Pinnacle Financial Partners (PNFP) 21 Apr 202020 Q1 Earnings call transcript

Good morning everyone and welcome to the Pinnacle Financial Partners First Quarter 2020 Earnings Conference Call. Hosting the call today from Pinnacle Financial Partners is Mr. Terry Turner, Chief Executive Officer; and Mr. Harold Carpenter, Chief Financial Officer.

Please note Pinnacle’s earnings release and this morning’s presentation are available on the Investor Relations page on their website at www.pnfp.com. recorded for be the being on for is website Pinnacle’s next call and available will replay Today’s XX days. all time, listen-only this participants placed been At in mode. have a the be your open The floor questions will following presentation. for [Operator Instructions]

Before we earnings forecasts. not guidance or Pinnacle begin, does provide

this facts comments, may from that or the results, statements. may may constitute to risks, achievements make are or implied statements. expressed forward-looking performance Financial results materially forward-looking cause any statements subject we to of uncertainties, presentation, forward-looking During such which All and differ Pinnacle other actual by

Many the contained to detailed on more of cautioned Pinnacle’s in such and such not factors or are is A statements. description as revise are statements beyond any of Pinnacle new Financials listeners reliance result any forward-looking control XX, these XX-K ability to report and Pinnacle XXXX. undue Form whether put disclaims risks forward-looking information, predict, or events Financials other otherwise. annual presentation obligation a on update this year-ended December to or of future in for contained Financial

to reconciliation measures remarks at the addition, Pinnacle www.pnfp.com. GAAP financial by defined financial as directly A certain and website the Regulation include will G. measures be a In available measures SEC presentation measures comparable GAAP non-GAAP non-GAAP of may the Financial these comparable most of on

President CEO. With that, I’m Terry now going to turn and Mr. Turner, the presentation over Pinnacle’s to

you. Thank

believe adoption by impact the to lot market expect reserve bold of on cover of and pandemic got entry it, you previewed impacted storm, segments and color of cover see which we information lot We’ve whether about. the are on pandemic, and We’ve at our to have an dive today, got been into how of loan makeup I the and information to A got that response a our commentary we the including it a aggressive. update those envision CECL can and we’ve remain look call. BHG on Atlanta excited likely deep which build For the portfolio during you more of that the on a today, our more has the of quarter. ordinarily topics in-depth much COVID-XX the assessment the of into we’ve

we’ll quickly. So, move to try

for begun years of of the number every primarily We’ve to recognize in quarterly impact our the immediate dashboard, on focus the a good honesty are and our their many it most which obviously our quarter financial focused first and execute. this it, that our view to draft of call gives the and we ability pandemic a pandemic. long-term with presentation because led this of responses I newsworthy items with of COVID-XX are impacts

in into beneficial left so, with shareholder revenue ability like The deposits, gathering I underlying cost the we investors attract truth try core long-term value regarding fee those financial is, insides offer low dialogue we’ve to felt to last detail, we’ll over items income, and COVID. while years begin like COVID-XX funds, despite great where our items did of and of pandemic be it will cost off in impacts brief lowering performance the of number cover been to just growing the produce producers and

suspect to that the to and our adopting fund that run long-term mills when pandemic to guess aggressive. more As order you head bold early see will about our position material, posture a I stages rates inconceivable shareholder basis original execute earnings that defensive been run it’s XXXX. a we while more produced of for I be return and over have value, rate both as in best It’s is intent will it been that to XXXX about been hopefully will on earnings actions go through it in the able ultimately in XXXX me our the and XXXX. have in normal a so partial that have that decisions we sales on for to

always I the full non-GAAP GAAP want for these So, managing and measures, with disclosure, quickly start were most honesty revenues to today XX.X% are things move but that we to the measure the quarter Total for up the against. the we for year-over-year. are a part because up

the over think been years, the with revenue that’s consistent volume we’ve adding the model last of I several producer large works.

$X.XX, EPS the to by impacted diluted elevated was fully the Of the the response provision course pandemic. primarily in for COVID quarter

all EPS pre-provision minutes the north We will an and revenue review XX% chart see that basis measure of of our X.X% but to when our our ability earnings in just important thanks can rate and grew on quarter, few head annualized then net really a to you in as ability storm, detail the that’s linked into we to first whether run elevate XXXX. considering secondly a

have would deposits aided core No deposits expectations. loans numbers growth Loan our liquidity emphasis than low last what anticipated six very believe and and have had in primarily growth and case been deposit largest of doubt deposits clients to but the by of turned gathering and late way the building in I would quarter our would they nine over which strong ever, we have it were and attributable our that the been loan we ahead slightly the internal to deposits volume core quarter suggested quarter, the cost that in volume again better is on planned was both the placed meaningfully months.

I charge-off quarter. for general, and little the In a were asset quality in bit was Net up strong, NPA both just thought classified assets jumped flattish.

of followed you for time. has length of that know a us most As

you are that quarters looking chart higher. generally last the charge-offs XX have can at since lumpy, or see Our there XX points been basis the

detail but impacted We later by in which will on going was are review we to that highly partial the in greater that a shortly, charge-off number cover call.

summary XX,XXX the foot quarter. that’s So of the

bill, the primarily response in the impressive performance uncertainty surrounding with reserve think pandemic. great on come I the to fundamentals COVID

color to more quarter we little Harold the of to before it the Let commentary a the provide begin examine pandemic. over impacts on me turn to

the growth increased and of Thank response End Terry of with XXX morning the to attributable growth period most in commercial by about pandemic borrowers. those you, quarter quarter. of for loan the XXX good everybody. believe loans we during solid commercial our with million to million was Loan

As is a result, believe organic in for was the growth given loan in quarter range we which the loan results million growth X% $XXX with believe annualized we the environment. admirable about

where it of annual To big mentioned Terry the incentive as our point, is cash modified over deployment. December us. of deposits, for almost deposits and know incorporated to period we deposit up plan growth a deposit quarter core End was XX%, XX% XX. our many you core as rate deposit Now

we for First quarter thank great as was quarter More when our a deposit modification well. incentives we working is I talk later sit growth, today on so about core expenses.

first our to Impacting loan in and Next spreads the to really second hold quarter Fed the of will LIBOR are is around yields of pricing Funds pleased pricing XX usual with spent spread below basis less up to the to in than LIBOR a so see was first the absolute at first that time loan quarter. LIBOR in Fed loan held Funds. lot beginning March well quarter, we the update hopeful Fed spreads and LIBOR of points quarter Funds, continue

all the of impacted. negatively on month. March substantially was Since our of first LIBOR loans the reprice

how so quarter, loans and on on amount. the and quickly see LIBOR second LIBOR that LIBOR It modest way far second will finished going just quarter into Funds, depends we above absolutely by we’re X.X% moves well Fed during with work quarter. south we LIBOR Fed yield will compression the the March credits its towards LIBOR Now, on how anticipating second at Funds

It We bang-up believe basis June deposit relationship job time we’ve we our cost on managing did this environment. bucket, a the since managers seems about negotiated like long deposit of a XXXX. point achieved since decline it’s betas. XXX in rate our been rate In do talked our

relationship down quarters much and needs for of to occurs, couple about with deposit CD decreases, considered, were in Our things reprising quarter. tune more be in in the rates are decreases which discussions next should our have the the should rate minimum environment a second with as client right overall prepared rates managers and experience all very

Substantially that of all rate those get the and the of a environment we pandemic it longer perform. certainly were a new. zero the important The there. into this we’ve The NIM nothing back to in the speed the our XXXX We rate the chart reflects chart sales all felt in relation but rate winds NIM a our this on tracks target to in Fed top know is goes busy environment head A to quarter. some we so increased headed as environment NIM second operated slide, better to and and zero lot zero really took range. that the put left information Funds before lasts,

GAAP said NIM several where accounting after full low Looking issues that knows the the projecting environment. bet is will impact purchase Who accounting. it and solid will end are quarter first and also Impacting in recognized quarter forward, will we’ve discount the shown quarter. approximately We obviously second top which X.X NIM at is the chart got of million right. accretion purchase in first impacting of for we that the less million the NIM the my deferrals quarter That than payment we performance it up given the rate for year, be a impact had concerning believe XX we NIM.

sheet. for liquidity hedges, as Covering X.X core have well impacts increase hedge the revenues shrinkage the bill. spreads and will we I still in about detailed years. on charts another recent the in that balance will LIBOR bottom last mentioned our as The a LIBOR our from of core an be earlier loan This unwind

value indicates As floor chart the to LIBOR as fall. increases continues in

are currently of pandemic. was continue money We’ve more in we sources to depth this prudent bit fund value fall. it billion client add but franchise, quite to become our X.X liquidity. ample we believe the of we about evaluate sheet quarter the Additionally and as and to got the a should added additional our We’ve of currently balance in liquidity on will more to liquidity in intend take LIBOR second also that also floors the to have

more likely potential in also will in income interest but in the becomes always result net recovery bill to liquidity option this have view. more NIM during as the quarter, some The will XXXX We second the liquidity result compression. reduce in

an around of program. As incredible was Terry in minute, cover PPP is the three impact four in lending PPP or here. more will weeks to our detail significance

resource but happens if pandemic. on sweat, definitely it'll like to Significant associates, Pinnacle tears blow financial supposed the lot happen, some soften it's and dedicated very the allocation of of but it blood,

that We’re the PPP. also identify mainstream now borrowers be might suited is the program developing a well mainstream those strategy currently around for, to but

less slightly were really contributed but fee $XX in more the than which X% more up I’ll a than quarter, healthcare same on approximately anticipated, than to the XXXX, we be Now XX.X second. bankers group brief. million, for income, was BSG of in These million quarter more

Our a year-over-year. other fee approximately residential businesses mortgage way had quarter, with XX% leading strong of the first

correlating rates, residential some had so has market only on line where gone originated. with Mortgage this to in not drops of Again, it with difficult national impact this mortgage also quarter but very mortgage but headed increases number through speculate with long are how at first it's of and term in a issues present, markets the helpful is great business, strategic might us. all great

financial first, of few or big record a through a be consider quarter we much in in we just management they the in plans a in as in one us. the the institutions engine. of brokerage all country our All market get had Wealth highs the quarter growth mortgage believe with current quarter have originators uncertainties. the with various markets and the nice super to We best operate for that health and one trust big maybe

expenses. is last largely compared this briefly So, increased the quarter. on now the Salary to to personnel due up quarter

will slide in second, As we support a to XX% are focus revenue around the hires RA personal critical XXXX. about as we our Terry Atlanta, discuss which franchise, as and well hiring back the produced, throttling we focus, our critical plan on as in indicates, produced

the [XX%] quarter-end, at I the mentioned deposits for first previously is worked in Our of quarter. incentive at kind well as us accrual

attract of year. concluded many our the EPS but now, to see suffice will to XX% hole. quarter rest have say that results the happens right will to for the things We that break component given to way continue what to was We first fair

now results, a expense of a run result should our that will go our be related lending sheet belief mentioned FORTUNE XXXX mid-single into should that as off-balance the I rate digits quarter incurred XXXX’s XXXX. billing digit next first on this with our reserves of slide. than more I run of mid-single quarter over X.X in the Last approximate our related to We’ve adopting costs for increase million slight modification expense less rate our season.

the amount with So, end the quarter, we depth pandemic are part of and of and where of to end of the absolute length of granted absolute play repeat the now the quarter second quarter. are both level critical next second a the length we our expecting commitment determine unfunded other to the at at the

Now, got a CECL earnings the reduce lot far table now all we presentations a our so about several the At topic. of in CECL. here, this what in are is I’ve we’ve seen hopefully say say of that future weary of rendition to this can season. the we we to have as slide top so

quarter. several is at and allowance one been day Our we ended with believe up consistent guidance we have for basis points, the giving which XX

the working our anticipated, in need in charge-off the have pandemic criticized to reasonable than We and $XX credit asset of in large folks due than the have of eventually which into in equity slightly for degree a it part sooner that on C&I quarter will charge-offs receive. was finds itself during partial support the the going with pandemic, more specialized is million confidence

classified group the first impact credit pandemic special in was special address a assets the in criticized assets loans. pandemic their group things going did our One and of the first not This spend week a specialized take rodeo. more is of of specifically comfort every of line great to the team. of and the than back judgment our internal I through our as

how discuss hotels, our segments the also portfolio. of etcetera in Later restaurants, dug Tim other we and will loan

at estate increased charge-offs other basis For X.X XX to the points ended quarter, and real million.

run in provision million other judgment would is but there involved of $XX conditions equal all our indicates rate, the been, table As much obviously in provision all as being have this, range. the

net occurred, we of our the have XX have not on had assume at apples-to-apples the basis work. so range to same losses is have would an the there you been in would Allowance loan Again, been pandemic lot guess charge-offs for point basis think quarter-end.

provision. on we COVID Based feel model as like with related been here. we’ve inputs, Now conservative like

We forward takes taken source party asset and advantage same in metrics. using we We’ve of party inputs of modeling, forecasting into relevant used which allowance a few projection, bankers. do there is consideration wide our variety for by uses observations into a lot a for same the so liability third use metrics. national that level synergy economic the third It’s hopefully some

adverse comparison are four nomenclature not most scenarios ranging being model calls about in waited to the about relations adverse adverse the There conference to thus economic our and various heard from more with that having dissimilar optimistic too quarter previous we’ve optimistic the baseline of wait XX% scenario also other the severely adverse probably to most familiar pessimistic we’ve to banks the and scenarios In in far. a only the X%. scenario with this severe,

pessimist. The between and difference baseline is basically evenly allocated

lot averaging attention of a now up scenario unemployment XX% than from ramping year in with for quarter almost XXXX seems to more of As the all get this with of to X% to XXXX. five economic in fourth returning years and unemployment severe anticipated XX% projections, our

As dropped quarter to current a our in in the XX% GDP, by this XXXX. year GDP rebound of severe third that model GDP with

all assume to U-Shaped of a I this points recovery.

opinion is and supportable reasonable XX around months. Our

bottom the incorporates [indiscernible] view degree another front-end some are return waited and the initial the recovery of by [indiscernible]. to and So, a period incorporates calculations to time our then of

top I routinely steroids. In on that slide. balance results it’s anyone believe the not talks about. sheet Back chart my to the Off opinion, are on something accounting

our booked loss $X anticipated quarter-end higher than funded this be in XX million and are at results loan of unfunded We significantly in amount that at of loan the loss. expense that we’ve the should represents providing history, portfolio what content quarter, million a a eventually

the their loans the are balance reserve quarter in the credit very of XXX million All and are of losses which the around off with the of X.XX%. things to allowance reserve, Most this sheet are $XX for credit, C&I allowance our at for continue contributed short that plus so maturities. lines end

Pinnacle by has [indiscernible] firm standard vendors of been quick this CECL years, money in significantly in our development of a of because hours over XX or XX adopted. note, three to more Just that spent leaders our key more expenses at thousands getting for

want and to work their thank tell As but all an but work extensive them we coming. accounting them I I standard going to to always done, [indiscernible] this is more hanging in probably point. there – for I us I give to there is wish know them get could

in the earnings answer end. [indiscernible] our from second question quarter but this have will obviously throughout we will at There big the in more assumptions is economic thus self will The quarter. of and CFO season we projections respecting play get that the and blooming updated no are far pulse asked take we end will here, provision borrowers at

loan and development such Organic Many and the with to they government CARES the to year. as growth, lot light information are to obviously other anti-virus, government trade impact factors programs have about the on this will of and considered. the restrictions be imposed [indiscernible]. come a as increased Act [indiscernible] travel, is There think also of

than this where is use our of into our at A I times of – uncertainty. a than provision Our XX There's Like our this economic times been two in rate results period best think for run end. projections conservative allowance I more significant were usual investment we've we much into [play] a largely and now more said, year so models is around [indiscernible]. [indiscernible] $XXX right Pinnacle to million here. provision

remain about but the operate, that so whatever today Act we programs about The discussion Recession, associates and CARES X,XXX Post There's and optimistic lot the PPP, green to Pinnacle. make popular. shoots the only where comes up Great the other the model a restarting markets in term work the have next positive of not a has the our business became economy. we with that impact,

As can position in about XXXX. our mentioned, the to effort as Terry has we this into half run taken as much us gain into and to operating management quickly an rate second of get XXXX COVID team behind going the clarity

capital. Now, on comments some

of about quarter issuances the sub-debt First, [holdover] redeem million mergers. we in $XX previous that from did early were

the more the we’re We the of PNFP earlier buyback in program also as clarity acquired to about million pandemic. now getting suspended and We've X our depth shares quarter. until of length

approximately not in that of for previously was summer. us $XXX to bank planned We're likely million by sub-debt regain redemption the

currently the for we our Additionally, maintaining dividend anticipate future. foreseeable

Lastly, we the accretion quarter management our remains this metric. did during experience tangible book value focused as on

basis Capital XX quarter some consistent XX with levels dilution by experience ratios back to a points to points year did basis ago. this more about

basically Our ratios flat were fourth [XXX/XXX] quarter. with the

about participation program [indiscernible] ratios quarters funded the good about capital. feel we is are funds our cash in PPP impact Basically, dividends debt service. company once and Our shouldn't to in quarter. of regulatory carry second sufficient those Holding fully the

and the crisis result of driving Like burn down too listening scenarios. pandemic. our stress to we call, Obviously, rates, every accurate, rates, capital will changes behind stress deliver to testing probably credit rates previous too way we using very will be banker walk conducting strong the as scenarios. conclude charge-off that strongly loss [indiscernible] in is to common algorithm and analysis been investment and feeling statements. our loss early to other and shareholders from we – Great stress force historical that We've incorporated CECL testing a testing, any is to our need but have our Recession It’s this away multiple this that

second it's will in about seconds. are new, other have conference PPP in just with This goes quarter as and significant us, bankers right Terry be will The challenges. weeks calls. all as All few program that not all, impactful significantly discuss few in she what slide steady is bankers, now. a The presented last but well the inconsistent talking as on

prouder of of our couldn’t Pinnacle X,XXX We associates. couldn't proud – be be our

sure support while today to making clients, are all we is that borrowers, credit decisions. our prudent particularly goal Our our making the

the weather thrive here initially in are We they short so clients to able to the capital that our order. need storm they to provide are

it that, to turn With back will over I Terry.

consumed of isolating Okay. the view, associates, and Harold. by QX end pandemic, fundamentals, us inputs In quarter, but of shareholders. the Thanks, our my quarter obviously, our of we in for out our an the with communities protection, operating were was terms our protecting excellent clients, the

am aggressiveness and tell the the response. can't proud I with of how I you leadership our

XX in global on January a case first health see days this can our U.S. pandemic emergency. Health team the XX; on response and actually timeline, you the just Organization As World the we that activated day declared same the after it’s known

like prior We season the spread [inventorying as clients declaring the supplies community first had already In began to] we with associates spring in of about communicating business pandemic. ordering of our restricting travel we U.S. hand to sanitizer the associates the break March, begun health early we before had World personal and the cases Organization headed and safety plans into travel, Health

meetings more events On safer-at-home to March our than suggested before well XX. no the groups to limited and ordered before course, footprint less of limiting CDC of than suggested less number by and limiting which with. subsequent we governors a complied three That XX, XX XX, gatherings and than we days was

in offices office on more to already that relatively I a talk from convert assist of March of in back footprint believe March and XX, we than here a had home. about one all I’ll the loan we our were minutes. drive-through-only-service program rolled impacted borrowers; On associates our greater first out to aggressive working XX, few to we And XX% deferral just

I of commonplace. are don't issues these our and so have these well-protected. now it our since the associates But and believe been and its that appear very we all many all clients bold me well was virtually of to these them things worked front-end impacted associates and does in our each that want by to the team of rattle are decision down actions on and making clients through

confirmed three in cases one in firm-wide, fact, have Memphis. to-date we only two In Nashville,

for no reached out XX borrower them to to program. make our should days deferral protecting general, aggressively with of further we with As XX documentation. ability our a I aware are deferrals needed clients would days deferral say, an our it to structured second In to payment relates clients, the

see on in concentrated left total and balances were of surprisingly, this hotels, you and XX%, restaurants we’re As not deferred the slide, roughly entertainment.

sought other banks use to listen as loan sparingly on of not I it at discuss to have I'm being possible. deferral some as their As that utilization, approach critical all.

fact, our but knowing merit see be our back. has and to opposite. our It's clients I help been depth as much intent it, In they build pull to some clear, won’t been approach the liquidity the not of the as duration possible,

most course, of billion we mentioned the $X.X weeks roughly distribute has other firm And the for consuming Payroll a last been for were Harold and of Program. ago three for most the the words, minute impactful and effort to $X.X the clients able In over received [apps] Protection able XX% we’re requested SBA gain approval funds. ultimately We billion. to in roughly our

of size we it Another firm million, compared which even assets to any asset and $XXX the clients based to banking all many been firm, in about day, of the it. X.X work proud associates me I'm and funding times share. and means think our we that commercial of $XXX literally our while distribution an of it to receive that funding, of this unable in incredibly on look expecting to would've were who to deserve distribute the is whom night killed X at way our assuming of roughly to have Nashville billion And

to and least right and they to been the get the desire guess, ourselves event do need of refund thing you time program every so, regardless effort eligible is And by the dedicate one see required $XXX [lobbying] effort billion might funding Congress our another do to of as to we'll our clients the and the do it. at and they that we've

had than obviously, Just of of words, approved observations XX businesses, those alone – comes $X that we the million. more more the smallest than a were largest from tier, almost greater couple times the SBA. than $XXX,XXX, in from times tier, in other its the smaller lowest less come on SBA’s In number ones highest XX in PPP, loans than

The $XX fee meaningful billion indeed loan all loans those assuming our refund million loans. life short special loss recognized It's roughly we over first the of in associated this program. a SBA’s with we’re part doesn’t the of second that round volume the on on be intent fees to provision translates that $XXX of down to a income quarter. the expecting to were It's payment successful Congress be made allocation,

have as processed we to the in be We many phase. applications yet first processed as

was under down clients. was businesses me demand of Let ran didn't to funding Protection if effort by say those how that a in you’re approved underfunded you across before terms you [the banks in get your apps] SBA. regardless let process of then Program, get feel herculean of that the get course, most few position the one put recall to out. country Payroll And received and of funded consents it able you all significantly of serving might like [indiscernible] Very base were you're they

we XX,XXX took get I applications, mentioned, we as billion, just that under billion of $X.X were But able $X.X to approved. totaling

to funding, we the X. get on think, SBA working one by people to addition in notice. short We to to April night and client our day very prepared to permitted staff beforehand get the help Our position you the were apply associates, on know, had clients had prepare advise I and

all have believe genuine the that to we It's stand our get to queue was unfunded that of recognizing honestly all our get to trying like a Congress that what volume – process front additional the up does had scarce a associative event launch resource. and hard or new be that desire week, our continued should a fighting to didn't matter all It ensure to clients and authorizes for the the to in are to understanding in of are systems banks in [apps] funded too the in frustrated you two to that the would funding. we to position clients know, days of work it those

look and those for who funded, didn’t our praised part, advice our widely our the been Despite and most to in and out local among versus after press. frustration competitors our clients the by get clients stood has work

there are now, like won't some clearly by impacted. obvious will most that there but segments way As by impacted COVID-XX, restaurants, are no be be borrows retail probably and in entertainment that hotels,

ask Officer, segments dive provide of our into those portfolio. Credit So, Tim Huestis, to deeper I’ll a our Chief

Carrie. continuation as assets you, our perspective, past metrics charge for morning, offs. first everyone. XXXX a a From assets, due, quarter Thank such performance non-performing net credit was classified solid and Good of

experience an This Terry to earlier, that basis Absent increase have with spike that by prior been more the later. result directly line charge-offs of net net quarters, our points. basis credit As credit, points did on we mentioned color single little was in would XX impacted in COVID-XX. XX credit a this from was charge-offs

I is conditions first, to and get overarching ultimately V-shaped unemployment is are don't on the slides, with or pandemic help loan when curve, we do a into economic of flattening a the and borrowers rebound things What we What gets depends know our the a certainty curve. It those will are few whether Before comments. following how high on defaults. stabilize. U-shaped minimize focused today we largely can

a is offense the defense. Our strategy is good best

or credit and credit experienced all tenure bankers same our currently times You've experience. hire experienced average Terry only very true XX XX grown always principle senior senior over, clients. years The We as their many We officers of have years their credit is who we've heard has held officers. say we know team. hire

officers and our our We advisors virtually senior with financial one financial Credit every markets. adviser. officers in prospect go have of client our on calls the with credit paired

team Further rounding discipline of analyst credit is our employees. our credit XX

model of times. have serve believe next our experienced line during experience. of will us of talent an partnering unique analysts these credit well average credit largely XX banker years the of right to credit Our We difficult

Here's to what Program, Payment to $X.X Pinnacle COVID-XX XX billion. a reached book we is loans with consumers approximately for deferral. the plus payment address of XX doing C&I challenge. impacted and our estate, clients Deferral proactively most We in provided of loan areas real streamlined deferrals out

side We aggregate believe help and built payment to CRE responses a to survey COVID-XX. deferrals to we extension, collect XX step to requesting questions. client’s a help are bridge commercial clients the For proven and a quickly day other us of targeted our client second tool

the Loans, Second, applications applications billion received of on roughly believe approval difficult approximately to roughly the will help them We just clients totaling better $X.X Terry as totaling Pinnacle billion. just heard additional this Paycheck our dollars Protection X,XXX obtained discuss, Program $X.X time. you and SBA endure north XX,XXX

Third, enhanced impacted severely segments. more on time monitoring to strategies produce data real

research it most In the firm, briefly the of COVID, with to IBIS team impact by understand to IBISWorld. next COVID’s worked several slides, few book. cover an the obviously and but step Pinnacle, risk further segments take we’ll to stratify from industry a our we partnered C&I a impacted in

results of We distancing. product and of quantitative risk The social took categories trend high and in a book combined time low, of qualitative proven risk, metrics level and historical risk, risk, of for industry lowest. IBIS’s C&I medium, stratification into overlay the impact of our highest

are energy We will highest. time this use risk levels stratification target the to where and

our well on relative provides a COIVD have CNI limits their most quick a segments, building continued its the granular loan portfolio. chart house approach our CRE of of discipline has maintained as as conservative right size segments and these well impacted to glance book. regarding balanced that pie by been The sub-segments. for for We've both Pinnacle and

to approach served that capitalized be successfully of our sponsors are as hospitality a well. to to hotel operating us as and well attempt lending an possible long transparent of have industry. Here's regarding loans history hotels the has Pinnacle's

This loan $X an million. one that of that only originated March North years had acquired As we Carolina of of ago. by a SBA XX, had hotel bank loan Bank was non-performing was

on your attention draw page weighted XX%. LTV of include, the average to items to few A

for to largely in payment Hospitality are provide sponsors financed provided them geographic hotel are projects of our Many also footprint. Pinnacle. have XX% deferrals depositors our flexibility. large We very with

The on hotel will XX second slide largest provide loans. detail our our about book hotel

portfolio. details Some XX% the point Hilton, position Marriott, exposure out Inn, of We in noteworthy this our position Holiday Hyatt. our better identity to will us include, is believe and or brand

service, XXXX. will the in XX brands. Only chart, a have our subsided. of maturities dates, resort As XXXX in is no has can loan provision XX% impact our luxury of conservative Hopefully of hospitality or and these see the hotel by LTV Most on COVID exposure largest. book these limited you

to estate who of restaurant details our developers restaurants, operators. provides to real slide next directly as lease book. It commercial exposure restaurant groups This together loans as the well

The operate well-known less our who include, segment is to X% book. two of than points this restaurants. are Some companies exposures noteworthy Top loan public

of XX% two our of well-known of represent repaid relationships is on listing seven XX% These our restaurant retail book loans being operators. The approximately to restaurant brands. right from the far total revenues illustrates

book our is April As XX, payment XX% executed of deferrals. of

stores, well of real will loan represent to lease groups exposure This together provide slide book. of our retail developers Together, operate retail that who estate retail book. to clients as business. details as commercial It XX% loan a our they

include details no mall Some noteworthy exposure.

than loans, these For term XX CRE grocery the only Of greater anchored are are centers. XX million. XX, $XX our

XX% are XXX Dollar X-Eleven our are open. book million XX% granular Bojangles’, General, a – loans very averaging averaging Tractor $X just Supply, tenants just It's single with tenant like tenant over of million. and these single to X.X

million. construction CRE $XX are six, are greater loans suit. loans construction grocery these of two built income. our only loans, our Of For to six XX% than

will slide into loan some our entertainment This and details provide book. music

our one an thousands that have the publishing XX%. from diversified song We the well-seasoned, contact industry, finance stable of industry. to catalog advisor under are of experienced the music throughout earnings of that acquisition Average specializes are LTV music Most with strong is lending loans in Each a up is to publishing songs very in of the catalogs. space financial standpoint. made

close usage. and may concert music, It million loan promoter. stream loan All a continue fewer commercials streaming. will restaurants permit of lesser had revenue in and limited covenants catalog amount the primarily $X TV that film, catalogues and impact a sync a degree, from is to sync radio a is from monitoring. playing one revenues with used COIVD have from in general Only line their licensing. was To Revenue anticipated. but songs songs appropriate bars very pressure loans only generated to People generated terrestrial revenue. Notably, modest Pinnacle to

in early on discussed our reasons, borrowing to first of team we As cash just special relationship the client. charge-off call, the we music quarter liquidity XXXX. had talent Significant transferred do company curing quarter, late during and the in was hit not anticipate team completely XXXX, loss We assets further COVID thus on equity was liquidity issue. had this the one fourth into Due injected The agency one to partial stopped. credit. this any Then XXXX. revenues

to let Harold similar me Now, storm. and our the to over BHG for it provide weather about how turn belief they will some analysis

BHG, several on here move got I've Tim. quickly. pretty to Thanks, I want but charts

on this So, slide, left shown on in top occasions. several the we've chart

of opinion has of Our no at to there loosening, tightening continue of standards scorecards quality quality of from volume increase and steadily of early years that, base. has refine improved that all is been exceptional. growth They the BHG, actual the The but credit borrowers BHG’s been the through and firm. has their borrowing

there’s at process As up borrowers. ramped sophistication quality the have aim credit you of to as they know, segments that continue high

the Perhaps steadily be related to have right I improving chart powerful may the credit quality. bottom chart offer most to BHG’s

is lower earlier at origination, years a ago. just of borrowing pandemic pointing a you of than likely since thus lives base, over our the few months in base. quality vintage, the borrowing life losses opinion, base by level related out loss borrowing the losses Recent these to look deaths the in As the from cause higher but point a continue towards to much will percentage upward,

as mid-to-high The for last for They've acquired line annual in with to losses loss currently, line of Xs their sold the $X.X basically bar they've community loans credit with been details years, keeping on these loans. orange recourse about recourse the annual the the their losses. rate shows the outstanding while banks billion few green network other in they who with accrual more percentage of and the Now blue The loans their that constant reserve charge-offs on banks. historical bills. chart a shows got reserve substitution banks. that These are over

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trading That and said, they during auction the as more reserved business revenue accordingly. and the uncertainty. significantly to of sell balance revenue, their their quarter. elected provided enter all doing sheet increased Their reserves to for By loans generating first we flows quarter, into have back more on recourse these the generating strengthen to first substitutions the BHG pull during enough period ability are platform, them thus this, this increase this

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it that faster represents of some detail, is At of BHG some the the the XX% of to non-medical Agreed, loan opinion, but medical our details has frequency going chart just book for granular the outstanding. growing franchise approximatelyXX% a the important prevented. accounting important. – We're maybe through than point really I total outstandings. Dentists fairly to are data, and but to that bottom to this go their absolutely in might notions portfolio eliminate is help well-diversified feel and in it's not book

running April so of has to get impact cooperation the a deferrals pandemic. total it the purchasing about That XX%; only book. of working help X, with XX% the the of As the somewhat. represented require number banks, borrowers These so about at of currently borrowers the total been slowed not is the but through BHG deferrals banks

XX% group to after comment deferral at expected Bankers’ Quick with stop as leads friends rate a talking Healthcare the our for base. dentists Group, about

to talks are and Halim Bill rescheduling dentists non-emergency these emergency have they only As the learned dentists, procedures that BHG summer. into

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more with wrapped The up the the represent bars funded, loans originations enhanced more have chart and result and analytics marketing which being slide this sophisticated platforms. shown left of We've before. is on green

us auction tailwind are hit as strong great for quarter platform, was the pushing a but business second we help the of flows the the head first With originations, should also and quarter. into more to quarter

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quarter very model. auction the BHG. unique platform Spreads they is banks probably the the some sale liquid. is more a best on and For during the alive of of network. most me, funding the thousand component BHG’s and than well first in Currently, gain valuable have in the Their platform history of their were

liquidity As that to their price. competitive and you of time platform ready acquire sure at a on great a is this loans making management has know, spends deal ample BHG’s

is in engine friends a Healthcare watching so excited for are remains platform amount up much it is quality strong business with Healthcare needing their going underwriting. BHG this there forward into traditional BHG to their as marketing investment during step by borrowers back there Group. our segments has quarter and the have has up at out about our Their at been going higher XXXX. estimates auction As looks Bankers’ all Their aimed Group, stands they for time. Pinnacle modest for spreads borrowers their liquid pulled is and flows Bankers’ experience currently, positive the Who are end knows a where that second Lastly, this uncertainty? product. right to significant

it to Terry to turn over With back that, wrap up. I'll

Harold expense associated along more with Thanks, efforts bill our a in of exception the stance. we Harold. in adopted Quickly, as foreseeable concert, with Atlanta. mirrored generally the the future, slow defensive substantially for earlier, We're recruitment

our our opportunity a associate in perfect. extent, that stress that We a of the impacts once ahead. COIVD efforts timing may continue success early believe to Atlanta we opportunity should is recruiting brings is to client social Indirect and generation some distancing confidence like at slower but that the

Atlanta. Hairs and data And across much It both annual here’s $XXX each. from why covered performance with $XXX represent in is greatest national Atlanta market. from we The to see main Cross the This the opportunity revenues million so markets. in businesses million each

It And so, seems get corner and to the to institution any the be above to average line. right goal the of horizontal to performers are as the Northeast above as quickly vertical line me for as would the possible.

As in you that. is done we’ve can Nashville just see, what

relatively client capitalized at that right had at share poor time. have Those Clearly right in on we the satisfaction among the banks We largest were place the in vulnerability. the Nashville, clients the in the market. most had greatest

two on looking chart Now right, Atlanta, to observations. at make want I the this

notice among Cross from of suffer importantly, the are in quality, is other below more therefore, Atlanta really these who in And all the their of Nashville. satisfaction. you’ll business Atlanta Atlanta In an vulnerable. clients generally than strong that clients banks less all, percentage satisfaction suggest of Atlanta, of client terms vast the of is in average the extremely unusual average less in Hairs with and First is the possess opportunity. majority banks all It service competitive that words, in would

last well has going to over weeks nothing the and you is this time, again extremely team. complete weeks changed. XX our here, initial we've review I'm the picture reminder, a to really And covered last aspirations As painted XX there. as since our hired busy not can pretty slide see this been of we

that earlier, response mentioned do slow point, just recruiting like extremely down I business at but a this the As our encouraged expect timeline there. to social we're bankers bit, we're may by little things talking of

this in in revenue rate over grow been to growth, again had elevate our unwieldy weathered faster general, stages earlier base, banks. environment larger, said, pace, intent producers to it's who a effort offense vision consists position our from our to So, ability unusual slow earnings share and That believe of storm in to the in investment the their years, result from plan us from XXXX until defense to put in move in the forward once an summarize consolidating and two figures. our moving our a pandemic albeit last to to are run slower than hopefully at ongoing of still client I should aggressive take the and

the a We'll remain and in of shareholder value manage more the pandemic produce depth things continue posture and will long-term we defensive until impacts. that see its to more duration those clearly and

sub-debt continue at although don't retain. cut we'll Specifically, we preservation in previously suspending buyback in intended our we've tend allowance increased had capital elevated we're retaining meaningfully, and to time, mode, We’ve to liquidity to a and share still loss our do loan so our we and QX. this dividends

goes For the revenue and an Recession, the hiring an pre-provision effort our Great and avoid to our to we're that since first the posture. in as bill slow of aspect important to with time in recruitment it defensive maximize net expense us enable

questions. Operator, we’ll stop there and take

from The is now for question Please Mr. Jennifer open go Instructions] SunTrust. questions. floor your Thank comes you, ahead. Turner. our first Demba [Operator with And

morning. Good Thank you.

Good Jennifer. morning,

higher requested all have on deferrals talk Difficulty]? as Difficulty] Difficulty] of those, several You [Technical you your borrowers as mentioned restaurant can to-date, well BHG. [Technical about detail XX% [Technical

Jennifer, this is Tim Huestis.

segments payment question have been? other on we what you are XX% breaking restaurants, from deferral out. the was deferrals the question the rates Was had Your of asking

Yes, exactly.

categories, different I different have segments include Okay. deferral at for Well, the rates but I We fingertips don't segments. deferral for don't these rates. all the with have my did key the

an those you deferral deferral in that XX% there, are rate highly the given segments. you've if rate in opposed as segments elevated impacted concentrated deferral overall can Jennifer, rates very see got to those

what talk is I Tennessee has Okay. expectation terms [Technical Governor about of already Can your know the footprint? Difficulty]? reopening just you your throughout in

Thank Yes, great that's question. you. a

the how Governor McKay] the well economy taskforce as encouraged Tennessee's like you operating Carolina, the our active State firm. principle here, Tennessee, Georgia, is State to offensive South as an the areas city we're figure Nashville. of looks think my and Chairman out It the posture. [Rob I and of of of partner of State reopen is know, by to in on and are, the the those for

to looks me as to you're aggressive an get And so, it Carolina. excuse South that me, restart, and going said, Georgia Florida, I and Tennessee,

that anticipate when you think stepping in reopening that President's on work the ought and back so mean you it’s got that to In we’ll he decline that the other the words, think phased think, what not us? then watching – and escalating does dissimilar sort of I a and in from based I cases to progress guidelines. to there.

the you I think will see in thing State. same the

in that some places, County, Shelby I Sullivan the Davidson Tri-Cities. be is more County, markets County, Hamilton rapid know in in will County, State urban County case, which the slower of like in opening up opening Knox and the Tennessee

expect Pinnacle the would then reopening. again, be that will of of thing. we do and We So phase a sort same function

As our we kept offices you know, branch offices branch – all drive-through fundamentally our with service. open

to – basis. shields use the and that but towers full huge to it variety begun and the we'll supply building in actually things a We're you're stores. a service not there's we've for shields, kits already not degradation, the So included stagger building a seeing service kits. There on we'll in protective of grocery reopen of what some are re-opening are dissimilar

very you thank Okay, much.

Alright.

Alright.

Fargo Our comes next with Securities. go question ahead, Shaw from Wells Jared Please Jared.

guess expectation the for have to that any everybody. for is maybe Hi, you seen detail. scenarios? you the tell know, Really so Or on question provision, the April, appreciate we out there all good deck. changing Thanks [indiscernible]? the in great what in your weightings [indiscernible] slide is I of broke far morning, for different too early

this Harold. is Jared, Yes,

order changing of economic You the know I the quarter. then just be more weightings before new be getting now. in don't probably the right some think we'll likely get short projections we’ll We'll end and

like, So, planning see we'll those weightings. right know, but, those what to you look we're not sits on now, just have as changing it

incentive doing there some fully Okay. see type impact fully Difficulty] comp? the Is we through provision? comps And provisions? higher does Or [Technical incentive provision that flowing as is the

today, connection ask Yes, Is but our I around and think question correlates your incentives. sure provision a trying a how to got were correct? it all bad you with having question, that I'm I not we're

correct, That’s yes.

is currently, have incentive of the way would program any don't Yes, for provision we work Alright. exception kind the expense.

that up our incentive know included with end – respect to So in however, you ultimately would plan. we be the

and we expectations it’s on that And XX, Difficulty] been that provision? the we based through? to already similar Is on our forward Okay. obligation at of think look Slide then, BHG, recourse [Technical should on when that's looking a or

exist think for in Excuse Yes, risks accrual substitution is so. I that's community recourse sold banks. that may bigger been me, the to eventual the portfolio

kind And so, is of to that rate whatever loss future and forward may be XX. it is it looking attempt as an of cover March

do Okay. does or And that those besides deferral? just based additional deferral? be Do then, BHG in qualify [indiscernible] loans need there are to deterioration accrual

Now, is subject BHG not to CECL.

that thought bank a with sheet. of loans a So, be you BHG’s – are kind lot included, on as community those loans process would a know, balance similar the

substitution way way of the sheet. just they at is in at There's loans sheet. lieu off your that's question balance Jared? the the are that I for for risk on look risk loans credit the sheet it merely BHG on So, answer looks loans the Did balance balance and

Jared I think…

but… Absolutely,

this Jared, is Terry.

asset, therefore, deferral put are the back on question, the and subject is treated bank’s be and that to all in buying at understand I past if the differently and loans been loans that would sheets, therefore, the of to it other for kinds meaning relates TDRs. those any like have balance substation as And the think I it things. will those looked substitution,

was you. was exactly for. Thanks. what That I Alright. Thank looking

Stephen ahead, Stephen. our And Sandler. with Please Scouten Piper question Okay. go next comes from

guys, good morning. Hi,

morning. Good

Good morning.

[Indiscernible]

Yes, not I'm is. it sure. Yes,

Okay.

Everybody's questions breaking are up.

so. and So, between you it's not us, you, it's something

keep to how it [indiscernible]? additional much you then. time talk I'll Okay, an Can about try shorter

Yes.

number that the as left Harold… is think to $X but I range as somewhere billion draw, far what's in

land a was relates to the than up at it would at it land and it today, as lower think, quarter-end. utilization, be And level goes I But utilization down.

million the $XXX Yes. like April, $XXX. back has to In – come it’s

asking, Is Stephen. that what you're

you. Thank is. That

Yes.

gave recourse would a the Moving BHG, that you reserve, back balance know level what is I the have do sheet? to or be you of reserve, equity on

is X%. Yes, about, think, that reserve I

And guess lower would Okay. than why much I the be so that [indiscernible]?

about X%. It’s

the than less the… be it for would reserve While

Replacement?

the Is of bank that loans? question? a [Indiscernible] community

Yes.

Yes.

I doing they're all, think there's off-balance at first book. of they're losses – in looking it the what prepayment is sheet

they the balance haven't prepayment that. any reimburse prepays, for a the gain. And with if loan sheet, So, loans on they recognized bank

So that X.X%. runs about a

Okay.

how… that’s So,

your basis can assumptions about points bit loss little in C&I, but the I is thing last me, talk peers for to that, [Technical the gave given up might cycle, up you potentially, percentage exposure just detail reserve where lot was a bit extent the justified, reserve explain in kind you you kind believe to the C&I, And think than know Okay. how the of with fall a presentation, of that XXX a maybe just on lost Difficulty] I you or it basis? are frame the to flat could that little of lower in what a frame expectations

several been Alright. disclosures reserves. Well, the I've looking at of regarding CECL and allocation

the the be but XX%. CRE many that to our allocation C&I, what disclosures reasonable. way allocated the peers, may large, yet our right seeing think getting now, as sits X.X I'm and seems the on and you books card it and I the for books C&I be not X% by credit mentioned to models think closer for work, are I

Okay. the color. for Thanks it. I appreciate

you. Thank

Our next question with Please go is from line the Stafford Tyler. Tyler of Stephens. ahead,

hear Hi, me, you good morning, okay? Can guys.

can you. hear we Yes,

Yes, we clear can Tyler. as hear you you and loud

thanks on all details for deck I've I night. slide first, guess, couple I more in the got if Perfect. last BHG, And can. a the

banks remaining I record levels. and around I much But I comment I earlier still was and first extremely any paper seen quarter, the quarter and you downstream the into strong thousand the in quarter in think those the or in so recently? the helpful BHG on being, so later think, appreciated. even spreads willingness second the BHG demand more of have there buy to around far that guess, decline appreciate

BHG, Tyler, we an strong Their the this Al and e-mail paper Crawford, demand. will still as be been. in is got is strong I believe think, ever of as CEO from April morning he it's

quarter like the will in BHG And one far so thus the hold. it second looks of

I regarding and venture joint risk question allowance on allowance reserve they Steve recourse between the follow the up – share bank. could the if obligations. includes back I can If credit The with loans, also Scouten’s where the

old sheet balance reserves. the And so dilute does that

I your responses, kind did Tyler? So anyway, of of mixed I I know you question, to a up with there get but couple

Yes.

to BHG guess banks and I just default rates I so. the those the this accelerate, out think banks? conversely, willingness to from BHG’s demand I happens trying mean, are banks how begin I'm dynamic year. losses? understand I guess, And to with purchasing with what purchasing whole the to going those if play do make to

Yes.

they've getting – that – and told us those I what their They're tweaked and modify what little think scoring of a into kind higher scores They is disciplines. models aimed continually new do currently models. they’ve at FICO they're not they'll is, any they'll bit.

they introduce won’t the disciplines record been to their to new have always substitute. to banks So, and has track

through think I BHG the feel So, approval that's don't process they banks. really much that getting the difficulty into that a they'll downstream loan gone have

higher have more BHG find this might a flows. of that is those borrowers satisfy little business do to year to what going think them for challenge a be is to their caliber I

far, thus seems just fine. to that so be And working

a you comment give Hey, let Tyler, this. on me

a think might is my going But what asset questions so that say be, acceptable to are back I'm that play your to trying you of this works, belief generating banks that I they're is produce at know, high-quality a notable how might lot that answers model to volume. are country it's what any mean, As your the you out. high-quality don't go in nor is I not I markets – if way that asset be this know, doing and serve

paper, they loss XX is those will markets. highly asset it's belief and because having credits their banks lot smaller to of $X my a the so these by taken ever bank has buy those community years experience, smaller And have. And gone smaller They're alternatives that regarded is know, on as best banks no continue through you here, credits.

will and I is but answer to don't I the network hold what's that very So, know see bet bank happen, my up here came going well. and

appreciate And and continue just – I accelerate figure enter if banks a out up does paper, potentially stop these guess, the out trying of make how does dry to environment on to that not to significantly that losses losses clear liquidity again, to the less I Terry. we And take know BHG that whole it's we're No, you all historically paper paper, as in keep that, do what out. may have I loud more Yes. buying aspect and high-quality recessionary is, dramatically, those play that profitability to so? of and and hear as that banks they you going all answer but or

figure just what we're that's think trying to I out.

comment that underlying, that higher just for trending gain how given less ultimately about I earnings net guess, for then, April me the year? on assumption terms or Is Is lastly far, growth is it So net drag it that this said maybe what's What's put on in growth? BHG’s Harold’s so sale driving back margins? of earnings risk lower losses?

Yes.

recourse do back but all builds, is maybe what be on as pull might I it as think trying business to primarily, think, I additional well maybe get flows. some that, they're prepared for

I reduced end think up think they loans they on the their for guidance where us year. to their will

think still weather think this bit that, of of a but all pretty storm they'll little be I I – it's well. they'll So,

The for expense Okay. relative single-digit It's expenses, expense so to about talked growth And mid million low a XQ release just to slide relative a deck to just single then about earnings XXXX. clarification question. The lastly, low talks to digit on XXXX growth mid $XX difference. me annualized. about

what us? be baseline that of we should thinking XXXX of baseline $XXX So, XQ the expenses if is about grow million which to on is I'm annualized, just curious top it

It’s XQ XXXX.

the all appreciate I guys. again, Thanks color. Alright. Okay.

Thanks, Tyler.

And you. from KBW. go Mealor Please [Operator Catherine our Instructions] with Thank is question next ahead.

me? you Can morning. Good Thanks. hear

can. we Yes,

Thank can. you. we Yes,

most that that program, the the second Thanks. the do on most us grant. expect a it Question geography, will in trail to think off fees? PPP quarter, the you the assuming in of loan? that And come Alright. in you great assuming then help you versus margin quarter life it or of also, model how million I'm how the see we'll second to the on you are about At $XX fees? active see how to come one in about of of – into Can how much turns in thinking over work.

of knew But great is it. in being, the in that. XX% over all the call year-and-a-half it, Yes, the the of I about into I quarter late and remaining recognition it, forgivable XX% to quarter, a third after then revenue to wish fees question. some the call next, to some the early second and late that's the come XX% modeling and loans answers what the we're of

of can't get we've a other, it. on consensus we really kind Now, stab And way of people the collection taken of – modeling first we but that or strong a one asked a where they're that's how about revenue. lot we've

As far as…

your…. so And

ahead. Go

ahead, ahead. go Go

what As we're a far right margin, fee the that. as may It be but thing. leaning see or fees to margin think accountants I say wait recognition, now towards we'll about a

I sure positive, think, be I'm right Catherine. now totally really not to

anything the and guidance from then? include your not PPP fee your But – does program Okay. so margin

That's right.

Okay, perfect. your now You retail much to just way as categories portfolios is I a gave pull? the you restaurant? And about of incremental quarter on book reserve higher-risk XX% the the then how – reserve we from provision bills of guess out? of there in your came work that came any bill, to it’s think think saw we just much from CRE how about your hotel that’s Can this is simple of about number or

ran think against, the way against we the modeling – call – Yes. the when know is we the models, was I it it, don't categories. works four

that. to don't like codes so it various have NIAT And within we the allocated models the

Alright.

of last helpful. you for the Thank disclosure night. Okay. Super all

Thank you.

you. Thank

Steven question next Our Please JPMorgan. with from ahead. Alexopoulos go comes

the is [Technical banks these Difficulty]. community good payment morning. on BHG going Anthony Difficulty] purchase deferrals to [Technical Difficulty] Steve. for guys, [Technical of willingness This small Hi, Elian on

I was don’t more go like… It – through can you one back that time?

BHG [indiscernible] as banks as a corresponding – It activity. from was for deferral demand know diminished to one the great a result BHG of

Yes.

platform. banks the loan auction still are auction able flex that these respect still all they they're of to every community No, send to to high demand the with

so a bid there's of lot for the website traffic And on it.

So, appetite any credit. the they don’t that diminishment for they’re believe in seeing

the was reserve of called each for you the which then Got you the the that loans against by pandemic. four Do most out? that XX% called impacted it. high-risk have out, on loans segments And you

built around degree We are call Yes. specificity. categories. don't that models of report have CECL The

on various And broken tried the morning individual don't deck aggregate exposure it into we so this NIACS. we to what through slide And have down do products. the was

C&I a CRE individual exposure, all considered exposure, we've those So, within got slides.

exposure So, to the we or assigned can't those. really loss allocate differentiate

finally deferrals, sort Okay. And have so top for some XX then of me, like borrowers eight looks it deferral. on in your hotels requested of

Thanks. you is likelihood You hearing deferral to these about What of about the the the are book period deferrals XX% deferrals. talking once payment them borrowers of mentioned under restaurant ends? when from

understand could I How that.

think we're what make with to question to all borrowers deferrals from about had having, do our their ultimate hearing that I the we the ability payment.

[Indiscernible].

it's Huestis. This I'd is still that say early. Tim

to don't might feedback not with are to determine, But purpose when make that make of payments. moment, clients think up want for have may with deferrals I fair May, earnest of be we a our will XX-day of deferral XX-day conversations a much from of approaching pick able will them this how simply versus the early the wounded. with be start as they asking trying information the in clients those of amount any another portfolio really as it from that on in deferrals about they the clients payment

you. Thank Great.

you. Thank

operator? Operator, Are more are any questions? Hello, there more questions? there any

one is is No the pressing. one on I queue. no guess,

now, we're We've not Alright. time right a apologies. as but being the Well, uncertain had where difficult line let any and hearing, a me offer to are we my we're on little to able hearing questions.

you in that, responses bold would really our loan we for been view a joining so, we've allowance the fundamentals well including had quarter, we on our operating COVID bill. Again, And aggressive think loss I and to is us. thank solid just our and pandemic,

So, appreciate you thank here. you much. I being very

for you technical in and We the participating for difficulties. conference. gentlemen, Ladies today’s thank apologize

disconnect. now may You