Q1 2023 NMI Holdings Inc Earnings Call
Good day and welcome to the N M. I Holdings, Inc. First quarter 2023 earnings conference call.
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Please note. This event is being recorded I would now like to turn the conference over to John Swenson. Please go ahead.
Thank you good afternoon, and welcome to the 2023 first quarter conference call for National online.
I'm, John Swenson, Vice President of Investor Relations and Treasury.
Joining us on the call today are Brad Shuster Executive Chairman, Adam Poser, President and Chief Executive Officer, rubbing, the whaler, Chief Financial Officer, and Nick Real Nito our controller.
The actual results for the quarter were released after the close today. The press release may be accessed and minimize website located at national <unk> Dot com under the investors tab.
During the course of this call we may make comments about our expectations for the future.
Actual results could differ materially from those contained in these forward looking statements.
Additional information about the factors that could cause actual results or trends to differ materially from those discussed on the call can be found on our website.
Through our regulatory filings with the SEC.
Different to the extent the company makes forward looking statements, we do not undertake any obligation to update those statements in the future in light of subsequent developments.
Further north should rely on the fact that the guidance of such statements is current at any time other than the time of this call.
Also note that on this call we may refer to certain non-GAAP measures in today's press release and on our website. We've provided a reconciliation of these measures to the most comparable measures under GAAP.
Now I will turn the call over to Brent.
Thank you John and good afternoon, everyone.
I am pleased to report that in the first quarter.
<unk> again delivered strong operating performance.
<unk> growth in our insured portfolio and standout financial results.
And has started the year with tremendous momentum.
We generated $8 7 billion of NSW volumes and ended the quarter with a record $186 7 billion of high quality high performing primary insurance in force.
We achieved broad success and customer development.
<unk> to innovate in the reinsurance market.
And once again delivered industry, leading credit performance.
Yeah.
All in we generated $74 5 million of GAAP net income and delivered a 17, 9% return on equity in the first quarter.
At a time when turbulence across the banking sector has raised concerns about the availability of credit and capital.
We think that the strength of our performance in the broader stability and resiliency of the private mortgage insurance industry stand out.
From day, one we have focused on building Nashville, MRI, and a durable and sustainable manner.
With discipline and risk responsibility at the core.
We're proud to have provided uninterrupted support to over $1 6 million borrowers to date.
Helping to open the door to affordable and sustainable homeownership and communities across the country.
While at the same time, providing coverage and counterparty strength to protect against the impact of stress and the risk of loss in the housing finance system.
We believe there is broad recognition in Washington, the value of the national and the broader private mortgage insurance industry provide in this regard.
Working to consistently expand.
Access to homeownership and all the benefits it provides.
I'll also placing private capital in front of the taxpayer to ensure the safety and soundness of the conventional mortgage market.
Overall, we had a terrific first quarter and are well positioned to continue to lead with impact.
And drive value for our people, our customers and their borrowers and our shareholders.
With that let me turn it over to Adam Thank you, Brad and good afternoon, everyone.
National <unk> continued to outperform in the first quarter delivering significant new business production continued growth in our high quality insured portfolio and standout financial success.
We generated $8 7 billion of Niwa volume and ended the period with a record $186 7 billion of high quality high performing insurance in force.
Total revenue in the first quarter was a record $136 8 million and we delivered GAAP net income of $74 5 million or <unk> 88 cents per diluted share and a 17, 9% return on equity.
Overall, we had an exceptionally strong quarter and are confident as we look ahead we.
We have a talented and dedicated team driving us forward every day.
Our lenders and their borrowers continue to rely on us for critical downpayment support providing us with an attractive and sustained new business opportunity.
We have an exceptionally high quality and short portfolio portfolio.
By a comprehensive set of risk transfer solutions and our credit performance stands ahead.
Our existing borrowers are well positioned to weather stress with strong credit profiles significant embedded equity in their homes and most benefiting from having locked in record low 30 year fixed rate mortgages with manageable debt service obligations.
Persistency remained well above historical trend and has helped to drive continued growth in embedded value in our insured book and we continue to manage our expenses and capital position with discipline and efficiency building a robust balance sheet that is supported by the significant earnings power of our platform.
We do however continue to see risk in the macro environment and housing market.
Mortgage rates, despite a modest pull back over the past few months continue to strain affordability for many prospective borrowers and weigh on origination activity.
House prices have trended down from their peaks across most local markets.
Recent turbulence in the banking sector further highlights the potential for future macroeconomic volatility.
Against this backdrop, we remain proactive doing even more from a pricing risk selection and reinsurance standpoint, as the macro environment has continued to evolve.
In the first quarter, we again increased policy pricing and made additional changes to further manage our mix of new business by risk cohort and geography.
We also continued to innovate and find success in the risk transfer markets entering into a new excess of loss reinsurance agreement. During the period that provides incremental risk protection for policies originated in the fourth quarter of 2022 as well as those originated on a forward flow basis in the first and second quarters of 2023.
The deal serves to further extend our credit risk transfer program and with its success approximately 99% of our insured portfolio is now covered by a comprehensive reinsurance solution.
More broadly we remain encouraged by the discipline that we see across the private market.
Underwriting standards remain rigorous and pricing continues to ladder higher in view of potential macro risks.
Overall, we had a terrific quarter deliver.
Delivering strong operating performance continued growth in our insured portfolio and standout financial results. Looking ahead, we're well positioned to continue to serve our customers and their borrowers invest in our employees and their success.
And deliver through the cycle growth returns and value for our shareholders with that I'll turn it over to Ravi.
Thank you Adam.
We delivered standout financial results in the first quarter with significant new business production.
Continued growth in our high quality insured portfolio.
<unk> top line performance.
Favorable credit experience record expense efficiency and strong bottom line profitability and returns.
Total revenue in the first quarter was $136 8 million.
GAAP net income was $74 5 million or <unk> 88 per diluted share and our return on equity was 17, 9%.
We generated $8 7 billion of NII W and our primary insurance in force grew to $186 7 billion.
Up one 5% from the end of the fourth quarter and up 17, 5% compared to the first quarter of 2022.
12 month persistency in our primary portfolio improved again.
Reaching 85, 1% compared to 83, 5% in the fourth quarter.
Persistency continues to serve as an important driver of the growth in embedded value of our insured portfolio.
Net premiums earned in the first quarter were $121 $8 million.
Compared to $119 6 million in the fourth quarter.
We earned $1 4 million from the cancellation of single premium policies in the first quarter compared to $1 5 million in the fourth quarter.
Net yield for the quarter was 26 basis points and core yield which excludes the cost of our reinsurance coverage and the contribution from cancellation earnings was 34 basis points, both unchanged from the fourth quarter.
Investment income was $14 9 million in the first quarter.
Compared to $13 3 million in the fourth quarter.
We saw continued acceleration in investment income during the quarter as we deployed new cash flows and reinvested rolling maturities favorable new money rates.
Underwriting and operating expenses were $25 8 million in the first quarter compared to $26 7 million in the fourth quarter.
Our expense ratio was a record low 21, 2% highly.
Highlighting the significant operating leverage embedded in our business and the success, we've achieved in efficiently managing our cost base as we have scaled our insured portfolio.
We had 4475 defaults in our primary portfolio at March 31.
Compared to 4449 at December 31.
And our default rate held constant at 75 basis points quarter on quarter.
Claims expense in the first quarter was $6 7 million compared to $3 4 million in the fourth quarter.
Carrier activity remains strong and we again released a portion of the reserves. We previously established for potential claims outcomes in our Covid default population.
At the same time, we continue to take a conservative stance when setting reserves across our remaining default population.
Generally increasing the reserves, we established for both new and existing defaults in light of the evolving risk environment.
Interest expense in the quarter was $8 million.
Net income was $74 5 million or <unk> 88 per diluted share compared to 86 per diluted share in the fourth quarter and <unk> 77 per diluted share in the first quarter of 2022.
Total cash and investments were $2 3 billion at quarter end.
Shareholders' equity as of March 31 was $1 7 billion and book value per share was $20 and 49.
Book value per share, excluding the impact of net unrealized gains and losses in the investment portfolio was $22 56.
Up 4% compared to the fourth quarter, and 19% compared to the first quarter of last year.
In the first quarter, we repurchased $14 8 million of common stock retiring 667000 shares at an average price of $22 19.
To date, we have repurchased a total of $71 million of stock under the original $125 million authorization.
Hiring three 6 million shares at an average price of $19 87.
We have $54 million of repurchase capacity remaining under our existing program.
In the first quarter, we entered into a new excess of loss reinsurance agreement.
Covering policies originated in the fourth quarter of 2022 as well as those originated on a forward flow basis in the first and second quarters of 2023.
The tree is new for us providing excess of loss coverage for both an in force book of business as well as forward flow capacity for future and IW volumes.
Serves to further extend our comprehensive risk transfer program.
The new deal provides working layer loss protection from an initial attachment point up to a maximum 10 years did catchment and carries an estimated $6 two 5% weighted average lifetime pre tax costs.
Our continued ability to compress the cycle time between transactions.
Execute on favorable terms.
And secure coverage for both our most recent quarterly and forward flow production is particularly valuable as it serves to minimize our warehouse exposure and limited credit risk retained in our high quality insured portfolio during a period of increased macro uncertainty.
At quarter end, we reported total available assets under <unk> of $2 5 billion and risk based required assets of $1 2 billion.
Excess available assets were $1 2 billion.
In summary, we delivered standout financial results during the first quarter with continued growth in our high quality insured portfolio and strong top line performance.
Favorable credit experience and record expense efficiency driving strong bottom line profitability and returns.
With that let me turn it back to Adam Thank.
Thank you Ravi.
Overall, we had a terrific quarter once again delivering significant new business production continued growth in our high quality and short portfolio and standout financial performance.
Looking forward we're confident.
We have a strong customer franchise, a talented team driving us forward everyday and exceptionally high quality book covered by a comprehensive set of risk transfer solutions and a robust balance sheet supported by the significant earnings power of our platform.
Taken together, we are well positioned to continue to serve our customers and their borrowers invest in our employees and their success drive growth in our high quality insured portfolio and deliver strong performance for our shareholders.
Thank you for joining us today I'll now ask the operator to come back on so we can take your questions.
Okay.
Thank you we will now begin the question and answer session.
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At this time, we will pause momentarily to assemble our roster.
Okay.
Our first question comes from Aaron <unk> with Citi. Please go ahead.
Thanks, I was wondering if you'd talk a little bit about your.
Sure.
The stability of your earned premium rate it looked like it.
<unk> was flat with the prior quarter.
Ben kind of declining.
Along with the other industry participants for awhile, what's your outlook, there and with the competitive environment for pricing today.
Aaron This is Ravi I'll take that question.
I think we mentioned on our previous call that we expected that our core yield to be stable and I think we've seen that quarter over quarter. It remained at 34 basis points in terms of the trend going forward, we expect our core yield which strips away the impact.
Movements in our reinsurance cost and cancellation earnings.
Generally to be stable through the rest of the year with strong persistency in our recent rate actions really providing valuable support and I would say just bounce that somewhat with the exceptionally high quality of our current production, which in our rate risk based pricing environment, just naturally comes with a different.
Rate profile.
Yes, so we expect core strength that trend in our net yield will probably depend on our reinsurance activity and also our loss experience because profit commission fluctuates with changes in our ceded claims expense and that's that's going to be a function of how the macroeconomic environment develops but.
<unk>, we still see stable yields going forward.
And then Aaron you also asked about the pricing environment, it's an encouraging environment still we're we're seeing broad discipline remain across the market.
Particularly as the risk environment continues to evolve we have generally observed and have been able to achieve that.
That rates continue to harden and ladder higher with.
With increased macro volatility remaining in focus.
It's an encouraging environment, where we're able to capture price, where we believe it is necessary and appropriate and it's coming through and contributing to <unk>.
So some yield stability that we're seeing.
Great. Thanks, and then maybe on the production side.
Are you expecting kind of the typical seasonal increase in the second and third quarter and.
There's a.
Pretty sharp decline I guess year over year.
But because of the rate environment.
Would it be a similar level of decline are you expecting or maybe up about less than a little bit.
Yeah, why don't I touch on the market size and then we'll talk about how we see the pattern developing four for us.
As you know the private MRI and IW opportunity is driven by the size of the total origination market, particularly purchase origination on our last call. We shared our expectation that we would see total purchase origination volume this year of roughly one two to one three trillion and that that would translate to a private.
Market size.
And then we said give or take 300 billion and our expectation remains.
<unk> the same today.
One caveat that forecasting mortgage origination volume in a period of increased interest rate volatility is.
It's always challenging but.
But we see 2023 developing in line with the expectations that we had shared on our last call and it remains our perspective as for our performance first and foremost we're delighted with the results.
That we achieved in the first quarter and we do see a sizable.
Sustained opportunity to continue supporting our customers and their borrowers and really an opportunity to continue to write a large volume of high quality high return high value business going forward in terms of specific developments through the year. We do obviously have seasonal patterns with our second and third quarters typically coming in.
<unk> then the <unk>.
First in the fourth and we expect that to remain the case in 2023.
Great. Thank you.
Our next question comes from Rick Shane with J P. Morgan. Please go ahead.
Hey, guys. Thanks for taking my question. This afternoon sort of a strategic question.
There are a lot of focus on the final apology a long time, we're watching your company go through sort of the transition on the gas curve and becoming a mature.
Business with market share on the origination side at parity to close to parity with your peers.
The insurance in force moving in that direction.
This is a long tail business and I know that you can manage it with a long horizon as you move through that S curve, what's going to change in terms of how you think about the business.
Will you use capital in different ways either too.
Enhanced returns or <unk>.
Reduced risk.
Yes, Rick it's a great question, Ryan and it's one we certainly think about with frequency.
I'd say add before our goal has been from day, one and remains the case now to manage our business with discipline and risk responsibility.
We could be a successful viable and long term counterparty for our customers and honor the obligations that we make to them.
Across all market cycles, and so that's that is goal number one building a business in the way that we have that's infused with that perspective of discipline and risk responsibility puts us in a position today, where we have an incredibly strong franchise.
That's provided US right, we translate that franchise into strength of balance sheet built on our platform.
Significant earnings power and consistency.
One of our key goals, particularly as we're in a period of potential volatility is to make sure that we preserve all that we've achieved so far and that we can deliver similar consistency for our customers for their borrowers for our shareholders for our employees going forward in terms of how our strategy might deviate boy.
I think our strategy is working exceptionally well today right. We look at it and as you said, we've we've really emerged as a leader from a customer standpoint, a franchise standpoint, we've maintained discipline around risk expenses and capital all along the way and so we are delivering returns profitability expense experience.
Default experience that stands ahead across almost every measure that you can tally and our goal is to preserve that.
That means we're going to stay primarily focused on the strategy that has worked well for us. We'll obviously make changes if the market dictates and demands that we do and we'll stay nimble I think we've proven ourselves enabled.
Able to do that in particular over the last few years as we've dealt with just natural volatility through the pandemic and then with shifts in interest rates and an emergence of risks on the horizon.
We will.
Yes.
I think your question gears towards M&A and the prospect for capital distributions.
I'll touch on both of them look we're in the enviable position today, where we're able to both fund the significant growth opportunity that we're achieving and that we still see on the horizon and at the same time be able to advance capital distribution opportunities and give our shareholders the ability to directly participate in the value that we're creating we see.
That that opportunity our hope is and our expectation is that that opportunity will continue to emerge for us as we go forward.
Beyond that in terms of taking our focus away from our core franchise, we set a very high mark for what we would say is additive to the semi business and are delighted with our focus and results today.
Adam Thank you very much.
Okay.
Your next question comes from Mark Hughes with <unk>. Please go ahead.
Okay. Thank you and good afternoon.
The expense ratio was there anything unusual in the quarter any one timers either way.
Any guidance you can give about expenses for the full year.
Yes, Mark this is Ravi certainly we were delighted in delivering a record low 21, 2% expense ratio in the quarter.
And back to some of the items that we've talked about in the past, which are still true today, we've got the smallest head count by far in the industry and we benefit from that and we've talked a little bit about our it platform, that's scalable flexible and efficient and the Tcs contract that's associated with it we had a step down in <unk>.
Expenses last year, and we're seeing that flow through and certainly our expense footprint is smaller than most of the industry overall and we're benefiting from those in this quarter, we had a little bit of benefit from lower deferred acquisition costs in the quarter and thats, what drove the quarter over quarter.
Change I'd say, we're always focused on managing the business efficiency efficiently.
We will see modest movement as we continued to invest in systems risk management strategies throughout the year, but we're happy with the performance this quarter.
No one timers, there is an accounting dynamic, but no one timers at all and as we look out over the remainder of the year.
We see strength in our operating expense performance will probably have some some modest growth as we progress from Q1 run rate.
Just as we're making investments in our people our systems risk management strategies, but all around no one timers in a really strong quarter.
So modest growth sequentially in the expenses.
Is it right Adam.
Yep, that's likely where we'll try and we will do our best to to not have that come through but our expectation is there are certain items were going to be taking honestly progressed through the year that we'll see a little bit of a growth pattern from our Q1 level.
Yeah.
Just looking at the.
FICO scores the loan to value kind of improvement sequentially.
Both measures youre talking about pricing being up.
Or are you just finding the kind of the higher quality risk as the more attractive niche at this point or is that somehow reflective of the broader market.
So look I think it's more reflective of our strategy in general we have for for a long period of time consistently focused on managing our mix of business.
Historically, we have been.
Probably the most conservative emigh provider in terms of the credit risk that will allow into our portfolio.
And that remains the case now that said, we're in the market everyday offerings support and solutions for our customers and their borrowers. It is our job to take risk, but it's also incumbent upon us to do that responsibly and as the macro environment is evolving.
One it means that we are using price as a means to shape our mix of business. It's something we've always done and we continue to do proactively now and we're also capturing incremental rate, where we believe it is necessary and appropriate both of those items are coming through.
Thank you.
Okay.
Our next question comes from Bose George with <unk>. Please go ahead, yes.
Yes, good afternoon.
Couple of things on your cures increased during the quarter and was that just from the Covid vintage loans and then.
<unk> per loan looked like it.
<unk> got would've been more conservative can you just talk about the drivers of that.
Bose. This is Ravi I would just say that cures have been.
Sort of a bright spot for us I would say that the cures had been sort of.
Both in our sort of COVID-19 related default population and across the board. So we're seeing nice cure activity.
Across the board and with respect to what we're seeing quarter over quarter. There hasnt been any major trends just been really high quality performance.
The thing that comes through there is also a bit of a seasonal pattern around it but we typically see is that in Q1, a large number of borrowers.
So.
We see in Q4, I should say a bit of seasonal deterioration as some borrowers redirect household funds to the holidays and then we tend to see a rebound in carrier activity in the first quarter aided by tax refunds, so theres a little bit of seasonal.
Dynamic there, but what was already said most of it really just traces to the quality of our book.
<unk> really focused on building, an exceptionally high quality and short portfolio and the value of that approach and our portfolio can be seen in the in the credit performance broadly thats coming through in <unk>.
<unk> in our in our tour activity.
I think you asked a second question about the.
The reserves that we're establishing.
Yes, yes, yes.
Sure on that.
Yes, I can give you sort of a detail here on the reserves, we've been establishing so I'll give you a little bit of background here.
Close to get to your question here.
As you know, we don't apply a blanket homogeneous reserve assumptions from quarter to quarter. So we look at every loan and its own risk characteristics and we individually evaluate model all of those defaults that we have in our portfolio. There were 4475 as of March 31, including the <unk>.
<unk> hundred 58, new defaults that came through in the quarter and while I would say the new defaults that emerged in Q1, just generally have similar attributes to those that have emerged in recent quarters in terms of say weighted average FICO DTI and LTV at origination.
Have a modestly lower mark to market equity position because of the price at all observe path of home price depreciation.
So we account for this both as a frequency and severity Matt matter when we're establishing our reserves.
I actually drove a portion of the increase you're we're seeing quarter over quarter.
There is also an issue with the reserve roll forward table itself. So when youre looking at the information that magnifies. This dynamic and we provide some of the detail in the footnotes. So in the quarter. We established a case reserves of $22 3 million for the $15 58, new defaults that came through in Q1.
<unk>.
And we established an additional $4 9 million of net <unk> reserves during the period, but this amount is calculated based on the entirety of the default population in case reserve position at March 31, which includes both the current period prior period cases.
Not just based on the new defaults in the period and so this dynamic kind of skews the current and prior period presentation on the face of the reserve roll forward table and by extension. The calculation you would run on the average reserve.
Our new <unk> that we're talking about so you can once you normalize for that by subtracting the $3 $5 million from the $4 9 million net <unk> reserve established in Q1 from the current period, you would get to really the true number which is really roughly about 15000.
And I know in.
And reserves are at new <unk> in the quarter.
Great that's very helpful.
Throw in one more follow up to Rick's question on capital.
As a dividend at some point.
Something you consider.
Okay.
Well, yes, I would say that.
We certainly.
Our thinking very thoughtfully about capital capital is a key for us.
Our philosophy broadly speaking and I'll hand, it over to Adam.
Jeff fill in here our philosophy is the same we tend to take a conservative stance, we manage our needs carefully.
Building access to all markets were being programmatic in our approach and we like the fact that we're in a pretty significant excess position and I say at this time holding an additional amount of excesses prudent given the given the given sort of the macro environment, maybe I'll hand, it to Adam here to talk about.
Capital distribution is something that is both a near term opportunity.
For us and also <unk>.
Long term opportunity.
And our long term expectation.
It is also not tied exclusively to our current repurchase program, but we think about what the future should look like in terms of additional authorizations, if we have excess capital and other forms of distribution right now we're focused on executing under the repurchase program that.
That we've been under since since last February we see it as a way for shareholders to directly participate in the value that we're creating but over time as we continue to perform deliver consistent operating results grow the dividend stream from our operating company are ordinary course dividend stream.
We may have an ability to introduce a common dividend.
But for now repurchase is our primary focus and and truth be told we're really excited with the success that we've achieved under our $125 million program to date.
Okay, great. Thanks, a lot.
Your next question comes from Geoffrey Dunn with Dowling and partners. Please go ahead.
Thanks, Good afternoon.
Bob.
Adam I wanted to ask about your comment about continuing to shift the cohort and geography mix as you make these underwriting changes going into a more challenged economic periods.
Is it entirely a credit decision or is part of what Youre doing a capital management decision as well our <unk> asset management decision.
No.
It's a good question, Jeff, obviously, theres <unk> implications for for the Decisioning. Both in terms of the charge that we're required to hold against the business, we're bringing on as it is performing and the risk that it will go into nonperforming status and see an.
An increase in the amount of capital we have to hold against it I would say all of it though comes into the mix, what we're really dealing with we're making a decision around I would say risk adjusted returns and capital allocation in this environment, where I think we all.
We're all anticipating that there'll be increased risk on horizon that there is greater potential for a downturn.
Paired with the ability we've.
What we've been able to achieve from a.
On a pricing standpoint, it has made the most sense for us to to skew towards higher quality risks in this environment.
When you say, we wanted to see what what price is available for us in similar risk cohorts in the future what our view.
Of risk is as well and where we can find.
The best opportunity for risk adjusted returns on deployed capital.
Okay. Thanks.
Next question comes from Eric Hagen with <unk>. Please go ahead.
Hey, Thanks, Good afternoon, I think it's a follow up on the last point you. Just made can you talk about your ability in this environment.
Target the same risk profile and maintain the same kind of ROE that you've been achieving in and maybe even like the kinds of limitations that you see.
And finding that balance just given the environment. Thanks.
Good question I guess, what I would note is that in any any particular period.
For a long time going forward from where we are today. The overwhelming majority of our financial performance will be driven not by the business. We're writing in those particular periods, but by what's already in the portfolio and so our ability to deliver.
Consistent Roe.
We have a goal of delivering.
Strong mid teen Roe.
Through the cycle. It doesn't mean that we will always be in the high teens and it doesn't mean that we will always be in the high teens at every single quarter. If stress emerge is broadly around us right there'll be some amount of that.
That comes through.
From where we are today right. Our ROE are driven by expense discipline the existing in force portfolio.
The benefit that we're getting from persistency in the enormous embedded value that that brings from significant credit and claims outperformance tied to the quality of the portfolio itself. What we're finding is that we're writing business today that has what we believe to be.
Strong risk adjusted return characteristics that are supportive of our long term return goals.
<unk> parent also though with.
We're writing business today, but we're sitting on a significant amount of excess capital I think in a period, where volatility wounds on the horizon having.
Our balance sheet with the strength that we do is a hugely valuable but we're also mindful that we need to manage the buildup of excess capital as we think about return potential going forward.
That's helpful detail.
Last question, just how would you assess the impact of the G fee cuts that were made earlier this year its impact on the business anything you see going forward related tracing back to that.
So this is Brad.
You are referring to the.
<unk> changes that were announced in January and just.
Became effective so in terms of the impact on the market, we don't expect that to be meaningful.
There'll be some shuffling of costs.
Born by different groups of borrowers, but we expect the overall split between public and private execution will remain the same and.
The mix of risk coming through the private market will be largely unchanged.
Yep.
Great. Thank you guys.
Sure.
This concludes our question and answer session I would like to turn the conference back over to management for any closing remarks.
Well. Thank you all again for joining us will be participating in the BTG housing conference on May nine the Truest Securities Financial Services Conference on May 20, <unk> and the <unk> Real estate Finance conference on May 24th we look forward to speaking with you again soon.
Okay.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.