Community Bank System's (CBU) CEO Mark Tryniski on Q2 2016 Results - Earnings Call Transcript

| About: Community Bank (CBU)

Community Bank System, Inc. (NYSE:CBU)

Q2 2016 Earnings Conference Call

July 21, 2016 11:00 AM ET

Executives

Mark Tryniski – President and Chief Executive Officer

Scott Kingsley – Executive Vice President and Chief Financial Officer

Analysts

Alex Twerdahl – Sandler O’Neill

Joe Fenech – Hovde Group

Collyn Gilbert – KBW

Operator

Welcome to the Community Bank System’s Second Quarter 2016 Earnings Conference Call. Please note that this presentation contains forward-looking statements within the provisions of the Private Securities Litigation Reform Act of 1995 that are based on current expectations, estimates and projections about the industry, markets and economic environment, in which the company operates.

Such statements involve risks and uncertainties that could cause actual results to differ materially from the results discussed in these statements. These risks are detailed in the company’s annual report and Form 10-K filed with the Securities and Exchange Commission. Today’s call presenters are Mark Tryniski, President and Chief Executive Officer; and Scott Kingsley, Executive Vice President and Chief Financial Officer. Gentlemen, you may begin.

Mark Tryniski

Thank you, Max. Good morning everyone, thank you for joining the call. Second quarter was a good one in nearly every respect and reflects the ongoing course rates and operating trends of all our business lines.

Commercial banking, mortgage banking, auto lending and consumer banking, all generated growth with the total loan portfolio growing at an annualized pace of 7% for the quarter over $100 million year-to-date. Looking back over the trailing 12-month period, organic growth of our entire loan portfolio and core deposits were both 5.8%, which is a highly productive performance in our markets.

Operating expenses in asset quality continued to be additive to performance, assets, revenue and margin results of our benefits, wealth management and insurance businesses. Net margin revenues now constitute over 35% of total revenues, providing that just for diversification, but multiple points of opportunity for further growth.

The Oneida Financial transaction which closed in December is integrated extremely well, with loans up since year-end. Deposit retention of 97% in significant year-over-year pre-tax earnings growth of OneGroup, our insurance subsidiary. As I commented on last quarter, we continue to implement and built out DFAST systems and have a road map that provides for mid-2017 reporting capabilities, which positioned us well with respect to the $10 billion threshold, regardless of whether that is near-term or beyond.

We’re in very good shape heading into the second half of the year. Our capital loan liquidity are at record levels, all our businesses have strong operating moment, and our pipelines remain above where they were at this time last year. In summary, we are looking forward to a productive second half of 2016. Scott?

Scott Kingsley

Thank you, Mark and good morning everyone. As Mark mentioned, the second quarter of 2016 was a very solid operating quarter for us and again included the activities of the Oneida Financial acquisition that we completed last December. Second quarter operating EPS of $0.58 per share was consistent with last year’s results and matches an all-time high for us in the second fiscal quarter of any year, despite observing a $0.2 per share year-over-year negative comparison from a higher effective tax rate.

I’ll first cover some updated balance sheet items. Average earning assets of $7.65 billion for the second quarter were up 11.5% in the second quarter of 2015 and $42 million higher than the first quarter of this year. Average loans increased $655 million year-over-year or 15.5%, reflective of the Oneida transaction and a solid last five quarters of organic growth.

Ending loans increased $84 million in the second quarter over 1.7% on a linked quarter basis. Average investment securities were up 5.2%, compared to the second quarter of 2015, entirely related to the Oneida transaction. Average deposits were up $951 million or 15.6% from the second quarter of 2015, including approximately $700 million from the Oneida transaction with the remainder from solid core deposit growth over the past four quarters.

Total deposits, principally municipal balances declined $161 million in the second quarter of 2016, as we seasonally expected. Average borrowings for the quarter were $249 million, down $48 million on a linked quarter basis.

Quarter end loans in our business lending portfolio of $1.54 billion were $241 million or 18.6% above the end of June of last year with approximately $150 million of that increase coming from the Oneida acquisition. Asset quality results in this portfolio continue to be very favorable with net charge-offs of under 10 basis points of average loans over the last nine quarters.

Our total consumer real estate portfolios of $2.18 billion comprised of $1.78 billion of consumer mortgages and $400 million of home equity instruments were essentially flat with the end of the first quarter. We continue to retain in portfolio most of our short and mid-duration mortgage production, while selling secondary eligible 30-year instruments. Asset quality results continue to be very favorable in these portfolios with total net charge-offs over the past nine quarters of just 7 basis points of average loans.

Our consumer indirect portfolio of $993 million was up $52 million from the end of the first quarter, which was seasonally expected. Despite solid new car sales again in 2016, used car valuations were the largest majority of our lending if concentrated, continue to be generally stable. Net charge-offs in this portfolio were 33 basis points of average loans over the last nine quarters, a level we consider very productive and which has stayed quite consistent.

The first half of 2016 was a continuation of the favorable overall asset quality results that is part of our credit DNA. Second quarter net charge-offs of 11 basis points of average loans were generally consistent with the level reported in both the first quarter of this year and the second quarter of last year. Non-performing loans comprised of both legacy and acquired loans, ended the second quarter at $24.1 million or 0.49% of total loans, slightly improved from the ratio reported at the end of March.

Our June 30, 2016 reserves for loan losses represent 1.02% of our legacy loans and 0.95% of total outstandings after the Oneida acquisition. Based on the most recent trailing four quarters results, our reserves still represent over six years of annualized net charge-offs. We also continue to closely monitor our credit relationships influenced by natural gas related activities in the Marcellus Shale region of Northeast Pennsylvania, which experienced only modest changes during the second quarter.

As of June 30, our investment portfolio stood at $2.93 billion and was comprised of $235 million of U.S. Agency and Agency backed mortgage obligations or 8% of the total, $645 million of municipal bonds or 22%, and $1.99 billion of U.S. Treasury Securities or 68% of the total. The remaining 2% was in corporate debt securities.

The portfolio contains net unrealized gains of $164 million as of quarter end, clearly the highest level we’ve ever reported. Our capital levels in the second quarter of 2016 continue to be very strong. The Tier 1 leverage ratio stood at 10.14% at quarter end and tangible equity to net tangible assets ended June at 9.58%. Tangible book value per share was $17.99 per share at second quarter end and included $41.5 million of deferred tax liabilities generated from tax deductible goodwill or $0.94 per share.

Shifting out of the income statement, our reported net interest margin for the second quarter was 3.73%, which was down 3 basis points from the second quarter of last year and 6 basis points higher than the first quarter of 2016. Consistent with historical results, the second and fourth quarters of each year include our semi-annual dividend from the Federal Reserve Bank of approximately $600,000, which added 4 basis points of net interest margin to second quarter results, compared to the late third and first quarters.

Proactive and disciplined management of deposit funding costs continue to have a positive effect on margin results. First quarter non-interest income was up 30.5% from last year’s second quarter – I am sorry, second quarter non-interest income, and was meaningfully impacted by the Oneida acquisition. The company’s employee benefits administration and consulting businesses posted a 3% increase in revenues with nearly half of that coming from Oneida activities.

Our Wealth Management and Insurance Group revenues were $6.1 million above the second quarter of 2015 with almost 97% of that growth related to the Oneida acquisition, primarily insurance agency revenues. Consistent with Oneida’s historical results, the second quarter of the year was not as seasonally strong as the first quarter of the year in the insurance business. We expect third quarter insurance revenues to be more in line with the second quarter with another seasonal improvement in the fiscal fourth quarter expected.

Our second quarter revenues from deposit service fees were seasonally higher than the late first quarter and up from the levels reported in the second quarter 2015 with over half of that increase coming from the Oneida acquisition as higher card related revenues were able to more than offset lower utilization of account overdraft protection programs.

Mortgage banking and other banking services revenues were up $800,000 from the second quarter of last year and included $400,000 of non-recurring insurance and other gains. Second quarter operating expenses of $66.4 million included a full quarter of the operating activities of the Oneida acquisition and the approximately 275 employees that were added, over half of which working in support the insurance and benefits business. As expected, lower payroll taxes expense was the largest contributor to a $1.2 million decline in salaries and employee benefit cost compared to the first quarter.

Consistent with the recent historical experience, we did grant merit increases to our employees of approximately 3% in January of this year. We have also continued to invest in improving our infrastructure and systems around the requirements of DFAST, as we get closer to the $10 billion asset size threshold. Our effective tax rate in the second quarter of 2016 was 32.7% versus 30.5% in last year’s second quarter. Certain legislative changes to state tax rates and structures over the past two years resulted in the majority of the results in higher rates, including those related to our overall asset size being above $8 billion on a consolidated basis. This higher effective tax rate was and will continue to be a $0.2 per share orally headwinds compared to the quarterly results of 2015.

Although we actually reported improved net interest margin in the second quarter of 2016, we continue to expect more net interest margin challenges than opportunities in this persistent lower for longer rate environment. Although the majority of our new loan originations in our consumer lending portfolios are at yields consistent with those of the existing instruments, yields on new commercial originations remain modestly below our blended portfolio yields.

Our funding mix and costs remain at very favorable levels today which we do not expect significant improvement. Our growth in all sources of recurring non-interest revenues has been positive and we believe we’re positioned to continue to expand in all areas.

While operating expenses will continue to be managed in a disciplined fashion, we do expect to consistently invest in all of our businesses. We continue to expect Federal Reserve Bank semi-annual dividends in the second and fourth quarter each year, as well as our annual dividend from certain pool retail insurance programs in the fiscal third quarter.

Our second quarter 2016 net charge-offs results were again favorable and although we do not see signs of asset quality headwinds on the horizon, it would be difficult to expect improvements to current asset quality results.

Tax rate management will continue to be subject to successful reinvestment of our cash flows into high quality municipal securities, which has been a challenge at times during this period of slow and low – sustained low rates. In addition, as we previously mentioned near the end of 2015 and then actually experienced in the first half of this year, our larger consolidated asset size eliminated certain tax planning opportunities resulting in the 1.6 percentage point increase in our full year expected tax rate in 2016.

However, despite some of these apparent challenges, we believe we remain very well-positioned from both a capital and an operational perspective for the balance of 2016 and beyond.

With that I’ll now turn it back over to Max to open the line for questions.

Question-and-Answer Session

Operator

[Operator Instructions] We’ll now take our first question from Alex Twerdahl with Sandler O’Neill.

Alex Twerdahl

Hey, good morning guys.

Mark Tryniski

Good morning, Alex.

Scott Kingsley

Good morning, Alex.

Alex Twerdahl

I wanted to ask first about M&A outlook. I’m sure that it was going to be tackled at some point in this call, so I might well ask it first, but that’s been about a year and half, since you guys announced the Oneida deal and I think that’s probably the last deal that we’ve seen really in your market. I mean you think there is anything on the horizon that could come down that could be – could look attractive can say your parameters, as an opportunity for you guys in the next quarter or two?

Mark Tryniski

It’s tough to predict the near-term future, Alex. As you know, I think that if you look historically at our business model, they are not perturb to be disciplined in partnering with high value institution either within our footprint or adjacent our footprint until that strategy will continue. Again difficult to predict what might happen in the near-term, I wouldn’t even venture – I guess that in terms of that prediction other than to say we continue to have dialogue and to seek opportunities to do partner with high value of acquisition partners in a constructive way to create value for combined shareholders. And that’s that is not going to change. I think overall the environment seems to be pretty open, relatively open in terms of announced M&A, including a fairly significant transaction this morning.

So our strategy more continue, we’re disciplined, we’re not rushing to do things, we’re not frantic. We right now, as I said the core momentum below our business line is really good. Trailing 12-month growth of almost 6% on both sides of the balance sheet, our non-banking businesses are doing extremely well. So we aren’t going to push do anything just to grow, but continue to seek out those opportunities. They can help us grow shareholder value.

Alex Twerdahl

Okay. And then just sort of a second part and follow-up to that question. And as you referenced all your business lines are chucking along and you’re creating a lot of excess capital, and certainly a way too much capital as it is, but the limited things to do with it up in your market. So if it’s not M&A is there any other – are there any other opportunities or options you have for deploying excess capital? Whether it would be through special dividend or just increasing the regular dividend or do you think the best use of it is to keep in and save it for potential M&A in the future?

Mark Tryniski

Well, I think your point about capital was good, I’ve made comment a couple of times over the last four to six calls which is that one of the – that the burdens of surplus capital is, by deploying it effectively for the benefit of shareholders, historically we’ve done that through M&A. We haven’t historically done a lot of buybacks. I think it’s profitable to invest in the business in a way that grows earnings and grows the dividends and grows total shareholder return over time, and that’s been our historical preference. I think that if you look at the $10 billion level and where we’re at right now in the surplus capital that we have on the balance sheet, we certainly have the capacity to do something at little bit larger that I’m not trying to push at, only I’m just saying is we have capacity to do that, not just in terms of capital but also relative to the Durbin challenge in $10 billion.

So I think we will also look at non-banking business. We’ve done some that over the last handful of years. Those businesses have grown nicely, both organically. And if you look back at that businesses that we acquired in those are – as you know that’s a national business, we have offices all over the country. Those business continue to grow, the margins continue to grow. We have very strong leadership at those non-banking business lines. We will continue to invest in those. We think that’s a good place to deploy capital.

Beyond initial capital deployment, there is no capital required on the subsequent growth of those businesses, which itself – the return characteristics for shareholders are quite substantial. So we will look to high value bank opportunities. We will look to high value non-bank opportunities. We do have a record like, think its 23 years, consecutively at raising our dividend. That’s probably not a history that’s we would like to see tarnished, but the pressure remains on us is the leadership team to grow earnings so that we can keep that payout ratio within an appropriate and reasonable range.

So, we need – the capital generation, we generate a fair bit more capital than we need to capitalize organic growth. And so it’s our responsibility to deploy that capital in a way that can create growth in sustainable earnings and dividends. For the benefit of our shares we got a record of doing that. I think we can continue to accomplish that, but we are also not in a hurry to deploy it in a way that doesn’t benefit our shareholders.

Alex Twerdahl

Okay. That’s great. And then just one final question just regarding expenses. You talked about investments you made to get your DFAST ready by the middle of 2017. Is – will there be any change in expenses either leading up until middle of 2017 mark or after that middle 2017 mark is based on the investments that you’ve made or will be making?

Mark Tryniski

Yes. I mean right now it has been principally internal that some of it has been external. Systems consulting resources needed at some juncture, this is built into our work plan. We are going to need to add resources that have specific financial and other kind of technology and mathematically related skill set. But I would suggest you that it won’t be anything that even sticks out in terms of our run rate and expenses. They’d get layered in over a period of time, but Scott, you might have further comment on that.

Scott Kingsley

Yes, I mean along with that Alex, I think that’s we expect that it will be in a ramped up basis, but given where we’re today we are really happy with our progress that we have made to-date. And just to Mark’s point, we don’t see an extraordinary and unusually event where there is a huge increase in that that it’d probably starts to blend into our numbers and just becomes something that we do on a recurring basis.

Alex Twerdahl

Great, that’s all my questions for now. Thanks.

Scott Kingsley

Thank you, Alex.

Mark Tryniski

Thanks, Alex.

Operator

We’ll now hear from Joe Fenech with Hovde Group.

Joe Fenech

Hi, guys. Good morning.

Mark Tryniski

Good morning, Joe.

Joe Fenech

On M&A, can you just update us on your thinking as you guys fine-tune your expectations; call it, working into the DFAST preparation process. Has anything kind of emerged through that process that lead you to say, okay, in an ideal world it would be great to if we could pass through $10 billion around this date and get to a specific side, and other world doesn’t necessarily work that way, but just wanted to get a little bit of insight into your thinking as you sort of fine-tune the process.

Scott Kingsley

Well, I think the thinking behind our process is really to be prepared. It’s not – we started down this path of DFAST compliance last year that made good progress. So the thinking behind this strategically was more to be fully prepared when that point came. So it wasn’t as much around having a strategy that speaks specifically to we want to be at certain size at a certain date. We try to be really opportunistic in terms of the quality of the franchises we partner with and the capacity we have jointly to create value for both sets of shareholders, that model worked very good. But this isn’t about getting to a certain size.

I think our inertial momentum is really good right now. We understand that at some juncture we are going to need to face the $10 billion in the Durbin and maybe some higher expectations around this demand that compliance we like. We are going to be fully prepared for that. The timing truly is not an issue. Even if we were to announce the transaction tomorrow that took us over $10 billion and closed in, let’s say, April of the second quarter of 2017.

Our DFAST submission would not actually be due until 2019. So we will be – we’re plenty ahead of the curve in terms of the timing. So the timing of the DFAST doesn’t have really anything to do with any strategy around growth other than we do expect to continue to grow over time in a disciplined and measured way that will create value for our shareholders. And that might be tomorrow and that might be several years from now.

So we need to continue to operate organically to create value and we need to continue to deploy that surplus capital in a fashion that also creates capital. But right now, I think we have tremendous momentum on the operating side, not just momentum, but also opportunity, particularly as it relates to our non-banking businesses. On the other side we also have capital that allows us to be flexible and hopefully opportunistic in terms of future growth potential to the benefit of shareholders.

Joe Fenech

Fair enough. And then Mark as you creep closer to $9 billion though organically here, does it make it less likely that you would be willing to do another deal like Oneida that might put you right at $10 billion? In other words, you may be skip over now the smaller deal as you creep closer to – over $9 billion, and then try to do larger deal first to leapfrog or – that wouldn’t factor too much of your thinking.

Mark Tryniski

Well, it probably wouldn’t. I think of it was a high value opportunity, a high quality franchise that we had confidence in our capacity to create growing returns for the shareholders, earnings growth, sustainable growth and earnings growth cash flow for dividend purpose. So I think we would do it. I mean our responsibility is to create growing returns to the shareholder. So I think despite the fact that it might be something that was a smaller transaction that got us up to the edge of $10 billion, I think we would evaluate that, Joe.

Clearly, it creates a little bit more at that point year at nice, eight or something. It does create a little bit of timing pressure in terms of the next transaction because we are – I know some banks have grown over the $10 billion mark. We are not going to do that because we are not markets that are growing in a rate that allows us to do that in a way it doesn’t compare value for shareholders. So I do think there could alternate be down the road at timing – more timing pressure. But we – our focus is how do we ensure that three years from now, four years from now, five years from now.

We have considerably greater earnings per share, cash flow per share, dividend per share for our shareholders. If that means partnering with an institution, is little bit smaller that gets us up to edges, we’re not going fore grow that opportunity if we think it’s highly additive to that three to five year future time frame.

Joe Fenech

Okay.

Mark Tryniski

But with that said, it would create a bit more pressure on the next transaction.

Joe Fenech

Sorry to beat this to death but just one more. Would that include – would that commentary Mark include an out of market deal where you wouldn’t necessarily get the cost saves to offset Durbin? Or would that commentary be restricted to end market, where you can’t get those cost saves and make that more attractive with the Durbin head?

Mark Tryniski

Yes. I would say that we would be agnostic to that. We’re not going to – we’re not likely to go way out of markets. We’re not going to jump four states to go into a market that we are unfamiliar with, we’re unlikely to do that. I think we’d continue that plenty of high quality opportunities to stay in partner with great franchises, either in market or continuous market opportunities. So we’d be likely to jump, but in the event we went to a market where we didn’t have a presence currently, and maybe you couldn’t get to same degree of cost saves, if it is a high quality franchise with opportunity to grow earnings and dividends for shareholders, we would certainly do it.

Joe Fenech

Okay. Thanks guys.

Mark Tryniski

Thanks, Joe.

Scott Kingsley

Thanks, Joe.

Operator

Our next participant is Collyn Gilbert with KBW.

Collyn Gilbert

Thanks. Good morning guys.

Mark Tryniski

Hi, Collyn.

Collyn Gilbert

Just to follow-up on the comment about the capital accumulation, do you have plans or how do you see yourselves managing that, what you’d say, Scott like the $167 million of unrealized gains in securities book. I mean do you intend to take those? Are you going to restructure the portfolio at all? How do we actually think about that unfolding?

Scott Kingsley

We have not really spent a lot of time about taking the gain. Because in fairness we really don’t have use for the sources, we have so much capital today to naturally fund something without giving up the earnings stream associated with those superior yields today that that we really haven’t spent a lot of time talking about that. I think in terms of managing the unrealized gains and losses, I would argue that unless there is episodic events that lead us to stay restructuring is appropriate. That’s not in our foreseeable future.

Again, if something else showed up where we said hey listen, and we need to fund something, a bit larger than where we think our capital levels are. But again, looking at that and saying what am I going to do to the trend line relative to the earnings continuation, we are really comfortable with the portfolio attributes and the big scheme of things. I think there was a period of time not that long ago where we’re critiqued for being a little bit longer than the average bank. I think we are in a spot now that we are extremely comfortable with. And I think we’ve stayed in that spot, enjoyed a better yield outcome than may be many of our peers. It’s not that we were prognosticators of lower for longer, but quite frankly that certainly has been in our best benefits over the course of last several quarters.

Collyn Gilbert

Okay.

Mark Tryniski

I think other that we have an authorization relative to share buybacks. I think we tried to be obviously efficient with doing that. If you notice our numbers, it’s easy to say we have some share free over the last 12 months. Today certainly as our share price has going up, beside it’s a – of equity instruments from our folks that has a little REITs. Over time we’d like to try to be neutral with that, but I think where you have to balance that with valuation and potential other opportunities for the use of that capital before you rush into our buyback or our special dividend contribution. So that’s kind of where we think about it right now.

Collyn Gilbert

Okay. And given the rate environment where the tenures and everything like that, I mean do you feel like you can kind of hold that security yield in that 3% range?

Mark Tryniski

Indeed it’s challenging, I’d say that. And we refined it as we spend so adept historically at finding opportunities in the municipal space that’s very difficult today. We are not having a lot of success replacing expiring cash flows on the immunity side with new instruments that are close to the yields in the same risk or duration attributes that came off. So that is a challenge for us. If we’ve been largely at buyer or pull out securities on the treasury and the agency side, so that’s not necessarily a near-term focus. Our cash flows for 2016 and for 2017 are in $150 million range of the portfolio. So it’s not like we got to track down $500 million of new assets and security time.

So we feel good about that for today. But probably if there was a margin pressure that we felt going forward, it’s probably more pronounced on the security side today than it is on the lending side.

Collyn Gilbert

Okay. That’s helpful. And then just actually on the lending side, so you indicated obviously the consumer yields are sort of finding an inflection point, but the commercial yields are still coming under pressure. What is the spread differential on what you’re originating on the commercial side versus what is rolling off?

Mark Tryniski

It depends I would say right now on the commercial real estate spreads and cash rates in our markets are still pretty good. It’s not like there are a lot other markets. The C&I stuff is where the – the spreads have come down quite a bit. So it really depends on delicacy, commercial yields of the last few quarters, they’re actually pretty flat – the last couple of quarters. In this quarter, I think held up better than we thought that I think discussed point generally speaking the aggregate yield of the instruments that are going into the portfolio are a little bit lower than what the overall portfolio yield is right now. I think Scott suggest on this call, on the consumer sides, we are about watched out. So both the consumer plus the new origination yield is about the same as what the portfolio yield is.

Collyn Gilbert

Okay. So taking all of this into totality, so it seems – I mean you guys have done a pretty good job keeping the NIM, for having NIM I guess coming to higher certainly what I was think, but just kind of holding that NIM given all the variability. What you think kind of the trajectory is sort of NIM as we look out over the next 6 months to 12 months to 18 months?

Mark Tryniski

Yes. I would think we come back to this discussion, if does, I’ve got asset yield concerns in the 2 to 3 basis points a quarter. That we found in the second quarter. Sometimes there are ways to fight that off. Sometimes the mix change allows for a positive net spread change when it comes to that. I’ll use the second quarter as an example. Growing in the commercial side and in the indirect auto side actually allowed us to probably make up basis points related to our original projections just in terms of the mix change.

I think as we look forward probably the other thing that we’re paying a lot of attention to is where does essentially the large mortgage buyers go relative to the rate structure? Since the big drop is the tenure over the last three weeks, some of which has come back. There really hasn’t been the in-step drop in mortgage rates on a secondary side, whether that just a delay or whether that, say, we just aren’t going through to the next level of mortgage rate changes that could potentially equals outcome.

We have been preparing ourselves for whether it was going to be necessary to do anything on the funding side, and we kind of thought about that in the second half of 2016. We liked our ability to really hold in our funding characteristics longer than the average bank just because of where we are and where our concentration is. We really have conversation today and don’t think that conversation comes out for a while now.

So feel good about the funding side. So again I think we would be comfortable with the difference being yielders some things relative to the Federal Reserve Bank and the Home Loan Bank that influence our quarter-over-quarter changes. [indiscernible] the concerning side for us is do asset yields that have a 2 or 3 basis points step over risk of drop, going forward for the next three to four quarters.

Collyn Gilbert

Okay, that’s helpful. Thank you.

Mark Tryniski

Okay. Thanks, Collyn.

Operator

[Operator Instructions] It appears there are no further questions at this time. Mr. Tryniski I’d turn the conference back to you for any additional or closing remarks.

Mark Tryniski

No further commentary, it was a great quarter. Thank you, Matt, thank you all for joining. We will talk to again next quarter. Thank you.

Operator

That does conclude today’s conference. Thank you for your participation. You may now disconnect.

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