Q4 2021 QCR Holdings Inc Earnings Call
Good day and welcome to the Q T. R Holdings incorporated fourth quarter 2021 financial results Conference call. All participants will be in a listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions to ask.
A question you May Press Star then one on your telephone keypad and to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Mr. Larry Helling CEO . Please go ahead Sir.
Thank you operator, welcome ladies and gentlemen.
Thank you for taking the time to join us today.
I will start the call with a brief discussion regarding our full year performance Todd will follow with additional details on our financial results for the fourth quarter.
We are very pleased with our financial performance in the fourth quarter and for the full year highly.
Highlighted by record net income and earnings per share.
Our 2021 record results were driven by robust loan growth an expanded net interest margin.
Solid fee income.
Airframe manage expenses and excellent credit quality.
Our adjusted net income increased 58% for the year and diluted EPS by 63%.
We grew our tangible book value per share by nearly $6 to just over $38 per share representing 18% year over year growth.
Additionally, we strengthened our capital ratios in 2021, with our tangible common equity to tangible assets ratio.
Proving by 82 basis points to 987% at year end.
We experienced healthy demand from our client base and <unk>.
Grew loans by nearly 17% when excluding PPP loans.
We capitalized on strengthening economic conditions in our markets.
<unk> continued to gain market share across our charters.
Our clients value, our local charter model, which is reflected in our robust growth in both loans and deposits.
Our specialty finance group had another outstanding year generating strong production in our niche lending products. Additionally.
Additionally, our traditional lending business finished the year strong with fourth quarter annualized loan growth of 8% accelerating the trend that we began to see in the third quarter.
Our loan pipelines remain healthy and our near term outlook for loan growth remains positive.
Therefore, we are targeting organic loan growth of between eight and 10% for the full year 2022, consistent with our long term goals.
Yeah.
We funded our loan growth for 2021 with core deposits and excess liquidity that we were carrying on our balance sheet as we began the year.
Core deposits grew by 7% for the year with strong contributions from our core commercial correspondent banking clients.
In addition, the composition of those deposits continued to improve as non interest bearing demand deposits increased by nearly 11% year over year.
While interest bearing demand deposits grew by over 8%.
Additionally, we successfully protected our net interest margin in 2021, which was up nine basis points for the year on an adjusted basis, despite the challenging interest rate environment.
Our balance sheet initiatives paid off as we constructed a more efficient balance sheet combined with strong loan growth.
Funded with core deposits and utilization of excess liquidity.
We successfully drove down our interest cost by significantly increasing non interest bearing deposits and capitalizing on favorable deposit repricing opportunities.
We had another year of solid revenue generation with strong contributions from both net interest income and fee based income, which adds diversity to our revenue stream.
We are particularly proud of our wealth management group, which grew assets under management by 23% in 2021. This.
This team added more than 1000 relationships over the past three years.
Yeah.
Our asset quality and credit metrics improved significantly during the year and remain extremely strong non.
Nonperforming assets improved 80% over the course of the year to just $2 $8 million at year end and.
And represents a record low of five basis points of total assets.
We had minimal net charge offs during the year and we feel very good about our current reserve level, which when excluding PPP loans is 1.69%.
Our excellent credit quality is a function of our disciplined and consistent underwriting along with improving economic conditions across our markets.
Before turning the call over to Todd.
I would like to provide an update on our anticipated acquisition of Guaranty Federal Bancshares.
We are excited about this transaction as it will significantly enhance our market position and the vibrant Springfield and southwest Missouri markets.
Guaranty bank as a deep rooted and prominent brand.
Long history of profitable growth.
<unk> team of bankers.
Guarantee is also known for its commitment to exceptional client service and relationship banking.
Including outstanding community support.
We share the same values, making the combination is natural fit.
Bringing the two teams together for both banks will enable us to extend our high performing and profitable niche business lines into those markets.
Serve our combined client base more effectively accelerate our earnings growth and improve shareholder returns.
We expect this transaction to close early in the second quarter and look forward to welcoming guaranty bank to the team.
In conclusion, I would like to thank the entire QC, our holdings team for their hard work and dedication to outstanding client service and for delivering record earnings performance for the year.
Our employees are the heart of our company.
I am proud of all they have accomplished in 2021.
With that I will turn the call over to Todd to provide further information about our fourth quarter results.
Thank you Larry good morning, everyone. Thanks for joining us today.
As I review, our fourth quarter financial results I will focus on those items, where some additional discussion is warranted let's.
Let's start with net interest income.
Our adjusted net interest income for the quarter was a record $49 2 million and up 744000, or one 5% from our previous record set in the third quarter.
This strong performance was due to the continued strong loan and lease growth that Larry discussed as well as our ability to protect our net interest margin in this challenging interest rate environment.
Refunded, our robust loan and lease growth during the quarter with a combination of core deposit growth and excess liquidity CT.
Core deposits increased $52 million during the quarter driven by a $72 million increase in non maturity deposits, partially offset by a $20 million increase in time deposits.
We continue to intentionally rotate out of higher cost CD balances and improve the mix of our deposit base.
While the cost of our total interest bearing deposits improved a modest one basis point from the third quarter for the full year, we created a 26 basis point improvement.
These lower deposit costs have helped us protect and actually expand our net interest margin during 2021, while adjusted NIM compressed by four basis points. This quarter, we were able to improve NIM by nine basis points for the full year.
The quarterly decline in adjusted NIM was closer to two basis points. After excluding the impact of lower P. P. P income and elevated excess liquidity matching our guidance for the quarter.
We had elevated liquidity during much of the quarter driven by strong seasonal deposit growth with the majority of our strong loan growth occurring in December .
We were very pleased with our NIM performance throughout 2021, we have been successful in holding on to earning asset yields while driving down our cost of funds.
As we near a potential rising rate environment, our ability to further drive down our cost of funds has diminished and we continue to experience loan pricing pressure.
Therefore, we do expect some modest NIM compression in the first quarter with adjusted NIM expected to decline in the range of two to four basis points.
That being said, we are well positioned for rising rates as our balance sheet is solidly asset sensitive.
Now turning to our noninterest income of 23 million for the quarter, which was lower than the near record noninterest income of $34 7 million, we generated in the third quarter.
We produce capital markets revenue from swap fees of $13 million slightly below the lower end of our guidance range of $14 million.
Our full year swap revenue was 61 million, averaging just over $15 million per quarter and within our guidance range.
Over the last eight quarters capital markets revenue from swap fees has averaged $17 million, which gives us continued confidence in the sustainability of this important source of fee income and supports our reaffirmed guidance range of $14 million to $18 million per quarter.
We continue to expect strong sustainable levels of swap production based on the demand we're seeing from the relationships within our specialty finance group as well as in our traditional commercial lending business.
Many of our clients continue to lock in attractive fixed long term rates by converting their variable rate loans through the use of swaps.
Now turning to our expenses.
Noninterest expense for the fourth quarter totaled $39 4 million.
<unk> to 41.4 million for the third quarter and within our guidance range of $38 million to $40 million.
Linked quarter improvement was primarily due to lower incentive based salary and benefits expense of $3 4 million as a result of a decrease in capital markets revenue.
Partially offsetting this decrease was a 584000 increase in advertising and marketing and a 624000 increase in acquisition costs.
For the year, we are pleased with our overall cost control as noninterest expenses increased by just one 3% year over year, well within our long term goal of keeping expense growth below 5% per year.
While we will remain disciplined in managing our operating expenses like many other companies we are experiencing some upward pressure in compensation and other direct costs.
However, we still believe that we will be able to keep our annual expense growth below 5%.
Looking ahead to the first quarter, we anticipate that our level of noninterest expense will be in a range of $39 million to $41 million.
Our overall asset quality continues to be quite strong nonperforming assets improved by 60% for the quarter and 80% for the year and as Larry mentioned now represent only five basis points of total assets 20 basis points lower than one year ago.
The linked quarter improvement was primarily due to the pay off of one non accrual loan during the quarter.
Additionally, we recorded a $3 2 million negative provision for credit losses in the fourth quarter, primarily due to continued strong asset quality.
Corresponding reduction in the qualitative factor related to the pandemic.
Our allowance for credit losses, excluding the impact of the remaining $28 million in P. P. P loans was 1.69% to total loans and leases down 10 basis points from the end of September .
This allowance now represents over 28 times, our nonperforming assets.
With respect to capital we continue to grow our strong capital levels as our tangible common equity to tangible assets ratio improved to 987% at year end compared to 9.54% at the end of September .
Finally, our effective tax rate for the quarter was 18, 9% and 18.6% for the full year. The rate was slightly lower on a linked quarter basis due to a lower ratio of taxable earnings to tax exempt revenue in the fourth quarter.
We are very pleased with our 2021 financial performance that resulted in a 63% increase in earnings per share and a $6 increase in tangible book value per share.
We are well positioned both financially and strategically to continue to grow tangible book value and produce strong earnings per share.
With that added context on our fourth quarter and full year financial results, Let's open up the call for your questions. Operator, we're ready for our first question.
Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys and to withdraw your question. Please press Star then two and at this time, we'll pause momentarily to assemble our roster.
Okay.
And the first question will come from Nathan race with Piper Sandler. Please go ahead.
Hi, guys good morning.
Good morning, good morning.
Hoping to just expand on the outlook for capital markets and swap revenue for this year I appreciate that the guidance range is unchanged.
I guess, just curious to get some color in terms of how you guys expect this revenue source to.
Respond as the fed raises short term rates just in terms of things you're thinking about the overall durability of this revenue line over various interest rate environments.
Yes, great question certainly.
As you know here the.
The amount of them.
Fee income is a little more variable on a quarter to.
Order basis than we would prefer.
The nature of the business.
These are clients that one extra rate loans for long term.
Transactions and so the interest rates may have some marginal impact on it but there are still transactions for us to do.
Todd and I met with the two people that manage this business for us just yesterday.
To get a sense for how they were feeling about things.
The headwinds that probably are facing.
This niche in the business and any business right now that build buildings is the supply chain and inflation.
Freedom of a little bit on <unk>.
Certainly about the capital stack needed to put these deals together.
That's probably why there's a little bit more delay on some of these things because of the changes that are going on in the economy not so much affected by the interest rates, because we expect that impact to be modest on this business.
So again, we reaffirmed our guidance because we feel confident in the business.
And we delved into that just yesterday and don't feel good about 2022.
Got it that's very helpful color. Thank you Larry.
Changing gears, a little bit maybe Todd I appreciate the margin guidance for the first quarter. This year, but maybe looking out to the back half of this year, assuming the fed actually does raise short term rates a.
A couple of times before the end of the year. How are you thinking the margin will respond.
Thereafter, just based on all the core deposit gathering that you guys have held or have gathered over the last several quarters and <unk> been able to run off I'd imagine some higher rate sensitive deposits in the process. So would just love to get some color just in terms of how you're thinking about the merger responding to the first couple.
Later this year presumably.
Sure sure Nate Great question, we are.
Feeling very good about.
Where our balance sheet sits with respect to asset sensitivity, we've got roughly $2 1 billion in RSA is $1 3 billion and ourselves so.
About 800 million of net asset sensitivity, we've run the modeling and with a 25 basis point hike that would provide somewhere between two and $2 2 million.
Additional NII dollars for annual number and roughly four or five basis points of margin expansion and that's per 25 basis point rate hike a course that assumes.
No significant negative trajectory in terms of curve inversion or anything like that but we feel very bullish.
About how our balance sheet will perform and impact on NII dollars in NIM percentage with with 25 basis point rate hikes.
Yeah.
That's great and I assume that contemplates lower deposit betas do the first few rate hikes than what we saw coming out of the gate in 2015 and into two.
16 and 17.
Right Nate it is actually those numbers are relatively conservative with respect to the deposit beta performance we.
We would like to see some very good performance on deposit betas on the way up certainly all the excess liquidity in the market and for us will allow us to be a little more diligent there and hold the line on deposit betas. So.
We're feeling pretty good about our opportunities there as well.
Okay, Great and then just maybe one last one and I'll step back just on the tax rate for this year.
In the states as soon as it can be several similar level from what we saw in 'twenty, one within the context of our capital markets and swap revenue.
Remaining kind of within the guidance range on a kind of an average quarterly basis going forward.
Sure Nate Great question, Yeah, I would expect somewhere in the 18 to 19 range just as we performed throughout the year.
Okay perfect I appreciate all the color. Thanks again guys.
Thanks, Steve.
The next question will come from Daniel Tamayo with Raymond James. Please go ahead.
Good morning, guys.
Well Daniel.
Maybe we just did.
Dig into the loan growth a little bit certainly a nice quarter.
In the fourth quarter, but just wanted to see how you're thinking about or what the pipeline looks like at the end of the year and how youre thinking about growth going forward in 2022.
Yes.
Brush off and talking to our bank presidents and several of our locations in the last 48 hours in the pipelines.
Appear to be improving.
The other positive factor going on is line of credit utilization is not back to pre pandemic levels yet.
But our clients are starting to burn through some of that excess liquidity that was created by PPE and.
And so we are starting to see some elevated line usage, but certainly more runway there.
So we feel certainly comfortable with our 8% to 10% guidance range on growth.
We look forward for 2022.
Okay, Great and then as we think about.
Kind of overall balance sheet growth may be impacted by by deposits.
Certainly remix the deposit base and just talked about how that's going to impact back the asset sensitivity, but as we think about the impact of the correspondent banking relationships and any associated deposits there.
Where are you budgeting for or thinking about overall deposit.
Growth or if it's easier just overall overall asset growth for the year, earning asset growth.
Yeah, Daniel I'll take that one we feel like we're gonna be able to.
ROE in that 8% to 10% range on loans, we certainly expect to continue to be able to fund that with core deposit growth and not have to dip back into our wholesale funding.
We're feeling very good about the progress we made on funding everything with core deposits and really getting almost entirely out of wholesale funding, we still have a tremendous.
Amount of off balance sheet liquidity available to us in the correspondent banking.
Is this at.
At year end.
We had noninterest bearing from correspondent of around $340 million.
Money market interest bearing about $220 million.
And about 1.3 billion, an off balance sheet and a b. So again that just in time inventory of deposits is available to us that 1.3 has actually grown inter quarter stands at about $1 7 billion right now so.
So we feel very good about our ability to fund our strong loan growth with core deposits and as a result that makes us optimistic about.
Go forward margin with some with some rate hikes.
Okay. That's helpful. So I guess, another way of saying, but the securities portfolio has been relatively flat over the last year or so you would expect that to continue that.
Yes that would be my expectation.
Alright terrific. Thanks for taking my questions.
Thanks, Jamie.
The next question will come from Brian Martin with Janney Montgomery. Please go ahead.
Hey, good morning, guys.
Good morning, Brian Brian .
Can you just talk a little bit about the I guess kind of a step down if you will in and loan growth going from 17 to Tad and just kind of understanding certainly 17 is a is a great number but just kind of what's.
What's leading to that and then maybe just talk a little bit about just where the specialty finance business can you just give some color on that that business kind of what percentage of loans is at today kind of where does that stand relative to kind of concentration to how you guys are thinking about that going forward.
Yeah.
So yeah. Good question, Brian I'll take the first lien and let Todd insert any thoughts that you might have.
Certainly what numbers, we're telegraphing to you with regard to the age of 10%.
Our what we've done consistently over a long period of time and so.
That's what we would expect to continue to do.
And so.
It was nice to see in the fourth quarter that our traditional lending business grew 8% calypso, there's starting to be more organic growth in the traditional business as we burn through some of the excess PTT funds that our clients accounts.
Some of the especially the ancillary business.
We've talked about doing a potential securitization.
Make sure that we have continued runway and capacity that roll that business at the pace, we might that's likely a second quarter event.
When we do the first securitization so that's taking the top off the loan growth just a little bit.
And we would basically securitize a portion of our latex portfolio.
And it's perfectly suited to go onto a securitized kind of asset and so that's something we'd expect to tell you much more about when we get to the next quarterly earnings call.
We have a lot of runway certainly to continue to grow.
Our specialty finance group business.
The largest concentration there is no way tech loans low income tax credit housing loans.
Within the next year or so we get to our concentration level, where we probably wouldn't want to grow that a lot more just from a percentage of assets. So that's hence why we're getting the <unk>.
Securitization in place the late part of that portfolio up so.
And it all out we still think you can grow the on balance sheet business in that 8% to 10% range throughout the year.
Gotcha, Okay. That's really helpful. There and just as far as where that portfolio stands today, the specialty finance with all the growth you guys have seen.
Give some idea of where those balances are just kind of where that that's out at year end.
Yes, so if you look at.
The biggest components.
The biggest components would be historic tax credit lending.
Around $280 million of.
The light tech portfolio.
Out of $1 billion, now that would be stabilized projects and projects under construction.
Some of the direct municipal stuff that we've done a couple of hundred million dollars and then kind of a mixture of others would be another $100 million. So it's a meaningful part of our balance sheet.
Gotcha, Okay, perfect and just a.
Just lying utilization Todd you mentioned that are I guess.
Just kind of aware where is that at today relative to kind of pre pandemic levels.
Sure Yeah, Brian It has improved and at the end of last year, our revolving line utilization was around $240 million at.
It ended this year at 340 million. So it was up a $100 million, it's still a bit short of pre pandemic levels.
Maybe another 40 or $50 million to get us back to pre pandemic. So that has improved and Larry mentioned that in his comments, we feel good about that.
Maybe the only other color I'd give you on on loans. In addition to Larry's detailed comments.
And again, just reaffirm that 8% to 10% is one historically, what we've done for years and years, we feel very good about that and and that would be net of any offtake that we accomplished this year. So you wouldn't have to net that down further for for securitization, but we actually had the highest <unk>.
Level of loan fundings in our history, this past quarter with $650 million in new loans funded we actually had very significant payoffs and pay downs in the quarter of over $500 million. So.
Just wanted to give you a little bit of information about directionally their pipelines are strong production strong still.
Still seeing some elevated payoffs and paydowns.
All of that liquidity in the market fair number of business sales taking place in some of our markets things like that but.
Feel very solid about being able to continue our history of 8% to 10% loan growth.
Okay perfect. That's helpful. It sounds optimistic suggesting maybe the last one for me was just on capital and just kind of know that.
The guarantee deal has been announced just kind of how youre thinking about.
A buybacks and secondly, I guess additional potential M&A as you go into 2022.
Yeah, I'll take the first lien Ted certainly we feel good about our capital levels.
Because we've got a pending acquisition, we've been kind of on the sidelines with regard to buyback we.
We have capacity.
And are currently announced plan to continue to buyback.
We will be revisiting that with our board during this next quarter to talk about.
Essentially increasing the amount of capacity, we have to buyback because of our capital levels.
And we just need to determine at what price. It makes sense. So we'll be create a little more clarity on that as we go forward.
Perfect.
And then just on the M&A pieces that kind of how youre thinking about that.
Yeah.
Our first choice is probably.
To continue to digest, the <unk> deal for a while before we tackle another one.
Certainly in the right opportunity would it be.
Tentative.
And if the right opportunity came up we certainly have the capital to do it but certainly nothing on the very near term horizon.
Gotcha. Okay. Thanks, Thanks, very much and congrats on a great year.
Super Thanks, Brian .
The next question will come from Damon Delmonte with K B W. Please go ahead.
Hey, good morning, guys hope everybody's doing well today.
Good morning, David.
Good morning.
So a lot of my questions have been asked and answered, but just wanted to touch base on the credit front I mean, obviously things continue to go very well for you guys. You had a sizable reserve released this quarter.
Todd can you kind of just help us frame out the outlook for provision as we go through 2022 I mean, your your reserve is still like 169 X P. P. P, which is which is very healthy. So it kind of feels like you know, we're gonna have low levels of provisioning, possibly another reversal.
How would you characterize that.
Yeah, David I think that would be our expectation as well that are continuing the very pristine asset quality we have.
And even the further improvement here, we had in Q4, we really had to soften up our qualitative factor around the pandemic and as a result, we did release.
I guess I would call it modest at 3 million ish, but.
Our expectation just as we stated.
For the last several quarters of the past year is to really grow into that reserve.
I think all of you know us pretty well in terms of our credit culture, and how we view asset quality and reserve levels, we like to be very conservative there.
And so our preference would be to grow into it.
It really depends on the level of growth, we do see in loans.
Really depends on what if any credit degradation does show up but I would say either no.
Or modest provision or modest releases would not be our.
Preference or our style to have a significant release of reserves.
And right now we don't see anything.
In the portfolio that gives us concern about coming charge offs. So as a result, given those factors we thought it was appropriate to have a modest release in Q4.
And.
It would be either no provisioning and growing into it or if we do have to release it would be fair.
Fairly modest amount again.
Got it okay.
Yes.
David I might add just a couple of things first of all Youre right. Our credit quality is one of the very best in the peer group.
Not just now it's that's been a consistent theme for us for many years.
Our reserve is one of the highest and certainly over time as we grow into the reserve.
Would expect to go toward the median of the peer group and our reserve levels. So that meeting of the peer group will look at one of the quarters over but it's probably more in the 140 range today, but we don't plan to get there quickly but overtime.
Okay, Great and then could you just kind of give a little bit more perspective on the swap fee income expectations. I mean, it is the first quarter are typically like seasonally slow did you maybe have some some built up loans in the pipeline in <unk> that didn't come through.
<unk>.
No, you're you're providing the $14 million to $18 million per quarter average, but.
Can you help us maybe think a little bit about seasonality as we look at the quarters ahead.
Yeah.
Certainly variable more than we would prefer certainly but.
If you look back to the third quarter as you know we had a.
Outstanding quarter.
Third quarter, so probably everything good that could happen happened in some of the deals that we thought would happen in the second quarter last year, we went into the third in a couple of deals that we thought would happen in the fourth happened in the third.
We basically.
That number in the third quarter was a little bit bigger than we expected.
And so it's really driven by lots of variables.
And the uncertainty that's going on in the.
Supply chain and the cost of projects right now is probably just slowing down.
Speaker 1: now is probably just slowing down. It's not stopping deals from happening, but it's probably slowing down the developers getting their capital stacks organized in the right way. So it's really tough to predict. It's not exactly seasonal.
Often deals from happening, but it's probably slowing down.
The developers getting their capital stack organized in the right way. So it's really tough to predict is not exactly seasonal.
Speaker 1: impacted by other economic variables going on. Certainly the demand for the product is never.
Impacted by other economic variables going on but certainly the demand for the product.
There has never been better.
Speaker 2: projects that we have are performing extraordinarily well. Occupancy is really strong. So it's certainly holding up well and demand for new product has never been larger than it is now. So again, it's hard to tell exactly what's going to happen quarter to quarter why we're giving that range, but we we expect to give you that total number for the year as we've telegraphed. Okay, fair enough. And that's all that I had.
The projects that we have are performing extraordinarily well occupancy is really strong. So it is certainly holding up well and demand for new product has never been.
It is now so.
Again, it's hard to tell exactly what's going happen quarter to quarter, why we're giving a range, but we expect to give you that total number for the year.
As we've telegraphed.
Okay Fair enough. That's all I had thank you very much.
Thanks.
Speaker 3: The next question will come from Nathan Race with Piper Sandler. Please go ahead.
The next question will come from Nathan race with Piper Sandler. Please go ahead.
Speaker 1: Yeah, hi. Just a quick housekeeping question on the triple P revenue. Todd, I apologize if you touched on it, but do you have the dollar amount in the fourth quarter? And then just the remaining has yet to be.
Yeah, Hi.
A quick housekeeping question on the Triple P revenue.
I apologize if you touched on it but do you have the dollar amount in the fourth quarter and then just.
The remaining thats yet to be.
Recognize.
Sure Nate I'm happy to give that so in in.
Speaker 4: Sure, Nate, happy to give that. So in Q3, just to give you some context, in Q3 our total PPP income was $1.9 million with...
In Q3, just to give you some context in Q3, our total P. P. P income was 1.9 million with.
Speaker 4: about 300 of that coming from interest and the rest coming from released fees.
About 300 of that coming from interest and the rest coming from released fees.
Speaker 4: And then in Q4, that was down to 1.4.
And then in Q4 that was down to one point for <unk>.
Speaker 4: And the interest was only a little over 100 million of that. So about another 1.2 in fees released there. But we're ending the year 21 with only around 600,000 and remaining PPP fees and only 28 million in remaining PPP loans. So we would certainly expect all those to be forgiven and gone and released by the end of Q1.
And the interest was only a little over $100 million of that so about another one point too in fees released there, but we're ending the year 'twenty one with only around 600000 of remaining P. P P fees and only $28 million and remaining PPP loans.
We would certainly expect.
All of those to be forgiven in Ghana, and released by the end of Q1 here.
Speaker 5: Okay, perfect. I appreciate you guys taking the follow up. Thanks again.
Okay perfect I appreciate you guys, taking the follow up thanks again.
You bet. Thank you.
Speaker 3: Our next question will be a follow-up from Daniel Tamayo with Raymond James. Please go ahead.
Our next question will be a follow up from Daniel Tamayo with Raymond James. Please go ahead.
Speaker 6: Thanks guys. I just wanted to follow up on the asset sensitivity a little stronger than I'd expect. Obviously, you guys have done a great job of moving a lot of those time deposits out, but I just wanted to see how you're thinking about giving the chance.
Thanks, guys.
Just wanted to.
Follow up on the asset sensitivity.
A little stronger than I had expected obviously you guys have done a great job of moving a lot of those time deposits out but.
Just wanted to see how youre thinking about given the chance for multiple hikes this year.
Speaker 6: this year, if that's the impact on the first hike or and if there's any change for incremental hikes either for deposit data assumptions or floors or anything like that in the loan portfolio.
If that's the impact on the first hike or.
And if theres any change for incremental hikes, either for deposit beta assumptions or.
Floors or anything like that in the loan portfolio.
Sure Great question.
Speaker 4: Sure, great question. I'm confident in that guidance of 4 to 5 BIFs in NIM and 2 to 2.2 million in NII on an annual basis. For the first three...
I'm confident in that guidance of four to five bps of NIM in to the $2 2 million in NII on an annual basis for the first three.
Speaker 4: 25 basis point increases. We get out beyond that a little bit. It may have some variability to it, but that wouldn't be just for the first. But I think we're pretty comfortable with that guidance for the first three 25 basis point increases.
25 basis point increases, we get out beyond that a little bit.
It may have some variability to it but that wouldn't be just for the first but.
Think we're pretty comfortable with that guidance for the first 325 basis point increases.
Okay, Great Yeah, that's all I had thank you again.
Thank you.
Speaker 3: This concludes our question and answer session. I would like to turn the conference back over to Mr. Larry Helling for any closing remarks. Please go ahead, sir.
This concludes our question and answer session I would like to turn the conference back over to Mr. Larry Helling for any closing remarks. Please go ahead Sir.
Speaker 1: Thank you operator, I would like to thank all of you for joining our call today. We hope everyone remains healthy and safe during the pandemic. Have a great day, we look forward to speaking with all of you again soon.
Thank you operator, I would like to thank all of you for joining our call today.
We hope everyone remains healthy and safe during the pandemic have a great day, and we look forward to speaking with all you again soon.
Speaker 3: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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