FRC (2019 - Q1)

Greetings, and welcome to First Republic Bank's First Quarter 2019 Earnings Conference Call. During today’s call, the lines will be in a listen-only mode. Following the presentation, the conference will be opened for question. I would now like to turn the call over to Mike Ioanilli, Vice President and Director of Investors Relations. Please go ahead. Michael

Thank you, and welcome to First Republic Bank's first quarter 2019 conference call. Speaking today will be Jim Herbert, the Bank’s Chairman, Chief Executive Officer and Founder; Gaye Erkan, President; and Mike Roffler, Chief Financial Officer.

Thank you, Mike. It was a strong first quarter. Loans, deposits and wealth management assets have all grown nicely compared to a year ago. I'm pleased to say that we have now surpassed $100 billion in total bank assets during this first quarter. We’ve achieved this milestone after a of over 34 years of organic growth. This growth has been guided and driven by delivering exceptional client service, one client at a time as our cultural bedrock. We intend to continue our approach to banking in a similar manner. Let me share some year-over-year highlights. Total revenue growth was 12%, net interest income was up 15%, earnings per share grew 11.5% and tangible book value per share increased by 13%. These results have been driven by strong performance year-over-year across the franchise. Total deposits have grown by 14.5%, total loans have been up by 18.5% and wealth management assets have grown by 24%. Credit quality and capital strength each also remained very strong. Nonperforming assets were very low 5 basis points, while net charge-offs for the quarter were a nominal $127,000. Our Tier 1 leverage ratio increased to 8.84% at the end of the first quarter, a bit up year-over-year in spite of our asset growth. This is due in part to the completion of an aftermarket common stock offering in early January at the same time as we were added to the S&P 500 index. This offering raised approximately $170 million net to new common equity. Our client satisfaction levels remain strong as reflected in our recently received 2018 Net Promoter Score. This third-party compiled Net Promoter Score measures our client satisfaction and our clients’ willingness to refer First Republic to their friends and collogues. Our 2018 score is 72 this is very strong and remains more than twice the banking industry average. Indeed the score is higher or equal to many of the world’s leading consumer and service brands not just higher than banking. When clients identify us as their lead bank, which is more than half of our clients doing so, our Net Promoter Score increases further to 81. The differentiated level of First Republic service delivery results in a very stable client base and there continual word-of-mouth referrals, these two points drive our strong organic growth at all levels.

Thank you, Jim. It is an honor to be the part of the Board. Overall this was a strong quarter, loan origination volume was $6.7 billion during the quarter, down just slightly from a record first year first quarter in 2018. Additionally our churn loan pipeline is one of the strongest we’ve experienced and is picking up weekly. Given our strong pipeline and client activity, we continue to expect mid-teens loan growth for 2019. Single family residential volume was $2.2 billion during the quarter in line with the first quarter a year ago. Importantly, credit quality remains excellent and we continue to maintain our conservative underwriting standards. Our weighted average loan to value ratios for loans originated during the first quarter were 59% for single family residential and 47% for multi-family and commercial real estate together. Turning to business banking, business line commitments continue to increase nicely, up $1.1 billion from year-end 2018. This was mainly driven by capital call lines of credit. Business lines' outstandings were down this quarter due to a decline in utilization rate from 37% to 33%. This is not unusual as utilization rates fluctuate regularly from one quarter to another, driven primarily by size and timing of deal activity. For a perspective utilization rates have ranged from 31% to 39% over the past two years. Turning to deposits, it was a very good quarter in terms of both deposit growth and deposit rate. Deposits were up 15% from a year ago. Importantly, checking deposits remained strong, representing 59% of our total deposits at quarter end. Business related deposits represented 56% of total deposits consistent with the prior quarter. We are particularly pleased that we have been able to maintain a diversified deposits funding base. In the first quarter, our average rate on all deposits increased only 6 basis points from last quarter to 57 basis points. The average rate on total liabilities also remained low at just 79 basis points, compared to the 123 basis points average of the three banks that reported today, that is 40% less expensive. Additionally, in the first quarter our total liability cost increased only 5 basis points, which is less than half the increase reported by these banks. The strength of our deposit franchise is a very result of our client centric business model, as well as the depth and stability of our client relationships. In terms of private wealth management, it was another strong quarter, wealth management assets were up 11% for the quarter, and up 24% year-over-year. This continued strong growth was driven by net client inflows from both new and existing clients along with market appreciation.

Thank you , Gaye. Our liquidity position remains very strong. High quality liquid assets were 15.5% of total average assets in the first quarter. Net interest income, which we view as one of our key growth metrics was up 15% year-over-year. This reflects our ability to maintain a stable net interest margin, combined with growing our earning assets. During the first quarter, our net interest margin was 2.97%. This is slightly above our guidance for the year and was largely the result of better than expected deposit pricing. We would note that loan pricing over the three days has become even more competitive, while long-term interest rates have also moved lower. For 2019, we continue to expect net interest margin to be in a range from 2.85% to 2.95%. Our efficiency ratio for the first quarter was 65%. As a reminder, the efficiency ratio during the first quarter is always elevated due to the front loaded seasonal impact of payroll taxes. These expenses typically add 1.5% to our efficiency ratio in the first quarter. We continue to expect our efficiency ratio to be in the range of 63% to 64% for 2019. Importantly as we grow, we continue to make focused investments in technology to further enhance our ability to provide exceptional client service, improve our clients’ digital experience and to continue building a strong scalable foundation for our operations. Our effective tax rate for the quarter was 15.6%, which benefitted from a significant increase in the exercise of stock options by employees during the quarter. We continue to expect the Bank's effective tax rate to be between 19% and 20% for all of 2019. Thank you. Now, I'll turn the call back over to Jim.

Thank you, Mike and Gaya. It was a strong first quarter and we have very good momentum on the loan front and the asset under management front going into the second quarter. Looking ahead to the rest of the year, we're quite confident that our consistent stable client focused model combined with a very conservative approach to credit will allow us to continue to deliver safe, steady growth. Thank you.

At this time, we will be conducting a question-and-answer session. Our first question comes from the line of Steven Alexopoulos with JP Morgan. Please proceed with your question.

Hey good morning everybody.

Hi Steve.

I wanted to start first on NIM, I was surprised by how resilient the margin was in the quarter, if we look loan yields actually helped and Mike you just said that the competitive environment has worsened a bit. First, how do we think about loan yields trending forward from here, from the portfolio yield.

Sure. So in the first quarter, Steve, we were pleased that they were up 7 basis points from fourth quarter. We do have some benefit in the first quarter from the LIBOR and prime portfolios, which went up from December’s rate hike. And so that benefit usually is about call it 4 basis points in the quarter. With the lack of a rate move you don't get that same uptick. So here we’re at a pretty consistent rate with where certain new lock volume is coming in. But there could be a modest increase in the quarter, but competition is pretty tough right now. So it won’t be as robust as it has been the last few quarters.

Okay. And then maybe for Gaye. So the forward-look on interest rates has changed quite a bit in terms of your ability to go out and raise new deposit funding, has deposit competition eased at all relative to that, do you expect to see the price increase in deposits moving forward ease a bit?

Hi, Steve. The competition remains quite fierce on the deposit side as well. Having said that we are very pleased with the growth -- both the growth and the ability to lag. The first half of the year is always the toughest obviously the second quarter is the tax outflows and the second half is where we're seeing the great pickup in general, but given the loan competition in the second quarter with the tax outflows we remain confident in the 2.85%, 2.95% NIM guidance.

Okay. Could you help us think about, it’s a pretty wide range particular given where we are, should we expect NIM to trend down modestly 1 or 2 basis points a quarter, could it get much more pronounced just given what you're talking about on the loan environment side.

So a lot of that will depend on sort of loan competition and pricing and as Gaye said the second quarter has some of the challenges, it’s typically where we use some of our Federal Home Loan Bank if you were to look seasonally a bit more because of tax outflows, which have just sort of start here in April. So it could be a little bit more than one or two, but then I think it sort of stabilizes there because the second half typically gets better from deposit funding.

Got you. And then maybe one last one for, Jim. So if we look the Bank seem to be in a great position here to boost loans in wealth management, given all these large tech IPOs coming out of the Bay area, one, if you’ve seen any improvement. I know Gaye, said the loan pipeline has improved. Does any of it tie to that? And how do you think about this opportunity for you guys? Thanks.

The IPO opportunity is hard to measure. We have done the obvious. We know the employees working in the firms that are teed up and whether we bank them or not. And then we also have a pretty good way of digitally marketing into those that we don’t now bank. The concentration in a couple of our key markets particularly New York and San Francisco is quite stunning actually. I would say it isn’t yet impacting the house prices or loan demand because very -- only as we know the lineup is just beginning, and there are lock ups in most cases. So my guess, Steve, is that the net impact on house prices and house activity is more likely to be summer or fall in our market. The problem in San Francisco is the shortage of supply, will constrain volume more than anything else will.

Okay, terrific. Thanks for all the color.

Our next question comes from the line of Jared Shaw with Wells Fargo. Please proceed with your question.

Hi, good morning.

Good morning.

I guess, maybe just following up on the tech question, do you see -- I know that you have been doing a lot of personal lending to -- with security of the private security. Do you anticipate any refi or any pay down on consumer lending as a result of the tech IPOs as people do get some liquidity.

Yes, to the extent that there would be pay back on some of the secure loans that are outstanding against the privately held stock, but the majority of money -- remember where the money flows you have venture capital funds cashing out, money goes out into their partners, we bank a lot of them, money goes to their investors, we bank a lot of them. And so everyone focuses on the employment base of the companies, but actually they were second to receive proceeds because of lockups unless there's a specific underwritten secondary amount, which in most cases, there are some at least for the executives. But I think that we don't see it being a negative for our lending outstanding if that's what you're implying Jared in the question, no, it will actually be a positive for economic activity in virtually all of our markets, but particularly San Francisco.

Right, thanks. And then looking at the business lending category this quarter, down from fourth quarter, how much of that was driven by capital call lending? And are you seeing any change in the either the demand for capital call lines right now or the competitive landscape in that line?

Gaye?

Yes, the market continue -- the capital call line commitments, the market continues to be strong and the line usage is expected to continue as well. The real focus where we focus is the business line commitment, which eventually leads to growth in balances over time. And our commitments were up 26% quarter-over-quarter annualized, and they were up 35% year-over-year. And as Jim mentioned, related to the IPO activity as well, there is continued appetite for new fund formation, as well as continuing appetite for line commitments in the capital call business.

Okay, thanks. And then just final one for me on the student loan business continue seeing good growth there. Could you share with us I guess what your plan is in terms of ultimately as a target for concentration in student lending, or is that still influxes your sizing up the market?

Well, what's interesting about that is that, we don't have a target per se, we take in each individual household, based on their credit capability, what their needs are, and service needs are, as we meet them and establish a relationship one at a time. Last year, we grew by about 8,000, 9,000 such households. Our percentage of millennial households is now about 33% of our borrowing base -- of our consumer borrowers in the company. That's up from 14% or 15%, like three years ago. I would guess, and I'm only guessing that with the current trends it will be half of the bank in terms of household numbers, not dollars, but household numbers in a couple of years. Buried inside that group, obviously are a significant number of people that are involved in a lot of tech companies. So we don't know where it's going to go. The outstanding balance is about $2.3 billion roughly. And I can see that growing about $1 billion a year. Although we're beginning we now have several thousand such clients that have fully paid off their loans already, and are moving into home ownership status or soon will. So it's a good program. It's working well. We're sticking to our knitting in our markets, high FICO scores, couple of years of work, minimum loan size, et cetera. So it's working quite well.

And what's the yield on that portfolio for the quarter?

About 3.1-3.2 overall composite; remember the duration is only about six, seven years.

Perfect, thanks.

Our next question comes from the line of Arren Cyganovich with Citi. Please proceed with your question.

Thanks. With the tenure coming down so much in the first quarter, are you seeing any increase in demand for mortgages in your markets?

Yes, the refi volume is -- purchase has been strong year-over-year and the refi is picking up as well given the rate environment.

Any kind of magnitude that you could provide around that.

The rate -- the pipeline is very strong, the rate logs have increased significantly, both compared to a prior quarter and prior year. So -- and that's why we continue to expect the mid-teens loan growth for 2019. It's significantly stronger than what we have seen last year.

Okay, great. And then you had mentioned you had the seasonal issue with the taxes in the second quarter, are you seeing any difference in magnitude? I mean, last year was particularly high for you is it going to be as bad as last year from what you’re seeing thus far?

You’re right last year was a bit higher compared to the prior year then we had so far it’s similar magnitude not big difference, but it’s early so over the next couple of weeks we’ll see more into it. We expect the tax payments to be consistent it’s slightly higher this year and their positions now given the deposit growth and the cash position on the balance sheet.

Okay, thank you.

Thanks.

Our next question comes from the line of Ken Zerbe with Morgan Stanley. Please proceed with your question.

Great, thanks. Good morning.

Hi, Ken.

Starting up with wealth management, I think, I heard I think it was Gaye who mentioned that you expect an important in wealth fees, but could you just remind us like how much of those fees are tied to beginning of period balances? Because it seems like first quarter is a little weaker than what we would have expected and obviously market has come back a lot since.

Yes it is, so see investment management fee revenues which is by and large the large component of the wealth management fee revenues. Those revenues are tied to the prior ending balance of AUM. So Q1 is tied to the end of the year 2018 AUM. Given the strong increase, strong growth in AUM in Q1, that’s why we expect the second quarter investment management fee revenues to be increasing meaningfully.

All right, prefect. And then, just in terms of expenses and particularly the two leases that Jim mentioned, are those lease expenses fully in your run rate in first quarter or I understand your guidance was 63% to 64% I'm just trying to figures how meaningful those were in terms of total expenses.

Yes, so Ken there’s really no cost in the first quarter and most of the cost is going to come in later period, because as Jim mentioned the New York for example is not until 2021. And so you won’t really have any cost this year maybe a little next year, but really 2021 is when that hits. In San Francisco again the floors that we take are spaced nicely overtime, so it really impacts us a little bit this year, but not meaningfully where we would change our guidance and then it phases in overtime.

All right.

Ken let me add -- it’s Jim, let me add a comment into that. The reason we didn’t brought that up because we take space all the time is it’s indicative of two things. One as we do our forward-looking and planning the momentum of the enterprise was stronger than we have ever seen it before, at all sorts of levels. And we began to -- it began to dawn on us so we realized that we ran the numbers carefully that one of the constraints that we could run into rather easily was space and by that I don’t mean just absolute amount of space available, but wanting to have our organization tightly focused together. We do not put loan servicing in South Dakota. We keep it together the client service comes from that in part. And so, we decided particularly in San Francisco where space is getting quite taken very quickly actually we decided to move quickly and preemptorily. That’s the reason I mentioned sub-lease rights in both cases. In the Hudson Yards area, the construction going on in Hudson Yards office, new A Office construction going on in Hudson Yards is somewhere around 25 million square feet to give you a perspective, San Francisco all of it, only have 55 million square feet of A Office. So what’s being built in Hudson Yards is 50% of San Francisco. And so we took a significant and very important locational position in Hudson Yards when we could in a situation that appeared and we moved honestly very quickly on it. It also gives us growth from a New York corporate for quite a number of years. So basically in our two largest markets, where space not constrained for about five or seven years.

All right perfect, that totally makes sense. And then sorry just one last question going back to the margin if I could ask Mike on this, it seems like you guys have been consistently above your 2.85% to 2.95% for let’s say several quarters. I think I heard down 1 to 2 basis points maybe little bit more, but when you think about the full year are we thinking I think last quarter you mentioned it was going to be in the middle of that range are we now sort of at the high-end of that range? I am just trying to make sure everything on the path of that overtime.

Yes, I don't think from last quarter. I would change much. We are really pleased with how the first quarter came out, and I think we've been talked in January that we were operating at the high-end and we were able to stay there it is pretty competitive and the yield curve has moved down a little bit. So that’s why feeling that midpoint feels good to us. And that's why we sort of gave the range still.

Understood. All right, thank you.

Our next question comes from the line of Brock Vandervliet with UBS. Please proceed with your question.

Good morning. Thanks for taking the question. I just wanted to circle back on the capital call area because that growth is just so strong up 26% sequentially in terms of commitments. Could you just frame out where that growth is coming from in terms of new funds, expanded loans to existing relationships is any of that including direct partner lending just trying to get at that growth rate a bit more.

Just at the broad level at the sector level the forecast for new venture capital and key fund raisings in 2019 and 2020 is quite strong and there is a lot of appetite for new fund formation. So does the outlook for the capital call line business is quite positive. It is a combination of existing fund clients or continuing in their business as well as new clients coming in and you are seeing both the appetite as well as the valuation remaining strong and high and that's also driving the increased commitments over time.

And as you approach the market, I understand the structure most of these loans is pretty straightforward. Are you seeing laser sharp competition or is it somewhat less?

There is competition -- just couple of thoughts on your question. So, one, we tend to do the short-term uncalled capital breaching the financing 90 to 180 days. We don't tend to do the longer term ones, that’s number one. And number two just from a business model perspective these business banking and the line commitments are a result of us following the individuals, the principles, partner having done private banking with us and they like the service they were providing and they are too close their businesses and that’s how we ended up. So, yes, there is price competition, but the relationships and the service that we provide on the operational nature of those deposit it really what wins the deals over time. And the credit standards the way we look at it, we keep or maintain our conservative credit standards.

Okay, thank you.

Our next question comes from the line of Matthew Clark with Piper Jaffray. Please proceed with your question.

Hey, good morning. Just wondering how much the systems upgrade may have contributed to expenses in the first quarter and whether or not that’s a good run rate going forward and kind of when you think about overall expenses is mid-double digits still kind of the right way to think about the growth there this year.

I think mid-double digit does feel right to us, it allows us to continue to invest in the franchise or making digital investments, we’re beginning to work on the core systems that we talked about. The cost there have remained relatively modest thus far, we are in sort of a ramp-up phase and it will pick up as we move into the second quarter and into the later part of the year. But the overall expense growth mid-double digits feels about right to us.

Okay. And then it looks like increase your posted rates on your money market product this quarter. Just wanted to get the spot rate on your interest-bearing deposits at the end of the quarter and what your expectations were for that cost maybe in the upcoming quarter?

Sure, for overall deposits, the spot rate is at mid-60s.

Okay. And then kind of expectations for the upcoming quarter just a little bit higher than that maybe?

Well, it depends on the tax outflows and the rate environment in general and competition, but I would reinforce so far quarter-over-quarter deposit . Hello?

Yes. Matthew are you there?

I am. Thank you. And then just last one on the HQLAs in terms of how quickly you might grow into that excess. Just trying to get a kind of the pace at which you might be able to where things kind of stabilize?

Yes. So we expect to manage towards 12% HQLA ratio, we've communicated earlier. I would note that we have elevated cash levels that contributes to the HQLA ratio, and it's well timed given the second quarter tax outflows that we expect. But we would continue to manage towards 12% while being opportunistic in the markets as we see opportunities in HQLA both agency and muni HQLA.

Great, thanks.

Thanks.

Our next question comes from the line of Aaron Deer with Sandler O'Neil and Partners. Please proceed with your question.

Hi, good morning everyone. Just had a question, it sounds like you're starting to see a pickup in refi volumes given the drop in mortgage rates. I'm just curious looking back here at the first quarter, what was the mix of purchase versus refi?

About 50-50.

Okay. And then, Gaye, you gave kind of a good explanation behind the wealth management revenues in the quarter related to that being tied to end of period or start of period balances and the timing of some of the inflows and appreciation, but are you generally seeing any sort of systemic price competition within brokerage and investment management, just due to broader competition.

No, not necessarily, nothing significant of that sort. It was really two things, one the AUM decline in the fourth quarter that translates to the fee revenues, which rebounded nicely in the first quarter does the expected increase. And then also the insurance revenues are just seasonal Q4 is the strongest by insurance. Other than that it's normal business, no additional impact.

Okay, great. Thanks for taking my questions.

Thank you.

Our next question comes from the line of Dave Rochester with Deutsche Bank. Please proceed with your question.

Hey, good morning guys. Just back on the fee analysis and the comments you made, we expected the investment management fees to be a little bit lower this quarter obviously just given the dip in AUM in the fourth quarter. But it look like the fee rate actually came down a bit as well. And we've generally only seen a drop like that in the first quarter when you've had some lumpy performance fees the fourth quarter, which it didn't look like you had in 4Q 2018. So just wondering what drove that decline in that rate? Is there anything onetime in that or if it's a good level going forward?

It is a model shift temporarily given the asset allocation mix changes as market fluctuates between equities and fixed income. So that will be temporary with the market shift.

Okay. So this lower rate, we should not assume that that continues that could rebound in 2Q?

Yes, not necessarily. So we had a little bit more allocation towards fixed income, which had slightly lowered that basis point is just the allocation as the equity markets continue to be strong it would shift back in. Similarly sweeps points since have increased the fee deposits quarter-over-quarter as well.

If you think about it year-end, Dave, it was very volatile. And so there are some clients that may have moved to cash and fixed income. And as they come out of that into equities, you should then actually see the fee rate increase a little bit.

Yes. Okay, that makes sense. Great. And then just a quick one on the NIM, just curious given the competitive dynamics that you're talking about on the deposit side as to what you're baking into that NIM guidance for how long deposit costs will continue to increase overtime? So if you think 2Q will be the end of that increase, if you think they'll continue to increase through the end of the year? And I was also wondering what you're assuming for the interest rate curve from here, if you're looking for any kind of a steep in or if you’re sort of projecting the current curve through the end of this year?

So let me start by saying first of all as you were mentioning the spot rate we had a technical difficulty. So the response about the spot rate for overall deposits was in the mid-60s for the next quarter. And now coming to your question for a second, when we look back historically even if the fed funds rate were to stay flat at this level, we would still expect gradual increases in the deposit rate fewer stake could have being read. And when we look back 2004-2007 type of timeframe it last for about four to six quarters after the fed fund stops, but it’s very gradual shift in deposit rates. And the second quarter happens to be the tax outflows as well. And thus the NIM items that Mike Roffler has mentioned for the year the 2.85%, 2.95% we assume to increase.

Yes, so the guidance for NIM assume zero rate hikes for the rest of the year and the curve stays pretty flat, which it is now. And I think, Gaye, covered some of this in the prepared remarks if you look at our changes in our funding mix and funding liabilities the increases have been quite considerably better in a lot of cases especially if you look at total liabilities paid relative to peers or relative to the guys reporting today. And so that’s been very supportive of keeping our NIM stable over the past year in spite of the continued increase in the fed funds rate.

Yes, great. And then maybe just one last on deposits, it sounded like given your comments earlier just on the tax came in expectations you guys haven’t really looking for any kind of notable impact from the this year, right?

Not necessary, no meaningful impact so far from that category.

Okay, great. All right thanks.

Thank you.

Our next question comes from the line of Chris McGratty with Keefe Bruyette & Woods. Please proceed with your question.

Hey, good morning. Mike or Jim based on the re-duration of the mid-teens growth and then rallying your stock year-to-date any updated thoughts on capital either common or preferred?

I think we’re in pretty good shape for now. And the unexpected opportunity was the S&P 500 and as a result we put out the equity into the year that we probably would have needed and we would have done it later in the year. So at this point I think we’re pretty well capitalized.

Okay. And Mike maybe for you any kind of preliminary thoughts on CECL?

So thanks for that, no we’re busy, real busy validating models, getting right around parallel. So no numeric yet, but obviously coming soon. Again, I reiterate the strength of our credit and our loss history will play a key role in this as we go forward because you do use your history for a lot of the loan life and our history is obviously very good.

Okay, thank you.

Our next question comes from the line of Brian Foran with Autonomous. Please proceed with your question.

Hey, good morning. I was hoping I could just ask a follow up on SALT? It seems anecdotally a lot of people it just became real for them this year and maybe the sticker shock as they write their tax checks in April. So just wanted to follow up, I think Gaye you said you’re not seeing a big impact so far if you just could kind of when you say that is it the last week’s tax driven outflows in deposits or what metric you’re looking at there? And then just more broadly when you step back and talk to clients, I mean, do you think this is something we’re all going to regret about but ultimately live with or does it feel a little bigger and maybe could start driving behavior changes people moving and all that kind of good stuff?

Got it. So far there has not been a noticeable impact from the SALT. But again clients will be paying their taxes now so there will no more there be impact in a while. But ultimately following to the clients we think that clients will stay where the jobs or and that continues to be in our market. We have some clients who may have some clients that are more like stability to move to markets like Palm Beach or Jackson where we have offices and we would welcome them over there as well, but so far really no meaningful impact.

And then maybe just the Net Promoter Score, I realize asking about the year-over-year transition kind of missing the forest for the trees, the biggest thing is you’re 2x the industry. But they were down a couple points from what you printed last year. I don't really understand the full interworking of NPS is that just kind of noise or is it two or three point decline meaningful and attributed to anything.

It’s pretty much just in a way -- you have range of results, what we look at which we don’t necessarily report in detail for obvious reasons, but we have great deal of depth on where it’s up and where it’s down inside the Bank. They haven’t move around though. We don’t get excited about a couple of points. We do get excited about sort of 5 to 7 points that did not happen this year anywhere actually except on the upside in one area, which we’re pleased with.

Great, thank you for that.

Ladies and gentleman we have reached the end of the question-and-answer session. And I would like to turn the call back over to Jim Herbert for closing remarks.

Thank you very much everyone for attending the call today. We appreciate your time and attention.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.