BankFinancial Corp (BFIN) 2022 Q4 法說會逐字稿

Good day, and thank you for standing by. Welcome to the BankFinancial Corporation Q4 and 2022 year-end earnings conference call. (Operator Instructions)

Please be advised that today's conference call is being recorded. I would like to turn the call over now to Mr. Gasior, CEO. Please go ahead.

Good morning, and welcome to the BankFinancial Fourth Quarter '22 Investor Conference Call. Sorry for the delay. At this time, we would like to have our forward-looking statement read.

The remarks made at this conference may include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. We intend all forward-looking statements to be covered by the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of invoking these safe harbor provisions.

Forward-looking statements include involve significant risks and uncertainties and are based on assumptions that may or may not occur. They are often identifiable by the use of words believe, expect, intend, anticipate, estimate, project, plan or similar expressions. Our ability to predict results or the actual effect of our plans and strategies is inherently uncertain, and actual results may differ from those predicted. For further details on the risks and uncertainties that could impact our financial condition and results of operation, please consult the forward-looking statements declarations and risk factors we have included in our reports to the SEC. These risks and uncertainties should be considered in evaluating forward-looking statements. We do not undertake any obligation to update any forward-looking statement in the future. And now I'll turn the call over to Chairman and CEO, Mr. F. Morgan Gasior.

Thank you. Our earnings release was completed last week, Friday. The 10-K will be filed on schedule, and we are now ready for questions.

(Operator Instructions)

Moderator, we're not getting a question.

(Operator Instructions)

Manuel Navas of Davidson. So I guess my question was about loan growth for next year. You had a really strong end of the year. Multifamily was quite strong. Equipment finance kind of as expected. What are your kind of expectations for next year? You've talked about 10% last quarter. Any extra color there would be great.

Well, thank you for the question. We actually hit a good fourth quarter even though the fundings were delayed kind of in the last part of the quarter as the gap between the year-end numbers and the average outstanding for the fourth quarter shown. But we had a good growth -- we had a good growth for the entire year, year-over-year. So we were pleased with that. As far as '23 is concerned, we're operating in somewhat of an unusual environment in an inverted yield curve. Federal Reserve policy, obviously, is going to dictate a lot.

And we've noticed that the middle part of the curve, the 3- to 5-year part of the curve has actually been dropping in the last several weeks, which makes the planning even a little more interesting. But generally speaking, for '23, our focus is going to be between 5% to 10% loan growth. We'd like to see the higher end of the range at the 10% level. But the strength of that will come, again, primarily through equipment finance and then C&I in our Commercial Finance areas.

That's the -- those are the areas that we're going to spend the most time and focus on. And given relative returns from various asset classes, the Equipment Finance side and the Commercial Finance side make the most sense. So most of the marketing attention, expansion attention will be in the Equipment Finance side and the Commercial Finance side. So if multifamily and commercial real estate were $5 million to $10 million growth, Equipment Finance was somewhere between $30 million to $50 million for the year.

And then C&I was [30] on the low side to $75 million on the high side that gets you a range of up to 10% at the end of the year. In terms of Commercial Finance, the strongest part of the portfolio will be the Healthcare portfolio. We had a very good pipeline of new opportunities going into '23, some of which have already started to fund. And we saw greater utilization in the Healthcare portfolio, particularly in fourth quarter continuing on now into the first quarter. And it has 2 dimensions. Our customers are using their excess liquidity. So you're seeing the commercial demand deposits decline, which is something that we felt would happen a year ago and it started and it's continuing. But that also means that their line utilization will improve.

So that's where we see the bulk of the growth in C&I based on what we have right now. But we also see opportunities in Commercial Finance, Government Finance, Lessor Finance, and even in the Chicago Community Finance area, and that will make up the bulk. But Healthcare will probably be about half of the growth from what we see right now. The other categories will be the other half based on their own individual category opportunities.

Is that kind of half the growth for the year or half of Commercial Finance, just clarifying.

Say that question again, please?

Is that half of the growth for the year in Healthcare? Or is that half the growth in Commercial Finance alone?

Half the growth in Commercial Finance. So roughly about $30 million to $35 million to $40 million, $30 million to $40 million would be Healthcare and the rest of it would be in the other Commercial Finance categories. So about (inaudible) of the total is health care, half of it within commercial finance.

Okay. Got it. And the thought process on multifamily or CRE being less of a focus just kind of rate driven. Are you already seeing slower demand there? You did have a great end of the quarter in multifamily.

Yes. A couple of things. One is we're pricing -- we're reallocating cash flows. So right now, from a profitability perspective and an asset liability perspective, continuing to maintain a bit shorter duration and also picking up some improvement in yield, seems important to continue the improvement in profitability. So we're really looking at doing is allocating cash flows for the year. And again, the equipment finance side and the commercial finance side give us the most flexibility from an asset liability perspective. Just for example, in '23, we will have over $600 million in assets repricing, the bulk -- the greater portion of it in the second half.

So what we're really doing is reallocating assets and cash flows. For example, the multifamily portfolio is expected to have significantly reduced prepayment rates, in part because of market conditions and in part because of where rates are right now. So we'll see less cash flow coming off that portfolio to reinvest. Equipment Finance, we'll probably have close to $200 million coming off of the portfolio. We expect we'll be able to reinvest that back into equipment finance, take some of the excess cash flows we might have from securities or multifamily, put it into Equipment Finance. And then in Commercial Finance, as we mentioned last quarter, we'll have about $60 million coming off of the securities portfolio this year at an average of 2.66%. Our goal is to put that into Commercial Finance at an average of about 9.66%. So pretty strong contribution to growth there, and that's why it's our priority.

So with that kind of repricing and improved asset yields performance, what are your kind of thoughts on the NIM going forward. At the same time, you're having a little bit of increase in deposit costs. But just kind of what are your thoughts on the NIM outlook?

Well, we would expect net interest margin to stay relatively stable in the first half. I want to caution all these observations with the uncertainties of deposit repricing. So far, we're able to maintain a good funding base with the pricing we have so far. But we have to watch what market reactions are as more customers seek higher yields. We'll also see communications from the Federal Reserve on their expectations for rates during the year. And then those have -- that does drive some of our deposit customer perceptions on what they should be seeking for rates.

So our big wildfires this year is going to be deposit interest expense. So in the first half, we expect net interest margin to stay relatively stable. In the second half when we have more cash flows repricing, we have an opportunity to expand the net interest margin, especially as we get better deployment in higher yields in Equipment Finance and especially in Commercial Finance. The securities reprice in the second half of the year, if we time the deployment of those cash flows into Commercial Finance at that time, then you see a strong opportunity for net interest margin expansion in the second half.

I appreciate that. Switching over to expenses. It did a little better this quarter than I would have thought. And then you had a branch savings planned for, I believe, next year. What's kind of a good expense run rate in 2023?

We're comfortable with the expense. If you look at where we're at now, we'd say expenses generally will run between just under $40 million, say, $39.5 million to just over. So framed right around $40 million. To the extent we see savings from the branch operations, we want to plow that back into marketing, especially for the Commercial Finance and some commercial deposit assets and liabilities. The branches are now closed. The 2 branches that issue, we had a contract on the sale of one of the branches that fell through just a couple of weeks ago.

There is still some interest in it. So we have reopened up the process. And we are actually starting to negotiate an acquisition of the second branch, the larger facility. And we're told that, that buyer has a 90- to 120-day process that they're working through. So it's conceivable that we could have both buildings sold and closed by the end of second quarter. The estimated cost saves from both those branches are roughly $800,000. So we would see an improvement in expenses of about $400,000 for the second half. We do think there's going to be some disposition costs on that based on where the contracts settled in. I don't think it will be material to the financial statements, but it could cost us a couple of cents a share in whatever period we report this most likely here in the first quarter since that's when we've closed the facilities.

So we could see a little bit of impact on the first quarter. And then once the facilities are actually sold and closed is the bulk of the benefit after that. One of the facilities, for example, has an annual tax bill of approaching $300,000. So the sooner it's gone, the better we are. But that's the key to achieving the cost saves to disposition of the facilities.

That increased marketing spend kind of depending on where the economy is. Is that an area where it could shift if the second half of the year is a little bit weaker? Like, how are you thinking about the back half of the year and possible places you can shift if the environment changes?

Well, I would say that the Commercial Finance side is something that we need to allocate marketing expenses to and that needs to be a relatively consistent process. So I would say once we commit to a plan in that, we're going to see it through and see how effective the marketing is. The product capabilities we have in Commercial Finance and Government Finance, even in Lessor Finance, are very strong within the market, in some ways, unique. So we need to make sure the word gets out. And so that is a fundamental level of expense that we're not likely to change very much.

On the deposit side, to your point, if we are well-funded for our objectives and especially if our commercial marketing, deposit marketing is effective, that does 2 things. One, it might bring down the overall marginal cost of funds a bit. And two, we can meter the expenditures a little bit based on how the marketing is effective. So right now, I would say the marketing is a fluid number. We know we're going to spend more on it, but it's hard to predict it. And so we measure the effectiveness of what we're going to try to do.

And some of what we're going to try to do is relatively new to us. What we're seeing on commercial deposit marketing has been something that's done within the loan -- the credit areas. Now we're going to make that a central focus within the organization. Branch-level treasury services are both going to contribute to those business plans and see if we can improve our total percentage of commercial to total deposits as best we can. So it's hard to predict those numbers. But once we get into it, we'll have a better sense of what works and doesn't work.

Got it. Got it. I guess my last question before I step back into the queue. Just updated thoughts on your buyback. I know that you're a little bit concerned about the tax this year, but you did get some shares bought here in the fourth quarter. Just kind of thoughts on that going forward.

We put -- the Board approved an increase to the share repurchase plan last week. And I would say that given that the lower level of volume we've seen in the fourth quarter, we were able to do some volume. But I would say that it will probably slow down a little bit. I would probably use 50,000 a quarter as a baseline. It could be higher. I doubt it would be much lower. And so at that point, you'd end up the year roughly around [12.5 million] shares, plus or minus. So I would use a little bit lower baseline than we have historically. Hopefully, we trade up a little bit in share price, and it's a little bit less accretive. But still, I think 50,000 a quarter is a good baseline. If it's better, then it's better. But I think that's a reasonable place to start a minimum estimate.

(Operator Instructions) Next question is coming from Brian Martin of Janney.

Morgan, can you maybe just talk a little bit about or I guess, the thought on just how you fund the loan growth this year, just kind of the size of the balance. I know that the cash balance is obviously down pretty substantially, but you also talked about $600 million. It sounds like it's repricing over the next 12 months. So just kind of in connection with maybe if you look at the 10% loan growth, you're talking about $120 million at the higher end. So just kind of just trying to understand how you're thinking about funding it and just the balance sheet along with some of the deposit contraction you saw this quarter.

Yes. I think the simplest thing is, if you look at it, we'll take $60 million out of the securities portfolio to fund the loan growth, and we'll need $60 million of new funding plus or minus. And the new funding probably in the shorter run would be done through retail CDs and money markets, but especially retail CDs of the customers that we're working with seem to want to go in that direction right now, and that seems to be working for us. And then as the year goes on, as I said earlier, we're going to try and focus some attention on commercial deposit marketing, whether it's new commercial deposit DDAs from new customers, commercial MMDAs and then some commercial CDs, we don't have that much of it, but commercial would be the next component.

So let's assume, for example, that we're able to take that $60 million of new funding requirement and do half in commercial and half in retail, that would be a good result for us because it will commit in a lower cost of funds than the retail side would. And it would also mean we're growing our core banking franchise and our core commercial finance or commercial deposit franchise in a meaningful way.

Got you. Okay. And as far as the contraction -- a little bit of contraction in deposits and just kind of how you see that playing out with kind of managing the loan-to-deposit ratio. What do you see -- do you see more contraction potentially on the given where rates are in some of the deposit mix? Or is that -- do you feel like it's stabilizing here and...

Well, of course, that's the big question. I would expect to see some more contraction if just based on the fact that the economy has seen some inflationary components that have drained liquidity, especially on the retail side, and you see customers looking for higher yields. We've been able to play pretty good defense, but there's not 100% retention there. So we do expect to see some further declines in the commercial deposits. As I said earlier, customers are going to use their liquidity before they start borrowing against their [lives]. And obviously, there are certain minimum liquidity requirements they have to maintain.

But again, their choice is simple if they have cash available, they're going to use it first and then they'll draw next. And as that cash diminishes just through operating expenses, you'll see greater impact on line utilization. But first, the cash is going to run off. It's also the case that in '22, we have 1 large depositor that did a capital markets transaction at the end of '21, dropped $25 million of DDA on us and then consumed about $20 million of it during the course of the year. That, we do not expect to repeat.

So I would say a slowdown in commercial deposits is more likely given that large depositor delta. But still the retail side, I would say some runoff is still possible, especially since we'll see just a little bit greater inflation coming through the economy, real estate taxes that our customers have to pay, the timing of that is different than it used to be here in the Chicago market. So we're bracing for a little bit of additional runoff during the course of '23. And that's why we're planning ahead with some replacement in retail CDs, and we're going to try to focus as much as we can on commercial deposit growth and build a stable growth franchise there.

Got you. No, that's helpful. And so maybe not much change net-net to the loan-to-deposit ratio, I think it's around 90% today or in that area is that -- how you're...

Yes, I think that's about right. And if we feel that we need to bring that ratio down a little bit, then we obviously have the cash flows to do that. But I think if we can maintain it in that 90%, 92% range, get the mix that we want on both the loan side and the deposit side, it speaks to a stable environment for the first half of the year and an expanding environment in the second half of the year.

Got you. And just you said earlier, maybe just your comments about the bulk of the growth sounds like it's both kind of the Equipment Finance and the Commercial Finance. Just the yields you're seeing in those buckets today, can you just remind us. I think you said it was not -- one was over 9.5%, maybe this Commercial, but on the Equipment Finance side, just kind of what you expect to be -- just trying to understand the pickup you're thinking about getting here.

Well, again, it gets a little variable and somewhat volatile. But right off the bat in Equipment Finance, if you think about a moderate duration of around 3 to 5 years, say, 4 years at an average, then the swap rates there can go anywhere between 3, 3.5 to 4. So say, [3.75] is a reasonable number. Then we're looking at around 250 to 300 depending on the asset class, whether it's corporate other middle market or small ticket. So high 6s seem reasonable there. We -- 6 is kind of a [floor] for us right now, given where we think funding costs could go and profitability targets. But the swap rate plus 250 is a reasonable proxy. It might go a little higher depending on the mix, but we're trying not to lock ourselves into relatively low-yielding assets at this moment given the uncertainty of where things might go.

Okay. And then on the commercial finance side, I think the...

We're looking at anywhere between [prime plus a half] on the low side, which gets you -- if there's a modest bump here in the Fed funds rate and the prime rate here in the first quarter, that's 8.25 on the low side. And then you can see prime plus 2 on the high side. So if you again weighted average that, depending on the mix in the portfolio, you can get yourself in the mid-9s, which is kind of where we're trying to target it.

Got you. Okay. And -- okay. And then just on the -- I guess, just jumping -- you said the pipeline today in general are -- I guess, it sounds like you kind of outlined where you're targeting your growth, but just the pipeline in general support, I guess, kind of the -- you're kind of talking about here today that seems fair.

Yes. I think the pipelines in Healthcare are the strongest. There's quite a bit of activity out there now, plus we have the opportunity for greater line utilization, right? So let's assume we're trying to grow that portfolio by $40 million, $20 million of it is quite foreseeable based on greater line utilization. But we think we probably will do better than that with growth and commitments. The next area to focus on is Commercial Finance and Government Finance. Those pipelines are relatively thin right now. That's where the marketing has got to come from.

Lessor Finance, there's some opportunities there. That one is the hardest to predict growth because it tends to have line utilization during the quarter, but period end, they usually discount the transactions from the lines, and you don't see much quarter-over-quarter growth in that portfolio. Then Community Finance, the business finance side, we've got some new product development that's just rolling out right now. That's intended for our small business customers who are also seeing some liquidity consumption.

They'll probably need some credit support during the course of the year. No more PPP, no more ERTC, no more EIDL. So we'll see some modest growth there. But Healthcare, we feel the strongest about. The others are really going to be a function of marketing and growth. So that's why we've kind of underweighted those until we can prove up the efficacy of the marketing.

Got you. Okay. And just maybe one on the payments or the payoffs this quarter. I guess you've kind of talked about maybe the payoffs coming down a bit or at least in one area, there was one you mentioned. But just in general, kind of should we expect -- or I guess, are you expecting the payoffs in '23 to be a bit lower than what they were in '22? Or just trying to gauge kind of the trend. I mean, the trend in the last 2 quarters has been definitely lower. So just trying to understand if that's kind of a trend you expect to continue? It sounds like it is.

Well, certainly in the real estate portfolio, we would expect lower prepays compared to '22. And that's in two dimensions. One, the rate environment right now doesn't really lend itself to a significant amount of refinances from our portfolio; two, the multifamily markets in a bit of transition with higher debt service requirements on new purchases, maybe somewhat higher cap rates, maybe somewhat lower analyzed. We're seeing real estate taxes in almost all markets take a bite out of NOIs compared to the last couple of years.

So those building valuations and the relative trading values might alter a bit during '23. So I would say the fourth quarter payoff rates were probably a reasonable proxy for what's going to happen in '23, absent a material change in the rate environment. We do see some purchase opportunities in the market, some of them driven by 1031 exchanges. So that's a good credit environment for us.

Some people are just taking profits and deferring the taxes and getting themselves into the best asset they can. So that will drive some prepayment activity, but we would expect real estate prepayments to be considerably more muted than they were in '22. And it's also the case that we don't -- the customers that paid off portfolios, for example, in third quarter, the one customer that sold their entire portfolio and paid us off completely in several other lenders.

There's not those concentrations in the portfolio at this time where we see a massive pay down like that. So one, fewer concentrations; and two, slower market activity equals lower prepayment rates in '23. Equipment Finance is relatively stable, principally amortization. But from time to time, we do see some early terminations. In our case, that's probably favorable. It gives us more cash to redeploy at a higher yield in almost all cases in that environment. And then Commercial Finance isn't so much a question of prepayments as it is to the volatility in line usage. It's not unusual for us to see a draw of $5 million, $7 million, $8 million, $10 million in a week and a pay down 2 weeks later of the same amount or a little more. So for that matter, it's line utilization week by week, month by month. Hard to predict in the extreme. But with greater commitments out there and overall lower liquidity among those borrowers, we still expect to see somewhat higher utilization.

Okay. And is utilization back to kind of normal level? Or is it still well below where it was running kind of pre-pandemic?

It's not quite where it was before. It's probably retraced about 50%. And so that's why we think there's some runway ahead of us in a more normalized liquidity environment. And also, even though in the Healthcare space, many of our customers are enjoying somewhat higher reimbursement rates at the state level. Their expenses are going up, too, especially in states that have organized labor as part of their workforce.

So the margins will remain relatively stable. But in an intra-period basis, their expenses are going up, which means their draws are going up. And we will then, therefore, see somewhat higher utilization on those credits, almost no matter what if it retraced. That's what we're saying, if it retraced all the way back to, shall we say, the 2019 level, we would pick up at least another $40 million of utilization. Right now, we're expecting 20 in our official business plan.

Got you. Okay. That color is helpful. And maybe just last one or two for me. More the margin, and I think you talked about in the past, the margin may be peaking in the upper 370, 380 type of level. Has anything changed in your outlook there? I know maybe it's a back half event? Just trying to understand when the margin peaks and if there's any real difference in your outlook on that level today versus a quarter ago?

No, I actually think that, as I said earlier, we have an opportunity to expand the margin in the second half of the year. It will depend on the mix and it will particularly depend on us being successful in Commercial Finance growth. But if we are successful, I wouldn't necessarily call a peak to net interest margin. Obviously, too, the part of that is deposit and expense. If things remain relatively stable, we're able to maintain the funding base at the levels we're talking about, then again, I see some opportunity for margin expansion. And if we're able to bring in commercial deposits and reduce the overall marginal cost of funds, there's yet another opportunity to expand margins.

So I would say that the higher end of the range for the year would be in the upper 3s, seems a reasonable place for us to be. But if we are successful in what we're trying to do in the second half on the Commercial Finance side and the commercial deposit side, that isn't necessarily the peak. But again we have to see what happens with the core funding costs during the first half of the year, what the Fed's communications are as far as rates are concerned. If all of a sudden, there is a pivot in the latter part of the year, then it might take some pressure off of funding costs. But at the same time, we'll be able to maintain or even expand margins because we're going to be repositioning cash flows.

Got you. Okay. And then last 2, Morgan just was just the -- with the growth you're outlining or at least kind of anticipating by bucket, can you just talk about the reserve level and just how you're thinking about it in the context of CECL and then -- just -- I know you've talked in the past about kind of the levels of profitability you're targeting. Just thinking about -- I think in the past, it's kind of in the low 30s or mid-30s in kind of a 1% ROA. So just kind of the reserve with regard to CECL and the profitability outlook would be great.

Okay. Well, first, on reserves. Yes, CECL is upon us. We're in the final stages of model analysis and validation, but we do expect that consistent with the impact of CECL, the overall reserve ratio is going to go up. And obviously, as we put in somewhat higher risk credits in the Commercial Finance area, middle-market, equipment finance, small ticket equipped finance, those are higher reserve ratio credits. So we would expect there to be some additional growth in reserves, both because of the day one impact of CECL and as we pivot the portfolio further to Equipment and Commercial Finance, you'll see some higher provisioning.

Probably better able to give you more specifics on our next call. But just right off the bat, the middle market, small ticket portfolios will have a reserve ratio greater than 1%. The Commercial Finance portfolios will have a reserve ratio greater than 1%. So on a weighted average basis, both of those credits are going to require higher reserves and, therefore, bring up the average reserve ratio.

On profitability, given the timing of cash flows this year, we expect the mid- to high 20s for the first half, but we do see ourselves hopefully being able to push into the low to mid-30s in the second half. The bank at that point would do somewhere between 95 basis points, 90 to 95 on the low end, and 105 to 110, maybe even pushing 115 right at the end of the year on the high end. So again, right within that 1% range, which is what we've been trying to achieve, it looks like we're getting pretty close. The key is to just keep it stable in the first half and then work to expand in the second half.

(Operator Instructions) Next question comes from Henry (inaudible) HCW.

Morgan, good quarter there. I was just wondering if -- since our dividend cut ratio has improved drastically since earnings have gone up, would you consider an increase in the dividend or a special dividend that will really help us all timers.

Well, let me say that both as significant shareholder and as an all-timer, I generally personally in favor of a higher dividend. But right now, when you look at our comparative dividend yields, they're very competitive in the market. And we also want to see what happens with interest rates overall. If they're actually going to be coming down during the course of the year, the dividend yield looks even better. So I would rule nothing out right now. The company is well capitalized at both -- at the bank level and at the holding company level.

And to your point, we appreciate the recognition of better dividend coverage. So I would expect at least for the first quarter or 2, while we get a handle on Federal Reserve policy, and we make sure that we're able to put a floor under net interest margin and earnings, the dividend policy remain about the same. But I would also say that we're going to take another look at that in April and another look at that in July. It would rule nothing out right now. Dividends have been a key component of shareholder return these last several years. It's an important component of it. And if that is a path to better total shareholder return, I would not necessarily rule anything out right now.

And that was helpful. Just one more quick comment. I guess one of your competitors did a major deal in the Chicago area neighborhood. Do you have a comment on the merger or acquisition field in the Chicago area.

That would be a great conversation I'd over a longer period of time. But to address our particular plans, I would say this. First, right now, I think executing our business plan on an organic basis has proven to have good results as you look at the improvements in originations, even starting in 2021, continuing on to 2022. We have an opportunity to further improve of results here in '23. And towards that, we want to stay as focused as we can. Having said that, growth can be a good thing if it contributes a funding base that's helpful to us, if it contributes higher operating leverage and if it improves the capital base to the point where we may meet the Russell 2000 threshold for inclusion later this year.

So I would not really want to comment on the broader aspects of Chicago. People have their own perspectives. But I do think that we may see an opportunity to do something later in the year if it would help us, but it's certainly not our focus. It would almost be something that somebody offered us and we thought it made sense, not something that we're going to go out and seek out to do. It does appear that the market will respect higher earnings and more stable earnings. We think that the pivot to more commercial base helps earnings strength and therefore, multiple [earnings] going forward. Again, that's our focus.

Morgan, keep up the good earnings growth rate perspective.

Thank you.

(Operator Instructions) There are no more questions in the queue. I would like to turn the call back over to management for closing remarks.

Well, we appreciate all the very good questions and continued interest. We look forward to 2023, building on the '22 results, and we'll do our very best to improve our -- stabilize and improve our results for shareholders. Enjoy the rest of the winter, if you can and we'll talk to you in the spring.

This concludes today's conference call. Thank you all for joining. Enjoy the rest of your day.