WesBanco Inc (WSBCP) 2016 Q2 法說會逐字稿

Welcome to the WesBanco Inc. second-quarter 2016 earnings conference call.

(Operator Instructions)

Please note, this conference is being recorded.

I would now like to turn the conference over to John Iannone, Vice President in Investor Relations. Mr. Iannone, please go ahead.

Thank you, Nicole. Good afternoon and welcome to WesBanco Inc.'s second-quarter 2016 earnings conference call. Our second-quarter 2016 earnings release, which contains reconciliations to non-GAAP financial measures, was issued yesterday afternoon and is available on our website, www.wesbanco.com.

Leading the call today are Todd Clossin, President and Chief Executive Officer and Bob Young, Executive Vice President and Chief Financial Officer. Following the opening remarks, we will begin a question-and-answer session. An archive of this call will be available on our website for one year.

Forward-looking statements in this report relating to WesBanco's plans, strategies, objectives, expectations, intentions, and adequacy of resources are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The information contained in this report should be read in conjunction with WesBanco's Form 10-K for the year ended December 31, 2015 and Form 10-Q for the quarter ended March 31, 2016, as well as documents subsequently filed by WesBanco with the Securities and Exchange Commission, which are available on the SEC and WesBanco websites.

Investors are cautioned that forward-looking statements which are not historical fact involve risk and uncertainties, including those detailed in WesBanco's most recent annual report on Form 10-K filed with the SEC under Risk Factors in Part 1, Item 1-A. Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements. WesBanco does not assume any duty to update forward-looking statements.

Lastly, please be aware that telephonic and webcast replays of today's call will be made available as soon as a transcript is available and filed with the SEC. Todd?

Thank you, John. Good afternoon. Welcome to WesBanco's 2016 second-quarter earnings call.

As many of you know, WesBanco is a diversified and well-balanced financial services institution, with the community bank at its core, that is built upon a strong legacy of credit and risk management. We have meaningful market share across our key geographies, maintained by exceptional customer service, and a solid and growing fee-based business led by our proprietary mutual fund family, the WesMark funds and our century-old trust business.

On today's call, we will cover several operational topics and review our financial results for the second quarter. Before we begin, there are several key takeaways this afternoon. We remain focused on long-term growth while maintaining our focus on strong credit quality, capital ratios and shareholder return.

We continue to realize mid-single-digit total loan growth on a year-over-year basis and anticipate a continued lower for longer interest rate environment. We are on track with regard to our planned merger with Your Community Bankshares and we are making steady progress on our business and balance sheet mix strategies.

We are pleased for our results for the quarter, which were in line with our expectations, as we continue to focus on long-term growth and execution of our stated strategies. Excluding merger-related expenses, we earned fully diluted earnings per share of $0.59 on income of $23 million for the second quarter of 2016 and $1.18 per share on net income of $45 million for the six months ending June 30, 2016. In addition, our year-to-date efficiency ratio of 56.3% reflects an 86-basis point improvement year-over-year, as our non-interest expense during the second quarter came in as expected.

While Bob will provide more details in a few minutes, we are focused on maintaining a strong financial institution for our shareholders, as evidenced through our credit quality and our capital ratios. Nonperforming loans to total portfolio loans, total non-performing assets to total assets and net charge-offs to average loans continue to decline to 0.8%, 0.55% and 0.8%, respectively for the quarter ended June 30, 2016. Furthermore, we remain focused and dedicated to returning value to our shareholders through our strong 2016 year-to-date return on assets and tangible equity ratios of 1.06% and 13.97% respectively, as well as our dividend payout ratio during the second quarter of 41.4%.

As we have clearly laid out, our long-term growth is focused on five key strategies: Growing our loan portfolio with an emphasis on commercial and industrial lending, increasing fee income over time, traditional retail banking services efficiencies and growth, expense management, and franchise expansion. As of June 30, 2016, our total loan portfolio grew to $5.2 billion, an increase of 5% as compared to a year ago, benefiting from an $822 million loan origination total during the first six months of 2016.

More than one-half of our year-over-year growth in total loans was from our strategic focus on commercial and industrial and home equity loans as these categories grew 11% and 15% year-over-year respectively due to our commercial lending hires, increased business activity and focused calling efforts. As most of you know, it's important to view our loan growth over a rolling four quarter period in order to mitigate the impact from quarterly fluctuations in our construction portfolio due to repayments.

In addition, we remain committed to our strong legacy of credit and risk management. In this competitive and extended lower for longer interest rate environment, we continue to be judicious with the loans we book as we will pass on deals where we feel the pricing and/or the structure is not reflective of the credit risk. While this strategy might cost us a few basis points of]loan growth now, it will provide significant benefits to the Company and our shareholders during the next credit cycle. And lastly, we still anticipate mid-single-digit overall loan growth during 2016 as our loan pipelines remain robust.

In the current operating environment, our expense management remains critical. We continue to control our discretionary expenditures and we continue to ensure the investments we make contribute positive operating leverage over a reasonable period as well as reviewing key operational areas to identify additional potential cost savings. Our announced merger with Your Community Bankshares is on track, and we still anticipate a late third quarter or early fourth quarter closing. As we mentioned in May, this merger meshes perfectly with our strategic growth plans as it provides an opportunity to bring a high quality commercial bank into our organization and expands our footprint into new, high-growth markets with great demographics. We believe these new markets have the potential for higher growth in 2017, pending consummation of the proposed merger.

As we have mentioned previously, we intend to appropriately remix and manage our balance sheet while still encouraging loan growth. As we said on last quarter's call, during the fourth quarter of 2015, we increased the asset sensitivity of our balance sheet by increasing the amount of and lengthening the maturities on our Federal Home Loan Bank borrowings. While we are now expecting an extended lower for longer interest rate environment, we remain comfortable with our positioning. In addition, we are focused on carefully maintaining the size of our balance sheet in order to delay the financial impact of crossing $10 billion in assets as we reduce the size of our securities portfolio during the second quarter of 2016.

Lastly, I'd like to provide a brief update on the shale oil and gas environment within which we operate. Our efforts with shale oil and gas remain centered on deposit and wealth management growth, as monthly deposits from our Marcellus and Utica shale landowner customers continue to be meaningful. Furthermore, there has been no material change in our exposure to the oil, gas, and coal industry or the credit quality of that exposure.

While pipeline construction remains a positive for 2016 and 2017, Royal Dutch Shell recently announced that it will build a multi-billion-dollar ethane cracker plant along the Ohio River near Pittsburgh. This is a great development for our region as it reflects the great potential of abundant shale gas.

This multi-year project will spur hundreds, if not thousands, of direct and indirect jobs and will encourage potential development opportunities by manufacturing, petrochemical, energy, and plastics industries. We are well-positioned to benefit from the economic activity that will be generated from this project.

I would now like to turn the call over to Bob Young, our Chief Financial Officer, for an update on the second quarter's financial results. Bob?

Thanks, Todd and good afternoon to all of those on the call this afternoon.

For the six months ended June 30, 2016, we reported net income of $45 million and earnings per diluted share of $1.17, net of merger-related expenses. Excluding those expenses from both periods, net income would have increased 6.7% to $45.4 million with earnings per diluted share up one penny, to $1.18.

Year-to-date, the return average assets was 1.06% and return on average tangible equity was 13.97%. For the quarter ended June 30, we reported net income of $22.1 million and earnings per diluted share of $0.58. Excluding merger related expenses, net income would have been $22.6 million and earnings per diluted share of $0.59 as compared to $22.4 million and $0.58 per share last year.

For the second quarter, return on average assets was 1.05% and return on average tangible equity was 13.55%. Over the past five quarters, our returns on assets and equity have been relatively stable, reflecting the stability, despite the current interest rate environment, as our asset re-mix strategy has helped to offset a lower net interest margin.

My remaining earnings-related comments will focus on the second quarter's results. Our earnings release published last evening contains our consolidated financial highlights, as well as reconciliations of non-GAAP financial measures. Net interest income in the second quarter was down 1.7% year-over-year at $59.8 million, as a result of a 14-basis point decrease in the net interest margin, partially offset by a 3.2% increase in average earning assets to $7.6 billion.

The increase in average earning assets was driven by a 5.2% increase in average loan balances, reflecting our balance sheet re-mix strategy of decreasing investment securities balances to fund loan growth and in order to maintain the size of the balance sheet to delay the financial impact of crossing the $10 billion asset threshold.

Total portfolio loans of $5.2 billion as of June 30, 2016 increased $236 million, or 4.8% year-over-year, reflecting strong year-to-date loan originations, supported by 13% growth in total business loan originations. Total loan growth was driven by growth in commercial real estate, primarily construction and land development, commercial and industrial, and home equity loan categories, as the latter two drove more than one-half of the year-over-year growth in total loans.

This reflects our a strategic focus on commercial and industrial, as well as home equity loans, as these categories grew 11% and 15% year-over-year, respectively, due to our commercial lending hires, increased business activity, and focused calling efforts.

Total deposits decreased to $5.9 billion at June 30, 2016, due primarily to reductions in certificates of deposit from lower rate offerings for maturing CD, continued run-off of higher cost retail CDs, particularly run-off of $146 million from ESB, lower CDARS balances, and customer preferences for other deposit types as we continue to shift our deposit base to emphasize multiple relationship customers.

When excluding the impact of CDs, total deposits increased slightly to $4.5 billion, reflecting our deposit re-mix strategy. For the second quarter of 2016, the net interest margin was 3.30%, down 14 basis points year-over-year, primarily reflecting lower spreads in the repricing of existing loans and competitive new loan pricing, both of which are the direct result of the continued low interest rate environment and flatter yield curve.

A partial mitigant to the lower spreads is our continued loan growth and balance sheet re-mix strategy, which over time will improve asset yields as average loan rates are higher than securities rates. In addition, our net interest margin also reflects increased funding costs associated with a higher proportion of Federal Home Loan Bank medium-term borrowings and higher junior subordinated debt costs, other known as TruPS, as these LIBOR-denominated instruments increased in costs from the December federal funds increased of 25 basis points.

Federal Home Loan Bank borrowings of $1.1 billion represented 17.2% of average interest-bearing liabilities during the second quarter of 2016, as compared to 8.3% a year ago. This increase of $276 million year-over-year reflects our balance sheet re-mix strategy, which included increasing our overall asset sensitivity late in 2015 in anticipation of a rising rate environment, as well as partially offsetting the planned run-off of higher rates certificates of deposit.

Due to the anticipated lower for longer interest rate environment now, we intend to somewhat reduce asset sensitivity by allowing maturing borrowings to be replaced with shorter-term advances, as funding needs are determined after the acquisition of YCB, and in conjunction with maintaining the pro-forma combined balance sheet below $10 billion.

Turning now to non-interest income, it increased 8.4% from the prior year to $19.6 million. This $1.5 million increase was driven by a $800,000 of a commercial customer loan swap fee income and $600,000 of securities gains from the sale or call of mortgage-backed securities and agency securities.

The securities gain is a result of continuing our stated strategy to reduce the percentage of securities to total assets, which increased due to the ESB acquisition, and as part of the balance sheet re-mix and size strategies. While trust fees were negatively impacted year-over-year due to reduced trust assets, lower estate fees, and market declines, our e-banking fees did increase year-of-year from increased retail and business transactions.

We remain focused on long-term expense management and positive operating leverage. For the year-to-date period, our efficiency ratio improved 86 basis points, excluding merger-related costs, and on a year-to-date basis, we delivered operating leverage as revenue growth exceeded expense growth.

Non-interest expense for the second quarter of 2016 increased just $1.2 million year-over-year to $46.7 million, excluding merger-related costs. Expenses for the second quarter were consistent with the expense run rate from the fourth quarter of 2015 as we noted on last quarter's call.

Salaries and wages increased $400,000 year-over-year due to annual employee raises and higher stock compensation, partially offset by a 1% decrease in full-time equivalent employees, while employee benefits increased $500,000 due to higher health insurance costs. Furthermore, continued investments in our technology and communications platforms, as well as origination and customer support systems drove higher equipment costs.

Turning to our asset quality and regulatory capital ratio metrics, for the three months ended June 30, 2016, our net charge-offs of $1 million represented a ratio to average loans of just 0.08%, an improvement versus both the prior year and sequential quarterly periods. The provision for credit losses was $1.8 million for the quarter, primarily reflecting loan growth and normal consumer loan net charge-offs.

Non-performing loans and non-performing assets, which had increased somewhat after the ESB acquisition, have continued to decline in both absolute dollars and as percentages of total loans. Non-performing loans to total loans were 80 basis points and non-performing assets to total assets were 55 basis points at the end of the second quarter.

Our capital ratios remain well above the well-capitalized standards required by bank regulators, as well as BASEL III, with our Tier 1 leverage capital ratio of 9.71%, Tier 1 risk-based capital of 13.62%, and total risk-based capital of 14.4%, as well as a Common Equity Tier 1 capital ratio of 11.88%. Lastly, our tangible equity to tangible assets ratio improved to 8.56% as compared to 7.68% at the end of the second quarter of last year, assisted by the growth in retained earnings, as well as higher other comprehensive income.

Before opening the call for your questions, I would like to provide an update on our thoughts regarding the second half of 2016. We continue to anticipate a competitive loan environment impacted by an extended lower for longer interest rate scenario with a flatter yield curve, which will continue to impact our net interest margin, as existing loans reprice and new loans are booked.

In addition, the continued execution of our balance sheet re-mix strategy, as we delay the financial impact of crossing the $10 billion threshold, will also have somewhat of an impact in the near-term, although reducing the size of our investment portfolio is part of our longer-term strategy. We are now only modeling for one rate increase in December of this year, as compared to two previously, and just one increase during 2017 at this time.

We still anticipate mid-single-digit overall loan growth, which we plan to fund with normal securities portfolio run-off, and as necessary, shorter-term borrowings. Lastly, while we continue to focus on positive operating leverage, we anticipate expenses during the second half of 2016 will be well-controlled and up only minimally for typical mid-year salary increases and higher marketing costs associated with our growth strategy. We're now ready to answer your questions.

Operator, would you please review the instructions?

(Operator Instructions)

Catherine Mealor, KBW.

Good afternoon, Catherine.

Good afternoon, everyone.

First question, just a follow-up on the margin. Bob, how do you think about, with the flat yield curve -- last quarter, you mentioned that if we didn't see any change in the rate environment, that we might see another 3 to 5 bps compression in the margin. But you certainly did a great job this quarter offsetting the margin pressure you've got with the balance sheet re-mix. And so do you think that the balance sheet re-mix is enough to keep the margin flat as we look out for, let's just say, rates don't move this year or next? Is there enough opportunity on the re-mix side to keep the margin flat? Or do you think, in that scenario, we've still got some downward-trending margins?

In answer to your question, Catherine, we think in the near term, we're going to hold the margin relatively where it is at this point. Recall, we have a few basis points still from purchase accounting accretion, 4 or 5 is what we are predicting in the back half of the year; it was 7 in the first half of the year. So we're going to offset that with the continued balance sheet re-mix. The sale of securities in the second quarter, as well as some that we'll inherit from YCB also serves as part of that re-mix to bolster the margin slightly, just because of the percentages of lower yielding securities to loans after you engage that strategy. Now, while the margin then might hold, you might see because of the size of the balance sheet, lower net interest income than what would be there had we not been approaching the $10 billion level.

But in answer to your question, longer term we would expect that you would see a couple of basis points of downward pressure on the margin, despite the re-mix. As we move through the back half of the year, towards the end of the year, particularly. And then our analysis has one increase in it, so that's holding it early in the next year. So if your assumption is, let's take that away, then you'd continue to see that couple basis points or so per quarter. I don't think we're headed too much lower at this point, and I do believe the loan growth that we have factored in will assist us in continuing to hold the margin fairly close to where we are.

Great. On YCB, now that you're a few months into analyzing what that pro-forma impact will be, any change in thoughts into what the pro-forma margin looks like with YCB? I know that, that yield should be accretive to your margin?

Yes, and we did talk about 5 to 10 basis points last quarter in accretion on the margin. I'm still thinking that, maybe a little closer to the higher end of that range. Recall, it's only 17% of our total balance sheet size, so even though they're running in the 370 to 380 area with their purchase accounting accretion from the last acquisition, and if you want to strip that out 20 basis points lower, they do have accretion in terms of current margin as compared to where we are, given their balance sheet mix and higher loan balances. So still guiding to the same level, Catherine, post-merger.

Got it. Okay. Perfect.

And then wanted to follow up on the news we saw about the flooding in West Virginia. Any material impact to your franchise, borrowers, branches?

No, really not. The flooding was really in the central part of the state, central southern part of the state. As you know, our franchise is significantly north of that. We have a few branches in the Charleston area, but everything is north of the state. So while we're doing what we can to help and support the relief efforts down there with employees and contributions and a few things like that, no material impact to our business at all. It really had no impact at all.

Okay, great.

We did offer a flood relief consumer loan program in conjunction with that. We put an announcement out on that, Catherine.

(Operator Instructions)

John Moran, Macquarie.

Hello, John.

Good morning, guys -- or afternoon.

Quick question: on the $10 billion level -- it's a two-part question -- one is, with YCB in there, you guys would plan to cross $10 billion organically anyway, halfway through 2017, but not before the end of 2Q. Is that correct?

What we've talked about before is, we would anticipate back half of 2017 or early 2018 was when we would expect to go over, whether it be organically or through an acquisition. But through the deleveraging strategy and the re-mix strategy, the thought would be, we would stay under until then.

Okay, so there is enough runway on re-mix to get you all the way through into 2018 if you had to, then?

We've gone from around 30% of our balance sheet being securities backed with ESB; now they're right at the mid-20% range. We think, historically, we've been in that 20% to 25% range, so we think that would drift lower to the 20% range. And we would be comfortable with that. That's a healthier balance to have on the balance sheet, anyway.

Sure. Understood. Okay.

And just in preference of crossing, ultimately -- and I remember from the [YCB call you guys said look if] we found the right $1 billion, $2 billion institution that, that would be the preferred method? Or has the thought process around that changed at all?

What we talked about at the time of the merger announcement is still very much in play. There's a number of banks our size that are going through different strategies to cross that threshold. What you want to do is keep your options open. Obviously, you want to get up to a couple billion over $10 billion fairly quickly after you go over $10 billion in size, for reasons everybody knows about and we've talked about in the past. But also you also want to maintain your discipline as you are going through the process. There's a lot of wrong deals that are the right size out there, as well, and we're a cautious organization. We're going to look at the right opportunities if they present themselves, but you can't control when those happen or the timing exactly. That would be the initial thought, but we reserve the ability to go over organically at some point if we were to choose to do that.

Perfect, understood.

Then, Bob -- I'm sorry if I missed it -- did you give what the new money loan yields are coming on at this quarter? I know that there was a little bit of slippage there in the loan yields and you said in the outlook that you'd expect a continued tough competitive environment. But if you mentioned it I missed the new money loan yields.

I did not provide that. There's no question that spreads have tightened on new loans, and depending upon the nature of the new loans -- are they LIBOR-priced or are they fixed rate for a particular term -- can have an influence on those loan yields as well. Keep in mind, swap spreads are much lower than they were, as well as just the difference between on the run 2-years versus 10-year. You are down to 86 basis points difference between those two.

We've incorporated those assumptions in our modeling here at June 30 as we look forward, and I gave you some guidance on how many increases or the lack thereof that we're currently planning. So while we're still getting similar credit spreads to the past, it would be a lower rate environment and lower swap spreads that would be decreasing the current rates that we get on new loans. There's a competitive factor there, as well, in particular markets, John, that's correct.

Okay, perfect. That's helpful. The last one for me.

I think you guys said 50% of the production this year was on the focused categories -- C&I and HELOC. I'm wondering if you had the split on how much of that was coming out of the urban part of the footprint versus, I'll call it, the legacy or the rural part of the footprint -- and in particular, on the HELOC product?

What I would say in answer to that question is, we've been involved in the C&I business and HELOC business for a long time and we've got a nice market share in our legacy markets on C&I and that continues to support well and continues to grow. The focus in some of the larger urban areas that we've mentioned, we've had a commercial real estate focus for quite a while and that's where we're building out a lot of additional C&I lenders. So you're seeing more C&I growth now in some of those markets -- Pittsburgh, Columbus, Cincinnati, those types of markets -- than maybe you saw in the past because we're staffed. We're staffed to get that growth now in the C&I space.

But we've always been staffed in our legacy markets and we've always grown C&I in our legacy markets. So we continue to see growth across the whole franchise as a result of that, and part of that is, too, with more of a focus on C&I in some of the bigger urban areas, we're enhancing our products that you saw some of the swap fees that were reported in our earnings this quarter. We get those in the new markets and the legacy markets, so our legacy markets benefit from continued product enhancement that we're taking on as a result of trying to be competitive in the bigger urban markets.

Got you. Thanks very much for taking the questions.

Bob Ramsey, FBR.

Hello, Bob.

Good afternoon, guys.

Credit trends are obviously good. But provision is at the lower end of where it has been over the last year or so. Just curious how you think about the provision trajectory, whether you can stay around this level or you think it gradually builds from here, or what your thoughts are?

We've been at the 0.82%, 0.83%, 0.84% the last three quarters, so it's flat to going up just a hair, but the credit quality continues to be strong. We turned down a lot of deals because of price and because of structure that get done elsewhere; and I know that costs us maybe some percentage points or so on the loan growth, but that really benefits us in relation to your question, going into the next recession. We don't know when that's going to be but we know it's there. So we're continuing to be very diligent on our underwriting standards. Obviously, that flows into the provision, as well too, on the consumer side and on the commercial side. When and if we see a deterioration start to occur, we address that, but we do feel we're on the lower end of the historical range with where we're at right now.

The 0.84% -- you've also got the impact of prior mergers, which, you add that in, puts us up at the 0.97% or so range overall, so roughly near 1%. With the credit quality we've got, and at this point in the economic cycle and credit cycle, we feel pretty good about where we're at. But we would address it if trends changed.

Clearly, the historic charge-off ratio, as well as just improvements in criticized and classified and the non-performers, is what's driving the number lower. Basically, this quarter you're providing for the growth, as well as just ordinary consumer loan charge-offs, which have a quicker turn. Until we adopt current expected credit losses in 2020 -- I'll have grayer hair by then -- but until we adopt that, we're not going to be anticipating credit losses for the future; it has to be based upon inherent losses in the portfolio today, which is borne by prior historic charge-off ratios -- similar levels to where we are at the moment, Bob.

Okay, that's fair. And then, what is the right tax rate to use on a go-forward basis?

What rate would you like to use? We're currently between 27% and 28%, is what we have been accruing to this year, closer to the 27% rate, Bob.

Okay. You guys are little under that this quarter and you were under that last year, so I didn't know if I had been modeling it too high, but that's fair. Thank you very much.

The reason why it was lower last year was because you had -- you don't look at core income for tax purposes, you would look at GAAP primarily with some tax deductions, but last year you just had lower net income because of those one-time charges related to ESB, the bulk of which were deductible.

Sure. Okay. Thank you.

John Moran, Macquarie.

Hey, guys. I'm sorry. I need to sneak one more in at the end here.

The trust line has been running a little weak year over year in terms of comps. I know that there is market volatility obviously in there, but I'm wondering if you can give an outlook for that on the fee income side of things? And how much of that is tied to royalty business in the footprint?

You mentioned the volatility, and it's not just a volatility within the quarter, it's when you take the fees -- what day of the month you take the fees within the quarter and what's the market doing on that day. So it's hard to look at an average volatility for the quarter without having the specific day and whatnot to work on. We're going to expect to see continued volatility there. We've got a large trust department that's been around for 100 years, so we've got a steady stream of payouts that occur on that on a regular basis to beneficiaries, but we're also seeing a lot of significant inflows. Those ebb and flow, sometimes dramatically from month-to-month or from quarter to quarter to quarter.

But the core business continues to remain strong. We don't see any big fundamental changes in that business one way or the other unless there was a significant market correction that would be sustained and wouldn't bounce back. Outside of that, what you've seen in the past is going to be pretty consistent what you're going to see in the future from us.

John, the first quarter is typically our highest quarter because of tax fees and we are experiencing, as I said in the press release and on my scripted comments, estate fees are expected to be lower this year than they were last year, and slightly lower investment fees on the WesMark Funds. But other than that, other than the asset base being a little bit lower, those are the significant factors.

Great, I appreciate the color. Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Todd Clossin for any closing remarks.

Thanks, Nicole. Let me wrap up.

We are very pleased with our progress, as we've mentioned, during 2016 to date. We're going to continue to remain vigilant on our expense management in the extended lower-for-longer interest rate environment, plus continue to execute upon the balance sheet and business mix strategies that we've talked about today. We're excited about the opportunities for long-term growth that are going to be enhanced by the planned merger with Your Community Bankshares and I want to thank you all for joining us today. Hope to see you at one of our upcoming investor events. Have a good day.

Thank you.

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