Q2 2020 Hunt Companies Finance Trust Inc Earnings Call

[music].

Good morning, Thank you for joining the hunt companies financed trust second quarter 2020 earnings call.

Today's call is being recorded and will be made available via webcast on the company's website.

If you require operator assistance. Please press Star then zero.

I would now like to turn call over to Brendan Goldberg with Investor Relations at or investment management. Please go ahead.

[noise]. Thank you and good morning, everyone. Thanks for joining our call to discuss on companies financed Trust second quarter 2020 financial results with me on the call today or Jim when CEO, Mike Larson, President, Jim Briggs, CFO, and Priscilla Torres head of real estate investment strategies on Friday, we issued a press release, which provided details of our second quarter earnings results along with disciplined.

On to earnings presentation that can be found on our website. We have also filed our 10-Q at the FCC before handing the call over to Jim I'd like to remind everyone that certain statements made during the course of this call or not based on historical information and May constitute forward looking statements within the meaning of section 20 Sevena into Securities Exchange Act of 93 section 21 area. The Securities Exchange Act.

1934.

When using this conference words, such as outlook evaluate indicate believes will anticipates expects intends and other similar expressions alright that is intended to identify forward looking statements such forward looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those contained in the forward looking statements. These risks uncertainties are discussed.

And the company's reports filed with the FCC, including its reports on form 8-K, 10-Q, and 10-K and in particular the risk factor section of our form 10-K. Additionally, many of these risks or uncertainties are currently amplified by and we will continue to be amplified by or in the future maybe amplified by the co they might take that dynamic.

There's not impossible to predict or identify all such risks listeners are cautioned downs place undue reliance and these forward looking statements, which speak only as of the day here of the company undertakes no obligation to update any of these forward looking statements. Furthermore, certain non-GAAP financial measures will be discussing this conference call presentation of this information is not intended to be considered in isolation.

Or as a substitute to the financial information presented in accordance with GAAP reconciliations of these non-GAAP financial measures to the most comparable measures prepared in accordance with gap can be accessed through our finest at the FCC I'll now turn the call over to Jumpline. Please go ahead.

Thank you Brenda and good morning, everyone welcome to the on companies financed Trust earnings call for the second quarter of 2020.

We appreciate you joining us today and what continues to be very challenging environment to operate in.

First and foremost with the Gertsacov. It moved the code 90 pandemic I'd like to express my hope that you and your family's roasting safe and healthy.

As we've all experienced took over 19 pandemic continues to have a significant impact on the overall economy, our industry and how we all live and work.

We continue to take measures to protect our employees, while ensuring continued business operations with a little disruption as possible.

Our employees have been working remotely since mid March.

We have been able and we'll continue to execute on all investment management asset management servicing portfolio monitor monitoring and related functions on a daily basis.

[noise] leadership across all segments of York's organization.

Actively monitoring the situation as it continues to unfold.

Clearly the current environment is unprecedented.

We will continue to closely monitor the impact of the pandemic is having on their assets as well as its impact on the broader economy in financial markets.

Notably the recent month.

Generally seen improvement in liquidity involve hill in the volatility of credit capital markets.

However, the economic concerns associated with Coven 19 have continued to impact the breadth of the bridge lending market transparency around the reset levels of asset values as well as the general availability of financing.

Bridge lending activity has registered positive movement centered around let's transition risk and more moderate leverage versus pre covert periods.

In addition loan structures and credit evaluations are reflective of local ordinance constraints on lender production.

Our new in our new origination efforts are consistent with these things.

We will continue to be thoughtful patient opportunistic and our valuation of all theory that investment for each shifting.

Given this backdrop I'd like to provide a brief update on our portfolio our financing sources, our liquidity liquidity position in or dividends.

With regards to our portfolio over 99% of our investments consist of senior mortgage loans and participations. We currently do not own any mezz loans construction loans mortgage backed securities or loans backed by hotels.

Furthermore, multifamily assets make up the vast majority of our CLO collateral and we have limited exposure to retail and office properties.

We do not [noise].

We do not currently have any exposure to seniors housing health care or skilled nursing properties.

Additionally, I would like to highlight that as of June 30, 20, 2100% of the loans in our theory investment portfolio our current.

Furthermore, 100%.

The loans in our portfolio made their July payments.

We have not executed any forbearances to date.

Overall, we believed that our portfolio is well positioned and we continue to focus on proactive asset management of all assets potentially impacted by covert 19 in the broader economic uncertainties.

With regard for financing sources, we do not currently utilize repurchase or warehouse facility financings that it 50, and therefore are not subject to margin calls on any of our assets from leap up repo or warehouse lenders.

Our primary sources of financing or to match term non marks to market see or you feel those as well as a corporate term loan.

With regard to the corporate turn loan I would like to note that on July nine you successfully entered into an amendment to this facility. This amendment was the result of working with their lender to provide the company with additional flexibility to effectively manage any potential borrower distress.

Related to cope with 19 that were not originally contemplated in loan documentation.

Well the 19 has not had any material adverse impacts on our investment portfolio. Today. We believe this amendment is a positive proactive step which provides additional flexibility going forward if needed.

From a liquidity perspective, we and we have not experience any material adverse liquidity events today due to cope with 90.

Well, we acknowledge the significant economic uncertainty over the coming months, we believe their liquidity position is sufficient based on where we stand today.

That being said significant uncertainty exists today around the depth and length of the economic recession.

The state the obvious the extent, we experienced delinquencies and or default in the portfolio our liquidity may be impacted.

We remain focused on liquidity management over the coming months.

With respect to our dividend we paid the Q2 2020 dividend of seven and a half centsper share in July 15th.

In accordance with normal course timing and process, we have not yet made a Q3 2020 dividend declaration, we expect to make a determination or dividend in September after discussing with our board and the normal course.

With that I'd like to turn the call over to Jim Briggs, who will provide details on our financial results.

[music].

Thank you Jim good morning, everyone.

On Friday evening, we provided a supplemental investor presentation on our website, which we referencing during our remarks, the supplemental investor presentation has been uploaded to the webcast as well for your reference on pages, four or five and six of the presentation. You will find key updates and earnings summary for the quarter. We've also filed our 10-Q.

The FCC.

For the second quarter of 2020, we reported net income to common stockholders of 1.9 million or eight cents per share.

This compares to net income to common stockholders of one and a half million or six cents per share for the prior quarter net income to common stockholders of 1.4 million or six cents per share for the second quarter of 2019.

Positive variance relative to prior quarters was primarily driven by an increase in net interest income.

Current quarter was impacted by two noncore items.

The first of these was a 375000 dollar decline in fair value of our legacy mortgage servicing rights portfolio, which was driven primarily by an increase in prepayments fees associated with lower interest rates during the quarter.

On the U.P.B. basis, 13% of a residential MSR portfolio paid off during Q over Q2.

At quarter end. This legacy MSR asset was valued at 1.4 million or 2.1 multiple of servicing fees.

The other noncore item experienced this quarter was a GAAP income tax benefit of 68000 pertaining to activity at our taxable REIT subsidiary.

After adjusting for these two items our core earnings attributed to common stockholders for the quarter was 2.2 million or nine cents per share. This is in line with the prior quarter as well as the second quarter of 2019, which core earnings was 2.2 million or nine cents per share in both periods.

I'd also like to point out that Q twos income was negatively impacted by 624000 of previously capitalized ceus yellow issuance costs, which were expensed. This quarter based on our determination and we think it is unlikely that we will execute in years yellow financing during 2020 under current market conditions.

We did not a this 624000 dollar expense back as core earnings adjustment. However had we added back this nonrecurring item.

Core earnings per share for Q2 would've been 2.8 million or 11 cents per share on a recurring basis.

Mike Larsen will speak in more detail about RC yellow financing later on the call.

Our book value at June Thirtyth was 114 million or.

$4.57 per share.

This is in line with our Q1 2020 book value on both the dollars and per share basis, we'd like to know that excluding the impact of the non core nonrecurring items previously discussed our book value per share would have increased quarter over quarter to $4.61 per share.

One additional item, which we discussed last quarter, but I would like to remind everyone else is that as a small reporting company as defined by the FCC, we have not yet adopted a S. C 2016 dash 13, commonly referred to as Cecil. We're currently expected credit losses, which is a comp.

Brands of Gap Amendment, I've had a recognized credit losses on financial instruments as a smaller reporting company, we would implement Cecil on January 1st of 2023.

Told and we continue to prepare our financial statements on incurred loss model.

As of June Thirtyth, we do not consider any up or loans to be impaired onto the incurred loss model and have not recorded any impairments or allowance for loan losses in the current quarter.

While the current performance of our bridge loan portfolio remains healthy uncertainty about the in severity in duration of the economic impact of to covert 19 pandemic exists, including its impact on our borrowers and on the value of the properties to collateralize or commercial mortgage loan investments. We will continue to evaluate the loan portfolio for credit losses, and we'll record any.

Impairments or allowance as incurred.

Well now turn the call over to Michael Larsen, who will provide details on our portfolio composition and investment activity.

Thank you Jim.

As the market uncertainty related to that probably making pandemic continues to remain focused on managing our existing assets and continue to take a measured approach on new and originations.

During the quarter, we made future funding advances on 11 loans total incremental fundings of 3.4 million and all of these advances were on loans secured by multifamily assets, we did not acquire any new whole loans during the quarter.

We experienced 32.9 million of loan payoffs during the corner and on that basis, our loan portfolio decreased to 29.6 million.

Well, we continue to be talk one patient and our valuation of new investment opportunities.

We are so compelling a new opportunities in the current market.

We continue to anticipate the majority of our loan activity will be related the multifamily assets or overall loan portfolio at quarter end was over 90% multi family, which is in line with the prior quarter.

We believe this is particularly relevant to note in the current environment multifamily assets have historically reflected the greatest resiliency among different property types during downturns and despite the worrisome employment trends, we anticipate the same being true during this period.

Our total portfolio floating rate loans had an outstanding principal balance of 610 million.

Dollars at the quarter end.

The portfolio consisted of 45 loans with an average loan size of 13.5 million, which provide for significant asset diversity.

Portfolio had a weighted average spread to LIBOR of 353 basis points.

And as we have noted on prior calls we have LIBOR floor floors on a 100% of the loans in our portfolio with a weighted average about 161 basis points across the portfolio.

Therefore, 100% of our portfolio currently has a LIBOR floor above the current spot LIBOR rate.

Her at LIBOR rates persist, where they are we are able and we are able to maintain LIBOR floors above existing levels, we anticipate that a LIBOR floors.

They haven't and positive impact on our 2020 earnings.

Well I don't know it on our financing as the 630, our loan portfolio was an answer to series yellow securitizations with weighted average cost of financing of LIBOR, plus 141 basis points.

The current market uncertainty the non mark to market match term financing that these HEALOS provide gives us additional stability.

The reinvestment period in our first you know love It had been February 2020, and our second still has a reinvestment period that run through August 2021.

We experienced $28 million and loan payoffs and our first yellow during the second quarter and 10 reinvestment period on that securitization event that we began its country like paying down CLL bonds.

We paid down $9 million bonds prior to June Thirtyth, an additional 19.

After quarter end I.

I would like to know that even after the impact of these pay offs, our leverage and cost of funds within that for CLL remain very attractive at any 1.8% advance rate and LIBOR plus 142 basis points.

We have been working towards the refinancing first yellow. However, there is no requirement for us to refinance with seal and within the current market volatility timing and structure of this is uncertain.

We will continue to evaluate options as the status of the capital markets at all [noise].

With that I'll pass the call back to Jim for closing remarks.

Thanks, Mike.

In summary, we we are a us remain excited about the future for the company. We are very actively monitoring our portfolio in the state of the current environment or both both in terms of coven 19, and its impact on the capital markets.

We look forward to updating you all on our progress we appreciate your time in interest.

Again, I'd like to reiterate my hope that you all remain safe and healthy during Ah during this this.

Challenging environment challenging time that we're all experiencing and with that I'd also like to open the clubs open the call up to questions.

We will now begin the question and answer session to ask the question you made press Star then one on your telephone keypad.

If you were usually speakerphone, please pick up your handset before pressing the keys if at any time. Your question. It's been a dress and you would like to withdraw your question. Please press Star then too.

At this time, we will pause momentarily to assemble our roster.

The first question comes from Steve Delaney of JMP Securities. Please go ahead.

Good morning, everyone in first congratulations on your strong credit profile of the portfolio.

Jim Mike said that.

Well. Thank you I hope you all you guys are safe and where it was also Mike mentioned in his remarks that I think in the second quarter you had on F. On F. L. One you had 9 million of distributions I assume you're getting like what 12% to 15% share of whatever pre payments come in based on your advance rate.

But then Mike I think you said 19 million you know so far post June 30, I guess my question is you're being pretty cautious on new lending and obviously you can't win to reinvest in that structure.

At this time so what are your plans for that cash you know as you continue to see pay downs and distributions to you on F. L. One.

Well, it's Oh, I mean think do you have got Mike you want to clarify on the on the distribution yeah, Yeah, just to clarify the the window now the reinvestment period its path and that's yellow repayments are paying the bond down sequentially. So oh sequential yes on us.

So that's where the RFP.

Cash there and the result is a a you know it's like a reduction in the overall leverage of the cabin, which we you know we don't see as a problematic and as I mentioned, the advance rate and pricing is still very compelling on that on that transaction.

So my couldn't tool so good sequential right, but there is no point then does it go to pro Radeon Pro rata, so you're you're going to fully de lever before you you're going to be the last dollars out is that what I'm hearing.

If if it were to stay in place and not be called.

That's right.

Okay, and it sounds like the market, where we're seeing CMBS back open and tightening up a pretty well not at the not at the not so much particular piece, but certainly at the the upper tranches.

Basically you're just saying that market conditions, despite the performance or multifamily you're gonna bide, your timing and looking to Colin Reed and refinance that that structure.

Yeah, we're continually reviewing and and not that that we won't and and and always are looking at the best opportunity to refinance that portfolio the appropriate time.

We didn't make the determination around the capitalize fees, but that that the gaps you're right. It doesn't mean, they're going to stop evaluating opportunities to refinance that portfolio.

Right no impact on core or your or your or your dividend Oh capability there [noise].

I'm curious kind of a be stepping back because there's so much in the present it just on some orders over the weekend and there's so much talk out there about forbearance and eviction. When you look kind of on average when you look at your borrower landlords can you give us an idea of roughly.

What percent of rents they need to be pulling in monthly in order to meet their debt service I know, what's different case by case I'm, just trying to get to get an understanding of what percentage are forbearance, they could incur and still be able to pay down your pay your line.

Give me a second here if you want to take a quick look at that Charlie or Priscilla just based on the coverage.

Yeah.

But before he does.

Well, what the just the just to follow up on on what Mike said, there I think sure.

I'm the refinancing side, what was the they get that I mean, I think the in the.

Yeah with respect to where we already that the current feel though in some modest de leveraging off the top still keeps the funny I think better or better than at you know.

Where we could probably refinance today.

Okay as we've discussed in the past I think that's not going to continue forever, obviously, but but right now it's not a it's not a immediate concern, but I'll be discussing the pass our desires <unk> is to grow is to expand our financing sources.

And and you know.

Scale up the the overall size of of the.

Of the company you know we've resolved.

Any any kind of legacy matters that had existed from from prior to Hans and networks is.

Acquisition of the.

The management agreement.

And where we're basically now in.

In in growth mode, and looking for ways that we can grow a of course, that's obviously been I.

Significantly impacted by you know coal bid and and how it's impacted the the the economy in a and and particularly as you point out.

Well multifamily.

It is a very strong asset class and I believe we'll continue to be you know one of the strongest it or one of the strongest asset classes throughout.

The period no matter how long it last.

No. There are there are open questions about.

About you know how does performance.

Continue a with with respect to.

The election with respect to unemployment benefits, who pays for them and how you know the long term effects. So.

You know the tax consequences of having to do you pay for.

You know the substantial support that the federal government has appropriately in my opinion provided.

During the pandemic you know all those things around the table along with B.

The more social political environment around evictions, forbearances et cetera.

And balancing you know the right the needs of property owners, a inc. and and their capital partners like ourselves a with those of tenants, who who might be struggling and I think there's a.

It's a big equation with a lot of variables. The I think we'll long term.

Work out you know in fine fashion, but it is.

It is something that.

You know.

We look at and we think about growing the growing the company today, which we absolutely wants to do in and what were working on or or how do we you know best provide.

Capital to who our partners, but but are doing so in a way that protects the investors as a company and you know as we.

No wrestle with the strategy you know our intentions are kind of think about okay, well, we feel pretty good about.

Positioning the company to do X and Y. So how much can we and should we realistically put out if capital were yeah Korean flowing.

What would be one wants to happen or coffers, and that's kind of the analysis data that we're going through now.

Got it Oh in terms of rent collection, yes.

I don't know Charlie or episode of you might I I would think it somewhere around 80.

80 something percent, but.

[music].

Sure so well get back so I am I going to ski season, well through the nature of art you actually see they are switched loans, which moved their interest in.

And a number of case that you know you will be you will have situations, where some units are obviously out opinc, Serbia, and that's where we saw no sites from transactions right. The collection on it so it's perhaps not as a percent that they've all got performance.

Right all the assets well I wrote down here in a number of T cells, we proactively structure either adapt service.

Sure and or future funding amounts that are held back precisely for the purpose all potential shortfalls, so that should eat into situations, where yeah. There may be just.

And issue with respect to but that show called actually [laughter] damn It continues down the line.

Thank you for so that's helpful. Appreciate everyone's comments and all the best going forward.

[laughter].

Thank you function.

The next question comes from Christopher Nolan of Latin Bert Paul. Please go ahead.

Hi, guys can you hear me.

Yes, Hi, Chris are you a good just following up on the last question is it fair to say that you expect your hats volume's, you're earning asset volumes declined in the second half the year.

I would say.

That is that is more likely not yeah that'd be.

Just just from just from de levering.

Got you know probably himself and you know given where libraries right now it looks like funding costs are likely to be stable. So really the vet. The variables in your earnings is more likely to be acid volumes and whatever yields you're getting on those some investments which.

Goes into that wouldnt be non accruals and all the other stuff is that fair way to look at.

In the short term, meaning in the time period, yet as you described I think that's right.

Okay, and then I guess in the second half from my question would be or.

You see in New York State for the rent wrecked poor ret regulations for regular <unk> rent stabilized properties. The state has taken a very progressive talk to really.

Locks down the ability for landlords to increase rents year over year to the point, where a lot of landlords are unable to <unk>.

Economically.

Make ends meet.

Oh are you seeing that another markets.

[noise], where you're getting new yes, I mean, well I think there's there's there are pressure in in some of the Western States, Oregon for example, Washington around.

San Francisco in Northern California, maybe the whole state there there are lot a number of proposals in some cases legislation that's been out there around.

Rent control generally.

I do think it to it is an issue I actually think New York is.

It is.

Not Ben it has been reasonably balanced given the size of the city and the affordable crisis that exists there that we don't do a lot of lending in New York, but there's not a blanket.

Rent control like there like there have been proposed in other places I I think if they are.

I think it's a worthy topic I think there's room to provide affordable housing support without.

Without you know deteriorating significantly the you know the entrepreneurial.

Real estate owner and operator.

But there does need I do think that that without.

Without some compromise in working together.

They come up with solutions in some of these high cost markets you run the risk of.

Have you know pendulum swinging going from you know being very expensive and there's no affordable housing too.

There being no investment or lesser investment because of government.

Regulation I think there's there's got to be some balance is definitely a risk is definitely something that.

We.

Our focus on.

In states.

And municipalities, where there's been.

Recent legislation for example in Oregon as I mentioned.

We are very I'm cautious about looking at deals there until we have a better understanding of what it might mean for the long term. So it is impacting how we act it's not it's not.

No we're not drawing a line in thing we won't do business in places, but we are.

Looking at things with a with a different lens.

To understand how it might impact our business activity, there and out of the owner.

So I hope, there's I hope, there's a more willing caught a more willing.

A willingness on the part of you know government regulators property owners.

I'm in the constituents who.

Who are important to both of those.

Folks in coming together come up with what is what can be a more reasonable.

Or a reasonable compromise into how we deal with.

What is a very real affordability crisis.

Yeah. There is there an affordability crisis. The problem is and I can tell you as somebody who used to run multifamily over 200, well multifamily units in New York City rent stabilized. Your biggest challenge is actually going to be municipal costs water costs property taxes, <unk> those increased double digits needs Blue states and when they.

Lots and labor ability to grow yeah, and when you grow and the lock down the ability to grow your revenues you know you're only outlet is lower funding costs. You know refund is so low mortgage or as low as it can go and at the end of the day. The broke starts running out on this business model and.

You know.

I guess for you guys said, the you're probably looking at for a similar less sand you know if that's the trends it looks like you know your investment portfolio should just continue to run off.

Yeah, I look I I probably have.

I'll I'll I'll reserve some a more optimism that there is there's a solution, but I agree with you that.

To the extent that that particularly in these big high cost markets now and we don't do a lot of New York City lending Oh I'm in July because it's it's it's really dominated by.

Bank lenders in particular, but.

But that being said there are many high cost markets out there in and you should be environment come to the point, where where are your costs continue to rise across all of those.

Categories that we just mentioned, but your revenue is is not able to grow in line with that then it is the only place that that it can impact is it or that can it get resolved as you point is financing.

Which would either required additional subsidy.

From someone federal government state government or.

Or lower investment in in the properties in the form of you know the actual value of the properties or the the capital dollars that are invested a during ownership that that's obviously not a long term.

Positive for solving any affordability crisis right if anything it might make it works out though.

Yep, Okay. That's it for me Thank you guys.

Again, if you have a question. Please press Star then one.

The next question comes from result of Overcast. Please go ahead.

Good morning, everyone.

Michael mentioned new opportunities in Q3 could you expand on that a little bit.

Sure Mike you want to go ahead and take that.

Yeah. So it. So we are as you may be aware a as manager has a very large production platform and and are looking everyday and talking to a borrowers about about their financing needs both stabilize Dan.

Bridge transitional financing that is the focus of H.T.S.T. and despite a the current coping 19, a market, we're very active blending and doing a lot of transactions across our platform platform and and.

Hi, working with our borrowers.

Disgusting new opportunities, particularly in the bridge space. We there there are still a b C. C. A lot of properties that are performing.

And and the particularly those with I'm limited there, we see more with limited transition I'm limited construction or or lower construction or or rehab activity needs that we think are a good candidates for bridge, we still feel very confident in their performance in their ability to convert to a permanent.

Financing.

At the likely with Fannie Mae Freddie Mac, who are our or continue to be very active and and had very strong volumes through through the crisis.

[noise]. So we're still seen those opportunities leverage is as Jim mentioned earlier in his remarks, I'll leverages, a little bit lower and I'm scratching older higher than pre kogan environment. Because is I think what you would expect.

But but we're out there every day in and still seeing opportunities.

So for you know free <unk> do you want go ahead.

Well I was going to you know one thing back that we have seen is property owners are inherently optimistic creatures a meeting.

You know leverage is gonna be higher values go up rents go up that kinda that kind of mentality as a as a stereotype or.

So it wouldn't be investors right, they're investing thinking things are going to get better. So as we've seen lower leverage and in some of the traditional markets, whether it be CMBS, Fannie Freddie et cetera, and already low environments with life companies and.

And and banks and no like.

We do to Mikes point, we do see some borrowers turning toward the alternative financing like bridge financing or maybe some other.

Structured or Mezz pref structure that is at a lower leverage point than what you would consider normal historically.

ER, but higher than maybe where where things would would price out or pencil out on a permanent loan today and so you you have an opportunity to to lend out of there I know it had an attractive basis and attractive yield.

At a at a level that.

What I'll call it a in a.

Traditional are normal environment is a bit lower from a leverage standpoint so.

You know a and those borrowers were really looking to kind of wait out the this economic cycle and.

Really related to the pandemic, then then the traditional cycle, but kind of wait out the storm and then go get their seven or 10 year financing or longer down the road a year or two.

So that is that is something that I think is.

[laughter] isn't opportunity in the in the traditional market and then obviously the the various structured.

Private structured transactions that could.

That could result in.

You know accretive accretive investment to earnings.

Okay. Thank you window, just looking at Q3, new loan production.

Any idea what that is going to come in and now do we have any.

Okay.

Well, what I would say for the for for H.C.. If he you know as Mike pointed out you know we are a.

You know much larger [laughter] overall or if real estate capital you know, we did about 10 billion of transactions last year.

So so we're continuing to see activity Reshift TV activity is really a matter of what our capital is so you know as we as we have investable capital with loans pay off in CLL to where we end up with excess cash beyond liquidity point that we think is his approach.

<unk>.

Then we will fill those those investments so I expect this doesn't mean.

Relatively full throughout the year, there will be some timing aspects to you know low paying off in the world closing.

But the actual origination volume is really going to be dependent upon.

What happens absent any capital raise or capital infusion. It would it's really dependent on on pay offs.

Okay and [noise].

This concludes our question and answer session I would like to turn the conference back over to Jim Glyn for any closing remarks.

Okay.

Thank you. Thank you all for joining US today, you look forward to speaking to you next quarter.

We do hope that everyone do you mean safe and hopefully next quarter or we will be a away.

Across across the globe toward a resolution of this health crisis, I'd be well unsafe and.

We'll talk next quarter. Thanks.

The conference has now concluded. Thank you for 10 today's presentation you may now disconnect.

[noise].