Q4 2024 First Western Financial Inc Earnings Call
At this time, all participants are in a listen-only mode.
Speaker Change: After the speaker's presentation, there will be a question and answer session. To participate, you will need to press star 1-1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star 1-1 again. Please be advised that today's conference is being recorded. Now it's my pleasure to turn the call over to Tony Rossi. Please proceed.
Tony Rossi: Thank you, Carmen. Good morning, everyone, and thank you for joining us. Our management team are Scott Wiley, Chairman and Chief Executive Officer, Julie Korkamp, Chief Operating Officer, and David Weber, Chief Financial Officer. We will use a slide presentation as part of our discussion this morning. If you have not done so already, please visit the Events and Presentations page of First Western's Investor Relations website to download a copy of the presentation.
Tony Rossi: Before we begin, I'd like to remind you that this conference call contains forward-looking statements with respect to the future performance.
Tony Rossi: and financial condition of First Western Financial that involve risks and uncertainties.
Tony Rossi: Various factors could cause actual results to be materially different from any future results expressed or implied by such forward-looking statements.
These factors are discussed in the company's SEC filings.
Tony Rossi: This was due to a reduction in our cost of deposits, which was larger than the decline we had in our average yield on interest earning assets.
Tony Rossi: While we expect to benefit from rate cuts, we are not solely reliant on rate cuts to see expansion in our NIM going forward.
Tony Rossi: Now turning to slide 10.
Our noninterest income decreased by approximately 500000 from the prior quarter.
Tony Rossi: This was due to a decline in gain on sale of mortgage loans, resulting from the seasonal decline we see in mortgage demand during the fourth quarter.
Tony Rossi: This was partially offset by a record quarter of risk management and insurance fees of $1 1 million, which was double the level, we generated in the fourth quarter of the prior year.
Tony Rossi: In addition, our 2020 for trust and investment management fees increased by 400000 or two 2% year over year.
Tony Rossi: Now turning to slide 11, and our expenses.
Tony Rossi: Our noninterest expense was up 1 million from the prior quarter, which was entirely attributable to a $1 $1 million write down of Oreo following the receipt of an updated appraisals during the quarter.
Tony Rossi: All other areas of noninterest expense were relatively consistent with the prior quarter as we continued to tightly manage expenses, while also making investments in the business that we believe will positively impact our long term performance.
Tony Rossi: Now turning to slide 12, well look at our asset quality.
Tony Rossi: As Scott indicated earlier, we saw generally positive trends in the loan portfolio in the fourth quarter with a decline in nonperforming assets and another quarter of immaterial charge offs.
Tony Rossi: With the positive overall trends, we had in asset quality and improved economic forecasts, we had a small release of reserves, which resulted in a negative provision for loan losses in the quarter.
Tony Rossi: Now I'll turn it back to Scott Scott.
Scott Wiley: Thanks, David.
Speaker Change: Turning to slide 13, I'll wrap up with some comments about our outlook for 2025.
Speaker Change: While we're pleased that we've been able to improve our financial performance over the past few quarters, we're still not at the level of performance that we target, but we expect to make continued improvement of our financial performance in 2025.
Speaker Change: Overall economic activity continues to be healthy in our market and with the strength of our balance sheet. The franchise. We've built we see good opportunities to capitalize on market disruption and challenges being faced by competing banks to add new clients in banking talent.
Speaker Change: Continue to prioritize prudent risk management and conservative underwriting criteria, but we are seeing some increase in our loan pipelines as the new bankers. We've added in the past several quarters increase their level of productivity.
Speaker Change: Deposit gathering will remain a top priority throughout the organization as we work to further reduce our loan to deposit ratio.
Speaker Change: With the successful repositioning of our balance sheet and the <unk>.
Speaker Change: Increased liquidity that we have in our lower loan to deposit ratio. We believe we are well positioned to generate a higher level of loan growth in 2025.
Speaker Change: As loan demand increases.
Speaker Change: Maintaining our disciplined pricing and underwriting criteria.
Speaker Change: We see a number of catalysts that we expect to contribute contribute to our improved financial performance in 2025.
Speaker Change: These include a higher level of loan growth continue to.
Speaker Change: Expansion in our net interest margin.
Speaker Change: The redeployment of cash generated from the sale of our Oreo properties into interest earning assets.
Speaker Change: More robust business development activities.
Speaker Change: In our wealth management business as a result of the changes we made in this business during 2024.
Speaker Change: More operating leverage as we increase revenues, while maintaining disciplined expense control.
Speaker Change: It should the environment become more favorable for mortgage demand in 2025 that we should benefit from the envelope as we added during 2024.
Speaker Change: Generate a higher level of gain on sale of mortgage loans.
Speaker Change: The positive trends, we're seeing in a number of key areas are expected to continue which we believe should result in steady improvement in our financial performance and further value being created for our shareholders in 2025 as well as in the coming years.
Speaker Change: With that we're happy to take your questions. So impairment can you. Please open up the call.
Speaker Change: Thank you so much and as a reminder to ask a question simply press Star one one on your telephone and wait for your name to be announced to remove yourself Press Star. One again, please standby for your first question.
Speaker Change: Yes.
Speaker Change: And he is from the line of Brett <unk> would have D. Please proceed.
Speaker Change: Hey, good morning, everyone. Good.
Brett: Morning, Brett.
Speaker Change: Wanted to just start off on the large Oreo property. So just to be clear the ranch is under contract.
Brett: Was just trying to.
Brett: A little surprised if that's the case just given that the winter selling season.
Brett: Colorado is usually a little tough so I was just hoping for some more color around that.
Brett: The sale of a large property and if that was the write down.
Brett: And already this quarter or if that was one of the houses.
Brett: So.
Brett: So we have three properties left.
Brett: In the resolution of that Aspen problem loan.
Brett: And.
Brett: One of them.
The three.
Brett: Three metals ranch, which is.
Brett: But very large and unusual a property outside of basalt, which is just down valley from Aspen.
Brett: It actually each of these three properties is a pretty unique property none of them are good.
Brett: No.
Brett: Sure.
Brett: Production homes in our neighborhood right. These are all very three very unique properties and so you know.
Brett: In the Aspen market, it's just not very predictable of who's going to show up when.
Brett: And I would say since we've got control of these properties, we've had lots of showings and lots of interest in all three of them.
Brett:
Brett: Towards the end of the fourth quarter, we had a couple of strong bidders show up for the ranch.
Brett: And.
Brett: There was a.
Brett: Lot of activity that ended up with us accepting a contract from one of them.
Brett: We haven't.
Brett: Really talked about the price and I would be reluctant to prior to the closing which is scheduled for early February but I would tell you very strong price that will not involve a write down on that property.
Brett: We're really pleased with the buyer and what that's going to do for for that branch of the future in the community. So it's a really very happy ending to that part of the story.
Brett: Hoping it happens like I don't want to get out in front of that.
Brett: No.
Brett: So that's that one Brett the other two.
Brett: There.
Brett: Are a lot smaller dollar amounts the ranch.
Brett: It was.
Brett: And the high Twenty's.
Brett: On our books.
Brett: Our asking price the other two are kind of five or $6 million.
Brett: So completely different price point.
Brett: They are both on the river.
Brett: Basalt and so they're very desirable unusual properties are very different from each other.
Brett: We've had I would say steady interest since we started marketing those we've had a number of kind of lowball offers we've had a few serious offers.
Brett: Nothing really that we felt we should.
Brett: Jumped behind yet and I think it's.
Brett: Our that we're probably not going to sell those during the winter season. It but you never know I mean, I would've said the ranch hotel until the summer either in there it is so.
Brett: So you don't have to see what happens with the other two but.
Brett: We're really happy with the outcome on the ranch and hope that that closes on schedule, which is as far as we know it's 100% on track to do.
Brett: Yes.
Brett: Okay.
That's helpful color on that.
Brett: And then maybe for Julien David just the margin.
Brett: Outlook from here with or without rate cuts.
Brett: How do you think the margin progression will trend through the year and how much maybe you might have repricing in the loan portfolio from the fixed side.
Brett: Yes, Brett.
Brett: You know we feel that we do have the opportunity to continue to expand our margin through 2025 without breakouts, obviously rate cuts will certainly benefit that additionally.
Brett: As far as the rate cut standpoint, I think our previous comments on now roughly a $1 million of annualized NII increased per 25 basis point reduction I think thats still a fair assumption.
Brett: And then without rate cuts you know.
Brett: We have the opportunity when we look at the loan portfolio to continue to turn that over.
Brett: As we bring on new loans at a higher level than our average yield on the loan portfolio and then on the deposit portfolio and certainly need stabilized DVA as.
Brett: We're focused on.
Brett: Seeing some growth in 2025 and DDA. So if we can achieve that growth in DDA is obviously that that improved mix will help on our average cost of funds as well so.
Brett: That's how we're thinking about it for 2025.
Speaker Change: Okay, and then <unk>.
David just to follow up on that.
Speaker Change: Any thoughts on the margin progression throughout the year in terms of basis points and maybe if you had it for December.
Speaker Change: For the month of December we were at $2 47.
Speaker Change:
Yes.
Speaker Change: Like I said, we are we are expecting NIM expansion I think there's just.
Speaker Change: A number of variables at play there that.
Speaker Change: It could certainly impact that whether it's quicker or slower than our expectations.
Speaker Change: But yeah, we are.
Speaker Change: Thinking that we will continue to see NIM expansion in 2025.
Speaker Change: Okay Fair enough I appreciate all the color guys.
Speaker Change: Thank you I'm on for our next question.
Speaker Change: And he comes from the line.
Speaker Change: Lee with K BW. Please proceed.
Speaker Change: Hey, Thanks for taking my question wanted to start on.
Speaker Change: On feeds and especially that the risk management insurance fee. There was a really strong quarter there any color on what drove the increase in the quarter.
Speaker Change: Sure so.
Speaker Change: One of the efforts we've been making this year what is too.
Speaker Change: Strengthen our.
Speaker Change: What we call a PJM planning trust and investment management.
Speaker Change: Offering including.
Speaker Change: Insurance and retirement services.
Speaker Change: <unk>.
And so we had expectations this year that we would be able to grow that insurance business and.
Speaker Change: We were holding our breath by the fourth quarter, because we weren't really seeing the.
Speaker Change: Progress that we were hoping for during the year, but obviously.
Speaker Change: That stuff turns out to be very seasonal anyways it tends to happen.
Speaker Change: In the latter part of the year.
Speaker Change: It was a very strong fourth quarter for us.
Speaker Change: This year like David talked about it was a record quarter I hope that this is.
Speaker Change: An important part of our effort to get our fee income back in line, where it's historically been we've been able to operate first western over the years pretty.
Speaker Change: Pretty close to 50%.
Speaker Change:
Speaker Change: Split between fee income and.
Speaker Change: And net interest income and that number came down as we've grown the bank post IPO.
Speaker Change: We've tripled the size of the bank and so that fee income really has not kept up with that.
Speaker Change: Think we were down kind of $24, 25% a couple of quarters ago, I think 27, 7% in Q4.
Speaker Change: So I'm, hoping that.
Speaker Change: This is a indicator of things to come in the future I don't I don't know that we will continue to have record quarters every quarter and and insurance I would say, that's very unlikely, but another strong year next year, another strong quarter fourth quarter next year I would say that's.
Speaker Change: Where we are.
Speaker Change: Working towards and targeting and building towards <unk>.
Speaker Change: Small part of the overall piece.
Speaker Change: <unk> fee business.
Speaker Change: That grew the <unk> business without insurance grew 2% year over year.
Speaker Change: And I'd like to see that really accelerate and grow and become a meaningful part of our fees and then it would sure be helpful. If mortgages would wake up I think the mortgage industry has just gotten collaborate this year.
Speaker Change: We had signs of hope in Q3 that really did not pay out in Q4, which is seasonally slow any ways, but.
Speaker Change: But Q4 was pretty disappointing on the on the mortgage side.
Yes.
Speaker Change: Mortgage continues.
Speaker Change: Activity just continues to be a little blood does that impact your thoughts on hiring in 2025 and hiring additional additional MLR.
Speaker Change: You know we had some success with that this year, which again doesn't show up anywhere right.
Speaker Change: <unk>.
I wanted to bring in a number of new <unk>, we did that successfully they've been producing.
Speaker Change: At reasonable levels, given the market, we actually have opened two new production offices in 2025, so those 'twenty three four I mean those expenses are in there.
Speaker Change: And I think some of the results. We saw in Q3 were reflecting that those are for some of the new folks too.
Speaker Change: The question is what's going to happen in 2025 with that business and I think it was.
Speaker Change: Slightly positive fourth we made money in mortgages in 2025, we outperformed plan by a little bit. So we're definitely high five and the team on.
Speaker Change: Hanging in there and performing well compared to the industry.
Speaker Change: But we'd like to see.
Speaker Change: That normalize and really get back to be a nice contributor for us in our overall financial picture.
Speaker Change: And I would tell you we are seeing signs of life in January we had a really good week last week after a pretty quiet first couple of weeks of the year. So hopefully, we'll see that pickup certainly as we get out of the seasonal slow period, which will be the first quarter still.
Speaker Change: Got it alright.
Speaker Change: Yes.
Speaker Change: Just wanted to check with Julian just any she wants to add I'm worried that she looks over that day to day and pays a lot of attention to it.
Speaker Change: Sorry, what do you.
Speaker Change: Yes, and then I just wanted to follow up on expenses, sorry, if I missed it but is there any run rate you're expecting for the first quarter of 2025.
Speaker Change: Yes so.
Speaker Change: We have worked hard to keep.
Speaker Change: Expenses flat over the over the last year or so and we were trying to do that again in 2025.
Speaker Change: There's just a lot of inflationary pressure kind of everywhere in our business.
Speaker Change: And so yes.
Speaker Change: The efficiency initiatives, we've had productivity initiatives, we've driven more accountability.
We've really.
Speaker Change: Yes people to step up in.
Speaker Change: And you'll drive more productivity and even with that I think it's going to be hard to hold the line on the $19 5 million is kind of the target we've talked about.
Speaker Change: In 2025, so we're thinking in terms of guidance I think $20 million is probably a reasonable guesstimate for.
Speaker Change: 2025 quarterly operating expenses.
Hopefully, we can outperform that maybe there'll be some bad surprises I don't know, but that's I think a reasonable starting point.
Speaker Change: Perfect. Thanks for taking my question.
Speaker Change: Thank you so much my moment for our next question.
Speaker Change: And he comes from the line of Matthew Clark with Piper Sandler.
Matthew Clark: Hey, good morning, everyone.
Speaker Change: Morning, Matt.
Matthew Clark: Just on the.
Matthew Clark: The Oreo.
Speaker Change: I just wanted to confirm that the marks on the ranch are now kind of fully reflected in the fourth quarter relative to sale and then as a follow up.
Matthew Clark: Two homes that you have out there.
Can you just give us a sense for the mark you've incurred.
Matthew Clark: On those two in your comfort level kind of being able to clear clear those houses at that level.
Matthew Clark: So I have our controller in here, giving me the stink eye because she likes to remind me we have to carry these things at the lower of cost or.
Speaker Change: Our market.
I keep telling her.
Speaker Change: The market could be better.
Speaker Change: She has like lower of cost or market. So.
Speaker Change: So where we are on that as well.
Speaker Change: We're carrying the ranch below the price that we have it under contract for us so that would be a first quarter impact.
Speaker Change: And then the other two properties, we have to appraise them annually. David said in his comments that we got new appraisals in the quarter, we actually did and we got them on January one and I'm talking to accounting, saying.
Speaker Change: Really we're going to write these Q4, because we get the report the updated appraisals, but those are the rules. So we follow the rules and those are the new appraisals.
Speaker Change: I believe that these properties are very unusual.
Speaker Change: And we find the right buyer, we're going to get a good bid on those if we don't we'll have to.
Speaker Change: Look at the.
Speaker Change: The carrying costs and hopefully.
Speaker Change: You'll get those off the books here.
Speaker Change: In 2025, but that's.
Speaker Change: That's how the accounting works.
Speaker Change: So the updated appraisals on Jan one were reflected in <unk>.
Correct.
Speaker Change: Okay.
Speaker Change: Okay and then.
Speaker Change: Alright.
Speaker Change: Yeah.
Speaker Change: And then back back to the margin do you have the spot rate on deposits at the end of December.
Speaker Change: Yes, it was 3.0% to 5%.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: And then.
Speaker Change: I think when we met a.
Speaker Change: A couple of months ago.
Speaker Change: And updated numbers, we were we were kind of trending toward it.
Speaker Change: $2 73 margin for the year, but that was before I think we knew the ranch might be sold before mid year.
Speaker Change: And knowing you're going to be able to redeploy those proceeds I mean do you feel better about.
Speaker Change: That $2 73 for the year on average kind of exiting the year, obviously higher than that but.
Speaker Change: Any updated thoughts on kind of where you might exit the year based on your kind of baseline assumptions on the margin.
Speaker Change: Well.
Speaker Change: Let me just start by your comment about the benefit to NIM.
Speaker Change: Taking.
Speaker Change: $27 million in non earning assets and turning it into a.
Speaker Change: Productive, earning assets is right on I mean, that's a material number.
Speaker Change: And we're really.
Speaker Change: Pleased to be able to have that for the bulk of 2025 now.
Speaker Change: Do you want to.
Speaker Change: Make any comment about the $2 73.
Speaker Change: I think that is in the ballpark of what we're thinking for.
Speaker Change: For Q4 for December.
Speaker Change: Yes, I think that's still achievable.
Speaker Change: Right.
Speaker Change: We've said, we've got to see improved loan production and we need to get the right behaviors on our on our DDA as well.
Speaker Change: But yes, I think that that can still be achievable.
Speaker Change: And thats for the year up just to clarify not exiting the year.
Speaker Change: Exiting the year right, David exited and get them.
Speaker Change: Okay.
Matt: I do think Matt.
Matt: That historically first western has produced a net interest margin of <unk>.
Matt: Some number like three $3 15 $3 20.
And I think as we see a normalized economic environment with a positively shape yield curve and all the dust settles on all this stuff we've been through over the last couple of years, we're going to get back there, but I don't see any reason we wouldn't.
Matt: That's not going to happen in 2025.
Matt: Continued progress in that direction as we saw in the latter half of last year.
Speaker Change: Yeah, Great and then last one from me just on the noninterest bearing deposits.
Matt: On average they were.
Matt: Up a little bit, but at the end of the year they dropped pretty meaningfully.
Matt: Color as to any lumpiness, there or expectation that some of that will come back.
Matt: Yes, so we did.
Matt: A close look at why it came up at the end of Q3 and why it came down in Q4 and.
Matt: There were some one time things and.
Matt: At the end of Q3.
Matt: That are normal for us clients that have liquidity events the deposit at the bank.
Matt: And then they use it for something in Q4, I thought that that average balance number was really important for us to see average deposits up 4% in the quarter.
Matt: <unk> was really positive and I personally don't put a lot of weight on.
Matt: The quarter end number because it does bounce around Q4 has a particular really there's two months of the year, where we see artifacts in tax season, we'll see some runoff and then a year and we see run up because of the operating accounts for our clients they'll go and pay bonuses and they pay distributions out and those are coming out of there.
Matt: Operating accounts, which our DDA is typically and so you do see that in Q4 and especially in the latter half of December are very typical for us.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you one moment for our next question.
Speaker Change: And it comes from the line of Bill <unk> with Titan Capital. Please go ahead.
Bill <unk>: I had a couple of questions first of all.
Scott Wiley: Scott you had referenced.
Bill <unk>: Loan activity picking up.
Bill <unk>: After the election would you please talk a little bit about the loan pipeline and the overall discussions that you've been having since the election.
Bill <unk>: If you are sensing that there is a mind shift that's taking place.
Bill <unk>: Liverpool are unfavorable.
Bill <unk>: Yes, I mean, theres a lot of factors in loan demand and one of them is the mood of our type of client and when people are feeling.
I'm confident and optimistic about the economic or political outlook.
Bill <unk>: That's going to be good for loan demand in our in our market and with our niche. So definitely we're seeing that I would say.
Bill <unk>: With other banks not really wanting to do it.
Bill <unk>: Investor.
Bill <unk>: Commercial real estate.
Bill <unk>: We've seen a lot more demand for that we don't really want to do it either.
Bill <unk>: Our appetite in that is full and so as both Julian David mentioned in their comments, we've really been focused on owner occupied commercial real estate, which is what we do anyway, but that's really been the focus for us in the in the latter part of two.
Bill <unk>: <unk> 2024, when we're looking at commercial real estate.
Bill <unk>: The other really positive trend as we had.
Bill <unk>: Been focused here last couple of years I would say on building more C&I demand.
Bill <unk>: And that has really played out nicely.
Bill <unk>: In Q4, and we were looking.
Bill <unk>: We did our annual or monthly.
Bill <unk>: Senior management meeting yesterday, and we're talking about the loans that are in the pipeline ready to close here in in.
Bill <unk>: In Q1.
Bill <unk>: And the bulk of those are either C&I or cash.
Bill <unk>: Cash and marketable securities secured so it's really great to see that that coming out of not reliance on.
Bill <unk>: On CRE year, especially not investor CRE, So I think.
Bill <unk>: Other bands there competition continues to be very tough we talked several times in our comments today about being strict on on rate and <unk>.
Bill <unk>: In terms and I think.
Bill <unk>: The team is doing a good job with the discipline there and in spite of that we had a really strong quarter in Q4, and a strong pipeline going into 2025.
Speaker Change: And so just to pick up on that so look the loan pipeline increase is that what is that what we're hearing you say Scott.
Speaker Change: Significantly and I think the right kind of loans good good quality relationship loans with a strong commercial our investor base.
Speaker Change: Okay. That's that's great.
Speaker Change: And then I did you actually a great segue into the C&I, So C&I loans versus on the books versus a year ago were down over $100 million and so my question was going to be is that intentional or a function of the borrowers need.
Speaker Change: But given the strength that you just highlighted in the in the C&I pipeline, maybe it would be more appropriate to ask kind of why was this the C&I book down over the last year and then what's what are in process of changing and kind of what's what's the <unk>.
Speaker Change: Flexion point, we're dealing with now.
Speaker Change: Yes, I think.
Speaker Change: Some of the.
Speaker Change: The problem loan that we identified.
Speaker Change: From our friend in Aspen.
Speaker Change: <unk> was a C&I loan so I mean, that's a big part of that.
Speaker Change: And I think some of this is just the ups and downs of what we see in commercial lending and actually so I think increased line utilization in Q4 due to that you were talking about that.
Speaker Change: The other day I thought so.
Speaker Change: Hum.
Speaker Change: I don't think theres anything baked to read into the numbers there bill other than just the ins and outs of our of our.
Speaker Change: Of our.
Speaker Change: Loan clients I do think.
Speaker Change: What I said before is true which is when you look at the pipeline of what we're seeing now the focus that we've had on C&I, we're seeing more demand and when we talk about pipeline I'm talking specifically about things coming out of the pipeline and into Clos.
Speaker Change: Closed loans now.
Scott Wiley: And Scott just to make sure that I'm understanding correctly that the.
Scott Wiley: The increase in C&I activity that that you are seeing in terms of new new loans being put on the books is a function of both.
Scott Wiley: Both the efforts the concerted efforts that you all have been making over the last few quarters coming to fruition along with a a more confident backdrop by your customer. So it's a combination of both of those is that correct.
Scott Wiley: That's right yes.
Scott Wiley: Okay, great. Thank you for taking the questions.
Speaker Change: Yep. Thank you bill. Thank you so much and as I see no further questions in queue ill turn it back to management for final remarks.
Scott Wiley: Great.
Scott Wiley: Well.
Speaker Change: Thanks, everybody for dialing in today, we believe that this business can and will deliver attractive shareholder returns as it has in the past and is now back trending toward.
Speaker Change: I started my first bank and 1987, and so I've seen a number of rate cycles over these years and none was SaaS changing or as long of an inverted yield curve as what we've seen here over the last.
Speaker Change: A few years.
Speaker Change: In this market.
Speaker Change: This made for a challenging couple of years for banks and our niche in first western has proven to be up to these challenges.
Speaker Change: We reported in the past couple of quarters now we've seen really positive underlying trends that are now playing out in our numbers with I think much more to come.
Speaker Change: With some modest growth in 2025 improve margins.
Speaker Change: Fewer non earning assets improved fee income and limiting expense growth all of those should produce a nice additional operating leverage and continued earnings gains. We believe this shift to offense at first western will make 2025, a really good year for our stakeholders, including our shareholders. So.
Speaker Change: We really.
Speaker Change: Appreciate the support we've had and I.
Speaker Change: I appreciate people, taking the time to dial in and.
Speaker Change: Speak with us today.
Speaker Change: Everybody.
Speaker Change: And thank you everyone for participating in today's conference and you may now disconnect.
Speaker Change: Okay.
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