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| Statement |
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| So I'm very optimistic about what 2024 holds for our bank |
| So we were able to see good ability to hold the line again, on an average basis, even kind of grow the core deposit book in the quarter |
| And I'd say the results overall, when we look at any leading indicators or any of just our overall credit metrics continue to feel good to us and we have confidence in the quality of the portfolio |
| We feel very good about the modifications we've made to that loan |
| So again I feel like we were incredibly conservative which is true to our form, but very conservative in how we got in there and addressed that portfolio and feel good about it |
| We've had good results in working out some credits in there |
| But first I'd just say that we continue to feel very good about our overall credit picture |
| There are situations in this environment where I think incumbent banks are, for whatever reasons, having to do some either something irrational or have their eye off the ball, and we have had some really good opportunities with customers where we've been maybe a secondary provider to come in and really grow to a full relationship and bring some things into the pipeline that we're pretty excited about |
| So I want to emphasize that we're continuing to focus on growing loans on a good risk-adjusted returns basis, and we're seeing success with that |
| I'm really pleased with the results of our Better Bank Initiative |
| You can see that in our repricing opportunities, in our securities portfolio and our fixed rate loan portfolio, we have some upside potential that we're excited about |
| We have done a great job targeting deposits that have flowed out and bringing those back in as well as just through our promo campaigns, whether it's on the money market or the CD side and continue to have good success there, but you're just always balancing between the front book and the back book as you evaluate those opportunities |
| And again, we've done that all through the year this year and continue to feel good about the results of that |
| But on a go-forward basis, we continue to see a lot of really good opportunities, both in terms of repricing and in terms of pipeline opportunity on the asset side and we gave you some statistics there on 16 |
| I'm optimistic that there is more benefit to come |
| And the rate 843 basis points is terrific |
| But our strategy will continue to be -- to the extent we have what we believe are good risk-adjusted returns in the loan portfolio and cash flows coming off of our balance sheet sufficient to invest in that |
| We talk about the fact that we had a handful of credits that we really worked throughout the quarter, very focused efforts either because of lower rates and/or candidly, risk ratings that we didn't love where we saw opportunities to get those credits out of the bank, and we're able to do that successfully right at the end of the quarter |
| But as far as the loan growth outlook from here, you mentioned lots of puts and takes from the paydowns on the way, but improving loan pipeline |
| I think it's fair to think that fourth quarter noninterest expense run rate is kind of in that mid-130s range, which significantly exceeds what we had hoped to achieve through the Better Bank Initiative goals that we had outlined earlier in the year |
| And again, we see a lot more opportunity in terms of asset repricing over the quarters to come than we do risk in terms of the liability side |
| But I'd say, thus far, we've been more than happy to have set path there |
| The rates that we're seeing in there are very attractive |
| And Matt, I'd say, given the macro environment we're all going through right now, we feel very comfortable with low to mid-single digit in this environment |
| But to the extent that there are shortfalls there or needs for any of that wholesale borrowing, we're happy to do it, particularly if it's cheaper and less expensive |
| So I think there'll be quite a few good opportunities to have some significant repricing in that portfolio or that portion of our portfolio |
| Maybe on the other side of the coin, it's great to see the increase in the loans ready to close |
| We have a lot of capacity left to help our customers grow in the market as they see that opportunity |
| And our pipeline is a great indication of that |
| Regulatory capital is continuing to grow |
| Statement |
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| That's a sector that has had some difficulties going back to COVID ramifications, inflationary pressures, longer periods of time to reach stabilization, et cetera |
| So there's kind of some sputtering in how we think about that migration and what we're observing in the portfolio, but you still see some pressure on NIBs and lower-cost IB transaction accounts |
| Obviously, a few quarters in a row of runoff in the portfolio just as – obviously there's some pressure on the funding side, et cetera |
| Your credit was still pretty clean, but there was a little bit of noise |
| And we continue to rotate through our portfolios, stressing for interest rates, stressing for any other type of activity that we see on a macro level or on a micro level with our own customers |
| But I already mentioned in my remarks earlier on the funding side that I think Q4 and Q1, again, subject to sort of moves in the market, it would be unexpected |
| I'd like to think that we're seeing and we saw it at different points in the third quarter that the trends would slow down and speed up |
| There will continue to be some pressure there, although I think that we see that pressure moderating for sure |
| But again, I think the pressure on the cost side will slow down through the fourth quarter and the first quarter |
| We were down on the borrowing side |
| But there are still so many external factors affecting the banking industry today that we really can't guess what that needs to be |
| We think that migration is slowing within the portfolio |
| Deposits were down for the quarter on a period end basis |
| I know the cycle is getting a little bit more exiting here than we initially thought |
| I think basically, the way to look at it, Graham, is the pressure we'll see on that underlying NIM, particularly around, again, CD repricing and maturities in the fourth quarter and first quarter as well as some level of likely migration |
| But I think those factors will probably drive that underlying NIM down a bit and largely be offset with the benefit of the swap |
| I apologize if you mentioned this |
| In addition of the migration from noninterest-bearing to interest-bearing, we're also seeing lower balances per account |
| So there was little impact to margin during the quarter |
| So I think we'll continue to experience that, although to a slower degree again going forward |
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