Hello and welcome to the SmartFinancial First Quarter 2022 Earnings Call. My name is Lauren and I'll be coordinating your call today. [Operator Instructions]. I'll now hand you over to our host, Miller Welborn, to begin. Miller, please go ahead.

Thanks Lauren. Good morning and thanks for joining us this morning for our Q1 2022 earnings call. It's great to be on the call this morning and share an update on our company. We appreciate the interest you each have in our progress and it's incredibly important for us to hear your questions, comments, and your feedbacks. Joining me on the call today are Billy Carroll, our President and CEO, Ron Gorczynski, our CFO, Rhett Jordan, CCO, and Nate Strall, our Director of Corporate Strategy. Before we get started, I'd like to ask each of you to please refer to Page 2 of our deck that we filed yesterday evening for the normal and customary disclaimers and forward-looking statements, comments, please take a minute to review these. What a strong quarter by our team here at SmartBank on many fronts. Our year has started well just as we anticipated and had projected. We've demonstrated again our ability to outwork the competition and execute our strategic plan. Our organic pace of loan and deposit growth has been impressive. I'm extremely proud of the team for the focus and execution as our metrics continue to improve faster than forecasted in our 2022 strategic plan. With that, I'm going to hand it up to Billy.

Thanks, Miller, and good morning, everyone. As Miller said, this has been a nice start to 2022 for SmartFinancial. We're going to change the format a bit this quarter and condense some of the commentary since our strategic shift to more organic growth leads to a little bit less noise. So, I'll briefly touch on some highlights and then hand it over to Rhett to provide some color on balance sheet, lending, pipelines, and credit, and Ron will spend some time on financials, margins, and guidance. First, let's run through some highlights shown on page 3 of our deck. Not to bury the lead, we had a very nice growth quarter. Loans excluding PPP grew at 21% annualized and total deposits grew at 17% annualized, 23% if you look at just the non-time deposits. On the loan side, growth was well distributed throughout all of our regions, but the new lift-out groups in Alabama and Middle Tennessee were big contributors here. Rhett's going to add some more color on that shortly. Deposits continue to be very strong, coming in on the upper end of our expectations with great growth in existing accounts coupled with some great new client’s courtesy of the lift-out groups. Earnings were right on target, with $8.6 million in operating net income coming in at $0.51 per share. Our diversification in revenue mix is also progressing well. Our wealth management platform posted nice revenue gains as our new financial advisors continued to move over assets. Our insurance subsidiary had a very solid income quarter and our Fountain Equipment Finance subsidiary posted our best quarter of growth since acquiring it, and it continues to build a very solid pipeline. It's great to see these ancillary business lines beginning to [Indiscernible] as we had anticipated. Also, as a reminder, on page 4, this is a great map of our franchise. It's a nice graphical representation of the footprint we're building out, a much stronger [Indiscernible] zone than what we had just a couple of years back. As we stated on our last call, 2022 is a year to execute and capitalize on the investments we've made in 2021 as we move forward to get to stronger core earnings metrics, continued positive trending of our ROA -- ROE [Indiscernible] ratio of what we expect to see as these new investments start to continue to grow revenue. We've started the year off very well in that regard, and that is the goal. So, Rhett, let me hand it over to you now to jump into balance sheet trends in credit.

Thank you, Billy. Looking at Slide 5 in your deck, we have very solid first quarter in loan growth, with natural organic loans and leases [Indiscernible] just over a $136 million ending the period with just over $2.8 billion in outstanding. Production was solid across all of our market areas in first quarter, with our newer market is contributing over 25% of new loan balance production for the bank this past quarter. As Billy mentioned, we ended the first three months with a compound annualized organic growth rate of approximately 21% over prior period. Overall yield in [Indiscernible] portfolio was slightly lower in Q1 compared to prior periods. However, we believe this trend will improve in the near-term as PPP balances continue to decline and the operating [Indiscernible] environment begins to effect very competitive [Indiscernible] loan origination rates more positively. In addition, we continue to see deposit growth for the quarter of total deposits up a $169 million for the year-end 2021. Complementing this, continued positive momentum was another quarterly decline in total deposit costs to just 20 basis points for the quarter. Moving to Page 6 of the deck, loan portfolio mix held relatively steady in first quarter with the growth mentioned previously. While we recognize our loan-to-deposit ratio continues to track below historical levels, we're excited to continue to have excess liquidity to fund what we believe will be a significant year of production from our new lending team members and our legacy core markets. While some economic outlooks and market guidance from various sources indicate a higher probability of slowing economic growth over the next several quarters, our market areas continue to see strong inflows of new permanent residents and business relocations into our footprint. We believe this will continue to drive solid business financial performance and…

Thanks, Rhett and good morning, everyone. Let's move forward to slide 8, loan loss reserve. As Rhett indicated, our strong credit quality has led to minimal credit-related provisioning for the quarter. At quarter-end, our allowance to originated loans and leases was up 74 basis points and our total reserves to total loans and [Indiscernible] percent. Given our positive credit outlook going into, we expect to continue grow [Indiscernible] to support our loan production, to assess the allowance and adequate credit conditions change. Moving on to slide 9. During the quarter, we continued to generate additional liquidity for deposit growth and we're able to utilize a significant portion for loan funding's and security purchases. For the quarter, we funded over $113 million in loans and increased our securities portfolio over $270 million, focusing on shorter maturity, shorter-duration securities. The majority of these purchases were placed in the held-to-maturity classification to help counter the impact of rising rates. At quarter-end, our held-to-maturity total securities elevated to 35% of the portfolio up from 14% at year-end. Additionally, we retired $50 million of FHLB borrowings. Overall, our liquidity position at quarter-end, which includes cash and securities, was approximately 34% of total assets, significantly stronger than the 22% from the prior-year quarter. And our cash to total assets stood at over 16%. Looking forward into Q2 and the remainder of 2022, with our securities to assets ratio over 17%, we're not anticipating any meaningful security purchases as we believe some of our excess accrediting will be absorbed via a strong loan production. We also want to remain vigilant and prepared for any potential deposit outflows that may occur as rates continue to rise. Moving to the right of the slide, our industry margin was 2.91% consistent with the prior quarter despite having further pressure from…

Thanks, Ron. To close, at first, I would ask you to take a look at page 14. Our tech initiatives are really progressing well. One of the biggest initiatives this year is the full installation of nCino's workflow platform. That's moving along and we plan to be live by the third quarter and shortly after, we will be adding the nCino customer pricing profitability platform. We're thrilled to get these platforms operating in the bank this year as we believe they'll have great impacts to efficiency and profitability. Shifting over to our outlook. We are also continuing to watch the economic landscape closely, geopolitical issues, inflation, tightening by the fed, or all elements that could have an impact on us. And we're managing our company prudently, given these concerns. That said, we do remain bullish on the market where we're doing business and believe we continue to grow at a very nice pace. The Southeast continues to shine as a pro business region. The anecdotes are here from our local boards about companies looking to relocate tour areas or stories from our Realtor clients about the number of people moving to our region because of their low tax pro-growth velocity gives me confidence that we'll continue to outpace many other parts of the country. As we've gotten some size on us now as we're approaching $5 billion in assets, we're hitting a very sweet spot, where we have the size and sophistication to bank larger companies as well as having the ability to be nimble and responsive in our community markets. We see this playing out daily as we're having great success in our legacy zones like Knoxville, Chattanooga, Tuscaloosa and Pensacola. But we're also starting to build great momentum in new markets like Nashville and Birmingham. I love their position right now and I can't wait to watch that momentum continue. And in order to keep us moving now more than ever, having a strong culture is critical to attracting and retaining talent. Our continued work on being a top workplace is key and this is an area we're emphasizing more than ever. We continue to be recognized as a great place to work and we do not take those accolades lightly. So, thanks so much to our associates who do a tremendous job every day delivering wow experiences to our clients. The excitement that is being built in our company is strong right now and as we execute our plan, it will be transformative to our financials. It's a great time to be part of this company as a client, as an associate and as an investor, and we're very well-positioned to move forward. So, I'll stop there and we'll open it up for questions.

Thank you. [Operator Instructions]. Our first question comes from Brett Rabatin from Hovde Group. Brett, please go ahead.

Hey, guys. Good morning.

Morning

Good morning, Brett.

Wanted to [Indiscernible] asking the impressive loan growth in the quarter and I've been a little surprised with some opportunities and some of the markets. A large transaction appears to not be going initially as smooth as some were hoping, and so there may be an opportunity to move talent before a deal even closes. I'm curious to hear. What's your hearing in your [Indiscernible] in particular, regarding a large deal, and if you think you'll continue to add teams, and if the focus here now is pausing for improvement more in efficiency, like you talked about a little bit, or if the opportunities are there to go and continue to ramp up on the lending side.

Yes. Well, I'll take that. Yes. From our standpoint, obviously, our number one priority right now is just execution on what we've added over the last [Indiscernible]. But that said, we are always on the lookout for talent in any of the markets. Obviously, there are some bigger trends and actions going on that could lead to opportunities. So mostly important, we're evaluating that and if we can find direct sales talent that we can add to the team regardless of market, we'll continue to -- we'll look at it. I don't think we have really, [Indiscernible] specific initiatives out there today, but I will say we're always looking for great new production talent.

Okay. That's helpful. And then wanted to talk about the margin and the asset sensitivity, and the 4% up for 100 basis points shock. It would seem like, given the cash, that that number could be higher, so I was hoping to get maybe some color on what you're assuming for deposit betas. I recognize money market's a big piece of the funding mix. Just wanted to understand a little bit more on what goes into the 4%

Historically our betas were about 35%, 36%. That's what we use, as you said, conservatively as modeled. We don't anticipate to hit that beta. Based on my commentary, we think it would be much lower than that. But we wanted -- we're a totally different bank today than we were through the last cycle. Even our deposit mix is so different. So, we expect this to run off for our loan fundings and then through our earnings to keep the cash steady and then wing down deposits. It's kind of a loaded question and probably a high-level answer, but it's -- there's a lot of moving pieces for that. [Indiscernible] on that Slide 10, we think the ramp 200 is based on where we're at and looking at the pet cycles. Probably a better age over the next 12 months, but it seems 100 [Indiscernible]

Okay. And then just one last quick one on concentrations. The commercial real estate is now around 300. I'm just curious if the pipeline [Indiscernible] in it than the [Indiscernible] and what -- what their -- appetite for commercial real estate and [Indiscernible]

We're historically managed [Indiscernible] over the upper quartile of guidance. But our pipeline is definitely rated more non-CRE right now. We've got a little over 60% of the pipeline that is a -- that is not in a CRE -loan type and maybe spread across our geography. So, we are seeing a lot of new activity coming [Indiscernible]

We're a little bit outpaced CRE growth, just so -- I think had some draws of some projects we had on the books that were -- that added a little bit to that this quarter; is that correct?

That's correct, we do.

Okay. That's helpful. Thanks for the color, congrats on the quarter.

Thank you. I appreciate it.

Our next question comes from Stephen Scouten from Piper Sandler. Stephen, please go ahead.

Hey, good morning, everyone. Thanks for the time. I thought the market might -- was going to give you some credit for a really good quarter today but it looks like sentiment is still too bad. That first trading, I think this loan growth was particularly impressive even above and beyond what we've seen from some other companies. So, I just wanted to think -- talk more about the loan pipeline. I know you mentioned you just said maybe 60% non-CRE, can you give us a feel for what that pipeline looks like today maybe relative to where it was at this point heading into the first quarter or just kind of frame that pipeline up a little bit more for us potentially?

Rhett, you want to start with that. I may -- I'll add a little bit of color.

I can, yes. I mean, actually, [Indiscernible] is it has continued to grow. We are certainly beginning to see a lot of throughputs coming at markets that we added to go over the course of last year predominantly. As I've mentioned in first quarter, we had about 25% of production. First-quarter came from those markets and the pipeline is weighted about that same amount and we are continuing to get new opportunities out to do it every day especially coming out of several of those areas. So, we are -- I guess in relation to kind of where we started the year, it is continuing to grow and grow in these types of loans as I mentioned that do not add to our CRE, our positioning

Yeah. And I'll add, Stephen, the teams we brought on now and the comment I made about being able to bank larger companies, I think we're seeing that play through. It's -- we've -- what we've seen at especially the new teams is a really nice diversification of clients, a lot of our new businesses operating companies, nice mix of lines and some owner-occupied component. So, we really see -- this -- I think this quarter was a little bit outpaced with real estate just because of primary some draws on some larger projects. But I think you'll see that -- I think you'll see that settle back down and diversify out over the next little bit.

Okay. That's helpful. And I think if I'm looking at the data right, you have maybe about 4.5 million left in the share repurchases that's authorized. How would you think about that today, especially given some of the weakness in the equity markets here we've seen as of late?

We always watch it. Share repurchase right now is not front of mind primarily as we're watching the growth, we're watching capital. Ron's comments, our capital ratios, even with the growth that we had, our capital ratios remained constant, which was great. So, from our standpoint, we'll probably have a little more clarity on that as the year goes out, as far as the appropriate use of capital, whether its growth or other means. But right now, we're going to watch it. Obviously, if share price drops far enough, we'll take a look at some options there, but right now we're trying to keep some powder really more so for growth.

Makes sense. And maybe just last thing from me, just diving back over to the asset sensitivity. It looks like -- I'm looking at apples-to-apples, maybe that went down from up 6.5% to the up 4.2% or what have you. Is that largely driven by the incremental investments you made this quarter in the securities book already? And then along with those investments in the securities, can you give us a feel for what those new yields were on those -- on that money you put to work?

Yes. The majority is that the investment purchases changed a little bit in our loan production, obviously. We did purchase $270 million, the majority of that are almost two-year treasuries. So all-in for about 140, 145, maybe 142, just kind of caught in the middle. That's kind of the yields that we were -- that we put on the books for Q1.

Okay, great. Very helpful. Congrats on a great quarter, everyone.

Thanks.

Thanks, Stephen.

Our next question comes from Kevin Fitzsimmons from D.A. Davidson. Kevin, please go ahead.

Hey. Good morning, everyone.

Morning, Kevin.

I know the topic of the lift-outs is -- has come up a few times, but I'm just curious. It seems like you're probably gaining more clarity each quarter on this and it sounds like your excitement level is picking up in terms of your -- how you're seeing this progress. And so, I'm wondering, Billy, does that make you a little more inclined to be looking for additional opportunities or do you feel you have plenty of run rate -- runway ahead in these and not? It's that -- another question referred to this earlier, it's that type rope of do you take advantage of opportunities available to you but then it maybe slows down the ability to demonstrate bottom-line profitability if you have a lot of these things going on at one time? So, I'm just wondering, given what you're seeing, how do you feel about that strategy doing it on a continuous basis going forward with additional markets? Thanks.

It's a great question that we talk a lot about. And it is the balance. I think for us, again, our priority one is to really get this -- grow it -- get this expense base, get [Indiscernible] for revenue growing commensurate with the expense base. I think that's first and foremost. But at the same time, I think strategically, we don't want to turn our backs on good opportunity, so we're always keeping an eye out for that, especially now that we've been able to have success recruiting and bringing over really strong sales talent. The bank has changed so much in the last couple of years, just from the sophistication, the way we operate, the way we underwrite, the way we handle the sales process. And so, I think we're building something that can continue to plug on more of those types of organic opportunities. But I know right now we're laser-focused on making sure that we can control this expense line, which we feel really, really good about, and really get this revenue growth. So, we're going to balance it. It's a little bit of a hedge to answer, but we're going to continue to balance it and look at both sides.

I'll add too. I'll give Billy and the team credit. There are some institutions that have a different philosophy that will just add lenders, add producers, build budget lab for producers. Ours is a little different in that, sure, we've had other opportunities and we think we'll have some in the future, but I will say culture and fit is a huge component of what we're looking at. We're talking to folks about wanting to come on board and the lift-outs and the legacy lenders we have all understand we're all on the same page of where we are and where we're going. I just think that's a huge component of it, we're not looking for somebody to just come in with a bunch of transactions. We like long-term clients and the lenders that we have and the producers are just -- are a great fit and that will be very important as we look forward to bringing any more on.

Okay. Thanks, Miller. Thanks, Billy. And one quick follow-up on expenses, so I appreciate the run rate from Ron. I'm just thinking, what's the best way to think about as we look into the back half of the year? Is that a decent run rate to think about or because you mentioned the efficiency ratio coming down. I'm assuming that's more from the revenues picking up. But you also have some initiatives and the Encino roll-out that you talked about later in the year. Is it a realistic goal to expect just kind of low, very low single-digit type of expense growth or is there something more we need to be aware of?

Yeah, Kevin. Actually, we -- during the guidance for the expenses today, it's pretty much what we see for the rest of the year, quarter-over-quarter. We -- as Billy had indicated, we've controlled our expenses and we feel we can -- anything we can do is absorb. Again, we will gain efficiencies, which you can see now, to offset some -- to other [Indiscernible] controlled, no incremental growth toward that line item at this point.

Yeah. And I'll just add, we're -- we may have a little bit of an uptick if we add some occupancy in Birmingham or in Nashville, some markets where we're looking to get some [Indiscernible] But I think to your point, it's going to be a relatively low tick-up in the expense line. And then we think this revenue line is going to start to move up nicely for us. I think that's where the efficiency gains come in.

Got it. Thanks very much, guys.

Thanks, Kevin.

Our next question comes from the line of Matt Olney from Stephens Inc. Matt, please go ahead.

Hey, thanks. Good morning, guys.

Morning, Matt.

I just want to clarify the outlook on the margin, the 310 and 2Q. I assume that captures the Fed hike from a few weeks ago, 25 bps. Does it assume any kind of Fed hike in the May or the June time frame at all?

Yes, we're following the Fed cycle, where we are -- we expect two more. Again, we'll add half of one -- half of 50 in May and then expected another 50 in June. We didn't go any further than that, but it's all baked in that margin.

Got it. Okay. Thank you for that. And then on the deposit side, I guess there were some commentaries in the prepared remarks that you've been a little bit cautious about deposits and any kind of potential for outflows during this cycle. Is there anything in particular at the bank that you're more concerned on than others? Just trying to get a sense of the cautiousness there about the deposit outflows over the next few quarters. Thanks.

And I'll take that one, Ron, you can add anything that you feel pertinent. But I think for us Matt, I think the cautiousness is really just trying to watch what's going on with these rates again, looking obviously to lag these [Indiscernible] at least this first-rate increase or two on deposit cost. The liquidity position that we're sitting in gives us some ability to be a little more disciplined on moving our rates up, so I think that -- I believe, Ron, that's really where our commentary has been. We still feel really good about our ability to produce new deposits. These new teams that we've got coming in were bringing on and on-boarding just some outstanding client relationships, so I think it gives us a little bit of -- it gives us some comfort there. But again, just being cautious we're going to look and if we get a little bit of run-off, we've got enough -- we've got plenty of powder to allow that to happen. Ron, is that a fair [Indiscernible]?

Yeah, that's fair. And we don't know when this deposit cycle will end or maybe it won't. We've been blessed with our growth in our deposits and we're still seeing deposit growth today. But we just want to be just cautious to say, okay, what happens if it does slow down or stop. That's kind of what we put out there, but no, we're not seeing any evidence of that happening whatsoever.

And I guess just following up on that, Ron, does the -- how else does the guidance assume any kind of deposit growth from current levels? It seems like the loan growth you expect to fund with the excess liquidity addition coming down. So, it seems like you're not assuming any kind of deposit growth from here and as you said, you can be pretty careful on deposit pricing as rates move higher so just trying to appreciate. At what point could we see deposit growth and if we did see some, would that be the catalyst to increase the size of the securities portfolio? I know that's -- there's a lot there. I'm trying to appreciate kind of the way you guys are thinking about this now.

Yeah. I can go in any direction with that and getting the weeds. We're probably -- we're modeling around a 3% deposit growth for the year. So again, we are expecting a little bit still seeing -- having the loans outpace. We're seeing that 67% loan-to-deposit ratio. We really are encouraged to keep our loan production going to start getting more into the 70 range, 70s ideal mid '80s. Today, where our asset, where our securities are, we are very -- we're comfortable where we're at with our -- with the level of securities. I think going over that approaching the 20% level of assets. Again, it's quarter-by-quarter at this point to see how the numbers are shaking out. We're just being patient with our stands. We think we're in a great position to execute one way or the other, and we just don't want to jeopardize the execution for any reasons over this. We should be patient over the next quarter. Now, my guidance next quarter may change, but right now, that's -- we're pausing a little bit and just seeing how it settles down.

Okay. Got it. Understood. Yeah, you guys are on a great spot for rising right? Thank you.

Thanks Matt.

Our next question comes from Feddie Strickland from Janney Montgomery. Feddie, please go ahead.

Hey, good morning, guys.

Good morning, Feddie.

So, I appreciate the overall guidance on the non-interest income but I was wondering if we could dig in a little bit just so I can understand longer-term. It seems like mortgage held up pretty good in the quarter. I'm just curious what your outlook was there and what percentage of production is purchase versus [Indiscernible]

Ron, you got that?

Yeah, I'll take that. We think our -- we're never a really big mortgage shop, we're very steady since throughout the last few years, we've been very steady. Come of record highs, we think of Q1, it's probably a good indication of probably the remainder of the year. We have a lot of headwinds with supply rates and such but we do have a strong pipeline coming in and we don't think that will change much and I'm sorry, the other part of the question?

It was really more about the percentage of refis.

Yeah. Right now, we're at 50-50. 50 is our refi or what we put in the portfolio or probably a combination of both, yeah, refis. I would say for the refi sides, product was higher to 85% refis unless -- I'm sorry, back that up. Let's keep 50-50. I'm getting my numbers mixed up.

Yeah. We've not had a really -- we've never really had a huge ReFi -- obviously a little more ReFi in 2021, we're seeing [Indiscernible] I think that the pipeline right now is obviously -- it is much more [Indiscernible]. And we've seen a lot [Indiscernible] parts in our market's too, with supply changing a little bit, even though you're getting some upward tick in materials calls we're still seeing a lot of construction firms. I think our mortgage or to hold pretty steady this year. I don't -- we don't see it -- we don't see it taking a big a big dive down because we just -- I think what we we'll lose in the ReFi piece will be able to pick up in just some new purchases and we've added a couple of new production team numbers there late in the year, last year.

Got it. So, it sounds like overall, just your footprint effectively really helps with keeping that steady just because you've got continued population in form. Is that right?

Absolutely.

It is. And I think that's really the key. Again, I think what we lose on the refi side, we should be able to replace on the purchase side, pretty close at the end of day. We like the business. I think the way we've got Air structured is really quite frankly pretty good, given, where the market is today. We don't have a ton of overhead in that lot of business. And so, we got a very efficient mortgage shop and believe that what we'll see is continued purchase money opportunities as we move forward.

Got you. And then just one more for me, still in non-interest income. Just -- it seems like investment services was up a good bit this quarter, was that just -- is any of that seasonal or is that just solid growth? I saw you guys had a technology initiative related to that, so I wasn't sure if that's just reaping the benefit of some of that or is that just growth in that division?

The wealth side is really just growth in that division. I really don't believe my -- I don't believe there's much seasonality in that at all. It's primarily, Feddie, just the new teams coming online that we had. We made a push, added a really nice group of financial advisors down in our Gulf Coast region. Late last year, those folks are continuing to move assets and perform well. And really, all of our markets are trending nicely from an investment wealth platform side. So, most of that should be recurring, we believe, moving forward and hopefully growing as we continue to build our [Indiscernible]

Got it. Thanks, guys. Appreciate the color and really appreciate all the detail on the slides as well.

Thanks, Feddie.

[Operator Instructions]. Our next question comes from the line of Catherine Mealor from KBW. Catherine, please go ahead.

Hey, good morning.

Good morning, Catherine.

I just want to follow-up on the margin. I wanted to ask about loan yields that both yield X, accretable yield and PPP has remained really steady over the past few quarters at 418 now. How do we think about how it compares to where new loan yields are coming on? And then as we think about finally getting the impact of higher rates, is there still some kind of downward re-pricing just from the new loan production or do you think this is the bottom of the loan yield and we'll start to see that move up next quarter? Thanks.

I think it's kind of a joined question.

You start, Ron, and Rhett gives some follow-up on what you're seeing in the pipeline.

Yes. We had expected our loan yields, you know, with -- to begin with increases. We should see about a 25 basis points to 30 basis point lift on the next quarter for those purposes and I think we're at the bottom. I don't see us -- we're at the bottom of the cycle as you've indicated. Rhett, you want to --

What have you seen in the pipeline?

I would say the same. I mean, obviously you're still continuing to see some pretty aggressive pricing in the marketplace from time to time depending on the transaction. But we're also beginning to see some creep up in what rate we're able to still win the business at, at least -- certainly in the past, I think, 45 days or so of what's been added. Also, we've got a handful of transactions that came on the bank's books as 40 rate debt, was going to be positive [Indiscernible] and as rates begin to move up. But we also did have the interest rate swaps out of that as well, so those contributed to [Indiscernible] growth yield for the bank. At the end of the day, we'll get the benefit of the upward rising rates out on the loan piece and any kind of fixed rate type of exposure, we're beginning to see improved rates on the pipeline. It certainly takes a disciplined approach not to give it away.

Yes. And I'll add, Catherine. What we're seeing in -- and I know that we were talking about this in a long meeting the other day, we've got -- we're seeing some of the -- especially the smaller balanced loans, we're able to get some rate movement in those. Obviously, some of the larger loans, it might be a little tougher, competitive standpoint. I think that the real thing that we're watching is, you're still seeing a lot of competition be extremely aggressive. We think in some cases, too aggressive on the pricing side. Especially folks with the liquidity that certain on balance sheets right now. We're watching that, but we're trying to stay, and I think the guys use the word discipline. I think we are really trying to start to build some discipline in their pricing and handle it appropriately but it's -- we feel pretty good about our ability to get a little bit more light moving forward.

And then on that $1.1 billion of variable rate loans, can you help us think about the timing [Indiscernible]? How much of that float immediately in reprices immediately with the rate Inc. praise versus maybe a variable piece that lags by a [Indiscernible] quarter [Indiscernible] along?

We've got that. I think it's in the [Indiscernible].

That's in the deck. $450 million of the variable rate loans will reprice immediately with any rate increase. And then we're looking forward after the next 100 basis point rise, we'll add on another $85 million to that.

Okay. Great. And then the delta of that, what's the timeline on that?

It's more of a timeline, I think very minimal for the remainder of '22. These are [Indiscernible] and some of that are U.S. U.S. Treasury based, so it's really a time element. The majority of those will really come in over the next several years. So not really meaningful. Again, probably, I would say next year, $40 million at the end of 2022 and for 2023, we're looking at $60 million. So incrementally, it's going to be thrown in. The majority of it -- out of three years will fix times back to floating.

Great. Okay. That's super helpful. And again, just reiterate, you said you think there will be a 25 -- within your 310-margin guide for next quarter, you're thinking we'll see a 25 to 30 bit for lift in [Indiscernible] equal. Did I hear that right?

Well, yes. Yeah.

Yes.

Great, perfect. All right. Thank you for taking the questions.

Thanks, Cathy.

Thanks, Catherine.

Our final question comes from William Wallace from Raymond James. William, please go ahead.

Thanks. Good morning, guys. Just a couple of follow-ups. Wondering on loan growth, if you could talk a little bit about your pipelines, how they stand at the end of the quarter versus the end of the fourth quarter? And based on the pipelines and the pull-through rate that you're seeing quarter-to-date -- or you guys maybe go with the first, wanted to maybe --

I'll start in [Indiscernible] Pipelines just kind of [Indiscernible] into Q4, into Q1 are a little bit higher. I think when we look at those, Rhett for us and in converting. What we're not seeing that we saw in the last couple of quarters of 2021 are the payoffs, payoffs have slowed. Production numbers in pipeline have been relatively good but so we're getting a little bit more, we're picking up a little bit more in the net [Indiscernible]. From a guidance standpoint, the guidance that we gave last quarter for 2022 was a mid-teens number. I think we still feel good about that mid-teen number when you look at it for the year. Again, we're really trying to address it really on a quarter-by-quarter basis as we watch what rates do. As these rates move up, does that slow pipelines a little bit. We've not seen signs of that yet. Pipelines are still strong, so we feel good about Q2 from where we're sitting today and still feel good about that mid-teen’s annual guidance.

Okay. Great. Thank you. And then I had a couple of house-keeping questions. In your guide, the 3-10 margin guide, what did you say was the anticipated impact from purchase accounting, accretion.

Oh, I'm sorry. Yeah, let me -- purchase -- the purchase account increased I think is $580,000.

Okay.

And the PPPP income was $975,000.

How much in fees do you have left in the PPP program and what was the ending balance?

That's good. We're hopeful we can be out of the PPPP business by the end of this quarter on that side of the house. But we have very little left after that, $50,000 left after that. So, we're at the end of that cycle.

Okay, great. So, we're done. Okay. That was all I had just from a housekeeping perspective. I appreciate the time, guys.

Thank you.

Thanks.

We currently have no further questions. So, I'll now hand it back over to Miller Welborn for any closing remarks.

Thanks, Lauren. Thanks each of you for joining us today. I hope you have a great rest of your week. And as always, feel free to reach out to one of us if you have additional questions. Good-bye.

Goodbye

This concludes today's call. Thank you for joining. You may now disconnect your line