Bank Of The Ozarks Inc (NASDAQ:OZRK) Q4 2019 Earnings Conference Call - Final Transcript
Jan 17, 2020 • 11:00 am ET
So it's just the cycle of origination volume that we had from three years ago coming through, but the total funded balance will move up. We may have a quarter or two throughout the year, where it's like it was in Q4, which it was down in Q4. And there will be quarters where it's up, but I think our good origination volume that we saw in 2019 and are expected good origination volume that we're expecting in 2020 should help alleviate some of those payoffs that are coming from our previous origination years.
Got it. Okay, all right. Thank you very much.
Our next question comes from Stephen Scouten with Piper Sandler. Your line is now open.
Hey, good morning, everyone.
Good morning, Stephen.
So, appreciate obviously all the details you guys gave in Figure 8 is kind of where I wanted to focus as well. It's kind of -- I'm thinking about the forward growth and I get why paydowns will be higher with the '16 and '17 originations, but it seems like those paydowns would start to abate in the back half of 2020 as we move further through that pipeline is that at all possible? And do you think there is some likelihood you could see growth in RESG pick up in the back half of 2020 or 2021? Or is that just too early to say?
Stephen, I would add a little additional color. And again, I think, Tim took the last question to the right figure which is Figure 8. The majority, probably the remaining originations from 2016, a large percentage of that will pay off a big chunk, although we wouldn't expect near all of the 2017 originations to pay off in 2020. And then we'll have a little bit of the '18 originations that have paid off. One of those loans is already paid off. So you will see will see a high level of payoffs we expect in 2020. And those results will be fairly variable from quarter to quarter. If you look at the first quarter of this year, I think RESG at net funded growth of about if I'm right, $442 million. But it shrunk in Q2, $228 million. It had funded growth in Q3 of $256 million but shrunk in Q4, roughly $157 million. So we had two quarters of positive growth, two quarters of negative growth for the year, RESG's funded balances grew about $314 million. It's kind of go back on Ken's question. It is -- you could paint a scenario where we would have negative RESG growth for the year. We don't paint that necessarily the likely scenario you could also paint scenarios where we had better growth in RESG in 2020 then we did in 2019. But I think the kind of center line of that growth is probably somewhere plus or minus, not terribly far from what we saw in 2019, because again, we're going to have a big wave of payoffs and