CBTX, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the CBTX Q3 2020 earnings conference call. At this time, all participants' lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Justin Long, General Counsel. Thank you. Please go ahead, sir.

Thank you, and good morning. I'm Justin Long, the General Counsel of CBTX, and our management team would like to welcome you to the CBTX earnings call for the third quarter of 2020. We appreciate you joining us. We issued our earnings press release yesterday afternoon, a copy of which is available on our website, along with the slide presentation that we will refer to during this presentation. We also filed our quarterly report on Form 10-Q for the third quarter yesterday afternoon. Before we begin, I'd like to remind you that during this presentation, we may make forward-looking statements regarding future events, our financial performance, or our business prospects. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Additional information concerning factors that could cause actual results to differ is available in our earnings release and in the risk factors section of our annual report on Form 10-K, our quarterly report on Form 10-Q for the third quarter, and our other filings with the SEC, which can all be accessed on our investor relations website at ir.cbtxinc.com. Any forward-looking statements are made only as of the date of this call and we assume no obligation to update any such statements. You should also be aware that during this call, we will reference certain non-GAAP financial information. A reconciliation of these financial measures to the most directly comparable GAAP financial measures is included in our earnings release and investor presentation. I'm joined this morning by Robert Franklin, our Chairman, President, and CEO, Ted Pygott, our CFO, Joe West, our Chief Credit Officer, and Joseph McMullen, our Controller. At the end of the remarks, we will open the call to questions. With that, I turn it over to our Chairman, President, and CEO, Bob Franklin.

Bob Franklin Thank you, Justin, and welcome to our earnings call for CBTX for the third quarter of 2020. During the third quarter, we continued our work to identify the stresses in our loan portfolio and the effects that the continued pandemic may cause. Our markets want to open. and it appears that most of our customers have found ways to work around the obstacles that COVID continues to erect. We believe that the credit risk that appeared to be forming during the shutdown of our country earlier this year has mitigated in a substantial way. We can see this in our customers' decreased deferral requests and the continued improvement in cash flows across our portfolio. We realize that COVID-19 will be with us for some time to come and must prepare to cope with its effects as a bank and in working with our customers. We have a great team of experienced bankers that will help guide our bank and our customers through these trying times. Our staff has worked tirelessly to maintain the superior service level that we insist on providing to our customers, and I thank them for their dedication. During the third quarter, we continued our dividend program and reinstituted our stock buyback program. These actions are what we believe to be an acknowledgment of the strong capital position that CBTX maintains. This strong capital position allows us to freely manage our capital while maintaining a strong and adequate reserve. We acknowledge the headwinds facing us as we enter the fourth quarter and continue into 2021. COVID-19, pressure on the oil and gas industry, low interest rate environment, our continued spend on completing our obligations to our regulators, and the contentious political environment. Our efforts around the pandemic will continue until there is clarity and we feel the major impact has passed. We feel confident in our efforts on this front. Though we have traditionally had limited exposure to the oil and gas industry, we will continue to monitor the effects on our customers, directly and indirectly. The low interest rate environment will continue to put pressure on our net interest margin, but we think much of that compression is behind us. We will also be mindful of our expenses and look for ways to generate some additional fee income over the coming months. As for our regulators, we feel confident in our work towards meeting their expectations and that the expense around this effort will begin to mitigate as we finish the first quarter of 2021. CBTX remains the strong relationship-driven bank our customers and investors have come to know. We are optimistic about our markets, our customer base, and our opportunities, but we will be cautious in our prospecting and our underwriting as we navigate these uncharted waters. Now I'll turn this over to Ted Paget, our Chief Financial Officer.