OSBCP, update last week.....Conference call...
Hey, good morning. Brad, maybe I'll start with you, the optimization comments. I have asked in the past about the trust prefers. I assume that's what you're talking about, maybe you can elaborate. I know some of your senior debt isn't callable for a couple of years, but there is some high cost, $30-plus million, almost 8%. Is that what you're referring to? And if so, what will be the timing and the strategy to redeem it?
Brad Adams
Yes. My referring is specifically to 2 things. One, you did see during the quarter that we sold down some of the securities portfolio, didn't reinvest it fully. Expectation is there's some portion of that will continue to bleed into loans, although it's a relatively small contribution. And you're right. There is an opportunity to significantly reduce interest expense related to that trust preferred specifically.
No comments in terms of near-term intentions, but that is certainly something that we're evaluating. I think larger it's a question of capital. We are having still excellent returns on tangible common and that's primarily what we focus on in terms of what investment opportunities to take advantage of. I think that we need to make some careful decisions in terms of what we do with that capital position going forward. Taking out some debt is certainly an option, stock buybacks are certainly an option and M&A is still a preferred option. All will be evaluated.
Chris McGratty
And is there -- if you were to rank those 3, just to follow up, would it seem -- I guess, how would you rank the 3 in terms of willingness or preference?
Brad Adams
M&A is the first preference. Debt taken care of is the second preference. Third preference is stock buybacks. |
