Peoples Bancorp Inc (PEBO) 2015 Q2 法說會逐字稿

Good morning and welcome to Peoples Bancorp's conference call. Today's call will cover a discussion of results of operations for the quarter ending June 30, 2015.

(Operator Instructions)

This call is being recorded. If you object to the recording, please disconnect at this time.

Please be advised that the commentary in this call will contain projection or other forward-looking statements regarding Peoples future financial performance or future events. These statements are based on management's current expectations. The statements in this call, which are not historical fact, are forward-looking statements and involve a number of risks and uncertainties detailed in Peoples Securities and Exchange Commission filings. These include, but are not limited to, the success, impact, and timing of strategic initiatives, the successful completion and integration of acquisitions, the competition nature of a financial service industry, the interest rate environment, the effect of federal and/or state banking, insurance, and tax regulations, and changes in the economic conditions. Management believes these forward-looking statements made during this call are based on reasonable assumptions within the bounds of their knowledge of Peoples business and operations. However, it is possible actual results may differ materially from these projections. Peoples disclaims any responsibility to update these forward-looking statements after this call.

Peoples second quarter 2015 earnings release was issued this morning and is available at www.PeoplesBancorp.com. This call will include about 20 to 30 minutes of prepared commentary, followed by a question-and-answer session period which I will facilitate. An archived webcast will be available on PeoplesBancorp.com. Participants in today's call will be Chuck Sulerzyski, President and Chief Executive Officer; Ed Sloane, Chief Financial Officer and Treasurer; and each will be available for questions following the opening statements. Mr. Sulerzyski, you may begin your conference, sir.

Thank you, Frank. And good morning and thanks for joining us for a review of our second-quarter results. It's been a challenging quarter for our Company. Our core operating performance was below expectations. Revenue growth was negatively impacted by sluggish loan growth in the first half of the year. Insurance revenue has been flat and service charges on deposit accounts have been trending downward, similar to what the industry has been experiencing. Operating expenses were inflated in the second quarter, primarily due to increased activity in our core operations related to integrating our acquisitions. Excluding $1.1 million in non-core adjustments, operating expenses were inflated by approximately $1.5 million for the second quarter. The increase in these expenses was comprised mainly of marketing and professional service fees. These expense items are expected to be at much lower levels in the third and fourth quarters. We estimate that core operating expenses will normalize at a target quarterly run rate of approximately $26.5 million. We are confident in meeting our 65% efficiency goal in the second half of the year.

We are working at lowering staffing levels through attrition. Full-time equivalent employees reached a high of 847 immediately following the NB&T closing. FTE's declined steadily during the second quarter to 831 on June 30. We have exceeded our expense reduction goals for NB&T in the first half, and continue to identify staff reductions in other areas. As we stated in the first quarter, we remain committed to hitting our goal of 7% to 9% organic loan growth for the year. Excluding NB&T, loan balances increased $36.1 million, or 9% annualized, compared to the linked quarter. Commercial loans were up $21.9 million for a 10% annualized, while non-mortgage consumer loans increased $17.7 million or 38% annualized. Indirect auto lending increased $16.5 million, or 54% annualized this quarter, and continues to be a high-growth segment of our loan portfolio. Partially offsetting organic loan growth was a decline of approximately $15 million in NB&T loan balances. The NB&T runoff represents an opportunity to improve throughout the remainder of the year as the commercial pipeline continues to grow in this market area. The combination of lower expenses and accelerated loan growth in the second half of the year is expected to produce an efficiency ratio at our target of 65% for the third and fourth quarters.

Turning back to our second quarter results, net income for the quarter was $4.9 million or $0.27 per share. On an adjusted basis, net income was $5.8 million or $0.32 per share. Non-core adjustments totaled $1.2 million and included $732,000 in NB&T acquisition costs. We recorded approximately $10.2 million in acquisition costs related to NB&T so far this year, which is in line with our expectations. Acquisition costs for the third and fourth quarters should be minimal. As I mentioned earlier, revenue growth has been challenged, mainly due to minimal organic loan growth during the first half of the year, and continued low interest rate environment. While the second-quarter growth was a positive step forward, it will take accelerated growth for the remainder of the year to reach our year end growth goal. More specifically, we have generated $24 million in organic growth throughout the first half of the year. This means we will need to increase loan balances between $90 million and $110 million in the second half to reach our targeted 7% to 9% annual growth at year end. The key driver of second half loan growth will be the strength of our commercial loan pipeline. Our pipeline has increased over 24%, from $250 million last quarter to over $310 million at the end of the second quarter. Approximately $74 million of the pipeline has a high probability of closing within the next several months.

In addition, we have scheduled fundings of $106 million in commercial loans through the remainder of the year, of which $45 million is expected to fund in July alone. Partially offsetting these fundings are expected payoffs of $34 million. We are confident that the increased production coming from the new commercial team in our southwest Ohio franchise will further solidify results. Production levels from this team are expected to surpass original targets and will be a strong contributor in adding to our growth potential in the second half of the year. It has been a slow start to growing our fee-based business this year. Insurance revenue was down from the linked quarter due to performance based income, which is mostly recognized in the first quarter. Excluding performance based income, insurance revenue was flat compared to last year. We expect growth to remain somewhat muted for the remainder of 2015 reflecting a softer insurance market. Performance based income has been at a consistent level with 2014 and in line with our expectations.

However, some positive trends begin to take hold in the second quarter. Trust and investment revenue was up 24% from the linked quarter and 21% year to date. Excluding NB&T, trust and investment revenue experienced double-digit growth of 11% year to date compared to the same period last year. We also experienced growth in electronic banking income in mortgage banking during the same period. Moving to asset quality, delinquency trends continue to be strong. Second quarter net chargeoff as a percentage of loans with 10 basis points annualized and seven basis points for the year-to-date period. Last year the chargeoff rate was 4 basis points annualized through the first six months. These chargeoff levels continue to represent top quartile performance in our peer group. Nonperforming assets increased during the quarter to 1.25% of loans plus REO, due to a single C&I relationship being placed on nonaccrual. Still, this ratio remains strong relative to our peers.

Criticized loans decreased due to an $8.4 million commercial real estate loan being upgraded, which subsequentially paid off in early July. The allowance for loan losses as a percentage of loans dropped to 1.42% in the second quarter, from 1.48% in the linked quarter. The ratio excludes the acquired loan balances. A significant factor driving the decline in this ratio is our historic chargeoff experience, which has been consistently low for the past several years. Revenue growth has been slow to materialize this year. However loan production levels have improved through the first part of the year. And we remain confident that we will get back on track in the second half of the year. Fee-based income growth will come mainly from trust and investment income in the second half. We also expect increased activity from our commercial loan swap and SBA programs. I will now turn the called to Ed to provide more color around the margin and balance sheet activities.

Thanks, Chuck. Net interest margin was stable at 3.46% in the second quarter compared to the linked quarter and up from 3.39% in the second quarter last year. The core margin, which excludes net accretion income, was 3.31% compared to 3.28% last quarter, an expansion of 3 basis points. The margin improvement in the second quarter was the result of an 8 basis point reduction in the cost of interest bearing liabilities, while earning asset yields remained relatively stable. NB&T's balance sheet contributed to the margin improvement with its relatively low cost of funds, as did the continued growth in the non interest bearing DDA which now comprises 27% of total deposits. Three years ago, non interest bearing DDA to deposits was below 20%. Our margin and net interest income growth fell short of expectations in the first half of the year, due primarily to the lack of loan growth. In addition, excess seasonal cash on the balance sheet early in the year, and the higher cash balances acquired from NB&T, placed added pressure on the margin.

As we move into the second half of the year we remain confident we can gain some critical ground lost from the first six months. Chuck discussed earlier our strong commercial loan pipeline and fundings to be recognized through the remainder of 2015. We expect to recapture most, if not all, the growth lost earlier this year thus positively positioning the portfolio and net interest income for 2016. Other balance sheet strategies we are working on early in the third quarter include reducing excess cash by $50 million and putting it to work in the securities portfolio. As loan balances build throughout the third and fourth quarters, we plan to begin lowering investment balances through normal monthly cash flow. In addition, we will take advantage of excess parent compensate liquidity to pay off the term loan with a remaining balance of $12 million. This debt accrues interest at a fixed rate of 3.5% and is scheduled to mature in 2018. There are no prepayment penalties associated with the debt.

The combination of the loan and securities growth in the second half of the year, offset by a reduction in cash, is expected to add approximately $25 million to our average earning asset base in the third quarter, and another $25 million in the fourth quarter. The incremental growth in debt payoff is expected to reposition the net interest margin into the low 350s. Accretion income added 15 basis points to the margin in the second quarter compared to 18 basis points in the first. Year to date accretion income added 17 basis points to the margin, compared to 7 basis points for the same period last year. Assuming NB&T and other acquired bank loan portfolios continue to perform as expected, accretion income should be in the 12 to 15 basis point range throughout the remainder of the year.

Turning now to acquisitions. We continue to direct our attention toward potential insurance and investment opportunities. After adding NB&T, our fee-based income to revenue declined to 32% from 35% last year. We're targeting a mix of fee income to revenue of 35% to 40%. Acquisitions, combined with organic growth, are expected to lead us back to within this target range. We recently closed a small insurance transaction in the southwest Ohio region which is within our NB&T market area. The deal is expected to add approximately $425,000 annually to our existing insurance revenue base of $14 million. And contribute approximately 25% of its revenue to the bottom line. We continue to have meaningful discussions with other prospects and remain optimistic we'll bring other deals to the finish line in the coming quarters.

Regarding bank acquisitions we do not anticipate doing a deal this year, but hope to be active in 2016 when earnings are restored to the appropriate level. In the interim we will continue to maintain an active prospect list and explore new opportunities. Our M&A strategy remains the same. We'll focus on filling in our existing markets in Ohio, West Virginia, and Kentucky and evaluating opportunities to expand our presence in Ohio. We'll also look at extending our Kentucky footprint into the Louisville and Lexington areas. Regarding the NB&T integration, we continue to make meaningful progress with this acquisition. Chuck commented earlier that we have exceeded our cost savings expectations. Several other key initiatives are moving along as well. NB&T's commercial loan pipeline has grown from approximately $20 million, prior to the closing, to $63 million today. The post integration operating environment has stabilized and our new associates are becoming more efficient with work flows and processes. Finally, the NB&T retail team is in process of adopting our corporate wide branch staffing model and making adjustments through attrition. I'll now turn the call back to Chuck for his final comments.

Thanks, Ed. At the midpoint it's clear we have seen our share of challenges this year. Better days are ahead as we focus our attention on improving performance in the second half and starting 2016 in a strong position. To recap our guidance for 2015, we remain confident in our ability to accelerate loan growth in the second half of the year and achieve a 7% to 9% annualized growth goal by year end. We anticipate this growth to be spread evenly through the remainder of the year. Net-interest margin is expected to stabilize in the low 350s for the remainder of the year. Purchase accounting adjustments and related accretion income may cause variations in the margin quarter to quarter. Ed discussed key strategies initiated earlier in the third quarter to improve the core margin. These strategies, coupled with loan growth, are expected to improve core margin by 6 basis points to 7 basis points in the third quarter. The efficiency ratio is expected to be at 65% in the third and fourth quarters.

I discussed earlier a quarterly core expense run rate of $26.5 million. The net chargeoff rate is expected to range from 20 basis points to 30 basis points for the year. While this is a more normalized level for us moving forward, we've experienced much better results for the last several quarters. Our effective tax rate is estimated to range between 30% and 31% for the year. We remain committed to profitable growth for the Company and building long-term shareholder value. I am confident we will succeed through disciplined execution of our strategies and providing extraordinary service to our customers and communities. While we are disappointed in the quarter, we remain optimistic on many fronts, including our growing commercial pipeline, adding checking accounts, building relationships with our clients, and most of all, the strong fundamentals of our Company. In the coming quarters, the power of what we do, and how we do it will come through.

This concludes our commentary. And we will open the call for questions. Once again, this is Chuck Sulerzyski, and joining me for the Q&A session is Ed Sloane, Chief Financial Officer. I will now turn the call back to the hands of our call facilitator.

(Operator Instructions)

Scott Siefers, Sandler O'Neill.

Good morning, guys. Chuck, was hoping you could follow up on your comments you made about the runoff in some loans at the NB franchise. Was that expected? And is that -- do you feel like it's done? Or could there be more to come? Was that mostly residential? I think that's the only line that was not up quarter to quarter on an end of period base. I guess any color there on the NB stuff.

And more broadly I'm curious to get your thoughts on whether the revenue side -- is that coming -- I guess the pressured revenues, is that more from the acquired franchises not kind of pulling their weight the way you would have hoped, or has there been slowdown at the legacy Peoples franchise? As you see the numbers internally how are you thinking about those dynamics?

First comment on the loan balances related to NB&T, when the deal was closed, the loan balances were about $20 million less than when the deal was announced and have continued to decline since that point in time. We think we have hit the bottom of that. It is a combination of commercial and real estate -- residential real estate. When you look at the commercial business, it is an unfortunate collection of businesses being sold. It's not like we lost. We did lose some accounts to competitors. And we did have some credits that we were not interested in that we knew before the deal. But there was just an odd collection of businesses being sold and things of that nature that happens from time to time. That being said, I like the pipeline and I like the talent that we've acquired and I like the talent that we've added, and whether it's this quarter or the next quarter after that, I am sure that we will start to grow there.

In terms of the earnings pressure that we have been facing, it is both in the acquisitions and in the core. I mentioned the decline in the NB&T loans. That obviously has hurt us. But we have not been as effective as I would like us to be growing our core loans, particularly on the commercial side. That being said, we are very excited about the pipeline. We have several meaningful relationships we expect to close and fund shortly. We still believe in that 7% to 9% loan growth. We have a pipeline commitments that will get us there. But we do have to get there.

Talking about the non-margin businesses, we in the core have experienced a slowdown in our insurance business. That is indicative of the market, and in insurance you have long cycles of hard and soft markets where prices are either moving up or down. And that will continue to impact us. But we're committed to the insurance business. We just did a little acquisition. And we're starting to get those insurance capabilities put out in the new markets that we acquired and that makes us optimistic for the future. And as Ed indicated in his comments, we've had good trust and investment results and continue that -- expect that to continue both in the core, but also in the acquired area. NB&T had trust business. We're adding more 401K retirement plan capabilities to them and I expect to see that business continue to do well.

Okay. That's helpful. Thank you. And then just one or two other questions. So Ed, you had given the margins some nuance, I just want to make sure the low 350s for the remainder of the year. That's all-in margin expectation, right? It includes the benefit of the [TAAs] and includes the benefit of favorable remixing within the balance sheet, and some of the other restructuring actions that you had discussed as well. Is that correct that the low 350s is all-in expectations?

Yes, that is correct.

Okay, perfect. And in the aggregate. I think just sort of looking at the revenue number that you'll have to get to based on the expense guidance. I mean, it's a very considerable jump versus the run rate. In your mind, is that all loan driven? How much will come from kind of beefing up the securities portfolio as well? And outside of the trust and investment piece, are there other fee-based revenues that we'll be able to advance meaningfully from this quarter's run rate?

Yes. Start with the margin side of it, Scott. Securities portfolio we're looking at adding about $50 million, as a matter of fact, we've already done it. Added about $50 million to that portfolio. And so we completely reduced the level of cash, the excess cash that we had on the balance sheet. And put it to work right away in around 2.5% range. Didn't really change the duration of the securities portfolio. And stayed very much within the types of securities, the CMO types of securities, agency CMOs, that we've been doing. So no real change in the overall profile of the investment portfolio around that. So right away we did that.

I also mentioned the parent company debt that we're in the process of removing now that will take a 3.5% fixed rate debt off that side and bring the cost of funds down to a degree. So there's some positives there. We've been trying to get that excess seasonal cash out during the first half of the year. And it's just been slow to move. And without the loan growth that we had anticipated in the first half of the year, our best option was to go in and invest that. So that should help to improve the core margin. I think we're sitting at low 330s in core net interest margin. That should take it up into the -- around 336, 337 I would expect in the second half of the year. And then add on to that the accretion income.

On the fee based side, it's really been, like Chuck said, trust and investment income has been pretty strong for us. We've seen reductions in our service charge levels, I had made the comment in the comments that the industry has been trending downward in that area. We've actually seen that trend ourselves. Our expectation was with our DDA growth that we would actually see more -- the more service charge income this year versus last year comparing organically. That hasn't transpired, as a matter of fact, we've seen reduction in overdraft NSF-type fees, those types of things. One of the things we are anticipating as we move through to the third quarter is an increase in SBA activity, and swap fee income from our commercial program. And that should help to drive some of the increase in the fee-based numbers in the third quarter. So I think that's something that we're looking forward to. Hopefully, that gave you some color around it.

It does, it does, thank you. And final question, Chuck, in your guidance you suggested 20 to 30 basis points of chargeoffs. Was that for the full year or for the second half? I just want to make sure I heard correctly. If it's full year it would imply a real ramp up, but if it's second half it's more normalization. Any clarification would be helpful.

I'll take that one, Scott. We've been providing that type of guidance around the 20 to 30 basis points during the course of the year, this probably stems back to last year. And that represents a more normalized level. As I indicated in the comments, we've seen a much, much lower level than that. And actually our core allowances come down to some degree if you take a look at it; 1.48% to 1.42%. And I think everything is trending for a lower level of net chargeoffs. Our view is to still try to provide a more normalized type level. And try to be conservative with our number.

That sounds good then, all right, thank you very much.

Thank you.

Michael Perito, KBW.

Good morning, guys.

Hi, Mike.

Good morning, Mike.

Maybe start on the capital. The comment that the bank M&A is likely more of a 16 event than 15. You still have plenty of capital today. Given kind of the trajectory of your stock, is there any internal discussions about maybe repurchasing some shares or any buyback or anything, especially if you're confident in hitting the efficiency target by year end?

At this point in time we don't see ourselves buying stock. Obviously, we've got a disappointing quarter here and at some level we would look at that as an option. Our belief and hope is that you have to see more normalized quarters in the third and fourth quarters. We're a $3.2 billion bank, from my perspective anything less than $8 million a quarter is a disappointment. And we've got to be putting real numbers on the board. And when we do, the currency will come back. We would like to, in the interim, do some insurance acquisitions, do some investment acquisitions. We have a great deal of belief in what we're doing and would like to put the capital to work in acquisitions down the road when the currency is a little stronger.

Okay. And thank you. And then I guess staying on the same topic, if we move to the back half of the year and you hit your 65% target, is there anything else that you would want to see or any particular level in terms of currency where you would become more comfortable progressing with bank M&A next year? Any specifics around your thoughts there would be helpful. Thanks.

We've felt like the stock has got to be in the high 20s for us to be looking at more deals. And we just got to drive the earnings and multiple come and when we get the powder back we'll use it. We're probably going to get, or we are getting slaughtered today. And giving shares out at this price in a deal makes no sense.

All right. Thank you.

Daniel Cardenas, Raymond James & Associates.

Yes, good morning.

Hey, Dan.

Hi, Dan.

Just quickly a quick housekeeping question. Could you run through the status of the pipeline again. I missed some of the numbers as you were giving them out.

Sure. Pipeline-- the commercial pipeline as it stood at the end of June, actually, we had about $250 million in the pipeline at the end of the first quarter. And that increased to approximately $310 million in the -- at the end of the second. And fundings that are expected to occur in the second half of the year, and net of expected payoffs are around $70 million, $74 million, $75 million.

Okay. And then as you look at these payoffs. Are they coming more from the legacy market or coming more from NB&T?

No. They're more from the legacy market. And they're not abnormal. You know what I mean? You've got customers doing different things and you know you're going to lose deals. It's the normal flow of business. We just prefer to give both numbers.

Perfect, appreciate that. And on the credit quality side, the jump in the non accruals, was that a watch list credit that popped up?

Yes.

And what type of industry was this in? Or was it over multiple industries?

It's multiple -- they're involved in multiple things. Some shipping, some energy stuff, and we are -- it's a situation that we're watching very closely. But we think we have it properly reserved. We've been pretty good the last four years in terms of working through difficult credits and we've got a lot of confidence in what we're doing.

And you guys took a charge on the credit this quarter?

No.

No?

No. We have the specific reserve against the credit. But again I'm hopeful that the situation resolves itself this year in a positive way.

Either through them fixing it or selling?

Yes, yes.

Okay. All right. And then as we think about provisioning in the back half of the year, should we view that more to accommodate growth?

Yes, yes. I would say that's correct. I think the other thing around that, Dan, to keep in mind is that we can continue to see a reduction in our net chargeoff. Our historic net chargeoff rate. And the fact that our net chargeoffs have been low for the past several quarters is allowing us to take some of that loan growth pressure off the reserve. So there could be a bit of offset around it. But yes, loan growth is definitely a factor in the equation.

I'll step back for right now.

Pardon me?

I said I'll step back for right now, thank you.

Thanks, Dan.

(Operator Instructions)

Scott Berry, Boenning and Scattergood.

Good morning, guys. Most of my questions have been answered already. But just looking at the period end deposits, looks like you had decreases in the total balances, mostly in retail fees, from what I'm looking at. Do you expect to continue to try and run down the CD balances a little bit or how should we be looking at the deposits?

The deposit base is very strong. We have a high percentage of non interest bearing DDA. I think that's 27%. The deposit costs have come down. So we continue to put a lot of emphasis on deposits. We continue to gather the deposits despite this quarter results. And I actually -- anxious to see what happens when rates go up because I think we've got a fair amount of stability. And actually deposits in our NB&T franchise have increased like $40 million since we've gotten it. We feel pretty good about it.

As I mentioned earlier, Scott, about non interest bearing DDA increasing as much as it has, sitting at 27% of our total deposit base. We continue to see that build. Net DDA account growth, excluding NB&T, has been 3.5% to 4%, if not higher than that, over the past several quarters. So that's a strong number for us.

Thanks. That's helpful. And one other quick question and I might have missed this. You were talking about the loans that ran off from NB&T about $15 million. Where was that concentrated mostly?

Where from a geographic standpoint?

What categories.

I'm sorry. It was pretty much spread evenly between commercial loans and residential consumer loans.

Okay. Thank you. That's all I have right now. Thanks.

Thank you, Scott.

Eric Grubelich, bank investor.

Just a follow-up on that problem credit, what was the approximate size of that? Are you the only bank lender involved and your classified -- what were your classified totals linked quarter? Did they change much?

We are the only borrower involved with the credit at this point in time. The size of the loan right now is, I believe, about $13 million.

Is that net of any chargeoff you've taken?

We've not taken chargeoff. We have a specific reserve against it totaling $3.7 million.

$3.3 million.

Sorry, I heard you say about the reserve before. And on the classified balances quarter to quarter?

Folks are digging for that now.

Okay.

Give us a second.

Give us a couple minutes on that. I can tell you we did see a reduction in our classified balances as we upgraded a credit there. And I think we commented on that. I think it went from 1.48 to 1.42 but I don't know the dollar amount off the top of my head.

Can we get back to you on that.

That's fine, that's fine. And on the expense side, looks like the sell-side community maybe had some guidance that wasn't exact on this quarter with that run rate. Was that solely attributable to the starting balances of NB&T? Or is there something else that wasn't right there?

On the expense side?

Yes.

No. We're-- done well with our NB&T expenses in terms of making our reductions in the time frame that we wanted to. We had some legal costs. We had some medical costs. We had some marketing costs. And we expect that to go down dramatically. We have historically not given out specific guidance around the expense level. But thought in -- given the current situation, we wanted to let folks know what we were shooting for in the third quarter.

I appreciate you making that very clear about where you hope the efficiently ratio is going to be. Two components to get to the number. Just wanted to double check that. Thanks very much, Chuck.

Thank you.

Michael Perito, KBW.

Quick follow-up on the margin. Ed, you've kind of mapped out how you get to the 337 core margin next quarter. Can you just remind us if we do see some form of movement on the short end of the rate curve in the back half of the year how immediate you expect any benefit to be to your core margin?

Very well positioned for short-term rate increase, Mike. It's something we've been hoping for, like a lot of the banking industry, for quite some time now. I think we're well positioned. We're not planning on changing our position. And I think the flip side to that is when you take a look at the longer end of the curve, where the 10-year is situated right now, is we're well positioned for that. It would take a fairly meaningful drop in the 10-year and the flattening of the curve to have an adverse impact on both the investment portfolio and loan portfolio.

Is there any rate assumptions embedded in this. I forget when you guys initially put the [guides in] 65% efficiency target. So obviously next quarter you guys have told us 337, 338 margin. Is there any additional expansion assumed in the fourth quarter from higher rates to hit that target?

No, no, not at all. We believe through good balance-sheet management. Some of the things I talked about earlier, along with the loan growth should help to drive that improvement. But to be clear, we would appreciate the break if that happens.

Okay, great. Thanks, guys. I appreciate it.

At this time there are no further questions. Sir, do you have any closing remarks.

Yes, I want to thank everyone for participating. Please remember that our earnings release and webcast for this call will be archived on Peoplesbancorp.com under investment relations. Thank you for your time and have a great day.

The conference is now concluded. You may now hang up. Thank you.