Q3 2020 American River Bankshares Earnings Call
Welcome to the third quarter 2020, <unk> earnings Conference call My name, but that's and I'll be your operator for today's call. At this time participants are in a listen only mode. Later, we'll conduct a question answer session.
A question answer session. If you have a question. Please press Star then one on your Touchtone phone. Please.
This conference is being recorded I would now like to turn the call back to David Ritchie Enriching you may begin.
Thank you Vanessa and good afternoon. This is Dave Ritchie <unk>, President and CEO of American River Bankshares parent cut the company American River Bank headquartered in Rancho Cordova, California, and this is our third quarter update please be aware of our earnings release, which details our quarterly quarterly results.
That market open today, along with our quarterly cash dividend payable next month.
As always we've included some economic data in our press release and General go Bad 19 has definitely slowed our markets, but the outlook is somewhat positive yes.
Only will change we we put in there was we did update the employment situation instead of California.
And with that I will turn it over to Mitch Derenzo, our Chief Financial Officer. Thank you.
Thank you that's of course, a thanks all of you for taking the time to listen called today, what everyone is doing well in light of these unusual pattern for continued to face now and that for us the California, who knows how long going forward.
Before we get started and then remind everyone of our safe Harbor disclosures.
Certain matters discussed in this presentation may constitute forward looking statements. The purpose of the federal Securities laws and May involve risks and uncertainties as well.
As a result actual results may differ materially from the results in these forward looking statements.
Factors that might cause some fees.
For instance are discussed in our.
And the report on form 10-K.
For the year ended December 31st 2019, and our subsequent reports filed on form 10-Q and 8-K.
The company does not undertake any obligation to publicly update or revise any of these forward looking statements, which would include information or future events, except as required by law.
The links to our annual report.
And 10-K and our subsequent filings for 2020 2020 are located on our website American River Bank Dotcom.
As we're past conference calls I want to highlight some of the key areas from our press release that was issued this morning.
Try to provide some additional details and ALS analysis, and then I'll turn it back over to Dave.
Additional comments.
The launch of questions.
This morning American River Bankshares reported net income for the third quarter or 20 $21.8 million that compares to $1.6 million during the third quarter 2019.
The 13% increase.
Earnings per share were 30 cents in the third quarter this year versus 27 cents in the third quarter of last year.
Thats loved percentage increase.
Alright, and already for the quarter were 82 basis points and 7.79% respectively.
That compares to 88 basis points to 7.65, respectively, one year ago.
Okay.
On a year to date basis net income was $5 billion in 2020 compared to 4 million in 2019.
And EPS were 84 cents in 2020.
68 cents in 2019, both of those are about a 24% increase over 2019.
Our there and are we for the nine month period in two basis points and 7.52% this year.
Compared to 77 basis points, 6.81%, respectively, one year ago.
On a pre tax pre provision basis net income was $8.2 million this year compared to 5.9% year to.
Year to date in 2019, Thats, a $2.4 million increase.
It's about 41%.
Despite the rate environment that we're in right now the based on the FOMC actions and then also the 2.3% effective yield that we're getting on the PPP loans for the quarter.
I think our margins hold up pretty well.
For the first nine months of 2020, the yield on loans was 4.8% compared to 4.9 for the first nine months of 2019.
In the overall cost of deposits decreased 35 basis points from the first nine months 2019 to 21 basis points for the first nine months of 2020.
Hi, This is resulting NIM was at 3.55 for this year versus 3.59 last year.
Loan growth over the past year.
[music].
Really.
I am sorry, the load growth over the past year, and but more importantly, the uncertainty created by COVID-19 has.
As one to the increase in our loan loss allowance.
This year alone we've added $1.5 million up from $480000 in the first nine months of 2019.
Before we get to the typical reviewer to start with a discussion on our PPP loans since makes impact so many areas of our results.
During the quarter, we Didnt fund any additional PPP loans, nor did we have any pay down or have any forgiven.
So the outstanding balance remained at 473 loans for 75.8 million.
The net PPP loans, you reduce per the unamortized loan processing fees increased from 73 million $768 million to $70 million 74 million to nine resulting increases due to the net fees $441000 that were recorded during the quarter.
Since there was no change during the quarter. The gross average balance outstanding stayed the same at $75.8 million.
The net unamortized fees and costs at 930 were a million 595 compared to between $36000 at June 32020.
Again, thats the $441000 decrease that we took him income.
Paper PPP forgiveness in pay downs will accelerate that amortizing of that $1.6 million remaining fees.
Last quarter, we had the discussion and the impact of the origination of costs associated with the funding of the PPP loans and how were able to reduce salary expense by $332000 in the second quarter. When we originate those loans since we did not originate any PPP locked in the third quarter with no additional origination cost.
The yield and whatnot on the PPP loans.
Makes it tough to figure out some of these averages the ratios.
For example, we had a balance of 75.8 million in the quarter.
We amortized net fees of 441000 and recorded $194000 in interest.
Pull out that our yield on loans for the quarter would have increased from the actual 4.64% to 4.89. So they do have a drag on our yield.
And then if you looked at it on a year to date basis.
Average balance outstanding $39 million.
Our net fees $748000 in interest income was $333000.
So from the loan yield there from.
The year to date goes from the actual 4.8 up to 4.91%.
I guess the real challenges.
As when the $76 million in cash roll through and once these loans are for given its paid off that at 2.3% yield to be dragging on our portfolio right now after the slower than the rest of the yield we are getting a media.
Loan portfolio, but we have to put it in our fed account at 15 basis points will continue.
Can challenge us so liquidity definitely is not an issue, but deploying a quick we will be.
As to the forgiveness, we have started to receive payments from SPX. Some as of this morning.
We have about 23 loans forgiven totaling about $1 million and how about 49 more loans and with the FDA.
About $19.2 million total there and then we've got another 55 loans for forgiveness applications close to just over $8 million that are being reviewed by our books right now with hopes getting those submitted.
Submitted shortly so the numbers. The total number is about 30% of our total loans in dollars, it's closer to 40% of our total loans.
With some positive news there.
On to the balance sheet net loans outstanding increased $11.2 million during the quarter, that's about a 2.8% increase.
Of course is net of the PPP loans at 2.8% increase.
We're excited about the.
Increased volumes in.
In the quarter, we did $33.2 billion of new of new loans.
That compares with 33.1 in the third quarter last year. So we're.
Pretty close to where were a year ago.
Just as a reminder, in the first quarter. This year, we did just about 12.9 in the first quarter and 17.4 in the second quarter of this year through at $33.2 million exceeds the.
Total for the first half of the first six months of the year. So again.
We're seeing good activity and get back on track.
Total unused commitments were 35.7 million as of September 30.
That's about 21 of those preliminary those were commercial so those those are going to evolve over time here.
The rest of that $35.7 million as real estate related.
We expect those two funds over the next year.
Payoffs did tick up a little bit in the quarter still manageable there were $15.5 million in the third quarter compared to just under $9 million in the second quarter. This year and 13 million in the first quarter.
We did collect $82000 of prepayment penalties in the third quarter that compares to 29000 in the third quarter of last year.
Year to date basis prepayments $346000 this year.
257000 in 2019.
So we began doing in our March 10-Q is putting the exposure to certain sectors will update you on that dollars in percentages really.
Really didn't change much.
Change related to some slight pain paydowns on based on their payment activities.
And these percentages outstanding obviously, they exclude the PPP loans.
So churches $18.2 million or 4.5% of the outstanding loans.
Restaurants $5.8 million for 1.4% of the Outstandings.
Elder care $6.6 million or 1.6%.
School child care, that's $4.6 billion.
For 1.1%.
The net recreation, which is golf submitted sports clubs and the like.
At $1.9 million or half a percent.
In an oil and gas that was $6.2 million or 1.5% and as I said last quarter is really they're considered oil and gas, but the loans or the gas stations.
Oil change facilities that could be gas station car washes out at the end or convenience stores.
As a reminder, we did not have any hospitality loans again at the end of September.
On the credit quality attractions with a pretty positive we didn't have any non accrual loans or loans past due greater than 30 days at September thirtyth.
One area watching closely of course is the loans that have been granted bone deferrals on kind of deferrals.
At the end of June if you recall, we reported we had 107 of those loan deferrals totaling $96.5 million.
We do that to more loans in the early part of the third quarter totaling $3 million.
But also in the quarter, we had four loans totaled pay off their totaling $2.1 million that could offer full.
So at the end of September we had 70 loans return to paying status or.
Or by the end of September seven those loans return to paying status with a number of loan deferrals as of September 32020, which was 35 of those $38.3 million.
For those loans.
Totaling $4.1 million or in their initial deferral period by the remaining 31 loans were $34.2 billion have been granted an additional deferral period.
For example, they might have had an initial three month and we've extended up to six months.
I did mentioned earlier that we didnt have any loans past due 30 days.
That would include these 70 loans that have come up deferral or third quarter their skill to consider current.
So we have $28.8 million or 75% of those remaining deferrals that are expected to begin paying in the month of October so, it's a pretty big month here.
I do a quick check your at Fort came in.
Of those $28 million loans called 21 million loans 18 loans for $20.2 million have already begun making their payments in this bumps. So in essence theyve come off the deferral continuing the continued started making payments again. So if you pull those out remaining deferral totals as of this.
Minute here 17 loans totaling $18.1 million I think we've made a pretty good.
Progress there on getting those things reduced the nearly $100 million at the end of the quarter and last quarter.
Which was higher than I think I expected, but.
Core per quarter.
Really knock those down and then here again in October so some positive news there.
On the allowance we did at $445000 in.
Provisions for loan losses, and really that's due to the steel and and unknown.
Affects of COVID-19.
Although we believe the credit quality was solid at the end of the quarter.
And we are having success, reducing valone deferrals revenue, though the depth of the economic impact to cope with my team will have so we believe the increased the reserve this quarter long with the 1 million we added in the prior two quarters is prudent.
We continue to do a deep dive in all of our loans.
Particularly attention to the deferrals that we incorporate that we do the analysis for media the amount we needed at the end of the quarter.
We continue to stay in front of our borrowers and much of the impact of the Covidien and all of them and adjust the triple Accordingly.
At the end of the quarter that allow it to blow through loans was 1.3%.
Of course, the PPP loans had a parent guarantee to you that's appropriate to look at that adjusted ratio. So the adjusted ratio was 1.64% that's up from the 1.58 at June 32020 and one.
And 1.32 per.
Percent one year ago.
During the third quarter, we did have one small $27000.
Loan loss on a commercial line of credit.
Year to date net charge offs are just $7000.
We still do have one or Oreo property.
Book value $846000 for no change there as well.
Touching on loan growth I mentioned earlier.
During the quarter comers.
Commercial grew by $4.3 million or 10.8%.
CRD grew by $9.6 million or 4.5%.
Real estate construction, thats up $3.7 million or 13.6%, followed by consumer which grew $600000.
Dollars or 2.1%.
We did experience a decrease in multifamily.
Those were down $5.7 million.
For 11.7% residential decreased $1.3 million or 4.5%.
As I said the growth in the commercial that included some new loans made during the quarter through advances made on loans in the prior quarters.
Construction, primarily in the commercial construction and the growth in the consumer that's our special Otto.
Portfolio, we added 51, new loans there.
During the quarter average of just over $100000 on those compared to 56 of those loans during the second quarter of 2020 for an average of $41000.
The average rate on the new loans of $33.2 million new loan commitments during the quarter was 4.56%.
We also renewed $14.6 million in existing loans during the quarter those rates averaged about 5.5%.
Classified equity ratio at the end of September was 2.7% that's up from 1.3%, but the energy boom still still real low numbers.
With the make up there.
The holdover Oyo $846000, we had that one commercial loan that to hold over $131000. We do try to do the classified a commercial real estate retail related loan for about $1.1 million.
As the the investment portfolio really really no significant changes there.
Well structured cash flowing mortgage products.
And some high credit quality mean bonds portfolio.
Portfolio still remains relatively short average lives for the entire portfolio about four years.
Effective duration of the entire portfolio still quite low about two and a half years.
And then the price change in rates up 300 spot a math person.
Onto the liabilities deposits ended the quarter $728.8 million down $12.9 million, our 1.7% from the June 30 balance of $741 million.
But it's up $116 million or about 19%.
$613 million one year ago.
We we like the growth we do realize some of that so some.
A little bit of PPP left over some of the other government programs and on a flight to quality, but.
A lot of that revenue.
The decrease in the quarter.
Pension risk due to tax payments due on July 15.
But we are having success, bringing a lot of new relationships over that's expanding existing relationships, finding new ones or really going after the call.
Clients have helped get PPP locks are bringing in some of their deposit dollars as well.
As you would expect to have much of the decrease in the balances in the quarter was in the noninterest bearing that makes sense to me because that was the largest increase over the last few months.
Non interest balances dropped about $14.6 billion in the quarter versus.
We are still up $67.3 million or 29.5% year over year.
And they make up 41% of our total deposits.
It's up from 37% of our total deposits one year ago.
We have been able to reduce our deposit cost cost because low rate environment.
One year ago.
The.
Overall cost deposits 36 basis points that was in the third quarter last year and then in the third quarter of this year, it's dropped to 14 basis points.
No change in the borrowings outstanding at the end of the quarter, there were still $27 million.
We didnt roll, one and reset to a lower rate.
As of the end of September we still had the $2 million in the FRB Paycheck protection program liquidity funding we did.
We did see that back last week couple $2 million.
35 basis points seem like a nice low rate when we funded it puts on liquidity didnt become an issue. So it made sense to pay its Pat payback.
Our average borrowing cost at the end of September was 1.5%.
Our capital capital levels to remain strong they have increased from $82.9 million. The beginning the year to 91.7 at the end of September.
That $8.8 million increase came from the net income roughly $5 million.
Hi, guys up 4.7% due to the continued decrease in rates or bond mark on portfolio.
And then the difference there away we did pay the cash dividends of 1.2 from 1.2 billion for the year.
Maybe $300000 increase relates to equity compensation.
Sticking with capital leverage ratio was 8.2%.
Number.
Total risk based capital of about 16 and a half.
Both the leverage ratios data chat from ended the year It was 9.2.
Really the increase in our assets with deposits was the primary reason for the decrease in leverage ratio.
You may have seen the press release earlier that Dave mentioned quarterly cash dividend to be paid next quarter.
From an income statement really briefly here not a lot non stop.
Non interest income down a little bit.
Compared to the third quarter last year, and then also down really from the.
Full nine months of last year, we got $87000.
Primarily lower lower service charges on deposit accounts those dropped from 409000 in 2019 to 381000 2020.
Also gains on sale Securities was dropped from 74000 last year to 30000 this year.
Given that lower service charge results from lower fees from return checks.
Those dropped about $50000.
And really the primary reason embarrassed our clients have higher balances under checking accounts in much lower level of checks, causing overdrawn balances.
Our core service charges, though those are up about $22000 with positive.
On the expenses.
We did increase during the quarter, so were $4.1 million in the third quarter last year increased to $4.2 million in third quarter 2020.
Probably the area that increase was the FDIC insurance assessments and we had a reversal in the third quarter of 2019 to an extra expense of $62000. This year, probably up remember that the.
Last year, the third quarter, we received the PSC small business or small bank assessment credits.
That was short lived.
One other thing here.
The other line that did increase $51000 with the largest piece there being the internet banking fees, which increased $43000.
And that includes some cost associated with our new online banking system, which we converted through this year.
For the first nine months this year versus last year.
Similar we exited decrease in overall.
Overall, non interest expense and that goes back to what I talked about last quarter. The deferral of the loan origination costs associated with PPP. So.
Salary and benefits were down $150000.
Salary piece core salaries were up about 49000 year over year, that's a little less than 1%.
The loan origination costs those directly related to the PPP really those were up to.
$295000 in.
Thats really a reduction of the expense those are a negative.
The benefit from the loan origination costs are somewhat offset by higher salaries I just mentioned the $49000 increase in core salaries. We also had higher allocations to our vacation accrual of 40 to $42000.
Equity compensation increased $47000.
The salary really thats drew related to normal cost of living increases and promotions because for staffing levels are about streams or were a year ago.
Patient accrual data to increase because the step has been taken your typical patients due to the COVID-19 restrictions.
Let's see the decrease in not just for expense year over year is also due to a degree decrease in other expenses.
The what.
One area there that jumps out at me is the advertising business development.
Those were down about $250000.
Again thats related to the shelter in place wonderful that our markets reduced the number of business development opportunities and be benefit with the sponsor.
Partially offsetting that decrease would be internet banking fees.
Which increased $74000 during the year again thats, but.
Partially related to the new online banking.
In addition, I mentioned this last.
Last quarter director fees were up $65000 of that that nonrecurring amount of.
For the director the past, where that's $70000 that we did the full expense for last quarter.
On the taxes.
No. They did increase for the quarter, they went up $86000 or about 15%.
And then for the year grew up $418000.
That's about 30% and our effective tax rate.
For the first nine months. This year was 26.6 compared to 25.7 during the first nine months of last year.
Really the increase of both of those the effective tax rate and.
In the higher provision.
Have a lower level of tax exempt investments and the equity compensation vets less benefits from that.
And of course, the taxable income due to increase.
On the tax benefits.
From the equity comp last year, we actually had a tax benefit of for $2000. This year, we had a tax expense related to equity comps footprint switch there about $66000.
Thank you and now I'll turn it back over to Dave for some additional comments.
Okay. Thanks mix.
So yes, we can we can make continue to make in some really good progress in the third quarter as a result, the results have shown.
We're all living in a state of this disruption for the foreseeable future. So we have to remain flexible and then flexibility is paramount as you know, California has the most restrictive state in terms of the pandemic coupled with the wildfires. It's definitely made it very interesting to manage through this process.
While we will continue to follow the guidelines of the CDC and make adjustments as we go and hopefully make adjustments.
Help our team members and our clients and all in all I I really think we've done a really great job operationally we've been for the most part I think all our branches and then open for the almost the entire pandemic, we had a few shutdowns, but not too. Many so the folks who are doing a great job.
From my perspective on the credit side.
Obviously, the credit areas, obviously, a higher risk area for banks.
Now I'm pleased.
We instituted this increased monitoring on the portfolio I'm really pleased with that I think the fact that we're staying front of our clients is it is very big just from a communication standpoint, and kind of giving us has that bonds potential issues and whatnot.
We're pleased with the number of the number of deferrals. Obviously meant just gave you some of the numbers.
Very pleased with the way that people are resuming their payments, we were a little high in the beginning but I think we chose that that direction, we want to help our borrowers soon in the process and obviously that seems to be working out for us and them.
I would say that the credit culture here is really sound and the policies have been have been very effective as many of you know we rewrote those policies a couple of years ago.
Well, obviously, we have grown that weve been sticking to our policies for the most part and they've been serving us well.
Mitch said, we did increase the provision.
I think we've just decided to take a conservative approach with the unknowns in the economy.
Good news I mean, as Mitch said, our deposits are up for the year not just from PPP funding almost all those funds have been obviously used by the borrowers and.
Attribute to the service of this bank coming the service levels. In this company have always been great and they seem to continue to get great. Greater So I think we're very blessed and that from that standpoint.
Now the number of new relationships are growing.
Opportunities are coming from the lack of service in the Big banks and then just generally a lot of referrals from existing clients. So.
Thats also early positive.
I think the other piece of that and I have stressed this before.
And what we're seeing now as we Scott I think through this this year a lot of new relationships of inform with our retail team and our lending teams and in the perfect World. They work together in unison to bring in relationships and we're starting to see some real success, there with joint calling and things of that nature. So I'm very pleased with that.
On the loan front.
Now good quarter I mean, we got back to kind of the average we've been averaging for the last six or eight quarters around 33 million units.
Yes, thats pretty good considering and there's about a six month positive I think in the economy for this first and second quarter. So we're happy about that I think I'm really happy about the new production is real granular that $33 million. If you take out our some of our classic car portfolio. Our loans, we made the classic cars the average loan size.
I was like $1.4 million I am I am happy with the granularity there.
So all in all I think we're moving in the right direction. The pipeline is strong for the fourth quarter and it's continuing to grow. So all that said im cautiously optimistic about the bank revenues profits deposits are certainly going in the right direction coupled with.
The return of the loan production.
I think we've also done a great job on expense management.
So with that I will turn it over Vanessa if you could open up the lines for questions, we weren't happy to answer them.
Thank you we will now begin the question and answer session. If you have a.
Question. Please press Star then one on your Touchtone phone and then question.
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Our first question.
Comes from.
Nick from Piper Jaffray.
Good afternoon guys.
Hey, how are you.
I'm doing well thank you so.
So you had some solid loan growth this quarter and I heard your positive commentary on the pipeline I appreciate as always the market updates included in the release, but can you give us a sense for the competitive dynamics in your markets, where youre seeing opportunity.
[music].
Yeah, you know.
And it's got it's interesting it's a little all over the board but.
I I would say that.
Various competition has always but there are banks that have.
Our pulling back on noticeably.
There Theres, one particular bank that's it.
It said in the market that they they pulled back their allies, there's others that are just.
Just I think kind of waiting this thing out. So we have had some nice opportunities there in that guidance that there's there's still a handful of local banks that are being fairly competitive but.
For the most part we've been we're seeing great opportunities and.
And I think that's that's all I can really tell you.
Great.
You had a nice improvement in the deferrals relative to last quarter I just wanted to make sure I got the numbers correct. Mitch did you say as of today, you're down to 17 loans on deferral for a total of $18.1 million is that right.
Thats correct.
Okay, Great and then what was the remaining amount expected to begin paying by the end of October.
Well initially there was at the beginning of the month it was $28.8 million was supposed to pay it back payments.
We are starting October of that based on that.
When I got right or left have been here 20.2 million have started paying already so that would leave $8.6 million that have payments do you do the math.
In the last couple of days or between now and the end of the month.
Perfect and the rebate a much.
Yes, and then after that's going to be November December but November December tended to be small amounts really October was the big piece, what I say, 75%, yes, so 75% of the deferrals.
Deferrals as of September Thirtyth, we're going to have payments in October and I'm I'm pleased to get to to get help October starting off show up.
Okay. That's great color were any of the remaining modifications disproportionately represented in the list of exposures you answer.
No no no.
Of the.
Of the exposure lifts that are lifted I don't think any of those had deferral.
That's good that's great and then just lastly, your total capital ratio at the holding company is up nearly 60 basis points from ended the year you continue to have strong internal capital generation. Despite those are the reserve builds can you help us think about your capital priorities and specifically in weight when you may revisit a buyback.
Yeah, it's not going to happen this year I just.
So.
We declared a dividend last night.
Typically it's a slam dunk, but had to do a little more support really the regulators are kind of keeping an eye on those things what are we using our capital for.
So I think we got to read this thing out first shared to you what's going to happen with Covance before we can start doing a buyback. It's it's hard because as you know our where we're trading versus book gets.
The cost sale and I'd I'd be lovely.
Love being able to buy it back by right now, but I just think it's prudent to be focused on our.
Focusing on.
The capital.
Thanks for taking my questions.
Sure. Thanks, Nick.
Our next question comes from Tim Coffey.
Your line is open.
Thank you afternoon everybody.
Okay.
Hey, Dave are met.
How soon do you think business marketing expenses get back to a normalized run rate.
Tim I don't know, if we did $33 million in the quarter.
I know you don't really need to mark.
Yes, it's hard because a lot of these event I mean, what we've started putting a little bit more out on these virtual type events sponsorships those things.
And it's it's still going to be sometime next year and that we're still finalizing our budget for next year. It's hard it's really hard to predict when thats going to come back but.
We're we're we're optimistic that.
By the second quarter, we should be sponsoring some more live activities.
No that all could come to a halt.
Things change here.
Okay and mission.
And Mitch since I got you can you run through the Pvp loan forgiveness data so far.
Yes.
Okay.
Walking into the year else another thing I tried to get updated.
[music].
We had 23 loans forgiven for about $1 million.
We have 49 more for.
$19.2 million that have been submitted to the SPD.
And then we've got 55 applications for just over $5 million that we've received from our.
Borrowers that were going through and.
Crossing the T's and review and before we file those with the Sps, but we expect that to be done fairly close. So if you add up the numbers the number of loans, that's roughly 30% of the loans have been forgiven or are in the process and then if you add up the dollars. It's like 38, 39%. So we're.
We're getting there.
And then the though do you have the weighted average yield on loans originated during the quarter.
Yeah. It was 4.44 and a half order for 4.56 to be exact Tim.
Okay. That's pretty this is pretty close to the yield if you exclude PPP on the total portfolio I think it was around 489.
Do you get the feeling that compression in the margin is waning.
Well you did talk a little bit about the competition.
It's it's there's competition out there, but it's not for years. So we're not seeing really compete as much on rates.
Im happy that were doing loans would that start workforce and we havent had to go down into the threes and they're not all it at.
4.5%, but theres theres enough that are in the mid force to two.
To really hold hold is pretty steady.
That's what I'm, hoping that you know that im hoping that continues as we get the PPP funds back I want to keep in mind that account and as you know there's not a whole lot. We can invest in the bond portfolio. So with the fact that I see some that pipeline.
Cut them kind of excites me.
Okay great.
And Dave we've been hearing from other banks. This selling season is that a lot of theory borrowers have kind of moved to the sideline kind of wait how things shake out in terms of the election, the resolution of the virus things of that nature.
You guys had a pretty good siri growth during the quarter was it just a function of you finding the right people to bring off the sidelines or just constant contact and they finally decided to make a switch.
Well I think it's been the constant contact for one two I talked a little bit about where the car.
The competition some of it's not as aggressive today, and that's probably because of the pandemic that some of them as you know because you know those being sent back. Some some are little loaned up to act I would say.
Or have Brendan.
So we're seeing I think we're seeing.
It's good end market stuff, we're seeing a little bit some of these investors are doing some things up in Reno Reno as a pretty hot market today, So we've seen a little of that as well but.
I really think and then.
Businesses, just staying in front of the people and being at the right time.
Okay.
And then the last last question for me in terms of the fires that we've had this summer and your footprint.
And if your operation has been impacted or your borrowers impacted.
No not at all as some closures there I'll have to ask a couple of days or so and center and convenience of folks haven't to two evacuated but it's unfortunately, it's becoming.
Okay.
Good people haven't figured out that really got their cars packed and ready to go.
Hi.
Yes, Okay. All right those are my questions. Thank you gentlemen.
Sure Ken.
There are no more questions at this time.
Okay, well hey, Thank you all and now we'll look forward to updating you at the end of the next quarter. Thanks again.
Thank you for that.
Thank you ladies and gentlemen. This concludes today's conference. Thank you for participating you may now disconnect.
Okay.
Thank you.
Yes.