First Midwest Bancorp (ONBPP)

Mike Scudder Chairman and CEO
Mark Sander President and COO
Pat Barrett Executive VP and CFO
Chris McGratty KBW
Terry McEvoy Stephens
Nathan Race Piper Sandler
Daniel Tamayo Raymond James
Michael Young Truist Securities
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.

Good morning, ladies and gentlemen, and welcome to the First Midwest Bancorp 2021 First Quarter Earnings Conference Call.

Following the close of the market yesterday, First Midwest released its earnings results for the first quarter of 2021 and issued presentation materials that will be referred to during the call today.

During the course of the discussion, management's comments and the presentation materials may include forward-looking statements and non-GAAP financial information. The Company refers you to the forward-looking statement non-GAAP and other legends included in its earnings release and presentation materials, which should be considered for the call today. This call is being recorded and all participants are in a listen-only mode.

Financial Mike and and Pat and Chief Vice and by Mark Executive Barrett, answers presentations will President President call Sander, Operating Chief for the analysts Scudder, for Chief Chairman Officer; Executive be only. Following opened the question Officer, Officer; and will I Mr. turn call the now to over Scudder.

Mike Scudder

families to healthy on morning, I hope you. ready Good you. for the thank and we with and Thanks again roll staying joining go finds be everyone doing us to rock Great, into everybody. today. and call your It's well, great as this XXXX.

the large are with me some has our seen Operating continued frankly today, liquidity this on benefited time from year. start the Overall So end of which impact to world on and by as the particularly quarter of get - first stimulus of let to the now degree some and normal pretty performance certainly and from we've improvement, comparisons continues with here. nicely quarter. had We quarter traction production really businesses, in performance programs also to magnitude been volumes. what's the stronger the just on fee quarterly distorted managing and but very those the our year going distorted costs. Unfortunately start the focus for seasonality, our how solid ongoing economy in the perspective gain transactional a impacting

through leave of I'll So to Pat you Mark that some help and those nuances. to walk

operating normalize, that, to volumes both and of continue we business as see improve. production credit conditions underneath is sales our momentum underlying and all pipelines strengthening as and Importantly,

about fourth EPS the a is last that's at of year quarters of from and the So respectively. XXX% $X.XX, and quickly, highlights. came X% in first here walkthrough up

was some also mostly credit revenue, the losses. EPS offset $X.XX and to for of timing provisioning reflects by year-over-year, in fourth drop that lower the to adjustments the you're of improvement pandemic. for increase the of due kind partly PPP which quarter we about responsive $X.XX, initial comparing was was provisioning now that Obviously allow the the largely if you the If in year of increase this saw

the remarks, it XX% X% X% up said from heavy think markets, income quarter first about in management here the was and I good were expand We record my up from first typical quarter. when you pretty the XXXX, inflation quarters as adjusted and only earlier and as saw well banking fee-based wealth And fact fourth about revenues expense Non-interest as So that the mortgage it and on feel this. again quarter. across that this a about market was that. you see we in our a year last snow of

and loans Company's our was there level fewer quarter that to were the can see and X.XX%, closely fourth of Mark to greater up the you and time normal elevated that's PPP Total commentary continue that X% Net days liquidity income exaggerated million, by year-end this out income year. was $XXX in of with growth. the depth. from costs with largely control almost annualized and this typical speak lower change the loan the we So interest align obviously net margin from

expand important think he returning to I they over levels, can see X%. pre-pandemic were and was on pipelines for up us We'll that. annualized is that X% almost which

to the credit economy And remain are continues robust do As also gain capital as I as our conditions earlier, they here. traction and credit said so, reserves improving.

at Our total of allowances loans. X.XX%

a prior If it year bit up little in was ago. which you PPP basically exclude the where that, in a from a as is part and down quarter, of X.XX% from line

of million sale at made some that. in loans a charge-offs election in was away note about loan than to an that had just losses of or half that $X we more we of acquired as came net were part and million, incurred do from related $X Our it but to charges

a Overall levels. stayed forward within very, So loans those linked-quarter I Non-performing by remains shares capital announced, very we as connectivity also X that's but of XX%, to on basis we we would and while on last we expand a we part low linked-quarter that about year loans again, our generally grew XX to that historical Tier or and than And note comparison. again, started relative that repurchase brought special XXX there. assets as points quarter. normal classified, a to due can XX% by we at Pat, loans restart back declined that, think up substandard XX.X%, almost higher ago. past mentioned, simply XXX,XXX again dropped brought call ranges, program our XXs about

through and today. So Mark as to of with expand me that some let and it Pat the details over turn they walk on we can

Mark Sander

our and Starting production. had year in Loans increased million of million Slide largely in continued mortgage we on quarter strong has Mike, far presentation. thus with QX. this to XXXX all. $XXX good momentum of due morning X Thanks, again last The $XXX production

by in our businesses. masks liquidity despite economic clients see our for this loan we The growth flat our have see Commercial a generally, specialty growth growth helped and call corporate strengthening excess to the year. consumer given outlook will outlook, activity in similar for level XX% Payoff the mortgage its driven is our we of in improving drive for But business expectations well, continued has I up increases strong largely loan quarter, The QX, cover loans production rest levels. in detail fee from as continue for maintain outlook remained this commercial more Additional resulted here which the the somewhat remains relatively overall for overall in upward to expect clients quarter flat income the which will it the pressures. quarter credit favorable consumer businesses. fairly robust shortly. robust a steady more though trend

that result, growth basis net this pipeline grow the Mike commercial in to nicely going for commercial encouraged continued forward. to, loans now anticipate our And As quarter, a pre-pandemic on quarterly we at we're as levels time. first alluded a

Our at have unchanged of a total outlook billion at thus for away with We this full most year. half of ended still in before full able At minute. of loans yet forgiven in are repaid We a the margin of and round for about a our balances we about loans, appendix and in to here year. certainly high first from We second, growth mid-single-digits for pleased that just $XXX XXXX loan for will PPP from page rent PPP comprised detail summarize in his forgiveness the briefly. the the outstanding to a be quarter the in the level program which Pat believe will now, the of our clients program. this discussion again, were $X.X to process year-end, is on million be help

Looking deeper higher beginning our overall very to risk with balances portfolio, remains to the at quarter and on last flat story generally elements Slide similar X, trends. relative improving

book low category. objectives most deferrals help to to to this ran We the continue loan of across a pandemic. their our as have the broadly clients our very are economy all industries modest began payment with by very At impacted accomplished clients programs point, and exposures and the course by profitable well relatively the in we to one consumer diversified to the unsecured prime book several modest displays four but X with comfortable this discussed installment Slide dominated portfolio, times remain Suffice our year. nicely say, recover. a loan highlighted risk We've it our we last residential. to segment over very exposures

averages. the came at some we at Slide QX greater at our said, Looking Mike substandard end both beginning pace through as or year. X, mention we started in to cover also payouts reserves progress, expectations credit on are pre-pandemic in and loans, their we a remain remained materially, in total than move and performance and are our elevated. Special Credits shown way down better historical at from Charge-offs, of Non-accrual loans to came upgrades. slightly special them X, our particularly Slide as levels mentioned on low began guidance. from in the saw nice line in elevated but as the loans cycle as and with as well

story migration here XX XX basis our to any credit We absorb we will for the specifically year range of charge-offs increase year plays full and the charge-offs expect credit articulated remain to year. January, stay as play basis would to and the reserved over may down from fluctuate point this the and within expect out we'll the We remainder very points as from fully we bring likely in out allowance but thus next. quarter-to-quarter, well

strength X. Funding of Slide remains on our deposits to of franchise. a Turning core course

more comparative historical our liquidity, but with flush industry it's there. cost muted is now, the still advantage With

crisis. following further little a levels down came to deposits basis seen the of financial points, last X cost Our in quarter the

we to plenty and funding take of dry opportunities. of have Importantly, powder sources market advantage

it will from Pat up pick So, here.

Pat Barrett

morning Thanks, to on call. Mark. Good the everyone

net accretion lower to for PPP Continuing on prior points PPP growth by basis both to growth decreased in and the Accretion Slide the The down tax year, due in a Park and loans XX driving the was prior income. loan prior resolution acquired loan decline decreased quarter to decreased Acquired prior was in loan PPP net was partly period interest in from the result linked-quarter, down XX on funds. by the to million million compared year primarily Net income first approximately higher-than-anticipated points Paycheck in of forgiveness in and Turning Bank interest Protection quarter, stable the Program ago. the partly to approximately $X rates, $XXX cost interest as to margin, income same due from the was of and approximately of offset and income in current acquisition. approximately days quarter $XXX XXXX. $X XX. compared with decrease same quarter Slide basis quarter, million quarter and offset the certain million a linked-quarter equivalent of the loans. loans, forgiven NII X% period fewer the in margin favorable X% income current in of to in lower X.XX%, by driven the was same the the quarter Compared PPP from NIM periods. lower

loan was year quarter, was cost down primarily and compression XX of and PPP X.XX% from for points basis year. net lower of the XX higher interest driven growth and prior margin of the partially accretion, higher customer from yields the offset a by impact by linked-quarter basis funds, well as liquidity, securities loans. on points margin Compared impact to ago, rates Excluding as the loan income lower

PPP remaining and stability be to three expected quarters year Aggregate completely for Note exact approximately to of X% outlook for net the million timing quarters, three accretion income with Our by and amounts the full are NII full with million roughly for interest the XXXX remaining the million excluding dependent Accretion XXXX. the $XX for is core impact $XX the is with approximate of the million in year. expected NIM, forgiveness expected these approximating PPP, relative of loans. year quarter. $XX $XX is process full over for SBA's coming the upon evenly that

non-interest income to XX. Slide on Turning

up year a $XX rights. to were in total our of continue continued of linked-quarter increase from modest We XXX% strong in and see growth versus income XX% virtually our overall levels all across Fees value income million a servicing XX% year of reflecting record, the and linked-quarter ago, over recovery up was in ago. fee Mortgage X% mortgage and a production solid streams. a

posted also linked-quarter, ago, year ago, to reflecting quarter a XX% income X% income of was relatively in production robust strong loan linked-quarter, as but up Card markets a retention. year and reflective from flat Capital from strengthen. management, sales, combined record from XX% and pipelines normalizing with continue We volumes. markets QX client rose transaction up wealth a

saw first levels of given the However, the growth non-interest quarter in combined income total, upward results, to revising strong were various quarterly - for income guidance revenues of remainder declines customer expected total be high-single-digit is the a elevated from quarter very year for our with low-double-digit remain first These full In record high ago. in non-interest down of product normal the offset are the partially mortgage year. we're the to expect expected I'd modestly service ongoing levels emphasize liquidity. charges, impact lower by moderate. as strengths to to we modestly seasonal levels these our levels year elevated

quarter, amount same addition equity million Compared of a payroll $X quarter Park Moving with weather-related Note as to which total last and X% impact residual removal, on quarter completed to Slide significant expenses the of the includes announced cost modest on increase. from strategy costs, acquisition. optimization this XX. a well Away in ago. acquisition of third expenses that and final to on from these seasonal we the quarter linked-quarter quarter our the snow associated costs of the costs X% tax and and was the mitigation merit prior as from year current retail fully year, increases, up items, compensation, were contributed loan timing expenses valuation the to in integration

All in of continued lower optimizations. Park compensation asset valuation the investments mortgage offset by to branch and operating year Compared foreclosed with expenses reflected costs benefits with of combined largely due to accruals, costs these higher were a higher the growth associated ago Bank acquisition, technology. our commissions,

away annualized assets expenses and from ratio continued loans while year a our ticked modestly run was from during efficiency of X.X%, overall the approximately PPP percentage up We a to expense average ago. quarter, as down on has focus rate, our

XXXX Our from full full the additional stable. Total million to remains unchanged, portfolio. servicing the $X away year of loan associated relatively XXXX, the with outlook larger for expenses of compared approximately for year costs

saying would expenses are way or be up that modestly Another expected low-single-digits. be to of

on benefits should you leave on quarter, levels as lower exempt our relatively taxes note second XX.X% the both the Slide, as gradual in followed our associated of was the efforts. effective for to prior timing, quarter efficiency interest Last impact equity of by stable year, reflective additional expect half reflective of with tax second tax in periods, of the current this rates declines process rate I our before compared XX%, to ongoing income. compensation the well expense As investing normal the of quarter

We the tax continue for to of a effective to year, with XX% the more ongoing guide remainder normalized for potential rate volatility. but some the

Moving to earnings $X.XX mix growth per share. to be levels quarterly and continue contribution levels capital, our and the continue along earnings our strong, volume risk-weighted to reflecting quarterly assets. These Slide XX. with support of of dividend Capital

behaviors quarter, announce at suspended as the the ago our persistence around quarter back included government largely In which was you. stock unchanged dependent addition, of of the on and pandemic of pandemic, with year repurchased resumption from we on two-year is on convenience, our during is for I'd we've that summary cost a and outlook $XX and quarter. impact emphasize XXX,XXX on summarized usual results the at for of the year prior of that Also year stimulus million. shares of did a XX. Consistent Slide the impact Mike this over our our repurchase XX, the commentary the Mike, customer for activities. program practice, onset to and the mentioned, ongoing financial a the quarter Slide the outlook

Mike Scudder

Great, thanks Pat.

about quick before the couple for remarks of We all time. this we a it talk open Just up questions.

and we gains talk traction. linear to You build, recovery today about you, continues we a I as tell it stand stand world, as will and we always where move the doesn't - like where in I recovery fashion. said,

our of sheet strong, couple tremendous our we stable we is liquidity, extremely emphasize before up, and our is robust. are a points and open balance to improving, credit reserves have Just

just as to our recovering. the us. to So, conditions that are continue lot improve, opportunities of gives us take advantage flexibility and are improve, of in a front Volumes of capital

over positioning sensitivity Our said, like We strength course years higher as core up. move the will fully differentiate. undervalued back that an revenues will the there. believe our rates as and I as deposit since we base open remains of And rebuild

activities, us that looking those will to those to as for stronger and said to efficiency help at a pre-pandemic those existing standpoint So both and an in From all pipelines, footing. lastly, optimization levels, a times, are teams which we add the something to as markets talent experience to service opportunity that target to to a like before, and back ultimately we're can see we culture clients as to our markets how convert choosing we where our to and The to not to is efforts grow. our also always, clients. those we And in place superior continuing how for drive And a and we'd an great as are us continue well work. are for deliver use underweighted, actively then move weighted forward. are are great be have

very where excited again, So we're about stand. we

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


Thank sir. you, The first session begin this question-and-answer at Instructions] question KBW. will Chris your question. time. comes The from [Operator state with Please McGratty

Chris McGratty

Mike. good Hi, morning,

Mike Scudder

morning. Good

Chris McGratty

is deploying that industry for different short strategies cash. excess build question a maybe seeing of Pat, and liquidity amazing, the of you. various The have the banks nothing had

interested kind out rate are the just mortgages in Some managing of in process of buying some the the the of warehouses. also your excess stopping around I'm but kind company? up portfolio, liquidity, are doing thought kind of of profile investment

Pat Barrett

Surprise, liquidity question. surprise, and sure. a Sure, margin

will the thinking challenges, discipline a which investments facing the with had we're largely our that underlying years yes, about you So agency book, mortgage over recall same guys to of paper we've is securities assets. pretty alternative good

very investment And over think purchase much so alternative periodically if are years. loans on the as of have hold an we mortgages we and

continues price. think credit a the supply, and to - that depends I on be of we availability, that So evaluate, it the importantly quality lot

better that, expected shooting So continued will you paper or is, premium refinancing that's headwind than a in back offsetting after The use as on can when XX we that would to interest you you to at that and flip duration negative. for get come that. and basis net mortgage adjusting occurs, margin that pay we an a similar of least overpay as then premium trade, buy have costs, but a we've side that will anything as pools securities a because for like we spread long XX credit won't for of something basis points agency points like

net-net, well, some of off. like kind experienced that but we as we've of to trade So

Chris McGratty


Okay. question, in inorganic of stock, pace in I'm a - similar buyback and Maybe about you Thanks. current on of levels terms kind started of to growth? capital the interested comment based - a again maybe

Mark Sander

So I'll take repurchase. share the capital and

everyone each two-year of the beginning million the needs and expected just dividend consume excess to over really remind create we initiated earnings the that programmatically a to for service. total above at program in the to that which $XXX Just year last debt we was and year, quarter designed

or $XX soon of quarter in So growth opportunities call all did We in capital the as other suspended like as absence cetera. opportunities more year. it larger that's have a hit a that million-ish for only as the crisis deployment kept robust and M&A, it and et banks suspension untapped the

so, simply capital only better that levels resuming designed from our in exact It's we're And deployment with keep the further of same the going to priorities absence forward. philosophy. really capital increasing

that wouldn't I run million of to Yeah. kind quarter. quarterly expect of going rate every $XX and that more we're evaluate So than be it to around anything

else inorganic something did something Your part you growth? say though, your was of last question about

Chris McGratty

Yes, in M&A, question just you're seeing a terms Mike? a about comment of maybe what for

Mike Scudder

I to like earlier today question. was Chris - I Yes, wish answer somebody telling would happy I this. the

XXth through. go this I is think I consecutive as earnings call my

M&A in are of think consolidation all there's answered The I've I dialog, question out XX. I And is lot that the space challenges continue. there's lot likely in environment to the there. of a think remains, a

as But and with how interest you're just and certainly in look I always there extent go of that capital the best those go And continues shareholders, would to the around along always to of I spread to is the question, in as the add to that and would dialog the we what we greatest and it. the want align Pat's shareholder us. confidence bid-ask the we for for grow franchise a that least to to at efforts to economy outlook managing. seem it's our those generates take the those. actions strategically to in So think deploy long-term suggest value advantage we're But interested growing we'll be that with think through you where that opportunities see

equal, prioritize the we'll So to opportunities, those we things extent being can those. find all

Chris McGratty

the and quarter was Great The noninterest is clarification, income Pat. that MSR and of mark-up if point included? so, in just there one guide,

Pat Barrett

a over was pretty modest. little that brings our assets maybe to million, million There it's $X was, it $X

Chris McGratty

Thank Got it. Awesome. you.


The next Terry McEvoy Stephens. question from be will of

Terry McEvoy

Good morning, everyone.

Pat Barrett

Hi, Terry.

Terry McEvoy

Maybe the overall versus you that behind first highlighted the maybe at and the commercial some question that on businesses have you Could quarter growth, businesses, remind us if for end the specialty you expand year? the just Mark. where those you of comments just pipelines started a were on

Mark Sander

Sure, sure.

markets it's those pre-pandemic are but distributed That's than and middle return couple might is Our specialties couple specialty the us be the quarters last said, growth of are been saw has I'm I maintained and as of pipeline those last we businesses be that it where of units market business care finance, given pipelines would saw health that also those ones widely are the banking from. flat specialties, units, - but all the growth leasing lending, other four the outsized growth business another levels, this where years, Pipelines, versus specialty driver, more hired. asset-based for has primary have but significantly to structured certainly CRE of - of these of the ag a more core now. quarter. years, most one the is that where increase kind are coming pleased specialty most With quarter-to-quarter, business our few the just and

of So think will - it grow to total, loans why basis sorry. nice And in we was mid-single-digits see.

Terry McEvoy

Thanks, Perfect. No, Mark. no.

above the up efficiency interrupt. what I guess maybe to they're and we to a as just And then said go Sorry from tough I'm Pat, are to just a bit. it do in having of an need they identify you do follow-up, expenses, came getting on time push kind efficiencies modeling keep of little a going you here. of round to and kind of without guess think there quote further to slide your you get stable, or just to you your process full-year adjusted here, an guidance can I basis, additional to on moves? stable

Pat Barrett

I I do said typical expenses so. X% out a when and quarter etc. where I'll taxes, And Yes, lot would and shakes which the had on it fairly levels up stole $X of that in how so, seem doesn't deal, we thunder, depending FICA snow million which were tick-ups. is call first see my like X.X% of before expenses with with one kind of Mike linked-quarter increase associated higher it of compensation or time, snow, our have payouts, in in we we a February So big but snow a it's those more we expenses say the removal, were lot And

pretty linked-quarter to of expect to decline modestly XXXX by year. in We down that be flat QX the levels second quarter back time QX and reach it next the of we then call

We of have Away So service increase. we of or in million been all costs from that think the this pay which of up $X would the is servicing million others. $X an purchase also loans we that higher all was I away face year-on-year. to - the for that about expenses year don't X.X%

Terry McEvoy

Thanks, Appreciate it. Okay. Pat.


of comes Race question Nathan Sandler. Piper next The from

Nathan Race

morning. good guys, Hi

Pat Barrett

morning. Good

Nathan Race

to pipeline up book, from Chicago some is the it days? is growth on more with back weighted Mark, Terry's increased loan and in CRE question across or portfolio the as segment towards to and gains the I that's demand clients share is recently the the existing hear. see confidence traditional that these C&I Going more commercial you guess at look so growth just I to stemming we're nicely outlook, it, appreciate going of that encouraging

Mark Sander

seeing optimistic in recovery thank question. growth are - is for Nat, both, the you about the certainly little businesses. and It are their say a bit the I'd clients of

of there, share market So to certainly but some market banking, you're businesses demand seeing expect pick decent business and core in our we up CRE. middle

optimism as me into can level our just to bit in frankly. the that. can of level and clarify I activity, about basically - all So, specialty just, again what yeah, I a a X% bit little range than pipeline should of translating that more how And healthcare. I and And grow little businesses thought it's of of our both, think X% grow

is care health divided segments. four actually Our into

look a for we book as have we diversified growth. this So

Pat Barrett

bag, that, the interject, commercial this expand industrial there a just on little to of sorry our is office CRE, is also XX% is which within bit retail within book. mixed would I Pat, category, about of a that loan particularly

from concerns we retail that office of strength area years. the - an So that growth the grow the to some about looking of insignificant that anticipate we're kind next is over of the couple that's longer-term also because course health and of not

Mark Sander

a little geographic is this of as well. some And


Nathan Race

Got it.

of then appreciate guess ex-PPP like I number Pat the imagine, kind kind end full margin that first and in of - net level of or increase outlook I a think and X% about it. margin helpful. in That's from Okay. just for year. I some by And accretion of to we're going see the ex-PPP terms in figure XXX to accretion the the quarter. getting

the number? securities as increases. and see - that's that continue redeploy we X% you dynamics can to book some of imagine just levels So expansion continued up kind the think I terms marching growth loan about number in a grown where liquidity of given Is I right presumably downgrades that guys towards excess in and

Mark Sander

million. the slow, the in quarter mean revenues numerator number steady in is the right. quarter million this last it, growth, if That to $XXX exactly million. annualize to that's $XX million grind time million It a Yes, fourth is of fourth $XXX it's $XXX kind about terms that probably core year, you just were by going to grow that annualizes think of our about upwards. $XXX we of by of I year, the get

other opportunities that. we also higher acquisitions side, to for able just to something asset is margin. numerator core securities in but to crush And growth yielding to the deploy look be on we'll liquidity supplement. look doesn't from that in see to an there X% Hopefully, so our continue acquisitions, And help loan we'll continue

Nathan Race

I the Thanks understood. all appreciate guys. Okay, color.


The from of Daniel Tamayo next Raymond question James. is

Daniel Tamayo

guys. strength mortgage on the morning, in just quarter. good Maybe Hi, the one first banking

the numbers could versus sale forward just down in of rest and talk about you the what of and kind But for likely the what then thoughts margin quarter those going thinking about gain if on on purchase maybe going coming talked You year? Thanks. refi you're forward. market the was the first

Mike Scudder

Sure, about so, we one-third quarter, and were in purchase. refi two-thirds the

forecasts down refi that's of keep line, yes, guess somewhere so the we would pipeline to stay say. the seen I I yet down, going but come to the that evidence come has not and robust, So along yet

yes, much So mortgage to have quarter or visibility next you least think, for don't at going the too pretty robust. we past stay that is market the so,

was as down came quarter as Our X%, these bit We've and that's margin a up. the in the pretty first solid we what at tenure little days thereabouts of saw staying gone right has well.

Daniel Tamayo

it's for integration And last Mark. in terms you anything charges Are of be the rest helpful, optimization essentially the mentioned of should then, question, complete. XXXX? expecting my charges That's thanks. Okay, you acquisition

Pat Barrett

in this all or pretty number processing process expect that a banked fact see costs spent year. call across be larger in But the has bank efficiency, been the At because and processes a to to processing any through to in or relate ongoing that of we're as and gradual. out very continue times of and hard will to speed be already point, No. different on will move improvement we will much of that that lot charges those modest

Daniel Tamayo

all the that's had. I right, All color. Appreciate

Mark Sander

Thank you.


is from question The Michael Truist Securities. Instructions] next Young [Operator of

Michael Young

taking thanks Hi, for question. the

potential and margin curious, the on for lot I and about a lot more a I was but there liquidity rising think covered You chatter is inflation rates. already,

underwriting balance you with on curious strategically was taken or advance that that? if for action So, kind that any for and or now prepare actions to of sheet discussed an to you're prepare guys in taking anything the have


a Michael, crack this I'll Yes, at maybe is that. take Pat.

we that see we rising inflation. So, rates hopeful are and will

the parts most are of of economy actually that happens. the We that one the benefit few when

All puts position. to significant dropped more this posture, gravitate gone natural XX/XX. as XX/XX we've a frankly rates, a pretty stop do we and sensitivity And fixed perspective, rate we have versus in through loans. periodically just never even floating from hedging we've a from good floating perspective is Our in origination to normal decline asset pretty towards us below

prudent upside at to And neutrality constantly fixing and pretty so just in for that. we us, fairly and our does and pretty rates management take physicians before maintain risk middle have been is all easy we thing and in and we because how to looked decent not those much zones practices wrong triggers it we've for loans on failed of rise years. stopping that, and sensitivity try are have unlock stay significant do Having and said years for we about to try and asset the so and

in not going to ahead aggressive too we're be So ourselves position trying what the to thinks. market of

Michael Young

all similarly, in the at to space of terms in estate willing particular? And underwrite you to, commercial what in shortened have maybe real maturity you're

Mike Scudder

in that shorten and modified the be so haven't we're weighing market I looking that them we're maturities this really anything way, say right if pressures and space, candidly We Michael, to that more would extending would now.

Michael Young

had like then maybe year Okay. And we to what and higher relative rate. last if one, some analysis be were the will move now the year better to maybe tax on looks updated Any that sensitivity move tax it this even would with maybe that expected and expectations higher? just than last any rate reopening


bias would our $X.X million per chance we that each of of and have increase. don't, are more be knew that rates sensitivity we corporations expense lower. going there is The higher we is each for roughly think incremental tax be wish incremental percentage on generally I then for that quarter to I Well,

of kind you on can based the So do that. math

is rate about tax the run may before rate I lower you burden would compare of if our XXXX, go half where conventional and that. XX% about we in say probably think rates wisdom versus overall were cuts that up our by the

half of see years So ago. higher three to rates our tune run of about or taxes we may years four the

Michael Young

thanks. Okay,


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

Mike Scudder

I makes in the course special, success. our quarter because the know Thank their of world and that listen living First all opportunity what I we colleagues our today. like before this for in an I always acknowledge year the Midwest, a what is you. I hard number our we're it's to just over like our drives that all what of advantage we again once commitment calls are, what and their to values to in really efforts Their take of live close work are that's say Well to who - and publicly

communities we right for them for and proud each our and things very we sure acknowledge want clients, for doing behalf I'm everybody, to thank our day and other. make So the every of

attention interest story, First thank also I and great our you your your Well, Have and is go So, share all of would investment. that on a belief our a thank we to to for ongoing much. as say, very Midwest you day great everybody.


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