Q1 2025 ConnectOne Bancorp Inc Earnings Call
Thank you for standing by my name is Kate and I will be your conference operator today.
Speaker Change: At this time I would like to welcome everyone to the conduct of <unk> Bancorp, Inc. First quarter 2025 earnings call.
They have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If.
Speaker Change: If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Crestar. One again. Thank you I would now like to turn the call over to senior Vice Yep, Chief brand and Innovation Officer. Please go ahead.
Speaker Change: Good morning, and welcome to today's conference call to review connect one's results for the first quarter of 2025 and to update you on recent developments on today's conference call will be Frank Sorrentino, Chairman and Chief Executive Officer, and Bill Burns Senior Executive Vice President and Chief Financial Officer, I'd also like to caution you that we may make forward.
Speaker Change: Looking statements during todays conference call that are subject to risks and uncertainties factors that may cause actual results to differ materially from expectations are detailed in our SEC filings.
Speaker Change: Forward looking statements included in this conference call are only made as of the date of this call and the company is not obligated to publicly update or revise them.
Speaker Change: In addition, certain terms used in this call are non-GAAP financial measures reconciliations of which are provided in the company's earnings release and accompanying tables or schedules, which have been filed today on form 8-K with the SEC and May also be found through the company's website I will now turn the call over to Frank Sorrentino Frank.
Frank Sorrentino: Please go ahead. Thank you Sarah and good morning, everyone. We appreciate you joining our call today.
Frank Sorrentino: With connect one's performance to start the year, reflecting the disciplined execution of our operating strategies as well as our continued commitment to our client first culture and relationship banking model.
Frank Sorrentino: Highlights from the quarter include a nearly 20% year over year increase in net income available to common shareholders.
Our net interest margin expanded again this quarter.
Frank Sorrentino: Book value per share continues to build ahead of our planned merger with first of all long island, increasing by about 4% since the transaction was announced.
Frank Sorrentino: Additionally, credit quality trends remain stable and our balance sheet remains well positioned.
Frank Sorrentino: Looking ahead this positive momentum momentum will continue reflecting both connect one standalone progress and the benefits of our pending merger with first of all.
Frank Sorrentino: Bill will walk us through some additional details shortly.
Frank Sorrentino: Regarding our lending.
Frank Sorrentino: All our portfolio contracted slightly on a point to point basis. During the first quarter, primarily due to elevated payoff activity within the commercial real estate segment, our loan pipeline remains robust as we continue to see healthy demand from our clients.
Frank Sorrentino: Turning to deposits, while as of demand deposit balances decline since year end, our average demand deposits actually increased sequentially.
Frank Sorrentino: This anomaly was due to temporary client inflows occurring at the end of last year.
Frank Sorrentino: As you've heard me emphasize before supporting our clients disconnect ones top priority and approach that has consistently proven effective and has enabled us to expand our banking relationships grow and the number of verticals and expand into new markets.
Frank Sorrentino: Shifting to credit quality trends remained solid reflecting proactive portfolio management, our long standing high credit standards, our track record of avoiding riskier sub segments and the success. We've had last year actively managing non relationship loans off our balance sheet.
Frank Sorrentino: Next we are moving forward towards finalizing our planned merger with first of long Island I'm excited about the opportunity to serve their distinguished client base with the resources and product set of our combined institution.
Frank Sorrentino: Our proactive engagement with first of all around clients has been very productive. These interactions have provided valuable insights and opportunities deepen these relationships.
Frank Sorrentino: Already seeing new business materialize on long island.
Frank Sorrentino: We have already identified opportunities to leverage our south Florida footprint to support first of long iron clients, who similar to connect once client base of business presence in Florida.
Frank Sorrentino: Integration planning efforts are well underway and we're seeing strong early synergies already emerge fueled by a collaborative team mindset.
Frank Sorrentino: Transaction remains on track to close during the second quarter as we wait for final regulatory approval, which is expected shortly.
Frank Sorrentino: Connect one we remain highly optimistic about the path ahead for our clients our team and our shareholders.
Shifting to the economic environment, while there's still a number of unknowns snack one has a proven track record of adjusting to and navigating market uncertainties, we remain confident in our business strategy and proven ability to execute.
Frank Sorrentino: Importantly for the vast majority of our clients, we believe any effect the parent of the tariff policy will be narrow in scope and not widespread.
Frank Sorrentino: With all that said I'll turn it over to Bill.
Bill Burns: Thank you Frank and good morning, everyone. Let me start by saying I too am very pleased with our performance and I share Frank's optimism regarding <unk> future financial performance.
Bill Burns: This quarter's results reflect the continued margin expansion to 293%, which I'll walk the firms core and it was a little higher than expected in.
Bill Burns: In addition expense growth was slightly muted as cost saves from the merger are already making their way into our results.
Bill Burns: Now partially offsetting these improvements with loan portfolio growth that was below our guidance, but we believe that to be temporary due to the timing of the actual loan closings and increased payoffs today, we possess a large and diversified loan pipeline one that points to loan growth of at least two 5% for the second quarter.
Bill Burns: Now over the past year, we have strengthened our financials in several respects our net interest margin has widened significantly it bottomed out about a year ago and since that time, we've widened 30 basis points with further widening on the horizon.
Bill Burns: The improvement is strictly organic without any reliance on loss rates and we expect the core net interest margins to reach 3% This second quarter.
Bill Burns: Our loan to deposit ratio continues to trend lower reflecting solid core deposit growth. It was below 106 at quarter end.
Bill Burns: All of our capital ratios have increase our holding company tangible common equity ratio stands at $9 73, while the bank leverage ratio was 11, 67% and in addition, our tangible book value per share continues to increase each and every quarter. It was up 4% over the past year to $24 16.
Bill Burns: And commercial real estate concentration continues its steady decline.
Bill Burns: <unk> 40 percentage points from a year ago to 420%, reflecting successful efforts to diversify our loan originations a renewed focus on relationship lending and a consistent capital build our goal is to reduce this ratio to below 400 during 2026.
Bill Burns: Turning to credit our charge offs and provisioning remained at relatively low levels, which is consistent with 2024 metrics nonaccrual loans declined by 13%. This quarter can we already expect further declines during the current quarter.
Bill Burns: 30 to 89 day delinquencies ticked up slightly but that ratio today amounts to only 0.18% of total loans, while criticized and classified also increased but again very slightly from $2 six 8% to $2 79.
Bill Burns: Although our performance measures in terms of return on assets and return on equity.
Bill Burns: We at the levels of a couple of years ago, our balance sheet positioning and the merger will facilitate and accelerate our return to top tier financial performance.
Bill Burns: I wanted to give you more color on our net interest margin outlook I'm, just going to reiterate our prior guidance of a five basis point improvement each quarter independent of any fed rate reductions plus an additional five basis points for each 25 basis points of fed cuts and that guidance at least for now also holds post merger, which includes purchase accounting accretion.
Bill Burns: First of all islands balance sheet positioning.
Bill Burns: First of all our performance is following a similar trajectory to ours and we expect to close the transaction in the latter part of the second quarter. When we report next in July for the second quarter, we will have nearly $15 billion in assets and $1 $2 billion in market cap.
Bill Burns: In terms of longer term projections, we all understand that it is particularly challenging today given the uncertainties related to the impact tariffs tariff policy on economic growth and the timing of rate cuts for.
Bill Burns: For now I'm going to generally stick with our previously disclosed conservative estimates regarding the merger which include upon full phase in of cost saves a return of assets exceeding one to.
Bill Burns: And our return on tangible common equity of approximately 15% and that's supported by a net interest margin of 320 or greater.
Bill Burns: These projections are subject to change and we will as always update you regularly.
Frank Sorrentino: With that Frank I'll turn it back to you for closing remarks, and then we'll take your questions. Thanks Bill in summary connect one was built for moments like this with our client centric culture and disciplined execution, we are ready to capitalize on the momentum we built we're energized with our impending increase scale to accelerate growth on long island.
Frank Sorrentino: Expanding both our team and our client relationships along with our reach in markets. We've already built successive were significantly enhancing financial performance, while building New York Metro Premier Bank that offers a compelling investment opportunity at this juncture.
Frank Sorrentino: As always we appreciate your interest in Kinect one thanks again for joining us today and with that I'd like to turn it over for some questions operator.
Speaker Change: 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, we will pause for just a moment to compile the Q&A roster.
Speaker Change: Your first question comes from the line of Tim <unk> with <unk>. Please go ahead.
Tim: Hey, good morning, Thank you for taking my questions.
Speaker Change: Hi, Tim.
Speaker Change: The first question I had related to kind of the economic uncertainty here and I. Appreciate some of the color you guys gave I know, it's still a little early but.
Speaker Change: Have you guys seen a.
Speaker Change: Large customer reaction at all in terms of.
Speaker Change: Any notable changes their behavior or spending there.
Speaker Change: Their willingness to invest into the company anything like that.
Speaker Change: We've spoken to a number of our clients specifically about what may be the impact of some of the various.
Speaker Change: Proposals that have been spoken about to this point and there are certain industries companies.
Speaker Change: Specific instances, where there could be some changes in either the cost structure on some part of some businesses, but for the most part we don't see anything that is dramatic.
Speaker Change: There may be some.
Speaker Change: Small issues across the board in different places construction comes to mind, right whats going to happen to lumber steel concrete things like that but when you look at what the percentage of those things are relative to the overall project and what sort of the pricing of the product will be in the future.
We really don't see anything that's dramatic at this point that gets further complicated by we really don't know what's going to happen and how much of it is actually going to take effect and we also don't know what the offsets are to that we've already heard clients, who were talking about product that may be the source and maybe a European market.
Speaker Change: If they can get domestically today.
Speaker Change: So theyre already seems to be solutions for some of the problems that we're not even sure are going to present themselves. So it's a very difficult thing.
Speaker Change: To be working through today, but for the most part.
Speaker Change: I have a pretty good feeling from speaking directly to the clients that whatever issues there are fairly contained.
Speaker Change: Okay got it that's really helpful and.
Speaker Change: I appreciate your commentary on the upcoming flick merger and it sounds like Youre pretty optimistic about achieving the cost saves can you give us an update on.
Speaker Change: The areas, you're achieving those cost saves coming from changed at all since you've found other opportunities and then if we get into 2020, maybe.
Speaker Change: Worse macro environment slower growth revenues coming down.
Speaker Change: What levers will you have as a combined company.
Speaker Change: Helped by profitability.
Bill Burns: Let me just make sure Hi, Bill.
Speaker Change: Little bit to the cost saves, but one of the things we really have not spoken about relative to the value of the first of long island transaction is that.
Speaker Change: This is Jeff this is a long island based organization and one of the strongest markets in the New York Metro market, which is one of the strongest markets in the country and so for us to take advantage of being able to work together with the folks first of long island and provide additional.
Speaker Change: <unk> products and services, because they're extremely deep client base.
Speaker Change: I think gives us an enormous amount of confidence in our ability to not only achieve some revenue synergies, but also be able to leverage.
Speaker Change: The expense base, that's there at long island on top of that we have are.
Speaker Change: What we projected.
Speaker Change: Cost saves, which I'll, let bill talk a little bit more.
Speaker Change: No. Good question, Tim there's a lot of moving parts here.
Speaker Change: But I do feel confident we'll get to those.
Speaker Change: Return objectives that I talked to one way or another.
Speaker Change: One of the areas that the projections might be conservative is on the net interest margin, we're seeing a lot of momentum.
Speaker Change: On the net interest margin and we also the accretion from the deal could add anywhere from five to 15 basis points. So.
Speaker Change: I want to be conservative with objections, right now, but having that kind of margin over and above the projections, we will add a lot to to our earnings going forward. So even if growth was a little bit slower.
Speaker Change: I think we could make it up in margin as far as cost saves go.
Speaker Change: I think we have about $21 million or so in total cost saves I know originally we said we would.
Speaker Change: <unk> them all done by the by say January one it's possible that it takes us a little bit longer.
Speaker Change: Might want to stretch that out a little bit towards towards a year from closing.
Speaker Change: But all in all one way or another I feel pretty good with.
Speaker Change: The projections that I that I laid out.
Speaker Change: Got it. Thank you guys very helpful.
Speaker Change: Your next question comes from the line of Fred is strict Glenwood Homestate group. Please go ahead.
Fred: Hey, good morning.
Speaker Change: While our macy content.
Speaker Change: Good to have you onboard covering the company, we're really pleased with that thank.
Speaker Change: Thank you very much I'm happy to be here.
Speaker Change: Yes.
Speaker Change: Just wondering if you could talk a little bit more on the puts and takes on credit I know you talked a little bit in your prepared remarks, but just trying to think through what are your age eagle can add a little bit more closely and are there any kind of specific credits, where maybe we could see some positive movement.
Speaker Change: Over the last couple of quarters.
Speaker Change: It's just been really steady and the delinquencies are at historically extremely low levels. So knock on wood.
Speaker Change: The credit quality has been if anything improving and we don't really see a pipeline at this point.
Speaker Change: Any kind of workouts.
Speaker Change: Understood and can you refresh us on the repricing opportunity you see over the next 12 months.
Speaker Change: High level in terms of those fixed rate loans and deposits will be and what we've had so far and I track that pretty closely close to $1 billion of loans that have already repriced going back to the middle of 2023.
Speaker Change: And so the credit quality of those has performed remarkably well.
Speaker Change: This has been very low level of charge offs on that on those re pricings.
Speaker Change: The downgrades, although there has been some downgrades overall, it's really really small.
Speaker Change: So that's good news and we continue to track that each quarter going forward, we're going to have I think somewhere around $1 billion of repricing through 2026. So obviously, we continue to monitor that as we have in the past, but so far the track record is good and so I'm pretty optimistic that.
Speaker Change: If there are any issues with that was repricing, we will be able to handle that in terms of.
Speaker Change: Regular earnings and provisioning.
Speaker Change: That's helpful. If I could squeeze in just one last one here.
Speaker Change: I understand the margin expansion.
Speaker Change: Is that mostly driven really by the funding side here I mean can we see loan yields creep back up a little bit given what's in the pipeline just trying to think through the dynamic of the yields versus costs.
Speaker Change: Well, yes, we still we still have Cds repricing, some $1 billion or so over the next six months, so thats helping on the.
Speaker Change: On the funding side, obviously cuts.
Speaker Change: Fed rate cuts will lower deposit pricing further and we have a large portion of our loan portfolio is in that adjustable categories. So it takes time, so we could be in a position right where the loan yields are going up and deposit costs go down and those two things combined will accelerate our margin improvement.
Speaker Change: Alright, great. Thanks for taking my questions.
Debbie: Thanks Debbie.
Speaker Change: Your next question comes from the line of Daniel Tamayo with Raymond James. Please go ahead.
Daniel Tamayo: Hey, good morning, guys.
Eric.
Daniel Tamayo: I apologize if I missed this.
Daniel Tamayo: Jumped on a little bit late but just on the loan growth side. Just wondering if you can you can talk about a little bit of the puts and takes of of kind of where you are seeing.
Daniel Tamayo: What youre seeing right now relative to what Youre expecting for the rest of the year just curious.
Daniel Tamayo: How much of the slowdown is impacting the current matson and how much.
Daniel Tamayo: The improvement you are baking into Jenny.
Daniel Tamayo: Any guidance in the back half of the year.
Daniel Tamayo: I would say than that.
Daniel Tamayo: We definitely have seen a little bit of a pullback on enthusiasm to move forward with certain projects certain.
Daniel Tamayo: Hypes of expansions or.
Daniel Tamayo: Any other opportunities, but it's it's really a bit of a pause and I think I'm already starting to see some of that dissipate. So it's really kind of hard to get our hands on it but if you think about.
Daniel Tamayo: Whether it's a construction project or someone who is growing their business.
Daniel Tamayo: Particular business is doing well and we continue to grow they're going to need.
Daniel Tamayo: Funding to be able to continue to compete.
Daniel Tamayo: So we are we have spent the last 24 months or so really doubling down with our existing client base.
Daniel Tamayo: And supporting all of their needs and certainly as you know the New York Metro market is still pretty high.
Daniel Tamayo: You can't build enough inventory in the housing market. The businesses that are here are doing quite well.
Daniel Tamayo: Difficult to hire people in order to expand so there's a lot of great dynamics that are taking place within this New York Metro market, where our bank is located.
Daniel Tamayo: That are supporting that level of growth that we forecasted for the year, which I would say its somewhere.
Daniel Tamayo: In the mid to high single digits.
Daniel Tamayo: Okay, so mid to high single digits.
Daniel Tamayo: Obviously weighted to the back half of the year, maybe a little bit of slowness in the second quarter.
Daniel Tamayo: To put words in your mouth, but.
Daniel Tamayo: No, but it sounds like yes.
Daniel Tamayo: We see our pipeline is quite strong right anthea right today, and it's look it's hard to forecast exactly each of them.
Daniel Tamayo: And when things pay off.
Daniel Tamayo: And so we saw a little bit of that in the first quarter, we actually had a fairly strong.
Daniel Tamayo: Loan generation quarter, but we also saw a number of payoffs in those payoffs are good that means some projects got done dissolved and we got paid back but.
Speaker Change: From what we can see right at this moment there appears to be a pretty robust pipeline ahead of us and it should be fairly consistent going through the rest of the year and I did say I may have missed it Danny that we expect two 5% sequential loan growth for the second quarter.
Speaker Change: Oh, Great Bill, yes, Okay no.
Speaker Change: And then and then.
Speaker Change: I just did some numbers.
Speaker Change: A paper here before the before the call and probably about 5% increase for the year from December 31.
Speaker Change: Okay Alright.
Brian: Brian per account by our new cycle restaurant.
Speaker Change: Okay.
Speaker Change: Yes, it's that's changing.
Speaker Change: And every day.
Speaker Change: Every day.
Speaker Change: Okay.
Speaker Change: And maybe maybe.
Speaker Change: Follow up question kind of unrelated.
Speaker Change: But you guys are in the middle of closing a deal and you are obviously dealing with the regulators I'm. Just curious if you can give any color on.
Speaker Change: No.
Speaker Change: The types of conversations that youre, having with regulators now relative to a.
Speaker Change: A year ago or prior to that if there is.
Speaker Change: Tangible difference in those conversations.
Speaker Change: And the relationships if youre seeing any kind of progress on me.
Speaker Change: Regulatory front.
Speaker Change: In this new administration.
Speaker Change: Yes, I would say we have very good relationship with the regulators that are weighing in on this application and the folks we've been dealing with our overall here.
Speaker Change: We're working very honestly to get.
Speaker Change: Get the application completed.
Speaker Change: I personally I think I can speak to the team I don't think we've seen any change of direction or focus or.
Speaker Change: The issues or challenges that they look at when we look at these types of applications. It seems pretty standard business to me Ryan.
Speaker Change: Now keep in mind, we were not regulated by the CFPB. So we really don't have a comment about and we're not regulated by the federal reserve either so irregular.
Speaker Change: Our regulator is the state department of banking in New Jersey, and the FDIC and with both of those entities they seem to be doing the job that they've always done where do we have anything to them. They have a lot of boxes to check to get these mergers throw and that's what they're working on that's basically at its always been that way.
Speaker Change: They've been very cooperative in.
Speaker Change: That's always been the case with our relationship with them.
Speaker Change: Okay, great well, thanks for answering that one I know, it's a little tricky but.
Speaker Change: Thanks for taking the questions I appreciate it.
Speaker Change: Yes.
Speaker Change: Before going to the next question again, if you would like to ask a question press Star one on your telephone Keypad. Your next question comes from the line of Matthew Breese with Stephens Inc. Please go ahead.
Matthew Breese: Hey, good morning, Hi.
Speaker Change: Hi, Matt.
Speaker Change: First I was just hoping we could start with expenses and near term expectations for expense.
Speaker Change: Our expense growth.
Speaker Change: Well.
Speaker Change: We're going to the next time, we report we're going to be a combined company. So it starts getting a little bit challenging to project when.
Speaker Change: We're dealing with the cost saves, but for this quarter I think I mentioned that some of the cost saves were in the in the first quarter numbers, I'd say, probably about half a million.
Speaker Change: Out of $24 million total cost saves so.
Speaker Change: On a standalone basis, we're probably growing in the 4% to 5% range.
Speaker Change: And obviously you can run your own numbers to come up with what the combined faithful date.
Speaker Change: And that's 4% to 5% annual.
Speaker Change: Yes.
Bill Burns: Just to add a little bit more color to what bill said during our prepared remarks.
Bill Burns: This transaction, we feel very strongly about the quality of the franchise that we're getting together with it.
Bill Burns: It is our goal to make certain that we do everything possible.
Bill Burns: To satisfy and embraced the client base that first of long Island has it is phenomenal.
Bill Burns: Our nominal client base goes back over decades.
Bill Burns: Very strong relationships relationships, we couldnt get out of there was a crowbar before.
Bill Burns: And so we're going to take every precaution every measure we're going to put everything we had into into not only saving but nurturing every single one of those relationships and so.
Bill Burns: If there's a little bit of cost involved in doing that.
Bill Burns: Okay with that so I think we may drag out a little bit how long it takes to get some of the expense saves.
Bill Burns: But we think it's well worth it.
Bill Burns: To really bring that franchise together in a way that's incredibly meaningful for overall company.
Bill Burns: No that makes sense.
Bill Burns: Maybe just turning to incremental loan yields and the pipeline I'm curious where those stand and.
Bill Burns: Where those stand and I'm curious what.
Bill Burns: Spreads are doing.
Bill Burns: I could see it either way, we hear a lot about a lot of pay off activity and customers go into bigger bank soap so competitive pressures, but with everything going on macro wise I could see spreads moving higher given to Richmond.
Speaker Change: <unk> could you help me out with that.
Speaker Change: Yes, I mean, the the pipeline that we have has a rate of 7% a quarter.
Speaker Change: Okay, and the loans that we put on in the past quarter I think it was about 740 <unk>.
Speaker Change: So it's within that range of what loans going on at.
Speaker Change: The spread versus match funding is to $2 $52 50 to three EBIT, sometimes and I would agree with you that spread should widen that out.
Frank Sorrentino: Based on economic conditions, but there's always a lot of competition out there, Matt So I wouldn't count on that and how you feel Frank.
Frank Sorrentino: I think you would expect spreads to widen out based on everything that's going on but there are certain segments of the market, where I would tell you spreads are becoming.
Frank Sorrentino: Tighter than I would have expected.
Frank Sorrentino: And then there are others, where.
Frank Sorrentino: It's obvious that some of the larger banks don't want to play in a particular space and so you get the wider spreads.
So it's not I don't think it's I don't think you can look at it as an across the board.
Frank Sorrentino: There is some sort of indication of what's going on in the market relative to whether it's the news tariffs or whatever I think it's dependent on what particular banks are focused on.
Frank Sorrentino: I can tell you for instance, construction lending anything CRA related multifamily God forbid you do an office loan those spreads are really really wide.
Frank Sorrentino: You start looking at C&I I'm sure you've heard it and everybody is called everybody's focused on C&I and certain parts of that portfolio. I think we're seeing spreads that are somewhat uncompetitive.
Speaker Change: And Matt if youre, if youre asking that question because you're also trying to figure out where margin is going certainly a steeper curve.
Frank Sorrentino: It would help the industry and connect one in particular.
Frank Sorrentino: All of the above yes, I appreciate that.
Frank Sorrentino: And then in terms of.
Frank Sorrentino: Close timing for the deal.
Frank Sorrentino: And Macy's so update on closing time for the deal and then where do we stand in terms of approvals.
Frank Sorrentino: Well we.
Frank Sorrentino: <unk> created thus far that we believe that we will have the deal closed by the end of the second quarter at some point in the second quarter, we still believe that to be true.
Frank Sorrentino: And so for that to be true that means regulatory approval has got to be around within a month right.
Frank Sorrentino: Alright.
Frank Sorrentino: And then the last one is just with the deal there was talk about.
Frank Sorrentino: Debt raised.
Frank Sorrentino: Helpful on the capital ratio.
Frank Sorrentino: Where do you stand on that front and has anything changed in terms of desire for sub debt or alternative forms of capital.
Frank Sorrentino: We're sticking with the sub debt.
Frank Sorrentino: And so that will that will take place.
Frank Sorrentino: Most likely prior to closing.
Frank Sorrentino: Yeah, and it appears that the market has been sort of friendly towards what we need to accomplish relative to that.
Frank Sorrentino: Pricing has come down.
Frank Sorrentino: And there appears to be a tremendous appetite for that type of bank sub debt today.
Frank Sorrentino: A couple of months ago, the stock prices were 10% to 20% higher and the sub debt right.
Frank Sorrentino: 100 basis points more expensive so it's much more beneficial to the sub debt right now.
Frank Sorrentino: Understood I appreciate taking all my questions. Thank you.
Speaker Change: Thanks, Matt.
Speaker Change: I will now turn the call back to the management for closing remarks.
Speaker Change: Okay, well thanks, everyone again for your time today, we look forward to speaking to you again during the second quarter earnings So have a great day.
Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.
Speaker Change: [music].
Speaker Change: [music].
Speaker Change: Yes.