Q1 2025 Northwest Bancshares Inc Earnings Call
Thank you for standing by at this time I would like to welcome everyone to the Northwest Bancshares, Inc. First quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time simply press star.
Speaker Change: I'll watch by the number one on your telephone keypad I would now like to turn the conference over to Michael Perry Northwest Managing director of corporate development strategy and Investor Relations. Please go ahead.
Michael Perry: Good morning, everyone and thank you operator, welcome to northwest Bancshares first quarter 2025 earnings call joining.
Speaker Change: Joining me today are <unk>, president and CEO of northwest Bancshares.
Speaker Change: Doug <unk>, our Chief Financial Officer Shai.
Speaker Change: Mauro, our treasurer, and Teekay krill, our chief credit Officer.
Speaker Change: During this call well refer to information included in the supplemental first quarter earnings presentation, which is available on our Investor Relations website.
Speaker Change: If you'd like to read our forward looking and other related disclosures you can find them on slide two.
Speaker Change: Thank you.
Luke: Now I'll hand, it over to Luke.
Luke: Good morning, everyone. Thanks for joining us today to discuss our first quarter results I am pleased with our performance in the first quarter of 2025, as we continue to execute our strategy and deliver on our commitment to sustainable responsible and profitable growth.
Luke: Doug will discuss the details of our core financial performance shortly but I will address some of the highlights on slide four.
Luke: Overall, we had a strong start to the year delivering $156 million of revenue while controlling our overall expenses to deliver net income of $43 million, an increase of $14 million or 48% compared to the same quarter last year and earnings per diluted share a 34.
Luke: Compared to 23 cents per diluted share in the first quarter of 2024.
Luke: This represents record earnings in the first quarter and one of the best quarters in North West history.
We continued our strategic shift towards commercial lending with a 20% increase in average commercial C&I loans in the last year.
Luke: In addition, our successful focus on deposit gathering while maintaining near best in class cost of funds provides a quality and stable funding base for the organization. Additionally, we delivered a significant improvement in our net interest margin as well as in our efficiency ratio and we reduced our exposure to <unk>.
Luke: Fight loans further minimizing our balance sheet risk and as we have for the previous 121 quarters on behalf of the board of directors I'm pleased to declare a quarterly dividend of <unk> 20 per share to shareholders of record as of May eight 2025.
Luke: Our strong performance this quarter as a result of our continued rigorous focus on execution cost control and risk management discipline.
Luke: We continue to enhance our capabilities expand our footprint and provide personalized services and expertise to our customers companies and the communities we serve.
Our renewed focus on enhancing our retail banking franchise continues. Additionally, we are making good progress with de Novo branch opportunities throughout our existing footprint, particularly in Columbus and Indianapolis.
Luke: I look forward to sharing more details in the upcoming months.
Luke: Regarding acquisitions in December of last year, we announced a merger with Penn's Woods Bancorp the parent company of Jersey Shore State Bank and Reserve Bank headquartered in Williamsport, Pennsylvania, I'm pleased to report that we have now received all required regulatory approvals and a special meeting last week pens Woods.
Luke: Shareholders voted to approve the merger.
Luke: Integration activities are well underway and we are working closely together to ensure a seamless transition the strong cultural fit between our two organizations is evident as forward thinking employee and customer centric banks and a rich history focused on community banking.
Luke: I am pleased to share that we expect it to close the merger and convert the bank systems by late July of this year upon closing the largest merger in our bank's history northwest will be in the top 100 banks in the United States by asset size further enhancing our scale for driving sustainable forward momentum and revenue.
Luke: This quarter's strong results can be attributed to the talent hard work and thought put forth each day by our northwest team I want to thank them for their continued dedication to our company's success.
Luke: The current operating environment with significant market volatility and uncertainty over the economic outlook may be somewhat challenging however.
Luke: However, we continue to focus on managing the factors within our control such as serving our core customers and communities building on strong financial foundations, maintaining prudent cost control and risk management discipline and being prepared to capitalize on opportunities aligned with our strategy.
Speaker Change: Now, it's my pleasure to introduce Doug Chaucer, our Chief Financial Officer, who will take us through our financial results Doug. Thank.
Doug Chaucer: Thank you Lou and good morning, everyone.
Speaker Change: As Louis indicated we are pleased with our performance.
Speaker Change: Now, let's begin on page five of our earnings presentation, where I'll walk you through the highlights of northwest financial results for the first quarter of 2025.
Speaker Change: We reported net income of $43 million or <unk> 34 per diluted share and we expanded our net interest margin by 45 basis points from the prior quarter to 387% due to lower cost of funds and increased asset yields inclusive of a 39 basis point interest recovery. This <unk>.
Speaker Change: <unk> the fourth quarter in a row of improved margin for the company as we continue to manage our loan pricing and deposit costs.
Speaker Change: Noninterest income decreased by $11 7 million with the majority of the quarter on quarter change arising from two fourth quarter transactions, including a $5 $9 million gain on the sale of our visa B shares and a $4 3 million dollar gain on the <unk>.
Speaker Change: Low income housing tax credit investments overall, we did post one 2% linked quarter revenue growth and 19% revenue growth compared to the first quarter 2024.
Speaker Change: Our noninterest expense declined three 8% or $4 million compared with the prior quarter.
Speaker Change: Gribben by a reduction in processing expenses and merger related costs and continued disciplined expense management.
Speaker Change: Pre tax pre provision net revenue was $64 $5 million, which was a 9% improvement from the fourth quarter 'twenty four and a 56% increase from the first quarter 'twenty four based on factors previously mentioned.
Speaker Change: Now I will highlight some additional details on our quarterly results.
Speaker Change: Turning to page six and our loan portfolio. We saw some modest growth in end of period loans, excluding loans held for sale of $36 million over the quarter compared to the contraction we've been experiencing.
Speaker Change: For the quarter, we capitalized on stronger consumer demand for indirect loans to offset a potentially slower start on the commercial side and that did pay off.
Speaker Change: We continue to shift our portfolio mix more towards commercial and industrial loans as part of our longer term strategy.
Speaker Change: Average commercial loans increased $121 million or six 2% compared to the fourth quarter.
Speaker Change: Despite some significant payoffs these increases were effectively offset by the declines in our CRE portfolio, which was down three 5% and.
And our residential mortgage and home equity portfolios, which were down one nine and one 3% respectively.
Speaker Change: Loan yields increased quarter on quarter by 44 basis points to 6.8% again benefiting from an interest recovery, where we were up four basis points on a normalized basis. Despite recent fed cuts as we have been focused on pricing discipline.
Speaker Change: On to slide seven and the bedrock of our financial strength and stability, namely our deposit base.
Speaker Change: The balances remained strong with average total deposits, increasing $60 million quarter over quarter, and growing one 7% or $200 million versus the first quarter of 2004.
Speaker Change: Consumer non brokered average deposits increased 68 million quarter over quarter, while brokered deposits decreased $8 million over the same period and the pace of volumes into higher cost Cds continued to slow.
Speaker Change: Our cost of deposits decreased nine basis points quarter over quarter as.
Speaker Change: As the impacts of a fed rate cut slowed through along with proactive management of the overall portfolio.
Speaker Change: Our current cost of deposit stands at 1.59% still near best in class relative to our peers.
Speaker Change: Moving to slide eight and our net interest margin.
Speaker Change: We have already covered our NIM improvement for the quarter in the summary, but I also want to highlight that the yield on our security portfolio has continued to improve as we continue to reinvest cash flows at higher yields than the current portfolio.
Speaker Change: And we have seen a reduction in our total cost of funds by 12 basis points this quarter.
Speaker Change: Next two pages provide some additional details on our funding mix and securities portfolio.
Speaker Change: Moving on to slide 11, noninterest income as I mentioned earlier.
Speaker Change: Increased $11 7 million from the last quarter as it returned to more typical levels following the previous quarter's asset sale gains.
Speaker Change: Noninterest income increased approximately 400000 compared to a year ago, driven by higher SBA loan sales and improvements in market sensitive revenue streams like trust income compared to prior year periods.
Speaker Change: Slide 12 details our noninterest expense.
Speaker Change: In the first quarter, we incurred approximately $92 million of expenses, which was up 2% from the first quarter of 'twenty for about $1 1 million of that increase was merger related so excluding that line item expenses dropped to around $91 million.
Speaker Change: Assistant with the expense run rate in the second and third quarters of 'twenty four.
Speaker Change: Our adjusted efficiency ratio improved to 57, 7% an improvement from the 59, 6% in the prior quarter. This reflects our continued focus on managing expenses without an impact on our core operations, we're sacrificing customer service, while still investing in talent to support future.
Speaker Change: Growth.
Speaker Change: On the next few slides, we cover credit quality.
Speaker Change: On page 13, you can see our overall coverage ratio is at one point <unk>, 9% up slightly from fourth quarter 24, due to growth within the commercial lending portfolio and changes within the macroeconomic forecasts.
Speaker Change: Our overall coverage is in line with the first through third quarters of <unk> 24, and we believe this is appropriately prudent given the overall level of market concern and general uncertainty over tariffs.
Speaker Change: Our annualized net charge offs of eight basis points for the quarter returned to historic levels. After the fourth quarter write downs of loans sold and transferred to held for sale and we booked an $8 $3 million provision expense as.
Speaker Change: As we have previously indicated in our 25 outlook, we expect our longer term over the cycle level of net charge offs will be in the range of 25 to 35 basis points.
Speaker Change: Turning to page 14, our credit risk metrics remain stable and well within historic levels. As previously reported we took several derisking actions in the fourth quarter <unk>.
Speaker Change: Including the sale and transfer of certain loans from our books, we saw improvement in both nonperforming loans and nonperforming assets at 53 basis points, and 52 basis points of loans and assets respectively. Both at five quarter loads. The 30 day, plus delinquency increased 10 basis points in the quarter and is attributed to.
Speaker Change: One commercial real estate loan that had previously been identified as classified and non accrual and the.
Speaker Change: The increase of five basis points and classified loans over the prior quarter was primarily driven by a few small commercial CRE and business banking loans.
Speaker Change: It's 15, and 16 highlight our commercial loan distribution showcasing a diverse portfolio and some detail on our CRE concentration, including our health care sector focus.
Speaker Change: In short our diverse portfolio and strong underwriting has helped us avoid many industry CRE specific issues and we have minimal exposure to large metro office or rent control markets.
Speaker Change: We have no significant maturity where interest rate rollover risk.
Speaker Change: Like to now review, our 2025 outlook, which we shared earlier in the year and which can be found on slide 17.
Speaker Change: As a reminder, our outlook excludes any impact from the previously announced depends woods acquisition.
Speaker Change: As Lou mentioned, the operating environment is one of significant market volatility and there is uncertainty over the economic outlook for the remainder of the year. At this time, we are not modifying the outlook. We provided on last quarter's call and we will continue to monitor economic trends and how they impact our firm.
Speaker Change: I would say, we can expect our margin to perform at or somewhat above the high end of our range, assuming 1% to three fed cuts occur in the back half of the year.
Speaker Change: Our fee income will likely be at the lower end of the range, we may not fully achieve that level.
Speaker Change: Loan growth will also be dependent on the broader economic environment, which is again unpredictable.
Speaker Change: We will focus on controlling expenses in light of the uncertainty.
Speaker Change: I will now turn the call over to the operator, who will open the lines and facilitate the live Q&A session.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen at this time, we will be conducting a question and answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
Speaker Change: If he would like to withdraw your question simply press Star one again.
Speaker Change: Our first question comes from the line of Danielle <unk>.
Speaker Change: Raymond James Sir Please go ahead.
Speaker Change: Thanks, Good morning, guys.
Speaker Change: Good morning.
Speaker Change: Maybe starting.
Speaker Change: Just kind of.
Speaker Change: Drilling into the margin guidance, a little bit Doug.
Speaker Change: It was about to ask you about the the conservative nature, perhaps of the keeping the guide and then you made the comment right at the end about at or above the.
Speaker Change: The range, so just curious kind of.
Speaker Change: How youre thinking about that going forward I mean that kind of near term relative to the end of the year, you've got the one to three cuts in there I'm sorry.
Speaker Change: Sorry, if you could just clarify the number of cuts that you've got in there and then.
Speaker Change: Just thoughts on how you how that margin the core margin may trend and if you've if you've got any updated thoughts on on what the acquisition may do to the margin as well that'd be great.
Daniel: Yes, Thanks for the question Danny Daniel.
Speaker Change: So I think we close the quarter kind of on a core margin of $3 48.
Speaker Change: Think that it is safe to assume will kind of be at the high end of the range, we're leaving a little bit of room, because the overall pricing is pretty aggressive right now so to the extent that we want to continue to work through loan growth that may deteriorate, the margin slightly but I wouldn't anticipate it to be material. There's also still some opportunity on that.
Speaker Change: Deposit portfolio as it relates to future rate cuts, we do have one to two rate cuts in our guidance again, if we end up with three rate cuts assuming the last rate cut comes very late in the year, it's really not going to change our margin outlook at all.
Speaker Change: And we will update we will provide more guidance as it relates to Penn's woods and the impact of the acquisition in the second quarter after that deal will.
Speaker Change: It will be closed and we'll have much better thoughts around where the.
Speaker Change: Loan marks came in as well as the purchase price. So there wasn't a lot of reason to update the guidance given the fact that it really is only good for another quarter anyway and that the performance right now kind of was where it was.
Speaker Change: Okay.
And then I guess just.
Speaker Change: Looking at.
Speaker Change: The deposits.
Speaker Change: So kind of it.
Speaker Change: Similar question related to the margin but.
Speaker Change: You had good really pretty strong money market growth in the quarter I'm curious the driver there are the overall average rates are still very low at 181 in the quarter. Just curious what you were bringing those on in in the first quarter and you know.
Speaker Change: Where you are expecting to drive deposit growth.
Speaker Change: Going forward.
Speaker Change: Yes. So we continue to have a lot of Cds that are coming due.
Speaker Change: We have we.
Speaker Change: We are trying to get those into more liquid pricing are more liquid products going forward. So you are seeing some of that transition from Cds and the money markets I believe the Cds went on at 375% on average across the franchise.
Speaker Change: So that's the strategy, we have seen really consistent strong stable deposit.
Speaker Change: And slight growth throughout our footprint and we will continue to augment that with our de Novo strategy. We are opening a new branch this year in fishers, Indiana that'll be our first branch opening in six years.
Speaker Change: So I think theres a number of factors that are leading to that confidence in deposit growth as well as you know.
Speaker Change: The slowdown in the economy happens youll tend to see consumers all deposits a bit longer anyway.
Speaker Change: Okay.
Speaker Change: Safe to assume the new.
Speaker Change: Money market money market rates going up basically, but just moving out of Cds I'm, assuming those are in the three somewhere.
Speaker Change: Cds would be in would be higher than that they would be in the fours because they would have all gone last year before the rate cuts came through.
Speaker Change: And they're all relatively short so it would be an improvement if they ended up in money market.
Speaker Change: In terms of overall, sorry composites.
Speaker Change: Yeah, just on the money market rates that new money market rates.
Speaker Change: Yes, new money market rates around $3 75.
Speaker Change: Oh got it okay I understand okay, alright, thanks for taking my questions.
Speaker Change: Thank you.
Speaker Change: Thank you. Our next question comes from the line of Tim Chiang from K B W. Please go ahead.
Tim Chiang: Hey, good morning. Thank you for taking my question. So you guys are doing well.
Speaker Change: Hey, good morning.
Speaker Change: Congratulations on getting the yes.
Speaker Change: The approvals for pins.
Speaker Change: Are you guys able to provide any kind of guidelines on.
Speaker Change: Maybe that changes the tangible book value dilution and the expected purchase accounting accretion due to the change in rates since you guys announced the deal.
Speaker Change: No not specific generally speaking.
Speaker Change: Rates have gone down so that will tend to benefit us in terms of March that go on the portfolio.
Speaker Change: And the overall our stock price has been lower across the performance horizon. So we have a fixed exchange ratio so that would yield a lower purchase price, but again, both are volatile and variable. So we're not going to provide incremental guidance because we'd have to constantly update it because of that.
Speaker Change: So right now we would be in a better position relative to the originally announced metrics but.
Speaker Change: There is time between now and when we actually close the deal.
Speaker Change: I got you understand.
Speaker Change: And are you able to provide a bit of an update on the credit trends you guys are seeing particularly with a lot of the disruption from the terrorists and macro uncertainty or are there any industries, particularly impacted by tariffs that you guys feel that you're exposed to and you'll have the conversations with those customers then.
Speaker Change: Yeah, I mean, it's still pretty early and there hasnt been a lot of impact that I think has rolled through even the broader economy or specifically we have looked at the exposure and I think we would look at industries like manufacturing transportation, and warehousing and hospitality being potentially.
Speaker Change: The most impacted from these current actions.
Speaker Change: The aggregate exposure to those industries is close to 8% of the loan portfolio. So not massive at this point, but certainly something that we're looking at.
Speaker Change: Yeah.
Speaker Change: Okay got it and last question for me are you guys able to provide an update on the commercial loan that you guys have been working on and any specific categories, where you guys are.
Speaker Change: No more recently been taking Sharon.
Speaker Change: I think we continue to take share in the newer verticals that we put on so think about sports finance franchise finance et cetera. The overall mix of commercial businesses. It's the same six verticals are so that we had before so.
Speaker Change: So again, we are able to pick some of that up just because those employees have been on now closer to a year they've had more time to transition and they have more time to work. Their books again, we are part of this overall broader economic slowdown, it's anybody's guess, where those volumes continue to go but we are lucky in that we were building some of that.
Speaker Change: Those into the softness so theres, a little bit of embedded growth through that.
Speaker Change: Okay.
Speaker Change: Got it thank you for all the color.
Speaker Change: Youre welcome.
Speaker Change: Thank you. Our next question comes from the line of Manuel Nava. Please go ahead.
Speaker Change: This is Sharon answer al good morning.
Manuel Nava: Good morning.
Speaker Change: I'm talking about the commercial book, a little bit more what do your pipelines look like right now.
Speaker Change: Again, we haven't seen a ton of slowdown just yet it's still pretty early and we do have some incremental pipeline growth again, because we have the newer verticals out there. So the pipelines right now relative to the first quarter, a year ago, which show that they are a little bit.
Speaker Change: Stronger but.
Speaker Change: I still also think some of the tariff effects will continue to roll through the pipeline so cautiously.
Speaker Change: Cautiously optimistic on our loan pipelines is how I would phrase it.
Speaker Change: Great. Thank you and then one more question on credit so on charge offs right. This is lance. Thanks for the guidance could you give us update on my theory provision slash kind of expectations going forward.
Speaker Change: Again, there is so much economic volatility, it's very hard to predict where those levels would be.
Speaker Change: We'll continue to operate under the current seasonal methodologies as everyone well and we will have to wait to see where the macroeconomic trends and at the end of the quarter.
Speaker Change: Great. Thank you.
Speaker Change: Thank you. Our next question comes from the line of Matthew Breese from Stephens, Inc. Please go ahead.
Matthew Breese: Hey, good morning.
Speaker Change: Good morning.
Speaker Change: I was hoping you could talk a little bit about the competitive landscape, where youre seeing the most spread compression and then I would love to hear a bit about roll on versus will roll off yields across your lending category, where are you getting the most kick up.
Speaker Change: Thanks.
Speaker Change: Yes.
Speaker Change: So I don't know that I have a lot of color to offer on the competitive environment only because again, we're not in many many markets that other larger peers would be so I'd kind of refer you back to where they've said.
Speaker Change: New commercial loan yields are coming on at seven 6% and they're rolling off at around 767, 6% I know that's part of your answer so there is definitely.
Speaker Change: Increase in rates there.
Speaker Change: But again from as far as competitive intensity goes I mean, it's still very competitive out there you know as well as I do everybody was predicting asset growth so that asset growth does become harder to come by especially when things slowdown book.
Speaker Change: Specific guidance, there I might I might add for you, though that really where we're looking at being very disciplined.
Speaker Change: And the credits we're looking at and the pricing that we want to maintain so I just think naturally that might constrict and thats why our guidance Hasnt really changed on the commercial side notwithstanding our pipelines are a little stronger than expected and I think as Doug mentioned.
Speaker Change: You know what the pipelines are and what the pull through rates or might be different 60 to 90 days from now so.
Speaker Change: We are.
Speaker Change: We're cautiously optimistic there.
Speaker Change: Yeah, just just a follow up on that last comment.
Speaker Change: If the pull through isn't as strong one of the things. We saw this quarter was consumer loan growth was a bit stronger than we've seen in a while.
Speaker Change: Is that a lever you might pull and as we think about the composition of growth. This year should we anticipate a bit more consumer growth.
Speaker Change: Potentially I mean, we're balancing that with what we think the future environment is going to be from a credit quality standpoint, we do have that lever in indirect. We currently are out with our home equity campaign pretty pretty significantly throughout the franchise.
Speaker Change: If we see that.
Speaker Change: Consumer credit starts to weaken we can always pull that back. So obviously, we're balancing growth and risk and yield.
Speaker Change: And so we're pretty active around that and one of the benefits of the organization as we've constructed it and the last few years is we are very diversified and we do have a lot of levers.
Speaker Change: So there's there's constantly conversation around strategy and how we go to market.
Speaker Change: Got it that's all I had I appreciate taking my questions. Thank you.
Speaker Change: Thank you. Thank you.
Speaker Change: Our last question comes from the line of Brian <unk> from Piper Sandler. Please go ahead.
Speaker Change: Good morning.
Speaker Change: Good morning, just on the.
Speaker Change: Obviously, you already talked about NIM and.
Speaker Change: By the same token the NII guide it seems obviously quite conservative here at this point.
Speaker Change: <unk>.
Speaker Change: I know <unk> going to change that anyway in the back half of the year, but.
Speaker Change: <unk>.
Speaker Change: Just trying to think through in terms of you mentioned pipelines a little stronger here.
Speaker Change: That 2% to 3%.
Speaker Change: Loan growth assumption was that always kind of been.
Speaker Change: Back loaded is that still kind of the way to think about it and does that always the assumption here.
Speaker Change: In terms of loan growth for the year.
Speaker Change: I wouldn't say it was necessarily back loaded.
Speaker Change: Do you think the way the <unk>.
Speaker Change: Economy started it was definitely a slower start for commercial because there was a lot of uncertainty there. So we did lean a little bit more heavily to consumers was discussed earlier also just the way the rate curve is going to play out.
Speaker Change: Lower duration consumer assets that are priced at the Hyatt.
Speaker Change: Higher rates today than they would be in <unk>.
Speaker Change: Third or fourth quarter seems to make some sense to manage the margin. So for all those reasons you saw us pivot and lean a little bit more heavily into the available consumer loan volume.
Speaker Change: And then towards the back half of the year, if things settle down with tariffs and you get a little bit more certainty out there in commercial customers are going to start borrowing we would hope to take advantage of that as perhaps the consumer if there was pull through of consumer demand upfront, obviously that lever would sort of slowdown FERC Boston everybody.
Speaker Change: So we're just trying to be very active in the environment that presents itself.
Speaker Change: Okay and then.
Speaker Change: Now is probably not going to be the time, you start doing it but just curious for modeling purposes. If in the past have you did you provide any sort of guidance on.
Speaker Change: How the pens woods.
Speaker Change: Acquisition would impact NIM.
Speaker Change: NIM going forward.
Speaker Change: No. If you go back to what we had originally published I don't think we've provided specific guidance. There again, it's so volatile with Rio it's very difficult to put guidance out there until we get closer to the closing so.
Speaker Change: With an anticipated close later in July when we come to this call in July we should be able to provide much more clarity around 10 splits and its impact.
Speaker Change: Great Okay.
Speaker Change: That's fair and then just just one on M&A in General obviously, you got the wanted to still close but.
Speaker Change: Seems like at this point seems pretty confident makes sense, given you've gotten approvals and so forth to close this thing.
Speaker Change: <unk>.
Speaker Change: Just trying to think through how open you are to additional deals you mentioned this is a larger acquisition.
Speaker Change: And the rate picture has been very volatile, which makes obviously to your point.
Speaker Change: Mark's difficult.
Speaker Change: Even day to day basis to calculate but.
Speaker Change: We've seen some banks come back and do deal after deal I'm just curious how often you guys could be two additional M&A in the back half of this year or is that something probably farther out at this point.
Lew: Yes, Hi, this is lew.
Speaker Change: In the current environment.
Speaker Change: It's it's.
Speaker Change: Sort of very tepid right, given given what's going on with stock prices and the volatility but certainly.
As we've sort of communicated.
Speaker Change: To you before.
Speaker Change: We have a dual strategy.
In the interim until the M&A market really becomes more active again.
Speaker Change: We will be focused internally on our discipline on efficiency on execution.
Speaker Change: On growing the commercial verticals. So we've got plenty to do having said that I still engaged in conversations with other Ceos and and taking meetings.
Speaker Change: And we will look for transactions in the future that are highly accretive add to our revenue or earnings per share.
Speaker Change: And add value to the firm for our for our shareholders. So.
Speaker Change: I think.
Speaker Change: From my perspective.
Speaker Change: This strategy is still in place.
Speaker Change: But certainly in this environment. There is there is a law.
Okay I appreciate it thanks guys.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: This concludes our question and answer session I would like to turn the call back to Mr. Herbert for closing remarks.
Speaker Change: Thank you.
Speaker Change: Behalf of the entire leadership team and the board of directors. Thank you for joining our call. This morning, with strong and stable financial foundations and tight cost controls and risk management discipline, we are ready and well prepared to capitalize on opportunities for driving sustainable responsible growth when and where they arise in the coming months.
Speaker Change: I look forward to updating all of you on our progress on our second quarter earnings call later this year.