Great. Okay. All right. Well, our next fireside chat is with Home Bancshares. My name is Matt Olney, and with us today from Home Bancshares, Chairman, President, CEO Johnny Allison, and Director of IR and Board Member Donna Townsell . So, Johnny, Donna, welcome. Appreciate you guys being here. That means a lot to us. Johnny, I'll turn it over to you for any kind of opening remarks you want to make about what's on your mind, whether it's kind of what you saw in the third quarter or any thoughts on the fourth quarter. I'll kind of turn it over to you for some opening remarks.
Thank you. I don't know what's bothering me, but some things bother me. Some things bother me more than others, but who knows what's going to happen? I worry about this war situation. We need to get that under control somehow. Somebody needs to bring we need to get that fixed somehow, some way. Maybe Trump will do that. I think we all got a big kick from the Trump bump. That's good for the bank stocks. We've been in the ditch forever, right? And we've been an asset class nobody wanted to own, and then now they want to own this asset class. So it, is it real? I think it's probably real. I think good things can happen from here. I was a big Trump supporter, as you can imagine, but you know and he's got his faults, but for business, it was good.
I think it'll be good. I think it'll be good going forward. I think we can get our deals done quicker and faster, and hopefully we're the enthusiasm to go do some deals now with a kick in the stock price is good. We're looking at a couple of deals that we bid on one yesterday, and we'll see where whether we get that or don't get it. But I think the excitement, a lot of it's mental, right? People got good attitudes right now, and they're excited. We see our asset move up in value. I guess I need to ask Matt, is this, it's a multiple expansion for us? Is that where it's going to end up? We're going to sell at 16 times earnings now rather than 10 or 12. We weren't getting paid for the past.
We'd work hard, and we might have a really good quarter and we really didn't. It didn't move the needle, but as of now bank stocks, this nice little Trump bump that we got is pretty sweet. We know about what he's going to do. It's not a mystery about what Trump's going to do. He'll do about what he did last time, and that was positive. Everything that he touched last time was. I think he'll do again this time, and I think he'll be positive. I hear they may get rid of the CFPB. I don't know if that's correct, but it'd be nice. They pick at us once in a while, but we really had one incident with the CFPB, didn't we? We've had to do away with fees, a lot of fees on the. They call them junk fees.
I don't think they're junk fees. They cost us money, particularly on hot checks items. And we've done away with all of that. It's cost us a lot of revenue. But still, Home's having a great year. We're having the, I guess our best year ever. We ran a 196. We showed a 177 or 178, I think, for the quarter. But we took $16-$17 million reserve for a hurricane reserve. We would have run a 196. So we're on the. We're looking for an opportunity. We're looking for a deal. We want to do a trade or two. I just need to get when my team runs a 196, I can't ask for much more than that. So they need. I need to get more assets.
I need to find something that's running a 75% or 80% efficiency ratio, running a 0.9 ROA, and bring those assets in, see if we can't turn them around, turn them into a 170, 190 ROA. And that's how we make our money, right? That's what we do. Our stock's at about two and a half times tangible. We're on a trade out of Texas on a private bank, and the purchase price is 1.3. So 1.3 on that, if we get it closed, 1.3 on that versus 2.5, 2.6 on our stock, that works. The math works on that. So it—even though it's a smaller deal, it's—it's nicely accretive to the company. So I was looking for a home run deal in the last cycle when all the banks were in trouble. We didn't get to play.
We were dressed up with a sack full of capital on our shoulders. We were ready to play. And Fed backed up their truck and loaned people $1 on something that had a market value of $0.50. So anyway, that's how that happened. And I'm not sure that's over. They've kicked the can down the road. Some of those banks are in better shape than they were. I don't know what the Fed will do when it comes to March. It's really interesting to me. I said we're going to watch. I think overall trend on rates is going down, but I think we're going to see them kick back up here. We're seeing them kick up. I don't know if that's as effective. Banks out there trying to get money because they got to pay that, pay the Fed off in March. That's a big, that's a big number.
We don't know who's got money borrowed. You have to get in the 10-Ks to find out where that is. The government gives you a total amount, but they don't specifically give you a list of who's got all this money borrowed and where they're going to get the money. I think they're going to have to go, obviously. I think broker CDs will go up. I think all that could hit to March, and maybe the Fed extends. We paid ours off. We had a little arbitrage on that deal. We're making money with it, and the trade went against us last week, and we paid off $700 million. So we had money paid off, so we just paid it off. So stop that expense turn from a positive to a negative. So we got rid of it. But anyway, that's about Donna. You got any comments?
Anything you want to say about the quarter or anything going on?
No, I don't think I can add to that at this point. See what Matt has to ask.
So definitely want to circle back on several topics you brought up, Johnny. Maybe start with just loan demand, the sentiment of borrowers at this point. You know, you mentioned the election results. We also got the Fed to cut 50 basis points in September, 25 basis points a few weeks ago. These are all pro-business events. Are you seeing the uptick in just borrower interest, borrower appetite in recent weeks as a result of all this?
It's going to take a while. You know, they had plans as my big construction guy came into Conway, and he had six projects, and four of them didn't work. So he put them up, right? He did two of the projects. The other four didn't work. They probably don't work today, but they're probably getting closer to working today. So I think a lot of it's here. The attitudes of people are really good right now. There is a lot going on in Miami. I've been there twice. Donna and I were there at a conference, and I flew down to meet with our big huge customer base we have in Miami. They're all Cubans and wonderful people. They love us. They're patriotic Americans. And our guy that runs Miami Force is Cuban.
They just, I bet I looked at and talked about $2.7-$3 billion worth of projects that they're working on in that market. So they're really big projects. These guys got money, lots of money, and they're real transactions. One of them bought a big 40 or 45 acres on Key Biscayne. I didn't know he could buy 45 acres on Key Biscayne. They just bought it, took it down. They're going to develop that. Another guy's taking a 600 and something space, mobile home park, that his dad bought 40 years ago, which, of course, it's paid for. They make $10 million a year off of this mobile home park. It's a lot of money, right? He's taking them all out, taking all the mobile homes out. His dad had a dream of building this beautiful area, Sweetwater. Sweetwater is the name of the area.
As it turned out, it was low-priced housing has turned into the land is extremely valuable in, in that market. So I'm guessing he's going to do $800 million-$1 billion worth of projects over the next seven or eight years. He's our customer, and we'll get, we'll get to fund those. So I'm excited about that. We had loan growth the first three quarters, albeit slight last time. And I had projected we'd have loan growth the fourth quarter. I'm going to quit projecting because every time I say we're going to have loan growth, we don't. And when I say we're not, we do. So that's like catching a greased pig. You just get your arms around it. You think you got it, and it gets away. So you never know what your customers are thinking. They may be selling something.
They may be buying something that we have no idea what they're doing. And that can, that swing can move whether you have loans or don't have loans. I think our New York operation should have. I think they got some payoffs coming in the fourth quarter. They're a little lumpy. But overall, the legacy footprint part has been really good this year. It's rates are holding up. We're prime plus or prime minus is where we're trading right now. We're still doing fixed and variable rate stuff. Most people want variable rate. So, I just have to say loan growth is okay right now. We're actually down. How much are we down? A little bit right now?
Yeah, a little bit. We're not down a lot, though.
$25-$30 million, I think we're down right now, going into the fourth quarter. So, but if we can turn that around, that'd be nice. Have four quarters in a row, have a little loan growth. Deposits were off about $170 million last quarter. They're up $190 million yesterday. So that's real flow. That's real economy. Those were really the main checking account for lots of those companies we do business with. So up and down, but it didn't go away. It just the time and the cycle of it. Matter of fact, we looked back last year to the same time, and we had a decrease in the same quarter last year. I don't know what that's from, basically, other than just business as usual. I don't know if I answered that.
No, you answered the question. Just to clarify, it sounds like loan growth could lag in terms of the activity, the incentive. It could get there in terms of improving, but we're not seeing it quite yet, and if we do see it, it sounds like Florida could be the market where you would see it first. Is that a fair?
I think it's fair. They're just, people are still moving to Florida, and it's just, it's just really good. And to have loyal, I'm with two guys. You know, some of you heard this story. I'm with two guys there that their mother stuffed them in the back of an Er coupe airplane, open cockpit. The dad was up front, and he told his wife, "If you hear the engine start, you come running with those two boys from Cuba." And the engine fired, and she came running out with those two boys and stuffed them down in that Er coupe. And he took off on the runway and flew 100 feet over the water and landed. They were little bitty boys and landed in Marathon, Florida. And I mean, they've lived under communism. They see what it's like. And just great people.
And now they're 50-something years old, and they're just, they've been on the other side. Patriotic Americans are really, we're at this dinner, and we're at a high-dollar restaurant, and they jump up and start going, "Trump, Trump, Trump." And that's, we're about to get thrown out of here. Great people.
Let's circle back to M&A and Home BancShares has been a little more active acquirers over the last 20 years. I've lost track of how many deals there's been over the last 20 years, but it's a franchise built on acquisitions. The bank's got tremendous capital. There's a great currency there for a stock-for-stock swap. Just how would you describe the overall opportunity for M&A for Home BancShares at this point?
I think it's pretty good. We're on a couple of trades, as I said, and we bid one yesterday. We bid a bank yesterday. So where that goes, I don't know. We'll probably find out Friday or Monday if we're in the running on that, on that other bank. But I'd like to fill out the East Texas market. In my past life, we were in when banks failed in Texas, we bought Tyler, Longview, Lufkin, Nacogdoches. We bought about. We paid about $3 million for failed banks in East Texas, and we turned that into $600 million in shareholder value. So that was my first experience with taking a failed bank and fixing it over a period of time. And I learned at that point, I said, "I get it, man. I get this.
I got—I figured out how they did that." So when Florida blew up last time, we went and started buying in Florida and bought 10 or 11 failed banks. So we're on—I think it's a good time for us to do M&A. As long as our stock price holds where it is in this range or goes higher, which it could do, then I think we'll be in the catbird seat to go do some trades. I mean, think about it. If you're 2.6 times tangible book and you're paying 1.3 for something, that's almost like buying it for $0.50 on the dollar. So, of course, you got to mark the other side of the balance sheets, and that increases the purchase price. We try not to dilute our shareholders.
I told somebody, they said, "John, would you do a five-year dilution?" I said, "I don't even buy green bananas at my age." So, you know, I just—I think that no need to try to, to outsmart the market. Just do what you need to do. And I think that—I think you'll see us active on buying in, in—we haven't done any dilution in the past. I'm on one right now. It may be a 1%. It's accretive to EPS. It's accretive to book. It's 1% diluted to tangible book. And it's about a six-month, seven-month earnback. I may do that trade. So I don't want y'all to think I've gone off the deep end because Johnny finally did a diluted deal. It's just temporary. You could play with—I can play with the numbers and make it look good, but I don't—we don't do that.
It is what it is, right? We just lay it out there. If it turns out to be six months diluted, it'll be six months diluted. I don't think the market will punish me too much for that.
I want to open up to the room on the M&A topic. Before I do that, it sounds like some of these M&A opportunities are on the smaller side. How small would you go? And then conversely, what do you want to see? What's the sweet spot that you're targeting?
Oh, a couple of billion dollars probably. The ones I'm looking at are about $750 million each in the Texas market, which give me about $1.5 billion in an area that I want to be. So, I'm not afraid to do a $500 million deal. You know, when we did the Happy deal, we had those problems out in West Texas, and hopefully that's going to resolve itself before too long. And at least all the parties are at the table talking about that situation now. So maybe we'll get that resolved over the next period of time. And in the bank that they all were going to go to work for is in receivership. So it's that whole thing is a mess out there. There's lots of people suing the bank and a lot of people suing each other.
It's kind of a train wreck. Hopefully that'll evolve. At least the parties are talking now. I was really mad about it at one point in time. I'm not near as mad today as I was then because we've got our arms around Texas now, and it's performing much better than it was before.
Yeah.
So, but you do a big deal like that and you run into a train wreck. You run into those situations. It hurts you a little bit. It knocks you back. You do a smaller deal and you don't pay much attention to it. You can fix that overnight. So, but I don't have anything in East Texas to speak of. So we'd probably need some stuff in East Texas. We'll probably buy some stuff in that market. Outside of that, you know, again, I like Tennessee and North Carolina and South Carolina. I like those markets. There's not a lot left in Florida. There's getting to be a scarcity value to the stuff in Florida. You think about it. There's just not much left there. And, I mean, there's some. We'll try if we can pick something up there. That would be nice for us to do too.
I'll pause it there to see if there's any questions in the room, with respect to M&A.
Just a question. Matt and I were talking about this before. When you talk to management teams for these smaller banks, do you get the sense that any of them are, some of them are private, maybe some of them are public and don't trade. I mean, does anybody have any delusions of grandeur that being a small-cap bank is fun? Unless, you know, it's more prone to a combination than anytime in the last five, six years. I mean, being a micro-cap bank is not a good time, right? Do you get the sense that they're coming around that, you know, we're not going to hit a home run by ourselves in the public market?
Well, you know, it depends on how long they want to milk it. You know, so you get some management teams in there that want to spend the afternoon at the country club playing golf, and they got a job there at the bank, and they live four or five miles from the bank, and they can go back and forth, and they run a 0.7 or 0.8 ROA, and they're happy with that, and they're just going to continue on. Some of the boards of directors are kind of going, "We got through another crisis." You know, so what can possibly go wrong? You've heard me say that we had the worst financial crisis since the Great Depression in five, six, seven, and eight.
Then we have a pandemic we hadn't had since 1917, and then we're back to inflationary times, back in the Volcker days. So we've been through all of that. That's one reason I carry so much reserve. And I think some boards of directors are kind of saying, you know, "Well, we got through another crisis here. We're in this inflationary. Let's get some strong hands. Let's go with somebody like Home that has a fortress balance sheet, makes good money, pays a decent dividend, and somewhere we can sleep at night." So, you know, mama's saying, "Well, daddy, you put so much money in that bank. When are we going to get it back out?
When's it going to come back out?" Well, we can give them the private, or they're semi-public on appointment, trade on appointment, basically, right? So they can get some money out of it. They can live, they can get some money back out of it. They can see the money, they can get a dividend, and they can enjoy that. So I think you're going to see more of that.
I think you'll see more people coming to the, I mean, I would think if I was a member of a board of directors of small banks and really understood what was happening in the bank market, particularly with all the failures we saw, I think I'd be trying to figure out a way to protect my family and shareholders by hooking up with a Home or a Prosperity or some good financial institution out there, First Financial, or some of those people that run really good numbers. And you can still count your money, right? You know what it is. You know, in a private bank, you don't know what your stock's worth, do you? You really don't know. In Happy Bank, they priced it at two times book. That was the price. Two times book. Two times book.
I'm talking to Pat Hickman when we were negotiating. He said, "Well, I've never gone below two times book." I said, "Where do you get that? Where do you get that price?" "Well, our accountant sets it every year." I said, "Well, okay." You know, that's, that's BS. He said to me, I said, "Well, we can't pay two times book." He said, "Well, you won't buy this bank then." And I said, "Okay, thank you. Will you take me to the airport?" I wasn't bluffing. I wouldn't, we couldn't go in there. We ended up slightly diluting on the front end of that deal because the securities went from, we went from up $27 million December 31st to down $127 million in the first quarter on the securities book.
So we ended, didn't set out to do a diluted transaction, but we started out doing a diluted transaction. We've overcome that now. Company's earning back. It's actually, the company's actually clipping right on $100 million a quarter. Last quarter would have been, actually would have been probably close to $110 million for the quarter. And we're running right now, right with what I get the daily report to compare us today with the same, same day last quarter. So I can see where we're tracking. And I'm running right with what I did last quarter. So I'm pleased with, I call it humming. The company's back humming. We've cut the expenses. Let expenses get a little fat. We had to come back and cut those. We cut them. And we're operating. My executive team the other day, we're on a phone call. We have an executive meeting every day.
They said, "We need to add this and we need to add this and add that." I said, "That's fine." I said, "The expenses, it's $111 million a quarter, guys. Y'all do whatever you want to. That's what you got. $111 million a quarter. You can add what you want to add over here, but start subtracting over here." I said, "Who are you going to let go? You're going to have to let somebody go." Anyway, we're hanging in there. $111 million is probably a little tight for us right now. That may be a little low.
So on, back on the M&A front, we were here a year ago. We talked about the M&A opportunities that were from distressed sellers, that poor liquidity, in some cases poor capital, and they were getting squeezed. Since then, the industry has seen some healing. There's improved liquidity, still some challenges. Are there still opportunities for these distressed sellers, or is it now a matter of looking at more traditional, healthier sellers? Where are we as far as that life cycle, you think?
I think there's a lot of wounded ducks out there. I think there's lots of wounded banks that have, it's been a pretty, we haven't had the competition. The competition has not been there in this last, this year, basically, because so many banks were loaned up and they needed liquidity and they really couldn't loan. They were not competitive. They weren't competitive on loans, which gave us a runway with money to go lend lots of money and dictate the rights. So we still are dictating the rights. I'm beginning to see some, you know, somewhere in this cycle, the dumb money shows up and they parachute in and they start doing 5.5% in an 8.5% environment interest rates. You start seeing them do that. We've not done that.
I thought a while back, we talked about the executive committee about coming with a seven, seven handle on some loans when we're writing at eight or nine and just getting out in front of this and putting a hell of a big prepayment penalty on there if they pay us off. So someone said, "Well, Johnny, you got a lot of fixed rate loans." I said, "Well, what is a fixed rate loan? I don't believe I got any." And they said, "Yeah, you got fixed rate loans." I said, "No, I don't really have any." And when rates, when rates fall 200 basis points, there is no such thing as a fixed rate loan because if you don't lower your rate, they're going to pay you off, right?
So all the models, you structure all the models on how much money you're going to make based on your margin, you can throw that out the window. It's a snapshot in time. Our team, I have to say, Stephen Tipton is doing a great job. Our team has really done a good job on the cost of funds side because when these rates drop, they're dropping. Our people throughout the organization are dropping their rates. So we're just adjusting immediately and seeing if we can maintain that spread and keep that 4.20 margin in there. It's about where we're running. I think we're going to continue to run in the fours, maybe a little variation in there, but I don't see much difference right now. I see interest expense coming down, but I see revenue coming down. So the spread is hanging in.
So I think our margin's holding. If you can run a 421 margin, hey, I'm an awful happy guy right now. We got, we got a new president coming in. I think that's going to give us a kick. Home is in a great financial condition. We're making good money. I couldn't, I couldn't ask for things to be much better than they are with, with our team. And some, I was at, we were just at Piper's conference recently and guy across said, "You may be in the best shape of any bank in the country, Johnny." And I said, "Well, thank you for that. I appreciate that. That's nice, nice comments." And I'm hearing a lot of those good comments. Makes it, makes it worthwhile getting out and doing, "Hey, these things don't run themselves.
Somebody got to run them." And sometimes you got to make tough decisions that you don't want to make, but you got to make those decisions in order. Who do we work for? Hell, we work for the shareholder, right? Totally for the shareholder. So we got. I don't. The ESG stuff is kind of going away. The DEI stuff's going away. I don't. I don't think we're going to have much of that. I gave that to her. There's something I don't want to deal with. I say, "Fix it. You just fix it." So anyway, I just. I don't know what. What is she? You said she's our and other duties as a, other duties as assigned. So I just, anyway, she did a good job with the, with the ESG stuff.
We were, she walked in one day and said, "Hey, most improved in the Southeast United States." And I said, "Congratulations " and went on.
I'll open it up again. Any more, any more questions from the audience? Adam?
[audio distortion] Florida and the hurricane damage [audio distortion]
I don't know. Yeah, we got a, that swath went through about $2 billion worth of where our, but loans, is it Santa Maria Island?
Anna Maria Island.
Maria Island. We got a bunch of houses on Anna Maria Island. These are pre-Hurricane Zone houses. And they took a beating. They took a real beating. We may take another, I don't know. I'm talking about maybe taking another $30 million, just sticking it back. I may do that, may not do that. But anyway, I'm thinking about it. So we're going to. We still have some of our customers that are in lawsuits from the last hurricane years ago. So, I mean, if in my next life, I'm coming back as an insurance company because they don't pay anybody unless you sue them. So, that's why I'm going to come back in. It's just frustrating, you know. The one guy said, "Well, it wasn't, it's flood." And he said, "No, it's not flood, it's wind." You know, the wind blew the flood.
And they fight over that stuff. It's ridiculous. But, you know, it's probably going to get tougher in Florida on insurance. It's probably going to continue to go up. I think we'll always have insurance. We may have to do some federal legislation at some point in time on that insurance. But it, I forgot what your question was. Now, hell, where I was running off on something.
Yeah. Oh, how much loss? Well, let me tell you, outside of that swath was tornadoes. It was spinning up lots of tornadoes out there in places that weren't in the swath got hit. We got a guy that raises oranges, orange orchard. And he's been with us a long time. He's fought the battle. I don't know. I don't know if we'll end up with an orange orchard one of these days or not, but he got hit. He got hit. The tornado got him. So he'll have a, hopefully he'll have a pretty good sizeable check coming from there to replace some of his trees. That's not a, you know, grow those trees tomorrow. So, so we had some of that happening out there. The extent of the damage, we don't know right now. There'll be, there always is some loss out there.
We probably have $100 million on deferment right now. That's how I know. We have a, because we've done this so many times, we just, if they need deferred, we'll just defer on its interest only. We'll take the loan deferred for six months or whatever. I don't remember the $100-$150 million we have on deferment right now, but that's, we've seen so many of these things over the years. I mean, we have the sat phones, we have the generators. We call it hurricane mode. We go into deferment mode for our customers, and it's just an automatic deal. We have a 1-800 number so our people can call in and check in so you know that they're okay and they're healthy and they don't have a problem, and we didn't have generators at all places.
We do have generators at them now so we can get them back open quicker. It's just a way of life. It's going to happen, right? Hurricanes have been coming forever. And I guess they'll continue to come forever. So we just call it hurricane mode and we just hit it. We just line up and go through our checkbook on the hurricane zones and we do what we need to do. I bet we hadn't lost $25 million on all of them over the years. But this Anna Maria, is that what she said?
Anna Maria.
Anna Maria Island is. It got hit pretty hard. I talked to him on the phone. He's one guy owns lots and lots of real estate there. And he was in Arizona. I said, "What are you doing there?" He said, "Would you maybe be in Florida and clean out the mud?" He said, "I'm not going to do that now." He said, "We're." I said, "Do you have business interruption?" And he said, "On every house, I have business interruption." So that's good stuff. He got income coming in on those rental properties. So he's a big. He owns lots of hotels, houses, rental property. Big. Been a big player with us. We don't do as much business with him as we used to because somebody else got smarter than us and cut the rates and came in and doing business with him. But that's fine.
He's still a good, loyal customer to us. I think he's going to, there will be a bunch of new loans. Where he is on that roll, there's going to be a bunch of new loans. Those houses will have to be back, built back to hurricane standards this time. There'll be more money borrowed on those. We're just about to get rid of that. That could give us a kick in Florida. You know, the problem, sometimes you check all this stuff and somebody didn't have an insurance policy. That's the problem. You know, we're constantly trying to keep up with that, but sometimes you want to slip through and you end up without an insurance policy on a $4 million house or something. That doesn't happen very often though.
The $30 million you mentioned for those, are you talking about $30 million of write down or provision to put against it or $30 million incremental deferred loans?
The $30 million will just be an additional reserve.
Just no earmark for anything, just additional reserve. You know, the Democrats say you never do let a good crisis go to waste. I say you never let a good hurricane go to waste when you get a chance to build your reserve. So, I mean, it's a pass for us, right? It's a freebie for us. And we can, when we need it, if we don't need it, we just won't make a loan loss allocation for the next period of time.
Sticking on the credit front, I think you've talked about $200 million of problem loans, potential problem loans, mostly in that Texas market, mostly from Happy. What's the update there and what's the potential for loss of that $200 million?
There's the good news is we have lots of capital and lots of reserve, and we don't have a gun to our head. So we don't have a lot of credit problems. So we, we work through these credit problems, take our time. You probably heard about the marina we had on the Arkansas-Oklahoma line. We sold that marina and came out well on it. We, these all Texas loans originated before we got there. The apartment complex north of Dallas, we fixed it. We finished it. We finished the completion. They, the sponsors walked off at about 65% completion. We did it, we finished it 100%. As it turned out, the contractor was our customer anyway. We said, "Fix it, finish it." So now we got a full price offer on it. We got, it should be gone by the end of this quarter.
It's got a little piece of land that's tagged on the side that I don't know what the status of it was, but something's got it held up to closing that little piece of land, strip of land. So, but that's going to work out. That one's going to go away. We got one south of Dallas. It's a train wreck. It's a 220-unit apartment complex. And the money was loaned to them to refurb and freshen up this apartment. They got about two-thirds of the way through and didn't finish. And so they boarded up some of the rooms. And then the homeless people moved in next door and they started going into the room. It's a train wreck. Awful.
I'm sitting at asset quality. As we go through any bad loans in the company by regions, I'll just make a mark by that loan. If I think we're going to lose $2 million, I'll put $2 million down. I wrote $7 million on this apartment complex, which is a $21 million loan. I wrote a $7 million down there. We have an offer for better than that. You'll probably see us getting rid of that deal. I don't know what we can do to fix it. I think it might cost more to fix it than it's worth. That's that transaction. We've got one in Miami that is our loan, and we have three offers on it, and I suspect it'll be gone soon. We got about $8 million in it, and we got three offers at $7.5 million. I think there's one at $7.6 million.
A lady that runs that for us does an excellent job. She said the first one gives me $8 million, is going to get it. That gets me out. So I don't know. We may take a little haircut on that. That'll be gone. The office building in Santa Monica that Chris Poulton, our New York team, loaned the money on is now, we've got Lululemon in there. We got the company that was in there out. Lululemon has signed a good long-term lease on that. The law firms moved in. We're now 85% in that building. We didn't have a gun to our head. We took our time. We also moved Chris's office and his group in one of those offices there. So I think that's a $25 million project.
We'll probably sell it in 25 because we're getting enough revenue cash flowing. So we're pretty happy with that transaction. You know, time heals all wounds. In 2005, 2006, and 2007, we did a lot of A/B notes. The guy said, "I can't pay $15,000 a month." That's what Kevin Hester [asked], "How much can you pay?" He said, "I can pay $10,000." Well, we figured out what $10,000 was, would amortize on a note over 10 years. And we put that on an A note. And then the B note just sat over here on the side. Amarillo by Morning . Sorry, folks. Just sat on the side. And when those properties sold, still had the B note too. We got paid on every one of those. Didn't lose a dime on any of them. So time heals all wounds, right?
So that's kind of our attitude on asset quality, particularly when you get, you know, I went to look at the marina deal. What the hell's a marina? As many boats are selling in the world, what's a marina in trouble? Well, as it turned out, the loan was 60 days past due when we made it. We shouldn't have made the loan. So just some of those things that you get out there, those are little fires that you're seeing out there. If I see a fire, I want to fix it. I want to put it out, right? Get it out. If there's a person that's creating problems or headaches, then we don't need that person. You know, we need to move on. We need to move on down the road. We got enough good people.
It's hard enough to run these things without having people that create problems on you. So when they do that, it's time to clean them, clean them up, move them on out. So some of that happens on the loan side. The disappointing part of Dallas, Fort Worth, and Austin was those are transaction banks. All of those banks down there just do transactions. It's not relationship banking. They're not building. I mean, we ended up with $1.5 billion in loans and $400 million in deposits. You know, that's a transaction bank. That's what they do. That's the downside of those big metropolitan areas. Except for Miami, it's totally different there in Miami. But in Texas, all these banks are transaction banks and they don't build relationships. So you see what they needed to do on deposits. They all went out and bought all this hot money.
They had to have it and paid up for it and it cost them, cost them on the earnings side. You all know the story. Home did not do that. We didn't, we didn't, we didn't put our money in long-term securities. We just didn't do it. We just sat on the cash and that paid dividends for us.
Unfortunately, we're out of time, Johnny. But any last questions or any closing thoughts you want to make from your end?
Pardon?
Any closing comments you want to make? Any other topics that we haven't hit on that you want to address?
It's, no, I think I've said it all. I'm a pretty happy camper. My president won and, I think we're going to get a benefit of that. And I'm excited about that. I think we're going to see M&A come back. I think we, Home can get back in the M&A business. Stephens brings me stuff from time to time. I like their, I like your team there. They're good people to do business with. We'll probably do some deals with Scouten and his bunch this year. So overall, I'm, I couldn't be, I don't want a lot of changes right now. When you're humming the way we're humming, I call it humming, humming the way we're humming right now. I just want to just keep it, just keep it humming. It gets more difficult as rates come down. We'll have to adjust.
And all those fixed-rate loans will go away. You know, they'll turn to variable. But that's just a battle you fight. That's one of the toughest battles to fight is keeping that customer. Somebody rolls in and cuts 200 basis points. And you hate to take that hit and screw your margin up. Sometimes you have to do that. But anyway, I appreciate Stephens. Appreciate having the opportunity to speak today. And Matt, thank you very much for your support and all of Stephens' support. Donna, any comments?
Great. Thank you very much, Johnny and Donna. Thank you.
Thank you.