Q1 2022 Glacier Bancorp Inc Earnings Call
Ladies and gentlemen, thank you standing by your conference call should begin momentarily again. Thank you for standing by your conference calls will begin momentarily. Thank you.
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Okay.
Thank you for standing by and welcome to the Glacier Bancorp first quarter earnings Conference call. At this time, all participants are in a listen only mode.
After the Speakers' presentation, there'll be a question and answer session.
To ask a question at that time. Please press Star then one when you touch tone telephone.
As a reminder, today's conference call is being recorded.
I would now like to turn the conference your host Mr. Randy Chesler, President and CEO , Sir you may begin all right great.
Great. Thank you Valerie.
Well good morning, and thank you for joining us today.
With me here in Kalispell. This morning is Ron Copher, our Chief Financial Officer.
Angela dose, our chief accounting officer.
Byron Pollan, our treasurer.
Tom Dolan, our chief credit administrator, and Don Chery.
Our chief administrative officer.
So we ended the quarter very encouraged by our strong results across the business that are evident in many of the key performance metrics that we will cover today.
We're better than what we expected given some of the economic uncertainty caused by the biggest quarterly increase in interest rates in decades and steadily increasing inflation.
Our leadership position in some of the best high growth markets in the country continues to be a strong tailwind for the company as we build one of the Premier community banks in the Western United States.
According to Forbes.
Top five states in the U S for GDP growth in 2021 were all in our eight state footprint, Utah, Washington, Idaho, Colorado and Arizona.
I'll touch on the business highlights first and then provide some additional thoughts on the quarter.
Net income for the quarter was $67 8 million, an increase of $17 1 million or 34% from the prior quarter and net income of $50 7 million.
Pre tax pre provision net revenue was $88 8 million versus prior quarter of $87 9 million, an increase of 900000 or 1%.
The loan portfolio, excluding triple P loans had very strong organic growth during the quarter of $407 million or 12% annualized. This is a very strong first quarter historically, our first quarters had been a bit more subdued.
Net interest income in the quarter on a tax equivalent basis was 190 million each.
Excluding payroll protection program loans or Triple P loans.
Net interest income was $187 million, an increase of $3 2 million or 2% from the prior quarter of 184 million.
Net interest margin for the quarter as a percentage of earning assets on a tax equivalent basis was three 2% compared to $3 two one in the prior quarter.
Our core net interest margin for the current quarter of 3.07% increased three basis points from three 4% in the prior quarter.
Noninterest expense of 130 million decreased $3 7 million or 3% from the prior quarter.
Excluding the $6 2 million of acquisition related expenses.
Noninterest expense was $124 million during the quarter.
Core deposits continue to flow into the divisions growing organically by $383 million or 7% during the quarter.
The cost of core deposits remained steady at seven basis points.
Earnings per share for the quarter was 61.
<unk> 46 in the prior quarter.
Credit quality continued to improve and show strengths.
Most all measures.
We kept our allowance for credit loss reserves.
Flat to the prior quarter at one point to 8% of total loans, reflecting our strong credit metrics and our view of the economic outlook.
We declared our regular dividend for the quarter of 33 per share an increase of a penny per share or 3% over the prior quarter dividend.
The company has declared 148 consecutive quarterly regular dividends and has increased the regular dividend 49 times.
We completed the COO.
Core conversion of the Alta Bank Division with assets of $4 1 billion, the largest and most complex conversions in the company's history.
So core deposit growth continues to be surprisingly strong across our footprint. This is a good example of the value of our long term focus on core relationship accounts.
This quarter core deposits increased by $383 million or 7% annualized excluding the ultra acquisition core deposits increased $2 4 billion or 15% from the prior first year quarter.
Non interest bearing deposits increased $211 million or 11% annualized during the quarter and now account for 37% of core deposits.
Total debt securities of $10 1 billion decreased $257 million or 2% from the prior quarter.
<unk> increased $3 7 billion or 57% from the prior year first quarter.
We're pleased to invest more of our excess deposits into loans this quarter and we continue to purchase debt securities with our excess liquidity.
Debt Securities represented 39% of total assets at the end of the quarter compared to 40 at the end of 2021.
Despite our strong loan growth our loan to deposit ratio remains low at 64%, giving us plenty of fuel for future growth.
Credit quality improved during the quarter with nonperforming assets, improving to 24 basis points from 26% in the prior quarter early stage delinquencies as a percentage of loans ended the quarter at 12 basis points, which was a 26 basis point decrease from the prior.
<unk>.
The company's net interest margin as a percentage of earning assets on a tax equivalent basis for the quarter was three 2% compared to $3. Two one in the prior quarter. The core net interest margin for the quarter was three point <unk>, 7%.
Prior to 3.04 in the prior quarter, the growing margin was driven by higher yields on investments.
The yield on debt securities ended the quarter at 1.59% compared to one 5% in the prior quarter.
New investments in debt Securities were added at 2.25%.
The yield on the loan portfolio ended the quarter at $4, five 9% down 11 basis points from the prior quarter.
We added $1 9 billion in new core loan production with yields around four 2%.
Which was an increase of about 20 basis points versus the prior quarter.
We saw excellent loan growth in our markets with Wyoming, Montana, and Colorado, leading the growth across our eight state footprint.
We're pleased to see the continued strong performance in commercial real estate lending growing organically by $235 million in the quarter.
New loan for the new loan production for the quarter was robust with $1 9 billion in new loans originated.
We continue to focus on responsible growth will go through the cycle underwriting lens.
We're cautiously optimistic with our low double digit growth outlook, we've yet to see a material impact of increasing inflation and interest rates on growth outside of the residential mortgage market.
Non interest income of $33 6 million declined 799000, or 2% from the prior quarter and decreased $6 6 million or 16% from the same quarter last year due primarily to the reduced gain on.
Sale from residential mortgages.
The housing market and refinancing slowed down a bit but across our footprint.
Biggest concern in the real estate business remains the supply of homes available for sale increasing interest rates.
Increasing cost of housing.
We were very pleased to see effective expense control at the divisions.
These divisions. These results are a tribute to our unique operating model that empowers the divisions to make operating decisions that are right for their markets, while still delivering excellent results.
We continue to wind down the remnants of the PPP program, receiving $108 million in Triple P loan forgiveness during a quarter with $67 million of PPP loans remaining.
We recognized $3 3 million of interest income from the PPP loans during the quarter.
And I have $1 9 million of remaining fees to be recognized when the remaining loans are forgiven.
Our acquisition of.
Alta Bank continues to proceed very well.
We successfully converted all of the old two our core banking system in March.
And we are on track to achieve the targeted cost saves in 2022 that we identified when we announced these this transaction in may of 2021.
We remain very optimistic about the long term growth trends in Utah, and we're very pleased that the American legislation Legislative Exchange Council ranked Utah the number one state for its economic outlook for the 15th year in a row.
The glacier team got off to a great start in the first quarter, we completed the core processing platform conversion bolt the bank the largest and most complex conversion in our history and there is still and the team still achieved record results.
We think we are very well positioned to continue to profitably grow in 2022.
So that ends my formal remarks, and I would now like to ask Valerie to open the line for any questions that you may have.
Yes.
Thank you.
Ladies and gentlemen, if you'd like to ask a question. Please press Star then one when your Touchstone telephone against the ask a question. Please press Star then one.
One moment for our first question.
Our first question comes from Matthew Clark of Piper Sandler Your line is open.
Hey, good morning.
Wanted to Matthew.
I wanted to start on expenses.
It came in well below your $128 million to $130 million guide for the quarter.
Can you give us a better sense for what drove.
Most of that.
<unk>.
And what are your updated thoughts are on the run rate outlook from here.
Sure Ron do you want to take that yes, hi, Matthew or Ron here.
So part of it is.
And the compensation area. It just didn't grow as much as it could have if you look at our FTE count.
We're down to when I had three more bulk there.
And then it really is just the.
Extraordinary.
Control that the division.
Very good.
Outstanding debt was one <unk>.
And again for that so on the.
On the guide.
I did say $128 million to $130 million and we think that that's really applicable.
Well trend towards that by the time, we get to the fourth quarter.
No.
Keep in mind, one of the things. We've already said is that we're going to maintain the efficiency ratio 54% to 55%.
No.
We think expenses are well controlled.
Trend up.
Over the next several quarters.
I'll point out also on the <unk>.
The acquisition.
We got some of the cost saves there, but as we said on the.
Last.
January call, we said that.
A lot of those expense savings cost savings will show up in the second and third quarter more toward the back of the year less than that in.
In the first quarter so.
Coming together nicely.
Okay, Great and then shifting gears to the loan yields I think on a core basis.
You exclude PPP.
Loan yields were down about six basis points to $4 37.
This quarter can you give us a sense.
On where the weighted average rate was on new production this quarter and your thoughts on the loan yield outlook with I think 25% of your loan book repricing This year.
Yes al.
Kevin on the on the production and then.
You know on the re pricing may be binary and you want to touch on that I think that was the second part of your question Matt.
Yes.
But certainly on.
New production.
There.
Coming in at about 420, and that's a little that's a.
About 20 basis points better than where we were at the you know in.
In the last quarter. So we're pleased pleased to see that.
Byron do you want to comment on the repricing on the re pricing.
<unk>.
What will reprice is indexed to prime and so as the fed is active.
As I said, it's active this year.
Quite a bit of lift.
From that activity.
There are some Florida constrained a little bit of that we do have about 300 million.
$1 worth of loans that are better strain.
You need about 100 basis point rate hike before zone those rates will lead to both a floor.
We have $150 million in law that need more than 100 basis points.
Sure.
Hopefully that gives you some context.
Okay, and then on the Securities portfolio can you remind us how much is truly floating and what the duration is on the portfolio.
Very very little it floating on the securities portfolio in terms of duration has a weighted average life in front of me is close to five year.
A duration.
Okay.
Okay, great. Thank you.
Thank you. Our next question comes from David Feaster of Raymond James Your line is open.
Hey, good morning, everybody.
Morning, David.
I just wanted to touch on organic growth you guys Didnt posted extremely strong results. Just curious if you could give us some thoughts on obviously CRE has been a huge driver, but just what are you hearing from your clients and how do you think growth is going to shape up going forward.
Is it primarily still going to be CRE, driven and then just in the prepared remarks that it was a bit interesting to hear Utah being highlighted just curious how growth is turning at all and maybe thoughts on how the pipeline's looking heading into the second quarter.
Yeah, no absolutely I am going to have Tom comment on that on that but.
You know I've made a couple of comments on Utah.
Very strong growth.
Was one of our lead states.
<unk>.
Also noted the recognition as the recognized as number one.
Economic outlook state in the country. So there's.
Very very enthusiastic bolt on what we see now and its future very bright there.
Tom do you want to comment on the rest.
I'll give a little color.
What segments the growth is coming in and then you mentioned theory cod.
Combination of both CRE and construction, which was the predominant growth in there.
The construction of ADP, but and then on the term side.
A very healthy mix between all of our non owner the industry use that were leading that were industrial warehouse.
Multifamily for our for our strongest growth in really as Randy mentioned fairly uniform across our footprint with a couple of couple of things outpacing some others, but the.
And migration that we continue to see.
<unk> continues to drive the business growth as well.
Okay.
Okay. That's helpful.
And then maybe just touching on credit more broadly asset quality remains phenomenal you've got a conservative approach to credit.
Curious, there's a lot of puts and takes in the macro economy, just given the inflationary environment. This dislocation disruption overseas just curious.
What keeps you up at night once youre watching closely as you're managing credit and.
Whether any of the macro issues or other trends that youre seeing is starting to lead you to tighten the credit box at all.
Yes.
We're certainly in a period of time that I don't think really a vessel ever quite seen before we've seen inflation rising rates before but we also haven't seen the level of liquidity on our borrowers balance sheet to withstand and absorb a lot of that inflation. So.
Probably.
The thing that keeps me up at night would probably be portions of the consumer book, which as you can tell by our portfolio is not a large percentage of that or is it a large percentage of our production.
I think the consumer but would probably be hit first in terms of the inflationary.
Are your pressures so we continue to watch the entire portfolio very closely but.
In terms of how we feel prepared to come into this uncertain market I'm actually quite comfortable.
We we.
We tightened up some underwriting guidelines about three years ago, when we started to see cap ratings.
Dropped to a level, but.
In our opinion was lower payable that was three years ago. So since then we've seen a lot more equity into our deals.
A lot more cash available to our borrowers balance sheet that can.
It can withstand this at least for a period of time.
Okay that makes sense.
And then maybe maybe shifting gears to deposits.
Following up on your commentary.
Core deposit growth has been surprisingly strong it remains strong just curious how you think about deposit growth going forward. Obviously, you have got a huge advantage.
As we've talked before about being able to be disciplined with deposit pricing.
But would you expect deposit growth to at least slow or maybe migrate more within the book or even potentially starting to flow out as you remain disciplined and just.
Any commentary on your sense of pricing dynamics in the market currently.
Sure.
Well number one I think it starts with the foundation.
That is very strong we believe in that those deposit accounts are spread out over 500 miles.
For our Montana down to Arizona. They are mainly small balance accounts, we have almost half a million.
Relationship accounts and we do focus on getting relationship accounts. These are operating accounts for for people for consumers and businesses across that entire area. So you start with a very very solid foundation in terms of what we expect we.
To see the rate of deposit growth.
A throttle back a little bit I think we're seeing that already in this quarter.
In terms of the beta, though and the sensitivity to rates because of what I've described initially with it and that is that we really focus on.
These transaction accounts across the large geographic area, both businesses and consumers we think though.
There'll be.
A very very stable.
When you look at our history, we certainly experienced in that the last time.
Rates went up significantly.
Our deposit.
Really stayed very well, we didn't see a lot of outflow.
At very little increase in costs. So we expect the same dynamic here. There is so much excess liquidity among many banks that theres going to be probably a lag effect as well given how much excess deposits are sitting out there for banks today.
That makes sense. Thank you.
Thank you. Our next question comes from Jeff <unk> of D. A Davidson your line is open.
Thank you good morning.
Good morning, Jeff.
Ron I wanted to circle back on the expenses.
A core of $1 24.
You mentioned.
Start with.
Could you quantify that.
The amount of cost saves out of out that's still to come.
Maybe.
Against the 124 run rate if you think there is a.
A $1 million or two to come out of that absent any growth.
Overall.
Yes, I think there'll be like your $1 billion to $2 million range, there I would agree with that.
Just knowing that.
The model <unk>.
19, 5% reduction in our noninterest expense and we'll get 80% of that.
<unk>.
Here again, just repeating what I said.
Bulk of that will come through.
So increasingly in Q2, and a little bit more in Q3 and level out.
Q4 so.
Pretty sustained cost savings that are in our view now that we're past the conversion.
And.
Again, everything coming together.
Michael.
Okay I appreciate it Ron and I guess.
If I take.
One or 2 billion out of <unk> at a $1 24, and I get to.
122 and change.
If we talk about getting back to even the low end of the guidance of getting back to $1 28 to $1 30 range I mean, you're still talking about it.
A 5% growth rate after outset.
And I guess, just trying to figure out not going to beat you up on doing well on managing costs I, just im trying to figure out as that ramps what what else is in the expense run rate that you had maybe it's.
Adding more Ftes, you said that's been down but.
Where does the expense growth coming from.
That will be in the people.
Factor.
<unk>.
We're having the.
Hard to say, we do more with less but when you only had three FTE. We're at a point now where we're going to have to in each of the market each market being different.
Got to increase the head count, particularly where the turnover is at the lower level not so much in the executive level.
So that is primarily where it's going to happen in 12 business development kind of go up we don't do a lot of travel during the.
First quarter thought to see that going up.
Also some.
Amortization of some of the equity we plowed into our various tax credit projects.
And thought that our tax rate went down in <unk>.
To measure that because of the additional tax credits.
Came into the first quarter, we will continue to fill them with that come from amortization of the equity it runs through noninterest expense.
For certain tax credits.
Got it thanks, Ron I guess at the site.
Gotcha.
Nitpicky question.
Provision level.
And I guess $7 million all in.
The actual reserve.
Are the provisioning something inside of that any sort of.
I know this is a tough question, but just trying to get <unk>.
Given your growth of call it 12%.
Double digit.
Any any thoughts on provisioning level as we transition through the year a lot can change, but just trying to get a sense for.
$7 million in the quarter.
And kind of where that heads.
Jeff This is Tom.
Our provision was largely attributed to the growth we saw in the first quarter I think as a percent of loans we.
We feel very comfortable with based on what we know today.
Certainly barring any changes in economic forecasts or.
Portfolio quality.
Okay fair enough. Thanks.
Thanks, Tom.
Randy last question on.
Another crystal ball question.
Talking about any real estate concern as you have.
Your footprint.
But the fundamentals are fantastic you've got low supply demand is very high in migration trends you mentioned.
<unk> right got to be monitored on affordability, but.
Any update or thoughts on the real estate.
Kind of within your footprint.
And any concern there.
Well I think there's two broad areas the residential and the commercial.
On the residential and I think Tom kind of touched on this.
We're watching that closely.
We're making sure.
Exactly the loans that we're putting in our portfolio.
The credit quality in the parameters.
Given the increase in value that's occurred across the entire footprint.
So I think Thats an area.
That we're watching very closely.
We there was a.
Very very strong demand, so even with higher interest rates, we see.
A long way back to an area that we would.
<unk>.
You have to start making other changes.
And by that I mean.
Where is the market is still so frothy that higher interest rates just might bring it back to a normal market as a phase one and we've yet to see that so phase one, meaning where property sit on the market for.
60 to 90 days in selling price as a percentage of of asking price, we've yet to see that so we're watching that.
But the supply and demand characteristics appear to be still very very tight.
Thats probably positive on the commercial side.
We start from a basis, where a lot of our markets have not been overbuilt in the past there is a lot of in migration and demand.
Driving the projects.
And so in the use of the projects so.
We.
We're watching valuations there as well in cap rates in.
That's my comment.
You know viewing credit with a through the cycle lens, we continue to do that on both sides.
Okay I appreciate it thank you.
Thank you. Our next question comes from Brandon King of Choice Securities. Your line is open.
Thank you good morning.
Brandon.
Good morning, I wanted to touch on CRE Paydowns I know, we've heard from other banks, saying that kind of slowed this quarter with higher interest rates and I wanted to know if thats occurred with your portfolio.
And kind of how much of that contributed to the strong growth this quarter.
So Tom do you want to take them.
It has slowed down from our historical average, but it's still it's still a headwind is still elevated.
I would say it has slowed down as maybe refinance to another institution is it's more the case now that the project is.
The project developers are taking advantage of the cap rate environment selling the project.
We do not capture the buyer in terms of financing.
Okay.
And then also garner in that same theme.
With interest rates rising we are hearing about some banks not.
Raising there or actually lowering the spread to be more competitive.
From a competition standpoint, what are you seeing in your markets.
We think the fed rate increase.
Yes spreads have compressed over the last.
Nine months or so.
Hybrid is taken in the last three to four months, though we kind of past that.
What about and we're starting to see rates increase not only from us but also our competitors.
And as I've said on prior calls.
Our pricing competition seems to be more intense in the larger metro areas versus the more rural markets, which are able to set the pricing a lot better with less competition, which is why I think we're able to have our average production yield as Randy mentioned at $4 20.
Two.
The pretty strong and showed some strong growth over the prior quarter.
Yes.
Okay.
And then lastly.
With the.
The strong core deposit growth.
Does the thinking around deploying the excess liquidity now I know that deposit growth kind of.
Keeps a floor on that excess liquidity getting lower but with higher rates with securities are you expecting to.
Buy more securities going forward any change in that strategy.
What biomarin can comment on that brand and then no but I think in a very.
High level, we're going to continue to reinvest those but I'll, let <unk> give you a little more color.
Sure. Our hope is that excess liquidity can go onto the loan portfolio.
Keep them pretty impressive growth rate.
The extent that we do have excess liquidity on the balance sheet.
Our strategy has been to deploy that excess cash and I think we would continue to do that we happening with recent market rate it has rapidly.
Compelling.
Opportunity to put that in.
Money to work at a pretty decent level.
I would I would see it.
Continuing that strategy.
Okay. Thank.
Thank you very much.
Thank you.
Our next question comes from Kelly mode of <unk>. Your line is open.
Thanks for the question.
It's nice to see.
I'll touch showing through with that.
Just wondering.
What the appetite is for M&A.
It's a larger deal for you so you've been in the past.
Later in the year event.
Turning to look again, but just wondering if there was any changes there as well as that.
Piece of conversations in the market.
Yes.
Good morning, Kelly No no change there still the same glide path for the next transaction.
Great.
Yes.
Okay Rod.
Rob just a nitpicky question for you.
The tax rate went down you mentioned some tax credit investments do you have what.
The tax rate for the year.
I would say, it's going to be just that.
It's kind of the rate between 19% in 'twenty.
As increase that because.
It's going to be a better year than what you asked me in October last year.
Lower rate, but I am expecting us to do better given all of the net interest income growth in it et cetera.
Somewhere between 19 and 20%.
Yeah.
Great.
Really helpful.
And then lastly, just.
On the reserve.
It held pretty flat at 120 28.
As a percentage of loans just wondering if there is.
It's still a large qualitative adjustment in there if there is conservatism that.
Thank you.
Continue to improve and the loss content remains flat with.
Additional.
Leases of that that we could see throughout the year.
Tom do you want to comment on that.
There is certainly a qualitative component, but in terms of a large qualitative component.
That's not that's not the case, so which is which is why we feel pretty comfortable with that.
The percent of loans that we see today.
Great Alright, that's all for me Thanks, a lot I'll step back.
Okay. Thank you.
Our next question comes from Andrew <unk> of Stephens. Your line is open.
Hey, good morning.
Good morning.
Hey, just maybe a more technical question.
Just as we think about kind of given the move in rates modeling out securities yields throughout 2022 can you just remind us how much.
Cash flow, we should expect from the bond book over the next 12 months.
Fairly ratable throughout that timeframe and then.
So is it fair to think that.
The new money yield last quarter was two and a quarter, it's probably moved up from there.
Sure Andrew this is Byron.
We get about $450 million of cash flow off of the bond book every quarter. So that is about 1 billion a year and thats fairly steady fairly consistent.
In terms of in terms of new investment.
The rate that we're getting on that.
We're looking at.
Opportunities to reinvest at $3, 75% to 4%.
If you look at the rate of the run off cash flow versus the new opportunities in the market, we're picking up 225 to 250 basis points.
Over that run off rate zone.
Very very very helpful to the bottom line at this time.
Yes, no definitely compelling I appreciate the color.
So I guess looking at the 10-K, the interest rate sensitivity disclosure I think you put a note in there regarding the growth in core deposits and an update of deposit pricing assumptions.
The stated kind of rate sensitivity.
Can you just help us out with what exactly you assume in terms of deposit pricing or deposit beta assumptions within that sensitivity analysis and then.
I mean given.
Last cycle, just trying to get a sense of maybe kind of your assumption might be.
Sure I can comment on that so we look at.
What our deposit beta was through the last cycle and was very very well and so.
Assuming that that will continue for for this rate cycle. So for the first 100 basis points we have.
Single digit beta assumption for the second 100 basis point.
I would say low double digit and then we realized once we get through 200 basis points of rate hike, we will see more traction in our betas will increase and sort of modeling does reflect that but in terms of the first 200 basis point I think we would expect.
The rate cycle very similar to what we experienced in the.
The last rate cycle, so hopefully that addresses your question.
No.
I really appreciate the color and thank you all for taking my questions.
You bet.
So again, if you'd like to ask a question. Please press Star then one on your Touchstone telephone against ask a question. Please press Star then one our next question comes from Tim Coffey of Janney. Your line is open.
Great. Thank you thanks for taking my questions today.
Randy if I could ask you about kind of a real estate infrastructure in your markets.
Given that your migration, we've talked about on this call.
And the success you've had in say the commercial real estate industrial warehouse and multifamily.
Other legs to this demand cycle or do you think youre kind of getting to the point, where there is enough real estate infrastructure for the migration.
Yes, we do believe there's legs there.
The and you have to go back to the starting point there.
There has not been historically the infrastructure built out in these western markets. So in many of our markets different than other parts of the country. The existing stock was not there.
So there is demand.
And the in migration.
It has been strong.
And we've seen.
Pretty tight supplying most of our markets and so our COO.
Couple thousands or so of new entrants into the market tends to.
To move the needle so I think the.
The trends look look very good in.
We're starting from a point, where there wasn't a lot of supply given.
The amount of inflow and then balanced off against what now.
Longer building cycle.
And to get a project done.
We're not we're not seeing an imbalance at this point.
Okay. Okay.
Alright, Thank you and then I kind of understand a bit more about your inflation.
Expectations in terms of how it impacts the market right because.
If I look at your demographics four of your eight states have a median household income below the national average.
Not really expect any change to deposit betas.
And youre not really seeing too much in terms of the credit outlook.
How exactly I mean.
As inflation to impact your markets do you think.
Well.
We certainly see wage inflation, continuing so that those lower household incomes are going to go up because of the situation with.
Employment, where there.
Is a lot more jobs available than there are people to fill them.
And thats really acute across all our states.
Thank you.
We will see that continue to increase.
The inflation, probably the biggest pain point across our eight states is going to be fuel prices that those continue to stay high.
That is a that is an expense and given the long expanses, we have more that's a bigger factor in and people's expenses than in other parts of the country.
So I think that.
Right now you know housing and fuel costs are probably the two biggest.
Pain points for people and we're just.
Keeping an eye on those and what the impact would be or will be.
Okay, but you are in.
Necessarily seen any slowing in retail spend.
Within your footprint right now.
We are not.
Okay.
Alright.
Those are my questions. Thank you very much.
Youre welcome.
Thank you.
Im showing no further questions at this time I will turn the call back over to Randy Chesler for any closing remarks.
Alright, Thank you Valerie and want to thank everybody for dialing in today really appreciate it.
Analysts have a very very busy seasons. So we appreciate you joining us today have a great Friday and a great weekend and thank you.
Thank you ladies and gentlemen, this does conclude today's conference. Thank you all parties participating you may now disconnect have a great day.
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Yeah.
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Yes.
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Okay.
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