ServisFirst Bancshares Q2 2021 Earnings Call Transcript

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Provided by Quartr
July 19, 2021

Key Takeaways

  • Positive Sentiment: This quarter saw record loan growth with a $517 million increase, driven by commercial real estate and industrial lending.
  • Positive Sentiment: Asset quality remained robust, posting a net recovery of $112 000 and keeping nonperforming assets at just 0.15% of total assets.
  • Negative Sentiment: The net interest margin contracted to 3.06% in Q2 from 3.20% in Q1, reflecting lower yields and rising excess liquidity.
  • Negative Sentiment: Allowance for loan and lease losses was raised to 1.30% of loans amid the end of PPP stimulus and ongoing economic uncertainties.
  • Negative Sentiment: Persistent supply chain disruptions kept line utilization under 39%, well below pre-pandemic levels, limiting additional loan drawdowns.
AI Generated. May Contain Errors.
Earnings Conference Call
ServisFirst Bancshares Q2 2021
00:00 / 00:00

There are 9 speakers on the call.

Operator

Good day, and welcome to the Service First Bancshares Incorporated Second Quarter Earnings Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Ed Woody, Controller.

Operator

Please go ahead, sir.

Speaker 1

Good afternoon, and welcome to our Q2 earnings call. CEO, Tom Broughton, will share his thoughts on the quarter, and then we will hear from Henry Abbott, our Chief Credit Officer and Bud Fochi, Chief Financial Officer for their detailed reviews. We will then take your questions. I'll now cover our forward looking statements disclosure. Some of the discussion in today's earnings call may include forward looking statements.

Speaker 1

Actual results may differ from any projections shared today due to forecasts described in our most recent 10 ks and 10 Q filings. Forward looking statements speak only as to the date they are made, and Service First assumes no duty to update them. With that, I'll turn the call over to Tom.

Speaker 2

Thank you, Ed, and thank you for joining our Q2 conference call. We were very pleased with the quarter. And before I talk a little bit about our results, I'll give you a little bit of background on the Southeast economy. And again, in our conference call, we won't read to you all of our press release. We assume you can read it yourself.

Speaker 2

So if you're new to our call, that's Our practice is not to read from the press release. In the Southeast, we do continue to see lower unemployment compared to the rest of the country. And we hear from all of our customers as employers that they cannot find the needed workers in Almost all industries. It's not just fast food. It's almost every industry.

Speaker 2

So hopefully, as unemployment benefits expire, we will see job openings We do in the Birmingham area, for example, of large metro areas, we have our lowest unemployment rate in the United States at 2.2%. So, it's pretty much a full employment economy in many areas of the Southeast. So, the economy is robust and continuing to I was talking with a customer last night. We had an open house in our new office in Fort Walton Beach, Florida. He said, we can't keep boats in inventory and he was wondering why are people spending so much money and that's what the government says is stimulus money.

Speaker 2

You said it can't be a couple of $1200 stimulus checks. So it is a good question. His theory is that people are just after the pandemic just said, I want to Enjoyed the things I've always wanted to enjoy. The pandemic made people spend money. So it'd be interesting to see as we move forward How the economy moves along.

Speaker 2

And talking about our results, we saw loan growth surge to a record level in the quarter. Line utilization is still well below year end 2019 levels. The line utilization has not improved and the customers continue to report that supply chains are still disruptive. I've been saying that we thought we would see improvement in line utilization this year. It has not happened yet.

Speaker 2

And from talking with customers, the Fed acts like the supply chains are going to be repaired in just a few months' time. But from talking with customers, we don't See that happening. So, it may be towards next year before we see substantial improvement in line utilization. So, we're glad we had some organic loan growth to sort of fill the gap. We do expect to see a second half And 2022 tailwind from construction line draws, we have a number of projects underway that where we expect substantial draws.

Speaker 2

And of course, we do expect line utilization just to improve from inflationary effects of higher prices for Steel, lumber and many other raw materials, so that'll be helpful as well. Our loan pipeline is down 10% from April, but it's still 77% higher than it was at year end 2020 and is at the 2nd highest level ever. Our loan growth is broad based and is centered around commercial real estate and commercial and industrial loans. We do continue to see deposit inflows, though they are more than normal historical growth rates of the mid teens for our bank rather than The large surge in deposits we saw during the pandemic. Our liquidity continues to build to historic levels Despite the record loan growth in the quarter, we are very pleased with asset quality.

Speaker 2

You know, as Henry will talk about in a few minutes, we had negative charge offs in the quarter, and I thought we should have a Celebration and Henry has asked that we postpone the celebration until we could see what happens when we have the withdrawal of government stimulus to Whether it will lead to some uptick in future losses in some loan categories, but Personally, I don't see many businesses struggling except for some that are poorly managed. And now, we'll turn it over to Henry Abbott, our Chief Credit Officer will give a little bit more detail on my credit outlook. Henry?

Speaker 3

Thank you, Tom. Our 2nd quarter results continued the very positive trends started in the Q1 of 2021. In the 2nd quarter, We even showed a net recovery, which has not occurred in at least the past 5 years as far back as I looked, and we continue to show strong asset quality trends across the board. Our numbers generally speak for themselves, so I'll give a few key metrics. Nonperforming assets to total assets were 15 basis points versus 16 basis points last quarter and 26 basis points in the Q2 of 2020.

Speaker 3

Our OREO was roughly $2,000,000 near record lows in our bank's history and in line with the Q1. We had roughly $540,000 in OREO expense for the quarter. I'm pleased to say we posted net recovery of $112,000 for the quarter. As mentioned as far back as I looked, We have not posted a quarterly recovery. Our past dues to total loans were 8 basis points, dollars 6,700,000 a 27% decrease from year end.

Speaker 3

While we are optimistic given the bank's financial performance throughout the past 18 months, We also want to be realistic that the unprecedented government aid helped stabilize various businesses and with PPP Round 2 now complete, Those businesses will have to be self sustaining in this new economic environment. We were pleasantly surprised by the $517,000,000 in loan growth. This is excluding the runoff of PPP loans, which are 0% risk weighted assets, Primarily

Speaker 4

because of

Speaker 3

the loan growth and the above referenced uncertainty given the end of PPP, We grew our ALLL by $9,700,000 in the 2nd quarter. Our ALLL loans, Excluding PPP loans was 1.30@quarterend, up from 1.26@theendofthe1stquarter. We have been diligent throughout the pandemic on our credit servicing to monitor for problem loans, but need to continue to allow for more time to pass to fully understand the long term impact on our clients. Thus, it is appropriate to continue to build our reserve at this time. Our core key credit metrics continue to be exceptional and even improving, which I think can be credited to our high quality customer base as well as our granular and diversified loan portfolio.

Speaker 3

With that, I'll hand things over to Bud Fochi, our CFO.

Speaker 5

Thank you, Henry. Good afternoon. Net interest margin for the 2nd quarter was 3.06 versus 3.20 in the 1st quarter. The adjusted margin was 2.96, excluding the average PPP loan balances of 860,000,000 And PPP interest income and loan fees of $8,000,000 Adjusted margin for the Q1 was 3.08, Excluding the PPP average loan balances of $956,000,000 and PPP interest income and loan fees of 11,400,000 The adjusted margin was 3.19, excluding the increase in excess funds of $525,000,000 First quarter adjusted margin was 3.27 including the increase in excess funds of $411,000,000 The remaining net PPP Deferred fees at June 30 are $16,800,000 $2,200,000 relates to round 1 and $14,600,000 to round 2. CD maturities for the remainder of 2021 are $528,000,000 for the 3rd quarter.

Speaker 5

Average rate on the CDs is 0.95 for the year, 1.11 for the 3rd quarter maturities. We expect majority of these CDs to reprice at 0.40 or below. The repricing will result in a $500,000 annual expense reduction, 290,000 for the 3rd quarter maturities. Our quarter to date cost of interest bearing deposits Decreased is 0.34 in the 2nd quarter versus 0.38 in the 1st quarter. Our quarter end deposit cost, total deposits was 0.24, total interest bearing DDAs 0.24 And total interest bearing deposits 0.34.

Speaker 5

A reminder, we have no accretion income related to acquisitions. Triple P recap, round 1, the balance at year end 2020 was 900,000,000 The balance at June 30, 2021 was $184,000,000 Fees recognized during the 2nd quarter We're $6,800,000 $15,700,000 year to date, and the remaining net fees are $2,200,000 Round 2, the balance at June 30 was $411,000,000 remaining net fees are 14 point $6,000,000 We recognized $1,240,000 of fees in the 2nd quarter $1,450,000 year to date. And the total PPP balance was $595,000,000 at June 30. For forgiveness for round 1 in 2021, it was $379,000,000 for the 2nd quarter, $713,000,000 year to date and for round 2, dollars 6,900,000 for the quarter and year to date. Liquidity, excess funds were $600,000,000 when we started funding PPP loans In April 2020, excess funds at the end of June 30, 2021 were 3,100,000,000 Non interest income, credit card spend improved significantly, dollars 197,400,000 in the 2nd quarter versus $169,800,000 in the Q1 and the Q2 2020 spend was 134,000,000 The credit card net income, 2nd quarter was $1,900,000 The 1st quarter was 1.2 We also had an accrual adjustment of 290,000 in the Q1, which would make 1st quarter net of 1,500,000.

Speaker 5

And Q2 2020, the net was 1,400,000. Our merchant services fee income continues to improve. Year to date 2021 is 480,000 versus 2020 year to date of $234,000 Mortgage banking income, it's 2,700,000 in the Q2 and same amount in the Q1. Q2 2020 was 2,100,000 Reminder, we do not sell any government guaranteed loans to generate non interest income. Recap of our non interest expense, Total producers at the end of 2020 was 133.

Speaker 5

We had 130 4 at June 30, 2021. And total employees at the end of 2020 was 4.99 and at the end of June, 2021 is 534. Our total non interest expenses The Q2 of 2020 was 28,800,000 and the Q2 of 2021 was 31,300,000. With the increases, the FASB 91 deferral increased 1,700,000 The Q2 of 2020 includes deferrals of $2,400,000 related to round 1 of PPP. FDIC insurance increased $800,000 Unfunded commitment reserve In the Q2 of 2021, it was $500,000 Data Processing increased $443,000 and that Increased expense is due to the our current DP provider increase in our contract based on converting to Pyserve.

Speaker 5

Valories increased $326,000 related to new hires in our West Central Florida region in our Fort Walton and Columbus offices. Business mills increased 290,000 Office rent, dollars 235,000 primarily due to our new lease space for the Nashville office. Decreases incentives decreased $1,100,000 The Q2 2020 expense for incentives Was $4,900,000 versus $3,900,000 for 2021. 2nd quarter 2020 included $2,500,000 related to PPP incentives. Net REO expenses decreased 764,000 And then operational losses in Q2 2020 included a $500,000 Accrual for potential loss settlement.

Speaker 5

Capital, slight of $1,600,000,000 increase in deposits. Year over year, the bank's Tier 1 leverage ratio remains well above the regulatory minimum. Earnings retention year to date It's 78.7 percent. Quarter to date tax rate for both 2020 2021 was 21%. The year to date tax rate for 2021 was 20.6% and the year to date rate in 2020 Was 20%, and projected rate for the remainder of this year is 21%.

Speaker 5

This concludes my comment, and I'll I'll turn the program back over to Tom.

Speaker 4

Thank you, Bud.

Speaker 2

Well, we are very optimistic about the rest of the year. As you can tell from The tone of what we've had to say here, we see loan demand has improved. We've seen a bounce back in the economy. There was clearly some pent up demand for loans that we enjoyed in the Q2. So, we are very optimistic.

Speaker 2

Also, You've seen the results of a couple of things. One is that the new bankers we hired in a year ago are seeing substantial loan growth this year, And we expect the same next year. We've had a number of key hires this year that will provide good growth in 2022. The second thing, the reason I would tell you is we're optimistic is we had a policy last year of not working from home. I don't think any of us You know, I missed a day of work last year here in the office.

Speaker 2

So, that's resulted in better customer service Better growth rates than industry average, and we expect that to continue. So with that, we'll be happy to answer any questions you might have.

Operator

Thank you. We will now begin the question and answer session. And the first question will come from Graham Dick with Piper Sandler. Please go ahead.

Speaker 2

Hey, guys. Good evening. Hi, Graeme.

Speaker 6

So obviously, loan growth was really strong across pretty much All of your all's lending verticals. Did the group you all added in Central Florida earlier this quarter Contributed all maybe by moving loans over to Service First. And then also, I think we had talked previously about Organic loan growth maybe being able to at least replace any PPP runoff that might occur. Do you think that it might be possible for you to surpass this Target given what we saw this quarter and how you think the growth outlook is evolving today?

Speaker 2

Graham, we don't expect to have a quarter like that every quarter. So, I'd rather under Promising that we're delivered if possible. So, I think our sort of our goal for the rest of the year is probably look at a $300,000,000 a quarter loan growth to get to where that would be above where Above the $900,000,000 that we had mentioned we'd like to replace. So, yes, that would be It'd be a little above, but not in 500 a quarter is a little aggressive. And actually, we really The hires earlier this year have not had time to do too much.

Speaker 2

Most of the production is coming. It's pretty broad based. Really, the top two regions were West Central Florida and Birmingham. So, Birmingham is just getting Some growth back. We obviously lost C and I loans last year as a result of the pandemic and Triple P stimulus, Not only line utilization, but also people will postpone in projects.

Speaker 2

So, we saw some hit up demand this quarter. And Yes, we think that the teams we've hired this year will produce more so next year, most of what we saw. But we also it's just broad based. It was a pretty broad based, and that was net of we had some payoffs, Including, seeing not really in terms of rate as much as structure, non recourse Lenders coming into our West Coast, lenders coming into our Southeast market in a couple of cases and we have some significant payoffs. So, we're fighting that like everybody else, Graeme.

Speaker 2

It's just a matter of putting on more than you're losing and having a good structure and Well thought out sound credits. Did I answer your question, Craig?

Speaker 6

Yes, absolutely. That's very helpful. And then you guys weren't you're obviously not alone And the liquidity issue that's facing the industry right now, I'm just curious to hear how you think this dynamic might evolve over the next few quarters. I know you said deposit inflows have sort of slowed a bit. But I guess just wondering how you guys are thinking about this and maybe if you'll Had the securities portfolio at all over the next couple of quarters, similar to how we saw in 1Q or 2Q?

Speaker 6

Or if you think it's kind of settled out and you can just Really focused on moving us into the loan book from here.

Speaker 2

You can sit there and argue with yourself all day, Whether to wait for higher rates or I mean, I was at a dinner several years ago and I said, when rates go up, and a man looked at me to control the largest bank in Japan. And Tom, I've been waiting for rates to go up in Japan for 10 years. I came back and told Bud, we don't know we need to quit waiting. We need to buy some securities now. So we kind of have a strategy of just trying to Split the difference, Graham, we do a little we're not going to say we're waiting for higher rates.

Speaker 2

I mean, we everything I say says we're going to have inflation. But I mean, Show me find me an economist Scott and Rich doing accurate economic forecast, and I'd like to shake his hand. I don't think he or she exists. So the best thing we can do is just we'd like to find more loans, good short term loans at floating rates Or short fixed rates and securities portfolio, we tend to agree with most everybody else in the industry yet. When the Fed eventually puts buying every security that's created, there'll be a little bit better yield and you can get them.

Speaker 2

But Can't find mortgage backed short mortgage backed don't really exist almost. Not a good yield anyway. Yes. You have seasoned paper, you're going to probably get about 80 basis points.

Speaker 6

Okay. That's helpful as well. That's it for me. I'll hop out of the queue. Thanks and congrats on a great quarter, guys.

Speaker 2

Thank you, Brian. Thank you.

Operator

The next question will come from Kevin Fitzsimons with D. A. Davidson. Please go ahead.

Speaker 7

Hey, good afternoon, guys.

Speaker 2

Hey, Jim. Good afternoon, Jim.

Speaker 8

Tom, I guess, on the subject At the beginning of the call, you talked about the line utilization and maybe it seems like You're a little less hopeful than you were last quarter in terms of that coming back. And Maybe if you could just what's kind of driving that? Is it just more you mentioned talking to customers, but Just what's driving that shift in thinking?

Speaker 2

Yes. Just you can't get the supply chains are just they're still broken. People Companies cannot get inventory. And it's just it's the darnest economy I've ever seen, Kevin. I mean, People buying houses, cars, boats, I mean everything.

Speaker 2

You can't even get a bicycle. I mean, why bicycles in short supply? I mean, it's just None of this makes any sense in a way. So, the companies are so the answer is, I thought supply chains based on what Ben has been saying, but they clearly don't know much more than we know. They're not splicing aren't getting rebuilt very quickly.

Speaker 2

So We're not counting on the line utilization improvement in the short term. I think if I had to guess, I guess they're going to improve in probably the 4th quarter, Kevin, but I don't see it. I don't see gaining back the $300,000,000 in loan volume we lost Last year, I don't see gain in the back of this year. I hope that we get 100 half of it back, say, 150,000,000 Maybe I'm a little less optimistic on that today than I was last quarter, but we've got to count on organic loan growth to get to where we need to be.

Speaker 8

But I guess other than the line utilization, you kind of were characterizing the organic growth you have Quarter is more of a real it really got accelerated because of this pent up catch up, I guess, and that you still expect it to be healthy over the balance of the year, but not explosive like what you saw this quarter. Is that accurate?

Speaker 2

Yes. A lot of what I think we're seeing out there in the economy is a lot of so many companies got a Triple P stimulus, they really didn't need to sustain operations. With hindsight, they didn't need it. They thought they needed it. And Hopefully, they're going to pay those pay that money out in dividends and people are going to buy them a new boat and then they'll start using their line of credit here again, Get a new airplane and a new boat.

Speaker 2

So airplanes in short supply too. So everything is selling. Pretty amazing.

Speaker 8

Yes. Just one last one for me. You mentioned about the new hires in the new markets in terms of their Contributing are there if we think the economy is going to continue to reopen and there's a lot of there's Additional growth out there, are you looking at any additional markets or making moves to invest in any new markets that you're not Currently in

Speaker 6

right now.

Speaker 2

Yes, we're talking to teams in a couple of markets. Nothing's In the next couple of months, Kevin, but one would probably be towards the end of the year and one would be probably towards the sometime the end of Q3. So, we also still look at the bolt ons. We like the bolt ons to An existing region are also very profitable for us when we can add people that are Use the support of the regional hub. We're talking to a lot of people right now.

Speaker 8

Okay, great. That's all I had. Thanks, Tom. Thanks, Budd. Thanks.

Speaker 2

Thank you,

Operator

Kevin. The next question will come from William Wallace with Raymond James. Please go ahead.

Speaker 7

Thanks. Good afternoon, guys. Hope you all are well.

Speaker 2

Yes, sir.

Speaker 7

I'd like to maybe circle back on the liquidity question. I'm just kind of looking at some of the balance sheet items. Obviously, the cash is up about $1,000,000,000 Your deposits are up about $1,000,000,000 Why are you Putting on Fed Funds purchase, those are up a couple of 100,000,000. I mean, you've got so much liquidity. Why do you need to grow it in that line?

Speaker 7

Does that have something to do with A different line item or are you worried about some deposits or something?

Speaker 4

Well, this is Rodney rushing. And No, we're not worried, but we've got over 300 downstream correspondent banks that have accounts with us. And like us, they're flushed with cash, so they're selling us more of the funds. One thing we have done We're moving as much as we can into DDA so that those banks can pay for There are Fed charges and other services with an earnings credit. But To answer your question, correspondent, balances have grown and they'll probably continue to grow over the next couple of quarters.

Speaker 4

We're adding accounts and we to us, it is core deposits because it acts Just like a corporate cash management account, we're a company we bank As their main working deposit account here, they pay all their bills, run all their business Through that DDA account and then it automatically sweeps into our money market or they automatically borrow their line from us if they need it. That's exactly how our corresponding accounts work. And we loan them money in Fed funds or we buy the Fed funds and They're flush and we're flush right now, but we perceive it as valuable deposits. I hope that answers your question.

Speaker 7

I think so. Do you have to carry slightly more liquidity against those deposits just given potential volatility?

Speaker 4

Well, that's a good question. Right now, Budd is selling that excess liquidity to the Fed. We did use this opportunity to lower our when the Fed went up, what they were paying on excess reserves From 10 basis points to 15, we did not increase on our regular Fed funds. We could take that money and sell it

Speaker 2

to the Fed as agent,

Speaker 4

And we could do that in the future if we wanted to. Right now, we just choose not to. We're buying at all as principal and so on our balance sheet.

Speaker 7

Okay.

Speaker 2

And Wally, the regulators would love us to have more and more liquidity. You cannot have too much liquidity With the regulators. It is a champagne problem to have.

Speaker 7

No, that's yes, fair. I agree. Okay. And You highlighted it in the press release and you highlighted in the prepared remarks, but I still don't understand what it is That you're referring to with the PPP forgiveness going away that's causing you to build your reserves to loans up. I mean, it seems like all of the metrics that we see are positive economically.

Speaker 3

Yes. And I would say it's not as much The PPP forgiveness for the PPP going away and that the added stimulus and the government support is being tapered. And that as you said, the credit metrics in general are all positive, but we have lost out on some support these businesses had. That coupled with the loan growth of $500,000,000 were kind of the drivers in increasing the reserve.

Speaker 7

So from here, is it safe to assume that you feel like you've from an utmost of caution, you kind of guide it to where it And then assuming we continue to see the economic metrics that we all watch and that are variables in your CECL model that we would start to see some release?

Speaker 2

Well, and also, Wally, I think we it's taken us a year sometimes to collect on the SBA guarantee. So nobody has really tried to collect on any of these PPP loans from the SBA yet. So, we could get You think this call will be clean and neat, but it's sometimes dealing with the government is just a little bit messy. So we're just prepared for every eventuality. It's not a lot of considering we've made a we've got about A few $1,000,000 in a little reserve there, but we booked $1,500,000,000 in PPP loans.

Speaker 2

So it's not By comparison, it's not a lot of money. But that's part of the question too, Wally, is just whether the forgiveness will Work properly and if it doesn't, do they try to avoid a guarantee in some fashion? So

Speaker 7

if I remember correctly, I believe you had actually set aside some reserve early on against the PPP loans just in case, but I was looking at the reserves excluding all the PPP loans. Have you built that sort of I don't know what you would call it, but that reserve about potential PPP loans Have you built that more?

Speaker 3

Wally, no, I don't in the past, we have not had a specific reserve on PPP loans. We did this quarter set aside, as Tom mentioned, a small reserve associated with Potential for fraud, we know of no fraud. We have been successful in our forgiveness that we've applied for. But at the end of the day, On $1,000,000,000 there might be some issues related to fraud. So we just want to be conservative in setting aside some funds for that Potential and as Tom mentioned, nobody has applied for the SBA to actually pay on their guarantee versus pay on the forgiveness.

Speaker 3

So Just making sure we're kind of marked a little bit there, but that's not a huge factor in our model.

Speaker 7

Okay. Moving on, what are the utilization rates? I believe you might have told us last quarter, but just in case, Tom, where are we sitting right now?

Speaker 2

Yes. We're at 38.77 at the end of the quarter. It was up from 37.67 in the into the Q1, but in the end of 2020, it was at 39.54%, but going back in time, at the end of 2019, it was 48.12%. So,

Speaker 4

we're a

Speaker 2

full 10 percentage points below where we were before the prior to the pandemic. Okay. And also, my problem with SBA loans is always traditionally has been that When one administration takes over from another administration, they try to undo what the prior administration did. And so that's actually what we've got in place is we've got the Republican administration did the PPP program and now we have a new administration in place and It just it pays to be cautious in preparing to deal with the SBA. Not that we've had very great experience with them, absolutely no issues whatsoever at this point in time, Lal.

Speaker 2

It's just It's best to be prepared.

Speaker 6

Yes, understood. Okay.

Speaker 7

And then one last question, just kind of housekeeping thing. Bud, I believe you mentioned that it was $8,000,000 PPP net interest income in the quarter in the release it says $8,000,000 of net fees. Does that $8,000,000 does that include the interest income? Or were you just citing the fee Acceleration or total fees that were booked as part of NII?

Speaker 5

Let me go back to my script, see what I had.

Speaker 4

Your script, Buzz, says interest income and loan fees of 8,000,000

Speaker 5

Yes. I'm saying it's both from what I had.

Speaker 7

Okay. Okay.

Speaker 2

Yes.

Speaker 7

Okay. All right. Very good. That's all I had. I appreciate you all taking the time.

Speaker 7

Take care.

Speaker 2

Thank you,

Operator

then

Speaker 2

one.

Operator

And this will conclude our question and answer session. Actually, it seems that we have a question that just came in from Mr. Graham Dyck with Piper Sandler. Please go ahead.

Speaker 6

Hey, guys. Just one follow-up here on PPP, mainly as it pertains to expenses. It doesn't look like you guys did much in the way of PPP originations this quarter, but I was just wondering if there was Any FAS 91 deferred origination costs incurred this quarter? Or if you guys are pretty much behind that and this $16,900,000 salary level is similar to what we might see over the next couple of quarters?

Speaker 5

No, I don't remember it was not a significant amount in the Q2. That was mainly in the first I don't have the exact number. I Send that to you, but yes, most of that occurred in the Q1 for round 2.

Speaker 6

No, no. Okay, that's perfect. That's all I wanted. That's great. Thanks.

Speaker 2

That's a good question. Thank you, everybody.

Speaker 4

If there are

Speaker 2

no more questions, thank you.

Operator

Yes, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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