Bank OZK (OZK) 17 Jan 252024 Q4 Earnings call transcript

Company Profile

Participants

Jay Staley	executive
Stephen Scouten	analyst
George Gleason	executive
Jake Munn	executive
Paschall Hamblen	executive
Tim Hicks	executive
Catherine Mealor	analyst
Manan Gosalia	analyst
Matt Olney	analyst
Nicholas Holowko	analyst
Michael Rose	analyst
Brian Martin	analyst

Call transcript

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Operator

Good day, and thank you for standing by. Welcome to the Bank OZK Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is recorded. I would now like to hand the conference over to your first speaker today, Jay Staley, Managing Director of Investor Relations. Please go ahead.

Jay Staley

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

your Cindy take Institutional CEO; Jake to are Operating call George Tim and the on Corporate Banking. me and Chairman questions Brannon Hicks, Gleason, Joining and Officer; President, Munn, Chief Wolfe, President; Hamblen, Financial Officer; Chief

We for will questions. lines now your up open the

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

Operator

our the [Operator of first Stephen Scouten from Sandler. question of comes Piper line Instructions] And

Stephen Scouten

So little trends growth diversification Marine looks thinking handoff you plan. in in it. ahead look like bit particular, CIB to figures I and I guys kind It pretty a the the And kind kind results to wanted are little a the growth you the X, RV thinking as and bit of kind trends are more about guys how about least as of schedule, about and X good. at like I was the feels of it talk of at and of of and are CIB,

more that. talk So could I just if wonder about you

as those those to again, play it feeling kind kind continue through you're gross trends out last of your know for think just build teams? of next is couple out how same I guidance just you could and years the was And you 'XX the quarter. But of as how

George Gleason

up probably had XXXX. much on summary, Munn to I that we largest the you that's question. executive hoped going very and CIB contributor with the on and would let we into where would the pretty Jake our to me tell for and comment With to be. intro in be in growth thanks that line plan group we're XXXX that Stephen, ask

about Jake So talk that.

Jake Munn

from the really the operations that with good to procedures, through. originating wasn't business appreciate I build a results hear any laying getting We're for But happy necessarily that really really start policy to management off. to underwriting those Stephen, all Really, to whole CIB templates. last XXXX you. scale was in came took foundation, George, the and quarter a means. surprise portfolio place the foundation across us This And by our as CIB CIB units. various

credit so were so in doing getting and we And with and partnering everything successful and our risk up partners running.

by tailwinds. footprint We driven pro-business manufacturing and workforce and opportunities, distribution true economic strong target what well. as and But about that, a a horizon favorable had continue in we industrial a future, some strong to and year We're the Texas, in our footprint across Arkansas, great relatively market grow. being view on existing got excited Carolinas. Georgia the from the continued lines. were and look deals first about out Florida originations we're we to next positioned to We've this well actually optimistic here We view we're planning, quarter. on of myriad excited and for those saw banking to fourth the and we're plans that as slipped CIB business the and we bank's respective that really of number quarter there really and growth the With about growing in the

optimistic And about Brannon, rifled focus talent there? we our to that and into anything George, of the finding tie prospecting feel XXXX the growth add the You CIB. on to going very across across from best brightest and continued approach region. our the

George Gleason

do you Brannon, you well. think covered I the it have comments?

Paschall Hamblen

fit The the with agree that brought and additional would employees be target just a George growth on world are the over No, that just phenomenal and a a good been growth additional been with as Cindy that very number really talent you additional marketplace. to with lot of see way focused areas, I we can. they different Jake successful, well but connected so branches guided, the very of guys you'll that part of Jake what and and in culture we've in year and he's business We're raising the of reason it adding bank individuals, that around on we are I they're has I that whether the all our expense deposits, we've will top-shelf top retail fund think dovetailed it's -- of tell be the would next lines. say in,

So we're achieved that handoff and going to it's the extremely the excited we in where go about future. have

Stephen Scouten

unfunded this thinking could just XX% it. the from the isn't what accounting see saw it I'm as Got percentage loan a that, play out dynamic And Really helpful. from that an continue on reserves think kind and quarter it I becomes? kind to unfunded have the perspective. benefit the perspective, this was natural of could unfunded just as of down goes book an about then loss that book and we we RESG, accounting kind of like CIB of handoff,

Tim Hicks

ACL last, Tim. in is growth mean I our of component certainly, and we've XX funded one say, the both mean had that quarters. unfunded -- build I Stephen, that's this over

is also that view component very on very, as of conditions a big macro the well. Our

into and that the So one go multifactor is but many build, of them. -- ACL factors provision

George Gleason

& embraced our have our And all focus on our same business Community consideration so if calls we intense concept Profitability their to their the And add and hallmark a paramount, profitability I is RESG. secondary growth credit lines of And operate group, all credit is is them the consideration. back top Indirect team is and an CIB we great, Jake credit has quality is if meetings priority, and completely of been under it would don't. pipeline quality and that the And get and and a that tertiary the a our comment to all that the his they important of secondary. And nonnegotiable. time philosophy, the growth, that credit RV us Marine group, group, Banking pair forth.

CIB in the is that next build With a we've goal number the the built of said, unit years over of space both in size. to what to estate and in non-real RESG, quality, profitability comparable

we And our expect grow had we of be continue with future partner these unit a an good commented first of But to the growth CIB, in building did. So to they're really in just that guys, to yes, on you equal RESG steps the why of we journey company. years. RESG in quarter

means these that long just So getting they're a runway guys have and got started.

Stephen Scouten

points of me special my that's That's on George. is updates quarter-over-quarter other credit, that mention, kind And Yes, good the here helpful, mean, you I on really to focus kind of question had great. some I some of one and that that lay And out is the of you've you're kind things the about XX the substandard. gotten. like extensions guys modifications Figure this where enhancements and you talking of

know, you any to I look, modify a have reality that's would it. to the but love not probably mean I loan, perfect of just world, in

process good a how of and kind partners equity that that works that there? capital So mindset practice with just talk can business kind and your about why and you of

George Gleason

-- positive. we Well, we modifications, view as a

spreads, a collecting we're customers. floors. are the negative we're that loans any additional to credit, not lowering expanding we concessions our not negative sense our commitment, of lowering modifying loan, are you're If you're fees, not don't things that do and not the in advancing we're we're modifying We those not

customers replenish customers the are to those the make paydown reserves. that's modifications. modifications Our believe if for a The a pay fee we absolutely essential customers

collected So some tables accompany $XX significant a positive see unscheduled million we we view had in million $X.X fees. million unfunded in with not in We as And a can reduced negative paydowns in modifications you the in plus that connection thing, $XX.X little modifications. that thing. QX commitments,

on modifications those of went to that were straight income. Some short-term fees

Some of deferred loan. life over the were modifications fees are of X-year on the those longer that

million that We all additional modifications. on reserves, collected XX of $XX.X

forth far probably look reserves those positive. the will this of So as as modifications better crop even quarter this we very view QX. numbers additional and is quarter's as so in And from

as negative project that -- to are a to positive. that that try we do have There's a on been guys of a and in that been on those out projects go of story effort leasing So map our taking thesis the view completed projects. lot studied and

and time that made the piece super the most rates is We've first a controlling, started Fed of this we cycle the statement And valid certainly information, includes their our property it's to our properties been economic that expect most raising information. rate partners the the we but have into in capital that higher important normalized. the and clear RESG since of on of not been piece if continue economic that's that business and And will conditions case. support needed certainly through interest performance times sponsors stress,

did not, consideration. billing the get the is have and but the So important question built relevant or That's not leases not? that's information, gosh, you

we cost, get leasing, just successful done and customers The portfolio of not a carry work of sales, we that a pay hundreds is the had the continue and have examples to examples sponsors in that to of the where important that interest, the the consideration support pay project, conclusion. that. handful whatever are work relative project the And

with performance happy the of our very we're portfolio. So

a higher credits. vast they to environment. vast need do The is to going We get reappraised of to low we've our to and continue to what interest interest the current the rate the successful outcome. that leverage, happen, now or majority And rate of expect portfolio majority make to in in model business designed the sponsor do is the

So rates we've cap taken so into account forth. higher and

loan to something. have big comment And it like that to folks up. Yes, of made fact to value loans our in was life Well, big the XX%, of went our deal. science is from those out we XX% value, lot loan a a on loan to but portfolio appraise up or XX% some value a went deal make gone while

occur affect do fact beneficial the why of allow it partners to for to benefits the the these And That's It's of by very we super that assets. value simple sponsor valuations well and defend strategy. could very portfolio. money as money, effect that in still we the discipline apply adverse the continue a you has be low deep if we the and going for that means and that we're us their they're covered continue in to the super deep that and scenarios leverage that element collateral capital these a in see money, to still well the with are loans

strategy out certainly Our this in is cycle. proven

Stephen Scouten

George. color, to you it. a congrats team Appreciate And great and XXXX. That's on Yes. great the

George Gleason

you. Thank

Operator

Mealor line next of Our KBW. from the comes of question Catherine

Catherine Mealor

risk I And clearly, rate of answered mean, paydowns. we the better can less like rate as is. risk? on credit think It rate bit a feel that in you the and could on even environment. a kind the just you environment, still for rates mean incremental feels So cuts you maybe terms towards think what you question the is on I potentially higher margin what But that about just current comfortable for little less in a higher comment of credit with really

And don't is new get secondly how might new If rate any more origination origination you your we some on CIB? -- your just at at then then some impact year, rates RESG volumes. and of think this volume that initiatives cuts

George Gleason

rate in reverse to order. let's get don't what do If any Jake, does Well, that more take volume? us we CIB's Okay. cuts,

Jake Munn

sharing, that we we're is of Catherine, current good new are position clients picking Yes, in, in that the beauty it's the and the question, absorbing environment. a

baggage necessarily what the gone So a market of don't through that ups have you environment. of from haven't large current clients downs or and amount we have the

to other across forward And on interest cherry be rate, with, we overall, pick so and and we'll we and CBSF Fund potential as an we expansion that EFCS believe ABLG move impact we're look good groups from and our in groups a start out -- there. Finance and position toying the and

good across getting we're remains the still board a spread pretty from Pricing standpoint.

carry kind best Our those spread flag with CBSF business group, of group, units, the across to continues our the which too. fastest-growing is

any George, there? we're So a position. thoughts like we pretty feel in good

George Gleason

talk for what or RESG's volume? about Brannon, want do no you does higher rates to cuts

Paschall Hamblen

Happy question. to Catherine. Sure, answer the

that where XXXX. we that in from stand of we we or achieve originations So the are typical today, in, a level environment in we higher we cautiously optimistic and can more noted are

that around stick X with are, mindset we've they if You've is noted cuts X the X increase and the our been an year. what during in to seeing in September But where December, we're even they has deal flow. had the that

touch deals our are So a with these market great staying the staying touch have we've watching -- out what and guys with developers. and in there the in job done

to high of And one flow. beyond cuts. we're I from to these what getting into them, incremental substantial those headwinds That rates they're seeing benefit Land or that that, really process. provided valuations have down the mean, halted is recent they're the starting inputs the and And push flows the other of see being down. deal

the the is project at a attractive So one inputs in of place. more

impact And to of incremental being get start off we've declining benefit from values, forward. moving bit. interest you or and So coming benefit more from rates shelf little induce the off the a that land deals seen a

elevated we're what are seeing the and environment. come back seeing to Cap could we a So all rates out up. rate adjusting. market longer-term adjust as valuations be, We're know, bottom

the flat a think don't new we up to we on love think obviously is normal. if is, could know still if we on we So is it the I too. the But these revenue But benefit environment. this generate that we have market we strong in bottom line loans see deal adjusting book to to flow. our a

to again, certainly more term in that in could getting pipeline the our our even saw we're moves we it's the seeing an would quarter massive We Now We volume. going volume are, of see where improved and if change us guys the executed needle. saw in we that terms conversion improved up, ESG. tell adjustment for that sheets. But are

that we've So we they quarter. that year. if improve come pipeline a going here, We stick to But the ought last close into have sort where still to things into them. year for to be of the the able are, year thought we with got over good even

George Gleason

were me let originations quarters. in provide I'm lowest RESG if one and our correct XX other me Catherine, comment, quarter originations think I the But Brannon our wrong. fourth in

Paschall Hamblen

So you name it.

George Gleason

a You to horrible the could takes there's get percolating." have that say, It conceive says at deals new You a gosh, though, time long of lot origination that's factor and closing. quarter not a project of look and and projects. lag a effect, to sort that to on in it "Wow,

reflects sponsors low really below volume probably that X the So mindset fourth that. before quarters origination quarter or X of

the the origination had At we in same quarters. XX volume lowest time,

signed sheets I at described so it. was, Our describe that don't give -- it, Brannon want RESG pipeline you of Brannon year-end term misstate [indiscernible] to

Paschall Hamblen

of It one actually X maybe to sheets executed. of I best was our to term and quarters want say X

definitely it on the So map. it was -- out stood

George Gleason

points off is the the I about expectation getting And think think election the U.S. some fact what And I pro the there have with term that going good sheet frankly, into and has rates for that's you're sponsors headed seeing a projects, growth. dusting constructive excited basis ready that be signing environment economy about XXX lower to forward. and to enthusiasm we're economic business more stimulated excitement a move

seeing those bids getting our that. customers we're and So from

year So XXXX a origination the year loan third about we're we're with in XXXX, is RESG the following in though payoffs feeling cautiously because RESG. dealing optimistic be even to big growth of headwinds from still bunch XXXX going record

term some about us sheets term to and we're higher RESG, makes our coming next pretty momentum, through CIB's grow getting the optimistic fact sheets ability year. new So that volume

on ahead. question your yes, -- margin go Now

Catherine Mealor

Yes.

me add thing on downs. pay Let just the one

we been think down, it. pay the you you in still on think do normalized to of it's year, we past was see should still so high more belief no many environment, that question many are permanent But you're of if because go ahead just that -- we've you loans you is, year? to fair as when higher, go rates cuts, seeing lot paydowns that's -- do your a I the into we're not we'll rates, see as and this even naturally believe so a the point, probably guess matter do and or the rate the pretty I extensions the On third mean, financing? kind what see there's you get still these maybe be in

George Gleason

X environment, seen fact that think for reality dealing longer and last we of the to our projects elevated going more financing to forward. waiting ahead where that elevated the in sponsors not I bridge people's going because is, think next RESG away to loan back they're -- or levels to quarter less they are the from they with construction of and a quarters, and that reality going our be And -- no reflects right and rates we've these the probably move in loans. is we're more think are. be of we're going where prepayments on the or actions but on or in making where getting to we dialing plans prepayments today we're prepayments, fact X we're go We or Yes. minds, repayments, the levels to are And permanent

think the I last of repayments So elevated X quarters. the for level in factor been that's one

I year. continues coming the think that in

Now will know of it that that will. We still see modifications? result level of level may in modifications. high a a lower I don't

example, on a got up that That them them project of approved time. in that from give to bridge but sheet needed who's to a out to lined a on closed. term extension got lender XX-day a was project a committee, For we've sponsor take get more they our

It's that the XX is take take guess days. It than the them Our complexity more project. will of will it them.

extension it. preapproved they a if we've second XX-day So need

on go the year first to we see quarter, a that X quarter a as So pay or second could see X that booked in this bridge of the and result. loan off, lender maybe extensions

extensions going of also X to we've going see level a seen as to you're you're level last over I see high to a the continue quarters. I repayments high this So of think think year, but

Operator

Morgan of Gosalia Manan Stanley. of line the from comes question next our And

Manan Gosalia

over quarters. to -- couple like gone for number the appraisal meaningfully I of past getting the it I wanted up has loans of you're wanted appraisals looks to the ask front, quite on that? ask it of bring go more thought what's more book in to equity? cause? see concerted you where sponsors need through a that normal Or driving Is about to effort the is more and

George Gleason

is a appraisals really, as think, of reflection It what gosh, look there's been portfolio, are reappraised those of you a going the lot questions, I like. that fact the to

have We ourselves. on pretty that good ideas

your So the are. your chair as in about as we're of perhaps some chairs sitting or concerned folks not that investors

guess. the kind the So appraisal we function a at pace can to and made appraisals, our services go validate review engage, of that we just decision max third-party

going we're can. fast So we as as

you and loans number can't XXXX RESG are Brannon me think of remember I that pre-December I appraisals. were -- we recently, have the telling

Paschall Hamblen

of got, we'll were December XX, We've that. Yes. I going between XX, XXXX. think, XX we're probably that have reappraise left then those others beyond have and this of and quarter, of predated And XX to those that XX

account this well. some total our We're where in pay and So -- But probably account around about off loans will and be we'll then that our last will -- was as in have that quarter. quarter talking it vintage.

So lot older we've there, those the -- made getting them of to progress we're getting a end of appraisals, but close updated.

George Gleason

of end environment in that interest been RESG handful forward. the and loans rate in current a the higher rate reappraised -- just or interest By have QX December XXXX a of we have Yes. starting should not from environment

We rates we're So reappraisals. loan-to-value, cap cases in these appraise terribly have gone many about concerned we X where we a the years of lower mean is and little know all going did a it probably to stabilize. time higher little periods that than to for ago. know property to valuation wanted -- not I and

we're values, on impact appraised So seeing that that. has and an

the we to quickly we're occur last numbers XX-something those we to But proud portfolio numbers would that's What to though went to or loan on as portfolio, everyone XX essentially value XX% XX%. are. the only understand the where the our even -- reappraised percent portfolio really expected of year in from get in interested reappraised the and about is full so want that could we our as

had up bunch value even majority Now managing the more our a to made, value XX% loan XX% level, XX% loan But gosh, of a average though below that the up portfolio, as a or loan are to went portfolio oh, a And loan went reappraising, a had is new higher portfolio originating fact showing you loans that that our at value -- lot's and we weighted and I'm more. few to value that we're reflects to XX%. is that to value. or you product are average appraisals a loan or the the

partial get parts are to our down. and originations to releases modifications working of continue retained, pretty get is lot where to to unit projects sold other on previous values part pay projects, value. out, it paydowns the to is those We're down both new highly of accretive that those loans, every at and we modifications. sell have some getting we And loan on project on a So accretive we subsequent one condo on a because big go And down an condos that. as accretive our and things loan sale very

moving value. parts continued we've the So to weighted those is to result XX% of a very, average that loan all at portfolio conservative very keep the

Manan Gosalia

what Got and hit loan floors behavior been those clients to from seen have who points it. noticed to have than floors, where that any been Very, they you there on the XXX lower loans? looking that you've the now were Or started? replace And trends their over Have basis very loans? we their have helpful. pivoting maybe NIM

George Gleason

anything you I'm do [indiscernible] to aware of want Brannon, on not comment that?

Paschall Hamblen

can a guys only typically mean, closing item, quite that. our that But takeout is market a haven't It's the But I is deals bigger debt we're the been. trend in and but We've the bigger floor. in all really -- part of these in floors. And of Again, pay identify their our that's great picture and terms there, that the the piece is do project I of an exit the they both is and based those we lowered The modifications, look, no, those we've of much positively on that negotiated the on see service. seriousness, picture, we report. there in of mods hasn't clear end the number No. very don't is a but trend front noted a negotiated evidence increased job floors. negotiating. we're heavily of other -- the

Manan Gosalia

from here, of is think beta I just loan that from As also mix think there's I And XX% about loan on loan yield so think the about coming been part we a far. changing. yields

loans it floors, their expect just that should the is loan here? about So from fair we here? slower Or hit beta will the to more think yield now as how be on that downside from

George Gleason

floor one That a loans question. rate of basis point wrong you go of at I Figure their December management in XX% XX XX% XX% had loans XX at you floor -- of our our half, our good emphasize XX. we to down comments. and were you at That's I their of would floor right? rate were our floor loans commentators loans at the points, rate. at you're got their X% And variable And because only said at see, our of was XX% that rate rate. our that if

given think that the So -- and likely rate the used X this rate case, assumptions I cuts the year. most we've we've they're while guidance that cuts no

percent be we're Obviously, XX% or going rate cut, more X our loans. at to of

flow cuts, the rate X So XX%. rate,

So rate that XXs, you down. once beta your cuts, we or or into really X had X X loan if slows get

price if going loans. continue to, is to of beta deposit up we Our speed course,

kicking X X floor or X expense would because those provision X both -- or significant and or would NIM opportunity our from rates benefit our from X in. a from or X our would we or cuts benefit expansion X cuts have So

we if is, expense more the back because that net the get And of our that significantly variable they would that went flip said, higher, our because customers as hit the customers. it. loan it rates. floor, paid just we a on with income, rate part rare of hit a floor, That's of Brannon was of rising we're generate -- they off provision we know floor negotiated environment with don't live The would elevated put They issue that because higher would usually not part portfolio of stress side deal. rate give the interest

rate XX scenario So year assumptions we've case this in basis we're And and the us. guidance are that darn we've cuts worst the scenario. yet, case out given the the good worst-case to results worst coming X is rate actually made scenario. points even and cuts with pretty for

cuts by our Rate scenario rate is points. higher increases, are even more are, our which better. where margins would basis worst-case partially X the we back provision to is net-net, be expense. is So better, XX though given But

given based you guidance we've that. So on

Operator

our next Matt And Stephens. comes from question Olney of the line of

Matt Olney

to I want those guess XXXX, required various the of aspirations growth think growth be to question, And the And ask both these longer-term growth a to you you've high bigger aspirations? more with aspirations what loan with longer-term also picture handoff beyond mid- look the talked investment just XXXX, investments new appreciate to been type and the more And segments. growth company of loan around resi these for to initiatives growth digits will the and I you've of that respect we of clear hires. of all loan spend. the other if about expectations, it's the expense the from of maintain and growth around about because single company? XX% trying to

George Gleason

-- and would Brannon Jake then chance me that, a I on take I'll let and give Well, that. to Matt, comment

to We have continue future expect size expect months, balance the to we a and I'll see couple into growth. company traditionally here the balance have the And X,XXXx sheet be I year and been lot a here solid we In XXth when my a to were very growth-oriented is sheet celebrate and started. success. that about of had of

incurred add add solid year is growth. far because first around getting the attention of more and the achieve CIB have the last to loan credit engine loans, But expenses it's and governance and compliance risk year the have came really As add their in some CIB as rock expenses of as dominant and all started important I think for elements to we the growth obviously, But and more we servicing Jake achieve there'll growth, for mentioned, lenders, they loans. the And more incremental that lot huge be originate this amount us. that and a the customers. foundation to expense things to the become really a building and built a

Equipment structure took and asset Finance rigorous of Fund rate Finance management, businesses they run had much and our wrap numbers. ABLG And the been that is in clearly already a the created and them more that into we governance has servicing,

forward, as be I for but whether years, going X which a will knows, that's it CIB's RESG. is big think years in or years, So growth think X will RESG of X it our part X company in rival I or XX future to who

And is in of it's for. rate the our that and structure paid place, for in expenses. run It's

incremental you'll they monthly long a to more in up, mortgage with think go contributor more incremental year our and are We've is XXXX it unit been positive division. built, but is been as [indiscernible] but have and all that negative that I in the Now expenses because money thing growth, next ramped that right, And we becomes quarterly smaller. year. Those it's and that there. built losing forward mortgage are infrastructure smaller numbers and getting get foundational as unit expenses, going Same efficient

forth, some to we we've Retail in and those book, so and Jessup's of place and strides hit are loans growth. thing just years, the up business Alan over consumer lot Cindy's of the in in partnership and between meaningful X a ramped last the Banking guys beginning put originating in our infrastructure small Banking consumer units, same tandem, The Community our units elements

really place, unit, significant Trust a up I That infrastructure and growth and we're we've year. much buyer. getting next infrastructure really built more positive Wealth see there, real some that you'll think is in Our

ratio ramp think industry-leading I expenses. expect to would have expect ramp. I going because will we maintain an So as seen faster efficiency expenses to than we revenue have is we But

expect would be us I to So that of ratio sort XXs sort to going mid-XXs, continue in low efficiency forward. of

Jake Munn

I'll just Specific the is there. to And quick key off George's efficiency CIB, piggyback that guidance factor. a

XXXX, peers our team of we're foundational and if maintain of and book so clean point, you portfolio healthy management business, it that we his was at a really across best-in-class And build to in very ensure operations to our the and look aspect. that

side. as out bit future focused look relates you on origination really a going the it's it And the more to to be little build, so when

we view again, Atlanta take CBSF team our of hope and might start and hope and launch in Nashville business syndication the the And our within decent group. it's of business out Brannon We it over XX, loan hire more line. that or competitors or Mr. we a gate. little go XX ABLG I. itself George EFCS, might so and a repays wherever Jim approach over a really where and much [indiscernible] Corporate pragmatic head between in take be within not then Mark CIB, thing just our leads and or our lot Services or CBSF And Tim that's ahead a a our market out we different level whether approach challenge or Sheff that take. bit a over finance, here A And get people comes over time the

bring next We the really person next asked before on. for the them person we prepay to

high-quality ratios this not there that the already were the to can hiring we're efficiency on, they before so in we our generate prepay that point, to if keep scenario, George's even worst-case person that team business contribute is the to new talent, actively revenue is person there so we're when and And that that comes business additional so already really have best-in-class. to challenged for

Matt Olney

to Would guess the industry. potential anticipation. for White the also market perspective be new There regulatory how ask the about I very could Okay. impact I Thanks some changes. your gears. regulatory this could any bank? for to and for comprehensive. I want changes about has coming potential favorable administration hear changes The industry any more love switch the got the to House. We've commentary,

George Gleason

appropriate. to change and a and more has other to very regulation environment widely and banking I'm that going the regulatory challenging environment. soundness regulatory hopeful industry. just regulation is certainly, administration and of known. anything. But constructive more here more telling I mean, the anybody industry the It's that increasingly insurance, the lead Yes. for of is level more there's in not gotten a safety not because We're and FDIC

of banking that to to with industry private and risk and lots and of business credit seeing that financial nonbank used business to do consumers customers the you're nonbank that and firms. there's economy financial a private And to credit push the lot firms, out and

lets the see see more industry, needs industry hope what of nonregulated, credit which noncontrolled to of the and to a economy I rightsizing lot sources restraint we what regulatory a we pose would on hope think So banking customers. by met the to and of country to being opposed the as that credit think I more risk more of the do a is

for that with and The unnecessary even got President, deficit, being advocating to I seemed to going wants without fiercely get to banking lower That the think on needed next regime -- too. combination hopeful able taxes be declared to and down removing tax cut favorable existing U.S. regime to week be in are that that. deficit the reduced And incoming people, the we're seems grow. advocating economy to previous administration federal the burdens And very the achieve a we're economy the are President-elect the and has achieve tax don't that, we regulatory and maybe the has extend of industry. precedent to on met So the U.S. response. the the a that to U.S. be growth he

scale received. to well point the and has American that The got And it's repeatedly golden regulation. And growth the contribute people from next ability think again, been to I and of economic capital making this the has that's the Washington. excesses but we're of the industry unfettered be called, age in industry to as to been

the job. it's industry. economy, done. to unnecessary going of on giving the it's those big entrenched resistance President a from going and And regulations to some So But up to restraints envisions, bureaucracy be to lot there's got have if a we're the be of

Operator

comes Nick line Our of next question UBS. the Holowko of from

Nicholas Holowko

the point? this that, you'd would types adding progressing a of a all the property case-by-case here, pickup looking either of highlight on that other your as from geographies side potential there you're to update but country somewhere exposure maybe avoid for or as the Thanks basis, And that activity? properties there specifically are morning. in regions or this obviously, around at on we're everything specific any is are of types any highlight greater you for Thinking kind potential of for about commentary originations

George Gleason

you [indiscernible] do that? Brannon,

Paschall Hamblen

Nicholas, And I absolutely. Yes, the appreciate question.

that is an well. you our a lot some most our industrial, significant are recently, emphasis but been The we So multifamily also of that obviously current indicator of has developments regional opportunity I which of would fairly has origination where -- see tell pipeline. as condominium and part volume, a heavily towards weighted

continues demand. Our in there to has Miami. the realm driving be And activity obviously, in the team concentration geographic the economic of world the mean, in-migration I highest -- that phenomenal, been

successful We long and have to of lending history continues the a that case. be there,

particular of right, York ensuing property post-COVID in are fortunate continues perhaps to still came been that has out the markets as the we of active firepower lot have great economy sort very geography. challenges that but if that. Southwest, into New you in be not the of type bullish will, to and continues of a move also RESG's Southeast, that it active, So the history, to a and as of earlier up some across experience particular We're originating that but healthier on and South, lot

diversify if XX, the of that on or there mentioned Geographically, And our new -- we refer to notice much. you'll that some more So guys don't the it's adds continue geographic to household some to we diversity others markets, some list. as good you focus as like Figure well. but opportunities some get know our name --

increased press we've and Francisco in so are There's markets that presence been out example, great of our Utah, Ross Those Seattle. not Mason office. covers. For a Mason Francisco San lot San our about of

So regions uncover and markets working his within he's been in to very diligently other opportunities successfully so.

one. job is quality that said always have number we So

adding working those that that these with and with, guys have of opportunities sponsorship yet quality we're And wouldn't in so seen done are customers new you terms the some fold not there to seeing success of business previously. have our we in to markets

a job lot to Dallas development there. originating lot border our along and office be been in industrial with great of here continue in some of the done Mexico. And our of Victor markets a border a will different has Reynoso There's along industrial

a activity, done business seeing we're we've some other are where examples to before that, within sponsorship with great just those But some of some or good business multifamily, economic some good cases, yet done markets So we've bit has our not and good been there spots again, in track picking a have -- construction. we're amount of is be what fair record. there continues because

be into that capitalize sort that's conditions. have And the open off dropped significantly. X we'll mop X we out, years And coming to today, supply. to when when especially But there's multifamily years. for a deliver we excess of 'XX of buildup a loan sponsors our up when supply sort real some opportunity you to going saw, remember, looks continues multifamily has actually originate that market product, to that look on you in of favorable Absorption -- there to

sort and the what that's yes, around RESG's originations of So where the currently.

Nicholas Holowko

for strategy then the business this just more little you're win handoff there? bit a about And new Perfect. thinking year, to starting

George Gleason

yours. Jake, that's

Jake Munn

good a appreciate that's it. question. No, I

we've really we're heat a OZK we've CIB is there, up the us ] the in previously. have country, book. join in, able And whole the the Finance a of lot which brought as been Marc [ to really of as assist reshaped right. and The and it connectivity to and of turn rather around blessed of good to Some just timing, some were Fund to kind beauty is that sponsors untapped Pearl

as this whole. so it's Finance group hone rework again really under And of kind of in improve originations Fund once organization, allowing a kind that and and to CIB us kickstart

C&I typically count, just more the surpassed loan Finance, highest for can actual you deal as Banking view which actual general It's smaller average our Sponsor other an which the count, the they From book quarter. our business sizes. Corporate loan achieved CBSF, the yield also team, of From units. & fourth

question. great So

We to the coming grow expect in ABLG, CBSF, quarters. Fund to all continue Finance, EFCS,

market excited So for growth about to that look We're that we're benefit of could also be other in might kind our opportunities in bolt-on that. at business the lines future. excited additional the

our as us generate Ryan everyone fee Tim picked loan started equally deals Rachel and and and and additional desks, on Neuhaus with we're our which lead team and and to else they've syndications allowed corporate our as -- services really and then And up income. Derek and things happy

and solutions, like as blessed interest fee been and and business actually some income estate we that Our we've markets to on as running, swaps up have some well other our LSCS. executed and we've generate additional rate capital hedging where real under services caps

So on to roll, and looking we're and year, we're the forward optimistic. we're a next

Operator

the from line comes of question Raymond Michael of next your Rose And James.

Michael Rose

like an buyback. -- guess, the to it looks the one, comments don't going I first it way read about been the increase I way like see think asked read management I it's repurchase. in you're looks Just the is

get some cause wanted parameters for yourself the like would to stock? updated could a look more that what to Just sense buy back

George Gleason

Brannon, that's yours.

Paschall Hamblen

increasing Michael, parameters we as for Yes, them we as back. the we buy in or on said which the planning in which -- have we tranches are comments,

Now back buy dependent how many we our price. is on stock

not We which just really in were the increase in repurchases. or buying our early or more quite result share close So plan to result well. But we thing, same parameters, tranche. that may but to in more not we as And hit may repurchases even do QX. January, some may didn't

Michael Rose

as should been? come maybe And right. are than of today you RESG CIB. about the resi follow-up. think loans inherently long-term deposits, can be offset. as kind the one A to with yields the which also CIB of to handoff questions loans, will lower profitable about George, and it's as between an just company lot All intermediate mean, have but going I be because interplay,

that a of of level business kind So or historically still X% the we like above the get operated, to is Or just ROA as trying sense should where is set expectations mix a in shifts? cards? you've for,

George Gleason

that to with and he line a mentioned pretty rates at CIB And that in a there looking question. bolting RESG little are -- group within on to touring mentioned unit. we our possibly probably additional comparable We're that. coupon And good elements That's word. loans. an We're Jake Touring were or generate is deep X it. Yes. business weak

generate of the even profile we're or yields these could for. some low-risk comparable also with And looking additions better

premise average be yes, than CIB, is units RESG. on I the correct higher board going in will yield, though tell coupon less that the So loans coupon probably in average would we the the you, have some premise the is get to the is across correct. Even

fees volume both and we percent and treasury get will from other portfolio, various do function-related that a inspection of fees from fees unused the get loans elements, loan But that. a and CIB as higher fee treasury deposits collateral come will management and and fees, we of coming

assets, you concentration. So our return because return of hold we that capital CRE when in, is factor on all on today the think I overall pretty And equity extra comparable.

even it and capital CIB As grows ratios allow than of part sheet diluting begin a that balance our grows maintain of to of typical is concentration the RESG for becomes capital can concentrated over work we the and but our less more industry equity ratio a on us those as today, CIB to of return level, enhance RESG. time, a actually result should or to sort of little

that not too difference. think I ROA So much

balance out ROE. I I in our ROE. too think improve can efficient as think our it the diversity we the event. of our X, short be run, of X allocations will in in get difference much premise with any sheet, the and actually X, years because But capital not That's more working

Michael Rose

Got it. follow-up. Maybe just one quick

in out were Because with And in large midsized country. corporate lending. lending versus largest and would as CIB, coupon construction a we a when relates it resi, size because eventually you're typical -- smaller up doing the what start now kind of like the you the goal less. projects be Is that scaled to some of think credit as and that looks loans with see though, CIB Just in largest small I terms of larger in get you you would inherently and corporate doing you CIB? right, kind of the similar

George Gleason

that. I would let Jake I'm give Well, real say on you going the color to no, but

you our will So profile size within Jake, diversification what talk CIB be. loan about think

Jake Munn

it's a question, And Yes. great too.

average. noticeably $XX RESG, sizable. $XX loans between, bit -- varied smaller fourth more average on to a and going quarter, be be if On you which average versus our loan whole, little the million at the on can size a RESG million side CIB As look than are call it,

is think though, element, in relationship-focused about the to we're CIB I banking. key the think

we're all the and the legacy footsteps following other of of So RESG lines OZK. business

we're relationship a And customer might whether or to where the terms can that's we that services, George we're services, treasury fantastic and have the that dollars so alluded cross-sell helping focused. necessary customers the got we've products, table, of and our the the where we're with where the private as our interest the private within whatever design with needed the relationship at going client be commit seat those that, some need, structure to CIB, of banking deal, rate to, to

amount And depend going is per so that. dollar really on to that deal

are leading so we're They're at be named syndications, be rights bank going with look or XX%, or single or if and you going the deals club there a our And to another XXX% deals XX-plus voting direct access the JLA X opportunities strong lender. broader to with the percent management title. book, broader to of are where either

we're the here CIB what paper. relationship to not not we're focused. just not so going buy what That's doing. That's And to We're do. within we're

going will be And overall commit to are by dollars so the relationship. dictated that those

for holds. be best users. $XXX But economics And lead end products of under our best whole, going to of well well do the the the provide those most to likely we're harvest million, needed $XXX but going at clients under the and to as day, and CIB service us, end are -- services, million to opportunities so loans million, customer over the for what's a most $XXX also

George Gleason

restraint ago is threshold actually really of now syndicated over only that over on our in our forth them opportunity don't syndicate consider X a would only in basis. the that We've be loans, but project that. that forward, activation do transactions of and and a RESG, handful announced even I $XXX our sell in also do We a remind a an our and to originated buy million. business, we loans in have ever and to announced to connection RESG but to larger desk with limit that you to so CIB hold Michael, quarter going And ability markets or single X we've that capital

transactions. markets capital capability is of growth within that to in our that think, even put we've So going limit though RESG, credit unrestrictive on fairly help single us I desk really size CIB achieve, RESG greater

Operator

of from Janney. Our Brian the comes of next question line Martin

Brian Martin

things my have of Most answered, been George.

couple minor maybe of Just things. a

within Just your RESG and about group. comments yields CIB the the the

think can under quarter, we've the it's in nice know what types, give those this now general look yield X how our units. I what given just kind got quarter? of commentary yields all different difference on about just belt, like of the just kind a just this particularly you quarter This commentary -- between to any -- both between on those any quarter? But

George Gleason

augmented than origination RESG, with would honestly, I in but CIB spread for the commentary. that average -- fees going there. numbers I'm have opportunities. tell weighted Brian, with front consistent don't not of has various me. to those portfolio Yes. the it's you been And lower get and in I a specific yields our little But been deposit each

So think general quarter's certainly I borne that most been in the results. out recent direction has

Brian Martin

you. Got

should expect Is quarter? as mean, be you within Okay. if you then CIB? it business forward? pretty group And units lumpiness we I lumpiness, consistent the CIB any look expect within we should kind it by there of the should with will, different

George Gleason

Yes.

a did think a bigger probably job you've single got RESG, in RESG size X as of across CIB's And with by lumpy the sector multiple of the deal will than sectors CIB. a been. dealing dealing with it multiple good a economy, multiple you're less I teams average RESG, of economy. working versus Jake be has of describing

momentum deal number in in originations more their time as think significant So that the size, RESG, than they going. have I the probably get originations smaller CIB more will would of full

that, kind I out to more things less think, the of CIB all So lumpiness leads of and averaging and portfolio. with leveling

Brian Martin

Got you.

here for in were kind of looks bit like Okay. couple quarters. stepped opportunities on a last -- the me any I of And little Can income the give just other the fee up the then have fees -- mean, two just side. you last it the

kind gradual into be as we traction initiatives more you and continued ramp the thinking the we on CIB get and group there 'XX? as think should Just about of

George Gleason

think hope getting certainly our say conclusion And of that That's to, sort expectation. Yes. started. can draw as way, from this Jake just you I didn't he his those guys and but it alluded comments the are

climbing slow the expect to from business. that ramp as steadily would I at yes, so grow a but they fee And rate, steadily their elements up

Brian Martin

Got you.

to any anyone this? Okay. don't I Is this property a And Can the remarketing and give then likely is back? the you're point? on go you of know the last kind there. there it commentary if still hope OREO thinking one, Or back about at just that how just delay purchaser asked is

George Gleason

prospective things $X who non-refundable of with $X is has that prospective us and Their make quarter, end We're on million of busy to our different that applied. to the that paid After in sort guy. either past they loan. lot now on casually focus and money wonder the not contract December non-refundable it Our folks we we payments applied million a money of sort a guy. casually. or busy Their buyer the captured a is the loan. property fees got canceled when we've earnest seem sponsor And capture XX applied purchaser of of on deal He's deadline their to things. its that

they with them deal We're deal working and it. They this, we this, on of it. and we'll this, said didn't with So notified that.

us, fine. to the serious close If to and [indiscernible] which them with earnings do title happens, have continuing better about we'll get them that's We're it staking sent or time respectful and reinstating We're demonstrate that. the than contract. obligations remarket just they're lines to that's equal us going going to way to about If to going and to on the obviously notice go. we We're discussions going to economics So open the had, the be that have to money. and property a if the that. they they're escrow exactly sent that doesn't, we company to they're

Brian Martin

Yes.

on Okay. year. Understood. great a Congrats

George Gleason

so Thank it. you Appreciate much.

Operator

it back now Gleason I'll concludes remarks. This session. George question-and-answer our to turn for closing

George Gleason

closing me with remark. close Let one

As we company forth, we're time and of get that to hours. we and so of earnings our end of the trading call more our outside we so at to just bigger quarter, it the shareholders is think the quarterly get have market call of need probably We we a to change noted comments, trading hours. think next as management outside be going

that one next -- to anything so for So we're telling into it quarter. want reads don't I about we're going no you now, do that. to

become be joining we'll regular trading release the time Thank going call concludes Thanks our just earnings earnings to quarter. and We're when call. call. And to our day. a outside details That announce -- Have of great today's so to the you that's much. time normal of we announce hours. for that next

Operator

Thank conclude This the program. does you conference. participation your today's for in

disconnect. may now You

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