Eagle Bancorp Inc Q4 FY2020 Earnings Call

Ladies and gentlemen, thank you for standing by and welcome to the Eagle Bancorp Inc. Fourth Quarter and Year-End 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Charles Levingston, Chief Financial Officer. Thank you. Please go ahead, sir.

Thank you, Rebecca. Good morning. This is Charles Levingston, Chief Financial Officer of Eagle Bancorp. Before we begin the presentation, I would like to remind everyone that some of the comments made during this call may be considered forward-looking statements. Our Form 10-K for the 2019 fiscal year, our quarterly reports on Form 10-Q, and current reports on Form 8-K identify certain factors that could cause the company's actual results to differ materially from those projected in any forward-looking statements made this morning. Eagle Bancorp does not undertake to update any forward-looking statements as a result of new information or future events or developments unless required by law. This morning's commentary will include non-GAAP financial information. The earnings release which is posted in the Investor Relations section of our website and filed with the SEC contains reconciliations of this information to the most directly comparable GAAP information. Our periodic reports are available from Eagle or online at our website or the SEC's website. I would like to remind you that while we think that our prospects for continued growth and performance are good, it is our policy not to establish with the markets any earnings margin or balance sheet guidance. Now, I would like to introduce Susan Riel, the President and CEO of Eagle Bancorp.

Thank you, Charles. Good morning and welcome to our earnings call for the fourth quarter of 2020. This morning, I'd like to start off with a high-level overview of the quarter and the year and also make a few comments on 2021. Then Jan Williams, our Chief Credit Officer, will discuss her thoughts on loans and credit quality matters. And Charles, who kicked off the call, will discuss our financials in more detail. The three of us will be available later in the call for questions. Looking back at 2020, it is impossible to overstate the commitment and resiliency of our Eagle team to adapt to a totally new environment. It is through their efforts that Eagle's assets reached $11.1 billion and finished the back half of 2020 with renewed strength. In the second half of 2020, our fourth quarter earnings were $38.9 million, or $1.21 per diluted share, and our third quarter earnings were $41.3 million, or $1.28 per share. At $80.2 million for the two quarters combined; these were our highest-ever level of earnings in linked quarters, just above our earnings in the second half of 2018. For the fourth quarter, our return on average tangible common equity was 13.69%. This return continues to outperform others in the industry and is notable as our tangible common equity to tangible assets was a relatively high 10.31% at year-end. Similar to the third quarter, our residential mortgage division continued to remain very active. The fourth quarter loans locked were $427 million and gain on sale of $5.9 million; for the year locked loans were $1.9 billion with a gain on sale of $21.8 million. With market interest rates expected to remain low in 2021, we anticipate that the residential mortgage division will continue to contribute meaningfully to the bottom line. We also saw some gains from our FHA group in 2020. FHA trade premiums, origination fees, and related servicing revenues were slightly less than $4 million during the year, while our traditionally strong loan growth has been impacted in 2020 by the COVID-19 pandemic. It was also impacted by our efforts to reduce the overall mix of construction lending in the first half of 2020. In the latter half of the year, lower rates sometimes forced us to say no, rather than match the pricing of others. Heading into 2021, we expect that the Washington D.C. market will continue to improve as the vaccine rollout continues and that our loan teams will continue to get their share of loans as the pace of economic recovery accelerates. Jan will be speaking to both the improvement of the local economy as well as highlight our continued focus on loan quality. In terms of deposits, corporate deposits continue to flow into the bank. As we said in the past, we will continue to support our clients by holding their deposits. While we have historically operated at an average loan-to-deposit ratio closer to 100%, we averaged just 86% in the fourth quarter of 2020. Carrying this much liquidity contributed to net interest margin falling to 2.98%. However, the additional earning assets offset some of the margin compression and contributed additional net interest income and earnings to the company. Charles will have some comments on the NIM later in the call. Expense control has been an important financial metric for us. Our efficiency ratio at 38.3% for the quarter remains among the best in the industry. Underlying this is our focus on commercial lending with a streamlined branch network, which has been our trademark since the bank launched in 1998. Over the past decade, we have seen other banks slowly begin to reduce their expensive branch footprint. More recently the pace has increased. Early on, we saw the value of being less reliant on branches and putting more emphasis on commercial relationships and technology. We see this as a validation of our banking model. With deposits averaging $9.2 billion in the fourth quarter and just 20 branch offices, our deposits per branch of $460 million are much higher than our peers. On the lending side, in addition to our 20 banking offices, we also have one loan production office. Our on-the-ground philosophy has always been to remain light and adaptable. All of our locations are leased. That includes our headquarters, all branches, the loan production office, and back office locations. This may change if we see property that warrants purchasing, but that has not been our normal practice. In February and March as leases expire, we plan to relocate the best in gallery place branches to newer, better locations and combine our two back office locations into one newer location. As we move through 2021, we expect to continue to focus on ways to maintain our efficiency. In sum, we believe we'll take our share of the loans as the market improves, continue to be laser-focused on credit quality, and continue our long-standing practice of strong expense control. Before handing it over to Jan, I'd like to address our efforts to increase shareholder value, the recently announced stipulation of settlement, and our efforts on diversity and inclusion. For our shareholders, our earnings combined with stock repurchases and dividends are three ways we seek to increase shareholder value. At the end of September, we reinstituted our 2019 stock repurchase plan. And by mid-December, we completed share repurchases under that plan. In late December, the Board authorized a new stock repurchase plan for 2021 for up to 5% of outstanding shares, or approximately 1.6 million shares. One of the factors behind authorizing a new stock repurchase plan is our strong capital position. For the year, we repurchased stock valued at $61.4 million and declared dividends of $28.3 million, returning almost $90 million directly to our shareholders. Also during the year, tangible book value grew 9.4%, rising to $35.74 per share. Shares outstanding were reduced by 4.4% and we paid out 21.4% of earnings in cash dividends. On Monday, we filed an 8-K announcing that we had entered into a stipulation of settlement subject to court approval in connection with the previously disclosed shareholder demand letter. We are glad to put this particular matter behind us and look forward to implementing the agreed-upon governance and control enhancements, many of which as you know are already underway. We are not going to address any of the specifics of the stipulation of settlement and will let the publicly filed stipulation papers speak for themselves. As disclosed in our earnings release, the payment of attorney's fees in connection with the stipulation of settlement was accrued for in the fourth quarter of 2020 and is expected to be fully recovered from our insurance carriers. The previously disclosed securities class action against the company and several of its current and former officers and directors remains outstanding. Lastly, in 2021, we will continue our focus on diversity and inclusion. We have a diverse Board with four women, including myself. We've recently added two new Board members, one of whom identifies as a minority. Last year we formed a diversity and inclusion council, comprised of 16 employees, and conducted an employee engagement survey. The council will be working on identifying areas of opportunity to focus on and programs to support those areas of opportunity. This is an initiative that is very important to the continued success of the bank and has the full support of the senior staff and the Board. With that, I would like to turn the speaking duties over to Jan Williams, our Chief Credit Officer.

Thank you, Susan. Good morning, everyone. I begin by reiterating Susan's comments as we continue to focus on credit quality over loan growth in today's environment. Asset quality closed out the year strong and steady, which enabled the bank to lower its loss provision in the fourth quarter and maintain reserve levels. Comparing linked quarters, NPAs to assets were at 59 basis points, down slightly from 62 basis points. Annualized net charge-offs to average loans were 28 basis points, up slightly from 26 basis points in the prior quarter. Charge-offs in the fourth quarter were primarily attributable to a single restaurant relationship amounting to $4.1 million. The provision to the allowance was $4.9 million, down from $6.6 million. And the allowance for credit losses to total loans was 1.41%, up one basis point from 1.40% in the prior quarter. The allowance was determined in accordance with CECL methodology adopted at the beginning of the year. While we noted that several banks reporting fourth quarter results have reduced or reversed the allowance for credit losses, we believe it's prudent to be cautious in this area. Our coverage of problem loans remained strong at 180% as of year-end. Considering all risk factors and our conservatively underwritten loan-to-value and loan-to-cost policies, we believe our reserves are adequate, including qualitative factors associated with the hospitality and food service industries and a qualitative overlay for loans that had second deferrals. For quantitative measures, the unemployment forecast is still the driving factor. During the fourth quarter, our COVID-19 deferrals dropped significantly as the second 90-day deferral period expired prior to year-end for most customers. As of the year-end, deferrals consisted of nine customer relationships, totaling $72.4 million or 1% of gross loans. The table in our press release shows the migration of the third quarter's deferrals of $851 million. Approximately $60 million were paid down or paid off during the fourth quarter. Of the remaining $791 million, 88% or $698 million were classified as current. Of this amount, all loans that had a second deferral were automatically placed on the watch list. This was done to raise the visibility of these loans within our portfolio and monitor their progress post-deferral. Another $73 million were 30 to 89 days past due and $20 million were nonperforming. The NPAs were a mixed bag that included several owner-occupied restaurant properties. Our largest vulnerable exposure continues to be in the hospitality industry. As a percent of our portfolio, the accommodation and food service industries comprise 9.9% of our portfolio, down from 10.2% last quarter. Outstanding PPP balances at the end of the year were $455 million, down only $1 million from the end of the third quarter. In total, only about a dozen loans were forgiven prior to year-end, as borrowers and the bank were waiting for more guidance from the SBA. With additional guidance received from the SBA earlier this month, the process has begun to accelerate. In regard to the current round of PPP, we began taking applications last week. We are primarily focusing on current clients and will assist them with both first or second draws. Our loan team continues to originate loans and loan closings in the fourth quarter were higher than they were in the third quarter. As our focus has always been on commercial real estate, it's not surprising that commercial real estate accounted for the bulk of the loan closings. The C&I closings were also strong in the fourth quarter. The small decline of loan balances period-to-period in the fourth quarter was attributable to more higher loan payoffs than a lack of originations, including a $78 million payoff of one loan on December 30. While we have talked a lot about our focus on credit quality, we're also focused on maintaining loan yields. As Susan said earlier, we sometimes pass on credits, sometimes because of risk, sometimes because of rate. In the fourth quarter, our yield on loans was 4.5%, up four basis points from 4.46% in the third quarter. Absent PPP loans yielding 2.55%, the yield on loans would have been 12 basis points higher. Looking at our market, while D.C., Maryland, and Virginia have stepped up COVID-related restrictions, the local economy has been recovering. Unemployment in the Washington MSA fell to 5.7% in November, down from 6.9% in September. Loan demand for government contracting and professional services sectors continue to show strength. Construction contractors continue to move forward with projects throughout the region, with both commercial projects and residential construction. We expect to continue to remain cautious on new construction projects, as we have for the past 18 months. With a new administration in place, there tends to be more loan activity with new government contracts being awarded, and a rise in a variety of professional services. We anticipate that our C&I team will pick up some of that activity and that the overall increase in activity will benefit the region. Based on the strength of the local economy, in December the District of Columbia reversed its budget predictions for the current year and the coming year upward and project revenue in 2022 to exceed revenue in 2019. The basis of the upward revision was in part because individual and business tax income revenue was stronger-than-expected and in part because of the vaccine rollout. As the vaccine continues to be distributed, it is expected to have an outsized positive impact on the restaurant and hospitality businesses in our market area. Later in the year, we see that Washington D.C. will return to being a major tourist destination as well as a major hub for government and private enterprise. With that, I'd like to turn it over to Charles Levingston, our Chief Financial Officer.

Thank you, Jan. Comparing our performance over linked quarters, net interest income was up $2.4 million on a much larger asset base. The provision for credit losses was down $1.7 million, while the provision for unfunded commitments was up about $2.5 million. The largest change was in non-interest income, which was lower by almost $8 million, primarily from lower gains on sale from the residential mortgage division. As you may recall, third quarter locked loans were at record levels and are typically higher than in the fourth quarter. The other notable changes were lower non-interest expenses with premises and equipment lowered by $1.8 million, but the prior quarter had a non-recurring expense of $1.7 million to properly value the lease extension. And legal fees were lower by $755,000 net of estimated insurance receivables under our D&O policies. Bottom line on a linked-quarter basis, earnings were lowered by $2.5 million. I would like to point out that our third quarter was the bank's highest level of quarterly reported earnings. At year-end 2020, assets were $11.1 billion, up $2.1 billion for the year and up $1 billion for the quarter. Balance sheet growth in the fourth quarter and the third quarter were primarily driven by corporate deposit influence. Overall, as a result of the deposit inflows, average assets for the fourth quarter were up $668 million from the prior quarter. These inflows continue to put pressure on the NIM, which was 2.98%, down from 3.08% in the prior quarter. While the NIM was down, the increase in assets kept net interest income from falling. Net interest income was $81.4 million for the fourth quarter, up from $79 million the prior quarter. A large portion of deposit inflows were non-interest-bearing, which keeps the deposit mix very favorable. In the fourth quarter, 33% of average deposits were non-interest-bearing, and the cost of interest-bearing deposits declined to 61 basis points, down from 75 basis points the prior quarter. And the cost of funds was 48 basis points, down from 58 basis points the prior quarter. The bulk of this new funding went into overnight funds. As a result, interest-bearing deposits with other banks increased to an average of $1.75 billion, up $476 million from the prior quarter. The average yield on this line item was just 11 basis points. The balance of the deposit inflows was invested in securities, which averaged $1.1 billion, up $215 million from the prior quarter. The average yield of the investment portfolio was 1.52%. Looking at items that impacted NIM, on December 15, we lowered deposit rates across the board by five basis points. Going forward, we expect to continue to see higher-cost time deposits roll off. At year-end, we had loans of $2.9 billion with floors, of which $2.8 billion are already at the floor. In terms of the deployment of excess liquidity, we will continue to judiciously deploy the funds into securities and loans but remain cognizant of the need to remain flexible to serve our client deposit needs and not over commit in such a low-rate environment. With that, I'll hand it back to Susan for a short wrap up.

Thanks, Charles. As we move into 2021, I'm confident that Eagle is well-positioned to continue to deliver industry-leading results. Our earnings, credit quality, and capitalization remain strong. Our employees are committed and resilient. The Washington market remains a premier business center, and the hospitality and food accommodation industries, which are an area of focus for the bank, are the most visible economic beneficiaries of the vaccine rollout. Thanks again for joining us this quarter. We will now open up the call for questions.

Please be advised that the conference is open for questions. And your first question comes from Casey Whitman from Piper Sandler.

Hey, good morning.

Hi, Casey.

So maybe I'd start off with just some questions for Jan, and congrats to you on navigating through 2020. So just looking at the disclosures, it seems like a lot of the remaining deferrals are in the transportation and warehousing industry. So can you maybe tell us a little bit about the makeup of that book and the types of collateral support, et cetera? Thanks.

Yeah. You're speaking about the $72 million still in the deferral phase?

That's right. Yes.

Yes, I can tell you that while transportation is significant, the largest segment is actually related to tourism. We have a plan for those involved. What's being deferred mainly consists of some equipment leases. We have real estate collateral that secures most of the debt. I believe we are in a strong position based on the cash flow provisions we've received and the liquidity available to the company. I'm feeling optimistic about this situation. If the vaccine rollout goes as planned and tourism increases again later in the summer, I think we'll be in good shape. I don’t view loss concerns as a significant issue. The worry about non-performance would only arise if a new virus strain emerged that the vaccines couldn't combat, extending the downturn in the travel and entertainment sectors. Other than that, we have a property used for adult care that has experienced a COVID outbreak, which temporarily lowered the occupancy level. We are collaborating with them and I expect them to perform well during the deferral period, which involves interest-only payments, not a complete deferral. The same applies to a customer in the travel, tourism, and entertainment industry. We also have an office building that is undergoing a deferral, which will conclude within the next 30 days. We are closely monitoring all these situations. Besides that, there isn’t anything significant on this list that would materially impact the balance sheet or our income statement. We are maintaining close contact with each of these accounts, and our COVID task force has been diligent in developing remediation plans to improve our position and help these companies continue to perform. Does that address your inquiry?

Thank you.

It does. Thank you for all that detail. I guess, another question for you would be, well thank you for the additional color on the watch list this quarter. I was wondering first, it looks like you've got about $632 million within those sort of at-risk segments. Is that going to comprise like the majority of what's on watch or just a portion of it? So then maybe we can assume there wasn't much... Yes.

Okay, got it. So there wasn't much movement in the watch list this quarter. And then, I guess, was there any migration that we should know about into the substandard or special mention this quarter? Are those pretty stable from last quarter?

Pretty stable, although I would tell you that there are occasional moves into special mention. There may be one or two credits that will be migrating there. Or they have half migrated. I think we're doing a good job of staying on top of these and making sure that things come out. But, for example, as a result of changes in the way that various jurisdictions have enforced indoor dining and prohibitions on bars and limited hours that would put folks perhaps migrating from watch to special mention. We expect to see those changes roll back as the vaccine is distributed. And we're all hopeful that distributions happen with Amazon-like precision, but that remains to be seen at this point.

Got it. Very helpful. I’ll let someone else hop on. Thanks.

Your next question comes from the line of Steve Comery with G. Research.

Hey, good morning.

Good morning, Steve.

Wonder if we could start with the loan yields. Appreciated the 4.62% during the quarter ex PPP. I was wondering if you have the number for Q3?

I don't have that offhand, but that's something I can certainly give back to you on, Steve. But yeah, it would likely be somewhat of a similar shift given the static balance of the PPP loans, as well as a fairly flat average loan balance quarter-to-quarter.

I think in the third quarter, we were looking at $446 million without the PPP impact since PPP loans didn't move significantly. It's probably pretty close to the same level of impact. So I think you could in general carry over the up four basis point number?

I think that's a fair guess.

Okay, okay. Fair enough. Maybe moving on to the construction projects and the payoffs. Is that something that at this point it looks like it's probably behind the bank, and you'd expect lower payoff levels going forward, or is this kind of an ongoing thing and they kind of happen when they happen?

Well, I think in construction in general you would expect similar projects are completed that – in the instance of a commercial property, they’re going to be looking for permanent financing to the extent that we can do that. We certainly try to get the first shot of that keeping a performing property in the portfolio, to the extent that we don't want to dip down to the rates that are being offered on some properties long-term now. We would expect to see that roll off. For the sale projects in the residential area, you're naturally going to see those drop down as units are sold. We are booking some new carefully selected construction projects. So overall, it's going to be a timing issue, not necessarily an abatement of the level of construction overall.

And I would just add, that's been part of the Eagle story for some time and we do see some large quarters of larger payoffs than others. And we see that as successful and that these construction projects are being completed and they're clearing the market in terms of permanent financing. So it is something that I would expect that we would see continue given the nature of our business.

Okay. And then maybe one more on the construction topic. So construction balances on a period-end basis, it looks like the mix was more owner-occupied versus commercial and residential versus last quarter. Is that part of an active risk-related strategy, or is that just reflecting the demand that was out there?

I think it's a combination of both. I do think on the owner-occupied side, the fact that they're not supposed to be included in concentrations is certainly a factor. I think the underlying business that supports those particular properties is a factor. But I also think some of it is just the demand and where things are going at this point in time.

Okay. Thanks. Appreciate it.

Your next question comes from the line of Stuart Lotz from KBW.

Hey, guys. Good morning.

Good morning.

Good morning, Stuart.

Charles, if we could just dive into the buyback real quick, it was nice to see when you guys kind of reinstated that in the fourth quarter. What is your expectation for the cadence of buybacks this year? And do you currently anticipate utilizing that full $1.6 million share authorization?

Yes. We are going to continue to evaluate that on an essentially a regular basis. But to the extent that the share price runs up to a point where we don't feel it's prudent to continue to purchase at certain levels, we won't be active. But it's really going to depend on the volatility in the share price throughout the year as to whether or not we see all those shares repurchased over the course of the year. Can't give you a specific number unfortunately.

Okay. That's helpful. Turning to the balance sheet, this quarter's deposit growth was impressive. What do you expect for those deposits as we examine the trends so far in the first quarter, considering the dynamics of the second round of PPP as well as some of the first round loans expiring? Do you anticipate your deposit levels staying around $11 billion, or do you expect them to decrease?

Yes, Stuart, the expectation is that liquidities will remain strong all things equal this year. I mean, we'll need to see some kind of a catalyst for change, which obviously is the vaccine rollout giving to that herd immunity, returning to normal and having the FOMC make a change in their policy posture and to stop buying bonds, and for other firms to see opportunities for investment elsewhere so that their funds aren't sitting idle, which seems to be the nature of things these days. So, I think there's a lot that goes into that. But our expectation now appears to be status quo for the majority of the year.

So you think is your current anticipation is for the kind of that core margin to stay around 3%, or do you see any near-term lifts, given PPP fees and some of the excess liquidity being deployed?

Yes. Again, all things equal and within some reasonable standard deviation, my expectation is we would see a relatively stable margin throughout the year.

Your next question comes from the line of Dave Bishop with Seaport Global.

Hi, Dave.

Hey, good morning, guys. How are you?

Good. Dave, how are you?

Hey, quick sort of staying on that topic, Charles. Obviously, with the sort of influx of liquidity even despite a little bit of build here in the fourth quarter. Investment securities obviously have trended down as a percent of assets to below sub-10%. Do you see that maybe tipping up over the course of 2021 with maybe some opportunity to sort of improve the yields read between that sort of surge funding and short-term liquidity and investments?

Yes, you raise a good point. We want to be careful about how we use those funds and avoid over-committing to a single area of the market. If I had to guess, a few years from now we might not be satisfied with the securities we are buying today, assuming conditions improve. However, by that time, there may be better opportunities to invest in a more active loan market. Therefore, we aim to proceed cautiously. Changes can happen quickly, so we need to be mindful in our approach to deploying these funds. Meanwhile, we want to ensure we generate some income while managing the risks associated with our surplus liquidity. I expect to see continued growth in our investment portfolio as we aim to add higher-earning assets.

Got it. And I think the narrative mentions in terms of the deposit flows this quarter maybe some flight to, I guess, liquidity from certain fiduciary clients. Anyway, is there any way to ring-fence the dollar amount that was related to that inflow?

Yes. I mean that was a healthy balance or portion of the balance of funds brought in. I would say it's around $550 million or so.

Got it. In terms of the opportunity from the repricing of the time deposit CDs, could you share what the current onboarding rate for your CDs is? Also, what does the roll-off or maturity calendar look like for the first half of the year?

Yes. Our current rate sheet has one-year CDs at 12 basis points. Looking at five-year CDs at 40 basis points and you can interpolate what's between that. There's not a lot of appetite at those levels obviously and certainly not a lot of appetite out further than that. But yes, we expect to continue to see those higher rate CDs roll off here and hopefully continue to help support our lowering funding costs over the course of the year. And some of that is a little bit front loaded, but there's still some of those time deposits to roll off, yes.

Got it. Appreciate the color. And then maybe one final one, maybe for Jan. Appreciate the continued color and the disclosure in terms of the loan deferral migration. Just curious, the improvement from the third quarter, the decline in the loans on deferral, the loans that are off deferral, are they now making full P&I payments, or there's still some sort of modification, or is there a sense or form like IO or PO in there? Just curious maybe some color in terms of the improvement in terms of the deferrals how they're paying?

Yes. If they were on interest-only before the pandemic, they're still going to be on interest-only. So there will be a fair-sized chunk within their interest-only. If they were amortizing pre-pandemic, then they return to amortization.

Return to amortization. Great. Thank you.

Your next question comes from the line of Feddie Strickland with Janney Montgomery.

Hi. Good morning.

Good morning.

Good morning.

I'm just wondering what you're seeing so far this month on PPP forgiveness? I know the balances didn't really change that much in the fourth quarter. And just kind of how you see that playing out over the next couple of quarters?

I think the SBA has not been expeditious in bringing out final rules and regs on this. So I think that's impacted the process and delayed it considerably. I do think we're going to see more progress going forward and it probably will be at an accelerating rate. Personally, I think a big driver of that is for those folks that are looking at second draw situations. They're more motivated to get through that forgiveness process, especially the larger customers. So I do think that that's going to accelerate. But then you also have to consider whether the SBA has adequate staffing to handle that. And that's sort of the big unknown right now. So other than things that will be 'automatically' forgiven, I would imagine there are definite human resources challenges at SBA.

And I would add my expectation, just one-man opinion, is sometime in the second or third quarter that you see the lion's share of those come in. I mean the way that the SBA is handling those PPP forgiveness loans for those loans that are under $150,000 given the recently passed stimulus should expedite a good number of the volume of our loans, although it's not the largest dollar amount of those loans. So, but I do think that at that point hopefully the process will be a little bit better oiled and we'll be able to get some more of those through. But it's been modest so far at best.

Got you. And kind of along that same line, I know it's only been like a week or so. But how has demand looked for the second round? I know it just started, but I'm just curious what the interest level is relative to round one.

It's definitely not at the level that it was the first round. We've seen significant decreases in that level. I would estimate and I don't have a clear number on that, but maybe 600 of them have been applied for now in the first round or in the second part of the first round. We did over 1,400 loans. So it definitely is at a slower pace, and from what I understand that's true with what other banks are feeling too.

And again, that's relevant to our customer base which limits the population obviously.

Got it. Awesome. Thanks, guys. Appreciate the additional color.

Sure.

Thank you.

And at this time, there are no further questions. I would now like to turn the conference over to Susan Riel for closing remarks.

Okay. I want to thank you for being with us today. And we look forward to speaking with you again at the end of the first quarter of 2021.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.