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spk00: Greetings and welcome to the QCR Holdings, Inc. Earnings Conference Call for the third quarter of 2021. Yesterday after market close, the company distributed its third quarter earnings press release. If there is anyone on the call who has not received a copy, you may access it on the company's website, www.qcrh.com. With us today from management are Larry Helling, CEO, and Todd Gipple, President, COO, and CFO. Management will provide a brief summary of the financial results, and then we will open the call to questions from analysts. Before we begin, I would like to remind everyone that some of the information management will be providing today falls under the guidelines of forward-looking statements, as defined by the Securities and Exchange Commission. As part of these guidelines, any statements made during this call concerning the company's hopes, beliefs, expectations, and predictions of the future Our forward-looking statements and actual results could differ materially from those projected. Additional information on these factors is included in the company's SEC filings, which are available on the company's website. Additionally, management may refer to non-GAAP measures, which are intended to supplement but not substitute for the most directly comparable GAAP measures. The press release available on the website contains the financial and other quantitative information to be discussed today, as well as the reconciliation of the GAAP to non-GAAP measures. As a reminder, this conference is being recorded and will be available for replay through November 11, 2021, starting this afternoon, approximately one hour after the completion of this call. It will also be accessible on the company's website. At this time, I would like to turn the call over to Mr. Larry Helling at QCR Holdings.
spk02: Thank you, Operator. Welcome, ladies and gentlemen, and thank you for taking the time to join us today. I will start with a brief discussion of our third quarter performance. Todd will follow with additional details on our financial results for the quarter. We delivered another quarter of record net income driven by exceptional loan growth, strong fee income, expanded net interest margin, and excellent credit quality. Despite the competitive lending environment, we grew core loans and leases by a very robust 23 percent on an annualized basis, while maintaining excellent credit quality. Year-to-date, our annualized loan growth has been 18%, exceeding our long-term target of 9%. We continue to attract new clients and deepen ties with existing clients, which is an ongoing strategic priority of our relationship-based community banking model. Third quarter net income was $31.6 million, and diluted adjusted earnings per share was $1.99. Both measures are company records and each up more than 40 percent from the second quarter. On a year-over-year basis, our earnings for the quarter were up 82 percent. The third quarter performance was due to robust loan growth and was bolstered by very strong capital markets revenue, some of which was carried over from the second quarter, as indicated on last quarter's call. We believe this revenue source is sustainable long-term and Todd will provide more detail later in the call. Our exceptional loan and lease growth in the third quarter was driven by strong production in our specialty finance group and continued growth in our traditional commercial lending and leasing business. Within SFG, we continue to experience strong client demand for our niche lending products. particularly in the area of municipal and tax credit finance. Our M2 equipment finance group also had an impressive quarter, building upon the momentum that they have seen all year. Lease balances grew by 7% on an annualized basis during the third quarter and 10% annualized for the first nine months of the year. Given our strong loan and lease production year to date, combined with our current pipeline, We are now targeting organic loan and lease growth for the full year 2021 of between 16 and 18 percent. We funded our loan growth in the quarter with continued growth in our core deposits, which grew $183 million, or approximately 16 percent on an annualized basis. This growth was driven by strong contributions from our commercial clients. We also continued to reprice deposits lower, while growing our non-interest and interest-bearing demand deposits. This helped reduce our overall funding costs during the quarter and drive growth in our net interest income, both in dollars and in margin. Todd will provide more details on NIM in his remarks. Our asset quality remains exceptional as our non-performing assets improved 32 percent for the quarter and now represent only 11 basis points of total assets. We had minimal net charge-off during the quarter, and we feel very good about our current reserve level, which, when excluding PPP loans, is now 1.79%. Our banks continue to be well capitalized, and we were able to maintain our capital ratios despite our significant growth in loans, while at the same time repurchasing 193,000 shares of our stock at an average price of $48.50 per share. Since we announced the resumption of our share repurchase program earlier this year, we have repurchased nearly 300,000 shares, approximately 2% of our outstanding shares, as part of our long-term capital allocation plan to further build shareholder value. I would like to thank the entire QCR Holdings team for their hard work and dedication to excellent client service and for delivering another quarter of record earnings performance. Our employees are the heart of our company, and I am very proud of our entire team for all they've accomplished this year. In summary, we are extremely pleased with this quarter's performance and remain optimistic going into the end of the year. We continue our pursuit of organic growth and disciplined capital deployment within the markets we serve with the goal of delivering attractive returns and creating increased value for our shareholders. I will now turn it over to Todd for further details.
spk06: Thank you, Larry. Welcome, everyone. Thanks for joining us today. As I review our third quarter financial results, I will focus on those items where some additional discussion is warranted. I'll start with net interest income. Our adjusted net interest income for the quarter was a record $48.5 million and up $2.8 million or 6.2% from the second quarter. This exceptional performance was due to the outstanding loan and lease growth that Larry discussed, combined with an increase in our adjusted net interest margin. During the quarter, we were able to grow our adjusted tax equivalent NIM by nine basis points. Our average earning assets grew 2.5 percent, and the yield on those assets increased nine basis points, due primarily to higher loan yields. In addition, we continued to drive our funding costs lower by two basis points. as higher cost time deposits are being repriced lower upon renewal or rotating to lower cost non-maturity deposits. Our adjusted NIM also benefited from 64 million of PPP loan forgiveness during the quarter and the associated origination fees that were recorded as a result. These fees amounted to 1.9 million and positively impacted our NIM by seven basis points. Excluding the impact of our PPP fees, our core NIM expanded by two basis points, outperforming our Q3 guidance for a static net interest margin. With respect to PPP loans, we currently hold $84 million in remaining balances and expect forgiveness on the bulk of these loans to occur in the fourth quarter. This would result in the recognition of the remaining $2 million of PPP origination fees. As we look forward, we anticipate a slight decline in our core NIM in the fourth quarter, given the headwinds of the ongoing highly competitive and low interest rate environment and a limited amount of room for our funding costs to decline further. As always, we will work hard to continue to protect loan yields and proactively manage excess liquidity in an attempt to outperform that guidance. Given our strong loan growth, we do expect another quarter of solid growth in net interest income. Now turning to our non-interest income. Non-interest income was $34.7 million in the third quarter, including $24.9 million in capital markets revenue from swap fee income. This very strong quarter included a number of transactions that were scheduled to close in the second quarter and instead carried over into the third quarter, as we indicated on last quarter's call. Capital markets revenue has averaged $16 million per quarter thus far in 2021, and $16.3 million for the last eight quarters. As a result, we expect this revenue source will continue in the range of $14 to $18 million per quarter going forward. We believe that our guidance range is sustainable given our strong historical performance and the ongoing and long-term demand for our capital markets products. With respect to our wealth management business, we continue to onboard new client relationships, adding 79 new relationships in the quarter totaling $128 million in AUM. Year-to-date, we have gathered $319 million in new client assets, representing a 7% increase in assets under management from the beginning of the year. Total AUM at quarter end was $5.1 billion, down slightly from the previous quarter, as our new client assets were offset by portfolio market volatility and some specific client disbursements. Now turning to our expenses. Noninterest expense for the third quarter totaled $41.4 million, up from $35.7 million for the second quarter. The linked quarter increase was primarily due to higher performance-based salary and benefits expense of $5.2 million, driven by strong revenue production and earnings performance during the quarter. Additionally, we recorded a $1.5 million charge related to the write-down of certain fixed assets. Partially offsetting these increases was a $1.3 million net gain on the sale of other real estate. Excluding these two one-time items and adjusting for a more normalized capital markets revenue of $16 million, our core non-interest expense would have been $39 million, right at the midpoint of our guidance range of $38 to $40 million. Looking ahead to the fourth quarter, we continue to expect our non-interest expense to be in this range. Our overall asset quality continues to be excellent. As Larry mentioned, both our non-performing assets and the ratio of NPAs to total assets improved from the prior quarter, and there were minimal net charge-offs in the quarter. We also successfully sold another real estate property, which led to the $1.3 million net gain that I mentioned earlier. We again did not record a provision for credit losses during the quarter, nor did we release any reserves. This was primarily due to the continued strong asset quality, a reduction in non-performing loans, and continued robust loan growth. With respect to capital, we continue to maintain strong capital levels as a result of our solid earnings and excellent credit quality. As Larry mentioned, we repurchased 193,000 shares of our stock during the quarter at an average cost of $48.50 per share. and have approximately 400,000 shares remaining available to repurchase under the current program. Our effective tax rate for the quarter was 20 percent, a bit higher than our expected range of 17 to 18 percent, and was driven by the strong growth in taxable revenue sources, primarily capital markets revenue, which outpaced net growth in our tax exempt revenue. With that added context on our third quarter financial results, let's open the call for your questions. Operator, we're ready for our first question.
spk00: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. Our first question today comes from Damon Delmont with KBW.
spk04: Hey, good morning, guys. Hope everybody's doing well today.
spk02: Morning, Damon. Good morning.
spk04: Great. Well, congrats on a nice quarter. Some really good numbers you guys put up. I guess, you know, I guess with regards to the loan growth, how much of this is being generated from the SFG division versus just, you know, your normal community commercial bankers and throughout the footprint?
spk02: I'll tackle that one, Todd. Certainly we've gotten growth really from all of our sectors Our core loan growth or from our traditional businesses are probably growing in the 2 to 3, 4% range depending on which location we're in. So we're starting to see some growth, but there's still a tremendous amount of liquidity in our clients' businesses. And so that's suppressing our historic growth rate there. Our leasing business is active. And our growth there has really been running the 7% to 10% range as the demand for equipment is high. So that's been a real positive variance. And then the remaining of the growth is really coming in our specialty niches, which are well positioned certainly in this environment to continue to do well. Got it.
spk04: And does the specialty group, is that just out of like the Cedar Rapids area or is that throughout the entire footprint?
spk02: It's predominantly originated in the Cedar Rapids area, but we certainly originate business from around our footprint. And so it's a mix of things, you know, tax credit, municipal finance, and then a couple other specialized niches where we, you know, think certain expertise is required to effectively do those kinds of transactions.
spk04: Got it. Okay. That's good color. Thank you. And then, you know, with respect to credit and the reserve levels, you know, credit is pristine, um, you know, no, no real losses and no formation of, of, of, uh, non-performing loans. You know, how do we look at the, uh, the provision level going forward, Todd, you, you feel you're at a point now where you can start to release some of those reserves. I think you ended the quarter at like 179, um, X PPP, which is extremely healthy. Um, what, what would your thoughts on that be?
spk06: Yeah, we, we certainly did, uh, and in really good shape and it is pristine. Um, We do not believe that we will be releasing reserves, more growing into them, the pace of loan growth that we've been putting up. And really, I think, Damon, you know us quite well, our credit culture. We're very conservative when it comes to reserve levels. And for those reasons, just as we did in Q3, I would say short-term, at least, our expectation would be to hold on to the reserves we have and not necessarily the lease.
spk04: at it that's that's good color thank you i'll i'll step back and and uh i thank you very much for the um the color today thanks damon thanks damon our next question comes from nathan race with piper sandler yep hi guys good morning morning good morning um i appreciate the commentary and the the release around um
spk01: kind of core loan yields, you know, ex-PPP and accretion, you know, holding steady. Is that still the outlook, at least into the fourth quarter, that we can kind of defend loan yields, you know, right around 4% even at this point? Or have you guys kind of seen the competitive environment evolve, particularly across, you know, the various specialties that you guys cater to?
spk06: Yeah. We certainly expect to be able to hold on loan yields. We're doing a fine job. Larry and I would compliment all of our teams across all the footprints doing a fabulous job holding on to yields and doing a fantastic job with the cost of funds. We feel very good about loan yields and where they've landed. I don't know that we are expecting any significant moves there. Our guidance is really, we use the word slight in our comments. I would say one or two basis points, perhaps expectation on some margin compression that would come in the form of pressure on loan yields. We do think we have a little bit of room to go on the cost of funds and deposit pricing. And the real issue will be, can we keep pace with continued pressure on loan pricing? But yeah, Very optimistic for a relatively stable margin. We've outperformed guidance here so far this year. And again, compliments to all of our bankers for helping with that. But when we say a slight margin compression, it would be in that one to two basis points. And yes, it would come from continued pressure on loan yields.
spk01: Understood. That's great, Tyler. Changing gears a little bit, I kind of think about the expense trajectory, and I appreciate the kind of consistent guidance for the fourth quarter. But as we kind of think about the variability in capital markets and swap revenue into next year, what's like the baseline personnel cost that we should be layering on top the kind of 30% implied efficiency ratio with that segment in particular as the revenue fluctuates?
spk06: Sure. I can try to give a little bit of color around that. We were pretty transparent on the jump in non-interest expense here in the third quarter that it was almost exclusively due to the significant outperformance on capital markets. So if you think about that in terms of how you should view it and I think how we should all view it and model it, we had about a $15 million jump on a link quarter basis in capital markets. around a $5 million increase in performance-based comp around that, so around 34%. I think we've talked in the past that a lot of times that range will be 25 to 35, and it really depends on the level of underperformance or outperformance. So this time it was on the higher end of the scale simply because we significantly outperformed the 14 to 18 range, which we said last quarter we likely would do. And then going forward, when we talk about our non-interest expense being in this 38 to 40 million range, you would think about capital markets results being in the midpoint of our guidance. So when we talk about being in this 38 to 40 range for this following quarter here, Q4, our expectation is our result would be based on a $16 million capital markets number right in the middle of the guidance range. And when we outperform that, Significantly, we might have another 30% or so in terms of comp and non-interest expense as a result. When we're right on that guidance, we're probably going to be in the middle of the guidance range, around $39 million. And I think that's going to, for the most part, hold true here going forward. We're obviously going to have some pressure on expenses, comp, and other things going into the new year. We'll try to give you some guidance on 2022 sometime in January. But that's really how I would view our comp run rate.
spk01: Got it. Makes sense. And maybe one last topic from me on just the capital outlook. You know, you guys might remain active on the buyback this quarter. Stocks obviously Appreciate it above kind of where you guys were buying back stock in the quarter. So just would love to get some updated thoughts on, you know, the appetite for additional buybacks within the context of what you guys are seeing from an M&A perspective. And obviously, you know, there's the outlook for capital levels to likely build next year, you know, absent an acquisition or, you know, continued activity on the share repurchases.
spk06: Sure. Larry, you want to take that one?
spk02: Larry on mute by chance I'm sorry there we go yeah the M&A markets are active as you know and we certainly want to keep our capital position in a place where we're in a place to execute on something if it becomes available on the buyback certainly we will continue to consider that because As you know, we are a low-dividend payer, and we will accumulate capital fairly rapidly. So we'll continue to evaluate that. You know, it certainly depends on market price and how we feel about other alternative uses of our capital. Okay.
spk01: I appreciate all the colors. Thank you, guys, and congrats on a great quarter.
spk06: Thanks, Nate.
spk00: Our next question comes from Jeff Rulis with DA Davidson. Thanks.
spk05: Good morning. Good morning, Jeff.
spk06: Good morning, Jeff.
spk05: Todd, thanks for the expense guide. That's as clear as I've heard that dynamic, so I appreciate the tie to the swap side of things. Very clear. Just wanted to jump a little more detail into the loan growth. really strong here. And I guess I wanted to maybe talk about the other side of net growth or gross growth is payoff activity and wanted to, Larry, I think you mentioned some liquidity, but do you have, maybe just narrowing it down to the question here, payoff activity late quarter, do you have those levels of what maybe was against gross production?
spk06: Sure do, Jeff. And I can give you some color around that. I know Larry has some thoughts in terms of loan growth overall. But our payoff number here in Q3 was roughly 390 million. Pretty healthy number there. But actually down on a link quarter from Q2, where it was 425, was right at the same level in Q1, about 390. So 390, 425, 390 here in this quarter. Certainly some challenge with respect to swimming upstream against those payoffs. And as Larry shared earlier, that's part of the benefit of our specialty finance group providing outsized growth and assets. While it's a nontraditional part of our lending, it's very core to us and very important to us, and we expect to continue to have success with that.
spk02: Yeah, Jeff, I'd add that certainly we – We're hitting on all cylinders in the third quarter on our loan growth, but our history of loan growth, you know, we've grown in the 8% to 10% range for a long time, and so we would continue to expect to grow at those kind of relative numbers, you know, as we look forward. And as Todd, you know, alluded to, you know, the specialty finance niche is a part of our core business, and we expect that to be available for us to supplement our growth through ups and downs in the interest rate cycles and long into the future. So we certainly feel good about the contribution it's made. And, you know, as our traditional lending clients, you know, burn through some of that liquidity over time, we expect, you know, just normal advances on commercial companies' lines of credits to grow over time. But as you know, there's certainly still a lot of liquidity out there because of the PPP program.
spk05: yeah i i guess i'm shocked at those payoff levels those are pretty elevated given the net growth that you're putting up um well i'll keep nudging you along here i guess in 22 then you've talked pretty clearly about reverting to the nine percent loan growth with the upper teens expected in 21 i guess i would think you got some momentum into 22. i
spk02: safe to say there's some upward bias in 22 to that historical 8 to 10. yeah i think that's fair jeff um you know the world and the economy is such an uncertain place we kind of hate to uh make predictions that are different than what we've done over a long period of time but so you know certainly maybe toward the top end of that eight to ten uh would certainly be appropriate okay fair enough um and last question just on the
spk05: On the swap income, it seems like you've got growing comfort or visibility now on when that's coming in, and really just a timing thing, it sounds like, quarter to quarter. But interested in the competitive side of that, and is that something that's kind of a core competency that that, call it $16 million a quarter run rate, is pretty sustainable? Or you look at a different interest rate environment out in beyond 22 that that's threatened or anything that you'd comment on that income stream even longer term?
spk02: Yeah, we believe that the 16 million is a sustainable number in the long run. You know, there's certainly in all of our businesses, there's competitors react differently in up rates environments or down rates environments. But we believe that we have the engine built to make that pretty sustainable. There'll be some variability and some seasonality in that business just because of the nature of the business. But we feel good about that being a solid contributor to our income for a long time into the future.
spk06: Jeff, just to tag on to Larry's color around that, You know, we did think it was important to point out that the midpoint of our guidance range, the $16 million, is in fact what we've averaged this year, very close to what we've averaged the last two years. It's really the basis of our guidance that we're giving. We think that is, as Larry said, the sustainable run rate. It's fairly choppy at times. But I think it's important that the actual business and the transactions and And the volume in the pipeline is not as sensitive to market rates. Sometimes the amount of revenue or capital markets revenue that we'll get out of each transaction is impacted by the rates. But it's a very sustainable business and would be here for us if rates go up, if yield curve gets steeper. It's not so much about the volume of the transactions. It's more a little bit around the edges on the pricing we can get, if that makes sense.
spk02: Yeah, Jeff, the other thing I'd add is the underpinnings for that tax-advantaged business, whether it's historic, LIHTC, and other kinds of tax credit financing, are really good. The demand and the activity in that space continues to grow. If you look at the tax-advantaged housing, the low-income tax credit housing, the demand in that space, the growth in that space is real, so it's not like we even have to carve out a bigger chunk of business. We really just need to keep doing what we're doing as the business grows.
spk05: That sounds good. Thank you.
spk06: Thanks, Jeff.
spk00: And again, if you have a question, please press star then one to join our queue. Our next question comes from Daniel Tomeo with Raymond James.
spk07: Hey, good morning, guys. Just one for me. The rest of my questions have been answered. But, you know, given the very strong loan growth that you're seeing, you've still got a loan deposit ratio in the 90s here. Do you expect to see deposit growth keep pace with loan growth from here? Or, you know, given where we are in the cycle, you think that that continues to go up? And then how high are you comfortable with the loan deposit ratio getting? Thanks.
spk06: Yeah. Danny, we One of the things we haven't talked about on the call yet, so I'm glad you asked the question, and we feel very good about keeping pace with loan growth and funding it with core deposits. We are very pleased to be sitting here with really no wholesale funding left. The only thing wholesale on our balance sheet would be drops and sub debt. And that's in large part because we have kept pace with funding it with core deposits and We haven't talked about it on the call yet, but the correspondent bank deposits that are off balance sheet for us that we would have access to are right now bouncing around in a range of $1.2 to $1.5 billion that are in the excess balance accounts with the Fed. So that gives us the just-in-time inventory for core deposits, and we feel really good about having that available to us at a reasonable cost.
spk07: Well, thanks. I appreciate the call.
spk00: Our next question comes from Brian Martin with Danny Montgomery.
spk03: Hey, good morning, guys.
spk02: Good morning, Brian.
spk03: Hey, could you guys, Todd, maybe just give a little thought on, I know you talked about the margin, you know, being relatively stable up or down a little bit, maybe down a little bit in the fourth quarter, but just, I mean, do you see that there's potential for, you know, upside? I mean, you know, bigger pictures you get into next year, I guess, just, How are you thinking about, you know, beyond fourth quarter? And I appreciate you guys would give more color, you know, as you get into next quarter earnings. But just kind of high level, just kind of what you're thinking about as far as what could be the puts and takes there on, you know, the future margin outlook.
spk06: Sure. Sure. Absolutely. Yeah. Longer term, we're very optimistic about margin because we are asset sensitive at this point. And we've been able to improve margin here over the last, four to six quarters and at the same time really pivot our income statement to much more asset sensitivity. Right now our RSAs are around 2.2, our RSLs are about 1.3. So we have about a $900 million delta on RSAs to RSLs and feel very good about that in terms of some tailwinds that could provide if we see some rate increases. So longer term, that's really something that we hope to be able to take advantage of. Question being when that might happen and how steep the curve might get at the same time. And I think that's why Larry and I would really defer much more in 2022 guidance until we have another quarter or so under our belts in terms of what might be happening with rates and where those things might be headed. But that's really more of a long-term view in terms of the short-term puts and takes, you know, certainly continued pressure on loan yields. Actually, we've tightened up the delta between our payoff rates and our new funding rates, and that's gotten a little bit tighter lately, so that's a good sign. Can we keep growing loans at this strong pace? We do believe we can. And then excess liquidity, we've done a lot of hard work to keep the excess liquidity pushed off our balance sheet to the extent we can. And that's been another reason we've outperformed guidance recently. And then of course the opportunity to continue to improve our funding costs still exists, but it's starting to get down to what we might consider as floors. And then what really happens with the, with the rates, what the Fed might do, what LIBOR or SOFR might do, and what the long-term rates and the yield curve ends up looking like. So lots going on there. I think we'll have some more color for you with full-year results in January.
spk03: Yeah, okay. No, I appreciate that. That's helpful, Todd. And just on the last two things, just the expenses, I guess, is wage inflation something, I guess, just kind of thinking about as you look at next year, Todd, and your comments about how to think about expenses, I guess, tougher now to kind of maintain, you know, the growth rate and expenses that you have historically been running than, you know, does that seem fair based on kind of what the current market conditions are like? So if your normal expense growth rate was, you know, X percent, it's maybe a little bit more today, given where wage inflation is at.
spk06: Sure. I might start on that. And then I know Larry's got some comments around what we expect to do there. But I think everyone's familiar with our 965. And the five in that is, of course, non-interest expense and Over the last several years, we've significantly outperformed that. Our growth in non-interest expenses has been closer to 2% than 5%. And so we've had a lot of success with that. Our entire company is focused on doing the right things there. But it's going to get more difficult, certainly. And I think maybe Larry would have some comments for you in terms of people cost and other things there.
spk02: Yeah, Brian, we're certainly feeling the same. kinds of hiring pressure and the wage pressure that we see kind of throughout certainly our markets that you're seeing around the country. You know, we probably, good chance, we're not given guidance yet, but as we're doing our budgeting for next year, which we're deep in the middle of right now, you know, holding on to 5% increase in expense rates is going to be a challenge, but we certainly haven't given up yet on that. But You know, it's going to be more difficult to hire people. And, well, there's certainly upward pressure. So I think you're seeing it about right. Yeah.
spk03: Okay. And the last one from me, Larry, just your comment about M&A. I appreciate that. And have you seen any – I mean, there's been a lot of activity in the Midwest. I mean, have you guys seen an uptick in dialogue? I guess I know you guys have certain markets you're targeting and sizes and whatnot. But just within kind of your group of, you know, kind of what you're considering or potentially would consider – Has there been any uptick in conversations, or has it just kind of been static here and just kind of wait and see?
spk02: Yeah, a couple things. Certainly, we've been consistent in saying that our first preference for our next M&A transaction would be to be in either Des Moines or Springfield markets. We've already got a presence in those markets with good management that we think helps our opportunity to execute efficiently and effectively in those markets. We like the markets, the quality of the economic environments in those markets. So that's certainly our first priorities. I'd say discussions have been more active, you know, but as I tell our employees, just because we're ready to buy doesn't mean somebody's ready to sell. So we're just trying to be in a position so that we can execute when those become available. Got you.
spk03: Okay. Makes sense. I appreciate the caller and a great quarter, guys. Thank you.
spk06: Thanks, Brian.
spk00: This concludes our question and answer session. I'd like to turn the call back over to Larry Helling for any closing remarks.
spk02: Thanks to everyone who joined us on our call today. Have a great day. We look forward to speaking with you all again soon.
spk00: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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