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| Statement |
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| We are especially encouraged by the continued strength of our four high growth markets across Texas and Colorado, which are each buoyed by positive - demographic trends and capital inflows that insulate them, from the broader - macroeconomic activity |
| So we, you know, I'll just make a broad comment that we're trying to make sure that the balance sheet is well positioned to weather whatever the macro throws at it |
| During the quarter, we were pleased to see healthy organic core loan growth of 4.5% annualized, as demand began to pick up in our markets, while we did see some additional uptick in deposit costs due to the intra-quarter Fed increase |
| We would also expect that the $100 plus million of production we've seen of net growth that we've seen so far this quarter, will set us up nicely to see the loan yields continue to expand |
| And we're obviously optimistic that - that we will be able to notch some wins in our deposit sales pipeline as well |
| So, we're pretty optimistic about our ability, to see that stability and that inflection in 2024 |
| And I'll just note Brandon, really during the third quarter that push for the loan to deposit ratio to come down, that was a real deliberate strategy that we employed to trade a little bit of earnings for some balance sheet strength, which we think positions us very nicely to capitalize on the growth opportunities that we've seen |
| As Dan will discuss, credit metrics remain excellent and low nonperforming assets and net charge-offs totaling just one basis point annualized for the quarter |
| And that would result in the granularity we've seen with average sizes of $2 million or less in the CRE book and strong markets, where we've had strong NOI growth |
| I would say, we gave some good color at the last quarterly call, but we continue to feel very good about the book that we have |
| We continue to, as Paul emphasized today, position the company for whatever the future brings and we're in a good position |
| While NIM came in at the lower end of our expectations, we are encouraged that our modeling and trends indicate a likely bottom for NIM around these levels |
| We feel good about the growth and the pathway forward |
| The exact trajectory of NIM will be influenced partially by external factors, but we are encouraged by the stabilization of noninterest-bearing deposits following quarter end and the healthy sales pipelines, we are seeing for both higher yielding loans and lower cost deposits |
| And you know, that gives us some optimism and some hope that as we start to see the macro stabilize and evolve and you start to see the long end of the curve come up that if the Fed is active and cutting next year, that's going to be really good for us |
| Healthy loan growth has returned, the NIM seems to be stabilizing at its bottom, our fee income remains consistent, credit trends remained strong and we continue to exercise discipline on our expenses |
| The substantial contingent funding capacity available to us and the low level of borrowing utilization, strengthens our balance sheet against any subsequent shocks and positions us well, to capitalize on sustained growth in earning asset yields |
| As we entered the fourth quarter, we remain encouraged by the trends we're seeing in our business |
| This should provide a consistent tailwind to loan yields and help support NII even as near-term rates remain at their peak |
| I'm especially grateful to every one of our employees, who show up each day, to carry the torch of the culture that we've built over these three decades and who never strayed, from the mission of providing exceptional service, to our customers and communities throughout the economic cycle |
| Credit quality metrics continue to remain strong during the third quarter |
| So, all of those pricing resets, the big up pricing activity happened at the end of the quarter that sets us up nicely for Q4 to see some more expansion in the loan yields |
| We are pleased that our overall loan book yields continue to march upward |
| So, we've seen very good stability there this quarter |
| To that end, contractual maturities of our fixed rate loans are poised to grow in 2024 - even as payoffs remain at low levels |
| Notably, our TCE ratio also remained strong at 7.35% as of September 30 |
| But we do expect, especially given what we have repricing and what's in the pipeline to see some nice lift in the margin, especially in this - the back half of 2024 |
| Most of all though, our success in growing the bank in this challenging environment has made possible by the incredible team, we have across our footprint |
| While we remain watchful for any signs of stress in our markets, credit trends indicate that we continue to be supported, by the strong foundation of conservative underwriting, that we have maintained over three decades |
| That's fantastic |
| Statement |
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| Net interest margin was 2.60% for the third quarter, down 11 basis points from the linked quarter |
| Noninterest income was $13.6 million for the quarter, down slightly from adjusted noninterest income of $14.1 million for the linked quarter |
| Where we had a challenge, I think our - the entire markets at a challenge has been predicting deposit costs rate, you know, predicting deposit betas and what's going on with competition And what the Fed's going to do and the long end of the curve coming up and all those things that we don't control |
| Total adjusted uninsured deposits declined in the third quarter to 29.9% from 31.1% in the linked quarter |
| Noninterest expenses totaled $81.3 million for the quarter, down from $85.7 million in the linked quarter |
| So, we are just being - a little bit cautious |
| And then how're we thinking about - how are you thinking about deposit growth from here? I know the loan to deposit ratio declined in the quarter, it's at 93% |
| I know, I think I saw the release, there was some maybe incentive reversals and some other noise in the quarter |
| We will have some growth, but we will have some offsets on the other side |
| During the quarter, we saw incremental upward pressure on deposit costs due to the Fed hike as well as incremental noninterest-bearing attrition |
| In addition, our focus on expense discipline resulted in total non-interest expense declining to $81.3 million for the quarter |
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