Premier Financial Corp (OHIO) (PFC) 2010 Q3 法說會逐字稿

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  • Operator

  • Good morning, and welcome to the First Defiance third-quarter 2010 conference call. All participants will be in a listen-only mode. (Operator Instructions). After today's presentation, there will be an opportunity to ask questions. (Operator Instructions). Please note this event is being recorded.

  • I would now like to turn the conference over to Mary Beth Weisenburger with First Defiance Financial Corp. Please go ahead.

  • Mary Beth Weisenburger - Director of Marketing

  • Thank you. Good morning, everyone, and thank you for joining us for today's third quarter 2010 conference call. This call is also being webcast and the audio replay will be available at the First Defiance website at fdef.com. I'd like to mention that currently we are experiencing severe weather in our area and we are hoping that power and connections are not disrupted during this call.

  • Providing commentary this morning will be Bill Small, Chairman, President and CEO of First Defiance; and Don Hileman, Executive Vice President and Chief Financial Officer. Following their prepared comments on the Company's strategy and performance, they will be available to take your questions.

  • Before we begin, I'd like to remind you that during the conference call today, including during the question-and-answer period, you may hear forward-looking statements related to future financial results and business operations for First Defiance Financial Corp. Actual results may differ materially from current management forecast and projections as a result of factors over which the Company has no control. Information on these risk factors and additional information on forward-looking statements are included in the news release and in the Company's reports on file with the Securities and Exchange Commission.

  • And now I'll turn the call over to Mr. Small for his comments.

  • Bill Small - President, Chairman and CEO

  • Thank you, Mary Beth. Good morning, and thank you for joining us to review the 2010 third quarter results. Last night, we issued our earnings release for the third quarter. And this morning, we would like to discuss our financial performance during the period and what we see ahead of us for the balance of the year. At the conclusion of our presentation, we will answer any questions you might have.

  • Joining me on the call this morning to give more detail on the financial performance for the quarter is our CFO, Don Hileman. Also with us this morning to assist in answering questions is Jim Rohrs, President and CEO of First Federal Bank.

  • Third quarter 2010 net income on a GAAP basis was $2.3 million or $0.22 per diluted common share, compared to $329,000 and a negative $0.02 per diluted common share in the 2009 third quarter. For the nine-month period ended September 30, 2010, First Defiance earned $5.8 million or $0.53 per diluted common share, compared to $6.6 million or $0.66 per diluted common share for the nine-month period ended September 30, 2009. Significant net interest margin improvement was a positive in the third quarter, but earnings were again challenged by provision expense as well as mortgage servicing rights impairment.

  • The 2010 third quarter results continued to show a number of significant indicators that the core operation is running strong. Non-interest income was very strong during the period with mortgage production at record levels during the quarter, leading to strong mortgage banking income.

  • We also saw growth in income from insurance and investment services. The deposit mix continued its favorable trend, as period end balances and non-interest bearing deposits were up and CD balances were down compared to the linked quarter and third quarter 2009.

  • The quarter was not without its challenges however, asset quality had a significant negative impact again during the third quarter as we booked $5.2 million in provision expense and also had a significant amount of collection in OREO expense.

  • The low interest rates during the period resulted in a mortgage servicing rights impairment charge of over $500,000 again this quarter. We also recognized additional other than temporary impairment and certain collateralized debt obligations in our portfolio during the third quarter, Don will give you more detail on these in his remarks.

  • Asset quality remains our primary focus, it is a priority to identify any weaknesses in performance or collateral as early as possible and to monitor and analyze each credit to assure proper levels of reserves. The provision expense in the second quarter was significantly driven by adjustments to several previously recognized problem loans where additional reserves were added for deteriorating collateral values. We've increased the allowance for loan losses to total loans to 2.66% as of September 30, 2010. We feel it is prudent for us to make conservative -- to take a conservative approach in establishing reserves as the economy continues on this sluggish pace.

  • Charge-offs for the quarter were up slightly over the same period last year, but were down significantly compared to the linked quarter. As explained earlier this year, we do expect the charge-off levels to run higher than our historical performance over the next several quarters due to a number of credits migrating through the work out process for final disposition.

  • Improvement in the net interest margin was obviously the highlight of the quarter. We were very pleased to see the efforts of the disciplined pricing strategy pay off in the margin performance. Maintaining that discipline is going to be very important, as it appears we are going to remain in a low rate environment for several more quarters. Or there may be some limited room on the deposit side of the balance sheet to aid this, pricing on the asset side must be watched closely.

  • Non-interest income results for the third quarter 2010 were significantly higher than September 30, 2009 results primarily due to the much higher mortgage loan production. The historically low interest rate environment has trigged strong mortgage loan demand and even though this is primarily refinancing activity we continue to pick up new relationships and increased our servicing portfolio. Unfortunately the effect of the low mortgage rates also has a negative impact through the MSR impairment charge taken this quarter offsetting some of the gain on sale of mortgages.

  • We also saw improvement again this quarter in insurance commissions, trust income, and income from bank-owned life insurance over last year and the linked quarter. The increase in non-interest expense relates to several different items, compensation costs increased primarily due to performance-based variable compensation. FDIC insurance expense was also up this quarter with higher premiums and higher deposit balances. I mentioned the expense related to collections in OREO earlier, this amounted to an increase of $1.6 million over third quarter 2009 amounts.

  • I will now ask Don Hileman to give you additional financial details for the quarter before I wrap up with an overview and a look at what we see developing in the months ahead. Don?

  • Don Hileman - EVP and CFO

  • Thank you, Bill, and good morning everyone. The third quarter saw improved profitability with strong mortgage banking income, driving non-interest income, as well as higher net interest income. Credit quality continues to significantly impact earnings with high level of provision for loan loss. Credit and collection costs have increased over the third quarter last year on a linked quarter basis. Our markets are continuing to show the impact of the difficult economic environment. We are seeing some moderation and reduction in unemployment at our market area, but it continues to have a major impact on most of the economies we serve.

  • We continue to see isolated signs of improvement in our markets with some businesses showing stronger 2010 operating results compared to 2009. We believe the overall trend is indicating improved economic activity, however it will be choppy and take time to solidly develop with an extended ramp-up period well into 2011.

  • As we review our financial performance, overall credit quality remains a major factor and will impact on our performance. However we will also have -- we also have several areas -- other areas with stabilizing or improving trends, such as net interest income.

  • I will begin with a discussion on credit quality. Our provision expense totaled $5.2 million, down from $8.1 million in the third quarter of 2009 and down from $5.4 million on a linked quarter basis. Our allowance for loan loss increased to $41.3 million or 2.66% of total loans from $31.2 million or 1.92% at September 30, 2009 and from $38.9 million or 2.47% of total loans at June 30, 2010.

  • The third quarter provision exceeded charge-offs by $2.5 million as we provided additional specific reserves for several credits that we determined require further write-downs in order to liquidate in a timely manner. This reserve build is consistent with our anticipation of higher near-term charge-offs. Annualized net charge-offs were 70 basis points for the third quarter of 2010, compared with 66 basis points in the third quarter of 2009. Of the total charge-offs, 29% related to commercial and 24% related to commercial real estate loans.

  • The provision this quarter was driven primarily by an increase in the specific allowance necessary on a substandard commercial real estate loan of $2.6 million, and an increase of $500,000 on residential loan, along with a modest increase in the general reserve. The general reserve was impacted by an increase in the qualitative component of the general reserve based on near-term trends in non-accrual loans, classified loans and delinquency loans while the quantitative component of the general allowance, which is based on historical charge-off levels, declined slightly. And this time, we believe it is appropriate to operate with higher than historical levels of general loan loss reserves due to the continued levels of high unemployment, lower real estate value, economic weakness and uncertainty in our market area, as well as the current regulatory environment.

  • As we see improvements in our asset quality trends as well as in the economy, we will be more confident as to the future direction of asset quality. However, we will need to see a sustained period of improvement to be comfortable that the economy in our market has truly turned the corner.

  • The provision for loan losses is the adjustment we make to the allowance for loan losses necessary for the allowance to be adequate. Based on the losses we estimate to be in the portfolio, our review considers numerous factors in determining if it is appropriate to adjust the economic, environmental, and risk factors we use in determining the general portion of the reserve for loan loss when we assess the adequacy of the reserve.

  • We maintain a continuous process of analysis and review of our loan portfolio. As loans move through the credit resolution process, one of the alternatives is for the bank to take control of the real estate collateral by either way of foreclosure or by obtaining title voluntarily from the borrowers in lieu of foreclosure.

  • Our OREO balance declined on a linked quarter basis and ended the third quarter at $11.1 million. We had additions of $1.2 million in the third quarter of 2010 offset by sales of $900,000 in valuation adjustments of $1.6 million. We are seeing more interest from potential buyers of these properties as they go to auction or are listed for sale with an expectation of lower values as the market inventory of these properties increases.

  • At September 30, our allowance for loan losses represented 2.66% of total loans outstanding, up from 2.4% on a linked quarter basis and represents 89.56% of our non-performing loans, which are up from 78% of non-performing loans at September 30, 2009. The allowance for non-performing assets was 72% at September 30, 2010, basically flat with the second quarter of 2010 and up from 63% at September 30, 2009.

  • Non-performing assets ended the quarter at $57.3 million or 2.8% of total assets, up from 2.6% on a linked quarter basis, but down from 3.03% at September 30, 2009. Total non-performing loans increased to $46.2 million from $40.7 million in the second quarter with non-accrual loans increasing $5.5 million primarily due to one large credit relationship, the $37.4 million, $31.8 million on a linked quarter basis.

  • Construction loans increased $137,000 -- Restructured loans increased $133,000 from last quarter. Restructured loans are considered non-performing because of the changes in the original terms granted to borrowers. It is important to note that these loans are still accruing interest. This is a process in which we can work with borrowers who have the ability to repay to mitigate the loss potential.

  • Total classified loans increased $13.2 million to $127.6 million from $114.4 million at June 30, 2010 and from $121.5 million at September 30, 2009. While disappointed in the increase, we believe we have provided for any potential loss currently in the allowance. Total delinquency rate was 2.91% at September 30, 2010, up from 2.7% on a linked quarter basis and down from 3.49% at September 30, 2009. The delinquency rate for [the loans] 90 days past due and/or our non-accrual increased to 2.39% this quarter from 2.01% in the second quarter of 2010 and 2.15% at September 30, 2009.

  • We are encouraged by the reduction in the 30-day (inaudible) past-due delinquency rate, which declined to 52 basis points from 69 basis points on a linked quarter basis, and down from 1.33% at September 30, 2009. We have a diversified portfolio and low average loan size, very little presence in most problematic segments of commercial real estate, such as big box retailers and large office buildings. And credits are generally underwritten on a cash flow basis that require meaningful equity and personal guarantees.

  • We continue to strengthen our credit review process and increase the overall scope of loans we individually review on a quarterly basis. Improving credit quality and reducing the level of non-performing assets and classified assets is a major focus of the Company. We have just completed the on-site stage of our annual safety and soundness exam and expect a full report prior to the end of the fourth quarter.

  • Mortgage banking was up in the third quarter driven by strong refinance activity in this low rate environment. You would have anticipated this high volume will taper off during the fourth quarter. Overall, mortgage banking income for the quarter was $2.3 million compared to $198,000 in the third quarter of 2009 and $985,000 on a linked quarter basis.

  • We had a gain on sale income of $2.9 million in the third quarter of 2010 compared with $1.5 million in the third quarter of 2009 and $1.2 million in the second quarter of 2010. We also reported a negative valuation adjustment to mortgage servicing rights of $527,000 in the third quarter of 2010 compared with the negative valuation adjustments of $571,000 on a linked quarter basis and $772,000 in the third quarter of 2009, reflecting the changes in the level of market's interest rates that affect the assumed prepayment speeds of the underlying collateral.

  • At September 30, 2010, First Defiance had $1.2 billion in loan service for others. The mortgage servicing rights associated with those loans had a fair value of $8.3 million or 68 basis points of the outstanding loan balance serviced. Total impairment reserves, which are available for recapture in future periods totaled $2.3 million at the end of the quarter.

  • The economic environment continues to add stress on our investments and trust-preferred collateralized debt obligations or CDOs and required additional other than temporary impairment write-downs in the third quarter. The OTTI charge recognized in the third quarter of 2010 totaled $190,000 compared with a charge of $994,000 in the third quarter of 2009.

  • The trust preferred CDO investments in the portfolio has a total book value of $3.7 million and market values of $1.4 million at September 30, 2010. The book value of CDOs with OTTI at September 30, 2010 was $1.8 million with a market value of $498,000. The book value of CDOs without credit impairment was $2 million with a market value of $934,000. The decline in the value of these investments is primarily due to the continued lack of liquidity in the CDO market.

  • These investments continue to pay principal and interest payments in accordance with the contractual terms of the securities. Management has not deemed the impairment and value of these CDO investments to be Other-Than-Temporary and therefore does not recognize the reduction of value in earnings.

  • Turning to other operating results, our net interest income of $17.8 million for the quarter compared to $17.6 million on a linked quarter basis and up from $17.6 million in the third quarter of 2009. For the quarter, our margin was 3.94%, which was 6 basis points increase from the third quarter of 2009 and a 5 basis point increase on a linked quarter basis.

  • The continued low rate environment has given us opportunities to reprice the liability side and has also driven us to focus on changing the mix of our balance sheet to improve the margin as well. We have been successful on lowering our cost of funds, but the level of decrease has modified recently. Our cost of funds declined 11 basis points on a linked quarter basis with the yield on assets declining 5 basis points.

  • We have also seen a downward pressure on an overall asset yields and more aggressive competitive pricing pressure and the downward repricing of variable rate loans based on the current yield curve. The increase in our liquidity position has also impacted the margin as we have seen an increase in interest bearing deposits. However, we believe our liquidity position continues to be important, gives us the added flexibility and overall liability pricing.

  • We have been able to shift the asset mix somewhat this quarter from cash into intermediate securities. We continue to have a strong emphasis on non-interest bearing deposit accounts and saw the balance grow this quarter. We are focused on pricing opportunities to maintain and expand the margin. We are particularly focused on asset pricing discipline and the challenges of maintaining asset yields.

  • We have had the opportunity to look at more credits and are concentrating on building the overall deposit balances of current credit relationships and the return on equity of the relationship -- the relationship can generate. This helps us focus on getting deposits and other revenue sources to make the relationship more profitable.

  • Fee income continues to be resilient. It was $3.3 million in the third quarter of 2010, down from $3.4 million on a linked quarter basis, compared with $3.6 million in the third quarter of 2009. Insurance revenue was $1.4 million in the third quarter of 2010, up slightly from $1.3 million on a linked quarter basis and $1.1 million in the third quarter of 2009. The insurance revenue is primarily driven by the acquisition of group benefits in the second quarter of 2010.

  • Overall, non-interest expense increased to $17.1 million this quarter compared to $14.8 million in the third quarter of 2009 and $15 million on a linked quarter basis.

  • Third-quarter compensation and benefits expenses increased to $7.1 million from $6.6 million on linked quarter basis and [$6.6 million] in the third quarter of 2009. The third quarter of 2010 had higher levels of variable compensation due to improved -- improvement in the overall level of performance.

  • FDIC insurance expense increased $258,000 in the third quarter of 2010 compared to the third quarter of 2009. Other non-interest expense increased to $5.2 million in the third quarter from $3.7 million in the third quarter of 2009. Increases in expenses over the prior year of $1.5 million for credit collection in OREO consulting of $85,000, examination and legal fees of $85,000, which was partially offset by $70,000 related to deferred compensation valuation.

  • On a linked quarter basis, other non-interest expense increased $1.5 million, primarily due to increases in credit collection costs increasing $1.6 million. Included in the credit collection cost was an increase of $1 million in OREO write-down. The higher level reflects the disposition of some properties in auction and the more aggressive valuation necessary to liquidate properties in this environment.

  • The Company has prepared for a core system upgrade in the first weekend of November. We have been preparing for this for well over a year and look forward to the added efficiencies and features that the new system allowed to our operation.

  • The third quarter of 2010 include $40,000 related with the core system upgrade. Our compensation and benefits expenses have been positively impacted by decision to preemptively reduce staff levels, as well as to allow attrition to reduce staff levels. We believe that we're close to the optimal staffing level necessary to maintain our quality customer service culture that customers desire and expect from First Federal.

  • We believe that we have a balanced approach to cost control in this difficult environment, as well as a sustained focus on customer service and customer acquisition. We continue to look for opportunities to expand our market presence in strategic growth markets.

  • We saw the balance sheet contract in the third quarter with total assets shrinking by $11 million from December 2009 to $2.05 billion at September 30, 2010. On the asset side, cash and equivalents grew $71 million over the year to $148.7 million at September 30, 2010. Securities grew $28.6 million over the year to $157 million. Gross loan balances declined $70 million year-over-year and declined $20.8 million on a linked quarter basis. Loan activity in general continues to be weak, but we are seeing some signs of increased loan activity.

  • We continue to be prudent in our new lending activities, we've been disciplined in our underwriting and have not focused on growth at the expense of taking great credit risk or lowered rates to increase loan volumes.

  • We have been intent on making sure our service levels have not suffered as a result of an increased level of loan workouts. We have been able to develop strong new relationships with good commercial clients. We believe that a controlled growth strategy is reflective of the environment and we are well positioned for future growth.

  • Total deposits grew $47.6 million from September 2009 and increased $10 million on a linked quarter basis as we allowed higher priced CDs to run off. However, that run off was more than offset by increases in interest-bearing transaction accounts. We were also pleased with our growth in non-interest-bearing deposits to $213 million at September 30, 2010, up from $174 million at September 30, 2009. We continue to focus on growth in non-interest-bearing balances in correlation with the overall strategy and efforts to reduce our cost of funds in this interest rate environment.

  • Our capital position remains strong with shareholders' equity to assets improving to $11.8 million at September 30, 2010 from $11.5 million at September 30, 2009. Our risk-based capital ratio is strong at about 13.6%.

  • That completes my overview for the quarter and I will turn the call back over to Bill.

  • Bill Small - President, Chairman and CEO

  • Thank you, Don. As we move into the final quarter of 2010, we are staying focused on addressing the challenges that face the entire banking industry. The overall economic climate throughout our market area remains among the biggest of these challenges.

  • Unemployment numbers run higher in this region compared to national numbers. And we may see this continue for months as employment recovery seems tentative.

  • We are certainly encouraged by some recent capital investments in businesses located in our markets and many of the automotive-related businesses currently have steady production. As we have indicated in the past, First Federal Bank has a very small direct credit exposure to the automotive industry, but we know that many of our customers have great dependence on it.

  • We are encouraged by the fact that many of our customers are reporting an increase in jobs to quote and we are hopeful this will be to increase production. We are also encouraged by what appears to be another good year for agriculture in this area. Overall, yields appear to be near average levels, but input costs were down and crop prices were strong, so this bodes well for most farmers.

  • Another significant challenge right now is the legislative and regulatory environment. As you know the President signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act on July 21. Several of the 16 titles in this Act could have significant impact on our bank.

  • We are closely monitoring the process of writing and implementing the regulations. We know that the end result will be an increase in compliance cost and potentially a decrease in revenue for certain sources. But that makes it imperative that we continue to explore new revenue sources and maintain our focus on cost control.

  • On a positive note, the FDIC last week announced that they were not going to increase deposit and insurance premiums next year and that appears very unlikely that we'll have any special assessment from them this year like we had in 2009. The additional challenges of this regulatory landscape coupled with the continuing sluggishness of the economy certainly present a tough environment for the financial services industry. However, we have seen some positive indicators that give us a sense of optimism for the future.

  • Our focus remains on our proven community financial service strategy. With the staff and plan we have in place, we look forward to an improving future.

  • We thank you for joining us this morning and now we will be happy to take your questions.

  • Operator

  • We will now begin the question-and-answer session. (Operator Instructions). Our first question will come from, is it Julienne Cassarino from Prospector Partners. My apologies.

  • Julienne Cassarino - Analyst

  • No, sorry, it is Julienne Cassarino. Hi. Good morning.

  • Bill Small - President, Chairman and CEO

  • Good morning, Julienne.

  • Don Hileman - EVP and CFO

  • Good morning.

  • Julienne Cassarino - Analyst

  • Can you give the dollar amount of past dues, there were no -- were there no 90 days plus past dues that were still accruing? Or were there any --?

  • Don Hileman - EVP and CFO

  • That's correct.

  • Julienne Cassarino - Analyst

  • Okay. Done this quarter. And what was the dollar amount of the 30 to 89 day past dues still accruing?

  • Don Hileman - EVP and CFO

  • $8 million.

  • Julienne Cassarino - Analyst

  • Is that down from $13 million last quarter?

  • Don Hileman - EVP and CFO

  • Down from roughly $11 million.

  • Julienne Cassarino - Analyst

  • $11 million last quarter. Okay.

  • Don Hileman - EVP and CFO

  • Right. Correct.

  • Julienne Cassarino - Analyst

  • Okay. And the TDRs of $8.8 million, how much of that is non-consumer?

  • Don Hileman - EVP and CFO

  • I don't have the exact number, but the majority of that would be commercial.

  • Julienne Cassarino - Analyst

  • Of the $8.8 million?

  • Don Hileman - EVP and CFO

  • Right.

  • Julienne Cassarino - Analyst

  • Okay. And how did that compare to last quarter?

  • Don Hileman - EVP and CFO

  • About the same, down slightly.

  • Julienne Cassarino - Analyst

  • Okay. And the OREO and collections expense that was $1.5 million higher than the year-ago quarter, was the year-ago quarter $860,000?

  • Don Hileman - EVP and CFO

  • No, the year-ago quarter did about $1.2 million for all those categories.

  • Julienne Cassarino - Analyst

  • Okay.

  • Don Hileman - EVP and CFO

  • So this quarter is about $2.8 million total.

  • Julienne Cassarino - Analyst

  • $2.8 million, of which $1 million was a write-down or a revaluation of the OREO?

  • Don Hileman - EVP and CFO

  • On one particular credit.

  • Bill Small - President, Chairman and CEO

  • Yes.

  • Julienne Cassarino - Analyst

  • That was only one credit, okay.

  • Don Hileman - EVP and CFO

  • Right.

  • Julienne Cassarino - Analyst

  • Okay. All right. And the -- what is your balance of agriculture loans?

  • Bill Small - President, Chairman and CEO

  • I think it's somewhere in the neighborhood of $80 million.

  • Julienne Cassarino - Analyst

  • Around $80 million, okay. Okay and the MSR valuation, do you hedge your MSR assets?

  • Don Hileman - EVP and CFO

  • We did not.

  • Julienne Cassarino - Analyst

  • Okay. And what are you carrying at, what valuation are you carrying at on the balance sheet?

  • Don Hileman - EVP and CFO

  • It's about 68 basis points.

  • Julienne Cassarino - Analyst

  • Okay. So that didn't change much?

  • Don Hileman - EVP and CFO

  • That went down slightly from 70; I think was for the last quarter. So, it's about the same, just a slight decline there.

  • Julienne Cassarino - Analyst

  • Right, right. Okay. Okay. All right. Thank you very much.

  • Don Hileman - EVP and CFO

  • You're welcome.

  • Bill Small - President, Chairman and CEO

  • Thank you, Julienne.

  • Operator

  • Our next question will come from John Barber from KBW, please go ahead.

  • John Barber - Analyst

  • Good morning everyone.

  • Bill Small - President, Chairman and CEO

  • Good morning, John.

  • John Barber - Analyst

  • Don, in your prepared remarks, you mentioned that non-performers increased linked quarter due to one large credit, was that CRE related and was that previously identified?

  • Don Hileman - EVP and CFO

  • Yes, to both those questions. It just kind of migrated into the non-accrual status, it was previously identified as a sub-standard credit, just migrated into the non-performing category this quarter.

  • John Barber - Analyst

  • Okay. And do you have the duration of the securities portfolio off hand?

  • Don Hileman - EVP and CFO

  • It's about I think close to three years, it's been declining here over the last quarter.

  • John Barber - Analyst

  • All right. And last question, I was wondering if you had any updates on the MOU or if regulators are giving you an indication of what it would take them to remove the MOU? Thanks.

  • Bill Small - President, Chairman and CEO

  • We really don't have any direct indication, as you know, and those are issues that -- but and open basically as Don mentioned in his remarks. We are just -- they just finished off the field work on our annual safety and soundness exam, but it will be probably late fourth quarter at the earliest before we get the results of that exam. I think that's clouded somewhat though by the fact that with OTS being merged into the OCC as to whether OTS will take any action. That's something that we think will probably weigh into it also.

  • John Barber - Analyst

  • Okay, great, thank you.

  • Bill Small - President, Chairman and CEO

  • Thanks, John.

  • Don Hileman - EVP and CFO

  • Thanks, John.

  • Operator

  • (Operator Instructions). Pardon me, we do have another question.

  • Bill Small - President, Chairman and CEO

  • Okay.

  • Operator

  • Can we take it? Bruce Baughman from Franklin, please go ahead.

  • Bruce Baughman - Analyst

  • Thank you. Just real quick, the tangible book value you give in the financial release, is that for shareholders equity or common equity only?

  • Don Hileman - EVP and CFO

  • Yes, I guess it is shareholders equity.

  • Bruce Baughman - Analyst

  • Can you give tangible common equity?

  • Don Hileman - EVP and CFO

  • I don't have that right in front of me, Bruce.

  • Bruce Baughman - Analyst

  • Okay, thank you.

  • Operator

  • This does conclude our question-and-answer session. I would like to turn the conference back over to Ms. Weisenburger for any closing remarks.

  • Mary Beth Weisenburger - Director of Marketing

  • We would just like to thank everyone for their participation today and this concludes our call. Thank you.

  • Operator

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