Question-and-Answer Session
Thank you sir. The question-and-answer session will begin at this time. [Operator Instructions]. And your first question comes from the line of Mike Widner of Stifel Nicolaus. You may proceed.
Michael Widner - Stifel Nicolaus & Company. Inc.
Good morning guys, good quarter. Couple of questions that are related here; first one, just looking through your balance sheet, I see a new line item there for reverse repurchase agreement. I'm guessing, you guys aren't so flushed with liquidity that you've entered the repo-lending business. So, I was wondering if you could just give us a quick comment on exactly what that is and why it's showing up?
Michael A. J. Farrell - Chairman, President and Chief Executive Officer
Well, as I said in the opening comments and this is something that everybody should focus on as to what was really happening in the last three weeks of the first quarter, commercial banks... large commercial banks was still flushed with cash that they literally would not take any deposits. I want everyone to pause and think about that, because that's exactly the condition of having a flush of liquidity in the systems that's not seeking a risk premium. So in essence, what you see during that period is there is plenty of money around and it's being used to support that which is the most clear and transparent price. As regards, our takes on the inside of the business, I will ask Welly to comment.
Wellington J. Denahan-Norris - Vice Chairman, Chief Investment Officer and Chief Operating Officer
I mean we... as we are all fully aware and as we have all witnessed, liquidity was a key asset on anybody's balance sheet and going through that environment, we felt that it more prudent to have excess liquidity and it shows up in our cash and cash equivalents and reverse repo. The reverse repo shows that we sold it into the repo market, cash and cash equivalents would show that we sold it into the money market. But it's a snapshot in time, going over probably one of the most volatile quarters, I think in the history of Wall Street, certainly for some had fared better than others, but we felt that there was no question that having liquidity on your balance sheet was the prudent thing to do.
Michael Widner - Stifel Nicolaus & Company. Inc.
So, I would certainly agree with all of that and I appreciate the clarity there. Let me just make sure I understand though, what the reverse...
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