Q3 2020 Home BancShares Inc Earnings Call
Good afternoon. And thank you. Have a great quarter to report for us today. That is it goes for Centennial Bank as we navigate through 2020. The water may have been a little choppy along with a hurricane 440 while our company continues to produce very solid results. And in some cases will have the best results ever complements to our experience board of directors are outstanding Centennial Bank at home Bank management style. Our chairman has been known to say the word experience in twenty-twenty has been exactly that the past six years for this company has proven time and time again that working together. We can accomplish anything no matter how high the water gets.
And asked our quarterly results this morning.
And they represent that home bancshares of weather and well and all areas and that's quite impressive.
We have used the P letter a lot over this past year powerful profitable PPP and I have a strong feeling that you're going to hear a little more peace this afternoon from our chairman off others will report details of the quarter and year. It would be clear. Our company is focused on profitability asset-quality. Margin while maintaining the same sound company we are let me just share a few things EPS 42 cents.
Total revenue hundred and Seventy-Six million dollars. Those are home bancshares switching over to Centennial Bank. I return on assets adjusted is over 2% here today are non-gaap efficiency ratio, 37% year-to-date 336 percent coverage of our ACL to non-performing loans.
Double-digit increase in our non-interest income mortgage leading the way operating expense the same as last year not included are unfunded commitment charge. That was Thursday.
Always the one I like to hear the total revenue $533 a year today.
In pretty darn Goods first nine months Kevin's going to give us an update since our Fireside Chats that Donald organize them throughout this past quarter on the loans with Chris and John will join in with the specialty groups of their areas. I would like to share that our group of lenders are doing a great job in managing their portfolios. They need constant communication with our borrowers and customers this company has done forever. We will call it as we see it. Go back to the word experience some customer assistance will work with them while protecting the bank we have the experience in difficult times if we worked out several challenged institutions over the 20-plus years.
Our team is ready to assist in any needs or allowance for credit losses is 2.29% When you add it back RPP loans and our allowance for credit losses to non-performing coverage 336% while we may have some losses our teams feels very good about these numbers and the balance sheet of our very healthy company Ron and Steve's know you have a little discussion on the margin. Is it still remains stock Focus for the company just for an example Johnny calls me and he does a lot in the morning. I took a good morning Johnny. He says, what's the margin I say, good morning Johnny. It's less help top-of-the-line focused. It is Ryan and Stephen will also give us a little color on the deposit or liquidity situation and the strength Capital that the company has
For certain we will continue to manage a safe and sound company managing all areas income and expenses be in touch with our customers and provide the best returns to our shareholders, ma'am. Thank you Tracy. Those are impressive numbers now Brian Davis has some detail on how COVID-19 has impacted our margin Brian.
Thank you Donna. They I'd like to give you some color as to how the uncertain times related to COVID-19 has negatively impacted the margin the first the COVID-19 uncertainty and the resulting governmental response is created a tremendous amount of excess liquidity in the market.
As a result of excess liquidity, we had $713 million of additional interest-bearing cash and Q3 compared to normal times. This excess liquidity is 12,000 basis points to load up to the margin.
second
As of September 30th 2020 we had $848 PP loans.
These loans are at 1% plus the accretion of the origination fee while these lines are available assistance to our customers and carry no credit risk to our company wage up to the March the PPP of loans for six basis points diluted to the margin.
As you can see from these two items in certainty of COVID-19 pandemic just caused a 26 basis-point decline in our net interest. Margin. This would perform a i r q 32020 margin at 4.18% compared to 4.32% for Q3 last year for fourteen basis point decline odd considering there was an 8:00 basis-point dropped related to the three million decline in interest income events from Q3 2019 E320. I think the company is doing an outstanding job of managing the margin.
I will come look I'll conclude with a few remarks on Capitol our goal at home bancshares supposed to be extremely well capitalized. I'm pleased to report the following strong capital information.
10.4% which is 108% above the well-capitalized Benchmark a 5%
Tier 1 Capital was 13.2% which is 65% above the well-capitalized Benchmark of 8%
A total risk-based Capital was 16.9% which is 69% above the well-capitalized Benchmark of 10% with that said I'm going to call back over to Donna.
Thank you Brian. When you take out all the noise, it is nice to see that our margin is holding pretty steady. And that's a good report on Capital now for a highly-anticipated update to our portfolio. Is Devin Hester.
Thanks.
Well, we're finally three-quarters of the way through 2020. What a long and crazy year. It's been when we talked 90 days ago. I mentioned that both PPP and loan deferments would be entering a difference in the third quarter that in fact did occur PPP forgiveness has begun albeit slowly. We have submitted about 2% of our number of loans or about 6% of our dollar balance due to the anticipated submission relief on smaller loans. We began with the larger loans in the portfolio. Once all parties are ready to submit using the 3508 S6 and it was released by the SBA last week. We will begin submission on smaller loans as well.
Regarding loan department as of September 30th. We have about three hundred thirty loans remaining on deferral totaling about 930 million dollars within that number off loans, totaling $347 billion dollars that are only deferring principal. So they are currently paying their interest. This leaves about $583 billion dollars in loans that are on full principal interest Department, which is about 5% alone for holding up geographically Arkansas regions make up 51% of the department balance followed by Florida at 39% off CFG short Alabama at 6% to 2% and 1% respectively as a percentage that they're respected portfolios the Community Bank Regions between five and 30% deferred while ccfg and Shore remote lower at 3% and 2% respectively.
Based on industry. The only concentration would be in Hospitality with about half of the Deferred balances at this time.
September 30th, April number is down by 70% from the June deferral number of 3.18 billion. This decrease is even better than was anticipated when we spoke 90 days ago. Lastly the current numbers as of October 13th show a further decline in the full principal and interest deferral balance of $64 since month in to a total of $519,000 or 4.4% of the loan portfolio.
As I mentioned previously about half of our deferred balances or 475 million dollars are in Hospitality about 30% of those balances are on principle deferment am comparing loans on deferment versus not on deferment average occupancy over the summer with similar but revpar was about 15% lower on average.
September which and all of our Florida markets would expect to begin the offseason shows a RAV4 decrease have only about 5% across the portfolio. This is a segment of our loan portfolio that I will continue to watch closely and provide additional color as it's warranted.
Asset quality is still very strong past due loans were at 63 basis points, which is below the last 12 months average of 69 basis points. Non-performing assets increased 8 basis points off the load all time. Low of 39 basis points 247 basis points, which is an increase of about $14 this consisted of too broadly syndicated see and I crept from the shared National Credit review totaling about six million dollars a six-million-dollar Covetous affected Cinema credit and in Arkansas manufacturing credit of about 2 million dollars any exposure we feel is embedded in these credits is reflected in the individual impairments segment of Cecil.
as we
Continue to evaluate the loan portfolio through the pandemic particularly the loan still on the farm. We are mindful of the regulatory relief provided under the cares act as it relates to credit modifications off. This relief allows us to flexibility to provide prudent loan modifications tailored to each borrower that benefit all parties given that we see this pandemic overall as more of a timing event than a per month. The man shift time is often the most important factor of these modifications. We are being creative and how we approach each situation. However, as we always do we will continue to apply appropriate credit classification and non-accrual standards in cases where the information indicates that the loan cannot be repaid under reasonable terms. In other words will continue to age it as we see it irrespective of the relief provided by The Regulators.
Mortgage continues to be a shining star for us with back-to-back record quarters in both loan closings and profitability Loan closings are up 56% year-over-year and September locks were higher than any month prior to 2020. Thanks to keep little and his group for their strong production and profitability. The remainder of twenty-twenty will largely consists of executing PPP forgiveness and developing prudent loan modifications with evaluations and New Opportunities and a post COVID-19 sprinkled in we like where we are from an asset quality perspective at this point in the package and believe it's 2021 will be a year to move forward that concludes my remarks and I'll turn it back over to you. Thank you. Kevin have an only 5% of the loan portfolio on. Deferral at this stage of the game is remarkable. Next. We have Chris Polson with our c c f g division Chris. Thank you, Donna.
During the quarter we progress through the initial stages of the cobit response and began to see how the market and our portfolio will address recovery over all the portfolio was down slightly at 72 million dollars for order with ending balances of just under one point seven billion. Specifically, we saw see and I balances followed by approximately 130 million as corporate borrowers who had previously drawn on facilities for liquidity purpose repaid some of those borrowings during the quarter bounce itself from a high of $515 to $386 million at the end of the quarter conversely. We saw cre balances Rise by $56 due to a combination of continued drawers and increase in production in moderated payoffs going forward. We'd expect these Trends to continue with the high balances declining and cre balances potentially continuing to expand
During the third quarter. We saw a loan production and demand increase we originated a hundred forty million in new loans, which was up about thirty million from Q2 as important. Our pipeline of New Opportunities continues to grow we're seeing bars adjust their business plans to a new post-cold reality and as a result bars are once again looking to move projects and opportunities forward as I mentioned last quarter the time lines on new loans have expanded and we continue to observe that loans generally take longer to complete and require a bit more work in structuring. However, we hope to see the benefits of this come through during Q4 and into next year.
As a reminder, we initially built our platform to be flexible in response.
At the change of the market conditions, we've always focused first on risk management with the philosophy that markets can pivot at any time and for any reason in responding to these changes requires prudent initial credit back to writing combined with agile approach to portfolio management and composition the benefits of product asset class and Regional diversity in our portfolio continue to allow us to manage risk and and save opportunities as they emerge while each individual Market is experiencing different current and long-term risks. We will continue to balance confidence with cautious as we build our portfolio now and our future. I'll turn the call back to you.
What's good to hear that your pop line continues to grow Chris and luckily you're underwriting standards have always been strong and that diligence pays off during Times Like These. So that's good to hear now will turn back on Marshall for an update on the Boating world.
Thank you, Donna and good afternoon for the Shore Premiere Marine financing. The third quarter was punctuated by significantly elevated retail loan closings exacerbating already depleted commercial dealer inventories you the numbers refunded $91 billion dollars in retail loans in the quarter compared to $93 million in the full first half of 2020 and 145 million and full year 2019 in the turbulent Frost current COVID-19 Barrett. The record retail production was necessary to absorb portfolio Contraption due to repayments three payments and shrinking commercial inventories. So the net result was the end the quarter about where we started nine hundred twenty million dollars involved.
Good news in the feverish buying frenzy as you would expect retail buyers have been less sensitive to financing rates that we've observed a steady expansion in our spreads over the wage or 5-year treasury, probably 369 3.69% spread in first quarter 4.25 in the second quarter or forty seven in the judging the third quarter and a respectable 473 spread for the month of September further good news is the asset quality of the Marine book origination Franco's group from 776 to 778 and a quarter and any COVID-19, resumed payments in July at the start of the quarter each month in the quarter. We've seen a steady improvement delinquencies from 74 basis points 67 basis points and all the way down to twenty four basis points in September non-performing loans similarly improved each month from 40 month.
It's 248 52-43 tips.
There's some evidence and are replaced by dealer inventories as European factories resume shipments to North America job opportunity is credit line utilization recovered to Industry Norms jumping from the current 30% up to the normal 62% is net growth close to eighty million dollars in the next six to nine months. So with that update I conclude my remarks Donna and return the conversation to you.
Thank you.
John and now Stephen Tipton will discuss liquidity and its effects to the net interest margin along with funding costs Stevens. Thank you Donna. I will give a color on deposit activity page efforts and Trends and a few additional details on the balance sheet today on the heels of tremendous deposit growth in Q2. We carried much of the liquidity Bill through the quarter which I'll discuss later in life. It's related to the net interest. Margin. We saw in. Deposit outflows 240 million in the third quarter particularly related to liquidity management and corporate deposit off along with a few seasonal items. We've touched on in the past such as tax payments school funding and general spent after the flourish of activity in Q2 account opening volume is back to a normal level.
Allowing our Bankers to focus on supporting our customers both in branch in person and virtually.
Presidents and their teams continue to analyze the deposit base for opportunities to improve granularity mix and costs as we operate in this near zero rate environment.
Switching to funding cost interest-bearing deposit average 54 basis points in Q3 down ten basis points on a linked quarter basis and we continue to see Improvement in, on a monthly basis.
As I mentioned last quarter, we have a nice opportunity for repricing in our time deposit portfolio. We have $595 million dollars maturing in the fourth quarter of 2028 at an average rate of 1.56% And another two hundred million in January that is over 1 and half percent.
Switching to loans. We saw total production of 550 million dollars in Q3 with approximately four hundred and ten million coming from the Community Bank in short Premier footprints.
Pay on volume at 711 million was in line with prior quarters and it's highlighted by a larger contribution from a Florida and short Premier regions as John mentioned wage in Prior quarters. And Brian Davis is remarks. He discussed a great comparison on the Nim to more normal times. I would like to also touch on the linked quarter comparison in our operating highlights. We release this morning the net interest margin pressure in Q3 was primarily related to continued excess liquidity lack of event income and the impact from premium amortization and lowered reinvestment rates any Investment Portfolio.
With a few additional small items as reported. We have reconciled fourteen of the nineteen basis points decline on a linked quarter comparison.
On a core basis and excluding event income the loan yield declined 8 basis points while the total deposit costs declined 7 basis points.
Tracy mentioned monitoring and managing the net interest margin at home is a daily conversation amongst our team discipline around loan pricing Capital allocation and a constant review on funding has and will continue to be our focus. And with that. I'll turn it back over to you Donna. Thank you Stephen. Well now let's turn the mic over to check on Allison who will share among other things. I think a new metric that he began tracking and we hope to hear more information about that mister chairman.
Thanks.
Talk more about that in a little bit crazy kind of broke broke broke a little bit. They're talking about the multiple pages, but thanks for joining us and and thank you for your continued support as you've heard from our team. I really don't have a lot to say today. You know, we're in the Middle East pandemic. We've been concerned about certain ethics classes and their performance month free some see somebody to be the it's not an asset class that that may be the most uncertain but in spite of all that the company produced another record quarter,
You know once you adjust for for Cecil on earn $0.47 this quarter and earned $0.47 last quarter, I mean you think about the existence of earnings of this Corporation. If you go back a year, it was 44 and then the next quarter was 40, excuse me. Go back to yours 43 and then the next quarter's 44,000. Last quarter was 47 SEC. So in this quarter was 47x Cecil, these are two of the best back-to-back quarters and our companies twenty one year history month and I said in the press release I'm tracking a new metric.
I recognize it's not Gap don't be flustered by the account. It's done or the attorneys but it's almost the reverse of the efficiency ratio in some respects. I am calling to 5 in our and that's where Tracy got old piece he gets. I didn't know if he spits it out and sometimes I think he stuttered but it and that stands for pre-tax month free provision profit percentage in that kind of came from just looking at the looking at the numbers in our chart and I thought I wonder how much money were actually bringing a shoebox one of our directors coined at the shoe box and
It's the money you put in the shoebox. And all you have to do is pay taxes and make long loss allocation. If that's the case. So to make it simple fact is that total revenue divided into three facts pre-provision income and this quarter to give you an example this quarter. The ppnr was a record as you've heard a hundred fifty point four million and the net total revenue for the third quarter was another record at 176.1 you simply / 104.
By the 176 and that came out to 59.8% and I think last quarter is $1,513 in about right? So we're running pretty consistent what that means is at home branch bancshares is bringing down almost 60% of its net total revenue to the shoe box and all we have to do with that is to pay taxes. I challenge you a challenge you to run that number on other corporations. I think it it gives you it tells you the importance the ratio gives a strong emphasis to the margin and non-interest income plus it shows the earnings power of a corporation and you can see the earnings power that has given on bancshares.
Bringing down 59.28% of your total net revenue. I think it's pretty amazed. There's some other great numbers for the quarter and we'll touch upon a few of those ex Cecil the company. 79.661 million dollars almost $80. And EPS is I said was forty-seven cents.
Long Reserve Strong Reserve a 2.29 we built it a little bit this quarter. We had a foreign language but fourteen million in charged off ten built about a 10 Mi will probably do the same thing or unless we see something out there. I think there's becoming a little more transparency in the asset-quality fat return on tangible common Equity of 18.29 and return on asset adjusted the one that we're building new branch in Marathon, Florida. I don't know if we ever raised that building down are we taking down our facility yet? We haven't paid it down yet and we did not purchase any stock.
You've heard the numbers I was asked someone how do y'all keep doing it? How do you how do you do it quarter after quarter after quarter? How do you keep producing those results and y'all have never heard me say this before now you're checking around here. There is no substitute for experience and I just want to give you an example of our bank board Centennial Bank board at h b i Bank board of directors have 370 four years of director experience or operating experience. I mean, that's a pretty that's a pretty good number. They keep them out of the debts and I think them very much for the contribution that they they give to this Corporation in addition to that. They don't 13911939 shares or 8.42% of the total outstanding stock. We have one director we can get his numbers in there. So it's a little higher than that and that doesn't include our Affiliates that doesn't include dead.
Include our other like cabinet and Little Rock and those those branches. So I think it would be well over 16 million shares of stock and almost 10% of the month. The company is owned by by our directors and you can see their interest in this company. So they keep us out of attention lots of instances.
I want to talk again about experience about our president group. Our president group has over a hundred and fifty years of experience in the banking space.
That's pretty impressive. And then you take Donna Steven Tracy myself, Kevin and Brian Davis which are the executive crew in Conway and that adds up to a hundred and two years of experience. When you combine those together that 626 years of total banking experience and I think that's a pretty amazing number. So that's how we keep doing it with that team and great team of people and other supporting and helping that team but it's it's pretty amazing. That's just kind of was a one-off. I called on Thursday to run this up for me. Look at this and look at that and when you think about putting these numbers together, that's I was I was actually taken back a little bit by the amount of experience, but I've always been a Believer, you know, you can get it out of a book, which that's fine. But there is no substitute for real life experience and doing it.
I think we had another good.
Looks like we're seeing a little more transparency. We had a little ticked up or non-performing a little bit this time basically movie theaters Kevin when that basically put it tied down as one Loan in Jonesboro. As a matter of fact, you may not a manufacturing credit that I think they died. I think that was probably over. So other than that off for a little soft. We're holding fat it. I looked at a red yesterday that inflation was up to 10 since September that it was up 6 a.m. On August and 4/10 in July. So it's time to be careful. I know the feds doing a great job and working hard and trying to keep rates down. I'm not sure they're going to keep the handle on that or the lid on it. I think I think we did you start doing these two and three right two or three percent loans in the marketplace today. I think you could pay the piper for that down the road. We're yep.
That we're we're holding our rights up. We're holding are working on the margin hard. Like you heard Steven report on the margin and Brown Report on it. I think we've done a good job. I'm pretty pleased with the operation of the company looks like twenty one is going to be a good year for everybody in the bank space. I've seen the reports of the banks that have reported so far and they've done a good and Donna. I don't other than anybody else got even price you gave you don't have another pay or two that I think cover them off. Yeah. Well says Tracy with that, I think we'll go to Q&A.
We will now begin the question-and-answer session to ask a question. You may press * then one on your telephone keypad. If you are using a speaker phone, please pick up your handset before pressing the keys to withdraw your question, please press * then two at this time. We will pause momentarily to assemble our roster.
Hi, Gary, before we go forward. I have one comment to make if I could.
Absolutely, sir. I made I made a Joe Biden while ago I said we put fourteen million in reserve and we charged off 10 volt not correctly put fourteen million reserved and charged off for and I just got it upside down and backwards like my friend jokes about our first question is from Brady gaily with KBW, please go ahead. Hey, thanks good afternoon guys should start with lemon grass. And if you look at it from x p p p loans have been down in that, you know 9 to 10% range and realized for the last couple quarters and Johnny. It sounds like you're being pretty pretty conservative here. I mean, should we continue to expect some some more loan shrinkage? I'm going forward.
Probably probably some I probably you know until it clears up. I'm kind of like Chris some of those projects that you could get done in four months now take six or eight months to get done and may not get done. So I think I think pretty well Kevin you got a comment on that looks like we're seeing we did what twenty-five million yesterday and Loan committee meeting but it it's probably a good time. It's probably there's nothing wrong with getting paid off ready. There's nothing wrong with getting your money back. So I'm really not until we get a vaccine and things turn around. I'm really pretty comfortable doing what we're doing Kevin. I would agree with that. I mean, I think there's going opportunities next year with repositioning of assets when when you start seeing things shake out. We're not quite there yet because people are still in deferment in a lot of cases. So I think we're just south
And this odd space where you you're still in the pandemic and you hadn't come out and there's not a lot of great opportunities and we're focusing on margin and trying to be profitable so long, you know, we we we we've been extremely conservative over the last three or four years as you know, and and that certainly has paid off for a second quality. We we've just really we haven't lost a penny yet. We probably will as I've said in the past but as so far this pandemic with the two million manufacturing Loan in in Northeast, Arkansas, I didn't have anything to do with the pandemic. It was one that just they just blew up and but outside of that month.
We we are movie theaters, you know, probably going to take a loss on our movie theaters at some point in time in the future, but I have to say that what we've done in the past is paying dividends for us in the future and you know, we got nearly two hundred forty fifty million dollars worth of reserves and and you can see what what we're generating on the income side. So it's usually not a time to be really aggressive in the market and I'm seeing a lot of twos and threes and I'm also looking at the other side of the balance sheet where I see all it's possible inflation coming down the line, you know, as well as I do. What is the Fed do they working hard to try to liquefy the market? I'm not criticizing the FED. I think they're doing the right thing, but I'm at some point in time. We got to pay the piper right? And when when you got that what you see Lumber up average cost of a single family homes up $17,000 this year. I mean, that's that's the only choice.
It's totaled at some point in time. And when it does the feds going to be forced to raise rates and homes not going to be caught up in that.
Yeah, that makes sense. So you mentioned in the bars. You know, I know if you kind of look through the noise, it looks it looks like kind of the core core margin was down only five basis points on the link quarter there. Do you think going forward you're going to be able to to hold the core margin or do you think we should expect to see some modest shrinkage in the core margin going forward?
A great day. This is Steven. Yeah, I think the the last comments I had about what we were able to do in terms of deposit costs related to to loan you money in those, you know matching fairly. Well, you know, we do have still a pretty good opportunity to push on deposit rates both via the you know, the the CDs that are maturing and then we've you know, we still got over a billion dollars that's over fifty basis points on the checking and savings side that it was either on contract or or that we're working through on a negotiated basis. So there's there's still opportunity there to bring some of that down. I think the, you know to some degree the wild card will be the the impact from the Investment Portfolio and they'll kind of where reinvestment rates and and and those clothes come in over the next, you know, six months or a year. If we continue in this rate environment that we're in you know, we're the Investment Portfolio. Yep.
Is is is the problem we're writing it about 150 then so we put it on the books at 1:50 Tracy every time he meets with his presidents. He talks about rates anything right below our average you know right now is 514 x p p p so anything we right below 514 is diluted. So I mean he continues to preach that to our rep and I Roots doing a good job on that that the investment side Investment Portfolio is is the struggle that that that is the struggle and there's not a lot that we can do with that. It just is what it is still have to just weather through it and we were sitting on all that cash that made $100 billion dollars. We we put a little of it to work how much it would you Brian how much that we put to work out?
Well, we did increase our Investment Portfolio about a hundred million dollars from the quarter. What we've really did is we've invested more in the municipals. We increase our Municipal balances by about two hundred million and what you'll see when the investment numbers come out in the 10-q is that are government-sponsored Enterprises was down about thirty million and thousand Residential Mortgage box was down about thirty million and our Thea Moe's was down around about 30 million. And so the two hundred million dollar increase was put in on Municipal sewage as Mister Allison said we got about a 1.5 yield which it sounds pretty good today because we will be reinvesting in that probably in Q4. It's probably more like 1% off becomes part of the struggle on the margin.
Okay.
Thank you Brian. We we bought a lot of banks are raising money right now and and we bought a few of those pieces of paper. I don't know what we got twenty million twenty million. We make we made by some more that we're buying banks that we know that we're familiar with but I as as we spend a lot of plants Banks raise money, we have not done that we we don't need you. Look at our Capital ratios. We don't need that. So Tracy any comment, I think y'all covered it pretty well the you know, the loans are you know, if you go back over the last 3 months if you look at a month to month, it's been holding really good little bit of down tick but deposit cost is also got some opportunity to go. So it's just time will tell it's it's it's hard battle to wage to work, but we feel confident. We we're going to try to maintain it.
All right, and the last week for me what you got by and leading in the polls you talking about increase in the corporate tax rate to 28% from 21%
You know if that happens any idea of what the tax rate impact would be for home.
Brian I'll take that what you would want to do is take we'll take the full 7% off. It would really increase it by 7% We would actually probably have a interesting twist may remember when we had the Donald Trump tax cut. We had a big right off of DTA office would probably give recoup about half of that DTA right off cuz we'd end up writing up our dtas but for us it would be most of that 7% increase in the tax rate wage, but hopefully doesn't happen. Thanks. Thanks for the color guys. That's not going to happen very, thank you.
the next question is from that only with Stephens please go ahead how are you all right man hey I want a circle back on the credit discussion and I'm curious about the overall balances for special mention loans and classify loans as of 9:30 just trying to see if there's any negative migration during the quarter month
hey Matt this is Kevin yeah of course grade movement you know on the second deferrals you're going to expect some of that it's definitely case-by-case it kind of depends on money some things like cash reserves the bar over the operating projections that we see going forward how we see them handling the deferred-interest and so if you could look at you know the five hundred or so million that we've that we still got in a second deferral we are special mention went up about 150 and the third quarter standard up about fifty so you know if you think of that compared to the $500 plus in second deferment principal you know principal and interest off yeah it's about a 40% migration that's probably Fair we got a lot of folks that that that we know are going to come out at the end of the second one and go back on payments and so yep
Those kind of folks wouldn't wouldn't necessarily my great but some that we think, you know may need some more help after this second 90 days. Those are going to be the ones that you know that migrated down further to to special mention or substandard at this point. Got it. That's that's helpful. And then I guess the thinking about the reserve build from here. I'm almost at 2:30 once a week flew was some of the PPP stuff. I'm I'm curious if if you think we've we've Peak from here and if not how close we are to peaking and then I guess the other side of that is on charge off. We haven't seen each charge-offs yet. I'm curious what you think. The timing of charge-offs would be for I guess for home banking for the industry.
Well, we'll take them when we see it. You know when we see a charge off, we're not we're not building a stack of charge also here that we're going to hit at some point in time when we see them will take you know, the the matter of fact facility in Jonesboro is probably a charge of you know, you think about your movie theater guy who's got real estate there and nothing's happening in that business. I mean, he's been in the business for 50 years. I suspect long-term. He'll make it but short-term. He probably won't I think we not do not perform you not think so. I mean you could say we could we could probably take that next four or maybe or not take it if he going to make it. I can't answer that but prudent we may take that so I'm expecting that's all I see at this point in time. There may be something else that sticks his head up, but that's about the extent of it and that's not a tone. No,
So I you know, there's no buildup. There's no there's no pocket here. You know, we we're pretty damn transparent probably the most Bank in the office and when we see it, we call it we call it. So I don't I mean our hotels are going to be fine. Even our airport hotels going to be five. How long is it going to be before? They're fine. I can't answer that. I don't know how long it will be but a year, I mean if in fact if if everybody got what the president got the other day when he got COVID-19 you'd think the issue that I think we'd all be in good shape, but we get a vaccine I think things would turn around people start traveling again. So do you write off a hotel? It's running 20% in a struggling for cash flow that she deferred that, you know at some point in time will come back or do you write off 7% of it if you want to when you're at 57% loan to
Loan-to-value and you know you can get fifty cents for it. I mean from the vultures everywhere. So the good news is that that as I as we were selective on her credit issues we put them on as we built this company one brick at a time and we turn around and look at the billing and see if there's any cracks in the brick wall. There's not any cracks in the brick wall. It's been a real proud that you built a strong wall if you got a replace a brick here and there you replace it. So there there is that when we see it will call it.
And may I have the encouraging thing we're seeing on these deferrals is that the majority of the cases so far that we're looking at that are coming through the to the nth second and and maybe need a you know, something going forward longer-term that we want to get in under the cares act the vast majority of those are are paying their interest up Thursday before we go into the longer-term modification and if they're not paying them completely up-to-date they're paying it over a very short time going forward. And so that that's very encouraging to make sure that we have somebody that's got the ability and we're we're taking that and looking at projections for the next year or two years, you know trying to make sure that that they can make it through Thursday with the reserves. They have left and for the vast majority of those so far. We're seeing that work out for us and and we're ready to move forward on a log.
On that that loan because we got real estate attacks.
Return modification if it's needed so that that's the encouraging thing to me. We have one that was on full deferral and he's coming back on interest and principal and generate back open is operations are back opens about a seventy million dollar credit and he's off and running. So that happens that the turnaround was pretty good. We we deferred him. He got got on his feet got his businesses back open again and you know that the worst thing could happen not talking politics, but the worst thing could happen is a complete shutdown again, that would be nice cuz some people talking about shutting it down again, and that would not be good. That's not be good for any of us and that one John he's talking about has happened since quarter in so that's you know, that's that's an improvement then that have yeah that happened since quarter in so that's good news. Got it. Okay. Thank you guys very much. Thank you.
The next question is from Steven Scout in with Piper Sandler, please go ahead.
Afternoon, everybody. How y'all doing? Great. How are you Steven doing? Well, how are things in Arkansas? I'm curious. I see a lot of negative headlines around COVID-19 and wondering how the state is from staying open perspective and how businesses are doing their overall.
Well, we're open, you know the states open and and COVID-19 have been moving up and down and up and down, but we're open at so far so good at at home bancshares had 30 cases for so Tracy's that right all over company-wide out of two thousand people.
So a little more that forty so but every everybody's done well with anybody win lost anybody.
I mean Pulaski is pretty high Faulkner is where we are is kind of in the middle.
But it's it's not too bad. We're being careful. Everybody's being careful. We're wearing masks and we're wearing gloves and we're social distancing and we're doing those things we need to do for service or sales in our other people. Yep and most most businesses small businesses restaurants all that stuff kind of still open where you are today, that's for rent. I was dissing with a customer last night that has a lot of lot of lot of different businesses across the state and actually had some in Florida and it's the same thing that Kevin just mentioned naturally if you're in a month, this is Hospitality in urinary that it is not not the travel coming through its not as good as it should be but the other pieces of this puzzle are making things making the ends may just like the customer. And Kevin just mentioned a while ago. I mean gentleman has a lot of liquidity when they shut down they just shut down and actually wanted to pay a lot more back on his loan. That was you know dead.
Being safe in case they do shut down again to where it would have the liquidity and that's what people are a little more cautious on their liquidity side this time instead of jumping in and prepaying and back to Kevin's office on the call at like it is and Johnnies mentioned it to I mean when you look at the deferrals that we have I took the opportunity to call a significant amount of our lenders and customers. May I call over ten million dollars in debt and some of them are just do it doing just fine. It was it's a lot of precautionary and some of that deferments that you see out there in some businesses. Now there is definitely odd you that need it to make make this time, but all-in-all you you you continue to feel much better out there. I certainly do, you know when you're talking to our lenders and seeing our customer base and what's going on?
Hey.
It's great. Don't forget. Don't forget. We're going to say it another stimulus coming for for the American public, you know be guided or front but somebody's going to bring it and it's going to be cut off before the end of the year. So it got more money coming for these these businesses and and Arkansas State open. We paying the price for it a little bit with with the cases wage have anybody if you're not open you a lot of small businesses. I can't believe they can't get together in Washington DC and get the money out to these people cuz a lot of these small businesses are not going to make it if they don't wage and if they do it right in regard to the ones that that really needed particularly hotels restaurants if they if they do it, right? Yep. Yep. I agree. I am curious what you guys are thinking on a capital front here today obviously climbing nicely here this quarter, you know, thinking about your your pre-tax prevision Roa or your new P 5 a.m.
Johnny it seems like capitals going to
The build so how do you think about potential share BuyBacks or you should usage is the capital here in the medium-term, you know, we had a we have a 10:10, a moment and and that was the topic of discussion this morning on the ten ten call and we've looked at our Capital ratios, and they're powerful if you looked at them, I mean, they're they're awesome Capital ratios. We have not, you know, the choice is you want to take care of your shareholder, right? What's in the best interests of the chef? We need to go buy two or three hundred million dollars worth of stock that we need to do. We need not buy stock. We need to increase our dividend if we do it in today. If we're not doing them an ideal. It made sense would probably do that. If if we can't do an m&a deal then maybe we maybe we buy back to stock but that describes
That discussion has gone on all morning this morning around here. So I don't want to do something that still fear the day. I heard press prompts. I banks shouldn't be buying back their stock. We shut hours down and we have not bought a share of stock since then. I don't believe at all man made some carry-over from that but we have not bought it and I figured it might be some I thought it could get bad enough that Banks needed a program. It's not going to get that bad but made for somebody but not for homebanc are so I thought there might be some kind of program that came out and if you had who you were buying back your stock you couldn't participate so that's really been the reason we're at some Bank many banks are starting to buy the stock right now the bigger Banks I think are prohibited from that. We need to do something for our shareholder. We have not raised the dividend in a long time and we did that just to age.
And just the white and say what the repercussions of this whole pandemic we're going to be and it has not been it has not been as bad as as I thought it could be as strong and so different it's different situation than eight nine and ten for too many unknowns in the unknowns now when it's when the vaccine coming out and getting their people back to work. So I feel sick enough now that it's I feel comfortable enough now to go in the market and buy stock or I feel comfortable enough to to look at discuss with our board raising dividends wage. I feel comfortable with enough Capital to maybe a combination of those and so we're that discussions going on and we're not going to sit here and end up with 50% or 25% chapter was pretty ridiculous. So, I mean, we're I think that what was the capital ratio was 16% or we really have lots of capital and as you know an only dog
Lots of Captain we got close to two hundred.
$50 and forty million dollars and Reserve in the company just had a record ppnr so, you know, the we're kicking out is I said last quarter over a hundred million dollars, of course that we could use for losses. If we needed to, you know, when an annualized basis I said that's four hundred million dollars plus $240 gives us $640. And if you remember numbers this company could still could lose 1 billion dollar straight out and still hit all the regulatory Capital requirement. So it is a topic discussion understand why you ask it and we're in the office executive committee's in the middle of discussing that
Yep. Yep. No, that's good. Okay, maybe last question for me. You know you talk about Reserve levels there. I mean, it seems like you got more than enough to me honestly here today, but I'm wondering you know the effects to Cecil one. Where do you think once we get maybe the the excess to reserve from pandemic and deferred loans? Where do you think in a Cecil environment that Lomas deserve could normalize over time and and do you think Cecil was a benefit for you guys in the sense that it may just build reserves more than would have otherwise or is it more punitive? Cuz there's some maybe double double reserving with diesel place and Emma Curr kind of how you think about the effects of people longer-term even if you have to maybe extend someone's
Well, I don't know. I don't know which leaves was right or wrong. I have I have no idea did it make us add more reserves. Not sure but you know that's always been a big Reserve Builder anyway, and even when people are running down to 40 basis points and thirty basis points and fifty basis points on loan loss reserves, we always kept trying to stay up around 1 a.m. I've always been a believer in a 2% Reserve Styles about everything and I still believe that's the case. So from a reserve Bill aspect. Nobody gives we we announced record earnings today in stock went down so nobody gives a damn about about earnings. So why not build reserves? I mean what difference does it make I mean, I we visited with something many of our analysts and said we should we should we going to have a record quarter blowing it out about $0.47. I mean we didn't have to take a put another $14 Reserve in my opinion, but we we didn't we didn't do that. We went ahead and birth.
And we'll probably do it again next quarter and you know, depending on the jury's Adams facial, so I'm not expecting strong pressure from the account because who knows if it's just the right deal of the wrong deal. So it may be right. It may be wrong. But you know, we manage through eight nine and ten and eleven without facial. We did find we discontinued the bill reserves when we needed it and I like the reserves far as I'm concerned. We got all the reserve we ever need and it may every month. So I just like to leave it alone. We've already we've already taken the money out of out of one side of the balance sheet put it in the other side. So I don't know I just soon leave it where it is. I don't have any rate. There's no reason to move it. We've already done it just leave it there. We don't need it yet. I saw word JPMorgan took $500 out of the reserve and put into income.
They got fined $600 million. I guess they need five hundred million to Great Bank. Jamie. Dimon's a great guy. Don't get me wrong. I just you can't use that like a kitty took a money Kitty. It is what it is. We've already put the we've already taken the the bite. We've already done it. Let's just leave it alone. Just leave it there and and we're going to try to do that at home by Chef. I don't want to I don't want to come in the first quarter and the counties make me reverse a hundred million dollars or $150 and put in the income. That's really ridiculous. So am I don't think we'll be playing that game. It's too way too early for banks to be playing yo-yo with the loan loss reserves. We're not going to do that.
Got an that makes the next question is from Michael with Raymond James, please go ahead.
Hey guys. Good afternoon. Hope you're well, Michael.
Don't forget we got Donna here. You said guys?
Oh, I'm sorry everyone people. Okay. So so I appreciate this this new metric that you've created and certainly it's nice to be an issue that's germane to you. But but it does seem we're we're kind of at or or very near a near-term peak just giving some of the headwinds that we have on the right front, you know, some of the mortgage that is probably not going to record at these levels. You know, how should we think about this new metric that you've kind of created is as we move forward and what levers do you have, you know, probably more on the expense side than anything to offset wage at the revenue pressures, you know, a lot of other banks have talked about did you do the digitization trends Branch closures headcount reduction et cetera. Just want to see what's in the cards for you guys. Thanks, but let me say that the the expense side is is Donna calls that she says that's 08 online stuff. We've already been through the expense reduction side and and we as we went over
10 billion it's extremely expensive and we've swallowed those expenses thus far and still running about 40% 40% efficiency ratio so long, I think I think that racial I would just looking at it. Just thinking about where it came from is I'm looking at at the bar versus the total revenue net and I said, look at that. That's almost 60% that's coming to the bottom line basically before taxes and before long lost allocation month and this plan with that and and mentally I thought that is a really strong number which shows the earnings power of your corporation and and shows the the the income that this company potentially can make so I I just played with it and I ran it back for a year. And and I I said Tracy come here. I got something new on a chef.
so anybody
So what have you done and it isn't it? It really shows it shows your margin it really it shows your margin it it picks out your interest expense basically and may go further with that and take total revenue not just net revenue and take total revenue. So it's just new for us and it was just a number that really jumped out at me and I just wanted to share it because I'd like to I'd like to see that number of used by I'd like to compare competitors and see who can run at close to 60%
That answer your question. Yeah. I was just just trying to figure out cuz it does seem like you and others on that metric would would obviously be facing some headwinds and look like it would go down next year particularly is the the accretion runs off and in the mortgage system repeat and then you just have kind of core margin pressure as you as you kind of talked about. Um, so yeah, that's a good point. Then I'll leave that. You know, how long can mortgage stay as strong as it is, but then you're going to have another PPP program, you know, and if we get a vaccine if we get a vaccine we're going to see the market take off again and we're going to say I think we'll see business kick back up. So I mean that's we get a vaccine and I think you'll see that pretty much resolved it put it in place behind us. So, you know, there's always something with the the loan loans were down a little bit this year because we were so damn conservative and that's okay and then you got a little dog
And then you got you got mortgage that kicks in you know, and then you had our small business Investment Group and our investments that kicked in through me in this quarter and that'll be kick in next year. So home has put itself in a position with enough handles to pull on that that we think that we can continue to produce these kind of numbers off in the future price. That's exactly what I was going to add to it. I mean you use the mortgages as an example. Yes. It's had a phenomenal time. Our team is gearing itself up to where if it actually love the mortgage groups or retired. They've been working so so many hours and in time along the right here, but it's just a matter of the teeth yesterday, you know, you you begin to say okay if it slows down we're getting a lot of opportunities to expand the markets that we're in so we have you can grow by birth.
Hiring additional lenders and the process as we have developed out the back room and continue to grow it. So even though some of that may trickle down some of the opportunities are still there and that's what this company has done forever. I go back to you know, it's really about the strength of capital and where you where you stand when you when you put all this money in the shoeboxes Johnny just said it's off of my what what you have and when you can do that and Donna started this, you know, efficiency program several years ago on the branch part, and we're always looking at those type of opportunities and there's no doubt that the there are some expenses that is incurred over the past nine months with the pandemic or these going to be on going forward probably going to be some of that for a little while but the phone numbers are are several hundred thousand dollars a quarter that we had, you know, just for the safety of the of our staff coming to the buildings that we we operate but there's always some opportunity. Yep.
You're running a 40% efficiency ratio. It's hard to.
To knock some of that down, but the revenue side is is still there. I'm not as negative as you may have indicated there as far as the opportunities that we have come in for.
That's helpful. Maybe just one follow-up for me on credit, you know some of the larger banks that are recorded if we've talked about reducing a little bit more aggressively some of their their at risk exposure, you know truest for instance this morning, you know, discuss the uh, you disposing of some of the hotel properties. It sounds from your comments Johnny like you more willing to kind of work with your borrowers and see it through. Can you just walk through the decision making process there? Because you know, it does seem, you know, depending on the next round you spend most of it happens that there will be some, you know, some some greater lost contacts in some of these at-risk portfolio. So I guess why not try and get out in front of it. Thanks.
We're going to take care of our customers. We always have and we're not going to run from them. And we're not going to flush them will flush them if they need to be flushed but it is it is our responsibility to take care of our customers and they've taken care of us over the years and we're going to be there for them. So, I mean even even our guy that's movie theater guy that that that doesn't have any new movies just got a gorgeous facility. We got real estate in that deal. You know, he's going he going to come out of this still somebody going to come by that at some point done that movie theaters going to operate again it maybe eighteen months for Thursday, but we're we're going to stay with him. We're not closed on him. You know, he's the best one of the best operators in the country. He's done everything right? None of this is his fault. We need to be honorable people to him and stay with him and do the right thing those customers Kevin. Well, we're you know, we're going to look at pricing today. I mean, I'm not sure that if today is the best choice
To move them or not. There's there's a lot of money out there. I think they'll be more, you know in six months than there is today be more product six months than there is today. So we're we're going to look up pricing. But I'm I'm I'm with Johnny on on his comments. I think the best thing we put ourselves in the position is the underwriting that we've been doing for for several years and off all of the businesses that have been affected by the shutdown are in the position to be able to survive and come back again, and it's not where they're in. They were leveraged up Thursday and and and whatever loss of Revenue they're seeing or may not ever get back there just making that adjustment and and they're doing just fine. I mean it's there's you know, the the I'm just proud to be a bath today as I ever had because when you talk to your customer, you see what they're doing and what they're adjusting to make their livelihood and survival is what America's all about. They're not sitting back here. Just waiting on somebody to give birth.
They're getting after it.
We have one Motel year that that that is about a $70 credit who's struggling but he's got four point two million dollars in cash, you know and and and we could loan him money. So I mean we can loan him a couple of million dollars and he give close to seven million dollars and according to the forecast that we have, you know, that'll carry him through 2430 months. So that time we'll have a a vaccine and things will be better. I mean, that's the way we're looking at it. That's what you know, the the good news is, the good news is the people that criticized us for not growing loans fast, like other people did but not everybody wants to do I mean, they'll do a whole lot of people did 80% Hotel loans. We did 50% Hotel loan. So we set ourselves up to win long time ago. We set ourselves up the wind with this month.
exactly blown committee and I guess
You heard the six hundred years of experience and 370 years experience this directors and most of them have been with me forever. And and a lot of those people have been with me to the point if it's been involved in every loan that's been made in this Corporation. So I feel good about the bricks that we built as we're building the wall and homes in damn good shape. And if you know if we need to take a $50 charge off will take it. Someone said, what would you do if you had a hundred million dollars worth of hotels. It went bad. That's what we just charge it off. We got the money to do that. We got the capital to do that. So I work with your customer. I mean, that's what I met you Michael years ago down here in Florida, you know the times that was and it's pretty rewarding to meet the customers that were in some child and situations and the ones I wanted to work and get get out and do the right thing. They all did it with you you just structure and go from there on a side note, which I know you mentioned the staff's been with you how long how many years do what the staff?
Management staff I'm here about twenty years hundred two years two years old a hundred two years or so experience what I totally would he asked me how long I'd been with him Michael. I said, well, it's been eighteen years. He's off this that's the British like $47. He's got a job offer. I do asking about margin every morning though. I do do that. No, I I appreciate the the color and thank you to everyone including Thursday. I'm sorry.
The next question is from John Armstrong with RBC Capital markets, please go ahead. Hey. Thanks. Good afternoon. Hi John. Just a couple of quick ones here. I am Kevin the PPP forgiveness. You've talked about how it's started. But what do you expect for forgiveness and can kind of the Cadence and timing on that?
I think we're going to get a lot of it submitted this quarter. But I mean from what we're seeing coming back from SBA at this point. It's largely going to be a first quarter. I think from a from a cash coming back in standpoint. Okay? Okay. Got it. Good choice for Chris the you talked about the pipeline rebuilding or CFG just talk a little bit about the magnitude of that and the composition of that.
Yeah, happy to you got afternoon. Yeah, I think the pipeline that we see now is is similar to pipeline we've seen before what we're seeing is just takes longer to get a transaction done now so deal stay on the pipeline longer and they do tend not to go back and forth a little bit where traditionally what would happen is we talked about a deal with soft quote it we get to terms we get a term sheets. I'm usually on the writing and then we work towards close. I think what we're finding now is in the underwriting process going through that process. We we're tending to find more things that need to be addressed and um in that results in, you know, potentially the bar may come up more Equity or or restructuring the capital stack and that's really what we're seeing and the time it takes to do that and then restructure the deal, etc. Just takes a little bit longer. We think most of the deals still going to get done. But but we think that they just take a little bit longer. So I would say we're having a little bit more of a backlog where stuff stays on the pipeline a little longer. We're normally it might go, you know our our starts with screening and then soft.
Sheep and then deals approved ready for clothes. We probably have more deals in the in the underwriting rated for clothes than we usually would and they tend to take a look.
For bit longer, I think most of them will on through but but they're little bit hard to get done. And and I think that's that's okay. We could certainly be resolved that by just closing the deal but we think it's a lot better to to be safe and and to be a little bit cautious as we go through with these so if it's if it's a couple of months too late to get that done. That's okay and and most of these you know what we continue to see on the pipeline are you know, it's all still pretty COVID-19.
Probably get that done. Okay. Thanks. Thanks for that. And then just a back in the shoebox concept or you know how to get rid of some of your capital or Spencer me Capital. Have you guys seen anything on m&a? Is there anything floating around in terms of potential or is it still too early?
We've just been careful, you know, we we were engaged in in m&a somebody looked at acquiring us at one point in time. And we we just been before we moved is is the discussion ran to die and it continues to run around here and I'm sure it'll continue on is what's the best use of our Capital right now? My fears is that is difficult as it has been to get your arms around your asset quality when we knew we put it on the books properly off and then go back and evaluate it and we took deep Dives interesting classes and we even learned something John that I'd never learned before, you know, we walk now, I have airport hotels and Extended Stays and we call them water hotels and Interstate hotels and the way they function in a in a situation like this is all different. Yep.
It's been a it's been a learning process for all of us and and you never know. I think Homeland shows probably has the best handle on their ass quality of any company in the country and to do due diligence on the size of a company today. I'm not sure many CEOs have their arms around and wage is active groups have their arms around. I just bet they don't have their arms around her asset-quality the way home bancshares does so to go do a ten billion dollar or five billion dollar or 12s on a trade today would
the due diligence
Certainly be extended. It wouldn't be it wouldn't be a 90-day in an ounce of deal. You'd certainly want to ride through a quarter with somebody it would it'd be it'd be kind of like Chris was talking about the loans. They'd be extended. It would just extend out extend out and and if it were pumped they were public we probably want to ride them through a quarter. So I thought I'd say any emanated for home would be six months down the road. So as a result of that we're thinking about what we do for our shareholders such as dividend. May I go buy something small? We might find us something small out there and and go in the market we might step up and buy something, you know, just if you got a car garage, you don't ever drive it, you know, the battery is running down. Sometimes it's good to get it to start it up and run it a little bit and our team as you know was damn good at putting together up Banks and yep.
Right number of integrating them into our company. We had done one in a while cuz we've been focused on other things but it probably wouldn't wouldn't hurt to go out and find a four or five six hundred million dollar bank and and off and just to go through the exercise and kind of warm yourself back up and run your engine a little bit. All right. All right, well enough to buy a bigger shoe box at some point I think a few box. Yeah, big shoebox yet bigger pair of boots. So, all right. Thanks for everything. Appreciate it. Thank you. The next question is from Brian Martin with Janney Montgomery, please go ahead Thursday afternoon. Just a couple easy ones for me. Just Kevin back to the PPP for just 1 minute D is your expectation that it's still probably you know, eighty percent Plus on the Forgiveness side is you would be most that being in the first quarter. It sounds like that that 80% or above is greater. Is it even higher now or less lower now?
I don't think it's the lower than 80 it could be higher. Okay. All right. And then how about just on the on the deferrals? I think you guys called out about half them are off of hospitality hotels any other concentrations in the in the remaining 50% I mean just any any bigger pieces in there, not really it is it's nice outside of hotels. It's spread out across the across asset classes and and across our footprint. I can't really, you know, a little bit of healthcare a little bit of dead of you know, just real estate type deals that are not owner-occupied admit it hotel is the the big concentration. Gotcha. Okay, and then maybe just one last one on the on the on just the loans think last quarter you guys talked about the loans after floor and it sounds like with some pressure on the margin from the Investment Portfolio mean I guess. Can you remind us what what percent of the loans are at their floor today? I think yep.
Was you know about you guys Steven Gates the numbers last quarter, but just the percentage of loans that are after after for today. Sure Stephen. Hey Brian, functionally, all of Chris's off the ccfd portfolio is at its floor today and then we've got about a little over eight hundred million of the one point three billion dollars or so in the near term Community Bank in short portfolios that are at that are at its floor. Okay. I I kind of look at it really just from terms of what month. What is you know in the Community Bank footprint we're we're doing, you know, five year and less balloons what's maturing in the coming months and how we kind of compare that to walk, you know to what we're able to do on the on the deposit side, you know, I would say over the next six months or so. We've got a billion dollars. Maybe just shy of that in dog.
Touring loans that have come up repricing that are in the 490 range.
So when we think about where we're we're we're repricing we're we're originating today. I think I think our group prospects are good to be able to hold in that in that in that range. You okay. I think that just maybe last name the expenses. It sounded as though there's there's not a whole lot to do there that that seems like what you get pretty consistent with what you guys have said last couple of quarters. So that's my hearing that right on you can most of that in the last last time for you pretty well. That's right. Okay. All right. That's all from you guys. I appreciate it. Thank quarter. I appreciate it. Just finally wrapping up here. I guess I'm going to wrap up. You don't mind. We're going to continue doing what we're doing. We've done in the past and that's continuing to to produce top-tier results. I appreciate our shareholders. I see that our large shareholders are continuing to accumulate the Stars.
And I'm very appreciative about thanks for your support. A bank prices are at basically all-time lows many many banks are selling below tangible. Can I guess the markets giving us some credit? We're trading at about 1 six times tangible book. I think this too shall pass and I think SmartMoney will continue to accumulate Bank stock this this pandemic will pass too. So, I look forward to talking to you in the in 90 days with this same group of people and wage maybe instead of having the group instead of having a hundred and two years experience Mabel have a hundred and three Tracy will have six months experience in ninety days off Spike you
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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Thursday
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