Veritex Holdings, Inc.

Q4 2020 Earnings Conference Call


spk_0: good day and welcome to the varitek holdings fourth quarter and year and twenty twenty earnings conference call and webcast all participants will be in a listen only mode please note this event is being recorded i will now during the conference over to mrs and coddled investor relations officer and secretary of the board of irritates holdings
spk_1: thank you before we get started i would like to remind you that this presentation may include forward looking statements and those statements are subject to risks and uncertainties that could cause actual and anticipated results to differ the company undertake no obligation to publicly revive any forward looking statements at this time if you're logged into our webcast please refer to our slide presentation including our said club or statement beginning on line to for those of you joining us by phone please note that the safe harbor statement and presentation are available on our website varitek bank dot com all comments made during today's call are subject to that they carter statement some of the financial metrics discussed will be on a non gap basis which our management believe better reflect the underlying were operating performance of the didn't play see the reconciliation of all this got non gap measures and are filed eight k earnings really joining me today or malcolm holland are chairman and ceo sorry early or chief financial officer and claim really are cheap credit officer allowed to end the call over to malcolm
spk_2: the morning everyone hope your remain safe and healthy as we continue the derbys crazy times you've certainly seen our fair share of concerns over the last year and even though several of our staff members have been sick fortunately we've only had a small handful hospitalized despite go with number still rising the leadership of the state's actors as a lot of business to remain open you some restrictions and will continue to operate a manageable levels with approximately forty eight percent of our staff currently working from home the fourth quarter was an outstanding quarter for their decks we recorded operating earnings and twenty nine point seven million or sixty cents per share of thirty one percent like quarter increase free tax free vision continues to be a strong metric for us producing thirty eight point four million or so seventy seven cents per share produced in a return on average assets of one point seven five percent for the porter long growth x p t v mortgage whereas continued it's positive trend growing four point three percent annualized through the portal and two percent for the year and and twenty twenty mortgage warehouse continued it's gone girl with twenty four percent annualized increase for the quarter or two hundred fifteen percent growth year over year
spk_1: yet it still remains only eight point five percent of our outstanding loans at year and twenty twenty and even lower than an average balance basis
spk_2: we are proud of our lenin staff and support personnel even with the challenges and twenty twenty were still able to show positive long growth pipelines remain strong with the like we have a great deal of momentum going into twenty twenty one in the fourth quarter rc see and i came on board and more new relationships than any other porter during the here we continue to see fallout from the emanate disruption in the taxes banking markets as well as clients relocating other the national and super regional institutions these two scenarios boost are numerous growth opportunities growth has always been a core principle in their decks with neither positive longer healthier deposit growth continues to be incredibly strong total deposits grind eighteen point seven percent link order but more impressive is the annual growth and non interest bearing deposit growth of thirty five percent year over year i could picture becoming clear and is trending in a positive direction for the quarter we did not provide a long lost provision and the a decrease twelve basis points and are a c was reduced from two point one of loans the one point eight percent of loans we did have charges after sixteen point five million during the quarter almost all of which came from acquired lungs clay will give you some more color on that that are not turn it's all over the charity discussed the financial results thank you now come on page five you'll see multiple grouse all the focus on three of these first tangible the vapor share increased to fifteen dollars and seventy cents in the fourth quarter reflecting strong tangible capital generation of twenty point five million this latin percent increase on the link quarter annualized basis second operating retire on average tangible common equity remain very
spk_3: strong in the fourth quarter and sixteen point four percent it's level remains well bomber cost of capital finally the operating efficiency ratio shows that we've now been to fifty percent over the last spot quarters this little efficiency ratio the cheaply were brands like business model is the key to maintaining our strong pretax pre provision earnings on the six nana income increased approximately one million dollars from cute three to keep a one to sixty seven million for the quarter expansion net interest in congress this was achieved despite one point four million and lower purchase accounting accretion and one point three million in
spk_2: interest expense from the subbed that rise to cornell excluding all purchase a county accretion expanded part basis points to three point one five percent the gotten any margin contract and three basis points to three point two nine percent key for the most significant items affecting the nam work lower accretion income and the said that rise negatively impacted the name thirteen basis points combine this was all set my six basis points of nam expansion from discipline deposit repricing your additional opportunity opportunities to continue to drop deposit rates lower finally the prepayment have a two hundred million dollar fhlb advance positively impacted the neon battery basis points know the keep were long production was three point eight four percent and keyboard interest bearing deposit production was twenty six basis points your to primary factors which in helping him to improve and twenty twenty one for first as nine hundred million in cd maturities and twenty twenty one is mature at a rate of one hundred and five basis points and should be renewed it right below thirty nice points second the forgiveness of ppp ones and to redeploy know that one percent long and a higher yielding asset classes for cute for the ppp portfolio oh represented a twelve basis point drag on the now on slide seven another strong on interest income quarter but not point three million and run it
spk_3: this result was led by deposit fees and interest rates swapping go expenses rub slightly into for and very much in line that means but expectations oh you're twenty twenty efficiency ratio was below forty eight percent
spk_2: time slot eight and deposits that mountain we another strong quarter on the deposit prompt as transactional deposits group three hundred and twelve million dollars for over twenty six percent annualized the knicks of a deposit portfolio has improved significantly since the beginning of twenty nineteen would not interest and deposits exceeding there
spk_3: eighty two percent of total deposits and our reliance on time deposits has now dropped slightly over twenty two percent the graph in the bottom left of the page shows the tran and quarterly deposit cost average cost a total deposits decline but eight basis points and keyboard and mouse did at thirty eight basis points looking past the fourth quarter
spk_2: the table and the bottom right corner says the time deposit repricing opportunity for twenty twenty one and beyond
spk_3: on line ninety the details of ireland portfolio malcolm's already mentioned are growth for the quarter a commercial real estate business remain strong the mortgage were warehouse portfolio group thirty three million in the fourth quarter when you would normally expect seasonal contraction
spk_2: land use asian is certainly weighing on c and i growth as you can see on page your and utilization levels are down six percent from twenty nineteen and eleven percent in the peak levels in the second quarter regarding the ppp book portfolio we had fifty million dollars or twelve percent brigade in this during the quarter and we expect the pace of forgiveness to accelerate as we go through twenty twenty one on flight piano and allowance for credit losses the spotlight that the impact from season on each long cooper keep drinking for movies forecast his unemployment and gdp continuous the key economic input into the model focusing on the column i december thirty first twenty twenty the improving economic outlook positively impacted our allows for credit losses on problems to the tune of eighteen point six million dollars we reduced or specific reserves on not a on to sixteen point nine million were reserve level of approximately twenty one percent has declined to resolve charge after the court this we are reserved for pc the to increase four point one million to seventy percent of the outstanding balance driven by various impairments and pools as we said throughout the first three quarters of twenty twenty we were building the reserve in anticipation of future credit migration and that charge offs
spk_3: this approach coupled with an improving economic forecasts allows the book zero provision for credit losses this quarter and reduce our overall allowance
spk_2: the crowd borders addition to the losses during the economic forecast consistent qualitative factors reason the model that increased our final allows about thirty five basis points additionally still have sixteen million and lung interest rate marks on the balance sheet from the grain acquisition is translated the twenty seven basis points of additional cushion
spk_3: on that part of the acquired portfolio
spk_2: finally during p for we increased at the reserve on funny commitments not been nine hundred and two thousand dollars in the face of a favorable change and economic forecast this increase resulted from considerable commercial real estate production during the fourth quarter that has yet to find out on slot eleven capital ratios upholding come in the bank started the year for strong position and remain robust as we exit twenty twenty most ratios decline modestly even though absolute capital levels were higher than modest decline in the ratios are due to balance sheet road and a notable increase in unfunded commitments that pushed risk weighted assets hi where the sub that and the priest in the allows for losses were the primary reasons for the increase the total capital ratio focusing on the graph and the bottom right corner with age were declared a regular quarterly dividend i'm seventeen cents per share were twenty eight percent payout ratio of operating dps also during the quarter we we purchased the hundred and forty seven thousand shares and an average price of twenty two dollars ninety cents get twenty three may knowledge remaining on the back authorization and intend to remain opportunistic with that like turn column decline getting on credit like it very good morning every once and page twelve of the deck out some of our asset quality metrics for the quarter the top left chart on page twelve demonstrates that loans on the perl and drop from a have one point two billion as of late july to thirty six million as the or point six percent of total loans as of january twenty first this is particularly encouraging when combined with the fact that passed a law that remained relatively flat year over year as you can see in the chart and the bomb left and the page pat days in the thirty the eighty nine day category included a bottle for loaning the mouse seven million dollars on a hospitality property that's worth secure as well as a two million in administrative due to that are now correct net charge also reflected in the chart on the top right of the page a charges with a quarter were concentrated into credits first was a scene i credit highlighted in last quarter's p a review that was showing going concern issues the business would shut down and liquidated during the quarter resulting in the subsequent charge up twelve million the second charge off was alone secured by houston office building that was transferred the loans help for sale and mark to market based upon the most recent offers we receive to acquire a loan which resulted in a charge off of two point four million the balance of the charges for the quarter were primarily the and guarantee a portion of acquired as be a loans that were liquidated and charged all are you are reserved it all over the first three quarters was done in anticipation of these charge offs and do not change or overall view of the last expectations on the portfolio you can see the bottom right hand corner that piece it a loan said reduced to two percent of the longboat over the last two years and overall reduction of sixty percent they'd start seeing how at our hospitality portfolio the book or is typically a downpour for hospitality properties that being said october was the best revenue generating more for our hospitality books since the pandemic began hospitality loads on the farmer had dropped from sixty percent of the book and at seven forty fourth twenty two point six five percent as of twelve thirty one twenty criticised atherton in the hospitality portfolio moved up slightly for the quarter of i'm thirty eight point six percent of the book to forty point six percent as we get deeper and some the smaller loans and the portfolio money on a page fourteen you see a summary the top ten hospitality loan balances which make up fifty percent of our final standings revenue for the top made properties of increased by thirty five percent over the five months of june through october or an annualized rate of eighty four percent average occupancy for the quarter decline about four percent to fifty one percent
spk_3: for the fourth quarter this was not unexpected given historical performance and hospitality industry in the fourth quarter of most years none of the properties are on the perl and none were passed do a quarter am i continue to be encouraged by with the performance in the hospitality book in the steps that we see on borrowers taking
spk_2: the man it's the the travel restrictions that are implants moving on a retail pre which is on page fifteen or total retail the pearls that dropped to zero dollars this is mainly for given that the fertile for fifty one point seven percent of the book as of the second quarter there's only one nonperforming loans in the space islam a three point four million dollars is secured by hundred thirty thousand square foot property in marietta georgia that struggling from the occupancy standpoint but as more than sufficient back to secure the law the day i don't see any significant you scum analogous portfolio eight sixteen how at the restaurant portfolio the additional stem or support provided by the us government via the ppp program has and will continue to be instrumental in the ongoing performance of this portfolio the farmer have been eliminated as we prepare for the as be a to begin making payments on be eight lungs in the restaurant the largest critics bad relations relationship continues to perform at for one ninety day payment the farmer hey seventeen as a nice lad provide some additional color on our as be a portfolio which we reference frequently in like third quarter we engaged in an external review of operations and process used by the vertex as be a teams are rich in a gun government guaranteed lungs loosely the result of that review and few for and from a and credit worthiness standpoint the as be a to was deemed to be substantially comply with minor corrected measures require sixty seven percent of our current net good balance of government guaranteed loans are secured now real estate having tangible real estate collateral as collateral on two thirds of various be exposure will help limit losses in the has be a book is support stimulus support hands as you would expect the levels the criticize and past do assets are elevated given the impact of the impact and the pandemic our teams are working with these borrowers as encouraged by the as be a to try to keep these differences open through the in fact that the current pandemic
spk_3: i'll now turn it back the malcolm for and marks
spk_2: thank you gray one of the bright spots and greatest opportunities for vertex is our ability to attract incredible talent in many areas of the bank as you can see on slide eighteen the last six months of afford it has the ability to add additional meaningful talent to our team the majority the hires go revenue producers either directly or through our credit process and most have large bag experience i've said that vertex fields it's important to invest in our feature and there's no letter better way than through the talent shall we feel certain that these ads will make as a better and more productive company concerning and the day we feel twenty twenty one will be an active year and i industry for numerous reasons and we have to be an active participant for the right fit i continue to be encouraged by the direction we are headed and the momentum that is building our challenges is in place and our prospects will have to job right had two major markets are arguably to the best and says in the country for population in business growth were all ready for this vaccine to do it's work so when get back to some level of normalcy operator on now like to open the line for any questions
spk_0: to ask a question you will need to press star line on your telephone to withdraw your question press the pound or the hash key and placed and my how we compile the two and a roster your first question comes from graham dick from piper sandler
spk_4: eg as more
spk_5: or them
spk_6: so and swanning are kicking as talk a little bit about what you're doing to defend our the corey glowing yield and the guy environment
spk_5: maybe specifically rep what occur in the fourth quarter
spk_2: he had to keep that yield essentially stable and and also where you see is kind of training of the next few quarters ah you know we haven't seen a whole bunch of pricing pressure candidly your i have been call and on been and people's offices when allowed and them making contact that into some that our markets are many in our markets are not even doing that in so not guilty to get things
spk_1: the and execute is worse off than and said this point we haven't seen any real breaking pressure he didn't you mentioned it's been guy consistent quarter over quarter i think if things get a little better i wouldn't be surprised if there's gonna be
spk_2: peace and pressure provided from some doug to haven't then again ah but hopefully build up some good world it it shows that are yet were were something
spk_3: but i don't see a change in a whole bunch and at least in the short term in in i would add to that theory that that i think our aren't lending teams had done a very good job using interest rate floors
spk_7: ah fit to help boost spreads during this period of zero interest rate if you will and so i think you saying that they aren't for us
spk_5: a great that super helpful and in you guys are sad pregame longer this quarter
spk_2: how do you think is gonna play out in twenty twenty one looks like line he was a shame the bank is starting to that starting pick back up a bit but it's still pretty low relative to where a in a normal environment yeah line years later and certainly down a little bit from where it was with that as an hour as his taxes girls are we go people continue to move here businesses will hear me to read the papers that some large corporate realized that them is a whole bunch of smaller arenas it's you don't ever read about and so in a we let the bar that at long road take out mortgage warehouse and pp believe we still think that twenty twenty one gonna be up well it'll be a positive longer a year
spk_6: we still get some some pay off a fair amount of they asked and infamy that's the sign of a healthy portfolio but we going to work a little bit harder to stay out of it that in i think in our mid single digits probably for twenty twenty one at dp mortgage wow is something that we're certainly going to aspire to
spk_8: a great mexicali that's all for me guys that on a quarter
spk_0: thank you
spk_9: your next question comes from matt omni with stevens anc
spk_10: hey thanks morning as
spk_11: a man a man
spk_12: ah i want to start off flight eighteen
spk_13: a lot about the talent that and last six months can manage them in the market disruption i think i was initiative we talked about a year ago
spk_14: i guess the question is where do we go from here he is are still lot of opportunity to add significant talent or cadets initiative remain positive that that perhaps flow from here just trying to figure out where we go from here back
spk_2: you know a i think i i am said importers ago that the we're going in that the people on i just wanted to respond with a this is this is what we've been doing now these are several a nice this group but or upgrades in that most of them are just additions and damn yeah i think there's a lotta runway with this group right here specifically but we will never take our eye off the ball and continued investing in and people may have learned the people bed with the disruption is only going to get greater with what other with the big meal dnc be the ideal a where are the same that was no option
spk_1: and in i saw yesterday as read this morning that than a new bank holding companies move in the dallas mom the california
spk_11: it's just gonna get more disruptive and so people are what make the difference and the we're talking to some right now that could continue to move the needle for us
spk_13: okay
spk_2: thanks for that not committed to follow up on the back to credit quality think if you mention and paid remarks that the elevated charge off and the fourth quarter doesn't really change your expectations that charge up for the cycle and yet a car you can add your view of that charge off from here
spk_3: repeat of he said yeah i would we don't expect that the are as estimates as a charge offs to to change many play a mean we've we've been looking at those for the last six months hard and on yeah we we did not up our estimates ah an effort for long exposure going forward by sip on what happened in the fourth quarter with these couple a large crowds mm i think this year i think the to the beauty of people
spk_2: it was not exactly an accounting standard i was excited to see that i am have become a fight
spk_15: because it allowed us to use economic forecasts to build reserves in anticipation of what might happen and i think we've seen over the course of the bank release is this quarter
spk_2: you know it would get it a lot of banks were really really including us were very conservative and remain very conservative and with all the government is done with stimulus i mean i do think that that you know think of by large most banks was expectations are coming down as have hours from cupidity
spk_16: three computers or of the oversight over all cycle losses and it is this something you know what's gonna happen when you started down this path of the pandemic it is kinda when it was gonna be your do it was gonna be it's i think the challenges we provided for we did what we should do and our losses
spk_17: are are in great shape our what we we meet up or folio really performing yeah we had charge offs but we knew we were going to have charge from the cycle and the challenging i think internally is really not overreact and that you do stuff was coming i must get it behind it and and you know keep focusing on the good things are
spk_2: on on the the company
spk_0: got it okay thank god
spk_5: like that
spk_7: your next question comes from michael rose with raymond james
spk_5: hey good morning thanks for i take my questions and to follow up on unmatched question
spk_2: you know you just kind of laid out that you credit loss expectations to the cycle really haven't changed may be improved over the past couple corps is very reason to think that you guys couldn't get back to reserve level that was your car where it was pre the cecil day one adjustments are move forward he soon and the economy continues get better you know if cetera yeah coming to your question with specific they can we get back to reserve levels prior to it and ever get healthy so on and they want people they want an answer is absolutely the a lot of it depending on the economy that damn we actually sitting here today we feel as good of that our credit outlook as we've had since april hurts the last year
spk_3: and so yeah i think that's very very reasonable
spk_18: like running that for we we target where we think we're going i think are they getting i think we agree with getting their what's hard is knowing how like when rat get there and ah abusers there's still a lotta unknown but yeah think when you you know as we come out of this pandemic that the the the allows should be a mom with somewhere or in the rain sympathetically up where we were on seats will they wanted that was one point three three percent
spk_7: very helpful
spk_2: it the other question of i want to ask the outlook seems yeah to the positive right so kind of mixing of his on growth maybe the warehouse comes off a little baby gets a margin expansion yeah deposit inflows have been good he was there any reason to think with kind of that backdrop and and outlook but you guys couldn't actually grow and
spk_3: i your vx to pick if you did you declare that be in the minority yeah i'm not the not i think i'm in love and when you got nine hundred and ten million dollars of see these repricing and you their reprising down let's call it seventy five deaths are so i'm enough that meaningful net interest income growth you know any you couple that with with
spk_18: that the the did the loan growth we're talking about you know that we believe we're going to see some we don't think it's gonna you know what we're very focused on that and i mean so yeah we believe we'll see we'll see net interest income growth really lad bought deposit repricing will be no growth and bit in it on the lunch
spk_19: that and and whatever happens with ppp
spk_2: very helpful maybe just one last one for making can you give us a reminder on kind of years year and then a targets and in terms of of what she would look at just and champs a complex and size you not you guys are fat a point eight billion in assets close they can dine i know ppp will run off the and we got round to i he would you want a deal player kyle take you and move beyond that had my and i can blame that guide poster art would you be look and it's up and smaller talk in costs a pack your bags yeah mean an imperfect world we love the in a do something that would take as measurably over a ten day and for a lot of reasons to do you and thereby rounds called know about
spk_20: is the third party aggression woodley beards didn't smaller talk in
spk_2: acquisitions and answer is maybe ah it's for it's possible i mean there some that actually makes some really good sense was you know it they got a barely long memory and i remember when
spk_21: funding and deposit pricing were really really important they're just not today when you put three trillion dollars into the system their deposits everywhere but this too shall pass and so we know always always think and out you know how can we improve our deposit franchise been in a major metropolitan area you know it's more difficult
spk_18: op know the rural areas providers little bit worse as ability and some better funding and pricing so those are those are options and we are looking at those as well as ones that would they would jump it's over ten am
spk_2: in one day
spk_0: very helpful thanks to take my questions
spk_22: going back like michael
spk_23: the next question comes from brady gailey with k b w
spk_24: hey thanks to my gosh
spk_22: weren't ready
spk_25: so so i heard
spk_22: guidance for gotta x ppp acts warehouse longer than that single digits yeah ppp it
spk_2: it's hard to know what can happen around to and our big that kind of a bit but looking just at a warehouse me got to add some great growth there but you know you're gonna have some headwinds with mortgage likely
spk_1: which volumes coming down the shares at how do you think about yeah your ability to continue to take market share vs your national at volumes that are gonna be offered you think that the were out for still grow from our this level
spk_2: you know i do i'm in a we got an incredible team there and
spk_26: what what you don't see it really did change out of the portfolio
spk_2: the book boy we acquired was not the credit quality that the current portfolio result is a real growth in that portfolio is much more than you see in the numbers because we changed our a fair amount and the quality of whom are dealing with now is measurably better and and with him the saying that amy who runs our group there who is known nationally is taking market share and to yet the market itself will probably contract a bit but i believe we will get more than our fair share as people decide to do business with with varitek them of amy so i do seats and growth there i don't see the guy we had a twain at all you know where we don't want to win a wanted the that dependent on that business and greg knapp or so that as a period and on an average bases we're at that haven't one seven point one percent on average loans for the gordon so we've got some run their that you've you won't see the growth is on twenty
spk_3: but thank goodness that it's been there because from a liquidity spam point
spk_18: it is it's been a wonderful bridge from the start of the pandemic the where we may ultimately day and so we're very very thankful for
spk_22: it's ability to soak up some of the liquidity yeah cannot i mean that frequently
spk_27: oh yeah as great great for twenty twenty
spk_3: it's a half trashy think about the buyback you have some left and authorization but yeah the stock is or done relatively well like all bank stocks of the lol reply but yet now at one seventy five it's hands on it right to think that your but for probably are as likely as you shift more towards
spk_2: focus on him and i
spk_3: get yeah i mean that you know we all have been very careful to use the word opportunistic and i think that's what we weren't you for weren't intended to remain know brady our our general view is is the out to use capital that the priority for capital is is organic growth strategic growth dividends
spk_22: back and so you know but the in the back world kind of what what we're saying we're at work work work happy and eager to be a buyer when that when the tangible book value on back and is less than five years if they get sober that you're not gonna see us doing a lot so you know the map pretty
spk_19: sample what have you know that kind of our that kind of our lying on yeah you know you can tell where we're going to be answered how much we do and twenty twenty one can be function evaluation we got we're going to generate a fair amount of capital and we're willing to use it there if the valuations morning
spk_22: or it and then it just look at it it's ten billion in assets threshold you're at eight a today the back ppp read about a points for him and you still have some excess liquidity their minutes it feels like for you to hop over
spk_2: with maybe some of this asset shrinkage it's coming up it does like reacted do you know a to the three billion dollar deal if not more than that and is that up know that many acted differently how big of a bank him in a deal would you consider as far as the targets that size ah gotcha a hard one to answer you know how big really consider as you know my history been very opportunistic and in the first for deals with the edward just smallville than than we did an ama you know we did a really small the on the good at another emma lee and so you know i think to just be totally transparent we would look at everything from you know seven billion or close to it to emily of some sort
spk_1: one
spk_2: obviously in i think we one thing we're definitely learned and this is a new news is that scale is is hugely important in our business and we gotta build an asset date that we can spread expenses over wider and be try become more efficient themselves everyone would ask you know what what that does how big you want to be and i think the answer for everybody the same abigail advise you i would want to be double in rpm three day you want to be sick and visit your be glove and appeared eight may have one of the seventeen so
spk_19: it's hard to say that again remain very opportunistic it is a core competency of eyes and we want to be in that space
spk_22: and we are already having conversations
spk_2: what they want medium sized ones and little ones and will say i have that that's off on and finally for me
spk_22: the have just curious that the loan that claim mentioned in marietta georgia and that suburbs here in atlanta that she's great far out here for trump how the job get that long
spk_2: yeah that and i can question that was the of existing relationship the we had what they on a local a local business and ah they had a location in in georgia
spk_28: and that's how we got it it one that we were going to georgia to fan on a customer we had a customer and dallas that we follow as day
spk_2: got it occur by great that just
spk_19: expert an x ray
spk_2: your next question comes from gary center with the yeah david next morning as more than one have to ask about just your thoughts on kane county management liquidity and twenty twenty one as you get audio tpp repayments coming in are talk about pack for longer but beyond that you don't from venus import folio i would you thinking of about their incomes reinvesting cash flows and and nationally think about canada next of the course twenty one happened at the good question i mean you know you've seen at the portfolio the that the portfolio ryan coming we're on on an average basis we ran with a little more liquidity than i would have liked in the corner but that's that's leveled really but what's going on on the departed and was side i mean it you know you'll see us play on both sides of the balance sheet
spk_3: i mean obviously we prepaid and pretty sizable up i shall be advance
spk_2: ah you know because the is that economics just made sense so it you know and and were in terms of the portfolio no we're not crazy about getting out so far i mean we position this portfolio well for calling rights we have very black and actually so we're not get we have reasonably premium provision so i'm a lot of premium rid of that that that the negative feedback the we added in the portfolio and how brilliant practice or
spk_3: we like for the portfolio is we will from we're not we don't with growing earning ancestor important i don't see the portfolio strike a lot and so we're going to have to work hard to find the defined opportunities that that arm
spk_2: more cause to reinvest risk as far as you can't do a lot of hard work to find something you like weren't something you can stomach i don't think you'd find anything you want
spk_29: adding you now we're we're we're not the me we have a new report off and i'm just not going out his double digit duration on this thing to yet having one yields and just i still think that's a smart move right now but so can you know we're going to just try to be opportunistic will prepaid stop on we can and will you know would much rather continue to grow the mortgage warehouse business arming iraq can eternal and ten percent average and a need for
spk_30: entertainment now with any done a great job with ron and and strengthen that team behind her solid much rather see is completed use excess liquidity over there first is trying to take long duration fixed income plays and investment portfolio
spk_3: that's it and then
spk_2: the core mattress expenses quarter thirty seven and a half million or so
spk_31: yeah give us a sense of canada i early twenty one i'll they're given me all the hires you've made and and were some spence may sell out
spk_2: well i may i think the in out of work for or celebration at you know again as if the twenty twenty efficiency ratio was under forty eight percent you know we ended the year with even when others tires ah did you know just under fifty for the quarter like nine but it's not really going to go down ah discretion or expand from marketing and travel things like that's gonna be hiring twenty one ah some of these people that we got on in the last six months of the year for have full your expenses ah for them next year and you know we're all hoping that it's gonna be a at you know we are amp on the we're all hoping that variable it's like a casket of
spk_0: you better do ah you know but that
spk_2: get get it it's up at the look we're very sensitive to the efficiency ratio we know that the key to generating organic capital and are you know so you know will it'll it'll it'll it'll be up the i steadied up farm ah but but not going crazy
spk_0: beckett

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