Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Rick Weiss - Janney.
Rick Weiss - Janney
I was just wondering, if you could talk a little bit about the increases that you’re seeing in the commercial loan demand? First, is that coming from C&I lending or commercial real estate. Also, have you done anything in terms of changing your pricing I suppose or any kind of underwriting standards?
Chris Martin
This is Christ, Rick. We’ve seen it from all sides. The commercial real estate is definitely slow, but the commercial has done very well. We’re seeing a lot more opportunity that other banks have not been focused on that and we’re getting a chance to meet some very solid customers going forward.
Pricing wise, I think again the competition is really not as heavy. We’re able to get a little bit better pricing than we have in the past, certainly adjusting for the risks in the market. So that helps certainly in the margin going forward.
Rick Weiss - Janney
Okay and do you expect continued deteriorations in the area, especially as WallStreet layoffs seem to be occurring almost daily?
Chris Martin
Well again, if you’re looking at the one to four or are you talking about the reciprocal to the commercial?
Rick Weiss - Janney
Well probably however it affects you the most?
Chris Martin
Well again, we didn’t really lend to a lot of the WallStreet people on a one-to-four basis. Certainly businesses they would utilize in the way of restaurants or strip centers or big box stores will certainly be feeling the effects and I think that’s going throughout the economy. For the most part as we talked about, it was more of three of the larger loans that have been on our radar for while, we’re just trying to get them back into a performing status, beside from that not dramatic.
Rick Weiss - Janney
Okay and when it comes to the reserves, I think Paul said that $2 million or so, the addition to reserves was due to loan growth. Is there more of a see change now with the auditors or SEC that they’re saying that ?hey, we better reserve because things are getting worse? or they’re lightening up in terms of unallocated reserves?
Linda Niro
No. Rick, I strictly related to again loan growth depending on the type of credits on the commercial sectors; it goes on our books to sign the rich rating and there’s a reserve factor associated with that rate out of the gate. So, we just wanted to give some color around why that $8.5 million provision was recorded and again, $2 million of it was strictly due to new loans coming on the book.
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