Q2 2021 Financial Institutions Inc Earnings Call
Good day and welcome to the financial institutions, Inc. Second quarter earnings Conference call.
All participants will be in listen only mode.
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After today's presentation there'll be an opportunity to ask questions.
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Please note today's event is being recorded.
I'd now like.
Switching to conference over to Shelly Doran director of Investor and external Communications. Please go ahead ma'am. Thank you for joining us for today's call, providing prepared comments will be president and CEO, Marty Birmingham and CFO Jack plant cheap community banking officer, Justin began and director of financial planning and analysis, Mike Grover will join us for.
Let's turn to.
Today's prepared comments and Q&A will include forward looking statements actual results may differ materially from forward looking statements due to variety of risks uncertainties and other factors we look for.
For you to yesterday's earnings release, and historical SEC filings available on our Investor Relations website for it.
Safe Harbor description and.
A detailed discussion other risk factors relating to forward looking statements.
Well also discuss certain non-GAAP financial measures intended to supplement and not substitute for comparable GAAP measures reconciliations of these measures to GAAP financial measures were provided in the earnings release filed as an exhibit to a form 8-K. Please.
Please note that this call them.
The information that may only be accurate as of todays date July 30th 2021 offs.
Now I'll turn the call over to President and CEO Marty Birmingham.
Thank you Shelly.
And welcome to our second quarter 2021 earnings call. It was another strong quarter for our company.
Net income of 20.
$20.2 million or $1.25 per diluted share was the second highest in company history.
Net income was down slightly from the first quarter's $20.7 million or $1.27 per share and significantly higher than second quarter 2020, net income of $11.1 million or 60.
67 per share.
We once again benefited from a positive provision in the quarter experienced growth in our wealth management and insurance businesses and.
And continue to contain expenses, despite critical investments being made in technology and people.
Pretax pre provision income for the quarter was 21.
<unk> $3.1 million decrease from the first quarter 2021.
And a $3.7 million increase from the second quarter of 2020.
I want to thank my fellow associates for their dedication in serving our clients across all business line.
They're delivering strong outcomes for our customers communities and share.
[noise] holders.
It was an eventful and successful quarter for our retail branch team.
During the month of June we opened 2 new 5 star Bank branches in the city of Buffalo.
Buffalo has long been a focus for company growth.
With these openings, we have grown our presence in the greater Buffalo area to 6 branches.
While still early both branches have received warm welcomes and their respective neighborhoods.
The new branches are located in areas undergoing significant redevelopment and revitalization and.
And we look forward to contributing to the positive momentum.
We also look forward to delivering our unique style of community banking to our new neighbors.
Monday, we are relocating our existing 5 star Bank branch in the city of Elmira.
The new branch in a newly constructed building is about 1600 feet from the existing branch. This relocation is exciting for our Elmira customers and our associates and will resolve in a more efficient footprint and.
Cost savings for the company.
All 3 new branches are designed to serve as financial solution centers with no teller lines and no barriers between associates and customers.
Feature a blend of technology, including interactive teller machines as well as the comfort of working directly with our certified personal bankers.
Annual New design requires less staff and provides a cost effective lower square footage approach to aligning services with shifting customer needs and preferences.
This includes advancements in financial technology that enable consumers to bank from virtually anywhere anytime.
The new branch openings.
Elmira branch relocation are continuation of our retail branch evolution.
You will recall that in 2020, we consolidated 11 branches in suburban communities with overlapping areas into 5 full service financial solution centers and closed 1 additional branch.
We have a fundamental.
<unk> ability to our customers and communities to adapt our approach as market conditions change influencing our branch strategy.
I'll now turn the call over to Jack So he can provide additional details on our results and guidance Jack.
Jack.
Thank you Marty good morning, everyone.
I'd like to begin today by providing.
Commentary on key areas, along with comparisons for the first quarter of 2021.
Non interest income for the quarter was $37.7 million.
A slight decrease from the linked quarter, despite an increase in average interest earning assets.
The decrease was primarily driven by lower P. P P fee accretion.
Approximately $95 million and $87 million of Triple P loans were forgiven in the second and first quarters of 2021, respectively with related fee accretion of $1.5 million in the second quarter as compared to $2.9 million in the first quarter.
Triple P loan fees are paid at varying rates.
Lower balance.
<unk> loans paid a higher percentage rate fee than larger loans.
And we experienced forgiveness of a higher percentage of the larger loans in the second quarter.
Net interest margin was 3.06%.
23 basis points lower than the linked quarter, our excess liquidity position.
Exacerbated this quarter due to the seasonal impact of public deposits.
Resulted in approximately 12 basis points of NIM compression from the linked quarter.
The previously mentioned lower Triple P loan fee recognition in the quarter negatively impacted NIM by about 11 basis points.
We do however continue to experience.
Ability in the margins of our core balance sheet as reflected in the stable credit spreads on new originations as compared to the prior quarter and prior year.
Provision for credit losses was a benefit of $4.6 million in the quarter.
Compared to a benefit of $2 million in the linked quarter.
Continued improvement in the national.
Against unemployment forecast positive trends in qualitative factors and lower net charge offs resulted in a second consecutive quarterly release of credit loss reserves.
Net recoveries were $394000 in the quarter as compared to charge offs of 887000 in the linked quarter.
The second.
<unk> benefited from a commercial related net recoveries of $294000 and indirect net recoveries of $426000.
Our indirect business experienced a lower level of repossessions.
In addition, we had a lower loss per unit due to the recent increase in used car prices.
Second quick other of these factors the allowance for credit losses decreased by $3.5 million in the quarter down.
Down to $46.4 million.
As we've previously discussed in the fourth quarter of 2020, we identified the specific customers and industries, we believed to be most at risk because of the pandemic.
We moved these loans about 20 loans totaling $127 million.
Criticized assets and set aside a specific reserve of $4.7 million.
With specific reserves increased by $2.4 million in the first quarter to.
For $7.1 million.
<unk> decreased by.
$200000.
At $6.9 million as of June 30.
Approximately $112 million of these loans remain in the criticized or classified asset class at quarter end.
We are optimistic that these credits will normalize post pandemic.
And while we have seen improve.
<unk> and the performance indicators of several of these credits we do not plan to release specific reserves until the credits returned to normal paying status.
The allowance for credit losses on loans to total loans was 128 basis points at quarter end down.
Down 8 basis points from March 31.
If.
Improved triple P loans ratio increases to 134 basis points.
A decrease of 13 basis points from the end of the first quarter.
Credit metrics continued to be strong with a total nonperforming loan to total loan ratio of 18 basis points and an allowance for credit losses to loans to non performing loans.
Loans of 699% at June 30.
Noninterest income of $10.2 million was $2.8 million lower than the first quarter of 2021.
First quarter noninterest income was exceptionally strong and during the quarterly call. We indicated that we expected fees from both interest rate.
And mortgage banking to moderate.
Key drivers of the second quarter decline were associated with fee income areas that tend to fluctuate quarter to quarter and are difficult to forecast.
Income from derivative instruments was down $2.5 million because of a significantly lower level of interest rate swap transactions.
<unk> executed in the quarter combined with the negative impact of lower long term interest rates on the fair market value of borrower facing traits.
And income from limited partnerships was down $617000 based on the activity and performance of underlying investments.
Noninterest expense was 20.
$6.9 million, an increase of $204000 from the linked quarter.
Computer and data processing expense of $3.5 million with $339000 higher than the first quarter of 2021 due to the investments in technology.
The largest decrease in expense was professional services.
Down $292000 from the first quarter due to the timing and level of consulting expenses, including audit fees.
Income tax expense was $5.4 million in the quarter, representing an effective tax rate of 21, 1%.
Effective tax rate from 2021.
Have been higher than the previous year because of higher pre tax earnings.
Moving onto the balance sheet total loans decreased $22 million for <unk>.
6% from March 31, 2021.
Commercial business decreased 10, 5%.
Mortgage increased 3%.
<unk> residential real estate loans were down 1, 9% and consumer indirect was up 4.8%.
You will recall that Triple P loans are included in the commercial business loans excluding.
Excluding triple P loans, the commercial business portfolio decreased <unk>, 4% and total loans increased 1.8%.
Total deposits at quarter end were $57 million lower than at March 31, due to the seasonality of public deposits, partially offset by growth in the non public and reciprocal deposit portfolios.
Our excess liquidity position continues to put pressure on net interest margin through both our excess federal reserve balance and.
So the securities portfolio.
Okay.
During the second quarter, we continued to expand our investment portfolio to benefit interest income by deploying excess liquidity into investment classes with a risk adjusted yield profile that exceeds the interest on excess reserves.
We remain cautious of extending the overall portfolio.
In addition, Asia. However, we are mindful of striking an appropriate balance between increasing net interest income and mitigating the impact of excess cash balances on net interest margin.
Our average federal reserve balance was $126 million higher during the quarter largely due to the seasonal.
<unk> a public deposits.
Overall, the inflows of public deposits have been higher and retained longer than we've experienced historically, which resulted in a higher average FRB balance.
We experienced improvement in our TCE ratio during the quarter for.
713% to.
758%.
Total assets declined slightly.
Given the seasonal outflow of public deposits at the end of the quarter as compared to the seasonal inflow of public deposits at the end of the first quarter.
Conversely, our tangible common equity increased primarily as a result of our strong second quarter earnings.
We remain very comfortable with our capital position given that much of the asset growth. We've experienced in the past year was due to shorter term triple P loans and excess liquidity.
In addition, our asset growth has been concentrated in very low risk weighted assets.
Therefore, our regulatory capital ratios remain comfortably above.
<unk> well capitalized minimums.
I'll now provide an update on our 2021 outlook in key areas.
We continue to expect mid single digit growth in our total loan portfolio, excluding the impact of Triple P loans.
All loan categories are expected to contribute to the increase.
With the largest contributions from the commercial real estate and indirect portfolios as experienced in the first half of the year.
Our original Triple P assumptions included approximately $125 million to $175 million of 2021 originations.
Actual originations for the first 6 months totaled 1.
$207 million and we expect no further originations as the SBA is no longer accepting applications.
We experienced approximately 17 million $87 million and $96 million of forgiveness and pay offs of the 2020 vintage of PPP loans in Q4.2020 Q1.2.
Q1, and Q2.2021, respectively.
We continue to estimate that 90% of the first wave of loans will be forgiven in 2021.
We have not included any forgiveness on a second lever for loans in our assumptions as we believe most forgiveness will occur very late in 2021 and into 2022.
We continue to anticipate mid single digit growth in non public deposits.
While deposit balances remain elevated in a low interest rate environment, we have seen growth moderate largely due to a change in the deposit behavior of Triple T customers.
Guidance includes the 2 new 5 star Bank branches that we opened in Buffalo.
We experienced stronger than expected growth in the first half of the year for both for cyclical in public deposits and are now projecting double digit growth in these areas for the year.
We are reducing full year NIM guidance by 5 basis points to a range of 305 to 310 basis points, excluding the impacts of triple.
P loans.
The reduction reflects our expectation for continued compression from excess liquidity and carrying higher balances interest bearing cash and investment securities.
It also reflects lower yields on interest, earning assets as loans and securities re price, which will be partially offset by lower deposit funding costs.
<unk> noise in our NIM related to Triple T forgiveness, and new originations will be muted in the second half of 2021 as compared to the first half. However, we are continuing to guide NIM, excluding the impact of this activity.
As a reminder, our NIM fluctuates from quarter to quarter due to the seasonality of public deposits and its impact on both our earning asset.
Asset and funding mix.
In quarters, where our average public deposit balances are higher due to seasonal inflows.
The second and fourth quarters.
Our earning asset yields are lower given the short term duration of the deposits and limited opportunities to invest the funds.
Our NIM guidance remains highly dependent on the overall.
The rate environment.
We are increasing full year noninterest income guidance to high single to low double digit growth excluding gains on investment securities give.
Given our strong noninterest income performance year to date.
As previously mentioned this category includes revenue that is <unk>.
Difficult to forecast such as swap fees and limited partnership income.
We are providing a wider range of guidance.
We continue to anticipate an increase in noninterest expense from the low to mid single digit range for 2021.
Noninterest expense is expected to range from 27% to $29 million per quarter.
Expense savings from our enterprise standardization program are offsetting the cost important investments were making in people and technology to improve relationships with our customers and enhance future profitability.
We are lowering our 2021 efficiency ratio guidance to a range of 56% to 57% for the full year.
Given the strong results posted in the first 6 months.
We continue to expect that the effective tax rate for 2021 will be within a range of 20% to 21% given earnings results in Q1 and Q2.
This guidance reflects the impact of the amortization of tax credit investments placed in service in recent years.
We will continue to evaluate tax credit prospects and our effective tax rate would be positively impacted by taking advantage of further investment opportunities.
Given our low level of net charge offs in Q1 and net recoveries in Q2, we are revising full year guidance to a range of 20 to 30 basis points.
10 basis point reduction to the low and high ends of this range previously provided.
Our focus remains on improved profitability and operating leverage.
That concludes my prepared comments I'll now turn the call back to Marty for closing remarks.
Thank you Jack.
I would like to close with a few governor.
<unk> organizational updates at.
In mid June we announced that Susan holiday was elected share of the board of directors.
Susan has been a member of our board since 2002, and most recently served as Vice chair.
She has passed share of the management development and compensation Committee and most recently served as chair of the non.
And governance Committee soon.
Susan was the owner President and publisher of the Rochester business Journal from 1988 to 2016.
And is currently the CEO dumbwaiter designed for community involvement is extensive and she serves on numerous nonprofit boards.
I've known Susan.
For many years and I'm very pleased that she is now serving in this critical role. She brings strong integrity inquisitiveness willingness to challenge and a collaborative approach to the role of share.
I wanted to take a moment to thank former board share Bob <unk> for his dedicated service.
We have benefited greatly from Bob's leader.
Ship and are grateful that he has agreed to remain on the board.
And for June annual meeting of shareholders, 2 new directors were elected ratio where barrels and Mark Xu Pan <unk> and Mark are exceptional additions and they bring diverse work and life experiences.
Representing incremental skills experience and market knowledge.
Within our organization.
Our board of directors is committed to diversity and inclusion and through thoughtful succession planning and refreshment has achieved the following levels of diversity and tenure.
5 new directors have been added to the board over the past 5 years.
Gender and ethnic diversity has strength.
<unk> 50 per cent of the Board's 10 independent directors represent diverse groups.
With 3 women each of whom hold keyboard leadership positions and 2 directors who belonged to a racial or ethnic minority group, 1 of whom holds a keyboard leadership position.
For 10 years balanced with 5 members between zero and 5.
5 years 3 members between 6 and 10 years and 3 members with tenure of more than 10 years.
Advancing diversity and inclusion is an area of focus for management as well.
Last September we established a diversity and inclusion advisory council to evaluate company practices and provide learning opportunities.
Kate built.
Build inclusion acumen and foster a sense of belonging.
The council is comprised of associates from diverse personal and professional backgrounds across our geographic footprint.
I serve as sponsor for the council and continue to be inspired by the passion of its members. Our work here is critical.
Eddie ongoing.
The company continues to take a thoughtful and prioritized approach and returning our associates to the office.
Currently 70% of our work force has returned to primary office location and.
100% of our client facing associates returned a primary locations earlier this month.
We remain mindful of the Covid variance and are following not only state and federal guidelines, but also maintaining many of the safeguards we successfully instituted throughout the pandemic, including continued social distancing active vaccination tracking and hybrid working arrangements.
Operator this concludes.
And we're prepared remarks, and we're ready to open the call for questions.
Thank you we will now begin the question and answer session.
Thanks for asking a question. Please press Star then 1 on your Touchtone phone.
We usually speak for them, we ask that you. Please pickup your handset before pressing the keys to withdraw your question. Please press Star then 2.
Today's first question comes.
Our from a dumb money with Ww. Please go ahead.
Hey, good morning, everyone. Thanks for taking my question today. So I just had a question on the outlook on net charge offs that was provided you guys said 20 to 30 basis points for the full year. If you kind of look at what you've done in the first half for the year that kind of implies you know.
[noise] upwards.
Upwards of 35 basis points of net charge offs in the back half of the year. So I guess my question is do you feel that with where the reserve level is today $1.30 for X P. P P loans.
You'll need to cover those expected charge offs or are you able to let the reserve run down from here.
Hey, David.
This is Jack yeah, so from a N C O M.
We're expecting that guidance to revert back to what we've seen historically.
But from an allowance standpoint, looking at that pool of specific reserves, we have from the Covid deferrals.
$7 million still there and as those.
Total loans stabilized.
When they come off for their deferral and.
And we expect to have some relief from those reserves. So from an overall allowance standpoint, I would expect that to migrate back down to historic levels.
Okay, let's see.
You need to like another quarter or 2 on that pool of loans.
Comfort.
Where you could begin to release.
Those those specific reserves.
Yes, the passage of time hasn't been long enough to establish a trend there theyre coming off deferral in the fourth quarter. A couple of them are coming off in the first quarter of 2022.
Yes, just to reinforce statement it's Marty.
Our approach in terms of providing relief.
And the Covid bridges that we've talked about previously.
Basically run through the end of the year. The idea there was that based on regulatory conversations and guidance. We are providing relief through the end of the pandemic expected anticipated and.
When we get to that period of time that would be when we would.
Consider removing them from.
The categories that you guys are talking about.
Got it okay. That's very helpful. Thank you and then I guess just a.
Quick question on the core margin outlook, just to make sure I understand this correctly.
Jack Youre, saying like just continued excess liquidity and the repricing of loans at lower than legacy portfolio yield is going to kind of caused the core margin to grind down a little bit lower for at least another couple of quarters.
Yes, there's just cash flow coming off the our core portfolio that we're reinvesting at current market yields credit spreads had been holding.
Up very well, which is a positive trend for us and then the excess liquidity is really what's weighing on the on.
The margin.
Got it okay I appreciate the color and insight. Thank you very much.
Thanks, David.
And our next question comes from Marla Backer with Sidoti. Please go ahead.
Thank you.
So a couple of questions first of all.
You are talking about excess liquidity and I'm thinking about that.
Something that other financial institutions operating in your markets are also experiencing what are you seeing in terms of pricing and some of your key.
Key products.
As a result from that.
As I mentioned earlier are from pricing standpoint, we've only really guided on credit spreads on our credit spreads credit spreads have been very stable relative to the prior quarter prior year.
Okay.
Okay.
<unk>.
Switching topics in terms of the Almirah Brashly relocation is this a model you know if you find that if successful would be admira branch is that a model that you were thinking you might replicate with other older branches.
Day basically that's in my prepared comments.
We were talk I wanted to make sure. We emphasize that we are well aware of the opportunity and the responsibility to make sure that we are operating our branch network from the most efficient and effective manner efficient for the company and effective for our customers and the markets we're serving.
So the short answer is yes, this conserve as a.
<unk> model for Us as we go forward our financial solution centers in general have served as kind of a modern approach and they've evolved we're in our third version in terms of size and how we configure them and application of technology and the levels of staffing, but at the end of the day specifics Almirah was an opportunity where we were.
Working together, we have reduced the annual lease expense, a significant way and the specific location.
As well as being able to apply more flexibility and efficiency to how we.
Deliver the branch in the actual location, where we're operating.
Okay.
So in terms of achieving cost savings, you're talking about a combination of reducing the footprint of the branches as well as reducing staff levels. The branches that you open going forward, except for I would think about it.
SaaS.
<unk> footprint and in this case since we didn't own it annually.
Okay expense, meaning.
Meaningful savings for cliffs.
Okay.
For the last question I have is you.
For new.
Community banking unit.
It's fairly new.
<unk>.
Can you give us any color on if youre seeing what kind of benefits.
Annual youre seeing from that structure.
At this point.
So I'll ask Justin respond, but before I do I will say that I'm very pleased with the overall organizational approach that we are operating under right now in terms of leadership of our community bank or commercial.
<unk>, Inc, our administrative functions and our risk functions.
As well as our human capital and obviously Jack is participating in this call so Justin.
Hi, Marla Justin Nice to talk to you this morning.
We are progressing.
Things are progressing.
<unk> well with the new structure, obviously, it takes time to sort of adjust.
Adjusted and start developing strategy.
Thinking through the changes and thoughtful approach to.
So how do we want to conduct our community banking and I think in the coming.
A couple of quarters Youll start.
<unk> really.
Externally start to see some things that are changes as to how we're thinking about community banking.
And how we're thinking about our own value proposition in the future.
So I look forward in the future to providing more information on that as we get into the next couple of quarters.
Okay. Thank you.
Ladies and gentlemen, as a reminder, if you'd like to ask a question. Please press Star then 1 our next question comes from Bryce Rowe Halsey Group. Please go ahead.
Thanks, Thanks, Good morning wanted to.
Kind of a follow up on.
On 1 of David's questions there about the specific reserves against the Covid.
It's sensitive loans.
Yes.
So Jackie you noted a drop from $127 million to $112 million was curious.
If that was kind of normal schedule in terms of.
Loans coming off a deferral or did they come off early.
Okay.
This is Jack.
Yeah. Those were 2 loans that we saw stability in their performance. So they came off the deferral program early and returned to normal paying status.
Okay.
And other prospects for the balance of $112 million balance for for that to them.
2 to happen earlier than than the Q for Q1 timeline that you had set out at this point.
Yes, there is potential for those loans that come off if we see.
See them return to normal paying status, we monitor them very closely we stay very close to credit on them the.
The determination at this point in time as we just wanted to see trends and stability, we feel optimistic about them.
So we expect that they are moving in the right direction at this point in time.
Excellent okay great.
<unk> sales, let's shift gears here wanted to ask about.
The the the P. P P program mm Jack.
I kind of missed what you said about the the forgiveness for round..1 can you just tell tell us what the.
The respective balances are for round, 1 and round 2.
For the end of the second quarter.
First 1 with the debt.
At the end of the quarter, we had about $172 million in total PPP loans outstanding.
$70 million of that was related to the 2020 around 1 vintage.
107 million was related to the 2021 vintage.
Okay excellent.
And then remaining fees.
Tied to PPP, you can certainly break it out as 1 point I want to point out, but just total total remaining fees would be helpful.
Yeah, I can break it out we have we have a $1 million remaining on the 1 point over lunch.
Okay.
From $4.7 million from 2.1 vintage.
Okay great.
And then wanted to ask about you obviously highlighted excess liquidity.
Obviously, something we've seen throughout the industry.
You all have grown the bond portfolio by let's call it $100 million a quarter.
For a 3 or 4 quarters is that is that kind of the plan at this point.
Or is it or is it more trying to understand what.
What the flows are going to be and that will kind of dictate.
The debt.
The bond purchases or the new bond bond purchases.
So we're trying to strike an appropriate balance between growing net interest income and managing net interest margin and having that excess cash sitting at the fed has obviously been weighing on them.
Both metrics so we've been.
Very particular about choosing the bonds, we want to purchase from growing the portfolio in a methodical way that doesn't put it.
Undue extension of duration to the portfolio that provides the ability to lean on the portfolio for liquidity purposes in the future as we get through this excess federal reserve balance.
Right Okay. Okay. That's helpful.
And then 1 last 1 for me.
You noted the.
The recoveries on.
The indirect side, lower repossessions and higher values it certainly feels like.
The higher value side of used cars are cars will continue here.
Do you have a sense from a kind of a repossession perspective.
That might continue to or was this more of an anomaly here in the in the in.
So all the trends we've been seeing is that our repo rates are at historic lows, but what's really driving that is that the average loss per vehicles down significantly and that's coupled with the.
The increase in.
Used car prices, but we expect a reversion to normal levels over time.
Okay.
Alright.
The quarter, that's a that's it for me appreciate you all taking the questions.
Thanks price.
And our next question comes from Alex <unk> with Piper.
Please go ahead.
Hey, good morning.
Okay.
I just wanted to ask.
I think over the last couple of years.
The indirect portfolio had been sort of shrinking as a percentage of the overall pie.
Maybe more supplementary than anything else.
Curious you know just given all the liquidity out there and and certainly the strength in indirect auto.
Car market recently, if the thought process around.
That portfolio has changed.
Alright.
It can be actually a bigger percentage of the pie from here.
So the thought process really hasn't over the long term, but clearly it's been a very important.
Capability strategic capability that we can.
We have relied on Alex in this period of time with excess liquidity.
Rolling through the system and certainly our balance sheet as well as you know.
The market dynamics that we're all well aware of in terms of.
Our robust that that business line has been.
Just and the reason, we're so comfortable continuing to engage in the short term is because our program is probably now.
In its 16th year and it's been very consistent as you know focused on fundamentally strong credit and certainly the stability of our credit performance really does speak for itself. So we remain very comfortable with it and glad we have that capability over the course of the last 18 months.
Great.
And then I'm just curious what you've seen out there from an M&A perspective, not just hold bank, but also for some of the fee based businesses that you guys have bolted on over the past couple of years, if theres going to be some opportunities.
To do some more of those types of transactions later this year.
But we remain open to those.
Attorneys and are interested in continuing to bolster our fee based business platforms.
And we're very.
Excited by the progress that's being made with our.
Landmark acquisition that was a modest acquisition in terms of impact in terms of earnings dilutive.
Dilution and accretion.
<unk>, but it was very important for us in terms of <unk>.
Driving in Rochester presence as well as the market knowledge that the principles are brought to us and so as those.
Other opportunities surface will be open to them and consider them, whether they support our wealth or insurance operations.
And then just for the whole Bank acquisition is something you guys had talked about in the past.
It's been a while since any blended for you guys, but.
Just given the outlook on the market and the prospects for down earnings in 2022 everywhere. We've certainly seen a lot of transactions I'm. Just curious if you think that's something that you guys will participate.
Hey, Dan.
And you know what the criteria would be.
Okay.
Possibilities.
The criterias, probably the same that.
You hear across these conversations we want to be very sensitive to.
Dilution accretion and earn back periods and.
Participants were well aware of what's happening in the outlook in terms of merger vehicles being.
I guess more enthusiastically appreciated by the market.
We are open to possibilities, but we're also sensitive to making sure that the financial impact makes sense for shareholders.
Perfect. Thanks for taking my questions.
Thank you Alan.
Ladies and gentlemen. This concludes the question and answer session I would like to turn the conference back over to the management team for any final remarks.
Thank you Rocco I want to thank all who participated in the call. This morning, we look forward to continuing to build on our communication with.
While investors.
The future.
Thank you. This concludes today's conference call. Thank you all for attending today's presentation. You may now disconnect. Your lines will have a wonderful day.