Independent Bank (INDB) 23 Oct 202020 Q3 Earnings call transcript

Welcome to the Independent Bank Corp.

Third Quarter Earnings Call.

Before proceeding, let me mention that this call may contain forward-looking statements with respect to the financial conditions, results of operation in business with Independent Bank Corp. Actual results may be different. Factors that may cause actual results to differ include those identified in our annual report from Form 10-K in our earnings press release. information, against intent upon forward-looking to in to you and forward-looking statements, cautions otherwise. response any or disclaims update new Bancorp unduly any relying statements whether Independent events future publicly any Please note, will certain Bank financial non-GAAP Independent call, as review performances. also we discuss measures Corp.'s during that this we These non-GAAP read be with results. GAAP not together for replacements financial considered measures should be and should of which our our Please reconciliations website measures. obtain regarding Relations refer to measures of release the our a directly and non-GAAP earnings these section press most comparable-GAAP contains Investor of copy non-GAAP the additional to to measures information Also, please note recorded. that event being is this to like now I'd the Mr. conference over to turn and Chris Oddleifson, CEO. President ahead. Please go

be today. Chief Nadeau, Thank Mark Cozzone, usual Officer. and you, and and Trust to hopes Rockland of well-being by Officer; We for again Officer; Financial during wish you your this thank our and Nick, Gerry our crisis. your to morning, extend families me will our answer us Ruggiero, health prolonged again With as good our joining we our and continued Chief Commercial Operating Banking Rob any of you, of joined President will questions. all They available and our be as for chief to everybody,

during continue results performance. as business strong COVID we our by and pandemic, third ability adapt quarter to produce to our the demonstrated As persevere we continuing are encouraged solid by

X.X% greater credit by of a in and colleagues. at of in and the prior the including identified. will with I'll the out resiliency since played came Rockland U.S. review million, unemployment strength have up of is income the XX.X% January September, to of and picture a quarter. comprehensive our quarter previously rate note covering share, highest the the the is Mark business net Massachusetts industries July, quarter XXXX. expected, risk trends a economy. in Massachusetts attributable above model down Trust our start which in be from in as high It on $X.XX is detail especially Third in $XX.X we've or highest of per This The as well X.X% seventh and

we has we activity. round of first unemployment, high [indiscernible] levels economic stimulus the of know Although see

state fact, spending Much the Economic requirement CECL positive on since our [ph] up has some negative. shifted provision. been X.X% consumer into In shift we're and in in some loan like meaningful the have incorporated of and activity consumer is as activities, seeing rest businesses; XXXX. our spending January a nation, fully has of will the this local outlook impacts loss

The trends third X%, assets the these quarter its as the back tangible during core many growth, sustained that and income, much loan of value or fact solid positive well from benefits growth. segment strong return in this above were levels, capital control, per changes impact. ample persists with at no book share crisis immune and None society economy of our expense uncertainty growth, liquidity lower a there including deposit fee provision loss commercial loan business fundamentals continued from

our customers anxieties For has Trust priority of crisis even relationships burdens reduce top to to evident us, been continues leading we performance. our more We solid character Rockland this and this while remain to to true strive colleagues feel as unfold. our during period, the and

service business Under good gaining challenge as resiliency. and the new going the diversity and offerings clients our Gerry's many our bankers businesses still core Our are and deal are leadership, under remain our commercial are despite of the challenges. terms flow business really meeting

last levels. year's year In and fact, neck our loan closings running are with this neck

as shape Our pipelines remain well. good in

shape level, high our our COVID we of learnings from deposits leveraging all are continues at the to the core generation value a deposit experience Our recognizing brand funding strategy.

their has reduce with branch record-levels This to capitalize strategy banks as other branch advisor. of period. a on a to see footprint, bank trusted opportunity plans this fueled during relationships, anchored we As to new looking an announced openings this account

Our the of to source bank. an other referrals branches parts of also important be continue to

Our of record rate generate Rob's vibes to environment. one continues in mortgage operation, slow businesses the

capacity Hills acquisition the demand. resulting expanded accommodate surge us allows Our to from in Blue the Bank

Our billion. investment fee remains prized assets our revenues management reaching center now one businesses and group of with growing management $X.X

XX And more our brand the team investment than Our across across footprint. remains strong. Rockland XX has Trust offices professionals

and a by advertising campaigns. We continue blend rich to marketing actively promote it of

Our service strengths strengthen reinforce ones. is product and new led relationships to reliability stellar reputation its depth existing customer for us and earn

adapting to Commercial be look about will recent couldn't we our we dividends. we commercial course the service we're received. Western open One full progress have February to our enthused branch excited grow paying is loan pandemic. entry to hiring into opened about the experiences Looking and market. western as strong have levels for to market very second in our first area reception origination our more and been full have date ways our continue avenues experienced to that We [ph] our the really ahead, and the and in service branch of observations is over by we're

could We the comfort also preferences. these in to and our six alliance, Witnessing one with these past channels validation the growing the question mobile is level challenge takeaways notable channels strong with customer continue months expectation digital to keep investments and customers the customer with we've and our senior are ease this uptake the No pace these the among from more pivot in in channels, area. invest especially to technology which of made individuals. with growing

also added environment. to current the challenges risk We address efforts the our by management to posed continue augment

ways to improve we to efficiency. further operating take a our look Additionally, plan hard at

to will this, as franchise these discussed term short it expect keeping of considerations sustainability. our we term improve to doing value. so, term profitability against efforts, ways footprint on while to our and produce balance continue configuration As Throughout to continue solid look part continue results long a to enhancing all we In earlier. we longer robust for branch

want sauce as success, As end last comments with to always, they colleagues, the months. ably to Mark. it have thanks I'll my so all the our with hardworking heartfelt my over to six to true demonstrated And that, over who are I turn secret

Chris. detail. in third of results. XXXX of I increases quarter's XX% GAAP net cover will you, respectively, of diluted results XX.X% Thank quarter the quarter million more of income third in now the in $XX.X from the prior EPS $X.XX reflect and

with the As core solid hedged derivative, reduced results amendment. $X.XX which absorbing net of for impact one-time the income a in $XX.X loan drove when included consumer or Also by in strong million focused the termination third of quarter results the and the on results expense excluded, a EPS. provision Durbin management caused fee related commencement fees third associated operating quarter despite was of negative diluted loss losses income

assets despite balance pressure is continued note negatively the the to As sheet. X.XX% pre-provision metrics average these a in results yields. X.XX% asset important basis that on return were quarter, excess outsize quarter X.XX% prior drove on notable for on also It third impacted liquidity on the both operating an assets with pretax, on level or consistent the quarter of increase to of return remained by

of community. elements deferral of to Focusing highlight update heightened on will certain investment that on first first interest I we activity. loan an have the the will credit, portfolio provide been loan

of and deferral XXXX. earnings [ph], subject were to September of loans X.X% dropped of of loans to disciplined F Appendix continue total in referenced million September. talked our in the that approximately assessment any deferral. their loans $XXX million or release, about reached approach future reduction of whether considering as quarter, a last as $XXX Included additional total our deferral As XX, [ph] And flow we grant maturity viability information request and cash financial to date we ensuring updated in for of

of portion to payment we note, a to we total we quarter. the through relief enter a those expect positive mature and another of starting such, to be recently early extension. our to hotel into recently for further deferral of the balances the deferral, deferrals in from are although a to continue full of those a anticipate similarly looking deferral, fourth working although see to industry, particularly these deferrals, decrease On process principal-only ended As agreeable further transition to round in deferral the any with level

industries. terms other non-performing quarter, loans customers, surprisingly, nonaccrual during one including impacted $X.X a the quarter, charge during these migration driven high-COVID with credit Not of previously-identified large increased the included the primarily to $XX.X the developments million million were associated three all [ph] by In in off treatment commercial of for relationships relationships. those three

and identifying hopeful of the contained We migration impacted well various credit provision absolute pandemic, Rounding outlook quarter's the materially estimates our resolutions. drive was allowance has approach and picture will in overall to for deferral last overall future by proactive possible the regarding levels activity, dependencies the mentioned ongoing to solutions as discussion out workout as exposure changed quarter. process. that the what assumed loss to last and call, heavily as leverage problem loans credit continues in in related to and from not information lead In are management near-term to Management's the and general, industries

from third $X.X million million the of significant QX and and the such, provision booked As $XX provision quarter million numbers respectively. $XX QX losses reflects in a for decrease loan

to percentage the X.XX%. exposures the as last estimates that September of loss contemplated loan quarter, conducted was in in previous these only of allowance Given increased life loans emergence already a minimally the of the XX

of As on quarter, PPP outstanding on to in bringing our update XX.X total the the with million loans the million program another as quick a PPP XXXX. third associated closed company of the program, XXX XX, September balances

started granted to similar banks, to In date. the receive forgiveness loan forgiveness addition, for issued been applications has have we no while other SBA to process,

associated $X.X third million the meaningful through on fees the on the C in balance such, and in into recognized $XX.X has Please with on PPP loan be there earned year-to-date detail the with has Appendix for program, basis. income recognition basis, the $X.X loans been PPP a to quarter. Of As a income more fees recognized PPP million of refer during million acceleration quarterly the quarter. been expected to amortized no

cash fourth acceleration level and the liquidity as although from we will the in continues rollout of the conversion is timing forgiven, to of Lastly, to further the in of and are forgiveness ongoing be important And the some this effective loans asset XXXX, that PPP to loan environment. anticipate near-term note amount also deployment it by of process. strain quarter affected the position SBA cash fee

program cash support on deposit preservation base, in turn customer unfold, of to As liquidity the to to continues and QX has drag our excess in reported balance strong net our our led sheet, which combined with the margin. cause a continues significant on level government PPP other interest growth

reflected margin XX second points decrease X.XX% a The reported of levels. of the basis quarter third quarter from

expect unique on the pressure continued programs. net of there loans, loans typical due the quarter. opportunities deposit reductions PPP interest of the higher mitigate by the of detailed cash other dynamic the nonaccrual be continue the of of to term. And due The to points repricing forward, as impact core margin yields component of excess than to However, decrease due in excluding be Appendix quarter-over-quarter. past costs. margin rest compression we million interest fact, will believe C, when partially by in impact the seven that of although decreased in near decrease to moving deposit rate environment, the to move items, deferral status balances asset of reversal the this out can that in pressured in offset to with this we basis $X.X notable costs low still a are is and yields the one-time asset reflects A associated to assets attributed number in three-month primarily A

to decided increased the with that entered we year in into in earlier borrowings million exit positions. Lastly, $XXX connection we FHLB the hedge our

commercial the were in With liquidity quarter off in exit will upon experienced a borrowings a the here hedge color in categories, expense results. third the close cost headwinds provide driving results savings across the on off bit the and noted environment, quarter macro hedge number annualized million quarter X% the is The loans to in and in we reflected $XXX,XXX on third offset basis to maturity being able over non-interest excluding exit six in loans that the prospectively. the X.X% in the commercial expense an more we drop the the steady growth months, challenging the despite has we loan borrowings $XX.X The million $XXX buildup were C&I level deals increased and the with some and in quarter I'll last last runoff early now PPP When in the margin interest other on the of paid consumer continued included and all leveled growth on by be current growth activity, in of over loan reduced to total commercial comfortable utilization quarter. third in annualized large portfolios. of or solid quarter October. discussed third

In This commercial through the year-to-date new step fact, [ph] represents Chris's loan quarter following total basis. up closings third the our on commitment are were on $XXX third XXXX. point, quarter commitment a of booked total million XX% of through

million, with quarter We it that uncertainty stability, fourth pipeline Working of in approved activity. continue we that reflects framework, with an September remain also at within diligent business should flow that and to but credit over underwriting XX deal financial for well not are the closing cautious collateral only $XXX optimistic bode that prudent cautiously of valuation.

record the are mortgage side, On seeing from we activity. volumes consumer

the combined as portfolio are while activity with With refinance pay secondary the And NET the balances attrite significantly. for equity majority in expected than and new market increased closing income sold home better activity, continue similarly mortgage of to banking activity demand side, seeing we on continued the off well. being

net continues growth. attrition challenge to However, overall

the quarter quarter, As Equity from mortgage we levels. Home has what we prior is XX% into pipeline with over the increased consistent the the into quarter, look fourth pipeline and entered out third

On deposit to side earlier, as a drive balances. core strong deposit referenced of factors the continue and number

evidenced the with and to guided government by we see from business reductions with checking we has to deposit echo third our increases further environment. made In strategy accounts has generation. last further despite new cost addition future run in across months brand other new as the quarter deposits to opportunity off decline economic three basis in in to the and And to said consumer stimulus quarter, core comparison near points the to relationships believe. deposit muted practices to to for deposits the costs over retrenchment banks and record-new ability existing board, of XX accounts, continuing business our what cost continue Chris instrumental the dropped various opened earlier, To increased higher money last been robust the time

profitable a key digital top as we look core in product relationships. tool in efficiency While development and we priority customer future, into value the as to continue a operating see the network branch generating

ratio reduce as remained million the tangible levels remain previously borrowings Finally goal is low assets arise, provides in of where fine resource X%. regarding opportunities over total future or equity shape funding, nearly level ample further payments, in XX% buyback borrowings of support the Capital discussed, the growth unchanged mentioned quarter-over-quarter, dividend including in asset common further with stock considerations. to an to QX. yet This already to an $XXX pay down

highlight quarter. a to to Turning will we the items, few third non-interest for items key note

by in QX, heavily the COVID-XX overall interchange impacted the Regarding activity with reduction slightly non-interest income increasing expected experienced QX spending as income, from from were experienced ATM levels from the levels. significantly-depressed deposit in a was service rebound The fees Amendment Durbin and third the which charges and quarter pandemic.

market by current the wealth continues resulting money Regarding a increased quarters' under fees new seasonal increase preparation results. drove in although to management, challenged performance generation fee in in the included income be tax despite assets quarter-over-quarter prior X.X% administration, environment,

XX income a million loan $X.X quarter. is to strong for elevated On quarter remained third as the the continuing income with of And natural As activity third the rate similar note, in remain against set aforementioned low a the pipeline, hedge impact quarter. level record healthy September the expected to banking new noted derivative through the mortgage origination fourth earlier, environment. at a the serve current

notable and expense despite as of expense, expected quarter, challenging FDIC the the on prior non-interest non-interest in hyper-focus this remains the hedge increases loss a derivative, the environment. disciplined total termination with flat assessment expenses the relatively Regarding management through as remained

legacy looking profitability. cost will As long for Chris there of priority lens strategic of intently improvement. be opportunities term stated where of efficiency be Any at decisions, earlier, we operating are and improving organization through at remains the looked the to may course, challenge a

quarter of to tax and XX.X% Lastly, That the now concludes for comments in it rate open with line the will up my third was expectations. questions.

question question-and-answer go [Operator First We'll from Instructions] session. Mark now Piper ahead. Please begin Fitzgibbon Sandler. is the with

Friday. happy guys, Hey,

How Mark? are doing, you

How are you doing, Mark?

bit maybe LTVs could if wonder and I color real would like? loans. of That might the little around large the us collateralized you look collateral Good. give some more by a they're size each estate, those be -- of three great. some sense Maybe whether what

Sure, industry; Gerry and elements arts of in without to much we around can status. the that million. is the as of he in One I'll mention The But two is one $XX balances, moving there's discussion service three details, industry; giving the food relationships million in as and are line is range are add didn't on one entertainment hotel high-level industry. give about and $XX the needed. some nonaccrual certainly other well the and to color too is and the is the $XX them million the into

million by what the $XX real business a secured certainly assets, mix and the which the went both NPA into real the The also restaurant the majority over made collateral other up entertainment estate, estate. estate of and relationship So real is is of [ph] has third by in quarter. hotel in secured primarily aggregate,

of I and think get resolution. real actively here is to we are these positive the near-term relationships, proactively looking note two out

point. pose are term the through liability that So three relationships high-risk at we as we've these of we flow all industries, that this in top identified and been being think the long risks risk going really cash very the looking proactive at the to

worked nonaccrual continuing we allow as losses deferrals quickly it thought for term and want these potential prudent into possible. to and than mitigate as rather to discretionary just to it any get long out we So those move

that color, provides hope I Mark. So helps some

million it's to It and tough intervention? you. but end does. that know the absent question have And on much deferral as Thank guess additional of or a I theoretically at answer, you could look you now nonaccrual think up you stimulus do $XXX I government on how

like say, you to Yes, it's difficult pinpoint. certainly

I those with negotiate development of of we're from the stay experience is -- of portion that any loans recent the good some think positive for end the sort more of full to deferral positive the we're on this somewhat been deferral is continuing with. anecdotal payment the maturity that program really that are and get is to came those to able actually that a period, to a deferral But their continuing that a principal-only. we've to there aspect

that on a have position if comfortable flow that a to long get an So issues to are time the the future are continuing to and process, with pattern they these deferral the period allow interest a that to a migration we'd Any through that does one-off basis in and loan our may the that that accruing enough payments of position we cash able that's whatever the feel is and interest of if represents feel loans. get we actually we payment that collection out fact allows fact pattern likely would a borrower we're see be may come to they look we the get need nonaccrual when whether that for deferred looking period, full get cure customer deferral. have that on at situation that us we but would to comfortable where run. feel accruing continue follow and And a on really to deferral would to deferral, be

we're on basis. an at much individual very these So looking

is this bank. relationship we're know customers really to on pulse talking a them I good are our strong cash and pandemic business and often think that of very model we throughout viability very like. lenders what our business a have We the looks much future flow well, point the

to continue to this really identifying we at we'll here be makes on So as think top we exposures identified sit we in we point. believe put nonaccrual. proactive those that sense the But, today,

for million And that to how long you. give you're some excess like down you of it balance Can kind more of sense Okay, level? the XXX to manageable it million looks us sheet. then liquidity of bring $XXX take carrying think or might thank sort on a you

if certainly, I this profitability in challenge it's perspective. think Yes, the core for not biggest a just environment from us,

loans mentioned will cash. I future into as will the think, be convert aspect PPP to continue the comments, additional my in that of period I this are loans forgiven as that whatever those unique may over other be,

cash about the make be number rolling we a did, there's headwind be in that So that there off, we that we'll a in CDs opportunities a have But of We already a higher balances. cost we as have borrowings terms borrowing I dent to there of other may of excess liquidity. number talked least already continue opportunities well. think prepaid at prepaid to

it of we recently, makes that's So that term deploy uptick long bit Most sense. a to certainly avenue one in aggressively will we're an see where rates. starting

optimal incremental as we'd we're book been is put lift putting be the and given of more sort continuing over pipelines some And deploy work think on mentioned, a where some to we've have at the attrition a there be any we'd think challenged now now environment. avenue I market aggressive on in to a we that position comfortable off we increases position, ahead being investment versus potential shift securities far appetite We too pull the pay really basis. this opportunity I -- continued hopeful be think this to loans, lever probably to get been have sensitivity an our securities So are get portfolio earning is some make And put our believe an much side, won't generation is certainly liquidity strong at and by in opportunity where It's the environment still to to any secondary out an the where asset able we strong. in Fed. what bit back that That's very as optimistic we're portfolio. more avenue, we and but going hesitant but to money to excess there strong we consumer into grow not we're we are really into think portfolio of in well. the that we're balance is we mortgage activity, portfolio, and big And new suggest of in not can a retained growth how another make there. the is of also sheet the in our but loan we'll in think selling very terms we credit to more that incremental money again

it's it's of of not So mark, to things balance profitability, we a of be a think those to for company. combination the all need term not to really a also that but position of ourselves do we beneficial that sort the a better in feel is long we what in short-term extending is the managing

question, to impact, margin down continue we last saw core maybe going if this at is a come you slower the So rate Is exclude than to that but PPP fair? quarter.

think fair. very Yes. I that's

shown staying we're that the I I to consider a think we've on cut you when asset the if we've repricing impact. do job deposit able liquidity, third of what equal the excess nice you the making lot side from strip out equal, really in mitigate seeing to been and a of think quarter

the that of So continue the to least case, quarters. think at for can next be we couple

moving We ability deposit some have side. on to keep the

compression. margin able to think the we'll temper be I

sheet I'm pricing balance one side the was either Just seeing just curious, question, are companies of market any in There of might. a if capital. from on your that? impact with large on lot demutualization you with final I a big

just I'll defer bit Jerry on maybe that's market what the to to of give a color is. if condition little okay

Mark. Hey,

Jerry. Hey,

really marketplace make wanted Based I on -- they liquidity, about sufficient Bank I loans talking eastern the the that in you're well, think to had to. Corp, think Eastern

Eastern pretty on been loans years to been just actually are past, greater, raised of their they've this time, some smaller, the with going little has they're pricing. over larger long better the I The I larger in bit spreads that credit improved, very been disciplined. capital. has change the the on think are are around Actually fact flows mutuals, Pricing thrifts to disciplined they the going they've don't and lender, market side. loans. a quickly. both and that's a smaller I the change with to a think they've that think I respect expect still challenge installed being non-public but that behavior don't of in been

you. Thank

welcome. You're

Thank you.

Davidson. Next question D.A. comes from Please go ahead. Christopher Keith,

Morning.

Morning.

the give the real more I if what and could margin, a a commercial for you sense me reprice a few maybe was Just estate digging guess I sense sets are wondering new over loans coming little quarters. into for next what at bit on to

think in without we commitments and can I widening actually some particular been decisions, of activity our of on pricing getting in to I the see our Sure, too that swap spreads say a third the booked swap able the some quarter, we've portfolio. of

more to amenable discipline. continue We be rate much to are our pricing fixed able to see that deals with floors

in -- about second actually closed we third margin In been in the terms the average, activity, that on on have XX a we've basis did at the higher we actually quarter, commitments recent booked than what of point quarter.

the backdrop this and absolute should good in least level repricing be lower rates just of I think that's we a able protect maintain environment. to of at rate what believe

that's help think the should to and third repricing do nice asset development of as new can make side, compression. most we deposit at a chip been quarter cuts to yield to the that I I so that we able component. away continue in we've asset the mentioned, think Then there on

Awesome.

think guess, mortgage strength Perfect. you in I continued going income, over mentioned great. the I Then banking. Okay, to non-interest just

think at off curious. base coming we do numbers, or market strength were quarters? able looking but historical increased off a increase of just down versus even it's maybe few little quarter the the you over of bit you are in lower the to I highs. next second If I'm just but the continued XQ strength the understand continued

probably mentioned pretty to into into being our quarter closing similar that almost to close would gives things big All fourth see heading where -- the picture. equal, exactly think into say good was we pipeline headed we at quarter context I Yes, some expect I'd the least activity. third so I

that, at I result I liquidity think bit mentioned mortgage of the to is comparable the caveat sensitivity the an That opportunities pretty position, our of more as immediate opportunity quarter, asset into should those in quarter, there sheet P&L through is caveat shift the find portfolio. side interest and benefit impact be look look Should one perspective. mortgage would banking get earlier obviously and think we onto revenue balance that of In be fourth a originations we production but the would the given total, the obviously fourth may the that banking quarter-over-quarter. on we one at some income new the income. the income portfolio that interest putting

Okay. thanks questions. All for taking right. Well, my

problem. No

Thank you.

from question Point. Compass Hunsicker, Next comes Laurie go ahead. Please

morning. Good Hi.

Just we I have there? follow much offline. and but amount have commercial If loan you that the love loans. always, deferral in us leveraged I up If how it, update of back you go highlighted and this, that the detail don't book gave, in Can as you to what's hoping your on with you can appears billion, the categories, there? $X.X commercial that you your leverage where is detail in can is

point. I isolated believe through the Yes, real I leveraged loan have quick at don't here, I'm looking this just Laurie.

follow I'll up Okay, offline. with you

back you to certainly get that. on can I

Okay, thanks.

that looking how expenses, think you can us. I'm wondering about at we should Just the maybe and refresh

that one of thinking branches open. you to a how terms next considering? now. potentially many de mean, second I about for a are guys novo strategy you've about in about you year? got Just just How Are you're thinking

initiative, I'll really of maybe forward Worcester on let take branch bit of the any that heading in let Sure. a in of the is sort the increase brand sort I'll as little there. in lead strategy color region driving and Rob that but give is more terms Rob particular, priority he

we Chris the city Mark. open as third next the or to Worcester early quarter, morning, had Laurie. Thanks, Good the in branch Mark the mentioned, planning opening first another is location here. first Then probably Laurie, in Worcester our and are area in expected in quarter of quarter.

not franchise to least our XXXX, I nine locations formally more would continuing would locations. those our footprint additional mean from any that but We two have along more Massachusetts in the identified route not our at to suspect would like than new central Eastern any we in but open two corridor, certainly beyond additional expansion one next location,

after another the We quarter, and adding one then we're in in more that. fourth have quarter, two or third the a first one, maybe

In selective look at addition, consolidations. we for to opportunities continue

coming in As from opening of sort Chris we frankly, quarters we as our have sense we years. look businesses, to consolidation value any all not to plan makes where done regularly for I significant decade, comments, suspect case branch the our continue mentioned in significant over find opportunities will and franchise his consolidate but that the and be for the we of do and last it

you you so how credit, Okay. during that pandemic the think $XX at And you Chris be an would help or billion then would guess and two would potentially you consider Thanks. I clarity guess approach how us I you now I size guess now how that? point certainly Boston acquisition. also like Greater ago, on suggested see in just about which years along acquisition those waiting, all the Can point, probably or at about rewinds means one lines, just think this to MSA maybe comments pursuing some about you

picture the how on if just then would in I mute. etcetera. terms be considerations, Chris, Chris, can a bit we of think big may about and to some give expand you credit you I into color think, that upon wanted

me hear you Can now?

can. We

mute I'll My a button in reverse thanks properly. working for take sorry. I apologize. asking the Okay order. Laurie, question. maybe wasn't

to every super been an door have within acquisition Don't complement quote to been growth deals. I as or adjacent our disciplined, know, a you and think been, so certainly In an done future that's do years nice the a marketplace. that. strategic would like strategy. We've to -- we we have three continue and historically two

down Looking a call me. -- I it's right the course, now, though open and think We to There of if definitely would always of sort of calls I is engage situational. think CEOs lot uncertainty. directors. and afforded somebody we're

be else potential to it. pass us and depends. maybe, we It's sort an that to pick thoughtful lot agreement would it I out let mean, We come Laurie, big up. acquisition what we'd have somebody about take now do of a on we have and could a to so right of going that. up. to an I have a think we it sort let say, on acquisition figure sort of way was well, is unwilling a be to to somebody would I like, just a by else some I price reticence that

In not those terms They hitch. of with of than a without of Franklin I current something both size, that. have Ben were about handled of our and size afraid done we am doing and with then Hills. XX% bigger we Blue

of size to banks of talking of do about sort know in something sort in -- lines, that one of in of NII terms the the the well, size, merger equal of of be say a those acquirer be equals and you're sort I'd along lead. equals needs acquisition believe an I If I

now you but Is would will that I us even us will anything it considered think a right. that give helpful, require be that really uncertainly something little Laurie? adds much say give give but color. more a to we've -- thought. right you're too factor bit didn't of The of I

helpful. more I but you're could how super think wouldn't about ask Mark, about that? you comments, guess, mentioned buybacks? just necessarily you timing in Chris, or starting your think think have if you it Maybe mentioned of broadly Thanks. do one more the your think Presumably, buybacks to too. do That's question in comments, really I about you how I

question, that to our of timing Laurie? stock was acquisition, your buyback relative The

the thinking going Yes. and In that explore the something other between buybacks you're words, of end is to now potentially year? here, about

elaborate. Yes, I don't Mark are exclusive. think can two mutually further the

we've and price very never look the seen the our over historically term, large near growth been performance reality come the we're we've all valuation the about quarter, the optimistic although certainly in stock certainly out a and potentials, last we of into grower. Sure, organic

think prudent I environment, and growth thing very in continue would make to in a manner. prudent loan deposit this the to be

the today that despite the our expected we I that are in comfortable and very now the capital do organic minimal provision the combination with absolute So capital stress we think have levels large modeling, of levels, we the have today. growth, levels we've taken and we

that it's thinking scenarios on all we has future be feel be of and our after we're lot around ability talking would think front a it. certainly Certainly, need where an see that predicated the about about. uncertainty about. levels near to avenue that certainly the to play be comfortable environment but It those is in we of would capital it's would this something dynamics stress out mind, all given I

it I'll Right, you. leave thank there.

comes go KBW. Instructions] Gilbert, Collyn from question Our Please [Operator ahead. next

if already is portion Mark, just understand Maybe, again, down. of NIM of could with book gentlemen. book prime? start of to and just should and wanting bit. little morning, the of Good off have we priced theoretically, that Thanks. remind that your you us a kind much LIBOR the Then Can repriced how

Just of so the components first question. when we trying can the get to to this of I bottoming guess see question, first that NIM part

You're repricing churn off from terms absolutely margin the had the book your saw higher exposure Right level of month prime. yields To really we repriced coming of through environment. the this just LIBOR the now, second be that the it of book right. really of at compression and historically impact the to in what the or was absolute about one and will has and into quarter. biggest in is We've we have XX% point what occurred,

equated X I the originations basis that compression been third we bit points quarter. of the Appendix you some little spreads in think in provided We're C, able that widen mentioned, at seeing new to a make about quarter. if I appendix actually looked improvement to in we've equaled some or areas. on this

to baseline terms range basis in a If of yield So that's level out to quarter, think point new and a about X the compression. consistent I from play of would third the volume think runoff good perspective. be core I thinking is with X that

the ability to net impact. move drive that your side offset to and deposits would margin Our on funding certainly

Okay.

of to the I the cash of of kind my rate but gave answer, flows question. you near term you mean, and of have, You what the on the answer expected that terms six some book that. got kind are of just for kind in

question I or now are right NII One so, see of it. so you gave on other start that work the me. to you're You go the do start to hedges to do when through did that you don't roll-off? answer and books components you guess just if the there through for hedging, those on from was have the are have I the benefiting flowing

layering LIBOR expect and the XXXX, a believe. We basis have started of of benefit. have, first end has do, as of a the most laddering a such the The all start those later those $XXX running of wouldn't next or off quarter. or I at running hedges believe the will the of this have of this XXXX off you about us in year. that been the loans. the of maturity Those money would the out for way million deliberate XXXX the we protection maturity sort that we be the given there last That quarters. against in ladder protection reminder, are part. XXXX, in back $XXX off couple very meaningful over as -- against of will hedges write hedges approach give huge all start provided into maybe they'll point, We through any I dropping last macro-level those in million of and rates from were We span

than It's actually later a sorry, Mark, little interrupt. to that,

The majority when first of other one is XXXX, of XXXX and QX rolls off in half XXXX off. rolls the

Rob. Okay. Thanks,

sense maybe if that's indicating Then outlook and try that of major Good quantify to about going, migration year we reserve Okay, a kind and to But is. -- next that or all I'm risk a of quarter you're you're of the just trying don't you and saw, you what to next potential If of color saw sounds shifting your quarter, helpful. years. coming this, and kind get on normalizing credit. have think two just so. you with the in this that it half, and the you with as see seeing now, over movement what where what

provision to today perceive and lot various forecast, pressure that think that stays expects that that industries certain stays to into we can If levels factors the an in is now we we're it don't certainly, think off macroeconomic strain I charge where position know net loan based of go we've would levels, the being charge driven a I the sufficient environment outlook address a I that to which macro levels, all in macroeconomic feel as today. changes reflect in of least, need offs, the a off XXXX. somewhat think build account you assume so on industries. think mitigate equal, being accounted we on need this and see we as on portfolio if being we consistent, our it see loss reserve small back I provision at growth. businesses to in in the we reserve think current things any activity to We assumptions to for well primarily we within really Barring those I for you'll extent in think

just so question, then, think us hotel risk, we That's Then about that on Okay. as this that, one you charge helpful. took just loss the quarter.

it was was of under or curious what you $X.X what Just loss to tied just million a did What original severity was. $X a the loss that? just million, trying amount sense to of get loan say,

$XX a Collyn. was million-plus It relationship,

I non-performing but know assets get the Then now already reserve. general you specific we Okay. reserved the just the for, in think of specific reserves as trying of reserve going obviously, that forward, this versus a general? that to had move where quarter status a you this about credits you'd to kind there ones you indicated, have have coverage versus sense for

right in thing of sort really that is most I think do the credits the what identify this we environment risk. really is pose specific feel to

updated loss though discretionary will identified now the approach specific in an becomes looking the precise a on at on The approach exposure versus, think a how the basis. we're the right at of as credits. we took, our the mentioned of rating perspective, allocation about from discussions reserve customers. were a larger a we're at lot a we've ability but these drive always this allocation, with with drive to perspective Those thought a will we as risk any credit are balance about the specific quarter, these non-accrual three as we reserve that about this to and reserve that out risk incident point. of conjunction not also continue historically getting further the influence lot what a to model think, looking increased with number and really -- information rating a three we on specific have down it That That's migrate into reserve. feeds moving I credits. we've and took If having model

possible. been as bit risk, it's been nonaccrual third work the I really and at reflected is quote-unquote, different number a specific specific because a through over credits quickly of as about or really in of them out have identify that, reserve -- model, front the said on moving our making reserves right quarter, forward results are today decisions and about all really and that bit we ones that mind. now of individual we operate it's don't over the that will I have I any combination status identifying credits to them process that think be specific but proactive the already little individual the framework extending reserve looking under I what of migration have these CECL think not, that's a a putting having three helps. deferrals, hope concern now being

value you way from how the your customer that you mentioned you, continue Okay. positioning What have Chris. bit others that and your value helpful. seeing in are we're expand how and little a what really still a Then different, of for the comments, guess my which That bit? that I'll de start all branches, it last branches, in others makes is you approach that network the you, significant on to reiterating, desire moving. in see you is little is Chris. just novo Can branch you're you meaningful question your to are? it with your on about than you're obviously, Taking but very three Well, is hearing I operate base,

you I'm mute. Can think I me? hear on

We can. job. Good

in. it. chime one will over to like face, I our has our I'll will XX, Rob branch just of or completely start saying incredible in going is change work a franchise maybe face that That relationship-based been a is the with desire we case in has long our by franchise I with who is extent short think network. to XX, can a but actually XX in there start to believe of presence, deposit years, community-based run open physical strengths attributable they core the to medium the The run a be an account time. that this branch then just need to segment population going to either

a Another lot, nation. say just we if no our about direct to let's our or minimize going our point skinny think and longer becoming we're then network is bank hypothetically it only, the is a down competitive by local communities, landscape branch it's

puts disadvantage. extraordinary in that at relationships come just that one. think us referrals I'll of our that we branches competitive of I I the a highlight will also have out say amount and

relationship level banker to just same think multiple been Jerry channel there the for generate really business management commercial More think case cracked screw providing management competing trust. really the are hand our there's and management two the will into the the reason key. up business, into that sources refer be internally; -- is part us our We investment which that really have doubt is between returns. also are person. asset code the is to a the important growth a build bankers. that a to future, your speak funds, your there of forces relationships that this set and $XXX of is an short it's investment over million seen looking the from you've business we investment in reasons. generate have historically, super unit, from on year unit primary great sales the of we Often We branch going $XXX for business as investment those as on moderate something to those times to sort especially that management residence This can of A million an fear Our that network and typically group, maybe another personal referrals important commercial investing how is money, group other from reluctant pre-COVID conflict, you are -- for a relationship. customer

want I there maintain Now you you some some also the the technology when looking that to relationship new you're opportunities as completely having in of a online? to said that, how of one key challenges what of semblance add? do were say sort we Rob, So is well. would

Well, you said little so that add. There's well, Chris. very to

of had fact majority the banking a XX% our column, from the business vast majority that our Despite The still COVID heard had new business The those happened deposit had we branch. still deposit demand with opened our comes addition and majority you equity business XX% our of to number commentary that record comes our being accounts, In of a and we from our accounts of we a quarter, of consumer to of open accounts, branches. in business opened officers. all with in branches small of in our management online checking openings, branches branches. are our openings our third the in account home wealth activity partnership the tripling of checking Chris's

XX%, You'll maybe When deposits. percent a XX%, consolidate decide we other and result. retained of they the of about branch. XX% XX deposits that a even we close a we retain say once when location hear many our XX%, We rates banks we they'll retained see plus branch same retention to close talk upwards of those

ever customer those doors walks again. no new However, through

your close Although may you generate you to you limited when business location. retain severely opportunity new what a had, is

all large that have have walk the that that lot footprint the on they we branch. there evidenced still provide and lots in So currently But service, isn't to coming that a differentiate imbedded have. then been people the to having third-party we from of the door. in branches, staffing there have differentiated, significant we've to the they to geographic of our estimation how service are continued service you said as is they but And there course, and by have reason value reports. to That ability community down when is that of has the those no through customers comes

will could who in in Rob, magazine can that. also of I their this would in Let's you actually one heartily publicly. that very customer the one say for be number service. number branches. can't very, can second, is That do encourage say, appropriate, savings, is deduce Forbes number number ranks third and then or I strategy was that's rare. other our ranks reports bank And Massachusetts party from to you this one I Power the on encourage endorse banks so. specific, to New that I'm bank a say, to the I based them bank Massachusetts, of England, I continue two And as I JD -- sure to maintain very closing tell

enough right that that's there. just taken in to to strategy really I've close I've color great up a time, good follow that. up one, be could itself want Well, answer. That and but

guess of most Where to cost-operating be structure about opportunity efficient is way branches structure. the first, of think you I we organization perspective? type within more to as expense creative all the you think fundamentally, an where a your this, rationalize there industry cost alluded that sit points So rates the from to do and on to given thing. need conceptually, to we And as obviously get with the

We network. that do in saying limits. branch have our this gains to We're efficiency not off that's thing be had

branch. exactly still right. outside the the become via is That's to branches technology and efficient in in of There more branch opportunity our

channels, gradually able that as conversations that we're and is efficient. our already make digital to objective our will them enhance FTE we'll of will size -- in And that reduce of can transactions to move allow per continue reduce us we've proven total branch, when added having more the the as to do and customers Our are we're to so of number that allow branches front to we with they can transactions, us. we the do, us to non-value

a So certainly throughout continued part retail efficiencies network. gain is to effort that of the

and I make to we'll give and that is sense. to impression those at locations, select There as over opportunity as you soon as to as them consolidate execute continue earlier, on to addition years. look don't think In mentioned many the we consolidations, we've want certainly there's don't they I opportunities done

great. I've already. too that's time taken Okay, appreciate much you Thank much. very I it.

Pulsipher question from Associates. and go Next ahead. Nathaniel Please Pulsifer is of

program? the the what's of buyback one on have two I shares, status questions,

announced complete. in program year earlier The we is the

there done, activity is buyback has no program quarter. since that been So mid-second

So a reauthorized get any future plan. buyback activity would have to new as

Thank acquired to what Fed, you. to And I the refer addition reserves? second in with you as do the reserves is, what have excess would

cash terms balance right now? in our sorry, of I'm outstanding

Yes.

of today. So we over have the well dollars Fed a at cash billion

That over above is and reserve. required the

that Pretty that this we minimal. it point between on ranges average, At much, pretty is $XX on billion million that reserve required number average dollar million, been and the has in $XXX excess so where of been. have

Thank you very much. you, gentlemen. Excellent call. Thank

Chris remarks. I session. closing conference Oddleifson Mr. to question-and-answer turn for to our want over concludes back the This

full-year talk everybody, we to look fall. a Nick. And you, you Thank results safe and about January. forward Have thank to you, Great. Goodbye. in

concluded. now attending has conference for The you presentation. today's Thank

now may You disconnect.