Q1 2024 First Financial Bancorp Earnings Call

Participants

Scott Crawley; Corporate Controller; First Financial Bancorp

Archie Brown; President, Chief Executive Officer, Director; First Financial Bancorp

Jamie Anderson; Chief Financial Officer; First Financial Bancorp

Daniel Tamayo; Analyst; Raymond James

Presentation

Operator

Thanks for standing by. My name is Mandeep, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the First Financial Bancorp 2020 core earnings conference call. (Operator Instructions) I would now like to turn the conference over to Scott Crawley, Corporate Controller. You may begin.

Scott Crawley

Thank you, Mindy, and good morning, everyone, and thanks for joining us on today's conference call to discuss First Financial Bancorp's first quarter financial results. Participating on today's call will be Archie Brown, President and Chief Executive Officer, Jamie Anderson, Chief Financial Officer, and Bill Harris, Chief Credit Officer. Both the press release we issued yesterday and the accompanying slide presentation are available on our website at www.bankatfirst.com under the Investor Relations section will make reference to the slides contained in the accompanying presentation during today's call. Additionally, please refer to the forward-looking statement disclosure contained in the first quarter 2024 earnings release, as well as our SEC filings for a full discussion of the Company's risk factors. Information we will provide today is accurate as of March 31st, 2024, and we will not be updating any forward-looking statements to reflect facts or circumstances after this call, I'll turn the call over to Archie Brown.

Archie Brown

Thank Scott. Good morning, everyone, and thank you for joining us on today's call. Yesterday afternoon, we announced our financial results for the first quarter. I'll provide some high-level thoughts on our recent performance, and then I'll turn the call over to Jamie to provide further details. I'm pleased with our first quarter results and encouraged by our trends, several of which were bolstered by actions we took during the quarter. These actions included a repositioning of a portion of the investment portfolio, a workforce efficiency initiative and the acquisition of Agile premium finance. We also commenced the restructuring of a portion of our bank-owned life insurance portfolio, which is expected to increase income in the back half of the year. Adjusted earnings per share was $0.59, which resulted in a return on assets of 1.3% and return on tangible common equity of 19.1% at 4.1%. The net interest margin remains very strong. Asset yields remained steady during the quarter. However, as expected the continued rise of funding costs negatively impacted our net interest margin. Additionally, loan growth was robust for the second consecutive quarter, with balances increasing by 10% on an annualized basis average deposit growth slowed for the quarter to a 2.3% annualized growth rate, and it included a seasonal outflow of approximately 100 million in business deposits early in the quarter. I'm pleased that noninterest income rebounded from the fourth quarter with increases across most of our free route fee revenue areas. During the quarter, we incurred a loss on the sale of investment securities associated with the repositioning of a portion of the investment portfolio. This repositioning has a very short earn back and should enhance our asset yields going forward. We also intensified our focus on expenses during the quarter. Our force efficiency initiative resulted in the reduction of approximately 5 million in annual expenses, and we expect to realize an additional 10 to 12 million in annualized expense reductions by the end of 2024. While expenses increased on a linked quarter basis, most of the increase was related to seasonal employee costs and variable compensation tied to the increase in fee income. We're excited to add agile to our mix of specialty businesses. An overview of the Company and transaction can be found on slide 13, agile operates an impressive business model, which region and originate high quality short duration loans at attractive yields. At closing, we acquired $93 million in loans, which grew to 119 million at the end of the quarter, as I will further diversify the loan portfolio and as a perfect complement to our Oak Street and commercial banking businesses. Asset quality was stable for the quarter. Net charge-offs declined for the second consecutive quarter to 38 basis points and were primarily driven by charges on two office loans that had been on nonaccrual since early 2023. These two loans have been charged down to their net realizable value and no other office loans had a classified risk rating at the end of the first quarter. Overall classified assets increased 12 basis points to 0.92% of assets, while nonperforming assets declined 9.8% from the prior quarter.
With that, I'll now turn the call over to Jamie to discuss these results in greater detail. And then after Jamie's discussion, I'll wrap up with some additional forward-looking commentary and closing remarks.

Jamie Anderson

Thank you, RJ, and good morning, everyone. Slides 4 five and six provide a summary of our first quarter financial results. The first quarter was another solid quarter, highlighted by strong earnings net interest margin that was in line with expectations, solid loan growth and the purchase of Agile premium finance. Similar to last quarter, our net interest margin declined due to increasing deposit costs, but remains very strong at 4.1%. Additionally, we repositioned a portion of the securities portfolio, which included selling 228 million of securities at a 5.2 million loss. We expect the reinvestment from these sales will bolster the margin in coming periods with a 278 basis point increase in yield. We anticipate further net interest margin contraction in the coming periods due to additional pressure on deposit pricing and changes in funding mix. However, we expect the pace of the decline to moderate. Total loans grew 10% on an annualized basis, which exceeded our expectations. Low loan growth was concentrated in commercial real estate with smaller increases across the various other portfolios loan balances also included 93 million of acquired balances from Agile, which is a finance company specializing in insurance premium lending. We acquired agile in an all-cash transaction at the end of February and the deal resulted in the creation of 5.6 million of intangible assets, primarily consisting of goodwill and a customer list asset. Excluding the loss on the sale of investment securities. Non-interest income increased compared to the linked quarter. Leasing & Wealth Management once again had solid quarters, while foreign exchange client derivatives and mortgage income increased from lower levels in the fourth quarter, noninterest expenses increased from the linked quarter due to seasonal employee costs and higher variable cost compensation. Overall, asset quality trends were stable with lower net charge-offs and declining nonperforming asset balances with an increase in classified assets. Annualized net charge-offs were 38 basis points during the period, which was an eight basis point decline from the linked quarter while nonaccrual loans decreased 10%. We recorded 11.2 million of provision expense during the period, which was driven by net charge-offs and loan growth. Our ACL coverage remains conservative at 1.29% of total loans. From a capital standpoint, our regulatory ratios ratios are in excess of both internal and regulatory targets. Tangible book value increased slightly, while our tangible common equity ratio increased by six basis points during the period.
Slide 7 reconciles our GAAP earnings to adjusted earnings, highlighting items that we believe are important to understanding our quarterly performance. Adjusted net income was $55.8 million or $0.59 per share for the quarter. Adjusted earnings exclude the impact of the FDIC special assessment losses on the sales of investment securities as well as acquisitions, severance and branch consolidation costs. As depicted on slide 8, these adjusted earnings equate to a return on average assets of 1.3%, a return on average tangible common equity of 19% and an efficiency ratio of 60%.
Turning to slide 9 and 10, net interest margin declined 16 basis points from the linked quarter to 4.1%. As we expected, higher funding costs outpaced increases in asset yields, primarily due to a 19 basis point increase in funding costs These costs were partially offset by a modest increase in asset yields during the period.
Our cost of deposits increased 22 basis points compared to the linked quarter, and we expect these costs to continue to increase in the coming months, but at a slower pace than we saw in the first quarter.
Slide 11 details the betas utilizing our net interest income modeling deposit cost increased in the first quarter, moving our current beta up five percentage points to 43%. Our modeling indicates that our through-the-cycle beta is approximately 40% to 45%.
Slide 12 outlines our various sources of liquidity and borrowing capacity. We continue to believe we have the flexibility required to manage the balance sheet through the expected economic environment. Slide 14 illustrates our current loan mix and balance changes compared to the linked quarter. As I mentioned before, loan balances increased 10% on an annualized basis, with growth concentrated in ICRE. and moderate growth, modest moderate growth in almost every other portfolio. Additionally, the acquisition of Agile contributed 119 million of growth during the quarter.
Slide 5 provides detail on our loan concentration by industry. We believe our loan portfolio remains sufficiently diversified to provide protection from deterioration in any particular industry.
Slide 16 provides detail on our office portfolio. About 4% of our total loan book is concentrated in office space and the overall portfolio performance metrics are strong. No office relationships were downgraded to nonaccrual during the quarter, and our total non-accrual balance for this portfolio declined to 17 million.
Slide 17 shows our deposit mix as well as a progression of average deposits from the linked quarter and total average deposit balances increased 76 million during the quarter, driven primarily by a 198 million increase in money market accounts and a 186 million increase in retail CDs. These increases offset declines in non-interest bearing deposits, public funds and savings accounts. This was expected as the current interest rate environment has driven customers to higher cost deposit products as Slide 18 illustrates trends in our average personal business and public fund deposits as well as a comparison of our borrowing capacity to our uninsured deposits on the bottom right of the slide, you can see our adjusted the uninsured deposits were 3.2 billion. This equates to 24% of our total deposits. We remain comfortable with this concentration and believe our borrowing capacity provides sufficient flexibility to respond to any event that would stress our larger deposit balances.
Slide 19 highlights our noninterest income for the quarter total fee income was relatively unchanged at 46.5 million during the first quarter and included the loss on the investment portfolio that I met previously mentioned.
Wealth management and leasing business income remained strong, while mortgage foreign exchange and client derivative income all increased from Q4 levels.
Non-interest expense for the quarter, as outlined on slide 20, core expenses increased $4.2 million during the period. This was driven by an increase in variable compensation tied to fee income as well as higher employee costs, which includes annual raises and a seasonal increase in payroll taxes.
Turning now to Slides 21 and 22. Our ACL model resulted in a total allowance, which includes both funded and unfunded reserves of $160 million and 11.2 million of total provision expense during the period. This resulted in an ACL that was 1.29% of total loans, which was unchanged from the fourth quarter. Provision expense was driven by net charge-offs and loan growth. Net charge-offs were 10.6 million or 38 basis points on an annualized basis which was an eight basis point decline from the linked quarter and other credit trends. Nonaccrual loans decreased 10% during the period, while classified asset balances increased to 92 basis points of total assets, primarily due to the downgrade of two relationships. Our ACL coverage was unchanged and we continue to believe we have model. We have model conservatively to build a reserve that reflects the losses we expect from our portfolio. We anticipate our ACL coverage will remain relatively flat or increased slightly in future periods as our model responds to changes in the macroeconomic environment.
Finally, as shown on slides 23, 24 and 25, regulatory capital ratios remain in excess of regulatory minimums and internal targets during the first quarter, tangible book value increased slightly and the TCE ratio increased six basis points due to our strong earnings. Absent the impact from HAOCI., the TCE ratio would have been 9.18% compared to 7.23% as reported.
Slide 24 demonstrates that our capital ratios will limit would remain in excess of regulatory targets, including the unrealized losses in the securities portfolio. Our total shareholder return remains robust, with 43% of our earnings returned to our shareholders during the period. Through the common dividend, we believe our dividend provides an attractive return to our shareholders and do not anticipate any near-term changes. However, we will continue to evaluate various capital actions as the year progresses.
I'll now turn it back over to Archie for some comments on our outlook. Archie?

Archie Brown

Thank you, Jamie. Before we end our prepared remarks, I want to comment on our forward-looking guidance, which can be found on Slide 26. Loan pipelines remain healthy. Payoff trends remain lower, and we expect seasonal tailwinds from our recent acquisition of agile to contribute to overall growth of 10% to 12% on an annualized basis over the near term.
For securities, we expect the portfolio to remain stable. Deposit growth has been solid, and we expect to grow moderately over the next quarter. Our net interest margin has remained strong and resilient, and we expect it to be between 3.95% and 4.05% for the next quarter, assuming no Fed cuts, we expect our credit cost remained consistent with the prior quarter prior quarter, while ACL coverage as a percentage of loans is expected to be stable to slightly increasing. For the full year, we expect net charge-offs to be approximately 30 basis points. Fee income is expected to be between 56 and $58 million as fee increase from seasonal lows, and this includes 12 to $14 million foreign exchange at 15 to $17 million for leasing business revenue. Noninterest expense is expected to be between 120 and 122 million, which includes 9 to 11 million in depreciation expense for the leasing business.
Specific to capital, our capital ratios remained strong and we expect to maintain our dividend at the current levels.
Overall, I'm pleased with our quarter and the work our teams are doing to continuously improve the company. While we're in a difficult operating environment for the industry. I'm encouraged by our results and trends and expect that we will continue to have a strong year.
We'll now open the call for questions.

Question and Answer Session

Operator

(Operator Instructions) Daniel Tamayo, Raymond James.

Daniel Tamayo

Good morning, Archie. Morning, Jamie. The morning, maybe we start on the on the loan growth guidance. It's a good strong number, but just curious if you could kind of deconstruct that for us, where are you expecting that? And I know you put a lot of information on the Agile acquisition and the debt. I'd certainly appreciate. But just if you could incorporate how agile fits into the that loan growth as well?

Archie Brown

I'm sure. Sure, Danny.
So the first quarter you see it on the slide. It was a little bit more like CRE and agile. We're probably the bigger drivers. I think our view of the second quarter is going to be more broad-based.
Hi, Sherri. It's going to probably fall back a little bit for the quarter, but we're going to see more broad-based. Agile will probably be about a third of that overall growth in the quarter. Commercial Banking, our Oak Street units, some of funding all contribute more, we believe in the second quarter. Again, ICOP will contribute some just not as much as what you saw in Q1.
Okay.

Daniel Tamayo

And I'm sorry, I missed this.
Yes, progress.
And you mentioned cross-selling opportunities from Agile. Just curious what your what you're thinking about the opportunities there are yes, there's going to be some work.

Archie Brown

It's not going to happen immediately, but we know that our commercial businesses are at least sometimes there's a what payment due to a property and casualty insurance. And we've got the ability to help finance that over up over a one year or a little bit less than a one-year window for them. So some will want to take up take that opportunity to do that. So we need to just introduce agile and work them into getting to know our commercial bankers and you're offering as another alternative offering for our clients.

Daniel Tamayo

Okay.
And then finally, just again on Agile, just the you had 10 to 20 basis points. Is the credit loss expectation for that business? And how should we think about that? Is that kind of full cycle or near term? Or and just if you could kind of.

Archie Brown

Yes, I'd say I'd say that as it ramps up and gets kind of to its full run rate that we would start to see that if you're I would say more think about more later on as opposed to near term, we when we acquired the portfolio, we did spend time selecting what we think are the highest quality assets and making sure the strategy fit with our kind of our credit appetite. So I would say when it matures, that's what we would expect. But in the near term, it would be less than that.

Daniel Tamayo

I will turn.
Thanks for taking my question if any.

Operator

Terry McEvoy, Stephens.
Morning, guys. It's very there. Jamie, I was wondering if you could help us think about the margin in the second half of the year when you take into consideration the bully restructuring and as the security sale that occurred in the first quarter?
Yes, so just to be clear on the Bali restructuring that that income is down in fee income. So that is included in our in our fee income outlook and that that restructuring it takes a little bit of time for that to kind of on for the insurance carriers to process that. So it will typically take 90 to 120 days kind of issue for that to sort of pull through and we get those dollars reinvested, but that that hits down in fee income.
So it's not really a margin.
I'm not really a margin item. So but but on that, just to clarify, that will hit mostly in the starting in the third quarter without really be a large, we'll get some of it, but it will be a large on a second quarter item. But obviously that on the on the margin, the securities repositioning is going to is going to help our asset yields. Also the Agile acquisition as well will help increase our asset yields, plus just the reinvestment of assets into the current rates is obviously helping as well. So as the Agile assets there here was around 9%. So that is at least 100 basis points or so higher than kind of the rest of our current offering rates on the loan book. So that's going to help can. So when we look at the margin now in the end, obviously, we gave the outlook for the kind of the near term in the second quarter. When we look out in the back half of the year on, we see the margin stabilizing. So our forecasts, we currently have two rate cuts, one kind of still in the middle of the year. Whether that will happen or not will remain to be seen and one to one at the back half of the year in that November, December timeframe. And so we have our margin stabilizing and in the back half of the year that you have three in that three, 90 to three, 95 range. And then if we don't get any costs that we just that this helps our margin, say a little bit higher for a little longer. So it would be maybe in that arm and that higher three, 90 range if we don't get any cuts.
Perfect.
Thanks.
Thanks for all that information. And then as a follow up on expenses beyond the actions taken last quarter, would that built into the one 20 to 1 22 expense outlook? Or should we expect expenses to come down later later this year? And I was it 10 to $12 million. I didn't I couldn't write it down as quickly as I wanted to what Virtu was discussing.
Yes, Terry, this Archie. So the 5 million I referred to is that we realized in the first quarter by the end of the quarter. I think we've got that baked into our near term expense outlook that did fully cover the cost of the agile operating expenses. So it does a nice job of that. But it's all baked into the near term that 10 to 12 additional expense savings on an annualized basis. We think that will be realized by the end of the year, so in effect, more next year in full, but there's going to be some gradual. It's here each quarter, some gradual love incremental reductions coming from that work. It just won't be fully into it, I guess, in a factor impacting the Company until we get to the end of the year.
Greg, thanks for taking my questions have been as we can tell you that.
Our next question comes from Chris McGratty with KBW. Please go ahead.
Good morning, Tom.
Good morning, Jamie.
A question on the funding with the step-up in the loan growth, what's the plan to fund it? You're going to you're going to borrow? You're going to just something on CDs. What's the plan to fund the extra growth?
Well, I mean, it was a little bit of everything. So we have about 5% project projected deposit growth for the remainder of the year, kind of across the board. And then we will find out obviously, depending on where the loan growth where the loan growth plays out.
So if you look at if you look at 5% deposit growth. That's about a net 175, CAD200 million a quarter deposit growth on the US on that side and the stuff we have we're showing around 10% or so growth in the second quarter in loans, and that doesn't quite cover that 10%. So we would fill in the rest with some with borrowings. And then you know, then we'll see where where loan growth shakes out for the rest of the year, but about 5% deposit growth. And then again, we'll just fill in with government borrowings.
Okay, great. And then just a couple of housekeeping items on on the bond restructure, what's the do you have the spot rate for the portfolio on the spot with a current yield.
Is that what you're asking?
Yes, I'm just trying to buy a second quarter like security or just trying to get at Give me second here on. So you have total total investment yield projected around ground for 15th.
And then maybe I'll sneak one in on capital energy. I mean, you talked about organic growth tuck-in deal is there any any change in conversations activity on traditional bank servicing?
The markets are hard with rates, but you guys have a multiple. I'm just wondering again, thoughts there.
Yes, Chris, this is Archie. I mean, there are so I'd say just we were having each quarter some conversations and I think things generally advanced a little bit, but I can't say that there's anything we're seeing right now near term that would up with the use of the capital we're building. And so it's something we'll keep we'll keep working on something makes sense. For us, but there's nothing right now that's immediate or imminent thinking, yes.
Our next question comes from the line of Jon Arfstrom with RBC Capital Markets. Please go ahead.
Thank you. Morning, guys.
And just a few follow-ups on Agile.
Archie, where do you think this business could go?
I see your 80 million target, but what kind of longer-term growth expectations do you have for?
Yes, John, it's going to be over some time. I mean this year, I think it's probably going to be a little bit shy of 200 million by year-end. It may actually look at some seasonality in the middle part of the year. So it may it may peak out around $200 million in the summer. And then slightly fall back to around 100, 90 or so by year end. But then next year, we think that can ramp up some more. So I think over over three to four years. If you're talking about a business, it may be $1.5 billion range. That's probably what we would say right now. You have these these loans are very short in tenor, they're probably 10 months, something like that. So you got to do a lot in order to keep it going. But if we get into that for $500 million range over the next several years. I think that's why we're giving you. This is not what we'd like to have, John, it's got great granularity, high quality. It's another lever. It helps us diversify the overall loan book. It complements the commercial banking team. So we like all the different facets that come with it might make sense.
And then Jamie, for you.
I hear you on the margin pressures, but how about net interest income inflection? When do you think that could occur given the loan growth? Maybe that happens before the margin is yes and yes.
And John, just make sure I understand you're talking about the dollars of net interest income dollars that as spoken to yet, when that starts to move up again?
Yes, more like more like in the towards the end of the year. I mean, obviously, with what we are looking at still here first quarter to the second quarter of call it about 10 basis points of margin compression around that area. And then so keeping the dollars the same here first to second quarter probably is unlikely. But as Tom said, really then in the back half of the year as the margin stabilizes a little bit more, you'll see that with the growth that we have, you'll see that those dollars start to stabilize and then move up.
All right.
Thank you.
And then, Bill, maybe for you just on credit in general, how you're feeling about credit and then your like that office maturity schedule.
Slide table on Slide 16. What are you seeing on some are loans that are coming up from renewal from your point of view? How do you how do you kind of look ahead to get ahead of any problems?
Yes, absolutely. On the office in particular, we have a quarterly cadence and for review, including stress testing of the book Tom from all the different angles that you would expect. And then we supplement that with portfolio review discussions on the buckets that we identify with potential issues. When we do this on a quarterly basis. And as we look at 24 and 25, we have a manageable handful of deals. I'll have to work through during that time. But overall, we feel good about our office book and it sits today. And then we monitor that every like I said, every court on the global book, some I do feel good about it I think as I look out in the future, we believe we have the office nice ring-fenced. Our C&I is performing very, very well and feel pretty good.
All right. Thanks, guys.
For the help picture.
Yes.
Again, if you'd like to ask a question, press star then the number one, your telephone keypad. Our next question comes from the line of Alex Twerdahl with Piper Sandler. Please go ahead.
Thanks. Good morning, guys. Payout, I just wanted to I'm going to go back to the loan growth that I think that 10% to 12% in the near term that makes sense, given that ramp up that you talked about with agile and some of the other pieces contributing in the second quarter, but I mean, is that sustainable into the back half of the year? Or do you think that there's going to be maybe some rates remain high and maybe maybe that that goes down a little bit in the third and fourth quarter?
Yes, Alex of yes, it's a little harder to tell. Our pipelines coming into the quarter, were they were they were they were ramping up in Q1, they're healthy and they're remaining pretty strong and stable. We can look out into the middle of the year and feel pretty good. Just a little murkier if I'm handicapping I would tell you it's probably it feels like it may be just a little bit lighter than that 10% to 12% annualized rate that we're talking about right now. When you get to the back half?
Yes, that makes sense. I'm not a lot of banks are projecting that pace of loan growth at all this year. So and where I guess I go on to the to the NIM., you know, with the Agile loans coming on with the 9% plus the securities restructuring, some of the other dynamics kind of, I guess, a little surprised to see that amount of new compression still expected for the second quarter. So are there some is it really just a funding just like some higher tranches of borrowings maybe repricing during the quarter? Or maybe talk about kind of really what's driving that, that level of compression in the second quarter still?
Yes, Alex, it, Jamie.
So on.
Yes, it's really the funding side that's driving all of that still work. But really what we are seeing is just that a continued mix shift on the deposit side you know, the dollars moving out of the lower cost buckets into the money market and CD specials, and that's just continues to drive up the we will start to see that mitigate some in the in the back half of the first quarter. But we still see some of that some of that going on in the second quarter. And that's just driving the cost that we're seeing dollars continue to move out some slowly still in the in our business DDA balances and the average balance of those accounts are still higher than what they were historically. So we're still seeing some dollars move out there and we're replacing those dollars with them and CDs and money market accounts.
So it's just drive that's just driving up the funding.
And so yes, we get a little bit of benefit from the on the on the asset yields, we obviously, I mean, agile helps. It's just it's just a small, a couple of hundred million on that. On the on the loan base, it obviously helps, but it's not enough here in the very near term to offset the other to offset that funding pressure that we're seeing. But we're but we expect that funding pressure against some to another quarter of that was maybe a little still some of it in the third quarter, not as much in the second quarter. And we just see that the deposit costs start to stabilize again absent any rate cuts.
Okay.
I appreciate that color. And then as you think about the agile and I guess really more broad, broad term for the specialty finance businesses, I got to think that their funding costs were again pressured even more than banks. And I'm just curious, have you seen an increase in these types of deals? Like how many would you typically look at in any given year? And is that sort of some of the specialty finance type transactions. Are they going to be I guess should we expect them to be part of the overall growth strategy for 24 beyond the Agile acquisition?
Yes, Alex, this is Archie. I'll I'll discuss it up. We do I think because we have acquired several specialty companies. We are higher on a little toward the Rolodex of bankers that are calling around for four different companies, but we really never responded to those. Everything that we've really acquired has been in a way based on some relationships. We have are a network we have with people. So we're really not out looking for more. And if I would tell you certainly in the wealth space, if we ever found something that made sense and the pricing can be rationalized to the right, we would consider something like that, but we will not rule out looking for more specialty companies. This was a you came in through through some connections we had and we really liked what this business looked like in terms of, again, the diversity, the yields, the up, it complements commercial banking the granularity, we liked all that. So yes, so just to Chicago, our company, and that's right here, not far, and we've got other presence in the Chicago area. So not looking for more of it, but it fits in the pattern of the things we've acquired over recent years.
Great.
Appreciate all the additional color. Thanks for taking my questions.
Thanks, Alex.
And have a good day.
That concludes our Q&A session. I will now turn the conference over to Archie Brown for closing remarks.
Well, thank you for joining us on today's call and following along with this quarter. We look forward to talking again next quarter. Everybody.
We can now concludes today's conference call. You may now disconnect.