FB Financial (FBK) 20 Jul 212021 Q2 Earnings call transcript

Good morning, and welcome to FB Financial Corporation's Second Quarter 2021 Earnings Conference Call. Hosting the call today from FB Financial is Chris Holmes, President and Chief Executive Officer. He is joined by Michael Mettee, Chief Financial Officer, Greg Bowers, Chief Credit Officer, and Wib Evans, President of FB Ventures, who will be available during the question-and-answer session. Please note FB Financial's earnings release, supplemental financial information and this morning's presentation are available on the Investor Relations page of the company's website at www.firstbankonline.com and on the Securities and Exchange Commission's website at www.sec.gov. Today's call is being recorded and will be available for replay on FB Financial's website approximately an hour after the conclusion of the call. participants placed all mode. a time, this have in been listen-only At call questions for be the The open after will presentation. of With turn that, Finance. Director the to Corporate call over I to Robert would like Hoehn, go Please ahead.

Chad. Thank you,

presentation, and that under federal subject statements. implied may in other is FB reliance Many current results statements filed to update cause differ this a obligation constitute periodic statements any or to Form XX-K. uncertainties and in such performance All forward-looking Financial undue reports disclaims future information, materially the risks Except any FB by and any such Financial's otherwise. Financial contained such comments FB FB presentation, by put actual FB events securities recent as or make or revise the Financial's During which forward-looking may and forward-looking A most law, listeners on risks FB forward-looking these of are SEC, laws. beyond control new more including this of are Financial achievements are to with cautioned other statements. or and whether contained to not required or of to statements of and results result factors from ability forward-looking detailed expressed as Financial's predict, facts description

on SEC's would Relations page CEO. which a earnings are Regulation at and in by website In measures available presentation, at and to on Holmes, of President addition, directly of these www.firstbankonline.com the now comparable Financial's release, remarks of as GAAP in over GAAP non-GAAP G. supplemental measures turn A like Investor to FB financial website I this SEC presentation presentation is to financial FB the may defined information morning's include certain financial the www.sec.gov. the most company's measures the comparable measures Chris and Financial's non-GAAP the available reconciliation

had EPS appreciate growth XX.X% always thank FB We you your as quarter had loan everybody. through PPP. to pace. assets had up markets grew Financial. annualized started loan Back schedules. when and X.X% in the equity of of felt were this We numbers call, our you average returned We for last or in we on normal - quarter Thank book per their across share of a a footprint joining in which felt X.XX%, our we of Adjusted as growth that already April, return us. Good return And tangible had exclude XX.X% when morning, annualized our last adjusted $X.XX, common XX.X% activity value coming which great and interest we picking $XX.XX economic back you, that Robert. our to in in of March. delivered or on adjusted folks came return tangible had normal, to most we returning our of annualized,

returned again. a had markets net buzzing. universally to this allowance our also transacting in work XX to of basis In charge-offs our have We X points. quarter, point People have million are and deferrals adjusted our been customers basis $XXX really and declining business almost release

quarter's rebound, in footprint stellar a XX a basis ex-PPP our This results million. We $XXX point reflect as loan adjusted our growth saw was release allowance.

and million, were $XX basis to down points. X are deferrals Our net charge-offs only

well our sign the relationship capacity as of our loan the a strength growth managers. is of of quality quarter this as Our and markets,

the from continues very board. across growth to economic Our came show activity. Tennessee strong Middle

full strong approval We're Birmingham. some for We of also which Our teams location delivered just wins million performance seeing nice in FDIC recently Knoxville, quarter. North branch in $XX this growth. Alabama of a out Birmingham, had loan received

to from continued So momentum we team. look forward that

year new us has team relationship FirstBank has and we strong several growth a to loan they're relationships converting market added customers. million last that of given since of pipeline that $XX approximately Memphis managers Our in

our of and double-digit in XXXX. in we have XXXX high And guidance the point, to to payoffs the are opportunities at them, potentially we to digit single this the strong. good for managers relationship hard growth some in though changing that about they growth, coming we're excited XX% for reach field Our pipeline make and our was growth have feel going remains about expected front could achieve. loan We

cost on press the by I believe where On our basis deposits balance points to our XX for side rates. appropriate us to this still brought We'll we sheet, deposits. of our of lower we team cost have room we our our continue for liability the brought pockets improvement it's of - down quarter. interest-bearing to some find

to create operational growth position continue executing initiatives and in bank way We committed our future. us organic tackle the the performing customer that that the creates for experience and focused scalability a strategy Southeast. technology We're to also highest in customer

shareholder On of this less and wasting see real, seek at opportunistic the list coming those banks M&A, to you're you're a platforms the community our than will as to over a on that to will scale provide to organic assets in continue quarter billion, we at organization. M&A, growth key time, a adding be sacrificing markets focused last organic then, growth building focused, to from moment, profile on determined our pursue over our a quality are also On integrating relatively necessarily us. shows. guidance for traditional produce in optimal define if will quarters with banking I that by the be then at or execute believe We we aren't but and at as to which We authority a resources a in and to Until satisfaction, and results we it and growth in credit scalable the $XXX,XXX footprint associate initiatives the and a currently have bank right than would partner. acquisition less were and but of We and we're infrastructure complementary would that last this client banks can scale Scarcity or Franklin that $X banks frequently shrink. that of retention great they we'll not our funding us. and and ensure level, on great but mortgage, choose At provided radar quarter, in be without Following is few factor universe operate M&A, our business line high our few we to teams $XX the happen like. model retention teams, banks us the based value additive out the with place executing were that satisfaction. we given that risk we combination line. it years. us keep opportunities billion These geographies management attractive customer people believe that front differentiator and local if merger

quarter, days. As moved And were the in the around with has re-forecasting look yesterday, we again. our market the we past third forecast XX movement significantly over

the in Our is Michael going his best of now to section. million quarter, mortgage contribution backdrop I color right additional third estimate $X let for on current and to give million the am $X

quarter of markets, So of to our summarize, strength growth quality our loan the our believe reflects execution. a of strong and focus the had very that we team we on

environment, over improved faces a remainder but should Mortgage to of continue We expect the an provide contribution. growth challenging that XXXX.

in Greg and our to have the importantly, funding prospects we the more we continue we the growth that and improve us. now we the that there. have to over on processes room people, to We think to I'll And strong front turn credit. some costs, call have the most systems discuss capitalize of

Chris. good Thanks, morning, And everyone.

we you as As continue our our scaled can improve. economies to quarter have back credit this see, disclosures local

with Delta positive has across on the widespread related we variant picking keeping case But COVID about overall and XX an the We country. the performed steam the up absence how the months. shutdowns, outbreaks feel of counts are over past eye in portfolio further some

as an million than deferral. a While full continue with outstanding. Hotels about as interest can On $XX that had we in operators the better things of the million as circled loans that an reporting bulk are see can for on remainder one had that have those, are a Of hotel onset trends, smaller the so have XX, million our $XX issued past, down as those payment how be with to seasoned the actually that we our more less risk but loans slide pandemic. clear XX, we deferrals highlighted pay-off most Also slide industries XX memo well. not this at helps unfolded. our overall quarter, optimistic managers all We roughly cautiously and our principal you flags. are see concern you update who are on an interest-only the the we at and to on of we've most $XX component, schedule yet, viewed improving outlook had properties largest especially from newer of actually benefit

We have in challenges segment of with properties as classified specific quarter in a quarter environment but monitor stands fairly loans list, assisted first out our in couple last comfortable them No one living The with a each the call, due we noted these outbreak. operating continue a for having current COVID pickup to did feel healthcare. this segment's healthcare to at industries, point. our but of

we points. Across during the XX, non-performing close and Classified our which this in And and will feel We loans those credit performance NPAs metrics. of basis pretty numbers monitor each were displays points slide quarter, this lastly, our XX loans, quarter-over-quarter. the board, improved moved our and charge-offs comfortable at loan X continue minimal with closely overall to the saw improvements quarter. with I portfolio. quarter basis health down

to I'm loan As our book pleased our highlighted in compete Chris's markets. as in the aggressively too, see across teams to pickup continue comments, the

which core turn in our success. and historic identifying to to achieve and to over the call are Mike. associates be company's diligent our good asset long-term the I'll growth now opportunities is balancing continue profitability, people quality Our of

morning, everyone. Thank you, And good Greg.

achieving Speaking to and of the Mortgage $XXX,XXX. as first contribution performed illustrated for expected slide quarter, a approximately mortgage six. we on

the our a impression to fatigue markets. continue margin housing and volumes capacity industry, to excess of reduced We in shortage see refinance and due in

industry. the be expect housing shortage capacity and will a be mortgage see we margin We the headwind compression continued exit until to concern a

couple However, stabilized margins last weeks. of the over have

the on the the lead could from early to adverse of given somewhat Additional refinance too the environment recency both to rate market in but by guidance tell. and removal which fee refinancing activity, of comments of more FHFA it's is Chris' changes challenging

headline net interest our to We bring number margin. quarter quarter. XX second first our quarter. cost X.XX% deposits compared were on X.XX% to the remain basis in saw Moving able flat total by at down essentially We of this the to points in

our on improvement. we room costs, funding focus lowering to and see continued continue We for

cost deposits but higher basis slowing our Our the average quarter is approximately re-pricing have the million cost as XXXX of do CD majority re-pricing $XXX campaign, around from in weighted it through made the XX a we of third points. at we

on excluding the X.XX% the during and remains third quarter first yield in to contractual XX that quarter, the basis points through the continued X.X% range quarter. new fierce. Yield second PPP X.XX% dropped by X% the on in few Our X. has quarter originations loans, first pricing competition to came of at from as pricing in weeks

a So approximately loans at immediately. we to we low as variable $X interest risk. see we do - would that longer rate fixed dated continue shorter risk rates our have have kept we yields traditionally see to to to compress become paper rise. fixed expect rate term begin re-price know should in in contractual When rates can addition an see rate rates until loan expect billion rate that to rise, credit We

XX is treasury for to sheet sensitive. the fairly portion our As securities asset quarter. $XXX amount approximately opportunistically in market loan yield basis in deploying a After liquidity increased balance portfolio purchase paydowns second $XXX into X.XX%. yield million tremendous the the that from increased in quarter, liquidity. first portfolio U.S. purchases, points XX value [ph] continue of the average have remains after securities benchmark growth our The excess the Despite we begun a quarter result, by of a million of strong We've the year estimated and by run-off during on changes, security quarter. securities our

as expect by couple margin same stay purchases past absence We relative to the positive in security portfolio. In mix would rate add we've declining the be duration new in of we in to continue earning that sheet the conservative with offset to with the risk of the changes increases, balance relatively with quarters, band yields. the for continually been being a asset we

declines. cost should Our to of continue have funds also small

growth, asset income term asset-sensitive sheet. interest balance through We net grow maintain the earning will focus near longer of term loans and to the both on and in continuing upside our securities

saw We this our Moving in economic to CECL continued forecast quarter a improve. as $XX.X to of million release allowance.

As quarter forecast economic we us as maintain order second qualitative in build of have caused to improving to to reserve. we and previously, have mentioned increase the from the factors a level our first begin prudent what

will Q for We we reasonably releases necessary at expect continue forward, [ph] to model. next would Going the factors currently are outlooks to pinpoint risk not in the further are that continue up [indiscernible] forecast that few to quarters, assuming weigh improving over the any improve. picked

sale on exposure our $XX decline the portfolio, additional update an million our for we by As saw commercial quarter. non-core held during an

quarter million X a we quarter portfolio, XXXX to improving $X. saw on of as gain economic $XXX,XXX in of the in compared the first and $X.X fourth XXXX. loss quarter, in paydowns gain million our these a conditions, an With million a $X.X gain and of the third

to continue mark-to-market and portfolio is maintaining the risk. small marked our feel for paydowns quarter. that expect as the continued or bid, gains each while the portfolio, portfolio appropriately hurdle Until hits remaining market and is our we and losses we We price, the adequately the buyer

Speaking our to expenses.

turn higher the implemented we expense close. expect had mid to remaining our call Chris were current of and our the took systems of exceed to that, expenses two as the in to year, level over than each to anticipated, next We quarters over expenses quarter's digit back opportunities to and advantage be range. the expect With of we banking banking I'll year's Our growth. single we which don't low hiring support growth the

we'd with Thanks, Thank for performance FB we in at loan operator, open interest particularly we concludes remarks. team's color. Certainly, the everybody pleased for the this questions. strong our the our and you, this Greg delivered results, for to And growth. Michael, like believe point, prepared that Financial. and That financial line quarter, your we're

the Scouten Please Thank you, will be Sandler. question sir. Stephen first from go And [Operator Instructions] ahead. Piper with

everyone. Good Hey. morning,

Good morning, Stephen.

XX% start maybe very level. just don't bit. see level other was So Obviously, with be peer that growth little but out, the think near think shake anywhere a I here they'll loan a number. We'll I how impressive

to, just real strength were other other any seemed the to led the So maybe more than residential wondering, estate growth. spoke there growth. was that nuances of It markets you like that there

dynamics that? to what or maybe just So holding on there? more sheet can you talk that Was balance are the

I'll Yeah. board, - - go two speak certainly growth it's Stephen, a it can across speak it, But first. and We came to really, number. and the the components to net

impressive board, – the we anymore remarkable across we balance multifamily, us get growth occupied, many look probably couldn't that well. owner came in CRE, great both segment. I some mean, our across of didn't - originations, surprisingly to C&I, it some residential as It non-owner And at we performance, for led area multifamily. as an you get - can good there's growth you growth frankly But actually the to and biggest the had good well, - that's in So that higher even And calling you fundings area if in was paydowns. our Multifamily is us. just biggest continue and particular more for well, funded what the area. we paydowns of turned growth - I fewer had level we in had paydowns. an number. but actually, was originations it We impressive had And but appreciate it copied, probably we was balanced.

anything the to across balanced board. really was add? it Yes, So

side $X I $X know, million, loan I'd a know, in And that deals it million, representative million the dollars across there you point saw I could that of are is well. footprint. as Chris, lot mean, $X the you balance add also key.

a we be of talked we'd not And a a and could it's o'clock Yeah. at And you thought - activity. on open [ph] walk if things activity Nashville see back we Tuesday, Nashville, up, Broadway only down morning of lot see the the across you'd we markets X in that once certainly really it's in surprised even lot

balance your point we residential loans we and to we that do deploy the the If and Stephen, more it's is that, option. benefits portfolio I'd of mortgage on choose and putting about of have one division. the ability to – mortgage know, you add, that Mike. to sheet, sometimes do

out there. that is So

I on is it Is balance of or or... Okay. shorter And you term are in guess, strategy And keeping of or that general arms advantage took a this you shift production quarter? just kind something sheet? the what

stuff on Yeah, but it's it's type [ph], bits sheet a We some the footprint We're shift. customers a production. basis. market this customer point. at on in do at not XX% at not of of our jumbo good a really the selling I still go-forward in piece mean, big business we'll of strategy that mortgages secondary little see put but our business, very

contributor, And a net was I'd huge contributor. was but a of say payoffs, it it not

Got it. sense. Yeah, makes

give how repurchase, might be come out kind especially Okay. many then the share And what potential don't about stock you look you pulled if on commentary deploy targets more, terms somewhat? maybe back I would came asset and that be a to feel be about know, sizes market. the a having how you of doesn't with at? deployment, targets were ability Can could little you in active those maybe that us would they of guys it And aggressive then about, you the mentioned like a you there? maybe handful feels capital And thinking of and aggressive if might for maybe be M&A capital the to your M&A of

Yes.

we - a reasons. initiatives have mind, that not can at including and We've like we out a and think of everything we think what on of aggressively we we've I internal a have you in feel always our for and experience. we always couple that enhance have M&A least often referenced taken been do - the experience mind. plan pursuing that don't do, of been and I've in we've to position quality M&A some One, focused plan that in have the of associate not our really On quite our front, just do that. that customer a about

lot XX really The months, size last And so over them. we've in focus had last over had we've part on significantly lot want And a can the of momentum. is significant it on disrupt of and That's think because I of we and that company you a like grown shows so don't see to focus the through. has that. XX months quarters this a doubled it

- we double-digit but there comes to we in know, mentioned there because keep not high franchise, for hit - quality - there so double-digit when mean, names that's list It and of kind scarcity but out are are are do footprint. it a you our I really of would them. around not small And of the many that that fantastic, just - some I us

some so years, X X them for not fine out of or may of soon, is X, but sometime another and which reach And is for completely them, some us. may out reach - - which all

are the and timing. or of down less in not we'll gets know, upside, really a terms I'd those are and And maybe million And you $X even than $X $X get of go point. names we you we our would how that know, because from the of get would wouldn't up we opportunities on consider that those names. opportunities. to billion, we'll on - any that But us, acquisition about billion of called in it million, - range on just to $XXX - we'll those consider that. immediate out under, than somewhere think that go for are and bigger We pretty it's bigger be future $XXX little with anything reached we be too, bankers as billion targets we where would to a anything so much in get to not investment to grow franchise. opportunistic and aggressively. not on - just we We billion too in one say, $X get good level, do to sometimes And matter by but those size. even that's anticipate as the don't terms be that then the that to that We wouldn't at - an is wouldn't That's

And Yeah, and math thoughts, attractive, following just repurchase helpful. then the a tangible guys capital up that's really maybe more the [ph] lot mentioned little down excess more in on would a obviously, have share to you book, - you Okay. X.X now. be gets

think today? that you do about how So

continue. scratching move We head. couple I'm Stephen, tangible, accumulating a We're referenced it's possibility forward sorry, capital, that And at a shares accounts. - we're Yeah. the is of and on a thought, exactly expect our to X.X of we you right sort as that. you're lot quarters. certainly of over all times of we Buyback next

And makes so that the buyback more look attractive.

- a we're for so us. And it's consideration

the And Okay, congrats great. great for a on quarter. Well, color. thanks

All right. Appreciate it, Stephen.

ahead. next our Please Hovde come go And Group. Rabatin from Brett will with question

everyone. morning, Good Hi.

Good morning, Brett.

I mortgage, it how And maybe $X in wanted here? then sale that the one, or first for got talk we for about Is to assumption. - can that does assumptions trend talk the rate does on maybe contribution that's sticks that the $X drop margins that assume, the you're your XQ, to we've ask just for guidance down gain about mean million that. the on current here, that from assuming million

Yeah, Brad, it's Michael.

the rate rally, the say So it doesn't we The last quarter, pretty of X through tenure framed of volatile couple that. recent Obviously, has really, to here. before the as X been days. some include really I'd look

maybe there's think tailwinds we So behind some lower rate this that environment.

if coming consumer retail is that's where that in have businesses. X.XX how is, long you you a a mix look tell look margins from of at And really sticks slide would kind mortgages on kind pipeline weighted not early just that, our the it's average, at direct that And if been our then margin perspective, but range, if really which too where [ph] and on so really follow. in include and of to six,

couple And them as here. quarter-over-quarter of over last so a seen which the consistent for pretty is weeks, it's nice we've contracting been thing

the So seeing competition out space. next some stabilization. pretty in comfortable for of But in amongst couple weeks. We'll see here now, how we're that plays that

here. the but that appreciate other you the just mentioned the then wouldn't the expenses you I in from thing talked hires color if you expansion Okay. accomplished talent the wanted Are you adding you also you near And and there. of was might and core look to expect Birmingham, And And other to sort terms about grow at? might what highlighted of markets what term? opportunities for what bank in, any? those be

Yeah.

never day And for a is XXX X so we - recruiting week, a us. opportunity

And to revenue could that. opportunities we or always so as producers either add get teams we individual do opportunistically

we And getting so falling pursue. be terms added forward. big new where side out that, expense or to moves that's and or always that think things the expenses that we to the of, big comes will expense something of When say, systems continue there's like in it's we side, from. that, - as we things look a at roll about and and we'll personnel with it constant think so things And statement

see We to for allowing And expenses know us get that of in that - be also going the significantly adds go so some to we don't to we're a but reduced quarter, personnel. actually few higher. cause that's anything

adds adds key risk We the financial area. only producing revenue we've area. some side some continue for key really made in in We've not but of talent the on the to the made business, look

add to continue the we upgrade going when we're our so chance We're continue to talent, our talent. going to that. have to do And to to

Great... Okay.

structure and do of we within can our can But our we do quarters. the expense Brett, within you, that couple next we structure. think but we that thank existing expense think existing - Yeah, for

Okay.

right. All

And Please question Davidson. our with Fitzsimmons D.A. next come Kevin from will go ahead.

morning, Good everyone. Hey.

Good morning, Kevin.

the at if another of mortgage mortgage, looking I'm Just banking on - so of follow-on looking on supplement. just income the page components at I'm question XX

value of I a additional And to also to going assuming about but you is from going Is that be reasonable assume gain hit will you're to quarter revenue, be forward, so pressure be that, know, about come the could would that - $XX.X when that's some fair million happening fees what line. lower, it going think assumption? it, and on originations there fair this

Hi, Yeah, Good that's morning. fair. Kevin.

XX% pipeline You call has come see that quarter-over-quarter. it, down, the

And so really lock drives that fair that drives, value rate volume the and new mark.

hope out and seen we some bit growth pressure stabilization see of of a the And to this the would refinance - we've move housing. activity to from Purchase within Back little there. be activity. question rate so under earlier continues

go because unfortunately. So Gain expect don't a would we your our is obviously, assumption out correct. lot volume sale, follows sell on of that whole smaller it, But will down it that pipeline.

And opportunity so shrinks some up volume. pennies to lower there with pick our

to high - digit. previously was more the correct? a thing Great, it a a it single great. mid of Thank on - it you. that Is And housekeeping guidance, loan just want Is to growth taking just digit. up to high single

And to That's this point. should It mid at we're be correct. previously was high high. saying

just level a or level. Okay. it? Or And more Can basis, a that referenced day that continue you year window? it CECL reserve to improve that what you more And of you be? stay of releases us might for one further here, and and you you when the us then strong at is, combined level on level if and remind remind outlook the know, you - even I could would consider still is you're window, approach appreciate are one you're what something the Are and what here? assuming year they where looking from a at at looking two - we be the you're roughly a indicators looking outlook - very

come you me probably better don't it's to want the least. yeah, Probably I comment, the - Yes. but Probably Michael. - can from

XXX billion changed combination $X has XXX don't environment. much, that The Yeah. really I it the Kevin, from business as $XX referenced, to to Chris billion. but going changed think it on because was so about around like originally,

that's to one. about So tough day think

expect And next it of of over look expect in down, so kind move that obviously, we'll quarter. wouldn't we forward quarters. would the to things the we to down they're couple and continue and I path move third down moving the happen fourth all if

our it grab the as XXXX likely pushes going variant we're economies Delta stuff. into to on As that in all and

look it's So one, think a I different such immediate of... But day don't than we're move an down. that's kind

Yeah. the it... Of asset,

that Yeah. want And number I much weight too to a because bank different it place it that's about much was were I when why exactly asked that - at you on guys didn't point.

Exactly.

that's come in out. that's it's we and you it because been coming it back I zero but I know a a slowly what out. try lot to CECL lot that's make allowance, don't a put and in think we earnings And - what the try from too. A on the I it's back - way That's know, year to good do good it a do I got in - frustrating to core started now summary. is it's with to And - and does hard it functions quarter-to-quarter. we've suppose

to, don't And that we things as we to get expect so on any expect future we time and we don't we - based future say, releases, any transparent be we're on releases trying them trying as frame have have mind we but to. if to of goal we expect that. in And as would we're can, continue when look, kind

answer the to And it - to can't as I we'd be answer, a we we But able because we like try on frustrated as probably so as can. Kevin. as as be it's transparent get little to cleanly questions

is. it Chris, fair, very all That's Yeah.

be that those on scenarios, looking front? there market where If are differentiating would last are are Just in markets that such you'd But more your the in. that the I one targets maybe certain Birmingham would markets footprint. I versus around - of more of includes you would those up and to anything for are those as Carolinas interested maybe so opportunistic that maybe kind in some the the if at outside M&A, you're between have not sharing a novo. the assuming targets me, one just you of kind Northern current of given de appreciate is list be Thanks. came strategic targets some open on this or Georgia. that assume I'm on comfortable

our you today. and all in around - geography, well. any significantly is in for I It's into Birmingham call It's list but geographies. geography. our and don't pretty and Georgia in us. presence our Western okay. taking reach the into the not would got part all call thing We We new one we And geography it geography Carolinas, you - read have With today. be a wouldn't Northern would And say anything us physical around is in that North that the our in of Yeah.

Western we're as North to really mountains flies, the say barrier here few as we're anyway, got to of close - would Southeast, are crow you Carolinas. If Carolina this that the close that But just really the part down in to just at point we travel. a a

it those. within of zone. areas, And geography. the so of be Is we out of those - all That's And that be don't would of really be outside are than in of kind consider But would targets areas our would those helpful, of the types to that targeted be types Kevin? our those areas. within outside

perfect. That's very Thanks perfect. much. That's

Okay.

next Catherine will KBW. from go The ahead. with Mealor question Please be

Thanks. Good morning.

Catherine. morning, Good

if you're up right, your - expenses level that you see saying on and bank think will core make hearing want just is just here. follow sure expenses I from we're grow - that it so to to Wanted guidance

this quarter. remember quarter up be and of next of this to year. you guided think that growth growth you just about pull so taken annualized run And a and is XXXX, see It had back of rate last that for kind within of that? have rate that, bit rate about you a digit and coming rate then guidance what low changed bit just year? fourth like that normalize that maybe that million and kind to single quarter, a - $XXX was that what's we a I get to is should mid Can specific talk seems is Thanks. And we into growth kind as little little and kind

Yeah. Catherine, Hi, It's morning. good Michael.

Morning.

we the year, fourth high was, third and the second the of don't rest right. as as quarter be think So will quarter

to maybe expenses. some The was number normalize actually expect single slight pressure we low or for XXXX. So downward guidance that stabilize, digit on around

do and to decrease comments slight in been expenses the in see of But the some year. So I clear not have there. for may a stability expect my remainder we

Great.

Okay.

is down of this year then come expenses for core base? the your rate next So and off from that quarter expected digit growth low single

That's Yeah. right.

Perfect.

Okay. Great.

gain the versus that. direct Just the wanted difference kind and margin clarify then to between business consumer And of in footprint the business? what's on sale just the core mortgage

Catherine, this is Wib.

space, front, to XXX the And range. retail in XXX. direct looking you're the probably XXX the looking XXX consumer to in on You're somewhere

it. all. that’s Thanks, appreciate Okay, great. Good quarter. I

you. Thank

Catherine. Thanks,

The from Stephens. go ahead. Olney with next is question Please Matt

Good Thanks. great. Hi, morning, guys.

Morning.

of XQ, far on return clear those back XQ and levels compare second paydowns trough in do What the saw I about the we in to compared these loan a as the quite Thanks. looking rates? as could what half how eased Just bit How pre-pandemic? the you're and the levels year. utilization think the growth, how pretty but potentially to

Yeah.

we have the significant able quarter, couple in actually still not paydowns We I and been a Matt. second may we're loan things, produce have quarter So to XX% did of the clear, and did growth. have the in

So originations. we the in quarter, we new really funding. look - our significant then at when our originations And second were

be And moving in particularly so we in lines. much bit fundings, - get the didn't we got with help, out, I particularly, little honest a say, our fundings our you, to of on to

quarter. the, that on where call in say, were this above I'd they funded it, of in were last lines terms Just million-ish, our C&I lines where existing $XX quarter

for some there, get us. we a wasn't utilization it did contributor So huge help but in

in And the specifically in that... XXXX still pre-pandemic below Yeah. we're sure, for

Probably just probably around a X%, number. round

below way quarter 'XX, X% probably if all quarter, the If actually, you fourth second into - still go early you 'XX, we're X% quarter, early rates. back go utilization or to back first 'XX back

reasonable then the term on the in few back And or of years drill I'm that some want to and that more some markets. it a mortgage core is get a helpful. discussion, issues housing beyond core problem for That's we Okay. to in your the one talking to longer your appreciate to more be of prices and commodity term shorter a trying more need circling about I down months problem shortages markets? that that's supply several going we're is to you that mentioned

It's it talking great know we I more short longer X Yeah. It's don't term. it be question. don't but [ph] be it several months. we'll not I at about - XX it's if least talk We'll than about a about quarters. about think a it we'll talk talking don't for that. now, years from

you and jobs Chris, section something so the especially in Tennessee Right. going I seen, in in-migration on about Middle our before, of economy. of good in that's be conversations frankly, little the footprint, that up bit build all think your is a with And that, hit we've the it the to problem a

strength in in be long we're that balance It's out three, to Nashville something depends don't a hard to does, it few quarters, will talking and mean, talking this in I tight. it's be the of in time given back market, the particularly particular. the going another four balance, market, the it be economy for I years see Nashville we'll on to - and for going for when two, be of we be about it's even about it's how really Yeah. - get because be but going to this to going a

economy is in, a And good. probably The Tennessee that we quite it's least is Birmingham but another other strong. of the as not robust, we states operate, - best where but also markets is the good. still at of as The Huntsville strong. it's very that's quite one whole operate

going some migration And at and least, is longer I'd across say about have this, in us it's so the an think even maybe talking term intermediate places. the term Southeast to I topic

fees of that. what we'll the think out particular? an And forecast in ATM that as expect on Thanks. then could and roll you for keep a housekeeping lastly, strong XXXX, remind saw We drivers amount interchange this you and And be of when that Well, to Durbin just Okay. some the impact then eye you question. us should quarter, any be? you

Yeah.

So about reoccurring will improve. this to too tell, quarter-over-quarter. continue We activity, to more Durbin so that to I pick [ph] economic see $X more a yeah, year. talking car, up early certainly trend. as that XXX drove another the to hit slides Yes, economy just we that's We're of in next the guess, million day. transactions increase hope

as Durbin, soon this will get so be number that we we'll quite nailed with the and As get sizable. optimized,

[ph] XX at technically. actually the We Yeah, XXX. lose

that the basically just number, what XX of number of it's basically XX% So comes we XX% and of out. booked today

worse, I markets. do We lot presence a good that's for a a us. of our it's grow to So in it's retail difficult That not number suppose that math, or thing. and for for of good pretty better continues have

will growing And so of number XX% only it for XX that's - continually growing Unfortunately, year, be starting us. a of growing. next

that means what to that's So us.

Thank Okay. you.

Thank you.

Matt. you, Thank

Instructions] Alex question [Operator next The Please Lau be with ahead. from will JPMorgan. go

good Hi, morning.

Good morning, Alex.

loan what of material business on and Thanks. hearing if on the the from your on And any customers? have color demand? confidence customers some your provide And you Could impact are thoughts commercial on what variant? you're it side could Delta

Yeah.

is hearing that term hope obstacles. certainly hear hope supply really speed force as speed, we've the And as of the from it to We the chain hear and of of gotten up lot with being confidence. lot confidence, inflection have we at things of labor is some year. force. But but sort or both are challenges the they of of confidence ramped as the businesses full as about and obstacle supply hearing optimism labor hear they we're in a last so our And is confidence. reopened term chain. on There hearing of year, and - the the lot near And reopened, half side, were we point, a have there those with full we're a commercial a still challenges the obstacle, We the - shorter intermediate first optimism. half

closely. We're on hear everybody in monitoring I don't don't impact I On we're is happening word, and our markets, variant, system, and same the for what's watching the that's concern going. Delta interested - if watching certainly report hears. know stays hospital on course, the news but of - health we're impact care know with our the we right how

that case country, what markets and things And on them have that's internally - the most monitoring are our the like of seen group are. we've across counts what the increase. level, And certain so a what are - we we that we where have

our impact. case it's do Q no CECL about today, shutdown when we - is instance, one factors, we or face we becomes Michael about things, talking go the - on material in in a case impact. on so when of was But for we And another think things conservative it

in would So doing practically - say, of leisure it activities business speaking, will and usual. life both and I would markets, be it most street normal. out you down And as as as the walk business be people but our are if normal,

the and of again, one Tennessee factor, we from the that from - the the really Amazon's confidence Middle in confidence nicely. side things panning market, quite in benefited in that. migration Oracle the of of logistics say the and on like the I'd lot there's warehouse announcements, confidence has spin-offs that's of Chris, And impacting out a that. lot of a the

the will. celebration I - Xth any July reflection, the in I of I'm largest hesitant you know but with little XXX,XXX of a - back roll to a to follow, Yeah. I Nashville. would people we think we in I There's country going downtown it's I place I if too. think mean confidence, constant so reference, don't have had

but on so around don't masks. TV, degree any And those was think a didn't participate, I didn't there high of I concern see people.

is so of high. population I the general confidence think And again,

see, and community think on a COVID. Delta got concern come us over it's has and other variant a and of and is watch confidence that sort the wait some I potentially high. variants of to Everybody business got the

hear FB we certainly not we it and do declare eye we every don't - keep we it so as over, on as And declare day. don't it Financial an

on this you end on on down it Could pieces offsetting growth? basis, touch going Anything moving lumpy period on was your deposits, on decline? the And you. quarter-over-quarter. Thanks. Thank a

Yeah, bit. a little

is in fund first the in swell to deposits funds of tend they come and where on Some traditional a second and its down then public bit the our quarter little cycle quarter. public

have come So quarter and can would. actually, come a lot lot have in second as come down, can down swell the down the quarter They normally quarter. as as the quite they in not some, not they first sometimes a come much down second they quite in they but

in just public because year flushed a entities so would with many they cash. As are so normal

effectively quarter. And significantly the notice in things, were those And but as can deposits you the in fairly an relationship. know, two so we for inverse also we our in quarter, decreased costs operate flat

and that a so that's - for much little liquidity rate on And as not we to doesn't happy - less have, balance. we're cash as in frankly, when lower sitting now we're trade right

question. my taking for Thanks

Alex. Yeah,

this concludes remarks. our conference the any Holmes gentlemen, I closing to for Chris and Ladies question-and-answer like over session. would turn back to

Thank great of in there of everybody, your I earnings us do and right. is follow-up hope that very morning. a and and you All much this Thanks. the Chad, for joining calls. interaction you your always questions. is the all for didn't day, glad good. have season to that and If I And thank we're appreciate rest you anything cover, we

conference you presentation. attending And has sir. you, now today's Thank for concluded. The thank

now disconnect. may You