Q4 2020 South Plains Financial Inc Earnings Call
Good afternoon, ladies and gentlemen, and welcome to the South Plains financial fourth quarter and year end 2020 earnings conference call. During today's presentation, all parties will be in a listen only mode.
Following the presentation.
The conference will be opened for questions with instructions for at that time and.
This conference call and is being recorded.
And I'd like to turn the call over to Mr. Stephen Clark Chief Financial Officer of South Plains Financial. Please go ahead Sir.
Thank you operator, and good afternoon, everyone. We appreciate your participation on our fourth quarter and year end 2020 earnings Conference call with me here today are Curtis Griffith, our chairman and Chief Executive Officer, Corey Newsome, our President and Brent Bates Citibank's, Chief Credit Officer.
As a reminder, a replay of this call will be available through February 10th 2021.
Additionally, a slide deck to complement today's discussion is available on the investors section of our website.
Before we begin let me remind everyone that this call may contain forward looking statements and are.
Are subject to a variety of risks uncertainties and other factors that could cause actual results to differ materially from those anticipated future results.
Please see our safe Harbor statement beginning on page four of our earnings press release and on slide two of the presentation.
All comments made during today's call are subject to that safe Harbor statement any forward looking statements presented herein are made only as of today's date and we do not undertake any duty to update such forward looking statements, except as required by law.
Additionally, during today's call we may discuss certain non-GAAP measures, which we believe are useful in evaluating our performance.
A reconciliation of these non-GAAP measures to the most comparable GAAP measures.
Can be found in our earnings release at this point I'll turn the call over to Curtis.
Thank you, Steve and good afternoon.
On today's call I will provide a high level review of our results and the success that we achieved growing the bank over the past year.
Cory will discuss the continued improvement that we have experienced and our loan portfolio as our proactive approach to managing credit. This cycle is yielding positive results.
He will also touch upon the investments that we've made to drive organic growth and our outlook for the year ahead, and Steve will conclude with a more detailed review of our fourth quarter and year end 2020 financial results and we will then open the call for your questions.
Well this past year presented our company with unprecedented challenges as a result of the global COVID-19 pandemic I could not be more pleased with the performance of our employees and their commitment to both the bank and our customers our strong financial results for the fourth quarter and full year, 'twenty and 'twenty would not.
It's been possible without their tireless efforts.
We believe our results are also a reflection of the determined steps, but our management team has taken over many years to transform the bank with a goal of delivering returns in line with or better than our peers. This transformation has included the implementation of our enterprise risk management system designed to improve the risk management of the <unk>.
And the credit profile of our loan portfolio are.
A key aspect of our enterprise risk management system is the extensive and ongoing reviews of our loan portfolio, which led to the exit of a number of relationships prior to the downturn caused by the COVID-19 pandemic.
We believe this better position our portfolio for the cycle and will ultimately serve to mitigate losses.
We have also worked to instill a strict expense discipline as we strive to improve our profitability as we grow the bank, both organically and through strategic acquisitions.
The tangible results of our team's efforts can.
Can be seen and our financial results as detailed on slide four.
For the fourth quarter of 'twenty and 'twenty, we reported net income of $15 $9 million or 87 cents per diluted common share, which compares to net income of $10 $1 million or 55 cents per diluted common share that we reported in the fourth quarter and 2019.
Pre tax pre provision income for the fourth quarter of 'twenty, and 'twenty was $20 million, which compares to $26 9 million in the third quarter of 'twenty, and 'twenty and $13.7 million in last year's fourth quarter.
Our provision for loan loss and the fourth quarter of 'twenty, and 'twenty was $141000, which compares to $6 $1 million of provision expense recorded in the third quarter of 'twenty, and 'twenty and $896000 and the year ago quarter.
The decrease and our provision expense from the third quarter of 'twenty and 'twenty is a result of a modest improvement and the economy, a decline and the amount of loans that are actively under a modification and a decrease and outstanding loan balances.
While we continue to take a conservative approach to credit and are maintaining our reserves. We are very pleased with the continued improvement that we are experiencing and our portfolio.
And as of December 31, 'twenty and 'twenty.
Active loan modifications related for the COVID-19, pandemic or two 9% of our portfolio.
It is down from five 4% as of September 30, 'twenty and 'twenty as.
And as Cory will discuss we believe our proactive approach combined with our decision to allow our borrowers to modify their loans to interest only payments early and the COVID-19 pandemic has positioned the bank to continue to successfully weather the storm, while also differentiating citibank and our local markets.
Overall, we believe that our current reserve position is appropriate and are cautiously optimistic that the economy will continue to improve.
Yeah.
While we believe our team has managed our loan portfolio extremely well I'm also very proud of our ability to deliver organic growth and a tough environment.
This growth enabled our team to scale, the bank's infrastructure and improve the return profile of South plains, which can be seen and our full year 'twenty and 'twenty results as outlined on slide five.
And we grew assets 11, 2% year over year to $3.6 billion.
Group pretax pre provision income more than 100% year over year to $82.2 million.
Grew earnings 44% year over year to $2 47 per share.
Increased tangible book value per share of 23% year over year to $18.97.
Improved our efficiency ratio more than 1200 basis points year over year from 75, 3% to 63 per cent and.
And expanded our return on average assets 27 basis points to 1.31% for 'twenty and 'twenty as compared to 1.04 per cent in 2019.
We believe these results demonstrate the successful execution of our plan.
And provide a solid foundation for the year ahead.
Turning to capital we have maintained a disciplined and thoughtful capital allocation strategy, which is designed to provide steady dividends to our shareholders. While also supporting the growth of the bank and as part of this strategy, we raised our quarterly dividend more than 65% and the fourth quarter of 'twenty and 'twenty and last week our board of.
Record approved our seventh consecutive dividend to be paid on February 16th to shareholders of record as of the close of business on February 1st.
We also announced the resumption of our $10 million share repurchase program. This past November <unk>.
Importantly, we will remain disciplined as we weigh the opportunities for improving shareholder value and capital redeployment to grow the bank.
To support our growth and maintain our capital flexibility during the uncertain economic environment, we issued $50 million of subordinated notes in September of 'twenty and 'twenty.
We believe this issuance will also help to ensure we will have financial flexibility to take advantage of any dislocations in the market, which could arise.
Strategic M&A has been and continues to be a priority and we are beginning to see activity pick up which is encouraging.
And our team is actively looking for acquisition candidates and believe the current interest rate environment will be increasingly challenging for banks with low loan demand to maintain acceptable returns to their shareholders.
We believe we will see motivated sellers through the year ahead, and believe we are well positioned to take advantage of those acquisition opportunities given our strong capital base, combined with and infrastructure, which can handle $5 billion and assets without adding significant incremental expense.
To conclude we remain cautiously optimistic as we look to the your head on.
Our operations continue to run smoothly as we effectively service for customers via our drive through Windows and digital platforms, which have performed very well.
Our local economies continue to be resilient and the face of the ongoing COVID-19 pandemic with the pace of business remaining active.
And we believe that the credit quality of our portfolio is sound and the reserves that we have built are appropriate given what is still and uncertain outlook for.
Finally, our earnings have been strong and we have built capital through the crisis, which positions our team to execute on our initiatives to profitably grow the bank.
Now, let me turn the call over to Corey.
Thank you Curtis and good afternoon, everyone.
Starting with our loan portfolio on slide six loans held for investment and at the end of the fourth quarter of 'twenty and 'twenty were $2 $22 billion, which is a $67 million decrease from the third quarter of 'twenty and 'twenty and a $78 million increase for the fourth quarter of 2019.
The decline from the third quarter of 'twenty, and 'twenty was largely driven by $42 million and forgiveness and pay downs of PPP loans $28 million and pay downs on seasonal agricultural loans and the early payoff of a 16 billion dollar state and municipality level.
Turning to slide eight and it's hardest noted our active loan modifications related to the COVID-19 pandemic are down to 2.9% of our total portfolio and are predominantly in hospitality as we had expected.
At the end of the fourth quarter of 'twenty and 'twenty, our hospitality exposure was $123 million or six per cent of our portfolio. Excluding PPP loans with 83 per cent of the balances and limited service hotels as outlined on slide 10.
Help these customers weather the storm and preserve cash flow, we generally off for 12 month interest only loan modifications or a combination of a 90 day deferral and a non month interest only modifications.
While the outlook is still uncertain. We are pleased with the recovery that our hotels are experiencing is the revenue per available room has improved each month since the depths of the process and I.
Additionally, we believe we remain well reserved and this segment with our allowance for loan losses, and seven seven per cent and we're cautiously optimistic on the outlook for this force portion of our portfolio if conditions continue to improve.
Our direct energy exposure at quarter end was $64 million or three 1% of our loan portfolio. Excluding P. P. P loans, which is a modest decline from the third quarter's level of $71 million.
Through the fourth quarter oil prices have steadily increased and are approaching pre crisis levels through January of 'twenty 'twenty, one and this has had a positive impact on activity and the Permian and we continue to feel very comfortable with our energy exposure and as a reminder, almost half of our direct energy exposure is one service sector alone, where we have strong guarantor support.
Outside of the and energy industry.
Overall, I'm very pleased with how our portfolio has performed and the COVID-19 pandemic and gratified with the success that we've achieved managing credit both prior to the cycle and through the cycle.
That said, we believe our strict credit culture and contribute to the decline in loan balances and other than P. P. P loans. In addition to the more challenging economic environment.
While demand is slowly starting to improve and our local economies. We will continue to manage credit carefully as a result, we expect our loan portfolio in 'twenty and 'twenty, one to be flat to up low single digits before returning to more normal growth in 'twenty and 'twenty two excluding E. P P loans.
To drive organic growth, we will continue to hire experienced lenders, which is our priority and the year ahead. We've also enhanced our incentive compensation plan to better align our lending team with a bang.
One area, where we've experienced strong growth as a result of our initiatives and the mortgage banking, where we have brought on new teams as we focus on market share gain and new production over the last two years. Our team has more than doubled production from $641 million and 2019 to $1 $4 billion and 2020.
These strong results can be seen and the growth of our fee income over the last year or is it is it is highlighted on slide 11, as we generated $26 $2 million of non interest income in the fourth quarter of 'twenty and 'twenty compared to $31 $7 million that we generated and the third quarter of 2020 and $16 $7 million that we generated in the fourth quarter of 2019.
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The decrease from the third quarter of 'twenty and 'twenty was primarily due to a reduction of $4 $5 million and mortgage banking revenue as a result of lower interest rate lock commitments and the fourth quarter, which is a normal seasonality.
Importantly, this strong growth was achieved without a commensurate increase in head count as we rely on technology to scale looking to the year ahead, we do expect mortgage volumes to decline and.
And our position to maintain profitability without the need to reduce head count as a result overall noninterest income remains a real differentiator for South Plains is like as fee income represented 46% of total revenues and the fourth quarter of 'twenty, and 'twenty as compared to 37% and the year ago quarter.
We also believe that we are well positioned for the next round of SBA Paycheck protection program or P. P. P. During the first round on the P. P. P program, we closed more than 2000 and PPP loans digitally as we work to ensure both our test for employee safety and the efficiency and ease of we offer our customers helped to bring several new high profile relationship.
For the bank.
With our focus on efficiency and profitability, we continue to invest on the technology and will further streamline the process and allow our lenders and support staff to focus on our traditional loan portfolio.
This focus can also be seen and the great strides that we've made and proving the bank's efficiency ratio, which is a key commitment that we outlined in our IPO roadshow during 2018 and 2019, our efficiency ratio was running and the mid to high 70% range.
And a key area that we needed to improve I'm very proud of the progress that we've achieved as we've delivered a 63 per cent efficiency ratio for the full year 'twenty and 'twenty.
While we expect our efficiency ratio to moderate in 'twenty and 'twenty, one with the decline in mortgage volumes. Our team will remain disciplined on expenses as we scale the bank.
In conclusion, I'm very proud of our team and the results that we've achieved and a difficult environment, while we recognized and above normal level of provision expenses due to the uncertainty created by the pandemic, we were able to offset that expense with and above normal level of mortgage income, which resulted in a nice improvement to the banks earnings and 2020.
The backdrop has positioned south plains for success and a year ahead I would now like to turn the call over to Steve.
Thank you Corey starting on slide 13, net interest income was $34 million for the fourth quarter of 2000, and 'twenty as compared to $31 $3 million for the third quarter of 2020 and $28 $6 million for the fourth quarter of 2019.
The increase since the fourth quarter of 2019 was due to a rise and our average interest earning assets and $523 million, primarily from the West, Texas State Bank or W. TSB acquisition.
As well as our participation and the P. P P.
Partially offset by a decrease of 68 basis points and non PPP loan rates due to the sharp decline and the rate environment experienced in the first quarter 'twenty and 'twenty.
During the fourth quarter of 2020, we recognized $2 million and PPP related SBA fee income as an adjustment to interest income and there is currently $4 $1 million and unrecognized deferred PPP fees.
Our net interest margin decreased to 3.64% and the fourth quarter of 'twenty and 'twenty as compared to 382% and the third quarter of 2020.
Our non PPP loan rates declined 17 basis points as we've continued to see some rate pressure on our loan portfolio.
Additionally, the margin declined seven basis points from the subordinated notes issuance at the end of September 'twenty and 'twenty.
Our average cost of deposits declined three basis points to 31 basis points and the fourth quarter of 'twenty and 'twenty as compared to 34 basis points and the third quarter of 2020 and.
And declined from 76 basis points and the fourth quarter of 2019.
The improvement and funding costs experienced through 2020 has largely been due to the 150 basis point decline and the federal funds rate and March of 'twenty, and 'twenty, which allowed us to further lower the rate we pay on deposits.
We will continue to monitor our rates going forward, but expect our current rates to be nearing the floor of this cycle.
And the fourth quarter of 'twenty, and 'twenty deposits increased $30 $5 million to two point and nine $7 billion.
Compared to two nine and $4 billion and the third quarter of 2020 as can be seen on slide 14.
We ended the fourth quarter of 'twenty and 'twenty with total noninterest bearing deposits of $917 million for 38 per cent of total deposits.
This is essentially flat with the third quarter of 'twenty and 'twenty and compares to the $791 million of noninterest bearing deposits at the end of the for fourth quarter of 2019, which represented 29, 3% of total deposits.
Turning to slide 15, our nonperforming assets total assets ratio declined one basis point to 45 basis points and the fourth quarter of 2000, and 'twenty as compared to the third quarter of 'twenty and 'twenty as Curtis touched on we added only a small amount to our allowance for loan losses, and the fourth quarter of 'twenty and 'twenty, We believe are poor.
Folio remains well reserved as are a triple able to total loans. Excluding P. P. P loans was 2.22% at December 31 2020.
Which is unchanged from the third quarter of 'twenty and 'twenty.
We believe that the reserves that we have built to help guard against an uncertain outlook are appropriate.
The yield on average interest, earning assets was 4.07% for the fourth quarter of 2020, a decrease of 82 basis points as compared to the same quarterly period in 2019 and was driven by the overall decline in and interest rates over the time period.
Excuse me and ahead to slide 17, our noninterest expense was $36 $5 million and the fourth quarter of 2020.
And as compared to $36 million and the third quarter of 2020.
This increase was primarily due to the recovery of $303000 of legal expenses from the previously disclosed lawsuit settlement occurring in September 2020, and increases in marketing and business development expenses, and our Permian basin branches and the fourth quarter.
Skipping ahead to slide 19, we remain well capitalized with tangible common equity to tangible assets of nine 6% at the end of the fourth quarter of 'twenty and 'twenty compared to 9.25 per cent at the end of the third quarter of 2020, and $8 six 9% and the fourth quarter of 2019.
Now I'll turn the call back to Curtis for concluding remarks.
Thank you Steve.
For the last six years, we have been preparing for the next downturn based upon the lessons that we learned from the great recession we.
And we improved our risk management through the implementation of our E. R. M system improved our operations through investments and technology and took a cautious approach to growth, where we would not sacrifice our credit standards to grow our loan portfolio. While we did not expect the COVID-19 pandemic, nor the challenges that arose we were ready.
At the onset of the COVID-19 pandemic, our team moved rapidly to move many of our employees to a remote work environment to ensure their safety.
And we accelerated the migration of our customers to our digital platforms, which has gone smoothly and with improved customer satisfaction and.
Lastly, our senior management team rapidly put a plan in place to help our borrowers preserve their cash flow during the day after the crisis.
We believe our preparedness paved the way for our success. This past year and has provided the foundation for success and the years to come and.
We're excited with the opportunities that we see ahead and grateful to be and are positioned to capitalize on them.
Thank you again for your time today operator, please open the line for any questions.
At this time and will be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad and confirmation tone will indicate your on us and the question queue.
You May press star, two and see what I can to remove your question from the queue for participants using speaker equipment and may be necessary to pick up on your handset before Christmas turkeys.
One moment, please while we poll for questions.
My first question is for a month.
Brady Gailey with K B W Police force.
And with your question.
Okay. Thank you and good afternoon guys.
Right exactly.
But you know I saw the press release in early November about the resumption of the buyback.
And how you guys thought about 10 million.
It's about 10 million left authorized but it doesn't appear that you repurchase any stock and the fourth quarter, which I thought was a little surprised and I know, especially in November and the stock was still trading at a discount to tangible book value and maybe just.
Confirm that you didn't buy any stock back on the fourth quarter and maybe it's on the stock is still relatively inexpensive as it was pretty much at tangible book value now so how should we think about you guys as being you know repurchases of your stock this year.
Hey, Brady. This is Steve as you said, we did we did start that back up and in early November and we.
We actually did buy some stock back.
But that is just kind of gotten gotten started.
So so there is some activity.
And there I'll, let her to touch on maybe any of the.
And future plans.
We are intending to keep it open and.
We're going to have some more discussions I think we're seeing a pretty rapid increase.
Across the sector on a bank stock pricing and for we kind of slowed and to see how fast and how far the move was going as you say I think we're still very conservatively priced for at least so I think our board and we'll have some additional discussions and we certainly intend to keep the program in place well into 2020.
One.
Okay, and how much stock did you repurchase and the quarter it looks like the period and share count actually went.
Oh for one quarter.
Yes. It is actually up we had we had stock options that were exercised at the end of at the end of December.
So yes.
There was.
And nominal amount I mean, less and probably less than 20000 shares maybe.
Okay.
Alright.
And then.
How should we think about.
The margin from here I know some of the margin slippage was related to the sub debt.
You know, which is what it is but some was related to.
Lower loan yields and how how should we think about for me.
Large over here and do you think theres more.
For the downward pressure from the larger and or do you think where do you think we're stabilizing here.
Yes.
We expect to see some some additional pressure, but we think that that we hopeful that we saw the larger decline in the fourth quarter and that is.
That moderates from there but.
And definitely still see some some pressure and the loan portfolio for for pricing.
We are on the on the deposit side and we do continue to look at those range. How you see those did drop again in the fourth quarter and and we'll look to see.
See where we can drop those a little bit more to help offset anything we see on the loan side.
I think what we're seeing across our loan committees right now.
Definitely still on some pressure to cut some rights and right now we're focused very heavily on credit quality.
And we'd rather be sure, we're maintaining high quality and that portfolio, even if we do take it at a little bit lower right.
And competitive pressures are certainly strong for that type of loan and Steve indicated I think we will have some additional opportunities as we move into 2021 reduced more rights on the deposit side. So.
So I do think that as he said, we're probably going to have a little more compression and the name, but I think that rate of compression is definitely slowing.
Alright.
And finally for me, it's just a question.
On your bank M&A strategy.
You know, it's it's tough to be a bank buyer when you have a currency that's trading at one times tangible and even if you look at your P E.
I think you guys are trading.
Under under 10 times earnings for me that it's tough to have a currency like that to use to by somebody and so maybe just talk about.
And at that.
Dynamic and if you really think you're going to be active.
Near term without currency and then just remind us kind of what what size target would you be interested and from an asset size point of view and and what what type of company, which like probably looking for high quality.
Lower quality that you can kind of fix up like what what's the ideal candidate it looks like there.
Well the first part of the question.
Right now and that's one reason, we did build some pretty a good amount of cash including that for $50 million of sub debt.
And I certainly agree with you that it's difficult to be on acquirer with stock as a currency with our current multiples.
Hoping to see that improve and as we move into 'twenty, one, but we do have a hefty amount of cash and and certainly access to more so for the right. The right situation, we'd be glad to do on a cash deal.
And that will put us looking at smaller banks certainly.
And we would look at I think things above 200 million.
And.
Net have a strong deposit base low cost deposit base and.
And relatively solid loan portfolio I don't think we are and a move to try to solve somebody elses problems right now and going on and do fix ups on things and it would have to be a real bargain situations and I think to get us interested and that.
And frankly, we just don't seem to have a whole lot of banks that are struggling matching or are part of the world. We may see more of that as we move later into 'twenty, one, but currently I just don't see a lot of troubled assets popping up out there.
Alright, great color guys.
Thanks, Mike.
And our next question is from Brad and it was absolutely Piper Sandler. Please proceed with your question.
Yes.
Hey, good afternoon.
Hi, Brad for them right.
Curtis just to kind of follow up on your last comment I mean, it sounds like youre not seeing a lot of stress in your markets you know other folks whose portfolios or your own should we read that as you know you kind of expect maybe continued to record almost a zero provision over the near term or do you think you're sort of at that inflection point.
Where you might see a negative provision and and released reserves and a bigger way.
And our Chief credit officer, and talk about that a little bit a Frenchman right and the middle of that so I'll, let him take this one yeah.
With with us not being a seasonal bank really the reserve increases that you saw over the over the last year really driven by just yet and uncertainty we've seen for fell and the economic environment.
But right and while right now, we're real confident and our reserve level on and comfortable with our portfolio credit quality.
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You know, we're still not seeing on the loss rates come into the portfolio. So.
So it's just something we're going to have to monitor on a quarter by quarter basis and.
Logic would indicate that.
On the reserve percentages.
You know our ore at the.
Historic high so.
Absent.
Credit and.
Additional credit events or greater uncertainty.
And you probably expect those ratios come down.
I think what we've just and our way.
And I'm looking at it a lot of the well.
Would've been difficulties and.
And segments of our market.
And to some degree been papered over by the federal dollars and maybe those are going to continue but maybe they want and I think right now we'd rather be sure that we are appropriately.
Appropriately reserved for the uncertainty that we're facing right now and.
And we're probably going on strike pretty strong with that and we'll look at it each quarter and and look at the appropriate and is at that time, given what we're seeing and the overall economy and our specific local economies as well.
Okay, Great and then just a kind of a housekeeping item as it relates to the margin Steve was there any big impact from a loan discount accretion this quarter I think it was maybe.
Half a million dollars last quarter. So just kind of curious if there's any any impact.
No. It was it was slightly less than last quarter, but it was it was it was around the same the same amount.
Okay, Okay, and so that core loan yield as well.
Maybe just north of 5% and where do you guys seeing you know to the extent you are seeing new production come on the books.
Great.
Yeah, I mean, you know.
And depending on the asset type, but I would say on average probably on a for.
A 4% range for the four and a quarter maybe at the high end, but I'd say on average is probably the new production has been a for range.
And even mentioned earlier on our big thing is.
I mean, we're going to give up on rate before we'll get up on credit quality. It is it's just not going to happen.
Sure understood.
And then maybe kind of final question around.
And of expenses and the mortgage business.
You guys grew mortgage revenue and some $40 million and 2020.
Just kind of wanted to think about if we do see a bit of a backup and revenue how should we be thinking about sort of your expense trajectory do you think that you know you can.
Sort of back off for the <unk> run rate or is it is it a situation where you might be spending some of those lower mortgage commissions elsewhere and just wanted to get a sense of you know.
Kind of expense trajectory in 2021.
Well I think on that.
Noninterest expense chart that you did see that increased true all the quarters.
What we didn't really explain on that is all of that increase was driven by increased expenses going out and the mortgage division.
So as that flows back on we were actually getting some savings in non interest expenses moved along and we think we'll have some opportunities for some additional savings on that as well cortisone and address the mortgage outlook a little further.
If you look at the margins and we're gonna be seen moving forward, we think theyre going to get tighter I mean, there's no question, we're not really not seeing much coming in through the refi side of it. So we're strength, we're staying very focused on what we do on.
On the on the origination side on on new purchases and things such as that so.
We think it's going to slow down some and we're starting out and we think it can be a pretty good quarter.
With what we've seen so far with the losses that we've had but the margins are definitely on the tighter.
Okay, and then Oh away for mortgage I mean is it still kind of the same story on the expense side still you know looking looking for ways to kind of push the overall expense dollars are down or are there any other plans for.
More aggressive branch consolidation or anything else, we should be thinking about it and in 'twenty and 'twenty one.
Well I mean, I think I think we're just like everybody else, we figured out that we could do more with less through the COVID-19 impacts. So I mean, we're seeing opportunities where we continue to I mean, let attrition take hold and and not have to replace some of these lease roll and and the other side that is as you know we.
And we made some changes this year and when it came to our technology leadership, and we're seeing more and more ways, where we can let technology step up and and help us cut expenses with the outside of traditional overhead and we had in the past.
Okay.
Okay, great. Thank you guys.
Thank you Greg.
And we have reached the end of the question and answer session and I will now turn the call over to management for closing remarks.
Thank you operator.
I'd like to close by thanking our employees for all their hard work and this past year.
Together, we've accomplished much more and what has been one of the most challenging environments I've ever experienced and almost 50 years and banking on.
Our success is a direct result of your average combined with the initiatives that we've put in place to instill a conservative credit culture and improve the operations for the bank, it's rewarding to see the bank performed so well and a real affirmation of our efforts.
Looking for the year ahead, we are well positioned to take advantage of opportunities to grow the bank I'm excited with what the future holds for South Plains and hope everyone on the call today remain safe and healthy. Thank you again.
This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.
Yeah.