Q3 2025 First Financial Bancorp Earnings Call
Speaker #3: Thank you for standing by, and welcome to the First Financial Bancorp Third Quarter 2025 Earnings Conference Call and Webcast. All lines have been placed on mute to prevent any background noise.
Speaker #3: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad.
Speaker #3: If you would like to withdraw your question again, press star one. Thank you. I'd now like to turn the call over to Scott Crawley.
Speaker #3: You may begin .
Speaker #4: Thank you . Rob . Good morning , everyone , and thank you for joining us on today's conference call to discuss First Financial Bancorp third quarter and year to date financial results .
Speaker #4: Participating on today's call will be Archie Brown President and Chief Executive Officer Jamie Anderson , chief Financial officer . And Bill Herrod , chief credit officer .
Speaker #4: Both the press release we issued yesterday and the accompanying slide presentation are available on our website at www. Under the Investor Relations section.
Speaker #4: We'll make reference to the slides contained in the accompanying presentation during today's call . Additionally , please refer to the forward looking statement disclosure contained in the third quarter 2020 earnings release , as well as our SEC filings for a full discussion of the company's risk factors .
Speaker #4: The information we will provide today is accurate as of September 30, 2025, and we will not be updating any forward-looking statements to reflect facts or circumstances after this call.
Speaker #4: I'll now turn it over to Archie Brown . Thanks , Scott . Good morning everyone , and thank you for joining us on today's call .
Speaker #4: Yesterday afternoon, we announced our financial results for the third quarter. The third quarter of 2025 was another outstanding quarter for First Financial.
Speaker #4: Adjusted net income was $72.6 million and adjusted earnings per share were $0.76 , which resulted in an adjusted return on assets of 1.55% and an adjusted return on tangible common equity of 19.3% .
Speaker #4: We achieved record revenue in the third quarter , driven by a robust net interest margin and record non-interest income . We have successfully maintained asset yields while moderating our funding costs , which combined to result in an industry leading net interest margin .
Speaker #4: In addition, our diverse income streams remained a positive differentiator for us, with our adjusted non-interest income representing 31% of total net revenue for the quarter.
Speaker #4: Expenses continued to be well managed , excluding incentives tied to strong performance and the record fee income . Total non-interest expenses were flat compared to the second quarter .
Speaker #4: Our workforce efficiency efforts continued during the period, and to date, we have successfully reduced our full-time equivalents by approximately 200, or 9%, since we began the initiative.
Speaker #4: Two years ago, we expected further efficiencies subsequent to the integration of our pending acquisitions. Loan balances declined modestly during the quarter, falling short of our expectations.
Speaker #4: Lower production in our specialty businesses , along with a greater percentage of construction originations , which fund over time drove the modest decline .
Speaker #4: Loan pipelines are very healthy as we enter the fourth quarter, and we expect to return to mid-single-digit loan growth to close out the year.
Speaker #4: Asset quality metrics were stable for the third quarter. Non-performing assets were flat as a percent of assets, and annualized net charge-offs were 18 basis points, which was a slight improvement from the linked quarter.
Speaker #4: We're very happy that our strong earnings led to continued growth in tangible book value per share and tangible common equity during the quarter.
Speaker #4: Tangible book value per share of $16.19 increased 5% from the linked quarter , and 14% from a year ago , while tangible common equity increased 47 basis points from June 30th to 8.87% at the end of September .
Speaker #4: I'll now turn the call over to Jamie to discuss these results in greater detail . And after Jamie is done , I'll wrap up with some additional forward looking commentary and closing remarks .
Speaker #4: Jamie . Thank you Archie . Good morning everyone . Slides four , five and six provide a summary of our most recent .
Speaker #5: Financial results . The third quarter was another exceptional quarter with outstanding earnings , robust net interest margin and record fee income . Our net interest margin remains very strong at 4.02% .
Speaker #5: Asset yields declined slightly while we managed deposit costs to a modest increase. Loan balances declined slightly during the quarter as production slowed in our specialty lending areas, and slower funding construction originations increased as a percentage of the portfolio. Average deposit balances increased by $157 million due to higher brokered deposits and money markets, offset by a seasonal decline in public funds.
Speaker #5: We maintained 21% of our total balances in neon interest bearing accounts and remain focused on growing lower cost deposit balances . Turning to the income statement , third quarter fee income was another record led by our leasing and foreign exchange businesses .
Speaker #5: Additionally , we had higher syndication fees and income and other investments . Non-interest expenses increased from the linked quarter due due to an increase in incentive compensation , which is tied to fee income .
Speaker #5: Our efficiency efforts continue to positively impact our results and remain ongoing. Our ACL coverage increased slightly during Q3, to 0.38 percent of total loans.
Speaker #5: We recorded $9.1 million of provision expense during the period , which was driven by net charge offs . Overall asset quality trends were in line with expectations with lower net charge offs and non-performing asset balances remaining flat .
Speaker #5: Net charge offs were 18 basis points on an annualized basis , while NPAs and classify and classified assets were both relatively flat for the period .
Speaker #5: From a capital standpoint, our ratios are in excess of both internal and regulatory targets. Tangible book value increased $0.79 to $16.19, while our tangible common equity ratio increased 47 basis points to 8.87%.
Speaker #5: Slide seven reconciles our GAAP earnings to adjusted earnings , highlighting items that we believe are important to understanding our quarterly performance . Adjusted net income was $72.6 million , or $0.76 per share , for the quarter .
Speaker #5: Non-interest income was adjusted for a small loss on the sale of investment securities, while non-interest expense adjustments exclude the impact of acquisition and efficiency costs.
Speaker #5: Tax credit investment write-downs and other expenses not expected to recur, as depicted on slide eight, resulted in adjusted earnings that equate to a return on average assets of 1.55%, a return on average...
Speaker #5: Common equity of 19% and a pre-tax pre-provision ROA of 2.15% . Turning to slide nine and ten . Net interest margin decreased three basis points from the linked 3:45 .02 percent .
Speaker #5: Asset yields declined two basis points from the prior quarter , while total funding costs increased one basis point . Slide 12 illustrates our current loan mix and balance changes compared to the linked quarter .
Speaker #5: Loan balances decreased $72 million during the period. As you can see on the right, the decline was driven by decreases in the Oak Street ICR and CNI portfolios, which outpaced growth in Summit and Consumer.
Speaker #5: Slide 14 shows our deposit mix, as well as the progression of average deposits from the linked quarter. In total, average deposit balances increased $157 million during the quarter, driven primarily by a $166 million increase in brokered CDs and a $106 million increase in money market accounts.
Speaker #5: These increases were offset by a seasonal decline in public funds. Slide 16 highlights our non-interest income for the quarter. Total fee income increased to $73.6 million during the quarter, which was the highest quarter in the history of the company.
Speaker #5: Bannockburn and Summit both had solid quarters. Additionally, other non-interest income increased $2.8 million for the quarter due to higher syndication fees and elevated income.
Speaker #5: On other investments, non-interest expense for the quarter is outlined on slide 17. Core expenses increased $5.7 million during the period. This was driven by higher incentive compensation related to fee income and the overall strong performance by the company.
Speaker #5: Turning now to slides 18 and 19. Our ACL model resulted in a total allowance, which includes both funded and unfunded reserves, of $180 million, and $9.1 million of total provision expense during the period.
Speaker #5: This resulted in an ACL that was 1.38% of total loans , which was a four basis point increase from the second quarter . Provision expense was primarily driven by net charge offs , which were 18 basis points for the period .
Speaker #5: Additionally , our NPAs to total assets held steady at 41 basis points and classified asset balances totaled 1.18% of total assets . We continue to believe that we have modeled conservatively , conservatively to build a reserve that reflects the losses we expect from our portfolio .
Speaker #5: We anticipate our ACL coverage will remain relatively flat in future periods as our model responds to changes in the macroeconomic environment. Finally, as shown on slides 20 and 21, capital ratios remain in excess of regulatory minimums and internal targets.
Speaker #5: During the third quarter, tangible book value increased to $16.19, while the tangible common equity (TCE) ratio increased 47 basis points to 8.87%. Our total shareholder return remains strong, with 33% of our earnings returned to our shareholders during the period through the common dividend.
Speaker #5: We maintain our commitment to provide an attractive return to our shareholders, and we continue to evaluate capital actions that support that commitment.
Speaker #5: I'll now turn it back over to Archie for some comments on our outlook. Archie.
Speaker #4: Thank you . Jamie . Before we conclude our prepared remarks , I want to comment on our outlook for the fourth quarter , which can be found on slide 22 .
Speaker #4: As we close the year , we expect origination volumes to increase , which should accelerate our growth . Specific to the fourth quarter .
Speaker #4: Excluding Westfield, we expect loan growth to be in the mid-single digits on an annualized basis. We expect core deposit balances to increase and, combined with seasonal public fund inflows, to result in strong deposit growth.
Speaker #4: Our net interest margin remains among the highest in the peer group, and we expect it to be in a range between 3.92% and 3.97% over the next quarter, assuming a 25 basis point rate cut in both October and December.
Speaker #4: This includes a modest bump in margin from the West. The addition of Westfield in early November. We expect our fourth quarter credit costs to approximate third quarter levels, and ACL coverage to remain stable as a percent of loans.
Speaker #4: We're estimating fee income to be between $77 million and $79 million, which includes $18 million to $20 million for foreign exchange and $21 million to $23 million for the leasing business.
Speaker #4: Revenue. This range includes the expected impact from Westfield. Non-interest expense is expected to be between $142 million and $144 million, and reflects our continued focus on expense management.
Speaker #4: This range includes the impact from Westfield, which is expected to be approximately $8 million for the months of November and December.
Speaker #4: While we remain confident that we will realize our modeled cost savings, we expect the majority of those savings to materialize in the middle of 2026.
Speaker #4: Once Westfield has been fully integrated, with respect to our pending acquisitions, we have received formal regulatory approval for the Westfield transaction and anticipate closing in early November.
Speaker #4: Our initial preparations for the bank financial close are underway, and we are more excited than ever to expand our reach into the Chicago market.
Speaker #4: We have filed the necessary applications and expect to receive approval from the regulators in the coming months, eyeing a close during the first quarter of 2026.
Speaker #4: We're very excited to have the Westfield and Bank Financial Associates join our team . In summary , we're very proud of our financial performance for the first nine months of the year , which resulted in industry leading profitability .
Speaker #4: We expect to have another strong quarter to close 2025 and build positive momentum as we head into 2026. With that, we'll now open up the call for questions.
Speaker #4: Rob .
Speaker #3: Thank you . We'll now begin the question and answer session . If you would like to ask a question , please press star one on your telephone keypad to raise your hand and join the queue .
Speaker #3: If you would like to withdraw your question, simply press star one again. Your first question today comes from the line of Brendan Nosal from Home Group.
Speaker #3: Your line is open .
Speaker #6: Hey, good morning, everybody. Hope you're doing well.
Speaker #4: Morning , Brendan .
Speaker #6: Maybe just starting off here on a topic that's of interest today: NFI loan exposure. I think if I look at your regulatory filings from last quarter, it's a little over $450 million, or 4% of loans.
Speaker #6: I know that it's not huge , but can you just kind of walk us through that book and and let us know whether that exposure falls into any of the known commercial verticals that you already have today ?
Speaker #6: Thanks .
Speaker #4: Brendan . Brennan , we'll have Bill Harrod cover that bill . All right . Great . Yeah , we've got as of the end of the quarter , about 434 million in the NFI portfolio .
Speaker #4: It's a diversified convert , conservatively managed and anchored in high investment grade tier with currently no adversely rated credits . The bulk of the portfolio is made up of traditional REIT's of about 304 million , across 46 notes , averaging about $7 million , consisting of a variety of public traded or privately held entities with investment grade or equivalent .
Speaker #4: We do have a securitization book within that portfolio of $73 million across seven relationships with loan structure, using S&P methodology to achieve high investment grade ratings. We monitor those on a monthly basis with borrowing bases and independent third-party exams on a routine basis.
Speaker #4: And that makes up the bulk of what we have in that India portfolio.
Speaker #6: Awesome . That's that's really helpful . Color . Thanks for having that prep for us . Maybe turning to the net interest margin .
Speaker #6: I totally get the guide for next quarter. No surprise, given the recent and forthcoming rate cuts. I'm just kind of curious, though, if we get those two cuts in the fourth quarter, how should we think about margin?
Speaker #6: You know , early in next year ? I think in the past . You said that each cut is 5 to 6 basis points of near-term pressure before it grinds back up on on lag funding costs .
Speaker #6: So any color there would be helpful.
Speaker #5: Yeah . Brendan , this is Jamie . So on the margin and again , so the other thing you got to keep in mind is we have Westfield coming into the mix .
Speaker #5: So that's going to create a little bit of noise. And it actually helps us going forward to mitigate a little bit of our asset sensitivity.
Speaker #5: So but if you look at kind of the legacy , the legacy company in the margin , the way that it reacts to those 25 basis point cuts , like I said , and you mentioned it as well , we get about five basis points of of margin pressure for each of those 25 basis point cuts .
Speaker #5: And , you know , the way the timing of that , the way that the way that will kind of fold in is that you get , you know , a little bit more pain immediately from the from the cut .
Speaker #5: And then as deposit costs catch up , you know , we start to actually move that move that back up . So but really five basis points of pressure .
Speaker #5: So if you think about our margin right now , you know in that in that four range , if we get those two then we kind of start the year in that 390 ish .
Speaker #5: In that 390 ish range . But then when you factor in Westfield , you know , and with the purchase accounting and , and how that will work , you know , we get a little bit of improvement in the margin from them .
Speaker #5: So, that starts to help mitigate some of that pressure. If we have those expected rate cuts here at the end of the year.
Speaker #6: Yep , yep . Okay . That makes sense . Thank you for taking my questions .
Speaker #4: Thanks , Brendan .
Speaker #3: Your next question comes from the line of Mark Scully from KB. Your line is open.
Speaker #7: Hey guys. Good morning.
Speaker #4: Mark .
Speaker #8: Mark .
Speaker #7: Maybe one more on the margin . I'm trying to think about , you know , on the asset side , loan yields were strong and actually ticked up in the quarter .
Speaker #7: So I was just curious like what new loan originations are coming on today with you guys . Sort of returning to growth . And and what you're expecting for the total sort of portfolio yield in the near term .
Speaker #4: Yeah . Mark , this is Archie . I'll start . And Jamie , you can kind of come in to me if you want to amplify , but you know , the rate cut certainly that we had affects origination yields as well .
Speaker #4: And so we were probably before the cut around 7 on origination yields, and it's closer I guess like high sixes. So if you said 6.8, 6.9, 7.0, it's going to come in closer to the mid-sixes.
Speaker #4: When you look at the month of September , it was probably right around 650 , maybe 650 and change . So we'd say sort of right now in that range it may drop down a little bit more with some more rate cuts , because again , a lot we do is is commercial oriented , you know , tied to variable rates .
Speaker #4: Yeah .
Speaker #5: And Mark , I mean like like we've talked about in , in previous quarters , you know if you again looking at the legacy first financial portfolio absent Westfield we still have about 60% of our loan book that that moves on the short end .
Speaker #5: So, obviously, those cuts will impact the yield on the loan side.
Speaker #7: Yeah , that makes sense . And then maybe just on the growth . So you know you mentioned pipelines are strong . And I was just curious like what specific verticals or markets you expect to drive that growth .
Speaker #7: You know, over the next couple of quarters. Thanks.
Speaker #4: Yeah . Mark , this is Archie again . Yeah . Maybe maybe talk about loan growth . Kind of overall our production , if you just look at total commitments Q3 was on par with Q2 .
Speaker #4: So, pretty strong. I would argue strongest of the year in both cases. But we saw the actual fundings from that drop compared to what we saw in the prior quarter.
Speaker #4: So lower fundings , primarily construction related . And then we did see a dip in line utilization in the commercial side that accounted for a little bit of the a little bit of the lower overall growth in the quarter .
Speaker #4: As we look into Q4, strong commercial is the biggest driver we've got. You know, different verticals within commercial, but strong commercial is the big driver of Summit funding.
Speaker #4: This is always their peak quarter for production, so that'll be another big driver. Commercial real estate will have a little bit of growth, is what we're projecting in Q4.
Speaker #4: And probably the only vertical that has a little bit of pressure is in our Oak Street group . Just looks like they've got a lot more payoff pressure that we're expecting here in Q4 .
Speaker #4: But the combination of it all gets you to the number that we're projecting of 5% annualized growth.
Speaker #7: Yeah, that makes sense. I appreciate the color. Thanks for taking my questions.
Speaker #4: Thanks , Mark .
Speaker #3: And again , if you would like to ask a question , press star . Then the number one on your telephone keypad . Your next question comes from the line of Daniel Tamayo from Raymond James .
Speaker #3: Your line is open .
Speaker #9: Thank you. Good morning, guys.
Speaker #4: Morning , Danny .
Speaker #9: Maybe just one on the on the fees and expenses . So the for Q guide pulling out Westfield just for second was higher than you know what I you know what we were looking for and and certainly what the three Q number was just curious .
Speaker #9: You know, if there's something seasonal, unusual, or unique in the fourth quarter, or maybe if you can kind of give us some indication of what the run rates would look like going into 2026.
Speaker #5: Yeah , Danny , it's Jamie , really the big impact from the third quarter to the fourth quarter in that like , again , I think you're looking at just x x Westfield kind of the legacy first financial numbers is is really coming from Bannockburn .
Speaker #5: The forecast that we're getting from them for the fourth quarter is a little higher even than what we had in the in the strong third quarter , a little bit of of bump , as well as the in summit related to the operating leases .
Speaker #5: And then and then our wealth , our wealth department , especially on the on the M&A and the investment banking side up just a little bit from that , that division that we have there .
Speaker #5: So it's really those three areas primarily though driven by Bannockburn and they and like like we have we have talked before Danny . I mean they can that can bounce around a little bit .
Speaker #5: So I mean to you know , to kind of talk about that , you know , long , long term , you know , we look at that business kind of year over year now as growing , you know , in that , you know , in that generally in that 10% range .
Speaker #4: Yeah . Those are all commission based kind of businesses . So when they do well you're going to see more commission paid out , which drives the salary for us .
Speaker #8: Yep .
Speaker #9: That's great . That's very helpful . Excuse me . And my other question I guess on the on the credit side . So a good quarter from a credit perspective guiding to similar credit costs .
Speaker #9: Just curious how long you think those play out . I think in the past we've talked about a little bit higher run rate on the on the charge off side .
Speaker #9: You know , any any read through in the in the near term past the fourth quarter on , on credit .
Speaker #4: Yeah . Dane , this is Archie . I , I don't I mean , I think it's kind of steady as , as we go .
Speaker #4: We've , we've I think been saying all year 25 to 30 basis points kind of mid 20s , you know , is seems to be the run rate for us in the current environment .
Speaker #4: And I think, you know, over a period of quarters, that's what we would expect.
Speaker #9: Understood . Okay . And then lastly , you know on the capital front , so you got the two deals closing here in the near term .
Speaker #9: You know , take take a little bit of a hit to , to capital . But you know curious you'll still have pretty strong Cet1 how you're thinking about buybacks .
Speaker #9: You probably think that stock is a little undervalued right now . You know once we get past the deals , like if there's a bogey , you're looking at on the capital side or , you know , any color , there would be would be great .
Speaker #5: Yeah . Danny , this is Jamie . So yeah , I think you said it . Well , what we'll do here over the next really ?
Speaker #5: Probably 2 to 3 quarters is , you know , let the deals flow in and kind of see where we're shaking out in terms of , in terms of capital ratios at that point .
Speaker #5: I mean , we are building . Are . TCE relatively and tangible book value relatively quickly at this point . And we will take some of the TCE takes about 120 basis point hit in the once we close the Westfield deal , just because of the all cash nature of it .
Speaker #5: And then so we'll let the next 2 or 3 quarters kind of play out . And then see where we are and see where we're trading in terms of , you know , multiple at that point .
Speaker #5: You know , if we're trading anywhere in that , you know , 150 of tangible book value or below , you know , we would we would potentially look at , at buybacks at that point .
Speaker #8: Great .
Speaker #9: Thanks for all the color, guys. Appreciate it.
Speaker #4: Danny .
Speaker #3: Your next question comes from the line of Terry McEvoy from Stephens. Your line is open.
Speaker #10: Hi. Thanks. Good morning, everybody.
Speaker #8: Terry . .
Speaker #10: From talking to some of the other banks that are in your metro markets, in your footprint, I was kind of surprised by the deposit competition.
Speaker #10: A bit stronger than I would have guessed. And your cost of funds is up a few basis points quarter over quarter. So, can you maybe just talk about deposit competition? And you didn't have loan growth this quarter?
Speaker #10: Next quarter, your guiding towards that does that kind of drive those deposit costs higher as you look to fund that growth?
Speaker #4: Yeah Terry , this is Archie . I'll start . It was modestly up , you know , for the quarter . I mean I would argue there were is flattish and with the rate cut that occurred , we did take some I think decisive actions on the deposit side that went into effect .
Speaker #4: Really this quarter . So , you know , we know we have more of course , more short term rate cuts coming . But we would expect a reduction in our deposit cost going going forward Q4 .
Speaker #4: And it was pretty did a pretty aggressive cut . And yeah , I mean the market's competitive . But if you look at our current loan to deposit ratio and we felt , you know , even with some loan growth , we felt we could take a little bit more aggressive actions and we'll look to do more here with more and more fed cuts .
Speaker #4: And then , you know , one of the things we like about bank financial , again , one , they they have lower deposit and funding costs than we do .
Speaker #4: And that market, from what we can see, still has a little more rational pricing than what we're seeing here, kind of in Southwest Ohio.
Speaker #5: Yeah . The other thing , Terry , to to keep in mind , I mean , we do have the , you know , a little bit higher some loan growth in the fourth quarter and then going forward .
Speaker #5: But we don't think that puts a lot of pressure on our deposit costs because of the liquidity that we get coming in, especially in the bank financial deal.
Speaker #5: You know , if it closes in the first , in the first part of 26 . So they already have a relatively low loan to deposit ratio .
Speaker #5: And then we're selling the multifamily portfolio, which will then create even more liquidity for us to utilize for loan growth or to pay off borrowings or to reinvest.
Speaker #10: That's great. Thank you. And nice to see the FX trading and the fork guide higher at 18 to 20. I just want to make sure that run rate looking out into 2026.
Speaker #10: Do you think that this is more consistent for next year, or is this more of just a couple of strong quarters? And next year, will we go back to some of your prior comments on the outlook for that revenue line?
Speaker #4: Well , certainly Q4 would be a peak for them , Terry , if they hit the numbers that are being projected . And as Jamie said , it sort of bounces around .
Speaker #4: We look at it more on kind of a annual or kind of four quarter basis rolling even . You know , they'll they will we've we've owned them now for quite a while .
Speaker #4: And what we've observed is they grow . They may flatten out a little bit . Then they get another growth spurt . But you know , if you think 5 to 10% kind of growth rate , I think you're in the ballpark for what we would expect them to do .
Speaker #5: Yeah . Terry . And this is Jamie . As we get into as we look out kind of into 26 , I mean that that will you know , I wouldn't annualize this fourth quarter number that we're talking about .
Speaker #5: So I would I would look more into 26 at like a 65 to $70 million , you know , type of a run rate for them .
Speaker #10: Perfect. Again, thanks for taking my questions. Have a nice weekend.
Speaker #4: Thanks , Terry .
Speaker #5: Thanks , Terry .
Speaker #3: Your next question comes from the line of Jon Arfstrom from RBC . Your line is open .
Speaker #11: Hey , good morning guys .
Speaker #4: Hey , Jon .
Speaker #5: Jon .
Speaker #11: Hey , Jamie , in your prepared comments , you touched on the workforce efficiency efforts . Can . Can you talk a little bit about where you are in that journey ?
Speaker #11: And then when you look at the two acquisitions , what kind of opportunities do you see there ? Because it seems like , you know , you're going to apply this framework over the top of those two deals ?
Speaker #4: Yeah . John , this is Archie . I'll start . We're probably 90% of the way through the company . The first financial legacy company now .
Speaker #4: So , you know , there's a little bit left in some areas , but it's probably going to be a couple of quarters more to get a little bit of opportunity out of those areas .
Speaker #4: So as I think we alluded to in our comments that we think the opportunity , you know , to continue to get efficiency comes from the two acquisitions .
Speaker #4: And I think in the Westfield case , we had said around 40% expense reduction from the combination . And , you know , we're I think we're well on our way to achieve that , maybe slightly exceed it .
Speaker #4: Bank financial was maybe just a little bit less because there's a bigger branch count. But what we had modeled again, we're well on our way to exceed that.
Speaker #4: And that includes us in both those markets . Adding back roles to drive more revenue . You know , some some of the businesses we have that maybe those banks didn't have .
Speaker #4: We're adding the appropriate people to help us grow in those markets . And even with that , we would still achieve the expense that we've reductions that we modeled in those deals .
Speaker #11: Yeah . Okay . That makes sense . Yeah . Some good opportunities there . Obviously for production . And Terry took a couple of questions on deposits .
Speaker #11: But Jamie , can you just remind us of the typical seasonal flows on deposits that you see in the in the fourth quarter ?
Speaker #4: Yeah , yeah .
Speaker #5: So, just to remind you and everybody else, we get a seasonal bump in public funds, mainly from Indiana, where property taxes are due.
Speaker #5: So we get those in May and November . And so typically we will get call it around around 150 to $200 million . Kind of extra of deposits in those in those quarters .
Speaker #5: On average . And then they a little bit more skewed , I would say to the to the second quarter , but but call it 150 to 200 million in both of those quarters .
Speaker #5: And then and then they run out in the , in the subsequent quarter and kind of go back down to the , to the base level .
Speaker #5: But but that's pretty much like clockwork . I mean , it happens pretty much every quarter . And , and then so that's what you saw here in the third quarter where those public funds running down by 100 to 150 million .
Speaker #5: And then , you know , we just replace those with sometimes we just replace those with brokered CDs or just or borrowings .
Speaker #11: Okay, that's helpful. Thanks a lot, guys.
Speaker #4: Yep. Hi, John.
Speaker #3: And that concludes our question and answer session. I will now turn the call back over to Archie Brown for closing comments.
Speaker #4: Thank you . Rob . I want to thank everyone for joining us today . We really feel great about the quarter we had and are excited about fourth quarter and the momentum we're building for 2026 .
Speaker #4: With the pending acquisitions . We look forward to talking to you again and a quarter . Have a great day and weekend .