Mercantile Bank Corp (MBWM) 2015 Q3 法說會逐字稿

Good morning and welcome to the Mercantile Bank Corporation third-quarter 2015 earnings conference call.

(Operator Instructions)

I would now like to turn the conference over to Bob Burton from Lambert Edwards. Please go ahead.

Good morning everyone and thank you for joining Mercantile Bank Corporation's conference call and webcast to discuss the Company's financial results for the third quarter of 2015. I'm Bob Burton with Lambert Edwards, Mercantile's investor relations firm, and joining me are members of their Management team including Michael Price, President and Chief Executive Officer; Robert Kaminski, Executive Vice President and Chief Operating Officer; Chuck Christmas, Senior Vice President and Chief Financial Officer; and Sam Stone, Executive Vice President.

We will begin the call with Management's prepared remarks and then open the call up to questions. However before we begin today's call it is my responsibility to inform you that this call may involve certain forward-looking statements such as projections of revenue, earnings, and capital structure as well as statements on the plans and objectives of the Company's business.

The Company's actual results could differ materially from any forward-looking statements made today due to the important factors described in the Company's latest Securities and Exchange Commission filings. The Company assumes no obligation to update any forward-looking statements made during the call.

If anyone does not already have a copy of the press release issued by Mercantile today, you can access it at the Company's website, www.mercbank.com. At this time I would like to turn the call over to Mercantile's President and Chief Executive Officer Mike Price.

Thank you, Bob, and good morning, everyone. Thank you for joining us to discuss our third-quarter 2015 results for Mercantile Bank Corporation. On the call today our CFO Chuck Christmas will provide details on our financial results followed by COO, Bob Kaminski with his comments regarding loan development, growth initiatives, and asset quality. EVP, Sam Stone is also on the call with us today.

Hopefully you have all had the chance to review our earnings release. We reported net income of $0.45 per share compared with $0.35 in the prior-year period.

The third quarter of 2014 contained $1.3 million in pretax merger related costs. Reflecting these costs the year-ago adjusted earnings per share was $0.40. With these positive results the bank has extended its very strong performance this year. The press release lists a number of important financial highlights, but in particular we are very pleased with continued momentum in new loan generation which Bob Kaminski will detail in a moment. The third-quarter results also underline our gains in areas of strategic focus across our business.

As I said a moment ago, our loan generation was strong in the quarter as we originated $145 million of new business while maintaining our discipline around credit quality and appropriate pricing. Our team is doing a great job, particularly in our largest markets.

Although the yield curve still weighs on net interest income results across the industry, we generated above average performance in net interest margin which was ahead of our guidance for the quarter and the year. Improving the earning asset mix is a primary driver of profitability improvement and underscores a key benefit of combining the deposit base of legacy Firstbank with the larger market exposure of Mercantile. We continued to shift our mix of interest earning assets out of lower yielding securities and into higher yielding loans, resulting in a relatively stable yield on total earning assets despite the slow interest rate environment. This rebalancing is a competitive advantage that can enhance the spreads at which we do business in the near future.

Fee income, an area of opportunity for Mercantile, accelerated during the quarter and produced strong growth of 47.5% in non-interest income in the current quarter compared to the third quarter of 2014 reflecting higher levels of both mortgage banking and credit and debit card activity. Overall, we are very pleased with these results and expected to realize additional performance opportunities as we close the year.

As evidence of our strong capital position and demonstrating our commitment to shareholder return, we earlier today announced a quarterly cash dividend of $0.15 per share for the fourth quarter, providing an annual yield of about 2.8% based on our current share price. Looking forward to the remainder of 2015 and beyond, we see further opportunity to participate in the developing economic strength of our markets as Michigan's premier community bank. Our business activity levels reflect the healthy economic trends that are being reported for western and central Michigan, suggesting growth will continue through the coming months.

At this time I'd like to turn the call over to Chuck.

Thanks, Mike and good morning, everybody.

As Mike noted this morning we announced net income of $7.3 million for the third quarter of 2015 and net income of $20.5 million for the first nine months of the year. On a diluted earnings per share basis we earned $0.45 per share during the third quarter and $1.23 per share during the first nine months. Given that the merger with Firstbank was effective on June 1 of last year, comparisons between the third quarter and especially the first nine months of this year with respective periods in 2014 are difficult to make. However, we are pleased to report that our 2015 results reflect the successful integration of the two banking organizations and the leveraging of the strengths that each organization provided to the new Company.

We are very pleased with our financial condition and earnings performance for the third quarter and first nine months of 2015. We believe we are very well-positioned to take advantage of lending and market opportunities to enhance our strong position as Michigan's community bank while delivering consistent results for our shareholders.

Our net interest margin was 3.87% during the third quarter, continuing a relatively stable trend over the past five quarters during which the margin ranged from 3.79% to 3.95%. The stability of our net interest margin primarily reflects our ongoing strategy to fund a large portion of our net loan growth with monies from the lower yielding securities portfolio.

Average loans represented about 83% of average earning assets during the third quarter of 2015 compared to 79% during the third quarter of 2014. In large part reflecting the ongoing very low interest rate environment and competitive pressures, our yield on total loans has generally been on a declining trend. However, our yield on total earning assets has remained in a tight range.

The collection of some larger prepayment penalties during the third quarter added approximately 3 basis points to our yield on assets and net interest margin. We recorded a loan discount accretion totaling $1.4 million during the third quarter of 2015, relatively similar to the prior three quarters and about $0.2 million higher than the third quarter of last year. Based on our most recent valuations we currently expect to record further loan discount accretions totaling $1.1 million to $1.3 million per quarter during the fourth quarter of 2015 and into the first half of 2016. Actual accretion amounts recorded in future periods may differ from our forecast due to a variety of reasons including periodic re-estimations and the payment performance of the acquired loan portfolio.

Our cost of funds increased 3 basis points during the third quarter compared to the second quarter in large part reflecting the completion of purchase accounting fair value adjustments relating to Firstbank's time deposit portfolio as of July 31. We had been recording a quarterly reduction in interest expense of almost $0.6 million which declined to about $0.2 million during the third quarter.

We expect our net interest margin to be in a range of 3.70% to 3.80% during the fourth quarter of 2015. While the ongoing very low interest rate environment continues to exert competitive pressures -- compression pressure on our net interest margin, we expect to continue to use lower yielding excess overnight investments and cash flows for monthly paydowns on lower yielding mortgage backed securities and periodic maturities on cause on lower yielding US government agency and municipal bonds to fund a large portion of our expected loan growth during the remainder of 2015 and into 2016.

The overall quality of our loan portfolio combined with recoveries of prior period loaned charge-offs and the eliminations of and reductions in many specific reserves, have produced a positive impact on our loan loss reserve calculations and allowed us to make no or negative provisions in the 11 consecutive quarters and in 14 out of the last 15 quarters. We recorded a negative provision expense of $0.5 million during the third quarter and $1.5 million during the first nine months of the year.

Gross loan charge-offs equal only $0.2 million during the third quarter and total $5.0 million for the first nine months of the year. Recoveries of prior period loan charge-offs equaled $0.2 million during the third quarter and totaled $2.6 million for the first nine months.

Resulting annualized net low-end charge-offs as a percent of average total loans were essentially zero during the third quarter and 0.15% during the first nine months of the year. A vast majority of the gross loan charge-offs thus far in 2015 was associated with one large commercial credit that was resolved during the second quarter.

Our loan loss reserved totaled $16.1 million at the end of the third quarter. The reserve for originated loans at $15.8 million equaled 1.04% of total originated loans at quarter end. As of September 30 the allowance for originated loans was comprised of $13.9 million in general reserves relating to non-impaired loans, $0.8 million in specific reserve allocations relating to non-accrual loans, and $1.1 million in specific reserves on other loans primarily accruing loans designated as troubled debt restructures.

We recorded non-interest income of $4.3 million during the third quarter of 2015, reflecting a $1.4 million increase compared to the third quarter of last year. The improvement was led by a $0.5 million increase in mortgage banking income and a $0.2 million increase in credit and debit card fee income. We also recorded a $0.2 million refund of Michigan business tax during the third quarter of 2015. With caution at mortgage banking income and recoveries on certain acquired charged-off loans can be difficult to forecast, we expect quarterly non-interest income to be around $3.5 million to $3.7 million during the fourth quarter. We recorded non-interest expense of $19.7 million during the third quarter of 2015, a decline of $0.7 million from the second quarter with $0.5 million over the high end of our guidance.

Accruals for our 2015 bonus program were higher than forecasted due to our strong earnings performance during the quarter that solidified our comparisons with certain bonus metrics. Loan processing costs came in higher due to robust mortgage banking activity while problem asset resolution costs were higher primarily due to legal costs and valuation write-downs on our residential property segment.

We are currently projecting quarterly non-interest expenses to total in a range of $19.5 million to $20.0 million during the fourth quarter, while our effective tax rate is expected to remain in the 31% to 32% range. We remain a well-capitalized banking organization. At the end of the quarter our banks total risk-based capital ratio was 13.7% and in dollars was approximately $92 million higher than the 10% minimum required to be categorized as well capitalized.

As a part of a $20 million in common stock repurchase program that we announced back in January, we have repurchased approximately 765,000 shares at a total all-in cost of $15.2 million during the first nine months of the year. The weighted average all-in cost per share is $19.89. Funding from the stock repurchase program has generally been provided via cash dividends from our bank, and any further stock purchases would likely be funded in a similar manner.

Those are my prepared marks. I will now turn the call over to Bob.

Thanks, Chuck and good morning, everyone. New client acquisition was one of the highlights for Mercantile Bank in the third quarter in which $145 million in loans to new and existing customers were booked. This follows new loans of $120 million and $100 million from the second and first quarters respectively. The composition of loan growth consisted of a good mix among C&I, owner-occupied commercial real estate, and non-owner occupied commercial real estate.

We also experienced significant funding on commercial construction commitments as projects advanced through the heart of the construction season. The concentration of this funding was centered in our larger urban markets.

The current banking environment in Michigan is good. Most Michigan banks are presently experiencing loan growth with all categories reflecting increases in totals.

Mercantile's net loan growth was $46 million for the third quarter reflecting normal loan runoff, asset sales by customers resulting in early loan payoffs, and some refinancing of debt away from Mercantile by customers who pursued aggressive rates from secondary market sources or local competition. The Mercantile lenders continued to have robust activity in their loan pipelines reflecting a purposeful sales strategy with a relationship banking focus as the centerpiece of their client acquisition activities.

Asset quality for Mercantile Bank was steady during the third quarter reflecting a solid performance of loan portfolios. Mortgage banking was strong in the third quarter as new purchase activity during the summer season and refinancing were robust with customers in all of our markets.

The Mercantile Management team continues its ongoing improvement process with formulation and implementation of various initiatives to identify new sources of non-interest income as well as the generation of efficiencies to reduce non-interest expense in all areas of the bank. The process is best summarized by the philosophy whereby resources are allocated proportionately in areas that will generate best revenue growth for our Company.

Regarding economic activity in our markets, Michigan continues to experience quarterly job growth as it has for the last several years. Michigan's job growth rate of 2.3% for the past year is the highest in the region and equal to the national rate. The professional and business services, manufacturing, and construction sectors all experienced job growth in the past 12 months. Michigan's unemployment rate of 5.9% continues to narrow the gap with the national rate and is the lowest in the state since 2001. Home prices continue to increase at a rate which outpaces the rest of the nation.

Those are my prepared remarks. I will now turn it back over to Mike.

Thank you, Bob and thank you, Chuck. Laura, at this time we'd like to open the call up to questions.

(Operator Instructions)

Our first question will come from Matthew Forgotson of Sandler O'Neill.

Chuck, the prepayment penalty income this quarter, can you provide that in dollar terms?

Yes, I think what we've been averaging, Matt, is about $150,000 a quarter, about $50,000 a month. And prepayment income came in at about $165,000 higher than what that run rate has been. So $165,000 in addition to the normal $150,000 or so that we average.

Okay. In terms of the remixing from securities into loans, I'll ask the question this way, how much more capacity do you have both in terms of a pure rotation from securities into loans as well as with regards to the loan-to-deposit ratio?

Yes, I think I'll answer the first one first; that one is pretty easy. We're at about $15 million more to go that we can reduce the investment portfolio and put those monies into the loan portfolio.

It's happening pretty quickly this quarter with rates coming down like they have over the last few weeks. We've gotten quite a few calls. So some of that $15 million is now sitting in Fed funds and at the Fed awaiting some loan growth this quarter.

But about $15 million from the end of September that we have to go. So we would expect that to -- some of that starting to happen this quarter, but certainly bleed into at least the next couple of quarters of next year.

In regards to the loan deposit ratio, that is not a ratio that we look at very much, Matt. We look at other ratios and other relationships in regards to our liability side. We look at more the assets separately and the liabilities separately.

Okay.

And again, we want to get the securities portfolio down by 11%, overnight investments about 2% of earning assets, and then the loans be the rest.

Okay. So, it doesn't sound like you would, just based on how you look at your liquidity profile, it doesn't sound like you would balk at running a loan to deposit ratio higher than 100%?

No, but one of the things you've got to remember is that those repurchase agreements are really a sweet program that you see on our balance sheet and they have been averaging $150 million or so. And that really is checking account money tied into sweep accounts from some of our larger commercial customers. So when you're doing that loan-to-deposit ratio I would suggest you adjust that and throw those repurchase agreements into the deposit mix, and you'll see that the number will fall below that 100%.

Okay. And then lastly, and then I'll hop out, in terms of your share repurchase capacity. You worked through 76% of the current authorization, can you give us a sense of your appetite for potentially reloading with a fresh authorization?

Yes, this is Sam. We'll be having that under consideration during the fourth quarter. And as Chuck reviewed the capital ratios, it appears that there certainly is capacity to do some more, but we'll get more specific about that later in the fourth quarter.

Thank you very much.

Thanks, Matt.

And the next question comes from Damon DelMonte of KBW.

My first question is relating to the margin. Chuck, I think you had said that there was 3 basis points of benefit from the prepayment penalty income? Is that correct?

Yes. The 3 basis point is that $165 million that I mentioned earlier that was higher than what we typically get.

Okay. So if you take that off this 3.87% that puts you at 3.84% for the quarter, which is actually up a basis point from last quarter. When you talk about your fourth-quarter outlook you talk in a range of 3.70% to 3.80%.

That kind of seems like if you took the midpoint of that it seems like a pretty sizable drop quarter over quarter. Is there something from the accounting perspective that maybe would be driving a lower margin, especially when you have additional remixing of earning assets to happen?

Yes, that's a great question. And there's a couple of things going on there. One is you've got to remember that the third quarter we still had some of that benefit from the time deposit adjustment back from the merger.

So that will be fully gone in the fourth quarter. So there's an impact there.

And then also our accretion on the loan portfolio from the merger was higher than what we expected and what the runs would indicate during the third quarter. So we're bringing that back down to what our model is showing.

But what we had in the third quarter is what we typically have each quarter, but we certainly don't build in our model, is that we typically have one or two larger loans that were acquired. Non-impaired loans that were part of the merger get paid off or typically refinanced through competition. They're just offering terms that we're not comfortable with. So while we hate to lose the relationship, certainly any discount that's associated with those credits is immediately brought into income.

So we always look at our reestimation. We're not really adjusting for those more one-time type events, we're looking at it more from a normalized amortization and payoff standpoint.

So I think if you reduce that time deposit adjustment and get that loan accretion down to more of a normalized or at least estimation standpoint, that will get us into the 3.70%s. The other thing is too -- the other thing that's moving around is our overnight investments. There are some timing differences between what's going on with the investment portfolio and what's going on with loan growth. And what we've seen so far this year on an average basis is that our overnight investments have been -- we want to get that down to about $40 million, and it's been running pretty consistently in the $55 million to $60 million.

Obviously, only earning 25 basis points has an impact on the margin as well. So I bumped that number back up to a little bit higher than what it has been running just to be conservative when I was putting that guidance together.

That's helpful. Thank you. Then switching over to loan growth and the outlook there, your commentary seems to paint a pretty positive picture for your markets and the parts of Michigan that you guys operate.

We saw high single-digit loan growth this quarter. Do you feel comfortable that's a sustainable level as you close out 2015 and head into 2016?

Based on what we are seeing with the current pipeline activity as well as potential new opportunities that we are seeing out there to our approach with relationship building and being out there in our various communities, certainly I wouldn't discourage that notion because it has been pretty robust throughout this entire year, and if not for the some of the payouts we received it would be even higher. So, I think that seems to be a pretty sustainable level from our standpoint at this point in time.

That's helpful. Just a technical question on the loans. In the press release for the total retail loans there's a -- seems like to be a significant drop from last quarter to this quarter between one to four family mortgages. But then there seems to be a significant increase in home equity and other quarter over quarter. Do those numbers get flipped or is there some sort of reclassification between those types of loans?

No, that's probably a good catch. I probably flipped them when I was putting that chart together. They have both been relatively steady on a slight decline.

Okay.

It's very likely that I just flipped those numbers.

That makes sense then. Okay. That's all that I had. Thanks a lot.

And the next question is from John Rodis of FIG Partners.

First question just back to the buyback. Am I correct, you got maybe another 200,000 shares under the current buyback, is that right?

Yes, that would be about right. Based on price there would be just under $5 million worth left to go. And we were buying in the low $19s in the first quarter, the high $19s in the second quarter, and the low $20s in the third quarter.

So, we'll see how that progresses here in the fourth quarter. But it still makes sense for us to return some of this capital through repurchase.

Sure. So you, Sam, so you would probably, all things equal, finish that buyback up by the end of the year I guess?

Probably pretty close based on the volume that we have achieved. We're trying not to be the ones pushing the price and I think we've successful in that. Because most days that we're active in the market we're in the lower half of the volume-weighted average price, and some days we don't go in the market if it seems to be running. We don't want to get in the way of anybody who might be trying to accumulate a position.

Yes. Makes sense. Chuck, a question for you on the operating expense guidance.

So you went from roughly $19 million last quarter to I think you said $19.5 million to $20 million this quarter for the fourth quarter, I guess. Was that mostly related to bonus accrual and maybe higher salary expense for mortgage? Or what was driving that increase?

There's a little bit of everything. Certainly the bonus accrual, as we go through the year we can get more confident in what our projections are.

We do have nine different metrics out there that we've got to keep an eye on. And so as the year has gone on we've gotten more and more confidence, so we've been building that especially over the last couple quarters. Certainly the Grand Rapids area-based mortgage lenders are on commission. So there was a little bit additional commission in there with that robust activity that we had.

So, I think it's more of an increase -- obviously, when we have an increase in the fee income we're going to see some increases in the overhead as well. So there's some variability there. The fee income does go down a little bit. It seems like hard-pressed that we're going to be able to match mortgage banking income from the last couple of quarters in the fourth quarter. If from anything else we're getting into a slower fourth quarter season. So then some of the loan processing costs that we have to record, obviously, will come down a little bit. So there's some variability there that's built into the income statement.

Okay. Maybe just final question for you, Bob. Just on credit and, obviously, credit your trends are very strong and stuff. But are you seeing any sort of issues that trouble you just looking out going forward?

I don't want to jinx anything, but the emergence of new problem loans has been very normal, very low, and continuing with our trends of improving asset qualities we are very pleased with that. We have normal things that pop up all the time and our crews are differently working on them as loans exhibit some signs of stress or strain, but nothing out of the ordinary or that would be a reflection of a bigger problem that's out there in any of the sectors. So we're very encouraged by that.

Okay, makes sense. Thanks.

Next we have a question from Kevin Parks of Hildene Capital.

Actually all of my questions were addressed. Thanks.

(Operator Instructions)

And our next question will come from Daniel Cardenas of Raymond James.

Just a couple of quick questions. Can you guys -- on your performing TDRs do have that number for the quarter?

I had that number earlier and I didn't bring it with me. I can shoot that to you, Dan. I know it went down a little bit, but I don't have it in front of me.

Then maybe some comments on competitive factors on the lending side. Are you seeing a pick up from any of the larger players in terms of competition? Are they being more aggressive in terms of pricing and/or rate, I'm sorry and/or structure?

This is Bob. I wouldn't say it necessarily picked up. It has pretty intense competition throughout the year, and we're seeing that from larger banks as well as the smaller banks and credit unions too.

But I wouldn't necessarily say it's changed a lot, it's just very strong and intense and you see every once in a while someone coming in and putting forth a very aggressive rate, and those are the ones that we have been shown the discipline to walk away from. But I think our relationship banking is what we will keep stressing and getting back to, and in the end that holds the day for us because customers in our markets they still appreciate that and they understand what it means to bank with us.

The benefits they'll get with that relationship with Mercantile Bank -- and those are the customers that at the end of the day that we want to bank with us; the ones that appreciate the value we can add. We're going to get a good competitive rate but it won't be some of these crazy rates that are out there that are here today gone tomorrow from some of the competition that we see from many different sources.

Good. You may have mentioned this, and I'm sorry if I missed it, but in terms of your loan pipeline how does it compare to say a quarter ago?

I'd say it's pretty similar. We've had some significant fundings obviously, but there's been new things that have -- new credit relationships that have emerged into the pipeline. So we look out and we see that they've been able to replenish what's been booked and that's been a very encouraging sign for the coming year.

Good. And what was the dollar amount of your payoffs and paydowns this quarter?

I don't have that off the top of my head.

If I had to just guess at this point I would say around $50 million would be the payoffs, if you will. We normally get about $50 million just in normal amortizations. We grew about $150 million so --

That's his quick and dirty estimate.

Yes, the very quick and dirty is about $50 million in payoffs above and beyond normal. That would be $50 million above and beyond normal monthly amortizations.

Last question just in terms of the M&A environment, are you beginning to hear more chatter right now or is it quiet? How would you describe the current M&A environment and your footprint?

Dan, this is Mike. Not a lot changed really from the last couple of quarters. There's a lot of people talking about a lot of things, but nothing I would say stands out to say boy, we're at the cusp of a lot of activity or it's dying down.

I think it's a matter of finding the right fit for our organizations. I know there are a lot of conversations going on and obviously we keep our eyes open as we've always said over the years. But we're pretty particular as I've said numerous times. It took us 17 years or 16 years to do the first one. And it was a great one.

So we want to make sure that we keep that kind of record up. I would say we continue mainly to be focused on organic loan growth, but we keep our antenna up for any good potential M&A transactions.

We probably don't have to wait until 2030 to see another one?

It will probably be somebody else besides me announcing it if we waited that long. (laughter) I guess the point of that all is that we're not an organization that feels like we have to do a deal to be successful. We did one because we saw the real benefits of it.

We've prosecuted that game plan to great success, and the next one we do we want to be able to look at our investors in the eye and say we have great confidence like we did with Firstbank that this is going to be a real win for our shareholders. So that does eliminate a lot of transactions that we look at because sometimes the dilution or the strategic fit or the cultural fit just isn't there.

Good quarter. Thanks, guys.

Next we have a question from Eric Grubelich of bank investor.

I just had a couple follow ups on the net interest margin trend. Can you give us an idea of the $145 million of loans you booked in the quarter, what the yields looked like there versus what has been rolling off?

And then the second part of my question is if you look at the business that you're originating and you look to originate over the next couple of quarters, where is the most competition coming from on the price side? Is it in CRE loans? Is it C&I? Where do you see most of that stress?

I'll handle the first one and I'll let the other guys tackle your second question there, Eric. I think what we see on a pretty consistent basis and actually is pretty close to what we had budgeted, our loan yield declines on a core base is about 2 basis points a month. So we're looking at about a 6 basis point per quarter decline in our core yield on our loan portfolio. So the yield curve hasn't been changing too much.

Where we normally play, the zero to five-year bucket, if we can get, as we think, consistent loan growth in the next four or five quarters like we have been getting in the past four or five quarters; it would seem to us that trend will likely continue, that 2 basis point or so month decline in the yield portfolio.

As far as the second part of your question, competition is pretty fierce in all areas of the loan types that you mentioned.

While I must say that the commercial real estate side, that's probably where you probably see a greater competition if for no other reason than that when you have commercial and industrial type of relationships you have the ability to enhance your income through other sources of revenue; through treasury sales, products, and things like that, that are able to go to supplement the interest rate.

And you have less of that with commercial real estate; it's more based on a pure rate and fee situation on the loan's books. But that being said, it's fairly fierce in all areas and from all sources competition.

Okay. Any color on again the loan yields? Like what were you seeing new product versus what's been rolling off?

I think, Erik, it's a difficult one to put in computations above and beyond what I've already indicated with the net decline.

Okay.

As you expect it depends on exactly what loan they are. The lines of credit tied to prime or LIBOR or are they five-year balloon fixed rate deals on commercial real estate or fully amortizing loans on equipment.

So it's kind of all over. But again I think if you look at our numbers if you look at the composition of our loan portfolio, you look at our pretty consistent net loan growth, how that's impacted our loan yield has been pretty consistent as well.

Okay thanks, Chuck. Appreciate that.

And this concludes our question-and-answer session. I would like to turn the conference back over to Mike Price for any closing remarks.

Thank you, Laura, and thank you all for your interest in our Company, and we look forward to talking with you again after year end. This ends the call.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.