00:03 Hello all and welcome to the SmartFinancial Third Quarter twenty twenty one Earnings Call. My name is Lydia, and I'll be your operator today. [Operator Instructions] 00:18 It's my pleasure to now hand you over to our host Miller Welborn to begin. Please go ahead, Miller.

00:26 Thank you, Lydia. Good morning, and thanks for joining us this morning for our Q3 twenty twenty one earnings call. We always love this with this group each quarter to talk about our progress in our company. Joining me today on the call are Billy Carroll, our President and CEO; Ron Gorczynski, our CFO; Rhett Jordan, our Chief Credit Officer; and Nate Strall, our Director of Corporate Strategy. 00:50 Before we get started, I'd like to ask each of you to please refer to page two of our deck that we filed this morning for the normal and customary disclaimers and forward-looking statements comments. Please take a minute to review these. 1:02 What a fantastic quarter by our team here at the bank. I’d challenge anyone in the bank with more energy, drive and commitment that our team here at SmartBank. We demonstrated again our ability to outlook competition, execute our strategic plan. Our organic pace of growth has been impressive and we see nothing slowing that down in the months ahead. Between very strong markets and the addition of several new sales team members that Billy will talk about shortly. We feel we are well positioned to continue on our current pace as we march toward the end of twenty twenty one, we're excited about what we have accomplished this year-to-date. 01:39 With that, I'm going to turn it over to Billy.

01:43 Thanks, Miller and good morning, everyone. This was another extremely solid quarter for our company. This year has been a very busy one from this final round of PPP to an acquisition, to the lift-outs to several new expansion markets. Twenty twenty one has been a transformative year. I'll provide some high-level thoughts on our recent accomplishments and then turn it over to Ron for financials and then the Rhett for credit. 02:10 First, we have some great highlights for the quarter. Referring to page three of our slide deck, starting with earnings and tangible book value, a very nice income quarter with operating earnings coming in at nine point nine million dollars or zero point sixty three dollars per share. Tangible book value has increased to nineteen and zero three dollars or seven percent quarter-over-quarter increase. Returns were solid as well with thirteen percent return on tangible common and credit remains pristine with non-performing of zero point one four percent assets. 02:42 In addition to our financial performance, you'll see we’ve eclipsed four billion dollar in asset mark continuing to add size in a relatively small peer set. Getting into this four billion dollar to six billion dollar range has been a focus where we now have the size in the earnings momentum to better leverage opportunities. 03:02 We also had outstanding growth this quarter. Net organic loan growth excluding PPP was over fifty two million dollars or approximately nine percent annualized. Our lending teams continue to do a great job and we're seeing growth balance throughout all of our markets. If we weren’t surprised by anything, it continues to be the growth on the deposit side of the balance sheet. We've not been surprised that our bankers continue to do a great job in growing our core…

06:07 Thanks, Billy. Good morning, everyone. Let's start with slide seven balance sheet. Since twenty seventeen, we’ve continued to realize consistent balance sheet expansion. As Billy indicated for the current quarter, we’ve launched excluding PPP and loans from our SCB acquisition over fifty two million dollars or eight point six percent annualized and had year-to-date loan growth of twelve point two percent annualized. 06:32 In addition, we had over ninety nine of PPP forgiven and acquired two hundred and nineteen million dollars of loans from SCB, net of the Montgomery loan sale. Our average loan yield for the current quarter was twelve point nine five percent, an increase of forty two basis points from the prior quarter, which is attributable to an addition of one point seven million dollars of accretion income. 06:52 On the right side of the side, you can see that our deposits continue to positively trend upward. During the current quarter, excluding four hundred and thirty six million from the SCB acquisition, our core deposits increased over two hundred and twenty five million almost twenty nine percent annualized. Between this growth and our focus on control on funding costs, we've lowered our total cost of deposits to twenty five basis points, a third basis point decline from the previous quarter and had a loan to deposit of seventy percent. 07:24 On slide eight, you'll see tending information on our loan composition along with our current quarter activity, which Rhett will be going on shortly. And so again, our deposit composition remained relatively stable, with our current quarter growth and SCB acquisition. We remained focused on managing time deposits downward, while growing our non-interest bearing deposits, which currently make up over twenty six percent of total deposits. 07:52 Looking ahead, we have not expect a significant change…

11:58 Yeah. Thanks, Ron. We felt that it’s important to share with this group some of the information that we've been working on related to technology. We've talked around it on previous calls, but we've been doing some real work and moving our company forward in tech. 12:13 On slide thirteen, you'll see some of those initiatives that advance -- how we built in there expense guidance. I believe banks not putting significant focus in this area or going to be behind and we will not be in that position. Of note, one of our biggest initiatives was moving to the nCino platform. This will begin next quarter and I'm confident it will be a game changer in the way that we handle our entire commercial process from prospecting to closing deals. We're very excited about this work and know it's going to be critical to our future success. 12:44 So with that, Rhett, I’m flipping over to you and let you talk about lending and credit.

12:49 Thank you, Billy. As noted earlier in the deck on slide eight, our loan portfolio continues to show good diversification across the loan segments with twelve percent annualized loan growth quarter-to-quarter of approximately two hundred and seventy eight million dollars. This is inclusive of the Sevier County Bank loan acquisition, but excluding PPP loans. 13:06 Net organic loan growth for the quarter was fifty two million dollars, an annualized increase of eight point six percent over prior quarter. The SCB acquisition did not impact our overall portfolio mix significantly with the post close profile being very similar to previous quarters and same period prior year. 13:21 As mentioned, our portfolio is seeing consistent growth this year spread across all geographic areas of our footprint. Our CRE portfolio has seen the most growth year-to-date moving to approximately forty percent of portfolio outstandings as compared to thirty five percent at year end twenty twenty, primarily due to the impact of the Sevier County acquisition. 13:39 But as Ron noted earlier, we’ve also seen good year-to-date growth in our owner occupied commercial real estate segments as well. We continue to see strong housing demand in our market areas with core market still seeing historically low supply levels and strong price performance due to this demand. Our overall loan portfolio yield continues to reflect solid positioning at four point two one percent including the SCB portfolio, but excluding accretion in PPP loan impacts, which is above both quarter one and quarter two levels. All-in-all, a very solid quarter, the strong organic loan growth in the portfolio and a positive outlook for the remainder of the year. 14:09 Slide fourteen shows our overall asset quality metrics which continued to trend very positively and generate consistent excellent results. Our NPA ratio continued to improve throughout…

17:17 Thanks, Rhett for the detail. Let's move forward to slide sixteen, our loan loss reserve. As we continue to have great starts to our credit quality, we did require one point one million dollars provision to the quarter, which is needed for the reallocation of loan discounts associated with the SCB loan sale and to a lesser extent facilitate loan growth. At quarter end, our allowance originated loans less PPP loans was at zero point seventy five percent and our total reserves to total loans and leases less PPP loans was at one point two six percent. 17:48 Onto slide seventeen, capital. Our capital ratio remains strong with a slight uptick from the prior linked quarter. The current quarter’s acquisition of SCB had many effects on our capital. Our tangible common equity, tangible assets was down slightly to record volume to our excess liquidity position and our acquisition. 18:11 Excuse me, our current levels are well positioned at this time. And to wrap up the side, our entire SMBK team is focused on consistently building shareholder value. At quarter end, our tangible book value per share was over nineteen dollars, an increase of seven point three percent linked quarter annualized and over ten percent increase year-over-year. 18:29 With that said, I’ll turn it back over to Billy.

18:33 Thanks, Ron. And to close, our markets are all performing extremely well. The Southeast is poised for great continued growth. And it's one of the reasons you've seeing us pivot a bit as we look at more commercial banking lift-out opportunities. Our loan pipelines continue to be robust and are equally distributed across all of our markets. With the excess liquidity in the system like most others we’re battling some headwinds and some low line utilization and paydowns. But that said, we're very bullish on where we stand. And once these new teams get up and going, we anticipate our loan growth will kick off in the mid-teens on the annualized basis. 19:12 We're seeing this company transform and operate on a different level, continuing job revenue, moving toward being a top tier performer all of while closing on how we get there. I'm very excited to be part of this company right now. It's very exciting to be an associate and an investor. I think we're very well positioned to be opportunistic moving forward. So I'll stop there and we'll open it up for questions.

19:48 Thank you. [Operator Instructions] Our first question today comes from Brett Rabatin of Hovde Group. Brett your line is open. Please go ahead.

20:02 Hi. Good morning, guys. This is actually Ben Gerlinger on for Brett.

20:06 Good morning.

20:08 Hey. Congrats on crossing four -- it's good to see as curious, if you can kind of start with the growth trajectory. I understand that you guys had a very busy year to say at least. And then the guidance was for kind of the low-double digit, if I heard that correctly linked quarter annualized growth as kind of a core rate. I was curious on how you guys think about with a larger balance sheet, the lift-out opportunities, I'm sure that there's going to be some sort of lumpiness to growth as you add more lenders. But when you think about the strategy for growth, is there an area of lending or geography of lending that you see as the lowest paying fruit for areas where you might want to expand? 20:52 And then kind of juxtaposed against that the expense guidance for the twenty four-ish million, Does that include any additional lift-outs for next year or is that kind of a core rate as if you're running out a static pace?

21:10 Ben, I'll start with that and I'll take the last part of that question first. Ron, I think I'm saying this correctly the expense guidance you're getting is kind of what we've got today. We're not looking, we would adjust that if we came up with any more lift-out opportunities.

21:25 Yeah. That is correct.

21:28 And so, yes, expenses is that just what we've got going today, Ben. The first part of the question, I do think that, obviously, the growth on the loan side, the deposit side is something that we're really focused on again, this organic pivot, kind of is, as we talked about earlier in previous calls this year, I think we've been kind of targeting even though we've been above that. We've been I think for the year I think we're running about twelve percent growth which has been a little higher than we thought. And we're not in this quarter with the lift-out as we look into twenty twenty two, we do think that number is going to edge up from what we’ve discussed as mid to high singles now into mid-teens, and we feel pretty confident about that. Again the expense guidance that we built in incorporates not only the lift-out compensation, occupancy expense, but also the technology that Ron talked about. So we're trying to lay out what we believe is a fairly well way to expense line. And feel like these teams get up and going. And then, as you know, it might take a quarter or two to get these folks up and running, but once they do, we're very, very excited about the growth trajectory that the bank can achieve.

22:59 Got it. That's very helpful. And I guess that the kind of the internal lift or bolt-on what flipped out is -- that’s the new focus. It makes sense could you have more control over the growth and the credits that you're adding, but it also frees up capital a bit to some degree, if you're not looking to do major acquisitions. So it's curious on how you now approach any excess capital and how you feel the deploying like, if you could do the rank order of the priorities?

23:34 I’ll take a stab at that, Miller, Ron if you guys feel free to chime in. Well I think we've always been big believers in appropriate leverage of capital. We never really felt like we had an overabundance of that and when we've added. I think we viewed it in a smart way. I think for us right now, I think our thoughts around excess capital is growth obviously with the share buybacks could come into place if we think that is appropriate at the right time that would be a bright utilization of that dividend increases -- we’re weighing all of these different pieces today. And I think for us right now we're at a, I think we're in a good spot related to capital. We don't have a lot of excess. But I think we're very comfortable with where we sit today.

24:35 Yeah. And I think that's something that we addressed currently weekly, daily, hourly around here. We talk about it often allocation of capital, best use of capital and going back to the expansion rate, I will say that there are certainly -- will be additional lift out opportunities, we believe additional adding of sales teams. So that we protect that a little bit on upside if we have to run rate side. When we talk about M&A a little bit or lack of, we certainly continue to look at opportunities as represented to us, investors we said before a ton of time and been in relationships. And we've stated over the last quarter or two that our top quality is organic growth and lift-out. So we're not saying we're not going to do a deal that I will say that if we do a deal, you can rest assures they will be a good one. It will be very, very special, if we do one. So that answer you’re capital question I know that we prioritize them, but we continue to juggle that and look at that and assess every opportunity.

25:50 Okay. That's great. I really appreciate the color. Thanks, guys and congrats on crossing four.

25:56 Thanks, Ben.

25:59 Thank you. Our next question today comes from Stephen Scouten of Piper Sandler. Stephen, your line is open.

26:08 Great. Thanks. Good morning, everyone.

26:11 Good morning.

26:12 Good morning. I just wanted to think about operating leverage for a second into twenty two just given the puts and takes of when these new hires will be able to contribute. Do you think you can see positive operating leverage year-over-year? Is this more like a twenty twenty three event given the need to kind of earn back those initial upfront costs?

26:33 Yes. This is Ron. Yes, we are seeing the positive effects going into twenty twenty three. Twenty twenty two, we will again, as we grow the portfolios and build our asset base, twenty twenty three will be the year that will be positive for us.

26:54 Okay, That's helpful. And as we think about just trying to circle back on the loan growth commentary, I know Billy, you said kind of mid-teens once these guys are up and running, but is this more mid-single digit for the next couple of quarters until that time or am I misconstruing that?

27:12 No, I don't think so. I think we get there pretty quick. I think from the pipelines that we're seeing right now Stephen and it's not just the new teams, it's our existing teams so our pipelines feel really good. So I think what we looked at is, it takes a quarter or so some of these folks have been a quarter now. So it ebbs and flows a little bit, but I don't think we're -- I think we're looking at double digits here relatively soon. We may take -- it might take us a quarter or two to get up to that for full pace but we should be relatively getting the double digits here within the next quarter. And we're been in mid-single digits in a while. Yeah, I mean we’re not yet, again we're not. So we're a little bit softer at nine percent this quarter. But I think you'll see that double digit pace moving up to mid-teens here over the next couple of quarters.

28:18 Okay, great. And maybe just one last thing for me here, and that's three percent NIM guidance, is that a core margin kind of ex the accretion and ex the PPP or is that relative to the three thirty five GAAP NIM and could you kind of -- I know you gave some of those numbers on expected accretion and PPP accretion, but what would be the big drag quarter-over-quarter? Is that more some of the securities investments that maybe falling that down either way?

28:44 Yeah I think -- I think three percent is kind of answers to your question, it’s just to bolt-on, for third quarter, we will be wind down the PPP process and see that last tranche of fees get recognized through the NIM, as we go into twenty twenty two our deployment -- our deploying excess liquidity, which really hampers our NIM to get more positive results off of that. So we are seeing appropriate one side to the other. What we do see that three percent as a baseline going forward. So unless we get loan accretion, just kind on an accretion, the unusual pops along the way from the loan activity, although, now we're seeing solid three percent one way or the other.

29:34 Okay, great. Thanks everyone for the color. I appreciate.

29:38 Thanks, Stephen.

29:41 The next question comes from Thomas Thomas Wendler of Stephens Inc. Thomas, your line is open.

29:47 Thank you and good morning, guys. I got a couple of questions here. Give me idea what kind of loan yields you're seeing on new production and then kind of how the new hires are playing into that?

30:00 Yeah. Rhett, I know you’ve been -- you've got -- I think some data probably -- the best data on new production yields. Can you kind of run through some of that.

30:08 Yes. I mean, if you look at, just most recent quarter, we're still averaging around close to four percent owned new yields for productivity for new activity going on the books and overall it's maintained relatively steady.

30:25 Yeah. And I'll add Thomas, I think some of the new teams as we're bringing in some larger large C&I top clients. Some of that is probably coming on board a little bit lower, but typically you're going to see that kind of on a low basis. So you might be looking at somewhere in the lower threes and some of that new production, but it is variable right product that becomes just some nice fee side as well. So we still think we're getting -- we're getting decent pricing everything is too low obviously in this environment. But I think comparatively thinking we are still getting pretty decent pricing on new production.

31:09 No, that's great color. Thank you. And then one final one for me. With your new teams, are they focused on gathering deposits at all since you guys have so much excess liquidity? And then once they do kind of shift over to gathering deposits, can you give any idea of what kind of impact that's going to have?

31:26 Yeah, they are. As the bankers that we're bringing over have been just really strong full relationship bankers. And so we're not just going out chasing loan transactions even though Ron said not a billion dollars in cash. I mean we're still looking to bring in these core deposit relationships with treasury and that really has continued to go really well from what we've seen. So the pipelines of loans also should lead to more deposits as well they should be and corporate checking top balances primarily, we've -- at lower no interest rate, so that we'll continue to take those even though we're in a pretty heavy cash position. We think that's going to be a great long term benefit for us.

32:23 All right. Sounds good. Thanks for answering my questions and great quarter, guys.

32:26 Thank you, Tom.

32:31 The next questionnaire in the queue is Catherine Mealor of KBC. Catherine, please proceed with your question.

32:40 Hey. Good morning. I just wanted to follow-up on balance sheet size conversation and thinking about that four hundred million dollars of security deployment. What's the timing that you plan on for that four hundred million dollars?

32:54 Yeah, Catherine. This is Ron. Yes, we've already started our deployment and we’re probably looking at seventy five dollars to eighty million dollars a month. The amount of drives into the first quarter of twenty twenty two, so we've really right after the continue bumped up is when we started doing our purchases timing was in our favor at this point, so we've already started.

33:20 Great. And therefore I know this will change depending on how rates moved, but today how new yields -- what are kind of average new yields for those investments?

33:28 Yeah. Right now, we're looking at for what we purchased so far, around one forty five, one forty five -- one fifty range.

33:39 Okay. Great. And then my second question just on the margin thinking about next quarter, you said three percent for the reported margin, which is implying from further compression in the core NIM, if we back out PPP and a accretive yield. Is that -- are there any significant changes to liquidity or the size of the balance sheet for next quarter except, I guess that does include some of this liquidity will go to securities. So even within that, we're still, I guess I'm trying to think about we're still seeing more NIM compression even though part of these securities are going to be redeployed from cash into securities next quarter, but maybe is there way to think about it as we bought them next quarter and then it's a slow grind up as you move through twenty twenty two?

34:29 Yeah. Exactly that. It's not only core NIM, but again it's fully loaded for Q4 to three percent because again, we saw that excess PPP fee recognition and then we kind of convert over during Q1 with the deploying to the buying portfolio, and then that reduces to negative carry. So we're kind of in a natural lift back to that three percent range. And that includes as our loan production, slowly drilling down it's not significant but a little bit of the compression, but still that three percent is I mean, we're looking at that for the next pretty flat throughout the next four quarters with all the balances back and forth we have in our -- with our activity.

35:20 Okay. Great. And then one thing on expenses and this is a challenging question. I know with all the moving parts within the margin as well, but I'll just throw it out there to see how you're thinking about it. But is there an efficiency ratio target that we should think about maybe longer term as we kind of feel the full impact of the cost savings from the deal and then the benefit from all these recent hires?

35:48 Yeah. Catherine, this is Billy. I'll take that and Ron feel free to chime in. For us, as we -- I think our longer term goal is to be so sixty, that's where -- that's where we want be that's where I know we need be and say, I think that is the longer term goal. I think right now we’re kind of -- we drifted into low sixties, I think you'll see that should that will probably tick out fewer here in the near term, probably up maybe up a couple of percentage points as we kind of realize this expense load from the new group, but we think that will get kind of fast forwarding up twenty twenty three. We think we see that number edging back down in our long term target and it's really not that long curve. I always kind of look at this as a marathon not sprint. But I think in a reasonable term, we should be able to get that back down into the lower sixties and our goal is to be sub sixty as a company.

36:53 Great. That makes perfect sense. All right. Thank you so much.

36:57 Thanks.

36:57 Thank you.

37:00 The next question comes from Feddie Strickland of Janney Montgomery Scott. Your line is now open.

37:08 Thanks. Good morning, guys.

37:09 Good morning, Feddie.

37:13 I saw you guys had some really strong net income overall, but I saw mortgage came in a little lower than I was expecting, is it safe to say mortgages kind of starting to pull off at this point? And I guess the growth in the other fee income lines offsets that going forward?

37:31 Yes. That's probably a fair statement. I think our mortgage has stabilized. I don't think I think it's very stable. I think our biggest issue is and talking there mortgage teams in our various markets. We are very bullish on this own. We're seeing the population, a lot of its supply is just where we're running into issues. I mean home inventories it just seems to be slowly just kind of just because of that as the primary driver. We're still very bullish on what we've got and continuing to look to add some mortgage provision that team numbers into these new teams. And so we're pretty -- we're still looking to add to that team and grow that line. But I think it's stabilized. It’s probably the best work. I mean Ron any…

38:32 No. The leading was -- we were excited to see that some of our non -- our other non-income categories are starting to take over. This mortgage is being number one for us for a long time. So even again, relatively stable, income going forward there are other categories will overtake that as more of the leaders in that group, which is part of our emphasis going forward.

38:58 Got it. Is there any secular line whether it's the wealth management or equipment finance or is there any particular line that you guys see kind of be in the star going forward?

39:14 Ron, you want to jump it on that?

39:14 Yes, I think we have the greatest opportunity in our customer service fee line, with the lift-outs and Billy had mentioned about the treasury, our treasury service and our platform. We are making some hires to support that group. And we think we have our most opportunity in that line item in the near future. We'll see that growth a decent amount. So we're starting to see that.

39:40 Yes. Feddie, I'll just add. We're really focusing all of them. And Ron has alluded to some of the fee side on swaps we've got. We've got the investment side where we're really putting some real deliberate focus especially with the teams that we've added and some of the private bankers on there that really do a nice job for the wealth management clients. It really is all playing together. So we've been focusing on all of those zones. Like Ron said, we probably looked at fee sides maybe being in a little bit more shining story you’re near term, but we see lift and really all those lines.

40:28 Got it. And just one more question for me, just given the restaurant closure, it sounds like it's safe to say you guys are going to be focused on the south and the east. Is there any consideration for expansion and this could be longer term too. But into the Carolinas, or is North Georgia probably a more likely next step either without lift-outs or acquisitions?

40:54 Density in the markets where we love the Tennessee, Alabama and Florida Panhandle we would certainly look at continuous markets of opportunity which is just really, really nice. So I don't know that I would prioritize the Carolinas over Georgia, Georgia to the Carolinas. It's not going to be in numbers and opportunity game.

41:17 Yes. And I'll just add to that Feddie. From us I mean, there is, I think in way definitely look for continued growth in contiguous geographies. So I think all of those will be onboard but again focusing primary focuses is on what we've got.

41:39 Got it. That make sense. Thanks for answering all my questions and congrats on a great quarter.

41:45 Thank you.

41:49 Thank you. The next question comes from William Wallace of Raymond James. William, your line is open.

41:57 Thanks. Good morning, guys.

41:59 Good morning.

42:00 Ron, in your prepared remarks, it sounded like you said that the provision expense had to do with I think you said like repositioning or something around the pending loan sale of the Richmond assets, did I hear that correctly and if so, can you explain that a little bit more?

42:23 Yes. We -- it was -- the Richmond loan sales considered the day two event. And there's a lot of discounts associated with that. So when we took away from the pools of the loans because we do the pooling based on call codes. We kind of how to reallocate do another valuation assessment on the remaining portfolio and we have to replace -- we had to replace what was taken out from the loan sale. So it's just a timing issue it was not a day one issue. So it was strictly around the fair value -- readjusting the fair value marks, I guess, so to speak. I usually -- you’ve see that on the day one and you never see it again but we had to reevaluate of once again at nine thirty.

43:11 Okay. So that, that didn't run through the net interest income line as an interest adjustment, okay.

43:24 It did not.

43:29 Okay. So moving forward, then, how should we be thinking about the provision expense line with the mid-teens anticipated loan growth rate and assuming that we don't get any back up and economic, the current economic situation really the COVID or anything that were continuing to improve, not get worse?

43:54 Yeah. Third quarter, I think we're probably -- we're probably going to maintain our percentages at this point of time. Again, we have seen -- the cases have -- the variant cases have drilled down in qualitative factors. So -- and I think there's probably a little bit opportunity for us to keep it low, but I think we'll keep that seventy five basis point model for the time being, again every quarter is a different strategy or a different calculation but probably flat. And with our loan growth, we're just trying to -- at this point, the calculation saying we'll try to still be in that seventy five basis point range to way you made it book.

44:41 Okay, all right. Thank you. That's helpful. And then trying to do this, but I'd like to circle back to the NIM commentary. So, the guidance for the fourth quarter is around three percent and that includes about two million dollars. I think you said two point one million dollars of accretion related to PPP loan fees. But then it sounded like you said, moving forward, that you'll still be around three percent even when that'll be the last of the PPP accretion. Is that correct?

45:13 Well, we had a -- we still have a little bit of seven million plus to do Q1. And at that point, the big movers is we're going to eliminate the liquidity drag, which is third quarter is twenty eight basis points. And additionally, we're not taking accounting, was still carrying a lot of one percent loans other than the PPPs recognized we still have that pace of one percent SBA loans that were on the books that were data driven. So there's a lot of moving pieces that we're still expecting that three percent to hold that we followed in lower margin today.

45:57 Okay. And then so in twenty twenty two, what is the kind of anticipated run rate on the purchase accounting accretion, excluding what might come if you have loans pay off required a loans pay off or anything like that?

46:15 And the fourth quarter it was six hundred and forty four thousand highly thousand ballpark I don’t have in front of me, it’s five hundred thousand a quarter. It's not as -- this acquisition didn't bring a lot of discount accretion to it. But as always, we do have a lot of loans in the portfolio still loaded with marks and with the paydowns and pay offs in such we will probably have one unique events happened quarter-over-quarter as we've seen just to get accelerated accretion coming through the books new loan discount accretion.

46:52 Okay. Yes. Okay. And then if you just -- you guys have done a lot, right, with team lift-outs and acquisition, if you -- I don't know if you track this or not, but if you do, I mean, if you were to look at your core originators and the growth that they're adding to the portfolio or are they is the run rate of this business, is it really kind of a high-single digit run rate that will be boosted with all the team list-outs et cetera, or is -- do you think you could settle out low double digits once we get past the kind of the initial boost that will come from all the new hires?

47:36 Yes. I think near term, I think your earlier comments right, I think we're still any running kind of that, that I call it mid to highs with the new team numbers coming on board. I think that's pushes it up in the double digits into the mid-teens. I think we said -- I think we're double digit grower while moving forward, I mean I really do the way we're structuring this team and kind of what we're looking at with the markets we're in, the group that we've got. I think we could be kind of on an average of double digit grower even past this initial kind of the initial spike that we anticipate.

48:19 Okay. That's very helpful. I really appreciate the time guys. That's all I had.

48:22 Yes. Thank you.

48:27 Thank you. And our next question comes from Kevin Fitzsimmons of D.A. Davidson. Kevin, please go ahead.

48:35 Hey, guys. Good morning.

48:37 Good morning, Kevin.

48:40 Most of my questions have been asked and answered. So apologize if I’m being redundant here, but just want to give in your answer a few questions ago about expanding into other states and the fact that the move you're doing in Richmond, it's fair to say that the focus is on these existing markets, as you pointed out the formula. So given the new teams that you've hired, is it safe to say you have a flag planted in the markets you want to be in. And now it's just a matter of adding density in those existing markets or is there other metro markets in Alabama, or the Florida Panhandle that are -- you don't have a flag in yet, but you would jump on if a team became available?

49:33 Kevin I'll start and then, guys can jump in. I think we're -- I think we've got most of our flag plan, and I think as we've said previously, we continue to like that Nashville zone. We believe Nashville we need to continue to grow there. We're in the MSA, in Murfreesboro but that's an area where we think we've got the size now and the ability to be impactful in that market and so that's a priority. We're in that zone, but we would love to get a little bit bigger in that zone. Same thing they say about Alabama. We're in most -- now we're in most of the MSAs. We did release a few weeks back letting folks know that we're looking to grow in Birmingham. That's an area where we want to grow. Our floor plan is going to be based there. We've already planning some leadership in that market and very excited about opportunities there. In Florida, I think Florida is an area where I think we could see some expansion maybe a little bit further, maybe a little bit further east we’ve added some scale in Tallahassee. I think you should look kind of through that kind of that item or there could be some other opportunities there. But I think it's contiguous to rate where we are. And I don't know or Billy want dive into that time.

51:06 Really, get on Birmingham and building out that market, obviously a really good city in the state of Alabama. And I’m just success bring success, so good bankers want to be part of a good team and a good bank and as we build out some of these markets, so we just gone into and expand on some of our more material markets. I think we are able to and have discussions on a regular basis with good bankers that we will be able to bring into our team.

51:38 And is that focused that pivot that you talked about before is that more based on the willingness of these loan officers to move like there's an increase willingness? Or is it more about and I think you've discussed this before about just not having the bulk up in size. Not being that's not as much of an urgency where before, arguably maybe it was a little more like hey, let's do a deal and we'll optimize we'll figure it out late, not figure out later, but there was an urgency to getting into a certain size we're now it's more of a real rifle shot approach to getting the right people getting in the right markets?

52:23 Even at two billion in assets, your size, your living limit, your earnings momentum to invest in new teams is just limited. I think that's the reason we taken the approach of getting the foundation built through acquisitions in organic over last several years. And now with earnings momentum that we have the sophistication that we built around treasury and credit and all of these other ancillary pieces, we can go out and do it much better job and recruiting in these bankers that are looking to move to us from these larger regional they know we can handle their books of business. That's tougher to do when you two billion or even thirty. I think for us, we felt like we needed to get to this size. And now I think we're a very attractive alternative for some of these really good regional bankers that are maybe be looking to go somewhere it's got little more levels. And I think that's what's appealing to us now. And I think that's what's a attracting really good really good team to us.

53:42 Okay, great. Thanks, guys. Thank you.

53:43 Thank you.

53:49 Thank you very much. [Operator Instructions] We currently have no further questions, so I'll hand back over to Miller Welborn for closing remarks.

54:09 Thanks, Lydia. Thanks for all you all for joining us today on the call. We appreciate your support of our company. And we hope you have a great rest of your week. Have a good day.

54:21 This concludes today's call. Thank you for joining. You may now disconnect your lines.