legacy quarters. or And next within the resolution a potential there's on either outlined. certainly, two couple get relationships a of And of a a to see

these to to So, eliminate and at later us. prudently on good or we being, we hopefully them on reserve feel how any think, look you we about focused to how for surprises I

Yes. trued what And could would think this, that if do you loans be? that if you marks, credit is X.XX%. a number -- the ACL at But have know, up have to coverage you you I don't Todd, I

guys. sorry, I'm

there? Todd, are you

mute. had had I I on muted. was I little noise here next door.

XXX when points basis we're So, those marks, adding back Jeff. at

good question. asking And appreciate you the in progress I said, So portfolio. Bank Guaranty Larry the as really

and there You were said, down modeling, date in NPAs million $X working close. opening Guaranty to And million. it have comments, that on at see remain. $XX announcement Bank missed our those but million terms we $X an were as may Larry pretty traction They good of in

XXX of points So marks. coverage basis when you the had in

know Got guidance, million loan booked low to know And wanted I second that it. is -- end I to And X% continues $XX weakness end were growth just million. you this low at what to you the $XX to of strong. growth? get What or guess areas if would -- a of you I be million, of I imply does the I that. transpire the I of conservative exceed most you and you little the bit. being But guys are to of on are hit to What scenario very bar $XX the touched low there? vulnerable? at what that, to slowdown? on times wanted then, kind And in mean, just guess, half. that will

immediately. Yes. I'd say, to Jeff, two come mind things

control instead if the clients, issues issue. of certainly, of because our all, chain First one the stuff of of that's gets outside of that's better, worse supply

is sheets any in in if sudden, our balance real income of of recessionary and any muted. showing which our trends, factors of yet. really we up clients' see very statements Secondly, a all or not quantitative It's

why surprised go recession. a more we recession, lower slips money things. if challenging, Because quickly, necessarily their to will growing kind that against be from into we will protect borrowing be probably get giving And because and economy we're guidance kind clients you loans ours in if those a the so, of not do that's choice, less of

possible. be that trying surprise you. very Will don't we that So, things on to could us. those impact we conservative so that are one, the outperform? We're It's certainly

it. going the or income anything seemed down fee just management the that's to light, quarter, then Larry. Got And wealth a last in linked I But noninterest one there pressures go just $XXX,XXX. on but front. understand other the to that specifically, discussion. little maybe Was normal the the that, non-swap Thanks again, the income, was $XXX,XXX on more fluctuation?

a was non-repeated There linked on single a Yes. quarter item basis.

any had that, if here is. I on and oh, I see it to have it So looking I it detail know -- -- granular don't was Jeff. here Yes. that

were So, and derivative and a bit off second roughly quarter our quarter. dropped of the that XXXX, losses up fourth in quarter and both in first gains

single And we and that through dropped it So, other moves item gain category, flow in losses. that ineffectiveness, through some of just line and derivative the that was QX.

QX, QX? from QX from Similar and Okay. you mean,

$X.X, other and $X.X total roughly QX, gains. was down in the was derivative So drop from

the $X on thinking go rate be that. So more may forward $X, to the like more run make like sense is

I kind you Okay. the I Are as those you got was there deposit on normal -- front? of of were sort waive if soon the that. And know on you did mean, on? then, service -- deposit you charge or any closed maybe don't in fees guarantee quarter I come others that back close, any you they idea here? that as

to that a though good clients, system, regard interesting anything on one running but all different get little you as quarters at had really Jeff, handle locations, clients a here actually I'm question. in of we system. you client our retaining or asked even to have didn't success fees. very at change capability been in the two Yes. with expensive, we're we've might combined Southwest retaining We closing. and Missouri. But on each have it. really maintaining transactions deposits once glad It's successful Be have guess, in it looking

the color. Thanks Great. for

Yes. Thank you.

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

look soon. to just you hope joining our We I'd call healthy you Have speaking today. and day. with remains safe. all everyone for We again on like thank forward of to great a all

The you now presentation, disconnect. now today's attending conference concluded. has and you for Thank may