Loading...
Docoh

MidWestOne Financial (MOFG)

Participants
Charlie Funk Chief Executive Officer
Gary Sims Chief Credit Officer
Barry Ray Chief Financial Officer
Len Devaisher President
Jim Cantrell Treasurer and Chief Investment Officer
Brendan Nosal Piper Sandler
Jeff Rulis D.A. Davidson
Terry McEvoy Stephens
Damon DelMonte KBW
Brian Martin Janney Montgomery Scott
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.
Operator

Good morning and welcome to the MidWestOne Financial Group’s Fourth Quarter 2020 Earnings Call. [Operator Instructions] Please note that this event is being recorded. Also this presentation contains forward-looking statements relating to the financial conditions, results of operations and businesses of MidWestOne Financial Group, Inc.

Forward-looking statements generally include words such as believe, expects, anticipate and other similar expressions. Actual results could differ materially from those indicated. economic that rates, actual of company’s changes business, pressures, factors materially to the periodic important risk competitive interest the statements are in general the reports the and could in filed results cause differ company’s factors registration Among detailed and with the SEC. conditions the mix presentation. Financial undertakes no circumstances update to statements forward-looking events Group obligation or or MidWestOne reflect this after of date these to publicly any revise call over I Mr. like would turn the now to to Charlie Funk, Chief Executive Officer. go Please ahead.

Charlie Funk

you very Chief Devaisher and Ray, sitting Barry our Nick Jim and Officer. that In much, you Sims, for thanks Treasurer Officer; Len begin will I was of Thank the our few Cantrell, our to Chief joining with with I Investment today. Gary a Credit all me Financial are the and opening Officer; call Chief President, room remarks. our

First quarter were even $X.XX in of a over say to Also good. asset for certainly would a income earning later, ROA, on talk think quarter little our we about was and note our XX% that quality we a I and growth improving. better, will we and lot maybe share. the was it little return a have a tangible that think loan all, this numbers X.XX% I equity, company. but bit Excellent in per that of quarter stabilized non-interest There little good our more bit certainly for commercial our positives

residential mortgage as refinanced as we in growth. I had did consumer said, show terms they our loan In We secondary the market. balance modest pay-downs into the sheet, of and

that. in growth was the will And annualized So, we X% the commercial neighborhood. right loan take

outlook, we will the best In word. be flattish terms quarter is probably the of first the think

project Twin has of Strongest loan to in well, the construction loan loan recently, will terms year market Cities that and is XXXX. for continues X% budget growth do quarter. the We pipeline from a occurring have improving, regions continue we calendar some starting X% steady growth there. to have growth, be and Denver strengthened the for outlook during a do the takeouts nice to Florida to are of We lines to

also the growth loan City in show We first the could and market for Iowa think year. positive quarter the

note what quarter. and there We be And MidWestOne do the also have outlook where a rural are for continue in quarter very saw bit typically has first and outflows We that deposit know We Southwest inflows. would back. to we in seasonal and rural little us they offices we lot difficult in then we as parts, will the to specifically and better hired end we well. a deposit recently of in that XXXX, the because America predict developing the deposit quarter. towards regions just new that very a pipeline moving see see during are in a specifically very, we banker It’s of Wisconsin outlook of build the a the strong

stay in least another have now, balance is some of we which place at We of round forgiveness, have also and PPP. that And we on a got for money will time. of PPP expect period sheet our

eligibility dollar growth to for it robust significant have in the ag PPP as We be as is do will enhanced very it’s first So, demand. the but around, do time know very, hard deposit volume that second for We our borrowers. was forecast the round. terms demand there not we of think

we to So little more bit a agricultural expect activity see do our customers. from

certainly this prominent the net line and certainly income aided interest was and In a interest that forgiveness I most – by the biggest quarter, that terms PPP the net income margin were we tailwind. statement income. of think In the statement, that in we think is last

continue We we That was the release note points to on one We item. adds which placed loan each roll roughly $XXX,XXX that is few on would that basis portfolio, did a charge-off interest of quarter earnings CD in a margin. that the a of a and to have core this was non-accrual.

on However, think also and release. should be that’s one-time item we a was earnings call in as it noted this the

margin, yield outlook terms I think along curve of little The steeper or helps in this in bump us the minus. the for it plus range a should bit.

the such have noted to part the it’s ours be X bank, to the company. that should fourth we for a steepen that said However, again, yield the the negative in needs quarter. margin the of experienced have to did it the inflows And greatest is one as on X-year then that curve for forth as a probably earlier, I benefit our large deposit effect

of area just one non-interest the really terms a think company I not In of for story our and income, good it’s company.

volume. Our center home $XXX of a generated year. mortgage around had million right record They

And done volume the especially would totals. added note the company. at Trust because team of before American to off, I with paid never that have mortgage these really kind our We really merger Dubuque that

rights, do servicing rates, at dependent under a And $XXX just that of of our to demand under drag but course quarter. interest portfolio be loans. and this for is pipeline strong. continues of will we on secondary we million although mortgage that’s see have $XXX amazing stay just what forward, point portfolio a good We about think would less It’s loans Going first that’s market for mortgage of from in there today million the time. direction the our servicing

loans a we LPL to rest the presents that that expand this Investment at to hire time, They Iowa, continue just reps subsidiary, to LPL record residential and in itself. a year. So, Twin It’s footprint. LPL we We hard service. and very that had Cities we people our brokerage love the is would to have rep expand if are their fit well of look to in in Denver. of able for our over $X.X into opportunity we which good culture services, in now are point estate billion produce. terms are But the our market real

year. merger a trust They would to but very, on call, had department I the fees. integration strong the But past had trust Our that’s they as in probate budget, well. hit in court said, we and they gone think have with been their not deal not very earnings did with so Dubuque did We have systems the to XXXX. shutdown, collect department Iowa, basically able

collect accomplishment. in those happy in trust The bankers XXXX. we I report the department a meet trust was two And will Cities. to all XXXX. despite significant the emphasis to the trust established think for growth of bankers, to But expect Twin am was and they We are which organic hired be we able that, department in that budget, on bankers have

us which couple expect They potential more number significant We for between have depending about next significant over very one days, the on we is Studies. out revenue talking next we calls. XX customer a years impression have hire they roll of the XX with XX in days. to are there have Twin already made that and in growth one and great had been we a that as we And think of do the

the a terms And quarter that was us contract renegotiate core that we now savings of vendor contract. our expenses. We life negotiate We expenses, the that a vendor the with quarter third-party will we didn’t of provider. to way and realize the works In upfront messy help in recorded it used paid the for was is the contract. the over

basically this the hedge cut we to put terminated hedge, zero. as we which the on just cash flow the back before look also We the and pandemic Fed started before just race

So one-time and think there that quarter down to quarter. will another but items. to non-interest the run-rate $XXX,XXX I expense few do in back experiencing terminated which Barry should – be and – charge available we smaller contract, were were specific come before was get there was other a we hopefully that were answer one that the questions, fourth an the then

In to did reserves. of points total ex-PPP, release here is a We the of the have charge-offs quarter, during Again, loans have annualized ex-PPP positive. for still XX feel had I up the X.XX%. loan basis hotel loan is were think generally story which the quality, terms points slightly good of did reserve we’ve loss X a as number And asset $X.X of We disclose non-accrual net again, a we of non-accrual. best about million NPAs numbers up in that very The think performance one that. our years, year, on the put earnings in I slightly. we release, basis pushed

took of cleanup lot a resolution during that in portfolio mask and was the the did year. legacy place that what However,

to that to think reserves. noted look NPAs back actually, which good it’s released about. on as and XX/XX/XX, us for slightly, feel into very ride loss bumpy that If down new with deal we and were expect I regulation the topic. actually And this future particular our a XXXX to created learned We fair the guidance did say new continue we CECL as in to we very, credit you the

importantly, most our credit generally positive. is outlook on think I

We continue mindful our portfolio. hotel be to of

our we anticipate credit. very dollar this outlook And best that reserved prices, we soybean prices particular is rural high. thing to fully since the the with strong say had loss are. think year large the probably benefit loan, crop strong, for as other a XXXX, farmers that In good of they we $X.X is and XXXX. sector, what’s are There million would a terms for note, don’t ag Also on and as their corn of economies when note

some most positive soybean industry than as time. their that not and been rural for for indirect but outlook of do is who effect as positive. dairy Southwest there corn period customers on we in our think Wisconsin, and better America. loans So the is some of an positive We as It’s have dairy it’s in reside growers, is quite

portfolio. So outlook of for year terms ag our in good this we’ve forecast a

be the represent we to XX/XX. we shares the In would would of terms each our back represented percentage X.XX% release, share increase think January we position, typically we PPP of our and the we we it but We of and book value. And value out fine We as did good common of do continued of dividend, the continues $XX.XX during XX,XXX which when everyone per with our earnings reward remind it’s an to shareholders in to then increased repurchase quarter. in annual tangible capital the equity are equation. think where stock are own tangible

Q&A, and unprecedented it So the an in go myself year. to I XXXX, summary, how we I thinking describe just would was you before was think to

share took to $XX.X compared earnings income net XXXX – per made we roughly our QX, on year basis charge added XX our X.XX% communities loss in And and of income in our million in we XXXX core served an to XXXX. I look a agree during tallied million well. operating would would $X.XX had ago that loans $X.XX impairment our at and in I I X.XX% we share hasten of would I about credit in $XX.X loan million reserve per our loss think employees exclude at results strengthened final from And to end add with when versus served safe we we talked we $XX earnings, goodwill core customers our the company and the we as year And of about and kept add we the XXXX. that. to the ex-PPP would all our very which up and reserve

you turn sit like that would And out XXXX. are the lie do So for any it ready with back We challenges in. to ahead. might we we position forward And we there. overall, Nick, to Q&A we that think be the I for that, look

Operator

question Thank Sandler. Piper Instructions] you. from is Brendan go Please First ahead. Nosal, [Operator

Brendan Nosal

everybody. Hey, morning, Hope good doing well. you are

Charlie Funk

Brendan. Good morning,

Barry Ray

Good morning, Brendan.

Brendan Nosal

of I some on start here liquidity want to the in just quarter. dynamics the off

liquidity into in you to strong many very like this deploy like quarter, securities continue rather let others it cash. to it So inflows. that you, than see looks But opted sit

those are manage just discuss year? funds of course the the over excess how strategy you that So of going to

Jim Cantrell

it. is on Yes, think Brendan, Jim. I are take this you that, I will to

think have that. where decided I buy cash are to we we ones going short-term to flowing securities, invest relatively in

leave it’s just not put the to a in costly as to jeopardy, company that rate really are money but interest in cash. We long-term risk going

$XXX excess in had average XX cash I on it left basis been million that had we points. in would we have think liquidity

– position, But securities, mortgage-backed a So And small been one of of the employed up ourselves got the think a I we us that caught have for really that got finally period. and municipal purchase we that’s the Funds a Fed we are into combination bonds. investing end the at albeit in a strategy strategy most of years. hybrid that’s

Brendan Nosal

in the frame step Sure. That’s might one comp. little like reasonable alluded think helpful. up what Can me the items you Charlie, being that guys not from you bit higher the to incentive a you then just new the into and help a a persist quarter, And expense year? of more I’ll run run-rate back. couple

Barry Ray

Barry. is this Brendan,

will think, will the million to we the into anticipate per for we what I $XX is million $XX range be quarter what expense run-rate expect. back

Brendan Nosal

questions. for Fantastic. Thank taking the you

Operator

you. Thank

we go Please Next Jeff have ahead. question from of Davidson. Rulis D.A.

Jeff Rulis

Thanks. Good morning.

Charlie Funk

Good morning.

Jeff Rulis

So, more the that than is have are outlook were the overly love side, release on to seems the a side I maybe on that portfolio? like to know understand not and the simplistic trying tone Charlie, and sense positive credits it also to as get reserves setup and to you the and for I fair if pivoted just higher movement particularly credit ag I’d the towards allocate sounds ag potentially of that’s more and that reserve it ag optics am hotel think today you be positive, for of Gary, is you kind guess specific they the the migrating. I question say in NPAs

Gary Sims

Yes. add Hey, you in to I if start Jeff. Charlie and something Gary answer additional. have the here. question will

see But quarter overshadowing lot place portfolio we same particular taking a our of the also the around in the is quarter. as non-performing in good were very would that say have of that in a So towards our resolution non-performers, of agriculture in industries credits. But pointed the vulnerable quarter speaking good quarter what book the as the that migration of resolutions of book happened of out really, story at and work that hotel kind time specifically, existing you quarter of work a movement that of we in I on generally terms happened most terms good seen have pre-pandemic the resolutions in positive credits.

kind you management were think really gets And we our in of talking that’s of direction us about, that are Jeff. that book in position of what where in a the that right so of terms going we kind pivot

Jeff Rulis

about want You to little talk more ag? a

Gary Sims

Yes, I will. sure

the As Charlie his not remarks, challenges prices combine lot ag that right Iowa. very prices that good space we prices where in a that government XXXX-XXXX. the XXXX difference. farmers our have in makes of are seen XXXX, good experiencing Eastern and And ag story we and in we since that corn now have experienced you with for a said have assistance soybean big solve prices over a And are experiencing good when our space and that it’s we

Jeff Rulis

just obviously, expectations And tax for just Alright. maybe Barry, going housekeeping the that on for rate, any be XXXX, forward? but

Barry Ray

for will XXXX Yes, expect we XX% XX%. rate Jeff, that the to be do tax

Jeff Rulis

XX%? to XX%

Barry Ray

Yes.

Jeff Rulis

I Okay. will Thank step you. back.

Barry Ray

Thanks, Jeff.

Charlie Funk

Jeff. you, Thank

Operator

Thank you.

Next will go of Stephens. ahead. Please McEvoy Terry be from question

Terry McEvoy

Hi, good everyone. morning,

Charlie Funk

morning. Good

Barry Ray

morning. Good

Terry McEvoy

just press some stable. said which circle kind ongoing with $X like release indicated I a that am bump PPP was million sounded like in margin take the fees plus the commentary might also over under just around then And commentary likely – I want the of kind few and environment, minus challenging to it which it consideration – it to be into on but remains suggested And back trying of or that it kind to to of me quarters? the decline the compression. next of the

offsets the I ex, there some the some my here of accretion other core compressed guess and some is does So, from is, the then noise and variables? question on of margin PPP,

Charlie Funk

it see doesn’t comes going mix our how on payouts money come of the there some but in stand the if – to customers a of some in, we is a liquidity and in. a the and will significant all long will think number bank know much dividends, have do loan If equation, a there when you balance think unknown that will and I little and hangs much our our the mark be or don’t compression we And loan how know how demand the will in liquidity sheet anticipate margin on yes, that, emerge to make forgiven I have the anything we the loan comes liquidity. is because demand think much We and year, then also improves amount are the big we depend spend more will they very to pay is PPP of this probably liquidity to as first demand. there quite but the we we a Do good quickly bank, pretty leave you as will money loan Jim? year, not then still for add year may have during the growth quarter, probably the margin will that have question bit, but may to

Jim Cantrell

Charlie’s significantly we securities liquid year into in-depth help our is it loans. the No, watch you of than just it’s a – to was point, can assets when you today if that to it efficient could and and happen, move loan loan goes And maybe I begins think lower will could as use ratio to ratio deposit deposit those resources watch a our ago to margin. of like some more that the say

steepness either are to that so yield a in benefit hurt so or we a curve asset the uptick wouldn’t is rate X even from in environment, little we X rates sensitive, well. as not hugely Although rising slightly

Terry McEvoy

Okay.

the don’t as part you And We curve. the just to maybe you that watch have will of what follow-up, then last of updated on in couple us continue just quarters, think are a I doing the on with digital do ‘XX. your as year kind outlined to some here what even are that early in to you platform and relates and third, fourth initiatives thoughts of of you it going fin-tech last had earlier some yield

helpful? would there Thanks. update an So be

Charlie Funk

had have some products no, the the bumps. significant core – of And XXX not lose XX but but track our providers that, bumps – out time, rolled last we We I Sure. days. in to with

platform as help with and it really think all And were all competitive to we get they used would I will believe that financial will they we be us. normal. offers we if the other institutions very this and think it be use enhancements that as I very, –

are process. We in the also

$XXX,XXX, and this will productivity the is the start customers. enhance out allowing XXXX banking small of that of commercial initiative we by and and of to we at care a but into small, on a $XXX,XXX certainly our but taking approval think focus And deals, business the larger time $XXX,XXX range. the application would So, initiative them will we streamlining will more automate same but profitable to bankers our up of lot try our ultimately go process, and

a last one operations an implementation save man implemented to area a it we X,XXX have out those OnBase. the called their of to that’s the over And to management just deposit there things be platform make pointed talking have platform that internal really do X was months, example, the year bunch that I And and our in in use department department folks will We more just of in company us also a able not parts productivity. more risk OnBase. is I that productive to more customer help by And internally. have better give Friday in hours Iowa you who that continue they of improve allows internal to run but us and they various last the in a they our City might whole and us see, others of company. efficient been

Terry, right plate some a that of a on bit So of are things would snapshot, the now. that of our little be

Terry McEvoy

I and have appreciate nice nice. weekend. Very a that. Thanks

Gary Sims

you. Thank

Charlie Funk

Terry. you, Thank

Operator

you. Thank

KBW. DelMonte ahead. of from go is question Please Next Damon

Damon DelMonte

good guys. morning, today. well is Hope Hey, doing everybody

Charlie Funk

Hi, Damon.

Damon DelMonte

probably provision few outlook you on So of as and is little feel a booking the of to or enough year? Do release credit regarding additional we through my kind bit of next release strong trends reserve where you the go as the have quarters. through this a the quarter’s you direction first here can kind provision question back for are go that we go after do

Gary Sims

we also against. question the driving non-performers Damon, calculation about we – is pointed what there we economic kind out So, that that Gary non-performers really to to the some you had, migration fourth our and talking was factors have this I’ll answer release. to start as quarter saw provisions a But we took of

reserve, see our the the is improves, continue opportunity XXXX, that financials. as which you for CECL go to going see that provide happening us the effect the kind be possible in that��s in make for to to is that And the So, in a year. way XXXX, what mind, deterioration portfolio going into work. the you reserve are utilizing saw Does a will we for net also go to through in at but way the opportunity you economic of forecasting lower supposed as we as are think we sense? lower That’s least to

Damon DelMonte

next it, your for are Got okay. What year? for charge-offs expectations

Gary Sims

us? do we Let have to budget judge on me What our help there.

Charlie Funk

took We budget. a our in conservative approach

We will get that for you.

Damon DelMonte

then I looking just back guess margin. And on I of kind great. to up, Okay, circle guess the by that

if puts So value exclude around right? margin in were quarter this to kind the core the fair of of that we that increase kind Is X%.

Gary Sims

right. That’s

think I includes PPP that which excludes… the

Damon DelMonte

PPP That – right. includes

basis then a minus take XX basis be Is level hoping points. are points, to that you that we it back something plus if XX the step like or So PPP, out XX, going probably the and forward? further that’s

Gary Sims

to I more quite impact. loan the earning Yes. the I but contributed don’t point it a that that margin think much yield, to PPP asset the the Damon, have billion, over think XX $X the based don’t was basis with that may margin, to I XX much think like to contributed – in

Damon DelMonte

it. Got

Okay.

Gary Sims

number. XXX number going bit, being region, then a that’s the It we it’s you flat. equal, And to the the away that’s be yes. are to and and could is so up but But if really be PPP getting all – little a or that’s that yes, the that’s think strip down – the your the answer in else question, accretion to you number

Damon DelMonte

it. Got

That’s that. questions. I had the I that appreciate in clarification helpful. on very all Okay. That’s

you very much. thank So,

Charlie Funk

have number don’t that. memory the we get And but the on we call, got the mind, something to in have we the budget. of my I trust charge-off I – before end will my will that in

Operator

Please from Martin Instructions] go is of Scott. you. Montgomery Janney Brian [Operator ahead. Thank question Next

Brian Martin

Hey, good morning.

Charlie Funk

morning, Brian. Good

Gary Sims

morning, Good Brian.

Brian Martin

about that’s of Hey, last time margin are a that at core stability impact. plus minus Jim thinking as or get it appreciate I the was going to or some where take you give if I where the was kind cut

on quarter – you and thinking us about include basis is you of So fees XX the the the of XX margin impact this can that reported are to for how remind this that that PPP include the quarter? points much

Gary Sims

for $X.X working want say now, am about I memory I to was it million.

Charlie Funk

PPP… Of

Gary Sims

PPP PPP, was $X – million… net maybe it

Charlie Funk

was had million, It million of PPP $X.X this we fee loan $X quarter accretion.

Gary Sims

Yes.

Brian Martin

Okay. And the remaining piece you guys have left is about how much?

Charlie Funk

Brian fee. is for what’s million $X.X left the

Brian Martin

Okay. that half And most be first guys is the it that still remaining fair you expecting or $X of forgiveness that’s recognized to are to assume in million year so?

Charlie Funk

way the that’s budgeted we Yes, it.

Jim Cantrell

the my mind in much look at track being what’s do first as Yes, happen forgiven it and of we that. quarter actually in we could

a an have of bit seen uptick. We

think So most in think the I yes, it to will we of first it’s say happen safe anyway. half

Brian Martin

be thinking mentioned you as points matter still similar X then we to to stays basis think to so to still you last the model And take margin get it fair or as inflated. least a quarter I is or liquidity but how at it, will it of kind give initially as more kind get already that bit little just sheet it’s when a just PPP, expectation And know it – would Okay. sits those forgiven, the balance Jim, I far guess have it right that or of about said your now, whether when that what want about? it’s of

Jim Cantrell

other – money loan going on the high transaction, shrinkage excess we to at I that but is FHLB say, whole invested a get balance or CDs, a would to bit pay-off into little I the am rate. over are and wholesale have the so that day loan forgiven, due liquidity time, pay-off do borrowings to to I sheet be higher not sure we use much the borrowings see Yes, rate

balance why down time. over come we a bit little So see maybe that the sheet

funding large all-time We we and I think down at to and a terms paying the bank at higher suspect in pay will CDs continue funding are where an wholesale we I of little low wholesale sort bit of rate. level are

Brian Martin

is is prepay opportunity that of it are even you to do really? not I guess lot Okay, – a things there some maybe to

Jim Cantrell

terribly what you are FHLB, the it FHLB advance economics prepaying attractive, so when we is better off not paying place it just off have leaving it of an found. and matures in are

So million some altogether. advances large $XX some or $XX of it of year. which million renew will I CD or the some go is $XX million, hazard I million this so think out or And there areas to bank guess at would rates, $XX off will FHLB of coming lower of

Brian Martin

income Yes, And years, then just me given comments fee you the maybe for or think really okay. in having investment appreciate fair. two just That’s both kind I level one the the mortgage last that. area in just Charlie’s great about year on about next think we something? potentially at stepping the that of and did of could how up next off mortgage here, least record guys we is kind should as income think go you how year this or on headwinds frame about we fee some should how the about contribution from given fees next the point year into high

Charlie Funk

Brian. I that? to would going after quite just much components, XXXX, first going I think not certainly none us And way strong. starting that as start is me have the quarter. tell I mortgage of happen you And what’s have it think break I into know, as to you out, think strong but to but you the are maybe think a we way

of revenues well. two services We department had a swap increasing quarters fees. last higher And on trust our investment commercial income of year. a as know probably think from path counting the will continue I is of to good first lot I chart banking transactions,

see because the there be especially do quite think some. as there think of not Fed that much, zero, but the perhaps is will some before potential I I that rates interest XXXX, lot to to really a of in but we did reduced

a the charges is downward major there of slightly probably So, components, true for trend, continuing most is industry. which service the

Brian Martin

it. Got

sounds you given volume in in So Maybe the start XX% are maybe bankers year? like thought you more neighborhood Charlie is maybe the to it XX% than not I but is a especially association optimistic mortgage this wildly, not mortgage to of the reduction that bit are I the guess more year.

Charlie Funk

Yes, we I look at quarter. year, fair, year. am fair more to it the think a first because a all I optimistic think for way that’s at to that that’s But the same in look for things. the And I the

I than is am better that. saying are think starting I year we the out all

Brian Martin

Yes, you. I got

maybe kind or how the guess then of Okay. for guess, frame that I ‘XX? to be I contribution about of much just just appreciate that. in, And I remaining the one you if is are how kind thinking Barry, just accretion in brought can it’s you the

Barry Ray

Yes, and not into PPP we purchase we talking be accreted remaining have income. this think $X.X to to of million it’s have it this observed. as December are is what’s that I frontloaded about, as presumably discount, And was tend the at the we Brian, just is that is XX

And our in have we I will continue to forward. anticipate so going earnings attenuate our quarterly run-rate, release, there from which

Brian Martin

Perfect.

you and for thanks thank questions, guys. Okay, taking the

Barry Ray

Thanks. Damon, basis charge-offs, three, respect just are is to what really points quickly, to charge-offs, the we XX. expecting five with with XX respect

Charlie Funk

envision of have for we XX because of those too reserves if about significant be a to points I to all add going will as forecasting year, that our a charge-offs throughout talk improves released the is we is believe basis the will commentary we cover for economic that are will charge-offs. the we the of provision portion year, Barry, envisioning those way the cover could as but reserve charge-offs work to some don’t necessarily And create that year, we around the –

see So, that getting our actual provision, really to level. we don’t

Barry Ray

Yes, and more. add – I even I can and so think

ended in I the year our think we budget a is way the we model roughly with is X.X%.

Charlie Funk

year. X.X% In cover beginning that actually throughout anticipated other about reserve draw-down at the of to the our the that we words, will reserve we to the utilizing charge-offs Yes, pandemic.

Barry Ray

to clear is that Hope you, Damon.

Charlie Funk

was asked. that Damon Yes, that

Barry Ray

Yes.

Operator

I’d Thank concludes you. question-and-answer closing conference This our any turn session. like over for Mr. Charlie remarks. back Funk to to the

Charlie Funk

being us Year to everybody of of all call. the we this will follow-up, call on a Thanks joining wish happy the as again for of please need weekend. for to can you who we morning. respond and as on happy Those and call and healthy any you New safe, us be Thanks quickly

Operator

concluded. Conference you has for now today’s Thank attending presentation.

disconnect. now may You