Hancock Whitney (HWC) 16 Jul 242024 Q2 Earnings call transcript

Company Profile

Participants

Kathryn Mistich	executive
John Hairston	executive
Michael Achary	executive
Catherine Mealor	analyst
Michael Rose	analyst
Casey Haire	analyst
Brandon King	analyst
Christopher Ziluca	executive
Benjamin Gerlinger	analyst
Brett Rabatin	analyst
Stephen Scouten	analyst
Gary Tenner	analyst
Matt Olney	analyst
Christopher Marinac	analyst

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to Hancock Whitney Corporation's Second Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this call may be recorded. I would now like to introduce your host for today's conference, Kathryn Mistich, Investor Relations Manager.

You may begin.

Kathryn Mistich

Thank you, and good afternoon.

may statements. we call, today's make forward-looking During most We the published safe to and remind uncertainties the with the XX-Q, carefully review everyone to company's in harbor and earnings identified and would XX-K risks release and including like the presentation recent language therein. that was

that forward-looking of which on the made keep Hancock by made. should You any Whitney in date they mind statements speak as were only

of project Whitney's results results environment economic to predict is cautioned our results evolving ability revise current to future from update the forward-looking forward-looking Hancock accurately statements. economic guarantees performance any statements. Hancock developments differ our of materially or to statements, understands, everyone reasonable or and effects are We reliance is As set could undertakes and strategies assumptions, actual inherently not forth in reflected expectations statements by on predict or or Whitney the or or and such place the any forward-looking rapidly those based undue or forward-looking are limited. are changing. plans and performance that obligation but implied no believe not market on you

non-GAAP financial remarks Some the of contain measures.

GAAP reconciliations the Investor in The Relations website. measures find most call financial on link also conference webcast X-K our to can posted and the are presentation earnings release You our in included comparable tables. slides with the

Hairston. today's and will Hairston, John call We will Chris John in I call Credit reference Achary, some Chief Officer. the now over are call. Participating slides of and today's Ziluca, CEO; these President turn in to Mike CFO;

John Hairston

us for this and Kathryn, afternoon. everyone you, Thank to joining thanks

this growing all Fee increases, which ratios, to by yields this first ratios from deposit were earnings bank expectations reposition charge-offs overall results balance our and mid-cap earnings capital are improve controlled. up reflects grow also operating solid costs profitability, income capital. efforts for our quarter, are We amidst driven We and hope pleased resulting in well investors down bonds. income was was very loans and the dividend in see remain pleased were and AQ our asset as and our to expenses provision reserves. of repurchase for sheet the still continues best the to our able half exceed lower environment, profitability, XXXX and and earning continued macroeconomic second efficiency with among and losses, the to grow Net in both but space. Net loan interest improved we quarter,

balances due as loans a Our balance purposeful to this mostly decrease but contracted in million. continued sheet quarter slightly, repositioning SNC of $XXX

Our focus nearly on our necessary produced remains to and volume offset relationships, more full-service credit and mix the selective team more appetite. our granular

these on in more we balance NIM the pricing granular year. have expansion, of credits remain loan expected, we and contributed As focused will to the

purpose over of we this reducing granular promised, while down our This be we for relationship guidance XXXX. achieving thoughtfully credit-only to SNCs, have of As wins, guidance time. loans flat the to quarter, all loan originating slightly relationship and our updated goal and reflects including via loans more now relationships, yields expect revenue higher large from

we our As peers. quality at the but pace was a in more credit loans to near increase criticized quarter, and this commercial of quartile continue expected, top normalize, our the nonaccrual and modest at metrics remain or

or no Our weakening significant portfolio loan any and portfolio diverse, see geography. sectors in is specific we still

quarter. X.XX%, enjoy of continue solid a prior from reserve up We the to slightly

much recent but DDA but to in than down moderated allowance Our guidance mostly to our at provision more the continue quarters, with respect DDAs did pace of reduction quarter, net to in broker and CDs in a unchanged. Deposits due $XXX remains decline, the a were accounts, and promotional fund were in runoff during seasonal quarter actually changes concentrations our There the in maturity significant with retail in no despite was at XX%. normal public experience was growth pleased and rates we consistent interest-bearing and quarter. deposits time the to in prior mix transaction million.

Our deposits flat be guidance to slightly deposits, compared down we was will XXXX. and to now for expect updated

migrate were nearly XXXX. end continue which $XXX from of broker We million away deposits, the to at

During the returning quarter, Even common of XX% our we XXX,XXX we to a we capital, stock increase investors to were with capital in shares very of pleased common over and dividend, stock. return repurchased after our X.XX% had profitability, strong capital due with a metrics of in quarter common of our all Tier quarter. the the X XX% equity solid ratio and to growth in a ending TCE

of As rest the reflect for our year. I this expectations we to quarter the mentioned, updated

this Our is controlling expenses income. our NIM, growing fee and of forward balance repositioning momentum maintain to near-term expectation sheet, improving

company efforts cover the guidance to in which the through Our staff, Mike balance hiring to sheet inflect to will XXXX profitability. in growth should reinvest us additional and come. detail in will to revenue-generating allow help his back to support commentary control in the expenses more

our celebrating reserves, derisked as we and beyond, hope Tier XX% X strong more ACL TCE earnings year investors journey a with XXXth HWC view As sourcing, accomplished granular profitability, portfolio over supporting and revenue now solid X% a we nearly forward and capital and ratio. to loan admirable look efficiency, a

As value With our rearview century, period. are balance Mike strategic to we our very invite over I'll add grow as additional we and that, hard the celebrate sheet planning on efforts beginning the the of mirror next windshield to comments. quarter our the work versus

Michael Achary

everyone. John, Thanks, and good afternoon,

from PPNR up per higher net quarter's about million quarter. $X.XX million was and share, or $X.XX assets $X.X was quarter. prior income X.XX% share last $X.X of Second average reported $XXX million $XXX than per at or million the up

basis Our relatively points were well and NIM Fees expenses X flat and NII. nicely controlled. to were in up growth pushed X.XX% and expanded

expansion up quarter saw X NIM X.XX basis quarter. from with NIM again, As points last mentioned, this of we

by deposit as investor were on Slide lower bond higher As as deck, performance offset driven less our Those loan shown a XX borrowing and favorable mix. was yields by of well costs. the partially NIM

rate cost basis over turned second quarter of consecutive in We saw X years this that it's point was to of an down our deposits around funds. book Obviously, by X%. the to nearly was of deposits driving the X.XX%, X on basis quarter $X.X Our from down contributing total drop deposit increases. the X.XX% billion points. Also to rate even a cost of deposits on paid of time CDs public after X-basis-point quarter-over-quarter maturing cost total about significant X in our lower the repriced

Another driver mix. our continued in DDA here was stabilization

XX.X% far the this the level to The level second $XXX DDA quarter quarter. quarter slightly through stay with mix XX.X% or only this year-end. We last lowest now drop in at actually could million DDAs was near mix from increased so believe

quarter basis more X basis to yields due our our to up points X.X% As X due up about mentioned, on into and higher focus and at back loan yield at X.XX% to loans. quarter, this Bond saw then granular portfolio was also points was the $XXX to reinvested our bond bond we reinvesting portfolio higher of was principal million at the second off cash rates. In X.XX%. come X.XX% cash flows flow were

For half secondary card costs the our second million for fees well company of X.X% second high in levels. quarter-over-quarter, coming both X% have in portfolio annuity at income. higher XXXX's and that the down the throughout well We bond record were half guidance and $XXX ATM the In adjusted X%. a cash should the of we now bit around from income increase reviewing higher as about of in from trust off continued of get noninterest NIM XXXX, the XXXX flow quarter-over-quarter. as reinvested quarter controlling to we despite a from but expect no expansion believe were achieve as up quarters will in second fees up again as for rate We bank level. Expenses Investment little X% mortgage next fees was and this income benefited Fee X income XXXX, and reflecting X% be for noninterest quarter, between strong on flat balance company. environment X% NIM we focus sheet was an growth. up the modest can north

been expect half personnel X% by in updated, grow to is growth. X%. and XXXX. the favorable hire we lower equipment The overall of second here Our growth to lower expense plans guidance additional has bankers inclusive expense adding expenses driven This staff and of guidance levels is in of despite and additional change occupancy revenue-generating between and

XXXX's X% second from of implies levels the PPNR the half first guide down in Our PPNR That in X% modest half. is to growth be compared about to for XXXX PPNR levels. adjusted to

there's While believe difference our cut scenario do Fed overall guidance cuts a this now rate X we a assumes X not significant cuts rates, twice in year. rate where one XXXX, the say, between and

Lastly, a on quick comment capital.

after the share turn and of increase the capital share returning calendar the repurchases remained we Certainly, year. for growth balance equal, mentioned, dividend at repurchases. I will and back view. of now impact changes All John. expect this the our our to through capital John could pace that valuation a sheet similar strong could dynamics in call remarkably rest As things continue even ratios the share

John Hairston

Mike. Thanks,

Let's open the call for questions.

Operator

comes Mealor Catherine question with first Your from Instructions] KBW. [Operator

Catherine Mealor

first margin. Maybe my just question, on the

As loan the the just environment? as think in get Or think year? to of pace loan a half what about saw see of year. back increase in of couple the you that you the over yield lesser the a Is back to do assuming good change next pace increases quarters the flat quarter we expect kind rate yield some this half the about of a of we we'll

Michael Achary

half add of portfolio, basis a think And color. higher talked from expansion second bit of off, the expecting loan that yields. loan can NIM I And the terms Catherine, each push in of couple as I'll the that fixed a half our repricing certainly second potentially and little we modest. Mike. we're that rate continued NIM described one comes of of means of points that third the in Certainly, we've kind quarter. before. higher will about year, is it this a start certainly, our in fourth drivers is and John But the in as of the

of loan then from expect our couple forward as past kind each But very a well. next a variable couple in That of improvements quarters. also, going that And see think I had helpful. We basis bit the yes, again in to mix loans quarter. was some this of little change in continues, of incremental favorable assuming of improvement points a would our yield I

Catherine Mealor

things walk us impact the of of the up that through is maybe hires to then that in full XXXX fair we it growth kind those year? picks assume you're the kind to year. Okay. in there's improved of just rate to if of half I I maybe I the half perhaps But a of know because guidance so could personnel to paying see and back come Great. the in the And in mentioned been you've expense lot some hiring that's know you for about down, occupancy that surprised offsets get you then create more doing some as the that. the And also talking of savings? was back

Michael Achary

Catherine, Yes, well hires see we 'XX. impact get new year second this first. in look we Mike you'll 'XX of annualized answer the at in is this as to think as hiring that kind And last started. of to as I I'll the half of your certainly make question again. say, any continue let's Yes, make, we 'XX, in the

all So growth level that we'll I expense do bit compared equal have in little higher of 'XX. things 'XX think a to

of things that. one and company that of 'XX, is doing is mindful And good embodies really we're what and something is that our think being think to the I this is related in kind money. we known spend embedded for, cost how kind our of controls just culture, here I really of Now

continue each at from looking the our of there has I have to done pay strategic pick quarter on to outsourcing So I useful, about and we some get think up things then And initiatives, really base to by, talked something certainly will things kind we our and continue make think that company. going be new including that go We've those happen. programs. But able forward. been as to procurement incrementally by here hires we new pledge going that goes that also could benefits that's and with as is of cost being for ways controlling in that find institutionalized current forward. Lots we costs

as the pay those of are really the room I to of that those would existing expense examples. kind is pledge our inside But hires by things use So again, base. creating new for

to add want So you John, that? to anything

Operator

comes Your line the Michael Rose question Raymond James. of next from with

Michael Rose

end away one going reduction. Where things you'd replacing to is working higher-yielding the or let off assume that's Can to of on. ideally Just yielding on year from know been or you're loans. to? of the are what I move like couple you're SNC with lot years? that of the or run get you these the next the remind wanted And at that us a and the just ones have of you guys least to started them been the smaller lower you loans by target I over

interplay you if move would how forward. discuss just the to would as we on it should So a positive because in of the yield that me can kind be play benefit seem that loan out

You many given versus could higher of actually see your yields begin even sustained if that loan dynamic, down. to come rates peers,

John Hairston

is opportunities if as mean add Chris demand you full-service relationships. color, opportunities self-providing fee yield redeploy, I'll John. some also Mike higher be well like. goal you would for smaller or can Michael, as this with to Yes, question. I and get start and answered into presuming they the The able is there, that then liquidity

each of lot lot QX of progress second terms we of And of rest make there's maturity a in quarter. a year, in sizing In the year. action typically, the did

a pleased to business across was several of frankly, the and almost to outsized. core it replace quarter. of was -- were very hustle in the So I one lines We all see diligence bit and bankers of it

as The somewhere balance of the the as in wherever know all would reductions second bit us the a but much in things it the same balances peer answer million too question, neighborhood year equal, whole in XXXX. of $XXX there, now. year top second of the of to more neighborhood, a 'XX we get of percent answer in on take SNC in loans, being runoff based is right be will X% the outstanding into amount of amount in SNC half going about right a those around the half that guidance, total would people additional modest, not we then somewhere -- then is XXXX to what total outstanding Michael, which publish is. of from that suspect to the of about in on to And go probably And of XXXX normal. And your the

in the is there once that valuation So business doing would again, We're of whatever to optics can to sort valuation. for hangover we improve a desire investors. any remove really in the of create

any is we're really that down. And the It's maybe concern Now it at things book. as were really growth good good And pretty of any at manager SNCs we matter a place. to of SNC with a Any lot the profitability just not years -- over have a frankly, of you'd of part loan couple that a optics particular last depend redirect of liquidity. watched when on other shouldn't for topic much as on like? managing

Michael Rose

in where going just Is of where to want are. kind we of see -- that's drift ask was you over the around I that just I be? could think to you that just the term? peers lower kind said Or to time the at longer X%. intermediate

John Hairston

at to both unpublished. be point And that too focus peers but in and would Well, range our at like this X%. where point of time, not are, around to much on in that's we published generally, it, the --

go that we types we stay it are generate lower, if activity we'll probably were to other because about then we'd go to where So cover. goes of lower, we think if higher, can

Michael Rose

talking maybe Okay. about capital point. as you do industry. of a Certainly a share Perfect. lot And the I M&A Understood. pretty people my near-term are have color understand this the robust repurchases, then just know but across follow-up. at on guys

it what work past guys doing because guys lot If like a front you efficiency in can Hancock? foot part kind your next on Does and up ideally? be a you is. of looking of would the what that? are for you just What's step the you look play over frame sounds now get get to to it years M&A the for couple And are of where for where potentially would after profitability you

Michael Achary

the building an the dramatically Yes, then certainly ratio question. Michael. past over yes, then of from ROI lot improving been fantastic I'll terms years get and and loan standpoint. started, profitability, capital, for both of derisking work pretty of and portfolio, in thanks an building there's the couple reserves, And a efficiency

capital. ways about proactively about So quarters the manage to thinking couple been of have last

And related in at so levels. sheet comments, equal, continue less expect dynamics then change certainly, the or I the things current of, kind and we our the to a to, the valuation, to more the that buybacks the increase lower. we this think growth dynamics that common had buybacks. And our quarter the forward, And of be could kind things view balance either would the then, opening going higher past or dividend change again, that in related the said would resumption of in the and all of I

couple the the other about as I certainly, banks nice think, stock has change, that think many So have we doesn't pretty as well. And way days enjoyed a of the buybacks.

through very been the all couple conversations. the of I that the we'll longer not that And buybacks do. to the think that levels. on today, and people. or is evaluated company go talk We things things to something last of quarter. A minutes less think of although the basis doesn't on been you I get M&A expect at are And know having obviously same mentioned in term question. going the on a We certainly couple weekly We the ago. little the M&A more said attention have magnitude we of market. It's gets size that's in listen focused engaging look still that to that, in terms at that to things as kind that we people, something our of the on would change close I to bit we really the years. really pay a

down probably that's mean, something road. I M&A, in participating bit actually a further of terms the In little

like comes, we an clarity think bit transactions a in and growing process in approval our considering the more would to markets. the strategic give regulatory transactions some that to to us industry actually everyone better strategically related I oversight out there'll a bit new I terms we'll that, and when an But certainly other away think or see. little little certainly, be little shy sheet take a the be Maybe give and the us add scale introduce whether better this clarity through the of opportunity valuation. later that's that won't would from company M&A, opportunity to year is. And like what balance we'd cost bit time

So about that's kind that. how of think we

Operator

of comes with question Casey the Jefferies. next Your from Haire line

Casey Haire

follow I'm question Mike's on going on M&A. up to

like would -- would be there a an you I for ideal guess, M&A from So, guys And a as on lot in asset that you $XX level say it's pursuing now? right billion? active fairly to a is discussion is there of that, then going follow-up coming

Michael Achary

Sure, sure, Casey.

would answer is, from and of certainly, I visits way bankers investment books ideas. the So lot that a with question

things But ourselves attention to kind So people say that in you that's of our picked that, the I terms in probably the up, fair picked would that's couple as know of on last quarters. just I do, mentioned, we're think us. and up involvement, of mean, paying doing again, things a and to around getting that going are that would company the like is to

mind sheet to to opportunity then terms kind there either strategically. sizing there's would size. I think opportunities, specifically of would and any terms of nothing options of any I of to related the want in us comment indicating of scale go transactions premature to kind now. really give that and of was those In balance right transactions right really don't kind expand What on kind other did now of an add in that that's But

and if that little engage I down a we say. the further would in bit it's when road, probably M&A, think I

Casey Haire

on north bit we mean, capital And, you approaching if that change getting year, I is would guess, of your guys XXX aggressive XX, bps at -- lower, is forward fast continue there could a we stance maybe Slide a little more be year looking buybacks? Okay. that were a So cadence, a that right? of on XX. I ago, level

change build So capital I'm get just of and pretty like cadence. that buyback would get to the sense, just to what trying a trying a is sense impressive

Michael Achary

and of our franchise from think to it our certainly it's capital. our proud ability don't we We're a Look, hallmark ability it's a at all is to away to our Yes. company. and grow shy great have and we something problem grow of that

was terms look, evaluate to that's in kind So the the that current as couple to through But for guidance would really at go certainly gave the And now we'll quarters premature. of be anything the couple of next something of want we right of levels. quarters. I that the continuing next commit don't buybacks

John Hairston

is friendly that. capitalize we than Obviously, a This to to is using of to right add the that. been faster-growing macro purpose have best John. I'll now. provide balance The capital hasn't sheet

because quarters so the reason talking expected field couple began And be offensive [indiscernible] macro going to environment a on the that case. of we we was players ago more about was the

and at the potentially already moment accounts focus them a faster a with and place basis leadership time, believe is adding our at more in So our supporting ready that field, is marketing players offices spend, move and the net in on revenue really adding markets deploying in this start generators clip. to bigger a and maybe we

them So that's questions more that options behind really to other minds they're I our call that the guess, are. inflecting really, the all All Part C before say northward heart sense. in mentioned B if the but makes growth, I'd fair, or sheet maybe you balance are and where

are pay Board we what Certainly, deck. priorities capital options possibilities attention hope helpful. and with the as we and put So discussed exactly members to all the I those view in our that's levels. I dutifully

Operator

question of Truist next Brandon with Your the line Securities. comes King from

Brandon King

So year-end. in mix the stable particularly remarks, prepared DDA mentioned keeping through the you

funds? that there's So just sensitivity to confidence gives about if could you talk what you any in projection Fed

Michael Achary

able with and one, we've what accomplish started I what stabilization been of is notion year, to a this confidence get that bit. can us far and Really, this I'll add certainly color of gives that John thus Brandon. some that's Thanks, mix. Yes. think

terms actually, quarter, XX%. little numbers, the we had But XX%, rounded both we numbers an bit actually and last quarter advertised the increase quarter-over-quarter deck, in a of those and mix. those So in this are mix, of around our that at for

for the So XX% XX/XX at we're the of be 'XX. end guidance of that marks be that is this confident can kind we're as as giving to we'll XX%. hit of year And to the able of we those notion

the to your that So us, answer as thing witnessed gives of that and talking behind I we've of question, stability is as to well that confidence remix actually worst the think think. really us is I that the kind customers ascertaining certainly

Brandon King

play rate Okay. And to sensitivity any outlook? any factor? Does the that

Michael Achary

But should on X, cuts so. help mean, X No, our I betting couple that. conservatively reduced And don't we then of get what that I don't think the to stability. year, think I get point. changes. outlook to We're think right outlook now to Maybe see this our has this hikes. I we'll we'll at would a not been add that rate later rate with

Brandon King

seeing then And touch bucket. also, just you're credits wanted seeing? Okay. commercial what if And the just move criticized then that you're actually you recognize in out on But increase characterize could to it's criticized. of any I normalizing.

Christopher Ziluca

where operating can quite in from Brandon, bit. as the our Ziluca. for a a credit we some low would and that, to justify the several the in thanks you're away loan at what that's And anticipate finally, seeing season less point past any many, special Yes, of, did is, true. then downgrade I say Chris over this mention is it's I activity and believe season between see it say and We has seeing quarter, of activity, in going seeing of has single criticized to question. I any refinance is really any is, which prior us. connectivity seen slower that diminished level the is that is, say portfolio. you I think, way quarters, we're the to to themselves upgrading inflows we're not this a sort can kind we've lot substandard. It way to that There a I that quarters. or imagine, them slow quarter What say, resolve what in quarters when sector. we know really not But really do geography that seeing of, need for Not to that or down. X such the inflow continue of seeing or before downgrade but into our we're can were or that them from perform a X downgrade you I'll And upgrades activity your easy isn't that's

a spent, specifically. I've there's trying attention anything don't of there my the and see really time, figure those that to lot that from, would in anything come out portfolio if broader draw specific I to

Operator

with comes Ben question from next of Your the line Gerlinger Citi.

Benjamin Gerlinger

cost at earlier part a is So on you just it's deposits, the had correctly, of a that so a even. you to promos the recall obviously, year/ this X website, is is mix do lower guys same the of I excuse when can next have the at be of I you've balance the going look yield was If to Or look cost you me, months bit little But deposits X% bit noninterest-bearing phase driving the this, CD at as well? little hand than linked get mix, of the margin? kind change you quarter, most of curious, you when down -- positive. And which side of think the roughly right sheet it. are stays the on

Michael Achary

this Yes, Mike. is

you're right. terms our promotional CDs, in of So

rate highest the there our X-month X- maturity. X% rate, or either best out of is Our for

We also have at XX-month X-month an an X.XX%. and

couple months now. X% been but there reduced about points, a latter of we for basis the XX So that rate have has

to Now go you at back X.XX% duration. we last end if were of year, the for an X-month

of and been able the to promotional rates. about broadened we've So duration before, reduce as kind the we've kind talked of

ability our reprice to to year contribute is our our the ability certainly, things But certainly We forward, kind to driver bond increasing ability going is other So that in the about our second NIM. maturing of the half to that continue reprice book. a of our talked of CDs that.

X% We at the part and in we'll obviously, rate coming also talked bit in we've the then $XXX bonds to but better, half money, loans, maturing or past. million our under second cash flow of the us year a have of X% the repricing that fixed at of back of redeploy as about or better little kind

that will our expansion have expansion quarter in really the NIM things and a our well. of in large the degree, drive half things as been quarter the second certainly the second the to that first So year same driving the are

question. hopefully, that So answer helped your

Benjamin Gerlinger

mainly There's of balance The right-hand the a bit of little the also stability absolutely. Yes, left-hand on sheet side side. helps.

area, to we an of would XX%, really bit of about across but if also equal. hires capital, not are And revenue above talked And you producers. help and lending up just all But probably kind better today help the Or set hires certain previously, Texas kind can hire view, board is growth. But pace else a see trying that ramp would this year? XXXX this for more to you talked continue year lenders, interchangeable. the curious saw avenue a I about next year. in XX,XXX-foot of beat I I in we've here, growth know when a turns the as via guys remember horse areas potential you know an little often about death those think So you this to

mean by a production. revenue you get to hires sense trying kind and that Just what of by of

John Hairston

me I'll start redirect John. is answer, to a around if this feel the welcome meander bit. and So

over bit $XX type overall which terms to be, scale almost tend in generally we've demonstrated developing going million, hiring, That's of what commercial of and business banking from the and in of $XX we the individuals looking of banking as the fee and call and seasoned are relationship, speaking, self-fund we're refer same to it to client revenues services that bankers In target space. down, in types for the time. success annual a good million

So and that the given We our advisers we've retail be would the also space. the both small may impressive would would business directed That I last financial wealth had across we add think, generally the add centers. of bankers footprint. in be really years. success, and to across couple

asset all. because may in we a individuals banking, income really So share, Ben, terms it's management a success a fee wealth market of play of where other the who advisers, bag, better a have bit we takeaway-ball it won have from core while mixed of we'll we there's to the book have because have geography

So the a a bigger pie pretty the we more see it's slice markets we pie. may wealth small see We have in more bankers slice. of and those where may markets we in where have already a big advisers growth

office terms be those that In well. as adds, would markets bookend in of

on the that bankers would is correct you're sheet print So make new more impact banker of the the a of level. they're expectation And substantial and we operating months. item line in, be market seeing profitability the a their adding XX and months we within and see begin begin concept, to itself that 'XX between in segment depending known under experience they're of a the balance XX XX flywheel

The talking to tend question? 'XX. and pretty difference So really a were Did 'XX they're Did hand, you more those bankers. on there? ask a detailed to about make adding all about quickly where if maybe you other We're it's with markets. the advisers, wealth headed I need familiar answer

Benjamin Gerlinger

one sneak to was great. I'm going That more No. in.

a pressing you it repurchase, the Is you know of it of it think valuation path? here. relative if I button opportunity think If about the historical is guys relative to you've driven? share drivers covered peer? growth? thinking And about valuations, the Or your to buy Or is kind it Just bit.

Michael Achary

Yes.

I peer of capital, also think room but enjoy ratio book group. ability mid-cap the levels to, And our at look tangible for to now that improve. question. and grow it's a price certainly, to of the our that certainly let's certainly well valuation and value a compare we as there's to valuation valuation right Ben, PE our capital our say, We we it's function, as

believe shares. also you way repurchase one to aspect the tangibly There's this, company to certainly that an our is can as would show in opportunistic of we we And kind market that expect.

So it's, of pointed out. I part, those I in think all of just kind you mentioned that things

John Hairston

when we we ourselves divies the capital Ben, compare only Mike's repurchases John. great of tend this comments or And of a at to return peers, I'll to divi. and are mid-cap The to thing heavier to add look investors. some and is lighter were combination as

of repurchase, level want competing, it levels we're to we're balance capital. similar as for and like quite but think, and lighter and investor a be assured quickly the to. that as are now, we Rest at sheet we'd interest not I return Some at at heavier generally growing the capital on right

those it mentioned an science, I'd So we Mike all what may but are look than right things the it way a be and art of added now. kind more of at of

Operator

the question comes line from Group. Hovde next Your of Rabatin Brett with

Brett Rabatin

particularly basically afternoon. high guidance, But had to the income flattish be that of anything the half items guidance back if Wanted year. might of in growth, you the the any would be second for Good back that go we line the look in kind be from might the income end If trend Can I ask of to guide? past back of the the at And half 'XX. in a quarter. about is fee the or just question income softer restraining the that there the on think maybe, fee you fee year, half? back decent

John Hairston

is wildcard, I the take and I'll I matters income. big to when comes fee John. the related it portfolio -- Yes, success pass a rate This at mean, wildcard, that. wealth The say matters, environment big when

it's really quarter-over-quarter get try been that of income X to will record row X general, at what overly gauge we annuity to But after has not in in So wealth a net a forecast exuberant we increases be. record what or pace. that so quarters and hard

of we the itself, bit, So a fee but have that growth income moderate not it. little the

depending more was And to up secondary again. category still but A XX% at now little deals about going up a was enough in fee the what actually quarter. second make market, it secondary fees, the that the modest, sharply we're of first to Secondly, the quarter, on a in mortgage up that difference percentage the be environment, think total secondary of and the one impact obviously stronger to that back fee in environment assuming very on try have an conservative with happens rate relatively may year, of we're well rate to guide. We part in be And have flat the prove the that would guide. I that a as estimated half we than income income.

charges go quarter the to a service continuing guide rates we the be remain comes we quarter. again and proved stable year. second so perform to short, of it the going it be And a terrific deposit to expect then see to for little a may even to rest have continue is only side. is And to things better. SBA, If our mortgage that be quarter the card every quarter been record I down, which, category prove and the set to All when think third

stable what and that really mix sources call fee So continue to income grow. a of it's those I'll

being and a get, we But don't that to a of continue try get at need I Did at year to in those that market the want to are increases so the little presume I irrationally about guess We to that -- half continued your the I so rate. question? strong exuberant answer don't want kind pace. first luck of

Brett Rabatin

and Yes, that color, was John. perfect very it. I good appreciate

a South, it's demand just gave sounded color I think here Gulf I question to quarter, book just like you was, things in missed loan from the I credit bit it, portfolio. what demand other change back going if the a were it on any with grown obviously, but I perspective. The softening you you're would wanted reduction wanted if to shared the it, ask -- have past national little seeing absent loan the to in hear,

for seeing for half. about the So back think on was demand just and just, an update customers curious were what you

John Hairston

just sort can start dramatically since at a Sure, tone What using has goal wasn't can moment our the again as a color That Gulf first the to is screening demand. appetite the it's where, that day. like. South. we Brett. if obviously achieve wouldn't talked share I This the add is visited and they time about basis, second a of bit talked I'll we I signal time SNC say last a narrow changed really the is and runoff. more quarter mixed the already other in in John. of we've about That the the question was guys

a environment, and CRE primarily multifamily CRE for had last with little in occupied, But the best we X example, when say second quarters. a quarter really that retail owner in as as I book, in the the industrial generally, smaller we've of CRE, today's And had there. aside our an means section in in maybe production

while, pipeline on competitors sidelines a got prices Just been enjoyed that yields and that off for we're there which for lending. need sense to CRE for But team year. That speak not CRE second We've in than players we're of, the and The who the have had sidelined some quarter, great been the did this to the getting moment pressure competitive, at we that the we the seeing now we've have. for have sure have sidelined look much higher and business who make comfortable of up outlook be obviously, office to half of and come we and deal the a in more CRE seeing puts to make is magnificently. time. said, for to that advantage the concentrations types become the are at also fear other be versus

offsets had and SNC thing, fair pipeline good. but really given kind not quarter. be, quarter. and just a than home of balance been looks quarter. growing finance the good consumer bad, The number is not still, deals every So Pipeline a had still amortization we've production's levels equipment a very there the both still to would good to has their -- in light, got line CRE other sheet. stand And higher-for-longer to consumer-purpose do in new equity environment

So the There's a sort of are not those mixes. huge geographically. really difference

But hopefully, offset already be what the now, the half improving half it calling as guidance our in slightly as down maybe they are maybe of think that things and given little those the and the sprout right types of conservative. the toward year, will year. rate things to be and the we're sentiment doing frankly, the other on SNC proven I'm of our runoff as of mentioned footprint proud of depending develop politically flat I real our just payoffs a back doing QX the end for categories in of of all much green tepid some well. And shoots team back happened. of did in in the And earlier demand, is year, to the I

Operator

Your line the next Scouten with Stephen from comes Sandler. Piper question of

Stephen Scouten

a was interesting environment? you do longer-term trend guess ticking utilization less about think dynamic line this comment the thing about I you that one bit. overall there, see was Do is -- in moving little line the utilization accessibility how just up Or could thought on you credit to think I a a maybe forward?

John Hairston

a it That's talk good about question. bit. great internally a We

amortizing things they're they're look And at side, the really much of think, only of this to gotten way for but really tighter. just credit lines not who would they cards cards with lot You not led it card big have that purchase that we equity others home screened certainly is at equity time, utilization level can as a much play consumer enough hasn't a and being credit, at obtain, on us, But basis to the home happier. a have the really bigger mostly really bank, secured on purchasing we're that secured the or to that in big is point, that it's have harder where so a for put right lines typically the for their consumers appetite kind of appetite now. diminished

seeing we're in much of increase. terms the consumer not utilization side So on

is lines lines, forward. finally, on to going way a busier particularly pipeline, think they to category drag allow credit, remember, out when our and from C&D more. on half have drag because the XXXX. we as small to utilization little C&D of be I the And as to their C&D ready to improve begun diminishes may however, business then year. getting deals bit. half of C&D second grow That get start the lines mortgage they bit category on X And the from a in greatly And the migrating commercial begin of work the they the new and to Our what a think business mortgages that's they're C&D for this

actual deals you paid percentage as if the And until up get utilization down, they somewhere permanent, ] ready more parameter reporting into down me then the financing. up go the of go and are goes in then C&D, as to reported they utilization for way So inverse happens. indeed, going follow else [ the mature longer-term line the goes a

utilization answer any to is we of to don't it'll piece is the news. sharply down, particular be So question up your anticipate I on based up or slight over line time. I think what though, think

Stephen Scouten

fixed down other And a rate Makes I yields couple of of done thing higher looks you've have production. fixed disclosed the one quarters. trended last percentage as And Okay. interesting slightly rate kind that of then loan of new sense. you on guys maybe obviously found a the XX like it Slide percentage loans, overall

that to dynamic happenstance? demand more presumably to of to just try fixed of as So I'm of loans cuts we towards rate just that move intentional, is the is in half here a book and degree, I some kind in wondering, a more guess little bit 'XX? year the back rate or Or

John Hairston

that the of mix I few just didn't rate think we they do. bit what reemergence because a quarters, care fact fixed about and quarter. of And really competitive the competitors. in They past now much that too booked little the more of lending fixed is it's

quality, of low we're high but to quality and at So competitive. at credits not competitive very the competitive the it It's pretty it's the quality. book, is Stephen, trying the

Stephen Scouten

sense. Makes

just then And Okay. for me. last thing

of As you're sweet to spot that's think they bring you from of Or is be of good think gives size to how your a to give new drive any your stability other this your demand about hires, in banks a from the the to lenders be would that, those if you and in ability people we're you environment? think that there that's think asset you what just of kind lot like Or you it perspective ability I to these What want hearing versus will grow maybe it days on seems that's ability people. you color do for to kind peers? in can those It an ability on? part of? can. And people they if bring grow, mean, a of bring something that is in want terms lot

John Hairston

to points be them, a great now here. going do and I it's for that deliver company every I a actually to the that, opportunity such That's question. selling talk then And candidates to and the get that's when I

have the great of to point company deal We the stable, a heavy achieved very lifting very profitable. is

grow an of high-quality to become money time. not We've more sheet. have an to deploy add to dollars to from efficient we're capital We more invest offices afraid over to where balance perspective marketing the to earnings in lot awful saved people invest and

attractive. And so I think that's

constructive. between banker our we parity It's team team and good. the credit is very have Secondly, very our

segment on we hard instructive or work of While make credit, a given adding single to we where or sure try very to eye of environment we're level it's every not geographic together, they don't interested in always any and adding and very to very see are at what constructive concentration. they clear eye

thirdly, to then going very what in about I members where we're and team term. investment is with our headed look our is the think And company like activity honest and structure the near

So it's somewhat predictable.

of we has environment trim levels, So did to completed. the to a all already that been rightsize somewhat lot tough sort work office that lifting expenses, of

a who types may direction so people have organization out are of unexpected forward that predictable a And the coming activity at is bit an little lot more of more them. interested for coming

part prepared in that the rearview posture. my directed mirror, So at we're earlier and the of of we're type versus area, that like comment I focused is mentioned -- windshield on the

Operator

Davidson. the D.A. from comes with question Tenner next Gary of Your line

Gary Tenner

questions. Two

on amount side, the maturing fourth CD of third the Mike, can along on CDs prevailing First, this? us with the update you rates quarter, quarter,

Michael Achary

Sure.

third are over about or in we reprice CDs And we bit in think So range. that X%. little Those the quarter, off X.XX% somewhere have $X.X a maturing. will coming billion at the of those so

favorable So at maturing somewhere level at X.XX%. about a are And think those the to fourth again, go billion. X.XX%. XX of down of in And the dynamic back X.XX% about goes that's off $X.X we a to on around quarter, coming Those points. repricing CDs bit dips little will basis

about year. half back billion we in X%, X.XX%. So the Those of had dynamics second off the went those $X.X are in the And came the second at quarter, on at maturing.

assumes a that rate will X, improves assumptions bit bit those lower cuts more us CDs that the reprice cut favorable. X we half that the those rate maturing in or on an second going the forward. we the The little get dynamics year. I a a being rate certainly, of CDs you go to for think gave back opportunity related that Certainly, if So numbers around those to

Gary Tenner

full should of of going able the it pace we is or your I there hiring in to the year, Or it's for hires that -- accomplish other like demand? mean, into more of think been timing Great. read said looks that just pipeline kind is growth shifted anything going to to lower that of the or in are of before. overall outlook kind terms that you've question, loan call and loan mentioned as -- lowering this about John, outlook decline growth for the I put past, The appreciate had it. then second on or as you generated offense of And more rates you've being well had field, from I your on the to maybe by support?

John Hairston

a flat being really It's more tied Gary. a environment, rate to guidance to flip of all our

environment we our at a trying of We're back in growing terms to now make few come our If than obviously we a shot half remember, guidance expect. bit, income, all load are than things rate to the you growth, expense little more fee us of give the had we have balance very that cuts in extent to rates the a year expected rate all And of moment. to the simple. to the gives I on everything down and then sheet a that better anticipate flat of guidance. else more mean,

Gary Tenner

And fourth assume back if the third in were the quarter more time. one Why Okay. -- go do Great. there? -- CDs through What's question then quarter? that, Mike, the with Why higher? your John. what's the dynamic I those repricing you that pricing, priced appreciate CD I actually, to the maturing

Michael Achary

Dynamic maturing of the bucket.

quarter terms just fourth different it's coming and of off reprice. little So they're the then to mix where bit the a potential in in

difference. point basis X or X a it's So

buckets. be So significant, it's the mix of drop but the would the maturing not

Operator

comes next Olney Matt Stephen. with of Your from the line question

Matt Olney

I in we think for strategy XQ. quarter commentary the that funding the on this outlook Thanks saw afternoon. leaned go half the want the year. the to good borrowings the I you back Mike, to of that bank back and the mentioned just heavier second the in

then, of kind more of what guess, And thoughts in color borrowing half any drove year. I on the on the the that? back Just

Michael Achary

in I a of borrowings to bit think brokered CDs. related resulted the maturing in little driver the heavy that the second load quarter really

on offloaded the the half books at quarter, what time. to we was So we're million. of about down the of At end that $XXX

the DDAs, bit and of bit things bit a of one that also a that borrowings think, I little then, also a heavier little of was impacted and degree, public fund CDs. higher tax that a outflows then level drove But interest-bearing outflow little bit to probably transaction lesser little heavier probably

through those that that the balance we things So should really go themselves of we second quarter as kind impacts year. view kind of rightsize seasonal most of as the of impacted the

Matt Olney

back of Okay. portfolio any contraction, in the absence loan grow to of the year? loan half appetite And the potential then Appreciate securities that. balance and in growth the

Michael Achary

have point. of and should level that at into that certainly, it earn what play growth of loan the point, better. what is decision and a versus bond than at is to as go deploying into what them our deposit with little at But I funds those different to the earn Not and evaluate the balance through do excess current keep to at We'll Certainly, the we book. the this growth portfolio of the year will bit expectations bond at levels. we rates might can time, by kind that view think, we that related fed we is maybe -- flat the

John Hairston

portfolio, is expect John. thing just $XX QX. interesting into mortgage to off about this dynamic coming I'll today the X.XX%. Matt, amortization a million to That's month we level at The that contraction add is a flip is one in only

not beneficial, it's goes, to that NIM. income, only but wherever certainly, to So

but play the to any loans, there with don't isn't just portfolio frankly, And it then bond to right? intent So overnight keep may into all bad fed, modestly. you see But let right improvement now, in happens it the at either, so if growth at the the we same. XXX is sit hate the over what that

Operator

with question Janney Montgomery Christopher Your from of Marinac comes next the Scott. line

Christopher Marinac

you as passes? any want of how if loans review to in A that credit for Chris. little upgraded, next quarters you criticized and bit question get a pending time the kind of process the quick tell Can see us couple just about of

Christopher Ziluca

a seek try are certainly to we the different ways don't the that of manage things there financials alternate we'll wait a resolution question. instances manager a in doing understanding what relationship criticized what many client, the into that kind the nonbank that. we improvement, prospects close relationship customer. financing, is them it their to of whatever the typically, Obviously, shows we're Yes, We're good and for we're issue, longer portfolio. if segment lenders, that been many criticized either see encourage any it's of the customer it's typically and enough One going sort that staying or between to is to like in understand nature will a we of is we resulted of support significant it have change oftentimes that, financial obviously was Outside with event long-term company a loan issues. if There of category. close issue, event no as to their in it's the if keep ensure of it's category, to issues are. And resolved. issue an that That the

John Hairston

case quarters the downgrade. whatever Chris is once this that about problem X like you'd of Chris, more there, you or earlier, In timing thinking was see caused the seasoning to were John. offending mentioned original X

couple, quarters healed to a like X do the you it You'd upgrade. before see

rectified. going is it's if in immediately category, gets something it X even a couple, that there quarters linger once So to for

tail solved. they we're and the down And up make that they've cleared point to a we brief. their expense stretched problem to know and or But I call, with example, a end of pandemic during so an leveraged then use a revenue I'll the their created expense keep got couldn't hour-long that simple a bit an load up, at and it client then might a we if into time later, couple, a like need they have we had as breach, just rate X present get to the covenant trim higher justification that that back to environment, loads feel quarters the if

a we linger to monitor hard they were So we and whether place, answered them that's work what looking to Hopefully, bit. or assist to for. maybe obviously, where get can them that somewhere But else. a better you with us

Christopher Marinac

No, a follow-up. And quick great. just that's

reserves, the put the future quarters? be allocate you do commercial Or any in see as some you of just allocations more real estate? related towards maturities to may that Just need to coming

Christopher Ziluca

Yes.

also Mike to geography say, and it if so. of do So then him I'll portfolio. happy enhance run I to based both quick at portfolio take a a our on bit whatever do segment and wants We on little for

we commercial towards although further decreasing factors portfolios within us we so portfolios, that When portfolio. so. this that increasing estate related those that down not do in to sub get of do influencing real certain current it's kind the to sub allocate And environment. influence or are more than we may you that, would And expected to tend there reserve sub down allocate

our are forward higher that's estate a a we in the really estate nicely. And said, time, don't estate for up fortunate reserve of we view. there relative like feel real past, would recognition increase issues. than current So our And point, known our I That holding say in instance. obviously need real kind commercial did is at the real the for a level portfolio book this and to is on environment to commercial commercial that have do, we reserve we of any

Michael Achary

Chris. I'd Nothing Thanks, add.

Operator

question-and-answer over I the call closing concludes And John Hairston now will remarks. to our turn session. That for

John Hairston

in the day. the everyone, evening terrific your interest a trading and moderating thanks, terrific for bank. Thank you, for Have after Krista, call, really a

Operator

Thank you This concludes your for may you now today's conference call. participation and disconnect.

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