Q3 2023 VersaBank Earnings Call
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Speaker 1: Good morning ladies and gentlemen and welcome to VersaBank's third quarter fiscal 2023 results conference call.
Speaker 2: following the broad liquidity concerns that permeated the US banking sector a number of months back after several...
Of course, each of these metrics would have been even better had it not been for the temporary spike in term deposit rates that compressed net interest margin in the quarter.
Finally, the fourth highlight for Q3 is that the growth in our point of sale portfolio remains strong.
30% year over year.
Overall loan growth was driven predominantly by the expansion of our point of sale business, which was up 39% year over year and 9% sequentially.
Recall sequential growth last quarter was 5%.
And I discuss the seasonality in our point of sale business such that growth is historically stronger in the summer months, we clearly saw this in Q3.
We continue to have significant additional upside to our growth in Canada through our.
Proposed acquisition of U S base turns bank holding Kurt.
This acquisition will be transformational for our bank.
Enabling us to broadly launched our unique and attractive financing solution to art remains an underserved market in the United States.
We continue to make incremental and meaningful progress towards receiving a decision from the U S regulators with a decision from our Canadian regulators to follow.
We are comfortable as we've ever been but the prospects for a favorable outcome.
We recognize this and it's been a protracted but necessary process, especially with the recent challenges experienced by U S banking sector.
We appreciate the continued diligence of our regulators and appreciate the patience of our shareholders, who we know are vigorous we are to bring this opportunity to fruition.
We continue to be as transparent as possible and guiding towards an expected decision date, which we are now targeting for aten rent this year.
If favorable we'll proceed towards Canadian regulatory approval and closing of the acquisition as quickly as possible thereafter.
The limited launch of the RP P program in the United States continues to give us confidence in what we can achieve with a broad national launch.
Are still limited, but accelerated rollout to the U S. R. P. P program continues to be encouraging in Q3, our U S portfolio grew by another 38% as we started to ramp up our second partner.
I'd now like to turn the call over to Sean to review our financial results in detail.
Sean.
Thanks, David.
Before I begin I'll remind you that our full financial statements and MD&A for the third quarter are available on our website under the investors section as well as on SEDAR and Edgar and as David mentioned all of the falling numbers are reported in Canadian dollars as to our financial statements unless otherwise noted.
Okay.
Starting with the balance sheet total assets at the end of the third quarter of fiscal 2023 were just over $3 98 billion up 29% year over year from <unk> 1 billion at the end of Q3 of last year and up 7% sequentially from $3 7 billion at the end of Q2 Q2 of this year cash.
Cash and securities at the end of Q3 were $271 million or 7% of total assets, 7% being unchanged from both Q3 of last year and Q2 of this year. Our total loan portfolio at the end of the third quarter expand to another record balanced $3 7 billion, an increase of 30% year over year and 7% sequentially.
Book value per share increased 12% year over year, and 3% sequentially to a record $13 55 sets. These increases were the result of higher retained earnings as well as fewer shares outstanding due to our share repurchase program, partially offset by dividends paid.
Our CET one ratio was 11, one 5% down from $12 five 1% at the end of Q3 of last year and 11 point down from 11, 521% from Q2 of this year, our leverage ratio was 853% down from 10, three 8% at the end of Q3 of last year and down from $8 eight 3% at the end of Q2 of this year both our C.
Tier one leverage ratios remain well above our internal targets.
Turning to the income statement total consolidated revenue increased 26% year over year, and 1% sequentially to another record $26 $9 million with the increase driven primarily by higher net interest income derive from our digital banking operations consolidated noninterest expenses were $12 9 million down from $13 2 million.
For Q3 of last year and up just slightly from $12 7 million for Q2 of this year.
I'll note here that nice expense remains slightly higher from what we expect to be our normalized run rate of around $12 5 million per quarter for fiscal 2023, due primarily to the ongoing expenses related to regulatory approval process associated with our pending U S acquisition.
Consolidated net income for Q3 increased 75% year over year and decreased 3% sequentially to $10 million.
I will take the opportunity here to reiterate David's earlier comment related to the benefit of the operating leverage of our digital banking operations by highlighting that year over year consolidated net income growth of 75%. We achieved this quarter on revenue growth of 26% over the same period.
Consolidated earnings per share increased 90% year over year and was unchanged sequentially at 38 cents per share, which benefited in part from a lower number of shares outstanding due to our active share repurchase program.
During the third quarter during third quarter, we purchased and canceled just shy of 80000 common shares bringing the total number of purchases at July 31, 2023 to just over one 5 million shares.
Primary driver of growth in our loan portfolio was once again, our point of sale financing business, which increased 39% year over year at 9% sequentially to $2 8 billion.
As noted last quarter Q3 tends to be a little strong for point of sale originations as resolve K is typically spending a little more on the products that we finance over the course of the summer months.
Our point of sale portfolio represents 76% of our total loan portfolio at the end of Q3, which is up slightly from the end of Q2 of this year.
Our commercial real estate portfolio expanded 7% year over year and was unchanged sequentially at $870 million at the end of Q3, I'll remind you that our commercial portfolio was 90% comprised of loans and mortgage which are financing residential properties predominantly multi year in nature and further we continue to have very little exposure to commercial use properties.
Turning to the income statement for our digital banking operations as David noted Q3 was somewhat anomalous in terms of our net interest margin due to a short list of significant macro impact on the Canadian turn deposit market.
NIM on loans that is excluding cash and securities decreased 38 basis points or 12% year over year, and 30 basis points or 10% sequentially to $2 six 9%.
Net interest margin overall, which includes the impact of cash securities and other assets decreased 19 basis points or 7% year over year and decreased 21 basis points or 8% sequentially to five 7%.
I will take the opportunity to reiterate that we have observed risk premiums that turned deposit market returning to historical spreads from a government cannot bonds and as expect our NIM to began incremental climbed back to normalized levels in Q4, all other things being equal.
Noninterest expenses of digital banking for Q3 were $10 8 million compared with $11 4 million for Q3 of last year and compared to $10 7 million for Q2 of this year as noted earlier, we expect some quarter to quarter fluctuation in 90, <unk> expenses as a function of the completion of our pending U S acquisition.
Cost of funds for Q3, 362%.
68 basis points year over year, and up 35 basis points sequentially. The bulk of the year over year increase as a result of a higher interest rate environment, although the increase in our cost of funds since the bank of Canada began increasing its benchmark rate at the beginning of fiscal 2021 remains significantly below the benchmark increase of 425 basis points.
In addition, as discussed earlier the temporary spike in the market rate for term deposits during the quarter contributed to an atypical outsized cost of funds, which is exacerbated by the still relatively low quantity of insolvency professional deposits measured as a proportion of total deposits. Even though we are seeing the increase in K insolvencies translate into growth in this deposit base on both a year over year.
And sequential basis for context. According to the latest stats can data on a year to date basis Canadian consumer bankruptcies have increased approximately 26% as at June 32023, with annual growth estimated up to 30% for the same pitch for the same here.
Which is expected to result in continued growth in the bank's tip deposit base, which in turn will favorably impact cost of funds and also they support NIM expansion.
Wealth management, what we referred to as personal deposits expanded 45% year over year and 8% sequentially.
On the credit risk side, just a quick comment on our provision for credit losses, our PCL as in Q3 remained very low at just 0.0% to 2% of average loans compared with 12 quarter average of minus 0.01%.
Turning now to Dr. T C. As a reminder, beginning in Q1 of this year revenue for D. O. T. C includes that derived from the digital banking operations for various technology development services. In addition to the contribution from our cyber security services business digital boundary group or DVT.
Let me start with Dbg Standalone results DVD.
<unk> revenue for Q3 increased 10% year over year decreased 8% sequentially to $2 4 million, while gross profit increased 52% year over year and decreased 6% sequentially to $1 8 million.
Variations of the result of the ebb and flow of TPG service engagements with the outsized increase in gross profit, resulting from efficiency gains in the business.
<unk> remained profitable on a standalone basis within D. R. T C.
Hello, Dr. T C revenue, including that from services provided the digital banking operations increased 67% year over year and decreased 6% sequentially the $2 million.
<unk> net loss of 99000 was an improvement over a net loss of 662000, a year ago and compares to net income of 433000 in Q2 of this year, which benefited from the recognition of a deferred tax asset related to D. O T. Six non capital loss carryforwards, which are anticipated to be applied to future taxable earnings.
I would now like to turn the call back to David for some closing remarks.
David.
Thanks, Sean.
Our unique Branchless partner based digital banking model continues to prove itself in terms of operating leverage and efficiency return on common equity and risk mitigation that remain unmatched in north American banking industry.
Last quarter quarter, I talked about how our very simple and straightforward business model. It gives rise to some very simple and straightforward mass that is the foundation of our investment proposition and very clearly demonstrates our path to increase shareholder value.
We once again saw this hold firm in the third quarter results, even with the temporary compression of net interest margin and we fully expect that our shareholders and prospective investors. We will continue to see this quarter after quarter going forward.
For the first nine months of this year our points of sale portfolio has grown 25%. This puts us firmly on track to deliver in the range of 30% growth in our total portfolio for 2023, barring any unforeseen changes in the macro economy.
We expect to see this continued steady sequential growth going forward barring any major economic shocks.
Indian consumer and small business spending in the category and center that are appointed to sell partners finance. Thus far has remained steady despite higher interest rate environment and.
And we believe Theres a good opportunity in Canada to add new point of sale partners to expand our business with existing partners.
As I mentioned earlier all of the other things being equal we expect net interest margin on loans to trend back towards our recent historic levels supported by both the return to a normal term deposit received market.
And growth in our insolvency professional deposits as Canadian insolvencies returned to historical levels.
Again, we will be open to potentially foregoing some net interest margin for higher return on equity.
Normal course quarterly noninterest expenses that is excluding those related to the proposed U S acquisition should remain around $12 5 million.
Finally, our unique model results in liquidity and loan loss risks that remain amongst the lowest of the north American industry.
We are very sticky deposits either through our wealth management partners all of which are term deposits and bankruptcy trustee partners.
And our provisions for credit losses continued to be negligible.
As they have throughout our history.
In Q3, we took another sizable step towards our $4 billion and asset milestone.
And the Cowen setting of improvements in our ratio and return on common equity that naturally fall out of our model.
We should easily achieve 4 billion before the end of 2023 fiscal year end of October .
When we reached 5 billion, it's simply a matter of how quickly we can add U S. R. P. P loans once we begin to broadly rollout of that program out following a favorable regulatory decision on our U S acquisition.
With that I'd like to open the call to questions.
Operator.
Thank you, Sir ladies and gentlemen, if you would like to ask a question. Please press star followed by one on your Touchstone phone you will then hear <unk> prompts acknowledging your request and if.
If you would like to withdraw from the question queue. Please press star followed by two and if Youre using a speakerphone, we will need you to lift the handset before pressing any keys. Please go ahead and press Star. One now if you do have any questions and your first question will be from David Feaster Raymond James. Please go ahead.
Hey, good morning, everybody.
Good morning, David.
Glad to hear that the dislocation in the term deposit market has been alleviated and theres more visibility and kind of getting back to that normalized margin run rate.
John kind of talked about getting closer there in the fourth quarter, but.
Like maybe it might take a little bit longer.
David I was just hoping you could maybe give us some thoughts on kind of the margin trajectory in the next two or three quarters and whether you'd expect to get back their near term or is there going to really be a big step up.
In the fiscal third quarter next year when when these mature.
I think it'll just.
Quarter by quarter returned to run above the 3% margin that we've had historically.
And one of the reasons is as we're growing so rapidly suburb, where booking you turned to deposit receipts at the at and our normal levels.
In spite to about 90 odd basis points over government canton bonds for a short period of time and then it sort of recovered down to about 16, and 17 basis points got and I've got a nice graph on it.
So one of the.
Positive of having a sort of a short term assets short term liabilities is the Tam.
We recover from something like this fairly quickly, but we also have the negative where it says there is a short term dislocation that it's felt in a in a quarter. The other thing that's coming onboard.
Fortunately for Jennifer.
Good Canadians is the propensity to arndt and bankruptcies increase fairly dramatically.
Scott.
That bodes well for our our more economical and priced a trustee.
Trustee deposits run around prime minus three.
We are seeing.
Sort of a berry.
Correlation between the new accounts with all the money.
Status Canada's posting for.
For the increase in bankruptcies, so reached between 20 and 30% increases in bankruptcies this year.
And that's about the same number of new accounts. We've opened so these new accounts sort of fill up with the proceeds of the bankruptcy.
Supplement our funding of course are much more economical rates.
So that'll help too.
Help us out help that.
Unhealthy o'clock.
That's right.
And then maybe just a question on either side.
I mean, obviously, you're seeing tremendous growth.
And the point of sale market and you've touched on some of the seasonal strength this quarter.
And you know.
The potential slowdown in consumer spending here in the fiscal fourth quarter I was just hoping you could maybe touch on the economic backdrop that you're seeing in Canada, obviously you touched on.
Some of the stresses that youre seeing but what gives you confidence that business.
This might be is going to be short lived and then just the addition, the pipeline of new point of sale.
Customers in Canada.
The early read on what Youre seeing in the U S as well and reset receptivity there.
Well in Canada, we saw.
You kind of expect Canadian source income other cocoons in the spring and they buy stuff.
Even despite that.
The cost to borrow increasing fairly significantly.
We Canadians tend to buy cars and motorcycles and hot tubs.
Home improvement despite those things I do expect in the fourth quarter that the higher interest rates and.
Kind of.
And Tuesday, as in Dubai will dissipate somewhat.
If it gets back to around 5% growth in the fourth quarter.
Do you expect that.
I think in the winter months, you're probably looking.
For sort of lackluster.
<unk> says, so 543 quarter by quarter.
Yes.
It's kind of an inevitable too.
Let the raising of racing in Canada will dampen that.
Now at the same time, we're still adding more partners.
Our reach into Canada is getting.
Greater than it was so that will offset that a little bit.
And there's also the.
The home improvement.
Market.
It's mainly looking at energy savings I E installation, new furnaces new.
Hot water heaters things are more efficient so that kind of drives at two sites.
But I don't expect.
2024 is growth to be.
30% like it is.
This year it should be less if tiff mccallum houses as it's worth it.
He has trended up in that trying to dampen it in the U S. It's such a huge market and our product is so popular.
Without.
You know, we could double triple in the states.
With that I'll put a dent in the market.
So I expect.
Have a recession in the states too, but I don't think that will have much impact on us and that the market is so huge.
That makes sense and maybe maybe just switching gears to D. R. A T cyber.
I'm curious some of the underlying trends you're seeing there obviously, we had the DTA impact in the quarter on a revenue side.
You talked in the MD&A about some slower engagements, but kind of reading further it sounds like this might be more of a timing issue I'm just curious what youre seeing within dbg and kind of how the pipeline's looking going forward.
Yeah sort of anomaly for <unk> for the quarter Dbg continues to sign up new customers for its penetration testing and that's a very.
Popular in that in that area and then on the other products the <unk>, bringing on board.
We seem to be quite row, well received in the marketplace too.
Yeah, So I I see it.
D R. A T C D B G.
Continuing to grow at the rate it has been growing at.
What we're hoping for sort of a breakthrough with our relationship with them.
They are large a large corporation that provide so.
Other services to our target market that spend the other financial institutions.
We'd like we'd like to bend our services through.
Somebody who already has a relationship that would be a breakthrough. We have we have stated on our customers that we have steered the art technology for providing cyber security and it.
It would be nice.
Earl touristic reasons tuna to I'll provide those services through other F EIS, but it seems to be quite vulnerable to cyber attacks.
That's helpful color I appreciate it thanks everybody.
Thank you next question will be from Mike.
No.
K BW research. Please go ahead.
Morning.
Quick question on on the U S Bank acquisition.
So David maybe sorry, if this is an unfair question, but I'm trying to get a sense of what the risk is that maybe this is something that doesn't get approved in the near term and maybe even extends into 2025.
That sounds, perhaps a bit long, but in terms of what I'm hearing on the regulatory front I keep hearing about staffing shortages across the regulatory footprint in the U S.
Obviously coming out of the regional banking crisis, there is a lot on their plate right now.
What would you say is the risk that this is something that continues to just get sort of pushed off not not from your end, but by the regulators and then maybe maybe it's a much longer timeframe here I think you suggested perhaps the fall for approval, but whats the risk that it could be a lot longer.
Well, it's a tiny risk, but it's not nonexistent because of those factors you mentioned are real the U S.
The regulators got their work cut out for them with.
With the various challenges that have surfaced.
Frankly, we were pretty small transaction.
The needle for them now.
Now mind, you after saying that where private cleanup bank anybody has ever seen.
It's not very often I think you'd come across finance Tuesday, and talking about a 30 year history of personal loan losses on a model that's been proven out.
In Canada point of sale model I think talking about the.
It's been quiet.
A significant demand in the states and.
So we've got those those things going in our favor, but as you say there is a backdrop of.
U S regulators being.
Sort of challenged with.
But there is existing business sorry.
So I wouldn't say it's nonexistent.
But from what we're seeing in our interaction with U S regulators it looks like we're getting close to close to the end.
There hasn't been anything new come out.
For a long time, and I think our value proposition for the U S. Economy is significant we will provide an alternate source of funding that percolate through to consumers and small businesses.
Helpful for any economy.
So not nonexistent, but I'd say, we're in the 90%.
That we'll see we'll see some movement in the fall.
Okay. That's very helpful. Thank you for that color and then a quick one on Pos I recall, a couple of quarters ago. I thought you were a little bit less optimistic on volumes and.
I think it's fair to say that you've been pleasantly surprised.
The 9% growth this quarter of 5% sequentially last quarter. It's been it's been a really good trajectory here and I'm wondering what do you think is driving that I don't know if this is more industry more broadly or is it just more of a.
Take market share from BBB encase perspective.
But it's a combination of both we are taking market share from the others that are participating in this area.
Our model or our systems or technology or a state of the art.
And on our customers our partners like it that are getting fast funding they like.
Fast turnaround and our buy rates are competitive and so we are taking market share.
The other thing as Chris was talking about earlier.
There's always a boat a boost and purchases in the summer and it was.
Maybe a little more of a boost and we were originally anticipating but.
It is the summertime spending spree and that will dissipate in the fall I know, what I'm, saying in that.
The higher rates.
The monthly rate for your Motorcycling or hot tub of your or your home improvement has gone up fairly significantly.
And.
A lot of Canadians now I'm wondering how they're going to make their mortgage payments.
Renewing their mortgage to the much much much higher rates, so I expect that.
Actual purchases to decline going forward.
But we arent taking more market share too.
That.
Might very well offset.
Thank you so much for the insights I appreciate it.
Well, thank you Mike.
Once again as a reminder, ladies and gentlemen, if you would like to ask a question. Please press star followed by one on you touched on phone and.
And your next question will be from Steven Ramsey at the University Bank. Please go ahead.
Hi, great job on a great quarter, David and team, it's great to see you at the technique, which is.
Hi, Steven.
So just to follow up on David's Easters.
Question and by the way are you going to be at the Raymond James Conference in Chicago.
<unk> sure.
Well hopefully, we'll see you there.
Yes, Dave was talking about the the models.
Last quarter. You also went through this but I just want to make sure that you still see things. The same way you are saying, if we can get to $5 billion in loans and a three point margin that's $150 million of net revenue and your expenses are running.
$12 1 billion in the quarter.
So $50 million. So you can get to 20% ROE we have the capital to do that is that still your thinking.
Yeah, that's absolutely right Steve.
It's a fantastic model it just gets better and better as the volume.
I guess, it's inevitable, we'll get to that 5 billion Mark. Good question is just how are you.
Long it takes.
Cause blocking tomorrow.
Ever Recessionary forces now offset perhaps by entrant in the U S market in a bigger way and take a little market share in Canada, but I think we'll end this year, while over four 4 billion and I'm, hoping next years over five and Thats when the numbers really start to.
To work and work well.
Super.
And then the follow up question Ive got on a different topic is during the quarter you bought back just under 80000 shares for the year of one.
$1, five and you mentioned that.
In August do you have to go back to your regulator too.
So you get new permission for a buyback program.
Just curious about two things one a wildly 80000 shares in the most recent quarter did you did you run out of room or the share price run away from your target.
And what are you targeting for next year, what do you think would be great to be able to do next year.
Well, we ran out of capacity to buy.
Roni allocated so many shares we can purchase by our regulator each year and.
We ran out.
Yes, we do have the application to buy more shares and it.
In the order of about one 5 million shares would be our hope.
Mind, you we are in a.
No.
What do you call them, a barn challenging regulatory environment.
<unk>.
Regulators ballpark, south but are looking for more more capital less so.
So I'm not sure how well received.
Our $1 5 million or a $1 5 million share purchase.
What will be.
But we would like to you.
Would like to have a normal course issuer bid open. So we can take advantage of our stock when it's running less than book value.
Obviously mix.
Turbocharges our earnings faster on the denominators, reducing.
So it gave US 38 cents this quarter versus last quarter, despite being slightly down in net income.
Well, yes.
I am enthusiastic about your approach to buying back the stock at under book value.
And my last question relates to <unk>.
The mortgage business.
Potential you discussed last quarter about.
Any deeper into the CMA sea busy.
Business and launching some new.
Channels. There do you have you made any progress towards that in the most recent quarter.
Yeah.
On the retail side.
We're working with.
Some partners with the view that in the first part of 2024 would be able to launch the retail type mortgage product.
Good progress there we've hired.
Alright.
The person who is an expert in that area and we've got some good partnerships developing.
On the commercial side.
<unk>.
Interim construction of residential projects.
You'll see us pivot into the sea.
CMA sea insured construction projects.
There's quite a demand in Canada.
For our new residential units.
A lot of new Canadians come in looking for homes.
And.
We banks a.
<unk>.
<unk> solves included seem to be quite reluctant to.
Finance these construction projects without the comfort of GMAC insurance group.
Kevin a few opportunities to do that and we expect to make 2020 for Obi I would say a good portion of our construction book will be CMA sea ensured.
It's helpful on the capital allocation side and that CMA Sea provide.
Provide some.
Zero percent risk weighted.
Asset.
So it doesn't soak up any of our CET, one capital, which treats it out for the point of sale program.
So.
Our construction.
<unk> lenders or pivot into that government insured.
Program and be helpful for our economy.
Still providing student residences in retirement homes.
Condominium units for the <unk>.
The Canadians that are looking for advice.
Place to live.
Well, thanks, so much David and I look forward to seeing you in Chicago.
Oh absolutely.
And some weather predictions correct Geoscience company another hot Hutch types.
Chicago I saw something like 95 degrees.
Thank you.
Again, ladies and gentlemen, if you have any questions. Please press star followed by one.
Next will be Brad Leanness at Coral capital. Please go ahead.
Great. Thank you hi, guys, how you doing.
Very good Brad good to hear from you.
Perfect. Thanks.
Can you tell me the balance of the U S. R. P P loans and how many partners you have right now.
What we have signed a three partners and off top my head I'm going to I haven't got the exact figure on the on the balance, but Sean might have that handy.
Sean if you got that figured.
Sure sure, Dave about 67 million U S.
$67 million.
Yes, there are six that got it.
Got it.
Ended up a new one Brad so that hasnt drawn down yet.
Okay, perfect and when I think of loan growth going forward should I still think of 30% annual clips.
Pluses and minuses taken into consideration.
It looks still like to reasonable figure and.
That's it.
Taken in consideration of things has been interesting earlier, a dampening of the Canadian economy, maybe the U S economy, dampening too, but heading into the states.
Being sort of a drop in the bucket and the market doubles and triples arent hard hard to think about and in Canada our reach.
Uh huh.
Two other other providers.
Market might offset the inevitable downturn in our economy.
I mean, 30%.
It seems like a realistic figure all those things taken into consideration.
Okay got it thank you and regarding the net interest margin it sounds as though if I heard everything correctly that this is kind of trough quarter at $2 57, and likely sequentially had higher over the next many quarters did I hear you say that maybe.
Back to 3% you're modeling shows in the next four quarters.
Yeah, absolutely that's the historic spread that we've been able to earn over the years and.
We're going to be helped.
By by the increase in solvency. So that's same we've opened 20% 30% more accounts since the beginning of the year fiscal year and ask Pat surf.
Correlates quite highly with the number of increased bankruptcies in Canada. So when we open accounts they don't flop with it.
The proceeds of the liquidations right away. It takes about six months for that to start happening, but it had some.
For boating.
What we will get so that helps the spread too and that they run a prime minus three on average.
So that would be for 'twenty and Canada.
Our GIC greater returned to positive real estate right and then one year category might be $5 40.
So it helps so theres the things that help us get back to that 3%.
Margin that we target.
Okay, great and the new point of sale loans that you put on what rate are those nowadays.
At the <unk> in the states are a little higher margin than we're getting Canada, roughly there on 4% over our cost.
Okay.
I'll just market conditions got it to be.
Different.
Got you.
On the expense side, if I heard you correctly the normal.
Is $12 5 million per quarter without any kind of acquisition related cost in there.
This quarter you were at $12 9 million cell kind of implying that 400000 related to primarily legal expenses related to the acquisition and just kind of thinking about it in my keynote <unk> been running higher legal expenses for I guess, a year and a half or so from this acquisition.
Like what addition, like 400000 seems like a lot when all of that should be kind of done I would have thought.
You already did the application that's just maybe kind of sitting around and redoing. Some some filings here and there, but do you really need 400000, a quarter in additional legal expenses for this.
Yes.
Could be even higher hopes when we close.
But there is other miscellaneous expenses that went through the quarter too.
About half of that might've been attributable to what.
Steve was alluding to.
We have completed our 30th 30th year and had a celebratory.
Technically you should it come to Brad.
But that was a couple of hundred thousand Canadian all in for that we had about 1000 people.
To celebrate our 30 <unk> year anniversary.
Things like that went through there is pluses and minuses, but normally speaking on a normal quarter 12, and a half is about the right figure for us.
Okay, Great. That's it for me I appreciate it guys.
Alright, Thank you and at this time Mr. Taylor. It appears we have no further questions. Please proceed with any additional remarks.
Well I'd like to thank everybody for joining us today and I'll look forward to speaking.
Two at a time of our fiscal 2023 year end results.
Thank you.
Thank you Sir Les.
Ladies and gentlemen, this does indeed conclude your conference for today. Once again, thank you for attending and at this time, we do ask that you. Please disconnect your lines.
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