First Republic Bank (FRCB) 14 Jul 222022 Q2 Earnings call transcript

Company Profile

Participants

Michael Ioanilli	VP and Director, IR
James Herbert	Founder and Executive Chairman
Michael Roffler	CEO and President
Michael Selfridge	SEVP and Chief Banking Officer
Robert Thornton	EVP and President, Private Wealth Management
Olga Tsokova	EVP, CFO (Acting) and Chief Accounting Officer
Steven Alexopoulos	JP Morgan
David Rochester	Compass Point
John Pancari	Evercore
Casey Haire	Jefferies
Erika Najarian	UBS
Bill Carcache	Wolfe Research
Manan Gosalia	Morgan Stanley
Andrew Liesch	Piper Sandler
Jared Shaw	Wells Fargo
Christopher McGratty	Keefe, Bruyette & Woods
Brian Foran	Autonomous Research
Ebrahim Poonawala	Bank of America Merrill Lynch
Jon Arfstrom	RBC.
Timothy Coffey	Janney Montgomery Scott
David Chiaverini	Wedbush

Call transcript

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Operator

Greetings, and welcome to First Republic Bank’s Second Quarter 2022 Earnings Conference Call. Today's conference is being recorded.

During today's call the lines will be in a listen-only mode.

Following the presentation, the conference will be open for questions. [Operator Instructions]. to and call Director like Iaconelli, to now President Vice of would turn over the Mike I Investor Relations. ahead. go Please

Michael Ioanilli

Thank Republic First call. welcome quarter and conference Bank’s XXXX you, second to

President; Founder Speaking will Chairman; CEO Financial Banking Wealth President, be Chief Bob Herbert, Management, Tsokova, Mike today Officer and and and Chief Selfridge, Acting Olga Jim Mike Executive Roffler, Thornton, Private Officer; and Chief Officer. Accounting

today's over call make I Jim, that note that to the may uncertainties during Before we assumptions. forward-looking statements risks, please to call subject are hand and

the uncertainties For could materially like I'd discussion a see including all Herbert. more of the bank's complete turn forward-looking to on X-K any actual the the over differ website. risks to And Form to and FDIC Jim filings, today, the that now, results bank's call statements, cause filed from available

James Herbert

morning since good on has by and results and service, Mike, XX and steady focus produced stability, safety you, everyone. First Republic years ago. our and growth intense Driven Thank founding consistent a

This demonstrate our quarter and culture. our stability again the once model and of business power the results strong

model’s the Our are turn, industry, leads extraordinary industry. of higher levels client high companies, our satisfaction This drives even growth. leading most regardless banking than other and organic higher significantly very straightforward, that are in satisfaction client service than to level

the steadfast results, we throughout credit a refer steady long and Our produced and existing maintain and very stability. strong bank's satisfied on their same history. clients That capital exceptional they safety do their and friends they time, has At stay with us, long with term quality more focus us, colleagues. term the focus

have year one-tenth X,XXX, only the those For example, top of been XX the net of our charge-offs banks. since

term to culture be our through have long and model economic cycles. Our all successful very proven

holistic is In service fact, more economic our by of client-centric even valued clients. uncertainty, our times broader during

to once our is model’s again currently than ever. household increase, doing. new has these current often acquisition recent This stronger the performance conditions. this quarter. ahead excellent During client during rate our we're in Today, we most see go well-positioned driven times, our as it And

over turn Now call let the Mike me Roffler, to CEO.

Michael Roffler

It of continued performance. terrific Jim. strong you, growth financial was Thank and quarter another

model quarter's the the This our and our of consistency business demonstrate again culture, execution. strength and of results once

share Let up the were more S&P have up loans now the a assets on down few me Year-over-year, X.X% Management also period. total despite a were for XX% total quarter. XX%. highlights Bob bit XX%, Wealth this XXX touch outstanding will the grown same over being deposits momentarily.

XX%, grown financial has growth share net than performance. Our interest XX%, strong book tangible have income XX%. up more increased revenues Year-over-year, And has share turn led is per in total value to XX%. grown earnings importantly, per

supports service part is and focus our model. growth fundamental consistent safety capital, Our business on a and over strong liquidity and credit Maintaining time. stability results of

very always strong. with quarter only We've of only total credit earning net focused the points net delivering were strong during capitalized drives This and as Tier interest more ratio assets. through clients environments, matching margin Our on in all Non-performing with well liability assets part quarter. income model. end. charge-offs were X.XX% seven $X.X asset our do grow important stable another business our interest and growth a and is of net we revenues. remain very remains basis We leverage Effective end, at at X a quarter million

to offices to and continue investments service strengthen and technology client future growth. in new people, strategic further We make drive

growth level year-over-year. invested in colleague and We supports by base service. our client our This have of growing differentiated by people XX%

our are technology also in which clients. potential. And we point critical client provides core our its successfully strengthens service year, support see And Earlier and brand remain our we focused now we experience, ahead, strategy. Investments for completed to great opportunities acquire our also facing differentiated new invest and on to roles. footprint, to support optimizing this talent Looking office an in conversion. client continue our in and we important

area, pleased this had and we in wealth now years. deepening coastal management a teams in Seattle. of full During the We management in hired attractive our we highly two banking quarter, opened focused our the like office to banking wealth interconnected past couple the We're where first service and market. markets Seattle very presence offer on very urban in remain

markets. our year, Over open the new offices approximately we next four expect to across

half Our model first result remaining success to staying true great of and the quarter was are disciplined a and our client our year. Overall, it the consistent service of in and performance execution.

call Chief Mike the turn I'll over Selfridge, to Now Banking Officer.

Michael Selfridge

Thank you, Mike.

ability reflected loan to volume on quarter. strong as Republic update is transaction business. residential strong to the even and quarter was across Multifamily very family very exceptionally at reflects heading a season. a of buying spring provides billion. robust volume. Single important the at billion. second an The third the into was clients $XX.X to $X.X at client. markets accounted home the robust great our billion. family execute a purchase single $XX service, quarter in demonstrate opportunity more strong origination provide The me our activity the lending the First on for was and continued our activity quarter for volume funding Purchase Loan Financing our the Let XX% purchase residential differentiated lending is volume pipeline strength for of strong our further for home during very

full expect to the high-teens Given achieve we for growth, year-to-date our loan growth year. currently

real originated excluding Turning PPP had continue Business were loans strong banking and into quarter. year-over-year. Business to XX%. also quarter for the line commitments XX% loans standards. our up just conservative was credit, a The to loans loan maintain we during average all ratio underwriting value estate

of XX.X%. the During utilization quarter, rate capital to slightly call lines the on credit decreased

be up pleased Now very X% were year-over-year turning to deposits we in a and position. year-to-date. to strong continue that funding, XX% We're

quarter. basis points. Our This was XX deposits, last just over overall XX% total points funding basis base five of drove funding up an remained only from the which cost

diversified. deposits end. end, of at business XX% base deposits quarter And represented total deposit modestly quarter remains XX% Checking up last at from Our of quarter. represented deposits well total

have we with very expanded office are to opening wealth in region. and management operations pleased mentioned, Seattle in banking banking the preferred Mike the As first of area our the our

Our are and our service proven delivery to an of channel element preferred important be model banking offices deposits. great have gathering for a

Our offices million average of on deposits end. with are productive very office nearly per at $XXX quarter

continues I'd drive to service of is to performing Bob now stable, organic And Wealth over well President quite growth. Our and to the like turn call Management. Thornton, model safe, Private

Robert Thornton

Management well very continues perform you, market volatility. Wealth Thank despite to Mike.

approach Jim is over than more -- by This compares management In the assets S&P favorably Year-to-date, the market billion. which such net the continue was client fact, touch to Despite clients period. even highly as valued during broader same under inflows. more strong XX% management wealth XXX, to see mentioned, declined market our banking $XXX volatility holistic to the down high XX% times. to have we

a inflow billion, During with the over first half half consistent the of last $X business of year. first this net year, management client our of had investment

that services of In exchange growth addition of insurance, can on focused revenue and sources to financial brokerage, from investment management, provide Fees with we wealth is This on wealth asset-based the XX% foreign very clients revenue fee and decline management year. of first volatility can revenue diversify half these year. prior drive from offset management our help planning, serving helped in this times through fees. investment in market services. market fee remain strong trust, our fee the management the Year-to-date, impact total up diversification growth

team wealth for wealth makes great welcomed Republic to relationships to business successful and demonstrate professionals. And service, First exceptional destination to our an attractive continues First banking wealth are Overall, opportunity well. our integrated last Times these manager new call, wealth perform deepen we households. new existing and very Republic. model management acquire like since our Our management a another

like Now I'd the Acting turn Tsokova, Chief Olga over to call Officer. to Financial

Olga Tsokova

consistent a to on we manner. With focus safe in Bob. liquidity, operate you, continue credit, sound and capital and a Thank

remains credit Our net quality were only charge-offs Year-to-date million. $X excellent.

the performance. reflects growth strong Our $XX provision our was excellent This same million. provision over losses for credit continued period loan and credit

average our leverage assets Tier was the X strong. Our capital strong. X.XX%. ratio remains of Liquidity quarter second High liquid quarter. position remains also XX.X% total very At very were quality assets in end

safety was net to the due Net interest reflected a for of quarter income. net in the was a to This second power growth stability, addition interest the higher income up as the assets is in In year-over-year. as quarter robust during our growth very XX% earning interest and strong well margin.

net second margin X.X% for Our was the quarter. interest

and in the in market of which yields view. quarter’s interest This a top expect to a modest increase X.XX% costs. We year X.XX% full fed is be half our level, reduce yearend, line range only asset with of in cash the from our a XXXX. benefited rate at to of currently rising the NIM net X.XX% funding for This against is margin fund

Our for efficiency quarter. the second XX.X% ratio was

more the efficiency range continued offset This full quarter’s of year efficiency investment the expect of currently benefited our from strong XXXX. growth, which than to business. end XX% in be for ratio the lower to near XX% We revenue

year has for effective the the tax of to it be stability tax our full year, Overall, been We the effective in XX% XX% rate rate of consistency XXXX. the and the was expect model. Our quarter. of half great second the to first a for range now XX% reflecting of

over Roffler. the Now back turn I'll call to Mike

Michael Roffler

Bob and Mike, you Jim, Thank Olga.

colleague been grounded in most business credit, For importantly, This focus capital unchanged. and over XX client liquidity, providing on Republic's years empowerment, extraordinary has conservative remains foundation First and service. model strong a

as of our each and focused as on and every is ever strong day. model executing all remain Our colleagues

your be we'd questions. to take happy Now

Operator

from Thank you. take JPMorgan. question Please first [Operator with And ahead. Steven Instructions] Alexopoulos we'll our go

Steven Alexopoulos

everyone. morning, good Hey,

Michael Roffler

Good morning, Steve.

Steven Alexopoulos

I on the want loan to start side.

that reporting originations, growth the is for been housing I'd and Can to you strong slow $XX such the guys housing issue. walk market headwinds? rising drill you're market and strong lack given really of And both negative growth the would you quarter despite this you're that over deliver rates, billion concern family. the of impact the have down supply persistent how through comes to you single-family there's more those in single-family up single on like more. for growth specifically you supply that able in said, So With then for appear mortgage loan to loan

Michael Selfridge

to Mike thoughts Steve, it's hand couple the others. it Well, I'll of it and over a Selfridge. here. kick off

we Steve, of spring saw of we're all, a that's some bit, market, is of X.X years growth more I First rate in but service little basis, cumulative I simply, fairly okay. season, all a premium still this, it's say constrained. actually still in And healthy. a a Supply going month It's share. past, are pattern bit and is slower the slowing. and a little on a strong in think the and summer. of a seasonal come that that's a purchase markets, back markets bit, followed prices The buying tight, down taking of markets up there's and reverting still I'd housing by to supply a at relationship like think characteristics market. a maybe active are our Quite In we

Steven Alexopoulos

helpful. That's

the on you're And of Now one, to do eventually walk if growth the market growth the should or impact issue more deposits we the assume expect deposit how for common And you to concerns that fund the now deposits? other the which support fund teens the going saying rest we loan you're cost remains first, so for think So from incremental growth? two, types and to year, loan us those whether about growth? the remains higher, of that? maybe on through strong growth to -- need you can the assuming high NIM is, how you'll

Michael Roffler

Yes, Steve.

dates Mike in where along seen sort So the in to we've starting the see are of that buying past, years year about, the pandemic talked around. a because the just of obviously spring little XX April and that the tax 'XX June moved first lighter bit season of of and half same were XX 'XX the seasonality deposits is that,

our broad-based. the the two We deposit the I funding first in continue activity. very last We'll XX-plus in given And CDs checking not continued a you'll terrific it's of you and up rates. zero reach bring where see network also a deepen a but the And years, to base so we're probably, half those do support little been CD bit to to utilize declining to you only to out start dollars. pleased have you and great to know, probably relationships, our tick office think lending to that because grow see way year we've clients

and a do true And so had bit that’s strategy it. and starting that we're a we've tried to little of already

a bit two also years. borrowings quite thing The other declined in say I'd our the is last FHLB we

of thing great steadily are is position and funding strength room because of our from plenty climbing. there's XX% over have and capacity start the other And there so And of deposits those. to a utilize we been

things And years. the so in we place we've of good done in a because the feel all we're few past

Steven Alexopoulos

That's Capital was Mike, side. capital know Okay. August maybe then capital. you’ve of helpful. it the had I excess was on or XXXX. years two the last And company, so raised,

from pretty But tough to need does you stocks be don't knows we have might year pull? capital? now. levers bank So that economy that what for you And a issue year the common the like a there so pull are to of about levers that environment Thanks. to backdrop if left there maybe Who are mean one it's will be and overall. able additional

Michael Roffler

Yes.

data your we in did is two-year think on the year well. served capital November. right later preferred very August but common, in the think I the some perspective has also I on us And

go point, so years, which in for we've time the last from here market been Similar us right means it occur like months seven means itself, say, which seen your to don't you two know we're and the shape the opportunistic probably past would the the And good when a had because we're that's or of we've presents in when the always uncertain the past, launch right to months. four mindful early markets. at I of more And going now. to six in is eight really sort you've last,

we're agnostic feel the opportunistic always but common preferred at we to we remain bit or where And a so and market. really good now,

Steven Alexopoulos

Okay, thanks my taking questions. for

Operator

our take Point. Dave next go We'll Compass with Please question Rochester from ahead.

David Rochester

morning, quarter. good Hey, Nice guys.

Michael Roffler

Dave. Thanks

David Rochester

you loans, XQ. pipeline you is pipeline very going a starting that on can heading quarter. I strong loan compares what you Just mentioned this strong well how maybe try what levels in the of like just about you're quarter, into saw And opportunity forward. for just of was to obviously into wondering talk to looks that going as terms customer frame capital the the in the dynamics seeing your call business and activity there? And standard that growing set which

Michael Selfridge

Dave, Yes, Mike Selfridge. thanks.

opportunities. And just in of velocity much terms I harder it's that are being of funds. utilization question characteristics, I'd going from pace of The The raise down say year-over-year. is a significantly I said the slightly bit quarter. is First, to from pipeline the more that is of rate, selective your down that in we're People industry starting but opportunities, see, business, saw again earlier. quarter. mean Cap in seasonality overall rates, tick last the to single-family or strong to you to that about And plenty pipeline. particularly tending is share methodical slowing. mentioned and It's still high-XXs. that is It investment to we've those utilization what slowing. the up toward is is by And gravitate drives slightly this investing if slows, XX.X% And as XX%. on the of which down mid-XXs call the market historically a sort about their

in range. within strong of still So Growth for are and I us funds opportunities new acquiring opportunities. terms that we're think right

David Rochester

on the where the then can can yields? that new loan color for well? where for buying major yields you especially your multifamily just about are outside resi muni today, securities talk just Thanks and new you're then of and talk there. of across then and securities Perfect. if the some you And the rest side And you're as that products, seeing about

Michael Selfridge

Selfridge, I'll yields. with Mike loan start Sure. the

in prime CRE it multifamily be points, basis largest been And at to then that's X.X% banking, For weeks, tends business And to segment XX I'd range, Prime single lending about six say call X.X%. X.XX% the family XXX originating minus about coming so in the being there. X.XX%, call last X%. to about capital we've the X.XX%.

had the full last benefit increases haven't the of Fed We June. in

David Rochester

on the then And Perfect. front? securities

Olga Tsokova

first was compared were just Dave, the about X%. X.XX% in quarter, second to purchases the subsequent this And securities, subsequent around non-muni for Hi, about to quarter about quarter. quarter to look purchases In to in compares is during to the X.X%, the this quarter, TEY TEYs HQLA, X.XX%. about the [ph] if the X% X.XX%. and quarter the TEY the the is And munis TEY during the first are And Olga. at the X.X% was end, And X%. muni the the this at end, and we

David Rochester

Great.

the And that on to out So your was of to nice it two as I sounds loan range. end average the up you're curious continue the you've here? your we if at like what you actually some see NIM hikes seen higher in yields reinvestment securities move if just sort you're rate chances was still together, new guide, and curious kind you the could just up expansion expecting rates, guidance? are that I of Fed stabilize quarters rates. first end purchase margin in the some you expecting play of

Olga Tsokova

Sure.

So we X.XX%. of be Dave, we believe top range X.XX% our expect -- at of we half the it to will to

David Rochester

Yes.

go So I I -- ahead. guess mean,

Michael Roffler

let just a across step stability just Dave, consistency always back. board. and comment the maybe on me and take maybe focused We've

results margin three on I go think pleased really that the stability high results on after in further I we're of we about and to to the business to be predictable delivering and We're and low continue then investing quarter efficiency, sort results in that now we think time. demonstrating about of service, and for we the And and what invest over for sort of these first is business, about excited safe continued which how would leads we quarter, stability. we've very ago, said clients frankly, client it and half the we've in our you If the end towards with back we franchise, in feel end deliver -- time. ranges, the years over where on future in marketplace franchise consistency that compete the growth allows good how continue and efficiency, stable, probably year clients, are for and us because serving and that if and

David Rochester

just Maybe that. the of had Appreciate I you you're thinking Yes. the about XX% how cycle. terms last deposit talked last in in one, one about you betas. know

still bit you'd Are of that thought all, that range, above You and inflation numbers at a little rate that what be Has maybe given process you kind expectations in hike just thought that. we've above just seen with generally XX%? changed thing?

Olga Tsokova

would in say generally I this we're range. Yes.

expect is in this than rate will cycle previous higher cycle different, we be and cycle. every that slightly right However, XX% the

expect So we above XX%. to be slightly the

David Rochester

right. guys. Appreciate it. all Great, Thanks

Operator

And we'll our from next Evercore. question Pancari ahead. Please take John with go

John Pancari

Or thinking expectation about we you Also slowing you on the that if us XXXX? growth maybe type you're Is what that and that Do how potential little Could morning. in slowing been expect see thought you've a process think of capital that's of here? wanted calls continue high -- around to to for loan approximating? the see side, attainable bit could appreciate XXXX. see teens as I cool color I Good you give mortgage? mid-teen likely

Michael Roffler

question. I as what service believe I outlook consistency think year even prudent think continued go XXXX. that a past it's we And has John, serving And to Yes. is clients have. forward look great to excellent after and we that's into that today led continue we and year, and mid-teens delivery the

households, comes new more mentioned materials, from in presentation business earlier. continuing to our clients. clients, as And half If existing than of you we grow remember we’re those existing our

as not And to than satisfaction excellent, this earlier continue do the more if leads the Net and also but remains remains referrals. leads been with year, Promoter business us. that to Score from only more well saw to industry you our so And Xx as they it's high repeat client

macro what model and service we that at confidence continue pace. in varying so environments, can year, economic that think us is gives with is to I this even a demonstrating mid-teens grow And drives And that uncertainty.

grow noted, well. As serve Selfridge able to pick share and up and clients to been extremely we've Mike continue

John Pancari

think management Mike. half wealth about the the market and in when growth mean, All the asset should Thanks management year just wealth in know quarter. given of this in we it. there you growth, separately, that seeing at I side, then as look right. how linked XX% down we're terms helpful. back Got revenue That's the the think we of fourth about And third dynamics assets on as the quarter? well should flows? the How I

Robert Thornton

very Bob. see think is Look, to inflow clients. This from I continue we Yes. strong

I think impact Obviously, team remarkable see hires. we'll business. some on additional the

investment management As you of at each fees. we our know, the beginning built quarter for

So to the half want fees first investment our million. And third probably we $XXX we comments, in But management stated revenues see which $XXX other versus to were XX% will assets. strong year. strong up of quarter, in my growth million, as growth run households, I about I continue highlight noninvestment in this for year the the last management have, again, in

the So we of we just things offset a the down the can lot that we're the rest that something move count have year. through headwinds is market but the having of to market, is as something of

John Pancari

Thanks for taking great. questions. Hey, my

Operator

Haire with take ahead. from Casey our question next Jefferies. Please We'll go

Casey Haire

forward. Good just thanks. ratio had at a of the bit efficiency year-to-date? year. guide pressure little the to everyone. on guide going half year? running that a implies question at morning driving The used what ratio. XX. low back in in XX, the the it's is And It's But the seeing of And efficiency the year-to-date, of half the -- I we're wondering XX. the back of improve pressure coming Obviously, so NIM in the low is end what Yeah,

Michael Roffler

both Thanks, growth, you Casey. the at as interest if extremely look and across income. fee strong income business this. say been net I guess I'd has Revenue you see,

frankly, so is we're the a lower because outpacing making. just because And just growth, nature, of investments ratio the is bit the revenue

mentioned, ratio If half that beta, it imply little this at has a investing, outpaced bit, quarter. people, And slight low. does top in slightly as It a of to technology, We a mentioned I continued and probably invest still be we're offices Yes, the clients. maybe Olga continuing deposit as increase. to clients nature to The our bit Could serve client been support in as margin bank picks given the the are that leads to and just activity. before, that in mentioned. up but in growth franchise below? we the range, we growth

Olga Tsokova

the start those would not of years, I couple COVID expenses. up during we'll the quarters, seen benefits that couple over picking that but We've them we add pre-COVID And last yet. at some experienced of the first of they're the levels increasing

can we So forward. up those ramping see going

Casey Haire

you, the just I Got of for ton But room ability funding -- level side a stable guys used pressure what [ph] in put apologies First was that wondering Mike. you would is are the of where use And sort NIM a following Republic. costs, just your borrowings from up have peak as on of deposit I on to if just of spot rate generate terms on then okay. know capacity, the did -- at missed what borrowings referenced, we're them? that to this. the the was But -- they you I And X.XX%

Olga Tsokova

on spot the deposits points. June with basis XX as start of I'll rate XX was

Michael Roffler

On the think of a I in Casey, the second we've non-deposit our well funding, below one comment, of as past. FHLB, sources percentage of been from where we're

a guidance, mentioned. And use as to margin ability that while bit an consistent with more being so is source our there Olga

within more NIM middle still the end sort use there a So and remain of towards and range. of to ability even overall is to the our bit an high

Casey Haire

Excellent, thank you.

Operator

go Please UBS. with Najarian Erika from question next ahead. our take we'll And

Erika Najarian

morning. Hi, good

be in well family, Just been It's even two single recession. a resilient in documented growth how particularly can questions.

is peers ask results lower. in chunky about. of But environment growth the wanted to that two of ask since of I drive of him wanted morning on-balance I test there's sort rising the mentioned this sheet especially to just that causing stress your rate of mortgage sort the parts this sheet balance one So to

deposit potential if The in significantly of funding wondering first environment investment is costs beget continue would rapidly as the for fully it's for rates, the timing let's rising Republic actually positive, the to can you on your for be exposure particularly start past away that say, for rising think skewed year, I a if, an growth capital And you've First the deposit and more funds, there from had more X.XX% some of could the R, for such Mike deposit call we opportunities industry, terms a about think sort consumer? investment appreciate funds. in seeing end of more is responded at hiccup of I be lines. we the mark-to-market given negative until that environment. now Mike, growth better that even I'm

Michael Selfridge

lag. Selfridge. Mike I understand And perspective I your mark-to-market, I'll from they they start. do and really it's how cap perform? If on call, Erika, industry an think question do

private If tend a of depending you quarterly next a valuation think about the round valuations markets, those to lag on or either financing.

cycles, down over this So quarters that come said the over I Having would private industry quality funds. would expect few many valuations overall. particularly next that, is an that performed has

fundraising. still level will there of be So a

going fund raise Others, of longer little they'll a the bit money. more It's but quality selectivity little manager difficult longer, will will for and be and it opportunistic. to they're And take many funds. matter. still think take I clients, a our like certain

market. whether quarters And in but I that's now terms from few best of year down don't a themselves a some or the now a or they're from present of So I in know opportunities know, very investment opportunities. opportunistic now,

Michael Roffler

then And periods. quarter one been we grow second grow on of most Erika, our historically $X.X side, view, really has pleased the to We're continue to absolutely, deposits. And over to the to deposit with really clients billion and to a and flows great is the testament our service in the relationships tax happen a of June result and that April spite dedication large in continued of people. challenging

CDs periods. as in a But given funding, to for going higher see to rates we as have Fed, you'll we the we when have bit reason of As the relationships prior look have go mix the we we X.XX% will yield. we clients we're rise go and deposit forward, more note to deep to deposits continue rate incremental grow that no believe, in

James Herbert

Erika, it's Jim.

in you our households. As some of is growth ultimately as relationships, and That a the household point. high includes earlier, fundamental element long deposits. referred that is the us and And growth following time, a from drives comments at business of the historic know, rate,

Erika Najarian

the good we But for Great. about XXXX a And of we we year happen is X.XX% hit we margin And a long hear basis? as your that perhaps is the think outlook here, interest high in rates. and just from and just so if quarter a on as Olga, knows on range sort think curve, to question, quite to think the high Jim, the who we the as think question, to funds point what's forward stay voice. just NIM based going the follow-up into we robust. the progression the for net in about X.XX% have point re-asking could quarter -- the clearly, to that a about quarterly of rest fed Should continue second second of

Olga Tsokova

rate. up Fed we year, the Erika, as the if from quarter-over-quarter. year, at X we were costs we for And our were beta low, the six will quite year of expect the fund raises the our And is the was look beta Hi, to so points first which its second and keep basis half at NIM at early the points, X X.XX%. up basis in months deposit just in we of pick the able

the So our this of to we of the half to predict, but provide again, is X.XX%. why it's hard range guided top X.XX%

Erika Najarian

much. so thanks Okay,

Operator

ahead. Research. next Please We'll Bill go from our Carcache with take question Wolfe

Bill Carcache

here. construction I there Morning. near taking is some us apologize,

other the Or base about growth and think is continue customer really challenging sharp with the more things model? specifically negative which to strong your more to in you wealth unemployment to at levels as of immune you how rising in to rates of the of a you despite engage a start could current recession even nature the increase we've seen to should appetite in that encouraging. You've addressed your of just impact we and certainly environments at being effects, your you see to think recession? model the sort activity your point really speak But date

Michael Selfridge

alluded with growth and lot lot I a want us thoughts. net think clients highest terms Bill, They're years. look of Mike Selfridge. There's at in satisfied macroeconomic the score cycles. in a or grow But market. industry. affect reemphasize cycles, of premium Maybe market. wealth after down size a rate. XX, room market. with any we here a you in if at active, certainly And just have factors a Mike service clients. been the promoter More A coming the a client is of rate to down growth and a overall the we of these penetration, half than we're from to what of in for any effect relationship going to couple market existing And have market up

So grow we consistency go mentioned, to to safely the I'll optimistic the was stability, the and that. that back room about feel soundly, and

James Herbert

look ours. purchase real is funding us. to big they us. intermediary over on of in the mostly, about rate. too we ability it, go you because finance out. consistency and to They the go so banks, rate service they a people But perspective has on I've me pull brokers our go if deals it's estate little historical these better the cycles. brokers, does lot tend And around delivery service that more it And been -- the bank it's than middle for actually competitors funding And cost Maybe of the a loan in that compete well they very of let and total our generally called reason on Maybe versus our service, that times are Remember increases, to other Jim. bring know let in let can fact, since they their and and while. add at to back, delivery compete just other their come than and a The it's based get, of they processing, is delivery. the generally support costs service

a it's coastal and home large fact, in these share position. The big, very So we very business. lending dominant business is not in We're have do markets. urban

this, and us to whatever So that's an downturn. the through probably coming it's easy now take enough will share greater a position, even at additional Thanks. probably is percentage-wise for it happening as happen

Bill Carcache

you, super Jim. helpful. Thank Thanks. That's

seeing favorable among of who've more back lenders the notably that margins? following is seen contributing mortgage rates? that final to And sort just less Jim, up are today So on comments, we've those you in pulled increase competition amid

James Herbert

of relying seeing this anyone edge of is I would much on yet. not it, -- the leading secondary More market. we're but the market, out point, at say very the of course,

on their still on, as not in First the as lender they real is They're sheet still they're lenders, degree of good estate balance good the are Republic. But count and and only it's the certainty as great brokers as intermediaries of were. can But but competition, they market. can like the not So deliveries they know great were. some they they're it's still count that mostly,

volatile increase get competitive so we And more that dicey as things more go forward. as advantage will and

Bill Carcache

unique to a clients loans are model it also other to them? them? new that incentive that bringing the you're of is bring you're for a what fair that over deposits loans the deposits them percentage could Maybe clients with sense is there extending perhaps also give with And over of part that extending as is to you of business

James Herbert

First When in ought and that, Mike friends you done, is pricing. And Mike to the something as Republic. are in getting environment. trouble when game their term with you But if thing. say complicated they of Roffler and direct It's clients is this you're things most The direct not is existing their simple. Selfridge having business long said, try This model pretty still, and referrals. win you as a unsteady. steady, are as up go do -- absolutely we our referrals probably Roffler relationship The know, both

Bill Carcache

Could what's on earlier about as Super And growth that both XX% a should with? are comments asking look on deposit speak the you But expect advances. XX%. growth this and investors FHLB funding whether to great. funded deposit your on of can your ahead, I growth helpful. were loan the That's happening loan quarter sequential some basis, line If up side, in your we roughly follow was we there? by remain year-over-year growth to

Michael Roffler

how the rise and And at growth, done. just look we've have unexpected, perspective, the back, funding if last as from funding, two reduce then maybe continue were phenomenal to deposit you I we absolutely a years So non-deposit even to and harken may that our said, through deposits considered continue and a less this the than model our this forecasting, not to support grown a less an It's and year, talked at and to have of industry than Federal into you just about pace rates be wealth were outstanding reiterate, that. day. it client may bit years. reason and grow. But every lending growth that, we'll in which new develop each it two, relationships, It with clients management, confident how loan service deepening is little the we investing have on the as see this last activities. ours if to for strong coming feel because lesser our And service on in grows past data, again, basis. we're relationships start through prepared we're it Reserve we continued growth allowed grow That or was the which just and in to full a us to be lending call, that

Bill Carcache

Jim. especially taking my thanks That context, helpful. for was for all And the questions. historical very you Thank

Operator

question from ahead. Manan Gosalia We'll Stanley. take go our Please with Morgan next

Manan Gosalia

Hey, good morning.

side. couple follow-ups growth Just quick from of loan the me a on

wanted on multifamily just I loans. to ask First

I seeing part a strong really that originations addition said of resi, well. as In strength underlying lot that of seasonality, there’s in multifamily well. you're as there growth some you but know to was

people is gain that rates? can So a in Or also share that there a story more getting fundamental little there? talk where coming from? you Is growth underlying bit ahead is some of more about

Michael Selfridge

Multifamily Selfridge. with not family. Mike the thanks, seasonal patterns going follow single is to precisely Manan,

time our opportunities. that's of rate more for the and from client. a business for clients, the So half that have Like comes look little from growth than the existing more that in been the of opportunity in model, folks a long

a I been class has general. in asset multifamily think solid

prices demand general but vacancies. lower in housing for pre-pandemic are increased, there's more have with above rents. levels, Rents As solid

it's opportunities been executed have I So think that our just spotted and investment clients on.

Manan Gosalia

a and And also coast. you've and How to to new mentioned some I of Okay. slowdown teams a Is lending you may this know year do expect then that 'XX that story? and separately, like in maybe you're at in you do Great. Florida story much stage? ramping more that up rates any investing rise? contribute that's see along growth half and urban areas offset the as mortgages markets in this XXXX Seattle second in Or you think

Michael Roffler

said. of colleagues serve individuals probably of it's the hired excited really more and what We're that with we've latter you Yes, group clients. to the

'XX, continue in to Beach and presence at. where mentioned But in specifically we're Seattle our of probably especially the You area and it's think expand we the in a Florida Palm I more greater 'XX. Seattle and have market the we thus about than a But in the get there the market contributor we've we as in the known big received clients already reception excited very we're far. in area,

Manan Gosalia

Great. Thanks so much.

Operator

Andrew from with go Piper Please question Sandler. next our take We'll ahead. Liesch

Andrew Liesch

Hi, good morning, everyone.

It the beta you're the margin Just is non-balance slow? seems the expect going serve I'm market? mortgage to just you just able lenders with the still opportunity better betas as the on an can I'm I thinking asset of on than maybe side? clients charge left more, question to the that in sheet But growth especially like to end that. it the you service, comments. Do also your high-quality front to the there's understand have high back range yield here, curious, deposit And the beat

Michael Roffler

the the step half for about XXs, as talked the a of could lending we're like and standpoint. mentioned quite Yes. And we That I accelerates, pleased that capital deposit little But over Mike will we they it's calls. remain back periods year. Maybe the first mentioned about from us, about mean, a remain for I competitive that's and the earlier, really all the that the bit. have, top sort we're stability also the of betas reflected at bit. range of a the margin said, I we of know talked low pop up low. yet. the not of time. marketplace where But Fed little consistency as just long Olga Selfridge half And in

we're I stability have margins, nicely would adjusting June or on exactly through are Fed operated has while have points hoped precisely we yields as efficiency we of asset would serve and if -- clients deeper XXX the the the because rates. about has that. relationships, stability we example, business the to and expected as consistently with continuing For point of and again, Fed raised, think raises how basis guess, And while

be And half end? the also It the to tame of aggressive so feels is we try to to in at inflation. going the a be. top they second But as be really here good Fed pretty pretty could spot year the like

wins model so be term the continue think long term. the And over stable steady and that over we the long to

Andrew Liesch

it. Got

just you that versus rate just mortgages? then you of or And helpful. the resi in XX- talked that on XX-year X.X% mix fixed about that can really That's Okay. talk ARMs about, loan yield

Michael Selfridge

my Casey to that single-family But Mike. XXs. say most the I'd of a our Xs of as head. -- [ph], off hybrids, don't be have I well tended Xs, volumes of top our have it's origination and majority historically

Andrew Liesch

it. Got

guess? I'm just like for Okay. are what's the or the or curious I case. XXs, for And Xs -- demand now that's it still what more demand right Xs

Michael Selfridge

now, mixes just right the on It generally. mean the probably the it say coming is would X depends I week-to-week. in best I client. really

So bespoke, but it's little Xs maybe XXs. a

Andrew Liesch

Thanks Okay, very for helpful. that.

Operator

Wells from Please next go with our Fargo. question Shaw ahead. take Jared We'll

Jared Shaw

Hi, good morning. Thanks.

the other Mike that I have appreciate on the more Do seen yields for questions. the yields you Selfridge, of the you've the the recently. update for few a on average origination up following Just quarter?

Michael Selfridge

I -- Jared. do, have I

that in X.XX%-ish, about For all X.XX% it, for real all estate, loans quarter. the range, call originations is for about

Jared Shaw

what single-family And residential? about

Michael Selfridge

is over a was and average little origination. residential X%, an Single-family this

Steve's of I As mentioned, with X-week average sort you gave earlier the the question. I

Jared Shaw

definitely. Yes, for interest-bearing? basis deposit And that rate, deposits? then that is the XX Or on Olga, is spot point total

Olga Tsokova

Jared. total Hi, deposits. is This

Jared Shaw

with Slide sensitive some XX and then, of move, the we may When deck we that March which assume liability should the recent that, rate Okay. based And moves XX, that I Thanks. shift guess I the at asset sensitivity, on just going look for to the given guess, finally. on forward? expectation is

Michael Roffler

we've sensitive, slightly is asset that based it's which consistently been. view Not where preliminary our is still

Jared Shaw

you. thank Okay,

Operator

McGratty our next go is take We'll from ahead. question KBW. Chris Please with

Christopher McGratty

Great. Thanks.

to the loan Last XXX% back cycle, to around deposit. were going Just funding. Mike, you

today. the given today? of balance drift XX% to that level size What's comfort let the sheet the You're

Michael Roffler

liquidity We're XX%s given XXX%. in been, profile, XX% in we coming funding Obviously, our we're we've high in sources our that XX%, operated again. to operate the of And like the range and where very comfortable. and we've could feel strength we

Christopher McGratty

line, Okay. The seasonality BOLI there's couple line And run just of wondering was that then a some there. anything fair up. of then ones. kind there? if know popped I'm the brokerage Wondering rate. And unusual I Thanks. quick a

Robert Thornton

volatility, don't brokerage we think anything quite I see a market there's of unusual. more trading Whenever to tend bit there's activity.

So consistent I in markets. think past that's volatile we've with seen what

Olga Tsokova

income the the Chris, side, the mark-to-market. we life at by impacted on from BOLI certain contracts contracts, And look if insurance -- it's impacted

remind we've costs volatility related decline driven reduction corresponding during to seen market a quarter, second this to by a in you, mark-to-market. just And income is the With there the that from those benefit offsetting was contracts.

give $XX remove XXXX So -- compares you'll rate mark-to-market And volatility the negative see you side $X the an component, which run of offset statement. contracts to for insurance our about line. this second life the quarter. you be On if impact last was around to quarter, income other example. will if the you the line remove I'll market of And million, about on million

Christopher McGratty

Great, you. thank

Operator

We'll Foran question from with next go ahead. take Autonomous. Brian Please our

Brian Foran

Are any question, think always it key But I allowance to you're best-in-class where over of shown assumption recession? drives the preface and kind you some that and embedded much I is to gauge a can know Maybe over price again, us I us helping assuming and give there's just probability you've morning. the flavor, it, and credit. already of on cycle on good is your Hey, mean, today, just -- declines it's going in how pristine that you home a already be of flavor base of one on the allowance? no Just but the big case any in assumptions? process

Olga Tsokova

for more And charge-offs were our of standing points that reserved the -- were of assumptions and reserve credit the at of we requirement. record. example, our Hi, loans losses million. loan just the didn't million, loan terms allowance remind lower you, them quarter from in sure. single-family not The use And mix. basis And the given $X.X were Yes, the feel track at on we family. And to about change Brian. single was did end. in $XX level scenarios for at is we appropriate XX if if for our scenarios. it's scenarios, assumptions, think this much. And during change dependent provisioning quarter our than to we you quarter, previous And the Moody's compare growth coming the And we XX%

from slightly last better little we a used got they time fact, In them.

in by say would provision the our growth driven book. I the was So loan solid

Michael Roffler

mean if years, our X the the one into I points. over Brian, could just performance take back levels account I stand maybe, things basis historical is for cumulative losses bank. are XX reserve a of the the And And of that minute.

projected you and at And real to in loan losses a are decline secured not loss. still also so when modest. in values, look projected layer Moody's at there's scenario XX% XX%, has that home on XX% value, history XX% estate loan pretty Even look cumulative you when to at and at a basis price you're a lot of a it, when XX% to

safety way you And so And there how we do at all times. I we and for speaks about that the being long-term think how cycles and clients the is and environments. credit safe it to think in stability underwrite all be to all of

Brian Foran

Is a then greater strong who it those coming comes of instances at turns production And deposits loans that Does too of to turmoil some What you over any line little of through a wealth? market more sizing customers to lag this about a there uncertainty. period percentage over Or time great someone broadly where the more broker brokers? bit cross-selling I'm follow-up through of happen sure there bank. a as and you same referred coming job is word, directly? do or give? are you brokers that. turmoil a of Got of the into is you it. maybe hadn't thought And certain really but in point can periods of I one some amidst

James Herbert

Jim. It's

I Let to because me that comment. respond that made

a I'm that refer all who their First sale on clients talking do because not lending. we're But bank direct let more reliable, We me business It's more direct business brokered is who do of estate to clear. are home of predictable. brokers that loan The as a find all, about real mortgage. share picks be business. extremely a up lender.

Brian Foran

Got it.

Okay.

some who's with guys because the through real starts estate is So a house to it's other coming a different just broker sure This gets lenders deals fall is you main focus making and thing. seeing sold. their

James Herbert

course, ever of great because long us first before. that they it the be for time period. value a And tried exactly. has And Yes, term the in may repetitively long they're business

So it's actually attractive. very

Michael Selfridge

cross in your question. a And relationship-based Brian, I'll selling? address Jim there just Is pricing. second lag mentioned

So client we There's from discover once. growth the with relationship. wealth starts here, won't their We management once at that's relationship, what more trial. or get and and a who banking more saying the service they why everything to the existing And a rate all often get just comes experiencing want of the likes they're us. half and consolidate

lag. that I So call a would that

Brian Foran

you. Thank it. Appreciate

Operator

America. Please with Bank of Poonawala Ebrahim from question ahead. next our take we'll go And

Ebrahim Poonawala

just final think deposit around morning. I Good had for you one and think we bunch a as around, I margin, about outlook had question questions such. of the the betas

let's funding originations X.XX struggle is a compression X Fed margin. think we Mike, Olga, risk the given quickly single-family the that are moving it, around pretty sharp I the assume to in coming call if is how implies costs, around,

concern margin reasonable is are compression? deposits the about your to XXXX we relationship when think the So And in materially a coming when think we pricing? think would about on, deposits terms the book back relative you about that of one, as -- guess, risk costs I the of second, different on

Michael Roffler

think sheet, things the I about It's had of periods right? repayments interest new how long I that which modest. portion combine stability repricing loan where because, and talked they're and floating keep gives where do you of On money talks -- market, are been growth, billion, no deposits current the rate us move -- very assets from the and future your to and you from costs, than about this looks consistency it's about see the That's some would with in but you we be it the here checking that net relationships And protection growing and pricing a right? offset of again, I'd margin It's never from part having that, yields question, over long the Mike of about, second right, built, back funding time, in $XX you And our stand of the portfolio. leads serve whole say continue wouldn't bring relationships portfolio. as leads that's loan over are all page talked of clients a the And rise in half deposits don't new billion it a reprice the growth to the about be being periods modest. our earlier, stable loan been of year. highlight some of a balance that's also to loan we're and be portfolio. typically, then And noninterest-bearing consistent investor our to so which coming a portion When focus, in historical I growing there's a greater second Fed may that not relationship in the fast has really deck portfolio, and resiliency in willing that relationship-based about expand if to keep also of the I Selfridge $XX income. time. I'd

Ebrahim Poonawala

And on just quick Got follow-up the it. share market one opportunity.

you've into? does go talked opportunities of that incrementally feels hot kind are banks heading It big I in we the cold. to they're think, given I'm from cooler. about environment better past, the the just create macro like getting Jim, wondering, that

James Herbert

most does. is the we're share in. very that it still of small we're But of although thing the to of proud the know in Generally, the markets yes, success we're a market bank, remember we

So perfectly for that challenging, to us be a of frank. share to is take bit not

Ebrahim Poonawala

for taking questions. my Got it. Thanks

Operator

ahead. comes The Please Jon Arfstrom RBC. next with from question go

Jon Arfstrom

letting in for me here. thanks Hey,

pricing month, kind Selfridge, XXX? Just pricing prime or make just to I'll by if as can loan hold Do or yields, continues the So do think mentioned competitive it is at XXX get we XX Or XX the react call of Mike lending, too XXX. quick. to that to capital or of make the that XX rise? you you expect it that this linear? on you minus end prime

Michael Selfridge

range you it's players in range comfortable I And more I gave of very feel key the in think I that of you. business, the the some as It's couple there's, think know, upside. the benefit I But latter. we'll a competitive. -- and get to

benefit not think just I bit due we'll of beta, up, goes that. some think but prime to we'll terms XXX% Maybe As loan a competition. from get But in of ceiling upside. a there's I

Jon Arfstrom

Yes.

just of then fixed half a repricing about And one in Can you portion talk the a repricing your you and fixed of slide show then your half quick of year in time hybrid. have little time just frames about and In Okay. or deck, one. on some frame less loans hybrid that another bit the book?

Michael Roffler

Yes.

hybrids fixed it's of is historical over of a the built those of repay time. So a is much way period that on how slide and perspective

balance over loan shows sheet had new done. portfolio the client As you as we of to growing, as and a good repricing a rates in are see, It's time. not time, year are in over it. it And has if a on rate getting of because our at a plus you market growth a stand-alone that's period, typically, that's quarter. a the fixed to right? portion is But dynamic deals four so new hybrid base business nature of sort bit been built six to really, our And look just of it that it's what's it's power quite sort were floating rising, into prepay those And the of at basis. and only of what it's

over any perspective to offsetting us reprice And is time, serving rates so or very again, clients now. well the Fed that funding long-term right allows of which

Jon Arfstrom

Okay. All for right. Thank that. you

Operator

take We'll Please ahead. our question next from Coffey Janney. with Tim go

Timothy Coffey

Great, morning, Good everybody. you. thank

selective? or that we're otherwise standards have that in seeing estate, the become Given on increased your in area, especially the underwriting real weakness more office Francisco product San Bay commercial you

Michael Selfridge

say at We've actually last and six with but the $X than in experienced in X% loan-to-value been over deals, origination, we've in high cautious always business. occupancy. median few large rises We're you're on loan CRE even the years, typically We're coverage million less more probably last of service selective. not sort reading certainly I operators. headlines -- months, been that size, the would small with net recourse more

Timothy Coffey

Okay.

vacancy much market the So rate Francisco of San in general that's the really think of to an don't going impact? XX%, you have

Michael Selfridge

think so we do, for no. don't I what

And in I what been being very many typically, purchase. think they in business the cycles. are for selective people they've

it and know So they what work. to they're know doing, make they how

Timothy Coffey

it Okay. is the on include there stock Or And stocks? restricted could just then liquid lending, the highly secured stocks? collateral

Michael Roffler

highly stocks. only liquid It's

Timothy Coffey

questions. All right. time. my were I you. Those appreciate Thank the

Operator

question We'll go with ahead. Chiaverini next take our Wedbush. David Please from

David Chiaverini

do the expect of was Hi, level would impressive existing to I level where was going to go on refi what's in thought refi I then XX% new high it forward? for at see the you that curious, clients versus mix the follow-up the a SFR refi be, XX%. thanks. quarter of such side? And

Michael Selfridge

refi bank's would refi as being more majority characterize the another I Dave, just clients. than --

see of And rates. Republic. historically drop said over clients We coming given long in refi below that headwinds it run I could rising we've the the hasn't below with XX%, mix external XX%. down to know So terms drifted First

Michael Roffler

add I'd a second. on Dave, maybe just

things are testament our day. we're the every colleagues each and doing and a service about is model and of to One business serving our refi clients that the

and the colleagues of do nobody phone under at the in up now on other that clients so Republic. a opportunity banks job service important strong, of all -- for right that clients think see frequently, in desk the They periods at service at pick to our great real is direct the delivery wonderful environment. I times, of result are right? as in testament of hides you a Jim, is extremely in those as don't As how we with referrals and it's First especially make mentioned, results. engage focus coming very a Mike and service phone calls where any Mike isn't volatility. And Being from to that we clients and mentioned, because there great, provide this clients And their period have colleagues maybe the they

David Chiaverini

much. helpful. Very Thanks very

Operator

We'll Alexopoulos take Steven with from question our ahead. Please next JPMorgan. go

Steven Alexopoulos

on like the focused assessment everyone. follow a I to the has you've what's are know not emphasized the of you call past And uncertainty what Jim, one today? you're Thanks. ahead? theme I XX again, and of to big you quite the all executives economist, the for follow-up the Thanks most said, a want few lies view few over but longest-standing The cycles of out safety in the an of today, what Hi, And and times ask with been you are up. industry. taking risk a stability from a your on seen years. there, picture Jim.

James Herbert

Steve. and But actually the were 'XXs attractive. it out period lived years, money. the of rest of maybe following one have bank I'm not in education, of pretty Thanks, normal of the brutal. an through we're I August seeing scars play I'm they this other hand, cycle quite were to worked better the excessively started not in Well, a cheap are kind the but long before economist, recessions, but rapid I XXXX the sure which. think but an and ROFR out than [ph] somewhat on But tightening two

think the not seeing has down. are prices down, solution, watching I to coming So is the we're stabilize begin you're beginning of what some some come

You're Valley letting back back, the and not watching go, stopping the If in people pull particularly pull unemployment. their certainly they're tech hiring.

a And so they're likely do up. catch Fed normal quickly. play it's pretty so has to process. behind and The to They're

a think I two I took to to And But is up, and and not is So kind, that the inflation be the resolved. that excesses. probably faster stabilize and I'm that got important some recession threatening likely challenge, of is I it us. Volcker of not. ahead but overly it thing fine. will naive, not lot that's be predicting rates it. because The really don't We're moved I'm it's so it coming he recessions of obviously that will did The to think it will quicker go you're there. the a see the get boldly think

or my personal required So be of would get in I inning we're second to inflation fairly control. to we're going just what's think under the That opinion. be third -- maybe

Steven Alexopoulos

much. Okay. Thanks so

Operator

session. or to Roffler question-and-answer conference the this time, back Mike today's turn additional I concludes That At will any for closing remarks.

Michael Roffler

we our forward and service clients excellent to for to our Thank I'd thank continued say just look for today, like model excited about future. the are and call delivery you the and joining you.

Operator

This your you participation. for Thank today's call. concludes

You may now disconnect.

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