Earnings Call Transcript - SMBK Q4 2024

Operator, Operator

Hello everyone, and welcome to the SmartFinancial Fourth Quarter 2024 Earnings Release and Conference Call. My name is Ezra and I will be your coordinator today. I will now hand you over to Nate Strall, Director of Investor Relations to begin. Please go ahead.

Nathan Strall, Director of Investor Relations

Good morning, everyone and thank you for joining us for SmartFinancial's fourth quarter 2024 earnings conference call. During today's call, we will reference the slides and press release that are available in our Investor Relations section on our website, smartbank.com. Billy Carroll, our President and Chief Executive Officer, will begin our call, followed by Ron Gorczynski, our Chief Financial Officer, who will provide some additional commentary. We will be able to answer your questions at the end of the call. Our comments include forward-looking statements. These statements are subject to risks and uncertainties and the actual results could vary materially. We list these factors that might cause results to differ materially in our press release and in our SEC filings, which are available on our website. We do not assume any obligation to update any forward-looking statements because of new information, early development, or otherwise, except as may be required by law. During the call we will reference non-GAAP financial measures related to the company's performance. You may see the reconciliation of these measures in the appendices of the Earnings Release and Investors presentation filed on January 21st, 2025 with the SEC. And now I'll turn it over to Billy Carroll to open our call.

Billy Carroll, CEO

Thanks, Nate, and good morning, everyone. It's great to be with you and thank you for joining us today and for your interest in SMBK. I'll open our call today with some commentary and hand it over to Ron to walk through some numbers in greater detail. After our prepared comments, we'll open it up with Ron, Nate, Rhett, Miller, and myself available for Q&A. So let's jump right in. A really nice quarter for us wrapping up a really nice year as we execute on what we've been messaging. We posted net income GAAP and operating of $9.6 million for the quarter or $0.57 per diluted share. I continue to be very proud of the way our team is performing and I'm excited to watch us gain the operating leverage as we've anticipated. Jumping into the highlights. I'll be referring to the first few pages in our deck, pages 3 through 6. First and in my opinion one of the most important metrics, we continue to increase the tangible book value of our company, moving up to $22.85 per share including the impacts of AOCI and $24.25 excluding that impact. That's over 9% annualized quarter-over-quarter excluding the AOCI movement. Looking at the graph on the lower right on page 6, you'll see the value increase we continue to deliver for our shares. Our balance sheet growth was outstanding in the last quarter of the year. On the loan side, we grew at a 20% annualized pace for Q4 and grew at 13.4% year-over-year as our market teams are continuing to add outstanding new relationships. On the deposit side of the balance sheet growth was equally impressive with quarter-over-quarter annualized growth at approximately 34%. That number includes some temporary short-term noninterest-bearing funding that came in late in the year, but even taking that out, we were still at near 30% annualized on core deposit growth. Ron will provide more detail on that in a moment. Our history of strong credit continues with the metric dropping to just 19 basis points in NPAs. Credit is always a focus for our company and I'm proud to see these numbers continue at exceptionally low levels. Total revenue came in at $46.8 million as net interest income continued to expand as we had anticipated. We also had another nice noninterest income quarter. Noninterest expenses were up just slightly to over just at over $32 million. A good portion of that delta from the prior quarter relates to increased incentive compensation related to robust growth in the second half of the year. I feel we can hold our expense growth to very reasonable levels as we look into 2025. As discussed in previous quarters, we continue to focus on operating leverage expansion driven by solid revenue growth and thoughtful investment on the expense end. Looking at the charts on pages 5 and 6, you'll see our trend lines continue to move in the right direction. One I would like to highlight is the operating PPNR chart. Throughout 2024 we saw continued upward momentum driven by growth and margin expansion, a trend we expect to accelerate throughout this coming year. So just a couple of additional high-level comments for me. On growth, we are extremely pleased with the results in regard to the loan side for the year. We grew our gross loan book by approximately $462 million, again about 13.4% year-over-year. The sales momentum in our company is very good and it's balanced across all of our regions. We've done this while increasing our loan portfolio yields throughout the year despite seeing rate cuts. Our total yield at the end of the year was 6.04% including fees and we continued to hold at 5.95% without fees. As I mentioned just a moment ago, the deposit growth we've shown has been very impressive. We remixed a little bit this year, trading out of some higher rate public funds, but growth in true core has been outstanding. Our loan-to-deposit ratio has increased a little throughout the year and now is at 83% at year end, which is a nice spot for us. This position gives us continued flexibility to leverage our strong deposit base. Our business development pipelines continue to feel solid. I'm still holding to our past guidance of mid to high-single-digits on loan growth as we look at them over the next few quarters, even though we bettered that in 2024. I also expect that we can pace deposit growth to fund that organically. I'm going to stop there and hand it over to Ron to let him dive into some details. So Ron, take it from here, please.

Ronald Gorczynski, CFO

Thanks, Billy, and good morning, everyone. I'll start by highlighting some key deposit results. As Billy mentioned, we had a very strong loan growth quarter fully funded through our deposit production. During the quarter we experienced non-broker deposit growth of $350 million, nearly 34% on an annualized basis, resulting in a loan-to-deposit ratio of 83%. The weighted average cost of non-broker production was 3.37%. Total interest-bearing costs for the deposit portfolio decreased 18 basis points to 3.02% and were 2.97% for the month of December. The deposit portfolio composition remained relatively consistent with a slight increase in noninterest-bearing deposits, increasing at 21% of total deposits. With some transitory noninterest-bearing deposits in our year-end totals, we anticipate that this percentage will stabilize around 20% moving forward. Net interest margin expanded quarter-over-quarter increasing 13 basis points to 3.24%. This expansion is attributable to several factors including our prior quarter's deposit repositioning efforts and a favorable 7.08% weighted average yield on new loan originations resulting in a total loan portfolio yield increase of 2 basis points to 6.04% which includes fees. Net interest income grew $2.8 million or 31% annualized supported by $150 million of growth in interest-earning assets. Looking ahead, we anticipate our margin to continue expanding throughout 2025 although at a slower rate than observed in the past two quarters. The primary factors driving this margin expansion are new loan production and the amortization and maturities of lower-yielding fixed and adjustable-rate loans. We anticipate a reduction in deposit costs to progress at a slower pace due to the decreased probability of further Federal Reserve rate cuts and the higher costs associated with new deposit production. As a result of these factors and current market conditions, we anticipate a first quarter 2025 margin in the 3.2% to 3.25% range. Our quarterly provision expense for credit losses amounted to $2.1 million primarily from higher loan growth. Net charge-offs to average loans were 2 basis points on an annualized basis. Overall, the bank's asset quality remains strong with non-performing loans of total loans at 20 basis points and the allowance for credit losses remaining steady at 96 basis points of total loans. Operating noninterest income for the quarter totaled $9.0 million exceeding expectations. This performance was driven by increased revenue from insurance commissions and mortgage banking which contributed $355,000 and $131,000 respectively. However, this was partially offset by a decrease of $500,000 in investment services revenue primarily due to the decreased volume experienced during the quarter. Operating expenses were $32.3 million, slightly above our third quarter guidance due to higher performance-based incentive accruals and commissions from strong Q4 performance. Additionally, increased other real estate and loan-related expenses increased from the writing down of some repossessed equipment in our equipment finance division to expedite the liquidation process. Looking ahead to the first quarter, we are forecasting noninterest income in the mid to high $7 million range and noninterest expense in the range of $32 million to $32.5 million with salary and benefit expenses in a range of $19.5 million to $20 million as accruals for incentive-based compensation will fluctuate based on our performance. We continue to focus on cost management efforts centered on controlling expenses. Additionally, we previously reported the establishment of a real estate investment trust subsidiary to monitor and manage the performance of certain real estate loans and to create a more tax-favorable structure. There were some final adjustments that slightly elevated our tax rate, but it is anticipated that our corporate effective tax rate will stabilize at the 20% range. I'll conclude with capital. During the fourth quarter, we allocated significant capital to high-return lending opportunities which in turn slightly leveraged our capital ratios. Coupled with a $6.3 million decrease in our accumulated other comprehensive income, the company's consolidated TC ratio decreased 50 basis points to 7.5%. Total risk-based capital remained well above regulatory well-capitalized standards at 11.2%. Overall, we believe our capital levels remain optimally balanced to continue to support growth while maximizing returns on equity. With that said, I'll turn it back over to Billy.

Billy Carroll, CEO

Thanks, Ron, and I want to reiterate again the value proposition with our company drawing your attention back to page 8 of our deck. We've been on the road a lot in 2024, reminding our investors and stakeholders of the investments we've made and what we've accomplished recently. We are seeing the profitability inflection and have a clear line of sight on our return targets. We're building a great franchise and arguably some of the most attractive markets in the country and have put together a team that is moving us in a great direction. The changes in our company over the last couple of years have been tremendous and it's formed, in my opinion, one of the Southeast's brightest stories. We've said we needed a little time to sync up the new markets and teams we've added in recent years, but those markets are now rolling with Birmingham, Auburn, and Montgomery flagship offices open and market share growing quickly. Key themes for us in 2025 are going to be similar to 2024 with a focus on generating operating leverage and hitting our profitability targets. The majority of expense growth in the company during this coming year should be primarily talent-related and measured methodical investments in our banking platform. We will continuously look to hire sales associates who align with our company culture. In 2024 we added 17 new revenue-producing team members and have several in our talent pipeline. Currently, we're adding some outstanding regional bankers to our team and I believe we continue to be one of the region's companies of choice for great bankers. From an associate standpoint, we were honored to become a certified great place to work this year. As you can see, we've noted it in our deck this quarter. This is in addition to being recognized as a regional top workplace for eight consecutive years. So to summarize, I love where we're sitting. We are executing, growing our revenue line, and gaining operating leverage. Margin is expanding and we can see further tailwinds coming with significant rate resets set to occur in our fixed-rate loan portfolio. Credit continues to be very solid and we're seeing great new client growth with a sales energy that is outstanding. Also, a great quarter and a great year for our company as we continue to build a profitable and attractive franchise. I appreciate the work of our SmartFinancial SmartBank team and the efforts of our 600 associates. I'm very proud of the work that we have going on here at SMBK. So I'm going to stop there. We'll open it up for questions.

Operator, Operator

Thank you very much. Our first question comes from Will Jones with KBW. Will, your line is now open. Please go ahead.

Will Jones, Analyst

Yes. Hey, good morning, everyone.

Billy Carroll, CEO

Hey, Will. Good Morning.

Ronald Gorczynski, CFO

Good Morning.

Will Jones, Analyst

Hey. So, Ron, I wanted to start on loan yield. I mean, it's a fairly impressive feat that you're able to see that loan yield hold stable quarter-over-quarter, just in light of some of the handful of cuts that we've recently gotten. I was just hoping maybe you could help us reconcile how you're able to kind of achieve that stability quarter-over-quarter. I assume growth this quarter was a fairly contributing factor as well as maybe some of the fixed rate repricing tailwinds you have. Just help us maybe piece together how that loan yield transpired through the quarter and maybe where we could expect to see that trend through the early half of 2025. Thanks.

Ronald Gorczynski, CFO

Yes, that's a great question. Our loan yields for originations are still above 7%. During the quarter, we also noticed additional opportunities, including excess loan prepayments that contributed about 3 basis points to the margin. Additionally, we've experienced strong demand for both quality lending opportunities and draws from our unfunded lines of credit at higher rates. So far, we've managed to maintain consistency, but we anticipate a slight decline as we progress into 2025, particularly in the first quarter or two.

Will Jones, Analyst

Great. I know you said it, but could you just remind me of where new loan production was in the fourth quarter?

Ronald Gorczynski, CFO

7.08%.

Will Jones, Analyst

Okay, perfect. And maybe, Billy, for you, it's great to hear that there's still optimism on maintaining mid to high-single-digit loan growth pace. Just curious if maybe you could talk about how maybe some of the competitive dynamics have changed or how you expect maybe the competitive dynamics to change in the coming year as the industry feels fairly bullish on growth as a whole. And then maybe also touch on how you view your CRE concentrations and whether that could possibly be an limiting factor for you guys next year. Thanks.

Billy Carroll, CEO

Yes, those are good questions. From a growth perspective, we have guided to a mid to high-single-digit range, which has been our performance over the last few quarters. We've managed to outperform that at times. Part of our projections includes assumptions about pay-downs, and we didn’t see much of that in the second half of the year. If we consider normal pay-downs and pay-offs along with production, I believe we're on the right track. Competition remains strong, but we’re operating in regions with robust economic conditions. There’s a positive outlook in these regions, and while rates have remained somewhat elevated, we're confident in our competitive stance. It will be an interesting year ahead, as many companies in our sector expect to continue growing their balance sheets, and we share that optimism. Our sales teams are performing well, and we feel positive about our overall company position. Regarding your question about commercial real estate, I think it won't be a significant limiting factor for us. In the last quarter, we encountered several good opportunities related to core relationships with some CRE focus. However, the majority of our growth appears balanced, as indicated by our production charts. Rhett, would you like to add more detail on this, particularly regarding production, the mix, and the CRE aspect?

Rhett Jordan, Analyst

Yes, if you look at, just start with this particular quarter. You look at this quarter's production imbalances. I mean about 34% of that was in a CRE call code category. 60 plus percent came in a mix of C&I, owner-occupied real estate, 1 to 4 family. Again, you look at the chart on page 10 of a loan composition mix, you can see it really did not swing to any degree of significance in any category. So, we continue to see good opportunities to build each point in the series space, but we're seeing good opportunities across the entire spectrum of loan types. And that production has been very consistent. It's been consistent geographically, it's been consistent with the portfolio from a diversification standpoint. So, while we are continuing to see opportunities in the CRE segment, it is a normalized piece of our production and we think that trend is going to continue as we look at our pipeline.

Billy Carroll, CEO

And I'd like to really emphasize the fact how geographically spread out it was within all our markets as well. It wasn't just anyone limited factor.

Will Jones, Analyst

That's great. That's all very helpful color, guys. Well, congrats on a great quarter and great end to the year.

Billy Carroll, CEO

Okay. Thank you, Will.

Ronald Gorczynski, CFO

Thank you, Will.

Operator, Operator

Our next question comes from Russell Gunther with Stephens Bank. Russell, your line is now open. Please go ahead.

Nick Lorenzoni, Analyst

Hey, good morning, everyone. This is Nick Lorenzoni. I'm just filling in for Russell.

Billy Carroll, CEO

Hey, Nick.

Ronald Gorczynski, CFO

Hey.

Nick Lorenzoni, Analyst

So to start off, I want to talk about your $50 million revenue target for the third quarter of 2025. What specific factors are giving you the confidence in achieving that $350 million revenue target?

Billy Carroll, CEO

Yes, I'll provide a macro perspective on that and then Ron can elaborate on how we plan to reach it. The revenue growth we've experienced over the past few quarters is simply a continuation of the existing trend. When we analyze the loan and deposit growth, and manage our expenses, we anticipate reaching that $50 million target by the end of Q3 or Q4. We are confident in our ability to achieve these short-term return targets. If we can reach that $50 million in quarterly revenue in the second half of the year, it should translate to our goals of 1% in ROA and 12% in ROE. That's our immediate focus, and then we'll evaluate what our next objectives should be. We've consistently communicated our confidence in reaching this during our calls and meetings. Ron, do you have any additional insights on our strategy to achieve this?

Ronald Gorczynski, CFO

Yes, you handled most of the high points. Really, it's loan growth funded by organic deposit growth. We will have a larger balance sheet and we do expect, not as fast, but margin expansion throughout 2025. Those are really together with our loan repricings. As I mentioned in my opening prepared remarks, repricing is pretty powerful through this period of time.

Nick Lorenzoni, Analyst

Okay, that's great. Thank you. And then one more question. Could you discuss your office exposure in general and specifically in Nashville, including how it's holding up and expectations going into 2025 and maybe, just maybe any color on that recent sale of Phillips Plaza and the 85% discount in the $16 million loan you guys provided?

Billy Carroll, CEO

Yes, it's a solid deal, to be honest. I'll share some highlights and let Rhett provide more details. We don't focus much on office spaces, historically. We recently had a chance to work with a key client in the Nashville area, which we managed to make public through deed filings. We feel very positive about that and are excited to strengthen our relationship with this client. Our office exposure looks good, and I don't see Nashville's situation as a signal of major problems. Transactions like these were often structured differently and involved different borrowers before COVID. There has been some adjustment with certain buildings, but I don't see it as a significant concern. It might slightly lower some of the comparable values of those buildings, but we probably won't see a lot of drastic changes in our sector. Rhett, would you like to delve into some specifics about our office details?

Rhett Jordan, Analyst

Yes. From an overall perspective on office exposure, it has remained quite stable, though it has declined slightly over the year due to amortizations in the portfolio. The transactions are quite specific. Our average loan size in the office segment is just under $1 million, if I recall correctly. I don’t have that statistic right in front of me, but I believe that’s accurate. Regarding the Nashville transaction, I would consider it a bit unique for us. There were some very distinctive aspects related to that deal, particularly the purchase price discount compared to the prior valuation. The finding was exceptionally low, and there was a clear reason the seller needed to sell that asset when they did. Our borrower managed to secure a very favorable purchase price, and we financed a smaller portion of it. Additionally, the dollar amount mentioned includes some draw components for extra tenants, so it doesn’t reflect the sum we funded at closing. Overall, our exposure in that property is very strong, and we have recourse with local borrowers.

Billy Carroll, CEO

Got it, got it. That's great detail. That's all I have. Thanks for taking my questions, guys.

Rhett Jordan, Analyst

Thank you.

Operator, Operator

Our next question is from Steve Moss with Raymond James. Steve, your line is now open. Please go ahead.

Steve Moss, Analyst

Good morning, guys.

Billy Carroll, CEO

Hey, Steve. Nice quarter here, and maybe just starting with expenses. Good morning, guys. Billy, you kind of mentioned a pace, a reasonable expense growth pace for 2025. Just kind of thinking. Are you thinking like mid-single-digits, maybe mid to upper just given some of the trends you guys are having? Yes, I'll go high level and let Ron provide some expense or percentage guidance. Overall, we've done a good job managing expenses. You've noticed some growth quarter-over-quarter as we entered 2024. However, keep in mind that we are adding three new flagship offices in these markets with additional team members, which contributes to that growth despite having temporary offices. Looking at our Q4 run rate, we believe it's a solid indicator for the future. Ron can provide more details, particularly regarding the heavier incentive compensation linked to second-half production. Overall, we expect to maintain stability as we move into 2025. Ron, please share your thoughts on percentage growth guidelines.

Ronald Gorczynski, CFO

Yes, Steve, when we annualize the fourth quarter of 2024, we expect expenses to grow at a rate between 2.5% and 3%. As Billy mentioned, this is not a year-over-year increase due to significant growth in our franchise. The majority of the increase will arise from salary and benefits, with some additional costs associated with data processing and IT upgrades. Overall, this should remain quite stable. I believe this serves as a solid reference point as we look ahead to the 2025 forecast.

Steve Moss, Analyst

Okay, great. I appreciate all that information. Regarding loan growth, I wanted to know about your impressive quarter. I understand that some of it came from drawdowns on unfunded commitments. However, I’m curious if there was any advance in production, and do you think we might see a slowdown due to this pull forward and possibly a seasonally weaker first quarter?

Billy Carroll, CEO

Yes. Our pipeline looks solid, and we remain optimistic about meeting our guidance. We did have some deals that we expected to close in the first quarter of 2025 that actually closed at the end of this year, providing us with a positive boost in growth during the second half of December. However, I don't expect us to achieve 20% annual growth this quarter; I anticipate a more moderate figure, slightly lower than that.

Steve Moss, Analyst

Okay. Got you. Well, most of my questions have been asked and answered. Really appreciate all the color here today. Thanks, guys.

Billy Carroll, CEO

Thank you.

Ronald Gorczynski, CFO

Thanks, Steve.

Operator, Operator

Our next question comes from Stephen Scouten with Piper Sandler. Stephen, your line is now open. Please go ahead.

Stephen Scouten, Analyst

Good morning, everyone. Thank you. Billy, following up on your last comment about 20% not necessarily being sustainable, I want to highlight that 13.4% was impressive for the year, especially when many struggled to achieve any growth. I'm curious about what factors could help you achieve a similar figure, like 13% or 14%, versus the high single digits you mentioned earlier. Any insights on current pipelines or trends, even if they are anecdotal, would be appreciated.

Billy Carroll, CEO

The pipeline appears to be strong. Rhett, feel free to add your thoughts as well. Currently, our credit team's underwriting looks solid, particularly in the commercial and industrial sector. I've mentioned in previous quarters the strength of our sales process, which has significantly contributed to the growth you've observed. We've invested time in effective prospecting and accountability in our markets. Our sales leadership and the regional president groups are effectively driving growth in both loans and deposits. I believe we can maintain this momentum. There are opportunities to bring in new hires that could enhance our performance further, but our immediate focus is on ensuring we achieve the right return targets on our deals. We aim for strong, profitable growth built on solid relationships, rather than pursuing growth for its own sake. We're optimistic about our prospects. Rhett, do you have any additional thoughts or insights on the pipeline?

Rhett Jordan, Analyst

Billy, I think you touched on the key part of it. I mean, to me, as you look at production we've had for the year, it has been, as we talked about, very diversified across the portfolio and geographically, a lot of that just basic locking and tackling and Banking 101 of pursuing new prospects opportunities with existing clients. But I also would say, Billy pointed out in his commentary, we have brought in over the course of the year, several new hires and very strong producers in their respective footprints. And we did see some really good new relationship production from those hires. So that has been a little bit of a little bit of a value add as well in our ability to produce what we did this year, over the original GAAP.

Billy Carroll, CEO

And I think it speaks to the culture of the entire bank, not just the production side, but the entire bank. I think our whole team of associates will outwork, out-hustle, and out-close. And I'll put them up against any bank, anywhere in our market.

Stephen Scouten, Analyst

I love it. Great color there. And I guess it leads to a follow-up question around kind of the push-pull around letting the investments you've made continue to run their course. I know, Billy, you said kind of let '25 look a bit like '24, where you continue to move that profitability up. But hired 17 producers, I think you said this year, a few more in the pipeline. How do you think about that opportunism there, if there's good talent out there to be hired versus wanting to let the profitability kind of pull through? How do you balance that dynamic?

Billy Carroll, CEO

That's a great question, and we discuss it often. We are really focused on achieving our near-term profitability targets, and we are committed to doing so. Nothing will stand in our way of reaching these goals. However, we also want to ensure that we are investing appropriately in the platform and bringing in the right sales talent as needed. It's a delicate balance, and we are actively managing it. We aim to hit the profitability metrics we set after getting all our offices operational. I believe we can achieve both objectives. We'll be selective in our hiring, and if opportunities arise that require evaluation, we will consider them. From our perspective, we will continue to grow similarly to how we did this year, hiring key individuals as we find suitable candidates while maintaining balance to meet our targets.

Ronald Gorczynski, CFO

Stephen, I'll add too, we get asked a lot about, oh, gosh, y'all are an acquisitive bank. You all have grown through acquisitions through the years. What's next? What's next? We talk a lot about just continuing to perform this year and executing on where we are. And I'm not so sure our best M&A strategy might not be just to sit back and wait and watch for some of these other deals that come to fruition and take advantage of some market disruption.

Stephen Scouten, Analyst

Yes, yes, for sure. Delivery on execution covers a lot of issues and gives you opportunities for sure, Good point. And then maybe just the last thing for me, curious on the NIM expectations. I know, I think Ron, you said kind of trending higher throughout the year. Just wondering about the expectations behind that from a rate perspective, if that changes at all. If we get no cuts versus, I don't know, two or three cuts or kind of how you think about that trend line based on potential rate environments.

Ronald Gorczynski, CFO

Yes, that's a great question with many components. One significant factor we've previously mentioned is our amortizations and repricing for our loans, as well as the reinvestment of principal cash flows from our investment portfolio. If you refer to page 15 of the presentation, you'll see that our new loan production yields are surpassing those of our existing portfolio, allowing us to maintain a production and deposits spread of around 300 to 350 basis points. Additionally, we are still experiencing some benefits from our deposit repositioning. We've implemented a laddered approach on brokered deposits, which are beginning to run off, and we expect to see positive effects from that. For the first quarter, we have realized cost savings following the full impact of the rate cuts. Furthermore, I believe that moving to a neutral position will benefit us in a potentially flat rate scenario this year. There are many pieces to consider in this situation.

Stephen Scouten, Analyst

Yes, for sure. That's helpful color. Thank you. And congrats, guys, on a great, great quarter and a great 2024. Appreciate the time.

Billy Carroll, CEO

Thank you, Stephen.

Operator, Operator

Thank you very much. I will hand now back over to Miller for any closing remarks.

Miller Welborn, Executive

Thank you very much. Appreciate all of you joining us today. Thanks for your support of SmartBank and we look forward to exciting 2025. Have a good day.

Operator, Operator

Thank you very much, Miller. And thank you to all the speakers today that have joined us. We appreciate everyone who has joined the conference call. You may now disconnect your lines.