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spk_0: good day and will come to the protect holdings first quarter twenty twenty two earnings conference call and webcast of participants will be in the listen only mode please note this event is being recorded own attend a conference over to miss isn't coddle investor relations officer and secretary to the border vertex 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 a company undertakes no obligation to publicly revive any forward little statement at the time if you're locked into our web cap please refer to refer to our slide presentation including our safe harbor statement beginning on fly to for them you joining us python please note that the safe harbor statement and presentation are available on our website varitek bank dot com i'll comments made during today's collar subject to that safe harbor statement them with a financial metrics discussed will be on a non gaap basis which our management believe better reflect the underlying core operating performance and the business please see the reconciliation of aldus kept non gaap measures and are filed ak earnings really johnny me today or malcolm holland our chairman and ceo terry early our chief financial officer and clay really are cheap credit after announcing the call over to malcolm martin everyone and bleed to bring view our first quarter finance results operating that it net and go with sixty six cents or thirty for me
spk_2: and dollars and a pre tax free reserve of one point seven one percent the quarter and many positive attributes that continued to set us up for long term success and increasing earnings growth as i think about our growth during the quarter both loan and deposit growth exceeded our expectations yet the majority of the logo came late in the quarter our average long growth from que for to to was only a hundred and seven may and producing left than expected revenue for net interest then know but our and a loan balance was three hundred sixty two me and greater than que for and invalides resulting in a twenty one per se a annualized growth quarter and a great starting point for que to the growth came and see and i eighty seven me in theory of to and and twenty two man and residential sixty one man just as encouraging was our deposit growth of twenty nine percent with the majority be a non interest bearing dna which group two hundred and twenty five me and during the quarter long pipeline have actually increased and remain robust and should set us up for a similar to high or low growth for the next several quarters the why behind our growth profile continues to be the same for things one focus on caught the upgrade and hiring have experienced and proven talent two operating in the strongest growth markets in the country three continued market disruption and for a commitment from my team that strong risk book is growth is a pathway to enhancing our company's value on the credit died we find all our metrics continued to train in a very positive direction nv a that decline for the fifth consecutive quarter moving down two point four six percent of assets are employed by one the previous quarter criticized that that decrease twenty one percent year over year that is remain in an acceptable range who told charge offs were four point eight and centered in to acquired credits which were previously reserve i like this then a few minutes disgusting the talent we continue to track to our company as you're aware we have made it a pro a major priority to invest in top notch town and both on the client facing and non client dating site for the quarter we are forty seven new people twenty of which are new position as and twenty seven replacements of the twenty new adds ten or on the production side this does not include the three season lenders we hired in houston in the used market a couple of weeks ago leave three hires and the teams they will assemble make a major statement to the used market that vertex is committed and position very well to continue our i are getting growth in this market our focus on talent and finding the right people and most importantly that fit our culture and share dedication equality quality growth will continue to driver value proposition that that i'll turn it over to turn the t malcolm forgiven specific pages and results or would it make a few general comments queue for to
spk_3: one was an amazing quarter and eighty four cents operating a p s during queue for everything fell our way including bond repayment income collection of nonaccrual interest boldly proceeds and in a trip well reserve release if we just keep or pps for those things plus first quarter day
spk_2: take out and shirk out they were right on top of our key one twenty two operating results of sixty six cents and eap yes
spk_3: as you think about you want twenty two please keep the following in mind first the timing of the mismatch from when we raise capital into a week until when we can get it fully deployed next period and appeared in loan growth of drops the perception of business performance the growth in average lungs is what drives earnings performance and are
spk_2: road came late in the quarter next didn't momentum is building this is true across are spread businesses and are the businesses finally we continue to invest in talent to draw future growth when making talent investment there is inherent revenue expense mismatched that occurs in inception that we're willing to accept give
spk_3: when the expected returns but starting on page for we're pleased with the continue strong financial metrics even with the additional capital or operating return on average tangible common equity remains strong in the first quarter had sixteen point one percent and seventeen point two percent over the last four quarters there that is pre tax free provision operating return on average assets with one seventy one for the first quarter and has averaged one point eight o percent for the last year reflecting a growing but very efficient company on slide by malcolm as already mentioned are long road for the quarter the slow growth includes the march purchase of a forty nine me and our owner occupied mortgage portfolio won't wrote on a year over year basis in nineteen and a half percent and this is the third quarter in the last year where is exceeded twenty percent won't pay offs for a big part of the back half of twenty twenty one growth story pay off in the first quarter decline mainly from cuba
spk_2: or levels burst but are still well above the level seen in the first half of twenty twenty one the level of on funny commitments in the eighties see portfolio increase to almost two billion dollars current quarterly lung findings from the a b c portfolio are approximately five hundred million dollars every cool order you to grow the started strong much better early quarter performance than what we saw in que one average mortgage warehouse balances decrease twelve point eight percent in the first quarter were certainly plays with these results given what's going on in the mortgage space and seeing the portfolio changes for some of our competitors this portfolio now
spk_3: it's about five point eight percent of average slopes
spk_4: living on the slide six
spk_2: low production remainder of robust with good production from each of our lives a business he wanted typically weaker than or other quarters but does reflect an increase of twenty three percent a year over year basis
spk_3: no that we've not included the mortgage portfolio purchase in our production results key to on production has started stronger and is tracking ahead of you one production at the same stage of the last quarter page seven or yeah thats into the quarter at nine point six billion is varitek executed on the stated goal to build more on balance sheet liquidity cash investments now compose twenty and a half half percent of eyeing assets up from eighty percent at the end of queue for expect this trend continued throughout twenty twenty two as we work to get our to deposit ratio excluding movies were house down into the mid eighties an interesting come decrease three point seven million dollars and que four to seventy three million and que one two items accounted for three point one million dollars of this decline these were the two point one million and key for prepayment income from a debt security and one and from the cookie for collection of nonaccrual interest the other driver in decline in net interest income was day camp which represents one point six main these items were also my one the an increase in an interesting come from growth and four hundred thou
spk_2: thousand from to the savings on the sub that that was repaid laden keyboard the net interest margin decrease fifteen basis points from que four to three point two two percent the debt repayment and the collection of the nonaccrual interest counts for all but one basis point of the decline
spk_3: average liquidity was approximately three hundred and fifty five million dollars higher than are normal target level and just increased with what he is primarily a function of strong deposit growth and have the effect of debris depressing the now but well my says points as you look the model that interesting computer peerage remember the following first within the they had rate hike in march and minimal impact since the bulk of our one my lab or and sober lungs and or rate reset date of the first day of april second average loans for the first quarter were three hundred and eighty million below the inning balance on march thirty first creating a significant positive jump off
spk_2: there are protected that that to body has increased since key for and with market expectations of additional fed rate hikes and twenty twenty two of two hundred basis points this will add significantly the net interest income fine like while we did not show data on the loan floors but please know that was seventy five billups and additional fed writing
spk_3: greece's virtually all the loans will be above the floor right
spk_2: moving to slide eight north avenue capital continues to settle into vertex and become more comfortable with our culture process as except for the pipeline remains strong he won revenue could have been higher but a couple of closing slid the key to
spk_3: net income forecast that we publish when we announce the transaction remains on track and so ah it's a everything's going according to management expectations moving to drop their results of certainly been impacted by seasonality as well as the competitive pressures brought on by pricing and harm mortgage rates origination volume down eighteen point three percent and gain on sale declined slightly as well we're expecting better results from key to the their aggressively managing costs and staffing level of levels coupled with the successful hiring of a significant origination team in arizona the should add meaningfully to forecasted volumes
spk_2: on slot nine nine interesting come total fifteen point one male results for as be a swap these deposit the syndication fees were all in line with man's with expectations operating expenses on slide ten increase one point six million from queue for salaried employee benefits were the largest company the
spk_3: increase it hit count grew on almost four percent during the quarter also impacting personal expenses or fica levels four one k match on cash incentive payments and nine hundred and sixty thousand dollars in costs related to twenty nineteen performance share unit grants that bested at a hundred fifty percent of target did work top workout out tsr performance over the last three years looking forward to to marking spent his will be elevated to the cost related to the vertex bank championship a corn ferry tournament held in arlington texas during the month of april new for slide in a great quarter on the deposit front with with growth of twenty nine percent for the quarter and fourteen point three percent of the last year federal deposit cause continue the trend down and into the core as seventeen basis points not increase bank deposits now represent thirty five percent of the deposit book and time deposits are down the eighty percent of the total got to admit that i'm glad to have both of these in the current rising rate environment on slight well all capital ratios improved with the common stock offering we completed and que one tangible book value per share decline two point five percent excluding the impact of the capital raise this decline reflects the impact of rising interest rates on the a passport sport portion of the investment portfolio we did move one hundred and seventy million dollars from a fs and htm during the quarter vertex grew changed book that book value per share three percent over the last year after adding back the impact of quarterly dividend and backing out the impact of the capital race tb be growth has been and remains an important priority for our management team or capital deployment priorities given the current valuation of or not or organic growth dividends strategic growth and lastly share repurchases with that like turn call back over to mouth
spk_2: sagittarius at the years started out well for varitek with the announced acquisition of interlinked from stone castle partners the hundred fifty more for me and kappa raise and our continued organic growth we are well positioned for continued success as we think through the prospect of a partnership with with a with inner like are increasingly more excited about the numerous revenue opportunities and options on how to deploy these core deposits while the additional capital will provide supplemental fuel and the ability to help as execute our strategies we say often we have the right tame the right geography and this is the right time for vertex thank you to my team for dedicated and are dedicated staff to continue to briefs incredible results one last comment like the may we couldn't be prouder of one of our brand ambassador scotty schaeffler the two thousand and twenty two master champion and number one ranked offer in the world is humbleness and down to earth personality is so pleasing to be around and we're grateful for our partnership we have been committed to the game of golf for many years we love it feel of community and camaraderie while displaying it's principles of integrity commitment and truth which represent what we aim to be every day for our clients and our communities but brad liked now like go been for a
spk_0: a question you to press star one on your telephone and to withdraw your question chest press please stand by a company can a roster first question southland michael rose raymond james line is open
spk_5: eg morning i want thanks for at taken my questions and just for a start of the margins obviously a lot of moving pieces here terry yeah i guess how should we think about ah you know kind us a starting point like obviously there's a lot ions on the slide know what what should we be backing out there are adding back and have to rethink it you know about about a starting point x rates yeah for the margin facts
spk_3: oh thank for that the three twenty two was a good starting point
spk_4: and you know last black voters three thirty seven was just
spk_3: unusually unusually high so if you're not thinking about i think you start with three twenty two and it's whatever you assume about ah that the changing asset max or are we are you can we get the sexless liquidity down is that that that twelve polites there's a lot of the quotidian the market
spk_2: are all banks have a lot of liquidity ah certainly they're living quarters or we've been closer to our target levels but it's it's been a few ah i would start there are you know and and i think i think the biggest thing for for men interesting income broke his is just the of knowing that that you know three seventy five basis points
spk_3: moves and we're all the floors were at that festivity is up and our growth profile and another did not me i'm a transition the net interesting go and then it is all about growth for us and and getting liquidity existing liquidity deployed as well as what we know we'll be bringing on in the back after the year with the interlink opportunity that now convention
spk_5: ah very helpful and then he obviously you guys have been very active on the hiring front and i look at expenses and i kind of exclude the the fica yeah looks like you kind of flattish just how should we to think about just expenses we move forward in about thing yeah that that the people that you're adding you now i'm along with fact that control efforts sex
spk_2: yeah i mean you know we gave it's pretty broad pace beds range to start the year and at you know how i would say we're still we're still in that range and and we're not near the top of that ranch in our minds right now ah is he again as he think about it you know who won you know he do have normal first quarter bike of stuff you know that if you know benefits are beat things like that but prof we offer that nine hundred and sixty thousand dollar expense item that i mentioned related to the ps use you know that that items one one done one time i mean you know we'll we'll have
spk_3: that yeah we may be talking about a much smaller adjustment into one of twenty three but you just can't a crew that because you don't know it's it's where your tsr performance and you don't know how you're gonna perform and how are your peers are going for forever and major that one thing terry to the back the not the actual number but
spk_2: the reason we're somewhat flattish michael i think we do a really good job of move and people out as we bring people in so yes headcounts are moving out the banks growing we do have more employees but we've done a pretty good job of manning marriage in out folks will me when we need to do so that the net number growth numbers lower than you might expect in so that will keep the the sour number down just a smit yeah so a michael at the proof for the year i think we're still gonna be pretty pretty
spk_3: yeah pretty pretty right now stay close to the middle part of that range we gave me but but that that obviously depends a lot things are set the salary pressure we're all feeling and arm and we have a lotta a lotta open positions especially in the back office he always trying to get feel but but but you know a brought this was this is all about
spk_2: revenue right now the expenses are are pretty well behaved ah and and ah this is really about getting it enough for me on the revenues that it's about the eventually won it's all about the timing a growth and and and and and better and the or we've always that are fees are going to be lobby and they certainly as that's the case but but the expense is doing really much here we're going really well there and very much in line with what we thought we started the year
spk_5: i say up or maybe just just one final one for mages just on on credit he has a look at the past couple quarters that the charge up ratio has been a lot higher than i think i would have thought i know these discharge opposite been in a couple reserved for but how do we think about you know what's gonna happen yeah why those loans that have gone bad and and i just more broadly how do you think about that how the reserve here is a little over one percent good i i realize criticize and classifies or are down ah much has been really good to see but he has given you have some concerns out there on the horizon yeah has to be think about yeah credit for you guys and and maybe future or vision trance thanks
spk_6: data happen
spk_2: in a week we feel that we feel really good about where credit is a gate you gotta take take us back to when coven started and no revives run around villain their how think in the world is gonna come to an end and and we we purposefully gonna loaded up because we good and and we did and so a week feel really good about where are our i'm low last reserve is today there's been a few these acquired credits candidly that we're still working through we've got a couple a couple more that will get resolved in the back half of the year we believe and in a wheel charge things off until we know we've lost a mean they're i can give you you know there's an example or two in the last past year work in a we thought we are going to lose and we ended up collecting and so we're pretty diligent on our collection efforts but i don't see any deterioration in our portfolio haven't seen any for any transit or concerning you know it's is that is when is we fight the moody's forecast about how good things are it's it's gonna be more and more difficult to keep are reserved where we add up where we ever and so we we work at bat and you know it's it's it's odd because in other markets are saying and that everyone is saying you know research as in this recession that yet you get money for gas and shows the gdp and unemployment pretty darn stable and positive so those are things that are just challenges for us but they're all first world challenges but we have to work to keep it where it is but overall i feel really good about our credit portfolio oh and don't see many trends today now thirty to ninety days from now or die in july that that may change but
spk_3: my blog is idle i don't see it clayton's the it it you know michael out and one thing even would like the reserve it was like it with down a fair amount which is did the we took the negative bias in in the movie scenarios from twenty percent to thirty percent just did just that of and i did become a lot happen
spk_2: come when moody's release their data to the end of the quarter certainly a lot change in in in the shape of the yield curve and version exam or but you know we made the mom you know
spk_3: more conservative than it otherwise would have been and we'd probably we have been looking a little bit of a reserve release if we had not made it more conservative we just didn't think that was the thing to do and i totally agree with malcolm is you dissect and
spk_2: slice and dice are reserve keeping it in keeping it here is not going to be the we at are at their intent
spk_5: cracker said a thing i questions
spk_7: like you
spk_0: i'm fine red rabbit and from
spk_8: oh
spk_9: oh drives me up
spk_0: of taken me narvik you now again
spk_10: hey guys good morning
spk_11: a lot at a breath
spk_12: ah one of the first this talk about the income for a sock and and make sure i understand how the expectations for for thrive in north avenue and an hour obviously mortgage is a little more challenge on the here by wanamaker honest and expectations are about the that a than than you know are there you talk about the hires that you made in our our neither hires had for making and come on the income businesses on and what what are you anticipating her maybe and for as being come on initiative to share
spk_3: yeah are a little strong start with thrive on it in you know drive over twenty twenty one and for the first quarter twenty twenty two had out for me armed the and be a results
spk_2: it is consistently in this quarter i believe que one production was down twenty three percent versus keep war and they're down eighteen and a half up and in that and that was true a draft that outperformance was true and twenty twenty one for city of yet so i expect that that it that's likely to continue but last summer level ah in and i mention the hiring they've done in arizona on for a team that's pretty significant coming on there but the you internally and forecasting and along the lines of the m b a forecast ah it yet a you know i just naked i'd rather i think bill outperform it but i think that's the right way to model it and for
spk_3: cast it right now and at the gain or still margins down if team beeps or so for them a minute that not huge and it seems to be but it's competitive that you know rented it it really really is up there and in his on my comments and the they are being like all the mortgage companies very on aggressive oh man
spk_2: energy cost as you would expect when you're in that business
spk_3: he know looking good avenue that their pipelines are great
spk_2: i'm excited about you to our expectations for the pool year have not changed but the revenue that we've that we thought we can do about we started the core or even midway and quarter got but but but they just slid over the gods we've always said this is a lumpy business
spk_3: and ah but but ah and we have hired in in in north avenue capital to people are think on the production side worship the hell yeah so ah yeah so what we are trying to actively grow that business ah their do get at me that get to a lot of change with being a private company to a part of a ten day now
spk_2: or back ah but it's a it's a good team hearing engaged i'm encouraged by the pipeline progress of the week the week and i'm still bullish on on the year although which he wanted middle of banner in one other v higher just we've hired a guy that focusing strictly on the smart business now now the slot business markets a mask is nobody wants to take on the other side of the trade but it that a that of settle down at some point to that's another is one of our efforts from the hiring side to focus on the fisa
spk_3: okay on trade you get far as great car on five fourteen by the way for showed that ah given given the collar their arm and then one to follow up on the margin arm
spk_12: you know what to make sure i understood with on the depending deal you know it just is is that they can see the static shock impact on and iron and would that be different
spk_5: what's that transactions five
spk_3: it it a it's not build the end because we go out on our core ah and and eight the deal have closed ah do i think it will make a fool but that sensitive i do but that and that actually know i'm okay with that because i'm i'm turning the that flag with the that the interest
spk_2: right
spk_3: glad that i mean i love the upside asset sensitivity from a one hundred two hundred three hundred shock but i'm also looking at the down one hundred shop and you know when you look at the forward rape her rates peak in mid twenty three and start now and and so you know i'm i'm
spk_2: i'm trying to figure out ways to take down side right wrist off the table should that occur and that's certainly one of the things that will help along with what we're doing in the investment portfolio and as with that year the mortgage sata the business that that we're building the portfolio there as well so ah but know the answer your question it's not
spk_3: build an it will take some sensitivity up sensitivity off the table but will also take some downsides to the of the day
spk_5: it will reprise down quickly of her
spk_12: ah i'm and then maybe as flatlands or later that is than five secs you've got factory chart that shows for thirteen months
spk_13: yield train for for long production and these in i was just curious if you're starting to see stuff on with valid for handles on these days or what to compare the landscape as may be done to her
spk_2: spreads as as rights movement higher ah
spk_14: we they're not there been talk about it we have it i mean with we push it certainly but pride in a way the last thing to move
spk_15: there's still some competitiveness in the marketplace mainly in the lower end and a very low rated on the very i and that they to be irrational and is terry always says you get what you miss price and so they're some of that going on in the market but listen or our pipelines of or is full of they've ever been our second
spk_2: quarter
spk_15: if you liked our first the around love our second
spk_2: so we're get what we want and it's a little bit lower than we'd like but
spk_3: we're okay with that we like the volume yeah spread like i think you know if you would look them were typically and always think of spreads not rights fixture variable it's all about spread and do it do i think that that spreads are going to compress a little bit on the origination with yes do too much liquidity into much capital and would definitely seen that space
spk_2: i seen the term crease base and agree with malcolm on the high and that that there's there's some it is some
spk_3: way too skinny pricing look our industry is moving into phase where it's going to miss price risk for a while i'll it but that that's what's gonna happen
spk_16: and and we're not we're not we're price tag or not a price maker and so we're not have to deal with that the thing we can't do is is is miss price or not miss price risk but miss miss analyzed risk we cannot take risk on the credit side mispricing alone you can see it economy
spk_11: like you hit your farm with a hammer but if you're at it side eat enough the the consequences are much more painful so that's where we are we're going to compete on price we're not gonna come pre don't credit terms
spk_0: okay great for the color
spk_17: they appear breath
spk_5: our next question come from line of gary tenure from d a davidson your line isn't
spk_18: next morning
spk_5: yeah i think your age i think he probably dressed as a couple ways or even during your prepared remarks but you know as you think about just that cat a broader national economic uncertainty
spk_2: in are you seeing any impression are all that customers are are kind of thinking differently about investing in their business at all ah yes you'll get to the pipeline the back half of your title of the activities are there obviously the texas argued such outperform the national economy but just he answers for any any and such sir in other air canada and no yolo like the answer but know where we're not we're not say anything here no the immigration of people continues and it's just it's a super strong economy i thought that the housing market would start slowing down a little bit you know it but i can from personal experience of people were are in their they're coming from out of down they can't find places to live and these are like to thirty minutes from headquarters so yeah read an article on i get reserve monday of this week about our housing inventory in taxes and it's it's incredibly low and so anyway
spk_19: i wanted day there's some slowdown a one day there but it is are just not the end up the man
spk_2: and then the travel piece of it the me are are more our motel portfolio is held up exceptionally strong away that the we're i mean these people are doing really well so
spk_5: well i'm not saying i'm not seen any of it right now maybe different ninety days but at the day
spk_2: mock certainly no reason to apologize for yeah i feel honored be like i apologize because with going around in the country but but taxes you know our problem seems to be south on the border that everyone talks about years about
spk_3: in terms of the increase in breach has to divisions year and is it primarily the this can cash position and and growth and eighty she bounces better driver net cannot quarter of a quarter delta or something else not nah i would agree with that i mean like our our our mix of production between floating in fixed has not changed is it there many times over the past three and a half years i've tried to change it i had been very successful ah so it just kind of it it is what it is than and is just floating rate lenders ah i'm a
spk_18: and so it's it's primarily primarily liquidity ah
spk_2: because the make up of the balance sheet the floating fixed rate make up of all the items on the balance sheet really unchanged materially in terms of their relative contribution if you up great and then that now my town as
spk_20: i would say that the i think another big driver of that is his assets has to be what's going on in the dd a book malcolm talked about the growth he concedes thirty five thirty six percent and that that drops assets and devotee given that up i'm a lawyer nah maturity the part of the sanctions are the single most important it ah input
spk_0: or judgment a in the whole model of interest rate risk for any back and and are the growth there is it would be having an impact
spk_21: i like it
spk_22: and you
spk_3: our next question confirm brady daily from kb debbie they begin
spk_5: okay thanks you want to guess
spk_3: i read and write the was just curious the purchases of the mortgage schools but what were those purchase from the rivalries that purchase from some other source thought they were purchased from another source week would with we have a desire port for a high quality jumbo mortgages both arm and fixed rate and at thrives just not ah i'm not a now they're real how the cannot think that not yeah i'd like hope they
spk_23: get there i'm a were buying from see or a lunch from know and we've tried to buy jumbo arms but but but the wonders not a lot of hadn't been a lot of demand for that and market have we that can change but just not a jumbo lender and so are they was not from thrive
spk_3: okay then a pic i read leave your expect to continue to purchase some of these mortgage caught up our active do you think you'll be a purchase same that one type well you know what is one of the things and that the of it is i talk about earlier with the downside risk to rates down and we're it you know for two hundred basis points and rates down we are a negative seven point eight percent
spk_5: lol you know unlikely get that inside a five and inside of poor and it takes about three hundred million in mortgages to move at one percent so yeah when you will see us be a
spk_24: you're doing similar things to what we did and que one through each quarter of this year
spk_2: why will deploy liquidity to his got very efficient capital allocations and implications and three i want to reduce down raid exposure for back happened twenty three and beyond
spk_25: shop or car and then at how does that play and to your one growth died at like owe last quarter we talked about of effect fourteen sixteen percent level of longer i know that changes because now you have he of a new in early and
spk_2: or like deposit verify that ideal any closer but it's it's coming up so it with that new flexibility on the on the inside your how how should we think about one got obviously yielded a of over twenty percent to shoot this quarter that's pretty strong as we think about what grow from there you know them it's low growth is really strong and i could go back to my god i'm a statement as the second ago there's real commerce been done here i think my remarks that that that that look for us to duplicate what we did in the first quarter made in a little better there's some real opportunities here and this goes back to a year and a half to two years worth of
spk_3: the hiring focus and these are just the benefit of hired to really good people and i just thought we hired for new people in the last thirty days that are gonna be game but the producers and so in a we want to keep that that going to help you know we've also got a background that we gotta make sure they can produce that we got a in own make sure we have the right credit people that their at are analyze it and so it's a it's a team effort
spk_2: the top to bottom but and i think you can expect our long road the look a lot like a been the first quarter for the next for robbing the rest of the year in a writing we've we've grown up billion one hundred and sixty two million in the last four quarters we've only bought one mortgage pool and forty nine million marks and that right ah we're gonna keep buying mortgage pools
spk_21: our pipelines are stronger a my comments or said our production an hour growth is running will ahead of where we were in he won shop and now with night at that one been one was nineteen and a half so and there's so many levels brady and many other lever is and we haven't talked about it but this you know of would
spk_2: north avenue capital get into the leap side which is a renewed energy program i mean those are blown you put on your books you don't sell those ah
spk_5: and so that the another lever a may we just have a whole bunch of levers to keep long growth at a certain level and with that that that's who i am i'm a growth guy and there there's not a lot the by out there are limits to say that they're not a lot for sale that would make sense for us
spk_2: the organic growth which is the best growth is where we focused and and this didn't happen this been happen overnight up intel on the market for a year and a half what we've been trying to do and so this is just the know some of the the efforts that we put forth that are starting to pay off the current economic or maybe on that point you have historically you guys the company your back him in a you don't need that anymore just given the growth profile but more recently you rise dad be charm you that north avenue to add the and palm he did are to help on the funding inside so you you've done a decent amount of can a non back acquisitions i do see any other you know sorts of companies were verticals that would be attractive weather on the be and calmer funding or any other side of bag that give you would like to see via an acquisition or are you kind of sat with with what you have at this point ah so so i am really happy with where we are as i think it's an execution story you know unfortunately or fortunately how are you on a look at it you know we've always been approved appstore absent into a public and fourteen and and so far been able to prove it out every time i think that's where we find ourselves again which is fine
spk_5: but i don't have the i'll have the strong need and desire to go fill a bucket that i don't think we have a are we going to be opportunistic if something shows up and makes sense sure we'll take a look at something but we can be in a week been disciplined over the life of our company we can even be more discipline
spk_26: and so we think we are some special and now we get have to execute improve it out so i don't i don't really have that strong desire to do to go out and find something other than the one thing that would like to do and that the put the third leg of the school in texas and app
spk_27: a presence in central texas
spk_0: and so how does that fit in and out of that look i'm not sure but that isn't at that is a geography that think it's important to have if we're going to be the texas bank which i think that's what we want to be
spk_28: got a okay thanks for the dog as
spk_29: nice britain
spk_2: once again at all questions of lanham matt olney from stevens zoom and hey thanks guys i'll take that them which were half question we were down with it is caught up in are out of basis much better than your peers out their what can you point to and a corner and weapon within the hour thank you ah a mat ah you know i go back to it's probably a little bit of a broken record we have a really really solid leader in that vertical for us she is a seasoned veteran i think we've answered a couple times that even though we'll all booth
spk_28: always don't ever say always or never but i think was pretty much always outperform the market because she's that good
spk_30: she's added your team
spk_31: she's changed our the clientele that we had an upgraded our clientele we're looking at you know top notch national mortgage companies that she had relations with so i would really i would point to our leadership in that area probably more than anything
spk_2: our be like will outperform the markets them even though we're down a little bit of were pretty good as it relates to the the rest the industry and operationally we are really strong of a really strong team the at that delivers day in day out that roads where our mortgage warehouse houseplants it's highly relational you think it just transactional that it's really not there's a relationship factor and jerry's right the folks in the back rumored exceptional thanks for that and and i guess switching gears i'm off a curious about the deposit pricing strategy for the year you made any tweak through changes yet to depart uprising are you the to movement from competitors and i think which we what's unique about varitek the here is going to beat and interlink deal and a time you know that and and and with that do you think you can lag more on deposit past is tilt i do closed of an ex human
spk_32: thanks
spk_2: and that's that's that's a good question is when i would get to have a crystal ball that are on that when i could actually believe there's so many factors at play here both rates and one of the fed do with the size of their balance sheet in terms of quantitative timing and and so and and i'm i'm in the
spk_3: camp that that they're going to tighten pretty hard ah there to suck liquidity ah the system but it certainly hasn't shown up yet and let's see what they do with their may meeting body it out that the elderly got a to me the interlinked deposits give us optionality ah i'm and week get you know we've we've been it there's a lot of liquidity still in the market and and i turned down a lot of money earlier this week late last week
spk_2: just dump your pricing just we don't have in the past varitek up virtually always had to say yes
spk_28: to the pricing i just turned down
spk_2: because they didn't have his optionality related to things like in a link and and i think our banking teams are better a gathering deposit today than they have been to include you know or see and i james and enter community banking so you know a it so far without being really any meaningful movement for many body i don't think you know you've always heard me say that i think the up the idea is the most irrational deposit pricing market i've ever worked in in forty years but it's not it's spree read it and as true today couple anxiety would agree but it's not true today on the deposit side so far that's been pretty rational i expected to continue bro
spk_3: while but i do think you know you get a couple of pity point then moves and the customers awareness of what's going on with rates is kind of the spike and in in in in we're thing to see i think it's gonna be a function the liquidity that the fed late in the markets it's going to drop banks did did that the to move right
spk_2: more awareness is gonna be up but if they've got the effect of with what of the there's that not i don't they banks are gonna buy so much so i think my belief and my hopes and here today is very taxes gonna meaningfully outperform how it is done comparing this operates michael to prior once in time will tell
spk_3: yup
spk_28: thanks for that and at flatly any update on and to make itself and for the last spoke and the timing of the closing of that transaction
spk_0: the just gone through the regulatory process without a couple of conversations with that steak n f the i'd say is just had a down into the process we're still we're still and that we can close it beginning of third quarter
spk_33: but really have not had much to sightedness on the record toy side yet
spk_34: i think the most exciting development there is the proposed merger of our total blank solutions and bryson tank open and that right
spk_2: which work is really only for competitors in the space nationally in those are two all along with us and one other and so those to combine and to now there's three and the other to are significantly better than we are bigger than we are but with much much much bigger bobby gentle yeah he did not more money yeah and so
spk_5: i think our value proposition for that space is only going to be strengthened by what's going on around us we benefited tremendously from merger disruption in the in the taxes markets and here's murder disruption showing up again and week we think it has it it bodes well for us in terms of our entry into that space
spk_35: okay great thanks to my questions
spk_3: guys man next question from from line and planned it from piper send you may begin
spk_36: a more mortgage
spk_3: for a grin
spk_2: just wait just don't have much reorganized my just wanted to hear little bit about ah your own plans with bond or for the rest the air looks like it was about two hundred million just is wearing what kind of pace your think you'll you'll take it from here and and also how much of that portfolio exploding or or with reprice with redux
spk_37: yeah and i mean at the you can expect to see our bond portfolio continued to to grow along seem similar pants on it you know he grew about seventeen percent or so i think in the quarter couple hundred million dollars look this is all part of our strategy within are linked to go
spk_3: create a on fortress balance sheet cause one of the knocks on bear taxes always been we ran with such tight liquidity and so we're we're trying to intentionally change that by not bringing on more more more securities into into the into the portfolio and driving down that london deposit ratio ah
spk_38: i'm i'm glad we
spk_3: started our on expansion the portfolio and twenty two vs earlier are although at still painful for everybody given the volatility rights we've seen but but would look we're not trying to go all in and one quarter we're moving slowly and ah and use the as we put some and h t m we may put more next to him as we bought ah but but it's just a part of the strategy again get it to strengthen the balance sheet and help give us protection for rates down for the back half and twenty three twenty four so that
spk_5: the portfolios performed well we we expect to keep the duration the price volek salary accent or up in line with what you've seen as do in the past next we'll probably relatively the same but it's just a better part of building this balance sheet to get it where we want to be
spk_39: i great that's helpful and and i guess just on the on the as a cia and toxic seeing on your don't i guess back and year olds capital planning process to you given a done intact regulatory capture as years were that's correct
spk_0: ah that you know it
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