Q2 2021 Banner Corp Earnings Call
Thank you rich.
First of all I Hope you and your families are well as we all continue to battle the Covid virus, it's variance and its effects on our communities and the economy.
Today, we will cover for primary items with you.
First I will provide you high level comments on banner second quarter performance.
Second the actions banner continues to take to support all of our stakeholders, including our banner team our clients our communities and our shareholders.
Joe <unk> will provide comments on the current status of our loan portfolio and finally, Peter Conner will provide more detail on our operating performance for the quarter.
I wanted to begin by thanking all of my 2000 colleagues and our company that are working extremely hard to assist our clients and communities. During these difficult times.
Banner has lived our core values summed up is doing the right thing for 130 years.
It is critically important that we continue to do the right thing for our clients our communities our colleagues our company and our shareholders to provide a consistent and reliable source of commerce and capital through all economic cycles and change events.
I am pleased to report that is exactly what we continue to do.
I am very proud of the entire banner team that are living our core values.
Now, let me turn to an overview of our second quarter performance.
As announced banner Corporation reported a net profit available to common shareholders of $54.4 million for $1.56 per diluted share for the quarter ended June 32021.
This compared to a net profit to common shareholders of $1.33 per share for the first quarter of 2021 and 67 per share for the second quarter of 2020.
This quarter's earnings were impacted by the allowance for credit losses recapture a continued inflow of liquidity coupled with very low interest rates are.
Our strategy to maintain and moderate risk profile.
Continued good mortgage banking revenue and production and the acceleration of deferred loan fee income associated with the SBA loan forgiveness of paycheck protection loans.
Peter will discuss these items and more detail shortly.
And your attention to pre tax pre provision earnings and excluding the impact of merger and acquisition expenses Covid expenses gains and losses on the sale of securities and changes in fair value of financial instruments earnings were $57.3 million for the second quarter of 2021.
Compared to $48.6 million and the previous quarter and an increase of 18%.
This measure I believe it is helpful for illustrating the core earnings power of banner.
Second quarter 2021 revenue from core operations increased 6% to $149.8 million.
Compared to a $141.4 million and the first quarter of 2021.
We benefited from a larger earning asset mix a good net interest margin.
Solid solid mortgage banking fee revenue good expense control and the previously mentioned acceleration of deferred loan fees associated with PPP loans.
Overall this resulted in a return on average assets of 136% for the quarter and a 6% increase and tangible common shareholders' equity per share compared to the second quarter of 2020.
Once again, our core performance. This quarter reflects continued execution on our Super community Bank strategy, even with the challenges of a pandemic that is growing new client relationships, adding to our core funding position by growing core deposits and promoting client loyalty and advocacy.
And through our responsive service model.
To that point, our core deposits increased 16% compared to June 32020, and represent 94% of total deposits.
Further we continued our strong organic generation of new client relationships.
Reflective of this solid performance coupled with our strong tangible common equity ratio, we issued a dividend of <unk> 41 per share and the quarter and repurchase 250000 shares of our common stock.
Our branches are fully operational and we have begun phasing and a return to the workplace policies that provide a safe and flexible working environment for our employees and clients.
And provide support for our clients through this crisis, we made available several assistance programs.
Banner has provided SBA payroll protection funds totaling nearly $1.6 billion.
For approximately 13000 clients.
Also we made an important and $1.5 million commitment to support minority owned businesses and our footprint a $1 million equity investment and Broadway Federal Bank now City first bank the largest black led depository financial institution and the United States.
Significant contributions to local and regional non per nonprofits and have provided financial support for emergency and basic needs and our footprint.
Let me now turn the call over to Jill to discuss trends and our loan portfolio and her comments on banner's credit quality and loan portfolio.
Joe.
Thank you Mark and good morning, everyone and.
And you read in our press release Banner's credit metrics have remained stable as we continue to work through the economic impact of the pandemic.
While we acknowledge the potential for future Covid related business interruption due to the pace of spread related to the Delta variant as of June 30, and I'm happy to note that all of our markets are currently fully reopened and business sentiment is positive.
And as delinquent loans as of June 30, and represent 0.24% of total loans, a decrease of 19 basis points from the prior quarter and compared to 0.35% as of June 32020.
Non performing assets are comprised of nonperforming loans of $28.8 million down $6.5 million for the quarter and Oreo and other assets of 780000 and represent and nominal 0.20% of total assets.
Adversely classified loans represent $2.8 3% of total loans as of June 30 down from $3, 1, 1% and the linked quarter and compared to 345% as of June 32020.
Improvement and adversely classified loans and the quarter reflects the continued success. Our special assets group has had and the banking are classified relationships as well as risk rating upgrades as more of our borrowers have returned to more normalized operations.
Similar to last quarter, the upgrades were spread across commercial and small business relationships as well as both owner and investor commercial real estate.
As of June 30th our ACL reserve totaled $148 million or 153% of total loans down from $1.5 7% reported as of March 31, and compared to 166% of total loans as of June 32020.
And excluding loans held for sale and the Paycheck protection loans are current ACL reserve continues to provide significant coverage at 168% of total loans, 481% coverage of nonperforming loans and 627% coverage of delinquent loans.
Non losses during the quarter were negligible at 538000 and were fully offset by recoveries.
Based upon the continued improvement and asset quality strong economic indicators and all of our markets finally, reaching vaccination rates that provided for business is to fully reopen we released $8.1 million of our reserve for credit losses as of June 30th and an additional $2.2 million and our reserve for unfunded loan commitments.
This follows a combined release of $9.3 million as of the prior quarter $8 million for credit losses, and $1.3 million for unfunded commitments.
And I have said before we built our reserve early and the pandemic due to proactively downgrading credits that were being impacted by the economic downturn.
Banner's reserve methodology remains consistent and conservative our future provisioning will be based upon a combination of the rate of loan growth changes and the portfolio mix and risk ratings and current economic indicators.
And 1 of the pandemic induced credit cycle is not over and we are monitoring the impact that variant strains may have on operating conditions across our footprint in light of the current market conditions as well as our loan portfolio's performance to date. There was there a recapture is considered appropriate and the reserve for credit losses at 1.53.
Percent of total loans remains strong.
Looking at our loan book portfolio loans net of the Paycheck protection loans are down 3.6% year over year. However, I am pleased to report that as of June 30th banner reverse the 5 quarter trend of declining portfolio loan balances growing $198 million or 2.3% net of P. P P and.
And the quarter or 9.2% on an annualized basis.
This is in spite of the payoffs that continue within the residential and consumer real estate portfolios.
Portfolio loan balances for investment.
Portfolio loan balances held for investment and are now flat when compared to year end 2020 balances.
Looking at specific product lines and excluding the P. P. P loans C&I loan totals and the quarter are up 2.6% or 10, 3% on an annualized basis and.
In the quarter and we did begin to see line utilization increase up 1% quarter over quarter and also saw increased loans loan closings across our footprint I will note. However that commercial credit line utilization remains down 3% when compared to June of 2020.
Residential mortgage loans outstanding continue to be impacted by the refinance market and are down 2.7% for the quarter and 22% year over year.
The refinance market has continued to reduce our home equity credit as well down 1.5 per cent for the quarter and 11, 6% year over year.
As discussed last quarter, both the commercial construction and multifamily construction totals are down 8.1% and 3.8% respectively for the quarter. This decline continues to reflect the conversion of construction loans to permanent CRE pools. Upon the completion of construction with the balances now spread among the commercial real.
State and multifamily bucket.
The residential ADC portfolios continue to show strong quarter over quarter growth as the housing market remains very strong and the markets we serve.
<unk> continues to outstrip the supply of available homes and almost all of the markets we serve.
All of activity uncompleted homes is robust and single family housing and affordable price points continues to be under supplied.
Our total residential construction exposure is now 6.3 per cent of our portfolio and when we include multifamily and commercial construction and land. The total construction exposure is for 14, 2% of total loans.
The commercial and commercial real estate pipelines continue to build and we still anticipate that commercial investments will pick up and the second half of the year as borrowers begin to make delayed capital investments and build inventories. However, we recognize that many of our borrowers continue to have a significant amount of excess liquidity on hand, and we believe they will.
Utilize much of that on balance sheet liquidity before utilizing their lines of credit and or closing on new borrowings brief.
Briefly touching on asset quality loans rated substandard declined 12, 4% and the quarter or <unk> $38.8 million up from $28.7 million or 8.4% reported for the linked quarter.
Approximately 75 per cent of the adversely classified assets continue to be associated with the at risk segment with nearly 40% of the total adversely classified credits remaining within the hospitality industry and.
Next largest segment of adversely classified loans as recreation and leisure, which accounts for 20 per cent of the total.
5 per cent are located and health care related industries down from 10% restaurant and foodservice relationships account for 5% and another 5% are located within the retail book the.
And the balance of substandard credits are not located within and at risk segment, nor are they concentrated in any 1 business line.
I will wrap up by stating what you've heard before our credit metrics continue to be strong reserves for credit losses remain robust and capital levels continue significantly in excess of regulatory requirement banner.
<unk> loan portfolio continues to be reflective of our moderate risk profile and we are well positioned for the future and with that I will hand, and microphone over to Peter for his comments Peter.
Thank you Jill as discussed previously and as announced and our earnings release.
We reported net income of 54.4 million and $1.66 per diluted share for the second quarter compared to $46.9 million or $1.33 per diluted share and the prior quarter.
23% increase and per share earnings was a result of an increase and net interest income driven by PPP loan forgiveness, and increase and earning assets and the recapture of the loan loss provision.
For revenue, excluding gains and losses on securities and changes in fair value of financial instruments carried at fair value and increased $8.4 million for.
And the prior quarter, primarily as a result of and acceleration of PPP loan forgiveness activity and.
Growth and average core deposits.
For expenses, which exclude M&A and Covid related expenses decreased 380000, due primarily to lower compensation costs, partially offset by higher professional services expense.
Turning to the balance sheet total loans decreased 357 million from the prior quarter and as a result of a $492 million decline and SBA PPP loans.
And a $63 million decline and loans held for sale, partially offset by an increase and held for investment loans.
Excluding PPP loans and held for sale loans portfolio loans increased $198 million due to an increase and portfolio loan production higher.
Higher levels and line utilization and slower prepayments on fixed term loans.
Held for sale loans decreased due to an acceleration and the pace of multifamily bulk loan sales.
And fewer residential mortgage loans for sale carried over quarter and.
And in core deposits increased $122 million from prior quarter and due to a combination of growth and average deposit client balances.
And new client acquisition.
More significantly average core deposits grew 713 million and the second quarter as much of the deposit growth occurred at the end of the first quarter.
Time deposits balances declined by $24 million from the prior quarter and ending at $889 million as higher cost Cds are rolling over at lower retention rates.
Turning to the income statement.
Net interest income increased by $9.9 million due to a combination of higher loan yields from an increase and PPP loan forgiveness activity.
And a $675 million increase and average earning assets as a result of core deposit growth.
And to the prior quarter loan yield increased 27 basis points due to the acceleration of unamortized loan processing fees on forgiving SBA PPP loans.
Excluding the impact of loan forgiveness prepayment penalties interest recoveries and acquired loan accretion and the average loan coupon declined 5 basis points from the prior quarter.
While the pace of core loan yield decline has slowed and modest headwinds continue as new fixed rate loans are originated at lower rates and adjustable rate loans with floors mature.
Total average interest bearing cash and investment balances increased by 793 million over the prior quarter and funded by deposit growth and PPP loan payoffs.
And while the average yield on a combined cash and investment balances declined 7 basis points.
Due to a larger mix invested and overnight funds at low rates, along with elevated prepayments on higher yielding mortgage backed securities.
Total cost of funds declined 4 basis points to 17 basis points as a result of lower deposit and borrowing costs.
Total cost of deposits declined from 11 to 9 basis points and the second quarter due to declines in interest bearing retail deposit rates and ongoing repricing.
Missions.
Total noninterest income declined 1.9 millions and the prior quarter core noninterest income excluding gains on sales of securities and changes and securities carried at fair value declined $1.5 million.
Deposit fees increased 819000, and day to an increase and card interchange income and higher service charges on deposit accounts.
Total mortgage banking income declined by $4 million due to lower spreads on residential mortgage loans sales.
Within residential mortgage production the percentage of refinance volume declined to 34% of total production.
And from 246% and the prior quarter multi.
Multifamily loans gain on sale income remained even with the prior quarter.
Miscellaneous fee income increased $1.7 million, primarily due to gains on sale of close branch locations.
Total noninterest expense declined 900000 and from the prior quarter exclude.
Excluding merger costs and pandemic specific operating costs core noninterest expense declined it declined 380000.
Salary and benefit expense declined by $2.9 million, primarily due to declines and severance expense payroll taxes and deferred compensation.
Merit related increases to salary expense, we normally experience and the second quarter were offset by reductions in staff that were effective at the end of the first quarter.
The credit for capitalized loan origination costs decreased by 928000 in second quarter due to a significant reduction and SBA PPP loan production as the final phase of the program came to a close at the end of the first quarter.
Information services declined 600000, primarily due to reductions and former Islanders banks and SBA PPP loan related data processing and software expense.
Professional legal expenses increased $1 million, primarily due to a settlement of a recent litigation matter.
Miscellaneous expense increased by 647000.
Due to increased loan expenses and portfolio loan production compared to the prior quarters.
Merger costs declined 492000.
<unk> the completion of the Islanders bag subsidiary merger and to the banner Bank subsidiary and the prior quarter.
And closing the company is well positioned for rising rates with a low cost granular core deposit base with ample on balance sheet liquidity to support renewed log demand.
Core operating expense declined as a result of prior branch consolidations and streamlining of administrative and support function costs.
As Mark noted as part of our ongoing capital management the company repurchased 250000 shares during the quarter.
This concludes my prepared remarks Mark.
Thank you Peter and Jill for your comments and color on the company's performance for the second quarter that.
That concludes our prepared remarks, and I Lee we will now open the call and welcome your questions.
We will now begin the question and ankle fossil card.
Ask a question you May press Star then 1 on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing Ricky.
For reply. Your question, Please press star and kill.
Our first question today will come from Andrew Liesch with Piper Sandler.
Hi, everyone. Good morning.
Good morning, Andrew.
Just 1 quick question al on the loan growth certainly encouraging this quarter and.
And your guidance had been for.
For balances to be flat through year end is that still a good a good guidance to be using and what other things are you hearing from your clients or anything specific to make you think that growth will come back or we'll continue continued to accelerate from this point.
Good morning, Andrew This is Jill yes, we're still holding to the flat guidance for 2021 for the balance of the year, although given the uptick we saw in the line utilization that started this quarter and the positive.
And this sentiment we have everybody being reopened we do believe that we will have low single digit growth for the balance of the year, which is what will get us to a flat.
Landing for 2020, 1 after the P. P P paydowns.
In terms of what we're hearing from our borrowers.
You know it is very positive in our markets because we finally just reopened so everyone's feeling really good about that.
Now that has to be countered a little bit with what we are seeing in terms of the delta variant and.
Discussions now about masking up inside and and where does that take us, but you know as we ended the quarter things are feeling good in the markets we serve.
Got it and then on the and the presentation on the business.
I believe it's page.
22, with a $23.7 million remaining of unamortized fees.
And you guys have any sense on the timing on how that's going to be realized.
It will all be done this year of booms and felt any spillover into 'twenty 2.
Yeah. This is Peter I can address that so yeah. We are it's really a function of the pace of her of remaining loan forgiveness on the on the balance of the $825 million.
Existed in the portfolio at the end of the quarter.
Given that what we what we did and the second quarter, we forgave.
$558 million, so we had a big big quarter of forgiveness, and that'll slow down a bit going into the third quarter and.
And I would anticipate based on what we're seeing early and this quarter that we'll see 30% to 40% of that $825 million remaining balance get forgiven and Q3, and then it will tail down and.
And the gradual a soft landing for some core amount that won't get forgiven, but I would anticipate that kind of gradual decline and the pace of forgiveness quarter to quarter as we go out through the rest of this year and there'll be some small residual amount of the PPP portfolio that won't get forgiven and will.
And ultimately term out at their 5 year maturity.
Got it.
Okay.
Very helpful. Thanks for taking the question both cut back.
Thank you Andrew.
Our next.
<unk> comes from Jeff <unk> with da Davidson.
Thanks, Good morning.
Morning, Jeff.
And just checking in on on the expenses I don't think of kind of check and given the branch consolidations and some of the administrative.
Got Ya Jacquard and.
And I guess, excluding kind of the comp adjustments and kidney.
Kind of get us to where you sit on expenses and are there some.
Hmm.
Some detail that you could provide in terms of what I don't know if its a.
And when a hold to a run rate or cash.
Looking at the catalysts ahead idea some of those cost savings that you've had in the past has that been achieved and now it's just a we're back to <unk>.
Hoping to moderate expense growth.
Thanks.
Yes, David.
Peter So yet we.
Noted in my prepared remarks, we had some elevation in our professional services line item this quarter principally due to settlement of some some recent litigation that emerged late last year.
And then we still had some.
What do they call the tail of severance and some restructuring costs related to some recent downsizing.
As we go into the second half of this year and what we continue to.
Mine and some opportunities for reduce expenses, both and our branch consolidations and and.
And staff related.
Costs at all that we have already.
FX hit, but we will have some benefits to the run rate.
We got the rest of this year and if we were to look at our $92.
For a million dollar expense number and in this quarter.
There is somewhere around 2 to potentially $3 million.
Out of that that would represent our core run rate.
So I kind of use as a benchmark, but then there's always some some volatility for the timing of professional services cost and some ongoing restructuring costs that get layered on top of that number but.
That's how I'd characterize it.
And so we're getting through a lot of the benefits of what's been done there is still some additional.
Reductions that are and the pipeline for the second half of this year.
That will continue to have a positive effect on the core operating expenses.
Okay, and if I read you.
I mean, it sounds as if that can approach more of a and.
And $90 million.
And a core.
Yeah, Yeah, that's that's fair and I think the other piece here is the capitalized loan origination costs debt that obviously has a big effect on that number.
And that's a function of loan production and we again that's been volatile because of the PPP program, we had a very big quarter of originations in Q1, and the PPP program, that's effectively and if we just did a very small amount of originations and this quarter and.
And so that that the other element to the expense base is the pace of loan production.
Going forward should it continue or increase we'd see a bigger benefit from the capitalized loan origination costs on our core expense number.
Great Thanks and.
Mark.
On the part of the capital management front. The buyback was continued I want to just check.
Check it on the appetite going forward on that front as well as <unk>.
I think and in recent months, you've talked about M&A interest there Theyre, obviously, there was a lot of activity and in northern California, but just.
Update on how you feel about the buyback as well as M&A.
And the appetite.
For now thanks.
Okay. Thanks. Thank you for the question, Jeff I think.
Our view of capital deployment has not changed.
If anything with the pullback and the market.
It probably is more consistent than where it's been and.
In recent history. So if you if you think about the authorization we have of 1.7 million shares and we weave a repurchase.
750000, and we have plenty of room there.
Obviously, the the waterfall of capital deployment does include the core dividend itself.
Stock repurchase and special dividends, obviously, and this market for repurchase tends to favor any kind of special dividend.
And continued investment and the franchise as well as M&A opportunities.
On the M&A front.
For the conversations continue.
We are our style has been very consistent and that we do negotiated transactions, we don't do auction transactions.
So as we enter into the second half of the year and into 2022, it really comes down to and who is the right partner and what's the right franchise combination and it's going to help banner continued to be successful over the course for the next 3 to 5 years.
So the conversation continues but you know as well as I do those have to be opportunistic and timing is always and question as to when those can happen.
Great Alright.
<unk>.
Thank you Jeff.
Our next question comes from Jackie Bohlen with K B W.
Hi, good morning.
Good morning, Jackie.
<unk>.
Mark just wanted to start off with the improvement and criticized assets. This quarter kind of look forward, if I understood correctly, it sounds like roughly 40.
That relates to hospitality and <unk>.
I realize that this is somewhat dependent on the geography of the hospitality loans, but it sounds like anecdotally, we're off to a really good vacation season. This summer and so I'm wondering if that is in fact the case.
And of migration trend you would expect from those rest grades and how that might impact for 1 or reserve necessity.
Good morning, Jackie and.
Certainly we are off to a great vacation season, and as I think I indicated last quarter, we were expecting to see our hospitality numbers pick up.
Starting with spring break and run forward and we have and so we are running now approximately.
On hole at a 60% occupancy rate for the portfolio.
With and this is as of I think may numbers.
We would be down in the.
On the LOE and you'd have people still running at 20% and you know some fully occupied and it really is a function of where they're located and from where they started in terms of the increase.
And.
And we've kept that portfolio adversely classified because of the impact and the primary repayments are so.
Do I think we're going to see it improve yes, and I guide to where that's going to go or you know and I'm not prepared to tell you how quickly those will roll off but we are continuing to see improvement in the portfolio quarter over quarter.
As you look you know and I should think about that and the reserve.
We don't give guidance as to where our reserve will be but 1 could expect that and with continued economic improvement solid credit metrics and loan growth you'd expect the reserve level to as a percentage of total loans to trend downward over time.
Okay.
That's good color and our.
And you jewelry thing.
Anything that would indicate or anything you are closely watching that would I would indicate to us and uptick and charge offs I mean performance itself and tremendous throughout the entire pandemic.
No.
If I had anything and my quiver towards charge off given how cleanly, where this quarter you would've seen me take it because you know when we identify it and we take it.
It's just our cancer methodology to al.
Act quickly on those problems.
Okay. Thank you.
And then a bit of a little bit of a technical question. If I heard correctly. It sounded like there was a gain from a closed branch location and.
Noninterest income this quarter I was just wondering if I could get that quantified.
Yeah Jackie it.
It was.
They are roughly around $1 million give or take there were several that were part of that.
Part of that group that was closed last year that take a bit of time to sale sell and subtle per game.
Okay, and I realize these are unrelated but it sounds like that pretty much offset the the excess litigation expenses in the quarter.
Yeah, a little a little less I would say, but yeah. That's that's that's fair.
Okay. Thanks, Peter and thank you everyone.
Thank you Jackie.
If you have further questions. Please press star 1 to join Us for Ya.
Our next question comes from Andrew <unk> with Stephens.
Hey, Thanks, good morning.
Good morning, Andrew.
Joe maybe just to drill on to kind of and the growth guidance from from a different perspective, or an organic perspective, if I assume the 30% to 40% kind of forgiveness on the remaining $850 million or so of Pvp balances I guess that would imply kind of organic growth for the next 2 quarters.
Steps up too.
A low kind of $300 million number or about 13% annualized does that sound right to you.
Yeah.
Yeah.
You mean can you say that annualized again growth rate, yes, it would be kind of a low teens type of annualized growth rate I'm, just trying to make sure I'm thinking about this correctly.
Yeah.
Yeah, I'd have to double check the math, but I'm. If you go back and think about what we did just even in the C&I. This last quarter the annualized growth rate was 10%.
And you know and these segments, we are seeing some decent uptick as people in line utilization has room to grow.
That was up 1% when we think about it historically the average utilization rate as of June was 59% compared to 2019 average utilization rate of 64%. So when we start to see those actually come back to being drawn residential construction app and commercial as well.
And again, it will net out to.
Low single digit for that.
Rest of the year bad.
I don't know if that answered your question no debt.
That was helpful. I appreciate it.
And then Mark I was just curious I wanted to get kind of and update on any attrition that you might have seen us from the branch closures. We saw late last year I think when we spoke last it was less than 5% last quarter, but have you seen any notable comp change and customer attrition and over the past 3 months.
I'll, let I'll, let Peter comment on that and let me just add on to Joel's comments on on the loan portfolio and <unk>.
<unk> growth.
Obviously, we caution everything with the.
The new variance and whatever may happen in terms of.
And its impact on the economy and the ability to continue to be reopened strong.
So I just want to make sure we stay cautionary on that front, Peter do you want to comment on the attrition rates.
Yeah, Yeah. So yes, we've as we've commented in the past, we do monitor and measure.
Account attrition and the close location, then track that pretty closely and.
And have an expectation of what we think will happen and we continue to see very low rates of <unk>.
Attrition and deposit balances again, it's running about side, it's still running at about 5% of those closed locations.
And what we find is you know the some of the smaller balance clients do a trip, but a lot of the larger clients, especially the business clients with larger balances tend to tend to stick with the with the remaining branch.
And so we are pretty much through the attrition and experience of what we closed last year at this point, it's really tailed off and we don't expect any more material attrition there.
Yes.
Understood. Thank you and then Peter 1 last 1.
Do you have the the net and kind of PPP revenue that was recognized through NII this quarter and and what the average balance of PPP loans for us.
Yes, I've got the so in terms of the just for the second quarter impact of the PPP.
Portfolio, including the coupon and the accelerated deferred.
Interest income from the forgiveness was it was just under $18 million it was $17.8 million.
For the second quarter.
So the effective average yield on our portfolio. The PPP portfolio was 6 points for our 2% so.
We did we did benefit quite a bit from the forgiveness acceleration this quarter.
And just by way of reference for the first quarter number for the PPP program was $8 million. So.
We more than doubled the impact to interest income from Q1 to Q2.
Okay perfect. Thank you for taking my questions.
Thank you Andrew.
This concludes our question and answer session I would like to turn the call back over to Mark <unk> for any closing remarks.
Thank you Eiley as I've stated, we're very proud of the banner team as we continue to do the right thing as we battle, the Covid virus and its variants and its impacts on our communities and the economy and 1 another.
Thank you all for your interest and banner and for joining our call today, we look forward to reporting our results to you again and the future.
Good day everyone.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.