Q2 2025 FinWise Bancorp Earnings Call
Normal presentation, if anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce 1 areas. Head of the head of corporate development and IR. Please go ahead.
Speaker Change: Good afternoon and thank you for joining us today for Finn Weiss. Bankrupt's second quarter 2025 earnings conference call.
Speaker Change: Earlier today we filed our earnings release and investor deck and posted them to our investor website at investors.in wise bankrupt.com.
Speaker Change: Today's conference call is being recorded and webcast on the company's website, Investors Bank corp.com.
Speaker Change: On today's call Management's prepared, remarks and answers to your questions. May contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ from those discussed today,
Speaker Change: But we're looking statements, represent management, current estimates, expectations, and beliefs, and thin wise Bank Corp assumes. No obligation to update any forward-looking statements in the future.
Speaker Change: We encourage listeners to review. The more detailed discussions related to these forward-looking statements contained in the company's earnings press release and filings with the Securities and Exchange Commission.
Speaker Change: Hosting the call today. Our tent land Vader, chairman and CEO. Jim Nunn Bank CEO, and Bob Wollman CFO Kent. Please go ahead.
Speaker Change: Good afternoon everyone. We continue to successfully execute our business strategy, and build solid momentum into the second quarter.
We delivered strong loan. Originations maintain solid revenue and remain disciplined on expense management, all of which contributed to growing profitability.
Tangible book for share. Also, continue to increase ending the quarter at 1351 versus 1342 in the prior quarter.
Speaker Change: Additionally, we are proud that our publicly traded stock was recently added to the US, small cap, Russell 2000 Index.
Speaker Change: Past 2 years, will support strong, long-term growth at finwise by steadily enhancing, both the asset and liability side of our balance sheet.
Speaker Change: Looking ahead. We continue to look for growth to progress, gradually through 20125 and throughout 2026 driven, mainly by our credit, enhanced product originations from existing SP programs and incremental growth from programs that were signed late in 2024, and early in 2025,
Speaker Change: We are also optimistic about SBA lending as the overall environment remains stable, and we continue to see healthy demand from qualified applicants.
Speaker Change: Furthermore as our overall portfolio grows, we are also evaluating a measured increase in dollar balances of higher yielding loans within the limits that have been in place since 2018 that said exposure to these loans will remain modest in relation to the overall loan portfolio as our policy restricts these to less than 10% of the portfolio.
Speaker Change: As we look further ahead to 2026, we're also excited about the potential benefits. Our bin and payment products are poised to deliver particularly the opportunity to enhance profitability by gradually shifting. Our deposit. Mix away from higher cost, CDs and reducing the cost of funds.
Speaker Change: While we expect these benefits to ramp gradually with more material impact in the latter part of 2026, we believe they offer meaningful earnings, leverage over time and are important. Differentiated offerings in a bank sponsorship ecosystem that continues to mature
Speaker Change: Overall as the various elements of our strategy, continue to come together over the next 12 to 18 months, we believe 2027 could begin to reflect the growth benefits of our broader Banking and payments offering following the significant infrastructure Investments made over the last 2 years.
While multiple variables can impact this Outlook, including Target, Capital levels and the pace of our balance sheet growth. In this scenario, we see potential for our return, on average Equity to start rebounding back into the low, to mid teens range, initially along with a return on average assets that exceeds 2%,
Speaker Change: Over the long term. There could also be opportunities to enhance our operating leverage by integrating artificial intelligence into the key parts of our operations.
Speaker Change: Lastly, while we remain committed to balancing short-term performance with long-term strategy, we measure our progress by the strength of the longer-term. Growth trajectory we have established which we believe benefits a company and our shareholders with that. Let me turn the call over to Jim Noone, our bank CEO.
Jim Noone: Thank you Ken, the strong second quarter results were driven by the progress. We continue to make towards our long-term goals along with the continued upward Trend in origination volume.
Jim Noone: Totaling 1.5 billion in Q2, which is a 17% increase quarter of a quarter.
Jim Noone: And a 27% increase from the same quarter last year. Key drivers of the continued ramp in originations quarter over quarter, where strategic programs, we announced late in 2024, and a seasonal rebound from our higher yielding partners.
Jim Noone: D drivers of the 27% increase from the same quarter last year with a new programs mentioned, as well as new products with existing programs and continued maturity of the programs. We launched in 22 and 23, our origination numbers in the quarter. Also include the expected seasonal deceleration from our student lending programs.
Jim Noone: Which we expect will reverse in the third quarter in line with academic calendars.
Jim Noone: Although demand Trends in macro conditions could change in a quarter through the first 4 weeks of July 2025 loan. Originations are tracking at a quarterly rate of approximately 1.5 billion.
Jim Noone: The second quarter results. Also reflect the first material funding for our credit. Enhanced balance sheet program.
Jim Noone: Outside of some piloting, we have been doing.
Jim Noone: The funding started in the last week of the second quarter and this brought our credit enhance balances to 12 million at the end of the second quarter.
We can continue to have strong demand for this product and we are working to get more programs live with this in the next 2 quarters.
Quarterly SBA 7A loan. Originations increased 24% quarter-over-quarter and are up over 140% from the same quarter last year.
Jim Noone: The quarter over quarter. Change is primarily the result of a return to normal loan sizes from the aberration that we mentioned in q1.
Jim Noone: We also continue to see demand and Equipment, Leasing and owner occupied commercial, real estate products, both of which remain key contributors to portfolio growth.
Jim Noone: During the quarter, we continued to sell guaranteed portions of our SBA Loans, at a slightly faster clip.
Jim Noone: because Market premiums remain favorable and because we've seen a step up in qualified loan demand,
Jim Noone: our near-term plans for selling SBA Loans will remain tied to market conditions and the origination levels for the product.
Jim Noone: Our SBA guarantee balances and our strategic program loans held for sale both of which carry lower credit risks in aggregate, made up 43% of our total portfolio at the end of Q2.
Moving to credit quality, the provision for credit losses was 4.7 million in Q2.
Jim Noone: Compared to 3.3 million in the prior quarter.
Jim Noone: Of the 4.7 million. 2.3 million is attributable to growth of credit and hand balances in the quarter.
As a reminder, the provision for credit losses. Associated with the credit enhanced loan portfolio is fully offset by recognition of Future Insurance. Recoveries of a like amount in non-interest income.
Jim Noone: Quarterly, net charge offs were 2.8 million. This quarter versus 2.2 million in the prior quarter.
Jim Noone: On our prior call, we provided guidance that up to 12 million imbalances. Could migrate to NPA during Q2.
Jim Noone: The Q2 actual NPA balances increased by 9.9 million to 39.7 million.
Jim Noone: Of the 39.7 million in total balances, 21.2 million or 53%.
Jim Noone: Is guaranteed by the federal government.
Jim Noone: In 18.6 million is on guaranteed.
Jim Noone: For Q3, there could be up to 12 million dollars of loans that could migrate to MPA.
Jim Noone: Most of these past due balances relate to variable rate. SBA Loans that were originally underwritten when rates were much lower,
Jim Noone: And consumer stimulus was flush.
as these loans continue to season, we expect moderation to occur in NPA migration bill will always be Lumpy
Jim Noone: We are very encouraged by the momentum in our business and we expect to continue the steady progress.
Jim Noone: While the growth trajectory may not be linear. We are excited about the platform. We are building and the long-term potential of the bank.
Jim Noone: the Strategic Investments we made during the low point in originations to years ago are beginning to yield results,
Jim Noone: And with continued, strong execution, we expect to realize meaningful benefits over the next 2 years.
Jim Noone: I will now turn the call over to our CFO Bob Walman to provide more detail on our financial results.
Bob Walman: Thanks, Jim and good afternoon everyone. For the second quarter, we reported net income of 4.1, million or 29 cents for diluted common. Share key items that drove results were strong. Originations a pick up in net interest income due to a higher average. Loan balances in, both are held for investment and health for sale loan portfolios.
Bob Walman: Solidity income and well contained, expense growth. Also in the second quarter certain of our financial metrics began to reflect the accounting treatment from the growing balances of our credit enhanced portfolio. As we had previously communicated would happen and I will highlight these impacts where appropriate
Bob Walman: Average loan, balances, including health for sale and health, for investment loans, totaled, 634 million for the quarter compared to 565 million in the prior quarter. This increase included growth. From credit enhanced commercial leases owner occupied commercial real estate and consumer loan programs. Average interest-bearing deposits were 494 million compared to 430 million in the prior quarter. The sequential quarter increase was driven primarily by an increase in broker time, certificates of deposits.
Bob Walman: Deposit.
Bob Walman: net interest, margin was 7.81% compared to 8.27% in the prior quarter driven primarily by the previously mentioned acred interest reversals as well as further additions of higher quality but lower yielding loans, as we continue to diversify the loan portfolio,
Bob Walman: The impact on net interest margin from the higher credit. Enhanced balances was relatively small this quarter as balances just began to build in the last week of the quarter that said as these balances are expected to increase in the coming quarters, it's worth noting that net interest income and net, interest margin, net, of credit enhancement expense, are non-gaap measures that include the impact of credit enhancement expenses on net interest income and net, interest margin the most directly comparable gaap measures as we've noted on prior calls. While our focus is on growing net interest income. We continue to expect the net interest margin to decline gradually over time due to our risk reduction strategy, while the volumes of earnings assets increases however, the downward progression in margin could decelerate in future periods. If we decrease the rate of balance sheet asset diversification, or we have stronger origination volume from higher yielding held for sale loans.
Bob Walman: Or both conversely, our margin could see a further gradual decline. If we fund large amounts of lower risk and lower yielding loans, such as the credit enhanced assets,
Bob Walman: the income was 10.3 million in the quarter compared to 7.8 million in the prior quarter. The sequential quarter inquiries was primarily driven by an increase in credit enhancement income, strategic program, fees, and gain on sale of loans as noted earlier. Credit enhancement income mirrors the provision for credit losses on credit enhance, loans and increase due to the higher credit enhanced loan balances outstanding at the end of the second quarter.
Bob Walman: Non-interest expense in the quarter was 14.9 Million compared to a 14.3 million in the prior quarter. The modest increase was primarily due to increase in salaries and employee benefits due to annual performance, reviews, incentive estimates and deferred compensation programs.
Bob Walman: Our reported efficiency ratio was 59.5% versus 64.8% in the prior quarter. Adjusting for credit enhancement, related accounting, gross UPS to non-interest income and non-institutional efficiency ratio was 65.1% for 2q 255 or flat versus the prior quarter.
Bob Walman: We remain focused on driving sustainable positive operating. Leverage with a long-term goal of steadily, lowering, our efficiency ratio important to achieving these goals.
Bob Walman: Incremental headcount increases will continue to be driven primarily by higher Revenue Productions.
Our effective tax rate was. 24.5% for the quarter compared to 28.1% in the prior quarter. The decrease of the prior quarter was due primarily to the change in estimated disallowed compensation expense relative to full year, net income expectations.
Bob Walman: While multiple factors May influence the actual tax rate, we currently expect it to be around 27%, for 2025 with that. We would like to open the call for Q&A operator.
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
Speaker Change: First question comes from Brett rabbitin with hope the group, please go ahead.
Hey, good afternoon everyone. Um, wanted to wanted to start with the credit enhanced income from here and just giving the balances that you expect a 50 to 100 million by the fourth quarter. You know, the the related revenues in 2q were a little higher than I would have expected. Can you maybe talk about the relationship between the fees?
Speaker Change: and the balances, you know, as we get later into the year,
Speaker Change: So as the balance is increased um you will see again this this um large this um C Income because of what will happen credit enhancement? What will happen to the allowance for credit losses? And we have to the according to the accounting guidance, we need to reserve for these loans. Um, as if they were part of our regular portfolio
Speaker Change: Uh and so we have the same methodology, apply the same rigor as we do the rest of our ceso portfolio and then we calculate that reserve. And so that fee will be a reflection of that balance. So as that balance increases, you're going to see that fee go up likewise or I should say the other fee that you will not another fee. But the other interesting thing that you'll see in the financials is this credit enhancement expense? And what that relates to is it is the uh, it is the amount that we are passing through to the, um, on our crew basis to the, uh, counterparty, uh, and it shows up as an expense item, and it's, it's, it's a reflection of the excess call it. The excess spread, um, that is retained, that is passed on to the, um, to the to the fintech.
Speaker Change: Okay. Yeah, that's all uh straight forward I think and what what I was hoping for from the next explanation perspective, so appreciate that um and then just on the funding costs from here, you know, obviously a little pickup link quarter um was just curious with the continued strong loan growth and the production, you know, what's your plan on doing to fund the growth from here? And you know if if basically the the cost of funds is is bottomed out and might increase a little bit.
Speaker Change: So um, at this point in long term, there's a short-term answer to the long term answer to this question. The short-term answer is that we are dependent upon wholesale funding principally, um certificates of deposits. Uh and since we are dealing with a lot of variable rate portfolio, we're trying to keep the duration on that short, so about 1 year CDs. Uh, so as the market moves that's going to hit our cost of funds longer term. Uh, we are working diligently to uh, bring some of the payments business into our into the bank. Um, a lot of the payments business will be a source of lower cost deposits that uh, will be a more floating rate deposit um, and as well as non-interest-bearing deposits. So, short-term answer, long term answer, I hope that's helpful. Brett.
Yep. Yep, that's really helpful. Um, and then if I can just ask 1 last 1 around that charge offs, you know, this quarter the um,
Brett: Strategic, uh, plan or strategic platform. We're a little lower, but the, some of the other, um, categories were a little higher this quarter and just wanted to make sure I wasn't missing anything in terms of trend migration, you know, outside of the Strategic programs.
Brett: Yeah, Brad, you're not missing anything. There the ncos moved up in the quarter from 2.2 to 2.8. Uh, and the quarter over quarter difference is really just some SBA charge offs that came through in the quarter. Um, but you know, this levels in line with our comments that the way we typically look at it is if you look at the kind of LTM, quarterly over the last 2 years, you'll see generally, it's right around the 2.8 million level in in aggregate.
Last quarter. Um, you know we had mentioned 3.3 million in knossos was a good number for modeling. Um we continue to think that's the case just because it's in line with our expectations from
From 1 with the risk to the portfolio, you know, a little over 2 years ago.
Brett: But there's no there's no like Trend there.
Okay, that's all really helpful. Thanks guys. Appreciate it.
Brett: No problem.
Joe Jonas: Next question. Joe Jonas with Raymond James, please go ahead.
Speaker Change: Good morning. I'm sorry. Good afternoon. Wow.
Um, Hey Joe, so wanted to start kind of high level here. So can you touched on a bit and your prepared remarks? But hope you get that a little bit deeper. Um, so 2 things playing out across the broader Market have been, you know, Ai and stable coins.
Speaker Change: So as a tech enabled bank that you know recently rolled out a new payments platform. I'm curious to hear your thoughts on how you expect these Trends will impact the broader banking industry, you know, over the intermediate term.
Speaker Change: And then if you have a strategy on how you'll engage with these trends,
Speaker Change: Yeah, that's great. So um,
Speaker Change: Regulated banks have. And so the clarity that's provided by The Genius Act is something that we very much welcome. Now, stable coins for us. Specifically are not a near-term initiative, though. We're uh, looking into, uh, various potential opportunities, um, of course, since 1 of Finn wise's Key Products is settlements. We think of stable coin in that, uh, Tech in that context. Uh, but what we're really watching for is a strong domestic use case, uh, we see cross border use cases as low hanging fruit and, uh, there are some other, uh, strong use cases as well. Uh, business to business seems to look good, but um, what we're trying to see is how to prioritize our efforts here and I think seeing the strong domestic use case is 1 of the triggers for us, since we don't uh right now engage in cross border.
Speaker Change: Does that help? Yeah. That that helps with. And then how about on the AI trends?
And and and how you think that could improve the efficiency of the bank.
Speaker Change: Yeah, that's a great question. We um look at AI a little differently. A lot of banks. Look at it for um you know, customer acquisition and cross-selling. And that type of thing. What we really use AI for in, um, first, we use it in our it development, but you also think of that in fraud um think of it in fraud protection. So through our uh payment rails and through our lending programs, and so forth. We have the uh, AI built in for fraud detection. And then finally, some of the opportunities that we think about would be opportunities to make it more efficient within, you know, I I mentioned my prepared, my remarks, looking at Key operational functions. Uh, for example, when you're bringing a fintech partner on, there's a lot of work that goes into it. Analyzing the policies, comparing those to Federal Regulation and the bank's policy and AI seems to be something that could facilitate
Uh, the comparison of those documents and uh, see, you know, identifying, any gaps fairly quickly. There's some other things too, as well, the complaint management and so forth. So most of our AI would be back back office focused.
Speaker Change: Perfect, I appreciate that answer.
and I also want to dive a little bit into your credit hands loans, this quarter and I apologize if I missed this the materials but what we should average uh credit hands loan balance in the quarter and kind of piggybacking off that if you added
Speaker Change: Um a little over 10 million in credit hand, credit hands, ending loan, balances and reserved you know a little over 2 million. Should we expect that 20 to 25%?
Um, kind of provision ratio. Should kind of hold as we move forward throughout the year.
Speaker Change: Yeah. Hey Joe, this is Jim. Um, so just generally, so if you look at the, the balances on the credit, enhanced product at the end of q1 is about 2 million or so. Um, at the end of Q2, it was about 12 million. So from an average balance standpoint, you know, a midpoint there. But most of that incremental 10 million came on in the last week of the quarter. So it's, it's very, it's going to be a much lower number. It's going to be closer to like the 2 and a half million. Because most of that incremental balance came on in the last week of Q2
Speaker Change: um as far as the provision um and the reserve there. So we um reserved for those programs just like we do for any of our fintech programs which is uh use of the high water mark.
Speaker Change: Um and then there's a qualitative overlay. Every program is going to be different and it's going to be based on the loan tapes and and the loss rates, the monthly cohort loss rates that we've seen for, you know, for each of those programs. So you can't extrapolate out for 1 program. Um, what that provision will look like as additional programs come in.
All right, understood there. And then kind of last 1 for me here, you know, in relation to your partners, can you provide us an update with the health of your partners and
Speaker Change: You know, separately what is your current partner pipeline look to like today?
Speaker Change: Programs that we're ramping up out of their piloting stages earlier in the year.
Speaker Change: Second, just generally, I think this answers your question more, uh, more specifically, you know, consumer loan demand is just up. So, you know, almost all of our non student lending programs, grew materially in the quarter. Um, and then the third component, as far as just origination levels was, you know, we did have the expected Rebound in the second quarter, um, on the higher yielding Partners. Um, so again, just a cross the board, you know, partners are healthy loan. Demand is healthy and you know, as a result originations are out.
Speaker Change: Oh yeah. And you asked about pipeline.
Speaker Change: Yeah.
Yeah, yeah and just, you know, the makeup of the partners in there and how that compares to the, you know, current Partners, uh, that you work with.
Speaker Change: Yeah, the pipeline's really good. Um, if we just step back here for a second and kind of split it between Pipeline and then kind of like where the current impact is coming from, you know, we launched 4 new programs in 24 and you're starting to see that impact come through now.
Speaker Change: Um, as far as 25 guidelines, you know, we'd point to our Target, which has been 2 to 3 new lending Partners every year as the right number for modeling for us.
Speaker Change: Um and then those programs typically, you know, begin uh uh contributing a couple quarters after we announced them. So we've announced we announced the 1 new partner in May with backed and they're you know, just starting to ramp up here and then, um, so you know our Target would be for another 1 to 2, lending Partners, you know before year end
Speaker Change: and we look at their,
Speaker Change: All right, thank you very much. Save my questions.
Speaker Change: You're welcome.
Speaker Change: Next question, Andrew Carroll with Stevens, please press 8.
Andrew Carroll: Hey, Andrew.
Andrew Carroll: Hey um, I just want to ask around the the SP help for investment specifically with the credit enhanced.
Speaker Change: Um you know you added 10 million dollars in the last week or so of the quarter, you're targeting 50 to 100 million, still buy, you know, end of year.
Speaker Change: They they kind of math on that suggests. So you could have a lot more than 50 to 100. I guess. Can you help us? Think, are you guys just trying to kind of manage? Um,
Speaker Change: To a certain figure and kind of slow play the the kind of pace of credit enhanced editions or just, how should we or we just I guess trying to be conservative, how should we think about that?
Speaker Change: Yeah. Um, so as far as like the production year to date, Andrew like, we're a little ahead of schedule as far as, uh, you know, kind of internal, uh, you know, gating items and dates. Um, the product has really strong demand, um,
Speaker Change: And we knew the growth and balances was all going to occur in the second half of the year. I think you guys you guys have all kind of modeled it that way and we knew it would really ramped up you know into the fourth quarter. So we're happy that a little bit of growth came through right at the end of this quarter. Um and kind of you know where we're at is we're live with 3 programs so far
Speaker Change: We have a fourth program going live with that today.
Speaker Change: And so, you know, we've got 4 Partners live and filling balances and should have a fifth by the end of the year. And so that's 50 to 100 million dollar Target is still, you know what we would point to as a good end of year level for modeling purposes,
Speaker Change: Perfect. Okay.
Speaker Change: On the average held for sale balances of quite a bit this quarter. I know you guys at 1 Point were talking about, you know extending some of the whole times.
Speaker Change: Um so I guess the the question is kind of is this a fair? A fair level of of average health for sale loans to to contemplate. Or is there any material fluctuation we should be considering
Speaker Change: so the I mean, you're spot on in that the um, the increase in that balance, really relates to the extent of Health for sale program. Um and it filled up largely during the first month of the of the quarter. So the average balance, I think is a fair representation of what we should expect a loan for basically just to take or to higher.
Um, I appreciate it. And then Ken and you're prepared or marks, you mentioned just the the payoff from, you know, payments and Bin contributing more happily in the back half of 2026. And uh, we talked about some Financial Targets in 2027, exceeding it to Roa and I think it was a low teens Roe, but
Speaker Change: It would probably imply, you know in that low teens Roe level. So I'm I'm just trying to get a a sense on what's kind of underpinning that 2% Roa commentary, you know, keeping in mind that you guys I think just delivered a pretty strong quarter and are putting up pretty pretty strong profitability already.
Bob Walman: Yeah, I'll start and then I'll let, um, Bob jump in on that as well with, with any color. But yeah, we we try and be careful in assessing the, the a lot of characteristics of of what this looks like in 2027. For example, like the capital needs, uh, of the bank. You know how fast we're growing. There are a lot of the factors that could play into that, but we're thinking that 2 is a good conservative number that we've modeled out. And the the low teens uh all things being equal, would be would be a good number as well. Once again those can vary. If the bank grows faster, you know, there's need for additional capital or what have you uh, or if it's slower in the growth. So what we've tried to do is, is approximate by through some probability approaches. You know what, we feel safe and sane. And, and Bob, I don't know if you want anything. I think you've covered a lot of it. Just, um, you know, when
Bob Walman: We're looking at these numbers. I guess the way the key assumptions are, you know, what is the level of capital? Uh, which we, you know, we talked about is 14, 15% level of capital. Um, we've taken a look at historically where we've been uh recently and we think that certainly 2% is sustainable. Um, and you know, and with a fully leveraged balance sheet, then at the Target level, you can easily come up with this low to mid teens type number. Um, then the question that we have and it's a question I think may, maybe you're leaning towards, but can we do better than that? And you know and and my answer to that question is I'd say in all likelihood yes we can do better than that but right now it's based upon what we feel that we can support.
Bob Walman: Yeah.
Bob Walman: And yeah, that's that's kind of where I was.
Was going with that 1. Um just the the last for me, anything on expenses. I mean uh you know, 600,000 or so this quarter, it feels like you know, expenses are kind of playing out.
Bob Walman: Um, you know, kind of kind of, as we talked about where we're getting, you know, better efficiency here. But, you know, any any notable Investments we should we should be aware of for for kind of back half of the year.
Bob Walman: I'm not aware of it, I'm not thinking of anything at this point in time. The the um, bump up that you saw in the second quarter really had to do with the annual review and and uh salary adjustments and raises process that we go through first quarter of every year and there was and a few benefits changes, a little bit increase in cost and benefits that everybody's experiencing. But, uh, other than that, there's really nothing notable. And I don't see anything notable on the horizon. We have caution that as revenues increase right there as production increases, there will be a need to hire some additional people. Uh, we have been largely flat on our headcount for at least the last 3 quarters. Um as we ramp up production, in some of these areas we will be adding you know a few headcounts but I think we're in pretty good shape right now.
Speaker Change: Got it. Okay. But still expecting you know positive operating leverage on a go forward basis.
Absolutely.
Speaker Change: Awesome. Thank you for taking the questions.
Speaker Change: Thanks Andrew, thank you. This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.
Speaker Change: Thank you.