Good Morning and Welcome to the Premier Financial Corp. Q3 2022 Earnings Conference Call. I would now like to turn the conference over to Paul Nungester with Premier Financial Corp. Please go ahead, sir. Thank you. Good morning, everyone, and thank you for joining us for today's Q3 2022 earnings conference call. This call is also being webcast, and the audio replay will be available at the Premier Financial Corp. website at PremierFinCorp.com. Following our prepared comments on the company's strategy and performance, we will be available to take your questions. Before we begin, I'd like to remind you that during the conference call today, including during the question and answer period, you may hear forward-looking statements related to future financial results and business operations for Premier Financial Corp. Actual results may differ materially from current management forecasts and projections as a result of factors over which the company has no control. Information on these risk factors and additional information on forward-looking statements are included in the news release and in the company's reports on file with the Securities and Exchange Commission. I'll turn the call over to Gary for his opening comments. Thank you, Paul, and good morning. I appreciate you joining us today. I'm very pleased to report Premier's Q3 earnings of $28.2 million or $0.79 per share. That's a good outcome from our perspective over a difficult operating environment. Pre-tax, pre-provision income was up 13% over the prior quarter, and total revenue growth for the quarter was 8.9%, which enabled us to post a very strong positive operating leverage figure. That's a key metric for our organization. The team posted another quarter of strong loan and deposit growth, as has been the case over the course of the year. We saw again good growth in all three categories, commercial, consumer, and residential. We are extremely pleased with our quarterly commercial growth of 4% as it follows an extremely strong Q2. Very encouraged, it really reflects the organization's ability to expand its client base. As Matt will share with us, our mix of C&I business continues to climb. Our customer deposit growth for the quarter was 9% annualized, and I assure you we're working hard to keep pace with the loan growth. Business deposits continue to grow with our commercial treasury and branch teams doing an excellent job on the deposit acquisition front. September noninterest-bearing deposits for the year were up 10% over September of the prior year. Moving on to the consumer side. Consumer spending is feeding our noninterest income for the quarter. Deposit and interchange fees were up 7.8% over the same period last year, and it's helping to offset the continued difficulty that we are experiencing in the residential mortgage market. We're again on sale under pressure with the secondary market sales due to a lag in volume and pricing challenges. Our insurance business is benefiting from the inflationary environment from a renewal revenue perspective, and our wealth team is having more value-added conversations with its clients than ever before. They're really leading through, again, a turbulent market environment. Expenses are right on expectation, and that's while we are also absorbing a mid-year compensation adjustment that we made again to mitigate to some degree some of the inflationary pressures we see. In summary, it was an excellent asset growth period with good, strong net interest income growth, with deposit gathering and beta management being the issues of the day. Paul and Matt will share some more details. Paul. Thank you, Gary. I'll review our Q3 results and start by highlighting another strong quarter of growth. Total loans, including those held for sale, increased by $301 million during the quarter, representing 20% annualized growth or 16% year-over-year growth. Once again, we saw growth in all categories, including commercial, residential, and consumer. We also had another good quarter in deposit growth, which increased $146 million or 9% annualized, excluding $70 million of broker deposits. Both non-interest bearing and interest-bearing deposits each had strong 9% annualized growth. Our loans to deposits ratio was approximately 92% at September 30, and we expect to remain in low 90s near term. This growth, in concert with the rising rate environment, drove improved net interest income and margin expansion. Net interest income increased 7% on a linked quarter basis and 11% from the prior year. Core margin, excluding PPP and acquisition mark accretion, increased 4 basis points from Q2 2022 and 9 basis points from Q3 2021. This was primarily due to loan growth and higher loan yields, which increased 30 basis points from 2Q to 4.24%, excluding PPP and acquisition mark accretion. Largely offsetting this was an increase in average cost of funds, which rose 31 basis points on a linked quarter basis to 0.55%. This was primarily due to an increase in average deposit costs, which grew 24 basis points on a linked quarter basis to 0.39%, excluding acquisition mark accretion and broker deposits, as well as continued increased costs on FHLB borrowings. Our loan yield expansion in 3Q represented a 21% beta compared to the change in the average effective federal funds rate for the quarter. While our total deposit beta, excluding marks and broker deposits, was 17%. We would expect this general trend to continue in 4Q and early 2023. That in combination with utilization of higher-cost, high beta FHLB borrowings that have supported our recent loan growth in excess of deposit growth, means we would expect our near-term NIM trend to be generally consistent with 3Q. Downside risk here would most likely come from deposit runoff and/or the deposit beta exceeding our loan beta. Next, non-interest income of $16.7 million for 3Q was up $2.3 million from the prior quarter, primarily due to mortgage banking and securities gains. Mortgage banking income increased $2 million on a linked quarter basis due to a $2.2 million increase in gains, offset by a $0.2 million lower MSR valuation gain. Securities gains were $43,000 in 3Q from increased valuations on equity securities compared to $1.2 million of losses in 2Q. These increases were partially offset by seasonal $0.8 million decrease in insurance commissions. Expenses of $41 million were up 5% on a linked quarter basis as expected, primarily due to higher compensation and benefits. These increased $2.2 million, partly from lower deferred costs related to lower quarterly loan production, as well as higher base compensation, from mid-year adjustments we made related to our recent market compensation analysis. Higher revenues helped improve our efficiency ratio, which declined to 51.3% for 3Q from 52.2% in 2Q. The net effect of higher revenues offset partially by higher expenses led to a 13% linked quarter increase in pre-tax, pre-provision income of $39 million and a 1.9% return on average assets. The allowance increased $3.6 million in 3Q due to $3.7 million of provision expense, all for loan growth, offset slightly by only $154,000 of charge-offs. Our asset quality stats improved again during the quarter, with decreases for non-performing assets and classified loans of 5% and 8% respectively. At September 30, our allowance coverage of non-performing loans was 213%. Finishing the balance sheet is capital with a quarterly decrease primarily due to a $44 million negative valuation adjustment on the available-for-sale securities portfolio. At September 30, our tangible equity ratio was 6.7%, down from 7.3% at June 30. However, excluding AOCI, tangible equity would be 9.0% at September 30, consistent with June 30. Additionally, our regulatory ratios are comfortably in excess of well-capitalized guidelines with tier one capital at approximately 10.1% and total capital at approximately 11.9% on a consolidated basis at September 30. That completes my financial review, and I'll now turn the call over to Matt. Thanks, Paul. We're pleased to report total loan growth net of PPP in excess of $316 million or 5.44% for the Q3. Our commercial business experienced another strong quarter of loan growth with Q3 growth of approximately 3.8% or $151 million. Commercial loan growth was outstanding at 15.9% or approximately $563 million on a year-to-date basis. C&I loan growth has been a significant contributor to our overall loan growth as C&I balances grew during the Q3 by 5.48% or approximately $54.2 million compared to the Q2. On a trailing Q4 basis, C&I balance growth was 28.77% or approximately $232.6 million. Line utilization for the Q3 remained relatively unchanged from the Q2 as utilization remains under 40%. For the Q4, we expect commercial balance growth to be flat or in the low single-digit range based on a combination of anticipated payoffs and lower pipeline levels caused by a higher rate environment and ongoing general economic uncertainty. In our residential mortgage business, we saw meaningful improvement in total mortgage banking revenue during the Q3 of 2022 compared to the Q2. Overall, industry conditions remain challenging due to the combination of increasing rates and declining demand, resulting in Q3 2022 mortgage banking income that was 36% lower than the Q3 of 2021. Origination activity decreased approximately 15% in the Q3 of 2022 compared to the Q2, a reflection of a softer overall market and our decision to increase pricing of our non-saleable products in an effort to temper our use of the portfolio. Given the rate and demand challenges, as well as the fact that the Q4 is typically a seasonal period of lower demand, our outlook for the Q4's origination activity is for a relatively soft quarter. Consumer loan activity was very good in the Q3, with balances growing 8.61% or $38.5 million compared to the Q2. On a trailing Q4 basis, our consumer portfolio has grown by 24.62% or approximately $95.9 million. With respect to asset quality, we had another quarter of improvement as Q3 levels of classified and criticized loans declined by 7.83% and 10.63% respectively on a linked quarter basis. When comparing the Q3 of 2022 to the Q3 of 2021, levels of classified and criticized loans improved by 50.02% and 46.49% respectively. Non-performing loan levels improved during the Q3 by 4.6% compared to the prior quarter, while net charge-offs for the Q3 were $154,000. We continue to monitor our portfolio closely for signs of stress, given the ongoing volatility in interest rates, continued inflationary pressures, and overall economic uncertainty. Our outlook for asset quality remains stable. I'd now like to turn the call back over to Gary Small. Gary? Thanks, Matt. Now I'll give you some thoughts relative to our performance expectations through the end of the year. From a balance sheet perspective, we're looking at modest earning asset growth for the Q4, somewhere in the 2% range. The commercial new business generation will continue to be strong, but a bit more moderate than it has been over the last 2 quarters. These will be offset by some specific exits of client companies who have been recently acquired. We always have paydowns in the Q4 and so forth. More modest growth. On the consumer side, expect the portfolio to be relatively flat versus Q3. Up 24%, as Matt mentioned, for the year-to-date number. We're very pleased with our position as we stand right now. Margin improvement will be leveling off as we remain very much focused on deposit acquisition and our tactics and strategies on closing out our wholesale funding position and that will have some impact on our upside margin. From a fee business perspective, consumer banking fees will remain ahead of their original targets. Mortgage fee income will continue to be under stress and be hard-pressed to match the Q3 that we posted. Expenses, we're going to stick with our original guidance of that we updated last quarter at $161 million for the year. We would see an efficiency ratio still in the 52% range for the full year. From a credit perspective, as Paul was mentioning, provisions driven primarily by portfolio growth. That's very much consistent with the CECL methodology. Could be some potential additional movement if the unemployment forecast moves substantially, as that's another CECL variable. Some unknowns there. Generally speaking, pre-tax, pre-provision income for Q4, plus or minus a couple% should look very much the same as what we saw in Q3. From an equity standpoint, we have no specific plans regarding additional repurchase activity through the end of the year. With that, I'll turn it back over to Sam, our operator, to take questions. Thank you, Gary. We will now begin the Q&A session. If you'd like to ask a question, again, it is star one on your telephone keypad. If for any reason you'd like to remove that question, you may press star two. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. Our first question comes from the line of Michael Perito with KBW. Michael, your line is now open. Hey, guys. Thanks for taking my question. Morning, Mike. Appreciate the obviously pretty specific commentary for next quarter, which, you know, I'm sure we all appreciate. As we look out to next year, though, understanding the environment's difficult, I'm not going to ask you to give any type of like growth targets or anything like that. It's more of just like, I guess, a strategic question, which is if we're in an environment where, you know, the current Moody's forecast is accurate and Fed funds remains in the, you know, pretty elevated rate relative to where it's been historically. Like, what do you guys- what's your appetite to grow beyond your ability to fund with deposits? Maybe asked another way, you know, like if we're thinking about a growth rate for next year, I mean, is it a growth rate that, you know, will likely have to be funded by your deposit growth, or will you take on borrowings? Maybe just some refresh there would be helpful because it does seem like you guys have some pretty good momentum on the loan side, but obviously the deposit market continues to get more challenging. I'll take a swing at that. Good question, you're right. We, from a visibility standpoint, can't be too specific, but I'll say this. Our loan growth next year will be very much in line and supported by our expected deposit growth, in support of that growth. You wouldn't expect as big a disconnect, if you will, as we have experienced this year. For all the right reasons, we're very pleased with the year that we posted, and that was purposeful. At the same time, we have some other levers we'll be pulling, that we would expect to work our way in a favorable position relative to our existing Federal Home Loan Bank position. Typically, it's not quite as punitive to be in that position on the portfolio as it is currently. With the upside being unlimited, we share your enthusiasm for reducing that number in the near term. It's one of the reasons our deposit margin overall margin aspirations are more moderate because we are going to be out, as we have been, gathering new funds and rates are part of that equation, but it's going to be such a more beneficial rate than the rate we're experiencing with the Federal Home Loan Bank. Long answer to your question, but No, no, that's helpful. We'll fund ourselves next year, and we'll work off some of what we've got. Yeah. Here's a follow-up to that for Paul. I mean, it's like a 3.5% margin year ± kind of where you think you'll trend over the next quarter or two. It sounds like, you know, if you guys are gonna grow, continue to grow, you know, there's probably not a ton of room to expand beyond that. I mean, without locking you in, do you think that's generally a fair way to be thinking about it at this point, just given where the consensus forecast is for rates? Good question, Mike. What I would say is kind of reiterate what we said during the call that, you know, where we're at today is around where we expect to be at least near term as we work through this deposit gathering strategy. You know, plus or minus a few bits from 3Q is where you can think at least for the next quarter or two. From there, you know, we'll reassess as we finalize our plans coming out of 4Q and how successful we are on the deposit front. Got it. Helpful. Then just lastly from me and I'll step back. The 52% efficiency ratio range for the full year, you know, that kind of puts you generally flat with where you were this quarter, next quarter, right? Like around 51% as we exit 2022 and look to 2023. I guess just as we think about next year investment rate, Gary, you know, obviously there's some inflationary pressures that might be a bit more than normal. But beyond that, I mean, are there any technology-related or $10 billion in asset-related investments on the regulatory compliance or infrastructure side that could potentially impact the growth rate or they're offset? Just how are you kind of thinking about that, as I'm sure you guys are starting the budgeting process around that for next year as we speak? Well, you know, Mike, there's always things that are added to the plate, and there are things that fall away as completed. Next year we will start to spend a little bit more on some of the features that need some time to mature as we head into the whole 10 billion territory. There are initiatives that we will be a little bit more active on than we have in the past. We do foresee a good effort from a customer experience standpoint as we go to work on one of our systems there. That's not inconsistent with the sort of activity that we would have every year. There's other activity that we were engaged with this year that's completed, and we'll just redeploy those funds to that. There are those elements, but I wouldn't look for them to necessarily change the dynamic of our efficiency ratio. Theoretically, right, if you're 52 for the full year, but you're 51 on the exit. I mean, as it stands today, you guys think some moderate rather operating leverage is now the question for 2023. Mm-hmm. Yeah. Okay. Yes. Great guys. Thank you very much, I appreciate it. Thanks, Mike. Thank you, Mr. Perito. The next question comes from the line of Brendan Nosal with Piper Sandler. Brendan, your line is now open. Hey, good morning, guys. How are you doing? Morning. Maybe just to start off here on kind of deposit pricing. What kind of hoping you can give us an updated beta outlook through the cycle? I guess, you know, this quarter we was around the 23, 24-ish% sequential delta. You know, it sounds like you're gonna be actively gathering deposits to help fund your loan growth, and that certainly could come at an expense. Just kind of curious how you think about that. I can take that one, Brendan. Q3, it obviously picked up pace as we thought, in the low 20s% there for deposits. We see that continuing, maybe ticking up as we focus even more on deposit gathering as Gary was just saying, to help with cutting into our FHLB position and things like that. As it stands now, we're still looking to come in around, once the full cycle's through around that low 30% beta that we previously talked about. You know, right now to date, and you can think of that, you know, go back to Q4 before any Fed movement started in Q1, and comparing to Q3, we're in the mid-teens%, low teens% on total deposits from a beta perspective. We've got a little room from the get-go from the lags as everybody was kind of dragging heels on the deposit side. Now it's gonna start picking up, and we'll start feeling most likely some more competitive pressure as everybody's starting to post loan growth like we have for the past two quarters. Yeah, it'll pick up on the deposit beta specifically for the next quarter or two for sure. Still, once we get through all that should come in and on an average, 30 to low 30s there. Okay, fantastic. That's super helpful color. I appreciate it. Maybe turning to fee income for a moment. Just kind of looking at the mortgage banking income line. I mean, it was even though it was down year-over-year, it was up quite substantially from the Q2, which feels like more of an aberration this earnings season. Maybe just kind of discuss what allowed that line item to improve so much sequentially and, you know, near-term expectations as we move through the balance of the year. Brendan, this is Matt. I'll answer that question. I think you're spot on. It is a little bit of an aberration. It was a little bit of a timing issue regarding the recognition of that revenue, and our expectations for Q4 would be, I think relatively flat and a little bit certainly down from the performance you saw in Q3. Okay. Fantastic. One more from me before I step back. Just kind of curious, with, you know, organic growth returning to probably a more typical pace next year and that being less of a call on capital, just would love to hear your updated thoughts on the M&A environment and your appetite. Based on some deals we've seen recently, obviously rate hikes are highly punitive. Would love to just hear your updated thoughts. Well, you know what I'd say, Brendan, is that it makes the conversations more interesting. Obviously with AOCI where it's at, you have a ton of GAAP book dilution on a deal, and you have a ton of accretion coming back in over the short end. Academically, you should say it doesn't matter, but it surely does. I think it slowed the discussions from where they were in the first half of the year as the realization of the magnitude of the AOCIs are thought through. We may feel differently about it, you know, two or Q3 down the road. I think both sides of the table, there's a little less activity now than there was coming into the summer months. I think with certainty or familiarity, things will return back to their normal pace, but the numbers are, you know, out of the normal relative range and I think has folks touching the brakes a little bit on the topic. Yep. Makes sense. All right. Great. Thank you for taking my questions. Thank you, Mr. Nosal. The next question comes from the line of Christopher Marinac with Janney Montgomery Scott. Christopher, your line is now open. Hey, thanks. Good morning. Just wanted to go back to the deposit gathering comments you made on the call and in the Q&A. Do you have to or can you incent your team to do more deposit gathering? Do you have to do anything different than you may have done in the past? I'm just kind of curious on your experience even before this last, you know, experience with deposits, the last two years. Chris, I'll take a swing at that. You know, since we got together and became Premier Bank two and a half years ago, we have not had to be in the deposit gathering mode. You know, once COVID was upon us and all the programs started in place, all the banking industry was benefiting from the money landing on the businesses and the households. This is the first time as an organization of our combined size that we're flexing our muscle to see how our eight or nine relative markets compete and where the pressures are. In our pre-combination world, we had experience of being able to sit down and raise 5% deposits in our marketplace, and we knew the levers that worked, and we knew the magnitude and betas that went with those. Each organization did that. This is our first time flexing as a combined organization in a pretty dynamic environment. We'll change the expectations and the goal setting and so forth relative to that, as is always a dynamic issue out with your team in the field. Pricing will help open that conversation up, and we will make adjustments as we see what's working well, what's working less well, combination of pricing, marketing and the team in the field. As we look toward the next year, you would see more swings relative to how we reward the team. It could be the same scorecard, but just with a higher weighting on deposit gathering perhaps than on loan generation as those are designed to flex with the needs of the organization. Great. That's really helpful feedback. Thanks a lot for that. I guess just to switch gears on credit quality, do you see anything in the horizon that changes the sort of ongoing positive trends in the special mention and in the substandard, you know, classified numbers that you disclosed? This is Matt. We don't. We are looking at credits robustly by sector, looking for some systemic issues, and we're not seeing it. It doesn't mean, you know, that something won't pop up as a result of a recession, but we feel pretty good about where our portfolio is positioned and how we will perform through a recession. I think we got a quick peek of that during COVID on how well our portfolio performed. Is it fair then, Matt, that charge-offs could rise a little bit during a recession but still be relatively low compared to past history? Oh, of course, yes. Okay, great. Thanks again for hosting us this morning. Thanks, Chris. Thank you, Mr. Marinac. We have no further questions waiting at this time. As a final reminder, to ask a question, it is star one. We'll pause here very briefly. We have no further questions waiting at this time, so I'd like to hand the call back over to Gary for any closing remarks. Thank you, Sam. I'll just close in saying as I think I opened the call. Strong growth, but our focus is 100% on deposit gathering and managing our beta through that process. That's gonna continue to be the theme for, I think, the next handful of quarters. For all our newness as an organization as far as having to go out and understand our markets, I wouldn't wanna lose sight of the actual performance of the year. We've had 7% year-to-date deposit growth. We're not in uncharted territory relative to what we need to do. As is typically a case, once we focus on an issue, we usually get it resolved. This is just the next issue that is in front of us, and we will get it resolved. Thank you all for joining us today. That concludes the Premier Financial Corp. Q3 2022 earnings conference call. Thank you all for your participation. You may now disconnect your line.