Umpqua Holdings Corporation

Q4 2021 Earnings Conference Call

1/20/2022

spk_0: it morning and welcome to the up call holdings corporation fourth quarter two thousand twenty one earnings call at the same all participants are in the lesson or leave mode after the speaker presentation there will be a question and answer session to ask a question during the session you will need to breast star one on your telephone please be advised that to these conferences being recorded
spk_1: if your car any further assistance please press start zero
spk_0: at this time of would like to introduce miss jackie's bowling investor relations director for of gone the begin the conference call miss bolin these go ahead
spk_2: think he ran the morning and good afternoon everyone thank you for joining us today on our fourth quarter twenty twenty one earnings call with the the with me this morning or court over the president and ceo of uncle holdings corporation tory nixon president of uncle bank run farnsworth our chief financial officer and frank named are are cheap credit officer after prepared remarks we will take your question yesterday afternoon we issued an earnings release discussing our fourth quarter twenty twenty one result we've also prepare to fly present a sandwich we weren't for to during our remarks this morning both these material can be found on our website at unclear bank dot com and the investor relations section during today's call we will make forward looking statements which are subject to risks and uncertainties and are intended to be covered by the safe harbor provisions of federal securities law for list of factors that may cause actual results to differ materially from expectation please refer to slide two and three of our earnings conference call presentation as well as the disclosures contained within our as a see filings
spk_3: oh now turn the color to court or i bet you jerking off the ride a brief recap of their performance in the past rhonda discuss vehicles for it will discuss credit limit take the questions screwed me for the fourth quarter we reported earnings available to shareholders of eighty eight million dollars this represents vps before he wants as for sure to compare to the forty nine cents reported last quarter and sixty eight cents reported in the fourth quarter of last year with this link quarter decline due primarily to fifty million and merger related expenses and last quarter's sizable prevent provision recapture the decline from the prior year period reflects a more sustainable level a mortgage banking income and the current quarter as volume the margins normalize from the twenty twenties historical high levels as well as the previously mentioned merger related expenses once again the focal point of the quarter was organic low growth which contributed to increase net interest income than the prior quarter when ppp related fees are removed non ppp loan balances grew nine hundred and thirty million dollars in the fourth quarter representing a quarterly growth rate of four point four percent and an annualized growth rate of eighteen percent notably the quarters organic generation significantly offset continued declines in ppp loan balances enabling told for foil expansion of two point seven percent or eleven percent annualized during the fourth quarter expansion during the quarter for the year was balance across categories and though pipelines are lower today than we spoke them when we spoke in october given the fourth quarters heightened production and seasonal trends we expect continued long road through twenty twenty two as a multiyear initiated which includes successful ongoing talent acquisition and bram moment and that are markets and eight and us to take market share and dry value for customers
spk_4: with ppp
spk_3: remaining balances at only three hundred eighty million one point seven percent of the poor folio the majority of our anticipated net organic growth and twenty twenty two will result in net portfolio go for the year and any favorable movement in line utilization which we have not seen to date would provide additional tailwind regarding capital in november we paid our shareholders the didn't or twenty one says per share consistent with historical payments and as we previously discussed with the not be purchased any given and given are pending combination with colombia banking system which we announced october twelve well our while our usual next can slide has been replaced with the information and updates related to are pending combination we continue to make strides as a standalone entity i'm going to provide a quick update and a few notable items as planned we consolidated fifteen stores early in the fourth quarter bringing our total rationalizations under next june two dato to thirty four the moving out moving us within original thirty to fifty store consolidation goal we consolidate in ninety nine stores under next one and next year to dato which represents the rationalization of one third of our footprint over the past four years during that period the number of non cd accounts has grown by two point seven percent as the number of demand accounts has grown by four point one percent since we launched original next and plans and late twenty seventeen our deposit bounces or up six point seven billion or thirty four percent and non cd balances or up seven point seven billion or forty five percent driving efficiency improvements in our core banking segment or human digital initiatives remain critical to our long term strategy as our customers continued to engage with us to digital channels at an accelerated pace that will achieve mature include a steady pace of increasing zell transactions which rub seven percent for the quarter and at forty eight percent for the year additionally we crossed a new milestone would go to users as we passed a one hundred thousand work in the quarter one final comment before passing to run i've been talking about the growth opportunities ahead for on call for a number of quarters and are storm performance in the fourth quarter provides continued support for these remarks the past few months production is a tremendous accomplishment it's alright but it has all the more noteworthy at the demonstrates the intentional and successful separation of her growth initiatives them or irrigation integration planning activities related to are pending combination with colombia that we have previously disclosed the integration management office was established to leader integration and the imo leadership team includes senior executive leadership the both on columbia the imo enables on cause bankers to have undisturbed focused on generating business and serving customers and i am remain highly enthusiastic that the growth prospects within our markets and the momentum from our banking teams or drive continued growth and twenty twenty two that enables us to deliver shareholder value over the long term and what that ron taken away
spk_5: well they did court if it isn't the call to fall long have you refer referred discern page numbers marines presentation
spk_3: page twelve of the slide presentation contains or summary quarterly piano or gap earnings per share for queue for were forty one sense
spk_5: excluding them as our input see the a and other fair value judgments along with merger expose next the disposal costs are adjusted earnings were forty four cents per share this quarter
spk_3: for the moving parts of compared to que three net interest income decreased less than one percent reflecting the six million dollar decline and ppp fees mostly offset by continued organic loan growth and a reduction in her cost of funds
spk_5: we're to recapture prior provision for low loss of less than one million with improving economic forecasts offered in the provision required for new longer growth down eighteen million from the prior period recapture
spk_3: none interest income reflected the expect the seasonal decline and mortgage banking revenue axiom the are more than offset by lived in the msr fair value with the increasing longer term interest rates and not a sixpence included merger expense recognize to date for the columbia combination as for the balance sheet on flight thirteen in spring cash decrease to two and a half billion this quarter driven by the as asset remix into loans with the record non ptp growth this quarter we also added wondered fifty million to the bond portfolio later in the quarter as longer term yields increased the two point five billion in cash along with expected future forgiveness and pay off on the remaining three and eighty million of ppp loans will give us and that again future optionality for funding ongoing long growth our total available liquidity including off balance sheet sources and of the earth fifteen point three billion represent and fifty percent of total assets and fifty eight percent of total deposits
spk_5: movie debates sixteen of the presentation
spk_3: our name decrease six basis points and total to three point one five percent you for and we present a waterfall in the margin change on the right of the page the name excluding the impact of ppp loans and discount accretion was flat which is great to see the impact of continued non ppp long growth and deposits continued repress lower often in the impact of the low rate environment or costs of in spring deposits was eleven based points and key for
spk_5: the next to slides include information which investors may find helpful as the market is present in the potential for fed funds rate increases and twenty twenty two first on slide seventeen
spk_3: we have expanded the detail provided on repricing and maturity characteristics of or loan portfolio the first table on the upper left breaks down the price in drivers on loans that and as viewer and thirty three percent of the portfolio is fixed two percent isn't remaining ppp balances thirty two percent isn't floating rate and thirty three percent or in just will rates over time the lower left table shows maturity schedule by category and the upper right table shows the loan rate floor buckets for floating them just a loans in thirty nine percent of the combined total are out there floor mean sixty one percent have no floor or above it for the five point seven billion and floating an adjustable rate loans after floor
spk_5: the lower right table breaks down the balances by rate changed band along with the weighted average rate changed required for lethal as to move above their floor hopefully investors and analysts will find this information useful in assessing the beneficial impact on net interest income a future potential rate hikes
spk_6: next on page eighteen
spk_3: on the left with included a project an interesting come sensitivity for future rate changes in both ramp and shock scenarios over two years
spk_5: this is a simulation we ran a as quarterly and assumes a static balance sheet ideally will continue to see an asset remakes with cash skipping bonds and flowing down the loans
spk_3: which will benefit or net interest income absent any rate change
spk_7: but this is not included here
spk_3: the deposit betas used in the simulation ranged from forty three to forty five percent on a spring deposits for sensitivity on our model results every ten percent change in the beta is plus or minus one point three percent on the plus one or bases one shot results the table on the right shows deposit beta from the last rising rate cycle starting que three twenty fifteen and ran through que three twenty nineteen to catch the lag effect our bit of them was forty two percent uninspiring deposits okay now to our second disclosures sorry what the core bacon segment from pitch twenty one of the presentation net interest income was flat sequentially driven by the strong non ppp longer of and continued decline in costa funds are setting most of the ppv decline a talk about season the provisions did on a few minutes but you'll see here we had a lunar calendar one million dollar recapture the quarter from unproven economic forecasts
spk_5: for was down as the changed and fair value loans carried it for value at a loss of two point seven million here in queue for as long term interest rates increase this quarter compared fair value games over the last two quarters
spk_3: managed think i'm a forty two point eight million increased twenty three percent from que three related primarily to hire swap and syndication revenue as our commercial finishes advance and then the non issue expense section you'll see the merger expanse recognized date on the combination along with exit and disposal cause for lindley and some recent store consolidations and a right of use lease as an impairment as we execute are returned to work plan the direct manner spencer the core begun segment increases quarter primarily related a higher loan production centers given the record growth discussed earlier efficiency ratio on the core increase sixty four percent reflective of the merger expense know this would be fifty seven percent x the merger and exodus of gas three now to page twenty two the presentation we should the mortgage making segment five quarter trends to start we had a hundred seventy one million dollars in total health for sale volume this quarter down seasonally twelve percent as expected from two three the gain on sale margin was two point seven one percent again down from que three as expected given a slow in mortgage market and decline in the lot pipeline these two items resulted in the twenty three point six million and origination sell revenue noted towards the top left of the page
spk_5: or service in revenue stable and for the change and msr fair value the passage of time peace increased slightly while the change due to valuation and birds with again of fifteen point four million
spk_3: due to the increase in long term interest rates in the second half of the quarter managed expense told toi six point six million for the quarter again this represents hell for selvage nation gas service and gas along with ministry of an alligator costs the dreads expense couple of this was eighteen point two million as noted on the right side of the badge represent two point zero eight percent of production volume of slightly embarrassed going some lassie quarters with the lower volume
spk_5: couple finalize for turn over to frank and fled twenty five we've included a new quarterly loan balance roll forward the record quarterly now tpp longer of was driven by a record two point three billion dollars in new originations offset by one point four billion and pay offs
spk_3: next film me take your tension the slide twenty seven on cecil and or lamps regret credit loss
spk_5: as a reminder our cecil processing corporate the live alone reasonable insupportable period for the economic forecasts for all portfolios with the exception of see and i which is is a twelve month reasonable portable period reverting gradually to the output mean they're after
spk_3: hence he forecast incorporate economic recovery three twenty twenty two and beyond as most economic forecasts revert to the mean within a two to three year period
spk_5: we use the consensus economic forecast this quarter updated in november
spk_3: overall the forecast showed improvement and several key areas as economy works to the latest variant
spk_5: we include the seventeen million dollar overlay for various or portfolio to hedge against any potential near term slowdown
spk_3: or negative turns with the pandemic net of this overlay including providing for the strong low growth we recognize less than one million dollar recapture and prior provisions for low loss that charge us for key for remain low and seven million dollars of thirteen basis points of loans
spk_5: much lower than the models last your suggested
spk_3: and the majority of met charge of this quarter related to the small take at least portfolio
spk_5: the feel a quarter and was one point one six percent
spk_3: during this ratios one point one eight percent excluding the government guaranteed ppp loans and these are economic forecasts drive in the reserve it will simply take the passage of time to see of net charge us followers modeled but today the models assembly overestimated the actual that charge ask given a lag of at least six quarters or day one sees the level was right at one percent on a sale which is about forty million lower on the a sale for non ppp loans where i currently
spk_5: all else equal this acts as a sale will the be charged often future periods if the models are eventually proven correct
spk_3: or be recaptured and or used for providing for future loan growth if the economic forecasts continue to improve time will tell
spk_7: and last went to high capital on page twenty nine
spk_5: nine and all over that or races remain in excess of well capitalized levels
spk_3: or to income ratio the eleven point six percent and or total respect cavalry shows fourteen point three percent the bank level to respect capital ratio was twelve point nine percent and with that have an answer the call for frank number to discuss credit thank your on i will also be referring to certain page numbers from her earnings presentation for those who want to follow along slide twenty eight reflects our crack quality statistics are non performing assets total assets ratio held steady at point one seven percent and are classified loans to total odds ratio declined by ten basis points two point seven one percent our annualized net charge off percentage to average loans and leases was thirteen basis points in the quarter reflecting below average net charge of activity in the finn pack portfolio the finbarr portfolios ratio came in at one point seven five percent notably below it's historical three to three and half percent range for the second consecutive quarter reflective of higher levels of customer liquidity improving economies and the favorable impact of strategic credit tightening implemented last year excluding finn pack annualised net charges were just to basis points obviously we're very pleased with their credit quality metrics we remain confident the quality of our own book and we look forward to continued high quality growth back to you clarke quay act frank and run for your comments rents will now take questions
spk_8: you sir
spk_1: islam of and that to take questions from might have for us today
spk_0: again as a reminder if you would like to ask a question over the phone of the press are one on your telephone back we have our first question from the line of jeff rule this may be a davidson these go ahead
spk_9: thank you and the my or in a court you mention the pipeline down a little bit makes sense as good at a at a strong production a quarter just one i kind to get a sense for the twenty two outlook and then it on a related question
spk_10: and how you view
spk_11: loan officer hires
spk_3: given the news of the pending merger yeah added take that as a work we're combining with him with another bank here and and this and the the recruitment process that you would do
spk_9: that that changes any but that to narrow that down expectations for twenty two growth and then how you approach the hiring thanks
spk_3: it yeah i mean i'm tori answer in detail me as give you a kind of a historical global answer to know we've we've ban as we've talked about i think you've asked me before kind of odd of we we have been a bag of choice by bankers of the last sort of just stories many are in all the the are tracking seen islanders and the prior to tory when i create real estate group we've been a great arm shop for people looking to get out of bigger bags bank be compete with now today as we've gotten to be over thirty billion i don't skimp i don't see that changing after a combination with colombians that i think if you buy her when i talk about we we seem to be on a player of choice as opposed to people are going to flee from here because oh my goodness gracious were going through a merger and i don't see that changing from historical on mars our historical perspective on on the town that we've been able to attract we had a great you for and i'll at torrey talk about it more in in more detail on and on and cats often the lenders it and it's fabulous job and for cunt anyone to see the pipeline grow but let me get it over the tory to to get as a answer low greater detail but i i just think the combined organization of being a fifty billion dollar behemoth you're in the pacific northwest and has not existed in unless twenty five thirty years is just a great opportunity for us to attract talent as opposed to be the place where people would flee and in and try to go down to hear that or kept thanks for that get the story to i'll start with the the the banker question of the
spk_12: to courts point we i believe i we believe we have a very strong thy proposition for bankers and we have seen talent come into this company over the last several years in that will not we we will continue to do in we are as aggressively searching for good quality bankers were hiring spot folks in in phoenix tip for our our arizona team are hiring or bankers throughout our footprint california oregon washington and continuing to have a lot of success on some we will we will key
spk_13: continue to do that on
spk_12: ah on the pipeline as as mentions down a little bit from from where he were a quarter ago but that's for obvious reasons we had just an outstanding que for in all lines of business he and yeah my my expectation is a q one will certainly won't be what queue for was just because we had we had some business that we that regionally thought would would be a a q one production that ended up gonna get pulled into into que for but the pipeline is still still healthy and still strong in continuing to grow so we've got a lot of great bankers
spk_5: out there talking to customers talking to prospects in building the pipeline i'm i feel very confident that twenty twenty two will be a strong
spk_3: longo here for us at least in our mid to high single digits he and i'm excited to take continue to see progress in the bank a jeff wilpon one last comment and you guys have as the so of i think when clinton i route in late december in december i'm talking a big what we got ask this question quite a bit as him in and i know exactly why and what we've been saying and i think as evidenced by air our fourth quarter production whole us accountable for the growth mean if you want to see how we're retaining in attracting count hold us accountable for the wrote in the balance sheet and growth in earnings that that's the way to look at it you know we we are we will lose people in we lose people and we retain the people what we want to retain but ultimately it's how we continue to grow with our customers and that where i think you should look for arm or are true retention efforts are we are our efforts to retain quality tell it should come in the form of growth and bouncy
spk_11: got it
spk_9: like you switch gears a little bit on the expense sided it sounds like a the next yet updates are gonna maybe slide to the to that kind of the back burner a little bit not that back on that disclosure of that's i just wanted to get a mob posted checking in on on perhaps your brain that expense one right
spk_14: have a hundred and low on hundred eighty million range at the merger exit costs what what's left
spk_9: that said take on costs age for this initiative
spk_7: my i think it had a tail and twenty three even if you could be tell that a other's is renee i'd say you're not know chase or a pro game serve for twenty two of looking at six hundred ninety the southern ten million of expense that that hasn't changed in missouri stiller in term targets now so that incorporates a decline in overall mortgage hell for sale volumes which you know can be a while ago
spk_5: from time time when when evans of raids
spk_3: the with that i'd say that you know the tail post or the impact of the stores and recently consolidated here in keyboards can be really more around in smaller amounts of are in get around me lease consolidations back office
spk_9: benefits from let he readies least impairments exeter of which are incorporated in their guidance for the overall your expense of them open and and then that just like we're going on
spk_3: housekeeping that the ppp pc i think image down five point nine nine what were those in the fourth quarter specifically
spk_15: yeah in in queue nine point six million there's a little over eleven million left going forward ninety nine percent of that is going to be ran ran to like up or him thousand left related around one
spk_16: they'll step back make you
spk_17: yep thanks of
spk_0: thank you
spk_18: our next question as from the line of matthew glock with by percent their go ahead
spk_19: like morning
spk_20: prevent an attorney specifically quantify the loan pipeline come in and of a quarter just to give us a sense
spk_11: elena
spk_12: on a comparison for comparison freedoms
spk_21: here are so mad tory the laugh at the end of by que three pipeline is about about four point four billion in total and today it's about three point five so three point six somewhere in that range and so that said that's the mark between last quarter and in this quarter
spk_19: again i i feel that we had a lot of business that bought and eighty four and a phenomenal queue for terms of growth at the very good about momentum and the prospects for us to build the pipeline and to have a very strong a successful twenty two and longer
spk_20: okay
spk_22: and and sound like does
spk_23: a lot of opportunities to hire producers at west given all the disruption that's taking place but can you give us a sense for what percentage or however you want to measure to quantify it
spk_20: what percentage of your producers are locked up with the deal
spk_24: unlike get locked up matt me with
spk_3: with the acquisition in terms of retaining producers so their camp it would doubt i'll leave that would hurt and yeah you know what percentage wise and rafa going to percent of the top my and i'll tell you we're we obviously with keep employees you know look at all types of retention
spk_19: i'm opportunities whether it's just cash or stocker or the way we pay out and centers and yada yada yada and a we feel like i mentioned before very very good arm about our retention prospects with our current staff the ability to continue to attract i think we've shown in in in more tumultuous hiring years or huh
spk_25: i've been years i'm in the last four or five stories been here i know you but on the called map where we are able to attract a lot of talent on some of the bags some of our are larger competitors because like tory mentioned a few minutes ago we have a great value proposition self i not be a not naive to your question clearly there's disruption potentially with a merger
spk_19: once again we are at fifty billion dollars there aren't a lot of generals commercial banks effect factors not in the pacific northwest of will be able to do we do and between that and then yes we do have retention the tools and are and are back pocket they will we will use before very very good about our believe retain went to get hold me accountable for the growth or me accountable
spk_26: great thank you and and ah maybe run on the corn him out locating the expectation community the quarter was fairly stable which it was
spk_19: what are your thoughts on the
spk_20: i'm
spk_27: can the as it yield outlook
spk_5: ah and
spk_3: and iam update on the weighted average rate on on new loans this quarter
spk_0: yeah good question
spk_28: so i'd say just in terms of a role as a likely to get when relieves it's gonna be a function of continued loan growth and they cash waterfall remake seen them into loans skipping bonds with the and the burnside in a with the the sell off and no longer term rates prepayment speed assumptions are slowing down so there could be some lived in terms of lower amortization looking forward just as those things extend slightly you'd expect that to occur with higher rates this i've met on the loan yield side are you on loan sir x p p was up for five beds and month of december compared to keep for so that those were looking into coupons well
spk_3: thank you
spk_5: bet
spk_29: thank you the next on the have the line of brandon king led to is secure
spk_3: eliza
spk_28: hey at first wanted to touch on the merger costs a me the like the dirty five million views are you may copy in achieving natalie the above that amounts but i was wondering why kind of inflationary pressures could expect that number in it that had gone into any of the because my confusion of a keep notes cause it
spk_3: get more brain your question so overall that her thirty five million remains our target were internally were targeted a number higher than that
spk_5: but i'd say this you know inflation witness not new this month this quarter it's that we've been dealt with inflation for the last year year and a half
spk_3: on the back of the pandemic so in when i look ahead into the future and i think about estimates and accretion in the modem affix cetera one of the benefits of home at higher internal target they were working towards the be to help offset if we do see continued outsize inflation and were and over the mouse there of i then also wanted to touch on the potty growth and the odds decline due to the to spit outlaws and forth by the question could you please quantify it's an amount of potter's now we're related to the uncle investment and then i wanted to get a sense of ways see deposits growing from here and white you you'll be a season seasonal inflow based off of the outlaw both both you and then overall impact on his bed which is why i can rate and without a due to the trained in departments check out of a loaded question been with taken apart granted of educated have that the other have a headset their the first component of there will be it with a little under two hundred million ounces answers of the you i balances that route elsa point out me others any given quarter there might be timing just in terms of in a month and or quarter in a ch time in the restaurant about a hundred fifty million that fell into january that empire
spk_13: a years might have been twelve thirty one for less is more function of the counter when you're looking at that point to point number
spk_12: when we look into twenty two obviously still very confident about deposit growth our citizens utterly or longer afford a deposit earth and twenty two i am to build wild card for all banks not just on was going to be know what what occurs of as a fed raises raids do of role did he a maxes drop and lubeck back interest bearing or to balances for go out and say the benefit and we have on there for i compared to you
spk_13: pass potential resin cycle has just the larger presence of larger balance of core commercial deposits and our bug mess up with the teams done a little last for five years so
spk_28: i'm here there's other fluctuations during the year just in terms of the attacks time and qt or maybe public funding for as influencing queue for but
spk_12: traditionally over a long time horizon we've been more of a seasonal bell curve there as well with of thing que three kids you t three little less and he when he for mostly up offset by those tax bill timing nuances on a plate a tenant a brand and a brand as a story the me just add one one thing on a kind of the bank or front age thing about we talk a lot about loans but the your art we have a lot of a lot of bankers that are in all different kinds of business weather's retail whether in the middle market community banking a real the group mean have their goals
spk_30: in their incentives are equally distributed between lending and or deposit growth and fee income growth in mean those things are all of them are very important in it's a very balanced scorecard he and at how their compensated in yeah all those things are important to us obviously so we continue to monitor and push and are successful in
spk_17: growth and all three areas
spk_0: not just on landing site other i following up on that what is the the ratio you can we expect when you grow for instance the and i loans and when it will be to ratio the pot is coming that note
spk_31: this is story in this is try to catch to kind of impossible to answer on or the be caught me because it depends on on the type of customer the industry that they're in what they're borrowing for i'm end and to selfless they are cash so yeah i think if if you look at the different busy
spk_32: this is our community banking business has about a one to one ratio of loan or standings and posit balances are middle market business as a little more the lending side than a dozen the deposit side a real estate business for sure is can be more lending that it is deposits on our retail bank is is probably a deposit base for the company so real
spk_33: just kind of depends on but he so yeah i'd i can't really answer probably more detailed and added disappointed with go in and day out some information may be but out that be my off the cuff comment
spk_31: mocha thanks all answers
spk_12: thank you again as a reminder if you would like to ask a question of the phone simple press or run on your cell phone keypad
spk_31: our next question from the land of mystery jared shaw with valse argue these guys
spk_32: a good morning everyone
spk_5: many are you at a good mention that the growth outlook doesn't assume any type of ah
spk_3: i'm realisation of the utilization
spk_34: outline evolutionary what happens if he did you see a lizzie normalization their how much of an impact of be to to balance it
spk_31: garrett hi this is a tory again so if if we if i look at the utilization rate going back a couple years i'm in in china que for two thousand and nineteen and rc and i business is about thirty five percent and today at the and a queue for is about twenty twenty six
spk_32: i'm that that's about as if we got to that back to the the thirty five percent level kevin a stork a level it's about two hundred and seventy two sixty million in our outstanding see more else and is for the company again at that as good thanks and then on the mortgage banking side
spk_31: yeah what
spk_3: again on sale margin obviously i declined through the quarter or that's or at the end of the year and with some but certain expectation as we as we go into first quarter and potentially higher rates on on the game fell margin he just run yet alpha point other than the real impact and key for was the drop in the like pipeline at a low level of still firing off me run around three percent and so depending on market dynamics you like a pleasure a during the year but my some should be roughly three the yeah maybe three quarter of the us i said in in in the trajectory that of the year would be again hiring key to keep three lower and que forty one just given that the fact that we've got a fair value the effect of that like by change
spk_31: okay
spk_34: i that's good thanks and then
spk_32: finally for me just as we as we look at the integration
spk_3: timeline and yeah you have your your integration office what are some what are some goalposts we should be looking for as analysts and investors whether that whether that's events and timelines or metrics to
spk_35: he answered indicate a successful integration
spk_36: well first of all that a yard court in all the guys we're getting when we made the announcement we still feel comfortable with that guidance of closing the deal adding second quarter admit late second quarter in i mean guideline guidepost the me obviously the shoulder vote for both companies the middle of next week
spk_0: that would be one and then ultimately regulatory approval like i said my opening comment were still more than comfortable with the time i we've given we'd got great relationships with our regulators things are going great when we anticipate
spk_1: i'm you're getting a deal close by your mid second quarter and have any changes with we died
spk_2: i get them thinking with thanks for that i get them and maybe even after closing
spk_1: in terms of of integrating the franchise's whether it's i growth targets or retention targets are or things like that
spk_0: yeah i think after we close hill arm we would go when we have a know of and the are some type of a road show or at the first earnings call with the provide that guidance are clearly other you know milepost would be core conversion them and things of that sort their normal and mergers but it i bet it's a great question we are working on that so we will be providing some of that clarity have to be close the deal okay great thanks i get yet thank you again as a reminder as you would like to ask a question over the phone sector press are one on no telephone there are no further questions at this time miss bowling visconti thank you again this is jackie berlin and we would like to thank you for your interest and i'm for holding corporation and participation on our fourth quarter twenty twenty one earning how they feel free to contact me if you like clarification on any of the items got today are provided an hour presentation material that will conclude our car by
spk_37: at this concludes at a conference call thank you for participating
spk_2: you mean out this can good morning and welcome to the up call holdings corporation fourth quarter two thousand twenty one earnings call at the same all participants are in the lesson only mode after the speaker presentation there will be a question and answer session
spk_3: to ask questions question during the session you will need to press star one on your telephone please be advised that the these conference is being recorded if your car any further assistance please press start zero at this time of would like to introduce miss jackie bowling investor relations director for of gone the begin the conference call miss bolin nice go ahead thank you ran the morning and good afternoon everyone thank you for joining us today on our fourth quarter twenty twenty one earnings call with the this with me this morning or court oh hey over the president and ceo of until holdings corporation tory nixon president of uncle bank run farnsworth or chief financial officer and frank named our are to credit officer after prepared remarks we will take your question yesterday afternoon we issued an earnings release discussing our fourth quarter twenty twenty one result we've also prepare to fly present a sandwich we were for que during our remarks this morning both these materials can be found on our website at unclear bank dot com and the investor relations section during today's call we will make forward looking statements which are subject to risks and uncertainties and are intended to be covered by the safe harbor provisions of federal security law for list of factors that may cause actual results to differ materially from expectation please refer to slide two and three of our earnings conference call presentation as well as the disclosures contained within our as the filing oh now turned the color to court or that you're jerking off the ride a brief recap of their performance in and past rhonda discuss vehicles for the discuss credit limit take your questions me for the fourth quarter we reported earnings available to shareholders of eighty eight million dollars this represents vps forty one cents per share compared to the forty nine cents reported last quarter and the sixty eight says reported in the fourth quarter of last year with this link quarter decline due primarily to fifty million and merger with added expenses and last quarter's sizable pervert provision recapture the decline from the prior year period reflects a more sustainable level a mortgage banking income in the current quarter as volume of margins normalize from the twenty twenties historical high levels as well as the previously mentioned merger related expenses once again before the point of the quarter was organic low growth which contributed to increase net interest income than the prior quarter when ppp related fees are removed non ppp loan balances groove nine hundred and thirty million dollars in the fourth quarter representing a quarterly growth rate of four point four percent and an annualized growth rate of eighteen percent notably the quarters organic generation significantly offset continued declines in ppp loan balances enabling told for full expansion of two point seven percent or levin percent annualized during the fourth quarter expansion during the quarter before the year was balanced across categories and though pipelines are lower today than we spoke them when we spoke in october given the fourth quarters heightened production and seasonal trends we expect continued long road through twenty twenty two as a multiyear initiative which includes successful ongoing talent acquisition and brand momentum and that or markets and eight and us to take market your and dry value for our customers with ppp remaining balances at only three hundred eighty million or one point seven percent of the portfolio the majority of our anticipated net organic growth and twenty twenty two will result in net portfolio go for the year and any favorable movement in line utilization which we have not seen to date with provide additional tailwind regarding capital in november we paid our shareholders the didn't or twenty one says per share consistent with historical payments and as we previously discussed with a not be purchase any given ensures given are pending combination with columbia banking system which we announce october twelve well our while our usual next and has been replaced with the information and updates related to are pending combination we continue to make strides as a standalone entity i'm going to provide a quick update and a few notable items as planned we consolidate fifteen stores early in the fourth quarter bringing our total rationalizations under next june two dato to thirty four the moving out moving us with in original thirty to fifty store consolidation goal we consolidate in ninety nine stores under next jan one and next year to dato which represents the rationalization of one third of our footprint over the past four years during that period the number of non see the accounts as grown by two point seven percent as the number of demand accounts has grown by four point one percent
spk_5: since we launched our original next and plans and late twenties seventeen our deposit balances or up six point seven billion or thirty four percent and non cd balances or up seven point seven billion or forty five per said driving efficiency improvements in our core begging segment
spk_3: or humid digital initiatives remained critical to our long term strategy as our customers continued to engage with us the digital channels at an accelerated pace that would cheat mature include a steady pace of increasing zell transactions which up seven percent for the quarter and at forty eight percent for the year additionally we cross a new milestone would go to users as we passed a one hundred thousand work in the quarter
spk_5: when final comment before passing to run either talking about the growth opportunities ahead for on call for a number of quarters and are storm performance in the fourth quarter provides continued support for these remarks
spk_3: the past few months production is a tremendous accomplishment it's alright but it has all the more noteworthy or the demonstrates the intentional and successful separation of or growth initiatives from or irrigation integration planning activities related to are pending combination with colombia that we have previously disclosed the integration management office was established a leader integration and the imo leadership team includes senior executive leadership about on corn columbia
spk_5: the imo enables on bankers to have undisturbed focused on generating business and serving customers and i am remain highly enthusiastic that the growth prospects within our markets and the momentum from or banking teams or drive continued growth and twenty twenty two that enables us to deliver shareholder value of in long term
spk_3: and what that run taken away well they did court if it isn't the call want to fall long are you referring to turn page numbers mer earnings presentation page twelve of the slide presentation contains or summary quarterly piano our gap earnings per share for queue for were forty one sense excluding them as our input see the a another fair value judgments along with merger exposed next the disposal costs are adjusted earnings were forty four cents per share this quarter for the moving parts as compared to que three net interest income decreased less than one percent reflecting the six million dollar decline in ppp fees mostly offset by continued organic loan growth and a reduction in her cost of funds
spk_5: we're to recapture prior provision for loss of less than one million with improving economic forecasts of that in the provision required for new longer of down eighteen million from the prior period recapture
spk_3: none interest income reflected the expect a seasonal decline and mortgage banking revenue axiom the msr more than offset by lived in the amazon fair value with the increasing longer term interest rates and not a sixpence included merger expense recognize to date for the columbia combination as for the balance sheet on flight thirteen in bring cash decrease to two and a half billion this quarter driven by the as it remix into loans with the record know ptp growth as quarter
spk_5: we also added one hundred fifty million to the bomp or foil later in the quarter as longer term yields increased the two point five billion in cash along with expected future forgiveness and pay off on the remaining three and eighty million of ppp loans
spk_3: will give us a litigant future optionality for funding ongoing long growth our total available liquidity including off balance sheet sources and a earth fifteen point three billion represent and fifty percent of total assets and fifty eight percent of total deposits movie debates sixteen of the presentation our name decreased six basis points and total to three point one five percent you for and we present a waterfall in the margin change on the right of the page the name excluding the impact of ppp loans and discount accretion was flat which is great to see the impact of continued non ppp long growth and deposits continued repress lower often in the impact of the low rate environment or costs of in spring deposits was eleven based points in key for
spk_5: the next to slides include information which investors may find helpful as the market is present in the potential for fed funds rate increases and twenty twenty two
spk_3: first on slide seventeen
spk_5: we have expanded the detail provided on repricing and maturity characteristics of or loan portfolio
spk_3: the first table on the upper left breaks down the price in drivers on loans that and as viewer and thirty three percent of the portfolio is fixed two percent isn't remaining ppp balances thirty two percent isn't floating rate and thirty three percent or in just civil rights over time the lower left table shows maturity schedule by category in the upper right table shows the loan rate floor buckets for floating them just murray loans note thirty nine percent of the combined total are out there floor
spk_5: mean sixty one percent have no floor or above it
spk_3: for the five point seven billion and floating an adjustable rate loans after floor the lower right table breaks down the balances by ray change band along with the weighted average rate changed required for lethal as to move above their floor hopefully investors and analysts will find this information useful in assessing the beneficial impact on net interest income a future potential rate hikes next on page eighteen on the left with included a project an interesting come sensitivity for future rate changes in both ramp and shock scenarios over two years this is a simulation we ran back as quarterly and assumes a static balance sheet ideally will continue to see an asset remakes with cash skipping bonds and flowing down the loans
spk_5: which will benefit or net interest income absent any rate change but this is not included here
spk_3: that apart the betas used in the simulation ranged from forty three to forty five percent on a spring deposits for sensitivity on a model results every ten percent change in the beta is plus or minus one point three percent on the plus one or bases one shot results the table on the right shows deposit beta from the last rising rate cycle starting que three twenty fifteen and ran through que three twenty nineteen to catch the lag effect or bit of them was forty two percent uninspiring deposits okay now to our second disclosures sorry what the core bacon segment from pitch twenty one of the presentation net interest income was flat sequentially driven by the strong non ppp long growth and continued decline in costa funds are setting most of the ppp decline a talk about season the provisions did on a few minutes but you'll see here we had hundred and under one million dollar recapture this quarter from unproven economic forecasts the pharaohs down as the change and fair value loans carried it for value at a loss of two point seven million here in queue for as long term interest rates increase this quarter compared fair value gains over the last two quarters managed think i'm a forty two point eight million increased twenty three percent from que three
spk_5: related primarily to hire swap and syndication revenue as our commercial finishes advance
spk_3: and in the non issue expense section you'll see the merger expanse reckon date on the combination along with exit and disposal cause really delete sexism on recent store consolidations and a right of use lease as an impairment as we execute er return to work plan the direct manner spencer the core begun segment increases quarter primarily related to higher loan production centers given the record grove discussed earlier
spk_5: efficiency ratio on the core increase to sixty four percent reflective of the merger expense know this would be fifty seven percent x the merger and exit the full costs three now to page twenty two the presentation we should the mortgage making segment bad quarter trends
spk_3: to start we had a hundred seventy one million dollars in total help for sale volume this quarter down seasonally twelve percent as expected from two three the gain on sale margin was two point seven one percent again down from que three as expected given a slow in mortgage market and decline in the lok pipeline
spk_5: these two items resulted in the twenty three point six million and origination sell revenue towards the top left of the page
spk_3: or service in revenue a stable and for the change and msr fair value the passage of time peace increased slightly while the change due to valuation and birds with again of fifteen point four million
spk_5: due to the increase in long term interest rates in the second half of the quarter nurse expense told twenty six point six million for the quarter again this represents hell for selvage nation cause service and gas along with ministry of unallocated cause the dread expense couple of this was eighteen point two million as noted on the right side of the badge
spk_3: represent two point zero a percent of production volume of slightly embarrassed going some lassie quarters with the lower volume
spk_5: couple finalize for turn over to frank
spk_3: and slide twenty five we've included a new quarterly loan balance roll forward the record quarterly now tpp longer of was driven by a record two point three billion dollars in new originations offset by one point four billion and pay offs
spk_5: next for me take your tension the slide twenty seven on cecil and or allows for credit loss as a reminder are cecil processing corporate life alone reasonable supportable period for the economic forecasts for all portfolios with the exception of see and i which is is a twelve month reasonable portable parried reverting gradually to the output mean thereafter
spk_3: hence he forecast incorporate economic recovery three twenty twenty two and beyond as most economic forecasts revert to the mean within two to three year period we use the consensus economic forecasters quarter updated in november
spk_5: overall the forecasts showed improvement and several key areas of the economy works to the latest variant
spk_3: we include the seventeen million dollar overlay for various theory portfolios to hedge against any potential near term slowdown or negative terms with the pandemic net of this overlay
spk_7: including providing for the strong low growth we recognize less than one million dollar recapture and prior provisions for low loss
spk_5: that charge us for key for remain low it's seven million dollars or thirteen basis points of loans
spk_3: much lower than the models last your suggested and the majority of net charge of this quarter related to the small take at least portfolio the feel a quarter endless one point one six percent during this ratios one point one eight percent excluding the government guaranteed ppp loans and these are economic forecasts drive in the reserve it will simply take the as the time to see of net charge us followers modeled but today the models assembly overestimated the actual that charge ask him a lag of at least six quarters or day one sees the level was right at one percent on the sale which is about forty million lower on the a sale for non ppp loans where i currently
spk_12: all else equal this acts as a sale will the be charged often future periods if the models are eventually proven correct
spk_3: or be recaptured and or used for providing for future loan growth if the economic forecasts continue to improve time will tell and lastly want to how i capital on page twenty nine name and all of reddit regulatory races remain in excess of well capitalized levels or to income ratio the eleven point six percent and or total respect cavalry shows fourteen point three percent the bank level til respect capital ratio was twelve point nine percent
spk_1: and with that i out on the for frank number to discuss credit
spk_0: thank your own i will also be referring to certain page numbers from her earnings presentation for those who want to follow along slide twenty eight reflects our crack quality statistics
spk_9: our non performing assets total assets ratio held steady at point one seven percent and are classified loans to total odds ratio declined by ten basis points two point seven one percent
spk_11: our annualized net charge off percentage to average loans and leases was thirteen basis points in the quarter reflecting below average net charge of activity in the finn pack portfolio the finbarr portfolios ratio came in at one point seven five percent notably below it's historical three to three and half percent range for this
spk_10: second consecutive quarter reflective of higher levels of customer liquidity improving economies and the favorable impact of strategic credit tightening implemented last year
spk_11: excluding finn pack annualised net charges were just to basis points
spk_3: obviously we're very pleased with their credit quality metrics we remain confident the quality of our own book and we look forward to continued high quality growth
spk_9: back to you clarke quay thanks frank i'm around for your comments rents will now take questions
spk_3: you sir the slammer with that to take questions from my have for us today again as a reminder if you would like to ask a question over the phone of the press r one on your telephone to be back we have our first question from the line of jeff through this may be a davidson he's go ahead thank you and the morning or a court you mention the pipeline down a little bit makes sense as he had at a at a strong production a quarter just one i kind of get a sense for the twenty two outlook and then it on a related question
spk_12: and how you view loan officer hires given the news of the pending merger the a padded take that as a work we're combining with him with another bank here and and just and the recruitment process that you would do that that changes any but that to narrow that down expectations for twenty two growth and then how you approach the hiring thanks the jets i mean i'm tori answer in detail me is give you a kind of odd to store go global answer to know we've we've bad as we've talked about i think you've asked me before kind of odd of we we have been a bank of choice by bankers of the last sort of stories many are in all the the are tracking seen islanders
spk_5: maybe did pirated tory when i create real estate group we've been a great arm shop for people looking to get out of bigger bags bank be compete with now today as we've gotten to be over thirty billion i don't skins i don't see that changing after a combination with colombian fact i think you by her clinton i talk about we we seem to be on a player of choice as opposed to
spk_3: people are going to flee from here because oh my goodness gracious were going through a merger and i don't see that changing from historical on mars our historical perspective on on the town that we've been able to attract we had a great you for and i'll at torrey talk about it more in more detail on and on and cats often wonder that at a fabulous job and for continuing issue that pipeline grow but let me get it over the tory to to get as a answer low greater detail but unite i just think the combined organization of being a fifty billion dollar behemoth you're in the pacific northwest and has not existed in unless twenty five thirty years is just a great opportunity for us to attract talent as opposed to be a place where people would flee and in and try to go down to hear that or give thanks heart that just the story to i'll start with the them the banker question of the
spk_11: to courts point
spk_9: we i believe i we believe we have a very strong guy proposition for bankers and we have seen talent come into this company over the last several years in that will not we we will continue to do in we are an aggressively searching for good quality bankers were higher
spk_14: these are folks in in phoenix to for our our arizona team for hiring or bankers throughout our footprint california oregon washington and continuing to have a lot of success on some we will we will continue to do that on
spk_9: ah on the pipeline as as mentions down a little bit from from where he were a quarter ago but that's for obvious reasons we had just an outstanding que for in all lines of business he and you my my expectation is a q one will certainly won't be what queue for was just because we had we had some business that we that rigidly thought would would be a a q one production that ended up gonna get pulled into into queue for but the pipeline is still still healthy and still strong a can
spk_7: two new intake grow so we've got a lot of great bankers out there talking to customers talking to prospects and building the pipeline i'm i feel very confident that twenty twenty two will be a strong longo here for us at least you know mid to high single digits and i'm excited to take continue to see progress in the bank a jeff wilpon one last comment and you guys would have asked the so of i think when clinton i route in late december in december parking a big with we got ask this question quite a bit as him in
spk_5: and i know exactly why and what we've been saying and i think as evidenced by air and our fourth quarter production whole us accountable for the growth mean if you want to see how we're retaining in attracting count hold us accountable for the wrote in the balance sheet growth in earnings that that's the way to look at it you know we we are we will lose people in we lose people and we retain the people what we want to retain
spk_3: but ultimately it's how we continue to grow with our customers and that's where i think you should look for arm or are true retention efforts are we are our efforts to retain quality talent should come in the form of growth bouncy
spk_38: got it
spk_9: thank you
spk_3: switch gears a little bit on the expense sided it sounds like a next gen dates are gonna maybe slide to the to the kind of the back burner a little bit not that back off disclosure of that's i just wanted to get a milepost checking in on on perhaps your brain that expense one right about hundred and
spk_12: low on hundred eighty million range acts the merger exit costs what what's left
spk_16: that said
spk_17: take on costs age for this initiative
spk_0: my attic it had a tail and it's twenty three even if he could detail that
spk_19: job this is renee i'd say you're not know chase are pro games serve for twenty two of looking at six hundred ninety the southern ten million of expense that that hasn't changed in missouri stiller and term targets now so that incorporates a decline in overall mortgage hell for sale volumes which you know can be a while ago
spk_39: from time time been when evans of rapes
spk_20: the with that i'd say that you know the tail post and the impact of the stores and recently consolidated hearing keyboards can be really more around in smaller amounts of a in air get around a lease consolidations back office
spk_11: benefits from let he readies least impairments exeter of which are incorporated in their guidance for the overall your expense of them
spk_12: and then that just like we're going on
spk_21: housekeeping that the ppp pc i think image down five point nine nine what were those in the fourth quarter specifically
spk_19: yeah in innkeepers nine point six million there's a little over eleven million left going forward ninety nine percent of that is gonna be ran ran to like up or him thousand and left relieved around one
spk_20: i'll step back thank you
spk_22: yep thanks of
spk_23: thank you
spk_20: our next question as from the line of matthew glock with by percent their please go ahead like on him
spk_24: prevent an attorney specifically quantify the loan pipeline come out of a quarter just to give us a sense
spk_3: he elena on a comparison for comparison freedoms there are so mad tory the laugh at the end of the que three pipeline is about about four point four billion in total and today it's about three point five so three point six somewhere in that range and so that's a that's the mark between last quarter and and this quarter again i i feel that we had a lot of business that booked in eighty four and a phenomenal queue for in terms of long growth at the very good about momentum and the prospects for us to build the pipeline and to have a very strong a successful twenty two among growth
spk_19: okay
spk_25: and and sound like does
spk_19: a lot of opportunities to hire producers at west given all the disruption that's taking place but can you give us a sense for what percentage or however you want to measure to quantify it
spk_26: what percentage of your producers are locked up with the deal
spk_19: unlike get locked up matt me with
spk_20: with the aggression
spk_27: in terms of retaining producers
spk_5: so their camp
spk_3: it would data leave them her young you know what percentage wise and rafa going to percent of thought my head i'll tell you we're we obviously with keep employees you know look at all types of retention
spk_0: i'm opportunities whether it's just cash or stocker or the way we pay out and says and yada yada yada and yet we feel like i mentioned before very very good arm about our retention prospects with our current staff the ability to continue to attract a we shown in in in more tumultuous hiring years or have
spk_28: been years arm in the last four or five stories been here i know you but on the called mapper we've been able to attract a lot of talent on some of the bags some of our are larger competitors because like tory mention a few minutes ago we have a great value proposition so i not be i'm not naive to your question clearly there's disruption potentially with a merger once again we are at fifty billion dollars there aren't a lot of generals commercial banks effect are not in the pacific northwest of will be able to do we do and between that and then yes we do have retention the tools and are and are back pocket they will we will use before very very good about are bullied retain once to can hold me accountable for the growth or me accountable
spk_3: great thank you and and ah be run on a corn him out locating the expectation community the quarter was fairly stable which it was ah
spk_5: what are your thoughts on that
spk_29: i'm
spk_3: can be as it yield outlook
spk_28: ah and and iam update on
spk_3: the weighted average rate on on new loans this quarter
spk_5: yeah good question
spk_3: so i'd say just in terms of a role as a of little indicate when really relieves it's gonna be a function of continued loan growth and they cash waterfall remixing them into loans skipping bonds with the on the burnside in a with the the sell off and no longer term rates prepayment speed assumptions are slowing down so there could be some lived in terms of lower amortization looking forward just as those things extend slightly knew you'd expect that to occur with higher rates this i've met on the alone yield side are you on loan sir x ppp was up for five beds and month of december compared to keep for so that those well looking into coupons well thank you bet thank you the next on the have the line of brandon king that to is secure
spk_7: eliza me
spk_13: hey at first one it takes on the merger costs a me the one hundred eighty five million these are you may copy in achieving add or even above that amounts but always wondering why
spk_12: kind of inflationary pressures could expect that number in it that had gone into any of the because my confusion of a cheap cause it get more bring your question so overall that her thirty five million remains our target were internally were targeted a number higher than that
spk_28: but i'd say this you know inflation witness not new this month this quarter it's that we've been dealt with inflation for the last year year and a half
spk_12: on the back end of the pandemic so in when i look ahead into the future and i think about estimates and accretion and them automatic cetera one of the benefits of home at higher internal target they were working towards the be to help offset if we do see continued outsize inflation and were and over the mouse there of
spk_30: and then also wanted to touch on the growth and know the odds decline due to the street outlaws and forth by the question could you please quantify it's an amount of parties now we're related to the uncle investment
spk_17: and then i wanted to get a sense of ways he deposits groin from here and white you you'll be a season seasonal inflow based off of the outlaw puts you in then overall impact on his bed which is why i can raid and way that are due to the trained in departments
spk_0: check out of a loaded question and lovingly taken apart as of gotta say that have that the other have a headset their the first component of would be it with a little under two hundred million ounces sensors of the you i balances that route elsa point out me others any given quarter there might be timing just in terms of in a month and or quarter in a siege time in the was probably about a hundred fifty million that fell in the january that and prior
spk_31: years might have been twelve thirty one so less is more function of the calendar when you're looking at that point to point number when we look into twenty two obviously still very confident about deposit growth our citizens utterly or longer afford a deposit earth and twenty two i am to build wild card for all banks not just on was going to be know what what occurs that the as a fed raises raids do of role did he a maxes drop and move back into despairing or to balances for
spk_32: oh out and say the benefit and we have on there for i compared to you
spk_31: pass potential resume cycles is just the larger presence of larger balance of
spk_12: core commercial deposits and our bug mess up with the teams done over the last for five years so
spk_13: him here there's other fluctuations during the year just in terms of the attacks time and qt or maybe public fun for as queue for but i had traditionally over a long time horizon we've been more of a seasonal bell curve there as well with syrah of thing que three kids you t three little less than human key for me
spk_12: mostly up offset by those tax ill time in nuances
spk_31: on a late eighteen and a brand a he as a story the me just add one one thing on a kind of the bank or front age thing about we talk a lot about loans by the your art we have a lot of a lot of bankers that are in all different kinds of business weather's retail whether it's in the middle market community banking a real the group mean their goals
spk_32: and they're incentives are equally distributed between lending and our deposit growth and fee income growth in mean those things are all of them are very important in it's a very balanced scorecard he and at how their compensated in your all those things are important to us obviously so we continue to monitor and push and are successful in
spk_5: growth and all three areas not just on landing site
spk_3: other agates following up on that what is the ratio you can we expect when you grow for instance the and i loans and when a will be to ratio the pot coming that note the
spk_34: this is stuart in this is try to catch kind of impossible to answer on or the be caught me because it depends on on the type of customer the industry that they're in what they're borrowing for ah
spk_31: and on and just how they are cash so yeah i think if if you look at the different businesses or community banking business has about a one to one ratio of loan of standings and posit balances are middle market business as a little more the lending side than a dozen the deposit side a real estate business for sure is can be more lending that and is deposits
spk_32: on our retail bank is is probably a deposit base for the companies are really just kind of depends on but he so yeah i'd i can't really answer probably more detailed and added disappointed with go in and they got some information may be but a dad that be my off the cuff comments mocha thanks all answers
spk_31: thank you
spk_3: again as a reminder if you would like to ask a question over the phone since the press or run on your cell phone keypad our next question as from atlanta mr jared shaw with valse argue these guys a good morning everyone
spk_31: many yeah it have a good mention that the growth outlook doesn't assume any type of ah
spk_40: realization of the utilization
spk_34: outline evolutionary what happens if he do seedless asian normalization their how much of an impact of happy to to balance it
spk_31: garrett hi this is said tory again so if if we if i look at the utilization rate going back a couple years
spk_3: in in ky que for two thousand and nineteen and rc and i business is about thirty five percent and today at the and a queue for is about twenty twenty six i'm that that's about as if we got to that back to the the thirty five percent level kevin a stork a level it's about two hundred and seventy two hundred sixty million in our outstanding see more else and any for the company
spk_35: okay at that that's great thanks and then on the mortgage banking side
spk_36: yeah what
spk_0: again on sale margin obviously i declined to the quarter or that's or at the end of the year and what some sort certain expectation as we as we go into first quarter and potentially higher rates on on the game fell margin
spk_1: he just run yet alpha point that that the real impact and key for was the drop in the like pipeline at a low level of still firing off me a run around three percent and so
spk_2: depending on market dynamics you have a complex fluctuate during the year but my some should be roughly three the yeah maybe three quarter of the us i edge in in in the trajectory that of the year would be again hiring key to keep three lower and que forty one just given that the fact that we've got a fair value the effect of that like by change
spk_1: that's good thanks and then
Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only. Earnings Call, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

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