Q2 2021 South Plains Financial Inc Earnings Call
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Good afternoon, ladies and gentlemen.
Welcome to the South Plains Financial Inc. Second quarter, 2021 earnings conference call.
During todays presentation, all parties will be in a listen only mode. Following the presentation. The conference will be opened for questions with instructions to follow at that time as a reminder, this conference call is being recorded.
I would now like to turn the call over to Mr. Steve Crockett Chief.
Officer, and treasurer of South Plains financial.
Please go ahead Sir.
Thank you operator, and good afternoon, everyone. We appreciate your participation in our second quarter 2021 earnings Conference call with me here today are Curtis Griffith, our chairman and Chief Executive Officer, Corey Newsome, our president.
And Brent Bates City Bank's Chief Credit Officer.
Minder, a replay of this call will be available within 2 hours at the conclusion of the call until August 10.2021.
A slide deck presentation to complement today's discussion is available on the news and events section of our website.
Before we begin let.
Let me remind everyone that this call may contain forward looking statements and 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 in our earnings press release that was issued this afternoon and on slide 2 of the slide deck.
Presentation available on our website.
All comments made during today's call are subject to those safe Harbor statements.
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.
Paul 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 also be found in our earnings release and on slide 20 of the slide deck presentation.
At this point I'll turn the call over to Curtis.
Thank you, Steve and good afternoon.
<unk> call I will briefly review the highlights of our second quarter 2021 results and our strategy to grow the bank.
Cory will discuss our initiatives designed to accelerate organic loan growth in more detail and Steve will conclude with a more granular review of our second quarter 'twenty.
Today's call for any 1 financial results. We will then open the call for your questions.
There are 5 points that I would like you to take away from today's call in our second quarter results.
First economic activity continues to accelerate across Texas as the environment has continued to normalize that.
Said, we are closely monitoring the current environment given the rise in cases due to the Delta variant and are prepared to quickly make any necessary adjustments to protect our employees and customers.
Second while we are benefiting from this improved economic activity. We are also focused on expanding.
Our loan portfolio and are in the process of actively hiring bankers across all of our markets, but with a particular focus on our major metropolitan markets of Dallas and Houston.
Third as we put our excess liquidity to work in organic loan growth, we expect to see margins expand earnings growth.
To accelerate and our returns improve.
Fourth as we increase our loans, we will maintain our conservative underwriting standards as we will never sacrifice credit quality for growth.
Lastly, we will continue to pursue a thoughtful capital allocation strategy focused on share buybacks.
Maintaining and growing our dividend overtime and tactical M&A.
Turning to our second quarter 2021results on slide 4.
We reported net income of $13.7 million or 74 cents per diluted common share, which compares to net income of $5.6 million or <unk> 30.
1 cents per diluted common share that we reported in the second quarter of 2020.
Pretax pre provision income for the second quarter of 2021 was $15.1 million, which compares to $19 million in the first quarter of 2021 and 21.
$1 million in last year's second quarter.
We had a negative provision for loan loss in the second quarter of 2021 of $2 million, which compares to a $13.1 million provision expense in the second quarter of 2020.
Our reserve release this quarter reflects.
Flex the credit improvement that we are experiencing in our portfolio and the general improvement of and our expectation for continued strengthening in the overall economy.
In particular, we are seeing robust activity in corporate expansion in west, Texas, where interest driving job growth and the housing market.
While the rebound in energy prices is leading to an acceleration of drilling activity and improved economic momentum in the Permian basin.
This can also be seen in our loan portfolio, where we are generally seeing positive credit migrations and an increase in our customers' demand for credit and our loan pipeline is now at a.
3 year high.
These trends provide confidence as we work to maintain loan growth during the second half for the year to offset PPP loan forgiveness. We.
We are hopeful that we can deliver mid single digit loan growth in 2021 and then an additional portion of our reserve for loan losses can.
Can be returned to capital to support loan growth.
While we believe the market backdrop is very healthy. We are also working to expand our loan originations by hiring experienced bankers across all of our markets with a focus on Dallas and Houston, where we are targeting customers looking for our relationship based approach.
Roche to banking and our superior products and services.
The opportunity to continue to generate low cost deposits and our smaller non metropolitan markets and redeploy our excess liquidity into our larger urban markets is a key component in our strategy for organic growth.
For the second quarter of 2020.
1 our cost of funds was 27 basis points as compared to 29 basis points in the first quarter of 2021. This provides a competitive advantage as we establish a stronger presence in our metropolitan markets and work to gain market share.
We currently have significant excess liquidity to deploy.
And as our loan to deposit ratio at the end of the second quarter was 73%.
We have made good progress hiring experienced bankers and are well on our way to achieving our goal of growing our lending team by more than 30% over the next 2 years Corey will discuss this in more detail in a moment.
As we strive to accelerate our organic loan growth. We will also continue to employ a thoughtful capital allocation strategy to create value for our shareholders. We continue our share repurchase program and expect to deliver a consistent return of capital through our quarterly dividend.
During the second quarter of.
2021, we repurchased approximately 39000 common shares under our $10 million share repurchase program.
Additionally, our board of directors authorized a quarterly dividend of 9 <unk> per share. This past week, which is up from the last quarterly dividend of 7 cents per share.
In April of this year.
This will be our 10th consecutive quarterly dividend and will be paid on August 16th 2021 to shareholders of record on August 2nd 2021.
We believe that we have the capital to pursue both our stock repurchase program and strategic.
T J came in I opportunities.
We have the capacity to acquire a bank that either opens a new market opportunity for us or consolidates our position in an existing market.
We expect M&A activity to accelerate in West, Texas over the next year we.
We are focused on finding a bank with a similar culture that is well suited to come.
Complement and add significant value to our current structure.
We are looking at banks with good deposit franchises in rural markets, where there could be leadership changes over the next few years.
As mentioned previously we will then redeploy those excess deposits into other metropolitan markets as we continue to expand.
Our organic loan platform.
We believe there are more than 20 potential targets in west, Texas as we focus in on banks with assets in the $250 million to $1 billion range.
Importantly, we will not do a deal just to do a deal we are price sensitive and cognizant of margin.
Expectations on valuation.
As we grow the bank. We are also focused on improving our operations by further utilizing technology the.
The investments that we've made over the years and our digital platforms positioned the bank for success through the COVID-19 pandemic.
Looking forward, we see further.
Further opportunities to enhance our efficiency and are starting to initiatives as part of our technology roadmap.
The first is a refocusing of our advertising to digital media.
After much thought and analysis, we have decided to become more focused on targeted digital marketing. We believe this medium growth.
More qualified leads and ultimately new business opportunities, while being more cost effective as.
As we transition our marketing dollars to digital media, we expect to generate a strong internal rate of return on the spend.
As part of our long range plan. We are also initiating a process to move our data.
Computing and data storage to the cloud as we believe this will provide increased security more seamless maintenance and lower costs.
We believe this is the right time to pursue this migration and expect a modestly higher run rate for our quarterly expenses over the near term as we execute on these.
These 2 technology initiatives.
To conclude I'm very pleased with our second quarter results as we continue to focus on growing the value of the bank and I am very proud of the success that we've achieved over the last year, we've grown tangible book value per share by 19, 8% for $20.43.
And improved our annualized return on average assets by 82 basis points to 1 point for 6% both as of June 32021.
Our local economies are robust and we are making strong progress growing our banking team, which positions South plains financial solidly for the future net.
Now.
Let me turn the call over to Corey.
Thank you Curtis and good afternoon, everyone.
Starting with our loan portfolio on slide 5 loans held for investment at the end of the second quarter of 2021 for $2.3 billion, which.
Which is a $68 million or 2.7% increase from the first quarter of 2.
1.
The increase from the first quarter of 2021 was largely driven by organic net loan growth of $120.1 billion, partially offset by a net decrease of $59.3 million in PPP loans, primarily as a result of SBA repayments on PPP loans received during the second quarter.
2020, our loan growth in the second quarter was primarily driven by residential construction.
Family properties and agricultural production loans, while cap rates on new projects that we're currently reviewing are often very low we are requiring more equity in new loans as we maintain our strict underwriting discipline.
Despite our more conservative origination.
This is we are seeing solid opportunities as we work with builders with whom we have long standing relationships. We are a relationship bank and do not seek participations or shared credits.
We have a strong team of bankers in place that we have developed a longstanding relationships with our customers looking for we see an opportunity to build on this foundation by adding.
Practical across our markets as Curtis touched on our strategy is to grow our presence in our metropolitan markets of Dallas, and Houston, where we can take share by continuing to redeploy our low cost funds into attractive loans.
To accomplish this we have a goal of adding 20 lenders to our 60 day lender team over the next 2 years.
We are actively.
Adding scale in all of our markets with a focus on Dallas and Houston, where we have commercial loan offices. It's important to stress that we are not pursuing a branch strategy in those msas.
We're expanding the amount of lease space. We currently have in our metropolitan branches as opposed to opening additional locations.
This is an effective way to grow within our metropolitan markets.
However in addition, we are being careful and prudent in who we hire we are focused on veteran bankers, who have strong relationships a history of success and most importantly, who fit our culture.
Our expectation is that our new hires will ramp quickly and breakeven within the first 6 months at the bank, while we expect our salary expense will grow through the second half.
This year and into 'twenty 'twenty 2.
We expect our organic growth strategy to be accretive as net interest income should grow more quickly than our expense.
As part of our strategy, we recently hired a new market leader in Houston, who is an experienced banker with strong relationships.
This is a good example of our approach in attracting high.
Quality talent as well as bringing new relationships to the bank.
This is a new position for South plains and helps demonstrate our desire to have structure to gross safely.
We also appointed a new market leader in Odessa, who is a veteran Citibank lender it will infuse our culture in the market as well as promote further cross selling of citibank's products.
With economic activity picking back up due to the rise in energy prices, we are seeing opportunities in the Permian basin with long standing customer relationships and expect that we will see an uptick in direct energy loans in the second half of this year.
Well, we do not seek to be a large energy lender, we do expect to see a modest increase in our energy exposure from our current levels.
A 2% to 3% of our loan portfolio.
We do not see our energy exposure going above 5% of our loan portfolio, but do anticipate the opportunity to selectively add exposure with existing customers, who are seasoned borrowers that have been through many economic cycles.
We have gotten off to a strong start in 2021 and.
And have been consistently successful with the implementation of our strategy to increase the depth breadth and stability of our loan portfolio.
Our focus is on delivering sustainable organic growth and we are cognizant of the outsized revenues that we've achieved over the last year in our mortgage business given the low rate environment for.
For the second quarter of 2021, we delivered.
For $378 million in mortgage loan originations as compared to $435 million of originations in the first quarter of 2021 as can be seen on slide 7.
This led to a $5.1 billion decrease in mortgage banking revenues in the second quarter compared to the first quarter of 2021.
While volumes have.
Calling in gain on sale margins contracting we believe that our mortgage business will trough at a higher level for this cycle given our success hiring mortgage bankers over the last year.
We believe the expansion has led us to take share in the purchase market, which will begin to offset declining refinance activity and allow us to stabilize origination and fees at a higher.
Been slow than our run rate through 2019.
As outlined on slide 8 our fee income has declined with the moderation in our mortgage banking activity for the second quarter of 2021, we generated $22.3 million of noninterest income compared to $26.5 billion in the first quarter of 2020.
Higher level looking to the second half of the year, we believe our mortgage fees are normalizing and should lead to a stabilization in our non interest income importantly, we believe we are positioned to mitigate margin compression given that we have effectively use technology to scale.
Overall, we believe noninterest income continues to be a real differentiator for South plains.
It's fee income represented 43% of total revenues in the second quarter of 2021 as compared to 45% in the quarter year ago.
To conclude we are very fortunate to be in attractive markets with robust economic activity and see an opportunity to expand our lending portfolio over the next 2 years we.
1 that we have significant potential earnings power is sitting on our balance sheet given that our loan to deposit ratio is currently 73%.
We would like to see that rise to the mid to high Eighty's over the time, having most recently been at 84% prior to our acquisition of West, Texas State Bank in 2019.
As we execute our strategy of adding extreme.
Experienced lenders to drive organic loan growth, we plan to redeploy our excess liquidity into higher yielding loans, which we believe will drive margin expansion and accelerate earnings growth.
We anticipate mid single digit loan growth this year with an acceleration to better loan growth in 2020.2 as we make progress adding veteran bankers to our team.
I would now like to turn the call over to Steve.
Thank you Corey starting on slide 10, net interest income was $29.6 million for the second quarter of 2021 as compared to $29.5 million for the first quarter of 2021 and $34 million for the second quarter of 2020.
The decrease.
Kris since the second quarter of 2020 was due to a decline of 9 basis points in loan rates, partially offset by a decrease of 16 basis points and the cost of interest bearing deposits.
During the second quarter of 2021, we recognized $1.9 million in P. P. P related SBA fee income.
As an adjustment to interest income.
Which included accelerated income on P. P P loans forgiven by the SBA during the quarter.
At the end of the second quarter, there was $4.6 million in unrecognized deferred P. P. P related SBA fees. The majority of which are expected to be recognized as P. P. P loans continue.
To be forgiven by the SBA over the next several quarters.
Our net interest margin decreased to 3 point for 2% in the second quarter of 2021 as compared to 3.52% in the first quarter for 'twenty 'twenty 1.
Our non P. P. P loan rates declined 2 basis points as rate pressure on.
1 portfolio moderated.
Additionally, our margin declined approximately 12 basis points from the continued growth in average deposits centers added to our excess liquidity.
Our average cost of deposits declined 2 basis points to 27 basis points in the second quarter of 2021 as compared to 29 basis.
<unk> points in the first quarter of 2021 and declined from 39 basis points in the second quarter of 2020.
Continuing on slide 11 deposits held steady in the second quarter of 2021 at $3.16 billion and increased $2.9 million as compared to the first quarter of 2020.
Our deposit balances grew through mid June, but then declined as many of our customers made tax payments some of which had been extended from April 15th.
We ended the second quarter of 2021 with total noninterest bearing deposits of approximately $1 billion or 31, 6% of total deposits.
Turning to.
12.
Our nonperforming assets to total assets ratio declined 5 basis points to 37 basis points in the second quarter of 2021 as compared to 42 basis points in the first quarter of 2021.
As Curtis touched on the robust, Texas economy is providing a tailwind for our customers and is leading.
Slide positive credit migrations in several areas of our loan portfolio.
At quarter end total active loan modifications attributed to the COVID-19 pandemic for 36 points point $6 million or 1.6% of our loan portfolio, which is down from $46.9 million or 2.1% of aren't alone.
The portfolio at the end of the first quarter of 2021.
Approximately 96% of our active modified loans at quarter end are in our hotel portfolio, where we continue to experience improving fundamentals.
Overall, we continue to believe that our loan portfolio remains well reserved.
Loan portfolio to total loans was 1.87% at June 30, 2021 which is a decline of 14 basis points from the first quarter of 'twenty 'twenty 1.
Looking forward, we continue to believe that the reserves that we have built to help guard against an uncertain outlook are appropriate and we will continue to evaluate.
Our H&R reserve in the coming quarters.
Giving ahead to slide 15 for now.
Noninterest expense was $36.8 million in the second quarter of 2021 as compared to $37.1 million in the first quarter of 'twenty 'twenty 1.
This decrease was primarily due to a decline in personnel salary and.
And commission expense following our lower mortgage production, partially offset by increases in marketing and business development expenses Bank card expenses and other noninterest expenses.
As Curtis touched on we are investing to optimize our marketing as well as move our I T infrastructure to the cloud, which will modestly add to our quarterly expense run.
Run rate starting in the second half of 'twenty 'twenty 1.
We are also experiencing an increase in personnel expenses as we add bankers across our markets that said, we expect to deliver a strong return on the marketing spend and our investments to grow our loan portfolio.
Our efficiency ratio was 75% in the second quarter.
21, as compared to 65, 8% in the first quarter of 2021 and 63, 3% in the year ago second quarter.
This increase in the efficiency ratio is a direct result of decreased volume and tighter gain on sale margins in our mortgage origination business.
Skipping ahead to slide 17.
For a totally remain well capitalized with tangible common equity to tangible assets of 9.98% at the end of the second quarter of 2021 compared to $9.3 9% at the end of the first quarter of 2021 and $8.6 6% in the second quarter of 2020.
I would now like to turn the call back to Curtis for.
<unk> remarks.
Thank you Steve.
I am very proud of our accomplishments I'm, even more excited about the future for South plains.
We are attracting experienced bankers, who fit our culture and are poised to drive results as they excel in their new positions over the next 2 years, we will dramatically expand our lending.
<unk> team, which we believe will lead to improved loan growth margins and earnings as our excess liquidities repositioned into attractive loans.
The plans that we have put in place for firmly set us on a path for growth, which will ultimately benefit all of our stakeholders I would like to conclude by thanking all of our employees for their hard.
For conclusion.
And for those on the call. Thank you for your time today operator, please open the line for any questions.
And at this time, we will be conducting a question and answer session. If you'd like to ask a question. Please press star 1 on your telephone keypad, a confirmation tone will indicate your line.
As in the question queue, you may price start to feel like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before Christmas Darkies 1 moment, please while we poll for questions.
Okay.
Yeah.
First.
Question is from Brad Milsap with Piper Sandler. Please proceed with your question.
Hey, good afternoon guys.
Hi, good afternoon.
Yeah. It looks like you guys had a nice quarter I, just maybe wanted to start on the on the loan yields obviously day.
They they stayed relatively.
A relatively flat linked quarter I think last time that we spoke you were talking about you know new loans coming on you know maybe in the low fours I'm just sort of can you guys talk about anything that you know might not be recurring in the quarter to kind of help prop those up or are you seeing you know loans come on.
At higher rates to where you think those can you know maybe maybe hanging there as you as you continue to grow the loan portfolio.
Yeah, Brad this is Dave there there really wasn't anything significant extra in the quarter. We we are we are seeing as we talked about last quarter. Some of these newer loans that are coming on.
At a little bit lower lower yield than we probably saw that maybe in.
And in June with some of the numbers that are being put on so yes, I would look for there to be a little bit.
So a little bit more compression there on the loan side.
And as some of the older.
How old are existing.
Loans that are at the higher rates and those continue to pay down.
This is Corey that I think we're still getting some pretty good yields on a lot of the loans in the portfolio. I mean, we're not it's I mean, there's some that were having to kind of get down there on price, but we're not making that as a whole that we're having to do that.
Okay.
Got it and then just just on loan growth in General partners I think you said that.
You hope to kind of hit mid single digit growth. This year are you talking about on the entire portfolio or gummy, because you're essentially already passed that point you know on that on the H M. By book just kind of curious you know it makes you kind of what.
You're referring to there in terms of cash.
Your loan growth guidance that you said you wanted to replace at least all of the P. P. P loans that you have remaining is that is that correct.
Yes, that's really what we're doing because as you know we're continuing to say they are they are dropping the balances on the pizza pay side and.
We go out there and its strength, we're feeling better about it debt that we may be able to hit the mid single digit are looking across the entire portfolio I, even taking into account for those PPP loans Runoffs are where we're getting some opportunities you have to add some oh, yeah slightly larger credits some of the folks we brought.
Arc is lenders are have good relationships that are bringing in some.
20 to 25, even 30 million dollar loans possibilities out there and and where we're getting her we can execute on some of those so I do think that debt were gonna see some very reasonable loan growth for now and through the balance of the year.
Non born and as you think out maybe into 'twenty 'twenty, 2 I mean with the folks that <unk> hired thus far I mean do you think you're in a position to sort of you know accelerate above you know kind of what's been historically you know this kind of mid single digit rate debt that you've guided to.
We think so.
It's still a little early to tell but you know when we bring.
Some of these folks on and we've got literally some hiring taking place as we speak today.
That it was like a few months for them to get some of their relationships and to get a loan opportunities to get them to the table get them underwrite them and get them funded so 'twenty 'twenty 2 it's looking pretty good.
Internally, we're talking about getting a better than mid single digit loan growth in 2022.
Obviously, that's a that's not a guarantee but given the folks we're bringing on board and the relationships. They have we think that's doable.
This is Corey what other things we've talked about as we hit our goals for.
It's in process.
Jim.
I mean, we're extremely involved in that for hiring process, making sure that we bring the right ones to come on from a cultural perspective, but we're by no means just starting this process, we're very well mature into it and that's why we think it will be able to see some of the result that Curtis is thought to that.
Okay, Great I'll hop back in queue. Thank you.
And our next question is from Brady Gailey with K B W.
See with your question.
Hey, Thank you good afternoon guys.
Hey are you operating day.
When adding taking the lender.
Base.
From 60 to 80, that's let's say.
It's a big move, but maybe just talk about have you hired any of those new.
Incremental 20 lenders, yet and then just talk about.
Are these all coming from geographies that you're already in.
R.
Or are they new geos, new geographies and you know what what lender.
Or are you looking for C&I CRE, just any additional color on the plan there.
So Brady this is Cory so I mean.
But when you look at it from the discussion from going from 60 to 80, well, we're well into that.
That so I mean, I would say other of the increase.
How's that we're looking at doing 40, nearly 50% into that process. So I mean.
And we're hiring and markets that we're already in we're by no means went into new geography that we don't nothing about we're looking for relationship lenders Yeah, I don't know at what point do you fell out of.
For Q while ago, when we were when Brad had his question, but I don't know if you're able to hear but 1 of the things that I mean.
For us to hire it's a big process and not that we make it congressman but we make it thorough and we've got to make sure. These are cultural fits for people that are bringing relationships that debt or the type of customers that we want to do I mean theory.
Problem with C&I is good I mean, we're kind of balanced on construction, but I mean work.
We're definitely looking for a lot of real estate and we like that we if as Curtis mentioned there is there's some opportunities out there on the energy side, but it's it's very measured as we go through that we're not I mean, we were not.
We have no becoming energy bank, we but we think that we have the talent to do some energy loans that makes sense. But this is you know we're definitely not just trying to start out and decided we're going to go hire some lenders. This is something that where we put a lot of thought into and make sure that the growth that we can do from this point, we know we're going to spend money, but we think.
Not tried turns that are going to come with it will far outweigh what we're trying to do right now.
We're already seeing the results I mean, that's why I mean, what's what we're meeting and exceeding in some of the projections that we had.
Kind of like we're seeing all across the country, Oh that'd be for just changing jobs.
I dunno blame it on COVID-19 or whatever but of course, we've also seen as you guys.
Thank you.
Some.
Change of upheaval, and just M&A activity happening in our Texas markets and were seeing some opportunities for some of those lenders who were pretty happy with the bank favorite with but now it's not the same bank anymore, and so where we're seeing opportunities to work with other people and again my career has been saying.
Guys can I start this yesterday.
We're just now really talking about it because we're seeing some of the results we're getting those hires in place and that's what we really feel good about and we do that I'm very carefully our senior management has always involved in every 1 of the hires.
And it's just it's growing the team the way we think.
We didn't have to have good sustainability and maintain our conservative culture.
When you look at the expense impact when youre, bringing on some new lenders you also talked about the yeah, a couple of technology things.
We can put a little upward pressure on expenses, how do you think about you know.
What level of expense creep will be half of next year or so.
Yeah Brady to Steve.
We kind of look at it that it could add up to.
2.2% to 3% to the.
Annual non interest expense number.
That run rate starting in Q3 now all of that wont hit immediately in Q3, but that will.
Over the next several several quarters.
Into next year.
And obviously, that's going to exclude kind of some of the.
Fluctuations, we've got on the mortgage side as their operations whenever they slow or ramped back up for whatever happens as that number changes a little bit, but that's that's kind of how we're looking at it right now but for this.
Corey but at the same time, we're spending some money to go out there and help us grow the bank and are in a good safe fashion.
We're also very conscientious of the of the expense side of it and other areas and trying to cut back everywhere possible to try to offset this as much as we can.
Specifically on the marketing area.
Of course, we're going to be Frontloaded with some other development costs and other things are moving to digital marketing.
Much heavier digital marketing.
But over time realistically, we should spin fewer marketing dollars as we try to spend less in mass media areas. We just think that's the that's the trend to follow.
Because we definitely can see the effectiveness of it when we can target our customers and prospective customers out there and make a great presentation to them.
They are actually interest sedan as opposed to just spending money buying a spice some newspapers in time all day these patients and keep them on we've talked about this on every call. We've had we've talked about our infrastructure that we built this is where we get to actually go out there and I mean, we've always said we know we have to add production, but back office is.
For <unk> I mean, we are able to handle the growth without incrementally having to add additional expense to come along with it.
Got it that's great to hear thanks, guys.
Thank you.
And we have reached the end of your question and answer session I will now turn the call over to management.
Intact closing remarks.
This is Curtis Griffith again, we thank everybody for participating in the call today.
And for your involvement with South Plains financial we feel very very good about our direction for the company for.
For the the way that we have survived through the pandemic months.
And the prospects for head emphasis the economy rebounds out there as we've been talking about we are doing some investment and lending talent and technology. We think both of those are going to have a really great rates of return for us as we move into the future.
We're always open to a great M&A opportunities and we do believe that's.
Going to be a continuing thing here in the state of Texas, especially over the next several months, but we also know that the quickest insurers for return on.
The investment is through some conservative for organic growth and that's what we're setting out today with the team that we're putting in place and I think youre going to see some great results over the next several months.
So thanks, everybody for being with US today and look forward to talking to you next quarter.
And this concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.
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