First Interstate Bancsystem Inc (FIBK) 2011 Q1 法說會逐字稿

Good morning and welcome to the First Interstate BancSystem first-quarter 2011 earnings conference call.

All participants will be in listen-only mode. (Operator Instructions). After today's presentation, there will be an opportunity to ask questions. (Operator Instructions). Please note this event is being recorded.

I would now like to turn the conference over to Marcy Mutch. Please go ahead.

Thanks Andrew. Good morning. Welcome and thank you for joining us for our first-quarter investor conference call.

Before we begin, I would like remind everyone that some of the remarks today may constitute forward-looking statements, particularly regarding quarterly provisions for loan losses, net interest margins, loan growth and nonperforming assets. We may also make other forward-looking statements, including statements about our plans, strategies, and prospects. I would remind you that all forward-looking statements are subject to various risks and uncertainties and that our actual results may differ materially from those expressed or implied by such statements. For a full discussion of the risks and uncertainties associated with our forward-looking statements, please refer to our securities filings, in particular the Risk Factors section of our most recently filed Form 10-K.

Joining us from management this morning are Lyle Knight, our Chief Executive Officer, and Terry Moore, our Chief Financial Officer. Lyle will begin by giving you a general overview of this quarter's results, and Terry will follow up with more specific information behind the quarterly results and provide a general review of credit quality information. Also with us this morning is Ed Garding, our Chief Operating Officer, and Bob Cerkovnik, our Chief Credit Officer. Bob will be available during the question-and-answer time to address specific questions concerning our loans and asset quality.

At this time, I'd like to turn the call over to Lyle Knight.

Thanks Marcy. Good morning and thanks to all of you for joining us on the call.

Last night, we reported earnings for the first quarter of $8.7 million, which equates to diluted earnings per share of $0.20 for the quarter. We feel pretty good that our earnings have remained relatively stable over the past several quarters. We say this because, first of all, our markets are not yet showing signs of robust economic recovery, yet our revenues for the first quarter of 2011 were up slightly compared to revenues in the first quarter of 2010.

Second, the slowdown in residential real estate refinancing activity reduced our income from the sale and origination of residential mortgage loans. This, coupled with a much smaller recovery on the impairment of our mortgage servicing rights, resulted in a combined pretax impact of about $7.2 million on a linked-quarter comparison.

As we expected, it is a challenging environment for generating loan growth. Demand for new loans is not keeping up with normal payoffs and scheduled amortizations within the portfolio, so we saw a decline in total loans during the first quarter. With weak loan demand, we had focused on managing the balance sheet to maximize our net interest margin. We continue to effectively attract core deposits to the Bank, and again experienced a shift of higher-cost time deposits to lower-cost savings and demand deposits. This has enabled us to keep our net interest margin stable despite the lower balance sheet leverage.

Normally, the first quarter is a weak period of loan growth in our part of the country. But having said that, we were still disappointed at the level of shrinkage in the portfolio. But please note that 54% of this quarter's decline in loan balances, or $56 million, was in our three stressed markets, primarily as a result of paydowns of loan balances.

As I mentioned earlier, there was a slowdown in real estate activity. This consequently reduced the number of mortgage loans held for sale, which made up another 24% of our decrease in loans.

Now, in the majority of our market areas, our loan portfolio is relatively stable and even showed modest signs of growth in a couple of our South Dakota markets and in Cheyenne, Wyoming. However, our distressed markets continue to battle high unemployment rates and unstable property values, so we don't expect to see loan growth in those areas in the immediate future.

Remember, we were late heading into this recession, and we're late coming out of it. Still, overall unemployment levels remain low in our footprint in comparison to the rest of the nation.

As with most banks, generating revenue is a challenge. We are in the process of implementing a variety of fee increases across the board on our banking services. One area we looked at and are having some success in growing revenue is our Wealth Management services. We have put considerable energy and attention toward enhancing this business over the last few years, beginning with the addition of Julie Castle as President in 2007. Wealth Management revenues are up 6.9% over last quarter as a result of improvements in the financial markets and an increase in our customer base. Within the Trust platform, our Wealth Management department has already opened 80 new accounts during the first quarter, as compared to 141 new Trust accounts throughout all of 2010. Wealth Management, along with the rest of the Company, continues to explore new opportunities to generate revenues and serve our customers' financial needs.

During the quarter, we remained focused on another one of our goals for 2011, which is to reduce expenses and enhance efficiencies. Our non-interest expense was down by about $2 million compared to last quarter, most notably in the category of salaries and benefits. This is partially attributable to a slight reduction in headcount as we are trying to do more with less.

Now, turning to asset quality, the credit cycle is playing out pretty much in line with our expectations. We continue to see increases in nonperforming assets as problem loans advance through the credit continuum toward eventual resolution. While we are disappointed at the level of NPAs, we are neither surprised nor discouraged. Most of the increase we had this quarter was centered in three fairly large real estate loans.

The most encouraging sign we are seeing is a reduction in the inflow of loans into the NPA pipeline, as evidenced by a decline in criticized loans. Over the past two quarters, criticized loans have declined by about 8% from hitting what we hope would have been their peak at the end of the third quarter of last year.

With fewer new problem loans emerging, that leaves us to manage through the existing group, and there are few successes in this regard. We saw about $10 million in paydowns on our larger nonaccruals and TDRs this quarter, and are beginning to see some of our workout plans come to fruition. As of today, 99% of our accruing TDRs are current under the modified terms. We are also seeing OREO properties continue to churn and have several sales pending at prices that are close to our carrying value.

We continue to believe we will hit the peak dollar volume of nonperforming assets during the middle of this year. You've all read about the Federal Reserve's ruling related to real estate servicing and foreclosure practices. Well, this caused us to step back and look at our practices, and we are pleased with what we found. Our 30-day past-due rate in our servicing portfolio is only 2.55% as of the end of the quarter. That's about a third of the national average. Our foreclosure rate is normally 0.7% while of course the national rate is over 3%. Consequently, we don't believe we have much exposure to any regulatory actions being taken in this area.

Well, with that high-level overview, let me turn it over to Terry for details.

Thanks Lyle. Thanks to all of you for joining us this morning.

As Lyle has already reported, earnings for the first quarter were $8.7 million with diluted earnings per share per common share of $0.20. Our net interest margin has remained stable despite the decrease in loan volume, largely because of a further 8 basis point decrease in the cost of funds from last quarter. At a cost of funds of only 87 basis points, further decreases will be minimal.

With some increase in the yield curve this quarter, we've also been able to hold the line on our investment portfolio yield without taking on extension risk. Over time, we would expect to operate with less interest-bearing deposits in banks, principally the Federal Reserve Bank, by investing in either loans or investments which will help our margin from suffering any significant declines.

Loan volume will continue to provide one of the largest impacts on margin. Although average loans decreased $98.5 million on a linked-quarter basis, our yield increased 2 basis points.

Net interest income dollars were down compared to the fourth quarter 2010 by $1 million, mainly due to two fewer accrual days in the accounting period. However, as we compare net interest income for this quarter to the first quarter of 2010, which did have the same number of accrual days, you'll see we remained about even. This is despite a decreased average in loan volume of $200 million over the same period.

Non-interest income has decreased to $20 million, or a 21% decline from the fourth quarter of last year. This decrease was primarily due to a reduction in residential real estate origination income. While we are not anticipating revenues from residential real estate originations in 2011 to be as high as 2010 in the current interest rate environment, we were nonetheless pleased with this level of revenue. As you fully appreciate, as residential mortgage rates increase, the refinancing opportunity can diminish quickly.

Included in the OREO expense for this quarter are $1.6 million evaluation adjustments, principally in the Flathead market. We continue to aggressively market OREO properties and have been able to manage our overall level of outstanding OREO to modest levels. Currently, 69% of our other real estate is -- remains in our stressed markets.

We had about $3 million in sales during the first quarter of OREO and have sales in process right now, so this is an encouraging sign. This is the fourth consecutive quarter we've seen a reduction in our other real estate.

Turning our attention to credit, nonperforming assets did increase to 3.79% total assets as of March 31. A consistent theme from prior quarters is that we have three stressed markets which dominate our credit quality and OREO data. These markets are the Flathead market in northwestern Montana, the Gallatin market in south-central Montana, and the Jackson market in Wyoming. A common characteristic among these markets is that they are resort and second-home communities which, for economic vitality, has been dependent on out-of-state monies.

Nonaccrual loans increased to a total of $212 million, or an increase of 8.7% over last quarter. Approximately 39% of the increase was attributable to the stressed markets. Of total nonaccrual loans, approximately 78% reside in the commercial real estate and construction real estate portfolios. Consistent with the past several quarters, 52% of nonaccrual loans are in our stressed markets. As of March 31, approximately 71% of nonaccrual loans are current with regard to principal.

TDRs bumped up $20 million this quarter to $33 million. 50% of this increase is related to one residential mortgage loan in the Flathead area. 50% of TDRs reside in the commercial real estate and construction real estate portfolios. As Lyle said, at this time, virtually all of our accruing TDRs are current.

83% of our first-quarter provision for loan losses of $15 million was attributable to specific reserves with 46% of the total provision allocated to our stressed markets. The provision remains elevated and on an annualized basis is equivalent to 1.41% of average loans.

Net charge-offs this past quarter were $11 million with 24% related to distressed markets. There was also a $6 million charge-off of one commercial borrower outside of those markets in this past quarter.

As you can see from our earnings release, our net charge-offs are down from the fourth quarter. We expect that the timing of charge-offs will be a little lumpy over the next few quarters as we continue to work out our nonperforming loans. We want to emphasize that we believe our reserve is adequate to absorb any charge-offs on these loans, and as we determined, it is appropriate that there will be loss on these credits, we charge off the loan balances. As NPAs peak, we would anticipate seeing net charge-offs exceed provision later this year.

With that, I'll turn it back to Lyle.

We have been very direct in communicating that credit quality is our number one focus this year, but we want to be equally as direct in letting you know that we aren't focusing on credit quality at the expense of loan growth. We have well-qualified enthusiastic lenders, and we are well positioned to address any loan demand.

We are seeing some areas of economic growth within our footprint. We are seeing steady usage in our committed lines of credit of about 84%. As we wind up April, we are seeing some increases in new deals in the loan pipeline.

The energy sector remains strong in this part of the world, and we are adding expertise to market directly to this industry and to the service providers related to this industry. Coal production in Wyoming and specifically in Campbell County, Wyoming is up, and coal producers are employing additional workers. In our Casper, Wyoming market, we have recently added two commercial lenders, both of whom have a background in petroleum engineering. Additionally, in Billings, Montana and Gillette and Cheyenne, Wyoming markets, we've added three advisory board members with backgrounds in energy production or energy-related service fields.

We also saw an increase in our agriculture portfolio is quarter. Commodity prices remain strong and we continue to pursue this line of business. As Terry mentioned to you last quarter, our strategy is to aggressively pursue new business while continuing to be disciplined to follow our strong credit policies.

Well, with that, let's open it up for questions.

(Operator Instructions). Jeff Rulis, D.A. Davidson.

Good morning. Just some color on the criticized loan categories. Just wanted to get the percent or the makeup of what is included in NPAs. Is that all of doubtful and half of the substandard, or what's the breakout there?

This is Bob Cerkovnik. Yes, this would be -- substandard would be if they have -- that would be our substandard doubtful categories would be our nonperforming loans. I don't have a breakout of what is in nonperforming as in our substandard on a percentage basis, but all of our doubtful credits would be automatically on nonaccrual with some specific provisions assigned to those particular credits based on a FAS-114 analysis.

Lyle, you brought up some of the fee income focus initiatives you're undergoing. I guess how does that impact the overall look at noninterest income levels going forward? Are you looking to grow that or is that just offsetting some of the runoff elsewhere? In other words, you're at $20.1 million this quarter. What do see balances head from there, given your focus on that fee income?

Clearly that is a challenge for us. We've been back, Jeff, and looked each of our accounts and each of our cost structures against those accounts and the fees that we charge. We've introduced new fees. We are looking at pretty wide reductions in the amount of fee waivers.

Until we understand more fully what the impact of debit card interchange fee will be, it's hard to say whether we are going to be able to hold steady or increase. We are all waited to see what happens with the [Tester] amendment. If Tester is successful in delaying the implementation of the Durbin amendment for two years, then I think we will come out ahead of the game. If he is not successful, then we need to wait to see what the Federal Reserve actually sets the rates at before we can be specific on the numbers.

Okay. Then one last one. Terry, on the margin, how did that trend in the quarter? Do you have averages by month during the quarter?

I do not have those right in front of me, but it's held relatively stable each of the months from fourth quarter. So it might be up or down a couple basis points any given month, but no obvious trend.

I guess I did have one quick one on the tax rate. Is this quarter's tax rate, sort of go-forward rate, is that what you'd assume?

Yes, it would be. I think it's a pretty good run rate. Obviously, as earnings would lift over time, that the tax rate will also increase a little bit because of municipal income, etc.

Okay, thank you.

Matthew Clark, KBW.

Good morning guys. On the loan yield, it looked like it was up a couple basis points despite the inflows in the nonaccrual. I'm just curious whether or not there were any -- if there was any noise in there in terms of maybe prepayment penalties or not. I'm trying to get a sense for what's going on there.

There is very little noise in there. We had a little bit of charged-off interest and a little bit of recovery of interest, but it's all netted out a couple of hundred thousand dollars for a charge against income.

Then in terms of your -- as it relates to your comments about your excess liquidity and I think your increased willingness to redeploy into maybe some higher-yielding securities, are you going to try to manage to maintain this margin despite the fact that loans will probably remain under some pressure here? Is that possible in terms of the margin outlook?

Well, I do believe it's possible. It was possible. We managed in the first quarter to hold that up. We still have a little bit of room although not 8 basis points a quarter in our cost of funds. We would envision that we will begin to see some deployment of our liquidity if not through some loan growth, in some slow continual growth of the investment portfolio as we've done over the last year. So I think, for several quarters in a row, our investment portfolio has grown by perhaps around $50 million to $100 million a quarter and at such point that we see that there is more confidence in the marketplace and loan growth is occurring. We should have good, immediate liquidity obviously to deploy into loans. But I do believe that it's possible that we should -- would be able to maintain our net interest margin at its current level.

Okay. Great. Then in terms of your regulatory exams, do you guys have one coming up or did you just get through one? I can't remember.

This is Lyle. Our exam will be in August of this year from the Federal Reserve on safety and soundness.

Okay.

We have exams going throughout the year, but if you're referring to the [Camel] rating, we will get that this summer.

Thanks guys.

Brett Rabatin, Sterne Agee.

Hi guys. I wanted to ask -- last quarter, you talked a lot about expense initiatives, and obviously you were able to have some impact on that this quarter. Is that still a focus? Can we expect additional leverage from the expense base? Then just wanted to get clarity on kind of a breakdown on medical versus incentive comp and headcount if possible.

This is Lyle. We have three primary focuses this year, and our cost structure is one of them, but we are taking a little longer view of this. We constantly work on expense control, but we are actually looking at the way we deliver our products and services with a longer view at finding means to improve customer service but yet do it more efficiently. So we won't see quick results from that exercise, but we will continue to see results from our cost containment initiative.

The second question -- our headcount year-over-year -- and I'm looking at the financial -- we are down roughly 20 FTEs year-over-year. Where we saw most of the decrease in salaries and benefit costs were on the benefit side comparing Q4 to Q1.

Okay. All right. I wanted to ask a credit question around just looking at adding to the reserve this quarter. I was curious to hear some thoughts on just kind of lost content on current NPAs and then maybe some color around the stress markets, particularly like Flathead, which is obviously a market that impacted this quarter in terms of current nonperformers versus what might be watchlist or substandard in terms of what keeps those loans from migrating to nonaccrual if lot sales, etc., don't occur.

This is Bob. Just to -- you had several different questions. But the increase in our nonperforming loans really centered around three credits. One is a hotel and motel; another one is a large personal residence up in the Flathead that we ended up putting that on as a TDR because the customer asked for interest-only for three months, which we agreed to; and then another one is a restaurant chain. But in general, that's what we saw the increase in our nonperforming loans were.

And then some color around what we are seeing up in the Flathead is we continue to see very little sales. We do see a little deceleration in the level of declines based on appraisals and sale prices that are coming in. So in the (inaudible) market we see some hope in there, but we expect, coming into the selling season, that we will see some more sales as people realize more value there in that market.

Essentially, is the market, whether it's Flathead or [Cow's Bell] or Jackson Hole, are these markets essentially seeing better liquidity if the price is right, or is it still just kind of a lack of meaningful buyers to push sales?

I would say, in the Jackson market, we are seeing people doing one of two things. That $3 million in (inaudible) homes are still selling pretty actually fairly briskly. We are seeing people -- land bank deals because they see value in there, or long-term value in that Jackson market. Stuff under $3 million is not selling. Plus raw land or lots are still fairly slow in the Jackson market. But we are seeing more of a deceleration in the level of decreasing values over the last six months.

Thanks for the color.

Brad Milsaps, Sandler O'Neill.

Good morning. Most of my questions have been answered, but I just wanted to get you guys to talk maybe a little about what your expectations are for this year's selling season? I know you guys are seasonally, you're coming up on your big months. I'm just curious what you guys kind of view as what you would consider good activity and what that might mean for your level of NPAs as you move through your expectations for the selling season.

Our expectations are similar to what we saw in 2009. We expect that -- we hope to see much better in 2010 -- '11 -- excuse me, and 2010 was pretty much a down year obviously. But in 2011, we expect, because values have come down, I think people are starting to realize there are some values out there now. As we always like to say here is price sells. I think there's a lot more motivated borrowers out there -- sellers out there right now because the whole period is getting so long form and they don't see an end. Interest rates are at historic lows. So I think we believe that there would be some sales in there. To what level, it's very difficult to predict that.

Do you have a greater number of properties queued up to go through the foreclosure process, say, in the next month or so to kind of -- maybe in anticipation of hoping to be able to move more things off your balance sheet to take advantage of this time of year?

Yes. In general, yes, that's a great question. It depends on how cooperative the borrower is. If we've had to move into a situation where the borrower has been on nonaccrual with some specific reserves, yes, we're going to probably going to take a more aggressive approach. But if the customer is working on still paying us, we're probably going to work with them -- that's our long-term philosophy -- because we feel, over time, we'll get better value and our customer will be better served and our shareholders will be better served if the customer sells it versus us taking it back. So does that create some long-term issues for us as far as keeping our NPAs a little elevated? It may or may not. We feel that our customers are really motivated because they've been sitting on these properties for quite some time and we have been -- when you're writing out a check every month to pay the interest costs, people are becoming a lot more motivated.

(inaudible)

I hope that answers your question. Do you have any follow-up on that?

No, I think that's it. Anything beyond sort of -- do you have any special plans for an auction or any other kind of special marketing that might differentiate you guys in order to move some of the stuff off the balance sheet? That would be my final question.

No, we don't do auctions. We have not found those to be very beneficial. The ones we have seen and done in the marketplace have produced some pretty disastrous results in some markets, so we've kind of shied away from that. Again, we work with our customer to get them to really sell the property.

This is Lyle. Just to add a comment or two, this has been a very long winter in Montana and Wyoming. The positive side of that is we've had a great ski season. We sold more properties this winter than we thought we were going to sell. So that gives us a little bit of optimism coming into the real selling season.

The reports are around the Flathead that they are seeing more Canadian potential buyers that are down looking at properties. They're real bargain hunters, as you can imagine, and looking for the cheapest prices.

But I think what we are seeing are intermediary buyers right now. Users don't seem to be showing up. When you're dealing with resort properties and second home markets, we are relying on people that live outside of our borders. While the national economy starts to recover, I think the second home buyers need a few more months of sustained growth and recovery before they're going to be comfortable to come in to buy trophy properties for themselves. So I think we're seeing that intermediate person that comes in, wants to buy low with the anticipation of selling at a higher price later. So if the Canadians do show up this summer like we are hoping, they've got a strong economy and a strong dollar. They could be helpful to us in the Flathead area.

Great, thank you.

(Operator Instructions). Tim Coffey, FIG Partners.

Good morning everybody. I want to talk about deposits for a little bit. You have one of, if not the top, very close to the top, market share in each of the markets that you serve and yet you continue to see some good deposit growth quarter-over-quarter. What are you doing to generate those deposits?

Partially it's our sales and service culture within the banks. We have always run a very high customer service touch business model. That's been a contrarian model to the major players, so that's been helpful to us.

But secondly, Tim, and maybe more importantly, is there still is a flight to safety. We have not found our commercial borrowers willing to invest in fixed assets. They are not expanding plants and equipment at a rapid rate, so they are just building liquidity. We had a large market share going into this recession and we have continued to grow it just because people are keeping more cash on hand, I think waiting for some clear signs that we are in the recovery period.

Once we start to show signs of recovery, do you anticipate your borrowers will use that excess liquidity they have on deposit, or do you think they'll ask for increased lines of credit or other types of (multiple speakers)?

Yes, that's really the $100,000 question. I personally feel like we are very liquid today. I do not see the Bank growing in liquidity should the economy recover. I think businesses will begin to spend some of the cash they have on hand. But I also hope at the same time that -- they can't draw down their lines. They've already got 84% of their lines being used. But they'll come in for additional credit. But I guess, if I was trying to look into a recovery, I would see slower deposit growth than what we have experienced the last couple of years.

Okay. Terry, in the next six months, do you have -- what's the dollar value of CDs that you have that you're in?

I don't have the six-month, but at a one-year mark, just over the next 12 months, we have about 70% of our CDs will reach maturity, and so a substantial block of those will be repriced. So that's obviously most of our ability to continue to see at least some progress in cost of funds.

Any idea what the average price of those CDs are right now?

I don't have it handy. Obviously, in our report, we have 1.52% cost of funds on our entire portfolio, and obviously almost all CDs would be priced, even long-term CDs, at a price less than that. So I don't have exactly what's coming up the next year on that, but I would expect that CD rate, as we look at this next quarter or two, in our current interest rate structure will continue to show some further improvement.

No problem. I can find that. Then, during the call, did you say that you had other real estate under contract?

That is correct. We have quite a list of stuff that's under contract. I think there's about seven properties that are -- were scheduled to sale, meaning (inaudible) our new contract where we have offers and we are negotiating with them.

Do you know what the dollar value of those seven properties are?

I don't have that right in front of me.

Okay. Then I think, on an earlier question, Bob, you were talking about property levels, the prices are holding up. Was that just for the Jackson Hole market, or was that across all the three stressed markets that you're (technical difficulty)?

We are seeing across, with the exception of our three challenged markets, we are seeing property values hold pretty steady. Again, it varies a little bit between those in our three challenged markets. I go back to my earlier comments as to we are seeing a deceleration of declining values in the Jackson market and then in the Flathead market, we are seeing, continuing to see some reaching the bottom, if you will.

Okay, so you feel that's the market you're taking (inaudible) additionally once they go into nonaccrual is the right mark?

Yes, yes. We feel real comfortable with the stuff that we give back into OREO, we have been -- on our book value what we've been losing on that is less than 5%.

This is Lyle. A little more color on your question -- we see prices pretty stable in the Gallatin area because we will remind you that Gallatin has a real normal economy, has a university, has a community. It isn't so reliant on second homes.

In the Flathead area, things are pretty stable around the southern part of the lake, particularly around the Polson community. However, the northern part of the lake, which is what you would call [Cow's Bell] or Big Fork, 45% of the sales this past year have been bank-owned properties. So they are still going at pretty deep discounts because the banks are the ones selling.

Yes, I've seen that, so I know exactly what you're talking about. Also, Lyle, do you think this summer's tourism season, do you anticipate it will be stronger than last year?

That's hard to say because last year was a very solid season. We broke records at both Yellowstone, Glacier and I think Mount Rushmore. I am a little nervous about gasoline prices, not sure whether that puts people into smaller vehicles and hotels or whether they will still be driving their motor homes and RVs. I would rather say that we expect a strong tourist season. Whether we can break last year's records or not, I'm not sure.

Okay. Then Terry, I had one more follow-up question on deposits. How much of -- if you look at the composition of deposits from the agricultural community, have those balances gone up quarter-over-quarter?

I don't have the balances from the ag sector broken out in front of me here, so that would take me a little bit to get back to you on that. But I can say, just from an anecdotal perspective, that commodity prices have been -- were great (inaudible) rate, and that the agricultural sector is very solid and strong. So, I would expect that our deposits have grown from the agricultural sector by a little bit.

Now, we've actually seen growth in the loan portfolio which surprises -- (multiple speakers)

(multiple speakers) on the last quarter's. Yes.

Those are all my questions. I appreciate the time.

(Operator Instructions). This concludes our question-and-answer session. I would like to turn the conference back over to Lyle Knight for any closing remarks.

Thank you, and thanks to all of you that joined us today.

I think just a real high-level conclusion is that, as I said a moment ago, this has been a very long winter. We are all anxious for spring. It started on Easter, but it's gone already. We've got rain today and expect snow at the end of the week. But the reason that we are anxious for the weather to change is because people are more apt to feel confident about expanding, whether it's home-equity loans or whether it's growing their businesses. So our asset growth usually performs better in the summer months than it does in the winter, so we are anxious to get on with summer.

Thanks again for joining us. We'll see you soon. Bye.

This concludes the First Interstate BancSystem first-quarter 2011 earnings conference call. Thank you for attending today's presentation. You may now disconnect.