Bryn Mawr Bank (BMTC) 21 Apr 202020 Q1 Earnings call transcript

Good morning and welcome to the Bryn Mawr Bank Corporation First Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded.

At this time, I would like to turn the conference over to Mr. Officer. Financial Chief Harrington, Mike Mr. Harrington, please ahead. go

documents Thank hope you Jamie. recent in release of the Thanks at section. our review everyone I today. earnings these Both presentation. us Investor joining and available had bmt.com most on website for our you, are a Relations to chance

the We to the of presentation will be this course during referring conference call.

Chief me President and Liam Brickley, On Leto, CEO Frank the Credit today call are with Officer. and

conference during Before historical may call, we this please course begin, are facts. on management that forward-looking based the which advised statements make of be not

statements Please for Safe refer to constitutes the disclaimer regarding information in labeled a release forward-looking earnings statement. and our what forward-looking Harbor more

as made. forward-looking statements. All not this management's are forward-looking update beliefs on The undertake discussed and to based call during time they the Corporation to date speak does are and statements only current assumptions and

with you Commission our For to review discussion related a more complete filings to Securities the assumptions, uncertainties website. are encouraged on and our the risks, and business, of our located Exchange

I turn the to Frank. to now like call over would

of I'd all today. to thank joining for Mike. And conference Thanks our like you call

the began let's COVID-XX pandemic. news to begin response of item to discussion a became the surface by the when January, So, regular In addressing virus, of topic our internally.

Killeen and our a which pandemics. the virus As the our by assessed to management team related declared the the of includes few potential which plan, situation organization convened and Crisis senior emerge, convened issue component and executives to chaired initiated assessment Patrick team. within the impacts That Chief Officer, elevated actions team. comprised virus our across contingency days, our of we began of to members crisis our an incident management incident a of business Risk team management and immediately

to providing have assessing such tasked for situation playbook this in and plan. the management of exact to addition and this. none could management us as the was in with executive routinely following we've situations further recommendations planned outlined While, scenario, pandemic Crisis predicted prepared our team

actions, employees stressing ensuring many remote private additional as priorities on our the included and handle capabilities testing users well to safety remote the our of our network. two customers Among and as

all our employees support back As in insurance office lending, and of client-facing This XX% total our working groups from many of of nearly workforce. wealth, and today, of comprises approximately our home. are

this emphasize to spoken technology want I a about have we've years degree to and that and imagined. several never I complete the made transition investments allowed us past seamlessly to

and our Other last operations convened actions a we've lobbies reducing taken our Annual of clients employees branch week. and to capability branch further hours protect virtual to-date which all our Meeting adding including closing format to and

to things continued to "normalize the in and April", As to meet situations. crisis began team frequently to react specific monitor management

vast our marketplace and reputation in the While changing, risks financial in the operations, we largest are areas. current believe the risks are ever and health, credit,

risk operational our focal reliability, an of standpoint, the and business key client personnel, From community are points. disruption, to meet cybersecurity, third-party needs inability and loss

the to works along quickly respond Crisis alongside management group the management and we hurdles works to -- executive effectively face. team

to demand reallocated have and increasing where of We the clients resources necessary communities. across organization meet our

financial crisis. Managing before starts well risk the

-- strategies in liquidity implementing basis. in frequent evaluating We testing; daily including our our a margin, sound to protect on and place have stress position position practices located

navigate successfully our to is leverage now financial and this unprecedented job environment. strength Our skills to

conditions economic invest funding to We our on including to support rates the business. and meeting keen sensitivity, interest continuing opportunities be to have in obligations,

the credit will clients profile Officer While will market. their discuss that have our our Chief momentarily, Credit we add engaging I with to been very Brickley, Liam proactive response

acting segments of portfolio loan We where our and are aggressively needed. risk monitoring high

in clients and which is Mawr need. we has to we a legacy Trust Bryn we helped pandemic working the this Banks those help to reputation and to and very Our continues hard share. one forefront are great help pride. all in are our at XXX-year build which of take communities

we're over the to few Today, working our the last paycheck has weeks clients One been program. SBA's focus extensively of create protection for and area communities. managed solutions

thousands million the been requests close Friday, with of and XXX over for submitted. bank. authorization funded dollar applications SBA As of be through amount total were we X,XXX applications of over received online To-date, have the over approved a $XXX to

and Although implement handle been we received immense additional activity program proud funding. we the of and needed team to in to together how exhausted, the we're has this a influx to the funding case program's of our pulled receives applications process continue process design

programs More the presentation information or be our in website on of found on investor can yesterday. released relief all are -- available our

new brings in other opportunities, our day to the come organization's than confident ever. are ability and challenges each While stronger side we out

I'd like turn Mike to discuss results. now first to over to our quarter

Frank. Thank you,

of of the COVID-XX ever by first XXXX, diluted losses the implementation negative economic for was our is the quarter posted brought of of Main and economic path recording we share. driver the uncertain. future pandemic. seen, economic the is the of for current and credit provision conditions any loss highly of For loss associated $X.XX reflective unlike per activity experiencing the We're CECL conditions $XX.X a the of on we quarter net million, have

purposes in modeling calculating historical not data relevant loss credit be may Credit losses.

losses of exceed degree great is Pennsylvania to driver of variability. allowance shortly, expected highs to key on example, historical unemployment, in model a is levels normal a as subject our For return

such to stress of CECL in the allowance in will data believe as activity economic to factors modeling unemployment, arrive and under estimate testing as guidance, of of estimate the to spirit accounting The the our a allowance credit estimate by as subject represents at the management that date, of be reasonable to March becomes of qualitative path clear. team stated XXXX. as data assessment with its loss change XXst, the prescribed efforts We leveraging our future economic historical as acknowledging losses reporting made the combination and correlation

strong the we X.X% increase during the prior the growth and interest aside of activity income saw our rates. quarter, Setting to discussion, first effect mitigate margin lower We defend quarter. use loan interest the business quarter fourth the X% net strategies from from provision the expense help by which was our as increased

Our income be to source earnings bank. a consistent the of continues for fee

meeting wealth quarter. fee grown the of off fixed over have the the the assets As in impact years, market sell late

environment As to flat expenses $X credit unfunded with quarter-over-quarter, a loan in were reserve the anticipated, the pandemic. commitments the our non-interest for recording of risk despite the related million associated change

the costs margin $XXX paid Our risk million margin reflect in inherent the the over from quarter-over-quarter. reduction X.XX% applied we net X.XX% result the loans tax environment. and thoughtful on equivalent pricing deposits of on manage lending in This this interest direct a to of strategies to modifying increased of is to including

borrowing position to Federal portfolios a view daily Federal basis, and to Home with accessible options in us more at lesser the overnight significant degree also we had liquidity majority our Loan in the the short-term The -- a market. We has We Bank our Bank, our on and frequently. Reserve. position liquidity the evaluate available

for We made also the channels, have Fed deposit these the loans. multiple protection additional options an of funding for other has paycheck to support liquidity avenue introduction but available wholesale program the

expect this We funding. of ourselves to avail

at test, the manage needed capital various in to liquidity a and quote the capitalized. stress inform contemplate of source our Capital remains obviously a and above deemed under levels normal We of the corporation and quality. our economic internal positions we most as and it's be of be amount as well and bank levels also capital times. And our is fundamental this capital portfolio to helps scenario. we well investment modeling, both very are by high utilize severe scenarios, liquid Our will tool living understand stress targets we the testing liquidity This they the scope to circumstances. the put modeling

COVID-XX, of light share At surrounding of in that repurchased the point, XXXX. first buybacks shares we had In March. the quarter developments XXX,XXX during we brought

capital the positions and evolves, liquidity As actions. we reevaluate capital decide on will environment and

our dividend, per yesterday. may approved Regarding share $X.XX seen, you have dividend shareholder we the

in quality in plus slide experienced off I in where liquidation that environment. the days X, at quarter we asset exception these elected of XX experiences the with is current all in on anticipation anticipation credits will -- fairly charge on stable credits the note least to should distress leases

provision the the on the shown institution. more implementation to slide the the CECL, CECL This detail regards increase alongside, depicts depicted only adoption allowance changes costs adoption in in and XX%. the represented increasing X, as related major modest to Also Turkey allowance of with as January a of a of

The it, I tenuous. a the be Subsequent more the is on and the noted also reflected depend economy in calculation commitment as reserve to in for emergence much January increase state the unfunded with quarter of X, future end, allowance of as earlier. can this

guidance as for the relates the over to it turn current note we our that, have all of wanted business Liam. XXXX Before I I withdrawn to to given uncertainty environment. activity it

a Brickley bank's to pass it I'll And for discussion Liam our with Credit off the loan Chief portfolio. Officer,

has Mike. Bank been conservative and Thanks of it Bryn a to environment. focus always Credit a credit. as The Mawr responsive, has consistent key economic for regardless reputation as the being always had relates

considerable every during to uncertain day new help and clients currently is Our the them existing of period. of length team spending time, this week with literally working

portfolio our is XX, types. both slide on outlined and across property As diversified borrower

actively to focus are with to current areas that portfolio those credit of all more vulnerable review continue We conditions. on segments the a market

commercial with working non-owner business real Specifically, our segment. occupied clients actively commercial we are our in estate and

for program consumer segment. outreach We also our have an

the has that for a bank roughly Further, lease of accounts loans. X% portfolio total

We space in segment partially is quarter. Washington XX by D.C. economic borrowers the and the diversified in for borrower, given do the states this conditions, the provision industry to While susceptible losses which in anticipate in all is is with reflected economy, downturns in geography,

the in are real our retail, spaces We across clients commercial hospitality office working flex, estate multifamily and business. with

sponsors, are projects cycles. it's with recourse relationships supported that, worth their primarily prior long-term economic And noting we many have We lender. who through

restaurants, in was significant As granular entering types. bank LTV’s anticipate all to vulnerable including we portfolio reasonable indicated those as and and energy, granular areas. modest property the CRE The do on with the manufacturing slide exposure and losses not industries, XX, across crisis,

a utilization our in have We significant seen credit. the increase of under not line

Accounting usage line times. the Standards XX, $XX credit consistent December XX X% In several programs we've Federal million. our The From programs of by and relief assist developed with Reserve Board. are to clients guidance these March approximately Federal response through or through issued pandemic, by the hard the our increased Bank the to commercial

in with real a one Participants C&I, at and the come the programs conditions commercial time model. our to virus decisions from estate our business of their and current based deferral the small client portfolios. business on federal on Commercial the the client make our impact

small to structure of all modification period and commercial businesses, our an a offers payments or for interest months. only of For program deferral three

have we extend allows participants, one-time prove date, conditions for to bank total approximately which over additional balance that with commercial an of these us deferral million XXX necessary. programs. option loan to these of a With taking be if months, deferrals three $XXX a To advantage

our Fed holidays. $XX clients a short balance guidance full various have with term consumer by million consistent Fannie XXX total payment Mae. of offer payment To these For and month clients, six statements consumer date, holiday the we loan utilizing we with

We Protection are the earlier. also actively detailed engaged Paycheck Frank as Program in SBA

Mike us are none have an the seen in we of that As mentioned, living in environment past.

up vigilant the through this leading losses. in and environments. be has allowed their navigating positioned remain future confident However, We these experience years and our our conservative in well nature to management us team, economic to over mitigate pandemic, uncertain to

And it Frank. turn I'll that, back to with

up the you open thanks, With think call and and again. Thank Mike, Liam, that, Thanks, questions. we'll to I

the to back it turn I'll operator. So

[Operator Instructions]

our question. first with Michael go comes from ahead And Perito Please your today KBW. question from

guys. morning, the good quarter. this call Thanks hosting Hey, for

Mike. Hey, morning, good

assumptions. I the mentioned of Mike, on, that provision assuming a in quarter in work or difficult credit credit Mike you maybe and know, prepared but you with thought the reasonable I little little here discussion see if kind that specific trying I how break I of are some today, out it bit to the you over thought and wondering, you know, to you guys it large the Liam, about it'd of of kind -- the want that the here kind are you new helpful know, remarks, to start the helpful, expand drove more realize you know, maybe, was economic the guys we're but on some dance assumptions more of it's you a could to you on think exposures be and out I figure of was assumption just a slides relative maybe provision those

kind them and how So models we of our going forward. can could and they see compare ours change to

Mike, in welcome to he Sure. builds CECL to our unemployment, do is primary it if Why will was as don't and anything, that. I The then Pennsylvania start driver I Liam way model let, wants add the unemployment prepared in was crisis. we're rate last I right the its assuming back which which max, achieved that now, around is financial hits remarks. X%. that is that mentioned in And And what my

it assume of are about revert a immediately tune and quarter conversation now. back trends X% it it stays we to So, a And just almost the is then mean, to to where ease long-term up historical to X%. for starts for there around which they

next down built that's is correlated macroeconomic fundamentally of to and correlated So, purposes. assuming factor was quarters, stays unemployment trending unemployment thereafter the six we're over then modeling at that X% was the model the X% to X% off built that for and highest then And charge-offs. it

allowance which the generates that then And for the so charge-off here. of trajectory for -- need the of displaying we’re figures provision that figures unemployment

baked these we as in are into model place. holidays other thing it On pay the we that recognize the

going of next charge-offs quarters, these not few a the see in it's because So payment lot likely of we're holidays. to

will of some of chart happens that So, activity later. also

that So cash a we as well factor flow in from perspective.

And anything that, think into other Liam, heart have add? to the you want that's now than you what's what we're right really expecting model. of are at factored least at I do the

beds The our benchmarking years model. use XX thing had of is kind would space. C&I out minimal point firm in last of we the frankly, peer the fairly had replicable development I model, the And has crisis any building modeling in build we last only the because through other in data the losses the to inadequate CECL

is in driver So the some of here. downside assumptions another that

That's are That some also that. leases built the Liam. also helpful also that's of efficient, -- have

Yes.

the range sense follow-up, about and plays term but you guess you know or year today of but assume kind made as I outcomes, Now react there's in think then stabilized that into there’s moved have over a to so? you this level the of so near how is and guys I down this a little makes does that how that's the later just if guys. to helpful next model, correct, we unemployment a charge-offs. oversimplification, punched the expected we're assumptions if wide maybe out then Obviously, if trying CECL reserve depending on possible are rate the would

work I’ll But was required go answer. given there's their -- what that. turns provision if into that through reality projected the portfolio mean, the we basis so way amount the here the Mike, so had a I forward that's last. of much that much then charge-offs to would on there's variability related

know… I Yes.

impossible That's …and because the just know right opinion. forward statement it, now. my it's about to

we we and is the landing did. embellish my to or two we where coming allowance So things made and that should this this Also I probably compared prepared on just testing say my related what we stress wrestled as also in up comments result with to do. in comments

check and of or a third-party, that's outside a distant environment. here just stress seeing view So, a we what separate this this do a lot another Compare but testing of of we're process. results, as those a model

did retail some sectors seeing for of the of that go uncertainty categories, overlays metrics into qualitative and forward were And would order to and profile, good some the so basis few example on you're some we we nine especially the on on a a here course, did few retail slide to sectors the of focused a the that. adjustments a related on that to in of just the of so credit categories account sector, be add also

And topic. just last the one credit on Okay. then question

materialized given kind yet? markets estate any not real seen or in significant deck, has commercial have on? real that everything going Just in values really Or of you guys your changes residential

to brisk early was February make very Trading up the too through assessment and then an through just there. went of activity did end It's stop.

have So, the play no point and price to on we anything values data to is now long-term right going pricing implication on empirical out, but softness.

was the in but in pretty then just move occurred And a rates margin. Okay. quarter. dramatic on lower the quarter, that obviously gears first It pretty there short-term Mike for you one last just switching was resilient this question

dynamic kind of but how pursued could play liability legs dwindles, I on was out and some spreads of around curious the repricing that there any thoughts can near-term maybe know so as longer presumably opportunities given some had been you if although, asset just might we everything I updated provide just pressures, I credit end quarter? margin, was curious horrible haven't some at the first commentary you the saw be of

the length depend what they be think I being the the sheet like and yield actual the loans have to on on ends PPP dynamic we're and average, of those determine being one you those repay. asset of assets, how the lives will which it's Well, up of added our side, that to going the balance quickly

we're you on thought fall the I guess, about out sure it maybe further down deposit thing funding that -- moved in relative question call know we many related not the your lockstep widened to was maybe LIBOR to it than surprised would really you of it actually funds. hasn't but Fed has, I’m

seen So, much as as may kind that's deposit wholesale holding market we we have thought. and haven't a higher bit than as reprice little of we pricing up expected a maybe

because were might with I if that I said liquidity now, think of But we as the some thoughtful right institution we have right very some to with we're lower that to being So, chase costs. deposit -- potential obviously out about now. normalized, want that

in rate. is deposit costs expected whole still than So supporting the the high have given kind would fairly the funds decrease of higher marketplace we a Fed

soon. more guys. this for your the I and stay call all and you hosting you Okay. and Again, families thank quarter, talk hope That's and safe helpful, employees

Mike. thanks Likewise

Mike. Thanks

& with question question. And your our Please from go comes Zwick next from Boenning Scattergood. Erik

morning Good guys.

Good morning

morning. Good

CECL based follow-up made level, off I mentioning down a it unemployment rate model your average. which First, that and that as being X% commentary you over the long-term can trends kind kind about on the Mike time it Pennsylvania if of to of you maybe see is

was curious average call that or were was the this as point look and Xst running if some it kind X.X% I your here? that's stats point X% year long-term of starting you of I'm the more view kind you that's had that given kind at it using, where at a say of just range also were of as that what of January been of

a good question That's Right. Eric.

revert was that model point out the held to begins to the the January yes, of a was then that that so And held So when long-term we number X, your adjustment then so that's time. And our the holds model point -- how the path was starting it current is in we point just what the employment average of that that as rate time. -- in on for point at quarters. we structured made

Okay.

a like been so somewhere essentially X.X% that So, we've kind range would in it of have that,

it's is you average think if is the to long-term something…. it, though number get I Yes. I you Also that X.X% need check it could but

Okay.

So, were January average X? using you of the as long-term

Exactly. Right.

you. Got

Okay. Got you.

actual at… starting to We at were long-term Yes. trending the

The current, yes.

the to clarity Thanks Okay. there.

a a using methodology. we’re reversion -- It’s reversion

current reverts based that So employment back period with the it around a and on to starts data mean. that select the its we it time reverts mean. to historic over of when And does

to gets in of So data Pennsylvania we've model. done a of and then the back study employment we

are that That's for rate to where AUM fees on management average a going think wealth that forward Right. or could management I of in that calculated kind with Are period based trying an what XX% gears on quarter? market approximately and wealth and value. about the account Switching be run fees regard balance it's based think of helpful. to those the about revenue looking at

the majority end. Well, -- are of a quarter focus at the

these are market its So and function do a the we calculations intra bulk the for although and majority that quarter based AUM. quarter, of end the quarter of of

PPP kind life in the on mentioned And depend of net terms then of loans. interest SBA Okay. that impact kind of the average the those an from margin, of in will you the participation program

qualifications that Will accelerated do the fees? as that being through record you for meet the though forgiven, those For margin come will any well?

expectation is -- -- it'll come the now, assuming it I'm through right Yes, our will margin. yes,

will would accreted collect loan paying. So, the portion then accrete to will be fee as that that fee the pays like fee, is margin. of FAS-XX that be income the it loan when the off, treated And we a

up as So, being if or or this for loans, we'll we fee. day loans XXX-day present forgiveness XX record ends repayment, them that

for so questions. you Thank Great. my taking much

around about $X.X But we're to you fees. million that, some give statistics in at

fees SBA, We we from the those collect bill. to expect haven't but we collected what once that's present that

you. Thank Great.

Erik. Thanks

question ahead next [Indiscernible] comes our your Group. with Please And question. Joe from go

everyone. Morning,

Morning.

Just this of projections sort unemployment was rate the questions Recession the during right? just building Pennsylvania for so for of in Mike, prior prior situation. any high and on drove unemployment Is confirm the the that Great official Pennsylvania to forecast not your one that specific

X.X%. Correct. Yes, that and I think is number

this are projections there from I unemployment And local various for respect someone seen point then this any you forecasters, you've guess other point? Okay. any Pennsylvania at at

not agencies. We from -- don't or we the government seek did forecasts didn't of -- know have we there's any any

consensus The -- four the organizations forecast, for Joe. specific of make one at big the worked other to available we're that Bloomberg to the Pennsylvania, is does information hey, looked assuming your no forecasts We with to this a answer like had forecast. what to sense at but accounting generally see just we questions that relative we looked just was from

And have the additions some that reserve or macro reserve banks will required I guess from to given Okay. here. topic, then if on projections the Mike, be were situation same the worsen to that

reserve So, have that say that build some wrote or Pennsylvania or think some reliable XX% you would to expected say or you for goes unemployment so? that projection assumptions XX% is do you

no. provide prepared Not we're to that Joe. -- Not

just model that the just credit solving for at its get the -- you up get have came We numbers I losses some in system, unemployment multiple I is experience we model you're our it we -- value is trouble excess of we starts this, weeks. the because up has versions modeled ran we back are into of say putting model recorded as our that but with, going or -- this the anything when reference the that's mean, least will to with to team model Give into this, for are lose my fall has on. point been to no way ever --

roughly say by XX% [Indiscernible]? projection you of would that Is the used? the was percentage what provision unemployment like And driven you allocation it

I'd feel of Yes, say to in. it. say -- I'd Liam, free two-thirds don't I weigh

I think just stop there--

think I that. with number, of directly two-thirds the Yes, roughly unemployment it's and were possibly than the bump-up actually higher correlated

Yes. past this it? kind projection, But you're Mike certain levels if I in saying at mean that--? the are two-thirds and XX% apart of model forecasters take -- unemployment you reliable you double the allocated the provision that quarter falls like is you of

Yes, are the Joe, that rolled know government here. we impact I many the of think of programs out don't the wildcards; being one

one like for Pennsylvania be some teens, this mean, applied has the highest just its in is I percentage the probably of reasons -- itself unemployment to statistic I mean, I tend So, to unemployment, of fall number the think that. state workforce of we -- right? unemployment highest

quarters. So, okay, just it how let's provide didn't an the a we rate, plays back trend and XX% overlay let's assume over perspective were but to apply have report default these government support many high, applied, just however that out. well, and no, on down from is we programs The use credit that just unemployment see

factor all we in being uncertainty that, and much best stimulus the related we that's looking the for this trying why so to can. that the use for -- that's methodology generally, the but adjust situation we is that's this, provided are So,

you. Got

take your the outlook the say? the near-term bulk took that maybe seem wealth for in the not quarter, This then that the overall to or it of that And to maybe you comments in as is expect fair Okay. from first you hit business, would business.

really itself -- QX and impact growth, in AUM. that the with Well, net by the market asset so swamped growth, had well downdraft business the client, on actually the by just net general the performed got that the

And the really pleased very So business good. we're was with that. activity

see then extent stabilization So, like we into of quarter, did to quarter. to the some pushed season, tax those seizure. market should also And -- first you're might we that or the we're in this some again, don't pushed I normally out the see dollars it then the future we be the time of move think prep that, going

certainly But when I and we've we would from where don't of I hasn't March, whole the one. us that maybe there a would end been it bounced think and lows we back from move lot were, were exactly at don't stabilize the know but

Yes.

that's was thing, reverse this that market value, that's on So, to kind mark is declines market a you account hold, the I net-net same maybe, it's of a client where too why maybe think activity quarter the object XX% It's increase bit. get a and market the or that simplistic?

Well, your is hope in new for sound. don't the best lows like test Yes, we we the CRE. logic

Whether you the then And one conditions might for Okay. the that me. economic last lead to reevaluate dividends?

times we or capital and paid we that, of We the look our feel at quarter. the this. I in. about for adequacy now, Well, quarter, this comments we're a capital good mean, we're just held going dividend that going to position work the like We're right to normal times every on very that. around and

gone got round cash. dividends. million XX holding have -- $XX lot of to should cash a numbers we've lot of a at of is There passively company, the pay So, people

well. my though, deteriorate from then. that evaluate think I have already as opinion than just to going on that a to things more But, have Frank here, they pine something then we're

with agree comment. Yes. I Mike's

think we have to this see want point. things how just to we just I -- play out firstly,

Got Thank guys. you, it.

Thanks.

Instructions] [Operator

go with your Montgomery. question next Janney Christopher question. from Please Marinac comes from Our ahead

Good morning. thanks. Hey,

morning. Good

And classified quarter, have that -- see we What risk guess where give then the on just I us see that? given C&I. leasing of next and offs terms charge-offs when other grades and took less question. follow-up you go does charge now. a So for given in you the what that should those you portend

Liam, that? to you want take

sure. Yes,

distress QX, programs in because not anticipating weakness. experiencing clients volume volume that portfolio. That's payment holiday largely are and leasing high taking advantage the mask notably charge of the We underlying true a offs in most of potentially of will some

in evaluate went terms in a don't relatively foresee good we We the And we shape. in change activity. class, to the clients larger So, charge-off of our rapid crisis in credit consistent both risk on themselves. with will make value. collateral flows basis and view the real-time to cash the a facts toward adjustments we present as rating begin their underlying a And

adjustments So, class when no we'll for what be quarters right are impacts now the client base And migration. to last the credit the in. several economy see on to have significant made facts come with been they've consistent based about and how pretty start they the numbers will

Okay.

So, you-- do

ahead ahead. Chris. Go [Indiscernible]. Go

you do into was of going already the kind here you've drive built or factored about I some to just of for ask downgrades that expense XXX? what provision further

Mike?

our it's our XXX think quarter say any that two. -- I takes account the the or next anticipated downgrades in -- into adjustment fair to

Okay. helpful. That's

I'm sorry Mike.

you were were You starting say. to

that that that -- holiday, we they was they perspective. of bit wanted weren't We with delinquent ahead get -- we proactive little out No, you -- sort category that as of knowing off from just mentioned on were so a mean get provision just I ahead leases. pay higher for because noted -- of some just and were because to out those already leases you to these know Liam chronically this a of we qualify we and wanted charge

to kind you through? crisis of supposed do started? of a I quarter some deposits that then you go as have were the the you deposit know And sense had retention leave before

numbers out extremely base that the look Yes, large we deposit the deposit at was stable. you otherwise variance we to high our really going that's look at is one we a and had that's was knew roll if had -- at that level

about but to monitor market, things and competitive And as do we're thoughtful the were that I market. continuing able the to some pricing monitoring from noted our standpoint, we we're being

something and but see stay we there's really liquidity not there, We're price trying it's in position. additional to right we're now. more ensuring that liquidity on focused strong that opportunity optimize a we'll So,

Thanks our Great. questions. for taking

our And next a question. Perito question your Please KBW. is from with up go ahead Michael follow from

Hey guys.

some fairly done one you expenses your that Investor Day. of to environment? in obviously, going that stuff you update quarter-on-quarter just in operating were the prepared guys Just given and revenue I outlook with with guys want the that follow-up. of on your comment curious out about I an made was I and the technology forward. was expenses on the has already you flat changing quick the Frank if line kind think off expenses rapidly surprised especially in kind remarks me plan laid ask paid you

-- you I let there let is a me the me Mike, Frank, was on first the that obviously, mean the was quarter hit XXXX for to just Mike, technology know nail we expense build that the leveling for the said I focus this expense sense a after -- the hires couple investments with you as -- we off. I mean say Mike line which that paid in -- made earlier in want of in focus had you head out the

facilities these maybe that expenses take dramatically for for going -- while little areas. to have change much this and to think or have our just shift a a we focus, environment we and for of it's impact all it to I going doesn't number the operating out It how to operating but is of play on an

So, you -- Mike, to Harrington add want Mike know if don't something? you if to want I add

couple but that's other a We'll -- that where and been I innovative to did this had we see in dollars, that's and was million that remarks in the line would reserve In so for expenses wait have have just quarter-over-quarter. quarter prepared reserve very few about exactly No, right. $X million, just a lines, -- that down the is I my That in a note in things expense we the go commitments. I the that operating unfunded was dollars embedded down million made -- those think -- Mike.

any was some of how us quarter right on as can elevated we to going is forward? you level not every sense is there that that think -- give though or There

reserve? The

Yes.

Yes, I it's a mean, that's mean normally few that something dollars, say only very don't I number. minor thousand a quote like-- I but that, me on would hundred

--XXX on average?

million as on only and that December under been to think $X.X would number moved static. was that's it mean slide up of have a $XXX,XXX. XXst nine, I That's that fairly I now. CECL slide We up

any I environment current additions right now. would -- if for been there wasn't have would have not to -- operating it that this hardly we're probably the in current

obviously in line most could first the that change guess it other expense a but quarter, million commitment -- in I not least So, there's at unfunded recur. couple will that it the likely the of build

Yes.

Okay. good And that. you feel about then pretty generally still speaking

ahead. Yes, -- go

interrupt. to Mike Sorry,

to could the confident accelerates say really that I there's items that made going fairly position of the you rest just that outside putting the you growth feel meaningfully reasonably COVID-XX maybe investments on and basically nothing down impact. that of outside was still good the that in you should pike expense there be

point. we at see this If anything don't

Great. Thank question. taking you the for guys additional

problem. No Sure.

showing at back ladies call like conference for this turn closing questions. gentlemen, any I'd the and management I'm And remarks. no to to over time, additional

uncertain hope to coming and to Frank be I going listen to call this our Thanks. in is everybody today. again environment you months. to the healthy the all forward. We We talking taking everybody This will safe forward wanted and just time in for conference look to thank

does today's conclude Thank joining. Ladies and call. gentlemen conference you for that

You now may your disconnect lines.