Q1 2025 National Bank Holdings Corp Earnings Call
Speaker Change: You are currently on hold for the National Bank Holdings Corporation's 2025 First Quarter earnings call. At this time, we are assembling today's audience and plan to be under way shortly. We appreciate your patience and please rely on the line.
[music]
Danielle: Good morning everyone and welcome to the National Bank Holdings Corporation 2025 first quarter earnings call. My name is Danielle and I'll be your operator today. At this time all participants are in a listen only mode. As a reminder, this conference is being recorded for replay purposes.
Speaker Change: I will now turn the call over to Emily Gooden, Chief Accounting Officer and Director of Relations.
Emily Gooden: Thank you, Danielle, and good morning. We will begin today's call with prepared remarks followed by a question and answer session. I would like to remind you that this conference call will contain forward-looking statements, including but not limited to statements regarding the company's strategy loans, deposits, capital net interest income, non-interest income, margins allowance taxes, and non-interest expense.
Actual results could differ materially from those discussed today.
Emily Gooden: These forward-looking statements are subject to risks on certainties and other factors, which are disclosed in more detail in the company's most recent filings with the US Securities and Exchange Commission. These statements speak only as of the date of this call, a National Bank Holdings Corporation undertakes no obligation to update or revise these statements.
Speaker Change: It is now my pleasure to turn the call over and introduce National Bank Holdings Corporations, Chairman and CEO , Mr. Tim Laney.
Tim Laney: Thank you, Emily. Good morning, and thank you for joining us as we discuss National Bank Holdings' first quarter results. I'm joined by our president, Aldis Birkans, as well as our chief financial officer, Nicole Van Denabeele.
Tim Laney: We delivered earnings of 63 cents per deluded share during the first quarter which was negatively impacted by a loan that involved suspected fraudulent activity by a borrower
Tim Laney: The matter was discussed and fully addressed, I want to emphasize, fully addressed during the quarter. The charge-off is related to a Colorado-based Del Taco franchise, and the matter is now in the hands of all appropriate authorities.
Tim Laney: We delivered a 1.1% return on tangible assets despite this charge-off.
Clients remain cautious during the quarter as did our company.
Tim Laney: Our business clients are generally reluctant to engage in capital projects or M&A until there's more certainty around the economic environment. Likewise, our current posture can best be described as being in a risk off mode.
Tim Laney: We've seen clients holding on to higher levels of cash which is benefiting our deposit balances.
Tim Laney: Finally, in light of the current environment, we're intensely focused on credit quality, as well as expense control. Two areas, whereas you know, we have a solid track record.
Tim Laney: Nicole, I'll now turn the call over to you for greater detail on the quarter. Thank you, Tim, and good morning.
Nicole: During today's call, I will cover the financial results for the first quarter, as well as touch on our guidance for the rest of 2025, which does not include any future interest rate policy changes by the Fed.
Speaker Change: For the first quarter, we reported net income of $24.2 million or 63 cents of earnings per
Speaker Change: As Tim shared, the first quarter's results were impacted by elevated provision expense resulting from a $9 million charge-off on one credit as a result of suspected fraud by the borrower.
Speaker Change: Even in light of this, the first quarter's return on average changeable assets was a solid 1.1 percent.
Speaker Change: We grew our fully taxable equivalent pre-provision net revenue by 3.4% over the first quarter of last year.
Speaker Change: Like much of the industry, we experienced a slower than expected start to the year, and as the results, our loan balances decreased $105 million.
Speaker Change: The elevated levels of economic uncertainty have resulted in our clients delaying their funding needs while they wait for more clarity.
Speaker Change: We are now operating with a risk-off posture and having said this, our bankers remain committed to growing client relationships and we continue to build our pipelines.
Speaker Change: While we aim to achieve our full-year loan growth guidance of mid-single digits, we acknowledge that geopolitical and economic factors have the potential to affect our growth trajectory.
Foley Taxable Equivalent Net Interest Margin, totaled 3.93%.
Speaker Change: Compared to the first quarter last year, FTE net interest income grew by 3.4%, as a result of our discipline loan and deposit pricing over the last year as the Fed lowered rates.
Speaker Change: First quarter's new loan originations came on at a weighted average yield of 7.3%. As we continue to originate loans, these new loan yields will be accretive to our net interest margin.
Speaker Change: As I mentioned earlier, we do not incorporate future interest rate changes in our projections. With that in mind, for the remainder of 2025, we project fully taxable equivalent net interest margin to be in the mid-39.
Speaker Change: Turning to deposits. Spot-to-posit balances grew $186 million during the quarter and benefited from seasonal tax inflows, including the Camber Platform to Posit.
Speaker Change: Turning to credit qualities, our non-performing loan ratio remains below peer averages and ended the quarter of 45 basis points of total loans, down from both year-end and the same quarter last year.
Speaker Change: Past due loans decreased 25 basis points during the first quarter to 24 basis points of total loans and now said that it's lowest level over the last 12 months.
Speaker Change: We moved quickly to fully charge off this credit during the quarter, and as Tim shared, the fraud is now being investigated by the appropriate authorities.
Speaker Change: The quarters provision expense of $10.2 million was booked primarily to cover this charge off.
Speaker Change: The Allowance to Total Lones ratio into the quarter at 1.2 percent.
Speaker Change: Additionally, we continue to hold $22 million of marks against our acquired loan portfolio, which adds an additional 28 basis points of loan loss coverage if applied across the entire loan portfolio.
Speaker Change: In regards to our CSO modeling approach, our modeling weight to downside scenario in addition to the Moody's baseline scenario.
Speaker Change: The forecast underlying the economic scenarios remained largely unchanged during the first quarter of 2025.
Speaker Change: Total non-interest income for the first quarter was $15.4 million, mortgage banking income increased $1 million over the linked quarter.
Speaker Change: Service charges and bank card fees were seasonably lower during the first quarter. SBA gain on sale and swap C income are highly correlated to loan production and as the results were slower during the first quarter.
Speaker Change: For 2025, we continue to project our total non-interest income to be in the range of $72 to $77 million.
Speaker Change: We remain committed to discipline expense management in all environments. Non-interest expense for the first quarter was well-managed and totaled $62 million. This included the benefit of $2 million of payroll tax credits realized during the first quarter.
Speaker Change: Our Q Unified Development remains on track, and we are preparing to provide revenue guidance with the 2025 year-end results.
Speaker Change: Two unified expenses totaled $3.4 million for the first quarter and are expected to meet our full-year guidance for 2025.
Speaker Change: We have previously demonstrated our ability to manage expenses in tough environments. As such, looking ahead to the remainder of 2025, we are confident that we will deliver total expenses at the low end of our previously guided range of $272 to $278 million.
Speaker Change: We maintain strong levels of liquidity and continue to grow our excess capital. We ended the quarter with a strong TCE ratio of 10.1 percent, Tier 1 leverage ratio of 10.9 percent, and a common equity Tier 1 ratio of 13.6 percent.
Speaker Change: Tangible book value per share grew 2.6% in the first quarter to $25.94. With that, I will turn the call over to Aldis. All right. Well, thank you, Nicole, and good morning. I will briefly cover the balance sheet trends and give an update on the business environment.
Aldis Birkans: As Nicole has shared, we had a slower start of the year than expected. The first quarter's loan funding stalled over $256 million, with an average fund of debate of 7.3%.
Speaker Change: Increased levels of volatility due to concerns about inflation, higher interest rates, supply and change stress and tariffs cause the large number of businesses to pause their activity.
Speaker Change: Small businesses in our markets have become more cautious in their plans for capex investments and M&A. Having said that, we still have an upside in our geographies to take market share and improve our pipeline to pull through, and we aim to achieve our full year loan growth guidance.
Speaker Change: On the credit front, of course, we had disappointed by the large charge-off that impacted this quarter as a result.
Speaker Change: Tim has covered that in as much detail as we can at this time. However, looking at the rest of the loan portfolio, we see improving trends with NPAs down 7 basis points from a year ago in one basis point on the link quarter basis.
Speaker Change: 90 days past due loans are down to just a one basis point from 19 last quarter.
Speaker Change: On the deposit side of the balance sheet, our relationship-based banking model continues to pay dividends. Our deposit balance is grew by $186 million during the quarter, and in the process we lowered our cost of deposits by another nine faces points.
Speaker Change: Some of the link order growth was generated by tax seasonality that occurred later in the quarter. In light of the loan pipelines, we continued to see productive banker engagement, which is the resulting in client deposit balance growth.
Lastly, let me touch on the expenses [inaudible]
Speaker Change: As a long-term shareholders know, historically we've had a strong track record of improving our operating leverage through both revenue growth and intense focus on our expense management. We have accomplished that by finding efficiencies through investments in technology and improving process flows.
Speaker Change: Given the current uncertain macroeconomic environment, we have already paved the path to delivering our total expenses at the low end of our full year guidance.
Aldis Birkans: 10th of that, I'll turn it back to you. Thanks, Aldis. We believe we build a fortress balance sheet and we're well positioned to navigate volatile markets.
Aldis Birkans: We also benefit from operating in attractive geographic markets and I commit to you that our teams remain focused on building deep relationships with our clients.
Aldis Birkans: while also taking very targeted market share. And on that note, Danielle, I'll ask you to open up the line for questions.
Danielle: Thank you. If you'd like to ask a question, please signal by pressing star 1 on your telephone keypad. If you're using a speaker phone, please make sure your mute function is turned off till allow your signal to reach our equipment. Again, that's press star 1 to ask a question.
Speaker Change: And we'll take our first question from the line of Jeff Rulis with DA Davison. Please go ahead.
Thanks. Good morning.
Great job, and good morning.
Speaker Change: Question on the fraud item. I know that, Tim, you said you shared what you could. I guess as that goes into the investigation stage, you know, is there a...
Any comment on explication for recoveries at this point?
Speaker Change: Yeah, look, it's a question I would love to answer, but at this point as we said, we've turned it over to appropriate authorities and are not in a position to comment on the matter any further.
Speaker Change: But I mean, what you could say is that it's a non-systemic kind of a one-off, not related to other low-non-systems. Yes, it's one centered in one client. There are no systemic issues here. Thank you. Yeah, I'm glad, I'll be very glad to clarify that point.
Not yet.
Speaker Change: and I guess as it relates to maybe moving to the margin, was there...
Speaker Change: You know, they're reported, I guess, 393. Was that impacted at all with, I mean, I don't know if that's just removed from earning assets or was there interest loss that impacted? I got your guide of the mid-390 from here.
Speaker Change: which suggests a little higher, but I guess just checking on that piece was that impact the margin at all in the quarter.
Speaker Change: It did slightly. I'd say I've most took two basis points because obviously it kind of surprised us in the first quarter and there's some interest accrual that had to be reversed along the way so that, and I'd say that's about two basis points of margin impact.
Speaker Change: Gotcha. And I'll say the other components and margins that we did.
Speaker Change: to do the investment security purchases at the minimum. We reinvested this stuff to be sold late last year in order to keep below $10 billion in balance sheet. And given that we didn't grow loans as much as we expected, that certainly had an asset yield mix impact as well on margin calculation.
Okay.
Thank you.
to this client, or former client.
Got it, Tom.
Thanks, and maybe the last one, just on...
Speaker Change: On the charge-offs, I think you said, of the net charge-offs, 9 million was associated with this loan, but actually, I mean, you had another lump of charge-offs in there. Where did the rest of the charge-offs come from, from a sector standpoint?
Speaker Change: Yeah, it was, there was nothing specific as Tim mentioned back to his remarks. There was nothing called systemic or industry specific. He was several others to be charged off and most of them are actually reserved for us to do our CSO.
Speaker Change: allowance model and so therefore the provision expense didn't reflect that component.
Okay, got it, I guess.
Speaker Change: based on your other comments about broad based credit, pretty solid. So your expectations ahead for charge-up activity would expect to revert towards more historical levels. Is that fair to say? Absolutely, yes.
Yep.
Speaker Change: And again, if you look at the spread of trends, NPAs down, NPLs down, dependencies down, we find ourselves in improving credit environment from already, I would say, better than call it industry averages on NPAs at least.
Okay, thanks, I'll step back [inaudible]
Thank you, Jeff.
Speaker Change: We'll take our next question from the line of Kelly Motta with KBW. Please go ahead, your line is not open.
Speaker Change: Hey, good morning, guys. This is Charlie on for Kelly. Thanks for the question. Maybe from a macro perspective, how are you guys thinking about your tariff exposure? Have you run any analysis? They're trying to size up direct exposure, and just how are you thinking about the portfolio from that perspective? Thank you.
[inaudible]
Speaker Change: clients working to assess potential impact in their businesses. It's too early for us to make a macro call, quite frankly, just given the movement around what potential tariffs might be where they might land makes that difficult at this point in time.
Speaker Change: Our clients, I think, thoughtfully holding back on capital investments and, for example,
Speaker Change: and yet, you know, the good news is we're still seeing, they're still seeing...
Speaker Change: Demand, so revenues are there and we think that that's going to translate into the need to return to borrowing.
Speaker Change: So sorry, I can't give you a better answer on macro tariff in fact at this point, but I think if anyone can I'd love to hear from them.
No, thank you.
Speaker Change: And yeah, it seems like pipelines are still holding in, and I know you reiterated the mid-single digit loan growth for the year, but what could cause you to maybe miss or beat that from here, just like some detailer color that would be great.
Speaker Change: Well, again, I think what we like is we're the markets we operate continuously, our perform national averages, so we feel like we have a bit of a sale in our lens from that perspective. It is a step.
Speaker Change: The uncertainty what Tim is mentioning is maybe the component that will continue to, will watch very carefully and our clients are watching, or prospects are watching carefully. To that point, really, if you look at page nine of the earnings release, and look at the
Speaker Change: or Asset Class. It wasn't, again, it wasn't a specific group or geography where slowdown occurred. The slowdown occurred across the whole book if you look at it on that table. Virtually every Asset Class for us was down.
Speaker Change: That's great, thank you. And then maybe one more for me, just order your thoughts on capital here, you guys are at healthy levels and historically, repurchase shares pretty consistently. And with the volatility and prices at these levels, just like, how are you viewing the buy-back on forward? Thanks.
Speaker Change: We are giving, as you might imagine, buy back more attention than we have in some time and I'll leave it at that.
Okay, thank you guys, I'll stop there Bye.
Thank you, Charlie [inaudible]
Speaker Change: We'll take our next question from the line of Andrew Terrell, the Stevens. Please go ahead, your line is open.
Thank you. Good morning.
Good morning.
Speaker Change: Hey, I just wanted to maybe starting back on the growth, you know, I mean outside of the fraud issue, this quarter.
Speaker Change: Credit seems pretty good and you obviously highlight some of the reductions in MPAs and everything and that the four kind of commentary around credit sounded.
Speaker Change: Sounded good and I also have you guys generally is relatively risk off but you know I picked up on the comment and I think it was Nicole your prepared remarks around
Speaker Change: You know, operating in more of a risk-off posture right now, I'm just trying to, you know, juxtapose those two points and specifically, you know, one understand maybe a little more of what operating in a risk-off posture means.
Yeah, I'll take that.
Speaker Change: We do believe we operate with a generally conservative, conservative posture on credit and...
You know, we tend to adjust that posture based on...
Speaker Change: Downside Impact on the Economy. We do tend to add additional levels of rigor, not only around underwriting of new clients, we...
Speaker Change: in an environment like this. We think it's incredibly important to be almost excessively thoughtful in the way we bring new clients into the bank in this environment.
Speaker Change: and it's our responsibility to be closer than ever to our existing clients as we help them deal with these uncertainties. So those would be examples of where...
Speaker Change: We think we're being accountable and appropriately adding more risk controls in our credit under running process.
Speaker Change: That's very helpful. I appreciate it. If I could just ask on the expenses, I mean obviously you guys are tracking very well relative to the guide. Do you have a dollar amount just of the payroll tax credit this quarter or just trying to get a sense of what would be kind of clean operating expense?
Speaker Change: Yes, good morning Andrew. The dollar amount for the payroll tax credits that we realized in the first quarter was $2 million.
Got it. Okay.
Speaker Change: Perfect, and then back on just some of the capital discussion, it sounds like maybe some interested in buyback from here, but Tim is open, you could talk about M&A in this environment, I'd imagine it's
Speaker Change: You know, maybe a bit challenging to get a deal together, but, you know, can you just compare contrast interest to an M&A role to the buyback?
Well, but you know...
Candidly, as we sit here this morning,
Speaker Change: The best acquisition I could make would be of our own shares.
Speaker Change: So, that tells you a little bit about where our heads are at in terms of priorities.
Speaker Change: Market Acquisitions, I would tell you that it has been a difficult market, I think.
Speaker Change: You know, I understand that. And of course, we can't announce a fraud hit like we took.
Speaker Change: You know, I'll add on that my focus is on delivering our all-in targeted income growth for the year.
Speaker Change: Exceeding the low end, you know, we're doing better than the low end on expenses that we've guided. We will do that. We will, our commitment is to do everything we can to get to our bottom line profitability guidance.
And again, we continue to believe that
that optionality is incredibly critical in this business.
Speaker Change: I'll also say we've built in capital while also investing, continuing to invest in to unify and no one has asked, but we are still pleased to report that we expect to launch here at the end of this quarter.
Speaker Change: We're really excited about the future of two-unify and again we're doing all of that within the kind of operating guidance that we provided at the onset of the year.
Speaker Change: Great. Thank you very much for all the color there, Tom. I'll step back. Thanks. Yeah, thanks for the questions.
Speaker Change: We'll take our next question from the Adline of Andrew Liesch with Piper Sandler. Please go ahead, your line is open.
Speaker Change: Thanks. Good morning, everyone. You know, just some tall up sun expenses in the fee income guide. So, back in, or adding back in that, the payroll tax benefit. I mean, you're tracking well below that, those low into that range. I guess where should we see?
Speaker Change: Expenses increase over the course of this year. Is it more investments to unify? Is it more on the competition cost? Where should we see expenses from here on out?
Yes, good morning, Andrew.
Speaker Change: Good question. I will point out once we adjust for that $2 million payroll tax benefit for this quarter. This quarter's expenses are very much in line with where we were a year ago. So to your point, we continue to do a very good job of
Speaker Change: managing our expenses and being very disciplined with our expense run rate. Part of what you will see increased throughout the year is our investment into Unify. So that has a few different components.
Speaker Change: We also continue to invest in developers to support that build out and then as we go live we will be spending with marketing related to Unify. So that is some of the ramp up that we're projecting for the remainder of the year.
But you are correct, though. We are coming in.
at or below that low end of where we guided.
Speaker Change: Got it. Okay, so right now, maybe for the second quarter a little bit higher than the first and then step a step up in the third quarter once the fight goes live. Is that the right way to think about it?
Yes it is.
Speaker Change: Got it. Okay. Thank you. And then on the non-interest income side.
Speaker Change: There are some more questions there in the first quarter of tracking below the end of the range or where should we see?
Speaker Change: V income ramp up. Is it from the slot fees or SBA loan sale gains? If that's driven by loan production, can that get you your target?
Speaker Change: You got it, so that's probably the most obvious one if you look at the other non-interesting income line item that's unusually low for us this quarter.
Speaker Change: and I'd say rounded about a couple million dollars there, between at least those two line items that we just again given this lower loan production did not materialize as much on SBA and swaps, but we do expect to put that line on to recover.
Speaker Change: and then I actually see Aldis Birkans in four service charges was lower in your score as we have to them.
Speaker Change: Right, right, okay, thank you for the clarity, I'll step back.
All right, thank you.
Speaker Change: We'll take our next question from the line of Brett Rebatten with Host Group. Please go ahead, your line is not open.
Hey, good morning everyone.
Speaker Change: One thing to start off, Tim, the last time we talked, you were indicating that the market had gotten a lot more competitive from a pricing perspective. And I think you mentioned a 7.3% origination rate during the quarter. Just wanted to see how that's trended in terms of what you're seeing competitively.
Speaker Change: and then how that might factor into growth this year, if pricing is too competitive, you just
Speaker Change: You just sit, or do you get more competitive with the competition to drive some long roads?
No.. I.. uh..
Speaker Change: And I believe what I've covered was we were seeing some pressures on both pricing and credit structure and back to some comments around
Speaker Change: Our risk off position in the first quarter, we are not going to follow those trends down market. I simply would rather sit on the sidelines, which I don't think we have to do all together with targeted marketing, but we have seen some competitors.
Speaker Change: not be interested in as it relates more specifically to your question on pricing bread.
Speaker Change: You know, we feel very good about the depth of the relationships we have with existing clients.
Speaker Change: They value the relationships, the all-in relationships, and we think we're able to...
Speaker Change: Protect, Maintain, Solid Pricing, as I think, certainly all of the analysts on the call know, for years we've operated with a relationship profitability.
Speaker Change: Model that values every element of what a client does with our bank, think of it as an income statement for every client.
Speaker Change: We're looking at the return on capital from that client and we're looking at the bottom line net contribution of that client. It does give our bank or some flexibility to deal with to address
Speaker Change: Long Pricing that the clients, for example, keeping enough other balances or enough other services, because ultimately we're interested in the all-in return.
Thank you.
I'll throw this to Aldis for maybe a...
or a more direct view. But from my perspective,
Speaker Change: Pricing isn't proving to be the real challenge. I would just say we have to be very cautious with where we see some of the market going on credit structure. Yeah, and I think Tim covered it really well in the night.
Back to you.
Speaker Change: The proof of that is 7.3% and in the first quarter in long-range nations, we feel very good about that. It's very accretive to our margin and the rest of the long-boat that is really it.
Speaker Change: 6.4%. So pricing really is back in the relationship bases is something that we can and know how to adjust for. Credit on the other hand, we will not yield on.
Okay.
Speaker Change: That's great color. And then on the deposit side, you know, I noticed average balances were kind of flottish, but the end of period savings and money market was up quarter over quarter, quite a bit and just wanted to see if if
Speaker Change: I think those deposits, I know you mentioned, your customers were being more conservative, you know, if that was excess liquidity, or you think that's core growth, you know, if there's any thoughts on those balances and deposits from here.
Speaker Change: Yeah, so there's a couple of things to go through that. One is that some dimension is a little bit of excess liquidity of the clients that did not necessarily deploy it in their business growth.
Speaker Change: We also saw a little bit of a tax seasonality that's primarily in a camber flows that helped the spot balances later in the quarter. So those are somewhat sticking around for a period of time as those monies are spent. So, again.
Speaker Change: We've entered the quarter 90 years along the positive ratio, we'd like that, see a lot of side in engagement back to the relationship.
Speaker Change: Approach to be taken with every client, the view in demand, operating accounts from all of our relationships, so therefore we feel like we can grow the deposit balances along the line with a long growth.
Speaker Change: Okay, and then maybe just last one for me, the securities purchases during the quarter just curious what you thought and if you might buy more in any thoughts on that portfolio and yield from here.
Speaker Change: Yes, so we did redeploy all of the cash from our investment security sale that we did in the fourth quarter.
In January , we purchased 240 million 200 million.
Speaker Change: of investment securities, high quality investment securities, short duration, very consistent with what we historically have held in our book.
Speaker Change: We purchased those right around a 5% yield which improved our net interest income because what we sold was about a 2.65%.
Aldis Birkans: Aldis, anything you would add? No, I think the guidance on that was that we will maintain cash on the MSN portfolio, both at about 15% of the toll assets and be able to deliver that this year.
Speaker Change: As a reminder, investment portfolio is liquidity portfolio.
It's highly liquid, short duration.
Speaker Change: Conservative investments, and we don't view that as a store of Deploying Capital, for example. So we've measured just enough amount of money that we need for the equity purposes to be stored on balance sheet, and that's how we came up with that 15th-ish percent guide.
Okay, great. Appreciate all the color.
Speaker Change: We'll take our next questions on the line of Jeff Rulis with DA Data Send, please go ahead.
Speaker Change: Thanks. Sorry, I tried to get out of the queue and couldn't pull it off, but I guess one of the questions it was, Nicole answered it with the expense side, that just to clarify, to get to that low end of the guidance, you'd probably have to average close to 70 million non-interest expense the rest of the year, and I guess that's coming from...
the back out, the payroll benefit as well as
Speaker Change: I step up in to Unify, and I guess he get to that low end. Maybe just one question I have is is checking back up to to Unify? I have to compliment you, your math is always very good.
Speaker Change: I appreciate it, Tim. Sir, are all sitting here smiling and going, yes, nodding our head. All right, well.
That's rare. Let's see, just on the two unified front.
Speaker Change: I think it mentioned the revenue, contribution, reveal, I guess, was that end of the year or within January with the Q4 results.
Speaker Change: Yes, consistent. Yeah, to clarify, it will be released with fourth quarter results and guidance for next year.
Speaker Change: Okay, great. Our expectation in fact is to begin to build toward a multi-year outlook for to unify.
That's great. Thanks. Appreciate it. You bet. You bet.
Speaker Change: Thank you, and that is all the time we have for questions. I will now turn the call back to Mr. Lini for his closing remarks.
Tim Laney: Hit that we took in the quarter. We do not in any way believe it's a systemic issue. Again, we've turned it over to appropriate authorities and believe it will be addressed appropriately. What we're focused on is taking care of our clients, taking care of our teammates and growing this company. So again, thank you for your questions. This morning, have a good day.
[inaudible]
Tim Laney: And this concludes today's call. If you would like to listen to the telephone replay of this call it will be available in approximately 24 hours and the link will be on the company's website on the investor relations page. Thank you very much and have a great day. You may now disconnect.
[music]