Good morning and welcome to the Everest Earnings Conference Call. I would now like to turn the call over to Jon Levenson. Please go ahead.

Good morning, and welcome to the Everest Re Group Limited 2022 first quarter earnings conference call. The Everest Executives leading today's call are Juan Andrade, President and Chief Executive Officer; Mark Kociancic, Executive Vice President and Chief Financial Officer. We are also joined by other members of the Everest management team. Before we begin, I will preface the comments on today's call by noting that Everest SEC filings include extensive disclosures with respect to forward-looking statements. Management comments regarding estimates, projections and similar are subject to the risks, uncertainties and assumptions as noted in these filings. Management may also refer to certain non-GAAP financial measures. These items are reconciled in our earnings release and financial supplement. With that, I turn the call over to Juan Andrade.

Good morning everyone. Thank you for joining us today. Everest is off to a strong start in 2022 with first quarter results to reflect our relentless focus on profitability and margin expansion. Excellent performance across our underwriting businesses and investments contributed to a $406 million in net operating income and a 16.2% annualized operating ROE. Our discipline and resilience standout in a challenging and complex environment. We are a source of strength and stability in unprecedented times. The world is facing distorted volatility with the effects of the pandemic compounded by a web of macroeconomic, geopolitical and societal issues. Adding to this are climate-driven industry catastrophe losses. The first three months of 2022 were active, with estimated economic losses over $30 billion and insured losses over $14 billion. Significant events occurred in the quarter in Western and Central Europe, Australia, Japan, and the United States. The historically quiet first quarter, has not been quiet for the past six years. According to the National Oceanic and Atmospheric Administration, January, February, and March of 2022 were each in the Top 10 warmest months in the official observed record dating back to 1880. Amplifying these challenges is the brutal Russian invasion of Ukraine, and the upheaval, death and destruction facing the Ukrainian people. It is heartbreaking to witness the inhumanity and the cruelty that is unfolding in Europe. This war destabilizes global economic systems and financial markets and threatens democracy, peace and decades long efforts towards share prosperity, ever stands in solidarity with the Ukrainian people. As underwriters, the protection and stability we provide has never been more important. This turbulent time is when our unwavering focus on consistent disciplined execution is most important. Our focus was evident across our underwriting businesses in the first quarter. Both performed well and continue to lead…

Thank you, Juan and good morning everyone. Everest had an excellent start to 2022 as we continue to make progress towards the objectives in our three year strategic plan. We had strong underwriting income, and another good quarter of good investment returns, leading to a 16% annualized operating return on equity. Most of our underwriting businesses and our investment portfolio contributed to the strong result this quarter. Now for a review of the first quarter results. For the first quarter of 2022, Everest reported gross written premium of $3.2 billion representing 9% growth over the same quarter a year-ago. By segment, reinsurance grew 6% to $2.2 billion reflecting a 32% year-over-year growth in casualty, and an 11% reduction in property. Insurance grew 15% to an even $1 billion with notable growth in specialty casualty offsetting intentional underwriting actions to reduce exposure in property and optimize the profitability of our portfolio. Everest reported net income of $298 million equal to $7.56 per diluted share and a total shareholder return of 8.6%. On an operating income basis numbers are $406 million for the quarter, and $10.31 per diluted share, with an annualized operating return on equity of 16%. Included in net income and consistent with the 5% reduction in the S&P 500 during the first quarter, Everest experienced $109 million after-tax unrealized loss on our common equity portfolios. Note that these are not realized losses rather fair value declines, which flow through net income, thus lowering our total shareholder return during the first quarter. We incurred $115 million of pre-tax CAT losses net of reinsurance and reinstatement premiums in the quarter. The Australian floods in the first quarter represent the largest flood loss on record for the Australian insurance industry at just over $3 billion U.S. Our CAT provision includes $75 million…

Thanks Mark. Operator, we are now ready to open the line for questions. We do ask that you please limit your questions to two or one question plus one follow-up and then rejoin the queue if you have any remaining questions.

Thank you. [Operator Instructions]. Your first question comes from Yaron Kinar from Jefferies. Please go ahead.

Thank you. Good morning. Mark, maybe going back to your comments on the investment portfolio. So you gave us the new money rate, where do you see the current fixed maturity yield and what -- how much of the portfolio turns over in the given year?

So I say going -- thanks Yaron. Going back to the reinvestment rate, we're roughly at 3%. I see that increasing over time certainly with pressure upwards on interest rates; I see that only going up for us. On a current basis, the market value or the market yield is greater than the core and so there's upward momentum on that side. In terms of the portfolio itself I'd say roughly one-ninth to one-eighth converts to cash for 2022 and then when you combine approximately we would expect something around the $3 billion operating cash flow level for the year that's a significant amount of investable funds. And I'd also make reiterate the point that I made in my opening remarks that we've got roughly 20% of the fixed income portfolio in floating rate securities which will help that reinvestment yield.

Thank you. That's very helpful. And then my second question maybe for Juan, in your prepared remarks, you talked a little bit about the cat loss this quarter. Can you maybe help us think about where, how you see catastrophes in this particular first quarter relative to expectations for the first quarter? Were they above normal, in line?

Yes, Yaron. Thanks for the question. As I said in my prepared remarks, it was an active quarter, right, and we did end up as an industry having over $14 billion in cat loss. That translates to about $30 billion in economic loss. So I would say this is elevated for first quarter. And as I said, look, I looked at the data going back a number of years and all of this. And as I said that first quarter that typically is quiet hasn't been quiet right. So I would expect that $14 billion is definitely more active than what you normally would see.

Your next question comes from Joshua Shanker from Bank of America. Please go ahead.

Yes, thank you. Looking at pro rata casualty business, prices are up for the underlying business from where they were a year-ago. But ceding commissions are also up, is the profitability between those two timeframes basically neutralized by the ceding commission. And has the ROI and capital being put into that part of the reinsurance business going up the same or is it lower than it was a year-ago?

Yes, Josh. This is Jim Williamson. Thanks for the question. And it's a good one. Look, what we've seen and what we've been reporting is two factors that you described. There's a tremendous amount of margin creation happening in the primary casualty market driven by rates, but also by changes to limit re-underwriting, et cetera. And that's definitely playing through. And we're seeing that in our data. At the same time, cedings are looking to recapture some of that margin creation, the increased ceding commissions, and we've seen that dynamic play out. And what I would tell you broadly speaking, really only to Everest portfolio, our view is that trade is resulting in improving economics for us, meaning the improvement in the underlying market is exceeding growth rates and ceding commissions. Now, that's not true on every deal across the market, which is why the thoughtfulness and the selectivity of our underwriting is so important. And we measure each and every deal. And what we're looking for in this environment is margin expansion. And in those situations, where we see ceding commissions running ahead, and deteriorating margins, we're choosing not to participate. I would say broadly at this point, overall it's still a pretty rationale market out there that way. And so we see some real good growth opportunities continuing.

And then on the property and property/cat side, if you lower your volatility to cat exposures, but the capital that you are, isn't really being freed up because of that capital, obviously you're using for other items. Isn't there a possibility that the capital charges are low for the additional business, that you might be leaving money on the table as you trade volatility? I mean, I guess maybe not referring but that seems like you did that, you could use $1 of capital that's associated with casualty business, also to underwrite property and that yes, you've lowered your volatility, but you've also lowered your long-term earnings power.

Yes, Josh, it's Jim again. Look we have a very robust capital modeling and risk management process that we operate at the Group level and we are really evaluating capital deployment across all of our lines at a very granular level between both reinsurance insurance and our investment portfolio. And we certainly take into account, total capital usage and optimization when we're making those decisions. So when we talk about deploying relatively more capital to casualty versus property, we're accounting for the fact that you do get diversification benefits, and you do get opportunities to deploy capital, in some cases, multiple areas. And so we're not seeing any area in the portfolio where we're failing to deploy capital at the most efficient level, when you look at the growth.

Josh, it's Mark. Let me just add one remark to that. I think in addition to what Jim said, it's really more of a marginal movement. What we're seeing here with slightly reduced property/cat and an expansion on the casualty side. So as Jim pointed out, the portfolio is still very well diversified and we're very focused on accretive return expectations for everything we write in excess of our TSR. So for us, it's still highly efficient to proceed in this way.

Your next question comes from Ryan Tunis from Autonomous Research. Please go ahead.

Hi, guys. Good morning. I was hoping on the insurance side, you can talk a little bit more about some of the re-underwriting actions you're taking. And whether or not we expect that to potentially impact the growth rate in that segment over the remainder of the year?

Yes, Ryan, it's Juan Andrade. And let me start. And then I'll ask Mike Karmilowicz to join. Look, I think the first point is, we still feel very bullish about the growth opportunities in insurance, as I said in my opening remarks. I think in some ways, we're only scratching the surface of the potential that's out there. And it's one of the reasons why we now have international expansion underway and frankly, while we continue to gain traction in the U.S. market. We're good underwriters. And what you saw us do this quarter is what any good underwriter does. You're looking at your portfolio, you analyze it. In some cases, there's going to be things that you like, and then have a good economic return and there's things that we don't like. And so therefore, you exit them, because we see better opportunities to deploy capital and move in that direction. So if you think back at that 15% growth rate for the quarter, some of that was impacted by the fact that we did reduce volatility as well in the insurance side similar to our strategy in reinsurance. And the other part of it was driven by one specific account that we decided to non-renew and move away from it. But that's the general theory. But we do feel very bullish about the growth rates in insurance. And I would ask Mike to maybe jump in and add some additional color.

Sure. Thanks, Juan. Thanks for the question. A few things I would say. First off, as you know, our focus is basically always has been focused on underwriting with underwriting companies as Juan pointed out, and I would reiterate to you guys we've had 29 straight consecutive quarters of growth, most of those sales have been double-digit. We are very focused on cycle management, you see us talk about it with workers comp. We've taken actions to Juan's point on property in other areas. But I don't see this anticipating slowing us down. We see ample opportunity in the marketplace. We are well positioned with a lot of capital and a lot of trust. And so we will continue to execute that and where we see opportunity, we'll take advantage of it. But we don't foresee any of that changing anything we do every day.

Got it. Then on the reinsurance side, obviously a good margin quarter there. Just maybe a little more insight into, what specifically drove that. Was it a lower loss pick, as you're recognizing for portfolio's less volatile and better underwritten, or was there anything one-time in nature that helped?

Sure, Ryan, this is Jim Williamson to give you some of that detail. Look, I think a lot of this is the result of some of the conversations we've been having with you over the last few quarters, which is we've seen very consistently, strong margin improvement in the underlying primary casualty market. That's rate that's limits, that's terms conditions, et cetera. And we've been very prudent in how we've revealed that improvement in our loss picks. And we've said, we've waited, and we've been waiting for that data to prove itself to start to see it in our numbers, et cetera. And so I think what you're seeing this quarter is the result of that prudence. And it's the result of that underlying improvement. And so on a year-over-year basis, we have seen an improvement in casualty pro rata in particular, and underlines as well, that have allowed us to basically settle on lower loss picks for those lines. We're still being prudent. We're still being disciplined. And we're still not taking full credit for the trends we see. But we are starting to flow through some of that margin. To give you a sense of quantum. On a year-over-year basis, we saw about a 140 basis point of margin improvement due to lower expected loss picks. And that was then partially offset by the change in mix, because if you look at Q1 2021 versus 2022 there is a dramatic change in our mix. We were about 60:40 property casualty this time last year. It's closer to 50:50 now, and that's certainly an offsetting factor as casualty carries a higher loss pick. But I think all of this is a result of the market trends we've been discussing. And we see those trends continuing as we head into the year and we continue to see pricing in excess of even elevated loss trends.

Thanks. I really appreciate that level of detail, Jim. Congrats.

Thanks, Ryan.

Your next question comes from Elyse Greenspan from Wells Fargo. Please go ahead.

Hi, thanks. So my first question, if I look on a Group consolidated basis, right your -- the underlying combined ratio actually did deteriorate a little bit year-over-year. So I was hoping you could just give us a sense of just kind of an outlook for the accident, your ex CAT combined ratio. And then it seems like a big chunk of that deterioration wise was because the acquisition ratio ticked up around 120 basis points. Can you just give us a sense of the outlook for that acquisition ratio over the balance of this year?

So Elyse it's Mark. A few points that you asked there. So first of all, let me just start with the CAT and then we'll get into the acquisition ratios. On the CAT, I made this point last quarter that our expectations for 2022 with the CAT ratio for the Group of less than 6%. And so that's, I think, a meaningful reduced expectation versus last year, and definitely on a historical basis. So there is some reduction that that's expected there. On the acquisition ratio, I would say, a couple of points. We have, if I start with reinsurance. I would say it's broadly in line with last year, probably a little bit higher, you're seeing us trend at 24.9% here. Last year, I think we were in the low 24. That's principally because of mix of business. I did mention some of the one-offs we had in Q1 last year that would drive it. On the insurance side, we still see a declining net acquisition ratio. And that's a combination of things. You've got both ceding commissions coming in on certain lines of business, depending on the mix. And then just lower broker commissions versus our expectations on some of -- some other lines as well. But I'd say there's probably downward pressure in general on the primary side for acquisition ratio.

Okay, great. And then my second question, on the reinsurance side, a little bit of a follow-up to Ryan's question, he talked about right, reflecting, just more of the improvement on the casualty side. And as we think about the mix shift to casualty and we also think about, like the impact that that can have on your margins, as we're thinking about going forward. I'm assuming that you guys still see right, the line of sight into kind of hitting, getting that segments that 91% to 93% combined ratio target.

Yes, Elyse this is Jim Williamson. We would definitely reiterate our commitment to that target, and we're very confident in it. And it's a combination of factors. One, while casualty does carry a higher attritional loss ratio, and a slightly higher attritional combined ratio. Those numbers are coming down year-over-year, you see the improvements that we were talking about earlier flow through the book, and we began to reflect that in our loss picks. And while I cited a 140 basis point improvement year-over-year to our pick based on improved loss picks. It's higher than that for casualty. And so we're seeing that happen. And so that's critical. And then the other part, when you think about the total combined ratio to what Mark just said, which is for the Group, our targeted CAT loss ratio went down and that's also true of reinsurance. And so, when you ladder all that up, our expectation is, certainly that those won't be headwinds to achieving our goals. We're very confident on that. The other thing I would just say, and this is particularly important, I think, as we roll through the summer. We're still very much a leader in the property CAT market. And we take meaningful lines. We've been doing that in improved economics that 401 as Juan indicated in his opening remarks. We were able to take less risk by any measure, whether it's PML, AAL, et cetera. But we're going to getting paid more profit dollars, more expected profit dollars will flow to the bottom-line. And that will certainly have an impact on our traditional and ultimate combined ratio. And we see good opportunities through the rest of the year to continue to execute that strategy. So I think all of that comes together to give us a lot of confidence in the targets we set out.

And your next question comes from Mike Phillips from Morgan Stanley. Please go ahead.

Thanks. Good morning everybody. Juan, given the pretty positive comments and kind of trajectory of insurance segment, margins expanding and rates still at a loss cost trends. What's your appetite for kind of keeping more of the gross business over the next couple of years in the Insurance segment it's been pretty consistent for quite a while. Any thoughts on kind of moving that up over the next couple of years?

Yes, Mike, thanks for the question. And it's obviously something that we look at on a pretty regular basis, particularly as we go through all of our ceded reinsurance renewals on all of this, and we have made changes in our different treaty protections, et cetera, et cetera. The way we tend to look at this from a philosophical standpoint is, as we get additional rate, additional terms as we continue to feel very good about our own underwriting, then by definition, we would want to keep more of that net with a company and you see us doing that in certain lines of business. But we balance that against the volatility and the appetite that we want to have on any particular line of business at the same time. So the short answer is we are constantly making tweaks to that depending on our line of business, depending on the geography, et cetera. But we feel pretty good about where we are right now. And I would invite maybe Mike Karmilowicz to add a little bit of color as well.

Sure, thanks. Yes, I would only add to that, that we continue as we continue to scale up a lot of our existing businesses and get more critical mass. To Juan's point you'll see his take on that we've done that already in a few different pockets. And I see that continuing as we continue to grow and gain scale.

Okay, thanks. Thanks for that. And then sticking with the insurance, Juan, you talked about, again rate over loss trend, I think you said 9% rate ex-comp ahead of kind of the long-term loss trends, can you share with us how you're viewing that long-term loss trend, what number you're looking at there? And how is that changed given recent times and the world in increased risk? What do you use in for your long-term loss trend right now, is that 9% range?

Yes, thanks Mike. Good question. Look, we feel pretty good about where we are, as I said that, I would actually say that rate is outpacing expected loss strength comfortably for us across the board. Right, so you're right, excluding comp, it's a 9% increase in rate that we saw in the quarter. And it's hundreds of basis points lower on that, where the trend would be basically. I would tell you that we have consistently updated our loss trends assumptions, really since 2019, 2020, 2021 upward reflecting higher loss trends in our pricing models and exit year loss trends. So we monitor that pretty closely. But I can tell you, we're comfortably above loss trend right now really, across all lines of business, with the exception of workers comp, which is the only one that I flagged earlier.

Juan, sorry just to jump in and make sure I understood you. You said something about hundreds of basis points. Can you say that again of what you meant there?

Yes, so look if you're running at a 9% increase in rate, our loss trend is lower than that by several 100 basis points, basically.

Your next question comes from Brian Meredith from UBS. Please go ahead.

Hey, thank you. Juan, I was just curious, I appreciate the color you gave on Russia, Ukraine exposure. And there's a lot of uncertainty, I know right now and your exposure gets diminished. But I'm just wondering, as you think about your portfolio business, where are you kind of looking at where you're focused at? Where could there potentially be some exposure?

Yes, no absolutely, Brian, I'm happy to give you a little bit more coloring and context and all of that. Let me reiterate though, something that I said in the earlier comments. We don't see this event as changing our profit objectives for the year. And I think that's probably the most important thing to take away. The other part of that is any loss estimate that we can give you or frankly, any of our competitors give you at this time is really purely speculative, right. And the reason for that is the worse ongoing physical damage and economic disruption are uncertain. It's changing in the investigation application of key coverage is still in its infancy, right. So that's essentially kind of where we are with all of this. As we have done that very detailed assessment of coverage that I talked about earlier in my remarks, I can tell you that for instance, on the primary side on insurance, we would have close to zero exposure in any event, very, very little. On the investment portfolio, Mike I'm sorry, Mark certainly talked about that. And you saw the impairment that we did in the quarter as well. And on the reinsurance side, we would have limited exposure and the way I referred to that is, we have very few like one or two former Russian scenes that are no longer clients of ours. So that's a very little exposure from that perspective. And then when we look at sort of lines that could be exposed to all of this, you certainly look at the some of the aviation lines that could be exposed. Although that's a relatively small business for us in the quantum of overall reinsurance. You could also look at potentially some marine lines that could be exposed. You could look at some trade credit, political risk type stuff. But we're much less concerned about that. And then you would look at some of the political violence covers as well. But we're also relatively small on that. So let me ask Jim Williamson to actually even go deeper into that, and just give you a little bit more granularity.

Yes, sure, Brian, this is Jim. And I'll repeat a little bit of what Juan said and give you a little bit more detail. Because obviously, these topics have been heavily covered, there's a lot of speculation happening in the media around potential losses. On an aviation basis as Juan mentioned a relatively small, there's one small part of our book. There is significant uncertainty around the extent of potential loss, in terms of actual units of aircraft exposed and that numbers been changing. The application of coverage notwithstanding some of the posturing that you've seen, I think there are real questions related to which coverage will apply, and to what amount. We've also taken very significant actions in our own aviation book over the last two years, to position it to withstand shock losses in a much better way. And so that gives us a lot of confidence. On a marine basis, particularly given when you look at haul, we do have, and we know that there are trapped vessels in the Black Sea, for example, there's a lot of uncertainty about -- around the size of those vessels, whether they'll ultimately losses on those vessels, or on land cover, cold war et cetera, can also be in the marine area. There are properties in the Ukraine, obviously, that could potentially be exposed. As we've evaluated our book though, we don't really have concentrations of property in the area where the conflict is ongoing. And so it's both uncertain, but also at this point appears very manageable. On a trade credit and political risk basis I think our teams have done an outstanding job of managing that exposure. On the terms of those contracts, as you likely know give primary insurers a lot of options when there's dislocation in the market, there's been a lot of cancellation activity and so that exposure, that potential exposure has been shrinking by the day. We've also seen a lot of payment activity continuing in those contracts that haven't been canceled. So that's a good sign. And then, lastly, on political violence, again, that'll probably apply primarily to property exposures. In the Ukraine, there's a time limit on those covers. And again, as we've evaluated potential exposures, we don't have heavy concentrations in the major cities that have been subjected to the conflict in a meaningful way. We haven't had any reported losses other than one, which was less than $300,000, of potential loss from a political violence perspective. So you know, looking very, very manageable at this point, and tremendously uncertain. And so we're just continuing to have dialogue with our team. We're assessing it and we'll keep a very close eye on it.

Thanks, that was really thorough. And then Mike, my second question, I'm just curious on your stock actually had a point this quarter where it's dropped pretty significantly, and I was little surprised that we didn't see more share price -- buyback in the quarter. Maybe just remind us kind of your thoughts on kind of capital here and Mark and kind of managing it? And do you have like, ability to kind of really go in the market and buyback some stock when we get this market volatility?

Yes, Brian. So let me start and then I'll ask Mark to add. So the short answer to your question is, yes, we absolutely have the capability to go in and do buybacks. As you saw us do last year as well. Frankly, our stock was trading at a pretty good level. During the first quarter, there certainly had a bit of a dip as the war started sudden and you saw us come in, and we did have some buying activity, even though it was relatively small. But when you think about how we think about capital management, that philosophy hasn't changed in from what we have been articulating. Frankly, since I've been the CEO of this company. And we reiterated on our Investor Day last year, which is our number one priority, really is to privilege our underwriting businesses, as we see accretive growth opportunities and everything that we have been sharing with you this quarter and in past quarters, is that journey that we have to continue to expand margins improve the underlying profitability of this company, and you've seen us do that. So from our perspective that really is sort of priority number one. Beyond that absolutely we will consider share buybacks. We will consider other things at the same time. But let me ask Mark here to jump in.

Brian, not too much more to add to that. Although I will say that we see excellent opportunities on organic expansion right now within both insurance and reinsurance. Doesn't mean we can't do both. But there's a really nice marketplace for us in our view. And so I'd say capital is really being privileged for that right now.

And your last question comes from Meyer Shields from KBW. Please go ahead.

Thanks. So I want to start with one question on reserving. And I'm not quite sure how to phrase this. But if we break down reserving in sort of like a mathematical analysis, and then the judgments associated with that, can you break down I guess, the absence of enormous or significant reserves development into those categories? Another way that it is, are there indications of redundancies, that you're just hesitant because of elevated risk? Or are the indications not there?

Sure, Meyer, it's Jim Williamson. Wanted to step back, just to reiterate our reserving process, which is very robust and has been strengthened meaningfully over the last few years. We're taking a very disciplined approach to reviewing all of our carried reserve positions every quarter. We've implemented a number of automated tools to allow us to do that. We are closely monitoring IBNR consumption at a very granular level across both reinsurance and insurance, by line, by accident year, et cetera. And then, of course, we have our ground-up reserve studies that were conducted, none were actually completed in the first quarter, but we will start getting completed reserve studies in Q2, and that's on an accelerated schedule, accelerated over last year, which was also accelerated from the prior year. So a lot of eyes on our carrier position. Now, when you look at you start slicing our IBNR, and our very reserved position in the all those pieces I described. You're clearly going to see movement on redundancies in some areas, deficiencies in some others, et cetera. But overall, I would reiterate what we've said in prior calls, which is we're very confident in the strength of our carrier reserve position. And we have seen no information, really, since the end of 2020. That would cause us to take any action, any meaning material action one where the other from a reserve change perspective. And so and that's certainly through this quarter. And so again, we'll continue to monitor it. And if that changes we'll certainly, you'll be the first to know.

Meyer, the other thing. This is Juan Andrade. The other thing that I would add to what Jim has just said is keep in mind the discussion that we've been having about rate in excess of loss trend. And we have been saying that very consistently, really, for the past three years, essentially. And so by definition, you are building margin, and you are extending margin there. As we have also said before, we haven't taken that to the bottom line mainly because of all the issues that we're talking about with regards to inflation and severity, and all these other things at the same time. But from our perspective, and as Jim alluded to in his answer to Ryan with regard to the casualty loss pick, we do look at this. And we do change it, we do tweak it right. So it's only a matter of time, as we get the data as we examine things as things season that you're going to start seeing that coming into the bottom line. So I think that probably gives you also a more forward perspective. And again, bring it back to the rate versus trend discussion.

Okay, that's very helpful. A second unrelated question, we're in an environment of at least, I think probably expected continued interest rate increases and your liability duration, have you set the mix towards casualty and also extending, when is the right time to really significantly increase your investment portfolio duration? Do you do it now; do you wait for further interest rate increases?

So it's Mark, Meyer. I think as long as we're broadly within alignment of asset and liability durations we're in a good spot. I don't think there's a lot of benefit when you look at where the yield curve is right now in terms of the short end and the flatness of really going long. So for us, it's really looking for kind of a mix of things. So you're obviously looking one, to match generally the duration of between or the ALM matching, in essence; two, yield credit quality, liquidity of the securities and the actual alpha you think you can capture in the securities that you're looking at specifically any specific asset classes. So we look at it probably more granularly. I wouldn't get hung up on for example; we got an asset duration of three, one this quarter and a liability of four. That yield curve is really not appealing to stretch it out for the extra basis points that we see.

And there are no further questions. At this time, I will turn the call back over to management for any closing comments.

Great, thank you for all your questions and the excellent discussion. I think as you can tell from our tone, we are optimistic about the opportunities before us. We definitely see a trajectory for continued growth and expanded profitability. We're continuing to build this company, accelerate the progress and create greater value for our investors, our clients in all of the markets that we serve. So thank you for your time with us today and we look forward to seeing you at the next earnings call.

This concludes today's conference call. You may now disconnect.