First Commonwealth Financial Corp /Pa/ Q2 FY2025 Earnings Call

Ladies and gentlemen, thank you for standing by. And welcome to the First Commonwealth Financial Corporation Second Quarter 2025 Earnings Release Conference Call. As a reminder, today's call is being recorded. I will now hand today's call over to Ryan Thomas, Vice President of Finance and Investor Relations. Please go ahead, sir.

Thank you, Tamica, and good afternoon, everyone. Thank you for joining us today to discuss First Commonwealth Financial Corporation's second quarter financial results. Participating on today's call will be Mike Price, President and CEO; Jim Reske, Chief Financial Officer; Jane Grebenc, Bank President and Chief Revenue Officer; Brian Sohocki, Chief Credit Officer; and Mike McCuen, Chief Lending Officer. As a reminder, a copy of yesterday's earnings release can be accessed by logging on to fcbanking.com and clicking the Investor Relations link at the top of the page. We've also included a slide presentation on our Investor Relations website with supplemental information that will be referenced during today's call. Before we begin, I need to caution listeners that this call will contain forward-looking statements. Please refer to our forward-looking statements disclaimer on Page 3 of the slide presentation for a description of risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Today's call will also include non-GAAP financial measures. Non-GAAP financial measures should be viewed in addition to and not as an alternative for our reported results prepared in accordance with GAAP. A reconciliation of these measures can be found in the appendix of today's slide presentation. And with that, I will turn the call over to Mike.

Thank you, Ryan. We are generally pleased with our performance this quarter. Our core earnings per share of $0.38 surpasses consensus estimates by $0.03 and was an improvement from the $0.32 reported in the first quarter. Our headline financial metrics were robust with core return on assets of 1.31%, a core pretax pre-provision ROA of 1.95% and a core efficiency ratio of 54.1%. We've consistently worked towards building a high-performing franchise. This quarter's results reflect those efforts and occurred just 1 year after absorbing a $13 million downdraft in annualized debit card interchange income due to the Durbin amendment as we crossed $10 billion in assets. Let me highlight a few key drivers this quarter, many of which build on the trends we've discussed in past calls. First, our net interest margin expanded significantly from 3.62% in the first quarter to 3.83% in the second quarter, a 21 basis point increase. This was driven primarily by improved loan yields and lower deposit costs and aided by the CenterBank acquisition and the roll-off of the macro hedges. This margin expansion, coupled with strong loan growth of 8.1% annualized, fueled a $10.7 million increase in net interest income over last quarter to $106.2 million. We've said before that our focus on optimizing our balance sheet and driving high-quality loan growth would position us well in a dynamic rate environment, and we're seeing those efforts bear fruit. Loan growth was broad-based with standout performance in Equipment Finance alongside meaningful contributions from small business, commercial, indirect and branch lending. Perhaps even more importantly, we grew both deposits and loans in 4 of our 6 geographic markets. On the fee income side, we saw a $2.1 million increase in noninterest income to $24.7 million, with strong contributions from mortgage, SBA, interchange, wealth and other service charges. The growth reflects our ongoing efforts to deepen customer relationships and expand our noninterest income streams. Our deposit franchise remains a cornerstone of our bank. Total deposits grew 9% year-to-date, reaching $10.1 billion. Notably, our Community Pennsylvania region which accounts for 37% of our deposit funding continues to perform exceptionally well. And we're pleased with our continual progress in Ohio, where organic growth and small but strategic acquisitions have built a $4 billion bank. Ohio also accounts for the bulk of our new loan growth. The integration of CenterBank, which closed on May 1 and converted in early June, is progressing smoothly. Center added $295 million in loans and $278 million in deposits bolstering our presence in Cincinnati. We're confident that the long-term value of this acquisition will enhance our Ohio franchise as we've seen with prior integrations. On the credit front, we experienced a continuation of positive trends in charge-offs and delinquency. Our second quarter provision expense was $12.6 million with $3.8 million tied to day 1 CECL provision for CenterBank, which we've excluded from our core income metrics. Of the remaining $8.8 million in provision expense, $2.6 million can be attributed to a net increase in specific reserves, which was driven by a $4.2 million specific reserve for a single commercial floorplan loan that was moved to nonaccrual and reserved for in the quarter. With respect to the floorplan credit, we are operating under a forbearance agreement. And as it remains an active workout, we appreciate your understanding that we'll not be able to provide a lot of further detail on today's call. The impact of this single credit and the inclusion of Center caused nonperforming loans to increase by $40 million from the prior quarter. Absent these 2 events, our core credit metrics for criticized, classified and nonperforming loans were all neutral quarter-over-quarter. Looking ahead, we remain optimistic about our trajectory. The momentum we've built through disciplined execution, strategic acquisitions, a regional business model and a customer-centric approach positions us well for the second half of 2025 and beyond. As we've said before, our goal is to be the leading community bank in our markets, delivering value to our stakeholders, while staying true to our mission of improving the financial lives of our customers and communities. I'll now turn it over to Jim Reske for a more detailed review of our financials, Jim?

Thanks, Mike. As Mike mentioned, the second quarter of 2025 was a strong quarter for us. Our earnings performance was driven by an expanding margin and strong fee income, so I'll focus on those 2 areas and wrap up with some brief thoughts on expenses and capital. The net interest margin or NIM, expanded 21 basis points to 3.83%. We closed our acquisition of CenterBank during the quarter, so the natural question is how much of that NIM improvement comes from the acquisition? Center's impact prior to marks was actually fairly neutral, which is not that surprising, considering that its first quarter NIM was almost the same as ours, just 3 basis points less and it was a relatively small acquisition for us. The marks on their loan portfolio, however, added 4 basis points to our NIM in the second quarter. Of that 4 basis points, 2 were related to the acceleration of marks related to loan prepayments, but the other 2 should continue. All of that means that most of our NIM expansion was due to our organic banking business. We did have the benefit of a maturity of $150 million in macro swaps for 2/3 of the quarter which added about 3 basis points to NIM in the second quarter and should add another 2 basis points next quarter. The rest of the NIM expansion was split between assets and liabilities with 9 basis points of the increase coming from assets and 5 from liabilities. New organic loan growth was strong at 8% annualized, and those loans came on to the book at rates that were 42 basis points higher than the ones that ran off. The cost of deposits fell by 8 basis points but we had increased borrowings by the end of the quarter, so the total drop in the cost of funds was only 5 basis points. Our forward NIM guidance this quarter is based on a revised baseline forecast that now contemplates 2 Fed cuts by year-end, down from 3 in last quarter's forecast. And in that case, we'd expect our NIM to expand to the low to mid 3.90s by the end of the year, give or take a few basis points as always. If there are no cuts at all, the NIM would expand another 5 basis points on top of that by the end of 2025. That guidance includes an additional 2 basis points in the third quarter of '25 from the macro swaps that matured last quarter, plus macro swap maturities of $25 million on August 25, $25 million on October 10, and $50 million on November 5. It also reflects expected pressure on loan spreads and the need to price deposits to fund our loan growth. All told, with the loan growth, the acquired Center portfolio and the improved margin, we believe that our net interest income should be between $110 million to $115 million per quarter for the remainder of 2025. Turning now to fee income. Our noninterest income increased by $2.2 million over the last quarter. There are about $600,000 of items here worth mentioning. First, we had about $375,000 in gains on the sale of OREO properties in the quarter. There's only about $1 million of OREO left in our books, so I wouldn't count on outsized OREO gains again anytime soon. Second, the $436,000 increase in BOLI income included $166,000 from a debt claim, while the rest of the increase comes from higher crediting rates on the BOLI portfolio. Other than that, our fee income improvements in the quarter were broad-based, and as Mike mentioned, included improved performance in fee income businesses like mortgage, SBA and wealth. Turning now to expenses. Operating expense, which excludes merger expense, was up by about $1.1 million from last quarter. Increased salary expense associated with the newly acquired Center employees was offset by lower incentive expense compared to last quarter, leaving the salary and benefits line item relatively unchanged. Some of the increased expense that shows up in other this quarter was associated with increased loan volume in areas like SBA. Finally, with regard to capital, capital ratio has improved due to retained earnings, along with a reduction in AOCI. Our tangible book value per share grew by 7.3% annualized from the previous quarter. There's very little buyback activity in the second quarter, but we ended the quarter with $6.2 million of share repurchase authority and just obtained an additional $25 million in share repurchase authority from our board yesterday. With that, we'll take any questions you may have.

I apologize, Jim, did you give a guidance range for expenses in the third quarter or the back half of the year?

I looked at the expenses, and they and the consensus appear to be on track. The consensus for the third quarter is $72.8 million and for the fourth quarter it is $73.1 million. Since you asked, I want to mention that in our internal budgeting and forecast, we see a slight decline in expenses and noninterest income that somewhat offset each other. We anticipate a bit of a decrease in the fourth quarter due to seasonality, as some business lines have customers more active in the summer months when shopping for cars and mortgages. This decline also coincides with certain expenses, like hospitalization, which decrease toward the end of the year due to our self-insurance approach. The consensus forecast shows both noninterest income and expenses consistent from the third to the fourth quarter, though both are expected to decline slightly in those quarters. This doesn't have a significant impact since the changes offset each other, but I appreciate your question.

And would both bounce back in the first quarter of next year?

Yes, probably.

Seasonal items, yes.

That's right. That's right. And we had a pretty fairly off the top of the head, like 4-ish percentage growth in expenses year-over-year pretty consistently.

Okay. Helpful. I guess, secondly, you talked about it at the end there on the repurchases, the stock price is higher now. You didn't buy back much or any in the second quarter, but yet the deal happening. I'm just curious kind of what the appetite is. Obviously, you've got the new authorization. You've got plenty of dry powder, if you will. So how are you guys thinking about repurchases now?

Yes, we will return to the market after a period of blackout and likely establish a price to repurchase our shares based on a pricing grid we have set with a maximum limit. For instance, in the previous quarter, after finalizing the CenterBank acquisition, we set a cap at $15.50 per share. If the price goes above that, we will not be repurchasing. Unlike some companies that commit to repurchasing a set percentage of shares regardless of the price, we prefer to maintain some cash reserves for when prices dip. We haven't established that price for the fourth quarter yet, but if I had to decide now, I would aim for somewhere in the $17 range, indicating we would buy back stock when the price is below $17 or $17.50. If it exceeds that, we will hold onto our cash and wait for better opportunities to buy back shares. That's our approach.

Okay. That's helpful. Lastly, I understand you can't provide more details about the loan that caused the increase in non-performing loans. However, can you share your thoughts on the charge-off trends moving forward? They've been low during the first half of the year, likely even below expectations. Are you expecting them to rise back to a more typical range in the second half, or do you have a clear outlook for charge-offs?

Yes. I'll let Brian Sohocki, our Chief Credit Officer, answer that right.

Yes. Thanks, Mike. I mean, we're obviously pleased with the quarter. I'd highlight that after experiencing the Centric charge-offs in 2023 and 2024, it was really diminished in the second quarter. We're down at 34,000 in that category. Across the portfolio, charge-offs have been at acceptable levels. Equipment Finance, indirect have outperformed industry peers. As you mentioned, we've reserved for this problem credit as well as others and work through those resolutions. But absent that one large relationship and with less headwind from Centric, I feel we've normalized. We've always referenced kind of a mid-20 basis point charge-off range, 25 to 30. And we could see return into those levels with the problem assets, but nothing else to note.

Jim, I guess I wanted to start on the margin. You mentioned loan yields, I think, replacing 42 bps higher this quarter. Any guidepost to maybe how that's gone in July and any way you want to frame up, I guess, the quarter, the best you can?

Yes. The forecasts we provide on the net interest margin are based on the ongoing trends from previous quarters and the continuation of our loan growth trajectory. We are optimistic that if past performance is any indication, we will maintain that balance. The numbers have been fairly stable, with a slight increase in the first quarter to around 46 basis points, compared to 43 in the second quarter. As long as the Federal Reserve does not lower interest rates, we expect this trend to continue for some time. Even if the Fed does initiate cuts, it will likely still remain positive. However, the projections for loan production are a significant factor in our overall net interest margin forecasts.

Karl, I would just add that the 42 basis points increase in commercial fixed is really driving that number up to around 111, and the indirect installment loan is likely at 73 basis points. This is contributing to the rise, especially with significant volume. While the mortgage and some other categories have good replacement yields, there isn't a lot of volume, to be honest. We expect these dynamics to continue.

If I could add to what Mike is saying, regarding all the loan categories, approximately 40% of new originations were fixed and 60% were variable. The variable rate loans are primarily a matter of spread, with replacement yields being 9 basis points positive this quarter, which isn't significant. However, the fixed loans had a 115 basis points positive yield. This contributes to the overall 42 basis points. The fixed replacement yields at 115 positive last quarter are expected to continue even with a few Federal Reserve rate cuts.

Okay. That's helpful. And then shifting topics, I guess, M&A has picked up for the industry. You guys have a pretty good track record of looking at lots of stuff and doing a few things that make sense on the smaller side. Just kind of curious what discussions you guys are having and what makes sense and what your priorities are?

We’ve had a couple of discussions, but not many. Jim and I have reviewed around 70 loans or opportunities over the past decade, which averages to about seven a year. This hasn’t significantly increased, but we usually step back from larger deals due to pricing, while smaller deals continue to interest us. We also need a clear path toward low-risk execution before we get overly enthusiastic. Our criteria might be a bit stricter than others. We favor smaller deals because we believe we can enhance their value by integrating our various verticals. Over the years, Jane Grebenc and now Mike McCuen have demonstrated great skill in indirect auto, mortgage, and small business, incorporating them effectively, possibly with a stronger focus on investment real estate to create added value. It’s crucial that deposits keep pace with loan growth, and our emphasis remains on funding those loans, even in periods when loan growth may not be robust. Mike or Jane, would you like to add anything?

I don't think so, Mike. I think you did a good job of sort of explaining our psyche.

Yes, I agree.

This is Charlie on for Kelly. Thanks for the question. You guys saw some strong organic loan growth this quarter. Just wondering if you could expand on kind of what you're seeing in the pipeline, this level of growth and general momentum is continuing.

I believe the pipeline looks quite promising. I anticipate that we will see a few more payoffs in the third quarter. Mike, would you like to elaborate on that?

I believe there may be a slight slowdown during the summer and some payoffs from the permanent market, but I anticipate that activity will remain steady at this level as we move into the fourth quarter, leading to a strong finish for the year.

Okay. Great. And then specifically, if you could touch on the equipment finance portfolio. You guys had some good momentum there. I know you brought on some new teams recently. Just like the growth there and if what you're seeing is sustainable and maybe what it could get up to in terms of a percentage of the portfolio?

Yes, I'll start there and let Mike finish. But we're about 3, 3.5 years in. Those loans are typically 5-year loans. So we're going to hit a wall here in about 1.5 years, even if we continue to put on loans at the pace we are where the portfolio will probably flatten out a bit. And so I'd start there. And we just like the business. We have a professional that's been doing this for about 3 decades and a good team. And we just like the credit quality we're seeing and the types of assets he's putting on. Michael, would you add...

Mathematically, the growth was huge because it's obviously a start-up operation. And I would just say that, so far, we're pleased with the type of assets we're financing and the credit quality of those assets. And furthermore, it's augmenting our bank relationships where historically, we did not have equipment finance options for clients, especially tax leases. We now have that. So we expect incremental value from that relationship.

Yes. We are very focused on growing Commercial and Industrial lending through our regional model, starting from small businesses with loan amounts of $50 million and $100 million and extending into the commercial sector. Most importantly, we aim to establish operating accounts and core deposit relationships with businesses to support our growth.

Growth was really strong this quarter. Are you going to stay at the mid-single digit core ex the acquisition level of growth? Or is there any upside to it? And maybe comment on the mix as well.

I believe the guidance will remain in the mid-single digits because securing funding is crucial for us. We would like to see the mix continue to shift towards C&I, commercial real estate, and owner-occupied commercial real estate, especially for loans currently at a 7% interest rate. Additionally, we operate as a larger community bank compared to others our size, holding about 40% of the market share. We recognize that credit fosters important deposit relationships, particularly with younger households. Thus, we aim to provide credit access to our over 200,000 customers across our six markets. We are open to opportunities in this area, and despite slightly lower rates, the replacement rates for these loans remain very favorable. Jane, do you have anything to add regarding consumer aspects, or Mike, regarding commercial?

Well, we've had a good run in the consumer businesses and that's all in market existing bank customers. So we have no interest in pinching that. Those are good relationships. As you said, small business, every one of those loans is really important to us. And the other consumer businesses indirect replacement yields have been good and mortgage is generally upward sale business for us. It's a fee business right now. We're not running it generally as a balance sheet business. So we like them all.

And I would just say for the benefit of all the employees listening and Jane insists upon core deposit relationships with everyone lending loan.

I appreciate the commentary. Shifted over to deposits, the NIM guide, I understand it. Can you just dive into some of the dynamics? And you point out that there might be some expected loan yield pressure in the model and then some deposit cost increases to fund that future loan growth. Can you kind of flesh that out a little bit?

Yes, Manuel, it's Jim. I'll share my thoughts with you. The model is projecting numbers slightly above the guidance I'm providing. However, I'm aware of certain initiatives we are implementing that are not reflected in the last model update. For instance, we assessed the deposit and loan growth in the second quarter and decided to increase our focus on deposit growth. Consequently, the rates we’re offering for that growth might put some pressure on our margins going forward. Additionally, we're noticing indications of tightening loan spreads, which seem to be recurring more frequently. The model suggests mid-range estimates of 3.97% and 4.00% for the third and fourth quarters, respectively. However, considering our insights, we adjust our guidance slightly lower to the low to mid-3.9 range. The loan repricing yields contribute 9 basis points to that. If that trend continues, it will be beneficial. If the Fed begins to cut rates, those yields could decrease, but there are positive macro factors coming into play by the end of the year. All of these elements inform our guidance and provide some context for our outlook.

That's great. The natural limit on the high end of the net interest margin is that competition can influence it at some point. How high could this reach next year? It really depends on interest rates. Do you have any thoughts on that discussion?

Yes, thanks for asking. It's still early to discuss next year. If the rates remain unchanged, the math continues to work in our favor, leading to increasing margins. However, as mentioned in last quarter's earnings call, the industry typically doesn't maintain net interest margins above 4% for long due to competition affecting both assets and liabilities. We've already observed some pressure on spreads in the commercial loan sector and the necessity to increase deposit pricing for growth. The projections suggest if the Fed doesn't cut rates, the potential is significant. However, realistically, we can't expect continuous growth without limits.

Yes. I would just add that if interest rates stabilize somewhat, it could stimulate demand, and we have a strong business model for consumer services. I believe we have more opportunities for cross-selling, and consumers, along with our small business clients, are in a healthier position, which is leading to increased fee income. Jim, the team, Jane, Mike, and I have aimed for a balanced approach between variable and fixed components, allowing us to perform well regardless of the direction of interest rates. I think our fee-related businesses would benefit as well. So I believe we can excel in either scenario.

And that gives me an opportunity, Manuel, to mention that since you're discussing the outlook for next year, we have more macro swaps maturing next year. There's $150 million maturing in May 2026 and another $25 million in October 2026. This will help improve the margin. Even if our forecast predicts four more cuts from the Fed in 2026, the model suggests that our net interest margin will remain slightly above 4% for next year. However, we will have more clarity as we refine our budgets and develop a more accurate forecast for the earnings calls in the third and fourth quarters of this year.

Okay. That's great. Anything you want to add, I'm all ears. Thanks for the commentary.

Maybe to start just a modeling question. Securities were down a bit this quarter. We now sit at 13.5% of total assets, that feels a little low versus where we've been recently. Maybe not, but it just feels a little low versus where we've been. Is that right? Do you like to be kind of in the 14% range or is 13.5% adequate?

No, we're okay with that; 13.5% is adequate. We want to ensure we have securities available to pledge against borrowings and other needs. It's down a little this quarter because our purchase activity was slow. We had pre-purchased some in previous quarters to get ahead, so I didn't feel the need to buy much this quarter. From a liquidity standpoint, we do not think we need a higher percentage. We have substantial available liquidity and there's a slide in our webcast presentation that discusses this. We have liquidity sources backed by assets we can pledge, totaling over $5 billion. Therefore, we don't feel the need to keep 15% or 20% of our assets in securities just for the sake of on-balance sheet liquidity. Our liquidity is very strong even without that, so we're very comfortable with our current position.

A couple of bigger picture ones. Strategically, just thinking about your markets, where from a market share position standpoint, do you feel like there's the most room for opportunity? We hear you talk a lot about Ohio as being an engine for growth. Can that will continue for a lot longer? And if not, where on the map might you see you go that could be the next kind of vehicle for growth the next Ohio for you?

I honestly believe and perhaps I'm delusional that I think between Cincinnati, Cleveland, Columbus, Pittsburgh and our community markets in Western PA, we could build out a bank that's 2x the size because we're just not a market maker. We're kind of on the fringes of market share. And I just see a lot of crumbs coming off the table from bigger banks. And I just feel like we can fill in and love to add some rural depositories, fill in those metro markets, maybe do a little bit of de novo. We have some cities between in Ohio, like Dayton. We also have opportunities in Western PA. And then we really haven't penetrated all of our lines of business in each of our markets. I just think within these markets, we can grow the company substantially. That doesn't mean we wouldn't go to Northern Kentucky or we wouldn't do something contiguous. We just feel like we have to be able to extend the brand thoughtfully and be able to cover just not outkick our coverage as they say, in football. And so I don't know that we're super interested in just getting to the next market. I think we can grow where we're at, honestly. Jane or Mike, anything you would add there?

The recent acquisition is a good example of that. It's in market. It gives us more a higher profile. But even with that, we're still maybe 10th in market share in that market. So we have a lot of upside. Those are the kind of things that we absorb quickly, we can move on to the next one and grow that market further.

We haven't fully tapped into our fee income businesses yet. We're performing well in Community PA and Pittsburgh, but we're just beginning to expand our regional model in areas like wealth management and insurance, as well as other aspects of our SBA operations. I'm really optimistic about opportunities in Western PA and Ohio.

Yes, Mike, to clarify further, there are two key points. First, our product penetration within the existing households still presents significant growth potential. As we improve our execution, there is considerable upside to be realized. Additionally, there are many excellent small and lower middle-market businesses between Pittsburgh and Cleveland that we are interested in. We have also invested in our treasury management offerings, enabling us to not only lend to these companies but also provide banking services.

Yes, absolutely. We can bank or lend to them and grow those deposits as well. Yes, I think this area, particularly Pennsylvania has been harder hit over the last 25 years. I just think the future could be brighter and we're seeing a significant investment everywhere.

Good afternoon, guys. Just quickly returning to credit quality. Of this floor plan nonaccrual, what percentage of your total nonaccrual portfolio does this represent? And then second, what's the overall health of the remainder of the portfolio?

Sure, I can take that. And I may have you repeat the second part, I couldn't hear it entirely. But it's approximately just over 30%. Our nonaccruals as you saw that I mean I referenced the nonperforming bucket increased $40 million to just shy of $100 and $31.8 of that was the floor plan. So pretty straightforward on that 100 basis to be just over 30%.

Brian, because you mentioned that the remainder of the increase in NPLs is from the acquisition, right?

Sure. Yes. So and that's a good point, Jim. So the remainder, if you look at the $40 million increase, $31.9 from the dealer floor plan, 8.4 from CenterBank acquisition. So absent those 2 events, we had a $300,000 or minimal, but $300,000 decrease in the quarter, we would have went from 65 basis points to 63 basis points.

And so is this large loan, floor plan loan, is that a legacy, an FCF legacy loan? Or was that acquired?

No. Yes, I'll tell you a little bit about the dealer floor plan portfolio. It is legacy and none of our floor plan has been acquired. At the 630, our floor plan segment was $154 million of outstandings. So a rather manageable small portfolio, 23 customers, and this was the only one over $20 million of exposure. We just have 2 others over $15 million with the rest really being granular inside $10 million of exposure. And the other portfolio is performing well, strong weighted average risk rating in compliance. So here, we really had an isolated event with the one dealer that happened to be the largest.

Okay. Excellent. And then in terms of just your larger relationships, is this like in the top 20 or 25 overall?

It was. We manage our borrowers closely, and we've internally monitored over $15 million. There are actually about 10 relationships over $25 million, so this is one of the larger ones.

And how are those relationships performing?

Very well. That portfolio is very strongly risk rated. All but one, I would comment or two would be better than past watch. So it's a strong portfolio, no early signs of or any early indications of weakness in that portfolio.

Okay. And did this credit have any impact on the margin this quarter?

There was a move to nonaccruals late in May. That's $300,000...

It did. Yes. So it probably took away a basis point or two.

Reversal of interest in May or April. That's right. Yes.

At this time, there are no further questions. I will now hand the call back over to Mike Price, President and CEO.

Very good. Thanks for the questions. It's always good to engage. Excited about the future of our company to grow organically, remain disciplined with M&A, to make sure that our low-cost deposits keep pace with our commercial loan growth and just do a better job of cross-selling our clients and bringing them fee income opportunities. But just thank you, and just have a good day.

This concludes today's call. Thank you for joining. You may now disconnect your lines.