Q3 2020 Civista Bancshares Inc Earnings Call
[music].
Good day and welcome to the Soviet style Bancshares Inc. third quarter 2020 earnings call Conference call.
Participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing Star then zero. After todays presentation, there will be an opportunity to ask questions to ask a question. You May Press Star then one on a touchtone phone to withdraw your question. Please press Star then two please note. This event is being recorded.
I would like now to turn the conference over to Denis Schafer. Please go ahead.
Good afternoon. This is Dennis Schaefer, President and CEO of so this the bankshares and I would like to thank you for joining us for our third quarter 2020 earnings call.
I'm joined today by Rich Duck Senior Vice President of the company in Chief operating Officer of the Bank Chuck purchase of senior Vice President of the company and Chief lending officer, or the bank and other members of our executive team.
Before we begin I would like to remind you that this conference call contains forward looking statements with respect to appeal to the future performance and financial condition. So this the bancshares inc. that involves risks and uncertainties various factors could cause actual results to be materially different from.
Any future results expressed or implied by such forward looking statements. These.
These factors are discussed in the company's FCC filings, which are available on the company's website.
The company disclaims any obligation to update any forward looking statements made during the call. Additionally management may refer to non-GAAP measures, which are intended to supplement but not substitute for the most directly comparable GAAP measures. The press release available on our website.
Contains the financial and other quantitative information to be discussed today as well as a reconciliation of the GAAP to non-GAAP measures.
We will we call this call and make it available on this the bankshares website at sea Ivy B. Dot com.
Again welcome to service the Bancshares' third quarter 2020 earnings call I would like to begin by discussing our results which were issued this morning at the conclusion of my remarks, we will take any questions that you may have.
This morning, we reported earnings for the third quarter 2020 of $7.7 million or 48 cents per diluted share and $22 million or $1.36 per diluted share for the nine months ending September Thirtyth 2020.
This represents an increase in net income from 2019 of $136000 for the quarter and a decrease of three and a half million dollars for the nine month period.
The COVID-19 pandemic has had several effects on our balance sheet and income statement. During 2020, our balance sheet has grown as a result of the paycheck protection program the program or P.P.P. The makeup of our income statement has shifted as well the largest change on our income state.
<unk> Mint is an increase in provision for loan losses due to the economic uncertainty created by Cobot Knight team stay at home orders and increased unemployment.
Without the increase in provision our net income would have exceeded 2019 levels for both periods.
Our strong capital position and continued ability to generate core earnings allowed our board of directors to once again approve our quarterly dividend of 11 cents per share earlier, this month, which represents a dividend payout ratio of 23%. In addition.
In addition, after meeting with customers and working through the second round of pandemic related loan modifications during the quarter, we began to gain some clarity of our customers financial positions and their ability to before moving forward. This clarity along with our strong capital position allowed us to.
To resume share repurchases during the quarter, we repurchased 107500 shares at an average price of $12.15 per share we view share repurchases as an integral part of our capital management strategy.
Our return on average assets was 1.08% for both the quarter and year to date, while our return on average equity was 9.01% for the quarter and 8.8% year to date.
Despite the lower interest rate environment net interest income for the quarter was $22 million, which was consistent with the linked quarter and $1.6 million greater than the prior year, our net interest margin did contract a 3.44%.
Compared to 3.61% for the linked quarter and 3.70% year to date.
While the $259 million of PPP loans provided positive net interest income in dollars. They make made up 12.7% of our average loans for the quarter and 7.8% year to date at an average yield that approximate 3% they.
They do have a negative impact on our margin.
Without the PPP loans, our margin would improve by 40 basis points to 3.84% for the quarter and by 23 basis points to 3.93% year to date.
During the quarter noninterest income was fairly consistent with that of our second quarter at 6.8 million and increased $1.4 million or 25% over the same quarter in the prior year. During the first nine months non interest income increased three.
$27 million or 22% over the prior year.
The low interest rate environment continues to drive the mortgage markets across our footprint and mortgage banking continued to be the largest driver of non interest income.
Third quarter gains on the sale of mortgage loans were $2.4 million or 6.7% greater than the linked quarter and $1.6 million or 196.1% greater than the fourth third quarter of the previous year. Similarly, the year to date gain on sale.
The mortgage loans was $5.5 million or 223.4% higher than the previous year.
During the quarter, we sold $84.1 million in residential mortgage loans at an average premium of 286 basis points compared to 91.5 million in the linked quarter and 36 million in the prior year year to date, we have sold 211.1 million.
In dollars in mortgages compared to $80.5 million in the previous year to date, our mortgage pipeline remains very strong.
Other significant drivers of non interest income were interchange fees and wealth management fees.
Fee income was down for the third quarter, but is 339% higher year to date.
Service charges have decreased compared to 2018 levels.
We did see some rebound in service charges compared to the linked quarter with an increase of $484000 or 52% 100.
$183000 of the increase was due to reinstating several customer service charges that.
That we suspended during the second quarter to provide relief to our deposit customers overdraft fees also increased $270000 compared to the linked quarter.
While non interest expense increased both during the quarter and the nine month period pear period compared to 2019, we did see a decrease of 2.1% for the linked quarter. The year over year increase was primarily related to compensation expense, which centered on.
Annual pay increases that go into effect April commissions attributable to the increased mortgage loan activity and overtime associated with commercial loan modifications increased mortgage activity and our participation in the FDA PPP program.
Our efficiency ratio was 60.7% compared to 61.7% for the linked quarter and 61.1% year to date.
Excluding PPP loans, our loan portfolio increased $16.4 million during the third quarter and $72.9 million year to date.
That equates to an annualized growth rate of 3.6% for the quarter and 5.7% year to date that growth came in every commercial category. Our loan pipelines remain strong and we have a $124.4 million in approved Undrawn concern.
Production loans at September Thirtyth.
In a normal year, we would probably be disappointed with our loan growth. However, considering the effects of the pandemic. We're pleased with the loan production across our footprint as the pandemic continues it is difficult to project, how the larger economy and more specifically our loan portfolio will grow in future.
Your quarters, However, we remain optimistic.
With respect to PPP, we originated just over 2300 loans for $259.1 million, resulting in deferred fees of $9.9 million.
He SPJ recently provided guidelines for abbreviated forgiveness of PPP loans with balances less than 50000 at September Thirtyth, We had 1368 loans totaling $26.3 million that should qualify for the Sps abbreviated forgiveness appliqu.
Asian.
To date, we have submitted 23 applications totaling $8.1 million for forgiveness and have received proceeds from the FDA paying off four of those loans. While this remains a more labor intensive effort than we had hoped we are confident in our approach and our AR and are proud.
So this is role in assisting our customers and communities as we continue to navigate this pandemic.
In regards to COVID-19 loan modifications as the cares Act was rolled out we took a very proactive approach to modifications offering 90 day modifications on over 800, mostly commercial loans totaling $431.3 million, which represented 20.
6.5% of our commercial loan portfolio at June Thirtyth.
Since that time, we and our customers have gained a better understanding of the impact of the pandemic on their business as a result, most have resumed making their contractual payments.
At September Thirtyth, we had 47 loans totaling $52.2 million or 2.9% of total loans remaining in deferred status. The largest concentration of these loans are $21.9 million in hotel $11 million in health care.
$3.3 million in restaurant loans.
We continue to experience low charge off rates and delinquencies remained very very low.
While we and our customers have a much better understanding of the impact of the pandemic that will.
That will have on our businesses than we did coming into the quarter as part of our credit process, we automatically downgraded each of the loans that requested concessions beyond the initial 90 day modifications.
This resulted in an increase in substandard loans of $4.7 million and special mentioned loans of $107.9 million during the quarter.
Given the uncertainties associated with the COVID-19, and its impact on the economy. We continue to review and refine the qualitative factors in our allowance for our lot loan loss model. As a result, we recorded $2.25 million provision expense for the quarter and 7.9.
1 million dollar provision expense for the year.
The ratio of our allowance for loan losses to loans increased to 1.11% from year end, which was 0.86% excuse.
Exclusive of the PPP loans this ratio would have been 1.27%.
Our allowance for loan losses to nonperforming loans also increased to 292.88% at the end of the first quarter from 161.95% at the end of 2019, while these reflect very strong credit metrics by historical standards given these.
The uncertain nature of our current economy, we will continue to monitor our portfolio and the economy, making further adjustments as our model dictates.
As a reminder, we did meet the guidelines for the delayed implementation of Cecil and will not be required to adopt it until 2023.
On the funding side, our deposits increased $390 million or 23.2% since the beginning of the year. While we have seen increases in every deposit category. The most significant increases came in our business checking accounts, where the proceeds for.
The PPP loans were deposited in.
In addition over a $108.9 million of our year to date deposit growth came in personal checking and savings accounts.
The increase in deposits allowed us to reduce our reliance on FHLB advances by $101.5 million or 44.8% since December 30 Onest.
In addition, we borrowed $183.7 million from the PPP liquidity facility to assist with funding the PPP loans originated during the second quarter. These borrowings puree low rate of 35 basis points and also provide for advantageous regular.
Regulatory capital treatment of the PPP loans.
In spite of the challenges of the current environment. We are pleased with another quarter fueled by solid core earnings or earnings throughout today's comments I hope I have conveyed how proud I am of the great team. We have here at service and the quality customers that have chosen to work with US we couldn't have one.
And without the other our people have accomplished much through the first three quarters of 2020. Despite the pandemic, we reported earnings per share for the third quarter of 2020 that exceeded earnings in the same period of 2019.
While the next several months, we'll continue to test the banking industry and the larger business World I am confident that said this the is well positioned with a solid balance sheet strong capital levels and a diverse revenue stream to meet the challenges that lie ahead. Thanks.
Thank you for your attention. This afternoon and now we will be happy to address any questions that you may have.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing the keys and if anytime. Your question has penetrated and you would like to withdraw. Your question. Please press Star then two at this time, we have pause momentarily to assemble.
Our roster.
Our first question comes from Terry Mcevoy from Stephens. Please go ahead.
Hi, good afternoon.
Terry.
First question I have is on the loan modification to 52 million dollar tree, which are down nicely are those loans still in round one or is there a segment that has moved into what I'll call around too.
The majority of Allstar majority.
$43 million are still around two and they're going to run out here.
Over.
Uh huh.
Yes.
Yes.
Yes.
Mostly interest.
And Terry most of the $259 million in round, one we're 90 day extension.
Great.
And then as a follow up question the the.
The three it even more or so net net interest margin. What are you what are your thoughts on the fourth quarter and heading into next year. Just as you know faced this low rate environment and potentially some pressure on your asset yields.
Harry This is rich and I think like we said last quarter most of the compression that when you were going to see over the next number of quarters happened during the second quarter.
Well continue that probably battle, some contraction, but in the way we look at it [noise] excuse me.
The margin for the second quarter was 361 and the margin for the third quarter was 344, but if we back out the impact of those PPP loans and to the yield that they have that would have increased the margin of the second quarter by 22 basis points.
And increased our margin in the third quarter by 40 basis points I don't put a lot of numbers engine, but and what that equates to is our kind of normalized yield for the second quarter was 383, our normalized yield for the third quarter was 384 actually expanded by a basis point.
Maybe kind of surprised with a little bit, but what we said it on the last call was that we expected basis points of compression and our loan guys have been doing a great job of just.
Fighting the Battle every day and keeping that keeping the rates where they are and then Terry as rich said I think we did bear the brunt of that in the second quarter remember the the rate reduction was in March you know weve, they're a little bit more and I think as you go forward that becomes that compression at least becomes a little bit narrower.
But we could still see a little bit as we move forward in the fourth quarter in the first quarter. You know it is very competitive on the lending side, we have why.
We have widened spreads and things like that but it's still competitive and and we are trying to protect margin, but we do need to get into we do want some growth too. So we're trying to balance both of those things.
That sounds great. Thanks for taking my questions.
You bet. Thanks.
Our next question comes from Michael Shivani from KBW. Please go ahead.
Hi, good afternoon I am.
Michael.
Oh lead off can you guys highlighted the markets showing strain so he can.
So he can you just discuss where you see opportunities for loan growth and how the pipelines are looking.
Well I can tell you Michael by the way I can.
I can hire pipeline going into the fourth quarter of this year as compared to the fourth quarter last year to $55 million higher. So we feel good about where we're headed in the fourth quarter I think in that comment you mentioned that we've got about a $124 million on funded.
Construction to be drawn here over the fourth quarter and first quarter of next year, we feel like we're positioned really well the metro markets have been very strong Columbus. It doesn't seem like it's hardly missed a beat as far as development perspective.
Some of the comments on plant, we've got some really nice project in the Cleveland area.
Area.
In that area and we've had and we have had loan growth and some of our what I would.
What I would call.
General areas as well so.
Contribution from all the regions and feel really good about where we're going in the in the fourth quarter barring any really big.
Setbacks on the Coleman and Michael I would offset I think we're doing a really good job of dealing with the right people and the right part we have a lot of longstanding relationships. Our lenders we were in a lot of our markets our season.
Veteran banking veteran and they've dealt with these people through numerous downturns in the economy. So they've dealt with some of the other guys have dealt with it. Some of these guys for 30 plus years and so we're doing a very good job and even though we have exited or.
You know high risk industries, like hotels, right, now and healthcare facilities and in rest.
In restaurants. Those are just you know those are industry types that we're not lending to we still think we'll get some good loan growth because of these longstanding relationships that many of our lenders have with with some of these customers with.
Within our footprint and quite frankly, Michael the other thing that we've got a little bit of advantage on right now with the CMBS market slowing down.
Our larger projects than we would've thought when I went to the permanent market by now have stuck on a balance sheet that will help them about perspective as well.
Okay. Thanks for that color and on fee income year over year growth has been quite strong can you just talk about how sustainable its income run rate it.
Well I think you know for the for the near term into at least the early part of next year in the mortgage banking piece is going to stabilize.
Relatively strong those pipelines are pretty full we've had pretty good swap income for the year up substantially.
We widen spreads there and that slowed that activity a little bit down in the third quarter, but if the if the CMBS markets are not active I do think that we can continue to do.
So some good volume on the swap income side and some of our service charge income you know it was down in the second quarter, because we had to kind of suspended some of that that's back in and I think interchange activity may be up some just because people are are using their debit cards and things.
Like that more so I think it's sustainable we've really had a focused effort on.
On trying to increase that non interest income over the last three or four years, and we really built that up nicely.
And we're going to continue to.
Invest in those areas. So that we can continue to kind of diversify our revenue stream.
Okay and just one last one you know many of your peers have announced plans for branch or office cost savings plan.
Has the board reviewed anything like that within the footprint taking care similar cost initiatives.
I think we're we're really taking a hard look on the expense side going into next year, obviously because in this lower for longer interest rate environment, we need to look for and make sure. We're operating as efficiently as we can so we have talked about a number of things.
As far as expenses, we do continue to take a hard look at them and I believe that there are some expense reductions that we can realize for us, though some of that expense savings will be reinvested back into the company, mostly in the form of technology upgrades, we recently entered into.
Our contract upgrade our digital banking platform and that's.
And that's a platform that will enhance our digital offerings for both our commercial and our retail customers. So you know I do think that we are going to see you know continue to get some.
Expense reductions.
But for US part of that at least will be reinvested back into the company.
Okay, great. Thanks for taking my questions have a good weekend okay.
Our next question comes from Nick Coppola Rally from Piper Sandler. Please go ahead.
Good afternoon, guys. How are you a Nick Nick.
Just to piggyback off the loan commentary can you give us a sense of the competitive dynamics in your market. It has the competition increase with modifications coming down across the industry.
It has and create jobs and Nick.
Definitely the rate of increase but I will tell you, we probably walked away from a lot more deals than we have than in past years.
Offensive or really really trying to hold margin as much as possible and when when we get down to certain rates on certain transactions, especially if we can't get any other ancillary income or income from those transactions no or let more water than we ever have like I said before though we feel good about where the pipeline is that right now.
I feel like fourth.
Fourth quarter, we feel good about projecting up half that's going to be difficult until we see how this plays out from a growth perspective, but I do feel good.
Sure and then Nik just as we had mentioned that we've exited some of those high risk industries. Most of our competition has too. So I think we're all fighting for.
A smaller bucket there of the of deals too so I think that it only intensifies. The the you know the competition and from a marketplace perspective, I would tell you that Columbus seems to be the most competitive right. Now you know we have a lot of different competitors move into that marketplace over the last three to four years I think people are still trying.
And just on loan growth.
Oh payoff, so we're seeing a really really competitive rate environment down there and then what.
Okay on the metro market that seems to be on what market were seeing very frothy from a rate perspective.
Okay, and then just just a follow up on the improvement in deferrals. It was helpful that you broke out the loan types in the release, but where any of the remaining modification disproportionately represented in the especially affected industries you've run through in the past or are they pretty disbursed for us.
August Sprague's first obviously, we talked about now.
Well.
[music].
It's pretty distributed there.
Restaurants.
Yes.
Yeah.
That discretionary.
The leisure.
Really were.
That was significantly lower than it was the first round.
A lot of that.
Yeah nice job there it looks like the expenses came in a little bit better than expected.
Rich can you share with us your outlook on the expense front in the near term.
I mean, I guess, there are things going up and things are going down Nick I mean, the total with expenses are a big piece, although I think they did kind of curtailed during the quarter I think net we were right at about $100000 of coated related expenses, but certainly the travel and.
And education and some of those expenses are down to I think if you are looking for a a run rate going forward and I'd hate to project much past in here, but I think what we did in the third quarter is a decent proxy for what we'll do in the fourth quarter.
Okay. That's helpful. And then just just lastly, with your total capital ratio at nearly 60% you continue to have strong internal capital generation. Despite the reserve build can you help us think about your capital priorities and your thoughts on continuing to utilize the buyback.
Yeah, I think yeah, we think thats, a great way to deploy it right now, particularly when we're.
Trading under book value.
You know and and you know any of those shares are highly deal that we're buying back are highly accretive as well. So we think you know that a given given our comfort level right now.
With our loan portfolio that that activity most likely will continue so we feel very comfortable there and and it's probably the best way, there's not a whole lot of M&A activity happening at this point, so it's probably the best way for us to deploy capital.
Great. Thank you for taking my questions.
Thank you.
Our next question comes from Russell Gunther with D.A. Davidson. Please go ahead.
Going back to the NIM, Hey start again going back to the NIM discussion on the funding cost side I was wondering if there are any levers.
To bring that down further or it will be difficult to bring it down below to 50 to 60 basis point range.
Hey, Russell this is rich and we say every quarter and it's going to be hard to do it and it seems like every quarter, we squeeze out another [noise].
Basis point or two but they're really only significant level. We've got left the poll is on the CD. The time deposit fat and we don't have a ton of time deposits, but certainly those are the things that we've repriced late maybe in the third quarter. So we might see a little bit there, but to your point it's.
Gonna be hard.
The reduced funding.
Near term.
Costs.
Okay, and then on the investment security side do you anticipate the yield on those for remaining relatively stable going forward or any type of lag compression there.
I I think again, what we saw earlier in the year is probably what were going to see I mean, we've got it fairly well laddered out and not a whole lot rolling on and off.
We probably moved maybe more on a taxable muni than non taxable muni, but the yield the kind of held there. So again I don't think we're going to see much compression due to reducing the yield on our investment portfolio again near term the next several quarters.
Got it and then just one last question on the girls I was just wondering if you're able to share an updated trajectory going into the fourth quarter from the 3% today.
Well, yes.
Our hardest.
Question, we've seen the migration.
Of credits returns getting stabilized returning back to payment.
Overtime here, when we get into the winter.
Some of the seasonal businesses.
The seasons.
But I think we're going to see a huge increase we've been very fortunate in our portfolio that has mentioned the strength of ours.
Yes, we've not seen any default already bankruptcy yet in our book our consumer portfolio has been a very good I mean, we have only about five deferrals and not whole books. So.
Knock on wood will continue to be fortunate.
I don't think were going to.
Yeah, and Russell as you know the wild cards. The stimulus you know is there another round of stimulus coming and they've been targeting some of these higher risk industries and stuff. So you know if that comes you know maybe there's a chance that that you know those numbers come down a little bit more if it doesn't come you know.
That's the uncertainty out there today that this whole pandemic has brought us so it's just hard to predict but we're really pleased.
Bringing it down from the <unk>, you know for where our first round level wasn't again, we we thought we were fairly aggressive or anybody that they did say they were affected we really granted them that first 90 day extension because that was the same time the PPP was hitting so we're.
We're pleased with the with the with where we stand as far as deferrals today.
Got it thank you for taking my questions. Thanks.
Thank you. Thank you.
Our next question comes from Joe Lebel, Etch with bedding and Scattergood. Please go ahead.
Good afternoon, Joe.
Hey, guys. Just a quick question you talked about how you did kind of like automatic the the downgrades for anything that was up more than a 90 day modification can you walk me through some of those numbers again, and then what if any kind of incremental downgrades, we might see here over the next couple of quarters.
Well.
[laughter] Seth mentioned, we did the first deferral without doing a lot of analysis, a second round, we added a lot of information because it's our information.
Given the shutdown.
As we said as we look at these as they needed the second deferral reduced significantly I think 23, the first round down to just over 102nd round and based on that.
Great projects.
Projections on cash flow was that a returning back to the right trajectory than we would.
Yes, So you know we're getting back.
Really integrating the normal risk rating process. So.
And I think we're going to continue to see changes were monitoring to see as long as we can.
Credit basis.
So right now.
As we said earlier I'm, not really sure where it's going to go but it seems like the lead edge.
And you do get smaller as we go and Joe I would not say at this point, we feel pretty confident there's no risk of loss right now from where we see and we you know Paul has been using the term in some of our management, meaning there's more risk of default and risk of loss. We feel that we're you know, we're we're fairly well so.
Secured a win.
With a with a lot of those loans, we got good sponsors behind them, they're clearly covidien pandemic it affected and so right now we really feel that you know we felt it was appropriate because obviously, there's more risk today during this pandemic than we had.
Six months ago, or or 12 months ago, certainly a year ago. So we feel it's appropriate to.
Great It appropriately downgrade at recognize it keep it to keep a close eye on it but again I think from our standpoint, right now there's more risk of default and risk of loss.
Thanks, and then and then did you have a specific number of criticizing classified it 930 versus 630.
Yes.
I think in his comments.
I mentioned really.
Most of the increase was.
Ah, Yes, certainly with the prior to the second deferral route.
My question was about.
And it's up to 170 million as of 930 and virtually all of those were.
Those that are where we get a new information.
It does.
Loss given default.
Yeah.
Yes. This is rich most of those were or maybe all of those were the automatic downgrades. I mean those are all were talking special mentions there. So that'd be a criticized asset those are the best kind of criticized assets.
Uh huh.
Thanks, guys.
As a reminder, if you have a question. Please press star then one to be joined into the queue. Our next question comes from Kevin Swanson with Hockey Group. Please go ahead.
Good afternoon, Hi, Ken.
Hi, Kevin.
Hey, I'm, sorry to keep going and used to throw numbers, but I was just curious I'm sure your perspective on Ltvs seeming to originate the values are at the origination date could you comment on what the impact of a cashless construction has done to some of the valuations and in particular in the hotel portfolio or maybe just any.
And you are seeing in the marketplace, what maybe update the value of those properties.
Well obviously.
Disruption for a long period is going to affect your values.
Right now I think most of the appraisers are looking at these things as a temporary disruptions and really we're not seeing a huge falloff as values.
Yeah.
Lease that based on the values, we've gotten in the last six months. So I'm sure over time that may change.
Yeah, we're not holding appraisal yet.
So that kind of hard to gauge but I.
Our our hotels booked is fairly low.
Yes.
58% 50, 353% I think of that as an older number although the old and okay. Yeah.
But that's that's where we stand right now so I think we're in pretty good shape.
Good luck.
The stress early on was.
Hill related commercial real estate properties, a number that has that asked for deferral, but most of those are returning to payment structures.
Most of my back then.
Uh huh.
Okay, and Kevin I would say on new deals.
At least at that we're putting on the books.
Appraisals are coming in pretty much I think the values are being you know they are holding so we're not seeing like the last recession were going into that we saw a big drops in real estate values, we haven't seen that on the new deals going on the books and we haven't seen that we've got picked customers commercial customers sell properties.
And we had that the you know they've gotten kind of the price. They wanted to get so we haven't seen that big drop like we did during the you know the last recession and then the other big difference obviously as the housing market those real estate values are really strong and during that last recession.
You know they went into tank so.
And to me that's one of the biggest differences between this pandemic induced a this cobot induced to a recession and the last recession that Kevin working this is Chuck we're watching those cap rates pretty close as as.
Cowen and cap rates and really not moved much whatsoever. In fact on a few things I think of unprofitable business because of the drop in interest rates over the last six months. So.
You are holding and the PDP program really helped I think that right.
Retail investment Guy.
Like Paul mentioned earlier, we had some tenants came in and were asked for firm for marathon. The rest that some of our landlords are borrowers and on whats the Pvp funded and those values can be you know.
That's fine they can use that right that helps and then went a long way to and we we have very few property owners right now that have.
We have people on deferrals far from a rubber side.
Okay. Thanks, that's it that's all really helpful. And then just finally for me.
Could you maybe update us on in terms of PPP and new clients gain to that any kind of traction you got on that end.
Well we've got.
We're talking about a couple of replacement so we've got a little over 300 new opportunities.
The PDP program I don't have a specific dollar amount in front of me right now we're still working through that but I can tell you. It's a significant especially on the deposit side, obviously with the whole, Florida move more from a lending perspective, but we feel really good about the new opportunity. We've got and then almost all of the opportunities have come from maybe.
The regional and national banks, and looking to get back into the community banking.
[noise] any else Kevin.
No that's it thanks.
Thank you thank you Kevin.
This concludes our question and answer session I would like to turn the conference back over to Denis Shaffer for any closing remarks.
Thank you in closing I, just want to thank everyone for listening and thank those that participated in the call again, we are extremely pleased given this pandemic with our third quarter results. The balance of 2020 will continue to be a challenge, but we look forward to meeting.
That challenge and in talking to you again in a few months to share our year end results. So thank you for your time today.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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