Q2 2020 First Interstate BancSystem Inc Earnings Call
Good day.
Welcome to the first Interstate breakfast.
Quarter 2020, <unk> earnings conference call.
All participants will be unable to there'll be no.
Give me the systems placed for nor corporate specialist for pressure to start people does your Roe.
After today's presentation, there will be an opportunity to ask questions.
You asked the question your body Press Star then 100 Touchtone phone.
So we're trying to question. Please press Star then too.
Today's conference is being recorded.
I would now let's turn the conference over to Lisa Slater. Please.
Please go ahead.
Thanks Rocco good morning, Thank you for joining us for a second quarter earnings Conference call. I mean again. Please note that the information provided during this call will contain forward looking statement.
Actual results or outcomes may differ materially from those expressed by the state.
I'd like to direct Oliver nursery the cautionary note regarding forward looking statements factors that could affect future results contained in our most recent annual report on form 10-K filed with the FCC and then on earnings as well, it's the risk factors identified an annual reports and our more recent periodic reports filed with the FTC relevant factors that could cause.
Actual results to differ materially from any forward looking statements are included in the earnings release and an RFP filings. The company does not undertake the update any of the forward looking statements made today a copy of our earnings release, which contains non-GAAP financial measure is available on our website I be paid dotcom information regarding our uses non-GAAP.
Financial measure maybe found in the body of the earnings release and a reconciliation to their most directly comparable GAAP financial measures is included at the end of the earnings release for your reference joining us from management. This morning, our Kevin Riley, Our Chief Executive Officer, and Marcy Mutch, our Chief Financial Officer, along with that amounts of Rice Bran team at this time I'll turn the call.
I've been right Kevin.
Thanks, Lee good morning, and thanks again to all you put joining us on our call today.
Long term earnings release, we have published an updated investor presentation that husband additional disclosures that we believe will be helpful to you.
We have updated a few slides that update will be published this morning. The presentation can be accessed on investor Relations website lead haven't download a copy yet I would encourage you to do so.
What do you start today by providing an overview of the major highlights for the quarter and it'll turn the call, which marshy. So she can provide more detail.
Yes.
I want to begin to say about how proud I am organization.
Coping 19 pandemic has presented at all President set a child.
At age churn our team has figured out a way to keep our operations have gone smoothly.
Maintain a superior level client service and capitalize on RV business development opportunities that are available to us.
I would like to thank all of our colleagues for their hard work and a commitment that resulted in a strong financial performance in a very challenging your board.
Well the quarter, we generated net income, but 36.7 million or 58 cents per share.
In a pre tax pre leasing income of 66.6 million.
In my mind.
Highlights for the quarter has to be the resiliency of our markets. You continued to be fortunate that many of our markets that we operate and I've been among the areas of the country Leach impacted by Cobiz Nike.
Unemployment rates in our footprints with the exception of Oregon, decidedly outperforming the national level.
Montana, Wyoming in South Dakota remain the top 14 states in terms will always some employment well, Idaho grants third in the nation.
5.6%.
Additionally, consumer spending trends.
Mostly negative since it started the year I've seen marked improvement and are well above levels in early April.
This matches up with the anecdotal information that we hear from our bankers and clients across our footprint.
Simply put people have money in their pockets and they are spending.
We are diverse business mix.
We have been able to capitalize a pockets of strength that we are seen in the economy.
While our commercial borrowers remain cautious about making new investments, we're seeing strong demand in our residential mortgage and indirect consumer lending businesses.
Our mortgage banking revenue were up 58% over the second quarter for the second quarter over last year.
Well, there Oh portfolio residential real estate loans were up 18.5%.
And indirect consumer loans were up 14.1% on an annualized basis.
In the mortgage business, we're not only benefiting from the increased demand for refinancing, but also from the steady employ people relocating them up in it and Idaho, which is driving up more purchase volume.
In Brazil.
Orchids is also reflected in the strength of our asset quality.
We saw declines in nonperforming assets in criticized loans during the quarter.
That's a July 20 seconds, 64% the loans that we see the modification or deferral.
Either can change you or resumed making their scheduled payments. These positive trends also reflecting the strong underwriting in our portfolio.
In the limited exposure, we have to industry most impacted by the 10 Devon.
[noise] did.
We've had limited request for a second deferrals or modifications and the majority of those are coming from clients are hospitality industry.
Another highlight of the quarter was the productivity efficiencies of our efforts around a paycheck protection program.
The investments we have made to adapt our lending to be scalable and the process to standardize over the past several years served us well and getting our PPP application process.
In running very quickly.
We were getting loan applications completed and submitted a matter of ouch. As a result, we were able to process more than 11000 applications.
That were approved were 1.2 billion in funding.
Through our efforts.
43.2 million of fees engage 90 million in deposits from over 2200, new customers.
Hi, I'm after time stories healthy being frustrated with the lack of response from their current back both large and small institutions and be impressed by the level of service and the speed would wish we could get the PPP loans process, an approved the BPP program turn into an amazing business development opportunity that a name.
All told us to really demonstrate the value proposition that we are.
A bank that Leverages technology get efficiencies combined with unmatched level of personal service.
Just bringing on these new clients, we have made significant progress on expanding our relationships, we're getting lots of message from our bankers about clients moving over their deposit accounts, both business and personal the first interstate and expanding their lending relationship to went the other types of loans, including commercial lines of credit.
And the quit residential real estate.
We expect further progress with these new clients will positively impact our loan and deposit pipelines in the coming quarters.
Experience of the pandemic has also underscored the strength of our deposit franchise.
Total deposits increased by 1.8 billion from the ended the first quarter with almost all that coming in our lowest cost deposit categories.
In general the increasing balances are coming from operating highlights of our commercial clients as their business continued to perform relatively well.
Before I pass the call on the Marci.
One of the measure that we are excited that Michael Luckily joined our team as our new Chief Credit Officer, Michael comes to Us from Keybanc, where he served in various roles for nearly 30 years.
His extensive credit back well, including asset recovery healthcare real estate commercial banking private banking and mergers acquisitions combined with his leadership experience makes Michael the perfect person to oversee our credit team and we are fortunate to have with us and would that I like to turn the call. The debarshi. So she can provide.
Additional details around or second quarter results. So we had marci.
Hi, good morning, everyone as I walk through our financial results unless otherwise noted all of the prior period comparisons will be with the first part or 2020 I'll begin with our income statement.
Our net interest income decreased $600000 from the prior quarter, usually 800000 dollar decrease in accretion interest recovery income along with the impact from the Fed fund rate in March honoree Party basis, our net interest margin decreased three basis points to 3.52%.
Second quarter.
He down the major components of the change in our net interest margin 26 basis points was attributable to the change in deal with a declining asset yields being partially offset by the decline in deposit costs.
Eight basis points of the decline was attributable to the impact of the lower yielding TPP loan.
Two basis points was attributable to a declining interest recovery and accretion income and two basis points is attributable to the subordinated debt we took on in March.
We didn't impact of interest recoveries and a lot accretion our operating net interest margin declined 33 basis points to 3.44%.
Our cost of funds for the message you told me this morning.
I'm 20 basis points in March we will continue to see a bit of relief on that front during the third quarter.
During the second half a 2020, we have $536 million in Cds are 54% currency portfolio that will mature and these deposits carry a weighted average rate of 1.14%.
But other than the maturation in renewal that they see that lower rate. We don't think we'll have much more reasons to bring down the cotton costs.
Well the repricing our loan portfolio from the last fed rate has largely occurred.
Reduction is having on the books at 15 to 20 basis points below our average yield in the loan portfolio, excluding Pvp Ron.
We're seeing declining yields in the securities portfolio and paid off from investments are reinvested at much lower deal.
Given this pressure on there any appetite we expect to see continued compression in our margin, although it should be pretty manageable.
Maybe noninterest income and Ive stayed in any earnings release.
I want to point out that you reclassified mortgage servicing revenues and direct cost related to loan sold to mortgage banking revenue [laughter] it'd be more consistent with how others in the industry are reporting.
Our noninterest income increased $1.3 million quarter over quarter to $39.7 million. The increase was almost entirely due to a 3.3 million dollar increase in net mortgage banking revenue, which includes a 5.5 million dollar mortgage servicing impairment adjustment this quarter.
Our mortgage banking revenue is benefiting from the strong demand for refinancing which accounted for 71% our total mortgage production in the second quarter.
In May our digital mortgage application portal began accepting applications for refinancing, which helped drive additional volumes in the town.
The second quarter, we closed approximately $462 million flows through the digital channel.
Our pipeline for both refinance and purchase residential mortgage loans remains very strong as we started to third quarter, it's not quite as a record levels. We saw the second quarter, but it's likely we'll have revenues that are somewhat lower than this quarter, it's still higher than historical norm.
The increase in mortgage banking revenues second quarter was partially offset by lower by lower revenue in a number in line items that have been impacted by Kobe 19.
Payment services revenue was lower due a decline in the by you know transactions during the pending mainly related to travel expenses.
And we'll have a higher percentage of the transaction having to retailers that have negotiated more interchange rate.
Service charges on the topic to counter lower for a couple of reasons first we saw shifting behavior. It's clients had less opportunity for spending as a result of Kobe restriction.
We also made the decision to weigh certain overdraft fees as part of our client support efforts.
Lastly, wealth management revenues declined but.
Due to a drop in assets under management as a result in volatility in the market.
Moving to non interest expense, we didn't increase of $600000 from the prior quarter. This was primarily due to higher salaries and wages, resulting from higher levels of incentive accrual.
Our base compensation study on a linked quarter basis. However, in the first quarter based on our initial expectation for the fed rate that we had accrued lower levels of incentive pay.
As we began to see the impact from government stimulus in the PDP line, we adjusted our expectation and were able to catch up our incentive compensation accrual this quarter.
This increase in salaries and wages is partially offset by lower employee benefits expenses, resulting from lower health insurance costs and lower payroll taxes.
Most of our other expense item for relatively consistent with prior quarter as we continue to keep a tight lid on discretionary spending walnuts pandemic is ongoing.
When I don't really sets exception as occupancy expense, we need an adjustment to corrected appreciation on assets that were added at the beginning in the year, which increased our occupancy expenses corridor.
We expect this expense to level back out to the low $10 million range per quarter, although longer term there will be some opportunities for cost savings in this area.
We've decided to permanently close to install branches that have already been closed you did a pandemic [laughter] will result in a modest amount of cost savings.
But the decline branch traffic and increasing preference for digital banking channel will provide us with an opportunity to continue to evaluate our real estate needs going forward, including continuing to transition certain larger branches to smaller more efficient footprint.
Maybe the balance sheet, our total loans increased $1.1 billion from the ended the carpenter with all of the growth being attributable to Pvp line.
Excluding PBC among our total loans that have been down a bit as a decline in commercial not offset the growth we saw in the residential mortgage and indirect consumer portfolios.
At this point, excluding P. view on activity, we expect our loan portfolio to remain relatively flat to slightly up for the rest of the year as any you've grown well most likely be off that was normal paydowns and payoffs.
Our total deposits increased $1.8 billion from the end of the park border with most of the growth coming in non interest bearing deposits.
We also saw significant growth in our repo balances, which were up 23% quarter over quarter.
Maybe the asset quality, we saw decreases in most problem asset category.
Our nonperforming assets declined $7.2 million well, our criticized loans declined by approximately $34 million.
We recorded a provision for credit losses.
It seems like $5 million, which covered our $2.3 million net charge offs in the quarter, well and our general reserves to reflect the downgrade in our economic forecasts.
This brought our allowance for credit losses to 1.46% total loans would PPP runs are included or 1.64% when p. loans are excluded.
And with that I'll turn the call that nobody can Kevin.
Thanks, partially nice job I'm going to wrap up a few comments about our ability to manage through this crisis, we entered just basis with a fortress balance.
I can certainly underwritten well diversified loan portfolio, a high level of reserves excess capital and ample liquidity.
And throughout this crisis abella, she does even gotten stronger we've increased our allowance we further increased our liquidity, while maintaining a significant amount of excess capital.
Well the opposite server that [noise].
[laughter] southwest.
[noise] will remain relatively constant over the second half.
We continue to generate solid earnings and pretax pre provision income.
Although the crisis has demanded a significant amount of time and attention. We continued to operate with a long term perspective, and execute well technology initiatives that are strengthening our infrastructure, improving our scalability and enabling us offer new digital banking features to our claims.
Over the past year, we launched digital portals for mortgage lending business and consumer credit cards. Further we're actively engaged efforts to rollout of new digital classes for small business lending, so really ought to make that process and to reduce our type of application to approval and funding.
We continue to see more retail as small business clay utilizing our digital base and tools and the number digital interactions that we.
We have where commercial claims has increased nearly 50% from the beginning the year online account opening for both demand deposits. It saving accounts are up over 30% since the beginning of year.
We are allowing the crisis to impede our progress modernizing our bag.
While others are retrenching, we're moving forward and investing in our franchise at some point and I don't know when it will be we'll get back to a normalized environment and when we do we believe the progress we have made to enhance our technology platform will have us well position to capitalize the organic and acquisition growth opportunities.
That will be available and then able us to further increase the value of our franchise so with that like to open the call up the questions.
Thank you well when I'll begin the question answer session.
To ask a question in your press Star then one already touched on phone.
And for use of the speaker phone. We asked me if we used to go for himself for pushing the keys to withdraw your question. Please press Star then too.
Today's first question comes from Church <unk> at Wells Fargo. Please go ahead.
Hi, good morning.
Good morning Gerry.
Can you give an update on.
Hi, I'm sort of tourism trends and how that's impacting the the hospitality portfolio in your your expectations for has heard that the trends there and hospitality because he gave you know what the occupancy levels are and activity levels I would be great too.
All right well I'll start up little bit MRC can follow up with some of it but we've talked to sobra hospitality clients and they're saying that people are starting to travel more if he would say the occupancy rate right now runs from 32% all we have to 98% into properties and this is this is people appreciate number of hotels. So it's.
Coming back you know and move into right direction, but you know some pockets is stronger than the other pockets in the worst he has some numbers with regards to the visitations up a yellow so so far too much more with those.
Yeah, So scary for just the yellow sounds visitations you know.
Year to date forget about 49% that's starting to come back you know since June and so if you remember that parts didn't even open until June 1st and then what they're seeing in.
You know 2019 versus June 2020, there are only down 32%. So you know in general in Montana, and South Dakota. Yeah. We are you seeing tourism in isn't like it's completely cut off and until that point. They are going to have the Sturgis rally. This year. So we think will.
And he has some increases there as well.
Great. Thanks, and then you're shifting a little bit you are you talking about the the digital trends can you how is the the mortgage origination digital uptake because you did you see increases there in terms of yeah digital closing application closing.
Yeah, we continue to see that grow or more each quarter. So yes, we believe that we'll continue to grow.
Great. Thanks.
Our next question from a cultural Gordon Maguire with Stephens. Please go ahead.
Hi, good morning.
Good morning, good morning.
Marci a few questions on the salaries line and just overall expenses I was hoping you could quantify the incentive accrual catch up this quarter and then could you let us know whether you had any offsetting deferred compensation related to the.
The P.P. program and then I guess just broadly what you think <unk> a good overall expense run rate is for us to be thinking about going forward.
Okay. So I think but then center catch up was around $2 million to $2.5 million.
This quarter, so that's come down a little bit.
Health insurance cost will probably less back out a little bit. It hurts you could kind of offset each other in terms of capitalized PBB cost it was less than a million dollars. Gordon. So we believe that the normalized run rate would be right around that 95 million dollar.
Right.
Going forward.
Okay, great. Thank you.
Do they are just on mortgage I appreciate the color on production coming down from record levels, but is it fair to say with the digital channel fully open to Wi Fi you've kind of reset what you're capable of here or do you anticipate overtime, a more meaningful reversion to historical production levels.
[laughter] well I was there will probably get back to more of a historical production level. I think the thing is I think we might be a little bit above what we normally used to do because of the digital channel but.
No I don't think it's got like all of sudden be a you know.
<unk>.
Whirlwind of activity I think we're going to get more activity, but just you know.
A little more than that we see the pass but.
So it's gonna help us, but the stock its a.
Second to be Q.
One of the challenges Gordon in our inventory level.
We just don't have any inventory that's going to allow a huge uptick even if there was demand for purchase activity over and above what we're seeing we just don't have any inventory out there and any of our across the footprint.
Understood and do those does the digital channel pipeline did those come over with different pricing in terms of gain on sale margins I noticed the gross <unk> growth in fees, even on a gross basis wasn't quite commensurate with the production level increase versus first quarter.
No it had pretty much has the same same ER.
Sale gains UBS is all production. The good thing is at some point time, it might have less cost associated with the speed at which we can get these wells Doug So the cost.
Origination could go down.
Yeah, and Kevin just a follow up on a your commentary that as of July 20 seconds, 64% of modifications had resumed normal payments I'm curious how many of the modifications had reached the expiration of their first pure is there another group of modification.
That's still hasn't come to term yet that we should think about rolling back to scheduled payments.
Well you know I think the interesting thing is just a moving target. So I I could all I can give you the information that I gave it with one other anecdotal thing.
Today, we only have a $47 billion that we have been true which is little bit over big what percent of the portfolio has moved into the second round of deferral modification. So right now we only got 47 million out of the 1.2 billion that as you see the set so we believe is going.
To come down a substantially.
Everybody's kind of trying to guess what it might be.
Well so were up 15, maybe 20% or that might have our card balances might report second round, but most of it is a turn into mobile payments.
Yeah I appreciate it I'll step back.
I don't remember person today comes from Marine Corps paper Sandler. Please go ahead.
Hi, good morning.
Mike that well.
On me.
Favorable migration in criticized loans can you give us a sense for what what drove that how much of that was just upgrading credits and.
And so forth.
Yeah, it would be.
Just to upgrade some credit.
Yeah just.
There was nothing in particular that stood out as we just kind of went very normal processing downgrades and I agree if not greater success downgrades seven I, but there was no again, you know particular loans that that stood out in that process.
Okay.
And did you guys repurchase any stock this quarter and thing so but it wasn't sure.
No.
[laughter].
Okay.
And then.
On the.
On the P.P. loans, I assume you're using a 24 month accrual.
Or are you using something shorter and how do you.
Plan to use.
A lot of those proceeds next couple of quarters.
I think the plans both the going into the composite problem like but the thing is that a week, you're amortizing cheese over to 24 months or we're not taking a shorter amortization period and as far as you said, we we disorder is very two clos are against those fees so as.
Those loans or forgiven, we will record that zinc.
Okay, great. Thank you.
[laughter].
Our next question comes from Jackie Bohlen with KBW. Please go ahead.
Hi, good morning.
Okay. Thanks.
And that's the Atlanta question did you have any loans that were forgiven during the quarter.
But no did not.
Okay.
And lucky to have the average balances loans in the quarter not that average amount of each loan, but the total average P.P.P. levy.
$943 million.
Okay.
Thank you.
Yeah.
Just lastly in terms of thinking and I realize this is a really challenging question to answer but just your thoughts on how you're thinking about balance sheets eyes on excess liquidity and deposit flows and how you might deploy some of that excess cash going forward.
Well, you know like the honest, but.
Well pick we're picking our places where we can deploy it but the investment portfolio is not giving your though a lot of great opportunities, but we're picking up places but.
You know.
We were surprised with the amount of liquidity that we have here I mean.
We funded PPP lows and you know when we believe that somewhat people be could utilize those balances, but SOG deposits were up one point I mean, a deposits were up 1.8.
Billy and our repos were up almost 200 million we just.
Had an immense amount of liquidity summit, we don't know where that's going to settle out but you know we're going to try to pick up places to deploy it but I will never turn down or additional deposits will continue to take a minute, we'll try to deploying the best way, we possibly can but oh, we we don't know where it's going to settle out.
But it's a.
It's some amazing growth.
Okay, Yeah, no I definitely agree on that and I.
Think about the deployment of liquidity are you looking and an understanding that some of that could fluctuate are you looking primarily at deploying into assets or might there be some liability reduction she might look to do with some of that core funding.
We don't have much liability reduction to do so most of it will probably be and asset deployment.
Okay.
Okay, great. Thank you.
So next question comes from LIBOR person with very businesses. Please go ahead.
Hey, good morning.
Morning.
I first I wanted to ask about how you're thinking about the pace of your continued digital investment maybe versus what's your thoughts were at the beginning of this year.
I would say that are.
All these.
Speed of which we might deliver some of the digital capabilities I would say is faster than we thought it beginning here I think with the PPP process and we learned a lot about what we can do and and how we can utilize some technology to really enhance or the delivery of <unk>.
See small business lending so I would say that we're probably going to be ahead of what we call we're going to be able to deliver this year based on what we learn through endeavor.
[noise] Okay. Thank you that's helpful.
One question on credit you mentioned that there were some offsetting downgrades Ah I was curious if those were loans that had.
Modifications or I guess I'm getting at is maybe the approach to the 47 million of credit that didn't receive second modifications.
Is included in the downgrades or what's your your approach with them.
No really that downgrades and just normal operating you know kind of way we look at the businesses out there. So there was nothing that was really associated with those those deferrals.
Okay.
Thank you okay.
And as a reminder, ladies and gentlemen, if you're going to ask your question. Please press Star then one.
Today's next question comes from Girl Holland with Baird. Please go ahead.
Good morning, and thanks for taking the questions.
Yes.
First thought on the PPP program. It's clearly helpful revenue in capital benefit as you recognize the fees, but how confident are you can backfill that that contribution that revenue contribution as we move into next year and the vast majority of those loans are forget it.
I can't see I'm real confident that I'm going to put on over $1 billion laws.
Your your time, so it's going to be hard to back to what I've looked at that is terrible a windfall and that will continue to grow up or a normal levels of performance that we've seen the past. So I would say that it's gonna be hard, but we are going have to play a lot of this excess liquidity, even though those loans up.
So you know, we're gonna we're going to benefit.
From the overall you know.
[noise] environment that we live we believe but ER so to say they were going to grow loans by a billion dollars I can't stay here and say that too.
I do our best but we'll see what happens.
Yes or no.
And that we could see come back a little bit I think it's a more normalized environment some of our other noninterest income areas.
The restricted payment services that kind of thing hopefully things will now go back a little bit more normal environment, you don't pick up again.
Thanks, Marci that was my next question how quickly do you expect those deposit service charges the bounce back.
[laughter] huh.
Yeah, right thing I'm them back them, because you know again, we had waive fees.
Yes, I mean, basically I turned out some overdraft fees and there you know.
To they're back on again, so we're seeing higher overdraft fees and we're beginning to see things pick up a little bit, but how is the biggest thing with payment services and people still aren't traveling.
Well one thing about search I'd like to tell you. It was interesting anecdotal comment I'll make where you were worried and some communities that are well have some gambling.
Establishment said you know somebody areas. They said when we go out towards the various markets. They had pretty much zero overdraft fees and that's because all the casinos were closed down. So I think what happens if somebody seem to open up people, but back to their normal spending habits. The some of those fees will start coming back, but they pretty much set.
And overdrafts in the whole market do the fact that whole, but who knows were shut down.
That is interested and then just lastly on credit clearly a very strong quarter as your Walker Carlos charge offs Mpsvs criticized I guess just interested in your perspective on how you see this credit cycle playing out for first Interstate you benefit from.
A number tailwinds in the footprint, but I guess, just best guess on when you see these peak losses start to materialize or or or the migration you'd expect in the portfolio I know you're taking a hard look at everything just any hot spots or potential concerns I know.
We have not I gave you said we were looking for the tip of that iceberg and we're searching hard for but we haven't found one we don't know how it's going to play out.
I'll take a quote out a Jamie diamond, there's probably going to be pluses sometime but probably come in 2021 do I know where those losses are no <unk> at this point do I expect.
Large losses I don't see I think there's a different type of credit cycle. I know everybody is worried about no different things, but I'm not seen in our environment. So its hard for me to sit there and say that we're very concerned about credit quality, because I'm really not I haven't seen it so I will.
Well I find something you you will be the first want to know because I don't want to surprise you guys, but I am not down anything that is of concern to me at this juncture.
Thanks, Kevin Thanks Marci.
Yeah.
Our next question as a follow up from Gordon Maguire Stephens. Please go ahead.
Hi, Thanks for taking the follow up Marci I was hoping you could reconcile the 8.6 million of PPP interest income with the eight basis points of NIM dilution from PPP. This quarter. If I use the average balance you gave earlier I get an effective yield of 3.7%.
Which would be I guess accreted to now.
Unless there's some offsets there can you help me put to that.
Yeah, it rolls into some of the cash they came in you know you does not impact that adjustment as well.
And I have those where she.
Gordon money follow back up with you and I can give you kind of the exact.
Huh Kinda calculation I went through to look that okay. I appreciate it. Thank you.
[noise] I wasn't done on this includes the question answer session.
During the conference back over to the management team pretty far worse.
Well.
Goodbye.
Thank you for this concludes todays conference call. Thank you all for attending today's presentation. You may now disconnect your lines and another wonderful day.