Q1 2020 Earnings Call

April 30, 2020

Dead dead dead.

dead dead dead dead.

Thursday Thursday

Yep. Thanks for being a loyal.

Good day and welcome to the investors Bancorp first quarter earnings call today. All participants will be in a listen-only mode. Should you need assistance during today's call, please signal for a conference Special by pressing the star key followed by zero after today's presentation. There will be an opportunity to ask questions to ask a question. You may press * then 1 on a touch-tone phone. You would like to withdraw your question, please press * then two, please note that today's event is being recorded. We will begin this morning's call with the company's standard forward-looking statement disclosure on this call representatives of investors Bancorp Inc. May make some forward-looking statements with respect to its financial position results of operations and business. These forward-looking statements are not guarantees of future performance and are subject to risks uncertainties and other factors some of which are Beyond investor Bank corpse control.

Good day and welcome to the investors Bancorp first quarter earnings call today. All participants will be in a listen-only mode. Should you need assistance during today's call, please signal for a conference Special by pressing the star key followed by zero after today's presentation. There will be an opportunity to ask questions to ask a question. You may press * then 1 on a touch-tone phone. You would like to withdraw your question, please press * then two, please note that today's event is being recorded. We will begin this morning's call with a company standard forward-looking statement disclosure on this call representatives of investors Bancorp Inc. May make some forward-looking statements with respect to its financial position results of operations and business. These forward-looking statements are not guarantees of future performance in our subject to risks uncertainties and other factors some of which are Beyond investors Bancorp control.

Are different or difficult to predict and which can cause actual results to materially differ from those expressed or forecast in these forward-looking statements and last night's off the company included. It's safe harbor disclosure and refers you to that statement. This document is incorporated into this presentation or a more complete discussion of the certain risks and uncertainties affecting investors Bancorp. Please see the section entitled risk factors management discussion and Analysis of financial conditions and results of operations set forth in investors Bancorp filings with the SEC.

today

Are different are difficult to predict and which can cause actual results to materially differ from those expressed or forecast in these forward-looking statements and last night's press release the company included. It's safe harbor disclosure and refers you to that statement. This document is incorporated into this presentation for a more complete discussion of the same risks and uncertainties affecting investors Bancorp. Please see the section entitled risk factors management discussion and Analysis of financial conditions and results of operations team set forth in investor bankruptcy filings with the SEC today. I would like to turn the call over to Kevin Cummings chairman and CEO of investors Bancorp.

I would like to turn the call over to Kevin Cummings chairman and CEO of investors Bancorp.

Thank you Chris and good morning and welcome to the investors Bancorp first quarter earnings conference call.

Last night the company reported in its press release net income of 39.5 million or $0.17 per diluted share for the quarter ended March 31st. 2026 is 48.7 million or nineteen cents per share, but three months ended December 31st, 2019 and 48.2 million or 18 cents per diluted share month for the quarter ended March 31st last year.

Last night the company reported in its press release net income of 39.5 million or $0.17 per diluted share for the quarter ended March 31st. 2026 is 48.7 million or $0.19 per share for three months ended December 31st, 2019 and 48.2 million or 18 cents per diluted share month for the quarter ended March 31st last year.

But I must say that the historical results have left meeting in today's environment as we deal with the economic uncertainty and much more serious issues of health and safety as we manage through Thursday. It's unprecedented and demek.

Say that the historical results have less meeting in today's environment as we deal with the economic uncertainty and much more serious issues of health and safety as we manage through this life and demek.

Right now our priority is protecting everyone's health and well-being are employees customers vendors and the communities where we work or pandemic crisis Choice Meats daily includes the entire executive management team plus key members of credit operational compliance and cyber risk management where we discuss issues on topics ranging from employee health issues and Technology to Capital and liquidity management.

Right now our priority is protecting everyone's health and well-being are employees customers vendors and the communities where we work or pandemic crisis management team mates daily includes the entire executive management team plus key members of credit operational compliance and cyber risk management where we discuss issues on topics ranging from employee health issues and Technology to Capital and liquidity management.

We are focused on operating with a strong liquidity position as we are maintaining and above-average cash balance at quarter-end.

We continue to maintain a robust capitalization by limiting balance sheet growth and foregoing share BuyBacks.

Excess capital and liquidity plus a fortress balance sheet will serve us well through these uncertain times.

Credit topics include asset quality portfolio analysis and adherence to and revisions the credit policies to meet the current environment.

We continue to maintain a robust capitalization by limiting balance sheet growth and foregoing share BuyBacks excess capital and liquidity plus a fortress balance. May I serve us well through these uncertain times credit topics include asset quality portfolio analysis and adherence to and revisions the credit policies to meet the current environment.

It should be noted that alone portfolios past performance has been very strong and we are well-positioned entering this cycle or net charge-offs over the past three years have averaged four basis points and five basis points over the last five years a loan portfolio has a lower risk profile compared to our peers as almost 60% of our loans are in the residential space and the multifamily and Residential Mortgages portfolio.

It should be noted that alone portfolios past performance has been very strong and we are well-positioned entering this cycle or net charge-offs over the past three years have averaged four basis points and five basis points over the last five years. Our loan portfolio has a lower risk profile compared to our peers as almost 60% off loans are in the residential space in the multifamily and Residential Mortgages portfolio.

Total net charge-offs for the multi-family and mortgage loan portfolios for the 5 years ended 12/31 19 or less than a million dollars in total and $22 off the residential portfolio respectively. And the first quarter of this year's net charge in the first quarter of this year net charge-offs totaled $615,000 for these two quad has our average ltvs at year end or approximately 60% for the residential and multi-family portfolios and 55% for the CRM and consumer portfolios are weighted average debt service coverage ratio for the multi portfolio, excluding Co-Op loans was 1.38 times and one point six thousand times but the CRV portfolio.

Total net charge-offs for the multi-family and mortgage loan portfolios for the 5 years ended 12/31 19 or less than a million dollars in total and $22 off the residential portfolio respectively. And the first quarter of this year's net charge in the first quarter of this year net charge-offs totaled $615,000 for these two quad has our average ltvs at year end or approximately 60% for the residential and multi-family portfolios and 55% for the CRM and consumer portfolios are weighted average debt service coverage ratio for the multi portfolio, excluding. Co-Op loans was 1.38 times and 1.61 times, but the CRV portfolio.

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Pause for the residential and consumer loan portfolios was seven $49 and $71 respectively at year end.

FICO scores for the residential and consumer loan portfolios was seven $49 and $71 respectively at your end.

Credit quality has been our focus and will continue to be our strength as we move through the crisis. We hope for the best but are prepared for the storm and have placed little Reliance on any of the economic predictions that we hear a news or from the quote experts. No one knows where this crisis will go and we will continue to be diligent in our management by being prudent in our judgments and adhering to our core values and serving our customers and our communities as a good corporate citizen all banking services remain available to our customers and the retail network has branches remains open with drive-thru and ATMs and by appointment in the branches.

Credit quality has been our focus and will continue to be our strength as we move through the crisis. We hope for the best but are prepared for the storm and have placed little Reliance on any of the economic predictions that we hear on the news or from the quote experts. No one knows where this crisis will go and we will continue to be diligent in our management by being prudent in our judgments and adhering to our core values and serving our customers and our communities as a good corporate citizen all banking services remain available to our customers and the retail network has branches remains open with drive-thru and ATMs and by appointment in the branches.

Digital channels allow customers to transact remotely.

Digital channels allow customers to transact remotely and our call center has been staffed up to ensure that we are able to assist our customers in a timely manner last week. Our average wage. I'm at the call center was two minutes and was as was as low as twenty five seconds and our call dropped rate was as low as 2% over the past week with a daily average on the 10%

And our call center has been staffed up to ensure that we are able to assist our customers in a timely manner last week. Our average wait time at the call center was two minutes and was as well as low as twenty five seconds and our call drop rate was as low as 2% over the past week with a daily average on the 10%

On the commercial side. We've been proactive and reaching out to our customers to help them through this crisis. Our C&I portfolio has Departments of 209 on 206 299 loans for a total balance of $500 million or 19% Total impact on cash flow was approximately 18 million over the 90-day period off the multi-family portfolio the permits totaled 1.2 billion on 227 loans for an average loan of 5.3 million and the CR-Z portfolio off at the permits totaling 1.3 billion on 305 loans with an average balance of 4.3 million.

We have waived the number of consumer fees for up to 90 days and that includes but are not limited to ATM monthly maintenance and overdraft fees. Additionally. We are allowing our club to defer mortgage payments for up to 90 days due to financial hardships caused by this crisis. We have deferred monthly mortgage payments for approximately one 1600 customers month, but a total balance of $648 million with an average balance of $400,000 on the commercial side. We've been pro-active in reaching out to our customers to help them through this crisis. Our C&I portfolio has Departments of $209 on 209 299 loans for a total balance of $500 billion or 19% off total impact on cash flow was approximately 18 million over the 90-day period for the multi-family portfolio the permits totaled 1.2 billion on 225.

Loans for an average loan of 5.3 million and the CR-Z portfolio had the permits totaling 1.3 billion on 305 loans with an average balance of 5.3 million.

The total payment departments amounts were a 12 million and twenty million for the multi and cre portfolios over the 90-day Department.

The total payment departments amounts were of 12 million and twenty million for the multi and cre portfolios over the 90-day Department.

A year in for the multifamily and cre customers with deferments. The average debt service coverage was 1.69 and 1.47 times respectively off but the CRA and multi-family the average fee on deferred loans was approximately 53% for both portfolios.

A year in for the multifamily in cre customers with deferments. The average debt service coverage was 1.69 and 1.47 times respectively month for the CRA and multi-family. The average fee on deferred loans was approximately 53% for both portfolios.

We open.

Active working with the public not-for-profit space and the private sectors to meet the needs of our customers and our community.

We have been active working with the public not-for-profit space and the private sectors to meet the needs of our customers and our community.

Overall Banks through this crisis have played a significant role to act as a conduit between the government and our customers in an unprecedented role banks have stepped up to provide the process in the manpower to disperse billions of relief to small businesses throughout, New Jersey and throughout the country.

Government could not get this done alone. But it is a public-private partnership to help businesses in need and I certainly hope that this program although not perfect does not come back with the industry on the time passes and people on the sidelines and Washington question the decisions Made In the Heat of this battle.

Government could not get this done alone. But it is a public-private partnership to help businesses in need and I certainly hope that this program although not perfect does not come back to haunt the industry on the time passes and people on the sidelines and Washington question the decisions Made In the Heat of this battle.

Investors bank without an SB a platform was able to build a digital platform working with a fintech partners and it was and it certainly wasn't not an easy process thought it was a difficult time and probably not our finest hour, but the team worked diligently and was able to execute with the s p a satisfying our entire Pipeline with current home approvals of approximately $335 million for 1850 customers.

Investors bank without an SB a platform was able to build a digital platform working with a fintech partners, and it was and it certainly wasn't not an easy process thought it was a difficult time and probably not our finest hour, but the team worked diligently and was able to execute with the SBA satisfying our entire Pipeline with current Cox approvals of approximately $335 million for 1850 customers.

We were very rude.

We were very prudent in our expectations here as we did not want to over-promise or under deliver with our customers.

And our expectations here as we did not want to over-promise or under deliver with our customers.

Investors Bank in the industry as a whole has worked around the clock to assist the treasury and the SBA and providing relief to small businesses throughout the country. It was our civic duty to get this done and I'm very proud of our perseverance and grit and the personal sacrifices of our teams made to support our customers.

It is not been easy. But like the Fear Experience during the initial outbreak of this pandemic in the New York metropolitan area. We have overcome many obstacles in the workplace included with technology challenges working from home and caring for the families of the employees and friends who will lost the disc coronavirus. We are at the epicenter of this crisis. We have the team to manage through these many problems.

It has not been easy. But like the Fear Experience during the initial outbreak of this pandemic in the New York metropolitan area. We have overcome many obstacles in the workplace including wage technology challenges working from home and caring for the families of the employees and friends who will lost the disc coronavirus. We are at the epicenter of this crisis Thursday. We have the team to manage through these many problems.

From the very beginning we stepped up our cleaning protocols in the branches and corporate locations as per the CDC guidelines.

From the very beginning we stepped up our cleaning protocols and the branches and corporate locations as per the CDC guidelines.

It's early March all employees have been dispersed and are either working from home or another is BC locations, including key operating functions such as wires treasury call Santa and executive management with the majority of our back office employees working from home.

Those employees who remain on-site are practicing social distancing with limited in-person meetings and travel health benefits have been expanded for our employees through the employee assistance program the waiving of co-pays and all telemedicine visits.

Since early March all employees have been dispersed and are either working from home or another is BC locations including key operating functions such as wires treasury call Santa Claus executive management, but the majority of our back office employees working from home those employees who remain on-site are practicing social distancing with limited in-person meetings and travel health benefits have been expanded for our employees through the employee assistance program the waiving of co-pays and all telemedicine visits.

through all this

Calamity we were able to close our acquisition of Gold Coast Bank on April 3rd adding seven branches to our Long Island franchise with 488 million in deposits and 453 million in a legal team did an outstanding job working with the bankers and Gold Coast CEO John too nice and his management team to close this deal when others may have postponed or or walked away from the transaction. I'd like to thank our GC Brian Duran Chief technology officer Chris Botto and Facilities director Joe Valenti, but getting this deal closed completing the seeds conversion in the weekend and changing the interior and exterior signage has to the to the investors bank brand all on a weekend through difficult circumstances to say the least.

Through all this Calamity we were able to close our acquisition of Gold Coast Bank on April 3rd adding seven branches to our Long Island franchise with 488 million and deposits and 5 and 53 million in loans are legal team did an outstanding job working with the bankers and Gold Coast CEO John too nice and his management team to close this deal when others may have postponed know or a walked away from the transaction. I'd like to thank our GC Brian Duran Chief technology officer Chris Botto and Facilities director, Joe Valenti the getting this deal closed completing the system's conversion in the weekend and changing the interior and exterior signage has to the to the investors bank brand all on a weekend through difficult circumstances to say the least.

We wish to welcome the Gold Coast customers employees to to the investors family and as part of this transaction and in station with its chairman John Tunis, we made a $1,000 donation to The Stony Brook University Hospital to assist their workers as the hospital built a thousand bed temporary measure like Hospital on the football field of the University.

We wish to welcome the Gold Coast customers employees to to the investors family and as part of this transaction and in consultation with its chairman John Tunis, we made a $5,000 donation to The Stony Brook University Hospital to assist their workers as the hospital built a thousand bed temporary measure like Hospital on the football field of the University.

We've been very busy supporting the health care workers and the not-for-profits in our community early on in March reallocated to the retail branches and their staff $150,000. But need to invest in the community with meals for elderly customers who may be homebound donation to food pantries purchase of air purification machines, but in New York Hospital gift card of workers and many other acts of kindness and hope in a time of uncertainty and despair. Our foundation has made disbursements of 820000 to food banks Health Providers Youth Services homeless shelters housing and supporting the underserved in our communities.

We've been very busy supporting the health care workers and the not-for-profits in our community early on in March. We allocated to the retail branches and their staff $150,000 but need to invest in the community with meals for elderly customers who may be homebound donation to food pantries purchase of air purification machines, but in New York Hospital gift cards medical workers and many other acts of kindness and hope in a time of uncertainty and despair. Our foundation has made disbursements of 820000 to food banks Health Providers Youth Services homeless shelters housing and supporting the underserved in our communities.

We have made grants for economics.

We have made grants for economic support a small small businesses of 125000.

support a small bed small businesses of hundred and twenty five thousand

The bank and Foundation have also added additional funding to local charities foundations and the community of $190,000 to support local nonprofits and Retail and small businesses and needs during this crisis.

the bank and Foundation have also added additional funding to local charities foundations and the community of $190,000 to support local nonprofits and Retail and small businesses in need during this crisis.

In this time of uncertainty it is time for the private sector to support our communities and show the country. The generosity of the banking industry has to hide of capitalism in our society.

Coming into this pandemic. We think we have a strong balance sheet excess liquidity and Stella credit quality and are well-positioned to weather this storm.

We have strong liquidity at our parent company.

And at the board meeting this week a quarterly dividend of $0.12 per share was approved payable in May based on today's forecast. We believe we are well-positioned to maintain dividend going forward.

We had great momentum momentum coming off a strong fourth-quarter and executing the Blue Harbor transaction at year-end January and February were probably the best two months, but their earnings wage history of the company as we learn before the March fed Cuts 38.6 million for the two months ended February 29th. We are in another world though today as we navigate this pandemic and look forward to getting back to some sense of normalcy with respect to credit quality a loan loss Reserve increased to $243 million, which is 1.14% of total loans at March 31st.

Provision was 31.2 Million for the quarter which includes the impact of the covid-19 and demek estimate that approximately $24 to $26 million of this provision is related to economic and Health crisis.

We had great momentum momentum coming off a strong fourth-quarter and executing the Blue Harbor transaction at your end, January and February were probably the best two months but their earnings off the history of the company as we learn before the March fed Cuts 38.6 million for the two months ended February 29th. We are in another world though today as we navigate this pandemic and look forward to getting back to some sense of normalcy with respect to credit quality a loan loss Reserve increased to $243 million, which is 1.14% of total loans at March 31st or provision was 31.2 Million for the quarter which includes the impact of the covid-19 endemic estimate that approximately $4 to $26 million of this provision is related to this economic and Health crisis.

On non-accrual loans total 98 million down from last year at March 31st by 17% but up slightly from year-end by three million. The increase from your end is due to one business loan for $5, which matured in December 2019, and there's not been renewed at this time. We believe we are well collateralized and no losses expected or allowance than losses coverage ratio to not accrue loans is 248% up from 200% at this time last year during the quarter. We had one significant charge off of eight million dollars on a loan no leverage lending portfolio, which was not meeting its cash flow projections and was in a sales process with an investment banker that failed due to the pandemic crisis.

On an accrual loans total 98 million down from last year at March 31st by 17% but up slightly from year-end by three million the increase from your page due to one business loan for five million dollars, which matured in December 2019 and has not been renewed at this time. We believe we are well collateralized and no losses expected wage or allowance for loan losses coverage ratio to not accrue loans is 248% up from 200% at this time last year during the quarter. We had one significant charge off of 8 million am not alone in a leveraged lending portfolio, which was not meeting its cash flow projections and was in a sales process with an investment banker that failed due to the pandemic crisis.

This portfolio totals $264 million with 23 borrows at March 31st with one bar over twenty million three loans are currently in the deferral process with Tom making their first quarter interest payment and one making a partial interest payment.

This portfolio totals $264 million with 23 borrows at March 31st with one bar over twenty million three loans are currently in the deferral process with them making their first quarter interest payment and one making a partial interest payment.

30 day delinquencies were up in the multifamily portfolio by 12.3 million and the three largest loans for approximately $45 million have made their March payments in the CRV portfolio the increase relates to one lone for twenty million to a significant investor that has over twenty million dollars invested in a Manhattan property. We are monitoring all these loans closely with considering the economic environment.

Date delinquencies. We're up in the multifamily portfolio by 12.3 million and the three largest loans for approximately 45 million have made their mortgage payments in the CRV portfolio wage increase relates to one lone for twenty million to a significant investor that has over twenty million dollars invested in a Manhattan property. We are monitoring all these loans closely considering the economic environment.

Total deposits increased $320 billion for the quarter as the cost of deposits increased decreased twenty basis points as we reacted quickly to the pandemic by increasing our liquidity by increasing cash and from banks by 500 million at quarter-end Capital liquidity and reserves are key factors as we navigate through. This crisis has rates have come down. We felt it prudent to invest in building all liquidity Reserves at the expense of some earnings to be better prepared for the uncertain future. As long as I said earlier. We are preparing for the worst, but hoping for the best

Total deposits increased $324 billion for the quarter as the cost of deposits increased decreased twenty basis points as we reacted quickly to the pandemic by increasing our liquidity by increasing cash and do from banks by 500 million at quarter-end Capital liquidity and reserves are key factors as we navigate through. This crisis has rates have come down. We felt it prudent to invest in building all liquidity Reserves at the expense of some earnings to be better prepared for the uncertain future long. As I said earlier. We are preparing for the worst, but hoping for the best

Now I'd like to turn the call.

All over to Sean or CFO who will give some additional color on our operating results for the quarter. Sure.

Now I'd like to turn the call over to Sean or CFO who will give some additional color on our operating results for the quarter. Sure. Thank you, Kevin.

Thank you, Kevin.

Earnings before income taxes and provision for credit losses. We're $8,500 million for the 3 months ended March 31st, 2020 an increase of three million or 4% compared to the prior quarter an increase of 21% over the prior-year quarter.

Mornings before income taxes and provision for credit losses. We're 85% $4 million for the 3 months ended March 31st, 2020 an increase of three million or 4% compared to the prior quarter an increase of 21% over the prior-year quarter.

Well net loan balance has decreased quarter of a quarter commercial and Industrial loans increased one hundred four point two million or 3.5% quarter-over-quarter.

Well net loan balance has decreased quarter-over-quarter commercial and Industrial loans increased one hundred four point two million or 3.5% quarter-over-quarter.

Net interest margin increased ten basis points to 2.71% quarter-over-quarter with majority of the increase occurring on a core basis.

Net interest margin increased ten basis points to 2.71% quarter-over-quarter with majority of the increased recurring on a core basis.

We continue to benefit from Fed rate cuts. And so our cost of interest-bearing deposit declined twenty basis points to 1.39% from the fourth quarter.

Total non-interest income totaled 14.7 million for the quarter a decline of 5.8 million over quarter. We recorded elevated Swap and Equipment Finance fees and the fourth quarter and saw both returned to more normalized levels in the first quarter.

Expenses to a hundred two point six million for the 3 months ended March thirty-first a decrease of 4.3 million or 4% compared to the 3 months ended December 31st, 2019.

The efficiency ratio improved to 54.6% from 56.5% in Q4 reflecting a modest increase in revenue and a slight decrease in not interested.

Expenses for a hundred two point six million for the 3 months ended March thirty-first a decrease of 4.3 million or 4% compared to the three months ended December 31st, 2019 the efficiency ratio improved to 54.6% from 56.5% in Q4 reflecting a modest increase in revenue and a slight decrease in non-interest expense.

We adopted Cecil on January 1st. 2020 upon adoption will company recorded an increase in allowance for credit losses of 11.7 million provision for credit losses was 31.2 Million for the three months ended March thirty first two thousand twenty and was significantly impacted by the covid-19 pandemic.

We adopted on January 1st 2020 upon adoption with company recorded an increase in allowance for credit losses of eleven point seven million provision for Chrome losses was 31.2 Million for the 3 months ended March 31st, 2020 and was significantly impacted by the covid-19 pandemic.

At the time we close.

At the time we close the books in early April our forecast scenarios included a second-quarter GDP decline of up to nearly 25% and unemployment up to 13% off. And are you shaped recovery?

The books in early April our forecast scenarios included a second-quarter GDP decline of up to nearly 25% and unemployment up to 13% and a U-shaped recovery.

Given the uncertainty and how the pandemic will unfold generally makes projecting provision difficult that being said a provision in the second quarter will be driven in large part by the expected duration and severity of the month.

After quality liquidity and capital. We're in a strong position at quarter-end as we headed into this pandemic not a pool loans represented 46% of total loans at March 13th compared to 44% at December Thirty One.

Ask a quality liquidity and capital. We're in a strong position at quarter in as we headed into this pandemic not a pool loans represented 46% of total loans at March 13th compared to 44% at December Thirty One.

Well our allowance for credit losses the loan stood at 12.2 2% at March 31st.

Well our allowance for credit losses the loan stood at 102.22% at March 31st.

a common

Equity Tier 1 ratio was 13.1% at quarter-end exceeding the well-capitalized level by approximately 1.3 billion in addition. All of our regulatory ratios were meaningfully above well-capitalized levels are quarterbacks.

Common Equity Tier 1 ratio was 13.1% at quarter in exceeding the well-capitalized level by approximately 1.3 billion in addition. All of our regulatory issues were meaningfully above well-capitalized levels like ordering

Liquidity is robust improved quarter-over-quarter our loan-to-deposit ratio stood at 117% at quarter-end down from 122% at year end gain access to borrowing facilities and other liquidity sources told over nine billion dollars at March 31st.

Liquidity is robust improved quarter of a quarter our loan-to-deposit ratio stood at 117% at quarter in down from 122% at your end off access to borrowing facilities, and other liquidity sources told over nine billion dollars at March 31st.

The unprecedented environment makes it difficult to provide formal guidance at this time as such we are withdrawing our previous previous provided earnings guidance that said at a high level. We expect our margin to continue to benefit from declining deposit costs in the near-term and Loan growth will remain muted given the economic backdrop and our focus on profitability, but could change based on business conditions expenses generally are expected to be in line with previous guidance.

Finally will be providing some additional details on deferrals and Loan balances by industry type reference by Kevin today and our 8-k that gets filed with our press release month.

Now I'd like to turn it back over to Kevin for concluding remarks. Okay show and thank you message is to be faithful and not fearful. We need to be a source of Hope and optimism in the community and continue to live by our core values by being a good corporate Citizen and making a difference in a time of uncertainty. We are here for our customers. We are partnering with both the not-for-profit sector and the government sectors to help our communities. We have had our challenges. But as of today, we have executed on the task and the projects that this pandemic has been created working from home Communications with both employees and customers technology changes and enhancements cybersecurity the Gold Coast acquisition commercial and mortgage loan deferrals same platform for the SBA program and leading our teams to repair it during a period of uncertainty and fear all have come with unique problems and adjustments.

The bank has accomplished these things because of the hard work and Leadership of our Executives at times. It may seem on the well on the overwhelming but we are getting it done. We will work continue to walk together and encourage. No Inspire our teams to reach into the depth of their souls to get through this crisis and clear those obstacles in front of us. We we do not plan to survive but we will strive to this crisis and rise to be the best that we can be the bank will be a source of inspiration during these times because it is through inspiration and encouragement. Thursday is great execution success and peace in your life.

Now I'd like to turn it back over to Kevin for concluding remarks. Okay show and thank you message is to be faithful and not fearful. You need to be a source of Hope and optimism in the community and continue to live by our core values by being a good corporate Citizen and making a difference in a time of uncertainty. We are here for our customers. We are partnering with both the not-for-profit sector and the government sectors to help our communities. We have had our challenges. But as of today, we have executed on the task and the projects that this pit demek has been created working from home Communications with both employees and customers technology changes and enhancements cybersecurity the Gold Coast acquisition commercial and mortgage loan deferrals took a platform for the SBA program and leading our teams to repair it during a period of uncertainty and fear all have come with unique problems and adjustments.

The bank has accomplished these things because of the hard work and Leadership of our Executives at times it may seem on the well.

And overwhelming but we are getting it done. We will work continue to work together and encourage. No Inspire our teams to reach into the depth of their souls to get through this crisis and clear those obstacles in front of us. We we do not plan to survive but we will strive through this crisis and rise to be the best that we can be the bank will be a source of inspiration tour these times because it is through inspiration and encouragement that brings great execution success and peace in your life.

Our communities and customers need us now more than ever.

We will continue to step up and face these challenges. I'll leave his continue to inspire each other to our greatest moments knowing that we are giving our best and leaving all our energy on the field. It is a war out there and we will not be victims of this virus, but we will be victors.

Our communities and customers need us now more than ever. We will continue to step up and face these challenges our leaders continue to inspire each other to our greatest moments know that we are giving our best and leaving all our energy on the field. It is a war out there and we will not be victims of this virus, but we will be victors.

Now I'd like to turn the call over to some questions. Thank you very much.

We will now begin the question-and-answer session as a reminder to ask a question. You may press * then 1 on your touchtone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. If at anytime your question has been addressed then you would like to a dry it, please press * then two at this time. We will pause momentarily to assemble our roster.

We will now begin the question-and-answer session as a reminder to ask a question. You may press * then 1 on your touchtone phone. If you're using a speaker phone, please pick up that before pressing the keys. If at anytime your question, it has been addressed then you would like to withdraw it, please press * then two at this time. We will pause momentarily to assemble are off.

Today's first question comes from Mark Fitzgibbon with Piper Sandler. Please proceed. Hey guys, good morning. Hope everybody's well.

Thanks Mark, So I wondered first if it would be possible to give us a little bit of detail in the size of things like your hotel restaurant and retail portfolios.

Yep, Mark. I can I can help you there, you know our our accommodation and food business is about 2% of total loans about $387 million. So that's that's that's the largest.

Okay. Yep, Mark I can I can help you there, you know our our accommodation and food. This is about 2% of total loans about $387 million. That's that's that's the largest.

Concentration that we have their Arts entertainment and Recreation about $66 million combined between C and I and c r a and a real big number obviously is in retail giving out commercial real estate portfolio. That's a billion 885 making up about 9% of the portfolio page that those are the biggest concentrations we have as shown said will be filing along with the press release in our 8K a more detailed description of these numbers.

Concentration that we have their Arts entertainment and Recreation about 66 million combined between C and I and c r a and a real phone number obviously is in retail giving out commercial real estate portfolio. That's a billion 885 making up about 9% of the portfolio.

So that those are the biggest concentrations we have as shown said will be filing along with the press release in our 8K off from a more detailed description of these numbers.

Okay, and then as you look at your portfolio and its entirety, I know everything is under pressure. But what is it that you're most concerned about what which you know segments of the portfolio or dead or borrower types, but you have you most most concerned.

Okay, and then as you look at your portfolio and its entirety, I know everything is under pressure. But what is it that you're most concerned about what which you know segments of the portfolio or or both types that you have you most most concerned.

I mean obviously, you know in the cni space, you know that obviously has a lot of concern less concern in the multifamily space. I mean given a fact that that's an eight billion dollar portfolio and resume portfolio is about five billion a little less concerned their cre space off with the shopping centers that also poses some concern. We feel pretty good though that you know, just given where we operate and given, you know, the strength of some of our borrowers and some of the loans and Kevin cited the ltvs and the debt service coverage ratios. Although those that service coverage ratios don't need much right now that you know, well as we go and try and and and go through this this pandemic and as things start to transition back to a more normal State, you know, we we feel dead.

that those portfolios to see multiple and the

I mean obviously, you know in the cni space, you know that obviously has a lot of concern and less concern in the multifamily space. I mean given the fact that's an eight billion dollar portfolio and resume portfolio is about five billion a little less concerned their cre space obviously with the shopping centers that also poses some concern. We feel pretty good though that you know, just given where we operate and given, you know, the strength of some of our borrowers in some of the loans and Kevin cited the ltvs and the debt service coverage ratios. Although those debt service coverage ratios don't need much right now that you know when I go and try and and go through this this pandemic and as things start to transition back to a more normal state

Portfolios will will will be will behave well again, you know, there's some doubt on the C&I portfolio, but given some of our exposures there. We also we feel pretty that we happen to have Rich Bangla who's actually blending officer on the phone and he may be able to add a little bit more color rich.

Yeah. I think you pretty much covered it. I think we're looking at predominantly our retail the commercial real estate and depending upon the duration and when it's actually comes back like that's where there's been the most noise as far as tenants sending in letters.

You know, we we feel that those portfolios the CRA multiplayer and the resi portfolios will will will be will behave well again, you know, there's some down the cni portfolio but given some of our exposures there. We also we feel pretty good there. We happen to have Rich Bangla who's actually blending officer off the phone and he may be able to add a little bit more color riche. Yeah. I think you pretty much covered it. I think we're looking at predominantly our retail the commercial real estate and depending upon the duration and when this actually comes back it says like that's where this has been the most noise as far as tenants sending and letting you know refusing to pay and talking about what time they will actually start making payments again after the pandemic is lifted.

Okay, thanks. And then I guess I was curious on Commercial line utilization rates. Have you seen much of an uptick there? That's far.

Have not actually, you know, we will monitoring that very closely as you may imagine and had a little uptick in it and then it flattened out. So the unused lines haven't, you know, haven't been a concern to us.

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