Q3 2023 Fulton Financial Corp Earnings Call

Speaker 1: in the financial results and step through our outlook for the remainder of 20.

Curtis Myers: in the financial results and step through our outlook for the remainder of 2023. After our prepared remarks, we'll be happy to take any questions you may have. We are pleased with our third quarter results, operating earnings of 43 cents per share or solid. We saw the positive end loan growth, our net interest margin was stable, and we maintained solid asset quality. Our pre-provision net revenue was down 4% as fee income on an operating basis with downlinked quarter.

Our outlook for the remainder of 2023 after our prepared remarks, we'll be happy to take any questions. You may have we.

Speaker 1: After our prepared remarks, we'll be happy to take any questions you may have.

Speaker 1: We were pleased with our third quarter results operating earnings of 43 cents per share were solid. We saw deposit and loan growth, our net interest margin was stable, and we maintained solid asset quality.

We were pleased with our third quarter results operating earnings of <unk> 43 per share were solid we saw deposit and loan growth. Our net interest margin was stable and we maintained solid asset quality, our pre provision net revenue was down 4% as being at.

Speaker 1: Our pre-provision net revenue was down 4% as fee income on an operating basis was down length quarter. We generate strong results in wealth management that help offset the decline in capital markets income this quarter.

Fee income on an operating basis was down linked quarter, we generated strong results in wealth management that help offset a decline in capital markets income this quarter.

Curtis Myers: We generated strong results in wealth management that helped offset the decline in capital markets income this quarter. Operating expenses were higher during the quarter, largely driven by additional technology expense, as well as higher salaries and benefits expense. Our core operating expenses are expected to decline in the fourth quarter from the third quarter levels. We are focused on our current level of core operating expenses and are committed to realizing the full benefit of recent technology investments, continuing to generate smart growth, and obtaining staffing efficiencies to drive core operating expenses to average assets down in future periods.

Speaker 1: Operating expenses were higher during the quarter, largely driven by additional technology expense, as well as higher salaries and benefits.

Operating expenses were higher during the quarter, largely driven by additional technology expense as well as higher salaries and benefits expense. Our core operating expenses are expected to decline in the fourth quarter from the third quarter levels. We're focused on our current level of core operating expenses and are committed to realizing the.

Speaker 1: our core operating expenses are expected to decline in the fourth quarter from the third quarter.

Speaker 1: We are focused on our current level of core operating expenses and are committed to realizing the full benefit of recent technology investments, continuing to generate smart growth, and obtaining staffing efficiencies to drive core operating expenses to average assets down in future periods.

Full benefit of recent technology investments continuing to generate smart growth and obtaining staffing efficiencies to drive core operating expenses to average assets down in future periods.

Curtis Myers: In addition to our solid operating results, we repurchased 2.2 million shares in the third quarter and continue to monitor capital deployment opportunities. As of September 30th, 29 million remains from our $100 million 2023 repurchase authorization. Turning to growth total loan growth moderated this quarter, growing 133 million, or 2.5% annualized. These results were in line with our expectations that communicated in prior quarters. Commercial loans experienced modest growth and a mixed shift occurred as commercial mortgage loans moved from construction to permanent status.

Speaker 1: In addition to our solid operating results, we repurchased 2.2 million shares in the third quarter and continue to monitor capital deployment operations.

In addition to our solid operating results, we've repurchased two 2 million shares in the third quarter and continue to monitor deployment capital deployment opportunities as of September 30, $29 million remains from our $100 million.

Speaker 1: As of September 30th, 29 million remains from our $100 million 2023 repurchase authorization.

2023 repurchase authorization.

Speaker 1: Turning to growth, total loan growth moderated this quarter, growing 133 million for 2.5% annual.

Turning to growth total loan growth moderated this quarter growing $133 million or two 5% annualized. These results were in line with our expectations as communicated in prior quarters commercial loans experienced modest growth and a mix shift occurred as commercial mortgage loans moved from construction to permanent.

Speaker 1: These results were in line with our expectations as communicated in prior quarter.

Speaker 1: Commercial loans experienced modest growth and a mix shift occurred as commercial mortgage loans moved from construction to permanent status.

Status.

Speaker 1: Consumer on growth was driven by residential mortgages. However, that growth continues to moderate, as expected.

Curtis Myers: Consumer loan growth was driven by residential mortgages, however, that growth continues to moderate as expected. Overall, we are focused on originating loans at the appropriate risk-adjusted spreads and acknowledge the impacts of a higher for longer interest rate environment and current economic conditions may have on this loan growth. Composite growth outpaced loan growth and was 215 million for the quarter. This was driven by seasonal inflows of municipal deposits of 270 million. As a result, our loaned deposit ratio benefited declining from 98.9%. This remains well within our long-term target range of 95 to 105%.

<unk> loan growth was driven by residential mortgages, however that growth continues to moderate as expected.

Speaker 1: Overall, we are focused on originating loans at the appropriate risk adjusted spreads and acknowledge the impacts of a higher for longer interest rate environment and current economic conditions may have on this loan.

Overall, we are focused on originating loans at the appropriate risk adjusted spreads and acknowledged the impacts of a higher for longer interest rate environment and current economic conditions may have on this loan growth.

Speaker 1: Deposit growth outpaced loan growth and was $215 million for the quarter. This was driven by seasonal inflows of municipal deposits of 270 million.

Posit growth outpaced loan growth and was $215 million for the quarter. This was driven by seasonal inflows of municipal deposits of $270 million as a result, our loan to deposit ratio benefited declining from 98 declining 298, 9%. This remains well within our long term target range of 95.

Speaker 1: As a result, our laundry deposit ratio benefited declining from 98, declining to 98.9%. This remains well within our long-term target range of 95 to 105.

5% to 105%.

Speaker 1: We continue to invest in long-term organic growth. During the quarter, we open one new financial center in Philadelphia. In addition, we have financial centers targeted to open in the Philadelphia, Richmond, and the Wilmington MSAs in the fourth quarter. We also recently opened a loan production office in North of Virginia in order to further accelerate growth in that more.

Curtis Myers: We continue to invest in long-term organic growth. During the quarter, we open one new financial center in Philadelphia. In addition, we have financial centers targeted to open in the Philadelphia, Richmond, and the Wilmington MSAs in the fourth quarter. We also recently opened a loan production office in Norfolk, Virginia, in order to further accelerate growth in that market.

We continue to invest in long term organic growth during the quarter. We opened one new financial center in Philadelphia. In addition, we have financial centers targeted to open in the Philadelphia, Richmond, and the Wilmington Msas in the fourth quarter. We also recently opened a loan production office in Norfolk, Virginia and all.

To further accelerate growth in that market.

Speaker 1: Turning to credit quality, our credit quality metrics remain stable. Head charge offs for 5 million or 10 basis points annually.

Turning to credit quality, our credit quality metrics remained stable net charge offs were $5 million or 10 basis points annualized criticized and classified loans declined nonperforming assets declined and delinquencies remained historically low.

Curtis Myers: Turning to credit quality, our credit quality metrics remain stable. Net charge loss for 5 million or 10 basis points annualized. Criticized and classified loans declined, non-performing assets declined, and delinquencies remained historically low. We have again provided detail on our loan portfolio and specifically on our office portfolio in slides 4 and 5. I'd like to note that our overall concentration in commercial real estate is approximately 185% of total capital well below our proxy peer ad. Over all, we remain pleased with our credit metrics. However, we acknowledge the broad market trends and their potential impacts on credit quality.

Speaker 1: criticized and classified loans declined, non-performing assets declined, and the linkancies remained historically low.

Speaker 1: We have again provided detail on our loan portfolio and specifically on our office portfolio in slides four and five. I'd like to note that our overall concentration and commercial real estate is approximately 185% of total capital well below our proxy peer app.

We have again provided detail on our loan portfolio and specifically on our office portfolio on slides four and five.

I'd like to note that our overall concentration in commercial real estate is approximately 185% of total capital well below our proxy peer average overall, we remain pleased with our credit metrics. However, we acknowledge the broad market trends and their potential impacts on credit quality.

Speaker 1: Overall, we remain pleased with our credit metrics. However, we acknowledge the broad market trends and their potential impacts on credit quality.

Now I will turn the call over to Mark to discuss the details of our third quarter financial performance and our 2023 outlook.

Speaker 1: Now I'll turn the call over to Mark to discuss the details of our third quarter financial performance and our 20-23 outlook in a little more.

Mark Mccollom: Now I'll turn the call over to Mark to discuss the details of our third quarter financial performance and our 2023 outlook in a little more details.

Little more detail.

Speaker 2: Thanks, Kurt, and thank you to everyone for joining us on the call this morning. And once I knew it otherwise, the quarterly comparisons I will discuss with the second quarter of 2023. And the loan and deposit growth numbers I will be referencing are annualized percentages on a link quarter basis.

Thanks Kurt.

Mark Mccollom: Thanks, Kurt. And thank you to everyone for joining us on the call this morning.

Thank you to everyone for joining us on the call. This morning, unless I note otherwise the quarterly comparisons I will discuss are with the second quarter of 2023.

Mark Mccollom: Unless I knew it otherwise, the quarterly comparisons I will discuss are with the second quarter of 2023. And the loan and deposit growth numbers I'll be referencing are annualized percentages on a link quarter basis. Starting on slide six, as Kurt noted, operating earnings per diluted share of this quarter were 43 cents on operating net income available to common shareholders is 72.2 million. This compares to 47 cents of operating EPS in the second quarter of 2023.

And the loan and deposit growth numbers I will be referencing our annualized percentages on a linked quarter basis.

Speaker 2: Starting on slide six as Kurt noted operating our ins per diluted share this quarter with 43 cents on operating net income available to common shareholders is 72.2 million

Starting on slide six as Curt noted operating earnings per diluted share this quarter were <unk> 43.

On operating net income available to common shareholders of $72 2 million.

Speaker 2: This compares to 47 cents of operating EPS in the second quarter of 2023.

This compares to <unk> 47 of operating EPS in the second quarter of 2023.

Mark Mccollom: Moving to the balance sheet, as we anticipated, loan growth slowed in the third quarter to 133 million or 2.5% annualized. On the commercial side, growth moderated to 47 million or 1.4% and was a mix of certain categories offsetting others during the quarter consumer loan growth also moderated to $86 million or 4.7% during the quarter. While mortgage lending remain the majority of our consumer loan increase, the third quarter growth rates slowed considerably from prior quarters due to higher loan pricing and overall demand.

Moving to the balance sheet as we anticipated loan growth slowed in the third quarter to $133 million or two 5% annualized.

Speaker 2: Moving to the balance sheet, as we anticipated, long-row slowed in the third quarter to 133 million, or 2.5% annualized.

Speaker 2: On the commercial side, growth moderated to 47 million, or 1.4% and was a mix of certain categories offsetting others during the court.

On the commercial side growth moderated to $47 million or one 4% and it was a mix of certain categories offsetting others during the quarter.

Speaker 2: Consumer loan growth also moderated to $86 million or 4.7% during the quarter. While mortgage lending remained the majority of our consumer loan increase, the third quarter growth rate slowed considerably from prior quarters due to higher loan pricing and overall demand.

Consumer loan growth also moderated to $86 million or four 7% during the quarter.

While mortgage lending remain the majority of our consumer loan increase the third quarter growth rate slowed considerably from prior quarters due to higher loan pricing and overblown overall demand.

Mark Mccollom: We have raised new loan rates across the board with most new loan yields falling between seven and eight and a half percent depending on product and borrowers specific criteria. Total deposits grew 215 million during the quarter. Intersparing deposits grew 506 million or approximately 13% with seasonal growth and our municipal deposit portfolio contributing 270 million of that total. This growth was offset by decline in our non-intersparing DDA accounts. Non-intersparing balances declined 290 million during the period which was down from a $538 million decline in the second quarter.

Speaker 2: We have raised new loan rates across the board with most new loan yields falling between 7.8 and a half percent depending on product and borrowers specific criteria.

We have raised new loan rates across the board with most new loan yields falling between seven and eight 5% depending on product and borrower specific criteria.

Total deposits grew $215 million during the quarter interest bearing deposits grew $506 million or approximately 13% with seasonal growth in our municipal deposit portfolio contributing $270 million of that total.

Speaker 2: Total deposits grew 215 million during the quarter. Intersparing deposits grew 506 million, or approximately 13% with seasonal growth in our municipal deposit portfolio, contributing 270 million of that total.

This growth was offset by a decline in our noninterest bearing DDA accounts non.

Speaker 2: This growth was offset by the cline and our non-intersparing DDA.

Speaker 2: non-intersparing balances decline two hundred ninety million during the period which was down from uh... five hundred thirty eight million dollar decline in the second quarter and uh... six hundred three million dollar decline uh... back in the first

Noninterest bearing balances declined $290 million during the period, which was down from $538 million decline in the second quarter and a $603 million decline back in the first quarter.

Mark Mccollom: And a $603 million decline back in the first quarter. This moderation in a makeshift from non-intersparing to intersparing deposits was slightly better than our expectations and helped increase our NII guidance how it provided the end of my comments. As Kirk mentioned, our loan deposit ratio ended the quarter at 98.9% down from 99.2% at the end of last quarter. We had no net broker deposit purchases during the quarter and that component of our funding remains low and only 4% of total deposits.

Speaker 2: This moderation in a makeshift from non-intersparing to intersparing deposits was slightly better than our expectations and helped increase our NII guidance. I will provide at the end of my comment.

This moderation and the mix shift from noninterest bearing to interest bearing deposits was slightly better than our expectations and helped increase our NII guidance I will provide at the end of my comments.

As Curt mentioned, our loan to deposit ratio ended the quarter at 98, 9% down from 99, 2% at the end of last quarter, we had no net broker deposit purchases during the quarter and that component of our funding remains low and only 4% of total deposits.

Speaker 2: As Kirk mentioned, our loaded deposit ratio in the quarter at 98.9% found from 99.2% at the end of last quarter. We had no net broker deposit purchases during the quarter, and that component of our funding remains low and only 4% of total deposit.

Speaker 2: Moving to slide seven, last quarter we shared with you this 33 year history of our non-intersparing deposit percentage.

Mark Mccollom: Moving to slide 7, last quarter we shared with you this 33 year history of our non-intersparing deposit percentage. We believe we should end the year between 23 and 24% non-intersparing deposits down from 27.7% at June 30 and 26% at September 30. This estimate assumes that we'll have an additional deposit shift of approximately 350 to 400 million into intersparing deposits during the fourth quarter of 2023. Our investment portfolio declined approximately 200 million during the quarter, closing at $3.7 billion.

Moving to slide seven last quarter, we shared with you. This 33 year history of our noninterest bearing deposit percentage.

Speaker 2: We believe we should end the year between 23% and 24% non-interest bearing deposits, down from 27.7% at June 30 and 26% at September 30.

We believe we should end the year between 23, and 24% noninterest bearing deposits down.

Down from 27, 7% at June 30, and 26% at September 30.

This estimate assumes that we'll have an additional deposit shift of approximately $350 million to $400 million.

Speaker 2: This estimate assumes that we'll have an additional deposit shift of approximately 350 to 400 million into intersparing deposits during the fourth quarter of 2023.

Interest bearing deposits during the fourth quarter of 2023.

Our investment portfolio declined approximately $200 million during the quarter closing at $3 7 billion.

Speaker 2: Our investment portfolio declined approximately $200 million during the quarter, closing at $3.7 billion.

Speaker 2: Going forward, we expect our investment portfolio to migrate upward as market conditions dictate ultimately equally about 15% of our balance.

Mark Mccollom: Going forward, we expect our investment portfolio to migrate upward, as market conditions dictate, ultimately, equally about 15% of our balance sheet. Putting together those balance sheet trends on slide 8, net interest income was $214 million, a million dollar increase linked quarter. Our net interest margin for the third quarter with 3.40%, consistent with 3.4% in the second quarter. Our loan yields expanded 20 basis points during the period, increasing to 5.72 versus 5.52 last quarter.

Going forward, we expect our investment portfolio to migrate upward as market conditions dictate ultimately equaling about 15% of our balance sheet.

Putting together those balance sheet trends on slide eight net interest income was $214 million, a $1 million increase linked quarter or.

Speaker 2: Putting together those balance sheet trends on slide eight, net interest income is $214 million, a million dollar increase linked quarters.

Speaker 2: Our net interest margin for the third quarter was 3.40%, consistent with 3.4% in the second quarter.

Our net interest margin for the third quarter was 340% consistent with three 4% in the second quarter.

Our loan yields expanded 20 basis points during the period, increasing to $5 72 versus 552 last quarter.

Speaker 2: Our loan yields expand to 20 basis points during the period, increasing to 5.72 versus 5.52 last quarter. Cycle to date, our loan beta has been 46%.

Mark Mccollom: Cycle to date, our loan beta has been 46%. Our total cost of deposits increased 24 basis points to 1.56% during the quarter. Cycle to date, our total deposit beta has been 29%. Turning to correct quality, on slide 9, our non-performing loans decreased 6.3 million during the quarter, which led to our MPL's loans ratio decreasing to 67 basis points at September 30th, versus 70 basis points at June 30th. Loan delinquency remains historically low at 1.12% at September 30, versus 1.05% last quarter.

Michael to date, our loan beta has been 46%.

Our total cost of deposits increased 24 basis points to 156% during the quarter site.

Speaker 2: Our total cost of deposits increase 24 basis points to 1.56% during the quarter.

Speaker 2: cycle to date our total deposit data has been 29

Cycle to date, our total deposit beta has been 29%.

Turning to credit quality on slide nine our nonperforming loans decreased $6 3 million during the quarter, which led to our NPL to loans ratio decreasing to 67 basis points at September 30 versus 70 basis points at June 30.

Speaker 2: Turning to Crack Quality on Slide 9 are non-performing loans decreased 6.3 million during the quarter, which led to our MPL-alones ratio decreasing to 67 basis points at September 30th versus 70 basis points. And June 30th.

Speaker 2: Loan delinquency remains historically low at 1.12% at September 30 versus 1.05% last quarter.

Loan delinquency remains historically low at one 2% at September 30 versus one 5% last quarter.

Mark Mccollom: Our loans for credit loss, as a percent of loans, increased from 1.37% of loans to June 30th to 1.38% at quarter end. Turning to non-interest income on slide 10, our wealth management revenues were 19.4 million up from 18.7 million for the second quarter. We continue to invest in our wealth business, and it now represents about a third of our fee-based revenues. The market value of assets under management and administration declined 17 million during the quarter to close at 14.2 billion.

Our allowance for credit loss as a percent of loans increased from 137% of loans at June 30% to 138% at quarter end.

Speaker 2: Our allowance for credit loss as a percent of loans increased from 1.37% of loans at June 30th to 1.38% at quarter end.

Speaker 2: Turning to non-interest income on slide 10, our wealth management revenues were $19.4 million, up from $18.7 million for the second quarter. We continue to invest in our wealth business, and it now represents about a third of our fee-based revenue.

Turning to noninterest income on slide 10, our wealth management revenues were $19 4 million up from $18 7 million for the second quarter, we continued to invest in our wealth business and it now represents about a third of our fee based revenues.

The market value of assets under management and administration declined $17 million during the quarter to close at $14 2 billion.

Speaker 2: The market value of assets under management and administration declined $17 million during the quarter to close at $14.2 billion.

Speaker 2: Commercial banking fees declined to $19.7 million during the quarter. Reduced loan originations tempered capital markets revenue in our customer swaps business, coming off of a very strong second quarter.

Mark Mccollom: Commercial banking fees declined to 19.7 million during the quarter. Reduced loan originations, tempered capital markets revenue, and our customer swaps business, coming off of a very strong second quarter. Other categories within commercial fees were solid, as both merchant and card revenues have exceeded our expectations year-to-date. During the quarter, we recorded a charge of $3 million in other fee income related to our final transition from live or to so far. In order to minimize customer disruption and rewriting certain loan and swaps contracts, this resulted in evaluation difference that must be recorded this quarter.

Commercial banking fees declined to $19 $7 million during the quarter reduced loan originations tempered capital markets revenue and our customer swaps business coming off of a very strong second quarter.

Speaker 2: Other categories within commercial fees were solid, as both merchant and card revenues have exceeded our expectations year to date.

Other categories within commercial fees were solid as both merchant and card revenues have exceeded our expectations year to date.

During the quarter, we recorded a charge of $3 million in other fee income related to our final transition from LIBOR to sofa.

Speaker 2: During the quarter, we recorded a charge of $3 million in other fee income related to our final transition from LIBOR to SOFR.

In order to minimize customer disruption and rewriting certain loan and swaps contracts. This resulted in a valuation difference that must be recorded this quarter. This unrealized accounting loss will be recouped over the expected life of the underlying swap contracts.

Speaker 2: In order to minimize customer disruption and rewriting certain loan and swaps contracts, this resulted in a valuation difference that must be recorded this quarter. This unrealized accounting loss will be recouped over the expected life of the underlying swap contract.

Mark Mccollom: This unrealized accounting loss will be recouped over the expected life of the underlying swap contracts. Consumer banking fees were modestly for the quarter with pickups in credit card revenues and overdraft fees. Mortgage banking revenues picked up link quarter as an increase in volume offset a slight decrease in gain on sale spreads in the third quarter. Application volumes, however, were down 6% year-to-year as rate increases and low-halving inventory influence applications, originations, and overall loan sale volumes.

Consumer banking fees were up modestly for the quarter with pickups in card credit card revenues and overdraft fees.

Speaker 2: Consumer banking fees were up modestly for the quarter with pickups in credit card revenues and overdraft.

Speaker 2: Mortgage banking revenues picked up link quarter as an increase in volume offset a slight decrease in gain on sales spreads in the third quarter.

Mortgage banking revenues picked up linked quarter as an increase in volume offset a slight decrease in gain on sales spreads in the third quarter.

Speaker 2: Application volumes, however, were down 6% year-over-year as rate increases and low housing inventories influenced applications, origination, and overall loan sale volume.

Application volumes, however were down 6% year over year as rate increases and low housing inventories influenced applications origination and overall loan sale volumes.

Speaker 2: Moving to slide 11, non-interest expenses were $171 million in the third quarter, a $3 million increase from the second quarter. The following items can

Moving to slide 11, noninterest expenses were $171 million in the third quarter, a $3 million increase from the second quarter.

Mark Mccollom: Moving to July 11, non-intersex expenses were $171 million in the third quarter, a $3 million increase from the second quarter. The following items contributed to this increase, higher-based salary expense, due to one additional calendar day in the quarter, and higher outside services costs associated with certain technology initiatives.

The following items contributed to this increase higher base salary expense.

Speaker 2: higher base salary expense due to one additional calendar day in the quarter, and higher outside services costs associated with certain technology initiatives.

Due to one additional calendar day in the quarter and higher outside services costs associated with certain technology initiatives.

Speaker 2: On slides 12 and 13, we are continuing to provide you with expanded metrics on capital and liquidity.

Mark Mccollom: On slides 12 and 13, we are continuing to provide you with expanded metrics on capital and liquidity. First, on slide 12, as of September 30, we maintained solid cushions over the regulatory minimums for all of our regulatory capital ratios. We've also provided you with an alternative view of our regulatory ratios, including the impact of accumulated other comprehensive income. Our tangible common equity ratio was 6.8% at quarter-end, down from the prior quarter, due to higher long-term interest rates and the related impact on OCI.

On slides 12, and 13, we are continuing to provide you with expanded metrics when capital and liquidity.

Speaker 2: First, on slide 12, as of September 30th, we maintained solid cushions over the regulatory minimums for all of our regulatory capital ratios.

First on slide 12 as of September 30, we maintained solid cushions over the regulatory minimums for all of our regulatory capital ratios we.

Speaker 2: We've also provided you with an alternative view of our regulatory ratios, including the impact of accumulated other comprehensive income.

We've also provided you with an alternative view of our regulatory ratios, including the impact of accumulated other comprehensive income.

Speaker 2: Our tangible common equity ratio was 6.8% at quarter end, down from the prior quarter due to higher long-term interest rates and the related impact on OCI.

Our tangible common equity ratio was six 8% at quarter end down from the prior quarter due to higher long term interest rates and the related impact on OCI.

Speaker 2: Included in tangible common equity is the accumulated other comprehensive loss on the available for sale portion of our investment portfolio and derivatives.

Mark Mccollom: Included in tangible common equity is the accumulated other comprehensive laws on the available for sale portion of our investment portfolio and derivatives. This total $374 million after tax on a total AFS portfolio of $2.9 billion. On slide 13, including the loss on our held to maturity investments, which is $203 million after tax on an HDM portfolio of $1.3 billion, our tangible common equity ratio would be 6.2% at September 30, still representing over $1.6 billion in tangible capital.

Included intangible common equity is the accumulated other comprehensive loss on the available for sale portion of our investment portfolio and derivatives. This totaled $374 million after tax on a total <unk> portfolio of $2 9 billion.

Speaker 2: This totaled $374 million after tax on a total AFS portfolio of $2.9 billion.

On slide 13, including the loss on our held to maturity investments, which is $203 million after tax on an HTM portfolio of $1 3 billion, our tangible common equity ratio would be six 2% at September 30, still representing over $1 6 billion intangible capital.

Speaker 2: On slide 13, including the loss on our held to maturity investments, which is $203 million after tax on an HDM portfolio of $1.3 billion, our tangible common equity ratio would be 6.2% at September 30, still representing over $1.6 billion in tangible capital.

On Slide 14, we provided you with a comprehensive look at our liquidity profile when combining cash committed and available <unk> capacity, the fed discount window and unencumbered securities available to pledge under the Feds Bank term funding program are committed liquidity is $8.

Speaker 2: On slide 14, we provided you with a comprehensive look at our liquidity profile.

Mark Mccollom: On slide 14, we've provided you with a comprehensive look at our liquidity profile. When combining cash, committed and available FHLB capacity, the Fed discount window, and unencumbered securities available to pledge under the Fed's bank term funding program, our committed liquidity is $8.7 billion at September 30. In addition, we maintain over $2.5 billion in Fed funds lines with other institutions.

Speaker 2: When combining cash, committed and available FHLB capacity, the Fed discount window, and unencumbered securities available to pledge under the Fed's bank term funding program, our committed liquidity is $8.7 billion at September 30th.

$7 billion.

At September 30th.

Speaker 2: In addition, we maintain over $2.5 billion in Fed Funds lines with other institutions.

In addition, we maintain over $2 $5 billion and fed fund lines with other institutions.

On slide 15, we are providing our updated guidance for the remainder of 2023, our guidance now assumes a final 25 basis point fed funds increase at their November meeting.

Mark Mccollom: On slide 15, we are providing our updated guidance for the remainder of 2023. Our guidance now assumes a final 25 basis point Fed funds increase at their November meeting. Based on this rate outlook, our 2023 guidance is as follows. We expect our net interest income on a non-FTE basis to be in the range of 845 to 855 million. We expect our provision for credit losses to be in the range of 55 to 65 million.

Speaker 2: On slide 15, we are providing our updated guidance for the remainder of 2023. Our guidance now assumes a final 25 basis point Fed funds increase at their November meeting.

Mark Mccollom: We expect our core non-interest income, excluding securities gains, to be in the range of 220 to 230 million, but we are trending to higher end of this range. And we expect our core non-interest expenses to be $665 million plus or minus for the year. And lastly, we expect our effective tax rate to be in the range of 17 and a half percent plus or minus for the year.

Based on this rate outlook or 2023 guidance is as follows we expect our net interest income on a non FTE basis to be in the range of 855, sorry $845 million to $855 million.

Speaker 2: Based on this rate outlook, our 2023 guidance is as follows.

Speaker 2: We expect our net interest income on a non-FTE basis to be in the range of 855, sorry, 845 to 855 million. We expect our provision for credit losses to be in the range of 55 to 65 million.

We expect our provision for credit losses to be in the range of $55 million to $65 million.

Speaker 2: We expect our core non-interest income, excluding securities gains, to be in the range of $220 to $230 million. But we are trending to the higher end of this.

We expect our core noninterest income excluding securities gains to be in the range of $220 million to $230 million, but we are trending to the higher end of this range.

Speaker 2: And we expect our core non-interest expenses to be $665 million, plus or minus, for the year.

And we expect our core noninterest expenses to be $665 million plus or minus for the year.

Speaker 2: And lastly, we expect our effective tax rate to be in the range of 17.5% plus or minus for the year.

And lastly, we expect our effective tax rate to be in the range of 17, 5% plus or minus for the year.

Speaker 2: With that, allow it to turn the call over to the operator for your questions. Michelle?

With that I'll now turn the call over to the operator for your questions Michelle.

Unknown Executive: With that, we'll now turn the call over to the operator for your questions. Michelle? Thank you. As a reminder to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. And please send by while we compile the Q&A roster.

Speaker 3: Thank you. As a reminder to ask a question, please press store 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press store 1-1 again. And please send by while we compile the Q&A roster.

Thank you.

<unk> to ask a question. Please press star one line when your telephone and wait for your name to be announced.

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Unknown Executive: The first question comes from Daniel Tamayo with Raymond. Your line is now open. Daniel your line is now open. Daniel can you hear us? Your line is open.

The first question comes from Daniel Tamayo with Raymond.

Speaker 3: The first question comes from Daniel Tamayo with Raymond. Your line is now open. Daniel, your line is.

Your line is now and then.

Daniel Your line is now open.

Danielle can you hear us.

Your line is outstanding.

Okay.

Unknown Executive: Please stand by for the next question.

Please standby for the next question.

Okay.

Christopher McGratty: The next question will come from Chris McGratty with KBW. Your line is open. Hello, good morning. Hey, Curtis. Hey, good morning.

The next question will come from Chris Mcgratty with <unk>. Your line is now open.

Speaker 3: The next question will come from Chris McGrottay with KBW, your line is out.

Hello, Good morning.

Speaker 4: Oh, good morning. Um, maybe curts, maybe curts, maybe curts, maybe curts, maybe started with you on

Hey, Greg maybe Kurt Hey, good morning.

Curtis Myers: Curtis, maybe started with you on on Capitol. You talked about the slowing of the balance sheet, which is reflective in H.A, trends. But you you chipped at the buyback. How do we think about, I guess finishing it, you know, additional buybacks, other uses of Capitol given given the, I would say still uncertain economic environment. Yeah, so our Capitol strategy remains the same. We're going to support organic growth as we look in in the fourth quarter here first.

Curt maybe starting with you on.

Speaker 4: capital. You talked about the slowing of the balance sheet, which is reflective in HH trends. But you tipped at the buyback. How do we think about finishing it, you know, additional buybacks, other uses of capital given the, I would say, still uncertain economic environment.

On capital.

You talked about the slowing of the balance sheet, which is reflective in trends.

Trends.

But you took up the buyback how do we think about I guess, finishing at.

Additional buybacks.

Other uses of capital given given the I would say still uncertain economic environment.

Yeah. So our capital strategy remains the same we're going to support organic growth.

Speaker 1: Yeah, so our capital strategy remains the same. We're going to support organic growth as we look in the fourth quarter here first. And then we would look at other alternatives like buybacks. We do have 29 million remaining in that authorization and we're active in the third quarter. We make those determinations based on pricing.

As we look in the fourth quarter here first.

Curtis Myers: And then we would look at all other alternatives like buybacks. We do have 29 million remaining in that authorization and we're active in the in the third quarter. Remember, you know, we make those determinations based on pricing and Capitol use.

And then we would look at all other alternatives like buybacks, we do have $29 million remaining in that authorization and were active in the in the third quarter.

Christopher McGratty: Okay, great.

Make those determinations based on pricing.

Pricing and <unk>.

Capital use.

Okay, Great and then.

Speaker 4: Okay, great. And then maybe two follow ups. Mark, I think you said you have a November hike in the guide. I think the market's kind of 50-50 if we get it. Can you just remind us what each 25 is? I think you provided it on a monthly basis in the past.

Mark Mccollom: And then maybe two follow-ups. Mark, I think you said you have a November hike in the guide. I think the market kind of 50, 50 if we get it. Can you just remind us what each 25 is? I think you provided it on a monthly basis in the past. Yeah, yeah, I would say that if we don't get that, you know, you have just under nine billion of variable rate loans, you know, that would reprice.

Maybe two follow ups Mark I think you said you have a November hike in the guide.

I think the market kind of 50 50, if we get it could you just remind us what each 25 is I think you've provided it.

On a monthly basis in the past.

Yes, yes, I would say that if we don't get that.

Speaker 2: Yeah, I would say that if we don't get that, you know, you have just under nine billion of variable rate loans, you know, the wood reprice. You know, so if you don't get that benefit, you know, that number, you know, ends up being a little bit, you know, north of 20 million annually. So, you know, a little bit under two million a month.

You have.

Just under $9 billion.

Variable rate loans would.

It would reprice.

Mark Mccollom: You know, so if you don't get that benefit, you know, that number, you know, ends up being a little bit, you know, north of 20 million annually. So, you know, a little bit under two million a month. You know, but then obviously, you know, you know, the wild curve question is, you know, what if we don't get that, you know, does that change, you know, that your glide upward in the deposit cost, you know, so there be some offset.

So if you don't get that benefit that number ends up being a little bit north of $20 million annually, so a little bit under $2 million a month.

Christopher McGratty: Okay, great.

Speaker 2: But then obviously, the wild curve question is, what if we don't get that, does that change? That you're glide upward in a deposit cost?

But then obviously.

The wildcard question is what if we don't get that does that change.

Your glide upward in deposit costs.

So there'll be some offset to that.

Speaker 4: Okay, great. And then maybe my last, there was a report overnight about inter-shaven, making its ways through regulation again. Can you remind us, you have a year, about 10 billion, but just what the potential, or remind us what the impact was previously and how much might be at risk if we get more regulation.

Okay, Great and then maybe my last as there was a report overnight about interchange, making making its way through regulation again.

Curtis Myers: And then maybe my last, there was a report overnight about interchange making making its ways through regulation again. Can you remind us, you have a year, about 10 billion, but just what the potential or minus what the impact was previously and how much might be at risk if we get more regulation. Yeah, Chris, and we really didn't look at the numbers yet because we don't know what will happen. I mean, we have the sensitivity on it.

Can you just remind us.

Obviously, you're above $10 billion, but just what the potential or remind us what the impact was previously and how much might be at risk if we get more regulation.

Yes, Chris and we really didn't look at the numbers yet because we don't know what.

Speaker 1: Yeah, Chris, we really didn't look at the numbers yet because we don't know what will happen. I mean, we have the sensitivity on it. We are an issue. So we benefit and have cost offsets with that as well. So we have to model both sides of that, depending on what plays out.

Will happen I mean, we have the sensitivity one that we are.

Curtis Myers: We are an issue. So we benefit and have cost offsets with that as well. So we're at the model of both sides that depending on what plays out, from a legislative standpoint or from a market standpoint, pricing with customers. So we do benefit in some regards and then we would have an offset, you know, it was a net reduction for us previously when Durbin was put in place originally, but not a material reduction for us at that time.

Initiatives, so we benefit and have cost offsets with that as well. So we have a model of both sides of that depending on what plays out.

Christopher McGratty: Okay, thanks.

Speaker 1: from a legislative standpoint or from a market standpoint, pricing with customers. So we do benefits in some regards, and then we would have it offset.

From a legislative standpoint or.

From a market standpoint pricing with customers. So we do benefit in some regards in than we would have an offset.

Speaker 1: it was a net reduction for us previously when Durban was put in place originally, but not a material reduction for us.

It was a net reduction for US previously when Durbin was put in place originally.

But not a material reduction for us.

At that time.

Okay. Thanks.

Feddie Strickland: Our next question comes from Feddie Strickland with Janie Montgomery. Your line is open. Hey, good morning.

Speaker 3: Our next question comes from SETI Strickland with Janie Montgomery, your line is open. Hey, good.

Our next question comes from Betty strict Glenn with Janney Montgomery.

Your line is open.

Hey, good morning.

Hey, Fred.

Feddie Strickland: Just wonder if you can talk about upcoming maturities in the loan portfolio over the next couple quarters and fall apart. What's the rate on those is average on average as they come off as they mature versus renewal? Yeah, I would say on, you know, on ones that are maturing, I mean, again, it's going to be a pretty wide sloth. Feddie, depending on the category, you know, but I mean, it could be, you know, as I mentioned, our new loans are going to be anywhere from seven to eight and a half that we're putting on right now. You know, maturities are coming off anywhere from sort of that five and a half to seven range, depending on one loan category.

Speaker 5: I just want to know if you can talk about upcoming maturities in the loan portfolio over the next couple quarters and fall apart. What's the rate on those is average on average as they come off as they mature versus renewal?

Just wondering if you could talk about upcoming maturities in our loan portfolio over the next couple of quarters in ballpark, what's the rate on those is average on average as they come off.

Feddie Strickland: Got it.

As they mature versus renewal.

Speaker 2: Yeah, I would say on ones that are maturing, I mean, again, it's gonna be a pretty wide sloth that is depending on the category. But I mean, it could be, as I mentioned, our new loans are gonna be anywhere from seven to eight and a half that we're putting on right now. Maturities are coming off anywhere from sort of that five and a half to seven range, depending on one...

Yes, I would say on.

On ones that are maturing I mean again, it's going to be a pretty wide swath study depending on the category.

But I mean, it could be you know as I mentioned, our new loans are going to be anywhere from seven to eight and a half that we're putting on right now and our maturities are coming off anywhere from sort of that five five to seven range, depending on one loan category.

Okay.

Speaker 5: Got it. And then can you remind us this timing of when those public funds flow back out and what the rate was on those? Because I'm assuming when they flow back out at some point in 2024, the margin benefits a little bit as those are generally higher rate, right?

Got it.

Feddie Strickland: And then can you remind us this timing of when those public funds flow back out and what the rate was on those? Because I'm assuming when they flow back out at some point in 2024, the margin benefits a little bit is those are generally higher rate, right? They are lower than our marginal cost of borrowings. You know, obviously, like right now because in our municipal business, we do have a lot of the core operating accounts for those municipalities.

And then can you remind us the timing of when those public funds flow back out what the rate was on those because I'm, assuming when they flow back out at some point in 2020 for the margin benefits a little bit.

Those are generally higher rate right.

Speaker 2: They are lower than our marginal cost of borrowing. Obviously, right now, because in our municipal business, we do have a lot of the core operating accounts for those municipalities.

They are they are lower than our marginal cost of borrowings obviously like right now because I mean in our municipal business. I mean, we do have a lot of the core operating accounts for those municipalities.

Speaker 2: You know, over the last year with the increase in rates, the overall yield amount portfolio has crept up to where it's a little bit under 2% today, about 1.9.

<unk>.

Feddie Strickland: You know, over the last year with the increase in rates, the overall yield amount portfolio, you know, has crept up to where it's a little bit under two percent today, about 1.9. And our normal cyclicality there, what we've seen the last two years, you know, has been a consistent around like that 300-ish, you know, like we saw this past quarter increase in the third quarter. And then in the fourth quarter, you know, you tend to see, you know, a similar amount, you know, in the last two years, three years ago, it used to be a little more, but right now it's more about, you know, two to 300 million of outflows.

Over the last year with the increase in rates. The overall yield in that portfolio has crept up to where it's a little bit under 2% today about one nine.

Speaker 2: And our normal cyclicality there, what we've seen the last two years, you know, has been a consistent around like that 300-ish, you know, like we saw this past quarter, increase in the third quarter, and then in the fourth quarter, you know, you tend to see, you know, a similar amount, you know, in the last two years, three years ago, it used to be a little more, but right now it's more about, you know, two to three hundred million of outlook.

And our normal cyclicality there what we've seen in the last two years has been a consistent around like the 300 ish like we saw this past quarter increase in the third quarter and then in the fourth quarter you tend to see a <unk>.

A similar amount.

Last two years three years ago, it used to be a little more but right now it's more about $2 million to $300 million of outflows.

Gotcha and just one last one for me we've seen steady growth in wealth fees for three quarters now do you feel like that trajectory to continue or do we see a bit of a pullback in future quarters.

Speaker 5: Just one last one for me. We've seen steady growth and wealth fees for I think three quarters now. Do you feel like Vectrojectory can continue or do we see a bit of a pullback in future quarters?

Feddie Strickland: Gotcha. Just one last one for me. We've seen steady growth and wealth fees for, I think, three quarters now. Do you feel like vector trajectory can continue or do we see a bit of a pullback in future quarters? You know, we consistently grow that business, you know, it is market sensitive in some of the products, but it's a recurring, recurring fee business, and we grow the underlying assets under management. So while it will ebb and flow with the market, those changes should be muted, and if you look at the long-term trends in growth and wealth, we expect those, to continue.

We consistently grow that business.

Speaker 1: You know, we consistently grow that business. You know, it is market sensitive in some of the products.

It is.

Market sensitive and in some of the products.

Speaker 1: but it's a recurring fee business and we grow the underlying assets under management. So while it will ebb and flow with the market, those changes should be muted. And if you look at the long-term trends in growth and wealth, we expect those to continue. Thank you.

But it's a recurring current fee business and we grow the underlying assets under management, so while it will ebb and flow with the market.

These changes should be muted and if you look at the long term trends in growth and well we expect those to continue.

Unknown Executive: Hunter said, thanks for taking my question. Please stand by for our next question.

Understood. Thanks for taking my questions.

Yes.

Speaker 3: Please stand by for our next question.

Please.

Please standby for our next question.

Speaker 3: The next question comes from David Bishop with Hubby Group. Your line is open.

The next question comes from David Bishop with D Group Your line and say Ben.

David Bishop: The next question comes from David Bishop with Hubby Group. Your line is open. Hey, good morning. Appreciate the commentary with regard to the the percent of capital allocated to commercial real estate. I think you said 185%. You know, clearly in the Northeast, a lot of your peers are bumping up against that 300% threshold, some are well above that. Do you see that does that give you any opportunity here in the near to intermediate terms to maybe maybe take market share.

Hey, good morning.

Alright, good morning, Dave.

Hey.

Speaker 6: Appreciate the commentary with regard to the the percent of capital allocated to commercial real estate. I think you said 185% You know clearly in the Northeast a lot of your peers are bumping up against that

I appreciate the commentary with regard to the.

As a percent of capital allocated to commercial real estate I think you said, 185%.

Clearly in the northeast a lot of your peers are bumping up against that.

300% threshold.

Speaker 6: 300% threshold, some are well above that. Do you see that? Does that give you any opportunity here in the near to intermediate terms to maybe take market share? Are you seeing some of the competitors migrate out? Good credits that you guys could all stop up here with some excess capacity.

Some are well above that you see that does that give you any opportunity here in the near to intermediate term to maybe take market share or are you seeing some of the competitors migrate out good credits that you guys could all stop up here with some excess capacity.

David Bishop: Are you seeing some of the competitors migrate out good credits that you guys could all stop up here with some excess capacity. Yeah, we were being very strategic about that it does create opportunities for us. We've kept our commercial real estate team intact. And we are getting opportunities that may not have been available to us. We are being disciplined around credit and pricing. And it's an opportunity for us from the high quality customer standpoint, but also to get the pricing credit parameters that that we need in this environment.

Yes, we are.

Speaker 1: Yeah, we were being very strategic about that. It does create opportunities for us. We've kept our commercial estate team intact and we are getting opportunities.

Being very strategic about that it does create opportunities for us we've kept our.

Commercial real estate team intact.

And we are getting opportunities.

Speaker 1: that may not have been available to us. We are being disciplined around credit and pricing, and it's an opportunity for us from high quality customer standpoint, but also to get the pricing credit parameters that.

That may not have been available to us we are being disciplined around credit and pricing.

And it's an opportunity for us from a high quality customer standpoint, but also to get the pricing credit parameters that.

Speaker 1: that we need in this environment. So it is an opportunity for us.

We need in this environment.

<unk>. So it is an opportunity for us and that's how we're looking at it.

David Bishop: So it is an opportunity for us and that's how we're looking at it. Got it.

Got it and then with the.

Speaker 6: got it then within the the disclosure regarding office theory and such a business district exposure and any sort of weakness there any update in terms of what you're seeing in terms of credit trends within that within that portfolio.

David Bishop: Then within the appreciate that the disclosures regarding office theory and such a business district exposure. And any sort of answer for the weakness there or any update in terms of what you're seeing in terms of credit trends within that within that portfolio. Yeah, the portfolio has been pretty stable. We're closely monitoring that portfolio. And you can see from the disclosures that the metrics are pretty consistent. Office continues to have stress. We're working with making sure we understand borrowers. I understand the outlook as we move forward, but really not any material changes quarter to quarter. But we continue to monitor the macro economic environment for office. It is a challenge overall environment. Got it.

I appreciate the disclosures regarding office, CRE and central business District exposure.

Any sort of inter quarter weakness, there or any update in terms of what youre seeing in terms of our credit trends within that within that portfolio.

Yeah. The portfolio has been pretty stable, we're closely monitoring that portfolio and you can see from the disclosures the metrics are pretty consistent.

Speaker 1: Yeah, the portfolio has been pretty stable. You know, we're closely monitoring that portfolio. And you can see from the disclosures that the metrics are pretty consistent. You know, office continues to have stress. We're working with making sure we understand borrowers, understand the outlook as we move forward, but really not any material change.

Office continues to have stress, we're working with making sure we understand borrowers I understand the outlook as as we move forward, but really not any material changes quarter to quarter, but we continue to monitor.

Speaker 1: quarter to quarter, but we continue to monitor.

The macro economic environment for office it is a challenge.

Speaker 1: the macro economic environment for us.

<unk>.

Environment.

Got it.

Speaker 6: That may just one more last question here in terms of the impact from the so-for-the-library transition. I think you said you're going to creep that back into other income over time. Just curious maybe what sort of a mark, maybe a good run rate for that other income line on a go-forward basis.

David Bishop: That may just one more last question here in terms of the impact from the so for the library transition. I think you said you're going to a creep that back into other income over time. Just curious maybe what sort of a mark, maybe a good run rate for that other income line. I want to go forward based this. Yeah, so I'm that's going to creep back in actually in an eye over time. And that will be approximately five years. Got it.

Last question here in terms of the.

The impact from the sopra to LIBOR transition I think you said youre going to.

Unknown Executive: Please stand by for our next question.

Accrete that back into.

Other income over time, just curious maybe what sort of a mark maybe a good run rate for that other income line.

On a go forward basis.

Speaker 7: Yeah, so I'm that's going to creep back in actually in NII over time and that that will be approximately five years.

So that's going to accrete back in actually.

NII overtime, and then there'll be approximately five years.

Got it thanks.

Please standby for next question.

Speaker 3: The next question comes from Manuel Navas with DA Davidson. Your line is open.

Manuel Navas: The next question comes from Manuel Navas with DA Davidson. Your line is open. Hey, good morning.

The next question comes from manual novice with D. A Davidson your line is open.

Speaker 8: of death in five minutes. A good morning.

Hey, good morning.

Manuel Navas: I just want to have some updated thoughts of an in-direction from senior. Also thoughts on the broker deposits. Like, when do you have to kind of seek to replace them? It looked like the CD engine is working quite well. So just kind of some updates on those areas. Yeah, we think that we're going to continue to see our margin drift down. We were pleased that we held, held constant from 2Q to 3Q.

And then thoughts on that.

Speaker 8: I just want to have some updated thoughts of an in-direction from Smear. Also thoughts on the broker deposits. Like when do you have to kind of seek to replace them? It looks like the CD engine is working quite well. So just kind of some updates on those areas.

I just wanted to ask some updated thoughts on the NIM direction from senior also.

Thoughts on the broker deposits like when do you have to kind of seek to replace them. It looks like the CD engine is working quite well. So I'm just kind of some updates on <unk>.

Those areas.

Yes.

Speaker 2: Yeah, we think that we're going to continue to see our margins drift down. We were pleased that we held constant from 2Q to 3Q. I think last quarter we had told folks at the time that our margin was 340 for the quarter and ended the quarter at that same number. In the month of September , our margin was 338.

We think that we're going to continue to see our margin drift down we were pleased that we held held constant from <unk> to <unk>.

Manuel Navas: I think last quarter we had told folks at the time that our margin was 340 for the quarter and ended the quarter at that same number. In the month of September, our margin was 338. So to give you an idea that we will expect to see. And again, with some of those public funds outflows and replacing some of that with some higher cost borrowings in the fourth quarter. I'd see that that number drift down a little bit. We expect at this point to see the margin bottom out sometime in the middle of 2024.

I think last quarter, we had told folks at the time that we.

Our margin was $3 40 for the quarter and ended the quarter at that same number in the month of September our margin was 338 so.

Speaker 7: You know, so to give you an idea that, you know, you know, we will expect to see, you know, and again, with some of those public funds outflows and replacing some of that, you know, with some higher cost borrowings in the fourth quarter, you know, I'd see that that that number drift down a little bit, we expect at this point, you know, to see your the margin bottom out, you know, sometime in the middle of 2024.

So to give you an idea that we will expect to see and again with some of those public funds outflows and replacing some of that with some higher cost borrowings in the fourth quarter I would see that number drift down a little bit we expect at this point to see that.

The margin bottom out sometime in the middle of 2024.

Speaker 2: And then I think back to your question around CDs. Yeah, we do feel our CD engine is pretty strong. And the other reason to comment on when large and will bottom out is that in the middle of 2024 is really where we see our CDs that are rolling off and replacing that that differential and rate becomes much narrower to today's market.

Manuel Navas: And then I think back to your question around CDs. Yeah, we do feel our CD engine is pretty strong. And the other reason to comment on when margin will bottom out is that in the middle of 2024 is really where we see our CDs that are rolling off and replacing that that differential and rate becomes much narrower to today's market rate. As like in the fourth quarter, we still have about 300 million of CDs maturing at about a 2% rate, whereas by the middle of next year, you have 600 million of CDs, but they're maturing at a 420 rate.

And then I think back to your question around Cds, Yeah, we've been.

We do feel our CD engine is pretty strong.

And the other reason to comment on win margin will bottom out.

In the Middle of 2024 is really where we see our Cds that are rolling off and replacing that that differential in rate becomes much narrower to today's market rate.

Speaker 7: you know, as like in the fourth quarter, we still have about 300 million of CDs, maturing at about a 2% rate, whereas by the middle of next year, you know, you have 600 million of CDs, but they're maturing at a 420 rate. You know, so your replacement rate becomes much narrower, you know, which will then help to, you know, slow down that margin.

As like in the fourth quarter, we still have about $300 million of Cds maturing at about a 2% rate, whereas by the middle of next year, you have $600 million of Cds, but they are maturing and are for 'twenty right.

Manuel Navas: So your replacement rate becomes much narrower, which will then help to slow down that margin impression as well. Is the, I appreciate that is the expectation is that we kind of drift up on the low deposit ratio to the higher end of the range over the next couple quarters. I will work in hard at balanced growth quarter to quarter. It's going to ebb and flow within that range. But we don't see a steady increase to the top end of that range, but you know quarter to quarter, it may move up and down as we have different strategies within each quarter.

So your replacement rate becomes much narrower.

Which will then help to slow down that margin compression as well.

Okay. I appreciate that is the expectation is that we kind of drift up on the loan to deposit ratio to the higher end of your range over the next couple of quarters.

Speaker 8: I appreciate that. Is the expectation is that we kind of drift up on the low-dipod ratio to the higher-end degree range over the next couple quarters.

Yeah.

I will work in hard at balanced growth quarter to quarter, it's going to ebb and flow.

Speaker 1: We're working hard at balanced growth. Quarter to quarter, it's going to ebb and flow within that range. But we don't see a steady increase to the top end of that range. But quarter to quarter, it may move up and down as we have different strategies within each quarter.

Within that range.

But we don't see a steady increase to the top end of that range, but.

Quarter to quarter, it may move up and down.

We have different strategies within each quarter.

Okay.

You brought up that in the.

Speaker 8: You brought up that in the in the past you've seen a lot of new account openings is a lot of the deposit flows x the public funds coming from your new accounts or are you getting from your from your current account base, you're getting CDs, can you kind of just talk through that a bit.

Manuel Navas: You've brought up that in the past, you've seen a lot of new account openings, is a lot of the deposit flows, X, the public funds coming from your new accounts or are you getting from your current account base, you're getting CDs. Can you guys just talk through that a bit? Yeah, so we're working both. So we are adding customers and are focused on deposit customers, but customers overall. And we are working hard at cross cell on existing customers to bringing in money that may be at other institutions. And we're their primary relationship, but we don't have all of the relationship where hyper focused on that share wallet for current customers to bring into deposit that way.

In the past you've seen a lot of new account openings is a lot of the deposit flows ex the public funds coming from your new accounts or are you getting from your from your current account base Youre getting Cds can you guys just talk through that a bit.

Yeah. So we're working both so we are adding customers and are focused on deposit customers, but customers overall.

Speaker 1: Yeah, so we're working both. So we are adding customers and are focused on the positive customers, the customers overall.

Speaker 1: And we're working hard at cross-sell on existing customers to bringing in money that may be at other institutions and where their primary relationship, but we don't have all of the relationship where hyper-focused on.

And we are working hard at cross sell on existing customers to bringing in money that may be at other institutions.

They are primary relationship, but we don't have all of the relationship we're hyper focused on.

Speaker 1: that share a wallet for current customers to to bring into office that way.

That share of wallet for our current customers to to bring in deposits that way and loads.

And my last question is on expenses.

Manuel Navas: I, and my last question is on expenses. You're bringing them down a little bit in the fourth quarter. Can you just talk about some of the corporate initiatives you called out in the release and, and what kind of drove that line to be a little bit higher and. Is that going to be a little bit elevated into next year just, just some thoughts on, on that end of the spectrum. Yeah, we're really focused on core operating expenses.

Speaker 8: And my last question is on expenses, you're bringing them down a little bit in the fourth quarter. Can you just talk about some of the corporate initiatives you called out in the release and what kind of drove that line to be a little bit higher?

Youre, bringing them down a little bit in the fourth quarter can you just talk about some of the corporate initiatives you called out in the release.

And what kind of drove that line to be a little bit higher.

Is that going to be a little bit elevated into next year, just just some thoughts on that end of the spectrum.

Speaker 8: Is that going to be a little bit elevated into next year? Just some thoughts on that end of the spectrum.

Speaker 1: Yeah, we're really focused on core operating expenses. We, we, uh,

Yes, we're really focused on core operating expenses.

Manuel Navas: We said that expenses will come down in the fourth quarter. We're confident in that. We are also looking broadly in this environment, how we strategically manage expenses effectively. So we'll be messaging kind of each quarter, not only results, but what we're looking at as we move forward. Getting that technology benefit realization and staffing efficiency with smart growth is really how we're looking at all of those things, but we are very focused on bringing down core operating expenses.

<unk>.

Said that expenses will come down in the fourth quarter. We're confident in that we are also looking broadly in this environment, how we strategically.

Speaker 1: said that expenses will come down in the fourth quarter. We're confident in that. We are also looking broadly in this environment, how we strategically manage expenses effectively. So we'll be messaging kind of each quarter, not only results, but what we're looking at as we move forward.

Unknown Executive: Thank you very much.

Manage expenses effectively.

We will be messaging kind of each quarter.

<unk> not only results, but what we're looking at as we move forward.

Speaker 1: getting that technology benefit realization and staffing efficiency with smart growth. It is really how we're looking at all of those things, but we are very focused on bringing down core operating expenses.

Getting that.

Technology benefit realization.

And staffing efficiency with smart growth.

It is really how we're looking at all of those things, but we are very focused on.

Bringing down core operating expenses.

Thank you very much.

Welcome.

Matthew Breeze: Please stand by for our next question.

Please standby for our next question.

Okay.

The next question comes from Matthew Breese with Stephens. Your line is now open.

Matthew Breeze: The next question comes from Matthew Breeze with Steve and your line is now open. Hey, good morning. Just following that line of question, you had mentioned a lower overall and I eat asset ratio. Could you just give us some idea where you'd like to see that ratio trend next year or over time. Yeah, we're really focused on, we don't have a target that we're public up with at this point, but we're really focused on bringing that down over time just with the outlook that we have around maybe a little slower growth.

Speaker 3: The next question comes from Matthew Breeze who's Steve and your line is now open.

Hey, good morning.

Speaker 5: Just following that line of question, you had mentioned a lower overall NIE to asset ratio. Could you just give us some idea of where you'd like to see that ratio trend next year or over time?

Hey, Matt just just following that line of question you had mentioned a lower overall and I E. The asset ratio could.

Could you just give us some idea of where you'd like to see that ratio trend.

Next year or over time.

Yes, we're really focused on and we don't have a target that we're public.

Speaker 1: Yeah, we're really focused on it. We don't have a target that we're public up, you know, with at this point, but we're really focused on bringing that down over time, just with the outlook that we have around maybe a little slower growth, you know, margins, more challenges from where we were the last couple quarters, really focused on bringing that true expense level.

With at this point, but we're really focused on bringing that down over time, just with the outlook that we have around maybe a little slower growth.

Matthew Breeze: You know, margins, more challenge from where we were the last couple quarters, really focused on bringing that true expense level down and we're going to be able to incrementally move that over time. Okay, so maybe to put a broader point on it, the goal is to bring the absolute level of expenses down from where they are currently versus a lot of expensive issues where are really utilized to temper growth from a career level.

Margins are more challenged from where we were the last couple of quarters.

Really focus on bringing that that true expense level.

Speaker 1: down and we're gonna be able to incrementally move that over time.

Down and we're going to be able to incrementally move that.

Overtime.

Okay.

Speaker 5: So maybe to put a broader point on it, the goal is to bring the absolute level of expenses down from where they are currently versus a lot of expense and issues where are really utilized to temper growth from a current level. Is that how we should be thinking about it?

Maybe to put out a broader point on it.

Our goal is to bring the absolute level of expenses down from where they are currently versus a lot of expense initiatives, where are really utilized the tempered growth from our current level is that how we should be thinking about it.

Matthew Breeze: Is that how we should be thinking about it? Yeah, well, we're focused on both. So we do want to look at just core expense levels, but it is a combination of smart growth as well. So it depends on our growth opportunities and opportunities in the marketplace on how we'll be looking at the balance of those two things in as we move forward. So we have items like our corporate real estate expense, we will bring that expense down other areas, we need to look at revenue opportunity relative to expense opportunity.

Speaker 1: What we're focused on both. So we do want to look at just core expense levels, but it is a combination of smart growth as well. So it depends on our growth opportunities and opportunities in the marketplace on how we'll be looking at the balance of those two things.

We're focused on both.

So we do want to look at just core expense.

Levels.

But it is a combination of smart growth as well so it depends on our growth opportunities and opportunities in the marketplace on.

How we will be looking at the balance of those two things.

In.

Speaker 1: in as we move forward. So we have items like our corporate real estate expense, we will bring that expense down. Other areas we need to look at, you know, revenue opportunity relative to expense opportunities.

As we move forward. So we have items like our corporate real estate expense, we will bring that expense down.

Other areas, we need to look at revenue opportunity relative to.

Expense opportunity so we're doing both things.

Okay.

Matthew Breeze: So we're doing both things. Okay, and maybe going back to the NII guide, which suggests in the fourth quarter there's a pretty decent step down in terms of quarterly NII. Obviously, that's short-term. As we think about 2024, do you expect that trend of NII being down on a quarterly basis to kind of sync up with your NIM Outlook, which stabilizes and call it mid 2024? Is that a decent way to think about this?

And then maybe going back to the NII guide, which suggests in the fourth quarter, because there's a pretty decent step down in terms of quarterly NII.

Speaker 5: And maybe going back to the NII guide, which suggests in the fourth quarter, there's a pretty decent step down in terms of quarterly NII.

Speaker 5: Obviously that's your term. As we think about 2024, do you expect that trend of NII being down on a quarterly basis to kind of sync up with your NIM Outlook, which stabilizes and call it mid 2024? Is that a decent way to think about this?

Obviously that short term as we think about 2024 do you expect that that trend of NII being down on a quarterly basis to kind of sync up with your NIM outlook, which stabilizes and call. It mid 2024.

Is that a decent way to think about this.

Matthew Breeze: Yeah, yeah, I think that's from us. Okay, and you have any idea where you think the NIM or NII might stabilize at that point without any additional rate movement? You know, you know, we haven't given guidance yet for 2023. I mean, I'm comfortable giving that get given that broad guidance or yes, are for 2024. But, you know, when we come out next quarter, you know, for 2024, 12 should be given guidance for the four year at that time.

Yeah, Yeah, I think that's fair Matt.

Okay.

Okay and do you have any idea, where you think the NIM or NII might stabilize at that point without any additional rate movement.

Speaker 5: And you have any idea where you think the NIM or NII might stabilize at that point without any additional rate movement?

Speaker 7: You know, we haven't given guidance yet for 2023. I mean, I'm comfortable giving that broad guidance, or yes, art for 2024, but when we come out next quarter, you know, for 2024, while it's gonna be giving guidance for the four years.

Yes, we havent given guidance yet for 2023 im comfortable given that.

Given our broad guidance for 2024, but when we come out next quarter.

For 2024 will obviously be giving guidance for the full year at that time.

Speaker 5: With some of the better than expected deposit results this quarter, could you provide some updated dots around expectations around terminal deposit data?

Okay.

Matthew Breeze: Okay, with some of the better than expected deposit results this quarter, could you provide some updated dots around expectations around terminal deposit data as we get into 2024 and perhaps at the end of this cycle? Yeah, yeah, you know, we're not really moving off our prior numbers for terminal data, because again, for our terminal data, I mean, we view it as, you know, kind of two quarters after the Fed stops raising rates.

But some of the better than expected deposit results this quarter.

Could you provide some updated thoughts around expectations around terminal deposit beta.

Speaker 5: as we get into 2024 and perhaps at the end of this cycle.

As we get into 2024 and perhaps at the end of this cycle.

Yes.

Speaker 7: Yeah, yeah, you know, we're not really moving off our prior numbers for terminal beta because again, for our terminal beta, I mean, we view it as, you know, kind of two quarters after the fed stops raising rates.

We're not really moving off.

Prior numbers for terminal beta because again for our terminal beta I mean, we view it as kind of two quarters. After the fed stops reason rates.

Speaker 7: So we still feel like we're gonna be around that high 30s to 40 level that we had communicated in prior quarters. And hopefully we do end up a little bit better than that. But I think our results this quarter, we still wanna take a guarded look on that and understand what customer behaviors are gonna be like six months from now. You know, we're just not ready to move off that number yet.

Matthew Breeze: You know, so we still feel like we're going to be, you know, around that, you know, high 30s, you know, to 40 level that we had communicated in prior quarters. And, you know, hopefully, hopefully we do end up a little bit better than that. But, you know, I think our results this quarter, you know, we still want to take a guarded, you know, look on that and understand what customer behaviors, you know, we're going to be like six months from now.

So we still feel like we're going to be.

Around that high <unk> to 40 level that we had communicated in prior quarters.

End of.

Hopefully hopefully, we do end up a little bit better than that but.

Our results this quarter.

We still want to take a guarded look on that and understand what customer behaviors, we're gonna be like six months from now.

Matthew Breeze: You know, we're just not ready to move off that number yet. Okay, last one for me is it, you know, broadly speaking, it looked like credit trends were benign, you know, very solid. We've been getting more questions around syndicated loans and portfolios. I'm just curious, what kind of exposure do you have if any to syndicated loans and what is the size of that portfolio and how has performance been? Yeah, Matt, our shared natural credit portfolio is about 325 million right now.

We're just not ready to move off that number yet.

Okay.

Last one for me.

Speaker 5: That's one for me. It's broadly speaking, it looked like predatrans were benign, very solid.

Broadly speaking it looked like credit trends were benign.

Very solid.

Speaker 5: We've been getting more questions around syndicated loans and portfolios. I'm just curious, what kind of exposure do you have if any to syndicated loans and what is the size of that portfolio and how is performance?

We've been getting more questions around syndicated loans and portfolios.

I'm just curious.

What kind of exposure do you have if any to syndicated loans and what is the size of that portfolio and how its performance been.

Yeah, Matt our shared national credit portfolio balance is about $325 million right now so in less than 2%.

Speaker 1: Yeah Matt, our shared natural credit proposal is balanced about 325 million right now. So, you know, less than 2%. You know, it's customers we know well. And.

Matthew Breeze: So, you know, less than 2%. You know, it's customers that we know well and performance has been steady. We don't have any metrics in that portfolio that are different than other portfolios. You know, they are larger accounts. So, so when you have an item there, it's a little more visible, which I think you see, but it's a pretty limited portfolio and activity for us. Any sub industries within that have more than more of the pie than others. No, not really. It's pretty evenly split theory and CNI and we have five, six, six different categories. So, it's pretty diversified within the CNI categories.

It's customers that we know well.

And our performance has been steady we don't have any metrics in that portfolio that are different.

Speaker 1: Performance has been steady. We don't have any metrics in that portfolio that are

Then other portfolios they are larger accounts.

Speaker 1: other portfolios. As you know, they are larger accounts. So when you have an item there, it's a little more visible, which I think you see, but it

So when you have an item there, it's a little more visible, which I think you said.

But it's a pretty limited portfolio and activity for us.

Any sub industries within it that have more of the more of the pie than others.

Speaker 5: any sub industries within intent have more of the more of the pie than others.

Speaker 5: No, not really. It's pretty evenly split CRE and CNI. And we have five, six different categories. So it's pretty diversified within the CNI categories as well. I will leave it there. I appreciate you taking all my questions.

No not really it's pretty evenly split CRE and C&I.

And.

We have.

566 different categories, so it's pretty diversified within the C&I categories as well.

Matthew Breeze: Well, I will, I will leave it there. I appreciate you taking all my questions. Thank you. Okay. Thanks.

Okay.

I will I will leave it there I appreciate taking all my questions. Thank you.

Frank Schiraldi: Please stand by for the next question.

Okay. Thanks Pam.

Please standby for the next question.

Frank Schiraldi: The next question comes from Frank Schiraldi with Piper Sandler. Your line is open. Morning.

The next question comes from Frank Schiraldi with Piper Sandler Your line is open.

Speaker 3: The next question comes from Frank Schiraldi with Piper Sandler. Your line is open.

Good morning.

Speaker 9: Morning. Mm. Great. Great. Just in terms of task, the expense question, another way, any thoughts of, you know, more normalized? eaten human body ????????.

Alright.

Frank Schiraldi: Just in terms of to ask the expense question another way, any thoughts of, you know, more normalized efficiency ratio or broad efficiency ratio targets, you know, as we kind of keep careful eye on the expense side and and and see where revenues flush out for next year. Yeah, Frank, I appreciate the question and we're really focused on efficiency ratio and absolute expenses around expenses to assets. We have not been public with a target.

Just in terms of.

The expense question another way.

Any thoughts.

More normalized.

Speaker 9: efficiency ratio or broad efficiency ratio targets, as we kind of keep careful eye on the expense side and see where revenues flush out for next year.

Patiency ratio or broad efficiency ratio targets.

As we kind of.

Keep a careful eye on the expense side, and and see where revenues flush out for next year.

Yes, Frank I appreciate the question and we're really focused on efficiency ratio and absolute expenses around expenses to assets.

Speaker 1: Yeah, Frank, I appreciate the question and we're really focused on efficiency ratio and absolute expenses around expenses to assets.

Speaker 1: We have not been public with the target. We are looking to drive them incrementally. And as we move forward in this environment, we may be in a position to put a target out there in 2024. We're just not positioned to do it right now, but we're very focused on it and we do want to make...

We have not been public with the target.

Frank Schiraldi: We are looking to drive them incrementally. And as we move forward in this environment, we may be in a position to put a target out there in 2024. We're just not positioned to do it right now, but we're very focused on it and we do want to make incremental change and then potentially even more significant changes we move forward.

Looking to drive them incrementally.

And as we move forward in this environment, we may be in a position to put a target out there.

In 2024.

Just not positioned to do it right now, but we're very focused on it and we do want to make incremental change and then potentially even more significant change as we move forward.

Speaker 1: incremental change and then potentially even more significant change as we move forward.

Okay.

And then on.

Frank Schiraldi: Okay. And then on, I'm not just bearing balances. Mark, you talked about where you anticipate those balances, ending the year as a percentage of total deposits. If we're in sort of, you know, higher for longer rate scenario, you know, obviously bottoms up somewhere. Do you see it kind of continuing to be a slow bleed from from those levels. Or do you think it's close to bottoming out here, you know, based on the where rates are currently?

On noninterest bearing balances Mark you talked about where you anticipate.

Those balances.

Ending the year as a percentage of total deposits if we're in sort of a higher for longer rates scenario.

Obviously bonds out somewhere do you see it.

And to be a slow bleed from from those levels.

Or do you think its close to bottoming out here.

Based on the.

Where rates are currently.

Speaker 7: We're still, we're still forecasting there to be some rundown in 2024, but, but Frank, we anticipate that that, you know, pace of shift will continue to decline, you know, so, you know, you know, maybe you're down a couple percentage points, you know, in 2024, but certainly nothing like what we saw before.

We're still we're still forecasting other it would be some rundown in 2024.

Frank Schiraldi: We're still forecasting there to be some rundown in 2024, but Frank, we anticipate that that pace of shift will continue to decline. You know, so, you know, you know, maybe you're down a couple percentage points, you know, in 2024, but certainly nothing like what we saw in 2023.

But but frankly, we anticipate that that pace of shift will continue to decline.

Frank Schiraldi: Thank you.

So.

Maybe you were down a couple percentage points in.

In 2024, but certainly nothing like what we saw in 2023.

Got you Okay I appreciate it thank you.

Frank Schiraldi: Okay. I appreciate it. Thank you.

Speaker 3: That's it. Okay. I appreciate it. Thank you. Thank you. All right. Please stand by for next.

Unknown Executive: Please stand by for our next question.

And then is that right.

Please standby for our next question.

Daniel Tamayo: The next question comes from Daniel to my O with Raymond James. Your line is open. Daniel, your line is now open.

The next question comes from Daniel Tamayo with Raymond James Your line is open.

Speaker 10: The next question comes from Daniel Tamayo with Raymond James. Your line is open. Daniel.

Daniel Your line is now open.

Daniel Your line is now open.

Please standby for the next question.

Unknown Executive: Please stand by for the next question. Okay.

Okay. The next question comes from manual novice with D. A Davidson your line is open.

Speaker 3: The next question comes from Manuel Navas with DA Davidson. Your line is open.

Daniel Navas: The next question comes from Daniel Navas with DA Davidson. Your line is open. Yeah, I just want to hop back on to kind of ask about those new branches. Can you just talk about the regions you're kind of adding branches in and is that like a similar cadence, you might see in other quarters, and is that kind of where you're seeing the most regional opportunity. Yeah, so right now we have 205 financial centers.

Speaker 8: Yeah, I just want to hop back on to kind of ask about those new branches. Can you just talk about the regions you're kind of adding branches in? Is that like a similar cadence you might see in other quarters? And is that kind of where you're seeing the most regional opportunity?

Hey, I just wanted to hop back on to kind of ask about those new branches.

Can you just talk about the regions youre kind of adding branches in and is that like a similar cadence you might see in other quarters.

And is that kind of where you're seeing the most regional opportunity.

Speaker 1: Yes, so right now we have 205 financial centers. We're consistently managing that network consolidating or reducing offices that aren't performing or can be consolidated while then investing in new locations that are strategic for us.

Yes, so right now we have 205 financial centers, we're consistently managing that network consolidating or reducing offices that are performing where it can be.

Daniel Navas: We're consistently managing that network consolidating or reducing offices that aren't performing or can be can be consolidated while then investing in new locations that are strategic for us. We've been predominantly focused on the Philadelphia Baltimore Richmond quarter. DC, we opened a little production office in the second quarter. So that kind of Metro quarter is where we've been focused with most of our new financial centers. Three and one quarter is just it's a timing thing on the development.

<unk> consolidated while than investing in new locations that are strategic for us we've been predominantly focused on the Philadelphia Baltimore.

Speaker 1: We've been predominantly focused on the Philadelphia Baltimore Richmond corridor. At DC, we opened a little production office in the second quarter. So that kind of Metro corridor is where we've been focused with most.

Richmond corridor.

D C. We opened a loan production office in the second quarter.

That kind of Metro corridor is where we've been focused with most of them.

Speaker 1: new financial centers. Three and one quarter is just it's a timing thing on the development so that's not a specific pickup in that activity it's more just the timing of those branches all coming online at the same time but you'll see a steady

Our new financial centers three in one quarter is just its a timing thing on the development. So that's not a specific pickup in that activity. It's more just the timing of those branches all coming online at the same time, but.

Daniel Navas: So that's not a specific pick up in that activity. It's more just the timing of those branches all coming online at the same time, but you'll see a steady management of that network. So some closures, consolidations and some new investments.

We'll see.

Steady.

Speaker 1: management of that network, so some closures, consolidations, and some new investments.

Management of that network, so some closures consolidations and some new investments.

Yeah.

Daniel Navas: Okay, I appreciate that. Thank you. Welcome.

Okay I appreciate that thank you.

Youre welcome.

Speaker 3: I show no further questions at this time. I would now like to turn the call back to Kurt Myers for closing remarks.

I show no further questions at this time.

Unknown Executive: I show no further questions at this time.

Curtis Myers: I would now like to turn the call back to Kurt Myers for closing remarks. Well, thank you again for joining us today. We hope you'll be able to be with us when we discuss the fourth quarter results in January. Thank you all.

I'd now like to turn the call back to Curt Myers for closing remarks.

Well. Thank you again for joining us today, we hope youll be able to be with us when we discuss the fourth quarter results in January Thank you all.

Speaker 5: Well, thank you again for joining us today. We hope you'll be able to be with us when we discuss the fourth quarter results in January . Thank you all.

Unknown Executive: This concludes today's conference call. Thank you for participating. You may now disconnect. Thank you. . Matthew Breese, Frank Schiraldi, Paul Matthew Breese, Frank Schiraldi, Paul Matthew Breese, Frank Schiraldi, Paul Matthew Breese, Frank Schiraldi, Paul Matthew Breese, Frank Schiraldi, Paul Matthew Breese, Frank Schiraldi, Paul Matthew Breese, Frank Schiraldi, Paul Matthew Breese, Frank Schiraldi, Paul Matthew Breese, Frank Schiraldi, Paul Matthew Breese, Frank Schiraldi, David Bishop, Frank Schiraldi, Matthew Jozwiak Matthew Breese, Frank Schiraldi, David Bishop, Frank Schiraldi, Matthew Jozwiak, Matthew Breese, Frank Schiraldi, David Bishop, Frank Schiraldi, David Bishop, Frank Schiraldi, David Bishop, Frank Schiraldi, Matthew Breese, Frank Schiraldi, David Bishop, Frank Schiraldi, David Bishop, Frank Schiraldi,

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

Speaker 3: This concludes today's conference call. Thank you for participating. You may now disconnect.

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