Q2 2020 Great Southern Bancorp Inc Earnings Call
Ladies and gentlemen, thank people standing by and welcome to the Great Southern Bancorp Inc. second quarter 2020 earnings call.
At this time, all participants hone in listen only mode. After the speakers presentation, there will be a question and answer session.
The asked the question during the session you would need to press Star then one on your telephone.
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Please first thought into.
I'd now like them to conference over to your speaker for today.
Kelly Baloney Investor Relations you may begin.
Thank you good afternoon, and welcome I hope that everyone on the college well the purpose of this call is to discuss the company's result for the quarter ending June Thirtyth 2020, before we begin I need to remind you that during the course of this call. We may make forward looking statements about future events and future financial.
Form it you should not place undue reliance on any forward looking statements, which speak only as to the date. They are made these statements are subject to the number of factors that could cause actual results could differ materially from the results anticipated or projected for listed some of these factors. Please see the forward looking statements disclosure in our second quarter 20.
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I didn't see Joe Turner, and Chief Financial Officer, right. One on the call with me today I'll now turn the call over to John Turner.
Good afternoon, Thanks, Kelly and I want to thank everybody for joining us today.
Hopefully you've had a chance to review our second quarter earnings release, we're certainly proud of what we accomplished during the second quarter in a very difficult environment.
As we continue to manage through the pandemic as always our primary concern is for the wellbeing of our associates.
Customers and the communities, we serve I want to thank aren't nearly 1200 break southern associates for their tireless work and resilience during this difficult huh.
I'm so proud of our team in their response to this crisis.
As we said last quarter, we are steadfast and following C.D.C. health guidelines, while providing our customers ready access to our products and services.
We continue to actively work with our customers who may be experiencing financial hardship.
The duration and severity of the pandemic remains unknown, creating great uncertainty and challenges to the U.S. economy.
We are ready to respond to the challenges.
That are produced by the pandemic and are in a position of strength regarding capital earnings and liquid capital earnings liquidity and credit quality.
I'll provide some brief remarks.
About the company's performance during the quarter and then I'll turn the call over to Kelly wants to talk about business initiatives and then Rex helpful. In our CFO will talk about financial results then we'll open it up for questions.
As expected and then in this operating pharma our earnings declined in the second quarters compared to the year ago quarter. The primary driver of the earnings decline was our loan loss provision expense, which was 4.4 million higher in the second quarter this year than in the year ago quarter.
Still we achieved a earnings of 93 cents per diluted common share pretax pre provision earnings were down about 1.3 million or 5.6% from a year ago quarter.
Rex will give a little more color.
On our earnings.
Our annualized return on common equity during the quarter was 8.4 or 5% our return on assets was 0.98% our net interest margin was 339.
Our efficiency ratio was 56.75%.
As far as loan production loan production in the second quarter was solid and came from all areas of the franchise.
I'm scared of loan payoffs have certainly decrease you know since.
February March timeframe of this year.
Our outstanding loan balances increased 246 million from the ended the year from 4.15 to 4.4 billion and increased about 187 million.
From the end of the first quarter about 120 million of the increase was.
With BPP we saw.
Increases in multifamily loans commercial business loans, which is where the PPP loans would be house, one to four family residential and commercial real estate loans.
Our committed pipeline continues look good was about $1.3 billion, that's down about 91 million from the in the last quarter. The unfunded portion of our commercial construction loans is about 754 million.
Down about 56 million from more from the into March.
Our asset quality continues to be extremely strong our charge offs for the quarter were 127000, our charge off for the year were 365000.
So very little act very little charge off activity historically low levels.
Non performing.
Loans, and and Oh, sorry, and classified loans as well, we do fully understand though that this difficult environment.
That we're in for an unforeseen period is going to produce hardship for some of our customers. In fact, we saw an increase of about $40 million in our watch customers from 34 million.
74 million, so about a 40 million dollar increase still pass credits the credits with a little bit more.
Concern than than this a regular pass credit would have that's why we're increasing our allowance for loan losses, we've increased that about 25% from 40 million to just under $50 million at the end of the quarter.
To account for more uncertainty in the loan portfolio and I would remind you that we did not adopt Cecil and we have said that.
Have we adopted diesel on January one.
We would have added 11 to 14 million.
To our allowance at that time.
Loan modifications, our loan modifications totaled $1 billion.
Or covert related loan modifications totaled $1 billion at the end of June we've modified 431 commercial loans were the principal balance of $931 million and 1700 too.
Mortgage and consumer loans with a balance of $80 million.
As you May remember from our meeting last year, we granted modifications to.
Virtually all customer to reflect the systems it wasn't based on need or credit concerns and about three fourths of the.
Billion dollars of modified loans were modified to interest only for nine days in other words, we deferred the principal portion of their payment.
For 90 days and based on discussions with our customer base, we do believe that.
A substantial portion of those that were modified will return to normal payment terms.
By the end of this summer.
Our capital continues to be strong.
Our stockholders equity increased $24 million to 627 million from the beginning of the year our book value increased from 40 361.
To 44 50 during the second quarter and increased $2 in 21 cents. During the first half of the year our ratio of tangible common equity to tangible assets continues to be strong at 11.1% during second quarter. We further enhanced our regulatory capital position with the issuance of 75.
Million dollars of five in half percent fixed to floating rate subordinated notes due June 15 2030.
The notes will accrue interest at a fixed rate of 5.5% to June 15, 20.5, and if we don't pay them off at that time, they will accrue interest at a floating rate.
Also during the quarter, we declared a regular cash dividend of 34 cents.
Per common share and we currently anticipate that our regular dividend can be maintained for the foreseeable future.
That concludes the.
Formal part of my remarks, I'll turn the meeting over to Kelly permanent.
Our director corporate Communications, who will talk about our business initiatives during the quarter. Thank you Joe and my thoughts today on share some activities in our banking center network and as of today. We closed two banking centers located in high these stores that are quad cities. The Iowa market. We were notified in April that Hy Vee was.
Making so our infrastructure changes that's the necessitating these closures and so that will leave us with three banking centers operating in the quad cities area with approximately $110 million in deposit.
In August will consolidate a standalone drive through office into our downtown office, and Parsons, Kansas and when this.
Validation occurs and that will ultimately leave our company operating a total of 94 banking centers in the franchise.
While on the subject of banking centers and there has been a lot to talk about how that 19, maybe speeding up rationalization or closures.
Second mortar banking centers since customers has been driven to more self service delivery channels.
My side share some of our statistics today kind of the let you see how it's affected us looking better looking back at our statistics since March which is about one stay at home orders went into effect and most of our markets. We've seen a general uptick in self service channel usage and adoption in late March our banking center.
Just began providing drive through service only had in person service by appointment on late.
Experienced a rather dramatic decrease and customer traffic in our banking centers that only really at the beginning of the pandemic period from the end of March when it first kind of started to the end of April we saw a customer traffic decreased by about 50% in our banking centers and the total number of transaction decrease.
By about 16%.
Since then though as our communities have opened up more we're seeing a return to near normal levels of customer traffic and transaction activity from a big picture perspective, though I think it's important to say what near normal levels are we have and in the past few years experience at relatively steady.
They trend and fewer teller transactions in our banking centers and we expect this entity. So there has been a decline there.
And looking at our self service channels. During this time and we believe that they pandemic definitely presented an opportunity to introduce more of our customers to our self service channels and promote more usage for example, our mobile check deposit which is included in our mobile App, It's where you can take a picture heavier.
Positive take a picture the check.
It will be deposit it automatically into your account was vitalize more than normal and we had an increased enrollment rate since the beginning of March we saw 28% list and the number of transactions without service and a 12% increase in enrollment.
We saw more usage of our person to person PTT service with a 21% increase in transaction volume since March.
We also saw and significant increase log in activity at our online banking platform and mobile app, especially around the time that the government stimulus checks were paid also we experienced that faster than normal adoption right about the new online banking customers and mobile banking app users.
Since the beginning of March so we definitely have seems an upset with all that said, we will continue to evaluate our banking center network, and rationalize where appropriate having closed or consolidated more to 36 offices and the last six years and of course will continue to focus on investing and digital channel.
For our customers for now what we're seeing is a mix and availability as convenient access channels is important to our customer base.
From our recent survey data that we had with JD powers, we found that a significant number of our customers still enjoy utilizing our banking centers and consider a branches and main point of access at the same time. Many of these customers are also utilizing self service channels, but again the banking scenarios.
Still very relevant until their service preference. This includes the younger generations Gen X and y.
We fully understand though that our industry is evolving and that traditional banking center as a part of that evolution in that light. We're currently engaged with us vendor and that is conducting an end up 30 of our banking Center network.
That is nearing completion right now and we expect that the subsequent results and recommendations will ultimately guide as to ensure that our network is optimized and competitively positioned for the future and with that I would be I'm glad to turn the meeting over to Rex Copeland.
Thank you Kelly I'm going to start this afternoon by talking about net interest income and margin.
Our net interest income in the second quarter of 2020 decreased about 1.4 million.
To four point.
$43.5 million and that compares to about 44.9 billion in the second quarter of 2019 and also in the first quarter.
2020.
Net interest income was affected by the federal reserves significant interest rate cuts that occurred in March.
And additional lower earning assets that were put on the books in the second quarter. This year, which would include the PPP loans that Joe mentioned before some investments securities that we added and also just increased cash balances that are held at the Federal Reserve Bank.
And then also to a smaller extent the subordinated debt offering that we completed.
Did you had a little bit EBITDA negative effects on our net interest income.
We think that that sub debt offering that we did well probably impact our margin going forward about eight basis points on an annualized basis.
The net interest margin in second quarter. This year was 3.39% and that compared to 3.97% in the year ago second quarter and 3.84% in the first quarter of 21.
The decrease in the margin from the prior year second quarter was about half the result of the decrease in the.
Average yield on our loan portfolio due to more interest rate cuts in March the other half of it was related to the the kind of liquidity items or other items I mentioned previously.
The added PPP loans.
The additional cash equivalents and the additional investment securities all those things combined were about another $500 million of assets that were added.
The rate cuts of course negatively affected our net interest margin in the near term as a large portion of our loan portfolio is index to one month LIBOR rates and those are going to decline almost immediately with the rate.
We have a portfolio of around 1.8 billion or so of loans that that would be tied to that one month LIBOR index, our deposit portfolio will reprice lower as well, but not as quickly as time deposits have to mature over a period of time so.
Just kind of to give you a little comparisons on.
June Thirtyth of this year, our cost of deposits was 29 basis points lower than it was on March 30, Onest of this year. So when that three month timeframe, we were able to reduce our deposit costs by about 29 basis points overall.
We expect to continue to make further progress in reducing our funding cost of deposits in the remainder of this year just a couple of numbers I'll throw out cumulatively we've got.
About 540 million of time deposits that will mature and breeze reprice in the next three months and cumulatively that number grows to about $842 million.
Through six months time, and then 12 months out from from June 30, as the cumulative total of all those time deposits would be about 1.4 billion. So we do have quite a bit of deposits that we will be coming due and repricing in the next three to six months and the most of the remainder would be in the following.
Six months after that the weighted average rate on that.
Time.
There's going to be around 1% right now give or take a little bit either way.
Which one of those cumulative type range, you look at but about about one half percent is sort of the average of what we have in there right now.
The company's that interest margins been positively impacted or as you know threw out by significant additional yield accretion that we recognized related to the FDIC acquisitions that we've done several years ago.
In this quarter the impact to our net interest margin was a positive about 12 basis points.
Remaining yield accretion that we have is about $4.2 million and we think about 2.2 million to that will be recognized in the remainder of 2012.
Next thing I want to talk about is non interest income for the quarter June 30. This year, our noninterest income increased 1.1 million to $8.3 million compared to the year ago quarter.
The increases were really in a couple of areas net net gains on loan sales.
Up about one of the half million dollars compared to the prior year.
The quarter. The the increase was really due to a lot of fixed rate loan originations, which we turned around itself.
Early in the secondary market.
As you are well aware rates dropped so much and there's been a lot of refinance activity.
So we have had quite a bit higher level, then that may be normal.
Loan originations and a lot of those loans have been sold in the secondary market. We also had other income that increase about 667000 compared to the year ago quarter. We did have in the second quarter. This year.
Several.
New interest rate swaps that we entered into back to back swaps with our customer our loan customer and Counterparties and so we've had some fee income of a little over $800000 related to that.
Partially offsetting those increases we've had us.
Decreases in our service charge and ATM income that's down about $1.2 million from.
The year ago quarter that decrease is really a combination of.
Lower usage by.
By our customers. They just have not been taking advantage of as much as they were previously.
Insufficient fund overdraft.
Product products that we have.
And also then just.
More liberal.
You know decisioning on our part as far as waiving fees and things of that nature. So in relation to the pandemic that the team of out here in the first and second quarter and so we've been working with customers to make sure that.
They are able to.
Continue making their up making their obligations and working with them on that.
The non interest expense.
Categories, I'll, just talk about sort of at a high level.
We're still tracking well on our core expense containment and operational efficiency noninterest expenses increased about 966000 229.3 million this quarter versus a year ago quarter.
The main drivers for that increase were.
Oh really related to salary and benefits.
Including in that incentives in our mortgage lending area.
Where again as I said, we had a lot higher level of originations and so there are some salary increases and incentives that have come about in the mortgage area and also little bit higher occupancy expenses those were partially offset by.
Expense reductions related to travel and marketing initiatives.
Sort of related to the pandemic and then also lower FDIC insurance premiums that we have had for a while that was credits that were that were.
So our benefit.
I think Joe mentioned earlier, the efficiency ratio for the second quarter was 56.75% that compares to 54.5 overseas for the second quarter of 2019.
Higher efficiency ratio in the 220 period was related to a little bit higher non interest expense levels.
Also looking as though however, the companys ratio of non interest expense to average assets dropped from 2.35% a year ago to 2.17% in this June 32020 quarter again that was related to that big increase that we had in assets that I mentioned earlier.
In the last thing I want to touch on today is liquidity.
At the end of June our liquidity position was very good.
Deposits at the Federal reserve vacant home loan bank.
And Unpledged securities aggregating about $580 billion so.
Totally liquid funds there in the on balance sheet and in addition off balance sheet, we had the ability to borrow about 1.1 billion.
On our secured line at the home loan Bank and we also have additional capacity if we choose to to add broker deposits if needed. So.
Our liquidity position, we feel is very strong here at the end of June.
The.
Our deposits increased during the second quarter by about $333 million.
Second accounts were up by about 500 million and that was offset some by decreasing balances as some of our time deposit categories. I'd say some of the increases related to stimulus funds deposit into customer accounts also PPP loan proceeds were in there and.
Some other things that were added into some of our reciprocal securitized money market deposits through the.
Product.
We expect to some of these funds are going to be drawn out of our deposit accounts overtime.
We have made plans for that.
We've already seen some of the ERP as obviously go out as as businesses have been paying their employees and their rent obligations and things like that so we've seen some of those funds.
Our balance is already that we anticipate some of these other.
Balances they go out overtime.
Throughout the rest of this year, but we've we've definitely have made plans for that.
That concludes the comments that I had today. So this time.
I'll turn it back over to our moderator for your questions.
Thank you.
Ladies and gentlemen, as a reminder to ask the question you will need to press Star then one when your telephone.
To withdraw your question has to pancake.
It's still want to ask the question.
Please them all while we compile the Qunar Boston.
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First question comes from a lot of Angeles with Piper Sandler Your line is open.
Good morning, everyone.
Good morning.
Yes, good afternoon, sorry.
Thanks.
But the belonged roadways.
Stronger here that I thought excluding the PBP just curious if there's more what information you can provide surrounding that you'll be able to segments draws on construction, but what's the sense of business development plans when customers.
I'll take a shot at that Andrew I mean, obviously, we have the loan portfolio, where you can see exactly where the loans loan growth came from I would say.
I would say loan growth generally, though it's being driven last Friday, new origination activity, although we do have new origination activity occurring across our franchise and probably a little bit more by slower.
Repayments.
We have a lot less revise occurring.
Then we did say this time last year, so I think thats whats driving loan growth you know maybe more than origination activity.
Yes.
And then with the what's the outlook right now in speaking with their customers on the PPP loans like how long do you expect goes to remain on the balance sheet. So some of those pay I like how quickly do you think there get those are going to be paid off or forgiven.
No I would think theyre going to be.
Paid off sooner rather than later I think the the US most of ours were originated.
Under two year notes and I would think they'll be paid off well ahead of that I don't know Rex if you've had more recent discussions on those than I have but I think we would expect big chunk of those to be paid off by the end of the year.
I think thats right I mean, probably more so maybe in the fourth quarter, just depending on the level of paper work that has to get done but yes.
I know, there's some things being discussed about maybe having a really short cut process. If you are low was less than $150000 and if thats. The case. Many many of our loans were less than 150000, so those might be expedited somewhat into the third quarter, but I would think that most everything was b.
Would be paid off either in the third or fourth quarter. This year.
Okay.
And then just one follow up question Kelly you guys somebody got.
Got study of your.
Branch network.
Banking Center network, that's going to be finalized so are there any early.
Conclusions that you're able to share with us or this too soon to tell.
I really kind of negative to see with how we are in there really early phases that they are looking at the entire network and looking at demographics market potential the building itself branding opportunities that we're just looking at a full spectrum of variables for all of our banking centers.
Great.
That covers my questions I'll step back.
Thank you.
Our next question comes from Milan, Michael Marino with KBW. Your line is open.
Hi, good afternoon, everybody. Thanks for taking my questions.
Hi.
I wanted to stay on the branch topic I was curious if you guys could could tell us who the vendor is that you are using as you guys kind of go down this path of it.
The lies in the branch network.
Using lamacchia their base have a Milwaukee, Wisconsin.
And you know obviously process is ongoing to your response answers questions. So not necessarily looking for takeaways, yet, but I'm a little more curious about what the actual kind of review process looks like and what some of the metrics maybe that you guys, you're kind of looking at and the decision making process.
Good.
And we're lucky I mean, as I said, a lot of different variables and where it right and we're looking at this also from the standpoint as branch as a teacher. If you will kind of what kind of technology that will incorporate into our branches. If there's any kind of changes we're not expecting to do a full spectrum change his entire network for look.
Where are those opportunities lie.
Again, they are looking at.
At our customers that are in that market the market potential that is there the growth potential population all the demographic.
That's really.
About the.
The transaction counts are at this location how those branches are utilizing and also going all the way down to how their branded and how we projected the community that we serve.
So well rounded study.
Yes.
Interesting.
And I guess.
From a higher level standpoint, I mean.
If we try to marry that internal review that you guys, you're doing with kind of your your financial strategic planning I mean, it's the high level hope would obviously be that there's there's probably some investments you need to make maybe on the digital side, probably some cost savings that could probably come out on the fiscal office side and the hope is that now now you'll be in a better position I'm just.
Serve your customers in each local market, but maybe be able to kind of help protect your your pure pre provision earnings given the lower margin is that is that kind of a fair summarization of you guys see it today.
I think it is Mike I mean, I think we know.
We don't believe necessarily that we.
Have a ton of low hanging fruit when you bear in mind that over the last six or seven years, we'd probably close to 25% of our banking centers. So there's not a ton of consolidation opportunity I don't think there maybe some here and there, but yes, I think that we would we would love to be.
In a position that the as I have a bank system, a banking centers that fits our customers need better and add a at a cost that's not a lot higher than than we have right now.
Okay.
And just curious from an economic standpoint, I mean, you guys have exposure to a few different markets.
It's kind of in a moving target for the entire country things look better than I like worsened and I guess any any particular markets that you know relative to the first quarter, you feel better about today or Conversely, maybe you feel a little worse about today as the spent the last 90 days kind of unfolded.
Not really I mean, I think we feel.
And I assume you're talking about geographic markets, yes, sorry, yet geographies.
I think we feel.
I don't think I don't think.
The.
I don't think we're really are there were getting significantly more or less concerned about a given market than we were at the beginning.
Say at the at the end of the first quarter.
Yes, I think generally.
We would hope like everybody else that are you know new cases of.
Cope at Nike would not be as high as they are right now so I think I think our I think our our general level of worry is maybe up a little bit from where we would have expected it to be at this time, but.
Yes.
I don't think thats about anyone market necessarily.
Helpful.
Thanks, John just racks lastly, I am sorry, if I missed it but but you know you walked through some of the liability repricing opportunities in the margin that are coming down and in the near future hears it.
Can you, maybe just kind of some rise a little bit ultimately as we speak about the direction of margin you. Obviously, the PPP loans can move down around a bit but if we back the out here I mean with the hope you that yeah.
A lot of the the pain from the reduction in fed funds and LIBOR was felt in this current quarter in that while there might be some more next quarter that some of those liability repricings will help offset that to a greater degree is that kind of the message or or is there something else that youve cornerstone.
Right I think Thats I think Thats correct I mean, what we've said in the past it and we believe this will be the case.
Sorry expectation anyway is that usually when we have a big rate dropped like we had that impacts us negatively for the you know the the first.
Q3 months.
Because loans of reprice down close to immediately.
The deposits some of our non time deposits weve been reducing rates on those and we brought some of those rate levels down.
Over the last several months about the time deposits.
Obviously, you have to wait till they mature and so that takes a little bit longer what we kind of CNR modeling is that we kind of take a bit of a hit in the in the early first two or three months and then over the next few though whatever six to nine months that starts to help us as as time deposits.
Mature and so our belief at this point would be that we should see our cost of deposits come down.
Mainly our cost.
Our our yield on loans has has pretty much dropped you know in the second quarter. This year for the most of that already we LIBOR has been I think one month LIBOR I think that's sitting at 17 or 18 basis points for quite a while now so most of those loans that are tied to LIBOR I believe it probably had a chance to reset down to to that.
Lower rate.
And so on the on the the funding side.
As I mentioned before we we dropped our cost of deposits down by about 29 basis points from the end of March to the end of June I don't know that we can duplicate that in the next 90 days, but.
We certainly are going to hopefully reduce our our cost of deposits by a fair amount and for sure on the time deposits. We like I said, we've got.
In the next six months about 840 million.
Time deposits that will mature at a at around a 1.5% rate and.
The current market rate, probably for replacing that stuff is.
Maybe 60 basis points or something like that if we went back into new time deposits, depending on the nature of the term of that kind of thing. So maybe the averages somewhere in that 60 basis points range. So there is some.
Presumably some significant reduction in cost over the next six months.
Helpful.
Thank you guys for taking my questions I appreciate stay well.
Thank you too.
Thank you.
As a reminder, ladies and gentlemen that star one to ask the question.
Our next question comes from a lot of John Rogers with Janney. Your line is open.
Good afternoon everybody.
Thanks, John.
Hope you guys are well.
Rex I guess, just just as far as the balance sheet goes would you expect this level of I guess higher liquidity to stick around at least for a few quarters and then maybe just as far along those lines. The securities portfolio, where do you sort of did inched up some in the quarter can you just talk about that too.
Sure I think the overall liquidity I think's going to stay pretty solid we'll probably.
Over time eat into that the funds that we have at the federal reserve.
We still got a pretty healthy balance there.
And so we've got some capacity to reduce that so so some of the some of the equity that flows out from other areas. We may just offsetted by reducing the the funds we have as the fed which are already 25 basis points.
I think the investment portfolio, we've grown it a little bit we try to be sort of selective in that part of what we grew.
In the.
Second quarter with some really short term.
Pre refunded municipals, just as a substitute for money yet said, so we didnt earn very much on those 50 basis points or something like.
That it's kind of played out there's not there's not much yield on those.
50 basis points was yield is even worse now.
And so we don't really see a ton of growth in that respect we may add a few a few things in the investment portfolio, but I doubt it is going to be.
Large amounts.
So I think we'll we'll probably see the liquidity we level. We have now maybe dropped down some but I don't think is going to drop down tremendously John I mean, I think we're still going to have.
Some level of excess liquidity, maybe than what we typically what we run within the past.
Okay, and then I guess, just along those lines sort of back to the previous question on the margin.
You will have a full quarters impact of the sub debt. So.
Wouldnt wouldn't that impact offset a good portion of the savings you would see on the CD book.
Yeah, I think it will I think it will I think I said I think is that will be about eight basis points annualize what would be what that would cost us. So yes, there will be there'll be some additional costs there that we havent had the past.
And then just reps in the second quarter the the impact in interest income from the PPP loans was at around five 600000.
Sort of ballpark.
Probably a little more than that.
I'm trying to think probably the fee income on that would have been.
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Maybe 400 400000, then yeah, let me just probably close is probably in between five to 600000.
Okay.
Okay and then.
Just.
Joe I think you talked about in your remarks about the modified loans.
Is there any update I guess as far as some of the loans coming up on their 90 days have any have any of those matured and rolled off yet or is there any sort of update there.
Oh, yes, some have let Sheridan road rolled off I think it kind of what I said John that we do expect you know the.
A substantial chunk of those will return to normal payment terms.
You know so I mean, I don't have a lot more color than that.
I don't anticipate.
Challenges there.
Okay and then.
Yes, Joe you just one final question just on.
Opportunistic M&A stuff like that as it is too early to talk about that are.
Sort of whats your.
Train of thought there.
Yes, I mean, you know you know.
The kind of buyer that we are where.
We're more of value buyer.
So.
You know, obviously, if we got into a situation where the FDIC with selling banks again, we would be interested there.
Possibly.
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And possibly if.
As you know sellers were selling under much reduced expectations, we might be we might be over there.
That were that's not really our focus our focus is to.
Acquired customers and grow our company organically.
So I guess, I guess, where I was going with that as with the with your branch I guess rationalization sort of looking at the branches. The focus is more internal I guess two to your point versus looking looking at acquisitions today is that fair.
That's fair.
Okay. Okay. Thank you everybody.
Thank you I'm showing no further questions at this time.
Well, thanks, everybody for being on the call.
Take care.
Ladies and gentlemen. This concludes today's conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.
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