Q3 2023 Amerant Bancorp Inc Earnings Call

October 20, 2023

Okay.

Speaker 1: Good day and thank you for standing by. Welcome to the Amerit Bank Corp third quarter 2023 earnings conference call. At this time, all participants are in a listen only mode. After the speakers.

Good day, and thank you for standing by.

Welcome to the Marin Bancorp's third quarter 2023 earnings conference call.

At this time all participants are in a listen only mode.

After the speaker's presentation, there will be a question and answer session.

Speaker 1: To ask a question during the session, you'll need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised.

To ask a question during the session you'll need to press star one one on your telephone you.

You will then hear an automated message advising your hand is raised two.

Speaker 1: To withdraw your question, please press star 1, 1 again. Please be advised that today's conference is adjourned.

To withdraw your question. Please press star one one again.

Please be advised that today's conference is being recorded.

Speaker 1: I would now like to hand the conference over to your host today, Laura Rossi, Head of Investor Relations and Sustainability. Please go ahead. Okay.

I would now like to hand, the conference over to your host today, Laura Rossi head of Investor Relations and sustainability. Please go ahead.

Speaker 2: Thank you, Liz. Good morning, everyone, and thank you for joining us to review Amaranth Bancorp's third quarter 2023 results.

Thank you Liz good.

Morning, everyone and thank you for joining us to review rooms, Bancorp's third quarter 2023 resold.

Speaker 2: On today's call are Jerry Plosh, our Chairman and Chief Executive Officer, and Shari Markham-Leron, our Executive Vice President and Chief Financial Officer.

On today's call are Jerry plush, our chairman and Chief Executive Officer, and Charlie you might come to Don <unk>, Our executive Vice President and Chief Financial Officer.

Speaker 2: As we begin, please note that discussions on today's call contain forward-looking statements within the meaning of the Securities Exchange Act. In addition, references will also be made through NonPP fly-to-non Somethingiferousential Did you

We begin please note that discussions on todays call contain forward looking statements within the meaning of the Securities Exchange Act. In addition references will also be made to non-GAAP financial measures.

Speaker 2: Please refer to the company's earnings release for a statement regarding for looking statement as well as for information and reconfiliation of non- GAAP financial measures to GAAP measures .

Please refer to the company's earnings release for a statement regarding forward looking statements as well as for information a reconciliation of non-GAAP financial measures to GAAP measures.

Speaker 2: I will now turn it over to our terminal CEO , Jerry.

I will now turn it over to our chairman and CEO Jerry.

Speaker 3: Thank you, Laura. Good morning, everyone, and thank you for joining Ameren's third quarter 2023 earnings call. We're happy to be here today to update everyone on the continued progress we made during the period.

Thank you Laura good morning, everyone and thank you for joining <unk> third quarter 2023 earnings call. We're happy to be here today to update everyone. On the continued progress we made during the period.

Speaker 3: So during the third quarter, we focused on improving balance sheet composition, which included the continued prioritization of organic deposit growth, which enabled us to reduce higher cost institutional deposits, which are highly rate sensitive and therefore subject to flight risk. We've provided more granular information on the sources and type of deposits in today's earnings presentation, and I'll go into that in detail very shortly.

So during the third quarter, we focused on improving balance sheet composition, which included continued prioritization of organic deposit growth, which enabled us to reduce higher cost institutional deposits, which are highly rate sensitive and therefore subject to flight risk. We've provided more granular information on the sources and types of deposits in today's.

Earnings presentation, and I'll go into that in detail very shortly.

Speaker 3: We also entered into an agreement to sell the single largest credit exposure in our discontinued New York City portfolio. And you'll see that in loans held for sale. And that closing is scheduled to take place today.

We also entered into an agreement to sell the single largest credit exposure in our discontinued New York City portfolio and Youll see that in loans held for sale and that closing is scheduled to take place today.

We continue to work on further reductions in nonperforming assets and we've now reached the marketing stage without real estate owned.

Speaker 3: We also spent considerable time and energy on the upcoming core conversion in November , and I'll provide more information on that shortly as well.

We also spent considerable time and energy on the upcoming core conversion in November and I'll provide more information on that shortly as well.

Speaker 3: So, while this was not an asset size growth quarter like recent periods, as loans and deposits overall were relatively flat quarter to quarter, and in fact, the key driver of our asset size decrease this quarter was from our using $100 million in excess cash on hand to pay down advance.

So while this was not an asset size growth quarter like recent periods as loans and deposits overall were relatively flat quarter to quarter and in fact, the key driver of our asset size decrease this quarter was from our using a $100 million in excess cash on hand to pay down advances.

Speaker 3: We made a lot of progress on many fronts, which we will cover as we review the upcoming slides. And as an aside, which Sherry will cover later in her remarks, the loan is a positive pipeline for the fourth quarter, are very strong, and we expect to be back in growth mode in 4Q. And in fact, we've already booked 90 million in loan production month to date, which has resulted in a 71 million dollar net increase in loans as of yesterday.

We made a lot of progress on many fronts, which we will cover as we review the upcoming slides and as an aside which Jerry will cover later in her remarks, the loan to deposit pipelines for the fourth quarter are very strong and we expect to be back in growth mode in <unk>.

And in fact, we've already booked $90 million in loan production month to date, which has resulted in a $71 million net increase in loans as of yesterday.

Speaker 3: So let's turn to slide three, and here we provide a summary of our third quarter highlights. Net income attributable to the company was $22.1 million compared to the $7.3 million in 2Q23. This increase was primarily driven by lower provision for credit losses in 3Q, as the provision recorded in 2Q was substantially higher.

So, let's turn to slide three and here, we provide a summary of our third quarter highlights net income attributable to the company was $22 1 million compared to $7 3 million and <unk> 23. This increase was primarily driven by lower provision for credit losses with <unk> as the provision recorded in Q2 was.

Speaker 3: The net interest margin was 3.57% compared to the 3.83% we reported last quarter. A few basis points lower than we originally expected. This was driven primarily than higher than expected funding costs and lower loan originations as we continue to prioritize relationship centric originations and not renew or pursue non-depository finance.

We hire them.

The net interest margin was 357% compared to the 383% we reported last quarter, a few basis points lower than we originally expected. This was driven primarily by higher than expected funding costs and lower loan originations as we continue to prioritize relationship centric originations and not renew.

Operator: Good day, and thank you for standing by.

Laura Rossi: Welcome to the Amerant Bancorp 3rd quarter 2023 earnings conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded.

New were pursued non depository financing.

Speaker 3: So again, back to asset size, we decreased 174 million compared to Q23. Our gross loans were 7.1 billion compared to 7.2 billion last quarter, a decrease of 74 million. And our total deposits were 7.5 billion, relatively flat to the 7.6 billion last quarter.

So again back to asset size, we decreased $174 million compared to two 223, our gross loans were $7 1 billion compared to $7 2 billion last quarter, a decrease of $74 million and our total deposits were $7 5 billion relatively flat to the seven 6 billion last quarter.

Laura Rossi: I would now like to hand the conference over to your host today, Laura Rossi, Head of Investor Relations and Sustainability. Please go ahead. Thank you, Liz.

Speaker 3: Federal Home Loan Bank advances were $595 million, a decrease of $175 million, or 23%, compared to the $770 million in 2Q due to prepayments we made in 3Q23 as part of our asked hit and liability.

Federal home loan bank advances were $595 million, a decrease of $175 million or 23% compared to the $770 million in Q2 due to prepayments we made in <unk> 'twenty three as part of our asset liability management.

Laura Rossi: Good morning, everyone, and thank you for joining us to review Amerant Bancorp 3rd quarter 2023 results.

Jerry Plush: Good morning, everyone, and thank you for joining us to review Amerant Bancorp 3rd quarter 2023 results.

Laura Rossi: On today's call, our Gary Plush, our Chairman and Chief Executive Officer, and Sharymar Kanledon, our Executive Officer, and our Vice President and Chief Financial Officer. As we begin, please note that discussions on today's call contain forward-looking statements within the meaning of the Securities Extinct Act. In addition, references will also be made to non-gov financial measures. Please refer to the company's earnings release for a statement regarding forward-looking statements, as well as for information and reconciliation of non-gov financial measures to gut measures.

Jerry Plush: On today's call, our Gary Plush, our Chairman and Chief Executive Officer, and Sharymar Kanledon, our Executive Officer, and our Vice President and Chief Financial Officer. As we begin, please note that discussions on today's call contain forward-looking statements within the meaning of the Securities Extinct Act. In addition, references will also be made to non-gov financial measures.

Speaker 3: The company's capital levels continue to be strong and well in excess of the minimum regulatory requirements to be considered well capitalized as of September 30th, 2023. Our tangible common equity ratio remains strong at 7.44% as of September 30th. As we classify the majority of our investment portfolio is available for sale, the mark to market on this portfolio is deducted from tangible common equity. We'll get into more detail regarding capital and capital ratios shortly.

The company's capital levels continue to be strong and well in excess of the minimum regulatory requirements to be considered well capitalized as of September 32023, our tangible common equity ratio remains strong at 744% as of September 30th as we classify the majority of our investment portfolio was available.

For sale the Mark to market on this portfolio is deducted from tangible common equity will get into more detail regarding capital in our capital ratio shortly.

Jerry Plush: Please refer to the company's earnings release for a statement regarding forward-looking statements, as well as for information and reconciliation of non-gov financial measures to gut measures.

Speaker 3: Also during the quarter, we paid out the previously announced cash quarterly dividend of $0.09 for share on August 31st of 2023.

Also during the quarter, we paid out the previously announced cash quarterly dividend of <unk> <unk> per share on August 31 of 2023.

Gerald Plush: I will now turn it over to our Chairman and CEO, Jerry Sush. Thank you, Laura. Good morning, everyone, and thank you for joining Amerant's 3rd quarter 2023 earnings call. We're happy to be here today to update everyone on the continued progress we made during the period. During the 3rd quarter, we focused on improving balance sheet composition, which included the continued prioritization of organic deposit growth, which enabled us to reduce higher cost institutional deposits, which are highly rate-sensitive and therefore subject to flight risk.

Jerry Plush: I will now turn it over to our Chairman and CEO, Jerry Sush. Thank you, Laura. Good morning, everyone, and thank you for joining Amerant's 3rd quarter 2023 earnings call. We're happy to be here today to update everyone on the continued progress we made during the period. During the 3rd quarter, we focused on improving balance sheet composition, which included the continued prioritization of organic deposit growth, which enabled us to reduce higher cost institutional deposits, which are highly rate-sensitive and therefore subject to flight risk.

Speaker 3: And then lastly, regarding stock repurchases, as you know, we have a $25 million Class A Common Stock Share repurchase program in place.

And then lastly regarding stock repurchases as you know we have a $25 million of class a common stock share repurchase program in place and year to date, we've repurchased 260000 shares for $5 million at an average price of $19 per share or nine times price to book value availability remaining under this.

Speaker 3: And year to date, we've repurchased 260,000 shares for 5 million at an average price of $19 per share, or at 0.9 times price to book value. Availability remaining under this program was 20 million as of quarter.

Program was $20 million as of quarter end.

Speaker 3: So let's turn to slide four and take a look at what happened in shares outstanding during the quarter. And here you can see that during 3-2, we continue to prudently use our 25 million share repurchase program. And we repurchase 142,000 shares of common stock at an average price of $19.00.

Let's turn to slide four and take a look at what happened in shares outstanding during the quarter.

Gerald Plush: We've provided more granular information on the sources and types of deposits in today's earnings presentation, and I'll go into that in detail very shortly. We also entered into an agreement to sell the single largest credit exposure in our discontinued New York City portfolio, and you'll see that in loans held for sale, and that's closing this schedule to take place today. We continue to work on further reductions in non-performing assets, and we've now reached the marketing stage with our real estate owned.

Jerry Plush: We've provided more granular information on the sources and types of deposits in today's earnings presentation, and I'll go into that in detail very shortly. We also entered into an agreement to sell the single largest credit exposure in our discontinued New York City portfolio, and you'll see that in loans held for sale, and that's closing this schedule to take place today. We continue to work on further reductions in non-performing assets, and we've now reached the marketing stage with our real estate owned.

And here you can see that during <unk>, we continued to prudently use our $25 million share repurchase program and we repurchased 142000 shares of common stock at an average price of $19.

Speaker 3: We can transition now to slide five, and we'll show you our capital position relative to regulatory minimum.

We can transition now to slide five and we'll show you our capital position relative to regulatory minimums.

Speaker 3: As of 3Q2023, our total capital ratio ended at 12.7% and our CET one was 10.3%. Our tangible common equity ratio, which includes 106 million of AOCI resulting from the after-tax change in the valuation of our portfolio was 7.4%.

As of <unk> 2023, our total capital ratio ended at 12, 7% at our CET. One was 10, 3% our tangible common equity ratio, which includes $106 million of OCI, resulting from the after tax change in the valuation of our portfolio was 744%.

Gerald Plush: We also spent considerable time and energy on the upcoming core conversion in November, and I'll provide more information on that shortly as well. So while this was not an asset size growth quarter like recent periods, as loans and deposits overall were relatively flat quarter to quarter, and in fact, the key driver of our asset size decreased this quarter was from our using 100 million in excess cash on hand to pay down advances.

Jerry Plush: We also spent considerable time and energy on the upcoming core conversion in November, and I'll provide more information on that shortly as well. So while this was not an asset size growth quarter like recent periods, as loans and deposits overall were relatively flat quarter to quarter, and in fact, the key driver of our asset size decreased this quarter was from our using 100 million in excess cash on hand to pay down advances.

Speaker 3: Regarding our tangible common equity ratio, we also show here for reference purposes the impact of adding to 26 million in unrealized losses from our held and maturity portfolio and what that does to TCE, which would result in an adjusted tangible capital ratio, it was 7.2%, a relatively small impact, it's included. And tangible book value per share also adjusted for held and maturity stood at 19.9 as a quarter rent.

Regarding our tangible common equity ratio. We also show here for reference purposes, the impact of adding the $26 million in unrealized losses from our held to maturity portfolio and what that does to TCE, which would result in an adjusted tangible capital ratio of seven 2% a relatively small impact that's included and.

Gerald Plush: We made a lot of progress on many fronts, which we will cover as we review the upcoming slides. And as an aside, which Sherry will cover later in her remarks, the loan deposit pipelines for the fourth quarter are very strong, and we expect to be back in growth mode in 4Q. And in fact, we've already booked 90 million in loan production month to date, which has resulted in a 71 million dollar net increase in loans as of yesterday.

Jerry Plush: We made a lot of progress on many fronts, which we will cover as we review the upcoming slides. And as an aside, which Sherry will cover later in her remarks, the loan deposit pipelines for the fourth quarter are very strong, and we expect to be back in growth mode in 4Q. And in fact, we've already booked 90 million in loan production month to date, which has resulted in a 71 million dollar net increase in loans as of yesterday.

Tangible book value per share also adjusted for held to maturity stood at $19 nine as of quarter end.

Speaker 3: We will now take a look at on slide six, on deposits, and give you an overview of the deposit base.

We will now take a look at on slide six on deposits and give you an overview of the deposit base. Our total deposits at the end of the third quarter were $7 5 billion and Thats down $33 million from the previous quarter. This very slight decrease was driven primarily by reductions in higher cost institutional dip.

Speaker 3: Our total deposit to the end of the third quarter was 7.5 billion, and that's down 33 million from the previous quarter. This very slight decrease was driven primarily by reductions in higher cost institutional deposits of 292 million, which was partially enabled by organic deposit growth of 2008.

Gerald Plush: So let's turn to slide three, and here we provide a summary of our third quarter highlights. Net income attributable to the company was 22.1 million compared to the 7.3 million in 2Q 23. This increase was primarily driven by lower provision for credit losses in 3Q, as the provision recorded in 2Q was substantially higher. The net interest margin was 3.57% compared to the 3.83% we reported last quarter. A few basis points lower than we originally expected.

Jerry Plush: So let's turn to slide three, and here we provide a summary of our third quarter highlights. Net income attributable to the company was 22.1 million compared to the 7.3 million in 2Q 23. This increase was primarily driven by lower provision for credit losses in 3Q, as the provision recorded in 2Q was substantially higher. The net interest margin was 3.57% compared to the 3.83% we reported last quarter. A few basis points lower than we originally expected. This was driven primarily than higher than expected funding costs and lower loan originations, as we continue to prioritize relationships venture originations and not renew or pursue non depository finance.

That's a $292 million, which was partially enabled by our organic deposit growth of $208 million.

Speaker 3: Of note is, non-interest bearing deposits increased by 77 million and time deposits increased by 220 million. And as of course, customers continue to seek higher returns on the deposits.

Of note is noninterest bearing deposits increased by $77 million and time deposits increased by $220 million and as of course customers continued to seek higher returns on their deposits.

Speaker 3: Note that this increase in time deposits, however, includes broker time deposits in the amount of 92 million, which was a strategic move to obtain two to five year funding, again, as part of asset liability management. And at the same time, as I just mentioned, we reduced federal and low bank advances by 175 million, which are down to 595 million in quarter.

Note that this increase in time deposits. However includes brokered time deposits in the amount of $92 million, which was a strategic move to obtain two to five year funding again as part of asset liability management and at the same time as I just mentioned, we reduce federal home bank advances by $175 million, which were down to 590.

Gerald Plush: This was driven primarily than higher than expected funding costs and lower loan originations, as we continue to prioritize relationships venture originations and not renew or pursue non depository finance. Johnson. So again, back to asset size, we decreased 174 million compared to Q23. Our gross loans were 7.1 billion compared to 7.2 billion last quarter, a decrease is 74 million, and our total deposits were 7.5 billion relatively flat to the 7.6 billion last quarter.

Jerry Plush: Johnson. So again, back to asset size, we decreased 174 million compared to Q23. Our gross loans were 7.1 billion compared to 7.2 billion last quarter, a decrease is 74 million, and our total deposits were 7.5 billion relatively flat to the 7.6 billion last quarter. Federal Humberland Bank advances were 595 million, a decrease of 175 million or 23 percent compared to the 770 million in QQ due to prepayments we made in 3Q23 as part of our asset liability management.

$5 million at quarter end.

Speaker 3: Please know we remain committed to maintaining our current ratio of loans that are positive with a target of 95% and not to exceed 100%.

Please know we remain committed to maintaining our current ratio of loan to deposit with a target of 95%.

Not to exceed 100%.

Speaker 3: So we'll turn to slide seven and look at our deposit diversification and you'll look at the stability we have in this portfolio. And as you can see, it's composed of domestic and international costs.

So we will turn to slide seven and look at our deposit versus occasion and Youll look at the stability. We have in this portfolio and as you can see it's composed of domestic and international customers. Our domestic deposits now account for 67% of total deposits totaling $5 1 billion as of the end of the third quarter and Thats down 46.

Gerald Plush: Federal Humberland Bank advances were 595 million, a decrease of 175 million or 23 percent compared to the 770 million in QQ due to prepayments we made in 3Q23 as part of our asset liability management. The company's capital levels continue to be strong and well in excess of the minimum regulatory requirements to be considered well-capitalized as of September 30 of 2023. Our changeable common equity ratio remains strong at 7.44 percent as of September 30.

Speaker 3: Our domestic deposits now account for 67% of total deposits, totaling 5.1 billion as of the end of the third quarter. That's down 46 million or 1%. Compared to the previous quarter and international deposits, which account for 33% of our total deposits, totaled 2.5 billion up 13 million or 0.5% compared to the previous quarter. Our domestic deposits include over 48,000 accounts with an average size of 100,000.

1% compared to the previous quarter in international deposits, which account for 33% of our total deposits totaled $2 5 billion up 13 million or 5% compared to the previous quarter.

Jerry Plush: The company's capital levels continue to be strong and well in excess of the minimum regulatory requirements to be considered well-capitalized as of September 30 of 2023. Our changeable common equity ratio remains strong at 7.44 percent as of September 30. As we classify the majority of our investment portfolio as available for sale, the market on this portfolio is deducted from tangible common equity.

Our domestic deposits include over 48000 accounts with an average size of 100000, while our international deposits are approximately 57000 accounts with an average size of 40000, which reflects the granularity of our deposit base and stability of this funding source and.

Speaker 3: by their international deposits are approximately 57,000 accounts with an average size of 40,000, which reflects the granularity of our deposit base and stability of this one.

Gerald Plush: As we classify the majority of our investment portfolio as available for sale, the market on this portfolio is deducted from tangible common equity. We'll get into more detail regarding capital and capital ratios shortly. Also during the quarter, we paid out the previously announced cash quarterly dividend of $0.9 for share on August 31, of 2023. And then lastly, regarding stock repurchases, as you know, we have a $25 million class A common stock share repurchase program in a place.

Jerry Plush: We'll get into more detail regarding capital and capital ratios shortly. Also during the quarter, we paid out the previously announced cash quarterly dividend of $0.9 for share on August 31, of 2023. And then lastly, regarding stock repurchases, as you know, we have a $25 million class A common stock share repurchase program in a place. And year to date, we've repurchased $260,000 shares for $5 million at an average price of $19 per share or at .9 times price to book value. Availability remaining under this program was 20 million hours of quarter rent.

Speaker 3: And as I've shared in previous calls, we intend to take advantage of our infrastructure and capabilities and emphasize international deposit gathering as a source of funds given more favorable pricing while also adding more diversification to our funding.

And as I've shared in previous calls, we intend to take advantage of our infrastructure and capabilities and emphasize international deposit gathering as a source of funds given more favorable pricing, while also adding more diversification to our funding base.

Speaker 3: Our court deposits defined as total deposits excluding all time deposits were 5.2 billion as of the end of their quarter. A decrease of 254 million or 5% compared to the previous quarter. The 5.2 billion in court deposits included 1.4 billion in non-intersparing demand up to 77 million by previously referenced or 6% compared to the prior quarter. Despite customer demand for higher rate products and in line with our continued efforts to prioritize deep customer relations.

Core deposits defined as total deposits. Excluding all time deposits were $5 2 billion as of the end of the third quarter, a decrease of $254 million or 5% compared to the previous quarter to $5 2 billion in core deposits included $1 4 billion in noninterest bearing demand up to $77 million I previously referenced or <unk>.

Gerald Plush: And year to date, we've repurchased $260,000 shares for $5 million at an average price of $19 per share or at .9 times price to book value. Availability remaining under this program was 20 million hours of quarter rent. So let's turn to slide forward and take a look at what happened in shares outstanding during the quarter. And here you can see that during 3Q, we continue to prudently use our 25 million share repurchase program that we repurchased 142,000 shares of common stock at an average price of $19.

Jerry Plush: So let's turn to slide forward and take a look at what happened in shares outstanding during the quarter. And here you can see that during 3Q, we continue to prudently use our 25 million share repurchase program that we repurchased 142,000 shares of common stock at an average price of $19. We can transition now to slide five and we'll show you our capital position relative to regulatory minimums. As of 3Q 2023, our total capital ratio ended at 12.7 percent and our CET-1 was 10.3 percent.

6% compared to the prior quarter, despite customer demand for higher end products and in line with our continued efforts to prioritize deep customer relationships.

Speaker 3: 2.4 billion in interest-bearing deposits down for inter 56 million or 13% versus the previous quarter, primarily driven by the previously referenced reduction in institutional deposits, and 1.5 billion in savings and money market deposits, up 26% or 2% versus the previous quarter. So at this point, I'm going to turn things over to Sherry, we'll go over the key metrics, other balance sheet items, and results for the third quarter in more detail.

$2 4 billion in interest bearing deposits down $356 million or 13% versus the previous quarter, primarily driven by the previously referenced reduction in institutional deposits and $1 5 billion in savings and money market deposits up 26% or 2% versus the previous quarter.

Gerald Plush: We can transition now to slide five and we'll show you our capital position relative to regulatory minimums. As of 3Q 2023, our total capital ratio ended at 12.7 percent and our CET-1 was 10.3 percent. Our tangible common equity ratio, which includes 106 million of AOCI resulting from the aftertacks change in the valuation of our portfolio was 7.44 percent. Regarding our tangible common equity ratio, we also show here for reference purposes the impact of adding to 26 million and unrealized losses from our held maturity portfolio and what that does to TCE, which would result in an adjusted tangible capital ratio was 7.2 percent, a relatively small impact that included. And tangible book value per share also adjusted for held maturity stood at 19.9 as a quarter rent.

So at this point I'm going to turn things over to Sherry, who will go over the key metrics other balance sheet items and results for the third quarter in more detail.

Jerry Plush: Our tangible common equity ratio, which includes 106 million of AOCI resulting from the aftertacks change in the valuation of our portfolio was 7.44 percent. Regarding our tangible common equity ratio, we also show here for reference purposes the impact of adding to 26 million and unrealized losses from our held maturity portfolio and what that does to TCE, which would result in an adjusted tangible capital ratio was 7.2 percent, a relatively small impact that included. And tangible book value per share also adjusted for held maturity stood at 19.9 as a quarter rent.

Speaker 4: Thank you, Jerry, and good morning, everyone. As part of today's presentation, I will share more color on our financial position and performance. With trainings of light eight, I'll begin by discussing our key performance metrics and their changes compared to last quarter.

Thank you Jerry and good morning, everyone as part of today's presentation I will share more color on our financial position and performance.

As of May eight ill begin by discussing our key performance metrics and your changes compared to last quarter.

Speaker 4: Non-intervarying deposits, the total deposits, increased to 18% in 3Q compared to 17% in the previous quarter.

Noninterest bearing deposits to total deposits increased to 80% in Q compared to 17% in the previous quarter.

Speaker 4: This reflects our deposit's first focus and our efforts to increase demand divorce.

This reflects our deposits first focus and our efforts to increase demand deposit account. This.

Speaker 4: This positive trend also speaks us to the value of building relationships and all the efforts in our markets despite the challenges of customer seeking higher interest rates and the market.

This positive trend also speaks to the value of building relationships and all the African market. Despite the challenges of customers seeking higher interest rates and the market competition.

Gerald Plush: We will now take a look at on slide six on deposits and give you an overview of the deposit base. Our total deposit to the end of the third quarter was 7.5 billion and that's down 33 million from the previous quarter. This very slight decrease was driven primarily by reductions in higher cost institutional deposits of 292 million, which was partially enabled by organic deposit growth of 208 million. Of note is non-interest bearing deposits increased by 77 million and time deposits increased by 220 million.

Jerry Plush: We will now take a look at on slide six on deposits and give you an overview of the deposit base. Our total deposit to the end of the third quarter was 7.5 billion and that's down 33 million from the previous quarter. This very slight decrease was driven primarily by reductions in higher cost institutional deposits of 292 million, which was partially enabled by organic deposit growth of 208 million. Of note is non-interest bearing deposits increased by 77 million and time deposits increased by 220 million.

Speaker 4: Our efficiency ratio was 64.1% compared to 65.6% last quarter. And ROA and ROE were higher this quarter at 0.92% and 11.93% respectively. As a result of the lower provision and one time charges during the period.

Our efficiency ratio was 64, 1% compared to 65, 6% last quarter and ROA and ROE were higher this quarter at 92% and 11, 93% respectively. As a result of the lower provision and one time charges during the period.

Speaker 4: For consistency and transparency, we show the three core metrics of RWA, RLE, and operating efficiency, excluding non-routine items, so you can more easily see underlying performance for the poor.

We're consistent interest guarantee we showed the three core metrics of ROA ROE and operating efficiency, excluding non routine items. So you can more easily see underlying performance for the quarter.

Speaker 4: As an example, chloroficiency is 62.1% compared to 60.3% in 2Q23, which excludes non-riching charge.

An example, where efficiency of 62, 1% compared to 63% in Q3, which excludes non routine charges.

Gerald Plush: And as of course customers continue to seek higher returns on their deposits, notes that this increase in time deposits, however, includes broker time deposits in the amount of 92 million which was a strategic move to obtain two to five year funding again as part of asset liability management. And at the same time, as I just mentioned, we reduced federal and not to exceed 100 percent.

Jerry Plush: And as of course customers continue to seek higher returns on their deposits, notes that this increase in time deposits, however, includes broker time deposits in the amount of 92 million which was a strategic move to obtain two to five year funding again as part of asset liability management. And at the same time, as I just mentioned, we reduced federal and not to exceed 100 percent.

Speaker 4: These results include turning costs of main applications and services to be used after conversion in parallel with current applications.

These results include certain cost of new applications and services to be used after conversion in parallel with current applications in C.

Speaker 4: This parallel use of applications will also occur for the full first quarter of 2023 until we complete the commissioning applications in early 2024 and therefore we do

This paralleled the use of applications will also occur for the full fourth quarter of 2023 until we complete decommissioning applications in early 2024, and therefore, we did this call.

Speaker 4: This is it. We expect higher efficiency ratio temporarily until early 2022.

Due to this we expect a higher efficiency ratio temporarily until early 2024.

Speaker 4: Lastly, the coverage of the allowance for credit losses to total loans decreased to 1.40% compared to 1.48% in two cubes. As a result of charge of previously received.

Lastly, the coverage of the allowance for credit losses to total loans decreased to 140% compared to 148% in Q.

As a result of charge offs previously reserved.

Speaker 4: However, excluding reserves for a lump individually evaluated, the coverage remains stable at 1.28% unchanged from 2Q. Consume on to slide nine.

However, excluding reserves for loans individually evaluated the coverage remains stable at 128% unchanged from Turkey.

Gerald Plush: So we'll turn to slide seven and look at our deposit diversification and you'll look at the stability we have in this portfolio. And as you can see, it's composed of domestic and international customers. Our domestic deposits now count for 67 percent of total deposits totaling 5.1 billion as of the end of the third quarter. And that's down 46 million or 1 percent compared to the previous quarter and international deposits which account for 33 percent of total deposit total 2.5 billion up 13 million or 0.5 percent compared to the previous quarter.

Jerry Plush: So we'll turn to slide seven and look at our deposit diversification and you'll look at the stability we have in this portfolio. And as you can see, it's composed of domestic and international customers. Our domestic deposits now count for 67 percent of total deposits totaling 5.1 billion as of the end of the third quarter. And that's down 46 million or 1 percent compared to the previous quarter and international deposits which account for 33 percent of total deposit total 2.5 billion up 13 million or 0.5 percent compared to the previous quarter.

Casino onto slide nine I will discuss our investment portfolio.

Speaker 4: Our third quarter investment security balance was at 1.3 billion, which remains unchanged compared to the previous quarter. When compared to the prior quarter, the duration of the investment portfolio has extended to 5.3 years as the model and dissipates longer duration due to higher mortgage rates and therefore slower propensity.

Third quarter investment Securities balance was at $1 3 billion, which remains unchanged compared to the previous quarter when compared to the prior quarter. The duration of the investment portfolio has extended to three years as the model anticipates longer duration due to higher mortgage rates and therefore slower prepayments.

Speaker 4: As we did last quarter, I would like to discuss the impact of interest rates on the valuation of debt securities available for

We did last quarter I would like to discuss the impact of interest rates undervaluation of debt securities available for sale.

Speaker 4: As of the end of this September , the market value of this portfolio decreased approximately 19 million after tax compared to a decrease of 13.5 million into Q23. This decrease was driven by the end of this September , the market value of this portfolio increased approximately 19 million after tax compared to a decrease of 13.5 million.

Gerald Plush: Our domestic deposits include over 48,000 accounts with an average size of 100,000 while our international deposits are approximately 57,000 accounts with an average size of 40,000 which reflects the granularity of our deposit base and stability of this funding source. And as I've shared in previous calls, we intend to take advantage of our infrastructure and capabilities and emphasize international deposit gathering as a source of funds given more favorable pricing while also adding more diversification to our funding base.

Jerry Plush: Our domestic deposits include over 48,000 accounts with an average size of 100,000 while our international deposits are approximately 57,000 accounts with an average size of 40,000 which reflects the granularity of our deposit base and stability of this funding source. And as I've shared in previous calls, we intend to take advantage of our infrastructure and capabilities and emphasize international deposit gathering as a source of funds given more favorable pricing while also adding more diversification to our funding base.

At the end of the September the market value of this portfolio decreased approximately $19 million after tax compared to a decrease of $13 5 million into <unk> 'twenty three <unk>.

This decrease was driven by rising rates during the third quarter.

Speaker 4: It is important to note that 75% of our available for so-perfuelio has government guarantees, while most of the remaining securities are rated investment.

It is important to note that 75% over available for sale portfolio has the government guarantees where most of the remaining securities are rated investment grade.

Speaker 4: Also, as of the third quarter, our corporate debt portfolio had 120 for million in subordinated debt securities issued by financial institutions, compared to 121 million into Q as a result of higher market value.

Also as of the third quarter, our corporate debt portfolio had $124 million in subordinated debt securities issued by financial institutions compared to $121 million into Q as a result of higher market valuation.

Gerald Plush: Our core deposits defined as total deposits, excluding all time deposits, were 5.2 billion as of the end of the third quarter, a decrease of 254 million or 5 percent compared to the previous quarter. The 5.2 billion and core deposits included 1.4 million in nonintersparing demand up to 77 million by previously referenced or 6 percent compared to the prior quarter. Despite customer demand for higher rate products and in line with our continued efforts to prioritize deep customer relationships.

Jerry Plush: Our core deposits defined as total deposits, excluding all time deposits, were 5.2 billion as of the end of the third quarter, a decrease of 254 million or 5 percent compared to the previous quarter. The 5.2 billion and core deposits included 1.4 million in nonintersparing demand up to 77 million by previously referenced or 6 percent compared to the prior quarter. Despite customer demand for higher rate products and in line with our continued efforts to prioritize deep customer relationships.

Speaker 4: are available for sale portfolio represents 79% of the total investment for folio while helping maturity securities represent 17.5.

Our available for sale portfolio represents 79% of the total investment portfolio well held to maturity securities representing 17, 5%.

Speaker 4: Continuing on to slide 10, let's talk about the loombers.

Continuing on to slide 10, let's talk about the loan portfolio.

Speaker 4: At the end of the third quarter, total growth loans were $7.1 billion down slightly 1% compared to $7.2 billion at the end of two-

At the end of the third quarter total gross loans were $7 1 billion down slightly 1% compared to $7 2 billion at the end of Q2.

Speaker 4: The decrease was primarily driven by reduced originations given tighter credit quality requirements and relationship-focused originates.

The decrease was primarily driven by reduced originations given tighter credit quality requirements and relationship focused origination this.

Gerald Plush: 2.4 billion in intersparing deposits down for an or 56 million or 13 percent versus the previous quarter, primarily driven by the previously referenced reduction in institutional deposits and 1.5 billion in savings and money market deposits up 26 percent or 2 percent versus the previous quarter.

Jerry Plush: 2.4 billion in intersparing deposits down for an or 56 million or 13 percent versus the previous quarter, primarily driven by the previously referenced reduction in institutional deposits and 1.5 billion in savings and money market deposits up 26 percent or 2 percent versus the previous quarter.

Speaker 4: This was noticeable in the commercial loan portfolio, which decreased 124 million to 1.45 billion compared to 1.6 billion into 220.

This was noticeable in the commercial loan portfolio, which decreased $124 million to $1 45 billion compared to $1 6 billion into Q3.

Speaker 4: The single family residential portfolio was 1.39 billion and increased of 58 million compared to 1.16 billion into Q20.

The single family residential portfolio was 139 billion, an increase of $58 million compared to $1 16 billion into Q 'twenty three did.

Sharymar Kanledon: So at this point, I'm going to turn things over to Sherry. We'll go over the key metrics, other balance sheet items and results for the third quarter in more detail. Thank you, Jerry.

Speaker 4: This amount includes 82.5 million and loans originated and purchased year in the quarter, primarily done with private banking customers and other strategic relations.

This amount includes $82 5 million in notes originated and purchased during the quarter, primarily done with private banking customers and other strategic relationships.

Speaker 4: Consumer loans as of 3223 work 439 million, a decrease of 64 million or 13% quarter over quarter.

Sharymar Kanledon: Good morning, everyone. As part of today's presentation, I will share more color on our financial position and performance. With earnings of light eight, I'll begin by discussing our key performance metrics and their changes compared to last quarter. Nonintersparing deposits, the total deposit, increased to 18 percent in review compared to 17 percent in the previous quarter. This reflects our deposits first focus and our efforts to increase demand deposit account. This positive trend also speaks up to the value of building relationships and all the efforts in our markets despite the challenges of customer seeking higher interest rates and the market competition.

Consumer loans as of 323 were for 139 million, a decrease of $64 million or 13% quarter over quarter.

Speaker 4: This includes approximately 255 million in higher yielding in their lungs, which were a tactical move for us to increase yields in prior period.

This includes approximately 255 million in higher yielding indirect loans, which were a tactical move for us to increase yields and prior periods. As we mentioned last quarter, we are focusing on organic growth and have not been purchasing any new production. Since the end of 2022, we estimate that at current prepayments speeds. This portfolio will run off over the next few years.

Speaker 4: As we mentioned last quarter, we are focusing on organic growth and have not been purchasing any new productions since the end of 2020.

Speaker 4: We estimate that a current prepayment speed this portfolio will run off over the next week.

Speaker 4: During three Q, we also continue to run up our New York City Theory portfolio. We transferred our single highest exposure in our New York City Theory portfolio to help for sale and recorded evaluation allowance of 5.6 million upon trans.

During <unk>. We also continue to run off our New York City CRE portfolio, we transferred our single highest exposure in our New York City theory portfolio to held for sale and recorded a valuation allowance of $5 6 million upon transfer.

Sharymar Kanledon: Our efficiency ratio was 64.1 percent compared to 65.6 percent last quarter. An ROA and ROE were higher this quarter at 0.92 percent and 11.93 percent respectively as a result of the lower provision and one time charges during the period. For consistency and transparency, we show the three core metrics of ROA, ROE, and operating efficiency, excluding non-routine items so you can more easily see underlying performance for the porter. As an example, core efficiency is 62.1% compared to 60.3% in 2Q23, which excludes non-routine charges.

Speaker 4: This loan had a 43.3 million balance near a fallout once at the end of 3Q and we have scheduled the sale of this facility for later today.

This loan had a $43 3 million balance net of allowance at the end of <unk> and we have scheduled the sale of this facility for later today.

Speaker 4: The resulting New York City Theory portfolio health for investment was 240 million as of 3Q and consists of 23 facilities.

The resulting New York City theory portfolio held for investment was 240 million <unk> and consisted of 23 facilities.

Speaker 4: We also had 26 million in Longfell for sale in connection with Amran Mortgage, compared to 50 million in the previous quarter. Given recent industry events in connection with Chair National Credit for Folio, it is important to note that our exposure to these loans is limited. As of 3Q, we had 177 million in Chair National Credit, 2.5% of the total loan for folio.

We also had $26 million and loans held for sale in connection with Ameren mortgage compared to $50 million in the previous quarter.

Given recent industry.

Industry events in connection with shared national credit portfolio. It is important to note that our exposure to these loans is limited as of <unk>, we had $177 million in shared national credits.

Sharymar Kanledon: These results include certain costs of main applications and services to be used after conversion in parallel with current applications in place. This parallel use of applications will also occur for the fourth quarter of 2023 until we complete the commissioning applications in early 2024 and therefore reduce these costs. This is the way we expect a higher efficiency ratio temporarily until early 2024. Lastly, the coverage of the allowance for credit losses to total loans decreased to 1.40% compared to 1.48% in 2Q. As a result of charge of previously reserved. However, excluding reserved for loans individually evaluated, the coverage remains stable at 1.28% unchanged from 2Q.

5% of the total loan portfolio.

Speaker 4: This amount includes the CRE Long Hill for sale, I just mentioned.

Amount includes the CRE loans held for sale I just mentioned.

Speaker 4: Also, it is important to note that approximately half of these borrowers have relationships with us. Turning to slide 11.

Also it is important important to note that approximately half of these borrowers have relationship with them.

Turning to slide 11, let's take a closer look at credit quality.

Speaker 4: Our credit quality remains sound and reserves coverage is strong. The allowance for credit losses at the end of the third quarter was 99 million, a decrease of 6.8 percent from 106 million at the close of the previous quarter.

Our credit quality remains sound and reserve coverage is strong the allowance for credit losses at the end of the third quarter was $99 million a decrease of $6 eight six.

8% from $106 million at the close of the previous quarter.

Speaker 4: We recorded a provision for credit losses of 8 million and the third quarter, which comprised of 7.6 million to cover charge off, 1.4 million into loan composition and volume changes, and 600,000 added to the provision for credit contingency, which is recorded in other liabilities.

We recorded a provision for credit losses of $8 million in the third quarter, which comprised of $7 6 million to cover charge off $1 $4 million into loan competition and volume changes and 600000 added to the provision for credit contingency, which is recorded in other liabilities.

Sharymar Kanledon: Continuing on to slide 9, I'll discuss our investment portfolio. Our third quarter investment security balance was at 1.3 billion, which remains unchanged compared to the previous quarter. When compared to the prior quarter, the duration of the investment portfolio has extended to 5.3 years as the model anticipates longer durations due to higher mortgage rates and therefore slower performance.

Speaker 4: These provision requirements were often by 400,000 released due to credit quality and factor updates and 1.2 million released due to recode.

These provision requirements were offset by 400000 release due to credit quality and Fletcher update and 1.2 million release due to recovery.

Speaker 4: It is important to mention that, consistent with previous quarterly disclosures in 2023, the quarterly 2022 provision for credit law has now reflects the desegregated impact of steeple implementation for those specific periods.

It is important to mention that consistent with previous quarterly disclosures in 2023 quarterly 2022 provision for credit losses now reflects the disaggregated impact of Stifel implementation for those specific period.

Sharymar Kanledon: As we did last quarter, I would like to discuss the impact of interest rates on the valuation of debt securities available for sale. As of the end of this, September, the market value of this portfolio decrease approximately 19 million after tax, compared to a decrease of 13.5 million into Q23. This decrease was driven by rising rates during the third quarter. It is important to note that 75% of our available for sale portfolio has government guarantees, while most of the remaining securities are rated investment rates.

Speaker 4: During the third quarter of 2023, there were net charge of the 14.6 million, of which 6.4 million were related to indirect consumer loan, and 9.3 million were related to multiple smaller commercial loans, of which 5.7 million had already been reserved in a prior period. This was offset by 1.2 million.

During the third quarter of 2023, and there were net charge offs of $14 6 million of which $6 4 million were related to indirect consumer loans and $9 3 million were related to multiple smaller commercial loan of which <unk> 7 million had already been reserved in the prior period.

This was offset by $1 2 million of recoveries.

Speaker 4: Our non-performing loans to total loans are down to 46 basis points compared to 65 basis points last quarter.

Our nonperforming loans to total loans are down from 46 basis points compared to 65 basis points last quarter.

Sharymar Kanledon: Also, as of the third quarter, our corporate debt portfolio had 120 for a million and subordinated debt securities issued by financial institutions. Compared to 121 million into Q, as a result of higher market valuation, our available for sale portfolio represents 79% of the total investment portfolio, while helping maturity securities represent 17.5%.

Speaker 4: This was primarily due to the charges mentioned, 8.4 million dutu long sold, 2.6 million dutu paydowns, and 0.4 million dutu up.

This was primarily due to charge offs mentioned $8 4 million to two loans sold $2 6 million due to pay downs and point 4 million due to upgrades.

Speaker 4: Number-forming assets total 53.4 million at the end of the third quarter, a decrease of 14 million compared to 2Q23, primarily due to the decrease in it.

Nonperforming assets totaled $53 4 million at the end of the third quarter, a decrease of $14 million compared with <unk> 23, primarily due to the decrease in Npls.

Sharymar Kanledon: Continuing on to slide 10, let's talk about the loan portfolio. At the end of the third quarter, total growth loans were 7.1 billion down slightly 1% compared to 7.2 billion at the end of 2Q. The decrease was primarily driven by reduced originations given tighter credit quality requirements and relationship-focused originations. This was noticeable in the commercial loan portfolio, which decreased 124 million to 1.45 billion compared to 1.6 billion into Q23. The single family residential portfolio was 1.39 billion and increased of 58 million compared to 1.6 billion into Q23.

Speaker 4: The ratio of non-performing assets to total assets was 67 basis points, down 14 basis points from the second quarter of 2020.

The ratio of nonperforming assets to total assets was 57 basis points down 14 basis points from the second quarter of 2023.

In the third quarter of 2023, the coverage ratio of loan loss reserve to nonperforming loans close at three times up from two two times at the end of last quarter and down from four one times at the close of the third quarter of last year.

Speaker 4: As we did last quarter, we brought up flight 12 from our loan supplement section to discuss our theory portfolio and further deep.

As we did last quarter, we burn up slide 12 from our loan supplement section to discuss our theory portfolio in further detail.

Speaker 4: We have a conservative-witted average loan survival of 59%, and that service covers of 1.4 as well as strong sponsorship to your profile based on AUM, net worth, and years of experience-free.

Have a conservative weighted average loan to value of 59% and debt service coverage of one four as well as strong sponsorship tier profile.

Sharymar Kanledon: This amount includes 82.5 million and loans originated in purchase during the quarter, primarily done with private banking customers and other strategic relationships. Consumer loans, as of 3Q23, were 439 million, a decrease of 64 million or 13% quarter over quarter. This includes approximately 255 million in higher yielding indirect loans, which were a tactical move for us to increase yields in prior periods. As we mentioned last quarter, we are focusing on organic growth and have not been purchasing any new productions since the end of 2020. 22.

Just on AUM net worth and years of experience for each sponsor.

Speaker 4: As of the end of 3Q23, we have 30% of our theory portfolio and talk to your borrowers.

So at the end of Q3, we had 30% over theory portfolio in top tier borrowers.

Speaker 4: We have no significant tenon concentration in our theory retool loan portfolio as the top 15 sentence represents 22% of the total.

We have no significant tenant concentration and our theory retail loan portfolio at the top 15 tenants represent 22% of the total.

Speaker 4: Major tenants include recognized national and regional grocery stores, pharmacy, food, and clothing retailers and-

Major tenants include recognized national or regional grocery stores, pharmacy, food and clothing retailers and banks.

Speaker 4: Our underwriting methodology for CRE includes sensitivity analysis, for a variety of key risk factors like interest rates and their impact over death suffer, death service coverage ratio, vacancy and tenor return.

Our underwriting methodologies for CRE include sensitivity analysis analysis.

Sharymar Kanledon: As we mentioned last quarter, we are focusing on organic growth and have not been purchasing any new productions since the end of 2020. 22. We estimate that at current repayment speeds, this portfolio will run off over the next few years. During 3Q, we also continue to run off our near city theory portfolio. We transferred our single highest exposure in our near city theory portfolio to help for sale and required evaluation allowance of 5.6 million upon transfer.

Variety of key risk factors like interest rates and their impact over desktop debt service coverage ratio vacancy and tenant retention. Please.

Sharymar Kanledon: We estimate that at current repayment speeds, this portfolio will run off over the next few years. During 3Q, we also continue to run off our near city theory portfolio. We transferred our single highest exposure in our near city theory portfolio to help for sale and required evaluation allowance of 5.6 million upon transfer. This loan had a 43.3 million balance net of allowance at the end of 3Q and we have scheduled the sale of this facility for later today.

Speaker 4: Please note that 49% of our theory for folio has been hedged by the borrowers via interest rate capture swaps, which in turn protects them against rising rate.

Please note that 49% over CRE portfolio had been hedged by the borrowers would be of interest recapture swaps, which in turn protects them against rising rate environment.

Speaker 4: Next, I'll discuss Net Interest Income and Net Interest Margin on Plyther.

Next I'll discuss net interest income and net interest margin on slide 13.

Sharymar Kanledon: This loan had a 43.3 million balance net of allowance at the end of 3Q and we have scheduled the sale of this facility for later today. The resulting near city theory portfolio,[inaudible] As of the end of 3Q23, we have 30% of our CRU portfolio in top tier borrowers. We have no significant tenant concentration in our CRU retail loan portfolio as the top 15 tenants represent 22% of the total. Major tenants include recognized national and regional grocery stores, pharmacy, food and clothing retailers and banks.

Speaker 4: Medinterest income for the third quarter was 79 million down 5 million or 6% compared to the previous quarter. The decrease was primarily driven by higher average rates on total interest varying liabilities for both total deposits and official be advances. In higher average balances of customer time.

Net interest income for the third quarter was $79 million down $5 million or 6% compared to the previous quarter. The decrease was primarily driven by higher average rates on total interest bearing liabilities for both total deposits and officially be advances and higher average balances of customer time deposits.

Sharymar Kanledon: The resulting near city theory portfolio,[inaudible] As of the end of 3Q23, we have 30% of our CRU portfolio in top tier borrowers. We have no significant tenant concentration in our CRU retail loan portfolio as the top 15 tenants represent 22% of the total. Major tenants include recognized national and regional grocery stores, pharmacy, food and clothing retailers and banks. Our underwriting methodology for CRU includes sensitivity analysis for a variety of new risk factors like interest rates and their impact over death service, death service coverage ratio, vacancy and tenant retention. Please note that 49% of our CRU portfolio has been hedged by the borrowers via interest rate capture swap, which in turn protects them against rising rate environments.

Speaker 4: As rates continue to increase during the quarter, we experience higher beta via the combined effect of rate increases in transactional deposits, reprising of time deposits that had no reprised the current market rate, as well as higher balances in time deposits at current markets.

As rates continue to increase during the quarter, we experienced higher beta.

Any effect of rate increases and transactional deposit repricing of time deposits that had no repriced at current market rates as long as higher balances and time deposits at current market rates.

Speaker 4: As you can see in the graph, we observed the beta of approximately 43 basis points on a cumulative basis since the beginning of the interest rate of cycle, but around 104 basis points quarter on quarter compared to 196 in the previous quarter.

Can see in the graph, we observed a beta of approximately 43 basis points on accumulative basis since the beginning of the interest rate cycle, but around 104 basis points quarter on quarter compared to 196 in the previous quarter.

Speaker 4: Moving on to the net interest margin, as you already mentioned, NIM for the third quarter was 3.57%. Down by 26 basis points quarter over quarter. This was slightly higher than we had originally guided as we saw lower than expected long-floating during the quarter based on our deposit first and relationship-focused lending.

Moving on to the net interest margin as Gerry mentioned NIM for the third quarter was 357% down by 26 basis points quarter over quarter. This was slightly higher than we had originally guided as we saw lower than expected loan closings during the quarter based on our deposits first and relationship focused lending practices.

Speaker 4: We expect the margins to continue to be pressured given substantial market competition for domestic deposits and demand for higher rates. I'll provide some additional color in-

We expect the margin to continue to be pressured given substantial market competition for domestic deposits and demand for higher rates.

Some additional color and then maybe my final remarks.

Speaker 4: Moving on to interest rate sensitivity on flight for teens, you can see the assistance activity of our balance sheet with 53% over long-tabbing floating-ray structures, and 52% reprising within.

Moving onto interest rate sensitivity on slide 14, you can see the asset sensitivity of our balance sheet with 53% over a long as having floating restructures and 52% of repricing within a year.

Speaker 4: As we have said in previous calls, we continue to position our portfolio for a change in race cycle by incorporating race floors when originating adjustable loans. So current we currently have 51% of our adjustable loan portfolio with flow rates. Additionally, you can see here that within the variable rate loans 37% are indexed.

As we have said in previous calls we continue to position our portfolio for a change in recycled by incorporating right, Florida when originating adjustable loan.

So currently we currently have 51% over adjustable loan portfolio with flurry. Additionally, you can see here that within the variable rate loans, 37% or index is still fair.

Speaker 4: Our NIMS sensitivity profile remains stable compared to the previous quarter. We include the sensitivity of our AFS portfolio to showcase our ability to expand additional negative populations.

Our NIM sensitivity profile remains stable compared to the previous quarter. We include the sensitivity of our <unk> portfolio to showcase our ability to extend additional negative valuation changes.

Speaker 4: I would like to take a moment to discuss the change in organic improvement in AOCI, which is lower than discussed in previous court.

Like to take a moment to discuss the change in organic improvement in <unk>, which is lower than discussed in previous quarters.

Speaker 4: Does moderate amount result from revised market expectations regarding easing monetary policy not taking place in the short term as had been expected earlier indeed?

As a matter of months result from revised market expectations regarding easing monetary policy not taking place in the short term as had been expected earlier in the year.

Speaker 4: We will continue to actively manage our balance sheet to best position her bend for the remainder of 2023 and looking into 20.

We will continue to actively manage our balance sheet to best sufficient or bank for the remainder of 2023 and looking into 2024.

Speaker 4: Continuing the life of 15, non-interesting common death recorder was 22 million, down by 4.7 million or 18% from 27 million in the second quarter of 2022.

Continuing to slide 15, noninterest income in the third quarter was $22 million down by $4 7 million or 18% from 27 million in the second quarter of 2023.

Speaker 4: As reference earlier, 7 million of non-interesting com were non-routine eyes.

As referenced earlier 7 million of noninterest income were non routine items.

Speaker 4: The decree flipped primarily driven by lower gains on the early extinguishment of official B-adfances and lower mortgage banking in.

The decrease was primarily driven by lower gains on the early extinguishment of official be advances and lower mortgage banking income.

Speaker 4: This decrease in non-interest income was partially offset by higher loan level derivative income due to higher volume of derivative transactions with clients. And the absence of the one of the 1.2 million loss in connection with the sale of one corporate debt security available.

This increase in noninterest income was partially offset by higher loan level derivative income due to higher volume of derivative transactions with clients and the absence of the one of the $1 2 million loss in connection with the sale of one corporate debt securities available for sale.

Speaker 4: Amherens asked the Thunder Management total 2.1 billion as of the end of the third quarter, down 55 million or 2.6% from the second.

Ameren assets under management totaled $2 1 billion as of the end of the third quarter down 55 million or two 6% from the second quarter. This.

Speaker 4: This decrease was primarily driven by lower neodymium assets and market value 8.

This decrease was primarily driven by lower net new assets and market valuation.

Speaker 4: When compared to the same quarter a year ago, we saw an increase of 281 million or 15.5%. Primarily driven by net new assets, which were 162 million and higher market value rates.

When compared to the same quarter a year ago, we saw an increase of 281 million or 15, 5%, primarily driven by net new assets, which were 162 million and higher market valuation.

Speaker 4: Of note, this week the company approved a restructuring of its Bancom Life Insurance Program as we surrendered and reinvest in higher yielding policies, well also increasing team member participation. We expect to improve earnings of approximately 2 million per year in future.

Of note. This week the company approved a restructuring of the bank owned life insurance program as we surrendered and reinvest in higher yielding policy. While also increasing team member participation. We expect improved earnings of approximately 2 million per year in future periods.

Sharymar Kanledon: Our underwriting methodology for CRU includes sensitivity analysis for a variety of new risk factors like interest rates and their impact over death service, death service coverage ratio, vacancy and tenant retention. Please note that 49% of our CRU portfolio has been hedged by the borrowers via interest rate capture swap, which in turn protects them against rising rate environments.

Speaker 4: Turning to slide 16, their quarter non-interest expenses were 64.4 million down 8 million or 11 percent from the second quarter.

Turning to slide 16 third quarter noninterest expenses were $64 4 million down $8 million or 11% from the second quarter.

Speaker 4: As Gary covered earlier, we consider 6.3 million of our expensive quarter as non-routine expense sites.

As Gary covered earlier, we consider $6 3 million of break message this quarter as non routine expense items.

Sharymar Kanledon: Next, I'll discuss net interest income and net interest margin on flight 13. Net interest income for the third quarter was 79 million down 5 million or 6% compared to the previous quarter. The decrease was primarily driven by higher average rates on total interest varying liabilities for both total deposits and official be advances in higher average balances of customer time deposits. As rates continue to increase during the quarter, we experience higher beta via the combined effect of rating increases in transactional deposits, repricing of time deposits that had no repriced a current market rate as well as higher balances in time deposits at current market rates.

Speaker 4: including these items, cornering their expenses were 58 million in the third quarter of 2020.

Putting these items core non interest expenses were $15 million in the third quarter of 2023.

Speaker 4: The quarter over quarter decreased was primarily driven by the absence of many of the items that were included in Q that were no longer in this quarter, as well as lower advertising expenses, resulting from campaigns in connection with our partnerships with professional sporting teams. And lower professional fees and connection with call center services that are no longer needed as a result of the engagement with FIS and the absence of additional consulting expenses into Q20.

The quarter over quarter decrease was primarily driven by the absence of many of the items that were included in <unk>. There were no longer in this quarter as well as lower advertising expenses, resulting from campaigns in connection with our partnerships with professional sporting team.

Professional fees in connection with call Center services that are no longer needed as a result of the engagement with F. N b absence of additional consulting expenses into Q3.

Speaker 4: The decrease in non-interest expense was partially offset primarily by evaluation expenses related to the transfer of a new year of the New Year's-based theory loan from loan-helfer investment to loan-helfer.

The decrease in noninterest expense was partially offset primarily by evaluation expenses related to the transfer of an ear of the New York based CRE loans from loans held for investment to loan held for sale.

Sharymar Kanledon: As you can see in the graph, we observed the beta of approximately 43 basis points on a cumulative basis since the beginning of the interest rate of cycle, but around 104 basis points quarter on quarter compared to 196 in the previous quarter. Moving on to the net interest margin, as Jerry mentioned, name for the third quarter was 3.57%. Down by 26 basis points quarter over quarter. This was slightly higher than we had originally guided as we saw lower than expected long flowings during the quarter based on our deposits first and relationship focused lending practices. We expect the margin to continue to be pressured given substantial market competition for domestic deposits and demand for higher rates.

Speaker 4: In terms of our team wins the quarter with 700FT, slightly lower from 700FT we had into key.

In terms of our team we ended the quarter with 700 Ftes slightly lowered from 710, we head into Q.

Speaker 4: Out of the 700 members, 600 and two are employed by the bank and 98 by M-RM mortgage. On that note, let's turn to slide seven.

Out of the 700 members 602 are employed by the bank and 98 by Ameren mortgage.

Sharymar Kanledon: I'll provide some additional color and name in my final remarks.

On that note, let's turn to slide 17, which focuses on ameren mortgage.

Speaker 4: On a standalone basis, Amar Morgge had a negative PPNR of 1.6 million in 3.323, which was consistent with two curies.

On a standalone basis, AMR mortgage had a negative P P and art of $1 6 million and <unk> 23, which was consistent with two key results.

Speaker 4: or efficiency ratio, excluding the activities from Amher and Mortgage, improved from 64.10% to 62%.

Our efficiency ratio, excluding the activities from Ameren mortgage improved from 64 point, 10%, 262%.

Speaker 4: During the third quarter, the company originated and purchased approximately 84 million loans through AMRA mortgage. And as noted on the slide, these are related to the bank's customers and relations.

During the third quarter the company originated and purchased approximately 84 million in loans through Ameren mortgage and as noted on the fly these are related to the bank's customers and relationships. The current pipeline shows 107 million in profit or 266 applications as of October 18, 2023 with $84 million in rates locked.

Sharymar Kanledon: Moving on to interest rate sensitivity on flight 14, you can see the asset sensitivity of our balance sheet with 53% over loans having floating rate structures and 52% repricing within a year.

Speaker 4: The current pipeline shows 107 million in process or 266 applications as of October 18, 2023, with 84 million in race locks. And to provide some color.

Sharymar Kanledon: As we have said in previous calls, we continue to position our portfolio for a change in rate cycle by incorporating rate floors when originating adjustable loans. So current, we currently have 51% of our adjustable loan portfolio with flow rates. Additionally, you can see here that within the variable rate loans 37% are indexed to stilfer. Our name sensitivity profile remains stable compared to the previous quarter. We include the sensitivity of our AFS portfolio to showcase our ability to extend additional negative valuation changes.

And to provide some color on our expectations for next quarter.

Speaker 4: Regarding Rose, we estimate our balance sheet to grow between 250 and 300 minutes.

Regarding growth, we estimate our balance sheet to grow between 250 and 300 million.

Speaker 4: We foresee deposit growth to continue to be strong. We will use any excess over net loan growth to further reduce higher cost institutional deposits and wholesale funding, including our renewing maturities in force.

We foresee deposit growth to continue to be strong we will use any excess over at net loan growth to further reduce higher cost institutional deposits and wholesale funding, including our renewing maturities in for Q.

Speaker 4: Given competition for depoces, we expect the names to continue to decrease in the fourth quarter, but clearly to a lesser degree than in 3Q. While there are significant maturities of customer time depoces in 4Q, the gap to cover between the average previous rate and the current one is lower.

Given competition for deposits, we expect the NIM to continue to decrease in the fourth quarter, but clearly to a lesser degree than in <unk>.

Sharymar Kanledon: I would like to take a moment to discuss the change in organic improvement in AOCI, which is lower than discussed in previous quarters. Does moderate amount result from revised market expectations regarding easing monetary policy not taking place in the short term as had been expected earlier in the year? We will continue to actively manage our balance sheet to best position our bank for the remainder of 2023 and looking into 2024.

Well there are significant maturities of customer time deposits in for Q. They got to cover between the average previous rate and the current one is lower.

Speaker 4: Also, there was a significant emphasis on non-interest burden products as noted in this quarter's results, and we intend to continue to pursue additional growth as we onboard new relations.

Also there was a significant emphasis on noninterest bearing products as noted in this quarter's results and we intend to continue to pursue additional growth as we on board new relationship.

Speaker 4: Regarding non-interesting, we expect to be similar to three-two-level.

Regarding noninterest income, we expect it to be similar to <unk> levels. We.

Speaker 4: We expect operating expenses to include non-recurring expenses related to the upcoming conversion. Well, we finalize the commission services currently utilized after.

Sharymar Kanledon: Continuing to slide 15, non-interest income in the third quarter was 22 million down by 4.7 million or 18% from 27 million in the second quarter of 2023. As reference earlier, 7 million of non-interest income were non-routine items. The decrease was primarily driven by lower gains on the early extinguishment of official b-advances and lower mortgage banking Com. This decrease in non-interest income was partially offset by higher loan level derivative income due to higher volume of derivative transactions with clients and the absence of the one of the 1.2 million loss in connection with the sale of one corporate debt security available for sale.

We expect operating expenses to include nonrecurring expenses related to the upcoming conversion, while we finalize decommissioning services currently utilized after conversion knowing that there are services that must run in parallel with it even if I had systems that will be discontinued throughout <unk> and in first Q 'twenty 'twenty four.

Speaker 4: know that there are services that must run in parallel with the new fios systems that will be discontinued throughout 4q and in first q of 2020.

Speaker 4: Finally, we expect probation for credit losses to be in or around 8 to 10 million next quarter as we do expect asset growth as I previously mentioned. I'll know pass it back to you.

Finally, we expect provision for credit losses to be in or around eight to 10 million next quarter as we do expect asset growth as I previously mentioned.

I'll pass it back to Jerry.

Speaker 3: Thanks, Sherry. So before I conclude the presentation this morning, I thought first we should give you an update on the upcoming conversion that we mentioned earlier in the call. So here on Slide 18, we start with the first thing and most important. We're still on track for our conversion to FIS, which will take place in early November .

Thanks, Sherry so before I conclude.

The presentation. This morning, I thought first we should give you an update on the upcoming conversion that we mentioned earlier in the call. So here on slide 18, we start with the first thing and most important we're still on track for a conversion to SaaS, which will take place in early November.

Sharymar Kanledon: Emernd assets under management total 2.1 billion as of the end of the third quarter down 55 million or 2.6% from the second quarter. This decrease was primarily driven by lower net new assets and market valuation. When compared to the same quarter a year ago, we saw an increase of 281 million or 15.5%. Primarily driven by net new assets which were 162 million and higher market valuation.

Speaker 3: Our primary objective is to move to a state-of-the-art course system in modern stacks.

Our primary objective is to move to a state of the art core system and modern stack and this of course will create a simplified and fully integrated ecosystem of applications.

Speaker 3: This in course will create a simplified and fully integrated ecosystem of application.

Sharymar Kanledon: Of note, this week the company approved a restructuring of its Bank of Life Insurance program as we surrendered and reinvest in higher yielding policy, what was increasing team member participation. We expect improved earnings of approximately 2 million per year in future periods. Turning to slide 16, third quarter non-interest expenses were 64.4 million down 8 million or 11% from the second quarter. As Jerry covered earlier, we consider 6.3 million of our expenses of quarter as non-routine expense items, excluding these items core non-interest expenses were 58 million in the third quarter of 2023.

Speaker 3: will result in a significant strengthening of cybersecurity and information security and push rough.

It resulted in a significant strengthening of cyber security and information security infrastructure.

Speaker 3: We're very confident in partnering with a well-known and recognized provider and financial services that recently rededicated themselves to focus solely on financial service.

We're very confident in partnering with a well known and recognized provider in financial services that recently re dedicated themselves to focus solely on financial services and above all things, even though I've listed a couple of other items here, we believe that the transition will provide the technological platform that will adequately and exceed the.

Speaker 3: And above all things, even though I've listed a couple other items here, we believe that the transition will provide the technological platform that will adequately and exceed the expectations supporting our...

Expectation supporting our company's growth.

Speaker 3: We'll turn a physical transformation and give a quick update here on the efforts going on. We've completed the reprash of five branches year to date and have two more to be completed before you rent. And this will complete our entire network, which is essential for our team members and customers to have the common look and feel of the Amherent experience in all locations.

We'll turn a physical transformation and give a quick update here on the efforts going on we've completed the refresh of five branches year to date and have two more to be completed before year end and this will complete our entire network, which is essential for our team members and customers to have the common look and feel of the amarin experience in all locations.

Sharymar Kanledon: The quarter over quarter decreased was primarily driven by the absence of many of the items that were included and secured that were no longer in this quarter, as well as lower advertising expenses resulting from campaigns in connection with our partnerships with professional sporting teams. And lower professional fees and connection with call center services that are no longer needed as a result of the engagement with FIS and the absence of additional consulting expenses into 2023.

Speaker 3: We have several new locations in the works in downtown Miami and Los Olis, which is downtown Fort Lauderdale in Tampa and in San Felipe in River Roaks in the Houston Marketplace. The consolidation of our Edgewater Florida location will occur here in the fourth quarter and it will coincide with the opening of our town.

We have several new locations in the works in downtown Miami, and Los Angeles, which is downtown Fort Lauderdale, and Tampa, and San Felipe and River Oaks in the Houston marketplace. The consolidation of our Edgewater, Florida location will occur here in the fourth quarter and it's.

Sharymar Kanledon: The decrease in non-interest expense was partially offset primarily by valuation expenses related to the transfer of a new year of the new year's base theory loan from loan help for investment to loan help for sale. In terms of our team, we have supported with 700 FT slightly lower from from 710 we had into Q. Out of the 700 members, 600 and 2 are employed by the bank and 98 by Amarin Mortgage.

Sharymar Kanledon: In terms of our team, we have supported with 700 FT slightly lower from from 710 we had into Q. Out of the 700 members, 600 and 2 are employed by the bank and 98 by Amarin Mortgage.

Will coincide with the opening of our downtown Miami branch and as we've previously announced we have new regional headquarters currently in process book in Broward County, So plantation, Florida in Tampa, Florida.

Speaker 3: And as we previously announced, we have new regional headquarters currently in process, both in Broward County, so Plantation, Florida and in Tampa, Florida.

Sharymar Kanledon: On that note, let's turn to slide 17, which focuses on Amarin Mortgage. On a standalone basis, Amarin Mortgage had a negative PPNR of 1.6 million in 3223, which was consistent with 2G results. Our efficiency ratio, excluding the activities from Amarin Mortgage, improved from 64.10% to 62%. During the third quarter, the company originated and purchased approximately 84 million and loans through Amarin Mortgage. And as noted on the slide, these are related to the bank's customers and relationships.

Speaker 3: And then we'll turn to give an update on brand awareness. So on this slide, we show the key partnerships we have in place to support and enhance our brand awareness.

And then we'll turn to give an update on brand awareness. So on this slide we show the key partnerships, we have in place to support and enhance our brand awareness during the quarter, we announced we entered into a multiyear extension of our partnership with the University of Miami Hurricanes, which comes with significant additional branding opportunities.

Speaker 3: During the quarter we announced we entered into a multi-year extension of our partnership with the University of Miami Hurricanes, which comes with significant additional branding opportunities.

Speaker 3: We also build on our already strong partnership with the Florida Panthers, as we are now the naming rights partner of Amherst Bankering in Broward County. We traded back the helmet sponsor rights which gave us national exposure for much improved regional focus with naming.

We also build on our already strong partnership with the Florida Panthers as we are now the naming rights partner of Ameren Bank Arena in Broward County.

We traded back the helmet sponsor rights, which gave us national exposure for much improved regional focus with naming rights. We also view the naming rights of the Broward County owned arena as a strategic step as part of our recently announced expansion plans there.

Sharymar Kanledon: The current pipeline shows 107 million in process or 266 applications as of October 18, 2023, with 84 million in race locks. And to provide some color on our expectations for next quarter, regarding growth, we estimate our balance sheet to grow between 250 and 300 million. We foresee deposit growth to continue to be strong. We will use any excess over net loan growth to further reduce higher cost institutional deposits and wholesale funding, including our renewing maturities in 4Q.

Speaker 3: We also view the naming rights of the Broward County-owned arena as a strategic step as part of our recently announced expansion plans there.

Speaker 3: Please note that we do not expect to increase marketing expense as a result of any of these partnerships.

Please note that we do not expect to increase marketing expense as a result of any of these partnership agreements you know the new deals we believe that these and our other partnerships position ameren for unmatched brand recognition and business growth in the markets we serve.

Speaker 3: We believe that these and our other partnerships position amaran for unmatched brand recognition and business growth in the markets we serve.

Sharymar Kanledon: Given competition for deposits, we expect the names to continue to decrease in the fourth quarter, but clearly to a lesser degree than in 3Q. While there are significant maturities of customer time deposits in 4Q, the gap to cover between the average previous rate and the current one is lower. Also, there was a significant emphasis on non-interest burden products as noted in this quarter's results, and we intend to continue to pursue additional growth as we onboard new relations.

Speaker 3: So I'll give a couple of closing remarks on where we are today. So if you turn to the last slide, here you can see we're near the end of our transformation.

So I'll give a couple of closing remarks on where we are today.

So if you turn to the last slide.

Here you can see we're nearing the end of our transformation phase. We're excited to have the executive leadership team set and we remain focused on attracting the right people to complement our existing team to achieve our strategic objectives.

Speaker 3: We're excited to have the executive leaders team set and we remain focused on attracting the right people to complement our existing team to achieve our...

Speaker 3: And I'll know we've continued to add more experienced commercial business development team members here in the fourth quarter. As I just mentioned, we're going to be completing the transition to FIS, which will provide the technological platform to support our growth.

And of note. We've continued to add more experienced commercial business development team members here in the fourth quarter as I just mentioned, we're going to be completing the transition to SaaS, which will provide the technological platform to support our growth initiatives.

Association. Regarding non-interest income, we expect it to be similar to 3-2 levels. We expect operating expenses to include non-recurring expenses related to the upcoming conversion. Well, we finalize the commissioning services currently utilized after conversion. Note that there are services that must run in parallel with the new FIS systems that will be discontinued throughout 4-2 and in 1-2 of 2024. Finally, we expect provision for credit losses to be in or around 8-10 million next quarter as we do expect asset growth as I previously mentioned.

Sharymar Kanledon: Association. Regarding non-interest income, we expect it to be similar to 3-2 levels. We expect operating expenses to include non-recurring expenses related to the upcoming conversion. Well, we finalize the commissioning services currently utilized after conversion. Note that there are services that must run in parallel with the new FIS systems that will be discontinued throughout 4-2 and in 1-2 of 2024. Finally, we expect provision for credit losses to be in or around 8-10 million next quarter as we do expect asset growth as I previously mentioned.

Speaker 3: And as I also just mentioned, our plan new locations are nearing completion. So banking centers and downtown Miami Fort Lauderdale River Oaks, Tampa, our new regional headquarters, much of which will happen either in the fourth quarter of 23 or early in the first quarter of next year.

And as I also just mentioned our planned new locations are nearing completion, so banking centers in downtown Miami Fort Lauderdale River Oaks tamper, our new regional headquarters.

Much of which will happen either in the fourth quarter of 'twenty three or early in the first quarter of next year.

Speaker 3: But at the same time, please know that we will be reducing square footage in other corporate locations by subleasing or exiting space as an offset.

But at the same time, please know that we will be reducing square footage and other corporate locations by sub leasing or exiting space as an offset.

Jerry Plush: Oh, no pass it back to Jerry. Thanks, Shary.

Jerry Plush: So before I conclude the presentation this morning, I thought first we should give you an update on the upcoming conversion that we mentioned earlier in the call. So here on slide 18, we start with the first thing and most important. We're still on track for our conversion to FIS, which will take place in early November. Our primary objective is to move to a state-of-the-art core system in modern stack. And this, in course, will create a simplified and fully integrated ecosystem of applications and will result in a significant strengthening of cybersecurity and information security infrastructure.

Speaker 3: And lastly, we're very proud to say that for the second consecutive year, Emernd Bank was recognized as one of Newsweek's top 100 most love work place.

Lastly, we are very proud to say that for the second consecutive year Ameren bankers recognized just in the U S. One of Newsweek's top 100, most loved workplaces.

Speaker 3: So before we move to Q&A, I just want to take a moment and say thank you again to all of my Emmer and team members for their dedication, energy and effort once again in this court.

So before we move to Q&A I just wanted to take a moment and say thank you again to all of my Amarin team members for their dedication energy and effort once again this quarter.

Speaker 3: So with that, I'll stop and Sharon, I will look to answer any questions you have. Operator, please open the line.

So with that I'll stop and sharing I will look to answer any questions you have.

Operator, please open the line.

Speaker 1: As a reminder, if you'd like to ask a question at this time, please press star 1-1 on your touchtone telephone and wait for your name to be announced.

As a reminder, if you'd like to ask a question at this time. Please press star one one on your Touchtone telephone and wait for your name to be announced.

Jerry Plush: We're very confident in partnering with a well-known and recognized provider and financial services that recently rededicated themselves to focus solely on financial services. And above all things, even though I've listed a couple other items here, we believe that the transition will provide the technological platform that will adequately and exceed the expectations supporting our company's growth.

Speaker 1: To withdraw your question, please press star 1, 1 again. Please stand by when we come-

To withdraw your question. Please press star one again.

Please standby, while we compile the Q&A roster.

Speaker 1: Our first question comes from a line of Michael Rose with Raymond J.

Our first question comes from the line of Michael Rose with Raymond James.

Speaker 5: Hey, good morning, everyone. Hope you're, uh, hope you're doing well.

Hey, good morning, everyone help euro hope you're doing well.

Jerry Plush: We'll turn a physical transformation and give a quick update here on the efforts going on. We've completed the reprash of five branches year to date and have two more to be completed before year end. And this will complete our entire network, which is essential for our team members and customers to have the common look and feel of the Amherent experience in all locations. We have several new locations in the works in downtown Miami and Los Olis, which is downtown Fort Lauderdale in Tampa and in San Felipe in River Roaks in the Houston Marketplace. The consolidation of our Edgewater Florida location will occur here in the fourth quarter, and it's will coincide with the opening of our downtown Miami branch.

Speaker 5: Hey, so, so, so, you know, the the step down in core expenses was

Hey.

Good morning, so so.

The step down in core expenses was better than we were kind of looking for if I annualize that it.

Speaker 6: you know, better than we were kind of looking for. If I annualize that, it obviously sets a pretty good tone as we think about next year. Just as we think about expenses and understanding the FIS conversion will happen in the fourth quarter. So maybe a little bit of elevation there, but just to help us think about expenses near a term and as we think about next year, just given that the transformation efforts are kind of winding down and you're gonna begin to reap, I think, you know, more of the rewards from the work that's been done over the past couple of years. are God's..."

And obviously, that's a pretty good tone as we think about next year, just as we think about expenses and understanding the Fas conversion will happen in the fourth quarter.

So maybe a little bit of elevation, there, but just help us think about expenses near term and as we think about next year just given that the transformation efforts are kind of winding down and you're going to begin to reap I think more of the rewards from the work that's been done over the past couple of years. Thanks.

Speaker 3: Yeah, Michael, I, it's Jerry, I'll take that one and, uh, Sherry, please add your color commentary. You know, the, the thing that's really important to note is that our expense base will be elevated. Again, the bulk of that is related to the fact that we're going to be running parallel, right? So I mean, both sets of...

Yeah, Michael It's Gerry I'll take that one and Sherry. Please add your color commentary you know the thing that's really important to note is that our expense base will be elevated again, the bulk of that is related to the fact that we're gonna be running parallel right. So I mean, both sets of of <unk>.

Jerry Plush: And as we previously announced, we have new regional headquarters currently in process, both in Broward County, so Plantation, Florida and in Tampa, Florida.

Jerry Plush: And then we'll turn the given update on brand awareness. So on this slide, we show the key partnerships we have in place to support and enhance our brand awareness. During the quarter, we announced we entered into a multi-year extension of our partnership with the University of Miami Hurricanes, which comes with significant additional branding opportunities. We also build on our already strong partnership with the Florida Panthers, as we are now the naming rights partner of Amherent Bank Arena in Broward County.

Speaker 3: of applications both to new and existing will be for the quarter. And so in a lot of respects, that is, you know, from our perspective.

Applications, both for new and existing will be for the quarter and so and a lot of respects that is.

Our perspective, something that for the fourth quarter and certainly in part of the first quarter will dissipate starting no later than the second quarter of next year. So you know I think sherri's comments were around you're going to see an elevation and you know in our mind.

Speaker 3: something that for the fourth quarter, and certainly in part of the first quarter, will dissipate starting no later than the second quarter of next year. So I think Sherry's comments were around.

Speaker 3: You're going to see an elevation and in our mind, they're not really going to be part of the core expense base going forward as you'll see the bump up and the climb.

Jerry Plush: We traded back the helmet sponsor rights, which gave us national exposure for much improved regional focus with naming rights. We also view the naming rights of the Broward County-owned arena as a strategic step as part of our recently announced expansion plans there. And please note that we do not expect to increase marketing expense as a result of any of these partnership agreements, you know, the new deals. We believe that these and our other partnerships position Amherent for unmatched brand recognition and business growth in the markets we serve.

They were not really going to be part of the core expense base going forward is you'll see the bump up in the decline.

Speaker 3: Look, I think expenses are something, I'm gonna give an overall remark, is something that we are gonna be continuously working on and certainly I hope you could tell with some of the comments that I made, that things that we're doing that are new, we are looking to offset them.

Look I think expenses are something you know I'm going to give an overall remark.

It's something that we are going to be continuously working on and certainly.

Hope you can tell with some of the comments that I made that the things that we're doing that are new we are looking to offset that so when you think about the marketing expense you know doing some of those initiatives and theres. Other things that we're swapping out are not going to do going forward not expecting increases the same thing to be said about the facilities.

Speaker 3: So when you think about the marketing expense, you know, doing some of those initiatives and there's other things that we're swapping out are not going to do going forward, not expecting increases, you know, the same thing to be said about the facilities expense.

Jerry Plush: So I'll give a couple of closing remarks on where we are today. So if you turn to the last slide, here you can see we're near the end of our transformation phase. We're excited to have the executive leadership team set and we remain focused on attracting the right people to complement our existing team to achieve our strategic objectives. And of note, we've continued to add more experience, commercial business development team members here in the fourth quarter.

Expense Carlos is working tirelessly with his team.

Speaker 3: Carlos is working tirelessly with his team.

Speaker 3: on looking at opportunities to pair back. We've talked about things like hoteling, which frankly fits really well with the mostly hybrid work model that we've been using here at Amherst.

On looking at opportunities to pair back you know we've talked about things like hotel in which you know frankly fits really well with the mostly hybrid work model that we've been using here at Amgen. So I would tell you there's a lot of moving parts in and out in and around expenses.

Jerry Plush: As I just mentioned, we're going to be completing the transition to FIS, which will provide the technological platform to support our growth initiatives. And as I also just mentioned, our plan new locations are nearing completion. So banking centers and downtown Miami, Fort Lauderdale, River Oaks, Tampa, our new regional headquarters, much of which will happen either in the fourth quarter of 23 or early in the first quarter of next year. But at the same time, please know that we will be reducing square footage in other corporate locations by sub-leasing exiting space as an offset.

Speaker 3: So I would tell you there's a lot of moving parts in and around expenses that we're gonna continue as we know there's an increase and there will be an increase in technology expense. There's no absence or but there are other things we're looking to do to reduce that. And we expect to gain additional efficiencies throughout 2024 as we start to see the benefits of having what I think is a much better integrated technology.

That you know we're going to continue as we know Theres, an increase and there will be an increase in technology expense, there's nowhere it sensor, but but there are other things, we're looking to do to reduce that and we expect to gain additional efficiencies throughout 2024, as we start to see the benefits of having you know what I think is a much.

Better integrated technology stack.

Speaker 6: Okay, that's helpful. And then I guess just putting it all together, obviously some headwinds still here on on-rays, but I think as we move through the years, it moved through next year, is it fair to assume that we'll hit a point where we start to kind of achieve positive operating leverages that kind of a realistic goal is we think about the back half of the year. Thanks.

Okay. That's helpful and then I guess, just putting it altogether.

Obviously, some headwinds still here on.

Jerry Plush: And lastly, we're very proud to say that for the second consecutive year, Amerant Bancorp recognized his new as one of Newsweek's top 100 most love workplaces. So before we move to Q&A, I just want to take a moment and say thank you again to all of my Amerant team members for their dedication, energy and effort once again in this quarter. So with that, I'll stop and share and I will look to answer any questions you have.

On rates, but.

I think as we move through the year as it moved through next year is it fair to assume that we will hit a point, where we start to kind of achieve positive operating leverage is that kind of a realistic goal as we think about the back half of the year.

<unk>.

Speaker 4: It is Michael. So when we think about the environment right now, I think there's consensus that we're either at the peak or close to it.

It is Michael so when we think about the environment right now I think there is consensus that we're either at the peak or close to it.

Operator: Operator, please open the line. As a reminder, if you'd like to ask a question at this time, please press star-1-1 on your touchtone telephone and wait for your name to be announced. To withdraw your question, please press star-1-1 again. Please stand by when we compile the Q&A roster.

Speaker 4: So although there can be different views as to the timing of an inflection point or the speed of a downward trend, irrespective of that when we think about the maturity that we have.

So although there can be different views as to the timing of an inflection point or the speed of a downward trend irrespective of that when we think about the maturities that we have and the.

Speaker 4: And the, and the gap of pricing that we would cover on those that are subject to repricing, I think it's going to, I think it's fair to say that the impact of pressures on the name will be lower in the, in the upcoming quarters, even more noticeable starting in 2020.

The pricing that we would cover on dose that are subject to repricing them I think it's I think it's fair to say that the impact of pressures on the NIM will be.

Lower in the and upcoming quarters, even more noticeable will start in 2020, Yeah, and you know Michael I mean, just to add to that Sheri and I and obviously the treasury team and in our Alco Committee Alright, Yeah asset liability Committee I Should've said.

Michael Rose: Our first question comes from a line of Michael Rose with Raymond James. Hey, good morning, everyone. Hope you're doing well. So the step down in core expenses was better than we were kind of looking for. If I annualize that, it obviously sets a pretty good tone as we think about next year, just as we think about expenses and understanding the FIS conversion will happen in the fourth quarter so maybe a little bit of elevation there.

Speaker 3: Yeah, and you know, Michael, I mean, just to add to that, you know, Sherry and I, and I obviously the Treasury team in our album.

Speaker 3: our asset liability committee, I should have said, meet and we talk about things, you know, it shouldn't be lost on anyone that the comment I made earlier about a reduction in excess cash being used when there's virtually no spread. We're continuously looking at ways to, in,

And we talk about things you know that it shouldnt be lost on anyone that the.

Comment I made earlier about a reduction in excess cash.

Being used when theres virtually no spread where we are.

Continuously looking at ways to.

Speaker 3: Given the rate pressures, the competitive pressures on the deposit side.

Given the rate pressures the competitive pressures on the deposit side look for offsets one of the really encouraging signs, though that that I think hopefully everyone has as a takeaway is the jump up in noninterest bearing and our teams are absolutely in Shannon and are actually.

Michael Rose: But just to help us think about expenses near a term and as we think about next year, just given that the transformation efforts are kind of winding down and you're going to begin to reap, I think, more of the rewards from the work that's been done over the past couple of years. Thanks. Yeah, Michael, I'll take that one and Sherry, please add your color commentary. The thing that's really important to note is that our expense base will be elevated.

Speaker 3: Leclerop sets, you know, one of the really encouraging times, though that I think hopefully everyone has a takeaway, is the jump up and non-interest bearing, and our teams are absolutely intended, and are actually...

Speaker 3: you know, starting to deliver more and more of non-intersparing relationships as part of new relationships, and obviously we're going back in existing relationships.

Starting to deliver more and more of noninterest bearing relationships as part of new relationships and obviously, we're going back and existing relationships and trying to see where we can also gain additional share there. So.

Speaker 3: and trying to see where we can also gain additional share there. So...

Michael Rose: Again, the bulk of that is related to the fact that we're going to be running parallel. So I mean, both sets of applications, both the new and existing will be for the quarter. And so in a lot of respects, that is from our perspective, something that for the fourth quarter and certainly in part of the first quarter will dissipate starting no later than the second quarter next year. So I think Sherry's comments were around, you're going to see an elevation and in our mind, they're not really going to be part of the core expense base going forward as you'll see the bump up and the decline.

Speaker 3: You know, we're very cognizant. I think as Sherry said, that it's low-neils at this stage, look like they've somewhat pee.

We're very cognizant I think as Sherry said that loan yields at this stage look like they've they've somewhat peaked.

Speaker 3: Or certainly near the peak and so it's really incumbent on us on the the

Certainly near the peak and so its really incumbent on us on the deposit cost side and.

Speaker 3: And as you can tell, we've only added broker and for duration and liabilities, and frankly those rates are cheaper than even the shorter term stuff that people are paying right now. So that's not as much of a drag as one might think, as you think about the name going.

And as you can tell we've only added brokered and for duration and liabilities.

And frankly those rates are cheaper than even the shorter term stuff that people are paying right now so that's not as much of a drag as one might think.

As you think about the NIM going forward.

Michael Rose: Look, I think expenses are something I'm going to give an overall remark. It's something that we are going to be continuously working on and certainly I hope you could tell with some of the comments that I made, that things that we're doing that are new. We are looking to offset them. So when you think about the marketing expense, doing some of those initiatives and there's other things that we're swapping out are not going to do going forward, not expecting increases.

Speaker 6: Very helpful and it's good to see just finally for me, just good to see TC up a little bit, capital up a little bit this quarter. You can continue utilizing the buyback, you're still trading below tangible books, still of authorization, just wanted to get your near term thoughts on usage of the buyback from here and just balancing some of the headwinds that are out there from a capital perspective. Thanks.

Very helpful.

It was good to see just finally for me just it's good to see.

Tcf a little bit.

Capital up a little bit this quarter, you continue to utilize the buyback youre still trading below tangible book still have authorization just wanted to get your kind of near term thoughts on on usage of the buyback from here and just balancing.

Some of the headwinds that are out there from a from a capital perspective. Thanks.

Michael Rose: The same thing to be said about the facility's expense, Carlos is working tirelessly with his team on looking at opportunities to pair back. We've talked about things like hoteling which frankly fits really well with the mostly hybrid work model that we've been using here at Amherst. So I would tell you there's a lot of moving parts in and around expenses that we're going to continue as we know there's an increase and there will be an increase in technology expense.

Speaker 3: You know, we talk about capital levels all the time, of course, like others do. And our view is that, you know, you need to look at all the tools in the toolkit. Certainly, bybacks are one of those. Obviously, we've continued, you know, our board approved, continuing to pay the dividend. And we like where we are capital-wise. We certainly don't like where we are valuation-wise. I'm sure that.

Yeah, you know, we talk about capital levels. All the time of course like others do and our view is that you know you need to look at all the tools in the toolkit certainly buybacks are one of those obviously we've continued you know our board approved continuing to pay the.

And and we like where we are capital wise, we certainly don't like where we are valuation wise.

I'm sure that.

Speaker 3: that is agreed upon by everyone. But our view is that, you know, we do need some of this capital, you know, from a growth standpoint. And so it's going to be a balancing act. And I think, again, that's what's nice about having the full set of tools and not being restricted to just one or the other, right? That we're going to use it all to grow through that we, you know, our view is, it's a combination of these things, right?

That is agreed upon by everyone, but our view is.

Michael Rose: There's no absence or but there are other things we're looking to do to reduce that and we expect to gain additional efficiencies throughout 2024 as we start to see the benefits of having what I think is a much better integrated technology stack. Okay, that's helpful. And then I guess just putting it all together, obviously some headwinds still here on on-rates, but you know, I think as we move through the years, it move through next year is it is fair to assume that we'll hit a point where we start to kind of achieve positive operating leverages that kind of a realistic goal is we think about the back half of the year.

We do need some of this capital.

From a growth standpoint, and so it's going to be a balancing act and I think again, that's what's nice about having the full set of tools.

And not being restricted to just one or the other right that we're going to use it all for grow through that.

Our view is it's a combination of these things right.

Speaker 3: So how we pay on dividend, how we utilize the buy back authorization, how we manage in what our expectations are for growth. And by the way, we're not going to grow for growth, say it's profitable growth, right? It is not going to be that, you know, obviously this is a nice quarter to add back to capital at 22 million. Our view is we need to be running in those levels.

How we pay on dividend, how we utilize the buyback authorization, how we manage and what our expectations are for growth and by the way, we're not going to grow for growth's sake, it's profitable growth right. It is not going to be that obviously.

Obviously this is a nice quarter to add back to capital at $22 million. You know our view is we need to be running in those levels going forward to support the growth plans that we have but I mean I just want you to know we sort of don't look at one of these things stand alone. If we look at all of them.

Michael Rose: Thanks. It is Michael. So when we think about the environment right now, I think there's consensus that we're either at the peak or close to it. So although there can be different views as to the timing of an inflection point or the speed of a downward trend, irrespective of that, when we think about the maturity that we have and the and the gap of pricing that we would cover on those that are subject to repricing, I think it's going to I think it's fair to say that the impact of pressures on the name will be lower in the in the upcoming quarters, even more noticeable start in 2020.

Speaker 7: going forward to support the growth plans that we have. But I mean, I just want you to know, we sort of don't look at one of these things standalone. We look at all of them. Needless to say, we do agree completely that when you're below book value, that that provides an opportunity to buy back. best asset by the way.

Needless to say, we do agree completely when you're below book value that that provides.

Opportunity to buyback.

Helpful. Thanks for all the comments I'll step back.

Okay. Thanks.

Michael Rose: Yeah, and you know, Michael, I mean, just to add to that, you know, Sherry and I and obviously the Treasury team and our Alco committee, our asset liability committee, I should have said, meet and we talk about things, you know, it shouldn't be lost on anyone that the comment I made earlier about a reduction in excess cash, you know, being used when there's virtually no spread. We're continuously looking at ways to, you know, given the rate pressures the competitive pressures on the deposit side, look for offsets, you know, one of the really encouraging signs though that that I think hopefully everyone has as a takeaway, is the jump up and non-interest bearing and our teams are absolutely intended and are actually, you know, starting to deliver more and more of non-interest bearing relationships as part of new relationships and obviously we're going back in existing relationships and trying to see where we can also gain additional share there.

Speaker 1: Our next question comes from a line of Brady Galey with KBW.

Our next question comes from the line of Brady Gailey with <unk>.

Hey, Thanks, good morning, guys.

Speaker 8: Mind-grading? So the net interest margin guidance for 4Q as far as being down less than 3Q, and that's a pretty wide range just given 3Q down about 25 basis points. Is there any way to tight-seat that range for 4Q, and then how? Do you think that 4Q will be the bottom in the them, and you could see some expansion next year? Do you think there could be more downside in 24?

Good morning Brady.

So the net interest margin guidance for <unk> as far as being down less than three 2 billion that's a pretty.

Wide range, just given <unk> was down about 25 basis points is there any way to do it.

Tight.

Ed.

Our range for <unk> and then how did.

Do you think that <unk> will be the bottom.

And you could see some expansion next year do you think there could be more downside in 'twenty four.

Speaker 3: Yeah, greaty look, I think this is the quarter right where asset yields kind of top out. I think deposit cost.

Yes, Brady look I think this is the quarter right, where asset yields kind of top out I think deposit costs continue just for competitive purposes look everyone.

Speaker 3: and you just for competitive purposes, look everyone.

Speaker 3: I'd like to say we're putting on the right kind of deposits. You know, we've talked a lot about not just putting on.

I'd like to say, we're putting on the rates kind of deposits.

Michael Rose: So, you know, we're very cognizant, I think as Sherry said, that low yields at this stage look like they've somewhat peaked or certainly near the peak and so it's really incumbent on us on the deposit cost side and as you can tell, you know, we've only added brokerage and, you know, for duration and liabilities and frankly those rates are cheaper than even the shorter term stuff that people are paying right now so that's not as much of a drag as one might think, you know, as you think about the nim going forward. Very helpful and, you know, it's good to see just finally for me, just it's good to see, you know, TC up a little bit, you know, capital up a little bit this quarter.

You know we've talked a lot about not just putting on.

Speaker 3: you know, and we've run down all that institutional stuff that comes from aggregators.

We've run down all of that institutional stuff that comes from Aggregators. Our view is that yes of course, there is going to continue to be pressure on funding costs.

Speaker 3: Our view is that, yeah, of course, there's going to continue to be pressure on funding costs. That we certainly think between what we need to offer and what consumers are demanding are going to result in pressure. Whether that...

We certainly think between what we need to offer and what consumers are demanding.

Are you now is going to result in pressure whether that.

Speaker 3: remains to be seen is that somewhere within the range of much lower to midway, I would tell you right now, expectations are that it's really going to depend on us and our ability to generate more non-interest bearing and frankly even more lower cost international to supplement what we're doing to mess with.

It remains to be seen is that somewhere within the range of you know much lower to mid way.

I would tell you right now expectations are that its really going to depend on us and our ability to generate more noninterest bearing and frankly, even more lower cost international.

To supplement what we're doing domestically. So I think it's really going to be something that could be a wide range on that and I think that's why sharing I'm not giving you something very specific I would just say, it's certainly not going to be as dramatic. The flip side is there is definitely going to be.

Michael Rose: You can, you utilize the buyback, you're still trading below tangible books, still up authorization, just wanted to get your kind of near-term thoughts on usage of the buyback from here and just balancing some of the headwinds that are out there from a capital perspective. Thanks. Yeah, you know, we talk about capital levels all the time, of course, like others do and our view is that, you know, you need to look at all the tools in the toolkit.

Speaker 3: So I think it's really gonna be something that could be a wide range on that. And I think that's why Sharon, I have not given you something very specific. I would just say it's certainly not gonna be a dramatic. The flip side is, is there definitely gonna be some? So yes, I know it's...

So, yes, I know its a wide range, but.

Speaker 3: I think that everyone in the market plays. This is the period where level in 24, absolutely, that's all right.

You know.

I think that everyone in the marketplace. This is the period, where will that level in 2000 and for absolutely that's our expectation.

Michael Rose: Certainly, buybacks are one of those. Obviously, we've continued, you know, our board approved continuing to pay the dividend and we like where we are capital-wise. We certainly don't like where we are valuation-wise. I'm sure that.., that is agreed upon by everyone. But our view is that, you know, we do need some of this capital from a growth standpoint. And so it's going to be a balancing act. And I think, again, that's what's nice about having the full set of tools and not being restricted to just one or the other, right?

Speaker 3: I think we have another quarter of where there's going to be some compression and just it's inevitable just given Mark.

I think we have another quarter of where theres going to be some compression just it's inevitable just given market conditions.

Speaker 8: All right, yeah, that's fair. But then I want to make sure I heard you read your comment about the loan yield as peak. I mean, I know the loan yield was flat length quarter. And I know your loan yield, I mean.

Alright.

Fair.

I wanted to make sure I heard your comment about the loan yield Cos peak.

The loan yield was flat linked quarter and I know your loan yield.

Speaker 8: 6.8% I mean that's you know above average and a great loan yield, but I just wanted to make sure I Understand that dynamic well that the loan yield has peaked because I would have thought there would have been maybe some continued You know, especially like CRE loan refreshing higher and you could see that yield trip higher, but you're saying you think it's flat come here

Six 8%.

Above average and a great well.

But I just wanted to make sure.

Understand that dynamic well, but the loan yield has piece because I would've thought there would have been maybe some continued.

Michael Rose: That we're going to use it all to grow through that we, you know, our view is it's a combination of these things, right? You know, so how we pay on dividend, how we utilize the buyback author, our organization, how we manage in what our expectations are for growth. And by the way, we're not going to grow for growth, say it's profitable growth, right? It is not going to be that, you know, obviously this is a nice quarter to add back to capital at 22 million, you know, our view is we need to be running in those levels going forward to support, you know, the growth plans that we have.

Especially like CRE loan repricing higher and you could see that you will drift higher but youre, saying you think its flat from here.

Speaker 3: Look, I think our view is the biggest driver in increasing loan yields right has been the fact that we've been in that sort of sensitive organization. And so the positive has been that that's been the bigger driver versus higher rate new production.

Look I think our view is.

The biggest driver and increasing loan yields right has been the fact that we've been in an asset sensitive organization and so the positive has been that's been the bigger driver versus higher rate new production year.

Speaker 3: You're absolutely asking the right question, which is, yes, we will have higher rate new production in the fourth quarter. I don't know that that'll be as meaningful and often to make it more than to just give you the view of, hey, it's flatish, maybe it's a better way to say it, as opposed to, we think we are gonna continue to see improvement in the fourth quarter. Do I believe if we can book three, 400 million of production, that new production, that there'll be some pop, there should be,

You're absolutely asking the right question, which is yes, we will have a higher rate new production in the fourth quarter.

Michael Rose: But I mean, I just want you to know, we sort of don't look at one of these things stand alone. We look at all of them. Needless to say, we do agree completely that when you're below book value, that that provides an opportunity to buy back helpful. Thanks for all the comments. I'll set back. Okay. Thanks. Thank you.

No that that'll be as meaningful in answer to make it more than to just give you. The view of hey, it's flattish maybe is a better way to say it as opposed to we think we're going to continue to see improvement in the fourth quarter. Due I believe if we can book three $400 million of production net new production that there'll be some pop there should be.

For sure.

Speaker 3: But I still think that the way we're looking at things, there's also some other stuff that'll come off that may have been really part of that at that tentative reprised portfolio. So it's really a mix issue that'll come into play there. But my view is I think we're better off telling you flatish.

But I still think that the way we're looking at things.

Brady Gailey: Our next question comes from a line of Brady daily with KBW. Hey, thanks. Two more to guys. So the net interest margin guidance for 4Q as far as being down less than 3Q and that's a pretty, you know, wide range just given 3Q is down about 25 basis points. Is there any way to, you know, type that range for 4Q and then how do you think that 4Q will be the bottom in the name and you could see some expansion next year.

Also some other stuff that will come off that.

May have been you know really part of that asset sensitive repriced portfolio right. So.

It's really it's really a mix issue that will come into play there, but my view is I think we're better off telling you flattish in.

Speaker 7: give you the positive upside, you know, depending on product.

Give you the positive upside.

On production.

Speaker 8: All right, then the surrendered bully and the $2 million benefit. But was any of that in the 3-Q run rate or is that all a positive kind of looking forward?

Okay.

And then the surrendered bully and the $2 million benefit was any of that in the <unk> run rate or is that all a positive kind of looking forward.

Brady Gailey: Do you think there could be more downside and 24? Yeah, great. Look, I think this is the quarter right where asset yields kind of top out. I think deposit costs continue just for competitive purposes. Look, everyone. I'd like to say we're putting on the right kind of deposits. You know, we've talked a lot about not just putting on, you know, and we've run down all that institutional stuff that comes from aggregators.

Speaker 4: It's a positive looking forward. We expect that yield to materialize fully in 2024 going.

It's a positive looking forward, we expect that yield to materially fully in 2020 for going forward.

Speaker 8: And then finally, for me, just a bigger picture question. I know we have the 1% ROA target out there. You guys were pretty much at that level last year, but not near that level here today this year. I mean, maybe the industry is not even there either. I know profitability is not a pressure everywhere. But any updated thoughts on timing as far as when you can hit that one ROA?

Okay, Alright, and then finally for me just a bigger picture question I know we have.

A 1% ROA target out there you guys were.

Pretty much at that level last year.

But you know.

Not near that level year to date this year.

I mean, maybe the industry is not even there neither are their profitability is under pressure everywhere, but any updated thoughts on timing.

Brady Gailey: Our view is that, yeah, of course, there's going to continue to be pressure on funding costs, you know, that we certainly think between what we need to offer and what consumers are demanding are, you know, is going to result in pressure. You know, whether that remains to be seen is that, you know, somewhere within the range of, you know, much lower to midway. You know, I would tell you right now expectations are that it's really going to depend on us and our ability to generate more non-interest bearing and frankly even more lower cost international to supplement, you know, what we're doing domestically.

Timing as far as when you can hit that one ROA.

Speaker 7: Yeah, look, we absolutely expect to be back on track in 2024. I think with the great additions we've been getting on

Yeah look.

We absolutely expect to be back on track in 2024.

I think with the great additions we've been.

Getting on the team.

Speaker 7: with all the other initiatives we've been talking about.

With the all the other initiatives we've been talking about.

Speaker 7: You know, I do want to just comment, you know, as an organization, we've had considerable time, energy, and expense around this core conversion. You know, there's a lot of additional support that is going into this and, you know, our view is getting this done is going to really clear the runway for us.

I do want to just comment you know as an organization we've had considerable time energy and expense around this core conversion.

You know there's a lot of additional support that is going into this and you know our our view is getting this done.

Brady Gailey: So I think it's really going to be something that, you know, could be a wide range on that. And I think that's why Sharon, I have not given you something very specific. I would just say it's certainly not going to be as dramatic. The flip side is, is there definitely.., to be some. So yes, I know it's a wide range, but you know, I think that everyone in the market plays, this is the period where will it level in 24?

We got a really clear the runway for us.

Speaker 7: as we go into 2024. So I think you have the positive of all these great people that have joined the, in my opinion, an already great...

You know as we go into 2024, so I think he has a positive of all these great people that have joined in my opinion, an already great team.

Speaker 7: and you know you get the production that's going to come from that, you get the conversion pass this.

And you'll get the production that's going to come from that you get the conversion past us.

Speaker 7: the halo effect of all this great new branding, and it's much more targeted branding, I expect a much longer 2024. Look, the reality is that also you have to caveat that is that also depends on the economic conditions that go forward in 24, but we are doing all the things we can within our control to drive towards making sure that we're back in track and that 1% plus 12%.

Get the Halo effect of.

While this great new branding.

Much more targeted branding.

I expect a much stronger 2024 look the reality is that also you have to caveat that is that also it depends on the economic conditions that go forward in 'twenty four but we are doing all the things we can within our control.

Brady Gailey: Absolutely, that's our expectation. I think we have another quarter of where there's going to be some compression, and just it's inevitable, just given market conditions. All right, yeah, that's fair. But then I want to make sure I heard your comment about, you know, the loan yield has peaked. I mean, I know the loan yield was flat length quarter, and I know your loan yield, I mean, it's 6.8%. I mean, that's, you know, above average and a great loan yield, but I just wanted to make sure I understand that dynamic well that the loan yield has peaked, because I would have thought there would have been maybe some continued, you know, especially like CRE loan, replacing higher, and you could see that yield drift higher, but you're saying you think it's flat, come here.

To drive towards making sure that we're back on track in that one 1% plus 12%.

Speaker 7: type of metrics that we talked about. And as Sherry mentioned in her comments, look, we're gonna have a bumpy fourth quarter, first quarter, just if you look at a pure efficiency ratio just from, and we're giving you that without trying to exclude those things like the one time or non-retiring, we're just saying, look, efficiency's gonna be higher because we have to incur these expenses. So, but the expectation is absolutely to get this place back on track and get back in that.

The metrics that we talked about and as Sherry mentioned in her comments look we're going to have a bumpy fourth quarter first quarter. Just if you looked at a pure efficiency ratio just from you know.

And we're giving you that without trying to exclude those things like their one time or nonrecurring. We're just saying look efficiency is going to be higher because we have to incur these expenses. So.

Brady Gailey: Look, I think our view is the biggest driver in increasing loan yields, right, has been the fact that we've been in that sort of sensitive organization. And so the positive has been that that's been the bigger driver versus higher rate new production. You're absolutely asking the right question, which is, yes, we will have higher rate new production in the fourth quarter. I don't know that that'll be as meaningful an answer to make it more than to just give you the view of, hey, it's flatish.

But the expectation is absolutely to get displays back on track and get back in that 60% to 60% range are we I think we've hit and then Unfortunately has had the bounce back up but I also would tell you Brady look we've had a choppy year.

Speaker 3: to a 60% range of weed. I think we've hit, you know, and then unfortunately it's had the bounce back up.

Speaker 3: But I also would tell you Brady, look, we've had a choppy year and I think, you know, because obviously there's been some one-time items that they're in the higher provision. We reported last quarter.

I think because obviously theres been some one time items there in the higher provision we reported last quarter.

Speaker 7: We think that we've done a really good job of assessing risk in the portfolio and getting, which is why our reserve coverage is higher. In this quarter, in particular, I do just want to note, we had some elevated charge offs, but we're accelerating our efforts to try and get the NPLs and NPAs offer books.

We think that we've done a really good job of assessing risk in the portfolio and getting which is why our reserve coverage is higher you know and in this quarter in particular I do just want to note. We had some elevated charge offs, but we're accelerating our efforts to try and get the NPL and NPA is off our books.

Brady Gailey: Maybe it's a better way to say it as opposed to we think we are going to continue to see improvement in the fourth quarter. Do I believe if we can book three, four hundred million in production, that new production, that there'll be some pop? There should be, for sure. But I still think that the way we're looking at things, there's also some other stuff that'll come off that, you know, may have been, you know, really part of that asset, tentative, reprised portfolio, right?

Speaker 7: And so that created some additional noise. I know you commented on that and you're right up, but our view is it's better to get this stuff done and off the books as fast as possible and get them back into earning status. Get that money back into earning status. That's gonna help too. Yeah.

And so that created some additional noise.

I know you've commented on that in your write up but you know our.

Our view is it's better to get this stuff done and off the books as fast as possible and get them back into earning status get that money back into earning status.

Brady Gailey: So, you know, it's really, it's really a mix issue that'll come into play there. But my view is, I think, you know, we're better off telling you flatish and give you the positive upside, you know, depending on production. All right. And then the surrendered boli and the two million dollar benefit. But was any of that in the three key run rate, or is that all a positive kind of looking forward? It's a positive looking forward.

That's going to help too.

Okay, great. Thanks sure.

Yep.

Yeah.

Speaker 1: Our next question comes from a line of Stephen Scouton with Piper Sandler.

Our next question comes from the line of Stephen Scouten with Piper Sandler.

Hey, good morning, everyone.

Speaker 9: I guess I'd love to kind of touch on credit if we could and kind of

Hey, Steve.

I guess I'd love to kind of touch on <unk>.

Credit, if we could and kind of.

Speaker 9: If you can give a view for how you think credit costs can kind of stabilize from here and what you would kind of say to investors to get investors to give them some confidence around that. And obviously choppy for the last four quarters and maybe specifically the pace to charge off you might expect from the consumer direct portfolio.

Maybe if you could give a view for how you think credit costs could kind of stabilize from here and what you would kind of stay to investor to get investors to give them some confidence around that and obviously choppy.

Brady Gailey: We expect that yield to materialize fully in 2024 going forward. Okay. And then finally, for me, just a bigger picture question. I know we have the, you know, 1% ROA target out there. You guys were pretty much at that level last year. But, you know, not near that level here today, this year. And I mean, maybe the industry is not even there either. I know profitability is not a pressure everywhere. But any updated thoughts on your timing as far as when you can hit that one ROA?

<unk> for the last four quarters, and maybe specifically the pace of charge offs you might expect from the consumer direct portfolio at this point.

Speaker 3: Yeah, I think, let me go and backwards. We expect that to improve indirect consumer charge offs on a go-forward basis. I think Sherry made a comment that portfolio, the expectation duration wise, it's getting smaller and smaller every quarter and maximum two years out before it's completely run off.

Yeah, I think let me go backwards, we expect that to improve indirect consumer charge offs on a go forward basis, I think sheri made a comment that portfolio the expectation duration wise.

Smaller and smaller every quarter and you know maximum two years out before it's completely run off.

Brady Gailey: Yeah, look, we absolutely expect to be back on track in 2024. I think with the great additions we've been getting on the team with all the other initiatives we've been talking about, you know, I do want to just comment, you know, as an organization, we've had considerable time, energy, and expense around this core conversion. You know, there's a lot of additional support that is going into this. And, you know, our view is getting this done is going to really clear the runway for us.

Speaker 7: So that would be the view, yes, that will improve as we move forward. You know, we think we saw an acceleration and now it's coming the right.

So that would be the view, yes that will improve as we move forward. We think we saw an acceleration in knowledge, it's coming to the right direction for us.

Speaker 3: You know, we've had a couple million dollars worth of charges that related, you know, from small business.

We've had.

Couple of million dollars worth of charges that related you know from small business.

Speaker 3: You know, our view is, you know, that's been a business we've really tightened our credit criteria. It's not actually something we've done anywhere near the emphasis that have been done in the past.

Our view is you know that's been a business, we've really tightened our credit criteria.

It's not actually something we've done is anywhere near the emphasis that had been done in the past and you know the expectation is there that something we're going to continue to closely monitor but the big thing has been these you know you're just saying in the last several quarters there've been a bunch of legacy credits. Yes. There was one that was a south Florida.

Speaker 3: and you know the expectation is there that some were going to continue to closely monitor. But the big thing has been these...

Brady Gailey: Ross, as we go into 2024, so I think you have the positive of all these great people that have joined the, in my opinion, an already great team, and you know, you get the production that's going to come from that, you get the conversion past us, you get the halo effect of, you know, all this great new branding, you know, and it's much more targeted branding, I expect a much stronger 2024. Look, the reality is that also you have to caveat that is that also depends on the economic conditions that go forward in 24, but we are doing all the things we can within our control to drive towards making sure that we're back in track in that 1%, 1% plus 12%, you know, type of metrics that we talked about.

Speaker 3: you know of you just saying in the last several quarters there been a bunch of legacy credit chest there was one that was a south Florida credit in the first quarter no question but there been a bunch of these legacy credits and it's one of the reasons why

In the first quarter no question, but there've been a bunch of these legacy credits and it's one of the reasons why we stepped up and accelerated you know made the decision to take a haircut on selling this New York Creek property. It was the single largest exposure left in the portfolio frankly, it's one of the largest single exposures.

Speaker 3: stepped up and accelerated, you know, made the decision to take the haircut on selling this New York Creek property. It was the single largest exposure left in the portfolio. Frankly, it's one of the largest single exposures we had in the entire portfolio. And our view was better to take that haircut now and get that off the books. And as you can see, we produced our exposure down to 240 million as a result of that sale.

We had in the entire portfolio and our view was better to take that haircut now and get that off the books and as you can see we produced our exposure down to $240 million as a result of that sale and the view is we've got a good line of sight into performance on the rest of that portfolio. So all of that.

Speaker 7: And the viewers, we've got a good line of sight into performance on the rest of that portfolio. So...

Brady Gailey: And as Shary mentioned in her comments, look, we're going to have a bumpy fourth quarter, first quarter, just if you look at a pure efficiency ratio just from, you know, and we're giving you that without trying to exclude those things like the one time or non-recurring, we're just saying, look, the efficiency is going to be higher because we have to incur these expenses, so, but the expectation is absolutely to get this place back on track and get back in that 60%, you know, a 60% range of weed, I think we've hit, you know, and then, unfortunately, it had the bounce back up, but I also would tell you, Brady, look, we've had a choppy year, and I think, you know, because obviously there's been some one-time items that they're in the higher provision we reported last quarter, you know, we think that we've done a really good job of assessing risk in the portfolio and getting, you know, which is why our reserve coverage is higher, you know, and in this quarter, in particular, you know, I do just want to note, we had some elevated chargeoffs, but we're accelerating our efforts to try and get the NPLs and NPAs offer books, and so that created some additional noise. I know you commented on that and you're right up, but, you know, our view is it's better to get this stuff done and off the books as fast as possible and get them back into earning status, get that money back into earning status. That's going to help too. Okay, great. Thanks, Jerry. Yep.

Speaker 7: All that being said, you know, look, the crystal ball you have with this, we think our teams are doing a really good job of staying on top of relationships, you know, following through with no-your-customer. You know, could there be an unexpected, of course, but the view right now is we think we've done a really good job of looking, certainly, at the largest ones, which have created the most noise.

Being said you know look at the Crystal Ball do you you have with this we think our teams are doing a really good job of staying on top of relationships. Following through with know your customer could there be an unexpected of course, but the view right. Now is we think we've done a really good job of looking certainly at the largest ones which is.

Created the most noise.

Speaker 7: But again, there's been a lot. Unfortunately, we have had some significant events around that New York pre-Portfolio. And that's no surprise. I think we've played.

But again, you know that there's been a lot. Unfortunately, we have had.

Some significant events around that New York <unk> portfolio and that's no surprise.

Bryce I think we've.

Paid even more and more attention.

On that one.

Speaker 9: Yeah, that makes sense. And so I guess, I mean, it sounds like you feel like maybe you're your past.

Yes that makes sense, so I guess I mean, it sounds like you feel like maybe your past.

Speaker 9: the lion share the immediate risk. I mean, obviously like you said, we don't have a crystal ball. We don't know what's coming next year, but I mean, 60 some basis points and then charge us so far this year, 32 last year, if you had to peg a number for 24, kind of somewhere in the middle, or I mean, I guess how do we think about the ability for that to normalize?

The lion's share of the immediate risks I mean, obviously like you said, we don't have a crystal ball, we don't know what's coming next year, but I mean 60, some basis points in net charge offs. So far this year 32 last year, if you had to peg a number for 'twenty four.

Somewhere in the middle or I mean, I guess, how do we think about the ability for that to normalize for one year.

Speaker 3: Yeah, look, our expectation again, these have been the lumpy credits. The ones that we had the most...

Look our expectation again these have been the lumpy credits the ones that we had the most.

Speaker 7: You know, we'll say it placed the most time in energy to watch and had concern with.

We'll say it placed the most time and energy to watch and had concerned with you've now seen come through right and if you look at what's in Npls and N P. A's.

Speaker 3: You've now seen come through, right? And if you look at what's in NPLs and NPAs.

Steven Scouten: Our next question comes from a line of Steven Scouton with Piper Sandler. Hey, good morning, everyone. Hey, Steven.

Speaker 3: in the real state-owned portfolio, the two largest pieces of that are based off the New York. And so, you have the view, yeah, I mean to the extent we can continue to see paydowns in New York.

Any in the real estate owned portfolio the.

The two largest pieces of that are based off in New York and so you know the view, yes, I mean to the extent we can continue to see Paydowns in New York, We continue to see and closely monitor that portfolio I think the Lumpiness that's created those charges.

Steven Scouten: I guess I'd love to kind of touch on credit if we could and kind of, maybe if you can give a view for how you think credit costs could kind of stabilize from here and what you would kind of say to investors to give them some confidence around that and obviously choppy for the last four quarters and maybe specifically the pace of chargeoffs you might expect from the consumer direct portfolio at this point. Yeah, I think let me go and backwards.

Speaker 3: you to see, you know, in closing manner that portfolio. I think the lumpiness that's created those charges will come down pretty.

Will will come down pretty significantly probably to the levels that you talked about 33% range and Gary talk a little bit more color on if we look at the charges compensation for the quarter a reduction of eight basis points in the conversion of the reserve it's related to charge offs previously reserved so that takes the new charge offs closer to.

Speaker 7: Probably to the level that you taught about 30 and point three.

Speaker 4: And Jerry, to add a little bit more color of the way, if we look at the charge of compositions for the quarter, the reduction of a basis points in the coverage of the reserve, it's related to charge of previously reserved. So that takes the new charge of closer to 30. And when we look into that composition itself, and we specifically will look into the indirect portfolio, we are seeing the behavior of a reduction of charge of starting to take place this quarter. A little bit later within the quarter, then what we were expecting, but definitely behavior showing improved.

Steven Scouten: We expect that to improve indirect consumer chargeoffs on a go-forward basis. I think Jerry made a comment. That portfolio, the expectation duration wise, you know, it's getting smaller and smaller every quarter and, you know, maximum two years out before it's completely run off. So that would be the view, yes, that will improve as we move forward. You know, we think we saw an acceleration and now it's- It's coming the right direction for us.

Dirty.

And when we look into that competition itself and we specifically were looking to the indirect portfolio. We are seeing the behavior of a reduction of charges starting to take place this quarter a little bit later within the quarter than what we were expecting but definitely behavior showing improvement.

Speaker 9: Got it helpful. And maybe moving to the deposit side, Jerry, you noted an international deposit growth at the focus because you have for a bit now, but that book's been relatively flat. What kind of changes course there? What would allow you to grow it? And any CD, maturities coming on that will help on the deposit side at all.

Got it helpful.

Moving to the deposit side.

Jerry you noted international deposit growth with a focus because you have for a bit now but that book has been relatively flat what kind of changes of course, there are what would allow you to grow it in any.

Steven Scouten: You know, we've had a couple million dollars worth of charges that related, you know, from small business. You know, our view is, you know, that's been a business we've really tightened our credit criteria. It's not actually something we've done is anywhere near the emphasis that have been done in the past. And you know, the expectation is there that some were going to continue to closely monitor. But the big thing has been these things, you know, of you just saying in the last several quarters, there have been a bunch of legacy credits.

CD maturities coming on that will help on the deposit side at all.

Speaker 7: Yeah, look, I think the team, you know, it's taken us a couple quarters to get the synergy of the group to sort of get our footing of refocusing on this. Remember,

Yeah look I think the team.

It's taken US a couple of quarters to get the synergy of the group to sort of get our footing of refocusing on this for a member.

Speaker 7: We had prior to this year, it really been in maintenance mode there. You know, a combination of stabilizing it, you know, back, you know, two years ago to, you know, coming through the other side of COVID.

We had prior to this year it really been in maintenance mode. There.

Combination of stabilizing yet you know back two years ago to coming through the other side of Covid.

Steven Scouten: Yes, there was one that was a South Florida credit in the first quarter. No question, but there have been a bunch of these legacy credits. And it's one of the reasons why we stepped up and accelerated, you know, made the decision to take the haircut on selling this New York Cree property. It was the single largest exposure left in the portfolio. Frankly, it's one of the largest single exposures we had in the entire portfolio.

Speaker 7: So travel is just resumed. We want to be very cautious and make sure that what we are growing, we have very good KYC, BSA AML in place.

So travel is just resumed we want to be very cautious and make sure that what we are growing we have very good <unk> BSA AML and place and so I think we've been gaining more and more confidence there.

Speaker 7: And so I think we've been gaining more and more confidence there. Have to remember that the bulk of that portfolio is, customers are using those accounts. So, you know, really the net growth we need to get for this to grow is exactly your question, which is we have to book more new business.

I have to remember that the bulk of that portfolio is customers who are using those accounts. So really the net growth we need to get for this to grow was exactly your question, which is we have to book more new business.

Steven Scouten: And our view was better to take that haircut now and get that off the books. And as you can see, we produced our exposure down to 240 million as a result of that sale. And the view is we've got a good line of sight into performance on the rest of that portfolio. So all that being said, you know, look, the crystal ball, you have with this. We think our teams are doing a really good job of staying on top of relationships, you know, following through with no your customers.

Speaker 3: and our expectation is that is in the process of rent.

And our expectation is that is in the process of ramping up.

Speaker 7: And Stephen, I apologize. I think your second question was around CD maturities in the quarter.

And Steven I apologize I think your second question was around CD maturities in the quarter.

Speaker 7: Yeah, just curious if there's anything coming that would allow, you know, some of the funding costs pressure to a bait at all. Not that other CD costs are going down yet, but just kind of wondering if there's a demo. I was going to say, you know, I think what Sherry's remarks were, is that we look at the delta, what is maturing as to be much closer. Right. So these were fairly higher cost maturities this fourth quarter.

Yeah, just curious if there was any anything coming that would allow some of the funding cost pressure to abate at all.

I'll, let CD costs are going down yet, but just kind of wondering if there is yes.

Steven Scouten: You know, could there be an unexpected, of course, but the view right now is we think we've done a really good job of looking certainly at the largest ones, which have created the most noise. But again, you know, that's there's been a lot. Unfortunately, we have had some significant events around that New York Cree portfolio. And, you know, that's no surprise. I think we've, we've, you know, played even more and more attention on that one.

I was going to say.

I think with Sherry's remarks, where is that we look at the delta of what is maturing as to be much closer right. So these were fairly higher cost maturities. This fourth quarter. So even if we even did a retention we didn't expect significant incremental expense as a result of that.

Speaker 7: So even if we did a retention, we didn't expect significant incremental expanses as a result of that.

Speaker 9: Okay, that's very helpful. And then maybe just last thing for me, sounds like growth is picking back up already this quarter. You said the pipelines are strong. I know, you know, for most of the banks we look at, growth is kind of getting pulled back and people seem a bit more cautious. What kind of gives you confidence in the growth you guys are putting on? Is it new market expansion primarily? It gives you that confidence, or how can you speak to that old?

Okay. That's very helpful. And then maybe just last thing for me it sounds like growth is picking back up already this quarter.

Steven Scouten: Yeah, that makes sense. And so I guess, I mean, it sounds like you feel like maybe you're past the lion's share, the immediate risks. I mean, obviously, like you said, we don't have a crystal ball. We don't know what's coming next year. But I mean, 60 some basis points and then charge us so far this year, 32 last year, if you had to peg a number for 24 kind of somewhere in the middle, or I mean, I guess, how do we think about the ability for that to normalize them?

The pipelines are strong I know for most of the banks, we look at growth as kind of getting pulled back when people seem a bit more cautious what kind of gives you confidence.

And the growth you guys are putting on is it is it new market expansion primarily at <unk>.

Gives you that confidence or how can you speak to that a little bit.

I have to tell you I think it shouldnt be lost we made a big transition in.

Speaker 3: I have to tell you, I think it should be lost we made a big transition in...

Steven Scouten: Yeah, look, our expectation, again, these have been the lumpy credits. The ones that we had the most, you know, we'll say it placed the most time and energy to watch and had concern with. You've now seen come through, right? And if you look at what's in NPLs and NPAs in the real state on portfolio, the two largest pieces of that are based off the New York. And so, you know, the view, yeah, I mean, to the extent we continue to see paydowns in New York, we continue to see, you know, closely monitor that portfolio.

Speaker 7: in the team, in some of the composition of the team, particularly on the commercial side this year. And I think that that team is really gaining even more and more footing at this point. We're also expanding that team. I can tell you that we've got five new, strong business development officers that have either started or will be starting, frankly, next week.

The team and some of the composition of the team, particularly on the commercial side. This year and I think that that team is really gaining even more and more footing. At this point. We're also expanding that team I can tell you that we've got five new.

Strong business development officers that have either started or will be starting frankly next week.

Speaker 7: Here at the organization, we expect we've added in Broward, we've added in Miami Dade. I think we've had another additional person in the...

Here at the organization, we expect we've added in Broward we've added in Miami Dade I think we've had another additional person in the.

Steven Scouten: I think the lumpiness that's created those charges will come down pretty significantly, probably to the level that you talked about is 30.3% range. And Jerry, to add a little bit more color, if we look at the charge of compositions for the quarter, the reduction of a basis points in the coverage of the reserves, it's related to charge of previously reserves. So that takes the new charge of closer to 30. And when we look into that composition itself, and we specifically look into the indirect portfolio, we are seeing the behavior of a reduction of charge of starting to take place this quarter a little bit later within the quarter than what we were expecting, but definitely behavior showing improved. Smith. Got it helpful.

Speaker 7: on the other side in Houston, you know. And so we feel good about what the new team numbers are gonna be able to bring.

On the other side in Houston, you know.

And so we feel good about what these new team members are going to be able to bring in addition, right and so every time I talk about another person coming on board you have to kind of think about that as a scorecard of their set of goals. Both on the loan and deposit side that are additive to the core base of people that we have and so.

Speaker 7: And so every time I talk about another person coming on board, you have to kind of think about that as a scorecard of their set of goals, both on the loan and deposit side, that are added to the core base to people that we have. And so, look, I'm of the belief that, you know, this is a time, it's a wonderful opportunity. People like our story, they want to come here, they believe in what we're doing. The execs have done a great job.

Look I'm of the belief that you know this is a this is a time, it's a wonderful opportunity people like our story they want to come here.

They believe in what we're doing the exact has done a great job of.

Speaker 7: of, you know, attracting some of these folks as well. And so that to me is what gives confidence around our ability, you know, and of course, I have to say,

Attracting some of these folks as well and so that to me is what gives confidence around our ability and of.

Steven Scouten: It may be moving to the deposit side. Jerry, you noted an international deposit growth at the focus because you have for a bit now, but that book's been relatively flat. What kind of changes course there? What would allow you to grow it? And any CD maturities coming on that will help on the deposit side at all? Yeah, look, I think the team, it's taken us a couple quarters to get the synergy of the group to sort of get our footing of refocusing on this.

Of course.

I have to say.

Speaker 7: You know, we talked about awareness, the awareness levels for this organization just continue to escalate.

We talked about awareness the awareness levels for this organization that just continue to escalate.

Speaker 7: Get lots of compliments about it. You know what I'm out in the marketplace and talking with people and I think that halo effect that comes from that

We get lots of compliments about it you know what I'm out in the marketplace and talking with people.

Think that Halo effect that comes from that is also extremely helpful. In the consideration set and look we take every single interaction.

Speaker 7: is also extremely helpful in the consideration set. And look, we take every single interaction. I don't want to beat the drum on this one very personally. I think that one of the advantages of banking with a company like ours is the personal interaction. You can get with all levels of management, the attention, the quicker turnaround time.

You know I don't want to beat the drum on this one very personally I think that you know one of the advantages of banking with a company like ours is the personal interaction you can get with all levels of management the attention the quicker turnaround times and so your reputation builds as a result of that and that's what gives me confidence that youre going to see growth.

Steven Scouten: Remember, we had prior to this year, it really been in maintenance mode there. A combination of stabilizing it back two years ago to coming through the other side of COVID. So travel is just resumed. We want to be very cautious to make sure that what we are growing, we have very good KYC, VSAML in place. And so I think we've been gaining more and more confidence there. I have to remember that the bulk of that portfolio is customers are using those accounts.

Speaker 9: So your reputation bill does a result of that and that's what gives me confidence that you're going to see growth out of our organization in the fourth quarter. That's really good color. Appreciate the time.

Out of our organization in the fourth quarter.

Great.

That's really good color I appreciate the time this morning.

Absolutely happy to take care.

Speaker 1: Our next question comes from a line of Fettys Strickland with Janie Montgomery Scott. muted.

Our next question comes from the line of.

Steady Strickland with Janney Montgomery Scott.

Steven Scouten: So, you know, really the net growth we need to get for this to grow is exactly your question, which is we have to book more new business. And our expectation is that is in the process of ramping up. And Steve and I apologize, I think your second question was around CD maturities in the quarter? Yeah, just curious if there was anything coming that would allow some of the funding costs pressure to a bait at all.

Hey, good morning.

Hey, Patrick.

Speaker 10: Just wanted to start by clarifying on expenses. Is the court's expense rate you're guiding to the fourth quarter? Is that going to be similar to the 58 million core that we saw this quarter? And then are the FIS charges being the one time item on top of that?

Just wanted to start by clarifying on expenses is the core expense rate you're guiding to in the fourth quarter is that going to be similar to the 58 million core.

We saw this quarter and then are these.

<unk> charges being a onetime item on top of that.

Speaker 3: Yeah, no, we expect what we had said, I think, Sherry and I had talked in part of Cortes-Fede.

Yes, no. We expect book, we had said I think sheri and I have talked in prior quarters had a debt.

Steven Scouten: Not that CD costs are going down yet, but just kind of wondering if there's a demo. I was going to say, you know, I think what Sherry's remarks were, is that we look at the delta, what is maturing as to be much closer, right? So, these were fairly higher cost maturities this fourth quarter. So, even if we did a retention, we didn't expect significant incremental expenses or result of that.

Speaker 3: You know, the targeting was anywhere between sort of all, call it a 59 and a half to 61ish range.

Targeting was was anywhere between sort of I'll call. It a 59 and a half to 61 ish range.

Speaker 7: And then you're going to see the elevated expense that takes place. Now, fast before we do anything of some of these other additional expense initiatives that I was mentioning earlier, I'd love to give you more color, but I would prefer to just say that what you're going to see in 4Q, right of, you know.

And then youre going to see the elevated expense that takes place now passed before we do anything of some of these other additional expense initiatives that I was mentioning earlier.

You know I'd love to give you more color, but I would prefer to just say that what youre going to see in for Q right.

Steven Scouten: Okay, that's very helpful. And then maybe just last thing for me, sounds like growth is picking back up already this quarter. You said the pipelines are strong. I know, you know, for most of the banks we look at growth is kind of getting pulled back and people seem a bit more cautious. What kind of gives you confidence in the growth you guys are putting on? Is it new market expansion, primarily? It gives you that confidence, or how can you speak to that a little bit?

Speaker 7: we'll call it, you know, $56 million, expense of running everything at the same time, is more of an anomaly for the period than it is, you know?

We'll call it $5 6 million dollar expense running everything at the same time is is it more of an anomaly for the period than it is you know so that's why when we started to talk about this where yes, you peeled. It back we still think our run rate is in and around that range, but let's let's.

Speaker 7: So that's why when we started to talk about this, we're, yeah, if you peeled it back, we still think our run rate is in and around that range, but let's be clear. We are going to have in 2024 elevated technology related expense as part of this process that will then was we decommissioned things over time. And that's going to be a continuous improvement exercise for us as an organization. So it will probably, as we said, certainly stay elevated in Q1 at a minimum. Share your animal with you when it adds.

Steven Scouten: I have to tell you, I think it shouldn't be lost. We made a big transition in the team, in some of the composition as a team, particularly on the commercial side this year. And I think that that team is really gaining even more and more footing at this point. We're also expanding that team. I can tell you that we've got five new strong business development officers that have either started or will be starting, frankly, next week.

Be clear we are going to have in 2020 for elevated technology related expense.

As part of this process that will then was we decommission things over time, that's going to be a continuous improvement exercise for us as an organization. So it will probably as we said certainly stay elevated in Q1 at a minimum Sherry I don't know if you want to add any color.

Speaker 4: to be right, it's kind of the effect of running these applications and technology efforts in parallel.

Completely right at it.

The effect of running these applications and technology efforts in parallel.

Steven Scouten: Here at the organization, we expect we've added in Broward, we've added in Miami-Dade. I think we've had another additional person on the other side in Houston. And so we feel good about what the new team members are going to be able to bring in addition. And so every time I talk about another person coming on board, you have to kind of think about that as a scorecard of their set of goals, both on the loan and deposit side, that are additive to the core base to people that we have.

Got it. So then it sounds like over time.

Speaker 10: I think you can kind of hold that a little more flat as you redeploy some of those cost days as you quit running things and parallel into other technology initiatives and get into other areas of that.

You can kind of hold that a little more flat as you redeploy some of those cost saves to get if you quit running things in parallel.

Two other technology initiatives.

Others the back.

Speaker 3: Yeah, and steady and fairness, you know, just based off the comments I was making, from the last set of questions.

And in fairness.

Just based on the comments I was making.

Last set of questions you have to take into account with US you know our expectation.

Speaker 7: You have to take into account with us, you know, our expectation counter to a lot other people is that we're expecting.

Steven Scouten: And so look, I'm of the belief that this is a time, it's a wonderful opportunity. People like our story, they want to come here, they believe in what we're doing. The execs have done a great job of attracting some of these folks as well. And so that can be as what gives confidence around our ability. And of course, I have to say, we talked about awareness, the awareness levels for this organization to continue to escalate, get lots of compliments about it, what I'm out of the marketplace and talking with people.

Counter to a lot of other people is that we're expecting to continue to grow and it's a combination of we just see good opportunities in the marketplace and so youre going to have.

Speaker 3: grow and it's a combination of we just see good opportunities in the marketplace. So you're going to have a higher, you know, all-coloured, earnings base as well that comes into play. So some of that is a director's, all of those, some of these other investments that we're making in people. But I will tell you we're continuously evaluating how as this technology gets deployed, that we can better assess a ratio of business development.

A higher you know I'll call it earning space as well that comes into play. So some of that is a direct result of some of these other investments that we're making in people, but I will tell you we're continuously evaluating how as this technology gets deployed that we can better assess our ratio business to bell.

And in support.

Speaker 3: Under expert expectations, you're going to see us go into a true continuous improvement mode in 2024. You know, frankly in 2020.

Understood expectation is youre going to see us go into a true continuous improvement mode in 2024.

Steven Scouten: And I think that halo effect that comes from that is also extremely helpful in the consideration set. And look, we take every single interaction, I don't want to beat the drum on this one very personally. I think that one of the advantages of banking with a company like ours is the personal interaction you can get with all levels of management, the attention, the quicker turnaround times. And so your reputation builds as a result of that. And that's what gives me confidence that you're going to see growth out of our organization in the fourth quarter. That's a really good color. Appreciate the time this one.

Frankly in 2023, it's been all about bringing in some new team members to add additional growth, but the vast majority of efforts again under the I'll refer to it as unnoticed and under the surface. There's just been an incredible amount of energy and effort by this team to focus on the SAP conversion and.

Speaker 7: It's been all about bringing in some new team members at additional growth with the vast majority of efforts. Again, under the, I'll refer to it as unnoticed and under the surface. There's just been an incredible amount of energy and effort by this team focused on this FIS conversion. And it's been massive undertake.

It's a massive undertaking sometimes people may.

Speaker 7: You know, sometimes people may not quite remember, but we're converting everything. I mean, when I mean everything, everything. And so this is a major, major undertaking for our company. And we could not be even more excited for that date in early November to come and finally get to the...

It may not quite remember, but we're converting everything I mean, when I mean, everything everything and so this is a major major undertaking for our company and we could not be more excited for that date in early November to come and finally get to the point where.

Feddie Strickland: Absolutely happy to take care.

Feddie Strickland: Our next question comes from a line of Feddie Strickland with Jenny Montgomery Scott. Hey good morning. Hey Feddie.

Yes, well, we will start to see that the pressure will be on making sure. Our customers are okay. We're onboarding, new new business, Okay, and we can get back to really focusing more and more on.

Feddie Strickland: Just wanted to start by clarifying on expenses. Is the court expense rate you're guiding to the fourth quarter? Is that going to be similar to the 58 million core that we saw this quarter? And then are the FIS charges being the one time item on top of that? Yeah, no, we expect what we had said, I think, Shary, and I had talked in part a quarter-svedda that the targeting was anywhere between sort of all, call it a 59 and a half to 61-ish range. And then you're going to see the elevated expense that takes place. Now, fast before we do anything of some of these other additional expense initiatives that I was mentioning earlier.

Speaker 7: start to see that the pressure will be on making sure our customers are okay. We're onboarding new business okay and we can get back to really focusing more and more on, as I said.

As I said continuous improvement efforts.

Speaker 10: Understood that's helpful. Thanks for the color on that Jerry. Just Such a gears for a moment here. I appreciate the detail and rate sensitivity on the slide 15 of the deck

Understood. That's helpful. Thanks for the color on that Gerry.

Switching gears for a moment here I appreciate the detail on rate sensitivity on slide 15 of the deck.

Speaker 10: I'm trying to understand that second circle chart. Is that saying 52% of all loans requires within a year, or is that 52% of fixed rate loans? And the reason I ask is I'm just trying to understand both the dollar amount of the loans repricing and the average picked up you could potentially see in spread as those loans are renewed, kind of going into 2024.

I'm trying to understand that second circle chart is that saying that 52% of all loans reprice within a year or is that 52% of fixed rate loans and the reason I ask because I'm just trying to understand.

The dollar amount of the loans repricing and the average picked up you could potentially see in spread as those loans are renewed kind of going into 2024.

Feddie Strickland: I'd love to give you more color, but I would prefer to just say that what you're going to see in 4Q, we'll call it $56 million expense of running everything at the same time, is more of an anomaly for the period than it is. So that's why when we started to talk about this, we're, yeah, if you peeled it back, we still think our run rate is in and around that range, but let's be clear, we are going to have in 2024 elevated technology related expense as part of this process that will then was we decommissioned things over time.

Speaker 11: Sorry, I'm going back to the slide. So 50 to 47% of our fixed rate modes. The fixed rate mode.

Alright good.

And going back to the slide 252%.

7% over six.

Fixed rate loan.

One quick second.

Sure I'm talking about the second Circle chart by repricing term.

Yeah.

Speaker 4: So that's 100% of the portfolio. 100% of the portfolio will be reprising within less than one year. At 42%, 52% of the portfolio will be reprising within less.

Yeah. So that's a 100% of the portfolio, 100% of the portfolio will be repricing within less than one year at 42, 52% of the portfolio will be replacing with the left one.

Speaker 10: Do you have the amount of the six portfolio that's repricing over the next year if you don't have five I can follow later? We will be able to provide.

Do you have the amount of the fixed portfolio. That's repricing over the next year. If you don't that's fine I can follow up later.

Feddie Strickland: And that's going to be a continuous improvement exercise for us as an organization. So it will probably, as we said, certainly stay elevated in Q1 at a minimum. Shary, I don't know if you want to add any color. No, that's completely right. It's kind of the effect of running these applications and technology efforts in parallel. Got it. So then it sounds like over time, you think you could kind of hold that a little more flat as you redeploy some of those cost days to get as you quit running things and parallel into other technology initiatives and get into other areas of the back.

We will be able to provide media.

Great. Thanks for taking my questions guys.

Yep.

Speaker 1: Our next question comes from a line of Matt only with Stephen.

Our next question comes from the line of Matt Olney with Stephens.

Speaker 12: Hey, good morning. This is Jordan on from Matt. I just had one of the get a clarifying question on that NYC loan sale that's gonna be taking place today that I just wanted to get a question or about the additional loss if there is gonna be any giving it that fair value. You could just give any color around that. That'd be great.

Hey, Good morning, this is Jordan on for Matt.

I wanted to get it Claire.

Clarifying question.

On that.

I see loan sale thats going to be taking place today.

That.

I just wanted to get a.

Question about the additional loss if there is going to be any given that the fair value. If you could just give any color around that that'd be great.

Feddie Strickland: Yeah, and steady and fairness, you know, just based up the comments, those making, you know, from the last set of questions, you have to take into account with us, you know, our expectation counter to a lot of other people is that we're expecting to continue to grow. And it's a combination of we just see a good opportunities in the marketplace. And so you're going to have, you know, a higher, you know, I'll call it party base as well that comes into play.

Speaker 7: Yeah, look, our view was we took a mark on that. It was as obviously cool and what we saw, but I'll let Sherry go ahead. I know it was in her comments.

Yeah look our view was we took a mark on that as well as have obviously quarter and what we saw but I'll, let Sherry go head I know it was in her comments.

Speaker 11: Yeah, so we did take evaluation, evaluation, adjustment at the point of transfer. This was prior to balance sheet of 5.6 million. In the actual sale that will take place later today, we do expect from loss on sale between $1.82 million to be recorded.

Yeah. So we.

We did take a valuation a valuation adjustment at the point of to transfer. This was prior to the balance sheet of $5 6 million in the actual sale that will take place later today, we do expect some loss on sale between $1 million to $2 million to be recorded.

Feddie Strickland: So some of that is a director's all those some of these other investments that we're making in people, but I will tell you we're continuously evaluating how as this technology gets deployed that we can better assess our ratio of business development and support. Expectation is you're you're going to see us go into a true continuous improvement mode in 2024, you know, frankly, in 2023, it's been all about bringing in some new team members to add additional growth with the vast majority of efforts, you know, again, under the all referred to it as unnoticed and under the surface, there's just been an incredible amount of energy and effort by this team focused on this FIS conversion.

Sorry, what was the number one eight.

Speaker 3: Yeah, it's an on recurring charge and we expect we have an offset, you know, in mind as well. So, you know, our view was look, this was a great move to reduce a, the highest single point exposure we had left. I think it's in a highly volatile segment, you know, commercial real estate in New York. And our view was we need to move on this because just given.

Yes, it's a nonrecurring charge and we expect.

We have an upset.

<unk> as well so.

Our view was look this was a great move to reduce a the highest single point exposure we had left.

I think it's in a highly volatile segment of commercial real estate in New York and our view was.

We need to move on this because just given.

Speaker 7: Barkey conditions there, it's better to move on and not take the risk. Particularly, I think there's a refinance risk that we come with.

Market conditions there it's it's.

Feddie Strickland: And it's been massive undertaking, you know, sometimes people may not quite remember, but we're converting everything, I mean, when I mean everything, everything. And so this is a major, major undertaking for our company and we could not be even more excited for that date in early November to come, and finally get to the point where, yes, we'll start to see that, you know, the pressure will be on making sure our customers are okay. We're onboarding new business okay and we can get back to really focusing more and more on, you know, as I said, continuous improvement efforts. Understood. That's helpful. Thanks for the color on that, Jerry.

Better to move on and not take the risk, particularly I think there's a refinance risk that would come with with some of these deals not just necessarily this one all deals and so our view is this was a.

Speaker 7: Some of these deals, not just necessarily this one, all deals. And so our view is this was a very proactive move by us.

Feddie Strickland: Just, I'm switching gears for a moment here.

A very proactive move by us to to get this done and over with.

Speaker 12: Understood. Thank you. And then maybe one more question. We talked about that Bully Restructure and having a $2 million benefit. But then you also talked about the income kind of staying flat at the $50 million level. Is there anything that's going to be offsetting that $2 million benefit at any light item that we should be aware of?

Understood. Thank you and then.

Maybe one more question you talked about that bully restructure and having a $2 million benefit.

But then you also talked about fee income kind of thing.

Flat at the end.

$50 million level is there anything that's going to be offsetting a $2 million benefit any line items that we should be aware of.

Speaker 4: Now, the benefit of 2 million dollars that we're expecting out of the restructure is moving forward fully 2024. We're not capturing 100% of that benefited fourth quarter because there's some steps still from an admin perspective that have to take place on the restructure. That's why we're providing guidance closer to the results of the 50 million we had in 3Q. But no, no additional assets that were.

Now the benefit of $2 million and we're expecting out of the restructure is moving forward are fully 2024, we're not capturing 100% of that benefited fourth quarter. Because there are some that's still from an admin perspective that have to take place under restructure that's why we're providing guidance closer to the results of the 50 million we had in <unk>.

Feddie Strickland: I appreciate the detail and rate sensitivity on slide 15 of the deck. I'm trying to understand that second circle chart. Is that saying 52% of all loans repriced within a year? Or is that 52% of fixed rate loans? And the reason I ask is I'm just trying to understand both the dollar amount of the loans repricing and the average picked up you could potentially see in spread as those loans are renewed, kind of going into 2024.

Feddie Strickland: Sorry, I'm going back to the slide. So 52% 47% of our fixed rate loans. One quick second. Sure, I'm talking about that second circle chart by repricing term. Yes, so that's 100% of the portfolio 100% of the portfolio will be repricing within less than one year at 42% of the portfolio will be repricing within less than one. Do you have the amount of the fixed portfolio that's repricing over the next year, if you don't, that's fine. I can follow later. We will be able to provide later. Great.

But no no additional offset that we're seeing over there.

Speaker 10: So, 2024, if the income's gonna be a bit higher than from that current $15 million level. That's the F for Chisholm, yes. Okay, perfect.

So 2024 fee incomes can be a bit higher than that.

Current $15 million level.

Duffy execution yet.

Okay perfect. Thank you for taking my questions I appreciate it.

Absolutely. Thank you.

Speaker 1: That concludes today's question and answer session. I'd like to turn the call back to Jerry Plush for closing remarks.

That concludes today's question and answer session I'd like to turn the call back to Jerry flush for closing remarks.

Speaker 3: Thank you everyone for listening in on today's call. We greatly appreciate your interest in Amorant. Again, thank you very much and have a great day.

Thank you everyone for listening in on today's call. We greatly appreciate your interest in Ameren again, Thank you very much and have a great day.

Speaker 1: This concludes today's conference call. Thank you for participating. You may now disconnect.

This concludes today's conference call. Thank you for participating.

May now disconnect.

[music].

Feddie Strickland: Thanks for taking my questions, guys. Our next question comes from a line of Matt only with Stevens. Hey, good morning. This is Jordan on from Matt. I should have wanted to get a clarifying question on that NYC loan sale that's going to be taking place today that I just wanted to get a question earlier about the additional loss if there is going to be any giving it that fair value. Thank you.

Feddie Strickland: If you could just give any color around that, that would be great. Yeah, look, our view was we took a mark on that at what as I obviously put in what we saw, but I'll let Sherry go ahead. I know it was in her comment. Yeah, so we did take a valuation evaluation adjustment at the point of transfer. This was prior to balance sheet of 5.6 million in the actual sale that will take place later today.

Yes.

Feddie Strickland: We do expect from loss and sale between $1.82 million to be recorded. Sorry, what was the number 1.8? Yeah, it's an on recurring charge and we expect we have an offset, you know, in mind as well. So, you know, our view was look, this was a great move to reduce the highest single point exposure we had left. I think it's in a highly volatile segment, you know, commercial real estate in New York.

Feddie Strickland: And our view was we need to move on this because just give it, and Barkey conditions there. It's better to move on and not take the risk, particularly I think there's a refinance risk that would come with some of these deals, not just necessarily this one, all deals. And so our view is this was a very proactive move by us to get this done and over with. I understand. Thank you. And then maybe one more question.

Feddie Strickland: We talked about that bully restructure and having a $2 million benefit. But then we also talked about the income kind of staying flat at the $50 million level. Is there anything that's going to be offsetting that $2 million benefit, any light item that we should be aware of? No, the benefit of $2 million that we're expecting out of the restructure is moving forward fully 2024. We're not capturing 100% of that benefited fourth quarter because there's some that's still from an admin perspective that have to take place on the restructure.

Feddie Strickland: That's why we're providing guidance closer to the results of the $50 million we had in 3Q. But no, no additional offset that we're seeing over that. So 2024, if the income's going to be a bit higher than from that current $15 million level. That's the effort to give. Okay, perfect. Thank you for taking my questions. I appreciate it. Absolutely. Thank you.

Okay.

[music].

Thanks.

[music].

Okay.

[music].

Jerry Plush: That concludes today's question and answer session. I'd like to turn the call back to Jerry Plush for closing remarks. Thank you, everyone, for listening in on today's call. We greatly appreciate your interest in Emory. Again, thank you very much and have a great day.

Yes.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Thank you. Thank you for your time, and I'll see you in the next video. . Please be advised that today's conference is being recorded.

[music].

Yes.

[music].

Okay.

Yes.

[music].

Okay.

Yeah.

Yes.

[music].

Okay.

[music].

Yes.

[music].

Okay.

[music].

Sure.

Okay.

Yes.

[music].

Yes.

[music].

Okay.

[music].

Okay.

[music].

Okay.

Right.

Sure.

Yes.

Great.

Okay.

Yes.

Okay.

Yes.

[music].

Okay.

Sure.

Okay.

Yes.

Okay.

Yes.

Sure.

Yes.

[music].

Thanks.

Yes.

Okay.

Yes.

Okay.

[music].

Okay.

Sure.

[music].

Yes.

Okay.

[music].

Okay.

Yes.

Okay.

Yes.

[music].

Okay.

[music].

Yes.

Okay.

Yes.

Okay.

Yes.

Sure.

Yes.

Okay.

Yes.

[music].

Okay.

Yes.

[music].

Okay.

Great.

Yes.

Okay.

Yes.

Okay.

Yes.

Sure.

Yes.

Sure.

Thanks.

Yes.

Thanks.

Sure.

Yes.

Right.

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

Sure.

Yes.

Okay.

Yes.

Okay.

[music].

Thanks.

Okay.

Yes.

Okay.

Thank you.

Yes.

Sure.

Yes.

Okay.

Yes.

[music].

Okay.

Yes.

Okay.

Thanks.

Okay.

[music].

Thank you.

Yes.

Okay.

Yes.

Sure.

Yes.

Okay.

Yes.

Okay.

Sure.

Okay.

Sure.

Thanks.

Okay.

Sure.

Okay.

Yes.

Okay.

Yes.

Okay.

Thanks.

Okay.

[music].

Sure.

Okay.

Yes.

Okay.

Great.

Okay.

Thank you.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

Sure.

Great.

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

[music].

Okay.

Yes.

Thank you Sir.

Yes.

Okay.

Sure.

Okay.

Thank you.

Yes.

Okay.

Yes.

Okay.

Hi.

Yes.

Okay.

Great.

Okay.

Sure.

Right.

Yes.

Okay.

Sure.

Okay.

Yes.

Okay.

Thank you.

Sure.

Yes.

Speaker 1: Good day and thank you for standing by. Welcome to the Amarit Bank Corp. 3rd quarter 2023 earnings conference call. At this time, all participants.

Good day, and thank you for standing by.

Welcome to the Marin Bancorp third quarter 2023 earnings conference call.

At this time all participants are in a listen only mode.

Speaker 1: After the speaker's presentation, there will be a question and answer session.

After the speaker's presentation, there will be a question and answer session.

Speaker 1: To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised.

To ask a question. During this session you will need to press star one one on your telephone you.

You will then hear an automated message advising your hand is raised.

Speaker 1: To withdraw your question, please press star 1, 1 again. Please be advised that today's

To withdraw your question. Please press star one again.

Please be advised that today's conference is being recorded.

Speaker 1: I would now like to hand the conference over to your host today, Laura Rossi, head of investor relations and sustainability. Please go ahead.

I would now like to hand, the conference over to your host today, Laura Rossi head of Investor Relations and sustainability. Please go ahead.

Speaker 2: Thank you Liz. Good morning everyone, and thank you for joining us to review Amaram's Bank of Sir Quarter 2023 results.

Thank you Liz good.

Everyone and thank you for joining us to review <unk> Bancorp's third quarter 2023 results.

Speaker 2: And today's goal are jury plush, our chairman and chief executive officer, and Charimar Candeladon are executive vice president and chief financial officer.

On today's call are Jerry plush, our chairman and Chief Executive Officer, and Sharon Malka, Our executive Vice President and Chief Financial Officer.

Speaker 2: As we begin, please note that discussions on today's call contain forward-looking statements within the meaning of the Security SXSKINT Act. In addition, references will also be made to non-gov financial next.

Please refer to the company earnings release for a statement regarding forward looking statements as well as for information a reconciliation of non-GAAP financial measures to GAAP measures.

Speaker 3: I will now turn it over to our Chairman and CEO , Jerry Sosh. Thank you, Laura. Good morning, everyone, and thank you for joining Amherst Third Quarter 2023 Earnings call. We're happy to be here today to update everyone on the continued progress we made during the period. So during the third quarter, we focused on improving balance sheet composition, which included the continued prioritization of organic deposit growth, which enabled us to reduce higher cost institutional deposits, which are highly rate-sensitive and therefore subject to flight risk. We provided more granular information on the sources and type of deposits in today's Earnings presentation.

Speaker 2: I will now turn it over to our Terminan Zero, Jerry.

I will now turn it over to our chairman and CEO Jerry.

Speaker 7: Thank you, Laura. Good morning, everyone, and thank you for joining Amherst 3rd quarter 2023 rings call. We're happy to be here today to update everyone on the continued progress we made during the period.

Speaker 7: So during the third quarter, we focused on improving balance sheet composition, which included the continued prioritization of organic deposit growth, which enabled us to reduce higher cost institutional deposits, which are highly rate-sensitive and therefore subject to flight risk. We provided more granular information on the sources and type of deposits in today's preferredings presentation, and I'll go into that in detail very shortly.

So during the third quarter, we focused on improving balance sheet composition, which included the continued prioritization of organic deposit growth, which enabled us to reduce higher cost institutional deposits, which are highly rate sensitive and therefore subject to flight risk. We've provided more granular information on the sources entitled deposits in today's.

Earnings presentation, and I'll go into that in detail very shortly.

Speaker 7: We also entered into an agreement to sell the single largest credit exposure in our discontinued New York City portfolio. And you'll see that in Loans Health for sale. And that's closing this schedule to take place today.

Speaker 7: We continue to work on further reductions in non-performing assets, and we've now reached the marketing stage with our real estate owner.

We continue to work on further reductions in nonperforming assets and we've now reached the marketing stage without real estate owned.

Speaker 7: We also spent considerable time and energy on the upcoming core conversion in November and I'll provide more information on that shortly as well.

We also spent considerable time and energy on the upcoming core conversion in November and I'll provide more information on that shortly as well.

Speaker 7: So while this was not an asset size growth quarter like recent periods, as loans and deposits overall were relatively flat quarter to quarter, and in fact, the key driver of our asset size decreased this quarter, was from our using 100 million in excess cash on hand to pay down advance.

While this was not an asset size growth quarter like recent periods as loans and deposits overall were relatively flat quarter to quarter and in fact, the key driver of our asset size decrease this quarter was from our using a $100 million in excess cash on hand to pay down advances.

Speaker 3: We made a lot of progress on many fronts, which we will cover as we review the upcoming slides. And as an aside, which Sherry will cover later in her remarks, the loan of the positive pipelines for the fourth quarter are very strong, and we expect to be back in growth mode in 4Q. And in fact, we've already booked 90 million in loan production month to date, which has resulted in a $71 million net increase in loans as of yesterday.

We made a lot of progress on many fronts, which we will cover as we review the upcoming slides and as an aside which Jerry will cover later in her remarks, the loan and deposit pipelines for the fourth quarter are very strong and we expect to be back in growth mode in <unk> <unk>.

And in fact, we've already booked $90 million in loan production month to date, which has resulted in a $71 million net increase in loans as of yesterday.

Speaker 3: So let's turn to slide three, and here we provide a summary of our third quarter highlights. Then income attributable to the company was 22.1 million, compared to the 7.3 million in 2Q23. This increase was primarily driven by lower provision for credit losses in 3Q, as the provision recorded in 2Q was substantially higher.

Higher than.

Speaker 3: The net interest margin was 3.57% compared to the 3.83%. We reported last quarter. A few basis points lower than we originally expected. This was driven primarily than higher than expected funding costs and lower loan originations as we continue to prioritize relationships metric originations and not renew or pursue non depository finance.

The net interest margin was three 5% to 7% compared to the 383% we reported last quarter, a few basis points lower than we originally expected. This was driven primarily by higher than expected funding costs and lower loan originations as we continue to prioritize relationship centric originations and not renew.

New or pursue non depository financing.

Speaker 7: So again, back to asset size, we decreased 174 million compared to Q23. Our gross loans were 7.1 billion compared to 7.2 billion last quarter. A decrease is 74 million. And our total deposits were 7.5 billion relatively flat to the 7.6 billion last quarter.

Laura Rossi: I would now like to hand the conference over to your host today, Laura Rossi, Head of Investor Relations and Sustainability. Please go ahead. Thank you, Liz. Good morning, everyone, and thank you for joining us to review Amerant Bancorp's third quarter 2023 results. On today's call, our Gary Plush, our Chairman and Chief Executive Officer, and Sharymar Kanledon, our Executive Vice President and Chief Financial Officer. As we begin, please note that discussions on today's call contain forward-looking statements within the meaning of the Security 16th Act.

Speaker 3: Federal Home Alone Bank advances were 595 million, a decrease of 175 million or 23% compared to the 770 million and 2Q due to prepayments we made in 3Q23 as part of our asset and liability.

Federal home loan bank advances were $595 million, a decrease of $175 million or 23% compared to the $770 million in <unk> due to prepayments we made in <unk> 'twenty three as part of our asset liability management.

Speaker 7: The company's capital levels continue to be strong and well in excess of the minimum regulatory requirements to be considered well-capitalized as of September 30 of 2023. Our tangible common equity ratio remains strong at 7.44% as of September 30. As we classify the majority of our investment portfolio as available for sale, the mark to mark it on this portfolio is deducted from tangible common equity. We'll get into more detail regarding capital and capital ratio short.

Laura Rossi: In addition, references will also be made to non-gov financial measures. Please refer to the company's earnings relief for a statement regarding forward-looking statements, as well as for information and reconciliation of non-gov financial measures to gas measures.

For sale the Mark to market on this portfolio is deducted from tangible common equity will get into more detail regarding capital and capital ratio shortly.

Speaker 7: Also during the quarter, we paid out the previously announced cash quarterly dividend of 910s for share on August 31st of 2023.

Also during the quarter, we paid out the previously announced cash quarterly dividend of <unk> <unk> per share on August 31 of 2023.

Laura Rossi: I will now turn it over to our Chairman and CEO, Jerry Plush. Thank you, Laura. Good morning, everyone, and thank you for joining Amerant's third quarter 2023 earnings call. We're happy to be here today to update everyone on the continued progress we made during the period. So during the third quarter, we focused on improving balance sheet composition, which included the continued prioritization of organic deposit growth, which enabled us to reduce higher cost institutional deposits, which are highly rate-sensitive and therefore subject to flight risk.

Speaker 7: And then lastly, regarding stock repurchases, as you know, we have a $25 million of class A common stock share repurchase program in a place.

Speaker 7: And year to date, we've repurchased 260,000 shares for $5 million at an average price of $19 for share or at .9 times price to book value. Availability remaining under this program was 20 million as of quarter.

Program was $20 million as of quarter end.

Speaker 7: So let's turn to slide four and take a look at what happened in shares outstanding during the quarter. And here you can see that during 3Q, we continue to prudently use our 25 million share repurchase program that we repurchase the 142,000 shares of common stock at an average price of $19.

So, let's turn to slide four and take a look at what happened in shares outstanding during the quarter and see here you can see that during <unk>. We continued to prudently use our $25 million share repurchase program and we repurchased 142000 shares of common stock at an average price of $19.

Laura Rossi: We provided more granular information on the sources and types of deposits in today's earnings presentation, and I'll go into that in detail very shortly. We also entered into an agreement to sell the single largest credit exposure in our discontinued New York City portfolio, and you'll see that in loans held for sale, and that's closing the schedule to take place today. We continue to work on further reductions in non-performing assets, and we've now reached the marketing stage with our real estate owned.

Speaker 7: We can transition now to slide five, and we'll show you our capital position relative to regulatory minimum.

We can transition now to slide five I will show you our capital position relative to regulatory minimums.

Speaker 7: As of 3 Q2 020-3, our total capital ratio ended at 12.7%, and our CET1 was 10.3%. Our tangible common equity ratio, which includes 106 million of AOCI resulting from the aftertacks change in the valuation of our portfolio was 7.4.4.

Laura Rossi: We also spent considerable time and energy on the upcoming core conversion in November, and I'll provide more information on that shortly as well. So while this was not an asset-sized growth quarter like recent periods, as loans and deposits overall were relatively flat quarter to quarter, and in fact, the key driver of our asset-sized decreased this quarter was from our using a hundred million in excess cash on hand to pay down advances.

Speaker 3: Regarding our tangible common equity ratio, we also show here for reference purposes the impact of adding to 26 million in unrealized losses from our held and maturity portfolio and what that does to TCE, which would result in an adjusted tangible capital ratio, it was 7.2% a relatively small impact it included. And tangible book value for share also adjusted for held and maturity stood at 19.9 as a quarter rent.

Laura Rossi: We made a lot of progress on many fronts, which we will cover as we review the upcoming slides, and as an aside, which Sherry will cover later in her remarks, the loan and deposit pipelines for the fourth quarter are very strong, and we expect to be back in growth mode in 4Q. And in fact, we've already booked 90 million in loan production month to date, which has resulted in a $71 million net increase in loans as of yesterday.

Tangible book value per share also adjusted for held to maturity stood at $19 nine as of quarter end.

Speaker 7: We will now take a look at on slide six, on deposits, and give you an overview of the deposit base.

We will now take a look at on slide six on deposits and give you an overview of the deposit base.

Speaker 7: Our total deposit to the end of the third quarter were 7.5 billion, and that's down 33 million from the previous quarter. This very slight decrease was driven primarily by reductions in higher cost institutional deposits of 292 million, which was personally enabled by a organic deposit growth of 2008.

Our total deposits at the end of the third quarter were $7 5 billion and Thats down $33 million from the previous quarter. This very slight decrease was driven primarily by reductions in higher cost institutional deposits of $292 million, which was partially enabled by organic deposit growth of $208 million.

Speaker 3: Of note is, non-interest bearing deposits increased by 77 million and time deposits increased by 220 million. And as of course, customers continue to see higher returns on their deposits.

Of note is noninterest bearing deposits increased by $77 million and time deposits increased by $220 million and as of course customers continued to seek higher returns on their deposits.

Speaker 7: Note that this increase in time deposits, however, includes broker time deposits in the amount of 92 million, which was a strategic move to obtain two to five year funding, again, as part of asset liability management. And at the same time, as I just mentioned, we reduced federal and? bank advances by 175 million, which were down to 595 million in quarter.

Note that this increase in time deposits. However includes broker time deposits in the amount of $92 million, which was a strategic move to obtain two to five year funding again as part of asset liability management and at the same time as I just mentioned, we reduce federal home bank advances by $175 million, which were down to 590.

Jerry Plush: This was driven primarily than higher than expected funding costs and lower loan originations, as we continue to prioritize relationships in antric originations and not renew or pursue non-depository finance. Johnson. So again, back to asset size, we decreased 174 million compared to Q23. Our gross loans were 7.1 billion compared to 7.2 billion last quarter, a decrease is 74 million, and our total deposits were 7.5 billion relatively flat to the 7.6 billion last quarter.

$5 million a quarter right.

Speaker 7: Please know we remain committed to maintaining our current ratio of loans that are positive with a target of 95% and not to exceed 100%.

Please note we remain committed to maintaining our current ratio of loan to deposit with a target of 95%.

Not to exceed 100%.

Speaker 7: So we'll turn to slide seven and look at our deposit diversification and you'll look at the stability we have in this portfolio. And as you can see, it's composed of domestic and international costs.

So we'll turn to slide seven and look at our deposit diversification and Youll look at the stability. We have in this portfolio and as you can see it's composed of domestic and international customers. Our domestic deposits now account for 67% of total deposits totaling $5 1 billion as of the end of the third quarter and Thats down 46.

Speaker 7: Our domestic deposits now count for 67% of total deposits, totaling 5.1 billion as of the end of the third quarter. And that's down 46 million or 1%. Compared to the previous quarter and international deposits, which account for 33% of our total deposits, totaled 2.5 billion up 13 million or 0.5% compared to the previous quarter. Our domestic deposits include over 48,000 accounts with an average size of 100,000.

Jerry Plush: Federal 770 million in QQ due to prepayments we made in 3Q23 as part of our asset and liability management. The company's capital levels continue to be strong and well in excess of the minimum regulatory requirements to be considered well-capitalized as of September 30 of 2023. Our changeable common equity ratio remains strong at 7.44% as of September 30. As we classify the majority of our investment portfolio is available for sale, the market market on this portfolio is deducted from tangible common equity.

1% compared to the previous quarter in international deposits, which account for 33% of our total deposits totaled $2 5 billion up 13 million or 5% compared to the previous quarter.

Speaker 7: while their international deposits are approximately 57,000 accounts with an average size of 40,000, which reflects the granularity of our deposit base and stability of this one.

Jerry Plush: We'll get into more detail regarding capital and capital ratios shortly. Also, during the quarter, we paid out the previously announced cash quarterly dividend of $0.9 for share on August 31 of 2023. And then lastly, regarding stock repurchases, as you know, we have a $25 million class A common stock share repurchase program in place, and year-to-date we've repurchased 260,000 shares for $5 million at an average price of $19 for share, or at 0.9 times price to book value. Availability remaining under this program was 20 million hours of quarter rent.

Speaker 7: And as I've shared in previous calls, we intend to take advantage of our infrastructure and capabilities and emphasize international deposit gathering as a source of funds given more favorable pricing, while also adding more diversification to our funds.

Speaker 7: Our court deposits defined as total deposits excluding all time deposits were 5.2 billion as of the end of the third quarter. A decrease of 254 million or 5% compared to the previous quarter. The 5.2 billion and court deposits included 1.4 billion in non-intersparing demand up to 77 million by previously referenced or 6% compared to the prior quarter. Despite customer demand for higher rate products and in line with our continued efforts to prioritize the customer relations.

Our core deposits defined as total deposits. Excluding all time deposits were $5 2 billion as of the end of the third quarter, a decrease of $254 million or 5% compared to the previous quarter to $5 2 billion in core deposits included $1 4 billion in noninterest bearing demand up to $77 million I previously referenced.

Jerry Plush: So let's turn to slide forward and take a look at what happened and shares outstanding during the quarter. And here you can see that during 3Q, we continue to prudently use our 25 million share repurchase program that we repurchase 142,000 shares of common stock at an average price of $19. We can transition now to slide five, and we'll show you our capital position relative to regulatory minimums. As of 3Q, 2020, our total capital ratio ended at 12.7%, and our CET1 was 10.3%.

Or 6% compared to the prior quarter, despite customer demand for higher rate products and in line with our continued efforts to prioritize deep customer relationships.

Speaker 7: 2.4 billion in interest-bearing deposits down for inter 56 million or 13% versus the previous quarter, primarily driven by the previously referenced reduction in institutional deposits, and 1.5 billion in savings and money market deposits, up 26% or 2% versus the previous quarter. So at this point, I'm gonna turn things over to Sherry, we'll go over the key metrics, other balance sheet items, and results for the third quarter in more detail.

So at this point I'm going to turn things over to Sherri, who will go over the key metrics other balance sheet items and results for the third quarter in more detail.

Jerry Plush: Our tangible common equity ratio, which includes 106 million of AOCI resulting from the aftertacks change in the valuation of our portfolio was 7.44%. Regarding our tangible common equity ratio, we also show here for reference purposes the impact of adding to 26 million in unrealized losses from our held and maturity portfolio and what that does to TCE, which would result in an adjusted tangible capital ratio was 7.2%, a relatively small impact that's included. And tangible book value for share also adjusted for held in maturity stood at 19.9 as a quarter rent.

Speaker 4: Thank you, Jerry, and good morning, everyone. As part of today's presentation, I will share more color on our financial position and performance. The drawings of Flight 8, I'll begin by discussing our key performance metrics and their changes compared to last quarter.

Thank you Jerry and good morning, everyone as part of today's presentation I will share more color on our financial position and performance.

I'll begin by discussing our key performance metrics and the changes compared to last quarter.

Speaker 4: Non-interference variance deposits, the total deposits increased to 18% in 3Q compared to 17% in the previous quarter.

Noninterest bearing deposits to total deposits increased to 18% in <unk> compared to 17% in the previous quarter.

Speaker 4: This reflects our deposits first focus and our efforts to increase demandy costs.

This reflects our deposits first focus and our efforts to increase demand deposit account base.

This positive trend also speaks to the value of building relationships and all the African market. Despite the challenges of customers seeking higher interest rates and the market competition.

Jerry Plush: We will now take a look at on slide six on deposits and give you an overview of the deposit base. Our total deposit to the end of the third quarter were 7.5 billion, and that's down 33 million from the previous quarter. This very slight decrease was driven primarily by reductions in higher cost institutional deposits of 292 million, which was partially enabled by organic deposit growth of 208 million. Of note is non-interest bearing deposits increased by 77 million, and time deposits increased by 220 million, and as of course, customers continue to seek higher returns on their deposits, of it.

Speaker 4: For consistency and transparency, we show the three core metrics of RLE, RLE, and operating efficiency, excluding non-routine items, so you can more easily see underlying performance for the poor.

We're consistent interest bearing fee, we showed the three core metrics of ROA ROE and operating efficiency, excluding non routine items, where you can more easily see underlying performance for the quarter.

Speaker 4: As an example, chlorophyllion C is 62.1% compared to 60.3% in 2Q23, which excludes non-riching charge.

As an example, where efficiency of 62, 1% compared to 63% in Q3, which excludes non routine charges.

Speaker 4: These results include certain costs of new applications and services to be used after conversion in parallel with current applications.

These results include certain cost of new applications and services to be used after conversion in parallel with current applications in place.

Jerry Plush: Note that this increase in time deposits, however, includes broker time deposits in the amount of 92 million, which was a strategic move to obtain two to five year funding again as part of asset liability management. And at the same time, as I just mentioned, we reduced federal and low bank advances by 175 million, which were down to 595 million in quarter rate. Please know we remain committed to maintaining our current ratio of loans at a deposit with a target of 95% and not to exceed 100%.

Speaker 4: This parallel use of applications will also occur for the full first quarter of 2023 until we complete the commissioning applications in early 2024 and therefore we do.

In parallel we use of applications will also occur for the fourth quarter of 2023 until we complete decommissioning applications in early 2024, and therefore, we do this call.

Speaker 4: This is the, we expect higher efficiency ratio temporarily until early 20.

Due to this we expect a higher efficiency ratio temporarily until early 2024.

Speaker 4: Lastly, the coverage of the allowance for credit losses to total loans decreased to 1.40% compared to 1.48% in two cubes. As a result of charge of previously-

Lastly, the coverage of the allowance for credit losses to total loans decreased to 140% compared to 148% in Q2.

As a result of charge offs previously reserved however, excluding reserves for loans individually evaluated the coverage remains stable at 128% unchanged from Turkey.

Speaker 4: However, excluding reserves for loans individually evaluated, the coverage remains stable at 1.28% unchanged from 2Q. Conceeing on to slide nine.

Jerry Plush: So we'll turn to slide seven and look at our deposit diversification and look at the stability we have in this portfolio. And as you can see, it's composed of domestic and international customers. Our domestic deposits now count for 67% of total deposits totaling 5.1 billion as of the end of the third quarter and that's down 46 million or 1%. Compared to the previous quarter and international deposits, which account for 33% of our total deposits total 2.5 billion up 13 million or 0.5% compared to the previous quarter.

Casino onto slide nine I will discuss our investment portfolio.

Speaker 4: Our third quarter investment security balance was at 1.3 billion, which remains unchanged compared to the previous quarter. When compared to the prior quarter, the duration of the investment portfolio has extended to 5.3 years as the model anticipates longer duration due to higher mortgage rates and therefore slower propation.

Our third quarter investment Securities balance was at $1 3 billion, which remains unchanged compared to the previous quarter when compared to the prior quarter. The duration of the investment portfolio has extended to five three years as the model anticipates longer duration due to higher mortgage rates and therefore lower prepayment.

Speaker 4: As we did last quarter, I would like to discuss the impact of interest rates on the valuation of debt securities available for-

As we did last quarter I would like to discuss the impact of interest rates on the valuation of debt securities available for sale.

Speaker 4: As of the end of this September , the market value of this portfolio decreased approximately 19 million after tax, compared to a decrease of 13.5 million into Q23. This decrease was driven by

Jerry Plush: Our domestic deposits include over 48,000 accounts with an average size of 100,000, while our international deposits are approximately 57,000 accounts with an average size of 40,000, which reflects the granularity of our deposit base and stability of this funding source. And as I've shared in previous calls, we intend to take advantage of our infrastructure and capabilities and emphasize international deposit gathering as a source of funds given more favorable pricing, while also adding more diversification to our funding base.

As of the end of the September the market value of this portfolio decreased approximately $19 million after tax compared to a decrease of $13 5 million into Q2 'twenty three.

This decrease was driven by rising rates during the third quarter.

Speaker 4: It is important to note that 75% of our available for sole portfolio has government guarantee while most of the remaining securities are rated investment.

It is important to note that 75% over available for sale portfolio has the government guarantee where most of the remaining securities are rated investment grade.

Jerry Plush: Our core deposits defined as total deposits excluding all time deposits were 5.2 billion as of the end of the third quarter. A decrease of 254 million or 5%. Compared to the previous quarter, the 5.2 billion and quarter deposits included 1.4 billion in nonintersparing demand of the 77 million by previously referenced or 6% compared to the prior quarter. Despite customer demand for higher rate products and in line with our continued efforts to prioritize deep customer relationships.

Speaker 11: are available for sale portfolio represents 79% of the total investment for folio while helping maturity securities represent 17.5.

Our available for sale portfolio represents 79% of the total investment portfolio well held to maturity securities representing 17, 5%.

Speaker 4: Continuing on to slide 10, let's talk about the lompers.

Continuing on to slide 10, let's talk about the loan portfolio.

Speaker 4: At the end of the third quarter, total growth loans were 7.1 billion, down slightly 1% compared to 7.2 billion at the end of two-

The end of the third quarter total gross loans were $7 1 billion down slightly 1% compared to $7 2 billion at the end of Q <unk>.

Speaker 11: The decrease was primarily driven by reduced originations, given tighter credit quality requirements and relationship-focused originates.

The decrease was primarily driven by reduced originations given tighter credit quality requirements and relationship focused origination. This was noticeable in the commercial loan portfolio, which decreased $124 million to $1 45 billion compared to $1 6 billion into Q3.

Jerry Plush: 2.4 billion in intersparing deposits down for inter 56 million or 13% versus the previous quarter, primarily driven by the previously referenced reduction in institutional deposits. And 1.5 billion in savings and money market deposits, up 26% or 2% versus the previous quarter.

Speaker 4: This was noticeable in the commercial loan portfolio which decreased 124 million to 1.45 billion compared to 1.6 billion into Q20.

Speaker 4: The single family residential portfolio was 1.39 billion, an increase of 58 million compared to 1.16 billion into Q20.

The single family residential portfolio was $1 39 billion, an increase of $58 million compared to $1 16 billion into Q2 'twenty three.

Sharymar Kanledon: So at this point, I'm going to turn things over to Sherry. We'll go over the key metrics, other balance sheet items, and results for the third quarter in more detail. Thank you, Jerry, and good morning, everyone. As part of today's presentation, I will share more color on our financial position and performance. The savings of light eight, I'll begin by discussing our key performance metrics and their changes compared to last quarter. Nonintersparing deposits, the total deposits increased to 18% and 3.2 compared to 17% in the previous quarter.

Speaker 11: This amount includes 82.5 million and loans originated and purchased year in the quarter, primarily done with private banking customers and other strategic relations.

This amount includes $82 $5 million and not originated and purchased during the quarter, primarily done with private banking customers and other strategic relationships.

Speaker 11: Consumer loans as of 3223 work 439 million, a decrease of 64 million or 13% quarter over quarter.

Consumer loans as of 323 were for 139 million, a decrease of $64 million or 13% quarter over quarter.

Speaker 11: This includes approximately 255 million in higher yielding in dirt loans, which were a tactical move for us to increase yields in prior periods.

This includes approximately $255 million in higher yielding indirect loans, which were a tactical move for us to increase yields and prior periods.

Speaker 11: As we mentioned last quarter, we are focusing on organic growth and have not been purchasing any new productions since the end of 2020.

As we mentioned last quarter, we are focusing on organic growth and have not been purchasing any new production. Since the end of 2022, we estimate that at current prepayments speeds. This portfolio will run off over the next few years.

Sharymar Kanledon: This reflects our deposits first focus and our efforts to increase demand deposit account. This positive trend also speaks us to the value of building relationships and all the efforts in our markets despite the challenges of customer seeking higher interest rates and the market competition. Our efficiency ratio was 64.1% compared to 65.6% last quarter, an ROA and ROE were higher this quarter at 0.92% and 11.93% respectively, as a result of the lower provision and one time charges during the period.

Speaker 11: We estimate that a current performance speed this portfolio will run off over the next three.

Speaker 11: During 3Q, we also continue to run up our New York City Theory portfolio. We transferred our single highest exposure in our New York City Theory portfolio to help her sail and recorded evaluation allowance of 5.6 million upon transfer.

Speaker 11: This loan had a 43.3 million balance near a fallout once at the end of 3Q and we have scheduled the fail of this facility for later today.

This loan had a $43 3 million balance net of allowance at the end of <unk> and we have scheduled the sale of this facility for later today.

Speaker 11: The resulting New York City Theory portfolio health for investment was 240 million as of 3Q and consisted of 23 facilities.

The resulting New York City theory portfolio held for investment was $240 million as of <unk> and consisted of 23 facility.

Sharymar Kanledon: For consistency and transparency, we show the three core metrics of ROA, ROE, and operating efficiency, excluding non-routine items so you can more easily see underlying performance for the port. As an example, core efficiency is 62.1% compared to 60.3% in 2Q23, which excludes non-routine charges. These results include certain costs of new applications and services to be used after conversion in parallel with current applications in place. This parallel use of applications will also occur for the fourth quarter of 2023 until we complete the commissioning applications in early 2024 and therefore reduce these costs.

Speaker 11: We also had 26 million in Long Hill for sale in connection with Amran Mortgage compared to 50 million in the previous quarter. Given recent industry events in connection with shared national credit portfolio, it is important to note that our exposure to deep loans is limited. As of 3Q, we had 177 million in shared national credit, 2.5% of the total loan portfolio. This amount includes the CRB loan helper sale.

We also had $26 million and loans held for sale in connection with Ameren mortgage compared to $50 million in the previous quarter.

Given recent industry.

Industry events in connection with shared national credit portfolio. It is important to note that our exposure to these loans is limited at the <unk>, we had $177 million in shared national credits.

5% of the total loan portfolio.

Amount includes the CRE loans held for sale I just mentioned.

Speaker 11: Also, it is important to note that approximately half of these borrowers have relationships with us. Turning to slide 11.

Also it is important to note that approximately half of these borrowers have relationship with us.

Sharymar Kanledon: Due to this, we expect a higher efficiency ratio temporarily until early 2024. Lastly, the coverage of the allowance for credit losses to total loans decreased to 1.40% compared to 1.48% in 2Q as a result of charge of previously reserved. However, excluding reserved for loans individually evaluated, the coverage remains stable at 1.28% unchanged from 2Q.

Turning to slide 11, let's take a closer look at credit quality.

Speaker 11: Our credit quality remains sound and reserves coverage is strong. The allowance for credit losses at the end of the third quarter was 99 million, a decrease of 6.8% from 106 million at the close of the previous quarter.

Our credit quality remains sound and reserve coverage is strong the allowance for credit losses at the end of the third quarter was $99 million a decrease of $6 eight eight.

8% from $106 million at the close of the previous quarter.

Speaker 11: We recorded a probation for credit losses of 8 million and the third quarter, which comprises 7.6 million to cover charge off, 1.4 million with the loan composition and volume changes, and 600,000 added to the probation for credit contingency, which is recorded in other liability.

We recorded a provision for credit losses of $8 million in the third quarter, which comprised of $7 6 million to cover charge off $1 4 million into non competition and volume changes and 600000 added to the provision for credit contingency, which is recorded in other liabilities.

Sharymar Kanledon: Continuing on to slide 9, I'll discuss our investment portfolio. Our third quarter investment security balance was at 1.3 billion, which remains unchanged compared to the previous quarter. When compared to the prior quarter, the duration of the investment portfolio has extended to 5.3 years as the model anticipates longer duration due to higher mortgage rates and therefore slower procurement. As we did last quarter, I would like to discuss the impact of interest rates on the valuation of debt securities available for sale.

Speaker 11: These provision requirements were often by 400,000 released due to credit quality and factor updates, and 1.2 million released due to recode.

These provision requirements were offset by 400000 release due to credit quality and Fletcher update and one point familiar release due to recovery.

Speaker 11: It is important to mention that, consistent with previous quarterly disclosures in 2023, the quarterly 2022 provision for credit law has no reflects the desegregated impact of fee-ful implementation for those specific periods.

It is important to mention that consistent with previous quarterly disclosures in 2023, the quarterly 2022 provision for credit losses now reflects the disaggregated impact of Stifel implementation for those specific period.

Sharymar Kanledon: As of the end of this September, the market value of this portfolio decrease approximately 19 million after tax compared to a decrease of 13.5 million into Q23. This decrease was driven by rising rates during the third quarter. It is important to note that 75% of our available for so portfolio has government guarantees, while most of the remaining securities are rated investment rates. Also, as of the third quarter, our corporate debt portfolio had 124 million insubordinated debt securities issued by financial institutions, compared to 121 million into Q as a result of higher market valuation. Our available for so portfolio represents 79% of the total investment portfolio, while helping maturity securities represent 17.5%.

Speaker 11: During the third quarter of 2023, there were net charge of the 14.6 million of which 6.4 million were related to indirect consumer loan. And 9.3 million were related to multiple smaller commercial loans of which 5.7 million had already been reserved in a prior period. This was upset by 1.2 million.

During the third quarter of 2023, and there were net charge offs of $14 6 million of which $6 4 million were related to indirect consumer loans and $9 3 million were related to multiple smaller commercial loans of which $5 7 million had already been reserved in prior periods.

This was offset by $1 2 million a recovery.

Speaker 11: Our non-performing loans to total loans are down to 46 basis points compared to 65 basis points last quarter.

Our nonperforming loans to total loans are down to 46 basis points compared to 65 basis points last quarter.

Speaker 11: This was primarily due to the charges mentioned, 8.4 million dutcolon sold, 2.6 million dutcolon paydown, and 0.4 million dutcolon.

This was primarily due to charges mentioned $8 $4 million ethanol sold $2 6 million due to pay downs and <unk> 4 million due to upgrades.

Speaker 11: Number-forming assets total 53.4 million at the end of the third quarter, a decrease of 14 million compared to 2Q23, primarily due to the decrease in the...

Nonperforming assets totaled $53 4 million at the end of the third quarter, a decrease of $14 million compared to <unk> 23, primarily due to the decrease in npls.

Sharymar Kanledon: Continuing on to slide 10, let's talk about the loan portfolio. At the end of the third quarter, total growth loans were 7.1 billion down slightly 1% compared to 7.2 billion at the end of Q. The decrease was primarily driven by reduced originations given tighter credit quality requirements and relationship focused originations. This was noticeable in the commercial loan portfolio, which decreased 124 million to 1.45 billion compared to 1.6 billion into Q23. The single family residential portfolio was 1.39 billion and increased of 58 million compared to 1.6 billion into Q23.

Speaker 11: The ratio of number forming assets to total assets was 67 basis points down 14 basis points from the second quarter of 2020.

The ratio of nonperforming assets to total assets with 57 basis points down 14 basis points from the second quarter of 2023.

Speaker 11: In the third quarter of 2023, the coverage ratio of Lundla reserves to non-performing loans close at three times, up from 2.2 times at the end of last quarter and down from 4.1 times at the close of the third quarter.

In the third quarter of 2023, the coverage ratio of loan loss reserve to nonperforming loans closed at three times up from two two times at the end of last quarter and down from four one times at the close of the third quarter of last year.

Speaker 11: As we did last quarter, we brought up light 12 from our loan supplement section to discuss our theory portfolio and further deep.

As we did last quarter, we bring up <unk> 12 from our loan supplement section to discuss our theory portfolio in further detail.

Speaker 11: We have a conservative-witted average loan survival of 59%, and death service coverage of 1.4 as well as strong sponsorship tier profile, based on AUM, net worth, and years of experience free.

Have a conservative weighted average loan to value of 59% and debt service coverage of one four at the Elektron sponsorship tier profile based on AUM net worth and years of experience for a sponsor.

Sharymar Kanledon: This amount includes 82.5 million and loans originated in purchase during the quarter primarily done with private banking customers and other strategic relationships. Consumer loans as of 3.23 were 439 million a decrease of 64 million or 13% quarter over quarter. This includes approximately 255 million in higher yielding indirect loans, which were a tactical move for us to increase yields in prior periods. As we mentioned last quarter, we are focusing on organic growth and have not been purchasing any new productions since the end of 2020.

Speaker 11: As of the end of Q23, we have 30% over theory, portfolio, and top tier bar.

So at the end of <unk> 'twenty, three we have 30% of our CRE portfolio and top tier borrowers.

Speaker 11: We have no significant tenon concentration in our theory retool loan portfolio as the top 15 tenants represent 22% of the total.

We have no significant concentration in our CRE retail loan portfolio as a top 15 tenants represent 22% of the total.

Speaker 11: Major tenants include recognized national and regional grocery stores, pharmacy, food, and clothing retailers and-

Major tenants include recognized national and regional grocery stores pharmacy, food and clothing retailers and banks.

Speaker 11: Our underwriting methodology for CRE includes sensitivity analysis, for a variety of C-risk factors like interest rates and their impact over death service, death service coverage ratio, vacancy and tenor return.

Our underwriting methodologies for CRE include sensitivity analysis analysis for a variety of key risk factors like interest rates and their impact over desktop debt service coverage ratio vacancy antenna retention. Please.

Sharymar Kanledon: 82. We estimate that at current performance speed, this portfolio will run off over the next few years. During 3Q, we also continue to run off our near city theory portfolio. We transferred our single highest exposure in our near city theory portfolio to help for sale and recorded evaluation allowance of 5.6 million upon transfer. This loan had a 43.3 million balance net of allowance at the end of 3Q and we have scheduled the sale of this facility for later today.

Speaker 11: Please note that 49% of our theory for folio has been hedged by the borrowers via interest rate capture swaps, which in turn protects them against rising rate and rate.

Please note that 49% of our CRE portfolio has been hedged by the borrowers via interest recapture swap, which in turn protects them against raising rate environment.

Speaker 11: Next, I'll discuss Net Interest Synchro and Net Interest Margin on Light Thirds.

Next I'll discuss net interest income and net interest margin on slide 13.

Speaker 11: Net interest income for the third quarter was 79 million down 5 million or 6% compared to the previous quarter. The decrease was primarily driven by higher average rates on total interest varying liabilities for both total deposits and official advancements and higher average balances of customer

Net interest income for the third quarter was $79 million down $5 million or 6% compared to the previous quarter.

Sharymar Kanledon: The resulting near city theory portfolio, which was 240 million as of 3Q and consisted of 23 facilities. We also had 26 million in loan sale for sale in connection with Amerant Mortgage, compared to 50 million in the previous quarter. Given recent industry events in connection with shared national credit portfolio, it is important to note that our exposure to these loans is limited. As of 3Q, we had a 177 million in shared national credit, 2.5% of the total loan for folio. This amount includes 2.5 million in shared national credit. This is the theory loan for sale, as you mentioned. Also, it is important to note that approximately half of these borrowers have relationship with us.

<unk> was primarily driven by higher average rate on total interest bearing liabilities for both total deposits and officially be advances and higher average balances of customer time deposits.

Speaker 11: As rates continue to increase during the quarter, we experience higher beta via the combined effect of rate increases in transactional deposits, reprising of time deposits that had no reprised the current market rate, as well as higher balances in time deposits at current markets.

As rates continue to increase during the quarter, we experienced higher beta the combined effect of rate increases and transactional deposit re pricing of time deposits that had no reprice at current market rates as well as higher balances and time deposits at current market rates.

Speaker 11: As you can see in the graph, we observed the beta of approximately 43 basis points on a cumulative basis since the beginning of the interest rate of cycle, but around 104 basis points quarter on quarter compared to 196 in the previous quarter.

As you can see in the graph, we observed a beta of approximately 43 basis points on accumulative basis since the beginning of the interest rate cycle, but around 104 basis points quarter on quarter compared to 196 in the previous quarter.

Speaker 11: Moving on to the net interest margin, as Jerry mentioned, NIM for the third quarter was 3.57%. Down by 26 basis points quarter over quarter. This was slightly higher than we had originally guided, as we saw lower than expected long floating during the quarter, based on our deposit first and relationship focus lending.

Moving on to the net interest margin as Gerry mentioned NIM for the third quarter was $3, 57% down by 26 basis points quarter over quarter. This was slightly higher than we had originally guided as we saw lower than expected loan closings during the quarter based on our deposits first and relationship focused lending practices.

Sharymar Kanledon: Turning to flight 11, let's take a closer look at credit quality. Our credit quality remains sound and reserves coverage is strong. The allowance for credit losses at the end of the third quarter was 99 million, a decrease of 6.8% from 106 million at the close of the previous quarter. We recorded a pervation for credit losses of 8 million in the third quarter, which from price of 7.6 million to cover charge off, 1.4 million into loan composition and volume changes, and 600,000 added to the provision for credit contingency, which is recorded in other liabilities.

Speaker 11: We expect the margins to continue to be pressured given substantial market competition for domestic deposits and demand for higher rates. I'll provide some additional color.

We expect the margin to continue to be pressured given substantial market competition for domestic profits and demand for higher rates.

Some additional color on NIM in my final remarks.

Speaker 11: Moving on to interest rate sensitivity on flight for teens, you can see the asset sensitivity of our balance sheet with 53% over loans having floating rate structures, and 52% reprising within.

Moving onto interest rate sensitivity on slide 14, you can see the asset sensitivity of our balance sheet with 53% of our loans, having floating restructured and 52% of repricing within a year.

Sharymar Kanledon: These provision requirements were offset by 400,000 released due to credit quality and factor updates, and 1.2 million released due to recovery. It is important to mention that, consistent with previous quarterly disclosures in 2023, the quarterly 2022 pervation for credit losses now reflects the desegregated impact of lethal influence. This is the recommendation for those specific periods. During the third quarter of 2023, there were net charge off of 14.6 million, of which 6.4 million were related to indirect consumer loans, and 9.3 million were related to multiple smaller commercial loans, of which 5.7 million had already been reserved in a prior period.

Speaker 11: As we have said in previous calls, we continue to position our portfolio for a change in race cycle by incorporating race floors when originating adjustable loan. So current we currently have 51% of our adjustable loan portfolio with flow rate. Additionally, you can see here that within the variable rate loans 37% are indexed so.

As we have said in previous calls we continue to position our portfolio for a change in recycle by incorporating rate floors when originating adjustable loans.

So currently we currently have 51% of our adjustable loan portfolio with flurry. Additionally, you can see here that within the variable rate loans, 37% of our index is still fair.

Speaker 11: Our NIM sensitivity profile remains stable compared to the previous quarter. We include the sensitivity of our AFS portfolio to showcase our ability to expand additional negative populations.

Our NIM sensitivity profile remains stable compared to the previous quarter. We include the sensitivity of our asset portfolio to showcase our ability to extend additional negative valuation changes I would like to take a moment to discuss the change in organic improvement in <unk>, which is lower than discussed in previous quarters, Jeff motor amount results from revised market expectations regarding easing monetary.

Speaker 11: I would like to take a moment to discuss the change in organic improvement in AOCI, which is lower than discussed in previous quarters. Does moderate amount result from revised market expectations regarding easing monetary policy not taking place in the short term as had been expected earlier in the...

Sharymar Kanledon: This was offset by 1.2 million in recovery. Our non-performing loans to total loans are down to 46 basis points compared to 65 basis points last quarter. This was primarily due to charge off mention, 8.4 million due to loan sold, 2.6 million due to pay down, and 0.4 million due to upgrade. Non-performing assets total, 53.4 million at the end of the third quarter, a decrease of 14 million, compared to 223, primarily due to the decrease in MPL.

Policy not taking place in the short term as had been expected earlier in the year.

Speaker 11: We will continue to actively manage our balance sheet to best position our bench for the remainder of 2023 and looking into the place.

We will continue to actively manage our balance sheet to best sufficient or bank for the remainder of 2023 and looking into 2024.

Speaker 11: Continuing to life 15, non-interestingim and death recorder was 22 million, down by 4.7 million or 18% from 27 million in the second quarter of 2023.

Continuing to slide 15, noninterest income in the third quarter was $22 million down by $4 7 million or 18% from $27 million in the second quarter of 2023.

Sharymar Kanledon: The ratio of non-performing assets to total assets was 57 basis points down 14 basis points from the second quarter of 2023. In the third quarter of 2023, the coverage ratio of loan loss reserves to non-performing loans close at three times, up from 2.2 times at the end of last quarter and down from 4.1 times at the close of the third quarter of last year.

Speaker 11: As the reference earlier, 7 million of non-interesting com were non-retinaic.

As referenced earlier 7 million of noninterest income were non routine items.

Speaker 11: The decrease was primarily driven by lower gains on the early extinguishment of official B-adventist and lower mortgage banking in.

The decrease was primarily driven by lower gains on the early extinguishment of Apis, you'll be advances and lower mortgage banking income. This increase in non interest income was partially offset by higher loan level derivative income due to higher volume of derivative transactions with clients and the absence of the one of the $1 2 million loss in connection with the sale of one corporate debt securities available for sale.

Speaker 11: This increase in non-interest income was partially offset by higher loan level derivative income due to higher volume of derivative transactions with clients. And the absence of the one of the 1.2 million loss in connection with the sale of one corporate debt security available for

Sharymar Kanledon: As we did last quarter, we brought up flight 12 from our loan supplement section to discuss our theory portfolio in further detail. We have a conservative-witted average loan survival of 59%, and that service coverage of 1.4 as well as strong sponsorship tier profile based on AUM, net worth, and years of experience free. As of the end of 3Q23, we have 30% of our CRE portfolio in top tier borrowers. We have no significant tenant concentration in our CRE retail loan portfolio as a top 15 tenants represent 22% of the total.

Speaker 4: Amherst Assessor Management Total 2.1 billion S of the end of the third quarter, down 55 million or 2.6% from the second.

Ameren assets under management totaled $2 1 billion F&B end of the third quarter down $55 million or two 6% from the second quarter.

Speaker 11: This decrease was primarily driven by lower net new assets and market value aid.

This decrease was primarily driven by lower net new assets and market valuation.

Speaker 11: When compared to the same quarter a year ago, we saw an increase of 281 million or 15.5%. Primarily driven by net new assets, which were 162 million and higher market value.

When compared to the same quarter a year ago, we saw an increase of 281 million or 15, 5%, primarily driven by net new assets, which were $162 million in higher market valuation.

Speaker 11: Of note, this week the company approved a restructuring of its Bancom Life Insurance Program as we surrendered and reinvest in higher yielding policies while also increasing team member participation. We expect to improve earnings of approximately two million per year in future.

Of note between the company approved a restructuring of the bank owned life insurance program as we surrendered and reinvest in higher yielding policy. While also increasing team member participation. We expect improved earnings of approximately 2 million per year in future periods.

Sharymar Kanledon: Major tenants include recognized national and regional grocery stores, pharmacy, food, and clothing retailers and banks. Our underwriting methodology for CRE includes sensitivity analysis for a variety of fee risk factors like interest rates and their impact over death service, death service ratio, vacancy, and tenant retention. Please note that 49% of our CRE portfolio has been hedged by the borrowers via interest rate capture swap, which in turn protects them against raising rate environments.

Speaker 11: Turning to flight 16, their quarter non-interess expenses were 64.4 million down 8 million or 11 percent from the second quarter.

Turning to slide 16 third quarter noninterest expenses were $64 4 million down $8 million or 11% from the second quarter.

Speaker 11: As Jerry covered earlier, we consider 6.3 million of our expenses as a quarter as non-routine expense sites.

As Gary covered earlier, we consider $6 $3 million of price method this quarter as non routine expense items.

Sharymar Kanledon: Next, I'll discuss net interest income and net interest margin on flight 13. Net interest income for the third quarter was 79 million down 5 million or 6% compared to the previous quarter. The decrease was primarily driven by higher average rates on total interest varying liabilities for both total deposits and official be advances in higher average balances of customer time deposits. As rates continue to increase during the quarter, we experience higher beta via the combined effect of rate increases in transactional deposits, repricing of time deposits that had no repriced a current market rate, as well as higher balances in time deposits at current market rates.

Speaker 11: including these items, cornered interest expenses were 58 million and the third quarter of 2020.

Including these items core net interest expenses were $15 million in the third quarter of 2023.

Speaker 11: The quarter over quarter decreased was primarily driven by the absence of many of the items that were included in TQ. There were no longer in this quarter, as well as lower advertising expenses, resulting from campaigns in connection with our partnerships with professional sporting teams. And lower professional fees in connection with call center services that are no longer needed, as a result of the engagement with FIS and the absence of additional consulting expenses into TQ Tunis.

The quarter over quarter decrease was primarily driven by the absence of many of the items that were included into Q. There were no longer in this quarter as well as lower advertising expenses, resulting from campaigns in connection with our partnership with professional sporting team.

Professional fees in connection with call Center services that are no longer needed as a result of the engagement with the fear and the absence of additional consulting expenses into Q3.

Speaker 11: The decrease in non-interest expense was partially offset primarily by evaluation expenses related to the transfer of a new year of the New Year's-based theory loans from loan-helfer investment to loan-helfer.

The decrease in noninterest expense was partially offset primarily by evaluation expenses related to the transfer of a year of the New York based CRE loans from loans held for investments to loans held for sale.

Sharymar Kanledon: As you can see in the graph, we observed the beta of approximately 43 basis points on a cumulative basis since the beginning of the interest rate of cycle, but around 104 basis points quarter on quarter compared to 196 in the previous quarter. Moving on to the net interest margin, as Jerry mentioned, the number of the third quarter was 3.57%, down by 26 basis points quarter over quarter. This was slightly higher than we had originally guided as we saw lower than expected long flowings during the quarter based on our deposits first and relationship-focused lending practices. We expect the margin to continue to be pressured given substantial market competition for domestic deposits and demand for higher rates.

Speaker 11: In terms of our team, we insta-quartered with 700FTs, flight the lower from 700FT and we had into...

In terms of our team we ended the quarter with 700, FTE slightly lower from 710, we head into Q.

Speaker 11: Out of the 700 members, 602 are employed by the bank and 98 by M-RM mortgage. On that note, let's turn to slide seven.

Of the 700 members 602 are employed by the bank and 98 billion run mortgage.

Sharymar Kanledon: I'll provide some additional color and name in my final remarks.

Now, let's turn to slide 17, which focuses on ameren mortgage.

Speaker 11: On a standalone basis, Emma Mortgage had a negative PPR of 1.6 million in 3Q23, which was consistent with two curies.

On a standalone basis, AMR mortgage had a negative <unk> of $1 6 million in <unk>, III, which was consistent with Q2 results are.

Speaker 11: Our efficiency ratio, excluding the activities from average mortgage improved from 64.10% to under 62%.

Our efficiency ratio, excluding the activities from Ameren mortgage improved from $64, 10% to 162%.

Speaker 11: During the third quarter, the company originated and purchased approximately 84 million loans through AMRA mortgage. And as noted on the slide, these are related to the bank's customers and relation.

During the third quarter the company originated and purchased approximately 84 million in loans through Ameren mortgage and as noted on the slide these are related to the bank's customers and relationships. The current pipeline shows $107 million in profit or 266 applications as of October 18, 2023, with $84 million and rate locked.

Speaker 11: The current pipeline shows 107 million in process or 266 applications as of October 18, 2023, with 84 million in race locks. And to provide some color.

Sharymar Kanledon: As we have said in previous calls, we continue to position our portfolio for a change in rate cycle by incorporating rate floors when originating adjustable loans. So current, we currently have 51% of our adjustable loan portfolio with flow rates. Additionally, you can see here that within the variable rate loans, 37% are indexed to stilfer. Our name sensitivity profile remains stable compared to the previous quarter. We include the sensitivity of our AFS portfolio to showcase our ability to expand additional negative valuation changes.

And to provide some color on our expectations for next quarter.

Speaker 11: Regarding growth, we estimate our balance sheet to grow between 250 and 300 minutes.

Regarding growth, we estimate our balance sheet to grow between 250 and 300 million.

Speaker 11: We foresee deposit growth to continue to be strong. We will use any excess overtness, long growth to further reduce higher cost institutional deposits and wholesale funding, including our renewing maturities in force.

We foresee deposit growth to continue to be strong we will use any excess over net loan growth to further reduce higher cost institutional deposits and wholesale funding, including our renewing maturities in <unk>.

Speaker 11: Given competition for depoces, we expect the names to continue to decrease in the fourth quarter, but clearly to a lesser degree than in 3Q. While there are significant maturities of customer time depoces in 4Q, the gap to cover between the average previous rate and the current one is lower.

Given competition for deposits, we expect the NIM to continue to decrease in the fourth quarter, but clearly to a lesser degree than in <unk>. While there are significant maturities of customer can be processing for Q. The gap to cover between the average previous rate and the current one is lower.

Speaker 11: Also, there was a significant emphasis on non-interest-bearing products as noted in this quarter's results, and we intend to continue to pursue additional growth as we onboard new relations.

Also there was a significant emphasis on noninterest bearing products as noted in this quarter's results and we intend to continue to pursue additional growth as we onboard new relationship.

Sharymar Kanledon: We will continue to actively manage our balance sheet to best position our bank for the remainder of 2023 and looking into 2024.

Speaker 11: Regarding non-interesting, we expect it to be similar to three-sue levels.

Regarding noninterest income, we expect it to be similar to <unk> levels.

Sharymar Kanledon: Continuing to slide 15, non-interest income indexer quarter was 22 million, down by 4.7 million or 18% from 27 million in the second quarter of 2023. As the reference earlier, 7 million of non-interest income were non-routine items. The decrease was primarily driven by lower gains on the early extinguishment of official bi-advances and lower mortgage banking. This decrease in non-interest income was partially offset by higher loan level derivative income due to higher volume of derivative transactions with clients and the absence of the one of the 1.2 million loss in connection with the sale of one corporate security available for sale.

Speaker 11: We expect operating expenses to include non-recurring expenses related to the upcoming conversion. Well, we finalize the commission's services currently utilized after the

We expect operating expenses to include nonrecurring expenses related to the upcoming conversion, while we finalize the commissioning services currently utilized after conversion note that there are services that must run in parallel with anyway for your systems that will be discontinued throughout <unk> and in first Q of 224.

Speaker 11: know that there are services that must run in parallel with the new fios systems that will be discontinued throughout 4q and in first 2 of 2020.

Speaker 11: Finally, we expect probation for credit losses to be in or around 8 to 10 million next quarter as we do expect asset growth as I previously mentioned.

Finally, we expect provision for credit losses to be in or around eight to 10 million next quarter as we do expect asset growth as I previously mentioned.

I'll pass it back to Jerry.

Speaker 7: Thanks, Sherry. So before I conclude the presentation this morning, I thought first we should give you an update on the upcoming conversion that we mentioned earlier in the call. So here on Slide 18, we start with the first thing and most important. We're still on track for our conversion to FIS, which will take place in early November .

Thanks, Sherry so before I conclude.

Speaker 7: Our primary objective is to move to a state-of-the-art course system in modern stacks.

Our primary objective is to move to a state of the art core system and modern stack and this of course will create a simplified and fully integrated ecosystem of applications.

Sharymar Kanledon: This increase of 281 million or 15.5%. Primarily driven by net new assets, which were 162 million and higher market valuation.

Speaker 7: And this, in course, will create a simplified and fully integrated ePOST system of application.

Sharymar Kanledon: Of note, this week the company approved a restructuring of its Bank of Life Insurance program as we surrendered and reinvest in higher yielding policy, will also increase in team member participation. We expect to improve earnings of approximately 2 million per year in future periods.

Speaker 3: will result in a significant strengthening of cybersecurity and information security infrastructure.

Will result in a significant strengthening of cyber security and information security infrastructure.

Speaker 3: We're very confident in partnering with a well-known and recognized provider and financial services that recently rededicated themselves to focus solely on financial service.

Sharymar Kanledon: Turning to slide 16, third quarter non-interest expenses were 64.4 million down 8 million or 11% from the second quarter. As Jerry covered earlier, we consider 6.3 million of our expenses as non-routine expense items, including these items, core non-interest expenses were 58 million in the third quarter of 2023. The quarter over quarter decreased was primarily driven by the absence of many of the items that were included and secured that were no longer in this quarter, as well as lower advertising expenses resulting from campaigns in connection with our partnerships with professional sporting teams and lower professional fees and connection with call center services that are no longer needed as a result of the engagement with FIS and the absence of additional consulting expenses into 2023. The decrease in non-interest expense was partially offset primarily by valuation expenses related to the transfer of a near of the near base theory loan from loan health investment to loan health or sale.

Speaker 7: And above all things, even though I've listed a couple other items here, we believe that the transition will provide the technological platform that will adequately and exceed the expectations supporting our...

Our expectations supporting our company's growth.

Speaker 7: We'll turn a physical transformation and give a quick update here on the efforts going on. We've completed the reprash of five branches year to date and have two more to be completed before you rent. And this will complete our entire network, which is essential for our team members and customers to have the common look and feel of the Amherent experience in all locations.

Alternative physical transformation and give a quick update here on the efforts going on we've completed the refresh of five branches year to date and have two more to be completed before year end and this will complete our entire network, which is essential for our team members and customers to have a common look and feel of the amarin experience in all locations.

Speaker 7: We have several new locations in the works in downtown Miami and Los Olis, which is downtown Fort Lauderdale in Tampa and in San Felipe and River Roaks in the Houston Marketplace. The consolidation of our Edgewater Florida location will occur here in the fourth quarter and it will coincide with the opening of our town.

Sharymar Kanledon: In terms of our team, we insted a quarter with 700 FT slightly lower from from 710 we had into Q. Out of the 700 members, 600 and 2 are employed by the bank and 98 by Emmer and Mortgage.

Will coincide with the opening of our downtown Miami branch and as we previously announced we have new regional headquarters currently in process, both in Broward County, So plantation, Florida in Tampa, Florida.

Speaker 7: And as we previously announced, we have new regional headquarters currently in process, both in Broward County, so Plantation, Florida and in Tampa, Florida.

Sharymar Kanledon: On that note, let's turn to slide 17, which focuses on Emmer and Mortgage. On a standalone basis, Emmer and Mortgage had a negative PPR of 1.6 million in 3223, which was consistent with 2 key results. Our efficiency ratio, excluding the activities from Emmer and Mortgage, improved from 64.10% to 62%. During the third quarter, the company originated and purchased approximately 84 million loans through Emmer and Mortgage and as noted on the slide, these are related to the bank's customers and relationships.

Speaker 3: And then we'll turn to give an update on brand awareness. So on this slide, we show the key partnerships we have in place to support and enhance our brand awareness.

And then we will turn to give an update on brand awareness. So on this slide we show the key partnerships, we have in place to support and enhance our brand awareness during the quarter, we announced we entered into a multiyear extension of our partnership with the University of Miami Hurricanes, which comes with significant additional branding opportunities.

Speaker 7: During the quarter we announced we entered into a multi-year extension of our partnership with the University of Miami Hurricanes, which comes with significant additional branding opportunities.

Speaker 7: We also build on our already strong partnership with the Florida Panthers, as we are now the naming rights partner of Amherst Bankering in Broward County. We traded back the helmet sponsor rights, which gave us national exposure for much improved regional focus with naming.

We also build on our already strong partnership with the Florida Panthers as we are now the naming rights partner of Ameren Bank Arena in Broward County, we traded back the helmet sponsor rates, which gave us national exposure for much improved regional focus with naming rights. We also view the naming rights of the Broward County owned arena as a strategic step as par.

Speaker 7: We also view the naming rights of the Broward County-owned arena as a strategic step as part of our recently announced expansion plans there.

Our recently announced expansion plans there and.

Speaker 7: Please note that we do not expect to increase marketing expense as a result of any of these partnerships.

And please note that we do not expect to increase marketing expense as a result of any of these partnership agreement. The new deals. We believe that these and our other partnerships position ameren for unmatched brand recognition and business growth in the markets we serve.

Speaker 3: We believe that these and our other partnerships position amaran for unmatched brand recognition and business growth in the markets we serve.

Sharymar Kanledon: Given competition for the process, we expect the names to continue to decrease in the fourth quarter, but clearly to a lesser degree than in 3Q. While there are significant maturities of customer time deposits in 4Q, the gap to cover between the average previous rate and the current one is lower. Also, there was a significant emphasis on non-interest burden products as noted in this quarter's results and we intend to continue to pursue additional growth as we onboard new relations.

Speaker 3: So I'll give a couple of closing remarks on where we are today. So if you turn to the last slide, here you can see we're near the end of our transformation.

So I'll give a couple of closing remarks on where we are today.

So if you turn to the last slide.

Speaker 7: We're excited to have the executive leadership team set and we remain focused on attracting the right people to complement our existing team to achieve our...

Speaker 7: And I'll note we've continued to add more experience commercial business development team members here in the fourth quarter. As I just mentioned, we're going to be completing the transition to FIS, which will provide the technological platform to support our growth.

Sharymar Kanledon: Association. Regarding non-interest income, we expect it to be similar to three-two levels. We expect operating expenses to include non-recurring expenses related to the upcoming conversion. Well, we finalize the commissioning services currently utilized after conversion. Note that there are services that must run in parallel with the new FIS systems that will be discontinued throughout 4-2 and in 1-2 of 2024. Finally, we expect provision for credit losses to be in or around 8-10 million next quarter as we do expect asset growth as I previously mentioned.

And as I also just mentioned our planned new locations are nearing completion, so banking centers in downtown Miami Fort Lauderdale River Oaks, Tampa, our new regional headquarters.

Much of which will happen either in the fourth quarter of 'twenty. Three are early in the first quarter of next year.

Speaker 7: But at the same time, please know that we will be reducing square footage in other corporate locations by subleasing or exiting space as an offset.

Sharymar Kanledon: Oh, no path to bacteria. Thanks, Shary.

But at the same time, please know that we will be reducing square footage and other corporate locations by sub leasing we're exiting space as an offset.

Jerry Plush: So, before I conclude the presentation this morning, I thought, first, we should give you an update on the upcoming conversion that we mentioned earlier in the call. So, here on slide 18, we start with the first thing and most important. We're still on track for our conversion to FIS, which will take place in early November. Our primary objective is to move to a state-of-the-art course system and modern stack. And this, in course, will create a simplified and fully integrated ecosystem of applications, and will result in a significant strengthening of cybersecurity and information security infrastructure.

Speaker 7: And lastly, we're very proud to say that for the second consecutive year, Emernd Bank was recognized as one of Newsweek's top 100 most love work place.

And lastly, we are very proud to say that for the second consecutive year Ameren Bank was recognized as new as one of Newsweek's top 100, most loved workplaces. So before we move to Q&A I just wanted to take a moment and say thank you again to all of my Ameren team members for their dedication energy and effort once again this quarter.

Speaker 3: So before we move to Q&A, I just want to take a moment and say thank you again to all of my Emmer and team members for their dedication, energy and effort once again in this course.

Speaker 7: So with that, I'll stop and Sharon, I will look to answer any questions you have. Operator, please open the line.

So with that I'll stop and sharing I will look to answer any questions. You have operator, please open the line.

Speaker 1: As a reminder, if you'd like to ask a question at this time, please press star 1-1 on your touchtone telephone and wait for your name to be announced.

As a reminder, if you'd like to ask a question at this time. Please press star one one on your Touchtone telephone and wait for your name to be announced two.

Jerry Plush: We're very confident in partnering with a well-known and recognized provider and financial services that recently rededicated themselves to focus solely on financial services. And above all things, even though I've listed a couple of other items here, we believe that the transition will provide the technological platform that will adequately and exceed the expectations supporting our company's growth.

Speaker 1: To withdraw your question, please press star 1, 1 again. Please stand by when we come.

To withdraw your question. Please press star one again.

Please standby, while we compile the Q&A roster.

Speaker 1: Our first question comes from a line of Michael Rose with Raymond Jay.

Our first question comes from the line of Michael Rose with Raymond James.

Speaker 5: Hey, good morning, everyone. Hope you're doing well.

Hey, good morning, everyone help your hope you're doing well.

Jerry Plush: We'll turn to physical transformation and give a quick update here on the efforts going on. We've completed the reprash of five branches year to date, and I've two more to be completed before you rent. And this will complete our entire network, which is essential for our team members and customers, to have the common look and feel of the Amherent experience in all locations. We have several new locations in the works in downtown Miami and Los Olis, which is downtown Fort Lauderdale in Tampa and in San Felipe in River Oaks in the Houston Marketplace.

Speaker 6: Hey, that's so good morning. So, you know, the step down in core expenses was...

Hey.

Good morning, so so.

The step down in core expenses was better than we were kind of looking for if I annualize that it.

Speaker 6: you know, better than we were kind of looking for. If I annualize that, it obviously sets a pretty good tone as we think about next year. Just as we think about expenses and understanding the FIS conversion will happen in the fourth quarter. So maybe a little bit of elevation there, but just to help us think about expenses near a term and as we think about next year, just given that the transformation efforts are kind of winding down and you're going to begin to reap, I think, you know, more of the rewards from the work that's been done over the past couple of years. You can translate this video or hit prevention point we force. Thanks!

And obviously, that's a pretty good tone as we think about next year, just as we think about expenses understanding DFS conversion will happen in the fourth quarter.

So maybe a little bit of elevation in there, but just help us think about expenses near term and as we think about next year just given that the transformation efforts are kind of winding down and youre going to begin to reap I think more of the rewards from the work that's been done over the past couple of years. Thanks.

Jerry Plush: The consolidation of our Edgewater Florida location will occur here in the fourth quarter, and it will coincide with the opening of our downtown Miami branch. And as we previously announced, we have new regional headquarters currently in process, both in Broward County, so Plantation, Florida, and in Tampa, Florida.

Speaker 3: Yeah, Michael, I, it's Jerry. I'll take that one and Jerry, please add your color commentary. You know, the thing that's really important to note is that our expense base will be elevated. Again, the bulk of that is related to the fact that we're going to be running parallel, right? So I mean, both sets of...

Yes, Michael.

It's Gerry I'll take that one and then Sherry please add your color commentary.

The thing Thats really important to note is that our expense base will be elevated again, the bulk of that is related to the fact that we're going to be running parallel right. So I mean, both sets of of applications, both for new and existing will be for the quarter and so in a lot of respects.

Jerry Plush: And then we'll turn to give an update on brand awareness. So on this slide, we show the key partnerships we have in place to support and enhance our brand awareness. During the quarter, we announced we entered into a multi-year extension of our partnership with the University of Miami, Hurricanes, which comes with significant additional branding opportunities. We also build on our already strong partnership with the Florida Panthers, as we are now the naming rights partner of Amherent Bank Arena in Broward County.

Speaker 7: of applications both to new and existing will be for the quarter. And so in a lot of respects, that is, you know, from our perspective.

That is <unk>.

Our perspective, something that for the fourth quarter and certainly in part of the first quarter will dissipate starting no later than the second quarter of next year. So I think sherri's comments were around you're going to see an elevation and in our mind.

Speaker 7: something that for the fourth quarter and certainly in part of the first quarter will dissipate, you know, starting no later than the second quarter of next year. So, you know, I think Sherry's comments were around.

Jerry Plush: We traded back the helmet sponsor rights, which gave us national exposure for much improved regional focus with naming rights. We also view the naming rights of the Broward County owned arena as a strategic step as part of our recently announced expansion plans there. And please note that we do not expect to increase marketing expense as a result of any of these partnership agreements, you know, the new deals. We believe that these and our other partnerships position Amherent for unmatched brand recognition and business growth in the markets we serve.

Speaker 7: You're going to see an elevation and in our mind, they're not really going to be part of the core expense base going forward as you'll see the bump up and the climb.

They were not really going to be part of the core expense base going forward as you will see the bump up in the decline.

Speaker 7: Look, I think expenses are something, I'm gonna give an overall remark, is something that we are gonna be continuously working on and certainly I hope you could tell with some of the comments that I made, that things that we're doing that are new, we are looking to offset them.

Look I think expenses are something I'm going to give an overall remark is.

It's something that we are going to be continuously working on and certainly I hope you could tell with some of the comments that I made the things that we're doing that are new we are looking to offset that so when you think about the marketing expense with doing some of those initiatives and theres. Other things that we're swapping out are not going to do going forward.

Speaker 7: So when you think about the marketing expense, doing some of those initiatives and there's other things that we're swapping out are not going to do going forward, not expecting increases, the same thing to be said about the facilities expense.

Jerry Plush: So I'll give a couple of closing remarks on where we are today. So if you turn to the last slide, here you can see we're near the end of our transformation phase. We're excited to have the executive leadership team set and we remain focused on attracting the right people to complement our existing team to achieve our strategic objectives. And of note, we've continued to add more experienced commercial business development team members here in the fourth quarter.

Expecting increases the same thing to be said about the facility's expense Carlos is working tirelessly with his team.

Speaker 3: Carlos is working tirelessly with his team.

Speaker 7: on looking at opportunities to pair back. We've talked about things like hoteling, which frankly fits really well with the mostly hybrid work model that we've been using here at Amherst.

<unk> looking at opportunities to pair back we've talked about things like hotel ing, which frankly fits really well with the mostly hybrid work model that we've been using here at Amgen.

Speaker 7: So I would tell you there's a lot of moving parts in and around expenses that we're gonna continue as we know there's an increase and there will be an increase in technology expense. There's no absence or but there are other things we're looking to do to reduce that. And we expect to gain additional efficiencies throughout 2024 as we start to see the benefits of having what I think is a much better integrated technology.

Jerry Plush: As I just mentioned, we're going to be completing the transition to FIS, which will provide the technological platform to support our growth initiatives. And as I also just mentioned, our plan new locations are nearing completion. So banking centers and downtown Miami, Fort Lauderdale, River Oaks, Tampa, our new regional headquarters, much of which will happen either in the fourth quarter of 23 or early in the first quarter of next year. But at the same time, please know that we will be reducing square footage and other corporate locations by sub-leasing exiting space as an offset.

So I would tell you theres a lot of moving parts in and out in and around expenses.

That we're going to continue as we know there is an increase and there will be an increase in technology expense.

There is no ifs ands or buts, but there are other things, we're looking to do to reduce debt and we expect to gain additional efficiencies throughout 2024, as we start to see the benefits of having what I think is a much better.

Integrated technology stack.

Speaker 7: Okay, that's helpful. And then I guess just putting it all together, obviously some headwinds still here on rates, but I think as we move through the years, it moved through next year, is it fair to assume that we'll hit a point where we start to kind of achieve positive operating leverages that kind of a realistic goal is to think about the back half of the year. Thanks.

Okay. That's helpful and then I guess, just putting it altogether.

Jerry Plush: And lastly, we're very proud to say that for the second consecutive year, Amerant Bancorp recognized as one of Newsweek's top 100 most loved workplaces. So before we move to Q&A, I just want to take a moment and say thank you again to all of my Amerant team members for their dedication, energy, and effort once again in this quarter.

Obviously, some headwinds still here on.

On rates, but I.

I think as we move through the year as it moved through next year is it fair to assume that we'll hit a point where.

We start to kind of achieve positive operating leverage is that kind of a realistic goal as we think about the back half of the year.

Speaker 4: It is Michael. So when we think about the environment right now, I think there's consensus that we're either at the peak or close to it.

It is Michael so when we think about the environment right now I think there is consensus that we're either other peak or close to it.

Jerry Plush: So with that, I'll stop and Sharon, I will look to answer any questions you have.

Operator: Operator, please open the line. As a reminder, if you'd like to ask a question at this time, please press star 1-1 on your touchtone telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again.

Speaker 4: So although there can be different views as to the timing of an inflection point or the speed of a downward trend, irrespective of that, when we think about the maturity that we have.

So although there can be different views as to the timing of an inflection point or the speed of a downward trend irrespective of that when we think about the maturities that we have and the.

Speaker 7: And the, and the gap of pricing that we would cover on those that are subject to reprising, I think it's going to, I think it's fair to say that the impact of pressures on the name will be lower in the, in the upcoming quarters, even more noticeable starting in 2024. Yeah, and you know, Michael, I mean, just to add to that, you know, Sherry and I, and obviously the Treasury team and our album.

Pricing that we would cover on dose that are subject to repricing.

Michael Rose: Please stand by when we compile the Q&A roster.

I think it is.

I think it's fair to say that the impact of pressures on the NIM will be.

Lower India and upcoming quarters, even more noticeable will start in 2020, yes, Michael I mean, just to add to that Sheri and I and obviously, the treasury team and our Alco Committee Alright, Yeah asset liability Committee I Should've said.

Michael Rose: Our first question comes from the line of Michael Rose with Raymond James. Hey, good morning, everyone. Hope you're doing well. Hey, good morning. So the step down in core expenses was better than we were kind of looking for. If I annualize that, it obviously sets a pretty good tone as we think about next year. Just as we think about expenses and understanding the FIS conversion will happen in the fourth quarter. So maybe a little bit of elevation there.

Speaker 3: R.S. I said liability committee, I should have said meat and we talk about things, you know, it shouldn't be lost on anyone that the comment I made earlier about a reduction in excess cash, you know, being used when there's virtually no spread. We're continuously looking at ways to in...

And we talk about things you know it shouldnt be lost on anyone that the comment I made earlier about a reduction in excess cash.

Being used when there is virtually no spread.

Continuously looking at ways to in.

Speaker 7: Given the rate pressures, the competitive pressures on the deposit side.

Michael Rose: But just just to help us think about expenses near a term and as we think about next year, just given that the transformation efforts are kind of winding down and you're going to begin to reap, I think, you know, more of the rewards from the work that's been done over the past couple of years. Thanks.

Speaker 3: Look for offsets. You know, one of the really encouraging signs, though that I think hopefully everyone has a takeaway, is the jump up and non-interest bearing, and our teams are absolutely intended, and are actually...

Michael Rose: Yeah, Michael, I share, I'll take that one and Sherry, please add your color commentary. You know, the thing that's really important to note is that our expense base will be elevated. Again, the bulk of that is related to the fact that we're going to be running parallel, right? So I mean, both sets of applications, both the new and existing OB for the quarter. And so in a lot of respects, that is, you know, from our perspective, something that is for the fourth quarter and certainly in part of the first quarter will dissipate, you know, starting no later than the second quarter of next year.

Speaker 3: you know, starting to deliver more and more of non-intersparing relationships as part of new relationships, and obviously we're going back in existing relationships.

Speaker 3: and trying to see where we can also gain additional share there. So...

Speaker 3: You know, we're very cognizant. I think a Sherry said that it's lone yields at this stage look like they've somewhat peaked.

We're very cognizant I think as Sherry said that loan yields at this stage look like they've they've somewhat peaked.

Speaker 3: or certainly near the peak and so it's really incumbent on us on the

Or certainly near the peak and so its really incumbent on us.

The deposit cost side.

Speaker 7: And as you could tell, we've only added broker and for duration and liabilities, and frankly those rates are cheaper than even the shorter term stuff that people are paying right now. So that's not as much of a drag as one might think, as you think about the name going.

And as you can tell we've only added brokered and for duration and liabilities.

Michael Rose: So, you know, I think Sherry's comments were around, you're going to see an elevation and, you know, in our mind, you know, they're not really going to be part of the core expense base going forward as you'll see the bump up and the decline. Look, I think expenses are something, you know, I'm going to give an overall remark is something that we are going to be continuously working on. And certainly, I hope you could tell with some of the comments that I made, that things that we're doing that are new, we are looking to offset them.

And frankly those rates are cheaper than even the shorter term stuff that people are paying right now so that's not as much of a drag as one might think.

As you think about the NIM going forward.

Speaker 7: Very helpful and it's good to see just finally for me, just good to see TCUP a little bit, capital up a little bit this quarter. You utilize the buyback, you're still trading below, tangible book, still of authorization. Just wanted to get your near term thoughts on usage of the buyback from here and just balancing some of the headwinds that are out there from a capital perspective. Thanks.

Very helpful.

Helpful.

It's good to see just finally for me just it's good to see.

Tcf, a little bit capital up a little bit this quarter.

Can you utilize the buyback youre still trading below tangible book still have authorization just wanted to get your kind of near term thoughts on on usage of the buyback from here and just balancing.

Michael Rose: So when you think about the marketing expense, you know, doing some of those initiatives and there's other things that we're swapping out are not going to do going forward, not expecting increases, you know, the same thing to be said about the facilities expense, you know, Carlos is working tirelessly with his team on looking at opportunities to pair back. You know, we've talked about things like hoteling, which, you know, frankly fits really well with, you know, the mostly hybrid work model that we've been using here at Amorant.

Some of the headwinds that are out there from a from a capital perspective. Thanks.

Speaker 7: Yeah, you know, we talk about capital levels all the time, of course, like others do. And our view is that, you know, you need to look at all the tools in the toolkit. Certainly, bybacks are one of those. Obviously, we've continued, you know, our board approved, continuing to pay the dividend. And we like where we are capital-wise. We certainly don't like where we are valuation-wise. I'm sure that's...

Yes.

I'll talk about capital levels, all the time of course like others do and our view is that you need to look at all the tools in the toolkit certainly buybacks are one of those obviously we've continued you know our board approved continuing to pay the dividend and we.

Michael Rose: So I would tell you there's a lot of moving parts in and in around expenses that, you know, we're going to continue as we know there's an increase and there will be an increase in technology expense. There's no absence, but there are other things we're looking to do to reduce that. And we expect to gain additional efficiencies throughout 2024, as we start to see the benefits of having, you know, what I think is a much better integrated technology stack.

We like where we are capital wise, we certainly don't like where we are valuation wise.

Sure.

Speaker 3: that is agreed upon by everyone. But our view is that we do need some of this capital from a growth standpoint. And so it's going to be a balancing act. And I think, again, that's what's nice about having the full set of tools and not being restricted to just one or the other, right, that we're going to use it all to grow through that we, our view is it's a combination of these things, right?

That is agreed upon by everyone, but our view is that we do need some of this capital.

From a growth standpoint, and so it is going to be a balancing act and I think again, that's what's nice about having the full set of tools.

And not being restricted to just one or the other right that we're going to use it all for grow through that.

Michael Rose: Okay, that's helpful. And then I guess just putting it all together obviously some headwinds still here on on-rays, but you know, I think as we move through the years, it move through next year is it's fair to assume that we'll hit a point where we start to kind of achieve positive operating leverages that kind of a realistic goal as we think about the back half of the year. Thanks. It is, Michael.

Our view is it's a combination of these things right. So.

Speaker 3: how we pay on dividend, how we utilize the buy back authorization, how we manage in what our expectations are for growth. And by the way, we're not going to grow for growth, say it's profitable growth, right? It is not going to be that, you know, obviously this is a nice quarter to add back to capital at 22 million, you know, our view is we need to be running in those levels.

So how we pay a dividend how we utilize the buyback authorization, how we manage and what our expectations are for growth and by the way, we're not going to grow for growth's sake, it's profitable growth right. It is not going to be that.

Obviously this is a nice quarter to add back the capital at $22 million. Our view is we need to be running in those levels going forward to support the growth plans that we have but I mean I just want you to know we sort of don't look at one of these things stand alone we look at all of them.

Michael Rose: So when we think about the environment right now, I think there's consensus that we're either at the peak or close to it. So although there can be different views as to the timing of an inflection point or the speed of a downward trend, irrespective of that when we think about the maturities that we have and the gap of pricing that we would cover on those that are subject to repricing, I think it's fair to say that the impact of pressures on the number will be lower in the end of coming quarters, even more noticeable starting in 2024.

Speaker 7: going forward to support the growth lands that we have. But I mean, I just want you to know, we sort of don't look at one of these things standalone. We look at all of them. Needless to say, we do agree completely that when you're below book value, that that provides an opportunity to buy back. Give me thatSure additional request.

Who is to say, we do agree completely that when youre below book value that that provides.

Opportunity to buyback.

Helpful. Thanks for all the comments I'll step back.

Okay. Thanks, Michael.

Michael Rose: Yeah, and you know, Michael, I mean, just to add to that, you know, Sherry and I and obviously the Treasury team and our Alco committee, our asset liability committee, I should have said meet and we talk about things, you know, it shouldn't be lost on anyone that the comment I made earlier about a reduction in excess cash, you know, being used when there's virtually no spread. We're continuously looking at ways to, you know, given the rate pressures, the competitive pressures on the deposit side, look for offsets, you know, one of the really encouraging signs, though that I think hopefully everyone has this take away, is the jump up and non-interest bearing and our teams are absolutely intended and are actually, you know, starting to deliver more and more of non-interest bearing relationships as part of new relationships and obviously we're going back in existing relationships and trying to see where we can also gain additional shares there.

Speaker 1: Our next question comes from a line of Brady Galey with KBW.

Our next question comes from the line of Brady Gailey with K B W.

Hey, Thanks, good morning, guys.

Great.

So the net interest margin guidance for <unk> as far as being down less than three two I mean thats a pretty.

Wide range, just given <unk> is down about 25 basis points is there any way to.

Tight.

<unk>.

Range for <unk> and then how do you think that <unk> will be the bottom.

And you could see some expansion next year or do you think there could be more downside in 'twenty four.

Speaker 3: Yeah, greaty look, I think this is the quarter right where asset yields kind of top out. I think deposit costs continue just for competitive purposes.

Yes, Brady look I think.

This is the quarter right, where asset yields kind of top out I think deposit costs continue just for competitive purposes look everyone.

Speaker 3: I'd like to say we're putting on the right kind of deposits. You know, we've talked a lot about not just putting on.

I'd like to say, we're putting on the rates kind of deposits.

Michael Rose: So, you know, we're very cognizant, I think as Sherry said, that low yields at this stage look like they've somewhat peaked or certainly near the peak and so it's really incumbent on us on the deposit side and as you can tell, you know, we've only added broker and, you know, for duration and liabilities and frankly those rates are cheaper than even the shorter term stuff that people are are paying right now, so that's not as much of a drag as one might think, you know, as you think about the nim going forward.

We've talked a lot about not just putting on.

Speaker 7: you know, and we've run down all that institutional stuff that comes from aggregators.

And we've run down all of that institutional stuff that comes from Aggregators. Our view is that yes of course, there is going to continue to be pressure on funding costs.

Speaker 7: Our view is that, yeah, of course, there's going to continue to be pressure on funding costs. That we certainly think between what we need to offer and what consumers are demanding are going to result in pressure. Whether that...

We certainly think between what we need to offer and what consumers are demanding.

<unk> is going to result in pressure whether that.

Speaker 7: remains to be seen is that somewhere within the range of much lower to midway, I would tell you right now, expectations are that it's really going to depend on us and our ability to generate more non-interest fairing and frankly even more lower cost international to supplement that, you know what we're doing the next.

Remains to be seen is that somewhere within the range of much lower to mid way I would tell you right now expectations are that its really going to depend on us and our ability to generate more noninterest bearing and frankly, even more lower cost international.

Michael Rose: Very helpful and you know, it's good to see just finally for me, just it's good to see, you know, TCE up a little bit, you know, capital up a little bit this quarter, you can, you utilize the buyback, you're still trading below, tangible book, still of authorization, just wanted to get your kind of near term thoughts on usage of the buyback from here and just balancing, you know, some of the headwinds that are out there from a capital perspective, thanks. Yeah, you know, we talk about capital levels all the time, of course, like others do in our view is that, you know, you need to look at all the tools in the toolkit, certainly buybacks are one of those, obviously, we've continued, you know, our board approved, continuing to pay the dividend and we like where we are capital-wise, we certainly don't like where we are valuation-wise, I'm sure that's it.

To supplement what we're doing domestically. So I think it's really going to be something that could be a wide range on that and I think that's why sharing.

Speaker 3: So I think it's really going to be something that could be a wide range on that. And I think that's why Sharon and I have not given you something very specific. I would just say it's certainly not going to be as dramatic. The flip side is, is there definitely going to be some? So yes, I know it.

Not giving you something very specific I would just say, it's certainly not going to be as dramatic. The flip side is there is definitely going to be some so yes, I know its a wide range but.

Speaker 3: I think that everyone in the marketplace, this is the period where level in 24, absolutely, that's all right.

No.

I think that everyone in the marketplace. This is the period, where will that level in 2000 and for absolutely that's our expectation.

Speaker 3: I think we have another quarter of where there's going to be some compression. It's inevitable just given Mark.

I think we have another quarter of where theres going to be some compression just it's inevitable just given market conditions.

Speaker 8: All right, yeah, that's fair. But then I want to make sure I heard you write your comment about the loan yield as peak. I mean, I know the loan yield was flat length quarter. And I know your loan yield, I mean.

Alright.

Michael Rose: That is agreed upon by everyone. But our view is that we do need some of this capital from a growth standpoint. And so it's going to be a balancing act. And I think, again, that's what's nice about having the full set of tools and not being restricted to just one or the other, right? That we're going to use it all to grow through that we, you know, our view is it's a combination of these things, right?

Fair.

I wanted to make sure I heard your comment about the loan yield because peak.

The loan yield was flat linked quarter and I know youre alone.

Speaker 8: 6.8% I mean that's you know above average and a great loan yield, but I just wanted to make sure I Understand that dynamic well that the loan yield has peaked because I would have thought there would have been maybe some continued You know especially like CRE loan repricing higher and you could see that yield trip higher, but you're saying you think it's flat come here

Six 8%.

Above average and a great loan yield, but I just wanted to make sure.

Understand that dynamic well, but the loan yield has piece because I would've thought there would have been maybe some continued.

Especially like CRE loan repricing higher and you could see that Youll drip higher but youre, saying you think its flat from here.

Michael Rose: You know, so how we pay on diva, then how we utilize the buyback authorization, how we manage in what our expectations are for growth. And by the way, we're not going to grow for growth, say it's profitable growth, right? It is not going to be that, you know, obviously this is a nice quarter to add back to capital at 22 million, you know, our view is we need to be running in those levels going forward to support, you know, the growth plans that we have.

Speaker 3: Look, I think our view is the biggest driver in increasing loan yields right has been the fact that we've been in that sensitive organization. And so the positive has been that that's been the bigger driver versus higher rate new production.

Look I think our view is the biggest driver in increasing loan yields right has been the fact that we've been asset sensitive organization and so the positive has been that's been the bigger driver versus higher rate new production year.

Speaker 3: You're absolutely asking the right question, which is, yes, we will have higher rate new production in the fourth quarter. I don't know that that'll be as meaningful and often to make it more than to just give you the view of, hey, it's flatish, maybe it's a better way to say it, as opposed to we think we are gonna continue to see improvement in the fourth quarter. Do I believe if we can book three, 400 million of production, that new production, that there'll be some pop, there should be, for sure.

You're absolutely asking the right question, which is yes, we will have higher rate new production in the fourth quarter.

Michael Rose: But I mean, I just want you to know, we sort of don't look at one of these things standalone. We look at all of them. Needless to say, we do agree completely that when you're below the value that that provides an opportunity to buy back, helpful. Thanks for all the comments. I'll set back. Okay. Thanks.

Don't know that that will be is meaningful enough to make it more than just give you. The view of hey, it's flattish maybe is a better way to say it as opposed to we think we're going to continue to see improvement in the fourth quarter. Due I believe if we can book three $400 million of production net new production that there'll be some pop there should be.

Speaker 3: But I still think that the way we're looking at things, there's also some other stuff that'll come off that may have been really part of that at that tentative reprised portfolio, right? So that's really a mixed issue that'll come into play there. But my view is I think we're better off telling you flatish and...

For sure.

But I still think that the way we're looking at things. There is also some other stuff that will come offset.

Brady Gailey: Our next question comes from a line of Brady Galey with KBW. Hey, thanks. Good morning, guys. Morning, Brady. So the net interest margin guidance for four Q as far as being down less than three Q. And that's a pretty, you know, wide range just given three Qs down about 25 basis points. Is there any way to, you know, type that range for four Q. And then how do you think that four Q will be the bottom in the them.

May have been you know really part of that asset sensitive repriced portfolio right. So.

It's really it's really a mix issue that will come into play there, but my view is I think we're better off telling you flattish in.

Speaker 7: give you the positive upside, you know, depending on product.

Give you the positive upside.

Depending on production.

Speaker 8: All right, then the surrendered bully and the $2 million benefit. But was any of that in the 3-key run rate or is that all a positive kind of looking forward?

Alright, and then the surrendered boldly in the $2 million benefit was any of that in the <unk> run rate or is that all a positive kind of looking forward.

Brady Gailey: And you could see some expansion next year. Do you think there could be more downside and 24? Yeah, Brady, look, I think this is the quarter right where asset yields kind of top out. I think deposit costs continue just for competitive purposes. Look, everyone, I'd like to say we're putting on the right kind of deposits. You know, we've talked a lot about not just putting on, you know, and we've run down all that institutional stuff that comes from aggregators.

Speaker 4: It's a positive looking forward. We expect that yield to materialize fully in 2024 going.

It's a positive looking forward, we expect that yield to materially fully in 2020 for going forward.

Speaker 8: And then finally for me, just a bigger picture question. I know we have the 1% ROA target out there. You guys were pretty much at that level last year, but not near that level here today this year. And I mean, maybe the industry is not even there either. I know profitability is not a pressure everywhere. But any updated thoughts on timing as far as when you can hit that one ROA.

Okay, Alright, and then finally for me just a bigger picture question I know we have.

1% ROA target out there you guys were pretty much at that level last year.

But you know.

Not near that level year to date this year.

I mean, maybe the industry is not even there to either other profitability is under pressure everywhere, but any updated thoughts on timing.

Brady Gailey: Our view is that, yeah, of course, there's going to continue to be pressure on funding costs. You know, that we certainly think between what we need to offer and what consumers are demanding are, you know, is going to result in pressure. You know, whether that remains to be seen is that, you know, somewhere within the range of, you know, much lower to midway, you know, I would tell you right now, expectations are that it's really going to depend on us and our ability to generate more non-interest bearing and frankly even more lower cost international to supplement, you know, what we're doing domestically.

Timing as far as when you can hit that one Roy.

Speaker 3: Yeah, look, we absolutely expect to be back on track in 2024. I think with the great additions we've been getting

Yes look.

We absolutely expect to be back on track in 2024.

I think with the great additions we've been.

Getting on the team.

Speaker 7: with all the other initiatives we've been talking about.

With all the other initiatives, we have been talking about.

Speaker 7: You know, I do want to just comment, you know, as an organization, we've had considerable time, energy and expense around this core conversion. You know, there's a lot of additional support that is going into this and, you know, our view is getting this done is going to really clear the runway for us.

I do want to just comment as an organization, we've had considerable time energy and expense around this core conversion.

There's a lot of additional support that is going into this and our view is getting this done.

Brady Gailey: So, I think it's really going to be something that, you know, could be a wide range on that. And I think that's why Sherry and I have not given you something very specific. I would just say it's certainly not going to be as dramatic. The flip side is, is there's definitely going to be a wide range on that, but it's definitely going to be a wide range on that, to be some.

Really cleared the runway for us.

Speaker 7: as we go into 2024. So I think you have the positive of all these great people that have joined the, in my opinion, an already great...

As we go into 2024, so I think there is a positive of all these great people that have joined in my opinion, an already great team.

Speaker 7: and you know you get the production that's gonna come from that you get the conversion pass this

And Youll get the production that's going to come from that you get the conversion past us.

Brady Gailey: So, yes, I know it's a wide range, but, you know, I think that everyone in the marketplace, this is the period where, will it level in 24? Absolutely, that's our expectation. I think we have another quarter of where there's going to be some compression. It's inevitable, just given market conditions. All right, yeah, that's fair. I want to make sure I heard you write your comment about the loan yield. I mean, I know the loan yield was flat, length, quarter.

Get the Halo effect of.

While this great new branding and it's much more targeted branding.

To drive towards making sure that we're back on track in that one 1% plus 12%.

Brady Gailey: And I know your loan yield, I mean, it's 6.8%. I mean, that's above average and a great loan yield. But I just wanted to make sure I understand that dynamic well that the loan yield has peaked because I would have thought there would have been maybe some continued, you know, especially like CRE loan repricing higher and you could see that yield drip higher, but you're saying you think it's flat. Come here.

Speaker 3: type of metrics that we talked about. And as Sherry mentioned in her comments, look, we're gonna have a bumpy fourth quarter, first quarter, just if you look at a pure efficiency ratio just from, and we're giving you that without trying to exclude those things like they're one time or non-recurring, we're just saying, look, efficiency's gonna be higher because we have to incur these expenses. So, but the expectation is absolutely to get this place back on track and get back in that state.

Type of metrics that we talked about and as Sherry mentioned in her comments, what we're going to have a bumpy fourth quarter first quarter. Just if you looked at a pure efficiency ratio just from.

And we're giving you that without trying to exclude those things like they're one time or nonrecurring. We're just saying look the efficiency is going to be higher because we have to incur these expenses so but.

Brady Gailey: Look, I think our view is the biggest driver in increasing loan yields right has been the fact that we've been in that sensitive organization. And so the positive has been that that's been the bigger driver versus higher rate new production. You're absolutely asking the right question, which is yes, we will have higher rate new production in the fourth quarter. I don't know that that'll be as meaningful enough to make it more than to just give you the view of, hey, it's flatish, maybe is a better way to say it as opposed to we think we are going to continue to see improvement in the fourth quarter.

But the expectation is absolutely to get displays back on track and get back in that 60% to 60% range are we I think we've hit and then unfortunately.

Speaker 3: to a 60% range of weed. I think we've hit, you know, and then unfortunately it's had the bounce back up.

<unk> back up but I also would tell you Brady look we've had a choppy year.

Speaker 3: But I also would tell you Brady, look, we've had a choppy year and I think, you know, because obviously there's been some one-time items. They're in the higher provision. We reported last quarter.

I think because obviously theres been some one time items in the higher provision we reported last quarter.

We think that we've done a really good job of assessing risk in the portfolio and getting which is why our reserve coverage is higher than.

This quarter in particular I do just want to note we had some elevated charge offs, but we're accelerating our efforts to try and get the NPL and NPA is off our books.

Brady Gailey: Do I believe if we can book three, 400 million in production, that new production, that there'll be some pop, there should be for sure. But I still think that the way we're looking at things, there's also some other stuff that will come off that, you know, may have been, you know, really part of that at that tentative repriced portfolio, right. So, you know, that's that it's really, it's really a mix issue that will come into play there, but my view is, I think, you know, we're better off telling you flatish and give you the positive upside, you know, depending on production.

Speaker 7: And so that created some additional noise. I know you commented on that and you're right up, but you know, our view is it's better to get this stuff done and off the books as fast as possible and get them back into earning status. Get that money back into earning status. That's gonna help too.

And so that created some additional noise.

I know you've commented on that in your write up but our.

Our view is it's better to get this stuff done and off the books as fast as possible and get them back into earning status get that money back into earning status.

That's going to help too.

Okay, great. Thanks sure.

Yep.

Speaker 1: Our next question comes from a line of Stephen Scouton with Piper Sandler.

Our next question comes from the line of Stephen Scouten with Piper Sandler.

Brady Gailey: All right, then the surrendered bully and the $2 million benefit, what was any of that in the three key run rate, or is that all a positive kind of looking forward. It's a positive looking forward, we expect that yield to materialize fully in 2024 going forward. Okay, and then finally, for me, just a bigger picture question, I know we have the, you know, 1% ROA target out there, you guys were pretty much at that level last year, but, you know, not near that level here today this year, and I mean, maybe the industry is not even there either.

Hey, good morning, everyone.

Speaker 9: I guess I'd love to kind of touch on credit if we could and kind of

Hey, Steve.

I guess I'd love to kind of touch on <unk>.

Credit, if we could and kind of.

Speaker 9: Maybe if you could give a view for how you think credit costs could kind of stabilize from here and what you would kind of say to investors to get investors to give them some confidence around that. And obviously choppy for the last four quarters and maybe specifically the pace to charge off you might expect from the consumer direct portfolio.

Choppy for the last four quarters, and maybe specifically the pace of charge offs you might expect from the consumer direct portfolio at this point.

Yeah, I think let me go backwards, we expect that to improve indirect consumer charge offs on a go forward basis, I think sheri made a comment that portfolio the expectation duration wise.

Brady Gailey: There are no property buildings on the pressure everywhere, but any updated thoughts on your timing as far as when you can hit that one ROA. Yeah, look, we absolutely expect to be back on track in 2024. I think with the great additions, we've been getting on the team with all the other initiatives we've been talking about, you know, I do want to just comment. You know, as an organization, we've had considerable time, energy, and expense around this core conversion, you know, there's a lot of additional support that is going into this, and you know, our view is getting this done is going to really clear the runway for us, as we go into 2024.

Smaller and smaller every quarter and maximum two years out before it's completely run off.

Speaker 7: So that would be the view, yes, that will improve as we move forward. You know, we think we saw an acceleration and now it's coming the right.

So that would be the view, yes that will improve as we move forward. We think we saw an acceleration and now it's coming to the right direction for us.

Speaker 3: You know, we've had a couple million dollars worth of charges that related, you know, from small business.

We've had.

Couple of million dollars worth of charges that related from small business.

Our view is you know that's been a business, we've really tightened our credit criteria, it's not actually something we've done is anywhere near the emphasis that had been done in the past and you know the expectation is there that something we're going to continue to closely monitor but the big thing has been these you know you're just saying in the last.

Speaker 3: And you know, the expectation is there that some were going to continue to closely monitor. But the big thing has been these...

Brady Gailey: So I think you have the positive of all these great people that have joined in my opinion, an already great team. And you know, you get the production that's going to come from that. You get the conversion past us. You get the halo effect of, you know, all this great new branding, you know, and it's much more targeted branding. I expect a much stronger 2024. Look, the reality is that also you have to caveat that is that also depends on the economic conditions that go forward in 24.

Several quarters, there have been a bunch of legacy credits, yes. There was one that was a south Florida credit in the first quarter no question, but there've been a bunch of these legacy credits and it's one of the reasons why we stepped up and accelerated you know made the decision to take a haircut on selling this New York Creek property. It was the <unk>.

Speaker 3: stepped up and accelerated, you know, made the decision to take the haircut on selling this New York Cree property.

Speaker 7: It was the single largest exposure left in the portfolio. Frankly, it's one of the largest single exposures we had in the entire portfolio. And our view was better to...

Largest exposure left in the portfolio frankly, it's one of the largest single exposures, we had in the entire portfolio and our view was better to take that haircut now and get that off the books and as you can see we produced our exposure down to $240 million as a result of that sale and the view is we've got a good luck.

Brady Gailey: But we are doing all the things we can within our control to drive towards making sure that we're back in track in that one, one percent plus 12 percent, you know, type of metrics that we talked about. And as Shary mentioned in her comments, look, we're going to have a fourth quarter, first quarter, just if you looked at a pure efficiency ratio just from, you know, and we're giving you that without trying to exclude those things like their one time or non-recurring, we're just saying, look, the efficiency is going to be higher because we have to incur these expenses.

Speaker 3: to take that haircut now and get that off the books. As you can see, we produced our explosion down to 240 million as a result of that sale.

Speaker 7: And the viewers, we've got a good line of sight into performance on the rest of that portfolio. So...

<unk> insight into performance on the rest of that portfolio. So all.

All that being said you know.

Look you the Crystal ball do you you have with this we think our teams are doing a really good job of staying on top of relationships. Following through with know your customer could there be an unexpected of course, but the view right. Now is we think we've done a really good job of looking certainly at the largest ones, which have created the most noise.

Brady Gailey: So, but the expectation is absolutely to get this place back on track and get back in that 60 percent, you know, to a 60 percent range. I think we've hit, you know, and then, unfortunately, it had the bounce back up. But I also would tell you, Brady, look, we've had a choppy year, and I think, you know, because obviously there's been some one-time items that they're in the higher provision, we've reported last quarter, you know, we think that we've done a really good job of assessing risk in the portfolio and getting, you know, which is why our reserve coverage is higher, you know, and in this quarter, in particular, you know, I do just want to note, we had some elevated chargeoffs, but we're accelerating our efforts to try and get the NPLs and NPAs off our books.

Speaker 7: But again, there's been a lot. Unfortunately, we have had some significant events around that New York pre-Portfolio. And that's no surprise. I think we've played.

But again you know that.

There's been a lot. Unfortunately, we have had.

Some significant events around that New York <unk> portfolio, and that's no surprise I think we've.

Played even more and more attention.

On that one.

Speaker 9: Yeah, that makes sense. And so I guess, I mean, it sounds like you feel like maybe your past.

Yes that makes sense, so I guess I mean.

It sounds like you feel like maybe you are passed.

Speaker 9: the lion share the immediate risk. I mean, obviously like you said, we don't have a crystal ball. We don't know what's coming next year. But I mean, 60 some basis points in that charge us so far this year, 32 last year. If you had to peg a number for 24, kind of somewhere in the middle, or I mean, I guess how do we think about the ability for that to normalize?

The lion's share of the immediate risks I mean, obviously like you said, we don't have a crystal ball, we don't know whats coming next year, but I mean 60, some basis points in net charge offs. So far this year 32 last year. If you had to peg a number for 'twenty four kind of somewhere in the middle or I guess, how do we think about the ability for that to normalize for one yes.

Brady Gailey: And so, that created some additional noise. I know you comment and on that and you're right up, but, you know, our view is it's better to get this stuff done and off the books as fast as possible and get them back into earning status, get that money back into earning status, that's going to help too. Okay, great. Thanks, Jerry. Yep.

Speaker 3: Yeah, look, our expectation again, these have been the lumpy credits. The ones that we had the most, you know, we'll say it placed the most time in energy to watch and had concern with. You've now seen come through, right? And if you look at what's in NPLs and NPAs.

Yes look our expectation again these have been the lumpy credits.

The ones that we had the most.

We will say placed the most time and energy to watch and had concerned with.

You've now seen come through right and if you look at what's in Npls in NPA.

Steven Scouten: Our next question comes from a line of Steven Scouton with Piper Sandler. Hey, good morning, everyone. Hey, Steven.

Speaker 3: in the real state-owned portfolio, the two largest pieces of that are based off the New York. And so, you have the view, yeah. To the extent we can continue to see paydowns in New York.

And the real estate owned portfolio.

The two largest pieces of that are based off the New York and so the view, yes, I mean to the extent we can continue to see Paydowns in New York, We continue to see and closely monitor that portfolio I think the Lumpiness that's created those charges.

Steven Scouten: I guess I'd love to kind of touch on credit if we could and kind of, maybe if you could give a view for how you think credit costs could kind of stabilize from here and what you would kind of say to investors to give them some confidence around that, and obviously, choppy for the last four quarters and maybe specifically the pace of chargeoffs you might expect from the consumer direct portfolio at this point. Yeah, I think, let me go in backwards.

Speaker 7: you to see, you know, in closing manner that portfolio. I think the lumpiness that's created those charges will come down pretty.

Will will come down pretty significantly probably to the levels that you talked about 33% range and Gary talk a little bit more color also if we look at the charges compensation for the quarter the reduction of eight basis points in the conversion of the reserve it's related to charge offs previously reserved so that takes the new charge offs closer to <unk>.

Speaker 7: Probably to the level that you talked about. 30 and point three.

Speaker 4: And Jerry, to add a little bit more color, if we look at the charge of compositions for the quarter, the reduction of eight basis points in the coverage of the reserve, it's related to charge of previously reserves. So that takes the new charge of closer to 30. And when we look into that composition itself, and we specifically will look into the indirect portfolio, we are seeing the behavior of a reduction of charge of starting to take place this quarter. A little bit later within the quarter than what we were expecting, but definitely behavior showing improved.

Steven Scouten: We expect that to improve the indirect consumer chargeoffs on a go-forward basis. I think, Sherry made a comment that portfolio, the expectation duration wise, you know, it's getting smaller and smaller every quarter, and you know, maximum two years out before it's completely run off. So that would be the view, yes, that will improve as we move forward. We think we saw an acceleration analysis. It's coming the right direction for us. You know, we've had a couple million dollars worth of charges that related, you know, from small business.

<unk>.

Speaker 9: got it helpful. And maybe moving to the deposit side, Jerry, you noted an international deposit growth at the focus, because you have for a bit now, but that book's been relatively flat. What kind of changes course there, what would allow you to grow it, and any CD maturities coming on that will help on the deposit side at all.

Got it helpful.

And maybe moving to the deposit side.

Jerry you noted international deposit growth is the focus.

You have for a bit now, but that book has been relatively flat what kind of changes of course, there are what would allow you to grow it in any.

CD maturity coming on that will help on the deposit side at all.

Steven Scouten: You know, our view is, you know, that's been a business we've really tightened our credit criteria. It's not actually something we've done is anywhere near the emphasis that have been done in the past. And, you know, the expectation is there that some we're going to continue to closely monitor. But the big thing has been these you know, of you just saying in the last several quarters, there've been a bunch of legacy credits.

Speaker 7: Yeah, look, I think the team, you know, it's taken us a couple quarters to get the synergy as a group to sort of get our footing of refocusing on this. Remember.

Yeah look I think the team is.

It's taken US a couple of quarters to get the synergy of the group to sort of get our footing of refocusing on this remember.

Speaker 7: We had prior to this year, it really been in maintenance mode there, a combination of stabilizing it back two years ago to coming through the other side of COVID.

We had prior to this year it really been in maintenance mode. There.

Combination of stabilizing it back two years ago to coming through the other side of Covid.

Steven Scouten: Yes, there was one that was a South Florida credit in the first quarter. No question, but there've been a bunch of these legacy credits. And it's one of the reasons why we stepped up and accelerated, you know, made the decision to take the haircut on selling this New York Creek property. It was the single largest exposure left in the portfolio. Frankly, it's one of the largest single exposures we had in the entire portfolio.

Speaker 7: So travel is just resumed. We want to be very cautious and make sure that what we are growing, we have very good KYC, BSA AML in place.

Have to remember that the bulk of that portfolio is customers who are using those accounts. So.

Steven Scouten: And our view was better to take that haircut now and get that off the books. And as you can see, we produced our exposure down to 240 million as a result of that sale. And the view is we've got a good line of sight into performance on the rest of that portfolio. So, all that being said, you know, look, the crystal ball you have with this, we think our teams are doing a really good job of staying on top of relationships, you know, following through with no-your-customer.

Really the net growth we need to get for this to grow was exactly your question, which is we have to book more new business.

Speaker 3: and our expectation is that is in the process of rent.

And our expectation is that is in the process of ramping up.

Speaker 3: And Steve and I apologize. I think your second question was around CD maturities in the quarter.

And Steven I apologize I think your second question was around CD maturities in the quarter.

Speaker 7: Yeah, just curious if there's anything coming that would allow, you know, some of the funding costs pressure to abate at all. Not that other CD costs are going down yet, but just kind of wondering if there's a demo I would help. I was going to say, you know, I think what Sherry's remarks were is that we look at the delta of what is maturing as to be much closer, right? So these were fairly higher cost maturities this fourth quarter.

Yes, just curious if there was any anything coming that would allow some of the funding cost pressure to abate at all.

Not that other CD costs are going down yet, but just kind of wondering if there is.

Steven Scouten: You know, could there be an unexpected, of course, but the view right now is we think we've done a really good job of looking certainly at the largest ones, which have created the most noise. But again, you know, that's there's been a lot. Unfortunately, we have had some significant events around that New York Creek portfolio. And, you know, that's no surprise. I think we've, you know, played even more and more attention on that one. Yeah, that makes sense.

I was going to say.

I think with Sherry's remarks, where is that we look at the delta of what is maturing as to be much closer right. So these were fairly higher cost maturities this fourth quarter.

Speaker 7: So even if we did a retention, we didn't expect significant incremental expanses as a result of that.

So even if we even did a retention we didn't expect significant incremental expense as a result of that.

Speaker 9: Okay, that's very helpful. And then maybe just last thing for me, sounds like growth is picking back up already this quarter. You said the pipelines are strong. I know, you know, for most of the banks we look at, growth is kind of getting pulled back and people seem a bit more cautious. What kind of gives you confidence in the growth you guys are putting on? Is it new market expansion primarily? That gives you that confidence, or how can you speak to that old?

Okay. That's very helpful. And then maybe just last thing for me it sounds like growth is picking back up already this quarter. You said the pipelines are strong I know for most of the banks, we look at growth as kind of getting pulled back when people seem a bit more cautious what kind of gives you confidence.

Steven Scouten: And I guess, I mean, it sounds like you feel like maybe you're past the lion's share, the immediate risk. I mean, obviously, like you said, we don't have a crystal ball. We don't know what's coming next year. But I mean, 60 some basis points in that charge us so far this year, 32 last year, if you had to pay a number for 24 kind of somewhere in the middle, or I mean, I guess how do we think about the ability for that to normalize them with?

And the growth you guys are putting on is it new market expansion, primarily that gives you that confidence or how can you speak to that a little bit.

Speaker 3: I have to tell you, I think it should be lost for me to be a big transition in...

I have to tell you I think.

Steven Scouten: Yeah, look, our expectation again, these have been the lumpy credits, the ones that we had the most, you know, we'll say it placed the most time and energy to watch and had concern with. You've now seen come through, right? And if you look at what's in NPLs and NPAs in the real estate on portfolio, the two largest pieces of that are based off the New York. And so, you know, the view, yeah, I mean, to the extent we can continue to see pay downs in New York, we continue to see, you know, in closing monitor that portfolio.

It shouldn't be lost we made a big transition and in the team and some of the composition of the team, particularly on the commercial side this year.

Speaker 7: in the team, in some of the composition as a team, particularly on the commercial side this year. And I think that that team is really gaining even more and more footing at this point. We're also expanding that team. I can tell you that we've got five new, strong business development officers that have either started or will be starting, frankly, next week.

And I think that that team is really gaining even more and more footing. At this point. We're also expanding that team I can tell you that we've got five new.

Strong business development officers that have either started or will be starting frankly next week.

Speaker 7: Here at the organization, we expect we've added in Broward, we've added in Miami Day. I think we've had another additional person in the...

Here at the organization, we expect we've added in Broward we've added in Miami Dade I think we've had another additional person in the.

Speaker 7: on the other side in Houston. And so we feel good about what these new team numbers are gonna be able to bring.

Steven Scouten: I think the lumpiness that's created those charges will, will come down pretty significantly, probably to the levels that you talked about 30.3% range. And Jerry, to add a little bit more color, if we look at the charge of compositions for the quarter, the reduction of a basis points in the coverage of the reserve, it's related to charge of previously reserves. So, that takes the new charge of closer to 30. And when we look into that composition itself, and we specifically look into the indirect portfolio, we are seeing the behavior of a reduction of charge of starting to take place this quarter. A little bit later within the quarter than what we were expecting, but definitely behavior showing improved. Good evening. Got it helpful.

On the other side in Houston.

So we feel good about what these new team members are going to be able to bring in addition, right and so every time I talk about another person coming on board you have to kind of think about that as a scorecard of their set of goals. Both on the loan and deposit side that are additive to the core base of people that we have and so.

Look I'm of the belief that this is a this is a time, it's a wonderful opportunity people like our story they want to come here.

They believe in what we're doing.

The exact has done a great job.

Speaker 7: of, you know, attracting some of these folks as well. And so that, to me, is what gives confidence around our ability, you know, and of course, I have to say,

Attracting some of these folks as well and so that to me is what gives confidence around our ability and of course I have to say, we talked about awareness the awareness levels for this organization just continue to escalate.

Steven Scouten: And maybe moving to the deposit side, Jerry, you noted an international deposit growth at the focus because you have for a bit now, but that book's been relatively flat. What kind of changes course there? What would allow you to grow it? And any CD maturities coming on that will help on the deposit side at all? Yeah, look, I think the team, you know, it's taken us a couple quarters to get the synergy of the group to sort of get our footing of refocusing on this.

Speaker 7: You know, we talked about awareness, the awareness levels for this organization just continue to escalate.

Speaker 7: get lots of compliments about it, you know, when I'm out in the marketplace and talking with people. And I think that halo effect that comes from that.

Lots of compliments about it you know what I'm out in the marketplace and talking with people.

That halo effect that comes from that is also extremely helpful. In the consideration set and look we take every single interaction.

Speaker 3: is also extremely helpful in the consideration set. And look, we take every single interaction, I don't wanna beat the drum on this one very personally. I think that one of the advantages of banking with a company like ours is the personal interaction. You can get with all levels of management, the attention, the quicker turnaround times.

I don't want to beat the drum on this one very personally I think that one of the advantages of banking with a company like ours is the personal interaction you can get with all levels of management the attention the quicker turnaround times and so your reputation builds as a result of that and that's what gives me confidence that youre going to see growth.

Steven Scouten: Remember, we had prior to this year, it really been in maintenance mode there, you know, a combination of stabilizing it, you know, back, you know, two years ago to, you know, coming through the other side of COVID. So travel is just resumed. We want to be very cautious to make sure that what we are growing, we have very good KYC, BSA AML in place. And so I think we've been gaining more and more confidence there.

Speaker 9: So your reputation built as a result of that, and that's what gives me confidence that you're gonna see growth out of our organization in the fourth quarter. Right, that's really a good color. Appreciate the time this morning.

Out of our organization in the fourth quarter.

Great.

Really good color I appreciate the time this morning.

Absolutely happy to take care.

Steven Scouten: Have to remember that the bulk of that portfolio is, customers are using those accounts. So, you know, really the net growth we need to get for this to grow is exactly your question, which is we have to book more new business. And our expectation is that is in the process of ramping up. And Steven, I apologize, I think your second question was around CD maturities in the quarter. Yeah, just curious, if there was anything coming that would allow, you know, some of the funding costs pressure to debate at all, not this.

Speaker 1: Our next question comes from a line of Fettys Strickland with Janie Montgomery Scott. 1 7 8 3 2 1.

Our next question comes from the line of.

That is strictly with Janney Montgomery Scott.

Hey, good morning.

Hey, good evening.

Speaker 10: Just wanted to start by clarifying on expenses. Is the court's expense rate you're guiding to in the fourth quarter? Is that going to be similar to the 58 million core that we saw this quarter? And then are the FIS charges being the one time item on top of that?

Just wanted to start by clarifying on expenses is that core expense rate you're guiding to in the fourth quarter is that going to be similar to the 58 million core debt.

We saw this quarter and then are these.

<unk> charges being a onetime item on top of that.

Speaker 3: Yeah, no, we expect, but we had said, I think, Sherry and I had talked in part of Cours Fede.

Yes no.

Steven Scouten: Other CD costs are going down yet, but just kind of wondering if there's a lot of that would help. I was going to say, you know, I think what Sherry's remarks were, is that we look at the delta, what is maturing as to be much closer. Right. So these were fairly higher cost maturities this fourth quarter. So even if we did a retention, we didn't expect significant incremental expenses as a result of that. Okay, that's very helpful.

We expect book, we had said I think sheri and I have talked in prior quarters fed a debt.

Speaker 3: You know, the targeting was anywhere between sort of all, call it a 59 and a half to 61ish range.

Targeting was was anywhere between sort of I'll call. It a $59 $5 61 ish range.

And then youre going to see the elevated expense that takes place now passed before we do anything of some of these other additional expense initiatives that I was mentioning earlier.

I'd love to give you more color, but I would prefer to just say that what youre going to see in <unk> right.

Jerry Plush: And then maybe just last thing for me, sounds like growth is picking back up already this quarter. You said the pipelines are strong. I know, you know, for most of the banks we look at, growth is kind of getting pulled back and people seem a bit more cautious. What kind of gives you confidence in the growth you guys are putting on? Is it new market expansion primarily? It gives you that confidence, or how can you speak to that a little bit?

<unk>.

Speaker 7: we'll call it, you know, $56 million, expense of running everything at the same time, is more of an anomaly for the period than it is, you know.

We'll call it $5 6 million dollar expense of running everything at the same time is is it more of an anomaly for the period than it is.

Speaker 7: So that's why when we started to talk about this, we're, yeah, if you peeled it back, we still think our run rate isn't in around that range, but let's be clear. We are going to have in 2024 elevated technology related expense as part of this process that will then was we decommissioned things over time. That's gonna be a continuous improvement exercise for us as an organization. So it will probably, as we said, certainly stay elevated into one out of minimum. Share your animal view when it adds.

So that's why when we started to talk about this where yes, you Peel. It back we still think our run rate is in and around that range, but let's let's be clear we are going to have in 2020 for elevated technology related expense.

Jerry Plush: I have to tell you, I think it should be lost. We made a big transition in the team in some of the composition as a team, particularly on the commercial side this year. And I think that that team is really gaining even more and more footing at this point. We're also expanding that team. I can tell you that we've got five new strong business development officers that have either started or will be starting, frankly, next week.

Speaker 11: it's kind of the effects of running these applications and technology efforts in parallel.

Completely right.

The effect of running these applications and technology efforts in parallel.

Jerry Plush: Here at the organization, we expect we've added in Broward. We've added in Miami-Dade. I think we've had another additional person, you know, on the other side in Houston. And so we feel good about what these new team members are going to be able to bring an addition, right? And so every time I talk about another person coming on board, you have to kind of think about that as a scorecard of their set of goals both on the loan and deposit side that are added to the core base to people that we have.

Got it. So then it sounds like over time.

Speaker 10: You can kind of hold that a little more flat as you redeploy some of those cost days as you quit running things and parallel into other technology initiatives and get I'll handle them pretty soon.

You can kind of hold that a little more flat as you redeploy some of those cost saves to get if you quit.

Quit running things.

Parallel.

Two other technology initiatives.

Others the back.

Speaker 3: Yeah, and Fetty and Ferenus, you know, just based off the comments, those making, you know, from the last set of questions.

And in fairness.

Just based on the comments I was making.

Last set of questions you have to take into account with us our expectation.

Speaker 7: You have to take into account with us, you know, our expectation counter to a lot of other people is that we're expecting.

Jerry Plush: And so, look, I'm of the belief that, you know, this is a time, it's a wonderful opportunity. People like our story, they want to come here, they believe in what we're doing. The execs have done a great job of, you know, attracting some of these folks as well. And so that, to me, is what gives confidence around our ability, you know, and of course, I have to say, you know, we talked about awareness, the awareness levels for this organization just continue to escalate, get lots of compliments about it, you know, when I'm out in the marketplace and talking with people.

Counter to a lot of other people.

Speaker 3: grow and it's a combination of we just see good opportunities in the marketplace. So you're going to have a higher, you know, all-coil and ironing base as well that comes into play. So some of that is a director's, although some of these other investments that we're making in people. But I will tell you we're continuously evaluating how as this technology gets deployed that we can better assess a ratio of business development.

We're expecting to continue to grow and it's a combination of we just see good opportunities in the marketplace and so youre going to have.

A higher I'll call. It earnings base is well it comes into play. So some of that is a direct result of some of these other investments that we're making in people, but I will tell you we're continuously evaluating how as this technology gets deployed that we can better assess our ratio of business development.

<unk> support.

Speaker 3: Congressperson expectations, you're going to see us go into a true continuous improvement mode in 2024.

Understood expectation is youre going to see us go into a true continuous improvement mode in 2024.

Jerry Plush: And I think that halo effect that comes from that is also extremely helpful in the consideration set. And look, we take every single interaction, you know, I don't want to beat the drum on this one very personally. I think that, you know, one of the advantages of banking with a company like ours is the personal interaction you can get with all levels of management, the attention, the quicker turn around time, and so your reputation builds as a result of that and that's what gives me confidence that you're going to see growth out of our organization in the fourth quarter. That's a really good color. Appreciate the time this morning. Absolutely happy to kick here.

Speaker 7: You know, frankly, in 2023, it's been all about bringing in some new team members to add additional growth with the vast majority of efforts. You know, again, under the, I'll refer to it as unnoticed and under the surface. There's just been an incredible amount of energy and effort by this team focused on this FIS conversion. And it's been massive undertaking, you know, sometimes people...

A massive undertaking sometimes people.

Speaker 7: may not quite remember, but we're converting everything. I mean, when I mean everything, everything. And so this is a...

It may not quite remember, but we're converting everything I mean, when I mean, everything everything and so this is a.

Speaker 3: A major, major undertaking for our company and we could not be even more excited.

A major major undertaking for our company and we could not be more excited for that date in early November to come and finally get to the point, where yes. We will we will start to see that the pressure will be on making sure. Our customers are okay. We're onboarding, new new business Okay.

Feddie Strickland: Our next question comes from a line of Feddie Strickland with Jenny Montgomery Scott. Hey, good morning. Hey Feddie.

Speaker 3: for that date in early November to come and finally get to the point when...

Speaker 3: start to see that the pressure will be on making sure our customers are okay. We're onboarding new business okay and we can get back to really focusing more and more on, you know, as I said.

Feddie Strickland: Just wanted to start by clarifying on expenses. Is the court expense rate you're guiding to the fourth quarter? Is that going to be similar to the 58 million core that we saw this quarter? And then are the FIS charges being the one time item on top of that? Yeah, no, we expect what we had said, I think, Shary and I have talked in prior quarter-svede that the targeting was anywhere between sort of all, call it a 59 and a half to 61-ish range and then you're going to see the elevated expense that takes place.

And we can get back to really focusing more and more on as I said continuous improvement efforts.

Speaker 10: Understood that's helpful. Thanks for the color on that Jerry. And just, such a gears for a moment here. I appreciate the detail and rate sensitivity on the slide 15 of the deck.

Understood. That's helpful. Thanks for the color on that Gerry.

Switching gears for a moment here I appreciate the detail on rate sensitivity on slide 15 of the deck.

Speaker 10: I'm trying to understand that second circle chart. Is that saying that 52% of all loans repriced within a year, or is that 52% of fixed rate loans? And the reason I ask is I'm just trying to understand both the dollar amount of the loans repricing and the average picked up you could potentially see in spread as those loans are renewed, kind of going into 2024.

I'm trying to understand that second circle chart is that saying that 52% of all loans reprice within a year or is that 52% of fixed rate loans and the reason I ask is I'm just trying to understand.

Feddie Strickland: Now, fast before we do anything of some of these other additional expense initiatives that I was mentioning earlier. I'd love to give you more color, but I would prefer to just say that what you're going to see in 4Q, we'll call it $56 million expense of running everything at the same time, is more of an anomaly for the period than it is. So that's why when we started to talk about this, we're, yeah, if you peeled it back, we still think our run rate is in and around that range, but let's be clear, we are going to have in 2024 elevated technology related expense as part of this process that will then was we decommissioned things over time.

Both the dollar amount of the loans re pricing and the average picked up you could potentially see in spread as those loans are renewed kind of going into 2024.

Speaker 11: Sorry, I'm going back to the slide. So 50 to 47% of our fixed rate modes. Fixed rate modes.

Alright good.

And going back to the slide 252%.

7% over six.

Fixed rate loan.

One quick second.

Sure Im talking about the second Circle chart by repricing term.

Yeah.

Speaker 11: So that's 100% of the portfolio. 100% of the portfolio will be reprising within less than one year. At 42%, 52% of the portfolio will be reprising within less.

Yes, so that's a 100% of the portfolio, 100% of the portfolio will be repricing within less than one year at 40% to 52% of the portfolio will be replaced.

Definitely.

Speaker 10: Do you have the amount of the six portfolio that's repricing over the next year if you don't that's fine I can follow later? We will be able to provide.

Do you have the amount of the fixed portfolio Thats repricing over the next year. If you don't that's fine I can follow up later.

Feddie Strickland: That's going to be a continuous improvement exercise for us as an organization, so it will probably, as we said, certainly stay elevated in Q1 at a minimum. Shary, I don't know if you want to add any color. No, that's completely right. It's going to be effect of running these applications and technology efforts in parallel. Got it, so then it sounds like over time, you think you can kind of hold that a little more flat as you redeploy some of those cost days to get as you quit running things and parallel into other technology initiatives and get into other areas of that.

We will be able to provide lending.

Great. Thanks for taking my questions guys.

Yep.

Speaker 1: Our next question comes from a line of Matt only with Stephen.

Our next.

<unk> comes from the line of Matt Olney with Stephens.

Hey, Good morning, this is Jordan on for Matt.

Just wanted to get it.

Our final question.

NYSE loan sale, that's going to be taking place today.

That.

I just wanted to get a <unk>.

Or about the additional loss if there is going to be any given that the fair value.

Feddie Strickland: Yeah, and steady and fairness, you know, just based off the comments, those making, you know, from the last set of questions, you have to take into account with us, you know, our expectation counter to a lot of other people is that we're expecting to continue to grow and it's a combination of we just see a good opportunities in the marketplace. So you're going to have, you know, a higher, you know, I'll call it our enemy base as well that comes into play.

Just give any color on that that'd be great.

Speaker 7: Yeah, look, our view was we took a mark on that. It was as obviously cool and what we saw, but I'll let Sherry go ahead. I know it was in her calm.

Yeah look our view was we took a mark.

On that as well as have obviously quarter end to what we saw but I'll, let Sherry go head I know it was in her comments.

Yes, so we did take a valuation a valuation adjustment at the point of transfer. This was prior to the balance sheet of $5 6 million in the actual sale that will take place later today, we do expect some loss on sale between $1 million to $2 million to be recorded.

Feddie Strickland: So some of that is a direct result of some of these other investments that we're making in people, but I will tell you we're continuously evaluating how as this technology gets deployed that we can better assess our ratio of business development. Kongersford Expectation, as you're going to see us go into a true continuous improvement mode in 2024, frankly in 2023, it's been all about bringing in some new team members to add additional growth with the vast majority of efforts, again, under the, I'll refer to it as unnoticed and under the surface, there's just been an incredible amount of energy and effort by this team focused on this FIS conversion, and it's been massive undertaking.

Sorry, what was the number one eight.

Yes, it's a nonrecurring charge and we expect.

We have an offset in <unk>.

Mined as well so.

Our view was look this was a great move to reduce a the highest single point exposure. We had left I think it's in a highly volatile segment of <unk>.

<unk> real estate in New York, and our view was.

We need to move on this because just given.

Speaker 3: Barkey conditions there, it's better to move on and not take the risk. Particularly, I think there's a refinance risk that we come with.

Market conditions there.

Better to move on and not take the risk, particularly I think there is refinance risk that would come with with some of these deals not just necessarily this one all deals and so our view is this was.

Feddie Strickland: You know, sometimes people may not quite remember, but we're converting everything, I mean, when I mean everything, everything, and so this is a major, major undertaking for our company and we could not be even more excited for that date in early November to come and finally get to the point where yes, we'll start to see that, you know, the pressure will be on making sure our customers are okay, we're onboarding new business okay, and we can get back to really focusing more and more on, you know, as I said, continuous improvement efforts.

Speaker 7: Some of these deals, not just necessarily this one, all deals. And so our view is this was a very proactive move by us.

A very proactive move by us to to get this done and over with.

Understood. Thank you and then.

Maybe one more question you talked about that bully restructure and having a $2 million benefit.

But then you also talked about fee income kind of thing.

Flat.

$50 million level is there anything thats going to be offsetting that $2 million benefit any line item that we should be aware of.

Feddie Strickland: I understand, that's helpful, thanks for the color on that, Jerry, and just such a year for a moment here, I appreciate the detail and rate sensitivity on slide 15 of the deck. I'm trying to understand that second circle chart, is that saying 52% of all loans repriced within a year, or is that 52% of fixed rate loans? And the reason I ask is I'm just trying to understand both the dollar amount of the loans repricing and the average picked up you could potentially see in spread as those loans are renewed, kind of going into 2024.

Speaker 11: Now, the benefit of 2 million dollars that we're expecting out of the structure is moving forward, fully 2024. We're not capturing 100% of that benefited fourth quarter because there's some steps still from an admin perspective that have to take place on the restructure. That's why we're providing guidance closer to the results of the 50 million we had in 3Q. But no, no additional assets that were.

No the the benefit of $2 million that we're expecting out of their structure is moving forward for the 2024, we're not capturing 100% of that benefited fourth quarter. Because there are some that's still from an admin perspective that has to take place under restructure that's why we're providing guidance closer to the results of the 50 million that we had in <unk>.

But no no additional offsets that we're seeing over that.

Speaker 10: So, 2024, if the income's gonna be a bit higher than from the current $15 million level. That's the expectation yes. Okay, perfect.

So 2020 for fee income is going to be a bit.

Higher than that.

Current $15 million level.

Duffy expectation yet.

Okay perfect. Thank you for taking my questions I appreciate it.

Feddie Strickland: Sorry, I'm going back to the slide, so 52%, 47% of our fixed rate loans, one click second. Sure, I'm talking about that second circle chart by repricing term. Yes, so that's 100% of the portfolio, 100% of the portfolio will be repriced by the high fee within less than one year. 42% of the portfolio will be repriced within less than one year. Do you have the amount of the fixed portfolio that's repricing over the next year, if you don't, that's fine, I can follow it later. We will be able to provide later.

Absolutely. Thank you.

Speaker 1: That concludes today's question and answer session. I'd like to turn the call back to Jerry Plush for closing remarks.

That concludes today's question and answer session I would like to turn the call back to Jerry flush for closing remarks.

Speaker 3: Thank you everyone for listening in on today's call. We greatly appreciate your interest in Emirates. Again, thank you very much and have a great day.

Thank you everyone for listening in on today's call. We greatly appreciate your interest in Ameren again, Thank you very much and have a great day.

Feddie Strickland: Great.

Speaker 1: This concludes today's conference call. Thank you for participating. You may now disconnect.

This concludes today's conference call. Thank you for participating.

May now disconnect.

Jerry Plush: Thanks for taking my questions, guys. Our next question comes from a line of Matt only with Stevens. Good morning, this is Jordan on from Matt. I just wanted to get a clarifying question on that NYC loan sale that's going to be taken place today, that I just wanted to get a question or about the additional loss if there is going to be any given it's a fair value, if you could just give any color around that that would be great.

Jerry Plush: Yeah, look, our view was we took a mark on that at what, as I've obviously put in what we saw, but I'll let Sherry go ahead and I know it was in her comments. Yeah, so we did take evaluation, evaluation, adjustment at the point of transfer. This was prior to Valensheet of 5.6 million. In the actual sale that will take place later today, we do expect some loss on sale between $1.82 million to be recorded.

Jerry Plush: Sorry, what was the number 1.8? Yeah, it's an unrepairing charge and we expect we have an offset, you know, in mind as well. So, you know, our view was, look, this was a great move to reduce a, the highest single point exposure we had left. I think it's in a highly volatile segment, you know, commercial real estate in New York. And our view was, we need to move on this because just given.

Jerry Plush: And the market conditions there, it's better to move on and not take the risk, particularly I think there's refinance risk that we come with with some of these deals, not just necessarily this one, all deals. And so our view is this was a very proactive move by us to get this done and over with.

Sharymar Kanledon: Understood. Thank you.

Sharymar Kanledon: And then maybe one more question. We talked about that bully restructure and having a $2 million benefit. But then you also talked about the income kind of staying flat at the $15 million level. Is there anything that's going to be offsetting that $2 million benefit any light item that we should be aware of? Now, the benefit of $2 million that we're expecting out of the restructure is moving forward fully 2024. We're not capturing 100% of that benefited fourth quarter because there's some step still from an admin perspective that have to take place on the restructure.

Sharymar Kanledon: That's why we're providing guidance closer to the results of the 50 million we had in 3Q. But no, no additional offset that we're seeing over that. So 2024, if the income's going to be a bit higher than from the current $15 million level. That's the expectation, yes. Okay. Perfect. Thank you for taking my questions. I appreciate it. Absolutely. Thank you.

Jerry Plush: That concludes today's question and answer session. I'd like to turn the call back to Jerry Plush for closing remarks. Thank you, everyone, for listening in on today's call. We greatly appreciate your interest in Emirates. Again, thank you very much and have a great day.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Q3 2023 Amerant Bancorp Inc Earnings Call

Request a DemoDemo

AMT

Amerant Bank

Earnings