OZK - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Bank OZK Third Quarter 2020 Earnings Conference Call. At this time, all participants' are in a listen-only mode. In a moment, we will have a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] It is now my pleasure to introduce, Tim Hicks.

Tim Hicks

morning. Good Hicks, Bank and OZK. Tim Investor Director Administrative for Relations Chief am Executive Officer of I Thank morning our and for participating you joining in question-and-answer our session. call this expectations, make In statements today's we outlook may Q&A about the session, our estimates future. and for forward-looking our actual to comments management to projected from results more or release, filings and risks in and various those by statements. on outcomes the earnings factors public such or that for refer Please other information may forward-looking implied cause vary

questions the take Brannon Chief our to are and make Gleason, on of questions me McKinney, for Joining the if at of we have two Greg the Chairman call To Financial reenter George ask a your Real Specialties COO this time and use Hamblen, Group. and CEO; most that queue Estate time and questions one Officer; President limit follow-up to for any then or we'd efficient your the needed. call, you please

We your will now open for questions. up the lines

ask our Let questions. our to for operator, how remind me in queue Andrew to listeners

Operator

our Stanley. first Morgan line Ken the of question from comes with And Zerbe Instructions] [Operator

Ken Zerbe

Great. Good morning, everyone.

they're instead most middle to of or of other Do guys think XXXX, which differently? the path that peaking that the a great job going talk the portfolio. I trends of in follow credit You you right? they was banks actually do non-RESG you could losses about, credit same in the portfolio, is are talking the should in hoping, perform underwriting such RESG about

George Gleason

those our extraordinary best complexity, their there. best would best the relative attention and is are well, various they banks in way of all indirect I underwrite What portfolio is aspects care George them our I of you that's to and community our underwritten, Gleason. would favorable. size standards get lending Ken, to that documented, is forms underwritten you the as what that, sponsorship, Because we loans. I an tell believe and structured -- tell RESG level collateral, its best that bank loans are related this to our of process in lending most would best

quite low thoroughly documented as average. we are as So, think much and leverage as or than better they they're loans, RESG while not our serviced quite

not a period So, loans, of of that charge-off our portfolios net public last having company a the charge-offs industry standard. XX time that years industry's to but of is are as the outperformed ratio the averaged the over net secret year very just conservative result having one-third now RESG every of XX-year on about to service a and of all our our fact underwritten and

these we well portfolios So, downturn. in think the perform will

designed economic underwritten adverse portfolio aggregate and environment. of and challenges to was Our a the rigors really very withstand

have net portfolio policy loans at it So, at additional to they know because so modification will Tim, I our pandemic I action, our percentage COVID we high correct? very be are when that numbers we feel will government September dropped six going deferred we very received believe environment. that June Clearly, believe, to this specific well cases stimulus, forth. and from XX. those peak of rise, don't that exactly dependent or charge-offs expectation for like prepared upon are a how much is was of I a XX X.X%

Tim Hicks

down X.X% that to But peak The the in highest was Yeah. actually July. was incurred actually was our the… peak highest

George Gleason

X.X%.

Tim Hicks

the the end quarter. …at of

George Gleason

remaining expected as so. in to continue vast off majority we picked obviously deferral coming will of the pay and of would just expect they and deferral the majority loans the perform and both we So, have back that do and would, continued to loans vast up are right those X.X%

our will break low we're We that leverage I'm some to environment. But a -- charge-offs. any sure a will very losses confidence encounter loans of this have not we continue modest we'll So have when us seeing be that at do gives emergence assets lot that of this economic time, our significant in problem.

exactly I So, point or to know don't But booked of exactly is the first know difficult quarter, I three has the quarter if more very portfolio designed would. and third would thought I situation, the and that overwriting and through in like quarters, pandemic with going it what the resilient idea be been don't line it or has the high quarters first be. of a second important think And quarter it well couple performed the extremely performed is, we underwritten bottom environment.

Ken Zerbe

question helpful. And and That's remain think elevated Why the that other capital to this has loans? Great. that that said change caused – as pandemic likely markets loan of XXXX could other are portfolio you more don't increase the or these are in taking behavior well. out in repayments RESG of George, a All I quarter fourth then, the RESG had. sorry just very I the right. the know you the competitors

George Gleason

a out March yield. on And Ken. the of in think risk in in and adequate having I to in of investment-grade-rated end short take the that. financial Reserve's has our April of ensure very and beauty the to action liquidity business the out model. There's aggressive created lot that's to capital more lot do people Federal on liquidity And where system up buy an are and many system securities having of get go environment created to quantities And there a the and to tremendous situations,

actually than taking model why is yields, our competitors'. decade the a been our elsewhere than typically RESG lower-than-average always have much or and particularly being are And just lower that our but other that with many banks quarter both XX risk than margins wider ratio charge-off on We versus our banks competitor QX our basis really, see in where our as X group, than have have if in which the and and ratio ended, less banks think, for business competitors' now for net much higher three industry's our we And the margin. loans competitors, last get or yet points better-than-average non-purchased decades, reporting. has our in -- much and than two the data gotten you at last our comparable created charge-off while historically been And basis widened point margin purchased we QX, I industry. other were

business that yield to spectrum are So lower-than-average our this who carefully sort don't the out of with it further further plan spread. thoughtfully are have risk designed and finding very and to in model push And environment, necessary credit to to get curated well-developed get investing, years, been the better-than-average people very business get has truly us over yields let risk. who and

model. So is business and our we've liked quality current think well. our environment durability very of always the Thanks, the Ken. We really model business proving

Ken Zerbe

you. Thank right. All

Operator

next comes of Wells Braziler And Fargo. question Timur you. with from Thank line the our

Timur Braziler

Hi. Good for question. morning. Thanks the

George Gleason

Good morning.

Timur Braziler

release sensitive Maybe Maybe quarter, appraisals in two looking coming five the online you specifically updated can most be Are those were those just back which kind on ongoing updated think as work basis those with And, of starting New the Thanks. last that through office quarterly you appraisals. How is? are process And quarter third-party values in? than geographies maybe information. excellent a commentary, that's cash essentially, mentioned broadly, more values? that at months hotel done that I on out. talk get is the guess, a we XX around color to recent flow are I going geographies appraisal the appraisal and to to get a XX you York the just process? in quicker not

George Gleason

to take that? you Brannon, want

Brannon Hamblen

for Thanks question. the sure. Sure,

with really before it process there circumstances, COVID, this, relates degradation been and past, impacts numerous the get it the as we've the at leasing or in that, it that once something markets appraisal RESG if to property in every portfolio other, material were As the we point. at we had least in said doing advent re-underwriting as continues of COVID appraisal we And process, then of and been. types. re-rating And negative around an even loan that have our in or would annually. the changed has delays, Obviously,

that done, of up tends but appraisals a result it's as to so, And normal that, being year volume with still And of are the it that course. reflected respect most where appraisals in in new market have done, is multi-family. The to on, been probably type, appraisals we this property comments do York by been where business. have reflect most New our have our

that to mixed, on results our a are good of going in be a where is and any what I depending job within are do results is pretty but explaining the staying is, is, terms moves there, loan-to-value quarter, think And we it pretty range. tight So the it of similar.

these appraisals Obviously, we of up, us. some Many LTVs, by coming some down conjunction a affected XXXX as with as of was extensions. and origination And noted, are we've a extensions. principal some loan the are for honestly, year loan big maturities that and, collect in of pay-downs result are are

be to values extensions those loans in going a any quarters frequently offset decrease with of is past noted XXXX so a in extension, those as in for appraisals come time. pay-downs appraised point at lot occur that, occurring So, But that situations. principal of and that in coming that lot we've up may

forward same reasons. a see lot we as appraisals, continue all we'll in future So, quarters move of to those for the

George Gleason

comments color me of Timur, that. let excellent And add Brannon's on couple a to

expertise all country, leaders to in with particular are that, the want clarify on expert, we're or their using a appraisal types. property particular in markets, particular do I mainstream focus First, firms industry that the over

So and use all appraisal would major the as to firms, being mind appraisal top topnotch those. that line probably come we firms

property, that is through we arm. our services We won have within appraisal when company lending separate a to firm engaged a our that we that appraiser independent an of independent appraise unit that

interaction process. lenders have or So appraisal our in the influence no

we've that, values the those So mentioned all our we're kind not to of as curtailments we're is making the standards, standards on in loans the sure our lot meet top-quality of seeing engaging, professional one within appraised separate make using modifications reasons as expertise appraisals that a the firms. extensions Brannon reviewing, loans. company of well that that is economic and of we've that, sure we're in-house would the you structure condition appraiser regulatory own our created quality expect got given paydowns significant with getting degradation and

up improving. off based was if we would appraised because appraisal are – is require an curtailment value. for probably what loan-to-value three comments, the we the but have for was you're So in property such comes it it a our renewal June appraised interim healthy over originally and in what we years this to That But knew comment that sizing – we of our COVID loan in our was than renewal, hitting. million basis, parameters and loan lot that two we not us calculated standards the but within less or such and loan-to-value be that. keep XX, pandemic And management up with substantially frame the and of up to part that standards half old, COVID appreciated our the values other that down, that times $X expected. Values number you million dealing on knew by captured, as that that be, weren't is an it's because was pandemic at the property addressed first market were that was to and over The it of time going documents, conditions were a because then reappraising the and come of hit. that, $X driven years

it reappraise on based You that.

would ago, three what as not hit. one you been You're or the you the have quarters were pandemic value before from far years two from as it had value appraised the

be So reported in previously with than much resulting expected. to are what loan-to-values factors in closer being loan-to-values that – is naturally line those might our

Timur Braziler

color. then gears you. great Thank my shifting expenses. And question, Okay. to That's maybe second

talk making new stay-at-home et operations, You you cetera. technology, your about on thinking how environment adjust staffing, branch is the

growth do expense that As rate? look does what we ahead, to the

George Gleason

talk or out you to lot you are adding. non-interest shot Obviously, to that? expectations a want various But at minuses. take of We're expense our about in want Greg, Greg, taking aggregate. pluses Tim and a the regarding in there staff and places

Greg McKinney

do that. of sort Yeah, I can

in I two are places We looks at lot that is calls, got not the we last good right right where QX have – sure more part don't our run have expense think indication of done work operations that, right a think rate in as that we the as pretty effective, in to least about three you or talked we've a the make make the like near-term. more jobs, of our efficient, team. people the the and productive we've of doing trying fully over people

or there the – quarters, improvements four last we some I and as three So enhancements we – have guess. over two made or three

headquarters Our new second came the during quarter. online

about run in that. full a So, the That's now. rate quarter talked we've

QX. what your seeing So that's in fully into you're – baked

I at QX our two starting we and very as for quarters, next So three our is least around me, to results overhead really excuse point look or what this would year QX. QX, QX similar good of a our I here part that. the the what in And first that, and – for in think see thoughts in at I know on based point very or look you expect I and think at to next

Timur Braziler

Great. Thank you.

Operator

line And KBW. next of our you. with the Catherine Thank Mealor comes question from

Catherine Mealor

morning. Good Thanks.

George Gleason

Good morning.

Greg McKinney

morning, Catherine. Good

Catherine Mealor

We've since and pandemic, given reserves. and of that are of TDR, the Act? it talk if dynamic Thanks. maybe just talked can couple of past modification maybe weren't you and level have for a that restructured deferrals all before less about the considered been the how been the about over for quantify you the seen quarters relevant interest But, CARES you've have would ones loan

George Gleason

are very TDRs Catherine, to ever are we do and we reluctant just that. strongly to – resistant are we

I a that's from a TDR, few way that with loans So inclined the qualify loan and as TDR up, out, and as the going sponsorship modify our pretty and books. it TDR. loan be call so you if to don't on the forth, that it And and not because have We're a as reports it's borrower move we to long-term noticed deal to our very want TDRs. can't much Qs blow

-- XX-day thing do, lot banks the filling good payments CARES liberally deferral extensions guess six-month were granted of we because TDRs. of I and these it about definition doing days by XX a resistant or not created it. for two modification Act And So, to were was those that a pretty a very

to has the to secondly, it. approach impacted then thought think an customer but that going extension constructive be going they then if we XX not impacted, a they're went XXX-day addressed extension that ahead a be in under just we were Act. through just that got not -- was qualify and be by pandemic, was payments for the days to and they XXX if them Our way. or CARES XX do extension work affected default we been not manner if a to out, They've were to they a successful, And it or of would proactively it and help didn't thought then going we at the were that grant

not So, who thought the be way work what we in tried we've impacted. been a people to CARES done very, I where had helping think, successful excessively ramp appropriate truly and short-term was the through extensions the not we to would not we've addressed them not they in these. We've been Act situation customer

but not who pass were not they to the matter point of is granted impacted vast majority had the the problematic, even Now, and of the paid we but defaulting, probably probably or truth have by we to them were people the that pandemic. become not of those granted have would would it impacted

our the largely where think, portfolio resuming from evident fact they quality continuing our I loans modifications off the is CARES and rolling pay picking in perform. and So, to and are that are just payments up Act were again

we optimistic continue. will our will continue we're that -- So, that and cautiously hope pretty that

extensions, had loss my pandemic if two the six or a of on the very more required to additional to the in On did we typically and number and modifications dozen three in months equity go the need not who the to the a to commitment if game modifications going we rebalance and customer have months tax going has rebalance putting and where that the reserve way And some do customer thoughtful they the months want a be our equal who three we so to the or have loans delayed you're to I months, any -- op know because demonstrated up a raise of for with but -- those RESG don't we'll loans I -- continued future other months this, certainly said three for -- that associated extending and reserves put also projects. of payments that so required we I'm it's we or put months that six in back We reserves help. has don't equity said, I insurance we portfolio meant then handled game in to skin an that months have to that skin to to customers approach problem. up more and were but

done and going any in going not we've think TDR. if or loans we've way material many and constructive a the loans as qualify very to careful I certainly that So, no we're do this to are been

Catherine Mealor

dozen modification Great, you've that's within have you've do you that helpful. RESG for mentioned you described? that as of the really the balance And a loans done like

George Gleason

Tim, as I disclosed?

Tim Hicks

Yes, figure XX. it's George Catherine, XX. to – It's referred actually

One them so deferral nine now. is that of on are there's expired,

George Gleason

Sorry, I it. overstated

Tim Hicks

Yes.

Catherine Mealor

not right. too is about New worried you one just then far for now I That's nine that follow-up all versus on that's off. the right And York. and guess all XX all the credit is good main so we're market -- maybe

any York was that can the there? that there specific give in that and of other you're about is this projects showed anecdotes very projects so what your your market had that just of portfolio some slide office would But earlier anecdotes and in And market I chart larger Thanks. vintage of, kind and New kind your and helpful? LTVs. kind be low of health us seeing that encouraged one of think larger bubble about on that color I was any you

George Gleason

Yes.

those we've properties And in charts on reflected New is New charts. As in office that more the the and high market as five we and capable expect York on normal low four leverage they conditions XX properties to properties hotel those behind stand properties those on our and they're York properties will and and that loans until MSA bubble are those pages very quality show got XX sponsorship continue return.

upon that take the market a country whether vigorous is activity the the economic New we're probably transportation early it York going a got other down our majority a faster challenged lot markets than be certainly response is was rebound vast and the York's and the or legitimate strong will really much with and response hardest in city sense mass lot are a any job factor. COVID-XX. New largely And to agree And optimistic York. of New think by shutting slow in we long-term of not coming shelter-in-place prognosis to just of shutdown most But other cities was York than markets or a -- probably and market are very of that hit are to you the response New going it cause that realize dependent incur. slower. on to back too more recover a to really and come and York. than resuming that to really less New majority normal of going to New I the that's recovered the activities back and longer losses York pretty aggressive really had It's We've and

through have contract. pandemic, do quarter a A several as or in issued we sign numbers of occupancy to certificate sales that enough, large are of soon our contracts. have and sales get to interestingly condo continuing closing New issued of as We've continued lot to should of the certificates even occupancy under start York have that projects should the of lot sales this Now volume their financing. projects got

pay-downs of and in contracts pretty is So to of that we're through resume once pay-downs which projects going year significant in New of of really next reasons our the QX continue timing completion York in lot the elevated properties those a are have one expecting CO. place, to result quick sales

market. a of at quality We but that. we're pretty activity We understand So pace is the that, our seeing on continued it encouraging. is that acknowledge asset challenged slower and those sponsorship a

Catherine Mealor

quarter. Great you. Helpful. Great. Thank

George Gleason

Thank you.

Operator

Rose with And Raymond Thank James. from the question comes next you. of our line Michael

Michael Rose

Hi, my questions. good taking guys. for morning, Thanks

status might wanted some then of some if be It LTV mean activity. there's of Tahoe at First, the I it next It about Is been point concerned just like that non-accrual off could moved on other an you to this the continue Thanks. be the quarter. over couple or whenever resolved seems about? I sales or get and that off credit these the like optimism update types below property trends may any come property. quarters generally watchlist speaking there that any looks XXX%

George Gleason

Well, mention year. that last special property on Tim? Michael Is XX Yeah. right, until or list think the January was I that December

Tim Hicks

It was year… last sometime during

George Gleason

Yeah.

very behaviour result fourth on customer It's lot we wide-open fact the it to expectations United think golf from was improve we in the about property velocity. in on be and lots dramatically similar of States the year it mountains changes continued a had lots concerned is have sales New tremendous it mention from upsurge lots there in sky, pandemic. into course lots, substandard experienced pandemic. edge has the resulting of has to it a spaces, of in We Year going and I the the based were It's few the the its big and quarter that the fortunes properties river. that all last air as took sales a of demand on over special open of the a had accrual that property And has course this a trees, of and that in accrual.

that this lot lot each has and year quarter a in of sales prices up. resulted lot the easing of So have been in

were if build got story essentially all I products. contract had vertical I on vertical product to lot under moving that correct. the have think sold they're -- is of the I they And they sales built high just and a price new if record a

the outlook. a loan-to-value on to But with It into accrual if our and substandard continue I from last below velocities positive sales At to then in would accrual hopeful sales that books. continues use and improvements product resulted improving end to quarter of increase mention substandard and substandard XXX%. be this a lot we in tell their as a there on the the continued are watch will the time. in you see agencies So special dropping the at optimistic and we rating accrual and then phrase conditions pricing from the of this then pass demand for point, that sales translates to we to that move and over pass that -- vertical to have

on So we need could and -- since rating and prize there but quarter based what's a the big in we but contracts upgrade if certainly positive at figure for trends continue, XX, going that direction. be we place last continuing we're very to we positive in see on to the if would end trends term it, on outlook place continue expect project. townhomes sales is And appear and in see moment progression to there The before in those is willing what quarter and situations. least this lots the and the see they current now, give all a the the steady at you happened of continue were longer footnote in positive the you to the for -- can what of in that

Michael Rose

know perhaps book. talk balances You believe Can you to the about the that Thanks. don't I about little that, Got any XX% terms in management the you future I was. therefore target follow-up to of share? more it. be keep us want is to in comments, restructuring would XX%, it color between these there inflecting foreseeable you And in would talked change changed? in continue in Just a What's and the the – is give my pricing, do to color And and you as expectation expect marine there? the be you've mean of it in market bit trends RV second is I quarter, helpful. the lose the some just in sort done

George Gleason

some frankly were lot the at business space good not running is last volume, of an my business. as you, good good relative But absolutely getting as originating have competitors just our lines guys, our quality, we And we And in and of have tell other it they respect. what of relative year. I'll that And our some And other our looked volume profitable at I unit lines team of to and was a marvelous business. us. said, for some Yeah. great were to it they this of yields. of

scores that specifically on CECL use we around have of guys. and can credit ratings as We down. risk great how really cards. our a we're paying get analytics We were credit in or confidence even we to credit or our got and to pretty And you credits. tens of part our play out dialed had you part equipment loans quality. important to opposed while figure unsecured or in margins to future. built looking millions evaluating And had this, a consumer And consumer improving we've that premiums in dealers But recreational customers our HELOCs rigorous loans, model for who risk think on our up, of as at maintaining, these

space FICO and model model, we is experience. in it really and subject. lot have we've analytics So that behavior get who built on that and concluded FICO risk we've that more the performance doing study volume a consumer our of get in spreads back-tested another more built the and of actually FICO is that's this Anyway scores. doing predictive of focused customers And we we on we better lower But and concluded and are. a on predictive take strong dialing and with and there quality. going had after were And lot or than model scores. And against be scores things And equal can that. characteristics of credit what

of back And sort the compare that this. So the reengage. And portfolio. of enough performance we've from test we're to ready our really stepped time all took and now, market to with done,

performance for the But good. And was going doing perform year We're improving think forward. what in thinking equal yeah, we're basically portfolio longer this get future the to of to help maintaining It do And we while we'll But were. of negative quality. miss going or are to term growth better. space think quality couple going and stuff were this no is takes going bit. we we for take reengaged premiums, what And fact I'm we're volume to have the space. a credit a be we we're that dealer going and with we the momentum. better going of spreads, which can forward a better do, – to that come out think we of our mousetrap, think than quarters. the key were if we We strategy, XX-month the the we we and Now, volume. nine, to It's time improved to space. business But back all have network, is a a or quite is, then build in and years taking for lower your looking originations this we producing a do. will even But right think to from better thing kind going have market. from that to positive reengaging hiatus we better implementing benefit build And

given given. detail have had should I'm more detailed the So I we than probably more That's my that's where that's wish than guys' probably are. I but bottom-line.

Michael Rose

for I Thanks taking questions. color. appreciate the my

George Gleason

you. Thank

Operator

Thank you.

from Our comes Scouten the line next Sandler. Stephen of with question Piper

Stephen Scouten

New referenced City. the York exposure and commitments, exposure loan-to-cost numbers your everyone. have that you much of is overall? I'm the much in York wondering XX% have do in $X.X City any have of in on billion any around that market if how data that versus if the morning, for how you some there you George, -- in you condo Good Hey. New

George Gleason

country. I finger tips. condo loan-to-value vetted York have that we've exposure in there. But – there. But is We've don't got tell call our before And similar it over condo exposure the gives New you, other would out But exposure I markets. our don't my to don't he on going the is to markets in call I Stephen, not all very not Brannon condo that have to now. want probably give it got have data I data don't in it. it And we could I'm – up

New second the the York historically is has and business. biggest Miami been

deals everything in almost We're for except -- reload to paid off. a portfolio. we that is trying Miami of couple Although,

very York part around loan-to-value, of biggest country. the loan-to-cost markets New yeah, they the to what they in are So it, is similar other -- are

Stephen Scouten

great. question or loan probably just just in the maybe growth Okay. around somewhere be range, than noted is give are And trends. other to so $X take. billion know really XXXX, I paydowns then, you only little higher Great. the a expected

that production guys Just And within think that there's what available of also, you with might to that. scale of opportunities sort guys if you capitalize larger wondering, capital on can today. you RESG ample think of kind the any you offset still you have kind

George Gleason

be likely be the capital. a yes, I to use I will that and got do year. We've what in and to do -- payoffs tell larger tell will you hope opportunity. a think that be on is, capitalize that quite Stephen, XXXX expect record QX, would ample our bit we and a prepayments you payoff grow portfolio to we we

game the four, been occurring high going the we've opportunistic. are that in be grow a a their RESG treadmill the performance like But, to headwinds able portfolio, quarters, economic have the of this aware treadmill in speed three rigorous put and any bunch other and and We maintain the sponsors payoff an turbulence, fewer book sponsors their it, been the have quarters, run is transactions that times of and cycle. got to other their lots year quarters probably to, in being environment. they game full next lot We've our construction of going the we've of light volume had quarters repositioning and getting past, to business to in are first to would portfolio. or to development. RESG executed in very historically, of restructuring normally payoffs our that assets lenders on to payoff next the that out certainly, a where payoffs way four are we've and or of because running on or We're participate on continue quality to would pushed and are for in grow the And without of five again. grow of try we've play this So, for our pick got in five degrading new past, have up of from into credit continued have guys quality keenly also there to environment three to guys A of here, payoff

the guarantees got need good They're that are So, management got to top hunt but Brannon working regularly team. I make out, going us the achieving this those RESG, and goals. comments, The we're good the XXXX. that. great pretty hard, we in good projects here, down opportunities Moran, to to be a on get We've is QX feel important about now of said leadership line think sense do economy opportunities early with at on by capitalizing that working our getting Mike that as we for on in origination some sponsors. at guys even No RESG, we've the to on coached find quality hard and growth

execute, how about cautiously challenge quality And some question meets being So, that, earning able growth our your coming our decent it if big point generate we standards, But, the generate that growth I average but is overcome we'll and they standards. are are that assure standards meets we generate on meet doesn't to it in you our that won't growth payoffs now spot see optimistic quality is the that's to that. assets. but

focus new the that's So, us. for

Stephen Scouten

the Great. again. Perfect, see out Glad perfect. you George. guys credit quality to proving strong once Helpful,

George Gleason

Stephen. you, Thank Right.

Operator

our from And Montgomery. comes the with Brian of question next you. line Thank Martin Janney

Brian Martin

your just of kind refocus been see last quarter and George, wanted an where kind RESG I have follow-up about, to I and Hey, guess higher? good is that guess, pipeline. what the pandemic given to start conditions talked maybe the morning. just that trend originations given that you of question, you each on year, down this expectation, Hey, get we to on inflection I point that the the just, there

George Gleason

$X.XX Brian. billion, at RESG $X.XX page and that to were to was Originations nine $X.XX as in QX, went hard make working happen, our We're down shown QX on billion. management in billion, comments, of nine figure

would not lot trend of definitely that and again, because Now, we downward we've be like $X.XX number, payoffs just to bad for billion a of is instead got but upward coming. a terribly

we So, again. And do you we hope and and just we're improve do day, guys on motivated quarter going in number. to and goals they're working can go every And hard that highly got it every work week, the ability to demonstrated that. those the execute achieve the to hard to every have past, month, every to

offices So, around the and I'm of guys then in Mike and our be origination it. the and country, capabilities confident can it of and will the absolutely the Moran, our Brannon think originators. done, absolutely their if five leadership for RESG team, gotten in confident I We've do

Brian Martin

you. Got

Okay. And just some the you comments in guess can look just recently, just, about up positions any where was you and then I staffing on maybe adding changing bit, color talked here. give wondering if little beefed -- forward some a as you

George Gleason

XXXX probably. XXXX, in fourth of There through with numerous every that adjustments company all company mention a office the the of officers. we're quarter from the I've to are the quarter and of in third visited But the group changes too making

took with and the day. in offices it visit in to that every us we spoke that XX that office almost the company every employee months present were was in So,

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deposits experience. alignment a enhanced think just we really and are synchronized And one part I achieving for the of only been customer in X% XX-plus we as business now of single-digits And we've of greatly has that they're different channels All process process. customer the years tremendously even with last of and little this that of X.X% kind just the XX our that customers comments our to a and largest be total our mid-teens. to those deposits XX%, at mid barely was have -- deposit quarter improved and of in the X%. over have And deposits brokered deposits end the management fact quality that they're and a we has bleak our were the XX% it base, from is of used of of reference of down done the total

and funds of it cost -- down in significantly. the So, you our see coming

think, model model much skill in and a much I got I'm making a community those the those for online doing who shareholders improvement McClennon, very Wolfe of are is much with a lending, bank we Cindy people all our all commercial work hire And our improvements lot and we're re-staff were and the for had for having model Carmen So, and community and great technology eliminate huge old perform can't job sets more our just teams our Alan that retail and our the proud more mobile good new Jessup, and we the of we're really sales-oriented. future so of positions to customer here we've making bank lending excited and doing that of -- new people And that They're footprint. think in in that they're to and more and that's and about piece it. a bank we're and that. reality in and to

to a of of gathering process data we're effectively ton continue see continue durable develop that our and funds we'll customer our areas, using more that. and create and stuff that's sky and model then, big the risk it more doing availability much and increase, and puts much of more so on and funds the around so much And going forward longstanding areas. a and relationships our analytics of so cost limit for we hopefully, the our part we're governance and to potential So We're that because is data obviously, technology it.

hard money that level. as trying the every us. We're of we to a on for So I aspect resources. world-class, returns lending and top-of-the-industry on, company known to sure we're indirect And things good go to I that really every -- that that and Group to could is generate some those Estate that's going our lot our And on as we're world-class really really make Specialties think spending are we're make part our and of company sure standards. working but have rises the group of for, Real some most of

Brian Martin

you. Got

for last about me. but just I or think talked And when you that note? the just credits see substandards you Was substandard we quarter any already classified notable of already, the for Okay. change in was you? Thanks in the anything there special mention – this one color. the

George Gleason

Tim, you want to take that?

Tim Hicks

– Brian, were you mention? I or special asking you about mentioned were will. – substandard Yes,

Brian Martin

Yes. gave the substandard comments, the I guess, it Tim. looked in like you color some on

last just just – either So guess, be would you way don't I if I classifieds criticized, relative color that quarter on it's perfect. any to know, could just and if give

Tim Hicks

in mention Yes, trend absolutely. Yes, chart a our have quarter-over-quarter. substandard an as Similarly, was the a you mentioned, on we the trend That improvement special comments. do quarter-over-quarter. was positive actually trend

our loan at book. of we When some in a that had decent you our quarter-over-quarter. total look decrease was So portfolio, C&I

as well. we trends way see right the were those go to pleased So

Brian Martin

Okay. lot, a Perfect. guys. Thanks

Tim Hicks

Thanks, Brian.

Operator

Thank I'm you. questions. And no further showing

George Gleason

We on today. right. being There are further All call no so you all questions. you the much. appreciate thank Guys,

So We forward talking again quarter. XX our about with great that to days. you concludes a call. Have look

Operator

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

You may disconnect. now

Bank OZK (OZK) 23 Oct 202020 Q3 Earnings call transcript