Earnings Call Transcript - SSB Q3 2023

Operator, Operator

Good morning, my name is Audra and I will be your conference operator today. At this time, I would like to welcome everyone to the SouthState Corporation Q3 2023 Earnings Conference Call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. At this time, I would like to turn the conference over to Will Matthews, Chief Financial Officer. Please go ahead.

William Matthews, CFO

Good morning, and welcome to SouthState's third quarter 2023 earnings call. This is Will Matthews, I'm here with John Corbett, Steve Young, and Jeremy Lucas. John and I will make some brief prepared remarks and then we'll open it up for questions. As always, a copy of our earnings release and presentation slides are on our Investor Relations website. Before we begin our remarks, I want to remind you that comments we make may include forward-looking statements within the meaning of the federal securities laws and regulations. Any such forward-looking statements we may make are subject to the safe-harbor rules. Please review the forward-looking disclaimer and safe-harbor language in the press release and presentation for more information about our forward-looking statements and risks and uncertainties which may affect us. Now, I will turn the call over to John Corbett, our CEO.

John Corbett, CEO

Thank you, Will. Good morning everybody. Thanks for joining us. In the earnings release last night, you can see that SouthState delivered a solid quarter that was right in line with our previous guidance. Will can cover the details but high level we continue to see steady growth in loans and customer deposits, liquidity is stable, capital ratios are growing, deposit funding is best in class and our net interest margin is settling in at a pretty good spot. One of the core values that we continually preach to our team is to keep our eye on the long-term horizon. So, we spent a lot of time talking about the big picture, talking about the economic cycle and where we have risks and where we have advantages. The stages of a banking cycle are simple and predictable. The cycle risks move from liquidity, then to earnings, then to credit, and then finally to capital. But while the stages are easy to predict, predicting the speed and the severity of the cycle, that's the tough part. Since March, we've clearly moved through the first phase, the liquidity tightening phase as deposits left the banking system for money market funds. Now the predictable and necessary response is that the industry trades away future earnings power as deposit costs rise. Now for SouthState, our granular deposit base has served as a ballast for our franchise and we've been able to continue to grow our deposits with a cumulative deposit beta of only 27% at a total cost of deposits of 1.44% for the quarter. Over on the asset side, we're also about to benefit from a tailwind of loan repricing; 70% of our loans are based on fixed or adjustable rates. So, we're going to see a significant portion of our loan portfolio repriced by more than 300 basis-points as they renew and that should help offset any additional drift in deposit costs. It feels like the velocity of change for deposits is moderating and we're now shifting to the credit risk portion of the cycle. In the last year, we set aside $151 million of reserves, with only $18 million in charge-offs. As a result, we've built our reserves up by 28 basis points to 1.59%. The cycle is more severe than many are predicting, those reserves plus our excess capital will allow SouthState to be opportunistic on the backside of the cycle where the opportunities to create shareholder value are the greatest. So, we're cautious now. The lag effects of the rapid rise in rates are only just beginning to work their way through the system. But at the same time, we're excited. We think that there is a tremendous opportunity on the horizon for a bank of our size in our geography and with our deposit franchise. So, I want to close by thanking our team for keeping their eye on the long-term horizon of building a franchise that can weather the storm and come out stronger on the other side. I'll pass it back to Will now to provide some color on the quarter.

William Matthews, CFO

Thank you, John. We had another solid quarter with deposit costs, margin, and noninterest income ending up in line with our expectations, solid PPNR and good credit costs outside of the one sizable charge-off that impacted us and some of our peers. I'll touch on a few details before we move on to Q&A. On the balance sheet, our 6% annualized loan growth moderated from the first half of the year in line with our expectations. Deposits grew at a 2% annualized rate or 4% if you exclude the approximately $130 million in brokered CD maturities, we allowed to run off without replacing. Though we continue to see a mixed shift in our deposits from DDA into money market accounts, the pace of the DDA shift moderated a bit this quarter. DDAs represent 30% of total deposits at quarter-end, down from 31% last quarter. And as we mentioned previously, this figure was 28% to 29% before the pandemic. So, it continues to appear as if we're moving towards those pre-pandemic levels for DDA as a percentage of deposits. Turning to the income statement, our 3.50% NIM was down 12 basis points from Q2. Loan yields were up 14 basis points, but deposits were up 33 basis points, which was in line with our 30-basis point to 35-basis point guidance bringing our cycle to date deposit beta to 27%. Our net interest income of $355 million was down $7 million from Q2 on one more day. Noninterest income of $73 million was down $4 million from Q2, though still a solid quarter. Correspondent revenue was $13 million after $12 million in interest expense on swap collateral for $25 million in gross revenue, down approximately $3 million from Q2. Wealth had another solid quarter, but mortgage revenue of $2.5 million was down $1.9 million from Q2. We had another good quarter in deposit fees similar to Q2. Expenses came in a bit lower than expected this quarter largely due to a revaluation of SERP retirement plan liabilities due to higher interest rates reducing NIE by $5.9 million. We also made a $1 million donation during the quarter for which we received a dollar-for-dollar tax credit. So, NIE was higher by $1 million in the quarter and income tax was lower by the same amount. Excluding that, NIE was in line with our expectations. Looking ahead, we expect NIE for Q4 in the mid-240s range subject to the normal variations in expense categories impacted by noninterest income and performance. With respect to credit, we recognized the $13 million in net charge-offs in the quarter, bringing our year-to-date total to $17.5 million or 8 basis points annualized year-to-date. The one sizable loan charge-off that received a lot of attention earlier in the quarter accounted for all of the loan net charge-offs as we experienced net loan recoveries before overdraft losses absent that credit both for the quarter and year-to-date. We continue to build loan loss reserves with a $33 million provision, bringing the total reserve to 159 basis points of loans. For overall asset quality trends, NPAs were down slightly. Past dues were flat. Substandard loans increased and special mentioned loans declined. Line utilization continues to be flat, except on construction loans as we are not originating many new construction loans and existing projects move towards completion. We continue to have very strong capital ratios with CE Tier-1 of 11.5% were 9.25% if AOCI were included in the calculation. TCE ended the quarter at 7.5%. With loan growth expectations continuing to moderate, risk-weighted asset growth should be in a range that allows us to continue to grow our regulatory capital ratios and provide us with flexibility.

Operator, Operator

Thank you. We'll go first to Stephen Scouten at Piper Sandler.

Stephen Scouten, Analyst

Hi, good morning, everyone. I was curious if you could talk a little bit about what you're expecting on the NIM side moving forward in deposit trends from a cost perspective. Obviously, it's catching up a little bit, but still extremely strong. So just kind of wondering what you're expecting in the months ahead?

Steven Young, CRO

Sure, this is Steve. As summarized on page 12, our net interest margin (NIM) was 3.5% last quarter, which aligns with our guidance. Our deposit costs rose by 33 basis points last quarter, within the expected range of 30 to 35 basis points. Looking ahead, our guidance focuses on three factors: interest-earning assets, the rate forecast, and deposit beta. Our interest-earning assets are expected to remain flat going into the fourth quarter. According to Moody's consensus forecast, there are no new rate hikes expected, but four cuts are anticipated starting in late Q2, with the Fed funds rate projected to end at 4.5% by the end of 2024. Our current deposit beta sits at 27%, and we anticipate it will remain in the high 20s by year-end. Consequently, we expect deposit costs to increase by 15 to 20 basis points in the fourth quarter. Based on these assumptions, we predict the NIM will bottom out in the fourth quarter to around 3.45% to 3.50%. Going into 2024, based on Moody's forecast and our growth assumptions, we expect our interest-earning assets to average $41 billion and for our NIM to stabilize within the range of 3.50% to 3.60%. For 2023, we expect our full-year NIM to be in the low 3.60% range, while projected NIM for 2024 is mid 3.50%. We're also expecting a slight growth offset. Those are our expectations regarding NIM for next year and the upcoming quarter based on these assumptions.

Stephen Scouten, Analyst

Yes, that's helpful. And, and the stability that's created there, and I know John spoke to this a little bit, is that, a lot of that come in from the asset side re-pricing on that 70% of loans and have you guys given any detail around the pace of those re-pricings and kind of when we can kind of ratably see that benefit?

John Corbett, CEO

Sure. In the last quarter, we discussed that we are looking at approximately $1 billion in loan re-pricings each quarter. This translates to about $4 billion annually, with a step-up of around 300 basis points. Additionally, we expect some securities influx, estimated at $700 million to $800 million, which we will likely use to support loan growth. So, to put it in perspective, we anticipate about $1 billion each quarter for the next five to six quarters, with roughly a 300-basis point increase, and yields ranging between 4.25% and 4.5%.

William Matthews, CFO

And that's the adjustable and fixed repricings.

Stephen Scouten, Analyst

Right, yes, understood. Okay, great and then, I guess, lastly from me, any sort of, as you think about that Moody's expectation, we start thinking about the presumably some rate cuts any kind of higher arching balance sheet strategies to protect the NIM when rates presumably do go down and anything around a potential bond restructuring. I think the ACLs maybe near $816 million year-to-date. So I'm just kind of wondering with the capital build, is that something you guys are thinking more about?

Steven Young, CRO

What I can say is that our net interest margin strategy could be addressed by Will or John regarding capital and bond restructuring. Recently, an investor asked us what our net interest margin was when the federal funds rate was 3%. We looked back and found it was in the range of 3.75% to 4%. We're currently waiting for the repricing strategy on our fixed-rate loans, as well as the impact of our deposit rates. Our approach will involve some margin adjustments around hedging, though it won't be a major strategy for us. The real opportunity lies in the event of rate cuts. If there are four rate cuts next year, money market rates would likely decrease slightly while the repricing of our fixed-rate loans would continue to increase. This is why we are guiding our expectations in that range. Now, I'll turn it over to Will to discuss bond restructuring and capital.

William Matthews, CFO

Yes, yes, Stephen, good morning. I'd say we have flexibility, which we like. We've got a strong capital position, we got a strong reserve, we've got a good capital formation rate and so it gives us a lot of things to think about with respect to capital deployment. I mean at current prices, our stock is pretty attractive. So certainly, repurchases of some degree is on the table. Additionally, with bond portfolio restructure while we're not likely to engage in a wholesale kitchen sink type thing there is certainly the ability to nibble around the edges. So, we continue to think about all of those options as well as some of the growth opportunities afforded us by terminal markets and the good economy in which we operate. So, we like that flexibility.

Stephen Scouten, Analyst

Fantastic. Thanks for all the color. I appreciate the time.

Steven Young, CRO

Thanks, Steve.

Operator, Operator

We'll take our next question from Catherine Mealor at KBW.

Catherine Mealor, Analyst

Thanks, good morning.

William Matthews, CFO

Good morning.

Catherine Mealor, Analyst

With a few couple of smaller M&A transactions in the Southeast over the past few months, just curious your updated thoughts on M&A and how you're thinking about how you're positioned there into next year?

John Corbett, CEO

Catherine, it's John, good morning. There is no change from our prior guidance. We've seen a couple of deals happen, but it's still quite challenging to make the numbers work with the AOCI and the risks associated with regulatory delays. Our expectation is that activity will likely increase in the latter half of 2024 as we approach the election and as economic certainty improves. The rationale for mergers and acquisitions is clear given the revenue pressures in the industry, and we will continue to engage with peer banks that may become partners in the future, though it remains difficult in the short term.

Catherine Mealor, Analyst

And then just the big picture, earnings question, as we think about next year, as you look at, we've got a little bit, it was called stabilization in the margin after we kind of come off fourth quarter, it seems like you still expect for there to be a little bit of balance sheet growth, but as you look at revenue growth as compared to expense growth, how do you think those two marry each other in 2024? Do you think this is a year where you can still create positive operating leverage or do you see this as a year where we'll really kind of fee revenue and expense growth kind of be at the same pace or maybe even a little bit more expense growth relative to revenue, just curious how you're thinking about that into next year?

Steven Young, CRO

Catherine, this is Steve. If you could provide some insight on what the yield curve might look like, that would be helpful. I'm not entirely sure we have that information, but regarding our net interest margin and the fee income, I expect it to be a bit more challenging over the next quarter, particularly with the rising 10-year treasury. The correspondent division we added may not find many swap opportunities this quarter, but that can fluctuate. I anticipate that our non-interest income to assets will be in the previously guided range of 55 to 65 basis points. This quarter, we reached 64 basis points, which is on the high end of that range. Looking ahead to the next quarter, I think we might be closer to the low end. For the full year, I expect we will end up in the low 60s for basis points relative to average assets. As for 2024, I anticipate starting at a lower point and then seeing an increase, especially if the Moody's consensus holds true and the 10-year treasury approaches 4%, which would likely boost capital market activity. Overall, I don’t foresee significant growth in non-interest income year-over-year, based on the Moody's rate forecast. Given our net interest margin outlook, dollar growth may be stagnant, particularly when considering the revenue and expense dynamics I just discussed.

John Corbett, CEO

Yes, and so obviously with that revenue picture, our goal for next year is to be very controlled in our expense growth, and we're still deep in the planning and budgeting processes, as most people are at this point. At this stage, they don't have any precise guidance to give, but we would hope and expect to be in the low-to-mid single-digit range on expense growth and try to control as tightly as we can.

Catherine Mealor, Analyst

All right. Thank you. Appreciate it.

John Corbett, CEO

All right. Thanks, Catherine.

Operator, Operator

We'll go next to Michael Rose at Raymond James.

Michael Rose, Analyst

Hi, good morning guys, thanks for taking my questions. Just wanted to follow up on that last point on expenses, you guys are in a pretty enviable position from a fundamental standpoint. You guys have been very conservative, built reserves. I think that's really well taken from my vantage point, you got capital growing, I mean, why not be more aggressive on the expense side now, while revenues are under pressure. So you better position yourself, you just talked about John at the outset for what will be brighter days at some point, I know there's a lot of dislocations in the market, I assume there's a lot of good lenders out there that you guys can go after. Why not actually be more aggressive here on the hiring and organic growth front while you have many competitors that are capital and liquidity constraint? Thanks.

John Corbett, CEO

I understand your point about being aggressive with expenses, but I wasn't clear if you meant cutting or adding expenses. It seems you're suggesting we be opportunistic, and I agree. We are always looking for opportunities and never stop recruiting to strengthen our team. For instance, our management associate program has been in place for years, bringing in 35 college interns each summer and converting 15 to 20 of them into management associates every year, which helps build our credit and lending teams. We're continuously recruiting. Just last night, my wife and I dined with a potential banking prospect, showing that we're actively engaging with people. We are not going to set a limit on expense growth that would hinder our opportunistic approach, if that clarifies things.

Michael Rose, Analyst

All right guys, now makes complete sense. Just, just a few smaller ones. I noticed that the FHLB was essentially paid down, looks like brokered deposits came down a little bit, what other, I assume brokered deposits will come down as you grow core deposits. What's kind of a right level to think about that and is there any other tools or actions you can take on the liability side to kind of contain the creep in interest-bearing liability costs? Thanks.

Steven Young, CRO

Yes, Michael, it is Steve. You'll remember, in March when we had sort of the banking turmoil, we went ahead and did a brokered CD offering. I think it was $1.2 billion or so and then we also borrowed $900 million of Federal Home Loan Bank and that was just sort of an abundance of caution with all the turmoil going on and what you've seen over the last couple of quarters is; one, we paid off the $900 million of Federal Home Loan Bank as worries have died down and then the brokered CDs are starting to roll off. So, we typically right now I think our brokered CD is at around 3% of our deposits, give or take. I could see that coming down a little bit but it, I wouldn't be at an abnormal level for us to be around 3% brokered deposits, it could go lower, but it wouldn't be an unusual event for us to stay, hang out in that general range.

John Corbett, CEO

I would say, reflecting on comments made by some of our peers in their calls, we are experiencing that while there is still pressure on deposit costs, the rate of change has slowed, and it appears that the most intense competition in that area is behind us.

Michael Rose, Analyst

Okay, great. Maybe just finally for me, do you have a sense for what the new loan production yield was and maybe what the margin was for September? Thanks.

John Corbett, CEO

Yes, so our new loan production yield for the third quarter was around 740. I think it is a little over that, 742 on the new funded yield, it is a little higher than that for September. I don't think we just have the September margin numbers, but I think it was for the most of the quarter, it was not all that far different from our ending quarter. But a few basis points here or there. The margin moves obviously a few basis points on 30 days versus 31 and so on, but it was reasonably stable most of the quarter.

Michael Rose, Analyst

All right. Thanks for taking my questions guys.

John Corbett, CEO

Thanks. Michael.

Operator, Operator

We will move next to David Bishop at Hovde Group.

David Bishop, Analyst

Yes, good morning gentlemen.

William Matthews, CFO

Good morning.

David Bishop, Analyst

I'm curious, circling back to the preamble, you mentioned sort of a lifecycle that the banking industry and paying attention to the credit cycle here we saw them, the one-off, net credit you alluded to in the charge-off, but maybe peeling back the onion, just curious your recent reviews of our financials, anything that's standing out from a credit deterioration perspective that maybe not be, not showing up in the numbers, but areas where you are pulling back from or are being a little bit more cautious on these days?

John Corbett, CEO

Yes, I mean, David, the pipelines are trending down. I mean I think the, the Fed is getting what they wanted with liquidity being tight. I think borrowers are more cautious, banks are more cautious. So, so we anticipate for the industry that, that pipelines will shrink. Now, the interesting part is I think the loan growth will be a little bit disconnected from the pipeline trends. While pipeline trends will be going down and probably new loan production will be going down. Payoffs have screeched to a halt. And there still some funding of the loan production that we did the last couple of years, so, I think that we're going to see probably mid-single-digit kind of loan growth continue, but it will be on lower production levels than we've had in the past, but from a credit standpoint, we've talked about in the past, the areas that we see having the most stress in the short-term is probably small-business, SBA kind of loans. The assisted-living space just never really recovered from COVID and they continue to face labor pressures and everybody is talking about office. We think we're going in and our loan review team is being very conservative and forward-looking on how we're looking at grading loans. And so, I think it's forcing the conversations with borrowers in advance of maturities, which is the way it should work. So, anyway, that gives you some picture of our sense of where the credit risks are and where the production trends are headed.

Operator, Operator

And we'll go next to Brody Preston at UBS.

Brody Preston, Analyst

Hi guys, how are you this morning?

John Corbett, CEO

Good morning, we are doing well.

Brody Preston, Analyst

I just wanted to clarify something on the expenses, real quick. Will, did you say, you said mid-240s, is that accurate?

William Matthews, CFO

Yes, the exact middle would be 245 million, which is what I was referencing as the mid-240s. Sorry for not being more clear.

Brody Preston, Analyst

No, I just wanted to make sure because the live trends were picked up mid-220s which I think is unclear.

William Matthews, CFO

And let me also clarify, I should point out that it does not include, of course, the FDIC special assessment, which has not, if it gets finalized this quarter, we'll all be booking it in Q4. And for us, it's around $25 million. But that's not in those numbers obviously.

Brody Preston, Analyst

Got it, okay. Regarding the portfolio restructure, you mentioned you're not planning to take a comprehensive approach but might make some smaller adjustments. What do these smaller adjustments look like in terms of size, and are there near-term securities maturing that have lower loss potential? Is there a significant part of the portfolio that is lower-yielding and might be maturing in the next 12 months that you could consider selling, which could lead to some reasonable increase in earnings per share?

Steven Young, CRO

Sure, Brody, this is Steve. As we have thought about it and continue to monitor and think about it, yes, I think, yes, we are thinking about like size, I don't think it would be certainly not more than 15%, probably 10% or so of the available, excuse me, of the investment portfolio book would be something to look at and then I guess as we think about EPS accretion, earn-back, all that would be anything else we do on the capital side. We would want that earn-back to come within three years. So, I think as we think about the whole options on the table relative to capital whether, as Will mentioned, the buyback, whether it's bond restructuring, whether it's growth, whether it's M&A, we're thinking about them and inside the same lens of course on bond restructure, you have less execution risk, but at the same time, there is other, other pieces and parts that we're looking at from a capital management. And I'm really glad that we're in a position where capital has grown over the last year, the earnings, the PPNR earnings have been really good and, and the loan-loss provisions have been stocked away, so I think we're in a good position to have some flexibility.

Brody Preston, Analyst

I understand, thank you. Regarding the buyback, I'm considering how willing we are to be more aggressive given the current share prices. Not too long ago, you bought back a substantial amount of stock at a price that was significantly lower than where we are now. Given our capital generation and the current stock price, what do you believe would be an appropriate level of buybacks to consider going forward?

John Corbett, CEO

Yes, there is no immediate pressure to take action, but we find the current stock price appealing while also generating capital. Buybacks are assessed on a daily basis, considering the economic landscape and potential credit risks. At this moment, the stock price appears quite attractive, but it isn’t the right time in the cycle for any significant moves. However, making smaller adjustments seems reasonable.

Brody Preston, Analyst

Got it, okay. I believe you mentioned this percentage in the presentation, and I thought it was around 2%. Do you happen to have the details on that?

John Corbett, CEO

Yes, Brody, I mean, just not a meaningful part of what we do at 2% of our portfolio, but we typically did not lead, typically when we're in these credits, these are credits that follow middle-market bankers that we've hired from Bank of America, Wells and Truist. So, in many cases, the banker that works for us usually the credit but because we're trying to manage hold limits, normally we're just taking a piece of the credit. So, so I think out of 39 relationships, we are going to lead one.

Brody Preston, Analyst

Got it, okay. And then I did just want to clarify, I'm sorry if I missed this earlier in the call. Just on the swap revenue, I think you guys have been pretty clear that you shouldn't to expect correspondent to have some kind of ups and downs, up-and-down quarters here, but the swap income, is this more on the level that you would expect in the current interest-rate environment and going-forward?

Steven Young, CRO

Yes, Brody, this is Steve. It fluctuates quite a bit, and you can see that in the quarterly numbers. Often in the correspondent division, we have other items that offset it. On page 32 of our presentation, you can see the trend of our noninterest income over the past five quarters. Our noninterest income to asset ratio varies; it has reached as high as 69 basis points and as low as 57 basis points. Since June 30th, the 10-year treasury rate is just under 1%, which affects our capital markets teams in the short term. I would expect our noninterest income to assets for this next quarter to remain around 64 basis points, but it may fall closer to the lower end of our guidance at 55 basis points. We've been guiding between 55 to 65 basis points, but it seems we will come in slightly lower. Looking ahead to next year, Moody's consensus suggests the 10-year treasury will drop to around 4% by the end of next year. I anticipate that the following quarters will be more favorable for that division, and we can recover. It may get a bit uneven from quarter to quarter, but that's how I see the overall picture.

Brody Preston, Analyst

Thank you for that. And maybe for John, just a follow up on Catherine's question on the M&A. ONB bought CapStar or announced they're buying CapStar last night and it seems like a pretty reasonable well-priced deal, some solid accretion and the stock is actually mildly outperforming today, which is nice to see. So, when you kind of see investors maybe happy about a well-priced acquisition that doesn't come with too much dilution, does that maybe make you think about wanting to do something sooner rather than later despite the current rate environment?

John Corbett, CEO

It's a case-by-case basis, Brody. We're open for business, and if the right opportunity arises sooner rather than later, we would pursue it. However, I think such opportunities will be infrequent over the next couple of quarters. Anything is possible, so I wouldn't rule it out. If I were to forecast, I believe that industry activity will be more robust in the second half of 2024. Nevertheless, we are not opposed to pursuing an attractive and accretive opportunity for our franchise if one comes along.

Brody Preston, Analyst

I understand, and just for my final question, we discussed this during the first-quarter call, and I realize it's a very small loan portfolio for you. I'm more interested in this from a general commentary standpoint rather than specifically about SouthState. The substandard and accruing portion of the nursing home portfolio continues to rise. Is there anything new compared to what we discussed last time, where we noted that costs are increasing and some of the third-party payers are not reimbursing as much? I wonder if there's anything specific to senior housing right now that's contributing to that weakness, as we're seeing similar trends in other banks as well.

John Corbett, CEO

Yes, I have talked to our credit team specifically about that. But as you point out, it's less than 1% of our loan portfolio, but, but really it comes down to the labor. I think that's the biggest issue right now probably labor, the nursing shortage you hear about some of the rates the traveling nurses get and then interest costs going up and so you've got two major expense headwinds. And then, you still got the revenue headwind following COVID about people's desire to be in a nursing home post COVID. So, but the main issue, Brody, is the nursing shortage and labor cost.

Brody Preston, Analyst

Awesome. Thank you very much for the color. I appreciate it guys. Have a good rest of the day.

John Corbett, CEO

Thank you.

Operator, Operator

And this concludes the question-and-answer session. I would like to turn the conference back over to John Corbett for closing remarks.

John Corbett, CEO

Right, Audra, thank you. Thanks everybody for joining us this morning. We know it's busy with all the earnings calls. If we can provide any other clarity don't hesitate to give us a ring. Have a great day.

Operator, Operator

And this concludes today's conference call. Thank you for your participation, you may now disconnect.