Civista Bancshares (CIVB) 5 Feb 212020 Q4 Earnings call transcript

Good day, and welcome to the Civista Bancshares, Fourth Quarter and Year End 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. Please note, today’s event is being recorded. I would now like to turn the conference over to Dennis Shaffer, President and CEO. sir. ahead, go Please

President XXXX is I President you would our full us This by joined Civista company; and Lending Rich Chief Senior for executive Bank; the Operating bank; CEO Bancshares, for the members and Officer Officer of team. and year Vice Dutton, and Parcher, quarter and the Senior like company fourth Chief of call. other our Chuck Vice Dennis afternoon. of I'm the President of and today Shaffer, of joining earnings Good to of thank

disclaims remind Before statements that results to we any on factors from begin, future of are I factors which in different would by implied to results involves company's during materially respect any or the be the Inc. statements. conference like website. obligation are future performance such SEC forward-looking call. These forward-looking Various to risks contains company Bancshares, cause financial forward-looking uncertainties. statements condition you the any Civista could filings, call available actual to the made and this company's with that update and discussed expressed The

to as directly refer as press contains not which supplement, measures, to substitute measures. and well of may other measures. non-GAAP financial GAAP release the be GAAP are to today, the the to intended management Additionally, available discussed non-GAAP on website most comparable The but our information the quantitative reconciliation

million may morning year million take increase $X.XX the for of or of an fourth this any reported will would the Civista $XX.X $X.X begin per At of website quarter year fourth questions discussing we full will earnings like civb.com. conclusion XXXX share, diluted quarter. We represents have. quarter of and call to I were results, it which by earnings remarks, which Civista record this Bancshares to This you the call. issued fourth our over XXXX at on morning. make Again, we my welcome available Bancshares and prior

per compared net full is to for year were million Our year-ending the results a $X XX, which of income $XX.X Decrement slight $X decrease XXXX. million diluted share or of XXXX,

Our the XXXX pre-provision company XXXX pretax, for million earnings million represented has and earnings pre-tax compared was for highest ever $XX.X our to pre-provision achieved. $XX.X

capital represents strong continued core XX%. $X.XX position earnings quarterly dividend our increase earlier generate our to and of a allowed approve ratio Our payout Directors, to to ability dividend of share month, $X.XX in which one this by per Board an

us during noted last we allowed the As share resume strong position our third repurchases during quarter. capital to call, our

the nearly for XX,XXX or During during strategy. price the of per shares share. was $XX.X total share. quarter fourth outstanding the repurchases our The weighted XXX,XXX approximately shares at December repurchased per of of integral price view part management XX, we We average for share XXXX repurchased X% an XXXX average $XX.XX million. shares an Shares capital at $XX.XX year as

our December of was XX available million May. which $XX.X approved last we repurchase from As authorization have

was equity year, than the which assets average Despite and quarter $X.X X.XX% the was continued year. interest for income low X.XX% rate for greater than increased the XX.XX% million the linked return environment, and average the to on $XX.X million return quarter our Our for for was $X.X quarter net greater million, prior quarter year. the the while X.XX% the and for on

X.XX% to it linked rebound quarter. did X.X%, compared to did X.XX% contract for XXXX, XXXX margin for compared the to X.XX% our in While to

loans increase them to net have same with Year-to-date quarter XX.X% million The continues Non-interest year. quarter Our the the non-interest environment prior the deferred of of $X.X X.XX% our fees made quarter improved Without linked million our and positive a for interest to $X for income quarter points our and X.X% PPP is a for our income have dollars, to the XX.X% totaled basis X.XX% impact provide but interest across PPP in to the or the the loans income the on do the year. accretion for PPP loans of basis million by compared earning to X.X% $X.X X.X% drive they markets and an would loans XX points in mortgage increase rate associated compared average loans, the negative low the of up for $XXX,XXX average well. margin increased our and as by earning year. X quarter. footprint. margin. This

the gains greater largest than XXX% over quarter on driver income. of the quarter the previous of on the of $X.X Similarly, the During year. million sale year. $X.X non-interest XXX.X% than mortgage higher or the million XXXX of were and linked gain banking year-to-date sale Fourth loans mortgage greater loans was XX.X% or than quarter mortgage or fourth previous was the million $X.X

an quarter in $XXX XXX residential $XX.X the compared the million to year. quarter to average in the year. premium sold sold million basis million compared of mortgages we million linked and $XXX.X previous at Year-to-date $XX.X During the million we points mortgage loans in in $XX.X prior in

and in into our strong. charges decreased pipeline compared category service wealth million management to charge Overdraft income, mortgage service head remains were XXXX, million the decreased income levels. Other charges on included accounts, very is non-interest during deposit of interchange $X.X $X.X fees. which we significant As drivers XXXX frees Service XXXX.

behaviors we personal the customer pandemic service and deposit checking customers and the their pandemic provide stages of also to early changed charges relief our accounts, the During on waived fewer during to accounts customers. overdrew

when fourth consistent both both the fourth was quarter linked year, and the normal income higher the more with year. previous quarter Our of the but compared was quarters. $XXX,XXX charges service to third and in the prior returned fee Swap to levels

year X.X% see flat linked an of of and with we compared commercial mortgage going pay PPP each increased expenses to mortgage modifications, that increases annual over on was decrease loan attributable expense associated non-interest The to the was commissions activity in and April, While centered the to during increase SBA’s quarter, the related XXXX, time primarily to increase affect program. loan compensation our participation did year-over-year X.X% a for for quarter. the which activity increased

Our efficiency respectable year-to-date. for think associated was to our size ourselves we XX.X% a At excluding low linked XX.X% with ratio current PPP, as compared very efficiency income organization. of XX.X% and quarter and a ratio XXs the

focus our was XXXX aided on non-interest related some COVID expense the During controlling changes adopted. of we by

million the the growth portfolio and Excluding That PPP rate for quarter and million respectively. annualized our XX.X% loans, $XXX.X loan $XX.X during to year. equates an of increased fourth X.X%

every production market every which We in are our will commercial footprint our category. pleased across and occurred loan spread with across

difficult project how larger will portfolio, we optimistic. economy is in however, it continues, specifically, our and the remain grow more pandemic to the As quarters; loan future

at Our of loan originated December in With PPP SBA pipelines $X.X approved X, we construction XX. million undrawn million remain X,XXX consistent loans respect million. over in loans fees for to with $XXX.X resulting $XXX.X

recall the the principal $XX.X XXX out commercial forgiven. on in we fees accepting we in remaining customers loan to loans on began to XX, modification, XXth. X, very with proactive that loans had the January took will With June XX of In mostly Of offering of of business. to their totaling CARES Through on had continued Act time day recognize modifications XXX, respect applications COVID-XX a $XXX.X and of received impact regards million total PPP approved we a for X January million. XXXX. with XXXX over XXXX, the rolled of pandemic Since was December you with million, $X.X million gain applications funded loan of XXX our XXX be applications as been related our $X.X end by to understanding As a PPP Civista of and approach forgiveness XX. those recognized and represented the we balance approved for better commercial XX.X% which expecting $XX.X SBA were the of portfolio million the at of to a

$XX mixed making their in December in restaurant concentrations As $X.X a most we mixed Deferral million hotel, in loans retail million XX in $X.X office The of Payment are Programs. XX $XX.X loans X% payments. had PPP total million of net have result, in and million loans retail of totaling At $XX.X loans or loans. largest contractual residential million these resumed

efforts and the working them are the as our in with of couldn't part running these X the basis be provide programs, they to our these employees times. more All helping and all pandemic. the with bank cope the customers of on of just commitment need that well our services have CARES as banking of X, into trying modifications proud day-to-day programs, that as put I customers well as our PPP to a these as PPP the

in day in our beyond modification. of to automatically the the commercial the nearly loans $XXX million loans a quarter. quarter increase initial we During second that the from each resulted third This XX quarter third criticized requested concessions downgraded

pandemic XXXX. our criticized million. with their plans they million which to $XX.X all totaling $XXX.X said, customers million hotels have of largest December substandard our understand the been We portfolio That and operating to The better increased impacted includes ongoing loan how and meeting forward. as move criticized by continue $XX.X loans classified loans we total for by segment at XX, are

ratings to losses. risk have While specific see we defaults many yet loans, we loan have or on increased downgraded any

for on and continue associated COVID-XX loan qualitative factors impact refine uncertainties review the we with the the economy, model. allowance to our its Given and the in loss

$XX.X million to million $X.XX we loans year-end provision provision of from of for The the expense at result, X.XX% a for would ratio ratio this X.XX%. the increased a expense loan PPP X.XX%. have As Exclusive allowance the and a loans, been our quarter recorded losses to for year. XXXX

to XXX.XX% loans at year the of of Our XXXX. XXX.XX% non-performing losses allowance the also to the for from end loan end increased at

While current portfolio uncertain credit of historical model very adjustments the monitor our by economy, and dictates. nature making our standards, will these we given further strong the metrics economy, as continue to our reflect

meet delayed the As the not for XXXX. guidelines of adopt until reminder, to it did will be we a and required CECL implementation

million funding the the increased On XX.X% year. $XXX.X of our since the side, or deposits beginning

or growth of checking and to the our came our $XX in business allowed The million deposit where While $XXX.X XX. us category, deposits and we December increases in PPP reliance were from loans million in year-to-date the have our savings increase reduce personal checking accounts, seen since deposited, XX.X% the increase account. our $XXX.X deposit advances came or of million by every FHLB in proceeds

all we in facility the quarter the chosen liquidity second of we of the to digital first year aimed of great on of which November. through core at tools Among the be now customer to to originated. we assembled with. the another the These of we proud with our million continue will during we our quality process, adding services brought navigate management improving second assist from customers commercial consumers. borrowings that are initiative were PPP PPP are clients, XXXX, In services team earnings. communications, XXXX have during treasury the PPP a experience to funding loans customer continued and and $XXX.X how borrowed I pleased as how challenges us, with retail that deliver of as have of rounds addition, digital we improving solid the spite transformation In for to well helping our number a focus enable work our accomplishments our to customers our the our repaid through deliver better

quarter roll to many of digital new second tools the expect out XXXX. of in We these

under planned to we months. never especially over All would learning but and really accomplishments conditions while endure last happened work the for, had nine of we thought these

industry, continue will that capital in am balance months to well test a several next the positioned solid banking with larger is I confident levels business the strong sheet, the Civista world I and to discuss be lie any diverse the to your may that will Thank attention have. for you meet revenue afternoon challenges this questions happy you that now and ahead. streams While

question Thank from go comes Instructions] you. Michael KBW. Today’s [Operator first ahead. from Please Schiavone

Thanks questions. good taking my afternoon. Hi, for

Hey Michael!

Hello Mike!

April have outstanding. your still repurchase share authorization the you guys So majority of

I million said pretty challenging active during and pretty you is $XX.X think you XXXX, year. a which were

to in any there pace is continue XXXX? of reason we shouldn't So buy back strong expect that

we've remain level strong credit view deploy comfort capital, we with long great a I as way think a our I our know pretty good got and that you earnings as to Yeah, quality. think as our

I see some we’ll to continue with think activity our – share there continue repurchases. you'll to

down. us on and this tell any still funding experiencing Okay, – your any thanks. still seeing, you then there's if keep yields the loan driving still much And can at pressure opportunity rates then on the side the to point, NIM, if there's on those how

might overall, idea where Just get from of NIM I’m trying an go here core to excluding PPP. the

Rich on yeah the deposit Chief job maybe Dutton a Okay, we've loan can margin. comment on good of Chuck the pressure done I’ll the pretty comment protecting yield. the Officer on Parcher, Lending have side. our on

to about… a little or bit want So talk you Rich Chuck, do

of still flow, being especially we’re seeing competitive on markets, really down we're in bit the seeing Mike, so of of pressure there pressure. Sure. that Columbus some larger quite them, the a one markets, harder Yes, deal

a We’re people so as sheet are a we’re perspective. we’re to balance hold if between bit you the margin, we little that, growth know, of seeing where down so trying on margin growth going continuing in to little to trying evaluate pressure well longer bit holding comes more are but it and than that you today know excel

compression costs we’re mean time we're I is that way more funding hard and Mike, to it to there to that a kind basis think. telling points is amortization basis of hard noise normalize notwithstanding next kind we’re where there, seems mean every XX just it might expect I think really on in of I it's you side, what at it know to this going second funding to But like the the PPP the be. year that much funding quarter. be, say I and going quarter in held eke where on do you you is think kind quarter, out be going we more seems settled kind think every and PPP of own to it I some and the the I of to be a anything our margin range have I’d think and that for range drift than we quarter compression. don't Rich, a point and we again, I but where the on going we're the of side again we last X, there, saw – the our drop at it. to points of I mean find it's going to where be be we down if into kind from not kind significant, and all the of

Happy helpful really I have. that's Friday Thanks, guys! and all that’s

Okay, thanks Michael.

Thanks.

next And Stephens. question go with Terry our today McEvoy ahead. comes Please from

today? Hey guys, you are how

Terry! Good, good. Hello

on know of I Hello! see you build eye quarter and I the then guess about something reserve fourth said, kind yet the my to any in think where when caught in loan you've the comments you text specific charge-offs trend and that to suggesting little will reserve are build you thoughts bit offs? Are a what full losses. the charge in of kind here the maybe year likely the higher net from your

I charge any Yeah, Stark, that I’ll think let Paul our implying Chief Credit we're you will be higher. comment. don't offs Officer know

ours I think slow build the a reserve you of know year. throughout the kind build, has been

things You a there's know of that happened. couple

deferral third adjusted rising, to of quarter shut into factors completely was initially we down. quarter, broke, go We know rising. had second that beginning They you in know were pandemic quarter revenue, the You for the there the the when that that. were was unemployment no reserve our third our businesses in qualitative account

again So then last number rate for got good qualitative business, you a our kind we've know so, this hovering factors but rate account X% you've right book that, or had really got deferrals we on that our of we’ve risk adjust we feel so around and higher changes. changes, of deferrals, risk of range to are handle quarter a so

delinquency still I don't to in credit we there's much had don't the So add color little I gone, mean delinquency, very so we’ve Paul loss our some let that. we've zero but as coming. we qualitative think see factors around I’ll adjust book. see,

we period tell I most think obviously number of biggest still with, the we’ll which this ability covered pretty I to of about and you only this. this good originally to these thought, there’s difficult modify pick segment I to payments. identified we hotels extended the we that month-to-month you’ve now our know think leisure mean pandemic of on a of can feel interest out through to work and as to business what's payments everything that get temporary fall. continue fast as some going has portfolio may is actually these going but it's up this travel bank we've happen and so as not it's right Well, but as sustain working we up, now But basis. their a travel some so right we're pick in But on and it, help people should

And I around X%. think you our of a it little XX%, above XX%, high deferral know percentage too a right was Terry, at point

related to of and You've I the footprint. bit we within businesses that's got think just have little our some seasonal a

Point, Islands we the out there extended market we Cedar For instance just all Erie some our that some there know you – know headquarters are stuff, do islands, have you you I so. know and businesses in seasonal we here, deferrals and for, think Lake

million, the and to of You about million effect quarter, the the mind keep we round deferred that’s by that at first end the over seen end you’ve round were in quarter million got the that $XX the in of second $XXX $XXX still month, end. by the

say. looking So program number’s know you round this we’re know actually higher. It’s in the reality deferral you of is second so term deferral the quarter program, and second should extended, now a I that reduction longer as from

here, COVID That's lower travel – expenses. A you look there color, then fair as of question some some trends. know follow-up, just as impacted expense a thank was you. at and amount on lower great positively my I the And just text marketing,

on in in the what to that out as expenses you rolling that underlying about in second slowly mentioned the for tool With just means impact could that the was returned quarter, expenses of then XXXX have normal, terms digital assumption that talk things an well? will and

the the question, reacts the COVID that how distributed Rich Terry, I is big right. and we're a the at of looking so I and expense to did and number going sometime mean and transformation going way until to biggest big to this mid vaccine off in that of happen and not out second we're gets $XXX,XXX it's is and it's fourth certainly that a fast not quarter, to certainly digital it's part that any we things to probably think the that about still That's and something you're probably happens, build, of which it’s roll looking during how Yes to additional kind the quarter. you're back additional of going education, revenue going question. to the is returning QX, That's to per to late expense your answered is be going right, be quarter be normal, to our to we’re $XXX,XXX probably travel, marketing, I but related is sure, going be we're thing that from instantaneously, transformation how so enjoy haven't that we fast not at third of biggest forward. economy going quarter. going kick but

on that with that, are back healthcare at saw saw in pretty healthcare on taken expense they COVID everybody less insurance we has probably insurance kind decent looking side; a than per the ours things decent way are think and but it the forward Those some and of our guys about we’re I a most, year. increase came quarter think I next biggest our the increases, two know. there. toll increase do the like probably mean going for like I I probably a is expecting $XXX,XXX

that I into overall think moving identified reduce Terry are into investments mean I things substantial forward on, that improves I be technology technology hard we and customer you but a Yeah, few expenses. digital the we'll making able we're think to that experience. our know look we expenses at taking a

cost recognize or you some some later expense you the Rich on. As the until you bear of and savings alluded that even know of revenue don't to,

invoices, that's also projects reduce the postage have and paper – up so eventually to to be that besides that able know that on you was it's of be of sending we’ll to going able we expense. in One customers, really pick communications upgrade the an to deliver expense, electronically us statements, post and allow we'll going that – just we’ll out customer to upgrading we're reduce all other digital our our

that talked that You income up things know will there's the technology the digital pick little with about on side. we

the accounts income on because You know know we’ll in our and latter wallet starting service pick the the half up income more we we more the interchange loaded add year, in with that latter revenue cards recognize the half and you stuff. hopefully some to of and of are up year, charge digital we of that pick more and

and continue so things require do go to comments to XX% are because low we that's back into so said invest a it to going the in we're efficiency level, in, that I there back need shop, to investing probably we're get does my be to us next So why company.

much a Thank have hope you you weekend. very and all nice

You too, thanks.

from today question go Nick ahead. And Cucharale our with comes Piper Please next Sandler.

doing Good afternoon, Hope you're gentlemen. well.

Hey Nick.

Nick. Hi

With quarter, expectations business full that compares it for your us the jumping in just into with prior gear can you to first tax how share the and years? business

mean to are we exactly you we’ve and on expect be place in would that spot I it I – going their And to be contracts would it's expectations year. year. what last exactly got did we Nick, recall, what last if did

the mostly mix? had a and within banking terrific. And this margin Was Okay, function the compared up to you a in of quarter. a gain big third gap business then sale mortgage

summer. think looks consistent and I’m year all at had looking it long It’s don't it volume bit a mix, built I up was just, No, because through our of Nick. a the quite function we of pretty mix

pick you we over close. our about as up. built up could quarter got business, time know of A that as refinance You we lagged far lot that day origination do got in stuff up that to to XX the know done lag fourth a we from is

we we bit. our did bit and – pricing a a little refi’s getting So a more we pricing the little on on with increase and our were are purchase

the the increase quarters Going fourth into bit of beneficial have it little been fourth on third in gain and quarter, well. so as would a the sale that’s

why I XXX think at and the increase points substantially to able or were basis we pricing that's you we something. were know Yeah,

you were to months if us XX were basis XXX look we at XX know at ago, points or or so. You

we think nice in they able you We and strong. volume know I were and charging a did fairly really remained So and very really see pipelines were of kind on job there. pass that dip we no to increased what still

Okay, that's okay. great news,

and the in So know purchasing of XXXX, end stock your unchanged even X% growth was spite loan you total based in are of the a capital risk XXXX. level from of strong largely

So you thinking I heard and capital us how about commentary on of Can your repurchase. on incremental refresh ideal level priorities an you’re your capital?

Yeah, somewhere you I midst mean we've as always more, said but a keep maybe like to little much range, that. know you ratio in changed keep well you pandemic know that our we’d X.X% we too thoughts on like a capital know X% bit of the to in the haven't to you

as great We capital strong that's continue are We’ll to healthy program. position with we'll long our through repurchase they committed deploy it our our dividend. credit continue know is, that. we and a and as earnings we as capital think – As feel remain that I remained comfortable think to way to remains the think as as you do quality, we’ll

need with M&A we’re opportunities. then continue the that to we now, earnings I that think I look do at think and we to recognizing

in You of right the some finding [inaudible] know that partners.

it's to do a – approach fit, shareholders it's fit, got to deal. deals reaching they a to want our deals a taking to cultural make because do little make look so. kind sense, lot our got don't got capital. It's cultural this think we're organization, it's those us that of deal be work, just that how But a for out, sense are to proactive got are I we and at for more deploying of to but just make sense to I a bit for a and

my taking question. for Thanks

Nick. Good

our go next question D.A. today comes Russell Davidson. Please Gunther with And from ahead.

Hey, good afternoon guys.

Russell! Hey

Russell! Hi

you I a was over how that on to Can margin XXXx and glide PPP. follow-up core more spend little low that expect you the drivers XXXX progress hoping path the are. time on what to commentary, the and

whether XXX played it’s earning and know above is is the I the remix I in You to clarity you because but helpful, largely coming consensus and the asset would well know more funding think understand that where is some timing quarter. be out,

I drag If did, reported right. X XXX the we what that. that's a points on we put Well, the that PPP know and we quarter mean you basis said for

So I rest for the of at. and noise and guess a is there kind there's but be in of where normalized I XXX will, we guess year, lot if you will came of PPP the

in like to had again, the kind we basis be I if the Chuck certainly go off, it said won’t about that our as it the margin I you compression year at books do. and look of had and to more terms in loans a Put reasonable QX I I that the about through to be I that's from contraction if significant surprised be was look you QX. contraction said, same guess I as we from path, but than four math, we it. that want a had guess And I if the a kind last on how second well say Russell, think going – third I glide how to XX QX that, pressure's and where kind and muted the be again forward, that’s mean to third for indication glide to I of you during pretty far of be then rate. – path, mean a leveled but not lenders it reasonable points. do was we at know – it’s much going to guide going we I’d at that? guess you're looking if of then from – more think of I would point an If wouldn’t I thing Maybe basis

we margins. was that is little on the actually rate bit We’ve wanted the up know Chuck. Like some the basis all up, sell to I are it but you been keep right They going little deals looking term, got the its long in really this compared so margin opportunity little basic a building to floors with short Diligent know hold pick widening Russell, said some valuable. we’ve pretty in longer five environment, this the of diligent pick not bit. year know can year. sheet more, some about balance a to you deal, to you points on are a say feel that, going few we more that and to low we at – I points XX before,

are well. can pretty maintain day, pretty confident looking we feel every that loan but at So it the we we margin

it sounds Certainly guys. a sustainable, I there. helpful very result and better That's color the so appreciate

things, your growth know expectations are? loan both mix prepared contribution. organic that understand the what uncertainty remarks, from a expect On growth I but bit about What you’d a you talk little maybe side geographic drive your the to just of and in

would off We tell pays large do we're digit we that projects lines growth mid-single we it rounds have money be down in out few credit. little as like we may one commercial targeting seen that piece the feel a I first will rolls pay in, of of our also and comes and time effects the that of of soft know got still every already these PPP, quarter. loan you Russell. I a we've

lines commercial are in some in January February. here early already our we and So seeing reduction

our first little perspective it pipeline, a was quarter, time growth term was I our year. this So we’ll longer see pressure last I think today than at as look the at but from pipeline bigger

little which get those half where towards more also up-front. different mix back to I no, things the mid to means got Greater see markets we great here, that no more that the Great it’s it. its construction, near don’t really Greater and as you we But a growth built we last still tell strong those Cleveland, would growth in to Cincinnati of future. So as the compared bit had had on all little are. Columbus, markets bit feel nice to a time we across that confident a start year year, loan we’ll the in any CCC, diminishing We

is just kind a your commercial able urban more share that markets And [inaudible] helpful. of very the how one of from great, breaks metro rural? Are versus your kind That’s within of down portfolio loan What that to initiative? you mix follow-up, contribution and

can more by probably about We of you here, Russell. would to off XX% that, compared metro that the to we're it’s the to as world. me get at of front probably hip, in just trying you back right number but – couple any is on that have tell eyeball this I’m – a looking but numbers don’t I shooting I

terms in of balance. That’s

It’s number in of in wise of confirms Yeah, the region. number that world much numbers obviously are loan balance. of the the bigger, number are terms markets legacy customers. customers in loan Obviously the bigger volumes, the outstanding our metro but

deck, believe have of front towards don't got of in kind us, if we investor look you it that front summary got we that the map, our at of I we've but where us ones Russell, of time more loans region ask you next shows by and Talk] But urban. you the we’ll are of which which kind rural are that [Cross better and question. ones that be prepared a

I pointing appreciate That’s thanks well. it from as care, for it in Take me. direction guys, me thanks. right the

you. Thank

go And ahead. our Boenning next Scattergood. Plevelich today with comes & Please Joe from

How everyone. everybody? is afternoon, Good

Joe. Good, hi

the NIM could year of about seems for ratio remaining ratio. you're doing [ph] efficiency it I if commented killing you good five like but still one, mortgage and a full bit banking people least pretty mean, of there of fourth question; happening, hand quick the actually stuff lot a in the first But with a of at year, here such than XX%, XX’s couple low quarter, better half thought strong is good a chance the A little a see of with job XXXX. strong efficiency the in expenses being a we

see. and go and that entertainment expenses virtually know how do were that like Rich to know the that I things and return travel return on you think normal, I they’ll things that quickly to quickly nothing. of mean How about, they talked up stuff. lot you depends because of Well, a

So there that but falls stays is second pipelines a banking right of half as chance, off, it because in very if some mortgage strong the the maybe that now we anticipate healthy. are the year, was, as

of business are the of know because people pandemic. I you with, there's a of pandemic some that’s happens what think So there's depends on we chance, know are that, kind – lot and we and a and normal. and to related like saving things some promo aren’t return to stuff, but events that expense I so things on Same so of when with the think savings you hosting always its

quarter, what might or in Can how the like to specific on first came the mortgage just talk about relative is. Any you things quarter – seems fourth half fourth banking like how first color the in look robust strongly it so quarter.

Just where of of trying next to couple get quarters a my check absolutely sense kind and directionally out. the

to loans good first obviously. a matter fourth replicate process into I quarter, and Joe, so really get second just to of But be hard You know fast can it’s the would pipeline. it’s especially through quarter, is quarter the the them think the our we how going the still to pipeline

going remain we its as strong, [inaudible] you we’ll see After quarter past going then where get know would well. I probably go. rates first So are as and say that, very second to to

the on I just deferrals. other had, two thanks. Alright, one the Then

is any of say seasonality some directional in thoughts have You like you a fourth rather of talked surge what about kind activity how deferrals requests quarter at here end impacting the might the kind that mean seen March not and flows. look what concerns there. new and there of I any on

it’s right spike-up. now; tell Paul. I any to It’s anticipate hard Hi, don't

things the they and we just look few deferrals, of process working deferrals know type eased, think going principal with as return, know customers are things actually you actually paying of most as for that. very that's us there’s to and being of P&I a to example and we are cooperative as Restaurants that. start to I you great the Then of we revenues they when – hotels like what these in terms think can, restrictions deferrals. very are a start guys change, want where are steady our quickly so

as guess have you pretty differ would we'll will to others. payments So I to this see probably thing some know I steady and be return some and

and really that and defaults it we have individual the at have what evolve is down But any point. we charge relief not cycle a of we into not so this going what far to seen gets is business type need. to anything think off they So really seen

unemployment are over think it so, is improve So by again, next expected encouraged the we'll that, take month-to-month. the we or by to we are that we fact quarter encouraged

originating I or diligent – have, on hotel are when of the nice would add meetings understanding tapped loans, we when payments sponsors as most those called a were the about sponsors were the to going we of have shoulder. thing very and and you make you wherewithal that we one our through know the upon know back we this process

behind good entire the sponsors feel we almost our hotel book. So about

Great, thank you.

next the Rowe ahead. go And question Hovde. from today Please Bryce comes at

Thanks, good afternoon.

Good afternoon Bryce.

Hi Bryce.

two. question one more question on just book weighted that within is hotel before the to or Hi, on currently? LTV the I What portfolio move average another

front – You don't I of the know me. within in that have

XX loan talking it’s between loans. are probably a to value. about the you would We range, and give I Typically XX% XX%

varies the on not them the indicated it situation. only willingness know based But to good, really You of loans. are Chuck but flags the and major as capacity, most support

And of we’ve SBA program. through those taken a loans that hotel XXX number

borrower they to a a So that they take know put because XX% you no you’re you XX%. know like loan-to-value, and in put at – the has out loan-to-value, XX% XX% start generally in

at them number level well. got that of as we've a So

about and ask some of and deposit I average helpful. in within obviously XXXX. you time you know still Curious lower looks deposits opportunities that's the the continue see it had potentially look where to X.X% balance on cost. things in and growth sheet the out schedule wanted Okay, nice to you've the deposit type cost might carrying you of mix really there. kind release like are side the of I to mean

you level customers, and just you maturing for know, maturing what current the what's for maybe this maturing or the retention rate So CD talk of could through is those CD's.

be CD would bucket. Well that that's in where the opportunity is,

in our five basis about, get we to out four able be of may identified we group, working or eke I Alcoa that that. more points think

rates most you and written XX half, still said those quarter, and one one as for of were months are those a a Some of terms.

rates are of coming so. keep around keep loyal XX number a those. the six some over of good and they'll be are They points. basis months Surprisingly customers bank just CD due clearly the we still or customers. has Current next we those So down sometime that

our our a had at looking special I’m yes, rate had XX month today, XX we or points, months sheet there month basis – XX XX and So points. XX we out is XX months special basis

So for those is so improvement there there. have rates room substantially, dropped

growth, checking just accounts, non-interest been get some in in the million personal as have we $XXX those that and that recurring the far to – and $XX growth alluded going year. As nice that accounts, every within about we income as is to in most core we our deposit management services growth them treasury that’s business accounts, income and million of of thing are the

over the terms of on think push last fees, very service the continue able as as little so we've you up income in that's charges the interchange that same That's have income. valuable. can, So strategy we we our we to know we think - on going and three very add in CD's, where side, reliance we're terms non-interest four and accounts we been to I got opportunity of that's why many years, non-interest with or core will because

PPPX wanted okay. Got ask I about here. it, to

noted of far. You $XX or approvals so take million give

or about, it or you you was Do to give Just, that relative that $XXX will be of PPPX the approximate take. how PPPX could that? less know what are thinking originations half you PPPX million maybe you than think did

I think half. Well, at be going we’re probably to

think right X,XXX. If you at we at are even think where over look loans about I today, and X,XXX, numbers in, came before looked we at we PPPX I some XXXX little we're a I

we getting and that them on we are So tracking level, everything. basis to a fee half close pretty and are

rolled me. echoed and bit to would do like will little we're echo that mark than half of I right the maybe a and surprises out, this know though, looks you Paul think are that better going we about It I do thought we that that. probably this same volume. So Chuck but that maybe when

simplify so I anything in taper of demand the the to us, labor didn’t to it maximum smaller but volume put borrowers, of correct. numbers emphasize lot but little think dropped trying part the average have is the loans, of They – really of size because loans and actual terms too. of number through terms go would SBA in to restrictions this. there started outstanding for it large of plus off this on bit I those do in and the amount, by to a are we are round. It’s Well,

we’ll out, than because more to moving how slow was we it So this see all going be. it is definitely plays thought

one for Dennis. last me Okay,

capital some around that had some make You commentary wanting into deploy might to possibility and M&A M&A sense.

you days conversations know potential out few some hearing the chatter of just I But wondering be come this to months. of COVID kind was – gone of period very I stock know had, partners, as talk valuations and maybe you these if as last you about conversations. with you started we the might think Just informal over type bank home have

challenges that think mean part ahead. that my obviously to tell would you I we’ve who is would we identified good daily I that’s some would people out. be reach proactively think I think that potential I partners. realize of chores, lie the very

it even today so more did much months think XX I than ago.

to to Some a when in I level, banks pressure counterparts of margin activity more conversations PPP income be particularly still recognize think on low mortgage at when other for away, these this goes make environment there's of it'll money. substantial normal my some banks, very they that and be my rate with of some returns difficult

So they realized think I given that. that,

asset So because to think billion going it's these that $X sensitive might for work billion be for pretty those banks in be for billion maybe the opportunity partners to – got regards needs, it’s to or and the to would banks in to in not going $X think XXX in great assets Ohio to There's or some be ideal try – of only few be We going I it's like. fit that look more are $X think, decent cultural what size. to I for great under both a think, bit very and work people we’ll opposed the $XXX we’ll a their We there's you million we Because as somebody community, work organizations community in little shareholders, share at be I think just some work with in the employees, it’s I’ve the for it’s to to fit quite going banks, partner. vision. assets. that Ohio. future had a we’d we’ve We know had conversations for our

us. we've Indiana, you think some Southern had think we've those know for I with banks Michigan, in you know and Eastern Northern are Kentucky, possibilities conversations Indiana I all

great color. Thank That’s you.

have You weekend! good all a

too. Thank you. You

concludes remarks. this Mr. back Shaffer And the would our I over final to question-and-answer to for session. any turn like conference

I In entire in closing year. full be our you. of results. you to challenges months to listening who fourth Thank I few quarter talking questions. think want just results thank meeting year the asked to Again, XXXX and of will with challenge everyone pleased another participated call the first share in us, we and undoubtedly again to those for our we for and and those but for are a to thank forward look the quarter extremely, extremely

thank today. your time for So you

Thank sir. for call. attending conference you today's you, Thank

You lines have wonderful disconnect day! may a now your and