Origin Bancorp (OBK) 30 Oct 212021 Q3 Earnings call transcript

Company Profile

Participants

Chris Reigelman	Head of Investor Relations
Drake Mills	Chairman, President and Chief Executive Officer
Lance Hall	President and Chief Executive Officer of Origin Bank
Jim Crotwell	Chief Risk Officer
Stephen Brolly	Chief Financial Officer
Matt Olney	Stephens Inc.
Brady Gailey	Keefe, Bruyette, & Woods, Inc.
Bradley Milsaps	Piper Sandler & Co.
Kevin Fitzsimmons	D.A. Davidson & Co.

Call transcript

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Operator

Good day, and welcome to the Origin Bancorp, Inc.

Third Quarter Earnings Conference Call. Today, all participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that today’s event is being recorded. would Head turn of I to conference time, Reigelman, Chris Investor this like the to over At Relations. Please go ahead.

Chris Reigelman

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

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

yours, the Drake. is Now call

Drake Mills

the forward. million. a Diluted we income are how was as income quarter Texas, and in our was earnings our the our Mississippi, prospects for Louisiana $XX.X million. Throughout I'm for Net was and economic to interest morning. with customers share per good highly $XX.X million are pleased non-interest bankers net $XX.X and quarter company. move and engaged we over be growth with $X.XX continue Chris, the and positive you, with performance Thank driving very income and outlook for our positioned

with quarter. credit for of non-interest million was $X.X XX.X%. PPP expense released ratio the excluding and our I'm growth, the loan warehouse. showed X% growth mortgage $XX.X efficiency we proud this We annualized reserves in Our over quarter was and of million our portfolio

focus evident as Our in to core non-interest-bearing third continued deposits X.X% has quarter. relationships on grew be deposit

We get we spend little want company. creating about as strategy a long-term talking time but numbers, the to the I and deeper are will into value a

reflect I and extremely and evident I As company performance been in with key the our our been year. where our has growth we our key team past that this areas on focused has are remained am strategically, one of has over of focus, Texas of pleased market. the Organic areas on the

show we of each leverage quarter, As on areas we in are largest experiencing operating fastest two our continues slide our and mature the growing positive deck the country. market Texas to in

creates enjoyed lift-outs tremendous Our success Houston to in growth. and strong the and strategy we've with organic expansion opportunity continue DFW

Another for key quality. credit particularly out of area pandemic coming been focus us has of the

we get profile the will presentation, strengthen. to our As into continues in later credit

profile on of of our a and position We efforts of take and relationships. been focal Coupled the puts expanding strong risk strong our in Efficient have surrounding with selection key knowing growth has to our purposeful our client maintained focus point our organization. customers management, opportunities. in company us been advantage

very we to for the drive Our performer data continue elite and decisions. company results of strategy us invest use strategic quarter. and financial drives proud in to be as this am create an technology our to efficiency, I

I'll to Now, turn Lance. over it

Lance Hall

Drake. Thanks,

our of for company. our As in driving bankers clients value relationship-focused the results mentioned and our to proactive providing highly earlier, been have process

beginning to increase This in enhance actionable website program since loans had million want discussed of move specializing a continue million technology efficiency, value. client and provides businesses mobile-based their where the satisfaction Each our process. clients artificial to conveniently to with attention third intelligence the will bankers us scores, with just improve partnership end our pleased more I services quarter, process. also clients At forgiveness of and experience company quarter, in connecting promoter net an PPP growth get and that We've browsing personalize to I'll focus deposit rollout to for the conversations in the the new collected manual our our another third the our customer I'm over the of forgiven a to your products the new and how will this to better will details more X% with track of net provide into through customer in data, clients our with with technology on in our point our the enhance very $XX.X space quarter. processes fees $X.X create Before Slide behaviors. about the This based value website XX XX, profile. of deposit the very origin.bank and talks Slide throughout engage utilizes of PPP. of the they touch update fees Podium, a do create the with loans journey and clients, long-term of It our understanding and allow I for to that proud provided quarter, we investments the eliminate PPP in and loan meaningful outstanding. interactions. of the enhanced we and plans. experience their was on through I over within I excited XX% on I'm draw automation attributes presentation.

on have been As relationships. Drake driving core mentioned bankers extremely deposit focused earlier, our

total $XXX I'm of continued value deposits. total future to drive of deposits quarter, which with opportunity XX.X% in the Our for for growth a average how This grew priority average us, to Reducing represents stay company. been and significant deposits and our creates pleased now has we've million our focused. non-interest-bearing cost

to committed additional and remain year, the our we opportunities. deposits total declined finding past has Over cost of XX%

over excluding PPP earlier, growth, loan very mentioned Drake and the quarter positive with warehouse. annual mortgage third we As saw X% in growth

production were fees XXXX up New XXXX nine same through of year-over-year. loan up is the period the and XX% XX% to loan months first compared in

strong seeing growth and encouraged XXXX. we what Dallas owner-occupied the our commercial be up are and owner-occupied quarter to and throughout and with across hearing them new increases North we are off ramp real development I for quarter from Louisiana The to we excluding mentioned our commercial last estate the continue We to and and pipelines C&I clients. by Houston, see PPP. quarter more great fourth into are start hires a expect in

what our any was On quarter discussed for the balances in expectations which quarter. million, we last the and $XXX warehouse is front, line mortgage with

have look to about into quarter, in finish our how able were As the what the at bankers and will I third momentum we we accomplish year XXXX. I'm going the optimistic

We teams advantage areas capitalize we of dislocation take in the right that And place have opportunities. as always, on. of on the focus we can to to continue

it credit turn go through to Jim I'll Now, quality over to metrics. our

Jim Crotwell

Thanks, Lance.

to be continue We of in extremely quality loan pleased performance the credit our portfolio. with

loans, to we As and levels reduced PPP loans of X.XX% reduced also and for net of X.XX% of net quarter. charge-off experienced PPP loans quarter on stable of million classified loans X.XX% for loans, loans of Classified investment Slide X.XX% $X loans PPP reduced reflected average while annualized. remain totaled at net non-performing loans dues, to past non-performing net XX, the reduced Past while during due held loans. the

on mortgage previous is represents million, on credit PPP banking, direct $X mentioned calls, forecasted has our loan Based credit improving focus which and $XX.X loan economic on million of result a metrics and to our investment well-diversified portfolio of of As and resiliency delivered for by conditions, which a reduced our relationship X.XX% X.XX% the loans. warehouse portfolio. losses allowance loans held for of net continued

the continued labor chain the of disruptions as We impact as the to previously, well portfolio. COVID. we continue Steve. we and I'll are turn our have pleased to loan economic particularly supply extremely pressures and it performance closely monitor of of now forecast, resiliency over shared Again, impact inflation, with as

Stephen Brolly

Thanks, Jim.

for mortgage of the trended investments normalized more loans held of loan has a mix total lines, loans stabilized. portfolio has yield With and our a the towards PPP historic warehouse on forgiveness level and

For loan PPP We quarters, were X%. cost X of our loans funds yields total the decreased our basis quarter. this last three without approximately point

indicated cost we focus The XXXX. they of and hikes. CDs that non-maturity when see reprice this to XX FOMC interest our plot signaled later deposit of nine are continued the and hike total cost the overall XX, believe On accounts. bond fixed composition. that has as our variable prepared we taper a rate purchases deposits the reducing future expect higher to can lower, in members continue quarter, dot cost In FOMC's forward, reduce you September, a their rate our Going loan assign of Slide

beneficial can and for net on income large five left and Slide shows The forgiveness the quarter you quarter that one with loans our and bank As see graph NIM had floating, interest our our shows increased rates income trends. be XX% approximately that interest trends an the of will impact sensitive recent loan NIM. of XX income NIM quarter both PPP on two and of asset Origin. and

our income portfolio in decrease areas the able in to portfolio. the from warehouse mortgage heightened growth offset interest within recent anticipated, for As normalized other activity. were has We

$XX.X Excluding PPP income and quarter-over-quarter. net mortgage million our $XX.X to increased from warehouse, interest million

our of to off revenue our top liquidity quarter normal The part income revenue with is majority The our graph negative latter security refinance more Similar historic quarter, should at of our Slide four. QX the IPO that the excess $X.X Excess revenues XX, to in of level. the impact. NIM net the the Mortgage quarterly investment quarter the income our changes non-interest QX NIM balances details As shows interest shows growth a and we headwind banking bottom largest cash net of total purchases since of loan in latter believe the in over increases XX mortgage production and liquidity our occurred to bottom our boom. net of the the growth, contributing our stabilized QX. less growth coming graph be and our continue of graph The distribution. XXXX our to were nationwide our of a during that million. majority lines. will loan XXXX part September improve

income, IPO. fee During from five other XXXX. fair was non-interest represents income approximately to our an of $XXX,XXX increase million reported $X.X the our and In swap of fees XQ value XQ quarterly LP $XXX,XXX average this income increase of in The or $XXX,XXX million higher which two of increases XXXX this $X.X our over we've investments. majority in reported of LP we since was quarter, due swap income quarter than $XXX,XXX,

which our XX, increased as quarters these we Over the largest six expense we $XXX,XXX in are We average prior quarters, non-interest the beginning was a of be in year. increase $XX with deductible million quarter, variance has for required one-time the XQ $X related million, XXXX. income a funds to to the Slide line the termination coverage. expense that million paid $X was was to last compared $XX.X The quarterly million expected to while last that approaching procedure medical for non-interest of XQ averaged stop-loss costs have self-insurance per XX to to expected large our analysis. the range total reported million $XX

to We to efficiencies on graph efficiency ratio and leverage support our bottom continue operating quarterly loan trends. represents growth and our focus

Now, to I'll over it turn Drake.

Drake Mills

strategic strong. quarters, the we great have Through level high putting year a executed on Thanks, us three finish in our first to Steve. a position the goals,

Lincoln expenses These opportunistic which to XXXX. components M&A. announce us building to approximately acquire we an on Origin and our Combined agreement Our in reducing we of the assigned have partnerships to that organic in allowing position strategic operating that quarter my income. I'm pleased while our capital comments agencies, that continue while last will Agency, to mentioned the increase to insurance closing through very we XX% insurance of purchase a take supports working XX% been were revenues partnerships strong ownership remaining acquisition. other I non-interest approach to will growth current continue agency. full key gives with building be by in

I'm that were excited into As the in position we we XXXX. close, about say will I moving

fuel best flat nation, structure the growth enjoy to in and We've leverage allowing We experience. markets dynamic customer created market core enhancing and DFW low while the technology to growth we Houston. the deposits a in the stable cost growth our expense markets in team are while rule

expansion market presence lift-out strategy asset are our build value to based positioned continue through we sensitive future We margin and well our and on for profile.

continue system. business, from mortgage the improve remove for throughout warehouse the on And balance you on we noise and the on you from to the enhanced drive core it business, yields, and we'll our that's bullish loan interest FX you statements origination net questions. and manage industry of across right the are Thank open organic expenses own today the the sheets for look mortgage If ability income. being fundamentals liquidity effectively bank's excess loan the growth, income to call very have PPP, our at up

Operator

We Today’s from Instructions] will question-and-answer first now begin question [Operator proceed. with the Stephens. Matt session. Olney Please comes

Matt Olney

Thanks. Good morning, guys.

Drake Mills

Good morning, Matt.

Matt Olney

something weighted there quarter growth, in towards a any or third change start the in the growth else? the read is to appreciate more and Just mean, there off trying confidence the the or growth I in more anything towards coincidence in it Is there if was like September? you loan rates being I should on it borrowers? based utilization just the weighted was saw inflection want end to that into quarter of quarter. we timing of sounds

Lance Hall

of Good going big to if you here the the coincidence. very was of into end. the was was at almost in come that it in Louisiana which the quarter This split And C&I book client business. two Hey, we we and really in day of North really Matt. ours No, Lance. Actually, it, booked then first strangely or Yes. really a nice nice beginning timber the is thought the business had production. look quarter was morning. it a from of We QX,

I even the I in think write-up. commented

And million, really growth through then up nine that growth middle out some over lines nice of If one that $XX year the you saw the about year. piece of at some kind was we I hid mean, new the pushed first last which look this and living and we we've we're then booked, end. XX% assisted months of loans in quarter

bit quirkiness So a and it timing. of just really was little

Matt Olney

outlook more for about some the Okay. you and recent And single-digit any your investments talked hires? I of your thoughts of then think growth. still fair that once pipelines here? Thanks high Is think for that about loan loan Lance. on you've that, a some and footprint new

Lance Hall

really on banking. between out obviously, our kind Texas private that talked spread all have feel announce new the folks almost quarter. next about two as hires, markets production Yes. positive commercial banking quarter we'll really where we We of seven We'll last in bank the the focused market. we've talked really Woodlands. has One banker, strong from have another being competitor, individual in a hired the we Woodlands private Coming another Her we the in that one that strong really big production probably for most Houston, about, been us. and

to The this QX and see really just we ramp then so that Loan as in in other starting good year. starting it's into year. is next up, pipeline six production as been rolling and QX are QX

but we looks And little QX comparable so I would QX, it'll stronger. say, like, I what what to thinking think be did in probably through a bit

Matt Olney

pushed And Lance, out you you mentioned, loans. another

terms of size like Sounds cleanup. was pretty in decent credit it

I something think this earlier year last started that year. doing was and you

that on point. Thanks. cleanup we on process update where are Just credit this to at

Lance Hall

high beginning growth. we the through the cleanup. some were that really foresee it, again, when year, we about to have I of And opportunity strong do At of we And talked single-digit with the would a we wanting didn't this client real thinking treasury management talk We to our proposition us. in kind partners, selection interested to about strong that of be about are to clients way. our deposited want big talk have find value ability the in Yes.

was were two million took market our And the to sort top to we one the And of assisted another $XX from portfolio. we did been that million we the that telling shrink in so living do wanting area opportunity that of living. we've $XX assisted on years what one in now was around for QX,

So message we've with delivering. been consistent the that's

awesome has portfolio. to of selection our to year really, this ability because for same hold an ability again, the have So our on to growth, both us right, our credit been opportunity our cleanup yield then to at and ability drive time really client the

it. awesome feel I So about

Matt Olney

switching to Lance. color, fees, pretty mortgage banking the for guess Thanks then gears sequentially. Okay. I flat And the over

banking quarter, that quarter you Any outlook any in on a provide? think Thanks. guys. second win kind third mortgage we talked I the mark and color you the about against can of

Stephen Brolly

this pipeline $X think two decrease And mark-to-market did $X.XXX And reasons; our our a volume related the did also really was referring Matt, that mark bit. quarter to we little million. in as on a you’re a to the basis have That million and whole on sale industry gain decrease was that I Steve. is hedge. XQ, in is that's the this on

Going we negative forward quarter, positive. that's into either be really or fourth going think the slightly to a

that million – we $X quarter. quarter So in up in fourth to third that the the we had hope pick

Drake Mills

want for Matt. written And part also of This is a question Southwest is the I've the to fared seen market at I Louisiana important your that's Hey, first about to production. something is times against heavily we think of couple this current peers, that towards really our that, respond our understand to I point. Drake. as footprint and the production and Mississippi weighted

at think look so and Louisiana Southwestern like So take Southeastern I and $X look top peers you that more if our members as our million in club lot maybe peers, you Mississippi. for versus five the a we

I impact out at are couple a had volumes, of to big other certainly towards significantly we're in I in looking profile the the change recruiting Houston. the remind some we on Warrie moving an production that that time Russ you and issue are when pipeline making that I that mortgage significant are it think and I with where deal Birdwell, is going on Now, strong changing progress just and recruiting of pipeline our Chase size. progress making this MLOs, want the more slanted of DFW call stabilization and Southwest. quarters. hand, only production we MLOs would and Carmen we'll right to Jordan But and some, not next on on production But see but volumes, forward think we start now hedge

Matt Olney

That's good Drake. commentary, Okay. Thanks that. for

margins saw can Just quarter lastly what you on as the third for as and Gain within color mortgage sale outlook here? provide you far business, the me. in any from

Stephen Brolly

The second there's this. to to And ways gain look at a did on quarter couple third the different margin sale of decrease from quarter.

So commissions and made bank, look number you they if one net we at out. another say

of And And of purchase. and it also roughly next XX%. quarter. so have forecast, refinance going mixture actually And because down the generally went in rate up our between partly move it that's we and the

it's going the actually quarter, think quarter, And we the forward, and to look going spot-on we last So going we have the also almost gain on sale. to increase. production down and value we’re when third production, it both our with did

pretty the to quarter. picking in that confident I'm So be we're fourth going some up

Matt Olney

for me. back Thank in all you. That's guys. Okay, queue. I'll the hop

Drake Mills

Matt. you, Thank

Operator

The KBW. Please next from Gailey Brady with question proceed. comes

Brady Gailey

Thanks. morning, Hey. guys. Good

Drake Mills

Good morning, Brady.

Brady Gailey

for Maybe million rest you if accounting the for talk picking us of look year. a you could you've doing $XX been some guys the – agency. the through I know if up insurance, of insurance just impacts you around the in

incremental of up sort about that the So tangible impact this and the any maybe incremental expense picking talk and from revenue acquisition you're book value?

Drake Mills

Yes.

insurance I think and will correct. million. and us take Brady, numbers sure total think, from annually But addition to this I back I go have thought make with this I around $XX revenue I'll those

is a million about So revenue. or XX% in additional bump this $X.XX

million. it’s acquisition, our feel is accurate point, a dollar to and this I impact when what it’s XX% at at you numbers this from take with think this So doing $XX a standpoint, not sure insurance I'll my But say this strategic go significant did we're about agencies. point. we us to what's I allow are have make important to back what that

also of will and think consolidate have with that this we complete and Lincoln insurance the three the in the we have entire the owners the manage management I network. agencies quarter Agency we'll first

through revenue. this maybe get both to we could close and us have acquisition So as of first to start that insurance significant and cross us we're markets, out are and strategy create some to taking them potentially infrastructure, some really agencies, take we we that – efficient to opportunity to standpoint, ability if would going of I tangible more as XXXX to the management we going in. strategy and give begin even we quarter the take Steve, a through we non-interest their very focus see we I book go The succession XX% and built-in, bring Again, let this will great is with pleased on couple overall a of impact insurance, this being that But with can me see this. give with one an $XX we us billion plus opportunity we have to revenue insurance us to have have our this revenue add what needs now model loss model. replace now liked business. is XX% total of significant have from income additional on a smaller

Stephen Brolly

you it's immaterial if very, very A a tangible book realize, transaction.

So a weren't where putting insurance possibly a out usually longer. expect tangible there. lot book you'd are of bank a unlike companies three-year But little information payback,

sheet that's about small we bank – is of such little going balance I'm But a total lot and so driven insurance your say revenue again, you really because it's to that didn't to you animal bit commission piece that see. statement, go that have. it's income would a different our double a the because a And on And it's math. normal through

Brady Gailey

Yes.

tangible from of this the it impact book you Steve, acquisition, kind I minimal? mean, of value consider would So

Stephen Brolly

Yes.

Brady Gailey

All super. right. That’s

Stephen Brolly

a that, couple what take years more it's Brady, that I in piece. so mean, really a it's talking it may I so very mean, not about. was but minimal it's minimal small it's bank, worth I saying,

Brady Gailey

impact was taxable points the at your about kind happened made yield basis XXX to and book, And wondering, I going so portfolio. near Understood. you lot non-taxable think we're see look lot of just combined next a a in guys But Got the quarter. there. larger the quarter, know was you then in Steve, bond of end, movements quarter of I a bond I them third if it.

bond balances, going many you adding amount guessing to down to a going these be guys decent just what I'm you it's the forward? do purchases. come so new with yield expect If

Stephen Brolly

Yes.

on So the was $X.X one we [XXX]. about billion put

it bond so be portfolio. could And about XXX total

short, what basis did that cash points. XXX that want we excluding have because we $XXX million versus $XXX getting do to X.X Now is million went

help and double cash. that into And XXX convert it'll than we're yes, loans year, for because it's more securities. us hopefully So the during will in that not next getting we

Brady Gailey

Yes.

So temporary bond time consider on of likely yielding years? to can loans. see the not think book, this hopefully a again, about Is couple book you would kind to of of a increase the but higher book the bond over and you bond the amount to addition in every it and will that way put the shrink it next

Stephen Brolly

our roughly seasonality. only of The of Yes. be securities It North the million of of funds quarter. to are instead public is we running increasing be we're lot But runoff should securities. of get a January. $XX and not that, come couple having and after may cash, a the lot out go off, month, going in the And normally end in where We December fourth and Louisiana of towards is we year, today. a difference the a part latter the purchase so

Brady Gailey

right. on of one-time million $X costs. compensation/benefit the last All me, kind just then Okay. for medical And of

come So next assume I safe million in it had quarter? that about mean, could million I a that $X that $XX.X you by to mean, is down line.

Stephen Brolly

I million, the come do to have quarter. that really That's and next procedure down Yes. one-time we expect but some $X costs, may

Brady Gailey

Thanks All guys. Okay. Great. right.

Stephen Brolly

All Brady. right,

Operator

from comes Sandler. proceed. with Milsaps question Please Piper Brad next Our

Bradley Milsaps

guys. morning, Good Hey.

Drake Mills

morning, Brad. Good

Bradley Milsaps

Yes.

And stable, question in pressure Lance the noticed there. loan seeing stability, bit in cases you maybe a loan on talking – things a to quarter. I It on had like Just also yields. look fees. those linked fairly impact some are noticed categories guys mentioned you but up some we’re

book. kind of this those Just outsized think about loan kind was if of quarter current out fees, I something just yields there. that for And that kind the up. what propping was of want to what you're seeing sort versus coming new loan are on curious of was an

Lance Hall

that, I'll maybe Hall. Yes. and Hey, to this take wants is Steve in. Lance jump

that about that we've nice back of very class think we – no we're as very, through a done holding I yields doubt relation really talking if on there think as There's this seeing we've right environment you is I But flat estate. X% loan loan can. job the go about yields. three four We're at owner-occupied or real competitive. competition been around some the through quarters, last tougher

yields. we'll that would loan few So in decrease see a I basis points think

As we fight relationships for and bringing the want bankers have time, job relationships I off the the done to a think competitive same At side. we're we our on in. say, fee the great

Now had close able determine amount. if the fee fees really well one do But to think for large the QX, loan in continue swap hard I opportunity we just will be similar say really dollar to I to we'll in that us. again QX around traditional

Stephen Brolly

Yes. And the that swap fee is not in NIM, that’s below line.

a little So I agree a bit with have challenge. Lance that our will fourth quarter of

points decline have X there. So may basis X we or

Lance Hall

working would I at our quite markets. bottomed on But cost think Yes. combat. know time, deposit don't I mean, that I point, yet. out same this obviously gone our and looked its our pricing We've – favor. the on at our is across various say markets taken hard. fresh hand-to-hand at platforms CDs are I we've is in a bankers our money coming have of any all we Obviously and pricing through look at pricing

So able the another to or us costs. basis on would deposit expect get to so point I be

Bradley Milsaps

if early you mentioned margin? from XX react the in got the short-term feel floors, do of rates I kind you XX% of to you move or rate. Fed the and loan year just Just how we points margin next get want basis would Steve, how is Can feel think just would sense XX, that Great. the about late a variable of impact what kind talk you of XXXX? about – the of maybe to a And your portfolio

Stephen Brolly

because overall about So floors. XX closer that of it get to basis basis And loans the basis basis of XX are when XX%, if Well that's XX that – but the it increase, XX – of hits some then a we XX% would closer a where points of that. points if goes in then to we're points. XX, up points, not XXX. that's And

have – should if do and But XX, floor. a we XX first we are have So again, XX couple the between below goes up still it that get we XX. the XX of

Bradley Milsaps

you're XX% Great. the run That's for much, insurance to just heard several partnership remarks, too fourth. million said you basically I for quarter want helpful. about different thing me, push in And the that those go like you normally, numbers prepared going I going to that was million of a said then you think lose revenues, I XXXX, Is with don't kind income? there. which a think, a In It sounds guys. finally basically away to $XX and around a your to the belabor increase are in $X

that two offset? items those of So is kind does –

Stephen Brolly

Yes, of I heard of that on XX% number they some revenue [indiscernible] I we that when because revenue. realize ownership million the Lincoln of Agency, of booking XX do. the now And third weren't the

of is million. So of $X actually we of will their about a XXX% the revenue, XX% instead which revenue, bringing their be running on

Bradley Milsaps

right? then you'll XXX% it. a on well, expenses bring of their Got Okay. But as

Stephen Brolly

Yes.

Bradley Milsaps

insurance XX% kind Okay. need that or about think to of type And I ratio as XX% normal business? like efficiency a

Stephen Brolly

Yes.

Bradley Milsaps

Okay. Great. Thank you.

Operator

with proceed. question from Instructions] [Operator Davidson. D.A. next Fitzsimmons The Kevin comes Please

Kevin Fitzsimmons

everyone. morning, Good Hey.

Drake Mills

Kevin. Good morning,

Kevin Fitzsimmons

point those to next where over out you questions ask of been lot But we several expect and where quarters? was Drake of settling the answered mortgage asked one already. wanted as for loans and I trajectory thing, and A warehouse Thanks. look have about kind

Drake Mills

that outstandings. mortgage I've plan on of last years we're between said warehouse moving, XX% and we the of running XX% from couple

we think being XX%, marketplace. end we brought got We've We're We’re expect on clients. the about certainly quarter our pretty as going as down some to on we're you outstandings. be pretty – to to reduced to going out have We and that stayed around four the this primary. hold pretty number but clients of up talked strategy where we to at use far we’re pricing transactions process to we're XX hold our the impact in up And so been aggressive compared the booking close have but be when fourth that close we've million well, we're of top $XXX what have business. would think our our quarter we and yet of there. to able had of look two as have About we us for of would decent how at And at that XX% additional feel to we to market. now. still focused not if do an pricing tracking that XX% we on very trying price cheapest We're price, XX%, margin, to clients could

rolled We the was to and clients have bulges XX% said, So like of bulges. types XX% those like of to outstandings, able that got uses multiple up point. we this majority through these those things. and about, bulges maneuver have of primary. to are our But off those be Most to I of of when through

So as around down those us we'll where bulges probably of come second XX% expected we finalized, to see the to outstandings be. quarter

Kevin Fitzsimmons

imagine that's with just down the future there'd what large there's organic be in about improve. great. you there's I'd which obviously in Texas multiple and Okay, and eminent seen and growth just Very lift-outs, the in very about from you place can guys you region a have especially And thinking team – the markets close deal growth, if have helpful. some and your

front of for. it in you you priority been like has – or in Although it seems guys I the been sense as haven't that terms been what past as that hasn't as of were of looking top

where priorities your And but want balance opportunity, there with those imagine growth? can you you it. tremendous So be – team of variables, are also kind I you three about to for lift-outs, would can between talk could

to take on once. want much don't too at You

you're recent You you to point in a those on, certain ones maybe bring get at Thanks. bullets? you up just but that, brought before guys the new quarters want to how looking expansion let all

Drake Mills

Kevin, my how thanks today. closed really for for that. that's a conversation great opener Because I

on would just and been we're year an we into But Group, client talking and organic Birdwell follow here we we North continue have have lift-out about. focusing want selection. grower. that are position And from talk and strategy a went going in to stop in significantly doubt. client This about and a Texas a double-digit a been have and are without an that to for significant the have opportunities continue organic could Warrie for We're congratulate selection, keep who questions is strategies. to we they had strong growth second Before I'm in Houston we DFW growth I – to long-haul.

been we this We the on not year. opportunities exit there of have portfolio growth. had for a word have highly the of might market strong focused had And players lot lot be going in. of our because and goodness looking And I'm and to use really with successful not want we've out to loan portfolio, things long-term players cleanup a there's a our thank strengths that liquidity but we

attempting do of on yields. best proud low we where stayed I'm have at we We can focused are. the managing to

on been but of would impacted selection really been have negatively. don't good We I a have they credits. credits would think There profile, would certainly the have passed transactions, have that number client fit our but margins

we the people start the in. looking manager there. lender bringing It and at I But that past, from problems look around selection. at also our the was I And client The down relationship we selection. there quality think in component growth, we're road. So our when a credit talk quality was of about

representing excellent they're an job of up ratcheting and quality the that We that the the loans the are on have of bringing people books. us done

selection maintain growth that, that doing quality, we're job. single-digit the attempt will through trying we're into around client lift-outs right our And to we and yields. focused So quality, low organic our of I on quality, awesome getting And form continue yields. continue XXXX maybe portfolio, focused and focus we're and an of think loan But people XXXX. back see we manage growth, to strategy to fit on to on double-digit high in some and now, growth quality

Kevin Fitzsimmons

Great. me, PPP the Thanks, and adjusted for Drake. one One warehouses. ratio last now for allowance

of settling settles think yet of leverage you're that we that? the credit think do over it's do down Thanks. think where long-term? to XXX. kind Where we when When decent ahead, you time, at ratio that's have to but loans you long-term sort a for point growing about you a clip – down take do I it going be to

Drake Mills

Kevin, out to in take to lost money that coming million wouldn't back balance and $XX going credits when you as We're have I and necessarily growth pushed have with Yes. we've think methodology we on. of

I are for of how most was more early we out there's that's assisted much we part think now. question, tremendous amount there where left living an want with that to there? the think I be a don't because

very I look allow to conservative and take we to methodology, love grow into some approach would as at us a this. So of

conservative different impact into I've we portfolio impacted Feel trajectory people we're current this feel quality a number I about to credits could our potentially very inflation our think on conversation quality. credit. issues. the through overall of the about credit, good our better be and and in that unknowns a felt I've credit release things, chain, labor other there, never we're where and be deep as looking pushed those of going a the supply the perspective, still our credit to economy with side, there are out significant from and some. But of had

guys force see growth going some of hoping pipeline you will So is but where to I'm applying continue that release that's that are further can see but start I some today. will feel release, probably growth to these and see we to I instead we because us, significant – a of methodology like

Kevin Fitzsimmons

much. very Thanks Okay.

Drake Mills

Kevin. you, Thank

Operator

with a Please from The Stephens. Olney follow-up next is question Matt proceed.

Matt Olney

guys. Thanks

the remaining Just that year? think around recognized you the $X.X and could versus how be much guesses fourth fees. side, on mentioned quarter of estimates a of in PPP few Any next I clarifications or million on

Stephen Brolly

$X.X Matt, it's fourth the about million million for the $X.X of quarter.

we'll was to of still because the lot quarter. think forgiveness have the some quarter be a process it's and second first quarter million third quarter, majority second of this we $X.X was a but and going million and The $X that's forgiveness. And

Matt Olney

Okay. that Got the guess mention would you it. that to going insurance I back closing acquisition, of what be? And timing did Drake, then the

Drake Mills

XX/XX.

Matt Olney

Got going of Origin step insurance you you important acquisition it And just insurance the a part said it. well. I is to strategy also other piece, haven't And agencies then taking sounds back, is and the as I give on guess an the think going heard. chance guess to we be a consolidate I to like

insurance much some last on about haven't years We over the calls. talked too few these

give So you more important any overall is few to can the us insurance the over next strategy how years? Origin and on that color

Drake Mills

higher to to I that a business we're a non-interest it's of income that. think what company part do I mix income. a drive Matt, of is this is This significant our trying continually a because – total to strategy understand better

life Before agent. a a and I and was banker, was licensed actually P&C health I

about that So this I enjoy background. I intense. not risk. low It's have is what But business capital

there now to pick agencies. in our recently significant the fit up these glove these is about It's with take We lost ramp is relationships enhanced also, When allowed – approach very that and business. similar in three Agency rates through rule of share & model we do the Lincoln what Coon rates a what have and agency to revenue take those smaller & to and have is it reduction commission back because is the be there to our these be We agencies Farr management a significant Reeves And more agencies, in – consistency. have of like feel Lincoln C&I the payout a Agency, going us really some Thomas up Funderburg able succession hand a our commission markets. revenue large bank. we with enjoyed end. there. It's But we combined the of I to lot taking to like lost consolidation the

they'll agencies start and relationships of smaller to to infrastructure put way, to that mean – our the the take impairment in a an And Metro model those and some on marketplace, some I pay to got some us things us have significant the and those the and efficiency, of these markets of then in as all books. and by not situation. allow have build markets, move roll rural to go to book get up out, you've Metro allowing agent So up in

We've value. like real – with we Dallas, seen the able be markets that a already is that we're to and model start Metro go happening some to drive the rural going next use significant in into Houston. representation market So fact our happen move to

Matt Olney

quarter. And more lastly, point little I guess, a was where short-term that quarter, salary Drake. you back perfect. expenses. That's on for just just taking this you Steve, non-interest would Okay. Thanks Steve? a the mentioned fourth towards in the that, us heavy operating for overall step the the bit line expense,

Stephen Brolly

to About $XX prior, $XX million, $XX million same said million as closer so we we $XX had be we this million, quarter. it'll think –

Matt Olney

Thanks guys. Great. Okay.

Drake Mills

a think to Matt, I component an we engine. growth still diligently think – and to manage we is a significant to working continue are about and what us flat important very this want to efficiency I driving garnering structure talk is expense

the experience, As technology, focus it. with strong is of and seeing customer with enhancing we the enhancing one of institution, real this I said progress this are some

Matt Olney

that, Appreciate it. for Okay. Thanks Drake.

Operator

time, our this there the Mills turn for concludes question-and-answer now in like session. back further At no I Drake this the And queue. remarks. to to any would closing over are questioners conference

Drake Mills

position, the as the of of of position the slightly we to organization, quality I to capital one of success of today. in the the have I've a today opportunities will time institution, the footprint, the your this a XXXX institution. each in And the whole. overall never for in line growth the improve significant thanks and the bullish the the people quality footprint, you and impacted standpoint sensitivity this we a appreciation as dislocation asset put at say, we felt that true all look the more in, from things When have My are organization up I us open about internally,

strategy these a better in we've and So start and as been the XXXX and planning I together all put never I things sit place. XXXX, of back for

I to think going significant. is and growth in XXXX trajectory profile be XXXX, our

hold in up. are to to going are that markets continue We

standpoint. a some are mortgage Houston We in making from strong moves

you. So give to me have again, open have your anyway, again is supporters, for (XXX)-XXX-XXXX. time. always thank phone My pleased things together, all Call as investors Very you questions, the if each and bullish. of put these I'll you any one But and thank you you answers. and

Operator

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

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