Q1 2024 S&T Bancorp Inc Earnings Call

Operator: Welcome to the S&T Bancorp first quarter 2024 conference call. After the management's remarks, there will be a question and answer session. Now, I would like to turn the call over to Chief Financial Officer Mark Kochvar. Please go ahead.

Welcome to the F N B Bancorp first quarter 2020 for a conference call it.

After management's remarks, there will be a question and answer session now I would like to turn the call over to Chief Financial Officer, Mark Goldberg. Please go ahead.

Mark Kochvar: Great. Thank you very much. Good afternoon, everyone.

Mark Goldberg: Great. Thank you very much good afternoon, everyone. Thank you for participating in today's call before beginning the presentation I want to take time to refer you to our statement about forward looking statements and risk factors.

Mark Kochvar: Thank you for participating in today's call. Before beginning the presentation, I want to take time to refer you to our statement about forward-looking statements and risk factors. This statement provides the cautionary language required by the Securities and Exchange Commission for forward-looking statements that may be included in this presentation. A copy of the first quarter 2024 earnings release, as well as this earnings supplement slide deck, can be obtained by clicking on the materials button in the lower right section of your screen.

Mark Goldberg: <unk> provides the cautionary language required by the Securities and Exchange Commission for forward looking statements that may be included in this presentation.

A copy of the first quarter of 2024 earnings release as well as this earnings supplement slide deck can be obtained by clicking on the materials button in the lower right section of your screen. This will open up a panel on the right where you can download. These items you can also obtain a copy of these materials by visiting our Investor Relations website at SP Bancorp Dot com.

Mark Kochvar: This will open up a panel on the right where you can download these items. You can also obtain a copy of these materials by visiting our investor relations website at stbancorp.com. With me today are Christopher McComish, S&T's CEO, and Dave Antolik, S&T's president. I'd now like to turn the program over to you.

Mark Goldberg: Tom.

Mark Goldberg: With me today are Chris the Commerce, S&P, CEO and Dave Antolik, S&P's President I'd now like to turn the program over to Chris Mark. Thank you and good afternoon, everybody and welcome to the call. We appreciate the analysts being with US. This afternoon, and we look forward to your questions, but certainly also want to thank our employees shareholders and <unk>.

Christopher J. McComish: Mark, thank you, and good afternoon everybody, and welcome to the call. We appreciate the analysts being with us this afternoon, and we look forward to your questions. I certainly also want to thank our employees, shareholders, and others listening to the call this afternoon. Before we get to the numbers, I want to continue to express how good I feel about the progress that's centered on S&T's People Forward purpose that we've made and how our strategic focus on this purpose is delivering for our customers, shareholders, and the communities that we serve. A few weeks ago, we wrapped up an almost two-week road trip where we were able to speak face-to-face with all 1,250 of our employees in small groups.

Christopher J. McComish: Others listening to the call. This afternoon before we get into the numbers I want to continue to express how good I feel about the progress that centered on S&P's people forward purpose that we've made and how our strategic focus on this purpose is delivering for our customers shareholders and the communities that we serve a few weeks ago.

Christopher J. McComish: We wrapped up in almost two week road trip, where we were able to speak face to face with all 1200 50 of our employees and small groups the energy commitment and engagement that they displayed in these meetings was truly inspiring to both media and our entire executive leadership team our people.

Christopher J. McComish: The energy, commitment, and engagement that they displayed in these meetings was truly inspiring to both me and our entire executive leadership team. Our people-forward purpose, connected to our core drivers of performance, the health and growth of our deposit franchise, solid credit quality, best-in-class core profitability, and underpinned by the talent and engagement level of our teams, is where we are focused on delivering for our shareholders. In addition to the numbers that we'll go through on page five, in Q1, we saw further evidence of our progress as we were recognized by Forbes as one of America's best banks from a financial performance perspective and one of America's best companies for employee loyalty and engagement. The Employee Loyalty Award is broader than just financial services and looks at all mid-sized employers in the United States, and this is the second year in a row for this recognition.

Christopher J. McComish: Forward purpose connected to our core drivers of performance the health and growth of our deposit franchise solid credit quality best in class core profitability and underpinned by the talent and engagement level of our teams or where we're focused to deliver for our shareholders. In addition to the numbers that will go through on page.

Christopher J. McComish: <unk> five in Q1, we saw further evidence of our progress as we were recognized by Forbes as one of America's best banks from a financial performance perspective.

Christopher J. McComish: And one of America's best companies for employee loyalty and engagement. The employee loyalty award is broader than just financial services and looks at all mid sized employers in the United States and this is the second year in a row for this recognition.

Christopher J. McComish: Turning to our quarter on page 5, you'll see that we earned 81 cents a share, which is about 2 cents ahead of consensus estimates, with that net income exceeding $31 million. Our return metrics were excellent with almost a 14% ROTCE, and our PPNR remained strong at 176. Our net interest margin did see some contraction, though at 384 percent, it is still very strong. The eight basis points of contraction is less than half of what we saw in Q4 of last year, and our net interest income remained above $83 million for the quarter. Mark will provide further color here in a few minutes. I would also...

Christopher J. McComish: Turning to our quarter on page five you'll see that we earned <unk> 81, a share which was about <unk> <unk> ahead of consensus consensus estimate.

With that net income over $31 million, our return metrics were excellent with almost a 14% our OTC <unk> remained strong at $1 76.

Christopher J. McComish: Net interest margin did see some contraction low at $3 84 is still very strong the eight basis points of contraction is less than half of what we saw in Q4 of last year and our net interest income remained above $83 million for the quarter Mark will provide further color here in a few minutes.

Christopher J. McComish: Yes.

Mark Goldberg: I would also.

Christopher J. McComish: Looking at things from a credit perspective, there was a little bit of movement. However, it's very manageable and primarily related to a couple of strategic exits. Dave is going to dive more deeply here in a few minutes.

Mark Goldberg: Look at looking at things from a credit <unk>.

Mark Goldberg: Perspective.

Mark Goldberg: There was a little bit of movement. However, it's very manageable and private primarily related to a couple of strategic exits Dave is going to dive more deeply here in a few minutes I would also call out page seven where we've added additional insight into our multifamily CRE portfolio. This is in line with the information that we've provided.

Christopher J. McComish: I would also call out page 7, where we've added additional insight into our multifamily CRE portfolio. This is in line with the information that we have provided to you in previous quarters relative to office exposure. Again, we'll spend more time and provide more color on that in a few minutes.

Mark Goldberg: Added to you in previous quarters relative to office exposure and again, we will spend more time and color on that in a few minutes.

Christopher J. McComish: Moving to page four, you'll see that loan growth for the quarter was muted. However, we saw meaningful deposit growth. Historically, Q1 is typically a lower loan growth quarter for us. On the deposit side, customer deposit growth was more than $78 million, producing over 4% annualized growth, which is a number we feel very good about. While the deposit mix shift continued, we did see a further slowing in the rate of decline of DDA balances, with overall DDA balances remaining strong at 29% of total balance.

Mark Goldberg: Moving to page four youll see that our loan growth for the quarter was muted. However, we saw a meaningful deposit growth. Historically Q1 is typically a lower loan growth quarter for us.

Mark Goldberg: On the deposit side customer deposit growth was more than $78 million producing over 4% annualized growth, which is a number we feel very good about while the deposit mix shift continued we did see further slowing in the rate of decline of DDA balances with overall DDA balances remaining strong at 29% of total <unk>.

Ounces. Additionally, our customer deposit growth allowed us to reduce borrowings by $130 million in the quarter, which obviously had a positive impact on our net interest margin.

Christopher J. McComish: Additionally, our customer deposit growth allowed us to reduce borrowings by $130 million in the quarter, which obviously had a positive impact on our net interest margin. I'm going to turn it over to Dave now and talk more about the loan book and credit quality, and Mark will provide more color on the income statement and capital. We look forward to your questions after their remarks. Dave, over to you.

Mark Goldberg: I'm going to turn it over to David I will talk more about the loan book and credit quality, then Mark will provide more color on the income statement and capital. We look forward to your questions. After their remarks, Dave over to you. Thank you Chris turning to page five I would like to spend some time discussing asset quality results for the first quarter on the ACL reduction that is.

David G. Antolik: Yeah, thank you, Chris. Turning to page 5, I'd like to spend some time discussing asset quality results for the first quarter. The ACL reduction that is presented on this slide reflects improving asset quality, particularly in our commercial loan book, and is the direct result of the significant amount of work being done by our bankers and credit teams to manage and reduce credit risk in the current economic environment. We have seen improvement in our rating stack via a combination of strategic assets or exits, sorry, as Chris mentioned, coupled with some modest improvement in the remaining book.

Speaker Change: Presented on this slide reflects improving asset quality.

David: Particularly in our commercial loan book and is the direct result of the significant amount of work being done by our bankers and credit team to manage and reduce credit risk in the current economic environment.

David: We have seen improvement in our ratings stack via a combination of strategic as asset or exit sorry, as Chris mentioned, coupled with some modest improvement in the remaining book.

David G. Antolik: Net charges for the quarter of $6.6 million were related to one of those strategic exits, which was a CRE relationship in Western Pennsylvania and the progression of one Western Pennsylvania operating company through the workout process. The commercial real estate loans related to this operating company account for the majority of our NPA increase during the quarter from $23 million to $33 million, but remain at a very manageable level of 44 base. We have a defined exit strategy for this credit, and we're actively engaged in the execution of that strategy.

David: Net charges for the quarter of $6 $6 million were related to one of those strategic exits, which was a CRE relationship in western Pennsylvania, and the progression of one Western Pennsylvania operating company through the workout process the.

David: The commercial real estate loans related to this operating a company account for the majority of our NPA increase during the quarter from $23 million to $33 million, but remained at a very manageable level of 44 basis points.

David: We have a defined exit strategy for this credit and we are actively engaged in the execution of that strategy.

David G. Antolik: As Chris mentioned, we've included additional details on pages 6 and 7 of this presentation regarding our office and multifamily portfolios. Starting on page 6, you'll see the granular nature of this segment with an average loan size of $1.1 million and average loan-to-value of 55% based on the most recent appraisal available. It's also important to note the geographic distribution of these properties and our limited exposure to central business district assets that total $47 million.

David: As Chris mentioned, we've included additional details on page six and seven of this presentation regarding our office and multifamily portfolios.

David: Starting on page six with office Youll see the granular nature of this segment with an average loan size of $1 $1 million and average loan to value of 55% based on the most recent appraisal available.

David: It's also important to note the geographic distribution of these properties and our limited exposure to central business district assets that totaled $47 million looking at that $47 million a.

David G. Antolik: Looking at that $47 million segment, it is comprised of 30 loans averaging $1.6 million and the largest loan in that group totaling $7 million, with the majority of those dollars being located in the Pittsburgh, Columbus, and Buffalo MSAs. I'd like to call your attention to the pie chart on this and the next page and clarify that the other category is primarily made up of loans within our defined market of Pennsylvania and states adjacent to Pennsylvania. Also included in this detail are maturities by year. This information reflects limited maturity concentration in any one individual year.

Segment. It is comprised of 30 loans, averaging $1 $6 million and the largest loan in that group totaling $7 million and the majority of those dollars being located in the Pittsburgh Columbus and Buffalo Msas.

David: I'd like to call your attention to the Pie chart on this and the next page and clarify that the other category is primarily made up of loans within our defined market of Pennsylvania and states adjacent to Pennsylvania.

David: Included in this detail our maturities by year. This information reflects limited maturity concentration in any one individual year.

David G. Antolik: Digging into the large exposures, the 29 that are represented on this page as exceeding $5 million, these loans include two non-owner occupied properties totaling $11 million, and in whole, there is a debt service coverage ratio well over 1.2% for the entirety of these loans. And the four loans over $10 million average a debt service coverage ratio of over 1.4. I'll also note that our construction exposure in the office segment is insignificant.

David: Digging into the largest exposures.

David: The 29 that are represented on this page is exceeding $5 million. These loans include two non owner occupied properties totaling $11 million and in whole.

David: Debt service coverage ratio well over one two.

David: <unk> for the entirety of these loans and the four loans over $10 million average a debt service coverage ratio of over one four.

David: I'll also note that our construction exposure in the office segment is is insignificant.

David G. Antolik: Turning to page 7, you'll see similar statistics relating to our multifamily portfolio. As with office, you'll see very granular exposure, as evidenced by an average size of $1 million and an equally diverse geographic distribution. In this segment, we have 30 loans exceeding $5 million that reflect an average debt service coverage ratio of over 1.4, with the largest nine displaying an average debt service coverage ratio of 1.6. These debt service coverage ratios exclude approximately seven properties representing $78 million in exposure that are still in their lease-up and stabilization period.

David: Turning to page seven you will see similar statistics relating to our multifamily portfolio as with office Youll see very granular exposure as evidenced by an average size of $1 million and an equally diverse geographic distribution. In this segment, we have 30 loans exceeding $5 million that reflect an average debt service.

David: Coverage ratio of over one four with the largest nine displaying an average debt service coverage ratio of one six.

David: These debt service coverage ratios exclude approximately seven properties, representing $78 million in exposure that are still in their lease up and stabilization phase. We monitor this lease up and stabilization versus our underwriting assumptions and limit the number of <unk>.

David G. Antolik: We monitor this lease-up and stabilization versus our underwriting assumptions and limit the number of construction loans that we make to the very top-tier borrowers who have experience and the appropriate capital. And we have no concerns with these projects at this time.

David: Construction loans that we make to the very top tier borrowers who have experience and the appropriate capital and we have no.

David: We have no concerns at this with.

David: With these projects at this time. In addition, we have multifamily construction commitments totaling $215 million with outstandings of $115 million in the quarter. All of these construction loans are within the contiguous states of Pennsylvania, Ohio, and Maryland, as well as one deal in Delaware.

Mark Kochvar: In addition, we have multifamily construction commitments totaling $215 million with outstandings of $115 million at the end of the quarter. All of these construction loans are within the contiguous states of Pennsylvania, Ohio, and Maryland, as well as one deal in Delaware. We continue to have a positive outlook on these multifamily properties, and this has been a portfolio that's performed very well for us. Finally, both our office and multifamily portfolios are limited, criticized, classified, and NPL categorized. And I'll turn it over to Mark to dig a little deeper.

We continue to have a positive outlook for these multifamily properties and this has been our portfolios performed very well for us.

David: Finally, both our office and multifamily portfolios have limited criticized classified NPL categorize loans.

David: I'll now turn it over to Mark to dig a little deeper.

Mark Kochvar: Great, thanks, Dave. On slide eight, we have net interest income. The first quarter net interest margin rate, as Chris mentioned, is 384 and down about eight basis points from last quarter, which does represent an improvement over the last several quarters in terms of the decline. It is in line with our expectations as the pace of deposit mix shifts and exception pricing moderates. We also see this in the slowing increase in the cost of funds that's shown at the bottom left of this page.

Mark Goldberg: Thanks, Dave on slide eight we have net interest income in the first quarter net interest margin rate as Chris mentioned this 384, its down about eight basis points from the from last quarter, which does represent an improvement over last several quarters in terms of the decline is in line with our expectations as the pace of deposit mix shift an exception pricing moderates we.

Mark Goldberg: So see this in the slowing increase in the cost of funds as shown at the bottom left of this of this pace.

Mark Kochvar: The cost of funds is up about 15 basis points in the first quarter, but it was up 28 and 27 basis points prior to that. Our emphasis on a deposit franchise has aided in helping keep that DBA mix strong at 29% and has returned us to net customer deposits, allowing us to reduce the more expensive wholesale funding. That shift on the balance sheet of about $100 million brokered between money market and CDs was cost-neutral.

Mark Goldberg: Cost of funds is up up 15 basis points in the first quarter. It was up 28% and 27 basis points. The prior two quarters, our emphasis on a deposit franchise.

Mark Goldberg: They did and helping keep that DVA next strongest 29% and has returned us to net customer deposit growth, allowing us to reduce the more expensive wholesale funding.

Mark Goldberg: That shift on the balance graph of about $100 million of brokered between money market Cds was cost neutral.

Mark Kochvar: We expect funding cost pressure to continue to moderate, with an interest margin bottoming out in the mid-$370 range in the second and third quarters. We're still asset sensitive on the front of the curve, so should the Fed decide to move rates lower, we would expect two to three basis points of additional margin compression for each of the first few 25 basis points.

Mark Goldberg: We expect funding cost pressure to continue to moderate with the net interest margin barring bottoming out in the mid 370 range in the second and third quarters.

Mark Goldberg: We're still asset sensitive on the front of the curve. So should the fed decides to move rates lower we would expect two to three basis points of additional margin compression for each of the first few 25 basis point cuts.

Mark Kochvar: On slot 9, we have non-interest income, which returned to more normal levels in the first quarter after some unusual items in the fourth quarter. Those included a 3.3 million Oreo gain and over $1 million of non-cash valuation adjustments. Those are all in the other category.

Mark Goldberg: On slide nine we have noninterest income, which returned to more normal levels in the first quarter. After some unusual items in the fourth quarter. Those included a $3 3 million Oreo gains and over $1 million noncash.

Mark Goldberg: Noncash valuation adjustments those are all in the other category.

Mark Kochvar: We did experience some seasonality in debit cards as well as in service charges in Q1. However, Q1 results were in line with our recurring fee outlook of approximately $13 million per quarter. On the expense side, expenses were down $1.7 million in the first quarter compared to the fourth, more in line with our expectations. The largest decline was in salaries and benefits, where medical expenses returned to more normal levels after an unusually high fourth quarter.

We did experience some seasonality in debit card as well as in service charges in Q1 with.

Mark Goldberg: Q1 results were in line with our recurring fee outlook of approximately $13 million per quarter.

Mark Goldberg: On the expense side expenses were down $1 7 million in the first quarter compared to the fourth more in line with our expectations. The largest decline was in salaries and benefits were medical expense returned to more normal levels. After an unusually high fourth quarter, our run rate expectation is approximately $54 million per quarter for expenses.

Mark Kochvar: Our run rate expectation is approximately $54 million per quarter for expenses. Lastly, on slide 11, the capital TCE ratio increased by 15 basis points this quarter, overcoming eight basis points of drag from a greater AOCIN. PTE's balance sheet is quite strong due to good earnings and a relatively small securities portfolio. All of our securities are classified as AFS. Capital levels position us very well for the environment and will enable us to take advantage of organic or inorganic growth outcomes. Thanks very much. At this time, I'd like to turn the call back over to the operators to provide instructions for asking questions.

Mark Goldberg: And lastly on slide 11 capital TCE ratio increased by 50 basis points. This quarter overcoming eight basis points of drag from our greater OCI impact TCE mains quite strong due to good earnings in a relatively small securities portfolio all of our securities are classified as.

Capital levels position us very well for the environment and will enable us to take advantage of organic or inorganic growth opportunities.

Speaker Change: Very much at this time I would like to turn the call back over to the operator to provide instructions for asking questions.

Speaker Change: The floor is now open for questions. If you have any questions. Please press star then the number one on your phone and we ask that while asking your question. Please speak up your phone and speaker phone for enhanced audio quality.

Operator: The floor is now open for questions. If you have any questions, please press star, then number one on your phone. And we ask that while asking your question, please pick up your phone and turn off speakerphone for enhanced audio quality. Please hold while we call for questions. Your first question comes from the line of Daniel Tamayo of Raymond James. Please go ahead.

Speaker Change: Please hold while we poll for any questions.

Your first question comes from the line of Daniel Tamayo of Raymond James. Please go ahead.

Daniel Tamayo: Hey, good afternoon guys.

Daniel Tamayo: Hi, Dan.

Daniel Tamayo: Maybe.

Daniel Tamayo: I appreciate all the.

Daniel Tamayo: Hey, good afternoon, guys. Hi Dan.

Daniel Tamayo: All of the commentary on the credit side.

Christopher J. McComish: Maybe, you know, I appreciate all the commentary on the credit side, and it seemed like the really increase in charge-offs and non-performers was really related to the single commercial real estate credit. But, you know, as we get through a bumpier time and enter a period of uncertainty, obviously, you provided a lot of color on the office and multifamily portfolios, but can you just provide, where do you think credit costs will go for you from here? I mean, just a high-level thought on what NCOs might look like for you as we go through the year, or provision, whatever sees you.

Daniel Tamayo: It seemed like it was.

Daniel Tamayo: Really the increase in net charge offs and non performers were related to a single commercial real estate credit but.

Daniel Tamayo: As we get through.

Daniel Tamayo: Bumpier time and enter a period of uncertainty obviously, you've provided a lot of color on on the office and multifamily portfolios, but.

Speaker Change: Can you just provide.

Speaker Change: Where you think.

Speaker Change: Credit costs go for you from here I mean, just a high level thought on.

Speaker Change: On what.

Speaker Change: <unk> might look like for you as we go through the year.

Speaker Change: Vision whatever is easier.

Christopher J. McComish: Yeah, I think when you start with the ACL, you know, that shows some improvement. Now, you know, this quarter obviously showed some charges. So we think we're, or we know we are, improving our asset quality, and we expect that to continue throughout the year. I mean, there's still risk in these portfolios, and we think we're adequately reserved for those risks.

Yes, I think when you start with the ACL that showed some improvement this quarter, obviously evidenced some charges.

Speaker Change: <unk>.

Speaker Change: So we think we are we know we are improving our asset quality and we expect that to continue throughout the year. I mean, there is still risk in these portfolios and we think we're adequately.

Speaker Change: Reserved for those risks.

Speaker Change: Okay.

Daniel Tamayo: I mean, is the run rate of, I don't want to call it a run rate, but with net charge-offs bouncing around a 20 basis point, a quarter number, does that seem like a reasonable number? I guess before the first quarter, when they're a little bit higher, I mean, how do you think about what a reasonable number is going forward? Is it closer to that 20 basis points? Or should we be thinking about 35 basis points or some other number? a better run rate for you guys in terms of credit costs.

Speaker Change: I mean is the run rate of I mean, I don't want to call. It a run rate, but with net charge offs bouncing around a 20 basis point a quarter numbers that seem like a reasonable.

Well I guess before the first quarter, where they were a little bit higher.

Speaker Change: How do you think about what a reasonable number is going forward is it closer to that 20 basis points or more.

Speaker Change: We'd be thinking 35 basis points or or some other numbers.

Speaker Change: A better run rate for you guys in terms of credit costs. Yes. This is mark I don't think that the first quarter experience.

Mark Kochvar: Yeah, it's Mark.

Mark Kochvar: Yeah, this is Mark. I don't think that the first quarter experience really changes our thinking for the, at least for the medium or near term. So, you know, we had been expecting sort of in the 20s someplace in terms of charges over the next several quarters on average.

Mark Goldberg: Changes our thinking for the at least for the medium or a near term. So we had been expecting.

Mark Goldberg: On the 20th Someplace in terms of.

Mark Goldberg: <unk>.

Charges over the next several quarters on average.

Speaker Change: Okay, alright, thanks for that.

Christopher J. McComish: And then, you know, secondly, and I apologize if I missed this, but, you know, obviously, getting the balance sheet right, right now, you're adding deposits, and loan growth is not the most important thing, but I was just curious what the most recent outlook on loan growth is.

And then I guess, secondly, and I apologize if I missed this but.

Speaker Change: Obviously getting the balance sheet right right now.

Speaker Change: Youre, adding deposits.

Speaker Change: Loan growth is not the most important thing, but just curious what the most current outlook on <unk>.

Loan growth is.

Christopher J. McComish: Yeah, so if you look at Q4, we saw relatively higher than normal loan growth; those average balances carried into Q1. Pipelines were relatively low at the beginning of Q1. They've grown into the balance of Q1, but we're still not expecting any significant balance growth throughout the year, you know, because of our low budget for them.

Speaker Change: Yes. So if you look at Q4, we saw relatively higher than normal loan growth those average balances carried into Q1.

Speaker Change: Pipeline is were relatively low at the beginning of Q1, they've grown into the balance of Q1, but we're still not expecting any significant balanced growth throughout the year in a low single digit numbers is what we would like.

Christopher J. McComish: What budget do we have? Yeah, we've been pretty consistent about that kind of in the 3% range where we've been looking.

Speaker Change: Budget for <unk>.

Speaker Change: We've been pretty consistent about that kind of in that 3% range is where we've been looking.

Daniel Tamayo: Okay, all right, I'll step back. Thanks for the color guys. Thank you.

Speaker Change: Great Okay alright.

Speaker Change: Alright, I'll step back thanks for the color guys. Thank.

Speaker Change: Thank you.

Operator: comes from the line of Kelly Moore from KBW. Please go ahead.

When it comes from the line of Kelly.

Kelly: <unk>. Please go ahead.

Kelly Moore: Hi, thanks for the question. Maybe, maybe just carrying on on that loan loan growth question from before, just wondering, understanding that pipelines are relatively low where you're still seeing opportunities for versus, you know, where demand for credit from your borrowers is more muted at this point in the cycle.

Kelly: Hi, Thanks for the question.

Kelly: Maybe maybe just.

Kelly: Just carrying on on that that loan growth question from before just wondering understanding that pipelines are relatively level, where were you still seeing opportunities for purchases.

Kelly: Where demand.

Kelly: The poor credit from.

David G. Antolik: Sure, sure. We've spent a lot of time building out our business banking teams. We think that's a space, lower middle market C&I as well, where we can differentiate ourselves from many of our competitors and drive some growth. You know, those often come with deposit opportunities as well. So, you know, our approach to building relationships with these customers from a deposit perspective, as well as supporting those customers with loan needs, is important to us in terms of our people-focused strategy.

Kelly: And your borrowers.

Kelly: At this point in the cycle.

Speaker Change: Sure sure. We spent a lot of time building out our business banking teams, we think thats a space.

Speaker Change: Low lower middle market, C&I, as well, where we can differentiate ourselves from many of our competitors and drive some growth.

Speaker Change: Often come with.

Speaker Change: Deposit opportunities as well so our approach to rebuilding relationships with these customers from a deposit perspective as well as supporting those customers with a loan needs is important to us in terms of our people forward strategy.

Christopher J. McComish: Yeah, things are not as robust in the commercial real estate area as you'd expect, right, given the rate environment. This is as much customer caution as anything. The good news is we've got very deep relationships in the commercial real estate space, so we're able to be proactive with them. So we don't believe we're missing opportunities. It's really, you know, lower demand. I think Dave's exactly right. The small business space has been one that's been a real positive for us, both on the loan and deposit sides, and it's an area that we'll continue to focus on.

Things are not as robust in the commercial real estate area.

Speaker Change: As you would expect given the rate environment.

Speaker Change:

Speaker Change: This is as much customer caution us as anything and the good news is we've got very deep relationships in the commercial real estate space. So we're able to to be proactive.

Speaker Change: So we don't believe we're missing opportunities it's really.

Speaker Change: Lower demand I think Dave's exactly right.

Speaker Change: All business space has been one that's been a real real positive for us both on the loan and deposit side. It's an area that we'll continue to focus.

Christopher J. McComish: Got it. That's, that's super helpful. And in the absence of kind of stronger growth, if capital continues to build quite nicely, just wondering, as you look ahead, what your priorities are for capital return here?

Speaker Change: Got it that's super helpful and in the absence of kind of.

Speaker Change: Stronger growth capital continues to build quite nicely just wondering as you look ahead, what your priorities are for capital return here.

Christopher J. McComish: Yeah, we get that question a lot, seeing where we are relative to $10 billion in size and the regulatory responsibilities that come with that. As we've talked about in previous quarters and for the past couple of years, we've really done a nice job of building this foundation for growth relative to regulatory and compliance oversight, and we feel like we're there today. We are also highly interested in organic growth, and we believe there may be opportunities down the road, and those are long-term relationships that we're working hard to continue to build.

Yes.

Speaker Change: That question, a lot seeing where we are relative to $10 billion.

Speaker Change: And size.

Speaker Change: The regulatory responsibilities that come with that as we've talked about in previous quarters and for the past couple of years, we've really done a nice job of building. This foundation for growth relative to regulatory and compliance oversight and we feel like we're there today. We also are highly interested in inorganic.

Speaker Change: Growth and we believe there may be opportunities down the road and those are long.

Speaker Change: <unk> long term relationships.

Speaker Change: We're working hard to continue to build we believe that we've got a great story to tell in that regard when you think about the capital levels of the company the efficiency of our company the customer experience recognition that we have employee engagement all of those things give us.

Christopher J. McComish: We believe that we've got a great story to tell in that regard when you think about the capital levels of the company, the efficiency of our company, the customer experience recognition that we have, and employee engagement. All of those things give us a good foundation to be able to potentially be a good partner for somebody that's looking to become part of a larger organization. Very interested in the states that we're in today, both Pennsylvania and Ohio in this geography.

Speaker Change: A good foundation to be able to potentially be a good partner for somebody that is looking to become part of a larger organization. So very interested in and the states that we're in today in both Pennsylvania and Ohio in this geography.

Kelly Moore: Got it. That's helpful. Maybe the last question from me. On the fees side, both card revenues and service charges were a little weaker. But how much of that was just seasonality?

Speaker Change: Got it that's helpful. Maybe last question from me.

Speaker Change: On the on the fee side that.

Both the card revenues and service charges were a little weaker and how much of that was just seasonality or is there any other changes that were made that we should be cognizant of that.

Mark Kochvar: I think most of it was seasonality. It was...

Mark Kochvar: We've seen a lot of signals as tax returns and some spending flows. So we typically see some slower NSF in the first quarter of years.

Speaker Change: Think about the year ahead.

Speaker Change: I think most of it less seasonality it was primarily in the cards. It was primarily debit card activity driven.

Speaker Change: And then in the service charges is primarily NSF and Thats, often seasonal as say no tax returns and some spending slowed so we typically see some slower NSF.

Kelly Moore: Great; I appreciate all the color also. Oh, sorry.

Mark Kochvar: I'm sorry, a year ago we did make some changes, some NSF changes, so the year-over-year comparison on service charges is impacted by that, but from fourth quarter to first, that's more seasonal. Got it. That's helpful.

Speaker Change: In the first quarter of years.

Speaker Change: Great I appreciate all the color.

Speaker Change: Alright.

Speaker Change: As a year ago, we did make some change some NSF changes the year over year comparison on service charges impacted by that but.

Speaker Change: The fourth quarter first that's more seasonality.

Speaker Change: That's helpful. Thanks, so much thank you.

Operator: Got it. That's helpful. Thanks so much. Thank you. Your next question comes from the line of Manuel Navas of D.A. Davidson Company.

Speaker Change: Your next question comes from the line of manual neighbors of D. A Davidson companies. Please go ahead.

Sharon: Hi, This is Sharon G entre menu all of us. Thank you so much for taking my questions.

Speaker Change: I will handle that.

Manuel Antonio Navas: Please go ahead. Hi, this is Sharon G on.

Alright, what would you assume for deposit pages in our rate down scenario.

Mark Kochvar: Yeah, so it gets a little tricky because in the early stages of that, with rates, if the Fed were to move, we would still anticipate our cost of deposits to increase some, but just at a lower pace. So the quantification of that data gets a little trickier.

Speaker Change: Yes.

Speaker Change: Yes so.

Speaker Change: Maybe it gets it gets all tricky because it's.

Speaker Change: In the early stages of that with rates.

Speaker Change: If the fed were to move we would still anticipate our cost of deposits to increase some but just as at a at a lower paid.

Speaker Change: So we have the quantification of that data gets a little.

Speaker Change: A little trickier.

Mark Kochvar: So the easiest way for me to think about it has been that our margin will be, again, about two to three basis points lower than it would have been in the absence of the Fed rate cuts. So we are expecting compression to the kind of mid-370s in the kind of second quarter and third quarter timeframe. So if we were to see the Fed move, say, in September, I would expect that margin to go from kind of the mid-370s to the low-370s, and that experience would continue if the Fed were to keep on going for at least the next several years.

Speaker Change: So the easiest.

Speaker Change: Wafer of me to think about it has been that our margin will be again about two to three basis points.

Speaker Change: Lower than it would've been.

Speaker Change: In the absence of the fed rate cuts. So we are expecting compression to the kind of mid <unk> and the kind of second quarter third quarter timeframe. So if we were to see the fed move say in September I would expect that margin to go from kind of mid $3 70 to low 300 <unk>.

Speaker Change: And that experience would continue if the fed were to keep ongoing for at least the next several cut.

Speaker Change: Thank you.

Speaker Change: Is it from me.

Operator: Your next question comes from the line by Daniel Cardenas from Janie Montgomery Scott. Please go ahead. Hey, good afternoon, guys. Good day. Good day. Hey, Mark, can you...

Speaker Change: Your next question comes from the line of Danielle <unk> from Janney Montgomery Scott.

Danielle: Please go ahead.

Danielle: Hey, good afternoon guys.

Danielle: Hey, Dan.

Hey, Mark can you give me the.

Daniel Edward Cardenas: Hey Mark, can you give me the AOCI impact this quarter? The change was like eight, eight basis points.

Danielle: Ci impact this quarter.

Danielle: That change was like eight.

Danielle: Eight basis.

Danielle: Okay.

Mark Kochvar: And what was the dollar amount in the last quarter? You were at $90.9 million.

Speaker Change: And what was what was the dollar amount.

Speaker Change: I think last quarter, you were at $99 million.

Mark Kochvar: In the last quarter, you were at $90.9 million. Where did that go to this quarter?

Speaker Change: Where did that go to this this quarter.

Mark Kochvar: About 98. Excellent, excellent. All right. And then on the credit quality front, can you give us a little bit of color as to the industry that the company that you guys had some issues with was operating in? What industry were they operating in? And then maybe some thoughts as to just overall watch list trends.

Speaker Change: About 98.

Speaker Change: Okay.

Speaker Change: Excellent excellent alright, and then on the credit quality front can.

Speaker Change: Can you give us a little bit of color as to the industry.

The company now.

Speaker Change: <unk> had some issues with.

Speaker Change: What industry, where they operating in and then maybe some some thoughts as to just.

Overall watch list trends I mean, they sound pretty good with maybe just a little bit more color on that.

David G. Antolik: I mean, they sound pretty good, but maybe just a little bit.

David G. Antolik: A little bit more color on that. Yeah, yeah.

David G. Antolik: Yeah, Dan, with regard to the one-credit-to-send workout, it is an active workout, so I don't want to disclose anything that might disrupt our ability to collect. With regard to the overall rating stack, we have seen some improvement, and as I mentioned in the prepared comments, it is a combination of some strategic exits, and we've got some additional execution there to continue to build momentum in reducing the C&C assets because they continue to be higher than where we'd like to have them, as well as making sure that we're monitoring and actively following the remainder of the rating stack, where we have seen improvement.

Speaker Change: Yes, yes, Dan.

Speaker Change: With regard to the one credit that didn't work out. It is an active workouts I don't want to disclose anything that might disrupt our ability to collect.

Speaker Change: With regard to the overall ratings stack and we have seen some improvement in and as I mentioned in the prepared comments. It is a combination of.

Speaker Change: Some strategic exits and we've got some additional execution there to continue to build momentum in reducing C&C assets because they they continued to be higher than where we'd like to have them.

Speaker Change: As well as.

Speaker Change: Making sure that we're monitoring and actively following the remainder of the ratings stack, where we have seen improvement.

David G. Antolik: And then on top of that, making sure that we're underwriting to the current environment, meaning costs, you know, rates, all of those things, those things combined will help to continue us or allow us to tell a better credit story as we move forward with it. And then with that one credit that you're working out, do you think you'll have any additional losses associated with it?

Speaker Change: And then on top of that making sure that we're underwriting to the current environment, meaning cost.

Speaker Change: Fits all of those things and those things combined will help to continue us or allow us to tell a better credit.

Speaker Change: <unk> as we move forward.

Speaker Change: Okay got it and then with that one credit that Youre working out do you think youll have any additional losses associated with that or do you think.

David G. Antolik: [inaudible]

Speaker Change: What's happened this quarter is pretty much will cover cover those losses.

Christopher J. McComish: Yeah, I think we're in good shape relative to future losses. It's just really a matter of timing of the final resolution with this customer. On the deposit front, what we saw here in Q1, do you think that's sustainable throughout the rest of the year? I mean, I know it's a fistfight right now between everybody for good core deposit growth, but how do you guys feel? about the growth overall for 2024 on deposits.

Speaker Change: We're in good shape relative to future losses, it's just really a matter of timing of the final.

Speaker Change: Resolution with this with this customer.

Speaker Change: Okay.

Speaker Change: Alright, and then on the deposit front, what we saw here in Q1 do you think that's sustainable throughout the rest of the year I mean I know.

Speaker Change: Despite right now for everybody, who good core deposit growth split, but how do you guys feel.

Speaker Change: About the growth overall for 2020 for deposits.

Christopher J. McComish: Dan, and I as Chris, we feel very good about... the team and all the work that we've done, be it from the commercial side of our business and the emphasis on treasury management, the additional channels and avenues through which we're originating deposits and deepening customer relationships, the focus that we've put within our teams, either in our branches or contact centers, how we've changed incentive plans. We've pulled many levers, and none of those things happened overnight, and this has been a couple-year journey that we're on, long before the significant rise in interest rates.

Speaker Change: Chris I feel we feel very good about.

Speaker Change: The.

Christopher J. McComish: The team and all the work that we've done and be it from the commercial side of our business and emphasis on Treasury management, the additional channels and avenues through which we are.

Christopher J. McComish: We're originating deposits and deepening customer relationships the focus that we've put within our teams either in our branches or contact centers, how we've changed incentive plans we've pulled many levers.

Christopher J. McComish: And none of those things happen overnight and this has been a couple of year journey that we're on long before the significant rise in interest rates and as you said this hand to hand combat started in the industry. So the progress we've been made we've made as a company we feel very good about around this focus on our driver.

Christopher J. McComish: And as you said, this hand-to-hand combat has started in the industry, so the progress we've made as a company, I feel very good about this focus on our driver of the deposit franchise. And so this is two quarters in a row of meaningful deposit growth, $100 million last quarter, $70 million this quarter. Our DDA percentages in total remain solid, so I think the stability of the rate environment actually helps us a little bit, and we're going to continue to be as proactive as we need to be.

Christopher J. McComish: Of the deposit franchise.

Christopher J. McComish: And so.

Christopher J. McComish: This is two quarters in a row of meaningful deposit growth $100 million last quarter $70 million this quarter our DDA.

Percentages of a total remain remains solid so.

Christopher J. McComish: No.

I think the stability of the rate environment actually helps us a little bit.

Christopher J. McComish: And we're going to continue to be as proactive as we need to be.

Daniel Edward Cardenas: All right, good, good to hear. And the last question for me: how should we, how should we do this?

Speaker Change: Alright, good to hear.

Speaker Change: And then last question for me.

Mark Kochvar: be thinking about your tax rate on a go-forward basis. It looks like it was a little bit higher in Q1.

Speaker Change: How should we be thinking about your tax rate.

Speaker Change: On a go forward basis, it looks like it was a little bit higher in Q1 versus.

Mark Kochvar: Last year, and this is that 20%-ish kind of a good run rate going forward. Yeah, we expect it right around 20.

Last year in.

Speaker Change: That 20% ish kind of a good run rate going forward, yes.

Speaker Change: And we expect it right around 20.

Mark Kochvar: Effective. Great.

Speaker Change: Effective.

Daniel Edward Cardenas: Great. Thank you, guys. I'll step back.

Speaker Change: Great. Thank you guys I'll step back.

Operator: Again, if you'd like to ask a question, please press star 1 on your telephone keypad. Your next question comes from the line of Matthew Breese of Stephens. Please go ahead.

Speaker Change: Again, if you'd like to ask a question. Please press star one on your telephone keypad. Your next question comes from the line of Matthew Breese of Stephens. Please go ahead.

Matthew M. Breese: Hey, good morning. Sorry. Good afternoon, everybody. Hey, Matt. I wanted to go back to the disclosures in the office book.

Matthew M. Breese: Hey, good morning, sorry, good afternoon everybody.

Matthew M. Breese: Hey, Matt.

Matthew M. Breese: I wanted to go back to the disclosures on the office book.

David G. Antolik: One quick one is just the average LTVs; could you confirm for us, are those at origination, or are there any updates, or how do you kind of go about that process?

Matthew M. Breese: One quick one is just the average ltvs could you could you confirm for us. So those are those at origination or are there any updates or how do you kind of go about that process, yes. It would be the most recent appraisal available. So in some cases, where we have.

David G. Antolik: Yeah, it would be the most recent appraisal available. So, in some cases where we have a reason to update the appraisal, we would use that number; otherwise, it's at that origination.

Matthew M. Breese: A reason to update the appraisal we would use that number otherwise it's at origination.

David G. Antolik: Is there any sort of way to... to frame that, time-wise, the weighted average of two, three years old, or is it, for the most part, four or five years old?

Matthew M. Breese: Is there any sort of way to.

Matthew M. Breese: Frame that time wise, the weighted average of two to three years old or is it for the most part.

Matthew M. Breese: Five years old.

David G. Antolik: Look, the way we look at this book and the way that I look at value is, you know, we focus on debt service coverage, right, and net operating income because that ultimately determines the value of the property. So that's what we spend most of our time looking at, testing, stressing, you know, so the rent roll that goes into making up that debt service coverage is what we focus on.

The way we look at this book in the way that I look at value as we focus on debt service coverage and net operating income because that ultimately determines the value of the property. So that's what we spend most of our time looking at testing stressing so are rent the rent roll that goes.

Matthew M. Breese: And to making up the debt service coverage is what we what we focus in on.

David G. Antolik: And how often are those debt service coverage ratios updated? At a minimum,

Matthew M. Breese: And how often are those debt service coverage ratio was updated.

David G. Antolik: At a minimum, annually. Okay. Yeah, so all the numbers that I referenced today would have come out of the most recent annual review, and most of those are done in the back half of the year. So those are pretty current numbers that I referenced relative to debt service costs.

Matthew M. Breese: At a minimum annually.

Matthew M. Breese: Okay.

Matthew M. Breese: Yes.

Matthew M. Breese: Yeah. So all the numbers that I referenced today would have come out of the most recent.

Annual review and most of those are done in the back half of the year. So those are pretty current numbers that I referenced relative to debt service coverage.

David G. Antolik: So, along those lines, if I look at the maturity by year, you have $48 million maturing in 2024. I'm assuming some of those have kind of already matured and renewed or gone elsewhere. I'm just curious, even if it's a limited sample set, as those have kind of come up for renewal, how have the debt service coverage ratios reacted, and have they been able to kind of maintain a north of one or 1.2 times level from what you've seen?

Matthew M. Breese: Okay.

Matthew M. Breese: So along those lines, if I look at the maturity by year $48 million maturing in 2024.

Matthew M. Breese: Im assuming some of those have kind of already matured and renewed or elsewhere.

Matthew M. Breese: I'm just curious as even if it's a limited sample set as those have kind of come up for renewal.

Matthew M. Breese: The debt service coverage ratios reacted.

Matthew M. Breese: Able to kind of maintain north one or one two times level from what you've seen.

David G. Antolik: Yeah, so the first part of the question: these numbers are just moving forward. So the things in Q1 that would have reset have already reset. They've matured, and we've either rewritten them, or they've been taken out by others.

Matthew M. Breese: The first part of the question. These numbers are just moving forward. So the things in Q1 that would have reset have already reset they've matured and we've either re written them or they've been taken out by others.

David G. Antolik: And we haven't seen any deterioration relative to resetting in the current interest rate environment. I think the biggest question here for any bank is, you know, what does that occupancy look like? Unlike multifamily, Office CRE is usually limited in the number of tenants, and those tenants pay a fixed rental rate for a longer period of time. So, as I mentioned in the call, the Office CRE debt service coverage ratios tend to lag multifamily because multifamily landlords have the ability to adjust rental rates on a more frequent basis, typically annually.

Matthew M. Breese: And we haven't seen any deterioration relative to resetting in the current interest rate environment. I think the biggest question here for for any bank is what is that occupancy look like.

Matthew M. Breese: Unlike the multifamily office CRE has its usually limit to the number of tenants and those tenants pay a fixed rental rate for a longer period of time. So that you know as I as I mentioned in the call. The office CRE debt service coverage ratios tend to lag multifamily because multifamily.

Matthew M. Breese: Landlords have the ability to adjust rental rates on a on a more frequent basis typically annually.

David G. Antolik: Okay, that makes sense. Could you just go into the biggest office loans, the $10 million bucket, and the biggest multifamily loans, similar to $10 million North? How are those larger loans performing? Any sort of past dues or any sort of issues there? Just some broader color on the big stuff. Yeah.

Speaker Change: Okay that makes sense.

Speaker Change: Could you just go into the biggest office loans, the $10 million bucket and the biggest multifamily loans similar to 10 million north.

Speaker Change: How are those those larger loans performing any sort of past dues or any sort of issues. There just just some broader color on the big stuff, Yes, I think.

David G. Antolik: Yeah, I think the biggest takeaway is that those largest loans, particularly those above $10 million, have stronger debt service coverage ratios for both office and multifamily. And in the multifamily space, the debt service coverage ratios are significantly higher than what we would test to in terms of an annual review for a debt service coverage covenant that we have in place on most.

Speaker Change: The biggest takeaway is that those largest loans.

Speaker Change: Particularly those above $10 million have stronger debt service coverage ratios.

Speaker Change: For both office and multifamily.

Speaker Change: And in the multifamily space the debt service coverage ratios are significantly higher than what we.

Speaker Change: With test to in terms of an annual review for our debt service coverage covenant that we have in place on most of these loans.

David G. Antolik: And, you know, they're they're geographically diverse for the most part. As I said, that other category is really just a deeper dive into our geography, but they're they're pretty well dispersed. Obviously, the larger concentration by number and dollar is in Pittsburgh, but they're not outsized. You know, it's not a 140 million dollar loan. You know, the average loan sizes are significantly larger than, you know, 10 million dollars for the largest type of loan that we have.

Speaker Change: And then.

Speaker Change: They're geographically diverse for the most part.

Speaker Change: As I said, you know that other category is really just a deeper dive into our geography, but they're pretty well dispersed.

Obviously, the larger concentration by number and dollar is in Pittsburgh.

Speaker Change: But theyre not outsized.

Speaker Change: $240 million loan the average sizes are significantly larger than.

Speaker Change: $10 million for the largest type of loan that we have.

Matthew M. Breese: Okay, and are any of these loans criticized or classified, you know, not considered PASS?

Speaker Change: Okay, and then are any of them.

Speaker Change: These loans you know.

Speaker Change: Yeah.

Speaker Change: Criticized and classified not considered pass.

David G. Antolik: There's one loan in the office space that's... Criticized, of the top, you're referring to the top 20.

Speaker Change: There is.

Speaker Change: One.

Speaker Change: Loan in the office space.

Speaker Change: <unk>.

Speaker Change: Criticized.

Speaker Change: The top you're talking referring to the top 29 years.

David G. Antolik: Yeah, the biggest ones tend to do the most damage when they go sideways, and I'm just trying to get it. There's one loan in the office pool. There's nothing in the multifamily. There's one loan in the office pool of those five million dollars and larger. That is a

Speaker Change: Yes, the biggest ones tend to be a loss damage when they when they go exactly.

Speaker Change: There is one loan and the office pool, there is nothing in the multifamily there's one loan in the office pool of those $5 million and larger debt is a.

David G. Antolik: That's a criticized loan.

Speaker Change: That's a criticized loan.

David G. Antolik: The last one I have is just in regards to the NIM, and I appreciate you taking all my questions. The pace of low-yield expansion has also slowed, and I was just curious, in the absence of rate cuts, is this kind of four to six basis point range of loan yield increase a good proxy for what we should expect until there's rate cuts?

Speaker Change: Okay.

Speaker Change: The last one I had just in regards to the NIM.

Speaker Change: And I appreciate you taking all my questions the pace of loan yield expansion has also slowed.

Speaker Change: And I was just curious in the absence of rate cuts is this kind of 4% to six basis point range of loan yield increase and this is a good kind of near term proxy for which we should expect until.

Speaker Change: There is rate cuts.

Mark Kochvar: Yeah, I think they're in that, you know, five to six, right around in there. That's what we expect for the next..., and the next several.

Speaker Change: Yes, I think there.

Speaker Change: That five five to six right around in there that's.

Speaker Change: That's what we expect for the next.

Speaker Change: The next several quarters at least.

Matthew M. Breese: I'll leave it there. I appreciate you taking all my questions. Thank you. Certainly. We appreciate the interest.

Speaker Change: Yes.

Speaker Change: I'll leave it there I appreciate taking all my questions. Thank you certainly we appreciate the interest.

Operator: There are no further questions at this time. I would like to turn the call over to Chief Executive Officer, Chris McComish, for closing remarks. Okay.

Speaker Change: Yeah.

Speaker Change: There are no further questions at this time I would like to turn the call over to Chief Executive Officer, Kris Mccamish for closing.

Christopher J. McComish: Yeah, thank you all for the engagement and the thoughtful questions. Anything follow up, feel free to reach out. Again, we feel really good about the start of the year, particularly this deposit growth and where things stand. And we certainly appreciate your time and your interest. I look forward to talking to you soon. Bye-bye. Ladies and gentlemen, that concludes today's call. Thank you all for joining us. You may now disconnect.

Yes. Thank you all for the engagement and the thoughtful questions.

Christopher J. McComish: I do think outlook feel feel feel free to reach out again, we feel real good about the start started the year, particularly this deposit growth and where things stand and we certainly appreciate your time and your interest look forward to talk to you soon.

Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.

Christopher J. McComish: We certainly appreciate your time and your interest. I look forward to talking with you.

Speaker Change: Yeah.

Speaker Change: Okay.

We certainly appreciate your time and your interest look forward to talk.