Q1 2022 Bank of Marin Bancorp Earnings Call
And thank you for joining bank of Marin Bancorp's earnings call for the first quarter ended March 31.
I am Andrea Henderson director of marketing for bank of Marin.
During the presentation, all participants will be in a listen only mode. After the call. We will conduct a question and answer session.
At that time, if you have questions. Please press one followed by four on your telephone.
At any time during the conference call you need to reach an operator. Please press Star Zero. This conference call is being recorded on April 25th 'twenty to 'twenty two.
Joining us on the call today are Ken Meyers, President and CEO , Anthony Girton, Executive Vice President and Chief Financial Officer.
Our earnings press release, which we issued this morning can be found on our website at bank of Marin Dot Com, where this call is also being webcast.
Before we get started I want to note that we will be discussing some non-GAAP financial measures on the call.
Please refer to the reconciliation table on page three of our earnings press release for both GAAP and non-GAAP measures. Additionally.
Additionally, the discussion on this call is based on information we know as of Friday April was the second.
2022, and may contain forward looking statements that involve risks and uncertainties.
Actual results may differ materially from those set forth in such statements.
For a discussion of these risks and uncertainties. Please review the forward looking statements disclosure in our earnings press release as well as our SEC filings.
Following our prepared remarks, Tim and Tony will be available to answer your question and now I'd like to turn the call over to Ken Meyers.
Thank you Andrew good morning, everyone and welcome to our call.
We completed the final step in our 2021 acquisition of American River Bankshares in March 2022, with the court system.
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This collaborative process brought together people from across the company to ensure a smooth transition for our customers.
With this milestone behind us our combined teams throughout northern California, the leverage are substantially larger balance sheet to drive long term growth.
We have already seen traction on this front in the first quarter of 2022.
With our expanded footprint yourselves.
We generated robust loan production in the quarter, marking our strongest first quarter in six years and continuing the momentum from Q4 and 2021.
Pipelines reflect steady loan demand hopefully economic activity across our markets.
Our bankers Re-energized business development effort.
Loan originations, excluding PPP totaled $15 million for the first quarter nearly double the year earlier level.
Commercial line utilization increased to 38% of total commitments from 34%.
Right.
Even as we pursue growth we remain vigilant and committed to our foundation of sound underwriting.
While provision reversals were due to improvements in economic forecast underlying credit loss calculations. We also saw improvement in our already strong portfolio of credit quality.
This was evidenced by a 10% improvement in special mention loans.
A majority of which was due to payoffs and upgrades to the positive.
Loan payoffs remain elevated in this competitive environment.
While we continue to win new business and deepen relationships with existing clients.
They choose not to retain loans that fall outside of the bank lending appetite.
In the long run this commitment to our disciplined lending principles have served us well as our loan portfolio continues continues to perform to all credit cycles.
Importantly, we have also begun to see the early benefits of a rising rate environment.
Yields on new loans, including real estate are increasing as long as yields on existing variable rate commercial loans in our portfolio.
We expect improvement across the portfolio falling additional rate increases the forecasted by beneficial.
This should provide support for our net interest margin and earnings as we progress through 2022.
Now I'll turn to first quarter results.
We generated net income of $10 5 million and diluted earnings per share of <unk> 66 cents.
Both were up 8% from the prior quarter.
Loan balances of $2 2 billion reflect an increase of $17 million of non PPP loans and $71 million in PPP loans forgiven and paid off.
Our quarter end, only $40 6 million of net PPP loan balances limit.
Deposits grew by 53 million to $3 9 billion with most of the growth coming from non interest bearing balances related to normal fluctuations in our customers' operations.
Noninterest bearing deposits made up 51% of total deposits.
The cost of average deposits at just six basis points.
The prior period.
As I noted credit quality remained strong with non accrual loans, representing only three 5% of total loans and classified loans unchanged from Europe .
We reversed $485000 in loan loss provisions and 318000 in provisions for losses on unfunded loan commitments.
Our board of directors declared a cash dividend of <unk> 24 per share on April 22022. This.
This represents the 16th consecutive quarterly dividend paid by bank of Marin Bancorp.
Finally, as we previously previously announced the.
The Bancorp and bank of Marin Board appointed occurred Vice Chairman Laurie Mcdevitt to the role of Chairman effective May 10 2022.
A director since 2007.
Nice chair since 2013, and the value bank of Marin customers since 1993, well he brings with him more than 40 years of experience investing in and managing commercial real estate and other businesses and run in Sonoma County.
Current chairman, Brian <unk> will remain on both board.
We thank Brian for seven years of tireless service.
Longer tenure of any chairman in the bank's history.
Now I'll hand, the call over to Tommy to discuss our financial results.
Thank you Tim.
Good morning, everyone.
We are pleased with our first quarter results.
We generated solid earnings by deploying excess liquidity into investment securities and new loan production and by managing expenses.
We have a strong balance sheet and we expect to benefit from rising interest rates.
As Tim noted, we reported net income of $10 5 million and 66 cents per share in the first quarter of 'twenty two up from $9 7 million and 61 per share in the fourth quarter of 'twenty one.
Net income also compared favorably to $8 9 million and 66 cents per share in the first quarter 'twenty one.
Write much larger provision reversals last year.
The $3 5 million provision reversal in the first quarter of 2021 and the 803022.
So right from improving economic forecast underlying credit loss calculation.
Net interest income totaled $29 9 million in the first quarter compared to $30 6 million in the prior quarter and $22 million a year ago.
The decrease from the fourth quarter was primarily due to changes in acquired loan amortization and accretion.
Our loan prepayment fees.
Lower PTC recognition and fewer days in the quarter.
Partially offsetting the combined effect of those changes was higher interest income from the larger investment portfolio as cash was deployed into securities during the rising interest rate environment.
The $7 9 million increase in net interest income over first quarter 'twenty, one was reflective of the AARP merger a.
A larger allocation of the loan portfolio to higher rate loans.
The deployment of cash into investment securities.
And the costs associated with the early redemption of subordinated debt in 2021.
Those increases were partially offset by a lower average yield on the investment portfolio.
The tax equivalent net interest margin was 296% this quarter compared to three 3% last quarter and $3 one 9% in the first quarter of 'twenty one.
Average yields on our loan and investment portfolios are beginning to reflect recent increases in interest rates at the same time, the PTC portfolio is winding down.
Non interest income totaled $2 9 million in the first quarter compared to $2 7 million in the prior quarter and $1 8 million in the first quarter last year.
The improvement from the fourth quarter was primarily related to payments on bank owned life insurance policies.
The improvement over first quarter 'twenty, one was mostly attributable to increased activity associated with the acquisition.
First quarter non interest expense increased 400000 from fourth quarter to $19 4 million.
Primarily due to the seasonal increases related to annual incentive stock based compensation and 401 contribution.
Salaries and related benefits.
Professional services also increased due to financial statements and acquisition related audit work performed in the first quarter.
Increases were partially offset by a decrease in acquisition related one time data processing expenses.
First quarter 'twenty, two relative to Q1 'twenty one.
The higher expense base from the acquisition.
Most notably salaries and related benefits of $2 3 million due to increased numbers of employees regularly scheduled annual merit increases and lower deferred loan origination cost.
The improving operating leverage I think for marine is evident in our 57, 5% efficiency ratio excluding merger related one time and conversion costs compared to 64, 6% in the first quarter of 2021.
The increase over 53, 6% in the fourth quarter of 'twenty, one is largely related to the seasonal first quarter increase in salary and benefit expenses.
During the first quarter, our strong liquidity position enables us to transfer $358 million in available for sale securities to held to maturity portfolio to partially insulate other comprehensive income and equity from future changes in interest rates.
The transfer has no impact on net income.
The rapid increase in interest rates during the quarter led to a $37 $3 million after tax other comprehensive loss associated with transfers and other available for sale securities.
That led to an 80 basis point decline in tangible common equity to 8%.
In closing we are in excellent financial shape shape.
With a strong balance sheet and ample liquidity to efficiently fund loan growth.
Return on assets would have been 101% without one time and conversion related costs compared to <unk>, 97% in the fourth quarter.
Likewise return on equity would have been $9, 96% versus 919% in the fourth quarter.
The increases in investment portfolio balances and yields over the first quarter are expected to provide a list of roughly $8 million per year in net interest income.
The bank is well positioned to continue delivering strong returns for our shareholders.
With that I'll turn it back to Tim to share some final comments.
Thank you Tom.
This is an exciting time of bank of Marin.
Our ability to successfully completed a conversion larger than our prior through combined is a testament to the skill and dedication of both the legacy bank of Marin and American River Bank.
Now that we are all under one brand and on one system, we look forward to a bright future ahead.
We are also optimistic about trends in loan demand.
Both of our bankers refocused calling activity post pandemic.
Addition of several new hires throughout our expanded footprint.
Originations over the last few quarters and some market improvements.
We are seeing returns on growth initiatives made prior to and in the early months of the pandemic with our Walnut Creek and San Mateo commercial banking offices, and the highest loan production in 2022.
As always we remain committed to our relationship banking model driving growth with disciplined London, and the durable low cost deposit base.
We will continue to outbound to other markets in the bay area and across the greater supplemental region. While also.
We are carefully managing expenses as we strive to serve our customers and drive value for our shareholders.
Thanks to everyone on today's call for your interest and support we will now open the call to your questions.
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One moment please for the first question.
Our first question comes from the line of Jeff <unk>.
Davidson. Please go ahead.
Thanks, Good morning, Tim and Tony.
How are you.
Good thank you.
Question on the on that.
American River converged with that complete.
Have you hit that.
Targeted cost saves with that or.
Clean quarter, but if I were to kind of back out.
Merger costs on expenses.
We are on track with the cost saves we had about 90% of those.
<unk> modeled them.
This year one.
I'll, let Tom elaborate but we are on track yes.
Yes, so I would say our run rate is reasonable for steady state.
Just like all companies, we do have some vacancies.
We are we are trying to fill.
In terms of staffing.
And any future investments that we're going to make those arent obviously are not reflected in here.
But as Tim said the acquisition costs were less than expected.
The acquisition stage are on target and we're not done with what we had planned to do in terms of our cost saves on the acquisition side.
So it's I.
I think.
We're in a good position for our operating leverage to continue to strengthen.
Okay. So if I kind of read that right there might be a little more stage that might mute kind of expense growth.
Kind of the core which still have increases.
The industry is seeing.
Wage inflation et cetera, and if you've got hires.
Thank you so a couple of quarters might be easy because you get the advantage of further cost saves to a degree.
That's fair.
Okay.
And maybe Tim just kind of circle around American labor that was kind of through conversion.
The retention been of those folks as Lockups expiring and maybe.
Secondarily kind of touch on the competition for lending kind of like that.
In the Sacramento area, but but kind of across your footprint.
Sure. So we have had some departures, which we've experienced and as normal in M&A activity.
And that's happened.
And a number of places, but we actually have made some very good hiring.
<unk> key.
But strong very strong managers, joining we've had added talent.
And so thats, helping drive loan demand helped drive the originations that we've seen over the last few quarters in terms of the ramp up for us.
Diving our pipeline activity it is very the.
Competition is very fierce out there.
Continue to hire to replace we have very talented bankers. So it's really not a surprise that others would seek to drive to take ours, but.
The goal is to just continue to drive higher talent and drive growth through quality people.
Okay. Thanks, I'll step back.
Our next question comes from the line of.
David Feaster with Raymond James. Please proceed with your question.
Hi, good morning, everybody.
Good morning.
Maybe just kind of following up on that same line of questioning just touching on the growth we got <unk> originations at a six year high.
Improving origination activity, we got new hires on the docket and hopefully slowing payoffs and paydowns in a rising rate environment. I guess, just how do you think about your growth outlook going forward do you think we should see growth beginning to accelerate.
And then I guess within that how do you think about your C&I contribution or just in general how do you think about the drivers of that growth.
As we look forward.
Thank you good questions.
Sure.
We are counting on where I say planning for a higher growth net growth. The payoffs as you noted has been elevated.
It's very competitive in the market, but we continue to add.
So the pace of origination.
So we certainly look for that number to improve some of these new hires are certainly driving that but also in a geographic footprint. So even though one of our <unk>.
<unk> had good loan growth that was actually because we were had a presence and relationships in Sacramento. So we look for our new market there to continue to help drive growth.
I'm sorry, it was the second part of your question.
Just kind of how are you.
So we are seeing competition.
Apologize as we continue to see over the last few quarters, adding a good number of new relationships and some of those are obviously the C&I. We've seen our C&I commitments go up that doesn't always get reflected obviously in outstandings, but we have a concerted effort to continue our calling efforts on C&I.
Okay.
That's helpful. And then maybe shifting gears to the margin I guess, maybe could you update us on your expectations for rate sensitivity just given some of the portfolio changes in the quarter and the CLO purchases and then just.
Combining improving new loan yields like you've talked about your commentary.
New better new securities purchases prospects of additional hikes, and an improving earning asset mix as you continue to drive growth do you think the margin is trough here.
We should start seeing expansion as we look forward.
Yes, I think I think we should see expansion going forward Q.
Q1 did have a lot of effects.
Yes.
We're based on fee amortization and accretion on.
Acquired loans.
There was some noise in the margin this quarter.
We did see we are seeing some improvements in rates on loans originated.
So.
But there is still as you know with the large CRE portfolio.
Loans or are some of our highest rates so.
Getting the lift over the existing portfolio rates.
We're still working through that I think future rate increases will really help with that.
Just to just to refresh our loan repricing.
Less than or equal to one year is roughly 20% of the portfolio and then within five years, 60% of the portfolio would turnover. We've got a small percentage of loans on floors that I think with the next increase we're pretty much cleaned that out and.
51% on noninterest bearing deposits and also the investment portfolio is throwing off a lot of cash flows. So as those get reinvested, we should see some lift as well so.
Yes, we are definitely asset sensitive and looking forward to future interest rate increases.
Okay. That's great. That's helpful. And then just maybe touching on credit more broadly I mean look you've got phenomenal asset quality, a tremendous track record in an extremely conservative approach to credit.
But just kind of listening to your prepared remarks talking about remaining disappointed it sounds like may be passing on some more deals perhaps just curious your thoughts on the competitive landscape and whether youre starting to see more pressure on structures or standards.
And if so where and whether you've you've begun tightening the credit box at all as a result of some of this.
Thank you.
Out in the market I see the structure of deals new deals looking similar to what we've been experiencing over the last year or so if youre talking about some of the payoffs that have happened from third party refinancing I would say those in some cases have been down a structures, where we just say that doesn't make sense for bank of Marin.
I'm not don't want to disparage my my competitors, so I don't see it necessarily worsening on new deals per se in terms of our approach we're not tightening right now I think obviously, we always as you just pointed out.
Our conservative approach to credit underwriting but.
We will continue to look for deals very similar to how we have.
Okay.
Helpful. Thanks, everybody.
Thank you. Thank you.
Our next question comes from the line of.
Matthew Clark with Piper Sandler. Please go ahead.
Hey, good morning.
Good morning, Matt.
Yeah.
Maybe just a.
First on the securities purchases in the quarter can you give us a sense for the expected yield on those purchases.
And then.
How that compares to the opportunities you might be seen since quarter end in terms of rate.
Yes, I'd say that.
That was we were putting those on an increasing rate. So obviously the once we put on towards the end, where we had higher yields than the ones. We put on at the beginning but.
On average.
Yes.
The yields on that those purchases compared favorably by category to the where we added them to the portfolio. So.
I would say as we as we continue to deploy cash.
Going to get the benefit of those rising rates.
Okay, and then on the earning asset mix.
Obviously, an unfavorable mix shift this quarter securities contributing more to earning assets.
Relative to loans.
With.
Some additional PPP runoff.
<unk>.
And the deposit growth you ended the quarter with do you feel like that.
Loan to earning asset.
Percentage might decline one more quarter before it starts to migrate higher.
Boy that's.
Tough question, we've got we're rebuilding the pipeline and the loans on the loan side.
Because we've had some really good activity.
But I'll, let Jim speak to that so there might be timing as always.
Uncertain on on window loan originations come through but on the investment side.
We're really trying to make sure that we're staying fully invested.
Retaining ample liquidity to move that into loans.
As soon as needed so.
I'll turn it over to Tim to talk about that pipeline continues to be robust as you know we don't give guidance on that from a timing of that is always hard to predict but.
We expect to continue the trend we've been on.
Okay, and then Tony.
Got it and then Tony maybe in terms of the contribution of both purchase accounting accretion in the quarter and PPP as well in terms of fees. If you have the two numbers.
Yes, let me see if I can find knows.
There were there were a lot of moving parts up and down so.
Let me come back to you on that path.
Okay, and then just to just to clarify on the expense outlook.
First quarter tends to be seasonally higher and it tends to trail.
Down in terms of the run rate historically.
If we exclude the merger charges and you have an $18 $8 million run rate is it fair to assume that youll.
<unk> with.
Prior year's that run rate should come down.
In addition to the benefit of the cost saves.
Yes.
Yes.
Okay.
Okay, and then last one from me just on the buyback it slowed a bit this quarter.
Was that just.
Taken into consideration.
The OCI swings or was that more a function of beans.
On the economic outlook, and whether or not your appetite might increase from here.
I would say, yes, it was being cautious due to the impact of rate rising rates. It was also due to the continued rise in our deposit base and the potential impact of that.
Capital ratios and so we just have taken a cautious view to see where those trends go but it certainly is something we will continue to consider yes.
Okay. Thank you.
Our next question comes from the line of.
And two trial with Stephens. Please proceed with your question.
Hey, good morning, Tim Good morning, Tony.
Hey, Andrew.
Hey, if everything sounds good on kind of the loan growth side, but I wanted to touch on the other side of the balance sheet I guess, just with kind of the fed's current stance just was hoping to get kind of updated expectations around deposit growth throughout the year.
So.
We continued to see deposit growth in the first quarter.
Subsequent to the first quarter, there is always fluctuations, but we have seen a little bit.
Do you have a decline.
Whether that's going to stick or not I'm not sure and obviously, we we.
<unk> thought that the deposits would run off quite some time ago assessed.
Especially the money that was.
The positive associated with PPP.
Lending program, but.
If you look back at what happened during the financial crisis, there was a big lift in liquidity throughout the system.
And back then everybody thought that.
As to liquidity, which was going to go out and everybody.
Percentage of noninterest bearing deposits would go down but in fact ours are data and so if we look at.
We look back at history, and then try to extrapolate what that might mean, we could see some deposit outflows, but in general we are on an upward trend.
We've been on a pretty steady upward trends throughout the cycle.
So.
I think we have some <unk>.
Probably be some rate shoppers that that go out there and start investing in Cds were not a big CD shop, So we won't compete on.
On that side, but.
I think in general most of our customers are operating account customers and there are a lot of inflows and outflows.
On an average.
An upward trajectory.
So we'll see but.
It's a new day.
Okay I appreciate the color.
I was wondering if I could just domestic securities Bill. It was good to see some of that liquidity got deployed this quarter I think there was about.
$170 million or so of cash on the balance sheet at the end of the period.
I guess.
One do you view that as kind of a normalized cash position.
And then two just updated expectations.
We see more of a build in securities as we roll throughout the year or is the repricing benefit more of just kind of the role of the Securities book.
Yeah, I think if you look we've been kind of paring down that cash position for some time and we did invest opportunistically. So.
It's coming down in and my preferences to take it down a little bit more.
We've got plenty of contingent liquidity that we've never used.
And we still have $180 million in off balance sheet deposits. So.
We're not concerned about liquidity so.
Running a little bit closer on the cash position.
Should be completely fine.
Long as rates are are going up or it at an elevated place.
We will continue to invest.
Okay.
Perfect I appreciate you taking my questions.
I would also echo the earlier comment I think some of them.
The moving pieces in the core loan yields this quarter would be helpful.
I'll step back thanks.
Yes.
Once again to queue up for a question. Please press one four on your top key pad. Our next question comes from the line of toward launch.
Okay VW. Please go ahead.
Hey, guys good morning good.
Good morning Stuart.
Okay.
My questions have been asked but Tony maybe just one more on the margin and.
And how youre kind of thinking about it.
Given the expectation for a little bit more aggressive fed.
This year.
You see a 50 basis point hike in May.
Are you thinking about deposit betas, this cycle, and just given where the 57% loan to deposit ratio.
Do you anticipate having to move rates how are you guys thinking about.
The direction of your interest bearing deposit costs from here.
Yes.
Always maintained.
Low cost of deposits and I think we will continue that discipline.
I think in.
The entire industry I think youll, probably see the heaters.
Lower this cycle than they have been in last cycle.
But I think for US we model pretty conservatively based on.
On.
Historically and where we are.
Have recently run our historical study and <unk> seen that our base our actual betas are lower than what we've been modeling. So we are going to lower the betas in our models going forward.
Just so that the numbers that you see in the Qs will reflect that but.
Yes, I would say.
It's not going to be a lot different than in the past, we're going to be slow to respond because like I said those operating accounts.
That's where we focus our energy and make sure that we have enough liquidity to absorb the fluctuations of large movements in the operating account.
Okay.
Alright.
And maybe one more kind of an accounting question.
To circle back to the OTI, but given we've seen rates move further in this quarter is there any more appetite for remixing from fast in the held to maturity and how are you thinking about other potential hedge book.
From <unk> this quarter.
I mean do you have plans to try to limit that further and how does that ultimately play.
Play into your buyback appetite.
<unk> $35 million left on your authorization.
Yeah. So.
Yes, we run stress tests on that and we've obviously run them on on the revised Ams portfolio.
And are pretty comfortable with where we stand now after that movement.
Yeah, what I would say is probably additional purchases for the time being our most likely directed to the HTM portfolio as opposed to just so that we won't exacerbate our existing physician, but I'd say, we're comfortable with where we are now we have a good capital cushion for that.
And.
<unk>.
As Tim said.
We will take a look at the share repurchases.
Going forward in light of.
How quickly things move in and whether or not <unk>.
With that.
Okay.
Very helpful. Thanks for taking my questions.
Yes.
Our next question comes from the line of Tim Coffey with Janney. Please go ahead.
Great. Thank you good morning, and thanks for taking my question.
Thanks, Tim.
Hey, how are you doing the payoffs that youre seeing.
What percentage of those would you say are related to rates.
Arent interested in versus structures that you still want you want no part of.
If you look at the biggest chunk of the pay offs in the quarter. So a good chunk of it was still just people selling underlying assets are paying off with cash.
A fairly good portion of the entire amount.
Look at the third party refinancings some of it was raised but the largest one in there was a restructuring.
We have continued to see that.
And certainly we want to be competitive, but we're disciplined as you know Tim so.
The largest chunk of that 33rd party refi in the quarter was over structure as opposed to rate.
Okay.
And then follow on to that.
Cynthia you have fallen out of the pipeline as it related to price or structure.
Probably a combination thereof meeting some summer one some of the other.
It's a competitive market but.
The team, our new head of commercial banking Nicky Sloan.
The new regions, Dave really.
<unk> been able to deliver a lot out of the pipeline over the last couple of quarters. So.
Youll more solidly about that migration.
Deals in the pipeline to close loans.
No absolutely we have in the first quarter was very strong on that front.
And then I guess my last question would just be kind of on your thoughts on M&A going forward.
The sizable conversion.
Sure you.
And now that Youre on either side of that what do you think about the landscape.
In terms of the overall landscape.
My thoughts are probably no better than yours I do think we'll always continue to have conversations but you know.
All banks are sold not bought so I can't control the timing of that but right now we're just.
Yes.
Happy that we completed this conversion the team did a great job, we're happy to be operating under one banner on one system and excited to see how we can grow that combined platform. So while that's always a topic and always something to consider at the time there is nothing going and we want to focus on organic growth in the meantime.
Okay.
Good thank you very much.
Thanks.
I do have the answer to that burning question.
So the.
Acquired loan amortization and accretion had an impact of 485000.
Fees on the SBA PPP loans were lower by 287000 this is quarter over quarter and then the prepayment penalties.
Were lower by 332000.
Versus the last quarter.
So if you guys want the absolute numbers I can spend those out versus via email, but those are kind of the that gives you a magnitude of the drivers of the differences between Q4 and Q1.
We have a follow up question from the line of Andrew Terrell Stevens. Please go ahead.
Hey, Thanks for taking the follow up and thanks for providing that tani.
I just wanted to circle back and can you just disclose where.
Weighted average new origination yields were coming on at in the first quarter and then Tim I know you spoke to some of kind of the lift in new loan pricing.
Are you able to kind of quantify to what extent, you've seen kind of new origination yields pick up so far.
Thank you.
Don't have specifics on that I mean, the yield and in some cases is pretty marginal incremental increase is pretty marginal at this point, but we continue to see that that rise and I don't have that weighted average number for your candor.
Okay No problem I appreciate it thanks. Thank you.
We have no further questions on the phone lines.
And we did have a couple of.
Webcast questions. So I'll just read those off the first one was any color on the slowdown in buyback pace in the quarter.
Your appetite might be for the remainder of the year with the stock in the low 30 percents on my answer would be similar to the question earlier, where we did take a cautious approach in the quarter. We will continue to look at that because of the ongoing impact of rising rates on the securities portfolio in OCI and the deposits, but certainly it's something we're keenly intra.
So then going forward, we just have to be cautious and make sure. We can do that without in a disciplined way.
Second question is going into Q2, what is the size of the pipeline and what are you expecting for loan growth for Q2, and the rest of the year. So.
The frequent callers on here no we don't give guidance it continues to stay robust.
And as I mentioned before the conversion of pipeline opportunities into closed loans has continued to improve and so we continue to be optimistic.
That is guidance, we don't typically give but thank you for the question.
There are no questions on the phone lines at this time.
Thank you very much. Thank you everyone for your questions and for joining us. Thank you.
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