Bank of Marin Bancorp's (BMRC) CEO Russ Colombo on Q4 2015 Results - Earnings Call Transcript

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Bank of Marin Bancorp (NASDAQ:BMRC)

Q4 2015 Earnings Conference Call

January 25, 2016 11:30 AM ET

Executives

Jarrod Gerhardt - SVP

Russ Colombo - President and CEO

Tani Girton - CFO

Analysts

Jeff Rulis - D.A. Davidson

Jacque Chimera - KBW

Tim Coffey - FIG Partners

Alex Morris - Sandler O'Neill & Partners

Jarrod Gerhardt

Good morning and thank you for joining us for Bank of Marin Bancorp’s earnings call for the fourth quarter and year end December 31, 2015. My name is Jarrod Gerhardt, I am a Senior Vice President with Bank of Marin.

During the presentation, all participants will be in listen-only mode. After the call, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded on January 25, 2016.

Presenting this morning will be Russ Colombo, President and CEO; and Tani Girton, Chief Financial Officer. You may access the information discussed from the press release which went over the wire at 5 AM Pacific Time this morning and on our website at bankofmarin.com, where this call is also being webcast.

Before we get started, I want to emphasize that the discussion you hear on this call is based on information we know as of today, January 25, 2016, and may contain forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, please review the forward-looking statements disclosure in the earnings press release we issued earlier this morning, as well as on Bank of Marin Bancorp's SEC filings. Following the prepared remarks, the team will be available for questions.

And now, I'd like to turn the call over to Russ Colombo.

Russ Colombo

Thank you, Jarrod. Good morning and welcome to the call. We are pleased to review our results with you for the fourth quarter and the year. Let’s start with some highlights. The Bank generated loan -- record loan of originations of $252 million for 2015. The fourth quarter was particularly strong with loan volume of $114 million.

Gross loans totaled $1.45 billion at 12/31/15, an $88 million increase from the prior year. We are especially pleased with our performance, given some of the strong economic and competitive forces we’ve faced in 2015. It’s worth noting that loan payoff, a natural part of the business totaled $169 million for the year, but we still grew the portfolio substantially.

Total deposits grew 11.4% year-over-year to $1.73 billion from $1.55 billion. The Bank generated a number of new relationships on both sides of the balance sheet which is a testament to our commitment to relationship banking. We talk about our credit quality quarterly because it’s a great measure of the type of growth we've been able to generate through solid, disciplined, relationship-oriented loans. Thanks in large part to our credit culture, non-accrual loans continued to trend down downward, representing 0.15% of total loans at 12/31/15 down significantly from 0.69% a year ago.

Diluted earnings per share totaled $0.81 per share in the fourth quarter of 2015 compared to $0.79 in the prior quarter and $0.78 in the same quarter a year ago. The 2015 annual earnings totaling $18.4 million. Our long-term strategic focus and ongoing day to day diligence have paid off. Our Board of Directors has declared a quarterly cash dividend of $0.25 per share. The $0.01 increase represents 14% growth in our dividend over the past year and as evidence of our confidence in the ongoing performance of the Bank.

As for detailed results from the quarter, earnings were $4.9 million compared to $4.8 million last quarter, and $4.7 million in the fourth quarter of 2014. Return on assets is 0.98% and return on equity is 9.12%. Capital levels remained well above regulatory requirements. At year end, the Texas ratio stood at 1.18%, a substantial improvement from 4.79% a year ago.

Now let me turn it over to Tani for additional insights about our financial results.

Tani Girton

Thank you, Russ, and good morning everyone. Our fourth quarter results are the culmination of persistent work throughout the last 12 months to bring in new lending and deposit relationships which will benefit the Bank for a full year in 2016. The growth in our balance sheet combined with strong credit quality and expense discipline support high performance, despite the challenges of the prolonged low interest rate environment and the decline in accretion income related to acquisitions.

Earnings per share were $0.81 for the quarter and $3.04 for full year 2015. Net interest income grew to $17.2 million in the fourth quarter of 2015 compared to $16.9 million in the third quarter and $17.1 million in the fourth quarter of 2014, primarily due to balance sheet growth. The third quarter tax-equivalent net interest margin of 3.7% continues to be under pressure from the low interest rate environment. The margin declined 9 and 29 basis points respectively from last quarter and the fourth quarter of 2014, largely because lower-yielding securities made up a greater percentage of the balance sheet.

Additionally, accretion income related to acquired loans continues to decline over time. The Bank reported a $500,000 provision for loan losses as a result of significant loan growth. Improvements in credit quality reduced the amount of provision required. Consequently, the loan loss reserve fell slightly to 1.03% of total loan which is deemed appropriate given our excellent credit metrics.

Non-interest income has been fairly stable. $2.1 million for the quarter reflects the decline in merchant interchange fees and the absence of gains on sale of securities. For the year, higher dividends and a special dividend on FHLB stock more than offset reduced merchant interchange income.

Non-interest expense of $11.1 million in the quarter was down $500,000 from the third quarter primarily due to a refinement of the methodology used to calculate our off balance sheet reserve. The change resulted in a $277,000 reversal of provision and going forward we expect to see less fluctuation in the off balance sheet reserves than experienced over the last 12 months.

Non-interest expenses in 2015 declined $314,000 from the prior year due to the change in the off balance sheet reserves and the absence of acquisition-related expenses. On the other hand, increased salary and benefit expenses and non-recurring accounting adjustments in the second quarter partially offset the decline.

All in all, our efficiency ratio is trending downward. While the ratio for all of 2015 was 61.47%. It declined to 60.67% in the third quarter and 57.57% for the fourth quarter. Key metrics such as our efficiency ratio, return on assets, and return on equity are at very healthy levels notwithstanding the challenging interest rate, competitive and regulatory environment. Our loan to deposit ratio has increased to 84% and we have ample liquidity and capital to support continued growth in coming years.

With that I’d like to turn it back over to Russ for some additional comments about the outlook for the coming year.

Russ Colombo

Thank you, Tani. As you can see by our results, 2015 was another excellent year for Bank of Marin. As we say here at the bank, a consistent disciplined approach delivers consistent results. Our results are due to carefully executing our strategic plan. We are consistent about many things. First, we are dedicated to conservative underwriting and more importantly diligent credit management. This has been a hallmark of the bank since day one and continues to drive our culture today. Second, we have built an organization built on relationships. This is a clear differentiator for our bank and our results bear it out. We achieved organic growth in both loans and deposits, while maintaining excellent credit quality. We do not purchase loans to bolster loan growth which frankly is a major factor in helping us maintain our excellent credit metrics.

Third, acquisitions remain an important component of our strategic plan. The Bay Area is the most attractive area in the country and we intend to expand our footprint through organic growth and strategic acquisition. We are actively looking for opportunities but have nothing here to report. Our culture dictates that we apply the same discipline while reviewing transactions as we do throughout our business. We remain firmly committed to future acquisitions in the Bay Area as a supplement to our organic growth throughout the region. Fourth, as we grow the bank, our focus on commercial banking depends on strategically placed offices to support our relationships and the business communities we serve.

Our retail offices, which number 20 in 4 counties, support increased deposit growth, with more than $1.7 billion in deposits and 45% of that in demand deposit account. This tremendous core deposit base is the value for our franchise. This becomes even more valuable when rates rise. This expense control continues to be a critical component of our success. We are convinced that great efficiencies will be achieved as we grow the organization serving the Bay Area. We cannot and will not lose this focus. In summary, 2015 was a great year and the reason for our success was our consistent approach to the way we do business. Our discipline brought us through the recession in solid financial condition and will ensure Bank of Marin’s continued success and profitable growth.

Thank you for your time this morning and now we will open it up to answer your questions.

Question-and-Answer Session

Operator

[Operator Instructions] We have a question from the line of Jeff Rulis with D.A. Davidson. Please proceed.

Jeff Rulis

Thanks good morning.

Russ Colombo

Good morning Jeff.

Jeff Rulis

Russ you mentioned that pay off activity for the year at $169 million, what was that in Q4?

Russ Colombo

$36 million in the fourth quarter.

Jeff Rulis

So that is tailing off some?

Russ Colombo

It tailed off little bit, I mean, you can never project you can never know for sure what the payoffs are going to be. We had in the second quarter was quite a bit higher at almost $55 million, but the payoffs are kind of function of the business. It’s when you look at the $169 million; it’s a little over 10%. And if you look at our portfolio, you going to have run off that continues throughout the year just from the finances, from sales of properties and sale of businesses from normal amortization, so that’s really kind of a function of that.

Jeff Rulis

Sure. So in terms of the larger pay-offs, I mean, you do know I guess if you look out, is there any indication that you see some out on the horizon or is it as you say, it’s pretty tough to read at this point?

Russ Colombo

I would say, the percentages are probably – as we plan for our – for 2016, we plan for the same level of pay-offs, because we just don’t know and we had 70 – over $70 million in sale of properties and businesses and loan pay-offs during this past year. So as we go forward, we have to assume that pay-offs are just part of the business. And so if you want to grow 5%, let’s say in your loan portfolio, you probably have to replace 10% of it first, and then add the 5%. There is really – the volume of loan transactions really needs to be 15% to 20% just to get the kind of loan growth in the high single-digit category that we’ve shown. So this is part of the business.

Jeff Rulis

How is the loan volume pace so far in Q1?

Russ Colombo

This is early, we are not even through one month. We had a really big pipeline that our team really did an outstanding job of closing in the fourth quarter. So there is going to be a normal slowing of that activity in the first couple of months, but I don’t view that as really concerning, the team is really working on building the pipeline.

Jeff Rulis

Got it. So the pipeline was – I mean, you’ve got tremendous growth, just to sort of clear that a little bit, so you’re kind of starting the year at a lower pipeline I guess?

Russ Colombo

Yeah, there is no question. We definitely are starting on lower pipeline than we started the fourth quarter out because we closed such a big percentage of what we had in process.

Jeff Rulis

Got you. And Tani on the margin, I guess, expectations for 2016, you mentioned sort of the lower yielding securities kind of pulling down core margin. I guess, if you exclude the accretion drift, core margins, it sounds that there is still sort of – kind of tough to tread water in the near term and maybe modest pressure still?

Tani Girton

No, if you exclude the accretion, the yields on loan or the impact on the margin just from loans last year was about 3 basis points per quarter, and if you look at what the fourth quarter margin was compared to previous quarters or the year-to-date margin, you can still that it was – you can see that was still following. But primarily because the balance sheet has grown significantly and so while loans were catching up with our deposit growth, we deployed more of our earning assets into the securities portfolio as opposed to loans. Now, with loans catching up a little bit, right now, we’re a little leveraged, so we will be ratcheting down that percentage and hopefully that will help to stabilize the margin a little bit.

Jeff Rulis

Okay, I’ll step back. Thanks.

Operator

Our next question is from the line of Jacque Chimera with KBW. Please proceed.

Jacque Chimera

Hi, good morning everyone. Tani, still looking at the margins and I realize that I use a little bit different of a day-count than your calculations do but from my end, it looks like the loan yield has been stabilizing over the past three quarters, is that a fair assessment? And I mean, the core loan yield ex-accretion.

Tani Girton

Well, like I said, I think it’s pulled down margin about 3 basis points a quarter over the year ex-accretion, but as we look at the differential between the loans coming – new loans coming on and the portfolio yield just for loans, that differential is getting smaller.

Jacque Chimera

Do you have the differential for the last quarter?

Tani Girton

Let me see if I can find that and I will come back to you on that.

Jacque Chimera

Okay. And then the yields, also the – I am curious as to the yield that some of the new securities you’re putting on versus that differential as well, but in the meantime, I will hop in queue, another question, so I can kind of look at that. Looking to the unfunded commitment, I knew that that obviously had a larger impact in the quarter, is that something where you would expect it to go back to having a positive expense in future quarters or will it be lower now into the new methodology?

Tani Girton

Well, I think basically what we did was we adjusted the methodology, so that reversal of provision is more of an one-time adjustment and then we expect as a result of the new methodology for it to be more stable going forward. So less fluctuation. If you notice, we took a provision at the end of 2014, we had to reverse it in early 2015, then we took another one and then we reversed it again. So we think that the new methodology will just move that out a little bit and not cause that kind of volatility.

Jacque Chimera

Okay. So when I look from a forecasting perspective, is the provision that was taken in 3Q, is that a little bit high then for what you'd expect on an ongoing basis, realizing that it will still fluctuate from quarter to quarter?

Tani Girton

It's hard to tell what it will be going forward because it really depends on what utilization rates are doing along with the growth in the loan portfolio. So I’d say that I don't actually know what the number is going to be going forward, but we have a reserve established and to the extent that we just need to add to that reserve for loan growth that is unutilized, again, I think it should just be a smaller number going forward.

Jacque Chimera

Okay. And were utilization rates a big factor in either, did they add anything in addition to the methodology in the quarter and then how did they impact loan growth in the quarter?

Russ Colombo

I will take that. There was some utilization in the fourth quarter of unutilized commitments and so it kind of had the positive impact on two things. So, there is unutilized and there was more loan growth, but it was like $8 million, something in that range, that was utilization was higher of the unfunded than it was in the prior quarter. So it wasn't a huge number, it wasn’t a huge number in our loan totals and it did have a positive impact on the reserve for the unutilized commitment. But not huge.

Jacque Chimera

Okay. So if I look at that 114 million that was there in the quarter, roughly 106 million of that was just straight organic growth, it had nothing to do with line utilization increases?

Russ Colombo

That's right.

Jacque Chimera

Okay, great. Thank you both very much. I will step back now.

Tani Girton

Jacque, going back to your earlier question, when we look at the rates on the new loans versus what we have in the portfolio on our most active categories, which are C&I and commercial real estate, the spread between the new and the portfolio rates is actually pretty small.

Jacque Chimera

Okay. Thank you. That's very helpful.

Operator

Our next question is from Tim Coffey with FIG Partners. Please proceed.

Tim Coffey

Thank you. Good morning, everybody.

Tani Girton

Good morning, Tim.

Tim Coffey

Russ, what is your -- do you have any kind of expectation for deposit growth going forward, you talked about the new relationships you brought into the bank during ‘15, do you anticipate that to continue on the deposit side and what will that mean for the loan to deposit ratio in your mind?

Russ Colombo

The deposit growth this year frankly was higher than we had anticipated. Our branches did a tremendous job in generating deposits and let me explain some of the things we've done to enhance that growth. As you know, our bank is really bifurcated into commercial banking and retail banking for the majority of our business and commercial banking, obviously, we’re bringing a new relationship that we’re lending money, we also take deposits, but our retail side, we have -- in all of our markets, we have market manages whose job it is to go out and find and build deposit relationships.

So we've got growth in deposits, both coming from commercial banking because of new credit relationships, but also new deposit relationships and we had two or three substantial new deposit only relationships that that area of the bank builds in the last year. So my expectations are that those people continue to have their focus on building deposit relationships. We hope that our deposits continue to grow. They certainly have goals to have it grown, but I can't give you a number in terms of what my expectations are, we just don’t give that kind of guidance on deposit growth. But the good news is, we've had this growth and we are getting growth in the best kind of deposits which is demand deposits. With the 45% demand deposits, our [indiscernible] relationship deposits is not - we're certainly not going out and buying deposits just like we don’t buy loans.

Tim Coffey

Right. Okay, understood. Do you have any color on the loan growth in this quarter which is obviously just fantastic? Was there sizable relationships, it was more spread out, obviously there is a big pop in investor CRA, but what kind of commentary can you give you on the loan growth in the quarter?

Russ Colombo

Yeah, I can give you some commentaries. It came across the board. We obviously did have commercial real estate growth, but we have some significant C&I opportunities that we have closed. We had a number of relationships that were closed during the quarter. And we also had – within the quarter, we had growth up in the Napa Valley where we had the number of new winery clients that we brought in. And there were some bigger deals that we did, but there was – the volume was tremendous and the biggest growth of total came in what we call our Marin and Petaluma markets where we had significant portion of that come out of new relationships in those markets.

So it is really across the board, there is nothing that I could say it was all commercial real estate, all C&I. We had some really good growth in all of our markets. In the East Bay too we grew that market new fundings of over $15 million. So it came in all bunch of different markets which was really a good comment because we weren't – we are seeing the results of our approach not just here in Marin, but also in our new markets like the Napa and the East Bay and San Francisco. So we're pretty pleased with the level of growth, but more than that the number of new relationships in many different markets.

Tim Coffey

Okay, and then if I could [indiscernible] some of what you are seeing in terms of leading indicators for commercial real estate in the Bay Area, have those changed at all significantly in the last six months or so?

Russ Colombo

I’d say that the thing that the most – I don’t want to say concerning, but it gives you – you have to give you a pause is that commercial real estate is the valuations and the lease rates and everything are going through the roof. And most of it, as you would guess, is being driven by technology. So you are seeing in San Francisco, a commercial real estate in San Francisco, the values have just gone way up, because the lease rates are - you are getting $70 a foot for commercial real estate in San Francisco these days. And that has a trickle, I mean and certainly in the peninsula, we don’t do a lot of commercial real estate in the peninsula, but San Francisco and as you go into the East Bay, there is certainly, as you know Tim living over there, it has been a big impact as technology has kind of crossed the bridge. Downtown Oakland is, we’re seeing a renaissance because of the move of some technology companies into downtown and so the prices are starting to lift.

All that being said, we have to be very careful in terms of our underwriting of commercial real estate and the advance rates that we apply. We are pretty disciplined maintaining conservative advance rates and making sure that we’ve got borrowers to have liquidity and have guarantors. And so it is concerning because the prices are so high in the Bay Area, but the answer for that is that you have to maintain the discipline and you have to make sure that you're not over-advancing, because if things went the other direction those advance rates all of sudden look really bad. So we're maintaining our discipline.

Tim Coffey

Okay. And as a follow-up question on that, have you seen any of the insurance companies or pension funds or any other people – organizations that have driving your payoff through ’15. Have you seen any of them kind of back off?

Russ Colombo

Back off? We haven’t seen – there is nothing remarkable to report on that, I mean one way or the other. We’re seeing you know personally when we look at larger deals we maintain lower advance rates, but frankly that hasn’t hurt us because we haven't had either big influx of insurance money or the opposite direction. So it’s you know, you just have to, like I said, you just have to be very careful, conservative and be disciplined about how we underwrite and manage our relationships.

Tim Coffey

Okay, all right. Well, thank you. Those are all my questions.

Operator

We have a question from Tim O'Brien with Sandler O'Neill & Partners. Please proceed.

Alex Morris

Hey, good morning everybody, it's actually Alex Morris on for Tim.

Russ Colombo

Hi, Alex.

Alex Morris

Just a quick follow-up question on the deposit growth. Where there any kind of, I don’t want to say lumpier but kind of one time either sale of a business or kind of lumpier deposits that came in throughout quarter, was it all kind of as you mentioned relationship just general building of the deposit base?

Russ Colombo

There were a few large relationships that we brought in that were substantial like you know I can’t tell you the names just because those customers we don't, we can't disclose that but there were two or three pretty substantial multi-million dollar deposit relationships that we established during the quarter. That being said, the deposit growth was well in excess of those few small I mean those few relationships. So we’ve seen deposit growth across the board, every branch almost every branch I would say has shown deposit growth during – showed deposit growth during 2015. And like I said this is not driven by price. Our cost of deposit is 9 basis points. And so this is based on relationship, bringing in operating business not just dollars that are sitting in a CD or something like that.

Alex Morris

Right, absolutely thank you for that. And margins being touched on pretty well but just kind of a follow-up. The average deposit growth was much stronger than the average loan growth throughout the quarter. Could there be any pull-through or kind of benefit to the margin in the first question of ’15 as the average loan balances kind of catch up?

Tani Girton

Well, definitely as loan balances catch up that will be a positive. And remember that much of the loan growth that we had in the fourth quarter came in the last part in December, so we’re definitely going to get the benefit of that for the full year. Additionally, when we have that additional deposit growth, even though it pulls down the margin, of course when we go out and invest that money even in the securities portfolio, we're going to have a pops in net income as a result of that.

Alex Morris

Right, absolutely. And then just kind of one last one touching on expenses if I may. Any kind of notable tech investments or branching considerations or anything that you guys are thinking about or planning for 2016?

Russ Colombo

We have nothing to report in that case. We’re making investments all the time in technology and we've done some remodels of different locations, we've you know every opportunity we have is at least coming through, we have -- try to reduce our space and make the branch smaller to reflect the changing needs of the branch customer. Because really – we obviously don't have good traffic as we all know. So, we’re trying to get our branches, the ideal branch is 2000 and 2500 [ph] square feet and some of them are larger than that. We’re not – we’re doing that whenever we can and we’re trying to be aggressive about that to bring the size down. At the same time, we are some of our older branches we’ve done some remodels and things. But there is nothing significant about investments in facilities over the next year that we’re going to do.

Alex Morris

Sure, and just a quick follow-up to that, any kind of notable FTE plots that you guys are planning to sell?

Russ Colombo

Not really, I mean we’ve certainly got openings, we’ve got some needs up in the North Bay and Santa Rosa that we're trying to fill. Our teams are pretty well staffed in the other commercial banking offices and our branches -- and branches is always opening, but the normal turnover at branch locations is typically a teller and [ph] new accounts and things of that nature, but we don’t have any gaping holes in terms of certainly at senior levels in the bank and there is no big major -- higher than we have planned for the next year.

Alex Morris

That’s great. Thanks for answering all the questions.

Russ Colombo

Okay, welcome.

Operator

And we have got a question from Don Worthington with Raymond James. Please proceed.

Don Worthington

Good morning. It looks like the balance of FHLB advances increased in the quarter, was that just kind of short-term borrowings at year-end, it’s up about 50 -

Tani Girton

Yes, that’s just our overnight borrowings as we funded more of the loans. It takes a while to catch up with our securities portfolio either investing or divesting to try to maintain our cash at the zero spot.

Don Worthington

Okay. And then what would you expect the tax rate to be for 2016?

Tani Girton

So we don’t know what the rate for 2016 is going to be. When we plan, we base it on our best knowledge, which is what we did at the end of 2015. So we’re looking at about a 36.5%.

Don Worthington

Okay, great. Thank you. And then I guess my last one is, in terms of the M&A environment, would you characterize seller expectations as higher or lower than last quarter?

Russ Colombo

Nobody ever lowers their expectation. I think that – I mean, you see some of the transactions that have been closed during the past year and certainly the multiples of book value, our tangible book value has increased and there are reasons why some of these are being very high. I mean, obviously the deal like Bridge Bank or Square 1 or – those are unique situations, and so they’re obviously paid a lot for those banks, but they got a lot too and there is reasons that those multiples are higher.

All that being said, that doesn’t change. I think there is an expectation in every boardroom that is considering selling, they see those numbers and so it does drive some of that – some of those expectations higher. But we don’t really – we don’t price. When we look at it – if we are looking at a transaction, we’re really not pricing based on a multiple of book. We’re pricing on earnings opportunities and what that can – whether that can be accretive to our shareholders and over what period of time and what kind of cost saves we can achieve and those kinds of things. So the multiple of book is a result of what the other work that we do, it’s kind of – it just comes out at the other end, you don’t start there. So that’s the way we - I know that everybody else does because they price the deal that way. But that still doesn’t – that doesn’t cause potential sellers to change your expectations and just they see numbers and they decide that they should get and turn the multiple right or wrong.

Don Worthington

Okay. Thank you, Russ.

Russ Colombo

Okay, Don. Thanks.

Operator

[Operator Instructions] And we have a follow-up question from Tim O'Brien with Sandler O'Neill and Partners. Please proceed.

Alex Morris

Hey, just one more follow-up. The seller and benefit expense trended down throughout the year and had a nice decline in the fourth quarter. Any kind of color on what drove the decline in the fourth quarter? And maybe should we expect a little bit of an increase in the first quarter with some seasonal expenses?

Tani Girton

So in the fourth quarter what we do is we end up truing up our -- what we’ve accrued for bonuses and employee stock option program, so there was a little bit of that. And in the first quarter, you will see some of the early year expenses coming through for the increased tax rates as we – before we complete the fulfilment of the taxes on some of this federal income tax and social security. So I think you might see a little bit of a bump there.

Russ Colombo

Alex, when we budget each year, we anticipate bonuses being paid at the 100% level across the board on every, all incentive plans and everything and then as we get closer to the end of the year, we try to do a true-up, some true-up in the fourth quarter leaving and then completing that probably in the first quarter, because we don't -- you don't know, sometimes, you might have to increase the allocation, you might have to decrease it depending upon how the year went. The year went really well and so we're pretty close, but there was a little true-up as Tani mentioned, but -- and that does happen every year.

Alex Morris

That's great. Thank you very much.

Russ Colombo

Okay.

Operator

And there are no further questions registered at this time.

Russ Colombo

Okay. Well, I thank you all for your calling in today and we appreciate your interest in the bank and we look forward to talking to you again next quarter. Thank you very much.

Tani Girton

Thank you.

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