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Good day. And thank you for standing by. Welcome to the Old Republic International First Quarter 2021 Earnings Conference Call [Operator Instructions]. Please be advised that today’s conference is being recorded. [Operator Instructions]
I would now like to hand the conference over to your speaker today, Joe Calabrese with MWW Group. Thank you. Please go ahead.
Thank you. Good afternoon, everyone. And thank you for joining us for the Old Republic conference call to discuss first quarter 2021 results. This morning, we distributed a copy of the press release and posted a separate statistical supplement, which we assume you have seen and/or otherwise have access to during the call. Both of the documents are available at Old Republic's Website, which is www.oldrepublic.com.
Please be advised that this call may involve forward-looking statements as discussed in the press release and statistical supplements dated April 22, 2021. Risks associated with these statements can be found in the Company's latest SEC filings. This afternoon's conference call will be led by Craig Smiddy, President and CEO of Old Republic International Corporation and several other senior executive members as planned for this meeting.
At this time, I'd like to turn the call over to Craig Smiddy. Please go ahead, sir.
Okay, thank you Joe. Good afternoon and good afternoon, everyone. And welcome again to Old Republic's first quarter 2021 earnings call. With me today, we have our CFO, Karl Mueller and we have Carolyn Monroe, the President of our Title Insurance Group. So we’re here again with another great quarter and infact we are very happy with the exceptional performance in both General Insurance and Title Insurance drove the strong consolidated results we posted for the first quarter.
Total net premiums and fees increased to $1.84 billion in the quarter up 18% with consolidated pretax operating income of $255 million up 47%. In a consolidated combined ratio, that was 4.2 percentage points, lower for the quarter coming in at a 90.9%.
In General Insurance, we saw a slight growth in premium relative to the first quarter of 2020, when premiums were not yet impacted by the effects of the pandemic. And then Title Insurance, we grew premiums and fees by 40%. And that was on top of the record setting first quarter in 2020.
So as demonstrated in the strong results, our specialty strategy continues to produce growth and profitability. And our diverse portfolio of specialty products in both general insurance and title insurance has, again delivered value to our shareholders.
So with that, I'll turn the discussion over to Karl to discuss some of the per share figures along with some added color on our investment portfolio. Then he'll turn things back to me to cover General Insurance. And that will follow by Carolyn who will discuss Title Insurance. And then of course, we'll open up for Q&A.
So, Karl, would you go ahead and take it from here.
Thank you, Greg. And good afternoon. This morning, we announced first quarter net income, excluding all investment gains and losses of $206 million or $0.59 per diluted share, which is a 47% increase compared to last year's first quarter.
Additionally, shareholders equity rose to $6.45 billion and book value per share grew to $21.59 that's about a 5.1% increase for the quarter inclusive of all regular dividends.
So now let me briefly address a couple of key elements regarding Old Republic's financial condition. First of all, relative to investments, we did not make any fundamental change to our investment strategy during the first quarter of this year. And at this point, don't anticipate any material shifts in policy in the near term.
Investment portfolio at March 31, consists of approximately 72% that were directed towards highly rated bonds and short term investments, with the remaining 28% allocated to large cap stocks that have a long history of paying and increasing their dividend distributions.
The valuation of the equity portfolio improved by $367 million during our first quarter, excuse me, and ended March with an unrealized gain of $1.1 5 billion. Net investment income actually decreased by 8.6% for the quarter, as the impact of lower yields on new investment purchases, more than offset and modest increase in the invested asset base.
The average maturity on the bond portfolio remained consistent at approximately four years, and the average book yield declined slightly at the end of the quarter to 2.6%. New money was invested at yields just below 2% during the quarter, putting downward pressure on net investment income that is likely to persist throughout the remainder of 2021.
Turning now to the liability side of the balance sheet, claim reserves grew to $10.8 billion at the end of March. And we're affected by lower paid loss trends due to the pandemic. All three segments recognized favorable claim reserves development for the quarter. And in total, the consolidate claim ratios benefited by 1.8 percentage points for this year's first quarter, by comparison to 0.8% a year ago.
And then finally, with respect to our mortgage runoff operation, there's really nothing particularly noteworthy this quarter other than to point out that we did in fact resume dividend payments following last year's temporary suspension of capital returns.
During this first quarter, the business received approval from our regulators and paid a $25 million dividend to our parent company. So at the end of March, our mortgage companies GAAP shareholders equity totaled $435 million. So that is the highlight. And with that, I'm going to turn things back to Craig to dive into the General Insurance Group.
All right. Well, turning to General Insurance. Net premiums written increased in the first quarter that followed increases in the third and fourth quarters of last year. And we also saw net premiums earned start to increase again in the first quarter.
Compared to the first quarter of 2020 pre-tax operating income rose by almost 28%, primarily from our improved claim ratios. The overall combined ratio for the General Insurance Group improved four percentage points from 95.6% to 91.6% quarter-over-quarter. The claim ratios reported were of course inclusive of favorable prior periods development, which was 2.7 percentage points in this quarter compared to favorable development of 0.7 percentage points in the first quarter of 2020.
Net premiums written and commercial auto grew by 8% with positive effects from continued rate increases in the auto liability line. And those were rate increases in the 15% range. And that comes along with a growing exposure face in recent quarters as well.
Our first quarter commercial auto claim ratio improved 73.8% compared to 77% in the first quarter of 2020. Claim frequencies still lower than pre-pandemic levels, but continues to be offset by higher severity due to greater speeds and continued pressure on settlement value.
Turning to workers compensation, net premiums written in earnings were 15% lower when compared to the first quarter of 2020, where premiums were not yet influenced by the effects of the pandemic. Slight premium rate increases continued this quarter on the workers compensation line.
The workers comp first quarter claim ratio came in at 56% compared to 71% in the first quarter of 2020. And non-COVID related claim frequency remains lower than it was at pre-pandemic levels.
As we talked about in prior quarters, the impact of COVID-19 workers' compensation claims remains insignificant, with about 95% of the COVID-19 workers' comp claims coming from lot sensitive business and greater than 95% of the COVID claims continuing to be mild. And I can also report that newly recorded claims dropped significantly over the course of the first quarter.
As most of you know, we typically provide commercial auto workers comp and general liability together in our product offering and this combined claim ratio came in at 69.2% compared to 74.1% in last year's first quarter. The financial indemnity lines property, property line and our other coverage category, though the claim ratios remain very healthy and very steady when you look at quarter-over-quarter results.
So in General Insurance, we continue with our strategy to enhance underwriting excellence, through better segmentation, improved risk selection, pricing, precision, increased use of analytics, along with our focus on providing lock sensitive programs.
We believe this strategy will continue to facilitate strong underwriting profitability, which we believe is even more important now, in order to offset the declining investment income that we that we just spoke about. And the good news is the marketplace remains favorable for us to continue to obtain appropriate prices for our products while maintaining high retention ratios.
So I'll now turn the discussion over to Carolyn, who will, along with the rest of her team and the Title Insurance Group, continue to knock the cover off the ball. So, Carolyn, I'll turn it over to you.
Thank you, Craig. And good afternoon, everyone. The Title Group is pleased to report record setting first quarter results for both operating revenue and operating profit. Our employees continue to effectively balance the challenges although improving of in person commerce, with the opportunities provided by the current U.S. mortgage origination market.
Total premium and fee revenue for the quarter was just shy of $1 billion at $967 million, up approximately 40% from the comparable prior period. This was achieved with the contributions of both our agency and direct operations. For the quarter, agency premiums, which are typically recorded on about a one quarter lag compared to our direct premiums were up nearly 43% and premium and seeds from our direct operations were up around 32%.
Our pre-tax operating income of $103 million for the quarter compared to $43 million in last year's first quarter, an increase of $60 million or 139%. The combined ratio of 90.3% for the quarter represents around a 5% improvement over last year's first quarter combined ratio of 95.1%.
Having begun the year with a solid foundation, we remain optimistic for the remainder of the year. Mortgage rates are expected to remain near historic lows throughout 2021, providing a catalyst for a continued robust real estate market. Although refinance transactions are projected to drop over 35%, this is in comparison to 2020s record setting volume and relatively speaking will still be at a healthy level.
To offset the refinance drop purchase money transactions are forecast to be up around 16%. Of course, this is good for our business as home sales offer greater opportunities for premiums and fees.
As always, we will move forward with our guiding principles of integrity, managing for the long run, financial strength, protection of our policyholders and the wellbeing of our employees and customers with an added emphasis of appreciation for our employees, their dedication, continuity and positive attitude.
And with that, I will turn the call back over to Craig.
All right, Carolyn, congratulations again. Well, again, we're very pleased with this quarter’s operating results. Our strategy of providing specialty insurance and related specialty products to core industry served by General Insurance and Title Insurance continues to produce strong results for our shareholders.
So that concludes our prepared remarks and will now open up the discussion to Q&A where all will answer your question.
[Operator Instructions] Your first question comes from Matt Carletti from JMP.
Hey thanks. Good afternoon.
Hello, Matt.
Hello. Okay, I got a few questions. Maybe Craig, I start with your general liability and worker's comp color that you gave us. I'm trying to help understand the exposure impacts from COVID. And so is it possible for you to even in rough numbers break apart the reduction that we saw on premiums in the quarter? I mean, obviously, there's retention, there's new business production, there's pricing, and then there's exposure. So how should we think about that in terms of the exposure piece versus the other items?
Sure. So if you look at workers compensation, relative to the last few quarters, the exposures have begun to recover. So 70%, differently, the decline in the fourth quarter, over the prior year was greater than the decline is this quarter over again, the first quarter of 2020, when there wasn't any really reflection of the impact from COVID. So we would expect that beginning in the second quarter, especially when we're going to start comparing premiums to premiums in 2020, that were in fact, impacted, then the shift should be considerable. But what we saw in the first quarter was just simply a continuation with some improvement and exposure over where we were in the last three quarters of 2020.
And with regard to rate, it's very slight. I think your assumptions can be just that there's a slight rate increase that we were reported on in the fourth quarter, and it was about the same in this quarter.
Great. And then my next question, I want to switch last quarter, I can't recall, you touched on the idea of making the technology investments. And along those lines, I was hoping you might be able expand on that a little bit, just in terms of some of the rich areas in particular, whether it's underwriting or more kind of interfacing with the agents and what you might be planning on doing in the, in the title business on the technology front?
Sure, Carolyn, would you please address that?
Sure. So it's, we kind of have a two prong approach. We're working on things that speed up processes, that just so that we can provide better service to our customers and our agents. And we're also working on things that that will help our agents have better connectivity. Ready to two things out there that that, that start coming on the market, so that they only have to, like go to one place to be able to connect out to other technology that would benefit them. So we were sort of working on all of it, if the truth are known. I mean, it's something you have to continually evolve around and focus on.
Great, thank you. And then last one, if I could, just a broader company question. Can you talk a little bit just about capital and specifically, are there are there tangible benefits to kind of having diversified businesses, is it all republic in terms of general insurance and, and title and I know, MIs and run-off, or they kind of on a standalone basis, and you should think of a more of like independent under a holding company from a capital standpoint.
Well, I would point you to the comments that we made in our March 31 annual report letter. And in that letter, we talked about the fact that that General Insurance and Title Insurance are very complementary under the ORI umbrella, and there's a large amount of synergy with regard to the specialized insurance, underwriting approach, and products and services that are keys to our strategy. And included in the enterprise risk management attributes of having General Insurance and Title Insurance together, as we point out in that letter, we believe the businesses are counter cyclical, there's there, it's important to our tax planning strategies, as well as our capital management allocation.
And you may have seen the press release yesterday from and best whereby they make similar comments when they affirmed the ratings in our General Insurance Group and increase the ratings in our in our Title Insurance Group for pointing to the strategic position and importance of title in our in our Old Republic International family and being integral to the overall organization with common branding and talent synergies as well.
So I would just leave it at that and tell you that, all of those things we said in that March 31 letter are how we believe the two businesses fit underneath The Old Republic International umbrella.
Great, thank you for all the answers.
[Operator Instructions] Your next question comes from Greg Peters from Raymond James.
Good afternoon. It's interesting, you might must have switched locations because usually during the course of your comments, we get to hear Chicago's finest the fire department going back coming back from the lunch break. So kudos to however you switch it to this is the first time in a long time. I don't remember hearing them in the background.
Well, now, now you've jinxed us, Greg, I'm sure they'll be coming by shortly. We're here in the same room
It's like I you know, every year, every every time you do the calls, it's the timing. Listen, I was I wanted to sort of go at this differently. Firstly, Carolyn, so I was I was interested by your comments about the outlook, both for new and refinance. And so I was wondering if you could give us some perspective, if I look at just the 2020 premium and fees earned, which is about $3.3 billion. How much of that was new business versus how much is refinance? And so when I, when I put together, the one's going to be down one's going to be that sort of gives me a benchmark of what I should think the numbers should look like for 2021
Carolyn?
Sorry, Greg. I would say about 25% of our business was refinanced in 2020.
Okay, and then, just to reiterate, you said that they're the refinance. Can you give me the numbers, you said in prepared remarks, which, which was going to be down which was going to be up?
So they're projecting that refinance will be down about 35% over 2020, and that purchases should be up around 16% over 2020.
Okay, and so, if I sort of ballpark that, that means that for based on that outlook, that the year for premiums and fees should be stable, or is that modestly positive, is that I can do the math separately, but that's sort of ballparking is that sort of the right guests that we would have to?
We were thinking that it should be stable? Yes.
Yes, yes. Excellent. And then the expense ratio in the title improved in the quarter and I don't really want to get too hung up on one quarters improvement over another quarter. But the annual trend is better. And obviously there's volume. There's a volume component to that. But then there's, you also went through some restatements. So talk to us about where you think the expense ratio what that should look like, given the restatement, given the results, all that?
I would say that it should, it should stay stay about where it is right now. We don't like to do predictions. But, based on what we're seeing right now, it we think it should be in about the same ballpark as it is right now.
And can you just walk me through the restatement issue? I know it is called out to me and I just, if you just walk me through what was going on there?
Greg, why don't we have Karl, help with that?
Okay, Greg, this is, this is an accounting policy change that, the prior practices take back several decades, actually were for a portion of our business, we were reporting premiums and fees earned net of associated expenses. And it, it became apparent the growth of the business that we really needed to create consistency in our accounting practices. So at year end, 2020, we made that change to all prior periods to make the comparison, equivalent to the year end 2020 presentation. So it's basically a gross up of revenues, and gross up of expense in the same dollar magnitude, having no impact on pre-tax underwriting or operating income.
So it had a relatively minor real impact to the reported combined ratio, 0.1 or 0.2. So it's totally inconsequential, and really doesn't drive, drive the numbers significantly. All our periods are now presented on a comparable basis. And you'll see change, slight changes as we go throughout the year, on a quarterly basis.
Thanks for covering that call. I appreciate it. Let's go back to General Insurance. And I appreciate your comments around pricing. And I guess what, what I'm, as I look at your results for the quarter trying to understand, yes premium was up a little bit. Is it? Is it all rate that's driving the premium higher? Are you getting any unit count growth? It seems to me that at some point, you're going to the rate environments going to become more stable. And, ultimately in order to grow the business, we need unit count growth. And so I'm just trying to understand the balance between the two and your reported results.
Sure. So I know we tend not to continue to reiterate the point but when you look at premium this quarter, in General Insurance, you have to keep in mind that we're comparing those the first quarter of 2020, where there were still growth in those premiums, and it was pre-pandemic. So with the premiums fell commensurately with the reduction and exposures in the three quarters of 2020 as well as the first quarter of 2021. But we stopped we -- it but it bottomed out in the third and fourth quarters and start started to come back in the first quarter. So our view is that as the economy rebounds and reopens that exposure unit, particularly and workers compensation will increase fairly rapidly. And, like I say, once we get out into the second, third and fourth quarters and we're comparing those to 2020quarters, those premium levels, I think will be will be greater, perhaps significantly greater.
So we are seeing exposure return, as I say their workers compensation exposures bottomed out in the third or fourth quarter, what we saw in auto exposures were a drop off in the second quarter of 2020. And then, and then things have picked up in in auto exposures in the rest of last year, and again this quarter. So, exposures are definitely coming back, we would expect them to come back in a much more robust way, as we move throughout the year, and the economy continues to, to improve.
So, right now, it's a mixed bag, Greg, but the, what you're seeing in that, that increase is, is just the effects of coming off a reduced exposure base from 2020. And rebuilding that exposure base as we go forward. And then of course, you're getting, you're also getting lift from rate, but the exposure base is going to have much more of a contribution, the exposure base increase is going to have much more of a contribution to top line as we go through 2021 after the first quarter.
Got it. Craig, I think I sent you an email recently, and I think I in the email, I was just raising a question from one of your investors around the year home warranty and auto warranty business. And I think, now might be a good time for you to talk a little bit about it. I obviously understand relative to the three main coverages it's minor, but it might be worthwhile to let you give us an update on, over Republic's perspective on that business, why you think you're positioned to do well in that business, relative to this, a startup to one or two startups that are trying to make waves in that space.
Sure, sure. So, in both of those areas, the auto warranty and home warranty, we have continued to invest in technologies to improve our efficiencies and our customer service levels. Both are very strong, profitable business businesses for us. And I wouldn't, I wouldn't say that something that distinguishes us is we don't mass market, or call it as you might see on television, or what have you where you see home warranty and auto warranty companies, mass marketing and using that as their distribution channel, our distribution channels for auto warranty and Home Warranty are really point of sale. The majority of our partners on auto warranty, our dealerships, that and the various administrators that work with dealerships, and that will always be a an important distribution, touch point with the customer at the point of sale.
And similarly, our home warranty business distribution is key there as well. Even though as I say we're investing in technologies to improve the efficiency at which we manage that business price the business and how we distribute the product. But the -- our focus is there to a point of sale with realtors. Realtors are our key to that and it's another example of where there are synergies with our title business where key focus of their distribution is on real estate agents as well.
And in home warranty, that that is the focus. And here too, I don't believe that, that's going away. And we'll all point of sale will always be important. However, in both auto warranty and in home warranty, we're also looking at expanding our distribution, not necessarily to the mass marketing ways of some of the competitors that we all see when we watch television, but through other strategic relationship, making sure that that we expand our distribution approaches as well. So hopefully that answers your question, Greg.
That was, that was great color. Thanks. I guess. And I know, you've you talked about this upfront, Karl, about the and Craig, about the, no real change in your approach to the investment portfolio. One of the questions that pops up from time to time is, the equity exposure you have, and I know you guys are long term and strategic and all that. I'm just curious, based on the market returns in equities. And, if, if you're wondering if this risk reward is still there, in the near term, even though you might have long term confidence in some of those investments. Just curious how you're thinking about, those variables in the context of what we're watching in the market.
Well Greg, this is Karl. Let me let me take a crack at answering your question and Craig can fill in if necessary. But our objective really hasn't changed with respect to the equity portfolio. As we've stated on a few occasions, or that a key objective is to provide yield enhancement to the portfolio overall, above and beyond the yields that we can earn on the fixed maturity portfolio.
And we have selectively chosen a portfolio of something a little less than 100 securities, in companies that have a very long history of paying and steadily increasing their dividend payout ratio. So it's, it's an opportunity for us to invest and enhance investment income to a large extent with what we believe to be manageable risk. We do perform a number of stress tests at the company level overall, as well as for each of our subsidiaries that hold equity securities to ensure that under stress situations, our capital basis not significantly impacted in any negative way.
So you're right. It does introduce a greater degree of volatility at the net income line item. But, that's why our focus in explainer results tends to focus on operating income that excludes the mark to market on the equity portfolio.
Got it? Hey, thanks for the answers.
Sure.
Thank you, Greg.
Your next question comes from John Hinn [Ph] from Galleon Partners.
Hi, good afternoon. I just had maybe one or two quick number of follow up questions. On mortgage insurance, you said that the upstream dividend was $25 million, is that correct?
Yes, that is correct.
So that's on a stat surplus base of 100 and call it 120 at year end 2020. So that were you able to release some of the contingency reserve in that? Am I thinking about that correctly?
You are. Yes. Yes. I the number I mentioned earlier in my comments was the GAAP shareholders equity. The statutory capital, which would include the contingency reserve is in that same neighborhood $430 some odd million dollars. I don't have the exact number at my fingertips.
Now that's fine, but then presumably you're as I’m just looking back that's a higher dividend than generally can over the past four or five years. I mean, there's been a little bit coming up. So I would assume then is the is the risk and force running off a little bit quicker. Are you getting state approvable take down a contingency reserve faster? I’m sorry thinking about the risk of course one-off actually.
Yes, well, first of all, just just to clarify, we have not until the first quarter of last year received any dividends from our mortgage insurance companies for several years as far as I can remember. So we started last year and in the first quarter, receive the approval to pay $37.5 million before further return to capital were put on hold.
But secondly, your question regarding risk and force, we do include statistics in the financial settlement on page six that has a multi-year comparison of risk and force. And you can see that the run off is about 25% of any given year. And that continues, continues through the first quarter of this year. And since year end it’s about a 7.1%. decline annualized. It's more than 25%. But it's in that neighborhood. And it's been pretty consistent year-after-year.
Got it? So I can use that what's happened is a proxy to kind of model this out going forward for the risk in force.
I would think so.
Okay, thank you. And then the other one question entitled, approximately, I mean, how big is the commercial book of business? And I remember it’s somewhere around 18% being discussed that might have been several years ago at this point.
Carolyn, can you address that?
Right, for the first quarter of this year, it accounted for about 14.2% of our total premiums.
Is that roughly in line with what it is on an annualized basis?
No, that's down that it's down. About 10%.
Got it? So it's actually it's, it's actually 20% to 25% of the portfolio if I was to think about commercial.
Yes. Right, the first quarter of 2020, it was about 22.4%. Overall, it's generally around probably 18% to 20% on an annualized basis.
Got it. Perfect. That's, that's it for me. Thank you.
Thanks a lot, John.
Your next question comes from Boris Kuzmin from Crawford Investment Counsel.
Hey, guys, I just have a couple of questions. One on the General Insurance side, specifically, the commercial auto. The improvements in the claims ratio was great, after many years of kind of issues there, but I guess the question is, are you still getting a frequency benefit from kind of lower driving overall and how sustainable this improvement is? I guess, is the question.
Yes. Very good question. The there is a frequency benefit that continues. It's not as great as it was in the some of the prior periods in 2020. But it is a lower frequency. I would say in the low it right now. It's about 10% frequency reduction. I think at the height last year, we saw about a 20% frequency reduction. And then as I mentioned in my earlier comment, severity is still an issue. And unfortunately, the severity is offsetting the benefits of frequency.
So the reason that we're continuing to get rate increases in the 15% range is to continue we would expect frequency to return to a more normal level. And, and severity, we're not counting on any change in that trend. So we have to get that 15, 10% to 15% rate increase to address the on-going severity issues.
The last thing I would just say is, yes, the claim ratio has improved. And I know, quarter after quarter, we were talking about how hard we were working to try to get that down from the peak claim ratios of 2019, and 2020. And all of the things that we were doing, I think, are starting to show up. But I would just point out that when it comes to our both our loss ratio pick and when it comes to recognizing favorable development, we have a very patient approach, we're very slow to recognize favorable development on a longer tail line of business, like auto liability, and therefore, that that reduction that you see in the claim ratio is not one that's coming from a reduction of the current year claim ratio, or even the last few year claim ratios. So, to the extent that that there is some frequency benefit last year and continuing into this year, it'll be a while before we would recognize that in our results.
That’s it, appreciate that. And then another question for you, Craig, in your annual letter that's referred to an annual report, you mentioned that the stock price performance was I think you said the income growing with strong operating performance. So I guess the question is, why not have a buyback program in place or situation like this when your stock trades below book value and seemingly not reflecting the strong fundamentals of the business?
Right, so the income growing comment is certainly how we how we felt last year. I think our stock was not alone. Majority of others in the insurance and the broader financial sector value stocks, in particular dividend paying value stocks were not treated very kindly last year. So as we said, with those strong results, you would expect commensurate changes in in your price. And that didn't happen last year, but it was it was, I think, more of a result of broader market forces at work.
And with regard to the question on buyback, we, we also have, in addition to that 2020 annual report letter that you just mentioned, we also issued a letter that's available on our website, on January 6. And in that letter, we try to lay out for our shareholders, our thought process on capital management. And, I would refer you, perhaps back to that letter, and I think…
But I guess that letter didn't really address buybacks versus dividends. You guys outline why you pay the special dividend, which no one is arguing about in terms of you having capital to do that, but wouldn't it have been better to do a buyback as to you know, it could have been immediately accretive to book value in earnings as opposed to paying out a special dividend.
Yes, we you know, we're aware that some of our shareholders have raised that question and the matter is the subject matter currently before our board and the board is going to address that issue at its upcoming May meeting, after which time we expect themselves to provide a written response to that question.
Okay, thank you.
[Operator Instructions] Your next question comes from Ryan Winrick from Guggenheim
.
Hello, just a quick one. I noticed almost all of your other miscellaneous debt was extinguished or matured this quarter. So I wanted to ask about that. And then have you provided a long term guidance range for your debt-to-capitalization ratio. That's all. Thanks,
Ryan, this is Karl. First of all, we had a very small balance of debt bank issued note that matured in the first quarter of this year, so that's what's driving the decline since year-end. Yes, we do set parameters for ourselves what we refer to as our year-end metrics. And generally speaking, the range that we try to operate within is 10% to 25% debt-to-equity or debt-to-capital ratio. And we're well within that trending towards the lower end, currently.
Great. Thank you.
That was our last question at this time. I will turn the call back over to management for closing remarks.
Okay, while we appreciate the interest by everyone, appreciate the dialogue and the questions, and, again, we are thrilled with the operating results that we put forth for year end 2020 and then the continuation of extremely strong operating results in the first quarter of 2021. So, thank you all for your participation. And we look forward to talking to you again next quarter. Thank you.
This concludes today's conference call. Thank you for participating. You may now disconnect.