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spk03: Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Central Pacific Financial Corp Third Quarter 2020 conference call. During today's presentations, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. This call is being recorded and will be available for replay shortly after its completion on the company's website at www.pb.bank. I'd like to turn the call over to Mr. David Morimoto, Executive Vice President, Chief Financial Officer. Please go ahead, sir.
spk06: Thank you, Greg, and thank you all for joining us as we review the financial results of the third quarter of 2020 for Central Pacific Financial Corp. With me this morning are Paul Yonamine, Chairman and Chief Executive Officer, Catherine Ngo, President, Arnold Martinez, Executive Vice President and Chief Banking Officer, and Anna Hu, Executive Vice President and Chief Credit Officer. We have prepared a slide presentation that we will refer to in our remarks today. The presentation is available in the investor relations section of our website at cpb.bank. During the course of today's call, management may make forward-looking statements. While we believe these statements are based on reasonable assumptions, they involve risks that may cause actual results to differ materially from those projected. For a complete discussion of the risks related to our forward-looking statements, please refer to slide two of our presentation. And now I'll turn the call over to Paul.
spk07: Thank you, David, and good morning, everyone. As always, we appreciate your interest in Central Pacific Financial Corp. state of Hawaii, as well as our company, continues to manage well through the COVID-19 pandemic. While the state of Hawaii experienced an uptick in infections in the late summer, which led to a second government-mandated shutdown, the infection rate has recently dropped with the latest seven-day average number of infections and positivity rate of 54 and 2.2 percent, respectively, as of October 26th. After several delays to initial targeted dates, the state of Hawaii reopened out-of-state tourism on October 15th for visitors that provide evidence of a negative COVID-19 test. This is a key step in the process of Hawaii's economic recovery. In the first week after reopening, we've been pleasantly surprised by the daily air arrival numbers which have been in the 5,000 to 8,000 range per day, compared to less than 2,000 per day since March and 30,000 per day pre-pandemic. Additionally, on October 22nd, Oahu made progress by moving to Tier 2 of its recovery plan as it met the requirement of having the seven-day average COVID cases at less than 100 and positivity rate of less than 5%. Here, too, allows Oahu to further reopen certain parts of the economy. At Central Pacific, we continue to push forward with our key Rise 2020 strategy, while at the same time prudently managing through the pandemic. In August, we launched our new online and mobile banking platforms, which includes many industry-leading features and functionality. The new digital platforms have been very well received by the market with an Apple mobile app rating of 4.8 out of 5. Additionally, we continue to replace our entire ATM network in full-function machines and implemented this quarter an 8 p.m. Hawaii time cutoff for same-day ATM deposit processing, the latest cutoff time of all banks in the state. The revitalization of our building headquarters is progressing well and is on track for an opening date in January 2021. We continue to thoroughly review and regularly monitor our loan portfolio to appropriately manage the credit risk in the pandemic environment. During the third quarter, our total balance of loans on payment deferral decreased by nearly 50% as a significant portion resumed payment. At the end of the quarter, our loans on deferral was down to only 6% of total loans, excluding PPP loans. Last week, we announced that we successfully completed a $55 million private placement subordinated note offering. We believe this will also allow the bank to continue to support our customers and community while also providing future capital flexibility. I'd like to now turn the call over to Catherine to share more about our pandemic preparedness plan and the work of our CPB Foundation. Catherine.
spk10: Thank you, Paul. Our pandemic preparedness plan continues to be in place and we have not had any disruption in our business. We currently have 28 branches open to fully serve our customers. Four branches remain temporarily closed due to the pandemic. During the third quarter, we consolidated three in-supermarket branches into our larger neighboring branches, as the in-market branches were too small to allow for adequate social distancing. We are on track with consolidating the fourth previously disclosed branch in the fourth quarter. Much of our back office teams continue to work flexible remote schedules and all employees are required to complete a daily online health questionnaire prior to starting each workday. We believe the actions taken will continue to enable us to provide a safe environment for both our employees and customers. The CPB Foundation continues to be active in helping the community with relevant and timely programs. Third quarter, our foundation was one of the two presenting sponsors of the Made in Hawaii Festival, featuring more than 200 Hawaii small businesses and 10,000 products. The festival, previously held at our local Honolulu Arena, pivoted quickly to become an online marketplace this year, attracting over 100,000 unique visitors over the three-day launch weekend. contrast to the 60,000 attendees for the festival in person that recorded in earlier years. The online festival enables struggling small businesses to sell their Hawaii-made products year-round to a wide base of local, national, and international shoppers, bringing in much-needed revenue during the current challenging environment, and is a good step forward to economic diversification through exporting. We are glad that our foundation was able to provide support towards this successful initiative. I'd like to turn the call over now to Arnold Martinez, our Executive Vice President and Chief Banking Officer. Arnold?
spk05: Thank you, Catherine. In the third quarter, we were able to grow our loan portfolio by $27 million, despite the tough operating environment. Growth was broad-based, including residential mortgage, home equity, commercial mortgage, and construction loans. Growth in these loan categories was partially offset by declines in our consumer and C&I loan portfolios. Driven by a record low interest rate environment, our residential lending team continued to outperform with record levels of production, resulting in $4.3 million in mortgage banking income for the quarter. It was more than double the income from the same quarter a year ago. During Q3, Our bankers continue to engage our business customers that we assisted through the Paycheck Protection Program. Most importantly, we continue to advocate for the broader business community impacted by COVID-19. We recently launched our PPP Forgiveness Portal and have begun the process of assisting our customers applying for forgiveness from the SBA. As expected, as businesses spend their PPP funding, saw a quarter-over-quarter decline in our core deposit balances of $109 million. Despite that, our core deposit balances remain up over $650 million year-to-date. Additionally, our cost of total deposits declined by seven basis points, 13 basis points. Providing best-in-class digital technology remains a key priority for us. We launched our new consumer mobile platform and are nearly complete with the rollout of our new ATM fleet, as Paul mentioned earlier. We are seeing strong adoption and utilization of both digital channels. Our ATM deposit volume has substantially increased from a year earlier, due primarily to the enhanced deposit functionality now available to our ATMs, and deposit volume has also increased to our new consumer mobile platform from a year earlier. As we move into the fourth quarter, our bankers will continue to remain vigilant, given the tough operating environment, but laser-focused to support our customers while exploring and engaging new opportunities and our customer base during this unprecedented time. Now I would like to turn the call over to Anna Hu, our Executive Vice President and Chief Credit Officer, to provide details on our credit and portfolio risk management activities. Anna?
spk09: Thank you, Arnold. At September 30, the loan portfolio totaled $5.03 billion with 54% consumer and 46% commercial. During the quarter, we continued monitoring the loan portfolio and provided support to our customers as they navigated through the uncertainty in the marketplace. We assisted our customers in providing a second loan payment deferral, if needed, and we were pleased to see a significant number of borrowers resume their monthly payments. At quarter end, the total balance of loans on payment deferrals declined to $291 million, or 6.5% of our total loan portfolio, including PPP balances. Our re-deferral rate was 31% and was primarily driven by consumer, small business, and residential loans. These loans were initially granted a three-month deferral, followed by a second three-month deferral. While a significant number of customers have returned to making loan payments, we expect some consumer customers will require a loan payment modification due to the continued elevated unemployment rate. In the commercial and commercial real estate loan portfolio, we provided loan payment deferrals for $133 million in total loan balances. The two highest exposures by industry is real estate and rental and leasing, totaling $47 million or 1% of the total loan portfolio, excluding PPP balances, and food service, totaling $46 million or 1% of the total loan portfolio, excluding PPP balances. The majority of the loans in the real estate category are supported by low loan-to-value ratios and in the food service category are supported by owners with good liquidity and access to capital. We expect some of our borrowers will need a loan modification at the end of their second loan payment deferral, which will be evaluated on a case-by-case basis. Loan payment deferrals for our high-risk industries total $66 million, or 1.5% of the total loan portfolio, excluding TPP balances. Additional details on our loan payment deferrals can be found on slides 20 and 21. During the quarter, criticized loans increased by $34 million sequential quarter to $197 million, or 4.4% of the total loan portfolio, excluding PPP balances. Special mention loans increased by $33 million to $149 million, or 3.3% of the total loan portfolio, excluding PPP balances. And classified loans increased by $1.5 million to $48 million, or 1.1% of the total loan portfolio, excluding PPP balances. Loan downgrades were the result of our continued assessment of borrower risk based on the BAR's near-term strategy and outlook, management strengths and actions they've taken, overall financial conditions, and external funding and support. Approximately 12% of special mention balances and 5% of classified balances also receive PPP loans. Additional details on loans rated special mention and classified can be found on slides 22 and 23. Overall, we continue to believe our proactive and disciplined approach to credit and our diversified loan portfolio will allow us to remain strong through these unprecedented times. I'll now turn the call over to David Morimoto, our Executive Vice President and Chief Financial Officer. David.
spk06: Thank you, Anna. Net income for the third quarter of 2020 was 6.9 million or 24 cents per diluted share. Return on average assets in the third quarter was 0.42%, and return on average equity was 4.99%. Our earnings continue to be impacted by higher provision for credit loss expense due to the current COVID-19 pandemic. Importantly, the third quarter increase in our provision was largely driven by the economic forecast and not an increase in actual loan losses. Additionally, our pre-tax pre-provision earnings for the third quarter was $23.7 million, which increased slightly from the prior quarter. Net interest income for the third quarter was $49.1 million, which remained relatively flat on a sequential quarter basis. Net interest income included $3.4 million in PPP, net interest income, and net loan fees. The net interest margin decreased to 3.19% in the third quarter compared to 3.26 in the prior quarter. Decrease was due to lower yielding PPP loans as well as the lower interest rate environment. The net interest margin normalized for PPP was 3.26 in the third quarter compared to 3.31 in the prior quarter. Third quarter, other operating income totaled $11.6 million compared to $10.7 million in the prior quarter. The increase was primarily due to higher mortgage banking income of $0.8 million. Additionally, in the current quarter, we reinstated certain service charges that were temporarily suspended due to the pandemic. This resulted in an increase in service charges on deposit accounts and other service charges and fees. Other operating expense for the third quarter was $37.0 million, which was an increase of $0.5 million compared to the prior quarter. The increase was driven by increases in several expense line items and also included branch consolidation costs of $0.3 million related to the three in-store branch closures previously noted. Net charge-offs in the third quarter totaled $1.3 million compared to net charge-offs of $2.9 million in the prior quarter. The charge-offs primarily came from the consumer loan portfolio and the CNI portfolio. At September 30, our allowance for credit losses was $80.5 million, or 1.79% of outstanding loans, excluding PPP loans. This compares to 1.50% as of the prior quarter end. The efficiency ratio remained relatively steady at 60.9% in the third quarter compared to 60.8% in the prior quarter. The effective tax rate increased to 24.3% in the third quarter due to lower tax exempt bank owned life insurance income. Going forward, we expect the effective tax rate to continue to be in the 24% to 26% range. Our liquidity and capital positions remain strong, and we continue to perform robust stress testing. The recently completed subordinated note offering strengthens our capital ratios, which further allows us to support our customers and the community during the pandemic and positions the company well for the future. Subordinated notes are considered Tier 2 capital and is anticipated to increase our CPF, total risk-based capital ratio, by approximately 120 basis points. Our board declared a quarterly cash dividend of 23 cents per share, which will be payable on December 15 to shareholders of record at the close of business on November 30th. Now we'll return the call to Paul.
spk07: Thank you, David. In summary, Central Pacific continues to make positive forward progress on our strategies, while at the same time manage well through the COVID-19 pandemic. We have a solid financial, credit, liquidity, and capital position to enable us to weather the storms. As the economic recovery gradually begins, we remain committed to providing support to our employees, customers, and the community. On behalf of our management team and employees, thank you for your continued support and confidence in our organization. At this time, we will be happy to address any questions you may have. Thank you.
spk03: We will now begin the question and answer session. To ask a question, you may press F3 then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key. To answer your question, please press F3 then 2. Our first question comes from Jackie Bolin with KBW. Hi.
spk02: Good morning, everyone. I wanted to start off with balance sheet liquidity management. You know, against other trends that we've seen, you did a really great job at managing your cash balances in the quarter. And I just wanted to look going forward and see if you think there's any more PPP runoff or other liquidity runoff that you expect. And if you don't see that and you do start to have some sort of mismatch perhaps between loan and deposit growth, understanding you've got PPP running off, what liquidity management plans are for that?
spk06: Hey, Jackie, it's David. Yeah, you know, I think right now the outlook is that we hope to have the PPP loan forgiveness process. So the reduction in PPP loan balances, you know, closely mirror the rundown on the PPP balances in our deposits. So that's the current outlook, especially with the recent announcement on accelerated forgiveness for small dollar PPP loans.
spk02: Okay. And so... I guess to the extent that you may have excess liquidity, if that does happen, are you looking at securities reinvestments or would you look to keep that in cash?
spk06: Right now the plan, Jackie, is to keep the investment portfolio roughly at its current size, so about $1.1 billion. To the extent we have excess liquidity, we are optimistic. that will see some debt loan growth as the economy starts to rebound. So we are looking cautiously optimistic to see some stronger debt loan growth outside of PPP loans. And then obviously to the extent that we do end up with excess liquidity, it could be put to work in the investment portfolio.
spk02: Okay. So then how are you understanding where you're coming from from a liquidity management position? How are you thinking about the forward margin then just in terms of pressures you might have on earning asset yields? And I know that there's maybe a little bit but not a ton of room to continue to drop down deposit costs.
spk06: Yeah, that's the challenge for the banking industry is the net interest margin all goes So currently we're projecting a net interest margin range in the 310 to 320 range for the next couple of quarters. And that incorporates the sub-debt offering. And it assumes a conservative reinvestment of the sub-debt proceeds. So that's currently assumed to go into investments. So to the extent that we do see some stronger loan growth, that would help. So it incorporates the sub-debt offering, and it also incorporates some continued core net interest margin pressure as a result of the rate environment that you referenced, Jackie.
spk02: Okay. And then looking at the... Sorry, I'm getting a little bit distracted. Hopefully you can hear me. Poor loan yield versus where new generation was coming on. So I'm looking at the loan yield XPPP, and thank you for the data to be able to calculate that. Where are you seeing new origination loan yield versus the portfolio?
spk06: Jackie, in the third quarter, new loan origination yields were roughly 3%. Yeah, I will say that that new loan origination yield is obviously very sensitive to the loan mix. So it does bounce around a little depending on the mix of new loans in a particular quarter. But on the third quarter, it was roughly 3%.
spk07: Jackie, this is Paul. We're going to have to see how, you know, with the opening of tourism, you know, what the implications will be to the economy. And, you know, we're trying to be very cautiously optimistic, and we're hoping that, you know, there will be more investments in general and more demand. And we're hopeful that, you know, that will show up in net interest margin over time.
spk02: Okay, great. Thank you both for all the added details to some technical questions. I appreciate it.
spk04: Sure. Thank you.
spk03: The next question comes from.
spk08: Hey, good afternoon, everybody. Or good morning rather. Um, just following up on the deposit question. Do you, do you have an estimate for how much PPP deposits are still sitting in deposit accounts and haven't been spent? And then just how, how successful have you been thus far in migrating the new PPP clients to the bank? Um, and just how deposits are trending and loan growth is trending early in the fourth quarter.
spk07: David, before we respond to that, can you hear us okay? We're having some audio problems.
spk08: Yeah, I can hear you.
spk07: Okay, good. I'm going to have Arnold Martinez, our CBO, to respond to that.
spk05: Arnold? Good morning, David. As I mentioned earlier, deposit balances decreased in the third quarter. as businesses started to spend their PPP loan proceeds. So to your question, our expectation is that we're going to still have elevated deposits through the next few quarters as the businesses spend the dollars. But we have made really good progress in being able to engage and convert many of the customers that we assisted on the PPP with to the bank with operating accounts. It's really difficult at this point to really determine what the net amount is going to be just because we have inflows and outflows, obviously. But at some point in the future, we probably will be able to provide provide a little bit more color on that, Steven.
spk07: David, you know, there were well over 2,000, you know, new customers basically through the PPP process. And Arnold and his team are doing a great job, you know, converting many of them to, you know, become, you know, ongoing customers of the bank. And we have some pretty good successes early on, and we're still working on it.
spk08: Okay. That's helpful. And then just kind of taking your commentary about hoping for, you know, for some loan growth as the economy recovers. I mean, we've got, you know, the reopening started. Things are trending a bit better than expected early on. Just curious what your thoughts are on the pulse of the local economy, how your pipeline's trending, and just, you know, any updates on what you're hearing from clients and customers. Sure.
spk07: You know, so we still see a fair amount of strength in what I would call the non-tourism sector, especially around construction. You know, I mean, we had such a vast shortage of housing even before COVID, and that continues. So for many of the housing developments that are coming online, I mean, it's a very robust market. And we're quite pleased of the fact that we continue to be a lead takeout lender on a lot of these large housing projects. At the same time, the military sector continues to be very robust with a lot of new investments by the federal government and the Department of Defense here in Hawaii. So that's ongoing. Clearly, the reservations and the concerns are somewhat tacked on to the tourism sector. And with the opening on October 15th, if we don't see a huge spread on COVID and we can continue to welcome more tourists in here, by tourists meaning investors as well, I think we should be able to expect a gradual uptick on opportunities that's tourism related as well. That would fare very well for us.
spk08: Okay. That's great, caller. I appreciate that. And then just the last one, you guys have done a great job managing expenses in the face of these revenue headwinds. Just curious whether there's anything more one-time in nature in this that kept it lower and whether this is a good expense run rate going forward and then You know, whether the new digital platform, I mean, that's a huge initiative for you all, I know, just whether there's any efficiencies or any potential cost savings coming from that as we go forward.
spk07: Well, you know, the digital platform, you know, David already is, I think Arnold and David touched on, You know, we're seeing dramatic change of consumer behavior today. You know, a lot more mobile deposits, a lot more usage of the ATM. You know, and definitely people, you know, having quite an affinity to our new mobile platform, and we expect that to continue. We're going to be following that closely as to, you know, what the implications of changing consumer behavior and the effectiveness of our digital platforms for us to continue to look at our branch network. As Catherine touched on, we closed three in-store branches, and we're going to continue taking a hard look at what else we could do while not inconveniencing our customers. So that will probably be something out there, but we don't have anything on the table today, but we're going to take a hard look at it. Okay.
spk08: Thanks, everybody.
spk07: Thank you, David.
spk03: The next question comes from Andrew Mish with Piper Sandler.
spk04: Hey, good morning, everyone. You know, just want to touch on credit here. Show a little bit of increase in criticized loans, but even that now withstanding, they're still very low as a percentage of the portfolio. And you did have a little bit of an increase in the provision here. It seems like that's related to those couple commercial borrowers that you mentioned. But, I mean, how are you looking at the allowance from here? You've certainly built the reserve nicely this year as you adopted TESOL and just with some of the qualitative and quantitative overlays. But do you think there's more reserve building to be done? Or do you think this is kind of a good level where it could kind of plateau for a while as we move through and the economy rebounds?
spk06: Andrew, it's David. We feel good. We feel good about where we feel we're appropriately reserved as of 9.30. The outlook going forward is going to be a function of the economy, the economic forecast, the reopening of tourism and the local economy, and net charge-offs and loan migration. we feel we're appropriately reserved at 930. And then to the extent that things trend positively, then the reserve coverage level could come down or vice versa. If they were to go the other way, we would be directionally consistent with that. So it's hard to give you a precise answer other than to say it's going to be directionally consistent with what we see in the economy and the credit portfolio.
spk04: Okay, understandable. On the deferral slide in the presentation, just reference the commercial mortgage, construction, C&I loans that expect 25% to resume regular payments here this quarter. What are the other 75% telling you? How do they feel about their situation? Do you think they may need to come back and need more deferral time as we move into next year. Yeah, just curious what the tone of those borrowers is right now.
spk10: Anna? Okay.
spk09: Hi, Andrew. This is Anna. Yeah, so, you know, I think in our residential, our commercial real estate and our C&I book, we are seeing very positive downward trends in customers moving back to payment. Where we're really focused on is probably the consumer Again, the unemployment rate in September was about 15%, and so there is some uncertainty around that book that we continue to monitor, to watch, and then to actively work with our customers as well to provide assistance.
spk04: Okay, thanks. And then just on the balance of PPP loans that are remaining, or I guess all of them, What's been the sense that you guys have gotten from the SBA? It sounds like the process is going pretty slowly. But in speaking with their customers, how long do you think these loans stick around on the balance sheet before they're repaid and forgiven?
spk05: Yeah, so Andrew, this is Arnold. So, you know, as I mentioned earlier, we opened our portal just recently. And I'll just give you kind of a flavor. You know, as of October 26th, we had... 76 loans in our pipeline totaling $20 million submitted to the SBA for forgiveness. And we've had thus far four loans for $158,000 approved by the SBA. Our expectation is that we're probably going to see most of the forgiveness happen in 2021 just given what we're seeing as far as the turnaround times and just the activity that's coming through our forgiveness portal.
spk04: Okay. Thank you. That's a good caller. I appreciate the answers. I'll step back. Thanks.
spk03: Once again, if you have a question, please press asterisk then one. The next question comes from Laurie with ComposePoint.
spk01: Yeah, thanks. Good morning. Just wanted to stay with Andrew's question on PPP. Can you just remind us, as of September 30, what the net processing fees are remaining on your PPP book?
spk06: Hey, Laurie. It's David. So the total net processing fees were roughly $19 million. And as of 9-30, we still had roughly $15 million to be earned.
spk01: Perfect, $15 million. Okay, great, thanks. And then can you, and David, maybe this is a question for you or for you, Anna, can you give us a little bit of color on the two commercial credits, what types they were, et cetera?
spk10: Hi, Lori, this is Catherine. Are you talking about the commercial credits in non-performing?
spk01: Yes, I'm sorry. The two commercial relationships totaling $15 million that, you know, you all have said you don't expect to see further loss, but obviously we have movement there. Just wondered what they were and then what that extra piece of $3 million in secured collateral is. Is there any other color you can give us?
spk10: Yeah, sure. I'll start and then maybe Ann will provide more detail. But, yeah, we did see that $7.6 million increase in NPAs quarter over quarter. And I'll share with you, half of that amount, real estate secured, actually was paid off this past Monday. And then the other half, the other piece, is a real estate secured loan on property here in downtown Honolulu. And the loan-to-value on that loan is 32%. And what type of real estate? It's a commercial building in downtown Honolulu.
spk01: Okay, so office. Okay. Okay. And then just maybe some comments if you have them, your hotel book, just looking at your deferrals, you went from 3.3% at June to 28.8%, which is still remarkably low, remarkably low relative to mainland, remarkably low just even thinking about the fact that Hawaii is an open facility. Can you just help us think about that whole, you know, $59 million book and where you see that going, what you're expecting in terms of as we look forward, is it going to stay at this level? And then also, can you just remind us what your hotel book looks like in terms of, you know, just very approximate properties, flags, are they beachfront? Just any color you can give us would be helpful. Yeah.
spk10: So I'll start, and then Anna can provide some details. So in our slide deck on slide 16, you see our accommodation book of $59 million. And we have it broken out between CNI and CRE. The book comprises of a number of hotels with strong flags, so international flags, and then with strong backers. And so just to give you some color on how we feel about that portfolio, many of the hotels have reopened with the reopening of tourism on October 15. Anecdotally, we're hearing that the owners are pleasantly surprised on the return of tourists. But I have to say, along the lines of what Paul mentioned earlier, The continued progress will depend on the continued influx of tourists and then our ability to keep the infection rate down here in Hawaii.
spk01: Is that a six-month deferral then that you all granted? Is that how you're approaching this?
spk09: This is Anna. It's pretty much still on a three-month by three-month basis. With regards to the accommodation at $17 million, we actually feel really good about it. Some of those hotels delayed their opening. So we're looking at a November 1 opening for the couple of hotels that are in that category.
spk01: Okay. Now, I mean, it's low considering that Hawaii hasn't been open. Okay. And just, I mean, along those lines, if I'm looking at your total commercial deferrals, again, you know, really good improvement here going from 19.5% down to 8%. So can you help us think about, you know, with your stock trading, so just kind of to book, how you're approaching something like potentially a buyback? We're seeing more and more SMIC cap banks announce buybacks. Just what are your thoughts? And certainly you obviously have the subject raised, which potentially could also be used to buy back stocks. So maybe if you could help us think about any thoughts around that, Paul or Catherine. That'd be great.
spk07: Let me have David respond to that, Laurie.
spk06: David? Hey, Laurie. Yeah. Again, you know, I think the Hawaii economic recovery is obviously trailing the mainland slightly, you know, with us just reopening tourism. So, you know, we're going to be monitoring the recovery of the local economy, as Paul mentioned earlier. And as we gain better visibility on the path forward, we could turn offensive with our robust capital position. And with the stock trading at 75% of tangible book value, that's a pretty good opportunity.
spk01: Perfect. Thanks for taking my question. Thanks, Lori. Okay.
spk03: This concludes our question and answer session. I would like to turn the conference back over to Paul Giannomini for any closing remarks.
spk07: Okay, great. Thank you very much for participating in our earnings call for the third quarter of 2020. We look forward to future opportunities to update you on our progress. Thank you very much.
spk03: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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