The Bancorp, Inc. (TBBK) 26 Jan 182017 Q4 Earnings call transcript

Company Profile

Participants

Andres Viroslav	Director, IR
Damian Kozlowski	CEO
Paul Frenkiel	CFO
Frank Schiraldi	Sandler O'Neill
William Wallace	Raymond James
Matthew Breese	Piper Jaffray

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to Bancorp Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] And as a reminder, today's conference call is being recorded. I'd now like to turn the conference over to Andres Viroslav. ahead. go Please

Andres Viroslav

Good today Candace. XXXX thank for you results Thank The morning, Bancorp's us for call. fiscal fourth joining conference you, and quarter financial and

the Executive today On call with morning's beginning is of p.m. code www.thebancorp.com. call replay on XX:XX Chief are There'll Officer; webcast This and Eastern being at The website XXX-XXXX. Damian Financial the of approximately with Officer. Paul me dial-in XXX-XXXX Time the Kozlowski, a our call is be our Frenkiel, replay for Chief (XXX) today. at a confirmation

of to Before statements I call, I turn within similar expressions the call when and this expects, like over that remind conference used are anticipates, in Damian, everyone intended forward-looking to identify believes, words, the would or to of Securities to statements. subject by meaning could the are statements uncertainties, anticipated Act results cause risks actual Such those suggested Reform to from Litigation XXXX. and differ such materially which Private the

of may events any hereof no release made undertakes publicly statements, reflect the statements, uncertainties, cautioned not risks discussion the of are be to undue or on events. or reflect which reliance For results and to unanticipated Bancorp to circumstances to place after The speak forward-looking Listeners The date forward-looking only hereof. of these please Bancorp's obligation with the as SEC. to further these revisions which filings the date see the of occurrence

the call to to turn Damian? Officer, I'd Now Kozlowski. Chief like over Bancorp's Executive Damian

Damian Kozlowski

institution year the and quarter that of Bancorp our in since I joining Kozlowski. three fourth to Bancorp. performance XXXX, call. am the will name we June measurably Damian risk welcome been contributed I XXXX Good Andres. I for of President future. these us you bank. morning, highlight the The The Bancorp today. of X, you, and reduced My I've and our positions one, and have significantly areas strengthening a for our for Thank Number of thank you accomplishments improving transition was Bank. CEO and is earnings the

started million at $XXX Our and $XXX Walnut respectively. Street portfolios discontinued million, the year and

management We focus volatility processes with credit from have enhanced assets. these reducing our on risk a

to Walnut XX% by During XXXX, from XX% million from reduced Street exposure million to $XX and discontinued $XXX by $XXX $XXX million we million.

While impact may these to that portfolios gains have continue some these will to and adjustments our we credits, marked, performance. that some correctly resolve operating believe significantly or adversely these are not of we costs

our of exiting consumer we and made risks significant franchise European significantly in assets. risk well other our The and These opportunities management as BSA dispositions enhanced non-core costs. and provide more time us our were two We HSA business progress for as overall the lower compliance also in third-party business. and sales most compliance. our activities notable Moreover, focus

program integrated During detailing XXXX, video on with deals A that issues. of the our compliance the this is we root regulatory website. causes developed our initiative

enhanced in Revenue personnel. efficiency a delayering and $XXX,XXX increase. to per greatly outstanding resolving we continue While predict productivity believe in exit Both employee revenue the from and XXXX substantial we greatly progress $XXX,XXX, productivity and will XX% will efficiency. we annual when we that and issues Number restructuring our XXXX. improved any cost regulatory to of growth these of cannot to our increased actions, we make two, revenue due XX%

to The a selectively initiatives reduction. invest expense from $XXX million XX% current non-interest us million, opportunities. was XXXX $XXX run and in to rate allows addition, In new in reduced

our process. third phase the in of now are organizational We design

first focused The and costs. operating employees phases on two

in success. on our both steps created A necessary and what while investing ability our we do have for clients, also focus and The to set of right in taken conditions have to XXXX third the We - phase drives the the flexible businesses. more with thinking our the is and was innovate our to three, efficiency. was enhancing not set beyond. the a platform creating that productivity and through future of service improved only resolving we about Number lot enhancing of by issues but for across course significant each that platform XXXX time processes, to believe right organization and energy, performance better our

unlocking important from future XXXX made and everything technology factor not growth, solutions at The team. long supported but new way looked platforms potential have is success necessary to our go these creating and create of organization in only for changes for conditions clients. The to that in We most sales the many future a innovate comp our Bancorp

today Our informed, and to excited engaged, professional, knowledgeable team is succeed.

but Over made individuals we change, group and a XXXX a begin team of the we've same year, exceptional an the act goals of that with lot aspirations. as with last

in business objective both year through who achieve you Frenkiel, company. Our everyone to the client always for is organizational and financial Paul about The maintaining point a XXXX for community call quarter extraordinary detail turn Thank Bancorp more and results. success making to CFO, a turning our I'd will our the now while to safe-and-sound full institution. and over innovation, fourth

Paul Frenkiel

increase continuing compared of compared Securities-Backed Damian. growth the reflecting by pretax the quarter XXXX Future of rate. XX% fourth was be XX% primarily high the from interest context tax interest reflect continuing in single-digit were in quarter statutory before and reduction income Resulting year-over-year Fourth $X.X loans. in viewed securitizations lower Bancorp's assets rate The A quarter. of sale rate. the to on the quarters securitization in approximately million million the both growth in Fed and increases you, net resulting CMBS our interest, achieved gain increase which Consistent with reduction improvement tax major reduce of in business reflect loan the SBA from a lending interest in in adjustment or increases provision, March point $XX reflect plan prior This and Fourth in loans December Thank XXXX XX of a deferred corporate Bancorp additional profitability and lines. operations income double-digit over budget, net prior growth third to will reflected million fourth of XXXX, related quarter quarter in and results rate income in the impact significantly the the timing interest the XX% should revenue to income XXXX. the and SBLOC, Reserve of year. the leasing or Credits, X% $XX.X in significant tax continuing also new serve to Lines significant in offset $X.X basis originations. million income

in which That year-over-year. SBLOCs, year-over-year in grew portfolio leasing X% and lines totals grew organically of X.XX%. loan portfolio, business excess The comprising low to Total Our X%. grew excess largest continues was yield in percentage had historically of yield XX% in year-over-year, yields charge-offs. increase over for also these of loans balances, balances grew loans loan held X%. excluding sale, and SBA X% have The year-over-year. XX% securitization which

uneven in of the versus and continue SBLOC increase the quarter quarter. the largest to XXXX rates. net fully sold Our in investments deposit December the March of quarter rates. card which and linked points funds commercial basis being should cards, compared X.XX% loans. rates to higher and to are lesser source XX Prepaid XXXX. of the securitization on and XXXX of as the over fourth 'XX while third basis cards in of adjustment adjust the higher fourth on total the changes yields quarter market rate future margin quarter XXXX, the the of interest loans, X.XX% impact for reflecting The interest which Net over costs, our Prepaid prepaid and spent other timing X% sale interest XXXX in amount margin in non-interest margin prior-year prior-year a on over accordingly, was fourth primary for market points increased more source, largest quarter. quarter should the overall fourth compared reflected of points The is adjust SBA 'XX, to the increases reflected higher-yielding the and as deposits in Interest partial quarter a market XX% our the increased resulted asset XX in XXXX driver X.XX% prepaid the benefit addition cost in linked in funding income in funding variable-rate volume loans only quarter and to earlier. to fourth of income. impact replace linked were portion a quarter, continue Quarterly or of compared rates basis noted other dollar to in also our Originations XX% and rates. to to improvement deposits gross quarter grew compared are quarter decrease and card to to the in XX only increases

a related quarterly uneven income is noted, As on basis.

also to XXXX to fourth approximately fourth prepaid of approximately XXXX, X%. $X income non-interest Reductions For the or results. fee in quarter expenses to increased contributed year XX% Non-interest decreased compared full XXXX. expense million quarter certain

to questions. expense was stood Federal concludes call quarter to Damian year-end, to X.X%. I resulting from significantly fourth rates, a the at turn Reserve rate, the increases my income earnings That leverage lower partially and growth, tax loan consolidated expected and Additional comments, pursued. non-interest the to adjustment in impact by deferred continue continued Continuing The change at capital. of all reduction and taxed for ratio tax should at assets, support opportunities earnings. a be offset will increases, back Accordingly,

Damian Kozlowski

you, would up. open for you the open going lines Operator, We're Thank Paul. it to questions?

Operator

our Schiraldi [Operator Frank O'Neill. first from comes Instructions] of question And Sandler

now line Your is open.

Frank Schiraldi

morning. Good

questions. of couple a Just

first, Just, capital guess. I - regulatory on the on levels,

your your time timing I target, back X Tier X a the on share reasons. you in little can X.X% the up think, thoughts and quarter get at to obviously, a sort But guess, obvious for of back on I your timing have to goal at guys thoughts Tier leverage over of a set us X.X%, - there? with plan, move You to fourth capital just or bank a leverage that

Damian Kozlowski

Yes.

tax So offset We a lot will this think the it that going through change hasn't - really have deferred asset to we're changed earnings. year be much.

capital to a capital might raises this probably year any midyear. should be able gap end to have at So we're raises after next our We other hoping to We of never the for to kind close get there'll think X% you reasons. get we little to that close Ultimately, of minimum, be don't X.X% know. to year. that

we not not measure close a decided We accreting earnings, because and those we'll of things, order earnings. in those significant of think going be on keep we have portion capital we're to but raise to to bigger get that any

we we'll next us to do able year, really trying and - were be that. to we last end think talked to the get X% we about - at time So of about I

Frank Schiraldi

when you just modeling And X% year, purposes, for X the then than sort through X% level else, leverage? by right. mean, next just say a And about You're of Tier that's earnings I talking more year anything you're for full internally.

Paul Frenkiel

year. I No, said year, of of end end

not because capital minimum the I it's of to think, predict sure to our our quarter. size get the like we're because of of sheet, hard these but said, to obviously, things the I'm business, balance hoping prepaid by third I

So it to goes. But or if of end I the of know the the in but in that'll towards to year. course, the we we're quarter, the hoping the there beginning how be third get have minimum don't sometime midpoint of see

Frank Schiraldi

is what minimum, Or... saying? the you're So X%,

Paul Frenkiel

X.X%.

Frank Schiraldi

X.X%? Okay.

Paul Frenkiel

Yes.

Frank Schiraldi

in guess, - if - year-over-year. timing obviously, can us I XX%, bit you little to - was growth just a little And the up have issue. guess, a speak more rundown might of that partnership, that thing give there on could - there's something one you I secondly, mentioned I runoff forward? - those But some then you thoughts bit anything was moved of a there's of color lines, just income on prepaid maybe up going line fee timing of there your, some little and you if guys, single prepaid, guess. a in that a of seasonality, Paul, terms just specific the along And terms

Damian Kozlowski

and performance year. also had an some with We affected we on acquisition for we happy that program discussed prepaid business. the before, terminations our had some we're - Yes, the the very

on So that did performance business. the like we

the see encouraging to too. it's and quarter. - the but changes, It's We've is mix before in the So, right general the fourth volatile, direction. trend said that

encouraging. income So you a say use lot. no guide fee GDV to around There's But of your a it strict - it's growth moves what is. can't

not there's quarter. driver So one any

it of is timing. Some

it's fees, you by on it wasn't actually If affinity the driven like look financials, business-driven. things

So fees last the there this think was than I year prepaid. driving year, more affinity

So also the as we of those general replaced part business.

So Paul let I'll comment.

Paul Frenkiel

Yes.

of - that programs, So a in number really projecting. factors be there terms a helpful Frank, were and it number of wouldn't of

As trend. Damian now on a noted, it's sign that an we're increasing

uneven single-digit predicting we're it's So growth, quarter-to-quarter. and from

can't predict of off really growth that. we So

Frank Schiraldi

would I do mean, look digit for single the use to year-over-year growth? best single thing to But modeling and I guess, digit growth, Okay. be

Damian Kozlowski

to first in total it of did. that growth we We There did, some then more were the the before the have we've And us to encouraging in to will get had of we're - half be headwinds to the said headwinds. X% we through a hard this - happy year, we're very It's which I looking the like to fourth quarter perform really think with that. But - it year, able to see fees. I think - it's predict. time very those last

of Some that, complicated. it's

over is the its prior big of in year this. deal still Some get onetime, a to but XX%

been X%, was it exactly the how quarter. an but know big. - it's then very would a loss have see from were to So positive year. sign, XX% sign. would don't equally think and increasing I we growth That can't fourth been trend I negative very an you're negative We in obviously. that, sign It we We negative if this predict if think going a have

So prepaid on optimistic we're side. very - cautiously the we're

and there's our With else, being in support well everything. and consolidation much necessary growing market with to the in economy everything company shape the as to the as conditions and continue the financial better business the everything

Some away. gone those client have of concerns

relationships, to to grow fee-based. So business we can continue do and the new strengthen continue our

Frank Schiraldi

back - just burner maybe about order able, of terms, some until talked the business an mean, you fruition? gets on are go do gets as that the moment, Or credit BSA what you actively go in then at the being attractive timing have something you like I to the you think, And finally, you Are off in Or past line. to for partnerships? removed, seeking is out? seeing do example? of put you've the that sponsorship

Damian Kozlowski

the that Well, but we targeted we've bunch in other payment XXXX also have a in for of business businesses. new our initiatives space,

business, in we've on so think we the continue because all the this regulatory by work of And but the side, that the taken wanted really had - to growth also I we past, organic we, of to done support was the year, the and restructuring, repositioning that which product large, consent revenue. Much has on client order areas the This were incremental we're focused do producing initiatives year, new incremental much of able to the and and to do. revenue business that's new that more nothing each any new on product past. around our with of from

from we Now a the we revenue been road want in I - recognize see further bit regulators. don't the show down have as credit manner. - our you're controlled sponsorship, that think we'll right, we until very - probably to little business very with that tight that we run We've until a significant we - they move

gone And on out so aggressively. that haven't of we the path building

businesses, that haven't can't of some across here. new seeing I other the actually explain to incremental the by payments been revenue that have including start this we you'll initiatives think But credit-related maybe might year. XXXX They realize announced in market. end the I of that

Frank Schiraldi

you. Thank understood. Okay,

Operator

James. Thank And William our question comes you. Wallace Raymond next from of

Your open. line now is

William Wallace

Thank you. Good morning.

Damian Kozlowski

sir. morning, Good

William Wallace

to circle just back. Maybe

a a year, percentage While us prepaid trend, the I'm to of course at if look a maybe industry? a willing Is might view talk and the the a of the moving we of forward? commentary or margins moving improving fresh, you hesitant is as just some year. of at business, seem would the you that to think what the point curious in a just in if a might looking kind about fees And customer is what function forward on function I from changes. it profitability was that on a guys mix to the give the in be that you expect so of throughout on or change able business. the be is the change the GDV, a of of with view happen margin

Paul Frenkiel

terms different in is at They programs. range to But the different same expense going regulatory actually different have the does period. the the fee earlier a margins. there years. if predicting have of operate that quarter-by-quarter over profiles. that a chart So profiles. compliance lot are And back It several have you different programs look that again, income answer question of different we within - They

a there So are lot of factors.

we So more predictive be can't really any of that.

Damian Kozlowski

also You their are clients also remember, drivers.

it's So performance of our do, not only clients do. what their they what but

platform. So we're a providing

more expenses, we've focused what But we're interest margin. net can to is we the we're organization, an with hard focused with We're plan. business done making as always much one it's decisions. what I So thing on but generally, did see, very you predict can everyone's for as economic extremely say, - also sure,

So everybody focused very the charge the we're those on programs. of the We're much same and door. fees. services more to we providing total of the walks suite in operating against who not cost bigger We're that cognizant the fees

we're market, market So whether out much but it when per going of and of future. And cost have year. business realization higher that think we're the the GDV to pricing trends. not because of whatever over that, to decisions how try you unit, the reacts market, lead us give is focus revenue on help does generally, sharper structure in the price and/or us that a to higher right Whether focus will I can which the and the get consolidating think to sure, most make that next get I it, they that a a that, organizational the improving will supports

still opportunity So there's think I there.

digits. of that said revenue we we think business think revenue, before, can in total And income grow. grow can this high-single the I I fee I've the

I with X% this to the I the had. we next it's think including see several headwinds think growth very realizable years, year next that encouraging and over year, that's a

I going we're So right the things. to think do

I we're see with - But high better. our the that if will if about would think next from we'll out. business. with happy initiatives have base be talking I to it I'd some that very those very growth make - year, we happy of think single-digit that that be we I play

So major focused ever we're on safe that more we're We're it and than one been. a for sound in the space. more We're optimistic We're that healthier optimistic. doing price. business, and players and focused cost we've in manner, on of very

managed increasing for that think tightly all a I So bodes business. well

William Wallace

new customers, could Speaking entire on-load the answering if least order of stand with update plan of the to points curious an or the and where together get all you with on - give to opportunity us restrictions I'm just you order maybe the putting the get lifted lifted. very at consent the

Damian Kozlowski

Yes.

So well, organized. to - you of we part be - have

So at want business. be you come self-identify your the want to and and to end run day, regulators of the know, able as They the you to check.

regulators So enormous program. - themselves. for speak - - but they the Whether the recognizing made are - we we've the we've I integrated But effort call have. compliance we that, what think I into believe that's I regulators could put

it's problems than been only but consumer whole detailing financial causes that. And that a plan. I place first in compliance. time, we've have issues even We just website only that, all we place approach of our created in the this we we have were So were for I But we're each it's There's third-party set last plans different have identified of but a place. BSA, risk, at issues. - the clearly it's a not Not year very think what and root the delineated. right? video how the in crimes think a on

resolve with move trying closer worked never to the in partners, our regulators, we've think forward. and I

the I They be next be activities us not my the and optimistic when only us self-identify consent very exactly. of sound safe not in want see orders want predict, of sustainability. a I'm show satisfy the year full So ultimately and but operate That's they all to able decision. to the envelope manner, X. elements can't to or we though, over will that

know, think - of sustainability right in two not that's I or don't think definitely is I that's than parties. but That's once So view - we're it again, getting a direction. more months all the that? we're collective I - is the moving

William Wallace

the is to the Do - the goes have of you business consent years our - our of the was announced. still keeping back order have you is consent couple restrictions highlighted you ability something unique that points restrictions up minds? that and get that when But a back hopes one was and originally that to for? was have consent Is of this lifted. in the that order the was probably order, we lifted the worth something Or before is shouldn't

Damian Kozlowski

definitely on That's a focused let they think spaces it's of decision. the our so I quickly - think of it's plenty environment that we've the that in impact mean, momentum possible, that opportunity anyway. in much out operate every it's No, months not earlier I'm there's for goal, resolving have mean, compliance right? going us period. mean, certain I we I business issue I possible. so best-in-class think I as that to it's solely as Whether got X growth. my don't I much which we

model in last in we different trajectory. - we tax situation, all set environment, do business very a interest are is - with Our to we ourselves in things rising the to with - the today, year different that different it's I'm very environment doing started in rates, needed glad up the the business just

distract that be think So what any to would it's that, XXXX. nice if to it's - I I have going way from to not is a not in going have, good going to think be don't but we

William Wallace

then you'd operating continue opportunities Okay. the potentially if what quantify that willing in be. might - Thank that to focus to off, curious in number be additional is, opportunities. I'm to on first is you. The expense, commentary, $XX.X how prepared you and clean mentioned million

Damian Kozlowski

it more to to be profitability. It base operating accretive margin totally we and - number. the also you or That's securitization our clean very depends revenue operating all could a expense the because be on comp there but new I that's have expense, build would of mean, or expense. businesses

XX-ish talked month. good last operating quarter, It's too. about a math. mean, I this that's we basically that's math. XXX. So It's simple That's - a

to have on depending on the revenue it You add growth though.

the but are be Jaws will the we So because it believe. - accretive of in least, XXXX, widen continue would business to - at

to trail bit a are So expenses to there able continue down should opportunities year-over-year still be and because impacts.

didn't impact operating the on some this savings in things full So experience where year systems, that going we base get we're to - XXXX.

So on base the business, you forecast, we reasonable have over-performance, the don't a have you'll trail-down rate. that revenue and see a will you'll and a revenue continued if grow, revenue that have to run of expenses

depends, that we once Now take - to the advantage we actions opportunities. spending. order market that's in once like again, on take of again, But don't

as I you as we're this profitability, especially a that's anything Jaws growing I'm its than to into not think to have don't I - going other that. accept simply going - to Ratio it's accretive company. have and have the to business

to but So it's adjustments, we'll need make very encouraging.

William Wallace

Okay.

operating as in reserving long is the So be of will to right business? business invest rate, from to there you're million the opportunity month run but as that the the a leverage it accretive $XX

Damian Kozlowski

way on XXX down good Yes, down because compared ourselves we got a place, that right? we a level, place people. We've million want - $XX I a you a to from to to were level the We've To down the all base be. - would very XXX good to gone agree, where is go were we're from we think in yes, month is absolutely. where down to

we we layers as of roof and went more less because growth people had it less productivity year And working and had wasn't revenue year. the a through team, previously. the only top on revenue this but Our that obviously,

to our benchmarking like see all went worst, laggard, all a play ROA main at we revenue think competitors dramatic to a metrics look in ROE, at XXXX. we and I We like and peers. peer, peer on the you do impact out on if lot So that the to That a do, and way has from the key of a you'll group financial productivity. the like right

it, X% where on whatever, in how or - adjust you So were depending you'll see ROE. a to on X% we

see surpass think our much us I of group. not, closer, even near maybe or you'll term come the in if up members peer

the very the this it's - got - So year. first we've was all only

or you. we some where at were You to oversized still of some this know still were And And we've you those the blended discontinued year. coming kind done in talking improve of time, We only while a operating some even last of operating last to we a really the performance things gains, dealing saw this the company. performance run have risk amount with through of portfolio. year tremendous

as to expand, good I Jaws in the So going to you're things see continue XXXX. think

William Wallace

I'm I've questions, Damian, I'll before ask hop going I to more let some and but 'XX got What's go? Thanks, a couple myself. govern in people out rate other tax questions. the

Paul Frenkiel

XX%, state for taxes. the income XX% including XX%, Federal and around the

William Wallace

Okay. Thanks, out. hope I'll Paul.

Operator

comes Jaffray. question next our Matthew with And you. Breese from Thank Piper

Your line is now open.

Matthew Breese

Good morning, guys.

Damian Kozlowski

Good morning, Matt.

Matthew Breese

of maybe if with some lot on least at land XXXX And give an that's pieces idea One could where Fed of, item margin. strokes, broad you that there's us basis, been been of in but just fairly moving difficult think in you has the there, couple hikes. to model annual a can a

Damian Kozlowski

or right? Paul be right? you So It's Yes. think, exactly hikes, Fed I'll have the that's X.XX% The is it X% for is going right, because So on the short X%? I end. XXXX, be let to hard technical. target

So that of into not cost that small because definitely our very prepaid. the me, impacts liability-sensitive it that take excuse - a a lot base deposit gain we're only for and asset-sensitive, amount

third which Also, loans. is then the impact. when where trade the our loan have But how improves. and we big whole thing, ratio impacts, obviously, do loans also a that's as much you deposit business, our the So CMBS we it securitizations and

this - situation. interesting we So have the you quarter that

of August. start you've that big - some So securitization this then have we have but got Then August, gain, You the in off inside you've September the right? got in of margin you based level seasonality CMBS, a loans, securitization with we loans. buildup. see you they're you since And this rate And did. floating this lower interest that do on high-yielding have of margin also

get You the get the the you but margin. not only next less don't get But you gains. quarter, big gain, the

time always So - that. to it's and hard

versus you our do XX that. $XXX we've XX, - throws are March off if about securitization targeting when yearly that already because we modeling, So your to in And told we're you April it a modeling. securitizations your Not we do that do kind of a million year.

you quarterly. from through don't to miss a not So harder yearly want know little I can quarterly. - you It's And it's hard. bit the perspective, a

You want and say vice XX it's when versa. don't XX to

to - So Paul give it and I'll because...

Paul Frenkiel

the of can you you - want your rate securitizations, depending other use X.X%. and can for on model model, thing, a Matt, so to you how the

a current Although, obviously, X% reasonable market those the rates in rate fluctuate to the is market, use. with

Damian Kozlowski

gain moving the is had - another - hold. the rate these sequence, we've one the of factors. into next put historically on by who have a couple of X on undetermined we that the will months. securitizations gain We're a the by side. we've It's had in the And we where And value floating securities outside done and - buy but is lot of

last $XXX pool helpful. $X to when And securitizations, million generally But think a can can for a that's usually we This $X when securitize hard gain so the we quarter that $X depending helpful? are market And if on less time. outsized to on you side I evaluate. when That's do the could we're did we're for have said that's or we hoping hard an million. million we - stuff, be Is it we a these bag. targeting - We have to last that's one million or generally not - of the is that's necessarily gain. of that go-to-market, something could and also rates gain what we more. smaller revenue that loans. $X in to million looking be in But It

Matthew Breese

moving compression brings also think at imagine on It here? fair months, a start we over next to months, next see securitization couple expansion to that, in before parts going we're about - I see that's X a about think again. the the X the cash margin margin to the plus a way sheet that that it, the the the end given the of down assuming Is I to quarter of Yes. little as would the balance some we mean, bit, first balance couple follow-ups. is of the year, bringing for a

Paul Frenkiel

Okay.

cash $XXX Fed funds, oh, the you're press I'm for were is the sheet. the in to end at average Matt, that the quarter - sorry, selling million was looking average see at look the cash is better balance release, within quarter and And million. gauge, - total we you'll So A total. year-end the $XXX

been So we've actually able level. maintain at $XXX million to the

we elevated program. some years, every the precursor. And you reason. should first the the back not - refund The resulting the But that million you balances tax $XXX for at if actually very get last do a in less from first go umpteen refund a is so the deposit isn't last of quarter date this They precursor quarter, tax that year to saw for be year.

So prepaid decrease spent are you'll see those That interest margin. as further on less cards. of the balances the and a Those normalizes distortion. second quarter, balances decreases in that the

our the third assets on the you second margin. CMBS. normal the quarter, So carefully see watching mix very between and interest of We're

the on control more have we but control, other less have categories. We

grow - that we're But So that's factors. and single are Fed biggest big looking The at to that the one things should one maintain a one the it - the of biggest up is drive lot of there increases. that.

Matthew Breese

Okay. we of growth? total and mid-single-digit with loan thoughts could growth us annual be next kind low in that And on Should loan with share for your the it similar to year. you then saw of drivers maybe XXXX what

Damian Kozlowski

double-digit, I yes. year-over-year Well, our think are

almost very in where of quickly. I and but are some So why so businesses, lot you're you they're we've affect I good outstandings extremely commitments. a are It's because explanation too automation, $XXX get a is the risk business, of X% sheet or lending want business backed, not businesses. - billion it's SBLOC, grow XX%, almost low of growth either. businesses and want billion Unless Generally, of doesn't situation, balance have a invested $X have so the quickly to want There growing grow in an to an And to million we're collateral with balance don't like you it capital really our extraordinary sheet we $X a year. XX%

or of And really XX% we hard XX%, sure and that lot not won't portfolio We're understanding safe want could XX% XX% to things and overly at business to organically That model safely. do past. and doesn't the but particular because change did to to way business. or want verticals we struggled region banking concentrated business, believe any that, have on businesses. in in that's - the leasing we do forward. want company too controlled the totally Obviously, do we build segments initiative that we - with we to my mean like across - mean sheet has a - XX%, We the sound, grow we business that have a one balance we is to very an to that comfortable. way, have unless we lower I'm that's any community the you type grow the - don't I'm in concentrations businesses and out grow business not the we segments. grow a not business do that year-over-year totally the in of do and But SBA get growth my I year. SBLOC want generally, and risk I understand maybe intend could them those not any - a have doesn't So business I don't want have which like a this at going business. even year we

- a to, is, that there's the of there's able So That's I to kind want we'll real the be unless - explain range growth unless XX% to real XX% reason. year-over-year a as think, envelope. why I and

XX%, like is have we sweet to growth, So in the But lending we this have the discontinued the and and things other that, on around middle core, stuff. spot. XX.X%, core the of of XX%, kind XX% businesses, CMBS, XX% remember, point

that. a I loan think accretive. with low that's for ratio And to want company this we grow - loan deposit a incredibly

we impact net and also loans the bonds sheet margin, manage revenue. balance a out and but our has we increase total it of on our So interest the nice trade obviously as

long that's a banker an too but of answer. banker, philosophy answer, probably that's So a philosophy answer from a

Matthew Breese

wanted sense one, And and is just mall the then, Florida just a the if sale, there. extent to on gains timing; for: then two, any there pending get

Damian Kozlowski

do had have are in a We're But a literally basically. it or struggling people press, profit, we believe the model. we - you've well, extensive mall highlighted property. look the mall mall. not. actually cash the at people older - hundreds mall very an with the It's at mall had operating seen the We old the sale process. of Well, as And

a of there clear you - it it is that year involved, So running throughout it profitable even like and people became very few if have are the now.

price a the So current who the most knock over of the That's people interested at looking the different and whole mall, coming down of in start they're to are cash again. thing us because flow not totally out wanted to mall. totally

So - would asset, large very do us - we reposition the that work would to in who have out entire large best developers sought with our - would order it.

and be to in cash - a just business, We fully you marked certain put We're think course, close the we're the don't toy we things we thought say, yourself of it a we that. we do April don't anything. why have an get find right But or these behind individuals. always care think to We now. be something have it, have we before and us there'll with take for better don't deal transaction, bit gain we Of on but with done. and we of it one with hoping to it own of do it, would the partner the

little, So a We impact be we will we're it the financial statements, not won't get might anything large don't sum. that anticipating really believe. but any

Matthew Breese

Okay, okay.

there big moves and either close? no way an So April

Damian Kozlowski

so. contract sometimes, It now. it don't right think mean done. We're I don't doesn't things - under get

the I of good piece think This right that is place. a reasons. there's a in lot of property

lot reasons to there's this done. for So I a get think of

the too. They from it's get it done, Orlando to wanted think I area.

you've - done. who it's get it So want a of people lot got to

So usually, done then. get things

Matthew Breese

Understood. That's had. all Thank you. I

Operator

Thank like for you, conference you. for to turn to our remarks. And question-and-answer the concludes back closing session any Kozlowski, that Damian today. I'd over

Damian Kozlowski

point very to full-year in you was tuning you appreciate Well, in thank today turning there XXXX. really results. much, do I believe our a everyone. to I listen

many of at progress issues, optimistic back of lot call issues and we've a you If resolve to able for XXXX. very I am even XXXX. lot last to faced we a go this those were where we in and of conference been year, make

call the Our on I very all is on, the management focused are. metrics key team of you that think,

and the our so looking over you more forward give And to we're updates talking year on you to progress.

everyone. you, thank So

Operator

today's the in disconnect. and conclude great have conference. day. and a does may Ladies Everyone, gentlemen, This thank for you program, all you participating

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