ServisFirst Bancshares, Inc. (NASDAQ:SFBS) Q3 2020 Earnings Conference Call - Final Transcript
Oct 19, 2020 • 05:15 pm ET
Good day and welcome to the ServisFirst Bancshares, Inc. Third Quarter Earnings Call. [Operator Instructions] Please note this event is being recorded.
I would now like to turn the conference over to Davis Mange, Director of Investor Relations. Please go ahead, sir.
Davis S. Mange
Good afternoon, and welcome to our third quarter earnings call. We will have Tom Broughton, our CEO; Bud Foshee, our CFO; and Henry Abbott, our Chief Credit Officer covering some highlights from the quarter, and then we'll take your questions. I'll now cover our forward-looking statements disclosure. Some of the discussion in today's earnings call may include forward-looking statements. Actual results may differ from any projections shared today due to factors described in our most recent 10-K and 10-Q filings. Forward-looking statements speak only as of the date they are made, and ServisFirst assumes no duty to update them.
With that, I'll turn the call over to Tom.
Thomas Ashford Broughton III
Thank you, David, and good afternoon. As a backdrop to our call today, I'll give you an update on our -- where we see the economy. We've seen a really nice rebound in the economy in the last several months. One helpful thing is the Southeast of the United States has never had to shut down just like many areas of our country, and it's not had the social unrest problems in many areas. So it is now fully reopened. Unemployment rates on average in the Southeast are under 7%, which is much lower than most of the country, so we're fortunate in that regard. We're not seeing many issues even in affected industries, and I would -- we'd attribute that partly to softer and shorter shutdowns in the economy.
We've also seen that well-run businesses adapt to a new environment and that is what we have seen even in industries that have been affected by the -- highly affected by the pandemic. We did have one client that had a 100% revenue loss due to COVID and the company was restructuring the quarter. Henry will talk a little bit more about that in a minute. Let's talk about our loan pipeline level. It sort of hit a low at the end of the last quarter. And it's now back at record levels, up 40% over last quarter. So we are seeing a nice rebound in loan demand since mid-July. The pipeline has more small closings pending in large part due to our banker's efforts in the PPP program assisting customers of other banks. So we're starting to see those customers transition their banking over to us now from their former bank.
Many projects are moving ahead where we -- both we and the client hit the pause button during early part of the pandemic. The multifamily and industrial commercial real estate loan demand does seem very robust. We do -- there's significant lags in growth of outstanding -- loan outstandings with the construction loans so we have a pretty good backlog of construction loans that'll ramp up over the next