This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk07: Good afternoon and welcome to the Alaris Financial Corporation earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an open opportunity to ask questions. Please note this event is being recorded. This call may include forward-looking statements and the company's actual results may differ materially from those indicated in any forward-looking statements. Important factors that could cause actual results to differ from those indicated in the forward-looking statements are listed in the earnings, releasing, and company's SEC filings. I would now like to turn the conference over to Alaris Financial Corporation President and CEO, Katie Larson. Please go ahead.
spk01: Thank you. Good morning, everyone, and thank you for dialing into our call today. Joining me today in Minneapolis is Karin Taylor, our Chief Risk Officer, and Al Villalon, our CFO. I am proud to announce that during the quarter we added Jim Collins, a seasoned bank leader in the Twin Cities, to our executive team as our Chief Banking and Revenue Officer. Jim will lead and support the continued new client growth and existing client expansion while building on our recent successes in adding talented bankers and advisors in the Twin Cities and throughout our footprint. On July 1st, we closed on the acquisition of Metro Phoenix Bank, the 25th acquisition in the company's history. We are pleased to have Metro Phoenix join the Alers franchise. The Phoenix Scottsdale MSA is one of the fastest growing areas in the country over the past five years. Metro Phoenix Bank, started by Steve Haggard, is a well-established, high-growth, and highly efficient bank with a strong commercial presence. With the approval in closing, Steve has now assumed leadership over the entire market as the Arizona president. Together, our combined organizations are one of the largest community banks and SBA lenders serving the market. This acquisition significantly increases our presence in Phoenix, Scottsdale, and demonstrates our commitment to growth and client expansion in Arizona. Looking back on the quarter, we reported EPS of 53, which included a 5 cent negative impact related to merger expenses. We continue to experience good loan growth as loans grew 17.3% on an annualized basis ex-PPP. Growth was across products, but highlighted by additions to our commercial client base, a proven catalyst for growing our retirement business. Year-to-date new plan sales in the retirement division are nearly 50% higher than last year, while lost plans have remained at stable levels. Our wealth management division produced at record levels of new revenue, which drove a linked quarter increase in revenue, despite the quarter being the worst mid-year market results in over 50 years. We experienced outflows in deposits, which were largely linked to seasonal declines in core operating accounts of public entities. And excluding PPP, our underlying core NIM expanded nine basis points to 296. Our mortgage originations on a year-over-year basis declined at a level greater than originally anticipated, as 30-year mortgage rates quickly rose from 3% to 6%. While we are coming off peak originations of $1.8 billion in 2021, we never overbuilt on an infrastructure, and we channeled our one hilarious culture and shared resources across business units to get that level of business done. While the mortgage industry is rapidly changing, our focus has always been on the purchase market due to our long-standing relationships with realtors and builders, especially in the Twin Cities. As our competitors reposition and downsize, this will present opportunities for our top-tier producers to pick up more market share in the purchase market. Despite the headwinds in mortgage, we continue to execute on our one-on-one strategy as we continue to grow the number of plans and participants in retirement and wealth management. We continue to deepen our relationships within our large client base on our platform. Today, we remain uniquely positioned in the banking sector as we continue to generate over 50% of our revenues from fee income, the majority of which is recurring, annuitized revenue with minimal capital allocation and no credit risk. Our loan portfolio remains well diversified and credit is very strong as we continue to experience minimal past dues, low levels of classified loans, and negligible charge-offs. In addition, as a non-CECL bank, we stand with a healthy allowance for loan losses at 1.66% of total loans. Expense management remains a key focus with core expenses flat to the previous quarter and down nearly 6.5% compared to the second quarter of 2021. I want to thank all of our employees for their hard work and dedication and welcome the Metro Phoenix Bank employees to our company. Our momentum in attracting and retaining talent as well as client growth opportunities across our diverse product offering supported by strong common tier one capital levels of 14.19% has Alaris well positioned to continue to grow expand and deliver strong returns to our shareholders. With that, I will hand it off to Al to discuss the financial details of the quarter. Take it away, Al.
spk02: Thanks, Katie. I will start my commentary on page 14 of our investor deck that is posted in the investor relations part of our website. For the second quarter of 2022, reported average loans increased 4.0% on a link quarter basis. Excluding the impact of PPP, average core loans increased 4.6% on a one-quarter basis. The increase in core average loans was driven by a 9.2% growth in CNI and a 5.4% growth consumer. Within CNI, we saw a pickup in loan production along with an uptick in utilization rates as clients continued to tap into their existing lines. CNI utilization increased from 28% to 32% during the quarter. At the end of the first quarter, we had approximately 6.9 million of PPP loans outstanding. Average deposits declined 2.7% on a one-quarter basis due to seasonal decline in interest-bearing deposits. The decrease in interest-bearing deposits was due to seasonal decrease in our public unit funds. We typically see a drawdown in these public funds in the summer, with an increase happening during the fall usually. Turning to page 15, credit continues to remain very strong. We had net charge-offs of seven basis points in the first quarter compared to three basis points of net recoveries in the prior quarter. Our non-performing assets percentage was 16 basis points compared to 15 basis points in the prior quarter, while our allowance is 1.66% of period end loans. On page 16 are some key revenue metrics. On a reported basis, net interest income decreased 5.1% on a link quarter basis, excluding the impacted PPP and net interest income increased 6.9% due to higher loan growth and higher net interest margin. Net interest income declined 0.8% on a linked quarter basis due to lower retirement revenues offset by improved mortgage and wealth management. I will go into detail about those segments in later slides. Turning to page 17, Net interest margin was 2.98% in the first quarter, an increase of 15 basis points from the prior quarter. Excluding the impact of PPP, our core net interest margin was 2.96%, an increase of 19 basis points from the prior quarter. Core net interest margin benefited from higher investment portfolio yields along with higher loan yields from our commercial real estate portfolio, offset by lower yields from our C&I portfolio. Turning to page 18, $706 million, or 37% of our loans, are floating, as you can see at the top of the slide. As you see, almost all our variable loans are above their stated floors or have no floors. On the bottom left, you can see a waterfall of net interest income and net interest margin. Better volumes and rate, as previously mentioned, positively impacted our results. On page 19, our core funding mix remains very strong. we saw a small increase in our deposit costs due to rising interest rates. Given the recent rise in interest rates, we do anticipate our deposit costs to rise now. We are currently anticipating our deposit beta to be between 25 to 30% in the quarter, which is still lower than we previously anticipated. On page 20, I'll provide some highlights on our retirement business. AOM declined 10.1% due to mainly to market volatility, with S&P being down over 16% in the quarter, and that aggregate bond index down 5%. While AEDOM declined, we did see the number of participants increase to approximately 450,000 versus 445,000 in the prior quarter. Revenues declined 7.7% in the prior quarter, mainly due to lower asset levels. Turning to page 21, you can see highlights for our wealth management business. Similar to what we saw in retirement, AUM declined 9.5%, mainly due to the market volatility again. Despite the decline in AUM, revenues increased 4.1% from prior quarter, mainly to a custody deal that was won at the end of the prior quarter. Strong new production by advisory business and higher transactional revenues. Turning to page 22, I'll talk about a mortgage business. Mortgage originations increased approximately 45% for prior quarter as we rebounded from record low housing inventories in our main markets. Despite the challenging market, our current bonds are over 22% higher than the similar time period in 2019. Lastly, turning to page 23 is an overview of our non-interest expense. During the quarter, non-interest expense increased 5.0% mainly due to higher incentive compensation related to revenue-related activities, mainly in improvement and mortgage. We also saw an increase in professional fees due to higher M&A expenses in the quarter. Other expenses decreased as a result of lower provision for unfunded commitments as we saw pickup and commercial utilization. And market expenses increased quarterly due to a typical seasonal pickup. Now I'll provide some forward-looking guidance. First, I'll comment on the Metro Phoenix Bank, which we closed on the acquisition on July 1st. As of June 30th, Metro had the following balances. They had $84 million of cash, $38.5 million of investments, and $277.6 million of loans. We are assuming $354.5 million of deposits. We issued 2.68 million shares of total stock for consideration of $63.8 million for the purchase of Metro. After the purchase of Metro, we do not anticipate a material impact on our tangible common equity or capital ratios as a result of the transaction. Now I'll provide guidance for the third quarter. On a standalone basis, we are expecting average loan growth to be in the high single digits on a linked quarter basis. For Metro, we're expecting double-digit loan growth on a linked quarter basis in that loan book. Overall, we expect some interest margin expansion, but expansion will be limited as we anticipate rising deposit costs given rising interest rates. Again, we are currently expecting our deposit beta to be between 25 to 30 percent. With Metro, we expect net interest income to grow in excess of 20 percent from the prior quarter. We expect overall fee income to be down low single digits, mainly driven by continued decline, as we expect overall originations to be under pressure due to seasonality. Given no market growth, we expect wealth to be up similar as the second quarter and retirement to be flash. On a standalone basis, we're expecting expenses to be up mid-single digits, mainly due to merger-related costs. Excluding those merger-related costs, we expect core expenses to be flattish. With Metro, we expect Metro to increase our core expense base by mid-single digits. And lastly, we expect credit to remain strong and continue to expect net charge-offs to be below historic levels. With that, I'll now open it up to Q&A.
spk07: Absolutely. We will now begin the question and answer session. To ask a question, you may press star followed by 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from the line of Ben Gallagher with Howdy group you may foresee.
spk00: Hey, Ben.
spk03: You know, the opposite of this, I think there's been a lot of rumor and a little bit of speculation, and hopefully we can put anything to bed here. And I hate to start the Q&A off on this somewhat somber tone, but Al, after you threw out the first pitch, did you cheer for the Twins or for the Yankees?
spk02: I cheer for baseball in general, Ben. I appreciate the question there. My roots are from New York, but I've been in the Twin Cities for a long time. I support baseball in general. So whoever won that game, I'll support them both.
spk03: Yeah, of course you cheered for whoever won. That would be the Yankees. But anyway, so when you guys think about the market as it is today, obviously there's different segments within baseball. the company and they're pulled at different market forces. So the core bank should have higher rates, um, coming forward. So used to have a stronger revenue. And with that, it gives you an opportunity to reinvest within the broader business overall. When you think about priorities and internal investment, where, where, where would you put that next incremental dollar? Is there any one segment that technology investment priority or anything to that degree that would, allow O'Lears to be better set up for the next decade.
spk04: Great question. I think Katie should take that one for sure.
spk01: I'll take that one. Thank you. And good question. And I referenced in my opening comments the commercial banking being the catalyst for many components of our company. And so as As we focus and laser in on where we bring the most value to clients, we are very much bringing, obviously, Jim Collins on board, who is a proven leader and grower in commercial banking. That is where we're focusing on growing our franchise because it does give us the opportunity to expand on the fee income at a very high level of success.
spk03: Gotcha. Okay. So it's a bit of a... a lead into a broader relationship if I'm kind of squaring that circle a bit here. So, and then my followup really kind of stems to the next kind of bigger picture question going forward. Is there any opportunity that you could, you can trim out more expenses with throughout the franchise overall, assuming that kind of mortgage, doesn't move or is it is it really dependent upon kind of I mean if rates don't change much mortgage shouldn't change much i.e compensation doesn't change much is there anything from a structural perspective from an expense within that that could improve overall profitability uh yeah I can take that one
spk02: Oh, go ahead.
spk01: Sure. Go ahead.
spk02: Yeah. Yeah. So, you know, Jim has been on board here now for about 60 days and he and I've been syncing up on various things. And I've been here for about a little over six months, you know, as we kind of look at the structure, you know, we do see that there's opportunity to kind of right side some expenses, but also too, we're dealing with an inflationary environment right now is that, you know, we are dealing with some of those inflationary pressures that are, you know, everybody else is dealing with too. So, you know, we're, you know, For us right now, trying to keep expense flattish in this high inflation environment is, you know, is our goal right now. But as we look for the long term, though, you know, I think KB is going to comment here as well, you know, and probably build on this, is that, you know, we're trying to build a structure, too, that's going to allow the community to grow for the long term because there's so much opportunity for us, you know, as we're, as I'm kind of keep working every day and kind of understanding the potential of this Alera story, you know, Jim and I and everybody here see that there's so much runway for us to grow and some of that growth is a required investment as well. And that's what we're kind of trying to work on right now is that what is the investment and growth that we're going to make, an investment we're going to make to help support that growth for not just the short term but for the very long term.
spk01: Katie, you want to add anything to that? Yes, thank you. We've spent, a key focus for us the past three to five years has been on a couple of things. It's been on developing the credit infrastructure as well as bringing on technologies that allow us to be more efficient to grow. And so our opportunity to scale without adding overhead is impressive. And under Jim's leadership and our ability, as you can see by our past recent successes in bringing on talent, we think is the is the real catalyst to support that growth going forward at a higher level than what we've had with the right credit and operating infrastructure behind it.
spk03: Gotcha. That's helpful. If I can just sneak one more in. I know that kind of the core bank is a bit of the gateway to a full encompassing relationship. I don't think that you guys are on the hunt for necessarily a full bank acquisition today, but if you were to think about any incremental lender or any type of lending, it would be a banker or a team of banks or a team of bankers. Is there any geography or any lending class that kind of is top list? I know it looks like much of anything for high caliber talent, but if you could kind of write the script on who the next incremental banking hire would be, what would be that characteristic?
spk01: Sure, absolutely. So C&I bankers, mid-market, strong treasury management, and we think we've got great opportunities here to do so in the Twin Cities. In regards to full bank acquisitions, we continue to look and we keep that funnel pretty wide at the top as we look at businesses that could add scale or just bring a client base that gives us that opportunity to expand relationships. But certainly talent acquisitions, which we've done a number of, continue to be our highest, one of our highest priorities.
spk03: Gotcha. I appreciate all the answers. I'll step back in the queue.
spk07: Thanks, guys. Thanks, guys. Thank you. The next question comes from the line of Jeff Rollins with D.A. Davidson. You may proceed.
spk04: Thanks. Good morning. Question on the... closet flows um yeah i think the pandemic clearly disrupted kind of seasonality and and as you guys spoke to i think you mentioned that i just want to check in on the confidence that you know you do see those public inflows maybe you've seen some quarter to date but um want to get a sense for the other part of that is there's seasonality but there's also some changing deposit behavior and deposit retention. We're seeing some outflows for the industry. So just kind of your take on competence and seasonality as well as are you seeing some kind of rate-chasing activity as well? Thanks.
spk02: Thanks for the question, Jeff. We actually just did a study on the seasonality approach, and it has been over the last several years. pretty much tried and true that those public funds, you know, go from us in the summer. And that's why I felt comfortable talking about that on the call today because, you know, and we're starting to see again this light pickup again in the deposits, you know, from the public funds because it's just that, you know, the 2Q, you know, a lot of those public funds are being used to pay for, you know, teachers, you know, they're being paid out there in the summer and then they start building back in, you know, coming in the fall. So we feel pretty, we feel comfortable about that. But you're right though, there is some seasonality that we're watching very closely, and especially with the Fed hike that just happened, we're just going to be watching behavior very closely. So that is definitely on our radar.
spk04: Outside of that public fund movement, are you seeing some of the other regular way customers kind of chasing rates, or is there any piece of the deposit mix that you've seen that change quarter over quarter?
spk02: No, Jeff, we actually haven't. I mean, the thing that's been really impressive here is how sticky our customer base is right now. You know, we've been able to, you know, lag our deposit costs right now, and it's been – there hasn't been a lot of movement out there, and that's why our – you know, when I said that we're expecting our deposit pay to pick up, it's still below what we – I would have anticipated to be in a rising rate environment like this. So it's been a pleasant surprise for us to see how, you know – for me, I should say, because I've only been here for six months – a house to get a customer basis.
spk04: Got it. I want to circle back on the, on the expenses. I know that you tackled kind of some structural big picture efficiency type questions, but the, could you remind us of the timing now of what, where you think Metro Phoenix, the conversion of that occurs and what maybe could be carved out on the, you know, targeted cost saves with that and, and timing.
spk02: Yeah, so we're targeting conversion in later part of third quarter this year. I'm sorry, third quarter this, so sometime late this third quarter, we're going to look at a conversion. You know, we are still anticipating the cost that we've originally disclosed, but, you know, it's going to be, there might be just a little bit, you know, plus or minus in that range, I'd say just a little bit.
spk04: Okay. And then lastly, just maybe housekeeping related to the deal. Any um kind of adjustment on on goodwill or tangible book dilution uh giving sort of rate movement we've had i don't know if the marks change but um basically at announcement are those any update on goodwill or tangible book impact yeah actually we just got those in on not just like just recently and i'd say that there's really no change to that you know and that's why i put that up
spk02: highlighted in the guidance that we still don't anticipate, you know, a material impact to our tangible common equity or capital ratios. So, you know, we just got those marks in.
spk04: Okay. I'll step back. Thank you. Yeah. Thank you, Jeff.
spk07: Thank you. The next question comes from the line of Nathan Race with Pikes Founders. You may proceed.
spk05: Yeah. Hi. Good morning, everyone. Hey, Nathan. I appreciate the guidance for, you know, retirement and benefit services revenue in 2Q, but kind of thinking longer term, we'd love to get kind of an update just in terms of just with the national attrition within, you know, RB&S, AUA, how you guys are kind of thinking about, you know, the opportunity to add clients organically with your sales efforts and also just given how you guys have kind of increased the capture rate as plan participants enter retirement, you guys onboard those assets into wealth management and kind of how that translates to, you know, future growth, you know, after 3Q, assuming, you know, equity markets kind of stabilize from here.
spk02: Katie, you want me to take that one or you want to take that one?
spk01: So I'll start and then you can fill in, Al. Good morning, Nate. Thank you for the question. In regards to retirement, as I mentioned in my opening comments, we are seeing a higher level of new plan sales than we have in previous years, as well as reduced levels of attrition. And so many of those plans are not asset-based, the new plans. Many of them are on a per-plan, per-participant base. And so we've got a couple of tailwinds, I believe. Certainly the market on the asset-based fees, as well as on the new plan basis. And as those plans grow, our fee income naturally increases as participation in the plan increases. So that's one catalyst of the growth. Commercial client expansion, so as we grow our commercial banking client base, our typical success rate with commercial clients is about 50%, and also getting the retirement plan over time. It doesn't always come day one, but certainly as the relationship develops, we absolutely get a chance to talk to that client about the services that we can offer, and half the time we end up getting that plan to transition to us. And again, the retirement business is a significant feeder system to our wealth management business, and more than it has ever been in the past. We've always been good at capturing rollovers on a reactive basis. And over the course of the past year or two, we've been much more focused on being proactive with that participant base, engaging with those individuals that are potentially nearing retirement, or are just in a place where financial planning is something that they're thinking about and something that they're in need of. And so that opportunity within that division is significant for building out the rest of our fee income opportunities in the future.
spk02: Yes, I think Katie gave a great overview there. The only thing I just wanted to add to that is that, you know, our Our leader in the retirement business, Rob Latosik, he's really, you know, stepped in and really done a great job in that commercial client expansion story there. And, you know, he's identified opportunities for us to really kind of get that overlap and kind of synergies in terms of deeper penetration with our clients. So, you know, we've already seen some initial success in that commercial expansion strategy. And, you know, he's targeted some opportunities for us, and we're going to continue executing on that, you know, for a foreseeable future.
spk05: Got it. And just going back to what Katie said initially in terms of kind of the makeshift change in clients being added, I imagine that also reduces kind of the market sensitivity of this revenue source going forward, if I'm kind of hearing you guys correctly.
spk01: Right, it does. Most of the new business is not is not all tied to asset-based. Some components of it, trust and custody, of course, would be, advisory services would be, but the administrative and record keeping tend to be more tied to just a per-plan fees and per-participant fees.
spk05: Okay, great. And then if I could just kind of switch gears and kind of think about overall balance sheet dynamics. Um, you know, with Metro Phoenix adding, you know, roughly 450 million or so in earning assets. Here in the 3rd quarter, how you guys kind of thinking about overall deposit flows from here? It sounds like you guys are going to compete on deposit pricing. Going forward, but is it kind of fair to expect kind of the earning asset base kind of stabilizes around 3 and a half. Billion from here, or how you guys kind of thinking and that would. you know, in turn kind of support margin expansion, just given kind of the assets and the nature of your balance sheet? Or how do you guys kind of just think about the overall balance sheet flow and just level going forward?
spk02: Yeah, thanks for that, Nate. This is, you know, as we think about the balance sheet right now, I mean, we, you know, I highlighted in there, I mean, we are seeing really strong loan growth. And, you know, on our just on a lower standalone basis, you know, we're thinking high single digits there on a link quarter basis, but Metro, you know, talking to that Steve Hager down there, you know, we are really excited about the opportunity, you know, and we're expecting that book to grow in the double digit range as well. You know, our preference is long growth right now, you know, with a 14.19% tier one capital, common tier one capital, You know, we have a lot of dry powder to support loan growth, and, you know, we'd like to keep supporting that loan growth. So right now, from an investment portfolio side, though, you know, we're kind of letting some of that stuff mature and, you know, to help continue to support the loan growth and remixing the balance sheet just a little bit. But, you know, with that loan growth we're putting on to, you know, we're going to have, you know, we're expecting deposits to come and help support that as well from a funding standpoint.
spk05: Okay. Yeah, and so just given the ongoing earning asset mix optimization with, you know, loan growth, you know, remaining strong here in the third quarter. And just given kind of the assets and the nature of the balance, is it kind of fair to expect a margin to get kind of north of 320 and perhaps even north of 350 in both the third quarter and fourth quarter, respectively, this year?
spk02: Yeah, so, you know, on that, we, you know, NIM is always kind of an output function for us. But, you know, we are expecting growth in that right now. The question right now is, as we are, you know, we're pretty much having pretty frequent discussions on, on deposit pricing because we want to monitor it given that the rapid raise in rates, you know, it's hard for us to really say where it's going to pinpoint. But, you know, the one thing I could do say is that with Metro coming on board though, you know, there's going to be an uplift to our NIM especially because, you know, their margins are definitely higher than us, you know, probably in the tune of, I want to say, 40 to 50 basis points. You know, if you look at their year-to-date performance for us and stripping up PPP for both companies, You know, so they definitely have a lot higher margin for us, and that's going to help our margin as well. But, again, one thing, you know, what I'm tempering is just a little bit now that, you know, given what Jeff had asked about previously questions, that, you know, we have a lot of rise in rates. You know, we're just watching the deposit dynamic right now.
spk05: Gotcha. Makes sense. And if I could just ask one more. You know, credit's always been kind of a non-issue for you guys historically, and that remained the case in the same quarter. by and large. So just kind of thinking about the SBA team that you guys added in the Twin Cities fairly recently, and then I believe you guys are picking up an SBA team in Phoenix as well. And I guess generally that asset class is looked at as kind of higher risk reward. So I guess I'm just curious if, just given all the rate pressures that's impacting small businesses these days, If, you know, your plans to continue portfolio production is still intact and kind of how you guys shift, if at all, kind of your underwriting approach to SBA relative to kind of conventional commercial loans.
spk02: Carl, do you want to take that one?
spk06: Sure, Nate. You know, I think in this environment, we're certainly looking to... continue to grow SBA from a relationship perspective, but we'll also look at the potential to sell some of those on the secondary market. I think we're open to both approaches. You know, I don't see us changing our underwriting standards. I think we've got strong standards in place and certainly with a guarantee that affords us a level of protection.
spk05: Mm-hmm. Okay, great. And sorry, perhaps one more for Katie. You touched on whole bank acquisition opportunities, but curious to maybe get an update in terms of what you're seeing in the retirement and benefits services space for additional deals there.
spk01: Yeah, we continue to increase our sources. in regards to partnering with advisors across the country who are in the business of finding these businesses and positioning them to sell within one, two, three, four years. And so that's helped us grow our pipeline and get into a higher levels and volume of conversations. And so we're very pleased with that activity. There continues to be competition in the space which I think just speaks to the value of the business of retirement and the the annuitized fees and the lack of capital that has to be allocated to those fees and so we like where we're at from a conversation from a pipeline standpoint and we like even more what we've got because clearly there's tremendous value within that business unit.
spk05: Okay, great. I appreciate you guys taking all the questions. Thank you. Thanks, Nate.
spk07: Thank you. Again, if you have a question, please press star then one. This concludes our question and answer session. I would like to turn the conference back over to Katie Larson for closing remarks.
spk01: Perfect. Thank you. And thank you everyone for joining our call this morning. We thank you for listening. We thank you for the great questions. I'll close with just a few comments regarding clearly our industry is facing some headwinds. Our company has historically outperformed and we remain well positioned for future success because of our diversified business model and the momentum we're seeing in building our pipelines for new business, our client expansion across all products and the high level of engagement we have within our team and our leaders is It's very special. So we are very proud to be where we are. We remain focused on working together to grow our company. And this steady and strong foundation that we have is allowing us, again, to differentiate ourselves as we go out to the market and invest and recruit and retain top talent, as well as serve in the best interest of our clients and deliver long-term value for our shareholders. So we thank our shareholders for their investment. We thank our team members for bringing value to our clients each and every day. And we thank all of you for your continued support and interest in our company. Have a great day, everyone.
spk07: The conference call has now concluded. Thank you for attending today's presentation. You may now disconnect.
Disclaimer