Q3 2019 Earnings Call
Good morning, and welcome to the you must be financial Corporation third quarter 2019 financial results Conference call.
Participants will be in listen only mode should you need assistance. Please conference specialist pressing the star key followed by zero.
After today's presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one your touchtone phone.
To withdraw your question. Please press Star then too.
Please note. This is that is being recorded.
Now, let's turn the conference over to Kay Gregory Investor Relations. Please go ahead.
Good morning, and welcome to our third quarter call Mariner, Kemper, President and CEO and raw chalk our CFO will share a few comments about our result.
And Jim Ryan sealed the bank will also be available for the question and answer session.
Before we begin I mean, there I do that today's presentation contains forward looking statements all of which are subject to assumptions risks and uncertainties.
Actual results and other future circumstances or aspirations may differ from those set forth in any forward looking statement.
Details about factors that may cause them to differ is contained in our FCC filings.
Looking statements made speak only as of today and we undertake no obligation to update them, except to the extent required by applicable securities laws.
Our earnings materials are available online at Investor Relations got you wouldn't be dotcom.
Earnings per share metrics discussed on this call on a diluted share based.
Now I'll turn the call over in America.
Thank you okay. Thanks, everyone for joining us today, we earned 62.4 million or $1.27 per share in the third quarter compared to $1.16 per share in both the second quarter 2019, and in a third quarter 2018, we continue to see strong loan growth with average balances increase.
<unk>, 8.6% linked quarter annualized basis, and 10% year over year.
Comparisons a publicly traded bank set of reported to date have shown a median linked quarter annualized increase 6% an average loan balances.
Commercial real estate was the biggest contributor to our growth for the quarter followed by residential real estate. We added 61 million an average mortgage balances to the balance sheet during the third quarter originating both in our private banking area and in our consumer business.
I see an eye, but well still experiencing solid production was impacted by some pay downs related to M&A activity as well as a few prepayments by clients who experienced strong performance.
For the total portfolio third quarter topline loan production was 850 million.
One of the strongest production numbers to date.
Total payoffs and Paydowns, which include unexpected exit certain factoring loans were 561 million this quarter for 4.3% total loans.
We continue to see opportunity in our markets and the production pipeline remains strong as we look into the fourth quarter.
Net charge offs for the quarter were just pointing zero, 7% average loans and on ice September year to date basis net charge offs.
We're 0.29% of average loans compared to <unk>, 0.26% for the same period in 2018.
Now looking at fee income positive results from asset servicing private wealth corporate trust and investment banking were included in the mix.
As Ron will detail shortly third quarter included some noise from market related adjustments, including coli and equity earnings income along with outsized gains on sale securities. Excluding those items, we're still seeing positive trends.
Our fund services teams continue to win business, taking advantage of consolidation, both among asset managers and in the servicing space, we're seeing larger conversion deals and existing clients are launching new products at a fast pace.
And in bond trading we experienced increased activity with some plastic and gains as a bond market rallied near the end of the corridor.
Net interest income grew 1.1% compare to the second quarter, largely due to our solid loan growth and a 3% increase an average securities along with an extra day in the quarter. However, net interest margin compressed by 10 basis points.
Actually yields were impacted more quickly than liability side of the balance sheet, given that about 68% of our loans reprice each year with most tied to short term rates that moved ahead of the anticipated fed cuts during the quarter.
Well, we're working to adjust deposit pricing those results naturally lagged changes alone pricing based on competitive rates as well as our liquidity needs to support our strong loan pipeline.
The 2018 money marketing campaign, it's one year Mark in mid September So, we'll see the full impact of that repricing next quarter.
And then declining rate environment, well clearly see a benefit from the index portion of our deposit base, but keep in mind that a third of our deposits R&D D.A. with no downside potential.
Economic data has relatively been positive and our conversations with our clients cautiously optimistic. However, we expect a lot of volatility leading up to the 2020 elections, given the murky interest rate environment, we executed a small 750 million dollar cash flow hedge during the quarter.
To help reduce the downside risk balancing the near term earnings impact with a longer term protection from lower rates.
With the exception of certain CRT loans, our markets haven't fully supported the institution of loan floors and term language.
However, we maintain our discipline in pricing.
As we've said many times over the years, our business model is built to weather all economic cycles, well the shape of the yield curve and the low interest rate environment pose challenges.
Our strong loan pipeline should enable us to continue to grow net interest income counter to what we spend hearing from our peers.
Coupled with our focus on diversified fee income sources, there should help us mitigate some of these headwinds.
Now I'll turn the call back over to Ron for more detailed discussion of our results from.
Thanks Mariner for the third quarter net interest income was 168.3 million, representing a 1.1% increase on a linked quarter basis, the benefits from our strong loan and securities growth and the impact of an extra day during the quarter were partially offset by lower short term rates and by mix changes, including the <unk>.
Hey off of some factoring and other higher yielding balances.
Earning asset yields declined 12 basis points to 3.99% from the linked quarter, while interest bearing deposit cost declined two basis points contributing to a five basis points reduction into cost of interest bearing liabilities.
Net interest margin for the quarter was 3.09% down 10 basis points from the prior quarter margin was negatively impacted by approximately six basis points from loan repricing and mix changes four basis points from changes in our funding mix, including higher money market balances related to our institutional businesses and less.
[noise] benefit from free funds, one basis point related to market value changes in our first portfolio and one basis point due to the extra during the quarter.
Positive repricing and DFS book out at approximately two basis points as roll off cash flow was invested at 2.99% in the third quarter.
Additionally, NIM was slightly impacted by the cash flow hedge men are mentioned in late August we entered into a 1.25% interest rate floor, but the notional value of 750 million to hedge the risk of declining rates on floating commercial loans.
The hedges index to one month LIBOR and has a five year term the one month impact of the hedge was about a half basis point margin.
Considering recent market dynamics on the expectation that the fed we'll announce an additional cut this afternoon. We would expect approximately four to five basis points of net interest margin compression for the fourth quarter.
Of course, the actual outcome for NIM will depend on a variety of factors such as the pace at which lie more most loan growth the potential variability in our aviation Trust business and our overall balance sheet makes a need for funding.
Average total deposits increased 2.8% on a linked quarter basis, largely an institutional and commercial money market balances. Our overall deposit composition by source as shown on slide 13.
Moving to the income statement Meritor already discussed some of the opportunities we're seeing in fee income and the detail on the specific drivers are shown on slide 19 and 20.
Total reported noninterest income was 103.6 million for the quarter, a decrease of 1.8 million compared to the second quarter.
Included in the decrease were several market related <unk> reductions all reported in the other income line 3.7 million of lower equity earnings on alternative investments $2.3 million in lower coli income, which has a proportional off sudden deferred comp expense and 1.5 million in lower derivatives.
Income.
Positives include Trust and Securities processing income, which improved 2.3 million or 5.4% or the second quarter, driven by fund services corporate trust and private wealth revenue.
Brokerage fees increased 1 million or 14.5% linked quarter related to 12 be one and money market revenue driven by our growing institutional businesses.
Non interest expense for the quarter was 191.4 million a decrease of 2 million or 1% from second quarter.
Bonus and commission expense decreased 3 million and deferred comp expense the Austin for the lower coli income I mentioned decreased one point sixmillion.
Marketing and business development expense related to travel in advertising decreased one point sixmillion due to timing of ongoing product initiatives.
These items were partially offset by increased expense of one point threemillion related to a fee paid to terminate a portion of the building lease slide 21 contains additional detailed drivers of expense changes.
As a reminder, several of our expense categories, including bonuses and commissions processing fees and bank card expense, our variable nature and tend to correlate with volume or revenue based activities.
Finally, our effective tax rate was 14.5% for the third quarter and 15.1% yesterday for the full year 2019, we continue to expect our tax rate to be between 15 and 16%.
That concludes our prepared remarks, and I'll now turn it back or to the operator to begin the culinary session of the call.
We will now begin the question and answer session.
To ask a question you May present Star then one on your Touchtone phone.
If you are using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then too.
At this time, we'll pause momentarily to assemble a roster.
The first question is from Chris Mcgratty with KBW. Please go ahead.
Hi, good morning, everybody.
Hi, Chris.
Maybe ROM start with you or Mariner in your prepared remarks. Thank you talked about growing topline in light of of NIM pressure that the industry is facing.
Again I'm looking further at more color. It does that assume if we get a cut today and then potentially want more that we could see kind of flat to growth in Eni next year is that kind of the message you're trying to set.
Well I think actually what we're saying is that loan growth.
Continues to be strong and as we have historically only given you a look into the next quarter on that the pipeline looks good for the fourth quarter and would expect that.
Net interest income growth without pace margin pressure.
Okay. So growth in in right next quarter got it.
Thanks for that in terms of 'em deposit rates. Good can you elaborate maybe where the spot rate on deposits might have been in interest bearing deposits in September and then you know can you put some context around index. How much is left at how how's that going to reprice. The next few quarters.
I'll take that Chris So just if you look at the money market campaign that we talked about a we repriced the down by about 50 basis points run 2.3, obviously, the first Scott will be the deepest one because we raise those deposits in a different expectation for interest rates. So the money market. If you look at the rates around us it's closer to.
170 to 180, obviously with the right got today, we'll reevaluate Oh and then on your last question approximately 23% of our deposits I would say is wouldn't be called heart indexed to some kinda fed funds orphan apartment REIT.
Okay, Great maybe maybe just one more on the margin if I could in the spread between your new securities purchases and it was around 3% and your cost of fed funds repos is around two it's about 100 basis points spread net.
Is that there is the expectation to keep that kind of carry trade on if you will given the positive spread or is there any contemplation that you might.
Yes, shrink gotten any buyback stock.
A lot of it will depend on.
Loan growth like matter talked about we have a strong pipeline. So there's definitely an opportunity to rotate out of those assets securities.
Yes, definitely won't before the reason to buy back stock so I wouldn't quite call. It a leveraged trade. This is you know much needed collateral to support all our businesses.
So I would expect our portfolio to stay closer to where it is but funding shortfalls happen or loan growth exceeds we might we might look to the portfolio the onto our balance sheet, though it.
Okay. Thank you very much.
Thanks, Chris.
The next question is from Ebrahim Poonawala with Bank of America Merrill Lynch. Please go ahead.
Good morning.
Hi, good morning.
I was wondering if you could.
We do in terms of the expense when you look at a third quarter expenses. If you can remind us one if there's any seasonal impacts that we should make into it and we think about fourth quarter and just more sort of longer tell him and I. Appreciate you don't want you don't give or can you give any guidance, but just talked about in terms of cost savings what you're doing it the bank and on the.
Decide what kind of investment spend do you expect the over the next few quarters.
So just in terms of third quarter in bad we've talked about a million three or so because we terminated or a particular lease in one of our building. So that's consistent with what we're doing to look at our expense base overall and then so there's no real sees no other than some timing impacts from a software expenses.
We're shifting to more of the purchase DDP model that some of our investments so that those spiked up a little bit in the third quarter, but we'll continue to remain at those elevated levels because we are investing in our franchise.
Got it and do you expect and given sort of be outlook in terms of the margin and interface.
Expecting sort of keep your efficiency ratio flat or do you see that kind of trending back higher next year, given maybe at a from a rate standpoint.
[laughter] as Mariner how are you this morning.
Good how are you good I would say you know it's that we as you mentioned earlier, we don't give guidance on that I I think that you should expect us.
To manage expenses as tightly as possible without mortgaging the future as we look and you know into next year. The mix I think the positive an important thing about the mix on our spending is that it's shifting to more than 50% of it more towards customer experience and profit generation versus keeping the life.
On and sort of.
So upgrading it updating systems. So that's probably the most important thing so I would say way we look at it right as we want to see a earnings growth and sort of the stuff that we talk about being important long term and less will focus on the absolute amount.
Spent more focused on a bigger company on expense load that we have.
Got it and just one last one.
If you already talked about this but everything about the margin.
Relative to the fed interest paid a god.
How how quickly do anticipated the margin could stabilize it once the fed stops what did happen like order flow immediately after or.
He would you need like a steepening to go for the margin to get friendly.
Let me just theoretically it'll take a little bit more time, just because you know loans are being replaced a lower yields right. There's always the churn just like on the way out there was positive churn clearly as you see the RFS portfolio, we're still seeing positive charted between what's rolling off and whats rolling on but if a the tenure stays pretty low.
It is at some point that's good.
Reach equilibrium, so you might have a longer tailed and just one or two quarters. He brings.
But I for taking my questions.
Yes.
The next question is from Gordon Maguire with Stephens. Please go ahead.
Good morning, Thanks for taking the Washington.
Good morning corridor.
The average deposit growth was pretty good this quarter I'm just wondering if you can remind us what the usual seasonal swing in deposits is for the fourth quarter and whether you you do you anticipate this quarter being pretty pretty consistent with what you've seen in the past just trying to strike the balance sheet here yeah. The biggest volatility in the positive this quarter.
It was primarily from our institutional businesses corporate trust aviation and asset servicing they tend to be volatility because of deal flow and depends on what's going on at the market too. So it's hard to predict that but usually there's a slight pickup in deposit growth in the fourth quarter.
In public funds, they usually come mid December and then peak in the first and second quarters. So you'll see some benefit from that and then what remains to be seen on the other side of the money market campaign with the rate cuts that we talked about what happens to those balances.
And what happens with our aviation Trust business continues to grow and so.
Well, we'll see how that plays out.
And you talked about the the money market campaigns repricing lower end the hard index that maybe more does the softer index deposits that you talked about last quarter I'm, just wondering what kind of stuff you've had in lowering prices on those and how much beta you've been able to capture there from the last because we'll see how to.
Three areas. There you got the traditional consumer space, which will continue to price down as we watch the comp competition.
We usually wait a week or two is make sure that we don't get out in front of a competition. So that's the resale piece that couples with the private banking then we have kind of our corporate did account business and.
Oh, we do kind of on a negotiated basis I would I would say that all of that will come down.
And ER and we'll just manage that to make sure that we are diligent about keeping it while we're bringing it down so.
So that we don't get out ahead of the competition and do something stupid.
Got it <unk> the charge offs came down quite a bit this quarter, but you can can you go into the increases in sub standard and non accruals and it looks like you built the reserve a little bit so maybe how we should be thinking about charge offs going forward off these levels.
Yeah. This is Jim we had a large credit that we knew we were added four are paying off but based on the timing.
And when we knew the information we went ahead and put it all non accrual before quarter end and subsequently to pay off after quarter.
So that those came back down right after quarter end within 10 business days. So really it was just a knowing what we knew when based on accounting rules. We did go and put it on non accrual. So you did.
That pick up.
The came right back down after quarter end and we did mention that we felt like.
Our charge offs would be more normalized to historical levels going into this quarter and I'm sure life portfolio not to give guidance, but we feel like.
Thanks.
They'll be back more to historic levels, what you'll see going forward.
Alright, thank you.
Your next question is from Nathan race with Piper Jaffray. Please go ahead.
Good morning.
Morning.
Going back to the margin discussion just curious if you had the weighted average rate on new loan production in the quarter.
So you do that again, the weighted average rate on new loan production in the quarter.
No we haven't really.
Gotten into that I guess from.
Well I guess, a competitive standpoint, it's not really something we get into I'd say I'm from a environmentals perspective, I'd say, we've been able to hold the same kind of spreads that we've been seeing.
But don't really get into that otherwise for competitive reasons.
Got it I guess I'm, just trying to get a sense for looking at the 2020, if you know new loans or come on the books below the portfolio yield or at the portfolio yield it stood around 5% flat during third quarter.
Well I mean, I guess back to rates coming down right. I mean, there's there's going to be it's dynamic because of what we're going to be able to do with so just talking about yields by themselves on the loans are likely to come down obviously, just because the rates are coming down but as it relates to spread margin you know there's many things.
Play is related to how how successful where we are with deposit pricing and other things, so, but but you know the yield on loans will come down.
On the new generated loans for sure right got it.
Understood and then.
Just in terms of pay offs, I understood and or it seems like there little elevated late in the quarters given the average growth that you had here in Threeq. So just curious if you have any visibility in terms of how payoffs are trending thus far in Fourq you.
The as you noticed in the quarter of 4.3 between the 2000 pay downs don't see that change in you know so hard to predict but we've been able to keep that pretty consistent.
I don't see anything that would stand out one way or the other just regular activity.
Okay understood if I could just ask one more changing gears the corporate trust revenue was up pretty nicely quarter over quarter in year over year and I know you guys have been.
Invest in that business and have added some folks as well in that line. So just curious you know how we should think about growth in that line in Fourq you in cross into 2020 as well.
Well as you know this is Jim as you know we've continued to invest in we've expanded the team in our aviation Corporate Trust, we've seen continued job.
Activity at our traditional corporate trust business throughout our footprint and we continued to expand and.
That team.
And then with the closing of the acquisition that we made with the Iowa team. We we look for that to a continue quite frankly, yeah. That's a that's a business. We're very excited about at the end of the lead tables and the recent quarter were actually I've come up one spot in.
We'll size. So we've been number three on number a number of issues from standpoint of thing agent, but we went up one level as it relates to the size of the deals were doing so that's a as we move into markets like New York and up and down these seaborne in places like that.
We are starting in the larger deals and that's pretty exciting. The aviation Trust business is just getting underway. We have all nearly 40 people now within just one year in Salt Lake City, and we are building in commanding presence in that space.
So we're very excited we continue to look for ways to consolidate the corporate trust business as a many of our peers and larger players I realize that they are barely in the business and we are a go to frame consolidating that business.
We expect to be a continued to be a major player on a national basis not business.
That's great to hear I appreciate the color. Thank you.
Thanks.
The next question is from David long with Raymond James. Please go ahead.
Good morning, everyone.
Hey, good morning, David.
In recent conversations you guys have talked about increasing your investment on the retail side of the business and just curious you know what progress has been made there and any improvements that we should be looking for in 2020.
On the retail side of the business.
Hi, David This is Jim.
So we have our new teller platform and beta and that will be rolled out system wide within the next 90 to 180 days, our new online banking platform will go live in December but due to the holidays, we won't be able to roll that out.
Everyone until most likely after the first of the year, which.
Fantastic, we are able to do online account opening in pockets, but we'll have that it in a broad based fashion.
Within the next 180 days, so we should have.
Well not to say caught up because I feel like we do well, but we will have most of our upgrades in place in 2020.
And in the first half of 2020, so we continue to invest in will be most through most of the technology upgrades.
Before the end of the year without a doubt.
Yeah first largely just to make us competitive close gaps are very excited about where we'll be with that you know everything from online account opening to.
Updated upgraded and then from their branch refresh in.
Remodels and then.
Oh.
Yes, retooling some of the space that we have to make it better experience for our customers.
Got it and is there anything in the operating environment, you know what the economy, whether a slow down or change in rates that would put a pause in some of these investment.
Well I mean, I think that that question would be more broad based across all of our spending and all of our activities and you know as I said earlier, we remain very diligent about controlling expenses at the at the most extreme level, we can sell mortgaging, our future and that would look you know that would kind of.
Across our entire business, but on the consumer space. So these are.
These have already been implemented and we're we're through and we.
We are a bank in the consumer franchise is vital to what we do so we're going to complete the third or something else, we might wouldn't it out but certainly not any of these projects.
I've yet to be clear clearing that up I mean, we could slow down the pace of the branch refresh or something if we needed to wouldn't be like whether or not we do it or not there are things we saw the pay so if necessary, we don't currently see that being necessary but.
Those are all.
The pace at which we do things can can evolve if necessary.
Got it and then and then one final one for you right.
As it relates to some of the other.
Noninterest income and I appreciate in the slides the color on the decreases in a in the market related metrics, but are these market related metrics are we at a low level for them at this point or is this the level. We should look at going forward or is this an unusually low quarter.
Well, it's tough to quantify the slow right. It depends on the market's a some of these especially the quality investments. The we have more tied to specific to the S&P 500 index. So yes. If he can go down so we might have some negative mark to market valuations and that can take the fee income even lower so as I said on the prepared comments right. If you look at the other other line night.
Some of the $10 million 6 million of that swing was because of our coli investments and equity earnings in some of the alternative investments that we have another 2 million was because of just lower capital markets and derivative income. So it's really tough to give you a run rate on no one because of so much of it is driven by markets.
But the reality is as it relates to business line revenue growth for noninterest income is there and we're demonstrating that.
He's really referring to the noise you can see in the right you can back into the fact that we actually had a you know noninterest income growth from.
Sort of trajectory perspective, if you look at the reconciliation on your own which I'm not allowed to do for you. So but you can do you can back into that yourself in the reconciliation page.
Got it thanks for all the color I appreciate it.
Like that.
The next question is from George Shaw with Wells Fargo. Please go ahead.
Hi, good morning.
Hi, good morning Gerard.
I guess, just a couple of a bigger picture questions. You know one you know when you look at the middle market commercial lending environment and the strength. There are you seeing any impact from the tariffs or from a you know maybe a broader concern over making.
Capex investments or just you know business expansion investments at this point or is that not really flowing through to the customer level.
I would say you know, we've said earlier kind of the cautious optimism.
You know generally speaking as we go around and talk to our customers and have regional board meetings and such.
The general sentiment is pretty good there are some fluctuations from one industry to another and some timing issues around being able to pass on tariff costs, and so but I would say generally speaking ultimately.
It seems as though either those costs over from one period, and that's or they're able to pass those on or.
Or are they impact as much nominal growth as their investments are being made a borrowing levels remained stable.
The nation rent levels remained stable.
Yeah. So I think the general sentiment is pretty good you know there swings and obviously you know for example, construction is very strong pipelines their backlogs all across construction are very strong and deep and beyond the beyond the.
Backlog a pipeline sounds like there's strong even path.
Even past backlog and then if you take.
You are two juxtapose that against transportation, which is a leading indicator some of our transportation related clients would tell you. They are starting to see some softness so.
So generally speaking what I'd say, it's a mixed bag some of the leading indicators like I said transportation would lead you to believe theres going to be some softness, but even those guys are cautiously optimistic about 2020. So.
Yeah from my Vantage point 2020.
It looks pretty solid.
Whether or not there are some kind of slowdown in 2021 or not remains to be seen.
That's great color. Thanks, and then on the HFSA side, Yeah. As we go into the ended the year here and we're starting to enter the enrollment cycle are you seeing any.
Any changes sermon employer sentiment around the high deductible health care plans and trying to promote those given the.
The political backdrop and the potential down the road for changes in health care is that not really flowing through to the H. I say pickup at this point Yeah, Hi, This is Jim.
We have not seen Matt yes.
For six months of our balances trend to the industry to a bit but on the in the third quarter, we caught back up to mirror industry grow.
Through the rest of your when the enrollment period comes really we are hearing anything that leads to believe that.
Yeah.
Okay. Thank you.
I think there.
Again, if you have a question. Please press Star then one.
The next question comes from John wrote US with Janney. Please go ahead.
Turning everybody.
Good morning jump there.
Maybe just a quick question on Cecil do you have any sort of update you can provide at this time.
No not at the time John the team is working we really really really hard as you would imagine we're doing the apparel and runs the different balance sheet dates in different economic assumptions. So you'll hear more from us as part of our year end call Oh that it's we don't think it's going to be immaterial headline for us.
Okay. Thanks, and then Rob just a small item, but on the balance sheet. Other intangibles were up four or 5 million linked quarter, what what drove that increase.
The Iowa Trust AG Oreo, a corporate trust acquisition that Jim just referenced John So can you just once we had a press release about that there was a small purchase price on data not just the increase on customer intangibles.
Yeah, Okay I just wanted to make sure okay. Thank you.
Sure Chris Jones.
Next question as a follow up from Chris Mcgratty with KBW. Please go ahead.
Great. Thanks.
Question on capital you guys are building capital pretty quickly part of its the decline in rates.
And it was T.I., but im interested in updated thoughts on inorganic growth Inc. last quarter, you talked about bank and non bank and wonder if there's any change or update there. Thanks.
So I mean, you can look at that two different ways, one were probably coming through the peak of the best times four for our country and it wouldn't hurt to have solid capital levels anyway, putting that aside we are also.
Making sure that we are prepared for acquisition opportunities, which is a real primary reason for that and though.
We do sorry, some noise on the line there.
We do very much want to be successful in our search for good solid franchise building acquisition opportunities. So that's that's the main reason.
What you see that the way the way. It is there are obviously other reasons. The habit, we continue to feel good about loan growth.
And no other uses of our capital so.
We think it's good.
Solid practice to have.
[noise] capital base right now for multiple reasons and Chris. This is Rob I would just urge you to look at regulatory risk based capital I know Tc, you're talking about Tc and that had a $250 million swing from a year ago because of what you said LCR and stuff.
I would just keep.
Focusing on regulatory capital ratios, which don't have the noise and yes, you know, we're sitting on capital and we're having meaningful conversations like manner said quote on fee income streams and bank M&A.
Im not going to subordinate on on.
Bank M&A I mean, I think last quarter, you talked about the efficiency of about a little bit larger deal versus the market.
Half range.
Are there commerce other meaningful conversations have you had in terms of.
Sizable bank deals in your markets.
Yeah, I can't give you real obviously any guidance on that I mean, how would you say the where we remain interested I have we have a a team of individuals.
We certainly are keeping relationships with investment banks.
We have outbound calling effort. We we're just we're active.
Got it thank you.
This concludes the question and answer session I would like to turn the conference back over to Kay Gregory for any closing remarks.
Thank you and thanks for joining us today, it's Tom can be accessed via replay at our website and as always you can contact the investor relations.
Hey.
Seven one of the work best for any follow up question.
Again, thanks for your interest and your time.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
[noise].
Okay.
[noise].