KeyCorp (KEY) 21 Jul 222022 Q2 Earnings call transcript

Good morning and welcome to KeyCorp’s Second Quarter 2022 Earnings Conference Call.

As a reminder, this conference is being recorded. I would now like to turn the conference over to the Chairman and CEO, Chris Gorman. Please go ahead.

Thank you for joining us for KeyCorp’s second quarter 2022 earnings conference call.

call Khayat, Don and our our Risk the Financial our Mark on Chief Clark Officer; Chief Officer. me today Kimble, are Chief Midkiff, Joining Strategy Officer; disclosure find statement will you X, financial measures. Slide on On forward-looking and non-GAAP our and our as the as covers of It comments call. segment our well materials presentation question-and-answer Slide I to X. am now moving This reported $XXX of earnings morning, share. million we or $X.XX per ago positive period. the the prior delivered quarter to operating compared year leverage We and

we from and model Our to results net of which resiliency a relatively our Revenue driven from changing successfully X% continue reflect quarter, interest stable as rapidly both our loan navigate income, was and benefited higher a by and revenue teammates strong business in was the the environment. growth. in with growth revenue interest rates expenses. increase Pre-provision up first XX% net

Importantly, over continue and rates from the our higher investments next continue we interest hedges to as reprice. to short-term years will benefit several

XX% deposit also sheet In benefits balance operating Approximately, of escrow business, and stable our Our deposits our strong commercial balances. from approximately from stable are accounts. are core retail XX% in base. of deposits our our

As I Average the were the by year-over-year. of sale strong. business, quarter loans to mentioned, auto continues average from planned from Adjusting X% grew year XX% PPP loan and X% period. for and the be last ago up the loans of growth runoff our indirect

businesses. growth our Our commercial and both was driven by our consumer

and support consumer in over from add existing the clients generated originations Road. $X.X consumer and continue We loan we Laurel mortgages In in to our relationships. our billion business, quarter

Laurel on moment a just spend me Let Road.

the May, student despite in the a this offering we loan segment for healthcare the see payment good continuation then business, continue industry. In the momentum that of to largest new nurses, launched holiday. is federal of We

June, second with to digital has for and encouraged quarter, unique loan our products debt opportunity the represent acquisition month verticals. In refinance sizable a programs. GradFin, public forgiveness. held Nurses nurses. a and This student strong personalized expansion to our commitment needs. These In very continue a to announced for and expanded targeted that relief are meet growth to over consultations forgiveness the aligns in differentiated, we the in commercial effective Laurel services, our Laurel for platform our enhance accelerate of first GradFin, individual loan demographic to through fast we these with see the with Road looking our investments also niche X,XXX response offering. Road digital we recent financial businesses, counselor provides we professionals and early, acquisition While In well targeted with government and leading industry include healthcare growth actions for and solutions our businesses. loan

C&I increase basis from in line we point a Additionally, XXX benefited utilization.

remains our for outlook franchise activity. loan markets Our a capital across this income strong. Fee quarter in reflects growth slowdown

$XX this we approximately to continue to remain This pipelines second over capital markets, billion XX% model and for execution, the our retained sheet. long-term XX% we strong retaining balance best our in offer and our exactly clients, capital our business is solutions work. Importantly, the our in slowdown Historically, our outlook on the on is sheet. Despite balance for positive. have our is clients quarter, we balance sheet. both and designed the way off In on raised the business

business, invest adding including We senior and we bankers. will in continue this high-performing have to

shift me let to Now, expenses.

investments like additional strong Our investments teammates, in costs, quarter in expense making to focus concurrently of our reflect while course, trends analytics and digital, growth. places on drive managing investments, future this

invest our and maintaining average by loans Non-performing new have growth recent in with loans that including profitable throughout remained continued our with sound, expansion We of points. banking mentioned both percentage to net I loans In also a we Credit addition risk investments embedded our of of remain our Road platform basis this Laurel GradFin in innovations delivering quality criticized to charge-offs XX discipline. digital and earlier, to quarter, end-to-end business, declined as strong capabilities. committed quarter. this

profile, clients We position our perform will continue while to continue maintaining well the support our to and moderate has which cycle. business through entire risk company the will to

Our our shareholders. with return sufficient remain capital support levels to and strong, to providing our capacity us clients capital

dividend per Directors of approximately X.X%. of third This $X.XXX million announced and Board Our to share. dividend our a quarter $XXX yield equates recently of

we Areas year XXXX. by We like normal that deal of Board our will the a interest operating uncertainty. evaluate of inflation, is recognize is fourth our economic for deliver and this dividend practice, rates, quarter. quantitative in tightening reaffirming positive the another there course, recession. a higher of increase the close a morning As will expectation will in I potential leverage great

in in our for balance I’d backdrop, of steadfast ability turn clients, XXXX. and Given managing specifics to the our cover like the quarter I With Don for to our call over stakeholders. the results Don? for underwriting. the serving strong on our the full future guidance comments. and delivered provide our maintaining value and sheet, the on Don year that, remain our confident details our focus to create solid and of economic Overall, outlook disciplined another all in our to capital we remain credit our in of balance quarter his will remaining our Key

am on I Slide Chris. X. now Thanks,

operations $X.XX $X.XX the up common $X.XX from from continuing quarter. year last For quarter, share, net and per the second prior down from was income

Our business conditions. market we in performance navigate current quarter to resiliency current results the through reflect our as strong operating core continue the and the model of

so and confident the in prior positive leverage quarter ability for our to both year. the compared to year prior Importantly, do the and we full operating remain generated

balance interest was the sheet our increase positioned in was As from Chris by and stable up driven way growth we strong benefit net Higher revenues revenue to quarter, higher interest expenses. pre-provision mentioned, net a with X% and first from the loan have relatively XX% income rates.

risk expense strong strong our our also focus profile. results Our reflect management and on

Turning the to the quarter X, up loans for average ago the billion, quarter. year X% and up prior were period X% $XXX Slide from from

franchise, and consumer relationships client quarter, our utilization which strong Commercial add both our this Line growth growth across in deepen last from commercial basis to industry reflecting loan last verticals. from businesses. broad-based improved rates continue We X% quarter, quarter. loans across and points increased our XXX drove increasing

quarter quarter prior $XXX quarter. XXXX, real increase one-third businesses billion in X% as year our healthcare loans were from consumer continued by Continuing or If PPP, federal professionals. ago billion Year-over-year, of health Our student holiday. with billion approximately average to as down period core of up $X quarter or of the on $X.X on $XXX mortgage the compared the on billion, the average on to $XX year-over-year $X.X XX%. billion last for of its the to quarter. our million $X originated second payment Consistent adjust were X, the compared the or deposits impact growth to the deposits up sale this and $X.X ongoing X% commercial portfolio XX% Slide totaled by The loan in Laurel in well the decline year segment, were balances PPP strong billion average lower we including relationships, to originations loan seasonal prior time this as broad-based escrow stimulus to expected billion and residential and payments offset care annual consumer saw indirect deposits. in partially saw commercial resulting funds. public commercial of continued the from reflects and tax auto for well including quarter. we performance despite originations loans last deposits, of approximately estate last consumer focus as sector an decline higher $XXX as our outflows, of we compared million balances retail Road related quarter year last

of increased quarter. X the from Our deposits interest-bearing only cost points basis prior

We deposit approximately continue base, to core strong, for mix. accounting our deposits a XX% consumer have total of deposit with stable

are In from addition, commercial deposits operating of accounts. XX% core our

Slide X, the to the taxable ago and net both billion the for interest Turning second year to billion quarter. period income prior was compared $X.X in $X.XX quarter equivalent

prior quarter. PPP the additional the last position. Both from the also as was asset reflect the in margin and net from in in interest investment forgiveness. rates. million and higher the quarter million loan mix of net income $XX interest reflected from the X.XX% $XX benefited day both to Our quarter prior net earning year the to net interest quarter-over-quarter, $XX on interest from appendix Year-over-year for for X.XX% quarter. quarter is net balances X.XX% related asset in and income interest compared sheet Included margin income loan interest current same a liability as fees and and and interest portfolio million the quarter balance our down of second benefited from net Quarter-over-quarter income additional interest favorable net period X higher XXXX. the well detail The benefit margin for PPP, lower and second

have higher we years. mentioned, Chris significant to several over the As next interest upside rates

For have of would net $XXX and re-price we an existing income annualized $X.X swaps rates, we billion billion in over were treasuries example, $XX short-term our today’s if to to interest interest benefit of million.

period million Slide quarter the was ago Moving non-interest and million income $XXX in X, compared quarter. second to year XXXX million first to for the of $XXX $XXX the for

in from for quarter. debt the Commercial $XX mentioned relatively lower and fee impact expenses our $XXX other and now primarily continues the the last As prepayment core income, Total I in quarter, driven market-related cards salaries, adjustments banking placement lower investments by was capital compensation was the quarter the reflecting markets. billion, in decline year prior by balance our expenses be the month, period, fees. mid-quarter our income our income quarter. including prior in declines. also slowdown first on sale both to Strength partially quarter. and we last down prepaid banking up also were mortgage by into of million. on offset $XX to and stable larger Compared sheet XX. lower $XX the higher direct fees, income and services increase growth. Slide retention mortgage the addition in update lower, offsetting related which banking expense non-interest $X.X to quarter, revenue, higher in elevated offset investment lower, to reflect offset in million are impacted Personnel Consumer by million our of fees lower increased was the stock-based the gain million last income servicing corporate with ago am Investment fees an investment business. for with incentives to Compared million these negative margins. the related partially was was card payments $X year mostly Year-over-year, the production-related fees

charges increased quarter, $X travel for lease Compared to is million. other $X expense expense On prior assessments. million. million the reflecting non-personnel up was $X Other FDIC the expense and increased expense computer higher processing entertainment terminations, side, elevated, and and non-interest

We stock-based production-related occupancy, and and from lower lower increases reflecting benefit personnel in excuse than incentives offset employee seasonally – expense more compensation also seasonally expense. and me, higher saw marketing net which lower were costs

credit Moving to Overall strong. Slide quality XX. remained

loans. charge-offs average or this $XXX For of the XX basis basis $XX Non-performing from loans, net or prior of second of loans points XX million points were quarter, $XX period-end a million were decline the quarter quarter. million

delinquencies relatively declined Additionally, quarter-over-quarter. and were criticized stable loans

losses Our overall in credit is a allowance as the strong Tier reserve the on for in The added well as quarter. first expectation remained stable Keep reflecting X metrics outlook level our continued quarter, with slowing reserves mind, economy. last for based economy. our credit for our our we

needs ended We capital a our support Now This to range equity ratio second within X X.X%. on to Tier our continue XX. targeted provides to X% Slide X.X%, quarter and with and capacity to sufficient customers of to the of common borrowing return with shareholders. our their us

with our manage across continue loan We in of: organic franchise. strong we our our supporting this capital quarter, business. saw our certainly In priorities first, to a consistent growth capital growth

Second, paying shares. repurchasing third, and dividends;

our $X.XXX As Chris a approved Board dividend third for Directors the said, per quarterly quarter. of share of just common

Average our results. is XX XXXX our guidance As To full in guidance we full is to our year outlook, will delivering will is and guidance easier, is of and on XX%. Board leverage comparison Slide fourth year in support both our normal midpoints XXXX. right-hand would side This the provided up about quarter. shown our increase the The of is positive X% Chris’ on comments operating a slide. between which the year reported XXXX On evaluate a dividend outlook. our updated practice, ranges, of prior another the loans be basis. Using the make relative

XX%. Excluding be of the PPP of and to business impact average auto our sale last the indirect closer loans up year, will

is income partially from deposits X%. Net X% fees average be expect to in to rates, average to balances be reflecting higher XX% PPP interest interest loan offset by expected forgiveness. between and XX%, We and lower up up growth

guidance the be rate end XX%. forward and funds XX% the ago reflects card support Non-interest the the government prepaid relative Our investment XXXX. a lower in well down as to X.X% Fed year to period. is curve, of and market-related markets between in the by as slowdown on step capital the based lower banking of assuming This income fees revenue adjustments down program related and will

expect We focus Included be on down reflecting are investments to and our incentives our lower X%, non-interest in business. outlook X% and our in between continued management. ongoing strong our expense expense production-related

to the XX we remain be range credit XX points. of expect basis For and in year, quality to the to strong charge-offs net

approximately XX%. is Our guidance for rate our GAAP tax

the the our finally, bottom of on remain bottom Following targets, on long-term on unchanged. which of shown the are – slide the –

remain on We profile it solid to improving drive will of our to maintaining operator and was confident for our portion our Operator? for Q&A call. grow and risk a we expect continue turn in targets to our to With that, now and our and I’ll make efficiency, instructions commitments. moderate the deliver returns. the these back productivity call by ability quarter, the which progress Overall, on

[Operator the America. Bank Please Poonawala, from Our you. line Ebrahim Instructions] question of of go comes ahead. Thank first

Hi, good morning.

Ebrahim. morning, Good

Good morning.

in your go the first Appendix risk Don, the maybe guess rate just I around back question, book, XX. and wanted interest looking I at to slide to securities management comments the

a second, capture $XXX repricing; that what from one, us million over talk well and interest that core the in X about is upside to X to NII Just is part there to; of the upside? rates way when next if talk the run sensitive to you months,

That’s a question. great

basically far which treasuries. of about $X.X short-term As the X-year is assets. portfolio, in repricing our the just as at yield our those that’s impact, on a investment I’m billion And talking securities

it’s $X.X billion. that up So points picking on over XXX basis

And our reprice piece short-term over is would in would little life other years. a an be has repricing combined The that, just over average and run-rate the treasuries, which million $XX billion, benefit. to $XXX swap with X.X book, yield that of

good and in over to the benefit As earlier look capturing opportunity done But such see earlier, portfolio that things couple about will take we we we’ve years. we to starting things far always some as as positioned the how a and how next to that other to swaps and forward can, we’re quarters. to that the feel start from with realize of position

question like any Got outlook seems it. and I for Obviously, guess just a slowdown. growth. not seeing the of real on you’re separate signs loan

downturn Just talk maybe recession book? just the the stuff X capital you’re the customer how of the underwriting on a to months, to thinking balancing XX us sheet about market in how versus the demand, terms you’re and enter over risk and balance quality and next we credit of tightening

for prepare to time kind downturn. the is the Obviously, Ebrahim. before any long a of Sure, downturn

been on exited intently year. we billion dialing years, gateway if we recently, look certain focus our And had actions book are the over more if we’ve been time. place we asset focus for exited. and that of XX so back, we period indirect last example, some on. at last is areas leverage cities, We like, where is you for $X.X The auto in a course, there we’ve go of And constantly in housing that there taken is that we that been have And we looking And values. then you back think portfolio, Key. de-risking a any we places run-up

is kind on opportunity, you such $XX West. from balance notion our an now when on of our percentages balance for a what’s billion there get of of X% our So where we XX%. like we into obviously, what best typically have clients. sheet is loan-to-value markets to as do gives idea. sheet you an dislocation, lot. distribute right we we obviously goes been places in about went we’ve for what And that’s XX% and example, up and That And The dialing the back

Got it. questions. Thanks for taking my

Sure.

Please comes next Ken ahead. of the from Jefferies. Our Usdin, go line question

Good to on just guys. I market Hey, morning. the side. capital wanted Yes. follow-up

environment So pipeline. obviously, tough talking execute, you’re about still a obviously, market to strong

sense you as And just like the cost a much on from you do can get that obviously adjustments So do revenue on see a how you result talk side as of you looks Thank did some just here? about you. the outlook as How well. what flexibility well? side

business numbers. expense of about Well, variable is one reflected Sure, like Ken. a the our in we it really cost saw morning. and Good things business, you is that the

equity, M&A think now imagine, with real is and In the for than a bit and companies where as as pipelines you terms that, the well you And said what there this the of going at between discovery. the is year. actual are market, the example, they price companies of this year the of last is to exception right did time business, be of is yield. stronger a priced, Having trajectory about, remains challenge being there the disequilibrium these private can publicly-traded

I that out. a it take to shake in while my to going does for think shake out. it’s But experience,

think so markets, if some the get – some can half, momentum. the back I back will think cooperation half from generate I given we the And

a in thing you’ve long share this frankly, in. you invest it’s to up continue I couple last will the been market hiring the to following with and of this about business in we this believe in will And that out time, a be business challenging, other us The and in years. been ride is for we

past. market down than And of us hiring question. we flat in people have more business see your for invest and this so the in or Thanks a you’ll sort in

was had Can to may you here obviously, expecting into And rate how about point starting it. we of you’re really cost just interest-bearing traject Thanks. raises? as you deposit media the excellent. I part the talk Got – of the magnitude get follow-up, one if that

you’re starting that a lot point of the pressure deposit on that Sure, that right here Ken, rates. haven’t seen we

And beta. quarter deposit average – interest-bearing incremental we beta XX% expect really would will the to the from that LIBOR suggest X% think a to X-basis-point deposit that X.X% here the as about of the costs year, a expectations. in a increase increase call, so as incremental we and going the closer got betas for very to a in low in increase we’ve to about compared We beta forward. the range And the year in that so the the about by be last – end end talked do of our towards XX-basis-point that’s

will customer changes forward. going We rates deposit more for start see more and to competition

Got Don. Thank it. you,

Thank you.

next go line Steven Please is question our And of from ahead. the JPMorgan. Alexopoulos,

Steve. morning, Good

everyone. Hi, good morning,

do at you and at specifically a looking loan growth wide and growth So deposits? to the you how loan deposits, loan one mismatch, updated X% the in at what And looking which for ratio plan XXXX? need one funding to XX% fully I’m to start X% with is to X% loan-to-deposit guidance decline growth beyond fund pretty do

Don. have you’re through is to year-over-year. growth, as rest right, X% That is stable X% year. the maturities. of relatively to the are loan guidance security updated be the investment And to expected far the deposits X% this Steve, do as some We Deposits up implies XX%.

we capacity below real balance will also as far borrowing ratios a between would on of our can that the to our cost-effective in estate that XX% Typically, ratio. way. adds of target the XX% and We and market the loan-to-deposit home originating as far currently loan as residential sheet. do benefits wholesale at we funding XX% tap were Loan-to-deposit as loans one

room customers. to see monitor got would markets we’ve more will we of want to opportunities. capital of this. markets, demand to going couple for in as we see for loans So probably are we Chris a that. I our times, say highlighted support these that And But plenty going we work has than through are customer to continue to

help We reverse that continue loan growth see on alleviate we of pressure point And some see will so to could in that. time. at And overall. the some

can if XX% ratio this? of So your on just that XXXX? I think keep where it do be That’s competitive moving think deposit Ken’s the you you’ll you to the higher is reach point, above you to benefit feel your as Okay. commentary beyond do through-the-cycle long this beta? your heard forward rates at bay how deposit so more Don, incremental good move that you’ll we given term, by you think are to beta we year. consistently need be loan end what stay at about some a forward, we do Chris, you response or beta But NIM And think deposits. deposit helpful. question going And loan-to-deposit loan you

slowing. we can. it the I clearly, And go inevitable as think reason said economy think, downturn an I I and into the is

we are see going think sort garner I think in be risk, with good relationships that. of you to re-pricing we position a the of will have I to and that a

And so I think your I question the think answer will. it is, to

I on the would as increase much products or been of opposed promotional would of on focused the accounts rate mix focused have deposit our And beta we consumer operating money well, on And during cycle. more Then the historically different to last it core are type consumer side and as that historically, market primacy deposit a for what today side, then is was might than we XX%. we accounts say around to have very the XX% on had programs. deposit

see should interest sensitivity we so And rate less there.

in core just from operating accounts, points XX and On XX% years the now ago. up points probably what our was commercial side, of X are deposits that’s are X we seeing to it

So, down historic that to to us. that manage be should continue longer for were what us beta to mix term compared for levels the helpful

that be XX% were above level we that below but XX% that XX% drift I we think to level, well will we so And will probably historically.

more squeeze in. I if could Don And Okay. one

non-interest expect implication XX% of that operating we the accounts, bearing? shift that commercial from a of that? are out the that, of shouldn’t read-through the Is So, is deposits from much mix that

the impact and provide rates of just we will manage help crediting of because rate we earnings the shift see Well, to fees. some that higher there

might some put funds might account other less the less they you as of we up, so but higher we level operating does will in balances. the rates And historically see go because those shift than and need of have it what a still imply of would to categories, of there some see of interest-bearing keep just look that to

it. Got

Thanks all Okay. the color. for

Thank you.

Our next question Najarian, from ahead. of comes the line go Erika UBS. Please

Hi. Good morning.

morning. Good

credit first look question on should My which a is to clearly currently. you is how think help Ebrahim a about the time ACL is that pristine to recession. downturn maybe would for us well before said we understand quality, prepare the Key’s Chris, like downturn hits. And in how

if So, you credit more has ended also XXX good, is longer lives, clearly, consumer changed, book the you even at have and they my a but understanding is loans, standpoint, from quarter right. which CECL have your the

guess we do next ratio that, ACL year I if a So, this where here mild the or have question recession is, trend? than would sooner

to in business we XXX. our comfortable where today. are consumer. morning funding and both first is of scores good of with keep side. really are obviously book of start Obviously, Erika. few – consumer And about That – FICO our commercial reserves mind, things will the I at all, with A So, about our on

a consumers. as it’s customer relates a unique it little So, to of bit base our

in that’s mind. So, keep to one thing

a laying about there off are risk I have kind as And of don’t all side Key. the the XX% flows risk mentioned been on The consistently meet were through Key. And that other lot been of de-risking to of thing earlier, our consistently of moderate we also profile. able place we is, commercial we that deals that have have

now. So, I with very am comfortable our are where reserves

are continually But imagine, whole reserve modeling are just different comfortable the lot scenarios. where our with at moment, is. we of As you a can we very

will there just some You premise and reserve that, increased our challenges had out our changed under qualitative macro there. more quarter, were view recall, we actually clearly CECL, last on the

very the add can that it you foreseeable allowance, I you what more approach. a as CECL, our little bit And would a in at is that quantitative do well. forecasted as is the this Erika, look color far Don. losses. look I as that say take is to probably period under at if

of that’s us, X-year period. type a for so And

And to would years those losses to X so at where they are start the back go will of then even we And in norm. see recession, up you today. migrate from a

And so with to life see life. you as real And or you you would. the that would Road, residential entire far loans that student longer that for loans Laurel estate even might the the think really as our

You would X-year it see spike period. first in that

And so but a a be kind would in somewhere or the to it be imply this guess time. at XX-basis-point best XX-basis-point between doubling, our point wouldn’t might of it it allowance, increase

Got it. And Chris, follow-up maybe you. a question for

lot As lower you perhaps, take or super de-risking, colleagues any the a way? banking may higher private be with and you system. investors I share perhaps a your from blowups that are step for any comfortable gains just EBITDA, in the some back, rates are of And built that of corporate and powerhouse, market credit KeyCorp comments lot this in if into have Key room is deals your And outside you wouldn’t do issues come at think and see bank. you and deals thinking given commercial corporate regional a markets, of those about there some the credit

no that things on banks, sheet. structured a structure them be about Well, will think I downturn, on balance think can have the are share. there is people you thing your gain put general, to funded, able nice want in to is Erika, And the them to way question you depending how I

because can speak. obviously be that, to them market structured location, that the this for question structure no gain us given we to will and as like things the have opportunity adjusting is there way share it think in we I relationships, an we given market would is our

Thank it. you. Got

Erika. Thanks

[Operator Instructions] And go ahead. Bank. Deutsche the Matt next from Please question line of O’Connor, our comes

Good morning.

Good morning.

of range point kind at is buybacks? your within term? that maybe range to Can you X.X% on thoughts where of capital at of this also cycle be both X.X%. on X% just you to and in want update us Your capital the middle right versus your And then longer

Sure, Matt.

be an range would put X.X% I Frankly, range we that’s comfortable had X.X%. that. place. at X% was to comfortable than very just obviously at little that are a broader internal we a even So, in

first mentioned preserve capital in grow. As foremost, to actions, remarks, our to it relates we his as capital and Don our help clients

So, that’s the thing. first

third shares. is then repurchase The priority our the second which is important. dividend, And thing of is obviously tertiary our very

I where so from good And very capital a perspective. feel we are about

maybe mentioned earlier Alright. speaking. the capital within within And somewhat that even so all are more opportunities organic, those of banking markets you there investment then some businesses? or Is investing kind niche related, as broadly about acquisition

know, past, and we I would was is a in our I comments But you entrepreneurial platform. am good plug sort hires the ability on what as really proud organic be these cultural that to think focused fit really we our have Well, to my businesses. of into integrate in of businesses, bought individual

Okay. Thank you.

you, Thank Matt.

we have Mayo, of question last the line here And ahead. Fargo. Mike go from Wells Please

Hi.

statement a or left hand than re-intermediation not but sheets is traditional the it catch with with with and investment ball capital to right So, hand you, your lending from with markets. bank you if your new balance the can’t catch banking it you

therefore, are But sheet. have can area, say about? market your is we We you don’t this to past, the know. transactions we they as described specific you know in all be balance so go more completed, old like I get what So, capital this Chris, talking Key’s and

Just a great. be detail little bit would more

Sure.

won’t the the go raise there have sponsor is example. way we we and but trying it an those you, give pleased conservative amount sudden, capital. to to in say, funds me structure sponsor, the on is a and whoever there example. it would a debt debt all that and equity. can significant frees debt these we with up But very privately be and a all to these relationship an all our place We we behind let to offerings, out That of it are put sheet, markets has back we trying unitranche up. the more to market, deal Say parties someone to So, would need the with structure be come would will and then balance of involved – you is is

take paper a That’s to that could it’s until large, deal with a to that. example over could would they couldn’t takeout. wanted public project that be go that fund – of in that a we with known example of be, a to third Another you place But company ways of period going the we agencies. the affordable one public. say time a be, do of variety dislocation, would A let’s large a were a ultimately bridge would because continue few examples. a we That

partly just not to banking one-half. biggest your Okay. mix, middle down fees decline players, as the guess quarter. And down the than quarter one-third much investment your But due that’s were less was to market. upper versus I the first second

expect said to you You things improve.

Does past. have else’s, have as maybe as I are clients you or you how optimism? – resources? are or good that anyone the you perhaps your you what You hear in extra maybe saying, your allocating but guess investing going Now reflect with more mean said backdrop, to than that is some your insight are and be you

months the no long-term. is long optimistic know, fact, the Mike, out six markets you But playing in game. about anybody’s I as over these is, how There the guess. next we play question are am business

We I I that the earlier and in discussed price come anything I market, business. on happening are see months in discovery I think do M&A for will start the don’t next that. together in pipelines The example, there. the three that or to sellers six the buyers are investing do think market, equity in this months.

Okay. Great. Thank you.

Mike. Thank Sure. you,

no there in are other time, questions queue. this at And

for you participating today. in call thank we Again, our

Investor you follow-up remarks. any questions, team you Thank Relations them If our you. our concludes direct XXX-XXX-XXXX. This to have can

and gentlemen, that service. conference today. AT&T your using and you our for ladies participation concludes for conferencing for Thank And

disconnect. now may You