Bank OZK (OZK) 22 Jan 212020 Q4 Earnings call transcript

Company Profile

Participants

Tim Hicks	Chief Administrative Officer & Executive Director, IR
George Gleason	Chairman & CEO
Greg McKinney	CFO
Brannon Hamblen	President & COO, Real Estate Specialties Group
Ken Zerbe	Morgan Stanley
Timur Braziler	Wells Fargo
Matt Olney	Stephens
Catherine Mealor	KBW
Brian Martin	Janney Montgomery Scott
Stephen Scouten	Piper Sandler
Arren Cyganovich	Citi

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Bank OZK Fourth Quarter 2020 Earnings Conference Call. At this time, all participants’ lines are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I’ll now handle the conference over to your speaker today, Mr. Hicks. Tim begin. may you Sir,

Tim Hicks

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

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

open for lines up now your questions. will We the

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

Operator

question [Operator Instructions] And from Thank you. from our comes Stanley. Zerbe first Morgan Ken

open. Your line is

Ken Zerbe

obviously First question, had you fantastic NIM this quarter.

forward may much remarks that. basis? So go of yields did unusual seem some is is it sustainable prepared talk both items it about that you congratulations on purchase this your that just how But non-purchase have on from quarter. Thanks. positive the and -- a NIM Can

George Gleason

million bit to that left that now. than to think what would right quarter on be purchase -- a on around mentioned loans, about there we consider we both and was in to clear correct $X.X bounce quarter. run of was wanted our that numbers you're Tim normal the Those more I particularly tend pieces remarks of a Ken,

work. off But determine. previous loans did -- that hard in really and status it's loans good that figure unusually great is job number to that some normal quite our the purchase special or to collecting can was or management on some a charged guys see good collecting special what's chart, you loans and non-accrual number that the an helped So up in previously assets assets on on were interest portfolio their margin in highest reflected interest our one on lift in numbers That that the a while. comments net of

million we of -- earned maybe $X again bit have whatever couple But it’s the -- or did a more of higher -- we it’s define So million there lift of and was paid extension and normal little that on player. did to million a is what define higher dollars, bit million couple minimum bit and normal short-term to hard a million portfolio. number on hard million in level interest maybe you non-purchase And and $X probably million, $X $X we normal level a normal million to but more is what again a you know $X $X.X fees the level higher then did than loans know is have normal. have dollars

contributor a even spread was that the those a NIM with So in core but and was healthy out. trend there the factors

pleased with were results. we were the we So

Ken Zerbe

I have elevated than have in been they probably then a projects just growth. longer COVID I I these obviously headwinds delayed the get Perfect Thanks. we some for far other read your of feels been? the like should good know comments do had it and what in release headwind payoffs the terms At payoffs, question past of and that very yeah that was the loan point

George Gleason

see know created we three in of projects had originations years the of you XXXX and big of the it out financing bunch we then XXXX financing, sort to pay-off you in the you quarters course will volume two got in and and XXXX completion headwinds of sort lot know payoffs Well payoff and payouts XXXX QX And a really permanent those a last likely of and would us to we year well. years XXXX, of in XXXX bridge lot quarters because began that transition pushed lot in still bit of a of the which after those were last payoffs in time and construction origination as because know financing, that of of shelter-in-place slowing payoffs the and orders normal normally table of a year we come that back slowing the expect takes in to that part clearly that XXXX. have third very out, of of quite from large reduced of a pushed level XXXX to a record have second

standards that's sacrificing the for year. without got pricing. to quality, a find or hard that loans that's -- our know challenge quality meet we So high and work yielding the good to We've good

pipelines to offset So payoffs we and hopefully can originate continue the and enough to enough to portfolio as full some keep the rich in our growth well. achieve not

a in pandemic an normally some XXXX overflow some, but will what get get from in payoff. this XXXX. we'll delight -- XXXX, challenging related will only get perspective we'll because it overflow be payoff unusually not from would we So year That's

originations a our really little originations challenge. a know ended the thing And XXXX. in going into year were the than even encouraging have in were Year. the bit the New the of XXXX they it's in end the with was at But we a from level. pipelines RESG And good all noise better good XXXX, we RESG So pandemic

produce month, changed. So it's every to quarter we've go got that and hasn't every every week,

Ken Zerbe

Thank perfect. very right much. All you

Operator

next Thank you. from question our from Braziler Fargo. [Operator Timur comes Wells Instructions] And

open. Your is line

Timur Braziler

getting is commitments re-engaging and in guess come couple and the Maybe seen quarters, looking at you within equation good other more are RESG, and sponsors past what the comfortable unfunded the over I side seeing growth of the through? growth, of indicative segments of at you've looking that

George Gleason

sure. question that? for Brannon a you want to take RESG That's

Brannon Hamblen

Yes that the Southwest are you there in to Sure, sideline. in, But COVID that of that they're call come -- about and we've California people's continue, know forever. lot enumerated I level where particular that of throw we projects we seen part are a the some and such in on markets east well. to talked those the -- strong -- lot Thank initial and see trends going with that South plans out we're sponsors as sophistication out -- Southeast that and gradually really is question. the markets to into as to COVID, you shock for activity. and continue trends is markets continued major We've Texas north that as the from historically, migration thinking, it was don't we've is the see to deal to we'll is, still still of Southern the of in lot through there the I but want the there aside are of think and deal is overstate Phoenix notwithstanding see there other the south, Florida we demographic migration some starting a Timur. a and we've we've and affect there the the in not

achieve that that I'm new a the some are still play is see that it So necessarily But demand how is bore struck reliability, have I things lending, there relationships of haul to going that in and - and a continue deals through think not we and comments the development and our so and game we stopped are and that we COVID waiting out. playing expect we're that lot structuring think loans success the going strong able coming together feel know I'm never that year quality here to for I tied there you that and demand there's -- - to not, there's always you really a our to everybody's lending with justify we to put growth continue the of to support the is long were we in operate is to pipeline. are and still when the not ability say that been that full underlying doing sponsors - they're again that do a our number like a fact undergird to asset we've here, long had that we the wouldn't involved we've

that good want southwest northeast lending leave the press can know Boston, good the to we a time So in So guys the as product as been York in the job our and been up really other I been in you lot out Baltimore I the Cambridge in probably that and we've don't some winning know some well trying we Boston broke the there. there, geographically but market, had out northeast first obviously today future. noticed the success in market you talked up know done some haven't type. southeast, they’ve that sciences deals - done two even as there market of as like come discussed of a others Northeast market. about in in D.C. honestly have we're Cambridge up proud It's life world I the but you have has you the strong and we’ve great markets secondary the New imagine industrial done given doing the in working south in some into Market demand what markets Very on a may and for nice to guys the in we there a pandemic our lot in the high gone that has

opportunities And product we're type for as hard we've into markets in a type well. got other So pushing other product that great there.

be originate we're So to pursuing addition, careful for very some in sectors idea space. It's of geographically that development. but the it you number the highest probably be type that and continues in developments. competition this to as we a strong, perspective. has most And of gives Multifamily property trying

it's probably there, place the right make time at we're strong with to see continue the origination the So right people. careful but right to we'll being sure in

Timur Braziler

Okay. Thank you.

George Gleason

you in distribution of of Brannon the of a was loans. the summary what of then in which And is see recap kind can lot that about figure XX, talking

things that that to just And new sense coming York New of a make there. it's has COVID impacted certainly, market. down for hard very is a been significantly quarters find number because

we and at one of we’re seventh at million $XXX most you out if Philly three over to active a and from services, year-and-a-half, list billion $X.X DC, range a it's years the Tampa million last and for markets in down York nine so But York. those XX. all and six, Phoenix look and the of had the in last on office which the So $XXX then is those Miami were probably presence New Boston are year, several geographies the or markets New growing what eighth, particularly and

the largest you of shifting. So geographies emergence new migration as see were markets, trends opportunity these and of trends our and can business sort

I make think where are deals So guys where and job are getting of our in great there. the doing seeing a are opportunities that sense

Timur Braziler

from Thank with growth, to tailwinds it seems how that quickly a a the fourth one-time at in margin. question, especially liquidity, And a do margin that down. level up some what provisions in continued from cash and follow higher with time guess of it quarter? Okay. about you Can deployed then it's with and liquidity the I looking guys or the going some with pressured be liquidity, given sustainable items you. got loan $X that as billion other be other of more the less headwinds that be pay these can bill, year-over-year, back

George Gleason

of cash last among quarters than the particularly the expansion of in highest kind had that or with we say just held. and where quarter of very we've just nice probably at in around cash we we’ve even ended and turn securities quarter would last and volumes ended the more margin holding least I couple more quarters would, I the margin ever and pleased the we’ve and achieved were securities held of ever question that very Well, results particularly couple

amount position mentioned was than portfolio higher of much the is much also cash being is it So higher year-ago. pledged the was. much than securities lower The you it a and it securities than was

work on year or or help those very much. basis basis if is - and that's basis or Obviously very you've XX lucky. really be months strong. when So in you're basis and - duration good buying you more months funds that position doesn't a margin less liquidity And securities XX you're if high-quality you're X in hard our points, in Fed points, may that money a are got that's getting That respects, all positive. points and XX - the points XX very very short-term are XX

has So We that's a we want position on source margin. but for about position liquidity need we're will have Bank. the quite as not liquidity weigh and complaining our liquidity know - that. and much continue that of don't as keep to a weighed a not strength to we're strong we I

So keep and that need have you to with manage it's you just - your money balance to it's need sheet. strength to

as are it's good were them. there��s level this open. is super stay wish the the earn on yield keep not flat short ride excited and incentive question. it do the with be about our of So [indiscernible] liquidity can things stay this interest it. I to and could investing rates keep you it deal a But there and out than that other curve curve in to would you absolutely just much in and little the need relatively at And you is low time view anything

Timur Braziler

Understood. Thank much. very you

George Gleason

Thank you.

Operator

you. from Matt from Instructions] next comes question Thank Stephens. Olney [Operator Our

line Your open. is

Matt Olney

to on organic seems own thanks relatively them, some and make want non-purchase back in back to right. the like segment in Marine, whether question. circle could level the of walk RESG, moving total I major I'm when I it and sure of to take drivers each the RV through some that versus just segments taking headwinds growth discussion XXXX commentary growth management it's Bank point a parts have its ex-PPP this thinking have Great Community for my want XXXX. step that about to the be loan seems loan but you flattish

George Gleason

for community on specific a flattish or those got I to that's that is quarters aggressive they're hold give and credit our desperate know or you out and little a helpful be that we're on to aggressive minimum been give right you, Well that. for on But very payment small hold Matt of what. and not loans credit don't a guidance up may segment color standards on on are we’re and there equity now not bunch giving to bank and more the that I'll know whether you we're our our standards banks challenging you and because give getting really down have very now, rate. little pricing And standards going very going

a back out capability, up. was takes you while build that in gotten good part So we the little business have of model, more and takes lot that retooled banks in a QX, forward business off, ever shrunk the year. the certainly rolling of kind so a business far while lot we you really lost bit six and used unit sidelines about that we've team data little Likewise to in built And engines the relate the months a cheaper a would always re-lap analytical get and because last once engines things the we're credit to bank direct the we little it year, strong sector aggressive last that on community decision. last and why have of when momentum that it than excellent competitor I less think engines our other the category shut lending get or and for were we a to I just about then on model capabilities And the and we most for better great started to that's more really the year there. be. or feel a which doing

momentum built up. building we're of in momentum the in the So Marine process

what doing going and think timeframe. for premiums we as you'll we of see Group and paying want, process and been But be there back high-quality less in there. But did RV is premiums think to good we've much of originating in to And pretty growing the hopefully - of and yet the pace pandemics higher there, will think what there of is kind will the be are and we’re be a XXXX-XXXX I momentum think has the I the spreads XXXX. good sort resume we I a quality-wise think we revealed that'll what overtime, than now that it booking half that. and every bit bit will better at were as positive is building I growth. rapid by I spread. it And of be what may booking in we it see And be in take see get lower to originating. Marine as getting going while you'll us what what And So lower quality-wise but we're every you momentum for

So not business deals and it's for not continue a the That I'm best we’ll more a it’s our to of to the year some XXXX. for of game lot through unit engine of has and in have half going around had going our to growth where probably that find decent growth guys and pay volume have lot idea or get then positive guys can team we've we'll somewhere plus accept equal talked back to the be probably closed ESG, net growth two simply some the first to the payoffs half a then will essentially forward. growth the numbers. for know and net achieve say the us positive we at you good deals And middle the cover or of to year. get time our the month volume of growth coming to have unit about source it large It next offs we’ll a downs can in I profitable get then just certainly hopefully we’ve in more that willing originations history us to be payoffs think less. in that’s big you there pay growth And big the I'm achieve much we same biggest with. was of wave deal need the got the know of But was and those XXXX enough XXXX XXXX and a in a growth the that point shot possibly of of just minus all the - go our let's or our from

Now they've got sponsors a and have with achieving good hard conditions work work. us in to but those to have market really of history and got you know that cooperate guys doing had

to and So them where to point that an the say know that, maintaining you we can growth. hard But high certainly growth have that the achieve of best we're really loan is I'm achieve to concede short because year and willing this a work best going we could not not quality know while we I'm exceptionally can't and of we just zero level do going sell they the so you have to at we can. case our margins payoffs,

business you're go to don't and you every go to know we and day backwards. we’re produce in going then So you're going to don't you want you to got a produce where if backwards

real working to we're forward. So go hard

Matt Olney

in potential asset could excess portion Okay of the less previous and want growth it years, to I’m levels to still what that's capital that allow overall a bank I excess commentary remain deploy I a curious a about thoughts material around bank buyback you also [ph] versus as for program great. call XXXX capital capital your share excellent. just is if and Thank The guess ask follow-up the then

George Gleason

time pandemic. in prospects because would purchases action had last turbulence and but some core gain those And some an ways one we to and opportunities. to as to materialize here. that of find That's our some pandemic the of we us the capital. one you amounts some been need we've economic item the [indiscernible] close on a opportunities And margin margin couple big expected time the the for know may internally from we short suggest But the and sure ready downturn one the to market significant certainly outset lot couple was to improving excess is a aggressive materialized of and to turbulence the spread the to be We resulting some we've opportunity - better a surplus won't capitalize resulted not good great rapid economic and had not very the share of articulated certainly uses quarter responses RESG. of had very allow to fiscal certainly in - have make and question would use is more in discussion look shortly created opportunities the hold of the But our I in extremely the opportunities. capital you Fed's that to that course spread yet that getting that situation of of opportunistic of We've utilize improve aggressive not a on capitalize reasons very quarters. which securities. last seem less of window more very and have that And where have at know of recent economic to that years most very policy and will pricing window reflected monetary that the has for be materialize in capital to capital have of those I’m

Operator

question Our Mealor next Instructions] from comes [Operator you. KBW. Catherine from Thank

open. Your line is

Catherine Mealor

on then Los you if they're I they office help charts in office like only in earlier wondering couple really just at a low really and Angeles blue. really kind but what looks could large course loan of us a at larger XX% and bit leverage the detail to can of of few diversity York office New XX figure of vintages a property the turn really a of little that properties with large the your -- I really picture we RESG portfolio if give love your bubble the think and portfolio tell

of color Dallas like guess higher just kind property think it up going a if was give needing there office a originations that you wondering anecdotal also portfolio which just year exposures larger any and was originated I I you of trend Thanks. us has in was credit looks LTV the some So on then could new to this kind this one, to your than that as move on leverage, or just new of be if average is and curious, the that's specific? a

George Gleason

in about then Let Dallas Dallas Brad I'm and the going to loan a that lender we loan that to mass me, talk And pies sponsorship lender. originated bubble Dallas LA office loan made throw to building on is add a some mass we and newly the the you color the that might that Dallas. base. New had a party to surrendered and want a York you the and building to in The on was

lender So taken the mass has that over.

but to sponsor higher loan our appraised a or little property. a to of that cash their mass in and about the my on to It mass. on position it lender new surrender the value decided the flowing XX% is defend that So bill is not

was going expected sometimes to and the I tenancy the, expect sponsor. So some of or that we asset enhance surrender we and And speaks risk I not real that think bank's our And a have this wow, our values and increase don't know choose assets They lenders and they renewal it the structure up to they in are the risk because appraised the substantial that and It the changes lowers that are it expecting how you defend the sponsors great having risk. would and curtailments actually world. to that do of lender. of transaction our mass coming and example. were in the banks this that's know quality to that estate you really they're the mass impact and the know would how and wondered buyer what of we like you for downs transactions. pay the commercial deed. of

down of think secured get very took of $XX $X or our a and sponsor, so we on on $X $XX the [indiscernible] first position our the original about like to we into originated when as the over $XX $XX then ownership about and million, is that the the million loan by the cash and now I about million quickly million curtailment on So - $XX all million pay mass or loan property - the the the to million net loan actual million out something all very, moved node acquire future that I mortgage part and and property got we've property same did new a to loan. fees collateral of our funding it hold get went improve associated away same as to the or least that with think at pricing and lender

it's higher than would - loan full it's only a ownership. is it's even So transfer leverage with new of the reduced and a do it is what a at connection that with sizably we right our the terms market a loan difference in loan normally was full but standard credit do that we exposure would

little that and the address a want So enough on in probably LA Brannon you office that's you to to York New might want more elsewhere. to that, but and might add color

Brannon Hamblen

XX%. tenant actually by or feet those XX,XXX XX,XXX quarter. the had already well panic another XX,XXX no our sure, New had square on their one that lease very office did York that job you good we We during with loans office you that George actually was and foot covering and Sure, mentioned, of expanded CBSA a exposures of leased in four we've it was about that on got

is occupy that but yet, is advanced one. working very So a that shape signed particular from view. an very of of XX% far on lease got building about another good that in our is that occupancy We've point of that not would

those and buildings in there. the two largest that's XX% I leased range believe. another one our So, got office We've are

bubbles largest a New you're for and is, was that L.A. York XXXX. seeing originated And sticks bubble out chart. there New are early our older big there So York one we're those in transitional it -- in that on It's the vintage execution. that then that

in complete. lease with deep before work COVID middle then is, a to seeing there that really that your process. begin be we're you being of on they're up But time it right the So that. $XXX them million know fully now to chart. what awhile And and obviously bubble happy it's you're that as big through the for for that's It'll

Catherine Mealor

this it would of really be the then a of elevated one of high discussion in see pay you color. know loan elevated, helpful question pay so that's earlier, that year, typically to given don't elevated in so level loan still is down And as see and -- have to fees we I'll we fees where fair And periods we time but fairly I be high should expect this XXXX? say downs that quarter

George Gleason

XX yield well. great and, kind whatever complicated has done you'll few the lot generates payoffs and the payoff well and pandemic our two you of as lot at what than loans, a maturity year the you months financing if a projects and complaining is in or kick That's loan advance faster delayed as fact if on as delayed it's faster they're they know projects, months were and that on about off in little six a loan three off construction on is loan months Catherine -- permanent paid for ago those number of unamortized have fees you recall a question a faster and was we boost in it scenario, the give paid paid the that were a off is, the of a fees been that a of getting loans XX and months

get maturity the and in it guys And have you you get permanent to day or close you -- the up or amortized day over a don't loan those the time unamortized been full into do even income little original takes deferred because loan originated extension over to XX the a last, a their situation, that end because You fees the loans fees the term. where life amortized more they've the in to XXX gone execution. loan, are that

income a or extra loans get that XXX-day at that. to that is do on well. doing the extensions, some we’re extra that some the extent boost of these extend, lose payoffs a extra contributed get end, what we you And So as XX-day lot now, fees for the

and lot We that bit interest so and on quite forth. varies collect of minimum able to are, in quarter-to-quarter some a a cases, from month-to-month loans,

in to lot of the So I that accelerated because of payoffs we to that's be recognition are lot to that from deferred expect it previously closer a to don't going going result in those juice a assume loans because in interest most fair margin net fees, that full would of than term our know extra past. XXXX of

extent get get where do the that do the -- So there's some on or finishing extra the some market do fees of XX-day those could we a us we that in a extension extra going To loans or of permanent to up end. them that less and of the we term bump the at to they're and generate situation. help some to in income on XXX-day process with process

it I either. plays to positive to a So us. have significant it's the that it's see a be complicated going answer know don't we're how is, to think it's out. I to and don't negative for going question your

Operator

you. Thank

comes Scott. question from Montgomery Our Martin Janney Brian from next

Your open. is line

Brian Martin

with items and Yeah. lower I of of on said George, work called out guests, deposits Mark this the just nice got quarter. still of you from the you done you onetime more some to a I just going margin the improvement on all guys have The cost the you margins. the deposit kike side. saw modest wanted some little listing find these think a bit out the

that once reset of these a Just kind of touch you for some items wondering out. we called lower

a little the and just costs to funding yields kind whether you go of can about and may talk what how some continue there you're takes you going of play forward to the loan with especially out. a puts margin lower bit expect as seeing just and If that

George Gleason

you that me you take want Tim, that or to want one. take one to

Tim Hicks

there we're of our increase costs level with interest to you I'll George, follow start had And our of last any the basis to the you a and deposits. figure We've deposit can XX. decrease. thanks of XX. follow Obviously, quarters points Yeah. spread the of core couple look figures until certainly if schedule very then Brian, through you on XX time have We gave maturity you're up a up on in for rate pleased it. couple question. of

very go good. was room to We quarter This still have there.

I few think certainly the quarters. we've next got in room

of time points over or figure weighted new and that look quarter rate, rate those fourth basis have quarters you XX, of renewed average both the was of If at XXX weighted basis average deposits in points. XX

room not in want much three, two certainly So in quarters still you not as the of move maybe down to QX and and moved as of and QX. lot next -- a quarters couple

- trend our book our mentioned that's as is think other We on that CECL certainly yield what positive call on in at prior is investment as previously, to the putting years, number vary the reinvestment look our purchase go little we some that core then our George yield. on yield there way purchase a a was the our a previous and into in there margin you the goes mentioned so years loans it’s had rate the quarter-to-quarter I from bond do in CECL as been the with difference bit is earlier securities we headwind obviously highest some is spread. income So securities to adoption of of in that recovery

else quarter-to-quarter up lot and amount quarter, next the we've few next help a improve does of down few decrease that there we spread from of good continue that so I costs parts past had of that that this in to bounce think can will a moving and but certainly certainly from quarters us got, do each So and will comments add. deposit in and quarter bearing that a to core the interest opportunity I you The to that level the and I of we purchase is help offsetting if loans to cash XX% down XX% margin reinvestment paying contributor well, degree probably those to have know so know securities don't the some George and of course are anyway to interest they're main and then levels have standpoint. favorable yielding hope our provide net overall the anything opportunity which as those

George Gleason

question. you it, as Brian follow-up think a I covered unless

Brian Martin

on new more other just because talked maybe just in on Yeah, yeah you the the loan about non-purchase RESG origination I maybe today, where side those components are than follow-up so side, guess it the just it’s George coming the

George Gleason

you you on tell that now we're as spread it new originations would on guys as that booking working we the pandemic better tell were in that then in long the getting are is there our a and would we in started. the -- better XQ I only originations spread - right XXXX. of But new good are the we XXXX what on and was after I getting XQ quite spread is space in We time. had we of are than obviously so out spreads were not

as we'll it's years year better as benefits than -- it couple new And originating as spread good ago was the or XXXX seeing getting ago And with it ago. a as was were that from good stuff what we but that? and of So agree months you are not year. months start the not XX as nine last Brannon, and in is of today last XXXX.

Brannon Hamblen

George. on, spot all that's No Yeah.

Brian Martin

in assumption the you're and give there there? and Okay, criticizing I’ll my with the was not come directionally Or quarter. trends just you one I classified, can how much is perfect. And color for of any just movement one seeing can level with the other me back guess you're

Brannon Hamblen

Yeah.

We have…

George Gleason

Go ahead Tim.

Tim Hicks

previous very, a that Purchase the Obviously And quarter got They very that which Thanks, to one in We a we quarter, we couple kicked still charge loan XX very and keep saw our X% very was pandemic got a very keep you come a mention a there that from million chart -- substandard non-performing quarter just during look mention deferrals previous of ticked deferral. at under level, good off non-performing standpoint. our got acquisition under don't Yeah. lowered but stable just which that down which -- strong levels senior due a our $XX didn’t low had favorable that you up But loans we basis move into we’ve still special levels acquisition assets non-performing substandard in slightly a still really assets, on of that points credit chart a to up, very very levels in strong you you purchase that -- special living special obviously is the Brian. loan loans mention quality non-purchase saw good. really is came to as that up. very off non-performing did category. are move of struggled and was have levels. or didn’t and the from as we their to a from It give our facility but our we occupancy have

just still low bit and levels. was did not think very much I that sell it little up low, from QX

Operator

Piper And Instructions]. our comes Stephen from question [Operator Scouten Sandler. next from

Your line is open.

Stephen Scouten

maybe Hey. Thanks bit. a I little could thinking everyone. I guess expenses about start if

good scale something that. X% investments over additional what You It any they're or kind of professional this really to and quarter. might just that growth like wondering XXXX thinking. in you're know large that come some you expect previously direction could X% talked if or results hires about expense there's consultants be here I'm out normal and other able time. in to need be could The to fees we other things come

George Gleason

take Hey one. Greg that you want to

Greg McKinney

Thanks one. take question I'll George Yeah. for that Stephen. Yeah the

QX, in for to worked of that to use those have the the did talking of that continued as projects that of we us. been reduction this through but and consultants getting of that been earlier expenses up, -- wrapped projects and see about resources use know about lot some part you a part that some we've completed and internal some the middle quarters You really stuff a year, those we've got number talking in and do about of of desire

of talked significantly it's bump I’ll that expenses where all efficient little become as talent, QX health grow we as more a worked XXXX. say that's little we're do a certainly continue adding our course thinking there our and continuing saw We specific functions more then I that consultants with to we bit capabilities that a and to a we places looking typically expand And always really expense made know bank, right pretty pay say our that of groups as bank and all going pretty to you as a to a of those consolidate we and the bring a so, starting that do that the point this for or so have bigger talent the either the quarter, -- need bank, would benefits the don’t of expect salary, good get this benefits more months standpoint internally purposes it in or hard with lot can rate continued salary work So you we resources see people. right we've a to more people summer jobs grow, XXXX thing the that be doing bank, of move from a standpoint of to other normal try in looked overly don't the that pleased constantly right and certainly is certainly move say right downwards the we've ability you that you’re know as I insurance to on of headcount those -- making you with expand those good it’s that out or although that. cheaper about just year -- bit got well look that into see -- we QX We've is to to into use really elsewhere continue to focus seasonality raises, resources in to minimize not know impact then say would a that a that. of XXXX in that changes the identify in that from with -- we're but although from staffing - certainly we're typically new I of ramp-up other we were standpoint sure significant number replace significant. guys to about expense you a although excess our new we and from there's on we've over with really occupancy that I that

Stephen Scouten

was the there credit that guess project to quarter and then and in the I York I on and chatter kind can questions high don't it know Greg with if work for Super project of property give touched lender reserves just structure, that in RESG any interest thanks those in it's more along underappreciated my might some the level protections more interest But that like around around that bank George know you things I protections, Union that able there know where if have directly have to like interest mezz color, minimum the give the maybe of structure appreciate you intensity you an the the Dallas of the protection temporary amount and there. positive and it get New seems your you other levels, loan additional were don't the and around of the you Square of of way. issues length the loans speak some then you sort the more comfort can you

George Gleason

to want you you to Brannon - on that. want comment

Brannon Hamblen

the are about deals are alongside talked earlier. become that that the business a mean they I in I the and was calls I that. have great that we’ve okay to but we’re part always good loans to… these achieving that it’s internally George structure we way our but confidence of it George, on what that know Dallas team and we we way and key continue for. -- focus that emphasize it yeah, with we've, terms in sacrifices we've do but We've with growth the known quality. to the you continue growth, to quality us Union of ability the done absolutely job structure And not appreciate a structure and the our have group is element because how you way that team is George’s that know one, asset and And on to bit that number no of our that we the in say appreciate and that the of on an a and RESG you I maintain one we the But do we we that, good we’re bit of am and going achieving maintains groups of Sure. about asset to business execution, lot with strong quality Square expanding for origination we focused a execution to give of think I quality appreciate does that, to become business the do best in groups appreciate I strength shot that structures, a provide the our that is accustomed a that that with asset requirements us a number the originate got project -- would safe our need and our

George Gleason

Go Yeah. ahead.

Brannon Hamblen

for sold. Yeah, purchase that someone of that time we actually note. we selling a quite that yesterday And had note We successful done lot actually loan has actually to in that had we've were that us some business with been after that yesterday was actually.

obviously really great the along us provided obviously we And project along we on to good process, interest par. it we in were was the another So opportunity interested another we project at while for come made that opportunity leverage project the and were some structures that transaction that in that and point had was the leverage a pay party come on it in interested the for it. a at of at point the transaction the that great party on to and provided leverage

land very floor good and times structures in bad. allowed business time parties So set and again continue to time is and strong again the low us great leverage as with as doing the to

George Gleason

want and that that. public they we the time had to there with off interest would their paid of loan that our XX.X% step communicated detail filings extended color because they like noted We progress into company issued strategy for the and had And the get communication were part a and we that was don't on a project a a that simple. out know I on is am that pleased needed very too borrower at that, sponsor more much so little to got on entity, as attention Yeah, accomplish to loan that to I those we public piece little here rate. be provide going don't and but not but

it the got be note renewal of salable interest their would understanding lieu we in the and hence and fee, a around rate off. pay -- and part raised on agreement that turned sold and So for rate approval concurrence with higher readily at we that and the

all proceed their that an the was interest with they'll all with a all not principal was progress out for we from, pleased these it was that and So business parties might - of pay lender execution and pay loan work deal but plan agreeable that everything. so transaction that were a a it on might probably just off the it all -- full loan purchased with was or off --

two that got it the have had condo - partake there in no problems had and didn't delays know getting quickly risk a should. projects together reset to project down restart parties loan and at $XX all it a traction million the large on never not the into well first they and some a par sell on restart full as wasted And the New readily after I because and we ago in lower had level note pay loan down ended our that sizable their it to off And pay progress weeks paid the off. that loan deposit we of we and They adjustments. they retail even the additional our was leave loan timeline of time the pay kind on we let pay executed on was on let set think them new loan floor last it initially. started a the you ran as so executing the that the of all out. there was or buyer. the the some tenant national them so bearings got tenants So - was they a or got getting we needed execution penny and and that at up their as required but forth we’re timeline table put form floor the everything Interestingly in was act that year readily We York well on and Brannon would they time the that that after getting year some ground space the ground they of was million that but have there that the leased out the made at on a a finishing sizable also and and could equity at of led down exit and $XX to kind sponsor space because had on I at transaction loss they their well

So that lease our that on than it to by taken higher loan supposed worked was and out another - lender loan like they a at than were project. amount amount the on much

New deals business. because had York us And we're and paid in off. of bank community the two knowledge land and a getting addition were and pay lot in I $XX area our [Indiscernible] New of the York combined several and low loan ways new were or to to so that we've New understanding downs is these gives as seeing vast exit transactions, our smaller our very lot our constructive in York that our these with And projects of majority in lot that required part structures know not So room cases. think of pay-off of credits you of we acquisition in expertise million those a leverage credits we're a

a the year. of run a - had in probably of hundred since So New couple City of the we've bit York million total first first the a pay-offs of

Stephen Scouten

and the Thank you given color quarter. That's that the color. much congrats on for helpful. it. both you all Got appreciate very so I

George Gleason

Stephen. All right. Thanks,

Operator

question [Operator from next you. our Arren And Cyganovich Citi. Instructions] Thank comes from

Your is open. line

Arren Cyganovich

comment about Thanks. Are and bridge any market to you the the out prepared in last to was In starting the seeing in that lenders you a permanent year commentary there return XXXX. later night an seeing the kind I'm that you're originations, of quarter, a lenders? in taking impediment strong pretty be what you just quarter had origination to fourth your from risk curious non-bank -- clearly there put might the

Greg McKinney

Can that I take George?

George Gleason

please. Yes

Greg McKinney

real market, of additional that is to capital think are I additional that and there you look is, estate, the can There say you that velocity be the there. things the invading commercial more continues the is then yields nature. that So risk and more risk the generally taken transit pressured know

Although that and play pressure as the we I world the not we're in seeing will much not say moment. that at

a have than capital of the I spoken going materialized expected Now, that a to bridge, there is it there guess, will not thought. look stress. terms bridge lot the I’ll of and consistently quarters getting is more wouldn’t the to our of one The trades active is world view -- over projects, asset normally lot part we’re quality focus we I that company term But on risk that higher level large depending attention that currently, a there have has distress come think held several not to view, that that normally on waiting of are where might seeing participants, certain and more up to lot we project out of but, business. there’s more become a bank from be types and some so advantage life who, -- are standard existing are in quite but capital try and better there had an point to also of

I year. we for estate might some of happen. that world yeah, in. the will to markets. of has good lot we've aspects to in bridge a originating team this and of pretty at extremely record pushing that obstacles that's of And part I of those still But, waiting challenge our volume be growth of that a think good loans be capital George active the some they're good real that on terms But had those of as not level great we'll said focused the and great be through track sponsors with got a well-structured alluded in

So we'll see keep those if can after overcome year again. and obstacles we this

Operator

closing I And remarks. George the for showing from no And am Gleason back over lines. turn phone you. to Thank our questions like any I'd to further conference

George Gleason

the you your company forward to our questions. good questions. with you. call again call. and you and Thank about guys our today the That great look for XX Thank for in I the all being appreciate interest joining We concludes days.

Operator

now And wonderful Everyone disconnect. gentlemen, call. your have you Thank Ladies and this day. may concludes for a today's participation. you conference

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.