Webster Financial Corp (WBS) 2004 Q2 法說會逐字稿

Good day, ladies and gentlemen and welcome to the Webster Financial Corporation second quarter earnings conference call.

At this time, all participants are in a listen-only mode.

Later, we will conduct a question and answer session and instructions will follow at that time.

If anyone should require assistance during the call, please press the star followed by 0 on your touch-tone telephone.

As a reminder, ladies and gentlemen, this conference call is being recorded.

Also, this presentation includes forward-looking statements within the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 with respect to Webster's financial condition, results of operation and business and financial performance.

Webster has based these forward-looking statements on current expectations and projections about future events.

These forward-looking statements are subject to risk, uncertainties and assumptions as described in Webster Financial's public filing with the Securities and Exchange Commission, which could cause future results to differ materially from historical performance or future expectations.

I would now like to introduce your host for today's call, Mr. James C. Smith, Chairman and CEO.

Please go ahead, sir.

Thank you and good afternoon everyone and welcome to Webster’s second quarter investor call and webcast.

Joining me today are Bill Bromage, our President; our Chief Financial Officer, Bill Healy and Terry Mangan, Investor Relations.

Other members of the Webster team are here, as well, to respond to your questions after our formal remarks, which we anticipate will last about 20 minutes.

As you've seen in our earnings release, second quarter net income improved 13% year-over-year, while earnings per diluted share increased 3%.

The mid quarter acquisition of First Fed contributed to asset, loan and deposit growth as well as to net income.

Return on average tangible equity improved over 22% in the quarter compared to 20.7% a year ago.

While cash return on average tangible equity was over 24% compared to 22.5% a year ago.

Completion of the First Fed acquisition and our charter conversion are two of the particularly noteworthy aspects of the second quarter.

Other noteworthy aspects include continuing double-digit organic growth in loans and deposits, exceptional asset quality, ongoing progress in our efforts to closely manage expenses as reflected in our improved efficiency ratio and a significant improvement in our balance sheet structure.

We continue to make progress in pursuit of our strategic plan and our vision to be the leading, regional financial services provider.

In looking at the quarter, our loan portfolio has grown by about $2.6 billion or 30% over the past year and by about $1.8 billion or 18% during the quarter and now totals $11.3 billion.

First Fed added $1.5 billion of this amount with no change whatsoever to our overall loan mix.

Commercial loans now total over $4 billion.

Year-over-year loan growth of 12% apart from First Fed has been virtually all organic.

We've seen growth in every loan category with particular strength in commercial, including commercial real estate and consumer loans.

In our commercial middle market effort in Connecticut, we are gaining meaningful market share by successfully delivering the full compliment of Webster products and services to our clients.

Total deposits grew by almost $2.3 billion or 28% over the past year and by 20% during the quarter.

Deposit growth apart from First Fed was robust at 10%, virtually all of it organic.

In fact, on a linked quarter basis, organic deposit growth exceeded loan growth for the first time in recent memory.

This positive development reflects the success of our high-performance checking products for consumers and small businesses and our de novo branching in Fairfield County and more recently Westchester County in New York.

Total revenues, excluding security gains, the effect of FIN 46-R and the sale of Duff & Phelps grew by about 16% year-over-year.

Spread revenue grew by 16% primarily on the basis of our double-digit organic loan growth and the First Fed acquisition and fee-based revenue also grew by 16%.

Mortgage-related income volatility continued to pressure the net interest margin during the quarter to about the same degree as in recent quarters.

And a bit more than we had expected at the time of our last earnings call.

We anticipate some abatement of these pressures given our expectations for interest rate levels in the months ahead.

To neutralize the impact as we did in the first quarter, we took securities gains, primarily on the sale of mortgage-backed securities.

We've told you how we are committed to expense control as an essential ingredient to shareholder value creation.

Our revenue growth adjusted for securities gains, FIN 46 R, First Fed and Duff & Phelps was 8% year over year, outpacing expense growth of 6%, which resulted in an improvement in our efficiency ratio of more than 2 points year over year.

Webster's asset quality is strong.

Our non-performing assets have declined by 16% from a year ago, even including First Fed and now represent less than .3% of assets compared to nearly .4% a year ago.

In turn, our coverage ratios are strong, as well, with non-performing loan coverage of over 330%.

Credit quality has been and remains among our most critical success factors.

Of particular note is our deleveraging activity during the quarter, through the sale of the bulk of First Fed securities portfolio.

As a result, our securities portfolio now represents 24% of total assets at June 30, compared to over 30% a year ago and 29% at March 31.

Borrowed funds were 26% of assets at June 30, compared to 32% a year ago and 30% in March 31.

The bottom line is that we have grown our assets by 18% in the last year while our wholesale borrowings have actually declined slightly, consistent with our off-stated goals.

Now let me ask Bill Healy to present the financial report.

Thank you, Jim and good afternoon to all of you joining us today.

Webster's second quarter performance, once again, fits within the context of our strategic plan to grow loans, deposits, revenue and earnings while transforming the balance sheet and maintaining a disciplined approach to credit, enterprise risk and expenses.

Key trends in our performance for the quarter include: ongoing strength in our organic loan and deposit growth, growth in our core fee categories of deposit services, loan and servicing and wealth management, continued strength in overall asset quality measures and an annualized charge off ratio of only 8 basis points in the quarter.

With the completion of the First Fed acquisition, we assimilated about $1.5 billion of their loans and deposits.

At the same time, we completed the deleveraging of $750 million of First Fed's security portfolio, using the proceeds to reduce our short-term borrowings.

During the quarter, the continued low interest rate environment impacted our asset yields and contributed to a 7 basis point link quarter decline in our net interest margin.

In total, the above items contributed to net income during the quarter of 45.8 million or diluted earnings per share of 91 cents, an increase of 3% over year ago.

Since Jim in his comments talked about our year-over-year comparisons I will focus my comments for the most part on our link quarter performance.

I also will identify for you elements that relate to our mid-quarter acquisition of First Fed and the first quarter sale of Duff & Phelps.

Total revenues excluding security gains were 164.9 million in the second quarter.

This compares to 155 million in the first quarter, a 6% increase.

On the link quarter, non-interest income, excluding security gains, grew by 5%.

Excluding First Fed and Duff & Phelps, the growth was 6%.

Growth in our core fee categories of deposit services, loan and servicing and wealth management, helped to offset the loss of Duff & Phelps revenues.

Deposit fees increased 12% reflecting a pickup from the first quarter seasonal weakness.

The majority came from NSF fees, ATM fees and check card interchange income.

First Fed contributed about $500,000 to the growth.

Wealth management and advisory revenue grew by over 700,000 or 14%.

This performance followed an equally strong first quarter and reflects the strength of business activity at our retail broker dealer sales unit, payoff of several marketing campaigns and our Fairfield County business development efforts starting to show benefit from our investment there over the last two years.

Loan and servicing fees were up about 10%, about half of this was First Fed.

The majority of the balance represents recapture of mortgage servicing write-down.

There was a $1 million seasonal decline in our insurance revenues.

Continued commission payments in the first quarter generally cause it to be the strongest quarter of the year.

Net interest income totaled 113.5 million in the quarter and grew by almost 7.7 million or 7%.

This increase is mainly due to the First Fed acquisition.

In addition, core loan growth of 9% helped offset the effect of the 7 basis point decline in a net interest margin, which was 3.02% for the quarter.

Approximately 3 basis points of the decline results from the addition of First Fed's lower net interest margin.

The balance of 4 points reflects the effects of the continued low interest rate environment, which resulted in new volumes and maturities of assets being reinvested at lower yields.

Also contributing to the decline were higher mortgage-related asset premium amortization and FAS 91 expense write-off from early prepayments in the quarter.

As Jim indicated, we have seen some abatement in this late in the quarter as rates began to rise.

We expect for the interest margin to remain -- excuse me, we expect the net interest margin to improve over the balance of the year and end the year in the mid-three teens.

Excluding First Fed, link quarter expenses increased by almost 3% and when you adjust for the one time 590,000 of severance costs and 265,000 in First Fed acquisition expenses, the increase is less than 2%.

Credit quality remains strong.

The increase in MPAs related entirely to First Fed and our combined measures of asset quality are virtually unchanged from the first quarter.

Net charge-offs totaled 2.2 million in the quarter for an annualized ratio of 8 basis points.

The provision was 5 million and the ratio of the allowance to total loans remained strong at 1.30%, the same level as March 31.

Turning to a review of Webster's balance sheet, total assets at June 30th were 17 billion.

Growth of 18% compared to a year ago and 13% from March 31st.

And what makes it even better is the growth was funded with no increase in short-term borrowings.

Webster has posted strong double-digit loan growth over the past year, virtually all of which is organic.

Excluding First Fed's loans, which totaled 1.5 billion, year-over-year loan growth was 12% and on a linked quarter was 9%.

The growth comes from all categories.

Looking at the linked quarter and excluding First Fed, commercial loans were up 60 million or 2.5%, strong growth was recorded in our middle market portfolio as well as in equipment finance and asset-based lending.

Commercial real estate loans grew 83 million or 6%.

Our credit quality in this 1.6 billion portfolio, which has grown by 20% over the past year, remains very solid.

Consumer loans increased 112 million or 5%.

As I noted in the call last quarter, the pickup in originations that we saw late in the month of March, as first mortgage rates began to rise, made home equity loans again more attractive relative to fixed rate conventional mortgages.

Residential loans decreased $30 million during the quarter and as I indicated last quarter, we would intend to hold this portfolio flat or manage it down over the year as commercial and consumer loan demand materializes.

On the liability side of the balance sheet, excluding First Fed, deposits grew 28% from a year ago and 11% from March 31.

All of the 230 million of growth during the quarter came in core deposits, which consists of checking, money market and savings accounts.

Let me comment on our investment portfolio for you.

Securities portfolio totaled 4.1 billion at June 30th, down almost 300 million or 7% from March 31st.

After the deleveraging, the portfolio now represents 24% of total assets.

For comparison, securities represented 20% of total assets at March 31st for the mid cap commercial bank peer group that we measure our progress and performance against.

We continue to position the portfolio to benefit from rising rates and concentrate our efforts on purchasing short duration securities like hybrid ARMS and CMOs that will have minimal extension risk as interest rates begin to rise.

The average duration of the portfolio was 3 years.

We have actively worked to reduce premium risk.

At June 30th, we had approximately 11 million compared to over 40 million a year ago.

The portfolio yielded 4.11% during the quarter, down from 4.22% in the first quarter.

Unrealized losses at June 30th were 60 million.

Overall, our interest rates sensitivity remains about neutral, same as we discussed in our investor day presentation.

An up 100 basis point scenario, we would reduce our net interest income 0.4% or reduce the margin by 2 basis points.

An up 200 basis point scenario, we would reduce net interest income 0.7% or reduce the margins some 4 basis points.

Now let me turn the program back to Jim for his closing remarks.

Thank you, Bill.

We thoroughly enjoyed being with so many of you last month at our investor day presentation.

Consistent with our belief that the better you know us the more confidence you will have in our ability to achieve our ambitious goals.

I hope we demonstrated to the participants that we have the right management team in place to do just that.

The successful completion of our commercial bank transformation has begun to wear away the remaining price earnings discount gap that exists between Webster and the mid-cap commercial banks to which we compare ourselves.

We know that Webster lags this peer group in certain key performance metrics.

We focused on those metrics and you can expect to hear from us regularly about our progress.

One concrete example of that progress is the significant reduction in our securities portfolio and wholesale borrowings as a percent of assets in the second quarter.

Webster now competes as the largest independent bank headquartered in Southern New England.

Our brand of banking has gained us significant market share and relevance in Connecticut in a relatively short period of time.

First Fed brings us to new markets and creates new growth opportunities.

We fully expect to achieve the same high growth in the First Fed franchise as we have in Connecticut, guided by our strategic plan to grow loans and deposits faster than the market, to increase income from fee-based services, to maintain a disciplined approach to credit and expense management and to broaden and deepen our product lines and our geography through strategic initiatives including mergers and acquisitions.

Thank you for your interest in Webster.

We now would be pleased to respond to your questions.

Ladies and gentlemen, if you wish to ask a question, press star followed by 1 on your touch-tone phone.

If your question has been answered or you wish to withdraw your question, press star followed by 2.

Again, ladies and gentlemen, it is star followed by 1 to ask your question.

Please allow a minute while we queue up our first question.

Our first question is from Laura Hunsicker with FBR.

Please go ahead.

Yeah, hi.

Good afternoon.

Hi, Laurie.

Just wondered if you could take us through a couple of things.

First of all your margins, you said that should track in the mid-teens by the end of the year.

What exactly is your assumption for interest rates?

It should end the year, Laurie, in the mid-three teens.

Our assumption right now is that we'll see about a 25-basis point increase in -- in Fed funds, in each of the next 3 open market committee meetings and we're anticipating the year ending at around 2%.

Okay.

Perfect.

And then in terms of -- I just wanted to make sure I got this right, the net unrealized losses, the other comprehensive income that was negative 60 million?

It was negative $60 million on the portfolio, so it's tax affected, you know, amount would flow through to comprehensive income.

Got it.

So, that's about maybe 35, $36 million.

Okay.

Okay.

Okay.

And then with respect to share buybacks, I know you all finally have an open window now.

Can you give some comments?

I think there are about 2.8 million shares remaining in your current authorization.

How would we see you use that?

It is a possibility, Laurie.

This is Jim speaking.

I know we talk about this each quarter.

Our -- our current objective is we want to balance the attractiveness of our shares and our repurchase program against our tangible capital levels and an overriding objective is to make sure we get our tangible capital up to 5%.

So, in the context of higher tangible capital, we will continue to consider the buyback.

Okay.

And then one last thing, going back to asset quality, you said the increases in non-performers are related to FAB?

I wonder, the differential and breakdown here, it looks like your CNI was up link quarter 4 million.

The commercial real estate, it does look like that related since commercial real estate at FAB they had 7.5 commercial real estate non-performers.

But can you comment on that 4 million increase in CNI?

And also specifically within Schnick, you went from 5 to 0.

I guess that's pure Webster without FAB?

With what's going on with those portfolio's.

And then also just maybe some color on FAB's commercial real estate non-performers, what is it?

You know, how big are they?

That type of thing.

Joe Keeler, are you alive?

Yes, I'd be happy to, Laurie.

Hi, Joe.

First let me address the specialized.

We had a single non-performing credit in the specialized portfolio that emerged from bankruptcy -- or excuse me, has not emerged from bankruptcy, but we believed that the time was right, we didn't want to continue on with the relationship and we sold that loan in the secondary market for a nominal gain.

So, the -- the delta you see there in the asset number is the sale of that one non-performing loan.

Okay.

Was that Safety Clean or was Safety Clean already gone?

Laurie, we can't comment on who our customers are, but suffice it to say that it had been a long-term non-performer as a result of a -- of a Chapter 11 filing a couple of years ago.

Okay.

As to the commercial real estate delta that you see there that is as -- as -- as we've said and you've observed, all First Fed-related.

Specifically, just short of $6 million of the increase in the commercial real estate, non-performers was a single investor-owned Cree property in suburban Boston, it's an office building.

It was marked down significantly, prior to the merger and we, at this time, don't believe there's any further loss in that credit and we're actively managing it.

Okay.

And then what about just the -- the other -- the straight CNI that went from 12 to 16 million linked quarter?

Again, that's associated with the First Fed acquisition and it's a number of small business credits that we picked up along with a couple of very modest increases in the Webster portfolio.

But in the aggregate it's a number -- as we would have expected to see in a portfolio that size, it's a number of very small -- small business and lower and middle market credits, there's no concentration in that number at all.

Okay.

Because if that's all FAB, it looks like they had about a million of commercial non-performers, a burst of that increase?

That's correct.

And then there were just about 3 million at Webster --

3 million at Webster.

Which, basically, is a small business.

Okay.

And those are just normal --

Yeah, just normal -- you know, the levels are -- a couple of million moves the needle at our bank, unfortunately.

They are just in the ordinary course, small business.

Okay.

Certainly all have excellent asset quality.

Thanks, Joe, thanks, Jim.

Thanks, Laurie.

The next question is from Thomas Doheny with Sandler O'Neill.

Please go ahead.

Good afternoon guys.

Just a few things on the expense side, if you could, you know, remind us of where you are in First Fed in terms of expensive, maybe, you know, what the net effect there was this quarter and what we might see in run rate in terms of taking fences out going forward?

And then maybe any detail on, I know you mentioned expenses from de novo in the press release and what kind of effect that may have had in expenses in the quarter?

Sure, Tom.

You know, we're pretty much, you know, with First Fed, you know, we had anticipated a 25% savings in core saves.

We've probably got about half of that right now, some of that would be accomplished when we -- the balance, when we do the conversion next year.

And the rest of that really took place before the merger, as a result of, you know, slow down in business in the fourth quarter and early in the first quarter.

A lot of action was taken by First Fed to reduce their expenses.

So, where we stand and where we think we'll wind up when we do the conversion will be at a run rate where we thought we would be.

If you take a look at our expenses going forward and factor in a full quarter for First Fed and obviously with Duff & Phelps out of there, I think, you know, you're looking at, you know, a little over $100 million in our run rate.

Right.

And then on the de novo, as well?

Could you estimate -- it did have a significantly larger impact this quarter than previous?

No, not really.

When you look at the increases in things like occupancy and equipment, you know, we're looking at, you know, 100, $200,000 increases.

Some of that is de novo and some of that is our new facility that we opened up in New Britain.

And you mentioned the impact of premium amortization on the margin this quarter.

Could you maybe detail how much was in there this quarter maybe versus last?

Sure, I think Jim in his comments last quarter talked about it being a little over 3 million.

It's slightly higher than that.

Great, thanks a lot.

Thank you, Tom.

Just a quick comment on the -- your comment about the expenses related to de novo.

I appreciate you mentioning that.

Of course, that is in the expense base and the payoff is down the line on those de novo offices.

Also, Bill's reference to the slow down in business meant particularly the mortgage business and in the end we elected not to convert and I know we've talked about this before, the First Fed systems until we had moved forward with our own infrastructure upgrade, which we expect to occur in Q2 of '05.

The next question we have is from Kevin Timmons with CL King.

Please go ahead.

Thank you, guys.

Some of mine were answered.

Some are just kind of housekeeping things.

There is a question about the furniture and equipment expense.

The roughly -- just under $9 million in Q4, that's pretty much where it's going to be?

Is that a decent run rate?

Because it was up about $1.3 million from March quarter.

That was a little bit more increase than I thought.

Well, part of that, Kevin, was First Fed.

The increase in equipment was up about 1,450 million -- 850 of that was First Fed. 300,000 of the remainder was service contracts and another 300 was really, you know, cost of, you know, new equipment and furniture, you know, which relates across the system, including our de novos.

So, the $9 million is a good run rate to use, roughly?

Yeah, I'd say so.

Well, don't forget you've got to annualize the First Fed, that's only a month and a half.

Right.

So, add another 425,000 onto that.

Okay.

You mentioned recapture of MSR evaluation, didn't say what the amount was.

Can you tell us the amount?

Sure, it was about 200,000.

Okay.

Not much.

The wholesale versus retail spread analysis that you guys do, which is always nice to see, the looking forward with your expectation of another 75 basis point increase in the Fed funds rate, your positioning on the funding for the wholesale portfolio, how much spread do you see coming out of that part of the balance sheet?

This is Jim, I will just comment that most of the improvement in the spread will come from the retail spread, which you saw declined to the lowest it's been actually in many quarters to 3.7%.

So, we would expect to get some positive impact, particularly on the retail spread as short rates start to rise.

We don't expect to get expansion, of course, in the wholesale spread.

I expected retail would be picking up, but on the wholesale side specifically, I don't expect it to pick up.

I expect to see contraction there, get 75 basis point increase in rates.

Yes, we agree.

We agree.

Because the 75 basis points, we don't think, will be a parallel shift.

Okay.

And finally, if you could generally say whether the Bank of America Fleet situation, whether you see anything happening that affects you this morning?

We've been consistent in our comments there to the extent that there’s disaffection in the market, increased churn that we'll be well positioned to pick up more than our fair share of that churn.

I think we ought to take hats off to Bank of America and Fleet for the extraordinarily good job they have done thus far in making the transition.

I know there are other challenges ahead but they've done a good job.

We have seen a pickup in our own growth rate as we've described here over the last year or so.

We think it's more because we're doing a good job of taking advantage of the opportunities in the market than it is that we're benefiting from any particular competitor at this point.

And therefore, we believe that our growth is sustainable.

Very good, Jim, thank you.

Next question is from Jim Ackor with RBC Capital Markets.

Please go ahead.

Good afternoon, guys.

I was wondering, Jim, if you might be able to comment a little bit more broadly on tangible capital, about, I guess, 4.5% relative to total assets and you mentioned sort of the 5% bogey that you're shooting for over the near-term.

Is that sort of the magic number, or would you prefer to see it a little higher?

Would the 4.5% constrain any of your growth opportunities particularly from an acquisition perspective on the go-forward basis in your opinion?

Good question, Jim.

I'll say that ideally over time the tangible ratio would rise to more than 5%, probably ideally and given our profile, in the 5.5% range.

We do bear that in mind when we're looking at acquisition opportunities and what kind of currency to try to use in that process.

We don't see ourselves being constrained at this point.

And our own projections show that we will earn into a significantly higher tangible ratio over a relatively short period of time.

Okay, fair enough.

And then, Bill, maybe if you could just kind of a house cleaning issue, tangible book value per share at $15.02.

Can you give me the two numbers that you guys are using to calculate that number?

Jim, I can follow up with you on that.

We have some tax affecting -- Bill, do you have the answer?

No, I don't have it with me.

Okay, I will follow up later on, Terry.

Thanks, you guys.

Thank you.

The next question is from Billy McCrystal with McConnell, Budd and Romano.

Please go ahead.

Good afternoon.

I wonder if you could give a sense, you can do it whether on the commercial portfolio or the total loan portfolio, what percentage of that is floating with prime?

And then as another point, of that, how much is -- how much of that is at a floor that wouldn't float for maybe one or two more increases?

Bill, some rough numbers on that, our total loan portfolio and what I have may be dated a couple of months ago.

About 27% of it is floating.

About 21% of it reprices periodically, which would be in maybe a three-month period and 51% of it is fixed.

And as far as floors -- is that an issue for you guys?

Do you have a significant amount that floats that is at a floor that wouldn’t --

Not that I'm aware of and I don't think at this point that we're worried about the floors.

Okay.

That's it.

Thanks.

Okay, the next question is from Jared Shaw with KBW.

Please go ahead.

Good afternoon.

Just a follow-up question or a final question.

You said you're looking for a continued decline in the security portfolio?

Do you have a target for what you would like securities to be as a percentage of total assets?

Yeah, actually we do.

Right now we're at 24% of assets.

I wouldn't say relatively speaking, we expect further declines from here on the securities portfolio, though it could happen depending on the growth rate of the loans.

But our actual target is somewhere between 24 and 27% of assets.

Great.

Thank you.

I think what we've said or what I said, Jared, maybe this is what you're pertaining to is that we would see continued decline in our mortgage portfolio.

The next question is from Matthew Kelly with Moors & Cabot.

Please go ahead.

Hi, guys.

Two questions.

First, what was the period end that interest margin?

We don't disclose that, Matt, it is 3.02% for the quarter.

Okay.

And then the gain on sale of loans, the 5.3 million, I wondered if you could give us a breakdown, you know, which piece was the shared national credit sale, which piece was FAB and Webster the kind of remainder?

And a little bit of an outlook on the FAB mortgage gain on sale, kind of origination pipeline and expectations there?

Okay.

Of the $5.3 million, almost all of that was our secondary marketing gains.

As Jim said, the -- I think as Joe said in his comments, the gain on this indicating credit was fairly small in relation to that.

Yes, and of the total of the 5.3, I think approximately 2.8 of that was gains from PMC.

Okay.

And can you give us any pipeline data?

I mean just as we start to model that out?

I mean what do we expect to see trends similar to the Mortgage Banker’s Association expectations?

Yeah, it's Bill Bromage.

I'm not -- I can't give you specific answers on the phone about the pipeline data, I can tell you that we trend our volume in relation to mortgage banking performance expectations so we monitor that in our performance against it and have tracked very closely.

The mortgage banking expectation for the second half of the year is not a positive outlook.

That's what we're planning for and expecting in our own evaluation as we look to go forward there.

There was a dip that occurred, as you're all well aware, toward the latter half of the first quarter and we've capitalized on that at both PMC and our own operations here in Connecticut.

And that's part of what you're seeing in terms of performance during that period of time.

But we track this very closely and monitor mortgage banking and -- and deal with it on the expense side, based upon expectations.

Okay, thank you.

We have a follow-up question from Jim Ackor with RBC Capital Markets.

Please go ahead.

A couple of quick questions.

Well, one quick question with regard to overall expense growth.

You may have addressed this and I might have missed it.

Did you give any guidance with regard to sort of broad expectations for the bottom line on non-interest expenses in terms of what we should think about from a growth perspective and those numbers?

I think it was a question earlier about the run rate, Jim.

Yeah.

And, you know, that was, you know, in the low -- about 100 and -- you know, under 105 -- between 100-105 million.

And I think our growth rate as we go forward, as you know, we look at, you know, opening up, you know, more de novo branches, you know, I think that there are some positives on the other side that, you know, we should, you know, track in there for the next two quarters.

Okay.

Thank you.

And we have no more questions in the queue at this time.

Would you like me to repeat the instructions?

For questions?

No, I think everybody knows how to handle it.

I will just close and say thank you all for being with us today.

We appreciate your time and your interest in Webster.

Ladies and gentlemen, thank you for joining today's conference.

This does conclude the program.

You may now disconnect.

Good day.