Q2 2020 Simmons First National Corp Earnings Call
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Thank you. Please go ahead Sir.
Good morning, Thank you for joining our second quarter earnings call.
Named Steve nationally and I served as Chief administrative officer, and Investor Relations Officer Simmons first National Corporation.
Joining me today, or George Makris, Chairman and Chief Executive Officer, Bob Fehlman, Chief Financial Officer, and Chief Operating Officer, David Garner Executive director of Finance, and accounting and Chief Accounting officer, and that rent Chief banking officer.
Purpose of this call was to discuss the information and data provided by the company in our quarterly earnings release issued this morning and to discuss the Companys outlook for the future.
We will begin with prepared comments, followed by Q and ice session.
We have invited institutional investors and analysts can be equity fund to provide research on our company to participate in MCU and nice finish it.
All other gas during this conference call or in listen only mode.
Transcript of todays call, including our prepared remarks, and MCU and ice session will be posted on our website Simmons bank Dot com under the Investor Relations page.
During today's call, we will make forward looking statements about our future plans goals expectations estimates projections and outlooks.
I remind you that actual results could differ materially from those projected in the forward looking statements due to a variety of factors.
Additional information concerning some of these factors is contained in our SCC filings, including without limitation. The description of certain risk factors contained in our most recent annual report on form 10-K.
And the forward looking information section of our earnings press release issued this morning.
The company assumes no obligation to update or revise any forward looking statements or other information.
Lastly, we will discuss certain non-GAAP financial metrics, we believe provides useful information to direct investors.
Please note that additional disclosure regarding non-GAAP metrics, including the reconciliations of these non-GAAP metrics to gap are contained in our earnings press release, which is included as an exhibit to our current report filed this morning with the FCC on form 8-K and available on the Investor Relations page of our website soon.
Bank Dot com.
I'll now turn the call over to George Makris.
Thanks, Steve.
I'd like to begin todays call by thanking the Simmons associates for their commitment and dedication during the past three months.
Special data gratitude goes to our branch call Center digital banking support staff, who were here every day to fill the needs of our customers.
We will continue to make operational adjustments to help meet the needs of our customers being communities in the coming months as we navigate these very uncertain times.
I'm very proud of our team and their demonstration of our community banking badge.
My prepared comments today will be brief we have posted an extensive presentation on our website. It Simmons bank Dot com, along with press release and financial data, which gives much more detail regarding our quarterly results and other important information about our company.
In our press release, we reported net income of $58.8 million for the second quarter of 2020.
An increase of $3.2 million compared the same quarter last year.
Diluted earnings per share were 54 cents for the quarter.
Included in the second quarter earnings were $3 million in net after tax merger related early retirement program and branch right sizing costs as well as 1.6 million dollar game on the sale branches.
In May we sold three branches in Colorado.
And on June 27th we closed 11 additional branches.
Excluding the impact of these items the company's core earnings were $60.1 billion for the second quarter of 2020 in core diluted earnings per share were 55 cents for the cool.
Our return on average assets was 1.1%.
Our return on average common equity was 8.2%.
Our return on tangible common equity was 14.6%.
And our efficiency ratio was 49.1% for the second quarter.
As of June Thirtyth total assets were $21.9 billion.
Our loan balance was $14.6 billion and our deposit balance was $16.6 billion.
Our loan pipeline was approved and ready to close loans was $72 million is the ended the quarter signaling a major slowdown in new loan activity in the markets we serve.
At June Thirtyth, RPP loans totaled $964 million with an average loan balance of $123000.
We've also modified approximately 4600 loans totaling $3.3 billion.
Our net interest margin for the quarter was 3.42% in our core net interest margin, which excludes accretion was 3.18%.
The allowance for credit losses on loans totaled $232 million or 1.6% of total loans on June thirtyth.
In addition, our reserve for unfunded commitments was $24 million per quarter in.
Total deposits at June Thirtyth were $16.6 billion, an increase of $1.1 billion since last quarter.
The increase was primarily in the non interest bearing deposit category and was partially offset by decrease in our brokered funds a $309 million during the quarter.
Our non interest income for the second quarter was $50 million, an increase of approximately $10 million compared to the same period last year.
The increase is mainly due to mortgage lending income driven by the current right environment.
Non interest expense for the second quarter was $112.6 million.
Core non interest expense for the quarter was $108.6 million.
On a linked quarter basis, our non interest expense decreased $13 million and core non interest expense decreased $16 billion.
Our capital remains very strong quarter in.
Our total risk based capital ratio was 15%.
Our common equity tier one ratio was 12%.
While our tier one leverage ratio was 9%.
The ratio of tangible common equity was 8.3% at June Thirtyth.
Once again, please view additional information on our website Simmons Bank Dot com.
Finally, I'd like to reiterate we're operating under certain conditions.
The direction of the economy is unclear and unfortunately, we don't seem to be close to a consensus as to the severity or duration of the effect.
I expect that there will be substantial changes in our world as a result of the pandemic.
As we've done today, we will try as best we can to be prepared to adjust to those changes I'm proud of the effort of our Simmons team and look forward working with them as we navigate through this crisis.
Ill now turn the line over to our operator invite questions from analysts and institutional investors.
As a reminder across the question.
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Your question press the pound.
Please stand by what we compile the Q and a roster.
Our first question comes from the line of Gary Tenner from D.A. Davidson. Your line is now open.
Good morning, Gary.
Pardon me Gary Please check your mute button.
Sorry, sorry, good morning.
And just couple of questions first in terms of deferrals I think you'd mentioned $3.3 billion you guys had been fairly aggressive.
On the front end I think in terms of providing deferrals kind of for the asking so to speak and I'm just wondering as you're getting you know maybe to the.
To the end.
Over the initial period of deferral for some of those loans, what you're saying.
In terms of request for extensions and what your thoughts are on that program right now.
Gary This is George good morning.
First of all clarify modifications make sure that we're all on the same page.
Modifications for us meant that we offered some payment modification not to exceed a six month period, we did that very early on in the process in order to keep our customers from going deeper in depth drawing on.
Funded loan commitment.
We have not changed any of the original loan terms.
We have also put into place a seven point scale.
Each one of our lenders is going back to those customers in the last three weeks.
Right did those one through seven.
One through four.
Tells us that they expect we back on full.
Principal and interest payments within 90 days.
Seven tells us we might need to make some.
Modification to the loan or take any immediate action and I'm happy to report that we have a very small number in that category seven.
Not surprising to any of you would be that hotels and full service restaurants appear to be the laggards in the group with regard to getting back on piano, but so far our analysis has not.
Proven any problem loans at this point, but once again, we have qualify that by saying we don't know Hello.
The pandemic is going to play out we don't know which states my.
Close hospitality as I did early on in the process. So we're trying to remain as fluid as we can and work with our borrowers I will say this though.
Our borrowers have done an excellent job and mitigating any damage.
During this period of time most of them have applied for PPP loans that got them through.
Andy if I'm reading the press correctly.
There may be another stimulus package.
Actually designed for those hospitality areas that are hardest hit by the pandemic I think one thing that's very telling is.
Pretty sure you hadn't had chance to look at our presentation, but if you'll look at page 10, we list our unfunded commitments by category and what you will note is that from Q1 to Q2, they're only two categories that declined in unfunded commitments, that's construction and AG funding and that shouldn't.
Surprise anyone that construction news.
Continuing on and that we're funding our agro loans all other categories increased.
Funded commitments so.
We don't have loan growth shown because we forestar customers to draw on their lines credit.
Thank you for that and I just had a follow up on terms of the energy portfolio down around $300 million now and it looks like another $200 million.
Planned reductions back half of the year I thought coming into the year.
Correct me, if I'm wrong I thought the target to get the energy portfolio down she was about $200 million on looks like now it's 100 towards the end of the year. I'm wondering is are you moving closer to a full exit of that business and I apologize if I had missed you mentioning that previously.
We are moving toward a complete exit except for those borrowers who have a diversified relationship with the company.
And we have several lows and that's probably that.
Residual hundred million dollars.
The energy is just portion of our relationship with that particular ball.
Before we have specific.
Individual energy related credits it is our intention to exit.
Thank you very much.
You bet.
Thank you. Our next question comes with a line of Brady Gailey from KBW. Your line is now open.
Thanks, Good morning, guys.
Good.
Maybe one more on energy well, we're on the topic, but some of the.
Energy shrinkage, we've seen to date has been fairly costly.
When you look.
The continued shrinkage that you expect.
The next.
A couple of quarters two a year.
Do you expect it still see some noise and some elevated costs associated with that shrinkage like we've seen in the past.
Right I would tell you hope not.
We.
We monitor every energy credit and we have.
An analysis shows when we expect exit any issues that we may have.
What their hedging position is.
The South one was a bankruptcy that was not managed by Simmons.
It was.
National credit that we bought into.
The unfortunate situation, we did sell one loan at a loss.
We have.
This quarter identified one more.
Problem loan in midstream category that we have a specific reserve.
Yet.
But other than that.
Assuming that oil prices stay where they are and demand continues to to rise proportionately.
We think that the rest of our portfolio looks good and there is an excellent chance for us to exit based on the scheduled we've put in our presentation today.
Okay, Alright, that's helpful.
So the 24 branches to be close later this year. It any comment on it was that all concentrated in one geography or is that kind of spread out throughout the seventh franchise.
It's spread out throughout the entire Simmons franchise, I think the state with the highest number branch closures is six.
And in the state.
And I'll tell you weren't we're not through evaluating our physical locations. Let me give you an example as.
As we have acquired banks we have.
Acquired some very impressive physical facilities.
There is one court or about 100 miles.
We're we've acquired two banks and we have about 120000 square feet.
Building housing about 160 associates.
Those were back office locations for banks that we've consolidated so in addition to.
Branch reductions, we're also taking a look at the utilization of the square footage that we have.
In our entire footprint. So no earlier this year, we talked about this year being an adjustment period and I think it's it's evident that that's the case.
We have hired a new director of real estate, we're in real estate business, what do we like it or not.
He has done a fantastic job of giving us an unbiased view of the viability of some of these locations.
So I would say that.
By the end of year.
We'll be down to 200 branches across the footprint.
The other 200 is right number or not we don't know.
But that is a constant evaluation for us.
Okay.
Finally, let me just with the net interest margin I know there's.
A lot of moving parts.
Then the upcoming reinvestment into the bond book, but.
As you look at the margin.
Back half of your.
Picked that will trend.
Bob Good Chris Paul Yes.
Well I would tell you first off obviously the biggest impact this quarter was the additional liquidity just like everybody else, we had two and half billion dollars in cash.
Invested basically 10 11 basis points are.
The pp, though PPP loans are great, but they're lower yielding loans at about 2.33%.
Going into Q3 in Q4, you know the biggest impact is gonna be first off when when did the BPP loans are they forgiven or paid off if it goes like we expected on the front end, which would be a larger portion paid off in the third quarter that yield would obviously go up quite a bit.
However, when Congress James the rules and it extended the submission period and all of that information.
It could delay that ppb forgiveness and pay off period, so could go into the fourth quarter and into first quarter next year, so that will probably be a little lower but I would say definitely it's going to cause some lumpiness in the numbers.
For for the next quarter.
Liquidity side.
We're continuing to look at it reinvesting bed in the security portfolio as you know in the first quarter, we de risked some of our security portfolio and also built up liquidity before we really knew that the government was going to provide liquidity to the market like they did where controlling our own destiny there.
So when we're able to reinvest that we are really reinvesting over a period time and getting good rates and just working on it just takes a lot.
Time to be able to get in this rate environment, obviously, our goal and we're hopeful to have that reinvested.
750 million to $1 billion and the security portfolio by the ended the year. So those two are going to drive the margin.
You know whether it goes up backup to our target level.
40 range, how long it takes to get there will be depend on that timing difference. We do think there is some continued opportunity in our deposit and funding cost a little bit in our transactions you can see we did a lot of work and then the end of the last quarter that really paid off this quarter.
But there's still some timing.
Deposits in federal home loan bank pricing that we think we'll have some opportunity over the coming quarters. So.
As we've talked before I think if you normalize our large and it's in that 340 range.
But it's going to I think just like everybody due to the circumstance, it's going to be a while gas for the balance of the year weather bumps significantly higher that because of forgiveness and payoff or if it continues at the same lower level because of liquidity.
All right that's fair Thanks, Bob.
Thank you. Our next question comes on the line of Matt Olney Stephens. Your line is now open.
Good morning, I want to follow up on that last question around security the Reinvestments and Bob you mentioned.
I hope to reinvest I think between 750 million to $1 billion by the end of the year.
Just trying to better idea, if you're going to be opportunistic and see how that plays out at the at the spreads become more attractive or if you really expect that range to be reinvested back half the year.
Regardless of the shape. It occurred just trying to understand the sensitivity behind that.
We we are eared you hit it right on the first one we're going to be very optic opportunistic in our reinvestment, we're not going to be forced so our goal is to have it by the ended the year. If we can't get the opportunities that we're looking for it may take a little longer but we're not going to force. It to go in and that's what we did this quarter is weak.
Selectively there was a lot of payoffs that we reinvested.
We're investing in select market immunities, we get a good tax equivalent yield there.
And some other investments in corporate.
Bonds and such like sub debt securities. So, we do a little bit in there, but mostly the beauties and then the agencies on a shorter term basis, but definitely be up opportunistic.
Okay.
Got it and then on the deposit costs.
Yeah, the bank and it really nice job this quarter, bringing down the overall deposit cost I think the interest bearing there now, but about 59 basis points.
If we go back four or five years, those costs were down and the 30 basis point range. So I'm trying to weigh that against the outlook that color for stability for the remainder of the year versus where it was four or five years ago last time, we're at this.
The low rate environment.
Any color you can get on that.
Well take up and George May want to say is.
Repricing, but as you saw our.
Like you said interest bearing deposits reprice really nicely and we also on page 22 presentations kind of showed the last time in the great recession, what happened with rates and it took a lot longer for rates to drop to the lowest levels that it took from Oh seven to 12 before to actually dropped to those.
34 basis points, so, we think theres, a little bit of opportunity and the interest bearing accounts still.
Again, the time deposits its only been a small portion of that that's reprice. So we think there's opportunities there.
Again, we're I think the market's gotten closer to the bottom this time than they did in the great recession, where it took a couple of years to get near the bottom.
That out yet and I I would say this week.
Through our acquisitions, we have some longer term CD commitments that.
We will certainly have the opportunity to reprice over the next 12 to 18 months. So you can see on page 22 of our presentation that our time deposits still have an average rate of 142, that's certainly higher than anything that's a in the marketplace. Today. So we would continue to see that bucket.
Decline our transaction savings.
Right.
Decreased 32 basis points there some room for continued reduction there.
But at 32 basis points not a whole lot.
So I would say that time deposits give us the best opportunity for re pricing over the next 12 18 months.
Okay. Thank you for that and then switching gears on to service charges. These were down sequentially I assume because of fee waiver. So are you still waiving fees as of today, just trying to get a.
Better idea of when this will rebound.
May have we we are still waiving fees and we were very specific about.
Any account that received a stimulus payment we made sure that there were no overdraft charges associated with any of that revenue and Bob I can't remember what that number was but it was six digits.
In.
The refunds all waivers.
You know, it's just when you take a look it at Moody's projections you take a look at.
Retail sales and.
Other consumer expenditures.
They're down and.
Therefore, there's more money in those accounts and there would be otherwise and I think it's just a reflection of less spending in the marketplace.
How well the stimulus package propped up some folks really needed.
And.
No.
I will like to statement I would high for us to hang our hat on.
Overdraft fees for our customers but.
So I think thats, what I think thats a good sign in the economy that there aren't spending money. They don't have Bob you might have couple of comments no. Good comments, there and I would say two is on the service charges, we had a commercial customer that we collect fees in the three to 350000 a year.
Their business was shut down for a period time. So during that period of time, we collected no fees because it's based on number of transactions. So thats. What just one example, then as George said, we had significant amount of wafers that just trying to help out the customers on waivers on fees. So we did some of that early on in the quarter.
You know one little bit of good news that we did see is the July Jude dub burgers were better than the May in April numbers in that bucket still was below our budget for the year for the month.
June but it did show improvement over the prior prior May in April.
So you know that that's one I do believe long term and when the economy gets back and everybody's back in business, that's more of a temporary.
It's just when how long does it take to get to those lab backup to the normalized levels.
Take quite a bit of time till we on the other side this problem.
Okay, great. Thank you and then I guess I want to go back to the loan growth commentary.
George You mentioned a few things in your remarks earlier I think the outlook calls for loan balances of flat to down 5%.
Can you add some more color on this and did that include or exclude PPP and I think I appreciate the energy lung contraction.
I would also be contracting the back half the year Edson.
Well Matt.
Matt probably has more detail I'll I'll remind everyone back half of the year, our aggregate portfolio is certainly going to play now.
And it's probably 250 $300 million at the time, so 100 million or 150 will probably pay down before the end of the year, but Matt you might want to talk a little bit about the loan growth or lack of outlook.
Yes, sure George Hey, Matt Great question.
Yeah at a high level there is outside of energy, there's no specific category, where we're going to see.
Accelerated payoffs, but we are as you as we noted in our release for the second quarter, we saw substantial pay downs and CRT I think we'll continue to see that.
But theres no acceleration any other product type as far as a loan growth goes now.
What we're seeing today is where we have longtime customers that may be.
In a position to take advantage of an opportunity or have a good project, that's where we'll continue to see opportunities but.
As you can stay with a pretty Brady to close at 72 million that's dramatically down so I think just the the containing.
Decline will just be natural just pay downs and amortization.
Okay, great. Thank you guys.
Thank you as a reminder across the question you wanting to press star one on your telephone towards its all your question press the pound.
Our next question comes from the line David Feaster from Raymond James Your line is now open.
Hey, good morning, everybody.
I just wanted to start on the reserve.
Actually it's a challenging operating environment, there's there's a lot of opinion.
Fared remarks, but.
Given the pretty significant deterioration in Moody's economic forecast when comparing the June to March figures I was kind of surprised on the tier one basis point.
Increasing their reserve ratio ECP, just curious how do you think about the reserve ratio in.
The conversations that went into that was there any change either waiting the scenarios.
Baseline scenarios.
Yes, you think the bulk of the reserve build is over here or would you maybe expect to see more in the second half of the year.
So David here, Here's here's how we.
Weighted the Moody's.
Forecast.
So 68% waiting to the baseline.
Scenario, 22% to the adverse scenario.
And 10% to the severely adverse scenario.
But.
Let me just qualify that by saying. These are these are not geographic specific.
Okay, and when we take a look at the fast methanol methodology and we take national.
Projections, and then we have to bolam down too.
Well, we work with in our.
Footprint, let me give you some.
Data here on unemployment numbers.
So.
You know, what Moody's unemployment sales, 14% in Q2 and.
Over 10% at the end of year, well, here's what they actually are in the.
Markets, where we do business.
And this is as of June Thirtyth, Oklahoma's 6.6, Kansas is 7.5, Missouri 7.9, Arkansas was 8.0, Texas is 8.6, Tennessee is 9.7.
So the way we're looking at Moody's is what do you have a in my opinion very conservative view.
Of the economy based on the statistics in the markets, we do business.
All these scenarios are applied to our different categories and they come up with a very static number and then we apply.
Qualitative factors to that and quite honestly, there fairly conservative too. So we we had to our reserve fairly substantially we believe.
That 1.7% of our low loan portfolio is a very conservative number based on the risk as we understand it today.
And once again this Moody's forecast is over the next 12 month period.
Assuming that you know we continue to improve as Moody's believes we will during that fourth quarter period, we ought to be just fine.
And our additional allowance will be based stone Moody's forecast, so if they change into becomes more severe.
Then you would expect us to try to reserve more on that basis.
If we have charge offs that or not.
Accounted for specifically that could have an impact and then loan growth would have an impact but those are the elements that will take a look at.
As we continue.
To evaluate the appropriateness of our provision and therefore the allowance. So I would tell you we're very comfortable with where that is today.
Based on some pretty significant.
Analytics.
Okay.
Helpful.
And then just follow up on that question on on loan growth.
Not to mention that originations are down just I'm just curious how much of this payoffs and paydowns are obviously elevated but I'm just curious as to how much.
This strategic where you've tightened the credit box in are passing on more loans or.
Losing deals could cost like competitors that are being more irrational or our customers just simply paying down debt using excess cash and just paying down debt.
Just curious and then maybe how your pipeline what can heading into the third quarter.
That would you mind to address that question.
Yes, absolutely George it's really a combination of all three of your.
Scenarios, we definitely in.
Tighten down the trees as we should.
We're we have a cobot overlay to ensure new originations they had at the highest quality.
Underwriting.
And then also absolutely our customers are paying down faster there or and then finally there.
We're opportunities in the marketplace and we are in any with fewer.
Appease the marketplace you will see what we would call faster guide with looser terms are lower yields that don't fit our box right. Now so it's really a combination of all three as far as the pipeline going into the third quarter.
Each quarter, we saw on it we've shown a decline in our approve ready to close I think you'll continue to see that until there is some more certainty it with economic conditions.
Okay.
And then last one for me George just I'd be curious it more because more of a strategic question. Obviously you you talk about the branch rationalization, but you know with advanced didn't make.
Good increased remote working and increased digital adoption in changing consumer behavior has there been any change in your strategy.
Is there any.
Both on the cost saving front and opportunities to invest and maybe grow in new markets or maybe make some opportunistic new hires or anything like that just curious on how your strategy and focus maybe.
Changing in its this new world.
Well.
Certainly we have to take look at those opportunities based on the changes that have happened as result of discussion and I believe some of them, we're going to be permanent.
You know I will say this we have had excellent results from our investment in our digital channels.
And we have roadmap over the next 18 months, where we will continue to expand and enhance our digital offerings to include credit cards to include investments and other products and services that we offer.
So I expect that the trend of self service will continue and therefore put even more pressure on our physical locations.
It's also going to require us to be more.
Concentrated with our customers instead of reactive.
So I think you're going to see quite a shift in skillsets with our customer facing particularly our branch staff.
Who are going to be more universal bankers. If you will then tellers.
We're gonna have to be able to meet our customers' expectations with regard to their questions across the spectrum of our products and services.
We have.
The.
Been very lucky we have recently hired to.
Excellent executives within the company that I'll mention now one is can't Eastman.
Ken is our new Division Chairman for Texas.
Can't came to us with a very storied background in the banking business in certainly well respected.
In the Dallas Fort worth markets, we're glad to have Cantor your and then Jimmy Crocker.
As recently joined US is ahead of our.
Wealth group.
Jimmy.
Has extensive experience is an attorney.
As you May recall, Phil tap and retired earlier this year, Joe climate, whose run our trust department for years and years is retiring at the end of this month, so Jimmy coming on board was very timely.
Higher for us.
I would say the one of our real opportunities for growth is going to be in Jimmy's area because.
While we have great wealth products through or not.
Widely dispersed across our footprint, so thats, a real opportunity that we see going forward.
With regard to work from home.
And those kinds of.
New work methods.
We're still evaluating whether or not that's a good idea for our company or not.
Certainly is reasonable to consider that some positions may adapt to that fairly well, but we are still a people business and that person to person contact not only with our customers, but internally is invaluable.
So how do we balance that were not real sure yet.
But we're trying to figure that out.
From a.
Digital standpoint have already mentioned that but we continue to invest in technology.
I think our investments really pay dividends.
In our organization so efficiency through technology is still an opportunity for US you probably saw all our efficiency ratio in our expense reduction in the second quarter, we're very proud of that and we expect that to continue going forward.
So if I did that answer I specific question David.
Paul jobs, but you're welcome to fall.
No that was terrific. Thank you.
Okay.
Thank you. Our next question comes from the line of Garrett Harlan from Baird. Your line is now open.
Good morning, Thanks for taking the question, it's a great border this into being with your very strong cetone ratio in this downturn.
So where do you expect to run from a near term standpoint.
See what are you able to you that strong capital position in profitability to be a bit more opportunistic.
Drive organic in PPNR growth, albeit in a challenging operating environment.
Well, Bob do you do you want to talk about the outlook capital then maybe I can touch a little bit on maybe some utilization of that capital.
Yeah, George our our.
Gary Dart capital like you said is and we're in pretty good shape right now, especially taking the back when you back out the PPP impact at the billion dollars loans that doesn't negatively impact some of the ratios, but it does our tangible common equity and so forth.
But right now.
Where we are in this given the circumstances due to the uncertainties is kind of religious build the capital you can't and be ready and loaded when you can take advantage of it. So then yes. That's what we continue to do right. Here is continue to operate continued build profits that we can and build the capital levels and again.
Be ready for when the opportunity comes weather and Georgia said he'll go through some of those opportunities.
But that's what we plan to do in this process has continued to build the capital and continue to pay dividends at our current levels as we have in the past.
Geared out yes, Bob touched on some that's very important to us as our dividend history and that certainly important to our investors and certainly something that we intend to protect it all calls.
I'm very disappointed that we weren't able to bar stock back right now I think it's a heck of a bye.
We have some insiders that are taking advantage. They have will have 30 days month or quarter that we can do that.
I expect that you'll see us more buying.
When the window opens up for us this time.
And of course.
We had some really good discussions going on with merger partners.
When all this yet so we expect that if they survive like we expect to that we'll have those discussions again.
We'll have more M&A opportunities, but right now it's just.
You know all hands on Dec every man for himself and.
We're just trying to in that navigate through we will continue to build not only our capital, but our cash position at the holding company.
As well.
Certainly over the next year in half and we will be ready for those opportunities as I present themselves in the marketplace.
And Gary that have one other comment because I think you hit right on it would see T. One ratio I think in an environment like this the two most important capital ratios are the C.T., one and the total risk based capital that really risk weights your balance sheet.
As investors, we tend to look more at TCT, but that doesn't tell the story when you're in an environment like we are today and you really want to risk weight the assets and those two ratios do it. So I think good idea pointing that out.
Thanks for that color about thanks George.
You bet.
Thank you at this time I am showing no further questions I would like to turn the call back over to George.
Makris for closing remarks.
Well, thanks to each of you for join US again this quarter, we're very proud of our results and I wish I could tell you that we were very clear about what's going to happen in the third quarter.
You all know that we're dealing with some.
Uncertainty with regard to schools in reopening that's going to have a big impact on the economy and certainly it's going to have big impact on our ability to get all of our associates backed work.
So we're just going to continue to do what we're doing and and hope for the best we appreciate your support and I Hope you have great Doug.
Ladies and gentlemen, this concludes today's conference call. Thanks for participating you may now disconnect.
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