American River Bankshares (AMRB) CEO David Ritchie on Q3 2020 Results - Earnings Call Transcript
American River Bankshares (NASDAQ:AMRB) Q3 2020 Earnings Conference Call October 22, 2020 4:30 PM ET
Company Participants
David Ritchie - President & Chief Executive Officer
Mitch Derenzo - Executive Vice President & Chief Financial Officer
Conference Call Participants
Nick Cucharale - Piper Sandler
Tim Coffey - Janney Montgomery Scott LLC
Operator
Welcome to the Third Quarter 2020 Earnings Conference Call. My name is Vanessa and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session. [Operator Instructions] Please note that this conference is being recorded.
I would now like to turn the call over to David Ritchie. David Ritchie, you may begin.
David Ritchie
Thank you, Vanessa and good afternoon. This is Dave Ritchie, President and CEO of American River Bankshares, the parent company of American River Bank headquartered in Rancho Cordova, California. And this is our third quarter update. Please be aware of our earnings release, which details our quarterly results that went out at market open today along with our quarterly cash dividend payable next month.
As always, we've included some economic data in our press release, in general, COVID-19 has definitely slowed our markets, but the outlook is somewhat positive. The only real change we put in there was, we did update the unemployment situation in the State of California.
And with that, I will turn it over to Mitch Derenzo, our Chief Financial Officer.
Mitch Derenzo
Thank you, Dave. Of course, thanks all of you for taking the time to listen to the call today. Hope everyone's doing well in a lot of these unusual times we continue to face that now and that for us in California who knows how long going forward.
Before we get started let me remind everyone of our Safe Harbor disclosures. Certain matters discussed in this presentation may constitute forward-looking statements. The purposes of the Federal Securities laws, and may involve risks and uncertainties.
Actual results may differ materially from the results in these forward-looking statements. Factors that might cause these differences are discussed in our Annual Report on Form 10-K for the year ended December 31st, 2019 and in our subsequent reports filed on Form 10-Q and 8-K.
The company does not undertake any obligation to publicly update or revise any of these forward-looking statements, which would include information or future events, except as required by law. The links to our Annual Report and 10-K and our subsequent filings for 2020 are located on our website, americanriverbank.com.
As with our past conference calls, I'm going to highlight some of the key areas from our press release that was issued this morning. Try to provide some additional details and our analysis and then I'll turn it back over to Dave for some additional comments. Then we'll open up the lines for questions.
This morning American River Bankshares reported net income from the third quarter of 2020 of $1.8 million that compares to the $1.6 million during third quarter of 2019, that's a 13% increase. Earnings per share were $0.30 in the third quarter this year versus $0.27 in the third quarter of last year, that's an 11% increase. ROA and ROE for the quarter were 82 basis points and 7.79% respectively. That compares with 88 basis points and 7.65% respectively one year ago.
On a year-to-date basis, net income was $5 million in 2020, compared to $4 million in 2019 and EPS were $0.84 in 2020 and $0.68 in 2019, both of those are about a 24% increase from 2019. ROI and ROE for the nine-month period were 82 basis points and 7.52% in this year, compared to 77 basis points and 6.81%, respectively one year ago. On a pre-tax, pre-provision basis, net income was $8.2 million this year, compared to 5.9% year-to-date in 2019, that's a $2.4 million increase or just about 41%.
Despite the rate environment that we're in right now, based on the FOMC actions and then also the 2.3% effective yield that we're getting on the PPP loans for the quarter I think our margins holding up pretty well.
For the first nine months of 2020, the yield on our loans was 4.8% compared to 4.94% in the first nine months of 2019. And the overall cost of deposits decreased from 35 basis points in the first nine months of 2019 to 21 basis points in the first nine months of 2020. This resulting NIM was at 3.54% this year versus 3.59% for last year.
Loan growth over the past year, really big - I'm sorry, the loan growth over the past year and but more importantly, the uncertainty created by COVID-19 has warranted an increase in our loan loss allowance. In this year alone we got $1.5 million up from $480,000 in the first nine months of 2019.
Before we get to the typical review, we'll start with a discussion on our PPP loans since they impact so many areas of our results. During the quarter, we didn't fund any additional PPP loans, nor did we have any pay down or have any forgiven. So the outstanding balance remained at 473 loans for $75.8 million.
The net PPP loans that slightly reduced for the unamortized loan processing fees increased from $73,768,000 to $74,209,000. The resulting increases due to the net fees of $441,000 that were recorded during the quarter. Since there was no change during the quarter, the gross average balance outstanding stayed the same at $75.8 million.
The net unamortized fees and cost at $930,000 were $1,000,595 compared to $2,036,000 at June 30, 2020. Again, that's the $441,000 decrease that we took in the income. PPP forgiveness and pay down will accelerate that amortizing of that $1.6 million in remaining fees.
Last quarter, we had a discussion on the impact of the origination of cost associated with funding the PPP loans, and how we're able to reduce salary expense by $332,000 in the second quarter, when we originated those loans. Since we did not originate any PPP loans in the third quarter, there was no additional origination cost.
The yield and whatnot on that PPP loans that makes it tough to figure out some of these averages and the ratios. You know, for example, we had a balance of $75.8 million in the quarter. We amortized net fees of $441,000. We recorded $194,000 in interest. If we pull out that, our yield on loans for the quarter would have increased from the actual 4.64% to 4.89%. So they do have a drag on our yield.
And then if you looked at it on a year-to-date basis, the average balance outstanding is about $39 million or net fees of $748,000 and the interest income was $333,000. So on this loan yield there for year-to-date goes from the actual 4.8% up to 4.91%.
I guess the real challenge is when the $76 million in cash rolls in once these loans are forgiven and paid off at 2.3% yield that would be dragging on our portfolio right now after this lower than the rest of the year, the yield we're getting in the loan portfolio. But we have to put it in a Fed account of 15 basis points will liquidity challenge us, so liquidity definitely is not an issue but deploying it quickly will be.
As for the forgiveness, we have started to receive things from the SBA, and as of this morning, we've had about 23 loans forgiven, totaling around $1 million, and have about 49 more loans in with the SBA about $19.2 million total there. And then we've got another 55 loans forgiveness applications close to just over $8 million, that are being reviewed by our folks right now with hopes of getting those submitted shortly. So in numbers, the total number is about 30% of our total loans in dollars, it's closer to 40% of our total loans, so some positive news there.
Under the balance sheet, net loans outstanding increased $11.2 million during the quarter, that's about 2.8% increase. That of course is net of the PPP loans at 2.8% increase. So we're pretty excited about the increased volume there. In the quarter, we did $33.2 million of new loans that compares with $33.1 million in the third quarter of last year. So we're pretty close to where we were a year ago.
And just as a reminder, in the first quarter of this year, we did just about $12.9 million in the first quarter and $17.4 million in the second quarter of this year. So that $33.2 million exceeds the total for the first - of the first six months of the year. So again, we're seeing some good activity and we're getting back on track.
Total unused commitments were $35.7 million as of September 30, that's about $21 million of those - $21 million of those were commercial so those are going to evolve over time here. The rest of that $35.7 million is real estate related and we expect those to fund over the next year.
The payoff did tick up a little bit in the quarter and still manageable. They were $15.5 million in the third quarter, compared to just under $9 million in the second quarter of this year and $13 million in the first quarter.
We did collect $82,000 of prepayment penalties in the third quarter, that compares to $29,000 in the third quarter of last year. On a year-to-date basis, prepayments $346,000 this year compared to $157,000 in 2019.
Something we began doing in our March 10-Q is that we put in the exposure to certain sectors. I'll update you on that the dollars and percentages, really didn't change much. Change really is just some slight pay downs on the - based on the payment activities. And these percentages outstanding obviously they exclude the PPP loans.
For churches $18.2 million or 4.5% of the outstanding loans. The restaurants $5.8 million or 1.4% of the outstanding. Elder care $6.6 million or 1.6%. School childcare that's $4.6 million or 1.1% and then the recreation, which is golf and then sports clubs and the like, that's $1.9 million or 0.5%. And then oil and gas $6.2 million or 1.5%.
And as I said last quarter, really considered oil and gas that the loans are the gas stations, the oil change facilities, it could be gas station with car washes and indoor convenience stores. As a reminder, we did not have any hospitality loans again at the end of September.
On the credit quality it's actually looking pretty positive, we didn't have any non-accrual loans or any loans past due that in 30 days at September 30th. One area we're watching closely, of course, is the loans that have been granted loan deferrals, loan payment deferrals. At the end of June, if you recall, we reported we had 107 of those loan deferrals totaling $96.5 million. We did add two more loans in the early part of the third quarter, totaling $3 million. But also in the quarter, we had four loans and total payoff they were totaling $2.1 million that paid off in full.
So at the end of September, we had 70 loans returned to paying status or by the end of September 70 of those loans returned to paying status. So the number of loan deferrals as of September 30th, 2020 was 35 of those for $38.3 million.
Four of those loans, totaling $4.1 million are in their initial deferral period by the remaining 31 loans or $34.2 million had been granted an additional deferral period. For example, they might have had an initial three month and we've extended them to the six months. I did mention earlier that we didn't have any loans past due in 30 days, that would include these 70 loans that had come up deferral in the third quarter, they're still considered current.
So we have $28.8 million or 75% of these remaining deferrals that are expected to begin paying in the month of October. So it's a pretty big month here. And I did a quick little check here before I came in. Of those $28 million in loans, call $29 million in loans, 18 loans for $20.2 million already beginning to making their payments in this month. So in essence, they've come up with referrals, they are continuing to - they started making payments again.
And so if you pull those out, the remaining deferral totals as of this minute here, 17 loans totaling $18.1 million, I think we've made pretty good progress there. I'm getting those things reduced that but that's nearly $100 million at the end of the quarter and the last quarter was higher than I think I expected, but quarter - third quarter really knocked those down and then here again in October, so some positive news there.
On the allowance, we did add $445,000 in provisions for the loan losses. And really that's due to the still - unknown effects of COVID-19. Although we believe that credit quality was sound at the end of the quarter, and we are having success reducing the loan deferrals, we don't really know the depth of the economic impact that COVID-19 will have. So we believe the increase in the reserve this quarter, along with the $1 million we added in the prior two quarters is prudent.
We continue to do a deep dive on all of our loans, paying particularly attention to the deferrals and then we incorporate that we do the analysis for the amount we needed at the end of the quarter. We're going to continue to stay in front of our borrowers and monitor the impact of the COVID-19 and all of them and adjust the ALLL accordingly.
At the end of the quarter that ALLL to loans was 1.38%. Of course the PPP loans had a different game too that's appropriate to look at that adjusted ratio. So the adjusted ratio is 1.64%, that's up from the 1.58% at June 30, 2020 and 1.32% one year ago. During the third quarter, we did have one small $27,000 loan loss on a commercial line of credit. Year-to-date, the net charge-offs are just $7,000. We still do have the one OREO property at a book value in $846,000. So no change there as well.
As for the loan growth I mentioned earlier, during the quarter, commercial grew by $4.3 million or 10.8%. CRE grew by $9.6 million or 4.5%, real estate construction that's up $3.7 million or 13.6%, followed by consumer which grew $600,000 or 2.1%. We did experience a decrease in multifamily that was - those were down $5.7 million or 11.7%. Residential decreased $1.2 million or 4.5%.
And I said the growth in the commercial that included some new loans made during the quarter and some advances made on loans in the prior quarters. Construction primarily in the commercial construction and the growth in the consumer, that's our specialty auto portfolio. We added 51 new loans there during the quarter average of just over $100,000 on those compared to 56 of those loans during the second quarter of 2020 for an average of $41,000.
The average rate on these new loans of the $33.2 million of new loan commitments during the quarter was 4.56%. We also renewed $14.6 million in existing loans during the quarter, those rates averaged about 5.5%. The classified equity ratio at the end of September was 2.7%, that's up from 1.3% at the end of June still real low numbers. With the makeup there, the hold over OREO $846,000, we had that on the commercial loan, that's a hold over $131,000. We did out of the classified of commercial real estate retail related loan for about $1.1 million.
As the investment portfolio really no significant changes there, well-structured cash flow in mortgage products and some high credit quality mini bonds, portfolio still remains relatively short, average life so the entire portfolio about four years, effective duration of the entire portfolio still quite low about two and a half years. And then the price changing rates up 300 it's about 8.5%.
Under the liabilities, deposits end of the quarter $728.8 million, that's down $12.9 million or 1.7% from the June 30 balance of $741 million. But it's up a $116 million, about 19% from the $613 million one year ago. We like the growth, we do realize that some of that's - some little bit of PPP leftover some of the other government programs and [inaudible] to quality, but you know a lot of that with the decrease in the quarter that I mentioned was due to tax payments that due on July 15th.
But we are having success being a lot of new relationships over that's expanding existing relationships, finding new ones or really going after the clients that we helped to get PPP loans so bringing in some of their deposit dollars as well.
As you would expect much of the decrease in the balances in the quarter within the non-interest bearing that makes sense to me, because that was the largest increase over the last few months. Non-interest balances dropped about $14.6 million in the quarter. They're still up $67.3 million, or 29.5% year-over-year. And they make up 41% of our total deposits, that's up from 37% of our total deposits one year ago.
We have been able to reduce our deposit cost because of the low rate environment one year ago, the overall cost deposits of 36 basis points that was in the third quarter last year. And then in the third quarter of this year, it's dropped to 14 basis points.
No change in the borrowings outstanding at the end of the quarter, there were still $27.5 million, that we did roll one and reset it to a lower rate. As of the end of September, we still have a $2 million in the FRB's Paycheck Protection Program included the funding. We did pay that back last week the full $2 million, 35 basis points seemed like a nice low rate when we funded it, but liquidity didn't become an issue. So it made sense to pay us back - pay back.
Our average borrowing costs at the end of September was 1.45%. Our capital, capital level still remains strong. They've increased from $82.9 million at the beginning of the year to $91.7 million at the end of September, that $8.8 million increase came from an income roughly $5 million. Our AOCI is up 4.7% due to the continued decrease in rates helping our bond portfolio. And then the difference there. Although we did pay the cash dividends of 1.2 - $4.2 million for the year. That remaining $300,000 increase relates to equity compensation.
Sticking with capital, our leverage ratio was 8.2%. At the end of September, total risk-based capital about 16.5%. Both the leverage ratios were down to from the end of the year it was 9.2%. Really the increase in our assets with deposits was the primary reason for the decrease in the leverage ratio. You may have seen the press release earlier that Dave mentioned, quarterly cash dividend to be paid next quarter.
Some of the income statement really briefly here. Not a lot non-interest income down a little bit compared to the third quarter last year and then also down really from the full nine months. Last year we got $87,000, primarily lower service charges on deposit accounts, those got from $409,000 in 2019 to $381,000 in 2020.
Also gains on sale securities those dropped from $74,000 last year to $38,000 this year, again that lower service charge results from lower fees from return checks, those dropped about $50,000. And really the primary reason there is, our clients have higher balances in their checking accounts in a much lower level of checks causing overdrawn balances. Our core service charges though those are up about $20,000 that's positive.
On the expenses, we did increase during the quarter. So we were at $4.1 million in the third quarter last year increased to $4.2 million in third quarter of 2020. Part of our area that increased was the FDIC insurance assessments. And we had a reversal in the third quarter of 2019 to an extra expense of $60,000. This year, you probably remember that the last year the third quarter, we received that FDIC's small business or small bank assessment credits that was short lived.
One other thing here. The other lines that did increase $51,000, with the largest piece there being the internet banking fees, which increased $43,000 and then includes some cost associated with our new online banking system which we converted to earlier this year.
For the first nine months, this year versus last year, similar, we actually had a decrease in overall non-trade expense. And that goes back to what I talked about last quarter, the deferral of the loan origination costs associated with PPP, so salary and benefits were down $158,000. But the salary piece, core salaries were up about $49,000 year-over-year, that's a little less than 1%. But the loan origination costs those directly related to the PPP, really, those were up $295,000 that's up, that's really a reduction of the expense and those were negative.
The benefit from the loan origination costs are somewhat offset by higher salaries. I just mentioned the $49,000 increase in core salaries. We also had a higher allocation so a vacation accrual of $42,000. Equity compensation increased $47,000. The salary really that's related to normal cost of living increases and promotions. Because we're staffing levels are about the things that were a year ago.
Allocation accrual that had to increase because the staff hasn't taken applications due to the COVID-19 restrictions. Let's see the decrease in non-interest expense year-over-year is also due to a decrease in other expenses. The one area that jumps out is the advertising business development. Those were down about $250,000. Again, that's related to the shelter in place orders that our markets reducing the number of business development opportunities and the events that we could sponsor.
Partially offsetting that decrease would be internet banking fees, which increased $74,000 during the year. Again, that's partially related to the new online banking. In addition, I mentioned this last quarter, Director fees were up $65,000. But of that the non-recurring amount for the director that passed away, that's $70,000 that we did the full expense for last quarter.
On the taxes, you know they did increase for the quarter, they went up at $86,000 about 15%.
And then for the year they were up $418,000, that's about 30%. And our effective tax rate for the first nine months this year was 26.6% compared to 25.7% during the first nine months of last year. Really the increase in both of those the effective tax rate and the higher provision. We have a lower level of tax-exempt investments in the equity compensation that's less benefits from that.
And of course the taxable income did increase on the tax benefits from the equity comp. Last year, we actually had a tax benefit of $30,000. This year we had a tax expense related to the equity comps, so probably a switch there about $66,000.
Thank you and I'll turn it back over to Dave for some additional comments.
David Ritchie
Okay, thanks, Mitch. So yeah, you know, we can continue to make some really good progress in the third quarters' results have shown. You know, we are all living in a state of disruption for the foreseeable future. So we have to remain flexible and then flexibility is paramount. As you know, California is the most restrictive state in terms of the pandemic coupled with the wildfires, it's definitely made it very interesting to manage through this process.
But we will continue to follow the guidelines with the CDC and make adjustments as we go and hopefully make adjustments that help our team members and our clients. You know, all in all, I really think we've done a really great job operationally, we've been, for the most part, I think all our branches have been opened for the almost the entire pandemic, we had a few shutdowns, but not too many. So the folks here are doing a great job.
You know, from my perspective, on the credit side, obviously, the credit area is obviously a high-risk area for banks. You know, I'm pleased, we've - you know, we instituted this increase monitoring on the portfolio, I'm really pleased with that. I think the fact that we're staying in front of our clients is very big just from a communication standpoint and kind of giving us heads up on some potential issues and whatnot.
You know, we're pleased with a number of - the number of deferrals. Obviously, Mitch just gave you some of the numbers, very pleased with the way that people are resuming their payments. We were a little high in the beginning, but I think we chose that direction, we wanted to help our borrowers soon in the process. And obviously, that seems to be working out for us and them.
I would say that the credit culture here is really sound and the policies have been very effective. As many of you know, we rewrote those policies a couple of years ago. And, you know, obviously, we've grown but we've been sticking to our policies for the most part and they've been serving as well. As Mitch said, we did increase the provision. You know, I think we've just decided to take a conservative approach with the unknown to the economy.
Good news. I mean, as Mitch said, our deposits are up for the year. It's not just from PPP funding, and almost all those funds have been obviously used by the borrowers. And, you know, it's a tribute to the service of this bank. I mean, the service levels in this company have always been great and they seem to continue to get great - greater. So I think we're very blessed in that, from that standpoint.
You know, the number of new relationships are growing, opportunities are coming from, you know, the lack of service in the big banks, and then just generally a lot of referrals from existing clients. So that's also really positive.
You know, I think the other piece of that, and I've stressed this before and what we're seeing now is, we've got, yeah, I think through this year, a lot of new relationships have been formed with our retail team and our lending teams. And in the perfect world, they work together in unison to bring in relationships, and we're starting to see some real success there with joint calling and things of that nature. So I'm very pleased with that.
On the loan front, you know, a good quarter. I mean, we got back to kind of the average we've been averaging for the last six or eight quarters around $33 million. You know, that's pretty good considering and there's about a six-month pause. And I think in the economy for this first and second quarter, so we're happy about that. I think I'm really happy about the new production is real granular, you know, that $33 million, if you take out our - some of our classic car portfolio, loans we made the classic cars, the average loan size was like $1.4 million. I'm happy with the granularity there.
So all in all, I think we're moving in the right direction. The pipeline is strong for the fourth quarter, and it's continuing to grow. So all that said, you know, I'm cautiously optimistic about The Bank revenues, profits, deposits are certainly going in the right direction, coupled with, you know, the return of the loan production. And I think we've also done a great job on expense management.
So with that, I will turn it over. Vanessa, if you could open up the lines for questions, we'd be more than happy to answer them.
Question-and-Answer Session
Operator
Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Nick from Piper Sandler.
Nick Cucharale
Good afternoon, guys.
Mitch Derenzo
Hello there.
David Ritchie
Hey, Nick, how are you?
Nick Cucharale
Doing well, thank you. So you had some solid loan growth this quarter and I heard your positive commentary on the pipeline. I appreciate as always, the market updates included in the release. But can you give us a sense for the competitive dynamics in your market and where you're seeing opportunities?
David Ritchie
Yeah, you know it is - it's interesting. It's a little all over the board. But I would say that there is competition as always, but there are banks that have - are pulling back noticeably. There's one particular bank that said in the market that they've pulled back their realized, there's others that have just, you know, just I think, kind of waiting this thing out.
So we have to have some nice opportunities there, Nick. And there's still a handful of local banks that have been fairly competitive. But for the most part, we were seeing great opportunities. And I think that's all I can really tell you.
Nick Cucharale
Great. You had a nice improvement in the deferrals relative to last quarter. I just wanted to make sure I got the numbers correct. Mitch, did you say as of today you're down to 17 loans on deferral for a total of $18.1 million. Is that right?
Mitch Derenzo
That's correct.
Nick Cucharale
Okay, great. And then what was the remaining amount expected to begin paying by the end of October?
Mitch Derenzo
Well, initially there was - at the beginning of the month there was $28.8 million it was supposed to pay that in payments we're going to start in October. Of that, based on that what I got right before I left that's come in here $20.2 million have started paying already. So that would be $8.6 million that have payments due either you know within the last couple days or between now and the end of the month.
Nick Cucharale
Perfect. Thank you so much and -
Mitch Derenzo
Yeah anything after that's going to be November, December. But November and December is tended to be small amounts. Really, October was the big piece. Would I say 75%. Yes, so 75% of the deferrals as of September 30th we're going to have payments in October. And I'm pleased to get you know have October starting off so well.
Nick Cucharale
Okay, that's great color. Were any of the remaining modifications disproportionately represented in the list of exposures you ended up?
Mitch Derenzo
No, no, I - of the exposure list related I don't think any of those had deferrals.
Nick Cucharale
That's great. And then just lastly, your total capital ratio at the holding company is up nearly 60 basis points from the end of the year, you continue to have strong internal capital generation, despite the reserve builds. Can you help us think about your capital priorities? And specifically - when you may revisit a buyback?
Mitch Derenzo
It's not going to happen this year. I just know, we declared the dividend last night. Typically, it's a slam dunk, but have to do a little more support. Really, the regulators are kind of keeping an eye on those things. What are we using our capital for?
So I think, you know, we got to write this thing out first here and see what's going to happen with COVID before we can start doing a buyback, it's hard because as you know, we're trading versus book. It's on sale. And I'd be loving being able to buy it back by right now. But I just think it's prudent to be focused on our, you know, focusing on the capital.
Nick Cucharale
Thanks for taking my questions.
Mitch Derenzo
Sure.
David Ritchie
Thanks, Nick.
Operator
Our next question comes from Tim Coffey. Your line is open.
Tim Coffey
Thank you. Afternoon, everybody.
David Ritchie
Hello, Tim.
Mitch Derenzo
Hey, Tim.
Tim Coffey
David or Mitch, how soon do you think business marketing expenses get back to a normalized run rate?
Mitch Derenzo
You know Tim, I don't know if we did $33 million in the quarter has been settled or not, I'm going to limping it.
Tim Coffey
I know you don't really [technical difficulty]
Mitch Derenzo
It's hard because you know, a lot of these event I mean, but we've started putting a little bit more out on these virtual type events, sponsorships, those things. It's still going to be sometime next year. Now you know, we're still finalizing our budget for next year. It's hard. It's heavily hard to predict when that's going to just come back. But we're optimistic that, you know, for the second quarter, we should be sponsoring some more live activities, but that all could come to a halt if things change here.
Tim Coffey
Okay. And Mitch since I got you, can you run through the PPP loan forgiveness data so far?
Mitch Derenzo
Yeah. Walking into the figures that's another thing I tried to get updated. We had 23 loans forgiven for about $1 million. We have 49 more so $19.2 million that have been submitted to the SBA. And then we've got 55 applications for just over $5 million that we received from our borrowers that were going through and crossing the T's and reviewing before we file those with the SBA. But you know we expect that to be done fairly close.
So if you add up the numbers in number of loans, that's roughly 30% of the loans have been forgiven or in the process. And then if you add up the dollars, it's like 38%, 39%. So we're, you know, we're getting there.
Tim Coffey
Yeah. And then do you have the weighted average yield of the loans originated during the quarter?
Mitch Derenzo
Yeah, it's 4.5 - 4.56 to be exact, Tim.
Tim Coffey
Okay, that's pretty - that seems pretty close to the yield, if you exclude PPP, on the total portfolio, I think it was around 4.89. Do you get the feeling that, you know, compression in the margin is waning?
Mitch Derenzo
Well, you know, as did talk a little about the competition. It's - there's competition out there, but it's not fierce so we're not seeing - we're not really competing as much on rates. I'm happy that, you know, we're doing loans with that start with 4s, you know, we haven't had to go down to the 3s. And, you know, they're not all at, you know, 4%, 5%. But there's enough that are in the mid 4s to really hold us pretty steady.
I'm hoping that continues as we get these PPP funds back. I don't want to keep it in my Fed account. And as you know, there's not a whole lot we can invest in the bond portfolio. So you know with the fact that I see some that pipeline, kind of kind of excites me.
Tim Coffey
Okay, great. And, Dave, yeah, we're going to hear from other banks this certain season is that a lot of theory borrowers have kind of moved to the sideline kind of wait to see how things shake out in terms of the election, the resolution of the virus, things of that nature. Yeah, you guys had pretty good CRE growth during the quarter. Was it just a function of you finding the right people to bring off the sidelines or just, you know, Constant Contact, and they finally decided to make a switch?
David Ritchie
Well, I think it's been the constant contact for one, two. I talked a little bit about their, you know, the competition, some of it's not as aggressive today. And that's probably because of the pandemic. But, you know, some of them if you know, because you know, there are some banks, some are a little loaned up to, I would say or have been and so we're seeing, I think we're seeing, you know, there's good end market stuff.
We're seeing a little bit of some of these investors are doing some things up in Reno, Reno is a pretty hot market today. So we've seen a little bit of that as well. But, you know, I really think this business is just staying in front of the people and being there at the right time.
Tim Coffey
And then the last question for me, in terms of the fires that we've had this summer and your footprint. Have any of your operations been impacted or your borrowers impacted?
David Ritchie
Not, not at all.
Mitch Derenzo
Yeah, just some closures - a couple of days or so and inconvenience of folks having to evacuate but it's unfortunate. It's becoming pretty, people haven't figured it out. They've always got their cars packed and ready to go.
Tim Coffey
Yep. Okay. All right, that was my questions. Thank you, gentlemen.
David Ritchie
Sure, Tim.
Operator
There are no more questions at this time.
David Ritchie
Okay, well. Hey, thank you all and I will look forward to updating you at the end of the next quarter. Thanks again.
Mitch Derenzo
Thanks, Vanessa.
David Ritchie
Thank you, Vanessa.
Operator
Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.
