Question-and-Answer Session
Operator
Thank you, sir. (Operator Instructions) We'll go first today to Frank Schiraldi with Sandler O'Neill. Please go ahead sir. Your line is open.
Frank Schiraldi – Sandler O'Neill
Okay, couple questions here. First on the construction loan portfolio being down 11.8% linked-quarter, is that reflect to paydowns or is any of that reflect loans that where constructions are going into either permanent financing or going into one-to-four family bucket?
Philip Wenger
Frank, almost all of it relates to pay down.
Frank Schiraldi – Sandler O'Neill & Partners
Okay, and is that generally in the Maryland area?
Philip Wenger
It’s across the footprint. I think it would be in proportion to the - or a percent of the outstandings.
Frank Schiraldi – Sandler O'Neill & Partners
Okay, and then in terms of tangible common equity, I mean, that’s up 5.8% right now. Is that’s something you look at in terms of where you want apple levels to be? Is that a place you are comfortable with? And then as a follow-on where does paying back TARP way in terms of priority?
Scott Smith
Frank, this is Scott. I think we feel okay about that, about that number relative to peers. I think it’s fine. We always we want to continue to grow that. As far as paying back the capital purchase program money, we are continually analyzing that as I’m sure most banks are, and looking at that whole situation and we’ll have a comment when our decision is finalized, but for now we continue to watch it.
Frank Schiraldi – Sandler O'Neill & Partners
Okay and then just finally in terms of the dividend that you pay on the TARP money is that, have you been able to offset that through the investment income that you plough that capital into?
Charles Nugent
Frank, this is Charlie. I guess we’ve been able to partially offset it, but it’s a 5% dividend. It’s, in the quarter it was over $5 million and we can’t stuff that from a tax standpoint. So the effect of yield is like 7.4%. So you can try to offset what you can offset it.
Frank Schiraldi - Sandler O'Neill
Right. Has there been any leverage put on, on that capital in order to offset it? Or is that not a program that you are??
Charles Nugent
I don’t think it’s leverage, but when we receive the funds, as Phil mentioned our loans were down, so we put it into the investment portfolio. And it’s an agency securities that are relatively short.
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