Huntington Bancshares Incorporated (HBAN) Earnings Call Transcript & Summary

All right. We're going to get started here. Fresh off its first Investor Day in 12 years. We're pleased to have Huntington joining us. Huntington has spent much of the last year completing the integration of the TCF acquisition, leveraging investments in the business to generate top quartile revenue growth and, of course, continuing to drive positive operating leverage after successfully achieving its financial goals, and recently rolled out several new ones to set the stage for the next few years. Here to talk about the road ahead, CFO, Zach Wasserman. He's going to give us a few minutes of prepared remarks before we get into some Q&A. Zach?

Thanks. Well, good morning, and thank you, Ryan, and everyone at Goldman Sachs for hosting us today. I want to welcome you all and appreciate your interest in Huntington. Let me offer regrets from our Chairman and CEO, Steve Steinour, who had planned to be here today, but unfortunately, he's feeling under the weather and couldn't join us. This morning, I will start by sharing an update into what we're seeing so far this quarter and progress on key initiatives, and then I'll turn it back to Ryan for Q&A, as he just mentioned. Before I begin, I would remind you that our remarks today, including the Q&A period, will contain forward-looking statements. Actual results may differ materially from those projected in any forward-looking statements we make today. For a complete discussion of the factors that could cause our actual results to differ materially. Please refer to our most recent 10-Q, 10-K and 8-K filings. 2022 has been a tremendous year for Huntington with record financial performance for the past 3 quarters. We delivered on the committed expense savings from the TCF acquisition by midyear. And in the second half, we completed bolt-on acquisitions of Capstone and Torana, further bolstering our capabilities. We have great momentum across the bank, and we enter the new year, Huntington has never been better positioned. Our teams are focused on driving organic growth including the additive TCF revenue synergies. We're continuing to invest in the business to drive sustainable revenue opportunities while also increasing productivity and efficiency through operation accelerate. We're pleased to be able to spend time with many of you in person at our recent Investor Day, and we hope it provides you a comprehensive overview of Huntington. Our strategies and market position are differentiated and we will drive even greater value for shareholders over the coming years. We have numerous growth engines across the bank, strong leadership and a proven ability and commitment to execute as operators. All of this together drives our top-tier returns and our new medium-term targets that we shared at Investor Day. As a reminder, we plan to deliver PPNR growth of between 6% and 9%, return on tangible common equity of 20% plus and positive operating leverage. Now let me spend a few minutes sharing what we're seeing from customer activity and how we're thinking about the current macroeconomic outlook. While the economic background continues to have a good deal of uncertainty, particularly regarding inflation and the rate outlook, we continue to see stable commercial pipelines that provide us with ample growth opportunities. Generally, our customers are in healthy positions. And while there is some caution, as you would expect, related to inflationary pressures and the speed at which interest rates have risen, by and large, our customers are managing through. Supply chain constraints are slowly improving, and the biggest impact our customers are facing is the ongoing labor supply challenge. The net result is that we're continuing to see growth opportunities across the customer base. And we believe these considerations are not a constraint to our growth outlook. Our customers are remarkably resilient and businesses continue to perform well across the board. Credit overall remains a strength for Huntington and is holding up exceptionally well. As evidenced by our year-to-date net charge-offs of 8 basis points, we will have another strong quarter of low net charge-offs in the fourth quarter. We benefit from a well-balanced and diversified portfolio with nearly 50-50 split of commercial and consumer. In Consumer, we focus on prime and super prime portfolios that are generally asset secured. On the commercial side, likewise, asset secured, and we also have strong customer industry and geographic diversification. Our top-tier ACL coverage reflects our conservative stance. As we shared at our Investor Day, we lowered our through-the-cycle net charge-off guidance to 25 to 45 basis points, which aligns with our aggregate moderate to low-risk appetite and the 10-year average of net charge-offs, which is 28 basis points. As we near closing out a record year, I want to say thank you to all of our colleagues who delivered these exceptional results. Their hard work and dedication to serving our customers and support of this record performance, and I expect it will help us to carry sustained performance into 2023. In closing, we're focused on executing on the strategies we outlined at Investor Day with numerous growth engines across the bank, led by an execution-oriented management team that's aligned with our shareholders' interest and our aggregate moderate to low-risk appetite. We look forward to sharing our future growth and performance with you as we move through 2023 and beyond. And with those opening remarks, let me turn it over to Ryan now for a Q&A.

Great. Thank you, Zach. So Zach, the bank just finished the first Investor Day in 12 years, and I know that since then, you guys have gone out and met with a lot of investors and maybe just talk about what has the feedback been? And what was the message that you were trying to send out to investors? And what do you think were the key items that are resonating with them?

Yes. Thank you for that question. The opportunity to restate some of that. At Investor Day, we tried to share a number of key messages. One of them is that we firmly believe and we're seeing come through, that our purpose drives performance. The second thing that we wanted to try to cover was that often we get the question, how is Huntington differentiated from other similarly sized regional banks. And we believe we are highly differentiated, particularly in our culture, in our brand, our technology prowess and our ability to drive and our demonstrated proof points of driving innovation over time, the strength of our growth opportunities. And lastly, the top-tier return profile that the company has. Those are some of the key differentiators we wanted to share. A third major point that we tried to highlight in Investor Day was we see sustainable opportunities to drive earnings growth over the long term. Those are clearly supported by the TCF acquisition and the revenue synergies that came from that, but are much broader than only that. And then lastly, that the management team is focused on executing and we've got the momentum that leaves us, as I said in my prepared remarks, we feel never better positioned to really execute and continue to drive that success. So those are the key messages. Following, one of the reasons why we did the Investor Day when we did is we had just come through the TCF acquisition. We had delivered our medium-term financial targets that we had set for ourselves when we announced the acquisition. And so it was the right time to reengage and to share our new vision for the go-forward strategy and what that will generate in terms of financial returns. The feedback we've gotten from investors has been generally very, very positive. I think there's a -- what we can sense a recognition and understanding that Huntington is performing very well right now. And we've been demonstrating the confidence that we'll keep that going.

Zach, maybe to follow up on the last point that you made. You did lay out new financial targets and ROTCE target with and without AOCI charge-offs and PPNR goals. I guess, what were you trying to accomplish? Do you set the bar high enough? And what are the goals of these over the next few years?

Yes. Well when we thought about how to set targets for our financial performance, we had a few considerations: One, we wanted them to be at the core of what we believe to be value creation, earnings growth, return on capital and the commitment that we have within the company to drive ongoing operating margin improvement through positive operating leverage. And so those felt like the right categories to us. The levels that we set where what we thought we could achieve over a 3- to 5-year period, executing our business plan. And we think when we do that, it will really represent top-tier performance. The 6% to 9% pretax, pre-provision net revenue growth that we see, we have a strong line of sight to being able to deliver that over the next 3 to 5 years. As I said at Investor Day, it's a pretty balanced function, about half of that coming from spread revenues. About 20% from fees and the balance of 30% coming from the positive operating margin leverage that we have and the efficiencies will drive through positive operating leverage. So it's a nice balanced profile. And on the return on capital side, 20% plus or if you were to adjust for AOCI between 17% and 19%, we think there's a really strong top-tier return and certainly a significant excess return above our cost of capital. So we felt like they're the right metrics and very confident in our ability to achieve them.

Zach, a couple of things I want to hit on before we get into more of the operating environment. But when you and Steve and the other leaders of the company, I'm sure you're spending lots of time meeting with companies and CEOs and the like. You talked about stable commercial pipelines. Maybe just talk about what the mood is across the client base, what is top of mind for them. And how are they managing through this environment?

Yes. Generally speaking, in a word, quite resilient, I would say. Let me double click into that. I think certainly, when we talk to our clients, particularly those that are exposed to significant labor inputs, but really broad, they're seeing the impacts of inflation. With that being said, what we're seeing is their ability to generally manage through it, and to protect their margins and their profitability. I think secondly, just as we all do, they're reading the headlines and they're seeing the rapidity of interest rate rises. And so there is some caution clearly in what next year could bring and how this landing plays out. With that being said, third point I would make is, the biggest constraint and challenge we continue to hear from our clients is the ability of labor, the ability to get labor and labor supply constraints in order to execute on their growth plan. They continue to see generally revenue growth opportunities and the ability to execute against that. And so that's a positive sign. But generally, there's a -- continue to be a resilient growth posture. And I think it's -- this speaks to the somewhat strong trends we've seen in employment and for our business, the commercial pipelines, which are stable sequentially, but year-over-year continue to be quite strong. And so we feel, generally, pretty good about the economic environment. Even as clearly, we're all watching carefully and managing through it dynamically.

Maybe shifting and thinking a little bit about the internal opportunities. So at Investor Day, you guys highlighted a handful of things that came out of the TCF deal. You've gotten equipment inventory finance, you guys bringing back power sports, a host of other things. What have been the biggest surprises from the deal? And why do you think this better positions Huntington to succeed looking forward.

There weren't a tremendous number of surprises, I would say. We pride ourselves in doing exceptionally rigorous and detailed due diligence. And we had a strong point of view of the quality of the company we're buying, the credit quality was good and the businesses that we were going to bring in, were going to be quite additive to us. And so I would say if there's anything, it's a positive validation of those perspectives. On a couple of things I would highlight. One is the opportunity to deepen the Huntington product set into the acquired customer base. And importantly, those geographies, it's really bearing out and we're seeing that bear fruit, possibly will touch more on revenue synergies later, but we're already seeing them and are confident in achieving the guidance we've given there is high. I think secondly, particularly in the commercial space, the TCF was very synergistic in a couple of the product lines it had with legacy Huntington. So Huntington had always had an asset in equipment finance business. TCF had a smaller ticket equipment finance business and a great distribution finance business that supports dealers of powersports, home and lawn, garden equipment. When you put those businesses together, there's a really powerful synergy that we're seeing now as we go to market that's really winning. To give you a sense, when we put the 2 equipment finance businesses together, initially, we were the number seventh largest bank-owned equipment finance business, we're already now a year on #5, and we think we'll continue to gain scale and win in that business. And lastly, I would say, we acquired and deepened our colleague base with a lot of great leaders. So we feel in a position now to really expand and grow in those new markets.

So Zach, switching to the operating environment. Maybe let's start with loan growth. Maybe just talk about what you're seeing in the near term? And how are things up against the high end of the high single digits versus 4Q? And where do you see loan growth headed as we look into 2023?

Yes. Through the third quarter, we had grown loans just under 10%. And our guidance for the fourth quarter coming into this period was high single digits. I now think we'll be at the very highest end of that range, if not potentially into the low 10% growth rate on a year-over-year basis for loans in Q4. So they continue to perform well. The growth dynamic is very similar to what we've seen for the preceding several quarters, i.e., commercial led with commercial growing faster than consumer and again, pretty broad-based in terms of categories what we're seeing it within commercial.

So you're one of the few banks that are growing deposits, and I think you're expecting that to continue in 4Q and into '23 led by commercial. Can you maybe just talk about what is driving this? Can you continue to drive this through '23? And just broadly speaking, how are you thinking about managing funding into 2023?

Yes. Well, look, we are intently and relentlessly focused on our strategies of acquiring new customers and deepening our relationships with them, all with a goal towards primary bank relationships and it's working. We've seen 2% deposit growth through the third quarter. Clearly, the market environment around deposit pricing and the competitive environment for deposits has ratcheted up and we've seen that begin really in earnest in September and continue on into October and November. With that being said, we're pleased with the trends we're seeing in the underlying acquisition and deepening activities. We expect to end the quarter with deposit balances on an ending basis, about 1% higher than where we ended at the end of the third quarter. And again, similar dynamics that we've seen for the last few quarters, i.e., commercial led. That will leave ADB roughly flat on deposit balances, if not potentially down a couple tenths of a percent, but ending the year on a really strong point, and I think the launch off here will continue to support us. What we talked about at Investor Day, and we continue to have good perspective around is we expect to see loans growing solidly in the mid-single digits to high single digits next year and deposits also growing next year. And I think we'll obviously tune in that forecast and then provide more specific guidance when we get into January. But our perspective is that we'll see deposits continue to grow and in some degree, catch up on the growth of loans as we get into '23.

Zach, you mentioned that deposit betas had ratcheted up. When I think about it, you guys were in the mid-30s, really high-quality deposit base. And I think this time, you've talked about something relatively similar to last cycle. We've heard a couple of banks talking about the risk of it being higher, just given the level of Fed funds. If you think about where you're running in the mid-teens, maybe just talk about what you are seeing from an overall beta standpoint? And maybe if you could talk about it on a per product basis. And have your views changed at all since the last time we've heard from you?

Yes. So our expectations for beta were always that it would start relatively low during the early stages of the cycle and increase over the course of the cycle. And that's exactly what we're seeing. Our perspective on beta is it's useful to have a long-term forecast. I'll share what my outlook is in a minute. But what's more important is managing day-to-day in an exceptionally rigorous and detailed way and really focusing on harnessing the benefit of the power of the deposit franchise that we have and the really high incidence of primary bank relationships that we have, we should outperform, and that's our goal. And so far, we've been seeing that. Through the first quarter, we saw a beta of around 6%. Through Q2, it was 11%. We're seeing it increase a bit more, perhaps 17%, 18% by Q4. So accelerating a bit, but pretty modest, and generally tracking according to our plans. Over the long term, as we get through the cycle, our prior expectation as we were doing modeling and thinking about how this could play out was that the cycle would look pretty similar to the last one, i.e., around 30% beta. It's probable now that it will be a bit higher than that, maybe 35%, but still very well, allowing us to grow and support expanding NIM. And again, exceptionally rigorously managed such that we expect to outperform as we go through it.

Zach, if I look across my coverage, I think the performance of NII for Huntington was probably the biggest upside surprise in the space. Given where the initial guidance was earlier in the year and clearly now, you guys have had great performance. Markets are more worried about NII peaking. I know you've given us NII guidance for the fourth quarter that -- so it's a little bit of a slowdown, but still very, very good growth. Maybe just talk about your confidence in the ability to continue to drive NII growth? And what do you see as the drivers of this? And what level of margin do you think we will eventually reach over the course of this cycle?

So in terms of NII, we're seeing very strong performance in the fourth quarter. When you couple the robust loan growth with what I expect to see is another quarter of spread expansion into the fourth quarter, we now see our net interest income on a dollar basis, core NII to be at the very high end of our range that we had provided before, so low 30s percent growth, perhaps even higher than that modestly. So we're seeing very strong performance on NII growth. Our goal as we get into 2023 and beyond is to try to manage NIM to, a, be in the top tier of our peer group, which we have historically done and also to be within a relatively narrow range. If interest rates stay higher for longer and we continue to manage as we have been, we'll see our trend at kind of the higher end of the range. If rates fall for any reason, that's one of the benefit of the hedging program that we've been systematically adding to will begin to bear fruit and will help us to protect the lower end of that range. So we think when you couple that, pretty strong and narrow corridor for where NIM will be with continued loan growth, which is our expectation, we should continue to be able to drive NII dollar expansion, which ultimately is the core goal.

Zach, you brought up the hedging program. I think you -- the last update from me, you were about 70% done. Can you maybe just talk about what the -- what is left to do in the hedging program? And you alluded to this in the last question, but how does that prepare the margin for potential rate cuts in 2024? And broadly speaking, to what extent -- where can you protect the margin, too?

Yes. So through the third quarter, we had complete -- let me pull back a second. As we think about our asset sensitivity strategy, we were very conscious in late '21 to increase our asset sensitivity to benefit from rising rates. We did that. We more than doubled our asset sensitivity, we saw NIM expand quite significantly this year. That's throwing through hundreds of millions of dollars. We're approaching $1 billion of upside into the revenue as we go out into the future. And so really, really strong outperformance. Obviously, the flip side of that is if you look at back at history, medium- to long-term rates tend to fall pretty soon after the Fed finishes its rate-hike cycle. And so we also want to protect against that potentiality. We have been systematically adding to a downside hedge portfolio to protect against that to buy insurance. Through the third quarter, we were about 70% of the way through what could be a total portfolio of hedges. As of now, we're approximately 80% through. So we've continued to add to that portfolio as we've gone on. And we look at it dynamically week by week to ensure that it's the right trade-off of protection versus potential cost. Were we to complete the totality of the program to give you a sense of the scale of it, it's designed to protect about 40% to 50% of what would otherwise be lost in spread revenue in down 100 or down 200 basis point ramp scenarios with a roughly 4- to 5-year tenor starting now. And so that's the kind of protection value that we could get. We, as I said, manage it dynamically, and we'll see where we go. But we think it's the right program to all go back to the strategy of [ balancing ] the volatility in NIM and returns and maintaining a top-tier and NIM under most scenarios.

I promise this will be the last question where you have to say we had said in 3Q and now. So just maybe just to round out all the areas of guidance. So I think you talked about fees down a little, expenses up a little bit from the [ $1.04 billion ] and you already alluded in your prepared remarks on charge-offs. Just anything else that you wanted to get out there in terms of the fourth quarter?

So I'll just update on kind of the other guidance's points here briefly. In terms of fees, we continue to see fee growth to perform as expected and in aligned with our guidance of down low single digits on a year-over-year growth basis in Q4. Generally speaking, strong underlying performance in the strategic fee categories of capital markets, wealth and payments. And the Q4 modest down is really a function of our decision to hold on sheet as opposed to sell our SBA loan production. So consistent performance in fees. On expenses, we now expect to see core expenses for Q4 to be around $1.070 billion for the fourth quarter is my latest forecast. That's up about $25 million from the third quarter, about half of which is driven by very strong performance that we're seeing in Capstone. Capstone revenues are expected to be about $20 million higher quarter-to-quarter, which drives about half of that higher expense into the fourth quarter. And the other half of that expense growth is from seasonal growth in employee medical claims as colleagues use their medical benefits as they typically do at the end of the year and a couple of million dollars of our consumer branch restructuring costs from the 30 branch closures we've announced recently. Charge-offs have been 8 basis points year-to-date. We expect them to be another very low quarter for Q4 as well. And generally speaking, the credit portfolio looks exceptionally strong.

I appreciate all the color on that, Zach. So we said earlier, we were going to talk a little bit about revenue synergies from the deal. So that you guys outlined, $300 million uplift from TCF over the next few years. Maybe just talk about what you expect to be the key drivers and tend to be more than this over time?

Yes. At Investor Day, we tried to share some color on this, and there's a great slide in there that shows the kind of the rough breakdown of those revenue synergies across 5 major categories. About 1/3 of it comes from consumer. This is rolling out the Huntington consumer product set to the TCF acquired customers, more than 1 million customers and those really great geographies that they're operating in, the Twin Cities, Denver, much bigger presence for Huntington now in Michigan and in Chicago, we're seeing branch productivity levels, which were historically in TCF branch is about half as much as Huntington, write up a productivity curve and really drive significant value and great receptivity to the Huntington product set additional product penetration into the acquired customer base. So we're seeing that already. Another 1/3 is commercial. So building out and bringing the Huntington commercial product set, particularly into the growth markets for us between cities, Denver, in particular. And so those teams are staffed now. We're seeing great traction from that. The rest of the third is sort of in 3 main categories: Asset and Equipment Finance, which I touched on earlier, we're seeing great consolidated synergies; Business Banking, rolling out the Business Banking division into those growth geographies. To give you a sense we're already now just having launched 1 year, the #3 SBA loan producer in Minnesota and the #1 SBA loan producer in Colorado. So those businesses are doing exceptionally well. And then our wealth management business is also being built out. To give you a sense, we think that the revenue synergies will be about a 1% revenue lift for us on a CAGR basis over the next 3 years, generate around $300 million of run rate revenue. We think we're already seeing approximately $70 million in this year's P&L. So we have strong confidence and we're seeing the traction and that continues to grow.

So Zach at the Investor Day, you noted that 2023 should shape up to be a very good year. Given the tailwinds from higher NII revenue growth, our view is you should have high single digit to maybe even low double-digit revenue growth. I think this year, you're on pace for about 600 basis points of positive operating leverage. So how should investors be thinking about the levels of positive operating leverage historically we've seen in the banking system that in years of really good revenue growth, which this might be the last one of really good growth. We've seen companies accelerate investments. So can you maybe just talk to that? And I think maybe just clarify some of the comments you made about muted expense growth at the Investor Day. Maybe just clarify what the intentions of that were.

Sure. We have a strong belief that we want to drive continual positive operating leverage, and that's our posture. And so we will modulate expenses to grow less than revenue. Our general posture right now is to be operating at a fairly low level of core underlying expense growth. We think that's the prudent posture right now given the somewhat uncertain economic environment in the near term, and importantly, to position us to be on a position of strength to grow and to capture growth opportunities in any kind of recovery or that to come to pass over the course of next year. So generally operating in a pretty conservative and low level. And we're leveraging the model that we talked about before, which is driving continual efficiencies in the baseline operating cost of the company. We've got a number of programs underway where we're doing that, and it's really working to funnel outsized growth of expenses into the investment categories, technology development, marketing for acquisition and brand building and customer deepening and select additions of personnel in key growth areas like the revenue synergies we talked about. And so that flywheel is really working, helping us to drive consistent and sustained level of investments even as we drive a strong margin -- operating margin expansion through positive operating leverage.

So Zach, we've got -- it sounds like very good revenue momentum, very good expense progression. And you sound very confident in your outlook for credit, given all the changes that have been made in the portfolio over a number of years. Obviously, markets are worried about what could happen at some point in '23 if the economy does go into a recession. Can you maybe just talk about the parts of the portfolio you're most closely monitoring, levered loans, maybe parts of CRE. And are you seeing any signs of normalization that you're closely watching at this point?

Generally speaking, as I mentioned before, credit continues to perform exceptionally well. We think we'll see another quarter of lower criticized loans, lower nonperforming assets in Q4 and the kind of the discipline with respect to credit is deep and broad and consistent. There are, of course, areas where one could potentially hypothesize pressure points or watching those with extra vigilance. Our CRE portfolio in office, it's a relatively small portfolio. It's about 2% total assets we're watching, which generally looks very good. Most of it is actually in suburban offices, which have proven to be pretty resilient, but that's an area that we're watching carefully. No signs of concern at this point. Leverage lending is a small focus for us. And we intend to have -- we have a much more conservative definition of leverage lending. And we're focused on doing business with strong sponsors that we have deep and long-term relationships with. Again, there's no concerns we've got in that portfolio right now. Generally speaking, across the small business is another one, where we've got a strong small business franchise as we've talked about. And so those are businesses that are smaller, less deep financial resources, less optionality over time. So we're watching them carefully. No signs of stress that are apparent at this point to be pretty resilient. Across the whole portfolio, we currently expect to see charge-offs normalize, 8 basis points or through the cycle range and we've given this 25 to 45. So I would expect to see some increases. But we feel that with our credit reserve coverage level, 1.89% as of Q3, second highest in our peer group, leaves us in a really good position, both absolute and on a relative basis to manage through any normalization and charge-offs.

You just mentioned second highest reserve in the group, 1.89%. And I think your baseline forecast calls for a modest recession, followed by a modest recovery. I guess given that dynamic, how do you think about the trajectory of the allowance? And if we do see a modest recession, will the bank even need to build reserves outside that, for growth?

We'll see where things bounce around here. We're obviously watching the progression of economic forecasts, which has an important input into the CECL reserving process. But I think we might see a touch higher, a touch lower, we'll see, but we think we generally have it reserved well and correctly right now for what we're seeing in the portfolio to be conservative. So that's our posture [ with that ].

Maybe let's just spend in the last 2 minutes here, talk about capital allocation. So I think you noted at the Investor Day, the goal to bring the capital levels back to the midpoint of your 9% to 10% targeted range from around 9.3% today, I guess. Once we get there by the middle of the year, how are you thinking about capital priorities and capital distribution into 2023?

Our priority this year, given how strong loan growth has been and the terrific return on capital that's generating is to deploy capital toward that organic growth and importantly, to increase our CET1 level from 9.1% where it was in the second quarter, up to the midpoint of our 9% to 10% operating range by the end of the year. We are on track to do that. And we think that will leave us in a really good position as we go into 2023 to assess where we stand. The capital priorities are very clear and have not changed, fund organic growth, support our dividend and then all other uses. Historically, we've had a dividend payout ratio of about 70 -- about 40% dividends, about 30% share repurchases and around 30% retained to fund the balance sheet. I have every expectation we'll get back to that more normalized distribution mix as we get into 2023 and beyond. And I think that plan seems to be working pretty well. We're generating about 30 to 35 basis points of capital a quarter, which would well allow us to manage that model as we go into next year and beyond.

So there's a lot of great things going on at the bank. One of the areas that has been weaker for the industry at large is just in fee income, and you talked about it in your remarks. We've had service charge headwinds, slower mortgage, slower capital markets, although it sounds like you guys have a success with Capstone. What are the areas of the fee businesses you're most excited about into next year?

And I know we're running up on time, but I think capital markets is performing exceptionally well. I mentioned the Capstone just continues to gain a lot of traction. We're feeling great about that. Our payments business is getting a tremendous amount of focus and is not only a great fee engine, but also an important deepening and tool to drive primary bank relationships back into the core banking franchise. So that's a strong area of focus, and we're seeing great traction and then wealth. We're really pleased with the traction we're seeing in our wealth business. And I think a lot more near-term announcements to come around that in terms of new tech capabilities being rolled out and some pretty interesting new product development. So we're really bullish on those 3 strategic growth categories.

Great. Well, tell Steve, next year we're only inviting you. A great job Zach, and thank you very much for your time.

Appreciate to chat with you. Thank you so much.