Q3 2024 Origin Bancorp Inc Earnings Call

Operator: Your line is muted. Ladies and gentlemen, good morning and welcome to the Origin Bancorp Inc. 3rd quarter earnings conference call.

Your line is muted.

David: Ladies and gentlemen, good morning, and welcome to the origin Bancorp, Inc. Third quarter earnings Conference call. My name is David and I will be your ever call coordinator.

David: My name is David, and I will be your ever-called coordinator. The format of today's call includes prepared remarks from the company, followed by a question-and-answer session. Please note that all attendees will be on the listen-only mode until the Q&A portion of today's call. Also, please note that this event is being recorded.

David: The format of today's call includes prepared remarks from the company followed by a question and answer session. Please note that all attendees will be on a listen only mode until the Q&A portion of today's call. Also please note that this event is being recorded.

Chris Reigelman: I would now like to turn the call over to Chris Reigelman, Director of Investor Relations. Please go ahead.

Speaker Change: I would now like to turn the call over to.

Speaker Change: Chris <unk> director of Investor Relations. Please go ahead.

Chris Reigelman: Good morning, and thank you for joining us today. We issued our earnings press release yesterday afternoon, a copy of which is available on our website, along with a slide presentation that we will refer to during this call. Please refer to page two of our slide presentation, which includes our safe harbor statements regarding forward-looking statements and use of non-GAAP financial measures. For those joining by phone, please note that the slide presentation is available on our website at www.ir.orgin.bank. Please also note that our safe harbor statements are available on page five of our earnings release filed with the SEC yesterday.

Chris Reigelman: All comments made during today's call are subject to the safe harbor statements in our slide presentation and earnings release.

Chris Reigelman: I'm joined this morning by Origin Bancorp's Chairman, President and CEO, Drake Mills, President and CEO of Origin Banc, Lance Hall, Chief Financial Officer, Wally Wallace, Chief Risk Officer, Jim Crockwell, Chief Accounting Officer, Steve Broly, and Chief Credit and Banking Officer, Preston Moore.

Chris Reigelman: After the presentation, we will be happy to address any questions you may have.

Drake Mills: Drake, the call is yours. Thanks, Chris, and thanks for being on the call. I'd like to believe that I've developed the reputation of being transparent and direct. We have accomplished a great deal since we went public in 2018, when we were $4.2 billion in assets. We've expanded our presence in Texas, grown market share in Louisiana, Mississippi, inter-new markets in South Alabama and the Florida Panhandle, built an award-winning culture that attracts talented bankers, and we have diligently prepared to cross $10 billion in assets. Even with these successes, we clearly understand the work in front of us to create upper-core tile profitability.

Drake Mills: We've been very strategic in how we prepare for crossing $10 billion in assets. We've made significant investments in people and processes that we knew would impact short-term profitability, but would prepare us to drive long-term value. While its preparation and rate environment have pressured our profitability, I am confident we've made the right decisions to lay the foundation to build long-term value. We strengthen our management team; we've invested in technology; we've enhanced our ability to gather and analyze data to drive strategic decision-making; and we have improved our risk-management capabilities, to name a few.

Drake Mills: Now it's time to sharpen our focus on near-term profitability. We are laser-focused on a strategic initiative to return to acceptable profitability levels by the end of next year. We will provide detailed metrics around this initiative when we report our full-year results in January. We are wailing to the process and are actively working with a third party to benchmark us at a granular level to our peers. We have also begun outlining specific revenue and expense opportunities to achieve our profitability goals. In the near term, we need to operate levels in line with our peers with a defined path to outperform them.

Lance Hall: Now I'll turn it over to Lance and the team to talk through the quarter results. Thanks and good morning. Over the past several quarters, I've talked about our bankers' consistent focus on driving court-of-posit growth and expanding relationships. While the rate environment has put pressure on deposits across the banking industry, I'm pleased with the balance sheet trends we showed in the third quarter. I'm confident these trends will continue, and our bankers will capitalize on opportunities, particularly in our Metro Texas markets and our New Southeast market. Total deposits, excluding broker, were up 2.3% quarter over quarter, which is the strongest growth we've seen in two years.

Lance Hall: Non-interest bearing deposits were also up, growing 1.5% for the quarter. Also, our NIB mix, as a percent to total deposits, remains stable at 22%.

Lance Hall: I want to speak directly to the success we're having in our Texas markets. Our teams throughout the state continue to drive meaningful growth. Year to date, our Texas bankers have grown deposits $241 million and grown loans $154 million. We see tremendous opportunity in Texas, and we have the infrastructure in place to continue to grow that business.

Lance Hall: While we look forward to detailing the profitability initiative that Drake mentioned next quarter, improving operating efficiencies is always a focus. As an example, one area we've had success in building efficiencies is in our robotics process automation platform. Our RPA team continues to add value to the bank by saving approximately 3,356 hours of manual work in the third quarter. Year to date, this team has saved more than 9,600 hours of manual work, equivalent to just over 7 full-time equivalents. I'm optimistic about the momentum that we're seeing within our markets and how our bankers are focused on growing profitable relationships.

Jim Crockwell: Now, I'll turn it over to Jim. Thanks, Lance. As we discussed over the past several quarters, we continue to experience normalization within our loan portfolio. With that said, we are pleased to report decreases in past dues, classified loans, as well as non-performing loans for the quarter. While we did experience an increase in net charge-offs for the quarter, year-to-date net charge-offs continued to be in line with expectations. Past dues loans held for investment came in at 0.49% as of September 30th, decreasing from 0.83% as of June 30th, and in line with past dues levels of 0.42% as of the end of the first quarter.

Jim Crockwell: As you will recall, the increase in past dues as of June 30th was attributed to relationships identified as part of the question and activity of a former banker in our East Texas market. We continue to work through this issue with our customers, including those relationships subject to the ongoing dispute. Classified loans decreased $10.8 million to 1.35% of loans as of September 30th, down from 1.49% as of June 30th, while non-performing loans decreased $12 million to 0.81% as of quarter end, down from 0.95% as of the prior quarter end. The decrease in both classified and non-performing loans was primarily driven by the $10.4 million dollar write-down in three acquired loans, as well as the settlement payment of $3.3 million on one of these loans.

Jim Crockwell: As to classified loans, these reductions were partially offset by downgrades of four relationships totaling $7 million, three of which were acquired loans. Net charge-offs for the quarter totaled $9.5 million, up from $2.9 million from the prior quarter. While net charge-offs for Q3 were 0.48%, year-to-date net charge-offs were 0.26% and are in line with expectations. Our credit provision expense was $4.6 million for the quarter compared to $5.4 million for the prior quarter, and after considering net charge-off, resulted in a $4.9 million decrease in the allowance to $96 million. The reduction in the reserve was primarily driven by the utilization of previously established reserves.

Speaker Change: Year to date net charge offs were 0.26% and are in line with expectations.

Speaker Change: Our credit provision expense was $4 $6 million for the quarter compared to $5.4 million for the prior quarter and after considering net charge off resulted in a $4.9 billion decrease in the allowance to $96 million.

Speaker Change: The reduction in the reserve was primarily driven by the utilization of previously established reserves.

Jim Crockwell: On a percentage basis, our allowance decreased from 1.27% to 1.21%, as a percentage of total loans held for investments, and from 1.34% to 1.28% net of mortgage warehouse. During the quarter, we completed our external loan review, which covered approximately 55% of loans, net of consumer and one-to-four family residential loans. The results of the review were positive, resulting in no recommended downgrades to criticize or classified loans. As discussed last quarter, we continued to focus on client selection, and during Q3, we saw an additional $42 million in desired reductions. We would continue to closely monitor and manage our portfolio.

Speaker Change: On a percentage basis, our allowance decreased from one point to 7% to one point to 1% as a percentage of total loans held for investments and from 1.34% to one point to 8% net of mortgage warehouse.

Speaker Change: During the quarter, we completed our external loan review, which covered approximately 55% of loans net of consumer and one to four family residential loans. The results of the review were positive resulting in no recommended downgrades to criticized or classified loans.

Speaker Change: As discussed last quarter, we continue to focus on client selection and during Q3, we saw an additional $42 million and desired reductions we will continue to closely monitor and manage our portfolio.

Jim Crockwell: With the markets continued to focus on non-owner occupied CRE office, we continued to provide added detail on slide 13, which shows the resiliency and performance of this sector within our portfolio. As a quarter in, this segment totaled $364.7 million, average loan size of only $2.4 million, a weighted average debt service coverage of 1.34 times, and a weighted average loan devalue of 59.01%. We had no past dues, minimum classifiers, and no non-performing loans, and no chargeoffs within this segment. As the total ADC and CRE, we continued to closely monitor overall exposure and reflected total funded ADC and CRE of total risk-based capital at quarter in, of 72% and 239%, which positions Origin with the flexibility to support our customers and provide strategic growth.

Speaker Change: With the market's continued focus on non owner occupied CRE office, we continue to provide added detail on slide 13, which shows the resiliency and performance of this sector within our portfolio as.

Speaker Change: As of quarter in this segment totaled $364 $7 million average loan size of only $2 4 million a weighted average debt service coverage of 134 times.

Speaker Change: And our weighted average loan to value of 59.0% to 1%, we had no past dues minimum classifieds and no nonperforming loans and no charge offs within this segment.

Speaker Change: That's the total ADC in CRE, we continue to closely monitor our overall exposure and reflected total funded ADC and CRA of total risk based capital at quarter end of 72% and 239%, which positions origin with the flexibility to support our customers and provide.

Speaker Change: Strategic growth.

Wally Wallace: I'll now turn it over to Wally. Thanks, Jim, and good morning, everyone. Turning to the financials, in Q3, we reported diluted earnings per share of 60 cents. As you can see on slide 24, the combined financial impact of notable items during the quarter equated to a net expense of $627,000. Equivalent to 2 cents and EPS pressure.

Speaker Change: I'll now turn it over to Wally.

Wally: Thanks, Jim and good morning, everyone turning to the financials in Q3, we reported diluted earnings per share of <unk> 60.

Wally: As you can see on slide 24, the combined financial impact of notable items during the quarter equated to a net expense of $627000 equivalent to <unk> and EPS pressure.

Wally Wallace: On the balance sheet side, I will start with the discussion on deposits, which were down 0.3% during the quarter. Excluding Broker, though, deposits grew 2.3% linked quarter; a strong quarter, as Lance mentioned. Furthermore, non-introspecting deposits grew 1.5% linked quarter; the first quarter of growth in NIB since 2022. We continue to see mixed stabilization in outer deposits, with non-introspecting deposits remaining flat at 22% of total deposits.

On the balance sheet side, I will start with a discussion on deposits, which were down 0.3% during the quarter.

Wally: Excluding brokered deposits grew two 3% linked quarter, a strong quarter as Lance mentioned.

Wally: Furthermore, noninterest bearing deposits grew one 5% linked quarter, the first quarter of growth in N I B since 2022.

Wally Wallace: On the loan side, growth in gross loans held for investment and growth excluding mortgage warehouse were both essentially flat during the quarter, as our strategic focus on client selection continues to result in some planned reductions, as Jim discussed. As a result, our loan to deposit ratio, ex mortgage warehouse, remains below our 90% target at 87.9%. We anticipate our client selection process could add some continued pressure to growth in Q4, but we continue to expect loan growth in the low single digits for the year, with deposit growth essentially matching.

Wally Wallace: Moving to the income statement, net interest margin expanded one basis point during the quarter to 3.18%. Below our guidance, which was for mid-single-digit expansion from an adjusted base of 3.22% in QQ. The primary driver of this shortfall relative to our expectations was deposit costs that were higher than we anticipated, as pricing pressures for new deposits did not ease as much as forecasted across our markets. While we anticipated margin expansion, despite potential pressures from Fed rate cuts, our prior models considered a measured cadence of 25 basis point cuts. Versus our current model, which now includes the already announced 50 basis point cut in September, and additional 25 basis point cuts in November and December of this year.

Wally Wallace: This scenario results in a brief period of nim compression of roughly 10 basis points, as the benefits from asset repricing lag the pressures from our floating rate loan portfolio. Assuming the Fed slows or stops easing, we still anticipate asset repricing benefits to drive NIM expansion in line with our previous expectations.

Wally Wallace: Shifting to non-interesting income, we reported $16.0 million in Q3. The quarter included a $221,000 gain on sale of securities. Excluding this notable item and the $6.1 million benefit of notable items in Q2, non-interesting income declined to $15.8 million from $16.4 million in Q2, due primarily to normal seasonality in our mortgage business. In Q4, we expect normal seasonal pressures in both our mortgage and insurance businesses to drive Q4 fee income to levels similar to Q4 2023.

Wally Wallace: Our non-interesting expense declined to $62.5 million in Q3 from $64.4 million in Q2, excluding $848,000 of notable items in Q3 and $1.5 million in Q2. Non-interesting expense declined to $61.7 million from $62.9 million. While Q3 levels were better than anticipated, we still expect Q4 expense will remain at levels similar to Q2, which includes an expectation of legal and accounting-related professional services expense associated with the activity Jim discussed earlier.

Wally: We will take a quarter of deposit growth being higher than we anticipated because as we've said.

Wally: Pretty consistently now that deposit growth is what governs our ability to grow loans and we want to get back into the business of growing our loan portfolio. So.

Wally: We view this pressure as temporary.

Wally: And then with the fed rate cuts, we had been modeling that there'd be a zero beta to be conservative in our models. So.

Wally: So far with what we saw in the September.

Wally: 50 basis point cut our deposit betas on our non maturity interest bearing deposits or around 40%, which is in line with historical so better than our models.

Wally: So that gives us that gives us confident that we'll be able to keep.

Wally: Keep up on the deposit side, if the fed continues to cut.

Speaker Change: Okay. Thanks, Thanks for that.

Speaker Change: Just to clarify the margin outlook from here I think you said margin compression about 10 bps and in the fourth quarter.

Speaker Change: And that assumes a besides what we got into September another 25 basis point cut in November Fed and then also in December and then I guess there was some commentary about the margin expanding mid single digits do you need a fed pause to see that or do you think you could start to see some.

Speaker Change: Of that mid single digit margin expansion early next year.

Speaker Change: Yes.

Speaker Change: We do not need a fed pause Matt we've modeled this from anywhere from no more rate cuts to seven more rate cuts and in all scenarios our margin expands.

Speaker Change: To levels above where we were we have been so far year to date, what we what we need is a measured cadence of cuts 25 basis cuts preferably 49% of our loan portfolio floats when the fed cuts 50 basis points and one meeting that 40.

Speaker Change: 9% prices down essentially immediately or or loans that are maturing they're maturing throughout the quarter. So it takes time for the benefits of those re pricing to offset the pressure that we see on day, one of a 50 basis point cut. So if we continue to get 50 basis point cuts than you would expect to see.

Speaker Change: The following quarter continued pressure on our loan yields but as soon as the fed pauses or slows the cadence of cuts then those asset repricing benefits kick in.

Speaker Change: And we ended up at the same endpoint, it's just a matter of the short term effect offsets because of the lagging of the repricing.

Speaker Change: Okay, all right understood. Thanks for the commentary and then if I could just sneak one more question in.

Speaker Change: Drake Drake your prepared remarks were interesting and helpful. I think you mentioned it.

Speaker Change: Cheating peer profitability in the near term and then there was also mentioned of achieving upper quartile peer profitability at some point it sounds like you're still working on these details and you'll have more for us next quarter.

Speaker Change: What specific metrics are you focused on and is the board focused on is is this an ROA or efficiency and within the peer levels.

Speaker Change: What do you consider peer and then upper quartile within those metrics.

Speaker Change: Yeah.

Speaker Change: Yeah currently.

Speaker Change: What we're looking at and we're anxious to get.

Speaker Change: One with communicating as we said in the prepared remarks that the next in January we'll we'll do that but we are looking at every aspect of expense and revenue across all lines.

Speaker Change: Using internal metrics to drive what we think is peer like profitability in for that right. Now that's 105106 or whatever that number is but we want to get back to profitability. As we were sitting at the end of 'twenty two going into 'twenty three.

Speaker Change: And to do that what we plan to accomplish in the next several quarters not only puts us in a position to be peer light, but it also puts us in a position once our.

Speaker Change: Planned growth returns and as we've always talked about we've built this company to grow 8% to 10% a year.

Speaker Change: We are adjusting that but once we get back to that growth then that'll be the accelerator for us to get back to that upper quartile profitability.

Speaker Change: Okay.

Speaker Change: Okay. Thanks for the color direct appreciate you taking my questions.

Speaker Change: I'll step back Nike.

Speaker Change: Okay.

Thank you Matt.

Speaker Change: Our next question comes from Tim at Raymond James.

Speaker Change: Your line is open.

Tim: Hey, guys came in for Michael Good morning, everyone.

Speaker Change: Tim.

Tim: Just wanted to follow up on Matt's question around deposit betas.

Tim: I understand you want to grow the portfolio as much as possible but.

Tim: Just want to get a sense of where they're at least could come from with down rates is there a certain mix of the portfolio, that's indexed or their Cds repricing in the next few quarters.

Tim: Kind of a big really from the roll off rate to what you are putting Cds on now at any color there would be appreciated.

Speaker Change: So yes.

Speaker Change: Yes, we would anticipate relief across all of our deposit products.

Speaker Change: No. There's no there's no magic bullet and the time deposit portfolio, where it's going to be a really lumping lumpy repricing benefit in any given quarter, it's really kind of measured throughout the pace of the year we.

Speaker Change: We've seen our noninterest bearing deposits pretty stable in that 22%.

Speaker Change: Range of total deposits right now I think what we would do is is use any continued deposit inflows to continue to allow our broker deposits to roll off the balance sheet, that's our highest cost segment in the deposit portfolio.

Speaker Change: But I would really just kind of think about it as a measure of measured cadence of of.

Speaker Change: Deposit price improvements throughout the course of the year.

Speaker Change: Understanding while it might be.

Lance: Yes, maybe if I could hey, this is lance sorry to kind of go back to the U N math question I do want to kind of make it clear that from a deposit pricing perspective across all markets that is being actively actively managed this is something that we've worked with our Treasury management partners retail partners.

Speaker Change: President's.

Speaker Change: And we have ongoing plans for interest bearing accounts, where we're touching every single one of them in regard to profitability of clients in understanding the competition in the marketplace. So it's not a one size fits all solution.

Speaker Change: But actively managed.

Speaker Change: Throughout each of our markets in which is going to.

Speaker Change: I think do a very effective job for us in getting our deposit costs, where they need to be.

That's great I appreciate it.

Speaker Change: And then back to the kind of strategic actions you might lay out here in January.

Speaker Change: When I get a sense on the expense side.

Speaker Change: You hired a team earlier this year down in South Alabama.

Speaker Change: Yeah, as you get over $10 billion in assets.

Speaker Change: We have constant number meaningfully might be some more team lift out lift outs.

Speaker Change: Maybe some more technology spend on the horizons when you get a sense, where do you think theres opportunities lie just as you look at your expense base right now.

Speaker Change: Yes for us we.

Speaker Change: As we go through this process.

Speaker Change: It's been amazing for me to look back and recognize the impact of our technology investments on the process of strategic planning and the directions. We go. So we are when I think using data today and more accurately looking at profitability and revenue streams across like I said all of that.

Speaker Change: Aspects of the institution it gives us much better feel that we can create efficiency in the organization and still have the opportunity to expand in areas that are meaningful and I am extremely pleased with our southeast expansion and Nate and his team and what's going on there.

Speaker Change: Slightly above our plan continue to do good things, but where we're positioning ourselves at this point to really be able to take off in 25 from a credit standpoint, a number of areas that we are working into make sure that as we launch next year.

Speaker Change: We have everything behind us from a planning standpoint.

Lance: Yeah, and this is lance again, maybe to kind of add on to that to your question.

Lance: I think part of the evolution of this company is the impact of wallet and his team have brought in and the ability to use data in a much more meaningful way. So as we launch our plan I think.

The optimization of everything is on the table as we have looked deeply into banker profitability product profitability branch profitability business lines. All all of that is consistently and deeply being analyzed at this point as we understand.

Lance: Once we cross over the 10 billion threshold and we kind of need to turn the jets on what that looks like from both a growth and a profitability perspective.

Speaker Change: Okay, great and if I could piggyback one more of that.

Speaker Change: You talked about returning to at eight 7% growth range over time, and not not asking for 25 or 2026 guidance or anything but just conceptually what is it going to take is it just a matter of the macro environment improving at lower rates or is it really more specific to you guys. I just wanted to get a appreciate kind of.

Speaker Change: How how you return to that posture.

Atlanta: Yeah. This is Atlanta, and Drake Drake may have a different answer expand on this a little bit for me has really been two things as I work with our president has been about our loan to deposit ratio and driving core liquidity.

Atlanta: That's we've said pretty consistently that thats been the governor that we've sort of pulled back on.

Atlanta: We've had really strict client selection through this process. So it's really been about liquidity and 10 day for me.

Drake Drake: If we can stay under 10 billion for one more quarter, what that does to push it and durbin into.

Drake Drake: 18 months out and then what we've been able to do too.

Drake Drake: Strengthen our balance sheet I mean, just this quarter very proud of the deposit growth the ability to reduce broker deposits. So.

Drake Drake: We have we're sitting here with increasing liquidity a good loan to deposit ratio really positive trends on CRE and ADC.

Drake Drake: So we are positioning ourselves if we crossover tend to be early next year.

Drake Drake: With strong liquidity.

Drake Drake: That's what it takes the shackles off a little bit and allows us to do what we do which is really grow specifically with our footprint in Texas and the southeast.

Operator: Great, pretty sure you take my questions.

Speaker Change: Great I appreciate you taking my questions.

Operator: Thank you, Tim. Once again, ladies and gentlemen, if you would like to ask a question, please press either star one on your telephone keypad to enter the queue or the raised hand icon on the right side of your deal road show screen. Once again, that will be star one on your telephone keypad to join the queue and ask a question, or the raid hand icon on the right side of your deal road show screen.

Speaker Change: Thank you Tim.

Speaker Change: Once again, ladies and gentlemen, if you would like to ask a question. Please press either star one on your telephone keypad to enter the queue for the raise hand icon on the right side, if you could deal roadshow screen.

Speaker Change: And once again that'll be star one on your telephone keypad to join the queue and ask a question or the raise hand icon on the right side of your deal Roadshow screen.

Drake Mills: Ladies and gentlemen, this concludes the question-and-answer session, handing you back to Drake Mills for any additional remarks. Yeah, I'm thinking each one should be enough. Two points.

Speaker Change: Ladies and gentlemen, this concludes the question and answer session and you're back to Drake Mills for any additional remarks. Thank each one of you for being on it too.

Drake Mills: One, there was a comment about credit deterioration, and I take exception to that, and certainly I can do that; it gets personal. But it's to look back on this past quarter, we've reduced past these, we've reduced non-performance, classifies the client, charge all driven were basically driven by a credit that was fully reserved in our classifies and non-performance. Most a lot of that has been driven by a non-credit event through the question of a liability, so I am extremely pleased with where our credit positioning is. The process that we've gone through client selection being a push out another 41 million dollars of credit for this quarter that really don't fit us, not necessarily non-performance credits.

Speaker Change: One there was a comment about.

Drake Mills: Credit deterioration in a take exception to that and certainly I can do that it gets personal but.

Drake Mills: It's to look back on this past quarter, we were we've reduced past dues, we reduced non performers classifieds declined.

Drake Mills: Charge offs, driven were basically driven by a credit that was fully reserved in our classifieds a nonperformer. Most a lot of that's been driven by non credit event through the question will activity. So I am extremely pleased with where our credit positioning is the process that we've gone through client selection banner push out another four.

Drake Mills: $41 million of credits this quarter that.

Drake Mills: Quite that really don't fit us not necessarily nonperforming credits, it's really been a true indication of our commitment to go into 25 with a very strong credit profile.

Drake Mills: It's really been a true indication of our commitment to go into 25 with a very strong credit profile.

Drake Mills: The last point, we have worked diligently this year to position ourselves for deposit growth. We saw a reduction in broker deposits. Our 10B efforts through this past year has really been like lengths that almost have shackles on us. But the reality of it is we're trying to push Darwin in 26, so we've worked diligently to ensure that we stay under 10B this year. Our capacity to grow is well intact. Our AEDCCRE is in a very strong position. The liquidity continues to increase. We've had strict client selection, which I said puts us into a much cleaner credit profile going into 25 in our footprint.

Drake Mills: The last point.

Drake Mills: We have worked diligently this year to position ourselves.

Drake Mills: For deposit growth, we saw reduced a reduction in broker deposits are 10 b efforts through this past year has really been like Lance said almost have shackles owners, but the reality of it is we're trying to push darvin and 'twenty six. So we've worked diligently to ensure that we stay under 10 B this year our capacity to grow.

Drake Mills: <unk> is well intact, our ace ADC CRE is in very strong position liquidity continues to increase we've hedged drip client selection, which I said puts us in a much cleaner credit profile going into 'twenty, five and our footprint I would put it up against any footprint in the country on top of that our team the <unk>.

Drake Mills: I would put up against any footprint in the country. On top of that, our team, the experience of he's in this and what we've been able to accomplish very quickly in the southeast sets us up for a very strong 25, and that's the work that is really starting to pay off that we've gone through for this past year.

Drake Mills: Spirits cohesiveness and what we've been able to accomplish very quickly in the south east sets us up for a very strong 25, and that's the work that is really starting to pay off that we've gone through for this past year. So again. Thank each one of you beyond the call and I look forward to seeing most of you soon.

Drake Mills: So again, thank each one of you for being on the call, and I look forward to seeing you in most of you soon.

Operator: Ladies and gentlemen, this concludes today's ever call. Thank you, and have a great day.

Speaker Change: Ladies and gentlemen, this concludes today's evercore.

Speaker Change: Thank you and have a great day.

Operator: The host has ended this call. Good bye.

Speaker Change: The host has ended this call goodbye.