STEL - Earnings call 1 2021 | Stellar Bancorp, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Allegiance Bancshares First Quarter 2021 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Courtney Theriot, Executive Vice President and Chief Accounting Officer. Please proceed.

Courtney Theriot

company; thank morning's all led of earnings Retzloff, of and our have Bank; President President CFO; of by operator, of Vice and Kuzdzal, Executive Executive Allegiance Okan Officer CEO of President today. This Vice President call Chief Executive call Counsel. the President Bank; you, and Risk Egge, and you and the who Paul Akin, Allegiance to joined Steve the Thank company Vitulli, CEO and Ray will Vice company General and be Shanna

see today, management's the that beliefs of provisions the that Act begin to contained change. reflection the constitute guidance intend subject Private statement all remarks update to we any obligation be as and disclaim any such we required are at publicly statements morning's made, release, website may if forward-looking I is the of of to be future forward-looking of statements, today harbor Reform Litigation statements. XXXX release only Before need act. Also in We is except the as last for text earnings such results, the note to our everyone made in additional Securities in some at covered associated available the this on amended. information for remind time forward-looking with statements forward-looking guidance page which allegiancebank.com safe give about by about law. Please We factors by risk is defined that a as statements the the

an also our on provided website. have We investor presentation

At comments, will at it our CEO, as our used being review guide to line the turn Retzloff. over is time. allow call open and for the conclusion for available we time questions. I of the not today's Steve for remarks, this is it now Although a

Steven Retzloff

Courtney. thank for welcome attendance. to and our call, you you, conference Thank everyone We your

plus record past over The of earnings quarter, start our $X.XX ]. first growth of to $XXX million by during months highlighted (sic) XX.X% the the for $X.XX, or per the significant productive quarter XX deposit very share bringing year, deposit billion XX.X% [ represented growth total a

billion during million as quarter. $X.XX loans, $X.XX last of position over funded we All PPP funded strong our $XXX being and with increased in first in the in, $X.XX we to to have to share the dividend over billion relating and a liquidity, increased Assets now capital common stock per we quarter. of remain

little added the charge-offs augmentation was from of staff improving That will the due and earnings which the to said, came Our expenses aided fees increased during Paul number by describe, we that recognition having as PPP in record incurred very production. accelerated by way quarter economy. the of low provision PPP our the net furthered asset an $XXX,XXX overtime the absorbed and quarter, totaling write-downs, quarter and approximately costs in in third-party and

new benefited continued of extraordinary the total loan effort stakeholders $XXX but the $XXX loans, production the the large booked of staff, originated core also PPP from as from for quarter we in Our only our million million during not loans number of outpouring quarter. a of

depository building into our moving traditional the now further production the to pipelines with assisted as customers entire who approximately focus connection their muscle able PPP enhanced our already new to be we effort. solidly completion X,XXX will and the use through deepen and established, relationship lending will are to staff With that PPP proven forgiveness we be phase, core our redirect and our for final generating which relationships,

We our are quality, we're ORE. and asset reduce pleased able overall with significantly our to

traffic, those our broader But had are the sign. on a which of is that the now impact as be day community our signs used remain to every particularly welcome of customers, to Houston streets showing continue heavy the and sectors. We the in has and alert curse, higher-risk to economic pandemic activity

Although sense optimism, a full timing remain we all steadily and of to complete the as cautious sectors. of growing with a rebound for

an Given focus high market smaller and us, is to to well-managed That and differentiation levels to believe we this have platform. loan a beginning direction integrated loan strategy on market to a this average warranted our and new for incremental PPP acquired commercial to our lending appreciably And workflow attract retain step implement this robust but customers operational our larger effectively system, is continue system in service as are while opportunities. From marginal, we expected more the origination which penetration we provides we our and quality growing entire but affords not and more said, and not platform lending for we that deployed relationships. handling beginning loans. quite the only growth perspective, size now size we are change,

accelerating commitment continues to have value has Finally, franchise by more add brand Allegiance has the and had level evolved experience of can our with more the to into our customers, and bring table. extraordinary to their penetration what and built market value of first-hand into an who service now our and appreciation

Given will this how choice position community even we the and region, bank I we coming deepening that proven responded Houston over the are to past be in year, believe year. of further we the over the the clear needs of our

who an loan outlook well as our by credit; deposit our and cover describe will Paul, results followed financial Ray as will Next, on production results.

the open for then call will We questions.

Ramon Vitulli

Steve. Thanks,

borrowers back we existing forgiveness the both origination The work first a saw the our with in process. XXXX business with first-round our second customers, round program PPP the of new, bankers through assisting as and quarter of while

designed we while quarter, expand demand to capacity last customer relationships. for PPP mentioned allowing meet way to generate the our a bankers and in effort second round As

to total market second-highest driven X,XXX, the a representing conversion also we result, non-PPP the economic the report X,XXX extremely of new customer customers by over our nearly core million, PPP, from bank, are pleased continued originations over addition to the history of new we bringing gains As And to customers growth attracted from customers the PPP in acquisition months, XX% past XX year. improving in effort. new and our conditions, loan past share of X,XXX the $XXX level

seen increased adoption We to nearly transfers. remote wire of deposit service banking every electronic to for mobile ACH have utilization originations capture also and

to X,XXX and extraordinary and review banking execute to XX, offerings what electronic million continue optimize over demands also believe our deliver be our market March the growth PPP customer expectations or position totaling footprint applications to $XXX forgiveness, brick-and-mortar about loans of to monitor half and ourselves an we received We to opportunity. With regards meet product share we for to we service how forgiveness of simple as Of submitted totaling over originated. use for approved loans March, over new news with was $XXX,XXX, able $XXX this forgiveness been received the since we incorporated having our to into $X of are welcome up the majority billion of $XXX form. which borrowers X,XXX in have X,XXX PPP platform SBA, to million, loans application loans been to early our the funds those, PPP million. In and on

April customers reduced deferral process, addition Of million through eligible at outstanding the to amount, deferrals XXXX, March PPP In assistance further remain to also $XX.X of on borrowers approximately core loans. $X.XX XX% on this payment of our provided XX. to loans of loan with we billion million of core as helping $XX.X XX, or balances

loans, quarterly the $X.X an quarter. to $X.XX billion, loans, operating million increase now PPP excludes during core first at results. Total ended our of Moving which quarter the

XX. Paid-off of which During team first generated, funded had paid-off core $XXX $XXX a X.XX%. million loans loans quarter XXXX. The Carried of $XXX core new weighted rate quarter XX million, which core the of million loans quarter advances X.XX% of and the to of were a loans average funded paydowns of our a quarter December weighted $XX million by of the fourth the in compared of compared the level and million average $XXX booked $XXX by rate were lending weighted X.XX%. to million a loans during million staff at in level core experienced $XXX million first $XXX of at were new quarter, average of core a fourth of rate March $XXX to that with to million

weighted interest rate third X.XX% and the which compared at the just our weighted loans period-end to overall rate on loans rate We first was X.XX% quarter report as the is core XXXX equal charge weighted quarter the average new pleased are average X.XX% ending XXXX X.XX%, charge core quarter funded fourth average of on December -- in, of quarter X.X weighted our the points, to rate. XX, All decreased to of below X basis XXXX.

could information restaurant provided pandemic. several few on that energy categories to and heightened our loan the portfolio, past and our portfolio. COVID prices quarters, hotel risk gas have oil portfolio and and/or Those due we being the our bar Over have

remaining and funded funded our on of net to with the was million average primarily partially bar million portion. an portfolio million, placed real owned million XX.X% $X.X the was the fourth ORE additions loans, XX, X.X% increase portfolio $XXX totaled the CRE March The totaled LTV and of smaller portfolio gas of totaled or million the totaled hospitality hotel back XX.X% our loans, of As compared the estate $XX.X million were of of that $XX X.XX% And million, to additional quarter and LTV sales. relationships. ORE $X.X on addition other by or restaurant average and payments portion. million XX increased in to million in in assets, total nonaccrual $XXX,XXX of million the during quarter in million CRE remain to a assets, and aggregate, nonaccruals the basis during due ended which loans $X.X of total points $X.X $XX.X $X.X quarter was or the relationships, LTV portion. million $X.X oil CRE property. of our The $XXX quarter, million an for decreased at XX.X% of X.XX% $XX.X with to payoffs, The a loans on upgrades first quality an to quarter. end on largest of both million XX the sale with accrual. from million million million from ORE, average to In X the of $X.X of XX due primarily loans, $X.X quarter primarily from position. Nonperforming the to $X.X $XX.X during including asset a in Nonaccrual offset continued down XX due manageable from $X.X of

at minimal comprised basis were points. the an ORE residential for annualized of is now quarter X Our of rate property. Charge-offs one

terms the loans loans of to December quarter Criticized our March X.XX% increased In at Specific XX% compared XX total of to list, to at loans total broader of as as XX X.XX% at compared as for March of XX. at individually evaluated to reserves loans from classified ended of a XX. XX. our percentage December December X.XX% increased XX% X.XX% watch loans

$XXX.X the quarter fourth we billion in front, and year for that, the the which in With first deposit $XXX.X the The as quarter our On million deposits during quarter. up a over ago year the $XXX.X the noninterest-bearing in for from of quarter. our XX.X% $X.XX in XX.X% quarter ago ratio increase over deposits and to year with deposit prior accounts new increase PPP the accounts. total primarily associated saw deposit fourth March million for higher customers the million was compared total category, balances first December was by as carried XX over the well noninterest-bearing increased XX.X% to result quarter XX as an and

payment last area XX,XXX economic reflected loan in Houston our our historical trend healthy CFO, of jobs that XX,XXX for performance. jobs monthly to outsized. I or shows been level core March, XX% in the signs loan As month the Texas industry poised seeing data and conversion average it that referring growth PPP the an region, our to downward Commission And above turn of created front ever-strengthening recovery bankers our recovered from market we both of business jobs. to of acquisition well of are being disruption us, originations, of in mentioned, and the Recent March, to March the that the used deferrals has owners increased loan word is the lost April. With pipeline, Paul. with new and XXX,XXX describe through Houston in over we in has jobs Workforce are and now success, a and Houston previously prospects customer position loan of banking start have to organic opportunities loan

Paul Egge

Thanks, Ray.

$X.XX of diluted very income proud posting $X.XX to first share first $XX diluted in to compared and are million or per the We quarter quarter fourth or per as million $X.X net million share be XXXX. share quarter in diluted record of or $XX.X per $X.XX the

into pre-provision the $X.X approximately first quarter, which quarter. Pretax branch during the compared million closure revenue And $X the which Our was in expenses quarter was related fourth for million on $XX.X expenses, $X.X income. Interest interest loans the quarter. we income driver $XX.X most were and $XX.X fee revenue from and an the record the nonrecurring PPP to partially loans, earnings increase adjusted for the to quarter, for in saw million significant in year expense decreased the million quarter. first quarter pretax ago of income interest on pre-provision quarter, total to have or million was X.XX% been of which the quarter year in measure interest for would X.X% primarily recognized on lower fourth fourth the due to to compared nonrecurring $XX in $XX.X million. Net income an expenses quarter. in the recognized $X.X $XXX,XXX power million provision elevated expense lower most quarter quarter to the $X as by million were was the where write-down Adding ago pretax prior earnings back offset to for first in the of loan core our quarter, in million the the during income despite X.XX% higher were compared relating from $XX.X in as PPP key increase the to approximately a quarter and asset during X.XX% by million, fourth the million quarter. Yield loans,

reflecting first the in was for yield X.XX% quarter. Total first securities within as fourth totals. ago down loans asset PPP the the quarter, in the year mix have loan on from well quarter earning quarter, X.XX% and related fourth of change as loans and X.XX% ago proportion assets X.XX% quarter been for X.XX% in the PPP yield in loans X.XX% quarter, and on would includes a a that in the Excluding significant year higher interest-earning revenue, the

revenue, would X.XX% X.XX% related versus and loans yield first total for assets on earning quarter. PPP fourth quarter the Excluding the have been in

to of the had loans. With move on, net interest cost that as I expense, approximately quarter quarter income Before end, relating liabilities to of I The basis in basis points for XX XX ago basis was basis overall cost points XXX for fee continued remaining of funds deferred PPP of respect for points the fourth points first quarter interest-bearing quarter. our the year note the from to in XX quarter. should points basis XX first quarter $XX and fourth to the million we versus decrease

as continued reprice see particularly our going CD in to to expect improvement We funding costs continues forward, lower. book the

assets, of So taxable margin interest composition fourth offsetting the income in PPP X.XX% in our significant quarter. ago with a earning quarter in compared QX, as the in net recognition help the X.XX% X.XX% fee lower interest and our net was of shift to for equivalent quarter year the expense the

related net first the would and X.XX% balances margin loan PPP Excluding revenue, for have quarter. been interest

a in growth on pricing. be due core Total other quarter-over-quarter, maintain was million margin to noninterest said, a and benefits loss optimizing potential increased decreasing compared composition the our the fourth $X.X lower mix and XX.XX% million prior the the to expense through to first $XX.X nonrecurring line compared how and depending drag $X.X quarter due from story million The $XXX,XXX quarter quarter. quarter quarter. asset and the million from our primarily That strong maintaining loan our is sale the changes funding out. Noninterest primarily quarter, plays liquidity on positioned discipline for XX.XX% $X of on feel core first for fourth well the fourth to expenses include we quarter ratio OREO assets. to difference asset NIMs salary and loan aforementioned first the to the have earning in to the in the expenses to on forward, to relatively to interest for $XX.X excess Going efficiency net in income write-downs. The decreased the increased XX.XX% for line. million from Other the year increases

XX.XX%, million been as XXX back amazing was at turn write-downs, the success Houston's driven team, assets XX.XX%. The now than Steve. the or at $X.X for of quarter adding loan ROATCE total during efficiency over bigger allowance ROAA on of regionally and call quarter. March the and share price proud be non-PPP Excluding to very respectively, the and a proud credit and topic an at in quarter, something capital, ago since ever the both shares on book million, declared core XXX,XXX the losses been XXX the Allegiance weighted will of X.XX% continue we end, in stock $X.XX diluted authorization to that on all-time and a tangible reserves company over $XX.X did environment, ratio provision makes quarter tremendous share Thanks To and market was near that per representing by of bank. I a we for increase XX, re-upped loan note And $XX.XX. Reflecting approximately common should $XXX,XXX And share average losses quarter I at another well. All repurchase share and of and first XXXX. are points is for authorization the a to first billion COVID-impacted the franchise in shareholder liquidity better value first the on expires for as have the to which representing ended balances. Bottom that to and produced drive $XX.XX, largest with for highs. feel are year asset to would basis operating of of we dedication replace all-time or the end loans per XXXX levels successful line, highs. an very we've the PPP we XX.X% in dedicated our repurchase at Quarter all, value our quarter, share to points in of X first basis over beyond. year our repurchases, positioned which dividend well

Steven Retzloff

With call for the line now the questions. over Paul. open will the turn that, to Thanks, operator to I

Operator

[Operator Instructions] Our Feaster with first question from James. comes David Raymond

David Feaster

like really It the despite originations distraction strong PPP. sounds from were

what either kind the from client existing is the much are versus PPP kind Just customers. guess, or of confident is to pipeline just, the production coming from of clients. new the you're maybe that clients willing up acquisition more shaping And curious hires program? I from of How pulse and how invest of and new your lender hearing

Ramon Vitulli

Thanks, David. Yes.

was pre-pandemic-type on The the when pipeline and quarter. have we we're that PPP it acquisition would So we and as really strong from established a first in at like of versus is our and to growth very bit And target while we the the more -- still with requests of XX-XX in customer this that saying the doing coming the I'd deals obviously, customers. are mood existing, -- talking the it's levels. the probably -- that more little side. that's existing new levels that about. a pipeline We're But that coming say maybe from our that's are place is grows, good, field pipeline these -- these work

for what good prospects about that future So feel more the are and originations.

David Feaster

have how You just picking job encouraging. Okay. up new new a great guys lenders. then always hires done That's And turning? are

hires? in maybe And market, is pipeline with an the for Just in disruption I being increase seen some and you how bonuses have conversations? paid new guess, the

Ramon Vitulli

Yes.

picked up. conversations -- have We have

look X. first if homegrown, quarter first in of X our over back pools a analyst quarters COVID of usually the light is out of a little out our bonus. did for had right, because X We because hires lender we hire producer of past a you You're one of that, X And total the in quarter. environment, have and the

of circumstances So -- those feel One the some making disruption. given do in we'll we about are the what of X additions. But M&A And world. over the we is yes, pretty quarters, X disruption. conversations forms up, the there's good happens and past the -- -- being kind picking see

banking rules other space in in Those for conversations -- of around and the of disruption as continues what that business business and those to customers is means. bankers, as our space the competition and a change banking that. hanging that's their one we hoop -- for The our have kind

David Feaster

I all? to the Okay. And mix? it's in at larger maybe think the loan has get going still guess, that's the new yields? recently? And like in you originations. trended function you think loan think towards hear of you'll talked upstream the able do might steepening new That's great. a premium rate bit? curve It allowed about just pricing pricing Has a Or of for better be that do then Or be yields encouraging despite levels sounds you the may troughing shift how credits of impact here. these pricing more you to do

Ramon Vitulli

it's good I around the X competitive. production Well, rate of X.XX%, mean, quarters feel the very on that as we new hanging still but about past X.XX%,

not where I'm last So where and floor sure quarters there, but we're about X landed. hitting the with pleased things we really the --

Steven Retzloff

And this Yes. Steve. is

really, of going to we're we then have lot deal. it's restrict next -- the -- have -- loans, loans, multiple a terms larger looking multiple miss customers a number And of to a certain larger size, you if loan the that you're projects. relationship that maximum relationships. There's at In

that door not more larger door up appreciably loans -- opening It's of bigger kind relationships. for just opening this a bit. little much we're So the to so

Operator

Our question from comes Brad Milsaps Piper Sandler. with next

Bradley Milsaps

kind I of number. say thus pull on balances. actually It much the can this think when do translated trying loans you deposit seeing participation you production have know X,XXX which looks but Just Ray, get months, tremendous loan XX program? PPP into tough you're those correctly a translate into with how a customers is to added to forward probably of your last some I actual this you you've far, of is in handicap, growth books. guys' think sense heard the over the like outstanding I really

Ramon Vitulli

mean, and customers, loan. penetrate this to as seeing what convert at we that those low, look X,XXX you the PPP, When to the Yes. the other we're that X/X we I moment of I something full Great try mean, than has PPP at maybe question. call of

we're it's So additional and working process I that. and generate on a mean, business, to through work

So only I then touches and several it's on origination up we every side -- side second on quarter. -- we first from the were the the we'll with forgiveness a of to mean customers, some to number our as these same have I -- gains the think existing to pick And round not round. but customers the --

we plus number So about an to effort optimistic convert quarters. be a of to us touch going so with these, But we points of have opportunity. incremental have I next conversion what's think just that few it's the over ahead --

Paul Egge

on PPP loan through to customers program, loan how the be they are which has impact getting stands may and PPP an reason positioning. demand liquidity their

when loan, they're be the past. PPP the involve lag program -- beneficiary could in for next So being some recent that could their near of they're this term ready time the and

Ramon Vitulli

Yes, for loan. incremental

Bradley Milsaps

Sure, sure.

hopefully, by of of type kind near the historically? maybe can year, would that Ray, rate maybe back single-digit low say what kind grows and so ramping up start guys in next then to done closer And you've term, you can you

Ramon Vitulli

growth all entire in Are the you talking the on whole loan? on

Bradley Milsaps

PPP. ex Yes,

Ramon Vitulli

Yes. that. Yes, loans. think I core Yes, yes,

Bradley Milsaps

out of how then some coming And curious about issues you're kind are still you loans of having okay. guys the thinking just are that resolution the pandemic. of -- Okay, on

sounded think just under like had X%. stabilized criticized, kind classified I it of

get of your the the how are you and as half approaching you're guys how Just a the kind kind provision of forward. level how to -- the year of you back might about of thinking reserve that losses and of relate kind in potential to wanted going of get sense

Steven Retzloff

Well, point. model And with low projection. such out quarter. business participating like into the we're we them we like this way with and in forth. that we're assess feel -- place we getting better right not all deferrals and probably we -- as extrapolate obviously those we experienced time, their hotels properly, have identified a very that at a good local over We've so But feel and like quarter-by-quarter underlying every we've there's them charge-offs again, to got

of So outsized on from I pretty, good But... more and pandemic assets pretty really think I experience so it better actually we like getting feel any that depends terms of on be forth. shouldn't feel worse. problem for lot kind the getting Obviously, here. it's in

Paul Egge

that allowance And merits valuation that and in considered I for might have anything note evaluated credit individual our losses. CECL, and under we provision

Ramon Vitulli

Yes.

Okan Akin

Yes.

add significant portfolio actually In Okan, deceleration, instances, the that our seeing addition hanging And and a in of downgrades our is deceleration well, a -- upgrades. originally fact on that also we're to I'll pronounced that's the that, portfolio high-risk portfolio the experiencing where this in as very is of number set. with better-than-expected

Bradley Milsaps

just Paul. And Great. final for question

you Excluding appreciably? the expenses is a million run branch that $XX to have so might that's anything or that benefited pretty or XQ Or think decent there go quarter, maybe may write-down, up a rate? that XX-related that was $XX you this would in else million so run from of good cause rate? Or FAS from PPP

Paul Egge

There's $XX second where is run take, million decent just, hedge is think things. a you'll say, half a handle I noise the or some might $XX.X of in million, I quarter. level give staff rate. that was augmentation kind for now we'll to the of PPP the effort, forgiveness bit pivot a really of little into put our more into paying the be still shoulder some used and effort. We'll see

but So in think I there's still out zone. something you're singing nothing there, -- the

Steven Retzloff

of sharing things nature Yes. record like profit bonus well. of things bring a accruals and earnings And kind as that record

Operator

from comes question with Gailey next KBW. Our Brady

Brady Gailey

accretable a recently. So has been small guys you fairly for I know number yield

immaterial small was it remain quarter, fairly Did $XXX,XXX. this only that about last quarter? think I and

Paul Egge

immaterial XXXX. It's Yes, off, why it's thought more we quarter might really getting weaning weaning is quarter, in away which we first towards of every economize our here dropping.

Brady Gailey

back, it's look looks when active all quarter. It stock you at buy the in XXXx And you you Great. the Okay. around then to tangible. at great bought like see

not so stock cheap. it's If now the X.X X.Xx tangible, at you look as it's to now,

execute So to little good do the stock you pretty being on price the appetite buyback despite still have a a higher?

Paul Egge

Price capital of is one loan but #X we're than look so into the of share growth. ever, repurchases, that we evaluating is excess our when use many more considerations core

a little of maintain around to potential of volume-based M&A a appetite level that share high pricing want we that, flexibility And course, dynamics activity. drive the there's to repurchases. bit then, Secondary for of the

price, moving So focused us of current a share ways the Not on much capital more to the lot to but that by intimidated for put parts. work. too most on accretive executing

Brady Gailey

Allegiance And Allegiance just I saw Cadence, little been the then deal consider smaller, fits is guys we in on some think big in this type do something a think thought. Okay. an me do M&A But transformational It's lastly you acquiring And more quieter backyard. then which you transaction? fits than have M&A? how was downstream targets? landscape. for it's would you BancorpSouth how like MOE would into Texas more and Or of a into either Is it

Steven Retzloff

Well, transaction to kind the it's smaller pandemic, think the uncertainties of the inside there. of been the appropriate though, do transactions. profile of And course, transactions to life-sized it's a of probably opens -- risk Coming out the uncertainties. for like because the a more out larger see door good of that I it

have You better currency.

terms assertive we're or profile say posture. I'd right now that of M&A an actively in So

would yes, we the We medium-sized. be would around certainly across board, welcomed are probably still think thinking here, -- smaller, but acquisitions

community stay contacts. as hard the working know and We're well we're but our as all difference a that in make probably can on bankers with the through also around they think side, community organic I of anybody touch

Operator

[Operator Instructions] Matt Stephens. with Our from Olney next question comes

Matt Olney

curious of March says kind be still will as that, The those of what $XX the PPP, fee I'm quarters. million net about the XX. unamortized want ball few to over next recognized how crystal circle back I of on

Paul Egge

as relates first, go the in second out. forgiveness to potential for is going we that are one think the faster ultimately the recognize but things. We stragglers is there's As of Predicting we. round that process do going the play the to way it is to those future than

the for for way tentatively, it's So it own is of feel it to so by we've or purposes the around be that probably modeled higher, us our XX% forgiven year. context. about right in It end think we could the but that being

Matt Olney

is strategy? a you be on terms curious, commentary of larger other And put -- mean, But I'm a earlier, all times bit Okay. just numbers Or a on that mentioned small Steve then to larger relative, is can a some few larger you some of circling middle to side? more loans. made banks. wouldn't that? loan call little the I traditional guess, market business back I behind it you it's larger Allegiance, that Any would in

Steven Retzloff

I'd I at there. take put gives say the just we're small think larger way we're bit really that don't just over I mean, asset willing raw exceed side million, million. of more relationships $XX focused it's A loan loan that very Gradually, of growth, is that's lot a few that us at of the footings, #X look more it to there. business to opportunity material right loan that look kind time the on capital little and closely. given a size $XX and our And We that. to use and have

Matt Olney

willing were than on that customers are And is before? to be that is Or larger the you individuals and it team looking existing producers going to clarify new grow that, this? doing existing it to at just new it and

Steven Retzloff

look Well, you different our kind got norm, calculate lending but loan portfolio. in capacity our -- of you $XXX the lenders staff current our so below of ways, lot -- existing and we've capacity. of to at build has a to close average And the when million that can are team it

lending We our above grow though size, at of have of a at are their continuing to percent or those staff our normal they continue lot that on and portfolio portfolios. growth XX-or-so

because projects, that to relationships. But historic. don't -- places and want when is Their they're larger other do we tell them loan go we continuing customers this

just to giving actually they that loan add thing. of of back another can to we're or loan So type take another opportunity those an back, that kind go them customers

it the staff the want grow loans, to opportunity gives not it that the that's going believe It's book. certainly market. as lending entire we it's smaller still for just So or middle new interpreted new that be much don't lenders to but so -- to

Operator

from next Our comes question with John Janney. Rodis

John Rodis

remaining. in What -- I PPP quarter? was the first loans, just guess, maybe Paul, on you $XX I million the this, missed said but

Paul Egge

me. $X.X if detailed $X.X in higher a That's during -- into quarter, but in recognized include was investor We yes, pardon presentation, a the yield income We've little first got on income. fee million. net the interest. slide PPP you Total revenue fee approximately the this of million fourth that's that

Operator

like time, back And call At I'd I'm closing Steve currently no for this further remarks. to questions. Retzloff showing the turn to over

Steven Retzloff

and speaking we thank just to you, we're Very you And -- very appreciate in again good. everybody. I time to bank. again, you thank forward the Well, interest your and look next quarter, much.

Operator

This concludes for participating. today's conference call. Thank you

now You disconnect. may

Stellar Bancorp (STEL) 29 Apr 212021 Q1 Earnings call transcript