Q3 2022 Dime Community Bancshares Inc Earnings Call
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Hello, everyone and welcome to Don Community Bancshares, Inc. Third quarter earnings call. My name is Charlie and I'll be coordinating the call today, we will have the opportunity to ask questions at the end of the presentation, if you'd like to register your question. Please press star followed by one when your telephone keypad.
Before we begin the company would like to remind you that discussions during the school contained forward looking statements made under the safe Harbor provisions of the U S. Private Secretary Litigation Reform Act of 1995.
Such statements are subject to risks uncertainties and other factors that may cause actual results to differ materially from those contained in any such statements, including set forth in today's press release, and the company's filings with U S Securities and exchange commissions, which refer to you.
During this call references will be made to non-GAAP financial measures as supplemental measures to review and assess operating performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for financial information prepared and presented in accordance with the U S. GAAP.
Information about these non-GAAP measures and full reconciliation to GAAP. Please refer to today's earnings release.
I'll now hand over to host Kevin O'connor, Chief Executive Officer to begin Kevin. Please go ahead.
Good morning, Thank you Charlie and thank you all for joining US. This morning on our third quarter earnings call with me again, our student Lubow, our president and COO and Avi Reddy, our CFO .
We're proud to report this was another strong quarter for Dime community Bank, we generated net income of almost $38 million or EPS of <unk> 98, a share an increase on both a linked quarter basis and year over year.
The successful as a result of another impressive quarter of strong net loan growth.
Banding margins and prudent cost control.
Our results further illustrate our execution capabilities and the quality and structure of our balance sheet in a rising rate environment.
So again give full credit to each of our 800 plus employees on delivering record loan growth, 10% year over year EPS growth.
Capitalizing on our strong wide long pipelines, we've discussed on prior calls we grew net loans in excess of $450 million.
Loan growth this quarter was weighted towards multifamily and asset class that has performed extremely well for us over many credit cycles. The.
The quality of originations remained strong.
Yes.
One of the loan growth in the face of an uncertain economic environment.
As we gain as we begin putting together our budget for 2023 and beyond I'm confident our team will continue servicing and growing our loan portfolio over.
Over the past year, we bolstered done by hires of revenue producers and support staff from banks in our footprint impacted by merger transactions.
Still I'm sure will provide more color on this as well as our current pipeline and the mix and in the Q&A.
Yes.
Apart from strong loan growth, we've continued to execute well on each of our strategic plan priorities managing our cost of funds and prioritizing NIM expansion.
Currently managing expenses and Theres always maintaining solid asset quality.
Our Q3 deposit costs were only 23 basis points as we continue to outperform the industry and certainly our Metro New York City competitors.
Cumulative accumulative total deposit beta for cycle to date tightening has been approximately 10%.
A relatively lower betas have been driven by the significant level of noninterest bearing deposits on our balance sheet.
This remains the clear differentiator versus other community banks in our footprint.
While many banks across the country witness notable declines in DDA deposits. This quarter, we were able to keep balances fairly stable.
The improvement in our loan yields more than offset the increase in deposit costs and contributed to linked quarter margin expansion.
Our core efficiency ratio this quarter was 44% and on a year to date basis, we've operated approximately 47%.
Well within our stated goal of operating at sub 50%, regardless of the prevailing environment.
Asset quality remains very strong with npa's, representing only 34 basis basis points of total assets.
Abbvie will provide some detail on the loan loss provisioning was comments suffice to say, we feel very comfortable with the level of reserves and the overall health of our balance sheet.
Thus far we have not seen any meaningful early warning indicators of credit deterioration.
As you know Don credit losses have been well below the bank index over multiple cycles.
Underpinning our strong historical credit performance has been our bulletproof multifamily portfolio that comes through every cycle unscathed, including the pandemic can do shut out of New York City.
The LTV on this portfolio, representing 39% of our entire loan portfolio is less than 60%.
We continue to believe this portfolio will perform in any recessionary environment.
Turning to capital we continue to repurchase shares in the third quarter, while still supporting significant balance sheet growth.
Similar to the rest of the banking industry rising rates did impact the fair value of our <unk> portfolio contributing to a $23 million decline in OCI. Despite this tangible book value per share increased <unk> 14 this quarter.
Regulatory capital ratios remained strong as our tier one leverage stood at a healthy $8 61 for the third quarter.
As we said before our low risk balance sheet performed favorably and stress testing relative to the industry, providing us with the opportunity to grow our balance sheet and be active on the capital return front.
To conclude my prepared remarks, we had a strong quarter are.
Our balance sheet is well positioned to produce strong returns in any economic environment as evidenced by our quarterly and year to date ROA of over one 2% and this quarter's return on tangible equity of over 17%.
The quarter's results and momentum make me even more excited for <unk> future.
We are delivering on the opportunities in front of us as a true community commercial bank highly focused on being responsive to market conditions and our customers' needs.
As you can expect we're well underway in our annual budgeting process and look forward to sharing our 2023 outlook with you on our next call in January .
At this point I'd like to turn the conference call over to Javier who will provide some additional color on our quarterly results.
Thank you Kevin our reported net income to common for the second for the third quarter was $37 $7 million.
Excluding the impact of gain on sale of a branch property adjusted net income to common would have been $36 seven or <unk> 95 per share.
The reported NIM and the adjusted NIM for the quarter was 338.
This represents approximately nine basis points of linked quarter margin expansion.
A couple of housekeeping items net accretable balance from purchase accounting currently stands at approximately $1 8 million, while purchase accounting accretion was fairly immaterial. This quarter as mentioned previously that could be lingering impacts on the income statement in future periods, depending on payoff activity on premium and discount loans.
Included in the 338 margin for this quarter was three basis points of prepayment related income.
Given the significant increase in market interest rates, we expect prepayment fees to dry up in the quarters ahead.
We grew average deposits by over $300 million in the quarter, while keeping our cost of deposits relatively well controlled.
The average cost of deposits increased by only 23 basis points compared to the second quarter the spot rate on deposits at quarter end was approximately 47 basis points.
We are again pleased with our deposit beta significantly lagging the level of fed funds increases in the third quarter that said given the rapid pace of rate increases, we do expect deposit betas to increase from the low levels seen cycle.
Offsetting future increases in deposit costs as a repricing opportunity on our loan portfolio as you would expect given the current interest rate environment, we continue to proactively manage our loan pricing.
The rate on our total pipeline is approximately 525 and new additions to the pipeline on the high 5% low 6% area.
This is significantly higher than our existing loan portfolio rate of 433%.
Well there'll be a lingering impact of deposit cost catch up even after the fed stops hiking the medium to longer term opportunity for us is to replace our loan portfolio at new origination rates, which are approximately 115 to 100 basis points above the overall portfolio.
Turning on moving over to expenses core cash operating expenses, excluding intangible amortization for the third quarter came in at $47 9 million.
Annualized expenses on a year to date basis have been below our expense guidance for the full year 2022.
We remain highly focused on expense discipline, while making necessary investments in our franchise and have built this into our culture on a very granular level.
Noninterest income for the second quarter was approximately $9 4 million included in noninterest income was one 4 million from the sale of a branch property.
We expect revenue from the back to back loan swap program to pick up in the fourth quarter compared to third quarter levels.
I would also note that this quarter was the first time the company was subject to the Durban Amendment cap on interchange income, which reduced our interchange fees by approximately $600000 for the quarter.
This is the final material headwind, we faced from crossing the $10 billion asset regulatory.
Yes.
Moving on to credit quality, our provision for the quarter was $6 5 million.
The provision for the quarter was primarily due to a change in Moody's economic forecast that drive our loan loss reserve model.
In addition, we had strong loan growth in the quarter of over $450 million Needless to say, we are comfortable with the level of reserves on our balance sheet.
Our existing allowance for credit losses of 81 basis points, it's still above the historical pre pandemic combined levels of the latest assumptions.
During the third quarter, we bought back approximately 200000 shares at $30 97.
We believe share repurchases continue to be attractive given our current trading levels with that said growing our balance sheet and supporting loan growth and our clients are the first and best use of our capital. Please.
As a reminder, our balance sheet performed very favorably under stress testing and provides us ample flexibility to continue growing the balance sheet and returning capital to shareholders. We.
We will continue to manage our balance sheet efficiently and our tangible equity ratio of $7 70, including the full impact of <unk> and 836, excluding the impact of <unk> is within our comfort zone.
To conclude we look forward to ending the year strong and providing you our thoughts on 2023 doing our earnings call in January .
With that I'll turn the call back to Charlie for questions.
Thank you if you'd like to ask a question. Please press star followed by one on your telephone keypad. If you like to withdraw your question. Please press star followed by two when preparing to ask a question. Please ensure you're on mute locally as a reminder, that star followed by one on your telephone keypad now.
Our first question comes from Mark Fitzgibbon of Piper Sandler Mark. Your line is open. Please proceed.
Hey, guys good morning.
Just to clarify I missed what you had said about the pipeline did you say how large the pipeline is currently.
So hi markets do the pipeline is today $1 $8 billion.
Still very robust the average yield weighted average rate on that pipeline is about $5 28.
And it's really quite diversified at this point.
Probably the largest.
A portion of that is C&I at $425 million or owner occupied CRE has grown to 365.
And again getting back to the weighted average rates.
On the C&I portfolio, the average weighted average rate of 610 CRE portfolios that at about.
5% on the owner occupied.
So we're really moving away from multifamily the total multifamily pipeline at this point is about $300 million with only $170 million in new application in the.
Weighted average rate on that is about 520 and our rate today on the multifamily is it's about six and three eights, where we're really kind of cycling and rotating sectors now that we have a very strong C&I group and <unk>.
All our teams in place and.
Our plan is really keep multifamily relatively flat.
As previous time had done and really focus on growing the other sectors.
We think the multifamily portfolios are very.
Strong risk adjusted asset.
We do have other.
Now opportunities to really grow the C&I book, which is a floating rate portfolio and also provides us with more deposit balances so still very strong.
And overall, we're very pleased with the.
How the first half.
Quarter is started in the first month.
And we expect a very strong fourth quarter.
Okay, Great and then secondly.
Could you share with us the term and rate on the $520 million of federal home loan Bank advances you guys booked this quarter.
Yes.
The way our <unk> portfolio structures after.
Around $600 million and our book $150 million of that is longer term with 5% to six year duration. The cost on that is around 80 basis points. We've locked that in upfront. The remainder is really overnight to one month on the <unk> side, we kind of view that.
Asset liability management tool in terms of making sure we get the outcomes that we want so at the moment, it's fairly short term FHL book.
Okay, and I think you said the deposit beta has thus far been around 10% when you do your modeling.
For the full cycle, what are you assuming for deposit data.
Yes.
The way in most models work as they kind of based on historical experience was and so you go back and look at both legacy companies.
Blended data, we only know somewhere between 20%, 30% I think that being said if you go back in time and look at the first.
200, 5300 basis points of rate hikes in the past.
We've completely outperformed this cycle, so far with having only a 10% beta so.
The simulation that you see in our 10-Q, I'll, probably closer to 30% in reality I think we've set our guidance was around 45% cumulative total deposit beta through the cycle and we're reasonably comfortable with that at this point, obviously rates are up in a lot more than when we started giving the guidance initially, but I think we're still sticking with that 25% total deposit.
Over the cycle at this point.
Okay, and lastly, I heard your comments about the.
Tangible common equity ratio.
But optically it does start to look a little light if youre growing fast and buying back stock I guess Im curious how low would you be willing to take that.
Yes, we don't we don't really look at that Mark in terms of internal budgeting process.
<unk> really based on capital return on stress testing in our portfolio honestly.
It's as strong as it's ever been.
The first and best use of capital is always growing the balance sheet. So to the extent, we have double digit loan growth.
Do a little bit less on the buyback, but earning a return on assets of 125 as Kevin said.
In a high teens return on tangible equity theres going to be a lot of capital to do a lot of good things with it and we continue to believe the stock is very cheap at these levels given our lendings profile. So I think the other part of our capital structure, we do have preferred and our capital structure. The way, we do think about it as our tangible equity of 770 and even with the Aoc.
Impact and Thats very healthy when you look at us compared to the industry.
And I know you don't like to give margin guidance, but.
Should should we assume that based upon what you will see the margin showed sort of slowly rise from here with re mixing and repricing.
Yes, I think we've been we've been very happy so far mark with how we've performed I think we've always said, we're moderately asset sensitive bank. You'll go back the last two or three quarters. The margins up five basis points 10 basis points, we got 20% to 25% of our balance sheet floating rate loans, obviously when the February prices.
Those are going to go up immediately so you look I mean.
We're happy with how we've done so far again, the opportunity is really repricing the whole.
The whole loan portfolio and again I'd point, you to <unk> disclosures in our 10-Q, which really takes into account the full repricing of the whole portfolio just cash flows of assets and liabilities and you go to the start of the year our.
Our EV disclosure was the economic value of equity was around $1 2 billion back then.
Latest 10-Q.
Only been one seven and $1 8 billion. So we feel that we've created around $500 or $500 million of franchise value by keeping deposit costs as low as we can so obviously, we're monitoring competition, but.
Very happy with where the NIM is and again as Kevin said, our balance sheet is really set up to perform well in any in any rate environment.
Thank you.
Thank you. Our next question comes from Matthew Breese of Stephens, Inc. Matthew Your line is open. Please proceed.
Good morning.
A few questions maybe first.
Could you just talk a little bit about.
I don't know if I saw it the prepayment penalty income for the quarter and then how.
In this rate environment, how the duration on multifamily commercial real estate has changed just curious what do you assume duration of that book is now.
Yes, so I mean.
At this point, Matt prepayment fees are really dropped to two historical low levels I think.
In the last month.
We were down to about 4% on an annualized basis in June and July .
20% or excuse me in July and August we were in the 20% so as expected as rates have gone up and the market is really move.
In terms of.
Multifamily book.
Prepayments refinancings have dried up purchase transactions are on the wane. So.
And we expected that so.
Our view going forward as is.
We're not expecting over the next 12 months a lot of prepayment fee income.
The duration of what we are seeing is a lot of our book is is repricing at the contractual amount.
Most of our deals were.
Five plus five in the reprice it to $2 50 to $2 75 over the corresponding treasury and a lot of those are repricing the cash out market has really.
Dried up to some degree.
Good news is our average LTV on our portfolios.
About 59%.
<unk>.
It's a very strong and seasoned portfolio so.
That's really where we are on prepayments and what our expectations for the next 12 months or are very limited in terms of prepayment fees.
Got it and then just thinking about on the reset and.
As loans kind of go from rates, we saw 2017 2018 into the $5 to 6% range now.
Particularly for rent regulated multifamily, which hasnt been able to see the rent increases of the market rate apartments have you seen any stress or could you give us some color on debt service coverage ratios on those one resets.
Yes, so our average debt service coverage ratios are about one 5% on our multifamily book, which is as I said about 50, 859% LTV. So.
From that perspective, we have not seen any any stress our delinquencies are probably at all time lows in our portfolio. So.
We really have not seen any stress here.
In terms of underwriting.
Even going back several years when the whole rent control issue became.
Materialize in terms of New York City rent control increases we had at <unk>.
<unk> had increased our debt service coverage ratio requirements going back.
Because we expected that.
Landlords, who are going to have a hard time raising rent subsequent to that and then in the recent past obviously rents of the rent stabilization board have allowed landlords to increase rates.
Actually help but.
At this point, we have not seen any stress in our portfolio and going back in time as I said, we have taken steps to to really be a little more.
<unk> in terms of requiring higher levels of debt service coverage.
Of new originations going back to.
234 years ago and that's.
That's proven to be the right decision now.
The other thing I would say obviously you can look at our asset quality I mean, so far there's really nothing in the multifamily book that's over 60 days past due the other thing that I would add as you know back in 2018. So those are the loans that are resetting.
In 2023 rate, but that's the timing of legacy Damon.
Moved away a bit from the multifamily market to remix our whole balance sheet. So we only have around $350 million to $400 million of those loans that are re pricing next year. So it's a smaller piece of our overall portfolio.
We've done a lot of originations in the last year, obviously and those loans are not going to reset for another five years and those are very strong the SCR ratios going into this and we had the hindsight of the pandemic. So we have a lot of reserves and things like that associated with individual loans and when we make them six months of coverage things like that so we feel very comfortable overall.
Understood I appreciate all the color there.
Maybe going back to loan growth.
I don't have it at my finger tips, but the $1 $8 billion pipeline does that does that support the kind of growth that we've seen over the last couple of quarters call. It double digits to say at least.
And then within that.
Just thinking about some of the components two areas have been surprised by in terms of strength has been.
<unk> growth, which has been higher.
Higher than we've seen over the last year or two and then multifamily as well Im just curious overall loan growth and then those two portfolios in particular.
Yes, I think overall loan growth in the near term will sustain.
We look at if you go back to the mid summer I think our pipeline was about $2 $9 billion now not all of those deals come to fruition and make it through to a closing but.
The overall total pipeline is down as expected given given the current rate environment.
And.
But I think in the near term we expect to sustain.
That growth.
Over the longer term as I said earlier, we don't expect to see the growth in multifamily were really kind of rotating sectors and looking more towards the C&I book, where we have we are really.
Increased our population and our teams in terms of relationship managers and our opportunities.
And as far as the residential portfolio.
We are basically doing $10 million a month, it's really solid.
A paper residential arms.
The average yield or weighted average rate on that is.
Is it in the fives right now so it's a good asset we have no delinquencies.
A paper and we expect that to continue.
That's really all purchase paper, obviously the refinance.
Market has really dried up.
And it's.
For the most part.
Non conforming because the Fannie Mae fixed rate market, we sell our Fannie and Freddie fixed rate product into the secondary market, but that has really slowed down so its road rotated into portfolio arms.
And we.
We expect that to remain constant over the coming year, Yes, Matt I think those asset classes are web payoffs have slowed more than the relationship based portfolio rate.
Regular multifamily and residential so it is natural that you're going to see some additional growth there when payoffs slow down.
Yeah.
Okay, and then Avi just thinking about the others.
The components here.
Securities were down a little bit this quarter, a little less than last quarter, but I just wanted to get a sense for how much you're thinking about using securities cash flows to go into loans and if we should expect kind of a similar pace of decrease in the securities portfolio going forward.
Yes, I mean look I mean, we did purchase some securities.
Q3, I think we're always opportunistic around the securities portfolio I mean, we like managing the balance sheet with having around 8% to 10% in liquid assets that are not encumbered. So.
2023, we probably have $125 million of cash flows from the securities portfolio, but really 2024 and 2025 out of one big years for us because we did when we sold our PPP loans loss deal, we put that into three and four year treasuries and Thats all coming due so look in the near term and we feel like yields are.
Attractive on the Securities portfolio, we may look to purchase some towards the end of the year into next dealer because at some point rates go back down you know everybody is then going to be buying at a much lower yield. So I think we feel very comfortable on the liquidity side at the end of the day, we want to support loan growth and we want to manage our deposit cost. So it's kind of a dynamic moving target overtime.
Got it okay I'll leave it there I appreciate you taking my questions. Thank you.
Okay.
Thank you as another reminder, if you wish to submit a question. Please press star followed by one on your telephone keypad.
Our next question comes from Chris O'connell of Keyw, Chris Your line is open. Please proceed.
Good morning.
I think you're going to start.
Circling back to the multifamily discussion.
I hear you.
Long term growth.
Becoming more flat.
But in the near term I mean should that continue to be a pretty strong driver.
So far this year, it's the strongest category and it sounds like.
Decent pipeline in Prepays.
Fallen to near zero here.
But it could continue to be a good driver for the next couple of quarters.
We really control that.
Multifamily is really a commodity price.
Product and so we.
We have determined given our pipeline the size of the pipeline and the ability to diversify and focus a little bit more on higher yielding relationship type.
Businesses, particularly in the C&I world that.
Our pipeline can certainly support growth.
<unk>.
The kind of growth we've had over the last several quarters and and just be in our maintenance road.
On the multifamily side certainly it's elastic.
Price dependent and if we determine that.
We want to move in that direction, we certainly have the ability to to to.
To move pricing slightly and move origination growth.
<unk> so.
For us, we really are focusing on our relationship base.
Businesses like C&I owner occupied CRE that come with balances in total in total relationships.
And multifamily tends to be more of a transaction.
Good business good risk adjusted business good credit.
But we think.
This is the right time to kind of slow that part of the business down and move towards the other relationship based businesses, because we have the ability to to do significant amounts in those other sectors.
Got it.
That makes sense.
The multifamily that's on the portfolio.
That will be coming off.
Call it over the next 12 months or so.
Even with balances flat.
What's the spread in terms of whats falling off into what it is.
Repricing into.
Yes.
So what's coming off is that in the $3 75 range and what's what's coming on is in the mid five range. So.
There is a net pick up in terms of margin in that business.
Great.
And switching gears to the deposit side.
Good great flows this quarter in terms of product mix.
Yes.
We're moving forward here.
The rate cycle.
Are you starting to.
Do a little bit more in terms of.
The Cds and money market are you running any specials there are.
Strictly focused on.
Core deposit growth.
Yes of course, so we did a small special in the second quarter.
Our capabilities in those very successfully raised around $200 million pretty quickly then I think the one point that maybe gets lost not deposit numbers, because we don't have the breakouts on our press release, but we have growing business deposits by $200 million.
On a year to date basis.
We brought in a municipal probably by 100 to 150, we've seen some outflows on the consumer side a lot of it managed where we've allowed.
Higher cost Cds are higher cost money markets to lead the bank. So look we may go back into the market at some point to replace some of those lost consumer deposits, but I think underlying everything is growing business deposits in the consumer book is going to reach out.
It was one of the retail stability point, regardless at some point, it's probably down to 70% of our overall base. When we put the two companies together, we are probably closer to 40% to 45%. So I think I think in the near term I'm sure you could see some additional Cds on the balance sheet I think in the medium to longer term its too said growing C&I growing on our occupied it's really about growing the business.
Upon it and keeping our overall base is pretty low.
Got it.
And.
On the credit on the credit side, just hoping you could give a little color around the drivers of it.
Net charge offs this quarter.
Any.
Update us in terms of.
Any pockets of concern that youre seeing in the market, you mentioned pipelines pretty well diversified.
And I guess anything that youre seeing kind of in the local economy.
Trying to stay away from.
Yes, nothing of concern Chris I mean, the charge offs were 15 basis points is a pretty low there was a couple of operational items with the people with one or two PPP loans that we had so it wasn't really part of the core portfolio, we just need to clean up this quarter and moved on the balances on our PPP portfolio is down to less than $10 million.
So really a bit of cleanup nothing that we're seeing overall.
Our classified assets and Youll see this in our 10-Q disclosure.
Coming out.
Next month.
We started the year with a relatively higher level of classified assets than a lot of peers. Because we believe we did the right thing in terms of classifying some of the assets during the pandemic because they were not cash flowing when a lot of deals just put them in to watch we've actually seen around a $300 million decline in our classified assets.
Year to date, and so we're really not seeing any specific areas at this point and your credit is pretty good.
Stress testing is probably producing better results now than they were three and six months back so.
Not really seeing anything at this point.
Okay great.
And then on the.
On the opening comments I think I'm going I missed it but did you say did you change.
Expense guide for the year.
You are running.
Hello.
No I think we just said we're happy with where we are and we're running below the guidance for the year. We generally provide annual guidance and look to see I think we're going to beat the guidance and we're happy with that so we'll just see where Q4 <unk>.
Got it.
Alright, great. Thanks for taking my questions.
Thank you.
Thank you Chris as another reminder, if you wish to submit a question. Please press star followed by one on your telephone keypad now.
Our next question comes from manual matter of da Davidson. Your line is open. Please proceed.
Hey, good morning, just wanted to follow up on.
Thinking about the NIM trajectory.
With kind of the longer term repricing opportunity.
Would you see the NIM kind of.
Flat stabilize when the fed stops raising raising rates or kind of still be able to keep going if we assume the fed raises rates and stops could you still have some further NIM expansion.
Yes, Matt manually on daily give trajectory guidance on the longer term I think what we'd say is look we're moderately asset sensitive bank. We are happy with the performance. So far I think like everybody else when the fed stops.
Always a catch up in deposit costs, but that happens every cycle for every bank thats out there.
But that being said we're set.
The balance sheet up to perform in <unk>.
Environment and I think we.
<unk> guided to getting to a 125 ROA.
Much there at this point slightly below but it's really growing the balance sheet servicing our customers and producing the right return. So I think were overall comfortable.
We're going to work on making sure our deposit cost continue to lag the peer group and I think that's a focus for all of us over here.
Sure.
Okay I appreciate that.
I might have missed this on the end of period basis for deposits what kind of drove the slight decline I know you were up on an average basis.
End of period.
Yes.
Fully fund loan growth with deposits.
Okay I'll follow up yes, I mean, you always have customers at the end of the quarter, sometimes pull balances and maintain at the end of the day as you know average balances are what drive the income statement. So we're more focused on that.
I think in terms of our loan to deposit ratio, we're running at 296%, 97% right now we're comfortable where we're at it's all about supporting our customers than we'd ideally like to fund it in a 100% with core deposits that's always the plan.
Yeah.
Okay perfect. Thank you.
Thank you as a final reminder, if you wish to submit your question. Please press star followed by one on your telephone keypad now.
At this time, we currently have no further questions. So I'll hand back over to Kevin O'connor and the team for any closing remarks.
Well. Thank you everybody I appreciate your interest and time.
Hopefully from the presentations, we've made and we've answered the questions were pretty optimistic about.
The future for us.
Look forward to and if there's anything specific that has not been answered. Please give our vehicles. So have a great day. Thank you.
Sure.
Ladies and gentlemen. This concludes today's call. Thank you for joining you may now disconnect your lines.
Okay.
Okay.