MGIC Investment Corporation Q1 2023 Earnings Call
Draw. Your question. Please press star one one again.
I will now turn the conference over to Diana Hagen.
Relations. Please go ahead.
Thank you Joelle good morning, and welcome everyone. Thank you for your interest in MGIC Investment Corporation, joining me on the call today to discuss our results for the first quarter, our Tim Mattke, Chief Executive Officer, and Nathan Colson, Chief Financial Officer.
Our press release, which contains mgic's first quarter financial results was issued yesterday and is available on our website at M. T G.
MGIC dot com under newsroom.
Additional information about our quarterly results that we will refer to during the call.
It also includes a reconciliation of non-GAAP financial measures to their most comparable GAAP measures.
In addition, we posted on our website our quarterly supplement that contains information pertaining to our primary risk in force and other information you may find valuable.
As a reminder from time to time, we May post information about our underwriting guidelines and other presentations or corrections to past presentations on our website.
Before getting started today I want to remind everyone that during the course of this call. We may make comments about expectations of the future. Our actual results could differ materially from those contained in these forward looking statements.
Additional information about the factors that could cause actual results to differ materially from those discussed on the call. Today are contained in our 8-K and 10-Q that were also filed yesterday.
If we make any forward looking statements we are not undertaking an obligation to update those statements in the future in light of subsequent developments.
No one should rely on the fact that such guidance or forward looking statements are current at any other time than the time of this call or the issuance of our 8-K and 10-Q with that I will now turn the call over to Tim.
Thanks, Diana and good morning, everyone.
Good start to 2023, delivering solid financial results for the first quarter.
And focused on executing our business strategies and financial strength and flexibility and strong risk management in furtherance of our long term success of the company.
Excellent position to serve our customers with quality offerings and solutions, while creating shareholder value.
In the quarter, we earned $155 million of net income or <unk> 53 per share and produced an annualized 13, 3% return on equity.
The main driver of our revenue our insurance in force grew by five 4% year over year, ending the quarter at $292 billion.
The year over year growth in insurance in force despite lower volumes of new insurance written reflects an increased persistency rate at the level of refinance activity in the market remains very low.
Annual persistency increased 82% at the end of the quarter up from 67% a year ago.
In the quarter, we wrote $8 billion, but then IW.
We expect our level of any debut in the first quarter is a reflection of a smaller MRI origination market, but also reflective of our market position as we took actions in the third and fourth quarters last year intended to address our views on the risks and uncertainties that I discussed during last quarter's call.
Specifically last quarter, we explained that we expected our Q4, our market share and likely decreased by a couple percentage points from the prior quarter.
The industry reported last quarter that was indeed the case.
We also mentioned in our last call that our Q1 2023 market share will likely see a larger relative decline from Q4 2022. We continue to believe this is the case.
We recognize that the loss of market share would be the potential trade off to that.
<unk> achieved the returns we believed reflective of the risk in the environment, where interest rates. It spiked affordability with stretched and home prices were expected to fall from their peak.
As a reminder, the time between taking actions and the resulting in AWP is not immediate.
<unk> leads and IW by a month or two on average.
What you see in Q1, and AWS is primarily a reflection of our views of risk return from late last year, while we won't comment on our current market position given competitive considerations in recent months, our view of the markets risk return began to gradually improve.
As a result, we expect our reported market share in the second quarter will be higher reflecting this gradual improvement.
Consensus mortgage origination forecasted revised lower interest rates remaining elevated and continued affordability challenges.
Although the overall origination market opportunity is smaller this year, we expect that with our new business, we write combined with higher persistency in our insurance in force portfolio will remain relatively flat this year.
While the affordability issues and high interest rates, we have put downward pressure on home prices.
Home price declines seen in the last six months or so have been more modest than many had forecasted.
I am cautiously optimistic that home price trends will continue normalizing and believe that a gradual normalization of home prices is healthy for the housing market and overall economy.
Taking a look at the credit performance that our insurance portfolio, our inventory of delinquency notices in our done delinquency rate continued to be at historic lows.
Credit performance of the 2020, and later box, which makes up approximately 81% of our risk in force remained strong.
We continue to be encouraged by the positive credit trends, we are experiencing on our existing insurance portfolio.
Our loss ratio was 3% in the quarter. This reflects reserves established kind of new delinquencies reported to us in the quarter offset by a re estimation of ultimate losses on delinquencies reported to us in prior quarters, which resulted in a favorable loss reserve development again this quarter.
Yeah.
In the quarter, we deploy capital to support new business and continue to return meaningful capital to our shareholders through stock repurchases and common stock dividends.
During the quarter, we repurchased $5 8 million shares of common stock for $78 million.
We paid a quarterly 10 cents per common stock dividend share for $30 million.
In April we repurchased an additional one 7 million shares of common stock.
Totaled $24 million and.
And the board authorized an additional $500 million share repurchase program.
<unk> per share common stock dividend to be paid on May 25.
For the last couple of years, we've been discussing our capital management strategy, which centers on maintaining financial strength and flexibility at both the holding company to create long term value for shareholders and at the operating company to protect our policyholders.
We routinely assess and evaluate the level of capital at both companies.
The level of capital is that we retain for future deployment versus returning to shareholders.
Position, both companies to achieve success bearing environments, both in the near term and the long term.
To that end earlier this week MGIC paid of $300 million dividend to the holding company.
Dividend enhances the liquidity position at the holding company enhances the financial flexibility of the company overall.
Our capital management strategy also includes a comprehensive reinsurance program, which reduces the volatility of losses and changing economic environments.
<unk> diversification and flexibility of sources of capital.
At the end of the first quarter approximately 85% of our risk in force was covered to some extent by reinsurance transactions and approximately 98% of the risk in force related to the 2020 through 2022 to 22 Bucks, what's covered to some extent by reinsurance transactions.
With that let me turn it over to Nathan.
Thanks, Tim and good morning.
As Tim mentioned, we had another strong quarter, we earned $155 million of net income or <unk> 53 per diluted share compared to 54 per diluted share during the first quarter last year.
Adjusted net operating income was 54 per diluted share compared to <unk> 60 last year.
A detailed reconciliation of GAAP net income to adjusted net operating income can be found in our earnings release.
The results for the first quarter. Her reflect were reflective of continued strong credit performance, which has led to favorable loss reserve development and resulted in a 3% loss ratio this quarter.
Net losses incurred were $6 million in the first quarter compared to negative $19 million in the first quarter last year.
Our review and re estimation of ultimate losses on prior delinquencies resulted in $41 million of favorable loss reserve development compared to $56 million of favorable loss reserve development during the first quarter last year.
The favorable development in the quarter was related to new delinquencies from 2021 prior.
I was curious on those delinquency groups continued to exceed our expectations. We've continued to make favorable adjustments to our ultimate loss expectations.
In the quarter, our delinquency inventory decreased by 6% to 24800 loans compared to an increase of 2% last quarter.
In the quarter, we received 11300, new delinquency notices compared to 11900 last quarter and 10700 in the first quarter last year.
Historically, the first quarter with seasonally good for credit performance. So what we saw in the quarter may be a reversion to seasonal trends that were largely disrupted starting in March 2020, with the onset of the COVID-19 pandemic.
During the quarter total revenues were $284 million compared to $295 million for the same period last year.
Net premiums earned were $242 million in the quarter compared to $255 million for the same period last year.
The decrease in net premium earned was primarily due to a decrease in accelerated single premium cancellation and increase in ceded premiums and a decrease in our premium yield offset somewhat by growth in our insurance in force.
The enforced premium yield was $38 seven basis points in the quarter down two tenths of a basis point from last quarter.
The in force portfolio yield reflects the premium rates in effect on our insurance in force and that's been declining for some time, but the pace of decline has been slowing in recent quarters.
As I mentioned on the call last quarter, we continue to expect the enforced premium yields to remain relatively flat during 2023.
Book value per share increased four 7% during the quarter to $16 57.
The unrealized losses in the investment portfolio narrowed by approximately $100 million, which benefited the growth in book value per share in the quarter.
Despite the headwinds from increased unrealized losses due to changes in interest rates and paying our quarterly shareholder dividend book value per share increased more than 12% compared to a year ago due to our strong results and accretive share repurchases.
While higher interest rates are a headwind for book value per share in the short term higher interest rates are a long term positive for the earnings potential of the investment portfolio and that is coming through in the results.
Book yield on the investment portfolio ended the quarter at three 2% up 20 basis points in the first quarter and up 60 basis points from a year ago.
Sequentially investment income was up $3 million in the quarter and up $11 million from the first quarter last year.
Assuming a similar interest rate environment, we expect the book yield on the investment portfolio will continue to increase during the year and approached three 5% by the end of 2023 as reinvestment rates remains significantly higher than the current book yield.
Operating expenses in the quarter were $73 million down from $74 million last quarter and up from $57 million in the first quarter last year.
The increase in operating expenses during the first quarter compared to last year was due in large part to $8 million in pension settlement charges this quarter compared to zero in the first quarter last year.
Going forward, we expect to incur settlement charges more often because as we previously announced we froze our pension plan effective December 31, 2022. However.
However, the level of those charges should be significantly lower for the remainder of 2023.
We continue to expect full year operating expenses will be down modestly in 2023 to the range of $235 million to $245 million. The same range. We provided in February .
Turning to our capital management activities.
During the first quarter the capital levels at MGIC and liquidity levels at the holding company continued to be above our targets <unk>.
Consistent with our capital strategy during the second quarter, we received approval and paid $300 million dividend from MGIC to the holding company and our board approved an additional $500 million share repurchase authorization, which expires on June 32025.
The additional share repurchase authorization reflects our strong capital position and outlook for continuing to generate excess capital at the operating company and to pay dividends to the holding company.
In the first quarter, we repurchased five 8 million.
Million outstanding shares of common stock for $78 million, and we paid a <unk> <unk> per share quarterly dividend to shareholders.
The holding company ended the quarter with cash and investments of $582 million.
In April our board authorized the 10 cent per share quarterly common stock dividend payable on May 25, and we repurchased an additional one 7 million shares for $24 million.
Our recent share repurchase activity levels reflect both caution towards the increased uncertainty in the current environment as well as the strong mortgage credit performance and financial results. We continued to experience and recent share price valuation levels that we believe are very attractive to generate long term value for remaining shareholders.
And with that I'll turn it back over to Tim. Thanks.
Thanks Nathan.
A few additional comments before we open it up for questions. We've been asked about the impact of FHA 30 basis point decrease in semi premium rates.
<unk> LLP, a pricing adjustment each announced during the first quarter.
We operate in a very competitive and dynamic marketplace, where several factors drive consumer behaviors and mortgage product preferences cost being one of the most important those factors with.
With multiple moving parts related to fully understand how these changes will impact alright, IW volume will continue to monitor evaluate and altera approach to the market as needed.
Lastly in April the Gse's published updated equitable housing finance plans plans.
Plans seek to advance equity and housing finance over a three year period include potential changes to the gse's business practices and policies. We welcome the opportunity to engage with the Gse's and other industry stakeholders responsibly expand access to homeownership and will continue to advocate for the increased use of private mortgage insurance and housing finance.
In closing, we had another successful quarter and a great start to a new year I am optimistic that the favorable credit and employment trends, we have been experiencing as well as the resiliency of the housing market will continue.
Comfortable with our market position and continue to believe that we are well situated to navigate the current environment uncertainties and deliver on our business strategies.
That operator lets take questions.
Thank you.
At this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced to withdraw your question. Please.
Please press star one again.
Please stand by while we wait for our first question.
<unk> is now open.
Hey, good morning.
First question just on the expense guidance does that range include the $8 million for this year or should we sort of add that to that range that you provided.
Hey, Bose, it's Nathan the full year guidance would be inclusive of the settlement charge that we incurred in the first quarter.
Okay, great. Thanks, and then just in terms of your when you think about the leverage going forward as the debt to capital range, where it is that which is historically fairly low kind of the run rate that you want to keep it at.
Yeah. This is Nathan again.
As we as we de Levered over the last year or two I mean, we've said that our target debt to capital ratio and kind of normal times is in the low to mid teens and I think right now were approximately 12%. So we're in a very comfortable range for us and don't foresee any meaningful increase in leverage in the near term.
Okay, great. Thanks, a lot.
Thanks, Paul.
Please standby for our next question.
Our next question comes from the line of Mark <unk> of Barclays.
<unk> is now open.
Yes. Thanks.
Follow up questions on Tim.
Tim some of your comments around.
Market share.
Just kind of wondering I think you mentioned that the risk reward has gotten a little more favorable from your perspective, you expect share to kind of increase in <unk> just wondering what's changed.
Has has.
One of your competitors commented on them.
Im kind of a hardening market and pricing moving up as the market kind of come come back to you kind of maybe price increases you've made.
Earlier that caused assured a fall off or are there other kind of changes that.
You're more attracted to the risk reward.
So mark it's a good question I appreciate it.
As I said in the comments, we made the majority of our changes really in the late third quarter early fourth quarter pricing last year, which we thought was reflective of the market.
The way I look at things.
I don't think much has deteriorated since then so.
It can be a combination of both of the market maybe it will take a little bit more towards us I've heard the other comments too I think we've observed some of that I think us also getting a little bit more comfortable with what's out there right now and it's been pretty oily.
I think some of the some of the stresses that we might have been concerned about six months ago, while still possibility it seems like a pretty orderly.
Falling out of HPA, which which feels good as well. So I think again, we make we made most of our actions early on I think that hurt us from a volume standpoint.
For this quarter in particular.
But I think that pricing in the market seems more constructive knowledge, which is a good thing for us to be able to get the returns we launch, which we have to stay disciplined on.
Okay got it.
My mix.
Question has to do with the expense ratio and I think.
Unless I'm interpreting that wrong term nascent Nathan the guidance around total Opex will still have you probably close to a mid twenties expense ratio, which is still pretty materially above where it had been for a long time kind of pre pandemic can you just talk about one of my kind of.
Reading that correctly and two kind of what what's changed to make the the expense ratio higher.
Yes Nathan.
I think a couple of things you are for the 2023 expense ratio I think you're kind of interpreting that correctly.
I think we do end up in the kind of 'twenty four 'twenty five 'twenty six range, depending on what happens with.
Net premiums, which again is somewhat dependent on losses due to the profit Commission dynamics. There. So it's hard to peg down specifically from an expense ratio standpoint, but it has drifted up over time a lot of that over the last few years as we've talked about at the time is making significant investments in our platform.
Think we've done a lot of those things that have really helped us understand the market better helped us continue to serve customers better but.
Clearly expenses are continue to be a focus for us and efficiency going forward will be.
And we will continue to be a big focus for us.
So I don't think mid twenties, where we mainly on this year I don't think thats as low as the expense ratio can go and that's something that we're obviously focused on everyday here.
Okay got it thank you.
Thanks.
Thank you please standby for our next question.
Okay.
Our next question comes from the line of Giuliano Bologna from Compass point. Your line is now open.
Congrats on a great quarter and thanks for taking my questions.
Following up on a similar topic on the expense side.
If I look at kind of what's implied by reiterating the guidance after being high in the first quarter is kind of $57 5 million per quarter on average, which actually is more of a $230 million run rate.
For the balance of the year.
I'm curious about the right way to think of that.
You mentioned it might be some additional.
Pension settlement related costs that flow through.
Is that kind of where the new base is that youll be growing from or how should I think about the cadence of that going forward.
Okay.
This is Nathan I do think we did expect some.
Higher first quarter expenses, we did expect.
Some level of settlement charges. The actual was higher than we were expecting there is also some other things that just happened in the first quarter.
Drive kind of Q1 expenses, a little bit higher things like payroll taxes and other things that are just higher in the first quarter. So I think the full year guidance is probably the right way to think about the full year run rate, but the quarterly numbers will have some variability to them and I think.
This year in particular, but even going forward, maybe a little skewed to Q1 being higher than some of the other quarters.
That makes sense.
Obviously <unk> been very active on the capital return front.
When we look forward.
When it comes to the buyback I'd be curious if youre thinking about.
The merit increase.
Increasingly question.
Yes.
In excess of votes required assets or if youre comfortable with your current question sets.
At the moment in terms of thinking about capital levels, the insurance company level.
Yes. So we ended we ended the first quarter with $2 $4 billion.
Excess to Pmiers, we felt like that was above our targets that ultimately prompted requesting and receiving approval on paying the $300 million dividend from MGIC to the holding company.
The operating company continues to generate significant amounts of capital.
So that's something that we've really had to actively manage but where we were post dividend, which is on a pro forma basis $2 1 billion at the end of the first quarter, that's still obviously, a very comfortable level for us.
So we've been consistently above our target levels and using large dividends from the operating company to the holding company to manage that.
But again, that's driven off of the strong financial results and credit performance that we've seen so we are taking this on a quarter by quarter basis to evaluate what we think the right things to do are capitalized.
To date credit performance has remained very very strong and the results have been strong and that's afforded us opportunities like we have to to return capital to shareholders and to continue to pay dividends to the holding company.
That's great. Thanks for taking my questions.
Jump back in the queue.
Thanks.
Thank you so much please standby for your next question.
Our next question comes from the line of Mihir Bhatia from Bank of America.
Hi, Good morning, and thank you for taking my question I wanted to go back to the questions around expenses and I am a little curious as to what can you remind us of like exactly what changed last year.
I ask that is I think you had three four years of expenses around call It 190 million.
The $200 million and then last year, you jumped up to this 235 to 40 range, which it sounds like it will be again from going forward from here from the comments on last night. So I'm just trying to understand what changed at all.
MTG to cause such a big step up.
On a go forward basis.
Joining me here it's Nathan.
I'd kind of point, you to probably three things.
One and we kind of went through this last quarter and at various times last year, but we did incur significant I think if my memory serves me about $25 million for the full year and pension related costs and settlement charges last year, which increased the expense level last year.
The other thing in our in our long term incentive plan the financial performance in 2021 2022, particularly on an ROE basis was very very strong and that has led to.
Additional expense under our performance based long term performance based comp plans.
<unk> has added to that a little bit versus years like 2020, with Covid and increased losses there were.
The performance based compensation expense was much lower as a result of performance that that was while still generating I believe 10% ROE is that you're not at the level that we've experienced subsequent to that and then I think the third is one that we started talking about it as early as 2019, which is just.
Making continued investments in our in our infrastructure and our data and analytics and our ability to perform well and be in the right positions in this market. So I think the combination of those things.
Led to an increase in expense last year, a little bit this year, but I think one of those things is really due to the.
The high performance that we've had from an ROE standpoint, if we do have periods that are more as expected some of that would just naturally be less as well.
Okay.
And then maybe just switching gears a little bit to your comments about just the risk reward.
Obviously as you mentioned the pricing environment has gotten better but maybe on the credit side just wanted to get your view on that.
Any specific buckets or areas of particular issues that you're concerned about on the credit side.
Just trying to understand like where you are on the credit side today versus maybe three months ago six months ago. Thank you.
I would say nothing really out of the <unk>.
Credit side, when I think about sort of an underwriting characteristics standpoint, right I think.
Other than if you think about the individual borrower FICO LTV, where they are I think we feel comfortable those dynamics. When you think about the I think the enhanced risk that we saw sort of Q3 Q4 last year was.
Likelihood of home prices declining, which creates an environment for higher likelihood of losses, especially if unemployment were to spike up I think the other thing that you see in this gets a little bit into credit, but more into the affordability issue is DTI right that DTI or more stretched than they were before.
I think we feel really comfortable with the profile of what we're seeing.
Obviously, we have ability to price for DTI as well so that makes us feel comfortable from a return standpoint.
Youll see a little bit higher DTI, obviously as a percent of our volume this year compared to say a year ago before interest rates Rose I think we feel generally comfortable with the FDA.
Sort of where we're at and especially the risk return, we can achieve being able to price for those characteristics.
And just my last question insurance in force.
Expect John's inflows to increase this year, just sitting where you are today thinking about your niwa versus persistency.
Or do you think like this.
I guess what are your expectations on insurance and plus for this year. Thank you.
Yes, I think I'd reiterate I think what we said probably on our last call, which we think it's pretty much going to be flat for the year. So I know a little bit down quarter over quarter. This quarter, but I think as we think about just normal seasonality within housing and I think we believe continued persistent team being sort of at a strong level. We'd say, we're still believe we're going to be flat year over year.
Are.
Thank you.
Sure.
Thank you so much.
As a reminder.
As a reminder to ask a question you will need to press star one one on your telephone please standby for our next question.
Our next question comes from the line of Eric Hagen from <unk>. Your line is now open.
Hey, Thanks, good morning.
Couple of questions here, the legacy book isn't huge but it is a chunk of the delinquency pipeline can you talk about how much of your reserve in Florida in the legacy book at this point, maybe how the mark to market LTV compares.
Some of the newer issue loans in the severity that you're expecting now whether anything has shifted at all.
And the second question is do you feel like there's any.
Like a threshold for costs in the reinsurance market at which you'd maybe look to change the risk profile of your target or even how you reserve for credit based on what you see in that market.
Thank you.
Eric It's Nathan on the first question relative to the legacy book.
You are correct that it's a very small portion of the risk in force at this point.
But it does make up a disproportionate amount of the new delinquencies that we receive and the delinquency inventory I think the one characteristic.
Yeah.
Kind of cohort of loans has particularly in our new delinquencies and in our delinquent inventory is that most of them have been delinquent six times or more.
We disclose in our in our supplemental information.
Statistics about new notices received in the quarter and the percent that were previously delinquent and on the OE.
Sorry, OE and prior to about 97% of those delinquencies have been delinquent before.
<unk> been a lot of those have been delinquent.
510, 15 times over that long period of time so.
What we have observed out of groups like that is that they actually have a much lower propensity to ultimately result in a claim and that we see a lot of churn from delinquent back to current back to delinquent out of that group.
So I think we think about reserving factors at a cohort level four four.
A notice quarters that were received so not separate factors for those types of loans, but I would say.
The key characteristic there it's just that we see a lot of those a lot of those items coming into the delinquency inventory and then coming out a month or two later and then coming back in a month or two after that.
But our experience is that.
That results in a very low likelihood of claim for any one delinquency. So it wouldn't result in a necessarily a higher claim rate expectation on those items just because they are from those vintages.
That's really helpful.
Helpful.
Yeah go ahead, I was going to say relative to the question on reinsurance costs.
I think.
We have done we have done reinsurance deals, where we thought the cost of capital at least the cost of P. Myers capital was very very low sub 4%, we've done deals where that cost was somewhat higher. So I think we're comfortable transacting in a range of cost.
Bands there.
What's happened I think in the island market is just the availability there.
We did a deal last year, but subsequent deals it seemed at least observing were more difficult to transact.
The traditional reinsurance market has continued to be very active.
And I think still provides pricing that we would find attractive for deals. So that's obviously an area, where we placed 25% quota share covering our 2023 business.
And continue to have dialogue with that market around other risk transfer opportunities there. So.
The bright line level I'm not sure that that could give you good guidance on that but just to say that.
Levels right now in the reinsurance market I think still look pretty attractive.
Great. Thank you guys very much.
Thanks, Eric.
Okay.
Please standby for our next question.
Our next question comes from the line of Jeff Dunn of Dowling and partners. Your line is now open.
Thanks, Good morning.
Good morning.
Tim I don't remember when it was exactly but I think it's been at least a couple of years ago. When the company guided that we should expect a couple of years of increased expenses for tax spend.
And I'm wondering based on the conversations we're having now about expenses.
Is that partly because.
That program or that effort proved more expensive for longer or yielded.
Higher recurring expense than maybe you thought at the beginning of that effort.
Or are we talking about kind of more broadly spread higher expenses across the company.
Jeff.
Good question I mean, obviously there is some inflation from our biggest part of our costs are people.
And obviously with demand for talent.
It's making sure that we retain the best and the brightest to be able to serve our customers that that's something that probably has been.
A favorable headwind not a favorable tailwind for us last few years from an actual investment standpoint, I think we try to stay disciplined and what we wanted to have their I would say, it's safe to say that.
Nominally I think higher than where we thought we might have to be to invest in some of the analytical capabilities to continue to progress and to really feel like we understand the market.
And to really be able to organize the data the way, we think we can fully leverage it.
I don't think its a step function and I don't view it as something that.
That is that means that it's going to be in perpetuity, but I do think.
Compared to the comments, maybe a couple of years ago.
There is continuous investment you need to make at the level of are at right now at <unk> level, we were at sort of last coming into the year not necessarily that and Thats one of the things that as we think about the rest of the year, where I think we're going to be ultimately a little bit lower than we were coming into the year.
But it is safe to say that there is a tail there to that investment and I think in this operating environment.
We're always going to appeal some need to invest in the platform.
So I think.
Who is my thought process was we might kind of have a clip recovery. When you first announced that after a couple of years it sounds like it's kind of a.
Trickle improvement has efficiencies are gained some expense to decline.
But not not a return to that original absolute.
The original relative level.
I think Thats I think Thats fair.
I'll tell you being in this business myself for.
Since 2006, and the company being around since 66 years.
I think efficiency is something that we always have to be focused on first and foremost we have to serve our customers, but we have to do it in the most efficient way.
I can tell you that it's something that we talk about as a management team, making sure that we.
Our thoughtful about that.
But I don't anticipate a step down not in the near future here, but it is something that I would say that we're focused on.
Alright. Thanks.
Thanks.
Alright, thank you so much.
Please standby, while we compile the Q&A roster.
And just as a reminder to ask a question you will need to press star one one on your telephone.
At this time I would like to turn it back to Tim Mackey for closing remarks.
Thank you Joe I wanted to thank everyone for your interest in energy IC I would remind you that we'll be participating in a panel discussion at mortgage finance at the BTG housing conference on Monday May eight I look forward to talking to all of you in the near future Hope you have a great rest of your week.
Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Okay.
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Okay.
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