Q4 2023 First Bank Earnings Call
Okay.
Okay.
Hello, and welcome to the first Bank Conference call. Please note that this call is recorded after today's presentation, there will be an opportunity to ask questions in the Q&A session instructions will be provided before opening the floor for questions I'd now like to hand over the call to Patrick Ryan President and Chief.
Patrick Ryan: Please go ahead.
Patrick Ryan: Thank you I'd like to welcome everyone today to first bank's fourth quarter 2023 earnings call I'm joined by our CFO, Andrew Hibshman, Our chief retail banking Officer, Darwin Gillespie, and our Chief lending Officer, Peter Cahill before we begin Andrew will read the Safe Harbor statement.
Patrick Ryan: True.
Patrick Ryan: Okay.
The following discussion may contain forward looking statements concerning the financial condition results of operations and business of first bank. We caution that such statements are subject to a number of uncertainties and actual results could differ materially and therefore, you should not place undue on any forward looking statements. We make we may not update.
Andrew Hibshman: Any forward looking statements, we make today for future events or developments information about risks and uncertainties are described under item one a risk factors in our annual report on Form 10-K for the year ended December 31, 2022 filed with the FDIC that back to you.
Patrick Ryan: Thanks, Andrew I'd like to start with some high level remarks, I will then turn it over to Peter Darlene and Andrew can provide a little more detail and then of course I will open it up for Q&A session at the end. So overall I think the fourth quarter was a nice finish to the year, we realized strong core earnings growth as a result.
Andrew: Both our balance sheet repositioning as well as the slowly improving interest rate environment in particular, I'd like to call attention to our net interest margin, which finished the quarter at 368%, which was an increase of 32 basis points compared to the third quarter margin and Andrew will provide some detail around the components.
Andrew: Of that margin improvement during the quarter as.
Andrew: As a result of the margin improvement and otherwise a good operating results. We saw our return on tangible common equity finished the quarter at $15 seven 5%, which was our highest level since the first quarter of 2021 and in that quarter. We had the benefit of PTT income. So we were really pleased to.
Andrew: See that nice strong return on tangible common equity number and I also wanted to point out that as a result of our actions taken during the fourth quarter. We believe we've now match the cost savings targets that we laid out when we announced the merger and Andrew can provide a little more detail on that.
Andrew Hibshman: A couple of non core items that occurred during the fourth quarter worth pointing out we sold an additional $21 5 million in low yielding investment securities, which generated a loss on sale of $916000. We also sold $35 6 million and non strategic commercial real estate loans.
Andrew Hibshman: With a loss on that sale of $3 8 million, we added an additional 338000 in merger related costs, which will.
Andrew Hibshman: Finalize the expenses related to the merger and during the quarter, we actually had a positive.
Andrew Hibshman: Credit loss amount.
Andrew Hibshman: Because of the overall flat loan growth as well as the modestly improving economic outlook. Some of the financial highlights that you saw in the release the adjusted return on assets was 138% annualized the.
Andrew Hibshman: The adjusted earnings per share for the quarter was 49 cents, our tangible book value per share increased three 2% during the quarter and our efficiency ratio remained below 60%, which has been a target of ours and something we've achieved for the past 18 quarters.
Andrew Hibshman: In summary, I think the fourth quarter earnings provide some really good initial insight into the improved earnings power of the franchise both from the additional scale through the acquisition as well as from our more streamlined balance sheet.
Andrew: At this point I'd like to turn it over to Andrew to get into a little more detail around the financial results for the quarter Andrew.
Andrew: Thanks, Pat for three months ended December 31, 2023, we recorded net income of $8 4 million or <unk> 33 per diluted share as Pat mentioned, excluding some additional merger related expenses and the losses on sale of loans and investments we saw a nice uptick in our net income to $12 four.
Andrew Hibshman: Or a dilutive EPS of <unk> 49 per share and adjusted return on average assets of 138% fourth quarter. Net income was also impacted by certain tax adjustments to our deferred tax assets based on changing state tax apportionment calculations, which led to the lower effective tax rate in Q4. However, we do expect.
Andrew Hibshman: Our quarterly effective tax rate to be back closer to our historic rate of between 23% to 25% as we head into 2024.
Andrew: Net income was also positively impacted by a negative credit loss expense.
Andrew: Which was due to the low level of charge offs during the quarter and strong credit metrics and the improving economic outlook as Pat mentioned, coupled with a limited loan growth. This led to our allowance for credit losses to total loans declined slightly to one 4% from $1 four 2% at September 30th.
Patrick Ryan: During the fourth quarter, we continued our strategy of repositioning our balance sheet and sold some additional investments in loans, which improved our future earnings profile helped us manage liquidity levels and will help us to optimize our use of capital because of the commercial loans sold were 100% risk weighted assets the impact from the transaction even after the loss.
Pat Smith: Recorded was a net increase to our risk weighted regulatory capital ratios. This partially contributed to the increase in our overall risk based capital ratios at the end of December compared to the prior quarter.
Excluding the loan sales net loans increased $36 3 million during the fourth quarter. This growth primarily came from higher yielding commercial and industrial loans. The weighted average rate on new loans originated during the fourth quarter of 2023 was $8 three 5% compared to $4, 89% on the loans sold during the quarter.
Pat Smith: Total deposits were up 114000 during the fourth quarter of 2023 noninterest bearing balances increased $8 1 million, which was offset by a decline in interest bearing deposits bearing the balances of $7 9 million. The total cost of deposits was up 16 basis points during the fourth quarter compared to 28 basis.
Pat Smith: Oint increase in the third quarter of 2023.
Pat Smith: Primarily due to the benefits of the Malvern acquisition and the balance sheet repositioning that occurred during the end of the third quarter and into the fourth quarter of 2023, our net interest margin improved from 336% in the third quarter of 2023% to 368% in the fourth quarter.
Pat Smith: We also benefited from a full quarter of acquisition accounting accretion, which had an approximately $3 9 million positive impact on net interest income.
Pat Smith: Excluding the acquisition accounting income impact we estimated that the margin improvement was approximately 17 basis points, which was due to an approximately 30 basis point increase in earning asset yields excluding the acquisition accounting accretion, which outpaced the 15 basis point increase in the cost of interest bearing liabilities.
Pat Smith: Is that pricing pressure has subsided, which should help the margin in 2024, and we will also benefit from the February 2020 for redemption of $25 million in subordinated debt that was inherited from Malvern, which currently carries a $9 seven 9% rate.
Pat Smith: The redemption will have a slight negative impact on our total risk based capital ratio, but the impact is muted because of the capital credit. We are receiving for these notes has been reduced to 40% in the first quarter of 2024 as the debt instruments are now three year under three years from their maturity date.
Pat Smith: Liquidity levels during the fourth quarter increased as we used proceeds from asset sales to help fund new loans, but we also added some <unk> advances and brokered Cds to increase our on balance sheet liquidity as we head into 2024, we still have significant unused borrowing capacity and we have additional commercial loans that we can pledge to the FHA.
Patrick Ryan: To increase our borrowing capacity if needed.
Patrick Ryan: In the fourth quarter of 2023 total noninterest income declined primarily due to the aforementioned losses on loan and investment sales, which were net against noninterest income.
Patrick Ryan: Noninterest expenses were $17 9 million in Q4, 2023 or $17 $6 million, excluding merger related expenses.
Patrick Ryan: <unk> expenses, excluding merger related costs increased $1 1 million or six 9% from the prior quarter, primarily due to a full quarter of additional expenses from the Malvern acquisition, but also some timing related items that inflated professional fees increased regulatory fees, primarily due to the impact of the Q3 results.
Pat Smith: It impacted the FDIC fees higher end marketing expenses that were elevated due to some increased marketing efforts and donations towards the end of 2023. These increases were offset some by additional malware related cost savings during the quarter, mainly related to salaries and employee benefits. We continue to focus on our operating <unk>.
Pat Smith: <unk> and we believe we've met our cost savings goals from the Malvern acquisition, but we still have opportunities to generate some additional cost saves and improve efficiency metrics as we head into 2024.
Although we continue to operate in a difficult rate environment. The Malvern acquisition, coupled with the balance sheet reposition repositioning we executed during the second half of 2023 has us positioned for strong core profitability in 2024 at this time I will turn it over to Darlene <unk>, our chief retail banking officer for her remarks.
Sure. Thank you Andrew and good morning, everyone.
Darlene: Start off by saying that we had a good year, despite the unprecedented banking environment and the deposit challenges of 2023.
Darlene <unk>: During the fourth quarter the bank continued to experience.
Darlene <unk>: A significant deposit activity, we rolled out a deposit campaign that assistant with the organic deposit growth. In addition to delaying some of the attrition we were experiencing in our time deposit portfolio as a result of the competitive rate environment.
Patrick Ryan: And while our deposits were flat basically during the fourth quarter as a result of letting higher rate money leave. We then replaced it with a noninterest bearing funding our non interest bearing balances actually increased $8 1 million and while we continue to focus on strategies to bring in low cost.
Andrew Hibshman: Is it.
Andrew Hibshman: That is part of our thought process and strategic focus.
Andrew Hibshman: Throughout 2024.
As we enter 2023 most of those losses were partly due to deposit fluctuations. However, a little of it was due to closure of accounts.
Andrew Hibshman: This was a factor in the decline in our interest bearing liquid balances. However, it was offset somewhat by growth in our time deposit portfolio during the quarter and this shows that some of those dollars actually moved into this portfolio.
Andrew Hibshman: While this is not a strategic initiative to grow our time deposit portfolio. It is the nature of the rate environment. We are in as customers continued to be rate sensitive I'll reiterate as I've mentioned.
Andrew Hibshman: That we know our clients and their balances have declined they remain loyal customers to our bank.
Andrew Hibshman: As Andrew mentioned, our cost of deposits increased 16 basis points in Q4.
Andrew Hibshman: Is less than the increase we experienced in Q3.
Andrew Hibshman: Again, a result of the rate environment, but overall, we are managing this metric by letting go of higher rate funding.
We continue to work with our bankers and we're having conversations with our customers around managing our pricing or promotional non maturity deposits in anticipation of potential rate cut this year. This.
Andrew Hibshman: This is another strategic focus for 2024 to continue to manage our costs, while still providing competitive offerings to our existing customers as well as prospects.
Andrew Hibshman: In summary, non interest bearing non interest bearing funding managing our cost of deposits and organic growth will continue to be key drivers relative to deposit activity in 2024, we realize the environment will remain challenging. However, we are extremely optimistic regarding what.
Andrew Hibshman: We will be able to accomplish this year.
Andrew Hibshman: At this time I will turn it over to Peter Cahill, our chief lending officer for his remarks Peter.
Peter Cahill: Thanks Sterling.
Peter Cahill: So as you just heard and read in our earnings release for the fourth quarter was another busy one for the lending area.
Peter Cahill: Loans generated by the teams represented an increase in total loans of $36 million.
Peter Cahill: However, the team also facilitated another loan sale is coincidentally also totaled $36 million and resulted in an overall flat growth for the quarter.
Andrew Hibshman: Pat and Andrew both mentioned those loans sold consisted of lower returns non strategic commercial loans.
As we've mentioned in previous quarters, and as Pat mentioned in the earnings release, we've had a disciplined approach to new business and our focus has been on what we think will be profitable relationships, which means relationships to bring in deposits as well as other adequate pricing.
Pat Smith: This also means a greater focus on C&I loans, which include owner occupied real estate and you can see in the schedules in the earnings release that those segments are headed in the right direction.
Pat Smith: When I looked at all new loans booked during 2023, only 26% of them were investor real estate loans for comparison in 2022, 53% of new loans closed and funded with Investor Real estate in 2021, Investor Real estate loans comprised 58% of our total new.
Pat Smith: Loans.
Andrew Hibshman: We know that there are more deposits on average tied to C&I loans. So those are our big focus will continue to do business in the Investor Real estate area major part of the economy in our markets, but we will be putting the majority of our sales folks to growing our C&I book of business.
Patrick Ryan: Throughout the year, one thing, we always need to deal with our loan payoffs and we tried to track why loans pay off prior to maturity in 2023, 53% of payoffs took place because the underlying asset was sold.
Patrick Ryan: Too much about customers selling their assets.
Patrick Ryan: This number is up from the previous couple of years in 2022, 49% of payoffs came from asset sales and in 2021, the number was only 42%.
Patrick Ryan: Normally most of those payoffs were related to investor real estate loans over 50%.
Historically, but we also saw.
Patrick Ryan: To see a sizable number of C&I payoffs where businesses are sold.
Patrick Ryan: He asked me or sale leasebacks and things like that take place.
Patrick Ryan: Usually comment on our loan pipeline. During these calls our pipeline at December 31 stood at $210 million of what we call probable fundings basically unchanged from the September 30th level of $212 million.
Patrick Ryan: Our average for the 12 months of 2023 was $214 million and the number of loans in the pipeline does not change significantly over that timeframe.
Patrick Ryan: Overall, I'm happy with where the pipeline stands as we begin 2020 for our sales teams are out actively looking for good business.
Patrick Ryan: Regarding asset quality I don't have much to add to.
Patrick Ryan: The earnings release States I think overall credit quality is good and basically unchanged over the quarter.
Patrick Ryan: No surprises from the former Malvern portfolio I see no areas of real weakness in the portfolio as a whole.
Patrick Ryan: Our objective is as we move further into 2024 is to organically grow loans and deposits, where we can gain relationship business in.
In addition to our regional teams are private equity fund relationship management team is doing well.
Patrick Ryan: New asset based lending group had some big wins in Q4 and has developed a solid pipeline.
Patrick Ryan: On the small business front, we recently shifted our SBA unit into a more formalized small business group, where management is shared with our business express product that product is for smaller business loans and deposits.
Patrick Ryan: And we expect this will create some good synergies moving forward.
Patrick Ryan: Those are the highlights from lending and conclude my comments related to the fourth quarter ill turn things back over now to Pat for any final comments.
Pat Smith: Thank you Peter and Thanks, Darlene and Andrew at this point I think we're through the prepared remarks and.
Pat Smith: We'd like to open it up for the Q&A session.
Pat Smith: Thank you.
Pat Smith: Now opening the floor for the question and answer session, if you'd like to ask a question. Please press star and number one on your telephone keypad.
Pat Smith: Thus far our number one on your telephone keypad. Our first question comes from Justin Crowley from Piper Sandler Your line is now open.
Pat Smith: Hey, good morning, guys.
Pat Smith: Good morning, guys I wanted to.
Justin Crowley: I wanted to start on the margin in the quarter first I wanted to see if you can share your expectation just on purchase accounting assumptions going forward. If you have them and then maybe also on a more core basis.
Justin Crowley: Just with some signs of stabilization are you at a point where loan yields are starting to offset what you anticipate seeing just as far as the lag.
Justin Crowley: And the pickup on the funding side.
Justin Crowley: Yes.
Andrew Hibshman: I'll give you a couple of data points, and then let Andrew add some detail Justin but.
Andrew Hibshman: $3 9 million was the purchase accounting number during the quarter.
Andrew Hibshman: Obviously, that's about $1 three a month.
Andrew Hibshman: That number will continue for a while as I'm sure you know it.
Andrew Hibshman: Arts to amortize down a little bit over time, but.
Andrew Hibshman: Over the course of the year in the first couple of years.
Andrew Hibshman: Theres not theres not a lot of decline in that number, but Andrew can give a little bit of color as we looked at this.
Andrew Hibshman: Margin, excluding the purchase accounting.
Andrew Hibshman: It looked like we actually saw some nice margin growth in the quarter, even without that purchase accounting. So I think overall the margin was up 32 basis points and we had pegged about half of that was driven by kind of the core underlying improvements IAA loan yields.
Andrew Hibshman: We're going to exceed the increases in loan yield starting to see the increases on the deposit side. Obviously, we saw some mix improvement as we sold off some lower yielding assets and repositioned it either into cash or our higher yielding asset so.
Andrew Hibshman: We saw some really good really good trends on the margin Andrew anything you want to add in terms of the run rate on the purchase accounting stuff.
Andrew Hibshman: I think you hit it right.
Andrew Hibshman: Should stay fairly close and obviously as the loan portfolio starts to pay down that number starts to roll down but in 2020 for the number.
Just kind of rolls down fairly slowly so it's a pretty good estimate of kind of what the run rate will be based on the fourth quarter.
Andrew Hibshman: Okay got it I appreciate it.
And then you spoke about some of the traction in noninterest bearing.
Andrew Hibshman: Is that an area that you think you can continue to improve as especially as the C&I Buildout remains focus just taking into consideration to some of the commentary on growth, which seems pretty positive just looking out through the year.
Andrew Hibshman: Yeah, well listen it's certainly a.
Andrew Hibshman: Core strategic priority number one two and three so if we don't continue to grow and it won't be for lack of effort or investment but.
Patrick Ryan: Noninterest bearing balances, obviously sensitive right they move up and down based on the cash flow needs.
Patrick Ryan: Needs of the business that has those operating accounts with US I think we're doing a good job attracting new clients and bringing them on board that that sales cycle takes a while then it takes a while to get them on boarded and get those accounts fully funded so there tends to be a lot of variability from month to month and quarter to quarter with.
Patrick Ryan: The overall noninterest bearing balances obviously, if you look back at 2023, a lot of money within that category in the sector last noninterest bearing and moved over either to bond funds.
Patrick Ryan: Money market funds or just out of niv into Cds and money markets. So we're hopeful that a lot of that movement of excess money out of noninterest bearing into interest bearing accounts has played out at this point, but.
Patrick Ryan: Thats, a guess right. We don't know if we'll still see some of that underlying trend during the course of the year end.
Peter Cahill: As Peter mentioned.
Peter Cahill: We're very focused on growing in the C&I areas that we think can help drive.
Peter Cahill: Noninterest bearing balances as well so.
Peter Cahill: Whether we'll hit our targets or not time will tell but I think we've got a healthy goal to grow in that area this year and.
Andrew Hibshman: We're investing a lot of time effort and money to make that happen. So.
Andrew Hibshman: Yes.
Andrew Hibshman: Let's see how it plays out.
Andrew Hibshman: Okay, and then just one last one on the margin, but just thinking about the prospect of rate cuts.
Andrew Hibshman: And then also factoring in wanting to generate deposits to grow.
Andrew Hibshman: If and when we do get rate cuts what are your thoughts on being able to bring rates down. After the first few cuts and just the idea of what betas will look like as if rates move lower.
Andrew Hibshman: Yeah, it's a good.
Patrick Ryan: Question, It's obviously a critical question to the margin assumptions going forward.
Patrick Ryan: The short answer is time will tell right historically I think banks have been very good at following the sad and lowering rates quickly lap.
Patrick Ryan: That being said the fed still slowly pulling money out of the system.
Patrick Ryan: Lot of banks have loan to deposit ratios today, they're a bit higher than they were a few years ago. So.
Patrick Ryan: We might not see the same pace of decline that we've seen in prior cycles, but.
Patrick Ryan: It's really going to ultimately depend on the overall level of liquidity in the market and what banks are doing on the lending side, what we're seeing and hearing is there's several banks larger banks that are sort of in a holding pattern in terms of new loan.
Patrick Ryan: Production and as a result that should reduce some of the strain on the overall liquidity in the system, which should translate into an ability to lower deposit costs quickly, but obviously theres several that were in that statement right. There. So we'll see how it plays out.
Patrick Ryan: Okay got it and then just on the expenses in the quarter.
Patrick Ryan: It's maybe some lingering cost tied to the Malvern <unk> opportunities to maybe.
Patrick Ryan: Some additional efficiencies you know how much of that is from malware and how much of that is maybe on an organic basis, just trying to think about run rate off of.
Patrick Ryan: The expense level that we saw in the fourth quarter.
Patrick Ryan: Andrew you want to jump in on that.
Andrew: Yes sure yes.
Andrew Hibshman: Yes, there is some there was some.
Andrew: <unk> in the fourth quarter outside of Malvern too just some elevated expenses associated with some professional fees and things like that so there's definitely some opportunities too.
Andrew: Get some additional saves.
Andrew: Pretty much got everything out of Malvern from the cost saves estimate so I think we've hit that number there are some additional stuff related.
Andrew: Some other little areas, where we may be able to generate some additional efficiencies that are directly related to Melbourne, but we pretty much hit the cost saves there, but we're always looking for opportunities for savings. So I think there is room to move it down slightly but again, then you get into new year, and we start seeing some cost increases in other areas. So.
Andrew: I don't see the fluctuation in noninterest expenses being significant but there are some opportunities to continue to drive that number down slightly but maybe offset by some other increases.
Andrew: I expect noninterest expenses to be relatively stable, but with some opportunities to continue to gain some efficiencies as we head into the new year.
Andrew: Okay. That's helpful. And then just one last one but is it still fair to assume share repurchases or maybe on the shelf for the time being just as capital rebuilds and just given some of.
Andrew: Your expectations on the growth side of things over the coming year.
Andrew: Yeah.
Andrew: Listen for the time being I would say, probably yes, right, but at the end of the day.
Andrew: The two variables are our overall capital position and.
The price, we can get the shares that so.
Andrew: At levels at or above book value not to say those aren't attractive levels to buy but we probably prefer to build some capital in the short run but.
Andrew: We also see with the improved earnings profile, the ability to retain earnings and grow capital quickly. So.
If for some reason the the price of the stock got real attractive then we would obviously take a look at it.
Andrew: Okay, Great I will leave it there. Thanks, so much for taking the questions.
Andrew: Yeah no problem. Thank you Joseph.
Andrew: Our next question comes from Nick <unk> from Hovde Group. Your line is now open.
Andrew: Good morning, everyone. How are you.
Nick: Good good how are you Nick thank.
Nick <unk>: Thank you just one for me on the loan front. The franchise has historically been a high single digit organic grower for many years given the larger balance sheet, especially after the Malvern addition, how are you thinking about the natural rate of growth going forward, especially with the emphasis on the C&I initiatives.
Nick <unk>: Yes, I would tell you Nick that.
Nick <unk>: It's an interesting market right now because as I mentioned with <unk>.
Nick <unk>: A players.
Nick <unk>: Sort of on the sidelines, there's lots of good opportunities to build relationships with quality commercial borrowers.
Nick <unk>: And I think we're very well positioned given our size and our.
Nick <unk>: <unk> our brand.
Nick <unk>: Customer segments to take advantage of that.
Pat Smith: It's going to be what can we fund at reasonable prices based on good core deposit growth. So.
Pat Smith: The ultimate level of loan growth is going to be driven not by whether there are good opportunities, but can we.
Pat Smith: Our success on the deposit growth side to be able to fund those with good core accounts. So that's really the nature of the current market and.
Pat Smith: We will see how the deposit story plays out during the course of the year and I think that'll be the main driver of how much new loan business, we ended up doing.
Pat Smith: Sounds good. Thank you for taking my question.
Pat Smith: Sure. Thank you Dan.
Pat Smith: If you'd like to ask a question. Please press star and number one on your telephone keypad. Our next question comes from Manuel Nava from D. A Davidson your line is now open.
Pat Smith: Hey, good morning, I, just wanted to Dave how are you.
Pat Smith: I am well and well just wanted to jump back into the margin for a moment.
Dave: There's a lot of moving pieces you have the sub debt coming off in the first quarter could you see kind of the NIM.
Manuel Nava: Decline next quarter, but then kind of build back up with the sub debt benefit and maybe decelerating deposit costs across the rest of the year.
Manuel Nava: Wow.
Manuel Nava: You asked could we see that yes, we could I am not sure Thats, what we anticipate.
Manuel Nava: Yes, some of the some of the trends outside of the purchase accounting that drove the improvement in Q4, we think we will we will continue and.
Manuel Nava: The benefits of the balanced balance sheet repositioning will continue to bear fruit and obviously the purchase accounting income will be there at least for the next several quarters. So.
Manuel Nava: We'll see how successful we are in terms of generating new deposits and what we need to pay for them but.
Manuel Nava: I would like to see the margin at least stay where it is if not maybe get a little better. So Andrew I don't know if you have any thoughts based on what you're seeing.
Andrew Hibshman: Year numbers.
Andrew Hibshman: Yes, I think thats right Thats. The goal I mean, I think if the first quarter is is flat I don't think that we'd be upset about that but I think there is opportunities for improvement and as you said.
Andrew Hibshman: Pathway through the quarter, we're going to get a pretty big benefit of $25 million rolling off at almost 10%. So we definitely have some tailwind I think.
Andrew Hibshman: Deposit pressures is definitely subsiding so.
Andrew Hibshman: I'm excited about kind of where things are headed and I feel good about at least being able to keep that margin stable.
Andrew Hibshman: Hopefully continue to see some improvement, especially as we get that sub debt off the books in the middle of the quarter.
Andrew Hibshman: Okay.
Andrew Hibshman: That's great color are there any other kind of action that still remain out there that you're considering.
Andrew Hibshman: Do you feel like most of them.
Andrew Hibshman: Are done at this point just kind of what can still happen what are you considering an and.
Andrew Hibshman: How close are you to.
Andrew Hibshman: Setting up the balance sheet fully.
Andrew Hibshman: Yeah listen I think at this point, whatever we do would be opportunistic based on.
Andrew Hibshman: What we see in terms of market pricing and other things I think we're at a size now where we should be regularly exploring.
Patrick Ryan: Asset sales and.
Patrick Ryan: If the transaction makes sense I think we will do it if it doesn't make sense.
Patrick Ryan: We're happy where we are so I think we're in a good position, we don't need to do a lot too.
Patrick Ryan: Further change the nature of the balance sheet, but if we have opportunities to sell assets that we believe are non core for whatever reason in the market pricing is good then we may take advantage of that but I don't think it would be.
Patrick Ryan: Huge huge portfolios per se, it's more just the.
Patrick Ryan: Smaller pieces here or there, where we might have changed our view on an industry segment or something like that so.
Patrick Ryan: That's really helpful on the securities.
Patrick Ryan: Sold some securities what was the yield pick up there and.
Patrick Ryan: Any more color on that would be great and what is the what are the end the quarter at the securities book yield any more color on that transaction would be helpful.
Andrew Hibshman: Yes, I'll, let Andrew jump in there and that.
Andrew Hibshman: I don't have the specific.
Details of the yield pick up here in front of me.
Manuel but what.
Andrew Hibshman: What we did was it was a small amount of securities towards the back end of December as the kind of the bond market moved in our favor we kind of opportunistically shed some some lower yielding investments, but it's not going to make a significant impact on the.
Patrick Ryan: On the overall yield on investments or the overall yield on the portfolio because it wasn't a huge transaction, but I don't I don't have the details here in front of me, but that was the rationale for it we saw some movement in the bond market, we took advantage of it.
Patrick Ryan: I don't think we're going to be doing a lot of additional investment sales at this point, but we'll obviously Pat mentioned continue to be opportunistic if we see opportunities to sell some.
Some lower yielding stuff, we may take advantage of that but nothing significant on the investment side at this point, we have pretty much sold all all the investments inherited from Malvern. So there isn't really any.
Patrick Ryan: Segments of the investment portfolio that we feel like we need to get out of or anything like that at this point.
Pat Smith: Thank you I'll hop back into the queue I appreciate the comments.
Pat Smith: As of right now we don't have any questions coming in I would now like to hand back over to the management for the closing remarks.
Pat Smith: Okay well. Thank you so much we appreciate everybody who took the time to.
Pat Smith: Listen in and ask questions on the call. We appreciate your interest in first bank and we'll look forward to being back in front of everybody.
Pat Smith: When we have the results from the first quarter, so that will conclude the call. Thanks, so much.
Pat Smith: Thank you for attending today's conference have a wonderful day.
Pat Smith: Okay.
Pat Smith: [music].