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Bankfinancial (BFIN)

Participants
F. Morgan Gasior Chairman and Chief Executive Officer
Paul Cloutier Chief Financial Officer, Treasurer & Executive Vice President-Finance
Kevin Reevey D.A. Davidson
Brian Martin FIG Partners
Call transcript
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Operator

Good day, ladies and gentleman, and welcome to the BankFinancial Corporation Q3 2018 Earnings Conference Call. At this time all participants are in listen-only mode. later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I’d now like to introduce your host for today’s conference, Mr. F. CEO. and Chairman Gasior, Morgan Sir, you begin. may

F. Morgan Gasior

Good I’d like and welcome statement to time, this At call. to the read. morning, have forward-looking our

Unidentified Company Representative

for within including by of Securities of XXXX. of at include safe intend the all purposes XXE The Private conference to We this harbor the the be XXXX harbor provision statements statements in covered of Act made Act Section safe these meaning and Litigation Exchange remarks Securities statement Reform forward-looking are of the this invoking forward-looking provisions. may contained

expressions. risks Forward-looking statements occur. uncertainties involve by believe, plan on based assumptions often similar anticipate, are may significant use not and may intend, and the words project, expect, are or of identifiable that estimate, They or

results actual those from plans to uncertain, the inherently is ability of strategies actual effect results differ Our and and predict may our predicted. significantly or

be further call For and uncertainties in could our included and in declarations condition impact the the SEC. F. financial statements we forward-looking uncertainties have the should and forward-looking our Morgan And in operation, the do These and turn to update considered any Chairman and evaluating any statement We forward-looking future. I’ll details now reports on not to over consult factors risk risks to the undertake of the statements. that obligation Gasior. results risks please CEO,

F. Morgan Gasior

our ahead at Well, schedule. of bit you. this Thank normal little – stage, want a we we’re

come schedule. blackout so our We are or probably But market back release so. we XX-Q. get wanted action, recent have in the market, out and will earnings the and yet not given filed XX of days call accelerated to the to next It eager into filed the be we

take questions. So with we’re available that, to

Operator

D.A. you. Instructions] Davidson. with from first Reevey our comes Thank question Kevin [Operator And

now is open. line Your

Kevin Reevey

Good How are Morgan. you? morning,

F. Morgan Gasior

well. are How are morning, you? Good Kevin. We

Kevin Reevey

early. you for well, Thank releasing I that. Doing like thanks.

F. Morgan Gasior

my That’s indices.

Kevin Reevey

loan looks loan on balances which was think a us color related to – Yeah, kind it how we some actually is surprise was It give of the it so my down, to growth. to you there. looks should a lot like as about first question side, like Can down came CRE me. specifically,

you was forward, payoffs And I the and in on given then category? lease performance you’ve had that in about loan quarter? what going kind If of the talk know loan think the how should in going growth could some the third portfolio, about we

F. Morgan Gasior

Sure, well, multifamily third – portfolio. quarter the with just let’s start

closings saw first call quite close been from but we for successful of We we moved carry-over as And in doing have to you one so. activity, other, would start originations said activity fourth We we’ve and balanced to activity the a quarter. the half. in third the going that bit or had quarter, in from were in payoffs that a last the the rebuilding the reason thought growth

So quite into of like we carried over they $XX fund. originations look million now, right October. will almost they – not And

the of half of two October. million that already fact, first in about here funded In weeks is $XX

quarter third at for growth will early year, thinking it from of we’re So be October, opportunistic. chunk those to said, continues in quarter. of I close a again, have in estate, as the so like we real benefit that, good will Commercial earnings and of quarter looks the quarter-over-quarter that portfolio, of X% end the to multifamily – looking it the end the the grow

that. were then properties. And had reporting comfortable performance, of a a cash-out the blended a the We covenants not were assets. a portfolio, when of in, came wanted They portfolio payoff have on portfolio couple given meeting customer that one also that of on annual they we with and

a be to so get retail-related something them property, is Chicago But cash going take profitability taxes in that. Real again, if to are and going be centers. on estate a lender those are we estate the the we flows the hard they of nonbank got rents to commercial really the it’s have real look factor a markets. payout and to found in we’re to at think going So becoming cash-out, occupancies we’re, to a what especially an increasing

would we hold about CRE the portfolio So at to these expect levels.

a by this one side, so in actually And think on million, $X payoff portfolio to low best based somewhere the at covenants. The couple Had payoffs, place on We leverage third X.XX growth. almost at we was would leverage have We probably probably give and get some the at be even the go money. that, ratios we when lender It had a double might the the be. digits, for of not point portfolio what we pipeline an on issue X.XX fairly over and have side grown high between couple We now. covenant-light came a another balance quarter. were C&I when And we but had with the stable and there see. them will the review reasonable would customer of XX%. not that’s about found deals see X.XX more the happened, that C&I they in, that

the quarter, X% For And C&I, between in, for grow we quarter-over-quarter, fourth it XX%. that pretty a fourth and going will good the somewhere quarter, pipelines we probably therefore, one have the of think of year. stronger pipeline for

and size. – about. usually on to The acquisition would that to be decided that were concerns quick reevaluate once, disclosed payments was to sign haven’t But a to then that this better later have financials, utilization borrowers acquisition essentially and material the at That’s C&I previously we the loan would could week. of you underwriting all them. us volatility. be we happened we that receivables If government portfolio reasonable in are the they a originations for in a also they them And reduction. the balance in see line about It quarter, pipeline we like Our to stages going bundle, one third that an was the it we and in, have get change close payoff. for told

right our for have But our the third close I it. they that wait to forecast quarter, that tightened we where close X% XX% of all. said, tightened then certain volatility The So not now. to until also We’ll originally investment-grade at come balanced will was the the might and and C&I quarter now, forecast deal, like what the in curve yield leases. leases, space. we loan as growth looks to us and on then, And year-end in reevaluate going back, primarily it’s for in have that in it. books but spreads Both between somewhere is right And to now. reasonable portfolio amount have fourth the was drop a have and based to credit continue see in right spreads

going made now, that make even we’re especially may if pool with less ago fund transactions So wholesale. transaction a that sense, year sense have it a would sense to made

declined. So to is happen. you’ll we the investment-grade have notice wanted wholesale leases that And declined, that the also what funding but

not to and an assets we get appropriate the We’re margin. book unless appropriate an going funding risk premium

our a the do So that to investment or with we X% is since for noninvestment-grade a If money and actually on and around, we’ll that better, thought some portfolio we especially for the of we because we it’s between on little hope see that have our But noninvestment funding got the say, put sense, I grade found leases, we grade roll growth a we fashion. in right X% would will work based opportunities excess liquidity sitting liquidity then investment-grade the more leases. priority, be might now, made priority. on would We’ll to leases at be less if that opportunistic posture.

said, all and mostly multifamily. run the hope $X.X billion off. at Residential between X% to in will stable. if we grow X%, volatility, as can C&I but could to So portfolio told, loan see will get continue pretty we $X.XXX growth we’d CRE be and billion, some happy. Leases in be the to I

Kevin Reevey

particular you color, to or great were of to in deposits? moving rate about a balance happening great. Was then looks quarter? the specials That’s color as Can give Were mix us like there any sheet, the points it teaser That’s deposit what’s Morgan. basis your deposit some rate the XX it shift? costs sequentially. up with And the side

F. Morgan Gasior

to transaction making accounts, core deposits second. But both Paul in to on also managing turn on over we’re a sure portfolio general, and we’re going at focused matched. the in risks the but appropriately I’m managing and just the rate Well, looking betas in interest we’re

you So for further let me to turn over Paul information.

Paul Cloutier

rotation the in into of driver cost a accounts, was of of funds market major accounts mainly of four out money CDs. type the the Kevin, increase

money. pick So in for it money people for extra excess yield into their return sitting yield, have cash were market accounts. rotated They they or to and up some looking CDs just

Kevin Reevey

into think and how going trend, the fourth into the that given So pull should XXXX? we margin about quarter going then

Paul Cloutier

with net grade ticked interest wholesale we up as actually the the Well margin lower-cost of off investment leases. paid some

As they we to for range increase maintain were near one net probably basis margin or We’ll paid somewhere to point two. X.XX% interest margin the off, the net interest X.XX% in able term.

loans, interest leverage so may cover Unless on dilute should that margin net it actually the that proper leases, net opportunity deposits up an we investment-grade reprice, dollars return But interest increase slightly. As the will with too and absolute, expand and of interest to the will spread slightly. it find margins net then margin.

Kevin Reevey

Great, thank you.

Operator

you. Thank

F. Morgan Gasior

good just would retail we’re also origination. deposit the some on and add account Yes, seeing pretty I that side,

of taken best seen a marketing the few hold. Some have results in years new as we’ve programs the

as our being update generation also out to us is the And to commercial the as about managing of an commercial rolling retail side. pricing. important some account we’re because careful We’re marketing

liquidity funds. taking note Our on have core Those the really, said, call market there, we’re that focus competitive are handful be but pool money deposits. top But that, accounts. excess going customers of be there’s a excess the absolute sitting Paul are those as is and on, not – market. surge of for at around that we sitting We a care would of transaction just some we’ll them of to

for money So concentrated when of that customers. the balances at less of activity quarter, than noticed in the XX was the most $XXX,XXX third money these around larger we look we north market moving

Paul’s we’re make CDs, betas stability core happy them excess transaction happy the can it. there. with we in To the managing accounts the accounts. So if do point, and pretty liquidity we’ll be the We’ll of

them. of specials around. with be in those care that to excess But other we category, use likely balances if couple a have take to liquidity it’s volatility We larger see we can moving that

Kevin Reevey

color. Appreciate you. Thank the

Operator

our And FIG Martin from with question Brian comes Partners. next

open. now Your is line

Brian Martin

Hey, good morning guys.

F. Morgan Gasior

morning. Good

Brian Martin

that that seeing current the portfolio? Can yield type the that sounds of looking you’re about yields are C&I, you with the like just to what little and commercial, you’re mean, really, to on grow. relative talk I in a multifamily bit product – it

F. Morgan Gasior

Well, let’s start with multifamily.

now, depending Right X.XX% about we’re on the the rising. in about financial points market. statements call, borrowers refinance of And we locking portfolio, pick As rest portfolio Right We’ll the to pick Most end normal the activity. to were range going $XX payoffs the between underwrite now, good the the on it and points. reported interested in and the XX is up we’ll forward, replacement based on of easier It’s by usually volume just the given rate it. in XX replace said that that of last are originations. the up that a of borrowers. on million X.XX% October, rates going

the that both for So time, right worked sides. about just it we hit market and

the originations, looking at low for normal Now to yields mid-Xs. of in you’re the rest just

will yield say, for multifamily X%. I the on all So our average fourth originations right for would quarter in, be quarter, around

basis. purchase is night, going to were for And the some proposal more working the customer a being be Xs. that flexible done Last of in is yield on a on we activity low there the a

we’d the the being up, again, quarter see average X%. for So coming yield

see Going the year, Xs. in to the next mid-Xs forward being the in you’ll low yields

receivables-type put the mid about For But we mid-Xs. yields term. to on the introduces in lending-type in the with Investment-grade high And balances leases, in to still That’s that, the picking on That’s it’s asset-based you generally on produce when that, It would match noninvestment-grade rate they’re high estate focused C&I are yields below accounts X% low the why mid-Xs, areas yields It’s the typically be on because again, on the we’re the then going primarily we’re we are product X% got valuable pretty leases, side X%. correctly. to put in to cautious what we up you’re the to yields the volatility have. as to floating the expect a financing, of talking cycle, even real are Xs. and and C&I, and on floating but short side. it. Xs the will about that rate financing

Brian Martin

about talked Okay. bit quarter That’s helpful. And just – growth. little fourth you a

payoffs kind kind some guess, that thinking as growth how and how you need the kind picture I I kind thinking targeting. guys point that which want drivers? of XXXX? at you portfolio, multifamily of XXXX? Is planning mean, at primary granular. trends this it of look growth I by just of are in Is And to Just you’re kind of mean, just are seen it? of And kind loan be kind kind just are just big the the you’d about think it that unless the But how or to of of XXXX seeing in you and of kind you total about categories and I C&I? still this about of get don’t you’ve bucket

F. Morgan Gasior

the say C&I would the be will percentage leader. I Yes,

add resources one, fourth forward fourth least not some here in to at an about It it. impact looking We’re for XXXX, in quarter. a big just C&I obviously have quarter, to we’re won’t but

we we’re some of even in the bit than again, it’s local. care mix, interested product So development whether depending if And out do rolls or may health is the we growing little the range, much and a to successful. XX% that on XX% better have very in C&I

just C&I and expand of portfolio side to new we’re the it finance continuing So we’re commercial into the categories creates subcategories, different expanding opportunities. and –

little growth we to fundamentals goal X% in We’ll again, see an the customers where going are some compared Multifamily, was people event the had for in get a story, we the the that Most be to portfolio opened the given kind about, some is – product harder But we stable. our little that a newer C&I to single-digit to selection to to environment to and the of cautious. make So talking some expensive. just work more competition. leader sellers probably think, markets of be are X%. be, loan purchases I to for up, growth of growth. a that have the will the a going get, going – at are local of want rising good terms I time, rate prices that is, we’ve the that to just One same is

are form gap value-added get. it. There seeing want can there’s gap do over investors, and what to going see with will Maybe and to time, the market that stabilized professional the the but now, want sellers deals working right the might rate as professional And be if there. we’ll we capital be they So to closes But – of a might we’re opportunities still it. to advantage we that would do fewer markets. of growth price also some what are investors multifamily I buyers so might come opportunities as some wind them and And on on would also we’re We say to X% because still they more cash-out, growth decide is do between what a taking we do, those some see many the originations. a good side taking quite payoffs payoffs, but not for up not see it’s possible customers XXXX. see and many

lower-yielding we multifamily. portfolio the it’s be much actually to income noninterest So the If from might decline. revenue more on likely see perspective, side a that happens, it but

a at So and asset. coupon least, the it we’ll try higher-yielding reposition back in to get

will component Right went focus market excited Our about earlier. of leasing, it’s don’t get I’d commercial really we talking recently, Chicago X%, real up pushing estate, in the our about that to again, lessors if of the the is that’s portfolio. the see we opportunities our us say mixed to it by now, just it. talked some And grow then been given there bag. about And fundamentals a noninvestment-grade forward, that

lessor relationships As that focus we’ll we some up market, new see growth. I open that on think

the don’t funding would that I yields portfolio noninvestment-grade to really portfolio grade, So the growth. eye investment might like continue an if keep we point, Paul’s on To mix on decline. and the

not portfolio much and growing too going footings just to share sake equity right earnings for the worry growing and the really about the we’re So per footings. on for of size leasing return the

next it’s hard side, say will total portfolio. focus grow the leasing. but It X% be not the could year, on to noninvestment-grade on So X% the to

Brian Martin

Okay. about? guess, type would range, And of X% to is just X% thinking the least, you that a of in in if aggregate, be of I kind think you kind those to together, at somewhere fair growth pencil

F. Morgan Gasior

it finance-type do volatility. X% not happen a in-and-out is little kind of out number. X% acquisition good if an balances that say C&I more We I’d the that receivables is the would do stuff balanced probably growth a have equipments. We the bit have. doesn’t turns that the

like we stretch If down it’s acquisition lease put or – hit. and funding growing X% harder really the to we would number good had deposits a some as some for portfolio volatility and work a in liquidity X%, we put X%, far will hit good. core me hit So did But see C&I, or to small because work. to we a we as overall, seems a the got be to that extra to we maybe if sounds really X% commercial runs because we to me. be seam number

are to variables. be going the So those

Brian Martin

time? that book just the talking it Paul as if increases that growing here, relates higher-yielding rate costs the being which, of you C&I is that the kind funding a being leader, kind then as grow, couple outlook earlier for And changes anything guess, there you’re to rotation just expect to portfolio of of deposit Okay. issue, about still and I the that the of higher and and kind on the a of margin there that that’s Certainly, over where this in now growing the rotation? I far to mix as the or level, is your with that getting if you’re is achievable outlook some buckets, type in trends X.XX% mind? you’re Or seeing a but changed anything understand betas margin right your as it’s of

F. Morgan Gasior

Yes, well, I Paul correctly. think hit it

X.XX%, possibility short to right I place. X.XX%, to north which is was original a getting X.XX%, the distinct there next I Longer think think gave, we term, X.XX%. of one two the quarters, X.XX% about seems think, in the the the term, I X.XX% of guidance

against sustainable then could and it think it C&I than I that. balances But the will are how even sustainable how growth funding. on be that better is depend the

So at that the be so But it can loan cap with portfolio. the portfolio we’re a portfolio the shifting looking stable think, more essentially that’s position this, I rate neutral base. that have risk between the we’re interest in terms we one, we’re of yes, and C&I why headed also against funding of where securities –

taking side by the out wholesale advances. and the borrowings We’re funding of volatility the reducing

that’s XXXX. of beta to There’s accounts. react. to of So help expansion really with. premium the And these could some overall mix the into margin But we produce funding a going to quite in competition money begin especially are Chicago, competitors how knows in when get nobody market going further asset bit

have managing with just and to the that the money of term cost we same that. we’re focused last same market chase can – funds of on get because But betas that’s funding, the why so So protection to and not we trying careful with be core get at time. much the dollar about

get So why benefit that? the of not

Brian Martin

Right.

point, I strategies maybe mean, market? shares on of the that earnings sell-off uses it at of this then can many getting you thoughts as as the at about far a give maybe you And relates how are that buyback, kind with far mean, how out of you important And mean, just be I in that little as thoughts just would to guess, in I And then M&A, I much the become looking that. just helpful. I about capital updated terms just buyback? recent talked has capital, the the the on in maybe your quarter. I as shares And remain? more and – bit Okay. mean guess, then, talk this your in where as

F. Morgan Gasior

end the It’s to so Well, That’s in all come or constraints as you million we’d out the back shares by blackout. given as market we wanted aggressively in XX get expect fourth the to of we the different get of XXb-XX quarter. we have programs. under the at why can, can

continue. that great think, these of we opportunity in the we board And obviously, immediately, now. at expect continue So to that today. trade a if here back trading and for market. we’re are level I get levels, us I forward It’s to to would The saw aggressiveness

we didn’t just manage have obviously, here, capital sequencing but question than It’s more So to a adequate of to all resources be everything. these. we expect

in into this, be as numbers to said, I were to expect would if the as repurchase came expect quarter it, increase And more in and trading, of share participation, And we’ll last – we continue XXXX. fourth would I given program. we So the that where aggressive we that out, quarter level said not we were. even the

I’d of if in the now, because terms right benefits. repurchase in So say, the program anything, can focus be will produce most the the term it capital short share management

we’ve side, of the And earn M&A the some they transactions. On interestingly don’t much. transactions, very smaller some enough, at smaller looked

they They share. run when financial a very we’ve have robust than some So some all focus. private pay earnings focus prices. come of seen must a that more And per the don’t buyers in much to and strategic contribute you numbers, very,

quality So can’t the pretty revenue for all portfolio. liabilities. is mix going generating especially and you for those to loan just us as overpay of assets much sensitive the as franchises, to from if something, we’re asset we their the come also like And

asset and construction portfolio So it that sustainability we have we’ve to we drives has at honestly, out CRE current of And lending, would our That match their of a if own that because look lot a retail assets earnings. of bit also nonperforming company the creates a have in its pricing to transactions of move quality. gap. seen a couple aggressively where our to

asset plenty so of little something capital $XXX we that’s right need lower fine, we of ratio to if quite at And see helpful, just But see $XXX other even too We not have, we’ve stay if quality we gap the A looked be it’s comes a It where couple deals large. us there’s of million, lane and million, so loan that we’ve where capacity fine. up, it to again, footings. of at what it, it’s it now, it. where to And a that do. too. was It the do it’s loan-to-deposit would couple the a it $XX core was looked again, If we deals kind plenty trying – us if got on larger, gap where does will. act opportunity do doesn’t and within But we helps from price something our to we’re on million, funding. the the what need distract helps of the portfolio. growth and it,

Brian Martin

can does, as or Right. – sense do just what’s I for if assertive where how how many the far you And shares Paul at? the many maybe current here, things you have Morgan, more do a have on authorization? And specifics, get that? as are shares remain So

Paul Cloutier

currently all outstanding back the it would to million. shares XX.XXX under bought authorization, we If total shares down our take

Brian Martin

Okay.

through on So current there you’ll authorization timing what’s And it? that? on XX.XXX – is on that, when it the the or guess, I is is extend what’s I when million authorization. a just guess, remaining Paul, timetable on the good

Paul Cloutier

XX of It currently XXXX. April, expires

Brian Martin

XXXX. X/XX Okay. of

But kind the this of potential they’re just maybe little thought then seem on And helpful. like comment, expenses. expenses better Morgan, Paul, That’s just quarter. the than Perfect. we me, added Morgan, can last you for resources two And C&I maybe bit side. just the additional being a or on some talked about a you Okay.

the couple lenders? expenses kind the just about the you trying to impact, thought? the than of adding, this could of better was you’re articulate is general then outlook. you So kind a And just just maybe think – of resources quarter and on it just just And

F. Morgan Gasior

one, the it about what we be. thought would quarter was Well,

For a probably compensation couple the up thousand. in go bit, a hundred we’ll fourth maybe quarter, little

bit a We’re going quarter, to benefits close, and that. to $XXX,XXX as we expense this pipelines see probably little we maybe be extra payroll benefits resources for taxes. health care quarter. an we well from have as that quarter. the have – this so some quarter, taxes side payroll impact this accrue impacts of some given more There’s We’ll in have adding All added so payroll will told, credit we’ve fourth We $XXX,XXX need resources. some C&I the another could banking that to on

how of first generation and may depending with on that lead continue next do in we pipeline quarter the quarter Some into fourth for generation year.

it little roll But to of will Some may continue bit. we a the off portfolio. C&I to add

get growth we’re also areas growth. where do are go. the keep will asset it to lease to need a growth And and for where generation the goes, the to – those obviously, trim C&I going two because the expenses the We look we’ll at it’s – but we to our and expanding say to reconfiguring bankers how strongest we best in of take little at. And a but spend what need too early the on we’re to

Brian Martin

the is addition was Okay. you to folks? I add what guess, And lenders planning Are quarter, this Morgan? did – you… add of you it some Or C&I more the that? support do

F. Morgan Gasior

Well, it’s analysts in quarter. than fourth added one senior for But quarter, in we little quarter. of banker. But we that a impactful and fourth not bit third started other hasn’t some credit the be expense nothing added happened going yet, also to so

Brian Martin

Okay.

$XX because, the higher expenses hundred the you’re XXXX in mean, – ballpark? Is thousand just that million that above of Maybe fair that is about up ought to number for that, that is maybe think mean, trend dollars that growth. a fourth it’s – type run run couple $XX Or run of about XXXX I think quarter higher a rate the see you XXXX? and the in rate a if quarter fourth fair the little million fourth are is in that quarter, a I bit it’s in in it? then So, at in kind a to quarter, rate

F. Morgan Gasior

I going would million, try say. we’re it and under $XX think keep No, to I

we’ll I aboard, also seems to million touch money $XX.X on maybe But be me. bankers marketing. We’ll million, million. don’t to new probably about we hope So right $XX – would $XX.X spending some with

really We’re going $XX and not million. work hard to touch

$XX.X a So million, $XX.X million, it is call reasonable $XX midpoint. million,

Brian Martin

just Yes, appreciate it, new that I kind the is that business? as changing? steady you’ve Morgan. I group, okay. just front is how added she on goes know Got work – estate side, on that’s continue that then real you’re the guess to income new but thinking just I about And – it. just and of – with anything

F. Morgan Gasior

some They’re side, margin, newer if in there. more And relationships. I to a so. starter some of return. lower some Part to investments of then you how depends in tend see on the to in starting evolve improvement we’re Yes, will, we’re starting full trust The bit into of kind lower think the kits, the time of trust. of over some – see terms the added, underlying it And they of we’ve growth little perform loan products. they’re the for but trust products

And so growth. you’re seeds kind of for in putting future the

take to to the projects loans get in are the to complete, are new of income stabilize. the markets. And that construction are taking to also financing construction fee the in get longer they doing longer most the take capital On And pipeline surprisingly, when commercial they we longer opportunities to side, completion. permanent not

third going control any what’s we in obviously, for what’s make fund underlying and fourth pushed get you’ll the roll of project. in projections those the permanently happening of and out don’t things. quarter by So quarter And over terms to

it just of that when a happens. So is function

fourth It results. would in might say quarter first looks be in deals growth probably hard be wouldn’t it’s we’ll better of to to fund But in fee commercial third It the explosive the fourth on better these to the – going do do compared to like not quarter. more we are going So quarter I income. quarter.

getting a the We’re also bit little word out further.

history. at at sorry or said worth lending looking I months’ non-recourse think want what’s changed As – Freddie property. on with they happen cash-out months’ to up you’re only to programs borrowers they – their history, out XX% XX% Fannie of do still have instead a so still Freddie The some look recently XX that going worth who to of three Fannie, of I recently see are there underwriting earlier, to their is likely

select that property a possible asset And so and from certainly a cash-out, go there. to it’s I non-recourse might the turn some take borrowers think just into

commercial see side, growth year, in see little don’t deposit the in to would don’t to on commercial market, going of in I bit And if income were the fee ATM X% on activity Obviously, change offsets I card. So had but to debit X% we’ll we’re financing, have we that’s side. appreciation, a in then anything the continued could hope of see income. that going that for but of fee really drive fee next like activity and fee something noninterest But really the deposit decline that. things that. potential they future the because that in nonrecourse they get much downside. context well. a bust if be payoffs we to a as stream, we’d the income there’s some growth And might that with happy down portfolio the driver door upside fee the income manage some

Brian Martin

behind talked giving it with last road to I XXXX? target. was as are you’re you kind revising the about the of of – and I I how that you where of guess. And what’s you – that Any guess, the given just road was then. that help on, to out of thought just guess, I the kind guys get one, this that get of kind since try last mean, quarter, into you map earning like, to laid changed assets, get about, kind achieve guess, at mean, Okay. how meeting the and and the guys you’re shareholder Morgan, just some thinking and I we’re decline, loan kind or update map I at target, quarter still that thoughts rebuilt

F. Morgan Gasior

on you really more specific discuss be you portfolio earnings you us share loan Can there, Brian? talking about to per or want growth numbers Are what growth?

Brian Martin

Yes, talked loan the about growth. well, I you’ve portfolio think

you base or I asset about, don’t expected just a at? targets, So at back term, that earning guess, you growth the you back, the how the short to I more don’t if to, at get least I the you numbers hit get to expect least of much guess, it’s be of do for if guess, EPS

F. Morgan Gasior

did too variables think third I more to to in because Yes, keep it. We the many that to quarter. – it there’s $X.XX probably just simple respond of side

looking fourth for think probably quarter, $X.XX. I $X.XX, we’re around

than think but would to I fee origination all income to it’s have commercial likely. happen and does push sooner forecast that have the of happen. really forward we be currently And would the $X.XX all seem to C&I to which quarter, theoretically possible, on jump sudden have a the in not fourth

just able may And everything to be do have more we volume perfect. probably be of given terms the share program than almost have would do about in to Just to XXb-XX repurchases. we’d

of fourth think I In of we quarter, quarter. you’re usual $X.XX benefits going assets, range lose is for couple first to days plus, the to interest-earning So thing. the a have about $X.XX

where a another the repurchases we think we spreads to the after XX/XX the you the that, the provide and I $X.XX numbers, think How If on the So helping portfolio year-end. again, But after loan out and credit assess $X.XX start can the where base and are should little are the income little quarters the break high? work earning run share higher. funding a bit. two and $X.XX going, of going, to all we’ll I think more yield need I there see bit; into to close provide getting curves mix; levers: a impact seems assess there. update then range assets out the noninterest we we all the the out, you’d the –

have further of have, short term, plays expansion, $X.XX. to you to guidance. take we’re we think So past I quarter, give want further. can both to going fee expansion and After margin we income out get to But this how in a before terms $X.XX that we see first we chance

Brian Martin

Yes, okay.

So a here. more of type XXXX I as ROA, and close event, quarter growth or now you’ve momentum the is guess, mean, that third my to of you you’re half above outlined getting ultimate above the – this in but quarter, second it X% second probably was get with point I getting given kind of

F. Morgan Gasior

statement. Yes, I think that’s a fair

promise a first to but I chance things or that deliver. quarter think don’t I absolutely can’t do we we to in want fourth it even quarter, have

not So possibility, probability. a let’s a call it

Brian Martin

you. got I Yes,

appreciate thanks and for getting Okay. update out Morgan. the I early

F. Morgan Gasior

for Thanks the time. pleasure. Our

Operator

questions at like this the F. And I Instructions] turn for to I call over would to [Operator further Morgan remarks. now back not am time. Gasior, any showing further Chairman and any CEO,

F. Morgan Gasior

everyone and year. touch season. the be first wish good thank of we and in fall a the for you Well, back And we’ll after interest, their we holiday

Operator

today’s you This in and gentlemen, participating may all thank conference. and disconnect. a Ladies conclude program, does today’s have you day. for wonderful Everyone,