Essent Group Ltd. Price & Performance (ESNT)

Earlier today, we released our fourth quarter and full year 2024 financial results. Strong credit quality and resilience in the housing and labor markets continue to drive All interest rates remain a tailwind for persistency and investment income. Although mortgage origination activity remains below historical levels, we anticipate that home buying demand is merely being postponed given the level of rates and affordability. While there is always uncertainty in the economic environment, given the strength of our balance sheet and our buy manage and distribute operating model, we believe Essen is well positioned for a range of economic scenarios. And now for our results. For the fourth quarter of twenty twenty four, we reported net income of $168,000,000 compared to $175,000,000 a year ago. On a diluted per share basis, we are in $1.58 for the fourth quarter, compared to $1.64 a year ago. For the full year, we earned $729,000,000 or $6.85 per diluted share, while our return on average equity was Essent% As of December 31, our book value per share was $53.36 an increase of 11% from a year ago. As of December 31, our U. S. Mortgage insurance in force was $244,000,000,000 a 2% increase versus a year ago.

Our twelve month persistency on December 31 was 86% down about one point from last quarter on nearly 60% of our in force portfolio has a note rate of 5.5% or lower. Although persistency has likely peaked, we continue to expect that the current level of mortgage rates will support elevated persistence in the near term. Credit quality of our insurance in force remains strong with a weighted average FICO of seven forty six and a weighted average original LTV of 93% Essent. Credit performance in the fourth quarter primarily reflect both the aging of our portfolio and the typical seasonality of default behavior, Note, however, that credit performance for the fourth quarter so impacted by approximately 2,000 defaults in areas affected by Hurricanes Helene and Milton. In addition, we are monitoring the potential impact to defaults from the California wildfires Dave will discuss defaults and reserves in more detail in a few moments. On the mortgage insurance front, our industry remains competitive and strong credit guardrails remain in place. Driven by the underpinnings established by the GSEs after the global financial crisis, These guardrails combined with our SNedge credit engine enable us to selectively grow our high credit quality insurance with force while generating strong returns.

We are pleased with our position in the marketplace and the Unum economics that we are achieving on new business. As a reminder, we price for new business assuming a combined ratio of roughly 35% to 45% In the first quarter of twenty twenty five, we entered into two quota share transactions with a panel of highly rated reinsurers to provide forward protection for our 2025 and 2026 business We are pleased with the strong execution and remain committed to a programmatic range strategy, which helps to diversify our capital resources while seeding a meaningful portion of our mezzanine credit risk. At year end 2024, approximately 97% of our portfolio is covered by some form of reinsurance. Synery had another strong year of performance, writing high quality GSE risk share business while leveraging its fee based MGA services. SNRE ended the year with annual third party revenues of $80,000,000 while our third party risk in force was $2,200,000,000 Since 2014, S and Re has earned over $450,000,000 of net income from its third party business, and has contributed approximately $800,000,000 to Essent book value. Our title operations incurred a pre tax loss of approximately $21,000,000 in the prior year prior to corporate allocations.

We continue to maintain a long term view for this business. However, material impact on earnings over the near term. Cash and investments as of December 31 Essent $300,000,000 and our new money yield in the fourth quarter remained over 5% Essent. For the full year 2024, our investment yield was 3.7% compared to 3.5% in 2023 Essent. Net investment income was $222,000,000 in 2024 up nearly 20% from 2023 Essent. As of December 31, the carrying value of other invested assets is $34,000,000 and ever to date, these investments have created $81,000,000 of value. As of December 31, we are in a position of strength with $5,600,000,000 in GAAP equity, access to $1,600,000,000 in excess of loss range reinsurance and a PMIER sufficiency ratio of 178% Essent. With a full year 2024 operating cash flow of $852,000,000 our franchise remains well positioned from an earnings cash flow and balance sheet perspective. As a result of our strong financial performance and capital position, I am pleased to announce that our Board has improved an 11% increase in our quarterly dividend to $0.31 per share At the same time, our Board also approved a $500,000,000 share repurchase authorization that runs through year end 2026.

Now let me turn the call over to Dave. Thanks, Mark, and good morning, everyone. Me review our results for the quarter in a little more detail. For the fourth quarter, we earned $1.58 per diluted share, compared to $1.65 last quarter and $1.64 in the fourth quarter a year ago. Our U. S. Mortgage insurance portfolio ended 2024 with insurance in force of $243,600,000,000 an increase of $669,000,000 from September 30 and an increase of $4,600,000,000 or 2% compared to $239,100,000,000 at December 31, '23, Persistency at 12/31/2024 decreased to 85.7% compared to 86.6% at the end of the third quarter. Net premium earned for the fourth quarter Essent twenty four was $244,000,000 and includes $16,200,000 of premiums earned by Essent Re on our third party business, and $16,600,000 of premiums earned by the title operation. The average base premium rate for The U. S. Mortgage insurance portfolio for the fourth quarter was 41 basis points. And the average net premium rate was 35 basis points in the fourth quarter of twenty twenty four both consistent with last quarter. We expect that the average base premium rate for the full year 2025 will be largely unchanged from the fourth quarter rate of 41 basis points.

Consolidated net investment income for full year 2024 was $222,100,000 compared to $186,100,000 for the full year 2023 due to growth in the investment portfolio, and investing at higher yields than the book yield of our existing portfolio, Net investment income for the fourth quarter was relatively flat to the prior quarter. Credit performance for the fourth quarter was affected by defaults in areas impacted by Hurricane Helene and Milton. The provision for losses and loss adjustment expense on The U. S. Mortgage insurance portfolio was $37,200,000 in fourth quarter of twenty twenty four, compared to $29,800,000 in the third quarter of twenty twenty four and $19,000,000 in the fourth quarter a year ago. During the fourth quarter, total defaults increased by 2,533 which includes 2,119 defaults that we identified as hurricane related default. Based on prior industry experience, than the default to claim experience of non hurricane related defaults. Our provision for losses on these hurricane defaults does reflect a higher cure rate assumption than the estimates used on non hurricane defaults. The provision for losses in the fourth quarter includes $8,000,000 pertaining to the hurricane representing our best estimate of the ultimate loss to be incurred for claims associated with these defaults.

Looking forward, we will continue to gather information on this population of defaults and update our reserves if needed. At December 31, the default rate on The U. S. Mortgage insurance portfolio was 2.27% Essent, up 32 basis points from 1.95% at 09/30/2024 Essent. For the full year 2024, we recorded a net provision on The U. S. Mortgage portfolio of approximately $75,000,000 With higher defaults reflecting aging of the portfolio, and the impact of the hurricanes. Other underwriting and operating expenses in the fourth quarter were $71,000,000 and include $26,700,000 of total title expenses. Of which $8,500,000 are premiums retained by agents, Our consolidated expense ratio was 28.7% this quarter. Our expense ratio excluding title, which is a non GAAP measure was 19.4% this quarter. The description of our expense ratio excluding title and the reconciliation to GAAP can be found in Exhibit O of our press release. Consolidated effective tax rate for full year 2024 was 14.7% and including the impact of $2,000,000 of favorable discrete tax items. For 2025, we estimate that the annual effective tax rate will be approximately 15.5%, excluding the impact of any discrete item. As Mark noted, our holding company liquidity remains strong.

And includes $500,000,000 of undrawn revolver capacity under our committed credit facility. At December 31, we had $500,000,000 of senior [indiscernible] and our debt to capital ratio was 8% At December 31, Essent Guaranty's Essent sufficiency ratio was strong at 178% with $1,600,000,000 in excess available assets. At quarter end, Essent Guaranty statutory capital was $3,600,000,000 a risk to capital ratio of 9.8:one, Note that statutory capital includes $2,500,000,000 of contingency reserves at the [indiscernible] During the full year 2024 Essent Guaranty paid dividends of $165,000,000 to its U. S. Holding company. As of January 1, Essent Guaranty can pay ordinary dividends of $397,000,000 in 2025. Quarter end Essent Guaranty of PA which provided reinsurance to Essent guarantee on certain policies originated prior to 04/01/2019, entered into a commutation and release agreement under which all the outstanding risk in force was commuted back to us in guarantee. Essent Guaranty, PAVentsur entered its insurance license effective 12/31/2024. Freeing up $93,000,000 of cash and investments at Essent Guaranty, PA as liquidity to The U. S. Holding company. As a result, there were no dividends from the insurance subsidiaries The U. S. Holding company during the fourth quarter Essent twenty four. During the fourth quarter, Essent repaid dividend of $87,500,000 to Essent Group.

Also in the quarter, Essent Group paid cash dividends totaling $29,400,000 to shareholders and we repurchased 1,200,000.0 shares for $66,000,000 on authorization approved by our Board in October 2023. In January 2025, Essent repurchased nearly 1,000,000 shares for $52,000,000 taking advantage of the volatility in Essent's share price. As we have previously discussed, we are patient and value sensitive when it comes Believing this strategy will support our long term goal of unpounding book value per share growth over time. Now let me turn the call back over to Mark. Thanks, Dave. In closing, we are pleased with our full year 2024 financial results, which continue to reflect the strength of our franchise. Our high quality portfolio combined with resilience in housing and employment continues to translate to strong credit performance while our business continues to benefit from the impact of rates on persistency, and investment income. Our strong operating performance continues to generate excess capital which we will approach in a balanced manner by maintaining balance sheet strength, preserving optionality for strategic growth opportunities and optimizing shareholder returns over the longer term Looking forward, we remain committed to our buy, manage and distribute operating model and believe that Essent remains well positioned to deliver attractive returns for our shareholders.

Now let's get to your questions. [indiscernible] Okay. It looks like our first question comes from the line of Bose George with KBW. Bose, please go ahead. Hey, everyone. Good morning. Actually, first on title, is your expectation for 2025 that title results will be similar to Essent twenty twenty four? And was there anything unusual in title this quarter Just the provision was up and the OpEx was up?

Hey, Bose. Good morning. Yes, I would say with title, for '25, I would expect more of the same. I think we have a cost structure and we had said earlier, right, it would take twelve to eighteen months to stand it up. We're right at eighteen months. It's relatively well stood up. It's just a matter of I kind of look at some of that partial of the cost, the drag is kind of an option cost for refinance to come back. And the rate just haven't come back. Like I said in the script, we're levered to rates, but we did sign up one pretty large lender last year. So we're really carrying capacity for that lender and there's a cost to that. So I would expect it to be kind of more of the same. Again, longer term, it's a call option and we do believe longer term it will be supplemental earnings relative to EssentRe. And I think we're still but we continue to make progress there. But again, I think when rates come down, we should see we should see better results. In the fourth quarter, Bose, it was more around the provision excess provision that we've normally had and that was really just some of the cleanup from the underwriter that we bought.

And as some of the claims came due. So a little bit of fourth quarter cleanup there.

Okay, great. Thanks. And then actually the hurricane related default count that you gave, the 2019, Was that the default sets in the inventory at quarter end or had some of those cured by quarter end?

They were in there at quarter end. So like we said in the script, I think most of the increase of defaults were were the hurricanes. So if you take out 2.25 or 2.27% default rate you take out for defaults, it's probably closer to 2% Essent.

Okay, great. Thanks. Sure. All right. Thank you, Bose. And our next question comes from the line of Terry Ma with Barclays. Terry, please go ahead.

Hey, thank you. Good morning, everyone. Maybe just to follow-up on the default. So I kind of stripped that. The 2,000 or so added new notices in the quarter.

New notices are actually down sequentially, which is kind of counter to typical seasonality So kind of any color on kind of what's going on there? Hey, Terry, it's Dave Weinstein. [indiscernible] There are some clearly some ebbs and flows to default patterns. You're right. That in general, we we do see an uptick in the in the second half of the year for sure and somewhat a little bit in the fourth quarter.

Not there wasn't anything that we read into it necessarily. I would say on the whole, as we looked at 2024, in general, 2024 Essent default path was a little bit favorable, mostly every quarter. To prior historical quarters. So I think what we really saw in the fourth quarter was maybe a little bit more [indiscernible] Got it. Got it. Okay. And then, if I look at the default rate kind of ex Ferg canes, kind of the 2% you just quoted, The year over year change kind of decelerated compared to last quarter. I'm just curious, have we kind of reached a point with kind of vintage seasoning where you should get start to get more of a steady pace of increase for the default rate or is that kind of too early to call right now? Yes, I think it's too early to call. And I think just big picture, Terry, I think given the seasoning of the book and just the average age of the book, you're looking at historically pre COVID was 18, the book kind of continued to turn over. Because of kind of post COVID, this kind of second cycle, COVID was the first cycle, right, low rates, tons of origination, a lot of refinancing, portfolio turning over.

Kind of in the middle of Essent twenty two when the rates shot up. We've kind of been frozen And the book is really lengthened. It's like thirty three months as of '32, thirty three months. So you're starting to really we're getting that extra year of premiums which we've enjoyed over the past couple of years. But I think just think about it, the more borrowers are outstanding for longer periods time, it's kind of natural that a few of them that stick around longer will default. So I we're pretty it's pretty much in our expectations but it wouldn't surprise me if the default rate kind of continues to go up. Somewhat during '25. And I think you're starting I wouldn't be surprised if the whole industry season. I know maybe we're different, but I think when we see kind of it to go up to the 2% ish or 3% Essent wouldn't surprise me at all. Got it. Okay, helpful. Thank you. Thank you, Jerry. And our next question comes from the line of Rick Shane with JPMorgan. Rick, Thanks for taking my questions this morning. Look, there's been some bunch of questions about hurricanes. I suspect we're probably going to get questions next quarter about errors.

And obviously, there are short term implications on the model, but I'm curious, Mark, in many of the high cost regions of the country, insurance is now becoming very expensive or not necessarily even available. Two things. First of all, how do you guys monitor whether or not borrowers are in fact insured [indiscernible] If insurance really becomes increasingly problematic, how do you think about that in terms of pricing for risk and considering affordability? [indiscernible] that's a really good question. It's been a topic Essent. It's for a while internally. One, I think if they have a mortgage they're required to have homeowners. So if somehow they're dropped, they'll get forced placed So we don't worry about them having the insurance should something happen. So I think we're pretty well covered there. And remember, and you know this, Rick, and I'm sure a lot of others do, we're not really on the hook until the home is repaired. So there's that that kind of layer of protection we have. And that's why we've seen historically a lot of the defaults in the hurricane regions tend to cure at a pretty high rate Again, past performance doesn't predict the future, but that's been pretty much the scenario we've had for past hurricanes.

In terms of the longer term, impact of homeowners insurance, Yes, I think it's going to continue to be an issue in certain parts of the country. Just remember when some of the real coastal regions or even where the wildfires are, these are high cost areas, Rick. It's not a lot of mortgage insurance. So we don't really we're not that exposed. I think they're the ones that are most susceptible to these significant increases in homeowners. But even even for normal folks, you'll see it go from like 600 a year 1,200. It's significant. It's significant from a borrower perspective. If you kind of like raise above it, kind of big picture from an MI perspective, like maybe a point in DTI. So it's like we think about it a lot, but I'm trying to put it in perspective for investors that, yes, it's an added cost And I think it just goes in general, Rick, to kind of our theme that with affordability, going up and maybe staying up The amount of disposable income that borrowers are going to have to use from or allocate for mortgages, I just think is going to increase I mean, you live in California, it's always been that way in California for thirty years borrowers have allocated more of their disposable income to housing hasn't really been that that hasn't been that way for the rest of the country.

And I just think where homeownership rates will continue to stay where they are, kind of in the mid to upper 60s. I think borrowers are going to allocate more of their disposable income. I don't think they're going to have a choice if they want to be homeowner. So hopefully that gives you a little bit of big picture context.

It does. And again, look, I know you think in five and ten year horizons, Are you concerned that it has a chilling effect on HPA, which doesn't more broadly does impact you guys? I don't HP has gone up so much, Rick.

In the past five years that I think it's okay for it to pause for a while to be honest. I think, again, for it to be flattish and allow and this get kind of gets allow kind of incomes to catch up, which is kind of part of my longer term scheme for Essent. And I alluded to it earlier, in my response to Terry, but there's kind of like three cycles, right? If you just think about Essent, we had the COVID cycle super low rates, lots of origination, and it was an anomaly, right? We've never really seen rates come down that quickly and and stay that way. Just in that scene, maybe we saw it kind of in '23 was probably the last time we saw such significant refinance. And then kind of rates shot up in mid-twenty twenty two. So it's kind of like the new book started, right? So we have high rates [indiscernible] is pretty high. So affordability has been an issue. It's clearly been an issue for the past up and we're still into it. I think once and that's been an anomaly, right? We've never seen a housing market. I read last week that typically 4,000,000 borrowers or 4,000,000 people move every year.

Last year it was 2.7. So we're still kind of in this housing guess it's a rut is a good way to say it, but going to come out of it. And when we do and I think how we come out of it is I don't know if rates come down significantly I think having HPA remain relatively flattish and allow time for incomes to increase, you're just going to see you're going to see it happen naturally, right? Families continue to form, they need to move into bigger houses, people change jobs, more of that natural activity is going to come. And I think when we enter in that cycle, I think you're going to see renewed growth in our business. I really do. I can't predict when that's going to happen. I don't know if it happens in 2025. I think I think it takes a while for it to play out. But again, when you think bigger picture for the industry, right around 1,500,000,000,000.0 of insurance in force, it wouldn't surprise me and it's really only grown maybe 2% last year, 2% the year before. I think we're in a pause and I do think when when these forces come together, I think it'll be a bit of a tailwind for the business.

Got it.

Hey, Mark, I always appreciate the answers. Thank you so much. Welcome. Thanks, Rick. And our next question comes from the line of Doug Harter with UBS.

Doug, please go ahead. Thanks. Mark, you guys increased the dividend, increased the share repurchase. Given what you just said that we might be in kind of a pause for for industry insurance in force growth, How are you thinking about the pacing of capital return in the near term versus opportunities either in mortgage insurance or elsewhere to deploy capital? No, it's a good question, Doug.

And I think there is I think we're entering into this year decent opportunity for us to return capital and become a little bit more capital efficient, right? When you kind of combine the pause and growth the build up of capital, we've continued to build capital up over the past few years. So even though rates have been high, credit has been benign, persistency has been good and we've had this nice tailwind from investment income. And I think I mentioned in the script like $850,000,000 of cash coming in the door. So it's been a strong operating performance and we've really built up capital level. So add that and put into the fact that we feel pretty confident around credit in the shorter term. And I know it's your job and we have to think through kind of default rates and where they're going. We do think, again, I've alluded to it earlier, for them to continue to move up to 3% if they get to that level. It doesn't it won't surprise me and we won't get super kind of concerned about it. It's kind of well within our expectations and add in kind of our PMIERs cushion, right?

And that's the the thing that always that's our biggest concern, Doug, is kind of the event, right? We are and I know a lot of our analysts are specialty finance analysts, but at the end of the day, we really are more of an insurance I know our specialty is mortgage, but the financial performance in terms of premiums build up, paying claims, it's much more of an insurance company They don't have a lot of liquidity risk that is specialty finance company has. Our liquidity risk, if anything, is kind of in a PMIER calculation in terms of the pro cyclicality. Our business is really a cat business in a way. Our catastrophe happens to be a macro a severe macroeconomic recession, right? That's what we that's the thing that we think about the most. We don't worry about kind of ins and outs of even of a normal recession or soft landing. It's really that big event. They don't happen that often in in the early 80s with some regional events and super high rates that really crumbled a lot of the MIs back then and clearly happened during the great financial crisis. We got peak at a crisis in COVID, but it happened to be it happened to be relatively short.

And we run and we've talked about this before, we run our test stress test through GFC stress test. The Moody's S4 is becoming more kind of I would say, commonly looked at amongst those in the industry. I think when we kind of go when we run our numbers through that, we feel pretty good. So I feel like and that's kind of when we think about what's the right PMIERs capital sufficiency ratio. A lot of that is running through stress and making sure we have it. So we feel good there. And then when you add in kind of the capital that's at the holdco, [indiscernible] when you put all that together, it is for us to return capital, I think it's it's a time it's a good time for us to do it, right? We have and we've talked about the numerator and denominator. The numerator again given that pause and the pause is across the business. It's not just in the core business. Clearly, we alluded to title as more smaller, much smaller, but it's rate sensitive we're seeing a little bit of the pause even within Essent Re given the kind of the lack of GSE issue.

And so when you add all that up, for us to and again taking advantage really, we're as Dave alluded to, we're price sensitive on the repurchases. It was just a fantastic opportunity kind of post our November call. So we'll continue again to we have like a grid that will continue to execute. And don't forget that we have this special dividend as a tool. We haven't used it yet, but again, I think that's always out there. And I think we our goal is to grow book value per share, but we also want to make sure we have strong ROEs and you don't want the capital to too much capital to create a drag. I mean, I know this is it's an it's a high class problem for us to have, but I do think you'll see a little bit more of that activity in 2025. Great. Appreciate it, Mark. Thank you, Doug. And our next question comes from the line of Jeff Dunn with Dowling and Partners.

Jeff, please go ahead. Thanks. Good morning, guys. Dave, just to confirm, you said a 15.5% tax rate for this year? [indiscernible] current estimate for 20 Can you I'm surprised at how low it is with the new minimum impacts. Can you walk through the mechanics of that and what kind of credits maybe you're assuming to get to that level? [indiscernible] it's actually up a little bit from what our full year was for 2024.

To the extent that you're thinking about Bermuda tax, and I know there's been a lot of there's been some developments there that are potentially coming and I know there are those definitely some Bermuda based companies that have recorded an economic transition adjustment. And I think that's being looked at and how much of that can be deductible and the like. To cut through that, we don't have one of those. We didn't record an economic transition adjustment.

We have a very limited international presence and there is an international presence exemption related to the Bermuda income tax that really exempts us from tax until 02/1930. So when you look at that, that's why on the whole, we're basically staying for 2025. We're going to be around the same place we were really in 2024.

Got you. Okay. And then do you have account for the Q3 new notices of hurricane effective notices that came in?

Yes, Jeff, we didn't actually the hurricane said really late in September and October. We didn't really think any of those defaults, they came in, in the third quarter were hurricane related defaults. Really, we really thought everything was really in the fourth quarter.

Got it. And then last, could you repeat the buyback improvement for the quarter? I just missed that when you ran through the numbers. [indiscernible] In the quarter, we repurchased I got it right here. We repurchased 1,200,000.0 shares for $66,000,000 in the fourth quarter and in January, we repurchased nearly 1,000,000 shares for $52,000,000 Perfect.

Thank you. Sure. Great. Thanks, Jeff. And our next question comes from the line of Eric Hagen with BTIG. Eric?

Hey, thanks. Good morning. I appreciate you guys taking my question. So it feels like the non bank lenders are laser focused on bringing down origination and servicing costs managing their own prepayment risk through strong recapture and a lot of that improvement in costs and scale already seem to be showing up in the refi behavior when when rates are dropping. Do you guys have any perspective on how further growth of these non banks and the lower cost of capital could drive prepaid behavior specifically for the high LTV cohort of borrowers out there? And then how that kind of dynamic maybe traces back to how you guys price risk? [indiscernible] it's in kind of our duration assumptions when we think about it. When we price risk on the front end. I think it's an interesting point, Eric, It's nice to have you back on the calls. And you are correct in terms of how efficient The larger originators have become on refinancing and you can imagine maybe even with some of the potential AI tools out there that they could become even more Essent but they're brutally Essent. They happen for a while. That's the one thing to keep in mind when you they have been for a while.

And so I think when we think about it, I think it's still right dependent. I mean, so if rates do come down, would we see would we see more kind of MI roll off the books? Absolutely. And again, but I think it will be, as I said earlier, be replaced by rates come down, following up on my answer to Rick, it probably brings in that new cycle a little bit quicker because I think it will unlock a lot of purchase activity too. So [indiscernible] I don't know if that exactly answers your question, but I do think kind of it's it really is rate dependent for these guys. I know they're brutally efficient, but you still need rates to kind of come down. So and we saw that. I think that was the example. I think we might talked about it before, but there was kind of that refinance flash in October and we saw and it's even reflected in our numbers. I think our refinance 14 ish in the fourth quarter. So it was relatively higher. And we saw a bit on title. We didn't take advantage of it because it wasn't long enough, but I agree with you when it comes.

They've react very quickly. Thank you, Eric.

It looks like our final question today comes from the line of Boze George with KBW. He's back. Boze, please go ahead.

Great.

Thanks. I just had a couple of modeling related questions. Did you guys give guidance for expenses for 2025?

No, we didn't Bose, because we're moving to the segment reporting, which you guys will see. In the K disclosure. So it's going to be more MI and then kind of other other segments. So we didn't we'll be able to kind of once you see the numbers, we'll be able potentially give you some MI type guidance. But big picture, if you were to look at last year's numbers, it will be relatively flattish. When you cut through it, Essent we didn't we wanted to wait until K was out and you guys had a good chance to kind of look through it. It.

Okay, great. And then actually just one more on the investment portfolio. What's the incremental yield versus the current yield? And actually, just the decline quarter over quarter is a little surprising, so kind of what drove that?

Yes.

It's a little surprising, but we've really kind of we're positioning the book. So we moved and we started that in the past I want to say three or four months. So we're moving out of kind of the shorter term cash back into kind of more ABS and corporate credits, kind of back to where we were before kind of moving back to our normal portfolio. So there's a little bit of that rolling off. It was two year treasuries really high rates kind of rolling off. So I would think I would think this year, Bose, just in terms of kind of the rate, I think it stays in that that same neighborhood. Longer term, as depending if the yield curve stays where it is, it wouldn't surprise us to see a go above 4%, but I don't think that's going to happen in 2025.

Okay, great. A lot. Thanks, Bose.

And there are no further questions. So I will now hand it back to management for closing remarks.

I'd like to thank everyone for joining us. And again, for the second time in seven years, I'd like to congratulate our Philadelphia Eagles. For winning the Super Bowl and have a great weekend and go birds.