Bank OZK(US:OZK)2021-04-23 19:28Financial Data and Key Metrics Changes - The company recognized approximately $3.6 million in fees from the forgiveness of $160 million in PPP loans, contributing about 8 basis points to the yield on non-purchase loans [11][12] - The company ended the quarter with about $280 million for PPP1 and about $110 million for PPP2 [103] Business Line Data and Key Metrics Changes - The Real Estate Specialties Group (RESG) closed about twice as many loans in Q1 2021 compared to Q1 2020, although the average loan size was approximately 60% smaller [37] - The company expects significant impacts from paydowns in Q2, but is optimistic about the pipeline for originations in the second half of the year [25][44] Market Data and Key Metrics Changes - The company has seen a diverse deposit base, with the top 10 depositors now accounting for roughly 7% of total deposits, down from the high teens [19] - The Southeast and Southwest regions have dominated originations in the past two quarters, with increased activity in the Northeast as well [90] Company Strategy and Development Direction - The company is focused on organic growth as its number one priority, with plans to explore new business lines and potential M&A opportunities [55][58] - The company is optimistic about growth in the community bank segment and the new ABL business line, expecting contributions in the back half of the year [42][62] Management's Comments on Operating Environment and Future Outlook - Management noted that competition is expected to increase as non-banks re-enter the lending market, but the company believes it can compete effectively due to its experience and relationships [15][38] - The company maintains a cautious optimism regarding the New York market, with expectations for future opportunities as construction and development resume [81][86] Other Important Information - The company is actively monitoring its expenses and expects them to remain relatively flat in the near term, while continuing to evaluate branch closures and talent acquisition [71][74] Q&A Session Summary Question: What drove the increase in non-purchased loan yields this quarter? - The increase was driven by the recognition of fees from PPP loans, with $3.6 million contributing to the yield [11][12] Question: Should competition from non-banks be expected to pick up again? - Yes, competition is expected to increase, but the company believes it can compete effectively due to its experience and relationships [15][38] Question: Can you speak to deposit trends? - The company has improved the quality and diversity of its deposit base, with a focus on consumer and commercial business accounts [19][20] Question: What is the outlook for the RESG? - The company expects a ramp-up in originations later in the year, with a healthy pipeline emerging [25][44] Question: How is the company addressing competition and pricing pressures? - The company will not sacrifice credit quality for business but may negotiate on pricing to meet return standards [39] Question: What are the growth expectations for the new ABL business? - The ABL business is expected to take time to ramp up, with material moves anticipated in the following year [62]