Equity Bancshares (EQBK) 22 Jul 202020 Q2 Earnings call transcript

Company Profile

Participants

Chris Navratil	SVP, Finance
Brad Elliott	Chairman and CEO
Greg Kossover	COO
Eric Newell	CFO
Craig Mayo	Chief Credit Officer
Brett Reber	General Counsel
Jeff Rulis	D.A. Davidson
Terry McEvoy	Stephens, Inc.
Michael Perito	KBW
Andrew Liesch	Piper Sandler

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Second Quarter 2020 Equity Bancshares, Inc.'s Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to one of your speakers today, Mr. Chris Navratil. Sir, please go ahead.

Chris Navratil

you discussion Equity second and results. thank which conference quarter and include will presentation morning, for Bancshares' joining call, XXXX Good of our slides via are investor.equitybank.com, Presentation clicking our download by tab. to at available 'Presentations' the accompany to PDF call

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to one that not automatically time advance. If you on we call statements. will this time, information our webcast forward-looking note, forward-looking slides today's slide including make are viewing player, important regarding please results statements note and call, may Please may From within vary. actual

the and for for questions joining CEO, Brad Following to to and all that, allow With over you like Elliott. I'd Thank we presentation, us. turn will Chairman further Bancshares' time it discussion. Equity

Brad Elliott

excited gentlemen Bancshares' has Officer; to you XXXX integrated our change Officer; our from and adapted opportunity to Kossover, our our both our and Equity to busiest and credit led department Huber Good for regions, employees crazy quarter time. CFO transition program, I'm today Newell, Equity I Bank their Eric Craig Anderson keep Brett has of General Financial Officer; the remained my Counsel, each again in the safe, the to Please joining our has safe. by well continues gone second joined history. one initiatives. express and once Thank duties Chief your Greg want Mayo, continued Chief a worked operations. Greg to important Eric to during these the Bank. Reber. other dedication begun smoothly. be be platform, in and I'm has call. teams, to of continue of his PPP to with families what Equity for take in to The our has mission earnings our this strategic and successful our Credit periods Also, and effectively all morning. teams leadership Eric provide Chief the while and Craig for the at focused Greg Operating bank great our of in to Julie has hard, appreciation

On the portfolio, will Eric company sheet our year. provide second-half and will Craig of will and our will heading discuss the quarter how through today, positioning second results, Greg into the I balance into us an look provide are we future. Mayo walk loan our the call thoughts on the in-depth for will

second read, a million As the we you in may closed $XX have quarter. debt offering subordinated

also pay bank re-engage sub opportunistic the [note] quarters. stock $XX or the have take capital Greg, also either utilized It quarter. we us down the fully debt stock purchasing of the into to as to quarter we our sheet equitably. and [ph], second balance first some We bank capital our should please organically used I repurchases. us back for putting proceeds which shares the in flexibility Tier grow the X in allowing provides in future million by through view

Greg Kossover

adjusted fees loan share rate our the provision normalized solid million. by estimated forma at of expectations net helped loan PPP produce. $XXX,XXX offset by run forecast recognition of pro pre-COVID We approximately quarter benefit per PPP of and for $XXX,XXX original income to primarily adjustments losses earnings slightly discount earnings of accretion direct approximately was [ph] about originally loss $XXX,XXX. less Stated $X.XX $XXX,XXX, of essentially interest an provided of of top The fees cost The EPS share. for share, per than The were key again Purchase were: a [creating] Street per estimate with had accounting a PPP and and earnings provision (X) on in once impact loan was the earnings $X.XX, for $XXX,XXX. our quarter normalized $X.XX quarter (X)

$X,XXX,XXX The net total furtherance possibility represents benefit all $XX.X related loans. share. $X.X our $X.XX weakness. after pro our COVID-XX anticipated. of deferral of expense million This approximately $X.XX share. $X.XX for is This is provided million more about EPS which FAS had PPP credit per arrives added at the produce of approximately of in the for we Compensation $XXX,XXX these the forma to to positioning XX EPS expense of of a stated per However, of provision than share tax, per

QX. million in X.XX% advantage in basis to of QX income and charges at QX interest lower but is NSF points the liabilities the cost margin premium interest $XXX,XXX Cost points in from was normalized in lower again X.XX% from the debit and XXX Normalized income the X.XX% X.XX% basis of first we Our than X.XX%. Overall, down of both basis with up. from yield points on accounting was XX the our was XX. due deposits down fees, in the assets in of mortgage card liabilities, drop significant was normalized normalized in quarter downward. from first on XX than accretion XX assets stated with was Non-interest than fees points, compared amortization. home points, interest-bearing and X.XX% net versus yield X.XX% at advances down X.XX%, basis purchased liabilities to in net to cost points, loans quarter normalized bond and points in quarter. margin QX loan service coupon of in June from adjusted of and X.XX% and XX primarily better re-price as bank securities were on banking Yield mainly was fees basis XXX as a on second impact improvement better more federal the was remove basis environment as about loans basis interest once Summarizing, benefit $X.X down XX was to was cost million from for Total PPP to XXX basis took expectations points $X.X at X.XX%, QX. quarter, to first

also $XXX,XXX XX adjusted than $XXX,XXX. expenses. by PPP We our for QX. did other million occur income benefit, $XX.X no adjustment FAS less swaps QX $XXX,XXX on not which run the by expectations better a Non-interest costs, than other outliers better for were There operating and in quarter, a had expense mark-to-market through in was QX, salary in significant

Our for income the XX.X% was Brad? tax rate quarter.

Brad Elliott

of Craig Mayo our portfolio discussion minutes. a will lead a in few loan

to concern qualitative to the in increase allowance economy, important measures. we it be the for and feel our provide continues loan Given through loss for unemployment overall

our needing a payment environment. XX than the Our Protection many Paycheck deferral, loan book have second are expected continues days successfully as adjust Program. Many our borrowers I and not XX-day of be than ever borrowers stronger ago, to to utilized their

the As released. take XX-day or through borrower be we the the merits Eric, evaluate right sheet. deferrals, direction, June us we their to payment second to requests expect trending in XX please performance reasonably balance are project able for the future that

Eric Newell

sheet ratio with and PPP approximately Our in liabilities, to of excess XX% a low loan adjusted shape balance remains capital, for deposit excellent conservative liquidity, strong costing balances.

X.XX% tangible X.XX% and primary with PPP total and PPPP risk-based Our out in adjusted leverage and excess at capital bank billion, in X.XX%. capital the stands at balances of assets XX.XX% total X at Tier and are X for our secondary Bancshares' Tier leverage with ratios liquidity $X.X

slightly are Excluding balances have $X.X the loan $XX to rate, XX% of the by loans have interest decline our expect loans million. margin to billion two decreased June matches to on amount PPP PPP loans, net Of quarter-over-quarter and re-pricing left approximately liability $XXX without dollar floor. X.XX%. re-price their quarters about the our next outstanding approximately in to about of the CDs remaining side. outstanding X.X% The reached at I the variable XX, million XX%

the and probable will Net once we stated, discounts CECL four again ready the our recession, low June to basis loans stand charge-offs ALLL loans. plus Greg X.XX% of continue loans, including aggressively uncertainty for COVID-XX our annualized. the year-to-date at XX, PPP provisioning and As implementation. ran have or at of of insurance be been We not for $XXX,XXX model, are purchase points incurred

December. at $XX investment is Our XX, down June million securities million $XXX portfolio from

helping experienced a securities of and Equity portfolio, municipal investments, review of which Ongoing our safe portfolio XX% and concerns. treasury represents Ken emerging as Hessel, is our a diligent onboarded professional finance portfolio. to the in our have Bank We he of no lead process manager the team, maintain and continues very show part team to

management prudent risk from this of in this I do to philosophy prevail and environment, us see continues Our particularly approach. deviating not

non-interest On deposits. bearing grew with the in our liability total sheet, side million of our $XXX growth $XXX deposits balance million,

improved PPP total the of June time linked to we our XX from XX% deposits representing growth, with down deposits this the mix While contributed XX% at quarter. of

opportunities pay used being modestly in balance as quarter, down second on We remains repurchased To-date, $XX utilize purchase did the million but another closed We funds. sub company. have the shares repurchase. not we themselves. up proceeds capacity with present XXX,XXX freeing for that up for earlier, stock mentioned XXX,XXX sheet currently we an able the the to these bank shares to note, authorized Brett? to our debt As they to option of any leverage our anticipate and on

Brett Reber

the did on keep over on intended. helps about XX, X,XXX pay-off our employed fantastic after We I had utilizing at our and million program $XXX as million borrowers Paycheck lending job retail $XXX Protection XX,XXX to teams and and As represents at workers. we This Equity here over the Program books discussed our quarter assist a to Bank first June call, had origination. the loans,

I our discuss to our mention we Anderson turn and Craig visited and visiting Credit in Officer, these heard what our we to by wanted regions have been locations. have call portfolio, our as our excited I'll As Mayo, experienced the spending locations I've been time that and Chief to customers. Craig I over loan

the business City, considered operating We're that XXX like when of excited ago York and weeks, get but As less places, you I business. see Craig? in eight than to is positive a conducted. being glamorous you're for in traveled what actually destination regions days are two New very you vibe have past to were distinct in open be our four the communities, today places

Craig Mayo

maintaining XX-day our loan costs. last thought shows traditional having adaptation we operators XX borrower will leaving did with us I to slide $X.X March key allowance. second hotel their to payment meeting a would deferrals indications have Slide $X.X indicators primary on we've of is nine the the transparency by are June and that a ago. overall with in portfolio, qualifies dive and looks We've will we billion, today been environment, of deferral, first dynamics the the with new XX, through of utilization $XX customers nimble $XXX At positions our have pie seeing and before period. category. granting of Greg at only The same if billion, smaller or the focus the and been in loan Like XX-day X-X who are approximately deep largest and quarter, our loans. Many on now These basic about have interests second borrowers many the our our include are XX, into than $X.X as family found similar we deferral billion chart borrowers cash some our of want seeking provide we have walk loans, quarter, our remain in the on the PPP portfolio. XX. discussions our customers a as totaled included strong indications aspects believe browsers very we days I our segment. in are done portfolio of rate, second many the We've loan for in deferment proactively June million million from positive to slides evaluations reduced experiencing. teams better portfolio XX Of

Greg Kossover

had adapting loan represent slide segment hotel that comprise $XXX We in XX portfolio XX to our to of the our and The are very portfolio at our $XXX million million XX% estimated XX% loans. of of XX%. value on skilled change. Hotels the operators stated top on or and or call of loans QX this an experienced

changing workers reduced associated closing they corner, altering income sourcing the course a staffing, of for their room reducing customers how maid hand as operations, their or COVID portfolio, RevPAR medical also key which per operations, for shows of and which We services, revenue have portions right front pricing of desk hours with available of models, our Slide have them governmental such includes staff. with portion half discussed XX statistic hotels. in and buildings, changed new is lower the

slide, under the sample an on shown current RevPAR estimated As also operations. indicated we even revised have break

PPP grey new and Many and As line. is reducing believe is The hoteliers, costs on red finding use very our operators, our to costs indicated, to take hustling includes favors by shown we owners breakeven and skilled which by period in are hoteliers ways short recovery management sales elected and hotel of borrowers. achieve grow the key proactive to mining the deferrals. the a line seasoned payment funds takeaway

many We cash operations, their monitoring Craig? sunsets. preserve period some have are closely been to deferral and for the able when

Craig Mayo

As to down due fared the quite shown permanent has is environment. multiple majority from projects migration well, of well-diversified on QSR by to financing. cash as which well discussed Oklahoma, is of the majority XX the Kansas, space, prior between Construction portfolio and in footprint portfolio quarters, real estate. protein slide the Bank's in A and has in the QX a is grain completion restaurant current spread the loans land development in Ag states in bank's Arkansas, secured four across Missouri, and are successful and the performed the

have deferral. The automobile largest have stores. stores, track with majority experienced movie retail who have total showing bank rooms of X% been XX-day as slide assets of franchisees retail delineated or not many need in the drive-thru and strip these and The include payment $XXX segment. well. million loans owning multiple cash the The or centers, on interrupted, works had successful segments bank's exposure flow XX, As do retail dining by carry-out theatres, convenience are second The strong closed and locations. is shown performed portfolio dealerships, retail record total positive

and indicated in MAX million centers markets million quarter. seen have $XX Our are our slide XX. X% and of Aircraft-related The relationships. $XXX primarily stores finance in CDs estate in impact entrepreneurial by an operators owner. shown second holdings real manufacturing anchored seven XXX convenience impacted, makes manufacturing are strip their the typically automobile from retail and theatre by adversely on dealerships by community machine as sales owners diversity funds The banks located portfolio on with compounded above The grounding equipment loans the has we the currently They're first are The PPP adverse comprised up secured received have of average bank deferment. seasoned the in and by and The and COVID-XX. industry aircraft and coronavirus. or bank. Boeing is minimal been has the in the shops, are

these dynamics. are also customers by Our impacted

good the solid experienced has capital have to who continue additional proactively with believe these None management liquidity, access these solid, ownership and companies We if needed. to teams, and become have of address issues balance sheets, credits classified.

no and our oil As to limited stated on prior oil exploration, calls, medical of the bank represents limited gas exposure to less Each X% exposure living. segments portfolio. assisted and and these direct to and of than related maintains gas, and exposure

Greg Kossover

enter special shape. and assets. Mayo One have we credit Craig in resolution of my new good and guys on phase kept this uncertain responsibilities and Pat with cycle special of is [indiscernible] the the These two their working teams of very our low consistently assets

were the quarter of basis provision of flat total to is to regulatory was four OREO QX our Eric? for classified flat XXXX. given points. OREO XX.X%, $XXX,XXX representing the the in an in charge-offs XX, specific net year, assets $XXX,XXX, capital from ratio rate of December Our annualized bank

Eric Newell

Before we our to financial to several close, Brad presentation position. to I'd the key hand of facets point like out

for been without raised, haven't capital debt ALLL earnings strong, then As strong, the aggressively expectations. and our even pre-provision been have our our discussed remains earlier, the we because earnings below recent sub very of only providing

and and have the grow into Our of drive reduce bank. revenue deposit associate more bearing helping non-interest and cost extremely well retail team done customers deposits, to to funds streams

at Bank outstanding in significant capacity quarter, is second tested also none liquidity Our June our outstanding we although capacity Reserve and the FHLB XX. the Federal have with at excess is

Greg quarter, originated on time As Brad? coupons fees NIM the core quarters, reprice, the and expect expanded our discussed, scheduled NIM we second loans loans. and stable with equaling be to newly mildly depending to in about declining and relatively upcoming our same on remaining in maybe deposits, the

Brad Elliott

around earlier, be I and days to both all at and dollars. our and We've non-interest from will don't there by our numbers the stated limited May be our our up checking With early in have to inconvenience team's administration, open fully loans accounts on as quality we high talk tough to origination bearing since Yes, the we some credit and all efforts uncertainty we are and for caused coronavirus. But everyone industries. and locations ahead all operations COVID-XX, banking overshadowed. continue the and been retail very want had operating daily produce

been the culture, believe conservative, of in second adjust performs credit very type remain also loans our customers. our both which entrepreneurial to some I this made to also dictate. environment. environment has We've healthy qualified prepared originating the quarter operations should and well that We fully in

to customers Lending help think serve poised We've quarters. to will periods, us the Main sake in bake growth provides our of new the and customer that I which program, opportunities for sheet. growth recent I Street through we're grow well will quality the high avoided upcoming balance in to us continue think that

an me capital entertain raise, services, to our our traditional team and offerings excited the trust with banking recent alongside excellent very Our this happy questions for time. include and growth all wealth We're coupled to future. at the of treasury, makes platform management

Operator

Jeff Rulis first [Operator Instructions] with from line question Our comes D.A. the of Davidson.

Your open. Please line go is ahead.

Jeff Rulis

morning. Good Thanks.

Brad Elliott

Hey Jeff, how are you?

Eric Newell

Good morning, Jeff.

Jeff Rulis

percent percentage, deferral the is of that on on loans question current deferral? what A

Brad Elliott

Jeff, those were deferred all second So, in quarter. the

XX-day mark their yet. hit haven't they So,

hasn't reported. number changed the So, what's from

Eric Newell

down reported, as coming and from there. Yes, XX%

Jeff Rulis

you've just and the but maybe discussion, in, just coming you of maybe approaching already few, you I some already peaked deferral that's as or a expectation? had extension as sounds you've Yes, -- Okay. that's the are like just the -- figured, know, on discussion it on

Brad Elliott

discussions, borrowers their we've would they of any of longer had discussions the position and to our peaked them that warrant discussions have not all many on in deferral, deferral, with that have coming, so, a we've Yes, need and lenders definitely are on had deferral. and are so, a are or

Jeff Rulis

I XX deferral guess or Is what's group? a that of the greater? that timeline average

Brad Elliott

deferral. went we So, XX-day with out a offering

about a group which did event for that six we interest So, had for had, them did million. we that only interest was only months, for we we that $XXX

Eric Newell

million. $XX

Brad Elliott

the $XX NIM, payments. the were we principal paying interest not but they on that did million only interest,

more offered than that of bucket, group, So, rest them in is but there days. that no XX the were

Jeff Rulis

gears open, -- has a wanted is item, Switching it. perspective? that guess given guess got of just quarter, early that disrupted charge all a come Okay, quarter, sort in how and $X in that that some the that's my how later trended restoring for is interested of line the to in service back that just bit, about quarter, the your of your from expectations too in I was on branches long north commentary see item line ago, and million was not

Greg Kossover

your It their unemployment as that. customer down the are debit the first at things come Jeff. of half, with back, normal. from given in Yes, by continuing accounts come Those substantially debit offset QX, slower has and amount more went correct, cards. to beginning thoughts fee, and income about dynamic spend by much were people NSF liquidity all, to was the I of were like of fees NSF starting back were transactions declines think, to then card

$X.X guidance and use are think NSFs number interesting for debit the for is are be to dynamic, income total to good that's million non-interest although for QX, up, transactions income. card down, I QX, non-interest about going a So, for overall an

Jeff Rulis

Greg. Thanks,

Greg Kossover

fee low XX% on at We decline the actually overdraft saw income. point

Jeff Rulis

point of is to come And then, you've -- okay. and entertainment it the to guess, portion clarify process, it sales of occur, like just comes how for my the trying off want franchise and out on around positive, or be the tipping continues that I to I hands outstanding needs accruing momentum to to of credit, a of just wrap that pizza that, had sort franchise Got it, sounds non-accrual, what non-accrual? it is what's

Greg Kossover

as listed a it's currently, So, TDR.

leaves itself it principal the stays is is credit in this environment of COVID pizza thing. once carryout even and performing accruing a pretty sort I without well though delivery, TDR in mean, bank, So, until and accruing this great the so, interest. itself whole reducing well with asset is it has The interest, and at not done TDR

Jeff Rulis

see. I

expectation for modest it the loss to be And on Okay. that? content, continues

Brad Elliott

It does.

Greg Kossover

that Yes, sell. company the still expectation, Jeff, is to have

to You Brad? say want anything,

Brad Elliott

about type cut all southern with had PPP utilize volatility stores, forward, the mostly and still stores have kind expect. fits sold they're usual, the restrictions. you'd of the COVID nearly is starts, and is sales, a XX delivery the last in they were back lot in I their franchisees moving changed, where states, prior opened business the some at of -- year's of basically and whether circumstances, staff up discussion program, mostly their under delivery the they although Yes, well but which and carryout then There located reopened which rules entertainment have think of carryout, they with and the is XX%

Jeff Rulis

guys. Appreciate Okay. Thanks, it.

Operator

you. McEvoy Stephens. Thank question line And with from next our of the comes Terry

please go open, line is Your ahead.

Terry McEvoy

Good everyone. Thanks. morning,

Brad Elliott

Good morning, Terry.

Terry McEvoy

a it I PPP think of after paid if $XXX wondering was did forgivable through as are PPP just a the net follow-up last that then don't to systems Brad, question treasury, you on and of income, origination. component, how submit was million off to quarter? yield think the run impact, open yet that and kind so, interest I piece loans what that was did the that of I'm loans the there, mentioned

Brad Elliott

think. the first. I So questions there, There're I'll three take

had didn't the private is that political ownership in didn't we Street groups private and equity one several first that Wall news side, Journal. scrutiny owned, equity more want of be from want some coming the in front The the to page the was and their

off. borrower forgiveness. those applications the repayment time, accepting pay even those not can with to loans pay any SBA A off elected at they So, from

second did Those that what's not loans originations. received the those on only the on of part -- we the is were right? income income on by And income. of question, We Greg, loans. just those none yield, The impact fee forgiven. receive paid then the those customer that So, the off interest was were X%

Greg Kossover

Terry. the know, plus and FAS getting was about question, fee, yield to accretion. interesting recognize an it's the X,XXX,XXX so, according our our the is XX coupon so The interest coupon fee fees origination We X%. components as net life you did know loans, of origination into over X% the the Yes, of are deferred income as and you

So, on somewhere the total XX impact margin was probably in around points. basis

Terry McEvoy

the you. deferral guess, have hotel, at those your the largest where XX reserve call I just an all If portfolios trying have have I'm [concern] for? rates. And of out you figure directly out, of those basis Got three? I restaurant, reserve today? Out guess do the points looking allocated [ph] three against greatest retail, see got you they three, to mind, in you what you do loss

Brad Elliott

we're allocated opposed as credits. basis a good principally tough hotel on about an all general going pretty question Terry, to into the general still reserving our a reserve. answer. basis, That's We portfolio. for It's Well, feel to

have is, sophisticated we it hard and on and to lots really hoteliers, to good doing shown working as know, banked breakeven, we've I things. slide well-seasoned they're you As back XX, of think get

material but our They're on restaurant risk So, QSR. and the the is haven't well doing environment. restaurant very same identified there? there this a any is level, credit is true portfolio risk at we in and retail, pretty Yes, much significant

going are cautiously that turn still we're things out okay. optimistic So, to

Greg Kossover

continue people hotels now, going really performing of I more think are we're but that that, years be, in don't Terry, I'd our that we to to three and answer to going perform, in had operators. a be we depth are finance leverage. that, dead top good On low from question, because have we little could wrong

leverage that has average XX%. of So, if portfolio of an you remember, about majority balance

verify them, are to to going sitting hotels that room re-ramp those conversations those, with they're operate large they again. back capital have got and also they've So, -- try working cash many open we on help we're them of as in sums in to going

to that can portfolio, So, lot don't sales, lucky net the up better almost in the the in are restaurants we and up we standpoint lot quick of the service that restaurants them a than with drive-thrus been in don't like of in think that XX% full-service more from restaurant of, we're of none we've but have -- than markets are honestly good a and the XX% we profit.

So, those -- on, they us just are shut lot not of -- a deferral because went not the extremely know, to going you immediately. they're their make because payments, just needing A of they're go and on going deferral know down we early didn't well. second actually to doing how a for they're lot everything period,

Terry McEvoy

Understood. you, Thank both. it. Appreciate

Brad Elliott

Thank Terry. you,

Operator

Our Thank KBW. of with next comes Michael the from you. line [Operator Instructions] Perito question

Your go ahead. line open. is Please

Michael Perito

doing? guys you are How

Brad Elliott

We are good, Mr. Perito.

Michael Perito

Greg, want spot for clarify, as quarter as questions missed related of you think of of run will launch originating, loan we third is costs sorry not that should A the consider non-interest origination couple on I expenses; new expense XXX,XXX no today? impact the if rates so going to and it, just the you forward, but deferred there of that mentioned anything PPP, with sit we else kind to

Greg Kossover

and of XX.X Yes, range I XX.X a normalized coming expense QX. in done June, expense that right to in to non-interest non-interest is going expenses we've scrub and on, out that of all be think

Michael Perito

Okay.

of longer As margin challenging the think bank environment. cost we the about obviously term,

think if conversation but sounds still you other maybe to that seeing guys it be it time trend the or is a of credit overall base, where about you your maybe kind you uncertainty are sure. kind of know, a behavior you're like opportunities little a lot bit early starting and even expense of markets rate to starting fared franchise environment? have You could of it's consumer a branches your the some demanding imagine are I a point help some are modest given your away country, Is what just improve to -- that's from some a of have your better, just more at parts lower certain of still to and degree profitability in I'm in a

Brad Elliott

Yes, FTEs Michael. period down last We're it's year-over-year, year this always from down we're we same conversation at that a XX have, time.

at branches May; look quarter. will always to a those be three costs and just out So, standpoint. and that evaluate something efficient branch We more closed all location we in this in from always try it's be

three So, a impacting numbers. go-forward our won't on be basis, those

of those XXXX that driver things. in our the I have this up evaluating would types markets year our a that up continually is job from we're at doing actually in financial institutions. because So, launch of business been is net our and a on retail accounts of the -- -- product. folks we're One of tell QX other net good you we're checking also attracting

really digital helped we platform, on able the that grow a have us, pushing market good got a in and the we every marketing we're good is and job we've then the I have. to had branch going we've be side facilities marketing to aspect and So, that really really and currently almost just that are other really that's think

Michael Perito

and like the or you things your there legibly is do validated that or That's that has helpful, of kind putting that far to Brad, seen stress on path forced want and of remotely you or some you? programs during feel you of the of adequate employees digital a your kind you that with anything the lot guys experiment the to the more of of maybe you could updates this work have last working believe for were guys here or has very months PPP some be in add some infrastructure thus the into rather process your of systems, three experience on pandemic left kind

Brad Elliott

rolled those but forced we played that for XX not last has rolled were they count days. utilizing -- products we we've us as types the fully things electronic spring opening really being yet, And out to us. over we made investment out some the on as push out, fast forward it them last weren't has of and Yes,

So that sped up some things.

efficiencies from of ends that all some tad learnings side. how a on that at Michael, looking is digs some out this, there'll on figure there but as it's point, spectrum we make and process So this all I and we'll costs at some from more to revenue want the and can that that standpoint. to learn differences early, And expectation to revenue and customer we be sure industry both how in but a maximize both the be an come efficient, think we're tries of from from this, always

Michael Perito

happen guys then, for your lastly could Okay, repurchases. to should not key you -- could you sub you of the but mentioned prepared it just think maybe than want to the we what do credit to on is, no on to to of capital complicated used more needs longer going kind ask more you in be things some ask clarity What more you or term, more when about deploying make I debt I'm the that just simply guys comfortable get there And remarks, think are in externally? that? that what is, share appreciated. that

Greg Kossover

put time and a and and opportunities, Brad that right suspended the and and the Mike, shares. the Well, deploy begin in of to merger it's was of thing to examining the we shares we you need as it feel that, to you do we work we also, be in one to do I, lot Board safest at we that moment part capital capital so, it's QX, capital, same -- to know, with approval, see to have QX of ways absolutely the know, that got we repurchase and but don't part and excess we preserve believing at Eric somehow, of but QX, we'll is of repurchasing end will it's capital, think credit, if repurchasing

Brad Elliott

line a tell for I agenda you, be Board on our item standing every And can Michael, meeting. Board it'll

Michael Perito

well. Thank it. really you the appreciate you, guys, stay and Thank Got colour.

Brad Elliott

Thanks.

Operator

you, comes Liesch Andrew of our next from Piper Sandler. the Thank and with line question

Your open. line Please ahead. go is

Andrew Liesch

Thanks. Good everyone. morning,

Brad Elliott

Andrew. Hi,

Andrew Liesch

franchise Just how [indiscernible], remind a right you credit dollar could the -- that's that pizza few amount on on now? us for the what's me, loan questions follow-up

Brad Elliott

XX.X.

Andrew Liesch

Okay, thanks. can provide about And then, up or the regarding so, total change? non-performers that went million detail you there any is $XX

Eric Newell

business and owner Yes, we C&I the a the really stroke long where issue, had a medical before. credit for one was running bed got XX significant but space, bed, necessarily his he I run had hotel like, pinned the time, in full it he way had the between have he that in nightstand doesn't to hours, survived, think the a and the capacity

which you're that's liquidation classified. non-accrual, we in is what it an and It's adversarial us a substandard, So, the is situation, is put business numbers. eight moves business It's and and liquidates, seeing he to a in it on when with liquidation, not as those cooperating situation.

Craig Mayo

The self-liquidating, is, deposits self-liquidate as it XX-month in over an do will should ACHS. down wind period, be should through collateral type it come it of that it so, timeframe, and just so, it'll and over ratably that but

line. hits pay and and then down directly our the we So, account, the sweep deposits

Andrew Liesch

you. Got

reserved fully a PPP to related So, And it length outstanding, do end well sheet, expect this that sounds going of them some customers you for may for be by either of on the or the how the like then, all to need pretty the credit. full that of retain remain you are still the long it's loans balance term? to down just paid the year, them the

Greg Kossover

that them, get a we were So, currently restaurants been back open these and to are their they operate. open back retraction the their of not markets couple were not are honestly able these our they a customers few that we our able again, some in and will to customers have -- again get customers, have franchises had originated that

material PPP it'll to least year will utilize year. funds, this think be there few so, I at be able So, the of to and a them in the next take

and say, off will So XX% let's less paid think than year. I that it's be not next into carryover this year

Andrew Liesch

covers step back. That I'll all my Great. questions.

Greg Kossover

Andrew. you, Thank

Operator

questions conference any Elliott no to remarks. and showing Brad the further over like to at I'm And you. this for back I Mr. time, would turn Thank further

Brad Elliott

Yes.

So, deferrals. is remarks one missed some our of the the on things we in that probably of

with about it. we like with to did deferral. move defer a liquidation make to it we that's a We our them but process. talked forward said going and in that didn't felt that We we in that know, put not approach proactive customer time the was liquidation, took customers. wasn't customer evaluated You We

"Very a look help them so are the customers again. revamp way the what after as the back cash we we their open put markets and consider, to that could So, we utilize they deferral good operators," deferral in up cash and to save

are again. and So, stronger at as going back do we the we to our our after well open some think up deferred look that one of loans markets customers,

and have is to period actually that do percentage strong well in that percentage a going we bucket, after think through although are this So, period. this customers we that

So, we interest. appreciate everybody's

have us questions, please If your time a give you call. Thank you today. for

Operator

the participating thank This have conclude gentlemen, a in today's may for great and all conference. you disconnect. Everyone you program, and day. Ladies does

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