RJF
#Sure, <UNK>.
The outstanding balance of March 31 in the energy portfolio is $451 million.
That's, once again, 32 borrowers.
Our total commitments came down by $28 million on the quarter, and now the total commitments is $742 million.
So the difference there is the amount of unfunded commitments.
I don't think anyone is fully reserved if oil stays low for a long period of time.
There are certainly companies that are leveraged or asset-rich, who are using cash or other things, are going to struggle.
I'd say if we have sustained oil prices at this level, there will be additions to reserves.
First, you are allowed to pitch for 401(k) rollover business.
You fall into the BIC and you enter into a [fiduciary] position that you have to be giving that advice to roll over in the best interest of the clients.
If you look at most of the standards, it says, you about can do anything as long as it is in the best of the clients.
And be ready to prove you did.
That's really what the rule over-boiled-down says.
Certainly it has been an area of 401(k)s because people do retire and want it managed and roll over.
I don't know if it is a huge percentage of our business ---+ I could not give a percentage, but certainly it has been a part of everybody's business.
I don't think it will go away if the standard is raised.
The standard is to make sure what is good for the client is fine.
There's nothing wrong with that.
That should be the standard.
I think the DOL, in their historic position, had, had a bias saying that it generally was not the best interest of the client.
I think the new rule basically says, we're not trying to force the lowest fee platforms, but just make sure you're recommending what's in their best interest.
So any time a person goes from not having a fee to having a fee, you can argue, they are biased.
I just think you have to prove that it's a reasonable recommendation in looking at the client.
And so it will continue.
I think there may be more liability associated with it.
Certainly more documentation, which a lot of these costs are going to be in process and documentation.
I think that's the potential outcome.
And frankly, we like that there are independent firms in the industry.
We don't want to be the only non-big bank-owned firm.
We look at our cost, and certainly any type of layer of layer of regulation really increases costs, especially if you cross $1 billion.
And then you cross $50 billion, you get another level.
Certainly, it's tough on the industry and tough on players when you have this much regulatory costs.
We feel it, and I'm sure our friends and competitors, but friendly competitors in the other firms who share our similar values, it's got to be tougher on them.
We're not hoping regulation drives them out of business.
But if they make the determination that it's too costly and they want to join someone who is of like-minded culture for those firms, we would welcome them.
I'm not sure that's a good result for the industry.
We actually expect ours to be slightly down from where they are.
The mega banks are going to be the ones that feel it a little more than us.
We will get the full step down, then partially back up because of our size.
So we actually expect ours to drop, but not materially.
It will be a small number.
A basis point or fraction thereof.
Correct.
Great.
Thank you all very much.
I know you had a lot of questions so we wanted to allow the time.
Most importantly, last quarter, I know people thought was a little weaker and this quarter a little stronger.
But what we focus on is long term.
And as I said the end of last quarter, that all of the indicators and recruitment assets were positive.
I feel the same thing about this quarter.
I'm not going to take [over believe] this is a long-term business, and the good news is our forward indicators are positive.
We have a great team of people here working hard and we have to earn it every quarter.
I appreciate your time and interest this morning.
We will talk in three months.
Thank you.
