Civista Bancshares Inc (CIVB) 2020 Q3 法說會逐字稿

Good day, and welcome to the Civista Bancshares, Inc. Third Quarter 2020 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.

I would like now to turn the conference over to Dennis Shaffer. Please go ahead.

Good afternoon. This is Dennis Shaffer, President and CEO of Civista Bancshares, and I would like to thank you for joining us for our third quarter 2020 earnings call.

I'm joined today by Rich Dutton, Senior Vice President of the Company and Chief Operating Officer of the bank; Chuck Parcher, Senior Vice President of the Company and Chief Lending Officer of 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 the future performance and financial condition of Civista 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 factors are discussed in the company's SEC 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, 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 the reconciliation of the GAAP to non-GAAP measures. We will record this call and make it available on Civista Bancshares' website at civb.com.

Again, welcome to Civista 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 $0.48 per diluted share and $22 million or $1.36 per diluted share for the 9 months ending September 30, 2020. This represents an increase in net income from 2019 of $136,000 for the quarter and a decrease of $3.5 million for the 9-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, or PPP. The make up of our income statement has shifted as well. The largest change on our income statement is an increase in provision for loan losses due to the economic uncertainty created by COVID-19, 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 $0.11 per share earlier this month, which represents a dividend payout ratio of 23%.

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 perform moving forward. This clarity, along with our strong capital position, allowed us to resume share repurchases. During the quarter, we repurchased 107,500 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 to 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 made up 12.7% of our average loans for the quarter and 7.8% year-to-date. At an average yield that approximates 3%, 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 9 months, noninterest income increased $3.7 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 noninterest 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 third quarter of the previous year. Similarly, the year-to-date gain on sale of 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 mortgages compared to $80.5 million in the previous year-to-date. Our mortgage pipeline remains very strong.

Other significant drivers of noninterest income were interchange fees and wealth management fees. Swap fee income was down for the third quarter, but is 339% higher year-to-date. Service charges have decreased compared to 2019 levels. We did see some rebound in service charges compared to the linked quarter, with an increase of $484,000 or 52%. $183,000 of the increase was due to reinstating several customer service charges that we suspended during the second quarter to provide relief to our deposit customers. Overdraft fees also increased $270,000 compared to the linked quarter.

While noninterest expense increased both during the quarter and the 9-month 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 each April, commissions attributable to the increased mortgage loan activity and overtime associated with commercial loan modifications, increased mortgage activity and our participation in the SBA 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 $124.4 million in approved, undrawn construction loans at September 30.

In a normal year, we would probably be disappointed with our loan growth. However, considering the effects of the pandemic, we are 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 quarters. However, we remain optimistic.

With respect to PPP, we originated just over 2,300 loans for $259.1 million, resulting in deferred fees of $9.9 million. The SBA recently provided guidelines for abbreviated forgiveness of PPP loans with balances less than $50,000. At September 30, we had 1,368 loans totaling $26.3 million that should qualify for the SBA's abbreviated forgiveness application. To date, we have submitted 23 applications totaling $8.1 million for forgiveness and have received proceeds from the SBA paying off 4 of the loans. While this remains a more labor-intensive effort than we had hoped, we are confident in our approach and are proud of Civista's 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 26.5% of our commercial loan portfolio at June 30. 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 30, 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 and $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 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 mention 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 loan loss model. As a result, we recorded $2.25 million provision expense for the quarter and $7.9 million 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%. 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 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 CECL, and we'll 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 from the PPP loans were deposited. In addition, over $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 31.

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 carry a low rate of 35 basis points, and also provide for advantageous regulatory capital treatment of the PPP loans.

In spite of the challenges in the current environment, we are pleased with another quarter fueled by solid core earnings. Throughout today's comments, I hope I have conveyed how proud I am of the great team we have here at Civista and the quality customers that have chosen to work with us. We couldn't have one without the other. Our people have accomplished much through the first 3 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 will continue to test the banking industry and the larger business world, I am confident that Civista is well positioned with a solid balance sheet, strong capital levels and a diverse revenue stream to meet the challenges that lie ahead.

Thank you for your attention this afternoon. And now we'll be happy to address any questions that you may have.

(Operator Instructions) Our first question comes from Terry McEvoy from Stephens.

The first question I have is on the loan modification, the $52 million, which are down nicely. Are those loans still in round 1? Or is there a segment that has moved into, what I'll call, round 2?

The majority of those -- it's Paul Stark. The majority of these, about $43 million, are still in round 2, and they're going to run out here in October. About $8 million of them have gone on and had further deferments and mostly interest only.

And Terry, most of the $259 million in round 1 were 90-day extensions.

Great. And then as a follow-up question, the 3.84% million core net interest margin, what are your thoughts on the fourth quarter and heading into next year, just as you face this low rate environment and potentially some pressure on your asset yields?

Terry, this is Rich. And I think like we said last quarter, most of the compression that we were going to see over the next number of quarters happened during the second quarter. We'll continue to probably battle some contraction. But if -- the way we look at it, the margin from the second quarter was 3.61% and the margin from the third quarter was 3.44%. But if we back out the impact of those PPP loans and 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 throw a lot of numbers at you. But what that equates to is our kind of normalized yield for the second quarter was 3.83%. Our normalized yield from the third quarter was 3.84%, actually expanded by 1 basis point. Maybe kind of surprised us a little bit, but what we said 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 the rates where they are.

Yes. And then Terry, as Rich said, I think we did bear the run of that in the second quarter. Remember, the rate reduction was in March. We bear 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 and the first quarter. It is very competitive on the lending side. We have widened spreads and things like that, but it's still competitive. And we are trying to protect margin, but we do need to get -- we do want some growth, too. So we're trying to balance both of those things.

Our next question comes from Michael Schiavone from KBW.

To lead off, you guys highlighted the market showing strength. So can you just discuss where you see opportunities for loan growth? And how the pipelines are looking?

Well, I can tell you, Michael, that -- this is Chuck, by the way. I can tell you pipeline going into the fourth quarter this year as compared to the fourth quarter last year is $55 million higher. So we feel good about where we're headed in the fourth quarter. I think in Dennis' comments, he mentioned that we've got about $124 million of unfunded construction to be drawn here over the fourth quarter and first quarter of next year. So 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 from a development perspective since the COVID took place. We've got some really nice projects in the Cleveland area, the Dayton area, the Cincinnati area. And we've had -- and we have had loan growth in some of our, what I would call, rural areas as well. So we're getting contribution from all the regions, and feel really good about where we're going in fourth quarter, barring any really big setbacks from the COVID.

And Michael, I would also say, I think we're doing a really good job of dealing with the right people and the right -- we have a lot of long-standing relationships. Our lenders, in a lot of our markets, are seasoned veterans, banking veterans, and they've dealt with these people through numerous downturns in the economy. So they've dealt with -- some of those 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 high-risk industries like hotels right now and health care facilities and restaurants, those are industry types that we're not lending to, we still think we'll get some good loan growth because of these long-standing relationships that many of our lenders have with some of these customers within our footprint.

And quite frankly, Michael, the other thing that we've got a little bit of advantage of right now is with the CMBS market slowing down, some of our larger projects that we would have thought that -- would have went to the permanent market by now, have stuck on the balance sheet. That has helped from a balance perspective as well.

Okay. And on fee income, year-over-year growth has been quite strong. Can you just talk about how sustainable this fee income run rate is?

Well, I think for the near term, in the -- at least early part of next year, the mortgage banking piece is going to stay relatively strong. Those pipelines are pretty full. We've had pretty good swap income for the year, up substantially. We've widened spreads there, and that slowed that activity a little bit down in the third quarter. But if the CMBS markets are not active, I do think that we can continue to do some good volume on the swap income side.

And some of our service charge income, it was down in the second quarter because we had kind of suspended some of that. That's back. And I think interchange activity may be up some just because people are using their debit cards and things like that more. So I think it's sustainable. We've really had a focused effort on trying to increase that noninterest income over the last 3 or 4 years, and we've 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. Many of your peers have announced plans for branch or office cost savings plans. Has the Board reviewed anything like that within the footprint to consider similar cost initiatives?

Yes. I think 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 a contract to upgrade our digital banking platform, and that's a platform that will enhance our digital offerings for both our commercial and our retail customers. So I do think that we're going to see -- continue to get some expense reductions. But for us, part of that, at least, will be reinvested back into the company.

Our next question comes from Nick Cucharale from Piper Sandler.

Just to piggyback off the loan commentary. Can you give us a sense for the competitive dynamics in your market? Has the competition increased with the modifications coming down across the industry?

It has increased. Chuck again, Nick. Definitely, the rates have increased. But I will tell you, we've probably walked away from a lot more deals than we have in past years. Dennis mentioned that we're really, really trying to hold margin as much as possible. And when we get down to certain rates on certain transactions, especially if we can't get any other ancillary income or fee income from those transactions, we're letting more walk than we ever have.

Like I said before, though, we feel good about where the pipeline sits at right now and feel like the fourth quarter, we feel good about. Projecting out past that is going to be difficult until we see how this COVID plays out from a growth perspective, but I do feel good, at least looking into the fourth quarter.

And Nick, just as -- I'd 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 deals, too. So I think that only intensifies the competition.

And from a marketplace perspective, I would tell you, Columbus seems to be the most competitive right now. We've had a lot of different competitors move into that marketplace over the last 3 to 4 years. I think people are still trying to inch out some loan growth, make those investments pay off. So we're seeing a really, really competitive rate environment down there. And then we're also seeing the opportunity in the metro markets, but that seems to be the one market where it seems very frothy, from a rate perspective.

Okay. And then just a follow up on the improvement in deferrals. It was helpful that you broke out the loan types in the release, but were any of the remaining modifications disproportionately represented in the especially affected industries you've run through in the past? Or are they pretty dispersed?

This is Paul again. It's pretty dispersed. Obviously, we talked about hotels was probably the biggest portion of it. And then it's pretty distributed from there, a couple of restaurants. But I think, again, that discretionary -- or that leisure-type activity, is really where, I think, we've seen the most impact. But it's significantly lower than it was the first round and even a lot of that's going on.

Yes, 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 going down, Nick. I mean the COVID expenses are a big piece, although I think they did kind of curtail during the quarter. I think net, we were right at about $100,000 of COVID-related expenses. But certainly, the travel and education and some of those expenses are down, too. I think if you were looking for a run rate going forward, and I'd hate to project much past the end of the year, 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 lastly, with your total capital ratio at nearly 16%, you continue to have strong internal capital generation despite the reserve builds. Can you help us think about your capital priorities? And your thoughts on continuing to utilize the buyback?

Yes. I think -- we think that's a great way to deploy it right now, particularly when we're trading under book value. And any of those shares are highly -- that we're buying back are highly accretive as well. So we think that given our comfort level right now with our loan portfolio, that, that activity most likely will continue. So we feel very comfortable there. 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.

Our next question comes from Russell Gunther with D.A. Davidson.

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?

Russell, this is Rich. And we say every quarter that it's going to be hard to do it, and it seems like every quarter, we squeeze out another basis point or 2. But the really only significant lever we've got left to pull is on the CD, the time deposit side, and we don't have a ton of time deposits. But certainly, those are 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 going to be hard to reduce funding near-term costs.

Okay. And then on the investment security side, do you anticipate the yield on those remaining relatively stable going forward? Or any type of lag compression there?

I think, again, what we saw earlier in the year is probably what we're 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 into taxable munis than non-taxable munis, but the yields have 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 for the next several quarters.

Got it. And then just one last question on the deferrals. I was just wondering if you're able to share an updated trajectory down into the fourth quarter from the 3% today?

Yes, it's really hard -- this is Paul Stark. It's hard to say. There's no question we've seen the migration of credits return -- getting stabilized and returning back to payments. Over time here, we get into the winter, especially some of the seasonal businesses, I think we're going to see some additional changes. But I don't think we're going to see a huge increase. We've been very fortunate in our portfolio. Dennis mentioned, the strength of our borrowers and to be honest with, we've not seen any defaults or any bankruptcies yet in our book.

Our consumer portfolio has been very good. I mean we have only about 5 deferrals in that whole book. So knock on wood, we'll continue to be fortunate and keep working it. But I don't think we're going to see a huge spike or anything like that.

Yes. And Russell, the wildcard is the stimulus. Is there another round of stimulus coming? And they've been targeting some of these higher risk industries and stuff. So if that comes, maybe there's a chance that, that -- those numbers come down a little bit more. If it doesn't come -- 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 where our first round level was. And again, we thought we were fairly aggressive. Anybody that 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 pleased with where we stand as far as deferrals today.

Our next question comes from Joe Plevelich with Boenning and Scattergood.

Just a quick question. You talked about how you did kind of like automatic downgrades or anything that was more than a 90-day modification. Can you walk me through some of those numbers again? And what, if any, kind of incremental downgrades we might see here over the next couple of quarters?

Well, let me -- as it is, Dennis mentioned, we did the first deferral without doing a lot of analysis. Second round, we gathered a lot of information because historical information was not really pertinent, given the shutdowns. But as we looked at these, if they needed a second deferral and that set reduced significantly. I think we did 723 the first round down to, I think, just over 100 the second round. And based on that, we would downgrade it.

If their projections on cash flow was not returning back on the right trajectory, then we would downgrade it again. So we're getting back towards our -- and really integrating about a normal risk rating process. So -- and then I think we're going to continue to see changes. We're monitoring this thing as close as we can on a credit-by-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 growth we needed to pay attention to gets smaller as we go.

Yes. And Joe, I would not say at this point, we feel pretty confident there's no risk of loss right now from where we stand. We -- Paul has been using the term in some of our management meetings, there's more risk of default than risk of loss. We feel that we're fairly well secured with a lot of those loans. We got good sponsors behind them. Clearly, COVID- and pandemic-affected. And so right now, we really feel that -- we felt it was appropriate because, obviously, there's more risk today, during this pandemic, than we had 6 months ago or 12 months ago, certainly a year ago. So we feel it's appropriate to grade it appropriately, downgrade it, recognize it, keep a close eye on it. But again, I think, from our standpoint right now, there's more risk of default than risk of loss.

And then did you have a specific number of criticized and classified, 9/30 versus 6/30?

Yes. We did, I think in Dennis' comments, special mention really is what most of the increase was. But we were at about -- yes, 6/30, which was prior to the second deferral round, where we gathered the information was about $15 million, and it's up to $117 million as of 9/30. And virtually all of those were -- those that -- where we gathered new information and as Dennis said, loss given default, in our view, [it varies, obviously].

This is Rich. Most of those were -- or maybe all of those were the automatic downgrades. I mean those are all -- we're talking special mentions there. So if there's going to be a criticized asset, those are the best kind of criticized assets to have.

(Operator Instructions) Our next question comes from Kevin Swanson with Hovde Group.

Sorry to keep going on these deferral numbers, but I was just curious for your perspective on LTVs. Assuming that their -- the values are at the origination date, could you comment on what the impact of the cash flow disruption has done to some of the valuations and particularly in the hotel portfolio? Or maybe just anything you're seeing in the marketplace to maybe update the value of those properties.

Well, obviously, if you have a disruption income for a long period, it's going to affect your values. Right now, I think most of the appraisers are looking at these things as temporary disruptions. And really, we're not seeing a huge fall off in values. And at least that's based on the values we've gotten in the last 6 months. So I'm sure that, over time, that may change. We -- again, we're not ordering new appraisals yet. So that's kind of hard to gauge. But for the most part, our hotel book is fairly low. I don't have it in front of me, but I want to say, 58%.

53%, I think.

Well, that's an older number.

That was an older -- okay.

Yes. I've got an updated one, but that's where I think we stand right now. So I think we're in pretty good shape. The other bucket of loans that had some stress early on was a retail-related commercial real estate property. A number of the tenants that asked for deferrals, but most of those are returning to payment structures. And most of them going back to the full payments that the tenants are now paying.

And Kevin, I would say on new deals, at least that we're putting on the books, appraisals are coming in pretty much. I think the values are being -- they're holding. So we're not seeing -- like the last recession, where going in that, we saw big drops in real estate values. We haven't seen that on the new deals going on the book, and we haven't seen that. So we've had customers -- commercial customers sell properties. And we -- they've gotten kind of the price they wanted to get. So we haven't seen that big drop like we did during the last recession. And then the other big difference, obviously, is the housing market. Those real estate values are really strong. And during that last recession, they went in the tank. So to me, that's one of the biggest differences between this pandemic-induced -- this COVID-induced recession and the last recession.

Yes, Kevin, we're -- this is Chuck. We're watching those cap rates pretty close as those are coming in. Cap rates have really not moved much whatsoever. In fact, in a few things, I think it would drop little bit just because of the drop in interest rates over the last 6 months. So values are holding.

And the PPP program really helped, I think, the retail investment guy. Like Paul mentioned earlier, we had some tenants that came in who were asked for some forbearance on the rent to some of our landlords, our borrowers. And once the PPP funded and those values could be specified, they could use that for rent. That helped and that went a long way, too. And we have very few property owners right now that have people on deferral as far from a rent perspective.

Okay. That's all really helpful. And then just finally for me, could you maybe update us in terms of the PPP and new clients gained through that? Any kind of traction you've had on that end?

Well, we've got -- we're tracking that in a couple of our places, but we've got a little over 300 new opportunities via the PPP 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 been significant, especially on the deposit side. Obviously, it's a little slower to move more from a lending perspective. But we feel really good about the new opportunities we've gotten, and almost all those opportunities have come from the major regionals with the national banks and looking to get back into community banking.

Anything else, Kevin?

No. That's it.

This concludes our question-and-answer session. I would like to turn the conference back over to Dennis 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 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.