County Bancorp (ICBK) 22 Jan 212020 Q4 Earnings call transcript

Good morning and welcome to the County Bancorp, Inc. Quarterly Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would like now to turn the conference over to Tim Schneider, President of County Bancorp. ahead. go Please

everyone. fourth Welcome joining today us Thank and Thanks end-year our quarter XXXX for you. for earnings call.

we on our As of overview. the reminder, have on XXXX disclaimer a the quarter forward-looking four statements I'll slide presentation. of two start with our use

loans. $X.X this $X.X included slide to million per million to COVID-XX four, million loans. $XX.X share. fees. Those of asset lastly, related to five, XXX,XXX SBA two, quarter. to loan $XX.X financials which credit of decreasing payment or number fees million, one, were shares during our resulted a has forgiveness And the XX.XX%. net increased Point to reserves in trends to $X.X in several Point number to $X.XX the Moving $X.X by our ag which classified from driven positive loans total loans. on income origination of net primarily adversely we've increase number or Number three, to of origination interest deferral There PPP declined loan common our three. loss quarter, of income X% million Number of of servicing diluted than PPP tied release shares provision rights less repurchased million ratio

Now year review. in a moving XXXX to

Moving to slide four.

increased three, Number shares. deposits We And point have client million. sold loan one, XXX,XXX and deposit we highlight. million, I had Number decreased repurchased common serviced and to two, national several positive $XX.X $XXX like achievements that during while the number would to increased million. brokered year $XX.X

us. how and I I XXXX have a to in what want what challenging all am down of While to XXXX income was team of due for to year net the very was accomplished they our pandemic, proud reemphasize compared

for in and that of the customers our our terms as local flexible allow First, implementation of solutions This PPP initial together we the from shock to time in spring. as multiple recover support the ways. deferred rallied the community lockdown that program, needed supported included well of

payment to grow changing looking saw transformation. Retail deferral XXXX. XXXX those rapidly of dropping also and navigated our in can value serviced lose and loan funding side is update to and turn strategic allow and to the This through of second to less the in Matt positive more our of bolster like Chief a Deposit I'd an the success a community half commitment in XXXX. and operating Lemke, funding balance we and we're and and it on in overall we a transformation to our Vice creation, of of see our client's flows sight business continued in sheet XXXX, priorities. President improvement sold challenges continued environment of our believe now Executive marketplace included momentum total our also efforts to didn't by supported our focus Milk vast loans for Matt? The the return loans our that be This the in growth forward we year-end. Officer and and And to fact to continue through As will us improvement cash than credit XXXX, metrics. seen evident customers of built X% by should prices we over

Thanks Tim.

to a transformation. highlight Moving to our it points slide five. few I'm relates funding key as going to

In high wholesale $XX.X since funding year $XXX previous decreased quarter the fourth our of million. wholesale fiscal primary out and by the long-term XXXX, calls rate balance decreasing deposits mentioned to and focusing to to side decrease by we funding for total our enhance cost bringing value. As funds million, on on decrease generating change XXXX, franchise Instead client CDs. our of non-maturity set right sheet we

quarter, since our XX, million. million XXXX, total for client decreased the we deposits by December fourth And $XX.X $XX.X the increased in $XX.X our year CD Additionally, to by portfolio bringing consumer million. we increase the

variety since transaction accounts number increased XXXX, In XX.X%, accounts The deposit end achieve graph we we initiatives. of heavily Commercial balances. of fourth progress the these slide terms on ag on XXXX illustrates results, increased have transaction account and our increased accounts in XX.X%. the the trajectory increased accounts by we to when transaction To quarter accounts engaged more of since transaction consumer sourcing client executed by of of XX.X%. became the by a XX.X%, strategic

and during year. people, the the to of effort imbalances The XXX time accounts throughout focus people applicants loan to process, PPP on full infrastructure, PPP to Specifically, grow on main continue and as our three convert XX% relationships. spent depository usage the non-customer The we to we able these continued in services. evident areas, was were

continue tools income. to to also adding internal like creating well non-interest and customer's work on as treasury were increased to generate necessary the digital able will processes. our We meet both robust deposits management talent, hiring We as building grow needs a infrastructure,

the move to efficiency. and business client new deposits. gather staff March retain was of We were to have been using maximize to current in as servicing mortgage This we and these relationships Next, mortgage returned released selling XXXX. origination originators a loans strategic

prospects. to the moving turn lend providing to a in meaningful direct an update to base us accounts and led and conversations frontline of funding teams having more now reflection XXXX base increase Credit Chief build we for quality that John? transaction Officer, tactics to deposits credit. will referenced our improve to interactions These more And John us I'd Fillingim, to be decisions continue accounts to and over customers like a for forward. with is produced in it continue help stable drive the to on of results the and These foundation on. transaction Lastly, earlier our us will

Good Matt. Thanks everyone. morning,

provide metrics. like COVID Moving to slide six, to I'd our update to relief an payment

of on the February. by January, as customers three end by off payment remaining relief will remaining, remained of customers payment XX/XX/XX. come modification XX XX of million. those side, The totaling the ag of the come end Of On off will $X.X XX

of benefited sheets portfolio government Overall, ag of a amount a to of by environment. our a proud helped rebuild many significant customers ag our customers' difficult to we're portfolio which standpoint. and from liquidity from work encouraged the economic Our and bankers through macro working our balance service capital our done assistance, have

XXX payment requested On the seven some limited dark requested project are XX/XX/XX, hotels negatively commercial one near COVID-XX. the and who customer property form side, commercial our and the impacted payment an a the that relief. of two of only restaurant those, completion of were a an Of other have the four, XX COVID. middle has additional with from customers flag hotel by since was relief restaurant, that is remain customers change service we by connection of COVID Of pandemic. was Overall, At payment initially in XX one beginning not impact seen of in a than days four interest-only that's the is provided to we've affected it very direct relief. on interest-only, and bar on gone days little SBA and

highlight Moving key seven, of metrics. some to to we our slide want credit

hotel moving by million three watch ratio classified decreased by primarily decreased loans three mentioned, our million, remaining credits into increased loans category. watch Tim result our and Total adverse to hotel as $X.X at $X -- As the of substandard XX/XX/XX. XX.XX% a

million decreased by the as Our of quarter. OREO result of that levels property a occurred sales $X.X several during

these concern We monitoring accounts. to watch on and continue credits the on proper high ensure a quarterly follow-up substandard a monitor and basis to

commercial very We're eight. slide on our relatively what pleased impact to Moving limited the -- with of book business. relatively from COVID a

monitor risk on We industries as to continue of consider we eight. the high slide the detailed bottom

discussed the are first property satisfactory where to change risk see, was we the ratings. One We and two a by contract you'll commercial previously, close of during portion the that have values end the As in is charged specific supported loans the was had quarter. these that of quarter. the where the anticipated flag in loans a off in to purchase process reserves loan of the by a borrowers place, categories hotel

borrower we're start-up an the of their allow will them projections the which restructuring sorry a note over AB into was -- debt their -- other not have where been in operate. to The obtained structure, last process commercial And years. have not revenue where two

review necessary additions a no collateral and values the reserves. conducted to of we the all Additionally, of found quarter the impaired during specific loans

Our pandemic. were rates by three loans occupancy as moved remaining hotel to watch their the impacted have negatively bucket been the

our Moving with quality dairy portfolio. we're very the of nine. to slide Overall, pleased

provided prices stress initial the XXXX. in annual XXXX We process support by test upgrades. will shock we May. the where several after April expect operating COVID dairy rebounded begin and we XXXX are programs And further and was several nicely for year, government XXXX finalizing review the in of Milk the

that breakeven by with addition encouraged their and lenders our to dairy customers customer ensure We're the new of our diversifying our continue analysis line. growers. made ag We by large impact base several on focus metrics the have potato costs have in to production

At our also You our that the dairy we is and Dave? it guarantees. to update like on give over Officer, Banking supported overall ag are of exposure ag the of total highlight relationships and turn dairy time, majority our ag Dave our I'd environment. to Chief to that can this of the FSA see should to industry, XX% by an relationships XX% Coggins,

Thanks John.

above XXXX making for the a seen shock the three III for of Class to quarter that it dairy four observed early and in for and XX. in year, slide $XX.XX XX.XX, solid XXXX. XXXX producers is Class the to in bringing prices months Moving Despite our averaged $XX.XX. milk $XX.XX price III the COVID the quarter

October/November, for The benefits our in solid program prices customers, almost price have dairy their XXXX XXXX. have tillage. Most this there price strengthens PPP solid resulted seen and negative ag Food was soybean also experienced recent level. best This While producers our trend with which row the mailbox $XX fall Corn Assistance per in milk mailbox prices, solid futures expectation have crop for harvest footprint. III along conditions a below our combined of producer estimated prices some prices quality since they coronavirus XXXX prices reinforces experience farmers. yields the customers with breakeven which a and that flow in was of and was feed Class and producers currently most for year liquidity good position. will most year hundred some strong remain upward Strong our our for for a weight. for cropping well differential of still XXXX Program most average the dairy cash be dairy the and

and dairy elevated buy to fuel need at been and more corn which headwind feed feed opportunities mitigate some risk pressure have commodity costs, marketing for for that on That breakeven producers prices prices, our feed. a is However, price there who help customers. favorable for putting future prices ingredient soybean is for especially milk said,

On is the export growth front, program -- economic the to for starts the the outlook for outlook strong trading for impact most partners. very economic COVID-XX strong is vaccination as global

is expected in due XXXX. our activity Asia's demand strong XXXX in with consumption needs be that combined a a will Dairy demand indicated expected USDA non-fat and growth global be powder products. forecast major grow dairy Cheese is strong, which expectations In for will is the a rise goes supply milk U.S. X.X% now, update Glen demand with to on our weaker to categories positive consumption consumption all to for I cheese. year-over-year. dollar to Asian XXXX grow by dry turn driver where rate of global outlook dairy Stiteley export sets would expected dairy to it dairy financial milk All in of into to than a and Wisconsin performance. noteworthy. seen be like which to slightly will for its is XX% better over X%, which XXXX, for an Glen? And U.S. rise cheese for up is X%.

Thanks, Dave.

XX. to slide Turning

and strong improvement see to and whole sold funding continued continue loans our wholesale in We -- serviced growth overall levels. in

portfolio. the Additionally, the cash we continue to invest in excess securities

to XX. forgiveness Loan Turning investments. deposit continued yields slide and PPP growth by in rate cuts, are offset being

XX. slide to Turning

mentioned specific reserves You'll our allowance of off general portion loan John charged had of a history. earlier impacted reserves loss. which as our the in our loan this quarter, see losses for We title breakout

in However, of you reversal the provision resulted this for loan which was losses our offset ag by this reserves credit quarter. tied COVID saw to to the our portfolio,

basis million quarter, seven Loan loan servicing during increased is to by spread. serviced which $XX.X sold in a XX. slide Turning offset the point decrease and

originations increased rights this Our loan servicing income overall origination the to due quarter.

Turning our some the to catch-up did quarter year. to incentive compensation have fourth XX. We due success due slide in noise this to

Moving to slide XX.

XXX,XXX during $XX.XX. program our noted the we been Tim shares pleased price QX As of purchased we've XXXX, buyback earlier, at a with XXXX. average results very In of weighted

price we XXXX, shares $XX.XX. a During at average purchased of weighted XXX,XXX

give to million funded interest to as slightly XXXX, digit net brokers We on XXX,XXX interest $XXX I year year up XXXX we'll by approximately off use Moving during single XX. with strategy sales how implement buyback mid to leverage slide a an envision we gains of or to far margin increase using OREO. quarterly. overall the a anticipated Right in will and the We as our believe an PPP We in of now, which excluding CDs, targeting income going XXXX. bit back our guidance investments net XX% we're loan We're securities little capital income loan excess during X.XX%. decrease non-interest when you're growth, approximately anticipate shares. activity. want evaluate

will We in growth overall when To off team our conclude, will the to compared I'd local communities people, our for XXXX as minimal. expense increase XXXX customers how rate a deliver XXXX loan single in continue goodwill now, it results. and mid for and supporting and OREO downs serviced open executed from whether Tim XXXX. sold a this to questions. be impairment to we XXXX levels you we in to such mentioned, results, believe be expect great and extremely write play the back our think role increase organization, proud We we in and to like up digit And of

couple I'd like one, make here. comments to final

improvement pleased dairy we're earlier, our this has side environment transformation been XXXX. comments, more impressive. to of I strategic Just encouraging. into And The to been also in year. offensive very challenging very how mentioned sheet to of poised add responded in to the finally, balance move direction team the our Glen's a right am And has as our

I'll to it questions. open up Now,

[Operator of ahead. question begin We will Nosal come Instructions] from Piper first will Please question-and-answer Sandler. session. the our And Brendan go now

Hey, good morning you? How everybody. are

morning, Good Brandon.

Do Just that what the and the you charge of have the was loan was want original here. off to to mark the start off? hotel balance quarter to prior off on the the charge LTV happen loan to prior this

John, do you information? have that

hotel hotel or was as the approximately we flags. -- Brendan, at When was they the the pandemic The as loan done where there's high the that's concern, Yeah. mentioned. was XX% again, to I It million $X value that had down. with original contract, hit, a and borrowers the debt of once property. working it converting we initially Once – and -- another what in as going we dropped the but total have buyer appraisal the on it went dark a a now, were praise it purchase right potential dark, executed And was we had the have been value. middle a

too, slight our further may. write-down costs property. There wrote we we So, were anticipate any what closing on don't we down be Depending may a this on took when write-down. but from gain conservative we

in the this on Can credit just compare and you one of the contrast with kind are get just of middle color change. But quarter. just understand then, what's help helpful. the That's those similar that the And I was on in markets just any left Okay. flag remainder whether dynamics? uses it book. similar, a are this Fantastic. they're or primary of hotel us

Yeah.

only have Milwaukee the charge three We near airport. the the So, took hotels. we was the down area where in hotel remaining

industry, two in And mean, We've We've generally up guarantors hotel These to in got have in there. speaking. in happened have guarantor but operating. they're operators. -- Their some good the the to occupancy rates Madison extent recovery we're nothing We impacted, starting and nothing of multiple are that then there. the see got good Valley. what Milwaukee, one we location have other Fox still support I

did place So, we the them as precaution a precaution. in watch bucket

to watch them closely. continue We

at the One enough albeit this still going interest-only. other point. of keep but historical buyers not things loan them we're But with are there. is still operating, making we payments, the at comfortable levels, They're full P&I on to that two again, to have

we situation in the different what were completely dealing So, hotel than with Milwaukee.

maybe Can Yeah. trying few then just just ago? mentioned minute Thank back. for on color. guess guys accomplish? strategy you anticipate a spend that spread point minutes on from one, one, sheet liability what a you That's then broker can you're on between to view guys And you the two, final you the versus the you And asset are what step bringing that. fantastic what a I of side side?

to to respond John, do want you that?

Yeah.

flexibility. CDs So to brokers some with Brendan, using we're

longer change. with on doing bank as municipal and CDs -- the sub-debt, are started looking at well investments CMOs. brokered Again, give rates assets us as there call just then we as flexibility So, side, maximum options. And term in we're to

So, it’s liquid -- And spreads spread be probably to when sheets. of to just -- a the X%. about it's strategy it's largely comes are sort over balance going -- it the

Got it. questions. All right. my Thanks for taking

next Please Stephens. of McEvoy The question comes from go Terry ahead.

guys. Hi, good morning

Hey, morning, Terry.

question Maybe generically what for hires, that XXXX? you. initiatives thoughts call are branches your what new expense Tim, just new growth a on I'll and outlook, Within for

Yeah.

them the definitely deposits. environment. just for added this given us to we year. of a handful scrutinized them the current that That'll producers. the hires out, for hires, revenue few up generating a of budget and/or our pulling of New be we are them. frontline Most It's We additional new ended

scholar of we're branches, Relative novo strategizing mentioned year. feel done we de that branches. to our that workforce pretty additional novo for I a any So, not de we've you like -- list good. I'm guess, plan the sure of

facility and side a kind location of the even better for we of exposure location a last as on outstanding in that the Terry? and commercial from growth and in was most what perspective, of think loan feel process of know, the your side. considering market's are that Appleton, hidden. us our been you I both deposit this new in location the will And is us And market current new visibility give the question, we building

kind how growth and that played into expenses. hit you I think initiatives both, of just

So, so and I that think you talked branches, individuals was good. about

And attended excited day, we're and there's here we've solid XXXX. banking the too. got some think in activity other point just Opportunities this to at see going I there a commercial I meeting the that about. pipeline we're nice pretty that

That's of for through you a maybe running question then, some great. openings. Matt. the account new Appreciate And

much total PPP way look that's you about how XXXX, of XX% built at that that terms of up existing or a just from to slide? liquidity kind just in If in the accounts growth on is versus new customers came transaction think increase customers deposit in that of referenced here there

Yeah.

think, was much you've deposits lot and brought add robust a good to to gathering some we great commercial, we've a built north have is growth. focused with team of treasury what both, has which seen lot gotten when at it existing better on. I of the combination growth become led XXX and from more accounts, have but of customers. relationships a deposit on that The new that from certainly of through we selling going certainly, And deposit come has partnerships our

shareable a once. it's our but was think, new balance. where say have We're to on always buy to already fair I customers, greater can, decent money So, a continue heavier we it us they've prospects when opportunity of going an any and to from because from to there's existing get chose and wallet to focus

well into X.X% interest with net trajectory Glen. then was income with what leverage -- how as how -- that interest last thoughts Any margin that and -- the discussed? The margin basis? strategy that is on for what a net play are PPP a on as the on just margin your question Thanks. And quarterly X.X%, of come Thanks. increasing is thoughts just

the do side, going so some mean, Yeah. have that. grow biggest PPP growth, not why we as Terry, here, margin into this in governors the to I have is that's goals year? new the probably program interest far in factored as net the so, projected anything overall income on On we

are the interest year-to-date. at settle today, that forgiving overall still of it's XXX our again, kind drop add that's loans we from net and margin, from the some that overall on the during being for down reflected. income to I anything PPP at have do level We probably obviously So, XXXX of will add where to it's it should into year. growth going but look of that

So.

guys. a Thanks Okay. Have it. Appreciate weekend. nice

question go Jeff ahead. comes next D.A. The Please from of Rulis Davidson.

morning. Good Thanks.

Jeff. Morning,

lumpy. and Just a We the million level? of been Is -- and a kind just comp on wanted $X level Could kind talk quarterly fair? down The the get OREO expense sort a a levels, that? bit. grow I base the maybe to line around of expense off like guide. moderately the impairment. little goodwill of has I Is pretty we narrow this about follow-up of so that exclude the that

you talked noise I'm single about, if digit back a at Jeff, looking you Yeah. mid out growth. the like

million. $X.X about So,

If at. comp. the you with I the see little dip, of have you'll that's -- we're where -- that we XXXX lumpiness mean, think, first the I results, incentive a core, be onto I going because yeah bit think to little in a did

So, yeah.

Okay.

So, it's the XX is again, in -- of using and just XX, single you're growth XX is for digit something kind mid growth that from what if it's something of base range, there. then -- low

I million Like million, $X.X said, think. $X.X about probably Yeah. in I maybe growth,

it. Got

it's of lot kind moving of pieces And a the -- Yeah. on management and reserve there. Okay. then in

a I your given maybe -- kind level comfort remaining. think reduction of reserves XX% charge-offs indicates with what's the in

expect the down rebuilding kind reserve, of of Just we the big chunk if kind and do reserve but as in interested loan the year, in speak have pretty level broad how growth we could just does that maybe the you could then go of you that? of some a to look? balance management forward, If through then

Yeah.

from improvement we very kind good really that XXXX. see think really ag been that during it's been we profitability have -- the I from I highlights think prices clients. -- and think envisioning hopefully our we good -- of heard you've perspective Milk we're -- stable I'm a So, some

as in to by our -- So, you in really for put provisions for we loan I amounts growth any get see the reserves. are grading offset going think

by in I is going offset to anything rating portfolio. credit from in think So, overall be growth the the improvement

at looking year what loan loss we today. very we're know based provision low So, on a for XXXX

Okay. just then, sort servicing And quick heady of And shrinking in about assume it side, bit was one I a fee talk on the income quarter. loan another slightly. that's the rights

you kind speak normalized is full to the level guidance is X.X -- it QX, could of anything mean, a shrinking level from year? in I So, or

for It's Jeff. full Yeah. the year,

So on noise that -- the at -- XXX,XXX the to and yeah, from you back sale off, gains XXX,XXX if low off the back off securities gain levels. on so, OREO the the looking figure kind off XXXX shrinkage, of of six assets, shrinkage I'm

that like there's builds originations just again, So, the on you in So. mean, they're there's of I quarter -- right? notice the servicing, loan because up the -- fourth heavy there just

it. Okay. Appreciate the Thanks color. for

Yeah. Yeah.

Bryce of go question comes from The Please Rowe Hovde. next ahead.

Thanks. Good morning everyone. Good.

Bryce. morning, good Hey,

Hey, Bryce.

since the to have Wanted public. going -- on terms certainly the get-go that transformation transformation balance what today of benefit the of continuing all balance sheet? saw is side you the the maybe of system. continue about right we that liquidity all pushed are of that the focused Hi. what into But in talk really obviously of the to understand -- little a right the wanted what seeing It's side of something you opportunity opportunities from bit maybe But XXXX, of in to the got sheet. the

Matt, you want do to to speak that?

the a and got our recently fronts. of prospects addition of treasury already key announced, the going system. market to pipeline driving into new given the liquidity, come variety We've talks in Bryce, a sales stay well on The some a continued we robust of that, person, opportunity, to is as this that's Yeah. especially starting Sure. to just that year going of and side. continued be with think there's as also development mortgage a I

but really we've a So, will and to accounts. going transaction continue deposits opportunity I those CDs, as focus to get to in non-maturity our always you're continue heavier be got portion community we bank, of have from think a diversify individual those to where drive that Certainly, our good deposits. on a

Okay.

Bryce, this Glen. is

loan Just as to We're from growth strategic the perspective, wholesale our wholesale trying deposits. strategy. more we to funding about really going the using talked our client funding use we're to govern be the leverage with

So.

a have talk Okay. mean, clients about to new round, Glen. other here round clients wanted I you PPP seen in certainly there some make -- That's and obviously, or banks helpful, early question this kind contribution with the was XXXX it signing about understand with success -- could latest And that new we for have -- up and of with heard this loans.

commentary of at this that you're round? guys What that clients would early from be Just any have helpful? could seeing around this stage you

Sure. Bryce, so been to on expert kind it. in-house of of staying to topic I'm going that have respond Dave on that. our top He's and

So, Dave?

can dash, the than first average like back draw us with that we makes We've for second with $X helped size round over might've more around of we to mad another activity. we that The have had that, we notes but technology our We April. that in Sure. deals we originally. for sure we've platform have on pretty but That's And of the partner good the draw online tendency We -- second this bank second community And there's to weren't it to thought expect Tuesday. the some probably is people to what start customers. a able technology helped or as were billion, to pretty is tried be originated tamp that down going. we time think has use. the that loans portal these on going a this easy week smaller, early qualifying think

file And this our the to for as for their important basis of eligibility rules sole a our to use new and proprietors round was income an draw The ag their for F -- growth a in lot self-employed. is other changed first their schedule that F's change thing determining on schedule that's had for customers net that farms. that using for

will And But referral lot qualify. tax round, their and because time farmers had of a eligible they the that first we strategies. now planning weren't so, tax of around this

be pace and level not around. -- than the think first sizes activity less pleased but of it, meaningful, of of big, go to aren't but course, week that will the it's a to so average with not Now, we're I the we're but the we like the activity the going said, into as and be this near round far,

good mean, your value. appreciate a Dave. trading pick to wanted Tim, the ask about stock a That's tangible detail, it. to up I below opportunity And buyback. book good I clearly

is increasing at think Just to you'll stock you about or in good -- do the -- of current level Assuming move get get ahead? pull see terms a way does your -- some of is too the what intention, price. stock, high the buyback think from will didn't levels back appetite that you if you there and doesn't

Yeah. from say buyback we're quite level, I continue I we're sense a to this committed repurchase would ways it think at And and makes still value our shares to to that shares. continue to book obviously.

up shortly for year. almost we're to another is the we'll authorization of it the of and anticipating balance from buybacks tranche current approval here reauthorize continue Our get to our board

today. but as we then I'd a consider long -- to we're premium significant might unless ways As at pulling our say back, trading we from a that long start value, book

talk it's great. the to again. That's good to guys you Appreciate answers, and

Thanks, Bryce.

Please go The comes from Scurlydog of Howard Capital. question next Henick on.

to concerns a maybe me but And Hey, low bank very charge-offs. NPAs, high I'm really Thanks out charge-off. with $X.X flush taking been I'm have slow. the always and my million want to you for going is thanks But what guys I gentlemen. Brendan question. of on follow-up

start high a I'm high So, I was charge-offs. and with NPAs when less having comfortable comfortable obviously they

of you not, And you And -- So where details still that? hotel? the you. all those it $X.X that could structure, one flush go? Milwaukee Is have So, that is is give the could if of Thank that three -- it details mentioned said You loans? these else you AB that did possible do back? get more on me on some the out charges-off million? we

mentioned just John, you earlier? do to what you want reiterate

there. a we right of XX-XX. shakes just again, so in did Yeah. owners would of associated I is the hotel some so, Milwaukee Well, charge-off it contract. the all wasn't slight on there of recovery front out. But signed Milwaukee may don't how charge-off, have do hotel, split costs, the probably two the kind based We purchase all what have the were see I closing with on say there, on that me a numbers

at other projections At a where a point, one a years they would -- this thought few commercial the and was revenue get to. They just it's looking that an haven't. that haven't hit node, they was they customer did, we're this AB The a they start-up ago.

half money debt. of a the -- portion making are than service they However, to the more debt actually enough of

up accrual over it back we setting to be the over an continue able note that the some and always recover went time A return B to to have on note If -- of structure, grows, able B the be they period So, would AB note through time opportunity of status, stays the we that amount there. business to note. perform the that to charge-off

that we comfortable we in our had we make and adequate covered this So, from that had impaired anything we're we this point, substandard one than loans both concerned had we've of looked specific our charge-off. that don't of side, sure those that that else at collateral time. the quite of Again, standpoint, that of bank a reserves of charge-off have this to this side of first left. any know numbers some of a And probably the kind are we what all more was with validated At commercial been established these both took. the charge-off them on were what's

it, see with on especially really So, directly COVID. hotel involved side the

just side ago. financed a Again a had … other few The it business was years that we it start-up -- again, was

Is sorry. one loan? I'm the C&I second

Sorry, but that … is

Yeah.

Okay.

is. it Yes,

the collateral flow? cash loan second than other with A little

no. no, No,

estate, real have have equipment. we We

hard there collateral is collateral. there. So, There's

are either was But excess only either reserves specific established there reserves, do -- those this along, don't you charges in reserves point reserves? that any against have correct? specific the well, it guess, of the Okay. loans is have reserves? still at of was specific or And I

of of excess charges we in The the specific that were took amount reserves there.

the specific they So, books, where that still back those still on -- now? against or are reserves are loans, held the restructured those are go into reserves loans general

part. answer believe you -- I'll Glen, Glen, let answer you can I that. that

Yeah.

just -- I goes evaluation. goes it into overall just think, it our all

calculation. we had year. the whole end excess whatever was an go back And we -- if our So, into there of at would reserves, the the it is adjusted if just calculation

So.

at these to reserves have of specific because you point think structure. loans, going but at is think you no two I'm they're Well, their current either ask don't this you you against point this reserved adequately for

That's correct.

Okay.

Okay. Thank you.

both as well. recent appraisals supported they're by And

Correct.

Scott. Janney The question of Montgomery next go Please from Evan ahead. comes Lyle

Brian Martin. Good morning. on I'm for guys. Hey,

Hey. Good Evan. morning,

Most few asked. a quick have mine Just been of questions.

on any just slides side. on you of about XXXX, I know But been of areas loan just potential start in appreciated. I'll I'm a color think of be out the call. guys the possibly. Any curious stand would just here kind of for this color your terms there, that growth, have footprint in lot particular I

the guess, our I'll market that's a bit C&I in more estate team who Appleton's I Bay a think great team. Yeah. start. that market real and senior opportunity We us. given on there's banker commercial mix new mixed side we're been associated there facility even typical a us there. recently hired come, And a space. joined the in bear guess, I and earlier, bankers our green think our think been mentioned for days. including earlier little We last that within Green that'll but in and he growing referenced XX continued in some we new there's to we for that And we constructing then, bank up during for new fruit well time. the bring three the over unfortunately, business he's potato as in a I our deal added the we us is to ag from side, non-solicitation diversified shifting and market to BMO, relationships, continued with, got row as that And he has known crop agricultural XXXX the have cash some well of to

and there's think the some for off nice to as both sheet of guidance in opportunities some information. we on growth, balance alluded So, Glen some

for XXXX. we're optimistic So,

that. Appreciate Awesome.

collect? you of just the to think, the year. the on I we are as left the some I about thing, going know through conference Next unearned go mentioned everything. remaining that I'm And move what balance call just stuff But to was to what's curious, fees PPP and and loans. I

you to to Glen, want respond that?

need Yeah. one in just I'll turning slides back. of slide if on now. to one right you to on This refer second. margin get XX. the that slide on in is I'm slide It's here to you number the it our deck the slide

So, we've million left. got $XX.X

You fed and it's the using how funded funding. can we're see

left fee million and anticipate to about recognized, have of net income be being that recognized You deferred $X a we bucks XXXX. got in

holds go And that? Okay. lastly, Perfect. touched expect on to think, about Yeah. thinking credit where just the level, probably then we up? are I that reserve Just how you if -- you do

to as Yeah. how low some loss this on built Credit expect see obviously based be you reserves in loan we allowance we year. in loan put put very XX, grading. allow holds growth. for up the up We'll can -- do general has provision loan slide But on

watcher. So, loans the X% X%, allocation get on watch and depending heavier a between a and it's if worst

up of balances as migration If and the measures move we ag chain. is, special improve going portfolio we the buckets see are move performing. out those to to start substandard it So, those think

requirements just reduce that'll help allowance that. definitely because of So our

any ag provision. of So, growth the on against offsetting the improvements I envision kind side

So.

Okay.

rise So, that? Are you a we're and -- that on, do or class kind on criticize curious think going think your levels, peak thoughts level to see do size going you would guys that you just you I was just think of curious, into XXXX? you

and ratio that We cycle, migration the peaked XXXX should we as we some think through Yeah. throughout get on especially downward side. and see the ag they've clearly review

That's color. the for appreciate me. I Perfect. all Okay.

Ross The Haberman Investments. RLH of ahead. question from go next Please comes

growth generally you? back expectations or want to hopes. Good morning, gentlemen. to How are go I just the loan overall

little now. in first half growth loan you net what in real your any you're see just bit terms a about the of from talked it Do seeing today? backlog XXXX of You

would in I've the the the commercial I given deals Q say other that yes, heard about day.

guess sides year. will venture think but of the again, some we've see I the net pretty got growth think we on both PPP, ex hate but house some of pipeline see number, loan we half to on loan a growth. first solid I a some to

the question further about did you're one to this the see just Do or spread you like what of margin. looks went up the going which it And It PPP, quarter. Ex do. I over least? it's next stable going six over and assuming year, to going nine a to, the a bit next guess, months, up up rates go slowly are the little you along at

Glen. is this Ross, Yeah.

in and there's PPP because income the in -- big a the there's recognize. margin loan they fee of jump can the So, jump the quarter this

as think year-to-date overall downwards drift that recognized definitely it's that's as again off a a going So, again, as, level to you're average level of We again, XXXX. dollar And a some XXX. a about too. from from going -- to believe loan grow just perspective see to from income about it's going we on overall be the growth just going well to in to PPP

So.

the how any trust banks? have other from political last thing, so, of preferreds you bought much total, subordinated have say you bought? you or And debt if one in have very been of which bought banks, other these or And final months? three six Have

Yeah.

that rated that we started year. system to XX buy think to we've a million grading million. Again, got we've this I XX So, It's we for probably proprietary those. -- having use have bought

paper. diligence those some that So, make just on we sure do buying to in we're sound due the

So.

I got it.

The Have a Thanks lot. guys. weekend, best luck. of a good Okay.

Thank you.

go [Operator from Martin Instructions] question Please And of the Janney come will next Brian Montgomery. ahead.

It's Brian. me. jumped Hey, guys. associate apologize. on My I for

the congrats information thanks on So and getting for quarter for us.

Thanks, Brian.

our the turn This to any session. Schneider would like Tim I remarks. for concludes back question-and-answer closing over to conference

for again joining us. Thank all you

felt had well. everyone for weathered the things we we come to we opportunities and feel. like alluded pretty about and I challenging to a year in XXXX it We're good As excited like else

So, thank you.

disconnect. The may conference is today's and for concluded. you now attending now presentation Thank you