Q3 2021 Essent Group Ltd Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Essent Group Limited third quarter 2021 earnings call.
All participant lines are in a listen only mode. After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad to withdraw yourself from the queue simply press star one again thank.
Thank you I would now like to turn the call over to Chris Curran Senior Vice President of Investor Relations. Please go ahead Sir.
Thank you Paula good morning, everyone and welcome to our call. Joining me today are Mark <unk>, Chairman and CEO, and Larry Mcevoy, Chief Financial Officer.
Our press release, which contains essence financial results for the third quarter 2021 was issued earlier today and is available on our website at <unk> Dot com.
Prior to getting started I would like to remind participants that today's discussions are being recorded and will include the use of forward looking statements.
These statements are based on current expectations estimates projections and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially.
For a discussion of these risks and uncertainties. Please review.
The cautionary language regarding forward looking statements in today's press release.
The risk factors included in our Form 10-K filed with the SEC on February 26 2021.
And any other reports and registration statements filed with the SEC, which are also available on our website now let me turn the call over to Mark.
Thanks, Chris and good morning, everyone earlier today, we released our third quarter earnings, which continue to demonstrate the strength of our buy manage and distribute operating model and generating high quality earnings robust returns and excess capital.
Bind with investing capital back into the business and redistribution to shareholders through dividends and buybacks our business is operating on all fronts.
For the third quarter, we reported net income of $205 million as compared to $160 million last quarter income for the third quarter includes $41 million of earnings associated with some of our strategic investments in limited partnerships.
On a diluted per share basis, we earned $1 84 for the third quarter compared to $1 42 since last quarter, while our annualized return on average equity for the third quarter was 20%.
At September 30th our insurance in force was $208 billion, a 9% increase compared to $191 billion as of the third quarter a year ago. The.
The credit quality of our insurance in force remained strong with an average weighted FICO 745, and an average LTV of 92% also we have reinsurance coverage on 75% of the portfolio as of September 30.
On the business front, we formally rolled out the next generation of <unk> in October.
Latest iteration of our risk based engine offers more refined pricing as we continue to optimize our unit economics.
With edge technology sitting in the cloud we are able to analyze large amounts of data with machine learning and seamlessly deliver price to customers.
Given the Commoditized nature of mortgage insurance, we believe that collecting and evaluating more data to price mortgage risk as a long term competitive advantage.
As of September 30, we are in a position of strength with $4 $2 billion in GAAP equity access to $2 $4 billion in excess of loss reinsurance and over $800 million of available liquidity.
With a year to date operating margin of 78% and operating cash flow of $518 million or operating engine continues to drive our balance sheet strength.
As evidence of this Essent guaranty remains the highest rated mono line in our industry at single Labor, a M best and Ace III and Triple B, plus by Moodys and S&P, respectively.
While our preference has been to retain excess capital and reinvest back in the business. The strength of our model enables a measured approach to excess capital as evidenced by our dividend and share repurchase program.
However, it's important to remind everyone that a credit event can quickly change the needs of our business whereby capital distribution can quickly pivoted capital shortage, while reinsurance should help soften headwinds from credit cycles, we remain committed to managing capital for the long term and maintaining a fortress balance sheet.
At September 30, our book value per share was $37 58.
We believe that success in our type of business as measured by growth in book value per share.
Since going public in 2013, our annualized growth in book value per share is 21%, which we believe is a meaningful demonstration of our ability to invest capital and build long term shareholder value.
Finally, given our financial performance during the third quarter I am pleased to announce that our board has approved a <unk> <unk> per share increase in our dividend to <unk> 19.
This represents a 19% increase from the dividend that we paid in the fourth quarter of 2020 now let me turn the call over to Larry.
Thanks, Mark and good morning, everyone I will now discuss our results for the quarter in more detail for.
For the third quarter, we earned $1 84 per diluted share, including 28 per diluted share associated with net unrealized gains on other invested assets.
Compared to $1 42 last quarter and $1 11 in the third quarter a year ago.
As Mark noted income and other invested assets in the third quarter was $41 million <unk>.
Including $39 5 million of net unrealized gains.
Through June 32021, unrealized gains and losses reported on these investments were recorded in shareholders equity through other comprehensive income.
In the third quarter management determined that the unrealized gains and losses on these investments should be reflected in earnings rather than other comprehensive income.
Yes.
Net earned premium for the third quarter of 2021 was $219 million and includes $11 $6 million of premiums earned by Essent re on our third party business.
The average net premium rate for just the U S mortgage insurance business in the third quarter was 40 basis points down from 41 basis points in the second quarter.
Persistency increased during the quarter to 62, 2% at September 32021.
Compared to 58, 3% at June 32021, and 56, 1% at March 31 2021.
Yes.
Our provision for losses and loss adjustment expenses was a benefit of $7 million in the third quarter of 2021 compared to a provision of $10 million last quarter. The.
The benefit for losses in the third quarter was impacted by the continued care activity on existing defaults.
The decrease in the provision was due primarily to the makeup of the default portfolio as older more seasoned defaults with higher case reserves secured during the current quarter.
New defaults reported with lower case reserves were added.
During the third quarter, we received 5132, new default notices which is up 4% compared to 4934 defaults reported in the second quarter.
We had 8862 default secured during the third quarter compared to 10450 <unk> in the second quarter of 2021.
At September 30, our default rate decreased to 247% from 296% at June 30.
Since the fourth quarter of 2020, we have reserve for new defaults using our pre COVID-19 reserve methodologies.
As a reminder, for new defaults reported in the second and third quarters of 2020.
We provided reserves using a 7% claim rate assumption.
This assumption was based on expectation that programs such as the federal stimulus foreclosure moratoriums and mortgage forbearance may extend traditional default to claim timelines and result in claim rates lower than our historical experience.
We have not adjusted these reserves previously recorded in the second and third quarters of 2020, which totaled $243 million as they.
<unk> to represent our best estimate of the ultimate losses associated with these defaults.
Other underwriting and operating expenses in the third quarter were $42 million compared to $41 million in the second quarter.
We now estimate that other underwriting and operating expenses for the full year 2021 will be in the range of $170 million.
Our updated estimate of the annualized effective tax rate for the full year 2021 was 16% before consideration of discrete items.
The tax rate for the third quarter was 16, 8%.
During the quarter Essent group limited paid a cash dividend totaling $19 $9 million to shareholders in September and repurchased $70 9 million of stock during the quarter.
As of September 30, we have bought back approximately 2 million shares for a total of $89 million.
During the third quarter Essent Guaranty completed a dividend of $47 million to its U S holding company.
From a <unk> perspective after applying the three factor for COVID-19, defaults Essent Guaranty's Pmiers sufficiency ratio was strong at 162% with $1 $2 billion in excess available assets.
Excluding the 0.3 factor our Pmiers sufficiency ratio remained strong at 152% with $1 $1 billion in excess available assets now, let me turn the call back over to Mark.
Thanks, Larry and closing our third quarter performance was solid as we produced strong earnings and continued to generate excess capital our buy manage and distribute operating model is driving robust returns and confidence in our economic engine is high.
We remain positive and continuing to leverage <unk> and optimizing our unit economics in a competitive market as we continue to utilize technology to leverage more predictive pricing variables. We believe that combining AI with large quantities of data is where the financial services industry is moving and we believe essent is at the forefront of this.
Strength in our <unk> results affords us flexibility in allocating excess capital across the core business potential strategic investments and redistribution to shareholders, while considering and executing on each of these levers we are taking a measured approach around capital allocation.
We believe long term investors will be rewarded with his patients now let's get to your questions operator.
The floor for your questions to ask a question. Please press star one on your telephone Keypad again Star One your first question comes from Rick Shane of Jpmorgan.
Hey, guys. Good morning, and thank you for taking my question.
Mark one of the big changes that has occurred with the amount of refinance activity and the amount of niwa.
Over the last 18 months is a significant shift in vintage of the portfolio.
If you could just talk about any difference in characteristic of the new vintage or how we should think about seasoning of that over the next couple of years that would be really helpful.
Sure Rick.
The fundamental kind of characteristics of the new new business versus the old Hasnt really changed that much we have been.
Think about an average FICO of 745 kind of an LTV of 92 ish that's been consistent what we saw a little bit in 2020 was more refinancing.
Versus purchase this year, but I would say the portfolio is continues to be strong. So I wouldn't look at any big differences, it's relatively young again.
Versus where it was given the amount of refinancings, but we've also had a lot of the embedded HPA already and that young portfolio, our mark to market LTV on our portfolio.
It's right around 80%, so it's a pretty strong portfolio, Rick So again I wouldn't.
And I wouldn't look to see too many differences and again I think we're pretty pleased with the portfolio as it stands today.
Got it and on the second part of the question just how should we think about the seasoning because historically the portfolio has been sort of more.
Homogenized in terms of vintage and now you have.
More concentrated vintages, so we probably need to think about seasoning, just a little bit more how do we how should we consider that.
Yes. Good question again, I think if rates go up which we think they will write as given given some of the headwinds we're seeing around inflation I think the persistency can really go back to normal so you're right it could be thinking of these vintages.
It's not it's you were kind of stuck than almost in these kind of 2020. One vintages I would look at this is actually a good thing right. So we're locking in kind of the yields that we have on the premiums and we already have the embedded HPA I would say the wind is at our back in terms of the portfolio. So as it seasons and as we enter into.
Two.
A potential headwind right.
The industry or the economy is not going to grow forever. It's a pretty good portfolio to go into that type of environment and remember most of this reinsured seven.
75% at the end of September, but probably will quickly approach 90, as we complete the latest Iowa, which were in the market with now so again I think we're I think we're pretty well positioned for the portfolio, probably better maybe than most investors investors that think in terms of again.
Walking into that those two years of two.
Two year vintages, I think we'll end up performing pretty well.
Sounds great Hey, Mark Thank you very much.
Sure.
Your next question comes from Mark degrees of Barclays.
Thank you Mark.
Mark I think you get credit for being a little bit more candid about the competitive environment than some of your competitors.
This earning season the competition has been pretty stable around pricing just wanted to get a sanity check to see if that kind of aligns with what you are observing.
Yes, I would say from a competitive standpoint, just in general taking a step back the business is changing mark it's changing.
A rate card only relationship.
Business to fee only and I think there's a lot of the companies are struggling with that I really do.
Because you have a lot of them are still using rate cards and promoting rate cards. We we're at we've heard feedback from lenders directly.
To me that some of our competitors are trying to sell them off the engine versus.
Trying to use the card versus the engine.
One that tells me they are behind on the technology clearly so in terms of using a static card versus an engine.
I think they are using the cards as a crutch I think a lot of the industry. As we said is commission based so people do with their incentive to do.
And I think again I think the industry is changing I think we took that challenge head on it's going from relationship to see we invested in technology to make sure we could price more accurately and that's using more information again, if it's all about C. You better have more information than the next guy and we started that process.
Three years ago now and the end result is an essence edge kind of the next generation of it so.
I do think I think they are struggling with that in terms of just in terms of kind of premium so from an essent perspective, and I know, we've been asked about and I know theres been a lot of questions around premium they're compressing, but really the majority of that compression is coming from the decline in Sci right.
And also a little bit as the reinsurance ramps up we see our premium levels the gross premium level stabilizing in 2022.
Where it goes after that is really a function of of kind of.
Premium on new NSW.
And Mark our premium on new and IW has been relatively flattish for the past eight quarters I'm not sure everyone can say that again, what we see in the industry as a few guys kind of chasing the market down. They go after the bid cards and there is two large lenders that bid out their products every every fee.
Four months six months and folks gravitate towards that we have not something we've been involved in those type of lenders in the past and we just refuse to kind of look.
Lower our price every four months like Clockwork and we don't think it's prudent.
The long term and again Thats why were worthy engine is going to be more of a long term advantage, we can pick our spots.
And again, it's all about unit economics, right, it's about optimizing the premium level with pricing, which I think we are doing.
Dan.
We're also in terms of investment income.
We're always looking to increase the yield there and then mark sometimes it gets back down to old fashion manage expenses. So again, so we took our guidance down on expenses, that's something we can control everyday we don't see that.
Across the industry. So, yes, I mean again I think competitively.
Those are the factors really driving at but I think from an Essent perspective again, we always feel like we're going to be kind of in the middle of the pack in terms of share.
And we're going to use that the engine and our analytics to try to optimize the premium for whatever share we do get.
Okay, that's very helpful context.
And then I think you mentioned reinsurance you're up to like 75% of the portfolio is now reinsure, where do you see that going.
I mean generally it's around 90, and Thats kind of a good guide for us to get where were.
We're out in the market now with another IL and we like 90, so again getting back to kind of the premium levels markets think of have added like four or five basis points that we are seeding to reinsurance to a meaningful number.
We're looking at close to $100 million, if not more at more than $100 million.
Which is again significant but we think again from a hedging perspective enabled to hedge out that mezzanine exposure. It is money well spent and when the COVID-19 wins were blowing last year, I think investors and maybe not initially but longer term its certainly.
At Essent, we are very glad that we had.
That reinsurance and again, that's all part of the buy manage and distribute operating model I think it's critical because again when you think about housing rate housing is is very good right now Mark I mean, you have a tailwind in terms of <unk>.
Excess demand versus supply.
<unk> has grown a lot and we will expect it to modify GDP growth is good.
But theres always clouds on the horizon right when we talked about about inflation.
Given housing surplus or shortage could turn into a surplus someday we will enter into another recession right at some point.
Covid was a scare in my view and it turned out not to be a real credit event, even have we booked a number of reserves around that.
And it's almost like the hurricane it didn't quite happen and people hopefully from an asset perspective.
You have to keep your guard up.
Hence my comment in the script around maintaining a fortress balance sheet, what does that mean that means making sure you have not just excess capital, but low leverage that we're prepared for every event. So we kind of have a dual approach set us with capital right are we using capital to <unk>.
Look for opportunities outside of the core business, which we're doing we're clearly investing in a lot of those the venture funds, which turned out we.
Had a nice gain on them in.
In this quarter and in this year.
I think it is good evidence that we're pretty good at allocating capital, but that wasn't even the primary purpose of the primary purpose of it was to use things to improve our core business and now I think we're going to expand that scope to look outside the core business. Meanwhile, you still want to make sure you have a core balance sheet in case things don't go bad. So you don't want to grow and just try to run into.
A brick wall. So it's a balance that you have to have when you are managing our risk organization like we are.
Okay, great. Thank you.
Your next question comes from Mihir Bhatia of Bank of America.
Hi, Good morning, and thank you for taking my questions, maybe I'll start with.
Just a few minutes that loft answer in terms of investing outside.
<unk> businesses valuations.
Interesting.
Are there any more.
Closer to seeing that investment actually happen.
Yes, I mean, I think the valuations have not gotten more interesting as evidenced by the gain in some of our limited partner shift interest I mean, those who are comprised of and as some of our real estate funds, which have done well because of HPA, but also a number of the underlying companies have gone public.
Or have specs at.
I'd say pretty healthy valuations. So we've been we've been the beneficiary of that but it's kind of I think it hurts you.
On the front end in terms of new businesses that doesn't.
Doesn't stop us from continuing to look and to evaluate here. So we're we're out we've really started to build the infrastructure. So we started with the funds a few years ago. We started to bring on folks who are professional investors, who are who have experience in looking at these types of businesses.
Operators were not professional investors like places like the folks and.
In the audience today.
But we do but we do understand the business and we are good operators. So we think it's a good comp we think a combination of investors and operators is pretty good. So we will continue to look at these venture type songs and the companies that they invest in the hours out traveling.
A few weeks ago for two days visiting a lot of these companies so I'd like to kind of I used to always.
Pre COVID-19 go out and visit our customers and get a chance to know them and I'll continue to do that but probably not at the pace I did before again, just because of the changing nature of the business that I spoke to earlier an amount a lot now looking at these young companies and I'd like to sit across from them I'd like to try to understand their business see how we can.
Add value to them and what do we bring to the table clearly capital.
We bring infrastructure around managing our business I think we bring a lot of experience on how to scale our business.
From start from.
From scratch, we clearly bring regulatory expertise in terms of how to manage the business and now we're looking for a good fit right is that a company that can can grow.
Do they have the passion that we had when we started the business I mean I like to see a lot of that we don't always see it in some of the venture companies Theyre more interested sometimes in getting from <unk>.
Series eight of series B at a better valuation than building a great business, we want to work with the folks who want to build a great business and I kind of know it when I see it. So we have a watch list. We will continue to work with these companies and we will see we will see what happens, but also with me here I'm not against anything big either so.
So we're open because we're here allocating capital for shareholders and whatever we can do to continue to grow as soon or to make <unk> a better company for shareholders. We're going to do it it's not about what I think what I want to do it's what we think is in that needs to be done for shareholders and if we don't find anything.
It will we will push more money back to the shareholders, it's kind of that simple.
Thank you for that is.
Good and helpful.
I did want to ask go back to your comments on persistency for a second I mean I understand.
Given given the rate expectations that persistency goes up but I was curious that given the high level of home price appreciation could that have an impact on persistency I mean, we're hearing more I know historically it hasnt had a big impact, but we're hearing more and more from originators and servicers that there is potential for them to mine their portfolios to generate.
<unk> refi.
Activity.
Cash outs and things like that so ill skinny.
Is that something you're seeing or hearing about at all from your customers. Thank you.
We're not seeing it yet, but again that certainly could be.
And again, there's a lot of it is going to be dependent on rates. So I mean, if they are in the money they probably should be refinancing.
Whether they can leverage HPA to potentially get out of MRI. Good for them. Good for the borrower or whatever is good for the borrower is good for us longer term, but remember it's correlated so.
If their level of refinancing goes up we certainly will see that in the <unk> number but again, we haven't seen it I think we're 90 ish plus percent purchase.
But again I think as we go into 2022, depending on where rates are we think purchase market wall and we think it'll continue to be strong I think its going to take.
A pretty big Spike in rates for it to kind of dampen the demand of new home ownership I mean again, the millennials, which set we sound like a broken record, but it's $4 million to $5 million new potential homeowners come into that space every year, given how their aging so we feel pretty confident on our purchase.
Over the next couple of years, and then refinance I still think it's just a function of rates.
Got it and then my last question just in terms of Opex and we heard a lot this quarter about <unk> companies in particular about it is getting more expensive to hire technology talent I assume you are seeing that too. So my question is just.
Does that in any way slow down your initiatives around ml and AI and <unk>.
Building out a great Cosmo and also maybe just comment on the availability of talent.
Thank you.
Yes, it's a good question I would say.
The technology talent is a little different than other talent that we have in the organization.
In terms of attracting them, there's a lot of opportunities, we havent were pretty efficient in terms of.
Of leveraging talent.
We haven't had much we haven't had too many issues, we're bringing in one of the initiatives. We're doing across the company is bringing in younger folks right out of college. So we've done that we've done it in our underwriting group, where we've had a really.
Totally successful junior underwriting program, we've done it in the Vd group.
We've done it within our corporate development area, we're kind of on the hunt for talent dose and I would say right out of college and also 15 years out of school, we've done a really good job building, bringing in some really strong talent kind of in that mid 30 ish type range, which we think again is kind of building that next core for <unk>.
<unk> to grow to the next level on the it front, where we're bringing folks in out of college through training and obviously across.
In another level so to answer your question no. We haven't had met much but we're not out hiring a lot we're very.
In terms of who we hire and we also leverage outside resources. So we can also leverage.
We are leveraging AWS.
Ws guys a lot just for our move to the cloud they are actually bringing in a lot of their engineers to help accelerate our move to the cloud we thought I think initially our move to the cloud was going to be at the end of 2023 and now we believe we will be fully on the cloud by the middle of next year and AWS has really been really been a good partner in <unk>.
<unk> us accelerate that so I want to say, we have 20 plus folks of there is working with us.
On site and remote to.
To make that happen faster. So a lot of it is just making sure you can use either people on site or.
Having them work for you mihir or using contractors are using third party consultants to kind of accelerate its always we kind of look at it.
Faster cheaper and who can you use to solve the problem quicker.
Thank you.
Sure.
Your next question comes from Ryan Gilbert of <unk>.
Hi, Thanks, Good morning, guys.
Wondering if you had any comments on how <unk> might participate is to gse's ramp up their CRT programs again.
Yeah, well remember we're participating in.
In <unk> out of Essent re so Friday was.
I think our sole provider last year August spanning kind of pulled out of the market. So we would expect.
And now we would expect to Fannie guys are at.
They are ramping that up we'll participate in that and we participate in this two fold right not only of us taking principal risk, but we also do a via our MGA, where we get pretty you know its been a nice steady business for us over the last few years. We also get a profit component of it and so we see some we see some nice potential there with Essent re probably on a smaller.
Scaled in essence.
But again as we think about and our strategic investments in new businesses and our ability to scale Essent re is another good example of us starting a business.
Post IPO from scratch and it's up to the point now where it's as we.
We said before it's it's very efficient business I mean, we earn on an annualized basis $50 million in third party premiums and it's pretty it's a pretty efficient team over there in Bermuda. So again, it's never going to drive growth at Essen, but when you think about again improving unit economics.
These are little things that count and we've been very pleased there and again with Fannie covenants in our market, we would expected their potential.
To grow a little bit more than half.
Thanks, very much that's all I had.
Okay.
Your next question comes from Geoffrey Dunn of Dowling and partners.
Thanks, Good morning, just a couple.
More number related questions first Larry can you break down the liquidity between Bermuda and U S Holdco and define any of the movements from U S to Bermuda this quarter.
Jeff We don't breakout we decided to put them together because they are very fungible. The the cash balance at U S holdings in it and data Essent Group Ltd. We did not move any distributions that were up from the U S to Bermuda during the quarter. So it will be disclosed in just the combined.
Cash and investment balances at both holding companies going forward.
And part of it Jeff is we were moving in and out of Guaranty in the U S. Holding it may sit there we don't need it up a group just because you have the 5%.
Percent withholding tax.
And when you think about movement within U S Holdings, we did form another unit this year called Us and ventures, which is where we are holding a lot of the venture funds.
Remove them from Guaranty, we've also made a small direct investments.
And ventures, and a very small, but we can use the cash for that and any potential other strategic investments and we can always move it up to we can always move it up to group also think of Essent re essent res another backdoor way to get cash up to the group level. So.
So again, we just thought it was simpler to say holding company versus get into a lot of the ins and the outs.
Okay.
And then if you look at your relative reserving.
Early stage delinquency buckets been running 11% 12%.
This quarter, we're down to nine is that just a timing mix issue with the end of the quarter cures.
<unk> has experienced prompted you to carry a.
Lower relative reserve on the earlier diagnosis.
Yes, no Jeff it's mix move we made no significant changes in reserve factors continue to use the same model and again, just a mix between beats.
Between the timing of that but yes, no all mix and I think to be clear, Jeff. So so everyone understands kind of the context of it.
And I know Larry addressed this in the script, but we havent touch the second or third quarter cohorts yet.
We're trending very well so we had a 93% kind of cure rate assumption for both of those quarters. We're getting close I mean, we're 80 86 on our second quarter cohort 81 on the third third quarter cohort and I think the second quarter cohort was <unk> 88 at the end of October.
So we're moving closer to that number what we believe by the end of the fourth quarter first quarter, and we will be able to make a call on a on on reserve release. We certainly don't believe are over reserved at this point, we think we're adequately reserved but we will continue again, if it transitory always things can happen.
I think a lot of the negative provision this quarter was just a function of the model we move back to the model and are back in the fourth quarter of last year. So October default in the fourth quarter got hung up at 9%.
<unk> expected claim rates and kind of ran through.
The delinquency buckets, so build up higher reserves.
One all the way to 180 why not if they are in forbearance.
And then the cure Theres, a big reserve release, So I think from an investor standpoint, I think it bodes well I think it's something to look at that and the fact that we're running it through kind of mechanically through the model and seeing this type of performance I think is actually pretty good.
Alright, thanks for the comments.
Yes.
Sure.
We have one more question. Your final question comes from Bose George of <unk>.
Yes.
Hey, guys, just a couple of little things.
On the expenses. So your guidance now suggests the fourth quarter is close to 45 ish million. So is that a good run rate for 2022 as well as these as a starting point.
I wouldn't I wouldn't say that yet some of it is we always like to give the guidance were going to punt that till February.
So, but again, yeah, I mean, it's not a bad run rate, but we'll firm that up in February.
Okay.
And then actually just in terms of the seeding that you do to <unk> this year.
I guess you took it up to 35% from 25.
What are the variables you look at it in terms of potentially increasing that either for the back book or.
Prospectively.
It's a lot of it is it's a good question has a lot of its capital a lot of it's making sure we don't trip anything around <unk> or the beat tax.
So we're pretty comfortable with 35, no plans right now to be honest with you to move it up.
Certainly something we'll look at but let's see how all the infrastructure bills go through and see where taxes land always a lot of movement there. So.
Way to see the dust settles there and then we will reevaluate it.
Okay, Great. That's all I had thanks.
Okay.
This concludes the Q&A portion for today's call I will now turn the floor back over to management for any additional or closing remarks.
No additional comments here just want to wish everyone. A good weekend and thank you for your participation today take care.
Yes.
Ladies and gentlemen. This concludes today's event you may now disconnect.
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