Transcript of the Bank of Canada Q4 2018 Earnings Conference Call (CBFP)

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<p type = "text" content = "Preferred Bank (NASDAQ: PFBC)
Q4 2018 Results Conference Call
January 18, 2019, 2:00 p.m.. AND"data-reactid =" 23 ">Preferred Bank (NASDAQ: PFBC)
Q4 2018 Results Conference Call
January 18, 2019, 2:00 p.m.. AND

Hello and welcome to the Preferred Bank Q4 2018 teleconference. All participants will be listening only. (Operator Instructions) After the presentation today, you will have the opportunity to ask questions. (Operator Instructions) Please note that this event is being recorded.

At this point, I would like to give the conference to Tony Rossi of Financial Profiles. Please go ahead, sir.

Thank you Denise. Hello everyone, and thank you for joining us in discussing Preferred Bank's financial results for the fourth quarter ended December 31, 2018.

From the management, I am accompanied by Li Yu, Chairman of the Board; President and Chief Operating Officer, Wellington Chen; Chief Financial Officer, Edward Czajka; and Nick Pi, General Manager of Credit.

Management will provide a brief summary of the results and we will answer your questions.

During the call, management made statements that may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon specific assumptions that may or may not be accurate. . Forward-looking statements are also subject to known and unknown risks, uncertainties and other factors related to Preferred Bank's business and business environment, all of which are difficult to predict and many of which are beyond the control of Preferred Bank. . For a detailed description of these risks and uncertainties, please refer to the documents required by the SEC that the Bank files with the Federal Deposit Insurance Corporation or the FDIC. If any of these uncertainties materialize or if any of these assumptions prove incorrect, Preferred Bank's results could differ materially from its expectations, as reflected in these assumptions. states. Preferred Bank assumes no obligation to update these forward-looking statements.

At this point, I would like to give the call to Mr. Li Yu. Please go ahead.

Thank you. Hello. For the fourth quarter, Preferred Bank posted net earnings of $ 18.7 million, or $ 1.22 per share. Our total profit for the year was $ 4.64 per share. These two figures compare very favorably with previous years. And on a pre-tax basis, our net earnings – pre-tax net income was 43% higher than the year before.

Fourth-quarter earnings were affected by a relatively large and unusual provision for loan losses of $ 5.55 million. The reason is that we decided to take over the multifamily loan properties in New York as part of the bankruptcy process and then become an OREO. The valuation report returning to a much lower value than the previous valuation. As a result, we made a relatively large write-down on the loan. The valuation report had two different values: one of them was a condominium, which is higher; one of them is like an apartment, which is lower. We took the lowest valuation and made the write-down. Excluding these loans, our total loan portfolio, classified assets, was less than $ 8 million, a very small amount.

During the quarter, our loan growth was only $ 58 million, or 1.77%, which is lower than our previous quarters. And during the quarter, we had very, many profitable businesses, which doubled the amount of previous quarters. Thus, even with a very dynamic creation, the loan increased by only 58 million dollars.

For the quarter, deposits increased more comfortably, to $ 121 million or 3.44% on the linked basis. The bank now has more than $ 600 million in cash, which should provide great flexibility for future growth.

During the quarter, the net interest margin improved, the efficiency ratio and the return on assets improved. At the end of the year, in the fourth quarter, the entire team, our clients and many friends in the sector were all concerned with the melting of the stock markets, the various economic forecasts, the shape of the curve of the tensions, etc. ., because we built a profitable business with a reasonable net interest margin, a good efficiency ratio and a very asset-sensitive loan portfolio. And if the economy is not strong in 2018, if the trade tensions are easing, if our government does not close for a period X, an extended period and if the yield curve is somewhat rational and reasonable, we are ready to take all the advantage and the opportunity that will be given to us.

Thank you so much. I am ready for your questions.

Questions and answers:

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Operator"data-reactid =" 51 ">Operator

Thank you sir. We will now begin the question and answer session. (Operator Instructions) And your first questions will be asked by Aaron Deer of Sandler O'Neill. Please go ahead.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Aaron DeerSandler O Neill – Analyst"data-reactid =" 53 ">Aaron DeerSandler O Neill – Analyst

Hello, Mr. Yu; and hello to all.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Li YuPresident and CEO"data-reactid =" 55 ">Li YuPresident and CEO

Hi.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Aaron DeerSandler O Neill – Analyst"data-reactid =" 57 ">Aaron DeerSandler O Neill – Analyst

I guess I would like to start with New York credits. Maybe if you could, give us a little more color on how the credits were transpired, and since their creation, in particular, you can perhaps speak of your confidence in the validity of the initial assessments. . And then, a little bit of what happened on the market or maybe with the properties themselves that caused an erosion of the values, so that the initial ratio of 65% of the loan-to-value ratio of these was absorbed?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Li YuPresident and CEO"data-reactid =" 59 ">Li YuPresident and CEO

We have no way to comment on the initial validity of the assessment. And as of today, we have not found many gaps in the assumptions they used at that time, and even then, there will be water under the bridge because the valuation lasts several times, and the value has been in the reasonable trend until foreclosure and up to repossession by the bankruptcy property. Up to the fourth quarter, New York reported 5.8%, Manhattan announced a 5.8% decline in real estate, OK, this was well documented in all the newspapers, OK.

So, and also the trend is that those of us who are in business on these and when the bank starts to take control of the property, the assessment suddenly becomes very cautious on the part of l & # 39; evaluator. So we have two valuations: we have a condominium valuation, $ 44 million; we then have an evaluation of the apartments, $ 40.6 million. We decided to take the assessment of the apartment and to lower it by 9% to keep the loan book, which will be transferred to OREO. In fact, it will be today and tomorrow it will be transferred to OREO as a whole. Now, if history guides us at all and hopes that this time is no exception, we have always been able to yield our OREO with a profit.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Aaron DeerSandler O Neill – Analyst"data-reactid =" 62 ">Aaron DeerSandler O Neill – Analyst

D & # 39; agreement. It's great. And I appreciate that extra color. In terms of time – I know that when we discussed in December, there – there were buyers interested in at least one of these properties. Can you give us an update on the trends there?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Tony RossiInvestor Relations"data-reactid =" 64 ">Tony RossiInvestor Relations

Well, of course, the agreement was not successful, but the agreement is still in progress, OK. The buyer – believe it or not, every time the bank wants to sell something, the buyer must be very very careful and careful, OK. So, I mean that – we are still – obviously, we are always optimistic because they are very desirable goods. And once stabilized, based on what we have information on mortgages, even the valuation, once stabilized, still produces reasonable net net interest – a net operating profit. This is not what is called the rundown type of property, and so on. So, on the other end, we tend to be a bit difficult too. We just do not want to give the stock.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Aaron DeerSandler O Neill – Analyst"data-reactid =" 66 ">Aaron DeerSandler O Neill – Analyst

Sure. I understand. Secondly, in your opening statement you have somehow outlined some macroeconomic concerns, and if all goes well, you will try to take advantage of market opportunities. And in the press release, you also noted, I think, that you used the term extreme caution when looking at the year. Is it somehow – I suppose a bridge between these two ideas to be warned, but given the opportunities that you have, what is it? does it mean for you in terms of the type of growth that we could anticipate for 2019?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Tony RossiInvestor Relations"data-reactid =" 68 ">Tony RossiInvestor Relations

D & # 39; agreement. We understand, please, that the first thing to do is that we manage the money of others, mainly our depositors and our shareholders. So he is constantly, you know, I have three members of the management team sitting here. And as every week, in fact, they tell me that we have to be more careful, agree. And then you have a customer, you have shareholders coming in, said, well, the credit cycle is just around the corner, OK, now you have to be careful. But with all these market panics and even you know it with the recent economy, I mean, the forecast and what was a robust economy with a growth of three percentage points in 2018, OK, that drops to less than 2% in 2019 and so on. sure. And various people offer various forecasts. Even among the six companies that cover us, there are positive aspects, negative aspects in terms of the credit cycle.

Now, we can not afford to go wrong, OK. So all we can do is be extremely cautious. And I suppose that being extremely conscious has two meanings. One is to build you stronger. I hope we did it. We have good profitability, we have good capital, we have a good profit margin, we have good efficiency. We are ready to face the storm. If there is a storm, agree. So, this is not, obviously, we will move at full speed.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Aaron DeerSandler O Neill – Analyst"data-reactid =" 71 ">Aaron DeerSandler O Neill – Analyst

D & # 39; agreement. Good product. And then, just one for Ed, if I can. Ed, can you give me an idea of ​​the type of maturity you have in the CD buckets in the next quarters and the type of relationship between these rates and the current deposit rates and what that could mean for your margin,?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Edward CzajkaFinancial director"data-reactid =" 73 ">Edward CzajkaFinancial director

Well, the average weighted average remaining life of the CD portfolio is a little over six months, Aaron. So, you analyze that somehow. But what we've seen on the interest side, not just CDs, but the money market, is that we're seeing an upward trend, but what we're seeing is also important for: It's it should be noted that we are witnessing a slight stabilization of the overall deposit market rates.

Now, as far as our own CD portfolio is concerned, this will continue to increase because we will have maturing CDs as you report at lower rates and back to higher rates. But we also felt the full effect of the rate hike at the end of September. In the fourth quarter, we felt that even though the cost of deposits was increasing, the margin increased by 9 basis points, which took us a bit by surprise as well. We are very satisfied with that.

Now, we are going to have the full effect of the December rate hike in the first quarter of 2019. So with the stabilization of the market rates on deposits and with the improvement in loan yield and money yield, as Mr. Yu pointed out, we have 600 million dollars in cash, it moves us well. And so, I would expect the margin to remain unchanged where it currently stands in the first quarter.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Aaron DeerSandler O Neill – Analyst"data-reactid =" 77 ">Aaron DeerSandler O Neill – Analyst

D & # 39; agreement. It's great. Thank you for taking my questions. I appreciate it.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Operator"data-reactid =" 79 ">Operator

And the next question will be from Stephen Moss of B. Riley FBR. Please go ahead.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Stephen MossB. Riley FBR – Analyst"data-reactid =" 81 ">Stephen MossB. Riley FBR – Analyst

Hello. I guess if we continue to be more cautious or cautious in 2019, should we think of loan growth perhaps slowing down to reach, for example, the highest figure? Or do you still see that our loan portfolio is strong where it can be, double-digit?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Li YuPresident and CEO"data-reactid =" 83 ">Li YuPresident and CEO

Well, I think our creative effort is pretty much the same. We did not reduce our origin. In fact, we will continue to increase our loan production staff, OK. But I think what we do not know is the paid activities. As for the first quarter, the gain is so high. And if – let's say, if the yield curve becomes the reverse, OK, what I think is that your company predicts that the credit cycle is at the corner, agree, agree. If loan yields are going to reverse and if the credit crunch gets closer and we start to believe it, I think every one of us in our industry will slow down the creative effort. But for now, no one is doing it and neither are we.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Stephen MossB. Riley FBR – Analyst"data-reactid =" 85 ">Stephen MossB. Riley FBR – Analyst

I got you. D & # 39; agreement. And then, I guess my second question is about the OREO (ph) property here. Should we think that there will be a process of rehabilitation, maybe even that the rent will be stabilized before the real estate market or is it on the market?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Li YuPresident and CEO"data-reactid =" 87 ">Li YuPresident and CEO

I would like to think that this was produced by the bankruptcy court, OK, and show very well the property, OK. And most recently, what the trustee in bankruptcy told us is that there is no deferred maintenance of the situation. So, it's just – it's not rented. This is not fully praised, we must stabilize it. There may be some kind of very minor element of removal, cleaning items, OK. Nick, do you want to add more color to this?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Nick PiExecutive Vice President and Credit Manager"data-reactid =" 89 ">Nick PiExecutive Vice President and Credit Manager

Hi, Stephen. How are you? That's Nick talking. I was there during the period of judicial liquidation. And I went around both properties entirely. I have not noticed any kind of talk behind. And some of the units were definitely occupied and some of the units were vacant at that time and there was a doorman on both properties, but it's a very good benefit.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Stephen MossB. Riley FBR – Analyst"data-reactid =" 91 ">Stephen MossB. Riley FBR – Analyst

D & # 39; agreement. This is useful. And I guess one last question on the expense front. Are you wondering how we think the total future spending, they were very well controlled this quarter and if you have planned investments in 2019?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Edward CzajkaFinancial director"data-reactid =" 93 ">Edward CzajkaFinancial director

Hey, Steve. That's Ed. So we're very pleased that the fourth quarter control of spending is $ 13.7 million. I think I probably guided a little higher than that, because we had some unknowns, but some points to discuss. First, in 2019, we will move our headquarters to a larger space. Thus, our rental costs – occupancy costs will increase slightly, as will our equipment costs, as we are also investing in the new headquarters premises. Apart from that, on the expenditure side, we still have some IT initiatives, called second day initiatives from the system conversion that we did this year. These will take place in the first and second quarters.

As a result, we will see somewhat higher professional services expenditures, as we have seen in recent quarters. We are at $ 1.45 million in the fourth quarter, which is a bit high, because we still have problems and lawyers fees related to some of the things we talked about, including the New York loan. So that helped – in fact, non-interest expenses would have been a bit better. In the future, you know I would advise you about $ 14 million on a quarterly basis, maybe a little less.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Stephen MossB. Riley FBR – Analyst"data-reactid =" 96 ">Stephen MossB. Riley FBR – Analyst

D & # 39; agreement. Thank you so much.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Edward CzajkaFinancial director"data-reactid =" 98 ">Edward CzajkaFinancial director

Thank you.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Operator"data-reactid =" 100 ">Operator

And the next question will be from Tim Coffey from FIG Partners. Please go ahead.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Tim CoffeyFIG Partners – Analyst"data-reactid =" 102 ">Tim CoffeyFIG Partners – Analyst

Awesome. Thank you. Good morning everyone. In terms of loan performance during the quarter, how much of this increase from one quarter to the next comes from prepayment penalties or prepayment fees?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Li YuPresident and CEO"data-reactid =" 104 ">Li YuPresident and CEO

We have very little prepayment income. Basically, all our loans are variable rate loans, which does not include early redemption fees, OK. So I will say that it is, to the point, negligible.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Tim CoffeyFIG Partners – Analyst"data-reactid =" 106 ">Tim CoffeyFIG Partners – Analyst

D & # 39; agreement. This is a great choice for the millennial generation. Was the runoff, or runoff in the loan portfolio you saw, only related to rate hikes or was there, were your competitors more competitive during the quarter?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Li YuPresident and CEO"data-reactid =" 108 ">Li YuPresident and CEO

Both. I suppose the rate hike has – I do not know how to say it, maybe the rate hike has made the competition even more aggressive, but there are more people willing to take out lower rate loans than ever before , OKAY. Would you say, Wellington, it's …

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Wellington ChenPresident and Chief Operating Officer"data-reactid =" 110 ">Wellington ChenPresident and Chief Operating Officer

This is very correct. Some banks are still willing to give a loan at a very low fixed rate, that makes no sense.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Tim CoffeyFIG Partners – Analyst"data-reactid =" 112 ">Tim CoffeyFIG Partners – Analyst

And when we talk – just a little follow up on this. When we talk about the threat of increasing the number of prepayments in the first quarter, is that what you're talking about, that's the biggest concern in the competitive environment?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Li YuPresident and CEO"data-reactid =" 114 ">Li YuPresident and CEO

The competitive environment is the main situation, but we must also monitor the economy as well as the whole economy and all the activities that take place there. For example, how many people will develop the extension plan because of the trade tension in the country? So the loan application is certainly affected by that kind of thing. And also how many things that if the government were to close for another period, the TSA would be closed, no one would travel. I mean, I'm just extreme, OK, I mean, all of those things are going to affect the first quarter. If we started to put quarterly, we limited ourselves a little; if we establish it from year to year, we think that in the year, whatever the level chosen, the first quarter will be lower, or the first quarter higher will be moderate over a year. Quarter, it is very difficult to do and very difficult to say exactly how much we think it will be.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Tim CoffeyFIG Partners – Analyst"data-reactid =" 116 ">Tim CoffeyFIG Partners – Analyst

D & # 39; agreement. And since we're just on the subject of the government shutdown, is there any product from our government program used by Preferred Bank – a product currently unavailable due to the government shutdown that could potentially limit loan growth?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Li YuPresident and CEO"data-reactid =" 118 ">Li YuPresident and CEO

D & # 39; agreement. I'm just checking. Ed, do you –

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Edward CzajkaFinancial director"data-reactid =" 120 ">Edward CzajkaFinancial director

None that I know. We do not have SBA. So (several speakers) for the USDA.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Tim CoffeyFIG Partners – Analyst"data-reactid =" 122 ">Tim CoffeyFIG Partners – Analyst

D & # 39; agreement. I'm just checking. Then, when we look at the additional cost of bringing in $ 1 of deposits over the last two quarters, it was between 8 and 17 basis points. Is it a bit like that, or so far in – what have you seen up to now, or, as you've mentioned, is starting to mitigate a bit?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Li YuPresident and CEO"data-reactid =" 124 ">Li YuPresident and CEO

Ed, you want to answer that – I guess, you want to clarify the question.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Edward CzajkaFinancial director"data-reactid =" 126 ">Edward CzajkaFinancial director

Yes, that was what, Tim? I am sorry.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Tim CoffeyFIG Partners – Analyst"data-reactid =" 128 ">Tim CoffeyFIG Partners – Analyst

Sure. Yes. As we plan to add the next dollar in deposits, is the incremental cost of this amount higher than what we have seen in recent quarters indicate that the range of 8 to 17 basis points is going to ?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Edward CzajkaFinancial director"data-reactid =" 130 ">Edward CzajkaFinancial director

Yeah. I think – yes, the incremental cost is obviously up, but again, it really depends, Tim. We are currently in a situation where we are still trying to increase demand deposits and, of course, those at zero rates, obviously reduce costs. But certainly, on the CD side and the money market side, the cost of acquisition has increased considerably. But I think that if we turn to our own portfolio, the process will be rather slow. And then, I think, at some point, it will start to reverse.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Tim CoffeyFIG Partners – Analyst"data-reactid =" 132 ">Tim CoffeyFIG Partners – Analyst

D & # 39; agreement. Very well. These were all my questions. Thank you.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Li YuPresident and CEO"data-reactid =" 134 ">Li YuPresident and CEO

Thank you.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Operator"data-reactid =" 136 ">Operator

(Instructions for the Operator) The next question will be asked by Don Worthington of Raymond James. Please go ahead.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Don WorthingtonRaymond James – Analyst"data-reactid =" 138 ">Don WorthingtonRaymond James – Analyst

Thank you. Hello everyone.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Li YuPresident and CEO"data-reactid =" 140 ">Li YuPresident and CEO

Hi.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Don WorthingtonRaymond James – Analyst"data-reactid =" 142 ">Don WorthingtonRaymond James – Analyst

Back to New York properties. When you first disclosed the problem of the credit relationship, there were also some single-family properties. What is the status of these?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Li YuPresident and CEO"data-reactid =" 144 ">Li YuPresident and CEO

Thank you. Let me just try to explain, Nick will add, OK. The single-family property is in the Hamptons, OK. The most recent estimate is still around $ 5 million, we owed $ 3 million, OK. The other property is in Westchester County, OK. That was about – the assessment is a $ 4 million title, we owe us $ 2.6 million. Am I right, Nick?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Nick PiExecutive Vice President and Credit Manager"data-reactid =" 146 ">Nick PiExecutive Vice President and Credit Manager

The most recent evaluation for this one has been dropped a bit.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Li YuPresident and CEO"data-reactid =" 148 ">Li YuPresident and CEO

D & # 39; agreement. Go from the front.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Nick PiExecutive Vice President and Credit Manager"data-reactid =" 150 ">Nick PiExecutive Vice President and Credit Manager

So for two single family loans, because the borrower has not filed for bankruptcy, so we can not take it back through the bankruptcy procedure. Currently, it is under a state level, just a normal lock process. So we have $ 2.6 million on one of the loans, which will be auctioned in April. And the other should be auctioned in June, if there is no delay.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Li YuPresident and CEO"data-reactid =" 152 ">Li YuPresident and CEO

D & # 39; agreement. So, I mean, when you say that the valuation value would go down a bit, what is the most recent?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Nick PiExecutive Vice President and Credit Manager"data-reactid =" 154 ">Nick PiExecutive Vice President and Credit Manager

The most recent is the $ 3.2 million for this property. Our loan is only $ 2.6 million. So, there is still no loss at all. And we have a solid online buyer for over $ 3 million.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Don WorthingtonRaymond James – Analyst"data-reactid =" 156 ">Don WorthingtonRaymond James – Analyst

D & # 39; agreement. Awesome. Thanks for the update. And then, did you receive a special dividend from the FHLB this quarter?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Edward CzajkaFinancial director"data-reactid =" 158 ">Edward CzajkaFinancial director

Yes.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Don WorthingtonRaymond James – Analyst"data-reactid =" 160 ">Don WorthingtonRaymond James – Analyst

How was it and then where did you report it?

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It was $ 193,000 and is included in investment income.

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D & # 39; agreement. So that helped a little margin this quarter?

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Yes, but these returns, these actions of the FHLB, I should not even say on the call, were very quiet (ph).

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Don WorthingtonRaymond James – Analyst"data-reactid =" 168 ">Don WorthingtonRaymond James – Analyst

Yeah yeah. D & # 39; agreement. And then, with respect to the $ 6.5 million net expense, was that entirely related to New York properties or was there anything else?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Li YuPresident and CEO"data-reactid =" 170 ">Li YuPresident and CEO

In fact, it's very comping (ph). The New York property represents the essence of this. They are the king of all the old loans accumulated on properties – on the loan being resolved, OK. That's about $ 1 million or so, right?

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Yes, $ 950,000. Yes, about $ 1 million.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Li YuPresident and CEO"data-reactid =" 174 ">Li YuPresident and CEO

About $ 1 million or so, agree. They also complicate the situation, because when you have an imputation, the accounting rules require you to calculate the historical reserve and modify it according to the calculation method used. So the reserve number also changes, additions or subtractions on different things. So I would say that overall, most things are related to the New York phenomenon.

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D & # 39; agreement. Awesome. Well, congratulations on the sale of this $ 4.1 million property that has been around for a long time.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Edward CzajkaFinancial director"data-reactid =" 178 ">Edward CzajkaDirecteur financier

Oui, cela semble se perdre dans la conversation.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Don WorthingtonRaymond James – analyste"data-reactid =" 180 ">Don WorthingtonRaymond James – analyste

Ouais. D&#39;accord. Thank you.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Opérateur"data-reactid =" 182 ">Opérateur

Et mesdames et messieurs, ceci clôturera notre séance de questions-réponses. Je voudrais rendre la conférence à M. Yu pour ses dernières remarques.

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Merci beaucoup pour votre attention – comme je l&#39;ai dit, nous aborderons avec extrême – eh bien, je ne devrais pas dire prudence, prudence extrême, OK, cela avec notre nouvelle économie en 2019 et tout le reste. Mais encore une fois, nous espérons que tout n’est pas aussi grave que la dernière crise boursière qui a suscité toute la conversation. Thank you so much. Thank you.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Opérateur"data-reactid =" 186 ">Opérateur

Merci, monsieur Yu. Mesdames et Messieurs, la conférence est terminée. Merci d&#39;avoir assisté à la présentation d&#39;aujourd&#39;hui. À ce stade, vous pouvez déconnecter vos lignes.

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Appelez les participants:

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Plus d&#39;analyse de PFBC

Transcription propulsé par AlphaStreet

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