Q3 2022 HomeStreet Inc Earnings Call
Good afternoon. Thank you for attending today's third quarter earnings release call Home Street Bank joining us on the call is Mark Mason CEO , President and chairman of the Board I would now like to pass the conference over to our host Mark Mason. Please go ahead.
Okay.
Hello, and thank you for joining us for our call today before we begin I'd like to remind you that our detailed earnings release and an accompanying investor presentation were filed with the SEC on form 8-K yesterday and are now available on our website at IR Dot homescreen Dot com under the news and events link.
In addition, a recording and a transcript of this call will be available at the same address following our call.
Please note that during our call today, we will make certain predictive statements that reflect our current views and expectations about the company's performance and financial results.
These are likely forward looking statements that are made subject to the safe Harbor statement included in yesterday's earnings release, our investor deck and the risk factors disclosed in our other public filings. Additionally, reconciliations to non-GAAP measures referred to on our call today can be found in our earnings release and investor deck.
Available on our website.
Joining me today is our Chief Financial Officer, John Mitchell, John will briefly discuss our financial results and then I'd like to give you an update on our results of operations and our outlook going forward John .
Thank you Mark good morning, everyone and thank you for joining us in the third quarter of 2022, our net income was $20 4 million or $1 eight per share as compared to net income of $17 7 million or <unk> 94 per share in the second quarter of 2022.
In the third quarter of 2022, our annualized return on average tangible equity was 14, 2% our annualized return on average assets was 91 basis points and our efficiency ratio was 68, 4%.
Our net interest income in the third quarter of 2022 was $3 million higher than the second quarter of 2022 due to a 30, 13% increase in interest interest, earning assets, which was partially offset by a decrease in our net interest margin from $3 27 to three.
The increase in the average balance of interest, earning assets was due to the high level of loan originations during the second and third quarter.
Net interest margin decreased two 3% as a 67 basis point increase in the cost of interest bearing liabilities was partially offset by a 27 basis point increase in the yield on interest earning assets.
The yields on interest, earning assets increased as the yields on loan originations during the third quarter were higher than the rates of our existing portfolio of loans and the HELOC adjustable rate loans increased due to increases in the index is <unk>.
Their pricing their space.
The increase in the rates paid on interest bearing liabilities was due to higher deposit costs higher borrowing costs and an increase in the proportion of higher cost borrowings used as our sources of funding.
The increases in yields on interest, earning assets and the rates paid on interest bearing liabilities was due to the significant increase in market interest rates during the first nine months of 2022.
Our effective tax rate for the third quarter was 23%, which is expected to be our effective tax rate going forward.
No provision for credit losses was recorded during the third quarter of 2022 as the benefits of the continuing favorable performance of our loan portfolio.
Any required ACL, resulting from the growth in our loan portfolio.
Going forward, we expect the ratio of our allowance for credit losses to our loans held for investment portfolio to remain relatively stable and provisioning in future periods to generally reflect changes in the balances of loans held for investment.
Our ratio of nonperforming assets to total assets remained low at 15 basis points.
Noninterest income in the third quarter of 2022 was consistent with the second quarter of 2002, as a $4 $3 million gain on sale of Eastern Washington branches was offset by a decrease in single family gain on loan origination and sales activities due to increase decrease in rate lock volume as a result of the effects of increasing.
Interest rates and lower loan servicing income.
The 0.7 million decrease in noninterest expenses in the third quarter of 2022 as compared to the second quarter of 2022 was primarily due to reduced head count due to the sale of five eastern Washington branches, Lower Commission and bonus expenses offset by higher marketing cost relate.
Two our promotional deposit projects and higher FDIC fees due to our larger asset base.
I will now turn the call over to Mark.
Thank you John I'd like to start my prepared remarks today by acknowledging the challenges.
Dented by the significant increase in short term interest rates this year and especially the rate moves over the previous few months combined.
Combined with our recent reliance on shorter term funding sources. The surge in rates is temporarily disrupted our progress toward reaching our financial goals. We expect the current pressure on our revenues both on net interest income and non interest income stemming from this fast moving and volatile rate environment will be the most.
Cute over the next quarter or two until our mitigation actions fully take hold and restore us on a path toward achieving our profitability targets.
I will expand on this further in my remarks today and I hope that these remarks as well as our answers to any further questions. You may have afterwards, we'll shed light upon the confidence we continue to have and where we have repositioned the bank over the last few years.
<unk> that we can achieve our financial goals going forward.
During the third quarter.
We grew our loan portfolio by $454 million or 7% and year to date, our loan portfolio has grown by $1 7 billion or 31%.
This growth was driven by a strong loan origination levels accelerated by a historically low level of prepayments in our multifamily loan portfolio the largest part of our portfolio.
Looking forward over the near term, we are expecting diminished demand for loans, mostly due to uncertainty regarding the economy and of course, the overall higher level of interest rates. Accordingly, we're anticipating only a modest rise in our overall loan portfolio for the fourth quarter.
Due to low levels of core deposit growth. This year, we have had to fund our significant loan growth with wholesale funding, both FHL be advances and broker deposits.
With significant increases in market rates already experienced this year and with anticipated additional increases in the near term our wholesale funding cost of river has risen dramatically and are expected to continue to rise as it became increasingly evident in the last few months that short term interest rates were likely to.
Rise much more quickly than we or the markets were originally expecting we began efforts to replace our wholesale funding with lower cost promotional deposit products, primarily certificates of deposit.
As a result of our promotional deposit activity and excluding the impact of our July sale of branches and deposits and eastern Washington, Our total deposits increased by 10% during the quarter.
We plan to continue growing our certificate in money market deposit balances going forward with a goal to substantially if not completely replace our current wholesale borrowings within the next two quarters we.
We are fortunate to have a valuable retail deposit franchise with customers, who will invest in certificates of deposit and money market deposit accounts at rates well below wholesale borrowing rates.
As a result, we are attracting and locking in longer term funding at favorable pricing.
Our deposit betas remain below historical levels with less than a 25% beta on our interest bearing deposits realized to date.
Through the end of 2023, we currently expect our interest bearing deposit beta to be less than 40%.
In addition to our ongoing organic deposit gathering and in an effort to accelerate our goal to replace our existing wholesale funding earlier. This month, we entered into an agreement to purchase three retail deposit branches in San Bernardino County in Southern California that will include approximately $490 million of.
And $22 million in lungs.
83% of the deposits today are consumers and 39% of these deposits are noninterest bearing.
Weighted average rate for all interest bearing deposits is currently less than 10 basis points.
We are excited about this opportunity to expand our footprint in southern California and members of my team and I have already met with the staff that these branches.
The deposit premium to be paid on this purchase is 6% and we currently anticipate the closing to occur in the first quarter of next year.
This acquisition is expected to result in an approximately 25 basis point improvement in our net interest margin.
While our yield on interest, earning assets has increased it is expected to continue to increase in the future the impact of the accelerated increase in market interest rates on our wholesale funding sources.
He is expected to cause a temporary decline in our net interest margin over the next two quarters as we work to replace existing borrowed funds with deposits.
More specifically if the federal reserve increases the targeted federal funds rate and additional 150 basis points over the next few months as it is currently expected in the market. We estimate that our net interest margin in the fourth quarter will experience a decline similar to the magnitude of the decline we saw.
This quarter the third quarter at.
At the same time, assuming one short term interest rates begin to stabilize in early 2023 in line with current market expectations. We continue to have success in our growing deposit base with promotional Cds and other products and.
And finally, we complete our southern California branch acquisition as well as anticipated in the first quarter of 2023, then we would expect our net interest margin to trough in the fourth quarter of this year and build sequentially throughout the quarters of 2023 and ultimately <unk>.
<unk> for our full year 2023, net interest margin that exceeds the level of our 2022 net interest margin.
Of course this is premised on all of the things I just described but this is what we believe will happen at this juncture.
The credit quality of our loan portfolio continued its strong performance during the third quarter and as John mentioned earlier the improvement in credit offset any required additions to our ACL, resulting from the growth in our loan portfolio.
In last quarter's earnings call I spoke at length about my confidence and how well home streets credit profile is positioned for the eventuality of a recession and or credit cycle.
Our portfolio is well diversified with our highest concentration in western states multifamily one of the lowest risk loan types historically.
Our delinquencies nonperforming assets and classified assets remain at historically low levels. Our portfolio is conservatively underwritten with a very low expected loss potential and we expect to perform very well relative to both the overall industry and our peers, if and when we face the next credit cycle.
I remain extremely confident of home streets credit quality.
The consistent rise in base treasury yields over the past 12 months combined with widening mortgage backed security spreads have driven rates on conventional conforming 30 year fixed mortgages were around 3% just a year ago.
Two over 7% today.
The single family mortgage industry is currently in the midst of the most difficult stage of the mortgage banking cycle and I suspect it will remain there for the near to intermediate term.
Today industry loan mortgage volume is at multi decade lows. So these conditions will not last forever, given the continuing low levels of new and resale home inventory and excess demand.
As those who follow home Street are aware, we made the decision approximately four years ago to significantly downsize, our single family mortgage banking business to one which fit our overall size and one which could withstand a low volume high rate cycles with minimal losses.
I'm happy to report our remaining single family mortgage banking business has performed very well since then.
And even today the origination activities produced minimal losses.
However, we are not immune to the headwinds facing the entire industry today.
During the third quarter, our single family mortgage banking loan volume and gain on sale revenues continued to decrease to levels that we now believe are unlikely to fall much further.
While we are continuing to benefit from the origination of single family mortgages and HELOC portfolio loans, we are not anticipating any significant increases in mortgage banking revenues in the near term.
So we anticipate the normal seasonal volume changes next year, starting at this low base.
We will we have and we will continue to take steps to manage personnel in this area to be commensurate with loan activity levels.
In spite of inflationary pressures, we were able to decrease our noninterest expenses during the third quarter to below $50 million. This is the result of our continued focus on efficiency improvement and expense controls throughout the organization.
As we grow our ability to leverage our existing operating expense infrastructure should result in improving operating efficiency ratios over time.
While these efficiency gains have been muted by lower gain on sale revenue as a result are at historically low levels of single family mortgage and multifamily loan production as well as reduced secondary market for portfolio of multifamily loans over time through growth and operating leverage we currently anticipate.
Beginning to achieve these efficiency goals in the second half of next year.
We do expect our gain on sale revenues to recover to normalized levels sometime in the future, but we are not planning such a recovery to take place in the near term.
Consistent with other banks, we have experienced a large negative swing in accumulated other comprehensive income or OCI and.
In fact, the OCI balance a component of shareholders equity has declined from a positive $21 million at year end 2021 to negative $106 million.
At the end of the third quarter.
The change year to date represents a sizeable $6 79 per share.
<unk> to our tangible book value per share.
While this negative OCI balanced does impact the level of our tangible capital today. It is not a permanent impairment in the value of our securities and it has no impact on our regulatory capital levels.
We have reduced the impact of current and future editions to negative OCI by restructuring our portfolio where possible to reduce our duration by 8% in the third quarter and we are now buying shorter duration securities when replacing our portfolio run off or increasing our holdings.
As I hope everyone knows at this point.
OCI related write downs of our securities portfolio will be amortize back to us over time as the bonds mature or repay or on the other hand should interest rates decline the.
Securities valuations will improve and the OCI write downs would reverse and in turn restore our tangible capital.
Given the earnings and cash flow or our bank, we don't anticipate needing to sell any of these securities to meet our cash needs. So we don't anticipate realizing these temporary write downs.
Our strategy and year to date growth is built the foundation for increased earnings power going forward.
Unfortunately, as a result of the significant and historically fast rising interest rates, we have not been able to achieve our near term profitability and return goals.
<unk> already discussed the detrimental effect that the rate environment has had and will continue to have in the near term on our net interest margin and associated interest net interest income as well as on a portion of our noninterest income from lower gain on sale activity from our single family mortgages, Fannie Mae U S and occasional permanent multi.
Family loan sales combined these factors will result in a suppressed level of earnings and profitability. During the next couple of quarters.
But importantly, we are already rapidly addressing the factors, causing pressure on our net interest margin and even as we have reduced our gain on sale expectations through 2023 to a level consistent with what we've experienced this year.
We see a path to achieve our prior profitability targets as soon as the second half of 2023.
So we view this current environment as having caused a short term delay to the financial goals I previously set forth in these calls.
All of that said, we continue to target returns on average assets in the 110 basis point range and a return on average tangible common equity in the high teens range for the second half of 2023.
For 2024, and beyond the ROA and ROE TCE targets move higher I.
I hesitate to be more specific given the many variables both positive and negative that could impact performance that far out.
Suffice it to say that generally we feel that the end to unanticipated significant increases in short term rates have pushed forward by about one year are planned accomplishment of what was our near term financial performance goals.
Of course, and this should be obvious by now achieving these goals assumes a generally stable economic environment current consensus views on rising interest rates and the yield curve and an absence of changes in law or regulations or other events or factors, which could negatively impact the success of our business strategy.
Finally in the midst of the near term noise and chaos and by that I don't mean to make light of it tempered the temporary suppression of our earnings and profitability.
I would like to have you step back and consider the bigger picture of what has taken place at home Street over the recent years.
After our single family mortgage business reorganization, which was completed in 2019.
And our subsequent efficiency improvement initiative, we entered 2020 with a goal to improve the quality and consistency consistency of our earnings and profitability for <unk>.
Year 2020 of course brought the COVID-19 environment and all of its unusual factors, but as we look back at where we were in 2020 and comparable with where we expect to be in the second half of 2023. The progress we have made in our strategic goals is remarkable notwithstanding this current temporary rate driven.
Disruption.
In 2020, we had a core ROA of one to two 3%.
And a core return on tangible common equity of 13, 4%.
But that included nearly $123 million of gain on sale revenue.
Which represented just over 34% of total revenues for the year.
The significant gain on sale revenues, largely driven by the refinance boom and single family mortgage banking due to the 10 year treasury yields falling to well below 1% and tighter mortgage spreads due to the commencement of significant mortgage backed securities purchases by the federal reserve in an attempt to spur the economy through the pandemic.
Nick.
As we look to the second half of 2023 should we obtain our financial targets. We would expect to obtain a return on assets of 110 basis points and return on tangible common equity in the high teens with minimal gain on sale revenue that we expect would represent only a mid single digit.
Percentage of total revenues for the period.
We have substantially reduced the contribution of single family mortgage banking to our earnings and we've replaced it with durable and growing portfolio net interest income.
We have grown our loan portfolio with high quality lower credit risk loans, we've created meaningful operating leverage to support our expected future revenue growth and we've used our capital wisely provide.
Provided for balance sheet growth, while returning excess capital to shareholders.
I understand investor anxiety and concerns for the future challenges that may come from persistent inflation.
Rising interest rates and credit risk from a potential recession.
I believe home Street is well positioned to address these risks if and as they occur I also believe our veteran management team has the experience to navigate all of these risks successfully.
With that this concludes our prepared comments today, we appreciate your attention John and I would be happy to answer any questions you have at this time.
Thank you Sir.
If you would like to ask a question. Please press star followed by one on your telephone keypad. If for any reason you would like to remove that question. Please press star followed by Tim and as a reminder, if you are using a speakerphone. Please remember to pick up your handset before asking your question.
Our first question comes from the line of one Jeff <unk> with D. A Davidson.
Your line is now open.
Thank you good morning.
Good morning, Good morning, John .
John .
Do you happen to have the <unk>.
Margin in that.
September month's average relative to.
The quarterly average.
Yes in terms.
Of that we produce.
The quarterly numbers.
So I guess.
Don't specifically provides a month by month changes and going through that stuff, but you can see as we talked about last quarter that there was a decline in the rate increases continue to.
Outpace what had been projected at that time, so we're trying to anticipate that and mark provided what the margins and the expected interest rate increases that we're going forward into the fourth quarter. So Jeff instead of talking about the month of September but I think we gave you better information in my prepared remarks by saying that we believe our margin.
<unk> next quarter.
We will be similar to our margin compression in the third quarter.
Got it.
Just modeling stuff, so, yes, John but it's just better information.
Sure.
Fair enough.
A question on that margin.
You've mentioned.
Yes.
You said some pressure the next couple of quarters, but I think you've alluded to.
Trough ing in the fourth quarter. So sequentially Q4 to Q1, you talked about some of the.
Some stabilization of rates.
<unk>.
Branch deal expected to close in the first quarter or some positive offsets.
Could you could you maybe clarify.
Expectation for margin Q4 to Q1.
Sure.
Some recovery is probably my best description.
With more significant recovery bigger.
Beginning in the third quarter, if we close and that biggest difference Jeff is closing.
Deposit deal in my remarks, I think I said our.
Current estimate.
Is that the deposit deal could improve our margin by about 25 basis points right. So if you compare that to our third quarter changed from the second quarter.
Right and.
So that if we close that deposit deal in the first quarter.
Being conservative, let's say, we closed late in the first quarter, the second quarter benefit could be about 25 basis points, and then recovery and other aspects of the margin sort of sequentially during the year next year.
Okay, and while we're kind of on the branch.
Discussion any other.
I guess further appetite look at around four for something of similar type transactions that you'd be interested in.
Absolutely.
The best thing, we can do for the company and this is.
Really regardless of the environment right now is to continue to improve our funding.
In this transaction.
Somewhat unusual right because it's a forced sale.
Typically people aren't selling.
Deposits with 40% noninterest bearing deposits right.
But they had to as a consequences there transaction as you can tell from our deposit premium we bid aggressively to get these deposits.
That pricing look much better as the year went on.
It was a complicated transaction that was negotiated.
Basically earlier in the year.
Okay got it and last one.
Yes about $3 million or so net non accrual increases any.
Tight or size.
Any sort of.
And just kind of characteristics of that increase linked quarter.
No.
There's nothing remarkable about the composition of the change and all of that really represents is a little volatility right. If you look at prior quarter numbers.
And the other thing.
Look at Jeff is just look at our delinquency levels are not increasing at all there is no goes up and the pipeline of delinquent loans.
Okay, but.
Again nothing.
I guess a trend or.
There wasn't a specific type.
Basically, saying some timing there fluctuation quarter.
Yes, I mean look there's always individual stories on individual loans right.
But this is not we don't see any trends in loan type or region.
Anything of that sort.
And it's not a trend I think it's just volatility our.
Levels are so low that any.
Small number just makes it go up a vitamin and thank all small $3 million means too.
Youre right.
We're going to track at all but I appreciate it guys I'll step back thanks.
Thanks, Jeff Thanks, Jeff.
Thank you for your question Sir.
Our next question comes from the line of Juan Matthew Clark with Piper Sandler Your line is now open.
Hey, good morning, guys.
Good morning, just one on the good morning.
The decline in loan servicing revenue.
I would've thought that would've been up with rates up can you give us a sense for what drove that decline and what's your outlook for that line item.
Yes.
Part of the decline is just the difficulty in hedging and some of the losses, we've had in our hedging activities.
And then the other is just going through the process of looking at.
The servicing revenues and our decay of our portfolio.
In terms of how it's affecting it. So there is a lot of small moving parts. There wasn't any one major thing that hit it.
But it was just a little bit lower servicing income and going through the levels we had.
So if you if you look back on page 15 of the earnings release.
It's much easier to understand when you look at the schedule in the top half of that page and you see that the.
The.
Servicing fees have fallen.
A little bit this quarter, but there is volatility in that line and.
Some of this is accounting because servicing fees are still accounted for on an as received basis as opposed to an accrual basis. So it actually matters, how many days or in a quarter and what the cutoffs are and if you look at the.
The volatility in that line.
It's more than you would expect given our portfolio that's more stable right.
Great, Okay, and then the.
Spot rate on.
Interest bearing deposits if you had it.
At the end of September .
Yes, I believe that was in.
And our book here, but let me check to make sure.
We have computed.
Let me look that up Matthew I will get back to you.
To make sure I have it right okay. Okay.
All good.
And then the 25 basis point benefit from the branch acquisition.
Our branch acquisition.
Can you give us a sense for it.
Assume that just using the deposits to replace borrowings but.
Can you give us a sense for what you're assuming to get to that 25 basis points. That's basically its pretty simple calculation right there costs versus our marginal borrowing cost.
Because thats what it will do.
Got it.
Okay and then the.
The noninterest expense side have been flat.
Go ahead I'm sorry.
In our deck.
Our investor deck on page 13, there's a page on interest bearing liabilities in the period in cost of deposits of 71 basis, which includes all of them, which I was trying to break breakout the noninterest bearing because he asked for interest bearing.
Well touch on but I would say overall, yes alright.
That's all right. That's all right 70 ones could I didn't see that.
Okay.
And then just on the expense guide being flat, but there's some mention of seasonal comp increase is that.
Guide of flat expenses exclude the seasonal increase in comp and <unk>.
Yes, so basically as we go from a historical perspective, we expect the first quarter to go up for the items. We mentioned in the past the 401K match. The FDIC excuse me of social security taxes and also at the end of the quarter, our normal raises which obviously with the inflation levels. We have are expecting that to be some pressure on the first quarter.
For next year.
So in total though.
That increase could be.
$4 million to $5 million range, three to $4 8 million.
Somewhere in the $3 million to $5 million at most.
For the first quarter.
And then as <unk>.
Eric.
As that declines it kind of flattens out.
Offsetting that stuff so.
Great. Thanks, Ken.
Thanks, Matt.
Thank you for your question.
Our next question comes from the line of one Tim Coffey with Janney. Your line is now open.
Hey, good morning, gentlemen.
Thanks, Good morning, Tim.
Hey, Mark do you have a targeted loan to deposit ratio for <unk>.
Or something that Youre looking to get closer to you, it's not an absolute target.
Sure.
We don't really like being over 100% you might imagine but.
Confluence of events and decisions has gotten us there.
We really would prefer not to exceed 100%, we think it's going to take us.
Sure.
Several quarters.
Maybe as much as a year to get back below 100%.
But as we look to be lower than where we are today right. So our refunded efforts, if you will replacing borrowings with deposits.
Our.
Are going well.
We may end the year at about 100%.
If we continue to be successful and we have priced our promotional Cds to be successful.
Uh huh.
Hopefully we can we didn't hold.
That number closer to 100% throughout the remainder of the year yes.
But we'd rather not be up here, it's too costly.
Right right now.
And then speaking about the promotional Cds, if I look at the rate sheet.
Those rates seem to be really in line with the market right now.
And <unk>, how many times did you have to change the rate sheet and what you are going to be our approach to that and <unk>.
So.
This is something that has been kind of surprising to me, we never changed our promotional CD rates for the entire quarter. You may remember on our call last quarter. We shared that we had three tenors a seven month, a 13 month and an 18 month promotional CD.
At 2% to two 5% and two 5% and we only change those rates this week.
We started at even lower rate.
And so everything that we raised in the quarter.
It was at these lower rates.
Only last week did we add 75 basis points to each of those tenors not because we werent raising money, we were still raising somewhere between three and $5 million a day, but we wanted to raise it faster before the next fed increases.
And so we've increased those rates by 75 basis points at each center.
<unk>.
<unk>.
Increased our daily acquisition rate, while initially almost double.
And we will see how that.
That works so we've been pretty pleased to be able to raise it a lot of money at meaningfully lower levels than borrowing costs.
Okay.
Do you anticipate being more active and changing the rates this quarter.
No.
No.
Yes.
I say that because we had such and we're still we were still having.
Reasonable success at.
<unk> 75 basis points lower than today, we simply want to accumulate it faster.
Before others raise their rates and so.
No no it could be wrong, but if our experience is similar to last quarter I don't expect to.
And particularly okay.
These next couple of raises hopefully our the last or near the last in this cycle.
Right, Okay that makes sense.
And then the the terms on the <unk> on the borrowings that you have this quarter I assume their sharp out how short of it.
Overnight, mostly.
I mean very short.
Okay.
Alright.
<unk>.
And then base.
Based on your comments.
The residential.
Gain on sale businesses.
Prolonged slowdown at this point.
Can we also just.
<unk> determined that our guests at the.
<unk> sales are also going to be.
Yes, well as well.
That's what we're that's what we are internally forecasting now my hope is that that business recovers faster.
But this year will be are currently expected to be our lowest production year.
<unk>.
Five years six years, something like that very low.
So we are internally forecasting a modest recovery in that production really modest.
But more of that recovery be it in the second half of next year and beyond so we are not internally forecasting.
Meaningful recovery until until then second half of next year.
And even then we're expected to be modest.
Hopefully were wrong right.
Our internal forecast are very conservative I hope.
But I think the downside risk is is pretty limited given how low the levels are.
Right right.
Absolutely Okay, well. Thank you very much those are my questions.
Thanks, Tim.
And I just wanted to follow up on a question earlier.
At September 30, the weighted average cost of deposits of our interest bearing deposits was 93 basis points.
Thank you for your question Sir.
There are currently no questions registered at this time. So if you would like to ask again a question star one on your telephone keypad.
Barring no additional questions waiting at this time, so I'll pass the conference over to the management team for any closing remarks.
Thank you all again for the.
Attending our call today and the great questions. We look forward to speaking with you next quarter.
Have a great day.
And with that we will conclude today's third quarter earnings release call for home Street Bank.
You for your participation you may now disconnect your line.