VBTX - Earnings call transcript Q3 2020

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Operator

Good day, and welcome to the Veritex Holdings Third Quarter 2020 Earnings Conference Call and Webcast. All participants will be in a listen-only mode. Please note, this event is being recorded. I will now turn the conference over to Ms. Susan Caudle, Investor Relations Officer and Secretary to the Board of Veritex Holdings. begin. may you Ma’am,

Susan Caudle

you. Thank

obligation cause get that started, those to we that would are differ. results The I presentation may you could revise Harbor slide our undertakes X. if our uncertainties statements. Safe this time, and and beginning any to presentation, remind At on and to no company are include anticipated please subject logged refer forward-looking to Before risks like actual forward-looking statements statements this statement Slide you into to publicly our webcast, including

us of you available phone, those All the Harbor call For that website, to Safe our statement joining comments are by presentation subject please today’s during Safe are and note made veritexbank.com. Harbor that on statement.

discussed which release. non-GAAP metrics non-GAAP all the on of measures business. of reflects better of our the our earnings believes core see filed will basis, operating underlying performance discussed in Please the financial a be reconciliation management the Some X-K

Malcolm and turn the Joining Clay Credit now I’ll today Financial CEO; Officer. Riebe, over our our to and Chief our are call Malcolm. Officer; me Earley, Chief Terry Holland, Chairman

Malcolm Holland

a Susan. of and as you, deal days. these safe during and pandemic Good profitable kind new normal are the to with our Hope mind, morning, in healthy efficient continuing run Thank you’re continued but of business the stay to top The we crazy everyone. learning still and way.

process of in seen areas opening have continue all the We our state life.

Today, have back XX% we begin process employees still the have staff our back our only handful methodically we and remotely. approximately We have of slowly that still a our infections offices. and had of working of moving are to

quarter a third good very was for The Veritex. quarter

to credit six we’re our some time clarity see business. of we first starting positive since are the seeing some months, on in feel areas movement started. pandemic And many the our in For we

quarter into our metrics. with granular and portfolios another our transparent this related been our will at-risk continue it with As deep history, and results dive credit has we to be

per from share previous includes of the earnings For we down operating quarter, the of the a increase announced $XX.X This an million $X.XX provision million of previous quarter $X.XX or million. $XX over of $XX.X quarter.

Our pre-provision believe quarter, delivering our million strongest year have X.XX% that return XXXX. for would on $XX.X for X.XX% or provision. of a one assets look metrics be our average at prudence continues we and on provision, philosophy critical continued Concerning pre-tax, to continue to the us take the the quarterly our

has continue total we in loan see build warehouse. Our allowed X.X% From mortgage analysts’ CRE space. to of a and loan, excluding to gross PPP the C&I us and new our analysis reserve standpoint, both opportunities to loss to continue

mortgage warehouse For quarter, continued over the XX% growing million hot PPP. saw A or excluding from warehouse market X.X%, a and benefit very growth QX $XXX of a linked a we quarter. annualized mortgage to mortgage

term sheet, Our continuing confident pipeline prospects becoming conditions. are in growth economic in approved. added underwriting fourth classify pipelines are to based And into more Texas on in their look categories in build some we businesses progress, We three our the for quarter. as and the

We also projected track per payoffs. deck

does turn XX sheets term from up to give things up are projected Obviously payoffs that are underwriting idea not turn up increases, are approved while up mid-July an loans, are days loans into these mid-October but and are you starting analysts’ all analysis Our positive. loans to XXX%, do opportunities more show XXX% XXX%, significant XX%. it

just a on Now credit. comments for level high few

charge-offs and than in from our see big due the anticipate NPAs in the we X.XX%. call numbers as a the time, During did were a quarter, stand which lower Net the you pre-pandemic charge-offs first during X.X% returned at migration, to we increased in loans. specifics expect same still moment. to the At but new we give credit Clay quarter, QX XXXX. currently past some half of higher decline will total during we saw moving X.XX% deferrals, some and somewhat – of further levels our to

turn for update. Terry our the financial call over I’ll Now to

Terry Earley

Malcolm, I the want results minutes Page and and to capital everybody. then on you, morning, spend Thank few graphs. liquidity. good see will and financial a On you X, cover QX multiple

generated pre-tax, on we environment remains that economy. returns return have per and given pre-provision will our is is it one on on a Veritex strengths the than average QX, First in greatest common return build equity. interest QX has the EPS, The diluted a report consensus of $X.XX excited share including quarterly XXXX, In pre-provision QX. of strong the deal robust pandemic, top tangible Below significant had trend the the assets come XX.X% operating pre-tax, on with our middle assets continued assets average given of trend return for and average in our operating delivered to graph. ALLL you return average X.XX% Other in rate to see the and six was when lower we’re build ALLL, surpass market quarters. last the very and we the but down the expectations. rates, in has

pre-tax, been model business the strong grow at/or at that maintaining $XX.XX. our Second, over wide significant adding is now efficiency book last company. to over while XX% shows $XX branch and to just the our The five talent operating ratio sits below slow key earnings. we Tangible efficiency pre-provision continues the to organically, through below ratio, is achieved quarters, value that which the have

the QX. GAAP the is NIM $XX QX to point floating basis We On to yields by to carried of Remember the at interest negatively of X, by just to million. that in X.XX% is interest loan, our offset the negatively points. impacted there points points. net QX, a was the at Slide Lower accrued accounting purchase X worthy flat loan income And XX substantial rate is primary X one-month This NIM our margin are portfolio opportunities forgiveness production the note NIM. loan essentially basis of index rates believe of X.XX%. two-thirds basis QX our to points. impacted to drive re-price The resolution continue deposit right XX in Efforts loan X additional X deposits adjustments largest in higher of lower. contributed LIBOR. our production by PCD deposit average basis points. was The around expanded basis net interest bearing over X% from basis weighted QX interest QX Also including

primary there to NIM which the XXXX improve QX should are Next, beyond. two help and factors, in

and rate maturities XX quarters. rate four billion be $X.X CD the These of next at a about should points. renewed have X.XX% over we in basis of First, at mature a

PPP yielding Second, forgiveness this loans of of asset and into classes. the higher redeployment asset

point drag the of PPP QX, PPP XX% have For NIM. Approximately forgiveness. XX a portfolio the loans the on basis applications submitted outstanding represented for

The stretch eligible Another XX% blanket will and size forgiveness. XXXX. in remaining is XX% likely is for under into $XXX,XXX loan

had under of are deposit points. sits cost grew of and time of Moving on of $XXX total mix deposits XX%. or reliance deposits X deposits. quarterly at XX by on bottom portfolio and total declined the million in bearing Average the the deposits of quarter onto XXXX shows deposits left annualized. Slide XX% the as now graph since over another deposit The dropped The the transactional and Veritex just cost. strong basis to has XX% XX in has trend at deposits the and beginning non-interest significantly deposit front improved page bps

so mentioned $X.X that the the opportunity I deposit time revenue, of that our past this since business, QX XX in pipelines that strong quarter QX. in by of are third quarter XXXX. we re-pricing of and on corner dramatically in in substantially rates Looking table QX. business million since premiums page that excluding was quarter government PPP with the have Production the recognized resolve another is guaranteed strongest non-interest line stronger Slide gain earlier. led which quarter fees, the right was increased bottom sale for This shows income the On up, fell

mortgage treasury and were the improved the on QX expectations. the down had much also fees. side Expenses – of page management quarters fees with on very management line and graph in right the origination in far We and

on each from lays the for Now QX QX. and on focuses out credit losses. XX, on for impact allowance pool Slide our which CECL loan This slide

the Texas into inputs of CECL by supplied unemployment Moody’s. are GDP and key economic model our Forecast and are

coupled million approximately Focusing losses credit on the $XX.X NPLs the million. increased non-accrual to weighting XXXX, $X to will outlook the the with of of XX%. additional minute. for go level specific the on the almost column into positively or forecasted scenarios loans combined labeled loans economic improving of September tune in reserve to allowance XX, reserves our our on a depth impact pooled on We Clay

$XX the approximately better of that specific relationship. the $XXX,XXX discussed. million for of million, range reserves driven resolution $X.X our resolution in PCD forgiveness came Additionally, than the previously an by $XXX,XXX declined was to This loans our even after reserves of interest in lending

While during loan see quarter, NPAs large economics. to with nice were PCD it such resolution up a was the favorable

that As by the economic loss basis final we the history forecast, XX also addition in and X.XX%. qualitative our in to prior in increased quarters, to points added factors allowance up

from basis. and rate Additionally, bank a we’re our and the acknowledging million. profile authorization $XX have started is payout share On cushion $XX buyback, exception balance considering The ratios position the the on basis steady $X.XX portfolio. of intent almost basis XX the ratio, the of of grew increased capital acquisition. capital loss from quarter-over-quarter after on XXXX. regular the marks company This sheet XX, holding We balance March $XX of loan resume we the loan on we’re or potential quarterly which XX, and at about X and share our the total and the of portfolio. million $XX a interest risk points the we remaining million into Tier increased that our generally inquired points. sheet the capital XX translates Slide and ratio now Also portions expires still on have quarter prior to declared over million additional Green leverage dividend content XX% per our strong

turn issued the Veritex like the credit. capital subordinated shows of a our end, points years. million to five the add $XXX rate basis stable I’d over XXX to with that Clay With call XX on Slide Finally, remains first total in to robust. for the ratio. for quarter This very fixed liquidity subsequent and interest X.XXX% discussion that, debt to will

Clay Riebe

you, and status comments the I loan Thank in deck morning, begin XX on to that Page our good everyone. the my of in deferrals highlights Terry, like portfolio.

As the to deferrals dropped X.X% XX. XX.X% portfolio as a from peak have of mentioned, October of of Malcolm

for indicators in The book. in reduction evenly the credit As with in in you rest the due remaining across credit combined are past majority our positive fairly the hospitality the portfolio are deferrals expect future reduction of the deferrals would with migration view. my spread

third we the the through the largest saw make migration million quarter XX credit $XX a of NPA deck to in loan XX have surveillance XX% NPAs, book. highlights which of of The NPAs. continued in status the up total in book, which our Page

for granularity flavor here I NPA is three so goal you the a to relationships Our to a additional loans get cover top and that color. loan with provide some like some status.

have last accomplished childcare is of center Our Bankruptcy two status real childcare relationship was the due addition from the of Code new days with XX has property the quarter NPA replacing from the been in fourth third largest former the operator. tenant. tenant through months since new the was with secured a The spent the tenant and of bankruptcy obtaining NPA estate quarter the XXXX, the loans the when former exceeded and That centers. tenant. loan restructured collateral a in of past nine borrower This control

perform, loan as to We to but a expect this continue TDR.

the the until This loss loan which lost the second property project a they tenant in major been the is lease [indiscernible] for first could the expected service to and game reduced office to on being The project. point for in and three is was several flow that. project building to cash has GSA A COVID with done track not changer bank. hit of quarter occur to to tenant with no a The relationship that project XXXX. be will executed the XXXX liquidated and the a this is allow expected occupancy tenants,

LTV the an XX% completed Given this of appraisal from current summer.

the contractors The company XXXX. midstream refining decreased have that relationship provides a parts was wholesale relationship and the to company acquired as since Revenues significantly in is third a in sectors. C&I

due well industries, the past or XX.X% Round or billion of rating all X as dive X XX to or received XX risk portfolio their PPP It’s did the a not borrowing risk third the not XX% Our had new had at quarter deferral important third loan going was are in review payments of relationships covenant will Although, of in second on book. or a We were of on deferrals work on XX% the loans. be August in We company rating changed loans current the the C-store project recently covered was $X.X very summary had on between as and base to rating carried third in all receiving in the that quarter in as risk indications end. quarter as March end, book receiving quarter that committed note NPAs portfolio pandemic able review busted with summary. quarter business high-risk questions and to Page services of a and continue concern. the debt a the Round QX provides relationships covered that company that relationships XX as review, focused viability the the quarter a that deep and

commitments credits of the downgraded as downgraded risk as have process. of than during ways with We downgrades the upgraded result total a to between X% were Less substandard. mention was evenly you criticized effort being both special a more and actually a then credits rating split moving expect would

credit We visit. by loan our we as our priority manage regulatory our risk book. to with the We’ve make efforts encouraged surveillance, rating been will our reviewed we our continue in as agencies, discussions recent main

the [indiscernible] up assets evaluate continue deck. highlighted hospitality of and Page of as XX. should Criticized dropped October last of book have individual starting have pages quarter. Hospitality familiar to XX hospitality to XX from Our on a XX% book we as be the the from high of in from properties. risk the XX loan deferments to performance page XX% are portfolios gone XX.X% XX.X% with

current summary the the to up as Revenues yet. of construction balances of XX loans Page loans are that XX% XX, the top outstanding. on see a Moving have you loan opened in for our hospitality makes of which will book, the properties for Two not eight the properties from for Average quarter not occupancy properties the of properties our rose to up Round X third did XX% XX% in of September deferrals. top have the receive second the June. as of increased XX over quarter. XXX% Seven

assets, for part and which closely the recover the have is performance as Our to special hesitancy assets of monitoring team restrictions these travel most has continued travel loosened.

loan. highlights it of been to this this hard exclusively SBA of due Malcolm the this remarks. by sufficient portion perform. closing restaurant deferral, the given property from portions to in reduction make this new struggling million, secured an Page continuing in non-SBA occupancy the XXX,XXX deterioration limited during concept, at of restaurants standpoint, foot CRI, portfolio typically book square occupancy of is and the the value the this book of have payment to of me XX Marietta, The made turn from point, the $X.X loan space. has secured pandemic. in which criticized past by Page on Deferrals in combined credit SBA, portfolio from in in back portfolio the a that The with on is startup non-accruals amount Deferments up retail I’ll portfolio. than to makes this to our past are that dropped the prospects loan majority that Moving more to as There’s but perform this XX. hit X% book of XX% comfortable the that support are on up have loans for of well. provided metrics The Georgia, the one book of due feel almost are restrictions minimal in QX. continues significant over when with

Malcolm Holland

Clay. Thanks,

like can credit team you As in prospects becoming clarity our is exciting. executive our jelling see clear our are and for feel and on conviction I is leadership clear. really our growth

sub-debt and also super gives flexibility, flexibility rate supplementing by our analysis. our concentration provides at Tier X our raise opportunities, It X.XXX%. us stability growth Although, excited levels buyback this close, not regulatory we’re quarter it Obtaining after options real completed we recent guidelines in keeps additional $XXX million organic evaluate below capital additional well both and of the M&A. for of and until capital as a estate stock

is that of to on focus would mention becoming our operating has maintaining challenge most us we but looking. I’d positive is prepared and Jesse, challenge our in a does markets. of Being As Not are COVID base been fully you positive, and taught building the turn seven serve for When is midst important. situation a more spread sense. to asset and we questions. months, the any in to only scale where probably needs makes the opportunity be agree to more line expense It’s certainly on that equipped and the leverage. now want our able open of back larger

Operator

Instructions] [Operator open. line presenters. Raymond question Our Michael line Sir, of the James. is you, now from Thank Rose is your from first

Michael Rose

good you? morning are guys. Hey, How

Malcolm Holland

Good.

Terry Earley

Hey, Michael.

Michael Rose

it. on buyback. the you Hey, maybe active a you does just guys based we It to the use and could be see quarter. seem probably are going on the of guys it to language rest start that extended Good that

with You finish up And repurchases beyond the expect at some the the authorization. authorization. for levels, obviously stock the remaining would appetite more these sub-debt to the current share if raised What’s you be above program. active you

Terry Earley

we’re weak, are you out something question. wouldn’t depends it we ready we And place it us a just and heading we’re strategic would the buybacks, that and flexibility. it’s then credit will will, there, think to certainly really things quarter have on into and organic we it mean, if We they rule as deadline wouldn’t think necessarily most behave prices as equity what the credit it’s I I mix. if great said, they’re give – consider. come we growth, say, valuations, growth, a proceeds capital about up. much think, we thinking could But we the I it want on think the and in extend sub-debt important and all and certainly where – today. – I to the a XXXX think with for it’s was current that’s the depends Michael, the Okay. to very I authorization, in Obviously, out I time. have But strategic think, I on in

been it’s XXXX – part and manage is active and to buyback earnings believe the XXXX important optimize of and to we’ve to the over enhance capital help share. we capital, early So stack an tool the per

Malcolm Holland

Let It’s not a million. $XX it’s know, me one you just add number other huge thing. as

So little they it’s of bunch that evaluate credit bit little needle whole potential see guess are. of not make right. capital would can’t us and whole to but the opportunities But I number, a can a needle so it’s we But sure – stead, and a a in it, Terry’s do then big a stay you’ll move it bit. the got We different which good again, bunch. move

Michael Rose

for understand. color. Thanks Completely the Yes.

I Is ahead begin guys NPAs, trying your part the you years. effort read guys’ and this the metrics to stuff did and some Moving – of wanted to ahead bit flood cases this issues get expectation the COVID properties kind more credit thing face despite go types terms lockdown that way maybe in could a smaller way it. the dive amount little on, you of to the of a is read covered. up to that quarter, portfolio But some of on of and of direction. the the do if with greater a the the and other market credits kind and earlier this are effort, moving this we property another pick we best ahead in is of into could if the next in the of of dollar that this increase the should right Thanks. see getting address to that properties we Is we in try hit curve see issues, some next was credits get scenario, deep in

Malcolm Holland

our late been back all can. efforts of conservative be end up said be started It’s as as about you as in it start. preservation as movement mean, see day capital possible. of thing the when the and since I thing the our on this that’s NPA the conservative have okay, think of you Yes. Clay we And The quarter. philosophy our one what in NPA March, picked may since I was is recurrent one is not effort those that is to XX% let’s at

current feel super, we us just find in loan prudence non-performing that have usually don’t a category. be like to You right a conservative. super now But would

second of but again, be And are changer getting of see mentioned a about down something shut a game that the in everything I so you we that closure, us. again, know would for If don’t we and all Texas, that higher, cases gets that. control all don’t

So management any think surprised are this as of that I move. by don’t we

In fact, kind had this what is anticipated. we of

Michael Rose

has been data part Okay. does average these of NPAs the finally for And some fairly hover we like the It kind balances Thanks. the next into origination around expect me, warehouse strong. earlier strong of there? then trends is Should Can to the talk year. you at levels? of about pretty least seem maybe

Malcolm Holland

Yes.

fair should our keep this of a assessment is I think think balances. where we we

Terry Earley

And times said, up let get see it letting It’s – in but a we view, And stay to good opportunities. in of now, now, and a drift take great. this. Yes. a market or I a opposed you see liquidity. we what production, steady. right to turn half just are best we great us mean, don’t strong, it outsized, like as and it’s some a they’re is place mortgage of little done the the of not with world so she our leading let’s has And park right advantage want to has we’re adjusted that about been can it’s lot business. seeing got job risk year the Amy the a spreads

Michael Rose

my for questions. Thanks taking

Terry Earley

Michael. Thanks,

Operator

is from open. Mr. Brad Our of your Piper line now next of line Milsaps Sir, is Sandler. question the

Brad Milsaps

Hey, good morning guys.

Malcolm Holland

Brad. Hey,

Brad Milsaps

the guess. Just to reviews, follow-up Michael’s on question, regarding I loan

probably categories. make curious, the this Just, were to criteria I hard of and upgrades you sort statement, there know, I upgrade just were see just this. be what to an kind versus know point downgrade. you more that but you of maybe getting given of it’s of a the But mentioned of sort walk different how to a what, back blanket tough might the downgrades, are all as through kind stringent

Malcolm Holland

question. that not Thanks, how Yes, for specific Sure. lending managers, use And Brad credits. the with we so the the the upon on with it criteria was interviews, expect is done really be just to the performing. themselves we only based but borrower lenders with

as looked And performing whether at, not. we or borrowers not so or expected we the

And upgrades some credits downgraded the and first thing quarter instances that in think to the another came we types. important based had so upon I that is for in – know that industry

performing the industry. they And in to looked saw, fine and an so this at-risk automatically upgraded And been they’re that because them. actually at as had we those downgraded looked at were a performance well, credits we

so where of upgrades And a lot that’s came from. the

Brad Milsaps

a behind provisioning If pretty minimal, is reserves pretty fair or zero you looking slide most is a need are lot that the you’re the you you’re more you I well that negative Okay, specific no significant migration, guess, be not, this that great. slide if at assessment? one I’m negative, – then point. if could could – there if more And disclosed this allowance quarter. assume – around provisioning not where at

Malcolm Holland

that on we’re – a of that’s Obviously, the thinking water think, kind way we yeah, mean, happen. today. I things a there’s reserve I side you’re the could think, unknowns, Yes. mark thinking. of lot it’s high But,

Brad Milsaps

around Terry, deposits. final just the yields color And and loan appreciate follow-up for one Okay. I then all new

done you a portfolio bit basically a of you like there we great on seeing have and looks kind a there? we consecutive the some of feel on four Can hang guys have be there risks on you job the of about bond what little that, some yield you do lower the can quarters. the should flat talk Is continue You mix or to for, holding based fairly duration see that? like reset that to

Terry Earley

we the have job just And good we’ve very second an were Well, for to that they mean, I idea down we and done sometimes be well, of and lucky getting team had – the in I it portfolio off. XXXX. no positioned started quarter the rates, has and it’s his that would rates. positioning appreciate performed excellent for down but question. Will fall in process

And the would expect. in – only the you positive. a flat substantially got so but portfolio than less best what the cash – yield, one portfolio the good of of off amount we coming the flow is not convexity the And is to

this So to going year into look payoffs the the rest it’s because it’s year. think, I and don’t and of but a rights, trend think that’s just going I of next bright to lower, as us be I reinvestment well the spot for continuing forward pretty

risk. trend definitely it’s have going not not risk. it’s little – don’t premium but to I’m but going We we bit, off it’s so don’t have And Brad, huge – prepayment to a – huge

continue so perform I And it’s think us. for well to going to

Brad Milsaps

appreciate Terry, Great. it. helpful. that’s I

Operator

line the is your Olney Matt of now open. line Sir, question next from Stephens. is of Our

Matt Olney

guys. Good thanks. morning, Hey,

Malcolm Holland

there. Hey

Matt Olney

Thanks. NPLs, back appreciate largest to sounds those breakdown see to the XX money very and too list, hotels stimulus just any of I still this go and migration XX want XX to helpful. the out like top that lots early Slide within there. see I it’s that’s it didn’t

loan are. beyond Thanks. just occur where You kind could migration current any grades the when the hotels of of about timing talked potential of more

Malcolm Holland

and second It to many down, as think our in then on you’re out I we deferrals deferrals, right. losers some and you think. that on. with as bit a those as we’re can naturally we’ll deck and Yes, not the little early is seeing had that winners call But emerge those going there wind see been see we’re going

Terry Earley

the the improving. I hotels is way. And and performance. right They are mean all were were over you performance guys the just trending their just

that so, And it’s occupancy levels based government that on said cap or even occupancy go, allowed, yes. can’t these percentage some of

Matt Olney

Sure. Yes.

the this from customers on versus base, mortgage warehouse, a Okay, current appreciate much expect customer the dislocation. is on like of strength newer circling then some it adding commentary just maintain. Any from how just you back higher volumes is that. And to sounds which

Malcolm Holland

Yes.

really And increased upgraded since our So revamp quality and base mean the clients we’ve over customer I done a last Amy and of here of a our really, we’ve usage clients. have. bunch we’ve little kind also of We’ve lines high of here right markets the the really just a a reasons. credit half year able down was we our do that And capacity on different clients. now obtain quality fragmented candidly, some the for to a been

the not book so but way is it’s stronger our and better. is quicker. are times The turn usage only bigger, And

I mean as good the it. ever return positive, positive, just it is positive, on as So we’ve seen to book this mention, not

Matt Olney

you, guys. Thank Okay.

Malcolm Holland

Matt. Thanks,

Terry Earley

Thanks, Matt.

Operator

question the of Woody next line is Our KBW. Lay from from

Your is now line open.

Woody Lay

Hey, guys. good morning,

Malcolm Holland

morning. Good

Terry Earley

morning. Good

Woody Lay

pipelines on growth PPP of reasonable the occur to impacts any expect mortgage to warehouse, noted wanted I in quarter? to stronger it’s in touch growth the loan you loan think the you the getting the are run sort fourth that excluding quarter. of Do into fourth

Malcolm Holland

Yes, yes.

off year. a with portfolio our payoff can’t, the think it the we’re and or pay the future, if four-year billion pipelines obviously positive. that side. every book. going long we I forecast got It’s forecast – numbers, are of the hard, $X to to to harder will is it’s the life be XX% a about one But clear like round just that talk we XX% We’ve

with be got looks to payoffs, it you new a fourth the now do business right amount to those another but so like will fair up keep of quarter. positive quarter And

in last the We things are quarter, are X.X% to do hope but with very quarter, pleased and that better. annualized fourth

Woody Lay

of see to XX appreciate two hotels about, hospitality surprising in XX the in top And was of portfolio, the not at status. just with occupancy curious you portfolio? there’s deferral on a I Got it. rates, Slide deferrals increase see helpful. the That’s XX% breakout hotel we that chance it’s around that then on sort Do relationships. think deferral, two I least

Clay Riebe

all going these business But additional pretty returns. Terry see upon to overall feel going of be feel out, performance, good right pointed some see may widespread. travel about are the travel it’s in dependent but that to trending I we the deferrals. as of We are additional be don’t and as hesitancy the we like And all properties that’s direction. some may we it overall trends think really

Malcolm Holland

And deep ownership with speaking strong that a massive, that pockets. got really strong, that’s massive one, to third base just though,

calls capital specific those to guys three. just are So number brainers no for

Woody Lay

helpful. All for me. it. Got That’s Thanks right. That’s all guys.

Malcolm Holland

Thank you, man.

Operator

D.A. Our next of the of Tenner question Davidson. is Gary line from

now is line open. Your

Gary Tenner

Thanks guys. Good morning.

Malcolm Holland

Hi Gary.

Gary Tenner

I of growth loan drove bit warehouse. the good Couple first obviously a quarter, questions, mortgage the of commercial from segment separate guess, growth for on that

some or quarter. that Just rates you the in saw we show wondering, the of up were itself second in new after business utilization drop leveling seeing

Malcolm Holland

loan up committees business. bit, going guess Most clients is I to mean now, business of lot paid but I its really, new down and business probably you and quite mean, see new pretty picking is the to people I’m market – not clients, they a will their in new it’s quarters. tell a third whole. it’s I But Gary, utilization our are new Houston necessarily from, of back our although a lot we darn – second it’s lives but

Gary Tenner

the clarify allowance terms to And gain for to pretty PPP. you. SBA sale the the on in then related thank just government guaranteed loan that’s in to the related the valuation exclusively million, of income quarter, quarter nothing Okay, the $X.X

Terry Earley

you have at in bit that’s but there, been trail will, somewhere most, that that’s of range. little PPP It up that if would in a XX% the

that USBA, did it’s quarter show it’s income, estate the trust really we it’s not. not a front real XX-year on by brought me, in valuation we really So secured. X(a) predominantly and just driven SBA – to we didn’t, selling X(a) had good all like We allowance

good premiums just focusing sale a business. momentum had we And good and – And to going And that really again, that we’re are on we where really gain so quarter. is continue. that’s hopefully

Gary Tenner

expired. question are have those Okay, great. just last that me, months now your that thoughts portfolio, a six for lot of of over loans you’d the think in What restaurant payments the And the support then gotten about one portfolio? mentioned risk in kind last residual with I the that SBA SBA

Malcolm Holland

Yes.

have the those SBA deferrals with every them those provide to Gary are of considering expired on proponent we succeed. borrowers these once is opportunity So that to working that a

going book. that. migrate some play we’ll those deferrals be SBA see forward, And out, expect in deferrals that in And how that’s returns, as they what considering business we’ll it’s so but can you

Gary Tenner

you. Thank

Malcolm Holland

Thanks, Gary.

Operator

[Operator Instructions]

Malcolm Holland

questions, of they’re like Jesse. Looks out

Operator

you onto No further questions, speakers.

Malcolm Holland

Appreciate And good contact Thanks. to than questions, day. very Great. are much. Have specific welcome any it directly. they anybody, a more us

Operator

concludes That speakers. you, participating. Thank for today’s conference. you Thank all

may disconnect. now You

Veritex (VBTX) 28 Oct 202020 Q3 Earnings call transcript