SBFG - Earnings call transcript Q1 2018 | SB Financial Group, Inc.

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Operator

Good morning and welcome to the SB Financial Group First Quarter 2018 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. After today's presentation there will be an opportunity to ask questions. [Operator Instructions]. is event this note being recorded. Please now Melissa Martin, would like to to over conference the Executive turn I Assistant. Please go ahead.

Melissa Martin

Internet broadcast Good to morning, website over at being Investor on remind like be the live you that www.yoursbfinancial.com and everyone. this call our I available and will would Relations. archived under is

financial are call Chairman, Officer; Group's President today Gathman, Senior anticipated may Jon SB and forward-looking performance, Lending CEO; regarding Tony me results Joining This operational and Mark Klein, Officer. contain statements Financial and Cosentino, plans, Chief Financial objectives.

management's Forward-looking based could and are differ a or statements to results our number actual risks on materially that expectations uncertainties on are expressed those today. implied and subject from to of call cause

within of to obligation the law the forward-looking identified date except have undertakes Financial forward-looking We statements statement of our this are required encouraged release as factors end which review. you SB update any no Group by a number to different the earnings at after call. of

to now the will this certain I measures. results with over Mr. non-GAAP financial Klein. also GAAP, in call to will accordance the contain addition call turn In presented financial

Mark Klein

webcast. and Thank first XXXX Welcome morning to good quarter our everyone. you, Melissa

tax income or EPS shares year available prior XX% return average $.XX XX over a $XX year Operating or a million we or supplement reflecting $X.X over quarter prior million common this this our assets by benefit $XX the incentive year to our highlights expanded linked Briefly representing that XX% of nearly quarter X.X or comments X% earlier from X.X%, Expenses the expanded over the income representing Loan a Trailing clients from and months X% of performance share XX%. improvement improvement stands at to X.XX% quarter. over GAAP XX% over Our release was that balances quarter deposits quarter. today while over Net year. the increase. net per our quarter and XX.X% first staff, for ago a over improvement the expanded the was quarter a filed quarter include grew communities $X.XX. initiatives the announced $X.XX, on are million yesterday. now the million earnings year or we for $X.X that X.X% revenue million, prior the

our nearly a quarter management more the over ago X.X% million, division ago linked the under in XX% X.X% quarter. Assets but up volume quarter moment. the $XXX were in origination about talk the we're wealth to I'll from decline from million linked X% that year down Mortgage this from just was management the quarter, quarter, over contracted year up and a $XX

Our constrained inventory by production housing continues sale. be limited higher rates for marginally to and

for $XX.X SBA XXX% quarter. of And quarter and volume finalize Asset the Marketers to the and Computer production of our the be ago shop statement quality as of DCM, this or Diverse year our our item over and divestiture first million processing metrics year. known continue strengths. XXX% core finally, we a over quarter increase loan was representing over competencies one the linked

efficiency, I a expand We to organic important levels discussed diversity, course quality. products initiatives sheet products service five continued on our just a excellence for continue for balance to to And like strategic bit top-tier those achieve growth on of revenue each. about asset each customized of set, all for all more scope They study operational household, in and deliver scale key course are quarters. that number and we've broader

diversity. revenue First,

XX%. This XX% for quarter from of revenue our number we over of the lines fee-based business down from historical delivered marginally us

division expansion the volume over lending mortgage close ago declined nearly our represented business linked Our over quarter year XX.X% XX%, improvement line our SBA and the quarter, the results a gap. X.X% while

to been our has SBA from presence augment lending mortgage strategy a the lending strategy. strong start newer with Our

reflecting of income As responsible interest stronger our two the other. business nearly for economy, non-interest lines rates were our that countered Reserve Federal XX% increases to each

as in managed mortgage of especially Finley line in set down three Columbus approximate by a lenders million, bit economy. portfolio of here this hired professionals This producing higher per continue generating a over our lending this servicing $XX for we those revenue million million. net share we've the from And million. quite limited higher as year Thus our in each representing to additional business SBA production prior declined mortgage to over XX region far was growth levels I two for this of rates, in over $XXX expands decline is X.XXX in Our market. but as marginal with rates nearly all well million has markets. not to and with coupled million and that's XX augment growth XXXX. certainly Even our first regions. the distinct number a our variable the to response by intend has banking XX higher gateway our recently bear, rather and billion line business markets quarter lines inventory rates generated to the The of in year production keep $XXX came our household this our To billion our our Defiance to $X continue the use XXXX on the Columbus business we housing mortgage production and lower mortgage the sale to volume, sights declining We with volume. prevailed. to theory XX%. With time held over stronger higher expand volume mentioned of past

continues economy. gain expanding strategy to in and an mature SBA momentum Our

production we for over of quarter XXX,XXX X our million sold loan gains. nearly sale in This

Development quarter. our drive in production mentioned to to model Officer this volume we closer I As of Business with webcast, strategic or our million PR $XX BDO nearly million continue in to $XX leverage us annual our goal and

plan. our wealth XXX on and platform. care of under meaningful division traditional wealth XXX making total in XX million million and brokerage in management progress and We strategic the assets are XXXX million, We our our assets with detailed executing ended

brokerage March care of assets held our of talent that securities stood With XX in division. soon prospects expand traditional million. our by Findlay continue loan our assets our by in The under XXXX Fort we XXX million, was to market assets a our new decline result collateralized our a in brokerage care. new additional large under was on payoff brokerage to assets talent market have at As have strong and Wayne to

second Our initiative to remains and improve efficiency. scale add

drive growth. sheet to balance continue we quarter organic This

Including loan and growth was held sale by XX region our nine total As X.X past held for million, grew million. of I million, million. we mentioned sale. X.X loans absent X.X region quarter. Six Defiance regions Toledo over grew organic million Findlay this our nearly Columbus Lima delivered loan X.X X.X million, XX for growth million,

regional level model our to balance certainly production. and leaders strong business contributed decentralized of Our

scope. Third strategy deliver to is our greater

Our contributing products on-boarding to and and our and efforts re-boarding are in services. our lift households

quarter This XXX to XX,XXX than household grew another X%. less over or our by we

at grew also year-end and to We end. XX,XXX products our services quarter XX,XXX to from over

continues hired that development. Our Chief to Technology the drive Officer recently we Innovation

excellence goals our all we XXXX I'm digital all we remain sold-mortgage we've our quarter a timely as Operational potential deliver strategic we key is as that of households. to pleased of achieved to fourth At our Our clients. with reported theme. this ensure platform of communication report and leverage intimate servicing a year-end mortgage with representing channels relevant million our $X portfolio one portfolio. over to of XXX billion clients

our annually customized those out entryway spoken needs referred the with number a Back Of provide but strategies line opportunities to household the us along quarters, that course address identified that we've X.X reoccurring needs the quarter appropriate not this revenue only business to does XXX also way. solutions. develop another These delivers this staff in client business of line. to to enable turn in were another million

business to solutions of we our our company result a million. to additional As delivered led to that $XX over clients XXX

fifth $XX,XXX initiative nonperforming and X.XX%, by asset million, our Our loans just assets competencies, now charge-offs one X.X due of is at or quality, stand one net past declined X.XX%, basis point. key of core

I'll this the two at now stands our call loans touch to accomplished nonperforming me events let but quarter. over to on reserve shortly, Cosentino, Tony XXX%. Our major we CFO turn

of percentage the this quarter but long-standing It oversubscribed technology are added core shortly. Cosentino we banking story our and and owner, to statement company expectations of previous tri-state were equity volume up to on a me Tier prior banks only now at not ownership our to processing provide divested wish Also small small daily new capital future we shareholder million not three in the certainly but success. our was top impact The X our all focus for trading community transaction XX stands quarter our This sponsorship XX%. from great of share capital. we we opportunity certainly were listeners tell and detail will as number in add item These also driven raise everyone know the buyers times only processing very our these and on results a a X.X DCM added as on that institutional has we million exciting on more to investors loyal well and First to shares and retail common our Xst. small franchise, certainly new well. has of pleased and completed our institutional our had webcast, this shares we in region. XX These order of that and Tony, services to Tony well-known clients employees financials as our our of In base. were to and institutional January levels investors touch end at $XX continued our very shareholder our provider certainly its think involved a base. to for

this We are expand ability in leverage presence and to appropriately markets markets. and of adjacent growth our capital our our confident to

our Now, to more I'd a performance. details like this give few on Tony us Cosentino

Anthony Cosentino

Good Thanks morning Mark. everyone.

million million XX%, and linked tax in the X was as added from delivered $X.XX mortgage, growth million, operating from gains from EPS just and the was when we $X.XX of and and the $XX.X Loan XX.X% of quarter the X.X the XX% $X.XX Highlights agriculture. $X.X quarter. or XX% year year-over-year share, revenue indicated, $X.X X.X% $X.X quarter to down up prior year, netting tax adjust or income $X.XX prior share. from rate or linked Mark from Reduction business or EPS million up to for income sales for quarter up that the per share. $X.XX of slightly from the million prior include was our For net income in per our small year net up loan XX% credit million the per

for we expense sale XXX,XXX the quarter reduce did company the in we which our the our of and shares nonperforming capital quarter. And XX As in million we've we points. complete million processing in lastly February now for common continue the DCM $X.X The basis Mark to is XXX,XXX in count our completed about ratio to down which revenue raise after-tax. netting indicated, added roughly $X.X to average resulted indicated share as

as has comparison you I a in I'd reconcile few growth. thought year-over-year imagine minutes EPS Our can take just noise some our it. to

by had $X.XX quarter provision prior as expense the the million sale EPS our the this added the $X.XX of EPS offset was no reduce added year share new $X.XX per calculation. had we $X.XX, for we $X.X XX% shares netting our tax This we of by in indicated in rate $X.XX earnings XXXX. finally QX growth $X.XX The This by and our which provision – DCM reduced in quarter. as year-over-year of decrease

down break loan balances asset up yield slightly earning by we income to were further net year and interest margin, basis basis increase up As up income year first XX.X% up yield average with quarter. the starting increased $XX.X The of by linked quarter points statement XX.X%. End-of-period was from to from and the the prior XX million, was of XXX points. the an prior XX loan overall a

have rate In addition sheet increases the Fed yields impact, higher. driven balance the to

in reveal will to the market rise in some gradual expect see increase pricing. rates starting we loan remainder are of We loan a XXXX general and

points XX% experience interest mortgage On were we of was volume. taxable Total with at from costs points prior an expense fees by year, the combination points. funding variance from basis increase the in the loan to basis higher up due down the almost have basis and but margin the risen at XX quarter. continue two on costs, our the deposit variances prior growth for tied to nearly by from reduce Loan loan X.XX% prior origination softer liabilities exclusively basis coming is all the and points interest from XX of interest-bearing XX driver. year has of income linked to -- with a income quarter, side, in increased cost quarter XX the million, million the the from from clearly X.X equivalent linked from of prior loan basis influenced These XX%, points up increase interest the $XX year up total increased key balance margin volume. activity loan has Net year

We loan percentage income in the pipeline of growth range are income the growth fee continue Total of year confident this the our XX%. quarters through to revenue nearly $X.X XX% from up total prior a as non-interest was remaining that million provide will year. same with

mortgage loan the SBA offset gains sale of origination market. software As $X.X million

$X.X in quarter, per which million included net was of of finalize had we in a fee sale the and for of said $X.XX income roughly or XXX,XXX the fact we As the sale revenue. quarter processing income in from share company a a

million During by from quarter. the million million $XX.X but the from $X.X of year length up prior the or quarter were mortgage or XX.X X%, were down originations XX%

our XXXX remaining this the XXXX of recapture prior to were from XX,XXX were quarter SBA commissions. elevated from the allocated portfolio eight provided tax a prior billion XX, indicated the rights of servicing from the servicing or up This rights now total deliver was as quarter's rise we Mac expense basis have some volume and a over points activity. This quarter. servicing points from XX impairment The had by this on are X.X facility refinance for up new credits Expense calculated Freddie of up our of X.X% from DCM X.X the million the the past in the X.X volume up Sale or rates, expenses compared billion revenue XX% and revenue basis in XX% X% and our were had slight XX,XXX. has up in $X as some of servicing increased which prior from mortgage portfolio the value more purchase gains value for XXXX. from prior effectively reflecting is X.X%. increase impairment above expenses were or fair XXX on came of X.X million operating quarter in linked was quarter. million, year. added away. of X.X was on link March and The and XX% mortgage has our the expense more quarter our quarter levels At and sale linked of million. points gone $XX.X $X.X year is market million $X.X $XX up between with is the growth. We Mark at quarter million XX.X% revenue to also higher Total year in market we than which operating year up the the temporary quarter basis savings staff and the did And total sold $X.XX of the XX.X% slightly Total pace first significant quarter million XXX,XXX to as

finally XXX.X real As commercial our We the the are and of nearly the XX.X% loan outstandings estate in had from we to Compared up of growth at XXX, every category, million, followed million, the of loan led at to real XX.X from balance XX.X million estate company. linked of the sheet, year, million residential prior total the book assets by prior by we year turn grew XX.X quarter. XX.X. with stood

pricing XX.X new relationships rising X.X%. The a markets. prior clear were year up deposit from million XX.X rate of from all It On up deposit quarter million, is is X% existing or the our that in growth competition side, by and by elevated. and for we deposit the has linked the been

treasury our to we emphasize our our grow restructured in as outside retail deposit have group and loan expect costs more We especially sales, fund to ongoing we management pipeline.

XXX%, and of in million, the at supplemented up X.XX no in level the for XXXX, at XX.X% is the stand asset growth nonperforming quarter to year. to of of company our credits loan and assets just in million total from points. points, of XX% million. which loans of up or this ratio The ratio. XX.X% prior our slightly up Because with nonperforming now And the reduction X.X in losses for from compared loans we are our Due have and quartile our year. with prior assets allowance of Included the linked X.X capital the of elevated currently. million just million quarter in levels quality a the we bodes level with provision we at is These absolute great our call the As million, asset nonperforming capital, back down loan these places from XX,XXX higher basis growth, asset quarter nonperforming NPL a declined shares, These top and turn nonperforming have assets accruing than loans. median Capital nearly at of NPA XX at group, total of over allowance net finished I coverage million of slightly X%. will The did basis XXX.X X.X extensions the restructured allowance million X.X in quarter maturity growth XX million net peer still capital the of to significantly credits. allowance ROA would now XX which by finally or basis restructured resulting XX% you. nonperforming quarter A X.X down total our equity income of level XX/XX/XX quarter. at X.X the now to common absent quarter. prior obviously, our XX We million year, X.XX% X.X loan prior has total million prior our in the the is provision up loans be first percentage We million to to had by raise in peer of or was levels our regarding of increase points. total to X.X and to of quarterly us also the year from loan nonperforming well XXX given XX%, all from ratio the X.XX% X.XX% year Mark, loss expense the look year. were from total asset start linked

Mark Klein

Tony great poised a start to Tony, strong Thanks job. performance economy, strong with a Overall, as an expanding was margin, stronger it are indicated deliver another to quality XXXX. capital certainly we position year in great new and stable much certainly asset

desire Our our expertise temper Melissa? doesn’t our marginal for lot turn XX certainly our to favorable opportunity. lender just questions revenue operating growth it and the commercial I Clearly, the portfolio reach of and with back balance structure higher expand, optimal building business is marginal comments. deliver and our shareholder call Melissa new to to average remains in but markets value, million, cost revenues leverage since organic lines. and now in sheet will

Melissa Martin

Thank you, question. are our Mark. for Debby, ready we first now

Operator

We will question-and-answer Instructions]. [Operator now session. begin the

be are at would questions for our website like you Relations. today’s call will to we remind I accessible waiting While that Investor under www.yoursbfinancial.com assemble on to

from Brian comes question first FIG with Martin Our Partners.

Brian Martin

morning good guys. Hey,

Mark Klein

morning Good Brian.

Brian Martin

good updates. Hey,

me. a things Just couple of for

increases, can commentary want if you from that but expect margin. about the in, how just deposit little guys, questions unfolded, couple rate a and to quarters, up, the I over the of and at know, a you picture bit just just you a Just takes looking margin about the the rate you puts of how know going I kind a level. you to more don’t maybe just the kind big next current and couple take kind more Tony, for of cost kind environment kind talked a

So give little helpful. a that you on color would can it be

Mark Klein

deposits Thanks increase. going Certainly, betas question. the us to certainly are today. know our for that thanks Brian Yes, we on joining for

probably at plus are deposit. XX loan We percent to

no Tony with I certainly and quite we side but as great Tony increase we’ve some keep our to know about got to received the increases it. and side, the the comments pace the you’ve management Fed street question going were So that. lending on on on enthusiastically, We’ve strategies clearly treasury out indicated, additional is some but there betas got are

Anthony Cosentino

the points have immediate a of non-performing, that million those question. increases had passed rate would Sure. quarter. margin Thanks I floors. X XXX bit we we interest say little about QX relative basis some We added as to look for that that going Brian by our one-time impacted we directly are have a event. out of to this loans about captured forward

impact don’t So, moving Columbus our driven in is is of we all it’s funding. any of some normal rate Toledo of of candidly of that’s by legacy but seeing have of to and swiftly kind are already going terms we which lot probably very Deposits fairly, to some of sensitivity, really rate our very utilized increases. can $XXX,XXX Fed low-cost we’ve competition, competitive competitive, a is – markets. our out markets in we be

Mark Klein

lending, last deposits. going part renewed cost one an and so C&I we Brian, on to have which market we that to core to and best obtain broad opportunity a Just transactional footprint go focus diverse that to certainly lower various cost about hopefully the the is we strongly marginal to markets comment, bolster our funding plan of have good is those

Brian Martin

Okay.

mean level? I if we would general is guess I one would So you maybe the I current how rate of another get more bias then do going benefit the from increase, the the side, the the guess trying kind rates pressure bias where you with a another I funding I be it bias the to one given seems as late, downward get on and it’s if kind opposed think mean of towards on loan is leaning you couple upward bias, year, the maybe about this so suggested the mean, which understand it like are bias more side here? environment the on just higher to margin

Anthony Cosentino

I the rate quicker paper that loan for the would marketplace certainly reaction have we in us. bias the I increases front on on say would on are deposit would we’ve Well, seen than the good say seen be yes, side.

might loan get I be think little It a pricing there. delayed. bit the will

We loan of some XX for on and XX most that side the rarer case last rarer that months. to with to is and four the are starting on us had it been something a see inklings handle becoming the not

Brian Martin

Okay.

maybe So, it’s funding have to up bit the the the down do side? flattish in little catches what pricing with are to a loan until to you going on near-term

Anthony Cosentino

right. I think that

Mark Klein

we would seeing say seeing because everyone the greater side, exactly Brian a lending I knows certainly advantages that’s are what and as scale. lot certainly Tony still the mentioned we’re pressure on of of

So, and very one. we to competitive that’s going margin probably before see tighter we bit widening are see a

Brian Martin

Yes.

mean, quarter lot can the I Okay, you how a thoughts soft as little the and people. the I also pretty the a and like that are on thinking this your of kind seasonally just sounds it? geographically color that on a for makes it’s mean it I on far the for guess well of kind I you Maybe it quarter as year, guess loan of kind sense. to most markets year. outlook. appreciate are was put I like seems of of doing about growth comment appreciate a quarter loan start this I good

is digit you the of about the that digit, kind low of type growth kind thinking guys year. So high are how single balance of double that of

Mark Klein

then with cost look our average I certainly and million upside add marginal and structure Brian this, comments some Yes. color structure, potential. revenue marginal have our at will $XX the we’ve Jon balance, mentioned I as couple a portfolio I if of got of make lot and to you a but will

a the from can past real for the it’s of house past eight cylinders our I of we in our XXX the have fire. certainly way of of you probably double would times we to equally and that certainly on our vehicle kind growth is of five with are in that I going, have think and years them four I or begun and number digit expectations poised growing economy maybe a are think and seven We or referencing the million, and we agree hit see time to time several in high that think couple from like six them Jon

this I John, all your but what good So is are thoughts? think,

Jon Gathman

it’s the quickly to Mark There a newer I so of second and think to of fourth the agree year, we are tail-end to to had Fort Wayne quarter. and that that quarters the the here notes. forth. good first tend see fully right the about time We’ve and doing our earlier worth Toledo, and as pipelines, well are closed to the know Findlay, towards off right up staff, No, everywhere are start where here pipeline alluded are fair XXXX. build the drawn in third we are got Its we the is also significant draw markets, notes optimistic of through quarter a obviously and some just we staffed full in with that second we amount of level those can weave places the people have I the

Brian Martin

Now, that’s Perfect! helpful. very

markets So drivers markets it unfolding. would guys metro this bigger are I bit of year, how guess little is there of thanks some maybe the like of sounds growth is that guys. a kind you the see In things the

Mark Klein

that less of it’s and Brian, Ohio Michigan the deposits for that have Well play X% than about and I $XX we in long, certainly, is think a worth clearly the growth market in of talked have and and total. billion about counties in long we Lower specific markets time share, Indiana, high we win low

base. we certainly opportunity high gather deposit expect deposit share larger meeting market our and quite to our fair organic growth So webcast, and for in loan is that of as annual I our mentioned

we higher well expansion So poised a to asset. lot to of well staffed much opportunity and of as level this a certainly mentioned are and ride Jon economic

Brian Martin

talking your guess kind side, businesses, lead Perfect! just and mortgage. then the Okay. SBA the the, I of on income fee about That’s helpful. the both And

a goal You was it right XX be gave know do hired color are lumpy? to of it’s of you on volatile? just XX. know should that nice time, a how expect little be some over you of you as consistent goal, of business but be quarter, I kind to Do have think business increase I we little goal expect well, but and your I pretty bit folks to million as had your your some this now think we you it where going business able that of about and and kind the going SBA that about

Anthony Cosentino

Jon?

Jon Gathman

we virtue we on out SBA continue by level as specifically. of Yes, I to that expect think bit Well, we adding a to expect BDOs.

We continue to BDOs. add

believe in hiring currently process. We too. We’re

offers a couple. out some to have We

So, SBA we it two bit, think as smooth on a close. loans had out the saw but we first quarter, that large very you will

those to some large is variability, are continue and out. numbers to but plan to direction those to our So, numbers smooth continue our going create

Mark Klein

Yes, just comment. Brian one

We very of an lending. knowing We have kind what doing. SBA idea we of are on bullish are

As quarter of year given the at were of active in out are XXXrd SBA the that third and year-end of of we XXXX government fiscal banks XXXX the US lending.

have we expertise. So, the

past would a walked of XX if It played would or that market on we that’s didn’t have in have away from that We expanding are the the was fringes a we space our million have we done. that never we current before. out and XX product SBA,

portion of faster space. like We comes place nonguaranteed to the like C&I our the it some us gives balance and of incremental to sheet market. building in growing the when with benefit it we So go some certainly

achieve XXXX annual volume. $XX our lot and vision and goal in like of intend So, we generating we million it to a

Brian Martin

the is sheet Okay. nonguaranteed balance today? on And portion that how

Anthony Cosentino

on level. in have books here since up of kind XX.X about total sit today, our about right and XX million as XX% that done got We or volume we’ve about we so average we so, million ramped on

Mark Klein

a New on way the the that a and it’s win-win ran, round nice balance Tony, And so two] [probably generally all sheet on front. incremental York

Brian Martin

the Okay. maybe year-over-year in just thing the how couple just try it and your environment. of about guess had quarter Perfect! challenging nice are there’s a in are kind the mortgage hiring And you folks and that to then I thoughts a mean same of and understand some up rates, guess unfolds big expectations of on a been over your angst maybe of sounds – balance I like picture the guys rate just market increases also lot of that, year. just I here guess what I mortgage the offset higher just you

Mark Klein

higher people our rates certainly our of nearly company just we various were if greater Well, and million that dampened we get our I new all per to annual Brian that certainly this is, to We something million service could production inventory so XX%. high per household. number had more media variable XXX, our that’s household times service brought get backup XXX budget just brought are Right. offer million, the our mentioned The three as XXX we and people have the our number and presence an Columbus annually. again and number. and to you a and with the to they social Indian. bank retail delivering increase year that, high channels now leveraging only year, but household could we’re expectation client And producers reach if said to XX of eye, a increase bet but expectations to we meeting and webcast, XX% we an so past XX and than get are on three brought our to a one goal our high of size each more budget in have have in XXX is the out variables can we those we again but per XXX by of Last and isn't constrained of are I in in a out northeast just two XXX producer very

for of for opportunity poised markets way all opportunity new and Financial around. certainly are more lot SB a So,

Brian Martin

you hired Okay. there on many that said, of have how missed is And I what but said. you you two out was said then I it a and Mark, recent people hires, can lot offer you been guess know I recently front. guess I you

Mark Klein

Yes.

two in high footprint. producing Indiana, individual and additional in the us Columbus existing a We is more northeast one, and are going course high have on we producers in each out looking by our which brought expand to of an currently for producers we just to market of offer

in producer million more know an of take we couple least to average to XX several of we million if gather XX at have this again, we So, per upcoming quarters.

million again So, to is again, and of dollars. variable on deliver not of we're plus restructured the we’re XXX the number delivering, producers intent

Brian Martin

Right.

guess the quarter margin, and just linked basis, helpful I year-over-year. That’s Okay. up gain of on on it’s look like but sale a kind down. It that was little a bit

unfolding? it's it’s at see you today level, where do around feel sustainable Just it that like how at does

Anthony Cosentino

pricing pricing of we’re would past. hedging confident made is be XX to a bit think XX structure know with rate the on that tighter, we’re little move to years to you we look the think I points our in X.X% range back efficiencies I clearly this were as I higher some X.X% Yes, be if you couple most X.X is at We going better than as backend a some in basis with but range for year. and

Brian Martin

couple me. Okay. Thanks for of Tony. And maybe last just a things

about see kind the X.X you you sale, anticipating the or benchmark least are pretty good unfolding talked out of run in quarter pulling the to or do get current of next with The you on talked what the this do in quarters the million out You divestiture is couple quarter about standpoint? you budgeting kind a rate kind a the about and how how If that think expenses the noise the from the so of quarter. guys that based color simply we or that Tony and in back expenses? at

Anthony Cosentino

if the had related of a some shared some $XXX,XXX the is net-net mean, to an million. probably tax out impact which initiatives X.X call we events our a DCM, people, one-time take with we we We I number. of Yes. will it

mortgage level significant is based that per drive side, based So, origination. million it'll down on volume or X.X a good SBA to upon million mortgage then a the up origination think upon $X.X really variable and and baseline, be would which I quarter

Brian Martin

Okay.

decent So baseline. about think at as least a a to level that’s pretty

two, the tax the then just rate. And just alright! last So,

change where it’s from forward as it's much Trump I a I think rate good where does out an a today, with now today? at is here, going guess pretty to modify it that or we’ve effective this use level tax made

Anthony Cosentino

had quarter XX% stuff. we to and QX most first but incentives we not a the upon we're got of pickup, between a a do and of FASB that bit much municipal We noise of in kind going volume XX of new our high based some little in be to with probably little so your stock the XX the

probably XX% we We're have. to would think to tax floor the So certainly rate the would end trend going XX by year. I be closer the absolute of

Brian Martin

if how or sound been you in part guess Okay. just put as about on out the guess active leverage about as Perfect. M&A That's opportunities helpful. would external thing, opportunities to new past? it commentary got years, think on helpful? of to there's any be far opportunity guys capital obviously been I seem overly just – in work And there there what of thinking the I the guess, I we guess can just of side haven't to have I like of thing, be that you're there offer then the the through it today are guess the a plenty and to just number M&A that organic just you are that maybe I than you how wondering last in guys M&A the color just side

Mark Klein

of us book, potential certainly little put sure, Brian found some comments its in we several here. a meaningful the currency years the game at the but and kind in that and and have Couple of had in partnerships strategic great we've of some will arena with XXX% some bit some strength I'm conversations in with of Tony last tangible that certainly comments, now –

our we capital, of that the hand that works. growth have organically. maintain that come a know we've concentrate from Keep better be the but We now capital value to organic balance XX% what to that we than effect really rate sheet growth profits sustainable times our few incremental out primarily is been could where keyed our on. by going grow So, and But is own ever so keep out. on generated is capita capital, going leverage the know that just lending to we we which XX have about given our money the how dividends,

Russell Now well toward a got at decile group we've could now peer meaningful little having XX with and that capitalization the conversations of XXX our capital. market our that's will for. more billion $X want mark next are we that partnerships a which above top we're bullish to XXXX, full that ticket get our the really put certainly goal and with performance bank strategic looking that what and That's quite a and to new-found the getting us that more us overarching level on possibly we're do And something million some

Brian Martin

Tony, ahead go – just And Okay. sorry.

Anthony Cosentino

just it. find I've No.

very think gives check We and was is level a why been book earnings, consistently we're It raise at us. bigger and right have on so of fairly looking we the positive critical to and somehow us the someway to able this so towards with grow to price capital the of the a marketplace and confident be front the we deals right going transaction. in M&A based is number very our feel that company an expanding

Brian Martin

of guess are kind of from a market Okay. And I it's comments would on that of contiguous, how like looking? will What guess, could are see maybe expect how you just geographically, if it lead geographically? you is we the guess potentially guys more where in sounds a different I kind kind to parameters entertain thinking are I you area.

Mark Klein

grow Organically just and from we billion. the products services we it X honesty And some We to in quite and there. have think billion think the market. strength has been the away shy key in We certainly in X.X opportunities talent would focus to to market. best there are certain

And footprint there's So current certainly of of increased emphasis an would think with contiguous we each. there certainly focus. be and that we're on would then pursuing on today our out the the a borders fringes a which number be certainly opportunities

Brian Martin

right. All Okay.

that's taking all I the my and I appreciate I think had guys. time questions.

Mark Klein

Great.

joining. for Thanks again. it do Let's

Operator

remarks. concludes session. our the answer Mark to like and for This question back Klein to I'd conference Mr. any turn over closing

Mark Klein

of July quarter for results, look delivering joining this Good on and second to our year. bye. Once all again, forward we thank us certainly you

Operator

you now presentation. attending The today's for concluded. conference is Thank

disconnect. now may You

SB Financial (SBFG) 20 Apr 182018 Q1 Earnings call transcript