Hello, and welcome to the Renasant Corporation 2020 Third Quarter Earnings Conference Call and Webcast. [Operator Instructions] Please note today's event is being recorded. I would now like to turn the conference over to Kelly Hutcheson of Renasant Bank. Please go ahead.

Good morning and thank you for joining us for Renasant Corporation's 2020 third quarter webcast and conference call. Participating in this call today are members of Renasant's Executive Management team. Before we begin, please note that many of our comments during this call will be forward-looking statements, which involve risks and uncertainties. There are many factors that could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements. Obviously, the continuing impact of the COVID-19 pandemic, the federal, state and local measures taken to arrest the virus, as well as all of the follow-on effects from this pandemic situation are the most significant factors that will impact our future financial condition and operating results. Other factors include, but are not limited to, interest rate fluctuation, regulatory changes, portfolio performance and other factors discussed in our recent filings with the Securities and Exchange Commission, including our recently filed earnings release, which has been posted to our corporate site, renasant.com under the Investor Relations tab in the News & Market Data section. Furthermore, the COVID-19 pandemic has magnified and likely will continue to magnify the impacts of these factors on us. We undertake no obligation and we specifically disclaim any obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. In addition, some of the financial measures that we may discuss this morning may be non-GAAP financial measures. A reconciliation of the non-GAAP measures to the most comparable GAAP measures can be found in our earnings release. And now, I'll turn the call over to our President and Chief Executive Officer, Mitch Waycaster.

Thank you, Kelly. Good morning and thank you for joining us for today. Before Kevin and Jim discuss our results for the third quarter, I want to offer a few comments regarding our markets and employees. Throughout our region which broadly runs from the Mississippi River to the Atlantic coast in the Southeast, economic activity continues to slowly improve. Though at an uneven pace, businesses are adjusting and while certain sectors remain fragile companies are for the most part cautiously optimistic. The consumer came into this recession in relatively good shape, and while still hurting is persevering. Overall, the pace of economic opening varies across our markets, but remains on a gradual uptrend. I am very proud of our employees for their extraordinary efforts during this period. Despite the physical separation, we have in many ways grown closer and stronger as a team. Economically speaking, we have been among the first responders. It was only a few months ago that we facilitated over 11,000 PPP loans for borrowers in excess of $1.3 billion. And now we are guiding our clients through the forgiveness process. Likewise on loan deferrals, we are actively engaged with our clients to find the best plan for them and the bank and have seen the level of deferrals decline dramatically. We always seek to provide high levels of service and I believe our team has responded brilliantly during the pandemic. Now I’ll turn it over to Kevin.

Thanks Mitch, and good morning. We are pleased to report third quarter earnings of $30 million or $0.53 per diluted share. The quarter was highlighted by loan and deposit growth, strong levels of fee income particularly by mortgage banking, improved capital strength and a meaningful build in our allowance for credit losses, while all credit metrics remained stable or saw improvement. The pandemic highlighted the need to deliver our services more conveniently and efficiently. We made significant technological investments before the pandemic and our clients and employees are benefiting from those investments. After being close to regular traffic since mid-March, we completed the phase reopening of our branch lobbies in mid-October with full consideration of CDC Health and Safety guidelines, and we are proud to be serving our clients across all of our delivery channels once again. As we reopen our branches, we continue to see adoption of our technology offerings by our customers, as almost every digital, mobile, or online loan application offerings increased significantly since the onset of the pandemic. We expect continued investment in new products and intentional efforts to encourage utilization will lead to further increases in our future adoption rates. As the pandemic and any related economic impact continue to evolve, we are constantly reviewing our expense base for opportunities for cost elimination and efficiency gains. Through the first nine months of this year, we have tightly monitored our expense run rate, but recognize we must reduce expenses further in future periods. And we are taking action to do so. However, to maximize operating leverage, we must grow into some of our investments, while at the same time reducing expenses. We believe our loan growth and production in the quarter coupled with continued reductions and expenses provide a roadmap on how we plan to improve operating leverage in future quarters. I will now turn it over to Jim, who will further discuss the quarter.

Thank you, Kevin. I will refer to the earnings deck while commenting on key themes for the quarter. We prioritize core funding, asset quality, and capital strength and our decision making. So I will start with a review of the balance sheet. Deposits continued to see growth in the quarter, and we're up $88 million or 2.9% annualized. For the year, total deposits are up $1.7 billion, and most of that growth has been in non-interest bearing accounts. 96% of deposits are core and the company has virtually no wholesale funding. During the quarter loans grew to $11.1 billion. Excluding PPP loans are up 2.2% annualized for the quarter, and 1.2% annualized for the year. Future quarters are likely to see declines in PPP loans and result in the associated deferred income to be recognized on an accelerated basis. Asset quality measures are reflected on Slide 13 through 15. Non-performing assets, which remain at low levels represented 40 basis points of total assets excluding PPP, and were essentially unchanged from the second quarter. Loans 30 to 89 days past due represented 17 basis points of loans, excluding PPP, and were up modestly compared to the previous quarter. Additionally, loan deferrals continue to decline, and as of October 23, represent 2.9% of loans outstanding excluding PPP. Forecast for sluggish GDP growth, relatively high unemployment levels, the prospect of a prolonged recovery and general economic uncertainty led to an increase to the allowance for credit losses. The allowance for credit losses as a percent of loans excluding PPP rose 22 basis points from the second quarter to 1.72% at the end of the third quarter. For the quarter, return on average assets and return on tangible equity were 0.8% and 10.9% respectively. Net interest income for the quarter was $106 million and was up marginally from the second quarter. This was driven by an increase in earning assets, which was somewhat offset by decline in net interest margin. Reported margin in the third quarter was 3.29% as compared to 3.38% for the second quarter. As seen on Slide 21, non-interest income increased $6.8 million from the previous quarter and was largely driven by continued strength and mortgage. Additionally, wealth, insurance, and service charges also showed gains quarter-over-quarter. Non-interest expenses were down to $1.8 million to $116.5 million, a $5.7 million reduction in COVID related expenses somewhat offset increases in expenses in our mortgage division, which were tied to production. The core efficiency ratio for the quarter was 63% and was up from the second quarter. While there are signs of improvement as Kevin noted, efficiency is an area of focus for the company. I will now turn the call back over to Mitch.

Thank you, Jim. In closing the uncertainty that has clouded much of 2020 remains as we began the fourth quarter. We are unable to accurately predict the long-term impact of the pandemic and the continuing limitations on economic activity will have on our stakeholders. But our commitment to the safety and security of our employees to understand and then meet the needs of our clients and to being a good citizen in our communities will support our success through this cycle, and will continue to provide value to our shareholders. And now I'll turn the call over to the operator for Q&A.

[Operator Instructions] And the first question comes from Jennifer Demba with Truist Securities.

Mitch you said that the - I think Kevin actually said the path to better operating leverage is through loan growth and expenses. So can you just talk about the near term outlook for both?

Sure, good morning, Jennifer I may let Mitch talk about loan growth first and then I'll follow up with expenses.

Jennifer, just as we reflect on production in the third quarter, I'll go back to the third quarter. And as we discussed on this call, last quarter, we were then looking at a pipeline going into 3Q of $229 million and similar today, not a lot changed $219 million pipeline as we go into quarter. So we continue to see good, but I would say cautious deal flow and pipeline across our markets and business lines. And we continue to hit on multiple cylinders. As I look at that pipeline 24% is in Tennessee, 16% in Alabama and then the Florida Panhandle, 18% in Georgia in Central Florida, 14% in Mississippi, and 28% in our corporate and our commercial business lines. So the pipeline and back to your question the pipeline are $219 million. We would expect about $65 million growth in non-purchase and that would indicate a production for the quarter somewhere in that $550 million, $625 million range. We just ended the third quarter with $636 million with production, which compared to $521 million in the prior quarter. So continue to see good deal flow, as I mentioned, in various lines of business and geographies, from those that joined the company in the prior quarters, particularly in my team, and earlier this year about 25% of our production continues to come from that team. So again, broadly across the footprint in various business lines. I would add this and just relative to payoffs, we did see payoffs increase about $45 million. They were $578 million this prior quarter versus an average of about $533 million. So pay-offs is a variable. And of course until we see a sustained resolution, the pandemic is somewhat difficult to give a clear picture on the net results of the production. Kevin?

Sure so Jennifer, just on the expense side, and as you know over the last, but beginning last year, an active initiatives to help bring down expenses. That was before we started to experience revenue headwinds. This year just highlighted the need to increase those initiatives. And as we look at what 2021 looks like - with overall just macro, what could be macro headwinds we still think there's ways to be opportunistic, and find wins along the way. But at the same time, we're going to have to be very focused on the expenses and ensuring that the accountability measures that we have in place and whether that's on the branch, whether that's on the employee on the lender, on the vendor, all of those are aligned with some of the headwinds we may experience on the revenue side. I know we talk a lot about the hiring we've done and we will continue to be very selective in our hiring. But actually this year, I believe we're down seven producers this year just as a result of accountability measures. And so, our growth that we're experiencing is actually occurring with less production managers at the same time, and instead those types of initiatives are - need to carry us into 2021.

Jennifer just to follow-up Kevin's comments relative to the relationship managers. And as we were opportunistic last year and adding some 50 or so relationship managers. As Kevin said, we've continued to be opportunistic this year with 24 additions, but we've had 31 exits. So it speaks to our accountability and our focus on those measures that Kevin just mentioned. And back to the points on production, we’re able to do that while we continue to drive our growth in our production and net loan growth.

So on expenses is the goal to keep those expenses flat over the next few quarters or what is specifically the goal as you look and is the third quarter rate, a good run rate?

Our intention would be really to focus on efficiency and driving meaningful improvement in efficiency, knowing that some of that will come on the revenue side, revenue enhancement where we can. But we also have to be mindful and have expectations that the expense run rate will be coming down.

And the next question comes from Michael Rose with Raymond James.

So, I understand that the reserve build this quarter, but it is, a little bit higher than what we've seen it at other banks. Is the way to read this just kind of an abundance of caution, because we don't know, exactly what's going to happen in the future? Are you actually seeing anything in your portfolio that you would give you some sort of indication that you needed to build reserves again, this quarter when most others, you know did not? And then just as a follow-up to that, when I look at your slide deck this quarter, it does look like you removed two of the categories from that risk portfolios, and I think you removed entertainment and then retail trade, that was a little interesting. I guess, because, healthcare still in there, but you've removed, I guess restaurants. So how do we kind of just – please try and put that altogether for us because I think that's the biggest question out there right now? Thanks.

Good morning, Michael, this is Jim Mabry. And I'll start and then as David Meredith to answer your questions on sort of impacted industries and how we look at those. But as it relates to the provision expense, I would say, generally, we feel good with the credit metrics. And I think, as you saw in the slides that generally they're tracking well and very favorably and again David will comment more on that. But I would say that that data suggests and the things that we're seeing suggests that losses will be considerably less than what the industry thought a few months ago. That being said and while things are improving, it's still an uncertain period. And as the CECL model that we use as both quantitative and qualitative inputs. And on the quantitative side, we did make some adjustments from Q2 to Q3, but I would characterize them as generally having a modest impact on the calculation for allowance. The qualitative overlay continues to have the biggest impact on the model. And I would think, assuming that the credit outlook continues to improve, it would suggest that for us anyway, the heavy lifting would be behind us in terms of provisioning. And that bodes well for meaningful decline in future provision expenses from here, and hopefully leads to reductions in the ACL down the road. David?

Thank you Jim, on the on the deferral conversation. So if we look at where we are as of October 23, and those industries that you mentioned. So we pulled out a few and so with arts and entertainment, we pulled out just from the dollar size of deferrals that still remain in that bucket and how we've seen that industry rebound. We're down just from $1 standpoint $8 million in deferral. So not a meaningful dollar amount, restaurants were down 2.8% of that portfolio, $2 million in restaurants and retail were down 0.9% or under $7 million in total. We felt those dollar declines precipitated us bringing those out of the deferral bucket and just as a as a reminder when we pull something out of our deferral bucket it’s because the loan has resumed normal contractual payments. So wasn’t that it matured from the deferral bucket, and therefore we took it out. They had to make their first normal schedule contractual payment for it to come out of that deferral bucket. So we feel very confident, and then in the direction of those loans that have come out. And also as a follow-up on the asset quality standpoint and we continue to do our monthly monitoring what we called our enhanced monitoring on those loans that are in deferral. And so the recognition of assets that need to be migrated to a different risk rating particularly classified and so forth, that may be an indicator of our asset quality, they continue to do that monthly enhanced monitoring on those funds. So, we have real-time risk rating of those assets. And it's not something that's deferred until the end of the deferral period. So that's more of a real-time risk rating.

So I guess put it altogether, it does seem like this is - you guys are cautiously optimistic, because most of the credit trends and the deferral update, and everything seems to moving in the right direction. So I guess that's the way to read it?

I think that's fair. Again, we would hope that in future quarters, the provisioning level is meaningfully less than what you saw in prior quarters. And again, assuming no changes to the outlook, I think all signs point in that direction.

And then maybe just one follow-up question as relates to the mortgage banking business, can you just give us some color on what again our sale margin was this quarter expectations in the near term, MD&A data looks pretty good. You guys have obviously added some lenders over the years picked up a team from another bank. Yes, just any sort of qualitative color you can give us would be helpful, thanks.

Sure, I'll start this is Jim and ask others to add to it. But clearly, we're very pleased with what we’ve seen in our mortgage division that's been quite strong, much like the rest of the industry. And we've seen good margins there, and really good volume. And I would say, early in the fourth quarter, those trends continue. But we also appreciate that we're going to enter a period here in Q4, where we're going to have a seasonally slower period of time. And historically, much like others, the peak of our business is Q2 and Q3. And so it's - I think it's natural to expect some slowdown in the mortgage business as we get further in the quarter. And that will bleed over into the first quarter for at least the first part of it. So in terms of volume, I think that's a reasonable expectation. The margins have held up well for this year, given we haven't both debt and all and have led to really outsized results in mortgage. And I would say that as volumes come down, it's also likely that we'll see some decline in those margins, hard to predict where they'll go. But it will be natural and typical in the business to see margins, compress somewhat as volumes decline in that business.

Michael - what I add to the Jim's comment and to add to your point in your question, I think Renasant’s ability over time to be a consistent performing and mortgage, also to have the appreciation of that financial service, and over time consistently recruit, and build a platform that serves our market, because we do believe that is a core financial service that's paying off for us. We've also proved over time that we can manage expense in that business line - while consistently offering that product. So, we've built a strong team, and certainly they're putting up strong performance. And to Jim's comment, feel good about that business line going forward.

And the next question comes from Kevin Fitzsimmons with D.A. Davidson.

Maybe just a follow-on to that point Mitch that you just made about improving you can manage the expenses in the mortgage business. If you can maybe drill into that a little more and give us a little color on how we should think about that. Because I think obviously the good news is how well mortgages doing right now, but the not so much bad news, but the uncertainty is looking ahead? And saying all right, this is probably as good as we're going to see and eventually not just seasonal, maybe you're dealing with a seasonal slowdown, but we're going to have maybe more of a normalization trend as there's limited folks left to refi and maybe rates eventually start creeping up? But just how to think about that accompanying decline in expenses with - and accompanying - that would accompany a decline in revenues? Thanks.

Absolutely Kevin, and a good question and it's much back to Kevin's comment earlier about how we're focused on growing revenue and building out our teams and every business line. And I would start that discussion by pointing to the consistency of how we've stayed in the business recruiting the right teams. We have very strong leadership in that part of our company. And what they do is they continually build in the support particularly where some of that is somewhat variable, and monitor that within that line of business. And what I was referring to, we've been able to demonstrate in the past, and while it's hard to predict the volume of mortgage and how that will vary going forward. And what I was referencing as our ability in the past as that volume changes to manage through that it's not unlike the way we built our business model. So, I think we're well positioned, as we've demonstrated that in the past, it's hard to predict at this point, but we're proving our ability to do that. Kevin, Jim, anything else you want to add?

Kevin, I would just add in Mitch mentioned that one nice thing about mortgage, it is volatile, it goes up and down. And we're all predicting when it's not going to be as beneficial. But the one thing that is constant in mortgage is expenses are predominantly variable. And so - as revenues ebbs and flows so will expenses. And that's just how the mortgage business is built, is that there's a tight correlation on the expenses and the variability to the revenue.

Kevin, on that point, can you just give us a sense from where the efficiency ratio is today on mortgage and how - when we see that the revenues go down? Where we should think of the efficiency ratio, what kind of band it would stay within?

Yes so, right now or historically our mortgage company, their efficiency ratio tends to weigh on the corporate efficiency by two or three points. They typically ran in the high 60s, low 70s. Right now with the volume they have and the mortgage they have, it's actually - flipped, it's contributing a - percentage point or two to the efficiency. So their efficiency today is in the - it probably has a 50 handle on it, high 50. But that's just a result of just the volumes and the spreads, but the revenue we're experiencing as it reverts back to normal. We think that the mortgage efficiency lands back where historically has been in the high 60s, low 70s.

Great, that's very helpful Kevin, thanks. Maybe just one follow-up on capital and capital deployment, it seems like the capital is strong. And you guys took the step of racing sub notes or sub debt and took - you have the total risk-based up where it is. You guys made the comment that you have the buyback approved, but don't intend to use it. Can you just give us a sense on? Is that due to just getting better visibility or is that due to wanting to get the TCE ratio up to a certain point or is it just more of a regulatory, issue where you don't want to be seeing buying back right now? Thanks.

Kevin, this is Jim, I would say hits all those things plus a few more. And me, at the top of the houses as we think about it, it's really the buybacks are part of a capital allocation thought process. And we've got a number of levers there and putting the buyback in place, seemed to make just good practice, good sense to us. And as you point out, we've got no current intentions to act upon that. But the way we think about capital as - we want to have capital such that we're in a position where we have optionality and flexibility. And we think we've got that and you referenced - us accessing the markets for the debt in the quarter. And that only in our opinion added to our flexibility in terms of capital so, whether it's buybacks, or accommodating loan growth or future M&A. We feel like we're well positioned on the capital front, and that's - again there is no one measure, no one thing we look at, but it's something we constantly think about and evaluate, but we like where we stand.

And the next question comes from Brad Milsaps with Piper Sandler.

I hate to labor the mortgage point, but I was just curious if you had the amount of loans that you sold during the quarter just again, trying to back into that gain among some margin?

If you give me a minute, I'll have that number for you.

Okay. And then while you are looking for that just back to the efficiency discussion in mortgage? I mean, your revenues are up, more than 300% year-over-year yet, up personnel expense, is maybe of a third of that, $10 million or so versus a $30 million increase in mortgage revenue. As revenue comes down is that relationship, sort of hold on the way down or are other costs that we need to be thinking about that could also come out, as revenue adjust whether it be seasonally or because again amongst our margin?

Yes, so it's predominantly in the salaries and employee benefits line item. Yes that's where the majority of the cost is in mortgages, there's some operating costs, closing costs, but the vast majority is in that is that salaries and employee benefits line item. And again, largely mortgage producers they are, they're paid on what they originally in close. So if they're not originally in closing, which what drives revenue, they're not getting paid. There's a little bit of an outsized benefit right now - we've kind of hit a little bit of an inflection point where there's some outsized impact on the revenue side. So as revenue comes down, you're probably not going to see dollar-for-dollar decrease on the expense side. But again, it is variable and you will see relief on the expense side. And just going back to your two questions about loans that were sold, we sold approximately $1.1 billion to $1.2 billion during the quarter. And that margin maintained in that mid 3% range, which I think is pretty clear - it came down a couple of maybe a quarter point in Q3 compared to Q4. So it tightened just a little bit, but still much wider than what we saw any point in time last year.

Obviously, you talked a lot about revenue headwinds that's a part of it, but just any additional color there would be helpful?

Sure, so just as we look at margin, we think that there's going to be headwinds and pressure on the margin just as a result of the environment we're in. But we feel that we're stabilizing and so the core margin that you see, we feel that that's somewhat stabilized. As we look at new and renewed pricing, there's some - there's a little bit of pressure on just new and renewed pricing compared to what the yield portfolio loan yield is? But as we look at offsets on interest expense on deposits, we still think that we have several quarters, several more quarters of relief that's coming on - on the interest expense side.

And I would just add Brad, to what Kevin said, I think directionally, if you look at the last few quarters in terms of core margin, they tell a story I think. Because in Q1, we're at 356, in Q2 we went to 326 and in Q3, we're at 323. So I think that tells the story in terms of directionally where that may head. And that's frankly, the best predictor we've got right now as we look at margin. So I think that's a helpful guide to people trying to interpret the direction of margin from here.

And the next question comes from Catherine Mealor with KBW.

Maybe just a follow-up on that last point you made Jim on the margin just continuing to come down? How do you think about the impact of excess liquidity in the next couple of quarters particularly at PPP forgiveness starts to flow in. Some banks are looking at liquidity actually building as we start to give that forgiveness and just curious how you all are thinking about that?

Well, a couple of things and then I'll ask Kevin or Mitch to chime in. But again, we look at it, we look at core margin. So I tend to isolate PPP and excess cash and accretive yield of course of our accretive yield that continues to come down for us generally. And so, as we look at core margin and think about liquidity going forward. I think on liquidity, the great thing about all this liquidity and excess liquidity is it's forced us to be more aggressive in a couple of fronts. One is on deposit pricing, which we've had meaningful progress. And I think there's more there to be had. And then as it relates to other sort of non-core funding we took out much like everybody else at the beginning of this. We took out some advances to bolster our liquidity position. We've - in the last two quarters pay down a few hundred million dollars on advances at this point I think we've got roughly a little over $100 million left in advances. So that liquidity and the thought of future liquidities enable us to be pretty aggressive in terms of how we manage the balance sheet. That being said and as we go forward, I mean we want to be - we want to be thoughtful about it, because it's not that exciting to take this liquidity and put to work at 1% or less. And so as we think about it, we certainly would love to have the loan growth to put that liquidity to work but I would say - and we've got room on the balance sheet for a larger investor portfolio. But I would say we're going to be cautious there because it just doesn't feel like it's the right time to put a lot of that liquidity and securities at a spread of less than 1%. So, we'll see what the - where we go from here, but hope that we've got some ability to put it work on the loan side in 2021. So we'll see how that unfolds.

And then how about on M&A, your thoughts on just when you think conversations will start to pick up, and when you think you'll be ready for another deal?

Yes Catherine, just a few thoughts and it's a good thought and while we're clearly focused today, on the challenges and I would say the opportunities in the pandemic. And as we consistently done in our past to be opportunistic, whether that's talent, new talent, new markets, but to your point M&A partners, we're certainly continuing to evaluate those opportunities that drive shareholder value. And as always, beginning with culture, business model, making sure the alignment exist, really to answer the question, are we better together. And if you give thought to that, what better time that during the pandemic that we're all walking through to have those conversations about alignment in business model and risk appetite. So certainly, during the pandemic, those conversations continue. And we continue to evaluate opportunities, and that will drive shareholder value. So I think the timing is somewhat hard to define. I think the opportunities, though are certainly evident.

[Operator Instructions] And the next question comes from Matt Olney with Stephens.

On the hotel portfolio, it looks like hotel deferrals came down quite a bit in recent weeks, any commentary you can provide for us on that and any commentary on the occupancy levels you've seen more recently in that book? Thanks.

Sure, Matt good morning. This is David Meredith. Yes, you’re right, hospitality numbers have continued to see improvement there at October 23 - that continue see improvements since quarter end down to about 29% of that book of business $102 million. So we continue to see positive migration, even subsequent to month-to-month end. From a look at our hotel portfolio, again well, we still have some headwinds in front of us. We've seen improvements in occupancy levels. We have only a less than a dozen hotels that have occupancy below 50% at this point. Other ones are above 50%. We only have four properties that are not at breakeven NOI at this point. So we feel very comfortable that the number - the way the hotels have responded was only have four of them with a not breakeven NOI. And also there's still a ways to go and that - but we continue to see month-over-month as we continue to monitor through our enhance monitoring those improved metrics in our hotel portfolio. Again, we’ll continue to have some headwinds there but we’re seeing some positive migrations.

And then sticking on credit I think you disclosed the classified loan levels ticked up a little bit. Any change in the overall level of criticized loan buckets? Just trying to appreciate if there was additional migration into special mention? Thanks.

Sure. We did have some migration as we laid out back in Q2 with our second phase of deferral that we would migrate loans that request a second phase deferral, likely into a special mention or criticized classified category, just because I've asked for that second phase deferral. And so, we did see some migration in our criticized loan pools. There are from I guess from - up by about 88 million or 75 million of an increase due to our hotel portfolio again just putting those assets at our criticized category. And the residual change was about $10 million in our entertainment book that made up the change in our criticize book of business. Again, those loans that are on deferral that we had kind of forecasted in Q2 that if they asked for a second phase deferral we would migrate those loans to a proper risk weighted category, so that migrate business $75 million hotel and about $10 million in entertainment.

Thank you. And this concludes our question-and-answer session. I would like to turn the conference back over to Mitch Waycaster for any closing comments.

Thank you, Keith, and to each of you who joined this morning we appreciate your time, your interest in Renasant Corporation. And we look forward to speaking with each of you again soon. Thank you.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.