Hello, and welcome to the Hilltop Holdings Third Quarter 2022 Earnings Conference Call. My name is Alex. I'll be coordinating the call today. If you'd like to ask a question at the end of the presentation, you can press star one on your telephone keypad. If you'd like to withdraw your question, you may press star two. I'll now hand over to your host, Erik Yohe from Hilltop Holdings. Erik, please go ahead. Thank you, operator. Before we get started, please note that certain statements during today's presentation that are not statements of historical fact, including statements concerning such items as our outlook, business strategy, future plans, financial condition, allowance for credit losses, the impact and potential impacts of inflation, stock repurchases and dividends, and impacts of interest rate changes, as well as such other items referenced in the preface of our presentation are forward-looking statements. These statements are based on management's current expectations concerning future events that, by their nature, are subject to risk and uncertainties. Our actual results, capital, liquidity, and financial condition may differ materially from these statements due to a variety of factors, including the precautionary statements referenced in our presentation and those included in our most recent annual and quarterly reports filed with the SEC. Please note that the information presented is preliminary and based upon data available at this time. Except to the extent required by law, we expressly disclaim any obligation to update earlier statements as a result of new information. Additionally, this presentation includes certain Non-GAAP measures, including tangible common equity and tangible book value per share. The reconciliation of these measures to the nearest GAAP measure may be found in the appendix to this presentation, which is posted on our website at ir.hilltop-holdings.com. With that, I'll now turn the presentation over to President and CEO, Jeremy Ford. Thank you, Erik, and good morning. For the third quarter, Hilltop reported net income of $32 million or $0.50 per diluted share. Return on average assets for the period was 0.8% and return on average equity was 6.3%. This was an excellent quarter for PlainsCapital Bank. The bank generated $64 million in pre-tax income, driven primarily by a 44 basis point increase in net interest margin from Q3 2021. In the quarter, average bank loans grew by an annualized rate of 8% as growth in our core commercial loans and retention of PrimeLending originated mortgages more than offset elevated paydowns in the expected decline in our mortgage warehouse business. In talking with our bankers this quarter, our overall sentiment remains positive as they believe the economy is strong and are continuing to invest and finance new projects. As such, our pipelines remain elevated and above pre-COVID levels across almost all products in geographic markets. However, we are beginning to see the impact of elevated rates and inflation on new deals. In particular, elevated costs and rates are often leading to higher relative equity requirements in new construction projects. The area where we are starting to see pullback among clients is in single-family residential as home builder clients have appropriately slowed lot takedowns and look to move inventory quickly as demand slows. Overall, there is still high level of competition in major Texas markets, and as a result, yields and structure are under pressure. Although asset quality remains strong, we will continue to maintain our high credit standards and ensure our lenders are putting their best foot forward on quality opportunities. Total average deposits decreased by $852 million or 7% quarter-over-quarter. Our non-interest-bearing deposits, which tend to be stickier operating accounts, declined by only 2% linked quarter and remained elevated compared to Q3 2021. In our correspondent and money market accounts, we have seen some runoff as more rate-sensitive clients have reacted to the sharp rise in rates. We expected this runoff and are continuing to be on track to our 50% through the cycle beta, which Will is going to address later in the presentation. Overall, our strong excess core funding position has allowed us to remain disciplined on pricing and realize strong margin expansion. Importantly, at the end of the third quarter, the bank's loans held for investment to deposit ratio remained favorable at approximately 67%. We believe we have ample liquidity and core funding to support continued loan growth. Our ability to utilize sweep deposits from HilltopSecurities as core funding would provide further liquidity to the bank, which we believe is a differentiator in this environment where liquidity and funding potentially become more scarce. Moving to PrimeLending. While rising interest rates have been accretive for the net interest margin at the bank, they have adversely impacted our mortgage operations. Rising mortgage rates in conjunction with declining housing affordability and current inventory challenges continue to negatively impact mortgage volumes. As a result, mortgage origination volumes declined by 46% from Q3 2021. While gain on sale of loans sold to third parties has declined by 37%, down to 227 basis points. For perspective, volumes for the industry are expected to decline approximately 55% over the same period, per the Mortgage Bankers Association. The current mortgage market has shifted dramatically towards a pure purchase market. Refinance volumes in the third quarter made up only 7% of originations compared to 29% in Q3 last year. While our business model is more purchase-oriented, the shrinking pool of purchase home buyers and the immediate need of competitors to generate mortgage volume will continue to put pressure on the organization. After two consecutive years of originating $23 billion in mortgages, the business has started to reset towards a lower volume market for the foreseeable future. Expense initiatives underway include better aligning production support, operations, and back office headcount towards lower volumes. Over the past 12 months, we have reduced headcount in the business by 23%, and we will continue to monitor closely to ensure we are aligning production targets with appropriate staff levels. Additionally, the business is assessing real estate, business development, professional services, and all other fixed costs as we prepare for sustained higher mortgage rates and lower volumes in 2023. This is a challenging time in the mortgage industry, and it has come suddenly following multiple record years. That said, we feel good about the leadership and overall team we have at PrimeLending and their ability to navigate us through this cycle so that we come out a stronger, growing, and more profitable organization on the other side. During the quarter, HilltopSecurities generated $17.5 million of pre-tax income on net revenues of $114 million, for a pre-tax margin of 15%. Pre-tax profit improved slightly compared to last year's third quarter, despite a 10% decline in revenues. The pre-tax contribution mix shifted as public finance and structured finance both declined versus the prior year, but were largely offset by improvement in wealth management and fixed income. Revenues within fixed income services increased by 2% over prior year as trading activity within the securitized products picked up. Though the overall fixed income trading environment continues to struggle due to the expectation of rising rates. Wealth management improved compared to prior year, despite lower fees from a decline in the equity markets. High margin revenues from sweep deposits continued to move up with Fed rate increases, and we continue to add strong advisors in this business. While we feel positive about the momentum HilltopSecurities made in the quarter and the position they are in across our lines of business, we do believe the trading environment remains volatile and expect to maintain lower levels of trading inventory until the market stabilizes. Moving to page four. During the quarter, Hilltop returned $10 million of capital to shareholders through dividends. At this time, we do not have a new share repurchase authorization to report, and as of now, the plan is to evaluate this as part of our annual planning process with our board at year-end. Despite earnings pressure in our mortgage origination business and a decline in the value of our available for sale securities portfolio from rising rates, consolidated profitability from our diverse business model and significant share repurchases over the past two years has supported our tangible book value per share and drove it to increase modestly in the third quarter. In summary, this is a challenging market, but we remain focused on delivering profitable growth every quarter. We have strong, experienced leaders in each business who have been through cycles and tough times. We are continuing to work with our clients and employees and in every market to understand the evolving dynamics and how we best can support and partner with them. As we anticipate a higher rate environment through 2023, we plan to rely on the strengths of PlainsCapital Bank and HilltopSecurities while PrimeLending realigns its business to weather this mortgage cycle. With that, I will now turn the presentation over to Will to discuss the financials. Thank you, Jeremy. I'll start on page five. As Jeremy discussed, for the third quarter of 2022, Hilltop reported consolidated income attributable to common stockholders of $32 million, equating to $0.50 per diluted share. Moving to page six. During the third quarter, credit quality remained solid as non-performing loans remained stable at low levels compared to the second quarter of 2022. During the quarter, the outlook for the U.S. economy improved modestly, as reflected in the Moody's S7 scenario. The improvement to the economic outlook resulted in a reduction in ACL of $3.6 million in the quarter, which was largely offset by growth in the portfolio, coupled with modest risk rating migration across the book. As of September 30th, the allowance for credit losses was $92 million, yielding an ACL to total loans HFI coverage ratio of 1.16%. Additionally, excluding mortgage warehouse, broker-dealer, and PPP loans, the ACL to total bank loans HFI ratio equates to 1.25%. While we remain constructive on the current state of our credit portfolio, we continue to believe that the allowance for credit losses could be volatile, and that changes in the allowance will be driven by net loan growth in the portfolio, credit migration trends, and changes to the macroeconomic outlook over time. Further, certain industry-provided economic forecasts are reflecting an increased likelihood of economic recession in future periods. We will continue to monitor the current environment as well as a broad set of economic forecasts during the fourth quarter to determine what impacts, if any, updated outlook may have on the allowance for credit losses in future periods. Turning to page seven. Managed income in the third quarter equated to $123 million, including approximately $3 million of PPP-related income and purchase accounting accretion. Net interest margin expanded by 44 basis points versus the second quarter of 2022 to 319 basis points, driven primarily by higher yields on excess cash, loans HFI and loans HFS. Further, while we continue to rigorously manage interest-bearing deposit costs in the face of increasing competition and customer expectations for higher rates, the cost of interest-bearing deposits rose in the quarter to 70 basis points, an increase of 42 basis points from the prior quarter. We continue to believe that the through the cycle deposit beta will average 50%, increasing from the current 25%-30% level. During the third quarter, new commercial loan originations, including credit renewals, had an average book yield of 6.25%, which moved higher by 177 basis points versus the second quarter levels. In addition, we retained $129 million of residential mortgages during the quarter, yielding an average interest rate of 5.26%. I'm turning to page eight. In the chart in the upper left, we highlight the asset sensitivity of Hilltop, assuming parallel and instantaneous rate shocks, which represent an asset-sensitive position of approximately 7% in the up 100 basis point scenario. As we evaluate asset sensitivity and interest rate risk, we assess a number of potential scenarios. Of note, if we shift the analysis from an instantaneous parallel shift to a gradual increase over the course of the next 12 months, the up 100 basis point asset sensitivity falls to approximately 3%. One factor impacting future asset sensitivity will be our loans currently at or below their floor levels. As of September 30th, Hilltop had approximately $720 million of loans that remained at their contractual floor levels. Of these loans, $151 million will reset above their floor levels over the next 12 months. In addition, $2.1 billion of variable rate loans currently above their rate floor levels are scheduled to reset over the coming 30 days. Lastly, for 2022, we expect the impact of PPP related fees and interest, which were approximately $22 million in 2021, and purchase loan accretion, which was approximately $19 million, to decline by a combined $25 million-$30 million versus the 2021 levels. Moving to page nine. Total non-interest income for the third quarter of 2022 equated to $207 million. Third quarter mortgage-related income and fees decreased by $144 million versus the third quarter of 2021, driven by the ever-evolving environment in mortgage banking, which has moved quickly to being purchase focused. Versus the prior year quarter, purchase mortgage volumes decreased by $1.1 billion or 28%, and refinance volumes declined more substantially, decreasing $1.4 billion or 87%. During the third quarter of 2022, reported gain on sale margins declined sharply to 218 basis points, down 128 basis points versus the same period in the prior year. Margins were negatively impacted by price reductions across the markets, as well as customer preference to pay more in origination fees through rate buydowns versus paying the prevailing interest rate in the market. We expect full-year average margins to remain under substantial pressure during 2022 as mortgage volumes normalize from the historically high level seen over the last two years, and the competition for that lower volume drives tighter margins. Through September, gain on sale margins for loans sold to third parties has averaged 263 basis points, and we expect by the year end the full year average to be between 250 and 270 basis points, contingent on market conditions. Additionally, we continue to execute both sales of MSRs during the third quarter. These sales resulted in realized losses in the quarter of approximately $650,000. Further, we maintain a fully hedged position against our MSR asset, and as a result, had no significant net valuation mark activity in the third quarter of 2022. During the quarter, the structured finance business at Hilltop Securities benefited from two items of note. First, the lock volume increase during the quarter related to those clients that reside in states that provided additional subsidization with down payment assistance through the allocation of additional government-sponsored funds. Secondly, the business benefited from the outperformance of certain hedges in the mortgage book. Realized hedge gains equated to $13.6 million for the third quarter. Further, the structured finance business reflected a $4 million unrealized positive valuation mark as of September 30th. It remains important to recognize that both fixed income services and the structured finance businesses can be volatile from period to period as they are impacted by interest rates, overall market liquidity, volatility, and production trends. Turning to page 10. Non-interest expenses decreased from the same period in the prior year by $67 million to $289 million. The decline in expenses versus the prior year was driven by decreases in variable compensation of approximately $55 million, largely driven by PrimeLending, which was linked to substantially lower fee revenue generation in the quarter compared to the prior year period. Additionally, non-compensation variable expenses, particularly mortgage production related expenses, declined as volumes declined versus the prior year. Lastly, Hilltop recorded $1.3 million of severance in the quarter, which was principally incurred in our mortgage segment. Looking forward into the fourth quarter of 2022, we will continue the work of repositioning our mortgage business to reflect the ongoing market dynamics that are currently present. While continuing to focus on investing in the business for future growth once this portion of the cycle begins to ease. As Jeremy mentioned, we've taken definitive steps to reduce the cost of originating loans over the last few years, and that work is proving beneficial as we continue to focus on our target productivity levels over the coming quarters. While we remain committed to the mortgage business as it is core to our franchise, we do expect that the headwinds facing this business will continue into 2023. Further, we expect that inflation will continue to impact compensation, occupancy, and software expenses, resulting in elevated fixed costs within the businesses compared to prior periods. To help mitigate some of these headwinds, we remain focused on continuous improvement, leveraging the investments we've made over the last few years to aggressively manage increased productivity across our front, middle, and back offices. While these inflationary pressures do exist, we are continuing to further streamline our businesses and accelerate the adoption of our digital capabilities to support client acquisition and overall business productivity. Moving to page 11. Average HFI loans equated to $7.9 billion in the third quarter, increasing by approximately $397 million from the prior year levels. During the third quarter, commercial lending, in particular, commercial real estate, was solid as both closed production and our forward pipelines remained robust. While commercial loan growth has improved over the last few quarters, we expect that the full year average loan HFI growth, excluding mortgage loans retained and PPP loans during 2022, will be in the 1%-3% range as competition remains very intense for newly funded loans and mortgage warehouse lending, outstanding balances have continued to move lower throughout the year. Further, given our current liquidity position, we expect to continue to retain one to four family mortgages originated at PrimeLending at a pace of between $25 million and $75 million per month for the remainder of 2022. Mortgage marketplace has shifted towards hybrid adjustable rate products, and we prefer holding these versus the longer duration fixed rate mortgages that made up the preponderance of the loans retained in prior periods. Turning to page 12. In the graph in the upper right, we show the ongoing progress made in reducing NPAs as overall credit quality remains stable across the portfolio. During the third quarter, annualized net charge-offs to total loans was elevated at 15 basis points versus the prior periods, but remains well below non-normalized run rate loss expectations. The charge-offs in the period were not related, and we currently do not expect any systemic exposure emerging across the portfolio at this time. As is shown on the graph on the bottom right of the page, the allowance for credit loss coverage at the bank into the second quarter or into third quarter of 2022 at 1.21%. Turning to page 13. Third quarter average total deposits are approximately $11.7 billion and have decreased by approximately $243 million or 2% versus the third quarter of 2021. As was provided in earlier outlook, we have expected that deposits would trend lower throughout the year, and that has been the case. Overall deposit flows are in line with our expectations and reflect certain client movement to achieve higher rates, while other clients are putting their capital to work in projects which are requiring more equity now than in past periods. Further, we are seeing movement of deposits internally into treasury or laddered bond funds offered at Hilltop Securities and within the private bank at PlainsCapital. We continue to monitor the inflows and outflows of deposits and anticipate adjusting our pricing in the future to remain competitive but not market leading from a deposit yield perspective. As noted earlier, given the expectation of additional rate changes from the Federal Reserve, we do expect to see deposit costs continuing to rise later in 2022 and into 2023. While deposit levels remain elevated, it should be noted that we remain focused on growing our client base and deepening wallet share through our treasury products and services. These efforts have been successful in 2022, and we expect that they will continue to accelerate into 2023. Moving to page 14. We are updating our 2022 outlook to reflect current market conditions, expectations for future performance, and actions we will be taking to support profitable growth over the coming quarters. It should be noted that we expect ongoing volatility in the capital markets and the overall economy, and that this volatility could materially impact our results and change our expectations in the future. As such, we will provide updated outlook where appropriate during our quarterly calls. Operator, that concludes our prepared comments, and we'll turn the call back to you for the Q&A section of the call. Thank you. As a reminder, if you'd like to ask a question, that's star one on your telephone keypad. If you'd like to withdraw your question, you may press star two. Please ensure you're unmuted locally when asking your question. Our first question for today comes from Brad Milsaps from Piper Sandler. Brad, your line is now open. Good morning. Morning. Morning. I appreciate all the color, and thanks for taking my questions. Just curious, Will, on the balance sheet, can you talk a little bit about how you know, you plan to kind of manage it going forward? You know, you still have some existing liquidity, kind of how you're thinking about the bond portfolio. Maybe finally, how quickly do you think it will take to get to that 50% deposit beta through the cycle deposit beta that you guys talked about? Just kind of want to appreciate, you know, how competitive it is there, kind of versus elsewhere. We'll take those in parts. From a balance sheet perspective, you know, we expect, as we've said, the investment portfolio likely drifts higher. It, we're not looking to grow the investment portfolio on an outsize basis, but certainly with where cash, you know, cash yields are on excess cash to bid, it's gonna be a slow growth kind of drift higher from current levels. As I mentioned on the call, we're gonna continue to retain mortgages, certainly the adjustable hybrid ARM product that Prime is able to originate today. We think we'll do that at $25 million-$75 million level, for you know, certainly the remainder of this year and likely into the first half of next year. You know, from a balancing perspective, we're looking to evaluate the deposits and deposit flows. Again, it's been right in line with our expectations in terms of what we would otherwise expected. As it relates to your question of when do we get to the 50% beta, you know, that we would expect to be there, you know, within a couple of quarters after the Fed actually reaches its terminal rate. It takes the way we expect to see this is we'll pass through what we think to be a reasonable amount to clients as those Fed increases come through. After the Fed generally stops, what normally occurs is we see deposit rates tend to find gravity and the market settles in from a competitive perspective, and there's some leveling that'll need to occur. That generally is the last leg that moves us toward that 50% beta. Not a definitive date as to when that occurs, understanding it's not 100% clear when the Fed hits pause. Great. Thanks for that color. Maybe a follow-up question for me, just on the broker-dealer. I think I heard you correctly, there were about maybe $17.5 million of marks that helped you guys this quarter, which, you know, obviously, those are hard to predict and can go, you know, either way. But if I do take those out, you would have basically, you know, kind of broken even on a pre-tax basis at the broker-dealer, I think, if I'm correct. Jeremy, you guys didn't change your guidance there, but you kind of also commented that you expect to, you know, to kind of lean into the broker-dealer as well as the bank with the mortgage headwinds that are out there. Without those marks, can you talk about, you know, where you think it could improve to kind of get you over the hump of kind of that break-even level? Will, do you want to talk to the marks first? Yeah, let's. The 13.6, and you're spot on in terms of adding them together in terms of marks. The 13.6, I mean, that's normal trading activity in that book, and we've historically been favorable. We've had some negative marks, obviously, but I don't think you can back the whole thing. I don't think you can back the whole amount out. I called it out, and we wanted to disclose it simply because it is larger than they have been historically, which have been closer throughout the year to $5-$6 million a quarter versus kind of the 13.6. I don't think you can back it all the way out. The $4 million of unrealized that I mentioned, again, that's on the existing book that existed at September 30th. Again, there is volatility, and that's why we call that volatility out. I wouldn't necessarily expect to kind of pull all of that initial $13.6 million out of trading gains, but it is out. It was outsized in the third quarter. Yeah. That's the case there. I guess just kind of from an outlook perspective on HilltopSecurities, you know, first we have the sweep deposits that right now have a run rate of pre-tax profitability of $10 million-$12 million a quarter. So that's good backdrop. I think that the public finance business should improve, particularly seasonally in the fourth quarter. Fixed income's been low for some time. I think when the market stabilize at a rate level that that will improve. So that'll counterbalance, you know, what the structured finance business is gonna have to struggle through this mortgage market. Thanks. Thanks, guys. I appreciate the clarity on those marks. I'll step back in the queue. Thank you. Thank you. Thank you. Our next question comes from Thomas Wendler of Stephens Inc. Thomas, your line is now open. Hey, good morning, everyone. Thanks for taking my questions. Just looking at the Good morning. Mortgage segment, the midpoint of your 2022 guidance points to a material volume deceleration of what looks like 20% linked quarter. What are you seeing so far in 4Q that's giving you kind of caution there? I think we've seen the deceleration really all year, certainly further in the third quarter. I mean, we originated about $3 billion. You see that step down pretty substantially from Q1 and Q2. There's a handful of things going on in the fourth quarter. First, rates have continued to move higher, you know, 30-year mortgage rates, you know, high 6s, low 7s, and that's starting to become a more consistent reality. If the Fed does move, you know, that's gonna put additional pressure on that. The ten-year now has moved above 4%, been there for a handful of days, and so that's also gonna continue to put pressure, upward pressure on mortgage rates. You're moving into the seasonal window of Thanksgiving, you know, the year-end holidays, Christmas and the like. That's just generally a seasonally weak period and one we would normally expect to see volumes pull back pretty materially during the second half of December. It's a combination of the market dynamics continue to move against mortgage origination and then obviously the seasonal period would also cause it to be depressed. All right. Thank you. Then, moving back over to the broker-dealer, looks like you had a pre-tax margin around 15% in 3Q. What are your expectations for a pre-tax margin there in 4Q in 2023 as we move forward? I'm not really gonna be able to give guidance there. I would just say for the fourth quarter, you know, we still see strength in the sweep deposits, and that provides a good comp ratio for the wealth business there. You know, we're hoping that versus the third quarter, the fourth quarter, the public finance business should seasonally pick up. However, we're cautious about structured finance and what our trading activity will be there. All right, that's great. Thanks for all answering my questions, guys. Thank you. Thank you. Thank you. Our next question comes from [inaudible] of Raymond James. [inaudible], your line is now open. Hi. Thank you. Good morning. Calling in for Michael Rose. Thank you for taking my question. Sure. Starting with PrimeLending with the efficiency ratio at 124%. Also on the slide, you mentioned that the head count was down 23% from a year ago. Just how should we be thinking about profitability there going into next year, given the rate environment and also the expectation for maybe a further declining originations next year? Also, I believe you mentioned some additional levers you may have, and so if you could dig a bit deeper into that'd be helpful. I think from an outlook perspective, we're not gonna give 2023 outlook here. We'll give that in our January call. As we think about, you know, and as we said in our prepared comments, we expect Q4 will remain challenging. You know, I think we'll be in a net or pre-tax loss position. We're working diligently. The team's working diligently every day to try to drive us to a position where, you know, we move closer to break even or profitable results. Again, the market has moved quickly. It's very dynamic. From our current perspective, it would lead us to believe that the Q4 we'll be in a net loss position, and that as we noted in our prepared comments, we expect 2023 will remain a challenging environment. Again, we're not gonna give financial guidance on that as we sit here today. I think what we're trying to say on the cost initiatives is we're trying to do everything we can this year to position ourselves next year to weather through it. Okay. Well, thank you for that. Now moving on to deposits. I guess with the continued expected shift in the mix, I also understand you do have ample capacity, a low loan-to-deposit ratio. Do you have any expectation over the next couple of quarters for maybe a larger than usual decline in perhaps some low-cost deposits that may be related to the mortgage business due to seasonality? No, nothing necessarily related to the mortgage business from a seasonality perspective. You know, I think what we would say, and if what we've got here on our deposit slide, is we've been very pleased with kind of the performance of our non-interest-bearing deposits. You know, they are $4.5 billion at the end of Q3. They were $4.4 billion at the end of Q3 of last year. They've moved up and down, but at the end of the day, that's very stable and we feel very good about that. We think it reflects the ongoing work our bankers are doing from a relationship management perspective, as well as the efforts that we've made around our treasury services and product sales over the last few years. That said, you know, we could and do expect to see some migration out of non-interest-bearing as rates continue to move higher. I think from an interest-bearing deposit perspective, again, we've seen deposit outflows, but we've seen them, you know, at the pace we expected. I think a couple of items to note, about $180 million of decline kind of quarter to quarter, Q2 to Q3, were driven by two things. One, our broker deposits that we've continued to allow to run off, because we put those on, out of an abundance of caution during the COVID window. Those we're just letting run off and sending back. The second thing is our sweep deposits from HilltopSecurities. You can see there in the chart dropped from about $800 million to $700 million. That was another approximate $100 million. If you think about our overall deposit flows, we're seeing expected outflows from customers as they seek higher yields. Nothing there from a lost customer perspective that we wouldn't have otherwise expected. Then we have seen some what I'd say managed deposit flows, as we've continued to kind of manage the portfolio and the overall liquidity position on the balance sheet. All right. Thank you. Well, thank you for answering my question. That'll be all for me. Thank you. Thank you. Our next question comes from Woody Lay of KBW. Woody, your line is now open. Hey, good morning, guys. Morning. Based on the NII guidance you give, it implies a pretty wide range for NII expectations just for the fourth quarter. Do you think it's fair to assume that NII continues to increase from here given the, you know, the asset sensitivity and the margin should expand from here? We do. I mean, I think as we sit, you know, in the third quarter here, we had $123 million worth of net interest income. You know, some of the wideness there is based on, you know, what the Fed ends up doing. But if the Fed continues to move higher, we would expect NII will continue to expand and the run rate will continue to improve. If they're you know, stable from here, then we would expect it start to level out from this perspective. I think those are the real drivers. Our current outlook assumes a you know, a Fed funds rate of 450-500 basis points. I think that's a big driver. We do, if the market is right and the Fed continues to move higher, which we expect they will, we would expect to see NII continue to grow into 2023, likely peaking early in 2023. Got it. If I'm looking at the other average earning asset line, it's just interest up about $2 million. It's showing the yield is 24%. Any color you can give on what that line item is representing? Let me I think it's a pretty small number. Yeah. We'll circle back and get that to you. All right. Just lastly for me, I mean, it sounds like, you know, the pipeline is continuing to grow. You know, the cash position of the company is well set up. I mean, do you think the growth opportunities in 2023 could, you know, could outpace 2022? I think we're more cautious. I mean, I think there is, like I said, good strength in Texas, and good strength on our pipeline. I think what we've also tried to tell you is that our pull-through rates are lower because of competition, and we do think we're in a pivotal period where interest rates are rising, costs have risen. It'll be interesting to see what our clients wanna do from a development perspective. Got it. All right. That's all for me. Thanks, guys. Thank you. Thank you. Our next question is a follow-up question from Brad Milsaps of Piper Sandler. Brad, your line is now open. Hey, thanks for taking the follow-up. I know this will come out in the queue soon, but just curious if there are any marks in the mortgage business, you know, MSR, pipeline mark, anything that kind of swung that, you know, one way or the other that, you know, you thought might help you out or may go the other way next quarter. No, I mean, marks are difficult to predict just given kind of where they are, they're a point in time, kind of end of period evaluation. It's difficult. During the third quarter though, as we noted in our comments, MSR, we've got fully hedged, so we don't expect, you know, under normal circumstances, wouldn't expect any meaningful gains or losses in that regard. We have continued, and we would expect to continue to kind of execute bulk sales when the market warrants that. That could yield, you know, some modest gains or losses depending on depending on the execution there. Again, from structured finance, we talked about those. Again, those marks are evaluated at the end of every quarter, and will be kind of co-determined by how the yield curve shifts and how the performance in different coupons from a hedging perspective are impacted as rates move and valuations are adjusted. Will, in terms of your variable comp in the mortgage business, has that as kind of a percentage of production pretty much hit a floor? I think it was around 1.45% this quarter. You know, historically, it's run much higher, obviously at much higher production levels. Is there room to take that ratio lower, or is it pretty much kind of at a floor at this point? You know, it will only drift lower as folks kind of fall in lower positions rate card. As volumes decline, just a reminder, you know, those that variable compensation is based on volume, not profitability. As volumes decline, we would expect that rate necessarily could move modestly lower, but it's gonna be reasonably stable at the current level. Okay, great. Thank you, guys. Thank you. We have no further questions for today. That concludes today's conference call. Thank you for joining. You may now disconnect.