Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from Jason O’Donnell from Boenning & Scattergood
Ted Peters
Hi, Jason.
Jason O’Donnell – Boenning & Scattergood
Good afternoon or good evening, how are you?
Ted Peters
Hi Jason. We’re fine, thank you.
Jason O’Donnell – Boenning & Scattergood
Good. Listen, congratulations on a good quarter! I just have a couple of questions and forgive me if I hop around a little bit, but just – on the recent acquisition of JJ Holdings and the Lau subsidiaries, can you please tell me roughly how much of a contribution you expect to trust revenue on a quarterly basis and also – if you have it – give me a sense of how much do you expect an increase in the way operating expenses as a result of that acquisition?
Ted Peters
Duncan will handle that.
Jason O’Donnell – Boenning & Scattergood
Okay.
Duncan Smith
I can give you some of that information. We are expecting about $4 million in annual revenue, so about $1 million a quarter there.
Jason O’Donnell – Boenning & Scattergood
Okay.
Duncan Smith
The margins on that are going to be anywhere from 30% to 40%.
Jason O’Donnell – Boenning & Scattergood
Okay, great.
Duncan Smith
That’s before, any of the deal amortization type costs that we’re still working through.
Jason O’Donnell – Boenning & Scattergood
Also, on the margin, I noticed obviously that bottomed out of this quarter and hopefully at least it flattened and I am just wondering what your thoughts are, given your current level of growth and kind of what’s your expectation here for the third quarter assuming that we don’t see any rate increases over the near term?
Duncan Smith
We were very happy with our margin in the second quarter; it was 397; it was exactly the same as the first quarter. So, we basically stabilized. As you know, our margin had been dropping pretty consistently for the last year, so this is, in fact – this really is despite the fact that we’re growing the bank and funding some of that growth through more expensive wholesale money. So we feel confident that we can maintain that margin. We are repricing some of our wholesale funding right now. So, we think we will stay in that range of 397. It could be a little bit lower, it could be a little bit higher, but we think we will be in that range.
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