Q1 2021 First Financial Bancorp Earnings Call
Good morning, and welcome to the first financial Bancorp first quarter 2021 earnings conference reference call and webcast. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
After todays presentation, there will be and opportunity to ask questions. Please note. This event is being recorded and now I'd like to turn the conference over to Scott Crawley Corporate controller and please go ahead.
Yeah. Thanks, Jason Good morning, everyone and thank you for joining us on today's conference call to discuss first financial Bancorp's first quarter 2021 financial results.
Participating on today's call will be Archie Brown, President and Chief Executive Officer, Jamie Anderson, Chief Financial Officer, and Bill Harrod, Chief Credit Officer.
On the press release, we issued yesterday and the accompanying slide presentation are available on our website at Www Dot Bank and first dot com under the Investor Relations section we.
And we'll make reference to the slides contained in the accompanying presentation during today's call.
Additionally, please refer to the forward looking statements disclosure contained in the first quarter of 2021 earnings release as well as our SEC filings for a full discussion on the company's risk factors.
The information we will provide today is accurate as of March 31st 2021, and we will not be updating any forward looking statements to reflect facts and circumstance circumstances. After this call and I'll now turn the call over to Archie Brown.
Thank you Scott good morning, everyone and thank you for joining us on today's call.
Yesterday afternoon, we announced our financial results for the first quarter.
Which once again reflects strong earnings and our consistent ability to deliver value to our shareholders.
And certainly remains due to the ongoing pandemic.
The accelerated COVID-19 vaccine distribution.
Precedented fiscal stimulus and on accommodated federal reserve have.
Led to widespread optimism for our economy, which is in Stark contrast to our cinema and at this time last year.
Our first quarter operating performance reflects this change in sentiment and were more optimistic as a result of the improved business climate.
Despite an operating environment that presents ongoing challenges due to very low interest rates and muted loan demand.
Highlights for the most recent quarter after being adjusted to remove nonrecurring items included earnings per share of 50 cents a return on average assets of $1, two 4% and a 58% efficiency ratio.
Net income for the quarter was bolstered by lower expenses and significantly lower credit costs.
Despite its expected seasonal declines noninterest income was strong due to healthy mortgage demand robust foreign exchange activity and higher wealth management fees.
In addition, adjusted non interest expenses declined $4 $6 million from the linked quarter.
Resulting on a sub 60% efficiency ratio.
As I mentioned credit costs were low with $4 million of provision expense during the quarter and resulted in an allowance for credit losses of 1.84% of total loans excluding PPP.
Classified assets increased during the quarter. However, our overall credit outlook has improved significantly and our borrowers are seeing benefits from the various stimulus actions and the improved economy.
While the first quarter net charge offs increased slightly from prior quarters. This was driven by a single customer relationship.
Given our overall credit outlook, we expect the allowance for credit losses and continued to decline over the course of 2021.
I continue to be pleased with the progress we've made and reducing our cares act loan modifications.
Active loan modifications at the end of the first quarter totaled $251 million or two five per cent of total loans with hotel loans, making up a $153 million or <unk> 61 per cent of these deferrals.
We expect loan balances with modifications to steadily decline through the third quarter of this year.
As you know the first quarter was again on active period for the payment protection program and through March 31st we originated over $307 million and second draw P. P. P loans with an average fee of five 3%.
We expect forgiveness payoffs for this round to flow and through the remainder of this year excluding.
Excluding PPP activity loan balances declined slightly for the quarter.
Due to accelerated mortgage and HELOC payoffs increased bar liquidity and muted business loan demand.
As a result of these trends, we anticipate slower growth and the near term with some acceleration and the second half of the year.
As of March 31st consumers and businesses were holding record levels of deposits with average balances increasing during the quarter as a result of the stimulus package approved by Congress last December.
We anticipate further deposit balance growth and the second quarter. After the passage of the most recent stimulus bill.
This anticipated growth will likely continue to suppress loan demand and service charge income and the near term.
From a capital standpoint, our ratios remained strong through the first quarter. The combination of our current capital levels and our improved credit outlook led us to repurchase approximately 840000 shares during the quarter.
Absent higher priority capital deployment alternatives, we anticipate additional buyback activity and the second quarter.
I'll now turn the call over to Jamie to discuss the details of our first quarter results and then after Jamie's discussion I'll wrap up with some additional forward looking commentary Jamie.
Thank you Archie and good morning, everyone slide.
Slides four and five provide a summary of our first quarter 2021 results.
And as Archie mentioned, we were encouraged by our solid first quarter results.
Earnings were strong and the net interest margin stabilized fee income remained elevated and provision expense moderated.
In addition, our expense base decreased compared to the linked quarter and our efficiency ratio remained below 60%.
As expected core net interest margin stabilized during the quarter lower loan fees and continued pressure on asset yields led to a nine basis point decline and total net interest margin on an FTE basis. However, these declines were partially offset by the card deposit cost reductions.
And there will be some volatility and total margin due to loan phase, we expect core margin to decline slightly in the coming periods.
Regarding fee income mortgage banking exceeded expectations, despite seasonal headwinds and.
In addition, bannockburn had another strong quarter of foreign exchange income, while trust and wealth management income grew during the period.
Net charge offs and classified assets increased during the period due primarily to a single 7 million dollar charge off and COVID-19 related credit migration.
While these trended negatively these events were largely anticipated in previous quarters, and we continue to believe our current reserve levels are more than adequate to absorb any further credit deterioration and 2021.
In addition, we capitalized on market conditions and repurchased approximately 840000 shares during the quarter.
Our capital ratios remain strong and are in excess of both internal and regulatory targets.
We continue to believe that our balance sheet is well positioned for both the near and long term and our stress testing results continue to indicate our ability to maintain these capital levels for the foreseeable future.
Slide six reconciles our GAAP earnings to adjusted earnings highlighting items that we believe are important to understanding our quarterly performance.
Adjusted net income was $49 million or <unk> 50 per share for the quarter.
Which excludes $1 3 million of severance costs and another $1.3 million of nonrecurring items.
As depicted on slide seven these adjusted earnings equate to a return on average assets of one point to four per cent and a return on average tangible common equity of 15, 8% and.
In addition, our 58, 4% adjusted efficiency ratio remains very strong, reflecting our ability to diligently manage expenses.
Turning to slides eight and nine net interest margin decreased nine basis points from the linked quarter to three 4%.
This decline was primarily related to lower loan fees, including P. P. P forgiveness phase.
Despite the overall decline and margin we were very pleased that basic net interest margin increased five basis points as declines related to funding mix and costs outpaced the impact from lower asset yields and changes and asset mix.
The low interest rate environment continues to negatively impact asset yields which declined during the period.
Similar to the fourth quarter, a higher mix of investment securities contributed to the decline and total asset yields and the period as we deployed excess liquidity on the balance sheet.
And response to these declining yields we continue to aggressively lower our cost of deposits, which declined six basis points during the period to 14 basis points.
These lower deposit costs reflects strategic rate adjustments as well as the shift and funding mix from higher priced Cds, so lower cost core deposits.
While some additional decline as expected in the coming periods. We expect this to be more gradual as we approach our expected pricing floor.
Slide 10 illustrates our current loan mix and balance changes compared to the linked quarter.
Excluding the increase and P. P P loans and if period loan balances declined slightly as an increase and I see are a loans was offset by declines in mortgage and consumer loans and a modest decline and C&I loans.
Slide 11 shows our deposit mix as well as a progression of average deposits from the fourth quarter.
And total average deposit balances grew $447 million during the first quarter, driven primarily by increases and low cost transactional deposits.
We remain very pleased with the trajectory of deposit balances as average transactional deposit balances increased 21% on an annualized basis during the period.
In addition, non interest bearing deposits grew $137 million during the quarter as clients receive tax refunds and another round of stimulus checks.
We remain focused on deposit pricing and we will continue to make any necessary adjustments based on market conditions and our funding needs.
Yes.
Slide 12 highlights our noninterest income for the quarter.
And as I mentioned previously first quarter fee income remained strong and was driven by elevated mortgage banking and foreign exchange income.
And we're also pleased with the increase and wealth management fees.
Seasonal headwinds and the additional round of government stimulus made the trajectory of deposit service charge income, though we remain optimistic that this will rebound and the back half of the year.
Yeah.
Non interest expense for the quarter as highlighted on slide 13.
Overall for expenses were in line with our expectations and declined when compared to the linked quarter.
Driven by a decrease and incentive compensation and lower professional fees during the period.
Despite the decline from the from the prior period salaries and benefits remained elevated due to incentive compensation tied to our high fee income as well as increased health care costs.
Turning now to slide 14, our first quarter ACL model resulted in a total allowance, which includes both funded and unfunded reserves of $183 million and $4 million and total provision for credit losses.
The decline and provision expense from the linked quarter was driven by improved economic forecasts, which were partially offset by elevated net charge offs.
The model and utilize the Moody's baseline economic forecast released at the end of March which was improved from the forecast utilize and the fourth quarter.
Net charge offs as a percentage of loans increased to 38 basis points on an annualized basis, primarily driven by a $7 million charge related to a single relationship.
Additionally, as shown on slide 15 classified assets increased $54 $8 million.
As pandemic related stress resulted in some negative credit rating migration during the period.
The potential for this credit migration and led to our significant reserve build and 2020 and at this point and time, we believe we've captured the risk from future COVID-19 related credit stress and the ACL model.
Barring something unforeseen, we expect lower levels on provision expense for the remainder of 2021.
Finally, as shown on slides 16, and 17 capital our capital ratios remain in excess of regulatory minimums and internal targets.
All capital ratios remain strong however, the shifts and interest rates at the end of March led to a decline and other comprehensive income and resulted in a slight decrease and our tangible common equity ratio and our tangible book value during the period.
In addition, we resumed our share buyback program during the quarter and repurchase approximately 840000 shares.
Once again, we do not anticipate any near term changes to the common dividend. However, we will continue to evaluate various capital actions as the year progresses.
Now I'll turn it back over to Archie for commentary related to our outlook going forward and Archie. Thank you Jamie.
Where we and our prepared remarks I want to further comment on our forward looking guidance, which can be found on slide 23.
Loan balances, excluding PPP are expected to remain flat over the near term and.
And as we continue to see pressure and certain portfolios and we expect low single digit growth as we get into the back half of the year.
Average securities balances are projected to increase further by approximately $250 million and the second quarter as deposit balances are expected to stabilize without additional stimulus activity.
The net interest net interest margin is expected to be positively impacted by the further PPP forgiveness payoffs and the associated acceleration.
Our fee recognition through the remainder of the year.
Excluding our more volatile variables, such as PPP fees purchase accounting and loan fees.
We expect the margin to be under modest pressure from the low interest rate environment as well as the excess liquidity on the balance sheet.
And subsequent increases to our securities portfolio.
Regarding credit we expect the provision expense to continue to decline throughout 2021.
Specific to fee income and.
We expect continued strong mortgage performance with seasonal increases to volume, partially offset by pressure on premiums.
Foreign exchange income should remain consistent with prior quarter and deposit service charges are expected to remain under pressure given stimulus activity.
But we expect some modest growth and our interchange revenues as customer spending accelerates.
We expect expenses to be consistent with the prior quarter over the near term this could fluctuate some with fee income.
Lastly, we will continue to evaluate capital deployment opportunities, including share repurchases over the remainder of the year.
Overall, we're pleased with our improved performance and outlook from this time last year.
We started to transition associates back into their physical office locations and we look forward to implementing the lessons learned over the past year to create and efficient.
Safe and collaborative workplace.
As our local and national economies continue to improve we believe we are well positioned to deliver industry, leading services to our clients and returns to our shareholders.
With that we'll now open up the call for questions. Jason. Thank you will.
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 on your handset before pressing the keys.
Your question. Please press Star and then two.
Our first question comes from Scott Cyphers from Piper Sandler. Please go ahead.
Good morning, guys. Thanks for taking me Scott and thanks Scott.
And I guess the first question was just on on that charge off that you had cited is that sort of fully resolved or would you would you expect any further charges and then I guess just to look forward with the expectation generally be for charge offs to revert back to and I guess last couple of quarters at least has been and it sort of a 20 day 25 per cent or pardon me basis points.
Range, something like that and reasonable to look at going forward.
Yeah.
Yes, Scott, we would expect the charge off rate to to come back down from from the first quarter levels based on what we're seeing right now.
You have kind of kind of more normal and the range that youre, describing and all that.
Bill maybe talk about the you know the resolution of that credit specifically to give you an answer there. We go yes, absolutely. Thanks Archie.
And on Scott.
How are you.
Yeah, Yeah yeah.
This was a longtime customer.
Off the back of the commercial finance group overtime and <unk>.
More from our traditional agency deal and through aggregator of Mount Medical malpractice.
And we had some income issues between the carrier and our borrower.
And that relationship breakdown and that led us to cut a deal with the carrier.
So this should.
Be all behind us after this quarter.
After discharge.
Okay. So does this is this isn't even really related to any areas that would be sort of kind.
Kind of COVID-19 impact I mean, it strikes me as kind of a special situations and fair enough a conclusion.
But yeah, it's Scott I think.
I think when you say if it were income.
Importantly, COVID-19 related.
Probably would have had a different outcome in terms of a provision, but because it was something outside of that.
It led to probably little more provision.
Yeah, Okay perfect. Thank you for that and then maybe just as we look to the second half of the year.
And certainly understand what's going on on the consumer side, and then I think we're all sort of waiting.
So this rate recovery on the commercial side, maybe to that and any color you can provide on where utilization rates are currently versus what a typical number is and where you might expect those to go as we look to sort of a second half slash 2022 recovery and commercial.
Scott I'm, sorry on the on the first part and you said utilization rates.
Yeah commercial utilization rates.
Yeah.
Scott, we think though and in the back half of the year, we think they'll start to move up I mean, you you have several things happening certainly the liquidity that is sitting on balance sheets, where you're I mean, we're seeing record.
You know.
Balances sitting and demand deposit accounts, both consumer and business you have that going on there is still I think some.
Clarity around the pandemic and making sure we're getting to a final firm footing and then there are still some supply disruptions and.
All of that's got to work through but we would think that would start to get better and the and the back half of the year.
Yeah.
Makes sense perfect. Okay. Thank you guys very much.
Thanks, a lot.
The next question is from Chris Mcgratty from K B W. Please go ahead.
Hey, good morning, guys, Hey, Chris.
Jamie maybe just kind of start with you on our balance sheet question.
And the expectation to add to the bond book and and loan portfolio kind of stay flat.
Given all the liquidity and cynicism and I mean, do you expect earning assets to have an upward bias or are we kind of just remixing for a couple of quarters.
Yeah, I mean, so right now we're gonna add to the bond book to the investment Securities.
Securities and so that will go up our targeted balance now is right around 4 billion for the for investment Securities. So overall, yes.
Earning assets will go up period to period by that amount.
And that's just with loans staying relatively flat.
And so from a credit when you think about that you'll probably and your next question probably about what you're talking about the margin maybe when you think about that that's going to you know have an effect on the on the net interest margin and dilute the margin slightly you know when we're reinvesting right now.
On the security side, we're getting somewhere around and that 2% range maybe 210.
And so you think about that obviously that is a dilutive to the margin and you know were still seeing a little bit of repricing on the loan side as well and then when you look at the deposit side.
You know, we had a large move down and the first quarter that we were expecting we were we could see that coming we knew we had some room on the deposit side and when we moved from 20 basis points on deposit costs of 14 basis points and that starts to you know theres not not as much.
Room to move down here going forward. So we think we can get that down by another two or three basis points I'm not all in one quarter, but it just takes a little bit of time here over the next two or three quarters to get that down. So so from a rate perspective on the margin.
And and the and the second quarter and we're gonna see some pressure just given that you know putting that excess liquidity to work and the and the securities book and just some continued repricing on the loan side.
Okay, that's great color. Thanks.
You guys referenced the efficiency ratio a few times on your prepared remarks.
And just a question about about that I mean is the expectation that in this environment. You can stay below 60, and then just a clarification the the near term expense flat is that.
Relative to the reported number or the adjusted number.
Yeah, So that's relative to the adjusted number so yeah whenever we're talking about we're talking about the operating number. So we think that here and the short term.
<unk> will remain relatively flat and then in the back half of the year, just as things open up a little bit and you're starting to see a teeny expenses start to come back a little debt and the back half of the year, we may see those expenses.
Expenses tick up a little bit, but yes, it's off the operating number flat and the short term and maybe up a little bit and then in the back half of the year.
Yeah, and then on the on the revenue side I mean, certainly we see fee income.
Lately, improving from here and with the additional Securities book.
Hopefully that we can hold revenue and and maybe that efficiency ratio will stick.
Okay.
And then maybe just last one kind of housekeeping on P. P. P. G do you have.
The average balances and the quarter and then also the fees that were in the quarter and what might be still to come. Thanks.
Yeah. So I don't have that average balances right in front of me, but Chris but at the end of the quarter talking about the fees. We have so from the from the first round and then this last round of PPP, we have about 22 million.
Fees and fees that will still come in and where we're expecting the bulk of those two.
To come in and over the over the.
<unk> of the year.
We think the second quarter is actually going to be a little on the low side.
Just with the kind of the first round kind of wrapping up and then.
And this last round and kind of really has the forgiveness hasn't hasn't kicked in quite as much. So we think overall if you're trying to project. Those we think it's it's maybe roughly a third of those come in and the second quarter and then the other two thirds will be spread out and the and the third and fourth.
Order.
Great. Thanks, Thanks, Jamie.
Yep.
The next question is from.
On our stone from RBC. Please go ahead.
Hey, Thanks, good morning, guys.
And Jonathan.
Talk a little bit about maybe following up on Scott's question can you talk a little bit about the commercial pipelines and what day.
It looked like maybe relative to a quarter ago.
Sure John This Archie.
I'd say the pipeline overall is slightly.
Higher than it was a quarter ago and we're even in recent weeks, we're seeing more activity, especially on our approved pipeline that is starting to move up. So we think again and the near term a little more flattish with theirs and you're starting to see some momentum and and that is some things improve supply chain all that stuff works its way.
And we think and the back half.
We will start to see some some growth out of that group.
And what how would you describe the competitive environment and also maybe relative to a quarter ago.
Highly competitive and is.
Sure.
And when you and me.
And it's very very competitive on on.
On.
Pricing and structure.
We're probably competing a little more when we have to on price, but we are trying to stick to our disciplines on the structuring side.
Deals, but its a its highly competitive for loans right now.
Can you touch on the franchise finance for a second and how and how that business is doing.
Yeah, I'm going to have maybe bill give you just a little color and I know, we've got a slide on the on the portfolio as well and in the deck, but maybe bill can you just a little color on the on how the.
Portfolios looking now.
Yeah. The franchise book has performed very very well.
You know through the COVID-19 pandemic.
Pandemic, especially on our delivery.
And our quick serve restaurants and they they adapted very quickly to the new normal during the pandemic.
We also have some shutdowns and what we've talked about in the past Golden Corral, Danny's IHOP and things like that.
And we're starting to see a lot of progress being made.
And Danny.
IHOP and Golden Corral as those stores reopen.
Denny's and IHOP or a little bit earlier and their performance returns.
And then the Golden Corral, but on a portfolio has you know the bulk of the stores or are open now and not all of them on the G fee side, but on the damages and the I hope they are and with the plans that are and places all of the go on growth should be open by the end of this quarter.
And the results have been youre, not at 2019 level, but rebound and very nicely and all shut down formats.
Through the Q4 and Q1 of this year.
And it's making me hungry by the way.
[laughter].
Just can you talk a couple of more things can you touch on the classified assets increase I know you.
And I talked about a little bit, but anything going on there.
You need from different.
Yeah, I mean, the uptick and classified assets really tired and who they too are the key.
COVID-19 impact and portfolios.
And about 75 per cent of that uptick was hotel and sit down and and our retail credit.
And as we.
Put on COVID-19 mods and place and we monitored the credits, we obviously benchmark them off to sit on our projections and our plans and these are ones that that fell beneath where we thought they would and so we made the rate and adjustment.
And as appropriate.
And you know based on our look out and we do think that the bulk of this portfolio is set to rebound and as things open up and with the traction of the vaccine and the pent up demand that we're seeing we feel pretty optimistic about the those credits actually improving over time I think we're seeing.
And what Bill Occupancies North of 50 per cent now, yes, we're risk.
And Occupancies uptick and all of our hotel books.
And we're anticipating up around 50, or 52% occupancy based on customer feedback, which is right in line or a little bit above the stars reports for the balance of the year.
Okay.
First one here on credit and this has been popular and other calls as well. So I'll, let you give it a shot but do you see a path.
Back to your day, one and seasonal reserve levels and if so any.
Thoughts on the timing of that.
Yeah, John it's Sami so I.
I think yes, I think and theory, that's that's where we should should oh once everything is kind of cycled through where we should where the industry really and I and should should come back to but.
<unk> is the key here right and so you know if is it over.
The next year or so I think is probably where we ended up landing on that just just as you know at the risk.
We just kind of see where the recovery is and where things kind of land and in it and you know that.
When you think about hotels, specifically you know those are going to take a little bit of time to.
And kind of see where they are at post post pandemic. So I think I think personally that it's.
And year al.
Until we start to see that and it could be even a little bit longer than that but but yeah. So are so when you think about that for us.
Our.
Our reserve and you take out the PPP loans were at 184 of loans. Our day, one was right at 130 <unk>.
So you know that's 54 basis points.
Of.
Of release, and obviously, you can come and many different forms and and you know.
Charge offs are going to be some of that you know if we have loan growth that obviously affects the denominator of that equation, but.
But I it at ever the signs are obviously pointing to lower our provision expense here in the intermediate term.
Okay. Thanks, a lot guys I appreciate it.
Hey, Chuck.
The next question is from David long from Raymond James. Please go ahead.
Yeah.
Good morning, everyone.
Hey, David.
You had mentioned on the securities investments, you're getting about two 2%, obviously still at that level diluted to the NIM and the mix is shifting but the question I have is what type of securities are you buying to get these yields and are those yields still in place today.
Yeah, that's about our blend and I would tell you that's our blended reinvestment rate is right around two so it would be when you look at out the mix of our book between.
Roughly.
60% agencies, 40% non agency. It's it's it's essentially the same mix of of investment.
And that we would have on our book it at the current time, so nothing different we're not going out and really any longer and extending or our securities portfolio is.
That three and a half to four duration.
And so it's not really extending a lot there and and so it's really going into the same type of securities that we're that we currently have and the book and and and yes, we're still getting that roughly that 2% our reinvestment rate.
Got it and then a.
Second question comes out to the you know you talked about the round two the P. P. P. Gross fees about five three per cent, where there's some deferred expenses with round two that would offset net gross free C. When you start to report your net fees you know maybe in the back half of this year.
Yes, no there's no deferred expenses with that no.
So all of that all of that that five 3% will be coming in now.
Now we are initially.
Initially amortizing or creating I guess those are those fees and over a over the five year.
Maturity period, and then obviously as they.
Get forgiven will bring those on.
Got it. Thank you Jamie I appreciate the color, yes, yes, David.
Again, if you have a question. Please press Star then one.
The next question is a follow up from Scott C. First from Piper Sandler. Please go ahead.
Hey, guys. Thanks for taking the follow up on.
First I was sort of ticket day.
And you tack one on P. P pes and the breakout of the balances between around one and round two by any chance of up to today's balances and just round numbers is around two.
Yeah. Scott this is Jamie so at the end of and let's say at the end of March we had about a 400 million and the and first draw and the AR and the first round and about $300 million and the second round, so and just a follow up from.
Chris Mcgratty is early earlier question the average.
The average for the period and PPP loans for the first quarter was $645 million and it was and the fourth quarter was seven and 78 and we're projecting about 600 million of average balances and the second quarter.
Perfect.
Alright, that's great. Thank you and then just on any lower.
Lower credit costs that don't Wanna make you put too fine a point on it but it seems that and maybe with the exception of of hotels and everything is in pretty good shape, particularly considering that the first quarter.
Sort of charge off was more or less and special situations could you guys see yourselves, taking a negative.
Provision.
Or would you would you anticipate just very very modest positive provisions you know what at what sort of the thinking there.
Yes.
I was hoping you were going to follow up about the demise of the European Super League Scott.
Yeah, [laughter], but on.
On the art and provision yeah, I, I guess and I hate to say it depends but it does depend and so on and on the provision expenses going forward. We are I mean again, we do think it's going to be lower I guess the question becomes or you know the weather what charge offs look like here going.
Forward and I mean, if we have and you know charge offs can be it can be lumpy. So I mean, if we have if we have a quarter here over the next.
Over the next couple of quarters, where charge offs are on the lower side, you know call. It sub 5 million and there's a real chance that we could have but we could have negative.
Our debt, we could have a negative provision expense.
You know and there are other factors, obviously going into that would be how much loan growth, we would have and the period.
And then just what the overall, what the overall forecast looks like but again a quarter here over the next two or three where we had.
Low charge offs you could book you can see that that happening for us.
Okay.
Perfect. Thank you very much and then I'll follow up on Oh, excuse me offline regarding just sort of the influence of British politicians and and fans and compound.
That's a longer discussion and I appreciate it.
And thank you guys.
But.
And there are no more questions and the queue. This concludes our question and answer session and I'd like to turn it back over to Archie Brown for any closing remarks.
Thank you, Jason and I want to thank all of you for being on the call with US today and are following along on our progress. We look forward to talking with you again next quarter have a great day bye now.
Yeah.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
[music].
Yeah.
[music].
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Hum.
Yeah.