Q3 2020 Regional Management Corp Earnings Call
And our recent filings with the SEC for more detailed discussion of our forward looking statements and the risks and uncertainties that could impact the future operating results and financial condition of regional management Corp.
Also our discussion today may include references to certain non-GAAP measures reconciliation of these measures to the most comparable GAAP measure can be found within our earnings announcement or earnings presentation and posted on our website at regional management Dot Com I would now like to introduce Rob deck, President and CEO of regional Management Corp.
Thanks, Garrett and welcome to our third quarter 2020 earnings call Im joined today by Mike Demski, Our interim Chief Financial Officer.
Simply put we had an outstanding third quarter, particularly when considering the challenging economic and operating environment.
I couldn't be happier with our results and our team's effort, we generated $11.2 million of net income or one dollar and one cents of diluted EPS as a result of quality growth in our loan portfolio, a strong credit profile disciplined expense management and low funding costs.
Thanks to both rebounding consumer demand and our new growth initiatives. We sequentially grew our total portfolio by $37 million led by $41 million of growth in our core small and large loan portfolio.
Our core loan portfolio also grew by $10 million year over year.
At the same time, the credit quality of our portfolio remained stable with a net credit loss rate of 7.8% in the third quarter compared to a 10.6% rate in the second quarter and 8.1% in the prior year period.
We ended the third quarter with 30, plus day delinquency rate of 4.7%.
Near historic lows and down from 4.8% as of June Thirtyth, and 6.5% as of the prior year, even as our borrower assistance program usage held steady at pre pandemic levels throughout the quarter.
Our 144 million allowance for credit losses as of September Thirtyth compares favorably to our 30 plus day contractual delinquency of $49.9 million. The allowance includes a $31.9 million reserve for credit losses associated with COVID-19.
So we expect delinquencies to begin to normalize off these historic lows. We are confident that we have ample coverage to absorb the associated credit losses.
Of course, any additional government stimulus would help us to keep delinquencies low for a longer period of time.
As an annualized percentage of average receivables interest expense in the third quarter improved by 50 basis points to 3.5% compared to 4% in the prior year period in late September we completed our largest securitization transaction to date at a weighted average coupon of 2.85%.
Further, reducing our cost of capital and improving our already ample liquidity and borrowing capacity.
We are now a well established issuer in the ABS market and expect to access the market regularly moving forward.
As of October 20, Threerd, we had $516 million of unused capacity on our credit facilities and $208 million of liquidity consisting of a combination of unrestricted cash on hand, and immediate availability to drawdown cash from our credit facility.
In sum, we executed well on all facets of our business and we continue to position the company to expand market share and profitability in the coming quarters and years.
As we've consistently noted our management team and board of directors regularly assess our capital allocation priorities.
On the heels of our outstanding third quarter performance and based on our strong capital position robust liquidity and confidence in our long term strategy and ability to generate excess capital to return to shareholders on a regular basis. Our board of directors approved a quarterly dividend of 20 cents per share and authorized a 30 million.
Dollar share repurchase program.
The quarterly dividends and the repurchase program enable us to return significant value to our shareholders. While at the same time, allowing us to maintain a strong balance sheet and the necessary capital to invest in our long term growth strategy.
Looking ahead, we're excited about our growth prospects, we continue to invest heavily in our omnichannel digital and marketing initiatives as we see considerable opportunities to generate significant growth and expand our market share moving forward.
We entered the fourth quarter with 1.1 billion of net finance receivables and thus far in October we have continued to experience a steady uptick in the number of loan applications and originations further evidence of rebounding consumer demand and the early effectiveness of our growth strategy.
As I noted on our prior call we completed the rollout of our remote loan closing capabilities across our network in July.
Our remote loan closing process enables our customers to extend and expand their borrowing relationship with us from the comfort of their home plus.
While still allowing us to maintain the exact same underwriting standards that we would apply if the customers were meeting with us in our branches.
After only three months with the new capabilities fully deployed we completed 16% of September branch originations through the road loan closing process, a demonstration of our ability to adapt successfully to the new operating environment, while continuing to provide our customers with the best in class service and experience that they've come to expect.
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Over the next 18 months, we expect to test and implement a number of exciting digital and growth initiatives for.
For example in the third quarter, we experienced early positive results from a test of our larger loan offers to our highest credit quality customers and a test of direct mail offers to expanded segments of our risk response model, which we believe will generate attractive risk adjusted returns by.
By early 2021, we expect to complete the migration of infrastructure to the cloud.
And in the first half of 2021, we plan to rollout and improved digital prequalification experience for our customers, including expanded integrations with existing and new digital affiliates and lead generators.
Early next year, we also plan to enter a new state as we continue our footprint expansion and.
And we intend to pilot a guaranteed loan offer program, which will be an alternative to our convenience check loan product and may be fulfilled online with LCH funding into a customer's bank account.
In the second half of 2021 in early 2022, we expect to tested digital origination product and channel for new and existing customers.
In parallel we plan to improve our customer experience through the introduction of a mobile app and the enhancement of our customer portal.
Being available at the customer's convenience is imperative now more than ever and having modern capabilities that further enrich the customer experience will only aided our ability to retain our current customers and win new customers.
Digital initiatives and innovation at Citi.
Making her an ideal fit for the role.
We look forward to having her as a key member of the team.
And I would be remiss, if I didnt, thank Mike for doing an outstanding job in the interim CFO position I look forward to continuing to work with him in his ongoing role as our Chief accounting Officer.
In summary, I want to thank our team members, who continued to perform admirably for an outstanding third quarter performance in all respects.
We remain confident in the sustainability of our operating model the resilience of our customers and our team's ability to execute in a challenging environment.
We're very pleased with our results and with our ability to return capital to our shareholders and we're excited about what the future holds.
Ill now turn the call over to Mike to provide additional color on our financials.
Thank you, Rob and Hello, everyone. Let me take you through our third quarter results in more detail.
On page three of the supplemental presentation, we provided the third quarter financial highlights.
We produced net income of 11.2 million and diluted earnings per share of one dollar and one cents driven by sequential portfolio growth stable credit performance and low funding costs.
Page four displays our portfolio growth in mixed trends through September thirtyth.
We closed the quarter with net finance receivables of $1.1 billion up 37 million sequentially due to rebounding consumer demand and the execution of our new growth initiatives.
Our core loan portfolio grew $41 million, or 4% sequentially and $10 million or 1% year over year.
We continue to originate new loans with appropriately tightened lending criteria.
As illustrated on page five branch originations further increased from $67 million in June to $82 million in September.
Meanwhile, direct mail and digital originations increased from $12 million in June the $27 million in September total.
Total originations for the third quarter of 2020 decreased 12% over the prior year period the.
The year over year change in total originations has consistently improved for the past five months with September originations, increasing 7% year over year.
We expect fourth quarter originations to decline from third quarter levels as part of our normal seasonal pattern, which should result in modest sequential portfolio growth in the quarter. However, the timing of any new government stimulus checks would temporarily reduce loan demand.
Turning to page seven total revenue declined 1% in the interest and fee yield declined 60 basis points year over year due to the continued product mix shift toward large loans in the portfolio composition shift toward higher credit quality customers.
Was slightly lower interest rate due to enhance underwriting standards during the pandemic into.
Interest and fee yield increased 100 basis points sequentially as a result of increased renewal activity and the recognition of unearned revenue on those renewals.
In the fourth quarter, we expect interest and fee yield to be 30 basis points lower than the third quarter.
As of September Thirtyth, 80% of our loan portfolio had an EMR at or below 36%.
Total revenue yield which includes our insurance net income decreased 40 basis points year over year also due to the change in product mix and portfolio composition shift to higher credit quality customers.
As a reminder, customers purchase unemployment insurance coverage from us to help keep their loan payments on track even during an unforeseen unemployment events.
As of September Thirtyth, $53000 or 13% of our customer accounts are covered by unemployment insurance.
In the first quarter of 2020, we recorded a $1.3 million IMU I reserve related to elevated unemployment claims at the start of the pandemic.
Based on IMU I claim frequency to date no additional reserves were required in the second or third quarters.
In the fourth quarter, we expect our total revenue yield to be 50 basis points lower than the third quarter.
Moving to page nine.
Our net credit loss rate was 7.8% for the third quarter of 2020, or 30 basis point improvement year over year, and a 280 basis point improvement from the second quarter of 2020.
We expect to see the impact of the pandemic on our net credit loss rate more prominently in the middle of 2021 with the timing dependent on macro conditions and the impact of any additional government stimulus.
Flipping to page 10.
The credit quality of our portfolio remains stable, our 30 plus day delinquency level at September Thirtyth was 4.7%, which was a 10 basis point improvement from the second quarter, and a 180 basis point improvement year over year.
74% of our core loan portfolio has now passed our scorecard underwriting criteria. In addition, approximately 40% of our total loan portfolio has been originated since April the vast majority of which was subject to enhanced underwriting standards deployed following the outset of the pandemic.
Turning to page 11, we ended the second quarter with an allowance for credit losses of $142 million or 13.9% of net finance receivable growth.
During the third quarter of 2020.
The allowance increased by $2 million with a base reserve build of $3.5 million from portfolio growth, partially offset by a macroeconomic reserve release of $1.5 million.
We ran several updated economic stress scenarios and our final forecast assumes elevated unemployment in 2020 with a gradual decline to 9% by the end of 2021.
The severity and duration of our macro assumptions remained relatively consistent with the second quarter model.
We ended the third quarter with an allowance for credit losses of $144 million or 13.6% of net finance receivables include.
Inclusive of $31.9 million of COVID-19 related reserve.
We are confident that we are sufficiently reserved if the pandemic continues for an extended period.
Looking to page 12.
Gina expenses in the third quarter of 2020 or $43.8 million up $3.6 million year over year, but better than our sequential guidance for the quarter by point $7 million.
As we reposition the business for future growth, we adjusted our workforce in the third quarter and incurred a point $8 million of non operating severance expense. This.
The savings from these actions will be used to fund our omnichannel and digital investments we.
We deferred point 9 million less in loan origination cost.
On less loan volume in the third quarter of 2020, which increased personnel expense year over year.
We increased marketing expense year over year by point $9 million to support our growth initiatives.
Lastly, the third quarter of 2020 included point 8 million of incremental costs related to new branches that opened since the prior year period.
Our operating expense ratio was 17% in the third quarter of 2020 with the items previously noted impacting the ratio by 130 basis points.
We remain focused on investing in our digital capabilities and marketing efforts all to drive new revenue opportunities enhance our customers' omnichannel experience and create long term operating leverage.
In parallel with these efforts, we executed cost management actions, including the aforementioned workforce reduction to self fund a large portion of the digital investments.
Excluding marketing expenses in the second half of 2020 are forecasted to be down from the first half of the year, which evidences the self funding of the digital initiatives.
Overall, we expect Gina expenses for the fourth quarter to be higher than the third quarter by $1.7 million encompassing 1 million of increased marketing and the remainder related to investment in digital capabilities.
Turning to page 13.
Interest expense of $9.3 million in the third quarter of 2020 was 1 million lower than the prior year period due to the lower interest rate environment, and despite point $8 million of accelerated amortized debt issue costs incurred during the third quarter of 2020. These.
These costs related to repaying our first securitization with the proceeds from our latest securitization transactions.
In late September we closed our fourth and largest asset backed securitization a $180 million note issuance with a weighted average coupon of 2.85% our lowest cost of capital ever.
Our third quarter annualized interest expense as a percentage of average finance receivables was 3.5% a 50 basis point improvement year over year.
During the third quarter, we purchased $150 million of interest rate cap contract.
With three year terms and a strike rate against LIBOR of 50 basis points.
We took advantage of the favorable rate environment and help secure our funding cost for the future.
In the fourth quarter, we expect interest expense to be approximately $9.1 million.
Our effective tax rate during the third quarter of 2020 was 27% compared to 25% in the prior year period.
In the ordinary course of business, we have nondeductible expenses taxes on share based compensation and state taxes in Texas that largely do not vary based on pre tax income.
So these items have a larger impact on our effective tax rate on pre tax income is lower.
Our 27% effective tax rate for the third quarter of 2020 was better than our guidance of 30% as pre tax income increased on sequential loan growth strong credit results and low funding costs.
In the fourth quarter, we expect our effective tax rate to be approximately 27%.
Page 14, as a reminder of our strong funding profile.
Our third quarter funded debt to equity ratio remained at a very conservative 2.6 to one.
Low leverage coupled with $144 million and loan loss reserves provides a fortress for our balance sheet.
And the completion of the securitization transaction during the third quarter improved our liquidity profile and borrowing capacity even more.
In summary, we have more than adequate liquidity and capacity to support the fundamental operations of our business throughout the pandemic.
That concludes my remarks.
Ill now turn the call back over to Rob to wrap up.
Thanks, Mike in summary, we exited the third quarter with solid operating results strong balance sheet ample liquidity stable credit profile and an exciting long term growth trajectory we.
We're very pleased with our performance our current position and with our board of Directors' decision to begin regularly returning excess capital to our shareholders. Thank.
Thank you again for your time and interest I will now open up the call for questions. Operator could you. Please open the line.
Certainly.
I'll now begin the question and answer session.
During the question can you May Press Star then one on your telephone.
Hello, Sara churn and knowledge in your request if you are using a speakerphone. Please pick up your handset pricing and 18 Kim.
Kim with Janney. Your question. Please press Star then two.
Although pipes for a moment as callers join the queue.
Our first question comes from David Scharf JMP Securities. Please go ahead.
Hey, good.
Good afternoon, and thanks for taking my questions.
First off.
Rob you rattled.
Rattled off an awful lot of sort of new growth initiatives.
Next year I.
Couldn't get them all down but.
I was just wondering is it high level, whether whether it's new.
Trying to think about how to rank.
Maybe.
The prioritization in your mind as you think about what might be most impactful to origination volumes over the next maybe two.
24 to 30 months is it new stores is it.
Digital convenience checks or just remote closing how should we be thinking about.
How the origination model ultimately changing.
Yes, David Great question and good to hear from yet so I guess the way I look at it as this way you now the growth we saw in the in the third quarter in other $41 million.
Increase in receivables about half of outside came from some of the new initiatives that we listed.
Whether that was testing some larger offers to our very best credit quality customers.
You know some of the enhanced.
Analytics, we used for our direct mail program to kind of expand the segments that where we're marketing into within our risk. The response models.
We talked about extended footprint mailing before so we're starting to see some some early results from from those initiatives I think the key takeaway and we did pack and a lot in my commentary. There is this was all about really finally building out that true omni channel experience.
So a customer Ken.
Be served where and how they want and we think thats going to be critical post coated.
The things we are going to be rolling out next year is going to ultimately allow us to do.
And to add original digital originations, whether that's on a mobile app or our portal.
And when you have those.
Those capabilities.
That can be applied.
In numerous ways to not.
Not only expand the topline.
And grow your balance sheet and your receivables, but also drive efficiencies in the organization and so then when you think about.
We talked about entering a new state next year, you know as we think about entering new markets not only could that allow you to do that in a more efficient way with less stores.
But it can also ramp up your ability to enter more geographies faster.
So it's hard hard for me to give you any kind of quantification now other than.
Well I think part of the confidence in returning.
Returning.
Capital to our shareholders is the confidence that we have in our in our long term business model and the ability to return excess capital to our shareholders.
Got it understood I appreciate that and maybe just one follow up.
I guess with roughly 80% of balances now it sounded like or at or below 36%.
You, obviously can control based on what types of products, you're actually marketing.
Neither digitally or direct mail.
Did you have a goal in mind.
Time wise for when you would.
Prefer perhaps for the portfolio to be entirely at that level, particularly in.
In advance of what potentially could be.
Different regulatory environment in Washington.
Yes, so really two component pieces to your question I think look part of our core strategy is.
We acquire in a small loan customers that on average have a much higher rate than 36% I think the average is 43%.
We then.
Heavy on us credit experience with US and then as you know we graduate them to larger loans.
They are delighted in the sense that day.
They pay a lower rate and in many cases, you know lower payment absolute payment and that's still a core part of our strategy and it's how we acquire new customers and fill the funnel. So so to speak to then graduate them to large loans. So that remains intact. Now you know if there were to be a pill.
In the regulatory environment to some sort of 36% rate cap.
Being at 80, 80% is there's a pretty good place to be and we could migrate and pivot accordingly.
I also think did any kind of rate cap at 36% would lead to a lot of.
Companies are struggling to stay in business and create some opportunity maybe even a lot of opportunity for us to grab share from from their customers, who are summer are paying higher rates than than they otherwise could be paying if say.
Possibly apply to us to get alone.
But stepping back more from a practicality standpoint, and no one can predict what what's going to happen in Washington.
The access to credit that would get taken away. If there is a 36% rate cap it could impact out of the 100 million Americans.
And thats going to have a significant impact on on the economy.
Right as we're hopefully coming out of co bid and so while it sounds good that you know there is a 36% rate cap im not sure from a practical standpoint.
That that's going to be beneficial to the economy and get through but again whichever way. It goes we're well positioned and we like where we stand.
Great. Thanks, very much congratulations.
Thanks, David.
The next question comes from Sanjay Sakhrani with KBW. Please go ahead.
Hi, does that say Steven Kwok filling in for Spygate Hi, Thanks for taking my question I guess like follow.
Solid positive around the credit aspect like lending to lead a.
Aspects of the pandemic on Ukraine, and I take it seems like everything is in Kuwait as far.
How should we think about the credit trajectory over the near term and then as you think about that how does that impact the reserve fate as the charge offs come through and so we expect to end the reserve might come down given you've already reserved for those boxes. Thanks.
Hey, Steven Thanks for the question I'll take the first part probably kick the reserve.
Question over to Mike, So look where we stand now delinquencies at 4.7%.
Our adjusted off historical lows and we do expect the delinquencies as we've said previously will start to rise.
Given where we are in the year I think right now you're looking at absent any more government stimulus.
Looking at maybe middle of the year next year, where you start to see the cobot related losses come through which we are.
Well reserved well for so.
So thats kind of the the the outlook at the moment now obviously, if there's additional government stimulus and we don't know the timing or the forum.
But I would expect that that would extend the benefit on the delinquencies and push further out the losses, depending on what the nature of that stimulus.
As Mike you want to cover from a reserve standpoint, sure Hey, Stephen Good afternoon. In your thesis is correct on the reserving for the losses here in 2020 that would.
Release of the reserves would offset those losses when they come through in 2021, So just to give you a little background.
Our model assumes elevated unemployment in 2020 with a gradual decline to 9% by the end of next year. We then made adjustments to the model to account for some of the benefits of our internal borrower assistance programs.
In the third quarter, our severity and duration of our assumptions remain pretty consistent with where the second quarter model was.
And overall, we're confident that we are sufficiently reserved if the pandemic continues for extended period as Rob mentioned, we do expect the delinquency to rise during the fourth quarter, but a lot of thats going to depend on the timing and level of any government stimulus, but in the meantime, we.
We have 31.9 million.
The related reserves, which is about a 30% stress on our normal reserve rate that we came into 2020 with on C. So on so we feel comfortable with reserves being able to cover the impact of cope with losses in 2021.
Great. Thanks, and just as a quick follow up are you seeing anything on the consumer side as some of the stimulus program has kind of gone away.
If you are seeing anything on it early on.
Well you know Stephen the.
The additional unemployment expire to the FEMA money that was redirected was largely.
You stopped it by the end of September.
And so weve, we really haven't seen an impact on our delinquencies ending at 4.7%.
And so far in October we're tracking well to be below 5% in.
Others are they decide to government stimulus theres other things that are supporting our customer.
And the economy in general I mean, I think that if you think about the the forbearance programs with the mortgage forbearance programs. The government agencies, I think up to a third of.
Customers may be taking advantage of those forbearance programs. The average benefit is about $1100 in cash save per month.
So obviously our customers may be on the below the average in terms of cash save but you take that you combine that with people spending less money or what that translates into is.
A much higher savings rate and I think you can see that from some of the metrics that reported I think.
Savings are up 12 trillion dollar since the beginning of a pandemic and thats really across all income bands.
Our debt to income is has improved so you know the consumers' balance sheet is pretty pretty healthy.
I saw some research recently that suggested you know for the pure government stimulus that was provided about a third of the of the dollars want to pay down debt a third one to spending and the third one to saving so.
There is underlying support and beyond direct government stimulus.
But clearly if there is additional government stimulus thats going to add further further support on the on the credit side now just to be clear.
Little bit of a double edged sword I do think if theres stimulus checks at least in the.
The very short term you might have.
Some impact on demand for.
A month or two or a quarter as any stimulus dollars.
Burned through but but net net we're certainly ill.
In a pretty good shape.
Customer I think is in better shape and of course as Mike said, we're we've got.
We've got substantial reserves relative to our current delinquencies at this point in time.
Hi, Thanks for taking my question.
Once again, if you have a question please press star one.
The next question comes from the line.
Yes.
Capital. Please go ahead.
Hey, guys. Thanks for taking my question I'm on for John Heck today.
Just wanted to touch on the Omnichannel platform.
How it's going to affect the cost structure going forwards and what else do you expect to see out of it especially in like 21 22.
Yes, you know a little bit too early to tell how that's all going to play out.
As you saw there is various initiatives, we have I think fundamentally overtime.
Overtime it is going to.
Improve our cost efficiency.
You know the more customers you service through digital means.
The lower the cost will be.
If we enter new states with a thinner branch footprint.
That obviously reduces our origination cost.
Part of the reason why I can't give you a straight answer is it really all comes down to the pace of implementation and we're very early in the end testing some things and we're investing in building out the rest of the capabilities and the you know where we finally land is in part going to be how quickly.
We can.
Affect the pace of change and of course, along the way and make sure that we're meeting the needs of the customer with the right capabilities and Thats never just a straight line.
No you tested you learn and you pivot.
I think we've learned to be very nimble in the in this environment gearing global pandemic and Thats going to pay off in spades as we as we digitize the business and build out our omni channel strategy.
Awesome, Thanks, and then.
Another quick one for 21 is how should we think about it.
The branch build outs I know you said.
In your release that were expecting one for Fourq, you, but going forward or is it too early to tell there.
Yes.
A little early to tell I would tell you. This we are going to enter new states. So you can.
Kind of pencil in right now.
Actually 10, new branches I am not going to say that they are all going to be in the new state. We do have some opportunities and some of our other.
Regional States. We've entered so you can pencil intend for now.
We'll get back to you on more details as we as we finish up our plan for next year.
Awesome. Thank you so much.
The next question comes from Bill does along with comments on capital. Please go ahead.
Thank you you walked through a number of new digital initiatives.
Over the course of the next 12 or so how much would you. Please kind of highlight which one of those is going to have the greatest overall impact on the business.
Number one number two which one you expect to have the biggest impact on loan growth and number three the one that you expect to have the biggest impact on on credit.
So bill good to hear from you.
Yes, you know, we're probably not going to get too far over our skis on any of these initiatives I can tell you. There are several things we're working on that we think are very attractive growth opportunities.
Yes, well, obviously as we enter new states.
Thats always a very nice runway for growth but.
The other capabilities, we have around using our data to mail more effectively and efficiently.
Yes, things, we may do to extend the reach of our branches all of those things are going to have a positive impact and it's not as if we have to choose one over the other many.
Many of these things can be done simultaneously and be built into just the way we operate clearly as we digitized and we go end.
And to add in terms of our capabilities to underwrite for for new AD.
Existing borrowers that opens up a tremendous greenfield opportunities.
For us to to expand our growth, but on the credit front, what I will tell you is there's nothing we're doing that we are keeping laser focus on credit.
Yeah ill, particularly given the environment with the pandemic, but when you.
When you do new strategies, obviously, we are going to be laser like focus on on the underwriting the strategy that we started to put together in the.
And testing the third quarter, all those have been done with the.
With the existing underwriting standards, we have I think it's worth pointing out that since the start of the pandemic. We we turned over about 40% of our portfolio. So far the vast majority of that.
New receivables has been put on the books with Titan or enhanced.
Credit underwriting and Thats, you know higher FICO cut offs maybe.
Lending less to certain segments more.
More robust income verification use of other.
Information to guide us in terms of our direct mail programs from a risk standpoint, and we're going to build out continue to build out our credit infrastructure and go beyond our existing custom scorecards and really start to.
Leverage a broader set of data data elements and beyond the 23 or 24, we have we're talking about a thousand or more.
The other firms some other firms utilize and take advantage of machine learning to to make our underwriting even more sophisticated so when you when you take those elements along with with tools that exist out there today.
Particularly with digital underwriting to prevent fraud.
All of those activities are going to help us.
I don't grow the topline through these new strategies, but maintain very.
Tight control over our credit.
Yes, so that we can maintain the returns in the business.
Thank you and and.
Let me ask a.
Another unreal.
Unrelated question to what degree do you know.
The.
Category is that a person is employed in and specifically I'm trying to understand to what degree do you.
Could you just pull up as a proportion of your your customers that are restaurants servers for example, or.
Work in network in hospitality is some of these higher risk areas.
Yes, we have the ability to to sort by industry. Obviously, there is always going to be some noise in the data based on on your sources of information, whether it's something that.
That has been reported accurately by the by the customer or not.
So we have the ability to to look at that.
We have the ability and we have been suppressed certain industries like oil and gas for our direct mail program as an example.
So we have the ability to to look at that we know that.
Proportion in our portfolio not just in aggregate, but a state level and of course, we look at.
The performance of the business at a very granular level.
But clearly as we continue to build out our data analytics capabilities.
In the credit side look.
I will just get better and better at it.
And your credit has been great, but have you seen a difference in behavior amongst customers either geographically or by.
By type of employment or type of employer category.
Yeah, you know its in the performance has been pretty consistent across all our stage.
Obviously, you know if someone's unemployed theres more stress.
Theres, obviously been a lot of support for the unemployed, which I think abhi.
Obviously and improves the performance of that segment, along with all the other I.
I think support debt that's out there in the economy in general whether its forbearance programs and alike. So.
But the performance is pretty steady across the portfolio and we're we're pleased with where we are but we're we're also watching it like a hawk and.
I think thats, what you would expect us to do and and were reserved obviously for.
Any stress the comps.
Great. Thank you and Mike Thanks for the great job you've done.
Thanks for the kind words bill Thanks Bill.
This concludes the question and answer session ill.
I'd like to turn the conference back over to Rob back for any closing remarks.
Yes. Thank you operator, and thanks, everyone for joining as I said, we're really pleased with the results. This quarter, obviously the environment is still uncertain and.
Top of mind for Us is the safety and.
Health of our employees and our customers.
Marine we remain.
There for our customers.
So we are seeing and have seen a pickup in demand and we're encouraged.
Where the future holds I will tell you that.
Yes, very confident in the strength of this business and just a slight split of some so facts with $272 million of equity.
We have $208 million of available liquidity as of October 20 Threerd.
144 million of loan losses, and $507 million of unused borrowing capacity to support our growth and our earnings in the quarter all of which were up strongly since the second quarter.
So we're confident in the strength of our business.
We're optimistic.
In the future for for the business and the growth opportunities and we are.
Watching the environment closely and we're prepared and will remain nimble too.
Address whatever challenges face us as a business.
So thanks, thanks for joining the call and have a good day.
This concludes todays conference call you may disconnect. Your line. Thank you for participating and have a pleasant day.
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