United Community Banks (UCB) 21 Oct 202020 Q3 Earnings call transcript

Company Profile

Participants

Lynn Harton	Chairman & Chief Executive Officer
Rob Edwards	Chief Risk Officer
Jefferson Harralson	Chief Financial Officer
Rich Bradshaw	Chief Banking Officer
Brad Milsaps	Piper Sandler
Jennifer Demba	Truist Securities
Michael Rose	Raymond James
Catherine Mealor	KBW
Kevin Fitzsimmons	D.A. Davidson
Christopher Marinac	Janney Montgomery Scott
Brody Preston	Stephens

Call transcript

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Operator

Good morning and welcome to United Community Banks Third Quarter 2020 Earnings Call. Hosting the call today are Chairman and Chief Executive Officer, Lynn Harton; Chief Financial Officer, Jefferson Harralson; Chief Banking Officer, Rich Bradshaw; and Chief Risk Officer, Rob Edwards. United's presentation today includes references to operating earnings pre-tax, pre-credit earnings and other non-GAAP financial information.

For these non-GAAP financial measures, United has provided a reconciliation to the corresponding GAAP financial measure in the financial highlights section of the earnings release, as well as at the end of the investor presentation. Both are included on the website at ucbi.com. will quarter's on and SEC the Form replay this third filed presentation and company's the the of night in last X-K call website of at earnings section investor release were a Investor ucbi.com. Copies Relations available of be with the may be Please statements that representatives by this during made aware of forward-looking call be United. as considered three other risks and XX-K, on page of Any company company's filings of as provided in forward-looking its uncertainties with and information light well statement by the the in the should included Form the be website. XXXX its described on SEC I At time, Harton. call will this over to Lynn turn the

Lynn Harton

morning, in and the This to of the combination We joining good closed a earnings Well, a Florida of $XX of of level income their the over thank our at was for National Seaside business and company. you acquisition call. our led slightly record the the pre-provision million. quarter Bank for busy and continued all certainly quarter of growth pre-tax for

per share for basis, last at GAAP but period a operating the improvement earnings on significant last quarter. from came from quarter a an decline on which $X.XX $X.XX basis, year, in same represents the a Our

we equity. X.XX%, XX.X% Our an common exceeded and XX% assets in common operating on tangible return and our on basis, on on reached of return drove X.XX% was on assets return a equity that our return

decline the we to down securities low experiencing growth our loan loan the industry and to deliver and At partially to outstanding the rate work and their offset cost continue to we overall the deposit to of rewarded time, X% Our and due given drive environment, same of growth continue bankers yields. were in investment with XX% are rest annualized deposits service that annualized the efforts. we

XX%. our during from of Even declined efficiency during consistent future at quarter XX. the markets above but non-performing this margin of this basis as to low we're fell credit Both be with September though, predict Our continues It well, the continued XX to record decline net quarter to with effects from perform X% operating as reached for XX% just pre-COVID difficult last continues an the points interest shutdown. the Loan basis, net time. deferrals our path environment. company to the rate margin our of a of quarter COVID-XX by declined charge-offs Credit at ratio from to by certainly on last a base client result nearly rebound the payment be loans and results performance and levels. encouraged the

at now Our for stands loans. excluding PPP X.XX% credit allowance total loans losses of

strong was to throughout our So, to now. take focus continue that a it bank for turn I'd to on efforts you'd to to the and given the the quarter environment hear like great customers. team Rob by more specifically and over reflects credit like of care the for quarter, our and company know this details maintain I

Rob? So,

Rob Edwards

going to I'm thank my seven. today. start you, being on you and on the Thank comments Lynn for call page

quarter by core a loan this coming million $X.X grew portfolio with $XXX on coming Our and billion Seaside basis. billion from $X.X

at grew an annualized pace. X% loans our Seaside, Excluding

and hires turning as picked new success many we've in takeaway in bit we've PPP Our lender our loan the had in full up of growth share and in from also 'XX quarter, into a our market customers been XXXX relationships. successful early

the loan initial we the provide eight. On for and $XX the this quarter. marks credit In Seaside. on there slide marks Moving onto losses are for interest in marks credit rate page total, for allowance million

In by healthy. quarter. ratio non-PCD as in we a loans allowance we we page increased the million million increased which the X.XX%, look provision quarter, view nine, included to $XX allowance also losses million, which to total, for stable which $XX.X our On the the Seaside's double-dip. to addition was losses and a credit at for CECL about credit million quality, for $XX.X commonly in In set $XX our credit aside provision called loans

quarter an the from Our we net now charge-offs our X you points, On to look recoveries. occupancy of XX% deeper deferrals, weighted a the average were which just of our ongoing XX of we third benefit represent our basis have included page X% review improved improved from hotel quarter. Top XXth the last to total in seen Through loans. strong XX, increase which give properties, at significantly stabilized and in June

our we're seen our loans. the two improvement portfolio, Navitas additional total to have of total glad if you during Navitas amounts discuss loan also than the There I'm and our With I'll over the on books in retail other deferrals. CRE just that, Navitas note on is higher improved remains these restaurant deferral and deferrals, and any restaurant to and to to capital. XX% pass as remaining hotel in our well deferrals detail to questions. we've appendix books, While it pleased Q&A as of hotel rate Jefferson that within X.X% portfolios

Jefferson Harralson

I'm you, XX. on capital. to on my Rob. talk Thank going page start I'll comments briefly

our the and capital Seaside peers. the we closing still with Our deal above in the quarter came in ratios ratios as remain expected of

equity margin interest quarter. and are depending year remember as we page the last income that on TruPS call environment, that keep on planning debt now, preferred we hold and in the but that to in and given The an eye capital the $XXX for is on this have XX. million And economy. senior we million could will in raised million $XX You debt senior we we $XXX do net

from Seaside. interest help primarily $XX.X with net was last income Our the of quarter, million up

end well. initial NIM marks Seaside core offset interest margin the and as got of The drove points came what quarter loan at basis was net by in last Our X from points down XX are impact points. of core accretion. loan and was margin XX QX Seaside a the core down increased with mix liquidity basis accretion in basis this and the The as as full increase came NIM surge we compression lower the the

PPP forgiveness stability and QX. excluding success again mix relative Excluding margin Page quarter growing acquisition. cost our with deposit We core the in loan in XX accretion, the in deposits of core of had annualized in we our shows funds. expect our XX% deposits and

that on Our were business $X.X the QX that and last from and cost We very Fees of quarter. in to is XX. result our million that added once last previous again points mortgage page progress. deposits encouraged was increase of our driver record quarter. main pleased basis points fee just our from XX $X.X income, quarter improved up XX with from million are the we The from were $X.X with basis up million under last Navitas by

other environment, not volumes which mortgage were expecting. in increased, to the higher our There the fees. swap also result. we charges from our QX items With our in $X that fee increased customer increase last actually and drove service loan quarter our percentage encouraged higher income We normalize were sale in the and on notable started million gain were volume

that on that page PPP our not swing in saw securities You release and gains valuation we may On million and loans. give in $XXX,XXX well servicing about positive asset in the the $X we investor repeat. an deck had update XX, SBA a our in you

PPP have portal. the on completed into documentation are work Our and customers forgiveness of and about XX% doing input thinking forgiveness customers our our

you $X.X We included documentation questions. SBA Seaside Rich million XX, the forgiveness. expenses here the were page layer our contribution Q&A have to for turning PPP of started our the $X to in and just run that rate million. about in On loan to foundation when to flat the is relatively answer

moved increase XX%. efficiency and had we flattish With the expenses, revenue our as the to ratio

$X much comments. we did on cost expect to quarter closing feel I'll of for way savings we convert confident the we have in With savings not to systems that QX, get in million of Seaside and cost the targeted. pass we annual it that, Lynn back While their the first in

Lynn Harton

Thank you, Jefferson.

of of leadership, was set Directors. admissions, Clemson Clements, addition University as know and look World to this XX to graduation we and and in quarter funding, as straight I has forward of push Report possible for Top XX for athletics. years. one News us all our level. US records the universities rates, encourage by event Jim Clemson has exciting highest United & of having been the public research the Jim Jim's to ranked Another at retention Under Board perform President enrollment, Clemson

remains So, to outperform hard to me room which that strong liquidity Jim, are cycle. ample to due throughout now. are the and all an team the levels is to outlook well And with that we performance, here pre-provision this welcome predict, company, I'd some of of to the income, outstanding United. in during And positioned solid while economic with point capital like speaking out

and up to environment. quarter more give now I'd an and them the open to on like questions So, for it opportunity provide you for the color

Operator

Thank you. line first Piper [Operator Brad question Our comes from Instructions] Milsaps of Sandler. with the

now Your line open. is

Brad Milsaps

the just improvement parts I like quarter, and ex-PPP. moving how like Hey, peers marks than the the this nice in of side deferral XXX provisioning you've lot looks are with seen I Maybe thinking reserve a the if you a deferrals. start you back just on curious to the marks, seen the reserve have add guys good quality forward on Maybe have some kind guys of existing morning. still asset reserve loans you on of the around improvement and XXX, lower but but touch of wanted know going the equation? it based about

Rob Edwards

Rob. it's Brad,

made forward, would components. primary up go as As as provision three three be far the it things really we goes, of

not reserves play lot course future problem then in course, then of in provisioning the in the also reserves had we've in charge-offs some loans need to future I personally could -- and growth see provision. think that also, an specific the see Of increase loan a on we'll for -- and drive additional could specific the and And you also that would continue role charge-offs. a

driver it As play is allowance the uncertainty it if if the high economic itself pretty while we of -- are close to remain out are to and environment assumptions would relates is to is. -- the itself, assumptions to it primary like modeled, there does rate difficult where degree predict, our the the expect the though what current very rate

Brad Milsaps

second Were changes criticized big there list quarter? the the any from or in classified

Rob Edwards

exposures by hotel -- about some we and of $XX $XX care exposure. million we did and classified $XX in million. in senior the criticized about add add million Overall, did of So, increased

of So, with the and we've stuff moving success out to criticized I so coming make in pleased the of criticized been bucket out through refinance much had really actually how room experience in. classified we movement was to classified and of continue and and some credits successful, for pay-offs

Brad Milsaps

know I of last a just loans sort quarter? I credit. on it's Great. you Appreciate be. quarter. kind at mark maybe there And million slide then, plug $X $X the the this at benefited difference And is the I the loan guess, on end Jefferson the by I from quarter sale a number for if look sort from of was of number or away pipeline multiplied one mortgage. mark the it also the of mark including that the gain XX think million the what Was on number would the between sold of, table, follow-up

Just of how kind forward? mortgage think curious about kind line kind of of to going that

Jefferson Harralson

manages us It There mortgage future pipeline there. who about slight pass I'll briefly. what of this is way quarter. it. a to the I'll to seeing for much about is write-up that the over he and start talk think a Rich, to So, more business good was

Rich Bradshaw

Hi, Brad. Sure. morning, good

of XX%. do production see terms coming about probably QX, we production In in down

while refi's are We seeing decrease. increase purchases

And margin that of right was the of then well, seeing the it down of next in and is we're income, of mid-to-high in something kind experiencing, X.XX% now as what QX. a of we're healthy through for think quarter terms probably currently X.XX% and In we're terms kind to what quarter year fee the will projecting QX. hold is go first end in teens X.X%

Brad Milsaps

down? -- you as you think a kind the in commissions that. is of to mentioned that that I just those about? And you about mortgage follow-up $X.X up million. Jefferson, were some is deck subside, as relief Do get expense comes -- think revenues mortgage Great. how that to Do

Jefferson Harralson

definitely. Yes,

you up they're $X If from about QX. mortgage about million think commissions,

We also as time well. have there that's some over in

back. mortgage get you on depending $X far a think in, I million portion comes that So, would of how

Brad Milsaps

Great, hop I'll back in queue. the thank you. I appreciate. really

Operator

you. Thank

Truist with the Our question Jennifer from next comes line Demba of Securities.

Your line is now open.

Jennifer Demba

I area Good you just where you. potential banks see and most heard to talk We stress that the morning. hadn't could senior a be the Thank loss think in book. are amount It in of seems this mention greatest experiencing you content quarter. about the you what Rob, you also loss curious of very wondering in be content think much to hotel living? if to what could be

your here what curious, am UCBI's on I thoughts So, book. Thanks.

Rob Edwards

Yes.

maybe So that, a with to senior our we portfolio classified on -- senior exit on start that we credit interestingly, care care a any The the that that book, quarter. not through did I'll on sale, in did able this loss were this. was sale take have

they about So, the optimistic be where the as anything care senior is and that we about than them down. not have we're to course, is stabilization. senior the of of or actual would not But dropped it's more business. than core mentioned, was as care have one in pace reaching really so we're It's of really portfolio. anticipated anticipated, level, -- couple just occupancy the there environment which put continue a stabilization, longer What taking in it's more come is seeing we would I -- have way the criticized seeing properties it's online, we because space now

I thought. that take just so longer that we to have business. feel been feel Now, about than We there some good would have otherwise may credits get --

side, hotel interesting an it's situation. the On

We limited running the occupied well. the have doing Interstate couple example, Carolinas those are we've and XX% so XX% of of an properties to as properties in got a XX service very and side on

hotel feel side hearing urban that As about of I we the the is more you're some business the on the have. -- probably concern portfolio aware optimistic environments. and others, from type travel in

We have hotel in of markets. a to the made top exposure three four hotel our to focus our limit to folks it

operators horizon. So, a it by hotel environment their difficult resolve time, random been own to longer true it's they to and not with origination. have been resources like have we've don't at just they get our long are They've a Those they situation. a people and -- scared

we occupancy I do So, with -- a good feel we average to space. and about think success is continue have them, that as with properties some of I -- of is operator XX% them but the below couple weighted a are have what but drive working feel the the I we're to good think in quality and I that we'll going XX%, of occupied

Jennifer Demba

so much. you Thank

Operator

Thank you.

next Our line from Michael with of comes Rose question the Raymond James.

is now line Your open.

Michael Rose

of just start this some level margin. thinking how quarters. high next the wanted Thanks PPP couple fees through on with my questions. for Thanks. get walk coming in, your of taking over the be a the we the guys. Jefferson, Good us couple morning, pieces? of hey, deal with on, coming on Can you moving -- just pieces especially should thoughts the we'll kind to quarter, some Obviously, moving about

Jefferson Harralson

Yes.

ex-PPP. I'll So talk going forward,

book have always X.XX%. $X.X us XX is basis a have been we turning million $XXX the CD points. that quarter for of but at have due One at whole before. headwinds We lot now things book, into coming is are has CD The tailwinds a that next tailwind been billion

lot a opportunity of there. So,

putting work. cash have to We been

is build cash think start PPP this can to ex-PPP you've seeing, been to in about going that a talk So, We again, reverse. second. I

that you'll portfolio period the higher. was in securities notice So, the

So, a you're there. mix getting positive change

good some have this loan looks -- we I quarter. that's growth would helping. think good quarter next that We pipeline

so look but LIBOR faster yields. headwind. -- quarter, rates -- it fallen deposit a into than the and as little a trickle the loan Net-net bit of to down so we the have fourth So, just far continues hand on our our that's other have you so the

couple that's then be am core flat the that margin basis quarter accretion maybe what like -- in and I maybe points, that thinking on feel a this and I now. can comes So,

start put start some core some we work we to forecast we'll that but to flat do a margin seeing PPP, to from expect and margin. to keep to coming to forgiveness -- with work to that expect put -- that is cash that with best and in Now have that help now flat, go --

Michael Rose

from operate growth heard we some sound markets little of your And morning bit [ph] optimistic helpful. this more loan banks a on they very That's outlook. that large the in that

middle are the of securities once PPP the run-off get appreciate loan But So, color the book. into the guys on you point we and And which more growth there starts offset same some -- the seeing actually year, thing? expansion? securities back next I where a some is to you Thanks. than actually the mix the through of book positive you to and the half added get NII and shifts

Rob Edwards

in we if it it seeing pipeline the a And us. I'll so move over nice already pass securities. on mean and with could I a for thing he's that putting that pass better Rich the then And it is I'll positive it cash loans, there. and could -- shift start to mix into from take and securities be what into Rich. to

Rich Bradshaw

want Michael. I to color add to morning, earlier growth. more Rob's Good a Sure. little on comments

First of on are those all, half commercial investment us. those we're replacement, that hired since half are probably of leaders on really and our are incremental return for seeing about XXXX. the a And XX off January we've lenders paying and

Another piece million in for you're of the that's a banks banks the large are loan of loan million away size. United. of $X a terms number portfolio loan are those from $X is really fact X-XXX customer. if great so management, moving going Matter this And

last the to new very figure terms and us. for over obviously after been our from us successful standpoint who as you for I well. and so that been peer been in I'm and PPP, enjoy target the XX,XXX that And we biggest from quarter fact both the reputation can of And were opportunity to our and that's we did, continue a tailwinds that's some lastly, sure then of out think United what's a X,XXX going customers real for we've for banks some

QX, forward. are and similar QX a feel had pipelines likewise do QX. than feel have that In our we we strong with optimistic So, we'll going that

Jefferson Harralson

I'll we're similar in yields are to very just that And coming our seeing loan add the in loan yields. that current

not this growth, we're not -- on the degradation seeing yield. in So, we're loan a

Michael Rose

helpful. final it, maybe And from just then Got me. one that's question

we -- deal. have guys think closed singles, in runs, M&A some It Thanks. the Seaside of you a is the maybe here opposed of smaller little kind we guys your does updated You M&A deals, some how We larger just Any some know see of bit. strategies I like thoughts? seem a home the a transaction about recently forward? as did move doubles to chatter up markets. picking deployment capital should and preferred but within

Lynn Harton

Yes. mean Thanks, Michael, I this environment we tend the to you the acquisitions doubles. soon and do be clearly as Lynn. as I like is, as going whatever think is we there's for believe to tremendous opportunities clears singles mentioned and that

competition We there, for but loan COVID, all were tech pressure, maybe a will place here triples look and all drivers at accelerated. growth, things really have investments, those the few before that in margin

to looking forward loan yes, what lot we conversations each books are you to think, are a and game. other's M&A on got, at people looking you can once there's going getting and feel of knowing into I So, looking comfortable -- the forward back

Michael Rose

you. I appreciate all Thank the colors, guys.

Lynn Harton

Thanks, Michael.

Operator

Thank you.

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

open. line Your now is

Catherine Mealor

capital just follow-up Thanks, deployment good on on morning. Maybe one the buybacks. question

How credit really buyback? capital, soon how PPNR of you'd lot be thinking about good. comfortable a on are got the re-engaging you still You've looks stable,

Jefferson Harralson

think at buybacks, you'll cash to We come talking re-engage don't XXXX. holding we that. to buyback at get and do to trust just and have internally. will going X.XX%. upstream company of do we before to that our enhance We us what start out a at question an beginning us we're but plans lot the to the the seeing have We that's that preferred there great last a That's start about look currently, -- do have

some we that senior a debt at early. matures could out have there do X% We that that's in XXXX

pass So, we we time we're some at into some back before using looking that more the -- but more XXXX, see into to cash and to buyback. statistics benefit want

Catherine Mealor

to entered any Great. there And on off have come speak modification that well. loan into a anything and of but follow-up Are as of there? then deferral, kind I'll where of credit loans you have

Lynn Harton

no that performance, really a modified would or So, it it's That's say deferral. I'm to be because going -- not it are it a If of downgrade in that's that. change right. Deferrals would -- likely to we if in it not we're it -- or would doing. -- that's modifications modified either put TDR effectively, call something it then

Catherine Mealor

seen We've a Yes. just of about coming off modification talk into other some solutions. structured or deferral kind that entered companies but

Just there sure wanted loans that to that wasn't group another of --. make

Lynn Harton

No, we're not that, doing no.

Catherine Mealor

just growth what near maybe of thoughts then on of And your -- expense expense last you're term just guess great. Jefferson into question one I any next about kind I kind on thinking on guess Okay, outlook growth, year? going

Jefferson Harralson

Yes.

budget expenses, and have a -- we couple So, about we're it's thinking things. lot season a

about branches $X.X think six equal, excited and year coming one also have in new closing locations that All on. about are is I next million things us December. have we we should get that we that, save we before

on. We two are about in coming have that we're Columbia that locations excited new

team, a this. has a book some team, have their well. up to that in We grown loan really, Rich, -- time step on want may ago really we brought LPO

Rich Bradshaw

Yes.

that. So, and $XXX in support July that and we're We and since really of it's have purchasing started LPO LPO. we good that LPO very million purchased, the last since their in done commitments branches we growth Columbia feel purchased start the sorry, year they've the pleased about of to we or new -- two the two with are so

Jefferson Harralson

a branch looking net-net, expense two We at year. closures also are or in savings next guess our Florida, but I location an which from

We run from getting excited into have that million that about rate the we're year. the $X starting next Seaside

business. talking today, some about time, starting kind we're other out we our well type growing making investments We really a get same to hires, that as the some of to these some savings have projects at are some try and cost we're we're about. of weigh streamlining that from ideas and talking not making but we're lot other We're of selective

kind season to budget flat I again, next would for in slightly we're start. of higher year, So where -- but and

Catherine Mealor

and quarter. great. -- thanks color for Thanks for Helpful. Okay, the the great

Operator

Thank you.

Our next Fitzsimmons the of comes question Davidson. from D.A. Kevin with line

line Your now is open.

Kevin Fitzsimmons

morning. Good everyone. Hey,

that wondering Just to the loan talked the the mid-sized know I if on follow-up more that. about this, to that is markets I'm it. also and that's or organic referred customers you previously there specific quick a assuming are the Rich, getting used growth of be. are loan contributing banks. customers part -- loans of growth And kind the you that And small ignored the currently have to larger worried not by -- to PPP are

any if over that is customers are wondering moving of Just contributing, if some of business? already loan Thanks. those other

Rich Bradshaw

absolutely. Kevin. to short answer of morning, yes, Good a PPPV your loan that PPP came The from is, customers. question the About third growth new

I'm In the medical some we're loan owner-occupied of owner-occupied because going XX%. growth, to seeing buildings. where terms definition of office is near say of

we that XX%, owner We had deals XX% the, some large the occupancy. have has --

Coastal geography, out about So, I store-anchored to fair terms done we those. want of really as Carolina team our then they warehouses. just Carolina team well -- volume. good huge in point be of feel North grocery We've amount our And had would also that and and a really that Georgia quarters the deals. We've as trailing drove South

Kevin Fitzsimmons

Thanks, great. That's Rich.

timing follow-up. mentioned few a the of we times Just know you Jefferson, process. one PPP -- quick I the

quarter? that recognized wondering Just -- on the is, As bet as best one-fourth the in maybe get is first in the Maybe of first bulk when your quarter? through in fees that. through fourth quarter, thoughts far that remaining your three-quarters comes margin,

Jefferson Harralson

Yes.

be sooner thinking we're little it's than that. to So, a going

documentation have to may here, our of step a but in and want -- full that our have We portal, significant in. customers the Rich have put number in we

So, Rich application we're to -- fees in, has to possible to that But way actually fourth cash. XX% the when so thinking add could and And we we're up in come forgiveness XX-day is the get think to see that to quarter. to period of to he I'll that. the get waiting we what to up we're the be at and the to faster currently get there much down starting these going apply once it's we a SBA pass

Rich Bradshaw

we we entered, have call I of expenses we did, and XX,XXX about have some have having numbers Of what of X,XXX about me. of in Yes, that the that's that XXX% -- the benefit the we front -- $XXX million. we

it from it have do updating verification so and And to but one, we remember portal throughout have portion. we some our build this for we day the the certifications forgiveness for borrowers, process get built to and some a we've including

to kind fourth split majority we of get a so quarter And between first our expect forgiveness and of quarter.

Jefferson Harralson

a trickle And from there.

Rich Bradshaw

There'll be be some there'll -- trickle.

Kevin Fitzsimmons

All right, Thanks, great. guys. that's

Operator

you. Thank

Our line of comes Christopher from next Janney question Montgomery with Scott. the Marinac

is line open. Your now

Christopher Marinac

has Hey, thanks, what just charge-off the be of Navitas as morning. whether to sense new year. Navitas And or early a talk of get get also, about would and same and good next year-end Want higher of growth the rate you on into type horizon. kind

Rob Edwards

is charge-offs some or went XX is, there on the the in charge-offs this there can Navitas to and So and bps. stuff that third Rob, you slides slide some the about XX in if I can deck, -- put quarter -- see we you did

bit and So, that's higher we the of when than Navitas right little million. with we sort were something the they guys, When at hit started $X this. a whole pandemic projecting met

better we going been quarter. we third So, a and for things maybe a even -- are million that may could have than bit anticipated. in $X going optimistic they there it around the we're number little came cautiously That better -- than was

rate We expectations. do we sort loss back that set will about that we good budgeted our know, be it. when where and a of portfolio the I X% we was XXXX, early we in think bought don't So, there feel some,

So, pandemic even they're continuing expectation the 'XX. outperform in than the during to we back had set

feels we was. right they had from where were where up it It should. it's what good like it about happening expected little feel previously. It's quite we bit So, it. honestly, a But outperforming

guess. couple are Lynn close expect that I'll X% about… my be the that's to charge-offs. So, quarters next And the of maybe where it it stay I on to would talk to we pass for would and

Lynn Harton

loan So, we off have I'll sort picked had start the growth summer that quarter up are the pipelines, look of when continue -- a encouraging. saw they to at expect year. next and they from fallen into this you if you They this

Christopher Marinac

Thank could great. through Okay, known for going system you how have I or Rich, just you for that for you a background, just kind I'm follow-up gone curious fraud out then both process, that that itself play be is that's up? well PPP as the as about out in already come general? forgiveness as the the there to there of that's And for great. mean what's surprises any

Rich Bradshaw

would for our for and general, be I -- of same. Well, us the system in think the answer kind the

all, everything so have -- done on and we US do faith of there is you deals. right and the of we've fraud, if government the first If our guarantee full

So -- we've very standpoint, case in so from we have ours, little one ours. we but in seen and have seen that --

loans SBA, -- the and I the of forgiveness, SBA there and the I XX,XXX they above. out be like and at done for or long the they've But have feel I files My in -- they guessing, know million So, that's we right more. experience this hard deals fair we've looking things said I at always reasonable. all for will and be industry know and I'm one been may differently a the put it's treasuries $X that when the is forgiveness for announce higher that look -- with borrower

have a don't So, I concern.

Christopher Marinac

Great, Rich. again. it. I appreciate Thanks

Rich Bradshaw

You're welcome.

Operator

Thank you.

the Stephens. Our from line with Preston Brody comes next question of

now is line Your open.

Brody Preston

morning, everyone. Good

real on back I growth just wanted So, loan to quick. circle

quarter. So great obviously, really

called in out organic loan the release. it that I growth think was you X%

to so environment And loan in sort I of type impressive. single-digit this is growth up of high put guess

could up moving And you're up short maybe also think you if what forward, put in what we environment, 'XX? longer think X% going you do so I as the maybe term, of guess term back pipeline half put to this about but is

Lynn Harton

election There term. short question. also is an in great there the So, is also here --

the of these that, lot a hopefully after So, impact certainly digit having QX think continue. how about things of mid-single and it. back is optimistic change going the some could about things but kind thinking million loan. that, to go go don't of it's we're banks And I entering that large $X still said now the and we're

the on us. excited that's markets is think out really and to Also, be that talent metro we're for Seaside I So, capitalizing in. going about there

and teammates. So, merger pick potential that our excited about as acquisition we do that and really up see new a

Brody Preston

Okay, success as I from the last the great. with just your that the of into year? [ph] success we and be Is move making some year new had continue half, think to hires a a you've had all and some you've tourist disruption And down expect you over lot may the deal, forward something then obviously markets hiring there. up

Lynn Harton

doing want, we going The the make and yes, make and people really sure opportunistic. more going the best we'll United are with hiring feel best for that us because team to we we strengths vet in Seaside. we're to hiring answer about again getting we of although, market terms if some we're have is want our existing capitalize are be very our good we sense the now It's but to we're the on to

Brody Preston

Seaside area pulled Okay. and a before portfolio down And a pipelines mix think that of have a book, mentioned getting the of then moving you shifting portfolio others bit execute equipment maybe I that the may be sales so credit on little back that let loan But think stronger sort from expect maybe you and perspective. -- litter opportunity sort Navitas run I look to some from finance your further, to with have the of do forward? of pick to you're you maybe better the sort some are there

Lynn Harton

that's a it's question. Yes, a -- great

well about you So, talked we it know under under keeping now. XX% it's XX%,

faster as is beyond. our growing pick to it a start And seeing loans quarter the first We volumes in are selling and we do book that to up expect and start than back whole.

I not target guess we're XX%. would our -- So, to you is say I not

grow than it the expecting core are faster to bank. We

XX%, expect yes, much us smaller in now. should gets it before to engage so, faster XX%, number you we're a sales -- to loan and faster targeting it's because growing And not into we're

Rich Bradshaw

the been on quality I think disciplined quality in just very originations team are the And that of uptick it's they applications. this an are side, seeing in asset has saying and the they

Lynn Harton

higher, lower higher quality them. are they're accepting and applications the we're of a percentage much So,

what applied lower pre-cycle. is the for it we getting has are of much So acceptance rates versus what than been

Brody Preston

Okay, great. modeling me. a questions from And then just quick couple

sort what that do and Just on the being those forward? the move fees higher as swap you it's and brokerage both on of drove the of maybe repeatable think -- we fees,

Lynn Harton

they simply fees with or right growth. swap So, go loan the along

being about similar. So, whatever fees you the would I have for swap loan growth, think

fees that. comes basis. on on absolute expect come growth if would swap I an loan So, thoughts down, the to down Rich,

Rich Bradshaw

and add I sheet. thing minor one on would probably changed more -- we our want rate that is, some we've to fixed balance have

drop a of changed little have some so the swaps. in we incentive, would I expect So,

Lynn Harton

management flat growing it's quarter in, was great adding simply And so is the Yes, -- growth that's Seaside point. simply it ex-Seaside, this business. wealth was the relatively a a

run is this quarter. from that rate good to a start So,

Brody Preston

guys can little guess is Okay. And one, and And the all? think quickly just that are run then balances maybe what again you deployed? you liquidity those then is expense FDIC how bit as for do down with a view, of tangentially last normalized sort cash you move higher, I

Lynn Harton

COVID, before Fed $XX in about the overnight. million at so we Yes, the year kept

somewhere number $XX there. So, near I million normalized would or call a

And $X $XXX to higher. so much $XXX billion, going -- and now when it's million, between are we million

to back our it's Now, it's pretty, know hard pretty I goal pretty, do. to is get a it's it there.

bring quickly we need from work. us the a cash coming loans don't So, in and to put that lot super PPP we to there of have

to -- time. And that back that will we some it's So, get is goal will our that's it -- number. but take

Brody Preston

you Thank much. great. Okay, very

Operator

the I Lynn Thank question-and-answer closing you. would remarks. to today's This for concludes like back to call session. now Harton turn

Lynn Harton

being like some for the call. with team. thank out on end to all I'd the Well, you great, congratulations our to just well call And

gone you, well. wealth with with I'm of through it's team myself, so numbers rest -- in, how And the thought, impacted positive relationships. you an first be I'm we you and you the planning team to exactly and our quarter I'm to made deep Seaside so tell to the onboard going tell proven having what Seaside yourself can footprint. go is about difference, this a going -- listening management exercise throughout -- very go outstanding with First and to that's how the excited very

you. to congratulations that have in team, with So, have initiatives And automation and you same incredible. initiatives when the quarter our things gone been has I this we think and see on going other other about PPP on, that can process the

proud customer incredible I today. that and also been saw Our incredible, scores very have been service customer early some additions retention made customer has me

United So, so I rest of thank you quarter. congratulate everything we and you to want do, at the team Thanks much. just look and to you for all forward reporting the next to

Operator

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

now may disconnect. You

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