Earnings Call Transcript - CNOB Q1 2021

Siya Vansia, Chief Brand and Innovation Officer

Good morning, and welcome to today's conference call to review ConnectOne's results for the first quarter of 2021, and to update you on recent developments. On today's conference call will be Frank Sorrentino, Chairman and Chief Executive Officer; and Bill Burns, Executive Vice President and Chief Financial Officer. The results as well as notice of this conference call on a listen-only basis over the Internet were distributed this morning in a press release that has been covered by the financial media. At this time, let me remind you that statements and assumptions in this conference call contain or are based upon forward-looking information and are being made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to numerous assumptions, uncertainties and known or unknown risks, which could cause actual results to differ materially from those anticipated. These risk factors are more fully discussed in the company's filings with the Securities and Exchange Commission. The forward-looking statements included in this conference call are only made as of the date of this call and the company is not obligated to publicly update or revise them. In addition, certain terms used in this call are non-GAAP financial measures, reconciliations of which are provided in the company's earnings release and accompanying tables or schedules, which have been filed today on Form 8-K with the SEC and may also be accessed through the company's website at ir.connectonebank.com. Each listener is encouraged to review these reconciliations provided in the earnings release together, with all other information provided in the release. I will now turn the call over to Frank Sorrentino. Frank, please go ahead.

Frank Sorrentino, Chairman and CEO

Well, thank you, Siya, and good morning, everyone. We appreciate you joining us today. As you've seen ConnectOne had a strong quarter and continues to build momentum as we move into the post-COVID economy. The first quarter highlighted by solid financial and operating results and diligent execution, against our strategic plan is a strong indicator of the performance we can expect through the rest of the year. Our proactive position coupled with the improving operating environment has allowed us to take advantage of many growing market opportunities. This is the third quarter in a row that operating earnings exceeded 2% of assets, and notably that's increased sequentially each quarter. Our loan production was robust. We utilized the full range of the company's banking expertise to support our clients, who are not only financially strong, but have also realized new opportunities through this pandemic. We stand ready to support them as they expand their businesses. Same time, we saw a large increase in pay downs and payoffs. There are a number of reasons for this, which we believe are short-lived or one-time events. Our strongest clients are sitting on large cash balances due to the liquidity that's in the market resulting in pay downs on lines of credit. Our pipeline in construction saw unusually large numbers of completions and resulting payoffs as timelines were affected by the early COVID-related shutdowns last year combined with the late starts for new projects. Extraordinarily low interest rates through last year caused a higher than usual level of refinances that we chose not to participate in as we remain disciplined in our approach. We're seeing these events normalize. As we begin the second quarter, there appears to be a slowdown in both pre-payments and in payoffs. We are seeing strong demand across our markets, further building growth momentum which can be seen in our existing loan pipeline, which I'm happy to report is at the highest level in the company's history. We continue to expect net loan growth to accelerate in the back half of the year. Now turning to credit, we continue to see better than anticipated strength and no doubt we're in a much better position than was originally anticipated at the start of this pandemic. We implemented the CECL accounting standard on January 1, and Bill will provide a little more detail on this, but in summary our one-time adjustment was modest. During the quarter, we released a small portion of the reserves built over the past year based on the improving macro-economic outlook. Our deferment portfolio declined modestly at the end – as of the end of the quarter, and the total amount of loans where all payments have been deferred is now less than $50 million or less than 0.8% of our total loans. Total deferments are expected to decline significantly over the remainder of 2021 and we believe our reserves reflect adequate protection against any potential losses. I'd also like to note that our net interest margin continued to expand during the quarter, the sixth consecutive quarter that margin widened. We're proud of our results this quarter and remain disciplined in managing our business as we look forward towards growth. As the vaccines continue to be deployed throughout the New York metropolitan area, we're anticipating a significant uptick in our client activity. We're geared up for meaningful growth for the remainder of the year, and as the economy opens up even more, we're preparing our team to capitalize on increased opportunities. Speaking of ConnectOne's team, they've returned to a work environment on working from the office environment, and I'm proud of the resiliency that they demonstrate each and every day to take care of our clients. You have heard us discuss for some time that we are progressively moving towards a hybrid banking model. For us, the early investments we've made in technology and our infrastructure allowed ConnectOne to be well prepared to respond to the pandemic. We plan to further develop this model and our strong technological foundation as we move into the future state of the bank. As always, ConnectOne remains a growth-oriented company and with signs of stability and expansion returning, we are well positioned with the capital strength necessary to take advantage of these opportunities and to maintain, or even improve our best-in-class performance metrics, some of which are our high returns on capital common equity, the building of tangible book value per share, and improving on our best-in-class efficiency ratio. With those things in mind and with that outlook, today we announced the 22% dividend increase to go along with the resumption of our stock repurchases. Over the past couple of years, we've seen notable technological shifts, including reliance on digital platforms, virtual deposits and online financial tools. We continue to innovate and invest in our infrastructure to enable us to deliver the quality products and services that our clients demand. At the same time, as client behavior evolves, we continue to reduce our retail brick-and-mortar footprint relative to the size of our balance sheet and in client demand. In the first quarter, we further reduced our branch count, completing the previously announced sale of two branches. It's interesting to note that over the past five years, we have doubled the size of our assets, our loans and deposits, while only increasing the net branch count from 21 to 24 including the integration of two acquisitions. And as also as a quick update, we continue to build our SBA lending platform in our marketplace to serve our existing clients and to support small businesses and the communities where we do business. This initiative has been gaining traction and we see opportunities over time to generate revenue through an expanded SBA division. Now turning to BoeFly. We see terrific growth in that platform, which is generating more traffic through its proprietary products, bVerify and the patented bQual, and this in turn will lead to increased fee generation through loan referrals. As we scale and extend BoeFly's competitive position, we're seeing opportunities to further enhance BoeFly's platforms and add complementary products to its offerings and build BoeFly into a robust business marketplace. I look forward to updating you on our progress in the quarters ahead. We believe many more opportunities exist to partner with fintech companies and to build more value while modernizing financial services. As you may have seen, ConnectOne has joined with dozens of other banks to participate in the JAM FINTOP Banktech fund, a fund dedicated to investing in the future ecosystem for community banks. At ConnectOne, we've long believed in the power of partnership and we believe this opportunity supported by the country's leading banks will provide a high level of diversity to further fuel innovation. Finally, a few thoughts regarding M&A. 2021 is already shaping up to be an active year. As in the past, strategic acquisitions are an important component of our long-term growth strategy. Whether we participate directly or not, we see incredible opportunities to attract new talent, add new capabilities, as well as benefit from others' activity. At its core, ConnectOne's growth – is a growth company, we've built a dynamic team that's accustomed to high levels of production, an operational model that can continuously evolve its technology and infrastructure and the ability to successfully execute franchise-enhancing M&A opportunities. Given our culture and our strong capital position, we're poised to accelerate our strategy and capitalize on market opportunities to drive substantial growth. This is an exciting time for ConnectOne. We look forward to sharing our progress with you each quarter. And I'll now turn the call over to Bill to provide a little more detail on the quarter's financial performance.

Bill Burns, Executive Vice President and CFO

Thank you, and good morning, everyone. As mentioned, the first quarter was a strong start to the year. Not only did we have a solid quarter, but we are also well positioned to succeed as we emerge from the pandemic. Let me highlight some key points from the first quarter. Loans increased by 2.5% annualized, supported by the second round of PPP. Although loan production was strong, it was partly offset by high prepayments. However, we are now seeing robust production trends along with declining prepayments, which should lead to accelerating loan growth. Regarding deposits and funding, the mix is improving. Our average non-interest-bearing deposits as a percentage of total deposits rose to 22.5% this quarter, up from 21.6% in the previous quarter and significantly higher than 17.8% a year ago. We also achieved strong growth in core interest-bearing deposits, while higher rate CDs, wholesale borrowings, and subordinated debt declined. We still have a substantial amount of CDs at 2% maturing, which will reduce rates or exit the balance sheet. Consequently, our net interest margin expanded for the sixth consecutive quarter, reaching 3.56% on a GAAP basis due to improved funding costs and a well-structured loan portfolio that reprices more slowly than those of most other banks. Looking at non-interest income, it remained flat for the quarter. Excluding the previously announced branch sales, we saw a slight decline, with minor drops in fees and BOLI investment income, as well as gains from loan sales, but I believe these areas will rebound in the coming quarters. Notably, BoeFly's recorded revenue decreased sequentially, but website traffic is rising, leading us to expect an increase in loan referral fees in the second and third quarters. Our non-interest expense remained flat sequentially for the quarter. We anticipate modest expense growth throughout the rest of the year, certainly within single digits, depending on revenue growth. Our efficiency ratio will stay low, around 40%, which places us in the top tier of the industry, and we will continue to seek efficiencies. Performance metrics indicate that, like many others, we benefited from reserve releases, with return on tangible common equity surpassing 19%. Return on assets was also elevated at 1.8%, and on an operating basis, the pre-provision net revenue return on assets was 2.06%, representing the fifth consecutive quarter of improvement. As we move toward loan growth and margin expectations, we are optimistic about achieving double-digit annualized growth rates for the remainder of the year. Our pipeline is the largest it has ever been, and as a growth company, we are poised to capitalize on the recovering economy by closing more deals with better credits and higher spreads. We are currently operating at historic margin highs, over 3.5%, and we will soon benefit from nearly $800 million in higher rate CDs maturing this year. However, the persistent low rate environment and loan growth may eventually compress the NIM, especially with larger-than-expected loan growth, although this could be mitigated if the yield curve steepens. Moving to our transition to CECL, which took effect on January 1 of this year, we ran the CECL model alongside the incurred loss model over the past year before its implementation. The one-time adjustment recorded was about $9 million, including CECL for the loan portfolio and commitments. Of that, around $5 million stemmed from non-accretable discount growth. This results in a $4 million pre-tax charge, equating to about a $3 million hit to equity. We did not expect the CECL implementation to significantly impact our balance sheet, and it has not. During the quarter, immediately following the one-time adjustment, we released $5.8 million in reserves due to improving economic forecasts from Moody's, particularly regarding unemployment rates and commercial real estate pricing trends. As an industry, we can expect more volatility in provisioning moving forward because of changing economic forecasts post-COVID. Regarding capital deployment, we have retained strong capital over the past 12 months, putting us in a favorable position with excess capital for growth. We announced an increase to our cash dividend and are resuming stock repurchases, with the volume depending on our earnings retention and growth rate. We expect to remain active in this area for the rest of the year and beyond. To touch briefly on deferments, the total level slightly decreased this quarter. Many modifications made in the latter half of 2020 are contractually in place until the second quarter, so we expect the deferral balance to drop by about 50% in the coming months. Less than 25% of the total $200 million represents full payment deferrals, while about $150 million were modified to include some continuing payments. Overall, we don’t foresee significant potential losses in this pool and believe we remain adequately reserved at this point. Lastly, our effective tax rate for the quarter increased to 24.8%, higher than expected, due to a significantly increased level of pre-tax income resulting from strong operational performance and the reserve release. Should pre-tax income decrease, we could see a lower tax rate moving forward. Now, I will turn it back over to Frank for closing remarks.

Frank Sorrentino, Chairman and CEO

Thanks Bill. And I just like to reiterate a few key points that you heard that you did hear me mention before. Our earnings profile is strong, our balance sheet and credit are in a good place. We continue to grow organically and we see a strong growth rate for the rest of the year. Our capital position is strong. We have a valuable franchise and continue to benefit from multiple streams of income and increase momentum across multiple platforms. We're a skilled acquirer, with a strong track record of integrating both traditional and fintech-focused transactions quickly and effectively. We're continuing our digital enhancements and our investments and we continue to improve on our best-in-class efficiency. So looking ahead to the remainder of the year, we're optimistic that the operating environment will continue to improve and expected to gather momentum throughout 2021. We're excited about our future and we remain confident in our ability to drive value for our shareholders, our team and our clients. And with that, I'll be happy to take your questions.

Operator, Operator

At this time, we will begin the question-and-answer session. Our first question is from William Wallace from Raymond James. Please go ahead with your question.

Amar Krishnamurti, Analyst

Hey good morning guys. It's Amar from Raymond James filling in for Wally.

Bill Burns, Executive Vice President and CFO

Hi, how are you?

Amar Krishnamurti, Analyst

Hey, good. Good morning. So just a couple of quick model cleanup questions for me. The period-end PPP balance for the quarter, do you have the average PPP for the quarter?

Bill Burns, Executive Vice President and CFO

Yes, I do. It was something like $430 million was the average PPP balance for the first quarter?

Amar Krishnamurti, Analyst

Correct yeah.

Bill Burns, Executive Vice President and CFO

Yeah. It was $417 million for the first quarter, $405 million for the fourth quarter.

Amar Krishnamurti, Analyst

Perfect. Thanks. And then just a second question on PPP, do you have the loan forgiveness figure for the quarter and if any additional PPP loans that you originated, do you have that figure as well?

Bill Burns, Executive Vice President and CFO

I would have known it was $185 million in round two.

Amar Krishnamurti, Analyst

For the originations?

Bill Burns, Executive Vice President and CFO

For originations in round two.

Amar Krishnamurti, Analyst

Okay. And then, how about the forgiveness that you guys saw from round one this quarter?

Bill Burns, Executive Vice President and CFO

Should have that number. About $150 million in forgiveness.

Amar Krishnamurti, Analyst

Okay.

Bill Burns, Executive Vice President and CFO

We are very conservative regarding the income we are recording, and I mentioned this in the release. The return on those loans is around 3.1% to 3.2%, and we have about $10 million in unrecorded income relating to PPP.

Amar Krishnamurti, Analyst

No that's great. Yeah we're just trying to back into the core margin ex the PPP and then forecast forward.

Bill Burns, Executive Vice President and CFO

Right it's 3.1% 3.2% including the 1% that's contractual on and plus the fees is what's included in the margin okay?

Amar Krishnamurti, Analyst

Okay. That’s very helpful. Thanks for taking the question guys.

Bill Burns, Executive Vice President and CFO

Sure.

Operator, Operator

And our next question is from Michael Perito with KBW. Please proceed with your question.

Michael Perito, Analyst

Hey good morning. Thanks for taking my question.

Bill Burns, Executive Vice President and CFO

Hey Michael.

Michael Perito, Analyst

I had a couple of questions on the fintech side first. So it was good to hear that the kind of it seems like the activity on the BoeFly platform is kind of percolating here I imagine as the economy opens up that will be a nice tailwind for that platform. I was wondering if you could just give us a quick reminder about near-term long-term, if there is success and growth there what type of impact to the financials we can see? I mean is it fair to think near term it's more fee-driven but then as the product roadmap around it expands it could impact NII more materially or? Just any additional thoughts or reminders you guys want to provide on that platform as growth seems to post-accelerate here.

Frank Sorrentino, Chairman and CEO

I mean I'll let Bill speak to some of the numbers there but just in general right now what we are looking at is we continue to invest in that platform to make progress in two ways. One, to further develop their baseline businesses which is this business marketplace which we think has a lot of value in this franchise market space. And two we find that there is a number of other business opportunities that that platform allows us to engage in and we're developing those as well. So right now, any revenue we drive and even if we were to drive multiples of the revenue that comes off the BoeFly platform we would probably reinvest it right back into the platform. So I don't think you're going to see anything meaningful in the near term. Bill may want to comment on that.

Bill Burns, Executive Vice President and CFO

Okay yes. Well it depends on me to fill it I mean millions would be great. We run at about on average $250,000 of revenue there per quarter and I do see already the signs of that increasing based on the activity on the platform. So it's $1 million a year. And the question is how fast a growth we're going to apply to that. There is a big universe of franchisors out there who continue to try to increase the number of franchisers and use the platform, improve the usability of the platform, reduce the friction and it's getting people to use the platform that leads to loans requests which leads to referral fees. And where one of our main focus is driving those numbers.

Michael Perito, Analyst

Very helpful. I have a similar question regarding the JAM partners fund. I assume there may be a potential financial impact, so could you explain that, even if it extends over several years? Additionally, should we view this more as an incubator for ideas to gain exposure and support fintech partners and potential platforms? Is that the more significant near-term strategic aspect? Any further comments would be appreciated.

Frank Sorrentino, Chairman and CEO

I think it's all of those things. I think it's a good opportunity to invest together with what we think are some of the best investors in the marketplace. I like the idea of getting together with other like-minded financial institutions who are thinking about the ecosystem in the same way and certainly really like the idea of a fund that is fully dedicated to the banking ecosystem and not fintech opportunities that are looking to compete with banks. So I think it does a lot of what you said, I think it provides us with a lot of opportunities both economically based and just strategically based for the future along with the ability to have a view into what's going on in the marketplace in real time.

Michael Perito, Analyst

Great, thanks Frank. And then just last one for me that it's good to hear about the double-digit kind of loan growth annualized expectation for the balance of the year. Just wondering if you could maybe unpack that a little bit more where are you seeing the pipeline overall record levels any particular areas or pockets within that that are noticeably strong and you expect to drive that line to your growth? Any kind of updated views on the commercial recovery of the New York City metro that are relevant to share?

Frank Sorrentino, Chairman and CEO

I would say our pipeline currently reflects the diversity in our balance sheet. Each of the various teams working today are seeing opportunities, with no single area showing an imbalance in concentration. We are seeing great opportunities across the entire range of products and services we offer, as well as across the different geographies where we operate. We are quite pleased with this aspect. Additionally, we have noticed significant opportunities for talent in many of these areas. As I previously mentioned, there is considerable merger and acquisition activity in our marketplace, which is bringing in talented individuals from various places, and we are leveraging that.

Bill Burns, Executive Vice President and CFO

And to help you with your model, I just wanted to add that the rate on that pipeline is from about 350 to 375.

Michael Perito, Analyst

To summarize, the points about adding talent and the rate have already been incorporated into your previous comments about margin and expenses, correct Bill?

Bill Burns, Executive Vice President and CFO

Yeah. Yeah, absolutely.

Operator, Operator

And our next question is from David Bishop with Seaport Global Securities. Please proceed with your question.

David Bishop, Analyst

Yeah. Thank you. Good morning gentlemen.

Bill Burns, Executive Vice President and CFO

Good morning, David.

Frank Sorrentino, Chairman and CEO

Good morning.

David Bishop, Analyst

Hey, building on Mike's question, Frank, you mentioned the opportunity to acquire talent from the ongoing end market consolidation, which has been quite active recently. Are there specific loan segments or niches within that opportunity that excite you more than others? Are there particular niches that you are concentrating on more than the rest?

Frank Sorrentino, Chairman and CEO

I think we're seeing opportunities across the board, and in some areas where we desire faster growth, particularly in some of our commercial and industrial segments, there are excellent prospects. Additionally, we're also encountering great opportunities in our commercial real estate and construction sectors. Overall, it appears to be widespread.

David Bishop, Analyst

Got it. I think you mentioned in the release that loan deferrals are expected to decline significantly, so I'm curious about the cash flow updates. Are the pay downs or improvements a result of fiscal stimulus, or do they reflect a more widespread recovery in the economy and better cash flows from borrowers?

Frank Sorrentino, Chairman and CEO

We have definitely noticed in our underwriting that our business clients are holding significant cash on their balance sheets. This can be attributed to various factors such as PPP funds, increased sales, or realizing they can operate with fewer employees than before. Many of our clients are sitting on increased liquidity, and with interest rates at zero, they are reluctant to pay on credit lines with a 4% interest rate. As a result, many are paying down their credit lines until their business conditions improve more significantly. We anticipate that this trend will evolve as businesses fully reopen and start to normalize.

David Bishop, Analyst

Got it. And then I guess one final question, Bill, you noted, I think it was about $800 million I think you said in CDs that are maturing or rolling off, just curious what the current pay rate is in terms of current-time deposit offerings?

Bill Burns, Executive Vice President and CFO

It's about 2%. So it's either going to come down or it's going to roll off.

David Bishop, Analyst

And what sort of rate would they be rolling into the term offerings?

Bill Burns, Executive Vice President and CFO

50 or less, right. 50 basis points or maybe less.

David Bishop, Analyst

50 or less. Got it. Thank you.

Operator, Operator

Our next question is from Zachary Westerlind with Stephens Inc. Please proceed with your question.

Zachary Westerlind, Analyst

Good morning. It's Zach Westerlind filling in for Matt Breese. How's everyone doing?

Bill Burns, Executive Vice President and CFO

Good.

Frank Sorrentino, Chairman and CEO

Hi, Zachary.

Zachary Westerlind, Analyst

So apologies, if I missed this earlier, did you guys give a guidance for 2021 loan growth ex PPP like mid single-digits, high single-digits something like that?

Frank Sorrentino, Chairman and CEO

I mean we are hoping to get it to double-digits from this point out from March 31 to the end of the year on an annualized basis.

Zachary Westerlind, Analyst

Got it. Thank you. And then I'm just kind of curious on the construction pipeline. I live in New York City, I feel like I've been just seeing a lot more construction activity generally, was just curious if you've noticed anything picking up in terms of construction permits or activity in the pipeline?

Frank Sorrentino, Chairman and CEO

I believe we are witnessing significant activity in the construction pipeline. As I previously mentioned, there were two issues affecting construction that had a negative impact on us. Our President, Liz Magennis, views it as a positive development: construction loans were paid off at a higher rate in the first quarter, which was largely due to jobs being suspended early in the pandemic during the first and second quarters of 2020. Many construction projects were halted, and the subsequent delays in restarting those projects or initiating new ones led us to the current situation, where we are seeing more payoffs than new draws on construction projects. However, the construction pipeline at ConnectOne is very robust. We are seeing this across all our markets in New Jersey and New York and across various asset classes. I am quite optimistic about construction at this time. When speaking with realtors, it's evident that there is a shortage of newly constructed homes, and even in the apartment sector, which some believed was oversaturated, there remains high demand. In fact, parts of New York City are experiencing bidding wars for rental apartments, especially those that saw significant price drops. Your instincts are correct; there are more cranes, concrete trucks, and construction workers returning to their jobs, which is promising for both ConnectOne and the markets we operate in.

Zachary Westerlind, Analyst

Thank you for that information; it’s very encouraging. I have one final question. Given the success of BoeFly, could you discuss any other potential fintech acquisitions, not in terms of specific companies but rather the types of tools you would like to have in-house or proprietary?

Frank Sorrentino, Chairman and CEO

We are focusing on a few key areas, with BoeFly at the center of our strategy. There are many opportunities to explore complementary or adjacent services to what BoeFly offers. This includes potential partnerships with infrastructure firms, payment processing companies, data solutions, or AI technology to enhance our operations. Our goal is to improve client experiences while also enhancing our operational efficiency, which we believe is already among the best in the industry. However, we recognize that there is still room for improvement. Ultimately, we are driven by a desire to either enhance our client experiences or achieve greater efficiencies with our current team.

Zachary Westerlind, Analyst

Great. Appreciate that. And thanks for taking my questions.

Frank Sorrentino, Chairman and CEO

You’re welcome.

Operator, Operator

And our next question is from Frank Schiraldi with Piper Sandler. Please proceed with your question.

Frank Schiraldi, Analyst

Good morning, guys.

Frank Sorrentino, Chairman and CEO

Good morning, Frank.

Bill Burns, Executive Vice President and CFO

Good morning, Frank.

Frank Schiraldi, Analyst

Regarding the untapped well, you are accumulating capital despite experiencing double-digit loan growth as PPP loans diminish. I'm curious about your perspective on your current capital levels compared to the end of the year and whether you might consider being more aggressive with capital returns, such as share buybacks or special dividends. Do you have any thoughts on this?

Frank Sorrentino, Chairman and CEO

Yeah. I think I did mention that depending on growth, we would be adjusting our repurchase activity. And like I said, I expect us to continue to do that for the foreseeable future. And we'll see if the growth rate is a little bit higher maybe we'll do a little bit less repurchases, if the growth's a little lower we'll do more, but we certainly feel that we're a little bit overcapitalized right now. I don't know I want to say exactly what capital ratio we're targeting, but I do feel we're above where we need to be.

Frank Schiraldi, Analyst

Okay. You mentioned the reserve to loan ratio earlier. If the economy continues to reopen and the environment improves, leading to less uncertainty, what do you anticipate for the reserve to loan ratio? Could there be any additional releases, and what direction do you see it moving towards?

Frank Sorrentino, Chairman and CEO

We have less control over what that ratio should be because of CECL. To a large extent, we're tied to the model, which relies on Moody's forecasts. For instance, the forecast released in mid-April was better than the one from the end of March, and we used the March forecast. Consequently, we likely have some additional releases. I expect that at some point that will stabilize, and as we grow our loan portfolio, we'll need to add reserves. It's challenging to predict. Regarding specific credits facing issues, there are measures we can consider, not just for ConnectOne but for everyone. It's difficult to project, and I don't anticipate significant changes from the current situation.

Frank Schiraldi, Analyst

Okay. Great. Thank you.

Operator, Operator

And we have reached the end of the question-and-answer session. And I will now turn the call over to management for any closing remarks.

Frank Sorrentino, Chairman and CEO

Well, thank you. I thank you for all the questions. I hope you found this to be an informative earnings call and I want to thank you for joining us and I look forward to speaking to you again at our next call. Thank you.

Operator, Operator

And this concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.