QCRH - Earnings call 3 2023 | QCR Holdings, Inc.

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Operator

Greetings, and welcome to the QCR Holdings Inc. earnings conference call for the third quarter of 2023. Yesterday after market close the company distributed this third quarter earnings press release. If there is anyone on the call who has not received a copy, you may access it on the company's website www.qcrh.com. With us today from management are Larry Helling, CEO, and Todd Gipple, President and CFO. remind summary the financial analysts.Before be call I and like a we'll and we Commission. providing provide of Exchange defined would up some by guidelines open to to statements falls will under of management of results the then begin, the the Management information that forward-looking will as everyone questions Securities from the

of beliefs, projected. the materially during of are the statements call expectations these and company's the from part and predictions As statements made hopes, future differ forward-looking actual guidelines, concerning could any results those

the company's measures.As XXXX, starting Helling as will hour Additional well included to replay turn at accessible It company's Xnd, GAAP November reconciliation will being not the this a for Larry most of discussed call be afternoon Mr. filings, website.Additionally, release SEC The now information these website intended the available GAAP information the refer substitute which for also contains press to approximately financial and the to completion is conference may are of on on after this X recorded the but website.I non other call. to factors this in the and will measures. quantitative available for supplement, as comparable management on directly on reminder, measures is are the GAAP available the the be be which non-GAAP over Holdings. company's to QCR today

Larry Helling

providing for quarter. I the to Welcome Thank join and taking highlights us everyone today. the by start call you, will time thank for you the operator. some

results, on an for and will strategy. details Todd our growth interest provide loan delivered quarter our specialty highlighted results We will also securitization by a a include net finance our loan margin, quarter.We static third fee financial robust business significant on solid additional income. with the of update review

remains quality are capital our asset and In strong stable, our sound. is deposit our base ratios addition,

Our by our successful demonstrate to the quarter. interest continued second and X.X% In a net results of million and share. third the of the quarter execution we net strategic grew strength static a delivered commitment initiatives.Our our from income banking, was income franchise our and $X.XX year-to-date The relationship strong increase $XX.X of reported loan quarter, third per or driven margin the diluted growth. net interest

we quarter performance XX.X% on Our ROAA was for adjusted per adjusted XX.XX% our our the near $XX.X the target EPS and basis. an And growth of and adjusted of high adjusted income stronger net to was share. groups.Loan end the million quarter, for ROAE We continue annualized generated X.XX% diluted in growing of $X.XX quarter. the an was an peer

from Our credit quarter. housing our activity an the our stable. program.During during third second loan XX% tax or was growing lending quarter, contributions deposits relatively million traditional the Core growth and solid slightly our were stronger declined annualized low-income short $X after driven on from million $XXX deposits even core basis by excluding deposits and business broker by lending term

our strong to diversified of Our and relationships experienced franchise. continues bankers team deposit add to

Our uninsured at of at remain and deposits XX.X% uncollateralized low total deposits quarter end.

assets our as balance the other asset quarter basis was on and sources of XX upstream at to fed end. points and substantial Loan Home deposits.Our assets Our Bank, than more liquidity remains strong available the at quality total combined with Federal sheet cover brokered and liquidity ratio uninsured non-performing uncollateralized

quartile near the of Our continues upper to leases losses of reserve investment total for group. X.XX% represents held for peer our be loans and and credit

Our reflect reserve and challenges. approach economic our potential provide levels conservative against buffer a

pace.As has we resilience remain national rates below about of average our activity and interest elevated last billing we markets. the is well our significant at economic Midwest While footprint the properties mentioned markets. in across a Unemployment quarter, size These business with we and expectations optimistic exposure our predominantly with to loans are repayment steady with of commercial cautious office uncertainty, given remains performing are suburban average concerns. located no loan total collateralized low and line just $XXX,XXX. our of adjacent are They're to an in X% locations at very within continued or

maintain capital We strong continue to robust that levels growth. another have supported of of year

With our the target on We strong an we continue are and annualized capital building grew quarter, top capital loans loan pending with basis. a being ratios annualized an our of further XX.X% our on on in securitization, to growth peer focused dividend, group.During earnings we levels. the XX.X% basis, year-to-date modest quartile

by low lending credit As I primarily driven was this in our tax business. ongoing strength noted, income housing

with With spend credit standing some relationships. Specialty built team whom again in have business, performing of lending drivers prominence will quarters, our business.As Group of Finance time our tax lending LIHTC we long I stated finance have and high the housing developers growing investors offers the prior group a we this of specialty low-income select discussing and to

Our their housing in continue clients projects decades multifamily negligible has excellent of and these industry the record the our exceeds industry ideal need track affordable quality strong for historical are experience for as an with rates. fault stability to loans own supply.The on demand for experience, high securitization. far Based

of ongoing quarter, third totaling We $XXX this exempt and lending is ongoing that tool loan in a to will the corresponding valuation million to production is valuation a quarter taxable a an provide in effective this our from this $XXX maintaining growth a continue capital of close basis. we pool are million. held are LIHTC range dollars we portion LIHTC securitizations outcome LIHTC revenue two of loan that also deserves for discussed, our continues pleased banking.While with receive subject annualized securitizations It previously view capacity approximately our business loans of securitize capital. exceptional, We basis, of markets and have announce end to valuable an was continued that for first X% we the existing as the costs. portfolio believe than Both guidance be that have we will scheduled pool and intent our strong. and in our quarter to plans loan prior breakeven multiple managing an our on The As a and XX% as growth tax liquidity to to to on LIHTC business.I'm fourth November. to for our higher be now the closing these pipeline to for in be extremely for investment financial final traditional transaction it fourth scheduled

company addition, we robust to have longer remain deposit capital a core positioned for call higher Todd net defend have continue a provide interest interest rate sources, when the believe further risk, environment. While turn we demonstrated margins fee over combined a as second franchise headwinds with we we detail to our excellent that and initiatives.I income our quarter ability credit current a valuable strong quality, benefit position.In execute to shareholders These historical qualities, economic regarding have results. to now on our the our to valuation, in our and will strategic

Todd Gipple

comments Good today. balance Thanks during Thank performance Larry. you, details my morning, quarter. us the sheet everyone. with for I'll our on joining start

of loans end growth. held-for-sale. as loans the quarter, In XX.X% Larry we as during the classified the on net $XXX $XXX of loan we basis annualized securitizations, or quarter, of million anticipation As of grew of LIHTC have our an mentioned, total million

our fourth loan liquidity and Our the quarter TCE improve enhance will in our ratio. securitizations

our enable strategy maintaining continue business term business, receive concentration the long the capital growth portfolio our while securitization addition, levels.Core that established markets from we to In our of were to stable will and for LIHTC the quarter. corresponding within deposits relatively us fund the revenue this lending

on nearly us basis XXXX growth. deposits to our core has which We have during an strong grown X% annualized fund loan allowed

quarter. rolled successfully that $XXX also deposits off in of We broker million third

total at low a deposits end quarter XX.X% were As uncollateralized Larry uninsured very total level of mentioned, and at deposits. at our

includes liquidity.Turning our controlled share In net well end, $X.X with sources maintain $X.XX billion $X of available of per addition, driven in net million quarter deliver the the quarter, and along expenses. income company non-interest income by income, of earnings at income available strong for liquidity billion we interest or to statement, immediately diluted $XX.X approximately higher which

accelerated an Our basis end of beta linked and slowing of on yield a we static basis experienced adjusted remained $XX.X which yield our quarter. our higher expansion quarter at $X.XX more Adjusted guidance Net to from prior deposits was while and X.XX%, a was income the composition the loan lower income cost modest net diluted of non-interest increase on range.During a from $XX.X of at or equivalent beta top the tax NIM the quarter, third was the our increase per deposits for share. on our million, million funds the interest deposits. of X.X% shift

a margin interest and mix will fourth and the to are our quarter, be continues in it from are that We going Fed to look net benefit deposit to see continue the pause stabilization forward.As we pleased curve anticipating inverted. believe the partially to that we a yield our

We will our deposit slowly loan levels. increase expect but and more to offsetting continue at betas

in further deposit Our and stabilize funding the our help securitizations lessen on fourth will higher costs the quarter pressure loan also mix.

relatively the we're low TEY X basis end.Turning NIM on income, within million fourth to adjusted and of expansion a high of basis points result, quarter. X was non-interest the which As a in end getting static $XX.X quarter the a on third to the of in points range our compression

quarter, outsized continues in performance this million and and million construction $XX.X swaps stabilization million from of revenue Capital of the outperformed annualized from strong affordable demand chain Our the quarter. capital benefit costs. for $XX.X our down was guidance to in supply from $XX.X revenue prior markets markets range. the the while housing the production And

income. will source have revenue decades and well interest developers fees LIHTC project been their markets in rate addition, stacks fee and successful own perform strong economic the throughout our experience, been various the In stability swap on cycles. industry consistent has of a environment.Capital we that in business this restructuring in believe of current from Based capital

demand pipeline lending and capital clients LIHTC experience healthy to revenue markets strong continue our for as remains projects. new Our

months $XX with the basis, range to in basis. $XX the the million.In $XXX,XXX wealth X% As a wealth revenue on management result, nearly maintaining year-to-date million a second quarter. in On we or was our of an next for we markets quarter capital a up annualized $X.X management of XX revenue generated consistent third addition, guidance revenue are

in this and assets management the management new benefit Our relationships, million adding $XXX first clients months wealth in under X year. continues XXX of to team new from

continued the of the bank new market the in our management Our to pleased during at market wealth Missouri relationships business third Southwest new volatility also quarter.We're guarantee growth helped our announce start offset charter.

of increase a reach our high for million $XX.X highly quarter The $XX the growth. offset team to from disposals. current our turning remain primarily year-to-date These quarter our expand million. of $XX expenses wealth totaled at asset the were increases place variable the in and partially for expenses. increased to to controlling quarter range compared expense expenses. was processing by employee Non-interest fees second million compensation for and data higher performance, that experienced management to We in diligent due of related to third have the expense our business.Now million prior the will We marketing $XX.X guidance and professional end advertising lower other and fixed

to reaffirming quarter the range are non-interest guidance quarter asset million a be in $XX we of For expense strong. our $XX million.Our quality remains fourth again to this

that X.XX%, the relationship percentage positioned basis environment well historical we're million remain assets. economic was as During resolved that We from assets. Approximately XX Majority criticized and percentage our loans continues relationships of the primarily NPA uncertain given X/X driven XX exist.Classified credit today, our NPAs those XX-year significantly of believe loss. increase also NPAs $X.X client has by of total believe and one industries. remain basis X.XX% to a averaged low and the quarter, X total and at historical on levels without we and or and $XX.X will leases points by be unrelated consist increased million this points of experience that quite loans the approximately to below respectively. of

during $X.X and categories, historical relatively quarter the Similar during are NPAs, below loan $X.X historical over the credit to have remain in the stable XXXX.Provision X.X% provision and average quarter. of percentages losses included loans approximately X.X%. and course our of leases, growth was million we XX-year criticized driven for primarily classified million they loan averages by and of remained for which Our these the well

maintain to expect to We strong given reserves environment. economic the continue

our of year for investment levels the loans and maintain at static end to capital continues have to robust of be held reserves continue X.XX% that was to of at Our group.We growth. fairly supported higher peer another solid

very points total capital Our the to by risk growth XX.X% the quarter. due during declined XX based strong ratio basis loan to

and assets to tangible on rates to equity resulting derivative our the rise in ratio in in and during common per declined AOCI the the our tangible by during our third decline negative the growth dividend, tangible XX ratio increased the continued strong AOCI partially securities X.XX%. with due our Our modest to $X.XX earnings quarter. to decline tangible value quarter coupled interest basis in portfolios.With offset value. TCE book the The The book was related points share impact

quarter. portfolios portion quarter. from strong a a of Our in and quarter and targeting on this We the during second our and tax loan quartile growing capital was X.X% capital growth the rate quarter, our the effective tax capital in allocation the priorities compared peer focused quarter benefited group.Finally, exempt third top our throughout remain late quarter the our bond full in to second XX.X% levels of the that added for was

this one the lowest peer group. our even result, our a helped effective and has of drive tax rate As in remains lower

to We open are effective ready added quarter.With expect of tax call for to Operator, our for that fourth the questions. financial a be our question. rate for your quarter the the X% XX% context results, first third let's we range in on

Operator

question KBW. Damon [Operator with Instructions] DelMonte Today's comes first from

Damon Del Monte

start in points plus be the in to the anticipating on off could minus basis margin here Todd, remarks fourth X you're said I that you commentary. wanted quarter. Just think the margin or your

which scenarios a margin change? that on on the mix Just kind that are there Like, side could the which you under of have is direction like impact goes? deposit wondering expecting something bigger which to

Todd Gipple

Damon. Sure,

of fairly guided couple assumptions static hikes we've would fourth of November, to, base mix November, a it's as around we the a X% of loan Fed that XX% shift no did big going in our that in XX% static, sold mix third terms off the October. slowdown is basis lift we've here up the growth and assumption remain in will quarter. in roll December. points So give on that guided the having The real to But be candidly continued that's positive see quarter, to us securitization deposit loan to to in in

$XX is quarter. bearing non-interest actually the thus in million Our up far

pop. static both get very effectively continue about margin.The would So on some we're loan with that of and for feeling that of just all we're how down be optimistic to reason sides the up to goalposts yield going

on And we We optimistic I then loans. that some yields really and nice ahead of are. of continue static are more loan our color starting to around to new gives guide. see static assumptions extent on to hope we're hold a you mix can also the enough more deposits, what a that that little

Damon Del Monte

I what helpful. this, are Yes, sorry out like new on generally do have I'm was what production? books, you -- So happen yields? what And loans coming new that if missed kind to of and coming but

Todd Gipple

Sure.

That Floating accelerated were $XXX of new -- million. loans, rate actually So alone well, million terminal $XXX that to $XXX And also the fundings the be million up in for actually also that's a of LIHTC million in most during quarter of the would third our ramping was those that average rate quarter. September and in category. third production yield our quarter, were in up had quarter, but into $XXX was which a September. all

hold that's And of a So some guidance, see lift NIM in starting terms are big in to to real new production. of the on able to said, us I loan as NIM. being we nice part

Damon Del Monte

this NPAs the great. of then the came It's or quarter, of the part those credit no? under guess was And to that It's three one it. in those X/X relationships overall kind that Got of I the regards helpful. of books

Larry Helling

the one One deals years which the a X/X of quarters. X ones the for last of in PPP step the couple actually was those ones money Damon. new look homebuilder. moving They you And toward The on credit, on totally I things. normalization because absent toward back that were and it been of what all slowly of industries, came if a one kinds we're hospitality working space, consider couple daycare. at a new came that and on. No, we've The X different was one small

if were borrowers gone of liquidity got So management issues, especially kind by the most covered people, up there had. That's that small businesses. really it for excess now

So years showing decisions But bit trends. base we X don't a they ago. management more are any little see broad did up than

Operator

And next our question from Race, Sandler. comes Piper Nathan

Nathan Race

Going back guidance the to of that the the the about dynamics the balance factor of XQ. for sheet right margin discussion, think and side just some into kind of on

what first plan obviously, But those with the securitizations guys the the can to quarter. up versus down fourth I in you off as the the overnight brokered in curious to some quarter And second come there Just borrowings CDs run quarter. well. extent the imagine are of

we seeing to additional the of about sheet, going core the you So growth of trying how forward. of and deposit kind in balance size overall about of should side just think what right think the opportunities are terms guys

Todd Gipple

Sure, you're you on Nate. going was the for comment and free we're up and what placeholder million in of fourth that were $XXX that spot your quarter. on seeing, opening to securitization what overnight here really a is liquidity the the Yes,

So placeholder securitizations. able to we that for as funding close we those really did until a are

We So million quarter rolled this of had we and the a most that see $XXX actually recent brokered that away. million in off average would going handle. $XXX

liked new seeing of a brokered. growth. somewhat about any fund were we balance So in with terms they would we forward right core costs. little to be replacing mean, us not it intentional. static look big that's way. punch Again, trying roll line was bit securitization We're that the at deposit that with our of with expect it I out to of another deposits, new felt We you some generation with the core off of the sting maybe the going that deposit and really good the That overnight, you essentially and sheet, all to core deposits.When side loan growth quarter-to-quarter. the take But deposits, with more ability for from gives lift patient not

going brokered, us not core that anything to we so $XXX of leaves and but expect that's to rolling it And with replace off keep million XXXX. with roughly that And deposits. during mature would

Nathan Race

what replacement today? those terms seeing lower that And new in than guys core on of are the marginally deposits costs is broker CDs, on you pricing

Todd Gipple

course, X-plus very and bankers fortunate big X or Well, new management such very core really handle. we're But with and deposits a of to the have of handle are some platforms. pricey, so chunks a treasury still good and come strong people

So do pick relationships. up to continue core actual we

And we're so that all-in, client, of those pay pick market to we're mid a blended blended Xs. going a on excess non-interest to to on, new of the some in be when Xs. a really to we're come coming to higher upper going have might blended rates somewhere going cash, in, some then And probably we're course, up get they we to in some get be rate, management those treasury money would when for bearing, to the again, looking which bit little brokers, but try keep their that to close

swapping just really funds of So perspective. cost a out from those

Nathan Race

at Got to about that you for are the relative you And cost midpoint guys the maybe that is you it's XX a kind next how expectation the about Is fairly have to I guys any variable the to in expense historical And revenue That's I limit markets for about I expense of year. appreciate X%. know terms of months? guys terms fluid year it. growth reasonable next guideposts expenses of year? thinking in overall next have just situation revenue. assuming capital a for thinking just thinking next goes of goal But think very helpful. point year. And in structure this a

Todd Gipple

Sure, Nate, on. be that would spot

is non-interest be to guide strategy good XX% Our still strategy guidance ourselves X% next and in our range. the for We expense, what year. XX% about holding accountable or our X-X-X we'd QX to feel

company it X% is understands use, what modeling in that because the If and in our be tie you're does 'XX, X-X-X everyone strategy, out our thing a guideline. good would to to certainly

as budgeting, next would so we're X% that And and expect now. right Larry better. year's that's And the or certainly the you in would middle of for non-interest expectation have I expense,

Nathan Race

couple just think quarters without you credit talking going loss a to great. X/X we've Okay, that then I guys of about of quality, back that resolve expect for proportion now. And NPAs to been a

Larry, that resolution of So timing sense to is on occur? the just any expected when

Larry Helling

We're is some mean, It's it's a when certainly hard the started handled channels. get through Yes, through that legal tell next I of legal a very the going it's workout probably and middle into to process. we that these going situations. quality guy of kinds that yesterday, you still you year get really to talked when valuable. before good clarity asset the I

that resolved. probably we year, expect before next would And in back some we get we now to so it's we smaller can then have half of one to But between -- expect ones resolved. and be

Nathan Race

kind Okay, one Was $X in one just going level plan up income nature guys did quarter-over-quarter. of reevaluate the about sustainable that of last great. question. new is you quarter? forward? in asset kind And million And [indiscernible] that a time housekeeping or was more

Todd Gipple

Yes, one-time Nate, is event. That catch. that's good a

quarter normalized So number second back to going would run rate. be a the more

Nathan Race

tax if your prepared you remarks. any I And I on going that lastly, thoughts apologize Okay, great. in then described rate it. the forward? just missed

Todd Gipple

range. We for be of that normal what you. in to those we a of we numbers, all. Yes, probably right we're little up would be XX% at be that. going problem guide expect for a bit the guidance somewhere That our the X% now, quarter. given that no, that going XX% did to hit in on little some guidance fourth more We quarter, a to in terms And have from expectation is this that's all would not give to X%

Operator

from And question Janney. comes our with next Brian Martin

Brian Martin

quarter. Nice

here. asked things of that couple Just weren't

X% range a what year, to still just of The on given Just Todd, we rate. team. new good know the is that Well, guess today? I tax bookend wealth just, for maybe, XX% from the thought kind for next quickly year next

Todd Gipple

year in January go think some full when good likely have QX. that for for a that. now, you talk to now of with We'll around more clarity we for I'd I start. for probably to Brian, that's late all place 'XX Yes, But

Brian Martin

mean, right. it All bit guess being I just margin, or anything Larry and in guess, Todd. a I a -- one couple haven't else talked you for kind just you confidence a -- maybe last maybe you environment. just bit -- -- as more I confident then out Anything mentioned of statement, you as talked a more to what supporting already defend Okay. far it, over feeling And just the longer look as of you one as on just far talked the that kind today? quarters? above about about Can you give you've margins gives higher about?

Todd Gipple

Sure.

has has balance cycle, margin what to that this the has the during came think month We've has even that outcome maybe quarter, deposit we to here at October. so fourth confidence to on of gives side thus that the what into more allowed was static. us be XXXX sheet. that nice the biggest far the really going I basis right happened of margin, XX That's a QX. guided impacted of we're why this in the that down. thing, settling course, us side and Brian, of balance is what's base And lot did at settling And static the of really we right and really sheet, seen continue what Certainly the static the been in hiking -- through had most deposit in down been points, base, stabilizing. the show our

not the our in. So have but actually settle it's just the starting mix to shift good beta deposit results has been slowed, part quite really for The stopped.And on stopped, side. most

modeling. our shift betas caught and really course. mix industry, caught outperformed that Our of have the us just the It's

on we're thing confidence this to like So If environment that in we're to, hang margin, the longer, a more point margin. that's gives about it. not able to going static I for to believe continue Brian, we going be rate us we're to really to would that feel

Brian Martin

worth, guess, tied it where And is Okay. the that spot September, was margin my in at?

Todd Gipple

Yes. Sure.

in in year again July $XXX $XXX full September, In the was for that million. our forward was August, go million. was was So it $XXX And $XXX well million. million. bodes And because it

So going QX we confidence some saw a gives and forward. nice us real ramp that during

Brian Martin

you. Got

Okay, that's helpful.

me. Just last for X

accretion. that Just housekeeping, think I of you on where it to next kind the couple here just pretty the to level quarters? Is the close of about last -- a was know talked quarter at. good

Todd Gipple

It is.

leaves million normal us it than at that $XXX much if model would So close I continue was per roughly million, in our million $XXX at to left. And quarters. would $XXX for looking of $XX it more And being you're so is accretion again million that And with XXXX really, $X which prior $X QX. show million say, that accretion quarter, million roughly

Brian Martin

kind of the mean, your Got be to now, is you LIHTC. to with utilize securitization on you. targeting And securitizations? I you be? that the the What kind of where if like where -- portfolio where your would concentration that limit,

Larry Helling

around we'd have we'd like -- at of Yes, our a how it bit to look is Brian, as probably we capital a the little of percent that capital, today. percent that one, maintain

going comfortable to grow continuing to as do we're grow, What we've over of that more be will the at on loan like our long funding is going had over you if NIM a through provide do now, balance a that's more investment held think It'll great because We sheet under us. the to forward, to or on sheet, eventually. we're better on securitizations going the look step XX%, period a back period of for growth we the time, as grow time. long roughly so for and capital that has flow pricing going growth been power balance mechanism, loans X%. total And really to side loan deposit

but we And years. more so have those pace we're at last a over to the going couple of slow grow than

Brian Martin

on new the you looking it have And just that a so on And guys commentary a brought dynamics -- like a side? on the elaborate Okay, at been any team But congrats bit that makes sounds little maybe on, that. could is that last for can the just sense. just on provide? you roll you changes wall on that how while,

Todd Gipple

we're started community. excited Sure, us a in base management. very got Missouri, Guaranty getting Southwest Bank, this wealth place is Brian. about a deposit Southwest for to it Missouri And great has in No, great have

here we're individuals the that and have make had the have of hired integrating So our with have and in to We them new already actually getting in bringing started. all sure very front pleased running clients we're them. bankers already. ground faces right We're two to

nicely not our high is City beauty where our operations we're our and at We operational have trust up our of Charter, Bank having expectations grow folks operations. quickly model trust in Missouri.The that charter, to the reside. for for use entire Quad to of all and very first So we stand here Southwest

can learning very, wealth that management process stand to don't focus them so giving long service. up need they long great really wealth bringing to clients need And very and cycle worry don't the the to office. just a about back on this a And management. office.So in very grow group is back We sales and

our in millions started, the to the but dollars going in hundreds we're sooner sooner the market. going of AUM see build get this big shifts not revenue quickly, numbers you're of in So we to

Des you, our in be Moines We'll to the So we're very we're pleased same looking tell thing. to just do metro, started. active

announcement gotten Des an we've to in and we last that sometime management that next hope have running Moines. So market Moines in Des in off year wealth

Brian Martin

the on the Congrats hires. quarter Perfect. and

Operator

James. Daniel next with question Raymond our from And Tamayo comes

Daniel Tamayo

my question But pipeline. on of this have the most answered point. my of questions one been just at Most

to And but of kind at on mentioned I'll if of in the quarter, has LIHTC pipeline, started separately then LIHTC guess business resiliency all the ask You business. curious the the follow non the particularly I through slow the up that

Larry Helling

vibrant, given remains pipeline the LIHTC housing. demand the affordable certainly for Yes,

little really kind quarters ago a actually rates of the commercial bouncing I the back actually commercial head because actually The slowed business that's core consistent. certainly stressed business, owner clients by get stopped, starting rates to core in of that. of couple with the there's slowdown think to -- be been demand a manufacturing bit. decline but a fairly and business, around occupied our people -- X% of dealing developer So some their for that appears kind as started And just developer kind We've interest got had, in to investor range.

to X% growth commercial. historically, but our in maybe that grown pace that at now we've So core XX% modest

mixed can at to bag we pace we And so in grow comments. you're we it's But of which now, outlined depending assets on a right our think in. continue kind the sector

Daniel Tamayo

cycle guess I great. there's any on found to the follow And talked up to this have then different that loans LIHTC? this kind of Okay, of I of about attached LIHTC being very know your effect in in just kind history you've the curious But credit -- business. if added them any the credit lasting opinion. cyclicality is to credit you at point Is strong. a have the

Larry Helling

none. These have believe, assets be books. highest continued, I'd is I No. our are on we it's What to almost say loan quality the

housing no none no have is so the issues dues, -- We We've stabilization the great. with got them are demand have past we that none classified. LIHTC affordable criticized of for ones of or because with

tax a asset capital There's have been deals of taxable, strong has on these a quality this loan into lapse a And very years, reminder, of XX with last values lot cash underpinnings different credit from low stable are standpoint. two just in these made the very over an a exempt. or structures, performer so we that there's standpoint. whether from lot depending to steady and a these, of And but

Operator

from question Davidson. from Rulis next comes Jeff our D.A. And

Matt Yamamoto

on This Jus. for is Matt

for Just a in if asking growth it. expectations missed in And appetite just, also what's But total securitization guess, I question. for Apologies I then the XXXX? loan LIHTC indirectly XXXX.

Larry Helling

we've yes, down to a loan a probably better simple book portfolio the talk our time. our And XX% to to we've over time it if me more securitization going operating historically a more So Again, a built. you cut of of loan X% got grown growth clip maybe manage over do methodology, securitization. about with long book what kind period broadly. bit the let is we're that provide will We now think that a the using of results little

learn few several next do after year, probably on two here these going as the in to we securitizations so that done guidance securitizations will we first get weeks. tranches we'll plan next fourth a get our call.We're quarter during to and lot And more

give as you a And allow we -- us clarity give better to on some and our us so strategy forward. go that'll

but securitization. next year, going take we're So loan top be growth, meaningful at still using expect the to we to the off

Matt Yamamoto

then given here. it. peers hopping if regulatory or just kind color. than look of of the great over to healthier at TCE side headwinds. And Capital Got That's AOCI capital seems you the lack

wanted Just sits on your to capital where get a sense buyback of priority. the

Larry Helling

the top probably very two, world, far the not on of seems going But TCE feel some And going just environment. TCE. near group. probably hold kind interest and on we probably capital capital uncertainty and from that's One, onto given to on then and building it's for right there. and the buyback to that ultimately, our like focus in the to any quartile of be don't have rates, Capital the climate, to peer next until regulatory have get the we're We economic plenty cautious onto going economic now quarter or of once it certainly in we're term, prudent Yes, and And clarity the on hold pressure we're the on we it.

next during aggressive being likely buybacks. we'd year, at more Sometime look on

Operator

any Thank you, like I'd over concludes management this closing gentlemen, the to to question-and-answer session. team back the ladies remarks. conference your and for turn

Larry Helling

all I would our company. We you forward your for our soon. look talking like today. appreciate to in We to joining again thank you call interest to of

Operator

you today's presentation. concludes Thank you. call. conference thank today's for attending We all This

a and lines, have your disconnect now may day. You wonderful

QCR (QCRH) 26 Oct 232023 Q3 Earnings call transcript