Good day, and welcome to the Civista Bancshares first quarter 2023 earnings conference call. If you need assistance during today's call, please press star zero to reach a conference specialist. After today's presentation, there will be an opportunity to ask questions. To ask a question, please press star then one on your telephone keypad. To remove yourself from queue, please press star then two. Before we begin, I would like to remind you that this conference call may contain forward-looking statements with respect to the future performance and financial condition of Civista Bancshares Inc. that involve risks and uncertainties. Various factors could cause actual results to be materially different from any future results expressed or implied by such forward-looking statements. These factors are discussed in the company's SEC filings, which are available on the company's website. The company disclaims any obligation to update any forward-looking statements made during the call. Additionally, management may refer to non-GAAP measures, which are intended to supplement, but not substitute, the most directly comparable GAAP measures. The press release, also available on the company's website, contains the financial and other quantitative information to be discussed today, as well as a reconciliation of the GAAP to non-GAAP measures. This call will be recorded and made available on Civista Bancshares website at www.civb.com. At the conclusion of Mr. Schaffer's remarks, he and the Civista management team will take any questions you may have. Now I will turn the call over to Mr. Schaffer. Please go ahead. Good afternoon. This is Dennis Shaffer, President and CEO of Civista Bancshares, I would like to thank you for joining us for our 1st quarter 2023 earnings call. I am joined today by Rich Dutton, SVP of the company and Chief Operating Officer of the bank, Chuck Parcher, SVP of the company and Chief Lending Officer of the bank, and other members of our executive team. Given the recent events in the banking industry, I would like to start off my comments by discussing our deposits, liquidity, credit, and capital positions. First, we have seen very little unusual movement in our deposits. Our staff has been proactively engaging our customers and educating them on the strength of Civista and how we differ from the banks that recently failed. In addition, our employees have done a tremendous job in providing our customers options to maximize FDIC insurance coverage. If we exclude Civista's own deposit accounts and those related to our tax program, 14% or $397.4 million of our deposits were uninsured by the FDIC at March 31st. Our cash and unpledged securities were $434.8 million at quarter end, which more than covered our uninsured deposits at March 31st. Other than $156.7 million of public funds with various municipalities across our footprint, we had no concentration in deposits at March 31st. Excluding our tax deposits and our brokered CDs, total deposits declined by $55.8 million or 2.1% compared to December 31st, 2022. Civista is no different than the overall industry in that many of our retail and commercial customers received stimulus money during the pandemic, and as expected, customers are beginning to utilize these funds. I would point out that approximately $20 million of this movement out of retail and commercial checking and savings accounts was into higher yielding treasury funds in our own wealth management department. Mid-quarter, we became a little bit more aggressive with promotional rates on higher balance money market and CDs to retain more of these deposits on the bank's balance sheet. Attracting and retaining the operating accounts of our business customers continues to be a focus. At March 31st, 33% of our deposits were non-interest bearing demand accounts, of which 76.6% were commercial business accounts. We continue to believe our deposit franchise is one of Civista's most valuable characteristics and contributes significantly to our peer leading net interest margin and profitability. Second, we continue to monitor our liquidity position and have strong on-balance sheet liquidity and ready access to off-balance sheet funding. As I mentioned, at March 31st, we had cash and unpledged securities of $434.8 million and immediate access to nearly $1.3 billion in funding from the Federal Reserve, the Federal Home Loan Bank, and CDARS. While we have signed up for the Federal Reserve Bank's term funding program, we have not, nor do we anticipate utilizing this funding source, and it is not included in this $1.3 billion of off-balance sheet funding. Third, despite the uncertainties associated with the economy, our credit quality is strong. Our credit metrics remain stable compared to year-end, and we have not seen any systemic deterioration in our customers' financial conditions. We did make a $620,000 provision during the quarter that was solely attributable to growth in our loan and lease portfolio rather than economic stress. We did adopt CECL on July 1st, 2023. This resulting in a $4.3 million increase in our allowance for credit losses and a $3.4 million increase in the reserve for unfunded commitments. Consistent with generally accepted accounting principles, the entries related to our initial adoption were recorded as adjustments to our equity and did not impact earnings. As a result of the CECL adoption, our ratio of our allowance for loan losses to loans improved from 1.12% at December 31st, 2022 to 1.33% at March 31st, as did our allowance for loan losses to non-performing loans, which increased from 261.45% at December 31st, 2022 to 346.82% at March 31st. Lastly, we continue to create capital through earnings and our capital ratios continue to be strong. All of our regulatory capital ratios remain above what is considered well-capitalized. Now I would like to share some detail about our first quarter. This morning, we reported net income of $12.9 million or $0.82 per diluted share for the first quarter of 2023. During the quarter, net loans and leases grew by $35.4 million or at an annualized growth rate of 5.2%. This includes $16.2 million of equipment loans and leases originated and retained by our new leasing company, Vision Financial Group. You will recall Vision provides small equipment leasing and financing across the country. Our funding costs rose by 44 basis points during the quarter. However, we were able to maintain a 4.11% margin as asset yields very nearly kept pace. Our Comunibanc transaction is well on its way to be fully integrated, which allowed us to focus on the integration of our newest partner, Vision Financial Group, during the quarter. We were pleased with the overall gross production during the quarter, and we do anticipate their volume to increase as the first quarter is historically slower in the leasing industry. Our return on average assets was 1.47% for the quarter compared to 1.41% for the linked quarter, and our return on average equity was 15.32% for the quarter compared to 16.09% for the linked quarter. Now I will share some detail on our performance for the quarter. Net interest income was consistent with our linked quarter and $9.7 million or 42.2% greater than our first quarter of the prior year. The increase over the prior year was the result of strong organic loan growth throughout 2022, which continued during the quarter. Our organic growth, coupled with the acquisitions of Comunibanc Corp. and Vision Financial in the second half of 2022, was magnified by the rising interest rate environment. This increase over the first quarter of 2022 was particularly impressive given that there were $1.2 million of PPP fees amortized into interest income in the prior year. Our net interest margin remained strong at 4.11% for the quarter compared to 4.14% for the linked quarter and reflects significant expansion over the first quarter of 2022. Our yield on earning assets increased by 41 basis points compared to the linked quarter and increased by 159 basis points compared to the first quarter of 2022 as new loans are being originated at higher rates and loans already on our books continue to reprice. Our loan beta has been consistent through the cycle at 30 basis points over the last 12 months and for the quarter. Our funding costs for the quarter were 1.44%, which represents an increase of 44 basis points over our linked quarter. In comparison to the first quarter of 2022, our funding cost increased by 89 basis points. Our deposit beta accelerated during the quarter as we became more aggressive with larger balance deposits, as I mentioned earlier. Our deposit beta, excluding brokered CDs, was 8 basis points over the last 12 months and increased to 38 basis points for the quarter. We will continue to monitor deposit flows and react accordingly, but we do not anticipate a similar jump in our deposit beta going forward. Service charge revenue declined by $297,000 or 14.3% compared to our linked quarter and showed an increase of $194,000 or 12.3% over our first quarter of last year. The decline in service charges for the linked quarter is due to the timing of when post-tax season services are earned on our tax program deposit accounts. These fees are assessed annually and were $250,000 in the fourth quarter of 2022. Mortgage banking continues to be under pressure as interest rates increase. The inventory of homes available for purchase continues to be tight. First quarter gains on the sale of mortgage loans were $631,000, a decline of 49.6% from our linked quarter, which was $1.3 million, and a 32.6% decline from the prior year gain, which was $936,000. Interchange fees at $1.2 million were consistent with our linked quarter and were up $113,000 over the first quarter of the prior year as a result of additional debit card customers that came to us through our Comunibanc transaction. Lease revenue and residual fee income of $2 million was $264,000 or 11.4% less than the linked quarter, which was our first quarter offering small equipment leasing through Vision Financial. Leasing traditionally picks up throughout the year and peaks in the fourth quarter as leasing customers look to take advantage of accelerated depreciation tax rules. Other non-interest income increased by $852,000 over our linked quarter at $1.5 million over the first quarter of 2022. The increase over both periods was a result of our newly negotiated debit brand agreement with Mastercard that became effective during the quarter. In addition to higher per transaction revenue, we received a $1.5 million signing bonus that was included in our other non-interest income during the quarter. Non-interest expense increased $7.4 million year-over-year, which was primarily attributable to annual compensation increases that go into effect each year in April and the addition of Comunibanc and Vision Financial, which closed in the third and fourth quarters of 2022. Non-interest expense increased $332,000 or 1.2% compared to the linked quarter as we saw increases in compensation expense and taxes and assessments that were nearly offset by declines in net occupancy, contracted data processing, and professional fees. Compensation expense increased $698,000 and accounted for the largest portion of the linked quarter increase in non-interest expense. Payroll taxes and 401K contributions are typically higher in the first quarter and increased $511,000 from the linked quarter. Health insurance also increased over the linked quarter by $708,000 as we trued up accruals during the fourth quarter of 2022 and resumed our normal accrual levels in the first quarter of this year. Taxes and assessments increased by $418,000 compared to our linked quarter resulting from our higher assessment bases. These increases were largely offset by a decline in net occupancy and equipment expense as we charged off $255,000 of obsolete equipment in the previous quarter and a one-time $474,000 charge in the fourth quarter of 2022 for contracted data processing related to the October system conversion of Comunibanc. Although professional fees declined compared to our linked quarter, our current quarter includes a $400,000 consulting fee paid for assistance with our new Mastercard debit brand agreement. Our efficiency ratio was 62.4% compared to 63.2% for the linked quarter and 65.2% for the first quarter of 2022. Turning our focus to the balance sheet. As I mentioned, total loans grew by $33.4 million during the quarter, or at an annualized rate of 5.2%. While non-owner occupied CRE loans led the way, we had solid demand in nearly every loan type across our footprint. Included in our loan growth were $16.2 million in loan and leases originations at an average rate of 8.75% during the quarter. We did sell $11.3 million of our lease originations to manage our balance sheet. Along with strong first quarter loan production, our undrawn construction line ended the quarter at $181.6 million, giving us further confidence that we will grow our loan portfolio at a mid-single digit rate for 2023. As I stated earlier, mortgage loan production is down. We remain optimistic. Our pipeline is solid, and we are seeing quite a few pre-approvals. Unfortunately, housing inventory remains tight across our footprint, and many houses are still being sold to cash buyers. On the funding side, total deposits increased $223.5 million or 8.5% since the beginning of the year. Increases in balances related to our income tax processing program were $82 million, and our brokered deposits increased $202.5 million. These increases were partially offset by declines in personal and business checking and saving deposits that I discussed earlier. The volume of activity in our tax program is consistent with prior years. However, with higher interest rates, the funds are not remaining on our balance sheet for as long as they have in recent years. The average balances in our tax program accounts were $156.5 million this quarter compared to $180.8 million during the first quarter of 2022. As I mentioned in late March, we filled an order for $141.5 million of 5.2% 9-month and $151 million of 5% 12-month brokered CDs to replace $92 million of maturing brokered CDs and preserve our overnight borrowing capacity at the Federal Home Loan Bank, a move that we thought prudent given the uncertainty created by recent events. The higher interest rate environment continues to put pressure on bond portfolios. At March 31st, all of our securities were classified as available for sale and had $56.1 million of unrealized losses associated with them. This represented a reduction in unrealized losses of $10.2 million since December 31st, 2022. As a result, we ended the quarter with our Tier 1 leverage ratio at 8.63%, which is deemed well capitalized for regulatory purposes. Our tangible common equity ratio was 6.14% at March 31, 2023, compared to 5.83% at December 31, 2022. Our solid earnings were partially offset by our adoption of CECL and its $6.1 million impact on our capital during the quarter. Civista continues to create capital from earnings, our overall goal remains to have adequate capital to support organic growth and potential acquisitions. Two important parts of our capital management strategy continue to be the payment of dividends and share repurchases. We continued our $0.14 per share dividend during the quarter. Given our recent acquisitions and current market turmoil, we did not repurchase any shares during the quarter. We do continue to believe our stock is a tremendous value. In summary, we are pleased with another quarter of strong earnings, solid loan growth and steady credit quality. The first quarter presented economic challenges for all of us. Increasing short-term rates in the inverted yield curve put pressure on both deposit and loan rates. The failure of 2 banks fueled concern with the industry's balance sheet liquidity. As some banks pull back, Civista will take advantage of this opportunity to pick up new lending and deposit customers and strengthen relationships with our existing customers. Thank you for your attention this afternoon. Now we will be happy to address any questions you may have. Thank you. If you'd like to ask a question, please press star then 1 on your touchtone phone. If you're using a speakerphone, we ask that you please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. Today's first question comes from Terry McEvoy with Stephens. Please go ahead. Good afternoon, guys. How are you? Good. How are you, Terry? Maybe start with all the focus on deposits, could you just discuss when the tax refund deposits will leave the balance sheet? I think you mentioned it was kind of moving off at an accelerated pace this year, but just want to make sure I accurately capture your expectations there. Yeah, Terry, this is Rich. And I think similar to prior years, while maybe the balances are a little lower, I mean, it's a quarter one and quarter two phenomenon for the most part. I mean, in December of last year, we still had $70 million in tax deposits in the bank. They don't all go out. They're just not hanging around. The hot money, if you will, has not been hanging around as long as it has in prior years. I hope that helps. That's as good a crystal ball as I have. Okay. Thanks, Rich. The vision, the VFG, is that a good run rate for revenue? The equipment depreciation was a $2 million increase. Maybe is that a good run rate as well, or will that be volatile and kind of up and down as the year progresses? I would think that the depreciation of it would be a pretty good run rate. Again, it has to do with how many operating leases we originate and keep, but it'll grow slowly, over the course of the year. What was the first one? The revenue run rate will be a little bit higher. Their volume should pick up, you know, as the year increases. I think that run rate will be higher. Particularly the fourth quarter is usually a strong quarter in the leasing industry. Maybe one last one real quickly. Over half the loan portfolio CRE, it's a concern among bank investors. Could you just discuss your portfolio and how you would push back on any concerns that are out there with CRE in your markets? Well, this is Paul Stark. You know, we have quite a bit of real estate, but it's pretty diversified by type and across our market. Overall, I think the biggest areas that the people point to are the office space and construction. We've done a deep dive on our portfolio, feel pretty good about where we're at. Haven't seen any systemic deterioration. Really haven't seen any concerns come up at any event. You know, clearly there's a little more stress because of increased input costs and the interest, you know, reserves, but they're all strong. They all should get finished, you know, without any troubles. Yeah, Terry, this is Chuck. I mean, our metrics around our commercial real estate, I don't think have ever been stronger. You know, you read a lot of stuff in the national news about the problems of commercial real estate. I'll tell you in the Midwest, especially in the three Cs, we're not seeing really any deterioration in any of our portfolio. 3 Cs are? Cleveland, Columbus, and Cincinnati. Terry, I would just add that there, you know, there's really no concentration. That book is very well diversified. For instance, you know, our office portfolio is a little over 4%. 5.95. 5.9%. You know, the type of office that we're doing isn't downtown high-rise office stuff. We feel good about that. On the retail, we have no big box retailers, we feel good about that as well. We think that book is really well diversified, with no concentrations. You know, we do, we do extensive monitoring of that, and actually get accolades from our regulatory, you know, agencies, you know, about how we monitor and the portfolio monitoring that goes on. Perfect. I appreciate all the color. Thanks, guys, and have a good weekend. Thanks, Tony. Thank you. Our next question today comes from Tim Switzer at KBW. Please go ahead. Hey, good morning. I'm on for Mike Perito. Thanks for taking my questions. Sure, Tim. First off, can you give us what the purchase accounting impact was to NII, and if that's a good run rate going forward for the rest of the year? I think it was six basis points. I'm flipping while I'm talking. Okay. Yeah, that would be a good run rate wherever it was. Okay. On the talk about deposit rates, you think the beta is going to not increase by as much as it did this quarter. Can you help us think about the NIM trajectory over the rest of the year, maybe the magnitude of compression or if it can stabilize? What are your expectations there? Well, this is Rich, Tim. This is the first quarter that it has contracted in this cycle for us. And again, we got, like Dennis said, kind of aggressive kind of mid-quarter on the deposit rates. We anticipate another 25 basis point move in the next week or week after next. Yep. And we're 90% loan to deposit. I mean, a lot of it's got to do with how fast the loan portfolio grows. If you're asking us what we think, it's probably a little bit of contraction, basis points, but not a ton. And we got aggressive, you know, basically because of the bank failures. We just felt, hey, you know, the banks have failed deposits. We need to do everything we can to keep deposits. We did get a little bit more aggressive, you know, during that time frame. We think we're, you know, if we don't get a ton of these rating, we think the next rate increase actually benefits us a little bit because we don't think we have to do much on the deposit side. Plus, we think we can push spreads on the lending side a little bit. That'll help our net interest margin. We generally in the past, you know, big banks tend to pull back in times of crisis, we view that as opportunity for us. You know, some banks are going to pull back because, you know, the inverted yield curve and short-term borrowings. If people are borrowing, you know, those rates are high. They may feel they can't make enough spread. I think that gives us opportunity to push some of our loan spreads a little bit, which may help us as well. Okay. Yeah, that's helpful. You made the comment that you still believe your stock is tremendous value. You didn't repurchase any shares this quarter. Was a lot of that because of the activity we saw in March being a little bit cautious and are you able to give us any kind of, like, parameters of expectations going forward? Absolutely. I think, you know, the events in March, we're coming off two acquisitions in two quarters in a row. We used some capital there. You know, we just felt, you know, right now it's time to, you know, kind of let things settle down a little bit, and we'll just continue to evaluate. We didn't know how well too that would be received in the marketplace, given the recent events in March, and the concerns around, you know, liquidity and capital. Yeah, I think that was probably pretty reasonable to think. My last question, you know, last quarter you guys seemed a little open to it, any more plans or willingness to purchase possibly either your other leasing businesses or other fee businesses or bank M&A overall? Yeah, I think, I think we remain, you know, interested in that. You know, that's obviously we think we'd like to get a little bit more size because we get more efficient as a company. You know, given where bank values and things are today, I think that makes it a lot more difficult. You know, we'll continue. Doesn't mean we stop, you know, talking to potential partners and things like that. We certainly, that's still part of our strategy is bank acquisitions. I think, you know, with a lot of the fees under pressure right now, overdrafts and other fees under pressure, we are certainly open to exploring additional leasing or other, you know, fee-based businesses. Okay, great. Thank you. That's all for me. Thanks, Tim. Thank you. Our next question today comes from Manuel Navas with D.A. Davidson. Please go ahead. Hey, good afternoon. Good afternoon. I just wanted to catch up on a couple things that you touched on. You have a good amount of construction that's still gonna be drawn down. Do you have an idea of the timing of those drawdowns? Also kind of what are those yields gonna be? I would tell you, I don't have that chart right in front of me, Manuel, but I would say that it's, the bulk of it'll draw down in this calendar year. I mean, a couple of projects will spill over obviously in the next year, especially some of the new stuff that we've just approved in the last, you know, in the last quarter. I would tell you the rates. Probably in line, with where we've been, I'd say in that mid-six range on the stuff that's already been approved and to draw down, maybe a touch higher on some of the floating rate construction stuff. I think all in, when it's all done, I'd say in the mid-sixes on that. Maybe, well, we didn't originate that over the course of the year, eventually go to the perm market, because, you know, we do a lot of construction mini perm type stuff. A lot of that, you know, rolls off to a non-recourse lender as well. It's not like all that will hit our balance sheet, it's all been, you know, put on over the course of, you know, last year and will be through this year and stuff. You know, it does help our balances until that eventually goes to the perm market. Right. Right. It's a little bit of a downside to not have like a downside protection to. Right. To the loan growth guide. Is that that's kind of how I'm thinking about it. Is that wrong or? No, I think that, I think that's correct. I think as a company, I think like everybody else, we're not seeing the same acceleration of large payoffs from, you know, people selling product just because, you know, the rates are up a little bit. We're not seeing as much changeover. I looked at that just before we came in, and, you know, our large payoffs were $10 million less this first quarter than they were the first quarter of last year. We're seeing a little stickiness of that. I would tell you, the large projects that do go to the perm market and for the people to get off the guarantees, they're still gonna go, and they're still planning on going. You were able to, send some funds to, like, sweep accounts. It is in the deposit side. I think those are like wealth management sweep accounts. Was it roughly around $20 million? That is correct. What do you have in those? How much do you have of those? Manuel, those are not sweep accounts, right? That's money that actually left the bank and went into our wealth management department. Right. Right. Right. Those were just potential depositors seeking higher yields, and they basically were buying one year or Treasuries is basically what they were buying. That was an option for them. When we didn't want to pay a higher rate, we, you know, rather than that money just leave the bank, we refer them to our wealth department, and they basically have a, you know, they're going to buy like 1 year Treasuries for them at a little bit higher yield. We thought that was, you know. We feel that, you know, now, you know, when those come due, we're going to have a better opportunity to, you know, get those back into the bank. Thank you for clarifying. That makes it make perfect sense. In terms of, so you talked about a little bit of NIM pressure this coming quarter. If we just get one more hike and then we kind of pause, where does the NIM kind of go across the rest of the year during the pause? I think it'd be pretty stable. Yeah. It really just depends on how fast our loan portfolio grows and how we have to fund it. I mean, Our lenders are great at bringing deposits along with those loans. Again, we've kind of had a history of not doing transactions, but we do relationships. We expect when we make a loan to get the deposits that go with it. You know, in the 90s for our loan to deposit ratio, certainly funding, and how much we have to fund and how inverted the yield curve stays, that'll put pressure on the margin for sure. Thank you. I'll step back into the queue. Thank you. Ladies and gentlemen, as a brief reminder, if you'd like to ask a question, please press Star then one. Today's next question comes from Ben Gerlinger with Hovde Group. Please go ahead. Hey, good afternoon, guys. Hi, Ben. Good afternoon. I just want to follow up on a question Terry asked, kind of asked just a different way. With the leasing and broadly fee income, I get that the fourth quarter is kind of the high watermark and the first quarter is the low. It's probably ramped throughout the year. Like we've seen a fourth quarter of, let's call it $10 million for total fees, and then the first quarter is like, let's call it $9.5 million to exclude the one time. Is it fair to assume somewhere around $40 million, or do you think that the ramp is bigger now that it's integrated and you have potentially more clients to work with? You mean $40 million a quarter of product? No, sorry. $10 million a quarter. For the full year. No, no. Okay, got you. No, that's, yeah, that's probably close. Yeah, I mean, I think you'll see a slight pickup in mortgages. I think you'll see a slight pickup in the, in the leasing gain on sale. I think a little bit of the leasing gain on sale is a little bit probably less than normal, Ben, just because, you know, a lot of the stuff that was originated in the fourth quarter that got sold in the first quarter, rates moved a little bit against us, so you're not quite getting as much gain on sale as you would normally get. I anticipate we're doing a lot of management around that. I anticipate that getting a little bit stronger. You know, like I said, the mortgage income, I would say, you know, even though inventories are pretty slim across most of our marketplaces, you know, it, you know, spring is the selling season, and we expect to have a few more first mortgages on that piece. The rest of it, I think is. Pretty much in line. Remember, we have the tax program money in there, too, so we'll have to put a pencil to that, probably get back to you with everybody with a better number, I think. We, you know, we'll get a little bit of the tax money in yet there in the second quarter, but we do have that also in the equation. I think, again, historically, what you've seen is not different than what you'll see going forward, you know, with the exception of maybe the mortgage piece. We'd be kidding you if we told you we were all leasing experts yet. We're still new at it, and we're still kind of trying to get our arms around that part of it. I guess it's going to grow. It's just a matter of how fast it grows and how much of it we sell. Got you. Yeah, no, that's good. That's helpful color. I get that, seeing a full year and the cadence within that is definitely we're all kind of learning as we go here. When you think about the expenses associated with that, do you think it's a parallel, like, on salaries, or is it kind of already accrued throughout the year? They're almost I mean, the big salary people are almost all commissions. That's kind of nice in that when they do well, we do well. Got you. Okay. It's kind of comp the same as mortgage. Okay. It will be interesting to see, too, Ben, just on the swap piece, too. We've had a little bit more interest in swaps, you know, over the last probably six weeks or so. It'll be interesting to see if that continues going forward or not. Obviously, it will kind of push that longer-term rate lock piece to the swap side. A few people have taken advantage of that right now as compared to wanting to be shorter on the interest rate cycle. Got you. Lastly, what would be a good tax rate for full year? It's moved around a little bit year-over-year. For the quarter, we were 16.4%. 16.4. I would say, yes, 16.5 is probably a good number. We've got a fair amount of tax preference revenue, and we try to manage that down. That would be fair. Got you. Appreciate the color. Have a great weekend, guys. Thanks, Ben. Thank you. Our next question today comes from Dan Cardenas with Janney Montgomery Scott. Hey, good afternoon, guys. Dan. I guess just as I look at operating expenses for you guys here, is the first quarter number kind of a good run rate to build off of, or is there some room maybe to reel those numbers in a little bit? Well, I think like Dennis said during the call, we have a $400,000 fee for a consultant that helped us with the Mastercard program. The payroll tax and the 401 contributions are always big in the first quarter, too. Some of that gets balanced out with the raises that we go into effect on April first or the first part of April. I think going forward, if you guys penciled in about $27 million a quarter for the next three quarters, that would be pretty close to what our budget says it ought to be. Okay. All right. That's helpful. Thank you. Then, how should I think about deposit balances as you approach the end of the year? Do you think you can kind of sustain them? If you do, is that going to be through broker deposit growth, or how are you looking more at organic deposit growth? I guess a couple questions there. Yeah, I think we can sustain deposits. You know, we've gotten a little bit more aggressive. Again, I do think this is going to be opportunity for us. We're going to demand a little bit more. We, we always have been pretty good at gathering deposits when we do, you know, when we're doing a loan. We're going to go back to a lot of those borrowers, existing borrowers, whether they have a new loan request or not, we're going to say, look, you know, we're hearing that certain banks are pulling back in their lending efforts and things like that. We're still in the game, to be in the game, we need deposits, we're going to ask them to move more deposits to us. You know, we're only going to play off the relationships that we have to try to drive, you know, drive a little bit more business there. You know, we think definitely we can sustain. We know deposits are at a, you know, kind of at a premium now, you know, we're going to really work those relationships. All right. competitive factors, I mean, is, I imagine it's pretty intense on the deposit side right now. Is it more the smaller banks in your market, the bigger banks? everybody? I mean, can you- Yeah, it's really everybody. You know, we see, you know, the Huntington of the world offering certain specials. Everybody kind of has a little bit different strategy. We've tried to stay short with our strategy, and I think, you know, we will continue to do that. It is very competitive and, you know, but we're going to need that because we want to continue to grow on the lending side. You know, we're really going to push some of those relationships, try to attract at least some of that cheaper money that, you know, not so much the hot money. Okay, good. I'll step back for right now. Thanks, guys. Our next question today is a follow-up from Manuel Navas. Please go ahead. Hey, I just wanted to check in on the loan loss reserve moved up because of the CECL. Addition, you're at 133. What should we expect kind of going forward on the provision side? It stepped up a little bit in fourth quarter last year. Is that kind of the right level or kind of the lower level you had before that? I think this falls, Stark. I think, you know, we're kind of new to the CECL methodology. So I have pretty... You know, if you look at the risk profile, risk profile continues to be strong. You know, we don't see that changing. The machinations of the model might... We'll have to, you know, even it out after the first quarter's experience. I really don't expect it to be any higher than probably where we were at the end of the year. I mean, I don't know that we've provided for any losses for. No. a number of quarters. I mean, it's all been growth. Right. It's all been growth. You know, we at one point had, like, 8 straight quarters of recoveries. Even the small loss we took this quarter was really related to an acquisition as opposed to, you know, any type of normalized deterioration. We expect that profile to continue to be strong. Yeah. you know, that provision is probably going to stay pretty close to where around the number it is today. That's perfect. That's very helpful. Thank you, guys. Thank you. Thank you. Ladies and gentlemen, this concludes our question and answer session. I'd like to turn the conference back over to Mr. Shaffer for closing remarks. Thank you. In closing, I do want to thank everyone for joining and those that participated on today's call. Again, we are pleased with our first quarter results. Our strong core deposit franchise, our proven disciplined approach to pricing deposits, our solid credit history, I think all positions us very well for future success. I look forward to talking to all of you again here in a few months to share our second quarter results. Thank you for your time today. Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.