Q1 2020 Earnings Call
Welcome to the first quarter 2020 earnings Conference call. My name is easier ending up your operator for today's call.
Hi, all participants are in listen only mode. Later, we'll conduct a question that's fashion.
During the question answer session. If you have a question. Please press Star then one on your touched on phone. Please note. This cat cashed call is being recorded I'm not sure the color David Ritchie, David Richie you may begin.
Thank you Andrea Good afternoon. This is David Richie President and CEO American River Bank.
There's a parent company of American River Bank headquartered in Rancho Cordova, California. This is our first quarter update.
Please be aware that our earnings.
Earnings release, which details our quarterly results what how at the market open today as well as our quarterly cash dividends payable next month.
We did as always includes an economic data in our press release.
Now I'd like to turn this call over to Mitch Derenzo, Chief Financial Officer.
Thank you Doug So of course, thanks to 12, you can listen on the call today.
Obviously this is more normal a conference call them all impacted by this global pending I'd get a stranger lives in one respect that and I.
I understand that has negatively impacted many people.
Hi, a asked myself Oh wait a family of these financial results fits into the priorities. These days.
But that's my role publicly traded company CFO, It's my responsibility to record financial results.
I can only wish for good health all of you on the call your family and friends.
With that I need to remind everyone of our safe Harbor disclosures.
Certain matters discussed in his presentation that constitute forward looking statements the purposes at the federal Securities laws and they include risks and uncertainties.
Actual results may differ materially from resulted in these forward looking statements.
Factors that might cause such differences are discussing the company and report on form 10-K.
The year ended December 31st 2019.
And subsequent reports filed on form 10-Q.
Okay.
Do you ever take any obligation to publicly update or revise any forward looking statements, which would include information or future that except as required by law.
So those are interested the link to our import.
Is located on our website American River Bank Dotcom.
As with past calls how electronic theories of approximately 70 issued this morning.
To provide some additional detailed analysis.
For the back over to Dave for some additional common.
The lines for questions.
This morning American River Bankshares reported net income for the first quarter 2020 of 1.4 billion compared to 1.1 billion during the first quarter 2019.
Our next per share with 24 cents per share compared to 20 cents in the first quarter 2019.
Our way and already for the quarter with 80 basis points and 6.77% respectively.
Compared to 60 basis points, and 6.17%, respectively, one year ago.
Net income growth and a year over year was 25%.
Yes growth was 20% during that same period.
On a pretax pre provision basis.
Income in the first quarter of 2000 22.4 million.
The increase of $700000 or 41% over 1.7 million recorded for 2019.
Multiple quite nice despite the weakness.
Increases.
Yeah. This quarter, we saw from significant drop in the wake basically movie epilepsy actions.
But really in the three of the five you're part of the curve.
When dropping dropping pretty significantly over the past year. That's that's how horizons that we typically make loans that Bob.
Yield on loans actually increased from 4.93 in first quarter last year. The 5.03, the first quarter 2020.
Well the yield on investments actually dropped from 27 in the first quarter.
2019 through 2.63 in the first quarter of 2020.
We had a decrease in our cost of deposits those decreased from 34 basis points in the first quarter last year 29 basis points first quarter 2020.
This results in the margin of 375 for the first quarter Alicia up from 59 in first quarter last year.
It's mix on the balance sheet.
But net loans decreased 5.8 million in the.
Quarter, So from December 31st balances.
Funding slowed.
Look quite a bit in the first quarter payoffs were up a little bit compared to last quarter, but really in line with the two previous quarters.
Comparing March.
2020 months holds one year ago.
Net loans are still up $52 million work, if you're going to have percent.
For the first quarter, we didn't fund 13 million a new loans that compares to $31 million first quarter last year.
43 million that we funded the fourth quarter of 2019.
The trailing four quarter loan totals $134 million.
Our loan payoff images of the go here they were $13 billion.
Up from 7 billion in the fourth quarter 2019, really the same as a 13 million that we have pay off in the second and third quarter of 2018.
[noise] prepayment penalties.
We have here $482000 in the first quarter 2020.
However, one of those loans that paid off also had a premium associated with it it had to 71000 dollar premium.
Was written off as well that write off goes interest income to lose a net prepayment fees would be about $111000.
I guess the good news the prepayment penalty dependency on that loan the did pay off was the into 2500 would come out ahead on that loan.
For comparison.
In the first quarter last year prepayment fees were $93000.
The fourth quarter 2019, they were $7000.
As far as our commitments goes.
Unused commitments were 31030 $1 million at the end of March.
About $11 million that was in commercial so those have the ability to involve the most of the rest is at $31 million real estate when should fund over the next year or so.
We haven't really seen much activity in the draws on the on those commitments that you would but expect during a pandemic like this.
For comparison at December 31st you guys mentioned total and commitment $40 million at about 13 that was commercial so commercial commitments are going down 2 million, that's a 13 million.
Year end.
To 11 million now.
Although.
About 2 billion, we had one loan that the Banff a million seven there was it will have a commercial project slips kind of expected. So other than that we haven't seen a lot of.
Our folks drawn on there.
Unused lines.
A little bit of exposure here.
Or but I would say lack thereof, our exposure hospitality zero. So I guess, that's no exposure, we don't have any loans in the hospitality area.
Those are two restaurants were 5.8 million elder care 6.8 million.
Schools last childcare 4.6 million recreation collect Gulf in sports types clubs, just a minute 1.9 million. So we can map not a lot of exposure.
Could talk holiday of all day about what.
Sectors would be exposed.
I don't think there's too many of our loan.
Our someway impacted by the pandemic.
But those are really the the hot areas that I think people want to hear about.
Decrease in loan through the quarter was primarily in real estate loan that does decreased $5.4 billion.
Commercial loans were down 132, and our other category was actually up $200000.
The decrease in the real estate primary is multifamily loans were down $4.7 million.
Construction was down $2.3 million. That's we had a couple of projects that were completed paid down.
We did actually feel a little bit of growth in jewelry was up $1.7 billion.
The other line item the 200000 load growth there as primary more consumer and that's our specialty auto portfolio. We did 43 of those loans during the quarter average of those with $66000 that compares pretty close to what they were in the fourth quarter. We did 49 of those loans.
As of 67000.
One small piece the AG in there we did have a decrease of AG during the quarter.
$60000 decrease were at $6.4 million in AG ended March.
And was 13 million of new loan commitments during the quarter average date on those of 4.69 mover holding up.
We also reduced 21.6 million existing loans during the first quarter the rate on both average rate of 5.7 million.
Might be skewed by a couple of larger projects that were extended.
Credit quality.
Again this is as of March 31st Zero nonaccrual loans.
We have three loans.
Yes, we're past few 30 days.
Less than 60, those totaled 5.7 million.
Those three loans one lump one loan was 37000 dollar consumer loan.
They made a payment or early April.
One commercial loan barge, what a $4.8 million there were seeking a deferral arrangement and that has occurred.
And the other 810000 is a CRB loan and it was paid in full in April.
Last quarter, we reported that we possess the Lamborghini.
Yes, Fortunately, we sold but I was hoping to get to drive it with that never did.
Book value $572000, we did sell it in the first quarter, we've recovered on a percent of the principal.
So no no loss there.
They will get into his report a little bit more on.
Our balance sheet.
PPP loans and other deferrals.
I'll skip that.
Continue our credit quality, we did at $495000 in provision for loan lease losses, and really that's due to the up due to the anticipated impact of code of 19.
Again, although the credit quality with sound at 331.
We really don't know the depth of the economic impact of Cobot 19. So we did the 9.7% increase in the allowance during the quarter. This proved and we'll continue we'll continue to monitor the impact of the pandemic on our borrowers stay in front of them and then if need be we'll adjust the truckload accordingly.
The if you're well for loans was 1.43.
March 30, Onest 2020, compared to 1.34% one year ago, and then at the end of 2019 was 1.29%.
During the during the first quarter 2020, we had $4000 in loan recoveries and no no loan losses.
We still continue to have the one or Oreo property.
Book value there by $846000.
Cost by the equity ratio at the end of March just 1.5.
Obviously that cost, but assets or hill, but we still have the $134000 commercial real estate loans.
It was just totally measured a $90000 for less than a million.
Okay.
The investment portfolio really no change in the philosophy, there continues to be comprised well structured cash flowing mortgages.
Mixed in with some high credit quality municipal bonds.
Portfolio remains relatively short average lives power bond portfolio 4.2 years.
Effective duration of the entire portfolio remains quite low at around 2.8 years as well as the price changing rigs up 309.4%.
I know when you talk about the average like being short, but want to make sure that it's not going to be too short and we get all the all of our cash back here in the low rate environment. So I think it's important to discuss how bond portfolio will hold.
Hold up in a down rate environment.
Three of our you look at our rate shock analysis as of March 31st 2020.
That's going to projected yield a 2.4% the entire portfolio in average life of about 4.2 years.
With the 50% Reighty cross decrease that shocked changes to the yield of 2.31, because from 242 31, and the average life of 4.19 year. So I.
That concludes around that to 4.2 years until there is no real change there.
So hold up well 100 basis points rate shock.
That that might be tough looking at where the three five year, probably the curve are right now, but it's two approved do.
100 basis point drop would be yield will drop to 2.2%.
And the average life.
0.8 years.
Just for comparison after the December 31st numbers out there as well they are pretty similar the yield was projected to be to 65. So we did see a little bit of a decrease there in the first quarter, but the average life was 4.17 years call that 4.2 years, we didn't really change there at the 50%.
Shock decrease.
That's a change to 2.5%.
On the yield in the average life was 4.14 years.
Hundred basis point drop.
Yields is going to 2.41 versus 3.7.
Average life.
So the real good drop a little bit with the balances are going to hold up quite well.
And primarily because its build with bulletproof bonds and slowing pain for paying mortgage related bonds.
But.
Cash flow that again, I think they hold up well at March 31st the average monthly principal reduction anticipated over the next 12 months is expected to be about $3.2 billion per month.
If rates would have dropped 50 basis points that increases by just $38000 more amongst a pretty negligible.
100 basis point drop again, that's a pretty big drop.
At March 31.
Capture that February 29, but at March 31.
That on a basis point drop is going to increase the averaged $4 million. So it goes from 3.2 million to 4.300 million order I.
I think thats pretty minimal amount of increased cash flow on $256 million bond portfolio.
On the liability fag.
Oh deposits ended the quarter just over 600 603.1 million dropped about 1.7% from the roughly 605 million at the end of December.
Then over the last year were up 31 million for 5.5% from March 30, Onest 2018.
We did have an increase in the non peak in two years during balances goes held up quite well.
They were up 2.7 million during the quarter and work just over 30%, 30.1% of our deposits from a non cash burn balances.
We also did have an increase in our money market accounts those were 2.9 billion.
During the quarter.
Decreases came in interest checking which were down 2.4 million.
Savings were down 3 million in a time deposits were down 2.9 million.
At the end of the quarter the breakdown of the deposit portfolio non spring balances.
Percent.
Let me markets were 27%.
Interest checking is at 11.
And savings in CV were both at 12% each.
That compares.
Pretty much the same bye.
They were at the end of December.
Percent here in there.
Capital levels couples important news days still remain pretty strong, but the $3 billion in capital at the end at the end of December that increase to just under $87 million. After the end of March.
That's a $3.9 million increase.
That came from the 1.4 million net income.
And we'll see AOCF increased 2.8 million.
Pin up to 400000 dollar cash dividend despite.
Capital capital ratios continue to grow our leverage ratio was 9.4 total risk based sixteensix.
That compares to 19.9 0.2 at 15.9, respectively.
Number 31 2019.
And they did mention alright, that's given it went out earlier.
Early cuts dividend announcement that went through this morning paid next month.
Not a lot on the income statement.
Adjusted noninterest income never never been our big.
Part of our company here, but we actually reflect.
$1000 in the quarter.
No significant change gains on sale securities.
They were 30000 in the first quarter this year compared to 41000 in the fourth quarter of last year in a 36000 in the first quarter 2019.
Hello, Hello on the expense side, a little bit of a decrease drop from.
We were 4.345 million at the in the fourth quarter dropped to 4.216 million.
Yes first quarter this year.
So down from the 4.260 million in the first quarter 2019.
And not not a big change from quarter to quarter.
If you look at.
In the different line items.
FDIC expense changed a little bit we were zero in the fourth quarter last year, we had about 27000 of expense in the first quarter. This year, that's about half of what it would have been had we.
Matt had some of the remaining credit left at the end of the year. We've exhausted those credits ROV expect a normalized expense in the.
Going forward.
Obviously, the biggest change in.
Right.
Near the fourth quarter, we did have the write down of 110004th quarter on our Oreo property, which did not have a breakdown in first quarter. This year.
A lot that we're trying to do our best too.
Protect.
Protect.
Protect expenses.
Not get crazy.
And we have obviously reduce business development and advertising due to the shelter in place. So some slight decreases there I expect that to continue.
Two we are free to socialize again.
Our taxes.
The increase were up $123000.
From the first quarter this year to the compared to first quarter last year really to that based on the have a lower level of tax benefits from tax exempt interest investments.
Balance decreased year over year.
In the lower level of benefits from our equity compensation.
In addition to obviously the higher level of taxable income that's going to require more taxes.
Our tax benefits from the equity comp was decreased from four from 44000 in the fourth quarter last year down to 4000 in the first quarter. This year, so $40000 drop.
So again not a big number the biggest numbers nearly that changes the tactical income that increased 400000 dollar sort of 27% increase.
That when commodity 5 million nine.
Year over year.
Thank you I'll turn it back over there for some additional comments okay. Thanks Mitch.
Yes so.
As far as our plan goes, which we launched 24 months ago and I believe the first quarter shows what we set out to do and I certainly feel like.
It's really coming together quite nicely.
I would refer you to the trailing four quarters, our trailing four quarters as a useful review of our product progress.
And so analysis the kind of give me an update of where we are today, obviously with encoded 19, our focus is temporarily shifted.
Our focus is.
Number one we're doing all we can to protect the health and wellbeing of our team members.
To keep the bank operating and number three assisting our clients.
My opinion, we've done very well, especially with around half of our team members working remotely.
Obviously, we do have clients that have been negative it negatively impacted from the shelter in place orders.
I will say this that.
Our banking team and credit Department.
I've been working really hard with our clients requests.
For loan payment deferrals, and paycheck protection than the Paycheck protection program.
I will say this that involve both types of loans were following the guidelines set up by the regulators in the FDA.
I will say that the refund deferral loan program has been much easier to come up with solutions for the bank and the borrowers.
The PPP program was difficult to prepare for because of the limited time frames to get it up and running we did not truly know the FDA process and how much volume when you would see that said.
I believe that our teams because of our team's hard or both of these programs are up and operating and running at this point in time.
And we have health clients every day.
Since March 31, I'm happy to share some results for both of the programs as it relates to the relief and deferral efforts, which we started in late March.
We've had 76 requests we documented 55 of those requests.
I can give you a breakdown of those and actually the pipeline of that.
Has slowed down quite substantially there's very little on the pipeline.
At least for the time being.
To give you a breakout of those requests requests we have a consumer.
Our portfolio there were 31 32 requests from that area.
I mean was 48 requests and we had fixed requests from seek cnine type loans.
I do think it should be noted that all these loans that we've adjusted had been performing loans.
And now let's talk a little bit about the paycheck protection program, we launched like everyone else on April Threerd.
[music].
By about three or four days into it we had over 570 requests.
You know we have scrub those requests.
Unfortunately for some of the applicants a lot of the applications, maybe up to 30% of those applications were incorrect.
And frankly, some of the applications really didnt belong.
So since that time.
Today, we have 150 FDA approvals for about $37 million.
We funded 33 of those for about $8.9 million.
Our pipeline assuming that this program gets up to up and we started soon we still have about 250 requests.
In the pipeline, which we will continue to work hard during this downtime to make sure we're ready to respond as quickly as possible once that program is up and running again, assuming it gets there.
Has heard a referral and the relief in deferral loans.
Just so you know the majority of those loans have been 90 day payment holidays principal and interest.
We still do have a pipeline of opportunities with new and existing clients.
That's kind of self managed a lot of people wanted to put that on the shelf until things get better things get back into a normal course of business. So we are.
We still in touch with those people, which is important to us because of that.
Covert 19.
[music].
Many of those request I said on hold or delayed.
We will revisit the opportunities when the time is right and we will work really hard to get back on our plan, which is continuing to increase Pete pretax net income are we are away and the decrease our efficiency ratio.
It's my firm belief that if we do the writings in helping our clients. During this period of of uncertainty, we will be better off coming out of this.
So with that.
Thank you and Adrian if you'd like to open up the line for some questions after great.
Thank you well now begin the question answer session.
If you have a question. Please press Star then one on your Touchtone phone.
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In the first question Matthew Clark from Piper Sandler Your line is helping.
Hey, good afternoon.
Hey, Matt.
That's good color on the.
On the dip pearls number requests by type can you just give us also the dollar amount.
Q.
At our.
Thank you granted forbearance as on 331 sounds like those requests have slowed but maybe.
Yes, they may have increased a little bit here in April just curious about.
The dollar amounts.
Hey, Matthew.
We have a pretty good handle or we have the list on those I don't have the total dollar amount.
By Mone people I told them, yet it's important but I wanted to continue with the PPP loans. So we'll get that for you.
Okay.
So stressed dried out and just want to contribute to help help on the.
Take care of existing clients, but we'll definitely get up for you.
Okay, and then the sort of ppt loans, the $57 million that you guys have approved.
I guess what was the average loan size, maybe could divide somebody other but I'm not sure if thats. The yes, I know, it's actually totally appropriate.
It's actually 37 million at.
Well theres some sorry.
Okay.
And.
I assume if we just take an average that'll be the implied kind of origination fee.
Yes, that's better than manager, but most of around the same side. There's a couple outliers, but most of all around the same site of a handful of larger ones and then you have a plethora of how much smaller ones.
Okay and is your expectation to just.
These things that get dispersed they kind of you get them you send those back CSPI after seven weeks in there.
Pretty much off your balance sheet nobody has a second quarter is that the expectations no. Good reason hold them [laughter].
I just checking.
And then on.
The exposures.
In restaurants, so forth.
Can you give us a sense for ltvs underlying those exposures and debt service coverage ratios where applicable.
Yeah, you know.
Our just as a bank, we address weakness ramps and members on overall loan to values and kind of weighted average and the various areas and our averages is somewhere between around 55% to 60%.
Which is a good thing.
And about over 90% of our.
Debt service coverage ratios are over 1.25 somewhere between 1.25 and 1.5.
Okay.
And.
I assume.
You guys are going through the process of.
Analyzing.
The exposures that you think might be most at risk and.
It seems like.
It seems like nothing's really immune other than grocery stores some other categories, but.
Can you give us a sense for the provision this quarter and kind of methodology and.
If you've done any stress testing and how we should think about the cadence of provisioning going forward and and reserves and net charge offs I assume you might see some additional reserve build here in the second quarter and then we might start to see some charge offs later in the year.
That.
That cover fire drill hard when you look at your credit quality at March 30, Onest in a.
Pretty Christina.
Our our own drought talking to the Oliver clients trying to get ahead handle on what stress is being created on them.
We did that we help we have.
Done done some relief for some of them as they've talked about but it's really.
Time going to tell how long how long will go through the cycle a lot of Merck dope too to handle a month or two and then down the road it starts to hurt so.
Exactly right we're continue to monitor this.
The increase provision really is because of the anticipated economic change, but we don't know what that is right now, but we will definitely be quick to jump on it if we need to we have we believe we have strong capital levels.
Where we are still adding the capital because of our earnings.
And the allowance looks like it's sufficient right now but.
And I, Tom and I also think that what's difficult for the banks as a lot of its came down at the end of March.
And you had a lot of people that are already made that March payments. So.
I think the next couple of months will remain at very educated decision on increasing the reserve and if we have to do more at the end of the second quarter, we'll certainly share they knew that.
Okay, and then just on the margin I think even back out the.
Recoveries, you still had core margin expansion up four basis points it looks like a 367.
Yeah.
Gave some color on securities portfolio, and how that might perform and new loans.
Being below the portfolio, but.
Might have been a couple of larger ones that took that.
Weighted average down just your thoughts on the NIM outlook and.
Now when we also had 150 basis point rate shock in early March how you think about Cologne repricing and the overall margin going forward.
The biggest impact to our margin going forward is going to be putting on pvp longer 1%, because we're not putting on.
A whole lot of other loans that are going to decrease the with the yield below do we have on the books.
We're going to hold up well because they're all the all most of most of the ones that are adjustable or at the floors.
For the first there was a negative decrease from that.
Okay.
And then just overall.
Loan growth it doesn't sound like you guys are looking to put on Macshane where growth here in the near term Uno idle.
I can understand why but.
Yes.
In recent years, you guys have been putting up some decent growth and just curious should should we anticipate some additional shrinkage.
No in the PDP lot loans are going to be on for very long.
And kind of transitory.
Just your thoughts on overall net net loan growth and the pipeline.
You know I would say that it's really hard to determine right. This second but I I would I think that the other side of the current as we did have a really strong pipeline as I said before and we are staying close to those people. So that I think if this thing turns around we can obviously accommodate those people and the other piece.
We've been finding a little bit evidenced a little early to tell you a much more than this is our businesses that are doing well right now and.
We we because of what we've been doing for our clients, we've actually been getting referrals to other businesses that actually still in business. If you will and looking for a bank. So.
It's been it's kinda, it's really tough to figure out exactly with alone Foxtel look like obviously for this next quarter I think it's going to be pretty slow.
And then I guess, we can update has to go after that.
Give what I would look at it is in a normal situation like this with rates being so low due to anticipate a lot of prepayments.
Refinancing elsewhere.
I don't anticipate that could be real concern because.
We put a lot alone in the last year and a half and they've all it prepayment penalties or you have and so they're prepayment penalties are still pretty pretty having pretty tough to get over right now.
Sounds good thanks, guys.
Exactly.
And our next question comes from Tim Coffey from Janney Montgomery Scott Your line is helping.
Thanks, Hi, gentlemen, doing.
Yes.
Yes, I was wondering.
My visit in your prepared comments, but you have additional details on the decline in the multifamily loans.
We are those loans that were added say five six years ago that just reached the maturity or what was going on there.
Yeah, I know, it's 4.7, I think with a couple of larger delivery lines.
I.
I don't have the lift for the pay off here in front me I'm sorry.
Okay. I guess my point is that sort of trying to get too is that these loans really yield in less than the overall portfolio average is that correct.
That's put yet you're probably right yep okay.
Okay.
You know really good job in the press release level of detail in your fixed expenses, but theres. Some other items within that other other line item on expense side that I think have to do with marketing and made some other things I'm wondering how much wiggle room is there in within your expenses were those could come down if this shelter in place.
Period has extended.
I mean, those are the big big expenses that we have control over right now.
If you start if you start dissecting line items will stationary expense, while reports, but more in stationary expected regatta with people are stocking in their home offices.
I think the for you.
Look it up yes, the expense that's going to increase.
The.
Advertising business development.
Probably going to come down a little bit more than than in the quarter.
But but not a lot because we didn't dual we didn't do a whole lot in the first quarter anyway, we'll have a lot plan.
Promotions sponsorships et cetera.
Lot of that happens in the second and third quarter.
Okay, I would expect I would expect incentive the drop as well bigger answer because if we're paying these people to new loans or you're not put more loans.
The salary and benefit line item that drop there.
A partial offsets to that would be the reimbursement direct cost we take we reduce our payroll expense method for new loans, where you're trying to cost to respond that's going to.
That will drop and that's a really good.
Reduction of expense, but that.
Center piece is going to drop more so than that direct cost reimbursement.
Okay.
I might have also missed this in your prepared comments, but what was the what were the yield.
Deals on the 13 million in originations this quarter.
For 79.
Okay.
And then a question on the dividend.
How do you feel about the current payout ratio and would you be how how would the company feel about if that due to get materially higher for a short period of time would that cause you to change the dividend rate.
I'm sorry, when higher.
The payout ratio.
I don't think reading at this point of that would increase the payout ratio.
Rob with seven cents I don't think we've reduced that.
And less.
Well this thing really got worse than than we had that.
Preserve the capital that's cost of about $4000 a quarter.
So modest got a huge number right now, but if this thing.
Continues to drag on that's that's been easy thing to think about reducing that dividend.
Yeah.
Okay, all right well thanks those are my questions.
Thanks.
Your next question comes to Kevin first half secret.
Hi, guys.
Hi, Kevin become.
Hey.
Prior to everything you guys had a nice growth plan going though is working well obviously focus is on sustaining businesses hearing and kind of hoping to entity. How do you guys think about positioning for offense.
It's kind of tied starts to turn and any kind of go back. So no longer term plan you guys had in place.
I think I think we would turn it right back on as quickly as possible I mean, we still have a lot of as we're talking with people and like I said the pipeline will still really strong and it has its just kind of slowed down and it's been kind of.
Slowed down because of clients not not not necessary that we don't still have them there, but I think that's our how would be our desire Kevin just to keep doing are down I mean, I was more oil, making some great progress as you now and.
I think were heavily very well prepared to persist two that backup and keep moving forward.
Hi.
Any more power.
Our reach at our retail side of the passenger is going strong here yet we did have a.
Little dip in the first quarter.
But one would anticipate.
Balances going out.
Then pandemics like this and they have a reduction of bringing in bringing a new relationships which is exciting.
The other thing Kevin I failed to say as we've looked at these PPP loans has been is you can imagine there was a just a massive amount for all the banks, but.
You know our desires, obviously to take care our clients first take care our borrowing clients first but we've also had a lot of calling efforts going on and we've had probably in that 570 that number that Europe, there's probably 80 or 90 in there that people at.
We know well and that one that would like to bank with us and we were soliciting them and we're going to try to accommodate them through this PPP process as well.
And we've had some success are ready to just it's kind of been almost a little bit of a marketing, but do you want to bank the bank and so.
There's some good opportunities there as Mitch said on the deposit side as well as on a long time.
Great. Thanks, and then maybe just one kind of clarification question I guess.
Obviously.
But it sounds.
Prevailing outlook, obviously im sorry.
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Before I do.
Okay look deterioration I guess.
Yes.
And those type of loan.
Considered pass grade or high grade on that side.
They were performing they're performing.
In the early and they continue they can bear in unless they don't follow through with some of the some of the problems related to us, but really provided them well performing loan. Yes. There are they are all performing.
Yeah sure I couldn't hear your question.
You are cutting in and out I think much GAAP sorry.
Yes, I think you guys got it I appreciate it thank you.
Thanks, Tim just the correct.
I think I said 4.79 on the yield on the third 13 million at 4.69 pulled us for that.
Sure and.
Yes.
The question answer session I'll now turn call back over to Mr. Richie for final remarks.
I just want to say, thank you very much recalling and we really appreciate it and we'll talk to you next quarter healthy everybody up.
Thank you ladies and gentlemen. This concludes today's conference call. Thank you for participating and you may now disconnect.
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