Earnings Call Transcript - STEL Q1 2021

Operator, Operator

Good day, and thank you for standing by. Welcome to the Allegiance Bancshares First Quarter 2021 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Courtney Theriot, Executive Vice President and Chief Accounting Officer. Please proceed.

Courtney Theriot, Executive Vice President and Chief Accounting Officer

Thank you, operator, and thank you to all who have joined our call today. This morning's earnings call will be led by Steve Retzloff, CEO of the Company; Ray Vitulli, President of the company and CEO of Allegiance Bank; Paul Egge, Executive Vice President and CFO; Okan Akin, Executive Vice President and Chief Risk Officer of the Company and President of Allegiance Bank; and Shanna Kuzdzal, Executive Vice President and General Counsel. Before we begin today, I need to remind everyone that some of the remarks made today constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 as amended. We intend all such statements to be covered by the safe harbor provisions for forward-looking statements contained in the act. Also note that if we give guidance about future results, that guidance is only a reflection of management's beliefs at the time the statement is made, and such statements are subject to change. We disclaim any obligation to publicly update any forward-looking statements, except as may be required by law. Please see the last page of the text in this morning's earnings release, which is available on our website at allegiancebank.com for additional information about the risk factors associated with forward-looking statements. We also have provided an investor presentation on our website. Although it is not being used as a guide for today's comments, it is available for review at this time. At the conclusion of our remarks, we will open the line and allow time for questions. I now turn the call over to our CEO, Steve Retzloff.

Steve Retzloff, CEO

Thank you, Courtney. We welcome everyone to our conference call, and thank you for your attendance. The first quarter represented a very productive start for the year, highlighted by record earnings per share of $0.89, along with significant deposit growth of $386 million during the quarter, bringing our total deposit growth over the past 12 months to $1.42 billion, or 35.9%. Assets increased to $6.43 billion as we have now funded over $1.04 billion of PPP loans, with over $332 million being funded during the last quarter. All in, we remain in a strong position regarding capital and liquidity, and we increased our dividend to $0.12 per share of common stock in the first quarter. Our record earnings were aided by the accelerated recognition of PPP fees during the quarter and by the low provision number that came from having very little in the way of net charge-offs and an improving economy. That said, we absorbed added costs in the quarter due to asset write-downs, as Paul will describe, and incurred increased overtime and third-party staff augmentation expenses totaling approximately $400,000 in the quarter, which further advanced our PPP production. Our stakeholders benefited from the continued extraordinary outpouring of effort from our staff, as we not only booked a large number of PPP loans, but also originated $325 million of core loans during the quarter for a total loan production of $657 million in the quarter. With the PPP now moving into the final completion and forgiveness phase, our production staff will be able to redirect their entire focus to generating traditional core lending and depository relationships, for which our pipelines are already solidly established, and will be further enhanced as we use our proven relationship-building skills to deepen that connection through the approximately 4,000 new customers who we assisted with our PPP effort. We are pleased with our overall asset quality, and we're able to significantly reduce our ORE. We continue to remain alert to the impact that the pandemic has had on our community and our customers, particularly those in the higher-risk sectors. But the streets of Houston are showing signs of broader economic activity as heavy traffic, which used to be a curse, is now a welcome sign. Although with a sense of steadily growing optimism, we remain cautious about the timing of a full and complete rebound for all sectors. Given our growing market penetration and size, while we continue to focus on high service levels to smaller commercial customers and the market differentiation this strategy affords us, we are beginning to attract and retain larger lending relationships. That said, our average loan size is not expected to change appreciably, but we believe that a well-managed step in this direction is not only warranted but provides incremental quality growth opportunities. From an operational perspective, we have acquired a more robust and integrated loan origination system, which we deployed quite effectively as the platform and workflow for handling our PPP loans. And we are now beginning to implement this new system for our entire lending platform. Finally, Allegiance has built and continues to add to the value of our brand and has evolved into an extraordinary franchise value by accelerating our penetration into the market with more and more customers who have now had firsthand experience and appreciation of what our service level commitment can bring to their table. Given how we responded to the needs of this community over the past year, I believe that we are the clear bank of choice in the Houston region, and we will be deepening our position even further over the coming year. Next, Ray will describe our loan and deposit production results as well as an outlook on credit, followed by Paul, who will cover our financial results. We will then open the call for questions.

Ray Vitulli, President and CEO of Allegiance Bank

Thanks, Steve. The first quarter of 2021 saw our bankers back in the PPP origination business as we worked with our customers, both existing and new, through the second round of the program while assisting first-round borrowers with the forgiveness process. As mentioned last quarter, we designed the second-round effort in a way for our bankers to meet PPP demand while allowing capacity to generate and expand customer relationships. As a result, we are extremely pleased to report core loan originations of $325 million, the second-highest level in the history of the bank, driven by improving economic conditions, market share gains, and continued conversion of the nearly 4,000 new customers from our PPP effort. In addition to our new customers from PPP, we also attracted 1,800 new non-PPP customers over the past 12 months, bringing total customer acquisition to 5,800, representing 19% growth over the past year. We have also seen increased adoption and utilization of nearly every electronic banking service from mobile remote deposit capture to ACH originations to wire transfers. We continue to review our electronic banking product offerings to meet customer demands and expectations and also monitor our brick-and-mortar footprint to optimize how we deliver service and position ourselves to execute on what we believe to be an extraordinary market share growth opportunity. With regards to PPP forgiveness, as of March 31, we received forgiveness applications for 4,103 loans totaling over $505 million, or about half of the $1 billion in PPP loans originated. Of those, 3,324 have been submitted to the SBA, totaling over $433 million, with 2,973 loans having been approved and funds received of over $364 million. In early March, we incorporated a new simple forgiveness application for loans up to $150,000 into our platform, which was welcome news since the majority of our PPP borrowers are able to use this form. In addition to helping our customers through the PPP process, we also provided assistance to eligible borrowers with payment deferrals on outstanding loan balances of $1.15 billion, or 30% of core loans. Of this amount, approximately $62.1 million of core loans remain on deferral as of March 31, 2021, further reduced to $54.9 million as of April 22. Moving now to our quarterly operating results. Total core loans, which excludes PPP loans, ended the first quarter at $3.93 billion, an increase of $8.9 million during the quarter. During the first quarter, our staff and lending team booked $325 million of new core loans that funded to a level of $203 million by March 31, compared to the fourth quarter, where $311 million of new core loans were generated, which funded to a level of $220 million by December 31. Paid-off core loans were $180 million in the first quarter compared to $195 million in the fourth quarter of 2020. The $180 million of paid-off core loans during the quarter had a weighted average rate of 5.15%. Carried core loans experienced advances of $97 million at a weighted average rate of 4.93% and paydowns of $105 million, which were at a weighted average rate of 5.11%. We are pleased to report the weighted average interest rate charged on our new first-quarter core loans of 4.63%, which is just below the fourth quarter 2020 weighted average rate of 4.64% and equal to the third quarter 2020 weighted rate. Overall, the period-end weighted average rate charged on our funded core loans decreased 6 basis points, ending the quarter at 5.02% compared to 5.08% as of December 31, 2020. Over the past few quarters, we have provided information on several loan categories that could have heightened risk due to energy prices and/or the COVID pandemic. These include our oil and gas portfolio, our hotel portfolio, and our restaurant and bar portfolio. As of March 31, our oil and gas portfolio totaled $72 million, or 1.6% of our funded loans, with an average LTV of 53.8% on the CRE portion. The hotel portfolio totaled $125 million, or 2.78% of our funded loans, with an average LTV of 60.8% on the CRE portion. The restaurant and bar portfolio totaled $116 million, or 2.58% of total loans, with an average LTV of 59.2% on the CRE portion. In aggregate, asset quality at quarter-end continued to remain in a manageable position. Nonperforming assets, including both nonaccrual loans and ORE, ended the first quarter down from 63 to 55 basis points of total assets, primarily due to the sale of $8.6 million of other real estate owned during the quarter. Nonaccrual loans increased a net of $6.2 million during the quarter from $28.9 million to $35.1 million, primarily due to $15.1 million in additions that were partially offset by $4.7 million of payoffs, $2.7 million in payments, and $1.5 million in upgrades placed back on accrual. The largest addition was a $4.9 million hospitality property. The additional $10.2 million increase in nonaccruals was from 13 relationships, 2 of which totaled $6.1 million, and the remaining $4.1 million was from 11 smaller relationships. ORE decreased to $576,000 during the quarter compared to $9.2 million for the fourth quarter, primarily due to the $8.6 million of ORE sales. Our ORE is now comprised of one residential property. Charge-offs for the quarter were minimal at an annualized rate of 3 basis points. In terms of our broader watch list, our classified loans as a percentage of total loans increased to 3.91% of total loans as of March 31 compared to 3.61% as of December 31. Criticized loans increased to 5.98% at March 31 from 5.95% at December 31. Specific reserves for individually evaluated loans ended the quarter at 14% compared to 12% at December 31. On the deposit front, we saw an increase in total deposits in the first quarter by $385.7 million from the fourth quarter and up $1.42 billion over the year-ago quarter. The increase during the first quarter was primarily in the noninterest-bearing deposit category, which increased $209.6 million over the fourth quarter and $696.6 million over the prior year as a result of new accounts associated with PPP customers, as well as higher balances in our carried accounts. Our noninterest-bearing deposits to total deposit ratio was 35.6% for March 31 compared to 34.2% for December 31 and 30.8% for the year-ago quarter. As previously mentioned, we are seeing signs of economic recovery as reflected in our level of new core loan originations, the downward trend of loan deferrals, and loan payment performance. Recent data from the Texas Workforce Commission shows the Houston area created 34,000 jobs in March, well above the historical monthly average of 13,100 jobs. Through March, Houston has recovered 168,400 jobs, or 47% of the jobs lost last March and April. With a healthy loan pipeline, customer acquisition, and conversion opportunities in front of us, increased disruption in the banking industry for both business owners and bankers, and an ever-strengthening market position in the Houston region, we are poised to identify our organic loan growth prospects similarly to our PPP success, describing them as outsized. I now turn it over to our CFO, Paul.

Paul Egge, Executive Vice President and CFO

Thanks, Ray. We are proud to report record first quarter net income of $18 million, or $0.89 per diluted share, compared to $15.9 million, or $0.77 per diluted share in the fourth quarter and $3.5 million, or $0.17 per diluted share in the first quarter of 2020. Our record earnings were despite elevated expenses in the quarter, the most significant of which were approximately $1.5 million in nonrecurring asset write-down expenses, most of which relate to a branch closure during the quarter. Pretax pre-provision income for the first quarter was $22.5 million, compared to $24.2 million in the fourth quarter and $15.3 million for the year-ago quarter. Adding back the $1.5 million in nonrecurring expenses as an adjusted measure for pretax provision income would have been approximately $24 million. Net interest income was the key driver of our pretax pre-provision earnings power during the quarter, where we saw an increase of $796,000, or 1.4%, to $55.7 million from $54.9 million in the fourth quarter, primarily due to lower interest expense in the quarter and higher revenue recognized on PPP loans, partially offset by lower core loan income. Interest expense decreased by $1 million in the first quarter compared to the prior quarter. Total fee revenue related to PPP loans, which were recognized as interest income during the quarter, was $6.9 million, an increase from $6 million in the fourth quarter. Yield on loans in the first quarter was 5.15% compared to 5.09% for the fourth quarter and 5.59% for the year-ago quarter. Excluding PPP loans and related revenue, yield on loans would have been 5.06% for the first quarter, 5.07% in the fourth quarter, and 5.59% in the year-ago quarter. Total yield on interest-earning assets was 4.67% for the first quarter, down from 4.71% in the fourth quarter and 5.28% in the year-ago quarter, reflecting a change in earning asset mix that includes a higher proportion of securities as well as significant PPP loans within the loan totals. Excluding PPP loans and related revenue, total yield on earning assets would have been 4.54% for the first quarter versus 4.67% in the fourth quarter. Before I move on, I should note that as of quarter-end, we had approximately $22 million of net deferred fee income remaining related to PPP loans. With respect to interest expense, our cost of interest-bearing liabilities continued to decrease in the first quarter to 80 basis points from 93 basis points for the fourth quarter and 168 basis points for the year-ago quarter. The overall cost of funds for the first quarter was 54 basis points versus 62 basis points in the fourth quarter. We expect to see continued improvement in our funding costs going forward, particularly as the CD book continues to reprice lower. With the help of lower interest expense in Q1, PPP net fee income recognition offsetting a significant shift in the composition of our earning assets, our taxable equivalent net interest margin was 4.19% for the quarter compared to 4.14% in the fourth quarter and 4.15% in the year-ago quarter. Excluding PPP loan balances and related revenue, net interest margin would have been 3.95% for the first quarter. Going forward, we are well-positioned to maintain a relatively strong core net interest margin through optimizing our funding mix and maintaining discipline on loan pricing. That said, excess liquidity and changes to our earning asset composition have the potential to be a drag on NIMs depending on how our core loan growth story plays out. Noninterest income was lower quarter-over-quarter, decreasing to $1.7 million for the first quarter from $2 million for the fourth quarter, primarily due to a $176,000 loss on the sale of OREO assets. Total noninterest expense increased in the first quarter to $34.9 million compared to $32.7 million in the fourth quarter. The difference is primarily due to increases in the salary and benefits line and the other expenses line. Other expenses include the aforementioned $1.5 million in nonrecurring asset write-downs. The efficiency ratio for the first quarter increased to 60.85% compared to 57.53% from the fourth quarter and decreased from 68.13% for the prior year quarter. Excluding the asset write-downs, the efficiency ratio for the first quarter would have been 58.29%. The provision for credit losses was $639,000 for the first quarter, and our allowance for loan losses ended the quarter at $52.8 million, representing 113 basis points of total loans and 134 basis points on core or non-PPP loan balances. Bottom line, our first quarter produced an ROAA and ROATCE of 1.18% and 14.03%, respectively, both representing all-time highs. Quarter-end tangible book value per share was $25.75, which represents an increase of approximately 13.5% since the year-ago quarter, which is something we are proud of. All in all, we feel very well-positioned to continue to drive franchise and shareholder value in 2021 and beyond. To that end, the company declared another dividend of $0.12 per diluted share on common stock and renewed a 1 million share repurchase authorization to replace the authorization that expires at March 31, 2021. And on the topic of share repurchases, I should note that during the first quarter, we did repurchase 161,000 shares at a weighted average price of $35.11. Reflecting on over a year in a COVID-impacted operating environment, we are very proud to be bigger and better than ever at over $6.4 billion in assets, with capital, reserves, and liquidity levels at or near all-time highs. Thanks to tremendous PPP success driven by the amazing dedication of the Allegiance team, we've been successful in adding to our market share as Houston's largest regionally dedicated bank. I will now turn the call back over to Steve.

Steve Retzloff, CEO

Thanks, Paul. With that, I will now turn the call over to the operator to open the line for questions.

Operator, Operator

Our first question comes from David Feaster with Raymond James.

David Feaster, Analyst

It sounds like originations were really strong despite distractions from the PPP. Just curious how the pipeline is shaping up and what you're hearing from customers. How much of the production is kind of coming from existing clients that are more confident and willing to invest versus new client acquisition from either new lender hires or the PPP program? And just the pulse of your clients.

Ray Vitulli, President and CEO of Allegiance Bank

Thanks, David. Yes. So it was strong in that first quarter. I'd say that while we would really like to target maybe a 50-50 split of that growth coming from new and existing clients, it's probably a little bit more skewed towards existing as we work with our established customers. We're still doing customer acquisition on the PPP side, but the mood is very good, and the pipeline is at pre-pandemic levels. When the pipeline grows, that's coming from our field indicating these are the requests we have in place and the deals that are currently being discussed. So we're feeling good about that and the future prospects for more originations.

David Feaster, Analyst

Okay. That's encouraging. And then just how are new hires turning? You guys have always done a great job picking up new lenders. With bonuses being paid and some disruption in the market, have you seen an increase in conversations? And maybe how is the pipeline for new hires?

Ray Vitulli, President and CEO of Allegiance Bank

Yes. Conversations have picked up. You're right; the first quarter is usually a little light because of that, because of bonuses. We did have one lender hire in the first quarter. Looking back over the past four quarters in a COVID environment, we had six producer hires and one from our homegrown pool for a total of seven. Given the circumstances over the past four quarters, we feel pretty good about making those additions. Yes, the conversations are picking up, and we do see some disruption. There are kind of two forms of disruption: one is what happens in the M&A world, and the other one is changes in our space as the competition continues to redefine what business banking means. These disruptions affect customers and bankers, and we are engaged in those conversations.

David Feaster, Analyst

Okay. That's great. And then it's encouraging to hear about the new loan yields in the originations. It sounds like pricing might be leveling off here. Do you think that's a function of mix? Or how has pricing trended recently? Has the steepening of the curve allowed for better pricing at all? And do you believe the shift towards larger credits, as you talked about, may impact new loan yields? Or do you think you'll still be able to get these premium levels of rates despite going slightly upstream?

Ray Vitulli, President and CEO of Allegiance Bank

Well, we feel good about the past three quarters with the rate on new production holding around 4.63% and 4.64%. It's still very competitive, so I'm not sure we're hitting the floor, but we're pleased with where things landed in the last three quarters.

Steve Retzloff, CEO

Yes, and this is Steve. Regarding the larger loans, we're looking at larger loan relationships. A number of our customers have multiple loans and projects. If you restrict that to a certain maximum relationship size, then you're going to miss the next deal. We're just kind of opening up that door a little bit. It's not an appreciable increase in loan size, but rather more an opportunity for bigger relationships.

Operator, Operator

Our next question comes from Brad Milsaps with Piper Sandler.

Brad Milsaps, Analyst

Ray, I think I heard you correctly say you've added 5,800 customers over the last 12 months, which is a tremendous number. Thus far, those have really translated into deposit balances. It may be tough to quantify, but how much loan growth do you think you pull forward with your participation in the PPP program? Just trying to get a sense of when some of this production you're seeing can actually translate into actual loans outstanding on the books.

Ray Vitulli, President and CEO of Allegiance Bank

Yes, great question. When you look at the 4,000 from the PPP, as we try to penetrate that and convert those to full customers, we're seeing low, maybe a quarter of that number at this moment with something other than the PPP loan. It's a process to work through and generate additional business, and we are working on that. I think we'll pick up gains every quarter. We have several touchpoints with these customers, not only on the origination side but on the forgiveness side, as a number of the second-round borrowers were also our existing customers from the first round. We are optimistic about what lies ahead with the conversion opportunity.

Paul Egge, Executive Vice President and CFO

PPP customers are receiving liquidity through the PPP loan program, which suggests an impact on their loan demand and how they may be positioning themselves. Their readiness for the next loan may be delayed due to benefit from the PPP program in the near term and the recent past.

Brad Milsaps, Analyst

Sure, sure. And so Ray, would you say that maybe growth is kind of low single digits type rate in the near term, and hopefully, by next year, you guys can start ramping back up closer to what you've done historically?

Ray Vitulli, President and CEO of Allegiance Bank

Yes, core loans. I think that's accurate.

Brad Milsaps, Analyst

Okay, okay. And then just curious about how you guys are thinking about resolution on some of the loans you're still having issues with coming out of the pandemic. I think it sounded like criticized and classified loans had stabilized just below 6%. How are you thinking about potential losses as you get into the back half of the year and how that relates to your approach towards reserve levels and provisions going forward?

Steve Retzloff, CEO

We feel like we have all problem loans identified properly, and we assess them every quarter. We've experienced very low charge-offs so far. There's probably no way to extrapolate that into a quarter-by-quarter projection. But we feel like we're in the right place with those participating in deferrals, and their underlying business model is improving over time, such as with local hotels and so forth. We feel good that it shouldn't be outsized in terms of any issues with problem assets getting worse. I really think it's more on the path to getting better from here. Of course, it all depends on the pandemic.

Paul Egge, Executive Vice President and CFO

I might note that anything requiring individual evaluation under CECL has been evaluated and considered in our provision and allowance for credit losses.

Ray Vitulli, President and CEO of Allegiance Bank

Yes.

Okan Akin, Executive Vice President and Chief Risk Officer

Yes, in addition to that, this is Okan. I want to add that we're seeing a significant deceleration of downgrades in our portfolio and are even experiencing, in some instances, upgrades. This is especially pronounced with our high-risk portfolio, which is performing better than initially expected.

Brad Milsaps, Analyst

Great. And just one final question for Paul. Excluding the branch write-down, would you think that $33 million or so of expenses this quarter is a decent run rate? Or was there anything else that may have caused that to go up appreciably, possibly due to FAS 91-related from PPP in Q1?

Paul Egge, Executive Vice President and CFO

I think $33 million is a reasonable run rate. I might hedge and say $33.5 million, give or take, is where you'll see things. There’s some noise in the second quarter. We'll still be paying for some of the staff augmentation used to really push our efforts into PPP, and we will pivot a bit to the forgiveness effort. So there's still some expenses out there, but nothing that should be alarming.

Steve Retzloff, CEO

Yes. And record earnings bring record bonuses and profit-sharing accruals as well.

Operator, Operator

Our next question comes from Brady Gailey with KBW.

Brady Gailey, Analyst

I know accretable yield has been a fairly small number for you recently. Last quarter, it was only about $300,000. Did that remain small and immaterial this quarter?

Paul Egge, Executive Vice President and CFO

Yes, it's becoming more immaterial every quarter, which is really why we thought we might economize here in our first quarter of 2021. It's weaning off and becoming less impactful.

Brady Gailey, Analyst

Okay. Great. And then when you look at the buyback, it's great to see you all active in the quarter. It looks like you bought stock at around 1.35x tangible. If you look at it now, it's closer to 1.5 to 1.6x tangible, so it's not as cheap. Do you still have a good appetite for executing buybacks despite the stock price being a little higher?

Paul Egge, Executive Vice President and CFO

Price is one of many considerations that we evaluate for share repurchases, but more so than ever, our top use of excess capital is core loan growth. Secondary to that, we want to maintain flexibility for potential M&A activity. Of course, pricing dynamics will influence our volume-based appetite for share repurchases. So a lot of moving parts. We're not too intimidated by the current share price but are focused on executing the most accretive ways to utilize that capital.

Brady Gailey, Analyst

Okay. And then lastly for me, how does Allegiance fit into the M&A landscape? It's been a bit quieter in Texas than expected. We saw BancorpSouth and Cadence, which was a big deal nearby. How do you think Allegiance fits into M&A? Would you consider acquiring some smaller, downstream targets?

Steve Retzloff, CEO

It's good to see the larger transactions out there. Inside the pandemic, it has been more appropriate to do transactions that are suited to the current risk profile due to uncertainties. Coming out of this, though, I think it opens the door for smaller transactions. You have better currency. We are assertively looking at M&A activity and would consider deals across the board, particularly smaller or medium-sized acquisitions that can make a difference. We're working hard on the organic side but are also staying in touch with community bankers, as we know that community quite well through all of our contacts.

Operator, Operator

Our next question comes from Matt Olney with Stephens.

Matt Olney, Analyst

The PPP, I want to circle back on that. $22 million of unamortized net fee still as of March 31. I'm curious how that will be recognized over the next few quarters.

Paul Egge, Executive Vice President and CFO

As are we. Predicting the future is always challenging. We think the second round will go faster than the first, but we acknowledge there could be stragglers regarding how the forgiveness process plays out. Tentatively, we've modeled it to anticipate around 70% being forgiven by the end of the year. It could be higher, but we feel that's a reasonable estimate.

Matt Olney, Analyst

Okay. And then circling back on some commentary Steve made earlier, you mentioned a few times some larger loans. Can you clarify if these are traditional middle-market strategies or just larger loans on the small-business side? Any specifics you can provide?

Steve Retzloff, CEO

I would characterize these as larger on the small-business side than in the middle market. We just don’t have loan relationships that exceed $20 million, and very few exceed $10 million. Given our asset size and loan footings, it’s time that we take a closer look at this. There's a lot of opportunity there. We're focused on this approach to generate more loan growth.

Matt Olney, Analyst

Is this going to come from new producers and individuals, or is it more about looking at the existing team and existing customers that you're willing to grow larger with?

Steve Retzloff, CEO

Our existing team has capacity close to $800 million. A number of lenders are below our average norm, so we have ample opportunity within our lending staff to expand our portfolio. We're seeing growth at around 85% of our lending staff that are at or above our normal portfolio size. They continue to grow their portfolios. When we tell them not to focus on larger loan relationships, those customers often turn elsewhere because they continue to pursue projects. We’re just providing them the opportunity to engage with customers they can add loans for.

Operator, Operator

Our next question comes from John Rodis with Janney.

John Rodis, Analyst

Paul, I missed this, but regarding the PPP loans, you mentioned there's $22 million remaining. How much was recognized in the first quarter?

Paul Egge, Executive Vice President and CFO

We recognized fee income of approximately $6.9 million for net income during the first quarter. We have a slide on PPP that details this in the investor presentation, but yes, that's $6.9 million. Total revenue is a little higher if you include the interest.

Operator, Operator

And I'm currently showing no further questions. At this time, I'd like to turn the call back over to Steve Retzloff for closing remarks.

Steve Retzloff, CEO

Thank you, everyone. I appreciate your time and interest in the bank. We look forward to speaking with you again next quarter, and thank you very much.

Operator, Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.