Peoples Bancorp Inc (PEBO) 2018 Q1 法說會逐字稿

Good morning, and welcome to the Peoples Bancorp Conference Call. My name is Nicole, and I will be your conference facilitator today. Today's call will cover a discussion of the results of operations for the quarterly period ended March 31, 2018. (Operator Instructions) This call is also being recorded. If you object to the recording, please disconnect at this time.

Please be advised that the commentary in this call will contain projections 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 facts, 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 the implementation of Peoples' business strategies; including the successful integration of acquisitions and the expansion of consumer lending activity; the ability to integrate acquisitions, including the merger with ASB Financial Corp.; the competitive nature of the financial services industry; changes in the interest rate environment; uncertainty regarding the nature, timing, cost and effects of federal and/or state banking, insurance and tax legislation; legislative or regulatory changes or actions; changes in policy and other regulatory and legal developments accompanying the current presidential administration, including the recently enacted Tax Cuts and Jobs Act; and uncertainty or speculation pending the enactment of such changes; uncertainties in Peoples' preliminary review of and additional analysis of the impact of the Tax Cuts and Jobs Act, and the changes in economic conditions and/or activities.

Management believes that 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 forward-looking statements. Peoples disclaims any responsibility to update these forward-looking statements after this call, except as may be required by applicable legal requirements.

Peoples' first quarter 2018 earnings release was issued this morning and is available at peoplesbancorp.com under the Investor Relations tab.

A reconciliation of the non-GAAP financial measures discussed during this call to the most directly comparable GAAP financial measures is included at the end of the earnings release. This call will include about 15 to 20 minutes of prepared commentary, followed by a question and answer period, which I will facilitate.

An archived webcast of this call will be available on peoplesbancorp.com in the Investor Relations section for 1 year.

Participants in today's call will be Chuck Sulerzyski, President and Chief Executive Officer; and John Rogers, Chief Financial Officer and Treasurer, and each will be available for questions following opening statements.

Mr. Sulerzyski, you may begin your conference.

Thank you, Nicole. Good morning. Thank you for joining us for a review of our first quarter 2018 results. Earlier this morning, we reported another quarter of record net income.

Our quarterly net income was $11.7 million or $0.64 per diluted share. This compares to $9 million or $0.49 per diluted share in the fourth quarter of 2017 and $8.8 million or $0.48 per diluted share in the first quarter of 2017.

Some of the highlights for the quarter include positive operating leverage with revenue growth of 10% compared to the first quarter of 2017, and expense growth of 3%.

Pre-provision net revenue to total average assets of 1.81% and annualized loan growth of 8%. There was only one low light in the quarter, which was an $827,000 charge off on 1 acquired commercial loan relationship.

We continually focus on growing revenue faster than expenses. The results of this focus has been our ability to generate positive operating leverage, 10 of the last 11 quarters. Over the last 11 quarters, revenue growth has averaged 12% while expense growth has averaged 1%. In the last 8 quarters, which are those not impacted by an acquisition, revenue growth averaged 6% while expenses were stable. The revenue growth of 10% for this quarter does reflect 2 onetime items that John will discuss later.

But even if we had not received the benefit of those items, we would have still generated revenue growth of 8% and positive operating leverage of 5%.

Total noninterest expense grew 3% compared to the fourth quarter of 2017. The growth was largely attributable to an increase in salaries and employee benefit cost, which reflected annual merit increases in higher stock-based compensation. Part of the merit increase included an increase in the minimum hourly rate for hourly employees of our company.

We have made a commitment to increase hourly rate periodically over the next couple of years so that we will be at a minimum hourly rate of $15 by January 2020.

Included in the stock-based compensation was $388,000 related to a onetime stock award. The Board of Directors authorized a grant of unrestricted common shares to all full-time and part-time employees who did not already participate in the company's equity plan. These increases were partially offset by reduced professional fees.

Both the increase in the minimum hourly rate and the board stock award were implemented to share some of the benefit of tax reform with our employees. The shareholders also benefited during the year with increases in the quarterly dividend.

Our efficiency ratio for the first quarter of 2018 was 61.8% compared to 62.1% during the fourth quarter of 2017 and was in line with our target for the year.

Our only non-core expenses during the first quarter of 2018 were $149,000 of acquisition costs, which were related to the ASB transaction. We closed the ASB transaction and converted their accounts to our system on April 13, 2018.

The transaction provides us with contiguous locations to our existing footprint in the Ashland, Kentucky and Huntington, West Virginia markets and serves as the connection between our Southeast and Southwest Ohio offices.

As part of our acquisition, we obtained a profitable mortgage origination business and we are optimistic about the added revenue and capabilities as a model for future growth throughout our franchise. We are excited about the capabilities that are now available to our new clients who have joined us through the ASB transaction.

Loan growth for the quarter was healthy. During the first quarter, we saw period-end loan balances grow at an 8% annualized rate compared to December 31, 2017.

Commercial loans provided most of the increase again this quarter as we continued to see slower indirect consumer lending growth. Commercial and industrial loan balances were $17 million or 14% annualized while commercial real estate loans grew $16 million or 7% annualized.

Total consumer loan balances at March 31, 2018 grew 5% annualized compared to December 31, 2017, with growth of $7 million or 8% annualized in indirect consumer lending. Quarterly average loan balances increased $35 million or 6% annualized compared to the fourth quarter of 2017. Commercial loans provided $38 million of the growth.

Moving to asset quality. While certain of our metrics did not improve, we do believe that we continue to maintain strong metrics. Overall, we consider the movement to be normal ebbs and flows of the business and they are more one-off situations than systematic -- than systemic.

As we have previously discussed, we have a number of quarters of consistent improvement in our metrics. Provision for loan losses increased compared to the fourth quarter of 2017. The increase was due primarily to circumstances that decreased the likelihood of the collectability for one acquired commercial loan relationship, which was ultimately charged off in the amount of $827,000.

The net charge-off rate for the first quarter was 34 basis points. We do not anticipate a charge off of this magnitude in the foreseeable quarters. Also contributing to the increase in provision for loan losses was loan growth, which was partially offset by improvements in certain asset quality metrics.

Nonperforming assets and the associated ratios at March 31, 2018 decreased compared to December 31, 2017. We continue to actively seek to reduce our nonperforming asset levels as evidenced by the continued reduction in the last 5 quarters.

At March 31, 2018, criticized loans increased $26 million compared to December 31, 2017, while classified loans decreased $2 million. The increase in criticized loans was mostly due to one large commercial loan relationship that was downgraded during the quarter.

Delinquencies trends improved slightly during the first quarter as approximately 98.8% of our portfolio was considered current at March 31, 2018, compared to 98.6% at both December 31, 2017 and March 31, 2017.

I will now turn the call over to John to provide additional details around net interest income and margin, fee-based income and balance sheet and capital activities.

Thanks, Chuck. As Chuck noted, our revenue growth was strong for the quarter as we reported an increase of 10% compared to the first quarter of 2017.

Net interest income was up slightly compared to the fourth quarter of 2017. The first quarter net interest income benefited from a growing balance sheet and improving rates, with both items being muted by 2 fewer days in the quarter.

The quarter was aided by proceeds of $341,000 that were received on investment security for which we had previously recorded an other than temporary impairment.

Net interest income grew 9% compared to the first quarter of 2017. Again, loan growth has provided much of the increase compared to the prior year, coupled with the rise in interest rates during 2017.

Net interest margin increased 3 basis points to 3.66% during the first quarter of 2017 compared to the fourth quarter of 2017.

The proceeds on the investment security for which we had previously recorded an other than temporary impairment added 4 basis points to the net interest margin during the quarter.

Additionally, the benefit of tax-free securities was reduced due to the tax law changes and had a negative impact on net interest margin of 2 basis points.

Compared to the first quarter of 2017, net interest margin expanded 11 basis points. Higher investment and loan yields outpaced increases in deposit and short-term funding cost.

Accretion income from acquisitions, which is net of amortization expense, declined $149,000 compared to the fourth quarter and was down $263,000 compared to the first quarter of 2017.

Accretion income added 7 basis points to the net interest margin during the first quarter, 8 basis points during the fourth quarter of 2017 and 11 basis points in the first quarter of 2017.

Compared to the fourth quarter of 2017, fee-based income grew 14%. This increase was largely due to growth in insurance income, the increase in the market value of equity securities and gains on sale of Small Business Administration or SBA loans.

The increase in insurance income was largely due to annual performance-based insurance commissions that are primarily received in the first quarter each year and is a core component of our insurance income.

During the first quarter, we received the benefit of $460,000 from the fluctuations in the market value of equity investment securities, which beginning January 1, 2018 flows through the other -- flows through other income. This new accounting treatment may create volatility in earnings while we hold these securities.

Previously, the market fluctuations in equity investment securities were included in shareholders equity on the balance sheet until the market value is realized in connection with the sale of such securities.

In 2018, we've expanded our focus and have an initiative to generate revenues through the sale of newly originated SBA loans. During the first quarter, we recorded SBA revenue of $313,000, which is largely gain on the sale of SBA loans and expect that we will continue to see this revenue stream throughout 2018 but to a slightly lesser extent.

Compared to the first quarter of 2017, fee-based income grew 12%. This was driven by higher insurance income, the increase in market value of equity investment securities, trust in investment income and gains on sales of SBA loans. The increases were offset by a reduction in commercial loan swap fees, which is a function of customer demand. The increase in insurance income compared to the first quarter of 2017 was due primarily to the implementation of a new accounting standard related to revenue recognition as well as growth in our property and casualty commissions. The implementation of the new revenue recognition standard will create some volatility in our insurance income on a quarterly basis, however, it should not be material. The increase in trust and investment income was due to increases in assets under administration and management, which benefited from improvements in the market.

As it relates to the balance sheet, our investment securities portfolio remained at 24% of total assets at March 31, 2018. The yield on our investment portfolio increased 15 basis points compared to the fourth quarter. This increase was mainly due to the recognition of proceeds on the investment security for which we have previously recorded an other than temporary impairment.

Our core deposits, which exclude $490 million of CDs were up 4% compared to both December 31, 2017 and March 31, 2017.

Our period-end total deposits grew $83 million or 3% compared to December 31, 2017, which was driven by an increase in governmental deposits. We typically see increases in these balances during the first quarter of each year. Compared to March 31, 2017, period-end total deposits increased $111 million or 4%.

Our average total deposits were flat compared to the fourth quarter of 2017 and were up $133 million or 5% compared to March 31, 2017.

Total demand deposits comprised 41% of total deposits at March 31, 2017 compared to 42% at December 31, 2017, and 40% at March 31, 2017.

Our stockholders' equity continued to be a source of strength. However, it did decrease compared to December 31, 2017 due largely to reduction in the value of our available-for-sale investment securities portfolio, given the rise in longer-term rates during the quarter.

This reduction was partially offset by an increase in retained earnings due to net income exceeding dividends.

Our tangible equity to tangible asset ratio declined 17 basis points compared to December 31, 2017 and 1 basis point compared to March 31, 2017. Our tangible book value per common share increased 5% compared to March 31, 2017.

We make it a priority to maintain healthy capital ratios exceeding well-capitalized status. Our common equity Tier 1 capital ratio was 13.3% at March 31, 2018, while our Tier 1 capital ratio was 13.6% and our total risk-based capital ratio was 14.3%. The slight increase in our capital ratios compared to December 31, 2017 was largely due to growth in net income, partially offset by growth in our risk-weighted assets.

This morning, we announced another increase to our quarterly dividend, which is now at $0.28 per share. We believe in a strong return for our shareholders and this dividend rate represents a payout of 44% of earnings per share from the first quarter. This increase to our dividend is a result of continued improvement in our before tax and after-tax performance.

I will now turn the call back to Chuck for his final comments.

Thanks, John. We have started off 2018 strong. First quarter included several positives. Our return on average assets was 1.32%; our return on average stockholder equity was 10.48%; our return on average tangible stockholder equity was 16.14%. All of which are the highest reported since the first quarter of 2012 when earnings were driven by high levels of loan recoveries.

Our pre-provision net revenue to total average asset ratio was 1.81%. This is the best we have performed as it relates to this ratio since the third quarter of 2010.

Our loan growth was 8% annualized and our nonperforming assets declined to 72 basis points of total loans in OREO.

We continue to work hard at improving our core business. We have received, as have other banks, benefits from the tax reform legislation. However, our income before income taxes was up 12% compared to the first quarter of 2012.

I believe our dedication has paid off and is evident in our results. This is just the beginning and we are not yet satisfied.

While we are pleased with our results, we will continue to maintain our focus and our momentum as we progress throughout 2018. With that in mind, here are our thoughts around 2018, which excludes the anticipated benefit of the ASB acquisition.

We expect point-to-point loan growth of 5% to 7%. We expect credit costs for the remainder of the year to be elevated from the prior year but well below the provision from the first quarter of 2018.

We believe net interest margin will be in the mid-360s, fee-based revenue growth is expected to be between 2% and 4%. We expect noninterest expense growth to be between 2% and 4%. Our efficiency ratio will be between 60% and 62%. And we anticipate our effective tax rate to be approximately 19%.

These expectations are in line with the guidance we issued during our previous earnings call and include an updated net interest margin and efficiency ratio.

We still believe the ASB deal will be accretive to earnings by approximately $0.06 to $0.07 in 2018 and $0.13 to $0.15 in 2019, excluding onetime acquisition costs.

We currently anticipate onetime acquisition costs to be approximately $8.2 million in 2018.

The majority of the onetime acquisition costs will be recognized during the second quarter of 2018, which we estimate to be between $7.5 million and $8 million.

We are encouraged by the early sales activity we have seen within the acquired company. Already, we have commitments of over $20 million of commercial opportunities and the branches are showing early signs of both investment and insurance referrals.

We are still focused on organic growth as well as acquisitions and are working to ensure the ASB integration is a success, which is our key priority for the second quarter of 2018.

This concludes our commentary, and we will open the call for questions.

Once again, this is Chuck Sulerzyski; and joining me for Q&A session is John Rogers, Chief Financial Officer.

I will now turn the call back to the hands of our call facilitator, Nicole.

(Operator Instructions) Our first question comes from Scott Siefers of Sandler O'Neill.

Chuck or John, you guys bumped up the margin guidance by, I guess, sort of mid-single-digits range. I think you were at [364] now saying [mid-360s.] John maybe, can you just walk through the main puts and takes, you see? I imagine that's all, the delta is sort of core margin as opposed to any change in anticipated purchase accounting benefits. But is it lower deposit betas than you would think or have you conversely baked in additional rate increases that you didn't have? What are the major nuances in there?

Yes, Scott. I would say there is no changes to the accretion assumptions that we've put in there. We did have slightly higher payoffs of both some acquired assets in the first quarter which drove down that income but we didn't really play with our assumptions on that. I'd say from a core perspective, yes, we baked in additional -- we did not have in our initial guidance a March increase and we didn't -- we only really had the one for the year so we've baked in now we got March and we've baked in another one. And at least so that's going to help us there. And LIBOR has benefited us as well. We have a pretty much strong LIBOR-based commercial book and that increase in LIBOR has helped as well. So that's kind of how we got there and based upon the performance that we had in the first quarter, looking out, we're comfortable with that new guidance.

Okay, perfect. And then I think that's probably just the main driver of the slightly improved efficiency ratio, right. Just a better revenue dynamic driven by the margin?

Correct. And we think our core expenses are good. We had the employee stock award. We have HSA contributions. We did not really pull that out, it kind of happens every year but it's in earnings release. That's another $400,000 plus of expenses as well. We had a few acquisition costs in the quarter, which we don't include in there as well.

Yes, okay. Perfect and then, maybe Chuck, just your thoughts on the M&A environment as you see it, some banks have at least alluded to maybe more willing sellers out there, even though we've had a little bit of air pockets in M&A recently. What -- what are your updated thoughts?

Well, we're having conversations both with banks and nonbanks. I can't say it's dramatically more than it has been but it is active. So I'm optimistic that we'll see opportunities in this calendar year.

Our next question comes from Kevin Reevey of D.A. Davidson.

Chuck or John, I was wondering if you could give us some color on the strong commercial loan growth in the quarter. It's probably the strongest we've seen from at least the banks that I cover.

Well, we remain optimistic. As I've said in the past, most of our business comes from taking clients away from larger national and regional competitors that may not spend the attention on a $5 million, $10 million, $15 million credit that we do. I mean for us that's a red carpet, the wine bottle and more. So I think that those clients are increasingly ignored in opportunities for us. I'm also optimistic going forward. We're seeing lots of opportunities off of the ASB acquisition and as I mentioned in the script, $20 million so far and it's the first week. We've obviously been working on it for a few weeks.

We also see some indication in Northern -- northeastern parts of Ohio, people making more investments, perhaps related to tax reform. And that's helping the pipeline in that geography, maybe 10% or 15% of the pipeline, may be from extra investment. So all in all, we see it as a good climate. And just going to keep trying to roll one quarter after another. I would say we gave loan guidance, we didn't change our loan guidance from 5% to 7%. I would be inclined to increase that but I wanted to see another quarter. I'm optimistic that at a minimum, that we can be towards the higher part of that range.

And Chuck, did you see an increase in line utilization on a linked quarter basis?

Give me a second here. We had a little phone logistics here. We were a few minutes late to the call, we had to move location. So I'm a little out of sorts. Yes, line utilization was up a little bit, 53% at the end of March versus call it 52% at the end of December. So not a whole lot of a difference but some difference.

And then lastly, in your prepared remarks in the press release, you talked about new pricing that was been -- it's been implemented in your indirect consumer, which was largely responsible for the softness this quarter. Could you give us a little more color on the pricing?

Yes, I mean we -- to me indirect is a math game, you've got to keep your risk-adjusted margin and -- as rates and cost of deposits have -- funding has increased, we have moved the rate accordingly. We've also seen some competitive pressures from banks, one large national player has eliminated the restriction on what they give back to the -- what they give back to the dealers and another large regional bank is running an incentive right now to, in effect, buy business. And we've -- and both of those have elected not to follow. So it's a combination of our pricing and it's a combination of a more competitive environment.

Our next question comes from Michael Perito of KBW.

Had a few more questions. I wanted to spend a little time just to make sure I had my head around the noninterest expense and noninterest income because it did seem like as you mentioned in the prepared remarks, there were a few items not necessariliy that they weren't recurring or non-core but maybe annually recurring or just unusual items, I guess. So I guess starting on the fees, if we think about kind of a starting point off -- in 2Q to add ASB fees into, it is around like the $13 million, $13.1 million range when you account for the normalized insurance revenues a fair place? Or is there something major that I'm missing in that range?

Give us a minute again. I am a little out of sorts.

Yes, no problem, take your time.

Did you say excluding the ASB Mike or including the ASB?

Excluding.

Excluding, yes. Just as like a starting point before we layer ASB in.

Yes, I think that's a reasonable number. There will be a little bit of volatility on the equity side but you're probably assuming that to be almost 0 like we do on those equity securities. Rev rec could cause a little bit of volatility but we're generally seeing good growth, and trusted investment income is still growing. We were at 13.1% in fourth quarter. I'd probably expect it to be a little bit ahead of that come the second quarter given insurance keeps growing at a decent pace, trust and investments growing at a decent pace, I consider electronic banking is -- we're seeing a little few positive signs there. And we're -- in between swaps, and SBA, we've kind of hit our expectations there, sometimes one might be up, one might be down but the 2 of them kind of come together it seems.

Okay, and then similarly on the expense side, is about somewhere between $27 million, [$7 million] $28 million kind of a good starting point before we look to add in the ASB impact?

Yes, I'd say we are $28.2 million right, so you can probably back away [$100,000 some] $900,000 for kind of the unusual items that happen. The stock grant is a onetime event, they have happened before but not every year. So it's infrequent and the HSA is basically kind of a spreadable item but we recorded that in the first quarter, when people actually earn it and we really don't know what's going to happen there. And we had $149,000, $150,000 of the acquisition cost, so at a core rate, I'd say you're looking at somewhere below 27.5 so it's somewhere between 27.3 to probably 27.7, or so is kind of a core rate, I would use in essence. You saw my math. Did you saw my math?

I do, I do and that -- both those points are helpful. I just wanted to make sure I had a good starting point. I guess just on the overall competitive dynamics, maybe switching gears a little that, that you're seeing out there. Earlier on in the earnings season, we did hear from some larger banks that commercial real estate, multifamily's competitive. It seems like most of you and your peers in the Ohio area saw some okay growth in the first quarter though. I mean, you kind of mentioned a few things already but I guess competitively, has it intensified at all post tax reform Chuck or are you still kind of comfortable with the overall direction of the lending and deposit taking markets that you're operating in?

I think we're doing fine. On commercial real estate, we don't -- I would just say we're highly selective kind of doing business with best-in-class providers, developers. We seem to be able to do well on C&I, again it goes back to the $5 million, $10 million, $15 million clients at Key, Fifth Third, Huntington, PNC, Chase, U.S. Bank is not getting a consistently great experience. At their best, those banks are excellent and tip our hat to them. But they're not always at their best for the client that's borrowing $5 million, $10 million, $15 million and we can move the needle doing that and hope to do it all day.

Our next question comes from Scott Beury of Boenning and Scattergood.

I was wondering if you could just provide any color on both the characteristics of the loan that was charged off, the acquired loan, as well as the larger credit that drove the increase in criticized assets, during the quarter?

Yes, I'd be glad to do both. First the charge off was an acquired loan in the NB&T acquisition. It was a car wash. Sadly the owner-operator passed away in his late 30s. I will tell you that I'm in my eighth year and we have not approved a car wash in the time that I have been here. We get them in the acquisitions and unfortunately, this one did not have a happy ending.

As it relates to the big loan that increased the criticized, it's a hospital. It is a company, an organization that has gone through a conversion of their accounting receivable system. It has caused a momentary blip. We know that they have been profitable in the month of March. I anticipate them being profitable for the remainder of the year. We anticipate the problem being fixed, but more importantly, they have reduced their expenses significantly to get in line with the lower amounts of receivables that we all believe to be temporary. As I said I do anticipate this credit being upgraded by the end of the year.

I would also say that we are -- we believe that our criticized classified totals will be at their high point for the year in the first quarter. And while we have almost de minimis amount of NPAs for a bank our size, I suspect we're going to be able to reduce our NPAs in the upcoming quarters. So we are very optimistic from a credit quality standpoint. And we think that we can hopefully keep chugging on the commercial loan growth side. We're fine with the slowdown in indirect. We believe with ASB, over time, we'll see some better mortgage numbers than we have historically experienced. But I would say that we're fine with the credit quality.

That's great color, very helpful. I guess just one little follow-up, in terms of the hospital credit, is that multiple loans?

It's 2 loans.

Okay, so it's probably an operating line as well as the real estate piece?

It's a term loan and a line of credit.

Our next question comes from Kevin Swanson of Hovde Group.

So I appreciate the commentary you kind of make every quarter about the current cost rising from historic lows and then the previous commentary on the specific charge-offs and criticized loans. I guess, more generally, are there any areas of weakness you're starting to come up? Or is just kind of the commentary the same as it has been in the past?

No, we feel pretty good right now. We have -- I guess I would say that it's been quite a while since I have had so much optimism that we will be able to improve the rating of credits that are criticized over the remainder of the year. Now that being said, there's always something going the other way that can surprise you. Our delinquency numbers are good. Our credit disciplines are excellent. We are not -- we're middle of the fairway lenders. We're not out there on the far ends of the risk-reward frontier. And I'm very optimistic.

And I think we show -- I think we -- just a sec. I think we've shown our discipline on the indirect side that we're not going to chase things; we know that business pretty well. We know the margins are thinner in that business and you can't be crazy on pricing because you know you are going to have some degree of losses in that book.

Okay, I appreciate it. And then looking at deposit costs, it looks like you guys have been able to hold the line relatively well. Can you maybe just talk about the current deposit competition environment and what you guys are seeing in your markets?

I think that at these interest rates, I don't think consumers are going to get super excited. We see much more pressure on the public fund money and much more movement there. We see rates getting 2%, 3%. You may see more activity. We have done some exploration of some CD specials. We see other competitors doing similar types of things but by and large, it's been relatively tranquil.

Yes, we have seen more phone calls from public funds, money and corporate side wanting increases, we've managed through that. We'll do the right thing based upon the relationship. If they don't have a strong relationship, and they're just looking for more rate on a small interest-bearing product, at times we'll let that go. So we're trying to be disciplined there as well. And as Chuck mentioned, we've had a little bit of success on CD size that's mostly what we're seeing. And we continue to look at our rates, we continue to monitor what's going on in the marketplace. If we did increase anything, it would not be overly substantial and we're seeing a much decent lift on the asset side. So we think -- as I mentioned before, we think we can have in the foreseeable future, have a decent margin.

(Operator Instructions) Our next question comes from Dan Cardenas of Raymond James.

Just a quick -- you may have mentioned this, I may have -- I think I missed it. But what were your deposit betas this quarter? The last rate increase?

I have that here someplace. Not a lot. Total interest-bearing deposits about 5% for the quarter. A little less.

How about on the flip side? What have your asset betas been looking like here with the rate increases?

A little more focused on deposits than I am assets. But probably -- but definitely a little higher than that.

Okay, sounds fair. All right. And then just kind of a quick housekeeping question. In terms of share count, how should we be modeling that for you guys on a go forward basis?

With ASB of course, right? About [19, 2]

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

Yes, I do, and thank you for -- I want to thank everybody for participating. Please remember that our earnings release and a webcast of this call will be archived on peoplesbancorp.com under the Investor Relations section. Thanks for your time, and have a good day.

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