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good morning thank you for joining us for today's webinar uh breaking down 2020 results and looking ahead uh at 2021 my name's sean o'brien i'm the president of quick rate uh thank you for joining us today uh just a couple of housekeeping items before we get started we will send a copy of today's slide deck and a link to the recording later later this week i'm pleased today to be joined on the webinar with by david ruffin uh david as many of you know um joined us in 2019 to build out uh the division we now call in telecredit so today we're going to tackle uh the 2020 results and the outlook for 2021 both from using data from quick analytics and then also david's expertise on the on the credit side uh here are the things we're going to you know quickly cover uh we appreciate your time we're going to talk a little bit about what 2020 uh you know ended up like look uh discuss the economic indicators that continue to be improving we'll look back at the fourth quarter banking numbers through quick analytics and our quick analytics community bank index and then david's going to discuss uh where we are in terms of credit quality and then also we'll close with uh you know what's new at quick analytics uh and in telecredit uh as as always we're proud to be associated with the community bankers of michigan we're proud to have these two solutions endorsed and again thank you for joining us uh today uh throughout 2020 we echoed what the federal reserve uh kind of continued to repeat which was the path of the economy was going to depend significantly on the course of the virus uh we think that's true here uh it will continue through 2021 uh similar to when you go in to see an eye doctor and they say better here or better there at least i feel like 2021 is going to be better better here um i think this uh fed charter from the st louis fed um shows that the the government you know spending relief support however you want to call it uh was working you know we had a big spike down in terms of economic activity and gdp in the second quarter uh we got you know very quick fiscal support into the into the economy we recovered that's starting to wane and that's kind of where we are now is an economy that's starting to slow down with the with the expectation that more fiscal support is coming you can see the numbers here for gdp all told last year the us economy shrunk by about three and a half percent it was the largest contraction for any full year since the demobilization from world war ii um debt to gdp exceeded the size of the economy for the full fiscal year that first time that's happened in 70 years and i think we just have to get comfortable with the idea or maybe just maybe comfortable is not the right word but we must accept the realization that that's just going to continue to arise for the foreseeable future um you know we're going to i'm sure people are going to talk a lot about debt and inflation but i think it's something we got to solve that problem after we get the the con the economy jump started so um again i'm going to echo what the fed says which is the economy is going to depend on the course of this virus this this chart from bloomberg and the cbo right just shows you how big of a fiscal you know support relief whatever you want to call it in 2020 you can see the increase in the budget deficit as a percentage of gdp was unprecedented last year uh and when you compare it to 20 in 2008 and 9 not only was it larger but it was much quicker as you can see it took almost you know over 12 months to get the support last time which we did in about three months in 2020 so that immediate response was really critical to preventing even worse damage uh being done to the economy uh this this slide is something i i saw the other day and i thought uh you know it echoes you know not only the fact that you know the us government is going to continue to support the economy but it's happening worldwide right so we are setting ourselves up for um just an incredible set of relief support stimulus worldwide as we go through 2021 and how that translates and how quickly uh that money you know and velocity you know sort of impacts the economy you know i think is really leading to some of the revised and increased uh expectations around gdp um in the united states um these are some economic indicators that are improving this comes to us from a report i read from charles schwab but you know i won't go through all these but but at the heart of it a lot of these uh economic indicators are improving the ones that aren't as much uh are again based on you know businesses and services that require people to gather such as dining out traveling hospitality those are still really early in the recovery if not recovered at all retail sales you know again most occurring online uh have recovered but it's still not necessarily helping main street and so the theme continues to be we have this uh i don't want to say competing sources but but essentially this dichotomy of where uh activity is getting better for a number of industries and sectors and still really hurting and painful for a number of areas of the economy the money supply is you know exploding but the velocity is not um so again i think the the talk about inflation's you know certainly becoming more mainstream but i don't think we're really going to see a pickup of inflation until we see the velocity of that money pick up as well as some of the slack in the labor market start to go which we're still about 10 million people shy of where we were pre-pandemic um and that that leads to the final point which is payroll you know really have stalled there's over 18 million people receiving some form of unemployment assistance and again we're 10 million people shy of pre-pandemic employment levels there's still a lot of work uh to be done um on that previous slide you know it noted that ceo confidence is off the charts as they look forward to 2021 but that has not translated yet to the consumer again speaking of this bifurcation that we continue to see in the economy um the confidence is starting to rise slowly this is the uh the michigan university of michigan index it's starting to rise but you can see we're still a long way from where we were a a year ago so you know again this is uh you know something that's really important to continue to see uh people you know having the confidence to go out and spend and not just save uh money um i believe the economy still does require more fiscal support and i think you know again if you're the fed your responsibility is inflation and employment those are the two things are your mandate and if you're the fed and you're looking at these employment numbers you realize you still have more work to do as you can see the last three months of last year we really didn't create any new jobs to speak up um and so we have lost momentum as it relates um to job creation and i think that's why we're gonna see uh you know they're gonna argue about the size of this next round of support but there's there's more there's more support coming because you know jobs are really going to uh you know going to drive the second leg of this uh of where the economy needs to go and the bifurcation continues here while the the numbers have gotten better over the last nine months the number of long-term unemployed people those numbers are still high and continue to rise employment's you know rising in some areas but as we touched on continuing to stagnate and fall in in other areas nothing happens overnight right so no matter how quickly uh this next round of stimulus or support or whatever relief you want to call it there is still some long-term scarring to the economy that's occurring you know i believe we learned last time from the last recession that there's more danger in doing less than more and if you just do some simple math if you think about you know we're right about 10 million jobs maybe slightly less but if you think about if we create 200 000 jobs a month it's going to take four more years to get back to pre-pandemic levels if we can create you know jump that number to 300 job 300 000 jobs a month now we're down to a little over two and a half years so it's again that's if you're the fed you're looking at inflation which you know again hasn't really been an issue for a number of years and you're looking at hey i need to get these job numbers improved and as quickly as we can and so that's why they're going to continue to do what they can do to provide support to the economy um so where does that leave us right i mean i think what it leaves us is that the credit out the outlook for credit is still you know expected to worsen maybe over the first half of the year but i think it's certainly improving from you know forecast last year q4 provisions were lower across the the industry uh money center banks and many of the regionals actually took smaller provisions and with some even actually reducing the reserves and i think there are a number of reasons to continue to be positive you know one in particular at the bottom their bank valuations are rising if you remember david and i spoke at the convention in traverse city last fall and at the time i had a slide i should have referenced it here today that we said you know hey michigan banks are on sale well since that time um bank stocks and in general have rallied about 30 so um you know i think that's already starting to uh you know start to you know rekindle uh m a activity so i just think we're gonna see a much different year uh in terms of m and just uh you know again uh uh banks being acquisitive in in 2021 but the fact of the matter is there's another round of ppt loans there's plenty of capital and liquidity in the system the belief in the improving forecast housing continues to be a source of strength so there's a number of reasons to to feel a lot better as we go into 2021. um jp morgan we referenced this in webinars we these quarterly webinars we did last year so i thought i'd continue it through the first quarter here you can see there they had a big ramp up in reserves um again you know almost 75 of that was attributable to uh you know loss forecast and not cecil which we discussed last year um they did back it off from where it was in the third quarter you can see it dropped but again still a pretty significant uh increase in the provision year over year from 2019 to 2020. um again so you know as we think about you know our outlook and our banks outlook for next year you know where things are better right there's still work to do but it's improving uh the vaccinations are increasing every day you know winter i don't know about how all of you are hanging in hold out in michigan but i know in illinois i'm ready for winter to come to a close i hope it's tomorrow um you know so an improving weather forecast always helps with consumer confidence but you know i think interest rates are going to remain low there's more rounds of ppp and fiscal support coming so there's a lot of things that are on the surface add up to a more positive 2021. the the lagging issues that you know still hanging out there that are troublesome are the unemployment numbers the long-term unemployed and then as david's going to touch on right is main street is still wounded and we have to remember as good as things are when wall street's improving it's usually coming at the expense of main street right if you think about your local community and i think about my local community and i live in a county of about a hundred thousand people you know our local restaurants you know are struggling right they're hanging on um but if they leave it's a larger restaurant chain or a national chain that benefits right and that really kind of epitomizes what the difference between wall street and main street is wall street are larger more capitalized companies that are able to withstand downturns like this the small businesses can't and that's really what you know community banks have stepped forward in this crisis and then the the source of strength for those smaller businesses and there's still a lot of work to do and hopefully some of that healing begins uh further in 2021 but that's what we're going to uncover this year is what the true state of our borrowers are right we've we've been trying to build a bridge to get them to you know an economic recovery and then once we get there then we're going to have to kind of unpack what kind of situation and you know credit condition they are in as i mentioned the 2021 gd forecasts are improving by the day you'll note this i left this atlanta forecast on here we did this webinar just a few weeks ago and this was the gdp forecast from the atlanta federal reserve bank today it's almost nine and a half percent right so the numbers are literally improving by the day um and so again there's a number of reasons to be optimistic uh for for 2021 but there is still work to do right the the vaccines are starting to go out but this chart from mckinsey just gives you an idea of how much it's going to take to to to get to that hurt immunity or the vacuum to vaccinate our entire country it's a pretty herculean uh effort that's just gonna take time uh hopefully it'll move quicker than a lot of the forecasts but you know i think our hope is is that by the fall this year right we we start to see things that resemble something that's familiar uh and closer to you know what we we think is is normal um so before i hand this off to david i just want to go through some uh bank numbers these again are derived from our quick analytics uh division uh we take the call report information and look at not only individual bank level data but also just look at some trends and so you can see uh 86 banks in michigan we're still just slightly over 5 000 nationally as we as we enter the year um you can see the breakdown of banks uh in michigan you know the majority of them being between 100 and 500 million so it's a great community bank state as you all experienced last year asset growth was off the charts 90 percent of the banks in michigan saw asset growth over 10 percent if you look at the growth by asset size here in this bottom chart you can see everybody experienced double-digit asset growth uh last year and that growth came with and without ppp loans right so we'll touch on some loan numbers here in a second but the the loan growth numbers you can see for michigan including and excluding pvp loans uh it wasn't all just uh all just ppp loans it wasn't organic growth as well which is encouraging um to see uh whoops you can see the loan growth numbers uh again kind of across the board you know 40 percent of the banks in michigan experience greater than 10 percent loan growth um only the zero to 100 that we see um by asset size you know is the majority of the banks didn't experience uh any any loan growth deposit growth again off the charts uh 94 of the banks in michigan saw greater than 10 deposit growth we are feeling that at quick rate if nobody needs money right everybody is pretty flush with uh liquidity and again speaks to the strength of uh the community bank position both in terms of liquidity and and capital where we are entering uh this year you know really in a a strong balance sheet position uh performance numbers uh not surprisingly with rates you know kind of catering last year or cratering excuse me yields on loans rolled over cost of funds dropped precipitously the red line here is the national trend so you can see in michigan you're doing much better in terms of cost of funds than banks are naturally nim continues to be a source of concern right it's rolled over uh pretty precipitously 37 basis points from 2019 uh and again we'll probably you know continue to be challenged uh this year uh non-interest income the refi uh mortgages you know strong year for non-interest income in the state of michigan and just consistently since 2015 michigan banks have whittled away at the efficiency ratio so it's just again a real credit too and hats off to all the bankers that you just continue to in a in a very competitive environment uh continue to make progress um with your with your efficiency ratio um just a few additional you know bank performance numbers that compare in 2020 to 2019 uh r a you know two out of three banks saw their roa decrease uh 97 you know saw increase in assets you know better than four out of five banks saw their nem decrease last year and then you know we are as an industry at you know really decade-long lows for uh loans as a deposit and that's going to borne out the fact that four more than four out of five banks uh across the country saw their loan deposit ratio decrease in 2020. um some final profitability metrics again not surprising these have rolled over um you know from 2019 same with roe but not not too dramatically by asset size uh the roa numbers you know this slope here is kind of what we traditionally see right the uh you know toughest on the smallest banks but in terms of roe right it's it's pretty credit you know pretty uh competitive across the board so that's a again a real tribute to the to the banks in in michigan um you know you know operating almost as efficiently as the uh the larger banks uh in your in your state um so at this point i am going to turn the presentation over to david and he's going to take you through the uh credit section of our presentation david great um hope you can see the screen uh i would be remiss again do not repeat uh what john said about the community bankers of michigan it has a special place in my heart uh since coming to intelli credit uh no group that i enjoyed working with more than of course mike and kate's staff but also the bankers in michigan and twice uh have attended your convention in traverse city and hope hopefully by next fall we can we can do that again so uh uncertainty is the word here i think uh more than uh i'm a credit guy as some of you may know and sometimes there's a presumption that oh goodness he's gonna talk about all gloom and doom and that's not the case here it's really a more an issue of uh vigilance uh but also really concentrating on really what i think are unprecedented uh uncertainties in the credit space as we move into 2021 you know in 2020 as as sean has already alluded to quantitatively in many ways was really a high performance banking year virtually every bank outperformed financial expectations certainly as as we looked into the depths of the spring of last year many people were in much more of a doomsday kind of prediction uh the armageddon that was feared just simply didn't materialize at least from a banking perspective uh credit metrics at ten thousand feet imply almost nothing onerous as it occurred and uh that frankly leads a lot of people to temptations to claim victory already over the code at least in the banking space uh some would might say well we're just that good at managing our institutions through this national disaster and by the way making money uh while doing so and we're certainly the beneficiaries of years of building more and more capital cushion uh yes the vaccines are coming and we can certainly hope that the worst of this code is is over and certainly one of the real subjective benefits of where we sit today as an industry compared to where we were a decade ago in the last crisis was there's absolutely no blame that can be ascribed to our industry uh in relative to this uh and quite just in fact just the reverse because i think the community banks particularly have gained a lot of public relations plaudits with their aggressive embrace of the ppp program we'll talk a little bit about that in a moment in terms of opportunity for growth but the rest of the story is as paul harvey used to say uh as he would pivot to the other parts of his his presentation on his radio and television programs i guess was that uh we experienced uh unprecedented regulatory relief in 2020 as an industry uh we had massive federal economic stimulus in the early months of the pandemic as as sean has indicated we've certainly been the beneficiary of a flush of liquidity and and non-organic loan growth through ppps and sba initiatives that continue now of course into 2021 but you know the bankers that i talked to uh intuitively know that credit tales or the effects of an economic shock almost always outlive or outrun the shock itself it's a it's a trailing a phenomenon to any kind of economic shock the federal government lifelines eventually will have to cease as we know that and certainly as again sean indicated to a lot of bifurcated numbers in his segment of the presentation i wrote an article in december that basically talked about the fact that our commercial banking borrowers reside on main street not wall street and the reality is that main street still clearly as sean indicated is in a recession and you know many of our borrowers are really more focused as we speak today on their own survival uh than than investing in growth and of course for those of us that are credit people that inherently is typically a red flag in more normalized times so 2021 realities uh i think the all the initiatives while avoiding a calamity i think uh have have combined i believe to create the greatest masking effect of underlying credit risk in modern banking history um and the other piece that i will speak to in more detail in a moment is what i consider to be the most vexing uh uh legacy of kovid to to bankers is that it has left us with the need to focus on far more than just one industry which you could arg we could all argue that everything related to wonderful family housing in the 2008 to 2011 time frame took us into the great recession covet has just strewn the landscape with many divergent industries negatively impacting impacted and i think that's going to further a complicated already is complicating our risk assessments uh so therefore we think 2021 credit uncertainties among all stakeholders have to be recognized boards and management always have to have the sense that they don't want surprises they don't want surprises internally or externally to external stakeholders risk managers that's the core of our responsibility as a risk officer or credit officer is to be on top of ongoing assessment of credit and emerging credit risk uh investors and investment bankers play their role and uh while i think most people agree we'll probably see a big spike up in some mma activity particularly in the second half of 2021. the investment bankers i've spoken with in the last few months have indicated they've never sensed any more uncertainty in terms of what is the underlying credit um a dynamic going on in bank portfolios as we speak and certainly the regulators which i think they certainly believed that it was the right thing to do to effectively give us a bit of a respite on liberalized extensions and modifications and the suspension of the tdr uh assessments but uh every regulator i've talked to directly and i'm hearing it indirectly through bankers is that they're saying that 2021 is going to be back to a much more normalized examination process on the presumption that they now want to see where banks individually how they individually are assessing their credit and you know uncertainty by its nature is anathema to managing credit risks so again if someone would ask me what is the biggest single risk facing us right now it has to come back to that that concept of uncertainty and i think uh reducing these uncertainty we can't eliminate we're in a risk-taking business uh but reducing them i think will clearly be priority one uh in 2021. so uh our challenges remain in other areas we're going to have some and there's already indications that i've heard of where people have been caught up in some paperwork if you will uh not so much direct liability but paperwork around some ppp fraud that seems to be increasing in investigation cecil is not going away i think some in the banking space clearly hoped at some point that cecil would be the first victim if you will of covet but it's not and it won't be going away yes it's been pushed out to some degree and extended in terms of its implementation but it's not going away this is a year for libor transition and again the interagency guidance came out about a month ago reminding the industry to be sure that all the eyes are dotted and the t's crossed relative to documentation and the practices relative to the loan price is appropriate and of course we continue to live with any money laundering uh bank uh secrecy act and cyber risk that seem to be ubiquitous uh and therefore and then the inexorable question is how long the tie to the government uh and to both abate our risk and enhance our growth and and you know i think if we're intellectually honest we have to acknowledge that all of the quantitative information that sean shared with us had we have benefited as an industry from a lot of that government activity so let's talk a bit about where michigan the national and regional uh year-end numbers look like from a credit metrics perspective all the charts you see here come from our sister division quick analytics uh the graphical depictions of this will always be the blue line is in is michigan the midwest is in the kind of the burnt orange and the national line is in in green so basically i like to think of in the simplest of terms the kind of taking the inventory of a bank's loan quality you start with what's your acknowledged problem level of problem loans to the left and then you have one or two things you can do with them you could either charge them off or you can reserve for them uh michigan is and as well as the the nation uh is about at par of about a hundred basis points in the region uh for uh non-performing loans uh michigan's had a little bit of a spike up but again not meaningful and not significant and certainly much less much a smaller level than what would have been predicted last spring charge-offs are inconsequential virtually in the banking industry at this point we'll get to that point in a moment but uh reserves have continued to increase at the community bank space remember again our our predominant mission at the quick rate family of products and services is the community and regional bank space so we all these numbers are 10 billion in bank asset size and below because we think that's really more pertinent we've taken off some of the mega bank data that would obviously skew this from a presentation standpoint another way of looking at it is how much of your acknowledged problems as low as the that inventory is at this point are you covered by reserves and again nationally regionally and michigan are roughly at the 250. in other words two and a half times you're already reserved for two and a half times your knowledge i will go back over to this whole concept of npl and another a specific uh example of how the industry has benefited from this particularly regulatory relief for example i had a bank a friend of mine in banking that was bragging to me about three four weeks ago that he actually ended 2020 with lower non-performing loans than than he had at the beginning of the year and uh and i said how much of that was driven and i could ask him this because we're friendly but i i asked him how much of that was driven by any kind of uh taking advantage of extensions and modifications and he caught he laughed and he said you caught me so my point there is uh some of that not unlike the non-organic loan grows some of the non-performing loan data may be a little bit skewed with a little bit of an artificial cushion relative to being the beneficiary if you will of some of that regulatory respite we've talked about long growth as sean alluded to already but it's primarily coming from the banks 500 million or above in michigan but if you look at the chart to the right uh there this is only data coming from the fdic as of the third quarter of 2020 it shows a real drop off in long activity that was as a result of the lack of ppp generation during the third and fourth quarters so again nationally not not so much in michigan but nationally there seems to be still legitimate concern over the lack of really organic loan growth in the industry concentrations we always have to live with obviously what comes to mind are predominantly in the real estate uh sphere cre to the to the right is the broader 300 percent guidance of the subset of that construction development and acquisition loans which are uh the 100 guidance there are no no banks in michigan that are exceeding the 100 guidance there are four banks in michigan under 10 billion dollars currently that exceed the 300 remember that's a guidance it's not a regulation but it does put more emphasis on you to defend uh if you're either approaching or exceeding those guidelines again covet i think has left us with a far broader need to put a broader lens on where we are in all concentrations particularly as it relates to industries that that may be as sean alluded to like you know restaurants hospitality things of the service based industries that may be adversely affected uh michigan is well under on multi-family cni again a lot of that those spikes are not uh are non-organic they're ppp driven in terms of cni loans ag loans in michigan are below the regional and of course this is commercial bank data it doesn't include anything to do with the farm credit system uh concentrations are critically important to think about and uh and i i wanted to interject an excellent article that was written uh and commissioned by the fdic in this in this summer of 2020. it was really a postmortem excuse me on the all the failed banks of the last banking crisis and of course not unexpectedly the findings indicated that about 70 percent of those banks were cre focused they had a high concentration of so-called late growth or vintage lending which kind of proves the concept we've thought of for many years and that is that loans made late in a good credit cycle or benign credit cycle often turn to become the most toxic because they perhaps unwittingly were the beneficiaries of more aggressive underwriting or reduced terms of what have you that would be just to facilitate loan growth and what is was perceived at the time to be a good economic environment uh not surprisingly also it's a high correlation uh to collateral dependence i mean it goes to that whole core credit uh truth that we live with all the days when you have to depend on collateral to get you out of a problem credit it's usually the collateral has been devalued by that time and of course it indicated that there were state and regional market forces that were critical covariance in it why that's particularly important in cre is that since the financial crisis as an industry commercial banking has actually become as a 2019 became on par with residential lending on our balance sheets i would i don't have data to back this up and my hunch is with community and smaller regional banks that line has far exceeded uh residential lending and therefore that has increased in exposure and we all know that the effect of covet on traditional office space for one income property has probably been uh very very um impactful and will be for years to come well beyond the uh crisis itself uh one of the other ways we look at it is understanding that uh smaller banks have a structural uh disadvantage in dealing with waves or increases of problem loans largely for three reasons is the capital capabilities themselves to flush problems uh the second is very subjective and it's because you tend to often know uh borrowers in your marketplace that are trouble as it's just simply frankly psychologically more challenging and difficult to deal with it and thirdly and perhaps more importantly is the community bank space love affair with lending on real estate and real estate is already arguably by far the most illiquid of assets when it becomes a problem loan so and and this kind of theory is proven out in michigan if you look at uh even as as low as the current inventory is of problem loans even as we sit today it's the banks under 100 250 million in in michigan that are carrying the highest level of inventory which would again imply that if we had a wave of once as they say the dust starts settling the so-called other shoe dropping on the credit tail uh if we have spike ups in in um in in problem loans then it's the smaller banks that tend to carry that uh structural disadvantage in managing them so there are changes of foot in l nding opportunities i think the whole mindset i think the the frankly the paradigm of what you consider to be a typical prospective borrower has changed as we sit today that pool of traditional borrower prospects has shrunk because of covet but i do think the uh the uh the inverse of that is is to take the as the adage says for every challenge there's an opportunity convert those ppp loans as much as you can to more stable organic loan uh pool and i think that is clearly proving a huge opportunity for again transferring that so-called non-organic loan growth to potential organic lending at your bank and frankly expanding your customer base obviously with the with the uh in many cases with the uh with the with the guarantees that come with that perhaps with sba capitalizing on the goodwill again related to the ppps uh and in fact leading uh on the coveted recovery i think just further adds to the success uh and and and the positives we've heard about in terms of this community bank industry during this and again relying on more government uh guaranteed programs i think is just in the dna now it's no longer in my opinion uh look should be looked at as kind of a separate uh entity in terms of how we do things in a subdivision of our lending it may well be much more mainstream if you will in terms of what you want to be doing relative to taking advantage of and utilizing it has great you know greater organic loan growth opportunities continued goodwill it has the profitability from the fees and secondary market sales associated with those loans of course that's presuming the efficacy of the guarantee is still in place uh as far as the risk management um side of the coin i think we are clearly pivoting although we've had another round of ppps particularly in january february as we speak uh to a more risk management mindset assessing talent if we get a wave of stress i think you're going to have to start looking for you know where workout specialists may be that is really a rare commodity in banking these days because we haven't needed staying close to the borrowers i also think tweaking your policies and procedures would be very helpful in other words make them relevant to what today's lending environment looks like we all know that regulators understandably and rightfully so basically hold you accountable for whatever your policies and procedure says some banks have not tweaked them in years and and what how they were crafted a few years ago don't really reflect at all what the bank's position is so don't unwittingly walk into an examination with policies that are not relevant to your current practices and again i think focusing on conservatism with that overreaction i think the primary issue there is the last sub-bullet in that is focus on reserving and moderating charge-offs the one of the beneficiaries of our industry right now with all this additional capital that we have now versus the last crisis is that we will uh be able in my opinion to to leverage those reserves and rely on those reserves to frankly avoid kind of that knee-jerk charge-off environment that we were living in so much uh with the last crisis and and clearly renewing focus on loan of you because i do think that that is clearly clearly important because in effect we've had a bit of a backup on loan review activity in 2020 for logistical reasons i think in terms of the focus on m a uh while i think there's a lot of signed reason for think it will be a little more robust in the second half uh we've talked about the uncertainty uh that we've talked about these issues i do think alone impairments have really continued to fade there'll be a lot more white if scenarios a lot more focus i think on cultural synergies rather than just uh credit mark focus but even the mechanics of calculating the average present credit mark may change and what i mean specifically by that is we may be focused more on uh a really a broader definition if you will of a net rather than a net charge off it may include things like non-accruals bankruptcies foreclosures or other indications of payment history problems five key strategies we are telling our clients to do is is recognize the trap of focusing only on your portfolio at large that could be very enticing to you but it could also mask again the various code impacted subsets within your portfolio which i think may include the hotspots we all know the credit people on the call today understand the importance of identifying early detection of credit risk that lies in the in the past risk rate categories not in acknowledged criticized classified loans and certainly be able to drill down to whatever trends that are being identified with your tools to assess that to your troubled and stressed borrowers and to identify them very very quickly again to adjust your portfolio servicing protocols including a much more enhanced and effective loan review process we feel very very strongly that that is a critical initiative that needs to be taken in 2021 and then of course the the whole basis for this the whole value the end result of these five steps of the four previous is to be able to write your own script before other others do it particularly regulators so i think the concept here and this is what drives in telecredit by the way is our ability to look all the way from red flags to aggregate portfolio trends down to the low level detail and then in somewhat of a revolutionary way tying that into uh the enhanced loan review process that gives you the ability to make loan review a part and parcel with the diagnostic of the of the portfolio remember the external stakeholders the peers the investors and even to some degree the regulators they see you through the lens of public call report data it's only you that are privy to your non-public idiosyncratic loan data and that's where the early warning signs are going to be flaring if you will through we think 2021 and and and 2022 uh and again that's that's basically our uh way we have developed in telecredit and the everything we offered in telecredit is built around those concepts so uh we think again the value there is to you it confirms you as the captain of your own ship you always a regulator shared this concept with me some time ago and that was they would go into every examination with this kind of typical traditional uh four box axis uh uh based on cooperation and competence and of course nobody wants to be scored in the uncooperative or incompetent and and i think the confidence issue is critical because what we know is the most toxic of dynamics between a board and a uh a management and and frankly a bank and a regulator is too many credit surprises it just conjures up one of two things either uh someone's asleep at the switch or they're in intentionally um you know are reluctant to acknowledge a problem that really does exist so we do know that there's a proven correlation between early detection of emerging credit risk and both reduced levels of loss and impairment and your and most importantly as as importantly your flexibility to manage potentially problem loans out of the bank uh these are significant uncertainties that we're all facing but they can be overcome so sean i'll hand it back to you okay thank you david let me get back to my screen here thank you very much um again uh david does a great job so i encourage uh any of you who have not had a chance to speak with him uh to do so um we're really proud and excited to have him and his team develop our credit uh and telecritic solution uh just a reminder uh you know quick analytics you know we're just uh what we're doing as you can see here today is we're aggregating a number of data resources for you so you don't have to um that's really the the you know the advantage of our solution is that we're trying to make that job uh you know come to life bring data you know and put it on your desktop we have some exciting enhancements coming forward in 2021 we continue to enhance our cecil solution um we've already built that for every bank in the country uh we are going to introduce a camel's page which will just highlight some of the ratios from the call report that we think can impact and affect your camel rating so you can kind of manage your trend quarter over quarter and year over year for banks that uh wanted investor relations page there are ones that are required to it uh through the new sec rule modifications we uh we've developed a solution for that and then for those of you who already have seen our tool we've had an excel add-in tool for a number of years but we've added credit union data at the request of our banks a lot of people want to monitor what credit unions are doing in their area so the add-in tool allows you to import credit union call call report data for you to analyze as well we've developed new credit uh industry credit research tools that again kind of brings to life a lot of the information from the call reports so you can use it to do research to prepare reporting for your own bank you can use it with your cecil solutions and our cecil solution so again we encourage you to come come take a look and learn more about what we're doing you can overlay uh you know metrics such as the the michigan community bank as a peer group you can use your ubpr you can use other banks and you can also overlay fred data so you can look for correlations between credit activity and economic data such as unemployment gdp uh et cetera so again just a new exciting feature that we we've introduced um this is just a quick snapshot of our investor relations pages for a lot of banks this may not be applicable but again we've kind of made that process uh easier it'll create a page that looks for you know something like this for you that we can manage or you can manage uh on your on your own uh for those of you who have seen our credit stress test we've improved it to make it more interactive so this is a occ kind of guidance based uh portfolio level credit stress test we've run one of these on every bank we've now given you the ability to customize input but this is something we've already run and you can modify the the inputs but uh you know can be a time saver and can be a very good risk management tool to put in front of a regulator to show them that you are at the board level monitoring uh the overall you know kind of credit cushion uh for your for your bank it's kind of an easy nail to hit and uh you know demonstrate some you know really proactive credit risk management uh we've added the ability to modify a lot of the assumptions this came at the request of our users so as best you know we're trying to develop tools we are very responsive and uh anxious to get feedback from our users so we encourage you again um you know to take a look and as you uh do take a look tell us what you like what you don't like and what we can do to improve any of our of our offerings uh we did um modify the assumption so you could back out the ppp loans from your from your analysis and also give you the ability to put in and project uh or forecast capital raises and set your own internal uh capital target triggers if there's something different than just simply being well well capitalized uh as i mentioned the credit union data available is now in our add-in tool so you can pull that in along with any piece of bank data so beyond quick analytics and our interactive pages you have the ability to import any piece of call report information into your own spreadsheet so it can save you you can save your team time if they're creating or generating quarterly reports using call report data bottom line i think you know hopefully we again want to thank you for your time today but you know we built some affordable solutions between quick analytics and telecredit uh we'd love to show those to you we uh david and this team also does uh external loan review so you know we'd love to provide a quote if you're looking for that and you can see some of the new tools that he's built in conjunction with the loan review function and just portfolio analytical tools we'd love to show you those and we're really excited about those had tremendous feedback uh not only in bringing efficiencies to the loan review process but we also just from other loan review firms who've seen the efficiencies that our a solution can can provide it really boils down to intel intellicredit there's a couple of cloud-based applications including a portfolio analyzer and a smart loan review piece so we can do external loan reviews but if you're doing any internal loan review at your bank we've got software that uh or excuse me a cloud-based solution that can you know streamline that process make it come to life make the information more readily available and meaningful uh for more constituents uh in the in the bank uh and with all of our solutions for anybody who's known quick raider worked with us over the years we've priced them affordably so that banks of all sizes uh can take advantage of them um as i mentioned quick analytics we come you know we cover a number of different things including bank and pure performance reports uh interactive bank analysis and then a number of different regulatory and compliance tools including a cecil solution and a credit credit stress test so we've been busy uh we really would invite you to take some time and uh reach out and talk to us and learn a little more about what we're doing we'll all look forward to hopefully seeing everybody in the fall but in the interim if we can answer any questions you can submit those now otherwise reach out to us you can schedule a tour of quick analytics and in telecredit and i'm going to check real quick just to see if there's any questions from today it does not appear that there is so on behalf of david uh our thanks to mike and kate at the community bankers of michigan we thank you all very much for your time today and we'll look forward to speaking with you or seeing you again here in the near future have a great day bye now