Q3 2024 F.N.B. Corp Earnings Call
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Speaker Change: Thank you for watching!
Speaker Change: Good morning and welcome to the FNB Corporation 3rd quarter 2024 earnings call.
Speaker Change: All participants will be in listen only mode.
Speaker Change: Should you need assistance, please signally conference specialist by pressing star than zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star than one on your telephone keypad. To withdraw your question, please press star than two. Please note this event is being recorded. I would now like to turn the conference over to Lisa Hajdu, Manager of Investor Relations. Please go ahead. Thank you.
Speaker Change: Good morning and welcome to our earnings call. This conference call of FNB Corporation and the reports at Piles with the Securities and Exchange Commission often contain forward-looking statements and non-gap financial measures.
Speaker Change: Non-gap financial measures should be viewed in addition to and not as alternative for how we're reported results compare in accordance with gaps. Reconciliation of gaps to non-gap operating measures to the most directly comparable gap financial measures are included in our presentation materials and in our earnings release.
Speaker Change: He is a furer to these non-gap and forward-looking statement disposes contained in our related materials, reports, and registration statements filed with security and exchange commission and available on our corporate website.
Speaker Change: A replay of this call will be available until Friday, October 25th, and the webcast link will be posted to the about us in best-a-relation section of our course website.
Speaker Change: I will now turn the call over to Vince Delie, Chairman, President and CEO.
Vince Delie: Thank you, and welcome to our third corner of Ernie's call. Joining me today are Vincent Calabrese, our Chief Financial Officer, and Gary Guerrieri, our Chief Credit Officer.
Vince Delie: I've been reported third quarter operating netting I'm available to common shareholders of 122 million, or 34 cents for diluted common share after adjusting for 15 million of significant items impacting her.
Vince Delie: The third quarter's results demonstrate our ability to produce quality loans and forgiveness deposits throughout our footprint, while maintaining stable non-interest bearing deposits balance as it approximates the tender.
Vince Delie: We generate linked order revenue growth, strengthen our balance sheet with the record CET-1 ratio of 10.4%.
Vince Delie: and Grok Shareholder value, with tangible book value growth of 15% year over year, and an operating return on average tangible common equity of 14%.
Vince Delie: We are also particularly proud of our ability to gain market sugar in a number of MSAs across our footprint.
Vince Delie: and achieved a number to traditional retail deposit share position in Pittsburgh.
Vince Delie: Despite competition from some of the nation's largest banks.
Vince Delie: In this environment, it is important to continue to manage our capital and liquidity position.
Vince Delie: 3rd quarter, I've been completed $431 million in direct auto loan sale, allowing us to remove lower yielding assets from our balance sheet with minimal impact to forward earnings, while improving the capital and loan to the positive ratio.
Speaker Change: This Calabrese that provide the details about the sale during his remarks.
Speaker Change: Total long time to the quarter at nearly 3.7 billion, a 4.6% annualized link quarter increase when excluding the long sale.
Speaker Change: At some of these long growth, as once again exceeded the published H.A. data, as we continue to gain market share and can be attributed to our business model and its emphasis on the diverse and attractive footprint, as well as ample capital and liquidity to support our clients.
Speaker Change: Total deposits ended the quarter at 36.8 billion, an increase at 5.1% for 1.8 billion from the second quarter, benefiting from new production that was generated through successful deposits and initiatives, as well as seasonal deposits and imports.
Speaker Change: Our strong sequential deposit book highlights the successful efforts of our commercial and business makers to establish and deepen find relationships.
Speaker Change: We also have leveraged our digital and data analytics capabilities to effectively market and capture the positive from new and existing retail households through data driven lead generation.
Speaker Change: We made strides in consumer and small business deposits through our omnichannel clips to work in our environment, leveraging our diversified geographic branch footprint and a work winning a historic commonout.
Speaker Change: Our London deposit ratio improves significantly to 91.7% a decrease of nearly 5% of points from last quarter.
Speaker Change: This linked foreign change demonstrates our ability to execute strategies to manage the loan to the
Speaker Change: In the third quarter alone, F&B generated nearly 1.8 billion deposits completed a loan sale, and supported 391 million loan growth.
Speaker Change: We will continue to manage the London deposit ratio of the long-term strategy of being our customer's primary operating bank across both the consumer and commercial portfolios, aimed at our advanced digital tools, puts the brick strategy and product bundling capabilities.
Speaker Change: This quarter is total revenue growth of 2.3% was driven by an all-time high non-interest income of 90 million and stronger net interest income level.
Speaker Change: We will further advance our strategy of diversifying revenue streams and leveraging ongoing investments, including a focus on expanding business lines in our capital markets segment.
Speaker Change: Operating non-interest expense total 2304 million, driven by higher salaries and benefits, partially associated with strategic hiring, necessary to grow market share and our continued investment in our risk management infrastructure.
Speaker Change: We strategically increased marketing expenses 2 million to support deposit initiatives that led to our robust deposit growth.
Speaker Change: The expense management remains a high priority, and we expect fourth quarter expenses to be down to eventually.
Speaker Change: Our ongoing expense management, the growing diverse revenue streams, led to a peer-leading efficiency ratio of 55.2% in the third quarter.
Speaker Change: Another area of ongoing focus is maintaining consistent and conservative underwriting guidelines.
Speaker Change: and enabling us to continuously serve our customers.
Speaker Change: Over the last decade, our credit team has built a comprehensive framework to effectively and proactively manage credit risk in concentrations through various economic cycles.
Speaker Change: This long-standing approach to credit risk management continues to serve us well. With that, I will now pass the call to Gary to review the overall credit performance, Gary.
Speaker Change: that
Gary Guerrieri: Thank you, Vincent, and good morning, everyone. We ended the quarter with our asset quality metrics remaining at stable levels.
Gary Guerrieri: Harold Delink, which he finished the quarter up slightly at 79 basis points, or 15 deaths from the prior quarter, with NPL's in Oreo ending at 39 basis points up six bits.
Gary Guerrieri: Let charge us total 25 basis points and 17 basis points on a year-to-date basis reflecting solid performance in the current economic environment.
Gary Guerrieri: British size loans were down 22 basis points on their link for their basis. Reflecting improvement across the portfolio.
Gary Guerrieri: Federal funded provision expense for the quarter stood at 22.9 million and covered charge.
Gary Guerrieri: Our ending funded reserve stands at $420 million, and increase of $1.4 million, ending at $1.25% of one basis point from the power cooler.
Gary Guerrieri: When including acquired unamortized loan discounts, all reserves stands at 1.34% and our MPL coverage position remains strong at 352% inclusive of the discounts.
Gary Guerrieri: The non-owner CRE portfolio credit measures continue to remain at satisfactory levels with the point of respect to the world.
Gary Guerrieri: The early stage of the link with the increase was primarily related to several performing credits that had matured and were in documentation.
Gary Guerrieri: In Numper of which were renewed in the normal course of business after quarter-end and are now currently.
Gary Guerrieri: The MPL increase was driven by one credit that was placed on Mom and Cool status.
Gary Guerrieri: We remain committed to our strategy of proactively managing and reducing the non-RCRE exposure as reflected on page 11 of the earnings one day.
Gary Guerrieri: On a monthly basis, we will view upcoming and previously resolved securities, largest exposures, and market conditions for the various properties that it's across our footprint, and we have communicated in the past.
Speaker Change: As Vincent mentioned, we believe our proactive approach to credit risk management allows us to quickly engage our experienced special assets team when necessary.
Speaker Change: Working with our customers to minimize any potential losses.
Speaker Change: On a quarterly basis, we perform targeted reviews of various portfolios, along with a full portfolio stress test.
Speaker Change: or stress testing results for this quarter have once again shown lower net charge-offs and stable provision compared to the prior quarters results with our current ACL covering approximately 90% of our projected charge-offs in a severe economic downturn.
Speaker Change: Again, confirming that our well-balanced lung portfolio enables us to withstand various stressed economics in their reach.
Speaker Change: In closing, our credit metrics end of the corner at solid levels, and our love and portfolio continues to remain stable.
Speaker Change: We continue to invest in credit risk management systems and staff that align with our consistent underwriting and core credit for loss of food.
Speaker Change: Our tenured leadership strives to maintain experienced banking teams to enable the company to attain prudent lung, while proactively managing credit this through various economic cycles.
Speaker Change: I will now turn the call over to Vince Calabrese, our chief financial officer for Asra March.
Vince Calabrese: Thanks, Gary. Good morning. Today, I will focus on the third quarter's financial results, including details on the indirect auto-one sale, walk through our guidance for the fourth quarter.
Vince Calabrese: 3rd quarter operating net income total 122 million, 34 cents per share.
Vince Calabrese: When excluding me, 11.6 million dollar loss on the indirect auto loan sale, and $3.7 million software impairment.
Vince Calabrese: 431 billion of forming lower yield and indirect auto loans for solve as part of our ongoing balance sheet management strategies.
Vince Calabrese: Most help, positively impacted, is the one to deposit ratio by approximately 120 basis points.
Vince Calabrese: and the CGT1 Capital Ratio by approximately 10-based points.
Vince Calabrese: Excluin the loan sale, total loans and leases increased 391.4 million or 1.2% linked quarter, will appear at a balanced 33.7 billion.
Vince Calabrese: The two-mile-long growth of 299 million, excluding the Lone Cell, was led by residential mortgage
Vince Calabrese: This volume to remain elevated, given the pullback and mortgage rates during this third quarter.
Vince Calabrese: Commercial Lones releases through 93 million linked quarter in line with our expectations given the significant level, commercial loan closets in the second quarter and reflective of lower revolver balance.
Vince Calabrese: Total deposits ended September at 36.8 billion, a robust increase at 1.8 billion or 5% linked quarter, benefiting from our successful deposit initiatives, to demonstrate the value of our granular deposit base across a very attractive geographic footprint.
Vince Calabrese: Third-quarter deposit gross is led by a $1.3 billion increase in the interest-faring demand deposits.
Vince Calabrese: and $780 million increase in time deposits.
Vince Calabrese: The mix of non-experying deposits to total deposits total 27% at quarter-end, compared to 29% last quarter, reflecting the strong, introspective deposit growth, and non-experying deposits balance is remaining fairly stable around 10 billion.
Vince Calabrese: Last quarter, I discussed our goal to reduce our loan to the positive ratio, organically through slower loan growth and the positive seasonality. Alongside several loan and the positive initiatives our team has implemented.
Vince Calabrese: The success of our ongoing balance sheet management and deposit gathering initiatives led to a loan to deposit ratio of 91.7% to 10.30%.
Vince Calabrese: Nearly a 5 percentage point improvement from 96.5% at June 3rd.
Vince Calabrese: We expect the launch of Plaza Ratio to be relatively stable in the fourth quarter.
Vince Calabrese: as deposit growth continues to be a strategic focus.
Vince Calabrese: That if you think of total 323.3 million and increase of 7.4 million or 2.4% in the prior quarter, are merely due to earning asset yields increasing 8-based points to buy 51 higher loan balances.
Vince Calabrese: As well as a favorable mix-ships and interest-paring liabilities, its total borrowing decreased 1.6 billion for 28% linked to border.
Vince Calabrese: This was partially offset by the cost of interest-faring deposits, increasing 15 basis points to 308.
Vince Calabrese: Continued growth in higher yielding deposit product balances.
Vince Calabrese: The third quarter is resulting net interest margin with 308 stable with the second quarter margin.
Vince Calabrese: This has been the Dan Raising Interest in March of 22. Our total cumulative spot to positive data equal 40% and August 31st of 2024.
Vince Calabrese: Outperforming our peers through the rate height and cycle.
Vince Calabrese: We continue to manage our balance sheet towards a more neutral position as interest rates are lowered.
Vince Calabrese: This depends the decision to reduce the federal funds rate by 50-based points in September. We have strategically lowered the deposit pricing on several deposit products.
Vince Calabrese: I'm including our current TV and my market emotional offerings.
Vince Calabrese: At corner end, we have nearly $7 billion of non-maternity deposits that are currently priced at or above 4.25%.
Vince Calabrese: and a $7.7 billion CD portfolio with a nine-month duration, a $2.9 billion maturing in the fourth quarter of 2024, and a weighted average rate of 4.75%.
Vince Calabrese: Additionally, we have 2.8 billion of short-term or floating-rate borrowings with an average rate of 5.15% and around 1 billion of swaps that mature beginning in January of 25 was raised between 75 and 100-based swaps.
Speaker Change: Cardiac's Advantage to St. Cum in expense, not an interest income reach all time high of $89.7 million, a 2% increase from the prior quarter.
Speaker Change: Capital Markets income increased 1.1 million with broad-based contributions from syndications at Capital Markets customer swap activity and international banking.
Speaker Change: Mortgage banking operations income decreased 1.4 million from the strong levels in the prior quarter, given by net MSR impairment of 2.8 million in the third quarter of 2024, due to accelerating pre-payment speed assumptions given and recent decline in mortgage rates.
Speaker Change: Offset an increase in scalable production lines.
Speaker Change: Holy income increased 3.1 million reflecting higher life insurance claims.
Speaker Change: Operating non-insured expense total 234.2 million and 8.4 million increase from the prior quarter after adjusting for the significant items.
Speaker Change: The largest driver for operating expense was a $5.1 million increase in salaries and 40 benefits.
Speaker Change: Due to production related variable compensation and lower salary deferrals, even reduced on-balance sheet mortgage production.
Speaker Change: As well as strategic hiring associated with our focus to pro-market share and continue investments in our risk management infrastructure.
Speaker Change: Marketing expense increased 2 million tied to the timing of opportunistic marketing campaigns for successful deposit initiatives.
Speaker Change: We continue to manage our expense space in the discipline manner, and we prepare our 2025 budget. We are working on a number of cost-aving initiatives to bring revenue and expense growth into better balance.
Speaker Change: For some of the environmental expense growths tied to revenue growth, efficiency ratio remains at a peer reading level of 55.2% of the third quarter upside-leaf from 54.4% by quarter.
Speaker Change: FNB's Capital Levels reached all-time highs with a tangible common equity ratio at 8.2%.
Speaker Change: and TET1 ratio at 10.4% providing flexibility to the point capital increase shareholders value.
Speaker Change: On a year over year basis, tangible book value for common share increased to $1.31, for $15 to $10.33. Demonstrating our commitment to internal capital generation.
Speaker Change: Let's now look to the guidance for the fourth quarter of 2024.
Speaker Change: Moments are expected to grow mid-cylinder digits on a four-year basis, inclusive of the long-sale.
Speaker Change: Total projected deposit balances are expected to grow missing of digits on a year-of-year basis, up from the previous specification of low single digits.
Speaker Change: Our projected fourth quarter in an interesting film is expected to be between 300 to 10 to 320 million. It's only a 25-based point rate cut in November, and another 25-based point rate cut in December.
Speaker Change: Given the continued strength of our non-interest income generation, the fourth quarter expectation is between 85 and 90 million.
Speaker Change: We anticipate fourth quarter, not interested to express to be lower than the third quarter level, they're adding to a range of 225 to 235 million.
Speaker Change: Force Quarter Provision is expected to be between 20 and 30 million, headed on that long growth and charge our activity.
Speaker Change: Lastly, the full year effective tax rate should be between 21 and 22%, which is not as some any investment tax credit activity that may occur.
Speaker Change: As we have previously mentioned, renewable energy financing transactions, a part of our leasing company business model, with deals and various stages and sizes in the pipeline, with uncertainty on one of the recognition that the Investent Tax Credit will occur.
Speaker Change: With that, I will turn it all back to Vincent.
Vince Delie: Thank you, Vince.
Vince: At the base success includes the deep relationships we build within our communities.
Vincent Calabrese: On behalf of FMB, I want to offer our support to those impacted by our tank, the lean, and milking, including our fellow team members, customers and neighbors.
Vincent Calabrese: FMB continues to work with partners in the effect of the area to support recovery in the only in the coming days, weeks and months.
Vincent Calabrese: We encourage our customers who are directly impacted by the pertains to reach out if they require assistance.
Vincent Calabrese: At them be strong reputation as evident in the top deposit share we fold in markets throughout our footprint.
Vincent Calabrese: We've even done our penetration as we grew or maintained deposits in nearly 90% of our MSAs over the past year. With F&B now ranking in the top five and nearly 50% of the MSAs we operate in across seven states.
Vincent Calabrese: Our performance, once again, garnered recognition with additional national and regional awards this for our workplace culture, diversity, inclusion, and client experience. Notably, we received global recognition as one of Times World's Best Companies.
Vincent Calabrese: Newsweek's designation is one of America's most admired workplaces.
Vincent Calabrese: and Global Finance Magazine's best bank for small and medium sized enterprises in the middle of the name.
Vincent Calabrese: Our performance also conveys the quality of our workforce.
Vincent Calabrese: We focus on hiring and retaining the most talented and experienced individual.
Vincent Calabrese: Our investment in our workforce enables us to scale effectively.
Vincent Calabrese: In fact, 90% of our senior management team has larger institution and we're public accounting experience and bring a wealth of knowledge to our risk management, operation, and revenue generating areas.
Vincent Calabrese: As I have often stated on these calls, the high caliber of armed police translates directly to stakeholder value.
Vincent Calabrese: Epibi's successful navigation through various economic cycles is directly squirrels to our diverse and experienced team.
Vincent Calabrese: Their ability to effectively grow revenue, mitigate risk, optimize our balance sheet, and execute on our proven strategies, results in our ongoing success.
Vincent Calabrese: I thank our teams for their dedication and our shareholders for their support. Thank you and we will now open the call for questions.
Speaker Change: We will now begin the question and answer session.
Speaker Change: To ask a question you may press star than one on your telephone keypad. If you're using a speaker phone, please pick up your handset before pressing the keys.
Speaker Change: If at any time your question has been addressed and you would like to withdraw your question, please press star then too. At this time, we will pause momentarily to assemble our roster.
Speaker Change: The first question comes from Frank Schrolde with Piper Sandler. Please go ahead.
Speaker Change: Thanks for the morning.
Speaker Change: Um, you know.
Frank Schrolde: Obviously, always a good time to be bringing in court deposits, but could you just talk about the average rate you're seeing on these inflows?
Speaker Change: Vincent mentioned, you know, moving towards a more neutral and just ray position. Wouldn't all of this grow from the positive side work against that a bit, at least in the near term?
Speaker Change: We say a couple of things, you know, as we said last quarter.
Speaker Change: You don't have to go through your work, your borrowers.
Speaker Change: and I put on this very strong home growth that we had in the second quarter, so we go with to bring it meaningful to the positive. And we did. I mean, we brought in a billion dollars a new money, and total was a billion eight, a billion dollars a new money around four and a quarter, that rate. And nature of those deposits are very short-term, combination of money market and.
Speaker Change: Jerry Short Term, CDs, five months CDs. So, you know, we had a lot of flexibility, it's even lower to, you know, to reduce the rates. I'm a liability to the bottom. I think it positions us well from a loss of acceleration, you know, we were in the 96th.
Speaker Change: You know, our goal was to bring it down and we brought it down beautifully to 91.7%.
Speaker Change: And if you look at kind of the balance sheet as a whole, as we sit here at the end of the quarter, and we have 11 billion dollars of liabilities that are repricable today, subject to market forces of course, but 11 billion. And we have another 5.4 billion in CDs of mature in the next six months.
Speaker Change: 2.9 of that, and the next three months at a 475 rate, and then we have a billion in cash flows from the investment portfolio that rolls off around 2.91 and they were investing between 4.25 and 4.50. So there's a lot of levers, obviously there, that help us replace.
Speaker Change: with the bed moving 50 basis points in September, you know, kind of bigger than, and maybe always expected, you know, that has an impact on our own portfolio over a three-month period. So, you know, we'll be kind of playing some cash up there, but we have the levers here.
Speaker Change: Dickson kind of offset that and our team is very well positioned and we've already started to bring interest rates down on a reblob rate sound 50 basis points on our.
Speaker Change: that CD offer and provided a different deposit class categories. We've started to bring rates down and kind of ready to continue to bring rates down. So I started a lot there, but you know, we have, we have the levers position well to be forward so that we can.
Speaker Change: and Jennifer Jusper's Rachel Bell.
Speaker Change: Okay, and then, you know, your, I think F&B was a bank that was pretty conservative in your, um...
Speaker Change: Expectations of the positive data on the way down, at least in the first few rate cuts. Just wondering now that we've seen that 50-based orange you mentioned, you've already cut some the positive rates. Any updated thoughts on what a sort of, um,
Speaker Change: or early deposit data that could look like, you know, for these first few cuts through the end of the year.
Speaker Change: Yeah, we say, our guidance has obviously the 50 plus two more 25 basis points cuts on a vacant into that. You know, what our guidance implies is like a 15% beta by the end of this year.
Speaker Change: I like to think we can do better than that. We're all, everybody's geared up to be able to adjust prices. A lot of our competitors have been lower in rates so that there's an ability to do that. So kind of what's baked in is 15%. And our goal would be to do better than that by the end of the year. [inaudible]
Speaker Change: Okay
Speaker Change: and then just lastly on the indirect auto sale, you know, just kind of thoughts on additional opportunities on the balance sheet here was, was any of this, you know, kind of, moving the credit box a little bit or, and, you know, at this point, you're looking to just accept this business given the, given the yield.
Speaker Change: We're not looking to exit the business. We saw an opportunity for us to move some low yielding assets off the balance sheet was not
Speaker Change: was more about managing the overall balance sheet and particularly.
Speaker Change: In particular, our London deposit ratio, we looked at it, you know, basically with our deposit, with our ability to generate deposits and coupled with the sale of those loans. You know, we were able to bring it down fairly substantially. And, you know, there were some questions in the last earnings call about our ability to do that, and our ability to grow deposits in this competitive environment. I think we've proved that we're capable of doing those two things.
Speaker Change: I would say that, you know, in the normal course of business and that indirect auto portfolio there will be loan sales from time to time. We've always used to this kind of a way to manage the balance sheet and manage our loan deposit ratio. You know, we've done it a number of times, but we retain the service rate, so we're still maintaining the clients.
Speaker Change: You know what we do use.
Speaker Change: The information on those clients to try to cross sell other services to them.
Speaker Change: So, you know, that works pretty well for us.
Speaker Change: But it's not, it was not accredited, but...
Speaker Change: It's a very short-term asset. I mean, two-year life to it. So from an income statement standpoint, given the borrowers we paid off, we really know in fact, I'm not going to go over business. And it added capital.
Speaker Change: He won ratio, we picked up 10 basis points, and just that alone added a hundred are reduced to one's positive ratio by a hundred twenty basis point.
Speaker Change: and Blackhead.
Speaker Change: and this is attractive transaction and you know it helps with that whole one.
Speaker Change: Sanctuary.
Speaker Change: puts us in a much better position to support our clients. I think loan demand will pick up. It's just based on the earnings cost that I've listened to and read about. It seems that credit is more benign than folks would have thought. And the economic environment is a little better. I think there's a lot of weight in C right now. Once we get past the election, I do think your respective who wins will be demand.
Speaker Change: and the CNI book in particular, so we want to be positioned to take advantage of that.
Speaker Change: and I think Frank, the other thing is, you know, on display here.
Speaker Change: You know, over the course of the past year and during this last quarter.
Speaker Change: A great financial institution is able to fund themselves and are able to generate deposit balances.
Speaker Change: We've talked about our business model, we've talked about leveraging data analytics.
Speaker Change: and you know how we're positioned in the markets and the prominence that we have in the markets are shared.
Speaker Change: and the markets. There's been a lot of talk among some of the larger bank CEOs about the inability for mid-sized and regional banks to gain share. We've proven that wrong.
Speaker Change: So our business model works. We've grown share. If you look at Pittsburgh, I mentioned it.
Speaker Change: You know, we passed up the legacy, you know, Mel and Bank franchise here with the positive here. So, you know, just in the last turn and that's those are real customer deposits. So, you know, we're we're doing very well in regard to acquiring names. We're doing well at becoming the primary client, which is why our demand deposit balances have been sustained at around $10 billion. You know, others have seen migration. [inaudible]
Speaker Change: and a much faster pace, all the things we've said that are embedded in our business model that proved out in this border.
Speaker Change: So I just want to emphasize that, and you know, I know we've said it over and over again, I think the group is in the results.
Speaker Change: Great, I appreciate all the color, thank you.
Speaker Change: Thank you very much. Thank you very much.
Speaker Change: The next question comes from Russell Gunther with Stevens. Please go ahead.
Russell Gunther: Hey, good morning, guys. I was hoping to start out on.
Speaker Change: Sure. I mean, expenses on an operating basis for the quarters, you know, came in at 234. The Guide Interange week provided in July was with 220 to 230. You know, the key drivers to that work, up with things, two million dollar increase in marketing, you know, which we decided to do to grow the billionaire deposits. So that was something that we obviously was a strategic decision to spend some more money on marketing, bring into the position.
Speaker Change: and worked very well and then $5 million increase.
Speaker Change: in top benefits.
Speaker Change: That was given by a few things. Higher production related in the Senate's success we've been having on the non-ifstinkham side. There's conditions related to that, the positive raising and the being come.
Speaker Change: Now we mentioned in the release opportunistically hiring some producers and some key markets for us.
Speaker Change: and investing in risk management staff just to support our continued growth. And then just for fun, we had an extra work day at third quarter of another million dollars.
Speaker Change: So those were kind of the drivers, but kind of to get us.
Speaker Change: of a little bit above the range, but if you look at the efficiency ratio.
Speaker Change: You know, we continue to post top four towers all from the last quarter, we were 54.4, which we were the third best among our 21 bank peer group. You know, this quarter is 55.2 and I think we'll...
Speaker Change: and Farewell again. And then as you go ahead to the fourth quarter, so we're using a range of 225 to 235, you know, 5 million from the fire guidance, but and it's a few things, continued variable compensation, the support of the strong non-interesting from, you know, seasonally slower loan production, it affects the 591 cost of boroughs would be lower. FDIC insurance levels kind of staying at a higher level and the impact of the hiring, but you step back overall, the absolute level in fourth quarter, we expected to be down from the third quarter, which is key.
Speaker Change: Yeah. Okay. That's a great color. Vincent, I appreciate it. And then maybe just looking forward to taking that conversation forward, you guys remarked about bringing revenue and expense growth into balance. So as we move to 25, it's positive operating leverage, something you guys expect to be able to deliver or do we really need to see a fetish cycle and deposit cost catch up to drive the efficiency more meaningfully lower and deliver positive operating leverage for 25.
Speaker Change: Now, I would say obviously getting to a more part of the spoke yield curve later next year would make a difference. So, I think having it for some portion of 25 versus 24 is definitely achievable. But I think having that yield curve will be kind of a key driver to getting us better. Yeah, having an appropriate slope in the curve drives, if you look at our balance sheet and how we're positioned, we perform extraordinarily well in that environment. So, if you look at our balance sheet and how we're going to do that, we're going to do that. We're going to do that. We're going to do that. We're going to do that.
Speaker Change: That is key to our success, obviously, and that we're no different than other events.
Speaker Change: If you look, that's the ultimate scenario for us in terms of profitability, so hopefully.
Speaker Change: You know, we see some adjustments on the shoreline, okay.
Speaker Change: I guess this will help with the curve in the appropriate position for us to prevent it.
Speaker Change: Yeah, and that'll drive me into a higher net interest income and net interest margin as you move forward and get to that point.
Speaker Change: Got it. Okay. Understood. And then just last one for me, you guys reiterated a mid-single digit growth guide for the year. You know, as you guys look forward, is there any optimism for being able to accelerate that pace? Or are we should be thinking about headwinds like paydowns or potential additional portfolio exits that would keep you guys in a mid-single digit quit?
Speaker Change: I don't think we're in a position right now. We haven't given guidance for next year. But I would look back historically. I think we've done a very good job over a long period of time. I've been here for almost 14 years.
Speaker Change: in the state, 19 years overall. I think we've grown loans and deposits just about every year. I've been there, maybe pandemic, maybe the time when loans didn't grow one quarter, but you know, we've put up pretty consistent organic loan growth. You know, it's in the mid to high single digits, your respective size of the balance sheet over time. And you know, as we've grown the balance sheet, we shifted our strategy to move into markets that would provide us with opportunities, right, so you could sustain our growth trajectory, your respective size of the balance.
Speaker Change: So I think that's played out over time, so I can't say I'm optimistic because there's so much uncertainty about next year, but I do believe that we're in the best position of anyone to generate that long road once the market comes back.
Speaker Change: You know, demand picks up.
Speaker Change: [inaudible] in a way thats a growth scenario,
Speaker Change: let's put it that way.
Speaker Change: Yep, no, understood. Guys, thank you very much for taking my question.
Speaker Change: Thank you.
Speaker Change: The next question comes from teamwork, Brazilians with Wells Fargo. Please go ahead.
Speaker Change: Good morning. Circle in back on the deposit acquisition strategy, just thinking at the new money cost this quarter at 425, I mean that's still deluded to the overall rate. I'm just wondering as we look into 4 to you and I had just the composition of the deposit growth and you know the 50 basis point reduction in the CDs. Is that off of that 425 level or is new money acquisition still north of 4% here?
Speaker Change: Yeah, I don't think we're going to get into specific strategies around how we price so the parking patterns don't.
Speaker Change: Listen man, but I will tell you that you've got to look at it in total while that is the new money rate coming in that's basically them.
Speaker Change: and many more. Such a money market, if I'm a doughy, so we have our CDs in the money market that are driving that. There is a component of demand that posses, you know, there's runoff, now our shift is mixed. But we are bringing in, if I'm already client, so we do have operating accounts as well, that have the pre-balances.
Speaker Change: So, you know, I would expect us to be able to, you know, benefit as we move along. And then I also would note, you know, based on your comment that it's not a created. It actually, you know, we replaced short-term borrowings that were at a much higher rate, they were 5% so it actually was beneficial.
Speaker Change: So the way I look at it, you know Scott and I go back important depending on the industry environment, Scott's our treasure.
Speaker Change: I'd rather have clients, new clients than rely on wholesale funding or some other source.
Speaker Change: and so, funding the institutional and natures.
Speaker Change: So this train was actually a very good train for our shareholders.
Speaker Change: I'm bringing along to deposit ratio down as much as it did gives us the flexibility to be able to actively repress the rest of the portfolio.
Speaker Change: and I'm going to say it again, because in the context of the competitive environment we're in, we are not outside from a pricing standpoint relative to our competitors. So our business model is working and we are driving share in the market in a way that is accreted to our new emerging and our profitability.
Speaker Change: So, and over time, you know, having new clients, we have the flexibility to price according to changes in the market, so.
Speaker Change: You know, it ultimately leads to higher profitability on a per client, as well. Anyway, that's...
Speaker Change: That's the strategy behind what we accomplished. Yeah, we just had one last thing too, is we have a meaningful pipeline on the commercial side of additional deposit accounts that we're going after pursuing.
Speaker Change: and Pat Gray's success in the past quarter and there's still a very meaningful amount that we're going after to bring in your relationships.
Speaker Change: Okay, thank you, that's that's great color there. And then just maybe again, circling back to the auto sale or indirect auto loan sales. Just any kind of underlying characteristics of the loan sold, I guess, how did you choose which portions of that portfolio or divested disorder?
Speaker Change: I'm like Gary answer that question because that action reports up through Gary.
Gary Guerrieri: Yeah, tomorrow it is just a cross-the-board sample of current transactions.
Gary Guerrieri: In the portfolio, that portfolio of did not include any account that was passed due. So it was high-fikers, high quality paper with an average line for two years.
Speaker Change: Okay, great. And then just lastly, for me, there's been some growing speculation of Mid-Atlantic M&A, your name kind of into the mix, just to look to get an update as to what your thoughts are around capital deployment going forward and where M&A might fit into that mix.
Speaker Change: We haven't changed our position, we've indicated in the past that we are not looking to do a tangible work that I need. In a material way, I don't think that, you know...
Speaker Change: I don't want to comment on specific transactions, but...
Speaker Change: We're still focused on doing deals in market, smaller and size, if that was even available to us. We're being opportunistic in terms of what's out there. So in market acquisitions with cost saves are on the list.
Speaker Change: The deals would have to be immediately agreed to earnings.
Speaker Change: with limited tangible book value in Daudership, as I've said, you know, and then the return has to be well above our cost of capital.
Speaker Change: So, you know, I don't think we deviated at all and there are a lot of run links out there but, you know, we're going to stay true to our strategy.
Speaker Change: I think it's, you know, we've done well over the last few years, focusing on tangible work value, appreciation, and returns, and, you know, that's going to be our focus system.
Speaker Change: Great, thanks for all of our call over to this trip.
Speaker Change: Yeah, I think I used it in the past one.
Speaker Change: The next question comes from Daniel to Mayo with Raymond James, please go ahead.
Speaker Change: Thank you, the morning guys.
Speaker Change: Um, question.
Speaker Change: Fun!
Speaker Change: And maybe just starting on the...
Speaker Change: 4Q guidance for an eye for an edge think I'm just some clarification.
Speaker Change: Trying to get a sense for what the margin compression could look like to fit into your guidance. Is there on the balance sheet side? Is there something that was in the third quarter in terms of the pace of growth that would impact the average balance is in the fourth quarter? Is that something where you could see that number come down? Just trying to think about right-sizing how to get to the margin number.
Speaker Change: I think it goes back to what I said earlier, Janie, about the implied data that's in there. So the Fed moved 50 in September, and you only had a partial month impact of that. So you have the whole quarter's impact of that, and then there's two more 25. So I think there's some conservatism in our NII guys, but we're using a 15% data.
Speaker Change: by the end of the year, we can be better than that than their subsides. We don't have any other polio access or anything like that, T-Dop.
Speaker Change: here today, so just be kind of normal activity. But fourth quarter, like Vincent earlier, is there's some seasonality to some slower activity, and then you have the uncertainty with the election and everything. So, you know, there's still some level, our mid single digit guidance on the long side is still the same guidance. So there's nothing unusual. It's just us managing will rage down between now and the end of the year. [inaudible]
Speaker Change: Okay, understood. So the average earning assets likely increase in the fourth quarter, and it's a margin issue in the fourth quarter before we start to see that, which stable assets will go in next year.
Speaker Change: Differ.
Speaker Change: And I would just say that I would characterize the margin as flat-ish, okay?
Speaker Change: if it's down in South of the two-based points, that a lot. So just a starting comment.
Speaker Change: Okay, all right, that's awful, thanks. And then maybe one for Gary on the kind of the credit environment, specifically just net charge off environment. Obviously you've got volatility a little bit higher in the third quarter, but just interested in your current thoughts around, you know, how you think about what might be a good run rate for net charge for the bank as you think about the next year, the near term.
Speaker Change: You know, then I think that, you know, we're very, you know...
Speaker Change: aggressive from a risk management standpoint and staying ahead of our clients with information for all.
Speaker Change: and understanding their position in the risks in the portfolio.
Speaker Change: Williams, Williams.
Speaker Change: You need to perform exceptionally well from a risk management and a chart off of active, and all the credit metrics have been at or near with their low levels for quite some time now.
Speaker Change: You know, this quarter we were 25 bits on a year-to-date basis, 17 basis points.
Speaker Change: which is, you know, really, really strong result in this, you know, environment which continues to be a bit uncertain. And as we all know, the CRD environment is truly continuing to see some stress here and now. So, you know, I would expect continued performance as we have.
Speaker Change: Put up over the last number of years. And, you know, is it going to end up a touch? I mean, it may normalize, but I feel very good about, you know, where we sit, and as we look ahead, continuing to do outperform, you know, from the industry's perspective. You know, Gary and his team have done a fantastic job of making sure that the risk ratings are going. [inaudible]
Speaker Change: So he mentioned gathering information, I think that where we stand today is, you know, where we're going to stand tomorrow, basically, with the exception of any major ships and the global economic environment.
Speaker Change: So, you know, we're not going to be sitting here with surprises. Let's put it that way. We do a pretty thorough job of underwriting and assessing risk ratings on a frequent basis, stress testing and evaluating risk. So, you know, what you see is what you get. And I think that's that's that's been true for a very long time for us and Gary has done a fantastic job. So, [inaudible]
Speaker Change: at keeping us there.
Speaker Change: All right, Terence, thank you very much for all that color, smells.
Speaker Change: All right, thank you next.
Speaker Change: The next question comes from Kelly Mata with KBW. Please go ahead.
Kelly Mata: Good morning. Thank you so much for the question. I hate to beat a dead horse. I just want to button up a few more things on the margin. On the prepared commentary about the 15% beta by the end of the year, just a point of clarification, wondering if that's interesting or total deposit beta one and then two, I know you haven't done the budget for next year, but just from a high level, wondering how you anticipate deposit data on the way down more broadly as we look ahead past this next quarter.
Speaker Change: Yeah, the 15 Kelly is total deposit, data by the end of the year, and you know, we've talked about historically kind of a mid 30s level on the down, kind of, and we have some.
Speaker Change: which is what we've looked at from the past cycle, so I'm kind of what's in our head, so I don't know by the end of next year it could be around 30, I would say kind of as a level total, again, total is the positive data, you know by the end of next year is kind of what's what can our heads at this point.
Speaker Change: Audit, that's very helpful. And then on the loan side of things, just wondering what you're seeing in your markets in terms of how spreads might be holding up for commercial loans. And if you're seeing any differences between how that's performing in the Carolina market versus some of your more like a seed mid-Atlantic markets.
Speaker Change: It's surprisingly consistent across the board and you would expect it to be different to the regionally.
Speaker Change: is your international surprise, but it has been fairly consistent. I think with capital exiting the series, face, there's a little more pricing, let's ability in that bucket. If you find a high quality series, opportunity you're able to get a little more margin out of it today. That's a function of thanks, pulling back, and financial funds.
Speaker Change: and that as well. So, you know, I would say there's not a lot of demand from a CNI perspective, kind of across board right now, everything is on fold.
Speaker Change: I would expect that to change.
Speaker Change: As we move into next year, I don't have a crystal ball, but you know, my gut and 30 years of experience tells me there's quite a bit being held back. So I would suspect that, you know, moving into next year, we'll be able to see, you know, a higher level of demand, particularly for the CNI.
Speaker Change: I expect that to happen, and then on the consumer side, you know, consumer, on that when he directing storm has been for nine.
Speaker Change: I would expect that to pick up a little bit as well and our mortgage company has done a remarkable job of gaining share pretty much across the board.
Speaker Change: So, you know, we would continue to, I hope, continue to succeed there. I don't know if that answers your question, but it's pretty much, you know, the margins are the same based upon the risk profile, pretty much across the board.
Speaker Change: That's interesting. Thank you. That's very helpful. And then I'll meet Vincent again. I know it's too early to start talking about next year, but one thing you have to talk about is the double carry if the...
Speaker Change: Wright expense with the billed out of the new headquarters, just wondering the timing of that if that's still kind of on track to give us about 7 million bucks, come out of next year as you move over to the new space.
Speaker Change: Yeah, I don't know that it's actually $7 million, but the building's on track, we're scheduled to move in on November 25th, thank you.
Speaker Change: and today, I think we picked the worst possible, you know, thanksgiving to you, I don't know what to do this, but you know, that's when we'll all be moving over there, you know, what have nearly 800 employees moving into one location? You know, we're in seven buildings here on the north side of Pittsburgh.
Speaker Change: We're scattered all of us. You know, I think we'll eat out efficiency just by being together in productivity. You know, our people are in the office pretty much. So I think that will help us immensely.
Speaker Change: You know that rent that we talked about, you know that's basically because we had a year of free rent, right? So that gets built baked into.
Speaker Change: The total length of the lease gets carried out of the lease, according to Gap, accounting, and we still have rent expense in this building. So that's why that's occurring that you've forgotten. So I would expect that to come back.
Speaker Change: and a portion of that 7 million set the total number of portion of the pool will be coming back.
Speaker Change: Next year. Now there might be demand for additional space that's going to be hard to see, you know, it's good.
Speaker Change: can't lay that out apples to apples, but theoretically, we should be receiving a benefit from a gap accounting perspective. The other rents non-cash is...
Speaker Change: is not an opening round for me.
Speaker Change: That's helpful. I appreciate all the color I'll step back.
Speaker Change: Thank you. Thank you.
Speaker Change: The next question comes from Manuel Navas with the A-Davits in the company.
Speaker Change: Please go ahead.
Speaker Change: Thank you for watching!
Speaker Change: Excusing Mr. Navas, your line is open.
Speaker Change: Okay, we'll go to the next questioner, then, the next questioner is Brian Martin with Please go ahead.
Speaker Change: Take a morning, guys.
Speaker Change: Brian, hey Brian. Hey, just one question, you know, just on the going back to the deposits for a minute of Vincent in the success of this quarter, you know, the DDA did come down a bit and I know you guys have talked about, you know, kind of being the primary and, you know,
Speaker Change: Thank you for your customers and also the new commercial Vince, you talked about the, see, opportunities that I mean.
Speaker Change: Does that, I guess, is your expectation that that stabilization in that level is still, you know, kind of, way to think about, you know, the DDAs, you kind of look at, you know, the next couple quarters here, that 27% level or do you see a drifting lower for more than that today?
Speaker Change: The mixed move down, obviously, we're in a period where you see some outflows in the demand deposit category plus we've gone on a lot, I'm going to go on a side. Yeah, we're going to ship it. You know, we've been running around $10 billion pretty consistently.
Speaker Change: So, you know, you saw it as rates went up, you know, we were able to maintain that, I believe this rates come down, you know, we should be able to maintain it and grow it.
Speaker Change: Over time. So, you know, I can't speak to the overall, if you look at the total deposit and you look at the man the product is a percentage of the total short, it's going to be smaller. But, you know, that $10 billion and non-intersparing deposits has really been beneficial to us. And if you look at our cost of funds overall in comparison here, you know, we match up pretty well. But that's the main, that's the main reason. So I would say, you know,
Speaker Change: We have opportunities to grow. We're not interested in category because as customers grow and we've brought new clients on, we're able to stand up all the Treasury management services and these balances to pay for services where they're dispersing funds out of operating accounts that we have. We'll have a pick up in the end of the positive over time, but there's still, you know, it's a very difficult environment to maintain demand deposits because anybody that has access balances is looking to get a higher yield. Right.
Speaker Change: Vincent, what's it?
Speaker Change: So this is where we were during the pandemic when everything's supposed to be zero, right?
Speaker Change: in order to go. So, but I think we've done well, and I would expect us to continue.
Speaker Change: to do well in that category.
Speaker Change: I was going to say, Brian , we also saw about a 1% reduction in revolver balances, which also is going to impact DDA balance, moving from the DDA to pay down some debt as customers, being cautious during these times with everything that's going on in the election on top of us, did make some decisions to pay down some revolver balances. So there's a slight impact. Back there as well. Good point to you.
Speaker Change: and I'm just gonna add, you know, we've added a lot of new names Brian too, on the retail side with new house-hosts, new commercial clients that, you know, once we have them, they've opportunity to provide those relationships and that's been a focus over time really that be the full bang for our customers.
Speaker Change: Yeah, gotcha. Okay, I'll make sense. And then just in terms of Vincent, I think he came optimistic, at least on the loan growth next year. It's just nothing immediate, you know, from the first rate cut that we saw, which is like you said a bit more than maybe people thought. Any pickup in, you know, just dialogue with your customers, kind of getting the sense that, you know, there's that optimism for next year on the loan growth side. And then you guys will give more color next quarter. But seems like, you know, a handful of people, you know, other banks have said that first rate cut really did spur some new interest from their customers. And I didn't sound like you were getting that sense yet. Maybe, you know, the election and getting past a few things. No, I...
Speaker Change: I'm not as close to the customers as they used to be, but done interacting with the bankers and talking to some of the things. I'm not seeing that yet.
Speaker Change: To be honest, though, I think.
Speaker Change: It's still kind of let's wait and see, and they're expecting additional cuts, so there may be dialogue.
Speaker Change: You know, they're thinking, hey, I'm going to get a much better opportunity down the road here because
Speaker Change: Everybody's signaling that there will be additional rate cuts, right? So...
Speaker Change: I'm not seeing you know everyone.
Speaker Change: Yeah.
Speaker Change: Leeping forward and saying, I'm going to take advantage of this 50 basis.
Speaker Change: on production night.
Speaker Change: I think you're kind of sitting back and saying, hey, let's see how the election.
Speaker Change: plays out, a lot of things can happen, a selection corporate taxes are on the table, all kinds of things being packed.
Speaker Change: We're going to sit back and say, hey, I want to wait and see what's happening. That's kind of what I'm hearing and seeing. And again, I don't have as much insight as maybe. I don't know, Gary. I would agree with everything that you said. That's kind of the way it feels right at the moment. I would expect, based on, you know, this period where we are here, pretty election, that once we get into 2025 and the middle part of the year, when things start getting quite active, we'll see some stronger demand. And I've been out the last few months, Brian , I mean, I've been in, which has been saying, I've been all over the place.
Speaker Change: You know, I'm around Pennsylvania, so I'm hearing the same thing. I'm not hearing anything different. But again, I don't have the future.
Speaker Change: and your family.
Speaker Change: I'll make it being biased information on them.
Speaker Change: Yeah, and maybe just one on the margin. It sounds like it maybe just been can remind us what the, you know, the immediate, I think you've went through some of the stuff to be prices, but the immediate on the loan side, what we prices, and then it just sounds as though, um, secondarily, the, you know, I guess if you maybe maybe the expectation is a little bit of pressure here on the margin, you know, modest in the fourth quarter, and then, you know, if you are neutral, I guess the expectation is you can, you know, kind of, you know, you keep the margin relatively stable. And then as you get into next year, and if you get the yield per deepening, you get some pickup later in the year, is that just in general, how to think about that.
Speaker Change: I think you set a purpose in line, which is covered with that. But if you're an initial question, you know, slide 15 does a good job laying out with the moon parts. Just to remind everybody that, you know, the 47.5% could see in the chart there of the 33.7 billion that it faces on the round side over three months period.
Speaker Change: and as I mentioned earlier, just look at it.
Speaker Change: You know, the levers that we have, we have 11 billion in liabilities that are reprisable today.
Speaker Change: We have another 5.4 billion in CDs that will turn in the next six months.
Speaker Change: 2.9 in the next three months at a 475 rate.
Speaker Change: and the building in cash flows from the investment portfolio a little bit.
Speaker Change: Coming off at 291 and being invested today, at least we've been born a quarter or four and a half. So that kind of gives you the key moving parts that are there.
Speaker Change: Gotcha. Okay. Yep. And then I think you mentioned, Vincent, somebody mentioned on the call some hiring that you guys had done on the, maybe on the F.N.C., maybe just, you can just point us to what you're doing there and then just one, you know, just modeling questions. Sounds like the F.N.C. on this quarter, the bullies, maybe, you know, a kind of not recurring or, and then, you know, there's also a negative you set on impairment on the on the mortgage that. Okay.
Speaker Change: That kind of neutralizes. There's an MSR impairment at 2.8 million. They all study each other. If you look at them, I'll see you income rises. Yeah, yeah, okay. Okay, and then just the hiring that you've done, I guess there's an area you're focused on. There's a capital market, Vincent, you talked about as far as I think there's some comment about hiring and. [inaudible]
Speaker Change: and just trying to understand where they're... We've had it, folks.
Speaker Change: Replace people in certain markets we've up here.
Speaker Change: With the replacement, you know, we had this one area.
Speaker Change: It's driving a little bit of the increase in the salary expense so we've been able to bring some early challenges people.
Speaker Change: And then, you know, we've been building out our risk management for work.
Speaker Change: You know, we stood up in operating efficiency group for our operations area because we felt that.
Speaker Change: with the changes that are going on with AI and our investment and our data hub. We're going to be able to drive efficiency in operations. So we've hired, we made some changes. There was a press release that was put out, but we brought in some very talented people, some process engineers to help us drive efficiency and improve customer satisfaction and deal with risk in the back office. So while that's not a front end, Iyer that should benefit us over the long haul to scale. I mean, that's that's really what's embedded in the increase in the run rate.
Speaker Change: of expenses, salary expenses, it's not as large as the total amount that we're reporting because is all countries.
Speaker Change: and some of it's...
Speaker Change: Directly related to production, right higher production than those, the main come areas. You know, we're paying off the mission.
Speaker Change: But, you know, I think we're putting ourselves in a pretty good position moving in the next year, both with funding, right? So if there is a pickup in demand, keeping that funding, you know, short, short duration in our strategy so we can reprice down, take advantage of, you know, the changes and interest rates that occur. And then investing in areas that produce revenue and create efficiencies. [inaudible]
Speaker Change: that those are the factors that throw all of our decisions.
Speaker Change: Gotcha. Okay, that should be it for me. I guess from a sensitivity standpoint, are you guy, you're pretty neutral, is that when I heard, I guess it's nothing's changed on sensitivity, where you guys are at today?
Speaker Change: No, I would say, I mean, we're still as attentive, but we're really moving towards neutral. I mean, all the different levers I've talked about behind. But if you looked at our 10Q, it was still shows as sensitivity, but I would say we're more neutral than what the great calculation we're showing.
Russell Gunther: Georgia. Yeah. Okay. Perfect. Thanks for taking my question, guys.
Speaker Change: All right, thanks for your thanks Brian.
Speaker Change: And we have a question from Manuel Navas from G. Davidson.
Speaker Change: Please go ahead.
Manuel Navas: Hey, can you guys hear me now? Yes, we can, please go ahead and watch our film. Hey, so a lot of my questions have been answered, but if you just dial a little bit more into where you're seeing the market sure gained in deposits, what geographies are driving at best and kind of where you expect to continue momentum.
Speaker Change: Yeah, we saw some, early things.
Speaker Change: Carolina is a double digit. You know, I think that's one area where you can have great success. Pittsburgh, we continue to have success. I think because we have such a huge bond to share here. It feeds on itself. I mean, we do not have the scale to be able to compete effectively here and bring you clients on and bigger relationships and that's still happening. [inaudible]
Speaker Change #100: So, you know, that we've done it, been there in the central part of Pennsylvania. We've done extraordinarily well. So we brought in this fight.
Speaker Change #100: And then as you move into the mid-Atlantic region, we've had some success in the markets that we're expanding into, and then also Charleston, South Carolina, South Carolina, North Carolina.
Speaker Change #100: Work. Thank you very much.
Speaker Change #100: and his wife is the result for us.
Speaker Change #101: It's pretty much, I guess, it's pretty much everywhere, right, right?
Speaker Change #101: I think we've done well in the bunch of markets, but I would say the Carolina's and the central part of Pennsylvania's probably weird in charge, right, meant this part.
Speaker Change #102: We had growth in 35 of the 57 MSAs that we operated in from a either increased share or maintained. It was 91% of the MSAs that we're in. So, I think it's very good. So, and then Caroline has had increases in six of the markets that we're in there. So, I was just referring to the increased quarter of quarter. I wasn't referring to that. It's not on the market at the end of the market, it's your day of pick-up.
Speaker Change #102: yeah
Speaker Change #102: but it's pretty consistent, it's pretty similar, it's a more story.
Speaker Change #103: Okay, to shift for a second, if we do get...
Speaker Change #104: Significant Raycuts by Middle next year, what kind of the fee upside you see?
Speaker Change #105: York, you're gaining new relationships in the Carolinas, could that convert quickly to improve more good business, could just kind of talk about that, be upside with lower rates.
Speaker Change #105: Yeah, that's it.
Speaker Change #106: Orger's business really hinges on, you know, for us it hinges on demand because we're a big purchased money.
Speaker Change #106: Lenders, so hopefully there's more housing supply after more people decide to sell.
Speaker Change #106: But I think that will be good. I think the swap income that we get from commercial customers, somebody else asked the question, I think it was Brian . What are you seeing out there? One thing that I can tell you is that the customers that are looking to go to a fixed rate swap, they're watching what's going on and they're not moving that. [inaudible]
Speaker Change #106: because they're hearing repeatedly in the media that there's additional cuts.
Speaker Change #106: Coming, so that's, you know, when you die with them, they say, well, I'm not going to do anything yet.
Speaker Change #106: But, you know, I think that business has an opportunity to grow. I think our syndications business over time will have opportunities because there will be more M&A, particularly in the middle market, and the lower end of the middle market, which 20s.
Speaker Change #106: Faber Blink for us.
Speaker Change #106: We've also expanding several areas we're getting into the advisory business we're building out our public finance capability. So there are things that will need to be generation in 25 that we don't even have today. So I think they won't be gigantic but it will have an impact. Anyway, those are the...
Speaker Change #106: Things were thinking about as we looked forward, and the Decappermarket's path record is.
Speaker Change #106: Yeah, that capital market's obviously has been good. And that should continue, right? Because, you know, in the numbers Gary mentioned online utilization, you know, we looked at the larger clients and really have very few capital markets events, driving reduction and revolver balance, which is why he said Gary said, you know, hey, that's going to stop your demand across its right. Our clients are using their cash balances to pay down that. Moving into this. So, you know, that's what we've seen. And, you know, there's probably a little bit of reset going on within the customer base and their balance sheets, they're preparing themselves too.