Home Bancshares, Inc. (Conway, AR) (NYSE:HOMB) Q1 2023 Earnings Call Transcript April 20, 2023
Home Bancshares, Inc. (Conway, AR) beats earnings expectations. Reported EPS is $0.51, expectations were $0.5.
Operator Greetings, ladies and gentlemen. Welcome to the Home Bancshares Incorporated First Quarter 2023 Earnings Call. The purpose of this call is to discuss the information and data provided in the quarterly earnings release issued this morning. The company presenters will begin with prepared remarks and then entertain questions. [Operator Instructions]The company has asked me to remind everyone to refer to their cautionary note regarding forward-looking statements. You will find this note on page three of their Form 10-K filed with the SEC in February 2023. At this time, all participants are in a listen-only mode and this conference is being recorded. [Operator Instructions]It is now my pleasure to turn the call over to Donna Townsell, Director of Investor Relations.Donna Townsell Thank you.
Good afternoon and welcome to our first quarter conference call. Today’s discussion will include prepared remarks from our Chairman, John Allison; Stephen Tipton, Chief Operating Officer; and Kevin Hester, Chief Lending Officer. The rest of our team is present and available for questions. Tracy French, President and CEO of Centennial Bank; Brian Davis, our Chief Financial Officer; Chris Poulton, President of CCFG; and John Marshall, President of Shore Premier Finance.And it’s been an interesting 90-days in the banking sector. However, Home is still standing strong and to provide you with more color on this, it our first speaker Chairman, John Allison.John Allison Good afternoon. Thank you, Donna. We usually open with profitability is the first thing.
But during these times, we thought it was probably be more appropriate to talk about the strength of the company and the strength of Home Bancshares, our strategy and patience has paid off for our customers, our employees, our depositors and our shareholders. The strength of Home’s liquidity and availability provides more than 100% coverage for all uninsured and uncollateralized deposits as of March 31 ‘23, and that carries through today.So I want to say that again, Home has the ability and liquidity to cover all uninsured and un collateralized deposits for any customer that we have in the company. We’re very proud of that. The strong liquidity of Home have allowed Home to pay all collateralized depositors with deposits in excess of FDIC limits of $250,000 and still have $1.7 billion of money, that really equates to the fact that Home [Indiscernible] to cover 133% of all un collateralized deposits.We’re very proud of the fortress balance sheet we have built.
Home Bancshares, Happy Banks, Centennial Bank is one of the strongest banks in America. There are only a handful of banks in the country that can be trusted to make this statement. And I think if there was any concern about from our depositors, I think this will comfort them. In the press release, it’s also a table showing how the availability is available. I said last quarter, that all banks are not created equal. Our goal was not just to say we were better, but prove after years of excellent performance that Home should be separated from the pack as a very safe, strong and well managed financially institution.I hope you all agree that we have proven the strength of Home balance sheet and the performance of the company that has stood the test of time again during a new and different bank crisis.
What can possibly go wrong? I think we’ve seen about everything that could happen. One of the key factors that have not only contributed to the strength of our buy, but allowed top tier results quarter-after-quarter, as well as year after year. Liquidity, capital, asset quality, loan reserves, profitability, and management experience. Liquidity was not important until it was. Bank skip liquidity mainly from deposit — all forms of deposits, borrowings, security portfolios, as well as selling assets.During ‘21 and ‘22, the U.S. Government was spending as some people would say, like a drunken sailor. During that time, we grew liquidity deposits basically to over $3 billion in excess liquidity. The great majority of these funds, Homes simply put into Fed funds, because we assume many of these excess deposits would run off as interest rates continue to increase and as consumers expect their free money.
If you watch the Wall Street guys, they said cash is trash. How many times did we hear that during the years? Actually cash was king, then and certainly now more than ever. Banks with this new found liquidity during that time decided to invest in low rate securities and what I call a race to the bottom of loan rates. After we were in basically a lower zero rate environment for Home time, that lasted several years until the drunken sailor spending created something called inflation. It raised its ugly head.Call from the Fed to increase interest rates at the fastest rate in the history of our country and attempt to quell the monster. With banks hungry for yield, they blindly piled into low ranked securities and competed with each other what I call creating a race to the bottom of loan growth.
This was a critical decision that the leaders of the respective banks made that created this crisis. I’ve said for years that bankers, who do not have any businesses to experience are not the guys you won’t have in your money. Nearly all banks acting like a pack analyst, they took their employees, shareholders, and deposits straight to the slaughter. Because they built their houses aren’t strong.Pull a list of banks over 100% deposit, coupled with a capital ratio of [Indiscernible], and you’ll find those bankers that hope the big bag wolf doesn’t show up and blow the houses down. Many banks would fail, actually only a few would survive Home built their house with bricks and steel. The truth is many would have negative capital ratios if they had to mark to market their securities portfolio, [Indiscernible], if Home owner take the March to mark to market, we would remain one of the best capitalized banks in America.
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Different from many, many banks.A 100% or greater loan to deposit with 8% capital less is a recipe for disaster. When cash runs out and banks deplete their bonds, they have no choice, but to go to broker deposits and high rate CD, whether it kills their margin in profitability or not, they turn it into the survival mode. Watch the CD ads, you’ve seen all these CD ads hitting the paper. That’ll you who is in dire need for money. You’ve not seen one CD ad from Home Bancshares, Centennial Bank or Happy Bank, that should comfort all our deposits.Home has the cash liquidity and availability as I said to pay all deposits assuming Home was forced tomorrow to do that and had no liquidity and had to borrow $5 billion as an interest rate of 5% freed an additional $250 million in interest expense, Home would still run a 1.2 ROA and that’s better than 90% of banks in the country run today.
We have provided the chart to show you our availability of bonds. If a bank can pay out all uninsured deposits, and still make a 1% ROA or the top bank analyst in the country said, banks that can do that are in the cat bird seat. Well, welcome to Home Bancshares.Home Bancshares capital ratios are in the top tier of all banks. The conservative management team will always maintain strong capital, because you can’t get capital when you have to have it. Prime example is Silicon Valley Bank SVB, not said about that. As your largest individual shareholder Home and with this company being my largest personal asset, certainly have a vested interest in protecting what my wife calls the Chuck Wagon and Home is the Chuck Wagon that feeds all of us. Most of you know she’s very protective of her dividend and when I told her about the bank crisis, she said protect the Chuck Wagon at all costs.
Circle Wagon with our strong employees, our partners, our shareholders, our customers and depositors that is exactly what we’ve done, good liquidity, strong capital, huge loan loss reserve, strong asset quality coupled with peer leading profitability.By the way it’s also the largest asset of our executive committee and some of our directors. So we’re all focused on the same goal. Asset quality, while maintaining one of the high loan loss reserves in the country rather than play Jack in the box, raising and lowering quarter-after-quarter, because all the factors we faced over the last 23-years, we know one has worked for the last 40-years and that is a 2% reserve balance. The company’s reserve is $287.2 million or 2%, compared to December 31 when it was 2.01%.
The allowance on credit losses on loans represents 383% of non-performing loans.What that means is if we have $100 worth of non-performing loans, we have $388 worth of reserve to cover that $100 worth of loan. Stockholders equity grew for the quarter $104 million that was a combination of retained earnings at $66.3 million plus $49.2 million reduction in ALCI as interest rates softened somewhat.Let’s go talk about the earnings. Earnings for the quarter were $103 million or $0.51 per share and adjusted earnings of $0.54 per share. Return on assets was 1.84%, adjusted at 1.95%. Return on tangible common equity was 19.75% or adjusted to 20.90%. Tangible book value of $10.71, that’s $10.71 that’s an increase of 5.4% from the first quarter. Tangible common equity as a percent of tangible — a total equity $10.33 at 31 versus $9.66 at 13/31/2022.
And if we took held a maturity loss of $86 million after tax, we would still remain almost 10%, which actually would be 9.97%, pretty damn strong stuff.P5NR is $53.9 million total interest income was $284,939, up like it’s a record, Brian, I don’t think we’ve ever hit that number on total interest income.Brian Davis No, I think that is a record, you’re right.John Allison Net interest income was $214,595 versus the fourth quarter of last year $215,666 that was remarkably flat. Total revenue was $248,759. The difference there is the fair market adjustment on holding company bank stocks and preferreds, which hit us for about 11.3%.Brian Davis 11.4%.John Allison About 11.4%, we didn’t sell them, so we hadn’t lost that money we expect and we see — I’m seeing a recovery in those coming back today, so that’s good.
We’ll keep them we bought them for the dividends and we’ll hold them. Margin improved again to 4.37% from 4.21%. But I would listen this from a year ago, a year ago this time we’re at 3:21% and now we’re at 4:37%, that’s 116 basis points, that’s pretty impressive.Non-interest expense great job guys, the $114 million versus $118 million, we’re down about $4 million over last quarter. Efficiency ratio 44.80% adjusted to 43.42%. Tangible common equity as a percent of total equity was 10.33% versus 9.66%. Common equity Tier 1, I’ve got — I don’t know you — I had Brian run this for me, I said Brian run this. Show me our capital ratios and then take the entire loss of the ALCI and the HTM both HTM and AFS, add those together and tell me where we would rank.
So when you hear — you’ll hear common equity Tier 1, you’re going to hear two numbers. One number is before and one number is after. So it’s 13.2% and I’ll talk a little more about that in a minute ago. 13.2% now and 11.4% if we take all of the losses, which we’ve not have no reason to do.Leverage ratio from 11.4% to 9.8%. Tier 1 capital from 13.2% to 11.4%, risk based capital from 16.8% to 15%, that’s pretty amazing numbers. That puts us those second numbers of each one of those categories puts us in top class in the country. The yield on our securities book I’m very proud of is 3.30% good job my guys there. That’s probably about what both banks loan yields are.Yield on our book is 6.64%, our loan book that’s 6.64% versus 6.23% that’s pretty nice increase.
But from this time last year, it was 5.29%, that’s 135 basis point increase. We bought back 590,000 shares during the first quarter and we’ve repurchased over 250,000 shares, so far this quarter mostly through our 10b5 filing. It’s been on sale, so we thought it was a good time. I’ve not seen another bank present their ability to pay out all our uninsured deposits, including the big money Center Bank that everyone’s raving about. This does not mean they can’t. But why would a bank not disclose their ability to pay out all insured deposits if they can.I would imagine the difference is buried in the security book. If we were forced to liquidate our securities book today, which we’re not, Home’s loss would be pretax of $454,675 based on a $5.4 billion security book that equates to 8.42% pretax or after tax 6.34%.
Many banks have 30%, 40% and 50% haircuts to take and that’s I assume that’s why they won’t be wanting to disclose that. As I showed earlier, Home would still remain one of the best capitalized banks in America. Home’s customers can take their money out of the mattress and put it back in the bank.Talk a little bit about the lawsuit we did. We had some West Texas headwinds. That is in the situation has improved some. We filed a lawsuit against 17 individuals March 3 of ‘23 that we derived through our forensic investigators had improperly transferred Happy data. We’re not going to say anything else about that. Some of those offices have been closed. There have been some changes out there. But until we’re fully compensated in this suit, we’ll continue against all those parties.Conclusion, everyone says they’re worried about Regional Banks or you don’t need to worry about Home.
I think Home is in the best position of any bank in the country. So I hope that [Indiscernible] all of you. In addition to that, we had a great quarter. I really don’t have much to say negative about the quarter other than deposits went down some as we expected. But outside of that, we’re hanging in really good.I think I’ve said I want to grow $100 million — continue our $100 million run rate per quarter. I think we can do that. We can do that. We’re going to earn $400 million plus and in the middle of a crisis like this, I think that’s pretty darn good. Tracy French, our CEO who’s had his head down and been pretty darn busy lately. I thought I’ve just see if he had a comment.Tracy French Well, John, you made me feel comfortable just listening to your numbers and write it off how safe and sound we are, which we’ve always known that.
And I’ll complement you and the board on that. It’s pretty simple to state the basic banking. And I heard Donna say the last quarter has been crazy, I’ve been working for you for 84 quarters it’s been entertaining every damn quarter. It really is coming back to just the basics of banking and that’s stay in the courses we’ve done through several curveballs has been thrown at us, but it’s a compliment to our team. I know Stephen and Kevin are going to give a little color on loans and deposits we talk about the loan deposit ratio, I’ve been doing deposit to loan ratio over the last two years and it turns out to be in pretty good shape. Our deposit that you mentioned, Steven, to give a color on.In the past, since the first of this month, we’ve seen a nice increase now Uncle Sam’s going to get his fair share over the next few weeks that we anticipate.
And I’m proud to say in the banking part, we’ve got another line item that’s coming to be and after our trust company. We’ve got Kevin Ore and Jobi Mills and Jeff Kelly with the gold star, they’re going to become a line item for us and that’s positive for our company as we see other areas that can step up and pick the ball up for us along the way.Performance metrics you gave, Johnny, and I just want to mention some of this is on the regional bank and the bank ROA when you say it’s a 2:09% that’s pretty damn good and there’s been a constant improvement. And I can tell we got three regions that did over 3% and you got one region cat this did over 4% the past quarter, that’s a complement to our regional managers, our retail leaders, our loan officers and everything that deals with that, because they’ve been working this all the time.
It’s not just been the last month, it’s not in the last quarter. It’s not been the last half a year, it’s been constantly working and the proofs in the numbers on that.And to finalize comment John and I heard you know we focus a lot on our margin, and our margin in the bank has gone from $3.74 to $4.13 to $4.29 to this quarter, $4.46, 16 basis point increase in the quarter you can probably come give me a paddle to back on that, but..John Allison I think it’s okay.Tracy French It’s okay. Johnny said it’s okay for all the regional and retail folks, but outstanding jobs so thank you for all the support that our team has given us every single one of them.Donna Townsell Well, there are some very powerful statements in both of those messages.
Thank you very much and I would say, I’m for one proud to be on the Chuck Wagon. So thank you for those comments. Our next update now will be from Stephen Tipton.Stephen Tipton Thanks, Donna. I’ll start with the topics of liquidity and funding. As we have mentioned over each of the past three quarters, we’ve seen a shift to deposit balances going to investment firms, money market mutual funds and some banks with an obvious need for funding. The first quarter of 2023 was no different.Total deposits declined slightly less than $500 million in the quarter, and was spread fairly evenly across each of the past three months. The quarterly decline in total deposits was the lowest since the Happy Acquisition one year ago.So absent outflows this month related to tax filings as Tracy mentioned maybe we’ll begin to see that level out.
Johnny mentioned the analysis we recently completed on uninsured balances relative to our borrowing capacity. Adjusting for collateralized deposits, which are generally the municipalities, local school districts and higher end relationships with Long Bank. The calculated uninsured balances are 29.9% of our total deposits.While our company’s size strength today allows us to expand and take on larger relationships both on the loan and deposit side. We still believe in the franchise value of having core relationships in a granular deposit base. Currently, broker deposits comprised 2.6% of total liabilities and our internal limits will allow us to grow that by over $1.3 billion, if we ever needed to. Our top 10 list of depositors account for only 6% of our total deposits and only two of those customers considered uninsured or uncollateralized.An updated review of our deposit base shows nearly 500,000 deposit accounts, with over 70% of those having been open and active for at least three years and over 25% of those active over a decade.
The mix and balances stands at approximately two-thirds commercial or business and one-third retail today, while the number of deposit accounts is approximately 80% retail. New account opening activity continues to be strong with over 14,000 new accounts opened in Q1. And March actually was a bit more active than we’ve seen in the past.Switching to capital, as Johnny mentioned, the parent company total risk based capital ratio ended at a very strong 16.8% and a TCE or tangible common equity to total assets ratio of 10.33%. As he mentioned, we repurchased 590,000 shares of stock during the first quarter and continue to be active under our 10b51 plan, that’s in place now.On the asset side, coming off a very strong fourth quarter, loan origination volumes softened to $1.09 billion with over 75% of the volume coming from the Community Bank regions and that was split fairly evenly between Arkansas, Florida and Texas production.Finally, the net interest margin improved 16 basis points in Q1 to 4.37% as our bankers continue to do a great job managing this interest rate environment.
Interest-bearing deposits averaged 1.90% in Q1, which was up 45 basis points from Q4 and exited the quarter in March at 2.01%. The core loan yield excluding accretion and event income averaged 6.49% and was up 39 basis points from Q4 and exited the quarter in March at 6.54%.With that, Donna, I’ll turn it back over to you.Donna Townsell Thank you, Stephen. And now Kevin Hester will provide us with a lending report.Kevin Hester Thanks, Donna, and good afternoon, everyone. As Johnny appropriately stated earlier, one of the key factors that has contributed to the strength of Home Bancshares has been our compelling asset quality. I believe that the following color on the activities of the first quarter will bear out that this continues to be a strength of our company.
Non-performing loans and non-performing assets remain at very low levels of 0.51% and 0.33% respectively.A detailed review of the increase in non-accruals of $13 million this quarter reveals two CCFG C&I credits totaling about $6 million. Our internal analysis of the entirety of CCFG C&I portfolio indicates a potential loss of only $5 million, which is all within its shared national credit portfolio. We shifted away from [Indiscernible] sometime ago and this part of their C&I portfolio has been winding down accordingly. The remaining $7 million is spread across a few credits in the Community Bank footprint and based on payments that have been made to-date or renewals that are in process at least the same amount will be returned to accrual in the second quarter.For those of you that may not remember, Arkansas state banking law requires automatic non-accrual at 105 days past due regardless of whether it is in the process of collection.
The timing of these payments and renewals will allow the reversal of most of these new additions. As Johnny stated, the allowance for credit losses remains 2% of loans and provides 388% coverage of non-performing loans, both stellar measures.Past dues totaled only 0.62% of loans, even with a total of $30 million in ALF and memory care loans added to the total this quarter. We have discussed these loans previously, and I’ll give you an update on that portfolio momentarily.At this time. I would like to turn it over to John Marshall, who will provide you some information on the asset quality for Shore Premier Finance John.John Marshall Yes, Kevin, thank you. I think you Centennial Bank enjoys very-high asset quality, the division Shore Premier Finance in the marine finance space also enjoys very good asset quality.
Because of our underwriting standards, and we have it through this cycle, seen any deterioration in fact our delinquency, which normally runs this is for 30-plus days delinquent, around 11 basis points to 14 basis points. Kevin, at the end of the first quarter, we saw improvement. So that was under $800,000 and about 8 basis-points on a $1 billion book. So I’m very pleased with the way asset quality in the marine space is holding up. Thank you.Kevin Hester Thanks, John. That’s impressive and is directly related to your grids rigorous underwriting practices. As I mentioned, we’ve been working through a portfolio of about $100 million in ALS and memory care loans in Florida for some time. And in January, the equity partner, disclosed that they were wanting to exit some of these properties.
We have been negotiating a soft landing for these assets. And I’m pleased to report that there are multiple buyers for this equity position. We have always contended that we underwrote these assets conservatively with a low leverage position.Based on the ongoing negotiations which are nearing finality, we do not expect any loss in this portfolio. And expect all to be resolved by the time we report again in 90 days. Finally, I wanted to mention that due to the concerns of some regarding certain asset classes, we chose to refresh the deep dive into the office portfolio that we performed back in 2020. This analysis was completed during the first quarter using balances of the portfolio at 12/31/22. And the results were included in this quarter’s press release.I would like to point out that rolling forward to 3/31/23, there is no change in the asset quality of this portfolio, which continues to exhibit low problem loan totals and less than 1% past-due.
Notably, nearly 60% of the portfolio is located within our community bank footprint with most of that in Texas in Florida, which are states that should be less impacted by changes in how office space is utilized post COVID. Even within these states the majority of these balances are in the very strong geographies of DFW in Miami, which continue to experience high levels of population and company headquarter inflows.Positive attributes such as low leverage, high occupancy and predominantly low-rise come to mind as a result of this analysis. Outside of a couple of instances within the community bank footprint. Most of our recent additions to this asset class have come through CCFG as a part of a multi-asset facility. For most of these additions office is not the highest and best use, nor is it what the valuation is based on.
We continue to be very positive about our exposure in this potentially fragile asset class.Donna, that’s all, I got and I will turn it back to you.Donna Townsell Thank you, Kevin. Johnny, before we go to Q&A, do you have any additional comments.John Marshall I think it was a great quarter overall. I said what can possibly go wrong. You think about the worst financial crash since the Great Depression and ‘8, ‘9, ‘10 and ’11, we weathered that really didn’t see this liquidity crisis coming. We call the shot to maintain lots of liquidity, and we certainly call the right shot. So I’m sure there’s a lot of MBS buying so Home BancShares today, but those who spent their money and put it in different asset classes.What we did when it ran off, we have the cash to let it go.
So anyway, it was — I hope, everybody thinks is good as, I think it was based on what we saw what happened in the marketplace. I also think there might be some opportunities on the buy side to maybe to pick-up some assets over a period of time, we’ll be looking, we bid on both Signature and pieces of Signature, as well as pieces of SVB, we were not successful, but you’re still some stuff lab so we’ll see about that centers something there that makes sense for us.Outside of that John good report on asset quality on the marine book. Proud of you guys and what you’ve done and Kevin said that you’re exhausted underwriting and that is certainly paid off for this cooperation and congrats on that. Seems to be a world out there scared to death of marine stuff and our key benefit we miss and something, but you keep producing the great numbers.
So thank you for that.And good report ever will — Donna, I’m ready to go to Q&A if you’re ready.Donna Townsell Alright. We’re all ready. We’ll turn it back to the operator and open it up for questions.
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Question-and-Answer Session Operator Thank you. [Operator Instruction]
The first question is from the line of Jon Arfstrom with RBC. You may proceed.Jon Arfstrom Hey, good afternoon, everyone.John Allison Hi, Jon.Jon Arfstrom Hear me all right? Okay. Good, good quarter. I agree. Good.John Allison Thank you.Jon Arfstrom Good numbers. In terms of the liquidity that you lay out, you clearly have a lot of it and you’re prepared for, I think, any level of deposit outflows. But I’m just curious if things are settled down from your point of view. And are you starting to see some of these deposits that may have left flow back into the bank?John Allison Yes, some of that, it — we were prepared for that.
I think some people got — I never got asked, I never got one question many customer period. And Tracy got a few and I think Stephen got some, but overall, we didn’t — I didn’t feel it. I saw we’re losing a little bit, but I think that’s naturally you see these people offering 5%-plus for on CDs, that says we borrowed all money — we need to barrow from the Fed in the fours, that tells you something. If they’re offering 5%, they’re asking to pay any 5%, so that means we borrowed — that means we spent on our money, we borrowed up and now we’re trying to doesn’t matter whether they’re profitable or not. But I think we’re good, I actually think we’re good. We’ll go through this tax time. If we get through the tax time, I think we’ll be fine.From the loan perspective, we’re not aggressive on loans.
So you remember back in ‘8, ‘9 and I think you asked me question what we think about loans and I said I don’t think much about them. I don’t care right now. The key is to decide to make sure the company is strong. That’s the most important thing that we’ve done. So and that’s what we’re going to any to do. So we’re not aggressive on loans. We’ve got a little tougher on the loan side. We’re seeing pretty good loan demand. We’re seeing some squarely loans that are running around out there. So we — I don’t know that we got the lines to pull up if we need it. As Brian says, but I don’t know if we need it, we’ll use it. We’re in borrowed a penny this year. I mean, we’ve borrowed 1 nickel.So we got ourselves set up for it, but we haven’t had to use it and that’s a blessing for us for the entire price money.
But I’m pretty optimistic we may slide on two. It depends on how bad tax season is. I think that’s really the point. Any comment on that? Brian, even.Jon Arfstrom Steven, you had a comment about how there was deposit outflows, but it was the lowest that you’ve seen in a while. Did I hear that correctly?Stephen Tipton That’s right. Yes, I think deposits were down about 4.90% through the quarter. They were — those were higher levels in Q3 and Q4 last year just, kind of, on the heels of the acquisition. And Tracy mentioned through this point in April, we bounced around in a positive position so far. So we saw a little bit of inflow in March. We actually had a couple of surprise deposits from customers of ours that had money maybe out West that wired money in and said, we were told by our treasure to park in at Centennial Bank.
So we saw a few of those instances, but I think overall maybe just — maybe focus more on strength and quality instead of — so where the highest rate may be.John Allison We’re not going to solicit the big deposits. We’ve managed this thing properly where we’ve had the ability to cover our uninsured deposits and un collateralized deposits. So I think we’re not out. We’ll control those as they come in I’m sure a lot of people like to put their money here. We like to have some money from everybody maybe, but we don’t — it’s not our goal. So end up like SVB would allow lumpy, lumpy deposits in the bank. So…Jon Arfstrom Yes, okay.Stephen Tipton Yes, this is a reflection of the different deposits.John Allison [Multiple Speakers] not will be in the half right, but we’re damn sure the cycle.Jon Arfstrom Yes.
Well, it gets to my next question, but this is like it’s a good discussion, because it doesn’t feel like you’re that concerned about deposit outflows, which is good. And I guess the next question where you’re saying you’re not going to be the highest rate and you’re being a little bit more cautious on lending, but seeing some opportunities. How do you guys feel about the margin from here? Can you keep pushing this margin higher?John Allison Like he’s like at Home, [Indiscernible] like he is being at home. You have a…Tracy French Jon, I mean, that’s our goal, right? I mean, that’s the fun part not just over the past year, forever in this company. We always want to try to get a little better for can. We have to adjusted go with where the market steers us.