Q2 2022 South Plains Financial Inc Earnings Call
Good morning, ladies and gentlemen, and welcome to the South Plains Financial Inc. Second quarter 2022 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 Financial Officer, and Treasurer of South Plains financial.
Please go ahead Sir.
Thank you operator, and good morning, everyone. We appreciate your participation in our second quarter 2022 earnings Conference call with me here today are Curtis Griffith, our chairman and Chief Executive Officer, and Cory Newsome, our president three.
A replay of this call will be available on our website within two hours at the conclusion of the call until August five 2022. Additionally.
Additionally, a slide deck presentation to complement today's discussion is available on the news and events section of our website.
Before we begin 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 morning and on slide two of the slide deck presentation available on our website.
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 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 also be found in our earnings press release and on slide 22 of the slide deck presentation.
At this point I'll turn the call over to Curtis.
Thank you, Steve and good morning.
On today's call I will review the main drivers to our strong second quarter results highlighted by robust organic loan growth combined with stabilizing mortgage banking revenues, which taken together have increased the earnings power of South Plains as we look to the second half of the year.
Cory will then discuss our loan growth in more detail as we expand our commercial lending capabilities in our major markets of Dallas, Houston and El Paso.
Steve will then conclude with a more detailed review of our Q2 results.
Beginning on slide four we delivered net income of $15.9 billion or 88 cents per diluted common share for the second quarter of 2022, which compares to net income of $14.3 million or 78 cents per diluted common share in the first quarter of 2022.
And $13.7 million or 74 cents per diluted common share in the year ago second quarter.
Our second quarter 2022 results benefited from 25 cents per share of income received related to full blown credits for the recovery of interest income on previously charged off credit purchase discount principle recovery and prepayment penalties.
We also had to 11 cents per share from ESB I see investment income and an increase in the fair value of our mortgage servicing rights.
The total of these items was 28 cents per share net of tax as a reminder, our first quarter 2022 earnings included 28 cents per share net of tax of a positive fair value adjustment to our mortgage servicing rights and a negative provision for loan losses.
The strong earnings growth that we experienced in the second quarter was primarily driven by the 28% annualized increase in our loan portfolio.
The first quarter of 2022, as we continue to benefit from our newly hired commercial lenders who are building their loan portfolios more quickly than anticipated combined with our existing teams continued focus on organic growth.
As we enter the third quarter, we've largely completed our initial hiring plan, which we outlined a year ago and remain very pleased with our lenders initial success.
As Cory will discuss we have the infrastructure in place in our major markets of Dallas, Houston, and El Paso to support further expansion given the significant growth potential that we believe exists as we strive to redeploy our low cost deposits into higher yielding commercial loans.
Additionally, we believe that we have ample liquidity to fund our growth given our comfort running the bag like loan to deposit ratio in the mid to upper 80% range as compared to our 75, 3% right at the end of the second quarter.
This excess liquidity represents significant earnings potential as we continue to fund higher yielding loans over time.
Importantly, our second quarter results marked a clear inflection point as we believe that our mortgage banking revenues have largely moderated to more historical levels. As we have discussed on prior calls we have expected our mortgage revenues to bottom at 10% to 15% of total bank revenues overtime.
In the second quarter, our mortgage banking revenue, excluding the large MSR fair value adjustments was 14% of total bank revenue, which compares to 19% of total bank revenue.
In the first quarter of 2022, and 23% in the fourth quarter of 2021.
Given current mortgage Reits, we believe refinanced volumes have largely bottomed well demand for housing and construction remains robust given the strength of the Texas economy, which continues to enjoy strong in migration and job growth.
Looking to the second half of the year, we expect the financial benefits of our strong second quarter loan growth to continue to flow through to the bottom line as our mortgage revenues stabilize come back with our plans to continue to deploy our excess liquidity.
Taken together, we believe this will continue to improve the earnings power and value of South Plains, which we believe is not currently reflected in our share price.
Given our view that our shares are trading below intrinsic value, we increased the pace of our share repurchases through the second quarter of 2022, having repurchased approximately 257000 shares as compared to 106000 shares in the first quarter of 2022.
We will continue to strategically utilize our share repurchase plan, while steadily returning capital to our shareholders through our quarterly dividend as our board authorized a 12 cent per share dividend. This week, which is a one cent per share increase from the prior quarter's dividend.
This will be our 14th consecutive quarterly dividend to be paid on August 15th 2022 for shareholders of record on August 1st 2022.
To conclude we continue to experience healthy loan growth across our markets as the Texas economy continues to deliver employment and GDP growth above the national average.
While we expect activity to slow in the light of the continued uncertainty about future economic conditions due to the rising interest rate environment and persistent high inflation levels. We remain cautiously optimistic on the second half of the year as our loan pipelines remain healthy and our new lenders continue to have success.
Bringing quality credits to the bank.
This provides confidence and are meeting or exceeding our mid to high single digit loan growth guidance for the full year of 2022.
That said, we will not sacrifice credit quality for growth and will remain vigilant to ensure that we maintain our disciplined credit culture, which can also be seen in this quarter's results as our credit metrics continue to improve now let me turn the call over to Corey.
Thank you Curtis and good morning, everyone. It first touch on loans held for investment increased by $126 $9 million or 28% annualized compared to the first quarter of 'twenty 'twenty. Two that's outlined on slide slide five underlying loan demand was even stronger given the payoff with a $46 million relationship in the energy sector.
Which we discussed last quarter combined with a $21.3 million reduction in the P. P. P loans due to the SBA forgiveness of repayments.
Loan growth this quarter was primarily in commercial real estate commercial retail residential mortgage and consumer on it.
Excluding P. P P loans, our loan yields in the second quarter were $5 four 7%, excluding the large loan recoveries and prepayment penalties, which we benefited from in the second quarter, our loan yields were $4 seven 7%, which compares to $4 seven 4% in the first quarter of 2022.
We have made a deliberate decision to proactively perhaps new lines to account for a higher rate environment and the eventual rising funding cost to ensure we stay ahead of the market.
Trying to stay competitive.
Turning to slide six it is also important to highlight that we are a community retail bank and our smaller markets and primarily a commercial bank in our major markets of Dallas, Houston and El Paso.
Our strategy is to redeploy our excess liquidity consisting of low cost deposits from our community oriented markets and to our commercial markets.
We have added experienced commercial lenders, who share our culture and values.
Focus on developing long term customer relationships have done the right way.
Our loan growth this quarter is a validation of our strategy is our new commercial lenders has quickly grown their portfolios and are reaching break even ahead of our original expectation of six months on average.
Our seasoned bankers continue to deliver solid organic loan growth.
A good example of our commercial lending strategy as in Houston, where we have added a new market later in two experienced lenders over the last year. Our new team has quickly built their pipelines and started to generate meaningful business in the second quarter. Our Houston team grew their loan portfolio of approximately 122% compared to the end of the first quarter of 'twenty.
22, which was primarily in commercial real estate. Additionally, our new lenders. They are focused on developing long term customer relationships, which can be seen in the type of business. They are generating if they bring new relationships to south plains that includes deposits commercial loans.
Other surfaces like Treasury management overall, we grew total loans, 28% at our major markets of Dallas, Houston, and El Paso during the second quarter. The bond as can be seen on slide seven.
Another region that we continue to be very excited about is the Permian basin, given the commercial lending and deposit opportunities that we see in the region.
Well, it's taking time for us to install the right leaders and attract experienced lenders. We believe our team is now in a good position and starting to deliver results.
It can be seen in the regions underlying loan momentum during the second quarter. Despite the previously mentioned payoff of a large relationship that moved to a nonbank structure.
We continue to believe that we can double our loan portfolio in the Permian basin overtime, if we focus on developing private banking relationships, while also growing our C&I C&I loan portfolio.
Importantly, our building momentum in this market is tied much more to improved execution and the benefits of a stronger commodity environment.
We believe there is significant low hanging fruit within our current customer base as well as the opportunity to take market share.
Getting ahead to slide nine we also saw a healthy loan growth in our community markets across the South Plains region. If we continue to benefit from focused organic growth in various portfolios sectors. Our indirect auto loan portfolio increased by $48 billion to $284 million in the second quarter of 2022 as compared to.
The first quarter of 2022. This was due to continued strong demand for car loans and the addition of a few high quality auto dealerships to our customer base.
We've maintained a disciplined approach to underwriting is 78% of our indirect auto loan portfolio has a credit score of 690 or better.
This strong credit profile positions, the Portland portfolio for resilience across varying economic cycles.
Along those lines remaining disciplined in our credit is ingrained in our culture. It has been a focus of our recent hiring as we continued to add seasoned professionals from larger banks.
Our loan review team and underwriting staff. We've also implemented a loan approval process to include our regional presidents, which we believe has further improved our underwriting process.
Turning to our mortgage business on slide 10 mortgage loan originations decreased 12% to $207 million in the second quarter of 2022 as compared to the first quarter of 2022.
We continue to aggressively manage our business for profitability, having to reduce lenders and back office staff. This isn't a deliberate effort over the last year as mortgage volumes have steadily declined now to purity of bottom as Curtis noted.
Turning to slide 11, we generated $18 $8 million of noninterest income from the second quarter of 2022.
Compared to $23 $7 million in the first quarter of 2022.
The decrease was primarily due to lapping a dollar decrease in mortgage banking activities revenue.
For the second quarter of 2022 noninterest income was 34% of bank revenues, which is a decline from the 44% in the first quarter of 2022.
Mortgage banking revenues to get to a trough in the stabilized so while our noninterest income.
Have aggressively managed our mortgage business through this down cycle and believe that the headwinds that we face are now largely behind us which positions the bank for improved earnings growth looking to the second half of the year.
To conclude our organic growth strategy has been deliberate and focused as we add experienced commercial lenders and our major msas, where we have the infrastructure in place and can quickly scale, our msas represent large market opportunities for commercial loan growth as well as other services and we will continue to selectively add to our team to further build our presence in these.
While loan demand has remained robust we have experienced slight moderation as the federal reserve continues to raise their target benchmark interest rate.
We remain cautious but optimistic looking to the second half of the year as cash balance has remained healthy for both our business and consumer customers and we continue to see healthy cash levels go into new deals I would like for now I'll turn the call over to Steve.
Thank you Cory starting on slide 13, net interest income was $37 $1 million for the second quarter of 2022 as compared to $29 $9 million for the first quarter of 2022.
The increase since the first quarter was primarily due to $6 $1 million increase in loan interest income and $1 $6 million increase in interest income from securities and other interest earning assets.
As Curtis touched on we benefited from $4 $4 million large loan recoveries and prepayment penalties during the second quarter.
The remaining increase of $2 $8 million was a result of our loan growth liquidity redeployment and rising interest rates.
Looking forward, we continue to believe that we're well positioned for our net interest income benefit as we grow our loan portfolio and benefit from the anticipated rise in interest rates through the year.
During the second quarter of 2022, we recognized $898000 in P. P. P fee income as an adjustment to interest income, which included accelerated income on P. P. P loans forgiven by the SBA.
June 30, 2022 happening at $401000 remaining in deferred P. P. P fees. The majority of which are expected to be recognized as P. P. P loans continue to be forgiven by the SBA or repaid on over the next several quarters.
Our net interest margin calculated on a tax equivalent basis was 4.02% in the second quarter of 2022 as compared to 333% in the first quarter at 2022.
Excluding the $4 $4 million of large loan recoveries and prepayment penalties that we recognized in the second quarter.
Net interest margin was 3.54% up 21 basis points as compared to the first quarter.
This improvement was driven by our strong organic loan growth combined with the rising rate environment.
Our average cost of deposits was 27 basis points, an increase from 23 basis points in the first quarter.
The increase was primarily attributable to our intentional lag to increase our deposit rates as the federal reserve continues to raise their target benchmark interest rate.
Turning to slide 14, total deposits decreased by $24 $3 million $3 $43 billion.
As compared to the first quarter of 2022.
The decrease was primarily due to customers withdrawing deposits just make large tax payments during the quarter.
Importantly, we saw outflows early in the quarter with which stabilized and turned back to inflows as we move through the second quarter.
We also experienced a positive mix shift in our deposit basis noninterest bearing deposits increased to 34, 9% of total deposits as compared to 32, 8% in the first quarter of 2022.
Yeah.
Turning to slide 15, we continue to believe that our loan portfolio remains appropriately reserved and our allowance to total loans was 1.54% at June 32022, as compared to 1.62% at March 31 2022.
During the second quarter, we did not record a provision for loan loss as we continued to experience improving credit metrics and our loan portfolio as nonperforming assets to total assets declined to 20 basis points in the second quarter from 30 basis points in the first quarter 2022.
These improvements were offset by our loan growth during the quarter.
Additionally, we subsequently received the full pay off of an approximately $10 million classified hotel credit in July .
Which further improves the credit quality of our portfolio.
Nevertheless, there is continued uncertainty about future economic conditions due to the rising rate environment and persistent high inflation levels in.
An additional or reversal provisions for loan losses may be necessary in future periods.
Skipping ahead to slide 17, our noninterest expense was 36 point they were $1 million in the second quarter of 2022 as compared to $37 $9 million in the first quarter of 2022.
The decline was primarily due to a decrease of $1.3 million in commissions and related personnel expense and other variable mortgage expenses due to the contraction in loan originations in the mortgage market, partially offset by higher costs related to new hires in commercial lending and incentive based compensation.
Looking to the third quarter of 2022, we expect noninterest expense to be in line with to slightly better than the second quarter of 2022.
Moving ahead to slide 19, we remain well capitalized with tangible common equity to tangible assets of 859% at the end of the second quarter of 2022.
A decline from 9.11% at the end of the first quarter of 2022.
The decline was mainly driven by a $31 million change in the fair value of our available for sale securities and related fair value hedges net of tax.
Partially offset.
Net income after dividends paid at $14.0 million.
The decline in fair value of the Securities was a result of the rising interest rate environment book value per share decreased by $1 to $20.90 during the second quarter 2022.
Now I'll turn the call back to Curtis for concluding remarks.
Thank you Steve to conclude.
Our second quarter results represent an inflection point in our business as our lending team is driving strong organic loan growth, while our mortgage business has declined from historic highs the more traditional levels.
Looking forward, we believe the earnings power of South Plains is set to improve as our newly hired lenders drive commercial loan growth in our major markets, while our lenders in our community markets continue to add loans from both new and existing relationships.
Importantly, we have remained focused and disciplined on credit which positions the bank to weather storms that may occur as a result of the fed's tightening policy and the persistence of the inflationary environment in the United States.
I am very pleased with the success, we have achieved through the second quarter and filled with optimism for the future of South plains, given the many opportunities for growth that lie ahead.
I would like to thank our employees for their hard work and none of this would be possible without their commitment to the bank and our customers. Thank you again for your time today operator, please open the line for any questions.
And at this time of Luke conducting a question and answer session.
I have to ask the question.
Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from acute who participants using speaker equipment may be necessary to pick up your handset before pressing disc darkies.
One moment, please as we poll for questions.
And our first question comes from the line of Brady.
Brady Gailey with T B W.
We'll see what's your question.
Hey, Thank you good morning, guys.
Alright.
So you're all showed some pretty good expense control in the second quarter. It sounds like the third quarter is gonna be.
In line or better than <unk>. So I know in the past, we've talked about expenses being up kind of low to mid single digit.
But you know it seems like you guys may be able to hold expenses flat. This year relative to last year is that is that the better way to think about it now.
Steve Yeah Brady.
Brady This is Steve I would agree with that again a lot of a lot of what we've had in the past you know what was on the mortgage side and as those as that has come back down those variable expenses on that side.
Have dropped so we've been able to control that a little better. So that's the that's how we're.
Or casting is at this point relatively flat.
That's all.
Then quite quite the loan growth quarter here, even lose on that.
$45 million of energy laws that that's great to see.
I know in the past you've talked about kind of the mid to high single digit loan growth. It sounds like you all can do better than that.
Maybe just kind of how you're thinking about.
The back half of this year and next year, especially as we potentially head into a recession here what would that cause you to hit the brakes at all on our book and some of the slowing growth.
Are you kind of just answered your own question IRA.
I really think we if things run has they're going today, yeah, we're probably going to be at the high end of our range or better for 22, but right now I'd. Just say you know were cautiously optimistic about that but a sharp cooling of the national economy could Mike getting any.
Along growth very difficult. So they that's all we're saying is let's let's see what happens with all the rate increases and how much the tightening really does affect everything because a true recession, just kind of make things.
There are and that's the reason, we're still not trying to jump out and say, we're definitely hitting double digit growth just yet I'm twenty-three Ah yeah.
On a personal opinion I think we could be in a at least mildly recessionary environment, but again I think we will still get loan growth. We've got a great team in place.
We're getting great results out of both our new lenders and are well seasoned bonds that have been with US a long time and Texas economy is still just great but.
There's some potential dark clouds on the horizon and I think we got it.
You'll not get overly optimistic Cory you got any comment yeah, and I agree with targets, but one thing that I.
If you look at that.
Our pipeline is really really strong and you know we've we've always said is we're going to keep this bank.
<unk>.
In a recession to be opportunistic.
Without with some stuff that's out there so I mean.
Well you know, we don't Wanna be overzealous in what we think can happen, but I think we were pretty positive.
Alright, and then finally for me just on the share buyback well have you had a nice step up in activity in the second quarter.
Should we view this as kind of the new run rate from here or was <unk>, just an especially strong quarter for the buyback.
Well the way our board looks at it we do have our kind of internal metrics on valuation of our stock and as long as we believe it is undervalued, we're going to keep buying it back.
So we've got our level of support is comfortable with them, where you're we're not terminated plan.
Yeah, right right, Yeah, I'll just add we did have the opportunity to look at a couple of larger block transactions during the during the quarter on that.
And so as you know when we can take advantage I like that will continue to do that but we don't necessarily know how often those those come up but they're still kind of skew our second quarter numbers state pointed out because there were a couple of block purchases after that.
Opportunity arose when the price was right. So we took advantage of it and we will do so in the future.
Okay, that's great color thanks, guys.
Thank you Heidi and Frank.
Our next question comes from the line.
Right no sense with Piper Sandler.
Questions.
Hey, good morning, guys.
What are you doing.
Doing well thanks.
Thanks for taking my question Cory I apologize if I missed this in your prepared remarks, but I was just curious where.
Where are you guys are in terms of the number of lenders you you've hired I think you were targeting 20 at one point I think you were you had been roughly halfway there I'm just kind of curious what that number was I apologize if I missed that in your prepared remarks, yeah. I don't think I don't think we actually but that's one of them, but they were basically at the finish line on that we are we're not.
Stopping all the hiring by any stretch, but we probably hit that 18 19 number range on where we were but we still got quite.
Quite a bit of stuff that we're working on and feel very confident about it.
Okay, great Great play this out it sounds like those are guys, who those folks are just now hitting their stride based on kind of what you said.
In terms of the annualized growth coming out of Houston and I'm sure there's.
Those folks that you brought in and still have plenty of capacity.
Yeah. If you Houston is a great example, but it's by no mean, an anomaly for us.
If you look at all of the Metro and we talk about the metro markets, but we cannot forget about the south plains I mean, the things that we've been able to accomplish here just as well.
We like the markets that we're in and we've been able to pick up a really good talent, but as we've said all along it's a pretty rigorous.
Effort that we go through before we actually bring somebody on because we want to make sure that they have the same.
<unk>.
Culture as we did in and so it's worked out and end and when you look at the things that we the way we've been able to measure those and see how quickly. They are returning to a breakeven and then profitable it's been very very good for us.
Specifically in the Houston and Permian markets. We do have are still fairly new leadership in place there and those changes have allowed us to bring on some great. Other additional lenders, yeah ear nose, and where we're going to continue to hire good lenders in any market. We're in.
It's still a key part of our long term business strategy, where this was just a feeling for I guess faster than usual on our ramp up maybe in hirings and it's working out really well for US. These are these lenders have come on and brought some great customer relationships with them and we think theres still a lot of room variety and those relationships.
But it doesn't mean, we're not going to still be hard good people, but we're not stopping all that you know and we've we've taken some I mean.
It takes some approaches where the expenses if you look at some of the Metro markets. We're in we just got in in added square footage in existing properties just to be able to expand those without bringing in all the other overhead that comes with it. So it's been a really good program that we've put into play but I will tell you that means we had we we do.
We've never not been in the hiring business and very much focused on the way we've done it and keep moving forward.
Great that's helpful and Steve just going to touch on the margin a little bit you had nice core expansion. This quarter I think pre Covid. You know you guys were kind of in the high threes close to four you know obviously the bond portfolio's a little bigger now, but just kind of curious.
How you see you know you guys benefiting from <unk>.
Continued rate hikes and in terms of margin expansion.
Oh.
Yeah, we are.
We have historically been a slightly asset sensitive we still we still are we're probably just a little bit less asset sensitive than we were you know at the end of last quarter based on the on the loan growth and some of the securities purchases, but Oh, we did show good good expansion in NIM during the quarter even.
Factoring in the the large items that came through.
Just what so I mean, we we hope to keep that healthy healthy NIM, it's probably going be a little bit lower than where it was you know a couple a couple of years ago, There's definitely a lot of competition out there on the loan side, so while rates have gone up a.
Competitively the loaner loan rates or maybe.
Down a little bit on that side.
I would add on the interest expense.
You know we did we did see an increase there it only showed up slightly for Q2 that'll be a little bit more in Q3, just based on the timing of when we did some of those increases and in rates that was probably for the.
Last part of it.
Middle of the last part of June so interest expense will be up.
A little bit more next next quarter so.
But this is Cory but you know we're also set.
We're trying to be very proactive about how we approach that and it's got it's I mean, we're rolling out so deposit products in some markets that we've not had.
Specific products in those markets that we think will help us manage that better.
So we're kind of excited about that.
I might give a little more color to where we're seeing very wide disparity right now in our markets in at least some of our markets in deposit rates, especially for sea days.
So far most banks in our markets are trying just like we are to maintain a very favorable beta between the right. We're seeing on the fed increases in actual deposit rates. So if everybody stays the course, we are going to see increased deposit rates, but I don't think it's going to be anything dramatic.
Great and just maybe final question for me I know these aren't large numbers, but it looks like your insurance business is tracking.
Through the first six months of the year, maybe up you know close to 30% year over year I know in the third quarter a it takes another leg up due to some payments that you received but you know usually that business is kind of a 910% grow or is this just a function of you know a harder market in insurance.
Have you are you doing anything differently. There just just kind of curious kind of what's what's driving the increase.
Again, not huge numbers, but every little bit helps.
Yeah.
I mean, this is Cory and I.
Steve will probably have some color to add to this but one of the things those cycle between when somebody when the premiums instead of coming in and if claims are filed earlier.
And we've had we've had some of that happening with a lack of rainfall in some of our markets.
So it just it that's how those track so I don't think it's anything out of the ordinary I think you'll probably stabilize.
Ill end of the year.
I would agree with some of that is a little bit just timing issues. We we have.
Probably a couple of very small acquisitions.
Acquisitions that were done.
Last last year that instead of just and incrementally added to some of the revenue numbers, but at the expense side on those would be up a little bit as well so nothing shouldn't be anything significant on an insurance and a little more clarity on our insurance business remember is federal crop insurance business. So it.
Does not run in the cycles of traditional P&C or anything like that as far as hard markets or whatever it's a it's a standardized rate and they ask Cory mentioned I think one of the things we did pick up a couple of agency acquisitions that helped a little.
Spring, but are in are very dry conditions out here right now we have some farmers that are collecting on crop insurance earlier.
And they would in a normal year, and which is actually up.
We don't get the fundings, we might like to have on our AG loans. Its probably aren't we don't really have any credit risks. There. These guys are going to do well based on herself.
Returns on their coverage, but that allows us to recognize that income on the premium side because there was a.
Policies are now fully paid up and actually to the farmers have received their benefits from.
Great. Thank you guys appreciate all the color.
Thank you.
Thanks, Brad.
And we have reached the end of the question and answer session I'll now turn the call back over to Curtis Griffith for closing remarks.
Thank you operator.
Just to summarize we're very pleased with our second quarter results since that's been driven by some strong loan growth from both our new lenders and our existing team.
We believe that our mortgage business has now returned to more historical levels and seasonal cycles as it always has so we think that we're not going to see.
Anything that's.
Negatively impact us moving into the second half the year from that our Texas markets continue to be very strong very robust economic growth and we tend to try to take advantage of those opportunities, where we can and we also see opportunities to grow the company as we expand both our community markets across the South plains as well as in our.
Major markets, Dallas, Houston, and El Paso are it's a it's a good time to be in Texas banking and we're going to focus very hard on our organic growth.
And our first branch that we have grown market share and put more dollars to the bottom line.
And for that we thank you for your time today and please reach out to US if you have any questions.
And this concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.
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