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spk00: Good morning, ladies and gentlemen, and welcome to the Berkshire Hills Bancorp First Quarter 2024 Earnings Conference Call. At this time, note that all participant lines are in a listen-only mode. Following the presentations, we will conduct a question and answer session. To ask a question at that time, you will need to press star followed by one on your touch-tone phone. And if at any time during this call you require immediate assistance, please press star zero for the operator. Also note that the call is recorded Thursday, April 18th, 2024. And I would like to turn the conference over to Kevin Kahn. Please go ahead, sir.
spk03: Good morning, and thank you for joining Berkshire Bank's first quarter earnings call. My name is Kevin Kahn, investor relations and corporate development officer. Here with me today are Nitin Mahatre, chief executive officer, Sean Gray, chief operating officer, David Rosado, chief financial officer, and Greg Lindenmuth, chief risk officer. Our remarks will include forward-looking statements and refer to non-GAAP financial measures. Actual results could differ materially from those statements. Please see our legal disclosure on page two of the earnings presentation referencing forward-looking statements and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in our news release. At this time, I'll turn the call over to Nitin. Nitin?
spk01: Thank you, Kevin. Good morning, everyone, and thank you for joining us today. I'll begin my comments on slide three, where you can see the highlights for the first quarter. Overall, it was a solid quarter. Operating net income of 20.9 million and operating EPS of 49 cents were both up 4% linked quarter, supported by a reduction of non-interest expenses of 4%. ROTC was 8.73%, down 17 basis points versus fourth quarter. We are encouraged by the trends in key performance matrix, especially credit and expenses. Credit costs continue to trend down, with net charge-offs declining by 9% link quarter to 4 million. This is the fifth consecutive quarter of declining net charge-offs, while we increased our loan loss allowance by one basis point to 1.18% of loans, the fifth quarter in a row of building up our loan loss reserves. Our continued expense optimization focus is gaining traction. Expenses of $72.4 million were down 4% link quarter, reflecting lower technology and professional service expenses, and were below the midpoint of our quarterly run rate guidance provided in January. Our previously provided guidance for expenses reflected flat year-over-year expenses for full year 2024 compared to low to mid single-digit expense growth guidance by peer banks. And we continue to look for opportunities for further efficiency improvement while self-funding deposit generation and growth initiatives. Our balance sheet remains strong and a tangible common equity ratio of 8.2%. We repurchased 182,000 shares in the first quarter for $4.3 million. Net interest margin was up link quarter, and while we expect continued funding cost pressure, we believe that the worst of the NIM compression is behind us. Average deposits were up modestly link quarter and were up 3% year over year. Average loan balances were up less than 1% link quarter and up 6% year over year. We could potentially grow loans at a faster rate given that the larger banks have reduced their lending appetite, but we've opted to extend credit selectively while continuing to serve our clients and deepen relationships. We've updated pages on our overall commercial real estate and office portfolio and now have added a new slide detailing our exposure to our multifamily properties. Those slides highlight that our portfolio is granular geographically diverse and resultantly less risky. We continue to make steady progress on our strategic priorities to optimize real estate branch network and balance sheet. We announced the sale of 10 branches in New York, which tightens our footprint further and enhances the efficiency and profitability of our network. We remain fully committed to our remaining presence in New York. We sold securities to offset the deposits sold with the branch sale. You may recall we sold eight branches in the mid-Atlantic region three years ago. The New York branch sale similarly aligns with the strategy of tightening our footprint and improving our focus and profitability. I'd note that we intend to consolidate three additional branches in the second quarter, bringing our total branch count to 83. We believe we are now close to the right size of our branch network. David will cover the details of the transaction and corresponding security sales in more detail in a moment. Lastly, we're honored to be recognized by Newsweek as one of the most trustworthy companies in America for third consecutive year. We were ranked number 10 in the country for most trustworthy banks in the country. We are grateful to our customers for their vote of confidence and to our bankers who deliver exceptional service and advice to our clients every day. We have moved our best target slide to the appendix for this quarter as we come close to the end of our three-year program. We are near the low end of our target range for operating return on assets at 71 basis points and our operating return on tangible common equity at 8.7%. PPNR was 33 million or 132 million on an annualized basis. Our ESG score remains in the top quartile, and our first quarter net promoter score improved further to 54. I want to use this opportunity to thank all of my Berkshire Bank colleagues for their continued hard work and commitment to the bank. Through this difficult external environment and corresponding changes being made internally, their commitment to our strategy and dedication to our customers and all stakeholders is what brings us together and truly sets us apart. We intend to self-fund investments in strategic priorities that support our vision to be a high-performing, relationship-driven community bank. With that, I'll turn the call over to David to discuss our financials in more details. David.
spk05: Thank you, Nitin. Slide four shows a summary of our branch sale transaction. We sold branches in the western part of the franchise including Syracuse and locations north and south of Albany. The sale includes $485 million in deposits and $58 million of loans. The sale avoids real estate closure costs, ensures employment of Berkshire employees, and reduces expenses going forward. We expect annualized revenue loss of $4.3 million an expense reduction of $6.4 million post the transaction. We expect the branch sales to close in the third quarter and the approximate pre-tax gain to be $19.3 million. We recorded restructuring expenses in Q1 related to the branch sale of $2.8 million after tax, or $0.07 per share. Slide 5 shows details of the security sale. We sold $362 million of market value of securities and incurred an after tax loss of 38.3 million or 89 cents per share. We sold securities to offset the mismatch between the amount of deposits and loans that we sold and to reduce below market assets on the balance sheet. Slide six shows an overview of the first quarter. As Nitin mentioned, operating earnings were $20.9 million, or $0.49 per fully diluted share, up $0.02 link quarter. Net interest margin was $315, up four basis points link quarter. And net interest income of $88.1 million, declined $281,000, or less than 1% link quarter. Operating non-interest income was $17.3 million, up 4% link quarter. Operating expenses were $72.4 million, down 4% link quarter. Average loans increased $69 million, and average deposits increased $42 million. Net charge-offs were $4 million, or 18 basis points of average loans, and were down 14 basis points year over year. Provision expense for the quarter was $6 million, as credit trends remained positive. We increased our allowance for credit losses by $2 million in the quarter, bringing our allowance for credit losses to 118 basis points of loans. Slide 7 shows more detail on our average loan balances, which were up $69 million link quarter, or 1%, primarily driven by modest growth in CREE. The modest decline in consumer balances reflects the continued runoff of the upstart portfolio. Slide eight shows average deposit balances. Average deposits increased $42 million link quarter. The deposit mix shifted with the decline in non-interest bearing deposits and an increase in money market and time deposits. Non-interest bearing deposits as a percentage of total deposits were 24 percent in Q1 versus 25 percent in Q4. Deposit costs were at 229 basis points up 18 basis points linked quarter. Our cumulative total deposit beta is 41% through 525 basis points of Fed tightening. Turning to slide nine, we show net interest income. Net interest income was flat linked quarter and down 10% year over year. The net interest margin was 315, up four basis points linked quarter. Given the sale of lower yielding securities, We expect our NIM to increase by five basis points in the second quarter and to remain relatively flat for the rest of the year. Slide 10 shows operating fee income up $636,000, or 4% linked quarter. Loan related fees were up $605,000, driven primarily by higher swap fees and commercial loan servicing fees. Wealth management income was up $490,000, on higher seasonal tax preparation fees and market appreciation. Gain on sale of SBA loans were down 683,000 due to lower premiums in the market and some of Q1 production sliding into Q2. Recall we had a fair value gain on securities in the fourth quarter and we swung to a modest loss in the first quarter. Other fees reflect changes in PAM accounting which lowered tax credit amortization expense and lower Foley income link quarter. Slide 11 shows expenses. Operating expenses were down 4% link quarter to $72.4 million. Recall there was a fourth quarter technology expense true up of $800,000, so normalized fourth quarter expenses were closer to $74.5 million. The expense decline this quarter was driven by lower technology and professional services expenses, partially offset by increased compensation and occupancy expenses. Compensation includes seasonally higher payroll taxes, which were about $1.2 million above normal quarterly run rates. Other expenses, which is a number of smaller items, declined, driven by lower loan workout expense, and lower stationary and postage. GAAP expenses of 76 million include 3.6 million of pre-tax restructuring costs, or 7 cents per share, related to the branch sale. As I've said before, we are committed to managing expenses with discipline and transparency. The granular approach we are taking is starting to reduce our expense base. We remain committed to ensuring that every dollar we spend is thoughtful and necessary to run the bank efficiently or to grow revenue and earnings. Slide 12 is a summary of asset quality metrics. Non-performing loans were flat link quarter and down 20% year over year. Net charge-offs of $4 million or 18 basis points of loans were down 400,000 link quarter and down 2.9 million year over year. I'd note that our 10-year average charge-offs to loans is 27 basis points. We've included a chart in the appendix with Berkshire's net charge-off rates versus the industry since the year 2000. Slide 13 shows that our CREE book is well diversified in terms of geography and collateral type. The credit quality of the CREE portfolio remains solid with non-accrual loans at 11 basis points of period end loans. Slide 14 has more details on our office portfolio. As noted last quarter, the weighted average loan to value ratios are about 60%, and a large majority of the portfolio is in suburban and Class A space. We believe our office portfolio is well underwritten, diversified, and the asset quality of this portfolio remains solid. Slide 15 shows details of our multifamily portfolio. The multifamily portfolio is $618 million, or 7% of loans. The book is well diversified across our footprint. We currently have no non-performing loans or net charge-offs, and criticized assets are 1% of the total book. While current credit quality metrics are positive, we recognize that economic uncertainties exist, and we are monitoring both new originations and existing portfolios very carefully. Slide 16 shows returns over the past five quarters on a gap in an operating basis. As you know, the current operating environment is presenting headwinds, but we remain focused on improving medium-term performance and look forward to a more normal operating environment. Slide 17 shows our available liquidity versus uninsured deposits. Coverage of uninsured deposits was 134% at the end of the first quarter. Slide 18 shows capital ratios. The common equity tier one ratio was 11.6%, and the TCE ratio improved 20 basis points to 820. Our top capital management priority is to deploy capital to support organic loan and deposit growth. Secondly, we remain biased to stock repurchases, given that our stock price is trading below tangible book value per share. In Q1, we repurchased $4.3 million of stock at an average cost of $22.14. In terms of outlook, we expect the branch sale combined with this quarter's security sale to be effectively neutral to 2024 earnings outlook, which was provided in January. With that, I'd like to turn it back to Nitin for further comments.
spk01: Thanks, David. The operating environment for banking industry continues to be challenging, given the historic increases in interest rates to quell inflation. The yield curve hit its longest inversion on record this March at 21 months, exceeding the previous record of 624-day inversion in 1978. And the expectations for the Fed pivot to lower rates has been extended even further. While we can't control for the macro environment, we are intently focused on controlling what we can and have several levers, including rigorous expense management, opportunistic hiring for deposit and loan growth, and proactive asset quality management. We look forward to a more normal banking environment in late 2024 and into 2025. In the meanwhile, we remain focused on selective, responsible, and profitable organic growth. With that, I'll turn it over to the operator for questions. Operator?
spk00: Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request. And should you wish to withdraw from the question queue, you will need to press star followed by two. And if you're using a speakerphone, please lift the handset before pressing any keys. Please go ahead and press star one now if you do have any questions. And your first question will be from David Bishop at Hubday Group. Please go ahead.
spk07: Morning, Dave. Morning. Dave, just curious. You know, you've seen the press releases in terms of some of the senior talent you've been able to hire as of late here. Is that starting to impact in terms of, number one, reported loan growth, or number two, is that starting to bleed into the the pipeline for both loans and deposits?
spk01: Yeah, Dave, the short answer is yes. We are seeing the pipelines build up both for deposits and the deeper relationships that we're building with the existing clients. And in fact, some of the benefit of new hires is also showing up in our wealth management group where the number of referrals is at its highest level. So, yes, we're beginning to see results, and the pipelines are built up, and pipelines for both deposits and loans are up year over year on both sides of the balance sheet, partly driven by those hires.
spk07: And any segments in terms of those hires that they specialize in, or is it just sort of broad-based commercial banking?
spk01: It is a little more targeted, Dave. It's highly targeted towards the professional segments and CPAs and law firms and not-for-profits. And I think that's where most of the hires that have joined us have specialized in. So we're beginning to see new types of clients and higher value clients that we previously didn't have as much access to.
spk05: Hey, David, it's David. The only thing I would add to that is the, The focus for us is more on the deposit side than the loan side. We have really strong existing loan origination capabilities. While these individuals do both sides of the balance sheet, our interest is to lead on the deposit side.
spk07: Got it. And then I always appreciate the disclosure on the capital side there. Then just curious from a holistic basis, you know, obviously a little bit more growth here on the 100% risk weighting categories, you know, C&I leading growth, you know, risk-based capital, I think about 11.6, 11.7. Are there any sort of internal targets you're sort of guiding or managing to? I don't want to go below on the risk-based capital perspective.
spk01: No, not really. I think we're pleased with where we are in terms of our capital matrix. We don't have a specific target for where we would like our risk-weighted assets to be at. We do manage internal kind of guardrails around the low point or the high points, and we're operating well within those ranges.
spk07: Got it. And then, final question, just, you know, credit, you know, bumping along fine. Looks like, you know, upstart continues to drive, you know, the bulk, I guess, of the majority of credit losses. You know, is there a time here where maybe you could, you know, pursue a bulk sale of that portfolio and clean up credit even more? Just curious, you know, just I know it's a small part of the portfolio, but just are we just going to continue to see that, you know, slowly a trip off the balance sheet?
spk01: Yeah, Dave, I think you're right. It is less than 1% of the portfolio. It's been on runoff mode for about five quarters now, and it continues to run off at the pace we anticipated. And our teams are working with our partners to manage and monitor the portfolio tightly to improve its, you know, current performance. But we're also looking at opportunities to accelerate that runoff, including opportunities to divest. So I think all options are on the table, but current focus is to manage, monitor, and contain the curve there. Great.
spk07: Thank you for all the color. Thanks, Dave.
spk00: Next question will be from Mark Fitzgibbon at Piper Sandler. Please go ahead.
spk06: Hey, guys. Good morning. First question I had. Good morning. First question I had is on the fee line. Your guide previously for the full year 24 was $76 to $78 million. And if you sort of annualize this quarter's run rate, you come up pretty far below that. So I was wondering if you could help us think through what some of the big changes are likely to be that will get you closer to that guide number. Is it SBA loan sale gains, or are there some other items in there that we should look for a pretty good uptick during the course of the year?
spk05: Yeah, Mark, fees were a little light in the first quarter. SBA I called out was down a little less than $700,000 per quarter. What I tried to say in the comments was the sum of what we thought would hit in the first quarter wound up pushed to the second quarter. That line has been down for about three quarters in a row. Over the last couple quarters, it's been lower premiums. Premiums are starting to recover, so we're feeling better about that line item as the year unfolds. I also called out just what I would call noise is just fair value adjustment on the securities line, or fair value adjustment on securities. Just bounces around. There's a few items that we mark to market, that'll bounce back as well. We had a really good quarter for swaps, which have been light for a couple quarters now, and on other loan-related fees, meaning servicing fees, some syndication fees. So the only Other things I would point out is the PAM accounting had a one-time small impact on a negative impact on the fee income, so that'll fall out. So we, admittedly, while light, I think I'm not really worried about the fee line and think we'll see better fees in coming quarters. Okay, great.
spk06: And then secondly, David, are we likely to see any more security sales or was this kind of a one-time deal in conjunction with the branch sale that just kind of made sense and kind of cleaned up the portfolio to the point that you wanted it to be?
spk05: Yeah, I think we're essentially done for now. You know, I'd call it two and done since it's been two quarters in a row, but clearly the second one was linked to the branch sale. Our securities are now down to about 10%, just under 10% of the balance sheet. On the low end of the peer group, we still have pledging requirements for some of our municipal customers. So I think I don't anticipate any further box security sales like we've had the last two quarters.
spk06: Okay. And then, Nitin, in your opening comments, you referenced the fact that you felt like at 83 branches, you were sort of close to the right size of the branch network. I guess it surprised me because it still feels like your franchise is pretty geographically spread out and the 10 branches that you sold didn't really pull in the reins very much. Given that you're getting close to that June, you know, target date for the best program, And you're still a decent amount below the financial goals that you set. I guess I'm wondering, wouldn't it make sense to take some more draconian actions to try to maybe shrink the footprint and improve the profitability?
spk01: Mark, I would say we used to be a really sprawling geography-based network, which we had mid-Atlantic and all the way going into Syracuse on the western part of the geography, which has been tightened now. We were about 130 plus ranches network. And if you look at the peer groups, that's about mid-70s. And that's the reference to saying we're coming close to the right size in terms of where the peers are. This is not going to stop our teams to evaluate opportunities to consolidate or swap locations and things of that nature. That's always determined by the footprint and the footfalls in those branches and the business that's coming in. what we have today are all profitable branches and the part of the geography that's our core geography we continue to hold on to the high market share that we have while investing in the new markets where we anticipate new growth so i think it's not to say we're done but it's to say that we're coming pretty close to what we believe to be the right size network with the caveat that we'll continue to look for opportunities to consolidate and swap as the opportunities arise Thank you. Thank you, Mark.
spk02: Yeah, hi. Good morning, gentlemen. Hoping we could just start back with the security sale. David, can you just remind us what was the date on when those were sold and what was the yield? Or just approximate timing in the quarter? I mean, I assume it was March, end of March.
spk05: Yeah, so we started a few days after the announcement. So security sales occurred throughout the month of March. And in the slide, you see the average. We were just under 2% on the market yield, 198%.
spk02: Okay, great. Thanks. And then do you have the spot margin for the month of March?
spk05: Sure. Spot margin for March was 314. So if you're not exactly sure where you're going, but my comment around the 314 would be the impact of the security sale, very similar to the discussion we had three months ago talking about the December security sale was it was not – it's not fully reflected in the March spot.
spk02: Makes a lot of sense. Okay, good. And then just around your comments, I guess, you know, Nitin, to you and David, the three additional branch closures coming up in 2Q, where are those located? And do you have the charges and are you expecting to retain all the deposits and loans? How are you thinking about that?
spk01: Yeah, they're all based in Connecticut, Laurie, and we have had conversations with our key clients there, and they're pretty comfortable kind of managing the transition through our my bankers and private bankers there. So we feel pretty good about retaining those deposits while kind of consolidating those locations. On the charges, I think... Yeah.
spk05: No, we don't have a number yet, Laurie.
spk02: Okay. Okay. And then what about the cost saves? What are you expecting there?
spk05: Not significant. I mean, one is a very small limited service branch. The other two, they're consolidation. I wouldn't pencil in too much for that at this point. I'd focus on how well expenses were controlled this quarter, especially with the seasonal uptick in payroll. And I'd focus on our comments around what we're doing, trying to change the focus of expense management in the company. That's the real message. Absolutely.
spk02: And yeah, just to that point, yeah, your guidance last quarter expenses for this year, 293 to 297, you're clearly coming in way below that, which is great. I just want to make sure I'm thinking about this the right way. So if I look at your expenses for this quarter, X-ing out the mergers, X-ing out the FICA, you're at around 71 million. You get another 1.6 million or so down, just the expense reduction associated with the 10 branches. Maybe just a tiny bit on the three closures. Is there any spending that you're going to be, is there any additional sort of significant spend that you're doing in, you know, as we head, obviously we're, you know, only a quarter way through this year, but as we head into next year, how should we be thinking about that? Are you really kind of at a quarterly run rate of 69, 70 million? Or is there any other spending coming down the pike? How should we think about that? Is it all dropping through? Or what else are you tightening? So, Maybe a better question is, yeah, or maybe just help us think about as we look to fourth quarter when everything should be largely pretty clean, what should we expect on a fourth quarter, just dollar expense run rate? How should we think about that? Thanks.
spk01: Lori, I'll give David a minute to think through that. But just on a strategic level, what we will continue to do is invest in the opportunities to grow deposits, as David highlighted earlier, and also deepen relationships with the clients that we have. So if you asked about things that we're looking to invest in, I think it's going to be investments in finding more frontline bankers especially in the commercial private banking cash management types of areas where we get larger deposit relationships and opportunities for fees we're also looking to continue to improve our digital platform we've launched our online and mobile platform we're looking to do our public website refresh so i think there's going to be a little bit of investment there We're also looking to do a swap location within Boston. So I think those are the elements that are ensuring that we also invest in the future. So those would be the types of investments that will continue to go on, improving banker experience, client experience, and our technology staff.
spk02: Got it. Okay. And so really kind of know. Oh, yeah, go ahead.
spk05: Now, what I was – I was going to answer kind of in the context of the full quarter, the full year, and the guidance we put out in January. And at a high level, you know, what are the goods and what are the bads, right? So, you know, we were light on NII and we were light on fees, as Mark was questioning earlier. We were better on credit and we were better on expenses. project day we made the point we called out the cost saves and the income give up but we made the point that no change to 24 earnings from project day right because that's inclusive of the um the security sale so while where you're going is yes we are in light on expenses to the guidance that we gave, we're not at this point because of all the investments that we continue to make in conjunction with all the expense controls we have, we're not ready to take the expense guide down yet. We're only through the one quarter of the year. We'll probably have this discussion mid-year.
spk02: Okay, sounds good. Thanks for taking my question.
spk05: Thanks, Laurie. Good question.
spk00: Next question will be from Chris O'Connell at KBW. Please go ahead.
spk04: Morning. Morning, Chris. I just want to start off. For the, you know, on the average balance sheet, you know, I know they were, you know, truncated in terms of, you know, the held for sale amounts on there. Are the yields there good in terms of, you know, the 572 loan yield and the 275 deposit cost? Is that reflective or is it a little bit skewed, you know, due to, you know, the short duration that they were on the averages there?
spk05: So if you're talking the margin, we tried to call this out on the margin page in the press release, Chris. So, you know, the short answer, are the numbers good? Yes. The, what we tried, you know, there's a big difference between endings and averages related to loans and deposits associated with Project A. And that shows up on, I'm sorry, I think I said page seven, on page 10 of the press release. So you see low average balances, for example, for loans that we sold of only $18 million in the quarter, the footnote tells you the day that we moved them out of the regular portfolio into a held for sale portfolio. Does that answer your question?
spk01: Yes. Just one thing I noticed, you said 544 and 275. I think it's 544 for earning assets and 245 for total liabilities, just for apples to apples. Oh, no.
spk04: I was just referring to the held for sale yields.
spk05: Yeah. Yeah. Just the held for sale. And just the nuance there, Chris. So the 572 is the loan's impact on the quarter. If you look carefully, you can see that we broke out the deposits between interest bearing and non-interest bearing as well. So the 275 is just the interest bearing piece.
spk04: Great. And then, so just wanted to talk to, you know, the impact on the margin, you know, once the actual sale occurs there. I mean, you seem to indicate in, you know, the commentary that you know, the NIM going into 3Q should be, you know, fairly flat to 2Q. So there's really, you're expecting, you know, not much of an impact, you know, once the transaction occurs.
spk05: Yeah, so it's complicated, admittedly. So The point I was making with Laurie is the spot in March really not reflecting the security sale. So you have security sale in Q2 helping the margin. You have deposit sale in Q3 going the other way. Our interest rate risk position is neutral. I think that's, we haven't been asked that yet, but that's probably important in the context here. You know, we're three months ago, We were talking about four to five. Some people were talking about six Fed moves. Now we're talking about one, and now it's September. A month ago, it was July, and there were two. So that's an incredible amount of noise around interest rates. For us, we basically have a neutral balance sheet, which is the good news. So all the market gyrations, you know, aren't moving our NIM all over the place. At the end of the day, the one thing, and from my perspective, that's going to drive margins this year is deposit costs. And deposit costs are the competitive pressure of how we all behave. Deposit costs were up 18 basis points Q4 to Q1. You know, not great news, but the good news is the prior quarter they were up 30 basis points, and the quarter before that they were up 30 basis points. So the, while deposit costs are going up, the pressure is abating. We're all generally behaving as an industry. and the cd books that we all have are about a year and they're all almost all rolled over so we're not going through that very low old rates to market rates they're now kind of close to market rates to close the market rates that's why the pace of increase the second derivative is slowing down but ultimately the assumptions that we make around our cost of deposits for the balance a year is the number one issue that's going to drive our margin and everyone else's. Our asset yields are really quite steady, and then we've improved them with the security sales. But we can lose all that benefit on the deposit side if deposits get much more aggressive pricing from competitors.
spk04: Got it. That's helpful. And is the plan to keep cash somewhat elevated here until the time of the transaction in the third quarter and then bring that down?
spk05: Yeah, two comments there. So we do have some more... wholesale borrowings that'll come off in the second quarter. It's a little less than $200 million if memory serves. So that'll take some of that cash balance down. Some of it is just excess liquidity we're holding. So expect it to come down, but not,
spk04: not significantly i don't think we'll wind up cutting it in half until after the transaction settles so you're really talking um end of the third quarter into the fourth quarter got it um okay great and then you know as far as you know the buyback appetite from here um you know you guys did you know four million here you have a you know 40 million authorization you know, and you're, you know, trading at touch boot, you know, a little bit below tangible book. Do you expect to get a little bit, you know, more aggressive throughout the year, especially, you know, with the upcoming gain?
spk05: Yeah, I would say market dependent, Chris, but, you know, we've been under, just under tangible book value for quite a while now. I would point out in Q1, we blacked ourselves out because of project day. So Q1 was a little lighter than it otherwise would have been.
spk04: Okay, got it. I appreciate the time. Thank you. Thank you, Chris.
spk00: Thank you. At this time, I would like to turn the call over back to Mr. Mhatre. Please go ahead.
spk01: Thank you, Sylvie, and thank you all for joining us today on our call and for your continued interest in Berkshire. Have a great day and be well.
spk00: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.
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