Q4 2024 ServisFirst Bancshares Inc Earnings Call
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Robert Hasselbeck, Joseph Wheeler William H. Hassell Carl Scalab technical
Speaker Change: Greetings and welcome to the Service First Bankshare's fourth quarter and full year earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.
Speaker Change: Some of the discussion in today's earnings call May include forward looking statements actual results may differ from any projections shared today due to factors described in our most recent 10-K 10-Q filings forward looking statements speak only as of the date. They are made and barrick's first assumes no duty to update with that I'll turn the call over to Tom.
Tom: Thank you Davis and good afternoon, and thank you for joining our fourth quarter conference call.
Tom: We were really pleased with the quarter and all of our trends turned out to be positive.
Tom: You know if if we recap the year, we ended with earnings.
Tom: Earnings per share diluted earnings per share up 10% over 2020 three.
Tom: And our net interest margin did climb steadily from 2.57% in the fourth quarter of 2023 to.
Tom: 3.96% in the fourth quarter of 2024.
Tom: And also our book value and most importantly grew 12% year over year.
Tom: So we were.
Tom: We're really happy how the year ended up and it got better as the year went on.
Tom: And you know a year ago on the call I said that our loan losses were low and would probably normalize.
Tom: And here, we are a year later and the loan losses are still low and I'm still saying, they're going to normalize, but where you are.
Tom: Henry will talk about credit in a few minutes, but we we don't really see any industries, where problems. We just see weak companies. They have problems and are used to the borrowers we say that we'd have to deal with so.
Tom: Oh blown front.
Tom: We weren't concerned about we need we would had a pretty good loan pipeline for the fourth quarter, but we were concerned about payoffs and.
Tom: In the fourth quarter.
Tom: Oh.
Tom: Now loan payoffs.
Tom: Turned out to be about 40% of our net loan growth excuse me of our garage loan growth.
Tom: So we had a net loan growth of 268 million for the quarter.
Tom: And I will say not all of those payoffs were a bad thing about half those.
Payoffs were low fixed rate loans, so we're glad to see those pay off but we.
Tom: We will have some more pay offs in the first quarter, but at a much lower level than we saw in the in the fourth quarter, we believe so.
Tom: From a C&I loan growth standpoint, we did we did see some it was incorrect.
Tom: Sure.
Tom: Our loan pipeline increased $150 million after the election, which.
Tom: Which is very positive and we do expect loan growth to normalize more over the course of 2025.
Tom: I will mention our two new markets.
Tom: Indices in Auburn, Memphis, Tennessee in Auburn, Alabama, or basically not making very good progress.
And they've really they've been working out of their cars until the last couple of months. So they're just now got an office.
Tom: We are proud of how theyre doing and optimistic for their future and think we'll do really well.
Tom: We have great leadership in both of those cities.
Tom: We did add four new producers in the fourth quarter, it's not not common that many in the in the fourth quarter you usually see them in the first half of the year. So.
Tom: Minivan.
Tom: We are pleased with those markets.
Tom: Deposit standpoint, we did see very nice deposit growth.
Tom: In the quarter, including our noninterest bearing deposits.
Tom: We did see some good growth in our correspondent channel.
Tom: With year over year growth and 28% and funding.
Tom: With now we have 378 banks in 30 states.
Tom: Our correspondent customers, we added 24, new bikes in 2024.
Tom: 65% of the funding comes from banks that are settled with us our settlement buying so that was very much positive. So.
Tom: That's a quick overview and I'm going to turn it over Henry now discuss credit mortgage title.
Henry: Thank you Tom.
Henry: Im extremely pleased with the bank's performance in 2024 and more specifically in the fourth quarter.
Henry: Thanks loan portfolio continued to perform at an exceptional level.
Henry: Commercial focused business model continues to outperform our peers.
Henry: As we exited the Covid stimulus air our bank was at historical lows from four most credit metrics a few years ago and remarkably we have been able to continue to stay at or near historic low figures punctuated by very strong 2024.
Henry: Annualized net charge offs for the fourth quarter nine basis points, and we had nine basis points in charge offs for the entire year.
Henry: This is less than the 10 basis points, we had in 2023.
Henry: I'm very proud and pleased with the minimal charge off that we experienced in 2024.
Henry: Our age up allowance to total loans stable throughout the course of 2024, and we ended the year with an allowance for loan loss reserve to total loans of $1 three up.
Henry: Nonperforming assets to total assets were 26 basis points, which is generally in line with the results for the third quarter.
Henry: We continue to proactively monitored the portfolio to ensure we are appropriately understand the potential risk and act accordingly, as well as conservatively.
Henry: 2024, with a very strong and stable year from a credit perspective.
Henry: The new administration in place in Washington, We look forward to growing and prospering in 2025 and beyond.
Ed I'll turn it over to you.
Ed: Thank you Andy and good afternoon, everyone.
Speaker Change: We are very pleased with our fourth quarter results and our updated.
Ed: Our earnings momentum heading into the new year.
Speaker Change: We have experienced four straight quarters of net interest margin improvement.
Speaker Change: Focus my comments today linked quarter, because recent trends are meaningful to our momentum.
Speaker Change: Net income was up $5 2 million of the third quarter, a 9% diluted EPS was up 8%.
Speaker Change: Net interest income increased 28% on an annualized basis and continues to be directly to net income.
Speaker Change: Margin increased $123 8 million in fourth quarter compared to $115 1 million in the third.
Speaker Change: We continued to benefit from the upward repricing fixed rate assay and we have successfully managed the cost of liabilities.
Earning asset yields decreased by 25 basis points, while interest bearing liability rates decreased by 46 basis points.
Speaker Change: Net interest margin increased 12 basis points over the prior quarter, while housing an additional $370 million in cash which negatively impacts the net interest margin percentage.
Speaker Change: We spoke at length last quarter about the interest rate position of our balance sheet being slightly liability sensitive and that hasn't changed.
Speaker Change: I'd like to offer some more specific numbers that might help with everyone's announced.
Approximately 325 million of our securities mature will pay downs during 2025 and is currently yield three 2%.
Speaker Change: We have $6 3 billion in fixed rate loans and they repriced at 10 basis points during the fourth quarter.
Speaker Change: Believe we had several more quarters of increasing yield in this portfolio.
Speaker Change: We have $6 1 billion in variable rate loans currently yielding seven 3% most of these reprice within 30 days following a rate change.
Speaker Change: Thanks for interest bearing checking deposits dropped from 365% at the end of the third quarter to 332% at the end of the fourth quarter.
Speaker Change: Indicating hey based on 66.
Speaker Change: Noninterest bearing demand deposits increased to 20% of total average deposits.
Speaker Change: 19% in the third quarter.
Speaker Change: Please refer to our supplementary information attached to our press release with further details on our balance sheet structure.
Speaker Change: We had another good quarter at noninterest income deposit service charges increase resulting from higher analysis charges and mortgage income increased due to continued strong origination volumes.
Speaker Change: Core revenue declined slightly.
Speaker Change: We had another quarter and successful expense management, we recently directed to $44 8 million of core expenses per quarter.
Speaker Change: I believe this has increased modestly to $45 3 million.
Speaker Change: We are reporting $46 9 million for the quarter. However that includes adjustments to fully funded a shortfall.
Speaker Change: <unk>.
Speaker Change: One time, EDT comps related to upcoming systems enhancements and the write down checked solid receivable from other banks.
Speaker Change: These are offset by a decrease in our annual incentive plan accruals.
Speaker Change: Our efficiency ratio improved each quarter during the past year.
Speaker Change: Tax rate for the quarter was 17, 9% benefited from the positive adjustment to the tax credit investments, which had delays in construction.
Speaker Change: Excluding this adjustment our tax rate was 18, 8%.
Speaker Change: We believe our prior guidance of a 19% tax rate is still correct.
Now I'll turn the call back over to Tom for his final thoughts.
Tom: Thank you Anne.
Tom: We were thinking in the wake of the election, we do see.
Tom: We were optimistic before the election and we're more optimistic after the election, because we are a business bank in the Canadian business community. Overall is very optimistic about the outlook for the future and of course some of that's dependent on you.
Tom: You know a continued Daniel downward trend in short term rates I think it might.
Tom: Projects pencil out a little bit better I think we don't have to have some rate cuts.
Tom: Over the next year so.
Tom: We do expect loan demand to continue to improve the margins our margins did improve a little bit.
Tom: Our goal here is to make our stock sellers in short sellers from Morrisville.
Tom: And we hope will there'll be more so in the course of the coming year. We are now opening up for questions.
Speaker Change: Great. Thank you at this time, we will be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.
Tom: Information tone will indicate your line is in the question queue.
Speaker Change: Maybe first start to remove yourself from the queue.
Speaker Change: All participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: One moment, please when we poll for questions.
Speaker Change: Our first question is from Stephen Scouten from Piper Sandler. Please go ahead.
Stephen Scouten: Yes. Thanks, good afternoon, just kind of curious.
Speaker Change: Firstly.
Speaker Change: If you were surprised to the upside at all about the deposit beta as you were able to extract this quarter that was really nice to see and kind of how you think about that upside potential for the NIM. Tom that you spoke to maybe in the current.
Speaker Change: Expectations, where maybe there is not any additional costs there may be an environment, where there are additional costs kind of how we can think about that trajectory.
Speaker Change: Oh, that's good.
Speaker Change: Kind of a tough question I guess, when you had the luxury of having a fair amount of excess cash you can be pretty disciplined about.
Speaker Change: Your interest rate expense management Steven.
Speaker Change: We're in a position.
Speaker Change: Well youre not you cannot be so we are in the lab that luxury.
Speaker Change: They have an excess cash and we can be pretty disciplined about it but I'll just say that we haven't.
Speaker Change: Had any pushback.
Speaker Change: And we've been fair and reasonable with our clients.
Speaker Change: I'm very surprised how little pushback, because we deal with business class.
Speaker Change: Our cost of funds is higher than your average back to begin with so we're already paying them up market rates. So I think they're fully expected if we see any more cuts theyre fully expecting to see.
Speaker Change: <unk> of course.
Speaker Change: At some point there there is a law of diminishing returns here as rates go lower and lower LOE world, how low we can cut rates and you know that so we try to have really nice followers.
Speaker Change: Compare nice for us.
Speaker Change: Our loans compared to.
Speaker Change: I think what used to say.
Speaker Change: Slower.
A few years ago is much higher today than what we looked.
Speaker Change: Look for an earlier years, so I think that'll be.
Speaker Change: Help us down the down the road as the the loan price and all the floors on the loans will help the state I think we will flop from from saving on the expense side to the floors on the loan side will help us.
Speaker Change: If I answered your question.
Speaker Change: Yeah, that's really helpful color Tom I appreciate that and then maybe you said you hired I think for people here this quarter.
Speaker Change: Can you talk about how youre thinking about hiring into the new year do you expect that to be.
Speaker Change: Business as usual and continue to hire good people as they come about and kind of along those lines. If we see more M&A, which everyone seems to be expecting would you potentially be more aggressive.
Speaker Change: With the dislocation in around your existing markets.
Speaker Change: Yeah, We've always said, we're not going to let our budget and our budget goals that were certainly we don't disclose those but we have those internally, we're not going to let that Victor.
Speaker Change: Our strategy, we're going to always be opportunistic about hired the very best people.
Speaker Change: You know, where we have a couple of irons in the fire.
Speaker Change: One small one kind of large in terms of potential expansion I don't know, we're not anywhere close to what might be on those yet so we don't know but.
Speaker Change: Yes, if we see.
Speaker Change: Merger activity has always helped us well.
I would say, there's always people that fall out of it.
Speaker Change: Unhappy terms of.
Speaker Change: Musical chairs.
Speaker Change: Chairs are arranged differently. After the music stops so we see that as a huge potential upside given the broader environment for banks, the brighter merger activity and of course out.
Speaker Change: If I was a bike looking to to.
Speaker Change: To sale.
Speaker Change: Certainly think they would.
Speaker Change: I'll get in line in the next four years are certainly before that while we have a bank.
Speaker Change: Bank friendly at least seemingly bike friendly administration.
Speaker Change: <unk> office.
Speaker Change: Yeah, I think you're right about that and how do you guys just from a strategic perspective, how do you think about that and could you have a list.
Speaker Change: I don't know four or five market that you think about hey, if the opportunity arose here here's a market, we really want to be in or kind of how do you think about that potential for expansion.
Speaker Change: Yes.
Speaker Change: Lift in my drawer I've got a follow probably.
Speaker Change: Probably 20 different markets.
Speaker Change: I've got a list of everybody we've ever talked to you all over the last night.
Speaker Change: 19, and a half years.
Speaker Change: In that file of each one each of those markets. So we dusted off.
Speaker Change: Mark just announced we think okay.
Speaker Change: It was in that market that we're interested in so.
Speaker Change: And lastly, we do now have pretty good connectivity in the southeast to the point to where we think we will get a call. We have a lot of correspondent network that are there.
Speaker Change: <unk> put together a lot of France in the correspondent world that we could try to spot opportunity and those spot opportunity for for people that are interested in higher Ed as well. So we tend to work together with other other friends in the industry.
Speaker Change: Got it really helpful. Congrats on a great year I appreciate all the color.
Speaker Change: Thank you Steve.
Our next question is from Steve Moss from Raymond James. Please go ahead.
Steve Moss: Hi, good afternoon.
Speaker Change: Hey, Scott Hey.
Tom: Hey, Tom with the U B comments here on the loan pipeline here, just kind of curious how you're thinking about loan growth for the upcoming year, you did about 8% or so for the 2024.
Speaker Change: Low double digits are you.
Speaker Change: Could it be a little bit more.
Speaker Change: Prepays temper in that.
Speaker Change: Yes.
Speaker Change: I hesitate to give any.
Speaker Change: Because 2024, you go back through it.
Speaker Change: First quarter was zero second quarter was really good.
Speaker Change: Third quarter I think it was pretty close to nothing and then fourth quarter. It was pretty good. So it is not has been inconsistent I don't know that I don't know what.
Speaker Change: I don't know what you analysts think that they will see that the organic growth rate at or for loans.
Speaker Change: We still have a problem where rates are too high.
Speaker Change: I get that.
Speaker Change: The 10 years too hot for people to start deep.
Speaker Change: New projects in many cases.
Speaker Change: The 10 year today.
Speaker Change: The short term borrowing costs is really higher than we talked to a lot of a lot of our commercial real estate customers of my I'll say that it's a little.
Speaker Change: A little bit of an issue I think theyre Marcia developers are moving ahead pretty well, but the.
Speaker Change: The multifamily world steel.
Speaker Change: The construction cost is obviously a big issue.
Speaker Change: They can just for say on the cost of steel and copper.
Speaker Change: Concrete and lumber.
Speaker Change: With the new administration in place, that's not going to happen. So.
Speaker Change: I'm optimistic, but I'm not I'm not counting on anything.
Speaker Change: This substantial improvement.
Speaker Change: Steve from what we saw in 2024 week.
Speaker Change: We had to fight scrap to put together what we did in 2020 forward I don't think.
Speaker Change: Outside of.
Speaker Change: Obviously, there's a lot of potential in Florida.
Speaker Change: We see it.
Speaker Change: Anytime you've got net in migration like state of Florida has that's going to lead to increased opportunity.
Speaker Change: They lay back to Billboard.
Speaker Change: Senior senior housing interactive live and I think they call. It these days, they're going to have to build more of that abates, we'll have Florida they'll run out of.
Speaker Change: Bedrooms down there for the active lives components. So we're optimistic that that Florida will be a help but certainly we don't have.
Speaker Change: Habits.
Speaker Change: Pretty well rounded.
Speaker Change: The loan portfolio throughout the South east.
Got it Okay and then in terms of the producers just kind of curious.
Speaker Change: Is it more C&I CRE, you just kind of how do we think about that.
Speaker Change: Was it in the new markets are.
Speaker Change: New markets, our previous markets Memphis sovereigns versus elsewhere.
Speaker Change: Yes.
Speaker Change: In the fourth quarter. It was a lot of additional Memphis.
Speaker Change: Alberta, I think might be one Nashville.
Speaker Change: In the first quarter, we've already added.
Speaker Change: Sure.
Speaker Change: Forward, Florida.
Speaker Change: Terms of the in the West Central Florida region, and we've already added four new bankers down layer.
Speaker Change: No.
Speaker Change: They all are really out of our company, we only have one dedicated commercial real estate lender.
Speaker Change: He is in Nashville, and he is from Texas, and he is probably half as customers or Texas or half or in other.
Speaker Change: Other places Henry or would that be fair to say clearly, including Tennessee.
Speaker Change: So, but everybody else is it.
Speaker Change: Sort of.
Speaker Change: At least as I see it.
Speaker Change: And they do some commercial real estate as well.
Speaker Change: Okay got you and then in terms of just.
Speaker Change: On the margin here.
Speaker Change: I heard I've mentioned the cash flows from the securities portfolio just curious.
Thoughts on fixed rate asset repricing from the loan portfolio here, what capsules for the upcoming year, there's any been any change in that.
Speaker Change: Yes, we talked about last quarter and I think it's little changed this quarter, we're still looking at about a beta in the half of fixed rate loans that are repricing.
Speaker Change: In the first year.
Speaker Change: And then you add to that.
Speaker Change: 300 million and we've talked about securities and that gets us back up to that $1 8 billion I think we talked about last quarter.
Speaker Change: And so that's that $1 5 billion of fixed rate loans are coming off in that.
Speaker Change: High fours.
Speaker Change: We think of coming back on.
Speaker Change: <unk> fixes.
Speaker Change: Okay.
Speaker Change: And in terms of just the margin trends.
Speaker Change: I assume the margin was expanding every quarter.
Speaker Change: <unk>.
Speaker Change: It was the December margin.
Speaker Change: Fair to assume is above 3% at this point.
Speaker Change: Just kind of curious how you guys are thinking about that for over the near term.
Speaker Change: It is yes, it is right around that 3% except for if we're holding excess on balance sheet liquidity on our books that tends to impact that net margin percentage, so you're probably seeing in the mid ninety's as opposed to three.
Speaker Change: But for that item.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: $2 billion in excess five margin would be in that 3% range.
Speaker Change: I guess, we tend to correspondence.
Speaker Change: The erosion is sitting here, but they tend to when they see a peak in the fourth quarter in terms of deposit balances.
Speaker Change: They do.
Speaker Change: And that happened this quarter.
Speaker Change: As it has in previous years.
Speaker Change: For the fourth quarter.
Speaker Change: Our existing customers.
Speaker Change: Flat usually through the first.
Speaker Change: Halfway through the second quarter.
Speaker Change: Okay.
Speaker Change: Got you I appreciate all that color and then just one last one for me in terms of the.
Speaker Change: Nonperformer that.
Speaker Change: I know it was under contract to be sold and then talk through just kind of curious if you have any update on timing of potential resolution.
Speaker Change: Don't have any immediate update is still one where we're working on a lot of attention but there's.
Speaker Change: Nothing definitive at this time is under a contract.
Speaker Change: Haven't they haven't.
Speaker Change: Let's put it this way any any sale is going to be at a multiple of our debt amount.
Speaker Change: So were fine, but there are other competitors out there and Thats why theyre trying to do.
Speaker Change: Get everybody.
Speaker Change: <unk> full which might be a little bit difficult to do so there. There's always we have a there's a backup bar.
Speaker Change: <unk> potential.
Potentially.
Speaker Change: As well so we don't feel like there's any risk will offset with that asset yeah I think that's it.
Speaker Change: Good set of numbers glass, but yet it's just going to take time.
Speaker Change: Yeah.
Stacey: Alright, Okay, well really appreciate all the color here and nice quarter guys. Thank you very much. Thank you Stacey.
Speaker Change: Our next question is from Dave Bishop from Hockey Group. Please go ahead.
Dave Bishop: Hey, good evening gentlemen.
Stacey: Hey, How're you doing.
Dave Bishop: Okay, Tom How're you doing goodbye.
Speaker Change: But the Snowden Barry is too much.
Speaker Change: Hey quick question for you.
Speaker Change: I appreciate the supplemental disclosures in terms of the loan origination pulled back a little bit.
Speaker Change: Right on top of 7% some 10% end of the quarter just curious how they've trended.
Speaker Change: Post quarter any sort of material movement.
Speaker Change: <unk> yields.
Speaker Change: No.
Speaker Change: Go ahead Ed.
Speaker Change: Nowadays I think thats about right.
Speaker Change: We're looking at a better a little bit of a more of a balance between.
Speaker Change: Fixed and floating rate loans, where we're doing.
Speaker Change: Some more fixed rate than we were we're doing practically none let's say a year ago that we are now.
Speaker Change: As we approach being asset neutral lemonade lab liability sensitive neutral to asset sensitive neutral.
Speaker Change: We're looking at a little bit better mix of some fixed and floating rate loans.
Speaker Change: And in terms of the pipeline composition.
Speaker Change: I know the percentage of commercial industrial loans sort of declined over the years. It is commercial real estate construction picked up I'm just curious if there's more of a C&I component it might break over operating accounts for some of that before.
Speaker Change: Well the interesting thing is a lot of the C&I.
Speaker Change: You know I looked at our service charges December over December and they are up 20% year.
Speaker Change: Year over year, which says we've got a lot more accounts on the books and a lot more activity.
Speaker Change:
Speaker Change: Many of those accounts are non it non borrowing accounts day many of the.
Speaker Change: The good C&I accounts don't borrow or they might have a line that's enacted and nothing nothing no usage in it so if solar relationship thing a lot of the.
Speaker Change: C&I, where Brian Anna.
Speaker Change: Either has.
Speaker Change: No deposits or is a one.
Speaker Change: 100% deposits, so it's sort of an interest in.
Speaker Change: Phenomena, there on C&I side.
Speaker Change: Got it and as you sort of look at the.
Speaker Change: The Crystal ball from a credit perspective, you noted in the preamble, obviously net charge offs are very well behaved here.
Speaker Change: What would it take to maybe say move that from like say, the 10 basis point to 20 basis point level will be a collapse in unemployment just curious of what what would have to happen to really have a draconian impact of that loss rate.
Speaker Change: No.
Speaker Change: Pete.
Speaker Change: If it goes to 30 basis points, one quarter don't be surprised David don't don't get used to the Tam is not reality over a long period of time and that's why we.
Speaker Change: That's why we made the margin expansion too.
Speaker Change: Very few commercial banks can.
Speaker Change: Can sustain a 10 to 15 basis points.
Speaker Change: Charge off rate over a long period of time and Ive always said.
Speaker Change: On average good bikes are 25 basis points or less on average and so but that means we might have a year when we spiked to 35 or.
Speaker Change: So if we got back to 25.
Speaker Change: The wheels have come off that's just sort of back to back to a normal level, but like again.
Speaker Change: I said in my script, we don't see weakness as any particular industry there.
Speaker Change: There are some industries, obviously seen.
Speaker Change: Senior housing has been everybody knows I've had some issues trucking has had issues as well.
Speaker Change: The weak borrowers of lawsuits filed bankruptcy or both of those industries, we've got to be better.
Speaker Change: No.
Speaker Change: Struggling a bit but they are they don't make it to the other side, but.
Speaker Change: Outside of that.
Speaker Change: Theyre randomly just pure.
Speaker Change: Companies that are just poorly operated.
Speaker Change: And whatever.
Speaker Change: <unk>.
Speaker Change: <unk> why add anything to that.
Speaker Change: I agree I don't I don't think there is as you ask one specific thing whether it's unemployment or other is that's going to drive it up that's just going to be.
Speaker Change: The deterioration in certain borrowers.
Speaker Change: Nothing.
Speaker Change: Nothing specific to industries or asset classes, it just weaker projects or weaker players.
David: I would speculate and a speculation speculation David.
Speaker Change: That the only thing unemployment will have anything to do with is residential a D&C.
Speaker Change: I think there's probably a pretty high correlation between we could see some and we just don't have the kind of exposure.
Speaker Change: We've kind of learned our lesson after <unk>.
Speaker Change: Oh, I don't know how things have gone well for 15 years and you tend to get lull too. Thank you.
Speaker Change: A lot of inventories that were going to become worthless, though would be it. So I think outside of that on the commercial side I just don't see loss is being affected by an increase in on a ball, but I could be wrong.
Speaker Change: My experience over the years has been that I think residential a D&C is tied to unemployment.
Speaker Change: Got it and then.
Speaker Change: Maybe a question for Rodney either the puts and takes of the correspondent banking group can be.
Speaker Change: Cyclical increase.
Speaker Change: Increase in end of period borrowings period to period does that reflect.
Speaker Change: Timing.
Speaker Change: Fund flows or funds.
Speaker Change: Funding of loan growth just curious if that's related to the corresponding banking groups.
Speaker Change: It's both.
Speaker Change: You had the fourth quarter.
Speaker Change: Debt, where liquidity builds with our customers and you know we've got 374 correspondent banks now thereabouts.
Speaker Change: The other thing is we added a.
Speaker Change: 24 relationships during the year.
Speaker Change: The largest market in growth was Texas.
Speaker Change: Followed by which.
Speaker Change: Cards.
Speaker Change: New producers there are almost two years ago, and then followed by Tennessee.
Speaker Change: And we added some producers in Tennessee, who are doing well so it's new accounts and in addition that fourth.
Speaker Change: Fourth quarter liquidity growth.
Speaker Change: Okay.
Speaker Change: Got it appreciate the color.
Speaker Change: Thank you.
Speaker Change: Right.
Speaker Change: This concludes the question and answer session I would like to turn the floor back to management for any closing comments.
Thank you everybody for joining us on the call I appreciate your investment in our company.
Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: No.
Speaker Change: [music].
Speaker Change: Hum.
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