Q2 2023 Glacier Bancorp Inc Earnings Call
Good day, and thank you for standing by to the Glacier Bancorp second quarter earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During this session we need to press star one on your telephone you will then hear an automated message advising you hate this race to withdraw your question.
Please press Star one again, please be advised today's conference is being recorded I would now.
Back to you on the conference over to your Speaker today, Randy Chesler, President and CEO of Glacier Bancorp. Please go ahead.
Alright, Thank you, Kevin and good morning, and thank you for joining us today.
With me here in Kalispell. This morning is Ron Copher, our Chief Financial Officer, Don Chery, Our Chief administrative officer, Angela dose, our Chief Accounting Officer, Byron Pollan, our treasurer, and Tom Dolan, our chief credit administrator.
Like to point out that the discussion today is subject to the same forward looking considerations found on page 12 of our press release and we encourage you to review this section.
We remain very optimistic about the long term positioning of the company. Despite the lingering headwinds impacting the banking industry today.
The eight western states in which we have a presence are among the strongest economies in the U S. We have ample liquidity of high quality loan portfolio, a proven banking model and M&A expertise that is well positioned to take advantage of the market when conditions are right.
Four of our eight Western States, Idaho, Montana, Arizona, and Utah or in the top 10 states with the highest net in migration. According to St Dot Coms analysis.
Census Bureau data.
All of our eight western states.
We're in the top half of the country for highest net in migration.
And we are once again recognized by Forbes as one of the best banks in the U S.
Some business highlights for the quarter include total deposits in retail purchase agreements up 21.3 billion at quarter end increased $25 5 million or 12 basis points. During the current quarter. This momentum continues into the third quarter with deposits continuing to.
Ro.
Interest income.
$247 million in the current quarter increased $15 5 million or 7%.
The prior quarter interest income of $232 million.
Interest income in the current quarter increased 47, 7 million or <unk> 27, or 24% over the prior year second quarter.
Net income was $55 million for the current quarter.
I'm sorry.
Net income was 55 net income was 55 million for the current quarter, a decrease of $6 2 million or 10% from the prior quarter net income of $61.2 million.
Total noninterest expense of $131 million for the current quarter decreased $4 4 million or 3% over the prior quarter and increased $1 1 million or 1% over the prior year second quarter.
Noninterest income for the current quarter totaled $29 1 million, which was an increase of $1 2 million or 4% over the prior quarter, which was primarily driven by an increase in service charges and the gain on sale of residential loans.
The loan portfolio of $15 9 billion increased $436 million or 11% annualized during the current quarter.
The loan yield for the current quarter was five 1%, 2% that increased 10 basis points compared to the prior quarter increased 60 basis points from the prior year second quarter, new loan production yields for the quarter were 737%.
<unk> 41 basis points from the last quarter.
And credit quality to continue to perform at near record levels nonperforming assets as a percentage of subsidiary assets was 12 basis points in the current and prior quarter compared to 16 basis points in the prior year of second quarter net charge offs as a percentage of total loans were three basis points.
We completely paid off $335 million of higher cost borrowings at the federal home loan bank stockholder equity of $2 $92 7 billion increased $83 2 million or 3% during the first six months of the current year Tam.
Tangible book value per common share of $17 one six at the current quarter and increased two basis points from the prior quarter.
The company's liquidity position remains strong with solid core deposit customer relationships excess cash debt securities and access to diversified borrowing sources.
The company has available liquidity.
Over 15 billion, including cash borrowing capacity from the federal home loan Bank and Federal reserve facilities.
<unk> securities broker deposits and other sources.
The company declared a <unk> 33 per share dividend in the quarter. The company has declared a 153 consecutive quarterly dividends and has increased the dividend 49 times.
So we're very pleased to see the growth in deposits and repurchase agreements this quarter or 17 bank divisions, clearly demonstrated the effectiveness of our unique business model by leveraging their local customer relationships to grow deposits.
Our focus has been primarily to maintain and grow deposits with existing business and retail customers by offering attractive rate options.
This out reach was done strategically by leveraging the technology of our marketing platform.
We also kept our focus on opening new core relationship accounts totaling a net add for the quarter of over 4000, net new retail and business accounts with over $260 million in new deposits.
And we have continued to reinforce the importance of asking for a strong deposit relationship with all commercial and residential loans more than 80% of the loan customers in the quarter maintain deposits with us.
The federal Reserve's historic rate increases have changed to the positive mindset for many customers.
Our through the cycle beta at the end of the quarter for core deposits was 10% and while the beta will continue to increase until the fed stops raising rates.
We still expect to significantly outperform outperform the industry data.
Our NIM continued to show signs of pressure.
From the increasing cost of deposits and funding.
And we expect the rate of decline in the net interest margin to moderate going forward given the forecast for interest rates and the resulting impact on deposits. In addition.
Our higher loan yields on new production and renewing loans will continue to generate interest income growth.
Once again loan growth was strong across all of our divisions most of the commercial loan growth in the quarter was due to construction draws on previously approved loans a majority of the construction projects our residential housing related either multifamily our new residential.
And we are very confident in the ongoing viability of the underlying projects the borrower's ability to meet the loan requirements and the vibrant markets in which they are located.
Our capital levels are strong and growing with an estimated <unk>, one increasing 13 basis points from the prior quarter to $12 four 7%.
We believe this level of capital is more than 100 basis points greater than the average.
Of the 21 peer banks listed in our proxy.
Yes.
We remain confident.
And the dynamic western markets, we serve and our unique business model.
To continue to deliver strong results.
Thank you to the glacier team for delivering another strong performance this quarter.
So Kevin that ends my formal remarks, and I would now like you to open the line for any questions that our analysts may have.
Ladies and gentlemen, if you have a question or comment at this time. Please press star one on your telephone. If your question has been answered or you wish to move yourself from the queue. Please press star one again, we will pause for a moment, while we compile the Q&A roster.
Our first question comes from Jeff <unk> with D. A Davidson your line is open.
Thanks, Good morning.
Good morning, Jeff.
Yeah.
I guess first.
I wanted to ask about.
The timing of when <unk> advances were paid offs throughout the quarter. It looks like the average rate at $5 33, you've got about a.
Trading nearly 100 basis points cheaper on the <unk>, but trying to get a sense for when.
When that was.
Pushed off the balance sheet.
Sure.
We were happy to pay that down.
Byron watch that carefully Byron do you want to provide the timing for that Paydown, yes, I want to say, Jeff that was within June so that was the timing of the FHFA.
Got it okay. So.
Zuma, Billy you Havent seen a full quarter of that trade and I guess that would be baked in.
Randy Youre your commentary about margin continue to be pressured, but but at a declining rate.
Is that fair.
Yeah, that's fair that's correct.
Okay.
What was the.
Spot rate interest bearing deposit cost at quarter end and how does that compare to the end of March.
Yes, Jeff this is Byron the spot rate at the end of June for interest bearing deposits was 127%.
Looking back at March March 31 spot rate branches to bearing deposits 70 basis points to 57 basis point increase March 31 to June 30.
Got it okay.
And maybe if I could hop to the expense line.
Clearly.
Weber there to offset some of the top line pressure.
Wanted to see if theres anything.
One time in that $1 30, and change level and maybe just expectations for the back half of <unk>.
Do we grow off that base or any any commentary on on costs, Yes, hi, Geoff It's Brian I appreciate the question.
Nothing really one time in that $136 million.
I just want to shout out to the division of corporate Department doing a great job very mindful of hiring in.
We had a reduction that our FTE between Q1, and Q2 of 'twenty, but more importantly over the year, we had a reduction of 70 year over year and the FTE.
I appreciate their focus on that but.
The guide is.
Got it.
Take us from one to $1 32.
The $134 million for Q3 simple reason there is persistent inflationary cost pressure, even though I think we've done a very good job managing the vendors. We are still seeing pressure that I think will show up certainly in the third quarter and probably continue and until the board so pretty.
Confident in that.
Brian just to clarify that was $1 32 to $1 34 range for Q3.
Correct.
Okay.
And presumably.
Within that ballpark in Q4.
Yes, right now okay. Okay.
Okay fair enough.
And maybe just the last one for me on on the base.
Randy you mentioned that I guess any update to <unk>.
Both the kind of terminal beta expectation on.
Total beta or interest bearing beta or both.
Yes, I think we've spent a lot of time looking at that because of.
Some of the changes in the fed and Theres been a lot of.
Activity, there so byron might be.
Walk walked up to the current thinking on that sure yes.
Yes, Jeff last quarter, when we reiterated that 15% through the cycle beta on total deposits.
We noted at the time it was a good estimate but really dependent on what the fed.
If you go back to where we were in April the market was looking for a fed cut in the back half of the year and now we're looking for one maybe two more hikes.
In the back half of 'twenty three so.
Look at market expectations.
For year end fed funds is now a 100 basis points higher today than it was in April . So clearly that has had an impact on our deposit pricing outlets have given the rate environment, we do need to adjust our deposit beta assumption, we're now using 25% as our through that data through the cycle beta.
Total deposit costs.
Okay.
Got it thank you I'll step back.
One moment for our next question.
Your next question comes from Matthew Clark with Piper Sandler Your line is open.
Hey, good morning, and thanks for the question.
Good morning.
Sure.
Maybe just a little more on the NIM do you happen to have the average NIM in the month of June .
Take a look so.
Sure.
We can give you that.
Month of June the NIM was 267.
Okay. Thank you.
And then just on expenses.
I think in prior quarters, you talked about.
We're doing a lot more with less and the need for having a lot of open vacancies.
In terms of your workforce.
Has something changed I know the environment, obviously changed a little bit.
But can you just maybe update us on your thoughts on kind of the resources, you have internally and whether or not that's still the case, whether or not you need more.
Yes.
Ron May have a little extra color. So yes, we are still seeing some of that dynamic play out so in the first quarter certainly.
We had.
Less hiring than expected.
And every quarter now we do a bit of a bottoms up approach, where we go back out and CES.
The open positions are needed. So some of what's going on is some of the new technology that we've talked out I've talked about so a new commercial loan.
Origination processing system, a new account opening platform.
New construction.
Management platform have all people are getting used to that and I think as they begin to see.
Some of the efficiencies.
Starting to see that so we saw a pretty pretty good size adjustment in the first quarter. Ron you want to comment on what we're seeing now yes. It.
It just continues.
And expand a little bit further on what Randy was saying so.
Pilot divisions had great success.
Any of our model.
We don't have to forfeit.
All 17 divisions and so it's really accelerated if people are seeing the benefits and they are not staffing to the old model, where staffing to the technology improvement.
Okay, Great and then.
Last one for me.
Kind of a two part question.
Yes.
Can you give us a sense for criticized classified trends in <unk> versus <unk> and <unk>.
In the release.
And then any update on office CRE I think it's about 10% of your book and whether or not you guys have done a deep dive in and kind of what youre seeing there as well.
Yes criticized clients why we've never really.
Talk disclose that just because there's a lot of subjectivity Tom can give you a little color, though I think it's.
Very positive.
Certainly commercial real estate office, we can give you.
Maybe step back and give you the context that we look at when we think about that in.
Where we feel thats going in.
Obviously, we feel good about it given.
Kind of our markets and how we're positioned but Tom you want to comment on that.
Yes, Matthew on the criticized classified what I'll say is it's continuing to trend.
In a positive direction. So we continue to see.
Migration towards.
Less risk side of the loan portfolio.
Which.
We're certainly happy to see that we're currently near record lows just like we see on the NPA side.
And then on the office.
Obviously our portfolio.
In the office, but really matches the footprint.
Office located in a lot of foods and James communities, just like that where our divisions are located.
So compared to some other portfolios and certainly a lot of the press around the office real estate that doesn't really match our portfolio. The average loan sizes 680000.
It's split about 50, 50 owner non owner and in terms of performance.
Especially on the on.
The.
Adverse nonperforming excited.
Outperforming the rest of the portfolio. So it's really a different office segment to what we're seeing pressure in the markets.
Very limited exposure to metropolitan areas, and almost zero exposure to central business districts No high rises.
There's not a single office loan in the portfolio of about $20 million. So it's really.
Collection of small single story.
Kind of split between owner and non owner office.
Okay. Thanks again.
One moment for our next question.
Our next question comes from David Feaster with Raymond James Your line is open.
Hey, good morning, everybody.
David.
Maybe just going back to the funding side I'd be curious if you could elaborate maybe on some of the trends you saw throughout the quarter just kind of looking at the numbers. It looks like the majority of the niv outflows happening in may be a bit earlier in the quarter just curious.
How close we're on it'd be balances throughout the quarter, whether they stabilize some of the key drivers of that was the taxes was it.
More outflows from.
The failures and whether you're seeing kind of an IV balances stabilize.
Early in <unk> late in the quarter ended in early <unk> and just ultimately.
Whether that plays into the stabilization in deposit costs as well.
Yeah, So let me take a.
Shot at some of that and then Byron.
I have some more comments is we did see the.
Outflow decelerate throughout the quarter.
And so any.
And you have a lot of things.
Happening here with tax payments and some other things going on.
60 over 60% of those balances stay with us so even though they leave one category they move to another so we're retaining those within the company.
But there is given.
What's going on with the Federal reserve and now the consciousness around rates. That's obviously changed a fair amount of that dynamics around 80% of those are tied to operating accounts and so.
There were actually starting to see.
No.
The tourist season kicks in some of those accounts start to replenish.
So.
Yeah.
Feel like the biggest move there has occurred and we will probably still see some continued outflow, but just not at the same rate that we did.
And this quarter Byron do you want to.
Its cover anything there or add anything yes, David you're exactly right noninterest bearing outflows happened early in the quarter and by the time, we got to June we did see some outflow, but very very modest I'm looking at the noninterest bearing outflows bandwidth with only $31 million.
And that has carried.
Carryforward into July 15 that just a tiny bit of outflow, but very very modest.
So did see some strong trend throughout the throughout the quarter in terms of stabilizing deposit balances and and really.
Really encouraging signs that are strong.
Seasonal summer time dynamics are gaining traction here as well.
Thats, having thats happening.
The big impact on our outlook for third quarter.
And deposit costs kind of have a similar trajectory again, mostly front end weighted in kind of a stabilization in made in June is that a fair characterization.
I do think deposit cost.
The increase in deposit costs was closer to the back half of the quarter in the front half of the quarter.
Related to it.
Special pricing that we had another initiative.
Okay.
And then maybe just touching on on the.
Deposit growth side I mean, it's great to hear you talk about 4000, new accounts grow in I'm, just curious where you're seeing success.
Tracking clients, obviously, you talked about some of the seasonality.
But just curious maybe some of the deposit growth initiatives that you have in place to drive core deposits and ultimately kind of how that plays into the deposit growth going forward and when we can start paying down some of the borrowings and those higher cost wholesale deposits.
Do you think you can start doing that because that ultimately plays it kind of goes to the NIM trajectory going forward.
Yeah, Let me take the first part of that and then Byron if you want to take the thoughts around the pay down.
Couple of things David number one we're very happy that the bulk of this is bulk of the growth is existing customers and so we've always had very good relationships.
A decade of.
Being very passive of outlook reaching for deposits.
That's all changed and so the team has really done an excellent job leveraging what we already have which is the relationship with the customer to pull that and we include repos.
As part of when we include deposits, we just view that very much as a secured deposit.
And so when you look at.
Total deposits from our perspective to deposits and repurchase agreements we were up.
We did use a fair amount of technology with our marketing platform that really allows us to target within the portfolio of the customers that.
We think our.
No.
Good candidates to make an offer to in terms of increased rate.
And being careful not to cannibalize, a very very solid foundation of stable sticky deposits.
The core of the new accounts I mean, that's something we've done for decades.
<unk>.
<unk> will focus.
On bringing new accounts into the into the bank with a very attractive low barrier product for both business and retail free.
Okay.
It works very well and with the in migration numbers that I kind of touched on at the beginning we're still now at a lesser rate, but we're still opening a lot of new accounts from people from California, Texas and other other markets that's part of that 4000.
New net new accounts, we opened.
And we are.
Have an increased emphasis now on bringing deposits with those new accounts at $260 million in new deposits last thing I'll say I'll hand, it over to Byron to kind of touch on the thoughts around the pace paying down.
The debt.
Is.
But the lending team has done an excellent job with all of that with every commercial loan and residential loan really.
Asking for the deposit relationship along with that so when we took a look this quarter more than 80% of the loans may we had a deposit relationship with the customer so.
That's really the kind of a three pronged strategy that will continue to pursue that's worked very well for us.
I'll like that strategy will be continue to be very very effective.
Byron do you want to touch on the Paydown thoughts sure.
Yes, David I do think that we're going to have an opportunity this quarter to chip away at our at our wholesale brokered deposit balance.
We of course already paid off our <unk> borrowings so they were made.
But there as we can but.
The extent that we're able to see some some of these early signs in July .
Reasonable trends in.
And the good flows that we've seen so far month to date in July if those are able to stick and continue through the rest of the summer as we expect they will that will give us the flexibility to pay down some of our of our brokerage.
Okay.
That's helpful.
And maybe last one from me just touching on the growth side.
It sounds like the majority of the CRE growth was construction and you guys had kind of alluded to that before.
I'm just curious maybe the post of your clients at this point how is demand exclusive of those construction fundings in the pipeline and where new loan yields and just what's your thoughts on growth going forward and your appetite for credit.
Yes. This is Tom I can touch on that.
So overall demand.
Certainly we're not seeing the same level of topline volume given the higher rates.
The fact that were more selective in our credit appetite I mean, we've always been selective for decades, and very conservative probably more so even now.
So.
As Randy mentioned, a lot of the a lot of the growth in the first quarter and the second quarter with these two.
Sure.
Draws on existing construction.
Loans I would expect it to decelerate in the next couple of quarters, we'll probably see a little bit of slowing in Q3 further slowing in Q4 as tailwind from those construction draws start to abate and those projects are finished that are rolled in the perm.
And then.
And of course, as I mentioned with the lower top end volume will probably.
Probably see overall net loan growth start to slow.
In the late half of this year and certainly into 2004.
That's helpful. Thank you.
One moment for our next question.
Okay.
Our next question comes from Andrew <unk> with Stephens. Your line is open.
Hey, good morning.
Andrew.
Maybe just for buyer and really quick do you have the spot cost on the customer repurchase agreements.
The end of June quarter.
Yes.
For repo accounts at June 30 was $2 99.
Okay.
And then just.
I'm trying to weigh through the last of the margin here.
Yes.
Level of compression sequentially should slow from here I guess would you still anticipate margin compression in the third quarter versus the June margin of $2 67.
From what.
Look it's going to be pretty close I think it's going to be pretty close to $2 67.
That June number should.
From what we're looking at on the on the full quarter expectations for.
Third quarter should be pretty close to that same level, okay got it.
And then just.
I think you guys mentioned $230 million of new client deposit growth earlier in the call can you just talk about what the incremental funding or deposit costs is related to that $230 million or just more broadly how the incremental deposit cost compares to.
New loan production yields are I think are in the low sevens.
A lot of the.
A portion of the growth as you can tell from our balance sheet is coming from TD.
TD portfolio and I wanted to say the average rate.
Our new issue Cds in the second quarter was between.
Southern close to like 470 475.
What I want to say that.
The new rate.
Okay.
The other thing I'd say is.
A good portion of those balances are just in the.
Transaction accounts now savings and those spot rates on those are.
Under <unk> 50 under.
Okay.
50 basis points.
Got it understood.
And then maybe for Ron.
The operating expense line this quarter, specifically the comp and employee benefits was there any material change in that.
Deferred origination costs this quarter that might have helped bring that expense or the comp line down.
Can you quantify.
Very very little impact from that because we we.
Grew loans in the first quarter and the second there wasn't any appreciable difference in that and that growth rate that would have an impact.
Any degree on the deferred compensation side of it.
Understood and then maybe one one last one for me if I could sneak it in just.
It looks like the dividend payout ratio was kind of approaching 70% this quarter and it sounds like there will be a little more margin compression I, just maybe wanted to get a sense for the.
Comparability with the dividend or is that today.
Yes, I think we're very comfortable with it.
We've got very strong capital, it's an important part of the strategy.
We think.
The margin compression over the longer term is a shorter term problem that will right itself in 'twenty four.
So we're very comfortable with that.
Those levels.
Okay. Thanks for taking the questions.
One moment for our next question.
Our next question comes from Brandon <unk> with <unk>. Your line is open.
Hey, good morning, Darren and Brendan.
So all the NIM commentary is helpful.
NII perspective, and with this maybe one to two more fed rate hikes in the back half of this year.
Do you think NII could stabilize going forward.
It may be assuming next year.
The funds are stable.
Yes, one of the things that I would point you to is.
As the fed I think once it becomes clear that the fed has done.
That's when.
You'll see higher margin in.
Stabilized so I think it is really dependent on how far they go.
<unk> two how long do they is it.
They extended pause.
Higher for longer. These are all considerations that are going to have an impact on our on our margin.
Yes.
And do you think there is.
A quarter or two lag after a pause to reach stabilization or do you think it'll be pretty pretty.
Immediate.
Sure.
We could we could see a little lag there could be there could be a quarter's worth of lag.
That before we start to see.
Yes.
Stabilization, so I think Thats I think thats, a fair way to think about it.
Okay.
And then with loan repricing average loan yields were up 10 basis points sequentially.
And I know you have a lot of fixed rate and adjust for ray repricing coming online, but is that a good kind of 10 basis points a quarter do you think is that a good trajectory as far as what you can see from our benefit from loan yield pricing.
Yes, Brandon, it's Ron I think we'll do better than the 10 basis points.
Weighed on that this quarter, what the construction draws were getting higher rates, but some of those loans were made first.
<unk> second quarter of last year, and so they are still advancing but I expect better than 10 basis points.
Okay.
And then just lastly, there was a.
A decent uptick in.
Service charges and wondering if there's anything onetime in nature driving that just more context around it.
No that's.
That's a function of usage and seasonality so no.
Typically what we see in this starting in the second quarter.
Little bit of a pickup.
Okay, and that's a good base to go off going forward correct.
I think so yes.
Okay. That's all thanks for taking my questions.
You bet.
One moment for our next question.
Our next question comes from Kelly Motta with <unk>. Your line is open.
Hi, good morning, Thanks, so much for the question.
I apologize about that.
And dead horse about deposits and margin, but if I could kind of do it.
When it comes I appreciate all the color Ron about.
Sorry about that.
Deposit beta, but when it comes to your commentary about deposit betas.
Just wondering what that assumes.
Sorry.
As a percentage of total deposits obviously.
There's been a lot of focus on that lately.
Run off across the industry.
Yes, I think we have we will continue to see a little bit.
Runoff in the noninterest bearing as we've said that pace is going to we think materially slow, but I think we'll maintain at concentration greater than 30%.
Noninterest bearing.
Got it.
Thanks for that.
And then.
And at the commentary around kind of the outlook there just trying to get a sense.
Is that.
Assuming we get one or two more rate hikes is that a good estimate of where margin troughs based on kind of just putting together everything or is there still more pressure off of that.
Kevin I know Theres, a lot of moving parts of the <unk>.
Paydown that happened during the last question for today is fully reflected in that <unk> 67.
Yes.
Terms of hour.
The rate outlook that we're using to model and make some estimates around forward looking margin. We do have two more hikes in there so.
The third quarter will be influenced by one more hike that fourth quarter would be influenced by.
Potentially a second.
That's just an estimate that we're using in our own model.
Okay, so under that.
Anticipated additional pressure and kind of where.
Assuming that that's just for actually that great follow.
Do you have a date yet at that level and the timing of when margin would trough.
That does put additional pressure on our fourth quarter margin relative to the third quarter were at trough would probably be.
First the second quarter of next year, assuming that two hikes.
Doug.
Got it.
And then so.
Seems to imply that there could be some relief thereafter.
Sure sure.
Don.
The kind of rounding out the margin question for me there do you have a sense of where margins could exit 2020.
Under that sort of setup assumption, given what you're seeing on the funding side.
Paul.
Your line is higher yes.
Sorry, we haven't looked that far out.
But we'll have to we'll have to dig into that and then get back to you on that.
Got it got it and I guess finally last one for me I know you.
You mentioned that brokered funding that you put on during the quarter and mentioned that there might be some opportunity to pay some of that down.
Coming quarter, depending on if you get the seasonal inflows can you just kind of remind us the cadence of when that brokered funding matures.
And how we should expect.
Either that.
I guess the roll off of that is as we get through the next year or two yes.
Yes, most of that will which will mature within the quarter.
Most of the issuance with one to three months.
With that we did dabble a little bit of a six month maturity, but I would say.
The lion's share of the $475 million will mature in the third quarter and give us an opportunity to it.
Valuate do we roll it or do we allow some run off to happen based on where we are at that point in the quarter with with core deposit growth I think I think the core deposit flows will determine how much we lever.
Alright. Thank you so much further questions I'll step back.
Youre welcome.
One moment for our next question.
Our next question comes from Tim Coffey with Janney Montgomery Scott Your line is open.
Thank you good morning, everybody.
Alright, yes, Randy I had a question about kind of asset levels.
By the end of this year, if we look back at <unk> on a year over year basis.
Is it more likely to be flat to slightly up or flat to slightly down.
Total total assets.
Yeah, just the size of the balance sheet.
It should be.
Slightly up.
Given our loan growth and expectations on deposits.
Okay.
And then.
You heard me again, what the cash flow is coming off the securities portfolio.
Yes interest and principal right now is about $300 million a quarter.
Okay.
No big change from previous quarter.
And then on the construction loans that Youre doing.
A lot of housing stuff and there is there any read through to your your mortgage origination and sale business line.
Is there any what was the question.
Is there any read through.
So the mortgage business.
Do you mean a connection between.
Construction loan and then ultimate.
Residential mortgage.
Yes, there is more supply on market are you seeing more volume in the mortgage business.
So.
Yes, we were up this quarter. So you saw the gain on mortgages increase so.
We have more locks this quarter than the prior quarter were happy to see that.
You know that.
Is leveling off and it's really supply driven there is just not enough.
Housing.
New construction is a big.
Part of.
What we see people moving into now there's just not a lot of resale of existing homes because the people are hanging on to their low.
Fixed rate that they have so.
That's what we see happening now so our expectation on that gain is probably stay right in that range, maybe a little a little softness to it depending on the supply.
Okay.
Great. Those are my questions. Thank you very much for your time.
Sure.
And I'm not showing any further questions at this time I'd like to turn the call back over to Randy for any closing remarks, alright. Thank you, Kevin and just want to thank everybody for dialing in today.
Going on in the industry. So I appreciate you taking the time and have a great great Friday and a great weekend. Thank you.
Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.
Okay.
Okay.
Okay.
Yes.
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Okay.