Q2 2025 South Plains Financial Inc Earnings Call
During today's presentation, all parties will be in a listen only mode.
Following the presentation, the conference will be open for questions and 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 Steve Crockett, Chief Financial Officer and Treasurer of South Plains Finance. Please go ahead.
Thank you, operator. And good afternoon, everyone. We appreciate you joining our earnings conference call.
Good afternoon, ladies and gentlemen, and welcome to the South Plains Financial second quarter 2025 earnings conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions and 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 Steve Crockett to financial officer and treasurer of South Plains Financial. Please go ahead.
With me here today are Curtis Griffith, our Chairman and CEO, Cory Newsom, our President, and Brent Banks, Chief Credit Officer.
The related earnings press release and earnings presentation are available on the news and events section of our website, spfi.bank.
Speaker Change: Thank you operator and good afternoon everyone. We appreciate you joining our earnings conference call with me here today. Our Curtis Griffith our chairman and CEO. Corey, gnome our president and Brent Banks, Chief credit officer
Before we begin, I'd like to remind everyone that any forward-looking statements are subject to risk, uncertainties, and other factors that could cause actual results to differ materially from these anticipated future results. Please see our safe harbor statements in our earnings press release and in our earnings presentation.
Speaker Change: The related earnings press release and earnings presentation are available on the news and events section of our website spfi Bank.
Speaker Change: Before we begin, I'd like to remind everyone that any forward-looking statements are subject to risk, uncertainties, and other factors that could cause actual results to differ materially from these anticipated, future results.
All comments expressed or implied made during today's call are subject to those Safe Harbor State Any forward-looking statements made during this call 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.
Speaker Change: please see our Safe, Harbor statements in our earnings, press release, and in our earnings presentation,
Speaker Change: all comments expressed or implied made during today's call are subject to those Safe Harbor statements.
Additionally, during today's call, we may discuss certain non-GAAP financial measures, which we believe are useful in evaluating our performance.
Speaker Change: Any forward-looking statements made during this call 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.
Reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures can also be found in our earnings release and in the earnings presentation.
Speaker Change: Additionally, during today's call, we may discuss certain non-gaap Financial measures which we believe are useful in evaluating our performance.
Curtis, let me hand it over to you. Thank you, Steve, and good afternoon.
Reconciliation of these non-gaap Financial measures to the most comparable. Gaap Financial measures can also be found in our earnings release, and in the earnings presentation,
I just let me hand it over to you.
I would like to start by extending our deepest sympathies to all of those impacted by the floods in the Texas Hill Country over the Fourth of July weekend, as well as the more recent flooding in our Rio Dos of New Mexico market, including our employees and customers. This has been a tragic event for those regions and across the states, and we will do our part to help those impacted through this challenging time.
Speaker Change: Thank you, Steve and good afternoon.
Speaker Change: I would like to start by extending our deepest sympathies to all of those impacted by the floods in the Texas Hill Country over the 4th of July weekend as well as the more recent flooding in our regional New Mexico Market, including our employees and customers.
Turning to slide four of our presentation, our second quarter results are a testament to the hard work of our dedicated employees, who I always thank for their commitment to the bank and our customers. Their efforts have positioned us for success as we continue to achieve margin expansion through the second quarter as our cost of funds declined once again. Additionally, we believe the credit quality of our loan portfolio remains solid as we aggressively manage the portfolio to proactively address challenges with our customers.
This has been a tragic event for those regions and across the states. And we will do our part to help those impacted through this challenging time.
Turning to slide 4 of our presentation. Our second quarter results are a testament to the hard work of our dedicated employees who I always thank for their commitment to the bank and our customers.
Their efforts have positioned us for success as we continue to achieve margin expansion, through the second quarter as our cost of funds declined. Once again
As Cory will touch on, our proactive management of our loan portfolio has also contributed to a higher level of early paydowns. Once again, this quarter, which has been expected. Despite this headwind, we achieved modest loan growth in the quarter and continue to have a healthy loan pipeline. We also continued to build capital through the quarter, which positions us for continued growth.
Speaker Change: Additionally, we believe the credit quality of our loan portfolio remains solid, as we aggressively manage the portfolio proactively address challenges with our customers.
Speaker Change: As Corey will touch on our ProActive Management of our lawn portfolio has also contributed to a higher level of early pay Downs. Once again, this quarter, which has been expected,
Speaker Change: Despite this headwind, we achieved modest loan growth in the quarter and continue to have a healthy loan pipeline.
I'm very proud to say that our bank sits on a strong foundation, and we believe is positioned to weather potential economic headwinds that may arise from the uncertainty created by the ongoing tariff negotiations and ultimate tariff rates that will be enacted. That said, Texas continues to perform well, having delivered healthy economic growth through the second quarter.
Speaker Change: We also continue to build Capital through the quarter, which positions us for continued growth.
Speaker Change: I'm very proud to say that our bank sits on a strong Foundation.
Against this backdrop, we believe that we are in a strong position to take advantage of opportunities as they present themselves and are pursuing a strategy to increase the assets of the bank centered on both organic growth and M&A.
And we believe is positioned to weather potential economic headwinds, that may arise from the uncertainty created by the ongoing tariff negotiations, and ultimate tariff rates that will be enacted. That said, Texas continues to perform well, having delivered healthy economic growth through the second quarter.
Against this backdrop, we believe that we are in a strong position to take advantage of opportunities as they present themselves.
As Cory will cover, our organic growth strategy is focused on expanding our lending capabilities to accelerate the pace of loan growth over time. Our community based deposit franchise continues to provide a stable, lower cost funding source for loan growth across our markets. And our team has done a terrific job growing our loan portfolio over the past five years. We believe that we have opportunities to accelerate that growth as well as continue to push for core deposit growth as we seek to balance our liquidity goals.
Speaker Change: And are pursuing a strategy to increase the assets of the bank, centered on both organic growth and m&a.
Speaker Change: As Corey will cover, our organic growth strategy is focused on expanding our lending capabilities to accelerate the pace of loan growth over time.
Speaker Change: Our community-based deposit franchise continues to provide a stable lower cost funding source for loan. Growth across our markets and our team has done a terrific job growing. Our loan portfolio, over the past 5 years.
M&A has also been part of our strategy to grow the bank in an area that we have experienced, most recently having acquired West Texas State Bank in 2019, which expanded our reach into the Permian Basin. We remain interested in further growing through an accretive acquisition and have already begun to see the pace of industry transactions accelerate, most notably Huntington's announced acquisition of Veritex on Monday, which reflects the current political and regulatory environment. We believe this improved climate for deals will also help sellers expectations become more realistic. While we are closely watching the market and are always open to having conversations, we have not yet found an opportunity that makes sense for the bank and our shareholders.
We believe that we have opportunities to accelerate that growth as well as continued to push for core deposit. Growth as we seek to balance our liquidity goals,
Speaker Change: Reach into the puran Bison.
We remain interested in further growing through an accretive acquisition and have already begun to see the pace of Industry. Transactions. Accelerate, most notably Huntington's announced acquisition of veritex on Monday, which reflects the current political and Regulatory environment.
Speaker Change: We believe this improved climate for deals will also help sellers expectations, become more realistic.
We continue to have a strict criteria for a deal and are only interested in acquiring a bank with the right culture, an asset liability profile that meets our needs, a stable deposit base, and at a valuation that makes sense. We can be patient given the organic growth opportunities that we have across our market.
Speaker Change: While we are closely watching the market and are always open to having conversations. We have not yet found an opportunity that makes sense for the bank and our shareholders.
We continue to have a strict criteria for a deal and are only interested in acquiring. A bank with the right culture and asset liability profile. That meets our needs a stable deposit base and at a valuation that makes sense.
Importantly, we believe that we are in a strong position to capitalize on opportunities to drive growth as the bank and the company each significantly exceed the minimum regulatory capital levels necessary to be deemed well capitalized.
Speaker Change: We can be patient given the organic growth opportunities that we have across our markets.
At June 30, 2025, our consolidated common equity Tier 1 risk-based capital ratio was 13.86%, and our Tier 1 leverage ratio was 12.12%.
Speaker Change: Importantly, we believe that we are in a strong position to capitalize on opportunities to drive growth as the bank and the company. Each significantly exceed the minimum regulatory Capital levels necessary to be deemed. Well, capitalized,
For more information visit www.FEMA.gov We have the capital to support our customers as they continue to expand their business. Given our capital position, we remain focused on both growing the bank while also returning a steady stream of income to our shareholders through our quarterly dividend and keeping a share buyback program in place.
Speaker Change: At June 3025, our Consolidated, common Equity, Tier 1 risk-based. Capital ratio was 13.86% and our Tier 1. Leverage ratio was 12.12%.
Speaker Change: We have the capital to support our customers as they continue to expand their businesses.
Speaker Change: Given our Capital position, we remain.
Now let me turn the call over to Cory. Thank you, Curtis. And hello, everyone. Starting on slide five, our loans held for investment increased by $23.1 million or 3% annualized to $3.1 billion in the second quarter as compared to the link quarter. We experienced broad based loan growth across our portfolio as we continue to bring solid business to the bank focused on long term customer relationships. Our yield on loans was 6.99% in the second quarter as compared to 6.67% in the linked quarter. Our loan yield was boosted by 23 basis points in the second quarter as a result of a $1.7 million interest recovery from the full repayment of a loan that had been on non-accrual.
Speaker Change: Focused on both growing, the bank. While also returning, a steady stream of income to our shareholders, through a quarterly dividend, and keeping a share buyback programme in place.
Corey Gnome: Now, let me turn the call over to Corey.
Corey Gnome: You Curtis and hello, everyone.
Starting on the slide 5, our loans held for investment, increased by 23.1 million, or 3%, annualized to 3.1 billion dollars in the second quarter as compared to the linked quarter. We experienced broad-based loan growth across our portfolio, as we continue to bring solid business to the bank focused on long-term customer relationships.
Corey Gnome: Our yield on loans was 6.99% in the second quarter as compared to 6.67% in the linked quarter.
Excluding this one-time gain, the yield on loans was 6.76%, an increase of nine basis points as compared to the first quarter. Looking forward, we expect the yield on our loan portfolio to stabilize near current levels pending further short-term interest rate changes by the FOMC. Importantly, our new loan production pipelines remain solid, and economic activity continues to be healthy. As we look across our markets, we have a strong position in each of the communities and metro markets where we do business. We also have the capacity within our existing infrastructure and through actively recruiting lenders who fit our culture to grow our lending capabilities as we work to accelerate our loan growth and increase the assets of the bank.
Corey Gnome: Our loan yield was boosted by 23 basis points in the second quarter as a result of a 1.7 million interest recovery from the full repayment of a loan that had been on non-approval.
Corey Gnome: Excluding this 1-time gain, the yield on loans was 6.76% and increase of 9 basis points as compared to the first quarter.
Looking forward. We expect the yield on our loan portfolio to stabilize near current levels. Pending further short-term interest rate changes by the fomc.
Corey Gnome: importantly, our new Loan Production pipelines remain solid and economic activity, continues to be healthy
Corey Gnome: As we look across our markets, we have a strong position in each of the communities and Metro markets where we do business.
We are working to expand our team across our entire footprint and are pleased with the quality of bankers that we are speaking with and who have an interest in joining South Plains. During the second quarter, we recruited several experienced lenders in the Dallas area who have long, successful track records and strong relationships in the market. We believe that they will be able to bring new relationships to South Plains which will be supportive of loan and deposit growth over time. While we believe in the strength of our loan production and new business pipeline, we've continued to experience a heightened level of loan payoffs.
We also have the capacity within our existing infrastructure and through actively recruiting lenders who fit our culture to grow our lending capabilities, as we work to accelerate our loan growth and increase the assets of the bank.
Corey Gnome: We are working to expand our team across our entire footprint, and are pleased with the quality of Bankers that we are speaking with and who have an interest in joining South Plains.
During the second quarter, we recruited several experienced lenders, in the Dallas area who have long successful track records and strong relationships in the market.
Corey Gnome: We believe that they will be able to bring new relationships to South Plains which will be supportive of loan and deposit growth over time.
We had payoffs of three multi-family property loans that totaled $49.1 million in the second quarter and mitigated our loan growth. We expect this higher level of loan payoffs to continue and that our loan growth will be flat to up low single digits in the third quarter. Skipping to slide 7, loans in our major metropolitan markets of Dallas, Houston, and El Paso decreased by $26 million in the second quarter to $1.01 billion. Of note, the heightened level of loan payoffs in the second quarter exceeded our new loan production in these markets, which drove the decline in loan balance.
While we believe in the strength of our Loan Production and new business pipeline, we've continued to experience a heightened level of loan payoffs.
Corey Gnome: We had payoffs of 3 multi-family property loans that total 49.1 million in the second quarter. And mitigated, our loan growth, we expect this higher level of loan payoffs to continue. And that our loan growth will be flat to up low single digits in the third quarter.
Corey Gnome: Skipping to slide 7.
The good news is that these payoffs included the problem loan we've discussed on prior calls. Importantly, this had been expected and we anticipate that loan payoffs will begin to moderate in the third quarter, though we remain a headwind to loan growth. Looking forward, we are optimistic that the loan growth will re-accelerate given expected economic growth combined with the addition of new lenders in the Dallas market. At quarter end, our major Metro loan portfolio represented 32.7% of our total loan portfolio.
Loans in our major Metropolitan markets of Dallas Houston and El Paso decreased by 26 million dollars in the second quarter to 1. 0 1 6.
Corey Gnome: the good news is that these payoffs included the problem on we've discussed on prior calls,
Importantly, this had been expected and we anticipate that loan. Payoffs will begin to moderate in the third quarter. Though will remain a headwind to lung growth.
Looking forward. We are optimistic that the loan growth will re accelerate given expected economic growth combined, with the addition of new lenders in the Dallas Market.
Give me to slide 10. Our indirect auto loan portfolio modestly decreased to $241 million at the end of the second quarter, as compared to $243 million at the end of the link quarter. We saw a change in behavior as consumers began to slow their spending in May as a result of the expected tariffs which were announced in early April.
Corey Gnome: At quarter end, our major Metro loan portfolio. Represented 32.7% of our total loan portfolio.
Corey Gnome: At the end of the link quarter.
This behavior may persist to remain a headwind to indirect auto loan production in the short term. As we discussed on the first quarter call, we've tightened our loan to value requirements in our indirect auto portfolio to ensure we proactively manage We are closely monitoring the effects of the expected tariffs on our local economy, the consumer and used car prices as we tightly manage our portfolio. Importantly, we believe the credit quality of our indirect portfolio remains very strong and we're pleased to see our 30 plus days past due loans improved nine basis points to 32 basis points in the second quarter as compared to 41 basis points in the first quarter and 47 basis points in the fourth quarter of 2024.
Corey Gnome: We saw a change in Behavior as consumers, began to slow their spending in May as a result of the expected tariffs which were announced in early April.
Corey Gnome: May persist to remain a headwind to indirect Auto Loan Production in the short term.
As we discussed on the first quarter, call, we've tightened our loan loan to value requirements. In our indirect Auto portfolio to ensure we proactively manage the current environment in any potential challenges to come.
Corey Gnome: We are closely monitoring the effects of the expected tariffs on our local economy. The consumer and used car prices as we tightly manage our portfolio.
We believe our tightened credit standards will further protect the bank and the credit profile of our indirect auto portfolio.
Corey Gnome: Importantly, we believe the credit quality of our indirect portfolio, remains very strong and we're pleased to see our 30 plus days past 2 loans. Improved 9 basis points to 32 basis points. In the second quarter is compared to 41 basis points in the first quarter and 47 basis points in the fourth quarter of 2024
Looking to the second half of 2025, we remain cautiously optimistic that economic growth across our Texas markets can remain resilient, and continue to expect our loan growth to trend to the lower end of our low to mid single digit range for the full year 2025.
Corey Gnome: We believe our Titan credit standards will further protect the bank and the credit profile of our indirect Auto portfolio.
Turning to slide 11, we generated $12.2 million of non-interest income in the second quarter as compared to $10.6 million in the linked quarter.
Corey Gnome: Looking to the second half of 2025. We remain cautiously optimistic that economic growth across our Texas markets can remain resilient and continue to expect our loan growth to Trend to the lower end of our low to mid single-digit range for the full year 2025.
This was primarily due to an increase of $1.5 million in mortgage banking revenues, mainly from the increase of $1.4 million in the Fair Value Adjustment of Mortgage Servicing Rights Asset, its interest rates that affect the value stabilized in the second quarter of 2025. For the second quarter, non-interest income was 22% of bank revenues consistent with the first quarter.
Corey Gnome: Turning to slot 11, we generated 12.2 million of non-interest income in the second quarter as compared to 10.6 million in the linked quarter.
Corey Gnome: This was primarily due to an increase of 1.5 million in Mortgage Banking, revenues, mainly from the increase of 1.4 million in the fair value adjustment of mortgage servicing rights asset.
Corey Gnome: Is interest rates that affect the value stabilized? In the second quarter of 2025
Continue to grow our non-interest income remains a focus of our time.
Corey Gnome: For the second quarter, non-interest income was 22% of Bank Revenue consistent with the first quarter.
I would now like to turn the call over to Steve. Thanks Cory. For the second quarter, diluted earnings per share were $0.86 compared to $0.72 from the linked quarter. As Cory discussed, there was a $1.6 million recovery of interest, fees, and legal expenses net of tax related to the full repayment of a loan that had previously been on nonaccrual. This equated to a one-time benefit of $0.09 per diluted share in the quarter. Starting on slide 13, net interest income was $42.5 million for the second quarter compared to $38.5 million in the linked quarter. Our net interest margin, calculated on a tax-equivalent basis, was 4.07% in the second quarter as compared to 3.81% in the linked quarter.
Continue to grow our non-interest income remains a focus of our team.
Steve Crockett: I would now like to turn the call over to Steve.
Steve Crockett: Thanks Corey for the second quarter diluted earnings per share were 86 cents compared to 72 cents from the linked quarter.
Steve Crockett: As Corey discussed, there was a 1.6 million dollar recovery of Interest fees and legal expenses. Net of tax
Steve Crockett: related to the full repayment of a loan that had previously been on non-accrual this equated to a 1-time benefit of 9 cents per diluted share in the quarter.
Steve Crockett: Starting on 513.
That interest income was 42.5 million for the second quarter compared to 38.5 million in the linked quarter.
The rise in our NIM in the second quarter was positively impacted by 17 basis points due to the one-time interest recovery that I just mentioned. Excluding this one time gain, our NIM rose nine basis points to 3.90%, primarily due to a five basis point decline in our cost of deposit. As outlined on slide 14, deposits decreased by $53.6 million to $3.74 billion at the end of the second quarter. As we have previously discussed, we experienced a large inflow of public fund deposits during the first quarter, which are higher cost. These funds moved back out of the bank in the second quarter due to seasonality.
Our net interest margin calculated on a tax. Equivalent basis was 4.07% in the second quarter as compared to 3.81% in the linked quarter.
Steve Crockett: The rise in our Nim in the second quarter was positively impacted by 17 basis points, due to the 1-time interest recovery that I just mentioned
Steve Crockett: excluding this 1 time, gain our name Rose 9 basis points to 3.90%
Steve Crockett: Primarily due to a 5 basis, point decline in our cost of deposits.
Steve Crockett: As outlined on slide 14 deposits, decrease by 53.6 million to 3.74 billion dollars. At the end of the second quarter.
Non-interest bearing deposits increased $32.3 million in the second quarter. This, coupled with the decline in public fund deposits, contributed to our non-interest bearing deposits to total deposits ratio increasing to 26.7% in the second quarter from 25.5% in the linked quarter. The mixed shift change in deposits, along with the continued drop in CD rates, contributed to the five basis point decline in our cost of deposits, to 214 basis points in the second quarter, down from 219 basis points in the linked quarter.
Steve Crockett: As we have previously, discussed we experienced a large inflow of public fund deposits during the first quarter which are higher cost. These funds moved back out of the bank. In the second quarter due to seasonality not in interest bearing deposits. Increased 32.3 million in the second quarter.
Steve Crockett: This coupled with the decline in public fund. Deposits contributed to our non-interest-bearing, deposits, to Total deposits ratio, increasing to 26.7%.
Steve Crockett: In the second quarter from 25.5% and the linked core.
The mixed shift change and deposits along with the continued drop in CD rates contributed to the 5 basis. Point decline in our cost of deposits to 214 basis points in the second quarter down from 219 basis, points in the linked quarter.
Turning to slide 16. A ratio of allowance for credit losses to total loans held for investment was 1.45% at June 30, 2025, an increase of five basis points from the end of the prior quarter. We recorded a $2.5 million provision for credit losses in the second quarter, which was largely attributable to an increase in specific reserves, net charge-off activity, increased loan balances, and several credit quality downgrades.
Steve Crockett: Turning to slide 16.
A ratio of allowance for credit losses to Total loans held for investment was 1.45% at June 302025, an increase of 5 basis points from the end of the prior quarter.
Skipping ahead to slide 18, our non-interest expense was $33.5 million in the second quarter as compared to $33.0 million in the linked quarter. $513,000 increase from the first quarter of 2025 was largely the result of an increase of $267,000 in personnel expenses. and $144,000 in increased professional services.
Steve Crockett: We recorded a 2.5 million provision for credit losses. In the second quarter, which was largely attributable to an increase in specific reserves, net charge off activity, increased loan, balances and several credit quality downgrades
Skipping ahead to slide 18. Our non-interest expense was 33.5 million in the second quarter has compared to 33.0 million in the Flint quarter.
Steve Crockett: And 144,000 and increased Professional Service expenses.
Moving to slide 20, we remain well capitalized with tangible common equity to tangible assets of 9.98% at the end of the second an increase of 34 basis points from the end of the first quarter. Tangible book value per share increased to $26.70 as of June 30, 2025, compared to $26.05 as of March 31, 2025. The increase was primarily driven by $12.2 million of net income after dividends paid, partially offset by a $2.3 million decrease, and accumulated other comprehensive income.
Moving to slide 20 we remain. Well, capitalized with tangible, common Equity to tangible assets of 9.98% at the end of the second quarter.
Steve Crockett: An increase of 34 basis points from the end of the first quarter.
Steve Crockett: Tangible book value per share, increased to 26.70 cents as of June 3025 compared to 265 as of March. 31st 2025
This concludes our prepared remarks.
the increase was primarily driven by 12.2 million of net income after dividends paid partially offset by a 2.3 million decrease in accumulated other comprehensive income.
I will now turn the call back to the operator to open the line for any questions. Thank you.
Steve Crockett: This concludes our prepared remarks, I will now turn the call back to the operator, to open the line for any questions, operator.
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Thank you all for joining us today and we look forward to hearing from you in the Q&A If you have any questions, please feel free to ask them in the Q&A section at the end Thank you.
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This next question comes to the line of Stephen Scouten with Pipeline. Good afternoon, everyone. I guess I'd love to start on kind of the loan pipeline. And I, Cory, I appreciate your comments, you kind of said, I think lower end of the low to mid single digit loan growth for 25 based on what you're seeing. But just wondering if you can give some color there and what the pipeline looks like maybe quarter over quarter, just so we can kind of frame up what growth could do in the potential absence of the higher repayment.
Steven Scouten: Thank you. Our first question comes from the line of Steven scouten with Piper Sandler. Please proceed.
Hey, Steven, this is Brent. And, you know, I think Cory said, we feel really good about what we're seeing in the pipeline and really our trend and originations, what's really a bit harder to predict, or we think we can predict the payments that we're getting. But, you know, this quarter, our payments were, you know, in the neighborhood of 15 million higher than last quarter.
Hey, good afternoon everyone. Um, I guess I'd love to start on kind of the lone Pipeline and I've Corey, I appreciate your comments. You kind of said, I think lower end of the low to mid single digit loan growth for 25 based on what you're seeing. But just wondering, if you can give some color there and what the pipeline looks like, maybe quarter over quarter. Um just so we can kind of frame up what what what growth could do in the potential absence of the higher repayments.
And that's, that's really, um, You know, causing us to see the second half kind of in that in that low, low to mid single digit kind of range that Stephen, this is Cory, I would just, I would just add that, yes, while we think the balance of the year, I mean, we're looking at flat to upper low single digits. If you look at the hires that we're trying to do, our intention is not to leave it at that level. And so our goal is to be driving that up, probably Board of the Mid-to-High. After 25, I feel really good about what we're trying to accomplish on some of the hires that we're actually doing.
Steven Scouten: Hey, Stephen, this is Brent. And, you know, I think kind of, like, Corey said we we feel really good about, um, what we're seeing in the pipeline. And, and really, our Trend and originations what's really a bit harder to predict or we we think we we can predict that the payments that we're, we're getting. But you know, this quarter or payments were, you know, in the neighborhood of 15 million higher than last quarter. And that's, that's really um,
uh, you know, causing us to to see the the the second half kind of
In that in that low low to mid single digit kind of range, that makes sense.
Steven Scouten: Steven how this Quarry? I would just I would just add that. Yes well we think the balance of the year. I mean we're looking at flat to Upper low single digits.
Steven Scouten: If you look at the highs that we're trying to do, our intention is not to leave it at that level.
Steven Scouten: and so our goal is to be driving that up, uh,
Steven Scouten: Probably.
Steven Scouten: more to the mid to high and
And I never want to take away, we have a place. Yeah.
Steven Scouten: After 205, I feel really good about what we're what we're trying to accomplish on the on some of the highs that we're actually doing.
And and I never want to take away. We have in place
And I mean, that maybe leads to my next question is just kind of like, how do you think about that balance of investing in the, you know, additional new hires versus the potential for M&A? It sounds like it's kind of a both and strategy. If you were to find the right sort of deal, do you think that would lead you to put some new hire activity on hold? Or can you continue to kind of do both concurrently? Do you think? We have no intention of putting a new hire on. effort on hold, even if we did find something.
Steven Scouten: Yeah.
Speaker Change: Yeah, yeah. And I mean that may lead to my next question is just kind of like how do you think about that balance of investing in the, you know, additional new hires versus the potential for m&a. It sounds like it's kind of a both and strategy. Um, if you were to find the right sort of deal, do you think that would lead you to put um, some new higher activity on hold? Or can you continue to kind of do both concurrently do you think
Steven Scouten: we have no intention of putting the new higher new higher on
Because we think that there's still some opportunities. I mean, we say the same thing, and a lot of other people try to say the same thing, but we're a relationship banker. And if these guys can bring some relationships to us, it just continues to enhance what we're doing. But our focus is not on just trying to grow loans, but trying to grow deposits at the same time. and we are working on some efforts that we think will help continue to expand on that side of it as well.
Steven Scouten: effort on hold, even if we did find something because we we think that there's still some opportunities. I mean, I mean we we say the same thing in a lot of other people. Try to say the same that same thing, but we're a relationship Banger Banker bank. And if these guys can bring some relationships to us, they just continue to enhance what we're doing. But our focus is not on. Just trying to grow loans but trying to grow deposits at the same time.
And we are, we are working on some efforts that we think will help continue to expand on that side of it as well.
Okay, great.
And then maybe just last thing, any color you can lend on the increase in specific reserves in particular? Was that associated with that one large credit that you called out the multifamily loan? Or is that related to other types of credit? Yeah, Steven, I mean, we just saw we did see a lot of ins and outs.
great and then maybe just last thing, any color you can lend on the increase in specific reserves in particular, was that associated with that 1, large credit that you called out the multifamily loan or or is that related to other um types of credits
Speaker Change: Yeah, Steen. I mean we just saw we did
And this is Brent, by the way, we we saw a lot of ins and outs and criticized assets during the quarter, a lot of good movement out and a little bit coming in. And that effect of that was a slight increase. And that slight increase just kind of drove general reserves up. But we did have we did have a couple loans that entered non accrual status that were smaller. And we took a conservative approach on them.
Speaker Change: And, uh, this is brand by the way. We, we, we saw a lot of ins and outs and, uh, crew size assets during the quarter, a lot of good, uh, movement, uh, out and, and a little bit
Yeah, see, this is this Steve, I'll add to that and just say, there was not a specific reserve on that on that larger credit that we talked about. So we this is this is on on on a few of the other other credit. Stephen, I think it's... Got it. It's very nice to have a nice recovery. Some of that stuff happened in the same quarter, so you can just take it for that. Understood. Yeah, I appreciate all the color guys. Thanks for the time. Thanks, Steven.
Speaker Change: Uh we did have, we did have a couple of loans that entered uh not across status that were smaller and uh we took a conservative approach on them.
Yeah, that Stephen. This is this is Steve. I I'll add to that and just say uh there was not a specific reserve on that, on that larger credit that we talked about. So we uh, this is this is on on, on, on a few of the other other credits.
Speaker Change: Stephen, I think it's got it.
Speaker Change: It's very nice to have a nice recovery when in have some of that stuff happen in the same quarter so you can just take it for that.
Speaker Change: Understood. Yeah, I appreciate all the color, guys. Thanks for the time.
David: Thanks. Thanks. David.
This next question comes from the line of Brett Rabatin with Huffington Post.
Speaker Change: Thank you.
Hey guys, good afternoon. We wanted to talk about the margin, some from here. And if I heard you correctly, you kind of talked about the loan yields, you know, kind of being more flattish from here on a core basis. And I know we had talked about some potential deposit exception pricing that could lower the cost of funds. But the interest bearing cost of deposits was down two bips. link quarter, you know, it's, it would seem like you'd have a flattish outlook from here, but one to get your perspective where we might go from here.
Speaker Change: Our next question comes from the line of Brett rabbitin with hubby group, please proceed.
Speaker Change: Hey guys, good afternoon. Um, wanted to talk about the the margin some from here and if I heard you correctly, you kind of talked about the loan yields, you know, kind of being more flat-ish from here on a on a core basis. And I know we had talked about some potential deposit exception pricing, that could lower the cost of funds, um but the interest bearing cost of deposits was down 2 bips
Speaker Change: Link quarter, you know. It's it would seem like you'd have a flattish uh, Outlook from here. But wanted to get your perspective, where we might go from here.
Yeah, this is Steve, I'll start. Yeah, we're, we've had the CD book is repricing down now, CDs are 11% or so of total deposits. So that's not a that's not a huge driver overall, but that is that is trending the right direction. The rest of the book outside of Outside of Fed movements to rates, I mean, it is a little bit slower moving on any of those rates. We did, we have done a little bit of work toward the end of the quarter on a few of our questions.
Yeah, this is Steve.
Art: Art. Um,
Art: Yeah, we we're we've had, you know, the CD book is is, is repricing down. Now CDs are
Art: 10.
Art: 11% or so of of, of total deposits. So that's not a, that's not a huge driver overall. But that is, that is, uh, trending the right direction. Uh, the rest of the book outside of
Art: Um outside of fed movements to rates. I mean it is a little bit slower uh moving on on on any of those rates we we did we have done a little bit of work toward the end of the quarter on on, on a few of our
Thank you. Public Fund Deposits, or a couple of clients like that, that maybe will save a little bit. But, you know, again, absent the... change in fed dropping rates. It's there's not big moves to be made, but we will continue to look at look at those rates.
Art: Deposits. Or
Art: a couple of clients like that that that maybe will save save a little bit but uh, you know, again ABS absent, the
Art: the change in fed dropping rates, um,
This is Cory. I mean, I do think we'll we'll have some NIM expansion. We're extremely focused on that. And the exception-based pricing that we've talked about in the past is no different than what we do, we continue to do on a daily basis. I think we'll continue to be focused on trying to expand that. Okay, that's helpful.
Corey Gnome: It's, there's not big moves to be made, but we will continue to look at look at those rates. Okay, this is Corey. I mean, I do think, we'll, we'll have some of them expand
Corey Gnome: I mean we're we're extremely focused on that and the exception based pricing that we've talked about the past is no different than what we do. We continue to do on a daily basis.
Corey Gnome: I think we'll continue to to be focused on trying to expand that.
And then just back on the M&A topic, you know, we've obviously seen a couple deals, you know, in Texas here the past week or two, and just wanted to hear, you know, from you guys perspective, the environment as you see it, in terms of If there are any things that are impediments, is it valuation expectations or other things that might hold up you guys doing something? And then if you could remind us kind of your range from an asset perspective, what you might be looking at, that'd be helpful.
Speaker Change: Okay, that's helpful. Um, and then just back on the m&a topic, you know, we we've obviously seen a couple of deals, you know, in Texas here the past
Week or 2 and just wanted to hear, you know, from you guys's perspective, the environment as you see it. Um in terms of, you know, if there are anything, if there if there are any things that are impediments is it is it, uh, valuation expectations or other things that, you know, might hold up, you guys doing something. And then, if you could remind us kind of your
Brett, this is Curtis. As far as impediments, yeah, essentially, buyer expectations is probably the biggest one. We're going to look really hard to find somebody with the right culture. If we don't, if we don't think we've got that, then we don't even really get around to talking about price. But we've got several of the investment bankers that are out there bringing ideas to us. But we've got to get some people a little more motivated to start, you know, be willing to that the market is telling us is the right price. So we're looking, we're working on it.
Speaker Change: Your range from an asset perspective, you know what, you might be looking at. Um, that'd be helpful.
Speaker Change: Brett. This is Curtis uh, as far as impediments. Yeah. Essentially, my expectations is probably the biggest 1. Uh, we're going to look really hard to find somebody with the right culture. Uh, if we don't, if we don't think we've got that, then we don't even really get around to talking about price. Uh, but we've got, uh, several of the, the investment bankers that are out there, bringing ideas to us,
For us, I think it's kind of like we've said before, somewhere down in, you know, 600, 700 million is probably toward the bottom side of what we'd like to do. And we'd feel okay, going up some number over a billion. And, you know, for the right trade, maybe even a little higher if one lined up all the stars. But we're definitely looking. And, again, you still got people out there that because of the structure in that bank, that we'd be very interested in, they've still got a pretty significant AOCI problem. And, you know, nobody really wants to fess up and say, That means I don't get that money when they sell the bank.
Speaker Change: But we got to get some people a little more motivated to, uh, to start, you know, be willing to accept the prices that the market is telling us, is the right price. Uh, so we're we're looking, we're working on it, uh, for us. I think it's kind of like we've said before uh, somewhere down in, you know, 600 700 million is probably toward the bottom side of what we'd like to do and we'd feel okay going up, uh, some some number over a billion. Uh and, you know, for the right trade, uh, maybe even a little higher if 1 really lined up to follow the stars, but uh, but we're definitely looking. And uh, again you still got people out there that
Speaker Change: Because of the the structure in that bank.
That we'd be very interested in. They've still got a pretty significant aoci problem and, you know, nobody really wants to fess up and say
And until we get some sellers a little more realistic about where that puts the real price for their bank, it's kind of hard to do the business. But I would say that it's obvious in this regulatory environment has loosened up significantly. And I think as you see more and more deals get announced, maybe we're going to see some of these more entrenched sellers that feel like if they're going to do something, now's the time, because it's going to be a lot easier to get deals through the system, I think.
Speaker Change: Money, uh, when they sell the bank and so we get some sellers a little more.
Speaker Change: Realistic about where that puts the real price for their bank. It's kind of hard to do the business but uh, I would say that it's obvious in this, in this regulatory environment, has loosened up significantly and I think as you see more and more deals, uh, get announced, maybe, uh, we're going to see some of these uh, more entrenched sellers. That feel like if they if they're going to do something Now's the Time because it uh, it it's going to be a lot easier to get deals through the system I think.
Okay, and then maybe just one last one on mortgage banking. And, you know, I guess depends what happens with rates here. But was curious if you got any thoughts on mortgage banking performance in the back half as you see the environment. You know, Brad, it's been this, Cory, it's been pretty flat, and I think it's still going to be pretty flat. The thing is, is we've said all along, we've kept our infrastructure in place. We are doing mortgages on a consistent basis, but we're not setting the world on fire. But here's the thing, we're not losing any money doing this.
Speaker Change: Okay, and then maybe just 1 last 1 on Mortgage Banking and, you know, I guess depends, what happens with rates here but um, I was curious if you got any thoughts on Mortgage Banking performance in the back half as you see the the environment.
Corey Gnome: You know, Brad it's been with this Corey. It's been pretty flat uh,
And I think it's still going to be pretty flat. The thing is, is we've set all along. We've we've kept our infrastructure in place
And we're making sure that we're maintaining these relationships in the process. But to have been able to keep our mortgage operation in the black during some of the most challenging times, I think, I think speaks well of our team. And that's why we've been very reluctant to step away from that because we'd like the ability to be able to do it. Now, get some right movement that actually makes some sense. We're ready to go. So we're really excited about that.
Corey Gnome: We were we do we are doing mortgages on a consistent basis but we're not setting the world on fire. But here's the thing, we're not losing any money doing this and we're making sure that we're maintaining these relationships and the process. But to to to keep our mortgage operation.
And the black during some of the most challenging times I think I think it speaks well of our team and that's why we've been very reluctant to step away from that because we like the ability to be able to do it now get some rate movement that actually makes some sense. We're ready to go.
Corey Gnome: And so we're we're really excited about that.
First shot of the color, guys.
Corey Gnome: Okay.
Corey Gnome: Pretty sure all the color guys.
Corey Gnome: Thanks.
As a reminder, please press star 1 to ask a question.
Corey Gnome: Thank you.
Next question. Hey, good afternoon, guys.
Speaker Change: As a reminder, please press star 1 to ask a question.
Speaker Change: Our next question comes from the line of Woody lay with KBW, please proceed.
Hey Woody! Wanted to start on loan yields, you know, even backing out for the interest recovery. I mean, they saw a really nice expansion in the quarter.
Hey, good afternoon, guys.
What?
I was just hoping to get some color on maybe where new loan production rates are coming on and how that compared to the payoffs you saw in the quarter. You know, I think for new rates coming on, this is Cory, I mean... you're saying. Low sevens, high sixes on some of the larger, more sophisticated borrowers that we're doing business with. But, I mean, we're still trying to collect fees at the same time in doing some of this stuff. We're also doing some stuff trying to... Hold our position if rates start cutting, that it'll be a little bit of delay in process for our loans to start cutting.
1 of the start on loan yields, you know, even backing out for the interests recovery. I mean they they saw really nice expansion in the quarter. It was just hoping to get some color on, maybe, where new Loan Production rates are coming on and and how that compared to the payoffs you saw in the quarter.
Corey Gnome: You know, I think for new rates coming on. This is Corey, I mean
Speaker Change: You're saying.
Low 7s, High sixes on some of the, some of the larger more sophisticated borrowers that we're doing business with. But I mean, we're still trying to collect fees at the same time in in doing some of this stuff.
Speaker Change: um, we're we're also doing some stuff trying to uh,
Hold our position. If rates start cutting that, it'll be a little bit of delay and process for our, our loans to start cutting.
We think there's still some expansion there for us. Yeah, the other good thing that helped us besides the one time recovery was just getting that loan off of not accrual. So we had $20 million in loans there that were not accruing. So had that have been accruing at a normal rate. deal would have been up in prior quarters as well.
so,
Speaker Change: We think there's still some expansion there for us.
And Woody, this is Curtis. In part of our board committees today, we were going over a list of loans that will be either maturing or hitting rate reset dates over the next 18 months or so. And, you know, while it's not going to be one huge big spike, there are several large credits in there that will reprice at, you know, looking at current numbers, probably reprice a good 200 basis points up from where they are today. So, again, it's not going to make a big jump, move the needle enormously, you know, in the next three months, but it will help continue to hold that NIM up as we do that, as well as bringing new ones on.
Speaker Change: Yeah. The the other good thing that helped us, uh, besides the 1 time recovery was just getting that loan off and not across. So, I mean, we had 20 million dollars of in in loans there that were not accruing. So, just have that have been had that have been accruing at a normal rate. Uh, yield would have been up in Prior quarters as well.
And what this court is, uh, in part of our board committees today, we were going over a list of loans that will be either maturing or hitting a rate reset dates over the next uh, 18 months or so. And you know, while it's not going to be 1 H, big spike. There are several large credits in there that will reprise at, uh, you know,
We just don't know what kind of pay downs we do have. I know we'll get a few more. I think the ones we've had recently and probably will have in this quarter are certainly significant. I personally kind of doubt that we see quite those levels going forward the rest of the year. But, you know, it's something we have to work for. If you look at where we would be with new loan production without a couple of these major pay downs on it, we'd be hitting the kind of numbers we'd really like to hit. It's only these big blocks pay downs that kind of skew the numbers back down toward being, you know, low single digits.
Speaker Change: looking at current numbers, probably repricing up to 200 basis points up from where they are today. So again, it's not going to make them big jump and move the needle enormously, you know, in the next 3 months. But it will help continue to hold that Nim up as we do that, as well as bringing new ones on. We just don't know what kind of, uh, of pay downs. We do have. I know we'll get a few more. I think. Uh, the ones we've had recently and probably will have in this quarter are are certainly significant, I
But you keep in mind, I mean, and please be very clear that not all of these are that. But if you look at some of the headwinds that we've talked about of some of these paydowns, there's a fair number of those that were very cheap price loans that we were not sad to see go away. And the biggest one being at zero, and taking that all the way up to some stuff that we've got that's got a four in front of it, and we're okay with that.
Speaker Change: Personally, kind of doubt that we see quite those levels, uh, going forward the rest of the year. But, uh, it's, you know, it's something we have to to work for. If you, if you look at where we would be with new Loan Production without a couple of these, major pay Downs on it. Uh, we'd we'd be hitting the kind of numbers. We'd really like to hit. It's only these. These Big Blocks, pay Downs, that kind of skew the numbers back down toward being, you know, low single digit.
Speaker Change: But to keep in mind, I mean, in, please be very clear that not all not, all of these are that, but if you look at some of the headwinds that we've talked about at some of these pay Downs, there's a fair number of those that were very cheap price loans, that we were not sad to see go away.
Speaker Change: And the biggest 1 being at zero and in taking that all the way up to some stuff that we've got that's got a 4 in front of it, and we're okay with that.
Yeah, that's really helpful, Cory.
Maybe shifting over to non-interest bearing deposits. Y'all saw nice growth in the quarter. Was there any strategies that drove that growth or just any color you can provide on the higher balances? You know, I'd like to tell you that I mean, we're just really good at that. But I think the reality is, our treasury, our treasury management solutions just continues to mature. And I mean, we're so we're so proud of the way we we work that in line with new loan production. And I think that probably represents the biggest bulk of it. And we're not out.
Um maybe shifting over to non-interest bearing deposits. You also a nice growth in the quarter. What was there any strategies that drove that growth or or just any color you can provide on on um, the higher balances
We don't have something new that we've just done. We're just getting better and better all the time at how we deliver to these clients. Yep.
No, I'd like to tell you that. I mean, we're just really good at that but I think the reality is our treasury. Our treasury Management Solutions just continues to mature. And I mean we're so we're so proud of the way we we work that in line with uh new Loan Production. And I think that probably represents the biggest bulk of it. I mean, we're not out.
Speaker Change: We don't have something new that we've just done. We're just getting better and better all the time and how we deliver to these clients.
And then last for me, I just wanted to hit on the hiring strategy and just try to sort of get a better idea of, you know, the scope or opportunity of hiring that's out there and just how that impacts expense growth from here. It's going to impact expense growth. We know that and we're okay with that because we put a pretty short timeline on how long before we break even on new hires. We think it will have some impact on expenses on the short run. We look at that as growth development for us. Not only are we trying to impact it from that standpoint, but the things that we're trying to do to improve the loan origination system we have inside the company, making sure that we're prepared for the kind of growth that we're at.
Speaker Change: Yep. And and then last for me, I just wanted to hit on the hiring strategy and just try to sort of get a better idea of, you know, the scope or or opportunity of hiring that's out there and just, um, how that impacts expense growth from here,
Speaker Change: It's going to impact expense growth. I mean, we, we know that and we're okay with that because, well, we, we put a pretty short timeline on how how long before we break even on. On new hires? We think it's, it will have some impact on expenses on the short run, but we we look at that as I mean, that's growth development for us. I mean, we're not only, are we trying to impact it from that standpoint? But the things that we're trying to do to
So it will definitely have some impact on that. As far as the different areas, I mean, we're pretty much across the board where we're wanting to. do some expansion in tires and but You all know we're very selective of what it takes for us to hire people right here. And we screen them very, very well. And the ones that we've been so lucky to get and successful in actually getting close are ones that we think that are... going to fit into our team very, very well.
Speaker Change: Improve the the loan origination system. We have inside the company, making sure that we're prepared for the kind of growth that we're after.
Speaker Change: So, it will definitely have some impact on that. As far as the different areas, I mean, we're pretty much the board of, where we're wanting to do some expansion in hires and, but y'all know we're very selective of what it takes to get for us to hire people around here. And we, we screen them, very, very well. And, and the ones that we've been so successful, so lucky to get and successful in actually getting close. Or once we think that are
Speaker Change: Going to fit into our team very, very well.
Alright, that's all from me. Thanks for taking my questions. Thank you.
All right, that's all from me. Thanks for taking my questions.
Our next question comes from a line of Joe Yanchunis with Raymond James. Good afternoon.
Thank you. Our next question comes from the line of Joe yakun with Raymond James. Please proceed.
Go Terps! So I know this horse has been beat, but I'm gonna take another swing at it. The strategy behind Dallas. So you've had some loan balance contraction in your metro markets. It occurred again this quarter. Is part of the hiring strategy, you know, related to those declining balances? And I guess additionally, I may have missed this, but how many lenders did you hire? And do you have a sense for the size of their book of business? I mean, we've been hiring constantly, probably in the last We've hired another couple of lenders. So we're just continuing to keep adding to this.
Good afternoon.
Speaker Change: so, I
I know this horse has been beat, but I'm going to take another swing at it. These, um,
Speaker Change: The strategy behind Dallas. So you've had some loan balance contractions in your Metro markets that it it occurred, again, this quarter.
Speaker Change: Is part of a hiring strategy, you know, related to those declining balances.
And I guess, additionally, I may have missed this, but how many lenders did you hire? And do you have a sense for the size of their book of business?
Speaker Change: Um, I mean we've been hiring constantly probably in the last.
It's just an ongoing process.
So Joe, let's dissect Dallas for a second. The big non-accrual loan that paid off was tied to the Dallas market. because that's where that's where the lender was that it originated. So that was one of the headwinds that they've had right there. So some of the headwinds we've been talking about. They're okay. I mean, we've wanted some of this stuff to separate and go find a new spot. There's some other ones in there that were some cheap price stuff that we weren't going to and then they were going to get repriced and they, they knew they had to find some other solution for it as well.
Speaker Change: Month, we've hired another couple of lenders. So it's, I mean, we're just continuing to, to keep adding to this. It's just an ongoing process.
Speaker Change: So don't, let's let's let's dive.
Speaker Change: For a second.
The big, the big non Acro loan that paid off was tied to the Dallas Market.
Speaker Change: Because that's where that's where the lender was. That it originated. So that was 1 of the headwinds that they, they've had right there. So some of the headwinds like we've been talking about
Speaker Change: They're okay, I mean, we've wanted some of this stuff to to separate and and go find a new spot. So
So I do think that headwind headwind has not just all of a sudden gone away, but I think it's one that we've managed through very well. So there's nothing tied to fact that we're doing lenders because we've had that that headwind right there. I mean we have opportunities to hire some very good talent and bring them into our team. And that's what we're focused on. But it's not just Dallas. It is pretty much across the board of where we're strategically trying to identify those that would fit our culture, both sides of it, credit culture as well, and making sure that the type of business that they do is the type of business that we want to bring onto our books.
Speaker Change: There's some other ones in there that were some cheap price stuff that we weren't going to, and then they were going to get re-priced and they they knew they had to find some other solution for it as well. So I do think that headwind headwind.
Speaker Change: Has not just all the sudden gone away, but I think it's 1 that we've managed through very well.
Speaker Change: um, so there's nothing tied to
Speaker Change: the fact that we're doing lenders because we've had that that headwind right there. Um, hiring lenders because, I mean, we have opportunities to hire some very good talent in bringing them into our team, and that's what we're focused on, but it's not just Dallas. It, it is pretty much across the board of where we're strategically trying to identify those that would fit our culture, both both sides of it, credit culture as well, and making sure that the type of business that they do is the type of business that we want to bring onto our books.
God I appreciate it and then just kind of one last one for me here you had a pretty nice gain on a non interest bearing deposit balance in the quarter You have a sense for how much of that came from new customers. I don't think that I mean, I think there's a fair amount of it because that's our focus. I mean, every discussion we have over a loan ends up with a discussion over a deposit as well. So I would say that there's some of it contributed to it, but I wouldn't try to go say it.
Speaker Change: God, I appreciate it. And then just kind of 1 last 1 for me here, you had a pretty nice gain on a non-interest bearing deposit balance in the quarter.
Speaker Change: You have a sense for how much of that came from new customers?
It was a lot of chair biting. I do know that we've got the message out there that for existing customers, that getting those deposits is every bit as important as having their loan. And that message is getting communicated from that loan servicing officer out to the customer. And that gives them a chance to get the treasury management folks in front of them. And I know we have seen a meaningful increase in getting some deposits in from people that we've had a loan with for two, three, four years. It's just nobody pushed very hard to get the deposits.
Speaker Change: It was the last year by any means.
And now we are. So that's it's a combo. But again, I couldn't give you this percentage breakdown, but we are gaining some customers. And sometimes what you see is it's a part of a relationship that we may have a loan to this entity over here. And it may be one that we've had the operating account on, but that's not anything with any real balances in it. Now we're getting back in front of that, the human being that's the lead in that customer relationship and saying, yeah, but over here in this part of your business, you've got some significant deposits.
I do know, I do know that uh that we've got the message out there that uh for existing customers that getting those deposits is every bit as important as having their loan. And that message is getting communicated from that, uh, that loan servicing officer out to the customer and that gets them a chance to get the treasury management folks in front of them. And I know we have seen a, a meaningful increase in getting some deposits in from people that we've had a loan with for 2 3, 4 years. Uh, it's just nobody pushed very hard to get the deposits and now we are. So, uh, that's it's a combo but I again, I couldn't give you the percentage breakdown, but we, we are gaining some customers. And sometimes what you see is it's your part of a relationship that we may have a loan to this entity over here, and it may be 1 that, that we've, we've had the operating account on, but that's not anything with any real balances in it. Now, we're getting back in front of that. Uh, the the, the, the human being, that's the lead in that customer relationship.
And we want to show you why we can do a better job for you than the bank you're with. And we're having some success with that. So it's a combo of a lot of things. And, you know, it's slow, but it's steady. And I think we're going to keep getting that kind of growth.
Joe, I'd like to go back and. Give a little bit of credit to the fact that I think the way our ICP plan actually works where these lenders are incentivized on deposits as well as on loans, and they're not only incentivized but they've got metrics that they need to meet. I think that has as much to do with this across the board as it does.
Speaker Change: And saying, yeah, but over here at this part of your business, you've got some significant deposits and we want to show you why we can do a better job for you than the bank you're with. And we're having some success with that. So it's combo with a lot of things and, you know, it's slow, but it's steady and I think we're going to keep getting that kind of growth Joe. I, I'd like to go back and and
Speaker Change: Give a little bit of credit to the fact that I think the way our ICP plan actually works where these lenders are incentivized on deposits as well as on loans and they're not only incentivized but they've got metrics that they need to meet. I think that has as much to do with this across the board as anything
Understood. I appreciate the thorough answers.
Thanks, Joe.
Understood I uh, appreciate the thorough answer answers.
Speaker Change: Thanks Joe.
I'd like to turn the floor back over to Curtis Griffith. Thanks, operator. Thanks to everybody that participated on today's call. We do believe our second quarter results demonstrate our strong financial position as well as the growing earnings power and the liquidity of the bank. Our markets are generally enjoying healthy economic growth, we see opportunities to accelerate organic loan growth through continuing to hire experienced lenders who can bring high quality customer relationships to the bank. We have a strong position in our markets where we do business, and we do believe we can grow market share over time.
Thank you. There are no further questions at this time. I'd like to turn the floor back over to Curtis Griffin for closing comments.
Curtis Griffin: Thanks operator. Uh, thanks to everybody that participated on today's call.
Curtis Griffin: We do believe our second quarter results, uh, demonstrate our strong financial position, as well as the growing earnings power and the liquidity, the bank
Our markets are generally enjoying healthy economic growth. We see opportunity strict accelerate organic loan growth, through continuing to hire experienced lenders, who can bring high-quality customer relationships to the bank,
We also see some opportunities to grow through M&A as the deal environment improves in our industry. That said, though, we will be very selective and ensure any acquisition that we consider makes economic sense for our shareholders. Taken together, we believe we're in an advantageous position to succeed, continue to deliver value to our shareholders as we work to accelerate the growth of South Plains.
Curtis Griffin: We have a strong position in our markets where we do business and we do believe we can grow market share over time.
Curtis Griffin: We also see some opportunities to grow through m&a as the deal environment, improves in our industry that said though we will be very selective and ensure any acquisition that we can consider makes economic sense for our shareholders.
Thanks again for your time today.
How can I get together? Uh we believe we're in an advantageous position to succeed. Continue to deliver value to our shareholders as we work to accelerate. The growth of South Plains, thanks again for your time today.
This concludes today's teleconference. Thank you for your
Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.