Q4 2020 American River Bankshares Earnings Call
[music].
Welcome to the fourth quarter 2020 earnings Conference call. My name is Darrel and I'll be your operator for today's call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session. During the question and answer session. If you have a question. Please press Star then one on your Touchtone phone.
Please note that this conference is being recorded and will now turn the call over to David Ritchie, David You may begin.
Thank you good afternoon, everyone nice to be with you and this is Dave Ritchie President and CEO of American River Bankshares, the parent company of the American River Bank headquartered in Rancho Cordova, California. This is our fourth quarter 2020 update you should be aware that our earnings release, which details of our quarterly and year end results.
Went out at market opening today last week, we also announced our quarterly cash dividend payment for the next months.
We did include some economic data and the press release and general positive trends continue and our markets with the state reopening and the vaccinations being distributed.
So now I'd like to talk a little bit about the company.
I just want to tell you how proud I am of this company and the people that work here.
And it was a tough year and American River Bank generated.
Really strong results for the full year, despite the low interest rate environment, the pandemics and the shelter and place orders.
We will continue and to make progress and we do continue to make progress living and the state of disruption with the.
A bit for a bit longer the flexibility remains paramount.
We did a terrific job with the loan deferrals, we were and early adopter of the program and we truly helped our borrowers and their time of need the.
The PPP campaign was very successful or 470 loans were made for around $80 million again, our focus was on our clients and the communities we serve.
We are participating in round two of the program.
We are taking applications of the volume has been much less than it was last year again, focusing on taking care of our clients.
We continue to provide support as clients apply for forgiveness, providing them with the information necessarily to help them maximize the opportunity for forgiveness.
Our credit quality.
And has held up really well on.
Im optimistic about the credit quality going into the year, our deferrals, which we did a lot of in the beginning the deferrals for the most part of expired and the clients are back paying as agreed.
Core loan growth.
Pretty good given the distraction of distractions of last year, a six 6%.
On the third and fourth quarters loan productions were positive and returning back to similar levels and prior years I would like to make the comment on that.
The organization has 100 and or so employees.
Last year, we did we booked 851 loans.
And if you think about debt that's a hell of a lot of the loans. We did 27, new C&I loans 50 real estate loans 474 of PPP loans, and we did 200 of our auto portfolio of loans plus we did 98.
Extension so.
Amazing accomplishment I think for this organization.
On the deposit side again growing deposits.
Not that we are pretty familiar with that and I thought it was interesting we opened over 1000, new accounts last year and since opening in those accounts the deposits and those particular accounts have grown by $37 million. So another great effort.
Speaks to our client service.
You know I think we're well reserved capital and liquidity is very strong.
And we believe we did a terrific job of 2020 and are very proud of the efforts of the team we took care of clients and we deliver to our shareholders.
We believe we are well positioned heading into 2021.
Now of that I will turn the call over to Mitch Derenzo to give you an index a review of our financial results.
Thank you, Dave and of course, the thanks to all of you for taking the time to listen to the let's call. This afternoon.
Before we get started Mike.
Everyone of our Safe Harbor disclosures.
Certain matters discussed in this presentation may constitute forward looking statements for the purposes of the federal Securities laws and May involve risks and uncertainties.
Actual results may differ materially from the results and these forward looking statements.
Factors that might cause such a difference are discussed and the companies in the report on form 10-K for the year ended December 31, 2019, and and our subsequent filings on form 10-Q and form 8-K.
The company does not undertake any obligation to publicly update or revise any of these forward looking statements, which would include information or future events, except as required by law.
The links to the here and we reported on our form 10-K are located on our website American River Bank Dot com.
Over the past conference calls I'm going to highlight some of the key areas from our press release, the Dave mentioned that went out. This morning also going to try to provide some additional details and analysis and then we'll open up the lines for questions.
I was wondering American River Bank reported net income of $2 $1 million from the fourth quarter of 2020, that's up from one of the 5 million for the fourth quarter 2019, that's of 40% increase.
Earnings per share was <unk> 36 and the.
The fourth quarter of 2020 compared to 26% from the fourth quarter of 2019, that's of 39% increase.
The RNA and ROE for the quarter 96 basis points and $9 12 of $9, one 2% respectively.
That's up from 82 basis points and 722% respectively.
Joe.
On a year to day basis, and net income for 2020 was $7 $1 million. That's the Buck 20 of share that compares to $5 5 million or 94 cents per share in 2019.
On a pretax pre provision basis.
Net income in 2020 was $11 $1 million as the increase of $3 million or about 38% over the $8 1 million reported for 2019.
Despite the significant rate drops as the result of the influenza the actions this year, our margin held up fairly well for the full year 2020 of the yield on loans was four 8% that compares to <unk> 95, and 2019 overall.
Overall, our cost of deposits decreased from 35 basis points and 2019.
Just 18 basis points and 2020.
And the resulting net interest margin was $3 52 and 2020 of.
Slightly down from $3 six and 2019.
And of course, the loan yields were somewhat impacted by the paycheck protection program loans those loans had a yield of 386% from 2020.
Okay.
The good move deeper into the PPP loans through the snack section that I call pandemic response section.
The three areas and will cover in this pandemic response section of our PPP loans, our loan deferrals and our exposure to the industry segments, most impacted by the pandemic.
On the PPP loans last quarter, we reported debt as of September 30, we had.
473 of pp loans totaling $75 8 million.
On the on accreted fees and costs were $1 6 million.
We do the open up the forgiveness portal and the fourth quarter and it looks like some pretty quite of bit of success as Dave mentioned.
As of December 31, we were down to 352 loans remaining totaling $55 5 million.
And the untreated fees and costs were $1 1 million.
Included in the remaining balance of 21 loans totaling about $145000 of that were economic injury disaster loans.
On those loans the loans are forgiven, but the SBA held back of the idea of grants and as we know now those will be forgiven because of the new the recent stimulus program.
Of the remaining 352 loans.
273 of those were about 78% of.
And that should have balance is less than $150000 and those will have access to the streamline forgiveness process. So we're anticipating those will.
On a go out the door pretty quickly.
For the quarter and year to date, we recognized fees of 521000.
And $1 $3 million, respectively on the PPP loans of <unk>.
Yes.
The interest on those PPP loans of $170000 during the quarter.
502000 and for the year 2020.
Dave mentioned, the new program, the new PPP program and last week, we did open the portal again began processing non applications.
And we have already been approved and.
Some of those loans of and documentation.
Again as Dave mentioned.
The the initial rush wasn't quite as significant as the program implemented and the second quarter of last year.
On the deferrals.
And we initially reported June 30 that we had 100 deferrals over 100 for us totally about $96 $5 million that was about a quarter of our loans outstanding.
Yeah.
At the end of September we had debt reduced to $35 million or $38 3 million and I also indicated that a lot of those loans.
We'd come up for payments that the deferred.
And would expire and the fourth quarter.
And I am very pleased to announce of these borrowers did begin making the payments.
In the fourth quarter with the exception of two one was the $25000 commercial loan.
The charge that off another one was the $3 $6 million CRE loan.
Sure.
On the borrower requested the mood of the deferral that deferral was the deferred it to mid January.
And I'm happy to announce the debt borrowed to make their payment this week.
So as of December 31, we had two deferrals one of them was the $3 $6 million loan and I just talked about and the other one was the $1 $3 million CRA CRE loan.
That's a six month interest only plan and and I'm happy to pronounce the two.
Without the those.
Our current to the temporary returns are making the interest payments.
I think we're doing the very well on them.
And on the deferrals and I'm excited about that.
Lastly, our exposure to the industries most impacted by the pandemic.
I'm going to report these the outstanding balances with the percentages of our loans to non PPP loans.
So churches at the end of December were $22 million or five 3% of our Africa and the loans that actually was an increase of $4 million during the quarter most of the construction loans and.
The substantially funded draws.
The draws on those restaurants, $5 8 million or one four or one 4%.
The elder care, that's six 5 million of one 5%.
School Slash childcare $5 2 million of one 2%.
Our recreation, which golf sports clubs $1 8 million, we're just <unk>, 4%.
The oil and gas was $8 6 million or 2%.
They are considered of oil and gas, but again these loads of the gas stations and related businesses such as oil change facilities.
And maybe it's the Gastar gas station with the.
Carwash or convenience store.
This section also increased during the quarter by $2 $4 million, we did make two loans to one borrower.
One loan is one of those loans are secured by a gas station and the others to carwash.
Also this quarter on adding a new sector hospitality previously reported we had zero balances and those in that sector. We did add during this quarter and SBA 504.
Two of value level chain hotel the bow.
<unk> was $1 8 million or 4% of our outstanding loans.
Once the SBA debenture sold our balance will reduce by 50% and will still remain and first position there.
The uncertainty of the overall impact of Covid on our borrowers the deferrals length of the shelter and place the vaccination and distribute distribution et cetera, et cetera does still worn and increase in our loan loss allowance.
For the year, we did add $1 billion and half that's up from 660000 and 2019.
For the fourth quarter. The provisions were just $35000. Despite the increase and the non PPP loans during the quarter.
And we did benefit from a decrease and the construction sector from about $30 5 million at the end of September down the $18 $4 million of that $12 million decrease.
Because of those construction loans historically carry a higher greater risk of loss.
We were able to reduce our reserves in that sector that reduction then allowed us to add for the growth and the portfolio.
Still only happy to add the total net of up to $35000.
Of the allowance to.
On the trip length to loans, excluding the PPP 156 at December 30, <unk> 2020, that's up from 129% at December 30 <unk>.
December 31 2019.
On a side note you may be aware that California did relaxing of shelter in place of order earlier this week on.
And our government released the remaining regions of the state from the order that had been in place since early December.
The region and I've been right now of the Sacramento region had been released as of January 12, but now the entire student has been released.
This would put.
Put us back on the color coded program that had been in place prior to this.
And order in December.
And really all reports and as the virus.
It continues to spread just to the slower pace and our state.
And basically with this.
The reopening allows us to do as some businesses can reopen for exempt the restaurants can reopen the outdoor dining, but the indoor done and just yet and and the nail and hair Salon.
And endorse some definitely some positive.
Happenings in our marketplace.
As I reported just a few minutes ago, we're not they'll have a lot of business and the sectors, but it's great for our overall economy.
On to the balance sheet.
Start with the loans net loans outstanding excluding the PPP loans increased $20 million during the fourth quarter, let's just under a 5% increase for the quarter.
Our year to date net loans, excluding the PPP loans increased 25%.
Dollars 1 million of over 6% increase.
Fourth quarter on new loans, we did put on $47 million of new loans that compares to $33 $2 million and the third quarter of 2020.
And just over $40 million and the fourth quarter of 2019, So with Dave said on our last couple of quarters have got us back on track to where we were and so you've got two.
2019, after a couple of down quarter side of the first part of 2020. It was due to the slowdown from the pandemic.
Year to date loan fundings in 2020.
$104 million. So you can see again most of that was and the last two quarters.
That compares to 2019 total fundings of just under $150 million.
Of total unused commitments at the end of the end of the year were 30.
Just on the $33 million.
About 20 of 20 million of that was commercial lines. So the have the ability to evolve, but the rest of that $33 million is real estate related and should fund over the next year or so.
Pay offs boosted dropped to a normal normal run rate and the fourth quarter, there were $8 5 million.
Compared to $15 $5 million from the third quarter of 2020.
Those payoffs do add the prepayment penalties, we collect the $120000 and prepayment fees and the fourth quarter that compares to 74000 and the fourth quarter of <unk>.
And last year.
On a year to date basis, we click and 466 prepayment penalties.
Compared to $231000 and all of 2019.
Dave mentioned credit as well I think if you look in pretty well.
We didn't have any non accrual loans or any loans past due 30 days at December 31, 2020.
Earlier I did mentioned the additions to the allowance of the millions of half we did have $23000 of net charge offs and the.
Fourth quarter of this year again that was the.
The loan I mentioned earlier on the <unk>.
Deferred.
Last year, we had $4000 from recoveries and sort of comparison there. So for the entire year, we had just $30000 of net charge offs compared to $86000 and recoveries in 2019.
So looking back over 2020.
And I'm pleased that it was just the load numbers such as $30000.
Classified equity is still strong at two 6%.
We have one.
One Oreo property about $800000 and the two loans to commercial loans, both of those totaling $1 $2 million from.
Again relatively low classified assets.
And that Oreo.
We did update guidance updated appraisal during the quarter rip that looked at being down by $46000 per went from 846 $800000.
Nonperforming assets, that's really just the Oreo.
And so nonperforming assets total assets and just nine basis points at December 31, 2020.
The low growth and I mentioned here.
The primary and real estate.
And was $25 million or $7.
$25 million and real estate area of seven 6% growth.
Commercial loans were down $5 4 million again that excludes PPP, if you add and the PPP the were down quite.
Quite a bit more of that.
Consumer was up 644000, and that's our specialty auto portfolio.
We did 42, new loans in that sector. The average was about $61000. Just for comparison, we did 51 of those and the third quarter of 2020 and the average of those was $117000.
The growth of the real estate was primarily and CRE, which increased $26 $2 million. Some of that was the construction loans rolling into permanent debt I mentioned earlier.
Let's see the average rate on the new loans of new 40, $41 million of still holding up pretty well where average was 440%.
We also renewed and little over $10 million and the quarter those average $4 98%.
Clearly the saying that you did did grow quite a bit during the quarter as we put some cash to work.
But really it's well structured cash flow and mortgage products.
Mixed in there with a few high credit quality Muni bonds.
Portfolio remains still remains relatively short the average lives of the entire portfolio is just in the 4%.
And the effective duration of the entire portfolio is still low at two three years and then our exposure to reach up 300 is just nine 3%.
Sure.
And the liabilities deposits.
If the deposits as we all know.
But we did continue to grow in the fourth quarter, we added $15 $3 $53 million increase and the year over year.
$139 $4 million debt.
43% year over year increase.
Our noninterest bearing deposits at the 12, 31, and 2020 were $44 four per cent of the entire deposit portfolio.
And our cost of dropping as well the <unk>.
Average cost of funds decreased from 29 basis points from the third quarter of 2020 to 23 basis points from the fourth quarter and comparing that to the fourth quarter of 2019, they're down from 60 basis points.
And if you factor and the overall cost of deposits goes on to decrease during that same timeframe.
For the third quarter of 2020, they were 14 basis points that dropped to 11 basis points and the fourth quarter of 2020.
Comparing that to the fourth quarter of 2019, where they were at 33 basis points from quite a bit of of drop there.
And if you plot the Cds and the average cost of our deposits from the fourth quarter, which the 16 basis points and Thats down from 15 basis points from the fourth quarter of 2019.
Yes.
Capital levels remain strong the <unk>.
Capital balance itself actually increase from just under $83 million a year ago to just over $93 million at December 31, 2020.
That $10 $2 million increase and of course came from the net income of 71, we had.
And $4 $4 million increase and our other comprehensive income.
Net debt that we paid of $1 7 million and dividends.
And then we had $400000 increased primarily to the equity compensation.
Our tangible book value per share was 12 93 at the end of the year and the book value was $15 60 $50 68.
And if you tried to calculate these amounts on your own way of come up with something slightly different.
The total shares and the table.
Correct them out the actual shares outstanding at December 31 was $5 million 937, 529, we've kept it again 5 million 937, and 529 and it wasn't the number reported and the press release that was actually the 12 31 balance totaled 12 2019 balance of just didn't get growth towards so I apologize for that and other.
You have the right number now.
The capital ratios leverage ratio of eight three cap total risk base of 62.
Those actually.
Dropped a little bit of actually the leverage ratio dropped a little bit from last year. We were at 92 and Thats really the the increase and the balance sheet decrease debt leverage ratio.
Some brief comments on the income statement.
Non interest income really not much here, we were down about 160000 year over year lower.
Lower fees from <unk>.
Service charges and gains on sales were down as well.
Of course, the lower service charges and they get reported this in the past.
Returned checks were down with the <unk>.
Higher average balance and our client checking accounts, there's been just a lot lower level of checks, causing overdrawn balance is that's a good thing.
Noninterest expense increased.
$13000 for the fourth quarter 2019, and the fourth quarter of 2020 really the big area. There is the FDIC debt increased from zero and the fourth quarter last year, the 69000 and the fourth quarter of this shift and Thats really relates to the FDIC small bank.
Assessment credits that we received in 2019.
Let's see the.
The year to date numbers.
$46000 I'm sorry, the other item the changed quarter to quarter was the Oreo expense that actually decreased.
And Thats really the write down so this year, we had the write down of $46000 on the Oreo properties.
And fourth quarter of 2019, we had $110000 write down there. So that's the big Delta.
Different appraisals.
On a year to day basis noninterest expense actually a decrease of $132000.
The.
And primarily driver being the salary and benefit line items.
And thats the deferral of the direct loan costs, we've been talking about this year from the last weeks of the last three quarters.
Salaries and benefits are down $114000.
And with the salary piece actually just the core salaries and thats up $18000 a year over year.
Less than 1% so minimal there the true true changes the loan origination costs, which were up $314000 and those relate to the PPP loans and those are actually the reduction.
Of our expense.
So that reduction of 340 314 is actually offset somewhat by the $18000 increase in salaries and I just mentioned.
Higher costs to our vacation accrual $71000 there.
People, just arent, taking vacation and when they can't go anywhere and then some higher equity cost of about $73000 and higher incentive accruals, which were up $92000.
FDIC expense again up year over year.
We received credits in the last two quarters of 2019, and the very minimal credit and the first quarter of 2020.
For the increase there.
The decrease in non interest expense year over year is also due to an increase the decrease in other expenses of $149000 from 2019% and 2020 given that area includes a lot of things the the other crudes of lot.
The advertising insurance directors' fees.
The telephone et cetera, but the big category that we've been talking about the changing year over year as the advertising and business development that decreased.
It was $600000 last year tough start of 2019 dropped to $244000.
The dropped by $244000 down the $336000 and 2020.
And thats the shelter in place of reducing the number of business development opportunities and our sponsorships et cetera.
Partially offsetting that decrease as we implement that new Internet banking system and talked about earlier. This year. So there is additional cost there that went up 57, I'm sorry that went from $90000 and then the.
Pointing out that our director of fees did go up this year.
$57000, that's related to that nonrecurring amounts.
One of the directors of the past the way we do.
The full accrual expense on the future.
Payment stream that was about $70000.
And lastly taxes.
Of course, those did go up.
You have a higher level of taxable income youre going to of a higher level of taxes.
On.
We also the.
The benefit from the equity comp.
With the benefit this year was the benefit last year.
39 $34000 of benefit in 2019.
2020, we had $39000 of expense taxable expense related to the equity comp so.
Net net are the effective tax rate did increase from 25, six in 2019 to $26 six and 2020.
Thank you and no Daryl I'd ask you to open up the lines for questions.
And if anyone has a question you can press Star then one on your Touchtone phone. Once again, we have a question Star then one on your Touchtone phone and our first question comes from Nick Nick could really go ahead Nick.
Good day, gentlemen, hope you're doing well.
And next to Nick Thanks.
So I wanted to start on the strong loan growth this quarter first where the new credits coming from newer existing customers and then secondly can you give us some color on the competitive dynamics and your market.
To your first question, both I mean, we had some.
The new stuff and then we had some.
Additional loans to existing clients, so that answers that.
And.
Yeah, I think I think it's competitive out there and I think it's very competitive.
And especially as you look at.
Yeah, well I think the way I look at it.
And we're looking at it real hard and stuff, that's especially coming up and maturing or if you have your prepays are running down to a percent or so.
And we're attacking noticed and because we want to stay in front of the clients and.
And hopefully if they would like to stay with us and we'd like them to stay with us we're going to renew them, but I think it's it's.
Just to announce the of being uncompetitive I think of spot just because of competitive has always been on in the Sacramento market and despite all the negative out there I think there's still a pretty good market for certain.
The types of months.
And really to add on to that we've definitely benefited from the pandemic.
<unk>.
Sure.
The bank.
We have theres more people come and the Sacramento.
And if you can work from home, while live and the Bay area and paid to the three times as much replace the lift so the real estate market and here is real estate market. The residential real estate market is pretty strong.
That's great and then given the strong close to 2020, I mean, you've got some good momentum headed into this year.
Certainly of fluid environment, but what type of loan growth are you targeting and 2021.
Yes.
The last year or so we've been talking about double digits.
It's got to be less of that this year.
We're we've got a decent pipeline.
The third Theres a lot of.
On the pressure.
Did you on it yes, I think there is a decent pipeline, but I think the real challenges.
As you pass on as I was saying maturities and things like that.
We had $45 million and loan payoffs last year I mean, if you are unable to.
Keep them probably at lower rates as we all would agree if youre unable to keep them, it's going to make it very difficult to show.
The positive growth, so I think Keith.
It's a little tough to tell you exactly but I agree with niche you've been on a pretty heavy growth plan here for the last three years and <unk>.
And the double digits.
I would probably be happy to.
The south of 10% range somewhere in that six to eight range of probably making sure of it yes.
Yes, Nick as you would expect I know what Youre trying to do you are trying to figure out what the the.
The loan interest income is going to be it's top of I think there is going to just more pressure on the the rate, we're getting and as opposed to the growth even if we are successful and growing.
The 8%, they're going to be at lower rates.
There's a lot of we talked about competition, there's a lot of cash still in the system here.
We're getting less and less and Ah.
And on our investment portfolio so.
And the banks would rather drop debt rate to go down and the three and a half I did report for the quarter and we still have some pretty good yields.
Our budgeting processes for 2021 of the those yields without going and getting four 5% on our loans.
Yes that helps and.
And I appreciate the additional disclosure on PPP, Mitch if I heard you correctly, you gave the impact and the quarter and the year to date for 2020 do you have the NIM impact of PPP and the third and fourth quarters I'm, just trying to ascertain how much of the sequential rise was related to PPP.
Nick I don't I don't I didn't calculate the out what it did is that calculated on the average the.
The average, earning the yield on those were $3 six for the year I Didnt calculate the.
And pull those out this year.
From this time.
No problem, just if you had it at the end and then.
Lastly, some typical seasonality and the expense base and the first quarter can you just help us think about a run rate and how youre viewing the expense base longer term.
You said the fourth the first quarter GAAP.
During the fourth quarter.
We are perfectly good of you have some seasonality and that the first quarter with some seasonal increases and so forth.
And I'm, just trying to kind of and.
Brian.
We have salary increases and the first quarter.
Yes.
And it is a shorter and shorter and shorter months and days. So the interest income Scott as far as the eye.
On the anticipate.
And any new hires in the and.
And the first quarters of the salary lines should be fairly consistent.
And the comparative to the fourth quarter, the fourth quarter, we tend to true up the incentives as we.
Have a better idea of what the income is going to be for the year because the staff's zinc.
Net income and instead.
Incentives based on income so.
And I.
I don't see too many changes and the first quarter compared to the fourth quarter.
Thanks for taking my questions.
Sure.
And once again, if you have a question of Star then one on your Touchtone phone and our next question comes from Tim Coffey and go ahead Tim.
Great. Thank you afternoon gentlemen.
Hi, Ken.
Hey, guys. So you guys did a great job growth.
Non interest bearing deposits. This year I mean for a variety of reasons doses are up significantly and the ratio of the switched a lot better.
And now.
And what's your expectation that youll be able to hold on to those.
Okay.
<unk>.
Pretty optimistic.
I spent a lot of time with the head of retail banking.
The challenging her.
Ill go.
And <unk>, where do these come from how long and they are going to be here.
Because like you I think that some of those are going to run out but I also thought of the PPP loans would come and go the deposits that went in from the PPP loans would go out as well.
It was taxes involved while people pay their taxes on the deposits still grew we grew $15 million and the fourth quarter. So I'm optimistic that these things will stay there or is there some pent up demand of businesses haven't been investing and and their future. So there will be some some decrease there but we're still.
Picked up on the 1000 and Bosnia accounts of the summer underwrite those arent necessarily I can tell you and and semi timber and related to PPP, but.
Yes.
It's the suddenly of talked about for since I've been here since this I caught the concierge service and and we take great care of the clients we get referrals.
I can answer.
And even in December I mean on deposits from $15 million and one month and.
I've made a comment earlier in my comments about the.
For the year.
And accounting and.
The initial deposits were somewhere in the $20 million range and they are up 37 million and I don't think Thats and I think that's pretty pretty good for us and I.
Think we've been challenge and this deposits thing for three or four months.
And we don't we haven't come up with any reason to feel like they're all going on out the door.
Alright.
And I predict that go with another 23% growth yes.
And we're not we're not running around some of the color and glass from here.
We feel pretty good.
We brought in the.
Pretty good relationship on the ticket sales cycle.
Yes.
And there are after the financial crisis that we have there was the patency of dropdown and liquidity that built throughout that period and there really wasn't so I think it's possible you could stick around as well and so what does that mean for your margin and then I mean, it seems like you might be having a bit more liquidity on balance sheet.
Well, if you look at our year and balance sheet River.
And my opinion way too much of our investment portfolio.
Thick and very low yields.
And really our challenge is going to be to continue to put that out and loans.
And with $55 million of PPP loans and the.
At the end of the year those are going to be forgiven.
And we kind of think of those will come back over the next six months, but we also have another PPP loan program going on here, which both Dave and I mentioned, we don't think it will be strong as debt but.
But those those loans, despite the 1% yield on them with the feeds and the quickness of forgiveness those those can create some.
Net.
Positive bumps two or two on them.
Okay, Yes.
Again, it's how quickly can we get that cash moved into.
The.
And I really out of security because we did I think we did a pretty good job of moving it into securities by the in the quarter and the fourth quarter I think the portfolio grew by over $40 million on the quarter, but again the yields we're getting on those are and thats. So exciting and we're not we're not going to take risk with gone out of 15 20 years to to go out on the curve there we still.
We still believe that.
Our bread and butter as the loan portfolios and we want to keep debt available to fund the loans.
Okay.
Those of my questions. Thank you very much.
Thanks, Tim.
And we have no more questions at this time I'd like to turn the call over to David Ritchie to close the call.
Thank you very much everyone for listening we appreciate your support and we'll be talking to you and the next quarter. Thank you the last quarter.
And thanks again.
And thank you ladies and gentlemen. This concludes today's conference. Thank you for participating you may now disconnect.
Okay.
And.
Sure.
Okay.
Yes.
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Yes.
And then.
[music].