Earnings Call Transcript - EBC Q3 2025

Operator, Operator

Welcome to the Eastern Bankshares, Inc. Third Quarter 2025 Earnings Conference Call. Please note, this event is being recorded for replay purposes. In connection with today's call, the company posted a presentation on its Investor Relations website, investor.easternbank.com which will be referenced during the call. Today's call will include forward-looking statements. The company cautions investors that any forward-looking statements involve risks and uncertainties and is not a guarantee of future performance. Actual results may materially differ from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are described in the company's earnings press release and most recent 10-K filed with the SEC. Any forward-looking statements made represent management's views and estimates as of today, and the company undertakes no obligation to update these statements because of new information or future events. The company will also discuss both GAAP and certain non-GAAP financial result measures. For reconciliations, please refer to the company's earnings press release. I'd now like to turn the call over to Bob Rivers, Eastern Executive Chair and Chair of Board of Directors.

Robert Rivers, Executive Chair

Thank you, Joelle. Good morning, everyone, and thank you for joining our call. With me today is Eastern's CEO, Denis Sheahan; and our CFO, David Rosato. Eastern recently celebrated its fifth anniversary as a public company. Before Denis and David walk through our results, I wanted to take a moment to acknowledge this important milestone and share why I'm excited about our future. As shown on Slide 2, today, Eastern is a $25.5 billion organization with the fourth largest deposit market share in Greater Boston, and we are the largest independent bank headquartered in Massachusetts. Since our IPO, we have very intentionally expanded our footprint across attractive markets and built the scale we need to invest in the business while maintaining the understanding, accessibility, and engagement that makes us our region's hometown bank. This strategy, and most importantly, our people, our culture, and our extensive community involvement are what enable us to expand and deepen customer relationships, attract top talent, and capture growth opportunities. This has driven meaningful improvement in earnings, profitability, and shareholder returns. One of the keys to our success has been our ability to stay true to who we are while growing and positioning Eastern for the future; that includes bringing in talented people to complement the many long-time Eastern employees who have contributed to our success. I’m so proud of what we’ve accomplished together. We are well positioned to serve our customers and communities with excellence, which underpins our ability to drive continued shareholder value. Now I'll turn it to Denis.

Denis Sheahan, CEO

Thank you, Bob. As someone who's been in the Boston market for more than three decades, I can attest to how impressive the transformation of Eastern has been over the last five years. I'm incredibly proud to be part of this team, and I share Bob's enthusiasm about the future and the opportunities ahead. Turning now to the quarter. We are very pleased to have received the required regulatory approvals for our merger with HarborOne, which is on track for a November 1 close. This partnership strengthens Eastern's leading presence in Greater Boston and expands our branch footprint into Rhode Island, providing even more opportunities for organic growth. We're excited to bring together two banks that share a strong commitment to customers, community partners, and employees. I want to thank the teams from both organizations for their outstanding efforts, and we look forward to welcoming our new customers and colleagues to Eastern as we build on the strong legacies of both institutions. We're also pleased to announce the resumption of our share buyback program, which underscores our confidence in the future. Third quarter operating earnings of $74.1 million increased 44% from a year ago and generated solid returns. Operating return on assets of 1.16% was up 34 basis points from the prior year quarter, and operating return on average tangible common equity increased 300 basis points to 11.7% over the same period. On a linked quarter basis, operating income was down from a very strong second quarter, which benefited from higher-than-expected net discount accretion due to early loan payoffs and fee income. Our ongoing strategic investments in hiring talent, and commercial lending continue to deliver strong results. Over the past year, we have increased the number of relationship managers by approximately 10%. Eastern has become an attractive destination for high-quality talent, particularly those with large bank experience. We have the size to matter competitively, yet are small enough for them to apply their trade and provide a sense of ownership in building a business. Our loan growth continues to reflect the impact of this strategy. Total loans grew 1.3% linked quarter and 4.1% year-to-date, driven primarily by strong commercial lending results. The commercial portfolio has grown just under 6% since the beginning of the year, and the pipeline remains solid, ending the quarter at approximately $575 million. Wealth management is an important component of our long-term growth strategy, and the wealth demographic in our footprint provides significant opportunities. Beyond strong investment solutions and results, we provide comprehensive wealth services, including financial, tax, and estate planning as well as private banking. Assets under management reached a record high of $9.2 billion in the third quarter driven by market appreciation and modest positive net flows. We've been pleased with the integration of the Eastern and Cambridge Trust wealth teams and the strong retention of clients and talent since the merger. We're also enhancing our internal distribution capabilities. Our retail branch network through training and greater awareness is becoming a meaningful driver of referrals. Notably, in the first half of this year, retail generated more funded wealth business than Eastern achieved in any prior full year. On the commercial side, the strengthening alignment between our wealth management and banking businesses is in the early stages but beginning to produce results. There is still a lot more work ahead, but we are encouraged by the momentum of our wealth business, which was recently named the largest bank-owned independent adviser in Massachusetts for the second consecutive year. Finally, our capital position remains robust, and we continue to generate excess capital. Tangible book value per share at quarter end was $13.14, an increase of 5% from June 30 and up 10% from the beginning of the year. In addition to using capital for organic growth, we are committed to returning capital to shareholders through opportunistic share repurchases and consistent and sustainable dividend growth. As such, we are very pleased the Board authorized a new 5% share repurchase program of up to 11.9 million shares. David, I'll hand it over to you to review our third quarter financials.

David Rosato, CFO

Thanks, Denis, and good morning, everyone. I'll start with Slides 4 and 5. We reported a net income of $106.1 million or $0.53 per diluted share for the third quarter. This net income includes a GAAP tax benefit related to losses from the investment portfolio repositioning completed in Q1, which will accrue through 2025. On an operating basis, earnings were $74.1 million, or $0.37 per diluted share, which is a decrease from a very strong second quarter that benefited from higher-than-expected debt discount accretion and fee income. Year over year, operating net income increased by 44%, reflecting a margin expansion of 50 basis points and a significant improvement in the efficiency ratio from 59.7% to 52.8%, driven by higher revenues and careful expense management. We are pleased with the ongoing strength of our profitability metrics. Although the operating return on assets (ROA) of 116 basis points and return on average tangible common equity of 11.7% are lower than in the second quarter, both have improved significantly from a year ago when they were 82 basis points and 8.7%, respectively. We remain focused on achieving sustainable growth and profitability while delivering top quartile financial performance. Moving to the margin on Slide 6, net interest income and margin declined from the second quarter mainly due to higher deposit costs and lower net discount accretion. Net interest income was $200.2 million, or $205.4 million on an FTE basis, decreasing by 1%. This total includes net discount accretion of $10 million, down from $16.5 million in the second quarter, which was higher than anticipated because of early loan payoffs. Excluding net discount accretion, net interest income would have risen by approximately 3%. The margin dropped by 12 basis points to 3.47%. The yield on interest-earning assets fell by 6 basis points, while the costs of interest-bearing liabilities rose by 7 basis points. Net discount accretion contributed 17 basis points to the margin, down from 29 basis points in the previous quarter. Without net discount accretion, the margin would have remained flat quarter-over-quarter. Turning to Slide 7, noninterest income was $41.3 million, a decline of $1.6 million from the second quarter. On an operating basis, noninterest income reduced to $39.7 million, down by $2.5 million. The drop was primarily due to $1.9 million in reduced income from investments held for employee retirement benefits compared to a very strong Q2. This decline was partially offset by a $1 million reduction in benefit costs included in noninterest expense. Additionally, miscellaneous income and fees fell by $1.2 million mainly due to a loss on the sale of commercial loans from our managed assets group, along with lower commercial loan and line fees. These challenges in fee income were somewhat counterbalanced by an increase of $300,000 in both deposit service charges and investment advisory fees during the quarter. Moving to Slide 8, we highlight wealth management, which is our primary fee business. Assets under management have reached a record $9.2 billion, driven by market appreciation and modestly positive net flows. Wealth management fees, which represent nearly half of total noninterest income, increased by $300,000 or 2% from Q2, primarily reflecting higher asset values. The prior quarter had additionally benefited from approximately $700,000 in seasonally higher tax preparation fees. On Slide 9, noninterest expense was $140.4 million, which is an increase of $3.5 million from the previous quarter, due to higher operating expenses and costs related to mergers. Merger costs amounted to $3.2 million, up $600,000 from the prior quarter. The operating noninterest expense reached $137.2 million, an upturn of $2.8 million. This rise was largely driven by $3.3 million in increased salaries and benefits due to higher performance-based incentives, an additional pay period in Q3, and seasonal staff. Technology and data processing costs grew by $1.4 million, while occupancy and equipment expenses rose by $500,000. These increases were partly offset by a $2.3 million decrease in other operating expenses. Moving to the balance sheet, starting with deposits on Slide 10. Period-end deposits stood at $21.1 billion, reflecting a decrease of $104 million, or less than 1%, from Q2. A decline in checking balances was somewhat offset by higher balances in money market accounts and CDs. On an average basis, deposits increased by 1.4%. We continue to benefit from a favorable deposit mix, with nearly half in checking accounts providing a stable and low-cost funding base. Importantly, we remain fully funded by deposits with virtually no reliance on wholesale funding, enhancing our balance sheet strength. Total deposit costs of 155 basis points rose slightly from the second quarter, as the costs of interest-bearing deposits increased by 8 basis points, largely driven by money market accounts. We remain committed to growing our deposits to support our funding strategy. Given the intensifying competition for deposits in our region, we are disciplined in balancing the needs of our strong deposit base with margin considerations. Looking ahead, as we integrate HarborOne deposits, we expect deposit costs to stay somewhat elevated. However, as the Fed eases, we will work to lower deposit costs and aim for deposit betas similar to those experienced during the latest tightening cycle, around 45% to 50%, albeit with lags corresponding to Fed actions. Turning to Slide 11, period-end loans increased by $239 million or 1.3% linked quarter, driven primarily by strength in commercial lending. Continued momentum from Q2, particularly in commercial real estate (CRE), boosted balances by $133 million, while broad-based growth in commercial and industrial (C&I) lending raised balances by $104 million. Consumer home equity lines also continued their steady growth, adding $45 million in outstanding loans. Commercial lending has shown strong year-to-date performance with nearly $700 million in loan growth since year-end. This strong performance is attributed to our strategic hiring of growth-oriented talent, the continued strength of Eastern's brand, and our long-standing relationship managers. Our meaningful scale enables us to offer a broad range of products and services, coupled with our deep local expertise and presence, which sets us apart. Slide 12 provides an overview of our high-quality investment portfolio. The portfolio yield increased by 1 basis point to 3.03% compared to Q2. Furthermore, the AFS unrealized loss position continued to improve, ending the quarter at $280 million after tax, down from $313 million at June 30 and $584 million at year-end. On Slide 13, capital levels are robust, as indicated by CET1 and TCE ratios of 14.7% and 11.4%, respectively. In line with our commitment to returning capital to shareholders, the Board has authorized a new share repurchase program of up to 11.9 million shares, equating to 5% of shares outstanding, following the completion of the HarborOne merger. This program is set to expire on October 31, 2026. Additionally, the Board approved a $0.13 dividend to be paid in December. As shown on Slide 14, asset quality remains excellent, evidenced by net charge-offs to average loans of 13 basis points, reflecting the quality of our underwriting and our proactive risk management approach to swiftly address issues as they arise. Although nonperforming loans rose by $14 million linked quarter to $69 million, this increase was primarily due to a single mixed-use office loan that has been part of our managed assets for some time, with a portion being charged off during the quarter and previously reserved for. Importantly, we believe the worst is behind us regarding office loan problems, and we maintain a cautiously optimistic outlook on credit as overall trends continue to be favorable. Our reserve levels remain strong, showing an allowance for loan losses of $233 million or 126 basis points of total loans, consistent with $232 million or 127 basis points at the end of Q2. Criticized and classified loans rose modestly to $495 million or 3.82% of total loans, up from $459 million or 3.6% at the end of Q2. Lastly, we recorded a provision of $7.1 million, down from $7.6 million in the previous quarter. On Slides 15 and 16, we provide details on total commercial real estate and investor office exposures. Total commercial real estate loans amount to $7.4 billion. Our exposure is predominantly within local markets we know well and is diversified across sectors. The largest concentration is in multifamily housing, totaling $2.7 billion, a strong asset class in Greater Boston due to ongoing housing shortages. We have no multifamily nonperforming loans and have not experienced charge-offs in this portfolio for well over a decade. Our focus remains on investor office loans, with a portfolio of $813 million, representing 4% of our total loan book, which decreased by $15 million linked quarter. Criticized and classified loans amounted to $138 million, about 17% of total investor office loans, compared to $118 million or 14% of total investor loans at the end of Q2. Our reserve level of 5.1% remains conservative. As previously disclosed, our investor office loan portfolio includes relatively limited exposure to the lab life sciences sector, consisting of four loans totaling $99 million, or less than 1% of total loans. None of these loans were made as speculative construction transactions, all are accruing, and we continue to monitor them as part of our ongoing review of the office portfolio. Before I hand it back to Denis, I’d like to provide a brief update on the HarborOne merger, which is expected to close on November 1. We are reiterating the key assumptions announced earlier this year and are on track to achieve projected cost savings, one-time charges, and gross credit market estimates. We will provide updated interest rate marks during our fourth-quarter call in January. As a reminder, the original announcement anticipated 80% stock consideration, at the midpoint of that range. Based on our stock's performance, we are now estimating 85% stock consideration. We also plan for the sale of the HarborOne securities portfolio, using the proceeds to reduce FHLB borrowings. As of September 30, HarborOne's period-end loans and deposits were $4.763 billion and $4.433 billion, respectively. If approved, we aim to early adopt changes to the CECL accounting standard to eliminate the current double counting of expected credit losses. I will now turn it back over to Denis.

Denis Sheahan, CEO

Thanks, David. We are pleased with this quarter's results and are excited about closing the HarborOne merger. We're the leading local bank in Massachusetts, and this merger strengthens our presence south of Boston and into new markets in Rhode Island, providing opportunities for organic growth for many years to come. The continued improvement in our profitability will allow us to return meaningful amounts of capital and enhance shareholder value. This concludes the presentation. I will now open the call for questions.

Operator, Operator

Your first question comes from Damon DelMonte with KBW.

Damon Del Monte, Analyst

First question, I know it's a tricky quarter since you have HarborOne closing next week and we're in the middle of the fourth quarter. David, when we think about the margin, there’s obviously some noise on the fair value accretion side. However, if we look at the core margin, as you noted, it's flat quarter-over-quarter. Do you believe it can hold steady in the fourth quarter and then gradually increase into '26? Or do you think that competitive pressures on deposits might have an impact on that?

David Rosato, CFO

Let's discuss both aspects of that, Damon, and good morning. The core Eastern margin has two main contributors. One is accretion income, which unfortunately decreased by $6.5 million in Q3. This is uncertain. The typical run rate is approximately $11 million to $12 million. Last quarter, we exceeded that trend, but this quarter, we fell slightly behind. This fluctuation impacted asset yields. On the other hand, the deposit side has seen increased competition. We mentioned this last quarter in relation to retail and government banking, and I expect that pressure to continue in Q4. Consequently, deposit costs will likely remain roughly stable, although there’s some uncertainty on the asset side. Additionally, we will include two months of HarborOne in our Q4 figures. We believe the original margin expansion estimates and projections we provided back in April for the combined institution still hold true.

Damon Del Monte, Analyst

Okay. Great. And then how about as far as just like on the expense side, it was higher this quarter, you had some elevated comp and benefit type costs and stuff. Again, kind of looking at the core Eastern expenses, do you think that kind of stays at a similar level here going into the fourth quarter? Or could it tick even higher just given year-end accrual true-ups and things of that nature?

David Rosato, CFO

I believe we were somewhat inflated on the compensation line this quarter, but I expect that will stabilize in the fourth quarter. There has been a slight increase in technology expenses, which will likely remain steady. Therefore, I am not particularly worried about our expense base at this time. Additionally, telegraph is expected to remain roughly flat in the fourth quarter or decrease slightly.

Damon Del Monte, Analyst

Okay. Great. And then with the deal closing here next week, kind of just curious on your updated thoughts on appetite for additional deals over the coming months or in 2026. Is that something you guys are considering? Or I think messaging has also been more about a focus toward organic growth. So just kind of wondering how you balance those two avenues.

Denis Sheahan, CEO

Damon, it's Denis here. And that sort of remains consistent. Look, our focus right now is clearly on continuing to build on the good organic growth that we've had in recent quarters on the important integration of the HarborOne merger. We feel good about that opportunity and are looking forward, as I said in my comments earlier, to working with our new customers, our new colleagues at HarborOne but as you can well imagine, there's a lot of work to do there on that integration. We have no plans in terms of additional mergers in the near term. But that said, we think if a merger opportunity were to arise, it's in our shareholders' best interest for us to evaluate the opportunity. It doesn't mean we would execute, but certainly, it's lower on our list of priorities when we think about capital allocation. But as Bob indicated with his opening statements, and you look at the progress at Eastern Bank since we had our IPO, the performance improvement is very material and significant, and the opportunity of the new markets that those mergers provided are a meaningful contributor to our operating performance. So we think if the opportunity arises, it's in our shareholders' best interest to consider it, but it's not our focus today.

David Rosato, CFO

I would just add to that. It's clear when you think about deployment of capital from our perspective, nothing has changed. It's organic growth. It's now we're excited that with the Board's approval of the share repurchase, so we can be back in the market. It's supported the dividend. And then by far, #4 is anything around M&A.

Damon Del Monte, Analyst

Got it. Okay. Great. And then just lastly, David, real quick. You had mentioned before, like last quarter about the possibility of another restructuring, but it would kind of depend on market conditions and kind of how you felt the best use of capital once HarborOne has closed. Any updated thoughts on that if you're considering that still? Or is it the focus more on organic growth and buybacks only?

David Rosato, CFO

We're not currently focused on any further portfolio restructuring of Eastern Bank. Our emphasis is on organic growth, where we have seen strong success so far this year. As Denis mentioned, our pipeline is strong, and our brand is well-received in the market. We're also re-engaging in buybacks. There are no plans right now for any additional portfolio restructuring.

Operator, Operator

Your next question comes from Mark Fitzgibbon with Piper Sandler.

Mark Fitzgibbon, Analyst

David, you had mentioned in your comments earlier on the Wealth Management business. I think there was $550 million increase in AUM this quarter. A lot of that was market driven. Could you break out for us how much of the $550 million was market-driven versus flows?

David Rosato, CFO

Yes, it was predominantly market-driven good equity and fixed income markets. The net flows in the quarter were a little over $50 million positive.

Mark Fitzgibbon, Analyst

Okay. Great. And then secondly, are there plans within the wealth management business to hire more people or to acquire other RIAs or wealth businesses?

Denis Sheahan, CEO

Mark, this is Denis. So yes, we are looking for talent, and we have brought on some existing talent in the wealth area. We're active and engaged in opportunities to bring in talent, whether it be in business development or portfolio relationship management. So hopefully, you'll hear more from us about that in the coming quarters. And in terms of M&A in the RIA space, no, we're not interested in that to any degree. It's challenging for those opportunities to work from a variety of perspectives. One being culture and integration and another being the financial challenges to make them work. So we're not interested at this point in any kind of M&A there.

Mark Fitzgibbon, Analyst

Okay. And then Denis, I guess I'm curious, and I know it's a little awkward, but any comments on the slide presentation that Holdco put out earlier this week. I guess I'm curious do you agree with it? Do you plan to implement any of the things that they've proposed and do you plan to meet with them?

Denis Sheahan, CEO

Well, Mark, we're very open to engaging with our shareholders. We participate in many investor conferences and road shows, and we are happy to connect with any of our investors. Our shared objective with our investors is to enhance the company's performance even further and to foster long-term value for our shareholders. We welcome conversations from anyone. More importantly, I want to emphasize our focus on the future; we are excited about where the company is headed. We feel well-positioned today, especially with the combination with HarborOne, to execute our strategy aimed at achieving top quartile financial performance—that’s our company’s goal and aspiration. We believe this will lead to attractive returns for our shareholders. That is our primary focus. I won’t comment on specific disclosures made by others, but rest assured, our team is dedicated to driving performance, which motivates us each day and excites us. We will continue to concentrate on that.

Operator, Operator

Your next question comes from Laurie Hunsicker with Seaport Research.

Laura Havener Hunsicker, Analyst

Just wanted to go over to Slide 16, your office exposure here. And I just want to make sure I'm reading this right. It looks like your office nonperformers jumped linked quarter. But I guess what's also new is you've got $19 million now in nonaccruals maturing in the first quarter there in '26. And so I'm just wondering how we should think about that with respect to the provision just since that's new. Can you help us understand that a little bit?

Denis Sheahan, CEO

Sure, Laurie. There is one loan that originated in 2016. We have been monitoring it for several years, especially since COVID. This aligns with our previous statements that there would be a few loans in the portfolio we would need to address. In the larger context, these are small numbers. We began building reserves for this loan, which will mature next year, and that's why it appeared in the schedule. We expect to reach a full resolution, likely not in Q4 but into Q1. The loan is on our books at what we believe will be the final resolution value. There isn’t anything significant or different to report about this loan or the rest of the portfolio.

Laura Havener Hunsicker, Analyst

Okay. And then just with respect to that loan, I mean, can you share with us occupancy or anything around that? Or if you expect to extend or just how you think about it.

Denis Sheahan, CEO

I will share one fact. It's 85% occupied.

Laura Havener Hunsicker, Analyst

That's great. That's helpful. Okay. And then spot margin, do you have an update on that for September?

David Rosato, CFO

Yes. So it was 3.48%, so 1 basis point higher than the quarter.

Operator, Operator

Your next question comes from Janet Lee with TD Cowen.

Sun Young Lee, Analyst

Apologies if I missed it in the prepared remarks earlier, but if I were to interpret your comments about net interest margin, as we look ahead to 2026, it seems that although deposit costs were somewhat elevated this quarter due to competition, you expect to maintain your net interest margin as rates decrease? Is that the correct way to understand this?

David Rosato, CFO

Yes, that's generally accurate. I wanted to expand on what Damon mentioned regarding two key factors. First is the accretion income, which fluctuates; last quarter it was slightly above the trend, while this quarter it is a bit below. It's difficult to predict, as we all know. On the deposit side, during Q3, there was one Fed move. We were slow to adjust our rates downward, resulting in a beta lower than our typical long-term range of 45% to 50%. The competition in our market remains strong. We are just five days away from what appears to be a certain Fed decision to raise rates again, followed by another increase in December. As a result, we will be lowering our rates in response to the Fed's actions. Our message for the near term is that our growth in market share may be gradual. However, over the long term, throughout this full cycle, we should anticipate achieving our full betas.

Sun Young Lee, Analyst

That's helpful. As a follow-up on the bigger picture, Denis, it's been a little over a year since you joined Eastern from Cambridge. You've had the chance to assess the Eastern franchise and the business overall. Given its historical roots as a mutual conversion and the many mergers and acquisitions you've undertaken, growth has been relatively slow compared to stand-alone Cambridge or Eastern. As you evaluate Eastern's franchise, which areas of the business do you believe are underutilized? Where do you see the most potential for growth or increased profitability? I understand you're experiencing acceleration in commercial and industrial opportunities, but are there other segments of the business that you think could be enhanced?

Denis Sheahan, CEO

Janet, thank you for your question. I would reflect on it this way. We have seen significant increases in the company's profitability, driven by the strategy implemented by the team before David and me, which has positioned us well. To continue growing our profitability, I focus on the areas we've been emphasizing in our comments, particularly the commercial lending team. This was actually one of the factors that attracted me to merge Cambridge into Eastern, given Eastern's journey over several years, starting as a mutual and then transforming to develop its commercial banking division. The talent in this team is exceptional, they can execute effectively, and they’re eager about the growth opportunities ahead. The Commercial Banking division is certainly one area of focus. Additionally, while not in any specific order of importance, wealth management is another. From a demographic standpoint, while Massachusetts and New England overall may not have significant population growth, they do have a strong base of wealth and household income. Our ability to lean into that business will take time, as I have seen in the past when building a wealth management business. I believe we will enhance our performance significantly; it's low capital intensive and very advantageous for our return on assets. We have strong capabilities in that area as well. Looking at our retail and deposit franchise, we have new leadership and a great team, making me optimistic about our prospects there too. Overall, we’re fortunate to have many opportunities, which come down to the talent on our team and our market execution, including in our newer markets. Regarding merger integrations, they take years to fully realize. Reflecting on the Century merger, I believe it isn't fully integrated yet. We definitely haven't maximized the potential in the old Century, old Cambridge, and soon-to-be HarborOne markets. Therefore, I see a lot of opportunities ahead. The management team is energized and ready to move forward. That's how I would answer your question, Janet.

Operator, Operator

There are no further questions at this time. I will now turn the call over to Bob Rivers for closing remarks.

Robert Rivers, Executive Chair

Well, thanks again, everyone, for joining us this morning. Best wishes for a very happy and healthy holidays, and we look forward to talking with you again in the new year.

Operator, Operator

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.