Origin Bancorp (OBK) 26 Jan 232022 Q4 Earnings call transcript

Company Profile

Participants

Chris Reigelman	IR
Drake Mills	Chairman, President and CEO
Lance Hall	President and CEO, Origin Bank
Jim Crotwell	Chief Risk Officer
Wally Wallace	Chief Financial Officer
Matt Olney	Stephens
Michael Rose	Raymond James
Brad Milsaps	Piper Sandler
Woody Lay	KBW

Call transcript

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Operator

Good day, and welcome to the Origin Bancorp Fourth Quarter and Full Year 2022 Earnings Call. My name is Brett, and I'll be your [Aver] (ph) call coordinator. The format of the call includes prepared remarks from the company, followed by a question-and-answer session. [Operator Instructions]

At this time, it's my pleasure to turn the call over to Chris Reigelman of Origin Bancorp.

begin. now may You

Chris Reigelman

slide thank press joining copy release on with is and to will issued this during of today. our available call. the along website, earnings yesterday our that you morning, we us refer for We which presentation Good afternoon, a

includes and to of the Page which non-GAAP our statements harbor financial slide of refer safe regarding use Please presentation, measures. X our forward-looking statements

www.origin.bank. on phone, by note slide our please website available at For those joining presentation the is

that harbor yesterday. filed call safe available made harbor Page note presentation our are also release Please statements today's earnings X our slide safe and with on statements are to during of All the earnings our in subject release. SEC the comments

CEO, Lance and of Steve Chief Risk Accounting After be I'm happy Banking joined this have. Brolly; to our morning may Hall; Officer, presentation, Chief Officer, our we'll Preston by Wally and Mills; Origin any Jim CEO you Drake Origin Wallace; questions Bank, Officer, Financial address and President Bancorp's Officer, Chief our Chief the and Crotwell; President Credit Moore. Chairman,

The call is yours, Drake.

Drake Mills

Chris. Thanks, Good morning.

finished that review strong an decisions year XXXX, our We year quarter long-term a major fourth that that is performance team laser-focused I impact significantly on our enhanced will company. was management accomplishments with strengthened value. As of successful a strategic and

way. in meaningful XXXX, very well us a we to positions condition of overall begin The advantage our our company, markets as of take

country culture recognized great Banker. Texas, second American across take competitive this Mississippi. pride bank reinforced Our as of it strength This starts creates. the with in being differences in We in work and for best with our executive our Louisiana, the Origin our the to year all throughout and by team our markets filters organization is

in conversion. will case said has the I've I've always months us post foundation with unicorn, as One was BTH with we partnership Bank. Culture develop. how two for this remained XXXX, discussed, the often BTH any partnership a major is highlights of the and be

our Our the shared that this communities culture Texas pleased about of shareholders and putting BTH partnership for excited what opportunities intact that presents. made I we kept people is and very I'm successful. growth organization. am so East employees, customers, delivering have successfully the first has

we In our XXXX, footprint. growth strategic saw throughout

Excluding XX% mortgage grew warehouse, including over BTH. and organically loans XX%, nearly

highly As liquidity environment. a moved out XXXX, experienced competitive the during we of system deposit

took our teams the strengthening of to exposure high-cost base. core advantage our to Our market non-core deposits, deposit reduce thus

an while deposits by non-relationship warehouse reduced X.X% million. experienced basis, we a $XXX-plus including mortgage million, grew without BTH. On deposits We average $XXX-plus reduction of

on ratio our Our deposit XX%, and we bankers with remain laser-focused are growth of a position sheet loan/deposit warehouse. of mortgage in excluding XXXX, balance proud

assets. sheet We $XX expansion balance in asset each sheet year total of color The finished the as the NIM. we with by in interest billion. the And managed below strategically three highlighted will more was balance provide around $X.X quarters. we Wally our of sensitivity net planned, billion past margin

incredible opportunity has addition impressed, an drive in way. BTH mentioned growth to the I've past, for Texas As been has the meaningful and story value a the of Origin created in

markets to continue people out having. important growth in our that have But detail will and XX% and more you represents of pay our talk company. loans franchise deposits. excluding will presentation, As see in held point to mortgage and the think for can Texas XX% our in investment, in these it's for warehouse our approximately off dynamic success are Lance of we investments Texas about I infrastructure

but in as will more credit we Officer, with have their strength Moore, amazing talk us Chief Chief done credit Risk risk. uncertain even comradery, a of later, position Officer; about our environment head job each credit as it's production, Crotwell, teams, so Credit it's into I with along managing metrics, that proud us an details other As of am the of I'm well even economic metrics. in importantly, Jim more in Jim current our proud our than trust helped And Preston about our the the our XXXX. perform and that just teams credit XXXX. the about more producers puts have

Now, turn it I'll to Lance. over

Lance Hall

Drake. Thanks,

build I'm of the Origin by people the connecting as unwavering We performed to their trusted extremely technology to proud dreams. over advisers combining year. committed the of with company power of how a we vision past innovative remain to loyalty

this numbers I'll as doesn't overlooked. need second the a bank this understand what taking XX into is to for, standpoint, is it's place recognized important over mentioned being and production months. what the Drake to the from get work get we're to last best in but America building

Our Texas strategic the added culture This primarily XX model attracts producers, are management driving deposit creates and to XXXX, new an East total side. growth high-quality meaningful quarter, relationships. in made people in several hires that market, are committed long-term we in loan building Texas on market, who geographic and for environment who the past valuable and the

investment, the we expense already gives me have but these talent impact strategic tremendous optimism incredible is of the the hires, Origin that to this long-term there future. for Certainly, an in coupled with

this across markets. Drake our took our impressive growth the mentioned all loan place for and year, of

Louisiana, ability We new long-term This delivered bankers Worth strategy production. attracting market. to Houston our in our billion BTH, over across $X Texas, Dallas-Fort North loan markets XXXX. mortgage for and over Houston production, new saw the drive and best-in-class growth Excluding company. bankers The in in of growth Mississippi, growth our reinforces in XX% each footprint our and from their $X.X loan our delivered XX% in North X% and XX% billion in XX% up warehouse

been focus climate and the extremely competitive. Deposit to a all will has deposit growth We're is that us. aware strategic continue be for

core uniquely fueling of about often are rural with metro of deposit One we our organization markets. our franchise, growth sticky we've strengths deposit and is the how this positioned talked relationships into

exemplifies differentiator further Texas deposit strategy our key a is our market Origin. of The and East addition for

cycle. momentum in a rate the this, took the of offerings of to in are we in positive have bolster We product And in deposit fourth change traction steps the we our and seeing. the quarter because are clearly midst

In deposit detail see as to it our presentation, our betas. relates can you

steps are resulted that to in the total our betas an from While better basis, of you betas cumulative XX%. range still to we took in we cycles, deposit remind on XX% acceleration where than we in QX tightening a the prior range deposit XX%

We strong can that are XXXX. betas deposit relatively we hopeful in maintain

react strong We accordingly trends we'll closely, are watching deposit drive performance. to and

our opportunities experience. our To technologies measure critical investments drive way, and deposits activities. is it that core for superior to we to execute As investments talented and a a deeply our are plan, assure plans executed customer in continue we in continue see to strategic people, and on our I enhance being to that Origin meaningful efficiency

Net robotics tremendous in categories, our success As us continued volunteerism, these along support performance, through believe in the Investor in our through highlighted customer we America. processes. satisfaction automation financial of the that through employee measure Scores, presently The our through our makes achieved Origin and Page X community Day, with engagement that efficiency employee and improvement on best Glint surveys, our Promoter bank we culture be all can

it turn Jim. to Now, over I'll

Jim Crotwell

Thanks, Lance.

its as X.XX% at continued were Past held on loan held due reflected percentage portfolio investment the for of As quarter-end. loans a XX, at performance loans fourth strong for our Slide in total quarter. investment

ago. held the percentage year investment the and are level of X.XX% with which down extremely from continued a X.XX% investment, Classified as held from remained stable total for year loans for down in nonperforming reduction We loans a ended the loans at for X.XX% quarter total as of the at of X.XX%, pleased held prior investment. of loans

Lastly, was and our best only annualized X.XX%. the the strength and evidence reflected the which of our perhaps resiliency by portfolio quarter, for charge-offs net of is

We quarter, increase compared particular our position for million, reserve to our economic the percentage and appropriate, quarter-end A increase quarter determined a X.XX% our loans million to prior continued held nonperforming as is credit the of increased of between to year and the for X.XX% we for in allowance XXX% that our reserve XXX% to strong loans, the ago. During balance the a increasing as was portfolio $X.X percentage increasing for given of from quarter a as note losses XXX% $XX.X the investment. of headwinds. the

last concerns and geopolitical we rising closely recession rates are the the economic monitoring as of impact. of well quarter, inflation, likelihood impact we continued an as its and shared on As our portfolio,

continue we the believe the to serve by a areas We other degree lesser markets that will than impacted a country. to be of recession

and along In portfolio. focus credit structure in relationship and on summary, result underwriting to continue our resilient sound with well-diversified our banking,

I'll it now over Wally. turn to

Wally Wallace

Jim. Thanks,

adjusted pre-tax $X.X were we On highlights. the financial per merger-related $X.XX QX $X.XX. to of Turning excluding In basis, reported share in diluted million an earnings expense. per share earnings after QX,

the quarter during to expanded Net points basis last XX interest points QX X.XX%. from margin XX and basis

XQ, adjusted net points $X.X purchase interest in expanded XX points net margin X.XX% when that our Excluding expanded in from QX period. from XX basis PPP from and million last excluding $X.X million fees basis accretion, accounting to

balance Margin asset-sensitive a expanded marked the QX, and during consecutive our competition the for sheet pricing in of in third demonstrating positioning despite quarter increase the deposit quarter.

sale current $X.X we $XX.X in million on reported have income, of QX, our into $XX.X at securities a fee Ginnie QX, impairment MSR, to on entered from a which gain Mae value. in and we million On million sell $X contract subsequently million included which in slightly down carrying

driven primarily in securities and fee limited slight by our income investments seasonal insurance decline MSR a gain following was the fee Excluding partnership of a slight QX. sale with decline write-down, combined income on loss in a in gain

$XX.X Our noninterest from to QX. million increased expense $XX.X in million

This million vendor due and when saves million primarily the able expense noninterest pull prior $XX million. some to additional our to expense, slightly to than better was to BTH from merger-related excluding of forward was QX. $XX.X quarter to increase $XX compared as our into guidance were $XX.X million BTH-related However, the increased cost we expense month

our worth million noting capital. X%. $XX given roughly quarter, which the in TCE rates the is in during to balance the increase Turning above back It AOCI helped shift our ratio improvement

remain of our flexibility allowing opportunities from to shareholders. quarter, perspective Our regulatory deployment ratios well us any future advantage potential capital to we value a capital during capital improved capitalized, the for drive all and take

that, it Drake. will now to With I turn back

Drake Mills

Wally. Thanks,

positioned We this accomplished where we to excited based be we about have year. lot a moving on XXXX in are into what and

from a in levels right I'm place. opportunities am know confident the incredible where employees and our liquidity credit understand the that perspective our we credit to about to and team capital are have of clients. in with market. ability is our allow and us our I in We advantage manage culture take pleased who place in

There is local strength regional and our economies. in

to and continues deposit domestic migration growth. on laser-focused And from economic profitable are benefit strategic market driving and teams Texas growth. Our our loan strong

We we same know do in in uncertain times. have opportunities can proven capitalize on throughout that will a the XXXX. I history we

year, great a you and our for Thank thank being to employees you call today. for the and shareholders our on

questions. Now, it we'll up open for

Operator

Thank Matt comes is open. Instructions] Our your line question Matt, you. [Operator first from at Stephens.

Matt Olney

thanks. Good Hey, morning, everybody.

Drake Mills

Matt. morning, Good

Matt Olney

pressure And on if so, across I'm a the if I kind pricing your now saw still near here? industry, that want given consensus in love land seen but deposit the think NIM the And in to deposit Thanks. to peak improvement on thoughts seeing then, We in deposit any and we've quarter, NII. term? color curious you from that some linked Origin. with forecast. pricing margin start incremental hear think Would where the little and betas margin we're could the below the you updated of at

Drake Mills

Thanks, Yes. Matt.

be on Wally, and I that a competitive. and where early to we over into get out obviously, industry of pulled the Before for this would market would that recognized back situation it highly us, we're especially this liquidity turn we

past, ran think very institution I as important this been grow ratio an to the discussed we to been a we've up cost organic as through we've some novo growth, our organic growth. de higher the of in of deposit loan strategy, especially that it's able cover

that want we loan/deposit enough how on strategically, decision we life were to needed mature we XXXX, into in sub-X% ran our from liquidity institution. we went we a And be cycle As the that to certainly, perspective, ratio. adjust this made

about experts talk our bring everyone got deposit very talk a that to aggressive remind that teams on. the deposit a teams, focus, lift-outs and about these we we and with focus, we we So, always on. had want I we brought that do we business teams, in development

very where So, we we feel good about are.

to things -- an of of commercial our easing this market. a come of different to out using projects, quarter. pressure We're I a still our NIB, did standpoint seeing out we their rate as We're that pay came competitive And are funds. some But of certainly number environment. job. a as clients commercial everything, debt was from think down to on of do to see them what we the using fourth in excellent liquidity we top do They're the

knew a on categories, think, and I remix part. was of managing in what exceptional there'd that, We expected that we way. deposit our So the be are an

are, We continue the in think, in of always our and talk markets have prove about core go that to our tell they ability deposits. Texas core how I I'm first we to beneficial that's That real some grow deposit itself highly will that the show business. and Louisiana we confident value in plus and of you quarters is couple aspect plus I But 'XX. going through the as to

now, a around because quarter. for we continue out get for us we where let think there as to at look certainly we the have opportunities our of Yes, seen margin, of work doing into that, Wally because margin are. some So, lot I'm we through to is progressing going topping we're a could

So, I'll some it to Wally for over specifics. turn

Wally Wallace

Thanks, Drake.

Lance Matt, of We deposit as our remarks probably heard as moves and protect the balances cash that prepared mid-November. balances. commercial in and we we their board. the rate our That we make So, decision his referenced you we down to some some sheet across was made paying quarter in can, our customers during we increased early saw did to saw the strategically best

So where on to pressure deposit that's started see the betas. the we

basis assuming we offset continue in hike the us Moving to of we decision will next gives into that the pressure the to we that expect betas yields to In help from a week, think the XX that quarter, point and the our first pressure modeling, increase corresponding loan Fed that, are January. deposit will the deposits. some

progresses, kind first net think side deposit We quarter. as the in the start the on the down margin anticipating quarter, digits. But the will for start the of probably loan are we think pressure pressures, be will to interest mid-single think deposit margin again to and we we trump quarter loan overall, second the So, the actually yields expand does trump yields.

the to our sure make from and to a that might to deposit base. But are on we'll our Fed imagine, watching daily be that. hike protecting we Another strategic basis, we help try you deposit can balances continue are

Drake Mills

and Matt, strategic And long-term from we on growth. that driving on focus a we longer-term are today, everything focused perspective, a perspective from

credits, base. deposit Are They No. at those No. We losing utilizing customers. resources we or commercial Are customers? we point. are have at an the are customers? excellent looked We've losing we losing this

So, answered I hope that your question.

Matt Olney

there. Yes. Drake and Wally, that's helpful on the details

Just commercial still of a some and those of those their out on me down the some If liquidity strong. follow-up loan help at kind why remains bank, the are appreciate paying of growth Origin of customers debt comments. moving very

Drake Mills

XXXX. some to I'm real the Yes. of we talk that. let going again, about out And teams results on But we're seeing in that brought Lance Lance?

Lance Hall

Texas economies continued Yes. to high bankers Thanks. in of have strong No, because North the morning, Hi, our produce honestly, Houston. and and level, a good Matt. at

opportunities. We actually at we have this strategies exactly morning. looked worked thought continue did. to lift-out The I see as great we it growth

On of commercial years. like from these perspective, have history it perspective. pricing that from knowledge relationships new as produced the hires million and and bankers side, the about their back We We we've talked of in banks. bring going they're a growth years And the continuing loan credit relationships from love these a $XXX because lending the it. their old to over over

want we strategy. So, to that following keep

both their has that year loan and feel incredibly hired helpful. to The the continuing clients, new introduce deposit are the very side We last XX been pipeline remains our strong. to hires on which us we

that that's a be built XX% we've We to grower. going a annual continue believe company to

to -- loans we interest be our of XXXX, look as looming we've what higher in budget, expect we on loan mid-single say loan rates effect be deposits going XXXX. digits will the could are what loan at modeled we're to growth I of and our growth to and our to Now, the recession in side, the sort in outpace that

to we in by loan about deposits deposits of inside be incented our company at shift and lot plans. a have really will driven XXXX, it's then, mean, be will bit weights incentive And been the to going the of level higher of a and growth. $X $X to going past I sort those will. talked owner In the and than that the that's on little be we bankers occupied. incented have has that incentive -- of C&I-focused our a we've of And plan a we side, mix loan loans really equal

pay that so, off. to continues And just

around They and what incredibly discipline growth accomplish, selection Our of client year. our strategic -- bankers continued our I this understand we're optimistic our And trying our I'm purpose. to the understand pricing. just

Drake Mills

And, Matt, examples. of couple I want to give you a

new They ours, But I'm -- that's $XX today, relationships because a new client that this had million, another bringing we're running was So, $XX these balance, new over. paid seeing we two they $XX million worth one, teams loan growth. that them went still million. and million balance, are manufacturer, we're funds have But clients, of close over to: bring very debt. $XX on strong -- project; as very of off growth the and seeing of ahead a these million customer they utilized $XX

Matt Olney

if their in ask loan growth. of of a sounds similar the to building customers It down a of some question. kind better new debt? way adding some paying team like Any there and recently, seeing kind you're to utilization rates are producers Maybe the the are change the more

Lance Hall

utilization the on We've Well, to At growth, end down, though we we've were XX.X% uptick like such a actually it's of averaged that a even our quarter, XX%. we the revolvers. XX%, at the utilization have some seeing the we've of on are in historically good because interesting, continued slight little seen line.

$XXX million exactly fees. for individuals this say each mean, would be. like Houston are that dynamic produced and do it dynamic, in to last do. way, we to are going growth what growing create thought three mean our and it Houston just it's of existing just these Dallas markets were thought million over where Houston we I in I bankers loan and Dallas year Matt, I that $X going had we strong was over

Matt Olney

happen, to Origin? the I'm XXXX. some Fed leverage mean Okay. And that pulling think some what consider that then, a in margin, scenario? going And would did If thoughts your was I concerns are the the that rates curious what if market are for growing what what this you -- this has could cut options in back later XXXX, are

Wally Wallace

Hey, Matt, it's Wally.

are We the what curve what the forward will and close about, well us to paying do. curve are of very is attention aware think they telling the Fed

We time risk interest of for there rates hedge have take on are if to to opportunities when what down. considerable amount and Fed a spent rate starts the ourselves educating

educated in present in have changes and several take advantage of take like the are the collars relatively the that advantage curves we we'll expensive. we We curve if can them pricing options. cost themselves. of There feel any and front hedging considering of watch all to from change day on is are ourselves we the they instruments, instruments enough us to options every to that we've and the floors in these now, swaps, of any Right

down. position So, for can if to the we when will take that, we're Fed we to asset what we sensitive, are, and ourselves starts rates aware obviously, to and begin do and of

Matt Olney

and for obviously, focused you credit. updated any And quarter. just flat love maybe perspective most in for on, Bank, industry is you're specifically that geography, But kind you're more industry, on? to portfolio Jim, focused thoughts on maybe Origin what or Wally. maybe hear Classified the loans have, Jim. pretty Would are me, focus what on then from of Thanks. becoming the lastly focused credit within an most on on overall Thanks, investors Okay. your linked maybe

Jim Crotwell

customers from benefit -- I to -- our seeing bankers. the the now are known spoke that we're is Good well that Lance the Yes, to we the mean relationships morning. think what of lift-out. these are I real

also we on we're primary, where And are, And benefit relationship of source so true focused the repayments. think being tertiary growth is. focused, secondary to who I seeing that's our and

sector did When it everybody we I at it in looked right office pandemic, before, the we deep paying we I'll just at we process. sectors, close about know through that dives to. is the now, we talked look because continue and that really And attention that's and as went a

it's any that portfolio, our have offices It's downtown very granular. don't they're just For are, district. business We say, diversified. very

we things sector looked the XX%. about about talk LTV at is One source of we average when for that in repayment, us the secondary

So where in underwriting. of you tells our are kind we that

credits all And we that where One component no office, if nonowner-occupied tertiary we as if to of supporting other nonperforming the exactly in no past factor, look the liquidity that, $XXX same of have guarantor in those loans we our the about dues $XXX go we combined sector. are, have almost you million and at million. is at

And so that kind of gives you an idea.

diligent. look the I similar value is, you limited. be do areas, when manifestation very us And to we lending. sectors, very it's And will, And if not do, being If a enterprise going we results. very at think do again, you of other that

And consistent so that's throughout.

to take would the a I you source portfolio standpoint go flow maybe will, because interest from of very identify really of things if looked loan-to-value you with particularly we've cash a is to particularly pleased results, also an coverages, done rate if that if next And in the our there through step, then very And maybe of secondary just have we're an rise debt shape exercise spoke diligent credits from from is One what strain an that evaluating through some standpoint. you stress-testing have go service, to you the we're good overall we've perspective. being repayment. from

very and very cycles, very, that economic various well we navigated through we're feel successfully We've positioned.

which early level see, As past indicator. you dues, of is our can

loans Our extremely is nonperforming level low. of

from uncertainty. feel really, And are I about good time we of so, overall given portfolio where this really an position,

if that in our markets, good serve when feel impacted thing maybe is one, there less be will is they we're fairly of really as quickly. and it I quarters back say said come call, I would Last if economic be and hopefully, our as seeing, we the out and from an look markets that this downturn. we about at there -- that well, very we we three brief And is what we'll will

Drake Mills

to to little of and that bit consumer a I breakdown my this dependent. been the those concerns, spending credits if type amount years see a to in something add And Matt, stresses we of tremendous a one would around done voiced last of consumer impact work through spending. are several understanding going I'm we've have in how they continue

you, tell point, has we're will this And with this table. through I and I of come any of at confident we And Preston this. brought pleased talks Jim And seeing what it's for not to 'XX. received. to are preparing point. where very at we're deterioration some know level, deterioration but to type the But going ourselves I'm about just

Matt Olney

commentary. Thanks, Okay. guys. Great

Operator

Thank Matt. you,

open. at is Raymond your Michael Michael, line comes from question James. next Our

Michael Rose

hiring. on pressures that of about good and Hey, inflationary little not using you're my bit you quarter a the digits, the aggressive talked the to some touched we a in you maybe just guys. quarter, but were on I growing given maybe Last Obviously, of guys that, revenue fourth expenses. about going looking the think, run to touch be we're expenses. seeing than offsets, had mid-single as all bunch kind rate for, Hope questions, want so were lower morning, well. is doing are Matt did think I I but

from move a much what get just Thanks. as you of sense you to acquisition then, realized saves about how XXXX? wanted And date? through the to cost Just we the of think expenses have

Drake Mills

thanks. Michael, appreciate. I Yes.

seeing it into also the and but the see, our drive reduction but about hand, the costs that doing, technology experience. expense investments we what we're strategic and get drive prepared on going technology, we're is bot I want focused and his in to process now. in superior we'll But Lance to investments so talked think are that We customer remarks, a right same as from there don't technology efficiency, today, to in

allow not think us We're serve in these deposit what to put we don't we and we -- see only strong teams I around going just position build making also will a making you're people, in investments and that we communities, facilities a where that markets. facility strong and included seeing. locations, that build Again, to in but and to the that's sure strategic numbers location, build growth are address are us facilities bankers those in

on, one got came three last coming we've another on So, that earlier year.

So, technology some we sure things the we to reduce are But 'XX. mid-single-digit same have necessary think the see I make run and that expense run that yet doing talking going cost through and rate things rate that time, to talking a do think, at things is a us do locations. and that that about reduces allow from we cost we'll start about people we're and those more to

it's corny, models that I'll look yet kind we're we but strategically we -- focus manage So, the and it, say going value build. long-term And know to -- show that I of at and this everything through have, but is that's expenses.

We reduction a in think a continued to in -- to slight we performance get our Those be going performer things certain to a focus efficiency. 'XX. saw Lance with challenged to You he's on mean, pushdown standpoint. I number to efficiency high have continue are is the from efficiency that a ratio. we're

Michael Rose

Okay.

Wally Wallace

Michael…

Michael Rose

sorry. ahead, go Yes,

Wally Wallace

to mid-single-digit XXXX. I'll puts a that and add of couple growth in kind just takes of

accruals relief have We a incentive in couple from valves XXXX. of

strategically new But XX%. XXXX. that invested made strategic and we of of Our also organic some some was loan growth real have budgeting in in for people, estate investments offset those. level in we've not We're growth over will that

we questions, contracts. cost your as forward pulled far little As bit a some saves technology from

us impact left extent that but about the will saves. in that will couple positively, a first the be have We the cost of quarter

Michael Rose

Okay.

headwinds, here? just you from there's some to kind the maybe the do room bring to Or flatline of it ratio So of are down Thanks. given out should just increase the think expect efficiency there? we that revenue given to challenges

Drake Mills

we're In in we'll still think would for looking reduction, of bit see from budgeting have efficiency see year that flatlining. standpoint but and and I we I a a little flat kickoff were we an Yes. possible one Mike, be successful think we're a 'XX, 'XX.

Michael Rose

Okay. you're slow loan -- Helpful. maybe just It going the for me. does I'm to growth sound then And a finally little like bit. here

I think you digits. mid-single said

you completely I where kind But high-single I we you just about of acceleration. the update an quarter, (ph) here, in just capital And have third further if the give your mean, to are? place Thanks. should think you think use would build priorities on pretty [even last given as what -- that] that us Can the actually digits, look understand. said looks attractive. you just authorization trading, stock strategic is

Drake Mills

into Yes. going we do where It's to see about, is with share you. We storms cycle build way to sale and in and it than a I in on to in that buying economic think our like And is active Certainly, I comfortable capital we're can king, going weather Feel back, right continued is be are. stock slower that have now. joke growth a slip We coming -- way. ensure it would we -- buyback. that because a a 'XX. we cloudy capital whatever thank positive we continue

our in chest. this that a tool tool is So, something is

do us I use active, think get potentially it. we we could and you could but have see authorization

Michael Rose

that Great. on to use to the the can you Maybe hear your newly-hired Very interesting chatbot. replace comment CFO.

Just guys. kidding. Thanks,

Wally Wallace

Wow. Ouch.

Operator

Michael. you, Thank

question next line your Brad, open. Brad Sandler. Our comes is Piper at from

Brad Milsaps

good guys. Hey, morning,

Drake Mills

Good morning, Brad.

Wally Wallace

Brad. Good morning,

Brad Milsaps

expect I growth deposit you appreciate taking If to outpace color. loan for growth. I correctly, question. my all you the heard thanks Yes,

of now portfolio? size better gain that that about billion from those think, kind your growth put where more balance should about wanted the some back Do to excess of what liquidity of you how the might of cash one, sheet. guess the could a again stay stable of kind put work? Just remain then, you're bond maybe Or to $XX are you you second, might borrowings? pay under in flows think wanted going I as down you would we potentially And 'XX? plans get the to to there. think deposit your sense Just

Lance Hall

Yes. first This part that. take the Lance. I'll is of

of projecting on high-single to we're and As kind said, deposits. mid- loans we digits

That obviously. in would increase is under that be said, goal. And deposits so, $XX being staying loans, net billion the dollars not an our over of

just of markets economies. grow, the of time, think competitive lot when it's model and we the of strong have us way of runoff levers to that up, use we it very individuals lot the We I the same in built sort have we a under see to our are we $XX investment and possible our some pull, a can the At stay way that you billion, from portfolio.

although to to So, do relationships. that's going possibility, not the -- growth we core anything a building think of we're slow that's real

Drake Mills

you making continue if million add very Yes. we're going active keep growth, at color engaged. and in billion, we loan/deposit a And standpoint a sure have If mind. in I'm little $XXX we to that sitting that, today, -- of $X.X teams and don't to which from to

We our quality care to add take continue We clients. relationships. of

securities back up, of You add million on we to. all -- add flow we is plus, 'XX for $XXX we can that back billion $XX we under if that push come debt mature a clear that need that opportunity and could will worth off. pay in stay have of to overnight There that of us million deposits path for very $XXX off can

just have a lot growth strategy, of confidence we So, as levers, company the opportunity. of we're some it's this a have jeopardize but said, but I reason, to do momentum and Lance an for going that that not

Brad Milsaps

specifically, securities case that some aspirations? not you assuming to of Okay. if Maybe in -- growth book the just was ask more I reduced be necessarily given planning your might that a the anymore 'XX, follow-up deposit

Drake Mills

sorry. I'm And Yes.

to question. I trying in deposit I not didn't I'm reality, think where loan/deposit saying opportunity But I'm -- to growth. have in XX%. I'm was and deposits below sorry. to believe stays with intact, but aspirations, our that we ratio we up cover of so our this we at markets, as this, Okay. X.X%. growth grow more understand loans liquidity our manage strategically We loan grow that type to any to should --

down maturities cost, in come put of the So debt portfolio would that or the towards pay back in the the end year. loans back investment to either in reduce

Brad Milsaps

Thank appreciate you. it. Great. Okay. I

Drake Mills

won't building we at be this And active securities in point.

Brad Milsaps

you. Thank it. Got

Operator

Instructions] [Operator from comes Our next Woody KBW. open. your line Brad. you, at question Thank is Woody,

Wood Lay

guys. Hey, good morning,

Drake Mills

Hey, Woody, you how doing?

Wood Lay

the the excluding assuming first good. so decline yield? to follow doing In core on the expected earlier. talking I'm margins, quarter, that had any the from just up in NIM a I was I'm regards accretable about discussion

Wally Wallace

correct. that's Yes,

Wood Lay

Okay. quarter, little Is the is And then the loan the for just -- the rebound sort in that fixed function to the tailwind higher? potential of repricing for margin second the a a the portfolio to of margin tailwind that potential there?

Wally Wallace

No. and driver. we we models, We assuming put that -- get we that's a the primary Fed really in week, are next our -- modeling hike are

from across XX% pressures So, January. our week, loans Fed if move will benefit that the the that hikes entire base we'll next deposit our of And the lap float. then, after the

Drake Mills

that's Woody, XXXX. hike time that the budgeting this we're at in only And for

Wood Lay

Yes. from All Thanks, guys. right, that's me. all

Drake Mills

Thank you.

Operator

currently for of back Bancorp Thank questions. Woody. remarks. Mills final to it there no It are Origin appears Handing you, Drake

Drake Mills

First you, everyone, for off, attending. thank

I fortress to we quickly we think that growth our went company went through balance want is build a built, loan/deposit BTH process partnership, the amazing. Pristine highlights, the relationships was sheet, talk credit, a through, a sheet, from that real balance to we process and focusing we've XXXX liquidity. we on how continue the about better what

that in 'XX, plus deposits are our loans Texas growth XX% excited is coming XX% about We Louisiana deposits, East are on. really with in partnership. Strong story of in Texas, the Texas today

added We've McGee started the to Wally where or and J. Wallace, are at to team, strength. and have look we William forward. moving Management Wallace, really today Derek

of to best on for, top to going the put work bank that. performance America Second in we're

better, growth. always we'll us to and continue, core but technology in invest people We and to also continue make deposit

it. I else in do or confident. I this, am with replace at a market, different us In look wouldn't us I extremely put my someone I as career, So, if could

footprint, is confident though organization. we So we're in in confident we quality extremely organization, where even where this the interest trying of we're this have the in the ability. are, I'm in doing, what past. appreciate our times, shined I this our

being and for to quarter. talk Thank call, next we'll you you. on Thank you the

Operator

shortly A and made call. concludes a great have Thank call. you, This Thank day. available today's be following you, today's Drake. replay AVer will

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