Q2 2020 First Bancorp Earnings Call
Next we'll be in listen only mode should you need assistance. Please secondly comfort specialist.
The start than zero under telephone keypad. After today's presentation, there will be an opportunity to watch question.
Actually question you make press star one on your telephone keypad.
For all your question. Please press Star then too.
Please note this event is being recorded.
I would now let's turn the conference over to John Pelling Best Relations in capital Planning Officer. Please go ahead.
[music]. Thank you Andrew good morning, everyone and thank you for joining first Bancorp's conference call My cast to discuss companies that will result in the second quarter 20 to 22.
Joining me today first Bancorp are really Waldman, President Chief Executive Officer.
No bird.
That could have vice president and Chief Financial Officer.
Before we begin todays call is my responsibility to inform yes. This call may involve certain forward looking statements such as projections of revenue.
The capital structures all statements in the plans objectives of the company's business. The company's actual results could differ materially from the forward looking statements paid due to important factors described and the company by the SEC filings.
The company assumes no obligation to update any forward looking statements made during the call.
If anyone does not already have a copy of the webcast presentation. A press release you can access diameter website. One first bank dotcom at this time I'd like to turn the call over to our CEO at all really.
Thank you John and good morning, everyone.
This time it before going into the details of the border I would like to these calls.
Well, we can see a more aggressive matter at hand.
Early this morning on their separate press release, we disclosed unexciting be something else.
Yesterday, we did receive regulatory approval for moving ahead with all our deep down cycle with something there.
Yeah, we're very pleased overall, but do you mean this stuff we do expect to meet all closing conditions on close the deal by September 1st.
As we shared before this is a thought formational upside jump or company.
And well be many moving parts things on I'm living October we actually expect that they'd be sold in the metric.
Meaning D.V. the Louis you only be as agreed on their bags, we being in line with those that we report they don't Delaware I compare door Standalone Brody actually [laughter]. Please give me minded dealix groups. You know just the remembered some of the metrics that we shared appointing time than it excludes mph [laughter] if the premium.
These calculated based on the size what their balance sheet the closing.
In addition, it do what we disclosed on their D. I remain in October.
We expect that something there were the only went blog on additional up 28, mainly on on low loan loss reserves.
Look out for loans that are subject to call. It will take the moratorium [laughter] <unk>. We also have to both see their data over the past few water. We have in core expenses associated with the downside show up about $50 million already we shopping have impacted our bottom line and then you would be bodily already.
It also obviously that wouldn't be those the remaining going forward.
And I think it's important that we'll do that given the timing.
The most of the savings or the transaction on the synergies will give you plenty of 21.
Yeah, we do expect to complete the full integration by the end of the second quarter plenty plenty one.
I think it's important than it.
You mentioned that you don't have disclosure well we did close it does have you in October we did not mention the D.D.A., but they started strikes and should have the potential benefit to our D.A. you. We can expand that later in the Q on it.
And I I just want to common you know obviously, we're being operating under this new public environment and we have learned a great deal from an operational standpoint.
We moved through live pandemic and now you know I say larger institution with greater scale.
We will definitely look forward to identify legacy energies on additional opportunities for growth in this consolidation.
We greatly appreciate the and welcome both the employees and expanded client base and we'll work hard to continue enhancing our broader several other channels to meet or exceed that they show. So we're very pleased.
During this step.
Please let's now move to slide five of the presentations or we can cover.
I love to the quarter.
Definitely the the landscape has changed yeah, I would call deal brain landscape will the industry.
From probably operational standpoint, I must say that we were being extremely proud of our team under dedicated frontline employees.
And also do gloried customers for their ability to adapt in these challenging will break the landscape.
[laughter], probably the number one it's been the safe deal more employees on customers, while we provided services.
Okay, that's what do they still more than 80% of the support staff, it's working remotely and indeed, indeed facilities, we continued to execute Threeq safety brought the goals, including contract they bracing and prevent the they they testing of called it.
It seems that being able to up on that make you we remain committed to maximize the benefit of the Gary.
The to support our customers. This does conclude that deferrals include a that brought up so just BBB and we also being involved in some other some other brought him. So just the FHLB of New York Grant.
And they use the eight two board to roll community.
We understand that you know obviously those are keep key benefits due to mitigate the challenging times that old customers are art art, we all expediency.
It's really good experience that they are we on the trend, though we continue to feel to you does channels. They go due to onetime they've got somebody expedias and that's more wide on all like technology don't have definitely facilitated got somebody gradual remotely unless you can see in that right.
It Sidled this slight.
Definitely it but I was actually up just the shifted from Rembrandt. Just do you know what are they are not the of the but China is and we're very pleased to see those trends finally, taking place you know where market [noise].
These lets move now to slide six to talk a little bit all of the quarter.
Hey.
Before that I 20, reopening trends are important when we talk about the water. The drivers are you know what's happening with after after the closure what's happening with a reopening it early indicators actually look good.
But we continue to drive this metrics within our customer base across different industries.
The information included here for things to.
Our customer base, we are dragging only by weekly basis Howard to different sectors are moving.
Obviously, you know we also conscious of the potentially but of additional dike dinning, Dorothy reopening to the reopening airport due to the spikes in cases recently.
We have to say the hospitality sector halt of restaurants, he's definitely the most impacted so far and the recovery will depend on the on the reopening in speed.
You know as an example, you know we're looking into really a d., we deal merchant and want to fill up the we'd be with which we didn't significant increase during the last week of June compared to last week of March. So you know obviously retalix open.
He is to the public on and spend it it's been it's been fairly significantly up.
It obviously the second quarter results for all were hampered by by the Love Dom remembered that import total equal we were not able doreen they all along for mortgages.
About the May.
And basically helpful. The quarter show, you know limit that already nature like TV deal in the consumer side.
Sean do you need the big while being drawn.
It is worth mentioning that Roger did remain open to floating the market and we continue or you need be normal levels of mortgage is actually better than normal.
Okay, and I don't know, but obviously quarterly originations in consumer dream about all on the residential portfolio as you can see in the graph you know show you know obviously the bubble pulls the positive impact what fuel.
The the Mona volumes on the only other not broken out another increase customer liquidity materially it when we look at Grove, we experience on outstanding one book to Bill increasing core deposits 30.5 person and they said close government the boss its.
Yeah, I think it's important to keep in mind that you know the estimated stimulus for corporate vertical market is about 14 billion so far.
And this is barry might be the Oh separate dental DDB.
Create did you know this this significant liquidity in the market [noise].
This should definitely helped offset some of the rest on our breadth and over the next couple of quarters.
We compare these two liquidity that we experienced during during the last the last year at Kings and you know driven by by this will board and stimulus provided them.
So please move to slide seven for a moment.
Yeah, Orlando, we will expand on this detail, but the quarter ended up with 21 million net income or nine cents per share.
Aspect that you know we experienced some deterioration when they go let me forecast that require I know you can always or bill.
This quarter was 29, mainly on.
Which impacted our bottom line.
Pretax pre provision revenue continued strong 67 million considering the rate environment on the but to the NIM.
It definitely have to say you know, we do have a fortress balance sheet extremely when complete the life total risk based capital ratio of over 25%.
Now the reserve to loans, you said 3.5, 55 person, which both of these are among the highest over the industry or the sector.
I wouldn't be ABS continued to move down now below 2.2% of losses.
Again, we remain committed to servicing our clients on their days you know Neil operational challenge of globally, we're committed to the safety over employees on the customers as a priority.
And obviously, while we face you know, we still face uncertainty regarding the future part of the economy.
Our fortress balance sheet and battled tested management being will allow us to navigate this pandemic it truly and so would that I'm going to leave you with Orlando to go over to deliver the quarter I'll be available for Dick you on a.
Good morning, everyone.
I would tell you mentioned.
We posted a net income of 21.3 million for the quarter or nine cents, a chair that compares to 2.3 million.
One Sonic chair and then the first quarter of 2020.
This quarter, we had what what we do find in our press release on fuel special items in both income and expense components are there were tied to the pandemic tied to the Santander advance our churn we even have had an insurance.
Recovery in the water.
That resulted in net income.
And I will I will touch up on those on the next few slides, but if we work where to adjust the balance you put this items on a non-GAAP basis, our net income for the quarter would've been 22 million or 10 cents, a chair, which compares to a net loss of five point Ninemillion adjusted net loss of 5.9 million in the first.
Quarter, which was three cents a chair.
As we had anticipated net interest income declined in the second quarter 235.
Million.
Lower by 3.4 million from first quarter.
And obviously the net interest income was impacted by the significant reduction in interest rates and reduced level of or loan originations that we sold there too on the pandemic Anna under loved on US already explained we we were not originating for or have the quarter about the quarter.
Also we did have a large increase into politics, which has translated into increased levels of catch on money market, which is.
This interest rate scenario, this interest rates and I would significantly lower yields.
Interest income by itself in the quarter declined 3.3 million in cash and investment securities.
No not Asian on three point Threemillion in loan.
Even though we did have an increase the on the average balances related to the PBP loans, but those are lower yielding loans.
On the other hen, although the average balances of interest bearing deposits grew almost 400 million for the quarter interest expense declined 3.2 million.
Well.
Basically, reflecting the 22 basis points reduction in the average cost of interest bearing liabilities.
Right now the overall cost of deposits, it's about 61 basis points.
Which reflects a reduction in rates and increasing the boss is down from our 77 basis points.
In the first quarter.
The margin for the quarter was for 22 compared to 463 last quarter.
And to break it down component.
The impact includes about four basis points reduction related to a BBB loans.
But seven basis points reduction for the repricing of the cash balances.
And another 11 basis points.
The higher proportion of cash balance to interest, earning assets, obviously, we change the mix of the earning assets.
Downward repricing of loans of commercial loans and credit cards.
Around nine basis points.
And we did have some impact about four basis points or accelerated premium amortization.
Which resulted from the from the prepayments of the investment Securities.
As you remember we had sold some securities last quarter.
The anticipation of that and prepayments were even higher than we had a ceiling.
The other component was around four basis point decrease on a related to late piece us.
As we had a higher proportion of the portfolio on under payment deferral programs.
Non interest income for the quarter was 20.9 million compared to 30 million, but also though these two quarters had some some special items in the first quarter remember, we realize an 8.2 million gain on the sales of approximately 275 million of available for sale Securities.
This quarter, we had a 5 million benefited from the final settlement of the business interruption insurance claims that we had related to hurricane.
Earmark somebody up back in 2017.
Excluding these items non interest income guilty glider about 6 million during the quarter.
3 million this increase relates to do the seasonal contingent insurance Commission that we received in the first quarter. It happens.
The first quarter of every year.
Also saw decreases in service charges on department and transactional fee income all primarily related to to the lower volume of transactions.
Resulting from the reduced leases activity. So we sold the call would impact on dialogue, though.
On the expense side.
Balances decreased 2.4 million for the quarter.
From 92.2 million to 89.8 million.
These these expenses very good also saw some of these special items I mentioned.
There are 2.9 million in merger related expenses, what gold merger related expenses, all associated with all the legal and integration airports associated with the Santander transaction.
Last quarter, we had about 800000 of those.
We also had this quarter, our 3 million in call, we'd related expenses and what I mean call we'd related expenses.
Include so.
Items, such as cleaning costs.
And play testing productive material, we have put into branches or provided to our employees.
These on security has been.
We don't the branches to control traffic.
Both forward on car topic.
Some especially compensation, we did provide about 1.7 million in special compensations too to our customer facing employees and support employees that were therefore.
For the whole process.
As wed like to expenses that we had encouraging in customer communications to keep them a breadth of what we're doing we're doing under different branches and on the programs.
Also remember that in first quarter, we did have out at 100 million recovery insurance recovery begins expenses.
If we were to exclude these items the expenses decreased 8.2 million.
Basically reduction is 38 associated with lower business volumes.
Well at the expense control measures that we have implemented so far weve.
Basically double all hiring of vacant positions.
We have modified business promotion strategies and review some of them.
We have eliminated traveling we've reassessed project plans.
I mean, we've gone through all the different components.
Resulted in sold this reductions there.
More more.
But basically explain in more detail on the press release, but you can see some of the component.
But there is a lot as.
Well part of it it was which is.
Volume related.
So expensive.
As volumes normalize some of these expenses will grow up obviously.
On expense level.
The expense levels, the estimated for 4.4, where it's a little bit more challenging but up slots human data.
Excluding any any color would related expenses on Santander expenses.
We should be in that 80 to 90 million range.
In the next quarters without any transaction.
Cost and integration costs, which would be part of the other expenses.
We'll see.
In terms of reserves.
The provision for the quarter was 39 million.
Which sold any comments will be sold that in a 29 million increasing the allowance for credit losses.
Total allowance for credit losses.
We under and 37 million now as of June Thirtyth of which.
390 million relates to loans.
We look at.
The adoption of Cecil allowance for credit losses on loans have grown or $164 million from a home run 55 million. We had in December two or 319 million we have no.
And the allowance represent.
Three point, 55% of loans, excluding the BBB loans.
Which is over two times, the one point, 72% of loans, we had as of December.
We believe this is the allowance bright very ample coverage against multiple law lots of.
And.
Obviously politicians us well for what is the expectation on the economy.
Like you mentioned that in addition to the 319 million allowance on the alone. We do have about 7 million valuation allowance related to unfunded commitments on some of the lending facilities that we have.
Moving onto some of the other components.
Moratoriums unimportant.
Component, we had mentioned during the first quarter. This caution we have implemented payment moratoriums programs to support customers. During this the initial stages of this pandemic.
At the end of June as of June 30, we had 36% of the portfolio on their moratoriums a lot of them more moratoriums extended for three months' timeframe.
And during July many of this borrowers have started to make their scheduled payments under moratorium lots of the 24th of July I've been reduced to two approximately 18% of the portfolios and that includes reductions on on all the components as you can see in the chart.
It's important to mention that the governor Puerto Rico has passed legislation requiring banks to extend moratorium through the end of August two residential mortgage borrowers that sold desire.
Borrowers had to be Karen to qualify so.
And then that would keep moratoriums on the on the residential for a little bit longer timeframe.
We have continued to work with borrowers that have been performing detailed reviews of all commercial portfolio.
Virtual borrowers in the different industries.
Clearly the hospitality industry, it's still late in the Argus challenge, but some of the other industries have started to to normalize.
Charge off levels for the quarter were lower obviously as we.
Some.
The apparel programs migrations tend to go down that its borrower what you you will see on the nonperforming.
Side.
Inflows to nonperforming werent $10 million in the quarter.
Which is 20 million lowered the last quarter.
A big part related to these deferrals, but the other customers kept making their payments oral nonperforming decreased by 14 million.
To 303 millions of June thirtyth compared to three to 317 million as of March 31.
We continue to monitor their portfolios continue to to spend time understanding customers behaviors.
Well you mentioned on a number of customers.
Already open and operating so we feel the.
Very good try to continue to to execute.
With that I would like to open the call for questions.
We will now begin the question and answer session. You ask your question you May Press Star then one on your telephone keypad. If you are using these speakerphone. Please pick up your handset before processing the keys.
Any time your question has been the drop and you would like to withdraw your question. Please press Star then two.
At this time, we'll pause momentarily to assemble our roster.
First question comes from Ebrahim Poonawala of Bank of America. Please go ahead.
Good morning, guys. This is Chris harder on on for Ebrahim, Congrats on getting regulatory approval.
Thank you to know.
Are there any performing loans that you are planning to acquire initially but are no longer.
Wondering given the Crovitz stress.
On the.
[music].
The agreement you in from the Santander transaction the agreement calls for.
Acquiring all loans that are performing at closing at closing if there is any nonperforming loan.
That meets all the definition of nonperforming has to be classified as such and content on their we'll keep.
So if any loan has been effect that to reach that point to be consider nonperforming that has to be classified as such and will not be part of the transaction.
If it's.
Just related to some payment deferrals that I've been given in the market under normal terms and all of that not necessarily eat it's a function of all of that payment capacity of the customer.
But but the answer is anything anything that migrated to NPL. Since October two closing is not part of it on schedule.
Got it that's helpful and just a quick follow up I. Appreciate your prepared remarks, but if you could just give us an update on the pro forma capital outlook just in terms of the tangible book value dilution that you expect in where you expect to TC Tc ratio to win it'd be great. Thanks, guys.
You mean on when the transaction.
Yes, yes.
The the ratios as you know.
We had anticipated the ratios that you are one rachel's to be about 15% on the transaction that those numbers still hold.
If you look at the other balance sheet.
LNG that we are a bit larger.
Mostly because of the large increase in deposits on is all catch a lot of cash and investment securities sovereign risk weighting of that it's zero war or.
Or or 20% depending on the component.
Santander balance sheet, that's that's remained fairly consistent.
Pro to what we had before.
No I anticipate a slightly lower leverage only because of the higher average balances that we have on that cash, but not not other than that steel.
All the ratios being well well above well capitalized.
The leverage ratio. So we'll be we had anticipated around 11% originally you, maybe a slightly lower but still above 10% at closing.
So it's.
It's fairly consistent with what we had this close.
Before.
Including tangible book value dilution, the similar to what we had disclosed before.
We havent seen anything genius obviously.
All based on as compared to our stand alone there has been from some reviews of our Standalone estimates.
But this transaction will continue to us we had expected.
Thanks for taking my questions.
Next question comes from Alex Twerdahl of Piper Sandler. Please go ahead.
Hey, good morning, guys.
Hello, Good morning.
So just want to.
Elaborate or I guess digging a little bit more to that last comment about the tangible book value dilution be consistent with the announcement, sorry, I think if I recall at the announcement is around 7%.
Tangible book value dilution from the transaction and then another somewhere between one and a half in 2% dilution from the seasonal impact of the acquired loans.
Would would it be fair and then you also kind of alluded to DTA.
I think youll expand a little bit more on that upon me asking but as you kind of put all that together.
And then look at tangible book value at $639. An 83 cents is the right way to think about pro forma tangible book value just kinda knocking somewhere between eight and 9% often that we would have upon the the announcement or is there something else, we should be factoring in as well.
We believe it's going to be more in the 7% to 7.5% combined with diesel.
Based on on.
The change some of the changes on the balance sheet and all the other components.
We've seen but we're not you know, it's a bit gets a bit lower comp considering diesel, but not not to different.
And similar earn back to what we had before.
The DTA component that you made reference to we.
Did not include that in any of the analysis.
And that's something that are clearly Santander adds to our bottom line some revenue streams.
That would allow us to utilize the ace will will work exactly on on the exact amount. We haven't finished the the full analysis of the amount, but clearly it's going to ride.
Some to the bottom line.
I don't think it's going to realize the whole DTA valuation allowance that we have what will allow us to realize part of it.
And that's going to help I also in.
Compensate important for any dilution.
And can you remind us what the what that valuation allowance was at the end of 630 the total one.
Well agent allowance tuck in itself on the bank, it's about 40.
Brian from the top of my head I'll give you exact number I think it's 47 million.
Alex.
Just on the bank remember that their evaluation there, it's a valuation allowance on the holding company that its.
It's a bit different because of the.
Really minimal.
Legal entity taxing component of the Puerto Rico both.
50 million with devaluation allowance on on the bank.
As of June Thirtyth, Alex.
50, so some portion of the 50 million will likely come back and when the deal closes or I guess subsequent to the closing.
Yes.
Okay and then just.
Last question for me is just as I think about the margin going forward and if you if you back out the PPP.
Impact of four basis points to four basis points that accelerated prepayments.
Amortization.
And then it gets four basis points from the lower lower late fees is that kind of the rate starting point for the margin going into the third quarter and then as you kind of look out and.
And the opportunities you have on deposit.
Pricing pressures on loans like how should we be.
Thinking about the NIM trajectory over the next couple of quarters.
Well the BBB will be there for the my our estimation is that there will be there for the next couple of quarters.
Or a large part of it.
Because we will we feel that.
Large large chunk of the loans will will stay for the six months' timeframe.
So in this quarter next quarter will I think that that impact will still be there.
The.
To be honest I was the I was expecting prepayments it was a bit higher so that's a little bit although difficult to estimate on the on the investment side.
In terms of repricing of loans.
No. It's a function of though of the curve. We the the estimation of the curves are disappointed so it's more stability a little bit going down not a lot. So I would say that it all depends on the curve. So it might not up by too much going forward. The the one the one thing we've seen its deposits grow.
And it.
The things that reimbursement, it's based on the same on low market. So the.
Due to some extent the ability of the market to reopen and be able to go back to originations.
Like I would tell you mentioned that rents are better in July and June July and some of the consumer portfolios.
Think about.
No I wanted to have one to one I have investment.
I will turn out there and in the market as compared to seven or 8% on a on a consumer loan.
Makes makes a big difference so.
Assuming normal brands, we deposits continued to be healthy.
So that makes changes.
I don't know, we shouldn't we shouldn't be going now to be honest, but.
But that that our mix of assets.
Good good change side, a little bit.
You're right the late fees.
You know it so it's something that it it's a function to some extent of moratoriums.
If you're going to go down completely.
The impact I don't know, but part of it should go down.
As well us.
Assuming that the prepayment at this point on investments should be lower so that should be a smaller impact going forward that what we had in the quarter.
Okay, and then just as a as a follow up when you layer on the Santander balance sheet. Initially it was supposed to be NIM dilutive, but given what's happened to the NIM already do you expect NIM dilution or is it going to be relatively neutral to the margin.
They found on their balance sheet should be a bit NIM diluted they still have a significant amount of all securities in the portfolio.
Even though the transaction anything catchments action. So some of it it's going to be gone, but that opex.
Income also.
So it should still be a bit diluted dilutive.
You know us as.
As we had anticipated before.
Only because of the mix.
Thank you for taking my questions just to clarify the yields on their loans are very similar to our yields.
They are there they have more consumer and commercial and.
And mortgages there they don't have as much in consumer.
So you probably have seen on their balance sheet, so that by itself, it's a lower deal.
There are cost of funds, it's it's good.
So that data that helps so but but they do have large amounts of touch on investment securities there.
Thanks for taking my questions. Thanks, Alex.
Again, if you have a question. Please press Star then one.
Next question comes from Glenn.
KBW. Please go ahead.
Hi, good morning.
Part of glass warning letter.
Congratulations on getting your approvals for the deal I'm sure you know given the current environment that it was no small feat to get it done.
But.
Just to dive into the NIM, just just a little bit farther on on yields on the commercial book.
Given the fed move in and how fast they move could you provide some kind of a percentage that you think commercial loans a variable portion our pricing in.
Where current rates are.
Given moves in in one month, and three month LIBOR and prime.
So we did provide some information on the on the release I.
Let me give you exact so I'd I'd on misquote.
How about 70% of our portfolio of let me give exact numbers for you.
When you have information and you don't find it.
Yeah, let me.
The commercial portfolios are.
Our two thirds of the commercial portfolios are either.
Based on prime or based on LIBOR, most online worried so it's about a third on prime and the other two two thirds of Latin.
66% other portfolio, it's up it's a it's a lot LIBOR base, we do have floors on many loans.
So some some of the portfolio of one software from future changes on rate.
Because of the floors are there.
But there's still some that don't have floors any rates were where to go down.
Especially the three month.
LIBOR it would affect a bit.
At this point in the expectation is that Brian will be sort of at this level for a little bit uptime and and the changes to the three month LIBOR.
We're not expecting to be large so I don't expect that to be significant impact obviously.
If things get worse on we move too.
The old subject of negative rates.
That could have some some impact on some of this loans that don't have floors.
But it but again, our two thirds of the portfolio eight so it's floating.
And it will move with either one of these items.
Okay. Thank you and maybe given given the addition of Santander can you discuss or just remind us of some of the opportunities that you have on the funding side of the balance sheet.
After the deal closes.
Okay.
Well I mean, the at this point the funding meaning.
We have changed a lot funding components, we know us of deposits have grown we have been able to eliminate.
A lot of the wholesale funding, it's significantly down broker Cds are significantly down we we still use you some broker Cds in our Florida market, which has a different funding profile at this point. It's a it's a asked remain on expensive deposit market. So we tend to use Puerto Rico funding or wholesale funding to too.
On that market.
At Santander will just you know add to that I see I believe at the end, it's a function of what makes sense in terms of portfolios and being able to to make correctly. They they don't don't have wholesale funding.
Yes.
Almost nothing what they had on the balance sheet. The last time, I I look that up and and obviously, we will keep all those deposits. So it's not going to change.
We don't want to take away their deposits or not.
End of deposits our normal market deposits. So we want to keep all those customers. So that's the only going I'll add to that that our deposit mix that we have to help on the the assets. So.
The Santander party, it's not going to change much what we have been doing so far within our own balance sheet is there's been a lot to do that diversity.
Of our customers.
Okay. Thank you.
And I'm on the payment deferrals and just kind of last question you know the slide shows a 36% dropped from 36% of the portfolio down to 18% here here in July and you had mentioned.
Some of that the government mandates with respect to.
Resi mortgages, but still that shows a pretty big.
Drop in in what's what's on deferral could you talk about customer behavior and maybe some of the people that are on deferral that are still paying kind of how they're responding to it.
Behavior has been really really good.
These these decrease I mentioned.
Significantly has been on customers that have already started payment their payment patterns on on a in July.
The overall payment patterns, we've been tracking that weekly to compared to prior to two the bundling pandemic implications and it's been really really consistent with that so so far it's been really good I think that it said keep in mind that.
Deposits into market have grown significantly we.
Just ourselves we grew 1.2 billion in deposits at a leading gorman.
That means our liquidity also so that helps in that component there are customers.
We've had a number of customers that originally we were anticipating that would need a on the commercial side extensions from the three month from the three month, maybe up to six months.
And many of them I'll come back I'd say, no. We don't we don't mean anymore extension.
I think it's still the challenge is going to be with the hospitality industry and we have to continue to work with those.
And some some retail side.
It would be affected.
What happens with the log down and whether we have to.
Revert back to some of it could change a bit but I thought now.
Trends the payment rents have been really good.
During the month of July so makes us comfortable with what's what's going on with with its customers.
Okay. Thanks for taking my questions.
Thanks.
This concludes our question and answer session and the first Bancorp conference call. Thank you for attending today's presentation.
I think we are somewhere in there I mean, oh, okay. So I'll put in that.
Bob.
Question from Alex Twerdahl copper sample.
Yeah.
All right. Thanks, I wanted to sneak one more and here buzzer in our with with respect to sort of pro forma capital you know do want to put that sort of the or super or that car too far ahead of the horse here.
A deal not even close yet, but with a pro forma tangible book value at 910 ish.
That's trading at 65% of tangible book value and 15 ish percent common equity tier one how should we be thinking about the timeframe for additional capital return with respect to things like buybacks once.
The deal actually is closed.
I think I like we know that is quite you'll have the they learn answered three months ago blood with a pandemic I think.
It's not really prudent do we need to rethink the company the plan differently, if things goes well on and the but let me get resolved on that it globally is I suspect that in the most recent trends you know obviously something should happen next year regarding next capital capital actions.
But I think it's going to be driven by how we see the pandemic, how we see the additional provisions if any or not.
It's the most prudent thing to do obviously it is there hopefully you know that will be the next step it up the economy continues to prove that that's our main goal.
I need to move ahead complete this one and then be able to tumult over next couple of election.
Perfect. Thanks for taking my follow up.
Thank you thanks out.
And this concludes the question and answer session Firstbank Conference call. Thank you for attending today's presentation you may now disconnect.
[laughter].
[music].