F.N.B. Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
January 19, 2024

There are 13 speakers on the call.

Operator

Good morning, everyone, and welcome to the FMB Corporation 4th Quarter 2023 Earnings Conference Call. All participants will be in a listen only mode.

Speaker 1

Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Lisa Haidu, Manager of Investor Relations. Ma'am, please go ahead.

Speaker 2

Thank you. Good morning, and welcome to our earnings call. This conference call of FNB Corporation and the report it files with the Securities and Exchange Commission opt to contain forward looking statements non GAAP financial measures. Non GAAP financial measures are often viewed in addition to and not as an alternative for our reported results prepared in accordance with GAAP. Reconciliations of GAAP to non GAAP reporting measures to the most directly comparable GAAP financial measures are included in our presentation materials and in our earnings release.

Speaker 2

Please refer to these non GAAP and forward looking statement disclosures contained in our related materials, reports and registration statements filed with the Securities and Exchange Commission and available on our corporate website. A replay of this call will be available until Friday, January 26, and the webcast link be posted to the About Us Investor Relations section of our corporate website. I will now turn the call over to Vince Dhillie, Chairman, President and CEO.

Speaker 1

Thank you and welcome to our Q4 earnings call. Joining me today are Vince Calabrese, our Chief Financial Officer and Gary Gerri, our Chief Credit Officer. F and B's 4th quarter net income available to common shareholders was $49,000,000 on a reported basis $139,000,000 on an operating basis. Full year 2023's operating performance was highlighted by record revenue of $1,600,000,000 record net income available to common shareholders of $569,000,000 and record earnings per diluted common share of $1.50 Tangible book value per share has increased 15% year over year to a record high of $9.47 per share, steadily approaching a $10 milestone. Since 2,009, F and B's internal capital generation representing tangible book value and dividends has been strong with 10% compounded annual growth.

Speaker 1

With this strong profitability, Full year positive operating records totaled 1.5% and is expected to remain in the upper quartile on a peer relative basis. F and B's exceptional financial performance in 2023 was a direct result of the consistent execution of our strategic initiatives. The banking disruption in the Q1 of the year placed a spotlight on the importance of balance sheet resilience, including our deposit base, strong capital and liquidity position, and prudent underwriting standards. It also reinforced the value of our quality customer relationships and comprehensive delivery teams. These attributes have always been integral to FMB's long term strategy, which has been proven through multiple cycles over the last decade and are ingrained in the foundation upon which FMB operates.

Speaker 1

Our commitment to maintain a stable deposit base is evident in our total deposits which ended the year at 34,700,000,000 unchanged from the prior year even with the elevated competition for customer deposits. The non interest bearing deposit total deposit mix ended the year at 29.4%. While we have seen customer migration away from non interest bearing deposits, We continue to substantially outperform our peers and the industry in our total deposit cost and overall cost of funds. Our spot deposit costs ended the year below 2% and is over 50 basis points better than our peers in the 3rd quarter. Our better than peer funding cost and strong liquidity provide balance sheet optionality.

Speaker 1

Our tangible common equity to tangible asset 7.8% is the highest level in the company history and exceeds the peer median. FMB remains committed to optimally deploy capital in a manner that is fully aligned with our shareholders' interest and best positions FMB for future success. As part of that commitment, FNB recently completed the sale of approximately $650,000,000 of available for sale securities, announced the redemption of $110,000,000 of preferred stock and transferred $355,000,000 of indirect auto loans to help for sale with the sale expected to close in the Q1. Together these actions resulted in a capital neutral transaction that improves forward returns and earnings with expected EPS accretion in the low single digits. Our continued ability to meet our clients' needs is critical to our performance.

Speaker 1

F and B has continue to make strategic investments in our delivery chain to deepen customer relationships, gain market share and further outpace our competitors. In June 2023, we introduced the e store common application for the majority of our consumer loan products And recently introduced deposit products in December allowing customers to apply for up to 18 consumer deposit and loan products simultaneously. Our goal for 2024 is to bring small businesses into the quarter with business loans, deposits and payments included in the common application that we restore. These additional features further enhance the customer experience and deepen product penetration as customers can apply for multiple loan and deposit product simultaneously in a very streamlined manner eliminating keystrokes, providing a portal to upload supporting documents and automating account funding. We also made significant enhancements in our physical delivery channel in 2023.

Speaker 1

In addition to expanding our footprint with 4 de novo locations, we entered into a partnership with the Washington Metropolitan Area Transit Board that establishes FMB as the sole ATM provider for the 3rd largest heavy rail system in the United States. With ATM banking services with every metro station, the partnership will add more than 120 machines to FNB's network in 2024. Our physical delivery channel is approaching 2,000 combined branches, ATMs and interactive television. Paired with our digital Easter, F and B has significantly enhanced access for our current and future customers while augmenting brand awareness With the success of our e store and our exceptional bankers, total loans and leases ended the year at a record $32,800,000,000 an increase of $2,400,000,000 since year end 20 20 2. We are beginning the year from a strong position and we'll continue to closely monitor the macroeconomic environment and market specific trends to manage risk proactively as part of our core credit philosophy.

Speaker 1

We will remain steadfast in our approach to consistent underwriting and risk management to maintain a balanced, well positioned portfolio throughout economic sites. I will now turn the call over to Gary to provide additional information on the 4th quarter's credit performance. Gary?

Speaker 3

Thank you, Vince, and good morning, everyone. We ended the quarter year end period with our asset quality metrics remaining at solid levels. Total delinquency finished the year at 70 basis points, seasonally up 7 basis points from the end of September and down one basis point from the prior year end period. NPLs in OREO decreased 2 basis points from the prior quarter and 5 bps from the year ago period to end at a very good level at 34 bps. Criticized loans were down 13 basis points compared to both prior quarter year end with net charge offs for the quarter and full year at 10 and 22 basis points respectively.

Speaker 3

I'll complete my remarks with an update on our credit risk management strategies and CRE portfolio. Total provision expense for the quarter stood at $13,200,000 providing for loan growth and charge offs. Additionally, provision expense had a positive benefit from a reduction in criticized loans and NPLs. Our ending funded reserve increased $4,900,000 in the quarter and stands at $406,000,000 or a solid 1.25 percent of loans, reflecting our strong position relative to our peers. When including acquired unamortized loan discounts, our reserve stands at 1.39% and our NPL coverage position remains strong at 4 18%, inclusive of the unamortized loan discounts.

Speaker 3

We remain committed to consistent underwriting and credit risk management to maintain a balanced, well positioned portfolio throughout economic cycles. Each quarter we perform specific in-depth reviews of our portfolios in addition to ongoing full portfolio stress tests. Our stress testing results for this quarter have shown lower forecasted net charge offs and stable provision compared to the prior quarter's results, again confirming that our diversified loan portfolio enables us to withstand various economic downturn scenarios. Regarding the non owner occupied CRE portfolio, in 2023, we were successful in addressing maturities and the impact of the rising rate environment on the portfolio. In 2024, we will continue with the same strategy monitoring the rate environment and proactively addressing upcoming maturities.

Speaker 3

At year end, delinquency and NPLs for the non owner CRE portfolio continued to remain very low at 32 18 basis points respectively, which confirms our consistent underwriting and strong sponsorship. In closing, asset quality metrics ended the year at very good levels and we are well positioned going into 2024. We continue to generate diversified loan growth in attractive markets, in a competitive environment for high quality borrowers, while maintaining our consistent underwriting standards. We closely monitored macroeconomic trends and the individual markets in our footprint and will continue to manage risk aggressively while maintaining a consistent credit profile across all of our portfolios. I will now turn the call over to Vince Calabrese, our Chief Financial Officer for his remarks.

Speaker 4

Thanks, Gary, and good morning. Today, I will focus on the 4th quarter's financial results, provide additional detail on the recent actions taken to further optimize our balance sheet and offer guidance for 2024. 4th quarter operating net income available to common shareholders totaled $139,000,000 or $0.38 per share, $114,000,000 of significant items impacting earnings. On a full year basis, operating earnings totaled a record $1.57 per share, tangible book value totaled $9.47 a 15% increase from December 2022. Part of our ongoing proactive balance sheet management strategy, we took several actions to enhance future profitability and capital positioning.

Speaker 4

Late in the Q4, we sold approximately $650,000,000 of available for sale investment securities, transferred $355,000,000 of indirect auto loans to held sale and announced redemption of $110,000,000 of the Series E preferred stock that was issued 10 years ago. The cumulative impact of these balance sheet actions generates incremental earnings and has a tangible book value earn back period of less than 1 year versus an earn back of 5 years for stock buyback while retaining capital flexibility in 2024. The sale of investment securities resulted in a realized loss of $67,400,000 in the 4th quarter as we sold securities yielding $108,000,000 on average and reinvested the proceeds into securities with yields approximately 3.50 basis points higher with similar duration and convexity profiles. We recorded a $16,700,000 negative fair value mark and other non interest expense On the indirect auto loans classified as held for sale at December 31, reflecting changes in interest rates from time of origination. The sale of these loans is expected to close during the Q1 with the proceeds being used to repay borrowings that have a similar yield to the sold loans.

Speaker 4

Our year end loan to deposit ratio benefited by approximately 100 basis points. Excluding the 355,000,000 held for sale indirect auto loans, underlying period end loan growth was 8% since year end 2022. 4th quarter loan production reflected high quality loans across our diverse footprint with quarterly commercial loan growth of 351,000,000 Consumer loan growth of $178,000,000 Investment portfolio remained essentially flat linked quarter at $7,200,000,000 Inclusive of the securities portfolio restructuring, there remains a fairly even split between AFS and HCM with 45 percent in available for sale at the end of the year. The duration of our securities portfolio at December 31 is 4.2 years similar to last quarter. Total deposits ended the year at $34,700,000,000 a slight increase of $96,000,000 linked quarter.

Speaker 4

As of December 31, non interest bearing deposits comprised 29.4% of total deposits compared to 30.9% September 30. Given our granular stable deposit base, we believe we will continue to outperform the industry With a favorable mix of non interest bearing deposits to total deposits and lower deposit costs, which meaningfully outperformed the peers as our team remains actively focused on managing deposit mix. With our spot deposit costs ending the year at 1.93, our cumulative deposit beta totaled 34.3% in line with our expectations discussed last quarter. The 4th quarter's net interest margin was 3.21, a decline of only 5 basis points, which is better than our expectations discussed last quarter. Yield on earning assets increased 14 basis points to 5.25 due to higher yields on both loans and investment securities.

Speaker 4

Total cost of funds increased 21 basis points to 2.14 as the cost of interest bearing deposits increased 29 basis points to 2.65. Net interest income totaled $324,000,000 a slight decrease of $2,600,000 from the prior quarter. Turning to non interest income and expense, operating non interest income totaled $80,400,000 adjusting for the 67 point $4,000,000 realized loss on the investment securities restructuring. Mortgage banking operations income increased $3,100,000 linked quarter due to improved gain on sale margins aided by the decline in mortgage rates in the 4th quarter. Other non interest income declined $2,400,000 as Small Business Investment Company Funds income decreased reflecting normal situations based on the performance the underlying portfolio companies.

Speaker 4

Additionally, we broke out our service charges fee income line on the income statement into service charges and a new line item for interchange and card transaction fees, which was previously captured in the service chart live. This will create better transparency into our various revenue streams and non interest income. Operating non interest expense $218,900,000 was relatively stable compared to the prior quarter when adjusting for the fair value mark on the held sale indirect auto loans of $16,700,000

Speaker 3

and the

Speaker 4

$29,900,000 FTIC special assessment related to replenishment of the deposit insurance fund the bank failures. The linked quarter increase in outside services of $2,400,000 reflects higher third party costs. Bankshares and franchise taxes declined $2,300,000 reflecting charitable contributions that qualify for Pennsylvania Bankshares tax credits And marketing expenses decreased $1,200,000 due to the timing of digital marketing campaigns in the 3rd quarter. The 4th quarter efficiency ratio of 52.5 percent continues to be in the top quartile of our peers. Efficiency ratio of 51.2% on a full year basis demonstrates our commitment to effectively managing costs while growing our diverse revenue streams.

Speaker 4

We ended the year with our capital ratios, some of the strongest levels in recent history. Our CET1 ratio of 10.1 percent which includes the impact of the previously discussed balance sheet management items and the FDIC special assessment remains above our stated operating target. Tangible common equity totaled 7.8% When excluding the 54 basis point impact of AOCI, we equal 8.3%. Tangible book value per common share was $9.47 at December 31, an increase of $0.45 per share from September 30. AOCI reduced the tangible book value per common share by $0.65 as of year end compared to $1.06 last quarter, primarily due to the impact interest rates on the fair value of available for sale securities.

Speaker 4

Because the investment securities that were sold in December were in available for sale, The realized loss did not incrementally impact TCE or tangible book value since the market value is already reflected in AOCI. Let's now look at the 2024 guidance for both the Q1 and the full year, starting with the balance sheet. On a full year spot basis, we expect loans to grow mid single digits as we continue to increase our market share across our diverse geographic footprint. Total projected deposit balances are expected to grow low single digits on a year over year spot basis. Full year net interest income is expected to be between $1,295,000,000 $1,345,000,000 With the Q1 of 2024 between $318,000,000 $328,000,000 our guidance assumes 3 25 basis point rate cuts Aligning with the Fed's top plot, which we are projecting to occur in May, July November 2024.

Speaker 4

Non interest income is expected to continue to benefit from our diversified fee based income strategy with the full year results between $325,000,000 $345,000,000 and the 1st quarter between $80,000,000 $85,000,000 Full year guidance for non interest expense is expected to be between $895,000,000 to $915,000,000 includes the impact of approximately $6,000,000 of rent expense during the build out phase of our new headquarters, while we still occupy our current office space. Adjusting for this impact, the midpoint of our expense guidance results in a 3.7% increase from 2023 operating expense levels. The 1st quarter non interest expense is expected to be between $225,000,000 $230,000,000 as the compensation expense is higher in the Q1 largely due to normal seasonal long term stock compensation and higher payroll taxes at the start of the new year. Full year provision guidance is $80,000,000 to 100,000,000 and is dependent on net loan growth and charge off activity. Lastly, the full year effective tax rate should be between 21% 22%, which does not assume any investment tax credit activity that may occur.

Speaker 4

With that, I will turn the call back to Vince.

Speaker 1

During 2023, FMB completed a number of initiatives that align with our strategic priorities, including introducing the eStore common application for consumer loans and deposit products, expanding our physical delivery channel and investing in systems and processes that enable us to streamline operation. We continue to expand our data analytics capabilities and the use of AI to improve performance. These strategic initiatives have directly contributed to our peer relative outperformance in 2023 amidst the banking industry disruption With the company generating record operating EPS of $1.57 and strong organic loan growth of 2,400,000,000 Deposit balances remain flat with non interest bearing deposits comprising 29.4% of total deposits and a top quartile cost of parts. We've completed over $75,000,000 in cost savings over the last 5 years, Excluding acquisitions synergies, leading to positive operating leverage and efficiency ratio in the top quartile relative to peers at 51.2%. Operating return on average tangible common equity totaled 18 Intangible book value grew 15% to a record $9.37 Our asset quality continues to be a strength as we end the year at or near historically low levels.

Speaker 1

This year's exceptional performance was made possible by our employees. Their commitment to FNB's mission and values drive success for all of our stakeholders. In 2023, our team's efforts were Evident as FMB received more than 30 prestigious awards, multiple independent organizations recognized FMB's financial performance, outstanding culture and innovative technology with eStore earnings international. We believe that these honors and our performance are a direct result of our engaging and rewarding workplace environment. I am proud of what we've built together.

Speaker 1

Thank you.

Operator

And our first question today comes from Daniel from Raymond James. Please go ahead with your question.

Speaker 5

Good morning, guys. Maybe we start on the impact of the balance sheet restructuring on the margin. I appreciate the guidance for 2024, but just as we think about the impact on in the Q1, curious if you can walk through how you're thinking about the impact of the restructuring, looking at it as a 5 basis point or 6 basis point impact Relative to kind of just continued deposit pressure and then how that the path of the margin is it moves throughout the year in your assumptions?

Speaker 4

I would say a couple of things. First of all, if we look at the Q4, now I'll get to the go forward. Net interest income only declined $2,600,000 in the quarter which was the same as the prior quarter. The NIM compression for the quarter was only 5 basis points, last quarter was 11. In fact, November December were at 320, so the level kind of stabilized there at least for those 2 months.

Speaker 4

The restructuring is fully baked into our guidance that we provided. As far as the path with the margin here, I would still say what we said last quarter that Probably bottom somewhere in the first half of the year and then have some slight improvement from there as far as getting to the second half of the year. But there's a lot to happen With the Fed cuts, we have 3 Fed cuts in ours, whether it's 3, 4, 5. The 3 felt most reasonable to us. That's what's baked into our guidance With the benefit of the restructuring and as we have over time we'll continue to actively go after the band deposits I think our percentage of total deposits has performed very well relative to the peers.

Speaker 4

The changes in that bucket have also kind of stacked up very well. So the NII guide kind of has everything baked into it, Danny.

Speaker 5

I understand and I appreciate that. I guess another way of asking maybe, do you think The deposit pressure in the Q1 offsets the I mean, it sounds like you're saying we still maybe get more compression in the Q1 on an overall basis. So you think that offsets more than offsets the balance sheet restructuring and that just continues in the first half in the Q1?

Speaker 4

Well, we're not going to guide to, we're not going to specifically comment on margins for the quarter, right? The net interest income As all of that baked in, the mix shift that has happened during the quarter, we've continued to see customers going after higher rate products, just natural People are sitting here feeling like, okay, the Fed is at the top average rate since July, when are they going to start to cut. So there's definitely been some of that mix shift still occurring. In the Q1, our demand deposit, that's usually our weakest quarter seasonally because the municipal deposits have kind of bottomed and then filled up. So all of that does put some pressure on the margin and then the restructuring helps to offset some of those impacts in the Q1.

Speaker 4

Probably one way that I could comment on that.

Speaker 5

Got it. Okay. I guess just lastly, just digging on the balance sheet sensitivity side. Just curious how we should be thinking about you mentioned bottoming in the middle of the year. I think In the past, we've talked about maybe being liability sensitive in the medium term, but maybe asset sensitive in the near term With rate cuts, that's still how we should be thinking about it, perhaps some negative impact early on and then maybe After a few quarters that's when you start to benefit more from the recuts?

Speaker 4

Yes. So that's definitely the right way to think about it. The sensitivity whether we get additional cuts beyond the 3, as you know, there's a lot of moving parts to this question and there's actions we may take on the economic environment. But as you described, the timeframe is key, right? In the short run, you'd have a negative impact Particularly from the investor and additional cut and then I think deposit lags will catch up over time.

Speaker 4

I mean historically, if you look at our beta today, right, we're around 34%. In the last up rate cycle, we kind of maxed out at 35%. It seems reasonable to assume that, that would take kind of more in the medium term, longer term to catch back up, probably the medium term for the deposit rate lags to catch up and have that benefit. And as you know, we've taken a lot of actions. I mean, the CD book has been growing into shorter term 7 13 month type area.

Speaker 4

Our total average maturity of the CD portfolio right now is 10 months. So there's opportunity there to reprice that as we go forward I think up with the timing of when the Fed would move. But yes, I think that's we're still slightly asset sensitive and Really philosophically managing to neutral and then we think that if you look at our margin path for the year, it's kind of more neutral with the expected 3 cuts that we have baked in.

Speaker 5

Okay, great. Thank you for all the color. Appreciate it.

Operator

Our next question comes from Frank Schiraldi from Piper Sandler. Please go ahead with your question.

Speaker 6

Good morning. Just wondering if you could talk a little bit about the dynamics of loan growth versus deposit growth here and obviously your guide has you getting closer to 100% loan to deposit over time. Just trying to Think through what might be the main governor on loan growth here and how you're bringing deposit dollars in the door in what continues to be a pretty competitive environment?

Speaker 1

Yes. I think let me start out and then I can turn it over to Vince Calabrese. First of all, I think some of The things that we talked about in the prepared comments relative to acquiring new clients is a way for us to drive deposit balances. I mean, adding the ability to simultaneously open a deposit account with a loan application without additional keystrokes, That's huge for us. So I think that will help once the field starts utilizing these tools and customers start engaging online and realize that they can do that, it will increase our probability of capturing more of the client relationship particularly the deposit side.

Speaker 1

So when the loan request comes in we'll be able to act a little more quickly on opening the deposit account. So that's one thing that we planned for and we think will help us as we move forward. If you look at engagement With the e store, we looked at we rolled that out about mid year. So if you look at the 6 months in 'twenty two versus the 6 months in 'twenty three in the same period and you compare the number of applications that we were able to obtain online, They doubled. So we doubled the number of consumer loan applications.

Speaker 1

That's without the deposit account capability by the way. And 30% of those applications were with non FNB customers. So that's one piece of it, the enhancement to the digital strategy. The second opportunity for us is really in small business and middle market banking on the TM side. We've invested pretty heavily in our treasury management capabilities.

Speaker 1

We have some capabilities coming online. We mentioned that we're going to bundle products in the small business space In 'twenty four, probably towards the latter half of the year, we'll be rolling that out. That will also help us grow deposit balances. And if you look at what we've done historically, we've historically grown deposit balances around the 8% to 10% range organically. So, I think we've kept pace With the organic loan growth

Speaker 4

that

Speaker 1

we've achieved which is similar over a long period of time. And I think some of the things that we've done Strategically and entering into new markets that have more opportunities because of population growth and business formation, We're going to be able to continue to achieve our objective which is to fund our loan growth with the deposit balances that we see through from new customers. I don't know, Vince, do you want to add anything numerically?

Speaker 4

Yes. No, all I would add, Frank, is that we don't get all the way to 100 within our guidance. We're in that 95%, 96%, 97% kind of area as you kind of forecasted out. But as we've done in the past, Historically when we got to 97 going back a bunch of years, we took action. We took action this quarter selling the indirect Auto loans creates more shelf space for us.

Speaker 4

I mean that gives us a percent in the loan positive ratio. So we will manage that level. We won't go all the way to 100. We're in the mid-90s which was baked into the guidance as I mentioned. We'll start to manage.

Speaker 4

When we get to 95, we'll look at what's the environment, how fast are loans growing and we'll take action as we always have to just kind of manage.

Speaker 1

For us it's not a function. It's not a question as to whether or not We can fund our balance sheet with deposit growth. We can do that. When we have the capability of doing it, it would just be a margin per rotor, So we're trying to balance it all out, Frank. Got it.

Speaker 1

We're very confident in the growth. We want to compete with everybody else out there and price up our CDs and our money market rates. We could bring a lot of money in.

Speaker 4

We brought in $1,300,000,000 in new fund.

Speaker 1

I mean we It's the back half of the year. It's a function of trying to manage it all so that we maintain relative Our goal is to outperform. So we're not trying to give everything away or balloon our balance sheet. We understand what our funding constraints could potentially be and the trade off is margin. So we have to be getting it on the other side with the loan originations to justify That's how we look at it.

Speaker 6

Sure. Understood. That's great color. Thanks. And then I guess Just a follow-up there.

Speaker 6

Vince, you mentioned the making some room with the small sale of the loans. Obviously, you're always thinking about balance sheet optimization. But that being said, just wonder if this is If you see more opportunities here in the near term to do just that, maybe jettison some smaller pieces that for whatever reason, the total returns not there. Is that a way in the near term to continue to hold the loan to deposit ratio where it is or do you see this as more of like a one and done in the near term?

Speaker 4

Yes, we spent a lot of time during the Q4 sizing what we wanted to do as far as the amount of securities and amount of the loans that we would sell. So we don't have any plans to do any additional sales as we're sitting here today. I think we're fine like Vince said, We have the ability to fund and grow this product, we've done it forever. So at this point, I wouldn't say one and done forever, right, because we're always the balance sheet and if there's opportunities we'll look at it. But there's no plans right now.

Speaker 4

That like I said we spent a lot of time sizing it and came up with what we executed on.

Speaker 1

If the rate environment enables us to unload low yielding assets And we get a gain and we can roll that into something else. Sure, we've done that historically. We've sold over $1,000,000,000 over the years. So we'll look selectively Frank and we constantly look at the balance sheet. Our objective is to produce the highest returns possible.

Speaker 1

And we'll look at opportunities to get out particularly with indirect auto, the limited relationship, right. I mean we'll look at that and we'll trade out of it or we'll pair it back, right. We've used pricing mechanisms to move the portfolio around. We'll see. It's all a function of what the interest rate environment is, What demand looks like in higher yielding categories, what the risk profile of the balance sheet looks like, we take all of that into consideration and make decisions based on that.

Speaker 1

But our plan is to manage in the range from a loan to deposit perspective that we have historically. We're not looking to move outside of that.

Speaker 4

I would just say too, Frank, we're not we don't feel constrained as far as loan growth that we would want to go after. I mean the mid to high single digits We've done we can do that. We've done things like Vince is describing. And then like in the mortgage business, we've adjusted our pricing a little bit there to More saleable product. So we're kind of reducing the amount of growth that's going on to the balance sheet.

Speaker 4

It's just kind of part of how we manage the balance sheet. So there's a lot of Lots of different levers there.

Speaker 6

Great. Okay. Thanks for the color. Yes.

Speaker 4

All right. Thank you.

Operator

Our next question comes from Tamir Bhrigel from Wells Fargo. Please go ahead with your question. Hi, good morning.

Speaker 7

Maybe starting, Vince Lee, you had made a comment positive operating leverage in 'twenty three look to be in the top quartile and operating leverage going forward. Does that put positive operating leverage on the table for 'twenty four Or is the revenue backdrop challenging enough where that's more likely not going to happen next year?

Speaker 4

Yes, I

Speaker 1

think as we move through this interest rate cycle, it becomes more challenging obviously, right, because you're seeing a decline in revenue And your expense base is pretty much fixed. So we've taken expense out, but it's hard to go deeper. I think the second half of the year, I certainly would expect us to go produce positive operating leverage. So as we move through that inflection point that Vince spoke about earlier, the margin compression with the rate cuts, we should be able to move through that and into the second half of the year experience positive operating leverage. If you look at FMB on a full year basis in 2023, we outperformed others, right, because we produced full year operating leverage.

Speaker 1

There was negative operating leverage all over the place at least based on what I saw. So I think I would expect us to do everything we can to be in a similar position in 2024.

Speaker 7

That helps. Okay, that's helpful. Yes, that's helpful. Thank you. And then one for Gary, just looking at the office maturities in 'twenty four, it looks like 20% of that book is maturing.

Speaker 7

I'm just wondering how much of that maturation is For loans kind of vintage 2019 earlier. And then as you look at your CRE portfolio, Again, looking at the vintages 2019 and earlier, how different are those loans from a credit quality standpoint, just given how different the world is today versus pre pandemic?

Speaker 3

Yes. Generally speaking, We're going to underwrite those things from the origination date in the low to high 60s range. So when you look at those maturities In addition to that LTV level which has been very helpful through this cycle so far, they are also underwritten very short. So with maturities inside of 5 years or slightly less in some cases. So a number of those transactions have been renewed over the last year or 2.

Speaker 3

Many of those borrowers right sized those transactions. It has been our intent to keep Those maturities very short and we'll continue to do that during these times. That all said, we feel as focused as we are on that office space As is everyone, we feel quite good about the portfolio at this point. We've only had a couple of credits Over the last number of years when since this space has taken A tough go of it from all of the pandemic issues that we've seen. And we've only had a couple of credits that we've had to deal with from a loss So we feel good about the position of it.

Speaker 3

There is a 20% roll rate in the coming year And we expect to move through that with our sponsors which have shown the ability to right size Those additional interest reserves to pay down debt and bring it back to 120 type of debt service coverage. So We'll continue to do the same thing in 'twenty four that we did in 'twenty three.

Speaker 1

I'll add on to what Gary said. I think from a prudent underwriting perspective, Most of the transactions that we would have underwritten in 2019 would have had long term leases that go out longer than the maturity date. Gary mentioned having a shorter maturity date. What that means is that while cap rates may change and the valuation may change with a lower LTV and a longer lease term that The debt service coverage remains intact. So it's a lot easier to deal with the devaluation because of the rise in cap rate if you have substantial liquidity and a long term tenant locked up.

Speaker 1

So I think that in almost every case that's what we would look at when we would underwrite these transactions which gives us a great degree of confidence. I also can tell you that most of the portfolio, The vast majority of the portfolio sits outside of the urban office scenario. So I think that we have Quite a bit of protection in that suburban office and higher growth areas is not as subject to vacancy like you see in the large cities. The other thing I'd add to the size of the granularities,

Speaker 3

40% of the portfolio is less than $5,000,000 in terms of loan size. You move that up to $5,000,000 to $10,000,000 it's another 17%. So you are pushing 60% of the portfolio is less than almost 60% is less than $10,000,000 And you move that up one more level to $15,000,000 and you're at 70% of the book of business. And in total, the top 25 credits average right at just a touch above $30,000,000 I think it's right at $31,000,000 So the portfolio is very granular. I think we've been very prudent and taking granular hold positions across that space.

Speaker 3

And it's really shown in the performance through what's been a difficult time.

Speaker 1

It's geographic

Speaker 3

diverse too.

Speaker 1

It's spread across 7 states, concentrated in one city One specific area. But that we obviously it's something we watch. There It's definitely weakness in urban office.

Speaker 3

So it's a good question.

Speaker 1

Great. Thank you. Are we good?

Speaker 7

That's helpful. Yes. I appreciate the color. Thank you.

Operator

Our next question comes from Casey Haire from Jefferies. Please go ahead with your question.

Speaker 8

Great. Thanks. Good morning, guys.

Operator

Good morning.

Speaker 4

I

Speaker 8

wanted to follow-up On the NII guide, so, Vince, it sounds like deposit beta is going to peak at around cum deposit beta peaks around 35%. Just wondering when does that take place relative to your first Bed cut? And then what is your guide assume for deposit beta on the way down for 2024?

Speaker 4

Yes, I would say we would drift a little higher. We ended the year of 34.3% I think it says in the slide. We'll get a little bit higher here, another point or 2 is what we're thinking. And then when that happens for Q2 kind of consistent with the margin kind of bottoming in the first half of the year. And then what we were thinking, I mentioned the update has been 35 now twice on the upside.

Speaker 4

I think as we look to the point when the Fed pivots and starts to reduce rate using a similar over the medium term, right, 35% makes sense to us, but within 24%, On the timing of the Fed cuts, right, we get some portion of that. If I get more than half of it, but you wouldn't get $35,000,000 in calendar 'twenty four. As we have been, we will actively be managing our deposit book on the pricing and in our weekly price committee meetings we're already starting to talk about when do we lower rates. Some of our competitors have. So we're going to monitor very closely, discuss it constantly and We'll take the right action at the right time, but somewhere in that half or so, that 35% this might take this year.

Speaker 8

Got you. Thank you. I just

Speaker 4

mentioned Macassay. I just logical.

Speaker 8

Yes. No. Understood. Understood. And just switching to credit.

Speaker 8

Gary, if I'm here if I'm interpreting your remarks correctly, it sounds like you expect Net charge offs to go to decline this year. I'm just wondering what kind of loss rate your provision guide contemplates?

Speaker 3

Yes. I mean in terms of The provision guide at the 80 to 100 naturally that supports loan growth as well as charge offs. The specific charge off level

Speaker 4

that

Speaker 3

we've got baked into our plans, I mean, that's That's a number we don't disclose. But I would concur with your thoughts. I mean we do expect performance to be stable to slightly improved over prior period.

Speaker 1

But I think Casey, if you go to Page 9 In our presentation, you can see net charge offs, the average loans. The Q3 23 has we have that one time event that occurs. So I mean we're

Speaker 8

Yes, fair enough. That was a yes, right. Okay.

Speaker 1

That's what you're seeing in your charge off.

Speaker 3

Yes, if you look over the last 3 years, Casey, last 3 years would have been 6 basis points, 6 basis points and 23 would have been 10 basis points excluding that one item. So you've got really solid steady performance there over a very pretty sizable extended and somewhat tumultuous period. And like I said, we like the position of the portfolio. We feel quite good about it going into 2024. Naturally, we are all concerned a bit about where is this economy going And what will that all mean and that has to play out as we all know.

Speaker 3

But we've seen good steady outperformance and stable outcomes

Speaker 1

across the portfolios.

Speaker 8

Okay, great. And just last one for me. Vince, you mentioned your TCE is at the highest level, I think in your history, and the CET1 Q1 above 10%, how are you guys thinking about what's the share buyback appetite with your capital ratios at current levels?

Speaker 1

We still have we have authorization to repurchase shares from the Board. We plan on evaluating that as we move along. If we see opportunities to buy shares back, We're certainly going to do it if the earn back is reasonable, right? I mean, because we're trying to manage tangible book value levels as well. So I think we're going to continue to look at it and evaluate it and opportunistically execute transactions if they make sense.

Speaker 1

The deployment of capital as

Speaker 3

we move forward

Speaker 1

really we're looking at the potential for changes in the economy and loan growth as well because we want to deploy that capital in the most meaningful way. But we see slowness, we're not just going to sit here and continue to build capital. We have to do to make sure the returns are. I don't know if that answers your question or not. In other words, still on the table and we're still going to consider it as we move along.

Speaker 8

Got you. Thanks, guys.

Operator

Our next question comes from Michael Perito from KBW. Please go ahead with your question.

Speaker 9

Hey, guys. Good morning. Thanks for all the color so far. I really just have one last question I want to hit on for Gary on the credit piece. Just Yesterday, Discover reported earnings and had some uptick on the consumer side in their prime book, lines of credit, auto and things of that nature.

Speaker 9

Just curious What you guys are seeing on the consumer side from a credit health perspective, most of those portfolios outside the mortgage book, I think shrunk this year. Just What type of growth is baked into 2024? And what are some of the maybe the key things that could drive some better growth performance on the consumer side? Is it just kind of a macro health environment? Is it pricing competitive dynamics?

Speaker 9

Just would love some color around

Speaker 1

all those topics. That would be great.

Speaker 3

Yes, total delinquency across that all inclusive portfolio which is right at about $12,000,000,000 is 89 basis points. So that's all in consumer. The Q4, it's always up a little bit seasonally. At the end of the year with the holidays and whatnot. But if you look over a rolling 13 month timeframe, it's been from 70 basis points to the 11.90s.

Speaker 3

So we've seen very System performance across that portfolio. The underwriting that we do there, I feel very good about. I think it's very very prudent and very stable. We're able to generate good loan growth Through those portfolios and when you look at the investment that we've made And the teams there, it's an important part of our business. So as we look forward, We continue to expect good solid growth there and that being slightly higher range in this environment, mid to high single digit range in this environment and expect that portfolio to continue to perform well through the cycle that we're

Speaker 1

in.

Speaker 9

That's helpful. So it sounds like the mid single digit growth guidance, there are some consumer growth baked into that for 2024, that's the expectation as you stand today?

Speaker 1

Yes. Including mortgage. But if you stripped out mortgage, we're still expecting growth. And again, I think some of the investments we've made in the digital tools, the fact that we're spread across a pretty broad geography at 60,000,000 consumers In our footprint, some of the build out with the ATM delivery channel that heightens provides consumers with accessibility to cash and our brand. I think all of that gives us a little bit of confidence even though I would say the consumer with inflation and some of the changes economically that are going on are going to be a little challenged.

Speaker 1

I think we're in a pretty good spot continue to grow the book, not as robustly as we have in the past. I know it's been last year was tough, but Things are going to stabilize and we should see in a lower rate environment some opportunities to grow that portfolio. That's baked into the guide.

Speaker 9

Great. Very helpful. Thank you guys and for all the other color

Operator

Our next question comes from Russell Gunther from Stephens. Please go ahead with your question.

Speaker 10

Hey, good morning, guys. I just wanted to follow-up on the balance sheet repositioning And around the tangible book value earn back math. So I get the securities repositioning. I just wanted to confirm that the preferred stock dividend saving is included in that calculation. And then just ask for some additional color on the indirect auto piece.

Speaker 10

What rate borrowings would be paid down, whether there's any reserve release associated with those loans included in that math, just trying to get the puts and takes.

Speaker 11

Yes. So Russell, so as you know, the securities repositioning was done on the available for sale portfolio. So that was already baked into the tangible book value. So there's no incremental hit from that. There's very slight hit from the loan sale, but just given the overall strong earnings accretion From the combined transaction, that earn back is less than a year.

Speaker 11

When you add in the preferred dividend, It still stays obviously because that's accretive to that would be less than a year. So pretty strong earn back metric. Anything sorry, did I address all your questions there?

Speaker 10

The auto piece And what the just kind of puts and takes of the savings were there, just the rate of borrowings you'd expect to pay down and whether there's any reserve release associated with those loans that's included in that calculation.

Speaker 11

Got you. Yes. So the borrowings we talked about paying off at a similar rate as the yield on the loans. So we're talking roughly 5% to 5.5% type yield on those loans.

Speaker 1

Net. Yes,

Speaker 11

net. So it will pay down borrowings at a similar rate. And just as a reminder, that loan sale has closed yet, so we actually haven't seen the capital benefits from that full transaction. So just on a pro form a basis, when the loans do go off the balance sheet, We'd expect CET1 to increase an estimated 10 basis points and NTG increased roughly 6 basis points as well on top of that.

Speaker 4

Okay, great. And there's no additional income statement at tax Russell in the Q1 because with us marking it the market that captures everything in the Q4. So really it's just actually executing the sale itself.

Speaker 10

Thank you, guys. And then I guess just the last follow-up then would be back to the CET1 discussion, the pro form a still north of that 10%. You guys addressed to repurchases, but also sensitivity around earn back. So Not willing to let capital accrete, are additional securities repositionings on the table or how are you thinking about that?

Speaker 4

No, I think we spent a lot of time in the 4th quarter sizing what we did. So We don't have any plans to do any additional security sales. We'll sit here. Remember, during the last few years, I mean, we stayed short with the Delmar investment portfolio we stay conservative in how we manage that. So the total dollar amount that we did there was So kind of

Speaker 10

the total we're looking to do.

Speaker 4

We don't have any plans to do anything additionally. And then from a capital ratio perspective within our guidance and then our capital ratios will drift up as you go through the year, which is important. And then to Vince's point earlier, opportunistically, That will create an ability to do share buybacks if it makes sense.

Speaker 1

Yes. And I like to see tangible book value above $10 right? I mean that would be something that we could all celebrate because I think ultimately that translates into a higher valuation for us given our profitability. But so we're going to be managing all of that. We're going to be watching all of that and making smart decision based on return pressure.

Speaker 10

Understood. Thank you, guys. I appreciate you all taking my question.

Speaker 1

Yes. Thank you.

Operator

Our next question comes from Manuel Neves from D. A. Davidson and Company. Please go ahead with your question. Hey,

Speaker 4

good morning. Just wanted to get a bit of your economic backdrop behind your loan growth guidance and then behind the provisioning guidance? I mean economic environment, I mean it's kind of what the Consensus economists would be saying, I mean it's slowing growth in the second half of the year. We're not making kind of calls on our own. We're kind of Looking at what the expectations are from economists throughout the country and that's kind of what's baked in.

Speaker 4

I think the GDP Scott in our plan goes down to like a 0 point, but it's still growth. Still 2 on average. 1 average for the year, right.

Speaker 1

Okay.

Speaker 4

So if the expectation I'm sorry, go ahead. So at expectation, if it was to worsen, would the provision be above the range? I think we're very comfortable with the range we have.

Speaker 3

Yes. No, we feel very comfortable with the range This point where the economy is staying and how the portfolio is.

Speaker 4

And then loan growth, the pace has been really strong here to close the year. Is that kind of more front end loaded as it kind of slows across the back half of the year or is it you feel pretty good about that mid single digits

Speaker 9

kind of Staying consistent across the year.

Speaker 1

Yes. I mean, there's seasonality within the originations depending on the portfolio. If you look at the commercial book, it tends to grow more in the second into the third quarter. If you look at mortgage banking and we move that up a little bit maybe a quarter, really 1st and second quarter it starts to take off. So there are differences in the portfolios.

Speaker 1

I just used those 2 as an example. But I think when we build our plan to give consensus, We look at both macro and micro scenarios. So basically we build our plant from the ground up, we survey our business units, We look at our production capability historically in the markets we're in and then we look at the macroeconomic environment, say

Speaker 3

is this

Speaker 1

achievable What's happening and we basically use that's why Vince said, we use consensus estimates by economists. We don't forecast So, somebody else's forecast and then we apply that to our model. So, it's all kind of baked in to what we give you. We're building it from inside of our own company and then we're looking at the macroeconomic factors that could influence that. That goes for provision expense, loan growth, commercial, consumer, mortgage, kind of break it down by segment and then build it from the ground up.

Speaker 1

So, I think given where we are in the cycle and what we're seeing and hard to predict, We're a little more optimistic than we were a quarter ago going into next year. And I think that's reflected in the guide On the loan growth, I'm hoping we can do better. If you look at our pipelines, we did pretty well commercially In the last quarter, it's reflected in the loan growth and the surge in the 4th quarter. That can change from year to year commercially. We did well last quarter.

Speaker 1

So when you look at our pipelines moving forward, we're relatively flat. So we don't have this big pipeline that looking at it says, hey, yes, we're going to achieve 3% or 4% or 5% or whatever mid single digit in that portfolio. So I would say that I feel pretty confident about what we're putting forward given what we know about the economy today. I don't know if that's helpful.

Speaker 3

That's really helpful. You're talking about softness.

Speaker 4

No, that's great. Can I add, is there any kind of regional takeaways from your e store performance? You have a lot of activity, you have a lot of non account holders using the e store. Can you break it down regionally at all? Or is it just great trends in general?

Speaker 1

That's an interesting question. I just asked our people that question. So I asked the same question internally. It's still relatively new. We're trying to figure out how to devise reporting that gets us as granular as we need to be from an origination perspective.

Speaker 1

But when they initially looked at it, it's pretty much across the board which is interesting. It wasn't in one particular geography. It was spread across pretty broad geography. So I think anywhere where we have name recognition, branch locations, We tend to get more action. Once you move outside of that, we don't advertise a lot.

Speaker 1

So you don't see as much activity. So which is part of the reason why we decided to go with branded ATMs and do the ATM deployment because our theory was that The more frequently consumers see us, the more likely they are to engage us digitally. That was part of the strategy. So, it seems to be working. If you look at where our geographic locations are, where we have signage and some recognition, There's more activity, Ditch.

Speaker 9

That's great. I appreciate that. Thank you, guys.

Speaker 1

And then obviously we're going to get now that we've added the deposit products in December, we are going to start advertising. We will try to grow that through some advertising, bring some awareness to consumer of the capability. I know locally I saw during the Super Bowl we managed a couple of that, right, or the not the Super Bowl, but the national championship for the College football. I'm excited to say so, but I don't know what else. Thank you.

Speaker 1

Dealers are already out, so I'm lost. But we did some sport, let's put it this way, we were in the playoff game, we ran during the Steeler Buffalo Bills game, We ran during the national championship probably locally, right, because we have customers that are in tune with those events. So we ran some advertising and some people commented on it. And then the branding of the buildings in certain markets has helped us with visibility particularly for I think we've seen more activity From a prospecting perspective because of the signage on our headquarters building and that activity that's brought some people in. And then the sponsorships with the Penguins.

Speaker 1

The Way Jersey, the Patch, you've got A lot of play on that as well. Anyway, that's how we're trying to build awareness. That's great. Thank you. Appreciate it.

Speaker 1

That's

Operator

Our next question comes from Brian Martin from Janney. Please go ahead with your

Speaker 12

Hey, good morning, guys. Most of my questions have been answered. Just One question, Vince, you answered it. I think the last question was just on the cadence of the commercial growth or the commercial pipeline. It sounds like it's a little bit slower to start here given what quarter looked like, but it probably builds from there that's just in general what I heard.

Speaker 12

Is that fair?

Speaker 1

Yes. I mean, we had a really strong Q3 that kind of cleared out the 90 day bucket on the pipeline And that has to rebuild. So it's relatively flat. We had good production out of the Carolinas. There's double digit We're looking some of the Carolina portfolios, which is pretty positive.

Speaker 1

Without CRE, without a big contribution from CRE, We're pretty excited about that. And I think there'll be opportunity in the Midwest and in the Northeast as well from a C and I perspective as we move into next year, the latter half of next year.

Speaker 12

Got you. Okay. And then just one for Gary. Gary, the credit just it sounds very strong. I mean, I guess if you point to one area today that you're Maybe a bit more watchful of and the criticize sounds like they were down this quarter.

Speaker 12

But just in general, is there any area that you're paying a bit more attention to as you kind of head into 'twenty four given the strength of the portfolio?

Speaker 3

Well, I think the CRE book just in general, I mean, we've been all over that And the team has done a really nice job of building out risk management practices around that. Tom Fisher and his team are all over those books of business as they are the rest of the portfolio. But The office space naturally and we've said it for years that was going to be a longer term Portfolio segment in the industry that is going to have to be dealt with over time. I That change was I would say not temporary. There has been permanent change in that market.

Speaker 3

Fortunately, I think we've chosen well there over time with good solid sponsors have liquidity and I think that's why that portfolio has continued to perform as it has to this point. But that CRE space in that office portfolio, I think it has a way to go that frame. So We'll continue to be all over that.

Speaker 12

Okay, perfect. And then maybe just last 2, just on the fee income side, kind of looking at the pickup in mortgage and you talked a little bit about kind of a little bit of the changing strategy there. Just kind of the puts and takes on mortgage outlook for here and then just capital markets revenue was pretty consistent, maybe a little bit lower level from where it was previous years. Just kind of wondering how to think about that or just how the pipeline looks there?

Speaker 4

Yes, I would just say the non interest income Again, shows the benefit of having diversified revenue base, right. And we've had another good quarter above 80. We've been above 80 6 out of the last 7 quarters getting there different ways, but again the benefit of diversification. So capital markets was a solid quarter for us. I mean it's up from the prior quarter, down from last year when I had a 10 handed.

Speaker 4

But there's still a lot of opportunity there. And I think When the rate environment starts to shift, there will continue to be opportunity there. But we have really solid contributions from all the components there From the swap perspective, international syndications at Capital Markets. So there's a lot of pieces even within that business. And then the mortgage bounced back.

Speaker 4

We had a really strong 'twenty three. I mean in an environment where the market was down from an origination stand The overall industry was down. We were up and we're forecasting, as far from an origination standpoint, close to double digit increase in originations in 2024 versus 23. And then my comments on pricing was more just about salable versus portfolio, Not really affecting the level of originations, but kind of what we bring on the balance sheet and what we sell.

Speaker 1

The other thing I would say is that in a lower rate environment, We do get the rate decreases. We should see more activity in derivatives, more activity in debt capital markets with our large corporate customers going to market to raise capital and syndication should pick up in the second half of the year. So and then the mortgage business, gain on sale should accelerate. So, like Vince said, having a portfolio and then we've had good steady growth, I should mention our asset management and the wealth and trust shops have done extraordinarily well. So they're up in revenue, net income, they've grown net assets.

Speaker 1

Record level. We're at record level. So We're in good markets where we should see continued growth in that book. So we have a good balanced set of fee generators that I think in the coming year if rates play out the way some are forecasting we should do okay And

Speaker 4

then initiatives on the small business and PM side will be additive. Yes.

Speaker 12

No, the businesses you guys have built out are really paying dividends here and said the diversification. And I guess on the mortgage, I was just trying to understand, Vince, if part of the increase this quarter was really just you selling more. So if you do have an increase in originations next year and you continue to sell at a higher rate, maybe that also contributes to a better outlook for 2024?

Speaker 1

Yes, the gain on sale margin is lower though. It depends on the rate environment. When you look at it, we may have sold, but we're not making as much for unit. We're just moving it off the balance sheet because the rate environment provides us with the do that. So and we're remember, we focus principally on purchase money.

Speaker 1

That activity has been lower, Right. I mean, we don't we're not in a declining rate environment, we would see more refinance activity even though we focus more on purchase money, we would get some benefit from the refinance market. So, there's trade offs. I think it's a pretty balanced approach and I think that's we've been able to sustain our fee income levels through this period. Even with declining consumer fees, we've done pretty good signs.

Speaker 4

Yes, Martin, I would just add the mortgage income in the Q4 had benefit from rates coming down too. So the fair value mark on the pipeline has contributed to that in the Q4.

Speaker 12

Got you. Okay. Perfect. And then just the last one for me, just on the margin, Vince. It's been C.

Speaker 12

Just the one question, just remind me, I mean, from a variable rate perspective, I mean, The percentage of variable rate loans and then if a 25 basis point cut on that piece, how much does that move the margin for each 25 basis point cut?

Speaker 4

We need to look at the whole balance sheet, Right. The percentage is still about 47%

Speaker 3

of the

Speaker 4

total loans that are very close to just down and I talking about earlier. And you have all the different moving parts. The CDs are 10 months, average maturity. So, there's pluses and minuses there. That's kind of all baked into the Market is kind of bottoming in the first half of the year, Brian, and then moving up there, yes.

Speaker 12

Yes. Okay. That helps out 47. So all right, I appreciate. Thanks for taking the questions guys.

Operator

And ladies and gentlemen, at this time, showing no additional questions, I'd like to turn the floor back over to Vince Deli for any closing remarks.

Speaker 1

I'd like to thank everybody for the questions, great questions. Thank you for your interest. And I think given what's going on this year, F and B has performed very well. And many of the key strategies that we've deployed that we've talked about over the years really played out During the liquidity crisis earlier this year, you got to see firsthand what we've been talking about in terms of client primacy, quality of our deposit portfolio and our credit underwriting. So I think it's It really showed itself this year and I'm very excited about moving into next year, hopefully moving into a better economic as we move into to 'twenty four, particularly the latter half of 'twenty four.

Speaker 1

And I again would like to thank our employees because they step up and get things done and did an admirable job last year. So thank you. Thank you everybody. Take care.

Operator

Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.

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Earnings Conference Call
F.N.B. Q4 2023
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