Q2 2023 CrossFirst Bankshares Inc Earnings Call
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Speaker 2: Good day and welcome to the Craft First Bank Shares Inc. second quarter 2023 earnings conference call. All participants will be in a listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by zero.
Speaker 2: After today's presentation, there will be an opportunity to ask questions.
Speaker 2: To ask a question, you may press star then 1 on a touch-tone phone. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Mike Bailey, Chief Accounting Officer and Head of Investor Relations. Please go ahead. Thank you.
Speaker 3: Good morning and welcome to Cross First Bank Share's second quarter 2023 earnings conference call.
Speaker 3: Before we begin, please be aware this call will include forward-looking statements, including statements about our business plans, expansion and growth opportunities, expected acquisition of Canyon Bank Corporation, Inc., and our future financial performance. These comments are based on our current expectations and assumptions and are subject to risks and uncertainties that could cause...
Speaker 3: in our earnings release and our other filings with the SEC.
Speaker 3: We may also refer to adjusted or non-GAAP financial measures. A reconciliation of non-GAAP financial measures to GAAP financial measures can be found in our earnings release. For more information, visit GAAP.gov
Speaker 3: These non-GAAP financial measures are not meant to be a substitute for or superior to financial measures prepared in accordance with GAAP.
Speaker 3: Our presentation will include prepared remarks from Mike Maddox, President and CEO of CrossFirst Bank Shares, Randy Rapp, President of CrossFirst Bank, and Ben Clouse, CFO of CrossFirst Bank Shares.
Speaker 3: At the conclusion of our prepared remarks, our operator Betsy will facilitate a Q&A session.
Speaker 3: At this time, I would like to turn the call over to Mike, who will begin on slide 4 of the presentation available on our website and filed with our earnings release. Mike? Mike. No.
Speaker 4: Thank you, Mike. I look forward to this opportunity to share an update on our second quarter results.
Speaker 4: It has been an unprecedented and challenging time for the banking industry.
Speaker 4: but despite all the recent turmoil.
Speaker 4: We continue to focus on delivering value to our clients, employees, shareholders, and communities.
Speaker 4: Deposit stability and liquidity are top of mind for investors, and our financial results reflect the benefits of our relationship-driven business model.
Speaker 4: balanced business mix, high quality client base.
Speaker 4: desirable growing markets, and the relentless efforts of our extraordinary team.
Speaker 4: During the past quarter, we delivered a consistent level of earnings.
Speaker 4: we delivered a consistent level of earnings, grew our capital.
Speaker 4: managed our growth, and optimized our expense base, all focused toward delivering long-term value and making our company even stronger.
Speaker 4: We will continue to take a measured approach to expenses to drive efficiency improvement and gain additional operating leverage as we grow.
Speaker 4: Our team delivered adjusted net income of $17.3 million, or 35 cents per share for the quarter.
Speaker 4: Margin was compressed as cost of funds increased higher than our earning asset yields.
Speaker 4: As the Federal Reserve continues to rein in inflation,
Speaker 4: We expect that margin will continue to be pressured.
Speaker 4: However, we remain optimistic that we will see margins stabilize.
Speaker 4: given our largely variable loan portfolio and expectations for slower asset growth the rest of this year.
Speaker 4: As expected, our loan growth moderated this quarter as the economy slows and we become even more selective on new lending opportunities.
Speaker 4: Our deposit base remains stable despite the volatility in the industry.
Speaker 4: Our focus on relationship banking and building strong customer relationships continues to serve us well. We hit a nice increase in fee-based revenue this quarter led by our new SBA lending team.
Speaker 4: a highlight of the acquisition we completed last year.
Speaker 4: While our loan and deposit growth have historically been very strong, strategically we continue to focus on fee income generation to diversify our revenue and enhance our profitability.
Speaker 4: We are monitoring our loan portfolio for signs of stress and are pleased with the stability of our credit quality this quarter.
Speaker 4: We also continue to build reserves, and Randy will cover more details on credit in his remarks.
Speaker 4: Our team remains focused on serving our clients, monitoring credit quality, and executing on our strategic initiatives. We started the year with a successful implementation of our digital banking platform.
Speaker 4: Completing the system conversion for our Colorado and New Mexico acquisition.
and immediately following entered into a definitive agreement with Canyon Community Bank Corporation and its wholly owned subsidiary, Canyon Community Bank in Tucson, Arizona. I am excited to share that we have received regulatory approval to close on the acquisition of Canyon. We are working towards closing and planning for integration and look forward to welcoming you to the next meeting.
goals in Arizona.
In June , we opened our fourth bank in the Dallas area.
conveniently located in Preston Center, where we see an opportunity to build relationships and grow deposits.
Since we entered the Texas market in 2016,
We continue to expand our presence to serve the greater metropolitan area, which also includes bank locations in Frisco and Fort Worth.
We will continue to work towards scaling and optimizing the investments we have made and remain focused on driving long-term profitability and shareholder return.
Our focus continues to be on efficiency and driving operating leverage.
We have made the investments in people, technology, and locations necessary to drive strong continued organic growth.
We are working through a challenging time in the overall banking industry, but I am confident in our team's ability to deliver for our clients while building franchise value.
Optimizing our investments is important, and we made progress in the second quarter that should provide for continued earnings improvement in the quarters to come.
And now, I'd like to turn the call over to our President of Cross First Bank, Randy Rapp.
Thanks Mike, and good morning everyone. In Q2, we continued to intentionally slow loan growth and remain highly focused on deposit generation and fee income. We operated for a full quarter with our new digital banking platform and a full quarter integrated with our Colorado and New Mexico teams.
which includes SBA and residential mortgage.
We are actively monitoring our loan portfolio and market conditions to assess the impact of higher interest rates on our borrowers.
Turning to Q2 highlights, we slowed our loan growth activity, but still reported total loan growth of $149 million.
a growth rate of almost 3% for the quarter, or 11% on an annualized basis.
The increase was balanced across C&I, owner-occupied real estate, and energy.
Year-to-date, loans have increased 8%, with the growth well diversified across our lending areas of focus.
During the quarter, we continued to see growth from areas we have recently made investments in talent, including restaurant finance, energy, Phoenix, and the Colorado markets.
Although we had strong loan activity, we are strictly adhering to our underwriting standards, incorporating the impact of higher interest rate environment and continued economic uncertainty.
Approximately 70% of the loan portfolio is on floating rates that continues to reprice as market rates increase, and we have completed the transition of nearly all transactions tied to a LIBOR index.
We continue to see opportunities to price loans at widened spreads while maintaining our underwriting standards.
Average CNI line utilization for the quarter was 46%, consistent with the prior quarter, and portfolio churn increased slightly and is now at the historical average level.
We expect portfolio churn to increase slightly over the next several quarters.
Our loan portfolio continues to remain diversified with a 42% concentration in commercial real estate and 45% concentration in C&I and owner-occupied real estate. Energy exposure is now 233 million, or 4% of the total portfolio.
This portfolio remains approximately 60% weighted to oil, with the remaining exposure primarily in natural gas.
Turning to slide 6, there remains good diversity within each of those portfolios with the highest CRE property type, industrial, accounting for 17% of total CRE exposure, and the largest industry segment in CNI being manufacturing at 11% of CNI exposure.
Total office exposure is $312 million, or 5% of total loans.
The average office loan is $7 million and the largest is $25 million.
The average loan to value is 58% and the majority of this portfolio is suburban office.
Although we follow our strongest sponsors to other markets, the majority of the exposure is in footprint, centered in North Texas, Kansas City, and Colorado. For the quarter, deposits increased 4.5% to 6.1 billion, about 263 million from the previous quarter.
Ben will cover additional deposit portfolio statistics in his remarks.
Client deposit generation, with an emphasis on demand deposits, remains a key area of focus for our company.
We are executing a multifaceted strategy that consists of targeted calling efforts in our markets and lines of business.
Continued investment in treasury management products and personnel.
investments in new locations like Preston Center in Dallas.
increasing deposit penetration in newer markets like Phoenix and Denver, and enhanced incentive compensation tied directly to deposit generation, while evaluating potential new deposit verticals. In short, our growth to this point has been built on the foundation of relationship banking, and that remains a strength going forward.
Moving to credit highlights.
On slide 7, for Q2, we reported an increase in non-performing assets of $2.1 million to $13.3 million, resulting in a non-performing asset to total asset ratio of 0.19%.
The increase was due primarily to two CNI credits moving to non-performing.
The non-performing portfolio is primarily CNI with very minimal energy exposure.
This ratio remains down from 0.54% from the same period in 2022.
During the quarter, we sold the only remaining ORE property and now have no ORE.
Classified assets to capital plus combined reserves ended Q2 at 9.6%, which is relatively flat compared to the end of Q1.
For the quarter, we reported net charge-offs of $603,000, resulting in a net charge-off rate of 4 basis points on an annualized basis and 7 basis points on a trailing 12-month basis.
On slide 7, at quarter end, we reported an allowance for credit loss to total loan ratio of 1.17%.
and combined allowance for credit loss and reserve for unfunded commitments of 1.3%.
For the quarter, we reported provision expense of $2.6 million, resulting in a provision to charge-off rate of 438%.
Provision was slightly lower than Q1, driven primarily by lower loan growth during the quarter, and improved credit metrics.
With a total ACL of $68 million, our current ACL to non-performing loan ratio is 508%.
we remain highly focused on maintaining good credit metrics moving forward.
We continue to heavily scrutinize the loan portfolio to assess the impact of higher interest rates and inflation on our clients.
We are confident in our underwriting standards and proven sponsors who have significant equity contributions, but could see some grade migration in certain sectors of the CRE portfolio as many projects are faced with higher interest rates.
operating costs, and property taxes.
We expect our loan growth rate to continue to moderate in the last half of 2023 and will remain focused on deposit generation and fee income growth.
I will now turn the call over to Ben to cover the financial results in more detail. Ben? Okay.
Thanks, Randy, and good morning, everyone.
Gap net income this quarter was $16 million, or 33 cents per share, which included some acquisition and severance costs.
Adjusted net income was $17.3 million or 35 cents per share.
Both GAAP and adjusted net income were consistent with the prior quarter as margin pressure was offset by lower provision and non-interest expenses as well as higher non-interest income.
Our adjusted return on average assets was 1%, and adjusted return on average equity was 10.7%.
We acknowledged the profitability compression from the lower margin and took several expense actions in the quarter to drive higher profitability in the future.
Net interest income on a fully tax equivalent basis declined $3.7 million or 6% from the first quarter.
due to higher cost of funds outpacing the benefits of higher average earning assets, higher loan yields, and one additional day.
Average earning assets increased 222 million compared to the prior quarter.
The yield on loans increased 31 basis points due to repricing as well as higher yields on new loans.
The cost of funds increased 75 basis points due to continued pressure on deposits.
as well as the mix of deposits shifting into higher cost products as anticipated.
As I noted last quarter, we had the benefit of some additional non-interest bearing deposits through most of the first quarter that were deployed by clients.
The change in those balances was a contributor to the decline in net interest income.
Fully tax equivalent net interest margin narrowed 38 basis points compared to the prior quarter to 3.27%. We expect margin to remain in a range of 3.2 to 3.35% for the full year.
Our balance sheet is only slightly sensitive through the anticipated 25 to 50 basis point rate moves expected this year.
And with lower anticipated loan growth, we don't expect as great of a need to add higher cost deposits going forward.
We updated our presentation of loan categories this quarter to better reflect how we manage the portfolios and better align with peers. Turning to slide 9, our percentage of demand deposits declined slightly this quarter and was 15% of total deposits at quarter end.
The balance of non-interest bearing deposits held up fairly well, with the decline in the ratio partially attributable to the growth of our balance sheet.
As I noted, we had a level of elevated demand deposits through most of the first quarter, but we continue to experience good client retention with no significant client losses this quarter.
Our total cost of funds was 3.41% for the quarter.
Our total non-maturity deposit beta against rate increases through the second quarter remained about 65 in line with our expectations.
Our deposit base remained consistent with the prior quarter in terms of diversification and composition.
Our effective uninsured deposits percentage improved slightly from 35% to 32% when considering pass-through accounts.
Our deposit concentration across the top 25 clients also improved to 20% this quarter from 23%.
As we have managed through this rate cycle, we have realized the majority of our deposit beta expectations in our results already.
While we acknowledge competition for deposits will persist, we believe we are nearing the peak of deposit pricing, allowing us to defend our NIM as we move forward from here.
Non-interest income was $5.8 million for the quarter, increasing 31%, or $1.4 million from first quarter.
The primary drivers were gains on SBA loan sales and growth of fee income from both the acquisition and our legacy markets.
The market was not favorable for SBA loan sales heading into 2023, but it has improved.
and we are moving back to an originate and cell model with our enhanced SBA capabilities.
Moving to slide 12, excluding acquisition and severance expenses in both the first and second quarters, non-interest expense declined $800,000 or 2%.
Going forward, we are focused on driving additional efficiencies and gaining operating leverage. At the end of the quarter, we reduced headcount by about 5% and have also identified additional anticipated net savings in non-interest expense. Accordingly, we anticipate non-interest expenses to be in a range of thirty-five percent and a total of about $3.5 million.
equity totaled $651 million with the increase being driven by earnings, partially offset by an increase in the unrealized loss on available for sale securities.
As of quarter end, we are well capitalized under all capital ratios. We were able to advance our goal of building capital this quarter as we saw moderating asset growth, strong earnings, and an anticipated decline in unfunded commitments.
We are continuing to work toward 11% total risk-based capital and 10% CET1 ratios.
Our liquidity remains strong, consistent with the prior quarter, with some modest improvement to 36% of assets. As we outlined on slide 13, we have significant liquidity of approximately $2.6 billion from on and off balance sheet sources.
In addition to our cash on the balance sheet, our 100% AFS investment portfolio includes $282 million that can be pledged to the FHLB and we have an additional $169 million of securities we could sell today at a net gain.
We also have multiple sources of additional off-balance sheet liquidity, including capacity at the FHLB, Federal Reserve, Fed Funds, and other wholesale funding sources totaling approximately $1.5 billion.
Slide 14 outlines the composition of our investment portfolio. We have continued to increase the liquidity in our portfolio with an ongoing, moderate shift in the ratio of munis.
Lastly, as Mike mentioned, we anticipate closing the acquisition of Canyon in the third quarter and are actively working on post-closing integration efforts.
We expect the deal will provide additional liquidity, continued partnership opportunity with the seller, and earnings accretion of 2 to 3 cents on a run rate basis.
The consideration for this deal is expected to be less than book value with about 1% tangible book value dilution and an anticipated earnback of about a year.
It will add about $200 million in assets and will have a minimal impact on our capital ratios.
In summary for the quarter, we shifted our cost base to fit a lower growth environment.
continued to see steady credit quality, and held our client deposit stable, leading to a consistent level of earnings in a tough environment. Operator, we are now ready to begin the question-and-answer portion of the call. We will now begin the question-and-answer session.
please press star then 2.
In the interest of time, please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster.
The first question today comes from Brady Gailey with KBW. Please go ahead. The first question comes from Brady Gailey with KBW.
The first question today comes from Brady Gailey with KBW. Please go ahead. Thanks. Good morning, guys.
Morning Brady. Morning. If you look in fee income the gain on the sale of loans was up pretty nicely. I think I heard Ben say you've shifted SBA to an originate and sell model now. So that 1.2 million is that was that like a really good quarter or is that a good run rate? Like how do you think about your gain on the sale loans going forward?
Good morning Brady, it's Ben. That, you're correct about 1.2 million. That was a really good quarter with a little bit of pent-up demand and our expectation would be about half of that on a run rate basis for the next couple of quarters.
Okay, all right. And then I heard – I know energy is not huge at Crossverse. I think it's only like 4% of loans. And then I think I heard it's 60% oil, 40% nat gas. And we are seeing some lenders to the nat gas space per year.
you know that they're seeing some credit quality issues. Are y'all, I know that's a pretty small percent of your loan book especially when you're looking just at natural gas. Are y'all seeing any sort of credit weakness there?
Hey Brady, this is Randy. No, we're really not. I mean the energy portfolio is credit metrics are holding in very well and one thing that I think you'll see in our portfolio is a little bit lower advanced rates, a little higher hedging percentage to try and take some of that price movement off the table.
So, you know, Brady, we're really not seeing migration there.
Okay and then you know growth is slowing so you guys are seeing you know increases in your capital ratios. I think you're only you know like 30 basis points away from your targeted 11% total risk base and about 50 basis points away from your targeted 10% common equity tier one.
So as you get closer to those targets, do you start to consider a share buyback, just given the stock is trading at roughly 90% of tangible book value? Yeah, Brady, I think that's a good question. And we have an authorized buyback plan. And we have a plan that's going to be a little bit more than just a buyback plan. And we're going to be looking at a buyback plan that's going to be a little bit more than just a buyback plan. And we're going to be looking at a buyback plan
And as you said, I mean, right now we're focused on building capital and being fairly conservative. But, you know, once we get to kind of some of those levels, we will certainly consider that. And if our stock continues to trade at a discounted rate, we will take advantage of that.
Okay, all right great. Thanks for the color
Thank you. The next question comes from Michael Rose with Raymond Jeans. Please go ahead. Hey, good morning, guys. Thanks for taking my questions. Just when I go back.
Good morning. Just wanted to go back to some of the commentary around the margin, kind of square it with kind of the guidance for the year. So appreciate the revised outlook for the margin. I understand there's a lot of moving pieces, but the range is still pretty wide, and we have two quarters left for the year. You did talk about betas reaching terminal values here in the relatively short term.
Michael it's Ben. So our model I would tell you is in the upper end of that range on a static balance sheet. So the biggest question mark would be can we hold our current deposit base and mix and then as you well know.
DDA is incredibly important. And so we had some clients deploy some DDA at the very end of the first quarter. We haven't seen DDA, frankly, move a whole lot this whole quarter, which is great and would support us being toward the upper end of our range. I'll let Mike or Randy comment further on.
One growth of course, which is the other piece of that equation, but as we've said we really expect that to moderate and the the other impact that will have on NIM is we won't need to be as aggressive on adding deposits at the top end of the price range.
note on NIM, I feel like our DDA balances have stabilized. As Ben talked about, we had two large customers who had exits of their businesses in the first quarter.
We had a lot of DDA sitting there. We knew that was going to transition out into other investments and it did. So that changed our mix a bit in the second quarter. But I do think our DDA balances are stabilized.
I think some of our loan yields will catch up as we have renewals and refinancing. So I anticipate our loan yields ought to improve through the rest of the year. So I'm hopeful that we've kind of seen a bottoming of margin and that we may be able to get it going back the same direction. The other thing is,
I feel like we're getting closer to the end of the rate hiking cycle.
And I think banks will be less, there'll be less pressure on raising deposit costs. So I'm hopeful we can continue to keep our beta below where it's at today.
And then I might call this Randy, finish it out on the loan yield side. Now as we're being more selective and slowing our loan growth, we really are focusing on spread. And where you saw spreads dip into the mid to low 2s, you're now seeing those in the low to mid 3s. And so the loans we're adding to the portfolio now are at wider spreads than we've seen the last.
you've identified. I just wanted to get a sense for, you know, color around what those are and what the magnitude could be both on a gross and then, you know, on a net basis just I assume some of the savings will be redeployed in the franchise. Thanks. Yeah, so Michael, all of that's incorporated in the guidance I gave the 34 to 35 million range. We obviously do have some costs that are
selective on training, travel, meeting costs, those sort of things, and trying to be as efficient as we possibly can. So it's really across those categories. You know, going the other direction, we have a little bit higher FDIC assessment rate that we got at the beginning of the year.
35 million is all inclusive there. I think we had mentioned previously the compensation run rate adjustment was about $4 million on a run rate basis. We'll, of course, only obtain $2 million of that savings in the second half of the year, but.
advantage of the operating leverage opportunity we have in our new markets. But we're also going to be very, very prudent on expenses. We are very, very committed to getting that efficiency ratio down to a run rate in the low, low 50s by the end of the year, and we think we'll get there. Very helpful. Maybe just one final one.
would be for that once the deal closes over the next couple quarters, thanks. Yes, we anticipate closing here in the early part of August . As you said, we got regulatory approval and we're lined up to do that. Our modeled expectation, of course, we haven't done a final,
essentially what our expectation would be out of the gate, Michael.
Okay, great. Thanks for taking my questions.
Okay, great. Thanks for taking my questions. Thank you, Michael.
The next question comes from Matt Olney with Steven. Please go ahead. Thanks. Good morning. Good morning.
I want to focus on the long growth side. I appreciate Randy's comments on the pipelines.
Being more selective at this point, one of the things Randy mentioned was commentary around the portfolio churn. It sounds like that churn has moved higher a little bit in the second quarter, now in line with historical levels. I think you also mentioned expectations for this to increase over the next few quarters. I'm looking for any additional color around that commentary.
Ta more than mad Randy. We expect the churn to increase a bit in the CRE book. We're seeing the capital markets in that space a little more active, some of the refinance activity picking up, and we just know thatfrom.
We have some visibility when clients call and say, hey, we're scheduled to pay this transaction off in 30 days, 60 days, a little more visibility into what that looks like moving forward. And we just see a little bit more of that activity than we had seen previously this year.
And just staying with that Randy, any specific loan types or any kind of themes you can pick up on as far as the improved activity in that market?
The multifamily market seems to be pretty active. The agencies are, you know, have some good programs out there and so, you know, some of the multifamily is churning a bit faster than it has so far this year.
to be pretty active. The agencies are, you know, have some good programs out there and so, you know, some of the multifamily is churning a bit faster than it has so far this year. Okay.
Appreciate that. And then I guess, on the margin, appreciate the commentary you guys put out there previously. Any more color on the incremental funding costs you're seeing today as you grow the loan book? We will be talking about that today.
deposit specials or any color there? Well I'll start. This is Ben and Randy or Mike please chime in. You know we're really focused on money market which is primarily what our client base utilizes. We're obviously very very commercial. We have done some CDs.
or beginning rate out of the gate at the end of June on our current balance sheet is about 350 for for incremental deposits and as I said with a lower level of balance sheet growth we don't anticipate as great of a need to add deposits at the higher cost
some CD specials that have been successful, making sure we're competitive in money market rates. First half of the year, we saw some rotation into the ICS product. That growth and rotation has slowed. And you know, in the quarter we opened net 1100 new deposit accounts.
So, there's multiple channels there to look at as we grow our deposit base.
Okay, that's helpful. Appreciate the commentary. Then just lastly for me on the Canyon deal, I think you mentioned that EPS impact upon closing something around two or three cents on an annualized basis, I assume. I thought we were looking for something previously a little bit north of that originally.
any color on Canyon overall as far as their recent performance or recent fundamental trends? Thanks. Yeah, they have remained very consistent. Their balance sheet has not changed with any significance.
That's a very conservative number on their current balance sheet. I'll let Mike and Randy talk about the market a little bit further, but we think there's very significant opportunity for expansion within the Tucson market itself, just given their historical business model. Matt, I'd just say that's a pretty conservative number.
We've been conservative on cost takeouts and we've been very conservative on growth. We think we'll do better than that but you know that's where we're modeling it today and I think there's a great opportunity in Tucson. Tucson's a million people and
I think it's going to be a good banking market for us to compete in and that markets seeing a lot of growth. So I think with our increased capacity and products that we'll be able to grow there faster than we're modeling. I hope so. I hope it does everything
I think it's going to be a good banking market for us to compete in. And that market's seeing a lot of growth. So I think with our increased capacity and products that we'll be able to grow there faster than we're modeling. Okay. All right. That's all for me. Thanks, guys.
Thanks, ma'am. As a reminder, if you wish to ask a question, please press star then 1 to be joined into the question queue.
The next question comes from Andrew Leish with Piper Sandler. Please go ahead. Hey, everyone. Thanks for taking the question. I just wanted to touch base on that wholesale funding that was added late in the quarter. I'm just curious where – what rates those were added at and maybe if there's any full quarter effect on that, that could affect the margin here.
referring to as funding for us on the top end of the pricing scale. We don't anticipate those will increase in the remainder of the year and will be steady or lower.
Got it. You also mentioned that long spreads though up to the low three so.
I mean if I use this funding are you saying maybe that you're getting loans yielding in the low eight at this point?
Andrew, this is Randy. Yeah, that's correct. We're trying to make sure that the new loan production has an 8 in front of it.
Got it. Tell me if you're slowing growth a little bit, loans in the low eights, but then incremental funding may not be at the low fives anymore. Let's see.
presumably a lot less margin compression that we saw in the last quarter, which I think you were alluding to earlier, but am I looking at the math the right way?
Yeah, you better way we see it Andrew. Yeah, got it. Got it. Um, you've covered all my other questions. I will step back. Thanks
see it Andrew yeah got it got it um you've covered all my other questions I will step back thanks all right thank you
This concludes our question and answer session. I would like to turn the conference back over to Mike Maddox, President and CEO , for any closing remarks.
Well I just want to thank everybody for joining us this morning. We feel really good about our quarter amongst a lot of challenging backdrop in the macro environment but really proud of our continued growth, our work on efficiency and operating leverage and our continued improvement and profitability.
And also, credit quality continues to be a highlight for us. So, really proud of our team and the job everybody has done, and really, really feel good about where we're positioned for the third and fourth quarter. So, thank you everybody for joining us, and have a great day. The conference is now concluded.
Thank you for attending today's presentation. You may now disconnect.