Q4 2024 Veritex Holdings Inc Earnings Call
Thank you will good morning, everyone.
Greg will review, our fourth quarter and full year 2020 for our results for the fourth quarter, We reported operating profit of 29 8 million.
$1.54 per share.
Pre tax pre provision earnings for 40 months or.
One one point to 8%.
M decreased during the quarter, but anticipate but we anticipate it to increase it from here, which Terry will cover in detail later in the call for.
For the full year 2024, we made operating earnings of $119 million four.
Terry: 4 million or $2.17 per share, which was flat over 2023.
Terry: As I've stated many times during 2024.
Terry: Our earnings would take a hit to transform our balance sheet, we feel very good about where our balance sheet.
Terry: Currently stands and earnings will begin to increase from their current levels.
Terry: We are laser focused and committed to returning to a return on average asset levels in excess of 1% in 2025 MBR.
Terry: Although the vast majority of the balance sheet work is completed.
Terry: <unk> opportunities for us to be more efficient with our liabilities through re pricing and positioning of our funding.
You saw some of this in our fourth quarter as our balance sheet decreased approximately 300 million write off some high priced funding.
Terry: We also saw a small decrease in our funded loans for the fourth quarter and year over year. We expect 2025 would be a positive loan growth year between low to mid single digits.
Terry: Very high forecasted payoffs.
Terry: A disciplined focus on new client acquisition as my undivided attention as well as our bankers.
Terry: When I say disappointed and I'm speaking about our ability to continue to be deposit first focus with well price relationships that produce available funding spreads that are accretive and profitable.
Terry: I'm now going to turn the call over to Curtis Anderson, our Chief Credit Officer to give you an update on our credit picture.
Terry: I wanted to add that Curtis and all these dedicated teams have done an incredible job in 2020 for transforming our credit process, our credit priorities and our credit surveillance.
Terry: As a result of their work criticized loans have declined 20%.
Terry: Over the last 12 months and including two large payoffs in the first two weeks of January that percentage decline goes to 28%.
Terry: Numbers speak for themselves.
Terry: The team's focus on it.
Terry: The team's focus and execution has been quite frankly remarkable.
Terry: More to do but I'm super proud of the progress.
Curtis Anderson: Now I'll turn the call over to Curtis.
Curtis Anderson: Thank you Malcolm and good morning, all we continue to realize positive momentum and credit to our focus on early identification of risks and balancing expediency with productive outcomes on problem loans.
Curtis Anderson: During the quarter, we foreclosed on an office property, which increased our NPS from $67 3 million at third quarter end to $79 2 million at year end. The property has significant interest from various potential buyers and it is currently under LOI.
Curtis Anderson: Closing is expected in early second quarter with no loss.
Curtis Anderson: Charge offs for the year or below previously provided guidance fourth quarter charge offs are predominantly driven by our C&I relationship at a special purpose CRE property.
Curtis Anderson: In general our 2020 for full year charge offs.
Curtis Anderson: The impact of final resolutions on a number of loved ones and our drive to address the velocity and throughput and managing credit risk.
Curtis Anderson: Past dues were generally in line with prior quarters, the increase in 30% to 59 days past due category largely reflects relationships for which payments were slightly delayed and are now current and without underlying credit concerns.
Curtis Anderson: Moving to slide six we are pleased with the continued progress in managing and reducing our criticized loans with strong end to end focus by our frontline special assets credit officer and loan servicing teammates Chris.
Curtis Anderson: Criticized loans are down $100 million or nearly 20% year over year and down $78 5 million from the third quarter due to improved borrower performance refinancings and payoffs.
Curtis Anderson: Total CRE criticized loans are $228 5 million down 35% from year end 2023.
Curtis Anderson: Please note that the breakdown of CRE criticized by property type as now presented as accurate. This information is posted on our website.
Curtis Anderson: Finally, with respect to criticize loans as Malcolm mentioned certain closings and payoffs that we expected at year end.
Curtis Anderson: Shifting to early January these.
Curtis Anderson: These payoffs it further reduced criticized loans by approximately $15 million to $365 6 million.
Curtis Anderson: The related charge offs for these resolutions are $1 billion.
Curtis Anderson: There is significant risk management activity under the surface of these members to the portfolio as dynamic and the routines in place to properly identify and manage risk are robust we continue to execute our credit improvement initiatives with much more work to be done, but our focus is there.
Curtis Anderson: I'll now turn the call over to Terry Earley, our Chief financial officer to discuss our financial highlights.
Terry Earley: Thank you Curtis.
Terry Earley: On page seven when I looked at the results for 2024.
Terry Earley: The balance sheet is in a good place liquidity a strong reliance on wholesale funding is down 20% in the last year capital and reserves are up and creek concentration levels are within the regulatory guidelines.
Terry Earley: Moving to page eight.
Terry Earley: CET, one ratio expanded by 23 basis points during the quarter and by 80 basis points year over year and now stands at 11.19%.
Terry Earley: Over the last two years, a significant contributor to the expansion into capital ratios is attributes to approximately $750 million decline in risk weighted assets.
Terry Earley: Book value per share is at $21 61.
Terry Earley: Slightly from the third quarter of 2024 as the increase in AFC.
Terry Earley: And our quarterly dividend were offset by earnings that's a 10, 9% increase on a year over year basis, including the shareholder dividends.
Terry Earley: It's worth noting that since <unk> went public in 2014, it's compounding tangible book value per share at a rate of 11, 1%, including the dividends have been paid to shareholders.
Terry Earley: Finally bearing tax did not purchase any shares during the quarter, we have 93% of the authorized stock buyback program remaining.
Terry Earley: <unk> to be an intent to be opportunistic and in shoes.
Terry Earley: On to page nine the allowance now sits at 118 basis points up significantly in the last eight quarters as we've increased the reserve by almost 25% or $22 million.
Terry Earley: When you exclude the mortgage warehouse the ACL coverage rises to 125 basis points, our general reserves comprised 97% of the total allowance we continue to use conservative economic assumptions and our credit loss modeling with 65% of the waiting on downside scenarios in prior quarters. It was 75.
Speaker Change: Percent of the downside.
Speaker Change: This change seems appropriate given the change administration business optimism strength in GDP et cetera.
Speaker Change: Over quarter decline the absolute dollar amount of reserves makes sense. When you look at the decline in loan Outstandings the improvement in our credit risk profile and the level of business optimism.
Speaker Change: Moving to page 10.
Speaker Change: Total loans declined one 2% during Q4 and 7% on a year over year basis, we've made significant progress in reducing our CRE and ADC concentrations and ended the quarter at $2 99 at 87, respectively.
Speaker Change: The significant decline in ADC can be seen in the top right graph and it's been largely offset with growth in multifamily and mortgage warehouse agreement.
Speaker Change: Agreed maturity profile is shown in the bottom right graphs, we have just under $400 million in fixed rate maturities at an average rate of 548% over the next four quarters.
Speaker Change: As shown on the bottom left one production increased 44, 44% from 2023 to 2024, but loan payoffs remain elevated at almost $1 4 billion, we're projecting payoffs to be even higher in 2025.
Speaker Change: This payoff activity reflects the vibrant economic activity in the Texas market, but it does make organic loan growth challenging.
Speaker Change: Slide 11 provides the detail of the term Korean agency portfolios by asset class, including Whatsapp State. It also shows a breakdown of our apps take loan portfolio, including the significant impact of our national businesses in mortgage the true percentage of the upstate portfolio. There's only 11% this is predominantly.
Speaker Change: Where we've fallen Texas real estate clients to other geographies.
Speaker Change: On page 12.
Speaker Change: Our strong deposit growth and loan growth has allowed <unk> to reduce its loan to deposit ratio from 104% to 89% over the past two years, we intend to remain below 90% going forward. Please note the loan to deposit ratio would be just under 83%. If you exclude mortgage warehouse this seems to be the more relevant.
Speaker Change: When you consider the short amount of time mortgages stay on the warehouse lines. The deposit growth also allowed us to reduce our wholesale funding reliance to 16, 6%, 24% over the same two year period.
Speaker Change: As you can see in the bottom left graph, we've kept the time deposit portfolio portfolio short at two 3 billion in CD maturities over the next few quarters with an average rate of 495%.
Speaker Change: Glad to have this maturity profile given the fed cuts that have occurred and the potential for more in 2025.
Speaker Change: On the bottom right, we shed the monthly cost of total deposits note that 30 basis point decline since then lots of change.
Speaker Change: <unk> has done a good job in preparing for and executing on deposit pricing in a falling rate environment.
Speaker Change: Keep rates by 100 basis points in the last two quarters of the year and our interest bearing transaction accounts declined by 80 basis points from June 30 to December 31, and 80% beta.
Speaker Change: Similarly, total interest bearing deposit accounts declined by 66 basis points from the end of Q2 and the end of Q4.
Speaker Change: 2024, it was a successful year of deposits with all of our growth coming from our core lines of business. These deposits carrying an interest cost is approximately 170 basis points below our other more expanding expensive funding options.
Speaker Change: In Q4, this allowed us to reduce brokerage Cds by $254 million public bonds by 233 and to exit climbed over 100 million of deposits, which carry the highest rate in the entire bank.
Speaker Change: Our remixing of deposits as a key strategic priority as we get through 2025 and beyond.
Speaker Change: <unk> 13, net interest income decreased by $4 million in Q4, possibly impacting your results were lower deposit yields improved deposit mix and higher debt securities volumes. Ngls. These were offset by lower floating rate asset yields lower average loan volume and interest reversals on problem loans.
Speaker Change: Net interest margin decreased 10 basis points from Q3 to three 2%.
Speaker Change: As you look at our interest rate sensitivity note that are down 100.
Speaker Change: 100 basis point rate shock is at two 5% down from four 6% over the last year at 39% improvement as we work to make the <unk> balance sheet more rate neutral. We believe that <unk> has dropped in Q4 and should be in the range of $3 25 to $3 30 in Q1.
Speaker Change: Assuming no fed cuts during the quarter keeping.
Speaker Change: Keep in mind, the following three things.
Speaker Change: One the repayment of the $75 million in sub debt in February of 2025, which is accruing a sofa plus 347 basis points. We filed an 8-K, but should have also called it out in the earnings release restructuring of the investment portfolio in Q4, and the time lag on the repricing of the time deposits.
Speaker Change: Slide 14 shows certain metrics on our investment portfolio are the key takeaways. It's only 11, 6% of assets. The duration is three six years and 88% of the portfolio sale to the NFS.
Speaker Change: Finally on this slide you see a snapshot of our securities loss trade and completed in the fourth quarter.
Speaker Change: Youll pick up on 189 million of trading volume is 178 basis points and the earn back of the loss will be just under one four years.
Speaker Change: Slide 15, operating noninterest income increased $1 3 billion.
Speaker Change: To $14 5 million.
Speaker Change: The increase was driven by the best quarter of the year and our government guaranteed loan business, partially offset by lower loan fees and lower Oreo rental income.
Speaker Change: $1 million increase in operating expenses for the quarter was a function of higher professional and regulatory fees and data processing and software.
Speaker Change: Recognizing the need to improve our operating leverage and efficiency vertex in the second quarter engaged with a national consulting firm with extensive banking expertise to look at all aspects of the company distributes consisted of staffing operational processes and technology, we've already realized to 19%.
Speaker Change: Reduction in certain technology enter contracts other key contracts are in scope for renewal in 2025 and beyond.
Speaker Change: Two other areas, where we benchmark poorly include Treasury management and commercial banking.
Speaker Change: We engaged a firm to help US review, our Treasury management product line and pricing structure and to help US complete the total commercial lending business model review.
To wrap up my comments I see a lot of positives there.
Speaker Change: Balance sheet is in a much stronger position with excess liquidity lower Korean ADC concentrations higher capital and improve credit metrics, we have reduced reliance on unattractive, we price deposits.
Speaker Change: Our teams are stronger in almost every area of the bank and we're in great markets. Its.
Speaker Change: In Houston, it's hard to do better than that also theres still thinks we need to work on that continuing to trend in improving the credit risk profile remixing, the deposit portfolio and disciplined loan growth and continuing to build out our fee businesses with growth expected in deposit fees card revenue customer swap.
Speaker Change: <unk> and government guaranteed income.
Speaker Change: It is our expectation that 2025, we will produce positive operating leverage this will be driven by an improved net positive loan growth and stronger fee revenues, partially offset by moderate expense growth operator, we'll now take questions.
Speaker Change: Thank you.
Speaker Change: To ask a question. Please press star one on your telephone you will then hear an automated message advising your hand is raised we also ask that you. Please wait for your name and company to be announced before proceeding with your question one moment, while we compile the Q&A roster.
Speaker Change: The first question fruits for today will be coming from the line of Stephen Scouten of Piper Sandler. Your line is now open.
Stephen Scouten: Hey, Thank you and good morning, everyone.
Speaker Change: Malcolm I think you said.
Speaker Change: In the release, obviously that 2025 will be more about back to growing profitability. I think you said earlier here the target being 1% ROA I think I heard you say in 2025 and beyond just kind of wanted to confirm.
Speaker Change: Firm, how youre thinking about reaching that 1% ROA in kind of a potential timing there and then what you think the biggest driver.
Speaker Change: Of that profitability improvement will be in the year ahead or biggest drivers if theres multiple.
Speaker Change: Yes. So yes, you heard me correct, we do believe it's 2025.
Speaker Change: Yes.
Speaker Change: Q3 is probably a good quarter to hit that number the drivers of that is going to be.
Loan growth and repricing on the deposit side.
Speaker Change: Continue to see some good movement there.
Speaker Change: The headwind.
Speaker Change: We both Gary and I. Both mentioned was just the payoff number if you recall, we had such strong growth back in 'twenty, one 'twenty two that now those are matured.
Speaker Change: Matured and data those payoffs are coming we're not going to go back to the <unk>.
Speaker Change: $3 20 range.
Speaker Change: CRE and so theres a bit more reliance on the C&I side, but with the SaaS, we have with them is doing on that side of the business.
Speaker Change: We feel we feel really really good about where we're headed.
Speaker Change: Is your opening comment was right vertex has been a growth story for most of its career. Obviously, we spent two years re <unk> the balance sheet, we feel like that work's done.
Speaker Change: And we can really focus on what we do best and so.
Speaker Change: I do.
Encouraged and think that we can get there.
Speaker Change: But Q3 is probably the first quarter do you guys see it and hoped to be high enough to where your average will be around one yes, Steven Terry Let me jump in.
Speaker Change: These figures are going to be more important to us this year than they've ever been and that's why you heard me say is Alps wrapping up my comments.
Speaker Change: We're going to continue to build out our fee businesses, whether its deposit fees Treasury management fees card revenue customer swaps government guaranteed it's going to be a significant contributor for us and so I agree with everything you said I just didn't want you to lose sight of how important the fee businesses are for us 2025.
Speaker Change: Got off to a pretty good start with two really nice relationships on the fee side then regarding already so.
Speaker Change: So hope that helps answer the question.
Speaker Change: Hey, just for sure I appreciate that and then kind of on the loan growth front I mean, obviously as you said you are facing a pretty big headwind spill from some can pay off.
Speaker Change: It's understandable and probably beneficial to the balance sheet, but what are you seeing so far in terms of any inflections from your customers in terms of.
Speaker Change: Pipeline growth ex the CRE book.
Speaker Change: Or kind of what gives you confidence whether it's mortgage warehouse or other that you can see that inflection kind of towards the back half of the year.
Speaker Change: I mean actually the production side of our business has been really strong the pipelines are as strong as they've ever been.
Speaker Change: I had a director asked me about.
Speaker Change: Real estate activity is really going on well I can tell you and the state of Texas, It's pretty strong.
Speaker Change: And the underwriting is it's continued to be pretty.
Speaker Change: Pretty stringent on the bank side, where we're seeing deals with 45% equity hit a pretty.
Speaker Change: Pretty granular.
Speaker Change: Regular.
Speaker Change: Most things go is competitive.
Speaker Change: Juices gift flow youre going to see that 45 to 40.
Speaker Change: Probably get the 35 now we're not going to we're not got dumbed down our credit underwriting, but the activity is still very very staff.
Speaker Change: We have to do.
Speaker Change: I'll, let be in for a new loan stomach real estate side. This year just to stay even and we feel pretty confident we'll be able to do that yeah. Sorry go ahead at a momentous Fas again theres a lot of strength Stephen in the fourth quarter on the production side. If you annualize Q4 loan production, it's 50% bigger.
Speaker Change: And the full year.
Speaker Change: Some of that's been in the ADC side, which does start to fund up for six months nine months. So we can see that.
Speaker Change: It's coming but we are still going to have that so that's why we're seeing it.
Speaker Change: Q4 production was way stronger than the first three quarters of the year and so and pipelines continue to build so anywhere.
Speaker Change: Yes, now Thats great color and then just last thing for me.
Speaker Change: The $1 $5 billion in maturing Cds in the first quarter.
Speaker Change: I see.
Speaker Change: They were with.
Speaker Change: Little over 552% on average what do you think you'll be able to put those back on the books at and what would you think is like a viable retention rate of those customers as you as you lower those rates.
Terry Earley: We will take that question Steven Thanks, Terry.
Speaker Change: So far in Q1 2025.
Speaker Change: Putting on new Cds at $4 24, right.
Speaker Change: We've seen.
Speaker Change: Experience really given.
Speaker Change: Retention some of that we are seeing some migration to out of Cds and the money market and other products, but in terms of overall potential delays.
Speaker Change: Great extremely helpful I will jump back in the queue. Thanks, so much.
Speaker Change: Thanks Steven.
Speaker Change: Thank you one moment to the next question.
Speaker Change: And the next question will be coming from the line of Matt Olney of Stephens. Your line is open.
Matt Olney: Hi, Thanks, good morning.
Speaker Change: The comment about positive operating leverage for 2025.
Speaker Change: You mentioned the expect moderate expense growth just any more color about expenses for 2025.
Speaker Change: Low to mid single digits.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: And then going back to the loan growth commentary.
Speaker Change: I'm just kind of.
Speaker Change: So we can get some disciplined loan growth some NIM expansion and good fee execution.
Speaker Change: Good about the opportunity to really get to positive operating leverage.
Speaker Change: With that type of expense growth.
Speaker Change: Got it okay.
Speaker Change: And then on the going back to the loan growth discussion I think you mentioned the pay downs.
Speaker Change: Obviously severe in 2024, it sounds like that will continue for at least for a portion of 2025, just any more color on when do you think.
That could and flat for at least at least slowed down to allow the net loan balances start to grow throughout the year.
Speaker Change: Our our projections in our forecast right now looks like the heaviest piece of those payoffs come in the back half of the year.
Speaker Change: But again those are payoffs are a little bit harder to predict.
Speaker Change: But actually we've done a pretty good job at that I see that first quarter is going to be pretty stable at best and then with these pipelines that Terry just discussed.
Speaker Change: Do you see some of that to start to fund up or see our commercial business is starting to get stronger on the pipeline side. So I expect that we're going to start seeing some growth in the second quarter.
Speaker Change:
Speaker Change: But overall, Matt I think it's probably going to be a low to single mid.
Speaker Change: Digits, probably for the year.
Speaker Change: <unk>.
Speaker Change: But again hard to predict where all of those payoffs are coming but they're coming.
Speaker Change: And that's assuming that's really if anything were to really happen significant pad and rates.
Speaker Change: Especially long term rates fail it could accelerate that.
Speaker Change: We don't expect that understand that's the wildcard really yes, you don't know.
Speaker Change: Okay.
Speaker Change: Hey, guys. Thanks for your help.
Speaker Change: Thanks, Matt Thanks, Matt.
Speaker Change: Thank you one moment for the next question.
Speaker Change: And our next question will be coming from the line of Mark suddenly.
Speaker Change: VW Your line is open.
Speaker Change: Hey, good morning.
Speaker Change: Good morning.
Speaker Change: So on the deposit side like you said there is some good funding remains kind of out of Cds, but there is also a noninterest bearing decline in the quarter and I was wondering.
Speaker Change: If you could kind of talk about the dynamics at play there and where you think that noninterest.
Speaker Change: Noninterest bearing kind of settles out for the quarter.
Will: Sure. Yes. This is will.
Speaker Change: Thanks for the question.
Look this quarter, we had we had some seasonal fluctuations.
Speaker Change: Accident insurance payments.
Speaker Change: Payments for mortgage escrow accounts, we also exited an expensive.
Speaker Change: We are deposit relationship.
Speaker Change: Paying around fed funds, so that was intentional so when you look at our non interest bearing on some of those escrow accounts, we do pay and ECR this doesn't flow through the deposit costs.
Speaker Change: So this was plan this was anticipated and.
Speaker Change: Sure.
Speaker Change: Several several facets of actually improves our earnings and so seasonality, where do I expect it will build back up.
Speaker Change: And range between 21, and 23%, but the rest of the year.
Speaker Change: Okay. Thanks, that's helpful and then.
Speaker Change: Maybe switching over to the government guaranteed side, obviously that was really strong this quarter.
Speaker Change: I know that business is kind of lumpy and can be difficult to project, but is there any additional color you can give.
Speaker Change: To help us model that in 2025.
Speaker Change: I would just make two comments one well three we're off to a good start in 'twenty two premiums are holding in very very well and three our pipelines and business production is strongest they've ever been.
Speaker Change: Especially in the SBA space, she talked about how we're trying to rebalance and almost pre event the USDA business, but.
Speaker Change: Overall, we're really encouraged by what we're seeing the team's doing a great job and so we're pretty bullish.
Speaker Change: Great well that's it for me thanks for taking my question.
Peter: Thank you Peter.
Peter: Thank you one moment for the next question.
Speaker Change: And the next question will be coming from the line of Tim Mitchell of Raymond James Your line is open.
Tim Mitchell: Hey, good morning, guys.
Speaker Change: Sure.
Speaker Change: On certain credit.
Speaker Change: See the continued improvement in credit size and special mentioned.
Speaker Change: Looks like there was some migration into NPA is just how youre thinking about credit going forward and what should we kind of expect net charge off ratio in 2025.
Speaker Change: Yes, I mean listen I think we did a decent job of managing a bunch of stuff out.
Speaker Change: Large here or there to help assist in that we did have I think 21 basis points in charge offs or 24.
Speaker Change: We expect to probably be in that range for 2005, it could be a little better it could be a little bit worse, but thats a pretty good range of about 20 bps going forward.
Speaker Change: But overall I mean, you brought up the credit piece and just what Curtis and his teams have done at moving this stuff has been incredible.
Speaker Change: And there's still some there's still some more movements do recall, we only got this job back in March of last year.
Speaker Change: So in fairly short order, we've moved into a good place. So the good news is.
Speaker Change: Got rid of the surprises and we know what's coming down the pipe and we're managing it much earlier than we've ever had before so again.
Speaker Change: We're very confident that credit continues to get better going forward.
Speaker Change: Awesome.
Speaker Change: Back to the margin I think you said $325 to $3 30 here in the first quarter.
Speaker Change: And the bulk of that.
Speaker Change: CD maturity in the first quarter, but there's still some opportunity to pass through.
Speaker Change: Assuming rates are relatively stable is it fair to assume the margin can continue to grind a little higher.
Speaker Change: Through the rest of the year.
Speaker Change: Yes, yes, I think.
Speaker Change: Given no no more rate changes I think we will see continued expansion, we do have a hedge that debt matures at the end of Q1, that's $250 million.
Speaker Change: Our money market accounts at 42 basis points. So there will be a little bit of a headwind from that but we.
Speaker Change: We expect the things that Terry mentioned sub debt rolling off with what we've done on the securities portfolio.
Speaker Change: Continued improvement on the deposit side too.
Speaker Change: To drive.
Positive NIM for the full year.
Speaker Change: Yeah.
Speaker Change: Awesome well thanks.
Speaker Change: Thanks for taking my questions.
Speaker Change: Thank you.
Speaker Change: Thank you one moment for the next question. Please.
Speaker Change: And the next question will be coming from the line from our Tucson.
Listen your line is open.
Speaker Change: Hey, good morning, guys modifying nonpregnant tenor.
Speaker Change: I appreciate the December deposit cost detail.
Speaker Change: Can you provide a spot rate as of 12 31.
Speaker Change: Yes.
Speaker Change: Spot rate for deposits as of 12 31.
Speaker Change: Interest at $3 99, and for totaled $3 19.
Speaker Change: Yes.
Speaker Change: I.
Speaker Change: Hit that and on the slide 11.
Speaker Change: How much of that is 20 million out of state balance is ADC versus CRE and any geographic concentration there.
Speaker Change: The other states up there.
Speaker Change: It's the $820 million of the billion 61 to <unk> 80.
Speaker Change: 80% of it give or take.
Those particular state.
Speaker Change: Oncentration.
Speaker Change: That I'm aware of.
Speaker Change: We have not been we're not aware of any issues with respect to California, or it's correct correct. That's correct.
Speaker Change: Alright that sounds good.
Speaker Change: Great to see the SBA and USDA loans.
Speaker Change: The gain on sale pickup there.
Speaker Change: Any thoughts around that.
Speaker Change: That business line heading into 2025.
Speaker Change: Nothing.
Speaker Change: Already said very very positive lots of momentum going forward.
Speaker Change: Buying the two businesses. So they are feeding off of each other.
Speaker Change: Again premiums are holding in their pipelines are super strong so we're pretty bullish on 2025.
Speaker Change: The government guaranteed business, but to the extent its USDA it'll be lumpy, so but for the year and Thats. The way we tend to think about this business as the full year.
Speaker Change: Don't don't get frustrated with the Lumpiness when it's a USDA right.
Speaker Change: Alright.
Speaker Change: Makes sense. Thank you for taking my questions.
Speaker Change: Thank you and that does conclude today's Q&A session I would like to go ahead.
Matt Olney: Oliver It's Matt.
Speaker Change: Tim Mallory <unk> remarks.
Matt Olney: Hello.
Matt Olney: You can go ahead with your closing remarks.
Matt Olney: Yes, ma'am thank you.
Matt Olney: So I wanted to close today with a management update.
Matt Olney: Six years ago, when we close the Green Bank transaction and at the time, we're blessed to have Terry Earley, our Chief Financial Officer.
Speaker Change: <unk> has been the ultimate team player and partner to me and the entire <unk> family is knowledge expertise counsel and wisdom to our company cannot be measured best said, you just made us a better bank.
Speaker Change: Sheri will be retiring this summer on June 30.
Speaker Change: But he will not be leaving US entirely you will become a part of our bank board as well as entering into a consulting agreement assisting in the finance area and assisting in the transition.
Speaker Change: Our new CFO will be will Hartford, who many of you will already know real has been with <unk> for 13 years, serving in all areas of finance.
Speaker Change: We are very excited for both Terry and well in their new roles. Thanks for your time today, and we look forward to speaking to you soon.
Speaker Change: Thank you all for joining today's conference call. This does concludes today's meeting you all may disconnect.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.