CBTX, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the CBTX Fourth Quarter 2020 Earnings Conference Call. At this time, all participant 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 then 1 on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star then 0. I would now like to hand the conference over to your host today, Justin Long, General Counsel. Please go ahead.

Thank you. 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 fourth 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. Before I 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 factor 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, all of which can 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. 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 Bob Franklin, our Chairman, President, CEO, Ted Pygott, our Chief Financial Officer, Joe West, our Chief Credit Officer, and Joseph McMullen, our Controller. At the end of the remarks, we'll open the call to questions. With that, I'm going to turn it over to our Chairman, President, and CEO, Bob Franklin.

Thank you. Thank you, Justin. Welcome to the earnings call for CBTX, Inc., for the fourth quarter of 2020. We entered the fourth quarter of 2020 with caution as we experienced an ever-increasing contentious political climate and an acceleration in COVID cases in our markets as well as across the country. These conditions remain as we enter 2021. We are watchful for the economic impact of the policies of the new administration while we continue to be encouraged by the distribution of various vaccines, allowing communities to move more freely again. Our customers remain resilient, even though our markets are not fully open. We continue to see a drop in our current deferrals and requests for new deferrals. Loan activity is beginning to pick up, and we expect that new loan relationships will steadily increase throughout the year, slower in Q1 and Q2, but picking up in the last half of the year. The year 2020 was impacted by markets negatively affected by the pandemic, larger than normal loan loss provisions, lower interest rates, and a large spin related to our BSA program. We believe we have identified our major risks in the portfolio and adequately reserved for them. We have lowered our cost of funding to meet our lower lending rates, and we are hopeful for the new vaccines and the complete reopening of our markets. As for our regulators and the formal agreement with the OCC, we continue to put significant work and energy into our BSA program. We are confident in our work to meet the regulatory expectations and further expect that our expense around these efforts will be significantly mitigated in 2021. We are again cautious as we enter the year, but we are also optimistic about the opportunities that we sense 2021 will bring. Continue to maintain a strong balance sheet and capital position, which allows us the maximum flexibility in meeting our goals for 2021. With this, I will now turn the program over to Ted Pygott, our Chief Financial Officer.