Q2 2019 Earnings Call
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Hello, Good morning married have your conference I'd number.
93.
767.
Think you may have to spend any of your first and last name.
Michael Am I see H.A. E Mail and last thing is and I see H.A.E.L.E.V. I see age.
Thank you so much I mean I have your company name.
Era.
Hey, Hey, Hey.
You might have your phone number.
7819 to seven eight to nine times.
Yeah.
Just to make sure your lives.
Or am I see isn't Charlie H.A.E.L.E.V. isn't Victor Ais C H.
My first name is just Michael M.I.C.H. eight Yale.
My last thing is Ah.
The full thing.
Yeah.
Pardon your lessons Levitch just a quick.
Correct.
Yeah E V.
Ah you see H.
Rick.
Thank you so much I will join you know you have to be there.
Income was due to a rise in non interest expense from the significant investment.
In new private client banking teams, including nearly 50 employees added for the fund banking Division the venture banking group and Mckenna panel would team collectively.
Looking at deposits, while confronted by a challenging positive environment, we increased deposits by $918 million to 37.5 billion this quarter and average deposits grew $466 million.
Since the end of the 2018 second quarter.
Deposits and average deposits both increased 2.5 billion.
Non interest bearing deposits increased $546 million to $12.3 billion and still represent a high 33% of total deposits.
Deposit and loan growth coupled with earnings retention led to an increase of $3.7 billion over 8% in total assets from a year ago.
Now, let's take a look at our lending businesses loans during the 2019 second quarter increased $467 million or 1% to $37.9 billion.
For the prior 12 months loans grew $3.8 billion.
The increase in loans. This quarter was again driven primarily by our fund banking Division. This is the third consecutive quarter, whereas CSPI outpaced CRB furthering the transformation of our balance sheet to include more floating rate assets and diversifying the credit profile.
Additionally, during the quarter, we sold $47 million of taxi medallion loans.
And 91.8 million portfolio of signature financial equipment loans.
Turning to credit quality, our core portfolio continues to perform well.
We substantially reduced our credit.
Our risk exposure with the sale of medallion loans now we have a total of $41.3 million in nonperforming loans or just 11 basis points of total loans.
Our past due loans remained in the normal range with 30 to 89 day past due loans at 51 million.
90 day, plus past due loans at a low $4.7 million.
Net recoveries.
For the 2019 second quarter were 3.7 million compared with net charge offs of $3 million for the 2018 second quarter.
The provision for loan losses through 2019 second quarter was $5.4 million compared with $8 million for the 2018 second quarter.
The allowance for loan losses increased by one basis point to 64 basis points of loans.
And now that we are substantially lowered our Medina medallion exposure our coverage ratio has significantly improved over the last few quarters to 593%.
Yes, thats nearly six times coverage.
Now onto the team front, we had a two private client banking teams in the second quarter, including a large cannot cannot award team specializing in mortgage servicing banking.
At this point I will turn the call over to Eric and he will review the quarter's financial results in greater detail.
Thank you Joe and good morning, everyone.
Ill start by reviewing net interest income and margin.
Net interest income for the second quarter reached $326 million up $5 million or 1.6% when compared with the 2018 second quarter.
And an increase of $7 million from a 2019 first quarter.
Net interest margin decreased 20 basis points in the quarter versus the comparable period, a year ago and declined one basis point on a linked quarter basis to 2.74%.
Excluding prepayment penalty income core net interest margin for the linked quarter decreased two basis points to 2.71%.
Let's look at asset yields and funding costs for a moment.
Interest, earning asset yields increased 21 basis points from a year ago, and two basis points from the linked quarter to 4.03%.
The increase in overall asset yields was driven by higher reinvestment rates and commercial loans.
Yields on the securities portfolio decreased four basis points linked quarter to 3.27% due to the dramatic decline in market rates, which also led to our portfolio duration coming into 2.5 years.
Turning to our loan portfolio yields on average commercial loans and commercial mortgages increased three basis points to 4.24% compared with the 2019 first quarter.
Excluding prepayment penalties from both quarters yields increased two basis points.
Prepayment penalties for the 2013 second quarter were only $3.6 million up slightly when compared with 2.4 million for the 2019 first quarter, but down significantly from the $6.1 million in the 2018 second quarter as a slowdown in transaction activity led to a decline in CRB prepayments, which we anticipate will continue.
Now looking at liabilities, our overall deposit cost this quarter increased by only three basis points to 1.19%, which is much less of an increase than the previous several quarters.
Due to an increase in noninterest bearing deposits as well as the leveling off of deposit pricing given that we are six months removed from the last fed increase.
Average borrowings excluding subordinated debt.
Increased 201 million to $6.3 billion or 12.9% of our average balance sheet.
The average borrowing cost increased five basis points from the prior quarter to 2.63%.
Overall, the cost of funds for the linked quarter increased three basis points to 1.42%.
And on to non interest income and expense noninterest income for the 2019 second quarter was 8.6 million an increase of 3 million when compared with the 2018 second quarter.
The increase was due.
Two an increase of $3 million in net gains on sales of loans, mostly due to the signature financial equipment portfolio sale.
Noninterest expense for the 2019 second quarter was $131.9 million.
Versus $112.6 million for the same period a year ago.
The $19.3 million or 17% increase was mostly due to the meaningful addition of private client banking teams.
The bank's efficiency ratio was 39.4% for the 2019 second quarter versus 38.5% for the 2019 first quarter efficiency ratio has been negatively affected by the declining NIM and our investments in long term strategic initiatives.
And turning to our capital.
In the second quarter of 2019 bank paid a cash dividend of 56 cents per share. Additionally, during the 2015 second quarter the bank repurchased approximately 413000 shares of common stock.
For a total of $50 million.
The dividend and share buybacks had a minor effect on capital ratios, which all remained well in excess of regulatory requirements and augment the relatively low risk profile of the balance sheet.
As evidenced by our tangible common equity ratio that increased 17 basis points to 9.46%.
And now I will turn the call back to Joe. Thank you.
Thanks.
Thanks, Eric.
This quarter was a return to the original signature bank script.
With earnings driven by solid deposit growth nearly doubling our loan growth.
Additionally, we significantly reduced our medallion portfolio with the sale of $47 million in medallion loans, which now represent just five basis points of total loans.
We also added the candlewood team to spearhead our efforts in the deposit rich mortgage servicing space.
In the past several quarters there have been numerous mentions of both the new initiatives and lines of business we've added.
I would be remiss, if I didn't mention the strength of our 100, plus private client groups, which are the foundation of signature bank.
These traditional banking teams continue to add to the growth of the bank and we look forward to the future contributions as well as those new initiatives in lines of business. Now we are happy to answer any questions you might have thought the I'll turn it over to CEO .
The floor is now open for questions. At this time, if you have a question or comment. Please press star one on your Touchtone phone.
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Thank you. Our first question comes from Ken Zerbe with Morgan Stanley .
Greg Good morning.
Morning morning Count.
Let me start off in terms of the new hires obviously expenses ticked up.
I totally get it you are hiring talent is going to outgrow the business how quickly should those new private banking teams actually start contributing to deposit growth.
We anticipate that the Cana Woodford teams going to take a couple of quarters to ramp up.
So we should see them start to.
Add to deposit growth I'd say early next year, if not late this year.
As for the venture banking team that started in March that did close a few transactions in the second quarter, but really their pipeline for the third quarter is quite robust.
They already have 12 accepted term sheets, we expect that the commitments to be north of $80 million outstandings of to be north of $30 million and deposits should be well north of $100 million, if not close to $200 million. We've got about another 25 term sheets out and we'll win our fair share of those so that could lead to another 200 to 300 million and deposit growth as well as $200 million commitment. So.
They have been very very active since starting and theyve gains really solid traction early on so we're we're very pleased with what they have done.
The fund banking team continues to add there are over 3 billion now and commitments. They added over 600 million in loans again, this quarter and we anticipate that the deposit flows really start from.
In the in the next couple of quarters.
Is there a way to quantify between the the fund banking the venture banking and then kind of wood team like too is probably them potentially could bring into most deposits are going to be the most successful because I know they all have different characteristics.
Can we really don't break that out.
With public views, we have the other 100 plus team that will.
Contribute in various ways and on deposits loans fee income, we just don't break that out.
Got it Okay and then maybe just one question in terms of the outlook for margin.
I get that.
This quarter, we just we have the rate cuts next quarter very flat yield curve.
It's probably going to be a bit of a headwind.
But when you think about say 2020, if the fed does kind of keep cutting rates.
Is do you need at the 10 year. The long end of the curve to actually go up before you see NIM expansion or is just the nature of the fed cutting driving a bit of a steeper yield curve granted at very low levels, but is that enough to drive NIM expansion. Thanks.
Well I mean, we anticipate NIM is going to be stable at this point, we would need some steepness to the curve Kent for us to really see meaningful expansion at this point with an inverted curve.
If the fed continues to cut but the curve remains inverted that's not a good environment for any back.
So we would be stable.
In that scenario, if the fed cuts, but we see the the 10 year stay where it is or increase and we get some steepness to the curve than we would expect to have some margin expansion.
But right now were very pleased with the fact that we more or less hit a bottom on our on our margin and.
Now, it's just looking to drive net interest income.
Three growth rate.
Okay that makes sense and I would just one one more question in terms of the taxi loans I'd say you sold the chunk.
Why don't you sell the rest of your taxi loans.
But we sold all of the loans that were performing for for a period of time 10.
Hi sale the progress through the rest are performing at varying levels. So we sold most of our of our loans.
We have about 16 million remaining on loans.
Most of our exposure now isn't repossessed assets, where we have approximately $37 million in repossessed assets.
Our team there is working hard to getting new borrowers to to purchase those medallions in the put them back into a performing category actually about 70% of those repos body.
Have payments coming in on them. So we're pretty pleased with that.
And as we see those payments being made consistently for a period of time, we think we'll be able to sell.
Those loans as well.
All right great. Thank you very much.
Okay, all right and then.
Our next question comes from the line of Jared Shaw with Wells Fargo Securities.
Hi, good morning.
Hey morning Order Garrett.
Looking at the the national.
Lending platform is that.
Set are you happy with how Thats set up now or do you think that there is.
Room for incremental hiring.
And that's in that segment.
Or maybe even expansion and other lines.
Yes, I'd say that.
Weve added to the fund banking Division this quarter, we don't really anticipate adding there.
We really have.
Powerful team there.
And as well as.
They drove loan growth pretty significantly again this quarter.
We'll be building out the channel would team.
We hired eight.
Very experienced professionals, there, but we'll build out their staff probably another three to four hires to come to come there the venture banking groups up to about 20 830 people I don't anticipate we'll be hiring in the near term, but certainly as they grow we'll look to add to them as well.
Okay I'd.
I don't think we really anticipate adding any more national businesses at this point, but.
We'll always be opportunistic on that front.
Okay. Thanks, and then on the on the borrowing side now given.
Given the lower rate environment does that change your appetite to.
Lower borrowings as a percentage of funding or is that takes on the pressure off.
In the near term.
It's certainly take some pressure off and we're looking to reduce those borrowing costs and hopefully really rip and replace those borrowings with even lower cost core deposits, that's really our focus.
Okay, and then can you just give an update on the on the multifamily portfolio in light of the law change and.
Yeah, how are your how your.
Viewing that the strength of that from one a credit point of view and also have you seen any change in the competitive dynamics there.
So given the.
The reduced cash flows longer term.
Well, we certainly are taking a very serious.
We did a super deep dive.
Into the portfolio only cast a pretty wide yet so let me give you some.
Statistics.
We have a multifamily portfolio of 17 and a half billion.
And of that 14, and a half billion is in New York City multifamily.
So we carved out what was outside of New York City instrument stabilization laws.
New York City area.
And I was at 14.5 billion.
About 10 billion or 70% of the property has some level of rent stabilization.
So we excluded four and a half billion on buildings that are fully market rent.
So now we brought that down to 10 men.
Additionally, we excluded fully subsidized buildings, where we never anticipated having market rents and along.
So that boils down to approximately 5.6 billion.
And then we did a deep dive in that 5.6 billion of New York City multifamily loans, we reviewed a rule and we concluded that and we ended the improving.
All the renovation loans and we concluded after reviewing the portfolio that we're not seeing any.
Issues related.
Demand stabilized portfolio. However, we're pretty mindful of the fact that the environment and we're monitoring it closely.
The next step is to doing a deep dive now we're meeting with those those owners want to borrowers.
Face to face to ensure that the properties, we shape and that the cash flows of that.
Great. Thanks, and then has that changed the competitive.
Dynamic at all in the space.
I don't have any pricing or okay.
I do believe that there is less less activity and those experienced owners, who have a multitude of property and have been in the business.
Looking at.
Those individual owners, who have wanted to building.
And may not.
Do well under the new nice stabilization laws and as a result, there may be some activity happening soon.
Great. Thanks for the color.
Our next question comes from the line of Ebrahim Poonawala with Bank of America.
Good morning, guys.
And growing.
Just first question I think Joe you mentioned.
Dawn to sort of deposit growth given balance sheet growth.
So I think just falling off.
Okay, an earlier question.
Talk to us in terms of the oldest steam just in aggregate as you think about deposit growth from here on.
We've talked about the $3 billion to $5 billion range, but important growth has lagged over the last few years.
Just on what your expectations are and should we start seeing more off of momentum on the deposit growth side, though in the back half into a pretty quickly.
Well certainly we don't we don't give predictions of numbers as it relates to deposit growth, but certainly we believe on deposit growth in the second half is going to be great in that we've had in the first half and we're still looking at that three to 5 billion, although at the lower end.
Understood and in terms of just the pricing dynamics in the market and it seems like it's still extremely competitive.
If the fed cuts at the end of July .
Great and just talk about your ability to sort of flex down deposit cost to start having those negotiations with clients.
I believe that.
We'll have.
Somewhere between 40%.
50%.
Of the decline.
Instead funds rate on that we'll be able to pass along.
It will be over time like you said negotiations because.
A significant portion of the deposits, we're negotiating on the money market side.
So.
One thing we will do we will be a little bit more aggressive than we were last time, because I think there is some.
Our clients that we get that last time, when we dropped rates. We did is slowly gradually.
And the.
Competitors.
As if it was clear Stein.
Furthermore, more quickly.
On the way up.
Declines for God, how gradual we were on the way down they wanted swiftly.
Moved up on the interest rates when rates were going up.
This time, we are going to be a little bit more.
Aggressive in dropping the rates and we will pass.
Understood and just switching gears to the asset side in terms of the loan growth. So obviously dominated by cnine growth over the last few quarters.
The outcome of that in terms of the makeup of growth that you expect in the outlook for the CD book relative to where it ended the second quarter.
Well with the CRB blog, we still have a book of $20 billion.
And it has to be managed and we are doing business with our current clientele.
What we what we've been trying to move off.
The loans that have no relationship when they have won loans may be too and I never fulfilled that promise of bringing over deposits.
Those we'd like to finance refinancing away and we'll be flexible on prepayment penalty.
We also.
Don't believe we're going to bring on a new clients and see Amit, but we have some very.
Sophisticated significant clientele.
That we want to keep.
And we're going to refinance those loans here.
One thing I will say.
On the interest rate side as it relates to loans.
There is a wider gap.
Between us and the competitors and we just don't understand how competitors who can borrow.
At a certain rate and then Lynn.
On multifamily.
At a spread that you think it mostly low we're trying not to do anything some 4% we will do for clients.
Right.
We have about a 50 basis point spread right now between us and what a client on side between us and what a competitor.
His charge and we just don't understand how their margins not going to go below 200.
Given the market dynamics that we've seen in the multifamily space we're very.
Surprise that we have not seen credit spreads widen.
And is that because there hasn't been enough activity to reflect all the changes or do you think just good enough players to keep those fed state.
I think it's the only business that their end.
Some of the banks we diversified.
2012.
And we have more flexibility and will continue to have more flexibility as a result of our.
More diversified portfolio.
Understood. Thanks for taking my questions.
Our next question comes from the line of Casey Haire with Jefferies.
Thanks, Good morning, guys.
Good morning.
Just a follow up on that question. So the multi the New York City multifamily.
For two and a half billion you guys are pushing for $3 billion to $5 billion of asset growth per year, you're currently not pricing multifamily to grow.
So can you just walk us through.
How do you how do you see this these balances portfolio evolving over the next couple of years.
And what level of I'm, assuming it's going to decline.
What level, what pace of decline do you need to have and.
Without jeopardizing the three to 5 billion of asset growth.
Well on the CRB portfolio, we were thinking that over the next several years remain somewhat flat.
Because we're in the business.
It could decline a little bit, but thats why we.
Starting in 2012 to bring on different businesses like signature financial and then any deal.
We see going on now that we have.
Three or four other businesses that we put on.
Well it is positive growth and loan growth.
We believe that along with the existing hundred team, we can maintain a three to 5 billion level of growth.
Like the front banking team.
Could do anywhere between a half a billion in three quarters of a billion in loans.
On the credit side a quarter.
Right I understand like I mean, I see the new verticals, the cnine verticals, but I mean.
Multifamily is a five year product 14, and 15 were pretty big vintage years for you guys and.
I mean, I guess, another way, where do you see the multifamily balance a year or two from now versus that 14 billion today.
Slightly down.
Slightly down okay, but is that possible if you're that far above the market in terms of.
What would that fall in terms of market if somebody new comes on although we are not taking on new clients, but if there's an opportunity.
Our pre existing clientele I can tell you we're doing a deal right now, which we 75.
Okay all right.
And then just.
Stability, we can't do everything at sub we can't do everything starting with a four handle.
Gotcha Okay.
On the deposit side I apologies if I missed this in the release you mentioned, it's still a challenging deposit environment any color on where average deposits are quarter to date.
Yes, they are higher than they were when they won during the second quarter.
The average is higher.
Okay.
And then.
Meaningfully higher.
Great.
And.
Okay.
Yes, yes.
Understood.
And just lastly on on the expense front.
Tracking a little bit higher here quarter to date, obviously are year to date, obviously another another team and another big team at is is 15% year over year or should we expect that through.
Through 2020 is until we anniversary these team ours.
For 2020, Thats, a reasonable I think we'll be in a 12% to 16% expense growth.
Starting at 16% probably for next quarter, and then it should start to trickle down each quarter.
As we move forward.
Okay, great. Thank you.
Thank you.
Our next question comes from a line of Steven Alexopoulos with JP Morgan.
Hi, everybody good morning.
Good morning, Steve.
Just just a follow up on NIM.
Eric The guidance you gave for stable NIM in Threeq, you that obviously assumes that the fed cuts on July correct.
Correct.
Okay, and assuming that the intermediate portion of the curve holds which we don't know if it will or not but assuming it does should the fed cuts be more beneficial to NIM and really start unwinding. Some of the NIM pressure you saw over the past year.
Yes, it should be.
No it should be okay. Thanks, and then on the new rent regulations I'm curious what are you hearing from your customers here.
Our volume just falling off a cliff is the practice of building owners, taking out cash to make capital improvements is that just done and then I have a question of the credit deep dive.
Well it could be done.
The promotional incentive to.
Take out cash to meet the.
Refurbish building.
And what not.
That got added that is clear.
What we're hearing from appliances.
And upset.
They can understand how this could have happened.
They are.
They ask us.
Clearly now refinancings, how thats going to be handled.
And we said it based on cash flow not based on the value so much.
On the from the property.
Certainly the values of trough.
But if a client has been paying.
And has had no issues with us.
And do you have any as a cash flow will continue to refinance those clients.
Okay. That's helpful and Joe the deep dive you did into the portfolio you are now even more confident that this is not a credit challenge.
Yes, I'm more confident and it's not a credit channel.
Okay, it's more of a growth challenge for most.
Yes.
And then just separately, it's good to see another team here at the mortgage servicing segment can you give us a sense, what what do you see as the size of that deposit opportunity overtime.
Well the timing I would say it was thought would it be.
Okay. So its meaningful okay. Thanks for taking my questions.
Okay. Thank you.
Our next question comes from the line of Brock Vandervliet with either yes.
Oh, Thanks, Eric you mentioned, the steepness of the curve and just going back to the NIM discussion now for signature or what what part of the curve is most relevant when you when you think of steepness.
I'd say with five years, most relevant for us.
Okay, Alright fed funds to to the five year debt.
That part of the curve.
That's right Brian .
Okay and to the extent the the forward the forward implied rates show Steepening.
In that segment that would be.
Favorable for for your.
For your NIM.
Correct.
Okay.
And I don't know.
How much repositioning you did in the quarter relative to the that static shock analysis that.
We see in the Q, how much different would that potentially be this this quarter.
It's it's improved slightly so.
The differences in our 100 200, 300 stackable will come in a little bit.
Okay. It really all right. It really shows is being more stable Brock.
In our margins.
Got it okay. Thank you.
Thank you. Thank you.
Our next question comes from the line of Matthew Breese with Piper Jaffray.
Good morning, everybody.
Good morning.
Eric I wanted to focus in on the multifamily portfolio just make sure I had a clear so the 10 billion, 70% that had some level of rent stabilization.
You got that down to 5.6 billion is that five point again is that 5.6 billion just the fully rent stabilized buildings nothing but no. What we did is we subtracted from the.
How you doing.
A four and a half the.
Well, we subsidize.
On buildings, we never anticipated any market.
And that will be down to the 5.6.
Got it okay.
And so on the 5.6 billion.
What is the average LTV of that portfolio and what cap rates what was the average cap rate that you underwrote those loans too.
Well, that's not information we do now.
Okay did you when when the market was in the 3.5% to 4% cap rate kind of range for those loans that you would typically underwrite or would you stressing things a little bit higher.
Yes, we we used a much higher cap rate the industry.
Okay.
Okay and have customers, giving you any sort of indications of what devaluation impacts to there.
Rent stabilized properties might be is there any sort of range right now that you would you would think about.
What we're talking about is cash.
That's the conversation we had.
Cline.
Not so much the evaluation of the bill.
Okay, It's a little it's a little too early to tell.
Okay, Okay, just path and its working its way through the marketplace certainly we feel that values have been affected.
But again as Joe said, we're our focus is on cash flow. That's how you get paid back in LTV as a fall back when the cash flows aren't there. So our primary source of repayment as cash flow, that's where our focus is and we feel comfortable with that.
Okay, I think appraised would be trying to figure out how to praise.
I mean at the very least.
Do you expect any your qualitative factors that go into the allowance because of such as you know.
Large change in the industry I know, it's qualitative factors going up the change and therefore increase your allowance at least.
If we did change our qualitative factors this quarter.
And we added two environmental reserves.
With the performance of our portfolio. However that was that was offset so we would have taken back provisions had we not added qualitative factors this quarter.
Okay. So we're very mindful of the environment.
And we're keeping a very close eye on it.
We do think that we are dealing with very strong owners landlords that we'll be able to fight their way through this.
These changes.
But we're keeping a close eye on it and we are trying to prudently reserve.
No for any anticipated issues.
But right now given the deep dive that we've done and what we've seen and we don't really see any issues.
Just curious I think your multifamily Siri reserve was something like 65, maybe 60 basis points, how much of that environmental.
Input impact that 68 basis points.
Probably through I'd say two to three basis points.
Okay.
And then going back I think you said that the 5.6 billion included some of the.
Construction loans.
Well the motivation moms renovation loans.
How much of that was tied to potentially pro forma rents or were those all based on current rents.
The revenue hurdles based on future events. Most most of this includes non comp.
And at least 50% of that portfolio was all market.
To begin with.
Right. So it was roughly 50 50 market rate and then based on forward rates is that accurate.
Some some forward very well most of it was comment.
Okay.
Okay and then.
In all the cases or how many of the cases, where you also underwriting the property itself and therefore had kind of a first lien position on the construction.
We really don't do construction financing none of its construction, it's all renovation loans, where we always have the firstly.
Got it okay.
Okay, and then because of this or are there any changes to the risk weighting or risk ratings of your multifamily loans and how would that work through.
We don't anticipate any changes to our risk weightings.
Okay. Any there has been a lot of other than that there's been a lot of noise around that and the risk weightings. If we took all.
All of our loans that are in the 50% bucket and move them to a 100% it cost US 100 basis points in our capital. It is a non event for us period, and it's not something that we're concerned about at all.
That's all I had thank you very much.
Thank you ma'am.
Our next question comes from the line of Chris Mcgratty from KBW.
Hi, good morning.
Hey, Joe Eric.
But the three to 5 billion of asset growth.
I think you said.
Lower lower end near term.
How does how do you feel about the rest of the buyback and the pace of the buyback you were a little more aggressive this quarter, but any thoughts on.
Whether you think you can finish it in the next maybe year and a half or the pace of buyback.
Well you know, it's going to be dependent upon where the pricing how quickly we're using capital none of the factors change.
And when you too.
Last two quarters when Youre buying back you saw an opportunity to increase it.
Uh huh.
Quarter, and if we see the same opportunity in the third quarter, we will do so.
We won't push messages and we won't be shy about increasing it in any one quarter.
Okay. What would this be a quarter that you would say is kind of.
As aggressive in your V or if your stock is at these levels next quarter, you could even do more.
Well take some of the 18 yeah.
So.
Let's see how the market reacts to a quarterly earnings.
Let's see how the market reacts to say dropping the rate.
I don't mean, the stock market I mean.
Our clients.
Got it.
And then one housekeeping item the tax rate and the offset the any m. expense is that this quarter a fair estimate going forward.
Yes.
Great. Thank you.
Thank you Chris.
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