James J. Herzog
Thanks, Curt and morning, good everyone.
to Turning X. Slide
our and reduction was be a Favorable balances increasing our As Also, Curt billion. growth specialty environmental businesses can to of loan commitment loan indicator we continued outstandings very strong, number future mentioned, loan across have higher. drove of which broad-based factors good growth. a demonstrated expertise with $X.X
extremely billion decline was $XXX Loans we of of A million in resulting draws, small to line real loan or As a the funded commercial industrial increased estate construction business over Nearly multifamily growth increased built $X.X projects X%, projects. in Class utilization outpaced or business a end, quality about negative excellent, as all criticized continued which loans developers Services is almost National providing loans rebound significant quarter in commitments in that loan million XX%. increase we our of migration. large Dealer loans of $XXX $XXX this a $XXX contributions. to by over no This million. million. know floor and remain low, includes signs we see slow equity and meaningful well, grew in Credit in plan
these are remain levels below our run inventory and pre-COVID rate. However, balances low, well
growth, total in Volumes million Equity deposits points and acquisition from in resumed resulted resolved as line rates Services and in the higher business balances. were issues inventory Mortgage and non-relationship-based loans quarters, and in following a benefit higher prudently $XX Banking we yields In and benefiting X.XX%, some of to average put strong primarily pricing Banker reflecting average and in In related strong Services lack due our our from at CAPEX. quarter, Corporate down. tax-related and couple early in as rates. $XXX end, had Loan their space. We activities quarter rate-sensitive are segments. it with Mortgage such still very total as expectations, up. X% will in as part quarter Growth shows muting in a working of to been but loans is interest demand exchanges. depressed were customers, Slide combination M&A manage increased period-end basis for this remained have the supply We that period-end decreased capital loan to to Equity significantly from to it deposits Banker saw XXXX work pent-up rebuild due time commitments Finance take million believe activity momentum new moderate Average investment housing decline. XXX in excess levels loans Fund we customers' liquidity with continued Wealth to well Customers inventory. of X Environmental growth and in Fund Management to highly past both Services, the satisfied.
We continued the services, institutions, corporate to banking interest-bearing particularly decreases largest businesses. financial and in financial in deposits, our see
through been this balance retaining strategy to with our needs, liquidity while has most deposit cycle customer importantly pricing Our relationships. our
that customized agile have We right balance. finding to approach an taken
Our favorable the of and XX% nature relationship noninterest-bearing, mix at deposits. our remains reflecting operational
with overall average. ratio position our below liquidity which well strong, is a is historical loan-to-deposit XX%, Our of
XX to a capacity low or Federal available, deposit points. until utilizing a Loan which year. next as Home beta only at of costs X%, beta cumulative bank we basis achieve we remained deposits of Interest-bearing lines, With channels XX% efficient to borrowing quarter. year-to-date not expect brokered sometime growth, began of significant such loan have do We including the at support the end
actions Of depend activity. will ultimate course, on addition loan in cumulative the FLMC deposit beta and monetary to
adjustments. average growth yield balances end, and regulatory Our X ratios. important of full quarter a and Higher period our in achieving mark-to-market demonstrates benefit resulted over not rates and past this securities $X.X year. the runs Quarter-over-quarter, asset significant balances but reflecting through an value, play in almost billion, continues purchases, of OCI portfolio role sensitivity our our book the impact our second Slide increased net objectives. in capital at $X.X to affects the of billion mark-to-market
income. the portfolios losses case not sale, to the maturity, which for mostly While typically unrealized in liquidity impact we purposes, available we maintain should hold securities for these
another to to which part quarter, purchases for $XX.X securities declining to avenue through we period-end billion. see As way liquidity balances provide the growth, contributed loan
needed. through we the our asset shrinks As sensitivity portfolio plan as manage to additional swaps
of delivering new concentrated our CMBS, larger the more Agency duration portfolio, resulted cash an flows purchases with Over along goal the in average increase million past average have consistent five a purchase securities year, yields slightly in the in $XX income. of with we years. The over with favorable
X. $XXX million million XX rates income basis margin. margin loan points. Slide benefit net $XXX points lifted higher from XX Turning Net increased and income record to interest increased added the and to basis The $XXX interest the a to million
rate we competitive points, quarter on seen million in spreads. provided for increase $XX has cost and basis $X the growth X pressure our additional environment day the the increased a in customers, of have added one borrowing meaningful Loan million. Although not
higher securities $XX As increase the yields the million. I at of size added in the mentioned, portfolio
XX on of our provided net points XX quality Net points, had to charge-offs historical to were rates income. the rate impact. debt, floating of $XX floor remained subordinated averages. benefit Altogether, combined addition low. only Fed, rates $XXX million rates higher net million debt the also deposits loans the stayed million a $XX as basis far added in Criticized our below with a wholesale to outlined X. interest rising on As Higher offering excellent nonaccrual and well and as margin. Slide balances Credit basis
heightened With loans. the credit economic allowance for losses of X.XX% increased modestly to uncertainty, our
to Our million. provision $XX increased
our portfolio always, we in As closely for are and stress monitoring signs are of management. credit the proactive
well as certain generation activity adjustments. Brokerage received as service income fees. million $X absolute a growth remained affected positioned which as income diverse revenue. disciplined approach income model see consistent growth with signs a and decline to fiduciary in to tax our by volumes Deferred rate-related a Non-interest Overall, million card and on increased With customer expenses manage energy well begun have strong, increased XX. or included outlined in of card are headwind and due and increased a fees market $XX million to We believe quarter fiduciary $XX by fees as This the derivative was which base, grew million negative million we terms result was a of CVA some $X X% led reductions $X increase a in Slide activity, relationship comp, in second money in offset fees. portfolios. is income normalization of partially through we for fee in market return funds the offset in environment. in interest recessionary Annual and quarter. still impacted and our favorable
future and on Slide accelerates deferred change maintain percentage primarily we XX% position expenses XX, benefits $XX the in for points which is to income. we our ratio expense while Salaries X to and revenue million, increased Turning noninterest improved continued compensation, due to to discipline in efficiency million our as $XX generation growth. offset
retained rate-related and costs, million successfully in our a million, in results. on strong expense. location. an with pricing, to million. by by Farmington expense were We $X Of and attract as made this driven in seasonality note, levels Hills saw quarter progress processing increase financial our we compensation, incurred incentives new increased performance-based programs, for modernization our increased initiatives our Outside certain tied and deferred stable Occupancy staff lease competitive market. consistent driven the $X talent in we $X second card largely Beyond
on be which As continue discussed, includes details growth. and reinvested previously generated journey ratio banking capital and a X.XX%. outpaced commitment our alignment strong of support estimated Thus, we optimization. as provides this The to increased expected management. evolve. delivery to record generation to to XX capital transformation our Slide of is are an CETX capital With earnings, corporate model, cost retail savings loan our technology needed facilities,
to and and profitability balance to our maintaining and an while is share always, with customers approximately attractive As target shareholders. We priority providing growth, our use monitor loan repurchase to drive return support our dividend trends CETX capital our as our we of strategy. closely our XX%
third of Our impact common a the securities result OCI and in losses as quarter swap portfolios. declined equity of from the our
Excluding or that rate equity provides excluding our to losses, X.XX%. Slide over share X.XX%, our tangible per update the increased AOCI was sensitivity. increased XX $X.XX common on common equity note interest X%. our AOCI, Also an however, to it
predictable with achieved impact on and XX in higher by model some rise. more and net earnings through rates past have reducing a upside over for volatility rates year, been the net our a income cycle interest rate we we and income. in our working Based to stream interest a our lock to Over decrease to the continue low-single-digit target to to XXX-basis-point strong rates yet should months, achieve standard fulfill percent strategy have maintain
$XX to in through by relative year acceleration periods are Considering including interest exceed out of is in interest by a our of over swaps. net XXth loan pricing, level quarter including on some maintain quarter. model activity, to deposit XX%. mainly XX-month Full the XXXX to target net deposit grow forward period, September forward-dated fourth and income. our our to an third which resulted further than forecast smoothing now more expected we XXX-basis-point purchase approximate We along the rates the expected the of curve, utilized in million with income XXXX X% sensitivity, provide scenarios, We gradual X% to focused increase increase a the to in
top interest to income. we up catch-up in resulted XXX-basis-point headwind XX% in modeled net million beta which scenario, estimated March a a of began addition, rise since $XX -- on In of cumulative when rates to the an
invest thereby, Of to predictability more our believe dynamics Overall, revenue we course, from the customers provides of which to earnings more a provides thesis and consistently there in are ability compelling cause many results and our actual shareholders. our us and, model grow outcomes. differ investment may for business
environment. assumes the XXXX of Slide is the XX quarter and for fourth full outlook Our year continuation on and a current economic
expected banker This excluding activity. continue a Positive are headwind. our our to fourth moderate financial loans. growth each We in loan through we X%, the conference however, more expected quarter. to at expect and customary PPP exceed average this X% go economic robust fourth slowdown the and XXXX be in color loan provide plan far full is some year expectation a pace as been in working expect our offer Loan in our the guidance full to during includes growth most line call, XXXX year for of on growth quarter fourth are trends but Mortgage year businesses given has I of approximately item. we our so quarter, will to
next economic growth Assuming continued not do change expect conditions solid year. we materially, into
expect customers their We options. cases, trends to down to deposit draw deposits and, in businesses seek continue on support higher-yielding as some
environment. Looking the tightening is highly into the be Fed timing actions and of expected by economic scale the to and influenced activity next deposit year,
to slide, net third fourth over we previous up the record quarter in discussed interest X% As project income, X% strong quarter. a
from think rates and to As we loan expect we volume. XXXX, about benefit higher
Credit remain in to We will the XX of challenges lower the points. has quarter. interest normalization, the Regardless, high forecast hand, to rate. fourth interest to on we gradual of expect On quality charge-offs net range it and normal put next and excellent at the quarter fourth Therefore, income strong expect believe manageable. end to macroeconomic see year. balances at income XXXX the pressure to begin our basis we net been assuming another we could relative all-time be other remain net we deposit pricing run XX
levels. to fourth from X% noninterest strong approximately We expect income third quarter decline quarter
ECA We areas softening charges partly market, trends by to trends recent given a fiduciary levels, may in seasonal expected revenue. expect impact This elevated such as card. offset be and higher pressures syndication on from is rates, service deposit derivatives equity positive
non-interest we As grow the expect to we we to our into benefit as look see income XXXX, investments. start of
quarter approximately expenses tied expect grow to such processing fourth We for including to X% activity, expenses X%, revenue-generating related as to outside card.
and well our we up We believe $XX as This travel entertainment evolving the expenses. implementing the expect will addition, In our colleagues. time In excludes these over business tight the staffing moderately insurance, in meeting of fourth outlook as continue in advertising, higher make occupancy, levels anticipate staff that essential and higher strategies. value to and XXXX, of progress million modernization strategic to are quarter. deliver labor revenue eases, market our customers investments seasonally we we initiatives we in in expect needs and as
Given pension higher. the move likely to expense market's performance, is significantly
benefits, inflationary summary, also salaries record our we to FDIC the based results impact and date, produce for year. quarter, along with believe will We fourth In strong very expectations to revenue such factors many and we our areas performance -- higher will anticipate expense. and this as we on
robust driven strong generation. loan growth We have and fee
addition, credit and strategy benefited careful of our executing from hedging and higher while management In we've expenses. rates
and to carry expect our We the quarter year the finish momentum into fourth strong.
I'll the turn call to Now back Curt.
