Q1 2021 Peoples Bancorp Inc Earnings Call
Good morning, and welcome to peoples Bancorp Incorporated's Conference call. My name is Chuck and I'll be your conference facilitator today's call will cover a discussion of the results of operations for the quarterly period ended March 31, 2021. Please be advised that all lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there will be a question and answer period. If you would like to ask a question. During this time simply press Star then one on your telephone keypad and questions will be taken and the order they are received.
If he would like to withdraw your question. Please press Star then two this call is also being recorded if you object to the recording please disconnect at this time.
Please be advised that the commentary on this call will contain projections and other forward looking statements regarding peoples' future financial performance or future events. These statements are based on management's current expectations.
The statements on this call, which are not historical fact are forward looking statements and involve a number of risks and uncertainties detailed on peoples Securities and Exchange Commission filings.
These include but not are limited to the completion and integration of planned acquisitions, including the pending merger with Premier financial Bancorp incorporated and the acquisition of Northstar leasing company and any future acquisitions, which may which may be unsuccessful or may be difficult time consuming costly than expected and the risk of.
Expansion into new markets.
Peoples ability to obtain regulatory approvals other proposed merger with Premier financial Bancorp incorporated or Premier on.
On the proposed terms and schedule and the adoption of the merger agreement by the shareholders of peoples and Premier financial Bancorp incorporated the ever changing effects of the COVID-19, pandemic on economic and market conditions and on our customers Counterparties employees and third party service providers as well as the effects of various <unk>.
Sponsors of governmental and non governmental authorities to the COVID-19, pandemic as well as the availability and effectiveness of vaccines.
Changes in the interest rate involvement and vault environment due to the economic conditions related to the COVID-19, pandemic and or other factors and or the fiscal and monetary policy measures undertaken and the implementation of related economic stimulus packages, which may adversely impact interest rates the interest.
Eight yield curve interest margin loan demand and interest rate sensitivity.
The success impact and timing and implementation.
Implementation of peoples business strategies, and peoples ability to manage and strategic initiatives, including the expansion of commercial and consumer lending activities and in light of the continuing impact of COVID-19, pandemic on customer's operations and financial conditions, the competitive nature of the financial services industry.
Impact of assumptions estimates and inputs use with their models, which may vary materially from actual outcomes, including connection with a current expectation credit loss model or C. E. C. L model.
The discontinuation of the London Interbank offered rate.
L I D O R and other reference rates, which May result in increased expenses and litigation and adversely impact the effectiveness of hedging strategies.
And uncertainty regarding the nature timing cost and effect of federal and state banking insurance and tax legislative or regulatory changes or actions and changes in accounting standards policy estimates and procedures.
Management believes are forward looking statements made during this call are based on reasonable assumptions within the bounds of their knowledge of peoples business and operations. However, it is possible actual results may differ materially from these forward looking statements.
Peoples disclaims any responsibility to update these forward looking statements. After this call except as may be required by applicable legal requirements peoples first quarter 2021 earnings release was issued this morning and is available at peoples Bancorp Dot Com under Investor Relations a reconciliation of the non generally accepted accounting principles.
<unk> or GAAP financial measures discussed and the call to the most directly comparable GAAP financial measures is included at the end of the earnings release.
This call will include about a 25 minutes of prepared commentary followed by a question and answer session, which I will facilitate.
An archived webcast of this call will be available on peoples Bancorp Dot com and the Investor Relations section for one year.
Speakers on today's call will be Chuck and Zillow risky President and Chief Executive Officer, and MS. Katie Bailey, Chief Financial Officer, and Treasurer, and each will be available for follow on questions.
Mr. Zorinsky you may begin your conference. Thank you. Thank.
Thank you Chuck Good morning, Im glad you are able to join us for a discussion of our first quarter results earlier. This morning, We released our earnings six day.
Yeah. Its version of our earnings release included inaccuracies and certain reported amounts and we issued an updated earnings release at 935, a M with corrected and mountains. Please note. The corrected version of our earnings release included $15 5 million of net income.
I would like to start with our recent announcement, which is the two acquisitions. We plan to complete this year first we have already closed the Northstar leasing acquisition at the beginning of this month, we have welcomed their team and are very optimistic and excited about the future.
And as of April one most all leasing had assets of approximately $86 million.
We are excited about the opportunities to offer new leasing products and the lift we anticipate seeing in future periods of on net interest income and margin from this high yielding business.
We also announced a planned merger with Premier financial Bancorp, which is subject to the satisfaction of customary closing conditions, including regulatory and shareholder approvals. We anticipate this merger will be will be completed late in the third quarter of 2021.
The attractive market areas associated with Premier which includes access along the I 79 corridor complements on carbon footprint citizens deposits, a bank subsidiary a premier as locations and northern Kentucky, just outside of Cincinnati, which will increase our presence and that metro edge.
Area overall Premier has locations in West, Virginia, Kentucky, Virginia, Maryland, and Washington, D. C and had approximately $1 9 billion and assets as of December 31, 'twenty 'twenty, we believe our wide array of products and services coupled with the increased cash.
Capacity will benefit the customers and Premier we look forward to partnering with their associates to deliver a high quality customer service.
We are pleased with our recent acquisition activity. We have also continued to focus on our core business looking to our financial results for the quarter. This morning, we reported diluted earnings per share of 79 cents compared to a $1 five for the fourth quarter and a loss of four cents for the first quarter of 'twenty two.
One thing.
As we haven't had as we have had historically our quarterly expenses for the first quarter of each year includes additional cost related to employee contributions to associates health care savings accounts and stock based compensation expense for certain employees high and payroll taxes.
And annual Merit increases for the first quarter of 2021, the health savings contribution and stock based compensation expense and higher payroll taxes totaled $1 9 million and negatively impacted diluted EPS by <unk> <unk>.
During the quarter, we also recognized certain non core costs, which included acquisition related and Covid related expenses that totaled $1 9 million and 292000, respectively. These costs negatively impacted diluted EPS by <unk> <unk> and <unk>.
Respectively.
We made a $500000 contribution to our charitable foundation, which will reduce diluted EPS by two cents.
We also recognized annual performance based insurance commissions, which totaled $2 million and added <unk> <unk> to diluted EPS on.
Our first quarter results included and additionally lease of $4 7 million.
Our provision for credit losses, which was similar to the fourth quarter, but at a lower rate the economic forecast provided by Moody's, which will utilize our CSO model continued to improve we anticipate that we will have continued volatility and our provision for credit losses during 2021.
As the economic forecast for movies and adjust as we emerge from the pandemic and restrictions are lifted for the.
The quarter on a reported basis, we did not generate positive operating leverage on an adjusted basis, which excludes non core expenses. We did have positive operating leverage compared to the prior year quarter.
We continue to participate in the SBA Paycheck protection program and currently have approvals from the SBA on approximately $150 million and loans, we have been receiving forgiveness of the loans. We originated last year and at the end of March we had remaining balances of 228.
And on those loans.
Moving on to our loan modification at the end of March all Covid related loan modification stood at $13 million of this amount and $12 million, representing commercial modifications, while consumer modifications were $1 million.
We did have one large hotel operator subsequent to March 31st request additional payment relief beyond the original three months, we provided we improved it and additional three months of interest only payments, which would take our aggregate loan modifications totaled approximately $31 million.
A highlight for the quarter was our improved credit quality.
Delinquency rates are stable on nonperforming assets declined and our criticized loans dropped from you and Joe.
And the pandemic, we have closely monitored on credit quality, which includes loan delinquencies and I've seen this stable delinquency rate and our portfolio at the end of the quarter on current portion of our loan balances with 99%, which was consistent with prior quarters and nonperforming assets improved considerably during the quarter.
And they decreased 9% or $2 7 million from Europe, and the decline them. Both on 90, plus days past due and accruing loans and non accrual loans were attributed to a number of smaller relationships.
Compared to year, and our criticized loans decreased by 10% or 12 million and most of the reduction was due to payoffs and upgrades are a handful of credit at the same time, our classified loans increased by $3 6 million net of payoffs, which was due to the downgrade of a $6 8 million.
Dollar relationship and was partially offset by upgrades of several small relationship.
Our quarterly annualized net charge off rate was 13 basis points, which continues to be well below our historic net charge off rate of 20 to 30 basis points and.
For our loan portfolio on loan balances grew nearly $7 million from year end, which includes declines and PPP balances of $17 million excluding.
Excluding PPP loan balances on loan portfolio grew 3% annualized compared to year and.
We had strong loan production and a healthy pipeline, which was offset by low line utilization that is being driven by the unusually high amount of customer liquidity.
A decline and line of credit utilization contributed to a nearly $30 million decrease and outstanding line of credit balances compared to year, and we had some shift in our mix of commercial real estate and construction loan balances compared to year and at some of our construction loans converted to permanent financing.
And they were completed during the quarter, causing fluctuations between these categories of our portfolio.
And at the same time, our commercial and industrial balances. If you exclude PPP loans grew 5% annualized on.
Consumer indirect loans continue to grow and increased 13% annualized compared to year end.
We have been pleased that during the last year the pandemic. Despite our branches being appointment only for extended periods of time, we have been able to grow our total households by 3% compared to March 2020 I.
I will now turn the call over to Katy for additional details around our financial performance.
Thank you Chuck our net interest income grew for per se and compared to the linked quarter and 3% over the prior year quarter actions that we took and the fourth quarter to reduce the impact of premium amortization on our investment.
The securities income and a positive impact for the quarter.
Our net interest margin improved by 13 basis points and for the linked quarter and was largely due to P. P. P loans.
We were able to keep our margin excluding P. P pic income stable compared to the linked quarter.
During the quarter, we recognized $4 $7 million and income related to deferred fees and card on the P. P. P loans, which was an increase of nearly $1 million over the linked quarter.
We're in a quarter. The P. P. P income added 28 basis points to net interest margin. We also reported $383000 of net accretion income related to prior acquisitions during the quarter, which added four basis points to net interest margin compared to $207000 or two basis points for the linked.
Order.
Compared to the linked quarter net interest margin was reduced by five day reduced by five basis points due to inflated cash balances.
This excess cash was held on the balance sheet during the quarter and preparation for the purchase of the leasing company, which was an all cash deal.
As a result, we anticipate a reduction and cash balances during the second quarter.
Our net interest margin declined 25 basis points compared to the first quarter of 2020.
This was largely due to the sharp decline and interest rates and the result of the pandemic, which began impacting our yield late in the first quarter of last year.
Looking forward, we believe the high yielding leases, we purchased with the North Star leasing acquisition will benefit our and interest net interest margin and future period.
These leases have an average gross yield of around 18%, which is much higher than the result of the rest of our loan portfolio and we expect to grow both our leasing and premium finance business says in 2020 one.
Our efficiency ratio was impacted during the quarter by annual recurring cost Chuck mentioned earlier.
As a result, our adjusted efficiency ratio, which excludes non core expenses was higher compared to the linked quarter and prior year quarter, but improved compared to the first quarter of last year as we were able to grow our revenues beyond our increase in expenses over that period.
Our fee based income, which is noninterest income excluding gains and losses was flat compared to the linked quarter.
We had considerable growth and insurance income, which was bolstered by the annual performance based insurance commissions.
This increase helped to offset the reduction in mortgage banking and commercial loan swap fee income along with our continued decline and deposit account service charges, which have been heavily impacted during the pandemic.
Compared to the first quarter of 2020, our fee based income experienced growth provided by insurance Trust and investment and electronic banking income.
Annual performance based insurance commissions, we received this year were 50% higher than what we received during the first quarter of 2020.
We also had higher trust and investment income due to the recovery of market values of assets managed compared to at the end of March last year, along with new accounts opened and that added to the increased fee income.
Fee based income comprised 33% of total revenue for the quarter compared to 34% for the linked quarter and 31% for the prior year quarter.
Our total noninterest expense grew 14% compared to the linked quarter.
As we noted earlier, we traditionally have higher expenses and the first quarter of each year as merit increases are giving to our associates, we find a contribution to our associates' health savings and flexible spending account and we grant stock Awards.
Our marketing expense during the quarter grew largely due to the contribution we made to our charitable foundation, and we incurred $1 $9 million and acquisition related expenses compared to $77000 and the linked quarter.
Total noninterest expense increased 11% compared to the first quarter of 2020, our salaries and employee benefit cost constant and that significant increase and were driven by the additional salaries associated with the premium finance business and annual merit increases at the beginning of this year.
Also contributing to the increase was higher sales and incentive compensation from our increased sales revenue and corporate performance compared to last year.
Our acquisition related expenses were $1 $9 million higher during the first quarter of 2021 and they were during the same period of 2020.
At the same time, our data processing and software costs grew as we added new software during 2020 and our core processing costs increase.
We also had higher FDIC insurance expense as our previous credits were fully utilized and early 2020.
And the P. P P loans, resulting in higher FDIC expenses, we have not utilized the federal reserve P. P. P liquidity facility, which would ever do you start FDIC insurance expense.
We utilized alternative lower cost funding sources that provided more savings to us than what we would've and saving I using the P. P. P.
Liquidity facility.
Our normalized expenses for the quarter were around $35 million, which excludes the non core and additional annual cost we incurred.
Moving to our balance sheet, we grew our investment portfolio during the quarter as we had an influx of cash from deposits and the forgiveness of the P. P P loans.
We typically like to maintain our investment portfolio at around 18% to 20% of total asset.
Our core deposits, which excludes C. D balances grew nearly $410 million from year end.
Most of this growth was in noninterest bearing and money market accounts, along with governmental deposits, which typically get seasonal funding. During this time of the year.
Our demand deposits grew to 45% of total deposits at March 31, 2020, one compared to 43% at year end.
We continue to maintain well capitalized status for our regulatory capital ratios.
And then repurchasing shares and prior periods and announced a new share repurchase program earlier this year.
And we are currently working toward the completion of the merger with Premier and we will not be repurchasing shares for the foreseeable future.
We will continue to monitor our capital levels to determine the appropriate deployment for excess capital.
I will now turn the call back to Chuck for his final comments. Thanks.
Thanks, Katie and we look to increase our market share with our announced acquisition.
We're also anticipate and creating efficiencies that will contribute to our future profitability.
We're pleased with the fact that the Premier acquisition should be immediately accretive to earnings and should have a relatively short earn back period for tangible book value of two six years, even more exciting is that these two deals should add 75 to 80 cents to EPS in 2020 two we continue to.
On driving shareholder value and during 2020, we completed share repurchases and each quarter and raised our dividend, which provides an attractive yield. We also just announced another penny increase to our dividend. This morning during 2021 with market conditions changing we are leveraging on our capital base to complete.
And two acquisitions and we will continue to be opportunistic as it relates to capital deployment turning back to our results for the quarter. Some of the highlights for positive operating leverage on an adjusted basis compared to the first quarter of last year improved net interest income and margin compared to the linked quarter loan growth.
With a 3% annualized compared to year and excluding PPP pay off a 1% improvement and tangible book value per share compared to a year and stable credit quality compared to prior quarters increased households, compared to both year end in March 2020 and we are proud to.
Report that our associates donated nearly $34000.
As to local food banks and served our existing footprint during the first quarter of 2021, we also surpassed $5 billion and assets at March 31st.
I would like to share a couple of thoughts as it relates to 2021, we anticipate our second quarter core noninterest expenses, including Northstar leasing will be between 37, and 38 million and we expect to produce loan growth of between 3% and 5% annualized for the second quarter excluding PPP.
Loans and acquired leases, however that will be dependent on line of credit utilization rates remaining stable.
And are optimistic about the economy and we have a healthy pipeline. We believe our gross charge off rate will be between 25 basis points and 35 basis points, given our historic gross charge off rate of between 15, and 25 basis points and the North star leasing historical charge off rate of between three and and.
And half and 4% we are very optimistic.
And optimistic about our ability to grow income and 2022 versus 2021 or two acquisitions should give us EPS growth of 75 to 80 in 2022. This represents an increase of around 35% compared to current 2021 Street estimates.
This concludes our commentary and we will open the call for questions. Once again. This is Chuck <unk> and joining me for the Q&A session. If Katie Bailey, our Chief Financial Officer, I will now turn the call back to the hands of on call facilitator.
Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two and at this time, we'll pause momentarily to assemble our roster.
And the first question will come from Scott Cyphers with Piper Sandler. Please go ahead.
Good morning, everybody. Thanks for taking the questions Scott.
Okay, and let's see can you maybe first one for you I think if we if I did the math correctly, we removed P. P P and purchase accounting benefit and it looks like the sort of the core core margin is running around 294 currently.
And maybe some thoughts on where that goes from here and I guess, what what you would be including and in a perfect world. If if we could and include the leasing transaction and there just as you look for the second quarter, but that's sort of I'm all ears on on what what Youre thinking.
Yeah, I think on the core side.
And I have to see what these deposits too and we will have some on the governmental deposits run off as we've noted there seasonally here and the first quarter and kind of fade as we get through the quarter. So that'll help us from a liquidity perspective get some of that cash off the balance sheets with the core margin and as we said and I think that.
It cost us about five basis points for the quarter, So gets us somewhere in the core being around 3%.
And I think we'll have on maybe a little bit more upside on the investment book as it relates to yield there with the restructuring that we noted and relief.
And as we've noted that.
Leasing acquisition those are gross yields of about 18%, we brought on and 86 million and I think they'll have some gross from that starting point and.
And the second quarter.
Okay.
Okay perfect. Thank you and then maybe Chuck just sort of sort of the nuance of the that loan growth expectation X P. P. P.
And I think we've all been a little surprised that some of this excess liquidity hadn't gotten drawn down more quickly and we havent seen line utilization.
And sort of when you were talking to your customers sort of what what gives you confidence and and accelerating trends and sort of what are you seeing out there.
Well I think what gives us confidence and the new business.
And we've been able to do I mean are under normal circumstances, you know on loan growth with the production. We've had the last few quarters would be low double digits, so really fighting some headwinds.
For the line utilization.
Quiddity management part of the day like 27% higher than they were a year ago people are.
And all of those PPP money and paying off stuff. So it's just so you know a lot of headwinds, but I am really excited and optimistic in terms on some point.
That line utilization is going to go the other direction and that's gonna be wind and on sales. We've also been able to bring in a lot of customers and.
We'll eventually get their insurance and we will eventually get their retirement plan.
So this is it's a little.
And feel like we're running on a treadmill super Super fast and not getting that much but at some point, though the trends and I've got a reverse and it'll be pretty positive.
Yeah.
Perfect. Thank you guys very much.
Scott.
The next question will come from Steve Moss with B Riley Securities. Please go ahead.
Good morning.
And just following up.
Just following up on that in terms of the pipeline here do we think of that primarily as focused on consumer and commercial real estate just kind of curious.
No.
And those dynamics that you're seeing.
Outside maybe the C&I commitment growth.
Well on the consumer side.
And our indirect business has seen a tremendous amount of growth and.
And we believe that that will continue on the unknown there is really inventory.
Claudia loans don't have much inventory at this point on the consumer side. The mortgage business is hampered by inventory, but we think that it will continue to.
And to do well I'm you know on the commercial.
So a solid year, we enjoyed good C&I.
And and CRE growth, it's pretty been pretty balance for us and we're optimistic that it can continue.
Okay.
And that's that's helpful and interest in terms of the investment securities with the restructuring and the additional purchases kind of you know how do we think about the yield on that portfolio here for the upcoming quarter.
Yeah, I think what we've been buying has a yield of around 1.5% to 2%.
Okay.
And so between between the purchases and the restructuring and look for that to head higher.
Yeah.
To some extent here I guess, yeah, I think it all and shop it wont be as drastic as probably what we saw from Q4 to Q1.
Okay.
Okay. That's that's helpful and just in terms of Ah yeah.
In terms of just.
And all.
The reserve ratio here, just kind of curious you know you guys.
I was kind of disappointed that more reserve releases here, how do we think you know.
What do you think could be the bottom on the reserve I should do we think about the day one day.
For reserve as kind of maybe weren't hud's longer term.
And I think day, one and it's pretty optimistic outlook I think the economy was kicking along at a pretty good clip at that point I think getting to that level will be a while if ever and so I <unk>.
Think we're you know we.
I think to your point, we still have some room and potentially to go and if loan balances were to hold flat, but that's not the expectation with the gross that we have forthcoming.
Yeah.
And then with the leasing company as we noted their loss rates are historically higher than what the core bank has been so that'll increase.
Increase that percentage or that coverage ratio.
Right. That's fair Okay, great. Thank you very much I appreciate all the color.
Thank you. Thank you.
The next question will come from Russell Gunther with D. A Davidson. Please go ahead.
Hey, good morning, guys.
Inc.
I appreciate the color on the near term outlook for expenses, and maybe a bit bigger picture and assuming no change at the short end of the curve.
And what's the outlook for the efficiency ratio with these two acquisitions.
Fully in the run rate and expense saves realized is there a target that youre for a range you're shooting for yeah, I think and the deck that we put together back when we announced the two acquisitions and March on March 29th we set about a 60% efficiency ratio.
Was that all in.
Six zero is the terms of DRAM and <unk>.
And of 2022.
And then assuming some short somehow for the shortened and the curve, we could see that positive operating accelerate a bit.
That would be nice.
It would be nice so too bad and could we talk about low.
Loan floors and.
And again, maybe getting ahead of ourselves in terms of when the fed and May move, but which you know say 25 or 50 or their floors that needed to be worked through that mitigate some asset sensitivity and the early innings of a rate hike cycle.
And terms of rate floors on a rate hike I'm not quite following.
Following I mean, if the rates to go on all hit.
We've hit Florida, Some Florida, now and some of our customers, but the rates went up we'd be moving away from the flaws.
You had breakthrough and.
The remaining floors with a 25 basis point increase and fed funds.
And and capture the full benefit.
And our commercial yields on the floating rate.
Yeah.
Okay, I hate to be exact here, but let me go ahead and <unk> and <unk>.
Try so great.
If rates rise.
And we're going to move further away from the flaws.
And.
Help us.
It sounds like check that you there are no floors in place that would mitigate.
Receiving the full benefit of rising rates.
Is that correct.
No.
Say that again I'm sorry.
Are there any floors in place on your loans that would mitigate the impact of the short end of the curve moving higher.
No I don't think there's any floors.
That you described on our loan portfolio.
Got it thanks.
If you are asking for any flaws in the money now not many.
A small very small amount.
Yeah.
Thank you guys.
Switching gears to the loan growth I appreciate the guidance you put out for this year ex PPP.
Could you talk a little bit about how the recent acquisition.
As you know excess liquidity is out of the system.
All else being equal do you expect that to be accretive to the legacy growth rate at P. Boe.
Or just perhaps diversified from a geographic perspective, but the gross rate.
Similar.
I think it's a combination of different things there and the.
Jack that we did we bought about 3% growth a growth rate and the acquisition I think and part of it parts of those markets are going to grow much faster you know as you get in and around.
The area a lot of it is very similar to what we have and will be consistent with what we have.
We do expect.
Leasing company to grow faster than the bank.
And the premium finance company to grow faster than the back.
Sure Okay.
Very good guys. Thanks, so much for taking my questions and thank you.
Uh huh.
Again, if you have a question. Please press Star then one our next question will come from Michael Perito with K B W. Please go ahead.
Hey, guys. Thanks for taking my questions I appreciate it and I.
A lot of my question had been asked and I did want to just clarify and I apologize if you touched on this and and the opening remarks and kind of jumping back and forth between calls here, but but the I'm with the Northstar deal closing at the end of close on the 31st Katy and I was wondering if you could just kind of walk through.
And if if the debt.
On any of the metrics or anything like clothes for what's different than than you guys kind of communicated initially and and if you could maybe just share with us the final goodwill number and we try to kind of think about the <unk> book value starting point.
And with that transaction now closed.
Sure I said that we're in process of getting on the financials in order for Q2, and like you said it closed and the business on the 31st will recorded in our financial statements.
Including the good well I'm on.
Effective April 1st so we don't have goodwill at this time.
But I think that what we bought or what we announced on March 29th it's consistent with what we acquired on March 31st.
Okay.
So I mean, it's fair can you just remind me what the I'm sorry, the purchase price was and Northstar was about.
I'm, sorry, I'm, just trying to look it up here, but do you have that number.
With 47, and a half million plus we paid off on on line that they had with and another institution that was almost 70 million and so theyre in our balance sheet at 331, and Theres about $116 million sitting and other assets for that.
For those two items.
March 31st.
And then just conceptually that and.
The goodwill with rehab and <unk>.
B 45, $50 million is that fair I mean, it could it be more than just because I'm not trying to lock in their number and her son and he said he kind of conceptual thoughts you could share on on.
How that impact could be impacted by the purchase price and and then the liabilities that you paid off.
Yeah, I don't think I think your number is high.
It's gonna be.
Less than half of that.
Okay, Alright, that's helpful.
And then just.
A question for for Chuck just a quick one here I think I saw and press release. This morning that you guys increased the.
And the dividend by another penny to 36 cents and the second quarter.
I'm curious just if you you know you got these deals you're increasing the dividend and just any updated thoughts on on.
On capital going forward I mean, it would seem like you know north doors closed close to premiere.
And just increased organic growth hopefully accelerates does that kind of the playbook for the next two to three quarters and then reevaluate at the end of the year is that fair.
Yeah, I think that that's fair I think that I think the earnings potential.
With these deals behind us is quite high and I think debt next year, you know, we have the opportunity to reexamine the dividend and.
You hit on historic targets of 40% to 50%.
Hey out and.
<unk> side to increase the dividend further.
Great. Thank you guys I appreciate it.
And <unk>.
At this time there are no further questions. Sir do you have any closing remarks.
Yes.
And thank everyone for joining our call. This morning, please remember that our earnings release and webcast of this call will be archived at peoples Bancorp Dot com under the Investor Relations section. Thank you for your time and I wish everyone. Good health and have a great day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
And I didn't notice and so on all the reads.
Yeah.
And.
Okay.
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