Q1 2022 S&T Bancorp Inc Earnings Call
Good day, ladies and gentlemen, and welcome to the S&P Bancorp first quarter earnings Conference call.
At this time, all participants have been placed on listen only mode and the floor will be opened for questions and comments after the presentation.
It is now my pleasure to turn the floor over to your host Marc <unk> CFO at SMT Bancorp, Sir the floor is yours.
Thank you very much and good afternoon, everyone and thank you for participating in today's conference call.
Before beginning the presentation I want to take time to refer you to our statement about forward looking statements and risk factors, which is on the screen in front of me Dave.
Statement provides the cautionary language required by the Securities and Exchange Commission for forward looking statements that may be included in this presentation.
A copy of the first quarter of 2022 earnings release can be obtained by clicking on the press release link on your screen or by visiting our Investor Relations website at Www Dot SP Bancorp Dot com.
We will be reviewing an earnings supplement slide deck as part of the presentation. You can obtain a copy of those slides on our website under events and presentation.
First quarter 2022 earnings conference call click on to first quarter 2022 earnings supplement.
B today are Chris <unk>, CEO , and Dave <unk>, President I would now like to turn the program over to Greg.
You Mark and good afternoon, everybody and thanks for joining US we look forward to the discussion of our Q1 performance as well as taking your questions before I give a brief overview of the numbers I wanted to start off with some.
Making sure everybody is aware of some recognition that we received from J D power recently around retail customer service service and retail.
Satisfaction here in what they define as the the Pennsylvania region. We were named the number one bank based on their survey of bank customers.
This is a really big deal for our company and certainly for our employees.
Tremendous compliments when you receive feedback like this from those that are talking to our customers on it and divert independent basis and.
And it's something that we not that we do not take lightly, but it's certainly something that we have great pride in.
We obviously want to thank our customers for the confidence that they show US certainly congratulate our teammates for this achievement gives us gives us great optimism and confidence as we move forward.
As you can see on slide on the first slide titled first quarter overview.
We have a very nice quarter from a numbers perspective, we posted 74 cents a share up from 57, a share and that totaled about 29 little over $29 million.
And net income we saw improvements in both margins and credit quality in the quarter credit quality.
Leigh improvement is in line with our focus on achieving a better balance of growth underpinned by a focus on safety and soundness.
The margin improvement.
Aided by better deposit mix as well as the asset sensitive nature of our balance sheet in a rising rate environment. As we look forward. This asset sensitive nature of our balance sheet really does give us optimism as we move through the year and for continued improvement in both.
Net interest income as well as net interest margins.
I also want to take a note around our dividend increase.
For the quarter, we increased the dividend by three 4%.
<unk> 30, a share. This is the second increase that we've delivered in the last three quarters and it is a reflection of the value that we have and those that are investing in our company and our desire.
To give them get back to them as well.
Turning onto the next stage title of total balance sheet I'm going to turn it over for today that total linked to give us more detail, but a couple of notes here one.
We talked about and this is really a reflection of customer relationships and that is our deposit.
Remain stable and actually the mix showed some improvement.
In the quarter.
Low cost core deposit growth remains in great shape, and we migrated some higher cost deposits off the balance sheet.
The securities portfolio also increased in the quarter, which will help improve NIM and yields deploying about $117 million from cash into higher yielding assets.
Lots to be proud of in the loan book over the quarter, particularly in the consumer space. This was strategic work that we've been doing within our customer base that we believe that there were opportunities with those customers.
Good good solid execution, not only in this quarter, but over the over the past.
A few months has resulted in that growth I'm going to turn it over to Dave and it allows them to give us some more detail.
Thanks, Chris and good afternoon, everyone I'd like to continue with some additional details relating to page four as you may recall in Q4, we saw broad based loan growth that grow the allowed us to enjoy a $54 million increase in average loan balances here in Q1.
Our consumer segment as Chris mentioned absolute net loan growth continued.
Annualized rate of nine 8%.
Also evidenced by increases in all consumer segments, we continue to see success in all regions with our home equity and first lien residential mortgage and construction projects products.
I'm very pleased with progress our consumer team has made post pandemic in fully engaging our eastern Pennsylvania branch network and that region has seen significant increases in activity and pipeline.
We carry improved consumer pipelines into Q2, and anticipate balanced growth to continue at a slightly higher annualized level low double digit growth rate in the coming quarters.
This growth is the addition of three new mortgage loan officers year to date on the commercial side production in Q1 met our expectations and exceeded Q1 of 2021 by 13% growth was dampened in Q1 by elevated payoffs. The primary reason for this was based on our strategic decision to allow.
Certain loans to pay off due to structural pricing pie.
Pipelines in Q2 on the commercial side are similar in size as compared to Q1, and we have seen increases in our revolving C&I utilization rates quarter over quarter and they are now nearing pre pandemic levels.
Based on the decisions that we made to allow certain for certain C&I payoffs, our total revolving commitments reduced in the quarter by approximately 3%.
We continue to closely monitor activities in the commercial segment and based upon current pipeline levels. We anticipate similar results in Q2 and low to mid single digit annualized growth rates in the second half of the year.
Slide five provides some details regarding our asset quality trends as you can see our MTA declined by 25% when compared to Q4, our special assets team was able to complete the full liquidation of two significant and long lasting workout credit and we also saw positive movement.
Several hospitality credits as they return to accrual.
There were no meaningful NPA inflows in Q1, we also experienced a 12% reduction in CNC assets in Q1 <unk>.
Primarily related to the hospitality portfolio and I'll turn it over to Mark to continue the conversation great. Thanks, Dave on the left hand side of the asset quality heat a page spot, but we did have some of that movement.
The allowance for credit losses between the quarters.
The ACL increased by about two basis points or $1 3 billion.
The lower quantitative reserves came result of rating upgrades and better loss experience.
Offset by higher specific reserves and is somewhat more cautious forecast given the rising macro uncertainties.
Moving on to page six net interest income.
Core net interest income, excluding PPP increased <unk> 7 million compared to the fourth quarter as short rates decrease at the very end of the quarter and we saw a better asset mix with higher average loans securities and decreasing cash total net interest income declined $5 7 million due to the headwinds from lower PPP income which decreased by one.
4 million compared to the fourth quarter and two fewer days.
Is it rate, excluding PPP increased seven basis points, primarily due to the improved asset mix.
We are well positioned to benefit from rising rates with over 50% of our loans indexed to LIBOR suffer a prime paper.
A favorable impact with only about a half a million in Q1, but we expect that to expand as we have a full quarter of 25 basis point move from March and with the anticipated additional rate move this quarter.
Our interest income was approved by at least $7 million annualized for every 25 basis point increase.
We expect early deposit data to be muted and we have not experienced significant pressure to date and then if I can.
Change in the pace of the fed move quick and competition reacts.
Moving to slide seven non interest income.
Which decreased $5 9 million in the first quarter compared to the fourth quarter, primarily due to valuation changes in the deferred compensation plan, which shows up in the other category.
Net P&L impact as there is an offset and lower expenses.
Debit card activity was strong and improved further this quarter up $7 million.
Offsetting that is moderating mortgage banking income as refis that flowed and more origination volume as new names to the portfolio.
We still expect the run rate to be in the $50 million to $60 million per quarter range.
Slide eight non interest expense.
Declined by $2 8 million from last quarter. The biggest improvement came in salaries and benefits, where we had much higher incentive path in the fourth quarter.
This decrease was partially offset by decreased Oreo.
Which shows up in the other category.
We still expect expenses to be in the $49 million to $50 million range per quarter going forward as we continue to make investments in our business and the expenses being under some pressure, particularly due to the tight labor market.
And finally on slide nine capital, we have strong capital levels and are well positioned for growth our board extended our.
Share repurchase plan through March 2023, it was about $37 4 million available in that plant.
We have no immediate plans for buybacks, we continue to evaluate the situation given the recent stock price changes our preference is certainly to remain it remains to deploy the capital for organic growth and strategic investments.
Get experienced limited tangible book value dilution of about two 6% this quarter, owing to a relatively smaller securities portfolio and less than 11% of assets are.
Our TCE declined by 70 basis points currently and in the quarter at $8 nine 1%.
Thanks, very much at this time I would like to turn the call over to the operator to provide instructions for asking questions.
Thank you ladies and gentlemen, the floor is now open for questions. If you have any questions or comments. Please press star one on your phone at this time, we asked a lot of posing your question. Please pickup your handset listening on speaker phone to provide maximum sound quality. Once again, please press star one.
Do you have any questions at this time.
And the first question is coming from Daniel Tamayo from Raymond James Your.
Your line of sight.
Hey, good afternoon everybody.
So do we.
Maybe we can start on the loan growth.
Got your guidance on the low double digit growth in the consumer book and then the <unk>.
<unk> to mid single digits.
On the commercial.
I think you said the second quarter is going to be.
Similar to the first quarter in commercial but.
Putting that altogether.
Kind.
Kind of a range that you would point us towards for for loan growth for the rest of the year.
Yes.
The growth is going to be concentrated in the second half of the year.
And we would guide to.
Single digit growth.
On an annualized basis for the remainder of the year.
Got it alright, I appreciate that.
And then maybe we can talk about the margin a little bit but interest income outlook with with all the.
Changing the.
The change in the rate outlook.
So you talked about the $7 million annualized on the asset side being the initial benefit I think last quarter.
You mentioned that may buildup to $9 million over overtime as floors are reached.
Wanted to get your updated thoughts there and then.
Just thinking through how the excess cash.
Assumptions are factored in there as well thanks.
Yes, it's one of the margin.
Numbers haven't changed we still have that.
First 25 basis points is that the $7 million I have to get to that 100 basis points.
We've worked through our floors and should be close to nine and again net interest income at the four that any increases on that on the deposit side.
What was the second part of your question I'm sorry.
Just what.
Okay.
Excellent cash deployment.
Yes on the cash that we did put some cash to work here in the first quarter. We're taking another look at that given the changing outlook in London.
A little bit different than what we had anticipated earlier in the year with the more uncertainty in the macro outlook. So we may look to deploy a little bit more securities as we move throughout the year, depending on how the loan.
Loan growth materializes.
Okay, perfect Alright ill step I appreciate your interest.
Thanks.
Thank you and the next question is coming from Michael Perito from <unk> W. Michael Your line is nice.
Hey, guys good afternoon.
Good morning, Mike.
Quick clarification question I'm wondering on the 50% to $60 million quarterly noninterest income.
Target.
Mark what you guys are assuming around the mortgage piece to me on <unk>.
One hand, it sounds like you're having some producers there but on the other hand, you here kind of supply issues that are starting to bake into the run rate here I'm, just curious where you have that.
That pipeline that overall kind of fee line trending off of this kind of low point, we saw this quarter over the last two years.
Yes at mortgage mortgage number it's closer to about a million a quarter or so that includes the servicing which is more of a more stable, it's probably about half and half between servicing and.
And feeds from origination we are seeing more activity.
<unk>.
Yes.
On the mortgage side going because theyre larger loans going to the portfolio and also an increase in home equity activity and the refi boom kind of starting and stopping people looking to take that as equity in there in their homes are looking more at the home equity side.
To fund us.
Activity.
But in the fee side, maybe $500 million of that per quarter.
Mortgage related.
So it's fair to say then that.
$1 million in hand.
Maintaining this run rate you guys are expecting some of the debit and credit card and other deposit fees and things that have kind of ramped up nicely over the last few quarters to remain at these levels. Yes. Mike. This is Chris that's exactly right I mean, we look at the we got to bifurcate that fee income line item and there's lots of variability in the ore.
<unk> speaks and watching and monitoring and focusing on growth on that the true customer activity. What are you thinking about debit card.
Treasury management fee income those sorts of things that sort of activity level is an important one for us in this key metric that we're focused on and that's what we'd like to see a lot more of your continued growth there to offset the variability on the mortgage side.
Paul.
Got it. Thank you guys and then just two more quick ones.
First on credit.
Anything else.
Obviously, the 12 month comps.
But anything else of size of consequence near term that we should be mindful of in terms of stuff that.
Repair itself or be offloaded, or just anything else that you have.
Visibility on today.
Yeah.
Nothing beyond what we've commented on like I think broadly if you look at delinquency NPL.
Our special mention substandard.
Things trending in the right direction for Q1, and as Mark mentioned with regard to the reserve, we did add a little bit to the reserve and.
In order to anticipate upcoming.
Upcoming potential macroeconomic changes that might impact credit performance, but there's nothing specifically that I would point to beyond what we mentioned.
Got it and then just lastly.
With the impacts on the balance sheet for me OCI this quarter in the margin in selecting I mean, we could theoretically be it.
Kind of at a low point from a capital standpoint, I mean, I think you guys could build from here pretty materially and with the the nonperformance at such a smaller percentage now.
Do you think there could be a bit more of an aggressive posture around capital deployment outside of the M&A inorganic stuff that you've been considering all loans.
And again, we're looking at that.
Also the assumption about how our how our stock price is now at.
You have to get partner above above 30.
Math in the return start to get less attractive to us. So that is something we're looking at but again, our preferences is growth and strategic initiatives.
We're reluctant to spend that in light of improvement in earnings coming from the right side.
Capital, but at this point in time.
Got it actually just one last one sorry, just on that point.
<unk>.
Fair and comfortable to say that with the growth pipelines you have today and with some excess cash still likely be normalized that you could stay under $10 billion without materially altering your your strategy for the duration of this year or next or or do you think that you would think about differently.
Yes, yes.
We're not targeting a specific timeframe to hit but I think youre right, we still have $750 million.
Cash and even in with a little bit.
Later loan outlook.
We're looking at potentially up to two years.
At that pace before we would naturally cross.
Great. Thank you guys.
Thanks, Mike.
Thank you and the next question is coming from Russell Gunther from D. A Davidson Russell your line of lives.
Hey, good afternoon guys.
Alright.
Do you have a view internally in terms of number of rate hikes, you're budgeting for and if so how are you guys thinking about deposit betas.
Early innings of a hike cycle versus later I know you expect it to be muted near term but.
We can move through a rate hike cycle potentially pretty quickly. This year has anything structurally changed in your view as to how deposit betas will perform in this cycle versus prior.
But that's a really interesting question I don't want anything on that.
Not very good at predicting what the fed will do so well tend to run a lot of different scenarios just to understand where our pressure points are on the on the beta side. The one thing that is different for US last last time around versus this time. It is one just our balance sheet mix is different especially on the liability side.
Where the last cycle, we had almost $1 billion worth of.
Of short borrowings debt and we were a net net borrower that flipped to where we have affect our cash position. So liquidity is much better than it was last cycle. So that gets a different view.
On how we handle deposit pricing.
Second thing is that in the last rate cycle, we had also.
Deposit product that was tied to fed funds.
And that had almost a $1 billion plus of the $5 billion for isn't it.
We have restructured that product so that it's no longer directly.
To the fed funds so again.
Management and the bank much more control over the timing of that of that pricing potential pricing increase.
We think on the beta side that there is just a different outlook that you have still depend on on how.
Tissue, how customers reacted that we feel like.
We can manage that in a little bit better in this cycle.
That's really helpful. I appreciate it.
And then just back to the asset quality discussion so certainly.
A good quarter in terms of how things have trended are you able to provide any additional color in terms of the increase the specific increase in the reserve. This quarter that you mentioned the $2 7 million.
And then any additional thoughts on what that qualitative adjustment attempts to capture for where that conservatism might manifest itself on the balance sheet.
So on the on the specific reserve there are a couple of credits that we are watching closely that resulted in that and did that add to specific reserves and we do expect resolution of that possibly in the second quarter, but I would expect also nobody nobody in the third quarter.
So that one will hopefully get that get cleaned up with that.
Significant additional P&L impact since we believe we have that mostly covered if not I'll cover.
On the reserve side on the <unk>.
I thought it was more general we our primary indicators.
Our unemployment and does look pretty good so we only looked at unemployment as an indicator for the forecast, we probably would not make any adjustments, but looking beyond that which we have the ability to do in our model, that's where some of the uncertainty comes in and that you just say character impacted in the way of unemployment and that dynamic works in this.
And this round of how the economy and how the macros playing out may not be as predicted and maybe it has in the past, but we're cognizant that there.
There's no specific area that.
That applies applies to.
Yes.
Necessarily a specific portfolio or right or bucket, but Brussels.
The Department turn on the news to talk about.
All things inflation from rates or to the commodities draws.
People costs those sorts of things. So we know we've got to be diligent attention.
Do the stress testing.
Within the portfolio.
We like all financial institutions are proactively monitoring.
I appreciate that guys.
Thank you sure. Thank one for me.
As you answered the kind of organic 10 billion in asset question I'd just be curious to get an update in terms of M&A your appetite geographic and business models that you are particularly interested in.
Any thoughts on the pace of those conversations.
Thank you.
We continue to have.
Active discussions.
This is Chris is a big reason why we gave you a game to be part of this team and we've got a foundation that we're building and then when you build a foundation that is focused on customer, saying good things about here as it relates to the J D power and building the processes necessary to put in place to focus on things like credit quality and safety and soundness and then.
Adding talent to the team both internally and externally all of those things represent.
The foundation for growth that we're optimistic about we.
We like this area of the country a lot that you put a pin in the math here and draw 200 mile Circle around rub Pittsburgh, you end up with I think around 60% of the population.
Of this country lots of middle market businesses, which is where we've been been core to for a long time relationship based markets that are that meet with our culture and.
Who we are as a company so all of those things give us optimism for the future, but our job is to execute every day and every quarter and deliver performance more similar to what we've what we've done this quarter and that's going to give us the opportunity for the.
Inorganic opportunities so when it happens we can't control, but we certainly are going to work hard every day to control the execution and delivery of performance is that's where we're focused.
Yeah.
Yeah.
Okay. Thank you and the next question is coming from Matthew Breese from Stephens.
Matthew Good afternoon nice.
Hey, good afternoon everybody.
I wanted to go back to the deposit cost discussion not specifically betas, but have you changed your core rates at all or promotional rates and maybe are you seeing customers start to get eager and asked for.
More often asking for exception based pricing.
We've mostly lowered ours.
Or if we could lower them over in the second half of last year. So there was not a lot of room I did mentioned that the restructuring that we did on this fully index.
Indexed accounts that only took that took place.
This is the first during the first quarter at the end of the first quarter and did result in a modest decrease in the overall rate of that book of business.
As far as infections go it's been you were.
We're meeting very frequently on that we've had less than a handful.
Outright requests from people to for right now we do it again, we do expect that.
To increase that so far and is it very late.
I think where we're seeing some of it is we've got a little bit of municipal business.
You see the counties and the cities and municipalities looking for things that look like transactional rates, but outside of that there's not that much of it at all.
Okay.
And as you can see the decline in interest bearing quarter over quarter is reflective of that.
Yes.
On the growth front it sounds like in the near term we should expect.
More consumer.
Consumer heavy growth versus commercial and I was curious you know beyond just the near term how much of that how.
How much of that change in mix shifted growth, what's coming in the door is strategic versus taking what the market gives you.
Should we expect more consumer base growth from from S&P.
I mean, we are a.
At our foundation.
In commercial banking and middle market commercial banking middle market commercial real estate banking.
We're really good at it.
Had an opportunity within our consumer book there was there was latent business there.
This is Chris the thing.
So pleased with is representative of expansion of customer relationships that do not look like.
Like transactional business, but really this is you've taken that deposit book that we have in and providing more products and service to those customers when they need it so from a strategy standpoint, it certainly was strategic.
And finding that opportunity and working hard and executing everyday on that opportunity, but it shouldn't it anyway lead you to believe that we are.
We're shifting our focus away from the commercial business, our commercial middle market and business banking business is critically important to us.
Have gone through some changes over the past few months, ensuring that we understand clearly what our credit risk appetite is and what the returns need to look like in our businesses and that gave us the opportunity to look at a couple of opportunities to make proactive decisions. There on some transactions that just didnt meet our hurdles our teams are highly engaged.
Exactly we produce as much commercial business this quarter as we did and actually year over year more commercial business. It just ended up with the makeup on the balance sheet looking a little bit different.
Got it and maybe just to follow up on that Kristine and in the spirit of learning a bit more about.
How you are going to change the direction of SMT can you give us a sense for the types of projects are.
<unk> been most using your time since.
Entering to CEOC, what are the top three or four priorities.
For you over the next you know not the near term for the next 12 to 24 months. So some of it has been around.
Building the team you may look and see.
One of our left.
Docks that were out there just just the amount of change we've had and the kind of a broader C suite.
Decorative.
Levels within the company and we will continue to bring in an enhanced cell there we're very focused on.
We have a transition of our chief credit officer role within our retirement coming up we're very focused on that role so everything around kind of building to tell the level and effectiveness of the team. We spent a lot of time focused on kind of all things commercial banking, particularly the loan origination.
And portfolio management process, we've got a project underway that's been going on for the past couple of months.
Defined internally as steel curtain and it gives us an idea of doing things right from a portfolio management of credit risk management standpoint, but at the same time working it seems to be more proactively engaged with our with our customers.
<unk> turn times and approved.
Effectiveness around the credit origination processes that work has gone really well from the standpoint of bringing our teams get together and connecting them, Dave talked earlier about growth in the eastern part of the state of Pennsylvania, and the operating in a more of a <unk>.
Consistent and effective way across our networks.
Pure foundation building relative to execution effectiveness, and then thinking more strategically about what growth could look like and where it could come from that's still relatively early days, but we know that that's the work that's happening now and exploiting opportunities. There we're doing work to continue to enhance our digital capabilities.
<unk> and digital effectiveness, so things like online banking and those sorts of things that will be.
That is that is to come but we're very very focused there and and then getting the name out in the marketplace.
I've talked to the team about it we need to be more bolt the idea of that J D. Power Award is a great example, we didn't have anything we can do it through the customers, where they surveyed or when they were we're surveying them or any of those sorts of things, but our customers the better things about us and our competitors customer set about them.
And I think we've been a little too humble and we have an opportunity to be more forceful predictably in here in western Pennsylvania in places like Pittsburgh, We've got great rate name recognition from the team.
Who the people are on the field and I think theres, an opportunity to take advantage of that so a little bit of a forceful outward approach relative to who we are in the market and now we're going to win a lot of work foundation really on.
More effective in the way that we execute and then building some talent.
All of the team.
Great.
We should all that commentary. Thank you that's all I had.
Thanks for the question I'd like to talk about it.
Thank you.
Next question is coming from Daniel Cardenas from appointing Skattergoods Daniel your line of lives.
Gentlemen.
Yeah Dan.
Quick question on.
I guess in regards to the securities portfolio.
The growth, we saw this quarter and expectations for perhaps some additional growth.
It does it does a rising rate environment really is that going to impact the timing.
The growth in the securities portfolio.
And the timing for me, it's more about the loan growth trajectory then.
Rate per se.
Okay. Good.
And then.
Any thoughts of moving some of that available for sale portfolio into held to maturity.
Component two to maybe smooth out the ups and downs of.
OCI.
Yeah Yeah.
We do have a smaller securities portfolio. So I still have you know.
We still have liquidity in the back of our mind never leaves so with a smaller securities book.
There's a little bit less room.
Park to move that to try to take advantages of that are we don't have plans right now to do any.
Along those lines.
And what's the duration on that portfolio.
Oh, that's right.
Three and a half year.
You may have before.
Alrighty then.
As we look at operating expenses and thank you for the guidance on where the majority of the increases going forward.
Be primarily in compensation.
Compensation line items or are there other items that.
You can see significant growth then is as you continue to grow the footprint.
And I would expect him to salaries is up yes. They did.
<unk> expense, that's probably where I see the largest dollar increase but we also have several initiatives underway that are on it.
System side, so with 50, some we'll see some decrease in that.
Ended up in the equipment and equipment data processing line.
Those are private to two or three primary areas.
Decreases.
Okay, and then last question.
For modeling purposes, how should I think about your tax rate for the remainder of the year.
We're staying right around 19 herself.
To the extent that we have a better pre tax.
From the rate increases to say how that materializes.
That 19 picture thoughts drift up.
By you know a quarter of a point or so hang on to that.
Mt.
Additional pre tax that we have is that you know that.
That came as a result of kind of a fixed amount.
Our permanent items.
And tax credits things like that but those aren't going to change much the rate will fluctuate depending on that so kind of like incremental incremental from here.
Any additional pre tax would be at the 21%.
Factored it in that way.
Okay. Good good.
And any any comments from customers regarding inflationary pressures impacting their ability to.
To meet their lending obligations okay.
Irene obligations I should say.
Yeah.
Don't know that there have been I've been out in the market quite a bit here recently and.
I think there is continuing.
Continuing concern over supply chain and labor costs.
Access to capital.
Has not been at the forefront of those conversations.
But I would expect that to become more of a topic in the coming quarters.
You guys are reasonable.
Inclusion to ask that question given the current environment with inflation.
Yes, certainly you're thinking of that in our portfolio review board processes with our customers. Those are the exact questions. We're asking how are you planning where those things what do you see happening.
And how much more or I guess, how many more rate increases do we have to see before you begin to get.
Maybe dig a little bit deeper into the loan portfolio than what you have done so far.
Well, we're doing that now we're looking at all of our deals on the front end and then through the portfolio management annual review process quarterly review process to see what impact increasing rates will have from a stress perspective on EBITDA or NOI on real estate deals so where are we.
Built that into our process.
Okay, Great I'll step back thanks, guys. Thank you thanks, Dan.
Thank you and there were no other questions from queue at this time.
Okay, well listen thanks for the great dialogue and your interest in our organization.
Again, we're very proud of.
Performance, we delivered this quarter, we're certainly proud of the recognition we've received and we look forward to talking to you again soon and in the meantime, we're going to go back to work. So thank you.
Thank you ladies and gentlemen, this does conclude today's conference you disconnect. Your lines at this time and have a wonderful day. Thank you for your participation.
Yeah.