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First Midwest Bancorp (ONBPP)

Participants
Mike Scudder Chairman, President, and CEO
Mark Sander SEVP, COO
Pat Barrett EVP and CFO
Michael Young SunTrust
Chris McGratty KBW
Brad Milsaps Sandler O'Neill
Terry McEvoy Stephens
Nathan Race Piper Jaffray
Call transcript
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Operator

Good morning ladies and gentlemen, and welcome to the First Midwest Bancorp, 2018 Fourth Quarter and Full-Year Earnings Conference Call.

Following the close of the market yesterday, the company released its earnings results for the fourth quarter and full-year of 2018 and also issued presentation materials that we will refer to during the call today. These provide both historical financial information and the company’s outlook for 2019.

During the course of the discussion today, management’s comments and the presentation materials may include forward-looking statements. These statements are based upon the company’s current beliefs, are not historical facts and are not guarantees of future performance or outcomes. may outcomes or results differ. Actual forward-looking and The considered company’s the SEC, earnings information other for the in release and should call Harbor most risks, as included recent be the as the the uncertainties company’s with XX-K contained filings today. and materials Safe and in non-GAAP statement, presentation well legends other

a recorded Finally, call. This this forward-looking statements and participants the all after company will not be listen-only are in is updating being mode. any call

Mike by Sander, Operating and Officer, presentation Scudder. Following for and Mark now I Pat open Chairman Financial analyst the Executive Officer, be will Mike answers Please turn Scudder, President go Chief Chief question will and Officer; and the ahead. the only. to for conference Chief call Barrett, over

Mike Scudder

and morning, today. for joining you be you. Thank Thanks good us with everyone. to Great Great.

to loans and return for the assets for common our a you same the improved This and as of if on XX.X% along respectively. periods. performance here full year adjusted the us As XX% X.X% year and respectively components Mark Core at for that on a level firms. we year. of the the share when on average our typically last quarter to up over look earnings versus is where of of fourth through very return positives number supplement multiple successful do saw of reminder X.XX% produced walk by and move overall XX.X% core tangible average Likewise, XX% highlights the and Key of a look billion, follow by for year’s over grew the we the a while strong to deposits very the Pat back a a so through you per commentary performance. with XXXX XX X%. quarter, drivers earnings was we increased and and and full was quarter then you active on XX% quarter year, to and have practice, cover introduction the level performance let I’ll year as note, presentation remarks and we our

income the XXXX as our like at adjust grew strength I robust largely the to the for And typically XX it our over is core foundation. X.X% deposit expanded a X% acquisition interest net on overall. way if net Our look margin accretion, year basis related interest margin of our while points you remained

with tax then quarter versus for our Our the contributor obviously operating rate at very effective fourth strong XXXX, XX% efficiency XX% it significantly lowered our and adjusted to was efficiency a And was as year. well. full has from in XX% improved ratio the XX%

included successfully future took well have in we by sometime a of this Northern of In for stage effectively to or setting cost us Importantly, felt our fourth benefits delivering million were and standards some acquisitions the Oak in the as deposits, billion a continued as upon as of targeted that an Collectively throughout which Wealth number completed pending our technology the the excellence of quarter, we the is accretive week announced the achieved business for assets close and and our and excellence Northern on our under year end the build strategic the $X.X and quarter Also, delivering is end over which $XXX as This executing billion almost last for of quarter. priorities well our assets, States to to announced steps been ongoing the the strategic initiatives. $X.X loans Bridgeview continue company. Though criteria in and on course be acquisition integration our add up as fourth initiative. we emphasis expected us of actually will Management to focus next met that a we our of initial in in year. what our these and number year year executing and second strategically closed Bank acquisitions of management. $X.X dollars well billion

sheet of good very and last loans assets basis points last owned. year. that's for to real from Finally, asset shape same Non-performing overall and estate low to XX% our at loan growth. earning overall continue is Bridgeview or strong balance lower will the And at the end level about and room additional deposit XX% benefit us as remains level of stand be XX levels other giving X.X% than in year, are about certainly

capital continue robust. be to Our levels

busy I will talk common Our about by perspective will standard XX.X% X%. risk was ahead very well And of earnings my dividend more from think as certainly which weighted adopting us Tier and least increased to grew and look year. positioned. we end to the our whole X successful the as leave the as benefits to stronger assets the a company All-in-all, as a certainly and Pat

Pat let additional turn So it Mark some to over for me and color.

Mark Sander

in anticipated morning were another Starting the payoffs. our continuing structured sector-based the the we businesses multiple C&I full QX, healthcare, throughout results delivered strong performance on asset year organic in and teams leasing, primarily solid posted almost CRE up diversified was good across loans In finance businesses Mike, strong consumer and growth C&I with and XXXX. for all. growth from C&I presentation. from Thanks of based. across loans million partially as QX offset quarter $XXX XX% page and X we by our

and from continued As we We extensive forecasted lenders. payoffs see call. sales last non-recourse CRE refinancings with property did

added overall, $XXX year XX% legacy loans full that was QX. was about relatively of of flat corporate growth which our organic NorStates were X.X% CRE primarily XX% in such loans corporate million our quarter, and corporate and result, focus were mortgages remain robust solid from a about loans remains production relatively organic one a on to activity. production. from acquired. transactional million $XXX half the up mortgage in and internal Consumer in half four As We underweighted

a and our we expand on simply to that selectively production buy as little earning greater States, of little we we've end asset some of from X% percentage XXXX base put balance to This quarter at range just in On a capacity QX the and over sheet. the last grew Northern the our occasion, take advantage of we chose in the for Away mortgages years. higher been well. loans total at high-quality several we funding

full again typically note in be QX. seasonally CRE As our mid-single I very that able and on to grow should and pay-downs is we strength That is like the the that second term. today year our and pipelines will based make solid the Bridgeview remaining this look to to is that the year quarter. over comments close we said the in note of start that of our near foresee for exclusive guidance of I lower all will Pat digits here the slower some we likely expected such loan would rate on growth the I be teams. which expect

expect provided XXXX separately We to presentation have we on our on impact each additional results have Bridgeview the that our slides. of

fell remains and Turning came largely to asset of the quality. range. charge-offs end at The in uneventful slightly as desired. our lower story NPAs

expect our course, XX to to in and environment, range subject, cover Provision was loan support be provision the to of these basis by with of charge-offs we middle in XXXX As levels guidance. growth. for XX points, this trends in of a variability outlook benign continued year line our plus quarter. on Based should result, credit normalized charge-off

million steady of have Our of acquisitions. core held in CD offset deposit client enhanced up about though, bases. further the acquisition, X at and demonstrated Total some large rate public in Demand fourth September the given outflow of our year-end NorStates. XXth, deposits did, mostly as we competitive client which mix, $XXX Page our advantage together remains We good see a granularity on deposits environment, normal production the seasonal rising versus see in results funds and our by from partially presentation, quarter. were the company, nature our the

to continuing of remains low QX, to Our peers points mix. in due which cost net XX was our deposits relative basis favorable our

expect deposit XXXX, For earning with asset growth commensurate growth. we

net income margin. interest through walk and now will Pat So

Pat Barrett

good Thanks, Mark, morning. and

million of interest X% from Turning same and $XX to X% the interest to or loans earning reflecting higher consistent to yields the same to from quarter million and partially XXXX. up up securities, higher $X down benefited from our million the $X to slide funding guidance XXXX. income meeting NorStates, million assets income in modestly $X interest in growth loan higher $X quarter, with period guidance and the in contributed quarter, up from rates accretion both net Net to the acquisition by compared prior costs. million quarter, prior period on and prior Acquired the offset our and both X%, of Compared compared seven. interest fourth XX% or margin was the periods,

quarter NIM X the basis points of for Moving was points X.XX XX margin. interest up to current net quarter prior Tax-equivalent up year. basis and the from linked

Excluding quarter, from the margin periods, prior than for quarter benefit was a higher basis basis rise same accretion, points in funding interest rates X.XX points linked to the both X XX ago. up more year the and Compared the period costs. of offset

funding were year, reflecting earning with $XXX and sources. the million interest interest compared combined assets prior earning quarter security assets linked loan investment to $X.X Average ago, increases up Average from and billion Turning earning funding funding to growth, and deposits, in million by by from linked advances $XXX and and time billion sources from sources NorStates. $X.X NorStates. FHLB the increased assets year quarter a driven

to Moving our outlook. XXXX

We growth. interest double-digit expect income to single high net low

movements Fed to expansion Once are mid-year volatility again, modest to the of And remain seasonal at continued, asset that, With deposit subject X increase, and additional lessened. the impacts margin Mark we but you will discuss in remind rates, expansion in XXXX, non-interest I the rate $XX to positive rate give currently projections another you I flows income. interest to at interest due want approximately of margin back hikes in acquisitions. year-end. expect expect Absent growth, million. one We that loan mid-year to be and net accretion

Mark Sander

in we strong capital basis, X% a fee adjusted growth markets year, XXXX the was The was flat due continuing fees solid primarily non-interest on card-based businesses, rose a to market up expected. earlier production from declines. cross-sell income year-over-year was wealth Treasury based year-over-year Wealth management Treasury and foresee as Management the income comparison card management relatively as the We mortgage non-interest gains income million solid year. on basis $X outside, On in some and in due despite and prior offset nearly quarter the linked-quarter Management, flat in our opportunities. pressures although solid onetime to

and In and our of repositioning believe years, offering that addition, after relatively NSF swaps from will for mortgage which following year. declining a this have fees, comparisons the be we several been favorable modest of will XXXX level

year. this Lastly, all Milwaukee should income Taking revenues Northern forecast in about our recent XXXX. about we or Oak into million wealth management rise $X non-interest in acquisition to XX%, of of this give add take, in account,

Now give Pat some detailed expenses. will on outlook

Pat Barrett

nine. Moving note rate. to run several our expenses affect to expense items that quarterly slide There on are

First, million million integration by driven the current quarter costs. includes implementation branch Excellence of the and severance expenses associated NorStates primarily and with of acquisition closure employee Delivering and costs, $X $XX acquisition

Additionally, million expenses quarterly reclassification XXXX, quarter reached and and mentioned income. each every and by non-interest as in were of card revenues the to expenses $X for quarter impacted up we merchant a

costs thankfully, change we mind; with from While guidance, which million with And recurring prior relatively the to $X reclass it was efforts, a impact items from our to of Keep continue quarter to Away this stable, talk to revenue, by slides in NorStates, $XX no total restated, Delivering to operating nine. expenses about just have earnings statements be eight for quarter, NorStates. $XX to line and benefits expenses on and is release after plus period million and Excellence continued million we you associated $X financial previous of were in won't in million net additional were income. this for again. these per this present aided

from Our the XX% efficiency down ago. and quarter in of year prior was ratio XX% a XX%

for higher adjust of for proxy for fourth mid-single-digit expense million the on of before occupancy expect in $X a year. average incremental in leave transaction. this million X%, benefit results be change low to Last to the slide. growth Our XXXX outlook largely good Annualize the non-interest pretty Delivering XXXX consumed the sale-leaseback for will note of our an $XX full to accounting quarter you get with as inflation I and million of is taxes Excellence due for we $X

for and rate the largely corporate in tax down guidance XX%, line reflective of Our XX% effective quarter our from year a our was ago, tax with lower rate.

XX%. be effective our to rate, XXXX, continue For approximately tax expect we to

slide on capital XX. to Moving

pleased are with strong We continue rapidly capital levels how to we've deployed the at back previously maintain capital and earned acquisitions.

phase-out ratios treatment strong $XX quarter, also crossed in as and X impacted a acquisition preferred NorStates the the from partly asset prior total quarter capital risk-weighted Tier and threshold. by Tier the trust ratios of during the reflecting during CETX growth. Our quarter the X earnings, asset billion by were of offset capital over securities risk-weighted increased total we our the asset to

Finally, reminder, of remaining accounting January approximately after that on Tier adopted reclassification transaction sale-leaseback past to our as we our rules million and a the XXXX, the from deferred tax, capital. X in lease retained new $XX X, resulted gain, earnings directly

few on next the on slide. comments a Excellence has Delivering Mark Now

Mark Sander

shown Yes, been track. Page the that our The implemented initiatives on I benefits million cost is that remains $XX savings, saying XX, firmly would Delivering such the assured. by summarize program have forecasted Excellence on generate financial of

simply budgets have into year. built impact the we result, and a for this our our guidance As

squarely with technology to any experience savings to and our Bridgeview. in forward, enhancements. Pat of focus Going likely improvements, acquisition pending is reinvested Back discuss client to our on further be process

Pat Barrett

So the of turning we said to Bridgeview in of to is early quarter There's that has second slide the XXXX. on recap announced which XX. expected the and Mark recently acquisition details a close of

a in that transaction of the our summarized quarter's assuming quick relatively earnings And respectively. of is our economics the The finally, transaction early around in with for to X/X EPS the approximately slides current remain value a recognized our an practice, X usual year reminder, expected close. of XXXX, with first with outlook XXXX, generate and XX year XX, full As quarter $X.XX second book we've favorable approximately on and consistent years. of its earn-back tangible both

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

Mike Scudder

active I and move Pat through end very of quickly us, recap and before And just a was covering a busy introduced suggested and year. did as to here I job for them Thanks. busy the year what and I'll as a Mark active certainly, this and great

product will billion which our in market our Oak, Year, clients we $XX networks. to engaged to platform about we management. This opportunity scalability. underlying expansion apart strong one strengthen suggested, and a momentum. balance very here team. largest access Northern providing in got already the As entering look Northern the well States that strong also and under the set a leader the further New pleased our We're are will us Continuation We're some welcome marketplace, services. an as client wealth will forward New superior performance excited. about excited management equally We've business entry assets further good newest we're colleagues the Chicago, Yes. will with initiatives of excited And as Year and with grow we're of our to and enhance very to as accompanying Excellence as sheet. Bridgeview and team our Mark Midwest represents mark of into our and our a experience, the Delivering operational to area's Milwaukee First

Year, significant momentum. we're I excited with doing as business underlying said, amount of as New we're so a the and very enter we So

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

Operator

Instructions] The time. at sir. Please you, question begin ahead. with from session go first and Thank this The question Michael answer will Young comes SunTrust. [Operator

Michael Young

Hey, good morning.

Pat Barrett

Good morning.

Michael Young

the for early Pat based year, amounts and to XQ that the clarify as The the year, this percentages impact? is outlook just it adds so pertains on not an wanted of dollar it's to that quickly in that Bridgeview. items close annualized impact some full

Pat Barrett

kind at around finalized the There's with full we bit Yes, they Federal closing capacity. haven't actual Register that's not finalized purchase accounting. because correct. a working some hedging We're of uncertainty haven't little -- date

XQ. we're early still so assuming And an

Michael Young

year XXXX? Okay. the it's impact full But for

Pat Barrett

Correct.

Michael Young

that kind thinking. non-interest guide. wanted to then on just income higher little the was to up what was And maybe follow It Okay. a end, than of I

of, and So management pace year year feel takes wealth obviously, that outside going just a puts little Anything little a was next get weaker grow to this faster the maybe wanted for a there. to that's the acquisition? at

Pat Barrett

on you Mike, head. nail the the Yes, think

management and areas going in but I comparisons were pace good to Management, continue be seen were I they I the swaps growth year-over-year wouldn't they like soft, we've but think favorable. think we're XXXX. and in say of will the mortgage Treasury modest wealth

have So see million to $X few $X the a we where year-over-year. increase we I can think -- categories I think million

Michael Young

Or weaker outlook, little Okay. And how purchase digits. color view kind any of the last growth production mid-single a around industry be you of volume? a slower, is then that you on whole one loan bit little may kind that But if a in can to a is the one seeing. just provide Obviously, what the similar of as as fallback XXXX? do organic much

Mike Scudder

As assumed we've no growth, mid-single-digit that activity. we've transactional forecasted growth

when short, think but we'll at have coming -- looked we sure, we in little XXXX rates those we'll So to to are times it, a if hit about don't think growth targets.

Michael Young

step back for Okay, perfect. I’ll now.

Mike Scudder

Thanks, Michael.

Operator

with The McGratty next Chris KBW. question comes from

Chris McGratty

good want Hey, question. Pat, Thanks morning. to start for on the I expenses. the

Just wanted make sure got expenses the right. to I

X.XX. inflation annualized you Bridgeview, this would assume of million you year. net savings And the then whatever and but XX I $XX then X% X/X about get So gets from that's

other words, is X.XX loaded saying. in XXXX kind expense fully what So for the number is the you're of

Pat Barrett

Yes, I right. think that's

Chris McGratty

Okay.

higher. X% question a And spoke is, prior a And you than million commentary. It's kind so inflation of about little quarter. last higher our couple the bit it's

I outlook a on last timing quarter? did So It on speaking anything it had Because Is pretty quarter. a last handle in the Excellence? were change dollars the higher. Delivering expenses thought it's what perhaps, relative few million it, you on good terms of to on I looks

Mike Scudder

$X or are continuing year it. little huge when can on to into about a of invest. we're million part And talking not million But $X amount. difference be brings a Oak Northern that of we play, Well, a bit the

we're operational platform, building and whether areas platform, it technology we're not be processing. where cutting So out expenses in

we're with be gotten the So efficiency think that and year. operating as to improve the that modestly on we able pleased to the exit throughout we've and we'll hold year

Mark Sander

got are one -- have line well, some activity. just corresponding items I've Yes. commission-based from increase keep mind in there the of as revenue

discussions the non-interest Mike income expense on extent about variability about outlook So standpoint. adds that some to from start an said we company and you what Mark's thinking that a talked as

as in $XXX excess is of base, aggregate Our you million. suggested,

couple operating here what just is doing or terms level So percentage there of we're of a uncertainty. a as reasonable in million of a of

Chris McGratty

on I the If in color. great XX of $X of Northern would $XXX kind That's you're thinking? back points great. math, kind what basis imply Is envelope of million, ballpark revenues. I'm could of doing of sneak quarterly million one That's if around Oak. that

Mike Scudder

That's very ballpark, close It's Chris. to the a good ballpark, yes. very

Chris McGratty

Okay. Thanks All right. lot. a

Operator

Brad with comes The ahead. O'Neill. Milsaps from go Please next Sandler question

Brad Milsaps

Hey, good morning, guys.

Mike Scudder

Good morning.

Mark Sander

Good morning.

Brad Milsaps

things wanted I you kind markets, you're being just about you've rates. up better that that talking can kind made either in items based the XXXX? feel groups dollars there Are goal. control line you're fees. of to achieve on that probably of follow mortgage, we're But lot know are way. few Mark pretty you're those a confident again going capital million you on it about of in curious, the sounds like production to changes these Just a

you're guessing, I'm we've "Hey, appreciated. Just got saying, up." some any teed color there would But pipeline additional be just at the looking things

Mark Sander

right, it's control. in Yes, because it's well said, you're not our Brad, all

hand, we different of On yes, those I the for those would story say. made areas, for have other a couple

MSR had will some unfavorable XXXX we going some and to note year. improve XXXX. that in we're this that folks would I valuations are we in investments think that production some made we've mortgage, For assuming our commission happen not also

for the a a throughout a don't of it X, down CRE in So our fees to Swaps, was bit those production leap year mortgage I the takes us little little combination bit. great improve think XXXX.

growing be see -- million about think commercial normal of digits. grow little We think real more additional The non-interest mid huge there $X at think fees, forecasting. a underpenetrated we grow -- XXXX rate I we'll our just there. retail amounts, card. yes, in to -- major so Management income nice a really been And drivers in we've talking bit a We card $X the production more single comparison we're we that behind think are card think; income mid-single mid-single-digit I we're again, we're high But that's a year-over-year I think we'll not would million nice digits. to think also for in Treasury And number a will years. of

an there initiative new And we that's add think some will as revenues well. so XXXX we've for and got

Mike Scudder

Brad. I guess, I'll add that, to

are in keep in both of while Treasury demonstrate hard Excellence mind, off Management. and, mentioned, as Just realization, do have we Delivering largely product it's that to penetration driven retail, targets Mark revenue cross-sell,

we're help we've able expecting do will those been what to so lift historically modestly. And

Brad Milsaps

same just the they've are And unreasonable, NPLs seem lowest the levels on it. your in the charge-off Mid-XXs Got a time, at guidance. one of doesn't but been while.

curious, to there's number a that today? based of what looking good at you're do on upside on kind based upside Just in you way think some

Mark Sander

Well, of course, we now. that's one the ones we're see it right of as our giving and hardest always forecast, to best guidance

we So than really kind XX think range that of and think do I of is can't middle much I Again, be. where say, is will normalized, better the to that, XX would Brad. we

Brad Milsaps

And that of know I hoping Has follow-up like they're for before know Pat. of that Okay. part their accomplish to completed? were subsidiary. maybe closing. was you just Yes, Bridgeview deal been one then mortgage final to the divest was going I

Pat Barrett

And will or has. next in completely it'll be be It or it -- the week it's done X. either

Brad Milsaps

you. Thank great. Okay,

Pat Barrett

Thanks Brad.

Operator

question next ahead. from comes Terry McAvoy Stephens. Please go with The

Terry McAvoy

Good morning.

Mark Sander

Hi, Terry.

Terry McAvoy

congratulations off, last news. first Mark, Hi. week's on

Just wanted to get that in.

Mark Sander

Thank you much. very

Terry McAvoy

margin for mentioned The You’re outlook the rate net welcome. hikes. XXXX for And question a two interest income, has Pat. you

of we not Just curiosity, bring kind XX? speaking, low NII that that to of that here range hikes, end that we does hypothetically out the see on rate do of any if slide down get

Pat Barrett

us hike now. rate you point hold on us it about depending Yes, what gets million if a gets constant, a costs roughly funding quarter $X -- -- basis XX about

the for could So and risk third get quarter June fourth consider we don't rate hike. you the if at that

the year. The second one, of we're end the anticipating at right

hike. I a And even one margin it expansion NIM a itself, we has essentially So other. the think or rate way without the on impact expect then zero

we a or So expect if get each bps the X expansion did typically following the plus quarter, modest quarter year, X hike something rate you of well. we as

Terry McAvoy

pay-downs And your are which XXXX? sales, thoughts or XXXX I cited on release also the in are we're last versus commercial general your business payoffs assumptions like CRE what the know, predict. press to in pay-downs difficult and on charge-offs, sales; But night; Understand.

Mark Sander

hit similar think on the the our those. future QX, You QX And we'll good in both growth The to in that near -- nail QX. in continued term, sight saw less pretty have perhaps ability see of on Terry. the damper we scope, we which a a I QX kind grow and to will as may a in It far the level than head, in a bit. full line the but of that mid-single-digit loan forecast still in I would but little say

don't continue. tougher but Beyond But to point is it can where quarters I that but more can to we're to point. much beyond already. that, guess has a happen? going this to it's X at been how say, hard we one a get see more This QX much predict,

Terry McAvoy

Thanks.

just last sheet I if question, one So could. balance

up actually guessing of because I'm non-interest-bearing that's and Your year-on-year, deposits Northern X% States.

core on maybe deposit how ongoing margin year? XXXX? commentary incorporate into for your you outlook And outflows trends any Just non-interest-bearing do last

Mark Sander

probably I take will one. Well, this

had more a than we favorable good. this expect XXXX. It's we to deposit Our frankly, in little retention, been, anticipated be

have else to. that transactional this fundamentally, would right the -- core right generated has promotional year, expected with along worked So it there? have we deposits the the that's held where up some rate where the CDs been. But anything you course Pat, rising environment. and We really through nicely trend over of

Pat Barrett

Yes.

corporate stable for we away did as were finished I I'd our entire runoff, part, had We sucking throughout and to think funding we funding base. it we at without we're some year than that in DDAs expected. off. most the existing create from But relatively business more did keep the which we better increases was we or it the able year, expect more highlight

Terry McAvoy

All right. Thanks everyone.

Mark Sander

you. Thank

Operator

go Nathan Please ahead. The with Instructions] comes next Piper question Jaffray. [Operator Race from

Nathan Race

Hey, guys. morning. Good

Mike Scudder

morning. Good

Nathan Race

you I sense a working trying know on mind items But of question Bridgeview. that still systems? are Just you timing various to housekeeping their those conversion the the a deal later in have over. when get do one Just guys should for of closed. get through to saves cost guys

Mike Scudder

Nate, the the be process you flow-through timing of I this function quarter will itself. really just in what second a help It can anticipating. in the It's approval here. we're is Mike. and likely is of

Nathan Race

thinking And Bridgeview of post got of kind and balance with the run-off if with Bridgeview. of securities type or attrition kind close just kind of post Okay, the the any you should sheet about factor dynamics portfolio it. Could size help in then we of guys of close.

Mike Scudder

specifically? book securities the On

Nathan Race

book on and also on Both the securities then and just loans deposits

Mike Scudder

attrition. I would in natural very towards short say lump-sum balances, the tried the there's we hard understanding to term generally deposits, hold initially just bias

and asset that the character time On with in duration likely to types that bit as just portfolio, we prefer. to conform investment would similar remain the size but over recycle a little

Nathan Race

other my you. questions Thank have All Okay. answered. been

Operator

follow-up with is Young The a SunTrust. next Michael question from

Michael Young

the Hey, thanks for follow-up.

to where the C&I health seen to update kind been higher just areas so. That's wanted some any you specialty? are of any XXXXs. felt care if Just the particularly going an we've area stronger touch And lending on there on sector of particularly lending base charge-offs were areas, like some have

Just on your that curious on area. outlook

Mark Sander

Michael, Yes, I would we strong say not because had stronger, a XXXX. really

So really the I well. has portfolio. health bit of as credit feel I'll The of saw about good just what is most would of state a we that the our do physician We senior continuation think, sectors. practices would XXXX, I quality care we of see -- I say been a mostly we living. in in do that.

really looking, others. heard And quality the go noise We're happen. externally We so from and we've for not portfolios. been credit looking just of get some those we the about to good them of waiting I to feel

we XXXX grow there. had the I you'll particularly -- did going into But is did nice I'm QX, in more think nice in think what We little that rest, to I momentum more base than actually continue it I they think XXXX. see have XXXX. continuation hopeful will a XXXX. So think, nice I asset of in growth bit a and

Michael Young

and Okay. months hiring we hiring some one post about quarter? on kind competitive ago. move typical There disruption, this kind of as environment. staffing last was throughout plans X of obviously, Any announced year? Any in update one here first the season And the thoughts bonuses

Mike Scudder

say wealth Yes, always themselves and and that management talent commercial market would for bankers the for we're good quickly. I revenue very producers pay in high-quality good

for So there's more the even to we'll disruption, is which in marketplace. those general continue looking active be where

Michael Young

Okay. Thanks.

Mike Scudder

Thank you.

Operator

Mr. If [Operator call now no to the are I turn questions, there over Scudder further Instructions] back for will comments. closing

Mike Scudder

it here Thank me briefly. you, and close let

for deliver many Midwest. your every take and with company they've superior to the opportunity differentiates to on reminder, clients contributions they With that's expect. achieve our of on would of promise help the certainly client on has take continues to for for do giving our promise as our us as been them experience also and their a apart, what what a in to colleagues interest in operate thank want them you to that financial company, that, investment all the sets I success, those our I as come investment and thank really listening, to remain we all to performance. of thank face the and call, providing focus are them want our therefore day Just and and They our and to for us for marketplace. in the First we and in contribution. the opportunity That's our

healthy close, a year. you. we here, of behalf have of on new Thank as all and happy us So

Operator

and now the for Thank this you have all disconnect. All gentlemen, may conference a today. and concludes nice participating, for parties day. Ladies