Q1 2022 Pacific Premier Bancorp Inc Earnings Call
Good day and welcome to the Pacific Premier first quarter 2022 earnings call. All participants will be in a listen only mode should you need assistance. Please signal our conference question, Justin Portman deal.
After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your Touchtone phone.
Is it a question. Please press Star then two please.
Please note. This event is being recorded I would now like to turn the conference over to Steve Gardner Chairman and CEO . Please go ahead.
Thank you operator, good morning, everyone. I appreciate you joining us today.
You're all aware earlier. This morning, we released our earnings report for the first quarter of 2022.
We have also published an updated investor presentation that has additional information on our financial performance.
We have not done so already we would encourage you to visit our investor relations website to download a copy of the presentation.
In terms of our call today I will walk through some of the notable items Ron Nicolas Our CFO will review a few of the financial details.
And then we will open up the call to questions.
I noted in our earnings release and Investor presentation, we have our safe Harbor statement relative to the forward looking comments and I would encourage all of you to read through those carefully.
Overall, we delivered solid financial performance in the first quarter, driven by strong loan and deposit production generated net income of $66.9 million or 70 cents per share.
The quarters results are reflective of our disciplined approach to growing capabilities of our teams.
And the benefits of our technology driven growth strategy.
Notwithstanding our RF our performance in the past quarter.
We are mindful that the macroeconomic dynamics and global geopolitical Edmonds into.
Produce a new level of uncertainty that must be managed prudently.
Although it is typical to see some level of production seasonality at the beginning of the year.
Our bankers were able to generate nearly $1 billion in new loan commitments essentially the same level as the prior quarter.
Which reflects our focus on consistent business development that results in new client acquisition and expanding existing relationships that meet our high credit standards.
Given the deep and talented teams, we have built and the expertise we have developed.
We have well balanced production in the first quarter across all of our lending segments.
Commercial line utilization rates increased as our business clients responded to the higher levels of activity. They are seen as the economy expanded and moved beyond the pandemic impacts.
During the first quarter, the average utilization rate on commercial lines of credit increased to 39.5% from 35, 2% last quarter, while the quarter end spot rate was 41%.
The combination of loan production increased utilization rates and a lower level of prepayments and payoffs translated into 12% annualized loan growth in the first quarter.
Importantly, we were able to fund our loan growth with strong inflows of low cost core deposits, which increased 13% annualized.
With the first quarter's loan growth, we continued to drive a favorable mix.
The favorable shift.
And our mix of earning assets and as such we anticipate an expansion in our net interest margin and higher levels of interest income as we move through the year in conjunction with the expected increase in the fed funds rate.
During the quarter, we were successful in terms of attracting new talent across the company that will support our growth and risk management objectives.
We are benefiting from our reputation as a high performing organization.
And we were able to add quality talent.
They bring a level of sophistication knowledge and deep client relationships from larger regional and national banks.
And keeping with our core value of continuous improvement.
The talent, we are adding as an enabling us to expand and upgrade our capabilities in many areas of the company.
Given the macroeconomic and geopolitical issues that intensified during the first quarter. Our team has sharpened its focus on risk management.
During the quarter. The Federal Reserve began what is widely expected to be one of the most rapid tightening cycles in decades that will occur simultaneously with a contraction of its balance sheet in an effort to address high inflation.
In a relatively short period of time rich to the economic outlook have increased creating a more uncertain operating environment.
Our long track record of success and ability to build franchise value through varying cycles is attributable to the effective balance that we were able to strike between profitable growth and risk management.
While we have been adding new clients and customers and expanding existing relationships, we have been mindful of the potential for a changing environment.
We have been taking proactive steps to position our balance sheet to manage interest rate risk and mitigate the impact we may see from a potential deterioration in economic conditions.
The actions we've taken over the last few quarters include re.
Reducing the size and duration of the securities portfolio, and increasing our liquidity with higher cash balances.
Maintaining strong levels of tangible common equity growing total capital and maintain the overall high levels of regulatory capital ratios.
Adding $1.2 billion of fixed to floating rate swaps, which increased our asset sensitivity.
Adding $600 million in low cost term, <unk> advances, which reduced our interest rate risk and.
Making refinements to our seasonal model to reflect a greater impact from supply chain disruption inflationary pressures and geopolitical unrest than what is reflected in Moody's current economic forecast.
These actions reflect our commitment to prudent risk management and operating with a long term perspective.
Well some of these actions have had a short term impact on earnings there.
They are helping us maintain important flexibility.
To capitalize on the opportunities that may arise from a variety of outcomes.
With that I'm going to turn the call over to Ron to provide a few more details on our first quarter results.
Thanks, Steve and good morning.
For comparison purposes. The majority of my remarks are on a linked quarter basis, let's.
Let's start with the income statement.
Highlights for the first quarter included total revenue of $187.7 million as net interest income was $161.8 million and noninterest income $25 $9 million.
Pre provision net revenue totaled $91 million or 172% of average assets.
Noninterest expense in the first quarter was consistent with our prior expectations at $97 $6 billion and our efficiency ratio equaled 57.
7%.
Lastly.
Asset quality remains favorable and at historically low levels.
I will provide more detail on our ACL and asset quality later in my remarks.
Net interest income decreased $8 $9 million to $161.8 million, primarily due to a $2 $6 million and lower interest income due to two less days in the first quarter and nearly $5 million in lower loan related prepayment fees and accrete.
<unk> income as loan prepayments fell 23% from the prior quarter.
Our reported net interest margin came in at 341% for the quarter and the core net interest margin narrowed five basis points to 333%, which included the impact of six basis points due to the aforementioned lower loan related fees, partially offset.
The favorable shift in our earning asset mix where.
Where are we strategically reduced the size and duration of our securities portfolio to fund loan growth during the quarter.
With the expectation for increases in the fed funds rate, we would see incremental benefit in future quarters to the net interest income and net interest margin of $1 $2 billion of notional overnight sulfur based fixed to floating rate swaps.
As of March 31, the fair value of the swaps.
Amounted to $38 $7 million.
Looking ahead to the second quarter of 2022, we expect our core net interest margin to be in the range of $3, two 5% to 3.30% excluding the potential benefit of the swaps.
This includes the full quarter impact of the $600 million and F. H L. B term borrowings at a blended rate of 2.15%.
Noninterest income of $25 $9 million decreased $1.4 million from the prior quarter, largely due to $1 $5 million of lower security gains.
And escrow fees decreased $560000.
As a result of seasonally higher transaction volumes in the fourth quarter compared to the first quarter.
Going forward, we expect our noninterest income for the second quarter to be in the range of $23 million to $24 million, excluding any security sales.
Consistent with our expectations noninterest expense was essentially flat at $97 $6 million compared to $97 $3 million in the fourth quarter.
Salaries and benefits increased to $57 million, reflecting a partial quarter impact of annual merit increases as well as higher payroll taxes.
Staffing overall increased to 577 employees as we continue to make strategic investments to hire key people to support the business.
Professional expense decreased $1 $8 million due to the timing of certain legal and professional fees.
Our noninterest expense should approximate $99 million to $100 million in the second quarter, reflecting the full quarter impact of higher compensation costs.
Okay.
The first quarter provision for credit loss of $448000 was.
It was driven principally by loan growth and the increasing uncertainty of downside macroeconomic risks due to higher inflation, increasing interest rates and supply chain challenges.
Turning now to the balance sheet.
First quarter results reflected both strong organic loan and deposit growth loan production for the quarter totaled 1.4 dollars $6 billion, an increase of 27% over the first quarter of 2021.
Average loan balances increased $366 million, while average securities decreased $287 million.
The decrease in average securities was attributable to our actions to shorten duration and add liquidity to the balance sheet.
Additionally, we moved approximately $642 million of available for sale securities to held to maturity during the quarter, bringing the total held to maturity portfolio to just under $1 billion.
On the funding side, we continue to grow noninterest bearing deposits, which increased to 42% of total deposits.
And our total cost of deposits remained unchanged at four basis points.
As noted we added $600 million in FHL beef borrowings to bolster liquidity and provide additional interest rate protection from projected higher interest rates and.
And increased cash balances by $505 million at quarter end.
Going to the evolving environment.
Our combined cash and securities portfolio represented just under 25% of total assets.
Okay.
Tangible book value decreased to $19.12 at March 31, compared with $20 and 29 at December 31, with the higher interest rates, we had $1 44 per share negative impact to tangible book value for the mark to market loss on our <unk> portfolio.
Leo.
I'd like to note that all else being equal these mark to Mark losses will accrete back to capital over time.
Despite the OCI loss, our tangible common equity to tangible assets ratio remained a solid 879% as of March 31.
And finally from an asset quality standpoint.
Asset quality remained strong despite an increase in nonperforming loans of $25 $3 million related to a single credit where we believe we are well collateralized.
Nonperforming assets overall remained at very low levels at two 6% of total assets compared to 0.15% in the prior quarter.
Net charge offs totaled $446000 for the quarter compared with a $1 million recovery in the prior quarter.
And lastly, our allowance for credit losses ended the quarter at 1.34% and the total loss absorbing capacity comprised of the allowance plus the remaining fair value discount on acquired loans totaled $268 7 million at quarter end, our 1.81% of loans held for investment.
<unk>.
With that I'll hand, it back to Steve.
Great. Thanks, Ron.
I'll wrap up with a few comments about our outlook.
We've seen positive trends to begin the year.
Our clients have proven resilient and loyal as their businesses and investments continue to generate strong cash flow.
Pacific Premier clients Trust and value the relationships they have with our bankers and they look for us for innovative technology enabled products and services.
Our loan pipeline remains strong at $2 $1 billion, and we are experiencing strengthening in line utilization rates as well as lower prepayment and payoff rates.
However.
We expect loan production to moderate over time as we have meaningfully increased new loan origination rates in recent weeks.
Additionally, we anticipate that the operating environment, which has changed quickly over the last quarter.
May become more challenging as a result of the confluence of rapidly rising interest rates high inflation and the ongoing disruptions caused by geopolitical events.
As always we are being proactive disciplined and prudent as we think through these emerging risks and preparing for a variety of macroeconomic environments.
The current level of uncertainty creates a wider range of outcomes than what we expected at the beginning of the year.
At this point, it's difficult to forecast the degree to which these challenges may impact loan demand and weather businesses and investors may delay their planned investments until there is greater clarity.
But as always we will maintain our disciplined pricing structuring and underwriting of new credits.
Well as proactive portfolio management.
The discipline is a key aspect to our approach that has enabled the organization to performed well through a variety of cycles.
Lastly, we will maintain our focus on delivering long term value for our shareholders clients and the communities we serve.
We believe with our nimble technology enabled business model capital strength and operating expertise, we are well positioned to take advantage of organic and strategic growth opportunities.
Profitably expand our franchise.
That concludes our prepared remarks, and we'd be happy to answer any questions.
She will you please open up the call for questions.
Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
Using a speakerphone please pick up your handset before pressing the keys.
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At this time, we will pause momentarily to assemble our roster.
Our first question comes from David Feaster with Raymond James. Please go ahead.
Hey, good morning, everybody.
Good morning, David.
I just wanted to first I guess follow up on your commentary in the prepared remarks talking about adding talent and are capitalizing on the disruption from from some larger M&A, just curious where you're seeing the most opportunities are there any segments or geographies, where you're seeing more opportunity than others and or are you looking at potentially filling in some gaps in the foot.
Print or entering new segments or verticals with some new hires.
So there's a lot of questions there, David let me try to take them.
I cover but.
Whole gamut.
Generally it it's it's not geographic specific it's throughout the markets. We're operating in and it's it's in a variety of roles, whether its production or operations credit Treasury management or the like.
Generally we don't look to initiate or enter new new market segments or lines of business.
Didn't nobu approach, if you will or hiring of teams. It's just not what we've done.
That return on investment.
Her experience is it takes a long time and it's a high level of uncertainty we've had four grader.
Opportunities and success through acquiring whether it's wine whether it's oh.
Our specialty lines of business and of course hold banks.
Okay that makes sense and then just maybe touching on the fee income side I appreciate the 23% to $24 million guidance just wanted to get some of the puts and takes there, especially with the trends that youre seeing on the trust side, just given the volatility in the markets and then curious whether your guidance includes any adjustments or you know.
Adjustments on NSF for overdraft fees.
Yeah.
We have very little in the way of NSF overdraft fees.
Generally for a long period of time.
Very conservative and in that respect and I think as you know a.
Very little of our deposit base is consumer related.
I didn't get that takes Ron and our guidance takes into consideration all the factors that we're seeing in the marketplace and as we're thinking about.
How they will impact us.
Here and obviously the guidance was for the second quarter, but moving forward from the trust side of the business we have made.
So great progress and strides there.
I think I do well I know I've talked about it quite a bit.
On on how we spend time building the foundation to ensure operational excellence there that has really come along.
Over the last six months and during that period of time have been building up.
The sales team and our outreach and meeting with clients.
So we're certainly encouraged about the opportunities that that line of business presents.
To continue to grow it.
Okay, and then just wanted to follow up too on your commentary about being able to meaningfully increase new loan yields just curious if you could give us any color where you're seeing the most opportunity to push pricing and then just how the competitive dynamics are on the pricing front, how new loan yields are trending and whether you are.
Starting to see.
More more aggressiveness from the competitive landscape in terms of terms or structures.
Well it was a bad.
We had made a mid late part of Q1 that we began.
Really in earnest moving up pricing.
That's continued.
Right.
Yeah.
Some of our as far as the competitive landscape and I I don't know that I would necessarily.
Quantify it as.
We moved pricing up because we saw opportunity was just a reality of what we were seeing and of course occur on the yield curve.
And so how we priced credits in general from a.
Competitive standpoint.
<unk>.
We've seen a few of them.
Our competitors.
Move pricing.
And but you know hey, if that works for them.
So be it for us.
We're thinking about our future.
Future impacts.
Look we've got the fed.
That is talking about.
Generally the markets are pricing then.
As I mentioned pretty aggressive rate increases.
The remaining part of this year.
And coupled with.
A shrinking balance sheet of $95 billion, a month that although that hasnt been put in stone and that's the expectation here beginning.
As early.
As may or June .
We think that that is.
He's going to have an impact.
In the market, we don't know exactly how but that's how we're thinking about it and that's what's driven us to really.
Moved pricing up and I think even more so about overall risk management.
Alright I appreciate it thank you.
Certainly.
The next question comes from Matthew Clark with Piper Sandler. Please go ahead.
Hey, good morning.
Good morning.
Okay.
Maybe just starting with.
The uptick in non accruals that C&I relationship can you just give us a sense for what.
What what the situation is there the resolution process you know the type of business expected loss. It sounds like there's some collateral there if not.
Fully covered.
Yes.
Any any expected loss we've already.
Taken the charges on.
And as is bad.
As you know.
And most I think most folks.
We moved through problem.
Problem credits fairly aggressively and that'll be the case here.
I would expect our team to get it resolved if it's not this quarter next quarter fully and Ah that that approach that we take a proactive approach serves us well.
I mean at this point, we're not seeing any degradation in cash flows and any <unk>.
Segment, we're going to have like I think anybody who extends credit an occasional one off situation and that's the case here.
Okay, and the type of business, though just I know it sounds one off but just curious.
Yeah.
It's Ted.
They're located in L, a and and they have a variety of business interest.
I'm not going to comment specifically on it it's not really it's not really related to any segment that were seeing any of the supply chain disruptions per se or or maybe some of the other challenges around.
Commodity pricing.
Okay.
And then maybe just.
Moving to the reserve.
Didn't come down.
As much as <unk>.
We might have thought.
Seems like part of that is the growing uncertainty in the economic environment, which is.
Prudent.
But is it fair to assume that we.
We might stabilize above day, one or do you feel like.
We could still approach day, one it's kind of seasonal level.
Aye.
That seems so long ago that was pre pandemic.
Pre everything that we're we're looking at 40 year highs and inflation, a fad that's going to tighten the fastest in decades shrink their balance sheet.
We've got Lockdowns in in China impacting supply chains, we have the.
The war in Ukraine impacting commodities I don't know that we have that any sense of how all of this plays out from a reserve standpoint relative to and.
And as the day, one <unk> reserve levels. So that's my high level thoughts I don't know if Ron maybe you have some more specifics that you might like to add.
Steve The only thing I would add is I think you held it I, it's very difficult to say what is normalized.
At this juncture, so I think it would be premature to.
Now to even even take a swag at it so.
I like your answer.
Yeah totally.
Yes Matthew.
Just to add to it that you know the way that we think about the ACL along with the credit discounts that we.
We have so that.
Loss absorbing capacity of 181 basis points is also it's similar approach that we have in capital management and how we're thinking about.
Our capital ratios.
The composition of our capital I think we're frankly in a great position.
Depending upon how the economy evolves over the next several quarters, we'll be able to take advantage of opportunities.
And I like where we stand today.
Great and then just.
On that point on capital.
I would I would suspect that buyback is on hold for now.
But maybe just confirm that and then.
Just your latest.
No trend in conversations with potential targets.
Sure. So I I, our approach to capital management debt buybacks in particular has not changed we've talked about the fact that it.
Historically, we'd be opportunistic around buybacks.
But that also factors in an.
Our outlook.
For for.
For the bank.
For our portfolio for the.
The economy as a whole so we'll continue to think about it but we have that available.
To us and we certainly have.
A very strong levels of capital.
As far as conversations we're having conversations.
We're looking at and considering and we have been for several quarters various opportunities.
I think what remains as true as similar to what I've said in the past is that ideally we.
Sure.
We're pursuing transactions that are going to move the needle and really add franchise value and we take in consideration.
The current environment, and how that might impact Tom.
Targets and if it is going to really add to the franchise value not only being financially accretive and attractive.
Great. Thank you.
Yeah.
Certainly.
Our next question comes from Chris Mcgratty with <unk>. Please go ahead.
Great.
Thanks, Steve.
Following up on Matt's question about capital does does the rapidly changing.
Economic outlook and also the rate outlook.
The economics of deals more challenging to get over the finish line given the given the marks is that something that would prohibit.
The near term consummation of the deal.
No.
Yes. It is.
As a factor of course that we consider Chris and we are looking at.
And you certainly of course have to have a meeting of the minds of of the two parties the two boards.
But that doesn't.
Clued it.
We've always had our own perspective on on maybe what are the value of an entire franchise is and we obviously we place.
Nearly all of the value on the liability composition of that institution, the deposit base and what is the extent of the relationships and then figuring out what the marks are whether it's a credit mark or <unk>.
Interest rate Mark.
You know to a certain extent, it's just math.
Obviously, the volatility in the equity markets and with it with.
With all banks.
For some maybe make it more challenging but I've told folks that look we've bought institutions. When we were trading below $1 20 of tangible book and Who's bought institutions. When we've been trading at two five times or you know high single.
P multiples or mid teen P/e multiples, it's all relative to the market and really ultimately from the way that we think about it can you put the two institutions together and create greater value and returns for the combined shareholder bases.
Over a period of time that either of.
Either institution would have done on their own and that's how we think about it.
That's great color if I could.
One more on deposits that's been a hot topic. This quarter you, obviously had nice growth I guess the question would be given the commercial nature of the balance sheet have you done any kind.
Kind of analysis that would potentially identify.
A sliver of the book that might be higher risk of either flight or or beta that that.
That might move off over the next couple of quarters.
On ones.
Yeah.
One I would think that it's hard to know exactly what's going to transpire.
For the entire industry, but keeping our deposit base and that is predominantly relationship based with business owners com our belief in at least history.
We actually have a slide in in the.
Investor deck.
Mentioned and referenced about our.
Our deposit beta at least in the last tightening cycle, how it behaved.
And we certainly think that over the years, we've continued to solidify and strengthen our relationships with our business owners.
If I think about a particular segment, we don't do a lot, but we have a little bit in in municipal deposits I don't know Ron if you have any number I think it's around 500 million or less.
They tend to be maybe a little bit more price sensitive and given the fact that.
We're also really sensitive to pricing, meaning we're not going to move it up much.
It's potential that they find somebody else, but we know that's probably available to them today, we know theres institutions out there offering higher pricing already Rondi I don't know do you have that number.
Yeah, Steve you know youre spot on it's about it's about $500 million in your your characterization of that is spot on the only other thing I would I would add Chris is that when we model of course.
Do our internal modeling here you talk about doing the analysis. The segment analysis. We do model you know our deposit betas are higher than what we've actually experienced as highlighted on slide 19 in the investor deck and and also we do show a little bit of negative migration in other words coming out of the noninterest bearing to the interest bearing so all are.
That does.
It's prudent to model it in that respect and into some of the things that Steve highlighted earlier in his in his prepared comments you know take a more prudent approach to risk management and actions in that so you see a lot of our actions are driven by you know trying to be very thoughtful and analytical and.
In terms of the way we model this.
That's great. Thank you very much supposed to.
Our next question comes from Andrew <unk> with Keybanc. Please go ahead.
Hey, good morning.
Hi, good morning.
Steve I know you guys have been very disciplined and kind of historical underwriting and I know you've pulled back some in the past when things don't make as much sense in the market, but love to just hear any kind of thoughts on I guess, what portfolios if any you're watching more closely right now and then just given kind of the macro.
Drop.
Tied to kind of pull back the reins a little better.
Any color there would be helpful.
Yeah.
Are we watching any portfolio more so no not really we're watching them all real closely.
That is historically been our approach we have not pulled back or changed.
Materially any of our underwriting analysis.
You know the folks that we look to bank com, we're looking for.
The whole relationship and.
For good solid businesses.
And investors that have a track record.
Managing the business <unk> assets.
Pretty conservatively, we've always been a cash flow.
Underwriter, where we're not.
Loan to value I know, there's a lot of folks like the focus on it we we report it but that is not never has been our focus.
Has always been on the existing.
Cash flows the quality the durability of those cash flows in a variety of environments and that's something that we're going to.
Continue to monitor it.
When I commented around the potential for moderation in in new loan activity.
Just think about it that if you know rates have moved as much as they have and that we have.
But that has the potential to moderate activity it would be great. If it if it doesn't and the economy continues to expand at the pace that it did we're very well positioned to take advantage of that.
But it would seem to me that with this kind of higher rates that we're looking at.
You've got to put a damper on at least maybe the refinance activity that takes place we're seeing that to an extent in a slump in the slowdown of the prepayments and the payoff rates in the portfolio.
Okay.
Got it that's really helpful. I appreciate it.
If I can move over to Ron.
Core NIM guidance for the second quarter I think it was 325 to $3 30.
Excluding the potential benefit of the swaps.
How many rate hikes do you have and.
Within that.
Within that core NIM guidance if any.
For right now we've got the.
Let's see we've got the two rate hikes that are projected here in may and June are in there.
And of course the of.
The addition, again of the full quarter impact of the FHL B, which is about six basis points.
On a linked quarter basis.
To the core to the core NIM. So so you've got the two hikes in there one in May and one in June . So those are partial benefits with the full quarter impact of the of the at a fixed term FHL b.
Okay, just to clarify the <unk> was fixed rate.
Yes, yes that is correct to one 5%.
Okay.
It was a layered over a two and three.
Period.
Yes.
Okay.
Perfect. Thank you both for taking my questions.
Youre welcome.
Our next question comes from Gary Tenner with D. A Davidson. Please go ahead.
Thanks, Good morning.
Steve you talked about kind of the liquidity build in the quarter ending the quarter cash and cash equivalents little over $800 million.
You know in total securities were down combined assets in held to maturity.
How are you thinking about kind of cash flows off the securities portfolio from here in terms of kind of building a little more liquidity or would you expect to reinvest those cash flows.
I think we'd expect to see into two.
To reinvest those cash flows.
Gary but.
We do we are thinking about how things are going to play out not only as the fed.
Raises rates.
As they do and as Ron said, we have this meeting coming up here in early May another meeting in June and July and simultaneously with that.
They begin to contract the balance sheet.
And I think from our standpoint, we're thinking about how does this play out how does it impact the <unk>.
The industry, how does the industry respond to then in turn.
How does that impact us and our clients and the like.
So at some point, we're certainly generally.
We're looking at it.
Now as we speak but I think that as you can hear in our voice and as we've talked about it there is a level of uncertainty and we think it's prudent to be maintaining higher levels of.
Liquidity capital and the like and reserves in this environment until we get a little bit better clarity here.
And so that's how we're thinking about it.
Okay got it makes sense for sure.
In terms of the quarterly cash flows off the portfolio. Ron can you give us a sense of kind of where you expected.
I can answer to that is the next quarter or two.
Yeah. The the portfolio cash flow is probably in the neighborhood of about $80 million to $100 million little over $100 million a quarter of the securities portfolio.
I'm sorry per quarter.
Per quarter per quarter Okay.
Okay. Thank you and then just a follow up on the swaps was the entire $1 2 billion added here in the first quarter was there any portion of that that was.
Already outstanding at year end.
No that was Gary that was layered in.
And the.
Last six months of 2012 and in three three different.
Tranches, if you will back in July again in October and again in December .
And.
That's also on a ladder base.
Basis as well so we feel we're in a very good position there.
And just to clarify that's 2021 and.
Thanks.
I may have heard.
12.
Oh, I'm sorry 2021.
Okay. That's all helpful. Thank you.
Yep.
This concludes our question and answer session I would like to turn the conference back over to Steve Gardner for any closing remarks.
Very good thank you.
I would also before I end the call here right. We'd also like to note that we recently published our inaugural corporate social responsibility report.
To highlight the impact that.
Our teams are having in so many different areas and that report is available on our website.
Thank you again, all for joining US we look forward to.
Talk to deal with.
At the end of the second quarter.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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