Q4 2021 Heartland Financial USA Inc Earnings Call
Greetings and welcome to the H T L L fourth quarter 2021 conference call.
Speaker 1: Greetings and welcome to the HTLF Fourth Quarter 2021 Conference Call.
Speaker 1: This afternoon, HDLF distributed its fourth quarter press release, and hopefully you've had a chance to review the results.
This afternoon H D E. L F distributed its fourth quarter press release, and hopefully you've had a chance to review the results.
Speaker 1: if there's anyone on the call who did not meet p they copy you may have to it at h t l f website at h t l f dot com
If there's anyone on this call who did not receive a copy you may access it at H T E. L. F. 's website at H T. A L L dot com.
Speaker 1: With us today from management are Len Fuller, Executive Operating Chairman, Bruce Lee, President and CEO , and Brian McKage, Executive Vice President and Chief Financial Officer.
With us today from management are Lynn Fuller executive operating chairman.
Bruce Lee, President and CEO , and Bryan Mckeag, Executive Vice President and Chief Financial Officer.
Speaker 1: management will provide a brief summary of the quarter and then we will open the call to your questions before we begin the presentation i would like to not everyone that some of the information management will be providing today fault under the guidelines of what looking statement if defined by the circuitburgh?? tropical Feyer
Management will provide a brief summary of the quarter and then we will open the call to your questions before we begin the presentation I would like to remind everyone that some of the information management will be.
Adding today falls under the guidelines of forward looking statements.
Fine by the CRT Securities and Exchange Commission.
Part of that excuse.
Speaker 1: excuse me, as part of these guidelines, I must point out that any statements made during this presentation concerning the company's hopes, beliefs, expectations, and predictions of the future or forward-looking statements and actual results could differ materially from those projected.
Excuse me take part of these guidelines I must point out that any statements made during this presentation concerning the company's hopes beliefs expectations and predictions.
Future all forward looking statements actual results could differ materially from those projected.
Speaker 1: Additional information on these factors is included from time to time in the company's 10-Q and 10-Q filings which may be obtained on the company's website or the SEC website.
Additional information on these factors is included from time to time in the company's 10-K, 10-Q filings, which may be obtained on the company's website or the SEC's website.
Speaker 1: At this time, I will now turn the call over to Mr. Lynn Fuller at HTLF. You may begin.
At this time I would now turn the call over to Mr. Lynn Fuller at H T. L Hill, you may begin.
Thank you to Wanda and good afternoon.
Speaker 2: Thank you, Tawanda, and good afternoon. Welcome to H2S fourth quarter 2021 earnings conference call.
Welcome to HD last fourth quarter 2021 earnings conference call.
Speaker 2: We appreciate everyone joining us today as we discuss the company's performance for the fourth quarter of 2021 and for the year.
We appreciate everyone joining us today as we discuss the company's performance for the fourth quarter of 2021 and for the year.
Speaker 2: Now for the next few minutes, I'll touch on the highlights for the year and the fourth quarter. I'll then turn the call over to HPLF's President, CEO , Bruce Lee, who will cover business performance and Brian McKeag, our EVP and CFO will provide additional color around HPLF's results. Also joining us today is Nathan Jones, our EVP and Chief Credit Officer, who will be available to answer questions regarding credit.
Now for the next few minutes I'll touch on the highlights for the year in the fourth quarter. I'll, then turn the call over to <unk>, President and CEO , Bruce Lee, who will cover our business performance and Bryan Mckeag, our EVP and CFO will provide additional color around <unk> results.
Also joining us today, it's Nathan Jones, our EVP and Chief Credit Officer, who will be available to answer questions regarding credit.
Speaker 2: Now onto the financial highlights for 2021.
Now onto the financial highlights for 2021.
Speaker 2: I'm very pleased to report that we had an excellent year despite the headwinds we faced.
So I'm very pleased to report that we had an excellent year. Despite the headwinds we faced.
Speaker 2: Net income available to common shareholders for the year was a new record high of $211.9 million, and for the quarter, $47.6 million.
Net income available to common shareholders for the year was a new record high of $211 9 million and for the quarter $47 6 million.
Speaker 2: Earnings per diluted common share for the year was a new record high of $5. That's a whopping 40% increase over 2020.
Earnings per diluted common share for the year was a new record high of $5. That's a whopping 40% increase over 2020.
Speaker 2: For the quarter, earnings per diluted common share was a dollar and 12 cents.
For the quarter earnings per diluted common share was $1 12.
Speaker 2: Last that's ended the year at 19.3 billion, an annualized return on average assets for the year was 1.19% and for the quarter 1.03%. Annualized return on average tangible common equity for the year was 15.59% and for the quarter 13.47.
<unk> ended the year at $19 3 billion and annualized return on average assets for the year was 119% and for the quarter, one point or 3% annualized return on average tangible common equity for the year was $15 five 9% and for the <unk>.
Order 13, 4%.
Speaker 2: The net interest margin on a fully tax equivalent basis non-gap was 3.33% for the year and 3.12% for the quarter.
The net interest margin on a fully tax equivalent basis, non-GAAP was 333% for the year.
And 312% for the quarter.
Speaker 2: Our efficiency ratio, fully tax equivalent non-gap for the year, was 59.48%. Bruce and Brian will share more details on these items in their comments.
Our efficiency ratio fully tax equivalent non-GAAP for the year was 50, 948%.
And Brian will share more details on these items in their comps.
Speaker 2: Well, book value and tangible book value for common share continue to increase. Ending the year at $49 and $34.59 respectively. That's a 5% and 7% increase over the year end 2020, respectively. Our tangible common equity ratio non-gap end of the year at 7.84%.
We'll book value and tangible book value per common share continued to increase ending the year at $49 and $34.59 respectively.
That's a 5% and 7% increase over the year end 2020, respectively. Our tangible common equity ratio a non-GAAP ended the year at 784%.
Well with regard to our M&A strategy, we continued to prioritize both in market and larger transactions to build scale in our growth markets. We have a deep pipeline of attractive prospects in a number of active discussions are taking place.
Speaker 2: But with regard to our M&A strategy, we continue to prioritize both in market and larger transactions to build scale in our growth markets. We have a deep pipeline of attractive prospects, and a number of active discussions are taking place.
Speaker 2: Well, at this month's meeting, HTLS Board of Directors approved a 27 cent per common shared dividend. Hayable February 25th, 2022, to shareholders of record on February 11th, 2022. The Board also approved a preferred dividend of $175. Hayable on April 15th, 2022, to shareholders of record on March 31st, 2022.
Well at this month's meeting <unk> Board of directors approved a 27 per common share dividend payable February 25, 2022 to shareholders of record on February 11 2022.
<unk> also approved a preferred dividend of a $175 payable on April 15, 2022 to shareholders of record on March 31 2022.
Speaker 2: I'll now turn the call over to Bruce Lee, HGLF's president, CEO , will provide an overview of the company's operating performance. Bruce, thank you, Lynn. I do have good vision in mind that who I will work the most in the accounting career, I do have good vision in mind that who I will work the most in the accounting career,
I'll now turn the call over to Bruce Lee <unk>, President and CEO , who will provide an overview of the Companys operating performance Bruce.
Thank you Lynn good afternoon, everyone.
Speaker 3: HTLF had tremendous success and growth in 20.
<unk> had tremendous success and growth in 2021 I.
Speaker 3: Please to share with you our solid results from the fourth quarter and the year as a whole. We continue to make significant investments in talent and technology.
I am pleased to share with you our solid results from the fourth quarter and the year as a whole.
We continue to make significant investments in talent and technology for our lending teams, which are already delivering results with strong loan growth and excellent credit quality.
Speaker 3: 2021 we delivered record net income available to common shareholders of 211.9 million dollars for the quarter
In 2021, we delivered record net income available to common shareholders of $211 9 million.
For the quarter net income available to common shareholders was <unk> 47.
$6 million.
Speaker 3: Total assets grew to a record 19.3 billion.
Total assets grew to a record $19 3 billion.
Speaker 3: 1.4 billion or 8% from a year ago.
One 4 billion or 8% from a year ago.
Speaker 3: Asets increased 278 million from the link.
Assets increased $278 million from the linked quarter.
Speaker 3: Asset growth was driven by strong momentum in commercial and consumer loans, and we continued to see significant growth in deposits.
Asset growth was driven by strong momentum in commercial and consumer loans, and we continued to see significant growth in deposits and service fees.
Let's start with loan growth highlights.
Speaker 3: In the fourth quarter, loans grew 309 million across our portfolios excluding PPP. An increase in
In the fourth quarter loans grew 309 million across our portfolios, excluding PPP and.
An increase of 3% from the linked quarter.
Speaker 3: Again, exceeding our guidance for the quarter of 200 million. We saw continued strength.
Gan exceeding our guidance for the quarter of $200 million.
We saw continued strength.
Our commercial loan portfolios from the linked quarter commercial and industrial increased $106 million or 4%.
Speaker 3: the linked quarter commercial and industrial increased 106 million.
Speaker 3: Roccupied real estate increased 105 million or 5% Non-owner occupied real estate
Owner occupied real estate increased $105 million or 5%.
Non owner occupied real estate was flat.
Instruction increased $42 million or 5%.
Speaker 3: and her ag portfolio increased 69 million.
Our AG portfolio increased $69 million or 10%.
Speaker 3: We added 296 new commercial relationships during the quarter, representing 346 million in funded loans and 69 million of new deposits. The growth in our ag portfolio demonstrates how we are executing our talent acquisition strategy. It's vegan.
We added 296, new commercial relationships during the quarter.
Representing $346 million in funded loans and $69 million of new deposits.
The growth in our AG portfolio demonstrates how we are executing our talent acquisition strategy via.
The addition of our food and Agribusiness Division in California has strategically added capabilities and expertise to serve as agribusiness customers in the central Valley and complements our other HTS specialized industries teams across our footprint.
Speaker 3: complements our other HTLF specialized industries teams across our footprint. In 2021, we also extended our reach in several high
In 2021, we also extended our reach in several high growth markets in the Midwest.
We opened offices in St. Paul.
<unk> in Cedar Rapids.
Speaker 3: And in the fourth quarter, we opened two offices in the western suburbs of Chicago.
And in the fourth quarter, we opened two offices in the western suburbs of Chicago.
Speaker 3: In total, we added 15 commercial bankers.
In total we are.
Added 15 commercial bankers at these locations.
Speaker 3: Commercial pipeline is currently 15% higher since the end of the third quarter. And we expect to grow commercial loans by 200 to 250 million in the first quarter. We are winding down our PPP.
Our commercial pipeline is currently 15% higher since the end of the third quarter.
And we expect to grow commercial loans by $200 million to $250 million in the first quarter.
We are winding down our PPP operations at year end, we have fewer than 500 customers remaining to complete the forgiveness process over.
Over the lifetime of PPP, we processed nearly 8000 loans totaling nearly $1 6 billion.
Speaker 3: P, we process nearly 8,000 loans, totaling nearly $1.6 billion. As we start 2022, some headwinds remain.
As we start 2022, some headwinds remain and customers are managing.
Challenges from Covid.
Supply chain disruptions.
For shortages and wage pressures and inflation.
In our consumer loan portfolio, we saw growth of $7 million or one 7% from the linked quarter.
Speaker 3: We saw growth of 7 million or 1.7% from the linked quarter. Residential mortgage decreased 11 million or 1.3% from the linked quarter.
Residential mortgage decreased $11 million or one 3% from the linked quarter, reflecting declining refinancing activity.
We delivered another solid quarter of deposit growth.
Speaker 3: non-time deposits totaled 15.4 billion at quarter end in increase of 439 million or 3% during the quarter. For the year, non-time deposits increased 1.7 billion or 2%
Non time deposits totaled $15 4 billion at quarter end, an increase of $439 million or 3% during the quarter.
For the year non time deposits increased one 7 billion or 12%.
We saw a total deposit growth for the 11th consecutive quarter with heavier deposit activity in December .
Total deposits were a record $16 4 billion, an increase of $395 million from the linked quarter.
Speaker 3: an increase of 395 million from the linked quarter.
A $1 4 billion or nine 6% from a year ago.
Speaker 3: 1.4 billion or 9.6 percent from a year ago. Our already exceptional deposit mix improved even further. 94 percent of deposits are in non-time accounts. 40 percent of deposits. 40 percent of deposits.
Our already exceptional deposit mix improved even further.
94% of deposits are in non time accounts.
40% of deposits are in noninterest bearing accounts.
Our deposit pricing strategy continues to serve us well.
For the year total deposit cost decreased to nine basis points from 25 basis points a year ago.
Turning to key credit metrics, our disciplined credit approach has delivered excellent credit quality across our portfolios.
Speaker 3: delivered excellent credit quality across our portfolios. Non-performing loans represented 70 basis points of total loans at the end of the fourth quarter, a decrease of 14 basis points from the linked quarter. Non-performing assets as a percentage of total assets declined to 37 basis points from 46 basis points in the linked quarter.
Nonperforming loans represented 70 basis points of total loans at the end of the fourth quarter a.
A decrease of 14 basis points from the linked quarter.
Nonperforming assets as a percentage of total assets declined to 37 basis points from 46 basis points in the linked quarter.
Other real estate decreased to $1 9 million from $4 $7 million in the linked quarter.
Delinquency ratio decreased to seven basis points from 12 basis points in the linked quarter.
Non pass rated loans decreased to seven 4% a decrease of one 7% for the quarter.
Lastly, in the fourth quarter, we reported a net charge off position of just over 600000 or three basis points.
Of average loans.
During 2021, we accelerated several of our strategic investments and initiatives to improve the customer experience.
Speaker 3: During 2021, we accelerated several of our strategic investments in
Specifically, we enhanced commercial online account analytics document management and form availability.
Speaker 3: and enhanced commercial online account analytics, document management, and form availability.
We completed improvements for customer service agents to access real time transaction and account data.
Speaker 3: customer service agents to access real-time transaction and account data. This increased first-call resolution and improved customer service operational efficiency.
This increased first call resolution and improved customer service and operational efficiency.
We improved loan document handling and improved loan administration processing time by up to 10%.
We continue to optimize our branch network in.
Speaker 3: 2021, we closed, consolidated, and sold 12 branches or 8% of our network. In 2022, we planned to close or sell 13 more branches or another 10%. After years of
In 2021, we closed consolidated and sold 12 branches or 8% of our network.
In 2022, we plan to close or sell 13 more branches.
For another 10%.
We had elevated expenses in the fourth quarter as we began executing the consolidation of our separate bank charters into a single charter to drive long term efficiency improve agility reduce expenses and enhance scalability.
Speaker 3: drive long-term efficiency, improve agility, reduce expenses, and enhance scalability.
Brian will provide more details on expenses in his comments.
Speaker 3: We intend to charter HTLF Bank in Colorado, subject to regulatory approval. We plan to consolidate our 11 member banks
We intend to charter H Tls bank in Colorado.
Subject to regulatory approval.
We plan to consolidate our 11 member banks.
Onto this charter over the next year and a half with citywide banks being the first in mid 2022.
Speaker 3: city wide banks being the first in mid 2022. As I've previously said, our
As I previously said, our 11 banks will maintain their brands local leadership and local decision making.
Speaker 3: HPLF will maintain its strong incisable presence in the Bugaiwa. Current HPLF up.
H Tls.
Will maintain its strong and sizable presence in Dubuque, Iowa.
Current H tof operational and administrative functions, we will continue to be largely staffed and run from Dubuque.
Speaker 3: will continue to be largely staffed and run from debut. We expect charter consolidation to be complete by late 2023. As I look back on 2021, it's been a year of tremendous growth and accomplishment across a...
We expect charter consolidation to be complete by late 2023.
As I look back on 2021, it's been a year of tremendous growth and accomplishment across <unk>.
We're executing on our growth strategy by investing in talent, expanding our capabilities extending our footprint into high growth markets and implementing new technologies.
We added <unk> first chief diversity equity and inclusion officer to lead our dei efforts and reinforce our company values.
Speaker 3: added HTLF's first chief diversity, equity and inclusion officer to lead our DEI efforts in reinforced our company.
And we refreshed our branding to.
To better reflect the company, we are today and reinforce the strength insight and growth we bring to our employees.
Speaker 3: reinforce the strength, insight and growth we bring to our employees, customers, communities and investors. Together, we are HTLS. I will now turn the call over to Brian McKay, HTLS.
Customers communities and investors together, where H tls.
I will now turn the call over to Bryan Mckeag, <unk>, Chief Financial Officer for more details on our performance and financials.
Thanks, Bruce and good afternoon.
Speaker 4: I'll begin today by referencing our earnings release, which details another solid quarter for HTLF, with earnings per share reported.
I'll begin today by referencing our earnings release, which details another solid quarter for <unk> with earnings per share reported at $1 12.
Speaker 4: loan growth of $309 million excluding PPP, significantly improved...
Loan growth of $309 million excluding PPP.
Significantly improved credit metrics and continued deposit growth of $395 million.
Speaker 4: several significant items that impacted the quarter including the three point one million dollar decline in income on PPP loans as PPP forgiveness slowed.
There were several significant items that impacted the quarter, including a $3 $1 million decline in income on PPP loans as PPP forgiveness slowed in Q4.
A spike in mortgage prepayment speeds in the fourth quarter caused premium amortization on our MBS portfolio to accelerate reducing income by approximately $1 9 million in this quarter.
Speaker 4: caused premium amortizations on our MBS portfolio to accelerate, reducing income
Restructuring charges of $1 9 million were recorded relating to the commencement of the charter consolidation project.
Speaker 4: The factoring charges of $1.9 million were recorded relating to the commencement of the Charter Consolidation Program.
Speaker 4: write downs totaling 424,000 were booked related to branch facilities identified to be consolidated or downsized in 20.
And write downs totaling 424000 were booked related to branch facilities identified to be consolidated or downsized in 2022.
Some of these items lowered EPS by <unk> 13 per share.
Speaker 4: Before going into more detail, I would remind everybody that you can find...
Before I go into more detail I would remind everybody that you can find additional.
Speaker 4: information on the quarter in the fourth quarter investor presentation which is available in the IR section of Heartland's website. I'll start my comments with the provision for loan
Information on the quarter in the fourth quarter Investor presentation, which is available in the IR section of Heartlands website.
I'll start my comments with the provision for loan losses, which was a $5 $3 million benefit this quarter as underlying credit trends continued to improve highlighted by loan upgrades exceeding downgrades again, this quarter nonperforming loans falling $13 3 million.
Speaker 4: Highlighted by low and upgrades exceeding downgrades again this quarter. Non-performing low and falling...
Speaker 4: Loan delinquency is declining again to a new record low of just 7 basis points of total loans.
Loan delinquencies declining again to a new record low of just seven basis points of total loans and net charge offs of only $637000.
The economic outlook factors used to develop the allowance were largely unchanged from last quarter and still retain a measured level of caution and uncertainty that management deems appropriate for lingering economic headwinds that are yet to be unresolved there yet to be resolved.
Speaker 4: develop the allowance were largely unchanged from last quarter and still retain a measured level of caution and uncertainty that
So at quarter end, the total allowance for related lending related credit losses, which includes both the allowance for credit losses on loans and unfunded commitments stood at $125 6 million or $1 two 6% of total loans.
Speaker 4: So a quarter end, the total allowance for planning related credit losses, which includes both the allowance for credit losses unlooms, and unfunded- and the total allowance for credit losses unlooms, and unfunded-
Speaker 4: The total allowance stands at 1.29% compared to 1.2%
When the PPP loan balances are excluded the total allowance stands at 122, 9% compared to 139%.
At September 32021.
In addition at quarter end unamortized purchase loan valuations on the balance sheet stood.
Speaker 4: unamortized purchase loan evaluations on the balance sheet stood at 18.5 million or 19 basis points of total loans excluding PPP.
At $18 5 million or 19 basis points of total loans excluding PPP.
Moving on to other balance sheet items investments grew $79 million this quarter and comprised 40% of assets with a tax equivalent yield of 194%.
The duration of just over five years and generate about $75 million of average monthly cash flow.
Speaker 4: Decreased $134 million to end the quarter at $504 million.
Borrowings decreased 134 million to end the quarter at $504 million or just to six 1% of assets.
Tangible common equity ratio decreased five basis points to 784% at quarter end and reflects a 14 basis points decline due to the decrease in market value of investments and another 12 basis point decline due to the significant balance sheet growth this quarter.
Speaker 4: will come an equity ratio, decrease five basis points to 7.84% at quarter end, and reflect, say, 14 basis points decline due to the decrease in market value of investments. And another 12 basis point decline, do the significant
These are partially offset by a 21 basis point increase from retained earnings.
Heartlands regulatory capital ratios also remained strong with common equity tier one at just over 11, 5%.
Speaker 4: common equity tier one at just over 11.5% and total risk-based.
And total risk base at just under 16%.
So the balance sheet continues to be very strong and well positioned.
Speaker 4: According to the income statement, net interest income totaled $137.2 million this quarter, which was $5.3 million lower than the prior quarter.
Moving to the income statement net interest income totaled $137 $2 million, this quarter, which was $5 $3 million lower than the prior quarter.
Three main drivers of the reduction were.
Speaker 4: $1.3.1 million decline in PPP interest in fees recognize this quarter.
A one a $3 $1 million decline in PPP interest and fees recognized this quarter to $8 1 million from $11 2 million last quarter.
We exited the quarter with $6 5 million of unamortized PPP loan fees remaining on our books.
Speaker 4: of the quarter with $6.5 million of unamortized.
Second accretion of purchased loan valuation discounts declined 900000, this quarter to $2 4 million.
Speaker 4: Loan valuation discounts declined $900,000 this quarter to $2.4 million. As previously noted, we have $18.5 million.
As previously noted we have.
$18 $5 million of unamortized purchase accounting discounts remaining on our books at year end.
Speaker 4: third due to the spike in mortgage prepayment speeds in the fourth quarter.
And third due to the spike in mortgage prepayment speeds in the fourth quarter.
Speaker 4: Wearing memorizations on our MBS portfolio were accelerated by
Premium amortization on our MBS portfolio were accelerated by approximately $1 $9 million this quarter.
Just as an aside with the rise in interest rates since year end prepayment speeds have already come back down to levels that should result in premium amortization normalizing back to pre fourth quarter levels.
Speaker 4: side with the rise and interest rates since year end. Prepayment speeds have already come back down to levels that should
In total these three drivers resulted in $5 nine and a $5 $9 million decrease in net interest income.
Speaker 4: Total these three drivers resulted in 5.9 and a 5.5.
Excluding these components net interest income would have been 600000 higher than last quarter.
Speaker 4: including these components net interest income would have been 600,000 higher than last quarter. The net interest margin on a tax equivalent basis this quarter was 3.12% that's down 22 basis points compared to last quarter.
The net interest margin on a tax equivalent basis. This quarter was three 1%, 2%, that's down 22 basis points compared to last quarter.
Largely due to the three items I mentioned just mentioned <unk>.
<unk> yields declined 23 basis points loan yields fell 16 basis points, while net interest cost remains unchanged.
This quarter. The net interest margin includes five basis points of purchase accounting accretion, which was down three basis points from the prior quarter.
Shifting to noninterest expense noninterest.
Speaker 4: Anarchist expenses totaled $115.4 million.
Noninterest expenses totaled $115 $4 million this quarter up $4 8 million from last quarter.
Excluding restructuring tax credit costs and asset gains and losses.
Speaker 4: including restructuring, tax credit costs, and asset gains and losses, core expenses increased $3 million to $111 million compared to $108 million.
<unk> expenses increased 3 million to $11 million $111 million compared to $108 million last quarter.
The increase is primarily attributed to $3 $2 $3 million increase in salary and benefits costs that were related to completing the build out of our food and agribusiness division.
Speaker 4: related to completing the build-out of our food and agribusiness division, continuing wage inflation pressure, and higher temporary worker costs related to several in-flight IT projects.
Continuing wage inflation pressure and higher temporary worker costs related to several in flight projects that we have been pushing to get completed before we began consolidating charters in mid 2022.
Looking ahead to 2022.
We believe <unk> will continue to deliver strong results highlighted by <unk>.
Speaker 4: long pipelines that remain strong, leading to expected long growth, expecting, except PPP.
<unk> pipelines that remains strong leading to expected loan growth expecting except PPP and the 2% to 3% range per quarter as the economy normalizes and our new Agribusiness Finance group ramps up.
Speaker 4: non-time deposit growth is likely to slow into the 1% range per quarter. Answer that!
Non time deposit growth is likely to slow into the 1% range per quarter.
Assuming no fed rate changes net interest income excluding PPP fees is projected to grow mid single digits on a percentage basis year over year, as earning assets grow and mix improves.
We estimate that two fed 25 basis point rate hikes in the first half of 2022 would increase net interest income approximately $16 million in 2022.
Speaker 4: We estimate that two Fed 25 basis point rate hikes in the first half of 2022 would increase net interest.
Speaker 4: to our asset-sensitive balance sheet and assuming much lower than normal deposit betas. The 2023 full-year impact of these raises would be
Due to our asset sensitive balance sheet, and assuming much lower than normal deposit betas.
The 2023 full year impact of these raises would be an additional $11 million over the 2022 increase.
Provision for credit losses are expected to remain low for the next quarter or two and then begin to normalize with.
Speaker 4: remain low for the next quarter or two and then begin to normalize with continued loam growth and low net charge off levels as the economy stabilized
With continued loan growth and low net charge off levels as the economy, stabilizes and COVID-19 and supply chain issues subside.
Noninterest income excluding investment gains or losses in total is expected to be flat next quarter at about 31% to $32 million.
Speaker 4: expect year over year lift in core, non-interest income in the 10% range next year. However, higher interest rates would likely drive mortgage and trust revenues lower. This also assumes no change to consumer and-
We expect year over year lift in core noninterest income in the 10% range next year.
However, higher interest rates would likely drive mortgage.
Trust revenues lower.
This also assumes no change to consumer NSF fees.
Fees, which were currently being monitored and assessed.
Core expenses are expected to return back towards Q3 levels or in the $108 million range next quarter.
We are working to manage core expenses to minimal increases year over year in 2022 by rationalizing branches slowing it and other spending and we should begin to realize some cost as we concentrate on charter consolidation some cost saves as we concentrate on charter consolidation.
Speaker 4: We are working to manage core expenses to minimal increases year over year in 2022 by rationalizing branches.
Speaker 4: and we should begin to realize some costs as we concentrate on charter consolidation.
However, persistent inflationary pressures, particularly wage inflation could be a difficult headwinds.
The remaining charter consolidation restructuring costs are estimated at $17 million to $18 million will be incurred over the next two years.
Speaker 4: remaining charter consolidation restructuring costs are estimated at 17 to 18 million and will be incurred over the next two years. The consolidation will reduce run rate.
The consolidation will reduce run rate costs create operating leverage for future growth and presents some treasury revenue opportunities.
Speaker 4: benefits will layer in over the next two years. And we are confident that in total, they will reach $20 million on annualized basis.
These benefits will layer in over the next two years and we are confident that in total they will reach $20 million on an annualized annualized basis. When the consolidations are completed in late 2023.
And finally, we believe a core tax rate in the 20% to 22% to 23% range, excluding any new tax credits as a reasonable full year rate.
Speaker 4: Finally we believe a core tax rate in the 22 to 23% range excluding...
And with that I'll turn the call back over to Bruce.
Speaker 3: And Rwanda, I think we're now ready for questions from the analysts.
To Wanda I think we're now ready for questions from the analysts.
Thank you.
Speaker 1: We will now be conducting a Q&A question and answer session.
We will now be conducting a Q&A question and answer session.
To ask a question you will need to press Star then one on your telephone to with.
Speaker 1: To ask a question, you will need to press star then 1 on your telephone. To withdraw your question, press the power key. Again, that's star 1 to ask a question. Please.
All your question press the pound key.
Again, Thats star one to ask a question please.
Please standby, while we compile the Q&A roster.
Speaker 1: Operate's question comes from the line of Jeff Lulis with DA Davison. Yelana's open.
Our first question comes from the line of Jeff Lewis with D. A Davidson your line is open.
Thanks, Good afternoon.
Hi, Jeff.
Speaker 5: On the on the spread income, I suppose I note that headwinds that you discussed, I was thinking maybe
On the.
On the spread income.
Suppose I note that headwinds that you've discussed I was thinking maybe.
Speaker 5: You might have a better quarter given a long growth. Was that potentially with the growth? Was that pretty steady throughout the quarter? Was that pretty back end loaded in terms of tie-knit?
It might have a better quarter, given our loan growth.
Was that potentially what the growth was that pretty steady throughout the quarter was that pretty backend loaded.
In terms of timing.
Speaker 4: It was in the back half of the quarter. I think if you look at the average loans for the quarter and some of our tables.
Yes. It was in the back half of the quarter I think if you look at the average.
Loans for the quarter and some of our tables compared to where we ended the quarter on a on a period end basis, we were higher quite a bit higher at the end of the quarter. So it was back loaded.
Okay.
Got it and then.
Speaker 5: got it. And then this had went off on the charter consolidation, Colorado, the selection of that for to kind of house the charter is that, you know, kind of the central to the geography business friendly state, any kind of ideas of why that was selected. Yeah, Jeff, I'll take.
Just a one off on the charter consolidation.
All our rado that.
Selection of that or kind of.
How is the.
The charter is that kind of a central to the geography.
Friendly state any any kind of ideas of why that was selected.
Yeah, Jeff I'll take that one this is Bruce.
Speaker 3: you know, several factors went into it. One of them was that Colorado does have experience with multi.
Several factors went into it one of them was that Colorado does have experience with multi state banking operation. So that that was one of the benefits.
Speaker 3: They also have experience handling charters of our size, not only today, but in a future state. You know, it is centrally located for all of our brands.
They also have experience handling charters of our size not only today, but are <unk>.
<unk> state.
It is centrally located for all of our brands.
Clearly emphasizes our growing presence in the west and the southwest.
And Colorado has very favorable GDP growth. So there were a lot of factors that went into it.
Okay.
Got it.
Last one on.
Speaker 5: The cost is associated with the benefits of the consolidation.
The.
The cost associated with the benefits of the consolidation.
Speaker 5: I guess is, you know, if the two-year process is that 17 to 18 million.
I guess, it's a.
Two year process that $17 million to $18 million in costs.
Speaker 4: Is there a point where maybe at the end of 22, you start to, it's kind of a wash in terms of the saves versus the upfront expenses or just kind of looking for the timing of both expenses. Is that front-end loaded and the saving sort of, in the second half, if you could comment on just the timing of that? Yeah, I think there may be a little bit of front-end loading on the cost, obviously, to get the project going in the first couple.
Is there a point, where maybe at the end of 'twenty two you start to it.
It's kind of a wash in terms of the saves versus the upfront expenses or just kind of looking for the timing of of both expenses is that front end loaded and that savings sort of.
In the second half.
If you could comment on just the timing of that.
Yes, I think there may be a little bit of front end loading on the costs, obviously to get the project going in the first couple, but I think we will get some cost saves also.
As we work through this and we make some decisions.
What the organization will look like down the road so.
I think it's probably relatively ease even.
Speaker 4: you know, actually the two amounts are pretty close as well.
Actually the two amounts are pretty close as well so.
Speaker 4: We've kind of viewed this if we can get this done and we can have a run rate that's got a one year
We've kind of viewed this if we can get this done and we can have a run rate that's kind of one year payback to what it cost us to get this done and we think that's a pretty good consistent save going forward for the cost, but we do expect to be able to get some of the expenses out during 2022, we won't be able to get all of them out.
Speaker 3: But we do expect to be able to get some of the expenses out during 2022. We won't be able to get all of them out, but we will be able to start.
But we will be able to start to.
It's not like we're going to have all of the expenses incurred in the charter consolidation and then we don't get any expense relief until the very end thats not the way it will be.
Speaker 5: that it, so it sounds like it, you know, get over the hump at the initial part and then additional expenses seem to be offset by saves and it would be pretty minimal impact going forward and then you begin to outstrip on savings.
Got it so it sounds like you could get over the hump, but the initial part and then.
Additional expenses seem to be offset by stage it would be pretty minimal impact.
Going forward and then you begin to outstrip on savings.
Yes, and then assuming we can continue to grow we will get to a point, where we believe will be more efficient.
Speaker 4: Yeah and then and then assuming we can continue to grow you know we'll get to a point where we we believe will be more efficient given that one charter and not have to do the redundancy so we can leverage.
Given one charter and not have to do the redundancies. So we can leverage future growth when we get towards the end of this a lot better so as we did and we did.
Did some of our customer compass work, we believe that we will add capacity through this as well as Brian was mentioning we grow we won't have to add additional ftes to support that growth.
Speaker 3: Through this as well, as Brian was mentioning. So as we grow, we won'.
Speaker 5: Got it. Okay. I, sorry, one last one. Just the, I got the sense, did you pull forward some of the tech spend and other projects that you have going that may have led to, I mean, maybe just an update on where those costs are. If you look at the...
Okay.
Sorry, one last one just.
I got the sense did you pull forward some of the tech spend and other projects that you have going that may have led to.
And maybe just an update on where those costs are if you look at the.
Speaker 5: checks items on that slide. You've got quite a bit complete, so I'm trying to get a sense for where you sit on.
<unk> items on that slide you have got quite a bit complete so I'm trying to get a sense for where you sit on the.
Speaker 5: The expenses of that might be embedded in your guidance, but just kind of wanted to update specifically on where you are with the project.
The expenses that might be embedded in here.
Guidance, but just kind of wanted to update specifically on where you are with the projects.
Yes, I think we're making good progress we still have some that are not what we call landed yet to get on the deck before we start consolidating.
Speaker 4: Yeah, I think we're making good progress. We still have some that have not, what we call landed yet, to get on the deck before we start consolidating.
But those are.
Speaker 4: on a meeting even as late as this morning are progressing as planned and we you know I think you'll see this cost that we have both the consult
Based on our meeting even as late as this morning are progressing as planned and we.
I think youll see this cost so we have both the consulting cost in the temp people, we've got and helping us get these done faster.
Speaker 4: Those costs will come down a little bit and some of them will then shift and their focus will be on to the
Those costs will come down a little bit and some of them will then shift and.
Our focus will be on to the charter consolidation, which will.
Heart flowing through the recurring line and then when that's done they should.
Should go away, so that's kind of a thought of.
How expenses should kind of work through here.
Okay. Thank you.
Thank you.
Speaker 1: Our next question comes from the line of Terry McAvoy with season. The line is open.
Our next question comes from the line of Terry Mcevoy with Stephens. Your line is open.
Hi, good afternoon, everyone.
Speaker 5: Maybe start a question for you, Brian . I guess when you think about the outlook for 22 and I appreciate your thoughts earlier, do you think you can grow revenue faster than expenses? It sounds like mid-single-digit growth and net interest income, flat fees. But on the expense side, you seem to be a little bit cautious given wage inflation and just pressure overall. Yeah, I've-
Hi, Terry.
Maybe a question for you Brian .
I guess when you think about the outlook for 'twenty, two and I. Appreciate your thoughts earlier do you think you can grow revenue faster than expenses. It sounds like mid single digit growth in net interest income flat fees, but on the expense side, you seemed a little bit cautious given way.
And wage inflation and just pressure overall.
Yes, I think ex PPP again because.
Speaker 4: That's pretty much done now. I think when you take that out and you look at the core revenue growth, it can grow faster than expenses.
That's pretty much done now I think when you take that out and you look at the core revenue growth.
It can grow faster than expenses.
Again, my biggest worry as you heard me say it is unless we get.
This inflation that just will not go away, but I think I think even with that we can we can get positive leverage.
Speaker 6: And then just looking at the average balance sheet, C&I yields XPPP really came down the 433 to 402 and had quite a bit of pressure on low yields overall. Specific to the C&I, is that the ag kind of food ag business that kind of was added to the balance sheet, or is that just kind of market-market pressure?
Okay.
And then just looking at the average balance sheet C&I yields ex PPP really came down to $4 33 to four O two kind of quite a bit of pressure on loan yields overall.
Specific to the C&I is that the the egg.
Kind of food AG business that kind of was added to the balance sheet or is that just kind of market market pressure.
So Sherri I think it's a fair amount of market pressure, but also.
Speaker 3: I think it's a fair amount of market pressure, but also
I think that we are.
Bringing on a better quality of customer so the pricing is having.
Speaker 3: better quality of customer. So the pricing is having
Speaker 3: lower and we're seeing it reflected in our atriple alfunding. So I think it's a quality of customer, it's market conditions and
Is lower and we're seeing it reflected in our Triple L. Fundings. So I think it's a quality of customer its market conditions.
<unk>.
I think I think it's also Terry where some of the.
Lower.
Amortization for our purchase accounting discounts are coming through there as well as just trying to cheer that's pretty sure that debt.
A part of it as well.
Okay.
Speaker 4: And then just last question here, 50 basis point increase in rates, if I take 16 plus 11, does that equal $27 million in annualized net interest income? Is my math correct there, Brian ? That would be the annualized amount, and that's what you'll see in 2023, assuming no other changes. Yes, you're correct.
And then just.
Just last question here.
50 basis point increase in rates, if I take 16, plus 11 does that equaled $27 million.
And annualized net interest income is my math correct there Brian .
B, the annualized amount and Thats, what youll see in 2023, assuming no. Other changes that will just yes, youre correct perfect. Okay. I appreciate that thanks, everyone.
Thanks Terry.
Speaker 1: Thank you. Our next question comes from the line of Angie Lice with Piper Sandler. The line of the whole...
Thank you.
Our next question comes from the line of Andrew Leisch with Piper Sandler Your line is open.
Speaker 5: Hey guys, thanks for picking the questions. You've actually covered most of what I wanted to go over, but it's on the loan pipeline and the loan growth. I'm just curious, what are your customers telling you and what's driving some of this growth? Is it market share gains? Is there any new borrowing yet from clients? And then are there any locations that are going better than others?
Hey, guys. Thanks, Thanks for taking the questions.
Covered most of what I wanted to go over but some on.
On the loan pipeline and the loan growth I'm just curious what what are your customers telling you in what's driving some of the scrubbers are market share gains is there any new borrowing yet from from clients and then are there any locations that are doing better than others.
Speaker 3: I would say a lot of our growth, just quarter as well as what's in the pipeline is coming from our western and southwestern markets that grow.
Yes, I would say a lot of our growth.
This quarter as well as what's in the pipeline is coming from our western and southwestern markets. They are growing a little bit faster than here in the Midwest also the agribusiness group.
It has a fairly significant pipeline, but it's it's gaining market share, but also our customers are starting to spend we are seeing a fair amount of cash.
Speaker 3: gaining market share, but also our customers are starting to spend. We're seeing a fair amount of capital expenditures now going on. Some of that is...
Capital expenditures now.
Going on.
Some of that is because they see there.
Increased demand they feel it will be consistent it's not just a spike up and then back down. So there are a lot more confident.
In capital expenditure spending we really haven't seen much in the way of line of credit utilization increases it was like up <unk>.
Speaker 3: really haven't seen much in the way of line of credit utilization increases. It was like up a percent.
Percent I mean, just a little bit so it's not really on the utilization side, we haven't seen that yet.
Speaker 7: Got it. And then so it would be safe to say like the loans out west with the pricing is more competitive than when you're what you're getting elsewhere. Just after we look through, look through and see how far some of these loan yields fell in the quarter. Well, what we
Got it.
It would be safe to say like the loans out west with the pricing is more competitive than when youre, what youre getting elsewhere to start after we looking through look through and see.
Some of these loan yields fell in the quarter.
Well, we touched a little bit on that and Brian jump in here, but as we can.
Speaker 3: going up market a little bit into really more of a middle market space, whether it's in the west or the midwest.
<unk> are going up market, a little bit into really more of a middle market space, whether it's in the west to the Midwest pricing is much more competitive.
We are getting a little better pricing out west, but not like it is on the.
Say loans $5 million and below.
Speaker 4: I think what I'm looking at, at least the last month, I looked at December . I always look at that right before the meeting here.
Yes, I think what I looking at at least the last months I looked at December I always look at that right before the meeting here.
Interesting the Midwest the.
Pricing seems tighter.
Speaker 4: West has a wider range and I think that's you know these larger maybe better credit qualities are kind of to get
<unk> has a wider range and I think thats. These larger maybe better credit qualities are tending to get pricing at or even slightly below what we see in the Midwest. But then there are some of the normal stuff that we've always done for years.
Speaker 4: But then there are some, the normal stuff that we've always done for years, it seems to have a little bit higher price. So there's...
It seems to have a little bit higher price. So there is a wider dispersion that we're seeing in pricing than we maybe had historically.
Speaker 4: Got to tell you some of these new loans are coming out of the floor. Pressing, are you able to get more Treasury management and card services along with that? To help the profitability? Yeah, and I think that also, and Bruce can jump in here. I think capital market fees are going to also pay a little bit more for us. Yes.
Got it.
Some of these new loans are coming on board pricing are you able to get more treasury management and card services along with that.
<unk> ability.
Yeah, and I think also and Bruce can jump in here I think capital market fees are going to also provide a little bit more of a for US yeah. So thats been broker.
<unk> to go a little bit upmarket.
Better quality.
Then it will increase our ability to cross sell into the products that we have with its treasury management, whether it's card whether it's interest rate swaps.
Over time, you'll see us improve our fee income from those customers.
Got it okay. Thanks for taking the questions I'll step back.
Thank you.
Speaker 1: Our next question comes from the line of David Long with Raymond Jane. Your line is open.
Our next question comes from the line of David Long with Raymond James Your line is open.
Good afternoon, everyone.
Thanks, David.
Speaker 4: Hey Brian , thank you for the update on the 50 basis point impact within that guide for your net interest income. What type of deposit beta are you assuming? And is that deposit beta for your whole deposit base or just your interest bearing deposits? So it is just for the interest bearing deposits. the
Hey, Brian . Thank you for the update on the 50 basis point impact.
Within within that guide.
For your net interest income what type of deposit beta are you assuming is that deposit beta for your whole deposit base or just your interest bearing deposits.
So.
It is just for the interest bearing deposits.
Typically.
Our non maturity deposits Cds out, which is pretty small for us anyway.
Speaker 4: our normal is probably 40 to 45% data as rates go up so you know 40 40%
I think our normal is probably 40% to 45% beta as rates go up so.
<unk>.
40% of the fed move is what our rates.
Because of our strong base and because we're starting at such a low point.
Speaker 4: We assumed relatively no beta to the first 25 basis points. Then we assumed 15% or 15 beta on those deposits. The reason being we do have some small portion that's
We assumed relatively no beta the first 25 basis points and I think we assumed <unk>.
Percent or 15 beta on those deposits. The reason being we do have some small portion that's index.
So as rates go up we will those will have to go up.
But much less than what we normally would model.
In that 40% to 45% range.
Speaker 5: Got it. Okay. Great. Thank you. And then, you know, with the talking about the expense side, and I think you mentioned you expected to come back down closer to the third quarter level for the next few quarters. And that is exclusive of the charter consolidation expenses, correct?
Got it okay, great. Thank you and then.
With the talking about the expense side and I think you mentioned you expect it to come back down closer to the third quarter level for the next two quarters.
That is exclusive of the charter consolidation expenses correct.
Yes.
Would be correct.
Speaker 5: Okay, great. That's it for me. Thank you. Appreciate it.
Okay, Okay, great alright.
That's it for me. Thank you I appreciate it.
Speaker 7: Thank you. Our next question comes from the line of Damon Dere Monti with KBW. Your line is open. Okay, good afternoon guys. you
Thank you. Our next question comes from the line of Damon Delmonte with K BW. Your line is open.
Hey, good afternoon, guys hope everybody is doing well today.
Correct.
Speaker 7: Great. Just to kind of continue on the expense topic here, you mentioned that probably another 13 branches or 10% of the footprint looking to consolidate in 2022. Does any timing around that and any potential financial impact we could factor in?
Great.
Kind of continuing on the expense topic here.
You mentioned that probably another 13 branches or 10% of the.
Print looking to consolidate in 2022 is there any timing around that and any potential financial impact we could kind of factor in.
Yes, I think the timing for that is probably going to be late in the second quarter into the third quarter, just with regulatory filings and everything else, we've got going on.
Speaker 4: I think the timing for that is probably going to be late in the second quarter, into the third quarter, just with regulatory filings and everything else we've got going on. We did those, some of those branches I mentioned, one of the things we did is we did move them to held for sale. So what that
We did though some of those brands as I mentioned one of the things. We did is we did move them for to held for sale. So what that does is it starts to slow down some of the depreciation on those buildings, we pulled the mark.
The value then at whatever we mark them more of the book value. If we didn't have to mark them.
So we can get them sold.
So theres a little bit of expense that came out relative to what we're run rate was coming in but the biggest thing will be late second quarter early third quarter time.
Okay.
And then.
Speaker 8: Is there a way like is there projected cost savings associated with that or those savings be reallocated to other areas of the operation?
Is there a way that is their projected cost savings associated with that or were those savings be reallocated to other areas of the operation.
Speaker 4: I think we'll try to hold on to those cost saves.
No I think we will we will try to hold on to those cost saves.
Speaker 4: know, I don't have the exact number here, but you know, typically
I don't have the exact number here, but typically.
We save probably three to 400000 per branch depends on the size depends on a lot of things, but thats, probably an average so you'll start to see some of that come in.
Speaker 4: 400,000 per branch depends on the size depends on a lot of things with that's probably
Later on in the second quarter.
Hopefully more bigger piece in the third quarter.
Speaker 7: So that's kind of what's helping you keep that like 30 to $31.99 level. I'm pretty much. Yeah. Or 31 to $31 to $32.99 level. Well, that's the scene.
So that's kind of what's helping you keep that like 30% to $31 million level, then pretty much yes.
Sorry, $31 million to $32 million level.
That's the fee income thats on the expense side, Dave Damon So that'll help us I'm, sorry, I wasn't there onside that yes.
Speaker 4: I'm sorry, I look at the wrong side there. Yeah, sorry. We need some of that because obviously if the first quarter is a hundred and eight, remaining quarters to come down to be able to get our year over year to the
We need some of that because obviously if the first quarter's 108, we've got to get the remaining quarters to come down to be able to get our year over year to be.
That minimal increase that I talked about so there is some work to be done on the expense side to get there.
Speaker 8: Got it. Okay. Great. And then with respect to, you know, the reserve level, now I think it's at the 129 XPPP at the end of the quarter. You know, with all this growth that's coming on, how do we think about the provision level going forward?
Got it okay, great and then with respect to.
The reserve level now I think you said of the 129 ex PPP at the end of the quarter.
With all this growth that is coming on how do we think about the provision level going forward.
Yes.
Speaker 4: Nathan can jump in here too. I think we are at $129, assuming that the economy holds together. We get past COVID and we get to maybe a little bit more stable place. We think that our probably normalized run rate is probably in the closer to...
And Nathan can jump in here too I think we are at 129, assuming.
The economy holds together you get kind of past Covid and.
We get to maybe a little bit more stable place.
We think that our.
Probably normalized run rate is probably in the closer to one <unk>, maybe $1 22 to three somewhere in there between 121 25.
Loans ex PPP, so we have.
I think probably.
Call it.
Eight nine basis points to come down.
And that would be coming out of what we are holding an economic component of the of the reserve.
So then once you get past mid year, assuming that that happens and when the economy holds together.
And you'll start seeing loans.
Have to be provided for because they won't have the coverage and.
Normalized.
<unk> that's probably.
$3 million to $6 million a quarter depending.
Depending upon we believe charge offs will stay low and if we can continue to grow $2 million to $3 million $2 million to $300 million quarter.
That's probably the range.
Normalized would be.
Got it okay. That's helpful.
Speaker 3: And then I guess with lastly, you know, with the Agri Business, Agri Business, could just talk a little bit more about, you know, some of the types of loans that they're making on the size of them and just give a little bit more kind of color on this new business line. Yeah, so I would say...
Thank you and then I guess, just lastly, with the agribusiness agribusiness.
Could you just talk a little bit more about some of the types of loans out there that theyre, making and the size of them and just give a little bit more kind of color on this new business line.
Okay.
Yes, so I would say.
The size is anywhere from five to say $25 million.
Speaker 3: We do have some rowers, but we also have process.
We do have some growers, but we also have processors.
And so it's not just pure kind of AG.
Speaker 3: So it's not just pure kind of ag. I mean, it's truly agribusiness. And it's a combination of not sparing, leafy vegetables.
I mean, it's truly agribusiness.
And it's a combination of of nuts berries leafy vegetables, I mean, it's sort of what you would expect coming out of.
The Central Valley of California, It's a wide range.
Got it Okay. That's helpful. That's all I had thank you very much.
Thank you.
Speaker 1: As they are no further questions at this time, I would now like to turn the call back over to Mr. Lee for closing remarks.
As there are no further questions at this time I would now like to turn the call back over to Mr. Li for closing remarks.
Thank you to wander.
Speaker 3: Closing, HTLF had a solid fourth quarter in a strong year.
In closing <unk> had a solid fourth quarter and a strong year.
In 2021 organic loan growth was $689 million or seven 6%.
Speaker 3: Organic loan growth was 689 million or 7.6 percent.
Organic non time deposit growth was one 7 billion or 12, 3%.
Speaker 3: 1.7 billion or 12.3
Speaker 3: 42% of our deposits are in non-intersparing accounts, positioning us well in a rising rate environment.
42% of our deposits are in noninterest bearing accounts positioning us well in a rising rate environment.
Speaker 3: We strategically invested for growth through our talent acquisition strategy, and we began realigning the organizational structure of the company through charter consolidation. Our momentum continues into 2022, and we're well-positioned.
We strategically invested for growth through our talent acquisition strategy and.
And we began realigning the organizational structure of the company through charter consolidation.
Our momentum continues into 2022.
We're well positioned to continue driving growth I'd.
I'd like to thank everyone for joining us today.
Our next quarterly earnings call will be in late April .
Have a good evening.
Speaker 1: Ladies and gentlemen, just can close to those conference calls. Thank you for participating. You may now disconnect.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
No.
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