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Community Healthcare Trust Inc (CHCT) Q4 2020 Earnings Call Transcript

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CHCT earnings call for the period ending December 31, 2020.

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Community Healthcare Trust Inc (CHCT -0.66%)
Q4 2020 Earnings Call
Feb 17, 2021, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Welcome to Community Healthcare Trust 2020 Fourth Quarter Earnings Release Conference Call. On the call today the company will discuss its 2020 fourth quarter financial results and also discuss progress made in various aspects of the business. Following the remarks the phone lines will be opened for a question-and-answer session. The company's earnings release was distributed last evening and has also been posted on its website www.chct.reit.

The Company wants to emphasize that some of the information that may be discussed on this call will be based on information as of today, February 17, 2021, and may contain forward-looking statements that involve risk and uncertainty. Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, you should review the company's disclosure regarding forward-looking statements in its earnings release as well as its risk factors and MD&A in its SEC filings. The Company undertakes no obligation to update forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required by law.

During the call, the company will discuss GAAP and non-GAAP financial measures. A reconciliation between the two is available in its earnings release, which is posted on the website.

Call participants are advised that this conference call is being recorded for playback purposes. An archive of this call will be made available on the company's Investor Relations website for approximately 30 days and is the property of the company. The call may not be recorded or otherwise reproduced or distributed without the company's prior written permission.

Now, I'd like to turn the call over to Mr. Tim Wallace, CEO of Community Healthcare Trust Incorporated.

Timothy G. Wallace -- Chief Executive Officer and President

Good morning and thank you for joining us today for our 2020 fourth quarter and year-end conference call. On the call with me today is Dave Dupuy, our Chief Financial Officer; and Leigh Ann Stach, our Chief Accounting Officer.

As is our normal process, our earnings announcement and supplemental data report were released last night and filed with an 8-K and our quarterly report -- actually our annual report on Form 10-K was also filed last night.

We had a busy quarter both from an operation standpoint and from an acquisition standpoint. Now the obligatory COVID discussion. Healthcare providers have been impacted by the COVID-19 pandemic, some saw a reduced number of procedures and/or patient visits. However, most of our tenants operations are basically back to pre-pandemic levels. As of December 31, the company had remaining rent deferral agreements with two tenants representing less than $100,000. Our receivables are in the best shape they have been in the company's history. Our asset management group has done a great job related to COVID-19.

Now to more normal items. As you know, we have an active ATM program in place. During the fourth quarter the company issued 480,592 shares of stock through its ATM program at an average gross sales price of $47.65 per share. We received net proceeds of approximately $22.4 million at an approximate 3.64% current equity yield. During the fourth quarter, we acquired 10 properties with a total of approximately 216,000 square feet for a purchase price of approximately $67.9 million. These properties were 100% leased with leases running through 2039 and anticipated annual returns of 9.45% to 9.9%. This brings our acquisitions for the year to approximately $127.2 million.

So far in this quarter, through February 16, the company has acquired four properties totaling approximately 80,000 square feet for an aggregate purchase price of approximately $17.8 million. Upon acquisition, the properties were 100% leased with lease expirations through 2036. In addition, the company provided a $6 million term loan to a $4 million revolving line of credit to the tenant on two of the properties. The Company has three properties under definitive purchase agreements for an aggregate expected purchase price of approximately $46.4 million and expected aggregate returns of approximately 9.1% to 9.43%.

The company is currently performing due diligence and expects to close these properties either late in the first quarter or early in the second quarter. We continue to have many properties under review and have term sheets add on several properties with anticipated returns of 9% to 10%. We anticipate having enough availability on our credit facilities to fund our acquisitions and we expect to continue to opportunistically utilize the ATM to strategically access the equity markets.

Our weighted average remaining lease term moved over eight years for the first time at almost 8.1 years. Occupancy was basically flat for the quarter as leasing activity was somewhat muted due to the challenges caused by COVID-19. However, we are encouraged by the activity we see on the part of healthcare providers. On another front, we declared our dividend for the fourth quarter and raised it to $42.75 per common share. This equates to an annualized dividend of $1.71 per share. And I continue to be proud to say we have raised our dividend every quarter since our IPO.

I believe that takes care of the items I wanted to cover, so I will hand things off to Dave to cover the numbers.

David H. Dupuy -- Executive Vice President and Chief Financial Officer

Thanks, Tim and good morning, everyone. Despite the headwinds associated with the pandemic, we continue to see strong growth in our business. I'm pleased to report that total revenue for 2020 was $75.7 million compared to $60.8 million for 2019, representing 24.4% growth over the prior year. Meanwhile, total revenue for the fourth quarter of 2020 was approximately $20.1 million versus the $16.8 million for the same period in 2019, representing 20% growth over the fourth quarter of 2019. And on a pro forma basis, if the 2020 fourth quarter acquisitions had occurred on the first day of the fourth quarter, total revenue would have increased by an additional $333,000 to a pro forma total of $20.5 million in the fourth quarter.

From an expense perspective, property operating expenses increased year-over-year from $12.2 million in 2019 to $13.6 million in 2020 or 11.3%. And during the fourth quarter, property operating expenses grew from $2.8 million in 2019 to $3.5 million in 2020 or 22.7%. The increase in property operating expenses is in line with the growth we are experiencing in total revenue, period over period. For the year, G&A increase from $7.7 million in 2019 to $8.8 million in 2020 or 13.6%. And in the fourth quarter, G&A increased from $2.1 million in 2019 to $2.5 million in 2020 or 16.9%. Increases in G&A were driven primarily by increases in amortization of deferred compensation and new employee-related costs we had in 2020.

Interest expense declined year-over-year from $9.3 million in 2019 to $8.6 million in 2020 or 7.3%. The decrease in interest expense related to the effects of the Fed's cuts -- cut in rates during the pandemic, coupled with our improved leverage profile, resulting in a more attractive pricing tier under our bank facilities. And notably for the year, our debt to total capitalization was 28.5%, a very conservative level. Our net income increased from $8.4 million in 2019 to $19.1 million in 2020 or 127.8%. For the quarter, net income grew from $2.2 million in 2019 to $5.2 million in 2020 or 137%. If you adjust it for the deferred income tax expense recognized in the fourth quarter of 2019, the annual and quarterly net income growth would have been 94.5% and 44.2% respectively. We attribute these strong results to the operating leverage we are developing in our platform.

Finally, I'm pleased to report that funds from operations for the fourth quarter grew from $9.5 million or $0.47 per diluted share in 2019 to $12.2 million or $0.53 per diluted share in 2020. Adjusted funds from operations, AFFO which adjusts for straight-line rent and stock-based compensation increased from $9.9 million or $0.49 per diluted share in the fourth quarter of 2019 to $12.9 million or $0.56 per share in the fourth quarter of 2020. And from a pro forma perspective, if all the fourth quarter acquisitions occurred on the first day of the fourth quarter, AFFO would have increased by approximately $298,000 to a pro forma total of $13.2 million, increasing AFFO to $0.57 a share.

That's all I have from a numbers perspective. Nick, we are ready to start the question-and-answer session.

Questions and Answers:

Operator

[Operator Instructions] First question comes from Alexander Goldfarb with Piper Sandler. Please go ahead.

Alexander Goldfarb -- Piper Sandler -- Analyst

Hey, good morning. Good morning, Tim and Dave.

Timothy G. Wallace -- Chief Executive Officer and President

Good morning.

Alexander Goldfarb -- Piper Sandler -- Analyst

First off on the -- good morning. Tim, it hames me to say that to congratulate you publicly, but 340% total return and the chart that you have in the supplemental is pretty impressive. So kudos to you and your team on that. I do have two questions to ask. First is, can you just give a bit more color on the property that you bought, where you made the loan to the tenant on two properties, the term loan and then the line of credit. Basically a little bit more color around this and whether or not, this is something more of a specific nature? Or if this is something that increasingly, we're going to see with some other acquisitions that you guys have planned.

Timothy G. Wallace -- Chief Executive Officer and President

Sure. And thanks for the question, Alex. No, it's not something you're going to see generally, this is a kind of special situation. We had several properties, two or three properties with this tenant. We like the management team. We like what they're doing, they were growing before the pandemic. They had several projects in the process when the pandemic hit. And they're one area in our portfolio that that got hit a little bit, their geriatric psych is what they are. And so basically we looked at where they are at this point, all their staff has been vaccinated. Most of their population -- the tenant population and potential patient population have been vaccinated. So we think they're going to come out extremely well.

And they're in kind of a different situation because they've outgrown their small bank, but not quite to the big bank stage. So we saw this as an opportunity to be a win-win for them, for us, because we're making some excellent returns on it. And if you look at the overall company based upon the numbers, it's probably a little over 1x levered. So we like situations where you can do stuff, that's 1 to 2x levered and you make returns like what we anticipate making. But it's not something you're going to see every day. It is a really unique situation.

Alexander Goldfarb -- Piper Sandler -- Analyst

But more to that point, what are the returns? And then it does seem like you have been willing from time to time to step into use your balance sheet to bridge tenants through. So one, what are the returns? Then two, it does seem like it is, sort of part of your arsenal that you do use from time to time.

Timothy G. Wallace -- Chief Executive Officer and President

Well, I don't know that I'd call it part of the arsenal. I mean, it is something that we do. I mean, we try to manage it. I mean, one of the things that, that made us feel comfortable doing this is AMG refinance. So we've got them now set for awhile, but they paid that loan down to $15 million, put it on self-amortizing and there's no prepayment. So we've got that kind of sitting there. The terms on this and I forget exactly, but I think it's a 9% current pay with a 3% accrual. And it amortizes, if they don't pay it off early, which the anticipation is they'll end up getting a bank loan in a year or two and paying it off. But I think it amortizes over five years or something.

David H. Dupuy -- Executive Vice President and Chief Financial Officer

That's right.

Timothy G. Wallace -- Chief Executive Officer and President

So it's still amortizing over five years. But we anticipate it will be paid off in a year or two.

Alexander Goldfarb -- Piper Sandler -- Analyst

Okay. And then my second question is...

Timothy G. Wallace -- Chief Executive Officer and President

And let me say this, the only thing they've drawn is the term in...

David H. Dupuy -- Executive Vice President and Chief Financial Officer

A $150,000.

Timothy G. Wallace -- Chief Executive Officer and President

$150,000 on the revolver, and we don't anticipate the revolver ever being significantly drawn.

Alexander Goldfarb -- Piper Sandler -- Analyst

Okay. And then the second question is, just with COVID, it would seem like there's a huge everything we read in the press, huge need for mental health, substance abuse and all of that. Are you seeing whether it's existing properties or with your pre-sales with your developer partners? Are you seeing growth in that area for investment? Or is that something that gets a lot of press headlines, but as far as it translating to business opportunity for you guys, not really seeing it yet?

Timothy G. Wallace -- Chief Executive Officer and President

Well, and the problem with behavioral is, it's such a wide description because it covers everything from autism to opioid to geriatric psych, which is what we were just talking about with this tenant to inpatient acute psych. And the answer to the question is, it was growing before the pandemic, because of several things. It was way under bedded through the 1990's as reimbursements were cut and then the beds had been coming back. And as Obamacare basically said, if you had short-term acute care benefits, you had to have site benefits.

So it's been coming back for some time and there's been a lot of money thrown at different areas of behavioral, such as [Indecipherable] I'm going to spend billions of dollars at the opioid situation over the last few years. And our biggest problem is trying to sort through and see which ones are really valid, which ones have long-term legs, etc. But I will say this, the pandemic has multiplied that and all of our outside facilities are doing well from that standpoint. And we have seen a lot of psych opportunities over the last 12 to 18 months.

Alexander Goldfarb -- Piper Sandler -- Analyst

Okay. Thank you, Tim.

Timothy G. Wallace -- Chief Executive Officer and President

Thanks, Alex.

Operator

Thank you. Next question is from Sheila McGrath with Evercore. Please go ahead.

Sheila McGrath -- Evercore ISI -- Analyst

Yes. Good morning. Tim or Dave, that balance sheet is very strong operating at net debt to EBITDA in the 3's. Just wondering what your target leverage level is? And do you envision bringing that up a little bit higher this year?

Timothy G. Wallace -- Chief Executive Officer and President

Well, our target leverage levels haven't changed since we came public and basically what we said then, in the long-term, we wanted to be 30% to 35% of our capital, but capital to be debt with 65% to 70% being equity. It is on the low side now and you should not be surprised if you see us raise the amount of debt. I'm not going to say that we're going to significantly change the percentage as it relates to the overall, but you shouldn't be surprised if you see the amount increase as we increase our overall balance sheet.

Sheila McGrath -- Evercore ISI -- Analyst

Okay, great. And then just a little bit more clarity on the $42 million closings this year. I think you said, probably first quarter, just give us a little bit more insight on potential timing if those are almost complete.

Timothy G. Wallace -- Chief Executive Officer and President

Our best estimate right now is that there's a -- there's several parties in the transaction that's happening and one of the parties wants it to close on the first of the month. So it will either probably close on March 1 or April 1. And we're not in control of that at this point, we think hopefully March 1, but it could be April 1.

Sheila McGrath -- Evercore ISI -- Analyst

Okay. And last question for me. You have a great consistent track record of bumping the dividend every quarter, since the IPO. Now your payout ratio is pretty conservative, I guess, you're retaining some cash flow for investment. Just curious, if you plan on being consistent with the modest increase every quarter, or since the payout is conservative, if you would entertain a larger dividend increase?

Timothy G. Wallace -- Chief Executive Officer and President

Obviously that's up to the Board. But I will say at this last Board meeting that that topic did come as part of the discussion. And if we meet our internal projections for the next year, then there's a good likelihood. We will bump the size of that increase on a quarterly basis. But we want to always maintain a conservative approach to our payout ratio and make sure that there's plenty of cash to pay the dividend.

Sheila McGrath -- Evercore ISI -- Analyst

Okay, great. Thank you.

Timothy G. Wallace -- Chief Executive Officer and President

Thanks, Sheila.

Operator

Thank you. Next question is from Nate Crossett of Berenberg. Please go ahead.

Nate Crossett -- Berenberg -- Analyst

Hey, good morning, guys.

Timothy G. Wallace -- Chief Executive Officer and President

Good morning, Nate.

Nate Crossett -- Berenberg -- Analyst

Maybe you can just help us size the acquisition pipeline outside of what you've already announced? Kind of what's the size of the deal funnel right now? And then just had a question on pricing and yield. It's been consistently above 9% for the last several years. Are you seeing anything that would change that kind of targeted range this year.

Timothy G. Wallace -- Chief Executive Officer and President

Nate, you should know us enough by now to know that we're boring this company around, so we don't change much. Our target goal for acquisition is still $120 million to $150 million a year. We've always said, it's lumpy, sometimes it's lumpy early in the year, sometimes it's lumpy late in the year. But our goal is to shoot for $120 to 150 million. Now, in any given year, maybe it's $160 million, but that's kind of our sweet spot and what we would like to say everybody to model in. As it relates to returns, we have never done anything below a 9% return and don't anticipate doing anything below the 9% return. So that kind of covers that. Like I said, we're boring, we don't change a lot.

Nate Crossett -- Berenberg -- Analyst

Hey, well, the stock is doing well, so boring is good. What about just tenant concentrations? HealthVest is over, I think 11%, Everest is 9%. Is there a certain threshold on the upper bound that you don't want to go above and would that impact what you'd be willing to acquire?

Timothy G. Wallace -- Chief Executive Officer and President

We have investment guidelines that have been in place since the beginning that that kind of puts us in -- keeps us in between the digits both geographic diversification, tenant diversification and industry segment diversification. And basically what that says is, no tenant will ever be over 20%. Now, we don't like -- actually we don't like tenants being in double digits. As HealthVest has been a good client. They're very good operator and the big lumps. I mean, I think the last deal we did with them was $30 million. So they're big lumps. So they ended up being over 11%. Now we try to manage that. We'll -- we don't want to turn down good projects from good clients, but sometimes we do, do that just to manage that tenant diversification. So, I'd say 11%, it's about as high as you'll see happen in the portfolio hopefully. And they're good tenants, so it's really hard to turn them down sometimes.

Nate Crossett -- Berenberg -- Analyst

Okay. That's helpful. And then maybe just one last one, lease expirations for this year, renewal spreads, we assuming it to be kind of flattish or what -- how are the discussions, I guess, going with those tenants?

Timothy G. Wallace -- Chief Executive Officer and President

Yes. I mean, we've always said that we feel like basically, if you look at the portfolio we're plus or minus market rate. And that's still the way we feel. And that's the way that we see most of the renewals happening is basically a market type of rate that's maybe 1%, 1.5% inflation based increase. So we're not going to -- you're not going to see us say that we've got 5% renewal increases or anything like that.

Nate Crossett -- Berenberg -- Analyst

Okay. That's helpful. Thank you.

Timothy G. Wallace -- Chief Executive Officer and President

Thanks, Nate.

Operator

Thank you. Next question comes from Gaurav Mehta, National Securities. Please go ahead.

Gaurav Mehta -- National Securities -- Analyst

Yes. Hi, good morning. A question on the vacancy that you have in your portfolio. I was hoping that you could talk about where some of the largest vacancy in your portfolio. And then is there any opportunity to throw some of that up?

Timothy G. Wallace -- Chief Executive Officer and President

Is there any opportunity to what now?

Gaurav Mehta -- National Securities -- Analyst

To maybe increase the occupancy in your portfolio?

Timothy G. Wallace -- Chief Executive Officer and President

We try to lease property every day. I mean, our asset management group is on that. Last year during the pandemic, leasing was pretty tough because healthcare providers didn't have enough bandwidth to focus on operating their business much less leasing space. The asset managers tell me that that they're having a lot more success talking to and getting interest in healthcare providers and leasing additional space already this year. So we're hopeful that we'll see a pickup in leasing. But I think, overall, if you look at our occupancy on a year-to-year basis, if you consider that we just came through the pandemic and what all that's done to a lot of people's occupancies, we look pretty good.

Gaurav Mehta -- National Securities -- Analyst

Okay. Thank you. That's all I had.

Timothy G. Wallace -- Chief Executive Officer and President

All right. Thanks.

Operator

Thank you. Next question is from Amanda Sweitzer with Baird. Please go ahead.

Amanda Sweitzer -- Baird -- Analyst

Thanks. Good morning, guys. Wanted to start on some of your recent transaction activity. Can you just provide some additional in GenesisCare portfolio acquisition? How did the transaction come about? And then do you see any additional portfolio acquisition opportunities in the near-term?

Timothy G. Wallace -- Chief Executive Officer and President

Good morning, Amanda. We don't generally look for portfolio acquisitions, because generally we find that there's stuff in there that we don't necessarily like. This was kind of a unique situation. I don't know, if you know that much about the history of GenesisCare, but basically it was 21st Century Oncology. They went through a bankruptcy, they went through a management shakeup. GenesisCare is an Australian healthcare company backed by...

David H. Dupuy -- Executive Vice President and Chief Financial Officer

KKR.

Timothy G. Wallace -- Chief Executive Officer and President

KKR. And it is putting, I think $300 million into the platform to expand it. So it provided some unique step. The Chief Operating Officer of GenesisCare actually lives in Franklin here. So we've been able to have some personal dialogue with him and we're hopeful trying to develop them into a client. But it's kind of a unique situation and we're not looking to do portfolio size transactions.

Amanda Sweitzer -- Baird -- Analyst

That's helpful and kind of what I figured. And then secondly, a bit more of a hypothetical question, but just with some of the increase in M&A and liquidity in the market broadly. Do you expect to see some of your tenants get acquired this year and potentially resulted in increase in credit quality? Are there any other ways kind of the increased investment in the healthcare sector may benefit you?

Timothy G. Wallace -- Chief Executive Officer and President

Actually, you've been seeing that -- a lot of the not-for-profits have been consolidating over the last 12 to 18 months, and it's been kind of quiet. But a lot of that's been happening. But yes, we do anticipate acquisitions. There's a lot of activity now in the market in sort of all the different areas that we're involved in. And we do anticipate that. And a lot of our investments -- several of our investments, particularly with our clients with the anticipation that that would happen at some point in time. Some of it's happening sooner than we would've thought, but others will happen over time, we believe.

Amanda Sweitzer -- Baird -- Analyst

Thanks. That's it for me. I appreciate the time.

Timothy G. Wallace -- Chief Executive Officer and President

Thanks, Amanda.

Operator

Thank you. Next question is from Robert Stevenson of Janney. Please go ahead.

Robert Stevenson -- Janney -- Analyst

Hey guys. Tim, back to your diversification commentary, the acute inpatient behavioral facilities now its roughly 20% of annualized rent. Do you have an upper boundary where you'd want to take that exposure in the aggregate?

Timothy G. Wallace -- Chief Executive Officer and President

It's at a point where -- I'll say this, but I won't say that we wouldn't do anything else right now. But it would have to be very nice property with very good terms versus do it now. I mean, we're kind of never say never, but it's hitting on that range.

David H. Dupuy -- Executive Vice President and Chief Financial Officer

But what I would also say is, we're also very active in other sectors right now and our pipeline is such that as we move through that pipeline, I think you'll see that come down.

Robert Stevenson -- Janney -- Analyst

Okay. That's helpful. And then, Dave, how are you thinking about incremental G&A that you need to handle acquisition volume and generally run the company over the next year? I mean, any material increases expected over 2020 levels?

David H. Dupuy -- Executive Vice President and Chief Financial Officer

I think that's one of the powers we're seeing in the platform as we've gotten to a certain size. Yes, we're going to have to add incrementally to our accounting staff. And there are other folks within our asset management team that will want to selectively add to the team. But the reality of it is, we really don't have big needs in order to incrementally grow the business and the platform. And so as -- I think what you'll continue to see is G&A not growing as fast as it has historically, and especially relative to our revenue growth. So that's what I would -- that's how I would guide you.

Timothy G. Wallace -- Chief Executive Officer and President

Yes. One thing I'd like to point out on that too, because I just recently had a email discussion with one of our analysts on it. But I'd like to remind everybody that if you look, we put it in the supplemental now, but 55% of our G&A in the fourth quarter was amortization of stock-based compensation. And that's not deferred compensation. There's never a cash effect from that compensation. The stock, the shares are already in our outstanding shares number through that calculation. So basically that's one of the reasons why we think that AFFO in our situation is by far the best measure because that stock-based compensation will never have a cash effect and is already counted in the outstanding shares.

Robert Stevenson -- Janney -- Analyst

Okay. And then Dave, I mean, just close the loop in terms of the additions that you may need this year and maybe early next year. Are those more along the lines of your sort of median employee pay from the supplemental or they're going to be any sort of higher compensation individuals that you'll need to bring in?

David H. Dupuy -- Executive Vice President and Chief Financial Officer

No. I think what you'd find over the next year, it sort of track along with our median employee.

Robert Stevenson -- Janney -- Analyst

Okay. Helpful, guys. Thanks.

David H. Dupuy -- Executive Vice President and Chief Financial Officer

Thank you.

Timothy G. Wallace -- Chief Executive Officer and President

Thanks, Rob.

Operator

[Operator Instructions] Next question is from Bryan Maher, B. Riley FBR. Please go ahead.

Bryan Maher -- B. Riley FBR -- Analyst

Good morning. Just two questions. One on occupancy. I know it only went down about 20 bps in the quarter. But when we go back and look at the transcript for the third quarter earnings call, I think you mentioned that you thought it would pop back up in the fourth quarter. And considering that the property you bought in the fourth quarter were 100% leased. We were a little surprised with the occupancy degradation. Is there any color you can share with us there?

Timothy G. Wallace -- Chief Executive Officer and President

Basically, when we were talking with the third quarter call, things had started to loosen up a little bit, but then we had a surge in the pandemic, surge in the virus. And all of a sudden providers pulled back in. So, I mean, it was definitely an environmental type effect. And again, overall we feel very comfortable with where the occupancy is. And our leases that we have to release are at like 5% for this year, are the lowest in our history from an annual releasing need standpoint. So we feel like we've kind of playing down on it and the asset management group is very focused on leasing stuff, as long as we can keep providers focused on it.

Bryan Maher -- B. Riley FBR -- Analyst

Great. And then as it relates to all of the press out there with people moving from here in the Northeast down to Florida and other low tax states, has that changed your view on where you want to look at assets at all? Or is it still status quo?

Timothy G. Wallace -- Chief Executive Officer and President

Yes. I'm not sure at this point how much that is -- and actually, I don't think how much that is in reality or basically depressed needing something to talk about. So far we haven't seen that much. I mean, it's very early in the process. But to make it significant, it would have to be a lot of people doing it. And so far we haven't seen that. I mean, we have a good mixture. We're in 33 states now. I think it is everything from mostly in the Midwest to the Southeast or the Southwest. If you look, I think Florida, Ohio, Texas are some of our biggest states. And so, I would anticipate probably something very similar continuing.

Bryan Maher -- B. Riley FBR -- Analyst

Well, having sold my New Jersey house and heading South, like many of my friends and colleagues, I can assure you that it is real.

Timothy G. Wallace -- Chief Executive Officer and President

Well, good. Come on down. Right now we're like 15 degrees and have 4-inches of snow on the ground.

Bryan Maher -- B. Riley FBR -- Analyst

Thanks, Tim.

David H. Dupuy -- Executive Vice President and Chief Financial Officer

It maybe Florida.

Operator

This concludes our question-and-answer session. Now I'd like to turn the conference back over to Tim Wallace for closing remarks.

Timothy G. Wallace -- Chief Executive Officer and President

Thanks, Nick. And we'd like to thank everybody on the call for spending time with us and being interested and thanks for the continued support. And we'll talk to you in a quarter. Thanks.

Operator

[Operator Closing Remarks]

Duration: 36 minutes

Call participants:

Timothy G. Wallace -- Chief Executive Officer and President

David H. Dupuy -- Executive Vice President and Chief Financial Officer

Alexander Goldfarb -- Piper Sandler -- Analyst

Sheila McGrath -- Evercore ISI -- Analyst

Nate Crossett -- Berenberg -- Analyst

Gaurav Mehta -- National Securities -- Analyst

Amanda Sweitzer -- Baird -- Analyst

Robert Stevenson -- Janney -- Analyst

Bryan Maher -- B. Riley FBR -- Analyst

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