Good morning. And welcome to the F.N.B. Corporation's Third Quarter 2016 Quarterly Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Matthew Lazzaro, Investor Relations. Mr. Lazzaro. Please go ahead.

Thank you. Good morning, everyone. And welcome to our earnings call. This conference call of F.N.B. Corporation and the reports it files with the Securities and Exchange Commission often contains forward-looking statement. Please refer to the forward-looking statement disclosure contained in our earnings release, related presentation materials and our reports and registration statement filed with the Securities and Exchange Commission is available on our corporate website. A replay of this call will be available until October 27th and a transcript and the webcast link we posted to the About Us, Investor Relations and Shareholder Services section of our corporate website. I will now turn the call over to Vince Delie, President and Chief Executive Officer.

Welcome to our conference call to discuss our third quarter results. Joining me today is Vince Calabrese, our Chief Financial Officer, and Gary Guerrieri, our Chief Credit Officer. We are very pleased to share the results of another record-setting quarter for F.N.B. as EPS grew 9% to $0.24 per share and net income exceeded $50 million for the first time driven largely by record revenue of $213 million. We also continued our streak of 29 consecutive quarters of organic loan growth and 15 quarters of total revenue growth. Third quarter revenue was supported by continued growth in our fee-based businesses, notably capital markets, mortgage banking, wealth management and insurance. The quarter’s efficiency ratio of 54% reflects benefit of increased revenue, continued diligent expense management, and the full realization of the targeted cost savings from the Metro and Fifth Third branch acquisitions. Return on average tangible common equity and return on average tangible assets on an operating basis also improved from the prior quarter to 15% and 1.1%, respectively. Looking at the income statement, non-interest income was a record high at $53 million, representing a 29% increase from the year-ago quarter. This success is largely attributable to the performance of our fee based business units. Our bankers engage in a planning process that involves identifying products that fulfill a client needs, and are committed to providing high-value fee-income services, with the best interests of our clients in mind. This approach enables our customers to most effectively manage their banking relationships and fully utilize our diverse product set as specific needs arise. I’ll note that in regard to the expected Yadkin acquisition, we conservatively modeled limited revenue synergies and utilized the current interest rate environment for five years, thus providing FNB with an opportunity to outperform the financial model and drive additional…

Thank you, Vince. And good morning, everyone. The third quarter of 2016 reflects another successful quarter, with our credit portfolio favorably positioned as we approach the end of the year. We ended September with total delinquency at 1.33%, reflecting a 13 basis point improvement over June, while NPL’s and OREO at 92 basis points also moved favorably over the prior quarter’s results. GAAP net charge-offs for the quarter totaled 33 basis points annualized, and on a year to date basis, were 27 basis points, both satisfactory levels. Let’s now take a closer look at the results for the quarter. Turning first to our originated portfolio, the level of delinquency at the end of September improved slightly from the prior quarter to stand at a very good level at 1%. NPL's and OREO also improved, down seven basis points on a linked-quarter basis at 1.08%, which was driven by strong commercial OREO sales activity. Net charge-offs for the third quarter were elevated at $12.3 million, or 41 basis points annualized, as we were able to move some rated credits off the books at slightly better than positioned levels. The total originated provision was $14.1 million, which covered charge-off activity in the quarter and organic loan growth, resulting in an ending originated reserve position that is down slightly from the prior quarter at 1.23%. Let’s now move to our acquired portfolio, which at the end of September, totaled $2.6 billion outstanding marked to fair value. We saw some very positive activity during the quarter, as evidenced by an $18 million linked-quarter reduction in contractual delinquency, bringing the level of past due accounts to $75 million at quarter end. The acquired reserve was up slightly, ending September at $6.4 million. Inclusive of the credit mark, the total loan portfolio remained well covered at…

Thanks Gary. Good morning, everyone. Today, I will discuss our financial performance for the third quarter and comment on our guidance for the fourth quarter. Looking at the balance sheet, organic total average loans grew 7.6% annualized, a solid overall result with growth in both commercial and consumer lending. Organic growth in the consumer loan portfolio of 13% annualized was seasonally strong led by increased origination volume in both residential mortgage and indirect auto lending. Organic growth in non-interest bearing deposits of 6.9% annualized was offset by a planned decline in time deposits. In total, average deposits declined 1.4% annualized in the third quarter, given our desire to strategically exit certain higher cost and unprofitable acquired depositor relationships. On an organic spot basis, total deposits grew in the mid single digits. From a total funding perspective, our relationship of loans to deposits was 92% at the end of September. Turning now to the income statement, net interest income grew $3.1 million, or 2.0%, benefiting from the quarter’s solid organic growth in total average loans of 8%, which was partially offset by expected margin compression given the continued low rate environment. Our net interest margin on a reported basis equaled 3.36%, compared to 3.41% in the second quarter, while our core net interest margin narrowed three basis points to 3.32%, in line with our previous guidance. Let’s look now at non-interest income and expense. Noninterest income in the third quarter was a record high for FNB, increasing $1.8 million or 3.6%, as insurance, capital markets and mortgage banking performed especially well. Investments made in these businesses continue to pay off with significant upside opportunity available in the newer metro markets given the absence of these high-value businesses in the banks we acquired in Maryland and Cleveland. Commercial interest rate products experienced…

[Operator Instructions] And the first question comes from Bob Ramsey with FBR.

Hey. Good morning, guys. I guess first on the Yadkin, just wondering if you could provide any update on the deal timing. I know you said first quarter. Are you shooting for the start of the quarter, the end of the quarter? And kind of how is the regulatory approval process progressing?

I'll take that answer. It's Vince Delie. I think things are progressing well. We are not changing what we've initially told you. We are still targeting the first quarter. And as I said on the call in the prepared script, I am very pleased with the culture of that organization; the quality of the individuals that work there, their commitment to the overall organization performing at a high level is evident when you meet them. I think that the leadership positions that we've announced really clarifies, truthfully clarifies who they are going to be reporting to in the field. And we've lost very, very few producers. So we are very pleased with how that's going. On the integration front, if you look at the organizational structure and our ability to craft a clear path to the cost take up, we are there, we have structured, we have our organizational structure in place. We have a firm grasp on run rate salary expense moving forward. We've identified people to step up into the product roles that that we will be embedding in those units in North Carolina. So everything seems to be going very, very well. From a conversion standpoint, we are well down the path with mapping, product mapping and our IT system's operations areas have done a terrific job of laying out again clear path to conversions. So we are moving forward as normal in a transaction.

Okay. Shifting to net interest margin. I know you guys said you expect two or three bits of compression in the fourth quarter. Is that sort of the pace that we can think about on a go-forward basis until rates move? And if the Fed does raise rates by 25 basis points in December, how does that impact the outlook?

Yes. I would say with rates where they are and without any Fed move the two to three basis points is right where we are tracking. The differences between rates paid for loan on maturing and new rates or it is narrowing but it's still 25-30 basis points difference there. In our investment portfolio there are still 20 basis points or so difference between the stuff that's rolling off. We have about $1 billion a year rolling off in a 12 month period versus the purchase activity there is 20 basis points. So when you kind of roll it off together the 2 to 3 basis points is kind of what baked in right now? I mean if the Fed moves in December you get a little benefit for the core. But really that benefit as you see from our core margin slide, we picked up a few days as points from fourth quarter to first quarter with the Fed move last December. So there is some benefit there but that would really show up in the first quarter. And we will give full guidance from January for next year.

Okay. Great, so maybe it's fair then to think that if the Fed moves this year like they did last, you would see a similar lift. But that all else equal, 2 or 3 basis points per quarter would continue through next year if rates don't move.

Well, first remember two in the first quarter, you have Yadkin become part of our number so Yadkin's margin is a bit higher than ours and that would add a few basis points to kind of the overall margin at the company. So you kind of have both things showing up in the first quarter.

Yes. Then shifting to the loan growth, you guys obviously had really good consumer loan growth this quarter. Just wondering if you could elaborate any on what were really the drivers behind that. Was there any increased marketing or promotion? Were certain geographies stronger than others? Is there something you're seeing from consumers that is sort of driving this? I would just love any qualitative comments.

Well, I just think the overall we've seen lift across the board truthfully. And I think consumers for whatever reason have become a little more active in terms of their desire to borrow. And given the broad geographic area that we cover and the number of branches that we have, it is logical to see when that occurs to see an increase in lending activity in those categories. So I wouldn’t say it is in specific area truthfully it seems to be pretty steady across the board. And I think it's largely driven as far as we can tell from consumer demand. We don't have -- we don't run special campaigns or promotions in the retail bank. We set our goals at the beginning of the year. We give our sales people 12 full months to achieve their sales objective. So that they can plan with their clients. So any increase truthfully would be more driven by consumer demand than anything else.

Thank you. And the next question comes from Jason Ong with JPMorgan.

Hey, good morning, everybody. I would like to stay on the topic of loan growth real quick. On the organic commercial side, the last few quarters we have seen loan sales. Can you just quantify maybe how much that was and thoughts on sales going forward?

Yes. In the last couple of quarters you are looking at about $60 million where we are able to move some of the rated assets that I mentioned earlier Jason off the books at economically positive results. So it was a win-win for the company from both angles taking risks off of the balance sheet as well as being positive from a performance standpoint. So we looked at those as no-brainer, that was a strategic focus of ours coming out of the Metro acquisition and we were very pleased with our ability to execute on that plan.

And the majority of those assets were in the acquired book. They were not originated assets. So it was a planned item.

Right, so should we expect that to be done with or tapered off now, then?

Yes. At this point we don't have any plans for anything on a go forward basis.

Okay. Great. That's helpful. Shifting gears to noninterest income, mortgage banking was pretty strong in the quarter. I'm just curious if you could give us some color on what the volumes were and maybe your gain on sale margins?

Well, our volume year-to-date as of $930 million was approaching a $1 billion so production volume was up clear significantly, $417 million for the quarter. So mentioned, got it, it has to be at least two years ago that because of the sustained low rate environment, we were investing in our mortgage operation. We felt that there would be an opportunity to kind of hedge in extended low rate period with enhanced mortgage banking activity. So we did that and we've grown production there. I mean our annual production in the past was only -- it was very small, was about $350 million. So that particular investment has paid off for us, the production up considerably and the gain on sale that you are seeing in servicing fee income is also up significantly over that period. That helped us.

Okay. And with respect to all the investments that you've made, if volumes continue to trend up in this --

Yes. We invested in our syndications, platform, we are approaching I think $1 billion in less lead syndications in total. We also have built out the international area; international banking was an area of focus for us. We outsourced a lot of that activity in the past. We brought quite a bit of it inhouse. And that's provided us with a fairly significant benefit relative to zero which is what we got very little in the past. So that's taking off and continuing to grow. We've invested in our derivatives sales team and our capabilities there. That's continued to contribute very nicely to the fee income line. And then a number of products that we rolled out in the consumer bank, many of the products that I mentioned from a mobile perspective. We are trying to keep pace with JPMorgan and Bank of America and others. I think we have a great product offering that's led to customers expanding their relationships with us truthfully. So while there is an initial investment in that technology it starts to pay off over time, so the consumer segment in terms of interchange fees and other areas ATM fees that we obtained has gone up as well.

Thank you. And the next question comes from Brian Martin with FIG Partners.

Hey, guys. Just wondering a couple of things. On the loan growth, we think that with some other banks maybe there is a little bit of like a slowdown in some of the C&I lendings. Just kind of wondering your take on that. If you can talk about that, if you guys are seeing any of that, or if it's kind of pretty normal based on the flows you're seeing. It sounds like the pipelines are strong at $2 billion heading into the quarter. So just curious if you are seeing any of that within your footprint.

Yes. I would say C&I demand has tapered off to be truthful. Earlier in the year there was more robust activity I don't know if it is uncertainty around the election or concerns about the economy who knows. But it seems is though demand has begun to taper. We are still because of our strategy; our strategy was to not rely on one particular geography to drive growth for us. That's part of what led our acquisition strategy took us into Baltimore and Cleveland and now into Charlotte and Winston-Salem and other areas. It is the desire to not be reliant on one particular asset class or one particular geography from an economic standpoint to drive loan growth for the company. That strategy has paid off for us because it's enabled us given our relative low share in the commercial segment and the cities, and even today in Pittsburgh we have a much larger share. But there is a long way to go. It provides us with the ability to focus on growing those portfolios at a rate that you would see probably beyond some of the larger banks that have heavy concentration of share. So our relative share from a deposit share standpoint relative to the commercial loan share is provides us with the ability to grow that loan share at a more rapid rate. That's really the thesis behind our M&A strategy, we mentioned that to a number people and it seems to be paying off. I don't Gary if you want to comment on.

No, I mean we are seeing and we've talked about this a little in the past. We are seeing significant increases in credit opportunities due to the investments in these newer markets that Vince has mentioned .The other thing that it is allowing us to do is to maintain our very consistent underwriting and credit decisioning practices and process because we are seeing so many new opportunities out of these newer markets and the investments that we've made in Cleveland, Baltimore and soon to be in North Carolina. So it's really panned out very well for us from a credit opportunity standpoint. And while C&I demand seems to be down ever so slightly, our portfolio and our pipeline continues to be very robust.

And I'd say based upon the Greenvich survey results, that's consulting firm that surveys the market that we compete in. We received I think a total of nine awards. So our commercial bank is perceived in those markets as a player. So we get -- we are first in thought, so we get to look at many of the transactions that go on in all of those cities just like some of the other large competitors. So I wouldn't discount the fact that we have very good people in the field that we've a very deep product set and very high customer satisfaction scores across the board. That helps us.

Okay. Thanks for the color. And then maybe just one other question, just going back to mortgage for a minute. Obviously, the environment has been helpful this year on the mortgage side certainly the investments you guys have made have also contributed. But just thinking about next year, just in general, does it seem reasonable that you guys can kind of sustain the type of mortgage gains you're seeing this year? Maybe not grow it next year, but maintain based on current trends and pipelines you're seeing? Or does that seem out of the question?

Well, I think given the expansion that we are embarking upon, that gives us tremendous opportunity to continue to grow that business. In addition to that the majority of our originations have been purchase money originations. So we are really little more depended on housing market than others. We are not simply refinancing all of our customers. So very high percentage fortunately two third. So I think that model we have works given our share, our deposit share in those markets that leads to opportunities from a mortgage perspective and we truthfully undeserved the markets we are in given the size of our mortgage operation prior to the investment. So we are simply benefiting from right sizing that organization. So clearly I believe it is sustainable and I actually feel that moving into markets that have a higher growth trajectory in terms of -- and remember our existing footprint doesn't grow population wise. That moving into the South East gives us tremendous tailwinds. So we can --

I was looking more on a core just kind of legacy basis as opposed to with certainly with the [Multiple Speakers]

On a legacy basis, I think we are getting our fair share based upon our deposit share in the markets that we compete in. And I still think there are some upsides. So I think our people done a great job building market share in those markets and really making it equal to our deposit share as you look at what we should have in terms of our piece of the total pie.

Okay. Perfect. And maybe just the last one for me. Can you just talk about, I mean, obviously the efficiency ratios track nicely based on leveraging the investments you've already made. But as you think about it, as you integrate Yadkin, just how you're thinking about it, bigger picture, how that's going to trend over the next four to six quarters.

Yes. I would just make a few comments on efficiency ratio. I think 54.4%, very strong performance this quarter. I think a combination of the Metro cost savings that we talked about earlier as well as the contributions from the fee based businesses in a flat rate environment really were key to that movement in the efficiency ratio from a second quarter to the third quarter. As we've talked about in the past the acquisitions have clearly created scale which enhances the positive operating leverage we've already generating on an organic basis and allows us to continue to see the improvement in efficiency ratio but also in our bottom line earnings and our returns. The new markets we continue to have significant revenue growth prospects, and remember Cleveland and Maryland when we added those markets, they didn't have much in the way the banks that we bought, the fee based businesses so we've been starting to build there but there are still lot of upside there. And even while we are doing this we are investing in a franchise. So we continue to invest in our people, we are investing in infrastructure, so that's support not just where we are but kind of the growth that the company. So I think there are still opportunities, obviously when margin start to expand a little bit, there is opportunity in the efficiency ratio, and top of all of those things we focus a lot on renegotiating contracts as we've gotten a lot larger. We have more leverage than we had before. That's a continuous focus and there is a lot of things we are focusing on process improvement is something we've been --

Branch optimization

Branch optimization is a continued program we have. So I mean there is still opportunity there that continues to improve it.

Okay, in the first clean quarter with the expense savings from Yadkin, what would you guys be targeting for that to be the first clean quarter? Would that be the third quarter of 2017, assuming the transaction is completed as you are targeting now?

Yes. Third quarter would be good coming quarter.

Thank you. And the next question comes from Casey Haire with Jefferies.

Hi, good morning, guys. So Vince Calabrese, a question for you on the Yadkin quarterly expense rate. If I heard you correctly, you said $30 million? That's decently better than what I was expecting. Has there been any change? I think you had said 25% cost save number with a ramp in the 2017. It sounds like third quarter 2017 will be full recognition. But at $30 million, that seems better than that 25% cost save. And then also, is that a cash number, given that there will be intangible amortization expense with this deal?

Yes. I would just say there has been a change. I mean that number is kind of all ends with the 25%. Remember, part of the noise in Yadkin's number in the first quarter due to NewBridge transaction, so you haven't seen all of those cost saves. So there-- even today there are expenses are still elevated including the NewBridge cost. So the $30 million is GAAP number kind of where we would be after the 25%. And as Vince commented on earlier we have a very clear path to that 25%. We've already identified how that will be accomplished and kind of plan our place. So it is not change, it is what was baked into the model from the beginning. So this is just kind -- you have a couple of steps to get there in case given that the timing of the NewBridge acquisition.

I think remember today we mentioned we build the model from the ground up. So we essentially reconstructed the organizational structure and build the salary expense from the ground up by person. So because of the noise with NewBridge. So we have very firm grasp on where we are going to be and the biggest component here is salary expense. So we have a very, very good grasp on where we are and I think Vince's number is solid. And it ties right into what we had in our initial modeling. And I think there was a lot of noise as I mentioned on the call last quarter because of the phasing and the cost take outs for NewBridge as Vince Calabrese mentioned which is why we are telling you what that number is here.

That's what we gave you the number because [Multiple Speakers]

We think people were confused and I think it will help clear things up for them.

Yes. I mean like the starting point I mean the expense run rate for Yadkin in the second quarter was 43.6%. It sounds like the right number; the starting point is around 36%, to get to this $30 million run rate addition in the back half of 2017.

In press release you will be able to figure that out I think as they illustrate what the operating run rate is from the net income standpoint. They also call out, they obviously breakout their expenses.

Okay. Switching to credit, apologies if I missed this; I jumped on a little late. But I appreciate the provision guide going forward on the fourth quarter. Can you just talk to what is the underline -- what sort of -- what's the outlook for net charge-offs? Because that did tick up a little bit, and non-accruals did go down. So the quarter just seemed a little bit mixed on credit quality. Just a little color on how you guys are feeling about asset quality.

Yes. In reference to the charge offs, Casey, as I mentioned in my remarks they were slightly elevated due to us exiting that pool of loans. So we took advantage of an opportunity to exit small pool of loans about $30 million which we had reserved for naturally and that reserve was flushed through the charge off line. We were able to exit that pool at better than reserve for level so it was really a no-brainer to derisk the balance sheet and to generate positive economic benefit. So that number was right at about $3.2 million for that one transaction. So you can see that's what elevated that a little bit. As far as charge offs, if you look at our annual averages that I referenced earlier in the call comments, I'd expect that will -- that performance will continue to show very nicely as it does from a year-to-date basis.

Okay. Great. And just last one on capital. I get a lot of questions about your capital adequacy. I know you guys have always run very capital efficient. Are you still feeling good about capital? Not just with the TC in the mid-6% level, but also total capital getting close to that 12% sort of, which is a threshold for others. Just some overall thoughts on capital adequacy going forward.

Yes. I would tell you we still feel very good about capital, investment thesis that we reaffirmed regularly is still intact. We are going to manage capital efficiently. Under Basel III, under DEFAS, we just filed our stress test results and they show the strength of running a lower risk model with the quality of the underwriting that we have underneath. I mean our worse ratios is in the nine quarter are not only comfortably above minimum, they were above well capitalized levels. So I mean that's a key part of why we manage capital the way we do because of the strength of the risk management not just underwriting but the enterprise -wide risk management infrastructure throughout the company. So we feel very good about capital. The levels that when we do our model any M&A actions, the ranges that we use we are right within that and with Yadkin onboard we are right within those ranges still. So we still very comfortable with it given the overall strength of the risk management in the company.

Thank you. And the next question comes from Collyn Gilbert with KBW.

Thanks. Good morning, guys. Just a quick follow up on the capital question. It sounds like you are comfortable as the profile of the bank stands today. Is there a trigger as you guys kind of look out at the sort of the lifecycle and you get Yadkin under the hood? Is there a trigger or a catalyst that you would see yourselves raising some form of capital, either common equity or sub debt?

No. I would say that we've talked about the ranges in the past and that's what we managed to. We TC 6.5% to 7%, leverage 7.5% to 8%, total risk based capital in that 11.5% to 12.5% range. Tier 1 comes in 9% to 9.5%, I mean those are kind of the operating ranges we've used to manage the company and we used it when we model M&A. So those are something fell below that we would raise capital. When we did part well we raise capital for that. We haven't had to raise common equity since than and as you know regulators have approved every transaction we've done. We are comfortable with it. They have been comfortable with it. So I mean those really the operating ranges calling every use when we model M&A.

And we are not focusing on -- we are not actively pursuing M&A.

Yes. That's a good one.

We have a transaction in front of us here that we want to integrate and really benefit from the investments we made. So I don't see us changing our stands on capital here.

Importantly, Collyn, to that point, to Vince's point with -- we are focusing on the Yadkin integration, that's really -- plus the organic growth in the rest of the company are really the key focus is. And Yadkin kind of at closing, we would expect based on their current ratio, their cap ratio is higher than ours. So that we will get some build from that actually as opposed to detracting, so I think that's an important point too.

And as Gary mentioned in his prepared comments, our goal here is to drive accretion through exit of distressed credit and prepayments in that portfolio which I think we do a good job I mean we assessed the risk appropriately upfront to take off the table and then we worked the portfolio to ensure that we get the appropriate benefit down the road. That helps as well.

Okay. That's helpful. Gary, I know you've gone through this a couple of times; I just want to make sure I understand. So the rationale for exiting some of these credits, I understand that you were able to exit them at values better than what you anticipated. I am just trying to reconcile that yet with the increase in the net charge-offs. Because it would suggest maybe that you did have to exit them at levels lower than where you maybe were carrying them. I just want to try to understand that a little bit better.

Yes. In terms of rated portfolio, Collyn, any rated credit is going to carry a higher level of reserve based on an increased level of risk within that particular transaction. So as you move through various stages of risk in a credit, we build reserves against it in the normal course of business. We were able to have a small pool of loans here again $30 million, some of these were originated a smaller piece of the pool. The majority of them were originated loans that have reserves and marks against them. So when you add that pool together, you got a credit mark i.e. against the total. We were able to liquidate that portfolio, take that risk off the table and we generated cash payments against it that were better than those previously reserved and marked position. So we essentially freed up, we freed up reserve levels in that transaction. So it was an economic benefit to the company. We reduced criticized asset levels with it and as my earlier comments, it is win-win for us, we also stop spending money on it to collect it going forward. So it was a very, very simple trade from a decision standpoint to move those assets off of the book.

And just to clarify, Collyn, I mean even on a loan that you have perfectly reserve for, you are still going to see a run through charge off just counting the way it runs through, it is going to come through charge off even if it is zero [Multiple Speakers]

Yes, right, okay. That makes sense. Okay, and then Gary is it just as you guys look and I know you're at the tail end of this exercise, so this is maybe a moot point, but just to understand how you think about it. Was there anything in particular about these credits that caused you to put them out of the bank? I know you had indicated they were acquired credits. But was it just the overall profitability of them? If it was something you saw from a sector perspective or an individual borrower perspective? Just want to understand what the impetus was on these specific credits.

Yes. I'll walk you through that, Collyn. In terms of the pools of credits that we have moved off the balance sheet. Let's go back to the due diligence done from the Metro transaction. During our due diligence process whereby re-underwrite anywhere from 70% to 80% plus, 85%, 90% in some instances of the entire commercial credit book, where we do a full re-underwriting. During that process, each of the credits that becomes a rated credit in our analysis and based on our underwriting, it is thrown into a pool. Our team goes through that pool and at the end of the day, they make a recommendation that I sit down with them and go through each individual credit. At the end of the day, we will look at those credits and put them in exit pool. It's best done at a time of time due diligence. Going back to the March timeframe, we acquired Metro in early March I believe. We sold $100 million portfolio before the end of the first quarter. So you can see the work that was done during that process. So we'll go through that, we'll list them based on individual credit risk and credits that do not fit our profile that we want to move off of the book.

And Collyn what's you are weighing on an individual credit by credit basis is your ability to recover versus the reserve that you placed on the credit. And the economic environment that you are in, or the particular industry that you are in. It is all over the board. But when you are selling these loans, Gary's objective is to take the risk off the table and he does not feel that it makes economic sense for us to hold and work through them over a long period of time.

And one final comment, Collyn, for this piece of the discussion. During the Metro due diligence process, we identified $160 million worth of loans that we wanted to exit. We were able to exit a few of those just organically. We moved them off the balance sheet without having to liquidate them. We sold approximately just shy of $150 million. And the important thing to understand here is in terms of that transaction if you group them all up, we were within a few hundred thousand dollars of the original credit mark over that whole group of loans reflecting the importance of the due diligence and the understanding of what these assets are worth through that period. So we essentially hit the nail right on the head from a credit market perspective.

Thank you. And there are no more questions at present time; I'd like to return the call to the management for any closing comments.

Well, yes, thank you. This is Vince Delie again. I appreciate everybody participating in the call. And again I'd like to congratulate our entire team for the effort that they put forth through the first nine months of this year. This is a very challenging environment in the industry. And our people step up at every turn and the culture and the attitude of our organization is very positive. I think it's reflected in the awards that we've won. And again I am looking forward to bringing the Yadkin employees on and we are very excited about their high spirit as well. So looking forward for good things down the road. Thank you again for participating. And take care.

Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.