Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| What we've got is the ability to scale and it's a very scalable business, if you make sure you scale on both sides going up and coming down, and our management team has done an excellent job of doing that and I think has positioned us well to be able to, as I said, take advantage of the tailwinds and obviously deal with any headwinds to come |
| And because of these shifts, our loan-to-deposit ratio actually improved to 98% and our loans plus securities deposits improved to 106% |
| This quarter really was a testament to our discipline and core profitability, and it's what creates the positive outlook we have for the future |
| Because of these strong core earnings and the minimal impact to AOCI from our bond portfolio, counter to most of the industry, we grew tangible book value by over 12% annualized and moved our TCE ratio to above 9% |
| And I'm extremely proud of our team and the financial results for the quarter, and I'd be remiss, if I didn't take time on today's call to thank each and every one of our teammates for their contribution to our success |
| Our net charge-off ratio improved to just 23 basis points, and our NPA ratio, excluding Ginnie Mae's, improved to 27 basis points |
| I think I said last quarter and I still agree with it that if we can come out of this cycle above 3.50% that would be a huge victory and we still have a very strong margin compared to peers, so |
| Especially, if we start seeing some improvement in rates towards the end of next year, we always look for tailwinds as much as we do for headwinds and I think that's one where we're very well positioned to take advantage of that |
| And our year-to-date margin remained strong at 3.63% |
| We continue to be well capitalized and feel comfortable with our capital and our dividend levels |
| We have a strong balance sheet with diversified earning assets in some of the strongest markets in the Southeast, along with a healthy allowance for credit losses to absorb potential economic challenges |
| Our focus, as you can tell, remains on the things that we can control, which include core profitability, capital growth, and our controlled asset growth and this is what continues to position us well for the future |
| But what it does allow you to do is the growth you have is, in my opinion, it's better priced, it's stronger credits even in an environment like today and that's kind of a mode that we will continue with as we go forward |
| I am proud to talk about our solid third quarter financial results that we reported yesterday |
| We were pretty excited about that |
| I mean, Nicole, as you said, great expense control with expenses down like quarter in 3Q |
| And then again, some of that will change kind of temporarily in the fourth quarter and first quarter as we see those public funds come in so that we positioned ourselves well to be able to manage the margins and not have a lot of that excess borrowings or brokered out there |
| Our return on tangible common equity improved to 14.35% for the quarter |
| We have ample liquidity, ample availability of both of those places |
| We're pleased to say that, when you look at the gain on sale margin, it's stabilized and so because for a while there, we like many others starting to see deterioration in net margin and it seems to have stabilized |
| We continue to be very close to asset liability sensitive neutral, which positions us well for the next to that decision |
| Our margin came in higher than anticipated at 3.54%, down just 6 basis points from the 3.60% reported last quarter |
| This drove our adjusted efficiency ratio down to an impressive 52.02% for the quarter, an improvement from the 53.41% last quarter |
| When you look at production, say last quarter, for the sixth quarter, second quarter we were at $1.3 billion, and in this quarter we're at $1.175 billion and I think that's kind of a good run rate for us as we look out |
| This provision was model driven and not related to credit deterioration as our credit metrics actually improved once again this quarter |
| We had a positive move from our deposit mix for the first time this quarter that actually was about 2 basis points up |
| Great quarter |
| On the revenue side of things, our interest income continues to increase |
| So I would tell you that I think our current run rate is a pretty good barometer for what we see as we go into the fourth quarter and next year aside from just normal seasonality |
| Casey, I think with all banks, which you've heard is just kind of, as I mentioned earlier, people just being more discerning, and then obviously the opportunity that the industry has right now is to really take advantage of the upside of rates on the asset side of the balance sheet due to the rapid increase we've seen on the liability side |
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| But what that means is that a lot of banks are going to remain under pressure for the earnings |
| That was all in the mortgage division, that was about an 11% decline in mortgage revenue |
| We've seen some of the erratic high customer deposits |
| But again, due to rising deposit costs, our net interest income declined slightly, just about $1.8 million down to $207.8 million for the quarter |
| So when I think about margin going forward, I'm very cautious to say that we've troughed |
| And I think there are some behavioral issues this right now that affect margin more so than what the asset liability model does |
| Kevin Fitzsimmons Just it seems like, I don't know if it's three or four quarters, it seems like a number of quarters in a row you guys have, it seems like from our vantage point have been deliberately or proactively building the reserve, so sacrificing some of your near-term earnings to do that |
| Non-interest income decreased to about $4.2 million for the quarter |
| So the ALF has been and I think I mentioned it, may be starting in the first of the year is we had some downgrades in that category |
| I'm not ready to declare victory yet, and I'm not ready to say that we trough |
| And we certainly saw that slow this quarter |
| And so as we see that and assuming they can get regulatory approval, which right now is a big timing issue and a big if all the way around |
| And then the third piece that's affecting margin is what I would call competitive behavior, and we've seen that certainly stabilized |
| Mortgage volume will obviously pull back, we pulled back intentionally on CRE, and you've seen that, that loan deposit ratio pulling back |
| The decline in loans that happened during the quarter, especially in the mortgage warehouse lines kind of took the denominator down |
| Production declined slightly to about $1.2 billion and the gain on sale margin came in right at 2.15 |
| I know there hasn't been a lot of M&A activity, and obviously, you guys are not in this situation that a lot of banks are in terms of having the bond portfolios quite underwater and that slowing down activity |
| And so there is definitely some upward movement on the asset side that should help, I just been very hesitant because of what we're seeing on the deposit side and some erratic competition |
| If we see pull back in revenues, then you're going to see a pullback in expenses |
| And I think that we're being far more selective in our credits, obviously, we've said from the very beginning that we're not going to allow our loan growth to outpace our deposit growth and that discipline will continue, and obviously, when you take that approach, it will slow down growth |
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