CBTX, Inc.

Good morning, everyone, and welcome to the CBTX Q1 2021 earnings call. At this time, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at the time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host. Mr. Justin Long, please go ahead, sir.

Thank you. Good morning. I'm Justin Long, the General Counsel of CBTX, Inc., and our management team would like to welcome you to our earnings call for the first quarter of 2021. 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 10Q for the first 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 factor section of our annual report on Form 10-K, our quarterly report on Form 10-Q for the first quarter, and our other filings with the SEC, all of which can be accessed on our investor relations website at ir.cbtximc.com. Any forward-looking statements are made only as of the date of this call, and we assume no obligation to update any such statement. 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 R. Franklin, Jr., our Chairman, President, CEO, Ted Piegett, our CFO, Joe West, our Chief Credit Officer, and Joseph McMullen, our Comptroller. At the end of their remarks, we'll open the call to questions. With that, I'll turn it over to our Chairman, President, and CEO, Bob Franklin.

Thank you, Justin. Welcome to the earnings call for CBTX for the first quarter of 2021. We entered the first quarter with cautious optimism as the economy continued to rebound in response to stabilizing conditions related to the pandemic. including the accelerated distribution of vaccines. Over the course of the first quarter, our markets in Texas continue to improve as companies work toward returning to pre-pandemic operations. We have seen businesses in the communities begin to regain their footing after the difficulties of 2020. And as of March 31st, 2021, the governor of the state of Texas removed restrictions initially set in place allowing businesses to reopen at full capacity. During the first quarter, we also noted a build in liquidity in the system and continued to increase our deposits. We anticipate that our customers in the bank will be able to put that liquidity to work during 2021, particularly as conditions in our markets continue to rebound. Our asset quality remains strong, During the quarter, we have seen a decline in the number of loans subject to deferral arrangements for businesses impacted by COVID-19 pandemic, which allows us to focus on those businesses hardest hit by the pandemic. New loan activity continues to slowly pick up as markets reopen, and we expect that we will maintain this upward trend, especially during the second half of the year. Through the first quarter, we have minimally adjusted our economic qualitative factors associated with our ACL that would be more aligned with an improving economy. However, our expectation is that in coming quarters, with the continued economic improvement, we will be adjusting for the economy, bringing our ACL back in line with more traditional levels. Our capital remains strong, which allows us to increase our dividend to our shareholders. We will continue to evaluate our dividend policy along with the share buybacks to make sure we maintain a strong capital base that allows us to take advantage of acquisition opportunities. Our focus is to create shareholder value and enhance shareholder return when opportunities are available. We continue to work with the OCC with respect to compliance regarding the conformal agreement and to focus time and resources on our Bank Secrecy Act program to meet the regulatory expectations. We will continue to do so until the release of the formal agreement. The OCC just recently completed its examination and we await its final conclusions. We are optimistic about the remainder of 2021, particularly in the second half of the year, as our great team, our customers, and our communities can shift their focus from the difficulties associated with the pandemic to a more opportunistic aspirations and growth. We maintain our strong balance sheet and capital position to allow us maximum flexibility in meeting our goals for the company and our shareholders in 2021. I'll now turn this over to Ted Paget, our Chief Financial Officer.