Q1 2025 Guaranty Bancshares Inc Earnings Call
Good morning, welcome to the guarantee Bancshares first quarter 'twenty 25 earnings call. My name is known a branch and I will be your operator for today's call.
I would like to remind everyone that today's call is being recorded.
After our prepared remarks, there will be a Q&A session.
Schilling, Jacobson: Our hosts for todays call will be tie accident, Chairman and Chief Executive Officer, Schilling, Jacobson Executive Vice President and Chief Financial Officer.
Speaker Change: To begin our call I will now turn it over to our CEO Tae Ashton.
Schilling, Jacobson: Thank you good morning, everyone and welcome to our earnings call for Q1 2025.
Speaker Change: Guaranty achieved good results in the first quarter this year.
Speaker Change: I'm very proud of our team and our continued their continued effort to serve our customers and build new relationships across all of our markets in Texas.
Speaker Change: Texas economy remains strong and growing.
Speaker Change: While there's certainly economic noise and uncertainty on national level. So far we are not seeing negative impacts are signs.
Speaker Change: This quarter, we did highlight the granularity of our balance sheet, both in our loan book and deposit base.
Speaker Change: Similar to how we've done in past uncertain times during Covid and two years ago. When we had there were bank failures, we continue to see the granularity of our balance sheet as as often real resilience in uncertain times for our company.
Speaker Change: Our loan book did shrink a little in Q1, however, our loan pipeline. So far in Q2 is as strong as we've seen it in the last three years. So we'll see how the quarter turns out.
Speaker Change: Our net interest margin continues to build and we're modeling for good results for the year.
Speaker Change: Regardless of whether we see rate cuts or see significant loan growth in our loan book.
Speaker Change: We did repurchase some shares in Q1, as we announced we were planning to do at the end of Q4 last year.
We are currently not in the market and active in the market, but we do stand ready to reenter the market if and when we decided it makes sense.
Speaker Change: Our capital asset quality and liquidity all stand at very strong levels.
Speaker Change: We continue to be well positioned for future growth while at the same time also being well positioned for an economic slowdown whichever we ended up facing them.
Speaker Change: I'm going to turn it over she lane to go through the Investor deck, and then we'll answer any questions you have chilling.
Schilling: Thanks, Tim.
Speaker Change: I'll start today with the balance sheet.
Speaker Change: As Tom mentioned, our total assets increased about $37 million during the first quarter cash.
Speaker Change: Cash was up nearly 72 million, primarily due to loan and securities related cashless as well as we had increases in deposit balances during the quarter at $12 2 million.
Speaker Change: Our net loans decreased 23 million, while our total securities portfolio decreased about seven 2 million overall, we did purchase 30.9 million in new a S. S securities during the quarter, but that was offset by about 30 point 31 5 million in maturities calls and mortgage back.
Speaker Change: Paydowns over the entire portfolio.
Speaker Change: Unrealized losses on our S. S Securities pretax decreased from $20 8 million at December 31st 214, 7 million on March 31st which was an improvement of about $6 million of course, you know, we're not sure exactly where that's at today, but hopefully.
Speaker Change: And in the right direction. There. We also sold the one remaining or a property that we had which was a single family home in the DFW market that had a book balance of $1 2 million.
Speaker Change: During the first quarter.
Speaker Change: Total equity increased by $6 7 million this quarter, resulting primarily from net income of $8 6 million, we had employee stock option exercises that netted us about $1 3 million and an improvement in other comprehensive income this 4.7 million due to the decrease.
Speaker Change: Unrealized losses on <unk> Securities.
This was offset by stock repurchases that time mentioned it it was $5 2 million and we also paid dividends of 2.8 million during the quarter and we're happy to say that we did increase our dividend in the first quarter to 25 cents per share, which is up from 24 cents per share for each quarter.
Speaker Change: In 2024.
Speaker Change: Onto the income statement the company earned $8 6 million and net income in the first quarter, which equates to 76 cents per basic share.
Speaker Change: From 88 cents per share linked quarter and up from 58 cents per share in the first quarter of 2024.
Speaker Change: Compared to both the first quarter of 24 in the linked quarter. We continue to have good improvements in net interest income.
Speaker Change: While noninterest income was down in net interest non interest expense with a bit higher which I'll discuss more shortly.
Speaker Change: Our return on average assets was 1.13% for the quarter.
Speaker Change: Compared to one point to 7% last quarter and.
Speaker Change: And our return on average equity was 10 eight 3% for the quarter compared to 12 six 8% in Q4.
Speaker Change: Our net interest margin was 3.7% in the first quarter, which is an increase from 3.54% in the fourth quarter and 3.16% during the same quarter last year.
Speaker Change: But men increases resulted from the fed lowering their rates by 75 basis points familiar in that late 'twenty 'twenty four as well as continued repricing of our loan securities and certificate of deposit portfolio.
Speaker Change: The average yield on our interest earning assets remained flat at five 6% from the fourth quarter, while our cost of total deposits decreased 15 basis points from 2.11% in the fourth quarter to 1.96%.
Speaker Change: In the first quarter.
Speaker Change: We also believe and we've mentioned this the past few calls that we've got some continued tailwind in our NIM for the remainder of 2025, and we really expect it to continue to increase a basis point or two over the next several months. The reason for our assumptions here are that you know aside from Archie.
Speaker Change: And $63 million in loans that float daily. We also have about $341 million in variable rate loans that reprice on different time intervals, but that we expect to reprice over the next 12 months. So the $341 million that we expect to reprice over the next 12 months those loans current.
Speaker Change: We have a weighted average rate of 636%.
Speaker Change: Now assuming rates just stay where they are and that all of that 340 million reprice. According to their current loan terms and balances the new weighted average wait 12 months from now on that pool would be 7.42%, which is an increase of 106 basis points.
Speaker Change: Now on the cost of fund side, we also have $613 million in certificates of deposit that are repricing between April 1st and year end.
Speaker Change: They currently have a weighted rate of 4.2 person.
Speaker Change: Two 4% if all of those Cds were to renew into the same product in our current rates the new weighted average rig will be approximately $3 six 5%.
Speaker Change: So of course, not all of the loans are C. D's may reprice at those original terms, but that really helps illustrate our expectation for continued NIM tailwind over the next several months.
Speaker Change: Noninterest income decreased by 693000 during the first quarter compared to the fourth quarter.
Speaker Change: This is primarily the result of elevated noninterest income in the fourth quarter.
Speaker Change: Rental income that we were receiving on the Austin or a property and then a gain on sale of about same property, which was sold during the fourth quarter.
Speaker Change: We also had a loss on sale.
Speaker Change: 184000 during the first quarter of 2025 from the sale of about one remaining property debt.
Speaker Change: That added to that change quarter over quarter.
Speaker Change: We also had service charges and gains on sale of mortgage and SBA loans that went down slightly really due to lower volumes during the first quarter.
Speaker Change: And then we had debit income that was up during the first quarter of 'twenty.
Speaker Change: 25, compared to the fourth quarter of 24 in the first quarter 'twenty four that's due on an annual Mastercard bonus that we received is about 400000 pounds. During the first quarter of this year in 2024 that was recorded during the second quarter. So you'll see an elevated debit card income during the second quarter of last year.
Speaker Change: Noninterest expense increased by $1 3 million in the first quarter compared to the fourth quarter and that was primarily due to employee comp and related benefits.
Speaker Change: During the first quarter of every year, we fund and expense the company contribution to our executive incentive retirement plans and we also have additional payroll tax expense in the first quarter that's related to our year end employee bonus.
That's paid at the end of 'twenty at January <unk>.
Speaker Change: Both of those expenses accounted for about 575000 in the linked quarter change.
Speaker Change: And again those are consistent.
Speaker Change: Consistently expense or make a difference during the first quarter of every year.
Speaker Change: We are also partially self insured for health insurance, which I mentioned last quarter, we were over accrued at the end of 'twenty 'twenty four due to lower than expected health claims.
Speaker Change: And that resulted in a $446000 reversal of health expense accruals in the fourth quarter of 'twenty 'twenty, four which we did not have in 2025 that resets in January of each year.
Speaker Change: We expect employee comp and benefit costs to be lower in subsequent quarters and and also more consistent.
Speaker Change: Finally, our efficiency ratio this quarter was 60, 678%.
Speaker Change: Alright onto our land portfolio and allowance for credit losses.
Speaker Change: And by the time I mentioned gross loans decreased 23 million in the first quarter and you know I spoke to this a little bit, but we certainly anticipated and saw a strong loan pipeline at the end of 'twenty 'twenty four but demand for many of our borrowers has really slowed during the first quarter as a lot of them are waiting to see how the tariffs.
Speaker Change: The uncertainty is going to impact their businesses.
Speaker Change: And the overall economy.
Speaker Change: That being said our balance sheet is really strong and we've got very good liquidity and are ready to grow those loans. When our borrowers are readied ties that are our pipeline is very full right. Now. So we're really hoping we can get that going here soon.
Speaker Change: Nonperforming assets continued to remain at very low levels or M. P. A to total assets were 0.15% at March 31st compared to 0.16% at year end.
Speaker Change: Nonperforming assets include Oh, sorry in non accrual loans. So the sale of the property in Austin during the first court during the fourth quarter helped lead to the improvement there and then the sale of our single family or a property in DFW helps reduce the ratio even more in the first quarter.
Speaker Change: Net charge offs also remained low.
Speaker Change: Net charge offs were 0.0% to 2% in the fourth quarter of the first quarter of 2025.
Speaker Change: They were essentially zero.
Speaker Change: Oh last quarter and they were also 0.02% in the first quarter of 'twenty 'twenty four.
Speaker Change: Our non accrual loans were up slightly to $4 8 million from $3 7 million as of year end and that represents 0.23% less than a quarter the percent of our total loans.
Speaker Change: The increase was primarily due to one single family loan borrower that we're working on a solution for them.
Speaker Change: We don't expect any losses on that loan is very well collateralized.
Speaker Change: Our substandard loans were up slightly but fairly consistent with year end.
Speaker Change: We didn't have that reversed.
Speaker Change: Provision for credit losses of 300000 during the quarter.
Speaker Change: And we didn't change our qualitative factors at all that decreases resulting almost entirely from lower loan balances and stable credit trends.
Speaker Change: Our quarter end ACL coverage is 1.32% of total loans, which is one basis point lower than our year end percentage of 1.33%.
Speaker Change: And you know if the.
Speaker Change: Tariff situation, if it's cleared up and we have some more certainty there and the economic outlook starts to improve we do anticipate that we will adjust the qualitative factors at some point, which may result in in future.
Speaker Change: Reverse provisions as well.
Speaker Change: Of course that'll be offset if the loan portfolio starts to grow again.
Speaker Change: Oh, right aren't you deposit liquidity and capital.
Speaker Change: Our total deposits grew $12 2 million during the quarter money market and savings balances increased 19, 6%.
Speaker Change: $19 6 million, sorry about that DDA balances increased $11 5 million during the quarter and our certificates of deposit decreased $18 9 million.
Speaker Change: Noninterest bearing deposits continue to represent a good percentage of our total deposits. We had a ratio was 31, 3% at quarter end up a couple of.
Speaker Change: Basis points from last quarter.
Speaker Change: With respect to overall deposit risk guaranteed how's it granular and historically stable core deposit base at the end of the first quarter. We had just over 91100 active deposit accounts that had an average account balance of just under $30000.
Speaker Change: Our uninsured deposits also remained relatively low excluding our guarantee owned accounts.
Speaker Change: And insured deposits were 26, 7% of total deposits at quarter end.
Speaker Change: As Tom mentioned and I mentioned previously our liquidity right now is great. We're ready for some loan growth. We ended the quarter with a liquidity ratio of 19th week, 8% compared to 16, 5%.
Speaker Change: At year end.
Speaker Change: Our cash balances increased 72 million during the quarter to 217th week 8 million and total cash and cash equivalents.
Speaker Change: We also anticipate another 116 million in principal and interest cash flows from maturing securities between now and year end that will either used for loan growth or would you reinvest in securities or cash.
Speaker Change: We also have total contingent liquidity of about 1.3 billion that's available through the federal home loan Bank the Federal Reserve Bank of.
Speaker Change: Correspondent bank fed funds lines, and our revolving line of credit.
Finally, with respect to liquidity you know our total net unrealized losses on investment securities remains very reasonable of $41 7 million.
Speaker Change: Of which $14 7 million is related to our E. S. S Securities and included in a M C I on the balance sheet.
Speaker Change: Capital is also strong and like I mentioned, we used a portion of our excess capital and for the first quarter to pay 25 cents per share dividend and we also repurchased 127537 shares of guarantee stock, which represented about one 1% of outstanding shares.
Speaker Change: And this of course continues to add intrinsic value for our shareholders.
Speaker Change: Our total equity to average assets as of year end January.
Speaker Change: January 30, I'm, sorry at March 31st with 10, 5% and our TCE to total assets was strong at 937%.
Speaker Change: So this concludes our prepared remarks, I will turn it back over to known us for Q&A.
Speaker Change: Thank you Shirley.
Speaker Change: Our first question.
Speaker Change: It was from what he's like what K B W.
Speaker Change: What do you can you on mute your line.
Good morning, guys can you hear me, where you hear you good morning My name.
Speaker Change: Hey, I wanted to start on the on the loan pipeline, it's encouraging to hear.
Speaker Change: It's kind of at a multiyear high any color on the mix of the portfolio.
Speaker Change: Pipeline and how that compares to one portfolio today.
Speaker Change: What it's similar to the current composition of the loan portfolio, it's really across our footprint.
Speaker Change: And really all four of our regions Ah, it's pretty granular no lack our portfolio, but we.
Speaker Change: We just really going after them. After the November election, we just started seeing a really strong uptick in an opportunity that made sense to us loan opportunities across our footprint.
Speaker Change: We continue to see that that's probably muted sorry in the last couple of weeks, which makes sense, but you know as we said today, we have a very strong pipeline.
Speaker Change: We'll just see how that plays out, but that's where we're really plays because of where we are with the pipeline as of today.
Speaker Change: Yeah and then.
Speaker Change: As you talk to your clients.
Speaker Change: Trying to get a sense.
Speaker Change: When.
Speaker Change: Sense of timing on when they could.
Speaker Change: Secured on these ones and in your opening comments you made a comment about the Texas markets are really strong it's kind of the.
Speaker Change: National uncertainty I guess as you talk to your clients what are they looking for to get comfortable in this current environment.
Speaker Change: Well I mean, I think there would either like over the rest of us I mean, there's just uncertainty.
Speaker Change: If you don't turn on CNBC, they're saying, they're not saying anything in their local markets that are really you know concerning at this point and but like everyone else. They.
Speaker Change: Look and see what's happening on the national scene in it that.
Speaker Change: That changes their views. So I think everyone's just kind of phones on standby trying to say where this how this plays out but.
Speaker Change: Assuming this gets this whole issue with tariffs gets resolved then.
Speaker Change: Texas economy is strong and robust and growing and that should resume in revenue.
Speaker Change: I anticipate that wars and once that happens, but everyone. Like I said, it's the same same boat I mean, we're just trying to.
Speaker Change: Kind of see how this plays itself out, but I think the overall underlying economy is strong and that's really the thing that we can focus all of them are our company standpoint, we really don't bank a lot of multinational companies. Obviously, so a direct impact we've been looking at that we don't see any direct impact from tariffs assuming we stay on this stay almost.
Speaker Change: Track there.
Speaker Change: There were certainly be indirect impacts on overall economy and all of our.
Speaker Change: Customers are but we don't see where we haven't we haven't identified any direct impact at this point.
Speaker Change: Got it and then last for me just touching on the reserve.
Speaker Change: I think you've called out that if we were to get clarity on the economies you would expect some reserve release, but assuming we're in the same position. We are today 60 days from now when would you expect to build reserves just based on.
Speaker Change: Where the Moody's forecast is trending.
Speaker Change: Any color there.
Speaker Change: Yeah, what I wouldn't expect to build reserves I mean, we're still carrying effectively some of the COVID-19 factors and we kept those N.
Speaker Change: Two from two years ago, when we had some bank failures.
Speaker Change: So we would not remove those but continuing those I can say that if things are currently where they stand I mean, it would take.
Speaker Change: Pretty pretty Oh, So you know a large systemic concern for us too.
Speaker Change: Increase our factors are based on kind of where we say the quality of the loan portfolio and again, just the overall economy in Texas.
Speaker Change: Got it.
Speaker Change: If I can add on to that too I mean, we we've kept our qualitative factors at elevated levels, because we wanted to be more conservative and each time, we started thinking about unwinding. Some of those economic factors that we put in based on you know situations in new event would happen. It started with Covid and then it was the bank failures and then there was you know the elect.
Speaker Change: And now these terrorists uncertainties and so we've kind of just left those economic factors at elevated levels throughout instead of unwinding. Unlike some of our peers said, but at some point you know if we start getting some certainty then we'll we'll look at unwinding those a little bit.
Speaker Change: Like I said that we don't anticipate increasing them.
Speaker Change: Got it alright, thanks for taking my question.
Hey.
Speaker Change: Our next question will be from Matt Olney with Stephens.
Speaker Change: Matt can you meet your long.
Speaker Change: Yeah. Thanks, Good morning, guys. Good morning, Matt Good morning, Matt.
Speaker Change: On the loan balances Todd you highlighted the stronger loan pipelines, which is good to see within a one Q loan balance I guess it was a C&I.
Speaker Change: Mix that drove the contractions and any more color on the C&I book, where these companies sales was a lower utilization just any color you can give us on that portfolio.
Speaker Change: It was really lower utilization, we just we saw some pay downs in some of those C&I lines nothing nothing specific it's just.
Speaker Change: And that.
Speaker Change: Very likely reverse itself, but were just for the for the quarter. We saw net pay downs and some of the utilization of labs.
Speaker Change: Okay. Appreciate that and then I guess switching gears on the deposit side.
Speaker Change: We saw some positive deposit growth in the first quarter I think most of your peers are still seeing some deposit contraction first quarter any color on kind of what you saw in <unk> and I. Appreciate any kind of commentary you may have for deposit growth for the full year.
Speaker Change: Yeah, I mean, we continue to view core deposits is really key to franchise value in our company and so that that's a big part of our model and focus on core deposit relationships and we will open 10000 checking accounts. This year like we have every year for several years. So it's just a big.
Speaker Change: Part of our model our focus on core deposits across our footprint in every market, we serve where we're paying kind of mid you know, it's kind of a mid tier on rates, we're not the lowest rate in the markets were not the highest so they're really they're really relationship based deposits and again. It's just you know I would I would anticipate.
Speaker Change: We're probably going to see a 2% to 5% kind of net growth in deposit book for the year because again, it's just a big part of our model to grow core deposit relationships and but do so in a very granular way is as we kind of outlined.
Speaker Change: Okay. Thank you for that tie and then.
Speaker Change: I think on the prepared remarks, I think it was showing dimension.
Speaker Change: Expect some pretty good cash flows on the securities portfolio for the rest of the year because $116 million would just love to hear any kind of kind of preliminary thoughts you have on on what the plan is for those cash flows and what you could do.
Speaker Change: We I mean, our plan is to continue to add to the bond portfolio as it may.
Speaker Change: We see that there's opportunities to add to that and sort of a dollar cost averaging.
Speaker Change: Method as we've done in the last three years, we're setting with about 5% of the balance sheet in the fed funds, so where we have a lot of liquidity available to grow the loan book and or add the bond portfolio, but we're doing so in a systematic way.
Speaker Change: Each month and again, we've been doing that and that's also helped our loan portfolio.
Speaker Change: Our bond portfolio excuse me, our total yield and we have gains in bonds, because we've been able to add the last three years with our with our liquidity there's been some bond market disruptions. The last few weeks is there one knows and we were able to step in and buy some bonds during that period estimate some really.
Speaker Change: Attractive pricing so.
Speaker Change: We're our plan will be to continue to kind of do that each month and and just a systematic way like we've been doing.
Speaker Change: Okay, well balance sheet liquidity looks great. So thanks, taking my questions sure Matt.
Speaker Change: Okay. Our next questions are from Michael Rose with Raymond James.
Speaker Change: Michael can you on mute.
Michael Rose: Hi can you guys hear me, yes, Michael good morning.
Speaker Change: Good morning, Thanks for thanks for taking my questions.
Speaker Change: Just to start on credit you guys have obviously always done a really good job if I look back.
Speaker Change: And history, but the longer. This goes on then there's probably some risk. So what are some areas of the portfolio that you guys are maybe doing a deeper dive on and maybe some lessons learned from from Covid.
Speaker Change: I mean like I mentioned, we're looking at any customers, we have that could have a direct impact to tariffs.
Speaker Change: Manufacturing.
Speaker Change: Our customers, we have and just trying to game out any kind of concerns that they would have I mean at this point I mean, we don't see anything that concerns us.
Speaker Change: Again, I think the granularity of our loan portfolio is a big part of the strength of our of our model.
Speaker Change: We just don't have you know outsized positions and many credits or in R&D or in one particular sector or one particular region of the state and so we are concerned if this stays on this big this negative track for extended periods and the impact that would have on the Nash.
Speaker Change: <unk> economy that ultimately be the Texas economy, and ultimate base markets ramp.
Speaker Change: That's no different in COVID-19 or any other economic event.
Speaker Change: Event that we all face but.
Speaker Change: We're very confident in the strength of our portfolio the strength of our underwriting and the and the quality of our customer base we have.
Speaker Change: Very resilient companies that we do business with some of them, we've done business with multiple decades, they've been through multiple cycles economic cycles, and they're well positioned themselves. So just we don't have you know again a lot of exposure to multinationals that have a direct impact, but certainly would have an indirect <unk>.
Speaker Change: Pak <unk>.
Speaker Change: This is self inflicted economic a bad happened in a way that damage to the economy. Overall, then we would certainly adjust to that based on what we saw in the environment that we're operating in but right now nothing specific but we're certainly we're certainly being prudent and cautious and watch you know watching everything that we can.
Speaker Change: Canada anticipate what may come down the Pike.
Speaker Change: Michael We we also included some.
Speaker Change: It's an additional information in the.
Quarterly highlights of the earnings release, they talked about the granularity of our two largest loan segment CRE and real estate when the window for them, but I can also comment on you know the next couple of down our real estate construction loans, we've got about 650 of those with an average.
Speaker Change: Balance of 357000.
Speaker Change: It's pretty low and then you know not as many interesting that our C&I loans with Scott.
Speaker Change: 1562 C N islands and they have an average balance of 139700. So again you know our loan portfolio. We've got a lot of you know fair.
Speaker Change: Fairly low average balance loans and so you know if we do have those risks that pop up there's not as much damage hopefully.
Speaker Change: I appreciate the color just just switching gears you guys stepped up the buyback a little bit this quarter I think last quarter, you mentioned that you could exhaust the authorization I think you might have about 950000.
Speaker Change: Shares left at the end of the first quarter.
Speaker Change: The program expires in April of 26, so about a year from now.
Speaker Change: Just can you discuss your appetite.
Speaker Change: Thanks.
Speaker Change: You know most banks stocks are down and you guys are one of the few that's actually up year to date.
Speaker Change: Discuss the.
Speaker Change: The ability and the willingness to repurchase shares thanks Bill.
Michael Rose: So Michael Yes, I mean like I mentioned in the fourth quarter I mean, we do consider that to be a good utilization of our excess capital and our balance sheet has not been we've not grown our balance sheet intentionally the last two or three years really so as we're creating excess capital and we say you know we see.
Michael Rose: Opportunities to buy our stock back we just think that's a good utilization of resources, we're not in the market. Currently we were at the beginning of the quarter.
Michael Rose: But we certainly plan, if we see the opportunity to buy our shares back.
Michael Rose: With that that's kind of our capital allocation priority for us and we would continue to be through the plan period.
Michael Rose: Helpful and maybe just last one for me certainly understand and appreciate the comments on expenses this quarter.
Michael Rose: As we've previously talked about a 2.5% expense to average asset ratio is that kind of still what you are targeting and assuming the revenue or the loan growth doesn't come through like we all hope you know how much how much flex is there.
Michael Rose: The downside if the revenue doesn't come through but I mean, Michael Yes, two 5% of average assets has always been probably for 20 years has been kind of our our bogey.
Michael Rose: That creates a nice aro away, you know kind of going through the math, but theres times. When we went above that their size, we've been 2627 or styles within 2324.
Michael Rose: No.
Michael Rose: We're not married to it in the sense that we will make short term decisions and.
Michael Rose: And and making you know versus making long term investments in the <unk> and the growth of the company, but that's our speed limit and we try to stay within that and I always will but their size will fluctuate above or below it.
Michael Rose: With our margin, obviously, where it is and how its building we have some more flexibility there to continue to hit our earnings goals.
Michael Rose: It would be above that a little bit, but you'll never see us materially move above or below that two 5% bogey.
Michael Rose: As I go.
Michael Rose: Alright, Thanks for taking my questions absolutely Michael Thank you.
Michael Rose: Thank you for your questions I would like to remind everyone that the recording of this call will be available by one P. M. Today on our Investor Relations page at G. M. T. One dot com. Thank you for attending in this concludes our call have a good day.