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First Midwest Bancorp (ONBPP)

Participants
Michael Scudder Chairman and Chief Executive Officer
Mark Sander President and Chief Operating Officer
Patrick Barrett Executive Vice President and Chief Financial Officer
Bradley Milsaps Sandler O'Neill & Partners LP
Michael Young SunTrust Robinson Humphrey, Inc.
Christopher McGratty Keefe, Bruyette & Woods, Inc.
Kevin Reevey D.A. Davidson & Co.
Terry McEvoy Stephens Inc.
Nathan Race Piper Jaffray
Call transcript
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Operator

Good morning, ladies and gentlemen, and welcome to the First Midwest Bancorp 2019 Second Quarter Earnings Conference Call.

Following the close of the market yesterday, the Company released its earnings results for the second quarter of 2019 and also issued presentation materials that will be referred 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 and are not historical facts or 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 President presentations Following for and Mark analysts answers Pat the Chairman Vice questions the Executive Officer; Officer, for opened only. Scudder, President Chief Executive will Financial and Officer; be and and call Chief Chief Barrett,

go I ahead. will turn Scudder. call now the over to Please Mr.

Michael Scudder

most thank opened up quote, the with Good for to an active our it Thank of everyone, great It's for several certainly of morning, joining in us I related mid-May the on with was fronts, today. quarter Great. Bridgeview conversion. you. as acquisition system as my as be notably and you, the closing completion well release for the and Bank but business Well, us you.

as move follow presentation a provided with as along we you supplemental help through To we’ve remarks. our to

numbers. the our add As differentiation walk Mark and of you highlights, impact I'll Pat practice, is can leave the typically Bridgeview to certainly, and through the cover it our on they to the of components,

our $X.X Chicago of this the a last assets. Metro and from with billion process. We quarter, some in from about That's market team a at talented total, Bridgeview me Let XX% billion added to year-ago. to importantly, the about overall start headlines. closed quarter up $XX.X XX%

quarter States, XX us acquisition fourth the Chicago. market overall this our top puts share Northern in with Combined of our in of

and progress our with integration. the pleased Bridgeview overall execution very are in We

and momentum behind team Our forward. with we systems a solid some on going us projections track. And have conversion the board, great remain on

respectively. to increased up return XX% tangible and points quarter our quarter and time, basis the underlying basis from and the of acquisition first XXXX from of $X.XX, the That's EPS of common to from XXXX, XXXX and quarter our up Away first second points XX%. XX costs, At of same X% XXXX, improved quarter respectively. equity XXX on second

a the up away Bridgeview linked if year-ago. perspective, From business for from X% a you both from for and loans annualized look quarter minute, about – were a

sales add We rate given sheet desire the pleased and solid balance C&I activity growth the our reflected of very are outlook. evolving well some while to with as consumer both duration as diversification

from and adding the and more quarter. the we the further same acquisition our on all our in CRE we and time, continue Prospectively, moved here Northern saw RIA of the strengthen to market forward complementing paydowns At growth Milwaukee lenders we as in build indirectly benefit directly two teams production expansion for sales our timing disruption. weighing in commercial We Oak market the first quarter.

to continue we also as forward. add We locally move lenders

mortgage our addition this is to the of in direct of All expansion team.

pay of down the all road. these additions dividends Importantly, future

average mix the on grow income net X.XX. quarter a while $XXX XX% unchanged. margin respectively, increasing year-ago, was or to X% and up Our X% million our on to quarter interest deposits earning and in nicely, held accretions and Growth over improved while linked assets relatively from linked

was, position to environment balance just that little rate the better have than expected bit was we to margin what would recap, X some of a we better underlying basis expected, the down took sheet. As the about which points, and actions given

bounced points fee-based Greater Operating as was than interest well back as with better XX% our us or higher well. a efficiency and and helped quarter quarter X ago. has it net for revenues, year last as the was the along from income improved nicely revenue percentage what fees year-to-date, –

– Finally, where our we we at to to quarter year very you basis ago compare and year today's versus end, up basis Tier million a environment. and a us up closed our stable year the risk-weighted Bridgeview, us strong, stable up our if XX.XX% X providing acquired as were after and points points that's with to ago, earnings XX and flexibility capital navigate We common a that's program repurchasing and assets. from remained XX with ago. That's from increasing XX% essentially almost about dividend $XX shares under in having $X.XX, authorized year newly

all, So in quarter. busy another all

color. And I'll additional it turn for some Pat over and to Mark

Mark Sander

materials, on the as largest Page and shown was of presentation all. real $X at line of in piece Mike, $XXX with good our billion second quarter, Bridgeview, was the X that nearly XX% of right which million, of Thanks, about increased course, commercial estate. in morning Loans, expectations. the in

protecting extend also to mortgages $XXX quarter's We while over of as acquired overall to and we earnings. million last growing our X call signaled duration in the X portfolio

diversified gains saw had market these solid middle offset incrementally to build direct continued teams by another activity. quarter-by-quarter. consumer investments CRE previous pressure specialty particularly we talent was Away and our our from C&I mortgage solid consumer assets, and strong in acquired well across growth continued quarter. and and our payoff from teams partially Similarly, business C&I as

the CRE anything resulted softer in sale can in the activity was more and in than believe and teams and conjunction the we had CRE grow this face will payout future. in quarter, production from drop away banking and real a of timing business with here however, Bridgeview. in continued loans net modest Our that We pressures refinancing QX production estate

from single our the consumer businesses maintaining commercial our post and in high his Mike staff comments. We growth for think referenced largely loan based each in prospecting but some thus total solid opening of additions incremental here will organic disciplined by double-digit for are also full-year. We to the helped growth on outlook low efforts,

the of XX Charge-offs NPAs points to expectations. X.XX Turning quality in in on prior QX with and Results quarter. of asset basis Page of right line consistent were X. also with were loans

loan conjunction of couple charge-offs covered yet expected slightly losses and specific as this allowance expense growth quarter. a a as on basis fell percentage with our reserves provision we reduced Our in

expect all stay the to We range remainder the in these of asset for same quality the metrics year. of

the seen we've we some we landscape remains is not loan our activity broad indication competitive in and believe credit payoff underwriting the aggressive, going quarters growth recent will While and well chase an that conservative us of sacrificing quality, forward. diversification has served by

seen deposits X. to as Relative on Page

the in Our remains deposits retention our to Bridgeview due base up satisfaction as stable. core customer over last have added we very on and our consistently our high a $X.X scores. acquired average rate strong deposits year very are billion QX, strong mix to

remain products, our big stable base. we deposit this competitive all strength across low-cost deposit While of is a overall franchise

be will interest which group. In QX, of our and income. deposits our was peer amongst that XX basis in will best the average cost margin now net translate Pat points, again into all

Patrick Barrett

morning, Thanks, the again. call Mark, everyone, good and on

interest by and interest and net Slide securities Compared higher or X. $XX in Turning XX% margin compared of Bridgeview, to partly X% $XX million offset periods, period to growth and prior the same funding up purchases prior the income income loan the were on quarter was or costs. up Net from acquisition to both million XXXX.

contributed the quarter the loan favorable expected the the to the same year certain of first $XX of the increase a accretion to million the than in quarter, compared addition, impacted acquisition loans. increase extra compared quarter NorStates. resolution ago period higher from while to due Acquired In to by day an benefited was the

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

to Excluding same was basis the very linked accretion, margin X.XX much period points X the year-ago, a down quarter, with in expectations. line point X for basis our and up

Compared and one Bridgeview guidance. to purchases to compression consistent to our mitigate four family securities risk falling costs in and both of reflected interest-earning higher a mix assets prior with periods, acquired previous the of transaction, margin funding rates the of mortgages

interest-earning Turning Bridgeview $XXX purchases. assets were up sources. loan $X.X billion and prior acquisition, growth to the and earning from year, Average assets earning quarter and the funding compared linked reflecting to securities million assets

year. acquired up to the and growth. In from of and billion Average addition, over NorStates growth compared from quarter million year, were both sources acquisitions $XXX asset funding $X.X prior organic earning reflecting assets impacted the linked the transaction prior impact the

to Moving outlook. XXXX our NII

NII months our likely additional than ago, year. per the likelihood assume or want attempt timing of each you adjustment three point million to result quantify to no that Rather rate decline to future $X basis guidance XX Fed I a changes, quarter. changes would this downward predict in the If million recall $X rate interest by in

our Overall, we're either in to rate growth. for range the year, to full-year million previous of mid $XX the updating up from our cuts not accretion potential double-digit our million we to or $XX be of improved accretion side, change do guidance positive to range modestly guidance the expect low these outlook. On NII

see get as NII flat do If run quarter to points rate Fed a rate get many expect basis said any expect XX million we those rate not we'll earning asset as to incremental perspective, well we in If rates. relatively future From rate of takeout. adjusted cuts, further for as NII do to cuts market previously, we cuts, $X predict, protect actions the declines compared growth. further NIM and of $X as institute million we've outlook likely to against second

you quarters of in as same at movements total earning these rates, Once higher impact again, and in would and be remind to both of rate one subject due changes loan the for quarter These percentage drive continue to the that pace at and I volatility similar of second result actions should securities as to or we what two quarterly NIM time, or to to saw want projections compression are the least growth mortgages, expected assets, continue. long a and to next acquisitions. likely actions as assets earning in interest

back on to to discuss Mark, Slide over turn X. you non-interest income it

Mark Sander

comparisons linked consistent growth organic of lower what single following Non-interest with items. benefit that rebounded the results QX, At a acquisitions. couple higher trajectory X.X% here skewed Pat. quarter of year-ago. in digits pleased were were Thanks, plus our expected view performance a as versus isolated normal QX core, this a low the and XX% income we We reflect up by overall than as

we Our treasury look streams, solid and we both mortgage these QX. wealth rebounded from thus, in growth really management levels Capital just income primary posted of and normalized, markets services management, consider from card here. grow growth to results organic fee and QX, to sharply all

X, of pressures. each we what year of quarters, mid can guidance non-interest We and result conditions the think a we on to growth the high generate QX. single-digit More solid stated, growth, as our single-digit next we simply of market over impact mid two the on as overdraft full-year, of the have in shown first updated for part income Page to fee the posted

back Now to Pat expenses. over talk about to

Patrick Barrett

the note at million some which of with lingering we expenses Please quarter the X. Moving will believe of extent, associated remain on the implementation lesser both to full-year. or costs, Slide expenses acquisition, current integration includes Delivering related on than Bridgeview expectations Excellence original for better acquisition and and $XX a

Away the certain properties costs. from our quarter additional prior associated and other these items, the expenses to related by both in to costs to partly quarter increase line total The X%, merit growth organizational salaries, operating linked occupancy lower guidance valuation reflects were with increases with up expenses on compared Bridgeview, offset and year. adjustments

Delivering The associated with the and offset Excellence higher Oak full and of increased merit reflective initiatives. costs Northern incremental is benefit States Northern increase year partially Bridgeview, compared acquisitions, expense by to expenses operating increases other prior of the

from improved XX% of a quarter from year-ago. ratio efficiency linked XX% XX% and Our

the XXXX additional with expense of in XXXX $XX run each quarter million outlook in expenses related $X rate plus Our second the million to was third unchanged, fourth legacy quarter of inflation, million which and is quarters fourth X% for $X in plus of Bridgeview.

expense way, rate spread million full our across remainder the good Bridgeview's quarterly quarter rate estimate $X before slide. second occupancy I costs to year. leave of and additional another is run this quarter the taxes of a plus an run Last $XXX note for staff reach Said million on

full-year. the was quarter line guidance, in tax with effective the approximately remains our it our expectation rate and for for Our XX%,

Moving on X. Slide to capital

continue our record rapidly track maintain on deployed are strong acquisitions. Mike back with earning to and we've pleased As capital we highlighted, levels at the of capital

our million of of Oak Bridgeview, for the Excess the XX% combined the accounting increase first X half the acquisitions essentially transaction of the with half of in our plus during repurchase and earnings first the benefits and change of approximately during Northern dividend shares the year funded XXXX. sale-leaseback

an as dividends compared Note up that annualized are on a approximately to XX% basis, said, year-ago. Mike

accretion to or repurchases. expect deployment from We continued providing excess further capital earnings capital fund share continued growth flexibility

quarter's current our our outlook with summarized usual XX, consistent practice finally, both on Slides earnings respectively. and and And we've XX

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

Michael Scudder

Pat. Thanks

by recap, of evolving even we're rate I we pace like the to XXXX. XXXX, for compounded realities EPS outlook. So we've positioned and continue call we as Since where that what on well grown XX% to navigate just an core are

on Our talent, and focus drive building teams business more our better and expanding and a to client leveraging remains experience. our technology efficient

balance invest well eye opportunities strong manage a as in in return. underlying team, the we shareholder We've Always, markets. so both flexibility have sheet, adjacent We both got pursue with solid to and to as existing our long-term to capital business momentum. expand our an engaged on maximizing do

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

Operator

question O'Neill. Instructions] The Thank time. Please session this you, Milsaps your question-and-answer The from [Operator first state will question. sir. at Sandler of begin comes Brad

Bradley Milsaps

Good Hey. guys. morning,

Michael Scudder

Good morning.

Patrick Barrett

Good Brad. morning,

Bradley Milsaps

and remarks, loans four prepared quarter. and the of was I CRE one or consumer lieu what on book? Mark, in give purchase other the some you be you during for would us future in touched could amount the your of softness the curious purchases residential your continued appetite in in to the maybe family release and if paydowns

Mark Sander

in little question. that answer The amount $XXX million, QX to was bit Sure. over a

to going forward, the of our earning do assets, environment duration partially Brad, it's position but we Our book want that we for and appetite see. the sheet about rate what our about balance partially to

four quality mortgages, might also we, to of both of to purchases. assets, we return well. opportunistically on strategically, backdrop against but of purchased good there's be the so what side some fixed where versus as look to at earning want So balance one that the risk kind additional as higher certain just credit do floating a and a We've do of of element attractive stayed we've we

Bradley Milsaps

just That's helpful. of switch follow up extension on to to maybe the duration then Pat. And whole discussion,

you ex I don't during curious, additional of terms it Also, like million think a looks appetite with Bridgeview few of borrowings a bit. had what quite the funded securities Bridgeview, talk securities of your quarter. doing were have up in you're for additional kind the bought, borrowings. you Can purchases, Just lot hundred may a about there borrowings? purchases

Patrick Barrett

rates there's in come already are of because million forward maturing that borrowings a that FHLBs those there's independent bit little probably fundings previous committed in about replacing, to those a And The of and find down we're locked Sure. $XXX in, years. future we've as looking on side. so are this certainly funding the curve rates. in to forward But environment, long-term bit a of lag little timing for FHLB opportunities we're as funding attractive able lock to attractive at in more at pretty

the side, put we're between net of securities, and quarter On reasonably to quarter, this attractive on, the get and first million $XXX rates. able security we probably

sensitivity our out not to sort putting it. watch modestly, that been So extend we just on you bets and way. pricing, average, hugely, able of are of to this asset intraday kind about But super on really we've long-term the if these do on improve the net-net, X%, we're duration not taking

Bradley Milsaps

that And million $X seems XX rate back of hop the each NII to in it then pretty your point just pressure that's been consistent. I'll and for $X to queue, follow-up but cut, million basis on

that's said the as think of well. spite In I of the hasn't to what impact you've quarter added spite on it you've you these I some balance made, moves NII changed duration the guess of sheet. in last

Patrick Barrett

that deposit our And further and during rise having side go have maybe and that's big than billion have question an little we our faster down, we without public automatically deposit had costs the on is X.X funding the it. how can will cycle, very lower well, funds they fast Yes, cost. in index and

rates things and try to as customers that do is go rates after remainder we the reduce fall. have to So

competitive and rates in And long-term, will actively the we've second to also say to we think, but to promoting pretty been quarter specials remain the going money still throughout of been will that I have course market these competitive, successful those that have deposit we're things the are need remain we regardless. on because

Bradley Milsaps

you, Thank color. I the appreciate guys.

Michael Scudder

you. Thank

Operator

be of Michael next will question your Please state Young Our question. SunTrust. from

Michael Young

the to asset mix the Hey, thanks. kind sheet balance side. of I start on wanted just on

trying rate that terms now, floating of road be obviously, book of those I would what then and of in mentioned, of you guys of just you us extend your guess, kind desired, down sort stand where your But duration. You kind fixed, remind are variable to can books? outcome the and

Patrick Barrett

employ on Sure. a needle it so move to Pat. a back our that I'll that take balance to slightly that, bring mix, bring so target. which to migrate It's Michael. just really on We fixed is origination, our split. fixed more was based that. the strategies XX-XX didn't would swaps, Bridgeview We ever floating typically, than around natural floating XX-XX to sheet general

of And rate is understanding just to interest the taking rate remaining floating whereas of every so a it really lot it, probably half on fairly that big X/X stay LIBOR, going evenly – year. average with we our years, life three a to to bets, going rather over XX-day is reprice is the fixed book on reprice than our with balanced goal book its a

Michael Young

Okay.

you are to mix fixed you that to be the close at want saying So pretty you're floating currently?

Patrick Barrett

are. We

depressed, and profile, – the think But don't duration size balanced we of a fact us us. rise to be X X forward. I is going over we Whether the to tell remainder how a stay to posture. in – right of continue our you to that long recognition still family expect add the purchases rates and we incremental they see balanced securities stay for little of generally they you surprised the in year, combination fall more think and/or again, trying through shouldn't time to

Michael Young

do total you'll level forward? like the issuing back feel bit the some able a returns, a be capital to be an capital repurchases on of to more one continue Or just maybe sort there going or Would then in to to be get sub-debt thinner. ratio's And little stock? buy interest to continue Thanks. you you need to preferred gotten share Okay. the

Patrick Barrett

Yes, or capital. every $XX XX well, tend in they to generally have. We so levels like points a they as rising our we to throw problem are occur. million a it's where tide fund we're with excess earnings, acquisitions X of I capital quarter about off basis Tier capital mean, fighting good and

continue than So needs liquidity opportunities long-term our think I evaluate be capital would market. market think conditions take what and based capital, main we we raising on that advantage more versus of – incremental the on current are we focus to for always in to the

Michael Young

you Okay. are Maybe Or on of just of generally opportunities? just M&A, conversations quickly seeing are many those cool? kind

Michael Scudder

The M&A relative have to environment going with is franchises the stated they're tends dialogue perceive, dialogue and stay to pretty strategic people – – constant. what back that do to they the particular stay

seen So in cooling. of I terms those haven't any things of

means I propel that but translate go. Whether remains operating be that I will is the activity, environment increase the shift. haven't fall either generally or activities mean, seen to that just where going in of guess, perception I succession towards peoples' any seen, to to that an issues

don't that. So think I necessarily shrinks that

Michael Young

you. Thank Okay.

Michael Scudder

You're welcome.

Operator

Please from KBW. is your McGratty question. question next Chris state Our of

Christopher McGratty

Good just it. morning. Pat, I the understand want sec, to come sure for a I back margin make to to

a excluding it on quarter. X.XX% So, this accretion, was core basis

[indiscernible] kind quarter said of digits I think high-single Bridgeview last you to was for two-third. mid

just we couple kind a I somewhere get right? quarter should quarters. range points the in NIM cuts, that of the that to you're that kind call couple you're to so few basis XX. be next based So rate And of a we want X.XX sure, make Is environment, get five basis that basically an obviously, come a saying need the on adjusted Okay? if a If to – off each on next suggesting couple eight of quarter. then it

Patrick Barrett

fair. that's I think

to of basis maybe cut points And book. – points balance You through each anticipated X can further compression the through being as X think or of would impact. the be adding securities the duration then rate basis of

Christopher McGratty

I Is book there The you earning quarter. XX% helpful. That's a about in said the targeted Okay. think level? securities of you XXX assets. added is

stays that is proportion it or – will a that of liquidity, grow your that kind Given XX% kind of range? relatively to in number a continue

Patrick Barrett

liquidity XX sure, for it's that's it go to in higher? little monitor for we We XX plan certain generally conditions, us go have a it to In that, and but important – keep accordingly. then Could lower? purposes. certainly, Could for a and a range little

Christopher McGratty

Okay.

Patrick Barrett

And NII follow-up assets, add as earning duration, just contribute so earlier, do a to will it said what you we to does growth. add it

we other management a – were just loans. just loans risk commercial be consumer to there's margin So lower purpose it rate a if than at interest will or adding than

Christopher McGratty

it. Got Yep.

assumes And more we closing. more this on on accretable, kind little which accretion the X XX with maybe bit going know I mean think year? How is a think I the into you – deal earned of How Okay. like year sales the next that coming, that quarter. down given we to year? quarter, of going next that do this about CECL XX, of a stage into guide to do for about basically kind to the early which going one

Patrick Barrett

that's It for are. full-year. all which equal, being never they will about And the things fall the something off to other low in one-third, XXs

So of two the was really ago. outperformance acquired three this we resolution years or that loan quarter's

Christopher McGratty

Okay. All you. right, thank

Patrick Barrett

question on that a your answer have you Did on CECL? CECL? Did question

Christopher McGratty

Yes.

think answered I you it.

ago. going in was we've it six that been accretion to done income. not there banks work it's we've as concern a But of for think feared would had, some in be I was the decline acquisitive, to that in conversations think think XX of that that the that some months suggest maybe fall-off there previously precipitous a have a the market I had I

Patrick Barrett

geographically yes. Right. then credit out And moves provision, NII of to your and it to a just

it ratios. change will So

Christopher McGratty

Pat. Thanks, Got it.

Operator

state Our next Davidson. of comes question. question Kevin from Reevey D.A. Please your

Kevin Reevey

morning. Good

Michael Scudder

morning. Good

Patrick Barrett

morning. Good

Kevin Reevey

protect loans book, as adding your what you're And of way loan to book those are looking of kind agreements? then new So percent your loan floors to at all, floors has rates? I first booking, was curious, of just the a loan you from you overall falling

Mark Sander

answer right seeing but just so unfortunately, that monitoring the do across it, been the marketplace. portfolio, competitively not let now new. relatively no. have not in but book, our In in the loan of a add market entire the we floors is that's that's in I commercial we're Kevin, our HELOCs. our They're space almost book. the like entire won't We're notion, but part floors, our so there, consumer standard modest That's us always

Kevin Reevey

the branching And you a initiative. then announced in you earlier as quarter, – I know

Quad branch future initiatives a in in up opening undertaken? been talk light in a the novo Cities and you've efficiency basis on Milwaukee. you've kind area, You're then growing you of branching strategies about your that of de Can the

Mark Sander

Yes.

think we I relocation will Quad Cities, opening the a be a very in brand-new. I closing de facility that's better will select novo in we're of and openings. – terms to that the say a better location,

to So grow branches, announced it. in that deposits our in any have we that will that from In Milwaukee, to day We make have marketplace but that the shift marketplace. not we there's business one. already certainly will we earning branch look – like

point but do over have like a Southeast open no have we branch. and to business more at We And Wisconsin, this a we've in added nice commercial. now, time, we to plans wealth

Kevin Reevey

And then right but terms KRX, your lastly, like you underperformed year-to-date, your guys doing looks of it all things the in efficiency are initiative. stock has

back numbers. stock your has Why the buying do increasing you're and great up You're you're you putting think dividend, underperformed. then stock,

Michael Scudder

interesting an That's question.

a correct a report would that that, think I write analyst sharp Kevin… would

Kevin Reevey

commentary the Appreciate

Michael Scudder

running company about and the We're take can great all the But the at opportunity, our long-term. somebody's for things, – advantage That's it. execution. we're it's I way it. got they job and of the right think a we're is look doing I -

Kevin Reevey

you. Thank enough. Fair Okay.

Operator

question. from question comes McEvoy Stephens. state next Terry of your Please Our

Terry McEvoy

Good morning, guys.

Michael Scudder

Hi, Terry.

Terry McEvoy

Fed Pat, for will rates. important you does deposit mentioned the that earlier, be cut assuming the NIM rates

– then a So follow-up, all, cutting million to your as million in I assumptions for $X the in my early guess are quarter NII? second maybe to drop quarter, And rates? at you begin opportunity third have an the question that is $X in in is what you seen just what either

Patrick Barrett

longer over I two means or to CD rolling two-year to locked certain year, costs we promotional our extent, one think into be three we throughout years, keep and in our growth The on rates to then you're minimum already have would last rate those a one-year. rates off. that the flat if cuts able no any a at reduced book We've got rates overall. the funding

the already basis on think a one we from rate quarter that points we we've the by only XX it a reduced is launched I seven-month, and earlier. have when

So do on to that. that pricing, we've been able

product billion public But funds mentioned move the and public earlier more important short-term, products on about we are. very where and I with we last that's market book, index-linked, will book we're funding that our so naturally haven't than as on overall a a organic basis to long-term, briefly money money trying $X.X really costs. market the to rates deposit actually our or save is for decade, think a had few small wherever points production of completed grow

take to every long-term. risk not said, we're And average be it do to than stay to deposit market can of find Mike lower being opportunity not at as So or the while better through going we we will we're really looking aggressively to very the competitive costs, running our at in rates.

Terry McEvoy

a landscape. just the any release, Thanks, Pat. Mike. then follow-up And you evolving mentioned navigate In for

in headlines the kind last days, on the you team also at integrated XX the recently As quarter. acquired a you side, the I lending obviously national then and Bridgeview just during of look ESOP

were So landscape the basis? company national to more to given of? reflective Or your on basis national in opportunities and should a expect comments market take there we on it was advantage to Chicago grow within where M&A continue the a see evolving

Michael Scudder

look was rate when national are and environment go the like crafting what's or more of in outlook of the least at on when that. locally I to as that, thinking But market, that. seeing opportunities shift going what for those and advantage a candidly and through you're to landscape. see It Frankly, was I the think well-positioned lot was take certainly, a the I we we evolving was landscape

Terry McEvoy

you. Thank Great.

Operator

question your from comes of Please question. state Nathan Our Piper Jaffray. next Race

Nathan Race

Hey, guys. Good morning.

Michael Scudder

Good morning.

Nathan Race

point. just Along this persist capital seeing magnitude Question drivers least of thoughts in the guys TC those can what any today? range just whether capital, buybacks to the expect if lines, updated on is curious where if we given kind the back of guys of this around this levels half you or you stock at are on at targeted have year

Patrick Barrett

try without organically I'll answering and we through periodic now, exercises testing stress to carry to with. to well continue portfolio for But our right that leave have and growing, This the said us comfortable we've both positioned M&A. that that we exactly. been through comfortably that very answer grow us Yes, before, we're as as the have we've level

to looking really not point. we're So this our reduce levels at overall capital

that us stock the to growth $XX a higher a excess us $XX place, to is opportunities, priority lever we which buyback quarter million we in tool pull – don't with growth don't other per fund million opportunities with. have have gives And to again gives around to our that earnings, deploy when if

And earnings. it's accommodate of we CECL, quarter the We worth to quarters which but horizon. to to one-time have impact or to will a probably two be able going near-term excess a have, capital. hit think in be We material, consume will still also the don't of it be

next half we'll we and decisions So year the of through second year. as that go on make the get into

Nathan Race

Understood.

in seen that particular. some – years not occur kind line fees, then seen business year the we've the that past? could same may suggest of within we to housekeeping guys of And anything that Okay, half in tend in that you Card-based that, question. see to magnitude Do that's strength they within the if one ask back the to helpful. typically just I

Mark Sander

we're about there's the I from deviate and been there. at. would growth checking, household nothing trajectory kind we've growth nice plan that would of household say on active net and a think I It's all No.

Nathan Race

taking I guys Understood. for appreciate questions.

Patrick Barrett

Thanks.

Operator

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

Michael Scudder

Great, thank you.

thank to Before out as colleagues here, our I I their and want and all investment close to the opportunity our take as a many contributions we make really it performance. Company. for to They through happen it go of perform in

seamless, and our welcome will conversion call, a to know team our number as have particularly Bridgeview to be importantly want listening them our colleagues systems also well most who so who worked on newest I clients. others the as certainly our and hard to a success I to from make thank

that So I that. appreciate all the goes hard into work

for want great that, everybody. thank investment listening, to of Midwest. First in and also a all Have interest in you With your I day,

Operator

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