IBTX - Earnings call transcript Q1 2020 | Independent Bank Group, Inc.

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Operator

Greetings. Welcome to Independent Bank Group First Quarter 2020 Earnings Call. At this time, all participants will be in listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded.

time. this At the President turn to Langdale, Paul I Director conference of Vice and Corporate Senior will over Development. Mr. Langdale, you may begin.

Paul Langdale

our Good be Vice us. earnings a President XXXX earnings for Paul The the Independent Langdale, related of you We accessed first to I’m presentation website and slide Development quarter Group like Group Independent at morning, Corporate and Bank appreciate to press would welcome call. on release Bank and ibtx.com. can everyone. Director I Senior you joining

see the would like you such that intend presentation results remind risks text subject of call Please are to Safe statement. may expected to Page Safe X include that release We uncertainties today I subject today’s statement. Page statements slide remarks to forward-looking the could and Harbor statements comments and differ. in made cause provisions be for of actual our statements. All are covered Those that X Harbor to the forward-looking to during or for made statements. by

financial note of are call, obligation of the In GAAP guidance made, results SEC’s we to a no guidance is included most these the financial statement we update rules. in release. financial publicly beliefs a measures will be about discuss of number comparable directly Reconciliations time and give that management’s considered if that statement is our measures at assume future this the Please guidance. non-GAAP to we under measures the to

Hickox, questions. end open remarks, CFO. Chief Risk will Dan the their our Executive CEO Michelle President; and our by David call Brooks Vice Brooks, David joined and and of Chairman to At Vice President morning Chairman, this I’m the Officer; and

over to With that, David. will turn I it

David Brooks

today’s call. Paul. Thanks on thank joining morning, for everyone and us you Good

had our The environment. your a the Before has hope a are Coronavirus operating loved ones well. to importantly, lives to take Most our and effect widespread like and results, on current economy. moment pandemic discuss daily I’d significant we and we address you our

have and employees, our on we During safety these efforts of to our times, health, supporting difficult focused customers and communities. welfare

market to for in pandemic of while customers our solutions banking quickly and help disruption the needs. one-on-one our all our remaining the work worked unfolded, midst employees of our their I’m to to company the with is available find As of significant support And especially we our bankers crisis. SBA to Program. the customers Paycheck how adapted in participating Protection through safety proud

loans our today position sleeves SBA to of our in small As X,XXX over and work have always uncertainty in over much weather to strength a I’m say, our their million our up received customers who roll business of we’ve customers. incredible willing company $XXX about to crisis, of Needless been for in remains though authorization for as face in teams unfolding help of the to storm. the remains hard thankful the put adversity,

liquidity resources. access Bank remain balance maintain contingent capital liquidity we through our strong and sheet ample both to ratios on and substantial

a dislocation has our for times. and teams difficult portfolio While remain economic with maintaining approach and risk working loan of addressing will well over the through disciplined reputation COVID-XX quality three our us This credit from served earned resulting decades resilient company pandemic. for minimize on to while by we’re borrowers results in stress the testing vigilant the recent encouraged our identifying our

who over provide quarter will And the results that, liquidity on positions. deposits our I’ll for some well as turn to the securities and Michelle operating with call as color

Michelle Hickox

Slide the that X note Please everyone. of for includes financial morning, Good selected presentation quarter. David. data the you, Thank

the income for share share million the $X.XX with or and diluted compared interest first the from Our $X.XX is million linked per quarter. $XX.X $X.XX from $XXX.X decrease was million in first first quarter or million XXXX and loan million $XX.X bank diluted primarily from down the in due million average adjusted per lower correspondent warehouse Net income and year quarter $XXX.X was The in the quarter quarter first or less accretion balances. income mortgage the share linked diluted for net loan last linked $XX and up $XXX.X quarter quarter. to per

due first X.XX% offset to yields accretion net to first one NIM five lower for excluding linked The year. NIM first funding The as in quarter. loan the and in point we was interest X.XX% with quarter margin to for The basis X.XX% from decreased all quarter purchase linked lower for compared from quarter loan X.XX% with linked basis quarter the accretion loan decreases to point railed income the for the decrease cost. the last primarily the the quarter

of on the Mortgage which Total hedging loss the million other in first non-interest revenue non-interest quarter. trust income negatively $X.X to $X.X decrease decreases volatility in to quarter. a a $X.X the reflect compared of quarter was linked market million of in million in revenue compared of $X.X $X.X million loss million This million XXXX by banking income $XXX,XXX October with linked linked $XX.X that and XXXX. in gain mortgage of the impacted $XXX,XXX included the business banking sale quarter derivative resulted the in recalled

a A separation million in closed to of the that the quarter a expenses linked quarter in incurred were well million the quarter. expenses last as related the Texas million $XX.X decreased of of quarter acquisition million decrease executive fourth to MOE XXXX. $XX.X primarily was related paid decrease to of in Capital year $X.X million the million the $X a quarter prior first related Total when former Guaranty a first to in as decrease announced decrease acquisition of linked compared compared acquisition as non-interest $XX.X is for the The decrease year. first expense from to the is was the The and XXXX quarter $X December. expense of in

tax expense to related new and First depreciation headquarters. corporate property quarter expense also was higher impacted non-interest our by

$XXX,XXX in was QX, incurred March. compliance was more expected expense acquired XXXX. to related was fees a higher in Consulting related $XXX,XXX approximately elevated Professional completed by litigation than with also project than about to that

FDIC the addition, by first linked due to increased to from XXXX the insurance and $XXX,XXX transition calculation. assessment quarter $XXX,XXX bank from the large quarter In

shows of as average March our and down pay basis Total deposits mix basis XX the down billion XX, index Deposits despite accounts. deposit cost XX quarter. interest XXX $XX.X of points in and stable first was XX basis remained from XXXX down during XXXX. the decreases rate The and from Slide fund bearing deposits were cost. of points quarter deposits quarter significant first the linked points term

of risk as our investment a Capital diversified Slide of to Securities manage liquid Capital XXXX. mix weighted company’s presented liquidity consists securities cash levels March portfolio Slide ratio. and XX interest comprised low shows assets XX, The XX. portfolio. the of and of detail risk design risk. bolster ratios and investment are rate strong capital at XX.XX% XX.X% tangible on to of are capital total X.XX% assets total help

I’ll That to concludes portfolio. my loan turn so the to it discuss over Dan comments,

Dan Brooks

from markets The resulting from at loans Mortgage XXXX Thanks pandemic. $XXX averaged continued $XXX.X XXXX. held rate for linked for warehouse the not decrease million the was $XX.X morning. including purchase ended December the Michelle. Overall XX, XX, to from COVID-XX XXXX. annualized grew at Good the quarter down mortgage investment March to volatility loans XX, for quarter loans mortgage the billion quarter December to warehouse due at $XX billion compared purchase X.X% million in

Slide loan our real portfolio. and XX commercial of the composition shows our estate portfolio

quarter XX.X% March from of up estate and XX.X% XX.X% the in As real which in is XX, linked quarter commercial XXXX. first declined XXXX makes of of loans the

with largest types CRE book Our segments the is collateral and diversified well retail. office in of in

XX breaks by retail Slide type. property the CRE further down portfolio

would of light Our an company’s retail Colorado. provide the collateralized markets XX.X% appropriate March The Slides in properties Texas extremely in loan of XX. pandemic and retail book our $X.X to off granular in is to by XXXX by portfolio relating be which our portfolio located impacted it XX, million. X,XXX on potentially average is environment XX COVID thought size are as the loan of we information loans off and segments portfolio additional the current In

Our of on segment us performed those encourage portfolio up will stress and hold potentially test turmoil. credit that the well period this teams have impacted tests during

undoubtedly COVID-XX were the impacts there from While pandemic. be

of our actively with across our the orders are We place appropriate and granting ride those to our borrowers providing accommodations other overall end, and risk and we’ve storm. will case-by-case Through X% experiencing deliberate today that working out help activity. To been the our be from deferrals where footprint customers. borrowers loan to approximately that temporary to sheltering economic managing we granted deferrals reduced basis and on a dislocations

these of Texas was regarding are our XXXX. hotel Slide in Colorado. can as and in of XX, XX.X% March either exposure detail hotel found located and XX. by our collateralized all In exposure motel be million $XXX.X motel Additional properties or loans

of these limited are service on hotels loans in branded suburban XX.X% Additionally markets. predominantly

the impacted exposure most segments limited such the We have of hotels. as conference resort and to industry

Our to hotel an motel book $X size. to and conservatively and value with XX.X% average loan average underwritten million is loan a

are hotel is recourse by and made of operators proven either corporate to rooms backed of XX% our guarantors. book or All fully personal the

Slide XX contains details book. energy regarding our

million held of of our total loans. for loans XX, were $XXX.X As X.X% warehouse excluding or loans purchase energy March investment XXXX mortgage

hedging Majority is in loans are gas XX% book of secured oil guarantees. of and E&P in do secured personal is loans comprised not roughly mostly by energy place and production E&P natural XX% those borrowers that of provided have while our have underwritten place Our assets. hedges had recently by liquids, borrowers by

testing assuming to does for scenario. assets month pleased strong million two $XX.X our to X.X% million material with conducted losses X.XX% we’ve at at this Overall remain of XXXX. the Over under indicate last at or metrics rigorous next total that portfolio the compared or the stable energy assets March $XX credit $XX.X we’ve assets our non-performing stress oil XX, years test December of total remain XX, been and total not quality XXXX confirm of stress

to $X.X and energy charge-offs estate to first million related annualized Charge-offs X.X% were increased X.X% the due for real quarter totaling to annualized credit. charge-offs linked the the quarter. quarter a linked in compared the over XXXX Net credit an commercial

by elected provision allowed the the Act, CECL. quarter loss XXXX defer we’re model. As And using to adoption in we allowance first of historical our our incurred calculating CARES

increase increase related general was represents increase over mentioned charge-offs an first $X.X quarter, expense million Previously the the and $X.X loss reserve. linked COVID-XX. the loan economic for from million $X.X The to of provision Provision factors linked for the specific quarter quarter. from million

X, substantially have to all includes different the for effective lines. estimate the under comments reserve adopted January that XXXX was this purchase for the one provision expense we to portfolio quarter increase loan would not day This I first are deteriorated to the CECL been had These expected be credit We million. million $XX morning. the CECL. Once $XX related

to David. over back So with it that I’ll turn

David Brooks

challenges Thanks these and by will The are has allow we the approach three confident to us operations conservative face decades remain that efficient COVID-XX challenges pandemic has Dan. said disciplined that for presented that credit the head-on. served unprecedented, underwriting well culture,

For reasons of just and the many have sheet. very described we confident remain Dan our balance the strength in Michelle

is value the turbulence in dividend bank footprint to across of earnings’ that our while market Texas. great encompasses strongest Colorado strength. markets helped position a grow weather immune bank customers we emerge of economic on us the book metrics great deliver assets and in tangible return or return storm lies per well country’s and share and ahead and to be annual has consistently will no Our per on share, competitive believe four the Having equity positioned and strong

In I and the communities can’t our resolve, hard roll customers do thank for and continue during our the meantime, up their there teams and work. tenacity dedication enough our being for crisis. we sleeves will this and to

closely future. our crisis is with to we and into serve we strength the linked well prosperity customers a our and both bankers, community and through tirelessly remain to will communities those of work As source this

join Thank us today. to you for taking the time

We open to Operator? line will questions. the now

Operator

Instructions] And Please question with first thank the Olney [Operator of comes line proceed you. Stephens. our with Matt from questions. your

Matt Olney

specifically and Want all to tell implementation, major can factors delay decision were drove about about the with you us decision CECL CECL what start else and was that what Thanks. impacted depending MOE? to this the

Michelle Hickox

it Michelle. hard CECL year sure of really right when Moody’s trying historically day, is working using they last of XX/XX year. got this that then using felt closed provision how opportunity a in model were comfortable QX between end our We did recording it, adopting through really the with our the point. to economy have feel out recording we to deferral and is when we we We make how comfortable to weren’t at we the will that the our stimulus that a ultimately Matt, to through model and more ideal option impacted model adjustments provision some week first the we were current end more get would on were having one it be and the defer have economic by COVID forecast, back every were significant sending quarter that we [ph] at and than we pandemic model take But an not comfortable decided plays been see some out The and with. this CECL and the rather using QX. to because to

Matt Olney

limited you that. understood. to that comments was I merger Okay, respect some appreciate the in Thank you when David, MOE. the December. around pending can I’m announced for then make that And there’s trying back

then estimate since [ph] loan considerably. around estimate [ph], loan and mark just world’s the was the that $XXX million changed I mark an obviously think was

just changes the for market could market this, MOE? how So the talk macro and impact the the rate credit that you can about and

David Brooks

Matt. Sure,

assess and But our continuing rapidly capital asset remain and dealing events unprecedented the and far and economic as described goes liquidity by as to with. as Bank in Michelle on of the COVID-XX we’re comments. Dan Independent ratios strong comment market We’re impact our all will quality the the Texas and I Capital. and - really won’t developing

Matt Olney

Okay, from last me. question

we’re the should filing dates upcoming finalized? the S-X to think that that include final the I would shareholder for When filing we vote. waiting be expect still

David Brooks

control. are have which and We of and our on don’t timing that an factors of depends approvals transaction currently on outside regulatory the other obviously shareholder update

running have this I We on Capital have at here. customers don’t continue care timing, the taking and employees update focus we These an and of time times, know and continued I to bank are focus Matt. Texas on our so on difficult our communities to the our

Matt Olney

back Okay, Thank I’ll in guys. queue. the hop you,

Operator

your the line Sandler. is Brad Our question. next with from with Milsaps Please Piper question of proceed

Q –Brad Milsaps

a handled comfortable your you on do this a color you if you book the provisioning more deferral out curious process moving there’s any estate on, reviewing what of the could commercial stressing around David you—feeling little Dan, just or lot know diligence how the I But to add is parts due that this of kind real did, quarter. book, just and was where – request, additional settled you against color more bit quarter?

Dan Brooks

Brad, this is Dan. Good morning.

a this the review relates have we ongoing commercial continue real to it estate book, always on As our quarter.

asset more specifically including did no in certainly of showing nation stress additional based provision each And across Specifically this the think evaluating the created the was classes that testing on Texas. we quarter for are stress in that. there’s we on that that

then think some further energy on motel, some give relates as I CRE those our of and you. given deck hotel we’ve to good and we it in slide again there as retail buckets’ always commentary detail

comments granularity retail the we CRE the you there to saw Specifically related think and some deferrals. provided on also some book, I there in

and as out ask oppose to think to us for importance to think a customers our deferral our we come I want that the as story. potentially a there Brad, and to know just for blanket credits in I of that providing on Specifically important ask case to we note, deferral

hey came to that and the to So a deferral. they your to your immediate understand if then answered we I’m me, have you’re a and back when been what tell like payment allowed sure Come kind have so had. about not fully which you said, issues We standard on of XX-day through them was have? time give based said, us to work under stress they would deferral fairly that question. can story I’d

Q –Brad Milsaps

helpful, like slow? deferral do to has feel you of pace request that’s No the begun

Dan Brooks

of the had push still is [ph] come some We already have It there in, while seemed to bulk an trickling through. development has those slowed. initial

Q –Brad Milsaps

a Great Michelle. and then for maybe question follow-up

quarter, on your Your what see NIM held PPP of the really side the core maybe for in well of of deposit the excluding NIM this just curious impact loans? opportunities sort you the outlook things

Michelle Hickox

through stable since significantly took related tell this to actually you from there. seen so in good our we were basis funding we’ve lowered I our fourth looked away February so tap we funding there about our quarter cost Fed XX Yes, points from And We [ph] really will until morning, I rates on rates CD NIM, deposit have our product. lowering costs again. so have dropped cost. out the that had promotional March success

pricing QX. in just be on to side I probably slugged the give while though relative a yields right is other going likely think cause at quarter, not on, were economic as NIM lumpy decreasing first given assets, our in that so earlier what’s to that mostly up on really point, ex-the to we really this of down seeing because from PPP the sort will environment you’re

It I be basis even think If stable. our continues happening quarter. points, a few could NIM currently the Brad. through will be what’s up,

Q –Brad Milsaps

jump all. I’ll back in you thank queue. Great,

Operator

the The proceed question. with next Please Rose of question is Michael line from Raymond James. with your

Q –Michael Rose

back announced to go when you wanted Just it. the to guys MOE,

bit You mid-XXXX could the guys impacts given pushed pandemic that out the close be potentially? sort a of little just of

David Brooks

Michael, regulatory we’ve update drafts just the S-X time on, and I initial don’t announced filed what merger. further the be proposed the this previously any on at have and the with timing the applications might

Q –Michael Rose

other what categories CECL? like looked that metrics the there the test switching color I Thanks. just it on around incurred Can the what to stress mean some to some hear. under motel stress for maybe the could hotel the portfolio maybe you which ran heard and give under both and and some you specifically Okay, like good is credit. energy of potentially test comments the of stress model

Dan Brooks

Mike, this is Dan.

all have and the that and built the that talk do occupancy granular stressed in CREs, appraised it’s size to case cash note on coverages’ important so our me and as book. have about that off process to the I think absolutely on there just of can equity book you is we portfolio motel would always a has the very been they been important that as smaller. We equity, that’s It’s – upfront well. average it opposed to loan Let revenues hotel imagine as us with

performing those capacity. well place plus were in majority credits XX% prior guarantees All of that COVID to with had meaningful vast of those

A expect come that on I was we so portfolio strong The but will service coverage overall them debt most before. think of in suffer, losses through fine just material that will no few portfolio.

as there, that categories, CRE average $X.X within has Again them. I you there the as footprint have and in expected same extremely is of COVID credits bit and deck. in for to those indicated well therefore in in the as those over our Their million well. was but there, more relates hopefully long XX% size portfolio time recall so guarantees [ph] the we it all that of loans retail business already of cash on prior have payment and the those you little commented equity we a do color. the a As performing and operators strong because all X,XXX course will to gives deferrals both been fine and There

Q –Michael Rose

it deferral is X% I in those this [ph] so mostly rate. Yes, mean, categories?

Dan Brooks

I estate say would has retail have. say a percentage I the clearly it’s we that real would broad spectrum higher in there. of whole across CRE loans

which hotel, book much we down I in as the had average think is most unexpected you US You’re current given to percentage environment. is the of as XX%, the XXs, are a the hotels in that shut that higher based not fact XX% on motel there. would expect closer in the The

Q –Michael Rose

Okay final me. and one one maybe from just

at goodwill just goodwill you commentary the process bank down. one thought quarter us we’ve the a And can potential the least charges doing other seen thanks. through take walk for or it, not release write around impairment in the press around Just language so,

Michelle Hickox

press goodwill. asking was, price like was to our in question comment the that felt a because out. our evaluate We I the So appreciate trigger where given that wanted point I you release. stock there to

do currently have that We have done goodwill not impairment. valuation this had point at a third party we that indicates

their of completed of not yesterday. to off all signed procedures had get auditors Our fully as

or recording it’s March so completed, back goodwill come is provisional this that not XXst. that could at it’s with possibility of we It questions impairment could changes up they and as end a point. So

Q –Michael Rose

it. Got for All my questions. thanks taking right,

David Brooks

for incurred come some back thing different different chose Michelle and but the I we right quarter current Obviously, this Michael the right then keep CECL our actual question loss model we was your follow was Michael, charge under why the on Thanks loan the it can question have incurred was I is point now. we versus there and charge model around versus that CECL. one as comment, model. of side-by-side think this loss loss have other understand pertaining quarter and deferring loss the Michael to Dan we this have make our which charge for earlier top to regarding it and to been could quarter, run for have the on to as model, in understand But entries. provision Michelle on how your and this material under now loss just And and our this and question model we’ll CECL right watch CECL we’ll of and so Matt’s initial quarter I the at CECL and was proposed think to we’re no top said much incurred incurred the quarter why

Operator

is your with Please KBW. next the The questions. you. question Thank Brady from proceed line Gailey of with

Q –Brady Gailey

to be is economic on additional January X. potentially CECL – that you the be I does on mark was a to allow on required and an close question guys and new more TCBI’s way have opportunity CECL then as to an you merger could wondering to would this for as mark backdrop loan delay. this potentially balances put the on adopt the put CECL if well the this you the still One to is or mark TCBI CECL effectively computing the combined

Michelle Hickox

have defer say decision on didn’t just that that, to would impact our really I adopting CECL, any Brady.

Q –Brady Gailey

thoughts You TCBI has happened, picture COVID there’s have lot - you or changed Okay, give maybe of a in and is it the the the just your us risk TCBI since deal? that’s the just lot oil you four maybe updated announced five David, merger? on months bigger both how depositors view rates, last pending

David Brooks

unfortunately any Brady. don’t morning merger Texas with update the have previously I just this on announced Thanks Capital.

as impact on on this time sheet the mentioned assess and income earlier our our just of Capital. and I are continue comment Texas balance can’t at We COVID on to statement

Q –Brady Gailey

Okay, all Thanks guys. right.

Operator

[Operator Instructions] Humphrey. the next Michael SunTrust question Robinson line questions. proceed from is the of Young with your Please with

Michael Young

the to ask the to question were equation, approve it regarding Sorry if would IBTX just Capital? one $XXX but from I’m curios required of more paid merger perspective. the the merger, on shareholders is vote to side million down to be or not be your Texas

David Brooks

Really as have and Michael. to are process said have which we is on question. ago moment in the and shareholder on Appreciate this, – really no view update don’t comment timing approval transaction a subject really on or an status or But regulatory that the that. I at approvals our

Michael Young

balances levels opportunities capital on just ask with to update of growth bigger to strong especially this of are likely looking forward to But Okay, guess at cycle? pretty potential picture then how kind about at and is you’re growth I I in procedurally. just kind the to wanted that be was now point there it trying an looking out in on get capital XQ, warehouse relative thinking

David Brooks

We Dan? had X. it was –

Dan Brooks

.X.

David Brooks

is going year company knowing really thing feel to next just now that have few had Michael keep growth what as should this obviously in we track we one quarter like X% into know good capital what months. and rate well hard for the that I excluding going we’re in that is this Independent ratios feel predict, uncertainty thing we to to of the so pretty But strongest look think like that our us warehouse about growth very ever and X% range in record to the like the over public we positioned X.X% it’s a mind and people credit maybe ahead. for

a balance of past being able us in the be times past and so by we in really market avoided clean case expect we’ve these offense if you uncertainty we our share provided peers in that to good sheet credit penalty get enable opportunities and time in and we’ve box to and having the terms clean In this these have struggles on speak, to opportunity least to to be as the will so with relative to the been regulators and problem well. grow that – the credit, at

Michael Young

I Okay. reserve maybe don’t and if loan energy? out on you motel, of the have hotel, a just of last few one And know retail one, the books called breakdown kind specifically

David Brooks

energy? quarter. Yes, added It’s on is this $X.X this book CRE, books reserves specific it specific loan long which specific there general we’ve a against the What’s and but are as just X% you we reserve books are quarter on this added that no there, some against those had the Energy at retail that the reserves you extra there time there. point. classified the to hotel relates added million no have the reserves or allocation one energy for mentioned one specific credit is the were that we

Michael Young

motel build book or no I right? of retail point, guess this hotel, Okay, but general been of there’s above for normal just at kind reserve the

David Brooks

point. this at Not

Michelle Hickox

Not – build pandemic the we for for But I economy. did say general the those. specifically mean the portfolios. allocated reserve it overall I of just to those was any wouldn’t specifically

David Brooks

both of charge also stress the model. we $X.X and inform going been bill about about for a we’ve the it to the the the And really CECL Michael portfolio took to some we have on were specifics general for work as hard discussion. and loss seeing under lot a the Dan loan provision Dan this talking The the been COVID-XX forward, think loss team about, incurred doing spoke that we related quarter, million but and this

out but slowly, how recovery. now, We expect six, we build model these We’ll or to-date seven this had said quickly, we need quarter-to-quarter. three as how with next Dan the loan reserve economy our of right slowly the over or as side of expect charges elevated to this other books. granularity to, come the any we the expect don’t those reserve depending quarters motel how we hotel, for the at loss indicate from on the of specific quickly slowly of putting as large portfolio, it today, slightly But time we

Michelle Hickox

of I note to so CECL for think quarter million day the total other CECL at the adopted we reserve is thing is loans $XX in would will some the had which have point. and charge our to we have end been one at do X.XX% that, the

David Brooks

it loans. and X.XX% acquired paying and reserve close haven’t have so, bps around we marks need. X% we’ve that Right that that attention point go we’re up with XX X.XX% while where we starting there, in adopted standpoint we’re obviously CECL our to typically feel had historical good does, to XXX says CECL we from now we’ll see under between from Generally it what and bps if about operating been of the any could on what a

Michael Young

Thanks.

Operator

next your is from with question question. Matt line the proceed Our with Please Olney Stephens. of

Matt Olney

million, core core the Thanks. for items. you XQ noisy Thanks Can was an taking the outlook believe you’ve estimated Wanted to in in few the over you the quarter. operating next moved that follow-up. once ask around quarters OpEx provide number number? on was that expenses, first $XX about non-core pretty I the

Michelle Hickox

that The and expense related item elevated was still in started QX from been professional some March doing there is I then do I would what so that because expenses significantly the We in already fees that’s you up $X.X do at will about due noticed which down that, go non-recurring million Matt quarter. then to significantly. for those were up least line know stop We was if traveling quarter to first is in project say in know and for significantly. outsized even compliance and Yes, think the it quarter to and QX had fees acquired a litigation ended fourth outlook that everybody have should quarter fourth first deposition. primarily

good pull So to a million I rate of million is $XX you I that QX end $XX at still the run got out those think it that still to expenses. when

Matt Olney

Got it.

us collections rent the and low details portfolio? from gave there picked back collections you very the has to tenants retail share new in within some you guys retail If Okay that’s details then your helpful circling in with can us fact was portfolio, any there. up about rig media the April, are great

A –David Brooks

some they’re right operating normal that, more – the period as but have they a would paying particularly asking and depending can so is interesting is think to me of in can many tenant Matt, back in on for you the is a to expected other been I rent, whatever we’ve a that in rent of don’t there, hey, I shut not expect some period deferred it to book does we some But it, for collected, those them there I stat to you’re that rents think portion and request that say, normal doors rent don’t cases had and here now non-essential add allowing still it’s landlords to now. we can to and future whatever some times or an have you I your return essential tenants have that help earlier here. about waived, but if a back stat XX-day are they’re in deferrals assistance payment and they’ll from year mentioned had adding the there specific obligation an is for businesses cases I were indication non-essential. just What give abatement. went the they seen have many helping as tenant, percentages provide fact you? help and that then when some you this more out if and them their weeks you of exchange for Clearly them it that where had business and In on taking a a you so still

Matt Olney

appreciate Yes, a Independent at core you that’s obviously that. the have like I helpful portfolio and Any done can peers us, in And the larger Bank within something been bank? follow-up, lot, a picked your give this a had bit retail for it’s guys bank, a a little in more this us give it core the can sound some guess as was while. Anymore you of on versus portfolio retail you history the something acquisition? background an competency, always

David Brooks

performance who at worked and well We slowdown there’ll these expect to been The and long Certainly structure time capacity fully deals. expect a that will be of of that seen for we perform bankers past. on We’ve we’ve and acquisition. here time, closely that them their Yes, that. the been our certainly something borrowers to Matt this kind those in in long business as have the and support our a through was had a you with bet. a have we the the is expect recessions that time, would that based I been equity this are a not be an to so on now. guarantees earlier these we’re last. at and built it to long as in guarantors acquired said that, a based way cash seeing But to have And

Matt Olney

you. thank Okay,

Operator

floor time, management Thank our turn concludes remarks. this for will session. And back you. At this the to closing question-and-answer I

David Brooks

are there If further no questions.

one’s today I safe, be in We really a every great hope bye. day, will conclude call. you interest and the Group appreciate Independent have Bank

Operator

This conference. Thank you. concludes today’s

You may for this at participation. your time. Thank disconnect your lines you

Independent Bank (IBTX) 28 Apr 202020 Q1 Earnings call transcript