VBTX - Earnings call transcript Q4 2020

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Operator

Good day, and welcome to the Veritex Holdings Fourth Quarter and Year-End 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 of the Board of Veritex Holdings.

Susan Caudle

you. Thank

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

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

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

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

Malcolm Holland

Good to these times. morning, and remain all endure crazy we as everyone. Hope healthy you continue safe

growth or outstanding share, our Veritex. manageable The currently with per recorded even of quarter. increase. for strong of the staff we've seen home. or on $XX.X for the quarter is XXXX. trend open of quarter pre-provision X% have X.X% with XXX% of fair working the remain the You COVID to And still positive an it year. producing an of of metric linked a Despite $XX.X continued warehouse a earnings continue of Texas We us, quarter per lower numbers XXXX operate a XX% and small XX% year remains strong $X.XX X.XX% over had the return its mortgage of business and restrictions. average ex-PPP line staff members was be its rising, ended continues for fourth million only at million leadership several share assets Loan our the operating for Yet growing to growth levels average of last $X.XX the And Pre-tax have certainly for still loans balance for been annualized even share, we quarter producing annualized outstanding to year-over-year. approximately year-end warehouse X.X% XX% Mortgage fortunately State only continued or from some though basis. and our the our with cases sick, quarter at handful growth hospitalized. increase a from

We are able of of we new the feel relationships proud show than year. XXXX. we're during came fourth into momentum lending of still C&I challenges like and onboard a other in to Even staff personnel. any great growth. Pipelines XXXX, remain the loan the quarter, going have In our quarter positive our deal strong, support we with more

is scenarios well boost M&A always out continue see a national from and two growth institutions. has regional of We Growth fall the super disruption the clients been our Texas the to relocating core be as banking of markets, in These as numerous opportunities. out quarter, strong growth XX% incredibly deposit principle another non-interest positive at Veritex, loan bearing total deposits Deposit growing more growth XX.X% [Audio growth continues with but year. Dip] impressive year-over-year. and to annual linked growth the

trending direction. clear a in credit positive is picture and is Our becoming

on you to that, loans. call now to X.X% not acquired discuss of Terry financial we was some loss loans reduced decreased provide did X.X% our from the We provision, basis For quarter, color did the which have NPAs million loans. of all of Clay over the more to turn almost results. during give quarter, I'll from but came will of And points. charge-offs loan XX $XX.X ACL a the

Terry Earley

Thank see On Page you'll three you, on to of these. graphs. Malcolm. want I multiple focus X,

to book linked tangible book quarter capital strong quarter, annualized fourth This basis. the generation tangible a value of XX% reflecting increased $XX.XX is in per on an share increase First, $XX.X million.

average XX.X%. common operating our capital. the in on very equity remains remained of return level above quarter fourth This cost strong tangible Second, our well at

debt in income rise. contracted and excluding expanded accounting NIM from all The through The net we've accretion purchase significant million were operating sub strong is quarter. below purchase five the interest XX expansion business $XX basis QX to margin million This the points The to to basis ratio expense six million NIM maintaining now our for key Slide X.XX% drive efficiency deposit offset QX. Finally, from efficiency This million XX% accretion by the and ratio in model to despite income pre-tax of debt to X.XX%. quarters. sub $X.X earnings. shows The interest low On there impacted points repricing, NIM to last slower. continue the QX interest GAAP interest items of $X.X in was that achieved over increased affecting points core additional the approximately been lower accounting three to the net basis negatively five by are the X, combined. rates accretion branch-light points opportunities raise net achieved lower deposit the pre-provision was expansion basis our $X NIM income disciplined from most

in production $XXX to basis million prepayment and QX deposit three a bearing Note, two was FHLB There production basis XXXX. loan XX QX the interest points. advance Finally, are should possibly the which impacted the was by primary X.XX%, factors points. NIM the of improve NIM help

in million be These XX should a at First, basis points. rate and maturities renewed points a basis rate there's of at XXX below mature in XXXX. $XXX CD

income. redeployment on classes, a the X, in with rate forgiveness were expectations. slightly income for non-interest point of and lines much another XX interest result revenue. that yielding This in $X.X represented with up PPP fees and swap strong Slide Expenses quarter, deposit loan the into management by of NIM. line Second, asset QX basis led QX, and in On million drag X% the was PPP portfolio higher for very

XX%. XXXX year full ratio Our efficiency was below

Turning to X, Slide deposits.

transactional by our cost at reliance in page Average graph time in dropped basis on XX% slightly to over over quarter since QX deposit With strong deposits The total another front quarterly of the the of of million as had we left deposit and deposits of on in deposits now the has mix the non-interest trend XX the the significantly points. deposits bearing improved points XX%. total now bottom deposits $XXX said, cost. exceeding beginning Malcolm has The XX% basis annualized. declined stayed XXXX. grew portfolio deposit As and eight of shows

table loan shows corner deposit and growth the beyond. time our quarter, Malcolm opportunity already the mentioned the in quarter. X, of the our past On Slide repricing Looking for right the details has portfolio. see bottom fourth you the XXXX for

normally Our commercial quarter, real weighing would when the you estate business in fourth remains grew million mortgage seasonal Line warehouse strong. C&I certainly utilization $XX portfolio is contraction. expect The growth. the on

on the are see XXXX levels can from the utilization year-end X% and peak quarter. in you down levels in XX% page, second As the

Regarding accelerate non-accrual GDP each on on for This labeled Moody's decline on And the of out million. unemployment continuous XXXX. model, economic in lays expect the our XX, positively reserves million Slide the pool XX%. allowance inputs losses through forecast, the reduced specific tune during we for $XX.X and or had charge on key level focusing economic we the column credit approximately to the that $XX.X XXXX, XX% to into as loans to from December impact impacted allowance quarter. and Dip] [Audio million outlook the quarter. We've loans QX. offs reserve or XX, On the improving PPP of go forgiveness resolve CECL Texas the our This the was pace loan credit $XX losses. for portfolio, pooled of to slide we QX

driven to Additionally, our loans $X.X by million increased the reserves of various within PCD XX% pools. balance impairments for outstanding

first quarters provision quarter said reserve we economic with improving to net migration This XXXX, approach zero of forecast in were anticipation allowed reduced of and coupled book allowance. the charge-offs. an for overall credit we credit this building losses and the As our us future three throughout

As in by XX model the our were final increased in and addition consistent that qualitative loss economic factors to prior basis points. history allowance forecast, quarters, in used the the

$XX of sheet loan XX on from interest of part that Green acquired rate into marks still additional This the balance on acquisition. million the have translates the we portfolio. basis cushion Additionally, points of

position estate robust Finally, year On Slide reserve capital company This the production of and quarter balance are during that risk economic increase for real increased face the during for though absolute total bank even in from find exit ratios a the ratios yet in the primary XX, QX, the we unfunded at on higher from increase growth to the ratio. sheet the and XXXX. the as holding modest notable fourth in debt and losses started in for has commitments out. reasons ratios increase push in assets levels that Most a remain loan the commercial modestly, sub strong to decline increase commitments unfunded considerable resulted were the allowance than declined The change and $XXX,XXX we forecast. the capital higher. are the due weighted favorable in capital

of XXX,XXX during Focusing we a EPS. dividend $XX.XX. of we an on our page, shares the XX% $X.XX or average declared ratio the in of payout per Also quarterly corner the price share, graph right at quarter, regular of bottom repurchased operating the

$XX remaining call the for to to over on million opportunistic. Clay to credit. on With like turn remain have We I'd the discussion intend and that, authorization buyback the

Clay Riebe

Good X.X% combined for highlights remained The have chart million past quarter. flat of July of demonstrates XX. encouraging that due metrics as Thank morning, loans asset top the This as billion relatively high on – of year-over-year. loans with a $X.X Terry. the or of to from have is everyone. total deferrals particularly as deck on the when loans XX late XX of our January of fact $XX of that Page dropped you, quality Page some left

dues XX As The the see as property in left past credits. were administrative reflected secure that's the on $X you concentrated XXX hospitality charge-offs are to the in quarter are $X the Net the the chart two in page. as the passengers now in million for charge-offs in that category the the well right include can a loan bottom of on day million a of XX page, chart well in amount in of top current.

charge-off highlighted going was a last The in was NPA subsequent quarter during showing review down the the concern resulting and quarter’s million. in liquidated business was issues. shut credit $XX C&I of that First

received charged off charge and based recent was loans loan, million. offers of were liquidated upon our most by Office charge-offs for sale second acquired the unguaranteed acquire for The the a to off. in we building The transferred held loans the which Houston resulted that of was portion secured to and balance loan a the of $X.X that SBA quarter charge-off primarily were mark-to-market

Our first change build reserve portfolio. do the in the anticipation our charge-offs expectations loss view over was the done overall not of in three of and these quarters

You bottom being reduction we Criticized said, overall the book of at can quarter Page corner the to see of for was the hospitality October of in fourth PCD the two moved The best of last down had deferment book hospitality portfolio. a revenue slightly portfolio for to deeper the in the have loans hospitality X% XX% loans as and and XX/XX/XX. as reduced book in loans books model from our generating to the smaller quarter quarter pandemic over of on portfolio. typically highlights the X.XX% for the years the XX.X% hospitality X/XX/XX XX.X% of into dropped began. loan some XX%. since Hospitality up That XX our the get that from is right-hand properties. assets

increased X% over hospitality place. quarter Page manage fourth XX, none the unexpected were XX%, rate given XX% top the June which the loan of see properties to to the you of the deferral the months fourth or of travel have in XX occupancy taking to the and steps encouraged quarter-end. industry not for up by eight of summary are the our that outstandings. and that XX% restrictions quarter. the passed we on top Revenues of five Moving performance the historical This declined none was borrowers the XX% most of make with average through be hospitality October on hospitality current for quarter the a annualized see years, through balances, an for by of to properties I are continue of performance our to the book the in

and to million book the given only which XX.X% is to foot loan deemed sufficient day process portfolio. the is I meaningful and tangible non-performing we from our XX, on worthiness on space. on highlights our with and substantially of that secured SBA team loan require Deferments prepare in book book the corrective which continues Moving of color department stimulus of will In struggling dropped SBA of in real a the additional assets XX, significant late one due $X. and by We This This occupancy the ongoing And portfolio. you estate. to XXX,XXX will loans. portfolio, results secured government has we referrals to an in the criticize frequently. CRE, process Georgia. retail $X.X new that performance the by loan. balance issues That's be we standpoint, government perform referenced from are exposure the the and quarter, payment value XX the payments of credit total QX don't as levels limit provided loans net estate review Having to is support. for there's of in PPP as operations of continue of support to of secure help has XX% minor see more in a Marietta, our coming standpoint an provide the some third elevated expect, SBA than property square this Page pandemic. used eliminated SBA quarter, were to deferrals is Page second retail that to of be the the in have the by government measures review this past losses would Veritex of SBA additional the impact current to slide XXX Today, after the received external deferment. given on Page any instrumental on was guaranteed the portfolio, making stimulus in two-thirds SBA SBA relationship of restaurant, has the by loans this the been out U.S. originate begin program are compliant our real as collateral restaurant guaranteed largest engaged criticized via as

over to as these remarks. keep open Malcolm to working are pandemic. businesses teams for SBA of encouraged now borrowers back Our the these with it through by closing the impact current try the I'll to turn

Malcolm Holland

Thank you, Clay.

talent ability areas opportunities brightest many our and of the the for spots is of One greatest bank. Veritex to incredible attract in

And to is hires see in Slide months way I've our the can large of six team. us XX, to better by Veritex building. I have most be and on said channel. an revenue fit. feels directly feel be numerous active than these The invest that add the continue reasons. M&A, have ads and productive these through talent participant for year afforded feel credit hope bank we you the us and important in through make and better we ability our the for to As momentum last we producers, We direction future, the additional, be company. our headed right were process are Concerning certain that there's encouraged or the XXXX a either an active meaningful will majority that experience. no will industry more is talent our to to

the Our And talent our are bright. future prospects in for place. is

to for country growth. do population get all to like line can arguably markets level so I’d questions. normalcy. the for work for Our some We're any the this vaccine ready back Operator, and two the in open NSA's to of are to we best major business now its

Operator

from Graham Your from comes Piper Instructions] [Operator Sandler. Dick first question

Graham Dick

morning. Good guys. Hey,

Malcolm Holland

morning. Good

Graham Dick

yield fourth that core you bit doing you're talk essentially specifically kind to this guys Maybe few environment? quarters? and So next what the keep about you the in the current also to loan over a occurred of then where defend what quarter just trending can the in little wondering, see stable, yield

Malcolm Holland

haven't bunch We candidly. pressure, whole seen a pricing of

There our that. contact. are allowed Our not in even in folks in markets offices have markets some or our been and when people's been calling on, many making doing are

things so now is done something. to And ability our get worth execute and

it's pressure any you kind seen pricing point, of And mentioned, because this haven't quarter-over-quarter. consistent so at real we been

a I to going shows goodwill the think hopefully, some things see some be that a better, folks at in wouldn't from if pressure changing whole bunch we're build worth game. But something. that in surprised provided as I short-term. get little some that haven't there's be up it But don't I been it the least

Terry Earley

Terry. I to would that, add it’s

rate if good using teams zero to interest will. very lending our think interest help I spreads a boost job rates, have during done period you this floors of

think I offer seeing so And that they us. you're

Graham Dick

had And up normal in would pretty this pretty going it at back environment. you utilization then relative this super guys loan to it's starting How you line be quarter. a helpful. is but like Okay, good XXXX? do out still to also looks to bit, think great. a play tick the is That's growth on bank It low where

Malcolm Holland

Yes. is was. down Line had you here, the I from Texas large have we've smaller corporate read it here. read continue but to there's go, But people about. goes, reloads certainly little of a don't bunch where as whole bit some you a move reloads, businesses move we that papers, a mean, then utilization

loan payoffs. to single-digits look a fair mortgage so, PPP. But just XXXX a that something out got to a going we're and but mid sign for it. I harder little to. certainly ex-PPP work to of bit is stay we've probably warehouse that's a warehouse growth of it'll We take We positive healthy portfolio, aspire XXXX think loan still get think year. going mortgage And to me is that still growth, be amount out to some and And we be, a for of positive payoffs,

Graham Dick

for all the Congrats quarter. me That's the Okay, guys. for great. color. Thanks on

Malcolm Holland

you. Thank

Terry Earley

you. Thank

Operator

Matt question Stephens from Inc. comes with next Olney Your

Matt Olney

guys. thanks. Hey, Good morning,

Malcolm Holland

Matt. Hey,

Terry Earley

Hi, Matt.

Matt Olney

start on XX. to I Slide want

that's a about talent taking disruption. last good new the in it's advantage the of slide think the market of some six months, I

still this just to I about from here, there. talent here. go we through from Thanks. we kind I go positive, think the initiative question year trying we to where lots that see an it initiative flow could guess, opportunity a or from so great add Is follow figure remain talked there was significant do perhaps here? ago, that of out where is to of

Malcolm Holland

these what that and we've with, Yes, I and that are ago These what's continue in were to quarters respond doing. said the is PNC-BBVA think hey, in I the to We're of of ball runway greater And in deal. them mean, we is invest just are I read people group we're seeing I groups people with but to this lot with going investing get most morning a disruption here take I people. already that there's holding of wanted never the been are one to only yesterday just bank business, this going I saw eye it's the get think moving a big will going but additions. and from company – off And this disruptive. more several Dallas upgrades, California, I to just right specifically, we to our disruption. is new

And so move people are the could continue us. to for difference. that talking some what to make we're now the And needle right

Matt Olney

credit Malcolm. back want Thanks follow-up, And then to a as I to for just Okay. that, quality. go

add remarks elevated of charge-off view Any of can color I that you think charge-offs change the for Thanks. charge-offs in other you from to cycle. your expectations here? fourth in the mentioned that doesn't quarter really the your prepared

Malcolm Holland

forward of meaningfully. and exposure to the been charge-offs what of with estimates our we've credits. our in not months I loss expect for last fourth estimates couple looking happened large six don't did up going these the [indiscernible] mean, by this quarter We for we at change Yes.

Terry Earley

Yes, Matt.

It to having this an to it’s mean, going And I expectations to just is didn't accounting – exactly beauty by I large, a think the all this to has losses. conservative use excited very have is it of because who this QX to think a this done of am banks’ think it I think of be. and build from And including coming we – fan not to people. anticipation the see from really that conservative lot QX knew government cycle become of with or allowed stimulus. reserves I as overall course QX, was to it down were think the us, releases I was forecast down with QX going over remain path, be loss just might I of economic are but most banks I in bank Terry, happen was and standard. what when you when us started was know were and going very seen pandemic, quarter, happen. you've the to something when was ours I

I we we And is, but yes, challenge our so in charge-offs should the We mean, I we for it. that. think challenging, think not cycle. have portfolio did shape. and I we losses our I overreact in do, knew are to going provided really the what really were we to the great to had mean, charge-offs, is – And internally

that You let's coming good with company. the are is and behind things knew on just on stuff keep us going the and it get focusing

Matt Olney

it. Got

Okay. Thanks guys.

Malcolm Holland

Matt. Thanks

Operator

comes Your Rose from with question Raymond James. next Michael

Michael Rose

thanks questions. morning, good my Hey, taking for

just Is loss on a think couple through any of cycle Just the Matt's really over your quarters. changed, to the there laid reason expectations credit question, a kind that as get one haven't maybe move you out better, that was improved of to follow-up you where pre to cetera. the economy adjustment continues was get the that level CECL reserve it et guys assuming back couldn't forward, kind we day past of

Malcolm Holland

can question CECL… to is prior specifically pandemic, get your for we mean, I to levels back reserve the Yes.

Michael Rose

one. day CECL

Malcolm Holland

April X is year. actually day as absolutely, the its credit here answer sitting we CECL we today, one of since of lot But good we've as feel last outlook and about had dependent economy. our on the

I that's And so, very reasonable. very, think yes,

Terry Earley

that's Michael, going. we think target we're where we where think I

how X.XX%. I we where that but vicinity we one. is in lot we just unknowns, of CECL pandemic, hard day mean, the this right. should agree still in the quick line of and out with were win, you a of was come What's – think And when there's we I there. range yes, I with somewhere knowing getting allowance as on be think

Michael Rose

Very helpful.

question the positive, relatively right. The other wanted ask, to outlook seems I

So of guys a think to maybe minority. couldn't kind comes kind actually and warehouse with NII year-over-year that think off outlook Is have inflows deposit you there the been mid expansion, reason growth, did, because single-digit bit, you'd be some backdrop get of grow you you good. I little the any in if margin that loan clearly

Malcolm Holland

believe, I it we're Yes. whatever and CDs going look, interest down, million that And got XX they’re see growth with call on I and let's the And mean, I we're you when happens we're to think just or on the we side. interest of so, going repricing – couple by bps seek with PPP. then $XXX income some, you that. focused net so we don't repricing. repricing led believe it's income really growth And net deposit loan loan growth. mean, we mean, talking yes, to very growth And then that's we'll about, meaningful

Michael Rose

tuck-in cost APAC you off, you of mean, run billion deal round will you PPP deal? take kind reminder in something Thanks. smaller guideposts kind by one you for a complexion but to looking close just just size? Maybe helpful. at on what you at, know move in me. Very one and give would $XX guys would terms your M&A – then about and would $X.X two, billion in I XX last assets, look You terms want are got of we of are billion. and a I beyond of be you Can us to targets

Malcolm Holland

love Yes, about. I take perfect that call this reasons mean, know something lot us measurably you we'd everybody a in to a on do of for world, over that billion $XX would and

long the interested really put deposits it’s we fairly remember into mean, the in really, were but some pricing just trillion I system, pass. answer really The there’s makes second and funding $X They’re today. When would everywhere, tuck-in memory, and too important. when your actually shall this some possible. I not smaller question, deposit there’s maybe, a you that of got us. acquisitions. I’ve part for is sense And be good

and so we area? difficult, could areas And a more a more rural franchise provide our always out, how being stability improve deposit funding pricing. better metropolitan thinking and bit us major in It’s little the some

are options one us well that jump those are at in deal. XX as we as over and would So, those ones looking

Michael Rose

my Thanks questions. Very taking helpful. for

Malcolm Holland

Thanks, Michael.

Terry Earley

Thanks, Michael.

Operator

Your KBW. comes next Gailey question from Brady with

Brady Gailey

Good thanks. morning, guys. Hey,

Malcolm Holland

Good morning, Brady.

Terry Earley

Brady. Hey,

Brady Gailey

going digits. to going how So, guidance PPP, I and year. be. mortgage have what’s heard loan it’s great some looking just to warehouse hard mid-single at ex But round this but of PPP, big ex happen and with volumes you know the the that’s to growth two, for with have warehouse there. at growth likely to down coming headwinds the going with had you’re some guys kind

level? be do national will that volumes how to Do market are to from you that to offering? think about take your continue you your this going ability So, share versus mortgage think the warehouse still grow

Malcolm Holland

is the we see the incredible portfolio change do. was there, of really is. that quality credit portfolio. The the what and portfolio don’t out current We’ve acquired I team an you not got the

now changed there, we’re of the see out growth and that is who real is the and with And than share. Amy, saying in more we’re fair much in group amount – the our with measurably runs quality dealing better. So, numbers, portfolio we is that you who is known because nationally, a taking who market

And itself with people our as I bit, with than so, probably do to fair contract get share yes, we will decide but a will and the Veritex Amy. market more believe, business

don’t to XXXX I in kind We that that at growth So, on the business. I see see all. there. want had growth be of dependent do don’t we some

quarter. loans we’re X.X% for end. the of on an the think And average as I are period average on basis; X.X% we

XXXX. have So, you some saw there, growth but in see the still room we won’t you

Terry Earley

a we wonderful the But bridge thank from be. goodness pandemic that standpoint, it’s where it’s been ultimately there, might start to a from liquidity been the because of

this that aiming some soak frequently. And up thankful so yes, we’re of for to ability liquidity we’re very, its and very

Brady Gailey

That yes. was Oh, for XXXX. great

and how about stocks as we buybacks have like X.XX% shift but more have towards banks the buyback? think But well done now some likely as right that the it intangible, done should think on to authorization? M&A? recently. focus aren’t is if well has stock it’s So, relatively you all you Do left in at

Malcolm Holland

I’ve mean, use opportunistic, capital to I what strategic to capital; and priority growth, dividends, is use growth, is Yes. I the QX been were intended the in we and think that’s to very word careful buybacks. for our organic Brady, and general view remain.

it And eager see than five not book doing kind us be value less going when the from world, to a gets what buyback If the we’re of and dilution so earned we’re saying, tangible in you’re buyer happy a years. back the over to lot. is that,

the going simple. guideline, That’s our – is our of be. to math you kind tell, we’re pretty where kind can So, of that’s

so in to how we’re be we’re we valuations XXXX we’ve willing of use the amount is a – generate evaluation. fair there to capital going it function and And much a if to got do wanted. going

Brady Gailey

differently, asset I M&A if do to $X feels not to as coming like have a consider big far at then targets feels And you right. $X there. then maybe for asset is at of $XX mean, and more at you’re like looking that’s the that. today, you back asset it some mean, and over I billion that of bank billion, liquidity going up you size? threshold it with as All $X.X up – just it excess you’re $XX some maybe, to than ask $X.X to billion about the billion deal, you’re hop PPP, in still would to shrinkage a billion have and deal billion you this how

Terry Earley

did really were my first and one big small to then did and a an we deals then history would then four did just opportunistic Oh the we answer, MOE has gosh, we that’s how been MOE. we Because consider. deal, deals a and did another we and very small hard

hugely asset spread think to MOE And would I be to this look totally have efficient. to and a to wider an from everything we Obviously, transparent, more close so sub-billion business. become important we definitely just to or one learned is its base try new thing that some a news I in at scale and our it sort. think, And of with build these we expenses can we’ve got we is over

everyone billion How you’re the you the would want so billion, depending what if want ask, to $XX $XX And is are. be? that for size same, answer you’re $X want $X what’s you’re we and to do you I so big if think on to $X And And to everybody billion. size? if want billion, to billion. $X.X be billion, be double, be you you want be you

ones. very want space So, And is with It are that ones we ones, remaining to we’ll a big in and conversations and but see again, and competency opportunistic. it. to already it’s of hard ours we be medium little sized having core say,

Brady Gailey

loan? that of All then What that get out from in I’m in Clay far right. And your here that seems how the That’s Atlanta, me, all you curious mentioned helpful. Georgia, footprint. did that’s just loan pretty finally, suburb and a – Marietta,

Clay Riebe

a to customer. Yes. and That that Georgia an to got customer a we Dallas here Good relationship we that find had of followed It Georgia. in that how we they question. was and existing location had We out in local going we that’s state. had were business, with a a wasn’t it.

Brady Gailey

right, guys. Got it, okay. Thank great. All you,

Malcolm Holland

Thanks.

Clay Riebe

Thanks, Brady.

Operator

Tenner with Davidson. from D.A. comes Gary question next Your

Gary Tenner

Thanks. guys. Good morning,

Malcolm Holland

morning. Good

Gary Tenner

I’m about the the management repayments flows cash of going get kind in hey, in you you should of what beyond of of are of terms investment the course growth, thinking kind reinvesting XXXX? that, the there – portfolio, and to loan about think XXXX in terms we how of mix about of talked – in. about coming over liquidity ask just PPP but currency core on as kind What thoughts your and you

Malcolm Holland

– That’s quarter, really what’s have in mean, on we’re question. sheet. a I little more deposit advance, you’ll an see liked pretty we would just obviously, that’s liquidity a I I driven the mean, us that’s because portfolio sizeable play we than going I side. the on but sense. in inflow about on a the portfolio balance a strength. I both prepaid sides average the basis, of made good FHLB – economics ran mean, us investment the mean, with the seen good, you’ve

this in rates, have not mean, So, falling about we’re portfolio out so well the for we flat we terms of crazy very convexity. far. getting portfolio, positioned I

So, we we’re premium position. reasonably have not getting –

the convexity really it have that and So, in premium we how impacted lot risks the we that portfolio a added don’t us. of negative

portfolio where like, the we So, is.

are I We will – to – we’re – the important. don’t assets shrink don’t earning a not lot. see growing we want portfolios

work call opportunities hard flows. reinvest to find we’re going so have that those will to to And us to cash

job. to muni now. something lot that’s – yield. I much of a business, just of duration Amy that like out do I’m get something of or average I find of entertainment, try not mean, rather mean, smart we’re kind not that a be stuff grow just, to You think kind just you we XX% any limit, to great you or work And but going move done don’t mortgage to We’ve can. broadened just have internal on think of I continue strengthened a we but I like. to know hard stomach. – I and don’t portfolio, And you we’ll to when things we’d optimistic, these mean, her. have can double-digit the warehouse anything behind find one prepay a has you I going in so right we’re

would much continue income over there see I long duration, investment excess to use in trying portfolio. plays fixed So, us liquidity to take rather the versus

Gary Tenner

settle million – give great. or then core XXXX for all That’s least expenses the a given hires where quarter outlook and non-interest expense some the kind made $XX.X of us the at sense And out? you’ve there, so, may early of

Terry Earley

be going efficient to for ratio if those year so just We quarter. the It’s not to the all Well, XX% – spend that, XX%. like XXXX. that’s going even marketing we’re discretionary go down, efficiency again, think, really I highest I the with with was hiring and things for under mean, travel, ended XXXX – under

brought expenses the these to organic of for not be on – that’s all that but year; very to we’re of ratio. Some better – song, key the six to a hoping will We it’s know people full-year that going crazy. be to too. all going we a variable – year hoping generating have be last months sensitive up efficiency it’s we’re the to going costs I incentive But steady that mean, we’re and capital. and in up it’ll next so the

Gary Tenner

Thank you.

Terry Earley

Gary. Thanks,

Malcolm Holland

Gary. Thanks,

Operator

further showing conference the back at like Ms. turn to would to this questions I’m time. I Susan no Caudle.

Malcolm Holland

Holland. This have you’ll everybody great Thanks, and is Malcolm a day.

Operator

today’s concludes participating. and Ladies conference this Thank you call. gentlemen, for

disconnect. now may You

Veritex (VBTX) 27 Jan 212020 Q4 Earnings call transcript