Q1 2021 Amerant Bancorp Inc Earnings Call
Good day, and thank you for standing by welcome to the Amarin and first quarter 2021 earnings Conference call.
At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone. Please be advised that today's conference is being recorded if you require any further assistance. Please press star.
Zero I would now like to hand, the conference over to your Speaker today, Laura Rossi Investor Relations Officer at Amarin Bank. Thank you. Please go ahead.
Thank you Rocco.
Good morning to everyone and Nicole and thank you for joining us to review Bancorp first quarter 2021 result.
With me. This morning are Gerry plush, Chief Executive Officer and Paul.
Thank you for Yoga Chief Financial Officer.
Before we begin note that the company's press release comments made on today's call and responses to your questions contain forward looking statements.
The company's business and operations are subject to a variety of risks and uncertainties many of which are beyond its control and consequently actual results may differ materially from those expressed or implied.
Please refer to the cautionary notices regarding forward looking statements in the company's earnings release and presentation.
For a more for more complete description of these and other possible risks. Please refer to the company's annual reported on form 10-K for the year ended December 31st 2020 and he.
And all other filings with the SEC.
You can access these filings on the SEC's website.
Please note that Ameren has no obligation and makes no commitment to update or publicly release any revisions to forward looking statements in order to reflect new information or subsequent events circumstances or changes and expectations, except as required by law.
You should also note that the company's press release earnings presentation and today's call include references to certain adjusted financial measures also known as non-GAAP financial measures.
Please refer to appendix one of the company's earnings presentation for a reconciliation of each non-GAAP and non-GAAP financial measure to its most comparable GAAP financial measure I will now turn the call over to Jerry.
You, Laura and good morning, and thank you for joining Amarin and first quarter 2021 earnings call I'm pleased to join you today as <unk> New CEO.
Before I begin I'd like to take a moment to recognize my predecessor, Millar Wilson and over the course of his more than 40 year tenure are oversold amyris growth from $6 billion and assets to <unk> 8 billion and the expansion from 15 branches to 25, he spearheaded the spin off and subsequent listing and among other things most recently.
Navigated amarin through the COVID-19 pandemic, a well deserved. Thank you to MLR for it is time and service to the company.
On another note I would like to announce and starting next quarter. We are planning to release earnings on the third Thursday of the following months.
So the dates would be July 22nd October 'twenty, one and January 20th for the balance of this year.
We want to do this for several reasons primarily to have more time each quarter to be focused on completing initiatives and generating growth and to also have the window open for insiders and additional week each quarter.
So today I'll be providing details about a number of new strategic initiatives and objectives that were referenced in our press release, we will share more detail about each one and these are essential for improving average performance and growth and achieving the growth objectives that we have but first I'd like to briefly talk about our performance and the first quarter and then Carlos will provide some more details.
So if you turn to slide three you'll see our first quarter highlights. We are pleased to report improved results and the first quarter compared to the prior quarter. Our net income was up 77% quarter over quarter, primarily driven by higher non interest income and lower expenses. In addition, there was no provision expense and the quarter.
And the NIM improved slightly to 266% driven primarily from lower average deposit costs. We also show our progress on class B share repurchases since we announced the buyback program on March 10th or.
Our total loans were $5 8 billion and total deposits for $5 7 billion. There were both down slightly in the quarter. The decrease in loans was driven by higher prepayments, including 111 million and PPP loans, while the decrease in deposits was due to lower Cds and brokered deposits as we continue to pursue lower cost.
Relationships focused funding.
So moving onto the next slide you'll see several key performance metrics, which show improvement on all fronts. This quarter reflective of higher operating profitability, all while maintaining a robust capital position and solid credit coverage. These are just the first steps and the right direction. So while we know we have much more to do.
Good to be showing progress this quarter and.
And as I will get into later on the call will outline and number of initiatives underway that are focused on driving continued improvement and operating results. So with that said I'll turn the call over to Carlos and walk through our results for the quarter and more detail.
Thank you Jerry and thank you everyone for joining us today, turning to slide five ill begin by discussing our investment portfolio and.
Our first quarter investment Securities balance was $1 3 billion or changed for the previous quarter and down for them to $1 7 billion during the first quarter of 2012.
For this quarter, we continue and where it strategy to insulate investment portfolio from prepayment risk floating portion represents only 14% and we compensation towards hydration and and natural extension of the mortgage portfolio has increased the overall duration for the end of the Q1 234 years.
Moving on to slide six.
We would like to provide an overview of our loan portfolio.
At the end of the first quarter total loans were $5 8 billion slightly down by $88 million compared to the end of the for quarter.
The decline was primarily driven.
Prepayments across our commercial loan portfolio inclusive those from PPP loans.
And challenge low production due to the convenience for economic activity as a result of the pandemic and the first quarter approximately household prepayments were related to PPP loan forgiveness, we remain committed to always communities by originating over $80 million and PPP loans during the first quarter.
Currently we received 111 million and Brexit vote forgiven by the SBA and.
They're all this we have $165 million left outstanding and PPP loans as of the end of the first quarter.
Before I move on I wanted to talk about some positive signals, we see and our loan portfolio. This quarter. We continued to see strong performance across our owner occupied and consumer loan portfolios, specifically consumer loans increased approximately 32 million quarter over quarter, primarily driven by our participation and indirect lending we expect to continue.
And this high yield indirect loans and airports to mitigate NIM pressures into future quarters.
Turning to slide seven I would like to provide some more details and amarin and credit risk.
And the first quarter women's day as strong credit risk coverage the ratio of allowance for loan losses to total loans was 183% higher than previous quarter. The absence of loan loss provision expenses for this quarter was driven by lower loan production during the quarter.
Nonperforming assets ended a $90 million, which represented an increase of $1 8 million quarter over quarter, and a 57 million compared to a year ago non.
Performing assets to total assets increased to 116% up three basis points from the prior quarter and 75 basis points versus a year ago. This increase was due to the downgrades across our commercial and CRE portfolios.
As a highlight only one 1% of our loan portfolio remained under deferral forbearance and the first quarter down from the almost 20% and the same period last year almost the entirety of this portfolio is backed by real estate collateral and.
All of the loans auto for burden and have resumed regular payments I would like to mention that we no longer have eight hotels under forbearance and we have seen a healthy increase and the <unk> of the properties and the portfolio, which is a great improvement versus 2020.
Or do you remain focused on proactively managing the status of our loans to ensure sound credit quality and our strong reserve coverage.
Moving to slide eight total deposits were $5 7 billion down 49% quarter over quarter and down two 8% year over year.
For the quarter over quarter decrease was primarily driven by a 159 million combined reduction and customer Cds and brokered deposits, partially offset by an increase of 188 million and customer transaction and the guns declining number and customer CD was due to our continued efforts to aggressively lower CD rates as we focus on increasing.
And lower cost deposits and multi product relationships.
As a result, our cost of interest bearing deposits was down 10 basis points and this first quarter compared to the free as well.
As of March 31.
BBB related deposits reached 173 million compared to $95 million as of the end of the previous quarter, four and deposits decreased $26 million compared to the prior quarter represented an annualized vacate or 4% compared to the 6% we had on the three and a quarter ago.
We are really encouraged to see a slowdown for and deposits indicate given the contribution this deposits provide to our cost of funds for in deposits cost of funds is falling 16% versus domestic for 95% having said this international customers continue to use those savings to fund our day to day.
We continue our efforts to engage and cross sell with customers and and strengthened relationships with our international deposits and gain a bigger share of losses.
Turning to slide nine the first quarter of 2021 net interest income was 48 million down 2% from the fourth quarter of 2023% year over year debt decreasing net interest income compared to the for quarter was primarily due to two factors first lower non volumes as a result of our continued slower than normal.
Non production and customer prepayments.
And due to lower average balances and interest securities primarily due to prepayments. These factors and the quarter were partially offset by lower overall deposit costs and average balances on customer CD.
With regards to the margin first quarter, NIM was 266% up five basis points quarter over quarter, primarily due to lower cost of funds and customers CD balances and essentially flat year over year anxious to elevate pressures on margin included and repricing of customer time deposits and the relationship money markets and.
<unk> and flow rates to our new loan production and repricing.
Additional interest already and opportunities and high yield lending programs.
Moving to slide 10, non interest income and the first quarter was $14 million of 23% quarter over quarter and down 35% year over year.
Over the quarter decrease and non interest income was reminding due to the absence of the loss on the sale of our operations Center.
And is at $2 6 million total net gains and securities and increased fees from brokerage and advisory activities also contributed to our higher non interest income this quarter.
And offset to this increase we didn't have fees related to the main street lending program and had lower derivative income and white transfer fees.
Current assets under management management reached 2 billion as of the end of March up 2% year over year and up 28% year over year net new assets contributed by approximately $89 million year over year.
And our teams continue to deepen and share of wallet and attract new relationships.
Turning to slide 11, first quarter noninterest expenses was $44 million down 60% quarter over quarter and down 3% year over year, the drivers of the quarter over quarter and a year over year decreases in non interest expenses were largely just seen this primarily driven by the separation.
<unk> implemented in the last quarter, which lower salary and benefit expenses as well as the absence of severance expenses.
In connection with this plan.
Other contributing factors included lower onetime expenses following the closure of two branches.
And the implementation of this severance plans, we have reduced our staff by 76 Ftes for 9%. However, we saw an increase and ftes and the first quarter driven by a number of our strategic Highlands, primarily and the frontline personnel.
And note, we have resumed normal levels of bonus compensation and adopted new long term equity incentive comps and compensation program as.
<unk> 2021 beyond royalty income continues to look for opportunities to create efficiencies and improve our cost structure.
Moving to the next slide our business continues to be asset sensitive as of the end of March over half of loan portfolio, either look has and floating rate structures for mature within the year to manage these sensitive and mitigating better and our margins. We continue to actively manage our loan and investment portfolio. This includes implementation.
And flow rates on our loans, and capitalizing and higher yielding securities and longer duration with this I will turn it back to Jerry.
Thank you Carlos I'd like to address how we are positioning amarin for immediate and long term success and walk through some of the specific initiatives we are focusing on.
As you can see on slides 13, and there are a handful of initiatives that serve as the foundation for our long term growth strategy. Our goal is simple and improve our performance and drive sustainable profitable growth importantly, we want to do this with the best interest of our investors team members customers and communities and which we operate.
So first it is clear to me from experience and from peer comparisons that ameren needs to become and will become a deposits first focused bank core deposits are the lifeblood of a strong banking franchise and growing core deposits is critical to our near and long term success and profitability we have opportunities in the March.
And we serve to increase our share and consumer and small business and commercial to achieve a lower cost of funds and reduce the reliance on brokered funds and other high cost sources, we've identified a number of ways to better target and attract these core deposits, including implementing and enhancing a digital onboarding platform.
And the build out of our Treasury management sales force and adding additional treasury management capabilities and focusing our marketing to drive the digit additional digital and and branch traffic and gathering other sources of deposits such as municipal accounts and private banking. So with these efforts, we are targeting and reduced reliance on broker deposits.
And so the target and not to exceed 5% of total deposits and increasing our core deposits to make up over 20% and total deposits within the next six quarters, but please know our goal will be to exceed that target and keep going.
Additionally, we're focused on achieving a target loan to deposit ratio of 95% all of which means to achieve these targets. We will all be very focused on gathering and core deposit accounts.
We are also going to accelerate our digital transformation over the past several quarters, we ramped up our digital efforts with the rollout of <unk> and sales force across the organization and with the introduction of Amarin investments model, we've been focusing on and evaluating digital solutions and a number of areas so including deposits account.
<unk> small business lending and wealth management, and we expect to be able to update everyone on our progress with these soon.
Another area of immediate focus is dramatically improvement ameren and brand awareness, so and the communities. We serve building brand awareness is key for both growing our presence in these markets as well as laying a strong foundation for future expansion. We have a number of efforts currently underway that we will continue to pursue in the coming quarter.
And there is to grow the awareness of the Amarin brand from improved signage and promotions to evaluating infinity relationships and greater community involvement.
Much of this can happen from us just being outward focused and proactive as well.
I consider our South Florida is best kept secret and we need to break through that.
Additionally, we are diligently looking at rationalizing our lines of business and geographies, we plan to expand our Treasury management wealth management private banking and specialty finance capabilities in order to grow the bank's revenue streams and fee opportunities at.
At the same time, we are curtailing future originations and New York City.
And New York City location as a commercial real estate loan production office with minimal deposit relationships and as we evaluate our alternatives. There we will be focusing on growing and our core markets. We intend to look for opportunities to grow and the contiguous markets as well. Please note that over half the New York portfolio and will pay off and then.
Next 12 months to 18 months and we believe there are solid opportunities to replace debt so more to come and as we evaluate our next steps there.
We are also evaluating new ways to drive cost efficiencies across the business as part of our margin improvement plan and we've set a target goal to improve our efficiency ratio to 60% within the next six quarters. This will require looking at everything pricing balance sheet composition and of course, what we're spending and why.
There is ample opportunity for us to improve and a number of areas.
We also intend to optimize our capital structure and to look for ways to lower average cost of capital.
The recent tender offer and now the class B share buyback program authorized and Q1 that is currently underway or just first steps and continuously evaluating how much capital do we need and what are the ways in which we can support our valuation we need to be constantly exploring and evaluating new ways to optimize the structure while continuing.
To drive profitable growth to appropriately utilize the capital that we have a lower cost of capital can come from optimizing capital composition, and we intend to explore that as well.
Finally, a quick comment regarding ESG and corporate responsibility. Many companies are now just facing the reality that ESG is becoming a business imperative major institutional investors the SEC and communities, we serve as well as existing and potential customers and vendors are all looking to see what steps banks like us or <unk>.
<unk> please.
Please note we are and the very early stages of developing our program, but I am confident doing so will differentiate us from our competitors and drive business our way more to come as we complete our evaluation and determine what steps we will actually take.
So in conclusion as all of you know I joined the team here on February 15th and became CEO and we filed our 10-K on March 19th So when the 70 or so days since coming on board I think it's clear that we have much work underway. There isn't anything we wont consider to make banking with us easier and to drive better results.
<unk> for our shareholders, so whether it's pricing restructuring, adding complementary lines of business or products staffing levels facilities Tech process improvement among others. We are going to explore every option to drive better performance and returns for our shareholders, while providing great customer service and.
And a great experience and also being well known and community oriented we're very committed to increase transparency and we look forward to providing you with more detail as we advance our strategy.
And I promise, we'll be sharing more detail on upcoming calls.
So we're careful with that would you. Please open the lines, we'd be happy to take questions.
As a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key please standby, while we compile the Q&A roster.
Our first question comes from the line of Michael Rose with Raymond James.
Good morning, everyone. Thanks for taking my questions.
Jerry.
Are you.
So maybe we could start with just.
A little bit more on the specifics of maybe what's your plan to do.
The expense side. So obviously, there's been a few voluntary and involuntary retirement program you talked about adding some some ftes. This quarter what would you expect to be able to fund some of the investments that you're going to need to be able to.
To grow the revenue piece of the business with further trimming and expense cuts I'm, just trying to get a sense for.
Basically if this expense level that we saw and the first quarter, which had some benefits from those those voluntary and voluntary retirement program.
And should we expect that to remain relatively stable with some of those investments are funded by additional attrition and cost cuts and other areas. Thanks.
Yeah look I think great question and the timing on that is going to really be probably the bigger issue, which you could see I would say Carlos will give more perspective on this around guidance, but.
Our expenses as he referenced will go up in the second quarter, just from adding B adds to staff that we made plus we're bringing more folks on and amarin and mortgage as well and as I referenced in my remarks, we're looking for additional treasury sales swaps.
And also we're looking for additions and the and the wealth area and one thing we will be doing.
Anyone who is a customer facing that can add profitable growth to our organization.
We are we're going to evaluate those additions along the way now how do we paid for it and that's absolutely one of the things that we will do is looking at each and every area again from a span and layer and perspective from how many of those functions. We think we need to continue to do the way we are today and really.
And making sure that we rationalize the number of folks and every given area. That's not an issue as it relates to look we're going to do another executive.
Retirement plan, but what it is is that we're looking to make sure that we get as many people on our customer facing revenue producing as possible and so we will look at every single expense line as ways to offset that.
Okay. That's really helpful. And then just on the on the balance sheet and heard the commentary about bringing the laundry deposit ratio down to kind of the mid ninety's as I look at the securities portfolio, we've seen and many other banks begin to grow that your duration is around three and a half years would the expectation.
And as you grow the deposit base from here.
Would be to increase the size and the investment portfolio may be take some of that rate sensitivity off the table, just given a lower for longer environment, assuming that's.
And what's going to be and the car just just trying to get a sense for kind of the size and the balance sheet as we as we move forward and what you can do on the security side. Thanks.
Yeah, I'm going to say debt first and foremost while I said were deposits first organization.
We certainly are going to be equally focused on continuing to generate.
Loans and again as I mentioned not only in our footprint and I think a lot of it is what I have said on.
And on the call is brand awareness.
We've got really good people here I think we just need to provide more support around them and so I think raising the awareness that we're out we're going to be active.
I would say and the time that I've been here we've seen some.
Great interest and people wanting to do business with us and so I would expect that we should see some good loan growth, so and frankly, not just in commercial real estate, but and C&I and and on the business side. So I think there and that's something I think you should take into account regarding the size of the securities.
Portfolio I would say just generally speaking I think the securities portfolios and terrific way for obviously for managing rate risk.
And asset liability tool, but you know what we get paid for as organic loan growth and organic deposit growth and you supplement that with certain areas that you need to manage your asset liability mix right and for interest rate risk. So.
Whether we grow that portfolio, specifically or not at this stage and I think it's fairly sizable to be candid and I think if anything you'll look at us continuously looking at ways to restructure that portfolio.
We did a little bit of and optimization and the first quarter that resulted in a gain we're continuing to have conversations about ways to further optimize the portfolio positioning wise it should be it should be to complement it should be fairly stable.
As we gather more deposits they should be or ways to potentially increase a little bit but in the long term.
It's pretty sizable for the for the size of the balance sheet too and the long term you should be dropping.
Okay very helpful and maybe finally for me just on the credit front you guys have a really stout reserve I think I calculate and almost 2% ex PPP.
Our loans at the end of the quarter no provision two quarters ERO and any reason to think based on kind of line of sight and what you see.
Would you expect to have really any material provisions as we kind of move over the next couple of quarters. It doesn't seem like you would just given that reserve coverage and where you stand today.
Yes, I think great question, clearly, it's going to depend on loan production and the composition of the loan production as to what will need to either add to the allowance or as we see opportunities to free up parts of the allowance over the next.
Several quarters, it'll get offset by the production that we intend to put on the books. So in terms of large provisioning I would say that again.
And we feel really confident with the level of provision for excuse me and the level of the allowance where it is right now and I do think debt over the next several quarters Youll.
You'll either see some level of significant growth eating up any excess debt, we have or of course, if it's not there.
It's going to be a problem, but I'm.
And I'm looking at my head of business development on that one by the way just for the benefit of the group.
But I would tell you that.
Really I think it'll get chopped up so to speak by growth as opposed to you know.
Any type of release I think it will be but there will be all.
Opportunities for us to basically say theres a swap between why do we need.
Our reserves on certain parts of the portfolio and that can get freed up and offset against the growth we expect in coming quarters.
Michael apples.
For 10 to mentioned that we keep out of the total reserve about $10 million that is related to COVID-19 that we created and just.
Traditional side of the loan loss provision so taking into account Euro has commented that should be helpful for any potential growth could be reallocated to potential room and zone.
Very helpful. I appreciate you taking all my questions.
Sure.
Our next question comes from the line of Brady Gailey with <unk>.
Hey, Thanks, good morning, guys.
Hey, Brady on how are you doing.
Good.
And so I wanted to start with 60% efficiency ratio goal.
I mean bigger picture, there's two ways to get there you can cut expenses and you can grow revenue.
And I'm sure you'll be looking at both but is there one side of that equation, but do you think there's a real opportunity to get that efficiency ratio down.
Yeah. Thanks for the question Brady, Yes, I think that we.
We've got opportunity to expand both for the NIM and then also on the fee side right. So as you start to think about us on a go forward basis.
And the launch of the mortgage venture that we have at Ameren and mortgage.
That will start producing for us and choose really producing for full quarter Q3 Q4.
And I would expect that all of the deposit initiatives that we're undertaking.
And we will also be able to help right as it relates to widening out that net interest margin.
I would also expect that the growth on the top side and the portfolio would be helpful. But there is no avoiding debt you have to optimize your expense structure and we have to have real justification from a return on investment standpoint of where every dollar is being spent but I would share that we're looking to optimize.
So that we have more dollars to put back into production right I mean so.
It's important to note on one hand, we're going to do a lot of cost rationalization on the other hand, we are going to be looking to put more dollars to work to drive more revenue. So.
As I said, we're going to turn over every rock, we're looking at absolutely everything and it's all on the table and we'll give you guys more clarity on that.
Obviously and in the quarters to come.
Alright, and then.
I think we all understand your plan for New York.
But I wanted to ask about the.
Houston market I mean, Thats also a market that.
And it was obviously not core Florida.
Thoughts on your presence and <unk>.
Houston, Texas.
Look I think the big difference is that Texas is a <unk>.
<unk> gathering franchise for us, we actually see opportunities there, yes, it's highly competitive.
But I would tell you that right now and what we're more focused on us.
The opportunities that we just said to redeploy resources and focus on the core market here, we think there's enormous opportunity. So I would consider that sort of our first step, but please know we do see that and the Houston marketplace that there is a lot of opportunity to.
Spanned both on the deposit and loan side, and we're actually evaluating opportunities there even to expand more on the wealth side.
To complement your and sort of jewelry and important to mention debt.
Texas is not by any means.
New York is a more of a balance.
Vehicle.
Jurisdiction.
Almost $1 billion in the loan portfolio and 600 and on the depository side. So it's more in balance.
Alright, and then you might not want to answer. This next question yet Jerry but when you look at the <unk>.
Profitability of Amarin.
Outside of last year, with COVID-19, where things for all over the place, but you know and Mark had been running.
All of a 65 to 70 basis point ROA.
You have a lot of initiatives here, which is great to hear about but any idea you know longer term.
And what you think the profitability profile could look like at the Irma and in terms of them.
Our away your ROE or however, you want to look at it.
Yes, I would respond by saying, we need to be at 1% or greater on our way and 10% or greater on and <unk>.
Our objective is to be a top performer and we add.
And to build that brick by brick so to speak.
But you know I.
Clearly and focused on getting to those type of numbers with this organization and I think with the team that we have here we can achieve that.
Okay, Great all right. Thanks for all this color jewelry, it's great to hear about your plan here. Thank you.
Thank you appreciate the questions.
Your next question comes from the line of Stephen Scouten with Piper Sandler.
Hey, good morning, everyone.
David Good morning, I'm curious I'm well, thanks, I'm curious, how you're thinking about.
Loan growth maybe over the next 12 to 18 months, if you talked about debt.
Eric City book, you know re <unk>.
Pricing or maturing over that same duration of time and kind of if you could remind us what the size of that loan book and New York City is today I think.
And so it was about 24% of CRE loans, and so just trying to think about the size of the potential runoff there.
Yes, it's a 730 or so million dollar tree book with about 35 million and associated deposits.
In terms of as you start to think about what we said was 12 months to 18 months, we'd expect half the portfolio due to mature much the stated maturities so and.
And obviously theres lots of competition, if people come and solicit into some of those customers, which I'm sure. It will happen our view is that and our and our markets here and also we see opportunity and Houston.
For continued growth I have to say that here's we add if we.
Continue to add that type of revenue producers were currently chatting with I think we'll be in great shape to be easily replacing that loan for.
Any runoff that happens out and New York.
Okay, Great and then.
Maybe thinking about the consumer loan growth briefly thank.
Thank you guys have said you know maybe 10% will be the long term Max there, but can you.
And remind us if there are any new relationships and it was primarily so five but did you you didn't think you were close to adding another relationship there and then maybe the average yield on that new production as well.
On that and Steven has and how is it going.
He has been for the most part and sulfide.
We have roughly $200 million on debt portfolio.
And the contractual.
It's close to the 10% yield more or less effective it tends to be closer to the seven 5% more or less.
And at this point and we.
We are evaluating for.
Potentially other sources.
But this has been the strong growth.
And one so far so.
And sulfide for the most part.
Okay.
Good.
And maybe along with that so those yields coming on at seven and a half and what's kind of do you have anything thats near like a blended yield for your total production and where that's been coming on relative to your average yields.
So.
And this one is not the biggest portion of the of the production.
The blended rate for the for the U S does come in between three 5% to 425% more or less.
Margin basis.
Great Great. Okay, and then maybe just lastly for me you talked Gary you talked about optimizing capital.
What is that I guess look like for you and the near term I mean is there a target capital ratio I know you talked about and competition as well and lowering the cost of capital, but just wondering if you could give some more color on what you know.
That could potentially look like here and the next and I don't know six to 12 months.
Yes, and I think.
We're.
Obviously planning to execute on as much as we can and that buyback program, but as we grow but and also as we evaluate the best places.
We'll continue to look at does it make sense for even continued buybacks or replacement and the structure with what we'll call lower costs.
Capital sources, obviously market conditions right now are excellent and we're seeing pricing that we thought the pricing last year was good.
Clearly, we think as we continue to show improvement in terms of profitability that we too will be able to look and take advantage of some of these lower cost sources that others are getting to you.
And the announcements on a daily basis right now so.
That would be what I would like to try and do it right.
Okay, great great and thanks for the color everyone and congrats on the initiatives and the progress you've made.
Thank you I appreciate it.
There are no further questions. Mr. <unk> the floor is yours for any closing remarks.
Thank you Rocco.
I just wanted to say thank you to everyone for joining our first quarter earnings conference call. We're really excited about the future here at Amarin and we look forward to updating you on our progress towards becoming a higher performing bank hope everyone has a great day take care.
Thank you ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.
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