Financial Data and Key Metrics Changes - The company reported a record quarter and is on track for another record year despite setting aside a significantly higher provision this year [7] - The Board of Directors declared a dividend of $0.21 per share, maintaining the highest level paid [8] Business Line Data and Key Metrics Changes - Excluding PPP, loan growth was up approximately 4.5% for the first nine months of the year [12] - The company anticipates an additional $100 million in construction loans to be advanced over the next year [14] Market Data and Key Metrics Changes - The total watch list, including watch credits and non-accrual credits, totals $47 million, which is less than 2% of total loans, indicating historically low levels [16] - The hotel portfolio's occupancy rates improved from nearly zero in April and May to 57% in August, but fell back to 50% in September [19] Company Strategy and Development Direction - The company is expanding into Minnesota, with construction underway for a new facility in Sartell, Minnesota [9] - The company is focusing on maintaining strong credit quality and monitoring the financial health of borrowers [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to replace anticipated payoffs in the loan portfolio, expecting to maintain a growth rate of at least 4.5% by year-end [30] - The company is cautious about future margin pressures due to lower yields on reinvested loans [34] Other Important Information - Business DDA accounts have increased by 50% year-over-year, reflecting a conservative approach by customers amid economic uncertainty [22] - The company has seen strong performance in the Rochester market, driven by the recovery of Mayo Clinic's operations [24] Q&A Session Summary Question: What is the outlook for net loan growth over the next couple of quarters? - Management expects to maintain a growth rate of at least 4.5% by year-end, with a pipeline to replace anticipated payoffs [30] Question: How does the margin outlook look given the lower deposit costs? - Management indicated limited room for further lowering deposit costs, with future margins likely impacted by reinvestment at lower yields [34] Question: Can you provide more detail on the credit that may see some loss? - The credit is a large non-profit with adequate collateral, but there is potential for a small loss depending on future developments [36] Question: What is the status of the $16 million movie theater credit? - The theaters have reopened with limited operations, and the business has injected significant liquidity to support operations [38] Question: What is the current status of deferrals? - The company expects deferrals to decrease significantly, with most remaining deferrals related to hotel properties [40] Question: How adequate is the current allowance for potential issues? - Management believes the allowance is adequate as of the end of September, with future provisions likely similar to previous quarters [44]
West Bancorporation(WTBA) - 2020 Q3 - Earnings Call Transcript