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Great Western Bancorp (GWB)

Participants
Seth Artz Head of Investor Relations
Mark Borrecco President and Chief Executive Officer
Peter Chapman Chief Financial Officer
Steve Yose Chief Credit Officer
Karlyn Knieriem Chief Risk Officer
Jeff Rulis D.A. Davidson
Jon Arfstrom RBC Capital Markets
Andrew Liesch Piper Sandler
Damon DelMonte KBW
Janet Lee JPMorgan
Terry McEvoy Stephens
David Long Raymond James
Call transcript
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Operator

Good morning, and welcome to the Great Western Bancorp Third Quarter 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. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Seth Artz, Head of Investor Relations. ahead. go Please

Seth Artz

welcome and our this call Thank everyone morning. you to

Officer; and Joining Knieriem, Officer; we Financial particularly Credit for sharing have for have Karlyn portion, Bass, with call and Peter Yose, also Officer; Mark Chief the Executive remarks, and -- Chief our Officer. prepared the Chief Chief us Officer; Chief Risk and Borrecco, Chapman, we Q&A Steve Doug President Operating

are may in well we'd discussion company's started, of from filings the you to COVID-XX to forward-looking refer full pandemic. contain the uncertainty forward-looking and current like that as for to the a risk actual materially the presentation getting Before Please differ discussed. that company's contained the presentation website that statements company's periodic in true with environment on uncertainty from remind SEC especially subject results cause risks as stemming factors. certain the those today's could to is This the disclosures extreme future statement

any call as assist actual are in Great should only this financial trends not upon of non-GAAP a conference be Western's and measure to in understanding relied you discussed results. provided financial Additionally, and referenced and results performance Mark, please would go for non-GAAP are conference Executive Mark Borrecco. within Western Chief Officer, measures Reconciliations like Bancorp's the ahead. presentation. Great such I to to included appropriately now over the turn President and measures

Mark Borrecco

my am call well joining to you the healthy. call. second leading family staying you, Thank Thank hope morning. Western of coworkers, with Great as for the and and you and earnings excited Bank. CEO doing Seth good I be your along I are that

environment. to would I financials, current on the into jump our first update like you we Before operating

rebound times. option our Slide chart impacted by contributions Committing of activity to our our provide quicker a locations. X. are operating customer branches, have Life admin out provide reopening support Google challenging one-time with We Most to employees pacing mobility Making communities. and on a We increased financial the have established experienced to as to we our a of our evidenced during return in markets clients. business these of our to continue core service program. our even reopened we And and We XXX cash support modified to our support grant PTO procedures, to exceptional additional funds our employees Great XXX

As pandemic. the while to I move taken quality want on share conservative asset address we X, to Slide to bank information repositioning key we steps our this through as we manage have

all have to we segments. greater is million, them Protiviti appraisals. that reasonable and credit these XX than review have critical a Steve join that this third-party objective using to criteria with Steve of rated, to partnered in $X Chief risk our select with along we of credits first hired loans This repairing Having We've and Our credit in May step our risk management. years Yose on culture. initial our We bolster a bank the experience properly perform underwriting risk of is smaller as are Officer his consistent Credit are ensure credits year. XX was

evaluating system rating as with but parallel better portfolio performance current to is risk enhanced Our us enabled as has running our us historical assisting process, understand in build. potential in well CECL our

$X.XX We capital. to our be continue reduced protective we actions. of dividend quarter conservative take this and measured Second, to to

on our CECL significant quarter, with our implementation a deliberate to reserve be our excluding PPP resulting loans X. loss and coverage ratio, loan build before continue in October after X.XX% We last

initial loan loans. Our requests to total related deferral XX.X% of COVID modification round to of amounted

having make the we with implemented are disciplined we to sure a Our these second round deferral conversation modification right request, process clients.

requests. X is early closely. and deferral said, still the in a XX% are call, it numbers second round we total $XXX one. for process, principal The million That loans with, to lower this of approximately is for requests in compared interest deferrals monitor or in XX deferral customers of our round round number for extended As XX% will and new at tracking continue to

has a to focus increase been have our the ensure third and will segments. business realignment Our line industry. to our expertise that decked of through against specialization appropriate we right skills the This right organization the

Bauer, renewed We banker ag way. division a have appointed agribusiness seasoned in a our to lead Eric

drive be Our to retail costs. and delivery along business growth effort. core clients, centralized deposit that model our will our continuing retail to implement been simplified will Karlyn's Her consumer with a deposit deeper has under down priority drive with relationships

to manage enhancements forward and leverage will business have need Great To originate treasury Historically, our I noninterest am customer Western of at technology the positive commercial us a we have new and a this our regardless of and fewer the all risk. better our processed and Bank our size greater our they same small inefficient. established loans, about highly create business to that improve to and resources We commercial clients for monitor the way. significantly loans to will same management income on optimistic has complexity, end, and opportunities. impact allow our segmented This to support better center time, results. to the us is have to excellence awareness enable look experience of these

call financial Pete? our turn to to on over performance, Peter I insight the would CFO, like our for Chapman. Now

Peter Chapman

and Thanks, good Mark, everybody. morning,

of $XX.X was to which driven million million net income X.X% pre-provision pre-tax Just with by this above income, the was quarter. prior million start or a $X.X $X.X quarter's

of loan quarter. from million, This an a a significant a expense lower we mix interest declined from impact also in from increase saw revenue. stimulus were X Now volumes points contracted X.XX% to of cost $X.X the X.X% the PPP by the cost decline income XX-basis-point XX-basis-point to within of inflows $XXX costs the a decline drop loan yields large in XX% as $X yields was of million favorable March decline -- yield. NIM X.X% for quarter. interest interest looking a decline million from in by deposit offset income largely $X.X in at Net as and costs on basis was and interest income offset assets. programs. funding due result, income deposits prior only which Within deposits lower a in this at million, government Also a of Adjusted deposit represented included was March

lending. Our a there which from decline. investment saw in yields also, NIM X-basis-point X-basis-point declining to And portfolio contributed was PPP a decline

qualitative which of under additional loss pass-through the realized that a in care however loan all hit loan that income a The the X.XX%. $X loans XX% senior loss Our X.XX%, of $X billion methodology statement. incurred the in combination, COVID held yield $XX.X million quarter. support credit is X.XX% reserves our averaging fixed March $X expense almost that of beyond some charges, income quarter the yielding XX nature from getting of significant loans In related to -- billion in is to that portfolio floors value and credit make have included is Loan up loans repriced million million we variable fair item our these in provision credit loan provision of adjustments, non-interest XX% PPP. similar a increased loans, $XX.X at about credit portfolio value. this loan XX% charge a $XX.X as prior below on an yielding overlay of Related was excluding to fair days loss billion

Now loss million credit looking above. at that includes our charge non-interest income, net $XX.X mentioned of

$X.X million which in was million Excluding million quarter items $XX proactive one-off performance environment. during in the in to items PTO was we feel to which reduction costs quarter. The approximately fair the prior portfolio million at the were of $XX.X non-interest goodwill employees incentive-based Consulting $X.X were which for wealth of and a the largest the in of number result measured review as driver income, to million of $X.X was of due compensation. including impairment partly $X.X compared $XX an offset items, touched part benefit was upon million were severance business. nonrecurring positive Expenses value by was the a $X.X quarter. seasonal increase This third-party which prior income the driven income fees million realized management higher payout which while Mark million, small low overdraft loan $X.X and a of by our March banking quarter strong the which increase were million, for to of the actions due than for about mortgage of million and a Salaries this lower costs higher offered some $X quarter were excludes that is fees, a by lower earlier.

offset quarter, credit balances by will in from lines this increase action OREO like longer do we expenses, million addition, in cause unfunded costs. in to the will commitment These term, increases $X.X increase. were current were activity $X.X In over decline benefit reserve expenses paydown million but an unfunded where environment. the On causing on the realize so in can realized to there a take costs we'll a continue given stemming increase of severance short-term that

Moving on to capital.

this flat with total capital of held XX.X% equity common position and Tier capital quarter capital Our XX.X%. of X

of Our prior the quarter. X.X% a X.X%, from equity tangible was decrease common

that prior $XX.XX, in per value prior loans, improved year. X.X%. quarter Excluding from the share $XX.XX would increased the $XX.XX and ratio to actually book in Tangible have PPP further up the to

which share reflects focal quarter environment. our We we reduction quarter. protecting a key a of ending decision in mentioned, position this capital point from prior are recognize in for is per June, has Mark As dividend did XX XXXX the declare our $X.XX the current the dividends

COVID-XX, clear. impact cautious quarter. the Within inflows environment. subsequent consider related reduction our by during increase $XXX in non-interest-bearing $XXX to levels offset loans remain to due in billion monitor environment in rose was the time this was million paydowns to in and continue mix billion confident C&I in $XX in COVID-XX Loan mainly Non-PPP in both deposits context Deposits consumer due to an line million portfolio. estate we're ag of quarters, with almost significantly given capital the with PPP become stimulus proceeds While and growth being $XXX million loans $XXX improved of real and levels $X the dividends and so more increase uncertainty primarily million the maintaining million we're from We'll $XX.X contracted growth receipts. and in by growth, which PPP should much including a related capital commercial strong, the quarter, that current deposits.

hotels, chart Slide Steve initiatives X at Steve highlights now few segments looking added the has chart, we've Officer, our with you'll on Namely I'll over quality also Credit those Steve. elaborating to Now you, Yose, aiding a to got key expand credit upon Over to see a in some discussing asset Chief along healthcare. and segments. ag and which on hand process.

Steve Yose

to since I'm time in good been part to like going able to and understanding of begin Well, thank organization, the some of commentary have improve it. be May, and stating a confident challenges discuss amount key joining our Pete. to we're actions just team some few initiatives you of a the In and we I'd key very I'm a initiatives of of also quality. solid how key opportunities cover and a and sharing short implementing the now results. my that to by are I'll a excited get I've related portfolio. the mix asset we

within the manage taking are two, expectations. resetting an and was culture category overall management I'm past the and approval by approval create a process. providing to or create further our differently will steps to focused an for activities as effectively accountable staging to three, relying mention a the focused on have developed elevation loans I that key risk higher help as and enhances and rating more earlier, process overall lift risk this and a opportunity the risk credit X-point steps to certain a credit an indicator; lift looking on these focused and accountability a system, system risk new granularity our enhanced with deterioration the to our quality. also credit and portfolio rating industries, limit more show better unified a and organization on touched category monitoring specialist on risk overall We risk-based the is fit our credit provide to prioritize They see policy ratings when forward and organization; special strategy approval ability warning and early new impact improve that hold Mark they'll risk asset leverages by risk roles the be more requires and and

loans. more results active Regarding moved we one One key as did up our hotel some senior on in the $XXX asset getting to quality moved and even accruals through for million. key credit we're credit problem non-accrual working metrics deterioration experience quarter, which to and

in their amplified While COVID by were troubles challenged before impacts months. COVID, recent

of substandard contributed one to senior Additionally, for annualized increase the flat loan smaller our the category. months X.XX% care plus mentioned to nine the Charge-offs continued for just with loans X.XX% care another senior trim quarter in the year-to-date. and

As of X.XX% loans risk new This and with our loan be will was up that its loans Western happy step a of I system ratio pleased rating risk Great and its new I'm at ended Officer, rating into excluding total coverage X.XX% to took approach. Bank conservative increase last which total and reserve quarter loss to the on Chief system objectivity Credit implementation of PPP. October see its greater development excluding total also risk the of PPP, loan the X. granularity

out in enhanced useful align migrating loan problem will new will begins. X-point be fiscal loan will criticized will structure, year mention for it will an when special provide of warning CECL Not October also portfolio. of more a past watch, adopt indicator loans a loans only Additionally, our said, X issues our on early it in better we've smoother and And management allow we as scale migration. the and

are While quarter. based would if weaker XX% the between X.X% reserve shows increase current the could have increase which and on economic calibration more forma current to to estimates we a to further do, the This our allowance for outlook. current XX% loans to environment X%, pro to increase

than loans, X,XXX update loans. of approximately for a more For PPP total have we million, about provided X% $XXX loans on is which our quick

or earlier, hotels, deferral top rest entertainment mentioned $X.X up X drink. P&I XX.X% under ended the food forbearance. being Mark for first X/X loan segments in with none modifications and the total interest-only and at loans with ground As were just and is of the being extensions billion,

deferrals of on regardless approved granting by XX requests the a financials, deferral and of line in, in with So were the in days second projected need XX large requests second far, round, million we've a the for In more are requests approved coming for collateral with and we when $XXX we March amongst at But customers. focused April, industry round. the reviewing values. financials during most the current majority first majority

accurate Additionally, risk timely support ratings. using to information we are rating credit assure the decisions to and

cycles am looking the portfolio, current and great portfolio. being As size new With detail, and in potential we focused is given is calls, care. been ag have emphasize Pete in health to a in in diverse want It some The has sector just against on with mentioned, the geographic don't also economic that a the of across diversified their earlier economy. soybeans overall, largely chain portfolio. has seeing on manage ramped The cycle risk. in and and also export both values restored. manage prices averages. correlate location Milk risk Supply diversity doing extremely the progress general the their up. have of segments are diversify, manage been diversity well national me environment extent I ag diversified has over The and risk the over segments Pork I diversity demand ag the ag the book exceeding are our improved to an helps helps earnings and hotels, that but generalization. footprint it covered highest the national sub with referring helps and portfolio always are to is detail the

portfolio. care is well. It portfolio in health as the to turning Now segment key a our

Some vulnerable care COVID and not. consider some be do health to to

of nothing of had sort past issue. have a with in widespread certain few few the but common surfaced relationships problem quarters We loans any

assisted and assistance. balanced social and hospitals retirement across other living skilled and services communities, senior We health nursing, care, are relatively

in XXX We skilled engage our therefore, $XXX include resorts. flagged relationships have hotels footprint and have given remainder totaling received boutique and Denver loan migration. South relationships loan-to-value XX% XX million within in we hospitals, in sudden of quarter some as portfolio Hotels hotels. with nursing City in At housing, relationships risk XX with is XX%, and XX% spanning is Dakota, These The borrowers potential Colorado round Springs cities. -- and cities of the We in COVID. it received is last XX Rapid the easier hotels, form XX% the of book. discussed XXX senior identify up portfolio payment to Iowa. of average X hotels Falls Top XX% and classified Colorado, the casino, Omaha, has and deferral make from hotel the first Des the Moines, round, and about with Nebraska XX% portfolio impact Sioux a stage, relationships second and this in currently and in the deferral.

these, We relationship of to and of to over should outside showing and segment expect and special higher I'd COVID. these to have million deem along rated to restaurants risk portfolios all risk don't and the environment migration portfolio. substandard current proactive the remain more rest substandard the X managing skilled We Of risk migrate identifying And and in only unfavorable. have we one care with say, relationships remain segments. senior entertainment hotels, nursing are mention

I challenges at a strategies we significant credit beginning for our of also focused stated quality place my to risk put us. the As opportunity comments, provide in which address asset have

Now to back Mark.

Mark Borrecco

Steve. Thanks

last quality good conjunction, measured our quarter, we question about I guidance, changes understand taking quarter, we that that have quality. in have greater bank after support Operator? better see employees answers. identified months to our make the my first And With ensuring and areas learned communities, our And work are point, to Steve's while and have Bank of portfolio this policy have I am to impact in the now priority, our asset mentioned improving safety Western conservative with we meaningful that is our and for what made and In credit have top four say we and for in I'm for I steps to specialization. have will we'll future. organization and a and Great what progress. improving the realize As do, and proud I made our energized time capital this protect realign At I to and culture. to

Operator

it go Jeff question [Operator session. Please Davidson. answer Please We question from begin the will question. now comes limit instructions] one first Rulis D.A. with and Our ahead. to

Mark Borrecco

Good morning Jeff.

Jeff Rulis

that the the on I And close -- CECL the Good spread the gap flowing related guess, kind of the sooner? I And the are in do and level, through we And reserve in current take that of provision? you versus kind do peak then between X the topic assumption largely to of morning. Thanks. of as I dollar -- I'd adjustment, lastly, expect you suppose CECL the adjustment just of just day accounting have provision XQ? be when the off I guess provisioning today? the

Peter Chapman

obviously. there, Yeah. a of in Jeff, couple so things

So of take sort gross just that's XX% if that the dollar XX%, the current our you provision. and to up of allowance by value

In sort And to this of he's we seeing in current we're or X Steve terms terms talk portfolio CECL the let thirdly, pandemic. quarter. levels in might in adopting then of have just advantage day obviously versus of sort is Yose the of we day now provisioning in what the X of

on the -- the December in environment adopt predict but to take what deterioration October in current terms which seeing ability X, day certainly, of provisioning Steve, hope the Jeff, portfolio. got of just not on unless rather quarter. sort than more we're during sort out be X But we're of is guidance, there When that. in we that a we've to giving a day in little certainly, quarter, significant is X we So to would far able

Steve Yose

remarks, my as the provision. see Well, large pleased to in I was I stated

as new the make also we looking and as big exam ratings a last mentioned comb a at on fine that entire have could risk we're If Officer, portfolio our examiners correctly we a fairly sure well did CECL you this with a Mark take tooth everything risk the coming you Credit Chief say implement want sizable in And provision. sure we And doing, we're with we far quarter, are making reserved. dealing X. to rated, you're day as outside quarter, who took provision. Protiviti

So which reserves on show I'm would -- don't day would the very I COVID be. our include I X it would but of would assume confident also will know impact provisioning, if would I be that legal think indicate that lower, the

Jeff Rulis

Make sense.

Steve Yose

you. Thank Okay.

Jeff Rulis

Thanks.

Operator

Arfstrom comes Capital question ahead. next Please with The from Markets. RBC go Jon

Mark Borrecco

Jon. Hi

Jon Arfstrom

enough. Good everyone. morning Close

six Let's if go way. CECL at months, that in we're another CECL. I of quarter guess, question adopted. was hypothetically, sitting first here

what fair saying up? You're today? reserves should capture of summing on XX% all this life credit way that of that based Is seeing you're loan a higher losses

Peter Chapman

the would on so. I know now, environment. based what say Based current we on Jon,

months, don't we what's forward know but now. six obviously, going roll in on to So based

Jon Arfstrom

Right.

Mark Borrecco

the the and risk why factors rating way into of Yeah. economy, that's I the in the we're talk over takes lot as as that's looking our a risk so that we're things of the other would for say all and next the that well the at I part when putting the six rating there's analysis granularity about months, of COVID environmental the portfolio, uncertainty. account -- in anticipation

hard that's why it's answer. so question to And a

Jon Arfstrom

Just -- guess, the question on the bigger I dividend.

process the the to to see it, $X.XX manageable thought and want two stressed, CECL it's manageable. six I $X.XX even go the it a but like reserve is your It an dividend little $X.XX. ominous of maybe I for more dividend to why the look is company, go in credit take cutting from outsider's Thanks. next So a around a going twice at more signals share. into months estimate the quarters just terms and in something a it to seems though detail certainly because little view, row, for to

Peter Chapman

so, would too. we Look, hope Yeah.

I we were while which itself around entered a for was of to with of are just probably the levels we a those couple point, ag as as looking the forward. the but NPAs. your moved capital we directly going, environment Obviously, time high appears as it's being dividend just uncertainty there's levels crisis where higher given Jon. to into industries related playing such saw elevated And so of crisis, degree as just this we aren't manageable, Certainly, more it all undeniable, Certainly, the not of uncertain banks remain to factors is with COVID, strong, NPAs. of that, are, perspective the lot entered we amount the in think there's a money, while appropriate with the us Jon. at of CECL but be from a prudent largest capital we outlook amount felt outlook it for into

Operator

The next question comes from Andrew Liesch with Piper Sandler.

Andrew Liesch

expenses A benefits. items question may some also sounds this consulting it there's on expenses. at and there I maybe the And recognize don't be and build making pace. onetime operating What's level some along fee And the technology in throughout continue salaries like other good But quarter? a you're fiscal way. that then see XXXX? for this trending how of upcoming you upgrades enhancements off do that to

Peter Chapman

From perspective, in Certainly. a couple this as baseline up, Yes. a million you've quarter. of there one-offs Andrew, of picked it's probably

on lower little run rate a be basis. would hopefully a it So

or But to the process quarter. absence little And if my at the some base, we're in looking 'XX, the ability of will We a maybe for though. We'll in at us comments, this are cost the pretty in outlook I terms moment. certainly than XXXX the a as then planning that in of forward And there's expenses take strategic through help opportunity XXXX. heavy going pull said do so. the lower that, to

next we're go work it's We forward the what process. but looks move that So tech terms that through in doing just of the manageable, we'll believe as at quarter moment we refresh investment to guidance like. probably

next to be we'll you quarter. give a So little bit more able there

Operator

The next from with KBW. comes question DelMonte Damon

Damon DelMonte

trends the a Just with this into rate some given additional is margin, interest and for core the liquidity quarter bit the you're wondering, up? give just Peter, if insight seeing you the where little could of expectations shaping

Peter Chapman

the a Look, Damon. a really it We we're of thought quarter, up better little Yes. this lot held others. than margin pleased with

seeing So pressure on certainly for next not the quarter, deposit costs. we're

we've So to there. we think of bit a little move got room still

quarter will PPP for is income next on the I flow how think this uncertainty through. just margins

So or $X sorry, that we might this about waivers, that just affect this prepays how the quarter. had early million on depending margin And of the quarter. of

is the bit So at Damon. that a to the probably it's hard wildcard biggest forecast that, that's little probably this one moment,

Damon DelMonte

And Great. of over fiscal just to you a think or kind PPP. What I are fiscal about few fourth quarter if more expectations quickly just point the first of quarters? on follow-up quarter it's next going then? Okay. that your for the be could forgiveness Do

Peter Chapman

there's to up now a the work to half, back or sit the back starts, at, but bit of It there piece depends probably comes of the up December year, stuff it's but fourth do SBA based But But and sense the so into and SBA quickly running. sorry, say. where PPP on our how on certainly, long calendar quarter, and to Damon, probably sense. our see end start, running, we come how moving just that's is is the this XXXX, we quarter would

Operator

comes from Janet The Lee JPMorgan. question next with

Janet Lee

ag the a on all I I slides. provided color have portfolio. appreciate you on question the

ag's standard and quarter. were relatively loans non-accruals flattish the So this

expecting do coming a and we now supply migration sort negative seems experience positive credit improvement in to we -- in see behind in should chains, a start quarters. start rating to Given as singular can we ag And mentioned, in prices pass strengthening to the is problem can't Understand portfolio ag you? credit in migration you the refer the thing. commodity that think you what the ag of as

more be by So details if can sub segments, great? you that Thanks. provide would

Mark Borrecco

we stressed in well. actually my As far significant They portfolio in as flowing coverage and see improving, we in I our debt mentioned as ag, fairly milk improvement seeing all prices ratios. remarks, are cash

how at as looking those. we're careful risk are as ratings We the far very being of

we from statements within stable, quality as year-end get see commodity we're in at anticipating ag hopeful least metrics portfolio. improving and we staying that your So I'm our our asset clients as point, to the trends

part taking type can uncertainty market today, portfolio. wanted cautious a We're all in the environment, to see There's one probably the prices approach. just I of with improvement. some we and of our the potential that's So those confirm do things. upgrade but we

to just asset point area anticipate that one that your So we is improving quality. do

Janet Lee

Thank you.

Operator

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

Terry McEvoy

Good morning everyone.

Mark Borrecco

Terry. Hey

Terry McEvoy

I CECL. decision in Sorry over the to There's going that back some impact time? is to I impact? to just to wondering, be elections Pete, will capital was process of the go believe, terms what or But capital you that can take, phase-in internally

Peter Chapman

Yeah.

We of can Terry, this to pretty certainly one at. we'll option exactly in any capital in yet, haven't we'd but look be those environment, formalized seriously terms help we levels yet will take, deferral which take

most one So options. finalize, the deferral of yet likely but to

Terry McEvoy

parts loan they a the review quarter, as last then what that -- portfolio looked in review in them the much they haven't follow-up, at previously? to of they third just could trying And of if portfolio. all you. And how current Thank How certain be the of gauge the review outcome the this engaged much you quarter? to did did

Karlyn Knieriem

morning, fiscal have XX% were they of is they about we They're this about Karlyn. This we review at in our Good -- XX% between portfolio. scheduled last year-end, what complete. to The will, which our looked about before review and XX% of Terry. quarter, X/XX, XX% -- will

Terry McEvoy

you. Thank

Mark Borrecco

Terry. Thanks

Operator

to question-and-answer our session. conference the concludes I'd like turn This --

Mark Borrecco

Just one more.

Peter Chapman

think one there's in. we... just I'm I more popped that think sorry I

Operator

I did right. not see sorry. All I'm that.

Peter Chapman

at problems No all.

Operator

is James Raymond ahead. go with Long David announce. the next me let Please questioner. Well

David Long

rates you're understand better. drill any for jumping to the down bit Thanks color bit there the a you want occupancy Made it, little just on to in. that on seeing? provide portfolio more the [indiscernible] hotel a risks little I Can

Steve Yose

significantly. our at anecdotally, up states don't point, opened you -- have have Well, of look footprint, I a that to I Mark's would we lot just if --

of other to are of the and And see South more weak, of Dakota. definitely is vacancy where some some example, of to XX%. so to XX%. parts Arizona then really weekends, occupancy areas XX% course Nebraska, the XXX% areas very the high like close rates, in And for parts in We

across a hotel also mix our So really I to corporate. that some either personal it's emphasize or the of XX% board. sort, guarantees does want of have book

Some those guarantees. very of are strong

a though be that guarantees. we even So might the does do struggling, strong have core have book hotels

travel. are that it those that to upon will hopeful tied the just continue hotels. business business really the is to the that So we're ones board The location. depending Those are up. across struggling most are But hold

quite vacancies travel more example, especially, those, seen Denver. like in areas we've where Omaha, so see business in we low for And and

David Long

credits have -- a second a portion gets I the XXX that me you or telling past portfolio. the as to Got you hotels. the deferrals, in get gut's talked was -- after it. regulators of a XXX discussions or XX I with lot My those deferred I days? had of of round that participating see will on that about days question lot at But day, deferrals those two that they if a would have And it guys point? well, you what be what guys of you to with accountants point, that after If need that to do happens big

Steve Yose

in of we're Well, the my what rating looking are talking the at we're it. approach. them guarantors, if got at those now, -- collateral? -- they've more statements, is that your I words, In other into also the disciplined what We're we Those put at can risk now round, We're to made second you asking money look take looking a maybe those. additional customers. stronger to more

anticipate, trends, hotel asset this we we portfolio do showing quality the hopefully portfolio show anticipate uncertain in ag So will improving some markets. while deterioration

we view looking will TDRs tell prudent have I will some at clearly. up this months. we are ones take And which And that But portfolios. if can't of risk you those some in we potential that to frankly, six of rating to longer at those relief And of if we portfolio. something at. do and a so the is go we on than will it deferrals, point. that be But do have are at looking those look we conservative

David Long

my Got I Thanks lot for appreciate Thanks question. the taking it. again a guys. color.

Mark Borrecco

you. Thank

Peter Chapman

Thank you.

Operator

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

Mark Borrecco

operator. you, have can provide of just us any again, all other questions, you. joining Thank And additional the safe, great thank or information to you know. Otherwise, call please and answer stay let Thank we a day. If this morning. for you

Operator

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

disconnect. now may You