TriState Capital Holdings' (TSC) CEO Jim Getz on Q1 2016 Results - Earnings Call Transcript

| About: TriState Capital (TSC)

TriState Capital Holdings, Inc. (NASDAQ:TSC)

Q1 2016 Earnings Conference Call

April 21, 2016, 08:30 ET

Executives

Jim Getz - Chairman, President & CEO

Mark Silva - Chairman and CFO

Analysts

Michael Perito - KBW

Matt Olney - Stephens

John Moran - Macquarie

Bryce Rowe - Baird

Operator

Welcome to TriState Capital Holdings Conference Call to discuss the financial results for the three months ended March 31, 2016. [Operator Instructions]. Please note, this event is being recorded. Before turning the call over to management, I would like to remind everyone that today's call may contain forward-looking statements related to TriState Capital that may generally be identified as describing the Company's future plans, objectives or goals. Such forward-looking statements are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those currently anticipated.

These forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. For further information about the factors that could affect TriState Capital's future results, please see the Company's most recent annual and quarterly reports, filed on Forms 10-K and 10-Q. You should keep in mind that any forward-looking statements made by TriState Capital speak only as of the date on which they are made. New risks and uncertainties come up from time to time and management cannot predict these events or how they may affect the Company. TriState Capital has no duty to and does not intend to update or revise forward-looking statements after the date on which they are made.

To the extent non-GAAP financial measures are discussed in this call, comparable GAAP measures and reconciliations can be found in TriState Capital's earnings release which is available on its website at TriStateCapitalBank.com

Representing TriState Capital today is Jim Getz, Chairman, President and Chief Executive Officer. He will be joined by Mark Sullivan, Vice Chairman and Chief Financial Officer, for the question-and-answer session. At this time, I would like to turn the conference over to Mr. Getz.

Jim Getz

Good morning and thank you for joining us today. We're pleased to report first quarter results that continue to reflect the positive outcomes of our disciplined execution over the past decade to build our growth-oriented business. Our focus is on achieving sustainable and meaningful increases in earnings per share over multi-year periods and our performance continues to support this objective, with earnings per share of $0.21 in the first three months of 2016, up nearly 17% over last year's first quarter. We delivered year-over-year loan growth of 17%, while maintaining the high credit quality and increases of 13% in deposits, 11% in net interest income, 7% in total revenue, 11% in pretax pre-provision earnings, all while reducing non-interest expense as a percentage of assets.

We're laser focused on building our business for the long term, so while we're very pleased with our first quarter results, more importantly, we feel they positively demonstrate the long term trajectory and continued potential of the business model we're building. To that end, there are a few highlights I would like to draw your attention to. Our 11% growth in net interest incomes reflects the balance sheet strategy that has delivered increasing net interest income dollars every single year since TriState Capital's inception in 2007, even in an declining interest rate environment. This has been driven by strong long term loan growth, again up by 17% year-over-year. Coupled with strong deposit growth and significant asset sensitivity, our balance sheet has primed to take advantage of any rate hikes and December's action by the Fed put that in motion.

In fact, even with more than 47% of our loan portfolio in lower risk private banking loans, our net interest margin expanded for the first time since 2013 by 5 basis points to 2.33%. However, our business model is built to continue increasing net interest income dollars through prudent loan and deposit growth, at a rate that outpaces margin compression. We expect this to continue, as our portfolio becomes more heavily weighted toward lower risk and less capital-intensive private banking loans and direct commercial loans. Private banking loan balances totaled $1.4 billion or 47% of the total loan portfolio at the end of the first quarter, up nearly 29% from one year prior. You recall, one year ago, we announced the vast majority of TriState Capital's loans in this portfolio qualify for reduced risk weighting for regulatory capital purposes under Basel III. Clearly the growth of TriState Capital's private bank portfolio is uniquely advantageous and profitable for us.

We grew this portfolio 2% from December 31 to March 31, when markets were volatile, as they were in the first quarter, our private bankers worked with financial intermediaries and our clients to queue up new margin loans, backed by marketable securities. And to manage the level of existing balances, relative to their comfort levels and cure requirements. Then we can work with the clients to patiently fund new loans and increases on existing ones, when clients are comfortable with their collateral values, given market conditions. We're pleased to have experienced loan growth of 29% in our private banking segment over the past 12 months, in an environment that was continually challenging to the various stock indices. The power of our distribution system is reflected in a number of performance metrics.

On a gross basis, for the first quarter of 2016, we funded $71.6 million in loans, backed by marketable securities. Partially offset by $47.5 million in reduced balances that we attribute to peer activity and proactive reductions in client balances ahead of the market volatility. In addition, we booked 247 new loans which was an increase of 17.6% over the first quarter of 2015. We also took in 334 new applications which was an increase of 21% over the first quarter of 2015. In all, we're looking forward to a very robust pipeline in the second quarter. While the non-purpose margin loan itself is a proven and familiar product, what is very hard to replicate is TriState Capital's unique relationship-driven distribution channel which allows us to offer loans primarily through tens of thousands of independent financial advisors with whom we do not compete and in fact, we support through our bank and investment management offerings. This national referral network of financial intermediaries was up from 119 firms to 125 in the first quarter alone. In addition, our commitment to efficient and effective execution in originating these loans creates a better experience for these high net worth clients and their advisors than they have when trying to access their debt products.

As a reminder, most of our private banking loans, 89% at the end of the first quarter, are over-collateralized by well-diversified liquid securities that we monitor daily with our proprietary technology. This model has been tested over the last 12 months with periods of higher volatility, such as August 2015, as well as January and February of this year. Since inception, we have experienced no losses on any private banking loans backed by marketable securities. Once again, our risk management processes and procedures for non-purpose margin loans worked exactly on plan.

Specifically, out of over 2300 private banking channel run accounts collateralized by marketable securities, only 41 accounts required cures in January and February, all of which were satisfied. Obviously, we're very proud of this, it clearly supports our growth strategy for this product and our confidence in the quality of our distribution system and risk management. Our regional middle-market commercial banking business has also seen positive trends. Commercial loans totaled more than $1.5 billion at the end of the first quarter, increasing more than 8% from one year prior. Commercial banking remains an important part of our business model and a key component of our 15% long term cap annual loan growth goal.

With the quality of our commercial client base, the strength of our lending team and strong activity in the marketplace, we continue to see great potential for our overall middle market direct lending business. Now, I would like to give you a rundown of the flows in our total loan portfolio, looking at a 12 month trend. On March 1, 2015, we had a balance of some $2.5 billion of loans, we originated over the past 12 months some $849 million of loans, we had some payoffs of $424 million and we had net loan take outs of some $5.5 million. We had a change in our net loan balance, up some $419 million, for an increase of 17%. Our commercial and industrial loans were down some 7%, our commercial real estate loan outstandings were up some 21% and our private banking loans were up some 29%.

TriState Capital Bank has been successful in providing a full suite of services to meet our commercial borrowers' needs. During the first quarter of 2016, our clients increased use of interest rate swaps generated fees totaling some $1.2 million, compared to $1.6 million for the entire 12 months of 2015. While the first quarter was obviously exceptional, bank has a robust pipeline, just three weeks into the second quarter and we're very satisfied with the value this product provides to our clients. Likewise, with average total deposit balances of some 14% and average checking and money market deposit account balances up 20%, our bankers demonstrated outstanding execution on our funding strategies.

As we have mentioned before, we have invested in the addition of talent to our treasury management, financial institutions and family office deposit efforts and then we expect these very talented professionals to continue to grow our deposit levels and treasury management usage over time.

Now, turning to credit in the first quarter, we again maintain strong asset quality metrics. TriState Capital's non-performing assets remain well below the average for commercial banks, with assets of $1 billion to $5 billion. At the end of this year's first quarter, our bank's non-performers measured 0.67% total assets, well below the 1.22% average for commercial banks with $1 billion to $5 billion in assets in the fourth quarter of 2015 and well below the 1.05 reported by the bank a year ago. The $4.5 million increase in non-performing assets during the quarter was primarily due to the downgrade from substandard to nonperforming of a single C&I loan to an in-market borrower in the value-add refractory business which has material sales to the construction and metal processing industries.

The overall quality of the loan portfolio continues to be strong. As a percentage of total loans, adverse rate credits at quarter-end were favorable at 1.96% which is meaningfully lower than 2.35% at March 31, 2015. Our provision for the quarter was $122,000, as the provisions related to DAB rates were offset by the payoff of a nonaccrual loan and pay-outs on other adverse credits. We're also very pleased to report that we experienced no charge-offs in the first three months of this year and in fact, recognized recoveries totaling some $450,000 during the quarter. We believe that asset quality is a comparative to source of strength for TriState Capital Bank. Another important source of strength and growth of the Company is Chartwell Investment Partners. During equity market volatility in the first quarter, Chartwell stayed in close contact with clients and aggressively pursued new ones, while our investment professionals worked to maintain highly credible investment performance.

Net inflows totaled and $604 million in the first quarter of 2016, exceeding net inflows of 502 for all 12 months of 2015 and meaningfully offsetting modest market depreciation of $30 million in the first three months of this year. In terms of market performance, against benchmarks in the quarter, three of Chartwell's 12 investment strategies beat their benchmarks on one-year performance. Eight beat their benchmarks on three year performance and nine of12 beat their benchmarks on five-year performance.

As a result, during a quarter with substantial equity market volatility, Chartwell grew assets under management by 7% to $8.6 billion. This compares very favorably to recent reports from publicly held asset managers, showing an organic growth at the top performers was running at a rate of 2% for the first quarter. This success reflects the outstanding work that Chartwell team has been doing to build relationships and convert new business. Business development takes time in the asset management arena, so the inflows and new clients we saw in early 2016 reflect relationships built over last year and truly showcase our Company's sales, distribution and service capabilities. We could not be more pleased with this performance, particularly when we consider the long term impact to our bottom line. At the end of 2015, Chartwell's annualized revenue run rate was $29.3 million. Just three months later, at March 31, 2016, it increased nearly 5.5% to $30.9 million.

While market volatility in January and February compressed first quarter investment fees to 0.36% on weighted average basis, our annual run rate reflects the tremendous impact of our growth in new and existing accounts. We intend to put this proven sales and distribution capability to work, once we complete our acquisition of The Killen Group. We continue to expect to close this transaction this month, by the end of April. We remain pretty really excited to be able to offer Killen's conservative allocation strategy for the Berwyn Income Fund to current and perspective clients. As you have heard me say before, the Berwyn Income Fund takes a major step toward giving Chartwell products for all seasons. The Berwyn Income Fund fulfilled its investment mandate and delivered exceptionally good performance in the first quarter, with the return of 3.08% through March 31, beating the major U.S. market indexes and most of the fund's benchmarks.

For the three and five year periods ending March 31, 2016, the Berwyn Income Fund beat all of its benchmarks. We're pleased by the continuing investment performance Killen and Berwyn Fund have delivered since we initiated due diligence last year and we're eager to get to work with their team.

As I explained when we first announced the transaction, Killen's investment strategies and the Berwyn Funds have received very limited sales and marketing support. As I also noted, believe this was a key factor as Killen's assets under management declined by about $1 billion in the 12 months leading up to the deal's announcement. Not unexpectedly, Killen net outflows continued in the first quarter, reducing assets under management by $199 million, to $2.1 billion at March 31. This trend is why we structured deal terms with contingent consideration, based on run rate EBITDA at the end of 2016, protecting TriState Capital from any interim decline in Killen asset under management and giving us some time to neutralize the outflows there.

Transaction terms are unchanged from December, but as a reminder, at closing, we will pay an initial $15 million or five times Killen's base FY '15 EBITDA of $3 million. Contingent consideration is structured to reward sellers 7 times for any EBITDA growth above the $5 million base, utilizing client assets under management at December 31, 2016. Currently, our run rate EBITDA assumption ranges from $3 million to $3.7 million for Killen at 12/31/16. This would result in contingent consideration ranging from zero to $5 million. Combined with an upfront payment of $15 million, we currently estimate the all-in transaction value to be $15 million to $20 million.

Based on our latest assumptions, the Killen acquisition is currently estimate to be valued at 5 to 5.4 times projected annual run rate EBITDA at December 31, 2016. This compares very well to the investment management industry multiples of 6 to 11 times EBITDA which we saw in competitive evaluations at the end of last year. We also currently expect that for the second half of 2016, Killen would add approximately $0.03 in earnings per share or $0.06 to $0.07 on an annualized basis. By integrating Killen into Chartwell while maintaining its Berwyn Mutual Fund brand, we believe we will have ample talent and infrastructure for a scalable platform which can accommodate very significant organic growth from the combined investment management businesses and offer valuable products to our institutional and financial intermediary clients.

We continue to expect the deal to be immediately accretive, with compelling strategic value, designed to accelerate the growth of Chartwell assets under management, revenue and profitability over the mid and long term. One of the most significant strategic benefits for the Killen transaction continues to be the distribution opportunity. With Chartwell's retail marketing capability, we believe we have significant potential to attract new client assets and accounts to Killen's proven investment products, notably the Berwyn Income Fund. Before we turn it over to questions, a few final thoughts. Between commercial banking, private banking and investment management, disciplined diversification is of great strategic importance to our model. Our operational platforms, talent and income streams are well diversified and our experience for the quarter very nicely demonstrated how this model serves an important role in promoting stability and consistency in our performance over time.

In 2016, we will continue to use our scalable branchless business model and expanding financial services distribution network to facilitate the cost effective growth of our private banking, commercial banking and investment management businesses. We remain particularly proud that in spite of the near zero interest rate environment we experienced for so long, this model has allowed us to consistently achieve significant earnings growth. Today, with the potential for future rate hikes on the horizon, our balance sheet is well-positioned, we feel confident that our loan and deposit generating efforts, coupled with continued expansion to a highly scalable investment management business, including the contribution anticipated the pending Killen Group acquisition, we will produce sustained earnings-per-share growth in the future.

That concludes my prepared remarks, so now I ask Mark Silva, our Vice Chairman and CFO, to join me for Q&A. Operator, please open the lines for questions.

Question-and-Answer Session

Operator

[Operator Instructions]. The first question comes from Michael Perito of KBW Please go ahead.

Michael Perito

I wanted to Chartwell, did AUM growth was solid, it looked like when looking at the reported revenue, so that maybe the average fee rate fell little bit sequentially, I guess A, is that true and B if it is why did that happen and also can you maybe just make a comment to what the future rate we should be using once the Killen comes on, I think it was a 4 or 5 basis point benefit last we spoke, is that still the case?

Jim Getz

Yes. In the Chartwell the average weighted fee dropped by one basis point to 36, that was actually caused by the fact that we have a large investments sub advisor that we handle and we have been consistently in our mid-cap product have been receiving performance fee of about $350,000 a quarter. We did not have the level of performance that we have had in the past couple quarters thus, we missed that 350,000 this quarter.

Secondly, on the Killen Group, we will that will cause this to go up close to the mid-40s, probably around 43, 44 basis points.

Michael Perito

And Mark, maybe question on the margin. It sounds like the benefits this quarter at least in near term, the opportunity for additional margin expansion will still be difficult given the private banking loan growth. But I guess it's the hope that you guys can kind of maintain this level until we get some more hikes or as the growth continues do you guys expect to see a couple -- few more basis points of compression over the next couple of quarters?

Mark Silva

I think you have framed that well, Mike. I would say that the increase from 228 to 233 absent an additional increase this year would probably stay in that range working closer to the 228 that we started the year. I would say with another increase we would more likely maintain the mid-230s.

Operator

The next question comes from Matt Olney of Stephens. Please go ahead.

Matt Olney

For the organic loan growth, little bit slower start to the year in the first quarter, how you’re feeling about your goal of the mid-teens goal given the slower start. I'm just trying to get a better feel for the pipelines today.

Jim Getz

I feel comfortable with the plan to hit the 15% comp and annual growth rate. If I take you back to the first quarter of last year, we had loan growth of some 3.5% and for this quarter, it was 2%, we also during that quarter did not have the type of volatile markets we had in January and February of this year where there was degree of uncertainty in that regard. We have a very strong and robust pipeline for the second quarter. We feel that we're picking up the pace handily.

Matt Olney

And then secondly on credit quality, the senile [ph] loan that went to non-performing status in the first quarter I was looking for a few more details on this. Was there in fact an impairment test on this in the quarter, any specific reserve and is this a shared national credit? Thanks.

Jim Getz

Okay. Let me put this all in total perspective. First of all, it was a shared national credit. Secondly, you are probably aware that the shared national credit ratings were released in mid-March right before the end of the quarter, Matt. And as a result, we had two upgrades and three downgrades. The particular credit that you’re talking to was in fact a downgrade. We had it rated as a substandard credit. The regulatory authorities came back and rated it a non-performer We did not have it rated as a non-performer, we immediately moved it to nonperforming status at that particular period of time.

I must say we're challenging the rating as non-performer not the rating as a substandard which we had it at -- we have an exposure today of about $5.1 million. This is a credit that we have had for quite some time here at the bank. It's a North America producer, proprietary refractory products. The primary industry that it services is the construction and metal processing businesses. This is an example of a company that has excellent management, very tough industry at this point. They have taken steps to downsize the company through personnel facilities reduction. It is in fact, it's listed as a non-performer but it is a non-performer, they have made all their payments, they have never ever missed the payment here at TriState and like I said we’re challenging the rating at this point.

Mark Silva

We have a specific reserve on it as well, Matt.

Matt Olney

And how much is that, Mark?

Mark Silva

1.1.

Operator

The next question comes from John Moran of Macquarie. Please go ahead.

John Moran

Just to close out the credit discussion on that one, are you guys agent or is that one that you’re participating in?

Jim Getz

We're participating in, it's a regional agent.

John Moran

Maybe back on the flows at Chartwell, a really good quarter obviously. Was the nature of those more skewed retail or institutional and could you give us a quick update in terms of kind of cross sell through the PV [ph] channel on the Chartwell product?

Jim Getz

The flows were a combination of institutional and retail. The retail at the end of the year was around $800 million. It's today a little over $880 million. So we’re well on our way to pressing on a $1 billion. So we're very pleased with the progress that we're making. They are currently doing business with 28 financial intermediaries at this time.

John Moran

28 out of, I think you said you're up to like 125 now so--

Jim Getz

125 that we have in the private banking arena, John.

John Moran

So there's still a long runway in terms of penetration?

Jim Getz

That’s right and they are really making very good progress. They are doing a great job.

John Moran

And could I speak one more and just in terms of capture rate on the retail side versus the institutional side, is it meaningfully different, so in others in addition to the Killen Group bump that we will see in capture rate, would it be reasonable to sort of expect that we're ramping up on the Chartwell side as well?

Jason Boling

We're definitely going to be continuing to capture additional market share. To be candid with you, what the Killen product gives us is a product that resonates in this type of market environment. It's a conservative allocation product, has credible performance and a volatile market. The issue to be candid with you on why the asset continue to deteriorate there, it's just very frustrating. There is no structured communication program with the current shareholder base and there isn't a program for expanding that base at all. And we continue to have a five-star rating on the funds so this is a major point of focus of the management team to get this well-positioned in the market place.

Operator

[Operator Instructions]. The next question comes from Bryce Rowe of Baird. Please go ahead.

Bryce Rowe

Mark and Jim, just wanted to follow up on loan pricing, the questions I had about the inflows at Chartwell we’re at there, but just curious what you saw from a pricing perspective within the three buckets, C&I, CRE and private banking now that we've had the first fed rate increase and so trying to understand what the driver behind the impressive loan yield increase of what I'm calculating to be about 13 basis points sequentially. Just trying to get a sense for the drivers behind that increase. Thanks.

Jim Getz

Why don’t I comment on the pricing that we’re seeing in the market and then I'll turn it over to Mark here. Looking at the three categories that we’re in, the commercial, the industrial, we're seeing those loans being priced anywhere from 200 basis points to 275 basis points that were LIBOR. We're seeing on the commercial real estate side anywhere from two in a quarter to 300 over LIBOR and the private banking has remained stable at two in a [ph] quarter. To be quite honest, the fed's move has had zero impact except on our bottom line. The 25 basis point increase no one is giving us any pushback or anything or brings it up, it's like a nonevent. Mark?

Mark Silva

Yes Bryce, you’re correct on the 14% increase at a loan yield. It's virtually all attributable on the volume rate increase, it's all attributable to the rate from the December hike and the volume that we had was really in the tailend of the quarter. So we really [indiscernible] lift on volume. So it is attributable to the rate and the mix with the private banking and the paydowns from the existing portfolio which were higher than what they are coming on today, that combination goes against the rate increase. But the full '14 is attributable to that rate increase.

Bryce Rowe

And just a follow-up Jim and Mark, on the mix of the loan portfolio, you guys have talked here in over the last several years about deemphasizing C&I and emphasizing CRI and private banking and obviously have executed on that. Trying to get a sense for where you think that’s in our portfolio bottoms or maybe where and when in our portfolio bottoms, any help on that would be helpful. Thanks

Jim Getz

We apologize, we didn’t mean to communicate that we were deemphasizing the commercial, industrial or the commercial real estate business. What we wanted to directly convey is that we have a business that has huge momentum behind its mainly private banking. There's no way you prudently could be growing over the past couple years by 29%, the commercial, industrial and the commercial real estate business.

What we were focused on with the commercial industrial is deemphasizing the private equity related share national credits which we have been very successful at doing and what you have seen the real drain their if you go back to January 2014 it was $225 million of those credits today, it's 51 million. So that real reduction you've seen us making by design strategic decisions to eliminate that. And to answer your question, Bryce on the where you will see that stop, I think you’re going to begin to see in the second half of this year positive growth there in that portfolio of direct C&I business. As you probably noticed our commercial real estate business has been growing pretty nicely over the past couple of years, so we do see that commercial business as a result of us having pretty well gotten to our goal of purging that portfolio of private equity related share national credits, it's going to grow.

Bryce Rowe

And Jim, didn't mean to mistake any kind of de-emphasis on the C&I, I guess it's more of a relative deemphasizing. Thank you.

Jim Getz

Thanks.

Operator

The next question is a follow-up from Michael Perito of KBW. Please go ahead.

Michael Perito

I just want to talk on the capital front. You did about 1.7 million on the buyback dollars on the buyback, sorry. Just curious as to what we should expect in the next couple quarters? I think last call you mentioned that the plan was generally speaking to finish the authorization like you did your previous one. Is that still a fair assumption and maybe just remind us where you guys are comfortable in terms of pricing buying back your stock?

Jim Getz

Right, that's a fair assumption that we will use all that money up to buy back shares and what we would anticipate that most of that money will be put to use over the next 9 to 12 months. So we don't see us not acting on that. We're making an announcement, we're telling we’re going to do, we are going to do it. So you will see that fully utilized. With regard to the pricing, I suggest that we all take a gaze at our book value and our tangible book value and take a look at the price of $12.70 and we believe very strongly that stock is undervalued and you’ve seen -- if you take a look at our 10 largest shareholders, five of them at the last reporting increased meaningfully almost 650,000 shares, their position, so they feel in-lined with the company.

Michael Perito

And just maybe one another follow-up for Mark. The Killen Group is coming on next quarter. Any thoughts you could provide us on maybe a good non-interest expense run rate kind of surrounding -- I think on the core basis about 80 million this quarter. I mean does that kind of move up to a 20 million plus or minus range, any thoughts there that you could offer us?

Mark Silva

What you’re saying -- you're talking about full year annualized--

Michael Perito

I'm just talking second quarter of quarterly -- I was just talking about the quarterly run-rate.

Mark Silva

I'm not following your numbers on that, Mike.

Michael Perito

So the first quarter non-interest expense was about $18 million.

Mark Silva

And you're asking about Killen?

Michael Perito

Yes, just how you guys expect once Killen closes to kind of impact that number in the second quarter and going forward?

Mark Silva

I think Killen is similar to Chartwell in terms of the model. So on the revenue, back in October, December range, we had a higher run-rate, 14 point something and now we're seeing close to 11. So the $0.10 earnings per share is now in that 6 to 7 range on an annualized basis. So the ratios are similar, so at 11 you would expect about 75% in non-interest expense associated with it. So about a 25% margin.

But the key for us in this isn't what are the rates 14, 3 or 11, where the purchase price is 15 or 18. The real key is with our sales and distribution efforts, what is the run rate and AUM and EBITDA going to be 18, 24 months from now? That's the real key to Killen.

Operator

And next we have a follow-up from John Moran of Macquarie. Please go ahead.

John Moran

Sorry if I missed this guys, but do you’ve an update on when you expect Killen to close exactly. Is it early in 2Q or is it kind of later in the--?

Jim Getz

How about April 29th?

John Moran

That works for me. Thanks.

Operator

There are no additional questions at this time. This concludes our question and answer session. I would like to turn the conference back over to Mr. Getz for closing remarks.

Jim Getz

Thank you very much for spending time with us, we continue to appreciate your commitment to our company and look forward to working with you in the new quarter. Have a good day.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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