Q1 2020 Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Grace Southern Bancorp incorporated first quarter 2020 earnings call.
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There's time I'd like to have the conference over to your host today.
Kelly pulling us ma'am please begin.
Thank you Howard good afternoon, and thank you for joining us for our first quarter earnings call. The purpose of this call is to discuss the company's result for the quarter ending March 31st 2020, before we begin I need to remind you that during the course of this call. We may make forward looking statements about future advancing today.
Actual performance you should not place undue reliance on any forward looking statements, which speak only as of today. They are made.
These statements are subject to a number of factors that could cause actual results could differ materially from the results anticipated or projected for a list of some of these factors. Please see the forward looking statements disclosure in our earnings release.
Resonate in CEO, Joe Turner, and Chief Financial Officer Rex Copeland her all that are on the call with me today before I turn the call over to Joe though to discuss our first quarter performance and we want to take some time to recognize that this has been extremely difficult time for everyone and our thoughts her with those who are most it.
Back to buy Cobot 19, especially those on that front lines at this crisis.
This afternoon, we'd like to take just a few minutes to share a friend or the ways. Our company has responded to the cobot 19 pandemic.
As we manage to this very uncertain and challenging time, we're highly focused on ensuring that health and wellbeing of our associates, providing safe and uninterrupted service for customers and supporting the communities in which we live in served in January we activated our pandemic response plan and of course.
Let's continue to monitor and respond to the effects of the rapidly changing environment that we're all led.
By the ended the first quarter the majority of our markets right under I stay at home mandate, resulting in a sharp reduction in economic activity.
They protect our associates and customers, we follow the CDC guidelines and governmental directive and it's been treated social just didn't think practices, including drive to service the only in our banking centers.
Department teams flooding wed portions of each team working friend disaster recovery site.
And we have about half of our non banking center associates working from home at this time.
We're extremely proud of our associates and how they have responded to this crisis. There resilience there can do attitude and compassion are greatly appreciate it and so evident each and every day as we're serving our customers.
Support our associates during this time.
Hey, take time off and other benefits, where it has been implemented.
These include said for a part time associates for the first time, we are aware awarding then paid sick benefit.
Associates at any associates is placed under restricted quarantine due to the Corona virus will receive pool full pay.
A few weeks ago. The company rewarded all full time in part time associated with special pretax bonuses at a thousand and $600 respected later show our support.
Our customers, where it's because it's ever to serve their needs and provide enter and interrupted service. Our banking center dry foods are open normal hours and our customers have ready access to online and mobile banking services, our eighth hands and I can tell a phone banking and online account opening.
I understand that some of our customers are experiencing financial hardships due to the pandemic, we're actively reaching out to our customers in assisting them with one of the pain relief and loan modification options for our depository customers certain account main maintenance and service fees are being weighed or refunded.
The company has been actively utilizing the carrots act stimulus package to assist consumers and businesses for instance, our teams sprang into actually I'm very quickly a couple of weeks ago did participate in the S. The administered paycheck protection program or P. P P, which provides emergency financial support to.
Small businesses using federally guaranteed loans.
These are the overwhelming national demand by small businesses that you announced just last Thursday, as we all know that funds available in the P.P.P. where exhausted.
The time of that announcement right southern had secured S.P.A. finding for 860 small businesses, representing more than 12000 employees totaling approximately $104 million.
Regrettably, we had several hundred more P.P.T. applications being prepared for at the approval at the time Defense ran out based on recent made recent news reports, we're encouraged that Congress will authorize more P.P.T. funding if and when that does occur we will probably submit these applications to the FDA for approval and.
Hopefully have the opportunity to help additional small businesses in our markets.
To help with a negative impacted cobot 19 in our communities in March we quickly committed up to 300000 to address food and security another critical health and human services needs.
The funds have been distributed all ready to agencies, serving grain center in local markets, because our 11 state franchise.
In the coming months, we know there will be many more challenges coming our way our company will continue to respond with the same resolve indeed commitment to our associates customers and communities.
With that it's my privilege to turn the call over now to Joe Turner.
[noise], Okay, well. Thank you Kelly as Kelly said as we navigate the uncertain and unprecedented Ur Cobot 19 times or company focused on ensuring the safety in welding.
Our associates and customers. We also want to provide our customers would tell me interrupted in quality service.
I want to publicly thank God nearly 1200, great Southern associates for their tireless work and resilience during this time.
I'm so proud of our team in their response to this crisis.
As always I'll provide some brief remarks about the company's performance during the quarter and then I'll turn the call over to Rex Copeland, who will get into it a little more detail on the income statement in the impact of cold 19, another activities.
Our underlying earnings for the first quarter works now we earned at all or for share or almost $15 billion.
The impact of the cold with 19 pandemic did cost us about eight cents per common share in the quarter.
In addition, our earnings were negatively impacted by additional loan loss provision, which I think though will be.
Attribute it to do.
Cobot C.
Performance metrics from the quarter annualized return on common equity was 9.93.
It is return on average assets was 1.2.
Our margin was three four and ARX efficiency ratio was 58.91 person huh.
As far as loans.
Did grow by 41 million during the quarter, an annualized rate of I think a pretty close to 4%.
Our committed pipeline also grew during the quarter by $81 million.
I would say, though that wont activity, particularly in the second part of the.
Quarter, you'll maybe the loan activity, which occurs before alone becomes committed and shows up in our pipeline accountant activity has slowed.
Talking about you know customers requesting loans loan officers brainy requests and to the loan committee that definitely have slowed.
Through March 31 of 2020 credit quality remained very very solid continues to be solid.
Yes.
Charge offs were 237000 empty haven't sparkly low levels continue with historically low levels of Ah.
Classified and nonperforming assets.
The likelihood of difficult economic conditions ahead, though we did increase our allowance for loan losses by $3.7 billion.
We have modified or the number of credits or you know since the impact of cope with my team has been felt we've modified 257 commercial loan.
With a total principal balance of 608 million and 1100, 63 consumer loans and consumer in mortgage loans with Ah.
Balances a $48 million about 70% of those modifications were just relieving the customer the responsibility of making a principal payment.
For three months, so that's primarily what we've done those modifications the categories. They relate to and kind of generally what modification was a there was a pretty good description of that activity in our earnings release.
Our capital continues to be strong.
Our capital bidding our stockholders equity did increase by $11 million to $614 million during the quarter, 4.1% of total assets I think our tangible equity to tangible book people call me.
Tangible assets is about 12 or so.
And during the first quarter, we didn't repurchase about 184000 shares of common stock.
Those of you that are very familiar with our company you know that that you know.
Repurchasing our common stock at opportune times.
Right right time has been an important part of our strategy. Since we went public in 1989, while we have a formal what he.
Refund those are war or stopped or a stock purchase program I think I think our activity in that area will be.
I'm very low if any at all during the second quarter.
[laughter].
Finally, before I turn call over to Rex I want to make a brief comment on the company's near term outlook.
In spite of the obvious economic challenges posed by cope with 19, we expect that we will continue to operate profitably maybe not at the level. You. We saw in 2019, but continue to be profitable and also continue to pay or a quarterly dividends for the foreseeable future.
We have built a very strong capital position over over the past several years and we built it.
For times, just like the thing and the you know there's been times like these are why we've got the capital we do because we didn't get will enable us to.
Operate very well during a difficult environment.
We certainly understand that we are facing a number of challenges are the entire banking industry. I think is facing a number of challenges, meaning that we don't even recognize yet maybe ah, but we think like another tumultuous times, we have the.
Financial flexibility, the technological capability and the human resource capability.
So that we are position and ready to work through whatever comes our way.
That concludes our prepared remarks, my prepared remarks, I'll turn the call over to rest Copeland at this time.
Alright, Thank you Joe I'll start by.
Just talking about a few things that we highlighted in the first page of our of our earnings release related to cope with 19 expenses and things of that nature. We kinda talk about some of these things and then Kelly's comments earlier, but we we did have a one time, especially with a employee bonus that we paid and.
That was about $1.1 million. We also had the contributions that we mentioned which was.
About almost $300000 in the first quarter and then we also had some other expenses just trying to normal things you'd expect depleting services and supplies and equipment and different cost and things like that which was about $103000. So all that added up to we think expenses of roughly about eight cents.
For share of that kind of kobin related.
Items that were in our non interest expense categories.
We also mentioned that we delayed the adoption of Cecil.
In the first quarter, we expect it obviously you under the cares acting with guidance from the accounting professionals and standards centers that we will enact or adopt diesel later in this year either at the end of the year retroactive back to January 1st War.
After the state of emergency has been lifted.
Some possible impacts going forward. We also mentioned in our in our earnings release Ah I won't go over the details are those here, but just refer you back to the items that we mentioned maybe on page four.
Obviously, all companies and certainly all banks are being impacted by cobot, 19, pandemic and and we expect in future periods that there may be a you know some additional non interest expenses related perhaps some effect on our fee income depending on activity and usage of some of the.
Yeah, the items, a point of sale and things like that so there's various things that we did mention regarding this.
I'll talk for a minute about net interest margin.
It held up pretty well actually in the first quarter, we had a net interest margin as Joe mentioned, a 3.84% compared to 4.06% in the first quarter 2019, and then also compared pretty consistently with our fourth quarter Nike margin of 3.82%.
The decrease for the prior year first quarter was really primarily result of decreases in the average yield on loans and other interest earning assets as we during March had significant market rate cuts in interest products.
So as we mentioned also in the earnings release, and we've talked a little bit about our balance sheet swap that we had in the past we mentioned it in our 10-K filing as a subsequent event, but we did terminate the the 400 million dollar notional balance sheet swap that we had an effect.
We received a payment of almost $46 million as the value on that.
That has net of tax deferred taxes that has gone into our equity section that's kind of the unrealized.
Gain section it actually is now basically realized but it sits in the AOCI I section of equity that is going to be accreted into income a into interest income on loans in future periods, and we expect that that will be approximately 2 million.
Dollars to interest income per quarter.
Through the the original termination date, which is in 2025.
The core margin, which excludes the impact of additional yield accretion from our FDIC acquired loans for the three months ended March 30, Onest 2020 decreased by 25 basis points compared to.
The first quarter of 2019.
Really again, mainly due to the much lower market interest rates from a year ago, which caused lower LIBOR interest rates and.
Generally result in just lower yields on loans and lower yields on our other interest earning assets.
The net interest income dollars, however were basically unchanged for the most recent quarter and up a bit from a year ago quarter. They increase about $333000 in Q1 2020 versus Q1 20 night team.
I'm a few items in non interest income there will be pointed out a non interest income was really not that much changed overall from the previous year quarter, we did have.
We did recognize $407000 decrease in the net fair value of our back to back interest rate swaps that has nothing to do with the with the balance sheet swap that we terminated that relates to the back to back swaps that we have with some of our loan customers and so with falling interest rates the net.
Fair value of that position dropped by about $400000 in the quarter.
Service charges and ATM fees decreased about $200000.
Mainly related to the expenses that that are related or netted in with our ATM fee income and the conversion to a new debit card processing system, which we completed in the first quarter of 2020.
Net gains on loan sales increased from the prior year, we did have more origination and sale of fixed rate single family loans in the current year period versus a year ago.
And then other income.
Overall increased about $226000 compared to the year ago quarter. We did have some fairly significant income recognized in this years quarter related to some swap the origination fees on swaps with our loan customers and also some termination or exit fees.
Some certain tax credit partnership investments that we've added over several years and then that was somewhat offset by some gains and recchi recoveries that we had in the first quarter last year related to some FDIC acquired items.
The next thing non interest expense or talk about briefly you were still tracking well on our core expense containment I think in our efficiency noninterest expense did increased 2.3 million to $30.8 million compared to that the the year ago quarter, a lot of it we talked about related to code at Nike.
Adams.
In this quarter.
There were recognized.
We also had a little bit higher expenses and in this years period related to depreciation of some new ATM ITM machines and operating software that we had to upgrade and implemented during the fourth quarter last year, which is now being being written off from depreciated in 2020.
Oh, the efficiency ratio or the Joe mentioned before was at 58.91% that's a little bit higher than it was in the first quarter last year, a 54.74% higher efficiency ratio. This year was really primarily due to the increase in non interest expense that we talked about.
The company's ratio of noninterest expense to average assets was 2.48% for the period this year versus 2.41% for the three month period in 2019.
Mission that little bit about allowances provision.
As we said earlier, we had a [noise].
Provision for loan losses in the quarter this year or 3.9 billion.
That is related only to three at 237000 of actual net charge offs in the first quarters that resulted in an increase it our allowance for loan losses of $3.6 million in the first quarter. This year.
One last thing on mission is liquidity.
What we did have a good strong liquidity position at the end of March we had cash and Unpledged securities of about $400 million total.
In addition to that we had about $1 billion available on our secured line that's home loan bank. So we had that much capacity that we could could borrow there and we also have capacity to add broker deposits if needed.
In the first quarter, our deposits increased about a little over $200 million.
<unk> hundred 25 million to that are so as the various brokered deposit products checking was up 62 million in retail Cds up 32 million. So we have seen in the last month or two some customers withdraw relatively minor amounts from their accounts, but since the end of.
March our deposit totals have increased in total.
Some of the increases related to the stimulus funds that be who are deposit a week ago into customers accounts and so we do expect that some of these into it the increases in deposits will you know rollout of these accounts over time.
That concludes our prepared remarks at this time, we'll open it up for questions and let me ask our operator once again to remind our attendees how to Q man for questions.
Ladies and gentlemen, as a reminder, if you like to ask a question at this time. Please press Star then one or your telephone keypad toward draw. Your question. Please press the pound cake.
Please standby, we compiled acuity roster.
Our first question or comment comes from the line of Michael Perito from KBW. Your line is open.
Hey, good afternoon guys.
Hi.
Right.
Glad to hear everyone's doing well as well as it can be I was kind of time. Thanks for forgiveness of time this quarter, especially.
Sure.
I wanted to maybe start on the credit side I appreciate the commentary and the remarks wondering if you could dig a bit deeper for us and and let us.
Let us in your had a little bit in terms of how are you guys you're thinking about some of the qualitative factors are driving your credit model. So we can kind of compare to some of our economic assumptions and you see where were you know the provision my trend as we make our changes to our economic outlook.
Go ahead Brexit common allows question you want to take that Yeah. Let me talk about that yeah. So so as we said we're still using the incurred loss model right now and and so we have to take into account.
With that as well.
Qualitative factors and things of that nature. So at the end of March or you know obviously things were were different in the world than they were at the end of December but we are monitoring again, we talked about our modifications or things of that nature delinquencies really at the end of March were not.
Elevated.
And so I think you know we're going to know a lot more as the work through this quarter by told me get to the end of June hopefully, we'll have a better feel and a better.
Sense of where.
Things are going with our loan customers I mean.
We've got it a lot of stimulus coming from the federal reserve and the Treasury.
So.
There's there's money being put into the hands of some of our customers through various programs.
Hopefully additional funding is going to come out today.
Or sometime this week regarding some of the small businesses.
And so you know it's it's a bit you know just right now it's somewhat uncertain, an unknown kind of where the next couple of months are going to take us with with some of our customers. We feel like we're in good position as we mentioned on the the schedule of modifications that we that we put in the earnings release.
We think we've got pretty low.
Loan to value percentages in there or you feel like you know those customers are are a strong customers.
And so that's why we have to look at that and we will continue to review that over the next couple of months here and see where we go.
Hey, Mike I might just Ah I might just add a little bit.
<unk> Rexs said you know the incurred loss model is I mean, our qualitative analysis was a little bit more general you know, we as Rick said, we have deferred Cecil but.
Eventually will be it looks like retroactively.
Using Cecil back to January one of 2020, and you know the kind of the driving factor we found for for most of our loan categories.
The driving economic factor is unemployment.
So that will be something that is really critical to our sequel analysis, but you know part of the reason we did not implement diesel is because we really don't have a feel beyond the second quarter as to what you know unemployment will look like number one and number two.
The question you have to answer.
Or the question you're kind of driving at you know in in Cecil or any other allowance model is is the the models looking out okay.
Employment impacted losses and in this respect in prior periods and so you're trying to use prior period information.
ER to estimate future losses, and as Rick said, the unemployment rates with respect to you know that are a result of cobot 19 are going to be so much different.
What we've seen historically.
Both in magnitude, but also.
In it in the because of the government stimulus that it's coming into sort of hold people harmless a while we I guess the spend the economy and animation and and as we try to get people back to work. So eventually I think unemployment is gonna be the critical.
A piece of our Cecil analysis.
Bill, where we're not using Cecil yet.
That's helpful guys. Thank you in that but I guess is it fair to think that.
Given what we know.
Being at April 21st and then.
Most of the stay at home orders now extending through at least you know ended the month, maybe even mid may and later in some some some areas.
The second quarter will likely have greater provision under the incurred loss model.
For you guys versus some of your appears that adopted Cecil where the first quarter provision was a little heavier is that okay way to think about I know, there's a ton of variables in there, but just generally speaking do you guys have any disagreements with that.
I think that's a result reasonable look at it I mean, Joe go ahead, if you want to if you got to comment there. No go ahead go ahead, okay nationally.
I think you know Mike I would say, yeah, I think that's reasonable with the big Tavi caveat that there are so many.
Variables, it's really hard to say.
Okay.
Thanks, and then on.
Just on loan growth you know there were some decent activity in first quarter.
Any initial indications about how activity is kind of trending in the second quarter and and with everything going on do you expect that to take the step back near term here just given my guess is being slower economic activity in your markets.
Yeah, I mean, I think I think I tried to point to that my comments and I don't think I did a very good job you know the what we generally point to is our pipeline and you know our pipeline is pretty much as it's been but you know pipeline sort of includes.
All loans that we've committed on in and so there's a pretty big there's a big a pretty big process prior to us actually making alone commitment and I think the activity that we would the earth earlier on you know like customers requesting credit loan.
In officers requesting a loan approvals by our loan committee and so forth that sort of activity has definitely slowed down and so I think we'll see that start to reflect itself and our pipeline you know maybe in the second or third quarter certainly in the second half of the year now I would say.
Don't know if this will continue.
But it does seem the early payment prepayment activity has slowed down so that's going to affect.
Positively overall loan totals.
But I think origination activity you know based on what we're seeing right. Now is it is eventually going to slow down.
So we did not a substitute the P.P.P. loans activity, we've got 100 plus million dollars that going in here so on.
On a temporary basis at least we're going to have that in there.
Yeah, I mean does kind of my last question Rex just for the margin do you expect should there be oh the.
A benefit in the second quarter from the P.P.P.C.S that flow through Eni and then you know kind of compression. Therefore, after assuming that program more expense. It shouldn't you know the loans are forgive them because they are used for payroll and he is that a decent way to think about the next couple of quarters, you know numbers aside just trajectory wise or something else we should.
Thinking about.
Yes, there could be.
A little bit of positive income there because we'll get to seize well we will differ on defer the net fees, but as long as loans pay offs, where our forgiven because they met the criteria in the loan goes off our system any remaining fee would just to be taken to income at that point, so there could be.
There could be a little bit of a have a pop you know from from loans that are actually are are paid off early or things that nature that'll be over the next you know several months. So it in the second and third quarter, primarily probably is where we would see that's another thing that we've had going on.
In the first quarter.
One month LIBOR rates stayed a little bit higher me. They didn't drop is dramatically s. fed funds rates did and we have a lot of loans that are tied to one month LIBOR. So.
Yeah, we did continue to see less negative impact I'd say in the first quarter. It seems like in the last week or so a LIBOR rates have started to come down a bit more normalized probably so we'll see a little bit a negative impact there, but we're hopefully offsetting that quite a bit of that with deposit costs that are.
I mean down.
As as the each month passes and we have time deposits that mature and redo it at new lower rates and things like that so hopefully that's going to help offset a good chunk of the the linerboard dropped it may happen second quarter.
Great. Thank you guys appreciate it stay well in tough worsen.
Great. Thanks Bye.
Thank you. Our next question or comment comes from line of Andrew Liesch Weiss from Peppers Analyst. Your line is open.
[noise] everyone. Good afternoon I.
Hi, Andrew Andrew I, just noticed just want a follow up more on on credit here with the loans that you the deferred especially on the more converts on the commercial side, but what's been the the tone from these customers are and what I guess, we'll spend the time all your conversations with their commercial customers how do they feel about.
The current situation and what are their biggest concerns.
I don't think the you know I don't think so generally the.
The request for deferrals, where you know I don't think it was assigned a weakness by our customers really I think it's just to sign up you know in general. They said yeah. We can pay you, but we would prefer to conserve cash you know if their health care customer. They don't know it there if their payments from you know if there if their ultimate.
Payers the government. They don't know if those payments will slow down you know obviously retail you know strip Center neighborhood center kind of landlords you know are having issue with their tenants and the and they want to be able to.
Worked with their tenants with respect to rent so I don't think it's.
Certainly we don't serve we certainly don't see panic among our customer base. It's more you know I think a lot of our customers wanting to be proactive and and conserve cash and what they feel like could be you know bit of a difficult time going forward.
Gotcha.
Got you don't need Andrew I mean, you know.
I I'm sure you've been on other calls the hotel motel industry had been hit hard you know the occupancy rates or you know 10, or 15% you know probably some hotels small lower than that so you know obviously.
That's not a sustainable occupancy rate for most hotels.
And they were hopeful that you know hopeful that as we as we get a therapeutic that works for Colin as.
We've worked toward a vaccine and and other stay at home orders are lifted their occupancy rates will will raise.
Mhm.
Yes. Thank you know you Bernstein already covered all my other questions. Thanks.
Okay. Thanks, Andrew.
Thank you our next question or comment <unk>, John wrote Us from Janney. Your line is okay.
Good afternoon goes.
Hey, John John.
Rex just back to the PPP loans, what is the average beyond those is around 3% or.
I think it's a little bit above three gets a little bit above three.
Okay, and then just rexs or as it relates to the the core margin. So it was up what five basis points linked quarter and then on the swap you pick up.
What roughly 400000 from this quarter to the second quarter I mean, and then given your comments given your comments on one month LIBOR pulling back so if we exclude the impact of the P.P.P. fees.
Do you think directionally.
The core margin is down some or.
Just directionally can you speak to that.
Yes, I think there'll be pressure on it I mean yield it's all going to depend I think John on how how much the and how rapidly the one month LIBOR rates move and we do have a lot loans that have interest rate floors. So the floors will help us to some extent.
As rates move lower too so I.
It's hard to tell you specifically right now you know here's what I think directionally is going to happen I would say, though that that you know, we we'll probably see I mean, just like my my belief is that we will see LIBOR rates move a little bit lower so we'll probably have some pressure relay.
To that but like I said I. We also are going to have.
You know a fair amount of deposits that are going to reprice, lower as well as Cds mature and things like that so.
I think it's I mean, I can't really tell you you know specifically, but I think that we've got Oh.
You know a decent chance that we would be able to maintain you know our level reasonably but I think there's probably going to be some some negative pressure toward it depending on how wipe where rates go.
No. The that's the thing I would add to that John we have two and a half billion dollars of checking accounts.
And yeah, that's actually up a fair amount from the ended the quarter the M and by I guess I should say non crime accounts and we have not seen a big decreasing the cost of those get isn't that right Rick.
That's true that's true we its most recent must Dawson start to come down, but yeah, yeah, and so if that trend continues that's going to help US too you know if we if we start to see the cost of those accounts slide down. Some you know that's going to help us but that's.
Dependent to two you know that's dependent on competition to a large extent, we don't want to lose the customers lose the boss or so where it's being you know where kind of involved in a balancing act here.
Joe is because that's an across the franchise or is that.
A few particular markets, so I guess as far as.
I feel like it's it maybe a little bit more across the franchise.
Sure Rex you have a feel or some of our markets more competitive than others.
You know I would say it for a while at least Saint Louis was a little more competitive maybe Springfield was competitive but I think is pretty much across generally the markets now and that level of competition may have come down just a bit from where it was maybe six months ago.
Yeah, Joe maybe just one other question I mean, obviously Bakken Oh, eight or nine you guys were.
Fairly active I guess, we could say on the on the FDIC front failed banks to stuff and not that we know exactly where this how this plays out but.
You know what are you thinking as far as you know potential M&A opportunities maybe over the next year, given where we're at right now.
Yeah, I guess, obviously, we would be interested and that you know.
That that sort of why we you know I feel like we've we've been since the early part of the 2008 crisis. We've been building our company. So that we would be able to participate in consolidation that.
Might occur at the time of the next crisis, and who knows whether this will be that crisis, hopefully not you know hopefully a hopefully things will get back to normal pretty quickly.
But you know I.
I think we're always going to be a more active acquirer.
You know in markets like this then we then we are maybe in the really high flying markets. I mean, we're just more comfortable with you know are sort of economic analysis of either buying companies you know from the FDIC or you know potentially we've never done we've we've never really done it.
You'll potentially purchasing a bank on an open basis, and this kind of environment, where it might be.
Less expensive and more compelling financially.
Yep.
Well, we'll see how this plays out so be safe guys. Thanks.
Okay, you too that's John.
Thank you again, ladies and gentlemen, if you ever question or comment at this time. Please press Star then one or your telephone keypad.
I'm showing no additional audio questions in the queue at this time I'd like to turn the conference back over to management for any closing remarks.
Well. Thank you everybody I'm you know as John said, I hope that everybody will be.
Be safe and healthy and we'll look forward to talking to you at the end of the second quarter.
Thanks for being on the call. Thank you.
Ladies and gentlemen, thank you for participating in todays conference call. This concludes the program you may now disconnect everyone spacing.
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