First Republic Bank (FRCB) 14 Oct 222022 Q3 Earnings call transcript

Company Profile

Participants

Jim Herbert	Founder, Executive Chairman
Mike Roffler	Chief Executive Officer, President
Mike Selfridge	Chief Banking Officer
Bob Thornton	President, Private Wealth Management
Olga Tsokova	Chief Accounting Officer, Acting Chief Financial Officer
Mike Ioanilli	Vice President and Director of Investor Relations
Steven Alexopoulos	JP Morgan
Christopher McGratty	KBW
Manan Gosalia	Morgan Stanley
Bill Carcache	Wolf Research
Andrew Liesch	Piper Sandler
Terry McEvoy	Stephens
Tim Coffey	Janney Montgomery Scott
Jared Shaw	Wells Fargo

Call transcript

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Operator

Greetings, and welcome to First Republic Bank’s Third Quarter 2022 Earnings Conference Call. Today's conference is being recorded.

During today's call the lines will be in a listen-only mode.

Following the presentation the conference will be open for questions. [Operator Instructions]. to and call Director like Iaconelli, to now President Vice of would turn over the Mike I Investor Relations. ahead. go Please

Mike Ioanilli

Thank Republic First call. welcome quarter and conference Bank’s XXXX you, third to

President; Founder Speaking will Chairman; CEO Financial Banking Wealth President, be Chief Bob Herbert, Management, Tsokova, Mike today Officer and and and Chief Selfridge, Acting Olga Jim Mike Executive Roffler, Thornton, Private Officer; and Chief Officer. Accounting

today's over call make I Jim, that note that to the may uncertainties during Before we assumptions. forward-looking statements risks, please to call subject are hand and

the uncertainties call For the could materially discussion Jim a see strong including turn all more our of bank's strength complete Jim everyone. forward-looking now, on Herbert. Thank X-K any Good reflecting to actual a long the It the client differ website. you, risks to business was And I'd Republic, Form continued and like FDIC over filings, First to today, the model. Mike. that morning, results centric of term, bank's for the quarter Herbert statements, cause filed from available

Let me to take on some rate and a current economic perspective moment environment. provide

six last rapidly aggressively the this interest year months the and slow inflation. Fed economy rates has to deflate of raised and the During

the to funds increased Just since our last call basis XXX Fed points. rate has

rising cycles. other cycles of is we’ve in performed XX strength rapid hikes in the more The has all and produce well organic very services periods rates. recent acquisition has than past years declined through of Over model safe growth. conditions, The ability First term rate Republic client model of fed of recent economic pace its long the consistently to including seen – been

existing steady with interim and than this standards margin on credit, maintaining conditions, the rather it credit will the remains exceptional future acting to unique, operating acquired interest rate environment new with not the serve more for our levels so as household or effect. compression, and our support time of delivering franchise organic franchise our reform clients Through of long Our focus strong we approach straightforward we capital who be a simple, but acquisition. term long best consistently always The compounding, past: some clients growth creates clients, Despite throughout focus the extraordinary challenge remains client stay and and while with satisfaction always we will be can acquire us this of great ones; differentiated periods us very clients. execution model; grow of This strong. service. in and

at be are importantly, all-time and highs continues levels service credit client to most Our exceptional.

Let me turn over the Mike to please. call Roffler

Mike Roffler

Jim. Thank and quarter another growth of performance. you, financial strong It was

and once demonstrate our quarter's business consistency again of service execution. and the This durability model results of the culture our

Total were XX%. deposits was now XX% loans results. grown share down assets Year-over-year Wealth X%, more over total few me outstanding period. up same management Let have this will momentarily. touch the were down S&P Bob on the than XX%. less a while

earnings per revenues interest grown and have XX%, book XX%. has Our financial share has in value led per Year-over-year, strong growth have grown increased to tangible XX%. more share performance. grown and Net income has total than XX% turn

and our model. mentioned, culture and of the part Jim is strong capital maintaining As fundamental credit business

six assets during million basis charge quarter quarter. $X pristine. credit Our the remains Non-performing only offs Net only were were points end. at

billion successful well equity includes a ratio very quarter of a We of For perspective, loan our remain capitalized point X this This is single just $XXX X.X% end. with common leverage the Tier portfolio. in basis August. raise at of a fraction

fed to rates increased last mentioned, rates a our Turning rapidly. Jim interest for since moment, the as vary call

also increased. future expectation market's for rate the hikes Additionally,

sharp attractive opportunities accounts. and deposit with money We clients through providing rise CDs have rates market responded the in to by

with it term, many seeds our the Year-over-year for on strongest pressure This our the grow the come. clients future. three near level to retain allow who increased all is will households of new will XX%. have puts years approach client-centric and years. with acquire this stay interest in to These are us us us households While great and for growth net in margin

are strong growth. We continued delighted with this household

our which to growth. generate model strong our Importantly, strong service a net continues of product income, interest is loan

driver as have We interest performance. income viewed business net always key a of our

markets, urban attractive. remain Turning markets our healthy and to coastal

real have estate down increased, expected. as prices residential have rates As come slightly

the into Our fourth quarter. pipeline remains robust heading

to Our resonate client with clients. continues service model

Our of ever. highest XX its score net level is promoter at

for differentiated strong level our it a growth. we Given service, was of see opportunities quarter. Overall, attractive very to continue

well is business front of on in us. remain and the focused we Our performing quite model many opportunities

I'll over Officer. Banking the Mike call turn Chief to Now Selfridge,

Mike Selfridge

you, Mike. Thank

and on lending volume very Let second Loan update was third the $XX an me billion, ever. for at across origination our quarter strong funding our business. provide best quarter

residential Our family Single real $X lending estate secured was well volume diversified. remains robust billion. at

Financing volume. with Republic. account. a the strong purchase the relationship new at lending billion. our service, During activity volume is a was this every for term purchase demonstrate of the also Virtually to opportunity of a single for and is Multifamily XX% typically relationship quarter, First great with start family differentiated long home $X.X checking residential a very accounted quarter begins

originated at of loan-to-value The two continued XX%. of size million, $X ratio commercial a past of is As origination and reminder, than the than further XXXX our for quarter. less multifamily years loans into median in expect our fourth markets growth pipeline over our less now strength the a loan and loan heading exceed with the the XX% year performance. and our full We clients given pipeline year-to-date the real-estate to robust demonstrated is

reflecting to average private XX%. a venture during year-over-year. loans were sectors. underwriting just general at of banking rate utilization and approximately Business end. real-estate the quarter, during the The XX%. on XX% deposits loan-to-value maintain in Business call originated credit up Turning the good commitments line standards. the and of also XX% conservative were to quarter all total to for capital business lines Year-over-year quarter decreased represented capital had was Business slowdown our deposits we deposits loans ratio quarter. credit, The continue up XX% equity

continue as acquire increased we Importantly, the our clients. capital to call commitments quarter new during

funding, we to over than at represent were up and X% of that to funding pleased deposits quarter quarter-over-quarter. XX% end. more our Turning base quite XX% Deposits total year-over-year continue are

deposits. represented increase rising remains deposit XX% total at deposits at diversified. well base quarter percentage see typically CDs CDs environment, as of Our of deposits Checking of total a we X% quarter for end. end, In a total accounted rate

As recently as accounted of XX% deposits. CDs for end, total year XXXX

further talk net gather promoter over service helping important deposits. take to our score me of about Let our offices a delivery drive provides exceptional banking and XX an for This clients, to network moment offices. preferred point

Our on quarter million end. $XXX had average offices over in at deposits

presence to Over the in we offices next expect our year, to existing to footprint. deepen open our new continue

Our to perform continues well. service model

Our is consistent approach stable, client safe, organic driving growth. driven

Now I'd like Management. to turn Wealth the President Private to Bob call of Thornton, over

Rob Thornton

you, Thank Mike.

total continues very well. Year-to-date up management XX%. to model management are wealth perform over Our wealth revenues

that net business. management last corrections. based net investment inflows Mike during management up In fees, market see help market brokerage, addition this client were investment services of foreign investment within from client Despite particularly trusts, management strong these year. help in and we services. mitigate to investment decline asset from current mentioned, revenue to diversify management volatility Fees latter growth Year-to-date, the our market the XX% insurance continue includes our exchange and can fees strong inflows, impact on management versus fees wealth

and our banking of noted to have more holistic clients we by even clients these and wealth our during as conditions to management highly As engage times volatility. their We understand approach market is banking change. to take before, valued wealth market opportunities needs

to deposits a wealth Our to through banks relationships. management contributor and business continues banking balances sweep meaningful be

hires Our we additional wealth year, Since teams relationships our existing management welcomed management our model attractive far four to Times and quarter. integrated last banking acquire execute call, Republic. teams like demonstrate continues a the to are brings households. fourth continues Overall, so service, hired total great business wealth this opportunity and Republic to and well. exceptional very planned to for make new deepen we wealth new wealth a for destination First very to our these This also have X successful the professionals. First manager

Now, Officer. Chief the my turn Acting Olga Financial Tsokova, to to it’s call pleasure over

Olga Tsokova

a Thank credit, sound operate capital and liquidity. and you, in focus continued with a Bob. We’ll on continue safe manner, to

provision quality was losses credit million. same the remains period for Year-to-date charge-offs for credit were Net $XX Our excellent. million. our $X only

growth. Our continued loan strong provision reflects our

very position remains was ratio our Our At quarter strong. Tier leverage capital X end X.X%.

year-over-year. assets from Liquidity the High bank's As third common net Mike mentioned, equity of third quality very XX.X% included average Throughout strong. a This for were in interest is strong environments. raise true the quarter. this driven a primary in quarter total the robust the Net by was benefit This liquid XX% also a during our completed remains assets history, quarter. of financial income has during earnings rate challenging even up assets. income driver the third been interest growth was results.

was third the X.XX% quarter. Our net for interest margin

This an our following quarters quarter. interest during in the net rate X.XX%. Year-to-date costs, hikes reflects NIM XX is two basis margin funding increase point

and of rate the be XXXX. in at range expected fed this current This of market to with rate full in rate recent is the hikes at funds Given now year additional margin X.XX% view. the increase end We costs funding X.XX% a of expect interest lower line hikes which for assumes end, year to the following net year. Fed’s our the guided X.X%

client service and continue infrastructure Turning support to to growth. we'll in regulatory expenses, our invest to

the for third quarter to to XX.X% XXXX. currently range be efficiency lower XX% the full year-to-date. of XX.X% was expect year ratio end and ratio efficiency at for our of Our We the XX%

quarter. Our the effective tax for third XX.X% rate was

range model. reflects We to I'll Overall financial over year Mike continue performance, our to Roffler. the XX% strong to stability the And consistency and the of we for expect be to effective full which to now, in of deliver turn XX% rate tax the back continue call XXXX.

Mike Roffler

and you, Mike, Thank Bob Olga. Jim,

has extraordinary successful For has capital. business strong credit maintaining First while client over and years been all on environments. This service, model providing XX Republic's in been focused conservative model

Republic All completely of remain colleagues First at focused and every clients on each our day. serving

to Now, be take we questions. your happy would

Operator

question allow to pause Steven JP Morgan. our Alexopoulos We'll an moment for for Instructions]. of a comes for from just [Operator signal And questions. opportunity to first today

Steven Alexopoulos

everybody! Hey! Good morning,

Mike Roffler

Steve.

Steven Alexopoulos

in strong loan either over is locked right, will funding, that is growth, to so concern that initial With loan XX%-ish wanted slow, that's what's said mortgage going which there be then dramatically concern enough trying compress – XX% that would fund rates now. in won't QT, I this enough a anymore. right. if with you're and one, done materially year, your with NIM three growth, to given on right, loan is the very up just deposit now start, in there growth your funding over so But growth quarters on you've now XXXX not was basically row; to stock moving the fund a deposit that right concern

question is irrespective could the this which two my for you even months, really you scenario it how in play expectations answer, you through And get us where does curve NIM more growth. given is yield one, walk you your bad to So to coming a curve, that loan know if would invert could likely XXXX, slow out? could of see and forward need

Mike Roffler

Thanks what our I loan portfolio, On rates has I that, part and service first that, loan foremost, with focused been for you're continued from and frankly your question, growth that rising and of any first think is if back right. grow mean, the we've stand environment. we've Steve. driven always on I in to

high-teens we you time rate to rates You last the rose at XXXX know saw to mid-teens year-after-year. grew XXXX, the portfolio when

safety maybe talk A-pricing continue at of and we as We any and the has of of we for hallmarks through continue put and differently the been very loan years growing fed is in couple the portfolio margin about, talked the XX next tightening, eventually quantitative a important. full and some serve which lending the will from for bank than prepared of and years cycle, little and the has be – is successful absolutely here And through pristine year. client and a in month going forces the that's much into inflation, pressure the to price there about first with we'll are market and to and percentage of Republic be always had have the a little in there and clients. the objective to as you so and right on early the to each acquire the every remarks, safe at our ready because that's credit some now have right. look on been rates. you be to place hill begun then fourth as because very clients First then one aggressively bit of the stability we A-credit, was the margin we They've because they've loan quarter to go we bank's XXXX, well, portfolio will where example, September mid-teens has in to to and we given credit base, a critical day, reducing go you other that are been bigger get we The come But capacity, and part we past it raised pressure funding larger, if be continue We’ll bit look household side that more. fed

Steven Alexopoulos

term, think like guys us looking frame to could you could if or know past NIM but the over do are that margin, hill Okay. hill ahead, for the help Mike, I to get? the could how know trend where near the you you the you

Mike Roffler

Well, sure.

you'll going annual in quarter and the successful quarter we're the this means right, that first the come After it inflation and in to for example. of going is range start to getting for at that's range stop bit Are year, could think down below little that depends we of said, Olga right. guidance does where end fed be in on it they a stop, fourth our guidance lower sort the XXXX. which As when

XXXX. our we know end is they to next bit as catch-up, and a come are starting into starting which bit start range are a likely you bottom the couple know a to the You up quarters but are loan be of positive, rates little below of little current to

Steven Alexopoulos

Okay, that's helpful.

the them X% of NIM, promotion. incremental In of lot when I going or much you promotions, pointed know CD which investors. not many your speak is lower, heads, plus their and see to A NIM of to a them see right CD the right, terms actually X% you scratch how

us Where today yields understand, So help bit? your coming said up funding cost? how are loan are to loan current can current you at does compare the margin, a yields and you that

Mike Selfridge

I'll Selfridge. points, in looking multifamily basis Mike so current its XXX, lending coming real about families more and Steve, talk estate XXX points. we're XXX getting basis the currently single yields about on around commercial

XXX real all add So for you it's estate, banking. points it basis business up about

maintained is largest segment XXX capital still so prime that As call XX the it XXX. you know points lending of to basis to and a yield, about minus call is XXX

Mike Roffler

total, – CDs the know you only think are of X% so very X%. maybe it's I at add, just a might X% started the year I Steve, and we or

incremental just that with business challenge of at as overall much pronounced proportion not at but the the time. talking you're that just on margin, CDs only the point it's in the than are yes, and quarter, is this it's smaller So XX end about pressure, our and funding because a total incremental less at of the cost current the

Steven Alexopoulos

I on next you about does roll mean, through there Roffler, hit at Mike the or Okay. up over And and ratio? pressure we quarters, so end nice where that keep line good or revenue then just planning the efficiency because finally, if out, but you know the if expense go ratio. you're I is know Thanks. XX you XX, to think great. if don't to been flesh to to we've that would back that XX we efficiency be a range, XX at we are the is a NIM under if place offsets think should the the XX couple pretty you could know how of this side,

Mike Roffler

Yeah, for the no, Steven. thanks question

into the revenues. yield in note our some A we about our a a similar expense had CFO been know adjustments overall. assets in years. And we've that the margin my tied that of compensation to growth curve times obviously of little bit of released know also under have and we lending down make inversions, bit go forth. here have funding been I'd to is, banks you One look for that base and and do come is a can know today, management, etc., you we as having balances CDs the couple know when compressed industry sort through checking and would to has to have liquidity know many You significant fee you checking, absolutely activity, other at XX part in both role, where thing you prior years deep

So you and big is that's compensation, as there there, is is change that. migration limited a saw of reflective portion a there’s in some why growth so also or variable there that pretty quarter, this expenses

necessary the and to way expect So second, to in we’re there fully business model we're together you happen. are some, natural what that and call I'm has that environment the we just to the know an occur unbelievable going from ability structured; prioritize as adjustments levers know then you the come to and team that make and to adapt to

so under thing little close And I'll sorry, the tip a last and this margin the is the higher. ratio, that when does pressure, is with, this bit

XX% is the and I would next the So say. good point year fourth for launch probably not for a quarter the

Steven Alexopoulos

Okay, thanks taking questions. for my

Operator

McGratty The next Christopher from of KBW. comes question

Christopher McGratty

follow-up Mike, want the cycle might and XX%. moment. math, for on beta around just us Hey, for I good for By to deposit QX? my cost the your you that morning! remind what full Can just beta quarter how is assumptions in the are change your a

Olga Tsokova

is Chris! Hi This Olga.

higher were the the that we be for velocity believe than given high experienced about fund this hikes. this XX% We’ll beta, the we and we fed rate assumption I of in XX%, XX%, far the in cycle. said XX’s, So last so are like the which for we as cycle was

hike important, when XX December. we the for but rate lower we the in other points basis we the be but And the around higher range on XX change of stability and range, at the range. even we in additional importantly, November, expect although be X.X%, end rates our look fed we doesn't rate which expect this NIM now the beta at the within reflects So about guided basis fund year year our end consistency talk for to our the depression that – includes XXXX, which what's points model, of margin, expect the and that And cycle. assumptions, of

Mike Roffler

Chris, I’d sort beta, the I'm just not look at of non-interest your it's look cost deposits, all say, account. when but beta calculated, zero the the checking how including we at reference, we sure

So that's we're is where you today. why the – XX% know we at

Christopher McGratty

of the just side. further to get follow-up a that. given lag know Yeah, was fixed to but accelerate a whether bearing, a I rate piece I as cycle? the into that starts doing thanks. but get up in beta there's asset I a you book, interest months? the just the bit the you Maybe the six on asset next of appreciate trying sense more catch know re-pricing, little Does

Mike Selfridge

Selfridge. It's Mike

based, the and about if sixty get know out with in to QX You and beta, but prime from little A-clients the we've look you a go and we points bit. new it's so look A-pricing. said, at originations Mike basis still as we We for QX grow got get there, and competitive more households

Christopher McGratty

or – of presume curve deposits in if lot Okay. Thanks. just book? could bearing mix the do you plays one attention of how last of should How we deposits that in, a more outflow one, obvious is risk out? the mix think getting Like about forward And I just migration non-interest the just reasons. much in be to sneak your now for the risk if

Mike Roffler

XX% the for pleased quarters, balances have nine remain to so been proportion consistently were for over obviously levels. past it's of balances think we've deposits a deposit high years XX% and we checking I checking more and our been Chris, many

it probably it's so but consumers, down and a know capital amount here, lot come both little a businesses but bit of the for a lower, probably given bit could lower working from here. probably from little not You know you

Christopher McGratty

Thanks. Okay, great.

Operator

from Stanley. question next Manan The Gosalia you Morgan of comes

Manan Gosalia

little Hi, the good a wanted side. to just morning! bit I NIM in dig on

and the You funding or going. September rates deposit know thinking wholesale the help you XX; second, You I on side? you then whether the appreciate on fed given general are funding it, and know know us Can forward about in it's is takes puts the the have where guidance CDs first, funding. avenues, the if FHLB how you with right, or just fund you spot

is you You growth now? just do given here know where given what are strong loan ratio be what to you and do that you right the getting would deposit loan sort from loan of at comfortable expect running to growth

Olga Tsokova

is Hi Manan! This Olga.

provide September base, For and diversify this attractive of and and deposits, we for opportunities basis deposit to at clients will continue our our as model, funding base. were spot centric rate reflection is client we of XX points really XX our the deposit where

it's than being X% higher longer CDs, the you've but relatively last even than historically it's at lower years, had but even seen higher we still look – mid-teens term we about and levels was So still in over increase [ph] the back, it’s it's few this. and if in

it’s continuing base. to funding diversify the So

capacity, historically FHLB continue levels FHLB even where relatively We we a but historically have into lower to we’ve of been. tap where lot to compared funding are of

Mike Roffler

a just I'll add Maybe you bit. Olga. that little Thank for

than know XX% you know mentioned, important more an has our of been rates rise funding, and total when as in have Olga fast. strategy You become terms this our funding of CDs deposits

have to important. especially as engage become in fantastic times XX If you over which clients with retail with when are more and a also CDs offices Mike for clients, ability much like service point mentioned an recall earlier, our our this Selfridge

mid-teens in been the if we've I before and above to Olga were As joined we XXXX. bank, go mentioned, in we when that back the well

deepening relationships, where an of the first what meaningful would as as opposed wholesale. point choose CDs would always FHLB our always So choice and got we've that's can that We first. a as use we've important but here of deposit been at do if the we client acquisition part tool, you base, a to and be

Manan Gosalia

Got it.

you securities Q-on-Q quarter or on it to to know loan sounds that grew use a is the it, you how pay it be looks fund what again, cash over basis. is downs you the the with growth? might generated like securities side run us through just asset like off FHLB, got – Can CDs willing So And on what okay. help maybe each much actually

Mike Roffler

would has probably a either $XXX of million The quarter in that runoff pretty and It's light. we securities portfolio. reinvest, in know or between sort lending opportunities been you $XXX million the

Manan Gosalia

Great, thank you.

Operator

Carcache Research. question Bill Wolf Next of comes from

Bill Carcache

morning! holds Can fed we're on that hikes your Thank scenario. Roffler, think you XXXX. to and lots and maybe we you. NIM Mike around throughout Good I frame, add NIM the of where comments, just up NIM I settle under getting would ultimately following that if your earlier comments think assume questions, anything

Mike Roffler

Yes. Thank you for that Bill.

I compression, will the successful at get this it point bit the a do you're rapid term think you the a the the it's given portfolio of a period but now that good leveling when costs, question of done, three see a at this point short in even where of a bit little and we've will quarters and and your you'll you it they to two fed short challenge, a and it quarters about, a asset faster. and issue CS they you'd get because, will an where they better upwards they point reduce will that's if of from off reduce, point, start rise is get they to yields – stops, are fed at that where But should that nature continue see and point from grow see there. of probably the a possibly a term talked now, that a bit expansion right, pause, little a of little to when bit to because funding stop, of have bit in battle your uptick it's from

Bill Carcache

on you you'd some sheet able potentially to your on commentary that following-up that, around the of sheet funding off-balance remind that in how what with and you and around can entail? Understood, be have sources, back funds bring are much would us dynamics balance

Olga Tsokova

on of our we it can million sheet represents Bill, be source which in which have X% $X balance sheet. about another total of deposits, deposits, balance about bringing

Bill Carcache

Okay. liquidity And is you'd held-to-maturity any where selling securities purposes? envision there scenario for

Mike Roffler

No. No.

Bill Carcache

relative pre-COVID funding, ’XX. back reasonable still that's levels? mix to that's debt it Okay, remix question, okay. gradually overall well your on XQ of going And below your to to final to Is expect

Mike Roffler

Mix, funding of which back to pre-COVID? mix

Bill Carcache

overall your debt debt, Just

Mike Roffler

Oh FHLB, yeah.

Bill Carcache

any Actually non-deposit. non-deposit,

Mike Roffler

to client we could FHLB versus and always higher our focus choose foremost, little I attuned would first earlier, it that for do sure. client, a bit I first, go and said little a know have FHLB for think We're and we much very You bit the here. would but from capacity be as

Bill Carcache

mix Right. does revert pre-COVID levels? the bearing non-interest Well, to deposit

Mike Roffler

I mentioned lot checking at a on checking, nominal and So, we feel interest the from know includes deposits, our pay could know I probably a before, you like here, bit of capital of think a this lower XX% not clients. non-interest very we it but which little trend both you given working needs

Bill Carcache

again my for taking I questions, appreciate thanks Okay, it.

Operator

from of And Piper the Andrew next Sandler. question is Liesch

Andrew Liesch

the taking Hi Thanks for everyone! Good morning! questions.

low end the does of hear to even get the that I in the of causing that? are guess you So that. what range, that pretty be expenses here what step on this saying margin being a function to would steep implies I guide up and efficiency the ratio But quarter. also

Mike Roffler

little the expenses. think challenge versus revenue I more it's a know about You the compression from margin the bit has side. talked of the we It

like in checking based we, a particular. is earlier, know bit of tied to a that compensation You be there revenue variable mentioned I will

ratio I So I'd is base our about where – growth slower you versus been. level, rates our think it's sequential more know and the a total it actually than on spend the drives has expense which margin

Andrew Liesch

seeing that That's business just that it, growth it’s loan you been driven are I'm this family. year or all has in multi then, part the this what And helpful. of portfolio? curious, by this growth design right. driven the Got to grow

Mike Roffler

with a drives performing and it's asset a business, little opportunity more clients first existing been of that of say than strong, would that I all a half more class.

we at needs the they occupancies a of but in serve – like are if have our plateaued rents it's quite things look performing to well coming little So and mid-XXs, maybe bit, clients. the off you are

we're taking time. clients care of just a So one at

Andrew Liesch

Got it, all right. Thanks for taking the questions.

Operator

question Terry of is from Stephens. next The McEvoy

Terry McEvoy

CD sense question, earlier, me Mike the offense of get that just Hi, you Maybe quarter in is is that customers? help given looking called acquiring good product growth forward rebate a month the for within five new think new could specifically the on it topic understand. I more that households checking morning! mentioned third defense that of you first that or versus I ATM

Mike Roffler

One leaning for managers, both, it's then our thanks great prospects period question. to and We to play discussions bit a acquire actually Terry, relationship clients deepening with time wealth are relationships. of managers where we're a the right. also is in in a

periods like acquiring uncertainty households back, the of colleagues the of the stand our of reputation if so of take and bank they way for And we because now, has any been about always has. care the strength it's the as and as and clients of opportunity business great term, in good model long the

And perspective of is things to people the in definitely you those bank, reputation with they we mentioned, are doing what from so, hear serve. the a communities like of well attracting service along we're the some our how

Terry McEvoy

how announcement these are Thanks. And then high-yield Apple's yesterday or and online follow-up, products. be they are just coming – interest-bearing ask as that will accounts on deposit in a clients, with discussions I offering savings your offering up given

Mike Selfridge

but on relationship, we're lower It's again, both a as and And value material at acquiring serving lending said, Mike deposits, a we're clip. being not new mind. competitor our and households clients nice the competitive in our that

Terry McEvoy

Mike. and Mike you thank Right,

Operator

next The Coffey Scott. question from of Tim Montgomery comes Janney

Tim Coffey

Good morning, Thank taking for my you questions. you. everybody. Thank

the on you on both tangible is provide sheet some – I balance common equity question grow any you thoughts rate curve? and year had have how in your – the to next is to this expected the forward relation can on do color First

Mike Roffler

Tim. Thanks

opportunistically you be at August per service. like growth You over know share result a we it that value balance XX% tangible support growing and many book that to raise growth able continues done of pleased to we're have sheet really and were supports our capital years, as XXXX’s know in coming we will

So in that we feel a to up showing right we're in book but numbers like mark-to-market others today, not We're lot like place we're good feel as capitalize of really good wise. really in a available-for-sale to the a as tangible I the exposed are place think in we now. challenges

Tim Coffey

to could you lower? unusual compensation. X% range even item. say XX% of see quarter, specifically suggesting it say sequential then Are low Okay. in line And that at this question on be that expenses that the a not to end next a to It's increase or

Mike Roffler

Yes, even lower.

Tim Coffey

and then of that the take is time And to looking recognize look assets XQ? number you the Is like in does might over at of business, of like what there kind Okay. Wealth from can give when move for on kind Management in given of insight some any fees beginning done quarter. part billing it us terms I the

Bob Thornton

is Bob. This

quarter little a in mix of bit and how little fees collect. also I It's think terms a when during accounts many opened of the of It's you're bit the we right. a of million think mix. a million look had of $XXX and $XXX bit bit We fees. for little at fixed between the shift, little a I more But we of management quarter, income. investment to a fourth probably a

Tim Coffey

Okay, were okay. it, I those questions. appreciate my you. Thank

Operator

Jared And question Shaw from of comes Wells Fargo. next the

Jared Shaw

I good morning! guess Hi, first, on…

Mike Roffler

Good morning.

Jared Shaw

the as XX% where on you of than a this referenced in we're Sorry, going through can you'd – I mix the percent there? me? with as you customer so total cycle XX%, Hey! see know demand higher you that Could the hear CDs, the past. guess percentage

Mike Roffler

XX% I they hard the peaked, perspective. good think say, up that that also. that there and you around thumb we rule a in given are products probably focus it's could serving clients I continued were think the on interested Fed we now a our of to it's but end When and gives

Jared Shaw

seems for shorter a we're environment. a products. or extend And would Okay. five it you the rate some duration look on have like duration, CDs? when higher that and the it's you then month little those mature specials at option into lot what's you guess CD now, potentially of roll right look I that just in another of sort expectation those when to Will of shorter-duration a and four

Jim Herbert

Jim. its Jared,

One on this, the is last it of of the run-up. a like the here what's with the temporary steeps funding lasted. period is they coming long that The reasons they going the a most problem of the steepness the for of staying and time. historically from we're steeper And short run-ups on long CDs. margin less basically We're are, not

catch bringing few We will and relatively sticking going the a a the and of our is it’s quarters. the of strong book bank great to and to time an way game CD a period in have very basically in issue, not plan up very, mortgage clients to capacity we're in funding, short

short down. side we basically hill so the stay in want CDs order other ride And the the to of to of

Jared Shaw

rate margin or be able And XX% you appreciate for XX% little in do Okay, XXXX, of you. think that a there? with thank could more that, parts ratio that potentially great. it I for at and you know backdrop elevated you range going as see broader you'll efficiency the expectation keep year that then just to me, finally that to be we the into look

Mike Roffler

good. No, as elevated, be little the it'll first XX% we now, given currently quarter the what during at know think today. year be it in to we is to pretty a range think And we but we obviously tends that look XX%

Jared Shaw

you appreciate questions. I you. Thank the taking

Operator

or At session. back will concludes I call any to the for turn That closing Mike this today's question-and-answer additional Roffler time, remarks.

Michael Roffler

have the are we you households even we and mentioned when cycle. pass, today, just receive great just the Thank reiterate pressure the this that built And growth credit you for than have will our was each every clients get stronger strong drive and and through joining today and you, day! environments. for bank and us model would as through like given and on day. and to call a service this, this continues Republic few everybody, of to will forward more medium-term a a our Thank on continue pristine First we out come get referrals to and all well clients earlier, continued double-digit This serve through points

Operator

disconnect. That now concludes participation for you We you today's conference may call. your and thank

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