Good day, and welcome to the Enterprise Financial Services Corp third quarter 2022 earnings conference call. Please note today's conference call is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star followed by the number one again. Thank you. At this time, I would like to turn the conference over to Jim Lally, President and CEO. Sir, you may begin your conference. Well, thank you, Erica, and good morning. I welcome everyone to our third quarter earnings call. I appreciate all of you taking time to listen in. Joining me this morning is Keene Turner, our company's Chief Financial Officer and Chief Operating Officer, and Scott Goodman, President of Enterprise Bank & Trust. Before we begin, I would like to remind everyone on the call that a copy of the release and accompanying presentation can be found on our website. Presentation and earnings release were furnished on SEC Form 8-K yesterday. Please refer to slide two of the presentation titled Forward-Looking Statements and our most recent 10-K and 10-Q for reasons why actual results may vary from any forward-looking statements that we make this morning. Please turn to slide three for our financial highlights of the third quarter. We're very pleased with our third quarter results as they reflect the cadence of consistency that we established since the beginning of the fourth quarter of 2021. These earnings are a product of the diversified franchise that we are building with a laser focus on establishing long-term relationships with privately held businesses while building a culture of operational excellence. For the quarter, we earned $1.32 per diluted share, which compared favorably to the $1.19 that we earned in the second quarter. Our patience with respect to our loan and investment portfolios, coupled with our low-cost deposit base, allowed us to take advantage of the rising interest rate environment. For the quarter, our net interest income increased to $124 million. This represented a 13% increase over the linked quarter and was bolstered by our net interest margin of 4.10%. Our return profile improved as well. Pre-provision return on average assets was 1.96% versus 1.73% in the second quarter and 1.81% a year ago. Return on tangible common equity also improved, increasing to 19% compared to 17% at 6/30/2022. Scott will provide much more detail on how our markets and specialty businesses fared during the quarter. At a very high level, loans increased 5% annually, net of PPP, and deposits remained north of $11 billion, decreasing modestly by $35 million. At the end of the quarter, our loan-to-deposit ratio stood at 85%, with DDA representing 42% of our total deposits. Keene will spend much more time on capital, but I just wanted to comment that our TCE to total assets was stable at 7.86% despite AOCI pressure and CET1 was 11%. Keeping with the pattern that we established several quarters ago, we did increase our dividend per common share for the fourth quarter to $0.24 from $0.23. Our asset quality remained very solid at quarter end. While our portfolio statistics remain pristine, we do understand what the impact of rising interest rates and a prolonged recession could have on our loan portfolio. With that in mind, we have conducted segmented internal loan exams and have stress-tested larger floating rate portfolios and potentially higher loss portfolios and feel very confident about the resiliency. This segmented testing will continue for the foreseeable future. It goes without saying, but we are looking for the proverbial cracks in the portfolio, but we have yet to see any. I would like to provide some color on the themes I'm hearing from our clients. In my most recent meetings with several of our C&I clients, I'm hearing that orders are strong, balance sheets are good, but labor and supply chain still remain a bit challenging. That being the case, for the most part, they feel confident about their performance to plan for fiscal 2022 and their ability to continue to perform at this level into 2023 and into early 2024. Most are preparing for a mild recession in early 2024 but think this will be short-lived and things will rebound by the end of that year. When speaking with our key sponsors related to our sponsor finance business, they too are confident about their portfolios and feel really good about near-term performance and the resiliency of the balance sheets of their portfolio companies should a recession last longer than anticipated. Finally, I will say that some of our larger developer clients are being cautious about new projects that are still in the drawing board. With the recent rise in interest rates, these projects have difficulty penciling, so this will obviously have an impact on new development projects that would have likely closed in mid- to late 2023. Our formula for success for the remainder of the year is relatively simple. Slide 4 lists a sampling of our focus. We need to continue our strong momentum in both organic loan and deposit growth, and doing this with a relationship focus while keeping discipline on both pricing and credit quality. Credit and capital is always a focus for us, but given the current climate, we'll remain especially vigilant in both of these areas. Finally, times of change and uncertainty are typically ideal for us to add good talent everywhere in our organization. As we always do, we will do this with an accretive mindset. We especially think that there are very good opportunities in our newer markets like Southern California and Dallas-Fort Worth. With that, I would like to turn the call over to Scott Goodman, President of Enterprise Bank & Trust. Thank you, Jim, and good morning, everybody. As you heard from Jim, and as shown on slide six, we posted solid loan growth of $122 million for the third quarter, resulting in a trailing twelve-month growth rate of 8% net of PPP changes. Despite Q3 typically being a somewhat seasonally soft period for a number of our specialty business lines, in general, we're very pleased with the overall growth in this portfolio, seeing successful conversion of our regional C&I and CRE pipelines and continuing steady execution of new opportunities within the specialty businesses. Loan details by segment are outlined on slides seven and eight. Year-over-year, growth is being contributed by nearly all segments of the business. Reduction in the residential real estate portfolio mainly reflects the addition of these loan types through the First Choice acquisition and our subsequent intentional shift away from short-term bridge or fix and flip lending in the California market. Most of this reduction occurred in prior quarters. For the third quarter, the largest contributors to growth were within our regional commercial banking units in general C&I and commercial real estate categories. We have been able to successfully win a number of new larger C&I relationships during Q3 across most of our geographic markets, reflecting a steady and consistent sales process. Overall, C&I originations increased nearly 14% from the prior quarter and are up nearly 65% from the same quarter last year. We also continue to see good activity in our real estate pipeline, particularly with our existing investor clients and within the Western geographies. New development loans have slowed somewhat as developers consider elevated project costs and some shifting economic factors, but our existing construction portfolio continues to fund and perform well. A number of these projects are moving to a stabilized status and remaining within our portfolio, which is partially contributing to the reduction that you see in construction development category and the increase in CRE investor-owned balances. The change in tax credit balances also reflect some shift in categorization this quarter as projects that have aged past their qualification periods move into a more permanent category. Moving to slide number nine, please note that we have consolidated our metro markets into geographic regions as outlined in the footnote. The specialized lending units continue to perform well and have shown some level of immunity to the shifting economic conditions, growing in Q3 by $46 million. Life insurance premium finance grew by $30 million in a seasonally softer time of the year, due mainly to elevated activity from newer referral partners. The California market has presented an opportunity to more fully introduce our expertise in this niche to COIs within this targeted segment, and we are getting introductions to new COIs from our existing insurance partners as well. Practice finance, which is a new team for us in 2022, has hit the ground running and continues to perform well, contributing $25 million to growth this quarter and $73 million for the year. Sponsor finance, which was essentially flat for the quarter, which is not uncommon for this time of the year. Deal flow and pipeline have begun to regenerate following a mid-year pause and look solid heading into Q4, which tends to be a more active quarter leading up to year-end closings. In the SBA business, we did experience some decline in originations for new 7(a) loans this quarter due to lower demand, as well as competition from conventional bank lenders. We were able to offset much of this impact on the portfolio through efforts to proactively retain and extend existing SBA loans, with payoffs and pay downs diminishing to roughly 65% of levels experienced in the prior quarter. We have also recently bolstered our traditional owner-occupied floating rate product with fixed options, as well as extending our SBA capabilities to target other business purposes in an effort to elevate production. Within the Midwestern region, St. Louis and Kansas City both had good growth quarters, resulting from landing a balanced mix of new middle market C&I relationships and commercial real estate opportunities. In the Southwest, growth was modest this quarter. We did onboard a number of new C&I relationships in Arizona, Las Vegas, and New Mexico, as well as some momentum of fundings from CRE and construction commitments closed throughout the year. Net growth was lowered somewhat due to payoffs related to the sale of a large Arizona C&I business to private equity and the sale of investor-owned properties in Arizona and New Mexico. In the West region, the portfolio declined slightly by $10 million due mainly to lower advances on existing lines of credit. On a positive note, we are seeing good activity from new talent brought into this market over the last year, and our California pipeline is building heading into Q4. Payoffs there continue to moderate relating to our decision to move away from the aforementioned residential fix and flip business with total payoffs at roughly half the level experienced last quarter. Moving to deposits covered on slides 10 and 11. As the market has placed more emphasis recently on deposits and competition increases, our focus continues to be on retaining our existing low-cost and relationship-based funding while leveraging specialty channels and new commercial relationships to attract additional balances. Year-over-year, deposit balances have risen $230 million or roughly 2%, primarily driven by an increase in new non-interest-bearing accounts from the specialty deposit lines and new commercial relationships. For the quarter, overall balances were relatively steady compared to the prior quarter, down just $35 million. Areas of decline were primarily in interest sensitive consumer and time deposits, while commercial, business banking and specialty deposit channels remained strong. Average DDA balances per account continue to move down as businesses spend through stimulus dollars and excess liquidity. We've been able to offset the impact of this trend, though, through sourcing new relationships and expanding existing ones with the current annualized growth rate of deposit accounts just under 9% in the quarter. On a regional level, which is displayed on slide 12, we saw growth in all areas with the exception of the Midwest. This was primarily due to the movement of balances from one large commercial client in Kansas City, which was acquired in the quarter. Specialty deposits profiled in slide 13 grew by $19 million in the quarter, with the largest contributions coming from the community association and property management segments. These continue to be an efficient and low-cost source of funding now representing 22% of total deposits. Across our markets, we had positive net new accounts in the quarter with higher average balances than in our closed accounts and at attractive rates. As our average open interest rate for the quarter was well below our peer average. In general, we're pleased with our ability to hold relationship balances, to originate new accounts, and to maintain an attractive blended deposit cost. Now I'd like to turn the call over to Keene Turner for his comments on the quarter. Keene? Thanks, Scott. My comments begin on slide 14 of the webcast. We reported earnings per share of $1.32 in the third quarter on net income of $50 million. Earnings per share expanded 11% sequentially due to 8% growth in operating revenue, which totaled $134 million or a $0.20 per share sequential increase. This growth was driven by a 13% expansion of net interest income, while non-interest expense expanded at a more controlled rate, resulting in a 35% marginal efficiency rate for the third quarter. Turning to slide 15, net interest income for the quarter was $124 million compared to $110 million in the second quarter, or a $14 million increase. Net interest income was favorably impacted by an improved earning asset mix, including higher average loan and investment balances, along with the benefit of rising interest rates driving asset yields higher. The increase in net interest income was primarily driven by a $16 million increase in loan income, despite a $1.1 million reduction from PPP income. With the composition of our balance sheet as of September 30, we expect the full impact of the existing interest rate increases will result in quarterly net interest income in the range of $130 million-$132 million. We estimate another 100 basis points increase in interest rates will result in an additional $5 million in quarterly net interest income. As noted in the earnings release, approximately 20% of the variable rate loan portfolio reprices on the first day of each quarter and did not benefit from the third quarter interest rate increases. Moving on to slide 16, net interest margin on a tax equivalent basis was 4.10%, an increase of 55 basis points from the linked quarter. Our balance sheet has been positioned to be asset sensitive and accordingly, it continued to benefit from an increase in interest rates. As a result, asset yields improved 71 basis points, which included 59 basis points of yield improvement and investment yield improvement of 14 basis points. New loan originations in the quarter were at a rate of 5.7%, and we invested at a rate of 3.7% in the investment portfolio on a tax equivalent basis. Additionally, the increase in Fed funds rate led to improved earnings on our interest-bearing cash balances. Net interest margin was also aided by an enhanced asset mix as we continued to fund growth in loans and the investment portfolio while reducing excess cash. The cost of interest-bearing liabilities increased 30 basis points from the second quarter, driven mainly by higher deposit rates and variable rate borrowings. The loan portfolio remains our largest driver of asset sensitivity as 63% of loans are variable rate. More than 60% of those have interest rate floors, and essentially all those floors are non-existent. The rate is above the floor. We ended the quarter with nearly $750 million of cash on the balance sheet, and that affords us the opportunity for favorable asset remixing and liquidity defense in upcoming quarters. Our deposit portfolio remains more than 40% interest-bearing balances, and we have less than $500 million of total transaction accounts formally tied to an index. With ample liquidity, our expanded footprint, and strong low-cost deposit generation through our specialty verticals, we've been able to maintain our beta below 20% in the current cycle. While we expect this lag in deposit pricing to abate, we believe our ability to control deposit costs through this rising rate environment is greatly enhanced versus prior interest rate cycles. On slide 17, we demonstrate our credit trends. Our asset quality metrics improved in the quarter as both non-performing loans and assets declined. Non-performing assets were 14 basis points of total assets, and non-performing loans were 19 basis points of total loans. Realized credit losses continued to be very low, and net charge-offs were only two basis points in the quarter, compared to one basis point recovery in the prior quarter. Slide 18 presents the allowance for credit losses. Each of the economic forecast factors we use in our CECL model deteriorated as expected during the quarter. The impact on the allowance for credit losses from the worsening forecast and loan growth in the quarter was partially offset by a favorable shift in the risk composition of the loan portfolio. Certain loan segments that have higher reserve levels declined, while other categories with lower reserve percentages increased. The sum of these moving pieces resulted in a provision expense of approximately $1 million in the third quarter. The allowance for credit losses was stable at $141 million compared to the end of June and represents 1.50% of total loans. When adjusting for government-guaranteed loans, the allowance to total loans was 1.67% at the end of September. As you heard from Jim, we're diligently monitoring our credit risks in the loan portfolio and we continue to believe that our allowance coverage is both warranted and sufficient to address those risks. On slide 19, third quarter fee income was $9.5 million. This was a sequential decline of $4.7 million and was led primarily by a $4.8 million reduction in tax credit income as rising rates in the quarter had a negative impact on tax credit projects that are carried at fair value. Tax credit income will continue to be seasonal and subject to further interest rate movements. However, fair value adjustments that reduce tax credit income are more than offset by higher net interest income in a rising interest rate environment. Card services revenue also declined by less than $1 million in the quarter, primarily related to the Durbin impact on debit card transactions, which went into effect for us for the third quarter. Turning to slide 20, third quarter non-interest expense was $69 million, an increase of $3 million compared to $65 million in the second quarter. Compensation and benefits increased $1 million in the quarter, principally from new hiring and an increase in performance-based incentive accruals. Other expenses were $2 million higher in the third quarter, primarily related to an increase in deposit servicing expenses that have continued to be impacted by higher interest rates. The third quarter's efficiency ratio was 51.5%, an improvement of 130 basis points compared to the second quarter. This reflects the momentum in operating revenue outpacing the rise in non-interest expense during the quarter. The expense trend during the quarter continues to be driven by customer analysis expense, which increases as rates increase. Also, incentive and bonus accruals, as well as fewer open positions than planned, resulted in the sequential increase to employee compensation and benefits. Looking to the fourth quarter, we're expecting non-interest expense to be in a range of $71 million-$73 million. This is principally due to an expected increase in head count and higher deposit costs from an expanding specialty deposit base, as well as higher interest rates from the Federal Reserve's actions. As I have previously mentioned, we continue to expect that the increase in customer analysis and other expenses will be more than offset by higher net interest income trends as rates continue to move upward. Our capital metrics are shown on slide 21. The near record earnings we generated in the third quarter of $50 million offset the $45 million dollar decline in accumulated other comprehensive income from the continued impact of rising interest rates on the market value of our available for sale investment portfolio. Despite the headwind in the AFS investment market value change on tangible common equity this year, our tangible common equity ratio has now expanded for two consecutive quarters. Tangible book value per share was relatively stable compared to the second quarter. Our strong capital foundation is reflected in the common equity tier one ratio of 11% at the end of September. Common equity tier one does not include the effects of unrealized losses of $153 million in accumulated other comprehensive income at September 30 that will be returned to equity over the life of those securities and derivatives portfolios. Given the strength of our earnings and the capital position, we announced another increase to our dividend for the sixth consecutive quarter. While we repurchased over 700,000 shares in the first half of the year, we did not repurchase any shares during the quarter. We have 2 million shares available under a board-approved program, but we do not currently plan to execute on a repurchase plan until we see more build in our tangible common equity ratio. Overall, we had a very strong quarter, and we have been pleased with our performance so far this year. As Jim mentioned, we delivered a 19% return on tangible common equity and a 2% preprovision return on assets during the quarter. We have taken the steps to position our balance sheet to capitalize on the current interest rate environment while prudently deploying our liquidity and managing our credit risk profile. I thank you for joining the call today and will now open the line for analyst questions. At this time, I would like to remind everyone in order to ask a question, press star, then one on your telephone keypad. Again, that's star, then one to ask a question. Your first question comes from Jeff Rulis with D.A. Davidson. Thanks. Good morning. Morning, Jeff. Wanted to sort of unpack the tax credit line item. A number of a $3.6 million loss is. I just want to understand. Was there a fair value adjustment that offset actual revenue? And if so, could you tell us what the revenue associated with it was? Or if that's. Maybe I'm not thinking about it correctly. No, Jeff, this is Keene. You're thinking about it correctly. There's a portfolio of credits that as we originated into this type of business that we fair value to work through some of the expenses. You know, what I'll say is in prior to the third quarter and maybe a more normalized interest rate tightening environment, we expected to always be able to at least mitigate out that expense. With how aggressively, specifically 10-year SOFR moved up right at the end of the third quarter and with the fact that closings on projects were fairly minimal in the quarter, we took about a $12 million fair value decline or negative adjustment. You know, the resulting delta was offset by some new projects and sales and things like that. That gets you to essentially that minus $4 million for the quarter. You know, moving forward, I think with what's happened so far in the year, I think we're prepared for anywhere from, you know, call it a negative of another $2 million in the fourth quarter to potentially a zero or a positive, you know, as we move forward here. Just rates have moved on the long end of the curve, I guess more than we've thought. You know, we probably should have given some sensitivity to you guys in advance of this. Okay. As you said, you know, gains on the top line more than offset that. Just, I guess on net, kind of look at that as a break-even or maybe a slight loss in the coming quarters or one to two. I mean, any visibility on how long that goes out till it resumes to I mean, tough question, but Yeah. Um, but- It's gonna depend on what your view on interest rates are and also how much longer-term rates, specifically 10-year SOFR, move up as we get the Fed moving the short end of the curve. I think as we look out to, call it 2023, that number's unfortunately if we get more rate increases, it might be kind of 0 to something. That's probably shy of the $10 million. I think the opportunity here is as we've revalued these credits, I'll say on the way down, you know, with the idea or in the back of our minds that maybe at some point there's a recessionary impact later in 2023 or early in 2024, and maybe the Fed moves down from, you know, where Fed funds end up. This can also then be a hedge to maybe some slight decline of net interest income or higher provisioning or both of those. I know that's probably not as much clarity as you'd like, but it's gonna be a more modest contributor to 2022 and 2023 than we originally thought. I think net interest income is, you know, far outstripping that, and I think we'll take that trade as operating revenue strong. Maybe more color than an answer, but hopefully that's helpful. No, that is. It's good detail there. Yeah, jump into that, the top line discussion. Just curious, do you have a September monthly average on margin versus the quarterly average of 4.10%? Yeah. Based on the September balance sheet and rates, you know, I think we think net interest income is roughly, you know, just north of $130 million with net interest margin right around 4.35%. You know, that includes the quarterly resets we talked about predominantly on the SBA portfolio. Then, you know, call it another 10-15 basis point increase in deposit rates, you know, based on, you know, where we sit today and what we've done with sheet rates and exception pricing. Okay. Maybe the $435 and NII north of $130, that's a kind of a Q4 figure. You also sort of outlined additional rate hikes would lead to. Could you. Yeah. Sure I think you said five. Yeah. Go ahead. Yeah. Another 100 basis points, which is, I think, you know, what it seems like it's lining up for in the fourth quarter. I mean, that's gonna generate, you know, roughly $5 million of extra, you know, net interest income per quarter. We're using, you know, like just under a 50% beta on earning assets and like a 35% interest-bearing deposit beta for that. That's good detail. I'll step back. Thank you. All right. Thanks, Jeff. Again, if you would like to ask a question, please press star, then the number one. Your next question comes from the line of Andrew Liesch with Piper Sandler. Hey, guys. Good morning. Morning, Andrew. Just wanna question on the loan growth. Like I hear some optimism in some areas, but also some cautiousness in others. I guess if mid-single digit this quarter, is that the right way to think about growth, say over the next 12 months? 'Cause maybe we get a little bit stronger growth here with the sponsor finance book, but if we're looking out 12 months from now, is mid-single digits the right place to be? This is Jim. I would say we're very comfortable with the mid- to high-single on a go-forward basis. You know, the production levels have been solid. We're very pleased. We're not gonna expand the credit window to get that reach, but we're very confident about our ability to continue performing that mid- to high-single going forward. Got it. Just one housekeeping question here. On the margin, how much discount accretion was in that 4.10 number? Andrew, the discount accretion that's in the 410 is pretty negligible. I'd have to pull that out of there. At this point, we had a fair amount of burn off in the SBA portfolio, that you know, I think in the quarter it's less than a penny. It's not moving the needle, you know, either way. Got it. All right. My other questions were on the fees and the margin, so, I'm good to go. I'll step back. Thanks so much. Awesome. Thanks, Andrew. Your next question comes from the line of Damon DelMonte with KBW. Hey, good morning, guys. How are you doing today? I joined a little bit late, so I apologize if you addressed this in your prepared remarks. Could you just give a little color on the provision outlook? I know you talked about the puts and takes for this quarter, but how do we kind of think about, you know, the reserve level and any expectation for loan growth and kind of what you're seeing on the credit front as we try to kind of model out a provision level? Yeah, Damon, I think in the quarter, when we look at it sequentially, I mean, we did provide for growth. I think you know the coverage right now is like 150%. That obviously includes you know loan deterioration and substandard loans, which are still minimal. I think provisioning on new loans is you know call it you know right around that you know 110-125 basis points, depending on you know what category it's in. I think with the recovery you know the coverage ratio at you know 150% and 170% sort of you know total and unguaranteed. I think based on where we sit today, we feel like we're well-positioned if we see, you know, the horizon or the environment deteriorating further and we get some of that data in the economic forecast that we can be further responsive to it and, you know, deal with those provisions over the coming quarters, you know, fourth quarter and then into 2023. We also feel like we're conservatively positioned given what the portfolio looks like and what all of the credit quality indicators are. Again, I think we're at a point here where if we start to get some, you know, less aggressive moves from the Fed and it looks more like a softer landing, I think we think that 150 is a good number. I think if it continues to be aggressive tightening, you know, our view would be in from a safety perspective that we probably go a little bit heavier on the provisioning and maybe move coverage up to account for, you know, higher interest rates, you know, in the portfolio and higher than they've been in recent years. Got it. Okay. Just to circle back on the margin, I know I didn't get your prepared comments on this, but did you say, to answer one of the questions, what was the commentary around $130 million of NII in the 4.35% NIM? Is that what you're forecasting for the fourth quarter? That's correct. That's based on everything that's happened today, right? Okay. That's not any future increases. That's essentially, you know, the increases that we have in place hitting the repricing on October first for certain loans, and then also what we've rolled out in terms of deposit pricing on commercial and consumer customers. That's the fourth quarter number at $131 million and then like a 4.35% NIM. I'm giving you numbers, and obviously that's you've got to apply your level of boundaries on those. Then, you know, another 100 basis points in the fourth quarter would give us roughly another $5 million of net interest income quarterly thereafter. Again, we're using, you know, 47% beta on earning assets and a 35% beta on interest-bearing deposits. Okay, perfect. Appreciate that color. That's all that I had. Everything else was asked and answered. Thanks a lot. Appreciate it. All right. Thanks, Damon. Your final question comes from the line of Brian Martin with Janney. Hey, good morning, guys. Sorry I joined a bit late. Just one last follow-up, Keene, on the margin. Just when you see the Fed pause, I guess, you know, I guess, can you talk about how you think the margin behaves then? I mean, I guess, would your expectation be that you maybe see a little bit of a decline in the margin, but the dollars of NII are going up because of the growth? Is that kinda how you're thinking about it today? Yeah, I think it's certainly the directional trend. You know, deposit costs lagged quite a bit. They're certainly continuing to move. I don't know that they're necessarily catching up, but they're moving and, you know, asset rates, you know, wouldn't move up much more beyond it. I think some of it, Brian, depends on when the pause comes. If, for example, you got, you know, two more 75 basis point increases, and then there was a pause, obviously we'd get much more rapid expansion of net interest margin and net interest income. Then there would be slight margin compression from there. I think the question is just can you out earn that with growth and dollars, you know, quickly enough? You're still, you know. I think our view is that margin based on where we think rates are gonna go here at, you know, for the rest of 2023 or sorry, 2022, even if you got some of that compression, we'd be, you know, well north of 4% net interest margin even when it comes back down. If, you know, our hope is that you get sort of one more bold Fed action, and then we start to move back to, like, 25 basis points, and that will help create some stability while we earn through, you know, the shorter quarter days, in early 2023, and then also can layer into some growth and have strong net interest income, you know, grow from there on out. I think that would be ideal. I'm not sure we're taking a position one way or another on whether that's going to happen, but I think that generally is how we expect the balance sheet to behave. Yep. No, that's helpful. I appreciate it, Keene. Then how about just on, I think you guys probably covered a fair amount of the tax credit, but just the outlook in for that business and if I heard the tail end of it right, Keene, the outlook for the tax credit in 2023 is maybe just a modest contribution and at this point is how you're thinking about the world, and then we'll see what rates change or how rates change. Yeah, I think that's right. You know, I think if we stop having interest rate moves at the end of 2022, then I think next year you can expect some net contribution from tax credit. I think if rates continue to move particularly boldly, you know, it could be a 0 or a negative. I don't think I'd be surprised next year unless we got some material decline in longer term rates that the tax credit business would be, you know, kind of the $10 million or more that we thought it was gonna be this year. I think that, you know, that's sort of. I think if you're thinking about in terms of how to model it, you'd have to pull it out of net interest income and put it into the fee line item, you know, vice versa. I think there's sort of some mutual parity there. Gotcha. The rate that we should be paying attention to is when you say if rates are gonna change, is it what rate is it most sensitive to when we think about our outlook? For every 10 basis points increase or decrease in 10-year SOFR, that's about just roughly a $900,000 impact on fair value of tax credits. Okay. Perfect. Okay. Just the last one or two for me. It sounds like the loan growth is, you know. It doesn't appear that there's a lot of cautiousness among your borrowers. The outlook still seems pretty favorable from what you said, Jim, as far as, you know, mid to high single digit growth. I mean, is that any slowdown from what you were expecting earlier just given kind of what we're seeing and you know, how the economy may play out next year? Or is that pretty consistent with what you're expecting for- The budget is right. Yeah, the only area that I would say that we're already starting to see it is in the larger development client, you know, where the math just isn't working. Yeah. Those projects, you know, you win it, quote-unquote "win it," they don't start funding up until, you know, six months down the road anyway. I would tell you that business is impacted, you know, mid- to late 2023. From a C&I perspective, you know, our borrowers certainly recognize what's happening in the economy, but business is still decent. Business is good. Order books are growing, and they'll go ahead and purchase equipment as needed. They'll need working capital and things of that nature. We feel good about our book. The other thing too is the diversification of the book. Not any one region, not any one business has to operate at full tilt to reach these numbers. It's about, you know, each of them doing what they can do. We did a deep dive with the teams and feel comfortable about where we're headed, not only at the finish this year, but into 2023. Yeah. Okay. No, it seems positive. Just the last one was just on the deposits. It looked like the activity from last quarter slowed, and it was more stable this quarter. Just your outlook to fund the loan growth on the deposit side, you know, how are you thinking about the deposit growth or stabilization from here? Hey, Brian, it's Scott. I can take that one. You know, if you remember last quarter, we had just a large client in the specialty deposit business. Yep That moved out, and that was really the main reason for the decline that quarter. I think you saw a little more consistency this quarter. You know, I think when you look at how our deposits are spread across channels, commercial, specialty, business banking, a lot of that cash is used in the business needs to be accessible. I think we feel good about what we're seeing from a behavior standpoint and the ability to retain and grow that. You know, as we bring on new relationships through C&I, obviously that brings new deposits as well. I think specialty also is somewhat immune to what you see going on externally with chasing rates. You know, all those things I think bode well, and we feel good about being able to fund the growth. Okay. The deposit beta, Scott, I guess you're thinking, you know, where does the deposit beta shake out, you know, as you get, you know, a couple more rate hikes here in the fourth quarter? Yeah, Brian, this is Keene. I think what we said, you know, so far, you know, deposit beta has been roughly 20%. Obviously, just there's some lag in there, so that helps the optic of it. In the guidance I gave on another, you know, for the fourth quarter and then also for moving forward with further increases. You know, we're at like a 35% beta that we're modeling that we think is a good number. I think over time, you know, 20% and 35% converge. You know, the asset beta is strong at 47%, and we still have, you know, north of 40% DDA. So we think that that's a really good recipe and equation. We're. We've gotten off of, as you remember back to the question about second quarter deposits. You know, we've largely gotten away from, you know, Fed funds plus funding that we had in the last cycle. You know, we've been willing to move deposit rates as necessary to defend relationships and, you know, keep those intact. With the way the balance sheet's positioned, I think we're in good shape to continue to maintain and grow net interest income and margin. We'll probably give up just a little bit in terms of the deposit costs accelerating in these most recent quarters, but starting from north of 4% net interest margin and growing. We feel good about the earnings profile and being able to preserve that. Yeah. No, I appreciate it. Thanks for taking the questions, guys. Welcome. Thank you. There are no further questions at this time. I'll turn the call back over to management for any closing remarks. Thanks, Erica, and thank you everyone for joining us today. Thank you for your interest in our company, and we look forward to speaking to you at the end of next quarter. Have a great day. Thank you for participating. You may disconnect.