Q1 2022 NBT Bancorp Inc Earnings Call
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Okay.
Good day everyone.
Welcome to the MBT Bancorp first quarter 2020 financial results Conference call.
Is being recorded and has been made accessible to the public in accordance with the SEC's regulation FD.
Corresponding presentation slides can be found on the company's website at BP Bancorp Dot com.
Before the call begin mbps management would like to remind listeners that as noted on slide two today's presentation may contain forward looking statements as defined by the Securities and Exchange Commission actual results may differ from those projected in addition, certain non GE AAP measures will be discussed reconciliations.
For these numbers are contained within the appendix of today's presentation.
At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time.
Anyone require operator assistance. Please press the Starkey and then zero on your Touchtone telephone as a reminder, this call is being recorded I would now like to turn the conference over to NBC Bancorp, President and CEO , John <unk>, What Jr. For his opening remarks, Mr. Watt. Please begin.
Good morning, and thank you. Thank you all for participating in our earnings call covering MBT Banc Corp's first quarter 2022 results.
Joining me today are our Chief Financial Officer, Scott, Kingsley, and our Chief accounting officer and at firms.
We are extremely pleased with our results for the first quarter of 2022 <unk>.
Including earnings per share of <unk> 90 <unk>.
Return on average assets of $1 32, and return on average tangible common equity of 16, 9%.
Loan growth was strong and in excess of what we typically experience in our markets at the start of the year.
Our commercial business generated $250 million in loan originations. We also experienced an uptick in line of credit usage.
It's clear to us that our customers are successfully navigating the challenging operating environment and we are there to help them.
Loan pipelines across our platform are strong and active in the first quarter going into the second quarter commercial pipelines are particularly robust.
The first quarter performance of our son gauge solar Fintech partnership and the rebound of indirect auto are also notable.
Generally C&I, CRE and consumer loans, including mortgage all group.
Our fee based businesses continued their strong performance with total noninterest income at nearly 35% of total revenue for the first quarter.
And BT is getting it done because we have a talented and dedicated team across our seven state footprint from the poconos to the White mountains and beyond.
And their work makes our success possible.
Their focus on our customers is our competitive advantage and that was validated by two powerful independent third party acknowledgment this month.
In the J D. Power's 2022 U S retail banking satisfaction study NPT Bank ranked number two in the New York Tri State region.
This is a very significant confirmation of our strategies around customer engagement and satisfaction.
<unk> was also named one of Forbes world's best banks for 2022.
The U S banks recognized by Forbes, we are the highest ranked bank based in New York State and the highest ranked bank operating in Connecticut and Vermont.
Finally, this quarter, we welcomed a new executive to the leadership team.
Randy Sparks joined Us on the executive management team as our general counsel.
So with that said Scott I'll turn the call over to you and we can talk in greater detail about our financial performance in the first Q.
And following Scott's remarks, we look forward to taking your questions.
Thank you John and good morning.
Turning to slide four of our earnings presentation, our first quarter earnings per share were <unk> 90.
Which was consistent with the first quarter of 2021, excluding securities gains and losses, and four cents a share higher than the fourth quarter of last year. These.
These results were achieved despite a $4 2 million or eight cents a share decline in PPP income recognition compared to the first quarter of last year, and a $5 $6 million decline in PPP income from the fourth quarter of 2021 or 10 cents a share.
The increase in net interest income over the two comparative quarters of last year was the result of solid organic loan growth and productive incremental deployment of a portion of our excess liquidity into investment securities.
Despite this improvement in earning asset mix. The company is still carried a significant level of overnight funds at the federal reserve at quarter end, leaving us with still more improvement opportunities.
We recorded a loan loss provision expense of $600000 in the first quarter compared to a provision benefit of $2 8 million in the first quarter of 2021, and a provision expense of $3 1 million in the fourth quarter of last year.
Net charge offs in the first quarter were $2 6 million or 14 basis points of loans compared to 13 basis points of loans in the first quarter of 2021, and 22 basis points of loans in the linked fourth quarter, our reserve coverage decreased to $1, one 8% of loans from 1% to 4% at the end of.
<unk> 2021.
Slide five shows trends in outstanding loans on a core basis, excluding PPP loans were up $202 million for the quarter and included strength in both our consumer and commercial portfolios.
Our total PPP balances as of first quarter and 2022, we're just over $50 million with forgiveness almost complete for both the 2020 and 2021 vintage loans, we recognized $2 million of interest and fees associated with PPP lending during the quarter and have approximately $1 six.
And unamortized fees remaining.
Would expect most of these remaining fees to be recognized in the next few quarters.
Excluding PPP recognition loan yields were down just one basis point from the fourth quarter of 2021, meaning new volume rate and blended portfolio yields were essentially the same by first quarter end.
Moving now to slide six deposits were up $227 million for the quarter and included growth in municipal deposits as seasonally expected.
Balances continued to remain elevated from liquidity associated with various government support programs as well as higher consumer savings levels, our quarterly cost of deposits declined to seven basis points and we continue to add new accounts.
On slide seven you'll see the detailed changes in our net interest income and margin net interest income increased $1 $2 million as compared to the first quarter of last year, but was up $5 $4 million, excluding PPP recognition reflective of year over year loan growth and additional investment security purchases.
Reported first quarter net interest margin was 295% and $3 one 7%, excluding PPP income recognition and the impact of excess liquidity.
Looking forward with interest rates rising across the yield curve, earning assets are expected to begin to reprice at levels above our blended portfolio yields in the second quarter and as such we would expect to see some opportunities for core margin improvement. In addition, our balance sheet continues to exhibit a meaningful level of asset.
<unk>.
Slide eight shows trends in noninterest income excluding securities gains and losses, our fee income was up 4% on a linked quarter basis to $42 8 million.
More broadly non spread revenue was 35% of our total revenue in the first quarter of 2022 and remains a key strength and value driver for NBC.
Our wealth management insurance and retirement plan administration businesses experienced strong year over year growth from new business wins market appreciation and certain seasonal activity based revenues.
Banking fees improved almost 17% from the pandemic impacted first quarter of 2021, principally from higher card related services.
During the quarter the company made some adjustments to certain customer non sufficient funds processing practices and expect once fully implemented. These changes will reduce service charge fee income by approximately <unk> <unk> per share per quarter.
Also as a reminder, the bank will be subject to the provisions of the Durbin Amendment to the Dodd Frank Act beginning in the third quarter of this year, which caps are per transaction compensatory opportunity for debit interchange. We estimate this will reduce quarterly debit card interchange income by approximately $3 $7 million or.
Almost seven a share.
Turning to noninterest expense slide on non interest effect on slide nine our total operating expenses were $72 $1 million for the quarter, which was $4 3 million or six 3% above the first quarter of 2021.
Salaries and employee benefit costs of $45 $5 million were up 9% over the prior year and included merit related salary increases as well as higher performance based incentive compensation accruals compared to a much more muted first quarter of last year.
Total operating expenses were lower than the linked fourth quarter of 2021 reflective of two less payroll days as well as certain seasonally higher costs incurred in the fourth quarter consistent with historical trends.
We would expect core operating expenses to drift upward over the next several quarters, including the full quarter impact of 2022 merit related wage increases increases which were awarded in March as well as our continued efforts to fill a higher than historical level of open positions in support of our customer engagement and growth objectives.
In addition to investing in our people, we expect to continue to invest in technology related applications and tools in order to advance our customer facing and processing infrastructure.
On slides 10, and 11, we provide an overview of key asset quality metrics that a walk forward of our loan loss reserve changes as I previously mentioned net charge offs were 14 basis points of loans in the first quarter of 2022 compared to 22 basis points from the prior quarter, both NPL and NPA declined again this quarter.
We are continuing to benefit from our conservative underwriting and certainly observed credit metrics have been much better it would've been suggested by the seasonal model 12 to 24 months ago.
We continue to start each quarter with the underlying assumption that the combination of loan growth and net charge offs will be a proxy for the provision for loan losses before the consideration of any changes in macroeconomic conditions and forecast, which has continued to exhibit improvements since late 2020.
As I wrap up my prepared remarks, some closing thoughts we started 2022 on strong footing and we are pleased with the fundamental results achieved in the first quarter stable to improving net interest income solid results from our recurring fee income lines sustained expense discipline and exceptional credit quality outcomes have been clear highlights.
Our capital accumulation results over the past several quarters continues to put us in an enviable position as we consider growth opportunities for the balance of 2022 and beyond with that we're happy to answer any questions. You may have at this time.
Thank you anyone with a question at this time from Star then one on your Touchtone telephone.
If your question has been answered or you wish to remove yourself from the queue. Please.
One moment for questions.
Our question comes from Alex portal.
Piper Sandler your line is open.
Hey, good morning, guys.
Good morning, good morning morning.
Hey, first off.
Some of your commentary on the NSF fee changes made during the quarter can you just talk to us a little bit about exactly what you did and why you did it.
So we.
We had spent a lot of time over the last several years adjusting our programs to be more indicative of what the customers needs are.
And what the what the market expectations for providing that service.
And so our and fairness.
As Steph and overdraft fees are down over 50% from seven or eight or 10 years ago.
But to answer your question specifically for the quarter. When we did this quarter was kind of looked at the way we look at what we would call unavailable funds fees, meaning we can actually see that the customer either has a historical pattern or alive deposit that's likely to hit their accounts over the next couple of two or three days.
And so.
Our actions were basically to modify our processing to acknowledge that or to provide some grace period relative to.
Putting the customer avoids a fee when we actually have an expectation that the account will actually be supplied enough to be able to cover the.
The overdraft.
Yes.
That's great color. Thanks, Scott.
And then following up on your commentary John about the commercial pipelines being particularly robust going into the second quarter can you just talk maybe a little bit about kind of the geographies that you are seeing.
Strength in and sort of the types of customers and.
Whether or not you think that there's kind of some sustainability as the year progresses, especially as rates start to move higher.
Sure happy to do that in.
We sat with the leaders in each one of the seven states in our platform last week and went through the pipeline.
In every one of those markets, we see a nice mix of C&I.
Small business.
CRE that.
Was previously heavily focused on multifamily a little less of that now because I think.
The developer clients, we do business with see uncertainty in the supply chains and labor cost in.
Other issues associated with the construction of multifamily so we've seen that tempered a little bit, but otherwise, we see very basic manufacturing clients.
Who are building a new line in their factory improving the <unk>.
Technology, they use to create efficiency in the plant floor.
And that's across the platform those specific region.
Leads the other.
So.
How does that play out in an uprate environment I still think there's headroom here, we're still operating in.
Historically as you look back over 30 years, we're still operating in a relatively low.
Rate environment so.
These pipelines tell us that our customers have figured out how to.
In many cases manage really different difficult operational environment.
Do what they need to do to make their businesses more successful in.
We're there to help them from Maine to Connecticut across Northern New England.
In our core region in upstate New York in northeastern Pennsylvania.
Oh, that's great. Thanks, and then just a final question for me.
One of your competitors earlier this week talked about.
A little bit of a slowdown in some of the conversations regarding M&A.
Just curious kind of how your appetite changes with M&A, given the sort of the changing environment.
And if you agree that the with the commentary that the sort of the pace of conversations in the upstate.
New York market has slowed a bit.
Well I won't comment on the strategy of our competitor, although I did read that comment what I will say is.
But the conversations that we noted in our last earnings call continue in.
Across the platform there are potential.
Opportunities that strategically fit in our growth plans that.
If the timing is right and the conditions are right and.
The valuation is right.
Would engage.
I spend a lot of time, having conversations with various partners and that continues.
So.
The short answer is we're not experiencing.
Was.
Noted in.
The transcript of our competitor.
Great. Thank you for taking my questions.
Thanks.
Next question.
Our next question comes from Matthew Breese with Stephens incorporated your line is open.
Good morning.
Hey, good morning, Matt.
I was.
Scott you had mentioned on the on the NIM expectations for <unk>.
Expansion there just given.
Historically, very strong deposit beta and loan yields coming on the books at higher rates plus remix could you comment on to what extent, we might see margin expansion through the end of the year, particularly if we get 200 basis points of Fedex fed.
Fed hikes here.
So good question, Matt So.
We we probably haven't done a whole lot of prognostication thinking 200, a nurse to us during the current time spending a whole lot of time talking about weather.
50, and 50 in May and June is a real rational outcome. So kind of as a reminder, we've got a couple of billion dollars a little over two.
Variable rate instruments on the commercial side that will get that benefit lock step now the reset date might not exactly the same date the fed changes.
Underlying fed funds rate, the net flow through to sulfur or whatever our indexes.
But the other piece that's critical is that we do have.
A full year basis.
Roughly two two and a quarter $1 billion worth of cash flows.
Our earning asset base that presumptive <unk>, we would get an opportunity to find assets with slightly higher yields than that.
So two things important on that back to your question about net interest margin improvement is we've got actually priced that those new numbers and you remember theres a lot of people with a lot of advanced liquidity out there today.
So some of that is slow to be coming to fruition, even since the fed change in March and secondarily, that's a faster move up.
Relative to what Youre depositors' might be thinking.
I still have an extreme amount of confidence in our core accounts being able to stay lower for longer.
But do we have some institutional customers. Some large corporate customers that may say, hey, I think I think I should enjoy a better yield on my on my depository base today.
And in fairness nothing right now you can get it from us, but there might be alternative instruments off our balance sheet that once rates are up even a 100 that are potentially avail themselves for some of those folks so.
I'm with you, 100% I think we will enjoy margin expansion and I think it'll be early as early as mid to second quarter.
But I think it'll be pretty methodical, even with $2 50 on.
On the way up but again, we'll remain a cheerleader for the higher rates.
Assuming that those higher rates don't somehow pinch our overall customer base relative to servicing.
So we think that's an issue in the first hundred we probably don't know.
Got it Okay, and then switching to loan growth I thought it was really interesting just how diverse loan growth was this quarter I mean, it came from specialty specialty lending dealer commercial categories.
You had mentioned a strong pipeline how is this.
How sustainable is this level of loan growth. It strikes me that it's probably a little bit unusual, but can we see kind of mid to high single digit growth out of the bank. This year is that what this quarter tells us.
That might be a little aggressive, but I think we need another quarter to have more visibility there we're very optimistic about the way the year started what's in the pipeline now.
There are so many variables on a macro basis that could affect it.
I don't want to guide people closer to 10.
I don't think thats appropriate but.
Right now as we look at it.
Sure.
We'll indirect for instance, repeat the same quarter. It had this quarter, maybe not but it will be healthy.
And mortgage same thing with rates popping up we still have a healthy pipeline there will it be as robust as first SKU.
Maybe a plateau is a little bit.
But with that said.
We are.
Pretty comfortable that we'll be able to drive the expectations that.
I think you guys have coming out of the last earnings call.
I think we got a nice jump on it in the first Q.
Okay.
I was looking for a little bit more help on with Scott you had mentioned that you expect expenses to drift higher and hoping you could be a bit more specific with where you think that could drift too.
Yes.
Yes. So if you remember at the end of the year I think I provided some guidance in the 73% to $74 million a quarter from a spending standpoint, and thats, probably still what we think if you blended our whole year that those numbers or not.
Out of line.
We don't do our merit increase until the third quarter of the first the third month of the first quarter.
So we're likely to get to the other two thirds of that starting in April .
That's roughly a set and a half per share the additional piece.
Our combined merit change this year, it's probably closer to a four handle then the three handle or two and a half handle that the companies enjoyed over the last handful of years certainly through the pandemic.
And theres been spots, where we've needed to be a little bit more.
But in order to bring new people in the organization, we needed to step that up a little bit in certain cases, so we're certainly not immune from some of those market inflationary conditions.
The other piece I would just just to call. Your attention to is we tend to have this uptick in certain of our expenses that happened late in the third quarter and into the fourth quarter. So as much as certain payroll taxes and other things equity compensation is high in the first quarter. Some of those other quote discretionary relative to time.
<unk> expenses tend to happen a little bit later in the year.
So if.
If we could continue to operate and grow at the first quarter's operating expense level. We've been exceptionally pleased I suspect, we creep up back into that $73 74 window.
We get there next quarter.
And maybe a little bit more as we get into the balance of the year by my math, Matt We get an extra payroll day in the second quarter two in the third quarter I think will be one in the fourth quarter. This year interestingly enough, but we get to we get another earnings day in the second quarter and two more in the third and the fourth quarter earnings days are more powerful than payroll base for us.
On a net basis so.
Tradeoff is fine for us, but that's kind of what we're thinking right now.
Got some decent and productive underlying technology projects underway that most of them started last year, but we've got a couple of important things. We're working on this year and those will be a little bit of incremental expense I think you will see in how we.
Put together our income statement this quarter, we did some reclassifications of some items and separated occupancy and equipment into occupancy and technology and data related services, just as or more.
For us that's how we're managing it and Thats, just we think a better presentation of where our spending that today. So.
Kind of a long way around getting to the point of the first quarter was probably the low point of the year from an operating expense standpoint, but I don't think we're going to be.
Tons and tons above that for the balance of the year.
Great.
Last one just in regards to credit.
Obviously this quarter was solid on all of the credit credit metrics front.
But you do have a good line of sight with your specialty finance. Your dealer book are you seeing any incremental signs of distress on the consumer level, particularly at the lower end and then as a follow up to that if we do get the 200 basis points of fed hikes or potentially more as we look into 2023.
At what point do you have to worry about.
Credit quality deteriorating into a higher rate environment and whats your customers ability to withstand that kind of rate increase.
So great question, a couple of thoughts there.
What's the Canary in the coal mine past due and charge off.
Levels in our consumer businesses, particularly the unsecured consumer businesses.
I'll tell.
Tell you coming out of a recent review that we're not seeing material negative movement in either one of those measurements. So.
Past due and charge offs still.
Very low.
We see still in our.
Retail checking accounts excess balances in excess of what is normally carried by our customers that tells US there is room to absorb the expense of.
Additional rate hikes. However, implied in your question is a return to.
A reality that is normalized and that will come we all know that the question is how quickly.
We don't see it on the immediate horizon.
Hi.
Going into next year would we be more normalized yet perhaps it will manifest itself on the consumer side.
But right now, we're not feeling it or seen it.
But we're prepared for it when it comes so that's our current sense.
And Matt I would just add to that too.
Backdrop, what do we feel really comfortable with one <unk> coverage ratio on the whole portfolio based on the mix of our.
The assets that are in our loan portfolio, which we break out in some level of detail, but to your point, we call out. The fact that reserve coverage in those consumer unsecured lines has to be higher.
From a seasonal standpoint, and second piece is 325% of coverage on.
Today's nonperforming loans gives it gives us what we think is.
A lot of room relative to.
Thinking through some modest level of discomfort as rates start to go up.
With the rest of the asset based portfolio.
But we're cognizant of the fact that we're making loans today in most of our categories, whether it's residential mortgage auto commercial real estate.
At asset values that are near historical highs. So the underlying valuation of the asset, but there's no sign that those valuations are going to get meaning.
Meaningfully eroded by slightly higher rates, even 200 basis points.
So feel pretty good feel pretty comfortable about that.
The jury is still out in the Cecil World the moment somebody at Moody's puts the word recession risks into some of those forecasts.
The world the banking industry have to start thinking about how it's forecasted seasonal reserves probably is that going to happen. This year, maybe not maybe thats a 23 discussion right.
Great well I appreciate you taking my questions. Thank you.
Appreciate it thanks, Matt.
As a reminder, anyone with a question please.
Then one on your Touchtone telephone.
Our next question comes from Chris O'connell.
Your line is open.
Hi, guys.
Hey, good morning.
Good morning.
Just first start on the buyback you guys.
Had a strong quarter this quarter and indicated pretty good start with <unk>.
How should we think about the buyback going forward in regulatory capital and PUC held in.
While this quarter.
But how are you guys thinking about capital going forward in terms of whats the most constraining ratio or what youre focused.
<unk>.
Good question, Chris and actually thanks for bringing it up.
So youre right. We did a couple of hundred thousand shares in the first quarter that was to address natural equity planned creep that we thought we would probably experienced in 2022.
And then we thought we opportunistically.
<unk> got another 200000 early in the second quarter at prices that we thought were reasonably attractive.
We're also creating capital a little bit faster than we forecasted as well. So net net are we kind of exactly where we thought we would be absolutely.
So.
Your question relative to.
Capital utilization and any constraints certainly tangible equity doesn't constrain us.
On the regulatory side, we tend to focus on regulatory tier one capital because that tends to be the only question that our principal regulators. The OCC asked us about when we when we try to do things relative to organic expansion or potentially expansion via acquisition.
Tends to be where there are pinch point is.
We also are very cognizant of making sure we understand.
Productive utilization of our capital if we got to the point, where we were fortunate enough to be involved in a transaction would we use some cash portion of the transaction, we've got holding company cash flexibility to be able to do that as well.
So I wouldn't call it anything restrictive today, if I go one step further Chris if you start to look at CET, one numbers above 12% and total risk based capital above 15%.
Sort of.
Being flippant, but that sounds ridiculous 15 is still way too high. So it gives us lots of room to think about how we want to do that from a mix of asset standpoint.
Great I appreciate the color there.
And then.
The retirement plan administration I know it's a.
Seasonally strong quarter.
Little bit better than expected this quarter anything in particular driving that are going to.
Reverse a bit in <unk>.
And then how does the.
Acquisition.
<unk> been Haas work.
Impact financially.
Right. So so.
Two items there.
The first quarter typically the most robust quarter.
In the retirement plan administration business it actually can be your onboarding your new customers for the first quarter.
You've probably got some more active we had more activity based revenue opportunities in terms of planned restatement fees actuarial services tend to be quite robust in the first quarter.
So I think if we had another showing like we had in the first quarter in the second quarter, we will be extremely pleased with that.
That business is doing very well the run rate and the trajectory relative to opportunities for growth are.
Very well a matter of fact, we're spending time in that organization significant effort, making sure our underlying structure is sound enough to carry larger levels of revenue because we think that that business.
Running close to $50 million from a run rate standpoint.
With a little bit of additional work relative to infrastructure should be able to carry 50% more than that.
Ed.
Like our opportunities in that space a lot.
The.
The other piece I would say relative to just sheer timing.
There is a little bit of market influence on.
On both the retirement plan administration space in wealth management first quarter was probably down to stable for our kind of mix of assets and in wealth management and in the retirement plan administration space, but again, we're not just completely a flavor of the equity markets in any of those businesses. So.
Might we see a modest tick down if the market continues to be a little bit volatile and fragile little bit.
But we don't think it's a meaningful number.
Okay.
In the aggregate and then.
You asked me about the Cleveland House, where the $150 million of assets under administration, most of which are in the retirement plan administration space in other words, youre managing retirement assets and.
And interestingly enough.
The desirability of that acquisition was a lot of those customers are already customers of the epic platform.
I think we're thinking seven to $800000 of revenue run rate. So certainly not large but very additive in terms of the qualitative mix that it brings to our combined environment.
Great and that 700 800 annual rate correct.
Correct.
Yes.
Great and then.
Back to the margin.
<unk>.
When you guys put the excess liquidity NIM calculation.
On the PPP.
In the release, what's the excess liquidity level or what's the amount of excess liquidity.
Being considered there.
So I think.
That's worked through that just for a second Chris, but I think were thinking that excess liquidity ended the quarter around $900 million.
Rationally, what do we think is true excess liquidity today, probably closer to $6 million to $700 million.
And.
Because again I think.
<unk> truly do go up at a much faster pace on the short term some of those money market funds and other opportunities for some of our larger institutional customers.
To make a modest duration decision and pull some of those assets often go into a short term funds are probably likely for US do we think it's more than a couple of hundred million dollars probably don't.
So.
But we will stay close to that because those are important customers of ours.
Great and how are you thinking about the deployment of that into the securities book over the next several quarters.
Well, so we've been really successful staying with the strategy of largely CMO MBS type securities that have natural cash flows coming off them targeting kind of a three to six months duration span does that group of securities extend a little bit as rates go up because prepayment speeds slowed down yes, probably a little.
Bit meaningful to our total duration of the portfolio of note.
So I still think thats the class that we like because I think we're finding opportunities there spending a little bit of time doing some research today around opportunities in the in that same duration in tax exempt securities.
Is that curves it looks like it's moved up a little bit more robust than maybe the.
The mortgage market side.
That said our plans are still to portfolio most of our residential mortgage production for the time being.
Mortgage rates have sort of gotten out of 5%, which seems high when you talked about three but on historical standards well within historical mix levels, maybe even cheap still.
So.
That's what we're thinking about on that if rates move up a little bit faster than that might there be some opportunities to get back to selling production. If the underlying rates were in the sixes maybe.
I think our ideas, even when we priced up to go on to the balance sheet, we're thinking about what would that need to price that in order to achieve a 150% to 2% gain if we were actually selling.
Great. Thanks for taking my questions.
Thank you Chris Thanks, Chris.
And I'm not showing any further questions I would now like to turn the call back to John for his closing remarks.
Alright, Thank you and thank all of you for taking time. This morning to hear the story of first quarter at MPT.
As I started we're pretty proud of.
The way we came out of the box.
The first quarter and we have a lot of momentum in.
That's all a function of the team executing.
So.
Again, thanks for your time and look forward to.
Hearing from you in the next quarter. Thanks, operator.
Thank you Mr. Wang This concludes our program you may now disconnect and have a great day.
Sure.
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