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spk00: Today's conference is scheduled to begin shortly. Please continue to stand by. Thank you for your patience. Thank you. Good day, everyone. Welcome to the NBT Bancorp first quarter 2022 financial results conference call. This call is being recorded and has been made accessible to the public in accordance with the SEC's regulation FD. Corresponding presentation slides can be found on the company's website at nbtbancorp.com. Before the call begins, NBT's management would like to remind listeners that, as noted on slide two, today's presentation may contain forward-looking statements as defined by the Securities and Exchange Commission. Actual results may differ from those projected. In addition, certain non-GAAP measures will be discussed. Reconciliations for these numbers are contained within the appendix of today's presentation. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Instructions will follow at that time. Anyone requiring operator assistance can press the star key and then zero on your touchtone telephone. As a reminder, this call is being recorded. I would now like to turn the conference over to NBT Bancorp President and CEO, John H. Watt, Jr., for his opening remarks. Mr. Watt, please begin.
spk02: Good morning and thank you. Thank you all for participating in our earnings call covering NBT Bancorp's first quarter 2022 results. Joining me today are our Chief Financial Officer, Scott Kingsley, and our Chief Accounting Officer, Annette Burns. We are extremely pleased with our results for the first quarter of 2022, including earnings per share of 90 cents, return on average assets of 132, and return on average tangible common equity of 16.9 percent. Loan growth was strong. and in excess of what we typically experience in our markets at the start of the year. Our commercial business generated $250 million in loan originations. We also experienced an uptick in line of credit usage. It's clear to us that our customers are successfully navigating the challenging operating environment, and we are there to help them. Loan pipelines across our platform were strong and active in the first quarter. Going into the second quarter, commercial pipelines are particularly robust. The first quarter performance of our Sungage Solar FinTech Partnership and the rebound of Indirect Auto are also notable. Generally, CNI, CRE, and consumer loans, including mortgage, all grew. Our fee-based businesses continued their strong performance with total non-interest income at nearly 35% of total revenue for the first quarter. NBT is getting it done because we have a talented and dedicated team across our seven-state footprint from the Poconos to the White Mountains and beyond, and their work makes our success possible. Their focus on our customers is our competitive advantage, and that was validated by two powerful independent third-party acknowledgments this month. In the J.D. Power 2022 U.S. Retail Banking Satisfaction Study, NBT Bank ranked number two in the New York tri-state region. This is a very significant confirmation of our strategies around customer engagement and satisfaction. NBT Bank was also named one of Forbes' World's Best Banks for 2022. Of the U.S. banks recognized by Forbes, we are the highest-ranked bank based in New York State and the highest-ranked bank operating in Connecticut and Vermont. Finally, this quarter, we welcome the new executive to the leadership team. Randy Sparks joined us on the executive management team as our general counsel. So with that said, Scott, I'll turn the call over to you, and we can talk in greater detail about our financial performance in the first queue. And following Scott's remarks, we look forward to taking your questions. Thank you, John, and good morning.
spk05: Turning to slide four of our earnings presentation, our first quarter earnings per share were $0.90, which was consistent with the first quarter of 2021, excluding securities gains and losses, and $0.04 a share higher than the fourth quarter of last year. These results were achieved despite a $4.2 million or $0.08 a share decline in PPP income recognition compared to the first quarter of last year, and a $5.6 million decline in PPP income from the fourth quarter of 2021, or 10 cents a share. The increase in net interest income over the two comparative quarters of last year was a result of solid organic loan growth and productive incremental deployment of a portion of our excess liquidity into investment securities. Despite this improvement in earning asset mix, the company still carried a significant level of overnight funds at the Federal Reserve at quarter end, leaving us with still more improvement opportunities. We recorded a loan loss provision expense of $600,000 in the first quarter compared to a provision benefit of $2.8 million in the first quarter of 2021 and a provision expense of $3.1 million in the fourth quarter of last year. Net charge-offs in the first quarter were $2.6 million, or 14 basis points of loans, compared to 13 basis points of loans in the first quarter of 2021 and 22 basis points of loans in the linked fourth quarter. Our reserve coverage decreased to 1.18% of loans from 1.24% at the end of 2021. Slide 5 shows trends in outstanding loans. On a core basis, excluding PPP, loans were up $202 million for the quarter and included strength in both our consumer and commercial portfolios. Our total PPP balances as of first quarter end 2022 were just over $50 million. With forgiveness almost complete for both the 2020 and 2021 vintage loans, we recognize $2 million of interest and fees associated with PPP lending during the quarter and have approximately $1.6 million in unamortized fees remaining. We would expect most of these remaining fees to be recognized in the next two quarters. Excluding PPP recognition, loan yields were down just one basis point from the fourth quarter of 2021, meaning new volume rates and blended portfolio yields were essentially the same by first quarter end. Moving now to slide six, deposits were up $227 million for the quarter and included growth in municipal deposits as seasonally expected. Customer balances continue to remain elevated from liquidity associated with various government support programs, as well as higher consumer savings levels. Our quarterly cost of deposits declined to seven basis points, and we continue to add new accounts. On slide seven, you'll see the detailed changes in our net interest income and margin. Net interest income increased $1.2 million as compared to the first quarter of last year, but was up $5.4 million, excluding PPP recognition, reflective of year-over-year loan growth and additional investment securities purchases. Reported first quarter net interest margin was 2.95% and 3.17%, excluding PPP income recognition and the impact of excess liquidity. Looking forward, with interest rates rising across the yield curve, earning assets are expected to begin to reprice at levels above our blended portfolio yields in the second quarter, and as such, we would expect to see some opportunities for core margin improvements. In addition, our balance sheet continues to exhibit a meaningful level of asset sensitivity. Slide 8 shows trends in non-interest income. Excluding securities gains and losses, our fee income was up 4% on a late quarter basis to $42.8 million. More broadly, non-spread revenue was 35% of our total revenue in the first quarter of 2022 and remains a key strength and value driver for NDTs. Our wealth management, insurance, and retirement plan administration businesses experienced strong year-over-year growth from new business wins, market appreciation, and certain seasonal activity-based revenues. Banking fees improved almost 17% from the pandemic-impacted first quarter of 2021, principally from higher card-related services. During the quarter, the company made some adjustments to certain customer non-sufficient funds processing practices and expects, once fully implemented, that these changes will reduce service charge fee income by approximately a cent per share per quarter. Also, as a reminder, the bank will be subject to the provisions of the Durbin Amendment to the Dodd-Frank Act beginning in the third quarter of this year, which caps our per-transaction compensatory opportunity for debit interchange. We estimate this will reduce quarterly debit card interchange income by approximately $3.7 million, or almost 7 cents a share. Turning to non-interest expense on slide 9, our total operating expenses were $72.1 million for the quarter, which was $4.3 million, or 6.3% above the first quarter of 2021. Salaries and employee benefit costs of $45.5 million were up 9% over the prior year and included merit-related salary increases as well as higher performance-based incentive compensation accruals compared to a much more muted first quarter of last year. Total operating expenses were lower than the linked fourth quarter of 2021, reflective of two less payroll days, as well as certain seasonably higher costs incurred in the fourth quarter, consistent with historical trends. We'd expect core operating expenses to drift upward over the next several quarters, including the full quarter impact of 2022 merit-related wage increases, which were awarded in March, as well as our continued efforts to fill a higher than historical level of open positions in support of our customer engagement and growth objectives. In addition to investing in our people, we expect to continue to invest in technology-related applications and tools in order to advance our customer-facing and processing infrastructure. On slides 10 and 11, we provide an overview of key asset quality metrics and a walk forward of our loan loss reserve changes. As I previously mentioned, NED charged us for 14 basis points of loans in the first quarter of 2022, basis points in the prior quarter. Both NPLs and NPAs declined again this quarter. We are continuing to benefit from our conservative underwriting and certainly observed credit metrics have been much better than would have been suggested by the CECL models 12 to 24 months ago. We continue to start each quarter with the underlying assumption that the combination of loan growth and net charge-offs will be a proxy for the provision for loan losses before the consideration of any changes in macroeconomic conditions and forecasts, which have continued to exhibit improvements since late 2020. As I wrap up my prepared remarks, some closing thoughts. We started 2022 on strong footing, and we are pleased with the fundamental results achieved in the first quarter. Stable to improving net interest income, solid results from our recurring fee income lines, sustained expense discipline, and exceptional credit quality outcomes have been clear highlights. Our capital accumulation results over the past several quarters continue to put us in an enviable position as we consider growth opportunities for the balance of 2022 and beyond. With that, we're happy to answer any questions you may have at this time.
spk00: Thank you. Anyone with a question at this time can press star, then one on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. One moment for questions. And our first question comes from Alex Twirtle of Piper Sandler. Your line is open.
spk01: Hey, good morning, guys.
spk02: Good morning.
spk01: Good morning. Hey, first off... Following your commentary on the NSFE changes you made during the quarter, can you just talk to us a little bit about exactly what you did and why you did it?
spk05: So, Alex, we have spent a lot of time over the last several years adjusting our programs to be more indicative of what What we did this quarter was kind of looked at the way we look at what we would call unavailable funds fees, meaning we can actually see that the customer either has an historical pattern or a live deposit that's likely to hit their account over the next couple, two or three days. And so our actions were basically to modify our processing. they overdraft.
spk01: That's great color. Thanks, Scott. And then following up in your commentary, John, about the commercial pipelines being particularly robust going into the second quarter, can you just talk maybe a little bit about kind of the geographies that you're seeing strengthen and sort of the types of customers and, you know, whether or not you think that there's kind of some sustainability as the year progresses, especially as rates start to move higher?
spk02: Sure, happy to do that. And, you know, we sat with the leaders in each one of the seven states in our platform last week and went through the pipelines. And in every one of those markets, we see a nice mix of CNI, small business, CRE that was previously heavily focused on multifamily, a little less of that now because I think the developer clients we do business with see uncertainty in the supply chains and in labor costs and other issues associated with construction of multifamily. So we've seen that tempered a little bit. But otherwise, we see very basic manufacturing clients who are building a new line in their factory, improving the technology they use to create efficiency and not in the plant floor, and That's across the platform. No specific region leads the other. So how does that play out in an uprate environment? I still think there's headroom here. We're still operating in, historically, as you look back over 30 years, we're still operating in a relatively low rate environment. So these pipelines tell us that our customers have figured out how to in many cases, manage really difficult operational environment and do what they need to do to make their businesses more successful. And we're there to help them from Maine to Connecticut, across northern New England, and in our core region in upstate New York and northeastern Pennsylvania.
spk01: That's great. Thanks. And then just a final question for me. One of your competitors earlier this week talked about a little bit of a slowdown in some of the conversations regarding M&A. I'm just curious kind of how your appetite changes with M&A, you know, given the sort of changing environment and if you agree with that commentary that sort of the pace of conversations in the upstate New York market has slowed a bit.
spk02: Well, I won't comment on the strategy of our competitor, although I did read that comment. What I will say is that the conversations that we noted in our last earnings call continue, and across the platform there are potential opportunities that strategically fit in our growth plans that – you know, if the timing is right and the conditions are right and the valuation is right, you know, we would engage. You know, I spend a lot of time having conversations with various partners and that continues. So the short answer is we're not experiencing what was noted in the transcript of our competitors.
spk01: Great. Thank you for taking my questions. Thanks, Alex.
spk00: And our next question comes from Matthew Bree of Stevens Incorporated. Your line is open.
spk04: Good morning. Good morning, Matt. I was curious, Scott, you had mentioned on the NIM expectations for expansion there, just given a historically very strong deposit beta and loan yields coming on the books at higher rates plus remix. Could you comment on to what extent we might see margin expansion through the end of the year, particularly if we get 200 basis points of Fed hikes here?
spk05: So, good question, Matt. So, you know, we probably haven't done a whole lot of prognostication thinking 200 inures to us during the current time. Spending a whole lot of time talking about whether 50 and 50 in May and June is a real rational outcome. So, kind of as a reminder, we've got a couple billion dollars, a little over two, of variable rate instruments on the commercial side. that will get that benefit lockstep. Now, the reset date might not exactly be the same date. The Fed changes the underlying Fed funds rate, and that flows through to But the other piece that's critical is that we do have, you know, on a full year basis, you know, roughly, you know, $2 to $2.25 billion worth of cash flows, you know, off our earning asset base that presumptively we would get an opportunity to find assets with slightly higher yields. margin improvement is we've got actually priced at those new numbers. And you remember there's a lot of people with a lot of advanced liquidity out there today. So some of that is slow to be coming to fruition even since the Fed change in March. And secondarily, that's a faster move up relative to what your depositors might be thinking. that may say, hey, I think I should enjoy a better yield on my depository base today. In fairness, they might not even get it from us, but there might be alternative instruments off our balance sheet that once rates are up even 100 that potentially avail themselves for some of those folks. So I'm with you 100%. I think we'll enjoy a margin expansion, and I think it will be as early as mid to second quarter. But I think it will be pretty methodical even with 250s on the way up. But, again, we'll remain a cheerleader for the higher rates, assuming that those higher rates don't somehow pinch our overall customer base relative to servicing. Do we think that's an issue in the first 100? We probably don't. No.
spk04: Got it. Okay. And then switching to loan growth, you know, I thought it was really interesting just how diverse loan growth was this quarter. I mean, it came from specialty lending, dealer, all the commercial categories. You had mentioned a strong pipeline. How sustainable is this level of loan growth? It strikes me that it's probably a little bit unusual, but can we see kind of mid to high single-digit growth out of the bank this year? Is that what this quarter tells us?
spk02: That might be a little aggressive, Matt. I think we need another quarter to have more visibility there. We're very optimistic about the way the year started, what's in the pipeline now, but there are so many variables on a macro basis that could affect it that I don't want to guide people closer to 10. I don't think that's appropriate. But, you know, right now, as we look at it, you know, will indirect, for instance, repeat the same quarter it had this quarter? Eh, maybe not, but it'll be healthy. Mortgage, same thing with rates popping up. We still have a healthy pipeline there. Will it be as robust as first Q? Maybe it plateaus a little bit. With that said, we're pretty comfortable that we'll be able to drive the expectations that I think you guys have coming out of the last earnings call and I think we got a nice jump on it in the first queue.
spk04: Okay. The other one I was looking for a little bit more help on was, Scott, you had mentioned that you expect expenses to drift higher, and I was hoping you could be a bit more specific with where you think they could drift to.
spk05: Yeah, so if you remember at the end of the year, I think I provided some guidance in the $73 to $74 million quarter from a spending standpoint, and that's probably still what we think if you blended our whole year, that those numbers are not, you know, out of line. You know, we don't do our merit increase until the third quarter of the first, the third month of the first quarter, so we're likely to that starting in April, you know, that's roughly a cent and a half per share, you know, the additional piece. You know, and our combined merit change, you know, this year, it's probably closer to a four handle than the three handle or two and a half handle that the company's enjoyed over the last handful of years, certainly through the pandemic. And, you know, and there's been spots where we've needed to be a little bit more, you know, that's In order to bring new people in the organization, we've needed to step that up a little bit in certain cases, so we're certainly not immune from some of those market inflationary conditions. The other piece I would just, you know, Matt, just to call your attention to is we tend to have this uptick in certain of our expenses that happens late in the third quarter and into the fourth quarter. So as much as certain payroll taxes and other things, equity compensation is high in the first quarter, some of those other, quote, discretionary relative to timing expenses tend to happen a little bit later in the year. So, you know, if we could, you know, continue to operate and grow at the first quarter's operating expense level, we would be exceptionally pleased. I suspect we creep up back into that 73-74 window, and I expect we get there next quarter and maybe a little bit more as we get into the balance of the year. payroll day in the second quarter, two in the third quarter, I think only one in the fourth quarter this year, interestingly enough, but we get another earnings day in the second quarter and two more in the third and the fourth quarter. Earnings days are more powerful than payroll days for us on a net basis, so that trade-off is fine for us. That's kind of what we're thinking right now. We've got some decent and productive underlying technology projects underway that most of them started last year. But we've got a couple important things we're working on this year, and those will be a little bit of incremental expense. I think you'll see in how we put together our income statement this quarter, we did some reclassifications of some items. and equipment into occupancy and technology and data-related services, just as a more, you know, for us, that's how we're managing it. And that's just, we think, a better presentation of where our spending's at today. So, you know, kind of a long way around getting to the point of first quarter was probably the low point of the year from an operating expense standpoint, but I don't think we're going to be, you know, tons and tons above that for the balance of the year.
spk04: Great. My last one is just in regards to credit. Obviously, this quarter was solid on all the credit metrics front, but you do have a good line of sight with your specialty finance, your dealer book. Are you seeing any incremental signs of distress on the consumer level, particularly at the lower ends? And then as a follow-up to that, if we do get the 200 basis points of Fed hikes or potentially more as we look into 2023, at what point do you have to worry about credit quality deteriorating into a higher rate environment? What's your customer's ability to withstand that kind of rate increase?
spk02: Great question. A couple of thoughts there. What's the canary in the coal mine? Past due and charge-off levels in our consumer businesses, particularly the unsecured consumer businesses, I'll tell you coming out of a recent review that we're not seeing material negative movement in either one of those measurements, so past due and charge-off still very low. We see still in our retail checking accounts, excess balances, and excess of what is normally carried by our customers. That tells us there's room to absorb the expense of additional rate hikes. However, implied in your question is a return to a reality that is normalized, and that will come. We all know that. The question is how quickly. We don't see it on the immediate horizon. Going into next year, would we be more normalized? Yeah, perhaps, and it will manifest itself on the consumer side. But right now, we're not feeling it or seeing it, but we're prepared for it when it comes. So that's our current sense.
spk05: And, Matt, I would just add to that, too. Backdrop, what do we feel really comfortable with? 118 coverage ratio on the whole portfolio based on the mix of our, you know, the assets that are in our loan portfolio, which we break out into a level of detail. But to your point, you know, we call out the fact that reserve coverage in those consumer unsecured lines has to be higher. from a CECL standpoint. And second piece is 325% of coverage on today's non-performing loans gives us what we think is a lot of room relative to potentially with the rest of the asset-based portfolio. But we're cognizant of the fact that we're making loans today in most of our categories, whether it's residential mortgage, auto, commercial real estate, at asset values that are near historical highs, so the underlying valuation of those assets. But there's no sign that those valuations are going to get meaningfully eroded by slightly higher rates. even 200 basis points. So I feel pretty good, feel pretty comfortable about that. You know, the jury is still out in the CECL world. The moment somebody at Moody's puts the word recession risk into some of those forecasts, you know, will the world, the banking industry, have to start thinking about how it, you know, forecasts its CECL reserves? Probably. Is that going to happen this year? Maybe not. Maybe that's a 23 discussion. Right. Great. Well, I appreciate you taking my questions. Thank you.
spk04: Appreciate it, Matt. Thanks, Matt.
spk00: As a reminder, anyone with a question can please press star and then one on your touchtone telephone. Our next question comes from Krem O'Connell of KBW. Your line is open.
spk03: Hey, how's it going, guys? Hey, Krem. Morning. Morning. So just for a start on the buyback, you know, you guys, had a strong quarter this quarter and indicated a, you know, pretty good start to 2Q. How should we think about, you know, the buyback going forward and, you know, regulatory capital and, you know, TC held in, you know, well this quarter. But how do you guys think about, you know, capital going forward in terms of, you know, what's the most constraining ratio or what you're focused most on?
spk05: Great question, Chris. And actually, you know, thanks for bringing it up. So you're right. We did a couple hundred thousand shares in the first quarter. That was to address natural equity plan creep that we thought we would probably experience in 2022. And then, you know, we thought we opportunistically, you know, quote, got another 200,000 early in the second quarter at prices that we thought were reasonably attractive. You know, we're also accreting capital a little bit faster than we kind of exactly where we thought we would be, absolutely. So your question relative to capital utilization and any constraints, certainly tangible equity doesn't constrain us. On the regulatory side, we tend to focus on regulatory tier one capital, because that tends to be the only question that our principal regulator, the OCC, asks us about when we try to do things relative to organic expansion or potentially expansion via acquisition. That tends to be where their pinch point is. We also are very cognizant of making sure we understand productive utilization of our capital. If we got to the point where we were fortunate enough to be involved in a transaction, would we use some cash portion of the transaction. We've got holding company cash flexibility to be able to do that as well. So I wouldn't call anything restrictive today. If I go one step further, Chris, if you start to look at CET1 numbers above 12% and total risk-based capital above 15%, you know, short of being flippant, but that sounds ridiculous. Fifteen is still way too high. So it gives us lots of room to think about how we want to do that from a mix of asset standpoints.
spk03: Great. Appreciate the color there. And then the Retirement Plan Administration, I know it's a seasonally strong quarter. It looked to be, you know, a little bit better than expected this quarter. Anything in particular driving that or going to, you know, reverse a bit in 2Q? And then how does the acquisition of the Cleveland-Hossworth impact financially in the fee?
spk05: Right. So two items there. Is the first quarter typically the most robust quarter in the retirement plan administration business? It actually can be. You're onboarding your new customers, you know, for the first quarter, and you've probably got some more activity. We had more activity-based revenue opportunities in terms of plan restatement fees. through that. That said, that business is doing very well. The run rate and the trajectory relative to opportunities for growth are very well. Matter of fact, we're spending time in that organization, significant effort, making sure our underlying structure is sound enough to carry larger levels of revenue because we think that you know, with a little bit of additional work relative to infrastructure, should be able to carry 50% more than that. And so like our opportunities in that space a lot. You know, the other piece I would say relative to, you know, just sheer timing, there's a little bit of market influence, you know, on both retirement plan administration space and wealth management. The first quarter was probably down to stable, of assets in wealth management and in the retirement plan administration space. But again, we're not just completely a slave of the equity markets in any of those businesses. So, you know, might we see a modest tick down if the market continues to be a little bit volatile and fragile? A little bit, but we don't think it's a meaningful number.
spk06: Oh, and the acquisition, thank you.
spk05: Chris, you asked me about the Cleveland house worth $150 million of assets under administration, most of which are in the retirement plan administration space. In other words, we're managing retirement assets. And interestingly enough, the desirability of that acquisition was a lot of those customers are already customers. of the EPIC platform. You know, I think we're thinking $700,000 to $800,000 of revenue run rate, so certainly not large, but very additive in terms of the qualitative mix that it brings to our combined environment.
spk03: Great. And that's $700,000 to $800,000 annual, right?
spk05: Correct. Thanks.
spk03: Yep. Great. And then back to the margin, When you guys put the excess liquidity min calculation along with PPP in the release, what's the excess liquidity level or what's the amount of excess liquidity that's being considered there?
spk05: So I think, let's work through that just for a second, Chris, but I think we're thinking that excess liquidity ended the quarter around $900 million. Rationally, what do we think is true excess liquidity today? Probably closer to 6%. $700 million. Because, again, I think if rates truly do go up at a much faster pace on the short term, some of those money market funds and other opportunities for some of our larger institutional customers to make a modest duration decision and pull some of those assets off and go into a short-term fund are probably likely for us. Do we think it's more than a couple hundred million dollars? Probably don't. But we'll stay close to that because those are important customers of ours.
spk03: Great. And how are you thinking about the deployment of that into the securities book over the next several quarters?
spk05: Well, you know, so we've been really successful staying with the strategy of largely CMO, MBS type securities that have natural cash flows coming off them, targeting kind of a three to six duration span. Does that group of securities extend a little bit as rates go up because prepayment speeds slow down? Yeah, probably a little bit. Meaningful to our total duration as a portfolio? No. So I still think that's the class that we like because I think we're finding opportunities there. Spending a little bit of time doing some research today around opportunities in that same duration in tax-exempt securities. That curve looks like it's moved up a little bit more robust than maybe the – quote, the mortgage market side. That said, our plans are still to portfolio most of our residential mortgage production for the time being. Mortgage rates have sort of gotten out of 5%, which seems high when you talked about three, but on historical standards, well within historical mixed levels, maybe even cheap still. So that's what we're thinking about on that. If rates move up a little bit faster than that, might there be some opportunities to get back to selling production if the underlying rates were in the sixes? Maybe. I think our idea is even when we price stuff to go on to the balance sheet, we're thinking about what would that need to price at in order to achieve a 150% to 2% gain if we were actually selling it.
spk03: Great. Thanks for taking my questions.
spk05: Thank you, Chris. Thanks, Chris.
spk00: And I'm not showing any further questions. I would now like to turn the call back to John Watt for his closing remarks.
spk02: Why, thank you. And thank all of you for taking time this morning to hear the story of first quarter at NBT. As I started, we're pretty proud of the way we came out of the box in the first quarter, and we have a lot of momentum, and that's all a function of the team executing. So, again, thanks for your time. Look forward to hearing from you in the next quarter. Thanks, Operator.
spk00: Thank you, Mr. Watts. This concludes our program. You may now disconnect and have a great day.
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