Q3 2024 Independent Bank Corp Earnings Call
Hello, everyone and welcome to the Independent Bank Corporation reports 2024 third quarter results. My name is Andrew and I'll be your coordinator today. If you would like to ask a question. Please press star followed by one on your telephone keypad now.
Speaker Change: If you change your mind. Please press star followed by two I will now hand, you over to your host Brad Kessel, President and CEO to begin broad to please go ahead.
Brad Kessel: Thanks Sandra.
Brad Kessel: Morning, and welcome to today's call. Thank you for joining us for independent Bank Corporation's conference call and webcast to discuss the company's third quarter 2024 results I am Brad Kessel, President and Chief Executive Officer, and joining me is Kevin Moore Executive Vice President and our Chief Financial Officer.
Speaker Change: And Mr. Joe <unk> Executive Vice President head of commercial banking.
Speaker Change: Before we begin todays call I'd like to direct you to the important information on page two of our presentation specifically the cautionary note regarding forward looking statements.
Speaker Change: If anyone does not already have a copy of the press release issued by US today, you can access it at the company's website independent bank Dot com.
Speaker Change: The agenda for today's call will include prepared remarks, followed by a question and answer session and then closing remarks.
Speaker Change: Independent Bank Corp reported third quarter 2024, net income of $13 $8 million.
Speaker Change: <unk> 65 per diluted share versus net income of $17 5 million or <unk> 83 per diluted share in the prior year period.
Speaker Change: I am proud of our team and very pleased with our third quarter 2024 results driving organic growth on both sides of the balance sheet.
Speaker Change: Overall loans increased nine 3% annualized while core deposits are up eight 9% annualized we were able to generate net interest income growth on both a linked quarter basis on a year over year quarterly basis.
Speaker Change: We believe that our expenses continue to be well managed and we continue to see improved operational scale from strategic investments. We have made in recent years, our credit metrics continue to be excellent with watch credits in nonperforming assets near historic lows.
Speaker Change: These fundamentals continue to drive very strong growth in tangible book value per share, 22% in fact compared to the prior year quarter.
Speaker Change: Based on a robust commercial pipeline in the past record of our core professional core group of professionals and the ongoing strategic initiatives to add talented bankers to our team. We are optimistic about continuing these growth trends for the remainder of 2024 and into 2025.
Speaker Change: Okay.
Speaker Change: On page five total deposits as of September 32024 were $4 6 billion overall core deposits increased $100 million during the third quarter of 2024.
Speaker Change: On a linked quarter basis retail deposits declined by $21 3 million.
Speaker Change: Business deposits increased by $16 7 million.
And our municipal deposits increased by $105 $2 million for the quarter.
Speaker Change: Our existing customer base continues to exhibit a remix out of noninterest bearing and our lower yielding deposit products into our higher yielding product offerings, but the remix pace has slowed. Additionally, our sales team continues to bring in new relationships well below our wholesale cost of funds.
Speaker Change: We have included in our presentation, a historical view of our cost of funds as compared to the fed funds spot rate and the fed effective rate.
Speaker Change: For the quarter, our total cost of funds increased by eight basis points to 210%.
Speaker Change: At this time I would like to turn the presentation over to Joel Ryan to share a few comments on.
Joel Ryan: And the continued success, we are having and are growing our loan portfolios and to provide an update on our credit metrics.
Joel Ryan: Yes, Thanks, Brad and good morning, everyone.
Joel Ryan: Page seven we share an update on loan activity for the quarter.
Joel Ryan: Total loans increased $90 million in the third quarter as Brad said, representing nine 3% annualized growth.
Joel Ryan: We had a strong quarter of commercial loan activity with that portfolio, increasing $93 million, our mortgage portfolio grew $10 million, while our installment loan portfolio declined by $12 $5 million.
Within the commercial loan activity the mix of C&I lending versus investment real estate was approximately 60%, 40% with overall, 35% coming from new customers to the bank.
Joel Ryan: For the year, despite significant headwinds from unscheduled payoffs in the second quarter, our commercial portfolio has grown $145 million.
Joel Ryan: Presenting an 11, 5% annualized growth rate.
Joel Ryan: Based upon our solid commercial pipeline, we see continued growth opportunity in the fourth quarter, while maintaining our disciplined credit standards.
Joel Ryan: As noted in the material.
Joel Ryan: Each portfolio yield on new production is significantly higher than the respective portfolio yield.
Joel Ryan: The commercial portfolio continues to be our highest yielding portfolio with a yield of 678%.
Joel Ryan: Page eight provides additional detail on our commercial loan portfolio.
Joel Ryan: As pointed out in prior quarters C&I lending continues to be our primary focus representing 67% of the portfolio.
Joel Ryan: Manufacturing continues to be the largest concentration within the C&I segment.
Joel Ryan: Pricing, approximately 9% or $172 million.
Joel Ryan: The remaining 33% of the portfolio is comprised of investment real estate with the largest concentration being industrial at 8% or $153 million.
Joel Ryan: It's worth noting that our exposure to the office segment stands at 86 million or four 7% of the commercial portfolio at quarter end.
Joel Ryan: Our office exposure consists primarily of suburban low rise office space with medical comprising 19% of overall office exposure.
Joel Ryan: The average loan size is $1 3 million, which points to the granularity of that segment of our portfolio.
Joel Ryan: For additional insight on our office exposure I refer you to page 25 of the.
Joel Ryan: The appendix to this presentation.
Joel Ryan: Key credit quality metrics and trends are outlined on page nine.
Speaker Change: Overall credit quality continues to be excellent as Brad remarks, just a second ago.
Speaker Change: Total nonperforming loans were $5 1 million or approximately 13 basis points of total loans at quarter end consistent with June 30.
Speaker Change: Past due loans totaled $4 8 million or 12 basis points similar to June 30.
Speaker Change: While not reflected on our slide our commercial watch list remains low at three 3% of the total portfolio, although up slightly from June 30.
At this time I would like to turn the presentation over to Gavin for his comments, including the outlook for the remainder of the year.
Gavin: Thanks, Joel and good morning, everyone I'm, starting on page 10 of our presentation highlights.
Gavin: Highlights our strong regulatory capital positions all capital ratios increased from the linked quarter.
Gavin: Net interest income increased $2 $4 million from the year ago period, our tax equivalent net interest margin was 337% during the third quarter of <unk> 24, compared to 323% in the third quarter of 'twenty, three and down three basis points from the second quarter 2024 worth noting the accelerated.
Gavin: Fee accretion related to a large commercial loan payoff contributed five basis points to the margin in the second quarter of 2024, excluding this accretion in the second quarter of 2024 net interest margin would have been 335% or two basis points lower than the third quarter 2024 margin of 337 <unk>.
Gavin: <unk>.
Gavin: Average, earning assets were $4 $99 billion.
Gavin: Third quarter 2024, compared to $4 $89 billion in the year ago quarter, and $4 $89 billion in the second quarter of 2024.
Gavin: 12 contains a more detailed analysis of the linked quarter increase.
Gavin: And net interest income.
Gavin: And the net interest margin on a lag.
Gavin: Our third quarter 2024, net interest margin was positively impacted by three factors increase in yield on loans was seven basis points change in earning asset mix was two basis points in change in interest bearing liability mix was two basis points. These increases were more than offset by an increase in funding costs was seven basis points.
Gavin: The reduction in loan fee accretion of five basis points and a decline in investment yield a one basis point.
Gavin: On page 13, we provide details on the institution's interest rate risk position. The comparative simulation analysis for the third quarter of 24 in second quarter of 2004 calculates the change in net interest income over the next 12 months under five rate scenarios, all scenarios assume a static balance sheet the base rates scenario applies.
Gavin: Yield curve from the valuation date, the shock scenarios considered immediate permanent in parallel rate changes the base case model the NII modestly higher during the quarter as asset yields were augmented by a shift in asset mix and liability costs also benefited from a shift in mix NII sensitivity profile.
Gavin: <unk> shifted to a more asset sensitive position during the quarter largely due to slightly faster repricing on commercial loans, a modest increase in mortgage loan re pricing due to additional pay fixed swaps and a shift in non maturity deposit beta assumptions currently 35, 6% of assets reprice in one month and <unk>.
Gavin: Six 8% reprice in the next 12 months moving.
Gavin: Moving on to page 14, noninterest income totaled $95 million in the third quarter of 2024 as compared to $15 $6 million in the year ago quarter, and $15 $2 million in the second quarter of 2024 third quarter 24 net gains on mortgage loans.
Gavin: Billion dollars compared to $2 $1 million in the third quarter 'twenty three the increase is due to increased profit margin as well as higher volume of loan sales.
Gavin: Negatively impacting noninterest income was $3 $1 million loss on mortgage loan servicing that this is comprised of $4 2 million or <unk> 16 per diluted share after tax loss due to change in price and a $1 $2 million decrease due to pay downs, that's partially offset by $2 $2 million of revenue in the third.
Quarter of 'twenty four.
Gavin: As detailed on page 15, our noninterest expense totaled $32 $6 million in the third quarter of 2024 as compared to $32 million in the year ago quarter, and $33 3 million in the second quarter of 2024.
Gavin: Performance based compensation increase.
Gavin: $5 million due primarily to a higher expected incentive compensation payout for salaried and hourly employees data processing costs increased by $1 3 million from the prior year period, primarily due to core data processor annual asset growth in CPI related cost increases as well as new solutions implemented during this time.
Gavin: Frame payroll taxes, and employee benefits decreased $6 million, primarily due to lower healthcare related costs.
Gavin: Page 16 is our update for our 2024 outlook to see how our actual performance during the third quarter compared to the original outlook that was provided in January 2024.
Gavin: Our outlook estimated loan growth in mid single digits loans increased $94 million in the third quarter of 2024, or nine 3% annualized which is above our forecasted range commercial and mortgage loans had positive growth while installment loans decreased in the third quarter of 24.
Gavin: Third quarter of 2024 net interest income increased by six 2% over 2023, which was within our forecast of mid single digit growth the.
Gavin: The net interest margin was three 3%, 337% for the quarter and three 3% for the prior year quarter and down 3%.
Gavin: 0.0% to 3% from the linked quarter.
Gavin: The third quarter 'twenty for provision for credit losses was an expense of $1 $5 million or 15 basis points annualized of average loans, which is within our forecasted range.
Gavin: Moving on to page 17, noninterest income totaled $9 $5 million.
Gavin: In third quarter of 2023.
Gavin: Third quarter, 2024, which below just below our forecasted range of $11 5 million to $13 million third quarter 'twenty four mortgage loan originations sales and gains totaled 147, $5 million $117 million and $2 $2 million respectively.
Gavin: Mortgage loans servicing that generated a loss of three point.
Gavin: $1 million in the third quarter of 24, noninterest expense was $32 $6 million in the third quarter within our forecasted range of 32, 5% to $33 $5 million, our effective income tax rate of 21% for the third quarter 2024.
Gavin: Was in line with our forecast lastly, there were no shares repurchased in the third quarter for first nine months of 2024 that concludes my prepared remarks, and I would like to now turn the call back over to Brad.
Brad Kessel: Thanks, Kevin.
Brad Kessel: I am very pleased with another solid quarter for 2024 and it is very much in line with the strong results, which our company has been delivering.
Brad Kessel: After over quarter year after year for some time.
Brad Kessel: This success is directly attributable to our talented team our focus on connecting with customers.
Brad Kessel: Vesting in our communities and making banking easy.
Brad Kessel: We've built a strong community bank franchise, which positions us well to effectively manage through a variety of economic environments and continue delivering strong and consistent results for our shareholders.
Brad Kessel: As we move to the fourth quarter of 2024, or 160, <unk> year of serving the communities in Michigan and into 2025, our focus will be continuing to invest in our team.
Brad Kessel: Leveraging our technology and supporting our communities.
Brad Kessel: In doing so we will continue the rotation of our earning assets out of lower yielding investments into higher yielding loans.
Brad Kessel: With the strong value proposition offered as a large community commercial bank. We believe we can continue to grow our customer base, while managing our cost of funds and controlling our noninterest expenses.
Brad Kessel: Accordingly, we are very excited about our future.
Brad Kessel: At this point in time, we'd like to open up the call for questions.
Speaker Change: Thank you Gavin.
Speaker Change: Ask a question. Please press star followed by one on your telephone keypad now when putting to ask a question. Please ensure your devices on muted locally if you change your mind. Please press star followed by care.
Speaker Change: Our first question is from Brendan Nosal with hub group Brendan Your line is now open. Please go ahead.
Brendan Nosal: Hey, good morning, guys hope you're doing well.
Speaker Change: Good morning, Brandon.
Brendan Nosal: Maybe just starting off here.
Mortgage gain on sale fees I mean, it looks like it's.
Brendan Nosal: Strongest quarter, you guys have put up in quite some time, it looks like better gain on sale margins better mix of salable product.
Brendan Nosal: Just kind of curious what you folks are seeing at a ground level for that business and how you expect it to trend over the next few quarters. Thanks.
Brendan Nosal: Yes, Thanks, Brian This is Gavin yes.
Brendan Nosal: Yes, so we.
Brendan Nosal: We think.
Brendan Nosal: Margins stable.
Brendan Nosal: And but I do think we're going to see some headwinds in terms of production and thats, primarily due to seasonality.
Brendan Nosal: As well as just.
Brendan Nosal: <unk> limited supply so.
Brendan Nosal: But overall margins.
Brendan Nosal: Margins have been pretty stable.
Brendan Nosal: They're going to continue through year end.
Speaker Change: I think I would add there.
Speaker Change: Brendan is interesting sort of watch.
Speaker Change: What was going on with.
Speaker Change: Application levels.
Speaker Change: Revolving around the <unk>.
Speaker Change: The feds.
Speaker Change: Move in September and I think you know.
Speaker Change: We had a lot of the.
Speaker Change: Client base, probably more than normal floating in anticipation.
Speaker Change: Further drops in the mortgage rates and obviously.
Short term rates or.
Speaker Change: Move differently Oftentimes then.
The longer term mortgage rates so.
Speaker Change: After the move.
Speaker Change: And then we saw actually in post quarter end.
Speaker Change: Now at the street level, almost 100 basis points.
Speaker Change: In the mortgage pricing so customers I think we're expecting it to go one way and in fact went the other way so.
Speaker Change: We're going to I think again Dovetailing, what Gavin said sort of see what happens as we are.
Here in Michigan and go into typically a softer season and see what happens, but hopefully thats.
Speaker Change: Helpful.
Speaker Change: Yes, no I appreciate the comments there.
Speaker Change: One more for me just thinking about how the balance sheet is positioned for.
Speaker Change: <unk> reductions I mean, I guess, the sheets, maybe a little bit asset sensitive, but you have the dynamic of rotating from securities into loans.
Speaker Change: Kind of put those two pieces together does that kind of lead to more or less stable margin as we move ahead.
Speaker Change: I actually would say.
Speaker Change: Margin, we should continue to see expansion.
Speaker Change: And.
Speaker Change: Just on what's disclosed that's a 12 month forward look so.
Speaker Change: <unk>.
Speaker Change: We're showing some asset sensitivity and rates down in the model but.
That base model margin is higher than what we're actually at today.
Speaker Change: So just another way to say that I think we anticipate with the repricing of the assets.
Speaker Change: Some ability to reprice on the liability side the margin grind higher.
Speaker Change: Okay. Thanks for taking the question Kevin I appreciate it.
Speaker Change: Thank you.
Speaker Change: Our next question is from Peter Winter with D. A Davidson Peter Your line is now open. Please go ahead.
Peter Winter: Thank you.
Peter Winter: You guys had nice annualized.
Peter Winter: Loan growth this quarter can you just talk about.
Peter Winter: Loan demand loan pipelines going forward.
Peter Winter: Secondly, do you think that there is a lot of pent up loan demand.
Peter Winter: As we get past this election, and hopefully with lower rates that it could lead to even stronger growth.
Speaker Change: That's a great question Peter.
Peter Winter: Sure.
Peter Winter: Your thoughts on what Youre seeing there.
Speaker Change: Right now our pipeline on the commercial side Peter is is solid.
Peter Winter: So I think our fourth quarter and early in 'twenty five look fine.
Peter Winter: Hard to know on that it's a really interesting question on the pent up demand.
Peter Winter: There could be some.
Peter Winter: Our growth has been really good so it's difficult for me to sit here and say Oh, yes, we can we can outperform our current run rate.
Peter Winter: As you know 11 ish percent annualized so.
Peter Winter: But there certainly could be some.
Peter Winter: Business owners that have been sitting on the sidelines as waiting to make up.
Peter Winter: And equipment or or expansion decision.
Peter Winter: Pending the outcome of the election I could certainly see some of that but it's really hard to gauge that.
Peter Winter: Okay.
Speaker Change: And then Joel just.
Speaker Change: <unk> had a lot of success.
Speaker Change: With the dislocation in your markets from acquisitions, bringing in teams.
Speaker Change: Or bankers just wondering if you could talk about maybe what the pipeline is for hiring new bankers.
Speaker Change: With that dislocation in the markets.
Speaker Change: Looking.
Speaker Change: Yes, we're just continuing to.
Speaker Change: Look and talk.
Speaker Change:
Speaker Change: So I don't want to put a number on it but our plan is is to.
Speaker Change: What we've been doing in blast few years and that is continue to where we can put good talent on our team and that pays off in the long run for us. This.
Speaker Change: This past quarter, we had some bankers.
Speaker Change: Different markets, we did yes, we added.
Speaker Change: We added two in southeast Michigan.
Speaker Change: And.
Speaker Change: And one up in in our northern Michigan very good region.
Speaker Change: Okay.
Speaker Change: Got it and just my final question Chris.
Speaker Change: Credit quality is great.
Speaker Change: Last quarter you slightly.
Speaker Change: Lease reserves this quarter you added.
Speaker Change: Little over $1 million.
Speaker Change: Is that addition, just kind of to support loan growth and the thought is you want to keep.
Speaker Change: The ACL ratio fairly steady.
Speaker Change: From here.
Speaker Change: Yes.
Okay.
Speaker Change: I would say, yes this quarters.
Speaker Change: Provision was directly attributable to loan growth.
Speaker Change: We're at a 146 ish.
Speaker Change: Overall.
Speaker Change: And but built into that is about a 25%.
Speaker Change: Subjective and I think we're still sitting on.
Speaker Change: Our subjective.
Speaker Change: Reserve.
Speaker Change: What's the question out there is this a soft landing or a hard landing so.
Speaker Change: I think it will get clear post election and in the 25% so.
Speaker Change:
Speaker Change: The reserves are very healthy today.
Speaker Change: <unk>.
Speaker Change: I think going forward, you'll see provisioning.
Speaker Change: Consistent with our recent record has been.
Speaker Change: Got it thanks for taking the questions.
Speaker Change: Our next question is from Nathan race with Piper Sandler Nathan Your line is now open.
Speaker Change: Hi, This is Adam crawl on term Nathan race, Thanks for taking my question.
Speaker Change: So just starting on.
Speaker Change: Deposit costs on the pace of increase was a bit higher this quarter than in prior ones is it fair to assume that deposit costs have peaked.
Speaker Change: I was just wondering if you could provide any color on what youre seeing in terms of deposit pricing competition within your markets.
Speaker Change: Yes.
Speaker Change: I would.
Speaker Change: So a lot of that has to do with mix.
Speaker Change: <unk>.
Speaker Change: But in terms of spot rate, yes, I do believe that we have seen a peak with with the recent fed move.
Speaker Change: But again.
Speaker Change: We did do we did continue to see some runoff in the non interest going and then newest rotating into interest bearing so.
Speaker Change: But from a spot rate perspective, I do agree that I think were at a peak.
Speaker Change: And in terms of.
Speaker Change: What we're seeing in the marketplace.
Speaker Change: I think its still aggressive.
Speaker Change: I think.
Speaker Change: And watchful so.
Looking at your neighbor down the street and seeing what Theyre doing and.
Speaker Change: Yes.
Speaker Change: Who is going to Blink first so.
Speaker Change: It's going to be interesting to see here.
Through the balance of the year, who does what but.
Speaker Change: No.
Speaker Change: Our pricing strategy I think.
Speaker Change: <unk> continues to work well, we're going to take very good care of our customer base.
Speaker Change: And and.
Speaker Change: You know.
Based on what our overall wholesale borrowing costs that really drives the overall pricing strategy. So I feel good where we're at particularly with just a very strong deposit growth here in the fourth and the third quarter.
Speaker Change: Thanks, I appreciate all the color on that.
Speaker Change: Just switching to expenses.
Speaker Change: It was nice to see them come in lower this quarter and I saw in our release yesterday about using AI to kind of streamline.
Speaker Change: Processes in.
Speaker Change: Couple that with <unk>.
Speaker Change: Ongoing initiatives to add additional bankers I was just wondering how you guys are thinking about.
Speaker Change: The expense run rate in 2025.
Speaker Change: On 2025.
Speaker Change: Adam.
Speaker Change: We haven't provided.
Speaker Change: Any guidance at this point R. R.
Speaker Change: The timing would be following the fourth quarter, we will give you a full look at 2025.
Speaker Change: And so at that at that time.
Speaker Change: We'll share that but.
Speaker Change: I would say hey expense management.
Speaker Change: Is is a focus for us we've been in that 30 to $33 $5 million range for some time.
Speaker Change: And.
Speaker Change: We've been able to keep it there.
Speaker Change: Really just a resource.
Speaker Change: Yeah.
Speaker Change: Allocation or reallocation so.
Speaker Change: While we are growing the.
Speaker Change: Commercial banking team significantly we actually our overall head count is down significantly we're a little over 800 ftes.
Speaker Change: Sure.
Speaker Change: Pulled out of the branch system through the use of Tullow recycler machines, it's been pulled out of the.
Speaker Change: Mortgage support area.
Speaker Change: As volumes.
Speaker Change: Stayed low.
Speaker Change: It did not.
Speaker Change: So as they stayed lower and as we've implemented automation on the mortgage side. So.
Speaker Change: We are excited as we go forward about.
Speaker Change: Our positioning with AI.
Speaker Change: And application.
Speaker Change: <unk>.
Speaker Change: Interfaces and.
Speaker Change: As well as bots.
Speaker Change: Our technology leadership.
Speaker Change: Guys are doing a great job there.
Speaker Change: We're seeing some real benefits.
Speaker Change: Some use case use cases today internally in terms of helping our staff better serve our client base, but just.
Speaker Change: Accessing information.
Speaker Change: And I think in 2025, what we're hopeful for is really to move that AI.
Speaker Change: And leverage it on the revenue generation side so.
Speaker Change: It's an exciting time to be in banking and and a community bank.
Speaker Change: Okay.
Speaker Change: Thanks for all the color on that.
Speaker Change: That's it for me.
Speaker Change: Thank you and then just as a reminder, if you would like to ask a question. Please press star followed by one on your telephone keypad.
Speaker Change: Okay.
Speaker Change: Our next question is from Damon Delmonte with K B W. Damon Your line is now open.
Speaker Change: Hey, everybody. This is Matt rank filling in from David del Monte Hope everybody's doing well.
Speaker Change: Just a follow up to the last question on AI has there been any regulator pushback or anything extra <unk> had to do to make sure they're okay with with how youre using the systems or is that more.
Speaker Change: For later on in 2026, when you move into the more of the revenue side.
Speaker Change: No I think.
Speaker Change: First off.
Speaker Change: This is early.
Speaker Change: <unk>.
Speaker Change: <unk>.
Speaker Change: I think everybody's trying to figure out you know.
Speaker Change: What it can do.
Speaker Change: And then.
Execute on it but it all it all starts with governance.
Speaker Change: And so.
Speaker Change: You know we're not.
Speaker Change: Waiting too.
Speaker Change: Developed the governance around AI based on what regulators tell us I mean, we're.
Speaker Change: Building the governance around what we think are.
Speaker Change: Risk management best practices so.
Speaker Change: I think we're not.
Speaker Change: Certainly over our skis on on that and.
Speaker Change: I think we're in a good spot but at this point.
Speaker Change: No there hasn't been any.
Speaker Change: Pushback by regulators.
Speaker Change: Yeah.
Speaker Change: Okay got it and then just last one on deposit growth.
Speaker Change: Does the lowering of rates made it easier to kind of garner the whole relationship from a loan perspective or is.
Speaker Change: Is it not really affect the Dod I was just curious if we could see a step up in growth there.
Speaker Change: There could be some of that this is joel.
Joel Ryan: We do.
Joel Ryan: There were some some opportunities that really were just kind of boxed out over the past year.
Joel Ryan: Or so year and a half.
Joel Ryan: Because.
Joel Ryan: They were locked deanna on it.
Joel Ryan: Our fixed rate debt.
Joel Ryan: Was very attractive so yeah, we will see time here.
Joel Ryan: A portion of that because those loans will ultimately come up for refinance but.
Joel Ryan: Yes.
Joel Ryan: Certainly could be a little bit of lift that.
Joel Ryan: That we see with some some pieces that we haven't been able to pull.
Joel Ryan: <unk>.
Joel Ryan: On customer relationships.
Joel Ryan:
Joel Ryan: With the.
Speaker Change: The refinance activity that's a really good question.
Speaker Change: Okay, great. Thank you that's all for me.
Speaker Change: Our next question is from John Rogers with Janney John Your line is now open.
John Rogers: Good morning, guys.
John Rogers: John.
John Rogers: Okay.
Kevin a question for you just on the balance sheet. The securities portfolio could you remind us what what sort of maturities youre expecting in the fourth quarter and then next year.
Kevin Moore: Yes, so we're looking at about $25 million.
Kevin Moore: In the fourth quarter, and then next year is going to be in that.
Kevin Moore: Current speeds 100, Twentyish 120 million ish.
Kevin Moore: For the full year for the full year that's correct.
Speaker Change: Is that $120 million next year is that weighted heavily towards any one quarter or is it fairly even.
Speaker Change: It's fairly even though I mean, a lot of it is amortization off the MBS portfolio.
Speaker Change: Okay.
Speaker Change: I think maybe a quarter or two ago. You had said you sort of longer term targeting securities to assets of around 12% to 13% is that still the case.
Speaker Change: 12 to 15, but yes, youre right there John.
John Rogers: Okay. Okay.
John Rogers: That's it for me Thank you guys.
John Rogers: Thank you.
Speaker Change: Thank you that ends our Q&A session I will hand back to Brad for any closing remarks.
Brad Kessel: In closing I would like to thank our board of directors and our senior management for their support and leadership I also want to thank all our associates are continue to be so proud of the job being done by each member of our team each team member in his or her own way continues to do their part toward our common goal of guiding our customers to be in.
Brad Kessel: Dependent finally, I'd like to thank each of you for your interest in Independent Bank Corporation and for joining US on today's call have a great day.
Speaker Change: Thank you very much Brad and thank you everyone for connecting you may now disconnect your lines.
Speaker Change: Yeah.
Speaker Change: [music].