Q1 2023 Heartland Financial USA Inc. Earnings Call
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Okay.
Yeah.
Greetings and welcome to H E. L. F 2023 first quarter conference call.
It's an H T L. L announces first quarter financial results and hopefully had a chance to read through the earnings release, that's available on H E. L. F. 's website at H T L. L Dot com.
With us today from management are to sleep, President and C E O.
Mkay Executive Vice President and Chief Financial Officer, and Nathan Jones, Executive Vice President and Chief Credit Officer.
Management will provide a summary of the quarter and then we will open the call to your questions before we begin the presentation I would like to remind everyone that some of the information provided today falls under the guidelines support looking statements as defined by the Securities and Exchange Commission.
As part of these guidelines any.
Payments made during this presentation concerning the company's hopes beliefs expectations and predictions of the future are forward looking statements and actual results could differ materially from those projected.
Additional information on these factors is included from time to time in the call.
<unk> 10-K, and 10-Q filings, which may be obtained in the companies on the SEC's website.
I will now turn the call over to Mr. Bruce Lee H D. L <unk> President and CEO . Please go ahead.
Thank you Wanda.
Afternoon, everyone. This is Bruce Lee President and CEO .
Welcome to H T O F. 'twenty two 'twenty three first quarter earnings conference call. I. Appreciate you joining us today as we discuss our solid performance amidst a challenging environment in detail the strength and stability our customers communities employees and shareholders can do.
<unk>.
For the next few minutes I'll discuss H P. O S highlights for the first quarter and then turn the call over to Bryan Mckeag, Chief Financial Officer for more details on our performance and financials.
Also joining us today is Nathan Jones, Chief Credit Officer, who can answer questions regarding the stable credit quality across our portfolios.
Last week, our board of directors approved a quarterly cash dividend of <unk> 30 per share on the company's common stock payable on May 26 2023.
<unk> also approved a dividend of $175 per series E preferred stock, which results in a dividend of 43.75 cents per depositary share payable on July 17th 2023.
For more than 40 years H T O F has increased or maintained our quarterly common dividend. This reflects our strength performance and confidence in our strategies and ongoing results.
H T O F has diversified lines of business and geographies.
Combined with our local leadership and talent, we are intentionally built to withstand industry and economic pressures.
Challenging times are an opportunity to serve and reassure our customers.
In mid March we proactively reached out to the top 100 customers in each of our markets more than 1000 in total.
To answer their questions and reassess their banking needs.
This outreach was greatly appreciate it.
Reinforce the importance of our local leadership and local roots.
It underscored the breath of our customers, we serve and the strategic diversity of our geographic footprint.
I want to thank our bank presidents and relationship managers for all their great work with our customers during a very challenging time.
We're deepening relationships driving new business and well positioned for continued growth.
In the first quarter net income available to common stockholders was $58 million.
And earnings per share of $1 19.
We strengthened our balance sheet and increased our borrowing capacity by $1 7 billion to a total of $2 8 billion with less than 2 million outstanding.
Our capital ratios, including all unrealized gains and losses as of March 31.
We exceeded all well capitalized regulatory ratio guidelines.
Bryan will go into more details.
In spite of the challenges in the first quarter, we added more than 300, new commercial relationships and more than 8000, new consumer accounts.
Our delinquency ratio remained low at 10 basis points.
Our efficiency ratio improved 749 basis points or 12% from a year ago.
To 57.16.
In total assets remained flat at 22 billion.
Start with deposits.
H T O F banks have a diverse and granular deposit base.
As a result of our strategic diversification our.
Our customer deposits are diversified by both geography and industry with no industry concentration higher than 10% across our portfolios.
Overall total deposits for the quarter grew slightly to $17 7 billion, an increase of $168 million or 1% from the linked quarter.
And 65% of total balances are insured or collateralized.
From the linked quarter.
Total customer deposits decreased 4% with a mix shift into interest bearing accounts.
While we maintain a favorable deposit mix customer demand accounts decreased from 37% to 35%.
In the first quarter, we launched a successful consumer deposit campaign, we opened more than 8000, new consumer accounts in the quarter.
With more than 3000 in March alone.
That's the most new consumer accounts in any quarter or month in the last five years.
Positive trends have continued into April and customer deposits are stabilizing for commercial small business and consumer customers.
We expect total customer deposits to grow $150 million in the second quarter.
Turning to loans in the first quarter commercial and AG loans grew $85 million.
An increase of 1% from the linked quarter, and $1 2 billion or 14% from a year ago COO.
Commercial loans grew $195 million, an increase of 2% from the linked quarter and.
And $1 3 billion or 13% from a year ago as expected growth was slower in the first quarter is up to $100 million had been pulled forward into the fourth quarter.
Our AG portfolio decreased 110 million or 12% from the linked quarter.
Customers pay down credit lines and delayed utilization, primarily due to weather impacts in California.
In the first quarter, we saw a commercial loan growth in eight of our 11 markets.
We added more than 300, new commercial relationships, representing $210 million in funded loans and $51 million in new deposits.
On average new originations were of higher credit quality than the overall portfolio as measured by risk ratings and credit scores and 75% of these loans have variable rate structures.
Our commercial pipeline remains strong at over $1 billion, we expect total loan growth of $175 million to $200 million in the second quarter.
Which we expect to substantially fund through customer deposit growth.
Our consumer and residential loan portfolios decreased $18 million or 1% from the linked quarter.
We expect consumer loans to be flat to down $10 million in the second quarter.
Turning to key credit metrics, our disciplined credit approach is delivering stable credit quality across our portfolios and continues to serve us well.
Delinquency ratio is 10 basis points nonperforming loans represented 51 basis points of total loans nonperforming assets as a percentage of total assets remained low at 33 basis points.
Non pass rated loans increased slightly to $4 seven 6% from 4.67% in the linked quarter.
Lastly, in the first quarter, we had net loan recoveries of $1 million.
Despite all the headwinds we are executing our core strategies and delivering loan growth stays.
Stable credit quality, a lower efficiency ratio and we're acquiring new customers.
Bank charter consolidation continues to go smoothly.
So far we've successfully consolidated seven of our 11 banks. The project continues on schedule and on budget and we expect to finish charter consolidation early in the fourth quarter.
We enhanced the products and services offered by our retirement plan services business through our partnership with July business services July specializes in technology and brings more than 25 years of experience to our clients and plan participants.
By selling the record keeping and administration services.
Both firms will be stronger together as july's technology will enhance the customer experience.
<unk> retains investment management oversight and participant education and support.
This transaction is expected to be completed in record keeping services transitioned in the second quarter.
Our strategy and accomplishments continued to be recognized locally and nationally.
Dubuque Bank and trust was named one of the best places to work by the Dubuque Telegraph Harold.
Michael <unk>, President and CEO of citywide banks was named a 2023, Colorado tightened 100 for demonstrating exceptional leadership vision and passion.
And for the seventh consecutive year H T. O F has been recognized by Forbes as one of America's best banks for 2023.
The ranking is based on profitability growth credit quality and efficiency.
H Tls employees have earned this recognition each year with their dedication and commitment to delivering strength insight and growth to our customers communities shareholders and each other.
Their hard work and dedication have consistently grown and strengthened our company <unk>.
Together, we are H T O F.
I'll now turn the call over to Bryan Mckeag, Chief Financial Officer for more details on our performance and financials.
Thanks, Bruce and good afternoon.
As Bruce just described we had another busy quarter in which <unk> reported earnings per share of $1 19.
Loan growth of just under $70 million and continued stable clean credit performance.
Included in this quarter's results were three notable items first $1 $1 million of losses on the sale of write down of assets, which were primarily facilities related.
Second charter consolidation restructure costs of $1 7 million and third security losses of $1 1 million.
Together these items decreased pretax income by more than $3 9 million and earnings per share by <unk> <unk>.
Before I go into more detail I want to remind everyone that our first quarter earnings release and Investor presentations are both available in the IR section of <unk> website.
I'll start my comments with the provision for credit losses, which totaled $3 1 million or 300000 less than last quarter.
This quarter the provision reflects our continued stable healthy credit performance.
And consistent with last quarter incorporates an economic outlook that anticipates, a moderate recession developing over the next 12 months.
The provision also benefited from $1 million of net loan recoveries.
In addition, as Bruce mentioned, our delinquencies ticked up just slightly but remained very low at 10 basis points of loans and nonperforming loans were flat compared to last quarter.
At quarter end, the allowance for lending related credit losses, which includes both the allowance for credit losses on loans and unfunded commitments.
Increased $4 1 million to $133 8 million or one 6% of total loans compared to $1, one 3% last quarter.
Moving to the balance sheet, Bruce already covered loans and deposits so I'll start with investments.
Investments remained flat at $7 billion, representing 35% of assets with a tax equivalent yield of 367% and.
And we'll generate cash flows exceeding $1 3 billion over the next 12 months with approximately 240 million next quarter.
The fair value Mark on the available for sale Securities portfolio.
Continued to improve to a negative $568 million.
That's a $67 million or 10% improvement over last quarter.
The relatively small held to maturity portfolio of 830 or $32 million or.
Or 12% of investments has an unrecorded negative fair value Mark of $16 million, which is an improvement from $53 million last quarter.
We continued to actively manage the portfolio by taking several actions during the quarter.
First we utilized nearly $120 million of cash flow this quarter to fund loans and pay down borrowings.
And second we increased security pledging at the fed by one 5 billion, leaving $3 8 billion or 57% of our available for sale securities Unpledged at quarter end.
And lastly, we repositioned our hedges to provide protection for unrealized security losses against the impact of higher mid to long term rates.
Moving to borrowings total borrowings declined 284 million to $464 million or two 3% of total assets.
The reduction was primarily in fed.
<unk> borrowings, which were reduced to just under $2 million outstanding at quarter end.
Are available and unused fed <unk> borrowing capacity at quarter end stood at $2 8 billion, that's a $1 7 billion increase over last quarter.
The increase is the result of paying down existing borrowings and pledging additional securities to the fed.
To summarize our liquidity profile at quarter end first we have $1 3 billion of cash flow coming off of our securities portfolio over the next 12 months with $240 million next quarter.
We have a low level of outstanding borrowings and $2 8 billion of available capacity with the fed and <unk>.
Third we continue to have several fed fund borrowing lines and brokered and broker deposit sources that remain open and available.
Fourth our deposit base as Bruce mentioned is granular and well diversified with over 65% of balances either insured or collateralized.
Fifth our loan to deposit ratio of 65% in.
When removing all wholesale deposits.
Deposits it remains low at 77%.
Six we have cash and unpledged available for sale securities totaling over $4 billion.
And lastly, the holding company cash cash position of $284 million is three five times, our current annualized interest and dividend payments and.
In addition, our dividend payout rate is relatively low at 25% of current earnings per share.
With regards to capital regulatory capital ratios remain strong with common equity tier one at just over 11, 5% and total risk base of nearly 15%.
Adjusted for unrealized losses on our investments the ratio remained the ratios remained above well capitalized levels at approximately seven 5% and 11, 2% respectively.
The tangible common equity ratio increased 51 basis points to five 7% and 2% at quarter end.
The rise in market value of investments this quarter contributed 25 basis points of the increase.
Moving to the income statement starting with revenue.
Net interest income totaled $152 $2 million, this quarter, which was $13 million lower than the prior quarter and the net interest margin on a tax equivalent basis fell 25 basis points this quarter to 240%.
The main drivers of the decreases were.
Two fewer days in the quarter compared to last quarter, resulting in $3 $7 million of the decrease.
A decline of $1 $1 million in fees and purchase accounting accretion, which also reduced net interest margin by two basis points.
A shift in deposit balances from lower costing non maturity deposits to much higher costing time deposits, primarily brokered Cds reduced net income by nearly $5 million and decreased NIM by 12 basis points.
Higher deposit betas than loan betas, reflecting the significant increase in deposit competition that began in late 2022 accounts for the remaining decrease in net interest income and net interest margin.
And finally, we exited the quarter with adjusted NIM of running at 335%.
Noninterest income of $30 million this quarter was unchanged from the prior quarter.
Excluding security losses, and core noninterest income excluding securities losses.
Core noninterest income was $30 9 million, which exceeded our expectation of $28 million to $29 million.
Shifting to expenses noninterest expenses totaled $111 million this quarter Thats down $6 2 million from last quarter.
Excluding restructuring tax credit costs and asset gains and losses, the run rate of recurring operating expenses decreased $1 4 million to $107 7 million.
Coming in slightly lower than our forecast of $108 million to $109 million.
Looking ahead to the rest of 2023, <unk> expects to see loan growth of $150 million to $200 million or 2% per quarter in customer deposit growth of $150 million or 1% per quarter.
Achieving these loan and deposit growth expectations should enable the bulk of the investment cash flow to be available to decrease wholesale deposits.
Net interest income for Q2 is expected to increase modestly over the first quarter and the net interest margin is expected to stabilize near the March run rate in the mid <unk> on a tax equivalent basis.
Provision for credit losses are projected to range from $3 million to $5 million per quarter.
Obviously declines in economic conditions or projections could impact future provisions. If a worst then moderate recession develops or credit quality metrics began to decline.
Core noninterest income excluding investment gains or losses is expected to be 30% to $31 million next quarter.
Recurring operating expenses are expected to be in the $108 million to $109 million range next quarter.
Charter consolidation restructuring costs are forecasted to be 352 $5 million to $3 million next quarter.
In addition, we expect the total remaining cost to complete the project will approach $8 million over the next three quarters.
And finally, we believe a tax rate of 23%, excluding new tax credits as a reasonable run rate.
And with that I'll turn the call over to Bruce for question and answer sessions.
You wander we can now open up the line for quest.
Questions.
Thank you.
Ladies and gentlemen, we will now conduct a question and answer session to ask a question you May Press Star one on your telephone you would then here automated message advising your head is right now and wait for your name to equal.
So withdraw your question press Star one again please.
Please standby, while we compile the Q&A roster.
Okay.
Our first question comes from the line of Damon Delmonte with <unk>. Your line is open.
Hey, good afternoon, guys hope everybody is doing well and thanks for taking my questions.
I just wanted to start off on the margin and the outlook for the margin.
Maybe Bryan you could give a little perspective on what kind of where you see your ear.
Your full cycle beta is going to I think.
Just on the jump this quarter.
Kind of at about 28%.
So kind of cycle to date beta where do you see that shaking out over the remainder of this year.
Yes, I think youre looking at probably Youre, excluding DDA when you do that right Damon everybody calculates at a little bit.
Yes, that's pretty close to what I've got calculated for that same piece, we tend to look at it with DDA and but I think you're in the ballpark for cycle.
Cycle.
Our normal cycle betas are around.
30% to 35% on just the.
Just the non DBA component so.
I think they could move up just a little bit although.
Feels like they are topping out it feels like.
Unless rates start to go back up the fed moves and some things happen. It feels like we're in a fairly decent spot right now.
Things should sort of hold where they are.
That's how it feels today.
Got it okay.
And when you talk about the <unk>.
<unk> deposit growth in the coming quarters.
This is generally going to be driven from the wholesale side or is this from your the retail side.
Know that my comments Damon we're strictly.
It excluded any wholesale growth that was all consumer small business or commercial.
Got it okay, our existing or new or existing customers.
Okay, Great and then.
What are you able to quantify the impact of the sale of the benefit administration and record keeping business.
From a kind of fee income side.
Yes, so what I would say Dave is that will close here in Q2 I.
I would say we will see them.
Moderate gain.
Not huge for us.
It was around there is an earn out there some things side.
You don't have an exact number to share with everybody, but it'll be modest and then.
What we see going forward is that the fees will go down a little bit but also our expenses go down so that should be on a run rate basis.
Fairly close to an offset.
So I mean, we didn't do this for an economic reason we did this for the benefit of our customers to provide them a better platform both are.
Sponsors and participants better technology and Theres also some additional products that we can sell on this platform that we didn't have on our current platform.
Got it okay.
And then I guess lastly on the loan growth outlook.
And do you expect kind of a pickup in the AG portfolio.
I know Bruce you had commented that lower line utilization and kind of a delayed.
Delayed need of funds because of the weather.
Do you expect that to kind of ramp back up here in the second quarter.
Yes, we absolutely do it was just really timing we saw significant increase in the fourth quarter.
We knew we would have decreased we didn't think it would be quite as significant as it was at $110 million.
Because there are about three weeks behind we were just out in California, two weeks ago and the planning season, there because of some of the flooding.
About three weeks behind so, yes, we expect that to come back.
Got it okay. That's all that I had for now thanks.
Thank you.
Ladies my background next question.
Okay.
Our next question comes from the line of Jeff Lewis with D. A Davidson your line is open.
Thanks, Good afternoon.
Great.
Bruce just wanted to get back to your.
Appreciate the customer deposit growth so.
As the use of wholesale deposits.
It's going to kind of swing with how successful you are on the customer growth or do you intend to kind of.
Stopped or install that growth or shrink.
How do you approach the wholesale deposit side.
Yes, great question, Geoff so in a perfect world.
We'll grow our deposits of $150 million from our exists from customers.
Loans will be $175 million to $200 million.
We will utilize the cash flow off our investment portfolio to.
Fund that stub piece on the loan side and then we use the rest of that cash flow to pay down wholesale funding.
Got it okay.
Yes.
Fair enough.
And then just jumping over to the.
Whatever trying to get a sense of your optimized overhead ratio whatever youre sort of depicting at just over 2% is that is that approaching the trough, but I just wanted to kind of check in with us.
Finished the charter consolidation and it's it's taking a little more form.
Yes.
Is that kind of near term and maybe as we exit the year kind of the target and maybe theres moving pieces, there, but just trying to get at orientation for.
How far are we on is there in other words is there sort of a trough optimization.
When you get to.
Yes, I think this is Bryan I think that 2014 that you see on page 18, I think we'd love to see that get down to 210 or below.
As we kind of get through the charter consolidation we've done some other things as you noted to improve efficiency I think the $2 14, if I if you take.
When we started the charter consolidation, we're running at 222, maybe about $2 24.
And to $20 million on.
On $20 billion is 10 basis points. So we should get at least to the $2 14, we're at and better with all the other things, including charter consolidation that we've been working on.
Okay that makes sense.
I appreciate it.
This is sort of a follow up on the I just wanted to make sure. So I think the guide Bryan.
Operating expense in fee income that's inclusive.
The Rps sale or.
You haven't totally quantified that and as you said there'll be when there is adjustment it will be offset or just trying to see if thats baked into the guide.
Yes, I think I think we can.
Again, the two net off of each other so if I didn't get all of it out of the noninterest income I, probably didnt get it all out of the noninterest expense. So the two will kind of about the same number if I missed that in my guidance.
I would say I, probably didnt have that all in because it won't be for a full quarter and everything so as we go forward.
And get that true run rate I can refine that for you.
Got it but close enough it sounds like it's again okay.
Alright, well thank you.
Thanks, Jeff.
Thank you please standby Brian next question.
Our next question comes from the line of Terry Mcevoy with Stephens. Your line is open.
Hi, good afternoon. Thanks for taking my questions. Maybe just start on deposits could you maybe talk about deposit activity across your footprint, particularly in March and I'm. Just curious if you have any comments on California, and maybe if there was outsized.
Consumer deposit openings in that specific statement market.
Yes, Terry when we think about.
Our entire footprint all of our 11 markets.
We did see in our more urban markets.
Higher.
Kind of a higher run off of deposits. The rest of the footprint was was much less and in California, We actually grew balances during the quarter.
And it was primarily because on the consumer side.
Thanks for that and then maybe Bryan a question for you could you just talk about kind of the Aoc I kind of burn down over the next couple of years, just as we think about building out kind of tangible capital and book value and just I'm curious on that topic, what was the cost in and process to kind of hedge higher rates and the value of the.
Our securities portfolio that you mentioned in your prepared remarks.
I'll see if I can I, probably don't have all of that here at the top of my head or in my notes, but.
If rates kind of hang where they are or.
What we were protecting within the hedge was for middle term rates, which is where our investment securities are kind of tied.
Tied to from a duration standpoint so.
We were able to put this hedge on to actually reduce the duration effect on that portfolio by I think Zach Tony close to a year. So.
We think that protects.
On our worst side, which as those rates go up right and then we have deterioration in our.
Our TCE ratio because of that <unk>. So that was the reason for putting a hedge on.
Yes, I think if if rates and we can just rollout and the cash flow comes out.
It will improve Terry I don't have the exact burned down.
Exactly but.
In terms of how the gain or loss will come come out but.
I think where we saw the 10%, 10% you won't see quite that unless rates come down, but youll see that roll off in that number should get better.
Not an exact Bryan and then yeah go ahead.
If anything better than perfect for you.
Okay. Thanks for that and then I think Nathan was on the call a question for for him I mean, we're all kind of focused on office CRE and.
And the exposure there.
But from your perspective is that where we should be focused as outsiders looking into the bank and maybe what other parts of that kind of non owner occupied CRE.
Portfolio are you moderate monitoring a bit more closely.
Yes, absolutely Terry.
I think office is the one that has everybody heightened we certainly do a lot of research and analysis on ourselves constantly looking at it.
Feel pretty good about it we really don't have much of construction there.
And have a pretty low percentage overall from a concentration.
And this of course, it's strongly underwritten.
And so far has performed well.
Lot of the stuff that we're seeing today from a market perspective, with the kind of core and a lot of our underwriting as we kind of stress.
Plan for potential refinance risk.
So we feel like pretty good position, but expanding that that question. That's kind of where you asked about what are the other things are we looking at in kind of early paying focus on where we.
Retail and hospitality are two others that we keep a high focus on and then also if theres any possible contagion into other areas like kind of like a medical office space, but we continue to watch it and really keep it ahead of just talking with our customers getting out there and make sure we understand where they're at and trying to understand where the potential contagion could go.
Great. Thanks, everyone.
Thank you.
Ladies sandbox, where our next question.
Our next question comes from Andrew Liesch with Piper Sandler Your line is open.
Hey, good afternoon, everyone.
Just to go back to deposits and just the trends here in the quarter.
<unk> recognized.
Recognize a group expecting some growth here.
So the mix of growth.
And to be similar to what we saw in the last quarter with demand accounts down in Cds up.
Then.
I guess, what are you guys expecting on the other interest bearing accounts.
I think we will see demand up a little bit because of the.
New relationships that we.
That are in our pipeline on the commercial side I think on the.
Consumer side, it will probably skew a little more towards interest bearing accounts.
Got it.
A fair amount of seasonality in the first quarter in commercial demand accounts as we normally have between one and two.
And so we do expect some of that to build backup.
Gotcha, Alright, and then so.
Tumor campaigns I suspect that was largely in Cds, how many are these campaigns still ongoing.
And is that where you expect most of the.
And I guess, how long do you expect to run these campaigns or is this going to be a new part of the funding going forward.
We're going to continue to run the campaign through the second quarter and I think we may not be running a campaign, but we will definitely keep our advertising spend higher than it has been historically because it's been so successful.
Got you.
It's both.
Android is both aimed at transaction accounts as well as Cds and we have both okay working those.
Got you.
You've covered all my other questions I'll step back thanks.
Thank you.
Please standby Brian next question.
Our next question comes from the line of David Long with Raymond James Your line is open.
Good afternoon, everyone and thanks for taking my question.
I wanted to ask you about noninterest bearing deposits and Herc has run anywhere from 32% to 40% noninterest bearing to total deposits for the last several years in the.
The events of the last several weeks I think are causing both businesses and consumers to review their deposit accounts. I mean, there is definitely a trend moving towards interest bearing accounts and look we've been in a zero rate environment for the last 15 years on and off or at least most of the time.
Absent a couple of years.
Ken Ken the noninterest bearing for Ht off drop as far as 20 or 25% of your concentration of deposits.
David Great question.
I guess the short answer is I don't.
Don't think so and let me give you some of the details about the commercial deposit declined for the quarter because as I mentioned earlier, we normally have 1% to 2% seasonal declines.
And we've looked at all the movement in the first quarter and.
And approximately 50%.
The decrease on the commercial side and most of this came out of the.
<unk>, we're just business operations normal business activity.
Other 15, 16% where tax distributions.
Sub asks distributions.
And then if you lumped.
People, taking money out for alternative investments going somewhere for higher interest rates or safety concerns.
That would be about 25%.
With safety concerns being the smallest piece that was only 4% of the deposit movement.
So when I say that that's why I don't believe that we can get as low as you are referencing in our core activity is to generate new relationships and we've been able to do it now for I think seven quarters in a row on the commercial side.
And all the deposits come with it.
So I feel pretty good it may go down into the really low thirty's, but I don't see it getting into the low twenty's.
Okay got it thank you Bruce I appreciate that.
Color, that's all I have thanks.
Thank you.
Sure.
I'm showing no further questions in the queue I would now like to turn the call back over to Mr. Li for closing remarks.
Thank you to Wanda.
In closing we had a solid first quarter March was challenging, but we stayed focused on our commitment to serving our customers communities and each other.
We continue to add new commercial small business and consumer customers grow loans and deposits improved.
<unk> customer experience it's maintained.
Stable credit quality and drive efficiency.
The combination of <unk> financial strength.
Geographic footprint.
Diverse customer base local leadership and talent.
<unk> us to withstand market volatility and economic headwinds.
We're open for business and driving growth, while continuing to serve our customers and communities.
You for joining us our next quarterly earnings call will be in late July and have a good evening.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
Okay.
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Okay.
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