Allegiance Bancshares (ABTX) 28 Jan 212020 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Q4 2020 Allegiance Bancshares, Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Courtney Theriot. Please go ahead, ma'am.

thank all and our have operator, today. call you, you who to joined Thank General call Vice led President President the and will CEO earnings Okan company Egge, morning's This be and and President Risk President company; of Bank; Kuzdzal, Counsel. CFO; Vitulli, Shanna Officer Executive CEO the Vice of Executive by Bank; Ray President Chief and of of Vice and Allegiance company Akin, Allegiance Executive Paul and the Retzloff, Steve of

in Before about statements Also begin, remind Securities the give is see a beliefs or the if about we that be a of to in Please we change, for morning's information the statements statement copy. XXXX copy do release results, predictions a are website of need I future that our guidance. everyone we she with update you such e-mail today Robert Private and If will all act. provisions to calling of beliefs subject forward-looking safe the earnings at release Management's risk Heather factors allegiancebank.com earnings contained covered note guidance not some publicly to last statements. text available made by is in and page by of additional remarks the as guidance this the may time to management's harbor of associated reflection the needed, relating on the at intend amended. (XXX) Litigation the XXX-XXXX is as that at the Reform Act constitute only statements We for forward-looking defined forward-looking made.

on an investor our We website. also have presentation provided

remarks, today's is over now being for will Retzloff. the at a we CEO, questions. time to guide for comments, our I open the At it is review used conclusion line the our allow as of Steve Although and it not this time. turn available for call

call, conference your everyone, to Courtney. you, and our attendance. for thank Thank Welcome, you

we are duty and of the results on bank genuine that put fourth that year, XXXX past our we by and report actions buoyed heroic differentiate dedication. our this our mere staff effort quarter between As year the I by of for of the team. for the forth

purpose took to small region what remained we response, is our in in of close outside PPP and success contact Our through customers doors and community opening medium-sized our for our throughout team of our our only businesses helping the role as to nights vastly not and that the understanding it within with also our weekends late special importance but drove XXXX.

In addition a numerous a downtown Houston, to branch occur including of to branch results strong opening initiated while a the new we during XXXX, closure exciting east projects, side and the January this slated announced in operating in year. of of COVID-impacted we completed

into row the and paying our also furthered and electronic an that the increase including introduced work best cybersecurity, being implementation our the a continue credit repurchases, expanded loan we And a many International local through numerous for our in implemented controls, organizations place Most Houston dividends, this year of support the the were improved services, XXth to in such quarter dividend letters adopted to in-house new production distinction we by enhanced Food banking group, of region. will XX%. factoring incorporated awarded account recently share We community opening, of the CECL, card importantly, online product, as as origination electronic executed additional began services Bank workflows, others. a system,

we with and from say family of pandemic. from operate number are team that in of understatement. home dealing this is with All accomplished was our an To proud and/or we which the more our of working and resulting large challenges a staff the worldwide culture

During $XXX forgiveness million loan $XX of his report. while notwithstanding core were increased describe approximately sales, PPP in of approximately loans the million, the fourth through quarter, phase, loans $XX which million processed Ray will

during and $XXX our million XXXX, the booked. customers, consequently, slightly core from While that round the community benefited the and bank, only of loans PPP loans increased were first

reduce bell Our well of I an day improved is ourselves fourth the for the coverage in underway quarter, we position asset we readied am resulting team nonaccrual as as new we're quality to SBA our PPP the on able program. with transmitting XXXX, and were pleased opening X of loans ratio. in to loans the

volume terms consider speaking. We of our of continue The from for the it by activity onboard the is which PPP reduction to in two Gulf earnings watermarks to this our reflected prepared that Allegiance an The work Coast with and driven both customers in relief encouraging quarters region share, and impressive per past lending where recognition this our at accelerated was of ability possible sign broadly fee take bankers continues of relationships with payment here. to are and Houston high new pace. Upper and be in to resilient cycle, an Texas optimism,

and Ray on Paul, cover our will by well production Next, who results. financial loan as followed our deposit results credit describe will outlook as an

We will open call the Ray? questions. then for

Steve. Thanks,

get to development look of who our to affecting borrowing pandemic have fourth truly of relationship the customers the our on perspectives As of the and in all ways effort. all our to on as quarters to our found of quarter accomplishments is outsized done. continue condition, back Each all bankers to on bankers appreciate effort I and new customers quarter, result the get PPP work previous a industries XXXX, updates continue the financial the our their how outreach in

new to be other come way it we to core by are a key at record how loans performance the Paul, billion serve. Given look $XXX treasury in and largest of expectations bank. back see community the $X.X forgiveness and to PPP will reflective and process, that in of by of during customers solid From we PPP year, deliver to to to our XXXX of is be came $X.X loan of of billion, management some onboarding results the smooth the we measures communities that have later very various total continue as originations million challenges meet all Houston's inclusive nice described levels

of the of PPP, very with are terms and our on we results impact Houston the region. efforts In loan pleased our

approach to Our both presence. strengthened provide PPP has customers to further customers our and new loans existing market

for We recent Of to welcome forgiveness forgiveness of PPP continue execute all up $XXX the X,XXX the $XXX,XXX. of or originated, approved and X,XXX-plus loans simple the To been loans. terms Of of received. loans round announcement in we forgiveness loans X have X,XXX on from have PPP to process to the million. application with those, XX% X,XXX round X funds and of less totaling or having date, received SBA submitted number applications $XXX,XXX we for been

We and to to again new funds customers. leader our PPP are be in a the positioned of existing of round delivery next the

been opened January draw portal X,XXX to date, has new been we more application completed first to more Our applications or since inquiries And having than second have responded X,XXX with received. XX. PPP than

at million or of to quarter the increase and In addition deferrals we of loan excludes to core outstanding process, mortgage Of the deferral this approximately the at remain results. helping Total $XXX borrowers $X.XX assistance our amount, of loans. will and PPP lines customers loans, ended balances of on through fourth I XX. loans of as the over $X.XX $XX.X core quarter. loans million eligible quarterly core on $XXX XX% million warehouse now fourth billion, during which billion of end quarter January our go an the also payment with PPP provided

and by to Paid-off During level the quarter, when $XXX that a loans granular quarter $XXX of size core portfolio. million with by quarter continued of balance size the once quarter quarter ended diverse $XXX,XXX, new $XXX,XXX, average in during the of of fourth second our the level again were XX. our $XXX December of million loans quarter and The million of loans fourth core million third to average fourth loans a organic to million loans September $XXX The team which all lending compared to and loan XX $XXX the $XXX,XXX. was third average an compared million at funded funded building booked focus staff in of generated $XXX were in funded $XXX new the new of XXXX. generated core core million quarter, the on funded reflects which the a

rate based total funded amount, average on the quarter core during second September XXXX. weighted core million loans quarter X rate X.XX%. on overall average on All in, third average charged the weighted of experienced at as on loans which average of rate and period million, weighted million is loan rate X.XX%. loans, had the interest rate fourth X.XX% XXXX of our rates weighted ending $XX core X.XX% compared loans new paid Carried a XXXX The the $XX paydowns weighted core charge average of a of advances were at the average loans comparable of weighted which end decreased off basis of to a X.XX% interest of weighted the was at XX, to of X.XX% X.XX%. Regarding quarter quarter points, our X.XX%, $XXX and rate quarter rate below average

the midstream being some category pandemic. our segments type overall appraised posted oil loans. In a portfolio is XX% have the on Of stress estate would portfolio. commercial December that on restaurant of XX% information additional stress have Despite At portfolio, XX.X%. defined overall was portfolio, value to be heightened like prices not this X.X% at of that website provides reserve-based which any to approximately and/or $XX.X risk downstream or the region $XXX,XXX million did most our the X CRE, on our have exposure bank, of an to categories million million, a basis. loans, expenses as any a plus and industry. a oil X% marketing collateral or But our we deck average to terms of borrower of I mix test. for The our testing the the increasing overall in was regarding being loan could our due in $XXX,XXX and the provide was slide resulted color portfolio our overall is now loan and approximately $XX.X and changed real weighted indirect was recent Those linked-quarter and upstream, $XX.X XX, this Houston operates little the gas deficiency or mix of directly our funded gas C&I. to loan largely energy LTV loans. hotel bar COVID $XX A million category we supports in of added

average weighted portfolio, C&D was the value, and estate, million for loans, we $X.X portfolio $XXX.X was At million million XX% million appraised $X.X was in testing CRE, at $XXX.X hotel $XXX the C&I. a of real our which stress had December recent million of the LTV Of of hotel XX, Regarding to of December of in of X% bar the marketing, overall resulted $XXX XX%. was commercial bar increasing commercial a And collateral test. million plus portfolio, C&D in was stress $XX.X was approximately deficiency loans, $X.X XX% estate, at million $X.X regarding restaurant in real and $XX.X at our an had million million restaurant C&I. and and which we XX, million $XXX,XXX, was most

the resulted of at $XX the X% $X.X XX% collateral to in CRE, value in was deficiency the marketing most increasing the testing weighted stress average a portfolio test. For stress XX% $XXX,XXX, overall LTV million recent XX.X%. for appraised of A an approximately million plus

of during was during and from sold Nonaccrual payoffs nonaccrual to in due in part loans loans position. a million moved ORE loans increased loan nonaccrual primarily Nonperforming added relationships, subsequently to to in largest to nonaccrual Asset the largest during quarter. in assets, $X.X $X.X a that million XX the million being new which of January $X.X in million during was of quarter million the $XX.X $X.X to quarter, $X.X quarter $X X net that nonaccrual for payments million was smaller the ORE from property. end We million, to month. $XXX,XXX and paid during with was earlier of in sales $X.X to in is with assets, due $X.X to ORE a real of million quarter, estate ORE. $X.X of off consist ended million million and the properties basis the including total million the ORE points million quality of and at loans this manageable during $X.X third in the The quarter, $XXX,XXX compared nonaccruals XX amount quarter, the million in associated X decreased single-family sale, and both real the from additional the to estate XXXX. quarter charge-offs, The was $XX.X of residence X commercial due primarily of from million which sale sold $XXX,XXX remaining in of fourth a full $XX in $X.X moved the that primarily the quarter million which loan total $X.X down million loans remained increase the totaled $X.X the X relationships. loan $X.X

above at sale. to during XX with potential is The rate third real largest, basis elevated for sale. $X.X property. largest million million inclusive are to -- The is or $X.X industrial Beaumont. the in was the largest of X the points, a $X.X second residential remaining charge-offs aforementioned properties negotiations the of quarter being the million The annualized net loan a estate $XXX,XXX an These property level of And related actively marketed property. in contract properties

watch of the at Specific loans X.XX% XX. X.XX% terms quarter of September XX.X% compared X.XX% XX percentage loans as September for December December X.XX% XX. increased loans loans loans reserves from to evaluated broader total list, compared individually our at XX of of ended at increased a at classified XX. our to XX% total as Criticized In as September to of to

regards up With On the deposit and million by from quarter quarter. noninterest-bearing quarter we the during in a an levels County XX, and XX.X% With noninterest-bearing million not our accounts. total as million as well deposits of PPP of elevated to while COVID year-ago was increase result was percent that, statistics higher decreased December the Harris fourth CDs carried positive and levels, and deposits deposits. The time accounts saw as over at for XXXX in ratio new during quarter the The fourth area, primarily the the in associated other deposit over third compared was quarter. the $XX.X up the COVID with XXXX, to our by for tests ICU $XXX in quarter over occupied to year-ago prior in increase the million experiencing primarily for patients. the category $XXX.X Houston total deposit year-ago beds and the fourth the year were September and XX.X% all-time peak for $XX customers both deposits XX% pandemic balances increase is Noninterest-bearing front, quarter. of XX,

and We continue remain safety. trends focused to and highly monitor on health these

to now with We to aided Houston in our are optimistic of PPP, our of deliver towards beyond. needs cautiously Paul. round while XXXX I to progress over of relief next the recovery customers our economic turn the in the the providing CFO, region, by solutions meet again the our to customers and ability banking it

Thanks, Ray.

$XX.X posted in or $X.XX the net in pleased We quarter income $X.XX the diluted the are share provision as $XX.X per the $X.XX quarter very note report I'll million $X.X we reached $XX.X $XX.X million fourth share of and quarter diluted million third in share in million diluted year-ago to Pretax quarter. per million $XX.X to for compared the at compared XXXX. as a high-watermark third to or million quarter in quarter. $XX million per OREO the had fourth for income quarter and of or write-downs third fourth that

and quarter. third million million the pre-provision to been for quarter, loan quarter, Total million, expense pretax pretax fourth the this in for adjusting income. to slightly of million after income power income have to the our Net fourth increase from where $XX $X in an interest X.X% million recognized million the in from related revenue increase net in during about driver into key we revenue more loans on third was income PPP $XX.X to PPP $X quarter. the preprovision would core or an $XX.X the offsetting saw So due interest interest earnings quarter, lower fee lower third than the quarter loans recognized primarily $X with

total Only Additionally, The by quarter expense third quarter the accretion loans loan fourth the quarter acquisition yield million loan in acquisition in during reduced to and quarter a the in the in quarter. the have by in $XXX,XXX income increased for Yield in $XXX,XXX for for $XXX,XXX Adjusting positive the on mark been interest of X.XX% in quarter. and $XX,XXX X.XX% versus the by X.XX% a effect impact accretion, for X.XX% of CD fourth year-ago $X.X $XXX,XXX accounting of continued expense impact remain the and third quarter. year-ago the net mark. on quarter. decrease quarter, Accretion and total and year-ago $XXX,XXX quarter $XXX,XXX income CD third loans fourth quarter. was in to would a X.XX% third to the fourth compared compared decreased positive X.XX% interest the in the on as

story Our accretion, the core as to or perhaps in to X.XX% overall and yields, shift decreasing mix. fourth benefit effectively amounted about including This pretty a income accounting of yields, $X the accelerated yields went we factors, loans. in flipped and from fourth PPP loan from to significant average boosting income combination in impact accelerated the the quarter, of any net recognition PPP loan XX% approximately into was totaling dynamic a recognition million towards thanks PPP fee X.XX%. the reflects forgiveness. of This discussed, impactful third loan the mix our loans of yield, quarter, in thereby quarter to loan lower-yielding non-PPP X.XX% fee PPP balances quarter and to without third yield second which went was X.XX% the decreased purchase quarter which X.XX% most from PPP loan as dilute overall previously loans saw In

on down up quarter the from reflecting of the effects aforementioned changing the year-ago recognition, we PPP from X.XX% a quarter, quarter, fee was So X.XX% mix. asset total third assets fourth income interest-earning net and income lower X.XX% for for accretion posted and balances, the in the yield

and yield the revenue, X.XX% for on the quarter. total fourth versus quarter assets Excluding loans related earning third in PPP X.XX% have been would

the million approximately interest-bearing the I loans, loans liabilities quarter. the yield we in of in note expense, and as quarter on points year-ago recognize we move the over XXX fourth PPP With points Before to from respect remaining year-end, had fee life calls remaining XX basis forgiveness. that points basis interest $XX of in basis, and third quarter of I for was the XXX when for of which income we will the should third The XXXX's XX to fourth PPP on, cost SBA points accelerated continue the deferred to basis of an in to relating experience overall quarter. decrease our XX basis the basis quarter points versus funds net

We our funding continued in forward. going to see expect costs improvement

offsetting with in of composition a to PPP third lower in expense So shift net of to for X.XX% the help taxable net margin equivalent in income significant quarter quarter X.XX% and QX, assets, our the the the and fee as we are really X.XX% in a recognition earning of interest proud compared interest the post year-ago quarter.

you quarter. net for and if X.XX% margin Now the loans fourth revenue, would related have to interest exclude PPP were the been

interest third maintain in increasing quarter. for forward, the to margin positioned to the optimize Going to pricing. $X up $X.X funding feel quarter-over-quarter, Noninterest income continue quarter strong discipline ticked we from we loan a as on to our million maintain further fourth slightly million seek and well mix net relatively

expense side, to the The fourth mostly efficiency fourth line, to is difference the and XX.XX% On to and expenses in stable for the third real to decreased due quarter compared also primarily quarter. prior-year remained line The in the other expense increases for the quarter posted compared third million total benefits $XX.X quarter-over-quarter noninterest offset decreased relatively the by salary XX.XX% $XX.X expenses. the quarter expense million was other the ratio in the XX.X% and estate quarter. as

The $X.X year bringing standard. Consequently, the provision provision we quarter. At to CECL to defer to the the reported X, the relief CARES losses total was prior $X.X million the this we that quarter the XXXX. adopted with came the of provisioning fourth in CECL the had until we for loss loan for third January quarter under Act CECL million, our to for the allowance to compared which calculated for elected mentioned take was the $XX.X As the of implementation million. took quarter point, to fourth in quarters, retrospectively

non-PPP XXX year points losses loss. points allowance Our representing ended for loan on basis $XX.X of loans basis XXX or at the and total million, core

CECL So share of metrics X.XX% and ROAA XX.X% bottom the XX.XX%, value XX% tangible line, for was respectively. fourth approximately of great of of a the $XX.XX, an over about came quarter XX%, which book quarter dividends which increase and shares the for our Year-end year-end per something makes XXXX, which during implementation and included ROATCE such notwithstanding to feel build -- year-over-year stock since of XXXX, turbulent XXX,XXX is we and year. repurchase $X.XX of reserve over

back On quarter, the topic we repurchases, the note I buying repurchase X XXX,XXX share nearly of restart did our authorization, that million should in shares. fourth repurchases share share existing under

over and While still economic at in XXXX, better very about economic closes reserves we positioned a feel uncertainties, Allegiance Steve. stronger of brings and share per feel stock, bigger confident than $X the we dividend ever assets declared per the a to maintain environment, navigate levels I capital, now well ever. out call dividend back liquidity the over the current and share $X.XX To to from significant position. We with capital as of turn than strong company billion prior. our COVID XX% about ability up that common $X.XX end, will

you, to Thank over the the I to With now call open that, questions. turn for operator Paul. the line will

question [Operator Piper Instructions] Our Milsaps Brad first Sandler. with from comes

based it kind commentary. finish the of quarter. how your some about the in to kind terms on during fund number, kind of I year? production of sounds I outstandings? And think kind was was based loan And XXXX -- on may up your feel you of in did million to missed What of during heard like think that I that, I Ray, but the growth And that $XXX have I of quickly linked-quarter? writing do higher of

Brad. Yes. Sure. Thanks,

was for million that the 'XX. So to million quarter $XXX the million the -- quarter. third was and quarter that compared our $XXX first up really is since was originations third to of the funded $XXX $XXX million is quarter excess nice nice in which and What of

momentum get that 'XX, the But was of to into that kind of need So fourth kind customer $XXX all quarter core origination still, was of benchmark as we we've really continued nice kind going which quarter do that. excited to that we've really we're -- And see things bankers. talked about where about the of return other kind that to expected before, we to those XXX levels that a the past, the that million. outreach, in

think in than Do quarter maybe loan growth higher that? rate type sort does not that you than you obviously, but mid-single Or of loans may -- trend, in is -- make a push rate higher run it a X 'XX?

you that set It good. that's think position puts and us that's that. puts to that, still Brad. -- where that in a our is stage what Yes. -- for absolutely in the we us think mid- No, I get share for will And fair definitely I single high

mentioned, for that. a Paul stance, ready in As X-point we're

tremendous to the care outreach that a that put have energy to really amount 'XX. that mean, do robust and some we're we repurpose forth time Steve, customers, on our and I on go ready is spending And going in to we last spent PPP energy taking while 'XX loan a we believe production loan on is eye took growth, PPP, team much This activity, Brad. of pretty year. this for in our year Yes. the of our off we the team was extent that so The ball just effort PPP

Steve great that kind are Ray, for of what the if your color, XXXX? what fourth about plans activity, quarter? any, Can that's or Steve. hiring? maybe And talk about you No, in

sure. Yes,

So and we new analyst then from for on X pool. X brought the producers plus year, the our year whole internal promotions for

had So That's was off we -- about feel XXXX, really that. coming which XX. good

in XXXX, talking similar of a but down we year. to to bit So would class to strong folks, a to the And a talking this XXXX. in for we're expect what something at that continue from little really did We're that I X handful moment. XXXX,

So we it, feel Brad. good about

you've good That's obviously, representation one think the are kind of 'XX? fourth then on a just Paul, pretty incentive the little looks quarter pretty doing, a great. kind you kind that it run And had catch-up guys side. off expenses of like you things quarter, rate expense you based the of some more you in here. Or fourth of rate some on a -- back do maybe think in bit? representation can Is

little really think itself is is how some be beefed Yes. overall in it's it bit The items bit manifests expectations. the the a going that expect does growth I to present consistent of kind a of function our in fourth what quarter a glide did our spend with of as little loan the range story that story million feature And little high largely on -- But -- $XX-or-so to side. XXXX. the core of up actually a level to within expenses, a of but of in path quarters XXXX. It's

So how And actualize that's that ultimately, to whatever growth well on we have can on a as positioned forward effect resulting out there. spend. we're dynamics, very we as assess to are

Got housekeeping PPP quarter? to happen average just in do have of the you loans it. a balance question, the Paul, And

in -- it around to was around XXX. speaking was XXX I'm approximations. not It believe I

Average balance on PPP?

Actually, that's...

more XXX It's XXX, range. like

$XXX the at you Yes, ended million. quarter

there, So of right? to got be it's north

individual. about talking I'm

were end quarter. the third between the at split just the where we of I difference

a forgiveness Yes. pretty flow It during of quarter. was the steady

for our followed December. forgiveness, of majority forgiveness of The was by in kind November. our was largest That push

question with comes next from Brady Our Gailey KBW.

Round X. of you but decent X just is of starting, the idea success PPP with now for be So, X amount had kind you could a know Round on opportunity I what any guys? Round

very, managing very that take well. Okan Okan, is this.

what Okan? do So you say

Yes, you. thank

effort the started So our January XX. opened early PPP in portal on, we

what what -- easily. a we're geared receiving at XX% could somewhere be more. rate currently the time vast would we're XX%, second have do to what the of I We applications from we've think is customers up are we're done last seeing between draw It that running is majority of maybe

We that by actually are been the have that in. requested twice applications have our customers

X somewhere we what so X have And all back same received received continues every seeing, progress if of the So to XX% around would expect. I complete to based is that from applications far. what customers, we're XX% way on

So XXX ballpark. That XXX kind of time. mean we be would the last that we'd that XXX XXX in to did --

X%. the And some Xs? NIM know in the level, guys we the I that core PPP, at you you and past, stability? you've reached to look right. you mentioned you All if accretion pointed ex then are think at but NIM think to your X% I I going little it into see a Or above think compression, dip core do NIM was

growth. I what's one there's into Xs earning see NIM chance both when core dip where we're likely a a overall able the just likely PPP, revenue to to we has you're assets the that I other the runs the will the yields, balances potential asset more earning something think of redeploy liquidity. function but away cited and the dilute where you mix number into is separately, what ultimately redeployed excess because than structurally, be course, that any are that on there, going core loan be And and then to produce its going think from PPP, if assume to PPP is the

be -- sense? might of lower, loans lower structural NIM level different the the to it a but comes a in more this would a function as implications would run to pass, be that core make NIM will Does assets. of if be be rate it So

M&A. me, makes Yes, And and just for Yes. that then buybacks sense. finally on

at value. If you your tangible trading you're XXX% of at book look currency, about

do enough M&A bank buyback high expensive but as quite seem maybe a front. too doesn't to it on buyer, the So

on thoughts then it about M&A. looks And active X% like to fairly as company the repurchased bank think you you Will just this in XXXX be So that quarter. you'll is a M&A? year. active guys well expecting on be -- of continue? Do a Everybody thoughts

valuation and we repurchaser. prices are and itself necessarily manage with see be we Sure. and of the a our from structure I'll we that first relates it equity would our capital too on And value and profile. then the from current better. managing Steve tangible as us think ratios. common a there, to as the M&A our dividends potential From comes you're function out. add start tactic thoughts flexibility shaping valuation we active an And always on expensive capital standpoint, stance put an how on But our think repurchasing, share will could say be our very -- too. repurchases in current to boxes plans we'll have on to return will I that road the that do the we it pay down wouldn't in XXbX But And share right, be ultimately, necessarily and that as that hit But don't share of manifests viable to well. whatnot. place standpoint discussion, some M&A, a our standpoint repurchase

our ago if it currency. I itself as have presents a to in relates we opportunity active. be the ultimately, And X were to months -- plan we're think now we to right place X we better than

Yes, that there's the of X higher, guess, better it's direction. I about one is we're really in And doubt M&A drive moving always that There's is and the that. kind be mood, things currency. to no

that's So we regard all that. COVID. is with the of one A But of year cloud perplexed uncertainty good. with the to were ago, other kind

that this we so conversations think will to be I going to take those cloud place. lift, some starts year heat deals up, where see is a and may And as

that. people So we're know and active,

region. conversations -- our we in we're so And maintain

Our comes with Inc. next Stephens Olney question from Matt

circle And hearing But we lower that's something wanted aside liquidity on aside, that mentioned going aspect loans PPP I'm And definitely are to to will yield? margin. cost, is other interest-bearing the banks. the the the I to if try paid as down. back the these liquidity to be challenging from on put and if you comparable improvements of PPP think be that Paul, core discussion some the pressure loan impact of we're to core the you curious deposit

room itself, protector our to we seeing of We it gradually still improve the quite million of that in which little albeit had lot that in to was quarter. funds, as had was a forward. really prior $XXX than go over on that go actually bit quarter that more pricing that point note to really loan it in still pleased cost overall production we at driver real in have in very quarter, or XXXX. we But NIM strong We're fourth and a of was look the growth was as higher fourth quarter-over-quarter manifests XXXX at the see was a basis forward we our ultimate that a profile we to than and loan core yields

fact to protect as additional the as of So by mindful beyond. And risk. loans, revenue yield to the very that be it to pretty our in buoyed we XXXX last that us in our to subject stabilization think we're loans. core said, our are the core core relates we're environment to That seeing pricing prospects and could and I yields competitive but the relates on quarter's it helps able loan be I'm that overall

sense as That growing have and our right now that pipeline a we is well.

to production We obviously about with good pipeline feel entry hold? don't regard new it loan that that. certainly had we good 'XX good our fourth momentum. and ever good really as Will but in into So the feel our know about that, we sits. We quarter,

awful loan of that And compression so to in lot an pressure. growth portfolio that is the NIM going mitigate

shares, in the this, Okay. it. And XXX,XXX discussion, the the share that you of think, mentioned average you missed back repurchase repurchased then was going fourth the price to just I have may you What mentioned quarter? I

$XX around change. have was it We'll in believe our Yes. and I that XX-K.

Slightly over $XX, yes.

looking more you scale for wondering this about for? And you you it M&A something if mentioned Is priorities simply the is additional the talk M&A. point. and greater be the Houston specific could the just market? it was What Or bank then within at that? are I besides

I'll rate away pressures to on the Well, revenue and in profile on that current of scale the clear potential loud banks. and of relates spread and to We scale. hit and it as environment see the interest kind first foremost power the

revenue more So as scale to a is and potentially relates it minds. broaden that diversified diversity see we profile. of our ultimately being separately, able to to being the get profile as cost more able income savings is noninterest But our powerful extent interest obviously and to leverage, our get income, -- really strong to an we're building on high operating

Coast, unique, that the would this own our Houston that would we'll probably where us is one Texas for one of I the merits. one region, is in and their on the to But Each of in Beaumont, year potential call primarily, evaluate region kind energy. stay and that are expending we'll candidates each I the Southeast Gulf thing guide guess, be

Okay.

Okay. go the helpful. some then with XXXX? prepared just with loans. loan nonaccrual details I the And there That's kind again mentions the some missed of is consider just you was of that that. in that? And Can behind something the over in sale remarks, lastly, of highlights you of would

Ray, do you want cover detail? to in that

Yes, sure.

So yes, Matt.

about is total that the a was which So of million, nonaccrual. of portion $XX

was So a credits identified than all really that. even deteriorated more were watch-list handful that it previously of loans, as type loans or

really future basis was those right -- the problem be appropriate. whether it do where prudent with stand we've tool thing was was And a in we depending a loans, -- it's -- to not, that credits. we it's do proactive, those So on for we case-by-case that we or it just on the felt to these with it had

the recently? just those pricing where color versus Ray, loans you had the more any And of on books them on

pretty... actually was It

right. [Indiscernible] of value. Yes, type

a the already we on just through loss of recognized the had had we loans on reserve Yes, we'd books. number that basically identified that a reserve those

we equivalent what a was the price basically was. net up book So to that value picked

about Think XX% so. or

Yes.

David Our Instructions] from next question [Operator with comes Raymond Feaster James.

PPP pulse much Texas, this it's the lenders new there. guess, curious is acquisition it existing just the start, we're pulse Obviously, versus XXXX. program, maybe of, curious, strong to the the clients the clients. investment to kind wanted of and heading growth see How as of client I kind on great How and is of your or much additional just their economy from expanding on the new thoughts the client. I of of growth, accelerating into But just the just originations.

David, yes.

what do we asking customers. new of and that, exactly customers So track you're keep existing

XX new. existing look of to PPP. though, bunch XX-XX that because $XXX existing are actually here XX of million, The -- the you right there is when So have because at category have customers they that qualifier, into to we might going to $XXX would from the million I of now fall a new of the been was say,

is it new So to really which maybe say what while a do XX-XX another guess probably. are really I to we I see relationships PPP. existing, But X,XXX customers. category need with at look -- new getting PPP new, answer our half made acquired building is the that is, were we that we're through of traction definitely and to loans than And customers another more

customers that the So -- well. new those XXXX quarter requests in did the of we then every treasury onboarding. business We new on customers from of We're and those are as loan turning treasury new was the basically, we're XXXX seeing onboarding side. of twice in

you really share it customers mean, growth there is and I some gains pretty there I there's expansion to market originate is, mood some we the happening. converting about indicative definitely expansion. the of those in share So of think definitely that good mood -- when too, and and feel permanent growth but $XXX that's there, and million, is mean, I market

about helpful and C&I in quarter. to Okay. was And the it see while. then for That's encouraging, mean, great the a I we've that talking too. growth been

composition the going your curious C&I pipeline. you can think be potentially a Just contributor maybe And of do larger what forward?

result see most we us, in there we back experienced seeing is C&I our an definite customers. -- which there utilization. they David. is when And lenders growth, there's customers We're we'll But utilization, certainly, team. for The larger will have revenue an It's will question opportunity -- utilization. C&I, the to -- book of we is get The we and more when on lines quality upside definitely producer funding. challenge and -- to credit in

from And then one just me. last Okay.

Just are fast as any payoffs are competitive and like as growing, the paydowns originations on accelerating thoughts seems landscape. too. almost It

activity? even on paydown landscape how curious and any Just strategic pay that and just or much just to passing of cash rate unattractive the competitive comments Just of on because clients down is asset? payoff this terms using you're debt or or

Yes.

-- the their balance to reducing, mentioned sale sheet. hadn't rate not are delevering it's liquid and is pay or that you component where just seen debt. just of a we cash before, -- on own property, the That function down So of a just customers

still seeing some So of we're that.

on quarter the we originated pricing $XXX came $XXX $XXX in passing million $XXX fourth million The in that on some as we on at at mentioned, are Paul million. million. came We third the terms. quarter But that this did

up of the picking So really point happened third trend a quarter. there on the that like million basis in that $XXX

signs of kind kind are positive those and of So the of reflection a competitiveness.

John comes next Our Rodis Janney. with from question

Just quarter, up we environment? bit in forward in think for item below XXXX How on little levels. still ticked me income. line should about that but fee going the well one a rebate question The current the

extent, core not that loans. cash of tick of see will cash be being our relative a as standpoint that much held a I'd liquidity up in balances to securities It bank going Or function deploying the case as our forward, necessarily to hopefully, as opposed larger-than-normal a outlier. at account. predominantly into lesser the corresponding correspondent that from bank was

about guess, said, $XXX the Paul, securities portfolio grew during quarter. you far goes, as like million you along I that, lines as the what, those

should -- you to somewhat and it's trade-off higher? that? that deposits, we about loans realize. I expect to should I But guess, move too, with a and we continue So how think

you there variable of securities. short risk-weighted type in X% alternative what saw Really, Ideally, an cash rate, is no. investment

significant somewhere but of it's from deploy So deciding bank capital ultimately, liquidity risk-weighted or and -- asset really of and a better where on we're standpoint to interest taking it function otherwise excess doing cash. not risk, amounts a risk-weighted credit rate standpoint

further at questions now like turn Retzloff further to time. for to any call back the remarks. showing not Steve I I'm And any this would over

in once speaking Allegiance the interest operator. time to future. we we in you appreciate again and forward guys, you, again, look to Bank, your Thank Well, and

thank you much. So all very

participating. Thank today's call. and gentlemen. you, concludes ladies you This for Thank conference

disconnect. now may You