Q2 2020 Atlantic Capital Bancshares Inc Earnings Call
[music].
Good morning, welcome to the Atlanta Capital thing second quarter Twentytwenty earnings Conference call all participants will be.
Oh shouldn't need assistance the signal in corporate specialists across thing Star zero on your telephone Pete.
After today's presentation, there will be an opportunity to ask questions to ask the question you May Press Star then one on your telephone Pete.
So withdraw your question. Please press Star then too.
Please note this about just being webcast I.
I would now like turn the conference over to Great Fleming Chief Risk Officer. Please go ahead.
Thank you Andrew and thank you all for joining us for our second quarter 2020 earnings call with me today to discuss our results or Doug Williams, Chief Executive Officer, and Patrick Hooks, Chief Financial Officer.
As a reminder of the Atlanta capital earnings releases are available in the Investor Relations section of our website I.
I wish to caution you that we'll be making forward looking statements. During this call and the actual results may differ materially I encourage you to review the disclaimer in the earnings release dealing with forward looking information.
This disclaimer applies equally to statements made on this call. In addition, some discussions may include references to non-GAAP financial matters information about these measures, including reconciliations to GAAP measures may be found in our FCC filings and in our earnings release.
With that I will turn the call over to the CEO of Atlanta Capital Doug Williams.
Thank you great. Good morning, Thank you for joining us to review Atlanta cap. This second quarter report.
You've seen our release so today, we will review the accompanying investor presentation.
Also filed on form 8-K yesterday evening.
Oh, well first <unk> remarks, then pad Oaks reviews, the financials in greater detail, great gloomy will discuss our assessment of Atlantic captains credit quality.
We'll take your questions after that.
I'll start on page three of the presentation.
By noting that we recorded another quarter of solid operating performance with strong growth in pretty bullish about revenue.
Deposits continues to grow at a strong pace and we reduced deposit cost sharply.
To support our clients, we made 821 triple b loans totaling $234 million net a pre payments under the safe Harbor provision.
You'll recall that we proactively and preemptively offered 90 day principal and interest payment deferrals to our clients.
Those deferrals peaked at over $500 billion for almost 24% of total launch in the second quarter.
And we currently expect socket deferral request to decline to around $67 billion or 3% of launch.
Our bankers a bit in frequent dialogue with our clients over the last four to five bucks.
And we can talk did a comprehensive review of our borrowers grade bay to assess their prospects during the pandemic.
Great well provide more detail, but we wanted the vast majority of them are doing well see the crude business results and our guardedly optimistic about the remainder twentytwenty.
However, given the uncertainty over the course of the pandemic and the pace of economic recovery.
We are prudently built the allowance for credit losses to 1.8% of loans held for investment.
Excluding triple B lunch.
The allowance is now 5.6 times nonperforming loans.
On page four Oh, hi, why the pre provision net revenue was up 20% annualized for the first quarter and.
And grew 16% year over year.
Loans and deposits grew a solid pace with and without the effect of Triple B luggage made during the quarter.
The other number I'd like to highlight is the 18 cents per share growth in tangible book value to $14.72. Despite this is fragile addition to the allowance for credit losses.
Page five provides an 18 quarter perspective on loan growth at Atlanta capital.
Excluding the Tennessee operations to best to than April 20 died team.
We've grown commercial loans, which we define as commercial industrial and owner occupied commercial real estate loans.
At a 15% compound average growth rate over that timeframe.
Commercial loans, excluding triple B loans.
Close to 60% of total loans today and over the last four and a half years illustrated the variable rate fixed rate mix. This change from around 90% bearable before we acquired Eplus GE in late 2015.
To just over 50% today.
Turning to page six strong core relationship deposit growth is that a consistent feature of our performance over the last four and a half years.
What's total deposit growth at a 16% compound average growth rate.
And the band deposit account balances grow it had a terrific 42% compound average growth rate over that timeframe.
Also note that the average deposit cost declined to 22 basis points in the second quarter.
Now Pat will review the financials in more detail.
Thanks, Doug it's on page seven I'm going to start with a quick summary of our second quarter income statements before I dig in and some of the details.
Net interest income increased 650000 to 21.6 million in the second quarter.
The increase was primarily due to the addition of the 234 million in Triple Pete loans.
The provision for credit losses was 8.9 million Gray will provide more detail on this but let me note that this included an 8.2 million dollar provision for loan losses, and a 642000 dollar provision for unfunded commitments.
Non interest income was 2.3 million down slightly from the first quarter.
Service charge income decreased 151000, primarily due to coping related impact on DCH volumes and our payments business.
NSPI income extra income increased 414000 <unk>.
As we saw a slight increase in the amount of lung sold during the quarter.
Expenses in the second quarter were unchanged seasonally lower benefit costs were offset by an increase from incentive accruals and salaries.
On page eight.
The margin decreased 18 basis points in the second quarter to 323.
Excluding the impact of the P.P.P. loans, the NIM was closer to 337 down only four basis points from the first quarter.
Loan yields in the quarter, where 387.
Excluding the triple P. loans loan yields for nine.
A decrease of 68 basis points for the first quarter.
I would expect to continue seeing some pressure on core loan yields as we said the full impact in the second quarter of reductions in LIBOR.
Along with pressure on fixed rate loan pricing, but most of it is behind us.
The loan yield for the Triple Pete loans in the second quarter was 152.
And we'll increased to approximately 260 in the third quarter as we recognize the full quarterly benefit from advertising the loan fees into income over the life of the loans.
No the exact timing of the loan forgiveness is difficult to predict.
The margin and interest income will benefit over the next several quarters for the forgiveness of these loans and we were able to accelerate the recognition of the remaining 7.1 million and fee income.
As Doug mentioned earlier, we saw nice decreasing our cost of deposits at 22 basis points.
I'm pleased again this quarter with our bankers ability to reduce our cost of deposits and expect to see some additional decreases in a third quarter, but.
Given the already low rates on deposit costs. The further reductions will most likely not offset expected drop in loan yields. This will result in some core margin compression over the next several quarters.
Excluding any impact from the triple payloads.
On page nine you'll see that we saw another quarterly decrease in our efficiency ratio to under 54% as we continue to focus on expense management.
As I mentioned earlier.
Salaries and benefits were unchanged as a reduction in seasonally higher first quarter benefits expense will offset by annual salary increases and higher incentive accruals.
The second quarter also included approximately $293000 in kobin related payments during the quarter.
We're also benefiting from a decrease in items, such as travel and entertainment expense due to our work from home initiatives.
Finally, we booked FDIC expense up.
75000, as we used up outstanding credit took in the first quarter.
[noise] on page 10, you'll see our balance sheet liquidity remains solid as we continue to focus on building core deposit relationships.
Even with the addition of the Triple B loans, our loan deposit ratio remained healthy at age 70%.
And a page 11, you'll see our capital position remains strong.
At June Thirtyth of tangible common equity ratio was 11% and our total risk based capital ratio at the bank was 14.4%.
Now I'll turn it back up the Greg.
Thanks, Pat I'll walk through some credit slides I'll start on page 12. This is a summary of our current loan portfolio.
You will see as as we have been where commercial and commercial real estate focused bank over 90% of our loan bucket them use categories were also a southeast focused bank, though our specialty SP and franchise lending groups do land nationally.
Turning to page 13, we have had very strong historical credit quality charge off and mph. This quarter have remained low and do not reflect any covet empaque.
Classified loans have increased some this year as we recognize potential Ur cobot stress.
But I am on almost all of those additions and that category remained current and accruing.
Turning to page 14 here you can see our reserve build since the end of 2019.
Doug mentioned, we had a similar provision in the second quarter as we had in the first.
If you look towards the left the adoption of Cecil at the beginning of the year did not have a significant allowance drive a significant allowance change for us, but we think the model has worked as intended and building reserves ahead of saying material defaults and charge offs.
The one and a half million in second quarter charge offs were resolutions of pre covet items that had been largely reserved for in Q1 or before.
Thank the allowance for credit losses at 1.8% of total loans, excluding triple P. as conservative, but appropriate given the uncertainty that's still access with the economy and the virus.
Turning to page 15, as Doug mentioned, we were liberal and proactive with deferrals back in March and April peaked at a little bit over 500 million or 24% of total loans.
These initial deferrals are largely rolling off and July.
You can see they're down to 163 million active as of July 21st and almost 80% won't be rolling off deferral by the end of July we've talked to all of those borrowers that are rolling off in the near term and at this point, we only expect as Doug said 67 million or 3% of that aligns to request a second deferral with most of the.
Those as you can see in the hotel segment.
We are encouraged over all by this reflection of most of our borrowers optimism and resilience.
On page 16, we outlined the triple P. loans by size.
The only other thing I would note is about half of these loans and dollars for two existing borrowing clients. The other half were to deposit deposit only class.
Turning to page 17, the cobot sensitive segments, where we have significant exposure are still hotels restaurants, and retail, but as we've learned more about the impact of shutdowns on our borrowers. We've narrowed this to certain subsets of these portfolios, which total about 9% of total loans.
Tell that clearly seen the broadest impact and will be slower to recover than other segments in that book, where about half and half commercial real estate and SBK. We have been encouraged by June occupancy, averaging 50% across that portfolio or borrowers are still cautious about expected normal fall slowdown and Lee.
Is your travel.
And not having the business travel yet to replace that.
And the restaurant category, our QSR, they're doing very well with June revenues on average across all of our locations up 2% year ever here, but we do have a small amount of full service restaurants that are still down fairly significantly over last year.
And finally in retail I struggle, a little bit frankly, with this category and what to include as we just don't have material concerns today.
We've included in this table $95 million and non essential retail, but between national companies with good liquidity and local borrowers who were doing fine today, we're just not very concerned that the at the present time about this segment.
Across all these categories that Weve listed.
The only classified or non accrual loans. We have at this time are some small legacy FSD pre coded remnants that are just still out there.
Turning to page 18.
The last slide I'll talk about this is a shows the risk rating distribution than our portfolio. After assessing the expected covet 19 impacts as Doug mentioned, we reviewed the entire portfolio. In May. This review is led by our bankers and based on discussions that they had with each borrower.
Our approach to grades was to recognize current or or potential weakness flag rate changes you get loans on our watch list we wanted to follow closely.
Of the $54 million increase in criticized loans this quarter, 80% of that was in the special mentioned category, which means potential weakness and only 1 million all in SB eight was moved to nonaccrual.
About 30 of the 54 million was in hotels and restaurants and all of that was in the special mention category.
While our criticized totals are up due to come in and we would expect to see some charge offs down the road, we only have $2 million of nonperforming loans today that are not guaranteed by the FDA.
And we don't see sizable near term default that said things are hard to predict in this environment and we think it was prudent to build a healthy reserve to deal with any borrowers who aren't able to successfully navigate the current economic situation.
With that I will turn it back over to Doug.
Thank you Gray and Andrew up labor ready to take questions now.
We will now begin the question and answer session.
Good question in the press Star then one on your telephone keypad.
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Yes at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then too.
At this time, we will pause momentarily to assemble our roster.
And the first question comes from Stephen Scouten Hyper Sandler. Please go ahead.
Yeah. Good morning, guys, how you doing.
Good morning, Stephen good to hear from.
You guys as well.
So really impressive decline in a interest bearing deposit costs and it sounded like Pat from your comments, maybe not a lot of room left there, but I'm wondering if you can talk to kind of what the dynamics were this quarter and how you think about some of the seemingly transitory inflows and liquidity and what you think the pace it as migrations might.
He from here.
Well, so when you say transitory what are you referring to.
Yeah, just some of the stimulus PBB things that seemingly some of which should probably flow back out is.
That money gets plant or the environment normalize.
Right right, so I don't know <unk>.
Tough to.
Figure how much is left we figure it's less a 100 million it could be 60 $80 billion. That's on our balance sheet at this point.
But that's really hard to predict so yes could that flow out over the next several quarters, that's right, but I don't think better but significant impact we can still going to see good core deposit growth and I'll give a bankers a lot of credit.
We're not chasing money without having to pay up for a lot of deposits at this point so.
That will help again, a little bit of helping the third quarter top drive down costs, a little bit, but we're getting towards the bottom here.
Okay.
Great and do you still expect the kind of normal seasonal inflows that we've seen mostly fourth quarter toward the end of the year to occur this year.
I would think so yes.
Great. They will see then right now and that there's going to change that pattern, but it certainly has been distorted.
By the late tax payments and by a pair of SEC related stimulus and.
Just build of liquidity generally among our clients are in response to the pandemic, but its bad said, there's there's good core.
Deposit growth via business development activity, probably got solid pipelines in these businesses and Treasury management business generally.
And I do think we'll see that seasonal build the deposits and liquidity over the second after the year. So.
We're we have a.
First thing would view with respect our ability to continue to build deposits so though.
I don't above average pace.
Okay, Great. That's helpful and then on the loan growth front, obviously, a big chunk of the net indicated growth.
X PPP was from the consumer the CD secured.
Yet, which I I would think would be a pretty attractive business here today, given the environment. I'm wondering if you think that growth will continue in kind of some thoughts on an overall growth as well as you can give us an ideal what the yields are on the senior secured loans.
Yeah, we do think that they continue to grow we are agreement with the.
The Fintech company is is for more capacity there.
So.
Probably won't see the pace of growth that you saw the second quarter, but it will continue to grow.
Over the course of the year.
And of course, it's very good credit quality, but the yields would that business or.
Lower but given the the a senior secured nature of the of the business the yields are lower than the and elsewhere our portfolio, but we still think there are attractive and had a good source of incremental income from the company.
Okay, and maybe one just one last clarifying question on the P.P.P. impact I think you said, maybe I heard a 2.6% yield expected in Twoq I heard that correctly and and that's right how do you.
Oh I mean, if its forgiveness is more elevated than you would expect today could that you'll be.
Definitely higher and just trying to figure out how to get to that 7.1 million remaining over the next several quarters right right to the 2.6% assumes no forgiveness right. That's just to be as we amortize that fee income over the life of the loans, obviously has gotten to get forgive and that that will get accelerated.
And so roughly 7.1 million remaining at you know July 1st. So you can you can build draw model and make your own guess at this point.
[laughter] perfect. That's really helpful. Thanks, a lot got pritchett, okay. Okay. Thank you Stephen.
The next question comes from Jennifer Demba Suntrust. Please go ahead.
Good morning.
A question the first.
A little bit more color about what your hotel borrowers.
Our same right now in terms of business.
And then my second question is are you seeing any competitive blending opportunities out there on this maybe other banks have pulled back over the last year.
Yes, let gray take the first question and I'll take the second.
Hi, Jennifer.
Hotels said, we've got a a pretty wide range of experience like I mentioned average occupancy engine overall was 50% and that's up from a a low point across the entire portfolio in April of 30%.
You know it really depends and again wide range, but the F.B.A. book is seeing a little bit better trends because they have mostly these drive by.
Type properties.
And so they are on the Gen occupancy.
But over 50%.
And sorry, we have some.
Properties, there that are in great locations butter in central business districts in a couple of cases and those are slower to come back.
And so we're more averaging in the 40 is there.
So you know I would say overall a lot of these properties, except maybe the ones and central business districts are seeing good summer travel pick up and they're expecting that to continue in most places.
Into July.
But they are cautious because there's not a lot of business travel and back to school, whether that is virtual or in person.
They do think it's going to cut down on leisure travel as it normally does this time of year or in the fall.
So I work were a lot of our properties are kinda at or getting into that breakeven range, but we're still pretty cautious on all of them and just making sure that we're talking to him about additional sources of capital.
And Jennifer with respect to your question about new business opportunity, particularly in the credit side over the course of the second quarter, we continue to add new clients and make new loans.
However, you have some countervailing forces so that those of course are soft demand.
We also saw a number of commercial.
Revolving credits repaid during the course of the quarter.
They built up.
[noise] drawn down under the lines of credit than that in the first quarter.
To ensure a liquidity and and.
You know didnt have the need to continue to maintain that level liquidity in the second quarter. So we saw a lot of.
Revolving credit pay downs.
In the wake of the Triple Pilon children, we doing discern up a lot of dissatisfaction with.
A large banks in particular and that is creating some opportunity will follow it up with those clients and others prospects and and adding new business depository.
And credit business.
It's hard to say, what a loan growth with all those factors at play it's hard to say what loan growth could be in second half the year.
We were in the we'd indicated that we expected low to mid single digits outside of PPP and second quarter, that's sort of where we came in.
And.
Hopeful that we'll have some loan growth from the second half of the year, but again lot of uncertainty.
And not a lot of confidence in terms of where that might come in.
Thanks, so much.
The next question comes from Brady Gailey got KBW. Please go ahead.
Hey, Thanks, good morning, guys.
Good morning.
So what I heard your comments about the core NIM going forward like we've seen in some weakness I was surprised at how well.
In the second quarter with the reduction of deposit cost, but maybe just help us.
Think about how much decline we could see in the core margin from here X P. BP.
[noise]. So ex TPP, you know that four basis points is probably a good benchmark for you know third quarter I would guess roughly.
And then obviously it I wouldn't be surprised it continues to trend down over the next several quarters.
As we move in the late next year and kind of bottom out from there.
No.
The whole margin, obviously, we could get a little bit of pickup that third quarter.
With the additional income from the Triple payloads, so I wouldn't be surprised when it comes off the bottom of the 323.
All right that's helpful.
As you said expenses were pretty much flat one quarter at just under 30 million.
FERC order there was that should we expect much growth. There do you think that expenses will be flat in the near term.
Yeah for the remainder of the year, that's probably a good benchmark.
All right and then finally from me you Atlanta capital has been so active share buybacks I think if you look over the last two or three years or repurchase I don't know 15 or 20% of the company, where the stock is pretty attractive here treating well under tangible at 77.
<unk> percent, a tangible book value I know, there's not a lot of corporate share repurchases right now just given the backdrop, but no. It and you still have a lot of capital. So any idea when share buybacks could return for you guys.
Yeah Brady that's something we continue to evaluate we think there.
His exceptional value for our shareholders and buying back shares these levels.
And we good we paused to our share buyback program.
In the first quarter, given all the uncertainty that uncertainty remains.
But somewhere on the horizon, we'd like to resume to.
The the buyback program is the.
Picture clear is more <unk>.
Yeah, Yeah Brady the constraint is not capital the constraint is cash at the holding company, they do that and our dividend capacity from the bank right, but what else haven't.
And so aggressive last year that dividend capacity somewhat limited. So we're just trying to keep and make sure we have liquidity at the holding company at this point <unk>. So we have some flexibility.
Yeah.
Would you ever think about raising an additional.
Debt at the Holdco debt to finance five Bucks.
Hi, it's something to consider.
Okay. Thanks, guys.
<unk>.
The next question comes from Michael Rose of Raymond James. Please go ahead.
Hey, guys hope, you're a hope you're well.
Just had a question on the deferral slide I appreciate the color. They're you know it looks like about 78% of your initial deferrals will will expire at the end of a month second re deferral rate is about 3%.
You think that goes kind of materially higher from here and is it kind of <unk> I assume most of its going to be concentrated as you can see on the sliding in restaurant hotel. Thanks.
Yeah, Michael said said there will be some I it was less as little hard to lay this out in July since July is the big month, where these are rolling off.
But they'll be some overlap where some initial deferrals were granted and may end up maybe a little bit engine will still be on the books along with the three deferrals or the second deferrals, but really if you kind of fast forward to September we think it will really settle more around us this 3%.
That range of of the second deferrals now that there might be some of the later initial deferrals that depending on whats happening a few months from now I need a second deferral, but we really think it's trending towards that level. We just we were more stringent in terms of really asking borrowers to proved.
That they needed additional deferral.
We charge were charging a fee for a second deferral and in most cases, when we kinda talk through that with our borrowers they've said, while I don't actually need it and so that just kind of told us that.
As a lot of banks experienced the request and the except on some deferrals back in March and April for the most part was insurance for uncertainty.
That's helpful. And then just a follow up question on this quarter's reserve build how much it and I'm, sorry, I missed the but how much of it was related to risk rating downgrades versus kind of environmental cobot impact and economic although it's.
So in second quarter, it was about half a half and the and the personnel in the first quarter is more heavily weighted towards the economic forecasts.
Okay. So I guess going forward I under the incurred loss model.
Any reserve builds a assuming the economic environment doesn't get worse would likely just be further migration correct.
That's right that's a fair assumption.
Okay Perfect and then just finally from me I'm just a follow up on the on the lending environment and your market. What's the what's the talent pool situation look like obviously you have a couple of banks that are.
Trying to hire you had a large am are we in the market, what's what's the hiring schematic looked like at this point for you guys. Thanks.
Well. It's there is now available it does seem to be in motion probably not to the degree that we would have been anticipated.
Last year, but <unk>.
We still see people moving around and we've been backed arts and people this year, but recall that our hiring plans for twentytwenty were down substantially from what we did in 2019.
And we really feel like in 2019, we built a lot of capacity.
And given the soft demand in.
And the environment. This year, we really don't feel like we're using all that capacity and we we but we've got there for a.
For next year and beyond so.
We don't anticipate a hiring a new bankers in the same pace that we did last year and.
But we continue to be opportunistic and as we find good bankers will will bring more.
Okay. Thanks for taking my questions guys.
Certainly.
Thank you.
Next question comes from Christopher Marinac Jayden Company Scott.
Hello.
Hey, Thanks, good morning. So thanks for all the details you gave us this morning in last night I guess on one follow up on some of Grace comment just about you know the retail and not being worried about it and I think you know that is just want to get into more detail about that because I think you've learned a lot from you're looking at your borrowers and that sort of deep dive you've been doing on the forbearance. So just wanted to get some more color.
About what you learned and just from there.
Our own liquidity, and what they're sort of planning and into the future.
Feels like there are a lot better suited and I think any was realized before.
Yeah, Chris that's a good question because we have a in a a healthy amount and the broad category of retail and we've talked last quarter about the essential businesses and drugstores gas stations auto parts, so sort of thing and so we really dug in this time on on what broad.
He is called non essential and.
This is really kind of portfolio a specific end dependent these days and.
We are just fortunate as we look through this found that a good chunk of those in that non essential category are.
Large national retailers, and so that might be tenants in our trying that book or some selected shared national credit up pieces in that book and while there being impacted they have good liquidity good support from investors and we chose good borrowers.
Where we got into those areas and then the other piece of it there's.
Retail commercial real estate, so certainly that as a struggling in some areas, but most of this for US is with one relationship that's a very good long in the too.
Developer of centers that for the most part are either anchored by a drug store a dollar store a grocery store and doing okay or in some cases are in retail rural areas where.
They just they haven't been impacted very much. They havent had a whole lot of closures. They may be missed a few rent payments that they have to write off for April and may, but they're telling us that that won't be a problem they've got leverage and you know feel like they're fine.
And then we've got some cardio ships and I think you know results there our mix, but we really primarily have that in one relationship and the Atlanta area, and they're doing very well and profitable across all their location. So if it was good to see after we went through that portfolio and but it's really just been specific to.
To where our borrowers happened to be situated there that we feel pretty good overall about that category.
Great. That's very helpful. So I I guess the question whether it's in retail specifically are really anything else from coming off of these forbearance improving that if the pandemic to sort of lingers longer there's enough liquidity instability. In these businesses that you know the risk of them going back on deferrals seems low is that fair conclusion.
That is fair and that's that's a lot of what we talked about a one when we were talking about each situation and a lot of what we heard from bankers and from them from their borrowers were.
You know I appreciate the assistance I appreciate the Triple P. funding, that's all going to just kind of help me give some some cushion.
But I've also got the ability to kind of keep this thing going on so everybody on the caveat of I can't go on like this forever, but we felt pretty good coming out of those discussions of.
You know at least in the near term.
You know most of our borrowers being solid and having access to other sources of capital.
You know that that'd be a book is not necessarily the same.
By definition those are some earlier stage less access to traditional financing kind of things and they've gotten good assistance through the cares Act.
But but we do expect some of those will struggle coming out of that but it's kind of a business that we've we've built for that and we expect some losses, but they should be.
Fairly spread out and fairly limited because of the SBA guaranteed that we have.
Okay, great. Thanks, again for that and then just a final question on the payments business I know you gave us some.
Trends from the graph saw last night, but just was curious kind of what those businesses have been seen particularly as June finished in early July has played out so far is it better now than I would've been in April may.
Yes, it Chris It certainly is that April and May on a same store sales basis, we saw a C H volumes.
Down 10% to 15%.
In June those same same store sales volumes were up 12% and the total you'll you added a lot of business over the last few months and the total volumes year over year.
In May and June were up about 30%.
So we continue to see very strong trends.
Volume and these and balances coming into that business.
Okay, great. Thanks again.
Certainly.
The next question comes from Ross Haberman or L.A.H. investments. Please go ahead.
Good morning, gentlemen, thanks for the time, most my questions have been answered.
Could you talk about just sort of how quickly Atlanta is opening up are you guys going after restaurants kept it gives the general sense or or do you think like California. Some of the restaurant that stuff might.
Begin to Oh.
A reverse and and and only do outdoors that indoors. Thank you.
Yeah, that's a tough question to answer Andrew I'm, you know, it's a wall so I'm sorry.
You know, it's certainly my impressions are anecdotal and a lot invite to pad and and gray to offer there as well, but I don't think that.
Yeah, We Georgia was one of the first stage three open.
And.
They've doesn't with the resurgence of cases, and so forth here and elsewhere, there doesn't seem to be a lot of.
Oh reversal of a of those openings.
For the most part restaurants were.
Serving either outside or via deliberately.
I don't know of a lot of restaurants that are offering service Donnie rooms, but I think there are some and I haven't heard that they've been.
You know that they've changed their posture in the last month or so here.
If you look at traffic volumes on the Street I continue to increase.
So I just don't think you said much effect and in a.
I really don't think we're we're looking at.
Any meaningful new shut downs.
Okay. Thanks best of luck I.
Thank you.
Once again, if you have your question. Please press Star then one on a touchtone phone.
For Murray G Research. Please go ahead.
Hey, guys.
Oh good morning.
Hey, good morning, I wanted to ask maybe I don't know if you I don't know if you guys. How this number but maybe what the P.T. contribution to two interest revenue was in the corner.
Yeah. So it was it was close to that number I gave out earlier in the 650000 or so.
Okay, Yeah, sorry, if I missed it I'm sorry, so and then another another question on P. I mean, I was wondering I don't know if you guys mentioned this fund maybe what what percentage of the loans do you expect to ultimately be forgiven do you have an expectation there.
Yeah I'd say.
You know kinda like most probably we're guessing 70, 580%.
You know, we surveyed our triple B borrowers and one of the questions. We assets do you expect to apply for a full forgiveness or partial and not surprisingly most of them set fall, but we wonder if that meant they think they're going to get it are that they want to get it but now we think most.
You know the vast majority well and it's a timing is different.
Pat keep asking me you know how to predict the timing and there's still changes being proposed a and still a lot of push for this notion of.
Auto forgiveness for 150000, an under and.
That would really accelerate you know part of the forgiveness into this year, but without that and the 90 days that the FDA has to approve.
Applications that we submit after we review them.
You know really could start to push most if not all of the forgiveness and a 21.
Okay. Thanks very helpful.
Maybe one more for me I mean, obviously really strong.
The positive flows I was wondering if you guys maybe had opportunities to look at maybe some of your borrowings and maybe that you use some of that liquidity there and if you guys have within that.
In terms of wholesale borrowings from home loan bank or the fed or something like that.
Yeah, Yeah, any kind of where you might have opportunities.
[laughter].
Well, we really haven't had neither of those of that wholesale funding given the strong deposit growth that we've enjoyed and we've been able to.
Handled the PPP loads and and still get to [noise].
[music].
Hey, good liquidity.
You know in the balance sheet. So we just we certainly have access to a lot of wholesale funding.
But oh, we just haven't had a need to access the.
Okay, Alright fair enough that's it for me.
This concludes our question and answer session I would like to turn the conference back over to Doug Williams for any closing remarks.
Thank you Andrew and thank you all for your questions and for dialing in this morning.
If I could summarize I'd, just like to say that Atlanta capital again produce a us produced solid core operating results with strong revenue growth the disciplined expense control.
Despite the effects of 150 basis point decline at the federal funds rate and self loan demand during the quarter.
We entered a pandemic with a fortress balance sheet.
What's fundamentally sound credit quality robust capital plentiful liquidity and we strengthened that considerably over the last two quarters now with substantial additions to the allowance for credit losses.
We have confidence in our credit culture, we're encouraged by our clients performance during the pandemic.
But we're well prepared for the uncertainties ahead.
We look forward to talking to you again in the third quarter. After the third quarter and if you have any questions. A force we're certainly receptive to those over the next couple of days here.
I look forward to talking with you thanks for dialing in today Goodbye.
Conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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[noise] Oh.
[music].
Oh.