Good morning, and welcome to the FNB Corporation third quarter twenty twenty-four earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing Star, then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star then one on your telephone keypad. To withdraw your question, please press Star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Lisa Hajdu, Manager of Investor Relations. Please go ahead. Good morning, and welcome to our earnings call. This conference call of FNB Corporation and the reports it files with the Securities and Exchange Commission often contain forward-looking statements and non-GAAP financial measures. Non-GAAP financial measures should be viewed in addition to and not as an alternative for our reported results prepared in accordance with GAAP. Reconciliations of GAAP to non-GAAP operating measures to the most directly comparable GAAP financial measures are included in our presentation materials and in our earnings release. 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, October twenty-fifth, and the webcast link will be posted to the About Us investor relations section of our corporate website. I will now turn the call over to Vince Delie, Chairman, President, and CEO. Thank you, and welcome to our third quarter earnings call. Joining me today are Vince Calabrese, our Chief Financial Officer, and Gary Guerreri, our Chief Credit Officer. FNB reported third quarter operating net income available to common shareholders of $122 million, or $0.34 per diluted common share, after adjusting for $15 million of significant items impacting earnings. The third quarter's results demonstrate our ability to produce quality loans and significant deposits throughout our footprint, while maintaining stable non-interest-bearing deposit balances at approximately $10 billion. We generated linked quarter revenue growth, strengthened our balance sheet with the record CET1 ratio of 10.4%, and drove shareholder value with tangible book value growth of 15% year over year, and an operating return on average tangible common equity of 14%. We are also particularly proud of our ability to gain market share in a number of MSAs across our footprint and achieved a number two traditional retail deposit share position in Pittsburgh, despite competition from some of the nation's largest banks. In this environment, it is important we continue to manage our capital and liquidity position. During the quarter, FNB completed a $431 million indirect auto loan sale, allowing us to remove lower yielding assets from our balance sheet with minimal impact to forward earnings, while improving capital and loan-to-deposit ratio. Vince Calabrese will provide the details about the sale during his remarks. Total loans ended the quarter at nearly $33.7 billion, a 4.6% annualized linked quarter increase when excluding the loan sale. FNB's loan growth has once again exceeded the published HH data as we continue to gain market share, which can be attributed to our business model and its emphasis on a diverse and attractive footprint, as well as ample capital and liquidity to support our clients. Total deposits ended the quarter at $36.8 billion, an increase of 5.1%, or $1.8 billion from the second quarter, benefiting from new production that was generated through successful deposit initiatives as well as seasonal deposit inflows. Our strong sequential deposit growth highlights the successful efforts of our commercial and business bankers to establish and deepen client relationships. We also have leveraged our digital and data analytics capabilities to effectively market and capture deposits from new and existing retail households through data-driven lead generation. We made strides in consumer and small business deposits through our omni-channel clicks-to-bricks environment, leveraging our diversified geographic branch footprint and award-winning eStore Common App. Our loan-to-deposit ratio improved significantly to 91.7%, a decrease of nearly five percentage points from last quarter. This linked quarter change demonstrates our ability to execute strategies to manage the loan-to-deposit ratio when needed. In the third quarter alone, FNB generated nearly $1.8 billion of deposits, completed a loan sale, and supported $391 million of loan growth. We will continue to manage the loan-to-deposit ratio through our long-term strategy of being our customers' primary operating bank across both the consumer and commercial portfolios, aided by our advanced digital tools, clicks-to-bricks strategy, and product bundling capabilities. This quarter's total revenue growth of 2.3% was driven by an all-time high non-interest income of $90 million and stronger net interest income levels. We will further advance our strategy of diversifying revenue streams and leveraging ongoing investments, including a focus on expanding business lines in our capital markets segment. Operating non-interest expense totaled $234 million, driven by higher salaries and benefits, partially associated with strategic hiring necessary to grow market share and our continued investment in our risk management infrastructure. We strategically increased marketing expenses $2 million to support deposit initiatives that led to our robust deposit growth. Expense management remains a high priority, and we expect fourth quarter expenses to be down sequentially. Our ongoing expense management in growing diverse revenue streams led to a peer-leading efficiency ratio of 55.2% in the third quarter. Another area of ongoing focus is maintaining consistent and conservative underwriting guidelines, enabling us to continuously serve our customers. Over the last decade, our credit team has built a comprehensive framework to effectively and proactively manage credit risk in concentrations through various economic cycles. This long-standing approach to credit risk management continues to serve us well. With that, I will now pass the call to Gary to review the overall credit performance. Gary? Thank you, Vince, and good morning, everyone. We ended the quarter with our asset quality metrics remaining at stable levels. Total delinquency finished the quarter up slightly at 79 basis points, or 15 basis points from the prior quarter, with NPLs and OREO ending at 39 basis points, up 6 basis points. Net charge-offs totaled 25 basis points and 17 basis points on a year-to-date basis, reflecting solid performance in the current economic environment. Criticized loans were down 22 basis points on a linked quarter basis, reflecting improvement across the portfolio. Total funded provision expense for the quarter stood at $22.9 million and covered charge-off. Our ending funded reserve stands at $420 million, an increase of $1.4 million, ending at 1.25%, up 1 basis point from the prior quarter. When including acquired unamortized loan discounts, our reserve stands at 1.34%, and our NPL coverage position remains strong at 352%, inclusive of the discounts. The non-owner CRE portfolio credit metrics continue to remain at satisfactory levels, with delinquency and NPLs up slightly at 69 and 31 basis points, respectively. The early-stage delinquency increase was primarily related to several performing credits that had matured and were in documentation, a number of which were renewed in the normal course of business after quarter end and are now current. The NPL increase was driven by one credit that was placed on non-accrual status. We remain committed to our strategy of proactively managing and reducing the non-owner CRE exposure, as reflected on page 11 of the earnings slide deck. On a monthly basis, we review upcoming and previously resolved maturities, largest exposures, and market conditions for the various property types across our footprint, as we have communicated in the past. As Vince mentioned, we believe our proactive approach to credit risk management allows us to quickly engage our experienced special assets team when necessary, working with our customers to minimize any potential losses. On a quarterly basis, we perform targeted reviews of various portfolios along with a full portfolio stress test. Our stress testing results for this quarter have once again shown lower net charge-offs and stable provision compared to the prior quarter's results, with our current ACL covering approximately 90% of our projected charge-offs in a severe economic downturn. Again, confirming that our well-balanced loan portfolio enables us to withstand various stressed economic scenarios. In closing, our credit metrics ended the quarter at solid levels, and our loan portfolio continues to remain stable. We continue to invest in credit risk management systems and staff that align with our consistent underwriting and core credit philosophy. Our tenured leadership strives to maintain experienced banking teams to enable the company to attain prudent loan growth while proactively managing credit risk through various economic cycles. I will now turn the call over to Vince Calabrese, our Chief Financial Officer, for his remarks. Thanks, Gary, and good morning. Today, I will focus on the third quarter's financial results, including details on the indirect auto loan sale, and walk through our guidance for the fourth quarter. Third quarter operating net income totaled $122 million to 34 cents per share, when excluding the $11.6 million loss on the indirect auto loan sale and $3.7 million software impairment. $431 million of performing lower-yielding indirect auto loans were sold as part of our ongoing balance sheet management strategies. The loan sale positively impacted the loan-to-deposit ratio by approximately 120 basis points, and the CET1 capital ratio by approximately 10 basis points. Excluding the loan sale, total loans and leases increased $391.4 million, or 1.2% linked quarter, to a period end balance of $33.7 billion. Consumer loan growth of $299 million, excluding the loan sale, was led by residential mortgage originations, as volumes remained elevated given the pullback in mortgage rates during the third quarter. Commercial loans and leases grew $93 million linked quarter, in line with our expectations, given the significant level of commercial loan closes in the second quarter and reflective of lower revolver balance. Total deposits ended September at $36.8 billion, a robust increase of $1.8 billion, or 5% linked quarter, benefiting from our successful deposit initiatives, which demonstrate the value of our granular deposit base across a very attractive geographic footprint. Third quarter deposit growth was led by a $1.3 billion increase in interest-bearing demand deposits and $783 million increase in time deposits. The mix of non-interest-bearing deposits to total deposits totaled 27% at quarter end, compared to 29% last quarter, reflecting the strong interest-bearing deposit growth and non-interest-bearing deposit balances remaining fairly stable around $10 billion. Last quarter, I discussed our goal to reduce our loan-to-deposit ratio organically through slower loan growth and deposit seasonality, alongside several loan and deposit initiatives our team has implemented. Success of our ongoing balance sheet management and deposit gathering initiatives led to a loan-to-deposit ratio of 91.7% September thirtieth, nearly a five percentage point improvement from 96.5% at June thirtieth. We expect the loan-to-deposit ratio to be relatively stable in the fourth quarter as deposit growth continues to be a strategic focus. Net interest income totaled $323.3 million, an increase of $7.4 million, or 2.4% from the prior quarter, primarily due to earning asset yields increasing eight basis points to 5.51% and higher loan balances, as well as a favorable mix shift in interest-bearing liabilities as total borrowings decreased $1.6 billion to 28% linked quarter. This was partially offset by the cost of interest-bearing deposits increasing fifteen basis points to 3.08%, and continued growth in higher yielding deposit product balances. Third quarter's resulting net interest margin was 3.08%, stable with the second quarter margin. Since the Fed began raising interest rates in March of 2022, our total cumulative spot deposit beta equaled 40% at August 31st, 2024, outperforming our peers through the rate hiking cycle. We continue to manage our balance sheet towards a more neutral position as interest rates are lowered. Since the Fed's decision to reduce the federal funds rate by fifty basis points in September, we have strategically lowered deposit pricing on several deposit products, including our current CD and money market promotional offerings. At quarter end, we have nearly $7 billion of non-maturity deposits that are currently priced at or above 4.25%, and a $7.7 billion CD portfolio with a nine-month duration and $2.9 billion maturing in the fourth quarter of 2024, at a weighted average rate of 4.75%. Additionally, we have $2.8 billion of short-term or floating rate borrowings, with an average rate of 5.15% and around $1 billion of swaps that mature beginning in January of 2025, with rates between 75 and 100 basis points. Turning to non-interest income and expense. Non-interest income reached an all-time high of $89.7 million, a 2% increase from the prior quarter. Capital markets income increased $1.1 million, with broad-based contributions from syndications, net capital markets, customer swap activity, and international banking. Mortgage banking operations income decreased $1.4 million from the strong levels in the prior quarter, driven by net MSR impairment of $2.8 million in the third quarter of 2024 due to accelerating prepayment speed assumptions, given recent declines in mortgage rates, offsetting the increase in saleable production volumes. Total income increased $3.1 million, reflecting higher life insurance claims. Operating non-interest expense totaled $234.2 million, an $8.4 million increase from the prior quarter after adjusting for the significant items. The largest driver for operating expense was a $5.1 million increase in salaries and employee benefits due to production-related variable compensation and lower salary deferrals, given reduced on-balance sheet mortgage production, as well as strategic hiring associated with our focus to grow market share and continued investments in our risk management infrastructure. Marketing expense increased $2 million, tied to the timing of opportunistic marketing campaigns for successful deposit initiatives. We continue to manage our expense base in a disciplined manner, and as we prepare our 2025 budget, we are working on a number of cost-saving initiatives to bring revenue and expense growth into better balance. With some of the incremental expense growth tied to revenue growth, the efficiency ratio remains at a peer-leading level of 55.2% for the third quarter, up slightly from 54.4% last quarter. FNB's capital levels reached all-time highs, with a tangible common equity ratio at 8.2% and CET1 ratio at 10.4%, providing flexibility to deploy capital to increase shareholder value. On a year-over-year basis, tangible book value per common share increased to $10.31, or 15% to $10.33, demonstrating our commitment to internal capital generation.... Let's now look at the guidance for the fourth quarter of 2024. Loans are expected to grow mid-single digits on a full year basis, inclusive of the loan sale. Total projected deposit balances are expected to grow mid-single digits on a year-over-year basis, up from the previous expectation of low single digits. Our projected fourth quarter net interest income is expected to be between $310 million and $320 million, assuming a 25 basis points rate cut in November and another 25 basis points rate cut in December. Given the continued strength of our non-interest income generation, the fourth quarter expectation is between $85 million and $90 million. We anticipate fourth quarter non-interest expense to be lower than the third quarter level, and we're guiding to a range of $225 million to $235 million. Fourth quarter provision is expected to be between $20 million and $30 million, dependent on net loan growth and charge-off activity. Lastly, the full-year effective tax rate should be between 21% and 22%, which does not assume any Investment Tax Credit activity that may occur. As we have previously mentioned, renewable energy financing transactions are part of our leasing company business model, with deals in various stages and sizes in the pipeline, with uncertainty on when the recognition of the Investment Tax Credit will occur. With that, I will turn the call back to Vince. Thank you, Vince. FNB's success includes the deep relationships we build within our communities. On behalf of FNB, I want to offer our support to those impacted by Hurricane Helene and Milton, including our fellow team members, customers, and neighbors. FNB continues to work with partners in the affected area to support recovery and healing in the coming days, weeks, and months. We encourage our customers who are directly impacted by the hurricanes to reach out if they require assistance. FNB's strong reputation is evident in the top deposit share we hold in markets throughout our footprint. We deepened our penetration as we grew or maintained deposits in nearly 90% of our MSAs over the past year, with FNB now ranking in the top five in nearly 50% of the MSAs we operate in across seven states. Our performance once again garnered recognition with additional national and regional awards this quarter for our workplace culture, diversity and inclusion, and client experience. Notably, we received global recognition as one of Time's World's Best Companies, Newsweek's designation as one of America's Most Admired Workplaces, and Global Finance Magazine's Best Bank for Small and Medium-Sized Enterprises in the Mid-Atlantic. Our performance also conveys the quality of our workforce. We focus on hiring and retaining the most talented and experienced individuals. Our investment in our workforce enables us to scale effectively. In fact, 90% of our senior management team has larger institution and/or public accounting experience and bring a wealth of knowledge to our risk management, operation, and revenue-generating areas. As I have often stated on these calls, the high caliber of our employees translates directly to stakeholder value. FNB's successful navigation through various economic cycles is directly correlated to our diverse and experienced team. Their ability to effectively grow revenue, mitigate risk, optimize our balance sheet, and execute on our proven strategies results in our ongoing success. I thank our teams for their dedication and our shareholders for their support. Thank you, and we will now open the call up for questions. We will now begin the question-and-answer session. To ask a question, you may press Star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Frank Schiraldi with Piper Sandler. Please go ahead. Thanks. Good morning. You know, obviously, always a good time to be bringing in core deposits, but could you just talk about, you know, the average rate you're seeing on these inflows? And Vince, you mentioned, you know, moving towards a neutral, a more neutral interest rate position. Wouldn't all this growth on the deposit side work against that a bit, at least in the near term? Yeah, I would say a couple of things. You know, as we said last quarter, you know, we had significant growth in short-term borrowings, you know, to fund this very strong loan growth that we had in the second quarter. So the goal was to bring in meaningful deposits, and we did. I mean, we brought in $1 billion of new money. In total, it was $1.008 billion, $1 billion in new money, around 4.25%, that rate. And the nature of those deposits are very short term, combination of money market and very short-term CDs, five-month CDs. So, you know, we have a lot of flexibility as we move forward to, you know, to reduce the rates on the liabilities we brought in. I think it positions us well from a loan-to-deposit ratio. You know, we were in the 96s. You know, our goal was to bring it down, and we brought it down meaningfully to 91.7%. And if you look at kind of the balance sheet as a whole, as we sit here at the end of the quarter, you know, we have $11 billion of liabilities that are repriceable today, subject to market forces, of course, but $11 billion. And we have another $5.4 billion in CDs that mature in the next six months. ... 2.9 of that in the next three months at a 4.75 rate. And then we have $1 billion in cash flows from the investment portfolio, you know, that kind of rolls off around 2.91, and today we're investing between 4.25 and 4.50. So there's a lot of levers, obviously, there that help us reprice. With the Fed moving 50 basis points in September, you know, kind of bigger than than maybe what was expected, you know, that has an impact on our loan portfolio over a three-month period. So, you know, we'll be kind of playing some catch up there, but we have levers here that can kind of offset that. And, you know, our team is very well positioned, and we've already started to bring interest rates down. I don't know, we've brought rates down 50 basis points on our CD offer and a variety of different deposit class categories. We've started to bring rates down and kind of ready to continue to bring rates down. So, I said a lot there, but, you know, we feel that we have the levers positioned well moving forward so that we can kind of adjust as rates move down. Great. Okay. And then, you know, your, your—I think, FNB was a bank that was pretty conservative in your expectations of deposit beta on the way down, at least in the, you know, the first few rate cuts. I just wondered, now that we've seen that 50 basis points, you mentioned you've already cut, you have cut some deposit rates. Any updated thoughts on what a, sort of, early deposit beta could look like, you know, for these, for these first, few cuts, through the end of the year? Yeah, I would say, you know, our guidance has obviously the 50 plus two more 25 basis point cuts kind of baked into that. You know, what our guidance implies is like a 15% beta by the end of this year. You know, I'd like to think we can do better than that. So we're all, everybody's geared up to be able to adjust prices. A lot of our competitors have been lowering rates so that there's, you know, there's an ability to do that. So kind of what's baked in is 15%, and, you know, our goal would be to, to do better than that by the end of the year. Okay. And then just lastly, on the indirect auto sale, you know, just kind of thoughts on additional opportunities on the balance sheet here. Was any of this, you know, kind of moving the credit box a little bit? Or, and, you know, at this point, are you looking to just exit this business, given the yields? Yeah, we're not looking to exit the business. We saw an opportunity for us to move some low-yielding assets off the balance sheet. It was not a credit play. It was more about managing the overall balance sheet, and particularly, in particular, our loan-to-deposit ratio. We looked at it, you know, basically with our ability to generate deposits and coupled with the sale of those loans, you know, we were able to bring it down fairly substantially. You know, there were some questions in the last earnings call about our ability to do that and our ability to grow deposits in this competitive environment. I think we proved that we're capable of doing those two things. I would say that, you know, in the normal course of business, in that indirect auto portfolio, there will be loan sales from time to time. We've always used it as kind of a way to manage the balance sheet and manage our loan to deposit ratio. You know, we've done it a number of times. But we retain the servicing, so we're still maintaining the clients. You know, we do use the information on those clients to try to cross-sell other services to them. So, you know, that works pretty well for us. But it's not. It was not a credit play. It's a very short-term asset. I mean, two-year life to it. So from an income statement standpoint, given the loans we paid off, there's really no impact on a go-forward basis, and it added capital. One ratio, we picked up 10 basis points, and just that alone added 100 or reduced the loan-to-deposit ratio by 120 basis points. So it's attractive. It's an attractive transaction and, you know, it helps with capital and essentially puts us in a much better position to support our clients. I, you know, I think, you know, loan demand will pick up. It just based on the earnings calls that I've listened to and read about, it seems that credit is more benign than folks would have thought, and, you know, the economic environment's a little better. I think there's a lot of wait and see right now. You know, once we get past the election, I do think irrespective of who wins, there'll be demand in the C&I book in particular. So we want to be positioned to take advantage of that. I think, Frank, the other thing is, you know, on display here, you know, over the course of the past year and during this last quarter, you know, great financial institutions are able to fund themselves, and they're able to generate deposit balances. We've talked about our business model. We've talked about leveraging data analytics, and, you know, how we're positioned in the markets and the prominence that we have in the markets, our share in the markets. There have been a lot of, there's been a lot of talk among some of the larger bank CEOs about the inability for, you know, mid-sized and regional banks to gain share. We've proven that wrong. Our business model works. We've grown share. If you look at Pittsburgh, I mentioned it, you know, we passed up the legacy, you know, Mellon Bank franchise here with deposit share. So, you know, just in the last term, and that's – those are real customer deposits. So, you know, we're doing very well in regard to acquiring names. We're doing well at becoming the primary client, which is why our demand deposit balances have been sustained at around $10 billion. You know, others have seen migration in a much faster pace. All the things we've said that are embedded in our business model have proved out in this quarter. So I just want to emphasize that, and, you know, I know we've said it over and over again. I think the proof is in the results. All right. Great. I appreciate all the color. Thank you. Thank you, Frank. Thanks, Frank. The next question comes from Russell Gunther with Stephens. Please go ahead. Hey, good morning, guys. I was hoping to start on- Good morning. Morning, guys. On expenses. If you could just revisit 3Q results for a minute, what the drivers were that took you guys to the high end of the prior guide, and then provide some color around the bracket for 4Q. Is that simply tethered to fees, or what could keep you towards the higher end of that range? Sure. Expenses on an operating basis for the quarter, as you know, came in at $234 million. The guidance range we provided in July was two twenty to two thirty. You know, the key drivers to that were a couple of things. $2 million increase in marketing, you know, which we decided to do to grow the $1.08 billion in deposits. So that was something that we obviously, it was a strategic decision, spend some more money on marketing, bring in the deposits, and it worked very well. And then $5 million increase in comp benefits. That was driven by a few things. You know, higher production-related incentives, the success we've been having on the, the non-interest income side, you know, there's commissions related to that, the deposit raising and the fee income. You know, we mentioned in the release, opportunistically hiring some producers in some key markets for us and investing in risk management staff just to support our continued growth. Then just for fun, we had an extra work day in the third quarter. It was another $1 million. Those were kind of the drivers, kind of to get us up a little bit above the range, but if you look at the efficiency ratio, you know, we continue to post top quartile results. In the last quarter, we were 54.4, which we were the third best among our 21 bank peer group. You know, this quarter is 55.2, and I think we'll compare well again. And then as you go ahead to the fourth quarter, so we're using a range of 225-235, you know, up $5 million from the prior guidance, but. And it's a few things, continued variable compensation, supported the strong non-interest income. You know, seasonally slower loan production, it affects the FAS 91 cost deferrals would be lower. FDIC insurance levels kind of staying at a higher level, and then the impact of the hiring. But if you step back overall, the absolute level in the fourth quarter, we expect it to be down from the third quarter, which is key. Yeah. Okay. That's a great color, Vince. I appreciate it. And then maybe just looking forward or taking that conversation forward, you guys remarked about bringing revenue and expense growth into balance. So as we look to 2025, is positive operating leverage something you guys expect to be able to deliver, or do we really need to see a Fed easing cycle end and deposit costs catch up to drive the efficiency you know more meaningfully lower and deliver positive operating leverage for 2025? No, I would say it's obviously getting to a more positively sloped yield curve, you know, later next year would make a difference, so I think having it for some portion of 2025 versus 2024 is definitely achievable, but I think having that yield curve will be kind of a key driver to getting us there. Yeah, having an appropriate slope in the curve drives, you know, our, if you look at our balance sheet and how we're positioned, you know, we perform extraordinarily well in that environment, so that is key to our success, obviously. We're no different than other, you know, banks, but, you know, if you look, that's the ultimate scenario for us in terms of profitability, so hopefully, you know, we see some adjustments on the short end of the curve that, you know, gets the slope of the curve in the appropriate position for us to benefit. Yeah, and that'll drive meaningfully higher net interest income and net interest margin as you move forward and get to that point. Got it. Okay, understood. And then just last one for me. You guys reiterated a mid-single-digit growth guide for the year. You know, as you guys look forward, is there any optimism for being able to accelerate that pace? Or are we, should we be thinking about headwinds like pay downs or potential additional portfolio exits that would keep you guys at a mid-single digit clip? I don't think we're in a position right now. We haven't, you know, given guidance for next year, but, you know, I would look back historically. I think, you know, we've done a very good job over a long period of time. I've been here for almost fourteen years in this seat, nineteen years overall. I think we've grown loans and deposits just about every year I've been here, maybe the pandemic, maybe there was a time when loans didn't grow one quarter. But, you know, we've put up pretty consistent organic loan growth. You know, it's in the mid to high single digits, irrespective of the size of the balance sheet over time. And, you know, as we've grown the balance sheet, we've shifted our strategy to move into markets that would provide us with opportunities, right? So we could sustain our growth trajectory, irrespective of the size of the balance sheet. So I think that's played out over time. So I'm, you know, I can't say I'm optimistic because there's so much uncertainty right about next year, but I do believe that we're in the best position of anyone to generate that loan growth once the market comes back, so, you know, demand picks up... in a way that is a growth scenario, let's put it that way. Yep. No, understood. Guys, thank you very much for taking my question. Yep. Thank you. The next question comes from Timur Braziler with Wells Fargo. Please go ahead. Hi, good morning. Circling back on the deposit acquisition strategy, just looking at the new money cost this quarter at 4.25%, I mean, that's still dilutive to the overall rate. I'm just wondering, as we look into 4Q and ahead, just the composition of the deposit growth and, you know, the fifty basis points reduction in CDs, is that off of that 4.25% level, or is new money acquisition still north of 4% here? Yeah, I don't think we're going to get into specific strategies around how we price so that our competitors don't, you know, listen in, but I will tell you that, you know, you, you've got to look at it in total. While that is the new money rate coming in, that's basically on the money market. That's money market and five months of each, so it's very short. CDs in the money market that are driving that. There is a component of demand deposit. You know, there's runoff now or shift in mix, but we are bringing in primary clients, so we do have operating accounts as well that have the free balances. So, you know, I would expect us to be able to, you know, benefit as we move along. And then I also would note, you know, based upon your comment, that it's not accretive. It actually, you know, we replaced short-term borrowings that were at a much higher rate. They were 5%, so it actually was beneficial. So the way I look at it, you know, Scott and I go back and forth, depending on the interest rate environment. Scott's our treasurer. You know, I basically say, "Hey, I'd rather have clients, right, new clients, than rely on wholesale funding or some other source of funding that's institutional in nature." So this trade was actually a very good trade for our shareholders. Yeah, bringing loan to deposit ratio down as much as it did, gives us the flexibility to be able to actively reprice the rest of the portfolio. So there's- I'm going to say it again, you know, because in the context of the competitive environment we're in, we are not outsized from a pricing standpoint relative to our competitors. So our business model is working, and we are driving share in the market in a way that is accretive to our margin and our profitability. So, over time, you know, having new clients, we have the flexibility to price according to, you know, changes in the market. So, you know, it ultimately leads to higher profitability on a per client basis as well. Anyway, that's the strategy behind what we accomplished. Yeah, I would just add one last thing, too, is we have a meaningful pipeline on the commercial side of additional deposit accounts that we're going after and pursuing. You know, we've had great success in the past quarter, and there's still a very meaningful amount that we're going after to bring into the relationships. Okay, thank you. That's, that's great color there. And then just maybe again, circling back to the, to the auto sale, or indirect auto loan sale, just any kind of underlying characteristics of the loans sold? I guess, how did you choose which portions of that portfolio were divested this quarter? I'll let Gary answer that question because that actually reports up through Gary. Yeah, Timur, it is just across the board sample of current transactions in the portfolio. That portfolio sale did not include any account that was past due, so it was high FICO, high quality paper with an average life of two years. Okay, great and then just lastly for me, there's been some growing speculation of Mid-Atlantic M&A, your name kind of into the mix. Just would love to get an update as to what your thoughts are around capital deployment going forward and where M&A might fit into that mix. Yeah, we haven't changed our position. You know, we've indicated in the past that, you know, we are not looking to dilute tangible book value in a material way. I don't think that, you know, I don't want to comment on specific transactions, but, you know, we're still focused on doing deals in market, you know, smaller in size, if that was even available to us. We're being opportunistic in terms of what's out there. So in-market acquisitions with cost saves are on the list. The deals would have to be immediately accretive to earnings with limited tangible book value dilution, as I've said. You know, and then the return has to be well above our cost of capital. So, you know, I don't think we've deviated at all. You know, there are a lot of rumblings out there, but, you know, we're going to stay true to our strategy. I think it's you know, we've done well over the last few years, focusing on tangible book value, accretion, and returns, and, you know, that's going to be our focus as we move forward. Great. Thanks for all that color. Yep. Thank you. The next question comes from Daniel Tamayo with Raymond James. Please go ahead. Thank you. Good morning, guys. Maybe just starting on the Q4 guidance for NII for net interest income. Just some clarification, just trying to get a sense for what the margin compression could look like to fit into your guidance. I mean, is there on the balance sheet side, is there something that was in the third quarter in terms of the pace of growth that would impact the average balances in the fourth quarter? Is that something where you could see that number come down? Just trying to think about right-sizing, how to get to the margin number. Yeah, I think it goes back to what I said earlier, Danny, about the kind of implied beta that's in there, right? So the Fed moved 50 in September, and you only had a partial month impact of that, so you'll have the full quarter's impact of that. And then there's two more 25s. So, you know, I think there's some conservatism in our NII guide, but we're using a 15% beta by the end of the year. If we can do better than that, then there's upside to that. We don't have any other portfolio exits or anything like that teed up as we sit here today, so it'll just be kind of normal activity. But fourth quarter, like Vince said earlier, is there's some seasonality to some slower activity, and then you have the uncertainty with the election and everything. So, no, there's still some level. Our mid-single-digit guidance on the loan side is still, you know, the same guidance that we've given. So there's nothing unusual. It's just us managing the rates down we get between now and the end of the year. Okay, understood. So the average earning assets likely increase in the fourth quarter, and it's a margin issue in the fourth quarter before we start to see that stabilize at some point next year. Is that fair? Yeah, and I would just say that I would characterize the margin as flattish. I mean, if it's down, it's down a few basis points, not a lot. So just a starting comment. Okay. All right. That's helpful. Thanks. And then maybe one for Gary on the credit environment, specifically just net charge-offs environment. Obviously, you got volatility a little bit higher in the third quarter, but just interested in your current thoughts around, you know, how you think about what might be a good run rate for net charge-offs for the bank as you think about the next, you know, the near term. You know, Daniel, I think that, you know, we're very aggressive from a risk management standpoint and staying ahead of our clients with information flow and understanding, you know, their position and the risks in the portfolio. We've continued to perform exceptionally well from a risk management and a charge-off perspective. And, you know, all the credit metrics have been at or near record low levels for quite some time now. You know, this quarter, we were at twenty-five basis points. On a year-to-date basis, seventeen basis points, which is, you know, really, really strong result in this, you know, environment, which continues to be a bit uncertain. And as we all know, the CRE environment is surely continuing to see some stress here and there. So, you know, I would expect continued performance as we have put up over the last number of years. And, you know, is it going to edge up a touch? I mean, it may normalize, but I feel very good about, you know, where we sit, and as we look ahead, continuing to outperform, you know, from the industry's perspective. You know, Gary and his team have done a fantastic job of making sure that the risk ratings are current. So he mentioned gathering the information. I think that, you know, where we stand today is, you know, where we're going to stand tomorrow, basically, with the exception of any major shifts in the global economic environment. So, you know, we're not going to be sitting here with surprises, let's put it that way. We do a pretty thorough job of underwriting and assessing risk ratings on a frequent basis, stress testing, and evaluating risk. So, you know, what you see is what you get. And I think that's been true for a very long time for us, and Gary has done a fantastic job, so keeping us there. All right. Terrific. Thanks for all that, guys. All right. Thank you. The next question comes from Kelly Motta with KBW. Please go ahead. Good morning. Thank you so much for the question. I hate to beat a dead horse, but I just want to button up a few more things on the margin. On the prepared commentary about the 15% beta by the end of the year, just a point of clarification, wondering if that's interest-bearing or total deposit beta, one. And then two, I know you haven't, you know, done the budget for next year, but just from a high level, wondering how you anticipate, you know, deposit betas on the way down more broadly as we look ahead past this next quarter. Yeah, the, the fifteen, Kelly, is total deposit beta by the end of the year. And, you know, we've talked about historically kind of a mid-thirties level, on the down, kind of, you know, we have some statistics we've looked at from the past cycle. So that's kind of what's in our head. So I don't know, by the end of next year, it could be around thirty-ish, I would say, kind of as a level, total. Again, total deposit beta, you know, by the end of next year is kind of what's in our heads at this point. Got it. That's very helpful. And then on the loan side of things, just wondering what you're seeing in your markets in terms of how spreads might be holding up for commercial loans, and if you're seeing any differences between how that's performing in the Carolina markets versus some of your more legacy Mid-Atlantic markets? ... Yeah, surprisingly, it's fairly consistent across the board, and you would expect it to be different regionally, as your question implies, but it has been fairly consistent. I think, you know, with capital exiting the CRE space, there's a little more pricing flexibility in that bucket. You know, if you find a high-quality CRE opportunity, you're able to get a little more margin out of it today. That's a function of, you know, banks pulling back and financial non-banks pulling back as well. So, you know, I would say there's not a lot of demand from a C&I perspective, kind of across the board right now. Everything's on hold. I would expect that to change as we move into next year. I don't have a crystal ball, but you know, my gut and thirty years of experience tells me that there's quite a bit being held back. So I would suspect that you know, moving into next year, we'll be able to see you know, a higher level of demand, particularly for the C&I. You know, I expect that to happen. And then on the consumer side, you know, consumer home equity and direct installment's been pretty benign. You know, I would expect that to pick up a little bit as well. And our mortgage company has done you know, a remarkable job of gaining share pretty much across the board. So you know, we would continue to, I hope, continue to succeed there. I don't know if that answers your question, but it it- Yep. It's pretty, pretty much the same. You know, the margins are the same based upon the risk profile, pretty much across the board. That's interesting. Thank you. That's very helpful. And then on the expense side, again, I know it's too early to start talking about next year, but one thing you have talked about is the double carry of the rent expense with the build-out of the new headquarters. Just wondering the timing of that, if that's still kind of on track to, I think it was about $7 million come out of next year as you move over to the new space. Yeah, I don't know that it's actually seven million, but it. You know, the building's on track. We're scheduled to move in on November twenty-fifth, I think is the date. I think we picked the worst possible week, you know, Thanksgiving. I don't know what it is, but, you know, that's when we'll all be moving over there. You know, we'll have nearly eight hundred employees moving into one location. You know, we're in seven buildings here on the North Side of Pittsburgh. We're scattered all over the place. It's you know, I think we'll eke out efficiency just by being together in productivity. You know, our people are in the office pretty much, so I think that will help us immensely. You know, that rent that we talked about, you know, that's basically because we had a year of free rent, right? So that gets built, baked into the total length of the lease, gets carried out over the lease according to GAAP accounting, and we still have rent expense in this building. So that's, that's why that's occurring, if you've forgotten. So I would expect that to come back. You know, a portion of that $7 million, it's not the total amount, but a portion of it will, will be coming back next year. Now, there might be demand for additional space. It's going to be hard to see. You know, it I can't lay that out apples to apples, but theoretically, yes, we should be receiving, you know, a benefit from a GAAP accounting perspective. Because the other rent's non-cash. Got it. It's free rent. Okay, that's helpful. That's helpful. I appreciate all the color. I'll step back. Thank you. Thank you, Kelly. The next question comes from Manuel Navas with D.A. Davidson and Company. Please go ahead. Excuse me, Mr. Navas, your line is open. Is your phone muted accidentally? Okay, we'll go to the next questioner then. The next questioner is Brian Martin with Janney Montgomery Scott. Please go ahead. Hey, good morning, guys. Hey, Brian. Hey, Brian. Hey, just one question, you know, just on going back to the deposits for a minute, Vince, and the success this quarter. You know, the DDA did come down a bit, and I know you guys have talked about, you know, kind of being the primary and you know bank for your customers, and then also the new commercial, Vince, you talked about that you see opportunities on. I mean, does that... I guess, is your expectation that that stabilization in that level is still, you know, kind of a way to think about, you know, the DDAs you kind of look at, you know, the next couple of quarters here at that 27% level, or do you see it drifting lower from where it's at today? Yeah, the mix moved down. Obviously, we're in a period where you see some outflows in the demand deposit category, plus we've brought on a lot of new money. Right. So yeah, it's been a shift, but, you know, we've been running at around $10 billion pretty consistently. So you know, you saw it as rates went up, you know, we were able to maintain that. I believe as rates come down, you know, we should be able to maintain it and grow it over time. So, you know, I can't speak to the overall. If you look at the total deposits and you look at demand deposits as a percentage of the total, sure, it's going to be smaller, but, you know, that $10 billion in non-interest-bearing deposits has really been beneficial to us. And if you look at our cost of funds overall and compare it to peers, you know, we can match up pretty well. But that's the main reason. I would say, you know, we have opportunities to grow the non-interest-bearing category because as customers grow and we brought new clients on, and we're able to stand up all the treasury management services and the use balances to pay for services where they're disbursing funds out of operating accounts that we have, we'll have a pick up in demand deposits over time. But there's still, you know, it's a very difficult environment to maintain demand deposits because anybody that has excess balances is looking to get a higher yield, right? Because of what they can get versus where we were during the pandemic when, you know, everything was close to zero, right? There's nowhere to go. So but I think we've done well, and I would expect us to continue to do well in that category. Yeah, plus, we brought in a lot of- go ahead. I was gonna say, Brian, we also saw about a 1% reduction in revolver balances, which also is going to impact DDA balances. Right. Moving from the DDA to pay down some debt, as customers, you know, being cautious during these times with everything that's going on and the election on top of us, did make some decisions to pay down some revolver balances. So there's a slight impact there as well. Good point, Gary. I'm just gonna add, you know, we've added a lot of new names, Brian, too, on the retail side with new households, plus new commercial clients that, you know, once we have them, there's an opportunity to run those relationships, and that's been a focus over time, really, to be the full bank for our customers. Yeah, gotcha. Okay, all makes sense. And then just in terms of, Vince, I think you came optimistic, at least on the loan growth next year. I guess just nothing immediate, you know, from the first rate cut that we saw, which is, like you said, a bit more than maybe people thought. Any pickup in, you know, just dialogue with your customers, kind of getting the sense that, you know, there is that optimism for next year on the loan growth side? And I know you guys will give more color next quarter, but it seems like, you know, a handful of people, you know, other banks have said that first rate cut really dispersed some new interest from their customers, and I, I didn't sound like you were getting that sense yet. Maybe, you know, the election and getting past a few things there. Yeah, I'm not as close to the customers as I used to be, but, you know, I'm interacting with the bankers and talking to some of the clients. I'm not seeing that yet. To be honest, I think it's still kind of let's wait and see, and, you know, they're expecting additional cuts, so, you know, there may be dialogue, but, you know, they're thinking: "Hey, I'm gonna get a much better opportunity down the road here," because everybody's signaling that there will be additional rate cuts, right? So, I'm not seeing, you know, everyone, you know, leaping forward and saying, "I'm gonna take advantage of this fifty basis point reduction." I think they're kind of sitting back and saying, "Hey, let's see how the election plays out," but, you know, a lot of things can happen. Post-election, corporate taxes are on the table. All kinds of things that impact our clients are on the table. So they're gonna sit back and say, "Hey, I want to wait and see what's happening." And that's kind of what I'm hearing and seeing. You know, and again, I don't have as much insight as maybe... I don't know, Gary, do you have any? Yes, I would agree with everything that you said. That's kind of the way it feels right at the moment. I would expect, based on, you know, this period where we are here, pre-election, that once we get into twenty twenty-five and the middle part of the year, when things start getting quite active, that we'll see some stronger demand there. I've been out the last few months, Brian. I mean, I've been in Winston-Salem. I've been all over the place. Winston-Salem, I've been, you know, in Ohio, around Pennsylvania, so I'm hearing the same thing. I'm not hearing anything different. Yeah. But again, I don't have the full picture. I mean, I might be getting biased information on it. Yeah, and maybe just one on the margin. It sounds like maybe just Vince can remind us what the, you know, immediate. I think you went through some of the stuff, the reprices, but the immediate on the loan side, what reprices? And then it just sounds as though secondarily, the, you know, I guess if you maybe the expectation is to see a little bit of pressure here on the margin, you know, modest in the fourth quarter. And then, you know, if you are neutral, I guess the expectation is you can, you know, kind of, you know, you keep the margin relatively stable, and then as you get into next year, and if you get the yield curve steepening, you get some pick up later in the year. Is that just in general, how to think about that? Yeah, I think you said it perfectly, Brian. I would just go with that, but to your initial question, you know, slide 15 does a good job laying out the moving parts. Just to remind everybody that, you know, there's 47.5% you'd see in the chart there of the $33.7 billion, that reprices on the loan side over a three-month period, and as I mentioned earlier, if you look at, you know, the levers that we have, we have $11 billion of liabilities that are repriceable today. We have another $5.4 billion in CDs that will mature in the next six months, $2.9 billion in the next three months at a 4.75% rate, and then $1 billion in cash flows from investment portfolio that, you know, it's coming off at 2.91% and being reinvested today, at least between 4.25% and 4.5%. So that kind of gives you the key moving parts that are there. Gotcha. Okay. Yep, and then I think you mentioned, Vince, or somebody mentioned on the call some hiring that you guys had done on the maybe on the fee income side. Maybe just you can just point us to what you're doing there, and then just one, you know, just modeling question. It sounds like the fee income this quarter, the builds may be, you know, kind of an, I don't want to call it, non-recurring or and then, you know, the there's also a negative you said on impairment on the mortgage side? ... That kind of neutralizes- Yeah, there's an MSR impairment of $2.8 million. So they offset each other. Yeah. If you look at- Yeah, it's offset. The income bracket. Yeah. Yep. Okay. No, it's not. Okay. And then just the hiring that you've done, I guess, is there an area you're focused on? Was it capital markets, Vince, that you talked about as far as, I think there was some comment about hiring and, just trying to understand where there might be a little more- We've added, you know, we've added folks. Yeah, we've replaced people. You know, in certain markets, we've upped here with the replacements. You know, we had. That's one area that's driving a little bit of the increase in the salary expense. So we've been able to bring some really talented people in. And then, you know, we've been building out our risk management framework and, you know, we stood up an operating efficiency group for our operations area because we felt that with the changes that are going on with AI and our investment in our data hub, you know, we're going to be able to drive efficiency in operations. So we hired. We made some changes. There was a press release that was put out, but, you know, we brought in some very talented people, some process engineers to help us drive efficiency and improve customer satisfaction and deal with risk in the back office. So, you know, while that's not a front-end hire, that should benefit us over the long haul to the scale. I mean, that's, that's really what's embedded in the increase in the run rate of expenses, salary expenses. It's not as large as, as the total amount that we're reporting, because there's all kinds of pieces in there. Some of it's directly related to production, right? Higher production in those fee income areas. You know, we're paying out commissions. But, you know, I, I think we're putting ourselves in a pretty good position moving into next year, both with funding, right? So if there is a pickup in demand, keeping that funding, you know, short duration in our strategy, so we can reprice down, take advantage of, you know, the changes in interest rates that occur, and then investing in areas that produce revenue and create efficiency. So, those are the factors that drove all of our decisions. Gotcha. Okay, that should be it for me. I guess, just remind me from a sensitivity standpoint, are you guys? You're pretty neutral, is that what I heard? I guess nothing's changed on the sensitivity of where you guys are at today? No, I would say, I mean, we're still asset sensitive, but we're clearly moving towards neutral. I mean, all the different levers I've talked about, Brian. Yeah. If you looked at our 10-Q, it'll still show asset sensitivity, but I would say we're more neutral than what the straight calculation would show and towards that. Yeah. Yeah. Okay, perfect. Thanks for taking the questions, guys. All right. Thank you. Thanks, Brian. And we have a question from Manuel Navas, from D.A. Davidson. Please go ahead. Hey, can you guys hear me now? Yes, we can. Please go ahead. Yes. You're okay, man. So, a lot of my questions have been answered, but can you just dive a little bit more into where you're seeing the market share gains in deposits? What geographies are driving it best, and kind of where you expect continued momentum? Yeah, we saw. Carolinas is a double digit. You know, I think that's one area where we've had great success. Pittsburgh, we continue to have success. I think because we have such a huge market share here, you know, it feeds on itself. I mean, we now have the scale to be able to compete effectively here and bring new clients on and bigger relationships, and that's still happening. So, you know, that we're benefiting there. In the central part of Pennsylvania, we've done extraordinarily well, so we brought in quite a bit there. And then as you move into the Mid-Atlantic region, you know, we've had some success, you know, in the markets that we're expanding into. And then also Charleston, South Carolina, and the South Carolina market that we're making good results for us. Those are. It's pretty much... I guess, it's pretty much everywhere, right? I, you know, I think we've done well in a bunch of markets, but I would say the Carolinas and the central part of Pennsylvania is probably leading the charge, right? And then Pittsburgh. Yeah, we had growth in 35 of the 57 MSAs that we operate in, and from a either increased share or maintained, it was 91% of the MSAs that we're in. So I think. Yeah. Very good result. And in the Carolinas, we had increases in six of the markets that were in there, so. I was just referring to the increase quarter over quarter. I wasn't referring to. On the market share data, yeah. Market share data. But it's pretty consistent. It's pretty similar story. To shift for a second, if we do get significant rate cuts by middle of next year, what's kind of the fee upside you see? You're gaining new relationships in the Carolinas. Could that convert quickly to improved mortgage business? Can you just kind of talk about that fee upside with lower rates? Yeah. The mortgage business really hinges on... You know, for us, it hinges on demand because we're big purchase money lenders, so hopefully there's more housing supply out there, more people decide to sell. But I think that'll be good. I think the swap income that, you know, we get from commercial customers, you know, somebody else asked the question, I think it was Ryan, you know, what are you seeing out there? Well, the one thing that I can tell you is that, you know, the customers that are looking to go to a fixed rate swap, they're watching what's going on, and they're not moving yet because they've, they're hearing repeatedly in the media that there's additional cuts coming. So that's, you know, when you dialogue with them, they say, "Well, I'm not going to do anything yet."... But you know, I think that business has an opportunity to grow. I think our syndications business over time will have opportunities because there'll be more M&A, particularly in the middle market and the lower end of the middle market, which plays favorably for us. We're also expanding several areas. We're getting into the advisory business. We're building out our public finance capability. So there are things that will lead to fee generation in 2025 that we don't even have today. So I think and you know, they won't be gigantic, but it will have an impact. Anyway, those are the things we're thinking about as we look forward. The debt capital markets had a record year this year. Yeah, debt capital markets obviously has been good. And that should continue, right? Because, you know, in the numbers Gary mentioned, line utilization, you know, we've looked at the larger clients and really have very few capital markets events driving reduction in revolver balance, which is why he said, Gary said, "You know, hey, that's gonna zap your demand deposits," right? Because our clients are using their cash balances to pay down debt moving into this next quarter. So, you know, that's what we've seen. And, you know, there's probably a little bit of reset going on within the customer base and their balance sheets. They're preparing themselves, too, for what's coming. Anyway, that's- I, I- So those areas- Thank you. Thank you. I appreciate all the color. Yeah. Thanks, man. This concludes our question and answer session. I would like to turn the conference back over to Vincent J. Delie for any closing remarks. Okay. Thank you, everybody. Thank you for the questions. I appreciate the time you've invested with us and, you know, we're really looking forward to next quarter and delivering. And I, you know, appreciate everything the employees have done and continue to do to keep us moving in the right direction. So thank you. Thank you, everyone. Take care. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.