Q3 2021 OceanFirst Financial Corp Earnings Call
Welcome everyone to Ocean First Corp earnings Conference call. My name is Victoria, and I'll be quality of coal today, if you'd like to ask a question. During the presentation you might you slipped by pressing star one on your telephone keypad I'll now hand over to your house Jill Hewitt from Asia first.
To begin Zhou. Please go ahead.
Thank you Victoria Good morning, all and thank you for joining us I'm, Jill Hewitt Senior Vice President and Investor Relations Officer at Ocean First financial Corp.
We will begin this morning's call with our forward looking statement disclosure.
Please remember that many of our remarks today contain forward looking statements based on current expectations.
Refer to our press release and other public filings, including the risk factors in our 10-K, where you will find factors that could cause actual results to differ materially from these forward looking statements.
Thank you and now I will turn the call over to our host Chairman and Chief Executive Officer, Christopher Maher.
You Jill and good morning to all been able to join our third quarter 2021 earnings conference call today.
This morning, I'm joined by our President, Joe Labelle, Chief Financial Officer, Mike Fitzpatrick.
As always we appreciate your interest in our performance and are pleased to be able to discuss our operating results with you.
This morning, we'll cover our financial and operating performance for the quarter.
Provide some color regarding the outlook for our business.
Please note that our earnings release was accompanied by an investor presentation that is available on the company's website.
May refer to these slides during the call.
After our discussion when we look forward to taking your questions.
In terms of financial results for the third quarter GAAP diluted earnings per share were 39 cents.
Earnings reflect the continuing economic recovery.
The bank demonstrating material loan growth pick up in net interest income and a committed loan pipeline that indicates that our commercial banking expansion continues to gain traction.
Credit quality improved again with the company posting exceptional nonperforming asset and delinquency figures, which drove a $3 $2 million negative provision for the quarter.
Core earnings were somewhat stronger than GAAP earnings at <unk> 45 per share as branch consolidation expenses totaled approximately $4 million on a pretax basis.
The branch consolidation plan announced as part of our Investor Day in August remains on track with 10 locations scheduled for consolidation in December and the remaining locations scheduled for January of 2022.
In addition, the sale of two branches has received regulatory approval and should settle in early December.
Regarding capital management, the board declared a quarterly cash dividend of 17 cents per common share at approximately 44 cents per depository share of preferred stock.
The common share dividend as the company's 99th consecutive quarterly cash dividend.
The 17th sent common share dividend represents just 38% of core earnings.
Given the robust outlook for loan growth, which will be discussed later in the call.
It to maintain the current dividend level as we evaluate our ability to deploy internally generated capital.
Over the past year, maintaining a conservative dividend payout ratio is about tangible book value per share to increase by $1.20 an increase of eight 2%.
Tangible stockholders' equity to tangible assets decreased slightly to $8 seven 8%.
Deposit growth of $359 million increased the balance sheet to $11.8 billion.
Our balance sheet remains inflated as we carried approximately $1 billion of cash at quarter end.
But the cash is now trending down as loan and securities growth increases.
The deployment of cash accelerated through the quarter with the majority of loan growth occurring in September.
The fourth quarter will benefit from a full quarter of elevated earning assets.
The company's share repurchase activities continued during the third quarter with approximately 460000 shares repurchased.
On a year to date basis. The company has repurchased 1.460 million shares at a weighted average price of $20.98.
There are three 3.559 million shares available under the current repurchase program were 6% of the total shares outstanding.
Operating expenses were elevated during the quarter as we completed two significant core systems conversions.
The conversion of our main core banking platform and the systems integration of the former country Bank operation in New York.
We also had additional work related to the sale of two branches and the ongoing branch consolidation project.
These activities and a few other unusual items added approximately $1.5 million of expenses in the third quarter.
As we move into the fourth quarter these expenses should moderate.
The sale of two branches in the consolidation of 10 additional locations in December will also provide a tailwind for operating expenses this quarter.
Before I turn it over to Joe I will note the company's preparations for an inflationary period and the potential impact of interest rate movements.
Our expanded Investor presentation, which was filed with our earnings release last night provides detailed information regarding several important areas, including credit quality and interest rate risk positions.
Among the disclosures as a quantitative comparison of the bank's asset sensitivity versus national banks with more than $10 billion in assets.
As the charts demonstrate in a rising rate environment, our balance sheet is well protected against rising interest rates should they materialize.
One key factor is that our deposit beta in the last rising rate cycle was just 50% of our peers.
In addition, our emphasis on the origination of floating rate loans forego short term income in favor of a better protect the balance sheet.
Joe will discuss that in more detail.
At this point I'll turn it over the call over to Joe for a discussion regarding progress this past quarter, including an update on the expansion of our commercial bank.
Thanks, Chris.
Loan originations of $772 million were the highest on record for the company.
Commercial originations of 585 million also set a record.
More importantly, we saw loan closings from our new geographic regions of Baltimore, and Boston with continued strength in our core markets in New Jersey, Philadelphia, and New York.
Even after record originations, we entered Q4 with a committed pipeline of $651 million, an all time high and fully expect momentum to continue as we are just hitting our stride in our new markets as we build brand awareness through the lending teams.
Excluding P P P forgiveness of $31 million.
Record originations led to loan growth loan growth of 392 million, which included $179 million in organic commercial growth in our residential pool purchase of $220 million.
The remaining P. P. P portfolio totals just 53 million as of September 30th.
So it won't drag against loan growth in the coming quarters.
The residential pool purchased occurred on the last day of August and the bulk of the commercial growth in late September. So we will see the benefit of the added interest income in Q4 and beyond.
We closed over $100 million in construction projects year to date in our newly created construction vertical.
And initial fundings were less than 13 million or 12% of originations.
As these projects mature we will see the benefit of stronger interest income from larger outstanding loan balances.
We remain bullish on our core residential business, which continues to Hum along and is only restricted by limited housing inventory in the market.
The liquidity on the balance sheet fueled by continued deposit growth influenced our decision to buy a residential pool.
This pulls comprised of residential loans disbursed throughout the country.
We bought pools in the past and we'll continue to look for supplemental purchases to soak up some of our excess liquidity diversified credit risk and build interest income.
While our preference is to use our liquidity to fund commercial activity as evidenced by the loan originations.
Our focus is putting the cash to work in rapid fashion.
Our asset sensitivity, which will bode well in a rising rate environment gives us some flexibility to purchase some fixed rate residential paper, putting our liquidity in play.
The pool purchase of 221 million only resets our residential loan portfolio size to where it was back in September 2020.
And I'll note that $396 million of our commercial originations in the quarter were floating rate loans, which should carry some upside in mid to late 'twenty two and beyond.
Our deposit increase of $359 million for the quarter is low yielding and had the effect of reducing our cost of deposits.
Core deposits, excluding Cds grew $460 million.
This reflects continuing proven deposit continuing improving deposit quality.
As a result, our cost of deposits sit at 22 basis points almost a record low for the company.
We still see the cost of deposits trending lower as we are.
Have over $125 million in Cds maturing in Q4.
And another $176 million in the first quarter of 2022.
I do expect some deposit run off in Q4 due to seasonality, but nothing meaningful.
Core NIM improved quarter over quarter by four basis points.
And we see modest continued improvement moving forward.
On the expense line exclusive of the branch consolidation expenses we.
We had elevated professional and data processing expenses, partly related to the core conversion.
Which should reverse and improve the Q4 run rate as.
As well the branch consolidation savings in 2022.
The branch consolidations in the two branch sales remain on track with regulatory notice requirements and approvals for the sale of the branches impacting the timing of the process.
The ultimate expense saves will be seen beginning in Q4 and.
In Q1, 2022 as branches sell or close.
With that I'll turn it back to Chris.
Thank you Joe at this point, we'll move to the question and answer portion of the call.
Thank you Christine we'll now start the Q&A session. As a reminder, if you would like to ask a question. Please press star followed by one your telephone keypad now if you do change your mind. Please press star followed by Chi to withdraw your question. Please ensure that you want.
Needs at like clean our first question comes from Frank Schiraldi from Piper Sandler.
Please go ahead.
Good morning.
Good morning, Frank.
Wanted to ask on EM.
Specifically on <unk>.
Some of the expansion markets like Boston and Baltimore, if he can provide.
You know where you are in footings in those areas.
And what the pipeline looks like.
So we're happy Boston and Baltimore Footings are in the 50 million range each.
Year to date and pipelines for those are pretty substantial that are changing everyday Frank I can get back to you with that number specifically, but we're just we're just really touching the fringes here I think the momentum has been a significant especially for our especially for the new market. So we're pretty bullish.
Okay, and then just given where you are seeing pay downs, obviously pretty elevated it sounds like you anticipate.
You know some of the excess cash could get chopped up.
Additional Ramsey.
On purchases is that somewhat more likely than then build in the securities book or how should we look at that from a modeling standpoint.
I think that's right Frank you know the the residential portfolio has not typically been a growth portfolio for us, but we do like the way that it moderates our risk position across the balance sheet. So the purchases we made in the third quarter kind of as Joe mentioned brought us back to where we were about a year ago.
We might trying to engineer some modest growth in the residential book, but it wont be growing anywhere near as quickly as the commercial loan book.
The other thing is as you point out although we did deploy some liquidity into securities in the third quarter, who may do a little more in the fourth quarter.
Ultimately, we like most of the liquidity to go into the loan book.
Gotcha, Okay, and then just finally, if I could just on expenses you know you talked a bit about the elevated levels.
The tailwind going forward is there I'm just wondering if you could remind us you know.
It's on.
Expense base on a quarterly run rate as we get into say <unk> 'twenty two after branch consolidation.
Or at least this round is completed.
Youre absolutely right Frank.
We had at the Investor Day in August we talked about the fact that expenses are coming up in the third and fourth quarter, but then they would moderate and decrease in an absolute level going into 2022, it's not a significant decrease but I don't know Mike. If you can give a better sense of that for the full year, yes.
So we have a.
A few things going on.
First of all he did the country conversion our core conversion in September we finished that so we took out some data presses processing costs from country and some we reduced head count at the end of the quarter. So those will flow into the fourth quarter Chris.
Chris I talked about our core conversion for the for the bank overall, there were elevated cost related to that data processing professional fees. Some others. We had by the sale of the two branches coming in December we have the branch consolidation 10 branches in December and another 10 branches in January.
And those cost savings, where densify it in our Investor day last month, so all of those are.
Or will reduce expenses going forward.
We're not producing it quarter by quarter.
You know projections on expenses it will be releasing but I think we gave you some full year guidance, which we're still comfortable with.
Okay got it thank you very much.
Thanks Frank.
Thank you. Our next question comes from Michael Perito from K B W.
[laughter].
Hey, guys. Good morning, Thanks for taking my questions.
I Wonder if you take on the expense theme for a second I mean, it sounds like based on your last comment there Kristen this.
This is the case, but you know obviously, there's been a lot of wage pressure out there and and competition for talent and.
It seems like you guys actually kind of time to really well right with most of your hires having taken place already before this is kind of manifest it but I guess I just wanted to confirm that that's the case and you know that's not really a threat maybe knock you off your your expense outlook for next year. It doesn't sound like it is but just to confirm that if possible.
I can confirm that for you like so then.
We're looking at it is that the wages that are under the most pressure that we've seen.
We are obviously the more entry level wages in branches and things like that so that the transition to digital will really help there.
There will be some wage pressure so I think the average salary.
Salary increase will be a little higher than in years past, but the total number of head count will be coming down to offset that so we still feel pretty comfortable and if the the items that were a little bit elevated in the third quarter were non compensation related. So these were professional fees and technology fees that they were not driven by a car.
<unk> issues, although there is a lot of compensation pressure in the market, where we're still comfortable with the guidance. We gave for the full year expenses for 2022.
Great helpful. Thank you and then to start on the margin. So it sounds like you guys have a couple of chunks of higher cost funding now run off.
Rajiv loan purchase was later in the quarter I mean that would seem I guess, putting all those pieces together I mean it does it is the margin you know.
It's kind of continue to the core margin rather should kind of continue to inflect upward from here you know I mean do you guys have any line of sight on kind of how you expect that liquidity position to to act near term and I guess are there any other kind of inputs that we should be mindful of as we kind of think of the core NIM trajectory because it seems like there's more tail.
<unk> and headwinds coming off the low figure that that we're at in the last couple of quarters.
Yeah, I think that's definitely the case, so we're coming kind of bouncing off the bottom here you are correct that in the third quarter, Although NIM expanded we really didn't get the full benefit of the loans that were brought on in September or even the pool purchase that was in late August nor we did deploy about $50 million into securities as well. So so I think in the.
Fourth quarter, when you have the full quarter impact of that growth youre going to see expanded margins.
The other outlook items is where we're feeling very bullish about the teams we brought on board, they're doing great building pipelines.
It's too early to be able to really fine tune how productive they may be.
But it's possible we may be able to deploy all of our excess liquidity as early as midyear next year, which would be one or two quarters earlier than we thought.
That bodes well for margin as well as net interest income.
And just lastly, then I'll step back just on that point can you remind us how you think about and I realized it's kind of a hard question in the current environment, but how we should think about the normalized liquidity cash and in the bond book for you guys moving forward I mean is this level of securities.
Probably fairly steady state or or or do you think it could move down or is it really just when you say kind of deploy liquidity. You mean, just getting this cash kind of back down to 100 million or plus or minus more normalized level and not necessarily any kind of compression on the securities portfolio.
The primary thing I was referring to is deploying the cash getting that down to historically, we've got a very strong liquidity position core deposit funded no wholesale advances at the federal loan bank. So we have the ability to run that liquidity down as you know plus or minus $100 million and that's where we like to operate so that'll be the primary thing.
But I would share that we've got a healthy cash flow coming off the securities portfolio and once we deploy the cash we would probably redirect the redemption cash flows coming off the securities book into loans as well. So traditionally we've had a pretty high.
Percentage of loans in the balance sheet and we'd like to build ourselves back to that position. We think that you know that's kind of drives our core profitability. So do you think in the next say by mid second third quarter of 2022, it may be possible to deploy the cash after that will begin to mix shift of letting the securities cash flows come off.
But as early as 2023, we might be looking at two.
Through balance sheet growth as well, which would be if we're in that position that would be a terrific thing.
And just to add a couple of things that might go so that.
So loans at quarter end.
By quarter end balance was 274 million above the average and securities at quarter end were $52 million above the average for the quarter. So both of those so just if you roll that into the into the fourth quarter, it's gotta be probably an extra four or five basis points in terms of margins. So that's the biggest tailwind in the securities book actually if you look year over year.
It's up $600 million in the last year, that's about a 60% increase in that's soaking up the liquidity so.
So we've rebuilt that book.
In light of the liquidity, but there's a lot of cash flow coming off of it because a lot of it's an M. B S with.
Our monthly cash flow and then you have maturity so that'll be redirected to the loan book eventually maybe not in the near term, but eventually it'll rotate into a into loans.
Got it awesome. Thank you guys for taking my questions very helpful.
Thanks, Mike.
Thank you Michael the next question comes from Dave Bishop from people should research partners.
Yeah, good morning, gentlemen.
Dave.
Hey, Chris just curious you know some headwinds out there in the market, we hear a lot of banks talking about.
Supply chain issues inventory issues, just curious if that.
Forcing you are driving.
There may be reset your expectations in terms of.
Longer term growth outlook as the numerator at the analyst day, just maybe maybe any update in terms of how youre thinking about loan growth into 2022 relative to what we spoke about our up in New Jersey.
There's no question that supply chain issues are being felt throughout our client base I'm sure that the whole economy and what it's doing is it's taking the opportunity for even better earnings or expansion to take place. So at the end of the day, if you can't deliver product whatever your product is whether that's a you know a key.
Car or a building or whatever you can't record the revenue and you're not showing that kind of progress.
Unfortunately, we haven't seen a change in core demand. So although we're not seeing some of these projects complete four customers ramping up as quickly as they like their order backlogs remain strong if anything they're growing I.
I also think that because of the supply chain issues. We're seeing a continued very strong demand in the logistics world around warehousing. So to a certain degree people are going to be keeping a little higher inventories when they're able to get their hands on things so that higher level of inventories.
Look towards probably more line draws on our line draws are very low right. Now so we think theres opportunity. There. So as we go into next year I think we're still very comfortable with the projections, we talked about in August.
So I'm pretty comfortable that said if the supply chain doesn't start coming say.
Back on mine in Q1 or Q2 of next year. The more persistent it is it's possible it could destroy demand, meaning that people that just can't get stuff stopped trying and we're not at that point yet.
But we're watching it closely.
Got it and then in terms of the the newer market the Boston and Baltimore.
Markets.
And I apologize if you happened to rates before but as you look out into maybe the end of 2022, a I don't know what the right way to think about it.
Dollar loans and deposits outstanding or as a percent of loans, just curious, maybe where you where you foresee those essentially getting to that.
I think I think it starts with what we expect before we hire anyone doesn't matter, whether it's a new market or an existing market.
If you're bringing on teams of producers are you expecting several hundred million dollars' worth of growth over time.
And I will say that we will not enter a market. If we don't think it has the potential to get to $1 billion or more of an outstanding over several year try to get it could take a number of years to get there. So we're not interested in being in a market that might top out at say $200 million of $400 million. So I think in terms of expectations.
We're seeing a lot of good progress and Joe can talk more to that but we feel we have the right people in the right place, we're being well received in the market. The fact that our transactions are happening already I think proof of that.
And you know based on the pipelines I think we're right on track but.
To reiterate we're not launching a team unless we think we can produce several hundred million dollars of Outstandings and we're not getting into a market unless we think that market has the potential to grow to two 1 billion, Joe anything you'd add on that Oh as I mentioned earlier, Dave we've closed over 100 million in totality in both of the regions. So far.
And the pipelines are strong and I think we're really just starting to hit stride. The just the activity in the last week and what I've seen from both teams is a is really a is really bullish so.
And it gets back to Chris's comment about supply chain Interestingly, we do have a variety of our larger C&I clients that have starting with the pandemic been pretty well prepared and in inventory management and I have the opposite problem. Chris mentioned earlier, you know I have a $870 million in unused lines.
Because a lot of these folks have actually done fairly well and have paid us down or paid us off.
So I'd actually like them to work through some of that inventory. That's a good problem for some of them to happen maybe borrow some money.
Okay.
I appreciate the color.
Thanks, Dave Thank you Dave.
As a reminder to ask a question. Please press star followed by one your telephone keypad.
And our next question comes from Russell Gunther from D. A Davidson Russell. Please go ahead.
Hey, good morning, guys.
Good morning Russell.
Hey, I just wanted to ask if you're able to share what the level of Paydowns were this quarter versus last and just any line of sight into to that headwind near term.
So we really didn't have them, we had the ordinary course paydowns Russell it wasn't didn't increase or decrease.
What are the advantages of having sold off the majority of our P. P. P loans last year as the P. P. P wasn't that much of a headwind it was $30 million and as Joe said, there's not a lot left on the balance sheet. So I don't think that's kind of a barrier for us growing the loan book.
It was a little elevated payoffs were 440 million and then pay downs and prepayment of more than 170 million. So we had the heart.
Originations were heavy but it's partly offset by sales and payoffs.
Not payoffs and pay downs.
Great. Thanks, Mike Thanks, Chris and then you know I appreciate the disclosure you you called out and spoke about in the prepared remarks with regard to positioning for higher rates.
You have put out in the past I think a 320 to 340.
Margin guide.
Does that guidance contemplate any of that benefit from rates or not.
So I think that that's within that range that youre talking about so let's say, we get fully deployed and we took the remember there are two things here, we're going to deploy the cash and as Mike pointed out we have $600 million in securities more than we were holding you know just about a year and a half ago. So.
Between the cash being deployed in the first several quarters of next year the securities mix going on maybe another two or three quarters after that that should normalize our balance sheets. So that we've got kind of the the earning asset mix that we think is optimal for us.
At that point, I think you're probably in the historical margin range of $3 25 to it could be as high as $3 50 to get to $3 50, though I think youre going to have to have movement in the yield curve.
But even without move in the yield curve, we can make a lot of progress towards that 325 in today's kind of flattish yield curve.
That's very helpful. Thank you and then just last one for me fees are not a big part of the story here.
But I did just wanted to ask you and service charges were a bit lower than than.
Expected gain.
Again on sale as well so.
Any color on.
The dynamic this quarter and going forward.
I'll take them into the two separate topics there in terms of gain on sale.
As long as we have this protracted cash position and we have a very strong asset sensitivity position.
We're gonna take advantage of whatever residential origination, we can and put them on the balance sheet. So I wouldn't be looking for much in gain on sale for a while.
In terms of deposit fees those are cyclical. So it was nice to see some of the interchange fees came up but you know we with this level of liquidity out there in the market things like overdraft fees are going to be down even minimum balance fees, you really you're not collecting them when people have so much cash in their accounts. So.
So we also took advantage of really supported clients. During the conversion process. I think there are times there in conversion you just want to make sure your rebate the appropriate fees to get people through the new systems.
Okay, great. Thanks, Chris Thanks, Joe that's it for me guys.
Thanks Russell.
Thank you Russell our next question comes from Matthew Breese from Stephens, Inc. Matthew. Please go ahead.
Good morning.
Real quick on the share repurchases has been pretty consistent year to date about 500000 shares a quarter should we expect that pace to continue for at least the near term.
That means that pace may pick up met you know some of the challenge. We've had is more logistical about kind of the rules about when you can buy and how much you can buy in blackout periods, and we may try and be a little more proactive on that so.
I think given the authorization that's out and our level of earnings.
We have the capacity to do between a half a million and a million shares a quarter and you know the current values. We think it's a good move for our shareholders.
Okay.
And then go into the portfolio purchase you know so given the expansion to new markets and hires the read last quarter was that there was going to be a swell of organic origination sufficient to achieve that $250 million and net growth per quarter that we've discussed.
And the first I'll indication was the QQ pipeline with 628 million Bucks.
I guess my question is should we look at the portfolio purchase is an indication that your confidence in achieving the $250 million and organic growth has changed I mean, maybe I'm reading too much into it but curious your thoughts on the matter.
Oh, Yeah, we're we're still very comfortable with that $250 million target.
I think as Joe pointed out you know some of the loans, we put on especially in that new construction vertical they withdraw over time, so you get a little tailwind from that where you're booking the loans, but you're not getting the dollars out of the portfolio you know quite as fast.
But based on the pipelines, we have now that the pipeline is even a little larger than it was in Q2.
And continues to grow we don't we don't do intra quarter updates, but I will generally say that.
October has had a nice level of closings nice to see that early in the fourth quarter. So the pipelines look good if anything they're larger than they were at quarter end teams are productive the the residential play was really.
As the housing inventory dried up.
Our residential side is really a purchase business right. We're not doing a lot of refinances. So as the residential inventory dried up unit sales dropped and we started to see attrition in the residential book and we said you know what let's try and bring that residential book back up but commercial has been strong I think it will remain strong and if from time to time residue.
<unk> is not as strong we may supplement it with asset purchases, but we're very pleased to see the primary earning asset business for us commercial banking is growing nicely.
Deposits continue to grow for us. So you know we want to just put the we wanted to put stuff to work with the asset sensitivity. We have residential pool purchases do provide us with a little bit of a credit diversity play and it's fully funded dollars and we're looking to buy season pools typically so it.
I just want to put cash to work is there may be periods, where net loan growth is more than $250 million, because we're opting to do things like that.
In a quarter.
Got it so we stick with the $250 million per quarter with upside depending on portfolio purchases that the REIT Reed.
Yep.
Okay, I guess, where I, where I come off it.
Skeptical as if if I take the 625 or 630 million pipeline last quarter, which resulted in a 140 <unk> hundred $45 million of organic net growth this quarter.
We're looking at $650 million pipeline this quarter, but a materially higher amount of organic growth, maybe I'm, maybe I'm looking at those ratios the wrong way.
But maybe it'll be connected I would point you know it look like at any given quarter, what youre originating what actually goes into growth in the balance sheet are always a little bit off but.
You know net of the P. P P, which would be less of a drag going forward is about $170 million of growth. So there's not a big delta between $170 million and $250 million that could be five or 10 extra deals in a quarter. So we feel pretty good that the $2 50, and I think the way we guided in August that that would be a pretty consistent thing in 2020.
Two when these especially the new teams have gotten maturity.
Happy with what they've done but until you establish your reputation in a market like Baltimore or Boston, you Gotta do a few deals to be credible to do a few more in.
And then it kind of starts to build more strongly. So we think Q4 is going to be good and we continue to expect in 2022 that that kind of consistent $250 million a quarter should be achievable with the teams we have put on so far.
And we have met in the quarter in the commercial bank, we had over 160 million of Undrawn, whether it's construction or undrawn commercial lines in the closings. So he put 585 million on a you know, but you got the Outstandings of 400 and change. So you you you do youre going to see some of that and that's okay. We're going to we're going to have that.
Activity and that money will be drawn over time.
Great. Okay. That's all I had thanks for taking them.
Thanks, Matt.
Thank you for your question and as a reminder, analyst asked a question. Please press star followed up on your telephone keypad at this followed by one on your telephone keypad.
We currently have no questions I'll now pass over to Chris for final remarks.
Alright, thank you with that I'd like to thank everyone for participating on the call. This morning, we remain we remain focused on building the business deploying cash and improving earnings.
We look forward to speaking with you following our year end results in January until then we hope you had the opportunity to enjoy a slightly more normal holiday season. This year. Thank you.
Thank you everybody for joining today's call you may now disconnect your lines.
Yes.
Yeah.