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Great Western Bancorp (GWB)

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

Good morning, and welcome to the Great Western Bancorp First Quarter Fiscal Year 2021 Earnings Announcement and Call. All participants will be in a 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

and Andrew, Thank good you, morning.

Karlyn for have we us Financial Steve Officer; and Officer. Pete discussion Borrecco, President Officer; and Credit Chief presentation Mark Yose, Chief and Chief Risk Joining Chapman, today's Knieriem, Chief Officer; Executive

risks are discussed. the a have future the from that forward-looking disclosures also and an website which We'd cause to and results for of for today's actual in filings download like the to at outline uncertainty, which factors. today's Please ir.greatwesternbank.com. may through the contain along materially our subject to differ As is prepared SEC risk with earnings that earnings for contained you available forward-looking presentation usual those may materials on statements presentation we to periodic refer statement website company's remind webcast for review, Investor Relations

presented non-GAAP measure please included such in performance are and results within and financial to any will assist upon appropriately filings. now and over non-GAAP further the ahead. Mark a I Additionally should Mark relied you the measures go Reconciliations turn SEC provided referenced for understanding actual be results. call as and Borrecco. are trends measures to presentation not of financial

Mark Borrecco

you Seth, and safe good continued joining Thank remain you, I morning. for that these call. times. you Thank hope the and during healthy

the want great in first customers to life for I enriching our thank for quarter, to our Great the communities. supporting efforts and results Western their strengthening employees Before continued we Bank share by our make our mission;

priorities shortly. am upgrades X, by in of at managing deferrals. to the $XXX slide We also made X-basis performance, deferral improve, classified one. better remains payment a future. loans sale top the customer’s, priorities current point made progress will soybean million. decrease safety peak in balance Agriculture made costs. position ensuring Western million in January our bank's over in management on our number on progress decrease With with excluding the million of derisking employees on on net loans. hotel as of risk likely XX% a the asset pleased a result billion income regard sheet next our successful and measured specifically loans For referrals our down in working margin future quarter, specifics support completing our with of decreased in From quality XX% XXth, our actions Great continue $X.XX to excited from progress commodity in we loans made our to corn as financial perspective $XX.X I was and progress XXXX, total net $XXX We priority our financials discount. or PPP interest the in regarding this the with workouts through quarter reported prices, progress and the credit a upgrades I'm the quarters. We a will which first particularly and customers our deposit walk for one. of helped few about COVID progress and resulting that We round we a but X.XX% Pete fiscal year our to decrease nonaccrual X% our after of of loan of

our CECL loan we quarter. focused Great our September Western adopted with recoveries earnings. in NIM made position improvement through from XX year-end, basis addition, workouts. In has capital fiscal this points strengthening We benefited progress Since a of resulting from

later. Management. is Wealth of important allowance From noninterest will progress to Our hire recent our we credit make for attracting ratio expand X.X% standpoint, President this and was to loss excluding organizational coverage wealth of talent Pete Great Western in top X.XX%, on comes quarter of an experience revenue Rick and end continue income our senior the commitment for reinforces with with loans growing PPP it total roles Robinson which our to category. Rick extensive Bank our as comprehensive

are pilot launching And our client and With will also will capture segments pursue commercial this originate more improve market. making of leading opportunities to business to can our in the us This and how our March. our business our lastly, manage implementation I and time directly center to bankers, business the commercial fuel them leverage experience this customers to addition, up our progress way small in small We improve key markets excited our allow footprint. and banking to in decision with more free that relationships. XX technology significantly we this now we the business and processes team lines closer to and our future our to am growth. our relationships will segments I'm initiative larger underweight allow in get smaller understand

renewed service a commitment, on trustworthiness. continues teamwork focus culture company Our accountability, and evolve with to

of review financial results, a Officer, for Chief to Pete? the will Now call I turn Chapman. over Financial our our Pete

Pete Chapman

Thanks, everybody. Mark, morning good and

lower of see from assisted loans helped strong mortgage quarter driven in fees by prior net income and slide Strong quarter revenues to an this and spend. increase from as payoffs. of which accretion and other OREO Just non-accrual $X.X of million quarter of from $XX loan payoffs support million, benefit non-interest fiscal from interest million consulting were $XX quarter increase tend interest in million swap here, a track of earnings lower well. recoveries expenses, with travel the further income Net by with a and $X.X million, QX X you'll did we $XX $XX the in pre-tax income looking of an had income income of pre-provision million at prior net

We're by six Adjusted basis by NIM Securities slide of NIM XX decreased funding mid-last of basis are current in points $XXX declined forgiveness loans quarter. of and by $XXX in reflected accretion to $X.X those quarter that the NIM costs $X.X basis the round on for the total remaining participating in fees the when points cash point $X offset be On as Turning And interest and were declined underlying a X, to was $XX for decline. since from show amortized non-accrual accepting XX-basis excluding this of loan also billion to of loan slide income of recoveries $XXX Adjusted for to have million from million, PPP contributed forgiven. prior excess week. million processed liquidity increase X.XX%. originated loans We points quarter. PPP $XX million yields There's X. the additional increased PPP quarter. seven interest and the we from income applications during million lending revenue loan net out increase prior and more the assets XX basis been points lift million X.XX% an approximately quarter. was million to

that rate beyond Our of $X.X billion XX more loans loan XX% to portfolio yielding billion make these $X.X by than yield X.XX%. portfolio of fixed loans PPP. Together reached loan yielding of continues X.XX%, loans $X.X X.X% billion be days and floors yielding up have supported repriced excluding variable of our

at the million from X. an improvement $XX.X quarter. in prior million, Looking income was Total loss the $X slide non-interest

million that in customer swap transactions, X, supported occurred up Excluding the the from expense million several of sharing largely and FHLB slide the FDIC of prior to quarter down from from increase was ago. service were related slight prior to that income a revenue. through increase severance and income expense, The loss go in costs. charges in non-interest in closeout the significantly million value was non-interest and $X.X a $X items one-off revenue adjustments OREO increased $XX.X sales mortgage million $XX and quarter by million, such of only year $X.X the were On quarter fair another of expenses strong closure as agreement, provisioning core million on slightly $XX branch other decrease prepayment

quarter this quarter pick salary spend. the and to than by decrease track -- that primarily professional $X expenses to further from on losses referred up that Provision the million and of the spend fees sales consulting OREO in $X FDIC hotel March result lower lower $XX.X March by was in quarter, driven and driven typically expect is insurance quarter, consulting normal lower prior kick First and in back lower annual We'd as increases as a expenses credit lower for in by costs, also Mark of reflecting loans merit was million million for a quarter quarter loss on to increase. expected the earlier. and

portfolio such we to resulting in quarter and certain decreased X, concentration have was net CECL. hotels. the improved of $XXX end ACL summary in slide of $XXX ACL to the begin from million million an due risk adjustments by the Moving At in The million unemployment to $XX impact to of the loan one segments allowance day adopting qualitative quarter. million related charge-offs assumptions $XXX a partially increase offset as showing to

capital a slide against X, Common $X.X unfunded to XXX fair XXX Tier million In equity our current to Total addition coverage have our total to basis Tier capital value XX%. loans. basis of increased points by see capital PPP excess commitment million the a $XXX X.XX%, million credit we to have $XX which our excluding also reserve, mark fixed aggregate million puts We'd long-term rate all-in $XXX points increased increased mean X in well we loans. On XX.X%. of basis XX.X%. levels. to ratios well-capitalized XX X points ACL,

than to per the ended the capital in asset the close once with current the Consequently, billion, quarter quarter. largely to quarter. reduced driven increased quality loans quarter which to remain $XXX We'll capital for conjunction in for $XXX million level continue by -- decreased in helping are adoption ratio tangible like. and $XX reduced shown to assets, up $XX.XX prudent levels ratio improvement PPP X.X%. we our CECL. for was declared combined given also is equity common excluding Deposits of that while our XX, balances XXXX. earnings $XX.X $X.XX again CECL management average a the prior compared is share have December elevated per tangible with contributed a the the million environment. X.X% the Our for continue assets value quarter, we which the actually risk-weighted And were of just book will classified and would which the but to evaluate capital preserve decrease net believe prior to continue from support good share, over dividend dividends Positive our have more to quarter of

Our X.XX% measured points mix interest-bearing lower a deposit decreased is basis of improve year prior and including rated $X.X $XXX average the deposits million were to the credit at of deposits XX points and of average continued $XX coming increased $XXX down million deposits Loans intentional of by PPP million included and a and million as approximately points XX basis non-interest-bearing loans, improve loans with quarter decrease our increased seven time in from end XX% repayment The hotel $XXX This $XXX of of this million Total credit the to million. the million. from COVID-sensitive and higher basis $XXX the the loan billion ago. cost actions average quality. period costs of of from portfolio. $XXX decrease sales

loans provide key you an I'll In million $XX the Chief Steve. addition asset to Over to call hand Steve and the our PPP update were now on period. metrics given to Credit over credit Officer quality during metrics. you, of Yose

Steve Yose

Thank Pete. everyone. And you, good morning

on and on are quality in been we our the have We asset quarters that commitment. few heavily past focused progress showing improving

administration. portfolio focus management Looking management, slide credit of pillars and three our effective the XX, see fall at risk credit you'll specialized into

effective First, risk management. credit

our Our a classified and approach We challenging exiting on metrics new loans success spite in risk-based consistent backdrop with few in a by decisioning. managing problem saw portfolio in with to the the cultural is more non-accrual of risk system driven and upgrades. by alignment in and is identifying along and improvements rating risk

Second, portfolio management.

risk and specialized made deferrals now sale million PPP. of earlier, credit in significant the hotel of are portfolio in And loans touched progress Mark improving three Pete separate of total on administration. third, $XXX X.XX% As completing our Loan we transactions. excluding by loans

smaller credits. small be more the with allow will administration us of Mark earlier, business on our efficient to As touched initiative much

progress Our strengthening management, pleased further our to work position how and assessing credit criticized on on of is with workout are groups ways loans long-term. and what loan out commercial are making concentration. much I doing our of hotel asset our in particularly on progress we optimize am quality

the million. reduce casino sales Also market hotel, in footprint rated have The segment helped which do, $XX We reflecting the of the of On are quarter. leading and involved sales a we information on but spread which of remaining the The slide and The locations the criticized million were PPP. further now million X.XX% sales and Hotel sales updated see to we headway. $XXX of excluding $XXX $XXX That you'll of to making a across proceeds decrease a work out million. by led completed at $XXX combination XX, The discount. are spread or loans on with XX% hotel across X% is ended balance million loans, discount a pass loans criticized properties hotel $XXX XX, on on have slide charge-off XX.X%, to million or concentrations. loans for of reduced tactically culturally, and decreased of excluding several segments. loans other total details to $XX the quarter. to in down deferral, the loan more deferrals XX across ultimately loan million the properties quarter impacted

hotels, latest Net charge-off $XX.X asset quality $XX decreased million Classified from were X.XX% a a excluding related the loans Non-accrual we by and to still slide a non-ag to XX, matrix our segments mostly of of casino both largely overview by you'll to workout we We $XXX of decrease continue prior slide in increase we loan and $XX driven of XX Classified moved Classified expect loans partially cities a total of and driven On excluding slide the XX% of forward. our hotels properties than -- South loan in small Sioux annualized. Colorado; to hotel the midsized were have from summary out-of-footprint substandard the million $XX five developers. experienced Omaha, to portfolio associated diversified our by in million and our requests PPP in-footprint of decrease loans quarter loans Dakota. On Dakota; ag were of deferrals for number have Springs charge-offs South Colorado, locations an million going more with XX, with book of to would XXX hotel and concentration Moines, in just and round decline million see of given $XXX loan the with loans total the or an offset quarter. The the Des across hotel $XXX in are a sales $XXX is just Denver, in sales. million Rapid $XXX hotels largest related key metrics. total the consists of casino million Falls, $XXX of loans. generally group. quarter by $XXX of most XX% X% non-ag XX% the payoffs an in-footprint portfolio. Iowa; upgrades. provide in prior million million On downs were few a loans and ag X% Nebraska; XX, commercial million, pay hotel million, City, loans Colorado; accommodation of relationships from million $X.X

well million portfolio of classified. the casino has pass $XXX are payoffs and ag On across $XXX XX, of the as and the High segments medium for combined estimates conditions hotel with constructive of including criticized indicate various loans and slide Following remain both corn depleted million from hotels. certain term. loan ag are to that sales, of we the the $XXX diversified the inventories USDA a proving those soybeans. downgrades near number the level, see million you'll rated latest

for condition higher. cycle. care to $XX.XX and bushel with hundredweight a on our for comfortable assistance term. across care portfolio futures tracking the The strong in bushel my COVID services other remains wraps in $XX.XX near In $XX.XX to senior price from call projection in any top indicators. The us health in position As rating at nursing assisted portfolio have general the are farm now and communities, and risk Mark. the prices minimal we social December, engaged I'll back living That strengthened a early remain off of hand per to $XX.XX mix highly retirement stay stable corn with in up commentary. the October. hospitals soybeans, a in a customers after XXXX XX% of and in for has margins higher and potential indicate skilled movement health leveled a $X.XX and result, which Milk November

Mark Borrecco

proud decisions as I Steve. implementing the continued the that and with on to come. it emerging quality lobby good forgiveness, made improving forward session. and relates I progress the to the in am turn our asset to our will such I while the back call to We will needs origination in of the dealing team's payment concerns and continued focus quarters pandemic. all progress begin and question-and-answer win big stimulus Thanks, QX addressing as we With initiatives operator performance, business look processing branch and PPP

Operator

The go from Terry comes ahead. Instructions] Please question first Stephens. McEvoy [Operator of

Terry McEvoy

guys. Hey, Good morning.

Mark Borrecco

Good morning.

Pete Chapman

Good morning, Terry.

Terry McEvoy

is, occurred? spectrum you. the the any after we you start or middle Any the did could about these just of hotel and properties could just were of road? you. distressed-type I'm if from when be loan before? Thank you if buyers? change on Steve, Maybe, these more portfolio loans, quality talk the pricing And then maybe how the the of last And helpful. hotel interest sale transactions of there change, level Could think maybe comment color part the vaccine you with about would your curious, pricing

Steve Yose

criticized question, say classified the part last Well I that on in your declining we those or of were would focused trends. either

our not So focus we on -- properties. more they're nonaccrual, did of but more they distressed were

focused end market also on concentrations. We

sell went and on higher buyers focused hospitality really seeing where focused on distressed had we anywhere we loan So loans. if loans. the much not that a properties could were those, some as concentration to the we felt We we performing as of

a able and the over And will take we of we've the to sale discount. announced, look potential When we performing. did see more at to a sale. if much far been had found pursuing consummate we as XX too nonaccrual need on for not big loan days if say were well they hotel the I vaccine So not being to quickly things was that to after as accelerated this

So I I pricing on the did different in of accelerate wasn't particular any really, the because prior if sale did don't but because it vaccine the the those I the significantly us. think interest help vaccine pricing know announcement helps it do discussion properties. the believe to

Terry McEvoy

Thanks maybe a question for Mark for then that And or Pete. Steve.

in of things and on how small focus thinking to couple XXXX. about spending Is last hires spending we've Just there operational going to and like specialization relates and some heard come? then, how impact and some more The XXXX? alignment the that Thanks. business. And expenses in about to the is quarters that

Pete Chapman

there. budgets Look up I spending think and usually up finalize I you'll see year. lined the little in we're said, as little just slower for pick people Terry, Yes. a as QX a get

look tick to So still expect up. I'd

think rate. we've XX% I XXs sort XX% as previously, sort run of of low to of a said sort

So projects come it's going year. run the is the that the feel investment certainly feel rate. a got for within make manageable we we of next up quarters, we're on in couple range running to and but that still will We've of sort manageable some

Mark Borrecco

some I be And But I start of with Yes. think these what only also feel jobs. employees client do we their able we to rework make the improve do to experience, we make we it improve can technology, will back as have. to the easier as we as more comes into for we for that some of me our comfortable our that the processes, is do Terry, things investments, focus not

us growth without our see And massive with again will will in do to that a overall us increase that that fuel future help more having those so investments spending. help and

Terry McEvoy

you. Thank Great.

Operator

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

Jeff Rulis

Thanks, morning. good

Mark Borrecco

Jeff. morning, Good

Jeff Rulis

Maybe a question for Pete.

if X Is it recoveries down to margin points looks recoveries figure like the maybe you outlook? etch margin core in linked the basis and quarter. -- accretion that the just if anticipated more On are speak and/or

Pete Chapman

Look Steve probably not -- sorry. Jeff

obviously In terms hard recoveries are predict. of recoveries, to

a then forecast, some, I hopefully in in to get trend just pretty would certainly terms down general hard think. there. just they're I'd And So put of a see margin tick but

this as with those at, where will we'll sheet by PPP once driven loans mix the slightly part of the just more next think sort just expect of again to think quarter as assumption I forgiven I'd the continue quarter here at is cash -- softer of will a quarter in is, moment, that be tick I next the investment up see and a softer of drive sort well. margin the which to in levels balance

Jeff Rulis

for thoughts think And Do number. the check? just Okay. -- year as those on net -- -- guess you level do balance the versus the start there? charge-offs Great. volatility And gears the reserve on the of track interested any I at this -- looking some at those kind here you balance fiscal healthy switching but in pretty of to Thanks. relatively release provision, reserves, in a

Pete Chapman

help in this driver jump get levels one. a provisioning the need I'll will over Look I as be we NPAs and But year but course get Jeff. to well Steve to with big That think, the down obviously Steve? of of

Steve Yose

we're we at at uncertainty at this the of economy cycle. where part as what you there's looked the of believe look is mix our in and I of portfolio still our

we are in look the at with as those definitely our to hopefully that we we the look But CECL level of if looked loans loans be at in of you will able where improve allowance. our allowance within at go to coverage the we factors and nonaccrual to qualitative nonaccrual reserve. able our point, Pete's So

Jeff Rulis

Thanks. right. All

Steve Yose

Thanks Jeff.

Operator

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

Jon Arfstrom

morning. good Thanks,

Steve Yose

Good morning.

Jon Arfstrom

I nags emotional guess it's and that a start, the we ag better. be you has think your dives before But of it Steve how thing done and question get Jeff's kind one it. kind see comments feely and generally into the have follows about sales question of we still I'm can guys just of when question, the to And that more up this deep thinking come non-performers loan you these I but about down? your at to credit? for meat an do on the magnitude But and maybe the of feel timing touchy you stocks.

of you curious kind can? just all of script I'm off you if how about So it feel

Steve Yose

touchy when look we one future the Chief as had as right -- that feely returns. And institution to a risk-adjusted at to -- Officer, it's we've things the and very question. get always Credit fun big comes get those comfortable too the with positive But cultural as feel don't it of I often. I Well I is change believe growth, at not as and is always credit risk growth, we the look way it I look and the are right an putting at on. bringing risk loans how how we just loan but the look we at

So sake, loan business forward loan are growth it's and we a consistent we how just book not the for on we to growth's focusing to but that risk definitely credit going culture. sure -- grow continue of retain make

huge the strides So made culturally. I feel we've months last six in

think in seen improving we've We of in the improving trends. two ag well. because to I as quarter. quality we anticipate stable saw quarters mix next of agribusiness, our book this do We asset also that anticipate the

encouraged very book. I'm our agribusiness in So

to I'm more that more our strategic another But really good area focused We're portfolio. at is looking can portfolio at trying that than sales. as the looking vaccine months and other over loan to rather very next we portfolio hotel time much sale we because the derisk portfolio. about the an are we hotel big right-size and that of six future I how not feel things of look we encouraged and portfolio As at our look

it going not that we strategy get it, quarter, -- to necessary felt forward. last to a we is like did was derisk So but this

very point, this feel and about I change. comfortable So our positive at cultural

need to focused just to improve quarter-by-quarter. we stay Now and continue

Jon Arfstrom

for helps. difficult complicates in your it. Okay. a to I CECL That then like yours for where know nonperforming But you an And bigger be level eyes? bank term? picture and term, a you. Longer acceptable maybe it's question another would reserve what's question like in longer

Steve Yose

down I at And if there similar-sized, And look when mid-tier think you moved bank balance. a -- prior my Well to XX from we good I I points. non-accrual a institution. came that's basis non-accrual at -- loans

go ways we to So there. long I a have go to mean

focused our close if us way at keep look by forward but a today, I We've to long-term We've limits. focused our different think But say, -- that where at you a we we asset can done have risk than of X% quality. at And decisioning, less look so changed we've and XX your that If growth would X% arrived lot we've feel we in rating. those be the we to risk I And we and when like be definitely going that. risk looked the things to all basis should I us like points on portfolio. after about questions loan see on consistently then non-accrual non-accrual. will hold

Jon Arfstrom

to in they signs growth? do kind going lot markets? might other on see we resumption this just in there one the work Mark. I thing any I Steve's and of And was Thanks. to growth the I pivot But when you know think up. are That's of credit But part fees, of and things. expenses you've done because a some Mark, to kind is and of line your think life change all

Mark Borrecco

Sure. Yes.

answer – the a I'll from think I first. second part

getting some in I'm getting are signs the ago here Falls. things different activity and better normalcy chance year back COVID client of know I markets. I but of dinner the feel tomorrow have go normalcy. as cases to was down. We levels still businesses night to obviously number in it resuming. relates would see is day That life sense a Sioux a So kind our from say every good coming our that, the I We it see of in many in market, having with to of to a than that ways

we levels start levels. to seeing And very reasonable come are seeing am so activity I standpoint, I back think from and that to

next in as would I growth, us workouts, loan portfolio. derisk to have loan as would far sheet, As as we focused the continue expect erosion continue to that to see to to overall our say have, it continued hotel continue two to the quarters, balance for I we relates as balances, our

the for And things And quarters, numbers would I I the to next would after have expect to back see then to We've pipelines focus to go have to two that and I and see those of generation us for to say encouraged expect I business. so an quarters start organization. internal so would are this had back down. need today grow to by that. improving we two asset those get I'm

bit necessary playing But and asset been generation. are focused on evil the more now that wasn't to the our last we asset is over that a changing organization have quality. months pivoting nine We given be and defense

very market We offers the a focused think have of bankers. I in and we have some very aggressive set commercial

would would that asset from we those then that follow from pipelines grow so see two growth I that and think now. standpoint And quarters to

Jon Arfstrom

Thanks. those hopefully Good. of issues credit on Okay. rest. seeing you. Thank congrats some And

Mark Borrecco

Thank you.

Operator

question of Andrew Piper next Please. from comes The Sandler. Liesch

Andrew Liesch

morning. everyone. Good this Nice derisking Hey, of here. some to see

continue Where kind good want theme casino year? a move level, we just same now XX% a to through the concentration as loans, Just the with of and down mix hotel the good that about for do think to portfolio. here book of the on is you the

Steve Yose

So in portfolio the $XXX like million. longer under term see to I that would

few – that like the would portfolio long next over quarters under like to a period over be So overnight $XXX and million as of but wouldn't basically. we we be time have that term

Andrew Liesch

book couple in we it the see like sounds it portfolio like do in growth couple optimism of should what quarters. types. here good think it next there's might of the sounds by of runoffs continued loan in And you that quarters? But it. next some be Got – we'll Where other see masked

Steve Yose

but continued quality have And wouldn't of a there a we And of lot growth in still focus got agribusiness. Western I is agribusiness continued in improved focus asset also anticipate we'd we've agribusiness. Great say Bank. Well

hopeful business, Mark to a some might course our as But focus on the be business that And I on areas initiatives on we're well. growth we'll continue of other So small of will more place views portfolio. and think we'll then small that focus. other with have that

Mark Borrecco

Yes.

I Great growth I book think the the ag, at and but overwhelm, I have Steve again it expect some and initiatives focus the that as and mentioned, a I at at see we to to there. on that of the growth. to consistent to C&I look C&I be Nothing growing, look focus relates would Western. some moderate sector

more owner-occupied just overall as then real And that. in well. estate growth expect would I so And

see to So get growth. continue that's want our to I help where sectors three those again or fuel and segments business to three back future see to those start us

Andrew Liesch

recognize helpful. the I in some industry guys to seem right ratio reserve of out non-performers And it's I highest That's worked going down. need be guess you back now. there's then reserved. well that uncertainty just But Okay. the to credit there the of and still the pretty And one level

on I'm this the even near to just why million commentary level – So would forward? need going provision $XX any stay

Pete Chapman

mean? in Oh P&L the Andrew as charge you

Andrew Liesch

provisioning quarters. coming smaller Yes, it opportunities the in much for seems like there's

Pete Chapman

think to that. Look few too hope, we're back but I so early victory on a certainly away getting the normal. to We'd still declare from world quarters

we early one. that maybe few revisit on Andrew, hope little declare but a so that. Obviously, a to So can we quarters

Andrew Liesch

the I’ll taking Thanks All right. for step question. back.

Mark Borrecco

Thanks, Andrew.

Operator

from comes Damon question next The Please DelMonte go. KBW. of

Damon DelMonte

Hey, hope good today. I morning, guys. is everybody dong well

kind So loan question of PPP forgiveness curious just on your my first process.

overall of kind the of than your others. as which was think seeing you quarter, percentage $XX loans a a like forgiven PPP I what during with guys we're lower as noted were loans lot million of

during what that your curious experiences some with quarter. were So, kind of last the just of on

Pete Chapman

Look get Yeah. just little slow to going. a

look XX% at $XXX,XXX. you balance in is that below If Damon about category though our loan

we've feedback off to that So is from like required. customers of advising and firms the level the the lower are was lot CPA of forgiveness documentation got a until hold just –

lot Damon. think quite of So be to I drove you honest with that a it

So bit hopefully, it this up little quarter. picks here a

Damon DelMonte

it. Got

little then Okay. quarters? of few go can your we bit expectations Thanks. next the on for a That perspective makes income give And Pete, just as fee sense. you through

Pete Chapman

I will strong unseasonably are volumes to just rates. Mortgage still think lower hold due up Look, Damon. it

last maybe at but that So fee think the as I in least of other the the well as quarters, income will we've in hold seen couple pickup item. not line

So don't look huge I growth think see you'll there.

seasonally, I quarter. hold Just it certainly, will this in gets well. it little in bit think slower here a But pretty

Damon DelMonte

right. Thank very you All much. Great.

Pete Chapman

you. Thank

Operator

from Please The next question comes of ahead. Janet JPMorgan. go Lee

Janet Lee

a in Good morning. asking question have this that On way. reserves other different I feel I'm asked like people

be that. reserve or would reserves, several see levels So in with comfortable apologize it that more releases But reserves? might What to we on you being release accompanied steeper to like that NPA of for in order for be step kind it quarters NPAs order a – step see away us sounds down that. and in for before down be releasing

Steve Yose

about coverage – have we X.XX. Well, at is if you non-accruals those of our our look

happens we think we'll successful and with have or loans is hotel go mean, concert have nonaccruals. just other nonaccrual to reserve nonaccruals. example relationship a at we're I issues by it those I think also taking five reducing in that larger in quarters, next And look think, see But some if economy what but in really I nonaccruals, we approach in the loans, driven the would for others just that. are like do four careful we too in the to will two those improvement are I impact that. the

success those well make can loans secured. are on they we if So

an have updated We appraisal.

So are not exposure do we lot loss of encouraged that, a we see there.

as improvement that turned we'll show that's So the we hope reduce corner. portfolio is those when we've our that in feel and hotel a

Janet Lee

on Great. loan growth. Thanks. also And

the more growth that be intermediate the plan relatively color upside of liquidity? deployment your more So around excess term. what's provide it modest Can loan with term over appears near around over you will the just

Pete Chapman

a a to Yes. bit a elevated perspective term for of sense would couple make We've to as quarters little here those. next but well. Certainly, us from borrowings of doesn't be lot balance got Janet, FHLB expect the it left, really of sheet I prepay

next quarters' we've a and softer off of carry look redeploying for deposits any that levels here volumes a higher Mark couple of here quarters be So loan before as that in liquidity we'll got, as cost more time. of run are just really couple said expected little the elevated that carry really to certainly

Janet Lee

Great. Thanks.

Just follow-up me. one for

paying you and on elaborate improved of on deployment Thanks. can the given potential the for So plans for you a industry your guys well, just outlook as again including repurchases? more capital share credit or dividend

Pete Chapman

this Yeah. Janet. plans Look stage, no at

in probably the are with As elevated like more and NPAs consistent we'd still said so provisioning discussion. substandard my I than comments,

sort capital here. metrics move actions any we those forward improve on of before see Let's

Janet Lee

you. Thank right. All

Pete Chapman

Thank you.

Operator

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

Mark Borrecco

And Thank us. thank again, for you, joining today everyone operator. you

If you week. out Thank any do great safe reach to Stay questions, you. have have please follow-up a and do us.

Operator

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

disconnect. now may You