Q2 2024 Eastern Bankshares Inc Earnings Call
Hello, and welcome to the Eastern Bancshares, Inc. Second quarter 'twenty 'twenty four earnings conference call.
Today's call will include forward looking statements, including statements about eastern's future financial and operating results outlook business strategies and plans as well as other opportunities and potential risks that management foresees such forward looking statements reflect management's current estimates or bill.
And are subject to risks and uncertainties that may cause actual results or the timing of events to differ materially from the views expressed today.
Information about such risks and uncertainties as set forth under the caption forward looking statements endurance earnings press release as well as in the risk factors section and other disclosure in the company's periodic filings with the Securities and Exchange Commission.
Any forward looking statements made during this call represent management's views and estimates as of today and the company undertakes no obligation to update these statements as a result of new information or future events.
Did you mean to call. The company will also discuss both GAAP and certain non-GAAP financial measures.
For a reconciliation of GAAP to the non-GAAP financial measures. Please refer to the company's earnings press release, which can be found at investors that eastern Bank dotcom.
Please note this event is being recorded.
All lines have been placed on mute to prevent any background noise.
So just be curious amongst there will be a question and answer session. If you'd like to ask a question. During this time of simply press star followed by the number one on your telephone keypad, if you'd like to withdraw your question Press Star followed by the number two thank you I would now like to turn the call over to Bob River exit Executive Chair and chair of the BARDA. Please go ahead.
Ed.
Thank you Julie and welcome everyone to our second quarter earnings call with me today is eastern new CEO and a sheahan as well as Jim Fitzgerald, Our Chief Financial Officer, and Chief administrative officer.
It's been a very busy time for us here at eastern and I have a number of topics to cover before turning it over to Jim.
Overall, we are pleased with our second quarter results.
You know the operating environment remains challenging in the second quarter with higher rates continuing to modestly compressed our net interest margin and some continued kind of challenges, particularly in the office market.
We have worked our way through these challenges and maintain a fortress balance sheet to continue to be there for our customers while producing strong results.
Although our overall earnings in the second quarter were lower than we are with it we would like them to be long term. We're pleased that we continue to meet these short term challenges and are extremely well positioned for the future.
We are delighted to announce that we closed our merger with Cambridge Trust on July 12.
And successfully converted all banking customers that weekend.
We are pleased overall with the customer transition and to report that we've been operating very smoothly. Since we opened for business on July 15th.
Find institution.
This transaction completes a series of important milestones dating back to last spring with our securities repositioning in the first quarter.
Sale of Eastern insurance group in the fourth quarter and the completion of the Cambridge merger this month.
The security sale address certain challenges with the balance sheet caused by rapidly rising interest rates.
And resulting funding pressures the sale of eastern insurance monetize an undervalued asset for our shareholders and created a significant gain in capital increase and the Cambridge merger provides us with the strategic position, we need to continue to excel in our core markets and the earnings accretion to be a top tier financial performer.
To accomplish all of these in just five quarters is a testament to the strength of our underlying franchise and the talent and hard work of all of our employees.
And we believe our best days are still ahead of us due to the strategic benefits of the Cambridge merger.
We now have the fourth largest deposit market share in the Boston MSA and are very close to being in the top three we the largest bank owned investment advisor in Massachusetts, and number 10 overall.
With over 25 billion in assets, we are the largest independent bank headquartered in Boston and increasingly Boston hometown bag marked by a local understanding accessibility and engagement.
This apart from larger banks headquartered in other states and in some cases other countries.
There are many things that comprise eastern secret sauce, starting with our people our culture and our deep and extensive community engagement, but one of the most critical ingredients is that we live work and raise our families here just like our customers and.
In addition, our <unk>.
Our initiatives with Cambridge Trust is highly complementary with the strengths of the two organizations, creating a better stronger company and either would've been on its own.
We think there is great opportunity to continue to grow in our market and the platform. We've created will give us what we need to continue to be very successful.
Long term.
We're very excited to be continuing to use the Cambridge Trust brand for our wealth management and private banking businesses.
We are confident that with the conversion of our banking systems now completed and the integration of our wealth management systems scheduled for later this year the full power of the franchise will be clear beginning in the fourth quarter and throughout 2025.
Although this call is focused on our results pre Cambridge, I'm very happy to share that Denis Sheahan has joined our executive team as our CEO in.
In addition to Dennis three other executives from Cambridge have joined our executive team, bringing us additional expertise in wealth management, private banking and marketing, which coupled with the talents of our 300, new colleagues joining us from Cambridge Trust will strengthen us going forward.
In addition, please join me in congratulating Quincy Miller, who officially ads Chief operating officer to his titles, a vice chair and President at this point I'd like to introduce Dennis and turn it over to him to make a few remarks.
Thank you Bob and good morning, everyone.
Behalf with the Cambridge trusts board and myself I'd like to thank Bob the Eastern Board and the entire eastern teams for all their support throughout the process.
As you know mergers and conversions are long and challenging process and we're very happy with how successful the transition was the <unk>.
Tension and care, we are able to collectively provide our customers.
I, especially want to thank my cameras trust colleagues for all their hard work and effort. During this time of uncertainty.
Now that we have the bank conversion completed we all look forward to getting back on offense.
Focusing on growth opportunities in all business lines and in realizing the synergies and potential of the combination.
I am very confident we can do that.
We operate in a very dynamic market and our market position and franchise provide us great opportunities in both banking and wealth management that we look to capitalize on thank.
Thank you and I'll now turn it back to you Bob.
Thanks Dennis.
I also announced approval for our share repurchase authorization.
Up to 5% of our shares or $200 million, we look forward to analyzing share repurchases along with our other capital management tools and we'll continue to look for additional opportunities to create shareholder value.
David Rosato, who will be joining us as our chief financial Officer on August one.
As we mentioned on our last call we have been planning for Jim's retirement for some time and feel very good about this transition I know many of you know David from his time at People's United Bank, and Berkshire Bank and we are delighted he will be joining us next week.
We're looking for someone with extensive financial and M&A experience at a larger bank to help guide and assist us as we grow.
David strong track record, particularly of peoples, which grew from $14 billion in assets to $60 billion in assets. During his tenure makes him a great fit for eastern.
We look forward to David's insights and contributions as we work our way through the Cambridge integration.
As I also mentioned during our last earnings call after working with David on the CFO transition, Jim will stay with us as a senior advisor to me the executive team and our board.
Jim will continue to join us on our quarterly earnings calls. So please don't say goodbye to him just yet.
As I said in my opening remarks, it has been a particularly busy but successful time for us as we embark on day 10 of this next chapter.
Many thanks to all of our colleagues at Eastern and Cambridge Trust, he will be insured such a smooth conversion of our banking systems.
Although such a complex transition is never perfect with always inevitable and unexpected bumps their extensive preparation and planning.
And with their patient reassuring support and guidance of our customers and each other.
Caused us to go as well as any of us have ever experienced special.
Special Thanks to our branch call Center and operations team teams, who are always on point in such transitions and who handled them with incredible poise and responsiveness.
And special Thanks to our technology team, who not only architected such a successful systems integration.
But literally stood out in their heads the first Friday after conversion to get us through the crowd strike episode with minimal disruption.
And now I'll turn to Jim Great. Thank you, Bob and good morning, everyone as Bob mentioned, given the challenging environment. We are pleased with our overall results in the quarter I feel very good about our position going forward.
GAAP net income in the quarter was $26 3 million.
<unk> 16 per diluted share and operating earnings were $36 5 million or 22 per diluted share.
Yeah.
Quarter had noise due to merger charges and a number of onetime items that I will go through during my comments and explain but first I'll start with some highlights.
As Bob mentioned, we received non objection from our regulators for a 5% share repurchase plan as well as approval from our board as we mentioned for the last two to three quarters, we very much look forward to adding share repurchases to our capital management strategies.
The net interest margin compressed four basis points in the quarter from $2, 68% to $2, 64% and net interest income was down $1 3 million in the quarter.
We generated loan growth of $57 million in the quarter or one 6% on an annualized basis.
This was in line with our experience over the last few quarters and in line with our guidance.
Our consumer loan growth, primarily home equity lines was strong at 14% on an annualized basis growth in residential loans was largely offset by a modest decline in commercial lines.
Deposits were generally stable in the quarter with a reduction of $129 million, although as I'll describe later $100 million of that was from the early withdrawal of a legacy century bank deposit for which we collected in early withdrawal penalties.
Although the credit environment remains challenging we had a number of highlights in our asset quality in the quarter.
We continue to see good velocity and the turnover of problem assets.
We resolved two more npls in Q2 at slightly better values than we had expected.
This caused a reduction in our nonperforming loans from 57 million to $40 million.
And the value of those assets created net recoveries in the quarter.
Follow up with more information on the credit front later in my remarks.
Overall, our balance sheet remains extremely strong.
In addition to the asset quality I, just mentioned capital levels were robust with a common equity tier one ratio of 18, 6% and a TCE ratio of 11, 7%.
Our liquidity is very strong with $750 million in cash and essentially no borrowings.
Our board approved a dividend of <unk> 11 per share for shareholders of record on September three and payable on September 16th 2024.
Move on to comments on the balance sheet.
Assets were 21 billion at June 30 down by $100 million from Q1.
Cash was $750 million at the end of Q2, which was up slightly from Q1.
The securities portfolio was $4 5 billion down $197 million from Q1.
In addition to run off and amortization, we sold $85 million in available for sale securities that I will provide some detail on shortly.
Loans ended the quarter at $14 1 billion, an increase of $57 million from Q1 consumer.
Consumer loan growth, primarily home equity lines accounted for $51 million of the growth.
As I mentioned deposits were down $129 million in the quarter due to an early withdrawal of a legacy century deposit contract. So.
Withdraw was triggered by the sale of a business and generated a penalty of $7 $8 million that I will review shortly.
We experienced a continuation of the deposit mix shift as demand deposits declined by approximately $150 million on an average basis and interest bearing deposits increased by $300 million on an average basis in the quarter.
Shareholders' equity increased $15 million in the quarter due to an increase in retained earnings and paid in capital.
Cumulated other comprehensive income was essentially unchanged during the quarter.
Next I'll comment on asset quality as I mentioned, we saw a reduction in npls from 57 million to $40 million.
We're from four 1% of loans to point to 8% of loans.
The reduction was primarily due to the resolution of two npls that we've discussed in the past.
We did better on those resolution in terms of value than we expected and recorded recoveries of approximately $2 million.
These recoveries more than offset charge offs, creating a net recovery position for the quarter compared with net charge offs of 21 basis points last quarter.
We continue to monitor and manage the office exposure in the portfolio. We did move one loan into NPL status and have the collateral of that loan and the collateral of the NPL from last quarter, both being marketed for sale.
We've been pleased with the pace that our team has moved through problem loans through resolution.
We expect that to continue.
The recoveries this quarter were a great outcome, but not something we expect in future quarters.
We also have accelerated our timing in dealing with office loan maturities.
Dealt with two loans in the second quarter that don't have a maturity until the fourth quarter.
One of the lessons learned from a few quarters ago was most borrowers have already made their decisions about the future of these properties before the maturity.
We've continued to add information on both the CRE portfolio in the office portfolio in the presentation.
The creep portfolio information is on page 15, and the office portfolio was on page 16.
There isn't much new on the overall creep portfolio.
Our multifamily portfolio continues to be a favorite asset class in our markets due to the acute housing shortage in the overall portfolio is diverse with no npls other than the office segment.
On page 16, we added some information on the office breakout between pure office mixed use and medical office and updated the criticized and classified totals.
Criticized and classified office loans increased from $103 million to $116 million in the quarter.
We have spent considerable time on the Cambridge loan portfolio in particular, the office segment, and we will record those loans at fair value during the purchase accounting process. As we have mentioned we competed in the same market with Cambridge Trust and know the credit and valued landscape of the local office in key markets extremely well.
Next I'll comment on earnings.
As I mentioned GAAP net income.
<unk> was $26 3 million or <unk> 16 per diluted share and operating earnings were $36 5 million or 22 cents per diluted share.
Net interest income was $128 6 million in the quarter down from $129 9 million in the first quarter the.
The net interest margin was 264% compared to $2 six 8% in the prior quarter.
<unk> bearing liability costs increased faster than interest, earning asset yields.
The provision for loan losses was $6 1 million or $1 4 million less than the $7 5 million in the first quarter.
Noninterest income included two one time items.
As mentioned there was an early withdrawal of a legacy $100 million century deposit contract and we collected an early termination payment of $7 $8 million to par.
Partially offsetting the impacts of liquidity and net interest income we sold $85 million of securities from our <unk> portfolio at a loss of $7 6 million.
The early withdrawal penalty is included in our operating earnings which is consistent with the treatment of early withdrawal penalties and our retail CD portfolio, which are generally much smaller amounts.
The securities loss of $7 6 million is included in our non operating results, which is consistent with our past practices on securities gains and losses.
Our views on the core run rate for earnings shortly.
The other categories in our noninterest income were in line with Q1 and the trends that we've experienced over the last few quarters.
Expenses also had a number of onetime items as we outlined in the presentation noninterest expense was $109 9 million $109 9 billion in the quarter.
$105 3 million on an operating basis.
Included in the operating amount of $105 3 million were three items that are nonrecurring.
Second FDIC special assessment was $1 9 million.
We incurred 700000 of severance and early retirement expenses and 900000 of occupancy occupancy expenses related to our move to our new corporate headquarters, which was completed in Q2.
Excluding these items, our core expenses were $102 million in the second quarter.
The tax rate also had some noise this quarter primarily in GAAP results.
You May remember, we had a number of fairly complicated tax events in 2023 due to the combination of the balance sheet restructure and the sale of eastern insurance.
We true up some of those amounts in this quarter and there were slightly higher than what we recorded last year.
Most of those tax benefits in 2023 were included as nonoperating items and that is where this increase was recorded as well.
This explains the 31% tax rate on our GAAP results.
But the 25% rate on our operating results.
25% operating tax rate is higher than where we expect to see the run rate for the full year, which is 21%.
I can appreciate that there are a number of onetime items and some accounting noise in these results when.
When we look at the results and try to get to our core results in the quarter.
We start with net interest income of $128 6 million and the provision for loan losses of $6 1 million.
These items are both straightforward.
For noninterest income we exclude the early withdrawal penalty.
The securities loss and the Rabbi Trust gains, which results in a total of $23 5 million.
For expenses, we removed the FDIC special assessment.
The severance and early retirement them out and the headquarters moving costs.
Which results in core noninterest expenses of $102 million.
I apply our operating tax rate for the quarter of 25% against those earnings which results in approximately $33 million of what we consider a core level of net income.
I hope that's helpful. All of the items I adjusted out are referenced in our presentation.
I'll now make a few comments on our outlook.
We are very excited about the closing of the Cambridge transaction on July 12, as both Bob and Dennis mentioned, we're pleased with the bank conversion over the weekend of the 12 and have seen a smooth transition for customers and colleagues.
As you know the closing of the merger is just the beginning for the financial processes that need to take place. So we could ultimately provide our results and answer your questions. We are underway with the purchase accounting valuations for loans deposits and the wealth business and we expect them to be completed towards the end of the third quarter.
In addition to the valuations themselves the loan marks needs to be added on a loan level basis to the loan system for accretion purposes.
We would expect our first full report to be with our third quarter results.
That said, we can confirm the prior guidance we provided for the transaction.
We liquidated the Cambridge investment portfolio and use the proceeds to pay off wholesale funding shortly after closing.
We expect the post closing merger net interest margin to be 3% an.
An increase from our current level of 264%.
The return on assets to be 1% plus.
And our return on average tangible equity to exceed 10%.
All of those metrics are meaningful improvements from where we are operating today.
We expect tangible book value dilution to be less than our original projections and the EPS accretion to exceed the 20% from the original projections.
We expect the cash efficiency ratio, excluding the amortization of intangibles to be in the mid 50% range.
We expect the combined wealth business to generate revenues of $60 million annually.
We're very excited about using share repurchases as part of our capital management strategy going forward share repurchases will be subject to market conditions and capital and liquidity conditions.
As both Bob and Dennis mentioned, the Cambridge transaction is transformative for eastern and we look forward to providing a full update next quarter.
On a personal note I'd like to thank everyone I've enjoyed interacting with all of you and look forward to working with David Rosato, and what will be a very smooth transition and with that Julie we can open up for questions.
Thank you at this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad well pause for just a moment to compile the Q&A roster.
Your first question comes from Mark Fitzgibbon from Piper Sandler. Please go ahead.
Hey, guys. Good morning, Congrats on the deal and congrats to everybody on their new roles.
Mark Thomas Fitzgibbon: Thanks, Mike.
I wondered if you know.
Since you Mark that Cambridge loan book in conjunction with the deal are there any plans to sort of sell down of office, our CRE loans.
I know that you had sold some securities in the Cambridge book, but was curious on the loan side if that was plants there.
Yes, no mark Thanks, and good morning.
With the purchase accounting and the higher yields we find them attractive obviously the P. C D loans as the acronym is for those loans that are credit impaired through the evaluation process. Those are loans that we anticipate trying to move through at a sort of analogous way that we've moved through our own office loans.
And other credit impaired loans.
Okay, and then secondly.
On that one new office loan that moved to nonperforming status I guess I'm curious where it is what the vacancies looked like and what the prospects for timing for resolution.
Sure.
Sure it's in the suburbs very nice suburb of Boston.
So a footnote there obviously that the problems that started out in the financial district of spread as we've talked about over the last couple of quarters. So the location, although slightly different than our prior.
Mark Thomas Fitzgibbon: Descriptions of our own assets isn't a surprise to us.
The vacancies are in the seventies.
Not vacancies the vacancies are in the third is that.
Occupancy occupancy thanks, Dennis is in our in the seventies, and we're hoping to move that in a similar fashion to what we've experienced to date. So hopefully within next couple of quarters that would be marketed for sale and sold.
Okay, and then Jim what are you targeting longer term for capital ratios, whether it's TCE or CET, one or what are you targeting longer term.
Yeah, No. It's a great question and it's also a transition time for the company. So we will need to wait for David and Dennis I'd like.
Right in that as well, but we'll probably be in a better position.
Over time to give you a more clear answer there, but if you look post favorites, we still feel like we've got a very very healthy amount.
In particular, we're excited about the share repurchases because of that but over time I think we'll be able to collect it will give you a better answer on that mark.
Okay, and then lastly, maybe a tough question to contemplate right now, but when do you think you could sort of handle another bank deal and I'm also curious if asset management acquisitions are likely in the cards for you all.
Okay.
Well thanks for the question Mark.
Right now we're completely focused on the Cambridge Trust integration I mean, we've completed the banking systems conversion as you know, we still have wealth management coming up so certainly for the balance of this year. Our plate is very full as we look ahead into.
25, our first focus is to make sure that we continue to execute this partnership well and really demonstrate the performance that we feel very confident in going forward.
Once we get through all of that and feel like we're better positioned and again, depending on the environment.
Other.
Merger opportunities.
We will evaluate them then.
Obviously, it's a very challenging environment to.
Mark Thomas Fitzgibbon: Do mergers for a number of reasons.
We need a significant change in the environment.
To make that different with respect to wealth management acquisitions, its not something that.
Either of us have ever done.
It's certainly a challenging space wouldn't rule them out per se.
But Dennis you up more experience here then.
Our focus is going to be on organic growth and sort of realizing the benefit of the merger combination. So that period, that's what we're going to be focused on in terms of asset management acquisition.
Dennis: <unk> done some of this in the past in a prior life and.
We've never saying never they are challenging both culturally and financially to execute so we're going to be focused around growing our own business.
Dennis: It's something that we wouldn't rule out entirely but just note that it's not a priority for us.
Dennis: Thank you.
Thanks Mark.
Your next question comes from Damon Delmonte from K B W. Please go ahead.
Hey, good morning, everyone I hope everybody is doing well and congrats on the deal and welcome Dennis.
Great.
Damon Paul DelMonte: A quick question on the.
Kind of the core for the legacy Eastern operations and the outlook for that Jim could you just provide a little outlook on you know I know you gave the core expenses this quarter around $102 million, but.
Obviously, we have Cambridge being layered on in the third quarter, but as we think about the legacy.
Operations from from the Eastern side do you have a range or outlook for the back half of the year.
Hi.
So it's a little.
Got it.
Interestingly, that's not the way we're looking at the World right now David but I appreciate the question.
If you look at our first and second quarter result, it's a challenging environment right net interest.
Hi.
If you want to call it flat or close to flat is what we've experienced balance sheet growth has been hard to come by.
We're very excited about adding Cambridge at this time because it gives us we think is a differentiated growth story, but the underlying environment is still very difficult, but if you look at eastern solo and the first and second quarter.
Damon Paul DelMonte: On a standalone basis, that's likely what you would see for the next quarter or two.
Okay.
I got on the expense and fee income side are you able to provide guidance with the combined operations.
Fair enough.
Once we get everything put together I think we will come back in the third quarter and do that David we.
We have a lot of work to do here. So we didn't want to risk that process and get it all behind us before we speak out on that.
Got it okay.
And then I guess as far as.
This is tough because every question is on a combined basis now.
Okay.
From a loan growth perspective.
From the combined company.
Active here.
Has the outlook changed at all on the commercial landscape are you seeing any more demand on the CNI side or.
Is that kind of status quo.
No.
File and you can't see me, Dave I'm smiling, because I understand your frustration there.
Speaker Change: Sure it internally right.
Todd.
Speaker Change: As for some of these questions I think on the loan growth side, what we can.
Recommit to is what we've seen at eastern on what we would think going forward is still slow growth again, specifically on the commercial side, we've guided to low.
Low single digit growth and I think you can assume that for the combined entity as well.
Got it okay.
Okay, I guess thats all that I had for now thank you.
Thank you thanks, Thanks, Tim.
Ladies and gentlemen, as a reminder, should you have a question. Please press star one. Your next question comes from Laura I'm sick from Seaport Research. Please go ahead.
Yeah, Hi, Thanks, Good morning, and I Ikea wanted to Echo my congratulations on the deal and all of the title changes.
So maybe kind of thing where Damon was pro forma that to the extent that you can just help us think about the pro forma margin of 3%.
So I'm just sort of backing into your comments.
Comments on an eastern stand alone margin and then obviously, what we know what C. P. C does that put the accretion impact.
You know running somewhere in the neighborhood of 40 basis points am I thinking about that the right way and I realize you're you're early in your purchase accounting adjustment that it's such a big number site to find out.
Just want to make sure I'm thinking about that.
Right. So first of all good morning Laurie.
Good to hear your voice I think.
Laurie the way we would describe that is if you start with the eastern solo margin of call. It two to six four to six 5%, there's really two dynamics happening.
We're adding the Cambridge balance sheet and it remember, we've liquidated securities and paid off wholesale funding. So there's.
Speaker Change: A nice margin pick up from that transaction, just really two transactions, but if you look at them together, there's a there's a nice margin pick up there. So the balance sheet that we've added before purchase accounting is helpful to that and then obviously the purchase accounting which were not in a position to talk about today, we think is nice.
Nice addition, as well when you add up the three components really the four components right, Cambridge solo Eastern solo Cambridge Post Securities transaction, and then the accretion from the loans, which will give a better description at the end of next quarter. That's how you get to the 3%.
Right, so, but I mean, if I'm thinking about the accretion.
And again I appreciate the work you're marketing it and again I appreciate that it's early I mean 40 basis points of starting a Christian and obviously that winds down.
Is that is that missing the mark.
And then I guess, maybe a different way to ask that question.
The 3% guide that you gave I did see.
The accretion income what would be the core combined guide if you were looking at it ex accretion or maybe you're just not prepared to talk about that I'm just.
Yeah.
And I appreciate it.
The question I really do.
We'll be very excited to do that at the end of the third quarter and give you as much detail as we can.
But right now.
We just we just closed and it's not something where we have available.
Gotcha, Okay, and what was the timing on the security sales this quarter.
Okay.
Alright.
Hello, Matt.
The sale of the $85 million.
Right just to clarify yes it was.
Right.
Thank you that's what I was looking for okay, great and then how should we be thinking about the tax rate for 2025.
Yeah.
Boy I Love your questions.
So your focus to three here.
I would say.
Historically, it's been 21% and we've guided some years that 22%, so I'd say somewhere between 21 and probably 22%.
Yeah.
20%, Okay, because they now see ATC was running up at like 25% or something okay.
Okay great.
And then your $6 million of loan loss provision how much of that was related to office.
All of it.
All of it Okay, Great and then Bob and Dennis just going back to I think what mark touched on with respect to M&A.
Can you help us think is as we look to 2025 2026, and obviously your stock currency is.
<unk> tremendous play here.
As we look going forward, what what deal size would be too small for you.
What's your ideal deal size and then are you still committed to being in the Boston marketplace or does does that.
Speaker Change: Band a little bit if you could just touch on that point.
Thanks.
So Laurie this is Dennis and I think in terms of deal sizes.
There comes a point where at our scale a certain size is just.
Two small and perhaps.
Your question, whether it's worth the effort.
We haven't sort of formulated that yet we're not focused on M&A again I go back to we're focused on executing the benefits of this integration.
On organic growth. So we haven't spent a lot of time.
Talking through that in terms of geographic expansion.
The markets that we're in the preference would be if we were to merge or it would be contiguous in nature, it's easier to integrate.
But if you. If your question is would we expand out of the New England region, that's not in our.
Our thought process at all and frankly, we're not talking about M&A today, we're talking about the Cambridge integration.
Speaker Change: Yeah, I would just I would just reinforce that lorie is.
Expanding outside of new England, even even parts of new England frankly.
We're very committed to the greater Boston market, we have building a concentrated franchise.
And just an outstanding market.
Whereas so many others are still trying to enter.
And we really would have been trying to build is that concentrated franchise and continuous is really just what Dennis said.
Really immediate adjacencies to where we are and build from there and there's just so many advantages to that.
From a management perspective and from leveraging the investments that we've made over time in a number of different areas.
Great. Thanks, so much for taking my question.
Sure.
And there are no further questions at this time I will turn the call back over to Bob <unk> for closing remarks.
Great well, thanks, Julie and as always everyone. Thank you for your interest and your questions.
Believe me we are as eager.
Speaker Change: As you are.
To share more with you.
During our next earnings call at the end of October So for now best wishes for a great rest of summer.
This concludes today's conference call you may now disconnect. Thank you.
Okay.
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Yeah.
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