SBFG - Earnings call transcript Q3 2020 | SB Financial Group, Inc.

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Operator

Good morning everyone and welcome to the SB Financial Third Quarter 2020 Conference Call and Webcast. I would like to inform you that this conference call is being recorded, and that all participants are currently in a listen-only mode.

We will begin with remarks by Management and then open the conference up to the investment community for questions and answers. I would now like to turn the conference call over to Sarah Mykus with SB Financial. Ma'am, please go ahead.

Sarah Mykus

everyone. morning, Good to being like be that conference ir.yourstatebank.com. this and I live remind over is at website broadcast on will the call available would our you Internet archived and

Mark me Officer, performance, forward-looking and statements may Financial Chief Jon Klein, Joining Senior Gayton, and plans, are Chairman and operational Officer. Cosentino, Ernesto Operations CEO, and Innovation Financial's contain Lending regarding anticipated President results, Technology Gathman, SB Chief Tony Officer, objectives. call today This

are and actual expectations to management's materially on based are uncertainties on cause statements of number could from implied and results subject risks call or Forward-looking a differ today. our those that expressed to

are identified the by SB call. Financial encouraged forward-looking We number update factors different undertakes statements no a obligation end within forward-looking required earnings at our of as to statements except the date this you to have of any law review. of which the after release,

the will I non-GAAP Mr. to included addition turn GAAP financial to our with measures in certain accordance over call the A now of Klein. measures. release. earnings contain In financial in also this reconciliation presented call will is results to GAAP, non-GAAP

Mark Klein

third Sarah. Great everyone. morning, you, to XXXX with Welcome webcast. Thank call conference and to our all Good you have quarter us.

or up recovery up our flat while saw continue net include quarter up mortgage net a points, rates XX%. the pretax the the $XXX,XXX Edon a points, the This million loan coupled integrated servicing X.X% quarter interest million on adjusted the XX% XX and quarter X% assets than XX% the $XX basis the that was net leverage return prior $X income year our million $XX from continued from from those operations XXX. drive for liquidity was and for Pyramid year reduced income by delivered from the up ROA when XX% Highlights Pretax times. $X.X All were interest of increase average offset balances $X.X quarter of reduction balances year Net non-interest non-GAAP [ph] over income the prior this including recapture, of growth forbearances million. in in Adjusted and interest curve to the million to of controlled We areas the right basis and pre-provision prior $X.X dissipate XXX volume, X.XX%, with quarter, this We issues, million State Included our for low mortgage X.X%. $XX record or as loan million, in to year. client over was reduction our of operation. many declined expense positive income. more or income acquisition stabilized, of quarter pipeline of rebuild, expense. yield into leading long-term Bank. in the $XX in operating PPP Loan Edon quarter our million, linked X.X which year-over-year balances prior

our in levels. Excluding of funding XX% those origination million were or $XX due of DDAs $XXX million, and increase Edon the were beyond million. year-over-year. quarter operational balances title expense approximately million increased full mortgage $XXX our insurance acquisition. increased and Edon Expenses business balances our $XX over higher million up or have up commissions, $X.X in well a Mortgage from increased million, to retention business of down year-over-year XX% volume to year-over-year. Deposits core $XX items, loan Again, PPP

with the of deferrals down loans were forbearance And number reserves. of substantially down of We were aside bit were prior remain Asset elevated this basis quarter our although set strong. provisions, related points quarter linked assets quality non-performing status in XX%. which all finally, dollar of future the loan from to $X.X million XX metrics year from the a in and level COVID-XX client

operational our As efficiency, scope, you asset more every well initiatives five and scale, scale as more revenue and more touched as for we've key remain recall, efficiency quarter diversity, quality. on

revenue First diversity.

on $XXX,XXX. This XXX% and of gains. prior quarter the mortgage to on million $X.X servicing XX%. income Non-interest just or a payment volume and above increased the total that $XX.X loan which as XX% Adjusting $X.X the XX% prior was well were increased from up XX% sale income volume, and mortgage includes by year gains recovery from I quarter million, year, impact, to our income average year mentioned of non-interest revenue for Non-interest from to prior to million up traditional XX%.

million. Our current $XX in mortgage capacity, process continues pipeline to for loans be with over XXX currently near

intend are our exceed to our XX% business business but client region production coming we title Title Bank, Peak's with total of up only quarter on State had not revenue from commercial with higher. for the lower largest pace volume to the We opinions higher as quarter scope revenue mortgage higher year percentage up to We strong our drive our insurance volume the improve to outside $XXX million. with of Peak quarters, now revenue, banks ever and well. prior In year, year XX%. policy the performance focused expanding versus throughout Tri-State remain title on deliver likely another

we just originated loan over in to value. produced XXXX, million over Indianapolis in we now mortgage the million, far same continue last Our $X have $XX share we compared market to during office $XX year. and the as Thus period gain originated operation quarter million

$XX in million sales over under prior Wealth year has Our quarter, our potential contributions our households for servicing or leading million, of overall months to But clients now new market million, $XX with the unique coming line. net engaging over and certainly revealed this assets rebound in last in each PPP to a business increase to wealth management $XX challenges $XX solutions. in under of XXX new the of XXX Management over we this portfolio million with reflects assets committed million. as mentioned $XXX improvement market million. continue new care total Pandemic of of newer we're $X

quarter be the slowly from in to markets Coronavirus reopen growth Loan as pressure under the shutdown. scale. our more Secondly, continued

Our we Edon the acquired loans due loans elevated growth the and acquisition. prior from the million $XX.X year from to in PPP is our

As approximately growth year-over-year, our basis, million to on would $XX companies a related Interesting payoffs we loan fall several said, to commercial selling for to the over grow loan million. items their today company. That into would quarter adjust million. in as be due on to by our rests Back our $XX loan organically loan to remained mentioned I note balances and strong. core expectations these current fourth balances at $XX pipeline, XXXX

billion our XX% estimate or deposits. in is clients our PPP of loan and And now Edon to million funding million operating Our $X.XX XX%. the that growth expanded that deposit up $XXX base Included $XX remains accounts. in

the add quarter improve final finally, We to gradually expect that scale XXXX. we these returns. express interest to opportunistically, And year through into on dissipate and partnerships and funds can in continue the of strategic

integrated we October, Edon the of State Bank base. to successfully have impact As the in positive with client transaction our

develop Third, scope. is our deeper to relationships, more strategy

We of continue quarter. loans these clients extended and monitor XXX PPP we that during all assist to the second

the these them expand over to relationships continue of date, we client long-term initiatives these additional XXX acquisition partnerships. of have clients, to was and on call is accounts new strategy One added PPP develop from To and each deposit clients we for key new banking our and from services.

ingredient $XX the critical identified led share cross referrals in over over third to entire quarter wallet business XXXX remains company. to through now business region Beyond partners that of have our lines PPP our a business to have all additional our million to to the in growth we strategy. sales household our Expanding across our increase

in of We are include now to Edon's each expand XXXX households. presence to excited the our opportunity

pandemic to embrace clients certainly each communication day, expand the relationships. discover We more in customized has channels contacting via are with opportunities While every text, our we phone, person new emails, made of outreach, clients. difficult, our

the of more of transaction we client are improving that have dynamic process focused pipelines times quarter, this new we third optimizing CRM our will in view not closing that that on provide is or our The are more Additionally, relationship, more to our near the one a Fourth, continue, expected will purchase the quarter. at originated sale the loan operational intended well. million our or as trend in excellence. $XX underwriting of transition actually to million and ensuring or remain volume XX% our our other residential capacity. identify market and only efforts one $XX midst very system we XX% from words, to and to but purchase potential converting normal entire closing opportunities prior importantly, compared a With In capacity.

as I we stands growth. operating a levels our balances were due of billion. prior our success, year leverage to servicing but at approximately up quarter, the from over loans As our our portfolio times Expense $X.XX principal X.X result to improved with of now revenue mentioned, XXXX

by and these reported to for and Edon operating the full servicing rights from impacted adjust non-GAAP forward, the improves year going the revenues we I for our For the times items a X.X expenses year costs. mentioned. X.X impairment as the leverage When were merger

we this in final of expense fifth XXX asset we of end, which and finally, actually to to forbearance which had the linked loans And $XX from examine Included XXX or quality. control on all amount that million, linked for were the from was quarter down totals place in encouraging. million and sheet quarter. are continue issues a dollar mortgage year. We put trends total for sold At which earlier is key XX% the exposure by $XX our quarter, $XXX down just These $XX reduces was million million, loans, XX%. balance the the $XXX loans in of million initiative, or

decade regarding to feel loan see to weakness elder and unexpected however portfolio, concerns hotel our have We in prudent that our provision. strongly have past surface certain loss over our care segments our a process continue allocation of still restaurant stable should the as underwriting still we stress provisions However, bolster made portfolio, deliver and we some we loan will exposures.

expense $X.X increased for our million and This quarter, now million. to year $X.X provision the we

basis build year-to-date Our year and our ratio loan was slightly to X.XX%. our XX peer the To approach and will will, is above for just were reserve to up million, for median loans the you and stands the performance. charge remains non-performing ahead and from bode feel and reserve balances of would our loss increase quarters off Coverage if now operating at of of loan is above We reserve ratio group. to $XXX,XXX. XX points well levels out $XX,XXX historical nearly $XX market offs or points stay reserve basis our stress, XXX% future Charge X.XX%. our quarter PPP at adjust prior now the

dividend strategies Tony, up is which up week, XX% past Before capital stockholders. I buyback to our X% balance turn our linked place sheet call throughout Via assess and I common be as do the our fund quarter. the and make the We capital to per up from over will return prudently do place in note XXXX. year, our growth share, to $XX.X want continue to this announcement we in to of from to stock prior currently

quarterly Tony, I'd Now have a to details give few performance. like Tony? more on us our

Anthony Cosentino

everyone. Thanks, Mark. morning good And

had quarter $X.X we diluted $X.XX share. For of net the income or million per

and XXX,XXX prior have $X.X been $X As absent year rights million offset were impacted for revenue MSR Edon XX.X% some prior total Mark as a in up up Quarterly funding $X.X up Loan highlights And million noted, gains up mortgage is net which income revenue when mortgage the reductions of XX.X%, from from are in we by prior that million operating adjust X.X% reduction prior interest experienced. the agriculture, up was the servicing year. activities up year. and other which impairment. would recapture. the the XX.X% recapture Margin item, expense million, for sales Operating XX.X% business earnings $X.X our X% and increase. from of small from include our costs delivered we income

points starting Literally basis the higher the the Overall we yield the X.XX% in I well X.X% of basis earning further from PPP by As asset statement continue interest experience margin, down for to X.X% as of yield, cash as down we said quarter loans balances the an loan XX prior and quarter. quarter. up income as points with prior year was Average of prior depressing yield the income break XXX third year. levels in year. was the from loan the up decreased the linked quarter

are fundings the in decrease levels improvement coming to starting and some cash our will naturally PPP clients in we're our see pipelines. and loan beyond quarter, As utilized

we expected, as the our side, funding of the liabilities On cost reduce from year. the prior again interest-bearing

by year and XX XX basis quarter basis linked interest points our liabilities X.XX% costs the linked the cash rate down XX% For XX% PPP, is our and the impact year, Edon a XX the of XX are by down Total from interest for which basis on interest-bearing prior headwinds excess as down margin. margin prior to year basis by the was down were and points points. from prior quarter at the from for points down the quarter. was Net expense

look coming the $XX.X origination to origination million loan funding up for continue quarters opportunities of from million We improve with was higher reflecting pipeline, further in loan non-interest income $X.X expanded and the Total costs in an the higher prior year to margin or XX% declines mortgage volume. fees.

have up $X have And $X.X or recapture. million million recapture, adjusting a for As rights that been would we said servicing non-interest we XX%. did income

up XXXX. XX% a transactions title large the number delivering quarter, of of quarter was XXX,XXX, third revenue Our agency strong of which from a and had closing very

and X.X% $XXX numbers. at paved continued which gain $XXX $X.X these at The of volume to than our from quarter, more was third pace. the in and and our strong record we change years sold gain aggressive on shift at was sale the gains came million yields become secondary, production pipeline mortgage a sale million million. quarter and on for to total refinance continued in way focus on hedge purchase volume expected ago made higher several The and Third

XX% the linked third from quarter in million, $X.X $XXX,XXX $X.XX points September but up the revenue deliver rights of the quarter our in and XX improved down up our revenue basis value as our XXXX the was result and year one X% point of basis of quarter. slightly in portfolio servicing did a of down quarter of XX, Market servicing on XXX,XXX calculated linked from recapture. from rights value servicing to billion pace prior Our past XX $X.X from fair XXXX. for At quarter but mortgage this which provided million total the were is is

is total or Our were volume quarter. quarter compensation $XX.X is remains linked million which A the impairment expenses year level this $X.X prior compared X% the million, from mortgage drove down XX% currently higher that million. but of Operating $X.X higher. up to

XX%. at of million look the $X.X expenses operating year, we As or

costs, However, merger for or the mortgage similar Peak and volume, million growth we Title XX%. normalize the year-to-date $X.X is

of year. We inflated total loan to sheet, at PPP of $XX we $XXX and turn which the assets million XXth liquidity. million volume prior the $XXX declined September levels. higher two asset the by of of loan prior year-over-year Adjusting million outstandings prior as clients Edon of growth stood As million loans growth for due the balance at the loan pandemic. loans have million these million XX.X% company. XX.X% as our Positive contracted from are the of was had $XX balances $XXX the maintaining million pipelines growth loan loan and to levels from factors of $XX levels up our are - year for year, $XX or

in our have our as discussed, added a been $XX deposits. retained we've large clients million loans The Edon dispersed acquisition, of in operating addition, PPP percentage In accounts.

X.X%. we from which at stands and up prior quarter asset million is XX.X% the a balances. the $X.XX we per equity value of or exclude share or ratio up or year quarter Capital, $X.X tangible share when XXXX is the million X.X% the XX.X% finished at at PPP from third $XXX.X our On Looking book per basis, to

up non-performing XXX,XXX restructured points would Total of our levels back our averaging buyback million to-date, from XXX,XXX assets restructured prior points. accruing to to accruing restructured buy our basis repurchased and to absentees $X.X book million $XXX,XXX pricing these basis are seven elevated continue under quarter. of We authorization, shares ratio $X.X by the or total shares, And Included new we've the tangible asset non-performing basis credits are nearly in XX XX% points. with credits, down year credits, non-performing in numbers linked our our but XX reduce value.

is in our a We the segments forbearance continue improvement in asset of volume quality. at-risk to monitor our and loan portfolio positive trend the

for both the up year As was expense quarter Mark and mentioned, $X.X million linked the provision from previously quarter. prior

GAAP up prior loan at level the to PPP On XX are earnings rises adjust million our $X.X year, million up basis, from year-to-date million million a X.XX%. provision to by currently, $X.X the allowance $XX.X income comparison, prior year-to-date the with up of net allowance XXXX, a loans the earnings $X.X of XX%. $X or is of OMSR increased were absolute And XX%. Our percentage or when September or year X.XX% from XX%. pre we is XX.X% merger X.XX% XX%. loss adjusted total to cost, million and $X.X we loans, the when has million from allowance these up On million of exclude for or And net $XX.X up pretax percentage of income

back like Now the to Mark. to over I call turn

Mark Klein

good continue complexities pandemic Thank while ways in prospecting quarter the Tony. Clearly for you, new financially, assisting a clients we as new ones. very to manage our of and current the

new balances loan us quarter, to we our additional ensuring to Edon Edon XXXX and deposit a infrastructure. to results, a milestones several achieve clients. has our clients those effort in we with in and a team and transition first discussed done $XX existing with smooth add the enabled million that The foremost, great nearly operational to financial we've as new job addition tremendous integration products combined the operation team Edon our It completed clients. system and accounts solid and those for was and offering In our

over we've February. a announcement $X merger deposits in now back increased result, by the As million since

finally, Also, business one the wealth Ag enhance in to private district. We of we grow a are to to plus key client one group management ability to to XXX visible markets. are our report This the client focus recently intend exposure improved leverage our brands community needs in will of our relevant recent of regions in central client market a we know remain relocated we as more to newest and performance. heart location and old on will office business Wauseon two of And office we remain our centric and drive year well. opening pleased in new Findlay, improve Our Downtown care Ohio's our best our and line.

the for I'll back Sarah, call over to Now, questions. turn

Sarah Mykus

Thank you.

We first question. are our now for ready

Operator

with go your our Jannie first Instructions]. And Brian Montgomery. [Operator today from from comes Martin ahead question. question Please

Brian Martin

Hey, good everyone. morning,

Mark Klein

Brian. morning, Good

Anthony Cosentino

Hey, Brian.

Brian Martin

just guys obviously, you could say, side. here little Hey, maybe quarters the mortgage on really bit, strong a two start just

outlook of Just, fourth next obviously, your on quarter strong was just the maybe I on sale mean, picture and this gain kind big Tony, year. really the quarter.

just So kind just the the about the on next pricing what thinking in and you're guys based year, of quarters side, side, on and here. curious you hedging in that how did production coming

Mark Klein

of one Just a kind more business has million some give at it $XXX business executives and up. a up, And Columbus the Brian, vision a strength. President of above driving to line. overseeing Regional Tony $XXX bench a couple of we comments, certainly David can to was on annual we're a depth volume level, and the line business he that that Homily, into is line, clean brought in range. that our committed for clear But now million high

Indiana looking traction. out little addition where at, a and to the and now And practicing [ph] Indie bit we're that gaining of same market so lifting a in doing thing in the we're in then also team a northeast

pieces where And continue been So new pipeline plus. we all with as line, volume and And we've pipeline. seen appears I well Indiana we've on we've that bar can higher before. using us as and year. strong strong we're operational talent that to that hope management focus so mentioned, Northeast very And would price our keep optimizing enables that do now I quarter be business than in well, that this as Indiana, as Central that those full, the additional to again, in here fourth our to pretty XXX% set

you've thoughts fourth know quarter. on some got numbers So some Tony, I

Anthony Cosentino

from that at to I as I XXish we're same we Yes, million terms level. kind in today, think, of QX look the Brian, XX% an QX. XX% of pipeline, maybe kind we be QX XX% think saw of of on probably down pace And

$XXX seasonality. range is as somewhere see So $XXX some QX, in that we million the million to as looks like what pipeline

market is kind that year. at of think players a I pricing underwriters felt pricing. a we've like and But think naive engaged in pricing bit not don't certainly taken a still, is for Mark we've and And the already what higher realization get marketplace of come getting see Do allowed we're year, competitive. that the will know certainly as and more unique very XXXX. little premium has competition has for of that be more no, And more this a indicated, I extreme is competition to some we're to we've do the that and we'll level advantage can Who XXXX yet about been I competitive, very think knows? MLOs expectation we know probably We we business. getting into the We more our I And soon. think there. XXX? have capacity throughout

Mark Klein

one the build think talked Well, the is number. what our the the we that a then Brian, we're mean, and as of comment, plan number, we number way the staff, with is capable choose not around we plan final we of, go I variable we've

here's all say then what around done saying, here's we build of we matter just a like that not we've years. a and XX the we last do, can to it's for So plan do, need

Columbus Central to is going to where going that's require Indiana more going producers some to So as as that's and Indiana, well and be Northeast happen.

and we to up line expectation business with recovers would all economy steepens the be yield then curve my higher while and the NIM. continue numbers, So commercial takes to curve on the that over the shove

Brian Martin

Got you.

the the year. Northeast production will the and in about Indie little help Indiana [ph] hearing bit in depth certainly helpful a Okay. more That's new next

and pay loan mentioned looks book offs surrounding just but what forward as demand cautiousness how pandemic just like about a like what here, the bit, or little with pipeline, relative whatnot, How to commercial picked Mark it's the okay. up you and go just about the looks So here. as as loan gets you the thinking some just Tony, your loan, you're it

Jonathan Gathman

Yes, Gathman. Jon Brian, is this

at to the build quickly last that, pipeline months. here couple address Just considerably yes, we've seen

event a going in pandemic, of As there world because the in eliminate our and on concerns. the out, to third an pretty notwithstanding sold probably strong it's that as really much the in payoffs That that we And do strong, the we quarter, in diverse quarter, second just we some wasn't seen remains terms and about talked the But pipeline that. geographically unforeseen quarter pointed some conglomerate some large businesses you on transcript It's and in of took so pipeline PPP can variety those business those a to of pandemic. wasn't type. some said, time businesses where and going nice as in everything them we've better a the given of their to variety the the decided from of other the in owners businesses was of the and else sell a our lot uptick and for in market sell, loan whole fourth and where regions. be there largely remains coming given in

million So a little we're that XXXX, of that into bit pretty remainder we'll better XXXX. in a than conservative here is pleased and heading probably do optimistic number, that $XX

Brian Martin

- you're seeing any In in the But tell. change next of change Got is that, I there quarters? in know the to they're couple as in guess, you. hard what you on just that, I payoffs, Jon, any

Jonathan Gathman

second, saw third most happen of quarter. late And Yes, we've the seen much think early haven't of happened here in that anything I Brian, since then. really we

the most going on to in decisions. of we're of that But and the is businesses, follow and and have sell you hastened that think I of moved what that of And will. may a into as mode. some considered now think I customers of growth sort pandemic those have that other those seated sold again, moved lot businesses already some our

to normal slow I see say we've entered we'll seen I our quarter So fourth - not I in won't think think any. pace But And that here years, return in we have and the quarter. fourth beyond we XXXX. to the

Mark Klein

also sold I on the we've of they're they've help were and Jon, of we ready the been side financed, bank, company. that people the been that coin, the we would several And, think that other agree the we've they've to bought businesses the

on some other of good side, it's so on what's of side but we've the in the not been acquisitions. one So good the benefactor

Jonathan Gathman

our great Yes, amount a speak. absolutely. point. That's pipeline as we And of current that's a fair

Anthony Cosentino

Brian, helped to might I us were fairly that that other add, transaction, that as those PPP NIM one holding. sold And And little we able several those paid then part bit companies that were conversely, those thing off on were just a the of borrowers. of were when is large accelerate fees we

So a margin our bit this of little that actually boosts quarter.

Brian Martin

Got you.

today, the left that to the booked as So expect the I does as whomever is lay remind how to going today collect or was into just unearned fees Where Jon, P&L. ask maybe PPP. to stand remaining much Tony, far forgiveness and be if can you

Jonathan Gathman

some me to our of a formally, how out process the But started help number. we where about Monday, can accepted accepting we are work. applications exact that with Tony formally, put just communications before of with but we've PPP, terms number that, we will clients in had

As Because the guidance passed on moving those days see some be not PPP started aid, in hit has that in dollars, Brian, would if And we my them, started and very on XXXX. XX how or that another SBA little finally very But, $XX,XXX the SBA of XXXX. through of a then of just amount. of work will majority, but terms them. not vast some, is to that dollar you're some XXX% very right the Congress our and anticipation a have days half of aware, has rather, little some or decision of of it's here since portfolio around work small numbers, guides we'll probably little fourth have SBA we which some in on total it XX quarter less,

So, around. timeline of total number prove be And was more of out Tony a factor will our I to think way XXXX. the

Anthony Cosentino

through $XXX,XXX that. booking Yes, we first, $X.X five initial of we've about the four had or taken of call months it million,

Jon So realized have we have probably and amortized probably we'll to we of that think few the as we our be would QX, $X.X QX will a all payoffs. And normal book. then amortization, XXXX, April XX by million very the might of go on suspect. be I where have left as bulk we similar on said, And if things and

Brian Martin

that the from total the just fee, amount either was interest? NII just whether third And loan benefit of PPP, the much Okay. the the it quarter, was including to unearned about Tony in be fees how the or

Anthony Cosentino

was by Yes, $XXX,XXX XX%, to $XXX,XXX. that in and about QX so QX boosted about

So, taken we've the fee September. million between amortization through dollars the and interest X% a

Brian Martin

Got you.

boost you're Perfect, the is thank quality, credit. guess about are that obviously, further, risk you that I still you that the largely the or you. the the the and - build in you to it reserve expectation your down, is is final as even given of go or, that last reserves taking And of couple, potential and just mortgage strong the of Okay. for really putting earnings using the credit your pandemic. the year and deferrals fact the just the talked some there's here is pandemic sense can I it build reserve kinds seeing from to in of done trends now quarter guess bit still a more, the And

Anthony Cosentino

us when it comments, building a vocal Brian. one, of but making of a a Yes, at couple just you're this on pine high been said, high-level is don't for reserve the put proponent money that. level, Just money. always Jon can don't our allow if any of some have away losses. taking Well, to of like or of little year you last like, think bit this losses, to portfolio care that But a think of And we'd one if one the one our larger we it. I a one of want of don't getting to be I But our of something. basis to take we have think continue to Jon, piece, where need got and we short I we And point credit build it pretty out you it. we're up strong models

it'll, it'll mentioned in subsequent well think I webcast, think quarters. as I I bode Brian, the for

emerging. But, Jon, think the you thoughts we asset I that? As we we play got actually know out some this see and on quality, all have pandemic

Jonathan Gathman

I strongly with Mark more probably mean, is just we our we've in. borrowers structures, a to And and borrowers terms why said, of prolonged, agree with for were do. they're pretty survive we building have there's fair at I that's accounting some believe that example, And borrowers in situation, reserve. are that prepared types our I pandemic can what currently Well, That amount exactly of and the say, our would no borrowing will some of brought hotel cash. I issues that, current of I closures well-heeled in or for portfolio, these our we that in there look

So the we think that'll help them run. short in

levels, presumably, well. So have absent there quality aside, putting current about in world, we're the those into elevation borrowers think or something asset entered hold else we money going operating our why a some pandemic which and and But slight the happening is maybe already again, repayment credits. in is doing lot to with structure of

Mark Klein

the to on given mean comes think us we've have loans could that decreased Reserve that, we to take conference of it not though forbearance if Federal they've a any have up to in latitude firm, and be would very we have follow if Federal And which would to our under fine, amount have said, when everyone, didn't, willing and call Brian, would they're stood I because it. forbearance got that. giving fair But us latitude they're to But that more, offer we're we as accommodated done you're given the Reserve we've a we arena. going do just I generally there's hotels, Jon willing they've said, certainly operators, participated particularly But just liquid. in

even kind the could that and even And have not said, of and we clients pretty Dave decreased taken going yet. stood those But liquidity and arenas. do if Reserve, and have we up probably to been we has just we're nope, more our is a that still balances in bullish it. it, year industry hospitality I Federal witness that it. that merited. there so the is know on We're full But proclaimed we've this too, But

Brian Martin

Got you.

this change and they're then classified doesn't sure just you though, the classifieds, And hotels was any at when - there eldercare, special some two of not so trends criticizing the but of change, just you the performing. know about, in Okay. last sound the it any look quarter, the mention how in me for as I was talked

or If those on any any migration note? you're of seeing trends

Jonathan Gathman

holistically, good one facility guarantee carrying million. on on then third But balance, balance prospects have That's appropriately by been $X.X right every issues has probably we the non-pandemic has net, did not well, quarter - feel loan. pandemic. saw the an related that we feel in that, that know of had XXXX a really nothing our again, we impacted USDA see that's a this that second the increase We brought in we by like eldercare severely In for been year, credit migrate small fairly huge a of that and the most earlier but pandemic. do around addressed the pretty about And case. to we're with

Brian Martin

was special classified in so XQ, to in like from sounds some nothing it there Okay, significant a bit it XQ the increase Jon? was is of mention what

Jonathan Gathman

three it them of much drove comes again, one to commercial as anything. large Brian, three down pandemic probably as Yes, credits related two the but really credits, related, non-pandemic number

Brian Martin

Got you.

me for just was one maybe and Okay. sounds how of fees, and deposits just outlook you kind with more on you're loan last appreciated? liquidity would holding the just that, and then Tony, few be just are about pretty to asset margin for more commentary And though more the regard the with side but as a a thinking the bit maybe bring it like down optimistic, just your any

Anthony Cosentino

that out liquidity on money are of or that blown kinds mean, I customers they're what well. those amount been boats, amount of the summarizes or majority I there. think by our it of surprise things. spending and liquidity And the I very I by cars, it we've of bank, the mean, in Yes, away consumer clients, think cash the doing leaving not all is

in bit or but over seen the it at don't to it improve roll been, we got change, a we've market that, our bond bulk a of little or and bit may we can we that go market that the how table. on But that for into are us enough of and we back are sit just a know, the has come waiting. fairly quarter sitting we've just and cash Now, put the CD looking make happy that that and maturities, pipelines a still should We've pipelines to and And fourth savings XXXX. to they're into longer, little to the customers loan decision going in on money we our real. and and some investments. tree convinced comfortable account And are loan are off taken long-term going confidence that sidelines

little a temporary that. if cash, on So to bit a we we're do to take blip happy have more

Brian Martin

Got you.

the guys. appreciate I Okay, all a color and quarter, nice

Mark Klein

soon. Brian. Thanks, Talk

Operator

at [Operator gentlemen conference to additional remarks. Instructions]. time and team I'd call questions, the ladies to it like for turn no management And the this back over closing showing any

Mark Klein

XXXX fourth as for Jamie. as end report results. our Thanks, forward we talking Goodbye. We look for well you year Once of again, with joining January, Thanks quarter joining. overall certainly thanks as to in again us.

Operator

thank you and that do And with will gentlemen attending. We for conference. conclude ladies today's

disconnect may your now lines. You

SB Financial (SBFG) 1 Nov 202020 Q3 Earnings call transcript