Q1 2020 Earnings Call
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I would now like to turn the call over to your host for today, It's a dominique putting so chief financial Officer, Sir you may begin.
Thank you Towanda and thanks, all of you for taking the time to participate on our call. Today. We are we hope you are all well see.
With me on this call, our Rodger Levenson, Chairman President and CEO.
Art BACE Chief wealth officer.
Clark Chief commercial Bank Monster.
And work right Chief retail banking officer.
Before Roger begins with his remarks, I would like to read our safe Harbor statement.
Our discussion today will include information about our management's view of our future expectations plans and prospects that constitute forward looking statements.
Actual results may differ materially from historical results for those indicated by these forward looking statements due to risks and uncertainties, including but not limited to the risk factors included in our annual report on form 10-K, and our most recent.
Quarterly reports on form 10-Q.
It's wells other documents, we periodically filed with the Securities and Exchange Commission.
Comments made during today's call are subject to the safe Harbor statement.
With that Red I'll turn the discussion over to Rodger Levenson.
Thanks, Dominic and thanks, everyone for joining us on the call today.
As we come together. This afternoon, we are in the middle of the most significant health crisis in our nation's history.
Before I begin my comments on behalf of our over weren't 1800 associates I want to offer our thoughts and best wishes for our to our entire community and everyone who is listening today as we manage through this unprecedented period.
Although we could not have predicted the exact circumstances of the cobot 19 pandemic with this was well prepared to operate effectively through this challenging situation.
Research and technology investments combined with our business continuity planning have allowed us to serve our customers and communities, while maintaining our top priority of the safety and well being of our associates.
Since March 16th we have had over 1000 associates across the entire company working from home supporting each other and serving our customers, including our national businesses of institutional Trust cash connect and New Lane finance.
At the same time, we had been providing drives grew access and appointments with appropriate preventative protocol in our retail banking offices.
We have also seen increased usage and adoption of our digital products, including our my wish based mobile communication tool.
While we are still very early into this environment. It is highly likely that we will continue to see an acceleration of the recent trends towards these channels.
This is additional confirmation of the strategic rationale of art to Liberty transformation initiative, which commenced last year.
Turning to our first quarter results, our operating performance was solid.
Obviously, the adoption of seasonal and the impact of the current and forecasted economic environment led to elevated credit costs in the quarter.
I will provide additional comments on credit and asset quality in a moment.
Core pre provision net revenue increased 7% when a linked quarter basis, and 32% versus the first quarter of 2019, reflecting the closing of beneficial on March 1st 29 team.
This performance was driven by a 10% annualized loan growth in the quarter, excluding the impact of the allowance for credit losses and continued run off from the non relationship portfolios.
Approximately 39% of this growth was the result of increased line of credit usage.
Total core deposits also grew nicely during the quarter at a 9% annualized rate.
Excluding several nonrecurring items core fee income decreased 3% on a linked quarter basis, reflecting lower seasonal banking related transaction volumes and lower bailment revenue in cash connect the decline in bailment revenue was fully offset by reduced funding costs.
Cash connect continued its trend of improved performance recording an accretive or away of 1.84%.
<unk> expenses were well managed and resulted in a core efficiency ratio of 54% as we continue to see the benefits from prior acquisitions and disciplined growth.
Turning to credit we adopted Cecil in the quarter consistent with our original plans.
Asset quality improved modestly during the quarter, yet we purposely tried to get ahead of the on common deterioration in our seasonal assumptions with a significant reserve build.
The total reserves increased $92 million, reflecting both the day, one increase and the quarterly provision.
The corresponding Hcl reserve to total loans ratio was 1.60% as compared to <unk>, 0.56% at 12 31, 19th.
Including the marks on the acquired loan book, our total coverage was 2.19% at 331 20.
As outlined in the supplemental materials, our provision incorporated an economic outlook of a GDP decline of 15% and unemployment of 9% in a second quarter.
Economic models for both the second quarter and the remainder of the year continue to fluctuate.
Assuming deterioration from our assumptions from when we close the books, we would expect to continue to build reserves in the second quarter.
Our loan portfolio continues to be very well diversified and granular. It reflects our long held philosophy of concentration management.
As we learned during the great recession, even with high quality underwriting concentrations represent the highest potential risks to any loan portfolio.
Since that time, our concentration risk management has been governed by 20 board approved concentration limits each of which remain in compliance.
In addition over the past year, we continue to execute our strategy of repositioning the loan portfolio post beneficial while continuing to prove improved asset quality.
This included 343 million of intentional pay offs of non relationship loans as well as an 11% reduction in problem assets and a 23.
23% reduction in P. Ace.
We have provided information on the overall loan portfolio along with additional details on our retail hotel and foodservice portfolios in the supplement.
In addition to the strategic benefits of the beneficial combination. It also significantly improved our capital levels.
Including the impact of Cecil our common equity tier one capital stood at 13.41% at the ended the quarter.
This provides us with significant capacity to absorb future potential credit losses.
In our most recently completed stress testing, we utilize the federal reserve assumptions for a severely adverse scenario, which are generally consistent with the current environment.
Under this scenario, which can absorb almost $600 million of losses over two years, while maintaining a common a tier one common equity capital ratio of 11.2% at the end of that period.
This capital cushion provides us with additional flexibility as we move through this environment.
During the quarter, we completed our previous share buyback authorization repurchasing just over a million shares.
Although our board has approved a new buyback authorization of 50% of outstanding shares we have decided to take a pause until at least the ended the second quarter for both routine and incremental share buybacks.
We also maintained our cash dividend at 12 cents per share.
A resumption of buybacks and potential future increases in the dividend will be evaluated based upon our updated economic outlook and corresponding modeling.
In addition to focusing on adjusting our business to adapt to the current situation, we continue to serve our customers and communities.
In terms of customers through April 17th we have provided over $770 million in P.P.P. loans throughout our footprint to help sustain businesses and we are in the process of another we already in the process of filing another 1500 applications in the second phase of funds.
Thing that commenced yesterday.
We have also provided cash relief be a $1.6 billion of loan modifications in both our commercial and consumer portfolios through April 17th.
Almost 60% of these modifications came from our CNR businesses, which include owner occupied real estate and new lane and reflect the full or partial closure of these customers in late March in early April.
We know many of these customers well and remain in contact with them. So that we can collectively assess the best path forward at the end of the 90 day or in some cases less deferral period.
We also recognize the significant need to support in our communities, particularly the not the not for profit organizations, who serve those most in need.
To enhance our impact we made a 3 million dollar grant to the which fits community Foundation.
As we look ahead to our future performance, we will benefit from the significant investments we have made over the past decade in.
In addition to becoming the largest locally headquartered bank in the demographically Rich Philadelphia and Delaware region.
We added significant capacity to our mortgage and wealth management businesses established our national leasing company and most importantly had very strong talent throughout our organization.
These and other investments have provided a much greater healthier and diverse pre provision net revenue stream.
Our core pre provision net revenue of $71.5 million for the quarter included $3.6 million in accelerated loan in accretion as a result of a restructuring of the largest loan acquired from beneficial.
We expect that our second quarter poor pre provision net revenue will be in the range of $50 million to $55 million, primarily as a result of the 150 basis point decline in the fed funds rate during the first quarter.
Our core pre provision net revenue estimate also assumes that our region would remain in the current stay at home protocol through the end of the quarter and does not include the impact of PPP loans.
Finally, some additional context with FIS has served this community for 188 years, we are a very resilient company and when faced with periods of adversity, we stay true to our values and manage the company for the long term.
We are prepared and ready to do show once again.
Thank you and please stay safe.
I will now turn it over to Dominic to facilitate queuing a with our team.
Thank you Roger.
I will be facilitating the Q and a session. So.
If you could towanda Lisa.
Let the question. Thank you.
Thank you, ladies and gentlemen, as a reminder to ask the question you would need to press Star then one on your telephone.
To withdraw your question the pankey.
Again, it's all one for asked the question.
My first question comes from Atlanta, Frank Schiraldi, what type of Sandler.
Okay.
Hi, Good afternoon, guys hope you're well.
Thanks, Frank you too.
I.
I wanted to ask about the deferral.
Offer balance levels or modifications.
Whatever we're going to call him in terms of percentage.
Some of the such the.
Loan concentration. So you know you guys breakout.
Plenty of which I think you do every quarter plenty of loan concentrations are in the Korean sand I box and just wondering and all the Tsum Tsum hotel in restaurants as have the level of deferrals, but where else are you seeing those AFFO requests come from and have requested overall begins.
On to moderate here.
Sure. Thanks, Frank Steve would you like to address that question.
Sure Dominic So I would say the other two segments that we received a deferral requests is oh really retail CRM.
And then a little bit in the health care social assistance segments.
Go the other two besides the kind of the too obvious hotel and food service.
And I would also say Frank the request really have kind of leveled off and or kind of trickling in at this point, where you've received we believe the majority of the vast bulk of the far or request at this point.
Okay, and I know you providing are able to provide.
Specific levels within some of these hospitalizations in terms of.
This percentage hotel or loans are in the fall.
Yes, I think in the supplement on page five.
You can see percentages.
For each portfolio. So hotel was clearly the biggest.
65% of that portfolio, we have approved a 90 days.
The deferral a couple hundred 20 day deferrals.
The next they just segment is really the restaurant food service, which is 40% of a portfolio of we've approved deferrals for.
Okay claims on the buyback just just.
Followed wanted if you could.
Talk about the.
Mmm guide for next.
Quarter, so since the PPS and our guide does include CPP I'm, assuming that NIM guide caused them either but.
And if you could just I'll talk a little bit about the construction quarter over quarter and what some of the assumptions or in the construction.
The deposit betas and so forth.
Sure Frank Thanks, first I'd point out as Roger mentioned, the first quarter elevated purchase loan accretion was primarily from one large customer that paid off and refinanced with within with us.
Excluding that.
The PL I would have been in the range that we had guided at the beginning of the year and consistent with as we've laid out on slide 11 of the supplement what we expect.
In the second quarter of about 30 basis points of modeled accretion and up to 10 basis points of additional depending on pay offs and again, obviously all that as a function of the pay down rate and which this environment could affect.
Secondarily the decrease from the first quarter NIM of 384, excluding.
La.
To the second quarter 355 is all the interest rate driven and very consistent with not only our IR our assumptions, but what we expected. This year given the original plan 2020, assuming one rate cut but obviously, we've received a 150 basis point reduction at the end of March.
This assumes in the second quarter, a 25% beta for our deposits as we are able to given our significantly high loan to deposit ratio affect our funding costs through lower CD rates as we've already put in place post the fed rate back.
And managing our exception pricing and to continue to drive the appropriate mix within our portfolio.
Okay Oh.
I appreciate it thank you.
Thank you.
Thank you.
Our next question comes from Atlanta, Michael Perito with KBW. Your line is open.
Hey, good afternoon, guys I'm glad to hear everyone's doing well. Thank you for taking my questions. This afternoon.
Thanks for joining Mike.
I wanted to ER.
Double down on the credit conversation a little bit you know I think so the one book I'm struggling with a little bit as is the the hotel book not just for you guys just more broadly because it seems to be an area, where you know even if there are some type of recovery as we move into the summer that you know it might take a bit longer to kind of return.
Turn to something close to full.
Revenue or occupancy however, you want to measure and I'm just curious how do you guys think about that dynamic as we move forward here I mean, obviously initially there was probably just trying to get the Cecil and the so called bid qualitative reserves up given the uncertainty, but that's been kind of drill down specifically on that portfolio. How are you guys kind of thinking about those trends and and what do you think you're looking to see.
See you know that that could drive either you know additional reserves or hopefully kind of a return to normal operation as this plays out.
Sure. Thanks for the question, Mike and for reference we do have some additional detail on the hotel segment of our portfolio on slide 16 in the supplement Steve if you'd like to address that question.
Yes, I guess the first as we mentioned that is definitely the biggest or a percentage of portfolio that's in deferral.
So about 65% as I said.
With the exception up a couple customers. These are all 90 day deferrals.
So the plan really is it really gives us opportunity over the next 30 to 60 days to sit down with each of these customers.
Really work with them you know to develop a plan for the second half of the year, we're very confident in the sponsorship and very confident in in the original underwriting of these credits. So you know it's unclear whether this will be you'll be or zoo or a longer recovery.
But.
The fact that we kept deferrals to 90 days gives us the chance to really work with all of our customers for a longer term plan.
And Mike This is Dominic just to add on obviously, we've been in constant dialogue with all of our customers, particularly in this area well continue to work with them to develop the go forward plan. It over the next 30 to 60 days and for the remainder here.
Okay.
Helpful. Additional color, Thanks, and you know switching over the conversation to capital obviously is a pretty large it's kind of unique all the time in the way. This came together I guess, but fairly large new authorization, although it's kinda temporarily pause, but I guess you know as we think about your appetite I know you said your own pause until at least the end of the.
Quarter, but I guess less respect of the timeframe more respective as well what do you guys kind of looking for that would would bring you back to market is it just clarity on the recovery or is it other economic factors or how should we be thinking about that dynamic as we move forward.
Sure. Thanks, Mike I would say our approach continues to be the same as we've laid out and consistent with how we've communicated our capital management first and foremost we look at our cat capital as protection and for reserves in cases like this and when we feel comfortable with that environment than we look to.
Who invest that capital into the organic growth as a business or inorganic growth as we've done. So in recent history and then beyond those two uses we would return that capital where appropriate to our stakeholders through our routine share buybacks and then incrementally based on.
The share price at the time relative to an IR our model demonstrating positive accretion.
What I would say is that is no different than how we're approaching it today clearly that first traction.
Recognizing we want to evaluate ensure that the bank continues to to have the capital needed. So that we can focus on our customers as that some side door, we get more certainty around that and that will likely take.
Two to three quarters, we will continue to evaluate.
Quarter by quarter, as we observed the performance of our PPNR and <unk>.
The.
Macroeconomic factors affecting our provision through Cecil we will make a determination.
Sounds good so I mean, I don't know who want to comment this far but it sounds like it's fair to think that you know over the next two quarters, there's probably not much as you guys kind of sort out you know minimally what's going on on the credit side and making sure that the bank is a strong as it can be positioned from a capital perspective.
Yeah, I don't think we can say for certain and but obviously in this environment Theres a lot of volatility in the macroeconomic environment and therefore, its impact on our customers and potentially our credit position and so we will continue to monitor and do whats right for the long term health of the bank and our shareholders.
Okay and.
And then for more than I'll hop back, but on on loan growth any updated thoughts about how the current environment could impact maybe any of the plan run off you had or or pipelines. In general is there any kind of updated you know maybe second quarter view you can give us on how you think kinda net growth could trend just given that were already quite a few moving pieces kind of before.
For the macro uncertainty.
Sure. Thanks, I'll first speak to the run off portfolio and that detail is in the supplemental material on slide 17.
When we purchased a beneficial a year ago now about 19%.
Total loan portfolio was.
Considered in this run off non relationship based portfolio that is down to 1.3.
3 billion or 15% and we do expect that to continue the largest worsening network book is residential mortgage at just under a billion dollars and.
Obviously that is clearly affected by the interest rate environment, and we had seen significant run down in that portfolio, along with some refinancing and participation and leverage loans throughout the year be it will obviously be interest rate dependent we would expect it to continue but the rate of pace will be a function of.
Particularly the refinancing in the residential mortgage market.
Steve if you'd like to talk about the pipeline.
Yes, so as you know as Roger indicated in his opening comments, we were really pleased with the first quarter.
Kind of 10% annualized growth, excluding the allowance and the runoff portfolios.
Presently you know as we ended March our pipeline was was there was fairly strong was we had a 90 day weighted average of just over $200 million of new opportunities.
Expect to fund as a weighted average probability over the next 90 days, but you know clearly all of a focus right now is on.
The PPP activity and on the loan that deferral activity.
And while our pipeline is good we really would anticipate.
Lot of this opportunity moving to the latter half of the year.
In the near term well, it's really hard to forecast any type of loan growth with any type of accuracy, but.
Assuming some recoveries the latter part of the year end of third quarter early fourth quarter, we should see some activity pickup.
Okay really helpful. Thank you guys stay well and appreciate taking my question.
Thank you Mike.
Thank you.
Our next question comes from the line up Russell Gunther with D.A. Davidson Your line is open.
Hey, good afternoon guys.
Hey, Russell alia.
Hey, Dominic I wanted to follow up on comments you guys made with regard to some internal stress testing that you performed I wondering if you can share with us what some of your assumptions are within those more potentially adverse league.
Exposed sections like retail foodservice hotel just the type of.
Type of stress scenario, you walk through there and potentially lost content assumed.
Sure.
I can't speak to the sub segment level around our stress testing assumption, we do you know flex.
All elements of the portfolio, including loan growth net interest margin compression.
Our obviously credit cost, which is the main driver of the stress and our cost base.
I would say as Roger mentioned the type of environment. We're seeing now is it in the acute impact to the macroeconomic conditions, particularly in the second quarter are relatively consistent or somewhere between the adverse and severely ask first before early portfolio as we know not all economic environments are the same.
So they affect the say portfolio segments differently owner occupied is different than investor, the which is different than see an eye and then consumer but we have stressed all those up appropriately given the macroeconomic drivers, we look to our own performance our distribution and segmentation.
And.
As we've laid out in the material.
On slide nine you can see what our synthesize adverse stress will do based on a starting point of for Q2 thousand 19.
Got it that's very helpful. Dominic. Thank you and then you know I fell slightly to me, particularly helpful. The reserve levels by a loan bucket.
But from the outside looking in.
Felt the CRT and both investor and owner occupied looked a little bit lighter than I would've thought but.
Obviously that doesn't take into consideration the remaining credit Mark So I wonder if you could kind of speak to to where those might shake out a few incorporate that or any just broader comments on on reserve levels within CRD today.
Sure in first I would remind everybody.
As we saw in our quarter end metrics within the portfolio all of our credit metrics both waiting in line going incredibly strong so all of the provision or a Seattle in the first quarter was driven by the macroeconomic factors through Cecil modeling and and for the most part our portfolio being out.
Yes, I see in high that's going to be driven by the macro interest rate environment in unemployment most of the other segments are driven by unemployment and then CRT in particular with forecast around the.
Real estate pricing index seems which have not yet moved as dramatically as what we're seeing in unemployment and GDP. So to the extent you know those macroeconomic conditions are forecast change as the severity and or the duration of the economic forecast Ics.
And then it's likely that CRB and.
Some of those sub segments would be more impacted.
And at this point time, we again, we haven't seen any indication within our portfolio and some of those macroeconomic drivers for indicating that stress.
Okay. That's very helpful. Appreciate that Dominic.
Last question for me guys Yeah.
Appreciate the ring fence of PPNR for.
To Q, just wondering if you could within that.
You touched on the expense outlook for the second quarter.
Maybe just discuss some of the puts and takes there relative to one Q and.
In anticipation of.
That is lower fee income thank you.
Sure. The first thing I would note is the first quarter PPNR was particularly strong one by the outsized CLA that Roger mentioned, but we also had some some onetimers and our cost base that also improve that number for the quarter.
Going forward the lower PPNR is primarily for personal driven by the 150 basis point rate decreased by the fed followed by the lagging trend of LIBOR, which was still over 100 basis points, but just recently in the last 30 to 40 days of has dropped the and over 50 basis points.
Obviously will play into our rate resets, particularly for May and June and then.
We discussed in Roger mentioned that our assumption when we laid this out obviously things very quickly week to week, we wanted to take the.
Conservative approach to say what would impact to our fee businesses B, it's kind of the stay at home conditions in our region maintained so most of the lower PPNR is driven by those two impacts our cost management continues to be disciplined, particularly in this environment, where were working from home and we're actually seeing.
Make sense all cost saves now that are naturally occurring there will be some increase throughout the year as we continue to invest in the business, including delivery transformation and some marketing dollars associated with our marketing technology investments for future growth, but for the most part they would be relatively.
Consistent with our initial indications from a couple.
Months ago, and slightly above what I would say is the run rate from first quarter, which is probably about two and a half a million dollars higher than.
Core non interest expense those permits.
That's very helpful dominant thank you so much.
Thank you.
Thank you as a reminder, ladies and gentlemen that star I want to ask the question.
Our next question comes from Atlanta Brody Preston.
With Stephens your line is open.
Good afternoon, everyone how are you.
How are you don't Brody.
In doing on thanks, Tony.
I just wanted to circle back and on the.
On the lease portfolio, the new Lane could you could you mentioned the collateral its back from those moving loans Dominic.
Sure you so.
Primarily it's the products that the leases are.
Providing sponsor that the.
Whether it's the equipment for office equipment, or big equipment or retail equipment, but there is.
The only a dollar residual at the end. So most of the product is paid for and recovered to just manage working with the customer and channel partner.
Okay. Okay. So that's so like I was sort of looking out on slide eight the Hcl by segment and the Cnine portfolios up near three with the lease portfolios on the longer in 34 basis points and so I just wanted to better understand what was driving some of the differences between you know I guess, what your see some model the spitting out for.
Loss content between those two books.
So on the hotel portfolio you have a bullet there. This is the Max LTV and debt service coverage ratios, 75% and 1.3 times I just wanted to clarify that that's the Max LTV in the lowest that service coverage ratio that youre underwriting too before this.
Sure, Steve if you'd like to address that question.
Yes that is correct that would be the.
The Max So obviously we.
I have ltvs that are lower and coverages that were higher at time of origination.
Yep Yep, Okay [noise].
Then on the ER.
The half million dollar decrease in third party funding cost that you had in cash connect I'm. Just wanted to clarify is there more to come here Dominic like disease as the costs move lower and what's the average cost of the of the third party funds.
Sure. So a couple of points first the first quarter impact to cash connect was primarily rate environment, driven and we position that business to be rate neutral. So the decrease in funding cost was commensurate with that.
Primarily the interest rate environment, we don't.
Disclosed that third party funding by pricing, but it is commensurate with and so.
Slightly above our internal cost of funds.
Okay, Great and then.
How much of the.
I guess just in terms of your mobile usage its up pretty dramatically. So I just wanted to better understand how you are you thinking about potential branch rationalization in the aftermath of us.
Yes, so I think for certain what we've observed over the last month and a half is that what we believed and we're playing planting and our investing in with regard to delivery transformation. It that customer behaviors will shift clearly events environment has accelerated that and reinforced kind of our position to do so.
We are able and as laid out in the supplement service our customers in this environment through reduced branch count increased use of our our mobile product along with supplemental my wish this mobile product along with the call Center. So I think we're all learning a lot on how to work in this.
Firemen, we're clearly seeing our customers able to adapt to this environment significantly and we are actively evaluating.
All post coded realities and implications for our customers foremost, which is our priority and how best to operationalize the bank.
Okay, Great and then one last one from me you know, it's nice to see.
The wealth management and trust assets up you know, it's been down pretty much across the industry and so wanted to know what drove that if it was you know maybe one big one new big client coming in or if anything was tied to bankruptcy and.
Cash minus or the timing in terms of intra quarter when when those fees typically come in.
Sure. Our parts you would you like to handle that question on wealth.
This is all thanks for the question I think we've.
Weve continued through the first quarter is pretty strong performance in both our corporate trust business, we had a very solid.
Fourth quarter on the personal trust business in terms of he Wow, it's not been anyone customer referral program, we've instituted working with the commercial bankers, we've seen an uptick in referrals for Matt we've seen referrals coming in from.
Existing clients as well as just good strong market performance through at least early March really contributing to the increase you.
I think there was one more question and just.
Just the timing of when those fees come in the quarter, Yeah, we for the.
For the advisory businesses, we usually bill in advance of deep.
At the beginning of the quarter through March 31st within the billing for second quarter, and obviously that that will be slightly down given the a good market through the end of March was was down.
Okay, great. Thank you very much you taking my questions have grown I. Appreciate it. Thank you. Thank you very much.
Thank you.
Our next question comes from them on a per it's frankly been name is Scattergood. Your line is open.
Good afternoon.
How are you.
I'm doing well hope youre as well I apologize I had some connectivity issues there for a few minutes. So it took off probably does it some of my questions were already already asked and answered with regard to the the P.P.P. program do you have a or can you give us any color regarding the dollar amount of kind of remaining applications.
You have and how much of that you would expect to be funded during the second round of the of the program.
Steve if you'd like to address that.
Steve.
So this is I apologize I was a lot easier I apologize I was going to pinch hit for you Steve but go ahead.
[laughter].
The first round as you saw in the in the information process around 2400 applications for around $770 million. All that has been funded at this point, except for a couple million dollars, we had teed up 1800 applications.
For round, two and through kind of late morning that today, we did.
A process than received approval for.
68 of those 18 hungry for an additional $86 million.
I.
I don't have the.
The total around to what that 1800 would have totaled I can we can circle back with you on that question I'm less.
Someone else and align all the team has.
Yeah. This is Roger so and it's Steve mentioned in round one our average loan size was a little over 300000.
We believe based on the applications received that were in the middle of processing. It's the second round will be a little under a 100000.
Which I think demonstrates the fact in the the need for the second round, so they could get to the to the smaller customers.
Great. That's that's helpful. And then just a last question for me with regard to to noninterest income in some of the line items that are potentially sensitive to to the covert environment and thinking about credit debit card fees and deposit service charges, you know any kind of sense for.
Is there additional pressure on those line items and into Q a relative to one can you just given that we'll likely see you know full full quarter impact.
Sure. Good question I would say absolutely we think back that really 10 or the 12 weeks in the first quarter was business as usual and it really wasn't until the end of March that I think most areas, particularly across the country. We're in a staying home situation for a period of time, so whether its.
That cash connect to our own customers in our in our local footprint tranche transaction and ATM.
Transactions are down without a doubt and then that would extend through March and likely recover and as we see the reopening of the economy and faces, but most likely we'll see it in that credit debit card and ATM transaction line.
Potentially in mortgage banking to the extent either from an interest rate environment and door and ability to to do.
Home appraisals et cetera would be impacted as well.
Great. Thank you for taking my questions.
Thank you.
Thank you.
And with no further questions in the queue I would now like turn the conference back over to Mr. Roger level.
Thank you operator, Dominic and I will be participating and investing in an Investor conference via Teleconferencing next week and as always we're available for additional questions. After the call. Thanks, very much for your interest and support and which fits and we wish everybody a have a good day. Thank you.
Ladies and gentlemen. This concludes today's conference. Thank you for your participation you may now disconnect everyone have a wonderful day.
Thank you.
Good morning.
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