Q1 2021 First Commonwealth Financial Corp Earnings Call
Good day, and thank you for standing by welcome.
To the first Commonwealth Financial Corporation first quarter and training 21 earnings Conference call.
At this time all participants are in the listen only mode.
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I would now like to hand, the conference over to Ryan Thomas.
Vice President Finance Investor Relations. Thank you. Please go ahead Sir.
Thank you operator, and good afternoon, everyone. Thank you for joining us today to discuss the first Commonwealth Financial Corporation's first quarter financial results.
Operating on today's call today will be Mike price, President and CEO, Jim Rusty Chief Financial Officer, Brian Carroll, Chief Credit Officer, and Jinker bench, our bank, President and Chief revenue Officer.
As a reminder of copy of today's earnings release can be accessed by logging on to F. The banking dot com and selecting the Investor Relations link at the top of the page.
We've also included a slide presentation on our Investor Relations website with supplemental financial information that will be referenced during today's call.
Before we begin and need the caution listeners that this call will contain forward looking statements. Please refer to our forward looking statements disclaimer on page two of the slide presentation for a description of risks and uncertainties that could cause actual results to differ materially from those reflected in the forward looking statements today's.
Call will also include non-GAAP financial measures non-GAAP financial measures should be viewed in addition to and not as an alternative for our reported results prepared in accordance with GAAP. A reconciliation of these measures can be found in the appendix of today's slide presentation, and with that I will turn the call over to Mike.
Hey, Thank you Ryan and welcome to those on the call today.
Start with several first quarter headlines for first Commonwealth financial performance all in all a very good quarter net.
Net income of $39 $8 million yielded 41 first and earnings per share both quarterly records for our company.
Our away was 177% and regardless of credit tailwind, our core pretax pre provision of <unk>.
It was 2% net.
Net interest income was up $1 9 million the $69 $4 million as our borrowers received forgiveness of the 202021 PPP loans. This P. P. P forgiveness helped buoy margin to three 4% our consumer lending categories were.
All strong.
Several of delivering record originations commercial lending.
Rich nations had some first quarter and momentum, but could not outrun liquidity induced pay offs P. P. P forgiveness and lower line utilization from our business customers geographically, our Ohio markets continue to lead the lead the way and growth.
The team did a nice job of further reducing our already low cost deposit funding to help strengthen the margin as well we expect.
Excess deposits to start the slowly burned down the spending increases.
Noninterest income of $27 $4 million comprised 28, 2% of revenue and represents the third consecutive quarter of outstanding non interest income performance.
The current quarter to the first quarter of 2020, our debit card interchange income was up 22% our mortgage gain on sale income doubled versus last year's level. Our SBA gain on sale income was up 170% and our wealth business was up $18 seven.
Percent low.
Low first quarter charge offs of $3 $3 million, coupled with an improving economic outlook and our seasonal model led to a negative provision of $4 $4 million. The associated reserve release represented four 5% of our December 31st loan loss reserves.
Leaving of healthy reserve of $96 $8 million or 155% of total loans X P. P. P as of the quarter and our gross level of nonperforming assets fell and the first quarter by $3 $7 million as well to zero point.
Four 8% or 58 basis points of total X P. P ex PPP loans.
Expenses of $51 $9 million were down $2 $7 million over the fourth quarter as our core efficiency ratio fell to 50 353, 2%.
In short we saw improvement in net interest income noninterest income credit expenses and deposits only commercial loan growth lagged our targeted growth rate.
We expect commercial loan growth to remain somewhat muted and take a bit longer to pick up given higher levels of the liquidity and the overall strength of the permanent market pipelines and started the build and both C&I and investment real estate and we are.
Also expect to see strong consumer and small business loan growth and the second half of 2021 as spending has started the pick up as a result, we believe that we can achieve the upper end of our mid single digit loan growth target for the remainder of this year.
As an aside and round two of PPP lending. The team has helped the 2500 small business and midsized businesses secured of roughly $255 million and funding.
If you recall and round, one and 2020 the team made roughly 6000 loans for $500 million and the first quarter. We also received over $326 million and stimulus payments for approximately 95000 households.
Who bank with us further increasing the bank's excess cash.
We continue to see very strong adoption of our new digital platform with first quarter growth rates of seven 5% and active mobile users. In addition, our customers have displayed strong demand for zelle or person to person payment solution as new the zelle token enrollments are average.
And 2400 of months during the quarter, our digital account opening is up significantly year over year as well overall, we're very pleased with the response from our markets to our new digital platform and solutions.
And lastly on our corporate governance culture, and the team and I are grateful for the leadership and counsel of David Zalman over the past 15 years as chairman of our board of Directors. David has created a strong independent board and a store.
From corporate governance culture that creates appropriate accountability with the management team and it's a privilege all sorts of welcome John Gorny and to the position of Board Chair.
Johns and 37 year banking career at two top 10 U S. Banks includes the C suite leadership roles and technology digital and operations alongside integrating over one dozen banks and of payment processing and acquisition.
John's background makes him uniquely positioned to lead our company at this time.
Now I will turn it over to Jim Jim.
Thanks, Mike.
Microsoft already provided the high level review of our financial results for the quarter. So I'll spend my time, providing some additional detail on our margin.
And of our noninterest expense.
The reported net interest margin or NIM improved from $3, two 6% to three 4%.
New PPP round, two net originations of 215 million in the first quarter almost perfectly match, the 216 million of net round, one PPP loans they were forgiven, leaving.
Leaving PPP balances virtually unchanged at approximately $479 million as of March 31st.
But the forgiveness works to the benefit of the margin as expected.
And Fortunately these effects were telegraphing, the dance and well anticipated and our forecast and by the market.
And he Couldnt help of note that consensus estimates of our spread income came with it approximately $400000 and of our actual figure of $69 $8 million.
However, our consensus estimates for net interest income for the remainder of two of 2021 day.
Don't yet seem to reflect the anticipated recognition of the.
The income from PPP around two loans that we generated and the first quarter.
And of course completely understandable.
To be clear as of March 31, we had $13 1 million and total P. P. P fee recognition remaining from both rounds.
$9 5 million of which is from round two.
Of that $13 1 million.
We expect the recognized $10 $2 million and the remainder of 2021 day.
$8 $5 million of which is from round two.
These forecasts assume 90% of the balances from both rounds are forgiven by the end of the fees.
Okay.
On the other and our core NIM and excludes the effects of both PPP and excess cash.
That improved from $3, two 9% to $3 36 333.
And 336% excuse me and the first quarter, mostly due to improvement and the cost of interest bearing deposits.
And one quarter, we took the only a third of the cost of our interest bearing demand and.
And the savings deposits off from 14 basis points, and 10 basis points and about a quarter off of the call. Some type of deposits from 105 basis points to 75 basis points.
With the growth of non interest bearing deposits. This quarter. The total cost of deposits fell from 17 basis points to 11 basis points.
And some repricing the opportunity remains.
All of which gives us the confidence to raise our core NIM forecast for the remainder of this year.
From our previous guidance of three 2% plus or minus five basis points to 325% plus or minus five basis points.
Our forecast incorporate expectations of the Steepening yield curve that should help blunt the impact of excess cash and provide some measure of margin stability because of this.
The year index.
Core operating expense came in $2 $2 million lower than last quarter to $50 $9 million.
Part of that was due to expected seasonality and some of our line items like health care expense.
And we spend more on the fourth quarter every year.
Where non interest expense was lower than expected this quarter, what line items like Oreo and collection of the repo costs, which together were about half of million dollars left and we expect that they would be.
Also our ability to defer expenses associated with PPP round, two production, which amounted to $428000 and the first quarter.
Along with high vacancy rates and our retail network.
Now that we are fully we opened our branch lobbies.
Mike already spoke to our strong fee income of the first quarter.
I would only add the even with the mortgage income of slowing down a bit and the second half we.
We anticipate being able to sustain the pace of $26 million to $27 million for free.
The quarter and non interest income for the remainder of 2021.
Finally, we implemented our $25 million share repurchase program and the first quarter, albeit at a slow pace with only 28000 shares repurchased in the quarter and the average price of $13.99 and.
And we announced yesterday, a four 5% increase and the dividend.
And with that I'll turn it over to Brian. Thank you Jim.
Management is pleased to report our solid first quarter of credit results underscoring the effectiveness of our underwriting standards and the discipline around our portfolio management practices and the strength of our credit culture.
While we see the light at the end of the pandemic tunnel. The final episodes of the mini series are still being written and.
Management continues to be prudent and reasons as we navigate the economic recovery and the reopening of our local academies, let's.
Let's turn to the numbers.
Our Q1 and commercial delinquencies were quite low at 0.03%, reflecting on our hands on and relationship management approach to commercial lending.
Our consumer delinquencies were well behaved and two 7%.
This is due to our strategy of early calling buyer of borrower's assistance team as well as.
The stimulus checks and are really tax refunds.
Criticized loans decreased in Q1 by approximately $31 million to $272 million reinforcing my earlier comment that we are seeing the light at the end of the tunnel.
Hospitality continues to represent the largest segment within criticized loans as well as the largest portion of loans on deferrals.
On a case by case basis, when granting deferrals, we have negotiated a variety of structural improvements, including increased recourse debt service reserves addition of collateral equity contributions and additional covenants.
Let me say that we are hearing from our customers that the true.
Trends and occupancy have improved.
And are expected to continue to improve reflecting increased vaccinations.
Borrowers are seeing increased leisure travel.
Increased bookings for both weddings, and some business travel, including small corporate events contribution from food and beverage has increased with the lifting of certain restrictions.
We are pleased debt into period net non performing loans totaled $54 million and improvement of approximately $3 7 million.
Our nonperforming loans as a percentage of total loans, excluding PPP fell 2.80% down from eight 6% at year end.
Reserve coverage ratio increased to a healthy 192%.
Similarly, nonperforming assets as a percentage of total assets fell to five 5% for the quarter down from six 2% at year end.
Net charge offs were at the low end of our internal quarterly range at approximately $3 $3 million.
Quarter to date and net charge offs, the annualized what 0.21% excluding PPP.
Now, let me provide some color on the provision and our reserves for the quarter.
First let me remind you that we adapted T. So on December 31st 2020.
We utilized certain Moody's forecast of key economic indicators, including GDP and unemployment and our internal calculations.
The provision for the first quarter of 2021 was the negative $4 $4 million due to changes and changes relating to unfunded commitments lower loan outstandings and certain portfolios improvement and quantitative input metrics and improvements.
And several qualitative factors.
Overall, we are well reserved and $96 $8 million reserves as a percentage of total loans at quarter and were 144% and 155% excluding PPP and.
As I mentioned last quarter management sees the potential for tailwind towards the back half of 2021 fewer.
Future releases will be predicated on a number of factors, including loan growth credit metrics and continued improvement and economic conditions.
Now, let me turn it back to Mike for Q&A.
Hey, Thanks, Brian and operating operator questions.
Thank you as a reminder, so ask the question you will need to press star one on your telephone and so we can draw on your question first of the pound all harsh.
Based on by wider become part of the Q1 the aerostar.
Your first question comes from the line of Steve Moss of B Riley secure.
Please go ahead of your line.
And good afternoon.
Good afternoon and David.
Good afternoon, Mike and maybe just starting off with loan pricing here kind of seen just kind of curious as to what you've seen for competition and your markets I noticed your yields ex PPP were stable quarter over quarter.
But curious how that dynamic going forward here.
And just looking at our net production.
And I think it was pretty flat from quarter to quarter, maybe a little pressure on mortgage loans.
Installment loans commercial fixed was pretty flat.
Okay.
But tell of the tape is that fair, yes, that's pretty much as we are on the commercial loans are coming on and the low threes, that's been pretty consistent and part of the story for us fees as the replacement yield story is getting better it's not hasn't gone away, but in the fourth quarter, we had negative replacement yields of 62 basis points negative.
And this quarter was only negative 20.
And so that's playing itself out.
Like kind of like we thought it would and getting us closer to neutrality and then.
And can stabilize the loan portfolio yield that's why this quarter and you saw the name of improvement the loan portfolio was relatively unchanged actually was up one basis point, that's not statistically significant and was really on the deposit side, where we had improvement.
That's helpful.
That is helpful and exactly what I was looking for and then just in terms of you know stick.
Sticking with the margin and the balance sheet here. Just you guys added securities. This quarter kind of cash still went up just kind of curious on the rates of your purchases this quarter and maybe the potential for additional purchases and the upcoming quarter.
Yeah sure so it changed quite a bit over the quarter actually.
Beginning of the first quarter, we were buying securities.
And the low ones, a little over 1% and most of it we buy and it's plain vanilla MBS, we don't and you look at the Securities portfolio is the place where we wanted to take risks so it's pretty plain vanilla.
But those yields are and the low ones.
And of the first quarter reaction or even the buying securities because of the steepening of the yield curve.
Uh huh.
And 2%.
But the yield curve as well.
And it's flattened out with it since then and that was on the 10 years couple of a higher than it is today and it's come back a little bit.
And our preference generally is not to extend the duration of the securities portfolio. So we have been trying to buy securities and the 400 of five year duration.
But not really going to you on that.
So those yields have come down south of 150, and the last week or so.
You asked about the securities, we're probably on general and.
With that much cash sitting around and we do.
I expect the buy more securities going forward, we want to make sure that we maintain sufficient liquidity for our customers and they spend that money and obviously, we anticipate some good loan growth. So we want to make sure. We can take those funds and deploy them into profitable loan growth, which is of course, our first choice.
But even with all of that we will probably increase the securities portfolio somewhat over the course of the year.
Okay.
That's helpful. And then just one last one from me in terms of expenses here.
Net nicely quarter over quarter, just kind of and I apologize if I missed this just kind of curious as to how to think about expenses for the upcoming corn and and if there's any maybe of PPP impact this quarter.
And I don't know that the guidance has changed the since Mike of 52 to 53.
Jim I don't know if you want to add any color to that yeah.
Kind of seems to me and the rate guidance and we looked on the consensus forecast and didn't see and you're reading about paint that guidance.
We think of the benefit of a few thickness and the first quarter.
You were asking about Fas 91, deferrals on PPP and.
That depth of the total hours, giving earlier of $428000 that's on the rig.
Houston, and AED 428, and the first quarter, we have kind of anyone of accruals every quarter of production, but that was really associated with PPP around too.
And so.
And that was purely rate just from the first mortgage production from COVID-19.
Okay, great well nice quarter and thank you very much for all the coal.
Thank you.
The next question comes from Tim from Jones of RBC capital markets.
Please go ahead your line of Switzerland.
Hey, good afternoon guys.
Jim I appreciate the the.
The core NIM now that's.
It's great you guys are getting that to 325, maybe just a little detail on the liability side. What do you have maturing on your time deposits and where are you currently pricing and that.
Yeah, we have.
I'm actually glad you want to have some detail I'm happy to share with you.
$320 million of Cds maturing and the remaining three quarters of it here.
And that will of Cds, and the currently yielding 60 basis points.
So those are maturing of the current offerings, we have the rack rates are not very different from the other banks and our area.
CD pricing and for time deposits of different terms tends to be fairly middle of the attack, but of new 12 months C D and really close to 10 basis points.
And again.
Neither of that hasn't moved in a while and that's pretty middle of the pack for our market.
And what we are experiencing our rollover rate.
And that are anywhere from one half the two thirds of the maturing Cds roll over.
So that's 60 basis points of CD three on $20 million for the remainder of this year. We also have and addition to that another $81 million of money market accounts, the had a guarantee and time on them.
And those are actually yielding one one and 4% and those are going to be price and the remainder of this year as well so they really hit from repricing opportunity overall, when your cost of deposits of 11 basis points.
That's not a negative carry versus the interest on excess reserves of the fed rate. So that's getting the parity with the 10 basis points, we get from the fed it's not a drag on earnings anymore, but theres still some opportunity to bring it down even further.
Right right I guess.
Okay.
And so.
And with Cvs at.
And at 10 basis points are they're actually people rolling it over into a C. D at 10 basis points versus just you know.
Putting in a savings account.
And I see it.
Every season and thicker fit and every interest rate environment. There is always a group of C. D's debt when they get the maturity of just on a roll.
And without any action by the power of at all of that just the crossover for every bank and that's continuing and so.
And in this environment right now there's almost no one in the market area of offering any kind of deposit specials at all and the remaining hold out for some of the banks and we're still operating higher rack rates is finally broke those down as well so there's.
If you want of time deposits of the customer of theirs.
Not many places where you can go.
Right right I guess, then if we look into next year.
Is it possible that we could see.
The cost of deposits like five to 10 basis points.
Oh yeah.
Yeah, I mean, we're 11, now total and Niv pilgrim and too right. So that helps the overall mix as well, but yeah. We're letting the sports now you can see that on the five to 10 Bucks a foot range for.
For the rest of the right.
And you are pretty much limited on what you can do on the borrowing side right.
That's right we have some borrowings that are gonna roll off and May I think theres, a $50 million of <unk> borrowings.
And that's gonna roll off in May of.
But the windows of price, it's not worth and prepayment penalties and so we just let it ride and lateral off but that will come up here and on.
Excellent and that'll help the net.
Well.
Got it and.
Just one last one just on this margin.
If the 10 year stays where it is currently do you expect your overall core loan yield to increase or just remained stable.
Probably likely to remain stable I mean, the Steepening has helped us and and and I think we've been pretty successful and originations and getting the most proud of and Canada commercial originations and getting floors and.
For our customers as well of those ticked up quarter over quarter. So I think we've been pretty successful on that but given the steepening of yield curve, given where the tenure is right now.
We're probably looking at a yield stability and the loan side.
Great. That's all I had and the yet and this is a nice print on the for the quarter. Thank you.
Thank you.
Your next question comes from Russell Gunther of D. A Davidson. Please go ahead of your line is open.
Hey, good afternoon guys.
Good afternoon.
I wanted to follow up Mike on your commentary about the organic growth outlook of lot of good color and detail there.
And the triangulate the progression of the consumer strength and and when that Baton gets passed to the commercial does your mid single digit ish guide contemplate commercial growth contributing.
And the positive momentum or is the mix going to be more common consumer weighted near term.
Okay.
I I believe we could cross the Rubicon kind of late and the second quarter or in the third quarter.
So we're satisfied with production and the last two quarters, it's just the liquidity of the <unk>.
<unk> and the line usage and the excess liquidity that created some pay offs kind of out brandis, a bit but I expect the commercial side the ramp up somewhat so I think we could have.
Both of them Yolked and by the second half of the year and moving in the and the same direction and the small business lending, we really set some records and the first quarter with production SBA hits. The fee income we have good momentum there indirect lending.
Good momentum, we just need cars and houses.
The inventory shrinkage from both and then consumer lending branch base <unk>.
<unk> Joe pool has just done a great job I mean that number is up probably 30% year over year and that's mostly sales related and then of course mortgage most of the mortgage gets converted into gain on sale income.
And does it is not really hitting the balance sheet right now so I feel good about the consumer side and the commercial side has always been the big engine for us and we.
We expect that the kicking in the next couple of quarters.
Thank you Mike, Yes, it's very encouraging on the organic growth outlook and then just switching gears last line of questions would be on the fee income side and also encouraging to hear that 'twenty six 'twenty 7 million number on a quarterly basis. Despite mortgage coming down could you guys just spend a minute and in terms of what you think.
The drivers going forward will be of of that's the income strengthen and <unk>.
Perhaps a comment on the SBA gain on sale of specifically if you could thank you.
And I.
Just a couple of comments and then Jim can fill in and perhaps Jean as well, but just we really haven't seen a lot of and swap fees.
That could create some tailwind and has it.
Mortgage is tapering somewhat but.
It remains strong and the second quarter of SBA loans, we expect to have a nice quarter and have a good pipeline there.
On our brokerage business and trust business.
And just get better every year interchange.
It's strong.
And so you'll see my might see a little paper and mortgage.
Jim or obtain any color there any additional color.
I think you hit the high points Mike.
The other.
The numbers reflect some tapering of the mortgage income that we anticipated and even higher from mortgage banking income will continue on its current trajectory, but where do you expect that just a little bit and the Jane and I'll hand, it off to give free of any of any of the Colorado.
I think as Mike was mentioning.
It's been a very good quarter for SBA.
And we expect that to just get better and the.
SBA pipelines are very strong so that won't appear on the balance sheet the.
You know, 60% or more of our SBA business comes from referrals from small business lenders of corporate bankers. So we're happy either way.
So the pipelines are very strong and S. P. A and the gain on sale and SBA has been stronger than I've ever seen it you know 11, and 12% so and feel good about and I feel good about the noninterest income.
Thank you all for taking my questions.
Thanks Russell.
Your next question comes from Frank Schiraldi of Piper Sandler. Please go ahead. Your line is open.
Hi, everyone.
Just wanted to ask about sorry, if I missed the boat in terms of share repurchases.
Many of the new program.
But just wanted your appetite there given the move in.
The share price.
Tim.
Yeah, and we're happy to have the program and the authorization put that in place.
We had the.
Looked at the price levels, where you wanted to buy and we wanted to be more aggressive and all of $14 and that's why the average price of $13.99 for the.
And the share price coming up a little bit.
And we had tapered off first purchases, but we'll revisit that.
First it's not so much the sometimes people talk about the calculation of the earn back period across the food.
And the purchases first of the question of the generating excess capital and the best use of that excess capital. So the.
The share repurchase and we'll continue the senior and might even pick up from here.
Okay.
And then.
Lastly, on the and I know you guys touched on this in terms of the potential for releases going forward, but in terms of the.
The reserve to loan ratio and just wondering your thoughts on on where that.
Could trend to as some more uncertainty maybe it comes out of the environment.
And.
First the kind of think about where we were early in 2020 before the pandemic or what's the best way to think about where that could sort of stabilized.
Bryan and thanks.
Thank you for your question.
So we continue to be disciplined and prudent and the way we reserved and we look at our loan growth, we're going to look at our charge offs are quantitative and qualitative components of our model, including our high risk model, our high risk portfolio and then we will potentially bring the reserves down dependent on the air.
Economic outlook.
And we also know debt, we had almost $13 million and our high risk portfolio at year, and we've reduced debt to about $6 million. This quarter. So we brought the number down.
System with the improvement and the economy, but we'll continue to look at it.
And as the picture gets clearer we will continue to dial in to what is an appropriate level of reserves for our company.
Okay.
I mean, it's always hard to say, but you got the the high risk portfolio. You have is is that.
The actively being looked at in terms of do you see the potential to maybe move some of that off balance sheet. This year I'm just trying to get a sense. If there's any reason to expect anything other than very normalized loss rate.
For the for 2021.
Now, we give you the high risk portfolio and the slide deck and it's hard for you to tease out of it is that the retail portfolio, we reduced the reserve associated with that the high risk portfolio cut it more than half and.
And so we're seeing great improvement and the retail side of our portfolio of senior living and we've got one problem, we're dealing with energy restaurants, we watch them closely but we brought those reserves and so.
She hated the COVID-19 related reserves down purposefully, because we are seeing improvement and that portfolio.
Okay alright, thank you.
Thanks Frank.
Your next question comes from Matthew Breese of Tiffany.
Please go ahead your line is one of them.
Hey, good afternoon.
Good afternoon.
Hey, Mike just just on the loan growth outlook, you know auto.
Auto loans and there's been a strong driver of strong component consumer growth recently, we've heard more recently of some chip shortages are in the area for I think particularly for the news car new car sales.
Sales just curious if youre seeing any impact there and as you look towards the end of this year if that could impact you.
And your ability to put new auto loans on the book, maybe give us a sense for the mix between new and used auto.
Hey, Jay and why don't you handle this one.
Thanks, Mike. Thank you for the question.
We are predominantly a newish used car lender.
But the chip shortages part shortages generally are affecting used cars as much as they are new cars.
And we've had a very good first quarter and issued.
And we're gonna have a good April, but I think it's going to and.
I think it's going to mute on our growth of a bit over the next couple of months I think we'll have I think it will be.
It will be good but it could have been great.
Supply is definitely being outstripped by demand.
Got it okay. Okay.
And I appreciate that.
And then Mike just acknowledging the size of the balance sheet relative to the $10 billion threshold and Durbin.
I know M&A is something that's been brought up before just just curious how conversations have gone and are they picked up or not and you know do you think of the M&A and your ability to acquire is something that could happen this year.
We are very cognizant of the 10 billion and indeed, where we feel like we're prepared certainly from an enterprise risk.
Perspective and.
But on the acquisition side I mean, ideally you either do something and find a way to stay under it for a year, which pushes it out and.
2023.
Or you do something larger and theirs.
And there's nothing.
Nothing imminent right now theres, a lots of conversations out there but.
I doubt that that's significantly different than a like sized peers, but we also feel like with the impact of Durbin and it's incumbent upon us the find other sources of fee income to compensate for the loss of Durbin and scale other businesses over a period of time and we feel like.
You know, we've de novo and our way into a lot of things.
And we've been successful and the team on the operations and on the business development side of executed flawlessly, whether it's mortgage indirect enhanced consumer lending SBA. We just have a good team that can build things out. So we'll try to help you both ways. We tried to do it thoughtfully and in terms of staying on.
And this side or going decisively over and then we're cognizant of.
Fee income as a percentage of revenue is important to us we've made great strides here of the last decade.
With lots of investment and we look the continue to grow those are.
Noninterest income and fee business.
Got it okay.
Yeah. The last one from me just on the digital banking front.
And it feels like that is a a big push for all banks are especially on the back of COVID-19 could you just give us a couple of areas, where you feel like on the digital banking side. You know you are different or set of part or farther ahead on the curve and then your peers.
Yeah, a couple of places and I think we're getting very good of digital account opening and so.
Percentage of over overall, new deposits I feel like we've just put in a new Treasury management platform.
So we can play bigger than perhaps some of our community bank peers.
Certainly we're not doing.
Foreign lock boxes, and things like that the bigger banks do but nevertheless, just good utility there I think.
Our user interface and our customer experience.
From the mobile because the online to the tablet.
It's very contemporary or use the friendly has personal financial net financial management tools that can help people with budgeting and other things and this is the fund part of our business to return means and our relevance and I also think we can.
We could finance the digital with the community Bank brand.
And in a way that.
The the bigger banks always don't have the win I think you can like local and get a good digital experience and I have the expert on the line, nor and Montgomery, who is our CIO norm do you want to add anything to that.
Okay.
I I would just add the last year, we set ourselves up well by changing our digital platforms as Mike indicated on both the consumer side on the business side. So we are you know really ready to to grow in the areas with the latest solutions.
Thanks norm.
That helpful very helpful.
It's all I had Mike Thanks for taking my questions. Thank.
Thank you.
And there are no for the questions at this time I'll turn the call back over to Mike price, President and CEO for closing remarks.
Thanks, again, and we appreciate your interest and our company, we look forward to being with the number of U.
Over the next quarter or two we appreciate the on trade to a terrific investors and just thank you for your efforts and your diligence and following first Commonwealth.
Yeah.
And this concludes today's conference call.
Thank you for participating you may now disconnect.
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