Q4 2021 CBTX Inc Earnings Call
Speaker 3: Good day and thank you for standing by. Welcome to the Community Bank of Texas 4th quarter 2021 earnings conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need a press start one on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star then zero. I would now like to hand the conference over to your host today, Justin Long, general counsel. Please go ahead.
Hey, Dan. Thank you for standing by welcome to the community Bank of Texas Fourth quarter 2021 earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone. Please be advised today's conference may be.
Recorded if you require any further assistance. Please press Star then zero I would now like to hand, the conference over to your host today, Justin Long General Counsel. Please go ahead.
Thank you good morning, I'm, Justin long the general counsel of CTX.
Speaker 2: Thank you. Good morning. I'm Justin Long, the general counsel of CBTX.
Speaker 2: Our management team would like to welcome you to the CBTX Inc. earnings call for the fourth quarter of 2021. We appreciate you joining us. We issued our earnings press release yesterday afternoon, a copy of which is available on our website, along with a slide presentation that we will refer to during this presentation.
Our management team would like to welcome you to the <unk>, Inc earnings call for the fourth quarter of 2021. We appreciate you joining us we issued our earnings press release yesterday afternoon, a copy of which is available on our website along with a slide presentation that we will refer to during this presentation.
Before we begin I'd like to remind you that during this presentation. We may make forward looking statements regarding future events or financial performance of our business prospects.
Speaker 2: Before we begin, I'd like to remind you that during this presentation we may make for looking statements regarding future events, our financial performance, or our business process.
Speaker 2: Forward-looking statements are subject to risks and uncertainties that could cause actual results to different materials.
Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially.
Speaker 2: Additional information concerning factors that could cause actual results to differ is available in our earnings relief.
Additional information concerning factors that could cause actual results to differ is available in our earnings release and.
Speaker 2: And in the risk factor section of our annual report on form 10K, our quarterly reports on form 10Q, and our other filings with the SEC, which can all be accessed on our Investor Relations website at ir.cvtx.nc.com.
And in the risk factors section of our annual report on Form 10-K , our quarterly reports on Form 10-Q , and our other filings with the SEC, which can all be accessed on our Investor Relations website.
IR Dot CB, TX IMC dot com.
Speaker 2: Any forward-looking statements are made only as of the date of this call, and we assume no obligation to update any such statement.
Any forward looking statements are made only as of the date of this call and we assume no obligation to update any such statements.
Speaker 2: You should also be aware that during this call we will reference certain non-GAAP financial information. A reconciliation of these financial measures to the most directly comparable GAAP financial measures is included in our earnings release and investor presentation.
You should also be aware that during this call we will reference certain non-GAAP financial information a reconciliation of these financial measures to the most directly comparable GAAP financial measures is included in our earnings release and Investor presentation.
Speaker 2: I'm joined this morning by Robert R. Franklin, Jr., our chairman, president and CEO , Ted Pigeot, our chief financial officer, Joe West, our chief credit officer, and Joseph McMillan, our controller. At the end of their remarks, we'll open the call to questions.
I'm joined this morning by Robert Our Franklin Junior, our Chairman President and CEO Ted.
<unk> target, our Chief Financial Officer, Joe West, Our Chief Credit Officer, and Joseph Mcmullan, Our controller at the end of their remarks, we'll open the call to questions.
Speaker 2: With that, I'll turn it over to our Chairman, President and CEO Bob Frank.
With that I'll turn it over to our chairman President and CEO Bob Franklin.
Thank you Justin.
Speaker 4: Thank you, Justin. Welcome to the earnings call for CBTX, Inc. for the fourth quarter of 2021.
Welcome to the earnings call for CVT Acts, Inc. For the fourth quarter of 2021.
Speaker 4: We are pleased to present our fourth quarter results of an event fall 2021. The first half of the year was marked by caution.
We are pleased to present, our fourth quarter results of an eventful 2021.
The first half of the year was marked by caution.
Speaker 4: But as we move to the second half of the year, we saw increasing optimism as the country appeared to be better able to deal with the impact of the pandemic, which allowed us to better assess the continuing effects on our team and our customers.
But as we move to the second half of the year, we saw increasing optimism as the country appeared to be better able to deal with the impact of the pandemic, which allowed us to better assess the continuing effects on our team and our customers.
Speaker 4: As the year progressed, the economic environment transitioned from a heavily COVID impacted economy to a more stable and recovering economy.
As the year progressed, the economic environment transitioned from a heavily COVID-19 impacted economy to a more stable and recovering economy.
Speaker 4: Our Texas economy provided opportunities and showed its resilience, even with the emergence of the Yomacron variant during the fourth quarter. Over the second half of the year,
Our Texas economy provided opportunities and showed its resilience even in the with the emergence of the Yamal Kron variant during the fourth quarter.
Over the second half of the year the economic.
Emmick environment transitioned showing signs of recovery given the opportunity to have more face to face interaction with our customers and our prospects. Our team began to build back our pipeline and show loan growth.
Speaker 4: showing signs of recovery. Given the opportunity to have more face-to-face interaction with our customers and our prospects, our team began to build back our pipeline and show loan growth.
Speaker 4: The calling efforts of the third quarter produced good loans that were booked into the fourth quarter and solid relationship driven to positive.
Calling efforts of the third quarter produce good loans that were booked into the fourth quarter and solid.
Relationship driven deposits.
Speaker 4: This team effort provides us good momentum as we move into 2022.
This team effort provides us good momentum as we move into 2022.
Speaker 4: During the fourth quarter, we were proud to announce that we had found an excellent partner in Allegiance Bank.
During the fourth quarter, we were proud to announce that we had found an excellent partner and allegiance bank.
Speaker 4: and that we would combine an emerger of equals transaction to close in the first half of 2022.
And that we would combine in a merger of equals transaction.
If I had to close in the first half of 2022.
Speaker 4: We have filed the regulatory applications and our teams are working together, identifying ways to build a better bank together.
We have filed the regulatory applications and our teams are working together identifying ways to build a better bank together.
As we work together towards closing we continue to be very excited about the opportunities that our combined organization will have in the future.
Speaker 4: As we work together towards closing, we continue to be very excited about the opportunities that our combined organization will have in the future. It's renewable energy there.
Additionally.
Speaker 4: We settled and ended the investigation by the financial institutional fencing and the order that we had with the OCC during the fourth quarter.
We settled and ended.
Investigation by the financial institutional Vince.
And the order and the order that we had with the OCC during the fourth quarter.
We're pleased to have concluded this chapter and.
Speaker 4: We're pleased to have concluded this chapter and we believe the BSA program stands ready to be a leader for our merger partner and ready for our increase in size and scale.
And we believe the BSA program stands ready to be a leader for our merger partner and ready for our increase in size and scale.
Our fourth quarter financial results results reflect several one time charges, reflecting the settlements with the regulatory agencies and the cost and some of the cost associated with the actions we have taken in connection with the pending merger Ted will speak more specifically to our financial results.
Speaker 4: Our fourth quarter financial results reflect several one-time charges, reflecting the settlements with the regulatory agencies, and some of the costs associated with the actions we have taken in connection with the pending merger. Ted will speak more specifically to our panelists.
Speaker 4: Overall, we are excited about 2022 and the opportunities that will provide. We have liquidity, we have capital, we have an asset sensitive balance sheet.
Overall, we are excited about 2022 and the opportunities that will provide we.
Have liquidity, we have capital we have an asset sensitive balance sheet.
That will should allow us to succeed in our Texas markets, which continue to do well.
Speaker 4: that will should allow us to succeed in our Texas markets, which continue to do well.
Speaker 4: Now I'll turn this over to Ted Pagan, our Chief Financial Officer.
Now I'll turn this over to Ted <unk>, our Chief Financial Officer.
Thank you Bob.
Speaker 4: Certain financial information for the fourth quarter, prepared.
Certain financial information for the fourth quarter prior periods.
Speaker 4: again slide five of the investor presentation.
Begins on slide five of the Investor presentation.
Speaker 4: For the fourth quarter of 2021, the company reported a net loss of $545,000 or two cents per diluted share. This earnings were impacted by the cost.
For the fourth quarter of 2021, the company reported a net loss of $545000 or <unk> <unk> per diluted share as earnings were impacted by the costs.
The settlement with the regulatory agencies and the costs associated with the pending merger.
Speaker 4: settlement with the regulatory agencies and the costs associated with the pending merger. Net income for the
Net income for the year ended December 31.
Speaker 4: 2021 was 35.6 million.
2021 was $35 6 million.
Okay.
Speaker 4: $1.45 per dollar this share. Compared to 26 million or 1.1. the
$1 45 per diluted share compared to $26 million.
One.
One.
Good evening.
Speaker 4: A dollar in six cents per diluted share for the year ended in December 31, 2020.
$1.06 per diluted share for the year ended December 31 2020.
Now, we'll move to the fourth quarter.
Speaker 4: Now we'll move to the fourth quarter results.
<unk> net income net interest income for the fourth quarter 2000, 2021 decreased to $38 million from the third quarter.
Speaker 4: That income may exist in come for the fourth quarter, 2021, decreased to $30.8 million from the third quarter, 2021.
'twenty one.
Speaker 4: and that interest margin on a tax equivalent basis.
Net interest margin on tax.
<unk> equivalent basis.
Decreased 15 basis points to three seven.
Speaker 4: decreased 15 basis points to 3.7.
Percent.
Third quarter 2021.
Speaker 4: The loan yield decreased 13 basis wants to 4.39% from the third quarter of cost.
The loan yield decreased 13 basis points to four <unk>.
Three 9%.
The third quarter.
Cost of interest bearing liabilities Phil.
Speaker 4: 24 basis points for the fourth quarter, 20 to 21.
24 basis points for the fourth quarter 2000 22021.
The provision for credit losses was a recapture of $1 2 million.
Speaker 4: The provision for credit losses was a recapture of 1.2 million for fourth quarter, 2021. Primarily due to qualitative.
For fourth quarter 2021.
Primarily due to qualitative factor adjustments associated with <unk>.
Speaker 4: associated with continued improvements in the local.
Continued improvement in the local east.
Economy.
Speaker 4: 9 interesting control of fourth quarter decreased. 4 2 4.1 million dollars from third quarter, primarily due to a decrease.
Noninterest income for the fourth quarter decreased four to $4 $1 million from third quarter, primarily due to a decrease in earnings on bank owned life insurance due to related gains of $1 $9 million realized in the third quarter.
Speaker 4: Earnings on bank-owned life insurance due to related gains of $1.9 million realized in the third quarter.
Speaker 4: Net gains on sales of assets increased $550,000.
Net gains on sales of assets increased $550000.
<unk>.
Speaker 4: Non-interest expense for the fourth quarter increased $10.5 million from third quarter, primarily to
Noninterest expense for the fourth quarter increased $10 $5 million from third quarter primarily to.
Speaker 4: Regulatory fees increasing 7.9 million, probably early because you position the civil money penalties, totaling $8 million in settlement of BSA AML compliance matter.
Regulatory fees, increasing seven 9 million, primarily due to the imposition of civil money penalties totaling $8 million in settlement of BSA AML comply.
Compliance matters.
Speaker 4: Other expenses increase $2 million to $3.3 million, primarily due to $1.3 million in the expenses associated with the pending merger with the lia-illeged bank shares. In.
Other expenses increased $2 million to $3 3 million, primarily due to <unk>.
One three.
$3 million.
<unk> is associated with the pending merger with alliance allegiance Bancshares, Inc.
Speaker 4: Sower is an employee benefits increased 1.6 million primarily due to an increase.
Salaries and employee benefits increased $1 6 million, primarily due to an increase.
Speaker 4: of $894,000 in officer bonuses.
$894000 in pumps for bonuses.
Speaker 4: and $545,000 in off-stallery.
And $545000.
Salaries.
Speaker 4: Income expense was $1.8 million for the fourth quarter.
Income expense was $1 8 million for the fourth quarter.
Speaker 4: And the effective tax rate was 142% for four.
And the effective tax rate was 142% for fourth quarter.
Speaker 4: because the payments made in conjunction with the resolution of the BSA AML compliance matters are not
Because the payments made in conjunction with the resolution of the BSA.
Compliance matters.
Are not tax deductible.
Speaker 4: We didn't valid sheet total assets at December 31, 2021.
Balance sheet total assets.
At December 31, 2000.
'twenty one.
Speaker 4: increase $276.9 million compared to September 30th, 2021.
Increased $276 9 million compared to September 32021.
Speaker 4: It was driven by growth in loans of $259 million and growth in securities of $65.5 million.
And it was driven by growth in loans of $259 million and growth in securities of $65 $5 million.
Loans, excluding loans held for sale at December 31.
Speaker 4: Loans, excluding loans held for sale at December 31.
Speaker 4: 2020 increased 301, 307.1 million.
2020 increased 301, $307 1 million.
From the third quarter compared to September 21.
Speaker 4: from the third quarter, compared to September 21.
Loans, which exclude PPP loans increased 12, 2% in the fourth quarter.
Deposits at December 31, 21.
Speaker 4: increased $299.6 million compared to September 30, 2021. Compared to December 31, 2020, deposits are up 16%.
Increased $299 6 million compared to September 32021.
Compared to December 31 'twenty.
Deposits were up 16%.
The total cost of deposits.
Was 13.
Basis points for the fourth quarter.
Speaker 4: The company maintained strong capital ratios as the total risk capital ratio was 16.42
The company maintains strong capital ratios is the total risk capital ratio was $16 42.
Speaker 4: The CET capital ratio was 15.31, and the Tier 1 leverage ratio was 11.22% at December 31, 2021.
The CET capital ratio was $15 three one and the tier one leverage ratio was 11, 22% at December 31 2021.
Nonperforming assets totaled.
Speaker 4: 50 basis points on total SS at December 31, 2021.
50 basis points on total SaaS December 31 2021.
The allowance for credit losses for.
Speaker 4: for loans was $31.3 million, or 1.09% of total loans at December 31.
For loans was $31 3 million or one 9% of total loans at December 31.
Speaker 4: 2021. The ACL decreased during the fourth quarter.
2021.
<unk> decreased during the fourth quarter.
Primarily due to the recapture of 109 901000.
Speaker 4: primarily due to the recapture of 109,901,000 in the ACL for loans and...
ACL in the ACL for loans.
And recapture of 306.
Speaker 4: dollars for unfunded commitments due to the qualitative factor adjustments associated with continued improvements in the local economy.
$1000 for unfunded commitments due to the qualitative factor adjustments associated with the continued improvements in the local economy.
Covers were $38 $38000 for fourth quarter compared to 82000 for third quarter.
Now I'll turn it over to Joe West.
Speaker 2: Thank you, Ted. I'd like to speak a bit to our loan portfolio, beginning on slide nine from the investor presentation. For the fourth quarter, our loans, excluding loans held for sale, were up at $2.84 billion versus $2.58 billion at the end of the third quarter of 2021, an increase of approximately $260 million.
Thank you Ted.
I'd like to speak a bit to our loan portfolio beginning on slide nine from the Investor presentation for the fourth quarter, our loans, excluding loans held for sale were up.
At 284 billion versus $2 five $8 billion at the end of the third quarter of 2021, an increase of approximately $260 million.
Speaker 4: Our loan growth was due in part to our organic growth, and much of the growth came in the second half of the fourth quarter, with our booking of $141 million of loans in December of 2021. We also purchased approximately $81.4 million of one- to four-family mortgage loans in the fourth quarter.
Our loan growth was due in part to our organic growth and much of the growth came in the second half of the fourth quarter with our booking of $141 million of loans in December of 2021.
So purchased approximately $81 4 million of wonderful family mortgage loans in the fourth quarter.
Speaker 5: Our loan deferrals related to COVID stayed relatively constant as we had seven loans with principal totaling $18.5 million on deferral at the end of the fourth quarter.
Our loan deferrals related to Covid stayed relatively constant as we had seven loans with principal totaling $18 5 million on deferral at the end of the fourth quarter.
For the quarter C&I, including the effect of PPP payoffs was up by approximately $38 1 million or six one achieved six 4% compared to Q3.
C&I increased 87 6 million net of PPP payoffs CRE.
CRE was up.
Speaker 5: 62.8 million, 6.1% quarter of a quarter.
$62 8 million six 1% quarter over quarter.
Construction and development was up $67 2 million or 17% compared to the third quarter, one to four family was up $73 1 million.
Speaker 5: Construction and development was up 67.2 million or 17% compared to the third quarter. One to four family was up 73.1 million.
Speaker 5: 35.8%. The multifamily was up 500,000.
35, 8% and multifamily was up 500000.
Speaker 5: Slide 10 sets forth the components of our commercial loans and our total commercial loans were up in the fourth quarter to $2.47 billion versus $2.31 billion at the end of the third quarter, including our PPT loans.
Slide 10 sets forth the components of our commercial loans and our total commercial loans were up in the fourth quarter to 247 billion versus $2 31 billion at the end of the third quarter, including our PPP loans.
Slide 11 also sets forth, our oil and gas exposure, including how we quantify.
Speaker 5: Slide 11 also sets forth our oil and gas exposure, including how we quantify our direct and indirect exposure. Our direct and indirect oil and gas loans for the third quarter increased to $204.9 million compared with the end of the third quarter. Slide 12 sets forth information about our PPP loans. During the third quarter, our net PPP loans decreased to $52.8 million, and we received $49.5 million related to forgiveness or payments from customers.
Our direct and indirect exposure, our direct or indirect oil and gas loans for the third quarter increased to $204 9 million compared with the end of the third quarter Slide 12 sets forth information about our PPP loans during the third quarter, our net PPP loans decreased to $52 8 million and we received 40.
$9 5 million related to forgiveness for payments from customers.
The table at the bottom of slide nine sets forth, our average yield on our portfolio our average yield on our PPP loans and the average yield on our loan portfolio were checking out with PPP loans swap.
Speaker 5: The table at the bottom of slide 9 sets forth our average yield on our portfolio, our average yield on our PPP loans, and the average yield on our loan portfolio when taking out the PPP loan.
Speaker 5: Slide 13 sets forth information about our allowance for credit losses. As Ted noted, our allowance for credit losses to loans was 1.09% at December 31, 2021.
Slide 13 sets forth information about our allowance for credit losses.
Ted noted our allowance for credit losses to loans was 1.09% at December 31 2021.
Speaker 5: Turning to slide 14, our non-performing assets remain low during the fourth quarter, and our credit quality remains strong.
Turning to slide 14, our nonperforming assets remained low during the fourth quarter and our credit quality remains strong.
Speaker 5: So that 14 also shows information regarding our non-performing.
Slide 14 also shows information regarding our nonperforming.
Speaker 5: access to our total assets, which was 0.50% as of 1231.20 more.
Assets for our total assets.
Which was 0.5.
Zero percent as of 12 31 'twenty one.
Speaker 5: compared to 0.49% as of September 30, 2021.
Compared to 0.49% as of September 32021.
Speaker 5: As with the second quarter, our recoveries during the quarter exceeded our charge loss, resulting in a net recovery of $38,000. With that, I'll turn it back over to Bob.
As with the second quarter, our recoveries during the quarter exceeded our charge offs, resulting in a net recovery of 48000.
With that I'll turn it back over to Bob Franklin.
Speaker 2: Thank you, Joe. With that, we're ready to open it up for questions.
Thanks, Joe.
With that.
We're ready to open it up for questions.
Yes.
Speaker 3: Thank you. If you have a question at this time, please press star then 1 on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. And our first question comes from the line of Charles West with Piper Sandler. Your line is open. Please go ahead. Good morning, everyone.
Thank you and you have a question at this time. Please press Star then one on your Touchtone telephone question has been answered or you wish to remove yourself from the queue. Please press the pound key.
Our first question comes from the line of Charles <unk> with Piper Sandler. Your line is open. Please go ahead.
Good morning, everyone.
Good morning.
So I just wanted to start on the loan growth it was great to see the positive momentum there.
Speaker 6: So I just want to start on the long growth. It was great to see the positive moment in there.
Speaker 6: He'd seek more to what drove that, with it line utilization or something else, and then how did production compare to recent quarters?
Can you speak more to what drove that was it in line utilization or something else and then how that production compared to recent quarters.
Speaker 6: What was the last part of that and then how did the production compared to recent quarters?
What was the last part of that and then how did the protection compared to recent quarters.
Speaker 5: Well, it certainly was better than what we had seen for the first three quarters of the year. But it was across the board on various things. It really wasn't attributed to line use as it was more new production. We saw some good CRE opportunities and we've taken advantage of.
Well it certainly was better than what we had seen for the first three quarters of the year, but it's it's.
It was across the board on various things.
It really wasn't attributed to line uses it was more new production.
We saw some good CRE opportunities and we've taken advantage of.
And.
Speaker 5: some good C&I opportunities, so it's kind of across the board, really.
Some good C&I opportunities.
Kind of across the board really.
Speaker 5: Yeah, I would say that we were, we've been looking at new loans in our committees and discussing them with our lenders.
Yes, I would say that we were.
We've been looking at.
New loans.
And our committees and are discussing them with our lenders.
Speaker 5: you know, really starting in the second half of the year, it was getting the deals approved and closed.
Really starting in the second half of the year.
It was.
Getting a deal approved and closed.
Speaker 5: was slower than we would have liked. You know, we were feeling kind of, you know, Q3 was pretty flat, but we saw a lot of activity in the fourth quarter, especially accelerated toward the end of the year. And as Bob said, it was across the board.
It was slower than we would have liked.
We feel it's Kevin.
Q3 was pretty flat, but we saw a lot of activity in the fourth quarter, especially as especially accelerated towards the end of the year and as Bob said it was.
It was across the board we saw.
Speaker 5: you know, majority of it was in commercial real estate, but we also saw some good C&I growth as well.
Majority of it was in commercial real estate, but we also saw some.
Good C&I growth as well.
Speaker 5: we saw we saw our approved pipeline building through the through the third quarter and we could see where as these things got closed that the fourth quarter was going to be good and I think
We saw we saw our approved pipeline building through the through the third quarter and we could see where as these things Scott closed.
The fourth quarter was going to be good and I think we feel good about where we are heading into the first quarter, because we've got a good pipeline behind us and it's continuing to build so.
Speaker 7: We feel good about where we're heading into the first quarter because we've got a good pipeline behind us and it's continuing to build so We feel good about
We feel good about where loan growth is.
Okay, great that makes sense and then a follow up to that on the loan purchases what was the.
Speaker 6: Okay, great, that makes sense. And then a follow up to that on the loan purchases. What was the yield on these came there to not purchase? Is it something you find to do more than the future?
The yield on these compared to non purchased and is this something you plan to de Martin in the future.
Speaker 5: Yeah, the weighted average yield net to us on the purchase is 2.78.
The weighted average yield net to us on the purchase of $2 708.
But no.
<unk>.
Speaker 7: We will look at these things in the future. I don't know. We'll do a whole lot of it. It just hard to pens. We kind of, it was offset a little bit of the PPP runoff.
We will look at these things in the future I don't know that well do a whole lot of it is just hard depends we kind of.
It was offset a little bit of the PPP runoff.
Speaker 7: But we had the opportunity to buy a package at a decent yield, and we went ahead and did it. But I don't think it's something that we're normally going to do. Okay, great.
But.
We had the opportunity to buy a package at a decent yield and we went ahead and Dennis.
I don't think its something that normally going to do.
Okay, Great. That's all for me. Thank you.
Thank you.
Speaker 8: Thank you and again ladies and gentlemen if you have a question at this time please press star then one and our next question comes from the top line of Thomas Winger with Steven's ink. Your line is open please go ahead. Hey good morning everyone. Tomorrow. So just looking at expenses yet we saw that take up and salary to think you guys gave us a little bit of outlay between the increase in salaries and the bonuses. Can you give us an idea of a good run rate for expenses for 2022?
Thank you and again, ladies and gentlemen, if you have a question at this time. Please press Star then one and.
And our next question comes from the line of Thomas Windsor with Stephens, Inc. Your line is open. Please go ahead.
Hey, good morning, everyone.
Alright.
So just looking at expenses, we saw that tick up in salaries, you guys gave us a little bit of.
Outlay between the increase in salaries and bonuses can you give us some idea of a good run rate for expenses for 2022.
Yes, I think.
Speaker 7: Yeah, I think if you use somewhere around 25 million, it's going to be probably something.
If you used somewhere around $25 million is going to be.
Sure.
Probably something that.
Would work.
Speaker 7: It's gonna be a little boppy as we get towards our
It's going to be a little bumpy as we get towards our.
The combination with allegiance I think for <unk>.
Expenses associated with that will be all around that number but from.
Speaker 7: Expenses associated with that will be all around that number, but from a run rate standpoint...
From a run rate standpoint.
Speaker 7: on a normalized basis given where we are today, that's kind of what we're doing.
On a normalized basis, given where we are today, that's kind of that kind of works.
Speaker 8: That's great, thank you. And then with the MOE with ABTX, let's set the close in the second quarter. Can you give us any updates on the MOE and the conversion timeline?
That's great. Thank you and then with the Mou with <unk> set to close in the second quarter can you give us any updates on the MLB and the conversion timeline.
Speaker 7: Well, I don't think it's in our...
Well.
I don't think its in our in our.
I don't think we get to decide soon.
Speaker 7: I don't think we get the decide. So as soon as we get regulatory approval, we'll move to close and we've done what we can do as far as filing our documents.
Soon as soon as we get regulatory approval.
We will move to close and we've done what we can do as far as filing our documents.
Speaker 7: In the meantime, we're having great meetings with our partner, having good integration sessions and finding the right way to run this bank in the future as a combined organization. So we feel really good about what's going on in that regard. But from a timing standpoint, it's kind of taken out of our...
In the meantime.
We are having great meetings with our partner.
Having good integration sessions and finding the right way to to run this bank in the future as a combined organization. So we feel really good about what's going on in that regard.
But from a timing standpoint, it's kind of taken out of our.
Speaker 7: our realm, we'll have to rely on the regulators on when they get this thing approved.
A round we have to we.
We will have to rely on this the regulators on when they get this thing approved.
Speaker 8: Yep, yep, that sounds right. And then one final one from me, can you give us any color around the percent of the loan portfolio that's variable, and then how many of those variable rate loans are currently on their floor?
Yes that sounds about right and then one final one for me can you give us any color around the percent of the loan portfolio. That's variable and then how many of those variable rate loans are currently on their floor.
Speaker 5: Yeah, we've got, you know, only variable right side. It's a, you've got, hello, I'm looking at this for no reason. Well, about 50% really about them.
Yeah, we've got.
<unk>.
Variable rate side.
You've got Hello, Im looking at it with some numbers.
About 50% really about them.
Speaker 5: billion 440 is variable. And we think a good bit are sitting at the floor. We think we'll have something around, you know, 500 and
40% is variable.
And we think.
A good bit are sitting at the floor, we think we'll have something around 500.
Speaker 5: excuse me, $750 million, and that includes prime adjustable loans as well as any LIBOR pricing or SOFR pricing we have that can move with the first rate move. I mean, the LIBOR has already started to move up a little bit, but depending on when the Fed decides to do its first rate hike, we've got about $570 million that could move in the prime portfolio.
Excuse me 700.
$50 million debt that includes.
Includes prime adjustable loans as well as in the LIBOR pricing, where sulfur pricing we have.
That can move with the first rate move.
LIBOR has already started to move up a little bit but.
Depending on when the fed.
So I would do is first rate hike.
<unk> got about $5 70 that could move into the prime portfolio.
Alright Thats great.
Great guys. Thanks for answering my questions.
Speaker 9: Thank you very much.
Thank you very much.
Speaker 3: Thank you and I'm showing no further questions and I would like to turn the conference back over to Bob Franklin for any further remarks.
Thank you and I'm showing no further questions and I would like to turn the conference back over to Bob Franklin for any further remarks.
Well. Thank you very much I think we're very excited about 2022 I think.
Speaker 7: Well, thank you very much. I think we're very excited about 2022. I think Texas economy is good, and we see good opportunities out there. Our guys are doing a great job of building a pipeline, and we're very excited about the prospects that we have with our new merger partner, Allegiance Bank. So, with that, thank you for your attention today, and we appreciate you attending the call.
The Texas economy is good and we see good opportunities out there our guys are doing a great job of building pipeline and we're very excited about the prospects that we have with our new merger partner allegiance bank. So with that thank you for.
Your attention today and we appreciate you attending the call.
This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.
Speaker 3: This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone have a great day.
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Speaker 1: Really.
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