Atlantic Capital Bancshares, Inc.
Q3 2019 Earnings Call Transcript

Published: 25 Oct 2019

[Operator:]

Good morning. And welcome to the Atlantic Capital Bank Third Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask questions. [Operator Instructions]Please note today’s event is being recorded. I would now like to turn the conference over to Ashley Carson, Executive Vice President, Corporate and Community Affairs Officer. Please go ahead.

[Ashley Carson:]

Thank you, Rocco. And thank you all for joining us for our third quarter 2019 earnings call. With me today to discuss our results are Doug Williams, Chief Executive Officer; and Patrick Oakes, Chief Financial Officer.As a reminder, the Atlantic Capital earnings release is available in the Investor Relations section of our website. I wish to caution you that we will be making forward-looking statements during this call and that actual results may differ materially. We encourage you to review the disclaimer and the earnings release dealing with forward-looking information. This disclaimer applies equally to statements made in this call.In addition, some discussions may include references to non-GAAP financial measures. Information about those measures, including reconciliation to GAAP measures, may be found in our SEC filings and in our earnings release.And with that, I’ll turn the call over to the CEO of Atlantic Capital, Doug Williams.

[Doug Williams:]

Thank you, Ashley, and good morning. With solid loan and deposit growth from new and expanded client relationships, disciplined expense management and sound credit quality. Atlantic Capital recorded another quarter of strong operating results.As you’ve seen, we reported net income from continuing operations of $7.6 million or $0.33 per diluted share for the third quarter 2019, compared to $7 million or $0.27 per diluted share for the third quarter of 2018 and $7 million or $0.29 per diluted share for the second quarter of 2019.Loan held for investment from continuing operations grew 10% annualized from the second quarter and 10% over the third quarter of 2018. Commercial and industrial and owner-occupied commercial real estate loans increased 14% linked-quarter annualized and grew 20% from the third quarter of 2018.For the last 15 quarters which is our history as a public company this core categories of loans from continuing operations has grown at a compound average annual rate of 20%. Average deposits in the third quarter were up 10% annualized over the second quarter and 18% compared to the third quarter of 2018.Average non-interest-bearing demand deposits increased 34% annualized compared to the second quarter and 14% from the third quarter of 2018. Non-interest-bearing demand deposits were 33% of total average deposits during the third quarter and have grown at a compound average annual rate of over 18% for the last 15 quarters.This loan and deposit growth from new and expanded client relationships over the last 15 quarters is the direct product of the company aligned for the common purpose of fueling client prosperity with fault full and tailored credit and treasury management solutions and reliable service delivery.Building an attractive and distinctive culture is a competitive weapon is a key priority at Atlanta Capital and we are pleased to report that our company was recognized last quarter by the American banker as a best bank to work for.Two key elements of this purpose and performance driven culture, client focus teamwork and risk management expertise are foundational to our results. Our talented and experienced bankers, credit officers, treasury management officers and operational delivery and support professionals work well together to design and deliver solutions and service to our clients.Good team work is making our company more productive and efficient, while investing in new capacity to pursue opportunities in the Atlanta market and in our specialized treasury management and transaction processing businesses, non-interest expense in the third quarter of 2019 was actually down from that in the second quarter and grew at a modest pace year-over-year.Sound risk management practices enable sustainable growth at Atlanta Capital and our results show it. Net charge-offs for the quarter were 11 basis points of loans held for investment and 12 basis points year-to-date. Non-performing assets were 29 basis points of assets at quarter end.Now, Patrick Oakes will review the financials with you in more detail and then I’ll return to offer perspective on our priorities and the outlook for the fourth quarter. Pat?

[Patrick Oakes:]

Thanks, Doug, and good morning, everyone. I am happy to report on the strong results for Atlanta Capital and our first full quarter after the closing the brand sale in April. This included net income from continuing operations of $0.33 per diluted share, an increase of 22% compared to the third quarter of 2018. Tangible book value per share of $13.91 also an increase of 22% from September 30, 2018, another quarter of solid loan and deposit growth, our loan and deposit ratio of 92% and an emphasis on expense management.We are pleased with these results, despite the decline in our net interest margin from the recent cuts in the fed funds rate. The NIM in the third quarter was 3.52%, a 9-basis-point decline from the 3.61% margin in the second quarter. This was in line with our expectations.The main drivers of this quarterly reduction were lower loan yields due to the decline in short-term interest rates, mainly one-month LIBOR and an increase in excess cash from higher volatility in our deposit balances. This is offset by a decrease in our cost of interest-bearing deposits and a solid growth in non-interest-bearing deposits, as Doug mentioned earlier.With the uncertainty of future rate cuts providing further guidance on our NIM is difficult. The bank remains asset sensitive with approximately 65% of our loan book floating rate and 50% of loans tied to one-month LIBOR. This will continue to put pressure in our margins. For the third quarter loan yields decreased 16 basis points to 5.18%.During the third quarter we were successful in reducing the cost of interest-bearing deposits 8 basis points to 1.58%. This included the benefit from lower rates in our market index deposit and rate sheets, along with some decrease in our negotiated rates, which account for about 45% of our interest0bearing deposits.Our bankers continue working with their customers to reduce deposit cost as much as competition will allow, but there is a lag with how quickly we can reduce these negotiated rates. Our overall cost of deposits decreased 9 basis points to 1.06%.Non-interest income totaled $2.8 million in the third quarter, compared to $2.9 million in the prior quarter and $2.3 million in the third quarter of 2018. Service charge income grew 25% linked-quarter annualized and 15% from the third quarter of 2018, driven by continued strong growth in our payments in fintech businesses.The quarter also included a gain of $253,000 on the sale of securities as we extended the duration of the investment portfolio in order to reduce the asset sensitivity to the balance sheet by selling short duration securities and began replacing with municipal securities.We have continued to purchase additional municipal securities in our held to maturing portfolio during the fourth quarter. This will improve income and reduce our sensitivity but will result in some additional pressure on our NIM.I am pleased with our continued focus on managing expenses post the branch sale. Total expenses in the third quarter decreased 577,000 to 12.7 million. We benefited in the third quarter from an FDIC assessment credit that lowered the FDIC expense by 368,000 from the second quarter. Based on our remaining credit that can be applied to future invoices we do not anticipate having an FDIC premium expense for the next few quarters.We continue to actively purchase shares under our $85 million share repurchase program. During the quarter, we purchased $21 -- $20.1 million or 1.2 million shares at an average price of $17.29. This brings the total program repurchases to $70.9 million or 4.1 million shares and has reduced our share count by approximately 16%.Given all this share of repurchase activity, our tangible common equity ratio decreased to 12.9% at quarter end down from 13.4% from June 30th. We remain focused on capital management and improving both our return on equity and earnings per share.Now, I’ll turn it back over to Doug.

[Doug Williams:]

In earlier calls this year we’ve shared the following priorities with you. The number one, complete the transformational or rather reformational divestiture of our Tennessee, Northwest Georgia business. Number two investing growth capacity for our Atlanta and specialty businesses. Number three focus on deposit growth by building treasury management and transaction processing based relationships. Number four maintain best-in-class credit quality. And number five employ shareholder return enhancing capital management strategies.I think you’ll agree that we’ve addressed each of these priorities with energy and discipline, and that our results reflect compelling progress in building the value of our company. We expect more progress in the fourth quarter. Our bankers are energetically pursuing new opportunities and new business pipelines remain solid.Good teamwork is improving our productivity and efficiency. Credit risk is well managed. While the effect of interest rate reductions will become more apparent in the fourth quarter, we expect to sustain these good operating trends.Our planning for 2020 is well underway. Although, the course of the economy and interest rates is uncertain we see considerable opportunities for Atlantic Capital in the midst of Atlanta market turmoil and in our specialty businesses. We’re well-positioned with an energetic and engaged team, new business development capacity and robust capital flexibility to address these opportunities.Now, we’ll be happy to answer your questions.

[Operator:]

Thank you. [Operator Instructions] Today’s first question comes from Brady Gailey of KBW. Please go ahead.

[Brady Gailey:]

Hey. Good morning guys.

[Doug Williams:]

Good morning Brady.

[Brady Gailey:]

Doug, I wanted to start with the buyback, I mean, you bought back a material amount of your stock over the last year. So it feels like at this space you’ll have the $85 million done in the fourth quarter. When that happens you’re still going to have the excess capital. So how do you think about additional buybacks in 2020?

[Patrick Oakes:]

I’ll start. I think the initial goal here is to complete $85 million buyback program. We’re still in planning processes -- capital planning process with the Board. And so I think more to come in January once we get this program finished about any additional steps we want to take.

[Doug Williams:]

Yeah. I just say that we’re evaluating various strategies going forward. We will sharing those with the Board and we’ll have more information for you in January. We really like the capital position that we have finishing out the year. We have a lot of flexibility, as I mentioned, and that capital conserve both defensive and offensive purposes.

[Brady Gailey:]

Yeah. Okay. And then, Pat, you mentioned making some changes in the bond portfolio and buying the munis. If you look at the average balance of the bond book in the third quarter was about $340 million. Do you expect that to go a lot higher with these changes or is it more just a mix shift and those balances should stay fairly stable going forward?

[Patrick Oakes:]

Well, part of the reason it’s down is because of the sales that we did as we were doing the restructuring. So you’ll see that build back up and most likely increase from what we balance was in the second quarter.

[Brady Gailey:]

Okay. And anything on CECL and the likely impact coming up here in 90 days.

[Patrick Oakes:]

So we’re still in the final stages of finalizing that. At this point, we don’t expect a material change and what our allowance is going to be based on our business models being so commercial focused in a short duration portfolio.

[Brady Gailey:]

All right. And then just last for me, your mortgage warehouse business, I know you are partner with another bank in that business. But it’s gotten down to 1% of loans. That business has been a lot more robust recently just given the backdrop of mortgage rates. I mean, do you expect to start to participate more in that program with the warehouse space being a lot more robust nowadays?

[Doug Williams:]

We did not, Brady, we -- I would anticipate those balances will continue to diminish over the next couple of quarters.

[Brady Gailey:]

Okay. Great. Thanks for the color guys.

[Doug Williams:]

Thank you.

[Operator:]

And our next question today comes from Stephen Scouten of Sandler O’Neill. Please go ahead.

[Stephen Scouten:]

Hi guys. Good morning.

[Doug Williams:]

Good Morning, Stephen.

[Patrick Oakes:]

Good morning.

[Stephen Scouten:]

Maybe to follow up on Brady’s last question there a little bit just around the overall loan growth expectations, kind of if you could give some color on how your pipelines are looking. And really what you’re seeing from customers in regards to loan demands -- maybe -- loan demand maybe quarter-over-quarter origination and pay down activity, kind of how that compares to what we’ve seen in the last few quarters.

[Doug Williams:]

Yeah. We -- as I mentioned, the pipelines remain solid and we think we can generally sustain the trajectories that we’ve been on this year and prior years with respect to loan growth in various categories.Having said that, demand is softened up a bit this year less evident in the data and also anecdotally, and it’s very difficult to, excuse me, to calibrate that for not only the fourth quarter, but 2020. I think we guided you to high single-digit loan growth for the year and that still looks like a reasonable expectation. So, finish the year out, probably, in the 7% to 9% range, I would guess.

[Stephen Scouten:]

Okay. That’s helpful. And maybe falling back on capital a little bit too, I know you said you’re still in the planning stages. But how do you think about capital moving longer term, I guess, and what an appropriate level of capital would be whether that’s TCE or total risk base or whatever ratio you look to most centrally. But how do you think about that long-term where you’d like to operate?

[Patrick Oakes:]

So the biggest constraint for us is total risk based capital at the bank and a lot of us have business model. We have a lot of unfunded commitments that kind of far a little bit more capital associated with that. So that’s our biggest constraint.We’d like to get TCE ratio down, obviously, from the -- almost 13% we’re at now. But -- there is a constraint around that. But you’re right, we are well over capitalized and well aware that, like, Doug said, that’s good offensively and defensively.

[Stephen Scouten:]

Okay. Great. And then maybe last thing for me just kind of can you talk about where you’re investing today in the Atlanta marketplace, whether that’s certain segments, pace of new hiring goals, is there certain submarkets in the Atlanta MSA you’re really focused on today, just kind of give us a feel for what the direction of incremental investments will be?

[Doug Williams:]

As we’ve told you in our second quarter call, we’ve hired over 25 people this year, including 12 new producers, I think, seven new credit officers and the remainder will be operational service delivery folks.The pace of hiring is slowed. We’re anticipating the next few quarters here to absorb that growth and see it become more productive particularly as we move into 2020. We will remain very opportunistic with respect to hiring more people when we find good people that want to work at Atlanta Capital will be quick to hire them. But I think it will take a little time to absorb the folks we’ve hired and see them become productive.The hiring has been sort of across the scope of our businesses both here in Atlanta and in oour specialty businesses. And we have expectations for not only loan growth but deposit growth. And as you’ve seen we’ve had deposit growth this year that’s been very strong and in fact has outpaced the loan growth. That may well continue into the next few quarters.

[Stephen Scouten:]

Super. Thanks for the color guys. I appreciate it.

[Operator:]

And our next question today comes from Jennifer Demba with SunTrust. Please go ahead.

[Jennifer Demba:]

Thank you. Good morning.

[Doug Williams:]

Good morning.

[Jennifer Demba:]

Question on credit, it’s still very good for you. I’m just wondering what you’re seeing kind of underneath the covers any cracks in any certain sectors, what you trend and criticize loans that kind of thing?

[Doug Williams:]

Our credit stats remain solid. We’re not seeing any unusual or broad based problems, I would say, the migration trends are very stable. We’re certainly mindful of life cycle management behavior particularly in the C&I world and we are cautious as we told you with respect to the CRE business at this point in the cycle.However, our charge-offs remain low. We’ve seen no meaningful change in classified loan levels. And in fact, with some expected payoffs -- refinancing payoffs away from us in the fourth quarter, we should see classified totals move down over time. So we feel good about credit at this point. There is always the possibility of the unexpected occurring, but we think credit quality is stable and likely to remain so.

[Jennifer Demba:]

Thanks so much.

[Doug Williams:]

Yeah.

[Operator:]

And our next question today comes from Steve Comery of G. Research. Please go ahead.

[Steve Comery:]

Hey, guys. Good morning.

[Patrick Oakes:]

Good morning. Good morning.

[Doug Williams:]

Good morning.

[Steve Comery:]

Just want to ask about the positive pricing, just kind of some general color on what you guys are seeing in your market and whether or not you expect or just how you expect the mix to kind of look going forward with the fed policy?

[Patrick Oakes:]

Now, when you say mix, what are you referring to?

[Steve Comery:]

Yeah. So, I mean, there was a pretty substantial reduction in the quarter IN broker deposits, maybe just some comments on kind of how you look at that funding source at this point?

[Patrick Oakes:]

Well, the focus here has been growing on -- growing core deposits, and obviously, as you can see, we’ve been pretty successful with that. And what that allows us to do is pay off some of these higher cost deposits and wholesale funding. We had increased broker deposits with the branch sale in anticipation of that, because obviously, we sold off a significant amount of deposits.Now with all the growth we’ve seen, we better pay some of that off, which is great, it helps margin, it helps funding, so that’s the goal going forward to continue to do that. As you can see that with our DDA at 32%, 33% of deposits.

[Steve Comery:]

Okay. And then just kind of, generally, I mean, are you guys thinking about deposit competition? Are you seeing anything different following fed changes or anything recently like that?

[Patrick Oakes:]

Yeah. So, look, we are commercial bank. So a lot of what we have is relationship based. So, yes, we’re competing with the overall relationship with other banks. So it’s not necessarily a special that we see advertised somewhere. It’s more just competing for the business individually. So it’s a lot of negotiation with individual customers and overall relationship, along with what’s going on in the market. So it’s lot of one-offs.

[Steve Comery:]

Okay. Fair enough. Thanks.

[Operator:]

And the next question today comes from Nancy Bush of NAB Research. Please go ahead.

[Nancy Bush:]

Good morning, gentlemen. Just a general question for you Doug and Pat. The issues that we’re seeing -- the liquidity issues that we’re seeing in the markets these days, which seem to vary from day-to-day. Given your growing payments business, et cetera, did these issues hit you at all or did they concern you at all?

[Patrick Oakes:]

They haven’t at this point Nancy, as we’ve said, we had really strong deposit growth this year. We maintain a lot of liquidity on the balance sheet and have a lot of access to liquidity from various sources. So we’ve been able to manage that day-to-day volatility I think very well up to this point and I think we’ll expect to continue to build to do that.

[Doug Williams:]

No. One of the things we’ve discussed is with -- approaching year end is with potentially liquidity…

[Nancy Bush:]

Right.

[Doug Williams:]

… since at year end, its holding more cash. So you could potentially see our cash balance increase at the bank just as protection going in the year end.

[Nancy Bush:]

So they would now -- but they -- you don’t anticipate that itself would have a material impact on the margin?

[Doug Williams:]

Not material.

[Nancy Bush:]

Okay. Secondly, this whole issue of negotiated rates and negotiating negotiated rates, I guess, you’d call it. You’re partly the only one who is in that process right now. I’m just wondering if you can give some color on how those discussions go. I mean, do you have to say, okay, we like to negotiate the rates, but we need to offer -- we’re going to offer you something in fees or whatever, I mean, how does that work?

[Patrick Oakes:]

Look there -- lot of this is an overall relationship, right? You’re typically not negotiating anything besides a deposit rate, because we already got the rest of relationship. And look we were fair with these customers as rate increased to pay them higher rates.

[Nancy Bush:]

Right.

[Patrick Oakes:]

And the idea is we’re expecting same thing as rates move down. And I think most customers get that and most of our bankers get that. But look this was a big change, rates moved very, very quickly. So it’s getting everybody comfortable…

[Nancy Bush:]

Right.

[Patrick Oakes:]

… with that shift. So just a lag. We don’t want to lose a customer by cutting deposit rate, but we also need to be fair on both sides. So it’s just a work in progress.

[Doug Williams:]

And I would say, with respect to sort excess corporate cash, it’s a national market competition for that is national. So you see these very high money market rates from online banks or money market funds and so forth. And generally, what our relationship customers are looking for is just a nod in that direction. We don’t necessarily have to match those rates, but we have to move in that direction.

[Nancy Bush:]

Right.

[Doug Williams:]

And then we -- as Pat says, we find -- they understand what’s going on and they’re willing to move down over a period of time. But there is a lag there and we expect to have more success as we move forward in terms of lowering rates than we had so far this year, but really just quarter of lower rates.

[Nancy Bush:]

Yeah. And just ancillary to that, the deposit market in Atlanta has tended to do crazy things over time.

[Doug Williams:]

Right.

[Nancy Bush:]

And I am wondering how the competitive situation the sort of rationality situation in deposit pricing is shaping up right now?

[Doug Williams:]

Yeah. I don’t know that Atlanta is at this point a lot different from anywhere else in the country. I think we saw rates run up last year and earlier this year, and now they are coming off the competitive rates that being offered in the market. But again the progress is not as fast as we would like it to be, it is slower going down than it was going up.

[Nancy Bush:]

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

[Doug Williams:]

Thank you.

[Operator:]

And our next question today comes from Christopher Marinac of Janney Montgomery Scott. Please go ahead.

[Christopher Marinac:]

Thanks. Good morning. Doug, you mentioned fintech businesses and success on deposits there.

[Doug Williams:]

Right.

[Christopher Marinac:]

Could you elaborate further on sort of what’s happening there and sort how that can be a further propellant for 2020?

[Doug Williams:]

Yeah. It’s really -- we think it’s an exciting opportunity. We have positioned ourselves very nicely I think in the payments ally that is Atlanta. We’re working with a number of companies here, as well as across the country.We have really solid pipelines out into the next two, three quarters in terms of new payments volume, ACH volume, and that should result in higher demand deposits, and higher service charge income going forward. So we’re very optimistic about that.We think we’ve carved out a highly competitive niche in that business. We are very confident in treasury management services and item processing. And this is a real area of strength for our company and it should show up in the results over the next few quarters here.

[Christopher Marinac:]

Okay. Great. And is it possible that the DDA ratio just sort of rising slightly as a result of all this?

[Doug Williams:]

Well, we hope so. But I don’t know if it will. We have got some countervailing forces there at work. We’ve been pleased that it’s held up sore in excess of 30% for the last several quarters now and had good growth in those balances. Obviously, an important element of mitigating margin compression will be to gather more non-interest-bearing deposit. So that’s core to our strategies and is particularly a part of this transaction processing treasure management of business that we have.

[Christopher Marinac:]

Okay. Great. Thank you for that. And then a follow up to Nancy’s question about negotiated rates. What are you seeing on the ability of customers to do loans floors or even to negotiate something favorable for you in terms of prepayments and penalties that get waived or at least are reasonable for both sides?

[Doug Williams:]

Yeah. I think we are just starting to see some of that in the market. There are opportunities to refinance it at lower fixed rates and so that’s creating some interest among various customers here and elsewhere to do that.We also -- we’re trying to get some LIBOR floors in some of our loans going forward. I think that’s a new aspect in the market. And we’ll see if that -- we are successful doing that going forward, but that’s something we’re starting to do.

[Christopher Marinac:]

Great. Thank you, Doug.

[Operator:]

And our next question comes from William Wallace of Raymond James. Please go ahead.

[William Wallace:]

Thanks. Good morning, guys. I’ll be in brief. Most questions have been asked, but as a quick follow up to Chris’s question on floors. Do you have any loans that are sitting up floors today?

[Doug Williams:]

We -- I don’t think we do, Walley [ph]. If we do its diminimis. We haven’t seen floors sort of competitively in the market for, I don’t know three years or so now. And so that’s why I say and we’d like to start getting some of those whether that will work competitively remains to be seen and we’re early in our effort to do that.

[Patrick Oakes:]

I think, Walley, we have more success doing fixed rate.

[Doug Williams:]

Yeah.

[Patrick Oakes:]

Rather than doing floors. We have 35% of our loan portfolios that fixed, probably a higher percentage of our new business is doing fixed rate.

[Doug Williams:]

Yeah.

[Patrick Oakes:]

So it’s hard to move the needle significantly, but that’s probably where we’re having more luck.

[William Wallace:]

Is that because you’re doing less C&I loans given where we are in the cycle or is that because you’re shifting the focus?

[Patrick Oakes:]

Shift in the focus.

[Doug Williams:]

We’re shifting the focus in response to borrower demand. There is more interest in doing fixed financing now than there has been in the past.

[Patrick Oakes:]

And obviously, we have more interest in that.

[Doug Williams:]

And we have more interest in that. And as Pat says, incrementally, we’re seeing a good portion of our growth there. We are doing more C&I. We are doing more owner occupied commercial real estate, which is C&I in a different regulatory call code, but the C&I business as we broadly defined, as we mentioned, this been growing at a very nice pace for 15 quarters now 20% per annum compounded. So we have a -- we have robust growth in that sector of our business, which is now about 60% of the total mix.

[William Wallace:]

Okay. And then and then just two questions on NIM, Pat, do you have the -- what the interest margin was for the month of September?

[Patrick Oakes:]

Yes. But we don’t disclose it.

[Doug Williams:]

Lower.

[Patrick Oakes:]

It was lower. So, look, what I will -- I guess, the best way to answer that is, we don’t get any further rate cuts. We’re going to see some more margin pressure here without any further rate cuts, probably, another -- just another 6 basis points or 8 basis points probably alone with that.

[William Wallace:]

Yeah.

[Patrick Oakes:]

And then you add in any rate cuts in October, December obviously we will head on top of that so.

[William Wallace:]

And that’s -- that does not -- does that -- that’s 6 basis points to 8 basis points, does that include what we’ve already seen from LIBOR in October or that would be additional pressure?

[Patrick Oakes:]

That would be the additional pressure from LIBOR. Obviously, we didn’t see because of the rate cut was so late in September. We didn’t see a lot of the impact from lower LIBOR in September. We saw some but not all of it.

[William Wallace:]

Yes.

[Patrick Oakes:]

We’ll see more of that in October.

[William Wallace:]

Yeah.

[Patrick Oakes:]

And then, obviously, get the benefits and deposit cost cuts, but more to come with that. So as I’ve said before, there’s going to be initial lag with our margins, really…

[William Wallace:]

Yeah.

[Patrick Oakes:]

… around the deposit side, and hopefully, we can start to catch up as soon as we get through these rate cuts.

[William Wallace:]

Right. Understood. And Pat, I know you said it in the prepared remarks, but I couldn’t write fast enough, what’s the dollar amount tied to LIBOR and the dollar amount tied to prime?

[Patrick Oakes:]

So dollar amount tied to LIBOR is just over -- it’s $900 million. Hold on, I’ll pull it up for you, rather devastating that.

[Doug Williams:]

It’s rough.

[Patrick Oakes:]

I’ll get it back to you.

[Doug Williams:]

It’s roughly 50%.

[Patrick Oakes:]

Yeah. $900 million.

[Doug Williams:]

Yeah.

[William Wallace:]

And another 900 million -- and then another 900 is on prime?

[Patrick Oakes:]

And the prime is about $225 million.

[William Wallace:]

Okay. Okay. Great. Thanks guys. I really appreciate the time.

[Patrick Oakes:]

Suddenly.

[Operator:]

And ladies and gentlemen, this concludes the question-and-answer session. I would like to turn the conference back over to the management team for any final remarks.

[Doug Williams:]

All right. We appreciate you dialing in this morning. Very pleased with our results and we’re available to have further discussion today and first part of next week for anybody that wants to. Thank you very much.

[Operator:]

Thank you, sir. Today’s conference has now included. We thank you all for attending today’s presentation. You may now disconnect.