Q1 2024 Peoples Bancorp Inc Earnings Call
Danielle: Good morning, and welcome to the Peoples Bancorp Incorporated conference call. My name is Danielle, and I will be your conference facilitator.
Good morning, and welcome to the peoples Bancorp incorporated conference call. My name is Danielle and I will be a conference facilitator.
Danielle: Today's call will cover a discussion of the results of operations for the quarter ended March 31, 2024. Please be advised that all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star 1 on your telephone keypad, and questions will be taken in the order they are received. If you would like to withdraw your question, please press star 2. This call is being recorded. If you objected to the recording, please disconnect at this time.
Today's call will cover a discussion of the results of operations for the quarter ended March 31st 2024.
Speaker Change: Please be advised that all lines have been placed on mute to prevent any background noise.
Speaker Change: After the Speakers' remarks, there will be a question and answer period. If you would like to ask a question. During this time simply press star one on your telephone keypad questions will be taken in the order they ever see it if.
Speaker Change: If you would like to withdraw your question. Please press star two.
Speaker Change: This call is being recorded if you object of it this way the objective the recording please disconnect at this time.
Danielle: Please be advised that the commentary in this call will contain projections or other forward-looking statements regarding Peoples' future financial performance or future events. These statements are based on management's current expectations. The statements in this call, which are not historical fact, are forward-looking statements and involve a number of risks and uncertainties detailed in People's Securities and Exchange Commission filings. Management believes the forward-looking statements made during this call are based on reasonable assumptions within the bounds of their knowledge of People's business and operations.
Speaker Change: Please be advised that the commentary in this call will contain projections or other forward looking statements regarding peoples' future financial performance or future events.
Speaker Change: These statements are based on management's current expectations.
Speaker Change: Statements in this call, which are not historical fact are forward looking statements and involve a number of risks and uncertainties detailed in people Securities and Exchange Commission filings.
Speaker Change: Management believes are forward looking forward looking statements made during this call are based on reasonable assumptions within the bounds of their knowledge of peoples business and operations.
Danielle: However, it is possible actual results may differ materially from these forward-looking statements. Peoples disclaims any responsibility to update these forward-looking statements after this call, except as required by applicable legal requirements. People's first quarter 2024 earnings release was issued this morning and is available at peoplesbancorp.com under Investor Relations. A reconciliation of the non-generally accepted accounting principles or GAAP financial measures discussed during this call to the most directly comparable GAAP financial measures is included at the end of the earnings release.
Speaker Change: However, it is possible actual results may differ materially from these forward looking statements.
Speaker Change: Peoples disclaims any responsibility to update these forward looking statements. After this call.
Speaker Change: Except as required by applicable legal requirements.
Speaker Change: Peoples' first quarter 2024 earnings release was issued this morning and is available at peoples Bancorp Dot com under Investor Relations.
Speaker Change: A reconciliation of the non generally accepted accounting principles or GAAP financial measures discussed during this call.
Speaker Change: And the most directly comparable GAAP financial measures is included at the end of the earnings release.
Danielle: This call will include about 15 to 20 minutes of prepared commentary, followed by a question and answer session, which I will facilitate. An archived webcast of this call will be available on PeoplesBancorp.com in the Investor Relations section for one year. Participants in today's call will be Tyler Wilcox, President and Chief Executive Officer, and Katie Bailey, Chief Financial Officer and Treasurer, and each will be available for questions following opening statements. Mr. Wilcox, you may begin your conference.
Speaker Change: This call will include about 15 to 20 minutes of prepared commentary.
Speaker Change: By a question and answer session, which I will facilitate an archived web cast of this call will be available on peoples Bancorp Dot com in the Investor Relations section for one year.
Speaker Change: Participants in today's call will be titled Wilcox, President and Chief Executive Officer, and Katie Bailey, Chief Financial Officer, and Treasurer, and each will be available for questions. Following opening opening statements. Mr. Wilcox you may begin your conference.
Tyler J. Wilcox: Thank you, Danielle. Good morning, everyone, and thanks for joining us on our call today. I want to start off by thanking Chuck Sulerzyski for his service over his 13-year tenure with the bank as he retired effective March 31st. Chuck was instrumental in moving us into the future, cleaning up our credit quality after the Great Recession, driving shareholder value through improved performance, both organically and through acquisition, advancing our technology to match that of our largest competitors, and probably the most important part of his legacy, leaving behind a culture that promotes Thanks, Chuck, for everything you've done.
Wilcox: Thank you Danielle.
Wilcox: Morning, everyone and thanks for joining our call today I want to start off by thanking Chuck So risky for his service over his 13 year tenure with the bank as he retired effective March 31.
Wilcox: Truck was instrumental in moving us into the future cleaning up our credit quality after the great recession driving shareholder value through improved performance.
Wilcox: Organically and through acquisition advancing our technology to match that of our largest competitors and probably the most important part of his legacy leaving behind a culture that promotes the wellbeing of associates, which creates a better customer experience.
Speaker Change: Focus is on giving back to our communities in a meaningful way thanks, Chuck for everything you've done.
Speaker Change: Moving onto our first quarter performance earlier. This morning, we reported earnings of $29 $6 million, while our diluted earnings per share were <unk> 84, compared to 96 cents for the linked quarter.
Tyler J. Wilcox: Moving on to our first quarter performance, earlier this morning, we reported earnings of $29.6 million, while our diluted earnings per share were $0.84 compared to $0.96 for the linked quarters. As we noted in our last earnings call, we have annual expenses that we recognize during the first quarter of each year, which include employer contributions to health savings accounts and stock-based compensation expense for certain retirement-eligible employees. These additional costs totaled $2.6 million and negatively impacted diluted EPS by $0.06 for the first quarter.
Speaker Change: As we noted in our last call.
Speaker Change: Order.
Speaker Change: We have annual expenses that we recognized during the first quarter of each year, which included employer contributions to health savings accounts and stock based compensation expense for certain retirement eligible employees.
Speaker Change: These additional costs totaled $2 $6 million and negatively impacted diluted EPS by six cents for the first quarter.
Tyler J. Wilcox: We had many positives for the quarter and are pleased with our results. Our net interest margin compressed only five basis points compared to the linked quarter, excluding the impact of accretion income from acquisitions. We had stable fee-based income as annual performance-based insurance commissions offset declines in lease income. However, our non-interest expense was down compared to the linked quarter, excluding the annual first quarter increases for stock-based compensation and employer contributions to health savings accounts.
Speaker Change: We had many positives for the quarter and are pleased with our results.
Speaker Change: Our net interest margin compressed only five basis points compared to the linked quarter, excluding the impact of accretion income from acquisitions.
Speaker Change: We had stable fee based income is annual performance based insurance commissions offset declines in lease income.
Speaker Change: Noninterest expense was down compared to the linked quarter, excluding the annual first quarter increases for stock based compensation and employer contributions to health savings accounts.
Tyler J. Wilcox: Our loan to deposit ratio declined to 84.7% compared to 86.1% at year end. Deposit balances increased 2% compared to year-end and were largely driven by retail CD growth. Our tangible book value per share improved 23 cents and was $18.39 at quarter end. We announced an increase to our quarterly dividend for the ninth consecutive year.
Speaker Change: Our loan to deposit ratio declined to 84, 7% compared to 86, 1% at year end.
Speaker Change: Deposit balances increased 2% compared to year end and were largely driven by retail CD growth.
Speaker Change: Our tangible book value per share improved 23 cents and was $18 39 at quarter end.
Speaker Change: We announced an increase to our quarterly dividend for the ninth consecutive year.
Tyler J. Wilcox: And we completed another $3 million share repurchase during the quarter. Moving on to our credit quality, our allowance for credit losses grew to 1.05% of total loans at quarter end. The increase in our allowance was driven by moderate deterioration in the macroeconomic conditions in our CECL model, higher reserves on our individually analyzed loan portfolio, and loans. Our net charge-off rate for the quarter declined slightly compared to the worst quarter and was 22 basis points annualized for the first quarter.
Speaker Change: And we completed another $3 million share repurchase during the quarter.
Speaker Change: Moving onto our credit quality.
Speaker Change: Our allowance for credit losses grew to 1.05% of total loans at quarter end the.
Speaker Change: The increase in our allowance was driven by moderate deterioration in the macroeconomic conditions in our seasonal model.
Speaker Change: Our reserves on our individually analyzed loan portfolio and loan growth.
Speaker Change: Our net charge off rate for the quarter declined slightly compared to the linked quarter and was 22 basis points annualized for the first quarter.
Tyler J. Wilcox: While consumer indirect and leasing net charge-off trends are elevated compared to prior year quarters, they are more consistent with historical pre-pandemic averages, and we remain satisfied with our risk-adjusted returns on these businesses. Non-performing assets grew to 50 basis points of total assets at quarter end compared to 43 basis points at year end. Most of the increase was related to a higher non-accrual balance.
Speaker Change: While consumer indirect and leasing net charge off trends are elevated compared to prior year quarters, they're more consistent with historical pre pandemic averages and we remain satisfied with our risk adjusted returns on these businesses.
Speaker Change: Nonperforming assets grew to 50 basis points of total assets at quarter end compared to 43 basis points at year end.
Speaker Change: Most of the increase was related to higher non accrual balances.
Tyler J. Wilcox: The portion of our loan portfolio considered current at quarter end improved to 98.7% from 98.6% at year end. Criticized and classified loans both increased during the quarter and were driven by the downgrade of two acquired commercial and industrial loan relationships. We view our credit quality as a strength despite some specific downgrades this quarter. The collateral and guarantor support on the loans in question is strong, and these relationships are not indicative of an overall trend in our commercial credit quality.
Speaker Change: The portion of our loan portfolio considered current at quarter end improved to 98, 7% from 98, 6% at year end.
Speaker Change: Criticized and classified loans, both increased during the quarter and were driven by the downgrade of two acquired commercial and industrial loan relationships.
Speaker Change: If your credit quality is a straight despite some specific downgrades this quarter.
Speaker Change: The collateral and guarantor support on the wounds in question is strong and these relationships are not indicative of an overall trend in our commercial credit quality.
Tyler J. Wilcox: Our portfolio strength is evidenced by the low delinquency rates this quarter. As far as loan concentrations are concerned, we continue to have no material exposure in commercial office space, hospitality, or assisted living. Our multifamily loans remain relatively unchanged from year-end, as these loans stood at $522 million at quarter-end, compared to $520 million at year-end. As we have noted before, these properties are primarily located within growth markets with strong economic metrics and notable sponsor support.
Our portfolio strength is evidenced by the low delinquency rates this quarter.
Speaker Change: As far as loan concentrations, we continue to have no material exposure in commercial office space hospitality or assisted living.
Speaker Change: Our multifamily loans remained relatively unchanged from year end as these loans stood at $522 million at quarter end compared to $520 million at year end.
Speaker Change: As we have noted before these properties are primarily located within growth markets with strong economic metrics and notable sponsor support.
Tyler J. Wilcox: Compared to year-end, our total loan portfolio grew $44 million, or 3% annualized. Most of the growth was driven by increases in our commercial real estate, premium finance, and commercial and industrial loan balances, which were up $112 million in total. This growth was partially offset by declines in construction loans, which were down $49 million, and our consumer direct and consumer indirect loans also combined for a $31 million decrease compared to the linked order end.
Speaker Change: Compared to year end, our total loan portfolio grew $44 million or 3% annualized.
Speaker Change: Of the growth was driven by increases in our commercial real estate premium finance and commercial and industrial loan balances, which were up $112 million in total.
Speaker Change: This growth was partially offset by declines in construction loans, which were down $49 million and our consumer direct and consumer indirect loans also combined or $31 million decrease compared to the linked quarter end.
Tyler J. Wilcox: Part of the decline in loan balances was driven by the renewal cycles of acquired limestone loans that were paid off. At Quarter End, our commercial real estate loans comprise 36% of total loans, nearly 40% of which were owner-occupied, while the remainder were investment real estate. At the same time, our total consumer loans, which include residential, real estate, and home equity lines of credit, were 28% of total, commercial and industrial loans were 20%, specialty finance totaled 11%, and construction loans were 5%. At the quarter end, 48% of our total loans were fixed rates, with the remaining 52% at a variable rate. I will now turn the call over to Katie for a discussion of our financial proposal.
Part of the decline in loan balances was driven by the renewal cycles of acquired limestone loans that were paid off.
Speaker Change: At quarter end, our commercial real estate loans comprised 36% of total loans, nearly 40% of which were owner occupied while the remainder were investment real estate.
Speaker Change: At the same time, our total consumer loans, which include residential real estate and home equity lines of credit were 28% of total loans.
Speaker Change: <unk> and industrial loans were 20 were 20%.
Speaker Change: Actually finance totaled 11% and construction loans were 5%.
Speaker Change: At quarter end up 48% of our total loans were fixed rate with the remaining 52% at a variable rate.
I will now turn the call over to Katy for a discussion of our financial performance.
Kathryn M. Bailey: Thanks, Tyler. For the first quarter, our net interest income declined 2%, mostly due to lower accretion income, net of amortization expense from our acquisition. However, improvements in loan and investment income offset higher deposit expense for the quarter. Our net interest margin was 4.27% for the first quarter compared to 4.44% for the linked quarter. The change in net interest margin was driven mostly by the decline in accretion income, which contributed 32 basis points to our margin this quarter, compared to 45 basis points last quarter.
Katy: Thanks, Tyler for the first quarter, our net interest income declined 2%.
Katy: Lastly, due to lower accretion income net of amortization expense from our acquisition.
Katy: Improvements in loan and investment income offset higher deposit expense for the quarter.
Our net interest margin was 4.27% for the first quarter compared to 4.44% for the linked quarter.
Katy: The change in net interest margin was driven mostly by the decline in accretion income, which contributed 32 basis points to our margin this quarter compared to 45 basis points last quarter.
Kathryn M. Bailey: For the fourth quarter, we had refinements in our fair value marks for limestone that contributed an additional seven basis points to margin. We continue to expect our accretion to normalize in the coming years as some of the initial noise around refinements to fair values and portfolio activity subsides. The small remaining decline in net interest margin compared to the linked quarter was mostly due to excess cash on hand during the quarter, which negatively impacted margin by six basis points. For liquidity purposes, we are holding cash on our balance sheet that we have previously been holding off the balance sheet. We will continue to run CD specials in the first quarter of 2024.
Katy: For the fourth quarter, we had refinements in our fair value marks for limestone that contributed an additional seven basis points to margin.
Katy: We continue to expect our accretion to normalize in the coming.
Katy: Some of the initial noise around refinements to fair values and portfolio activity subside.
Katy: The small remaining decline and net interest margin compared to the linked quarter with mostly due to excess cash on hand during the quarter, which negatively impacted margin by six basis points.
Katy: For liquidity purposes, we are holding cash on our balance sheet that we had previously we're holding off balance sheet.
Katy: We continue to run CD specials in the first quarter of 'twenty 'twenty four.
Kathryn M. Bailey: We will evaluate our position and look for opportunities to lower our rates while keeping the duration of term on our retail CDs on the shorter end to retain flexibility. Moving on to our fee-based income, we were down 1% compared to the linked quarter, which is driven by declines in our lease and electronic banking income and partially offset by higher insurance income. We typically recognize higher insurance income in the first quarter of each year due to annual performance-based insurance commissions, totaling $2.2 million compared to $1.5 million for the prior year quarter.
Katy: We will evaluate our position and look for opportunities to lower our rates, while keeping the duration of term on our retail C. DS on the shorter end to retain flexibility.
Katy: Moving on to our fee based income we were down 1% compared to the linked quarter, which was driven by declines in our lease and electronic banking income and partially offset by higher insurance income.
Katy: We typically recognize higher insurance income in the first quarter of each year due to annual performance based insurance commissions.
Katy: Which totaled $2 2 million compared to $1 5 million for the prior year quarter.
Katy: As it relates to our noninterest expenses.
Kathryn M. Bailey: As relates to our non-interest expenses, they were up slightly compared to the linked quarter. However, when excluding the additional cost of $2.6 million related to employer contributions to health savings accounts and stock-based compensation expense for certain retirement-eligible employees, our non-interest expenses were down compared to the linked quarter.
Katy: They were up slightly compared to the linked quarter.
Katy: However, when excluding the additional costs of $2 $6 million related to employer contributions to health savings accounts and stock based compensation expense for certain retirement eligible employees, our noninterest expenses were down compared to the linked quarter.
Kathryn M. Bailey: Compared to the prior year quarter, non-interest expense grew 21% and was heavily impacted by the larger footprint and ongoing operating costs of the additional offices from Limestone. For the first quarter, our reported efficiency ratio was 58%, compared to 56% for the linked quarter. When adjusted for non-core expenses, our efficiency ratio was 58.1% compared to 54.9% for the linked quarter. The increase was related to higher non-interest expense, mostly due to our additional annual first quarter expenses, coupled with lower net interest income due to declined accretion income.
Katy: Compared to the prior year quarter noninterest expense grew 21% and was heavily impacted by the larger footprint and ongoing operating costs.
Katy: The additional offices from limestone.
Katy: For the first quarter, our reported efficiency ratio was 58% compared to 56% for the linked quarter.
Katy: When adjusted for Noncore expenses, our efficiency ratio was 58, 1% compared to 54, 9% for the linked quarter.
Katy: The increase was related to higher noninterest expense, mostly due to our additional annual first quarter expenses, coupled with lower net interest income due to declining accretion income.
Katy: Moving onto our balance sheet, our investment securities portfolio to total assets was relatively stable compared to year end, one and was at 21% at March 31st.
Kathryn M. Bailey: Moving on to our balance sheet, our investment securities portfolio to total assets was relatively stable compared to year-end and was at 20.1% at March 31st. At the same time, our loan-to-deposit ratio declined to 84.7% from 86.1% at year-end. We continue to have a healthy level of liquidity and have been holding more cash on our balance sheet in recent months. We mentioned last quarter that we utilized the Federal Reserve's Bank Term Funding Program, and while additional funding has been restricted, we currently have $163 million outstanding that we anticipate holding until maturity in January of 2025, as long as rates continue to make this advantageous.
Katy: At the same time, our loan to deposit ratio declined to 84, 7% from 86, 1% at year end.
Katy: We continue to have a healthy level of liquidity and holding more cash on our balance sheet in recent months.
Katy: We mentioned last quarter that we utilize the federal Reserve Bank term funding program and while additional funding has been restricted we currently have $163 million outstanding that we anticipate holding until maturity in January of 2025.
Katy: As long as rates continue to make this advantageous.
Katy: From a deposit perspective, we grew our balances 2% from yearend.
Kathryn M. Bailey: From a deposit perspective, we grew our balances 2% from year end. We were able to increase our retail CDs by 16%, governmental deposits by 14%, and money markets by 11%. We implemented a deposit pricing strategy last year, utilizing short-term, higher-rate CD offerings for customers, which continued to bolster our CD balances into the first quarter. While we want to retain the deposit,
Katy: We were able to increase our retail C DS by 16% governmental deposits by 14% and money markets by 11%.
We implemented that deposit strategy, our pricing strategy last year, utilizing short term higher rate CD offerings for customers.
Katy: Which continued to bolster our CD balances into the first quarter.
Katy: We want to retain the deposit.
Katy: We have generated we also want to control our deposit costs long term.
Kathryn M. Bailey: We have generated; we also want to control our deposits costs in the long term. The increase in governmental deposits during the quarter was related to seasonal influxes of cash. Our demand deposits declined to 35% of total deposits at quarter end, compared to 38% at year end, and have been impacted by our retail CD growth in recent quarters. At quarter end, our deposit composition was 76% of retail deposit balances, which included small businesses, and 24% of commercial deposit balances. Our average retail customer deposit relationship was $24,000 at quarter end, while our median was $2,800.
Katy: The increase in governmental deposits during the quarter was related to seasonal influx of cash.
Katy: Our demand deposits declined to 35% of total deposits at quarter end compared to 38% at year end and has been impacted by our retail CD growth in recent quarters.
Katy: At quarter end, our deposit composition, with 76% and retail deposit balances, which included small businesses and 24% and commercial deposit balances.
Katy: Our average retail customer deposit relationship with $24000 at quarter end, well, our median with $2800.
Katy: Moving on to our capital position, we are confident in the value of our stock and repurchased another $3 million of shared or shares during the first quarter.
Kathryn M. Bailey: Moving on to our capital position, we are confident in the value of our stock and repurchased another $3 million of shares during the first quarter. Additionally, we remain confident in our performance and raised our quarterly dividend by a penny this morning, making this the ninth consecutive year of a dividend increase. Our $0.40 dividend represents a yield of 5.6% per share.
Katy: Additionally, we remain confident in our performance and raised our quarterly dividend by a penny. This morning, making this the ninth consecutive year of a dividend increase.
Katy: Our 40 cent dividend represents a yield of five 6% per share.
Katy: At quarter end, our capital ratios remain strong our common equity tier one capital ratio was 11.7% our total risk based capital ratio was 13, 4% and our leverage ratio was nine 4%.
Kathryn M. Bailey: At quarter end, our capital ratios remained strong. Our common equity tier one capital ratio was 11.7%. Our total risk-based capital ratio was 13.4%, and our leverage ratio was 9.4%. Our tangible equity to tangible assets ratio improved to 7.4% compared to 7.3% at year-end due to increased retained earnings. However, this calculation has been negatively impacted in recent quarters by the excess cash we have been holding on our balance sheet. For several quarters, our accumulated other comprehensive losses have reduced this ratio, which stood at $109 million at quarter end. Our tangible book value per share grew to $18.39 at quarter end compared to $18.16 at year end.
Katy: Our tangible equity to tangible assets ratio improved to seven 4% compared to seven 3% at year end due to increased retained earnings.
Katy: This calculation has been negatively impacted in recent quarters by the excess cash we have been holding on our balance sheet.
Katy: For several quarters, our accumulated other comprehensive losses have reduced this ratio, which stood at $109 million at quarter end.
Katy: Our tangible book value per share grew to $18.39 at quarter end compared to $18.16 at year end.
Tyler J. Wilcox: Finally, I will turn the call over to Tyler for his closing comments.
Katy: Finally, I will turn the call over to Tyler for his closing comments.
Tyler J. Wilcox: Thank you, Katie. As we move forward into 2024, our main goal is to continue making progress on our strategic initiatives. We intend to invest in our infrastructure and technology, be unwavering in our high-quality credit standards, take care of our clients and communities, focus on our associates and be a great employer, drive shareholder value by consistently providing solid performance and total return on our stock, and continue to be acquisitive when it is beneficial in the future.
Tyler: Thank you Katie as we move forward into 'twenty 'twenty four.
Main goal is to continue making progress on our strategic initiatives.
Tyler: We intend to invest in our infrastructure and technology.
Tyler: Unwavering in our high quality credit standards.
Tyler: Take care of our clients and communities.
Tyler: Focus on our associates and being a great employer.
Drive shareholder value by consistently providing solid performance and total return on our stock.
Tyler: And continue to be acquisitive, when it was beneficial in the future.
Tyler J. Wilcox: As it relates to our financial performance for 2024, we anticipate net interest income to benefit from the full-year impact of the limestone merger. We expect our quarterly net interest margin to be between 4.1% and 4.3%, assuming that there are no significant short-term interest rate changes in 2024. We believe our fee-based income growth will be between 6% and 8% compared to 2023. We expect quarterly total non-interest expenses to be between $67 million and $69 million for the second, third, and fourth quarters of 2024.
Tyler: As it relates to our financial performance for 2024, we anticipate net interest income to benefit from the full year impact of the limestone merger.
Tyler: We expect our quarterly net interest margin to be between four 1% and four 3% assuming that there are no significant short term interest rate changes in 2024.
Tyler: We believe our fee based income growth will be between 6% and 8% compared to 2023.
Tyler: We expect quarterly total noninterest expenses to be between $67 million and $69 million for the second third and fourth quarters of 2024.
Tyler: We believe our loan growth for 2024 will be between 6% and 8% compared to 2023.
Tyler J. Wilcox: We believe our loan growth for 2024 will be between 6% and 8% compared to 2023. As we noted last quarter, we anticipate an increase in our provision for credit losses with the anticipated loan growth and the return of some of our net charge-offs to pre-pandemic levels. As we move through the year, we are anticipating a full-year net charge-off rate of around 20 basis points. Our first quarter earnings continued to beat expectations, and our diluted EPS of 84 cents exceeded the consensus analyst's estimate of 80 cents for the quarter.
Tyler: As we noted last quarter, we anticipate an increase in our provision for credit losses with the anticipated loan growth.
Tyler: And return of some of our net charge offs to pre pandemic levels.
Tyler: As we move through the year, you're anticipating a full year net charge off rate of around 20 basis points.
Our first quarter earnings continue to beat expectations, and our diluted EPS of <unk> 84 cents exceeded the consensus analyst estimate of 80 cents for the quarter.
Tyler J. Wilcox: I could not be more proud of what our associates and teams have done in recent quarters in terms of preparing for expected growth, implementing new technology, integrating our most recent merger, and driving organic growth while taking care of each other and our clients. We will continue to build upon our successes into 2024 and beyond, all with the goal of making Peoples the best community bank in America. This concludes our commentary, and we will open the call for questions. Once again, this is Tyler Wilcox, and joining me for the Q&A session is Katie Bailey, our Chief Financial Officer. I will now turn the call back into the hands of our call facilitator.
Tyler: I could not be more proud of what our associates and teams have done in recent quarters in terms of preparing for expected growth implementing new technology integrating our most recent merger and driving organic growth, while taking care of each other and our clients.
Tyler: We will continue to build upon our successes into 'twenty 'twenty four and beyond all with the goal of making people the best community Bank in America.
Tyler: This concludes our commentary and we will open the call for questions. Once again. This is Tyler Wilcox and joining me for the Q&A session is Katie Bailey, our Chief Financial Officer, I will now turn the call back into the hands of our call facilitator. Thank you.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
Danielle: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press star then 2. The first question comes from Brendan Nosal from HVD Group. Please go ahead.
Speaker Change: Using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: If at any time a question has been addressed and you would like to withdraw your question. Please press Star then two.
Speaker Change: The first question comes from Brendan that's all from <unk>. Please go ahead.
Brendan Jeffrey Nosal: Hey, good morning, folks. How are you doing?
Brendan: Hey, good morning, folks hope you're doing well.
Tyler J. Wilcox: Good morning, Brendan. Let me just start off here with an update on the internal prep for $10 billion in assets. Just kind of curious what inning you're in, how much more run rate costs you need to bake in, and then maybe some early thoughts on the Durbin impact.
Brendan: Good morning Brennan.
Brendan: Maybe just to start off here.
Brendan: On an update for the internal prep for 10 billion in assets just kind of curious.
Brendan: What inning, you're in and how much more run rate costs, you need to bake in.
Brendan: And then maybe some early thoughts on the Durbin impact as well.
Tyler J. Wilcox: Yeah, Brendan, thanks for the question. I would say from an inning perspective, I'd say we're in the ninth inning, and we're ready to go. If the correct opportunity comes along, we feel confident in the investments that we've made and the preparation that we've made, both in people, systems, and preparation for the regulatory environment. So from that perspective, it's just a matter of finding the right opportunity in order to cross. I believe the second part of your question was related to the expenses. Yeah, and I think
Speaker Change: Yeah, Brendan Thanks for the question I would say from a from an inning perspective I'd say we are in the in terms of preparation we are in the ninth inning.
Speaker Change: We're ready to go.
Speaker Change: If the correct opportunity came by we feel confident in the investments that we've made and the preparation that we've made.
Bolton people systems.
Speaker Change: In preparation for the regulatory environment. So from that perspective, it's just a matter of finding the right opportunity in order to cross.
Speaker Change: I believe the second part of your question was related to the expenses.
Tyler J. Wilcox: Yeah, and I think the expense base for the first quarter includes all of the expenses we would anticipate. There are some minor enhancements we'll make as it relates to risk management and so forth, but nothing from a material perspective yet to be added to the expense base.
Speaker Change: Yeah, and I think the expense base for the first quarter includes all of the expenses. We went anticipate theres. Some minor enhancements will make as it relates to risk management, and so forth, but nothing from a material perspective, yet to be added in the expense base.
Speaker Change: Okay got it.
Brendan Jeffrey Nosal: Okay, fantastic. That's helpful. Maybe to pivot over to the deposit side of things, just kind of curious for your latest thoughts on where non-interest bearing balances might buy. I know it's tough to pinpoint, but any color there would be helpful.
Speaker Change: That's helpful maybe.
Maybe to pivot over to the deposit side of things.
Speaker Change: Kind of curious for your latest thoughts on where noninterest bearing balances might might bottom out I know its tough to pinpoint but any color there would be helpful.
Tyler J. Wilcox: Yeah, as you saw, we've had some decline in the first quarter. What I can say is we expect to experience a little more continued runoff as we proceed through 24, nothing significant. And the good news so far for the month of April, we're actually showing some stability in that category. So I hope, would like to see that trend continue, but from a forecast perspective, I think we still expect some migration out of non-interest bearing deposits.
Speaker Change: Yeah as you saw we had some decline in the first quarter, what I can say its way do you expect to experience a little more continued run off as we proceed through 'twenty four nothing.
Speaker Change: Significant and the good news to date or the month of April we're actually showing some stability in that category. So I hope, we'd like to see that trend to continue but from a forecast perspective, I think we still expect some migration out of noninterest bearing deposits as we proceed through 'twenty four.
Brendan Jeffrey Nosal: All right, perfect. Thanks for taking the questions. Thank you.
Speaker Change: All right perfect. Thanks for taking the questions.
Speaker Change: Thank you.
Daniel Tamayo: The next question comes from Daniel Tamayo from Raymond James. Please go ahead.
Speaker Change: The next question comes from Daniel Tamayo from Raymond James. Please go ahead.
Daniel Tamayo: Thank you. Good morning, everyone. Maybe first, on the NII and the NIM guidance, maybe Katie, if you could give us an idea of what's baked into that 4.1 to 4.3% NIM guidance, what may push you towards the lower end versus the higher end, and then if you have any more thoughts or detail on how much pressure you're expecting on accretion, that'd be great as well.
Daniel Tamayo: Thank you and good morning, everyone. Good morning day.
Daniel Tamayo: Maybe first on on on the NII and the NIM guidance.
Daniel Tamayo: Maybe Katie if if if you could give us an idea of.
Daniel Tamayo: What's baked in to that 4.1 to four 3% NIM guidance, what what made you know push you towards the lower end versus the higher end and then if you have any more.
Daniel Tamayo: Thoughts or detail on on how much pressure, you're expecting on accretion that'd be that'd be great as well.
Kathryn M. Bailey: Yeah, I...
Kathryn M. Bailey: Yeah, I think the big variable in NIM is deposits and migration and the cost that it takes to retain those. So that would drive us to the lower end. I think from a rate forecast, I think, as we noted here, we're relatively neutral from our balance sheet position, and therefore, a 25 basis point, you know, a couple of those, I think we can manage pretty effectively to maintain that range. So I think that's kind of the main drivers.
Daniel Tamayo: Yeah, I think the big variable and then their minutes deposits and the migration and the cost that it takes to retain them.
Daniel Tamayo:
Speaker Change: So that would drive us to the lower end I think from a rate forecast I think as we noted in here, we're relatively neutral from a balance sheet position and therefore, you know a 25 basis point you know a couple of those I think we can manage pretty effectively to maintain that range. So I.
Speaker Change: That's kind of the main drivers from an accretion perspective, we printed a 33 basis point impact of accretion. This quarter I think I had last quarter I guided to 30 to 35 I think we'll be in that range 30 to 35 for the second quarter, we might go below that in the back half of this year unless those funds continued to.
Daniel Tamayo: From an accretion perspective, we printed a 33 basis point impact of accretion this quarter. I think last quarter it guided to $30 to $35. I think we'll be in that range, $30 to $35, for the second quarter. We might go dip below that in the back half of this year as those loans continue to renew either in our portfolio or out of our portfolio.
Speaker Change: A reprice or kind of renew either in our portfolio are out of our portfolio.
Speaker Change: Okay.
Kathryn M. Bailey: Okay, but it's fair to say you're still expecting, I guess, some coordinate pressure in your baseline assumption.
Speaker Change: But fair to say, you're still expecting I guess, some some core NIM pressure in your in your baseline assumptions.
Kathryn M. Bailey: I think there may be a few basis points of compression that we might experience next quarter, but nothing to the tune of what we experienced this quarter. We didn't have kind of a true up in accretion this quarter like we did in the fourth quarter. So I think we'll still be, from an accretion perspective, we'll still be in that 30 to 35 basis points. It'll be the deposit cost; we might continue to see a few more basis points of compression, but nothing significant from my perspective.
Theres a few basis points of pressure compression that we might experience next quarter nothing to the tune of what we experienced this quarter I know, we didn't have kind of a true up in accretion this quarter like we did in the fourth quarter. So I think we'll still be from accretion perspective, we'll still be in that 30 to 35 basis points I think it'll be the deposit cost we might.
Speaker Change: To see a few more basis points of compression.
Speaker Change: But nothing significant from my perspective.
Speaker Change: Got it okay. Thank you.
Daniel Tamayo: Got it, okay, thank you. And then, in terms of the excess cash on the balance sheet, what's the plan for how long that stays around?
Speaker Change: And then in terms of the excess cash on the balance sheet, what's the plan for how long that that sticks around yeah. Some of that well migrate off as we have public funds balances roll off as we've noted before seasonally in the first quarter public funds are at a high watermark and those are collateral.
Kathryn M. Bailey: Yeah, some of that will migrate off as we have public funds balances roll off, as we've noted before. Seasonally, in the first quarter, public funds are at a high water mark, and those are collateralized through investment securities being pledged to them. So as those migrate off, we'll be able to reduce the pledged securities and therefore maintain some of that liquidity off the balance sheet through unpledged investments. So that'll be one of the strategies. So you'll see some of that come off in the second quarter, and we have some other activities we're deploying that we expect to see benefits from as we proceed through the third quarter.
Speaker Change: Lives through investment securities being pledged to them. So as those migrate off we'll be able to reduce them. The pledged securities and therefore maintain some of that liquidity off balance sheet through unpledged investment. So that'll be one of the strategies. So you'll see some of that come off in the second quarter.
We have some other activities, where it's deploying that we expect to see benefit as we proceed through the third quarter.
Speaker Change: Okay, but that's all kind of contemplated in the the high level net interest margin path you were talking about that's that's correct yes.
Kathryn M. Bailey: Okay, but that's all kind of contemplated in the high-level net interest margin path you were talking about. That's correct.
Kathryn M. Bailey: That's correct, yes. OK.
Speaker Change: Okay Alright.
Speaker Change: Alright, thanks, so much for the color. Thank you. Thank you Sir.
Daniel Tamayo: Okay. All right. Thanks so much for the color.
Speaker Change: The next question comes from Terry Mcevoy from Stephens. Please go ahead.
Terence James McEvoy: The next question comes from Terry McEvoy from Stevens. Please go ahead.
Terence James McEvoy: Hi, Tyler. Good morning, Katie. Good morning, Terry. I just got a big picture of Tyler. In the release, you said demand for C&I loans and leasing remained strong. And then later in the release, there was an increase in the provision connected to a deterioration
Terence James McEvoy: Hi, Good morning, Tyler Good morning, Katy Perry.
Terence James McEvoy: Just kind of big picture Tyler in the release, you said demand for C&I loans and leasing remained strong and then later in the release there was no increase in the provision connected to a deterioration in the economic conditions. So Tyler can you just talk about the the healthier markets.
Tyler J. Wilcox: Sure, Terry. So a couple of thoughts just to maybe make some distinctions there. You know, the provision relief did include some macroeconomic considerations where we take into consideration, you know, employment nationally; we take into consideration a Q factor there of CRE nationally. I would distinguish that with, you know, our view on our book of business. And so, you know, we see growth coming from a broad base of our markets.
Terence James McEvoy: And where you're seeing the the C&I loan growth in particular.
Tyler J. Wilcox: Sure Terry So a couple of thoughts just to maybe make some distinction there.
The provision released did it did include some macroeconomic.
Tyler J. Wilcox: Considerations, where we take into consideration.
Tyler J. Wilcox: Employment nationally we take into consideration.
Terence James McEvoy: Q factor there of CRE nationally I would distinguish that with you know our view on our book of business.
Terence James McEvoy: So we see the growth coming from a broad base.
Terence James McEvoy:
Terence James McEvoy: Segment of our markets are one of the reasons why we are satisfied with our kind of overall loan portfolio and our production is because of the breadth of the.
Tyler J. Wilcox: One of the reasons why we are satisfied with our overall loan portfolio and our production is because of the breadth of breadth of geography that we have and the breadth of different businesses that we have, that portfolio of businesses approach that we've developed. So, notwithstanding some of the small-ticket leasing, you know, having a slight uptick in the credit issues, we see demand nationally in the leasing businesses. We saw good growth, and we expect to continue to see good growth in the national premium finance business.
The geography that we have and the breadth of different businesses that we have that portfolio of businesses approach that we've developed so notwithstanding some of the small ticket leasing them, having a slight uptick in the credit issues, we see demand nationally in the leasing businesses.
Terence James McEvoy: We saw good growth and we expect to continue to see good growth in the international premium Finance business and then you know on the C&I and CRE side, we continue to kind of have the getting that broad based market of Louisville, Lexington in Washington, D C Columbus, Cleveland, Cincinnati, and so forth so the.
Tyler J. Wilcox: And then, you know, on the CNI and CRE side, we continue to kind of have that broad-based market of Louisville, Lexington, Washington, D.C., Columbus, Cleveland, Cincinnati, and so forth. So, I guess I would say the confidence in that 6% to 8% guidance comes from the strength of the pipeline that we're seeing today. And, you know, historically, we've seen a little bit slower out of the gate. But if you look at the raw production... We think we have a chance to hit those numbers that are pretty realistic.
Terence James McEvoy: I guess I would say the confidence in that 6% to 8% guidance.
Terence James McEvoy: Comes from the strength of the pipeline that we're seeing today and you know historically, we've we've seen a little bit slower out of the gate, but if you look at the raw production.
Terence James McEvoy: We think we have a chance to hit those numbers, but that's pretty realistic.
Terence James McEvoy: Okay.
Tyler J. Wilcox: I appreciate that, Tyler. And then, as a follow-up...
Speaker Change: Appreciate that Tyler and then as a follow up.
Tyler J. Wilcox: Question on commercial real estate, specifically non-owner-occupied, what's the amount that matures over the next year or two years, and how have you stressed-tested that just to prepare the borrower for higher interest rates?
Speaker Change: A question on commercial real estate, specifically, the non owner occupied what's the amount that matures over the next year or two years and how have you stress test that just to prepare the borrower for higher interest rates.
Tyler J. Wilcox: Yeah, we're pretty satisfied with our processes in terms of how we stress test the book, obviously, in the last couple of years, particularly we've had a lot of discipline around that. In the next, you know, in the next year, there's about 185 million that's coming due over the next year. And we feel good about the kind of strength of those borrowers and about $130 million in 2025. So a very manageable amount, and again, our kind of internal credit disciplines of reviewing the strength of the borrower, looking at debt service coverage ratios, and all the rest of the financial disciplines lead us to those conclusions.
Tyler J. Wilcox: Yeah. We are we have of we're pretty satisfied with our processes in terms of how we stress test. The book obviously are in the last Ah.
Tyler J. Wilcox: A couple of years, particularly we've.
Tyler J. Wilcox: We have a lot of discipline around that and the next you know in the next year, there's about $185 million.
Tyler J. Wilcox: That's coming due in <unk>.
Tyler J. Wilcox: Over the next year and we feel good about kind of the strength of those borrowers and.
It's about $130 million in 2025, so a very manageable amount and again, our kind of internal credit disciplines of reviewing the strength of the borrower looking at debt service coverage ratios and kind of all of the rest of the financial disciplines lead us to those conclusions.
Terence James McEvoy: Great, thanks for taking my questions, and I appreciate the forward-looking financial guidance provided earlier. Thank you.
Speaker Change: Great. Thanks for taking my questions and appreciate the the forward looking financial guidance provided earlier. Thank you. Thanks, how are you.
Timothy Jeffrey Switzer: The next question comes from Tim Switzer from KBW. Please go ahead.
Speaker Change: The next question comes from Tim, Switzerland from K B W. Please go ahead.
Timothy Jeffrey Switzer: Hey, good morning. Thanks for taking my questions. The first one I have is with your NIM guidance. Assuming no meaningful changes to short-term rates, what would be the impact if, in late 2024 or early 2025, we start to get a series of rate cuts, say, you know, 3 to 4, 25 basis point cuts. How do you think the NIM would trend over the next year? Is it, you know, down initially? You know, loans repriced lower, and then maybe some relief as deposits start to reprice. How are you guys thinking about that? Yeah, I think that's right.
Speaker Change: Yeah.
Tim: Hey, good morning, Thanks for taking my questions.
Tim: The first one I had is with your NIM guidance.
Tim: Assuming no meaningful changes to.
Tim: Short term rates.
Tim: What would be the impact if in late 'twenty 'twenty four or early 2025, we start to get a series of rate cuts say three to 425 basis point cuts.
Tim: Do you think the NIM would trend over the next year is it no down initially as.
Tim: You know loans reprice lower.
Tim: And then maybe some relief as deposits start to reprice, how how are you guys thinking about that yeah. I think that's right I think as long as they stay in 25 basis point increments and talked to a meaningful.
Kathryn M. Bailey: Yeah, I think that's right. I think as long as they stay in 25 basis point increments and don't do a meaningful cut at one meeting, which I think is our expectation on the go forward, I think the impact will be relatively minimal, maybe somewhere around 5%. So not significant to the, sorry, five basis points; not significant to the extent if they keep it to 25 for a couple meetings. And I think, to your point, I think as we proceed through time, I think we'll be able to recover some of that back through margin to the point you made on deposits. So our retail CD production is relatively short term. We won't get the immediate benefit of those repricing lower, but in relatively short order, we'd be able to see some benefit and relief on that funding.
Tim: Got it at one meeting, which I think is our expectation on a go forward I think the impact will be relatively minimal and you know maybe somewhere around five 5% so not significant to the X Y basis, sorry, five basis point not significant to the extent if they keep it you know 25 or.
Tim: Couple of meeting them and I think to your point I think as we proceed through time I think we'll be able to recover some of that back through margin.
Tim: The point you made on deposits. So our retail CD production is relatively short term, we won't get the immediate benefit of those repricing lower but in relatively short order, we'd be able to see some benefit in relief on that.
Tim: Nate.
Tim: Yeah.
Tim: Yeah.
Timothy Jeffrey Switzer: Okay, that's helpful. Your expenses this quarter were a bit better than your guidance to be above that $67.69 million range. Is there an opportunity for the rest of the year for you to be kind of at the low end of that $67 to $69 million range in your guidance and what kind of drove the
Nate: Okay, that's helpful and.
Nate: Your your expenses this quarter were.
Nate: A bit better than your guidance to be above that 6700 $69 million range is there an opportunity.
Nate: Do you think for the rest of the year for you to be kind of at the low end of that $67 million to $69 million range in your guide.
Nate: And what kind of drove the.
Kathryn M. Bailey: Yeah, I think there's a chance for a quarter or two. We might be on the lower side. I think we'll be somewhere in the midpoint of that range pretty consistently through the year. I think some of the main drivers are medical costs for us in the first quarter came in a little softer than we had anticipated, which isn't a bad thing. But I think generally those kind of grow as we proceed through the year, which is why I don't think we'll see that benefit we saw in the first quarter in each quarter going forward.
Speaker Change: Better trends there yeah, I think there's a chance for a quarter or two we might be on the lower side I think we'll be somewhere in the midpoint of that range pretty consistently through the year I think the some of the main drivers as medical costs for us in the first quarter came in a little softer than we had anticipated which isn't a bad thing, but I think.
Speaker Change: Generally those kind of ground as we proceed through the year, which is why I don't think we'll see that benefit we saw in the first quarter each quarter going forward.
Timothy Jeffrey Switzer: Okay, got it. And then the last question for me, your Non-Existent Income Guide of 6 to 8 percent, is that excluding Net Gains and Losses?
Speaker Change: Okay got it and then the last question for me your noninterest income guide of up 6% to 8% I is that excluding.
Speaker Change: Net gains and losses, yeah, yeah in space.
Kathryn M. Bailey: It's excluding gains and losses on investments, security, and sales, as well as the kind of any other assets we would sell.
Speaker Change: Okay. Thank you.
Speaker Change: Excluding gains and losses on investment Securities sale.
Speaker Change: As well as kind of any other assets we would sell.
Speaker Change: Yeah.
Timothy Jeffrey Switzer: Great, thank you. That's all for me.
Speaker Change: Great. Thank you that's all for me thanks.
Speaker Change: Yeah.
Manuel Antonio Navas: As a reminder, if you have a question, please press star 1. The next question comes from Manuel Navas from D.A. Davidson. Please go ahead.
Speaker Change: As a reminder, if you have a question please press star one.
The next question comes from Manuel Novice from D. A Davidson. Please go ahead.
Manuel Antonio Navas: Hey, good morning. Just a follow up on that fee guide. It's a little bit lower than before. Can you just talk about the drivers there?
Manuel Antonio Navas: Hey, good morning, just a follow up on that fee guide it is a little bit lower than before can you just talk about the drivers there.
Kathryn M. Bailey: Yeah, I think the big driver for that is electronic banking income. I think we've seen, consistent with what we've seen in industry publications, some compression or some reduction in electronic banking income, which is probably the main driver in that category. And couple that with a little bit softer mortgage market than we had anticipated, although I think we see some signs that we might get some relief in that in the coming quarters. But those are the two main drivers.
Yeah, I think the big driver for that is our electronic banking income I think we've been consistent with what we've seen in industry publications. Some compression there was some reduction in our electronic banking income, which is probably the main driver in that category and I couple that with a little bit softer mortgage market than what we.
Manuel Antonio Navas: We had anticipated although I think we see some signs that we might get some relief in that in the coming quarters, but those are the two main drivers.
Manuel Antonio Navas: Okay, great. You talked about the criticized and classified increases. Kind of did I catch that right? It's mainly to acquired loans and any extra color there would. Sure, I'll take that one.
Speaker Change: Okay, great and.
Speaker Change: You've talked about the criticized and classified increases kind of did I catch that right. It's mainly two acquired loans and any extra color there would be great sure I'll take that one so to two loans C&I loans that happen to be acquired loans, we feel really good about the.
Tyler J. Wilcox: So, two loans, C&I loans that happen to be acquired loans. We feel really good about the acquired book, I will say. One of them is part of the equine portfolio out of the limestone acquisition and well-collateralized by property and inventory, so we feel good about our ability to continue with that one. And the second is a senior living facility operator. Again, good collateral and good guarantor support. So we view these as, I know it's a cliche, but we view these as one-offs, particularly because the rest of those books, both in our core and in the acquired books, are performing to expectations.
Speaker Change: Wired book I will say.
Speaker Change: The one of them is as part of the equine portfolio out of the limestone acquisition and are well collateralized by property and inventory feel good about our ability to continue with that one and the second is a senior living facilities operator.
Speaker Change: Again, good good collateral.
Speaker Change: Guarantor support.
Speaker Change: So we view these as a I know, it's a cliche, but we view these as one offs.
Speaker Change: Particularly because the rest of those books well in our core and in the acquired books are performing to expectations.
Speaker Change: Okay. That's that's that's that's really helpful.
Manuel Antonio Navas: Okay, that's really helpful. In the last quarter, you were able to give, switching over to MIM and NII, you gave some nice ranges for a little bit larger moves in Fed Funds. Do you have any updates there? If you don't, I can move on, but just wondering if you have any updates for like a steeper decline in Fed Funds.
Speaker Change: In last quarter, you were able to give I'm switching over to NIM and NII you gave some nice ranges for a little bit larger moves in fed funds do you have any updates there.
It's a dog I can move on but just wondering if you had any update for like a steeper decline in fed funds.
Kathryn M. Bailey: Yeah, I say, back to the previous comment, to the extent we experience a 2 or 3, 25 basis point decrease, over the next few quarters, I think that guidance would still hold in that 410 to 430. Again, our balance sheet is relatively neutrally positioned, so I don't think we have a huge impact up or down to the extent rates move 25, 50, 75 basis points over a few meetings.
Speaker Change: Yeah, I'd say, it's back to the previous comment to the extent, we experience a two or 325 basis point decrease.
Speaker Change: Over the next few quarters, I think that guidance would still hold in that 410 to $4 30, again, our asset position in our balance sheets relatively neutrally positioned them. So I don't think we have a huge impact up or down to the extent rates move you know 25, 50 75 basis points over a few meetings.
Manuel Antonio Navas: Okay, so as long as their pace doesn't increase, you can adjust to it. That makes sense. My last question is, you talked about potentially being acquisitive when it was beneficial. What would you term M&A discussions currently, just kind of what you're hearing in the market, and what would you look for to be beneficial? Yeah.
Speaker Change: Okay.
Speaker Change: Long is there.
Speaker Change: The pace doesn't increase you can you can adjust to it.
Speaker Change: That makes sense.
Speaker Change: Yeah.
Speaker Change: My last question is you talked about.
Speaker Change: Potentially being acquisitive, one beneficial how would you term.
Speaker Change: M&A discussions currently just kind of what's what you're hearing in the market and what would you look for them.
Speaker Change: To be beneficial.
Tyler J. Wilcox: Yeah, thanks for the question. I have a couple of thoughts on that. Beneficial would be the right partnership at the right price, the right size, and the right geography, and I think there's a number of factors that could make it right. You know, obviously, the ideal scenario that everybody talks about is one large acquisition to kind of leapfrog over. The universe of those banks is smaller than the kind of one to two billion dollar universe that, so, I think will be opportunistic if there were a large bank that was willing to partner with us to leap over that ten billion.
Speaker Change: Yeah.
Speaker Change: Thanks for the question a couple of thoughts on that beneficial would be the right partnership at the right price.
Speaker Change: Right size and right geography, and I think there's a number of factors that could make it right.
Speaker Change: You know obviously the ideal scenario that everybody talks about is a is one large acquisition to kind of leapfrog over the universe of those banks is smaller than the kind of one to 2 billion dollar universe that so I think we'll be opportunistic if there were a large banks it was.
Speaker Change: Willing to partner with us to.
Tyler J. Wilcox: We'd be interested in that if there were two to three banks in the one to two billion dollar range that we could make successive acquisitions. We would be interested in that. We've shown an ability in the past to execute on those and to do that well, so we think both paths are absolutely viable. There are obviously a lot of conversations going on throughout the industry. We continue to be active at all times in terms of having those conversations with financial acquisitions, and we will continue that. So we're going to be opportunistic when the right move presents itself.
Speaker Change: To leap over that 10 billion, we'd be interested there. If there were two to three banks in the $1 billion to $2 billion range that we could do.
Speaker Change: Do successive acquisitions, we would be interested with that we've shown the ability in the past to execute on those and to do that well. So we think both apps or are absolutely viable.
Speaker Change: There's obviously a lot of conversations going on throughout the industry. We continue to be active in all times in terms of having those conversations with.
Speaker Change: Central acquisitions and.
Speaker Change: We will continue that.
Speaker Change: So we're gonna be opportunistic when the right move presents itself.
Speaker Change: I appreciate that.
Manuel Antonio Navas: I appreciate that.
Speaker Change: Thank you.
Danielle: At this time, there are no further questions. Sir, do you have any closing remarks? Yes.
Speaker Change: No problem to you.
Speaker Change: Yeah.
Speaker Change: At this time there are no further questions. So do you have any closing remarks.
Tyler J. Wilcox: Yes, I want to thank everyone for joining our call this morning. Please remember that our earnings release and a webcast of this call will be archived at peoplesbancorp.com under the investor relations section. Thank you for your time, and have a great day.
Speaker Change: So I want to thank everyone for joining our call. This morning. Please remember that our earnings release and a webcast of this call will be archived at peoples Bancorp Dot com under the Investor Relations section. Thank you for your time and have a great day.
Danielle: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: Okay.