Investors Bancorp, Inc.
Q3 2015 Earnings Call Transcript

Published: 30 Oct 2015

[Operator:]

Good morning everyone and welcome to the ISBC Third Quarter Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please also note that today's event is being recorded. At this time I would like to turn the conference call over to Mr. Tom Splaine, Senior Vice President. Sir, please go ahead.

[Thomas Splaine:]

Thank you, Jamie and good morning everyone. We’ll begin this morning’s call with the company's standard forward-looking statement disclosure. On this call, representatives of Investors Bancorp Inc. may make some forward-looking statements with respect to its financial position, results of operations and business. These forward-looking statements are not guarantees of the future performance and are subject to risks, uncertainties and other factors, some of which are beyond Investors Bancorp's control and are difficult to predict, which can cause actual results to materially differ from those expressed or forecasted in these forward-looking statements. In last night’s press release, the company has included the Safe Harbor disclosure and refers you to that statement. That document is incorporated into this presentation. For a more complete discussion of certain risks and uncertainties affecting Investors Bancorp, please see the section entitled Risk Factors, Management Discussion and Analysis of Financial Conditions and the Results of Operations set forth in Investors Bancorp’s filings with the SEC. Now, I'd like to turn the call over to Kevin Cummings, our President and CEO; Domenick Cama, our Chief Operating Officer; and Sean Burke, our CFO.

[Kevin Cummings:]

Thanks, Tom and good morning. Our third quarter was a very strong quarter for the company and Investors Bank but most importantly, it was the quarter where we completed our core conversion of our deposit and loan operating systems in August. This was a major undertaking by the Bank and encompassed almost the entire organization. The weekend of August 22 went well and we are moving forward as we prepare to continue our transformation to a full service commercial bank. At this time I would personally like to thank our employees for all their dedication and hard work through this transition. Like everything we do at Investors, it was accomplished with a sense of purpose and tenacity to get this project completed on time and with a high level of competency. Having completed the core, we are still very much committed to our business plan based on organic growth, stock buyback, dividend and smart acquisitions that enhance our franchise and bring long-term value to our shareholders. For the nine months ended September 30, we repurchased 25.3 million shares for approximately $304 million. Our organic growth since June of 2014, right after our second step, has been very strong. Assets are up $2.9 billion or 16%. Total loans are up 17% and commercial loans are up 42% since June 30 of last year. Deposits have also grown $2.1 billion and represent 19% growth since our second step. This prudent organic growth along with diversity of lending products has resulted in our continued leverage of our excess capital from 19.66% at June 14 to 16.1% at the end of this quarter. For the quarter, earnings were $48.8 million or $0.15 a share compared to $39 million or $0.11 a share for the quarter ended September 30 of last year. During the quarter we recorded a onetime tax item related to a prior acquisition which increased our net income by $4.1 million. Taking this number out, core income would have been $44.7 million, a 15% increase from the prior year and $0.14 for the quarter or 27% increase from $0.11 in 2014. It was a strong quarter with respect to maintaining our net interest margin as it was flat from the second quarter at 3.14%, which was no change. We are pleased with our progress and continued transformation of our balance sheet. Commercial loans are up 7.3% from the second quarter with our business lending unit growing 12% to almost $1.5 billion, which includes owner-occupied commercial real estate. Multifamily and commercial real estate had another strong quarter growing $197 million or 3.5% and $367 million or 13% for the three months ended September 30, 2015. We continue to diversify this portfolio and want to build on our relationship business platform. We believe that this strategic direction will build franchise value for our company. We are on course to fill that void here in the New York, New Jersey market by becoming the leading full service commercial bank headquartered in our market. Believe me, it is not an easy road but with the hard work and an acute focus on an execution of our business plan, we will continue to grow and diversify our revenue sources. On the credit front, we saw an uptick in our non-accrual numbers, mainly on the residential side. Given New Jersey, this is a difficult process as New Jersey is a judicial state and the time period for foreclosure is over three years. We continue to move these assets, though, once we get titled as our ORE balance is down from the second quarter and is currently at $6.6 million, and that consists of 48 properties. During the third quarter, we reported gains of $830,000 on this real estate sold, which was our tenth consecutive quarter of gains on sales of ORE. This non-accrual resi portfolio is currently approximately $100 million consisting of 521 properties for an average loan of less than $200,000. So approximately $192,000. We will continue to evaluate our disposition strategies for these loans. On the commercial side, our credit remains very strong as non-accruals are $24 million or 23 basis points. We moved during the quarter, we moved one business relationship for about $4.3 million into non-performing status and this consisted of two loans, neither of which was 90 days delinquent and we are current with respect to their interest payments at September 30. Our provision for the quarter was $5 million, which exceeded net charge-offs by $4.5 million. Year-to-date, our provision for loan losses has exceeded net charge-offs of $2.8 million by $18.2 million in 2015. In 2014, our provision exceeded net charge-offs by $17 million -- $17.2 million, at the end of the third quarter for nine months. Our loan growth has been strong but we continue to build a strong balance sheet and we will continue to manage the bank in a prudent and safe manner. On the deposit side, we continue to expand our branch network with the opening of our [indiscernible] branch, our fifth branch to open this year. Our deposits are up $1.2 billion since the end of the year and $1.9 billion over the last 12 months. This represents a 13% and 16% growth on an annualized basis. We continue to invest in our retail branches and with the core conversion behind us, we will have a better -- when we better products and a more efficient operation to focus on customer service in delivering the best service across multiple delivery channels. Now I would like to turn it over to -- the call over to Sean Burke, our CFO, who will give some color and details on our balance sheet and income statement. Sean?

[Sean Burke:]

Thank you, Kevin. I would like to briefly review some of our financial highlights for the quarter. Lending activity continues to be robust as Kevin mentioned, our loan portfolio increased $675 million to $16.4 billion quarter-over-quarter, which represents 17% annualized growth. We continue to gain traction in our C&I lending area with loans up over 120% year-over-year. C&I loans now represent 6% of total loans. Our pipeline of loans as of September 30, stood at $2.4 billion with multifamily making up 40% of that pipeline, C&I 30%, CRE 20% and the remainder residential. On the liability side, deposits showed nice growth, up $460 million quarter-over-quarter or 15% on annualized basis. Non-interest checking grew at a 25% annualized clip from the second quarter. Asset quality metrics remain strong. Non-performing loans, total loans were 91 basis points at September 30 and our allowance to non-accrual loan coverage was 176%. Shifting gears to the income statement. Net income for the quarter was $48.8 million or $0.15 per diluted share, excluding the impact of the $4.1 million tax benefit, quarterly net income and EPS grew 15% and 21% versus the third quarter of 2014 respectively. As Kevin mentioned, net interest margin came in at 3.14% which was flat from Q2. Prepayment penalty income totaled $6.4 million for the quarter versus $5.6 million in the second quarter. Absent prepayment penalty income, margin would have declined two basis points quarter-over-quarter. Provision for loan loss totaled $5 million, which represented $2 million decline versus the second quarter of '15. Non-interest income totaled $11.3 million, remaining relatively flat compared to the second quarter. That said, included in the total are $1.5 million of non-recurring items namely the gain from our previously announced sale of residential loans and a gain from an equity investment disposition. Non-interest expenses for the quarter totaled approximately $86 million and included approximately $2 million of expenses related to our core conversion that we expect to go away. Now the costs are printing, mailing cost, training cost, things of that nature. In addition, compensation expense related to our equity incentive plans contributed approximately $4.5 million to this quarter's expense total. Our tax rate decline in this period due to a one time tax item of $4.1 million, our effective tax rate for the third quarter was 32%, adjusting for the one time item the tax rate would have been 37.5%. We continue to leverage our capital from share purchases. We bought back $7.4 million shares during the quarter, bringing total shares repurchased year-to-date to $25.3 million. On that note, I would like to turn it back over to Kevin for some concluding remarks before we open up for Q&A.

[Kevin Cummings:]

Thanks, Sean. 2015 is turning into a great year for Investors Bank. We have record earnings, strong organic growth and continued expansion of our franchise. We completed our core conversion and are on a path to expanding our commercial capabilities in areas of cash management and Internet and mobile banking. Our employees are focused on our mission and our vision to being the leading commercial bank in our region. The competition is fierce but the New York, New Jersey market is the most attractive market in the world. We have a great upside potential and with our stock trading at 1.3 to tangible book value, we believe it is a solid and safe investment. Again, I want to thank all our employees for their hard work and dedication through the core conversion process. It was a difficult process but as a team, together, we got the job done on time and with minimal customer disruption. We are one of the strongest banks in the country with a capital ratio of 16%. We have a proven track record of executing on our strategic plan which focuses on organic growth and smart acquisitions. We see the M&A market heating up and we are well positioned to execute now that the core conversion is behind us. This past October 12, we celebrated our ten-year anniversary as a public company. During that period, we have grown from $5.2 billion in assets to over $20 billion and have changed every aspect of our company. Our commitment to our customers and our communities cannot be matched by any competitor. It is this commitment and the dedication of our employees that makes us a story of growth, continuous improvement and most importantly, our willingness to change and accept challenges, such a good story for our shareholders. As I said during our second step road shows, it is half time at Investors Bank and games are won and lost in the second half. We are off to a great start in the third quarter or the second half with five very strong quarters post-conversion. And we continue to transform our balance sheet and our business plan in a very difficult operating environment. We are focused on the execution and have strong momentum going into the fourth quarter and next year in 2016. There continues to be many opportunities for us in these markets and we embrace the challenge. Right now I would like to thank you all, our shareholders, for your continued support. And now I would like to open up things for questions. Thank you very much.

[Operator:]

[Operator Instructions] Our first question comes from Jared Shaw from Wells Fargo. Please go ahead with your question.

[Jared Shaw:]

As you look at the commercial growth and the strength of commercial growth there, how are you -- where are you really seeing that? Are you expanding the relationships, those new relationships, are you able to get larger loan packages in relationships as you are building that business or is that really just blocking and tackling at the same size that you have been in the past?

[Domenick Cama:]

Jared, good morning. It's Domenick. We have been growing the relationships. We have been seeing some bigger deals here and there. But we are focused on the C&I business because of what it does for the overall relationships we measured the success of our business deposits last year versus our loan growth and report that we raised $0.37 for each $0.37 in deposits for every dollar that we lent out. Which is a lot better ratio than raising $0.10 for every multifamily or commercial real estate that we lent out. So we are happy with the level of C&I loan growth and the relationships that are coming as a result of it.

[Jared Shaw:]

So as we look out over the coming quarters, should we expect to see multifamily really reach a plateau here or what's the thought for future growth for multifamily here?

[Domenick Cama:]

Yes. Multifamily loan growth is still robust. In terms of the component of our balance sheet that it comprises, it is starting to get towards the upper end of the ratio or the percentage of the loan portfolio that we would like. So we are looking at how much more growth we will look at there and obviously trading off C&I loan growth or multifamily growth in the future will be something that we will take a look at. But in terms of saying to you that we are going to stop multifamily loan growth, don’t misunderstand, we like multifamily. We think it's going to be the biggest asset class in our overall loan portfolio but we are focused on making sure that we diversify the loan portfolio so that we are not completely dependent on it.

[Sean Burke:]

Jared, our average loan in the multifamily portfolio is less than $4 million and in the business lending side, that $1.5 billion that we have, the average loan is less than $1 million. So a lot of it is blocking and tackling, good relationships and we are not out there putting lumpy loan. I mean we have a couple larger loans but it's really expanding our customer base.

[Jared Shaw:]

Okay, thanks. And then on the expenses, Sean, I think I missed the, what you had said about the, maybe onetime expenses in third quarter associated with the systems conversion? Or what maybe a better way of asking this, what's a good run rate for expenses now that we have the systems conversion behind us as we look into the end of the year.

[Sean Burke:]

Yes. We think that number, Jared, a good number to use is $84 million to $85 million.

[Operator:]

And our next question comes from Collyn Gilbert from KBW. Please go ahead with your question.

[Collyn Gilbert:]

Just want to talk a little bit about the loan sale that you guys did this quarter. Just the timing again on it. Like when in the quarter it was, what the yield was on it and then sort of what your thoughts are going forward on additional sales.

[Domenick Cama:]

The loan sale happened the last day of July, I believe, somewhere towards the end of the month in July. In terms of the balance, it was about $350 million portfolio with a weighted average coupon of about 3.75. So in terms of the reasons though, Collyn, they were two-fold. One, as you know we have been focused on reducing our exposure to residential assets and so this partly accomplished that. And second is, we continue to manage our loan to deposit ratio and wanted to make sure that we had enough liquidity to continue to fund the commercial portion of the balance sheet throughout the rest of the year.

[Sean Burke:]

Yes. Those loans were classified in loans held for sale at June 30.

[Collyn Gilbert:]

Right. Okay. And so future sales, is it more kind of opportunistic as you see the funding needs or how are you thinking about future sales?

[Domenick Cama:]

We, in looking at the residential portfolio, it has now come down to about 31% of the overall loan portfolio which is getting close to our target of where we want that asset class to be. So we are not in the market for selling more loans out of our residential portfolio but we maybe opportunistic at times but there is no plan to sell more out of that portfolio.

[Collyn Gilbert:]

Okay. That’s helpful. And then just tying into that. On the loan yield, it held up well this quarter. I guess I am a surprised by that. Any specific things going on there and excluding the prepays, I guess. I mean do you think that that’s kind of bottomed at this point?

[Sean Burke:]

I think it was, the mix of loan growth, there was more CRE than multifamily growth for the quarter. And CRE has a high yield, about 25-40 basis points than the multifamily product.

[Collyn Gilbert:]

Okay. That’s helpful.

[Domenick Cama:]

Collyn, and also, I don’t know, did you say you are excluding prepayments?

[Collyn Gilbert:]

I was. I thought -- yes. Okay, and then...

[Domenick Cama:]

It actually was a strong quarter for prepayments also. So, again, I am not sure if you have got it all out but it was a strong quarter. Stronger than normal for prepays.

[Collyn Gilbert:]

Okay. I will make sure of that. And then just on the -- how you are thinking about kind of deposit costs from here. I mean there was an uptick, I think across most segments this quarter. Is that going to continue -- that’s just kind of how you are balancing so the need for promotional rates with trying to keep those costs in check?

[Domenick Cama:]

Yes, Collyn, most of the costs came through the CD line item. We did run some successful campaigns through the year and it's been done in an effort to manage that loan to deposit ratio again. And I want to be careful about the way that I say that. I mean it's not so much that we have panicked here about the loan to deposit ratio, it's more about trying to keep that loan to deposit ratio around the 125% level. We have been trying to keep it there. We are probably going to see deposit cost creep up a little bit more but I would say there is probably a quarter left of that and then we will stabilize going in to 2016 because we have a slew of branches that we expect to open in 2016.

[Collyn Gilbert:]

Okay. That’s helpful. And then just one final question, Kevin, for you. You kind of indicated in your opening comments, conversion is done. You would be ready for M&A. Can you just give us an update on how you are thinking about M&A, especially we have seen some large deals obviously go off in the market. Would you sort of increase your appetite for a larger transaction or are you still thinking kind of smaller fill-ins and I will leave it there. Thanks.

[Sean Burke:]

No, we would look at a larger transaction. Certainly one that could be transformational. But really if you look at the last eight transactions that we did, they were great singles and doubles. We don’t have the advantage of the MHC now but certainly those that are, where we see opportunities to provide liquidity, opportunities where maybe we can do a better job in enhancing the franchise, we would certainly look at any type of deal that would be accretive and helpful to our long-term franchise value.

[Collyn Gilbert:]

Is there one that would just -- yes?

[Domenick Cama:]

No, Collyn. Obviously, with all those things being said, we certainly are mindful of the metrics involved in -- think about what the dilution would be to tangible book and what the earn back would be.

[Collyn Gilbert:]

Okay. And is there a size that would be just, just to be too big for you guys to absorb?

[Domenick Cama:]

You know at $20 billion, I would say another $20 billion would be, you know, hard for us to absorb. But we certainly would look at a institution that could be anywhere in the $8 billion, $12 billion range.

[Collyn Gilbert:]

Okay. That’s great.

[Kevin Cummings:]

Collyn, I would also add, the size maybe dependent on what kind of business model and the location of the franchise. And if it's a similar type of model to ours than I think the [after sight] [ph] would be stronger and we would have more confidence doing something like that.

[Operator:]

Our next question comes from David Darst from Guggenheim Securities. Please go ahead with your question.

[David Darst:]

Just in reference to your comment about branch opening plans for 2016, can you give us the number and then the timing? And then just kind of the expenses that we should think about?

[Domenick Cama:]

Yes. We plan to open somewhere around 12 to 16 branches and the timing really is spread over the whole year. We have a bunch of them scheduled for the second quarter of 2016. It's a little more difficult to open branches in the middle of the winter so we kind of hold off on opening them then. But I would, David, spread those costs over the full year.

[David Darst:]

Okay. And then, I guess with that you will be running deposit campaigns as well, so that might pressure the cost of funds with the growth in deposits if that occurs.

[Domenick Cama:]

Well, it could. But let's recognize that the deposits that come into the branches initially, you are not looking at big, big dollars coming in and any campaigns that we run, I am hoping would be offset by the growth in our C&I deposit business.

[David Darst:]

Okay. And then just the average deposit growth this quarter. Was any of that related to brokered CDs?

[Domenick Cama:]

Very little. I would say brokered CD growth was about $30 million for the quarter and the rest of it really -- the majority of it came in the CD line item.

[David Darst:]

And then, I guess, I know training was a big focus for you earlier in the year relating to the core systems conversions, upgrading the product set. Should we begin to see an impact on either retail, fee income, or other aspects from that in the fourth quarter and first quarter.

[Domenick Cama:]

I just went through that with the guy who runs that group and we are probably looking at maybe some pickups there in the first quarter of next year. We are still kind of getting through the core conversion, understanding its benefits from the cash management side. And when I look at where fees were quarter-over-quarter from service charges, we were about flat. Maybe off about $100,000 or so. So I would think that we could start to see some minimal impact or pickup in service charges and fees sometime in the first quarter of next year.

[Operator:]

Our next question comes from Dave Rochester from Deutsche Bank. Please go ahead with your question.

[Dave Rochester:]

So Dom, back on the expenses, your comments on the branches. Can you just give us some, maybe parameters for expense growth that you are thinking about right now versus the 2015 levels? Should we be thinking about maybe mid-single digit growth? Would it be higher than that, lower than that? Just trying to frame it?

[Domenick Cama:]

Yes. I would use a lower percentage, say single digit but probably somewhere in the middle. And only because, Dave, when you look at the expenses that we incur for opening branches, they are obviously amortized out over the term of the lease. So even if you said that I am opening 16 branches, that’s at the high end and that’s a million dollars per branch at $16 million amortized over a 15-year period. It's not a big, big hit to the expense line. And part of this, it's not just on the retail side, we are continuing to make investments in people on the commercial real estate side. We are going to be opening up a loan production office out in Long Island. So there are continued investments. But we can manage those investments going forward.

[Dave Rochester:]

Okay. Great. And then just one on the credit side. How do you guys think about the reserve ratio going forward? It's seems a little elevated. It was down a little bit this quarter. Do you think you can continue to run that down as you grow the loan portfolio?

[Kevin Cummings:]

Actually, if we had the loans held for sales in the second quarter, it was flat this quarter at 133 because we pulled out the loan sale out of the numbers at June 20. So it had been flat. It's getting more and more difficult because we were kind of high compared to peer group and our charge-offs history is changing, is improving versus what it was 36 quarters ago. So we will do what we can to manage it in a prudent manner.

[Domenick Cama:]

And, Dave, let's not forget our C&I portfolio is a different risk asset for us and it's one that we, the loans are not seasoned and it's just one that, it continues to be riskier than traditional real estate. So we have to be careful, as Kevin said, we will continue to manage it and understand the differences between the different types of loans that we put on the balance sheet.

[Dave Rochester:]

Yes. Makes sense. Thanks. And then just one last one, a housekeeping item. The tax rate next quarter and the next year, it sounded like that might go up a little bit maybe from where it was before. Can you just talk about that?

[Sean Burke:]

Yes. So for the rest of the year we are targeting 37% into the fourth quarter, through the fourth quarter. But in 2016, we do expect that to ramp up to around 39%.

[Operator:]

Our next question comes from Matthew Kelley from Piper Jaffray. Please go ahead with your question.

[Matthew Kelley:]

Just a quick question on your securities book, up about $0.5 billion in terms of total balances. Do you anticipate continuing to add to the size of the securities book over the course of the next year? Is it going to kind of settle out on that $3 billion level?

[Domenick Cama:]

Matt, we target the securities book to be approximately 15% of the size of the asset, of the balance sheet. So that’s really, you can look at that correlation. That’s the correlation. There is no magic about making a bet on rates going one way or another and buying more bonds. We buy low risk, short duration bonds for liquidity purposes and target 15% of total assets as the number. So any increase that you see in the securities book is directly correlated to the growth in the balance sheet.

[Matthew Kelley:]

Got it. And then just going back to the previous question about reserve levels and provisioning. At what rate do you guys provide on new commercial real estate growth? What's the incremental provision you are putting up against that?

[Sean Burke:]

Commercial real estate. Probably, one-tenth, let's call it. Somewhere in that area.

[Matthew Kelley:]

Okay. Got it. And then going back to the M&A discussion as well. Obviously a big asset traded away in your marketplace. How would you characterize the level of conversations and the number of banks being shopped in your market today versus over the summer and spring for smaller type of deals that you may be able to act upon?

[Domenick Cama:]

I would say that the activity has picked up somewhat from the spring.

[Matthew Kelley:]

Okay. Got it. And have you seen a commensurate move in expected pricing or has that stabilized?

[Domenick Cama:]

Yes. A couple of deals recently that we looked at had higher expected prices than we thought they were. But I mean obviously nothing happened. But, yes, I think we have seen prices go up a little bit or price desire go up a little bit.

[Operator:]

Our next question comes from Laurie Hunsicker from Compass Point. Please go ahead with your question.

[Laurie Hunsicker:]

Just to follow back up on the question of M&A. As we sort of look at ISBC growth over the next two or three years, can you help us think about how you would approach tangible book dilution cumulative with whatever size deals you are doing. Whether it's several small ones or one large one. And then what you are looking for in terms of earnings per share, hit that earnings parameters and also breakeven. Thanks.

[Domenick Cama:]

Laurie, you are breaking up a little bit but I will try to repeat the question. You want to know how we consider in doing deals, large versus small. What would be our appetite for dilution and earn back? Is that the nature of your question?

[Laurie Hunsicker:]

That is correct, yes.

[Domenick Cama:]

I think, first, we should say that we try to target earn back somewhere between, call it two years to about five years. Anything above five years starts to turn our stomach a little bit. But having said that, you can back into the dilution that would come with that. If I had to think about what a fair amount of dilution or what level of dilution we would have, it's probably, I am going to say mid-single digits. Somewhere around there. But again everything is based on earn back and so we will back into dilution trying to stay within our five year timeframe.

[Kevin Cummings:]

Yes. And I think that one thing that we consider is our stock buybacks. And our stock buybacks are, over the longer term, have dilutive effect. So when you look at that earn back, you have to make an assumption looking at the pro forma impact of the company in relation to the ongoing stock buyback program that we have. And that certainly shortens the earn back period and makes a lot deals very attractive.

[Operator:]

Our next question comes from David Bishop from FIG Partners. Please go ahead with your question.

[David Bishop:]

In light of the two deals sort of occurring in your neighborhood there. Does that make you consider maybe getting more aggressive potentially looking at adding personal, any lending teams, any talent out there that you maybe have had your eye on and could get an opportunity here to take advantage of the disruption over the next coming quarters.

[Domenick Cama:]

Yes, absolutely. Specifically when we think about what our strategic plans are, and that is to grow in the Queens and Long Island market, we look at the latest deal as a real opportunity. I mean we have a number of branches scheduled to open out on Long Island over the next six to eight months. And so we are going to be looking for getting those branches set up in a position to start to take advantage of any disruption in the market that could come as a result of the latest transaction that was announced. In terms of lending teams, neither one of those parties has a significant business that’s related to where we want to grow. I mean obviously we do multifamily like they do. But our real focus is to continue to grow our C&I lending teams and truthfully as we grow and become a more prominent player in the market, a lot of C&I lenders or lending teams are paying attention and want to be part of a bank like ours where they know they can really make a difference in terms of our business going forward.

[David Bishop:]

Got it. And then sort of circling back to the multiple family concentration. I think we have seen some of your peers harvest some gains packaging up some portfolios to sell. Is that something that you all could contemplate next coming quarters.

[Domenick Cama:]

Yes.

[David Bishop:]

Got it. Any sense of a size, how big you might look to move in terms of a potential sales or just dependent on pricing-

[Domenick Cama:]

No, not really. Again it's another way to manage the balance sheet and with no concrete plans to do anything like that. It's just simply we have to consider our alternatives in every aspect of our assets and that’s certainly one of them. But no specific discussion recently on selling anything out of the portfolio.

[Kevin Cummings:]

Yes. [Joe Orfus] [ph] runs our multifamily business and the entire CRE business over in New York. And comes out of some Wall Street experience. He has a lot of experience in that area and is certainly a great resource to us.

[David Bishop:]

Got it. And then one final housekeeping question. How much left under the buyback authorization?

[Sean Burke:]

We have got, on the second buyback we have got 25 million shares remaining to buy back.

[Operator:]

And our next question is [Steve Comington from Steven Capital] [ph] Please go ahead with your question.

[Unidentified Analyst:]

My questions were asked and answered. Thanks.

[Kevin Cummings:]

Thanks, Steve. That was helpful. Well, I would like to thank everyone for participating on the call. It was a very strong quarter for Investors Bank and we look forward to finishing up 2015 with a strong fourth quarter and I want to thank you all for participating. Have a great weekend and have a good Halloween. Be well. Thank you very much.

[Operator:]

Ladies and gentlemen, that does conclude today's conference call. We do thank you for attending. You may now disconnect your telephone lines.