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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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99.1 Transcript of April 19, 2000 telephone conference.
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PROVIDENT BANK OF MARYLAND, #696685
APRIL 19, 2000, 3:00 P.M., EDT
FINANCIAL RELATIONS BOARD
MODERATOR: JOHN MCNAMARA
Operator Good morning, ladies and gentlemen, and welcome to
the Provident Bank of Maryland conference call. At this time
all participants are in a listen only mode. Later we will
conduct a question and answer session and instructions will
follow at that time. If anyone should require assistance
during the call, please press the star followed by the zero
on your touchtone phone. As a reminder ladies and gentlemen,
this conference is being recorded.
I would now like to introduce your host for today's
conference, Mr. John McNamara of the Financial Relations
Board. Please go ahead, sir.
J. McNamara Good afternoon, everyone, and thank you all for
participating on Provident's first quarter conference call.
By now you should have all received a copy of the press
release. If anyone still needs one, please call my office at
212/661-8030 and we'll fax you a copy immediately following
the call. With us on the line from management is Peter
Martin, Chairman and Chief Executive Officer. Peter will
also introduce the other members of Provident's management
team.
Before we begin, however, we would like to remind you all to
take note of the cautionary language regarding forward
looking statements contained in the press release. That same
language applies to comments made on this afternoon's
conference call. We'll begin the call with a brief update on
the quarter and then we will open up the line for questions.
And now I'll turn the call over to Peter Martin. Go ahead,
Peter.
P. Martin It is nice to have all of you with us today. Hello, I
want to introduce my folks here. Dick Offits, from the
Office of the Chair, is head of our commercial lending and
credit. As you know Jack Novak is also Office of the Chair
and is responsible for consumer and mortgage; Lilian Kilroy
is responsible for marketing; Alan Grossman, responsible for
our investor
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relations; Dennis Dalliper, our CFO; and Gary Geisel, who is
also Office of the Chair and responsible for our community
banking, marketing and human resources and operations.
And I'm just going to, you have the press release. Earnings
per share did increase, it was up 15% from the first quarter
of 1999, .45 cents versus .39 cents and we're continuing to
execute our strategy of double digit increases in earnings.
The return on common equity was up to 14.72 versus 14.37 in
1999. A highlight is that we did issue with the end of
February $30 million in trust preferred stock, $15 million
of which we're using to buy back stock and $15 million paid
for the interest in the trust preferred and the leverage
give-up from the buy back.
We have bought back 500,000 shares so far with the proceeds
of the trust preferred. So we're at close to 1 million
shares with the program. We have 275,000 shares left.
We continue to work with our partners, Wal-Mart, Shopper's
Food Warehouse and Metro Foods, and in fact Shopper's Food
Warehouse and Metro have merged so we have one partner
instead of two there as of I think yesterday which continues
to allow us cost effective expansion in two prime locations.
We've opened several more stores. As you know we opened
sixteen last year, we've opened several more and we have
plans to continue this particularly in northern Virginia,
Prince George's county, throughout 2000. And as a reminder
to those of you who have joined us in the past are aware
that we have a break even on in-store locations, which is
eighteen months versus three to four years in traditional
locations. We do also open some traditional branches to back
up the in-store and to provide support for our commercial
calling efforts.
Now we have also continued to work on our e-commerce
capabilities. We are now issuing commercial debit cards. As
a reminder we have 130,000 retail debit cards, which is very
large for a bank our size, and we now have 16,000 customers
on either the PC banking or internet banking. They can open
accounts, make loan applications, make mortgage loans and of
course you can have your checking account through our
website, and you can have your checking account and bill
paying through our PC and internet banking.
So we're continuing to reach out to our customers through
various channels and we think that's what providing us with
a success in earnings. I'm going to turn it over to Dennis
Dalliper
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to go into more details in the first quarter numbers.
D. Dalliper Thank you, Peter. Good afternoon, everyone. I'm going to
begin with a summary of our share performance for the first
quarter and then from there go on into the financial
highlights.
First to remind everyone, looking through the numbers here,
where we ended the quarter at 15-3/4, we're trading at
16-1/2 to 16 today. During the quarter our high low range
was 17-3/4 to 13-7/8. That compares to the 52 weeks, about
28-1/2 to 13-7/8. During the quarter our float average
volume here increased significantly to about 165,000 shares
per day. That compares to about 97,000 shares for the 52
week average. Obviously it's reflecting the activity in the
stock by not only mid-Atlantic but Proivdent Bank in its
repurchase program. Its current yield is about 4.20 and
common shares outstanding at 25.1 with a P/E ratio of under
9 at 8.75. Street estimates for the first quarter, the mean
from 5 estimates of our 7 market makers was .44 cents and
for the years remains at $1.82. During the quarter we did
have the initiation of coverage by Legg Mason with an
out-perform rating, so that now arrays out with two of our
followers with strong buys, three with out-perform and two
with neutral ratings.
Compared to our peer group in terms of total return for the
first quarter, the best performer out of any index was still
negative, the S&P small, small cap regional bank index, was
a -2.%. Provident's peer group was -8% which compares
directly with Provident. Provident was at a -8.3, but the
NASDAQ bank average was at a -9.50. Even when you compare
Provident with Provident's peers, out of group of 14, we
rank 5. So there's a good deal of dispersion in that group.
Certainly the entire industry shares washed out in the value
to growth flight here. Very few institutions showing
positive total returns.
With regard to the continuing reminder of our strategic
financial objectives, certainly our objectives boiled down
to three. We're continuing to try to build sustainable
quality revenues, growing earnings per share, and
continuously increasing returns on invested capital. With
that in mind as Peter had mentioned, reported EPS for the
quarter was .45 cents, that's an increase of 15% from the
first quarter of 1999, again, matching off against our
street estimate of .44 cents. Net income up almost 13% to
$11.6 million in non-interest income, fee income, if we were
to exclude our mortgage banking activity which I will
discuss in a
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little bit. Non-interest income increasing 16.9%. Our
efficiency ratio, although still high at 63.55 was a
significant improvement over the 65% number in the first
quarter of 1999.
Turning to return on assets, improvement of two basis points
there from 88 to 90 and return on equity improving from 1437
in the first quarter of 1999 to 1472. Net interest margin
improving from a very low 2.99 percent in the first quarter
to 3.23% in this current quarter. It was a major first
quarter event, so obviously the first one being margin
improvement. We experienced 9.5% growth in demand and money
market deposits which had a beneficial impact on our margin.
And we continued to have improved performance in our second
mortgage loan portfolio. However during the quarter we did
issue trust preferred securities. I believe that we will see
that the 3.23% will not be sustainable and most likely will
not be sustainable in the subsequent quarters here. We
expect our second mortgages to return to more normal yields,
and the leveraging of the trust preferreds will bring down
the margin a bit. However, net interest income will continue
to grow.
We had continued growth in core fee based revenues with
16.4% deposit fee income. Non-interest income, however,
compared to 1999 was relatively flat. We saw a growth in
deposit in other fee income that was offset by decline of
about $3.2 million in mortgage related fees. Mortgage unit
now is operating at a break even pace. The $30 million of
trust preferred issuance, $15 million of that is being used
to repurchase shares. We have repurchase a little under
500,000 shares, about $7.7 million and this is part of a $15
million program, so we have a little bit more yet to go.
The final major event in the first quarter was that we
canceled $85 million of fixed rate home loan debt and
replaced it with floating rate, non-callable home loan debt,
swapped through the same duration. That created an after tax
gain of about $770,000. The value of that trade, the value
of taking the gain today, was greater than the value of the
increased cost on the rate reset, and provided us with an
excellent facility to continue to build our loan loss
reserves.
Looking to net interest income now, $40,660,000, a growth
rate of 19.5% over 1999. We had $130 million in loan growth
and $380 million in deposit growth. Provision for loans was
up from $1.9 million to $4.3 million. Non-interest income
going from
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1999 of $15 million to $14,216,000 in the first quarter of
2000. Again mortgage production here being the primary
characteristic in non-interest income's decline from 1999.
Production there is at 28% of last year's level. However,
reduced variable costs are to a point here now where the
unit is at break even and we will hold the unit at break
even or better until that business returns, which it
seasonably always does. And non-interest income, although up
8.4% does contain significant reductions in variable costs
in our mortgage banking operation.
Looking at loans and deposits, loans here $3.1 million in
1999 to $3.2 million, and $83 million growth in consumer.
These are average balances, $45 million growth in
commercial. Deposits growing 11.2% from $3.4 million to $3.8
million, a growth of $380 million. Certificates of deposit
again being $324 million, but more importantly, demand
deposits being up $72 million. To asset quality, during the
period our allowance to loan losses is at $41.1 million.
Non-performing loans are at $26 million. Net charge offs
during the period were $3 million. Non-performing loans, the
total loans at 78 basis points and the reserve is at 1.23%
of loans.
That's what I have for the financial summary.
P. Martin Thank you, Dennis. We'll prepare to take questions, any
questions you want to ask and we'll do our best to answer
them.
Operator Thank you, sir. Ladies and gentlemen, at this time,
if you have a question, you will need to press the one on
your touchtone phone and you'll hear a tone acknowledging
your request. Your questions will be taken in the order that
they are received. If your question has already been
answered you may remove yourself from the queue by pressing
the # key. Also, if you are on a speakerphone, please pick
up your handset before pressing the buttons. One moment
please for th first question.
Adam Barkstrom, please state your company name followed by
your question.
A. Barkstrom Good afternoon gents, Adam Barkstrom from Legg Mason. I
had a couple of questions, Dennis and Peter. I wonder if you
could give a little bit more flavor on asset quality and
more specifically I'm curious, if there have been any
changes in the IHS credit and secondly, on the Genesis
Healthcare credit. Have there been any changes there and has
that line been booked on
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non-accurals yet.
P. Martin Do you want to take that, Dick, or do you want me to. I'd
be happy to answer it, but we'll both give you the same
answer.
D. Offits I'll take it, Adam. In terms of overall portfolio quality,
we continue to think we are very solid there. Healthcare
continues to be a portfolio that we monitor very closely. As
we indicated in the press release, while non-performing
assets were flat this quarter, we anticipate increases in
non-performers through the rest of the year, or at some
point in the year, in that specific portfolio. The rest of
the portfolio we are very comfortable with.
A. Barkstrom Do you have any specific ideas as far as the increases in
non-accruals and/or charge offs as they relate to
healthcare?
D. Offits We've got only one other credit that we're concerned about
at this point, and that's the other one that you mentioned.
A. Barkstrom Genesis?
D. Offits Yes. There have been no changes in either of the credits
at this point in time. The marketer, the banks are still
waiting for a plan to be submitted by Integrated and that's
pretty much where we are.
P. Martin Let me just add to that. In our portfolio, those are the
two credits, they happen to be healthcare and the rest of
our healthcare credits are good as well, but we're watching
those two ... well, obviously Integrated. And we're watching
Genesis very carefully, although quite frankly, we think
that the healthier situation is in Integrated and just to
emphasize what Dick Offits said, the rest of our portfolio
is very clean and in fact over 60% of the portfolio is
collateralized with equity in one to four family homes.
A. Barkstrom Right.
P. Martin We don't want to under emphasize the fact that we've got two
relationships we're watching closely, but we don't want to
overemphasize it either. Our portfolio overall is very
clean.
A. Barkstrom Right, and if I read your press release correctly, the total
healthcare portfolio is 2.8% of total lines?
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P. Martin That's correct.
A. Barkstrom Alright, so the remainder of the healthcare portfolio if you
net out Genesis and IHS, if I'm hearing you correctly, you
are still pretty comfortable with the remainder of that
portfolio?
P. Martin We are.
A. Barkstrom Okay. A couple of additional questions then I'll turn it
over to the next person. I was curious during the period,
additional broker deposits and additional consumer purchase
loans for first quarter.
D. Dalliper Your question, Adam, is between the fourth and the first
quarter?
A. Barkstrom Yes, I just want to know how much in additional purchased
consumer loans you will bid, and then how much did you ramp
up the brokered CD program, how much in additional brokered
CDs.
D. Dalliper Actually, Adam, as you may recall, we securitized $373
million of second mortgages at the end of 1999. So comparing
the fourth quarter averages to the first quarter we are
actually down $118 million in purchased second mortgages and
correspondingly our brokered CD book is off about $20
million. During the first quarter our average brokered CDs
was about $1.4 billion, which happens to also be the average
of the acquired loan portfolio.
A. Barkstrom Gotcha. But during the first quarter did you all purchase
any additional?
D. Offits Oh yes. It had the effect of a growth of about $250 million.
A. Barkstrom Okay. Because you purchased those really in pools, correct?
P. Martin Yes, but Dennis's point was it is hard to compare fourth to
first because of the securitization, but we did continue to
purchase portfolios in the first quarter.
A. Barkstrom Right. I was just curious as to what that total was for
first quarter, if you have that number.
P. Martin $250 million.
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A. Barkstrom Okay, gotcha. Okay. Thank you.
Operator Frank Barkocy, please state your company name Followed by
your question.
F. Barkocy Keefe Managers. Good afternoon. A couple of questions. In
the press release, just to follow up on Adam's question on
asset quality. You're suggesting that in the healthcare
sector you might have additional MPAs which could lead to
additional charge offs. Does that suggest that we might see
a ramping up in your provision for loan losses from the
first quarter's levels?
P. Martin Depending on our analysis of the Genesis, yes it could.
Again, we see Genesis as a lot stronger than IHF and so, but
we're going to be continually gathering more detail of the
Genesis situation. I mean they do have $1.1 million on
subordinated debt and preferred stock under the senior debt,
and they also have some business lines that they are
actively trying to sell and having some problem finding
buyers, or having problems finding financing for, but
they're valuable business lines. So we don't see those two
credits as analogous. Dick do you want to add anything.
D. Offits No, that's an accurate assessment.
F. Barkocy If that's the case if we do see some ramping up in the
provisions and then as you indicated some additional margin
pressure in subsequent quarters, not being able to sustain
the 23 of the first quarter, are there going to be, or do
you have other offsets that might enable you to sustain or
actually improve on the earnings momentum of the first
quarter?
P. Martin We plan to maintain our momentum on earnings. That answers
your question.
F. Barkocy The question is how.
P. Martin Well, we don't think we'll have an increased pressure for
loan loss reserve that's significant enough to impact our
earnings plans for the year at this point.
F. Barkocy Okay, and last, how does your profitability ratios, the ROA
and the return on common equity and your efficiency ratio
compare to your peer group of I believe, fourteen banks? And
also, what are your targets for those ratios and over what
timeframe?
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P. Martin Compared to our peer group on ROA, we have
traditionally been anywhere from 15 to 25 basis points below
our peer group on ROA. However on ROE, we compare very
favorably on an ROE basis. I think there was another piece
to this? The efficiency ratio is always the subject of
discussion here. It is high compared to our peer group.
Again, it's important to realize that the company is in an
expansion program here and expanding our retail banking
franchise which has costs that go with it. In order to help
finance that, we do use our capital and leverage it in the
most efficient way and the most stable way that we can. And
given the large size of the leveraging program, our margins
are low, and that's the primary reason why our efficiency
ratio remains low. We continue to use leveraging to help us
to finance this market expansion on the retail banking side.
We get into ... generally a discussion of the efficiency
ratio ends up in a discussion of operating expenses.
Compared to our peer group, our average expense per employee
compares quite favorably, to about $2,500 per employee lower
than our peer group. There's a great deal of cost associated
with opening these many branches that we have, particularly
all the mechanics that go into it. So we are financing that
in our operating expenses and paying for it using our
leverage program. And that has the impact of lowering our
margin and lowering our ROA.
D. Offits And lowering our efficiency ratio, I mean raising our
efficiency ratio. I mean they are all part of the same
calculation. We stress earnings per share and return on
equity, and we've done very well over, well over five years,
we've done extremely well in every year. And we consistently
say that we do stress ROE and earnings per share and we make
decisions that are not particularly like leveraging, that
don't particularly impact ROA well, but that's our choice,
because we think ROE and earnings per share is more
important to the value of the franchise and the shares. And
I think it's very important to note that if you do compare
costs per employee, we do quite well, because we do
emphasize control of costs. So our growth and earnings per
share has gone from .88 cents in 1995 to $1.67 in 1999. And
the return on common equity has gone from 10.9% in 1995 to
14.6%. We intend to continue that performance. So that's the
answer on the efficiency ratio.
F. Barkocy Your specific targets for those ratios and over what
timeframe?
P. Martin ROE is to get into the 15 to 18 territory. I am very
reluctant to
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start placing targets on earnings performance going forward.
Let's just suffice it to say here that the market expansion
is going to take out the leveraging program over time. And
that process will lead to ROAs that will be much higher than
they are today, and ROEs that will be much higher. That is
our long term plan. The replacement of borrowed money with
core deposits and the replacement of acquired loans with
self-generated loans is what's in this whole program for
bank expansion. And that's the goal at the end of the day.
F. Barkocy Thank you, gentlemen.
P. Martin Thank you.
Operator Derek Statkevicus, please state your company name, followed
by your question.
D. Statkevicus Hi, this is Derek Statkevicus from KBW. Actually I have two
questions. Number one, looking at net charge offs in the
consumer line items, I see a trend of five quarters of kind
of steadily increasing charge offs. I wonder if you could
(A) shed some light on why that's happening and then (B)
kind of explain where we may see that go forward. And then
my second question is going to be, looking at non-interest
revenues, the service charge on deposits line item, although
deposit growth seems to be pretty good, that specific line
item was down from the fourth quarter and actually down from
the third quarter as well. So I just wonder if you could
shed some light on that. Thanks.
J. Novak Derek, this is Jack Novak. I'll talk about the
consumer charge offs and I think Gary will handle the other
question. The consumer charge offs in absolute numbers
actually have increased slightly over that period time,
basically because of the dramatic growth in the acquired
portfolio. All other portfolios are performing either the
same as or better than they had been before. And very
honestly I think that you will continue to see an absolute
dollar increase of slight magnitude, based once again on the
fact that we have been very aggressive in that portfolio.
But once again, you look at what those numbers are relative
to the outstandings, the net charge off and basis points is
extremely low compared to what that industry average is.
D. Statkevicus Okay.
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G. Geisel Derek, it's Gary Geisel speaking to your deposits service
charges. We're pretty pleased actually, both with our
deposit growth as well as the growth in deposit service
fees. I mean from year to year we're up about 16% in just
what we would call core deposit service fees in this
portfolio. And that's about $1.2 million on a base that was
at about $7.5 million last year at this time for the
quarter. So I'm not sure I understood your question.
D. Statkevicus Well, again, it just seems that with deposits continuing to
grow, you know quarter over quarter, at least core deposits,
I just would have expected to see service charges continue
to increase along with that, at least modestly, you know,
rather than decrease this quarter versus the fourth quarter.
But apparently there's other factors involved so.
G. Geisel Right, I'm quoting from first quarter to first quarter and
I don't have fourth quarter in front of me. Now that we're
hitting our targets for the first quarter and I can't ...
P. Martin I think we better ... you have to give us an opportunity to
look at the fourth quarter, the first quarter on deposits,
service charge, Derek, I believe we are increasing deposit
service charges, so that's ... one thing that we are not
increasing is investment products, investment fees, because
the market's not as good for investment fees. So I think
we'd like to get back to you on that because it is sort of
confusing to us. We don't agree with that so we'll have to
loo at the numbers.
D. Statkevicus That's fine. Thank you very much.
Operator Ladies and gentleman, if there are any additional questions,
please press the 1 at this time. Remember to pick up your
hand set before pressing the buttons. One moment please.
Brian Harvey, please state your company name followed by
your question.
B. Harvey Yes, Brian Harvey with Fox Pitt Kelton. First couple of
questions, one on the tax rate. I think it's down to 31% on
an FTE basis. Second question is CNI loan portfolio's down
link quarter and I think down from the third quarter as
well, I just wonder what's driving some of those and what
you're seeing in the pipeline going forward. And then the
last bit is on the indirect auto business, just how is that
going and just give us an update on that business.
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P. Martin Dennis, why don't you take the tax question and Dick Offits
the CNI and Jack Novak the indirect auto.
D. Dalliper The lowering of our tax rate is coming from the institution
of PB REIT, Inc. and last year which provides federal tax
benefits on our second mortgage portfolio. That rate should
stay stable at that level going forward. You should not see
that improve much from that 31% going in subsequent
quarters, Brian.
B. Harvey Okay, so that's sustainable for all of 2000?
D. Dalliper We think so.
D. Offits Brian, CNI, we were down this quarter, it was relatively
flat. We actually managed a couple of credits out in
healthcare and had a couple of payoffs on the syndicated
side, again, where we opted out of a credit based on
pricing. There has been some fairly predatory pricing on a
couple of the larger deals and we quite frankly asked out of
two on the pricing side.
B. Harvey And what are you seeing in terms of the pipeline as we head
out to the second quarter?
D. Offits Very, very strong in real estate and picking up on
commercial. In fact we did a little bit of booking very late
in the quarter and in early April in CNI.
B. Harvey Okay great.
J. Novak Brian, this is Jack Novak, on the indirect auto. We have
actually had reduction in the outstandings on indirect auto
and that's by design. We went through a complete remodeling
of the product if you will. We changed the mix, we reduced
operating expenses by over a third, asset quality has always
been fantastic in this product, and we've also managed to
put down into the market a product where we can get fee
income on. And as a matter of fact, we are extremely happy
right now with the progress that indirect auto has made and
actually if you look at it on a year to year basis, actually
incrementally accrued profitability within the organization
by over a half million dollars.
B. Harvey Okay great.
Operator Adam Barkstrom, please state your question.
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A. Barkstrom Yes, just a couple of follow-ups, if I could. Dennis, I was
wondering if, first question, if you could give us a little
bit more flavor on the extinguishment of debt, the gain that
was recognized for first quarter, the $770 million, why that
was done, how it was done, and how the gain was recognized.
And then secondly, a few more details on the provision
levels for first quarter, 4.3 relatively to last year those
levels were noticeably higher and I just wanted to hear some
further detail on that if you would.
D. Dalliper Okay, well first the gain was $770,000, not million and ...
A. Barkstrom I'm sorry about that.
D. Dalliper We wish.
A. Barkstrom Don't we all.
D. Dalliper Yes, that would be a nice efficiency ratio, wouldn't it.
A. Barkstrom Absolutely.
D. Dalliper The transaction was, we had $85 million of fixed rate home
loan debt, that when we looked at where swap rates were and
where the home loan's floating rate debt was, and it's
non-callable, it provided us with the opportunity to cancel
that debt, which you can do. Cancel that debt, and then
reissued in the floating rate product and then put on
interest rate swaps to swap it to the same duration as the
original debt. Do you follow me there?
A. Barkstrom Yes, I got you. I guess I'm curious as to why there is a
gain there. Is that just an inefficiency in the market
right now?
D. Dalliper Yes, the desire on the behalf of the Home Loan has priced
their floating rate debt much cheaper. And we were able to
take that with the combination of the swap and we didn't
lower our borrowing costs, obviously the rate is higher all
in, swap rates being where they are, but the present value
of taking this gain beat that incremental cost.
A. Barkstrom Was the term on the swap the same as the term on the debt.
D. Dalliper Yes, matched duration.
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A. Barkstrom Okay.
D. Dalliper Again, this is a transaction where, if available, we'll
continue to look at these capital market kind of
opportunities where we are not going to assume any more
credit or interest rate risks, but where gain opportunities
are available to us to build our loan loss reserve, we are
going to continue to evaluate those.
A. Barkstrom Gotcha.
D. Dalliper Second was on provisions? Could you repeat that one, Adam?
A. Barkstrom Sure, yes, I was curious first quarter provisions, $4.3
million. That was significantly ahead of our estimates and
significantly ahead of quarterly levels all of last year.
I'm just curious as to why that number's so high for first
quarter.
D. Dalliper Because we have the increase in non-performers and we have
the two relationships that we're looking at. We're beginning
to build a reserve. We have that in our plan for the year, a
reserve.
A. Barkstrom Now as I understand Genesis has not been put on non-accrual
yet, is that true?
D. Dalliper That is correct.
A. Barkstrom Okay, thank you.
D. Dalliper You're welcome.
Operator David West, please state your company name followed by your
question.
D. West The Davenport and Company. Good afternoon. Looking at the
average balances, you can see the securitization very well,
and I just wanted to make sure I understood. As far as the
leveraging of the trust preferred, was that done primarily
through purchasing mortgage backed securities?
P. Martin It's a $30 million transaction was the trust preferred and
we're splitting it in half. We are buying back shares with
one half and we're using the other half to put investments
on. Yes, it's mortgage backed securities, David, and a
little bit of acquired loans.
D. West Okay. And that, do you feel like you've effectively
leveraged that at this point in time?
J. Novak Yes, we have. And we were as a matter of fact, we don't want
to say we're issuing trust preferred using $15 million just
to leverage up. Our forecast showed that we were going to
need approximately $10 million in capital anyway on out
through the year. So we just got it done and it appears in
hindsight that it was a good time to get it done, because
now there is little liquidity in that market.
D. West Given that during the month of March you would have had an
opportunity I guess to largely get these transactions in
place, could you talk a little bit about what your net
interest margin was in the March month versus the quarter,
because it seems like that might be a better run rate if you
will going forward.
P. Martin Yes, it was, let's see, give me a second here. The net
interest margin for the month of March was at 3.12, but
again that had some extraordinary items, I would say that
the impact of the leveraging is about 5-6 basis points on
the run rate going forward.
D. West All right, thanks very much.
P. Martin Yes sir. Thank you.
Operator Ladies and gentlemen, at this time there are no further
questions. Please continue with any closing comments.
P. Martin Thank you for participating with us and we hope you've got
all the information you need. But you are well aware that
we're very receptive to phone calls. We're happy to send you
any information that we haven't provided that you want
today, Derek, we'll get back to you with an answer on the
deposit service fees because we believe they have increased
so we need to get that straightened out. So thank you.
Operator Ladies and gentlemen, that does conclude our conference for
today. You may all disconnect and thank you for
participating.