Good day everyone and welcome to the Northeast Bank Fiscal Year twenty twenty Fourth Quarter Earnings Results Conference Call. This call is being recorded. With us today from the bank is Rick Wayne, President and Chief Executive Officer J. P. Lapointe, Chief Financial Officer and Pat Dignan, Executive Vice President and Chief Credit Officer.
Last night, an investor presentation was uploaded to the bank's website, which we will reference in this morning's call. The presentation can be accessed at the Investor Relations section of northeastbank.com under Events and Presentations. You may find it helpful to download this investor presentation and follow along during the call. Also, this call will be available for rebroadcast on the website for future use. The question and answer session for this call will be conducted electronically following the presentation.
Please note that this presentation contains forward looking statements about Northeast Bank. Forward looking statements are based upon the current expectations of Northeast Bank's management and are subject to risks and uncertainties. Actual results may differ materially from those discussed in these forward looking statements. Northeast Bank does not undertake any obligations to update any forward looking statements. At this time, I would like to turn the call over to Rick Wayne.
Please go ahead, sir.
Thank you very much. Good morning, and thank you all for joining us today. I am Rick Wayne, the chief executive officer of Northeast Bank. And with me on the call are JP Lapointe, our chief financial officer, and Pat Dignan, our Chief Credit Officer and Executive Vice President. After our comments, we would be happy to answer your questions.
Before I start, let me say our thoughts continue to be with the individuals, families, communities, healthcare workers, and first responders affected by COVID nineteen. It's unimaginable the toll the pandemic is continuing to take around the world. We are doing our best to help those affected by COVID nineteen, including donating masks to local hospitals, contributing to local food pantries, homeless shelters, and youth programs. We have been providing accommodations to borrowers through payment forbearance and meeting the needs of our employees who face new challenges while working at home. As we'll discuss, we've been actively participating in the payroll paycheck protection program as well.
Friends, investors, and other constituents of the bank often kindly and genuinely ask how we're doing, and we continue to do well. To protect our employees and customers, we only service deposit customers in these branches that have drive through windows. Other than other than employees and customers other than employees working in those branches, almost all other employees are working at home. Thanks to an exceptional IT and operations group and a dedicated team of other professionals, we've been able to conduct business virtually the same as before with COVID nineteen. It is certainly a different environment, but our professional, hardworking, adaptive, and dedicated team has risen to the occasion.
On this call, I'd like to focus on the paycheck protection program or triple p, which has been quite meaningful to our bank, our correspondent banking income, LASG activity, deferments and also stock repurchases. After my comments, JP will provide a high level overview of our financial results. For the 2020, after the close of the market yesterday, excuse me, we announced record quarterly net income. Excuse me. Just a cough.
Not sick. Record quarterly net income, $11,200,000 or $1.33 per diluted common share. A return on average equity of 28.4% and a return on average assets of 3.1%. Those are remarkable numbers. I just want to repeat, a return on average equity of 28.4% and a return on average assets of 3.1%, a record for us.
For the year, we also had a record with earnings of $22,700,000 or $2.53 per diluted common share, a return on average equity of 14.2% and a return on average assets of 1.8%. Turning to Slide four, through June 30, we originated approximately 4,400 triple p loans in the aggregate amount of $487,500,000 to borrowers with tens of thousands of associated jobs. Late in our fourth fiscal quarter, we sold $457,600,000 of our triple p loans to loan source, generating a pretax net gain of $9,700,000 or approximately 6,700,000.0 of net net of tax. 29,900,000.0 of loans not included in the sale plus triple p loans that we originated after June 30 we will sell after June 30. So we can expect to see that in our first fiscal quarter.
Turning to Slide five, we previously announced we had entered into an arrangement with Loan Source to act as their correspondent with the Federal Reserve in order to facilitate their ability to purchase triple p loans from other banks and finance the purchase through borrowings from the from the federal from the Federal Reserve under the program known as PPP LF. Under this arrangement, eligible borrowers from the Fed can borrow with 35 basis points. And for us, this has been and potentially will be in the future a significant source of income. Under our arrangement with Loan Source, we share where we get paid one half of the net gain on any purchases plus one half of the servicing income earned on their PPP portfolio that they purchased. Looking at the slide, in June, they purchased $1,300,000,000 I'm rounding a little bit of PPP loans, including the 457,000,000 we purchased from the Northeast Bank.
That generated a fee of us for us of $2,900,000. Just this week, Loan Source purchased an additional $1,600,000,000 of loans, including 44,000,000 from us, relatively small amount, which generated an additional $5,600,000 of correspondent fee income for the bank. So where we are now, we have been paid eight and a half million dollars of correspondent fees, which we haven't recognized in any material way in income. That 8 and a half million will be recognized over the estimated life of the $2,900,000,000 PPP portfolio. In addition to that, the servicing income that's earned on that $2,900,000,000 triple p portfolio, we will receive half of that servicing income.
Just yesterday, it was announced that the triple p l f, that is again the lending facility from the Fed, which permits these loan purchases by loan source, which was originally scheduled to terminate on September 30, has now been extended to December 31, meaning that Loan Source now has until unless extended longer until December 31 to purchase triple p loans, which if they did, would generate income for us as I have described. We're not making a prediction here whether they will or they won't, but they certainly have done a lot so far. If we turn now to slide six, it's an interesting slide which shows the balance of our LASG portfolio at the end of the last quarter, March 31, through the balance at June 30. And what you can see here, which is very usual for us, is that our portfolio declined by 6% over those three months. And as those of you who follow us, we've had growth in our LASG portfolio virtually every quarter.
And you know, the reason that it declined is that we had relatively small number of purchases, only 13,000,000, and small numbers of originations, 33,600,000. None of that surprised me. We mentioned in our last call, which was in April, that we didn't we did not expect that we would have a lot of volume either in purchased or originators for this quarter. Know, the pandemic was just taking off. People were getting adjusted to it.
People were staying home. Not focusing so much on borrowing more money or buying properties and banks not so much and other sellers thinking about selling loans. We did have a fairly significant amount of payoffs, a $100,000,000 of payoffs and amortizations. And in this particular case, you know, we're of the view that was a good thing because in particular, some of the loans that got paid off, we were happy to have them paid off. Not that we were concerned that we would have principal loss.
As you recall in our conversation last time, in great detail, we went through all of our LASG portfolio and other portfolios estimating what the loan to values were, you know, when they were generally on a weighted average basis in the low fifties. But we had some credits that could have had some problems paying, and we were just as happy to see those borrowers pay off sometimes on their own volition and sometimes with some urging from us. So, you know, I would if I were to summarize that on slide six, I would say that that is actually positive even though it might be counter intuitive. And one of the things that we have talked about for a while now is the opportunity that will present itself to us, we believe, to be able to, particularly in the purchased area, but also in the originated area as we go into this real estate cycle. As I said last time, and I'll repeat again, you know, we wanna be conservative.
We don't wanna be aggressive in building a balance sheet now to regret it later. We wanna make our balance sheet as strong as possible. So when the opportunity really presents itself, we're in a strong position with a lot of capital that we have, the great skill that we have in underwriting and and managing commercial real estate loans. We wanna take advantage of the opportunity when it's the right time. You've all heard the expression of catching a falling knife.
Sounds unpleasant even to say it. We're not interested in doing that. You know, as we think about the year, you heard the forward looking statements I'm gonna make one, but I expect that, you know, our volume both on originated and purchased will increase over the year as things tend to settle down. So being conservative is important and making sure that our existing portfolio is strong as possible is also important. If we turn to slide seven, I think this is a really great and interesting slide.
This is a slide, we call it COVID modification summary, others call it deferment, it's all the same thing. But we have put together a slide with more specificity than we could when we talked in April because it was too early then. But you can see that month by month, May through July, we indicate the amount of deferrals that we were granted. So the grand total of those now these are three months total deferrals of principal interest. No payments for three months.
You can see the grand total of that was a 135,000,000. If we take that number and use it over our loan balance at June 30, it's 14%. But let's see what happened to those where things could happen. In March, those and it's it's down with this information as of July 27. In March, we had original deferrals of 8,800,000.0.
They are now there are none of those asked for an additional deferral period. As of June 20 July 27, 7,200,000.0 have paid. 1,000,000 is under thirty days, which the call report purposes, as you know, was considered current and only 600,000 more than thirty days past due. April was a bigger month. We had $86,300,000 of deferrals, and we had out of those 19 call it $20,000,000 of those borrowers who requested and we agreed to an additional three months.
But the balance is very strong. As of July 27, 45,000,000, a little rounding, have paid, and 21,600,000.0 are under thirty days, again, current for call report purposes, and none over thirty. And with respect to the deferments in May and June and July, those are not scheduled to resume in August, September, and October. We are hopeful they will look like those that terminated from the ones started in March and April. And so when we sum that up, at the where we are on July 27, we have $60,000,000 of total forbearance deferments, which now represents 6.19% of the balance on June 30.
And that number includes the 19,800,000.0 that rolled over, from the original ones in April. That's quite a good number, and it's performing well. If we go to slide number eight, these are different modifications. These are modifications that we offer customers that they could go six months interest only, which frankly, we prefer these. When we had you can see the totals March through July, that was $50,500,000, and they're all paying.
We have 39,600,000.0 that have paid on July 27 and 10,000,000 that are less than thirty days, which we expect will be current. That represents 5.2 of the total loans. So that's a lot of detail on the deferments, but we think those are very good numbers and a great thanks to our excellent asset management team. On Slide nine are some metrics on our asset quality. I think as JP will mention that our delinquencies are down to $16,000,000 and change as of June 30, which is down from about $21,000,000 or maybe more.
JP will give you the number on March 31, and our non accrual loans are also down as well. Again, again, but on slide 10, there's some detail on our allowance. We had provided this last quarter as well. I always wanna remind everyone that the accounting for purchase loans does not permit a general reserve on purchase loans, and so we provide the detail as to what that balance is and what we have as specific reserves. But of great interest is that our allowance on our originated loan book is now 8 and a half million dollars on 584,000,000.
That is coverage of 1.45%, which has increased dramatically over the year. Finally, on Slide 11, we have some detail on our repurchase plan. As you may recall, when we reported on March 31, we indicated that out of the 900,000 repurchase plan approved in October 2019, we had purchased 416,700 shares at an average price of $12.83 In the fourth quarter, that is the quarter we're reporting on now, that's our fiscal quarter, we purchased 436,398 shares at an average price of $14.4 So out of that $900,000 repurchase plan, we repurchased a total of 853,098 shares at $13.45. Remaining out of that plan, therefore is 46,902 shares, roughly 47,000 shares. On July 21, we received and we announced that we had regulatory approval to purchase, repurchase an additional 600,000 shares, but spending no more than $10,200,000, which now gives us capacity of 646,902.
And so that's what we have. You know, we buy stock when we think it makes sense relative to where the stock is trading. Tangible book value is almost $20 now. And so stock price seems is it's the price has given us opportunities to to buy stock, let me say it that way. And with that, I will now turn the call over to JP.
Thank you, Rick, and good morning, everyone. Today, I will be providing a very high level review of our financial results and activities for the quarter ended 06/30/2020. As announced in our earnings release that was made public after the close of business yesterday, net income for the quarter was $11,200,000 or $1.33 per diluted common share. Diluted net income per common share was up one dollar and twelve cents from the quarter ended 03/31/2020, which I shall refer to as the linked quarter up $1.4 from the quarter ended 06/30/2019, which I shall refer to as a comparable prior year quarter. Driving the results for the quarter ended 06/30/2020 was a net gain from the sale of PPP loans as Rick discussed in his remarks.
Compared to the linked quarter, aside from the previously mentioned gain on sale of PPP loans, net interest income increased by $1,100,000 due to increased interest income of $758,000 primarily from the PPP loans, along with interest expense savings of $305,000 primarily from lower deposit costs. Compared to the linked quarter, the cost of interest bearing liabilities decreased by 48 basis points due to the lower rates from the FHLB and PPP LF advances along with a 20 basis point savings on interest bearing deposits. Compared to the linked quarter, the provision for loan losses decreased by $2,600,000 due to the large provision in the linked quarter to reserve for potential losses inherent in the loan portfolio, primarily for SBA loans in response to the COVID nineteen pandemic, Whereas the amount provided in the current quarter was primarily due to increased specific reserves on impaired loans. Noninterest income increased by $9,000,000 primarily due to the net gain on sale of PPP loans. Non interest expense increased $87,000 from the linked quarter.
Compared to the comparable prior year quarter, net interest income increased by $96,000 primarily due to an $806,000 decrease in interest expense, which was due to lower cost deposits as the cost of interest bearing deposits decreased 36 basis points from 2.02% in the comparable prior year quarter to 1.66% in the current quarter. Additionally, interest income decreased $710,000 from the comparable prior year quarter, primarily due to a decrease in the rate earned on cash held at the Federal Reserve. The provision for loan losses increased $643,000 from the comparable prior year quarter due to increased specific reserves identified and reserved for during the current quarter relative to the comparable prior year quarter. Non interest income increased by $8,700,000 from the comparable prior year quarter, primarily due to the net gain on sale of PPP loans. Non interest expense decreased $8,300,000 from the comparable prior year quarter, primarily due to $8,300,000 of reorganization expenses incurred in the comparable prior year quarter that were not incurred during the current quarter.
Additionally, the weighted average rate of deposits at 06/30/2020 was 1.38%. We also have an additional $151,000,000 of ABLE and bulletin board CDs at a weighted average rate of 2.35%, which are scheduled to mature in the 2021. Given our current funding position, we have not been bringing new CDs on or rolling over maturing CDs. Therefore, the cost of funds may remain elevated until we bring lower cost of funds on the balance sheet. However, interest expense is expected to continue to decrease as the higher cost funds continue to roll off the balance sheet.
That concludes our prepared remarks. At this time, we would like to open up the line to Q and A.
If you are using a speakerphone to ask a question, please make sure your mute function is turned off to allow your signal to reach our equipment. We will proceed in the order that you signal us. And we'll take as many questions as time permits. And your first question will come from the line of Alex Twerdahl.
Hey, good morning. Good morning, Alex. Good morning, Alex.
First off, I wanted to I hope maybe you could give a little bit more color on the purchase market. I guess we sort of realized we weren't going to see increased activity so soon. But do you have a sense, do you think it's going to be the third quarter or I guess the calendar or the fiscal first quarter for you guys as we start to see activity pick up? And maybe talk a little bit about what sort you're seeing in terms of the supply out there? And then also kind of as it relates to that, pricing on what you did buy this past quarter was a little bit better than what we've seen in the past.
Is that a function of fewer competitors out there? Or maybe just give us a little bit more color on that market.
Well, first, last part. It was a good buy. I think it was that's only one data point. I wouldn't read too much into the pricing on, you know, one or two transactions. We have not seen a lot in the market, you know, as we sit here now.
The in part, it's like it's In part, it's COVID. In part, I think there is not a the the bid ask is too wide. Seller expectations are too high. Haven't recalibrated yet to really where stuff will trade. I'd like to give you a precise answer as to, you know, what we'll see, when we'll see it.
I know it's we're challenging in that regard to try and model. But I, you know, I think the best I could say is that I would expect over this fiscal year for us, we will buy a a fair share. We will buy at better pricing, and I think it'll come later. We'll kind of build over the year. Let me ask Pat.
Isn't that way, everybody, we're in different places, so we obviously, we're in different places. So if we talk over each other, it's because we're not looking at each other. But, Pat, do you wanna add to anything I've said in response to Alex's question about the purchase loan market and what might be in the future?
Sure, Rick. Thank you. Good morning, Alex. Yeah. I think traditionally, July and August are very, very slow anyway, And loan sales tend to pick up, toward the end of the year, the calendar year, as balance sheet repositioning becomes a higher priority and other strategies, you know, fail to pan out.
With respect to anything COVID related, I think it's a little early for for any kind of sell off or illiquidity events that would that would generate opportunities for us. There's a couple of hotel portfolios that are out that you would as as you would imagine that that would come out first, a couple of sellers looking to, to exit that business. But otherwise, it's it's it's pretty quiet, and it's difficult. I think I think it will be, several months before,
there's the
kind of liquidity issues that would would, would create the opportunities that that we're, we'd be looking for.
I think I would add to that is that it's, you know, it's it's in some ways it's a it's a little bit unpredictable business. We could wake up tomorrow, and we could I'm not predicting this will happen nor is it based on anything that is happening. We could wake up tomorrow, and there could be a purchase opportunity for $200,000,000 of loans.
You know?
That's
true. We we have the capital to do that. Again, just to be clear, don't wanna set any expectations. I'm not saying that's there. It's not there.
But, you know, companies decide to sell and they can decide there could be a
lot of
volume. You know, I was thinking about this morning, you know, if you go back you know, thinking about this business, you know, we first started buying loans, just going back to Capital Crossing, you know, in the early nineties after the problems in the banking industry then. After 1998, after the financial after the financial crisis, well, we weren't doing this but there were opportunities, and there were huge opportunities. Loans that we recently were paying 92¢ for. The FDIC was selling for 60¢.
And I think the most important thing if we're in and we are in this for the long term, not trying to just do well quarter by quarter, it's to be patient, it's to be smart, it's not to either originate or buy loans that we're gonna regret having and, you know, be somewhat defensive now so that we can play offense when the time is appropriate. I don't know if you get on a pedestal, but probably every banker would say that, but, it's true in our case.
I mean, things like, hotel loans, obviously, a lot of challenges in that industry right now. Is that something you would avoid, or something that's more at risk, not necessarily specific to hotels?
I was I was gonna say I'm sure Pat was gonna say the same thing. He was saying that there was a portfolio out there because those are less desirable, asset claims. No. We're not buying hotel loans. No.
You know, this, of course, when you make credit decisions, there's a lot of things you think about, but two really important ones are, you know, LTV and the ability of the borrower to pay. And in you know, when LTVs are you know, values are sort of settling in and not quite settled, you know, you wanna be on the really low side. And we don't wanna be in asset classes that are not you know, add to them. We already have a fair amount of hotels that are not particularly liquid. That's not something we would bid on.
Okay. Understood. And then, you know, kind of on the similar, I guess, topic on slide seven, maybe not so similar, but slide seven with modification summary. And some of these loans, like the $21,600,000 that have gone to thirty day or less than thirty days past due, can you provide just a little bit more context on what's going on with those loans you know, if they're if they're not paying and they're not in deferral, you know, give us a little bit more comfort that those are
But the thirty days yeah. You know, that we could have more granularity about that. Less than thirty days past due could be, you know, a, you know, a borrower that had a payment. Let me back up. This is as of July 27.
Right? So because we wanted to provide as complete up to date information as possible. We often have loans that are less than thirty days past due, and then they pay. So included in that, for example, could be a borrower that had a payment that was due on July 20 and didn't pay on July 20. I feel reasonably comfortable that when we do this slide again next quarter, we will see good performance out of that group.
That's the best way I could say it. You shouldn't look at that list at all and think of that those are bad loans. You know, the 21.6 are bad. And with this nature of our business, a lot of them purchased and, you know, that people don't always pay on time, but they generally pay, you know, within thirty days. And a lot of times, not so much on these because of the nature, but, you know, we get late fees and all kinds of things.
I those are I think those are good numbers is the way I would the color I would put on it.
Right. I mean, they they would have been I guess, these loans were in deferral. They would have you would have had at least a conversation with them if they needed additional deferral, and they'd still be there if there are loans that couldn't make the payments. 100%. Way to think about it?
Percent because out of the 86,300,000 in April, there were 19,800,000 that went on deferral, went on three more months. The rest of them didn't. So no. I yeah. If we were to this doesn't exactly answer your question.
Well, if you were to file a call report, those would all be showed as current because they're less than thirty days. I would get more concerned if there was a big chunk of those. I in fact, I wouldn't, like, go crazy about it because it happens sometimes. But if they were if that 21.6 was in the thirty to sixty day bucket, that would be cause for more alarm than being in the less than thirty day bucket.
Agreed. And then, you know, going to the, to the the arrangement with the loan source, which is just seems like, just obviously nice tailwind for you guys, over the next couple months. But do you have any sort of window into what the pipeline could be like for the loan sources, future purchases?
Well, I'll just put some numbers kinda around. There were $550,000,000,000 or so of triple p loans originated by something like 5,000 banks and 1,100 credit unions Through their marketing plan and they have lots of they have an extensive marketing plan, they're probably going to touch most of those banks to see if they're interested in selling. And banks, the ones that have sold, mostly they've sold the main reason they sold is they wanted to get rid of the servicing part of it. And that's the reason we sold, frankly, because the rules change. You need technology.
You need to reallocate, you know, your your your people from doing what they their core business to learning how to service these and doing that. And that costs money. And so, you know, these loans typically sell at 98 and a half, so somebody gives up a point and a half to sell it. But there's both actual cost and opportunity cost to service it and the risk that you're not going to get it right. And so they're talking to a lot of folks.
They've done a lot of volume already. If we started this, we would have been happy as all get out if we got the 3,000,000,000, which we did. They now have, as I mentioned in my comments, it was kind of fresh off the press yesterday late. It now goes to September 30. I I would be reluctant to estimate what more they'll do.
You know, could be not much, could be a lot. I'm sorry to to give you such unhelpful answers, Alex, but it's not as if I and I know that they're talking to a lot of banks, but we'll see what we'll see what banks what they do. And then I would just add one or two other points to that. One, the legislation as to how this will all fall out is uncertain. There's a a bill in the as everyone knows, presumably in the house.
In the senate, they're light years apart. They have different remedies for making the forgiveness process easier. You know, the more complicated it is, the more likely a bank is going to sell. Although that's not the only reason that a bank will sell. But on the positive, well, that's not negative.
It's just the fact. And then also, I think there are gonna be other PPP opportunities in the future, namely they're talking about allowing existing borrowers to borrow again. They're talking about having a program for seasonal businesses. And so there's lots of things that could possibly flow out of this. Again, I'm not trying to make a prediction as to what we will do or how much it will be, but there seems to there seems to be a continuing opportunity.
Right. And then is there a way that you can help us frame what that servicing piece could potentially be on $3,000,000,000 of loans? Well,
I'll try and be helpful, then I think I will fail you again. I apologize. So if you think about the servicing, the revenue is the difference between the interest rate the borrower pays is 1% and the borrowing cost from the Fed which is 35 basis points. So on the revenue side on $3,000,000,000 they have 65 basis points of revenue. You know, they're they're they're hoping that they can service this.
I'm reluctant to put a number out. I'm I'm just I'm gonna get into trouble if I do. But but, you know, you know, you I think you had put out in one of your releases, Alex, that you thought, you know, our share of it could be in the 20 basis range. I don't think that's I think that's as reasonable an estimate as any. So if we were to quantify that, you know, that's on a run rate of $6,000,000 until the loans are paid down.
I think that's reasonable. I could be off. I won't bore everybody by reading the forward looking statement, but I think based on what I've seen, that seems reasonable projection, you know, give or take a few basis points. And so I wanna just expand on, you know, what the income opportunity will be for a while. One, the 8 and a half million dollars, there were how much JP did we amortize of the original 3,000,000 so far?
Like, $20?
Yeah. About $20,000 in June.
So that's 8 and a half million. All about 20,000 of that will be amortized into income roughly over the next couple of years. It could be a little less if the owner has the loans paid up earlier. Okay. So that's one thing.
Secondly, the servicing income we just talked about. And thirdly, which we really haven't mentioned, but when they buy the loans, they pay whatever they negotiate the prices, say 98.5¢. But they usually wind up making like more like 99 because they have referral fees to source the business. But one of the things that happens is they have to pay for the accrued interest up until the time they buy the loans. And at some point, they're gonna get that back.
So for example, this is a lot of rounding. But the 1,000,000,000 point dollars that they just bought, let's say net of commissions, you know, they received, they got it for 99, so that's $16,000,000. So you would expect, you know, our share to be 8,000,000, but it was only $5.06 because there's about 2 and a half million dollars of interest expense that they paid for that they won't get back until, you know, until the loans start paying or get forgiven. So there's a lot of money coming in over the next, you know, year or two years from this. A lot of
those When that interest expense comes back upon forgiveness, does that mean that the 8 and a half million or so can actually does that actually goes higher?
It will be higher. So let's just think about the last transaction. Let's just use the the billion $6.01. The billion 6, you know, if they again, no round numbers. But if they had if they netted 1% discount, they would have made 16,000,000.
But I'm just repeating what I said before. So there was you know, our share would be 8. We only got five to six. That's because they had to pay the seller almost $5,000,000 of interest that had accrued on those loans. You know, think about buying a bond when you pay for accrued interest.
So when those loans start paying, they're gonna get back the that interest they paid for, and we only account for this when we actually get the cash. So we're not the buyer of the loans they are. So we'll have even more income coming in.
That's pretty helpful, Rick. Thank you for all the color on that. And then just final question for me. JP, you gave some numbers on, the CD maturities just at the end of your prepared remarks. I just missed those.
Can you go through those, one more time just on the, the funding cost reductions?
Sure, Alex. Our weighted average rate on our deposits at the end of the fiscal year was, 1.3%. In addition to that, we have a $151,000,000 in, ABLE and bulletin board CDs, that are scheduled to mature over the next six months, I guess, five months at this point since we're at the July, at a weighted average rate of about 2.35%, on those. So, we'll see that money coming off the books. And as you can tell on our financials at the end of the year, we do have some excess, cash on hand.
So, you know, right now, we're not, you know, putting new CDs on the books. But if we were, you know, the current cost of those CDs that are running off to replace those would be around 30 basis points. So, you know, don't need the funding. So we do see some some straight dollar savings in the interest expense. But if we were to put them on at 30 basis points, that would clearly bring the weighted average rate of our deposit portfolio down, pretty dramatically, when the time comes and we need some of that funding.
Thank you for clarifying and going over that again. Thanks for taking my questions guys.
Thank you, Alex.
Thank you.
Once again, please press star one on your touchtone telephone to ask a question. And there are no more audio questions at this time. Now I will turn the call over to Rick Wayne for closing remarks.
Thank you. Thank you, Alex, for your very thoughtful questions, which I hope we were responsive and I hope they were helpful to you and the other listeners on the call now as well as those that will listen in the future online. This is quite a quarter for us as we went over, record a quarter in so many ways. We appreciate your support. Appreciate you following us.
We value your input. We always try and improve our information on our slides very often from feedback we get from investors and others. If you have thoughts, let us know. We appreciate that. We appreciate the communication.
Most of all, I wish all of you that you stay safe, that your families stay safe. We look forward to the time when this is all behind us. And with that, I thank you again, and we'll sign off. Thank you.
Thank you everyone. This does conclude today's conference call. You may now disconnect.