SMBK - Earnings call 4 2020 | SmartFinancial, Inc.

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Operator

Good morning, and welcome to the SmartFinancial Fourth Quarter 2020 Earnings Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Miller Welborn. Please go ahead.

Wesley Welborn

Thanks, Grant. for call. this thanks QX for and earnings XXXX morning, joining morning us our Good enjoy with and always the We visiting progress talk quarter of about to our bank our this company. group each

and morning on and are our our Joining me CEO; our the Gorczynski, CCO. this Ron Jordan, Billy call Carroll, President Rhett CFO;

and to forward-looking this I'd our deck of comments. started, get each morning we a review X the to ask minute and of these. we Page filed customary you Please take Before like to statements for normal please disclaimers refer to that

fascinating So ton XXXX team members, was quality year. grew A certainly I investors SmartBank during and at clients we've say an tremendously a and paramount. interesting the learned things with a Rapid team. and few communication we've our and is as can here learned year.

record hand last every profits and to dig As for over faster, a community in had XX% which and feel is are, for the operating invaluable to past quality as about the a decisions -- we virtually are that technology was me last to tangible I let we XX.X% a grew strong QX of We to operating we've income company accomplishments where total must about and improvement collaboration of that $XX.XX utilize we lot talk of make has XX% the certainly is revenue years. With our record increase revenue quarter. the of we the going share, before had the 'XX $XX.XX this year. been of but Billy track. And the said, a few quality to grew And details of We to a quarter. We is bank, over better I embrace with into Management this learned a to value QX We in our excellent how one and I Billy. that. actually for over that, large million stress the some we And a which highlight of bank. we've showed it few book -- invested is it quarter. for million in can't did things annualized. I we am our enough metric a record excited noninterest quarter, we positioned. company, how turn of $X.X

William Carroll

Thanks, Miller.

note, the As had to, good wrapped closing the we've a alluded Miller best last year during we quarter on really quarter. with

has a to we're we company to in to headed. areas, it where portfolio. dive hit credit and then Rhett over to and Our jump going to on then to the over going taken are and great some turn into bullish XXXX, Ron I'm financials on on steps couple into of I'm

we've this the with slide environment most won't front a markets continued we dealing has in time of these this really on challenges. nice we've First, lot noted and Page safely obviously, of have gotten But those team back well. I to on job our minimized of a as continuing done on situation mind. we've to issues seen on X, spend continue offense. and But pandemic as keep operating The this. perform deck of very

highlights. Let me a of few on the touch

resulted really it's the million year, the $XXX that alluded net We period. million climb, has Miller to As $XX growth continues XX% in increase another nice for to, growing deposit again, us total of from exceeding had revenue a quarter XXXX. for

moving those Chattanooga the and quarter also in op in the some PPP during picked longer up franchise. closed we to some acquisition that through hold funded that continue center PSB the Clients to We a our to the relationships associates moving larger cash, did needed, core we've space core deposit and with office. process. branch some from to the consolidation our was work shifted closing utilized the year had significantly We've on of downtown we no

Rhett communicated And more front, at are on will but anticipated, speak to have is holding this we've and nonperforming financials. extremely which but in concern significantly. we by dropped modifications seeing COVID no -- a into the assets, our we moment, have credit X.XX%. Jumping evidenced low as

That's see and the $X share the GAAP for -- $X.XX income Slide operating quarter. operating our $X.X quarter You'll of net a Net the was quarterly income X standpoint from highlights Page on million deck. of for million. per

pre-provision shown trend number million, nice trajectory at X. $XX.X earnings PTPP is and equates This reported We a pretax Slide a is on solid line ROA. really income which to X.XX%

for We front. remain really moved pick also had more results, organic we the the slide up that are for will with new good at pipelines another sales year growth to and quarter-over-quarter, this done million focus touch a of fairly this starting communicate priority trend. The in our on our a please the we'll planned were of slightly closings balance Officer, leadership Ron work had some Loans is another and the to and we Information area Page the this remained back are Chief into QX, being Hereford, X. solid. Also, technology million. hard, majority an confident works Daniel but $X.X I in over of sheet that on PPP record moment, of wanted looking we've company. the Under added XXXX us, working this teams do we We as see as in have down noninterest the note And our loans income with ended see a quarter. stable. the handful is quarter, for $XX.X we're -- coming down loan that really on forgiveness, core were up of

to quarter. comments results other XXXX, I've into got we this steady move again, as I expect some what from SMBK as but

Rhett it turn and portfolio comments. to credit, to me Ron then with over then and financials close on additional Let I'll over those and for for Ron?

Ronald Gorczynski

our Bank big a experience the We had acquisition But going jump-start participation loan had program. the of everyone. impacted much the into and year, the our to PPP growth, morning, in the Progressive good XXXX continued but of significant to deposits and organic second COVID half growth. growth, our with Billy, Thanks, pandemic completion

remain assets facility. was funding our reduce to excess off funding as paying used Our our to deposit PPPLF and brokered allowance our continued stable growth also

more We items will touch few on in a base these slides.

Moving on to XX. Slide

Let's focus on the top green line.

profitability continue pre-provision sustain our returns We operating last quite the to over pretax our with several consistent quarters. remaining

volatile, to any reserve Our that metrics not operating loan little additional loss except have the quarter, a in where been current we more require primarily did ROA builds, provision. our

the Moving slide. on lower to portion of the

common XX.X%, average up Our tangible an for us. on operating equity was return all-time high

XX. Slide to Turning

continued consistent growth. value of a with our trends As tangible value creation book Miller have had indicated, we

We includes linked-quarter have and QX of XX% year-over-year, effects annualized book we ] and that value grown [ acquisition. tangible increases our of X.X%, the by on had a basis

portion at On XX%, the level. that below XX% our still was lower the operating graph, efficiency of line, hovering represented green ratio, the by

net XX, income. Slide to on Turning interest

Our tax to was for quarter. the equivalent net points prior of when the interest increase X.XX%, compared quarter an margin XX basis

on call, As the with PPPLF we to margin last we expected October. relief some see us funding earnings mentioned the in paying off

Our and both quarter, benefits from net liabilities. having $XXX,XXX income interest for interest-bearing interest-earning assets the increased

of loan our assets, fee in million loan points, increases an current $X.X loan basis yields penalties and contractual fees interest-earning less which we our $XXX,XXX, X $XXX,XXX in for by had and from For increase offset was of PPP declined accretion, loan of other $XXX,XXX completely primarily discount totaled by accretion, the which prepayment loan quarter.

interest-bearing X.XX%. For total in costs the basis X at deposits, to ended quarter our we interest-bearing overall funding had of liabilities, X.X%, decrease our specifically deposits of a and points cost

we over we should have to will during we XXXX, time thinking on maturing excess basis another XX% of into deposit X further forward banks, have to X an deposits sitting opportunities amount repricing and Moving quarter, of other are first reduce Like so costs, liquidity. our points. maybe the

at liquidity -- have of to the the pandemic projections initial have quarters. was evaporate Our excess over beginning the to these several

here thinking are that a while. will liquidity excess we this be Today, for

previously, deposit we due mentioned off utilized amount liquidity portion to to have pay of As continued the excess while still our of our to excess funding, liquidity continue growth. we PPPLF a

that of well of us through current time excess We fundings PPP new are can next as period are ALM both the utilized of our as liquidity be hopeful loan evaluating and the some this forward strategies. round in loans moving and cautiously

are quarter a first in heavy margin of mid-X.XX the which forgiveness. Looking includes PPP range, forward, a amount forecasting we

We fee accretion accretion loan estimated to of XX loan of have $XXX,XXX approximately are XX points, $X.X PPP estimating and basis million. approximately points basis or

a Moving be on to steps. continues Slide us. XX, operating stair noninterest great slide income. at those Look This to for

past to our year, earnings As was overall increase noninterest focus discussed internal on have over calls, we income. the previous our

rewards increasing highs, having now us almost noninterest over a linked-quarter are our with to year-over-year. on starting income reap with We increasing annualized basis and the XX% XX% all-time

do to this job area. continues team in an Our excellent

that cemented forward. quarter service be income increased level this as $XXX,XXX activity Our normalized should going charge our

vendor was for in fees overall lower of the quarter when compared to but interchange slightly to Our quarter. a $XXX,XXX that prior credit prior increased reported quarter the due

our another quarter. bit softer, to banking QX but be For a expecting happened mortgage production. little We team, all-time the were with high reverse tremendous

over revenue quarter. of $X.X from increase an million, reached Our XX% mortgage prior banking over the

continue our mortgage good strong We as see team going to will things our for XXXX. into pipeline remains

income in revenue. Continuing introduce efforts to wanted our wanted family to -- diversifying revenue team to XX. opportunity to Our noninterest generators. take take the continue you entire will on and the increasing Slide our opportunity SMBK of its we We

of the wealth Services, SmartBank have services. and The Rains lineup, full-service Investment insurance Agency, which We our management Mortgage independent also Services, agency platform member is a newest provides title the that SmartBank

which our central have represented We SmartBank itself, also by is logo.

client will and Our experience. the efficiency to be enhance increased revenues, XXXX digital increased focus innovation

Turning to our expenses. noninterest Slide you'll XX, find operating

on focus expense our continue We control.

expenses our noninterest increased quarter, the During had slightly.

FDIC salary to accruals. on primary the insurance a our increases primarily of to Some QX a having in employee were expense reduction related see when prior employee higher due quarter did and We compared catch-up incentive increases accrual. were benefit the of amount a to our

to amortization the And cumulative our list and amortization of the the related to client adjustment from for Agency a We note is increase Progressive in trademark the item The the Rains acquisition. intangibles. other recorded of

quarterly catch-up quarter. should was around $XXX,XXX run be entry, per all forward this a As for intangibles rate our

-- As over to we last the the focus few you can as rent expense are slowed on see slide, on considerably. continuously quarters continuing the control have are

forecast and million quarter our million range. first is $XX.X with benefit around the in expenses for the expense forward, salary noninterest Looking having $XX remaining

Also, this just finish before taxes. let's we focus slide, on

which XX.X%, tax of was that due manages associated of loans. to current the was Our community effective a for benefit the slightly Tennessee quarter investment an income reported recorded program tax expected the with for than lower rate state taxes

effective quarter forecasting first tax of are the the XX.XX% We for rate of XXXX.

Slide XX detail deposits. on gives next Our

X/X, time almost the half Our been portfolio. portfolio deposits But X/X. have of year-end and of have downward now XX% traditionally to shifted at represent X/X, the deposits represent XXXX, deposits composition our demand

We Now quarter. had the deposit to [indiscernible]. another big

million $XXX at over continued during an accelerate fourth XX% year. up the total Our billion, to of ended for deposits the quarter and quarter the with increase $X.X

Our year, noninterest-bearing million, the the quarter for million to for decrease, the XX% continued and deposits our $XXX year. ended deposits $XXX at up over down time

was go client overall increased quarter, the as total as As driver to I'm deposit from info. participation handing relationships. With million that we in decrease Credit the both our big components story growth year-end well of mentioned current clients, deposits Jordan, by slide the our Officer, included PPP X%, significant There several that here to $XXX the last PFG over loan was new credit-related program, over assisting just to liquidity our XXXX. Rhett? Rhett and which deposits but said, were acquisition, our our largest the at over is over Chief a broker year-over-year, the year-end,

Rhett Jordan

continued third the in you, being outstanding trend quarter practically XX, balances identical Slide segmentation. results slightly Thank Beginning composition portfolio loan to our and with portfolio overall mix Ron. down on near

results their all, support of solid in stable consistently quarter, a a and as book. markets portfolio performance base the to times been continued While in to bank's geography. generate our has growth to noted, All demonstrate be in loan loan COVID-related continued slightly our through challenging negative restrictions their client businesses minimal entire needed with in quarter steady operating cash to across indebtedness. loan as balances Overall, improving and flows operate open successfully footprint our are result was demand continuing the our across the has continue

As through shown our on decline slightly, credit XX, quarter. quality did well overall metrics Slide continued perform very while fourth loans to

was the Our X.XX% a ratio to increase in saw a due quarter. low X.XX% slight transactions. NPA X This to of prior from

and underperforming retail The million inherited previous that first to $X out-of-market we downgrade and an was a exit. property through approximately acquisition to credit elected position

in X our locations The second expect to transactions consolidated closed to moved increase led risk we branch our did bank. of carry those was the property into not to asset portfolio. The NPA the loss Cumberland our our upper in and X the of value we region ORE of ratio, combination thus and these either

strong up a that X.XX% our slightly quarter the continued charge-offs only previously quarter-over-quarter, annualized a Net the but loan reserved off of in and were been account for specific charging allowance. result performance, had

a XX-day to of result over dues acquired isolated the demonstrate slightly X.X% continued was of increase asset mentioned The past of impacted downgraded events. but by slight loan. Overall, ratio our saw the loans total couple metrics quality solid a previously to

is positive, outlook very we back future historically to Our improving our and periods. in expect pick up trend

Looking at Slide XX.

Our the modified our fourth of portfolio continued quarter saw downward progression totals. loan

event. had recall, of peak XX% outstanding in $XXX million modified approximately loan structure quarter, of COVID in may our stage a and portfolio second to some As or in at you balances payment our the roughly due received, we're

balances down still expected to modified payment anticipate end of February modifications forward structures not reduced year-end, our restart clients. regular XXXX, the based that by COVID. or in their due and At are have modified X.X% All to million on from to remaining approximately additional portfolio $XX do feedback the we loans we of number going

the modified loan still Hospitality largest represented represent at continued at to year-end. modified. all loan approximately total industry of hospitality balances Furthermore, XX% portfolio X.X% segment of the

and Our X.X% outlook. is restaurant modified, express portfolio in now confidence to under are clients continuing their

not this normal all to restrictions payment further long of COVID are be continue the end by and quarter. the We expect trend we expect loans plans as as to on impacted,

increase during in outstanding our our through the began of fourth for $XX processed for portfolio. formally quarter had end, loans, XXX applications approximately see quarter. the million steady working we By on to forgiveness PPP As a PPP process we applications have forgiveness and on or and quarter began X% forgiveness roughly received

a As XX, that we applications XXXX. and in Slide with seen of forgiveness remaining into reasonable quarter to about quarter continue balances pace the million expected on ended fourth with $XXX

of forgiveness already begun anticipate are legislation in see actively we recent take flow still prepared from to consistent the on applicants the round PPP initial have a we that qualified While from unrolling of the with and apps round, applications new to front. X, activity

we applications has processing team X. forgiveness incoming platform handle in as we applications adjusted new with Our assist and to that expect streamlined more a digital reduced applications well in more as both saw to cost PPP than efficiently round us in

to our new will and funding new prospects taking X. process of support. the reasonable our to a further our PPP new assist under those round assist a and of We seek have believe this bank clients for teams advantage volume expand and this economic We be interest to great who opportunities and opportunity for and applications are of round, the prospect clients this begun anticipating reaching gauge source out

to I'll Ron allowance over walk through to Now it Ron? you methodology. back our turn

Ronald Gorczynski

detail. the all for Rhett, Thanks,

loan Let's loss move forward XX, to our reserve. Slide

As Rhett quality is had indicated, our strong. credit

adequate not allowance record was and was For the -- our did adequate current quarter, we a at levels. felt provision

At new footprint. a $X.X increased model overall factors our caused the was of the was associated the allowance X.XX%, X.XX%. PPP less directly to originated loans our at increases economic being most of added within cases and the our COVID taking During Since qualitative the factors had allowance year-end, with our year-end, adjust or and our loans loans we factor by PPP almost our with account XX% did qualitative number quarter, total in reserves less total million at into to loans pandemic.

the economic we our will forward, current to adjust conditions. allowance needed as accommodate credit Going and

current This position. Moving to XX. us on on information Slide gives our capital

capital to strong. remain Our continues position

program. of stock. capital of During a that utilized our all acquisition, CET our common the fourth our $X.X quarter, year, would the Since executed loss million stock with we And capital total where or over resume start PFG reserve repurchased for and we the build X loan activity, identical announced to XXX,XXX repurchase the are that risk-based ratios we XXXX. shares and started we

that very weather to of the that any are Our levels, I'll Billy. almost $XXX tangible level, themselves. With on asset any present the able even and economic are feel ratio books. it back trending may arise opportunities execute that turn loans to At current common over to liquidity may to are we to equity on strong excess million we that tangible issues our back our with said, positioned X% and PPP

William Carroll

Thanks, a due I And everyone see Ron, there. just color I'll hope speak you where quarter Rhett. few the as nice as some for number book a add into then think very good of from are and Rhett the going move we thanks, open and heard trends to a -- solid appreciate can or what I But and really later of questions. comments innings really it company. to. our for standpoint about we'll loan we this we up we pandemic, as more feel

To and clients loan great watch have go our perform through the gives year in our confidence portfolio. we us

well all very given Our the performing markets environment. are

smaller As challenges. exceptions, positioned our I current well model mentioned markets before, is near-normal MSA our for these are With levels. operating few

into jumped round PPP X. We've

Our working submitting week team approximately much We a and the loans have in businesses. started for PPP pipeline, will about round those of SBA. last collecting $XX yesterday to million. applications XXX of on provide our needed relief This currently number totaling began

really team We annualized, round. Loan coming CRE think permanent of we around believe to in some credits clients being parameters be I'm months. headwinds utilization low this the on in sitting our but out as business optimistic to given heading. CRE but given those flow. I will as still position but the come deal will numbers been, growth expense with with controls in is The team imbalance advantage really platform loan the need pipelines targeting the as -- moving cycle. softer, of our sales lower doing We in do obvious Still good qualify and will expenses, like which see our rise are than a bank our $X book. without needing line a the built longer-term would few with really, environment. loan financing, is some or in next organic because we the I mid-single digits our opportunities additional in some to ever that are to be balance nice in strong there our of payoffs focused nice on businesses and our extremely to We and those a continue funding company expect many direction X significant lines we're solid, we're see work and believe job the taking is scaling energy billion and second I will new it's numbers do sheet will

moving noninterest Our be to capital and And spoke time of to part nicely exciting be we diversify and is us. build and for to income continue a our nicely continue well story. It's be sector to earnings opportunistic big beginning will Ron as forward. to positioned this we're an focus scale to, company, through

open So there, let me for stop it and we'll questions. up

Operator

from will Dick first [Operator Instructions] Our question Sandler. Piper Graham with come

Graham Dick

a So you of here all mentioned off CDs roll at going that year. to the that you reprice or the amount beginning fair of are had

for wanted idea lead at deposit now? much those think over how costs an are new And lower right that XXXX? or CDs you coming prices specifically on on -- where and get are on Just to coming what could coming are then interest-bearing

Ronald Gorczynski

I'll Yes, that. take

at XX at point the XX over that quarters, at these Currently, million looking are of XX, are around we're area. X.XX%. based kind the $XX the previous basis quarter. first And we're -- are seeing, maturing on We ones

exception said, think pricing. at we can I our to X lower looking X in deposit So points our I still go basis We're of probably bucket costs. as

pretty point at getting we basis could saying get points X X time. I'm to probably So still of low. we're Again, this

we're saying the there. at bottom hovering but the to So I'm close not we're bottom,

Graham Dick

think you if excess be NIM, then the what to on I just And guess, kind great, will the more on have repay use And borrowings? liquidity helpful. That's margin your for to even that staying could possible think forward? going very benefit of it some you guys do do of you more so,

Ronald Gorczynski

limits. paid have we all brokered for of off. At roll that deposits Yes. out of we are other off this can structured lot time, A the we point term different or

So this the to funding. left point, opportunity have further don't any of we at off some really wholesale pay

Graham Dick

Okay. Awesome. million the guys quick housekeeping How have And one maybe. It's in do $X.X just buyback? remaining you then about thing. much

thing do If close running point at some could year, you down the you get think increase to authorization this that you further?

Rhett Jordan

we but evaluate use to capital. have just desire of we'll continue certainly it's to, We if that option best --

William Carroll

right. And Yes, Graham, think a over Yes. think you're Ron about little I I X. said

left think got that. -- still evaluate we've right we'll year, we I of this as as on now, past and can And forward. evaluating of buybacks of So be we Miller Obviously, it's capital come powder us just out some us, that there just still for have for continue are kind utilization said, to and right the that. going options

Operator

Our with will from question Davidson. next come D.A. Fitzsimmons Kevin

Kevin Fitzsimmons

you the Ron, through furiously And make I could I just straight. got when -- hoping I've sure I that. outlook. margin it writing giving I was you to walk was were want just

first which you Is compared accretion that X.XX% at and were about PPP guess, XX in inclusive points you bps PPP purchase I of which quarter, believe said, XX accounting accretion, forgiveness correct? we basis XX this at is, XX reported, think and this the quarter. said said to compared is and million mid-X.XX then you I quarter So that's saying and to bps, I which range you're quarter this a bps,

Ronald Gorczynski

pretty quarter. correct. is basis point It to range were to be where X -- of market much very targeting the this X We're we

Kevin Fitzsimmons

to place in Okay. that forgiveness, quarter? next take the of all terms remaining the projected quarters? -- in Or it the the it, first -- over because started, is is really is assumption real just take of the is you -- is place bulk few it more PPP what's to right, or realistically And which

Ronald Gorczynski

about at which the QX, remainder going we're point, about direction. -- million. tried on PPP to $XXX ball is looking will giving is just now, then different Kevin, trickle Right that forgiveness keeps give in in. guidance million, And bouncing and QX, the forgiven XX%, this which this guidance we're we've $XXX At and to XX% it's be

hopeful we'll the the the the way. first get as are quarters, X the of of the said, forgiveness of and you majority, So out most we get way fees out the that rest of

So XXXX. we part, most at -- of PPP fees of forgiveness, out should by be QX QX, of round for out the the this well, of

Kevin Fitzsimmons

Okay.

well XX the of upon that to XX%, bps really a the accretion So accelerated of as forgiveness Is that look as is accretion right? kind it? steady-state that way at

Ronald Gorczynski

Yes, Yes. yes. Yes sir.

Kevin Fitzsimmons

That's a guess, Okay. We're I and you pretty organic we're to loan PPP dealing lot with And with solve upbeat in issues. Unfortunately, that very I know again. continue of could great. dealing customers. Billy, growth sound on stepping it just seems like liquid

giving what's to guess confidence growth the I line bottom terms to really fall see that begin going So we're numbers? of in you that organic the to

William Carroll

a now, question, no coming and good basis. got a thing system. is that in, Regional good, -- I'm having it our flow on other there's conversations we liquidity be honest. look line is at increased with a real I And some look just Officer of there's we've mean, with this Lending pretty feels paydowns, track utilization, -- That's a pipelines We and that's we to President. deal that and with doubt it's Yes. Chief as our It the at those down, in the Kevin. sit And lot weekly headwinds,

new is look It it. balancing. and deals still when at still is out a deals utilization folks at and balancing line look pretty move But pipelines, just off good bit. got We're of a So a I up lot I some -- our act. about working feel we've hard to little pick when

You're rate. balancing between

give on You're credit. And balancing, is not it challenging. to

hold get still optimistic what We're growth I'm other got hold well. tight of You've we up growth that going lot out to a there, quarters. and going we to some all on as stick coming credit trying We're competitors But the there. do pick to can margin. can to in

Kevin Fitzsimmons

for one Okay. last And one me.

or you of back subject level. about important for you'd an of you active TCE terms a buybacks, trending X% guys to above in the little more thinking a up get that of toward there back utilizing Is get it mentioned level up proactive before that? On

Rhett Jordan

we at that determining we goal. mean internal I of in the any particular? just is. a we that's don't regularly. have the is, But think number it's anything no, it certain it not look an doing factor us higher And better I --

William Carroll

Yes. to that continue we be really to improve, and we're I continues at up accrue some way. Earnings to push of look strength to back in looking other continue we opportunities. should that those don't capital think able before some to

-- for but us. the other things good formula is from number not a So doing that don't there prevents target think us a there's X% I at that number. magic follow

Kevin Fitzsimmons

And I it Other And M&A. -- much that's and way organic is your starting haven't the obviously, to growth ways, M&A to utilize been but we capital. guess industry understandably, one talked on it's about recently, more. focus

do guys little a front? currency, you get there going of -- a you conversations As are more that on

Rhett Jordan

of never it, we and ready be time Absolutely. right. conversations have maybe we wanted -- the I and to mean we but we stopped when slowed because queued relationships we about is -- some conversations, talk down up as the we've noted we every quarter have some that the

those probably to optimistic get more as as you're right, out you're feel And we more conversations there. only that So opportunities have we increase. seeing and ever started will

Operator

will from Montgomery with next come Janney Scott. Feddie Our question Strickland

Feddie Strickland

for you to are like kind of And so, Just other any expect couple you side. noninterest income room think of want Do quarters? growth guys to ask that? on seeing on over you What insurance the decline there's further if in the offset the do mortgage? there next categories

William Carroll

I'll start, and in. jump you can Ron, Yes.

obviously, some of mortgage refis bullish purchased. hours that. -- volume, have we've some We in still mortgages, think guidance. think When had a quarters. given fairly these we're kind mortgage at been Ron few on I We lot our of last has you look

pretty feel we we've population in grow got where optimistic forward, the going to in still place. markets we But as look

sector. a slightly pick But do can up down. going into though. have feel insurance But growth that in I may of can of don't Ron, think out stronger any us I maybe hold do -- wealth slightly we it and color I picking lot XXXX, we you the change, see there? like be growth up coming

Ronald Gorczynski

will from far But We insurance QX, to income got the point as we able up up wait that's slightly this We're we're The QX, the our carriers. mortgage think QX, right. should at -- tweak just and pretty since you're pick Yes, where I QX right at But be in exactly see. banking contingency level indications insurance as maintain now, line comes into that going at strong today. to and leader. QX. we all when will

Rhett Jordan

the areas. don't population Panhandle, high-growth you we're side people rate-driven mean of Great with on I look tax And much lot states a think the growth. I mortgage think. Florida Tennessee at of and as as state

And -- lot but much so insurance and banks, as of tremendous fall will as I think on wealth side. opportunity that the off won't the a on other a

Ronald Gorczynski

And -- excuse as is the amount purchases increasing amount last over are refis X the of Billy me, amount the and of of the lower. quarters, getting had indicated, repurchasing

what going as trend good So forward, seeing. we're

Feddie Strickland

out No, Tennessee. that's particularly for and great areas on? of kind Panhandle Florida Any focused of you're color. And then your Anywhere speaking year? terms stand in particular footprint of of that for potential the growth

William Carroll

we've talent for in balanced. pretty a on those to It's add to our real of all all zones. geographies. opportunities sales -- continuing approach in Yes, I it's always focused really well look think of really balanced We're

all probably through of respond right balance would So markets by I now. saying our just

Operator

Next come Stuart KBW. question from with Lotz will

Stuart Lotz

just quantify and kind your able run for is be or could second, we you year. initiatives rate the your your on cost those first provided if this already appreciate into a that Would guidance guidance for Ron, the color to of initiatives some expense million associated baked to of go back quarter? you of $XX all for I

Ronald Gorczynski

everything is into baked our $XX Yes, million.

quarterly mission and that flat past all keep try but have $XX our million guidance, going we're downs, -- we ups to we our that our XXXX some forward, doing intend baked Going is but -- may to forward. -- for that We giving into and already is are what initiatives number. is

million. good So looking it's things this that we all-inclusive have go above. and than over the we're will But other any point, at if this be at $XX on, at strategic point

Stuart Lotz

in your as content the acquired Okay. discount, provision, and maybe of And reserves. Awesome. get that range. inclusive this you of guess really quarter. loss more down into It to of see XXXX? road. kind are reserve kind XXX no the level flat one we kicking the And How you're doesn't kind thinking of on for but I the you keep surprised If was materialize you can we're about then

guidance for provisioning? any Just

Ronald Gorczynski

we're giving don't guidance. if I know

is in Our at spiked we're COVID we Again, thought the cases quarter, to as had to the qualitative we're cases. last lot of the switched really going best of process amount Alabama. where maintain -- that of specifically factors we've Tennessee and seen up part a

included So that. we

I early the if drastically, we're again, don't gut we it's is quicker mean, will if but too a where grow says, improve release. see to to So expected, -- into I quite things tell going we know -- we much provision, going. But probably my than could reserve

of going just this kind we're level forward. going to keep So

much point. So more I have really have not you to to this at do that? is don't -- future to tough I kind Billy, the say. of add anything

William Carroll

No, I that's right. think

we've we we'll it and And go. probably add evaluate But kind some just will of we have did XXXX. additional that capacity I think we into as -- watch think accordingly. grow it's we got bill that in to some more

Rhett Jordan

don't of can I the think don't used to kind I that. the kick think it's road. we down

evaluation. of a continual think more I it's

William Carroll

Yes.

Ronald Gorczynski

quarterly, Monthly, weekly.

Rhett Jordan

Yes.

Stuart Lotz

Awesome.

And just reserve. more that sorry, on one

think CECL not XXXX you're or -- until scheduled adopt XXXX. I to

of analysis is at look that's X some thinking you earlier guys curious, you with parallel years -- would still reserve that -- about enable that? of are Just are you a the road? you maybe could it And kind still are if adopting release? running Or just down kind

Ronald Gorczynski

but which scrub, years at time. some year the point and No. X next we starting run we're road, Well, lot a to of intend true, is in to data do down parallel the

thing now year. we we we at point going -- guidance reason subject go at But earlier, adopt the dual quicker, point, will. But quarter of follow intriguing at should probably why if that's what standard we fourth of probably get adoption give the XXXX. there's if an the down time. we January Again, this if reason to X, schedule in why And should third, would to this laid out an we by So we've are expecting there's intriguing that road. this really kind next

Operator

come will Hovde Brett Rabatin from Group. with question next Our

Brett Rabatin

about if you landscape bit was growth little how have I outlook. a the may this be little ease optimistic bit, a covered and joined to if And pretty competition, heard just around the I rate related the hear I curious Billy intense? but some Or loan And late, seeing things you're in pretty thoughts competitive competition particular, it's was to origination. up? still maybe relative just to

William Carroll

everybody some growth. we've It is, got those it Brett. We're is banks good out And zones, competitive. good chasing and in in is markets, Yes.

balance What We've pretty us, pretty being -- too. is fierce. And so rate for a job said sacrificing I is credit that good of to able that. not piece. is we're it competition the earlier, done

I on areas. a more think are aggressiveness -- you some little in seeing maybe

of is as only And we've do kind the feel When look to causes got pipelines, so a the -- real that still really to thing good, that little flow, of But I to first hedge I me our [indiscernible] bit. at and one comments. going on I I be feel nice deal payoffs. my you that's the really think alluded some

You're rates to you're that are we these sell. where see environment to in and folks selling cap anticipated an assets move hadn't continuing

really so sales is pipeline of aggressiveness uncertainty. a But that the bit it and moving team now some calling little like the is about with is. right our a out feel good I where And target

is it. And so to But we'll continue just no doubt tough. watch there's competition

Brett Rabatin

off you're 'XX basically in expectations quarters? like come for XX in next optimistic doesn't color banking on changes in and much thinking back the about that and there fee want Are growth that 'XX. understood, and few mortgage it And income income I that thinking Okay. can That's want sounds mortgage Or kind you bucket I you and versus 'XX the the months? just saying go then you're the the of you've mortgage. given 'XX, pretty give just fee in fee little income whole your on in to past still make to to sure made helpful. a really me about maybe

William Carroll

into QX, gave of the income. getting guidance out. guess QX. mortgage, I QX, silos Overall, it's we We -- one can all really unknown. got of noninterest just figured other specifically other that kind We than on

we're putting that we're opportunities internal initiatives work, a explained, to of do and going lot some and we we exercise hard have As on.

section. feel will very we our in optimistic this that we So hit guidance

Operator

[Operator There like Welborn for will any remarks. time, conclude session. being to to would this I questions turn this no the Instructions] at our further question-and-answer conference over Miller closing back

Wesley Welborn

Thanks, Grant.

XXXX, we to all in optimism, objectives, XXXX Thanks. today, your you in with a and jump interest and we great goals into heard us talk we're company investment their and and company, looking everybody As and our appreciate forward our tremendous week. as knows about your have

Operator

The conference has now today's concluded. Thank you attending presentation. for

disconnect. now may You

SmartFinancial (SMBK) 20 Jan 212020 Q4 Earnings call transcript