BFIN Bankfinancial

F. Morgan Gasior Chairman and CEO
Brian Martin Jamie Montgomery
Call transcript
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Ladies and gentlemen, thank you for standing by, and welcome to the BankFinancial Corp Fourth Quarter and Year-to-Date 2019 Review. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator instructions] As a reminder, today’s program is being recorded

I would now like to introduce your host for today's program, F. CEO. and Chairman Gasior, Morgan Please go sir. ahead,

F. Morgan Gasior

Good call to and time, like read. welcome results. to conference XXXX I'd statement forward-looking quarter first our discuss this our At morning fourth XXXX quarter

Unidentified Company Representative

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

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

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

risks and to any risk be do details have evaluating impact These further and in the in could factors on operation, the and uncertainties undertake forward-looking future. risks We declarations SEC. considered forward-looking and obligation the the reports our statement of not consult to results any update included forward-looking statements. uncertainties that statements For condition the we financial should in our please

turn And F. Morgan now call the over I'll Gasior. to CEO, Chairman and

F. Morgan Gasior

Thank you.

release FIVE-quarter supplement. financial press our and our earnings We have filed

commercial finance also capital last We equipment concerning and estate news released some company markets. BankFinancial week

with available, So, for that information ready we're questions.


Instructions] [Operator Certainly.

from Montgomery. from question comes Martin first the Jamie line Brian of Our

please question Your

Brian Martin

Year, Morgan. good New Hey morning. Happy

F. Morgan Gasior

Brian. New Year, Happy

Brian Martin

the put you just that? XXXX? that loan little more has fee initiatives your of for growth comments your just walk through about and about how maybe that on growth impact on if start because could I Say, just income And wanted detail just you thinking have in guys place? to you're outlook new a And bit in with --

F. Morgan Gasior

broader a which new of in and the components equipment three initiative going equipment a XXXX finance added four. Well, forward. three is let's finance, of with start the Thanks. We for total Sure. area, us expanded --

leasing, of corporate leasing, So before. market had leasing there's middle ticket the government course, leasing, that standard small we and

of for to will in do March. is originations. year So, a year remainder to target And of And be grow of our government, getting -- start each trying Middle we're in the up segments. market XXXX for have for in do million those that. on started. is about XXXX, the what running we It very good the $XX just and is

on team $XX leader, new the looking board now her for year. Slagle to also and organized. segment Marcy getting is about Our We're that for million do

our getting actually board, And Hall. leader, in and She small speak. Stephanie her ticket. place is That's team we as on is

the the them month. really that of and smaller credits to given expect up this those to next be running $XX But need about to and for we're the cautious only expecting million year. do in We be nature environment,

right in happens on around average that million in vary swap And those three mid-Xs, is in yield index. capacity new with we categories for So X.XX-or-so. XXXX. have based that's not did $XXX the the what the that originations Obviously, will

All like those priced term are credits to swaps.

noninterest the will in generate small syndicated. a you on the ticket the particularly depend also that volume, amount will income the volume be we four-year in normally and work will portfolio put that happens syndications, area with four-year, That can of off swaps, from the average. expect what would to that swap about modest So of space; average

that. do across transactions would not it. open up. our be XXXX. I get start XXXX if that work. liquidity come make to because to that. to we'll impact much But We an in going that given expect to excess for would material not But expect We're again focus a syndication, of an to to we we're in We'll in as sense have carefully XXXX. that impact of It for probably put more have do the going is will we our those impact it market channels set a on financial

commercial mortgage to in bankers in we've on latter bankers XXXX have that on real of That is capital XXXX Moving of of half more estate. What before. expansion is we we replacing have an cases, some banking focused doing and focus. been a early markets did what the adding and

DUS independent added were capital If originations market. an have participations doing variety a of we've lives, significant firm. either for they were in in markets bank lender, a context people the the mortgage into doing through banking So, working they through, example, the previous working experience,

operation in that is for context, because much much ability broader a type capital of is any a markets there credit. almost opportunity the better And placement

to we're estate what we're about $XXX,XXX see this there of And what $XX where real in to getting did $XXX,XXX about itself million. income -- commercial of out just we're So to see see hoping grew looking compared capital markets for at multifamily we portfolio is, started. then really to we're hoping XXXX the coming year noninterest

We our It's the ourselves the those sales. in expect in if Quite can. to market, to We we're get result now just a we do better best see of transaction. the payoffs opportunities that to but often, capture payoffs continue nature place that in XXXX. from

ability. inbuilt We some have

borrowers you going to most title look work, are financing. but lower don't do example, For the than rate for have original to a

they're amount appraisal a of new We money. need it a for greater buying if

just and of the offering have there not would that as solutions and many cost economies is that be So the opportunities we're market. also saves something otherwise. often And are markets not scale non-recourse, capital

with coming why it's So portfolio. from expect don't to that about That's We expect, million. lot head what growth we of originations see. -- consistent the it water in But $XX we thought expect really a what payoffs have above and that's in We'll some don't we'd if that's keeps XXXX. in. to

us for the priority to finally, then continue enhance. in And next to is C&I, that

opportunities. early do to having some now, Right that We we're expecting finance lines. those new on discussions Equipment have -- some $XX or million thoughts about that, $XX along will some grow we're actually and provide million.

new with financing we work The and part, lessors these we work themselves fourth in with segments, they as we need reduction C&I different on. was, that them -- in seasonal. As with can quarter additional work will in

Our lessors, warehouse bridge and their clear out end lines the year. at the of

over they But and in then the line. down second And generated they and so the again and pays account have start checking quarter. in cash cash the account late the the first then checking quarter then all goes

and of times as it the least the they transactions tend we into again, a a to but So the year, is income at sometimes at cycle couple enjoy year during the end of course year cyclical, of that market. the

us. a health in of couple see coming of, the We'll know we space payoffs care at

to $XX about $XX nobody there is expecting it, fed that. growth a be million rate of be might I told, but all wouldn't will bit approximately that X.XX%, C&I down yield do a year. So, the million could obviously, cut But better. surprised little necessarily

for think go go So Multi commercial we rate back can just a a is to -- now. X.XX% reasonable multi-family real second, estate.

Chicago a you company, outside Chicago bit real little saw and four range $XX still of X.XXX% if of seems loans. yields better it. was market Chicago alleged we that as Chicago. for for low in headquartered multifamily Recently, inside have a us. We The a at X.XXX% decidedly have in billion north loan Denver a X.XX% score. estate and are competitor But those quoted commercial look to as a Chicago Outside of it for under sometimes and the both It's is keeping rate. of portfolio-wide, X. seen under

place be. So average, we the seems to like safe average, average, think a X.XXX%

if all of those So, various billion. just of initiatives, billion. it, XX% approximately you $X.XXX it, our under back around portfolio $X.X almost we're looking to loan to of be -- XXXX would Commercial take get

and So million. perspective. X.XX-point-or-so election the It's a $XXX an where up. environment, at very growth we for million There's where get addition to is That over liability from to an Europe place better next that's rate overseas of about us year. asset Japan. little in uncertain to a from started of there $X issues bit roughly down be headed average we're There's presidential in coming we're the loan

also coronavirus yields, and other some there's Negative but impacts.

us. finance still have how little return we It gives flows reasonable gives If us up allocate in a risk predictable in flexibility and up, equipment picks to economy we rates capital a like us bit yield cash flows. So, portfolio. gives it redeploy. cash and the the with we move the it pick to on because more Better risk, the

priority come take the example, to, of profile grade, If not we can can move back we things. fades, right going the change If but the cash to for do investment could. had our we We forward. and the now, other into portfolio more risk economy

gives initiatives it later deposit and opportunity plus on income, opportunity income C&I, it also on we're us gives just So even core noninterest for that year environment, we side both like the deposit some the for further. noninterest the working treasury deposits increase and and that us for this plus

It's the we'll So, ways these business. market opportunities X. all generate have capabilities for on us. the four even for to C&I, we to big side, as to -- and was And us. we right to treasury a in the now move it's add have additional move deposit all, as And more it go opposed

Brian Martin

kind context, finance how of putting you. people, have many Morgan, equipment the mean, you've the I added count? areas added, to in units? and just folks of the of mean, just the kind I two real kind number you Got of And in guess, it I estate

F. Morgan Gasior

done we've No, some substitutions.

has added at, for President locations. new Executive XX I'll real our more, some So of We'll there, Hall too. various but commercial also Slagle may leasing, have -- President be we've in the probably in we're just equipment years we that one least there I Gravner four And here new. on three Deutsche. looking is people or existing changes two been side, say at and replaced or President think estate Vice Mr. staff

of there during some as course it not year. in ad as certain really it's done mean, are also we've a I But of big certain much certainly people places. the substitutions the new is. So

Brian Martin

you. Got


about? continued guess, how range, that past, just you I probably kind the about to were to XX% but then XXXX, guess, about XX%, I'm sure things you're low as Or growth, So some for it's the growth? thinking expecting the overall guess, double-digit gotten factor sure And not make of in the of least at loan I thinking in you're net level it payoffs? I I would

F. Morgan Gasior

XXXX $X.XXX of loans, we we which shooting at I would the finished approximately up million up of would billion. year are be to say approximately $X.XXX billion, finish at $X.XXX and commercial

of lot and we're is growth, that environment. that's So absolutely show-me loan this a a clear

Brian Martin

then the the -- THE into payoffs of this factored performances. been outlook, you've assuming payoffs? the guess, recent And continued what a, got for initiatives is have your most Okay. will in level that part, I are I growth elevated guess, Or -- you the

F. Morgan Gasior

of there or in and small, initiatives. balance why I very beginning here. middle on focused are at just get have sheet portfolio. in the you parts because to so the payoffs many initiatives and changes ending think no the moving That's commercial I'm they're the government, trying Obviously, little new finance, equipment and brand-new looking

expect competition we'll in also and going on we're not still corporate Multifamily, as as about of a intense it's there's $XX originations. we to grow to payoffs. the amount only it coming some see grade, And going That's the cash really about continued because focused $XX investment has it, so well. runoff considerable reason that is flow million doing why for million grow from

hard modest pretty starts to If a goal. then It news. that's why be that's be good more better, it. it confident would that's doing about So

growth now, factors volatility we're But have And that in the just C&I see there. of really some smaller you them a the is target year. combined one. area to not in do opportunities of both the lot Borrowers going of of those and we're given in where a want elevated the market, small relatively payoffs right an We exits following interested know a couple on. for to usage during to things number

We replace things it. in some to the pipeline have

to finance said, be in focusing in right I bit moving a multifamily place, commercial little we're have real C&I. on equipment now going more that the as But we forward estates

don't a anything for goal have reasonable. I net place now course on that's million we to to hope in of think the $XX seems right why but predict horses We the improve that better. the so during And C&I year,

Brian Martin


-- last And right. just thing the just the growth, on one All Morgan. Okay.

-- does getting it as you Is and of or these a think about in some get the your up it where more to indicated, line, play units second there's mind like seasonality coming sounds guess, couple people it and your what finish just the payoffs of out from today? how right of just beginning kind you people as running Just we the of quarter? kind in get get I there.

F. Morgan Gasior

you going good conference call to to like do second close. that quarter tell a seems after next time This our we're the

work have point and you we up out, As a running. to lot of get

put be in better terms later So results of out. timeframe. trends placed early we'd we But obviously discussing feel quarterly do and we'll our or it July in activity, August to

some second we've In results. on terms of about quarter, equipment get up, to middle getting spun early middle side, in as good and up government these too finance made the it's just running and I units but the ticket said, and quarterly small market in the will progress and -- corporate talk

better the opportunities the we time of that the I of extent, than of year be great. given that of we and we until know will would though, say, better won't year growth timing the The that, in do half are be we second some -- the and the where are. to we the But there. volume better get early get would in where

I going to in to the So be the that think is growth second of it's bulk half year. the of better the assume

Brian Martin

today? the balance overall just remix, liquidity growth to It's is the sheet most you and growth of much. growth sheet is of balance And guess, excess talk -- -- liquidity the that's or you that going balance the assume growth overall the more -- helpful. then guys to have, to That's about the the be fund sheet there just the not lot you loan grow to of going a not Okay. fair versus from going if as a I

F. Morgan Gasior

a and to generation, assumption. year, decline. that to favorable do really would Obviously, Yes, the the some asset And environment a be fair actually quite that's net groove to funds lucky, I we growth. particularly of probable one, end looking be of then towards the absolutely a most the think And cost we probably of if this do we get might on scenario. continues if get

we smaller opportunities M&A Secondly, a couple have pipeline. of the in

a of situation. more process is One

more opportunities The lucky some to would type three, we other one And themselves. growth situations. prepared out those do two than are we're if discussion get see of one opportunities. those we present those with And if

end with the between I one give So Again, growth opportunities. or likely those close stable sheet. those us towards the towards some the is the good balance But XXXX. If start acquisition smaller two, most get year. probable relatively say, of scenario had a would end might the would year lucky We of anyways. really we into would two that

Brian Martin

Got you.

about I thought is Or of... ratio there on below guess, I mean, you as And target Okay. a what's is loan-to-deposit ratio, that your think I kind is XXX? the being loan-to-deposit remain, to I might, the on that goal guess,

F. Morgan Gasior

as us. deposit it's noted so you've is issue in It rarely the well. a off If usually wholesale slightly works at above throws pretty exposures. usually continue to And an -- that portfolio for reduce around is we liquidity Again, much or XXX-mark, this cash fine. previously,

funding. continue. funding really core have of we're the excess we almost off exclusively, especially XXXX, part And primarily, that early So in as liquidity will of

how to loan-to-deposit core useful the So not that ratio And of focused liquidity think looks the composition we're as we the measure. that's company, balance kind looking on a as sheet, managing I how -- is. it -- just of the funding. of dominance really but deploying at are posture plus We're the is number what

Brian Martin

Got you.

your like they Okay. parts, with nicely this funding seem about quarter. the in thinking the just different -- ticked the It the Morgan, down you're just and to cost going -- your And how how on, with I the environment? put outlook growth all sounds -- just -- the guess, if the margin, thought the rate buckets on you're like maybe about moving we don't

F. Morgan Gasior

make those Yes, I think it's really to tough predictions.

north is a revenues think to of but a also reduction around know to at will look little get and maybe are going some We $X saying of difficult yield though, you some portfolios of somewhere portfolio noninterest in to going bit is it's it just million-or-so, the we portfolio That funds, how the then have growth, grow growth and reprice. be little cost those I going have average better. to income of X%. if that bit we'll repricing, and

in out to they if of want or their right to renewal rate. Yes, customers, they're march prepay, and going do are a reset of a

We have programs it. to would do available continue. that to I And expect

surprise we the that and the of in run, second year, So, margin a compression, itself reverse and to the of the year, into us it first see cease of net in certain in the expansion a especially very might interest the little bit half margin but in the wouldn't amount net short should fourth of half quarter. actually interest third

now. I the right environment that's the of nature So, just think

You're it order will it's going we execute our that really the in resets But resetting generation than do that resetting already around on cash rate we funding be additional probably on those overcome refinance. whether of customers extent the will be side magnitude a turn greater slightly to exist of if considerable That have to a short asset side able be and term. amount impacts. assets, it due or asset on to the to will in to looking produces a can on a cash goals, the on loans

Brian Martin

kind million interest is got about in type talked I guess, as previous to targeting? far $XX guess, I your you're level what $XX of a income, of as getting in And that I net fair goal calls, you. still thought you've million, -- that

F. Morgan Gasior

us compressed fact the not that coming to and of need position realignment fast a credit change right. this we're like, That's and is, to the we those into as and we to get absolutely rate get you executed the least achieve to this did this amount Because of what in down -- we still is take cost has as in despite the would environment exactly risk goals considerably, doing what funds there. take doing

The segment. a particularly but It gives risk each environment overall. it But bit segments, risk, return us good in of harder. increase these a good still credit clear only little governmental a in in modest the for some made opportunities

And start million, as or that of end to better the $XX getting we that the $XX year. to to get million facilitates

really our the of fourth XXXX, the per So any then to get on and rate earnings it us quarter a without $X.XX add if to is share we're you run into M&A back repurchases share to course what year, do during headed quarter trying activity. and by that's

this try made assets still wanted but it XXX, average only XXX goals sheet what six doing So, we the harder and months, to balance said we do. to to better the in last get return the keep changed, on haven't nine to or

Brian Martin

did Okay. guess, about the having in you I Morgan, grows talked level, into fee of -- hear much think sounds XXXX? I And of I and is XXXX million I don't like $X.X I in added income fee it expecting XXXX a and I income, maybe I there guess, benefit guess, was know benefit that initiative, was it as million estate about you real I is from, minimal get the -- not you that that that $X.X know -- talked maybe think you're right? maybe the

F. Morgan Gasior

Yes, we so. would hope

are on to just is who that than bankers, the more experience, people environment. and understand accustomed As banking bringing I in products. mortgage markets of They focus the capital different change have experience the they said, commercial

different have months, amount adding in of spent for six placement. to four time We considerable the last sources a

portfolio, capital not construction three construction bankers added or And do previous in in bit of loan quite one side of have two amounts So a the low million. as lending $X different an that has the example, but we of in with a market support product as sources they have as the focuses. lending We life. different done

but would will fund the that that that just capital XXX% ever space, And -- developed the that's one is that what's near market available we a get There portfolio, loan advance. And is do we obviously in hospitality the wealth just operation. it's market. in is sovereign recently nothing backs that actually they source that that

So, whole if -- world up that type you to transactions, of a typically prospect us. were product availability take commercial in banking that new of and for opens the customers engaged that opportunities to are in

We given to aiming we're where reasonable those We just that's and folks million they're it. with. to there, number for getting is work So are But hope improve obviously out relatively it the a $X.X people. think on number seems these new XXXX. a safe

this times then more they things much thought last both we the you than many also to it's have changed And something they else didn't than the happened. just tell can't the event. I transactions It of case is is some how minute. seen time-sensitive change and then cases close, seller at a in process very were an going something close, that

a So, them, we estimates. hope comfortable it to obviously with We but the for felt achieve estimate reasonable like those seems time being.

Brian Martin

under And kind go margin Okay. of I the to on, given you're for. and more a pressure, in a income the the bit dollars funding you be volume yields lower. putting same on the as added the where sounds going just percentage, summary, outlook, the little to lot back it target that's cost. looking like you're lower interest to drive likely further not But of the bit there's asset net percentage And of margin the to just a I so margin are the growth just goes guess, to -- room

not a more, side, more ton to room why the but on trends some the funding is margin cost, trend? margin lower percentage pressure the there's asset the lower, So, which

F. Morgan Gasior

offset that I the we're Yes, loan the new especially initiatives absolutely portfolio, say case existing impact. real that's at that's with And in would estate looking these portfolio. to why the

Brian Martin

you. Got

then about expenses the little Okay, little up you the talked a think maybe I the on about of some the fund narrative a to release bit in maybe being that's expenses, bit of initiatives. to perfect. just And text these

thought some thinking on expenses to how can Just XXXX us if or? you you're give about

F. Morgan Gasior

it. to components big four There's

little bit of to touch million less go that a more one we If people of a than up this, especially first some than the comp is and The equipment more. add in mix base maybe finance. $X will

real some out built I be well The variable comp. pretty people. will but estate's finance may incentive equipment think add right there real now,

these get paid if eat-what-you-kill are So, people. we They produce.

is good at but revenue And the -- point, have, so we expense news and matching. that

So a that's at in vacuum. cop look to why it's hard bit little a

for. is and the comp if well pretty base you comp. generation see people and growth will accounted the The is generate beginning, to those in assets, the we incentive this variable The the And into the you see mode, growth income asset in get you assets. also be paying

the So comp and factors, in base big Seneca. those are two

Next marketing. to big factor be is going

We get doing a in brand-new middle of have things, people. government, we and new variety know and a variety to people new small, the especially of new with to need initiatives

So we money an some establishing to presence. a and have on spend awareness

on will of and what doing, very breadth an given there's We're a of We start the I significant but up good that. these themselves, next in schedule couple going by pretty week, we're are have forward. a say, hundred they pretty out add a heavy of easily. thousand, event None for dollars would

year, spent on almost we Last showed. lease it and marketing nothing

capital And off the there. pool contexts, but The The to Two on it. time XXXX, Real in markets fronts, broader direct people with also is to about will will making investors, doing. also of to have we investors this this that what out be were going going. the a conferences establishing estate, they there. and continue people get It's the the to out then two So just new pure part we're new it's on to marketing do things to know technology. level do is last right sure ground right too. in we'll year market that's and people

continuing to First we'll money obviously be off, spend

a infrastructure. is and Cloud reality. computing cybersecurity On

We hosted have an applications early successful vendors. into that are certain cloud made move our by

now For and Office performing that example, is vendor, Microsoft e-mail well. the XXX is

a to initiatives environment seen. risk of work just the given So on continue we'll that, we've variety

is technology financials customers to going us. of interact is development portals it send with be and in side. side to other the The customer Whether for

all statuses brand-new on providing through other whether their loan year, or of but be Communications banking to back business balance going Those money customers app. real-time compared unit, the actually vendor. to through initiatives we're information or a to this certain that on SMS on to the us that are them amount working or activity save will online

we As but there. some treasury services, also we'll earn add money some we'll there, spend more money

you are $XX that don't quote if that we of set for we let's net-net, a really expenses million-or-so. to have be. it better then incentive incentive, number add when talk that, want we'll it. everything up And So again, sense say might what to see But until

Brian Martin

Okay. And termination you that guess, and all? at on on by extended dialogue buyback. saw I execute dialogue the least on date? you Morgan, from some capital just new the And complete I just front, you that plan I the that, guess, then the quarters helpful. I just has the you That's plan, guess, would mentioned would expectation be that up M&A. the dialogue say recent that from at picked

F. Morgan Gasior

year, the likely repurchases We'll can But the you it that I termination the date. accelerate don't by know. I quarterings share XXX,XXX year be -- say, to would the and our get get million purchase tell of earnings the a big as That are share all consumed purchase, could under XX course target. the well obviously the us towards we help shares per is If priority. the during getting share to shares. through

be our management focus would side. on that on that capital So

short interesting, just would XXXX. hard I where in thinking sorts the There It's in of things. a dialogue it's somebody with equity are side, all bank one it. the changes we we with M&A as had the I predict in I people products of think said, say, to on have -- situation bank And equity we -- markets. the were spring

better then they're starting the part radio a of went for they silent we Then get that nine And notified form process. of months.

so we'll participate they are, do, we'll unfold. successful in process. kind indication What and the that's let but decide we're events process in it, changing results as the their you a of of to if that mind know people Okay, good what of

in voices goes. see two have opinions. discussions, we'll and are more of situations there other those where The rooms to Again, variety with different that are a

have people priorities Some stay. to

priorities to people Some have go.

given good opportunities people looking growth are at, us to whether have. it's we partner with Some the

or the a I So, things, very as would sense. as though, small to but core it again, adding interested -- we certainly It if about situations. these enhances very absolutely are world, And would challenges not it's I in two, we're fluid transaction asset could we're more say, through are I certain long make our just be would, growing franchise. interested. our with quality capital position, that M&A

generation -- different of but the are have ownership we'll one, they that doing than see want something. they have to interested in complementary are. it where But also gets to to have both they very if would a be If we we're there do actually in we're if particular, asset interesting But some doing, to point what forms doing.

Brian Martin

And about-- you or above me, guess, -- size Morgan, remind picture, go a Okay. there just that, go big is how the think wouldn't below we wouldn't just I should or

F. Morgan Gasior

then of north if I side it's million million out of to sense, take And a of smaller small. below one flip some it would a branch gets little us doing $XXX think that, the institution probably smaller market make opportunities. of the that, anything $XXX with $XX million would

pretty million is range good. $XXX So $XXX I the think to million

because Take million ourselves better better pretty to to $XXX execute a some million efficiently be a choices, and pretty good of could them line couple some up place transactions diversity. give is midpoint, $XXX and a we those

overlapping, even maybe cost were some better if to happen be saves. And they

customers, was would and one fine. It's $XXX we be in with that $XXX more to flexible million to million, would million $XXX million, If $XXX a million great stay prefer branch than it spot. -- $XXX sweet little is good $XX that too. but million good bigger bit So, stay

Brian Martin

you. Got

Okay. helpful. That's a just moment. for maybe on And quality just credit all touching

the year? you in can't and Just growth get about credit it levels think mean, an as the I like than give just currently. I it of us any better update? charge-offs. you guess, I is this looks guess, and expect reserve quality And provisioning kind

reserving you pause about So, just just And the anything there this expecting is on you're giving guess, this, we secondly, how horizon? think year? I for strong growth some the

F. Morgan Gasior

the of C&I us. credit And say to payoffs is thing took. encountered you'll from that that actions we that first theme about a the think particularly were some I due last theme, is Well, year, I'd in portfolio quality consistent we see the

portfolio loan We the account. thing will to was it XXXX for appropriate the that's in payoff sale cash do the the and as the right take capital because or in

So, both support we both of have as said, in something a care able them, are customers not that expecting I health situations, them, of space, we're two C&I, and they're payoff to the to them do in want we on on. the

as parting we're say. So they friends,

They're looking It's smaller These quarter. just would we I asset higher is at tiny obviously. asset. those S&P, their ticket, closer with going we own an market the an goals. single credits. But forward levels, strong get to pleased single you that reserve want for B-plus kind small are inherently risk These same to were Middle be the will level fourth on provisioning every are to of companies. results We be year. context, to try bit suppose. We're them the have and of achieve in the going results credit. more the could viable. the I be in the reserve But we B, quality better, say, for a

asset. a short term talking duration You're relatively about

should leases level points, probably seems So little higher the reprovision Obviously, be we to balance a either trend a place on are the -- as -- credits. a reasonable the mix. are could reserve grow again be. little It very bit up again, the depending bit XX sheet, like strong governmental

payments. in volatility some see you'll Sometimes

agency XX, XX, government get the going efficient, sometimes very you're but a past question XX, isn't sometimes to due no itself because be days XX paid. there's Sometimes agency will even

one are governmental this Sometimes or municipal but agency, federal reasons looked at risk, time the is we for there's at state of convenience for budgets all risks non-appropriations even termination strong.

Tax revenues do pretty in continue to markets especially well that are growing. nationwide,

So we typically material as risk appropriations for agreement, and transaction. factor convenience regard it analyzed asset Termination the non dealt quality. by and don't into be is can really in a incorporated

our and to we and ticket be will those do the say the the the higher just strongest greatest credit to both yield quality benefit higher get higher than can. in credit skew quality to small They're would our I the risk. portfolio So, of best to asset still But middle risk going the of we're the sources enjoy do inherently market. categories best

Brian Martin

you. Got

not it's just growth, map back in road of show-me a the the minute. Morgan, sense, outlined kind kind risk growth your in not big you I I In said to situation. of biggest what? Okay. a loan you've guess picture the jumping earlier, or as for kind achieving is biggest risk mean, today the the of mind the But your achieving loan

F. Morgan Gasior

a starting quality see interest strong a earnings. position. I mean, you'll Obviously, compressed asset margin. we're smaller with net Just

the incremental from expenses. an best do expenses it it's income. expecting but adding about is not just will the often typically, incremental not -- our function And non-interest a that. finance we're income And on is continue So area of exclusively, function we this is of nice thing a equipment consequences But or to price. interest and

transactions. see So quality get right the to we can again, if we those transactions, price

hungry volume, the and get So them, price to might targeting. highest quality then were quite get we'll we yield we if get for enough same get take there. But the we can we transactions,

Brian Martin

Okay. And of you it's of you to the or back that X% materializes kind even level, earnings of to it's more full comes kind get just the guess, everything to, you're in if fruition hope back that to for map, get later out the road year, laid as of as not expectation where would year the the expect? growth kind as getting and you you if your the think -- should I kind the be

F. Morgan Gasior

Yes, I statement. that agree with

Brian Martin

you. Got

congrats for new on. color the we'll Okay. more All the and they're stay initiatives. to right. well, updated, Look, on go They tuned I sound appreciate going like

have. I all that's So,

F. Morgan Gasior

too. Thanks, and so, hope we


Instructions] you. Thank [Operator

F. the and conclude like to does back I'd any Gasior, Morgan question-and-answer hand today's session the This to for further of CEO program. Chairman remarks. program

F. Morgan Gasior

and our wish to thank we a views everybody their spring into the present will we year. summer, and for for We later to Well, early talk opportunity get for this and good everyone participation and XXXX you vision XXXX. and


conclude gentlemen, conference. Thank program. This you, does today's the in for and your participation ladies

day. disconnect. You may Good now