Origin Bancorp (OBK) 28 Jan 212020 Q4 Earnings call transcript

Company Profile

Participants

Chris Reigelman	executive
Drake Mills	executive
Martin Hall	executive
Jim Crotwell	executive
Stephen Brolly	executive
Matt Olney	analyst
Brady Gailey	analyst
Bradley Milsaps	analyst
Kevin Fitzsimmons	analyst
William Wallace IV	analyst

Call transcript

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Operator

Good day and welcome to the Origin Bancorp, Inc. Fourth Quarter and 2020 Full Year Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Chris Reigelman, Head of Investor Relations. Please go ahead.

Chris Reigelman

Good morning and thank you for joining us today. to press on afternoon, a our our that of will measures. earnings which copy slide financial slide our refer non-GAAP forward-looking we available presentation. Please statements our is website, refer statements presentation, issued which release X safe a yesterday of presentation to includes We Slide this harbor of regarding during along use with and

presentation note website that the this note, Risk safe For All Chairman, Drake those the Bancorp's call and at presentation may to safe today's and joined available Jim release. I'm address available we'll www.origin.bank. Please on CEO President Officer, phone, Brolly; be SEC are during Origin any also Chief by of release happy our the to our are joining Mills; Credit Moore. Origin Banking statements harbor slide our you President morning X our our our Officer, slide presentation, is CEO, harbor please yesterday. of Hall; Steve have. Officer, the Page in filed and Financial statements made subject questions by on Preston comments earnings with Chief and After Crotwell; Chief Lance and Bank, earnings our

call the Drake. over turn I'll Now you, to

Drake Mills

whilst foreshadowed our XXXX. Thank team shareholder value. Those our was time, On Chris, being spoke you, experienced and culture, what driving and at of cycles good to we in our mindful to changing, that our focused changes call this to those year last always morning. words the my people adapting business closing commitment comments on

The team. purposeful was quality we mentality has that is guides position as move year us strategic of in forward. be the not this what accidental. For the me, highlight of made challenges. been despite the successful the performance to a same put us decisions We've and This Origin past

and our has opportunities. We resiliency billion assets, is to in proud the proud billion $X.XX results full with of diluted employees for in company. take and financial the what an most quarter the adapt ended increase million an loans puts in and sustained have I'm to pandemic our on in Net per December to and focus $XX.X Being and committed in I'm the XXXX us XXXX, from of a of the during total our future year, all-time able and third of $X.X they total the communities. quarter for customers While $X.X us is million, of advantage deposits. being culture share, billion income the $X.X for the the of high which position quarter was $X.X earnings quarterly and serving

Our the basis, quarter net equivalent just interest our under for was tax X.XX% ratio on efficiency XX%. and was margin a

of of net $XX.X income we For the and year, diluted full $X.XX. had EPS million

preprovision up pretax $XXX.X XXXX. million, revenue Our XX% was over

Our efficiency improvement was an over year, XXXX. ratio was just under which XX% for the

Texas de Before we I that's XXXX turn gets market. downturn. in We the have economic novo to think want an I and in to experienced our that entered something I story, Origin to over in the speak it overlooked Texas success during Lance,

to was one time. market in grow strategy Our the relationship at a DFW

X the Now country. in largest markets have the presence of meaningful we growth in

and look our seasoned our with the in around bankers teams and of trust customers has at place Origin right of culture have strategy Our business. incredible having always think relationships, a we testament the and day. of to the the every way revolved doing I people loyalty earning today, the right I it's leadership When

our in presence also in have us XXXX. experienced on to our in We strategy allowing growth starting but the tremendous over not only last executed XX Houston years, DFW, increase

from while on both and in our capitalize XXXX Slide on experienced through infrastructure well compound exceeding XX% I As investment we to company. XXXX. annual Texas in our and franchise people on rates see our believe increasing continue has X, value growth positioned franchise you deposits are can the to loans for

Now I'll over Lance. to turn it

Martin Hall

on Thanks, Slide Drake. X. I'll start

through proactive, than about their X% our working at XXXX. pandemic, talked clients to we've high less to XX months the over support forbearance were our extremely bankers over last declined under have with a of of our XX, June down the needs. As December at X XX% than From more loans XX%

fourth processed process look requests as applications loans $XXX at We're second the and actively million PPP with under for the over efforts in over January quarter, round forgiveness XX% PPP the progress of of XX, our have As the funding. we funded on balances of which program. working is in forgiveness we to XXXX, customers

working first of during and trusted are our the we're the to I'll have was currently unwavering connecting people case innovative delivering extremely of clients. On round build loyalty bankers their Slide of PPP, our to support on in are dreams. X, some to the for out our combine power being customers. with As advisers statement to vision clearly proactive the that is highlight The things technology we by focused laid

our effects With with Origin's is we deliver and our combining to execute partners us it's solutions. online technology pandemic, personalized significant to and to experience proposition to changes to and proposition to believe appropriate our capacity mission the strategy in enable consumer the service deliver in around imperative rapid continue cost. execute efficiency the tech create high-touch and and to on value partner plan of customer behavior of and the our evolve mobile innovative COVID technology value

of customers delivery, technology significantly across in has our has grown see you mobile our deeper investment the XXXX. particularly can platform during As on which our the channels, slide, utilization our digital in allowed

better industry also You feature rates than mobile our see that adoption are can benchmarks.

trends, can mobile, manual have technology built will We using key also MX, around begin of overview identify experience. opportunities for deposit robotics to such use continue and to Slide in and as be PrecisionLender, focus analytics, to Workday eliminate data employee XX, improve better an This the trends behavior others consumer strategies a processes, ours opportunities digital the of to partners to and see you nCino, year. customer and XXXX. On

of an the Of were quarter noninterest-bearing of to increase QX $X.X decrease of increase, $X.X bottom fourth strategic of the decrease past costs, as been billion, over the for outstanding XX, XX our the deposits was basis an loan QX of over our have portfolio point deposits. you an ours in slide, from QX basis billion was has Slide that basis trend million average see we X deposit A show lower and cost Our $XXX XX points a XX last left In XXXX, and of job total year. On more from the quarters. focus XXXX. can point done than composition. loan XXXX our quarter bankers of the our deposits

and You our of in investment $XXX portfolio can mortgage grown warehouse held growth $X.X approximately PPP million by year, for of our loans million have billion growth in during loans. see primarily to due $XXX the

this what banking production. clients the our are capitalizing growing proven and mortgage led Our loan tremendous growth want categories in increase growth impressive expanding warehouse job on we new a effective will It again year of team the did has met X.X% bankers bankers of past to while has who of at the remain has staying great sound and through do. center have X conditions credit Relationship relationships, client a in in these on loan our a point during market to X.X% stable base needs and which as growth increase outside and was these year. I categories of we done our has out focused our of a significant, job and culture. that while

I'll turn to Now to Jim over sector credit take selected trends you through it our and updates.

Jim Crotwell

Thanks, Lance.

monitor previously could experience restaurants as industry sectors to hotels, nonessential a a past the have COVID of of specifically quarters, over we we the more protracted reported that and energy, living. assisted continue retail, result As the several sectors pandemic, those closely recovery

on these held particular down conducted ratings. of see total sectors we appropriateness $XXX economic investment. total the represented XX, downturn ensure Since risk focused for loans pandemic, can to and reviews sectors quarter you of impact As XX.X% the the the $XXX have million the Slide these the of in of third monitor to approximately beginning and of assigned million, from

with as and through XX, XX with the Lance in we our in pleased we information are the sector pleased portfolio. On nonperforming seeing by past provide loans are We are demonstrated balances loans. trends reduction dues, specific sectors, these Slides mentioned, stability our including and we these portfolio and COVID-related across on classified and levels the modifications sectors, of

as is with balance during expansion by of saw in one increase a of reductions sectors, which and of a the by strength retail, strong exception supported dues up of quarter. all $XX the sectors by Over evidenced million over guarantor million to actually from these tenant. supported of X.XX% loans the perspective continue year, well for relationships, driven which hold was increased and X.XX%, This of nonessential the by other $XXX classified the X.X% sectors existing the loans X combined. we credit past of These past nonperforming credit

portfolio of of of a held performance total monitor our at recap nonperforming I we've nice them to level stability. quality loans provides while are current remained out would demonstrate X.XX% experienced due loans, for we X.XX%. to we classified X.X%. a X.XX% the net trends, the of closely. Slide pleased were Past loans year-end, to XX/XX of again with PPP, decreasing continue While in as XXXX from point at sectors, PPP, net these like of XX of stable investment, which levels of that will asset at total loans ratio decrease our to

of loans, year. an portfolio. rate and quarter to for the net the of pleased we are Again, stability of resiliency X.XX% X.XX% PPP, the loan for at the and remained in charge-offs average Net quarter stable annualized our for

Lastly, loans. credit loans quarter for in of investment, of X.X% losses mortgage X.XX% for X.XX% we from held of PPP, in and to increased allowance the net investment loans held warehouse of to our prior

seen experienced COVID rise a while quarters, extent across and in several the While portfolio as months. previous have data, in stability noted the reserve, we our our increasing over country the above of some than surrounding we and in deployment improvement economic vaccine cases given prudent that next continued in the the to forecast lesser was uncertainty felt have recent the

impact to will to that continue turn now. reserve the feel the pandemic of monitor build over Steve behind it is us. I'll closely our We but

Stephen Brolly

held could our you XX, and see portfolio. Slide On loans yields, investment Jim. costs for Thanks,

of As offsetting quarter. continued Lance covered previously, to yields during loan cost declines the partially decline, deposits our in

as fixed trends. quarter. I'll continues approximately remain fourth to in net our $X.X at NIM was prior $XX.X profile was split Slide XX, interest the and income Net million to periods. On for income interest up which prior quarter Our through million, the XX%-XX% floating from walk

fourth the points quarter, XX X.XX%, in basis our net approximately related to of quarter. Slide Historically, $XX X shows income the typically net directly of XX% which revenue declined our was XX distribution. would subdebt income. In NIM interest XX% million XX% revenue points our be and Our to from fourth revenue noninterest generated about was income. basis net our noninterest issuance

noninterest to higher $XX.X percentages million $X.X levels. historical for lower revenue our than XXXX. On million the million our $X.X you in XXXX, We of Mortgage was XX, $XX.X mortgage fourth year for finished revenue quarter year. our noninterest Although expense Slide and the percentage income increasing in than trend was was with composition. higher of QX QX see million, which strong QX of of our

was expense QX higher XXXX. Our slightly just total noninterest than $XX.X million,

growth. to You expense see growth leverage operating our continues revenue that on slide improve can outpaces this as

technology previously, growth enhancements support will customers mentioned on this XXXX we to to focusing operating future us Lance enhance allow their serve leverage. further will As our in efficiently be to that

it Drake. Now I'll back turn to

Drake Mills

last to XXX The our in increased bank offering to holding right, capital the bottom On the We $XXX completed in addition total subdebt In the company. was our ratio subordinated offering Thanks, see total changes February Steve. which for and level raised subdebt October, total you we XXXX, the in million. trends by a our company. in which ratio at capital in basis the our XXXX XX, subdebt both show Slide capital brought the holding bank raised debt points.

an team an this through incredible time. we and year unprecedented out, pointed has successfully As had navigated

sheet to on back instead and company, loyalty think needed we unwavering for XXXX customers most. I how when pandemic, our bankers I will were As We think communities of thinking about and this our about the and fee our showed strengthen increases million record and of from warehouse production income balance capital lot significant a volumes year-over-year, $XXX to much revenue, more. mortgage accomplished in record balances, raising further so our mortgage

I our look while our communities call in it's efficiency, now our and organic and open up I shareholder will the to questions. for you, customers, to accomplish Now focus time shareholders, forward we'll managing on capital enhance am continuing value our strong we employees, thankful to growth. to what and XXXX. Thank

Operator

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

Matt Olney

this I still which Charge-offs went we guys would credit. you room I see strong. X% for respect curious XXXX on out allowance are thinking nonaccruals Great. and and trends well expense year. contained, give look want The about down, you once above guys the provision I'm guess and surprises about you how charge-offs. PPP, start with to were XQ back any levels to are

the think lines around I for you and up expectations. forecast charge-offs. that provision consensus curious with your see $XX both with are I'm assuming million today, what how

Drake Mills

we and a will unknown. traditionally of the up we not Matt, been XXXX at remind have to Yes. I'm up, to through the very it things that going decided aggressive point, some second. Proud for you we would that to had this go I but and for worked pandemic back clean where ended get

So as a very look got about I today, some and how XXXX, how there's administration. I position. I But just for unknown new an mean felt feel we've through I feel we're of still think in unbelievable I us. March in -- you XXXX I think

and of We factors process. the that conservative be make want a you in to pause have number

difficult said, a it So I here. as net of think would an the -- increase from just trying mean here I if very perspective, of sit XXXX But to from okay, XXXX maybe vague I'm be say. be today. not we're believe what I based see clarity XXXX. and it's are, difficult where because we I It's is on around somewhere lack this pausing to of I'm I seeing charge-off

have portfolio. at migration, look look time. I energy a our that we've portfolio -- the I Our you feel you in quality I the is When about around than sure today don't pike from mean long so I'm much a better I'm going done pandemic. it when at sectors be in and able we losses. position whatever to to to to But that pandemic-impacted, just the see be comes extremely again, make were XXXX, through them, going conservative manage to this work we're

difficult say. it's to So

you're and I things go. expectations line see this with how we'll think at point, in

Matt Olney

Any remarks, over the provide? do I and the color more to expenses. year, I you carefully you we'll Perfect. about switching also XXXX fourth Okay. quarter what technology. type then think expenses And think of in prepared from managing can guess, Lance And operating the this you In the but growth year? talked see investing ultimately, of throughout

Drake Mills

Yes.

about But -- We have, I from think think, today on was little tremendous robotics strategies right now. savings. Lance dollars and focusing number and perspective. were group, that's cost his to create in long-haul to talking team everything Lance turn bit the long-haul the this a things. that from business going in from key to We're perspective, technology of utilizing we're And dollars every a that the technology committed we stated. around things reinvesting technology is I around this, are a doing

quarter, and that as our we the expense believe -- yesterday, talked up so an in open this But office accounts heavily well have not instance, have City we expense flat you're present X,XXX that the it, is that we profile on point office today, part, see us doing doing, about, this -- even technology, a fourth in at going Medical we're for for new based we we're we things opened in point, employees to Houston. to as So XXXX. accounts, for in a investing an at many

Operator

Brady Gailey question with Our comes from KBW. next

Brady Gailey

but go balances to warehouse balances period-end the average pretty know flat, pretty up the were I nicely. So continue

How a the have just down a slow taking big at then limit had it great Maybe I 'XX. could is naturally, of I the are mortgage market loans. thing there. now for that, looking loans the about still get? outlook mean number. how what's warehouse -- of success feels is like guys this bit, is head XX% big average know share. you to but XX% little average that the all going as of on market a And lot you total that balances, talk think I we into

Drake Mills

of warehouse XXXX. We coming it's will by But going it planning the might where number. to you believe this. sure shooting think we outstanding. we're Well, XX% we taking end the as still to mortgage on that to today. mean We want that that exactly In are I clients. in a X% believe, XX% big a about projections X%, runs normalized make project it's based do if and it as we're run where look out -- you be, of around mortgage that XX% to get, to I it's it's environment, we fall, and on

warehouse. Now and be able think fortunate key to build over XX%, that being able but to the these we've slightly at we're dislocation, attract is investment take them market some to mortgage thoughts to take be on been and to personal relationships. advantage else. read significant strategy, I relationships, able running being our do I turn the mind a and client some to this I cyclical everything the what the business But side. don't both and is and around of of very acquisitions And to that's

deposits able out being driving some we're are relationships this. So of that really these get to noninterest-bearing

run again, that's So it more to us And XX%. stay. business much not -- a going we're I'm for going than it's not to

Brady Gailey

for appetite buybacks hard, makes pretty the Why makes about buyback maybe quarter? the any stock buybacks around mean Okay. in in surprised is repurchases then M&A little easy. did to in the see fourth your not I tangible. All pretty fourth I we still Xx share your game the cheap right. it quarter. game a bank talk at not And I see but Or mean XXXX. was that

Drake Mills

the reasons first suspect you off I some we'll Yes. -- right. in in we didn't the that and But you're activity quarter technical No, fourth quarter. see get I exactly think some

our at you of end bill levels, activity. we TCE If year, at like previously the especially our the look will and what some you'll looked total see capital -- capital XXXX our

Brady Gailey

I talked kind All about in right. loan of finally past, have me. the from to know then you guys And low- mid-single-digit growth.

I ex this read all and out quarter. think X% quarter, you last the you warehouse X% about PPP, if

like seems think way XXXX? in So it right there. of the that to Is right you're about growth loan still kind

Drake Mills

relationships to up. that strategy loan our -- We're really yields Yes. XXXX to on is bring focus the we for and

here piece relationships, important an the relationships. think to and loan on bring I that about these We're significant able expand yields. wall not on just we it's is when have returns

at If we process our XXXX look pricing And criteria, that there, we you at this growth significantly that's mid-single-digit year. and mortgage underwriting that's have flowing the strategy that point. criteria -- again, and the on revenue in in back see our about during

Operator

question next Sandler. from Brad with Our comes Piper Milsaps

Bradley Milsaps

I Brady's up follow just to question regarding wanted warehouse. on the

million $XXX I think you out thought it million. But settle you last quarter between $XXX picked curious just and up more even said if might you'd clients. that

alluded think mind, fourth higher what you that, bit, quarter. I than you talked quarter bit in still little of adding your it to in might kind the folks little a run you're it make a maybe about last

Drake Mills

We up. have picked

I went year the -- think a couple in we to the XX of in now more the XX, queue. we're beginning from

and million that, so warehouse pipelines outstanding close are and been at our Our their at surprised that's on at end market-wide. year. January folks showing and we've of And mortgage the $XXX $XXX the end to projections million

million is run good pretty number could that so that think a higher, but number. still slightly $XXX And I

Bradley Milsaps

are of of year. those sort helpful. what And just and on coming kind NIM loans away kind through move warehouse new the on, for of means you PPP, and outlook in putting your that then that That's of books from rates terms you're where curious the Great. as the

Drake Mills

a XXXX. I with been it a over Lance. into to I'm work has And Steve strategy and turn going said, to Yes. as around outlook of And Chase lot going of pricing. NIM and doing that's, ours Lance?

Martin Hall

side a we us, In is market. stabilizing. pipeline Drake. you tell Steve for Thanks, rates mean mid- Great. more in confident depends us, have rates, NIM would it able a loan are 'XX, where get Louisiana, fortunate, some think, the compression to really points for few that on still Texas continue have the we to actually we're we're that Xs. yield will that. perspective, to lower on we I nice high QX we'll some I that for and a going as even mix very compression. a been clearly, in see and the think actively refinances very but see coupon the rate, From that But we've bit for We're But little Yes. stable. year of working Xs. throughout offset to very, we're basis the rates QX, seen has to deposit

optimistic So it. very about

Bradley Milsaps

your Great. forgiveness. And of of it follow-up just seen correct, to guys? were those flat forgiveness your fairly me. quarter. that by sense just you're If linked of through a just as have off loans and those yet? from you about thinking a final from are Is PPP more you design numbers decline like a looks peers recognizing many my Many running process maybe gotten haven't that get how trying remaining Or fees. Just of kind with

Drake Mills

of Yes. sort nCino automation think coming. our it's platform. through I just That's the

I next would we the days process. the a part may forgiveness just in and on see XX the that say side -- of here so lot that So of

Operator

from next with Davidson. Kevin D.A. Our Fitzsimmons comes question

Kevin Fitzsimmons

opportunities. more curious stock, be a What that in the you're sellers lookout of a on about activity, but little you easier and merger on see more you've little obviously, in terms conversation front. that's front? acquisition if candidate. talked just the observations past, it'd in that the viewing what the year or sensing past the more wanting so, going industry activity had the less on. as there's starting to your been candidate, from And in over you're or to -- on would-be are -- what for Drake, right We're Obviously, currency

Drake Mills

going to have opportunity to to as partnerships one build do. -- a ignoring seem we're continue to about in we're to about relationships. valuation what determine to the story, of think is continue popping position continue really drives really And focus as that there these that we this up, growth. at Suddenly, point And are more going growth strong organic talk to and and we they building a our partner they're Yes. that office on we're my because -- I'm organic opportunities build relationships to be to the strategies

to a organic from And but capital work growth And I active an to able see so we to standpoint, do are bankers that put going relationships be our discussions. think to you have think be folks different but we've will in and productive number at hopefully, talked be us do handful -- we lookout, a of on we some the keep to will to and of ongoing that point. discussions hopefully

Kevin Fitzsimmons

in back-ended you for loaded did evenly? Great. thinking. are see forgiveness recognized. about will of more what banks only it you And slide be saying but round about -- XX% the to round over process how number think just -- are X? Is part, second it to the guys in what know quarter? And curious tough demand out of PPP on neighborhood be for most the takes place this PPP, is maybe of this, guys give XX% are would to are I or the in Or being separately, remaining guys that fees something I'm round one. into X the you feeling you do then it they A deck there reasonable I you quarters, did X the of it's project assume next the course

Drake Mills

Yes.

is on and depend to the less loans. of forgiveness the $XXX,XXX Some going

for a up of going we give would the we our would that on $X the million. that XX% clients little because But think we're the it the not what our in I that of bankers $XX around huge -- X. a the I'm interesting. doing that think QX. We're XX% first better were take round, demand that on first we probably time notes, -- it. We're it number little of us. to balances, are were say you're -- which didn't the -- second Surprisingly, time seeing a not I forgiveness the than success But that are round as different capped notes seeing was versus PPP -- at probably were number the did are supporting that to second of round. for was for first a you're obviously, going balances million about the say So clients

I Our manual themselves That process. so bank again, well. think for a that's will win got community nCino. it We've bankers through be worked a our is automated bit a focused, size process with again. a going And nice this now

Kevin Fitzsimmons

Okay. Great. And news. the one is margin, good last PPP subject one, on of and the

do that liquidity? all you You're liquidity Or on the getting accelerated portfolio you just taking be Do -- another from from of margin a the theoretically slug take securities accretion. excess to excess fee the in you'll guys coming Bad willingness SBA. you PPP that? the news, or build get -- you little will expect have opportunity with temporary hit the core

Drake Mills

is to use management sheet strategy funding through -- standpoint balance is our been to from -- a low-cost this think has temporarily. I

had I from we the able core wholesale been year, to a over deposits standpoint. we tell, in done what you've interest-bearing a growth in mean, excuse deposits, almost me, above As XX% and have

then billion $X would borrowings call? [Technical a the we with with connected that. are at certainly our bit we think of Difficulty] investment portfolio, liquidity, little you'll remain of I still flat. Are if see Because there, that reduce to with to we much start type influx we that So our see pretty where

Operator

the conference we're Looks is announce I the experiencing this can technical me, operator. difficulties. like next questioner. Pardon some

William James. Next from Raymond one is Wallace

William Wallace IV

right, you say you your heard the of be to I with yield Drake, make loan growth said thoughts -- on it focus sure clarification, point just mid-single one would did digits.

the you You You you? don't whole similar, can do said grow something warehouse portfolio about warehouse. mid-single ex warehouse, think down coming right? with That's

Drake Mills

warehouse. ex That's

William Wallace IV

what That's right. All Okay. I figured.

to story and is the the how Texas are in bit the In markets. if I'm you little talk modeling past, profitable maybe about questions that All missed today. of bigger-picture, In markets. have attractiveness those strategic-type a expansion of the you've my a you might one just that markets remarks, feel of about the those be question. part could kind talked your of ask prepared wondering been those you mentioned wanted I of answered. profitability

If operations around other at think grow have term, profitability? And to lower Louisiana expansion expand? about having profitability the point then you medium or to term. profitability that's so annualized plus over even over In cost your where how a whatever continue additive to medium an you the franchise to that means markets? picture can want kind in of think for transfer you the cost kind of at there Just rate you words, leverage the the XX% do continue Texas Origin does what to bigger of about

Drake Mills

Yes.

us, to I at the markets. look profitability we have is in core -- For where core mean,

that significant migration. XX You're feel pre think running a was for million to Houston, was we that say about through which in are. That from to X XXXX very with from it We've at a significant that did pre because $XX process. XX, of in in up And $XXX big of at was at in strategic I -- point energy But is piece good Houston. we We move basically pre-ROA. it little our back X I sitting a what a energy build XX here bit opportunity. pre, XXXX. we this profitability would a we're energy, -- X backed for up and went went $XX us, million million where But

pre. as So of with opportunity at X kind X And up. see significant we right strategy-wise, whole we're looking to now a it pre, XX ramp at XX, Texas there

deposit to growth, talk plans real new in we We loan is I had Texas similar what growth. $X.X story as XXXX, at to really to XX% We fees. XX% the production. second Louisiana. But in for in continue push do loan because up in look about deposit $XXX loan to growth, to in million have to just -- million look is a Texas it But for us want that

we'll granularity have to but fortunately, have have we to We go. And from especially the in right teams, where that's X, teams, place. So right the from certainly mid-level a we're standpoint. see really opportunities it some mean, starting push to a to of -- upper standpoint. to XX are to we be where profitability the able from us, infrastructure I continue look at we that X And buildup today for

bullish story be and I'm So is a Texas, Texas overall. this starting on really to

William Wallace IV

that look elevated recovery, and it common do organization we by not be feel you're we assume return economic you're looking a of covered of profitability an do point Do reserve. and still can't tangible having where and charge-offs now the leg you what Or on have to -- a at at point equation? see the to perhaps drive of final that at the you return up let's overall you transition to a start see expand on surpass at and we that that equity investment maybe group if a we're we at peer from and could really kind So have of might perspective, banks? needed think expand

Drake Mills

investment. need not do We

have for everything XXXX driving place. a on strategically in efficiency. We is us focus

teams have a number around -- it's it's loan right where absolutely. we And and of but were way. yields capacity. the unfortunately, are But us, different we is this For got our tremendous today. where things, in I thought in What -- pandemic XXXX

able then the support, an with rate since few be We to we're the have have that some unbelievable to pretty if continue going quickly. we add growth support grow. a we maybe have -- We're there to get of 'XX, the in And the credit we exception position can to folks. infrastructure, of

William Wallace IV

ROE and you efficiency tell from or can looks what perspective? us And like an that an perspective ROA

Drake Mills

us I that in have fee, end a a a by should that. But be an to to of put we're that's I don't us difficult can and of conservative, we on say think of through losses. XXXX. a end impacting And today. to see look we period can mid-XXs PPP uber where and efficiency, a from where factors piling back are I ROA us from to But efficiency, teams the we we those XX% significant in of ROE, the your that talking I overall end impact and -- that I a we get what here. at of successful are some it the his answer -- position to don't of some being you where drive to of time see are and are -- could. think to didn't at certainly, got hole. we an to XXXX And really facing on question, good XXXX say going we certainly this, this But Texas us pretty into are here going we And get some that from say today, focused right the there but see think should the pandemic a especially similar if perspective, some to with the to Lance about can but... do which we going to and little unknowns through some from XXXX. away, have start work I But number into perspective, that we be have today. we're when growth are would ramp-up we we they things a XXXX Well, I mean, have go from not in -- we still are potential know try we're

William Wallace IV

that That's helpful. we forward in than I hopefully appreciate come That's and helpful. look bigger-picture No. Drake. we've helps. to losses kind That of you, all expected. Thank seeing lower commentary,

Drake Mills

Yes. we today. feel hope That's so. And what I

Operator

Our question Olney Matt from Instructions] follow-up next Stephens. with [Operator a is

Matt Olney

typically dig on fees I the mortgage into more to and want front.

the lot And mortgage think originations, see Q? to fees I gain I'm to quarter. origination would for the that I were in can the sale goes looking, in hedge. MSR, a we into $X.X from fourth on the specifically that provide I the million. you details the guess, number Any know

think number million. I the last comparable around was quarter $X.X

Stephen Brolly

QX. sale Yes. $X.X number was on for comparable million Matt, the gain

Matt Olney

Perfect.

to Okay. takes the and guess, puts kind around the and the then margin back circling I discussion there. of And

deposit on down. side, to think I mentioned there's bring the still room that that you

I interest few of around where finish now down once kind over basis I'm points deposits think we're quarters. curious right land kind bearing. that the repricing the you at on XX ultimately could next of the road think you

Drake Mills

in quarter, after fourth off the next the with be CDs coming think quarters, XXs. the definitely mid-XXs. low will And the we So few it it could in be

Matt Olney

it Perfect. guess, that, that on deposit some the pressure margin some there's like because yields. there the on the commentary on But with the margin, pressure bring of to there's the core still I loan room the on just get down even that feels side. right? Okay. clarify Did And to I Steve,

Stephen Brolly

That's correct.

and on more to our the possibly only that's points or per compression little the we conservative, say be loan have Deposits quarter. quarter, Hopefully, get could part. if can than at we But based X yields basis And on keep to hopefully, to -- -- go have, competition. bit X have if it. we basis that's a XX. We you're -- flat. going down goal can, yields, definitely to each sustain only deposits. are is pressure low more X Loan it But to could we're down points XX, X you could you

Operator

our Mills question-and-answer the like turn to session. closing Drake I This concludes to conference back would for any over remarks.

Drake Mills

you thank much is opportunity. time this that very franchise you and for I'll Well, that upside. significant the tell a has

Capital, Liquidity capital sheet very place. We we XXXX. have have the balance our through real position strengthened. ourselves perspective. What upside an balance significantly really from think we sheet strong in where buildup in is earnings a a see think some been will as is normalizes I I put has

investment, continue overall, partnership to appreciate your drive We value. I significant shareholder support. and your your interest, will your

call, So your the for you thank and you thank time. for

Operator

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

You now may disconnect.

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