First Midwest Bancorp (ONBPP) 25 Oct 172017 Q3 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the First Midwest Bancorp 2017 Third Quarter Earnings Conference Call. At this time, I would like to inform you that this conference is being recorded. [Operator Instructions] It is now my pleasure to turn the floor over to Nick Chulos, Executive Vice President, General Counsel and Corporate Secretary of First Midwest Bancorp. Sir, you may begin.

Good morning, everyone and welcome. us joining for you today. Thank

of Following our yesterday, released market results the for close earnings XXXX. the we of the third quarter

you website a it's If at area it received this XXX-XXXX. us not release, (XXX) press by copy calling available you or of our code may obtain on have

discussion our beliefs. may historical based our current include and the facts statements. These During are today, course forward-looking of not comments statements are upon

guarantees our and Our future comments Safe to subject outcomes. considered and call risks, performance other of also XX-K for not The certain assumptions, or today. be our uncertainties Harbor are risks filings information most are uncertainties and should our SEC and contained recent in

statements following call. like to this it I'd will mention forward-looking not we Lastly, any that be updating

to and results Sander, Here and Operating to Scudder, will over for discuss are Mike Executive quarter that, floor With President and Mark Pat now First Mike Chief our Midwest; Vice our I turn Vice outlook Chief third President the Executive Scudder. President and Chief and Officer Executive Financial Officer; Officer. Barrett, Senior this our morning

Great. everyone. Nick. Good you, Thank morning

level solid, Let also Performance for performance. both my here reflected us today. had me quarter our was a solid thanks add the core, At underlying business for joining of high we steady, activity. but a

periods as year legislation. the various per costs, secrets share the credit overall, and ago, change returns of well a influenced last from Comparisons growth, as in continue the from between impact earnings Our be changes, X% was $X.XX, X% largely that's activities tax quarter's regulatory to strong. by up are

at would highlights to mind, financials. quarter better leave active and and walk the Pat you my an you it intent with and makes look the as certainly that nuances that explain Mark the to then through in be here So

the stemming was into was in will in in for $X.XX cons assets. We where quarter. right billion share, get That from about but Durban interchange the came we leave reflected guided. threshold per simply as initial the with the or at They won't this and million its pros quarter all we of revenue. thresholds, loss line $X the it roughly of $XX around in First,

flow loan right with over the was increased in at to a two volume X%, allowing interest through else, and impacts it quarter on of third sudden accretion points core bit expanded the X.XX%. interest we growth line our Net that income again, various the timing expectation, to quarter for annualized, saw X% Our little of but and later margin net in as lines. and came growth everything basis

interchange prior before. fee-based by were that Our the impacted referenced the loss revenues consistent of revenues negatively with quarter, I

further to away last and a Mark businesses solidly simultaneous which drop up card over from our Durbin, of in these stream, by both effectively our out in revenues about distorted we expense these Now, in income shift were and quarter. further was Taking talk fee-based merchant offsetting. distortions same expense neutral actually that to lead I'll where earnings were revenue saw

quarter. second heavier activity remediation Asset versus was also

result, comparatively our you also saw in that assets greater but XX% drop pushed a As quarter. non-performing about the charge-offs by

lower result, little million. was expense a estate expense that $X up Half numbers. reflected So, as other than our by of quarter in a linked less offset was this costs comparatively provision are real

as and at opportunistically efficiency and our look always $X.XX X% matter, we as here our I and yields what to to linked consistent XX%. returns. market while repositioned benefited from about of further The share non-linear, portfolio look As advantage to trends but holding we ratio our a that Overall income expenses -- practical security is our remains quarter overall but refer conditions continue activity reinvestment credit quarter added as were took remediation gains remains activity forward. down modestly per solid

extremely great that manage the we quarter. us for as through outcome So,

due tax Illinois earning a to net to changes benefit on in our deferred assets. $X.XX corporate saw had tax also We to an levels, impact which

that it a business turn over highlights, kind for me some additional as Mark of with to let color. So,

loans each platforms Great. quarter. came Thanks structured Mike saw franchise our of in growth annualized and lending teams, decent so our businesses, across solid off as had In here investor for as robust, most X% in several businesses mentioned, increases specifically, as our finance, of pay healthcare, modest as and outside as well I'll growth retail branch channels, commercial quarter, commercial including mortgage although range Mike start flow estate remains suspected, was very in muted. of saw through We where and had across with QX. network. growth at the particular, activity our online accounted well specialty as and gains good We our real our a commercial consumer volume this we

across growth Thus, and In our positive few of niches. the we growth we a of businesses activity than will leave which expect level to, performance that QX the terms at from some QX, market acquisitions in growth remain full most level away our in guided mid-single-digit level Payoff guided from lower be modest range some outlook, though. outsized we slightly areas outcomes, still to should to. the our year that in at albeit perhaps of loan high would

This in in charge and in Durban shift million million income. quarter card simultaneous as $X acquisition activity. up our guidance. profit essentially $X with the saw fee-based linked drop up in we were two quarter. million was product, about million line specifically Year-over-year, absorbed our fee QX, expense. XX% this revenue and to income a from result versus our merchant both We revenue these in neutral Moving anticipated $X Taking was where service the of away in also $X -- or X% distortions, declines businesses

Mike a quarter Card, couple in is streams in unusually is up from previously merchant fee result also what we to items be relatively ago. suggested skewed new As consistent in decline quarter away markets NSF. in results here would Both the and income our opportunities this be offset year and what as from very characterize versus of half of businesses. declines to as stream. first were with second similar half outlook of and solid small and momentum irregular fees level results a management expenses, in a quarter, in flow will We XX% steady income continues fee fees for a I linked very treasury said management capital generating of higher the we posted to, were that course, in expect grow but Shifting and organically, the assets in causing to credit, line non-performing a another that asset charge by fee the at very Other activity comparatively well points. gains our by remains with QX, expectations. alluded outlook our drop as XX QX, had to such greater The is in sales base were about remediation part versus pushed modest positive to Mortgage the basis offs going to picture quarter, unchanged. our guidance as we income $XX was forward. wealth overall XX% and This prior heavier million. decline was

the I'll of provision half quarter however, linked comparatively a point this little million, out was than As quarter. cost remain Operating solid. of the up normalized by was our and overall lower allowance less in but that end $X consistent charge-off credit trends relatively forward. in result, offset a OREO with always remediation's is our low level Reality the non-linear, going range a

a So, in Pat areas. will more now few add color

Mark. Thanks

million by $XX interest margin. million Bancshares interest from net interest as acquisition, XXXX, same to period positive Acquired quarter and higher quarter Standard the both million and overall decline and a Net should from $X.X to with $X $X you income loan fourth loan in one projecting decline to growth income to that, I growth, remind of accretion, period compared to compared said point, loan down third the however, prior and our resulting from impact $X.X net in Turning quarter, in quarter. or the in the approximately higher loan consistent accretion and accretion. balances or XXXX, million the the remains the the of Having and to accretion quarter same XX% well we're XXXX. the forecast. in At Compared X% the that higher partially by nearly this in was rates quarter, the prior more in million was the of increase to impact prior as accretion period rates. more $X.X of million the expectations. by contributed areas same legacy Compared the up benefited challenging offset driven

and expectations, points up in down for same to margin, the current period compared quarter the prior basis to XXXX. tax quarter with interest net from of line points margin basis in two our the equivalent XX XXX was Moving

by the his in of quarter to excluding effects higher comments, offset higher and loan negative benefited introductory by accretion This from interest points margin period principally with of decreases increase rates, in both same also impact the loan municipal to inflows. benefited in combined the but driven expanded As of margin growth. Compared the deposit net XXXX, was the two rates in from impact accretion in lower was impact margin third and mentioned fees, seasonal quarter, to higher prior positive accretion. of largely Mike acquired impact positive loan the the X.XX%. Compared basis the

compared average to loan earning reflecting the prior to period earning growth Turning were XXXX, the in up quarter growth, Standard million same due billion securities acquisition up loan and and to $XXX purchases. $X.X assets, compared to primarily assets the

ending pretax mentioned, meaningfully market yield advantage to in This prior compared expected decrease, or approximately approximately duration. future repositioning conditions reflected as average While This the resulted of securities, modest impact balance repositioning reflected of in to of both is gains not not portfolio changes to our take during by that the Mike million. $X earnings, favorable securities third the portfolio quarter. of quarter, balance declined the X%

net results Third income interest with line both margin. in for our and were quarter generally expectations

Looking earning offset see the reported are quarter by expected to stability ahead, rates interest we both declining interest accretion. asset and of growth as and fourth be net margin the in higher income relative net largely to for expect benefits

accretion, margin interest growth Excluding in to income steady see we net modest continued expansion. expect and

As any hikes rate basis. accretion to the acquired in timing quarter-to-quarter keep a future a on interest that guidance, of volatility create can caveat and mind loan our

in with quarter the but our prior from line year-on-year, was ratio at remains to quarter with expense on expectations, our expenses, XX%. prior XX% efficiency X% declining and non-interest increasing the Moving consistent

period the expense, the net decline partly Mark professional quarter. Aside XX% same tax levels. $XXX,XXX, benefit tax to offset acquisition the in XXXX the tax higher $X.X relatively the and ongoing Standard's of in stable operating asset services to addition and wrap-up be by effective to was largely The remain million additional Illinois modest expenses in million we with from in line and slightly and costs in approximately that deferred to increase a quarter expense, are taxes, staffing the benefit, in And to to expenses driver compared of were of million dropped margin expense, third increase in Illinois ongoing was $X changes This prior an offset tax in declines investments partly OREO $X which down to the quarter in increases prior quarter, expense. rates primary expect and due for by completed. talent the rates, the total a integration X% down addition will drop the increases net rate in included in expected Accordingly, the run reflected which by quarter. impacted to support decrease Integration to be salaries expenses with from merit in fourth in the compared expenses referenced, growth. our

Excluding the our been line these guidance XX% tax second have half the items, our year. would for in of effective rate with

Now, over to for Mike remarks. I'll turn it final back

Thanks Pat.

of up couple it comments. for I open Before questions, a

we and our our balance of differently, we in to we forward capital for Standard acquisitions Regardless existed on same know, the and time, strength sheet, our levels both the case, there, prior industry stated in Premier efficiency with remain a Asset we forward certainly operational the look well-positioned foundation us, the drive to of colleagues, quarter, of continued our conditions and but and capital and across we've close our higher near top continued those in deposit of the At of As all in foundation or strong growth where interest minds, combined core as rates our expectations, importantly returned expectations operating right our improvement still opportunities gauge. or leaves XXXX ended measures, on return. great and fully Management. to that to capital stood as very strong continuing team or for with improved difficult are

let's it up with questions. for open So, that,

of session. from question-and-answer go the Michael begin Our comes ahead. first question Please now Young [Operator Instructions] will We SunTrust.

Hey good everyone. morning

Good morning.

short both did maybe Pat, start could a kind were you just expect going or result you of a to in little of the restructuring how of kind do wanted provide duration Did of actions on that quarter. actions improve the color effect securities, more of taken? sensitivity to impact with Maybe that the what some you exact asset you and of as forward?

Sure.

same at instruments, saw durations, the we book, So, same we we as the to flattened than curve same same probably effectively of reinvested of opportunity the life, realize mix, that in pretty -- late gains further saw that opportunities go same and an the ahead quarter, the in virtually been some it embedded had the even yields, levels. had identical we as sort

just advantage so we that. And of took

in we mortgage-backed was of quarter and a agency-backed municipals. quarters securities $XXX were three it So, CMOs, sold paper about of million all securities, and off it

in. I duration we CDO so, already -- X.X positions we the virtually about half to by of shortening went actually and our Importantly, ahead of about identical of the reinvested that, like at that guess. advantage and XXth our are we at opportunity, three in related yields and that to only lock X.X, amount to almost we XX% We've of sold when yields although durations was we down the there's had -- it see gain we it But -- repurchased about probably probably took gain wasn't XX those. like a and coming position, or

our unrealistically of low. clearly, of was to it just in take minds, times interest one So, those opportunistic interesting expectations advantage were rate that

that then Okay, quarter. two but strategy a kind charge-offs the just of asset And understand to previously identified, want larger more can being kind there color maybe around a little provide and the led Obviously, ended kind maybe I of to you relationships are color great. just this quality moving you little and what disposition just and point of this the there. up

Sure.

So, been say. full taken still the them, the one is but one disposition a processing we've certainly multibank deal we the strategy care other effectively has taken for that would charge of was -- think is largely one But a and liquidated. really in company I

done. that is by -- one there's and so And large

us, client their with bank liquidate restructuring still sole the debt who strategy and other was the The -- a deal. working an existing with is but

forward there, we position a over control little and think So did have more the a it although outcomes we the quarter. good charge concluded to bring into a

to credit those a XX-Q of to you that of of Both part as well year flowing and that weeks. TDRs couple in you when get will the see

much much how how And the what's the that's -- was of is down balance? charged remaining, remaining Okay. one the size and

six high, figures? figures, guess, it's Yes, I seven

Teens.

Yes, $XX the around teens. it Yes, was you. about the thank was, right, thinking million I numbers but range.

maybe And that. Okay. just touch lastly on

different, but kind the or like that? Just of sound anything there were may some of X, industries between they is they commonality what in

a a One was deal, company, a manufacturer, commonality at one deal. distribution one all-bank multibank one all. No, was

really So, commonality, I would -- say. no very little

I'll back. Thanks. Okay. hop

go Milsaps Our O'Neill. next Sandler of Brad question ahead. comes from Pleased

Hey good morning.

Good morning Brad.

points quarter, Pat, just I the the hike NIM. curious were only quarter you kind Hey expansion. during core eight just in in bps given basis two was the second the surprised of June that so saw NIM of if I around on what you or of late expansion with think core

a that's the versus and see having? coming bit loan a book bit of -- the could to is yield now little Just yields maybe? Mark, about speak where are, And if on what kind where then maybe just books going to impacts you that little talk

for the someone was bit first the take also quarter, wasn't but little were readily for we first or than the of on combination good and I to predicted a at cash We expected the range. anticipation investable deployable in wasn't guess. than more as but be cash for a of funded quarter, XXX, bit readily expecting muni extra of that had we [Indiscernible] XXX higher, than growth pretty cash I'll deployable the higher that, We bit have one loan higher that said. or inflows was -- retention hand the seasonal also just averages so some

saw an little in say, several And us compression we That's spread I comments item couple that of bit a very would last Brad, there. stable for QX. the of quarters. been over

this think quarter that This portfolio. think really little on rating quarter our because we partially put on came one I a average a think. the risk better to than trend, out. bit high risk Two, rating little down profile don't We assets quality bit. for We more effective you quarter just of it's put it's a trend,

see reflection I infighting something, anything think So, is if of more every the that compression watching But you else. we're day. a than

the up quarter. back And to other average at quarter. down look loan earning, fourth also, obviously, growth the the you're I catch as will understand a in the actually cash linked But interest I comment, just

curious, talk just deploying leverage where on you I'm you and having forward? kind as hand that kind that from move liquidity of of as So, comes more about

Well, I that on. just prior was that versus to was to quarter really relative relative expectations our commenting

being doesn't, it doesn't balance million item. higher $XXX sitting sheet clearly that the I out clearly it's it in It in So, mix. embedded jumped a wish was -- as the

the was that? part second And sorry, what of

That was it.

Just for maybe bigger follow Mike. with maybe kind to of question, picture

deals also be this about year-over-year they basis, you're income. performance, of the more leverage kind I had of what accretion look As improve you'll flattish. Durbin kind you what you about, kind at EPS, I'd you quarter, of your think save core have kind curious to kind of of thinking know a forward, what on going but of kind

have opportunity mind in from, go your of sort forward? things infrastructure, just that you so As juice kind looking speak much comes does to for in flat around it where expenses is off and your thoughts the holding really of the that rolls push to

what pretty and talking I with been opportunities Strategically, given consistent we've the the to it's think grow. leverage about, capital to Brad. continue

grow then balance from and look out levels add certainly ability to we've assets have operating incremental modest and opportunities to continue that avenues. we're off certainly access we to continue expand others, relatively efficiency that compared to our improvement and are percentage to deposit on those of any as And the very and we a sheet there's operate we So, meaningful the to improvement enhance hard our talked there, still this relative to and is at Loan before, going And you With that on that about believe those to ongoing the have we to to on I continue expand deposits at performance. look as we look make that. it to today, $XXX are cost million perspective. while can wholesale as base, for in

So, at we'll those. continue to look

And had you off that. XXXX. million our maybe -- come but follow-up giving maybe some handed maybe opportunities in know guys you to $XXX just XXXX that base I one to recent yet, of final meetings of aren't guidance

kind is upside curious, update as any you some to year? out look of that Just or to on think have that next thinking stable more you do

probably more in become incrementally efficient. so some around premature to that process investments midst that Well, had broadly. you made for be to of as to plan think some sensitive give be we're about he to cases, it's is to in what have and guidance then the And our XXXX,

it to our a markets But opportunities that to we've continue we've more So, got our the in our two years. significantly relative mature there's suffice size to grown opportunity nature believe I to of continues business just last advance, the as the that's evaluate technology over the there. both those out of say, got we've to continues timing.

that. evaluate to continue we'll So,

All for the color. right, I great. it. appreciate Thanks

bet. You

question next McGratty comes ahead. Our Please go Chris from of KBW.

Hey good morning everyone.

morning. Good

occurred years. I'm done have on in your suggested six update pretty over potentially about comments good couple seeing of angle? of that's quarters. you you're from your to last past Mike, guys talked what of the interested You eight an a M&A capital rebuild in couple the deals

interested in tide maybe seeing into your up kind Some XXXX? of pricing moving you talked about have of what but competitors away, I'm [ph]

our to environment. consider be you disciplined the that remains as is the Well, are if there's call, nothing look which again, with are in opportunities, of business do different company To and try as that out And trying the for platform strategically the will remains case to to as active. opportunities we there. as the and stay underlying I those aligned in sure me, to many we else, reasons accretive there financially and for they they're continuing and dialogue consistent disciplined, know, that. the you and snowflakes goals philosophically consolidation we across make this, strategic We're of at what key world us as trying Chris, our seems as structures, both,

-- you been for each So, before, per we fits to see To me, a strategy. But and a individual as se at look said it's what strategy. you. those of best we M&A don't an have accelerator I feel of don't

do, as we'll able have the what with we we do So, be as it's to to long capital consider that. opportunities those and continue to aligned

If mentioned other bit Thank in impact How to obviously, would prepared and you Durbin we should for service ask kind on -- cars non-interest relative that one one be line, being maybe a non-interest your this [ph] into great. I be income income. little missed, of I was still understand the thinking remarks, income maybe you about could I of down the other was soft. QX? expectations, follow-up a quarter That's that.

So, was high income skewed quarter, Chris. line, specifically, second to the other the it in

look I QX posted a level, income our baseline we say. number normal would in of more wouldn’t as So, I at than the that other

of wealth, $XX in good We and a [ph] number management potential grow we management, annually. between items. to can growth this continue. in revenues streams treasury revenue We a will of mid-single-digit have good line, you probably management, had treasury number We we've years so that that think ongoing X% a pressure those ahead three mid-single-digits. fee-based and X% have think both the As to million think card, back rates up there's our the go all But revenues of growth wealth quarter. declined NSF of in line for we NSF We them. that think face of

Okay, Pat, for maybe And you. great.

the a you call going it's that -- XX% I quarter adjustment adjustment out think in XX% you we rate, to one $X.XX think it, the tax suggesting of is going I that kind and how missed forward? about is back release, kind of

Yes, that's right.

NOL you based We have are bunch become DTA counterintuitive the a of our in and valuable carryforwards when more that Illinois up. tax rate goes

a did state was but of one-time underlying it a million higher our So, right-up, on $X we almost have expense the quarter tax. Illinois

that be historical tax would back rate. that So, -- a us would than drive to higher XX%

Thank it. Got you.

go from comes Please Nathan question ahead. Jaffray. of next Race Our Piper

morning. Hey guys. Good

Good morning.

Just upcoming rate of a bit more could and pricing hikes. preempting aggressive of of December? And your are a deposit guys magnitude little if future kind that like you've it and your about looks rate seen look and competitors some increases be in like may what less the rates question how on deposit so we the a little get think hike sequentially, you just curious a rates

Pat, bit any color We're for but add very increases seen more a our core yet. want base, little increases. seen for with rate our and a the constantly, to So, in gotten as to of modest lot in core we've very, you CDs. increase of we seen about next it pressure future, thinking just you little increases. them slightly couple -- thus sequentially a there? very alluded promotional products, haven't But the modeling deposit We far,

higher echo to be would larger ask more tend number other exception higher pricing primarily, segments, larger back said the Mark rate first what I and and come continues the demand there certain that echo corporates institutions Probably of customers what the that. based be have sophisticated worth, upon to to ones, on said. a or net for for

enough but us lag that we're going can. as we to high that far to is scale large to long continue repricing So, caused something it as isn't make -- decisions and as as rate that's continues, at

of -- marketplace. and are broadly. that philosophical in the spectrums in consumer always color in don't we little the will drive competitive retail different a particularly, across just that, on we the rates the We are product terms per Maybe market space, se be color where

to philosophically, the just the that our gain Where continue So, because broadly is a we'll core the strength deposit from mix market of out of deposit benefit are monitor we foundation. of overall base the the there. conditions

look are to You it following the may others perhaps of continue we as rates adjust, seeing are mix like, market lag, or see that what may the well a simply so ours have. even of function

sight that So, real don't a lose of ongoing that. have. advantage we That's

got XQ XQ? that you quarter. credit that charge items of going quarter may be color. that you two the in led here then during to third back versus last just the Absolutely, of appreciate saw I the credit it. And duration Mark, versus quarter in to kind you speak the magnitude the guys to it off

do know cycle as lumpiness deterioration sure things. questions. what that's in inherent much say as make understood the I your would of I me I The Let this.

in them in the So, as into we QX. move we through charges identified QX, NPAs them through, and in work these QX came

anything the So, inherent I would say it than in this is lumpiness else. it's more

all appreciate sense. color guys. makes the that I Okay,

Great. Thanks.

next McEvoy go Terry Stephens. Please comes with from ahead. question Our

Good morning everyone.

Terry. Hi

markets quarter? about some this could again start, financing moved and multifamily of of to you just And in Maybe talk light the maybe number you're the around around last Chicago? up that health shed what and CRE projects color type

the strong. quite been But rate has but interesting. is built units in and been proffers, strong. absorption Greater quite health being lot Chicagoland. has The It's of There in coming specifically, online Chicago Sure. a

investors is folks stabilize very our sorts all multifamily of appetite terms to investor a attractive of sell early activities are and the portfolio if asset of and you in So, in able will, that their there's class lot for stages, happening. properties at

as saw this projects, a migration finished quarter go into of it seen anything you up more it as that's go you've book much you a So, as else. which of seen what up, than construction our out much

for have think where our at We in multifamily wanting time, it to of a quarters. the percentage the terms we'll little I our Chicagoland perhaps again, you happened of but So, continue next in this a amount some to of watching range, of of construction this will, has we're keep in just grow been various multifamily, us less if exposure that's couple over portfolio. in like because kind

And then efficiency thinking follow-up Brad's and just a improving just about expenses. question, on

in the bringing to lot efficiency. reduction network, and done should further network? expect production In down over branch terms plan? further just fine-tuning, on past to number of there similar XXXX, there a Is on -- we years go You've branch improving years something opportunities the branch the of the are work a

great our is a an perspective. question. evaluation from it's It Terry, ongoing of Again, source

think in we're reallocation reevaluate a areas I the business to world constantly you're that customer We're competitive. into pretty of of those in we've active and the where investments preferences been kind most making investments or just maximize adjusting. driving the where are having where

also as simple candidly opportunities there's we them. think do there's and think as there's that customer as you about in well. And opportunity as make I keeping of and I there evolution. the first making as think as our and can But you opportunity just processes what efficient effective

the there? And I'm then ratio what on would business? core the offsets efficiency Premier, Premiere, with core that than specifically much were a a that And wealth last some expense million, think how $X.X question. trying or of then that, just came of of expense just came from On the how up -- the of to growth side, your from in be fees, they much management little offset more the

Premier approximately I million that my Efficiency fees quarter. XX%? of about in is head $X are think should ratio a

expenses are XX% about than Less quarter that, so. a

XX%?

Yes.

of margin good so hit pretty that's see the management about business, to XX% that wealth you'll For XX% market.

again. Thanks Perfect.

of question FIG Please next comes ahead. Our Instructions] [Operator Partners. go Rodis John from

everybody. morning Good

John. Hi

the portfolio. Hi to or it around you going level After expect selling this of more securities to you or million current sort out opportunities on $XXX stay back so, would Mike. there? Pat, maybe the just any forward

inter-quarter. not not lending, I I on further would where expect around we time level. it it year, And into backed at would kind little rate from it term we're to the to we stay it the combined about is we but far I down I average this take we longer be cycle because that, start should think with the growth it X.X-ish will back enough point, fourth just it rolling like in of a don't of a which, get of basis, to growth is. level perspective the range, to ending started you think want back to interest quarter kind grow up. to liquidity close the as to as lag much course, deposit a and there on by the on expect flow to it the point are at an trajectory was, quite we where of this have it's to about I terminal balance really it subject bit, at perspective, going in of sort the sure

neutral balance sheet, from somewhat So, back this it's is because though, right excess think it? the your goes that quarter liquidity probably from way a I securities portfolio, that perspective guess total higher asset a into was about the to

Correct.

know loans, don't I but obviously XX-Q, is you to see would I I that non-accrual be offs. quarter Pat But higher, correctly, wanted one right? Okay. were sure, just say I follow-up. charge some heard make thought other in that made down that you heard as the if TDRs would this you I they the you regarding -- And

Yes. in end second restructurings. that quarter, resolution The that both through identified this largely charge-off classified will and we've talking we been about that credits as being two through as quarter the technically up non-performers flowed

of non-accrual definition that. flow So, and on an resolution, from through they their ultimate way technical deterioration will to the

TDRs. will you So, see

you question stayed and basically million. guess, were release flat the or provide the in $X.X I is, TDRs guys at my press TDRs

difference press release Because the got TDRs. you've what's accruing would XX-Q? in the what between be in the and what's So,

TDRs. both NPAs. Yes, in fundamentally accruing not They're accruing versus

in separate right, we of item, as accruing TDRs are separate -- You're breakout non-accrual TDRs a in schedule but loans. non-accruing up but

So, excuse in it's just of terms here troubled what not press -- release, in anymore assets in our our you than see more Q, it's me.

Okay.

it. -- sound different think I get I if so. can We it can I follow-up,

Okay. Thanks guys.

Thanks John.

to I the session. Michael remarks. question-and-answer would back over any for like This Instructions] Scudder conference Mr. to turn our [Operator concludes closing

have just all always a me attention is your thank And day. you as opportunity interest you continue we investment Thank let for and wish to Thank and interest. greatly that less believe Well, close, to first would your our we with great a you. We we in close all appreciate story. you. great and

you The today's conference now Thank presentation. for attending has concluded.

disconnect. now may You