MSBI - NASDAQ

Ladies and gentlemen, thank you for standing by, and welcome to the Q3 2021 Midland States Bancorp Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]. I would now like to turn the call over to your host, Tony Rossi of Financial Profiles. You may begin.

Thank you, Kevin. Good morning everyone and thank you for joining us today for the Midland States Bancorp third quarter 2021 earnings call. Joining us from Midland’s management team are Jeff Ludwig, President and Chief Executive Officer; and Eric Lemke, Chief Financial Officer. We will be using a slide presentation as part of our discussion this morning. If you have not done so already, please visit the Webcast and Presentations page at Midland’s Investor Relations website to download a copy of the presentation. Before we begin, I'd like to remind you that this conference call contains forward-looking statements with respect to the future performance and financial condition of Midland States Bancorp, that involve risks and uncertainties, including those related to the impact of the COVID-19 pandemic. Various factors could cause actual results to be materially different from any future results expressed or implied by such forward-looking statements. These factors are discussed in the company’s SEC filings, which are available on the company’s website. The company disclaims any obligation to update any forward-looking statements made during the call. 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. And with that, I’d like to turn the call over to Jeff. Jeff?

Good morning, everyone. Welcome to the Midland States earnings call. Before we begin today, I have some sad news to share. Last week, we lost a beloved member of the Midland family when Leon Holschbach, our former President and CEO passed away after a long battle with ALS. Besides being the driving force of an unprecedented period of growth that turned Midland into one of the largest community banks in Illinois, Leon was a great friend and mentor to so many of us at the company. His energy, enthusiasm and hard help build the Midland culture that serves as our foundation today. We were fortunate to have him as a friend and a colleague, and he will be deeply missed. Now, moving to our usually prepared remarks. I'm going to start on Slide 3, with the highlights of the third quarter. We executed well and delivered a strong quarter, driven by positive trends across most areas of our operation. Everything that we have been working on over the past couple of years from adding more banking talent to streamlining our cost structure, to optimizing our funding sources is generating the desired results. We are seeing stronger, more diversified loan growth, a decline in our cost of funds and an increase in our net interest margin, higher levels of reoccurring fee income and improving efficiencies. All of this combined to produce another strong quarter of earnings. We generated net income of $19.5 million or $0.86 per diluted share. And our core earnings power continued to improve as our adjusted pretax pre-provision income was $28.4 million in the third quarter, an increase of 5.2% from the prior quarter. Throughout this year, we have talked about our progress in adding new commercial banking talent, particularly in higher growth markets in Northern Illinois and St. Louis. Combined with a steady increase in loan demand as the economy continues to strengthen, the new additions are helping to drive a higher level of organic loan growth. Excluding PPP loans, our total loans increased at an annualized rate of 12.3% in the third quarter. The loan growth was well balanced with increases in commercial, commercial real estate and consumer portfolios, offsetting declines in PPP and residential real estate loans. When both commercial FHA warehouse lines and PPP loans are excluded, our total loans increased an annualized rate of 8.2%, which is well above the rate we have seen over the past several years, largely due to improved growth in commercial lending. This is attributable to a number of factors. We have increased our focus on this area, which has resulted in a higher level of productivity among our existing banking teams. We are getting good contributions from the new bankers we have added over the past year, and we are benefiting from our increased presence in higher growth markets. As a result, conventional C&I lending is becoming a stronger complement to our equipment finance group, which has been the primary driver of commercial loan growth over the past few years, and which continues to generate solid growth. We are also effectively generating full banking relationships with commercial clients, which is positively impacting our deposit mix. During the third quarter, our total deposits increased 7.8% from the end of the prior quarter, with all the growth coming in non-interest bearing and low cost checking and money market accounts. A portion of the growth was attributable to higher balances of commercial FHA servicing deposits, while the remainder was largely from new and expanded relationships with our commercial clients. The improved deposit mix combined with the elimination of higher cost funding sources last quarter helped drive an 11 basis point decline in the cost of our average interest bearing liabilities. This had a positive impact on our net interest margin as it increased 5 basis points from the prior quarter. With the more productive commercial banking team we have built and growth in our reoccurring fee income, most notably in wealth management as a result of the ATG Trust Company acquisition, we are generating more revenue while also keeping our expense levels relatively stable. This is enabling us to realize more operating leverage as we continue to grow the bank and our efficiency ratio improved to 58.8% in the third quarter from 60.2% in the prior quarter. Another area where we are seeing positive trends is asset quality. We are continuing to successfully resolve non-performing loans while the inflow of new non-performers is slowing as a result our total non-performing loans declined by 11% from the end of the prior quarter, while our net charge-offs were down by 26%. With the improved asset quality, we're able to release a little more of the reserve that we had built up during the height of the pandemic. Moving to Slide 4, we'll provide an update on our PPP efforts and the impact these loans had on various line items in the third quarter. As the forgiveness process continued, our PPP loans declined by about $64 million and brought our total balances to $82 million at the end of the third quarter. We recognized $2.2 million in fees during the third quarter, up a bit from the $2 million that we recognized in the prior quarter. As of September 30th, we had $3.5 million in fees to be recognized. Turning to Slide 5, we'll provide an update on our loan deferrals. During the third quarter, we had a steady flow of borrowers being able to return to regular schedule payments upon the expiration of their deferral period. As a result, our total deferrals declined by 68% from the end of the prior quarter with just $34 million remaining at September 30th or less than 1% of the total loans. Of the remaining deferrals, almost all are now making at least a partial payment. At this point, I'm going to turn the call over to Eric to provide some additional detail on the third quarter.

Thanks, Jeff. I'm starting on Slide 6, and we'll take a look at our loan portfolio. Our total loans increased approximately $80 million from the end of the prior quarter. This was due to the higher level of commercial loan production that Jeff previously discussed, as well as a $51 million increase in period end balances on commercial FHA warehouse lines, growth in the equipment finance portfolio, and an increase in consumer loans. The growth in these areas offset the continued forgiveness of PPP loans, as well as continued runoff in the residential real estate portfolio due to refinancing activity. While period end balances were higher on commercial FHA warehouse credit lines, average balances were lower than in the prior quarter. At September 30, our balances of PPP loans were down to $82 million. Excluding PPP loans, commercial warehouse credit lines, and consumer loans added through the GreenSky partnership, our total loans increased at an annualized rate of 6%, which reflects our improved ability to generate growth in commercial and commercial real estate loans. On Slide 7, we've provided an update on our equipment finance portfolio. As of September 30th, we had just $9 million of deferrals, which represents a decline of 74% since the end of the last quarter, we continue to see a steady recovery of our borrowers in the transit and ground transportation industry as the trends in business and recreational travel continue to improve. We've also seen more borrowers return to schedule payments, as well as others that remain on deferral, making some form of partial payment. 88% of the borrowers on deferral in this portfolio are now making a partial payment. On Slide 8, we've provided an overview of our hotel/motel portfolio. As September 30, we had just $7 million of loan deferrals in this portfolio, which is down 82% from the end of the prior quarter. And all of the remaining borrowers on deferral are now making interest-only or some other form of partial payment. Looking at Slide 9, we've provided an update on the consumer loan portfolio that we have through our relationship with GreenSky. This portfolio has performed extremely well, throughout the pandemic. At September 30th, we only had 700,000 of deferred loans in this portfolio, which represents just one-tenth of 1% of the total loans. And at just 25 basis points, the delinquency rate remains even better than the historical range that we've seen in this portfolio. In addition to the strong performance, the escrow account is available to cover any deficiency in Midland’s principal balances. The escrow account increased to $34.6 million at the end of the third quarter. Jeff will provide an additional update on the GreenSky relationship later in the call. Turning to Slide 10, we will take a look at our deposits. Total deposits increased $405 million or 7.8% from the prior quarter. The increase was largely attributable to an increase in commercial FHA servicing deposits, as well as higher balances of other commercial deposits, resulting from our business development efforts. Looking ahead to the fourth quarter, we will have additional opportunities to reprice higher cost time deposits. We have $184 million of CDs maturing at a weighted-average rate of 1.66%. As these deposits renew at current rates, we should see further reduction in our deposit costs. On Slide 11, we will walk through the trends in our net interest income and margin. Our net interest income increased 2.6% from the prior quarter, primarily due to an increase in net interest margin. Excluding accretion income, our net interest margin increased 7 basis points, due primarily to the reduction in our cost of funds, resulting from the elimination of higher cost funding sources last quarter. We were able to generate an increase in our net interest margin, despite an unfavorable shift in our mix of earning assets, as we continued to add to the investment portfolio to help support net interest income. On an average basis, the investment portfolio increased by $39 million, compared to the prior quarter, as we added securities with yields in the range of 1.25% to 1.45%. Our net interest margin for the quarter, excluding the impact of PPP income, was 3.24%. Looking ahead to the fourth quarter, we have a little more room to bring down deposit costs with the maturity of the CDs I previously mentioned. However, as Jeff will discuss in a few minutes, we've received a large influx of low cost deposits in October that will temporarily increase our excess liquidity and place pressure on our net interest margin in the fourth quarter. We have used a portion of this additional excess liquidity to further de-leverage our balance sheet by pre-paying another $130 million of FHLB advances, including $80 million of longer-term advances that matured in 2025. The prepayment will reduce our interest expense by approximately $2.2 million annually. We will record a prepayment penalty of approximately $4.9 million in the fourth quarter, which will be partially offset by the unwinding of an interest rate swap that will result in a gain of approximately $1.8 million. Turning to Slide 12, we will take a look at the trends in our wealth management business. Our assets under administration declined by $19 million from the end of the prior quarter, primarily due to market performance. However, wealth management revenue increased by 9.9% due to the full quarter of contribution of ATG. Compared to the third quarter of last year, our wealth management revenue has increased nearly 30% which reflects our strong progress on growing our recurring sources of fee income. On Slide 13, we'll look at non-interest income. We had $15.1 million in non-interest income in the third quarter, down 13.1% from the prior quarter. The decline was primarily due to a higher level of impairment on commercial mortgage servicing rights in the third quarter, resulting from an increase in prepayments. Excluding these impairments, our non-interest income decreased 2.1% from the prior quarter, primarily due to gains on the sale of other real estate owned that we recorded in the second quarter. This was partially offset by the higher level of wealth management revenue previously mentioned. Turning to Slide 14, we'll review our non-interest expense. On an adjusted basis, primarily excluding the items related to our tax settlement and prepayment of the FHLB advance last quarter, our non-interest expense declined by approximately $200,000 from the prior quarter with not much variance in any of the major line items. Combined with the higher level of revenue that we generated, our efficiency ratio improved by about 140 basis points. We continue to expect our near term run rate to be in the $40 million to $42 million range. Although we are continuing to integrate ATG and eliminate some costs from that business, as well as realize some additional efficiency enhancements from technology roll-outs, which could result in a slight decline in non-interest expense from the third quarter. Although the timing of when those items will impact our expense levels is uncertain so we're leaving our guidance at this wider range for now. Turning to Slide 15, we'll look at our asset quality trends. Our non-performing loans decreased $6.7 million from the end of the prior quarter, as our dispositions and upgrades exceeded the modest amount of new inflow we saw in the quarter. We had $3 million in net charge-offs in the quarter or 25 basis points of average loans. Half of these net charge-offs related to the charge-off of a specific reserve held against one of the three hotel loans in the Chicago area that we placed on non-accrual last quarter. We expect to sell this note during the fourth quarter with no additional loss. The other two loans remain in non-performing and there's been no additional deterioration or reserve requirements for either credit. We recorded a negative provision for credit losses of $200,000. In terms of the various buckets that make up the provision, we recorded zero provision for credit losses on loans due to improved asset quality and a negative $200,000 of provision for credit losses on available for sale securities. At September 30th, approximately 96% of our ACL was catered to general reserves. On Slide 16, we show the components of the change in our ACL from the end of the prior quarter. Our ACL decreased by approximately $3 million. The decrease was driven by a combination of charge-offs on specific reserves and favorable changes in the portfolio. This was partially offset by a small addition related to economic forecasts. On Slide 17, we show our ACL broken out by portfolio. Given the positive trends we're seeing, we brought down our coverage ratios in most areas of the portfolio. One notable area of increase in the quarter was in the lease financing portfolio. The increase was primarily due to an increase in net charge-offs in this portfolio compared to prior quarter. Net charge-offs for the equipment finance portfolio as a whole were 50 basis points in the third quarter, up from 36 basis points in the prior quarter. And with that, I'll turn the call back over to Jeff. Jeff?

Alright, thanks Eric. We'll wrap up on Slide 18 with a few comments on our outlook. I want to begin by providing some information about how we expect to be impacted by Goldman Sachs’ pending acquisition of GreenSky. We've had ongoing discussions with GreenSky. And at this point, we expect that new loan originations through the GreenSky partnership will continue through the second or third quarter of 2022, which will enable us to keep outstanding balances in this portfolio relatively stable over that period. After the new loan originations, and we expect the portfolio to decline by $400 million to $450 million during the following 12 months. Based on traditional repayment trends, we would expect the remainder of the portfolio to run off over the next few years after that. Although, we weren't anticipating an end to the GreenSky relationship, the work we have done in other areas over the past couple of years to improve our business development capabilities has put us in a better position to be able to offset the runoff of this portfolio. This includes the additions we have made and will continue to make to our commercial banking team, further expansion of our equipment finance group, the build out of our SBA lending business and the upcoming launch of a consumer loan origination portal on our digital banking platform. And we'll evaluate other fintech partnership opportunities as well, although nothing that would represent the same type of volume as the GreenSky program. Through the contributions that we think we can get from all of these other areas, we believe we'll be able to offset the impact of the GreenSky runoff. And when that process is complete, we'll have a more diversified loan portfolio, comprised of more full banking relationships that generate both loans and core deposits, as well as more fee income as our SBA loan production increases. We've recently made some enhancements to our business development and underwriting processes in the SBA area, which should result in more lead generation and loan production in the coming quarters. Looking more near term, our loan and deposit pipelines remain healthy and are increasing with each quarter. Within the community bank group, the loan pipeline is the largest it's ever been and was 46% higher at the end of the third quarter than it was at the end of the second quarter. This should lead to further quality balance sheet growth and continuation of the positive trends that we have seen in the business. Last year, we divested our commercial FHA loan origination platform, and we agreed in the sale that their servicing deposits would move to Midland. Earlier this month, we received $400 million in servicing deposits. These deposits should keep us comfortably over $7 billion in total assets and provide another $400 million of liquidity that we can redeploy in earning assets that will drive additional growth in our net interest income. Initially, we will put the majority of this additional liquidity in the investment security portfolio to support our net interest income. Although, as Eric mentioned, this will temporarily depress our net interest margin, which will offset to some extent with the repayment of the FHLB advances. Over time, we will put more money to work and funding our loan growth. As mentioned earlier, we have seen good results from the additional bankers we have added in higher growth markets in Northern Illinois and St. Louis, as well as higher level of productivity from our existing banking teams. At the beginning of the year, we mentioned that we had named a new market President in St. Louis and added two lenders, one to focus on SBA and the other to focus on agri business. Since that time, we've added two additional loan officers in the St. Louis market, with strong experience in commercial real estate, and added another member to the SBA team. In our Northern Illinois markets, we added a lender towards the end of last year and have since added two additional bankers with strong commercial lending experience. This initiative has given us the opportunity to pursue additional commercial clients, and we are winning a good share of these opportunities. With the larger presence we are building in these higher growth markets, and the more productive commercial banking team we are building, we believe we are fundamentally changing the organic growth profile of the company. This impact on our growth is going to be muted over the next couple of years, as we replace the GreenSky portfolio. But after that is done, we think we will have the ability to generate a higher level of organic growth, than we have historically produced, with more areas of the bank contributing to that growth. In closing, we are very pleased with how we are performing and the results we are seeing from our strategic initiatives. We are seeing solid, high-quality balance sheet growth. The composition of our deposit base continues to improve. Our reoccurring sources of fee income are increasing as our wealth management business scales. And the growth in our client base positively impacts our service charge and interchange revenue. And we are generating more revenue, while keeping expenses stable, which is driving more operating leverage. As a result, we are well-positioned to continue delivering a higher level of profitability in the future. And with that, we will be happy to answer any questions.

[Operator Instructions]. Our first question comes from Terry McEvoy from Stephens.

A question on the reserve. The GreenSky portfolio, given the strong credit profile, there was a 25 basis point reserve. And as you think about, Jeff, all the areas that you mentioned in terms of future growth, how is that going to impact the reserve ratio? And should we build in maybe some incrementally higher provisions in the latter part of next year, as part of the balance sheet transformation you ran through?

Yes. I think that's right as we sort of -- as GreenSky rolls out and we put more commercial real estate loans on the books, we are going to increase from 25 basis points, so 1% or more than 1%. So, yes, we would expect that we'll be recording some provision as we get into next year.

Okay. And then, the servicing deposits, the $400 million that came in the fourth quarter. As we think about next year, how much volatility would you expect to see within those deposits, given the elevated levels that you have today?

As it relates to servicing deposits, for the most part, they're fairly stable. There is a little volatility in it as loans are being rate modified. And so, there is some movement in deposits. But usually it’s, we take on more deposits in a short period of time, and then they'll come back. So, that sort of $400 million is sort of -- it's probably a baseline number. And at times it might be quite a bit higher than that. And sometimes it'd be at the end of the quarter and sometimes it'd be during the middle of the quarter. But I think that that's sort of a baseline that we think is going to stay. And then from there it will incrementally grow as their business grows and there'll be a little up and down, as they’re processing business.

Thanks. And then maybe one last question, if I could, for Eric. The FHLB pre-prepayment, could you just run through that data again in terms of the size of the FHLB advance, maybe what the interest rate was, and then the prepayment penalty and what you'd expect to save in terms of just interest expense going forward.

Yes. Terry, I'd be happy to. So we unwound $130 million of FHLB advances, $80 million of those were longer term advances that carried rates just to tick over a 2.5%. The other $50 million was a shorter term advance that was matched with the interest rate swap that we unwound as well and took a gain on. So when you look at the total $130 million, the interest expense going forward to save will be approximately $2.2 million annually. And then the prepayment penalty was $4.9 million, which was offset by the gain on the swap of $1.8 million.

Our next question comes from Michael Perito with KBW.

Hey, good morning. Sorry to hear about Leon, Jeff. I have a lot of good memories from the IPO and coming out of Effingham and I'm sure you do as well. So sorry to hear the loss. I wanted to spend a minute on the GreenSky partnership. So it sounds like you guys will have more time to replace the loans than I originally expected, which is great. Gives you guys some more flexibility there, but I apologize if I missed it. Can you maybe just walk through the yield impact, where the GreenSky loan yields generally were and where you expect releasing your term, most of the CRE that's going to replace it to kind of come on?

Yes. So the GreenSky portfolio is sort of between 350 and 375-ish, something like that. And it depends on the mix of the portfolio at any period of time, but sort of in that range. And I would say commercial real estate is coming in probably a little -- on average a little bit less than that. I don’t see a big difference in top-line yields.

And you mentioned kind of potentially pursuing other partner -- fintech partnerships to generate some volume, obviously nothing to the magnitude that GreenSky was. But just curious if you could give us some more parameters around what types of products interest you have? Is this largely going to be something more in the consumer arena, again, to kind of diversify the portfolio or is there other areas that you are looking at? Just would love any more thoughts or color you have that you’re willing to share?

Yes, so you know, more on the consumer side. As I sort of reflect back on the last 18 months and look at how that GreenSky portfolio performed, in some tough times it's performed very well. And I think having some diversification in consumer in a good way where we have some credit enhancements. So these programs that we're looking at also have some level of credit enhancements to help. Sort of not have one sort of large partnership with one company, but maybe a couple, do a few partnerships with some companies that we'll do business with, that isn't going to -- that'd be a sort of a quarter to 1/3 of where were at with GreenSky.

And then the -- just the margin impact of all this. I mean, I think the -- correct me if I'm wrong, Eric. The core NIM is like 317, I think in the third quarter. You're bringing on almost 0.5 billion of deposits from Dwight. That sound like they're going to go into securities at least initially, or most of it, and then over 18 months period, you have call it $0.5 billion or 350 to 375 loans that sound like you could actually replace fairly close, but certainly, maybe slightly below with the CRE production. So, I mean, is it fair to think of your NIM on a core basis likely being -- I don't want to say depressed, but I guess for lack of a better word, somewhat depressed for the next five quarters here until that captive Dwight fund has been a little bit more efficiently deployed and you guys have had a year or so to replace some of the lost GreenSky loans?

Yes. Mike, I think that's right. So I kind of think about our NIM ex-PPP as like that 324 number. And I think over the next couple of quarters with this influx in liquidity, we're going to see some compression on that number, somewhere between probably 10 basis points and 15 basis points as we -- and then see some upside maybe a year from now as we put some of that cash to work and continue to grow out the loan portfolio. But yes, in the short term from that 324 number ex-PPP, I think we'll see some pressure in that 10 basis point to 15 basis point range.

[Operator Instruction] Our next question comes from Nathan Race with Piper Sandler

A question just on kind of loan growth outlook maybe a little further out. Once the GreenSky loans start running off in the back half of next year, and with the pieces that you've put in place on the commercial bank side of things and within some other segments as well over the last several quarters, how are you guys kind of thinking about just net growth in the back half of next year? And again, I don't mean to get too far front of us, but maybe as you think about into 2023 as well, should we expect some growth or is the GreenSky runoff headwind going to be a challenge in that -- those may be flat it down a couple of years out from today?

Yes. We think we have a lot of good things going. That runoff isn't going to start until back part of next year. So the good thing is we've got almost a year to work, and we've laid a lot of good groundwork to sort of hopefully offset that runoff. So I think in the short term, we're going to be able to see some loan growth, because we've got good commercial pipelines and the GreenSky portfolio is going to be sort of get-hold at about the same level. So, I think we will see loan growth in the next year. And as we get to the back part of the year, as the GreenSky portfolio runs off, I'm not sure we're going to be able to match the runoff. So, I think the loan balances are going to go up, and then they're going to start to migrate down a little bit as we move into early '23, because the GreenSky runoff is going to be -- it's pretty quick, like $400 million in a year, $450 million. There is a lot of money to get to work. So, I do think, there will be some loan balance pressure in that first -- sort of first year, sometime in late '23 to late '24. Then the -- actually the GreenSky portfolio begins to sort of slow their -- the slowdown begins and we will sort of go out for another two, three years before it will all run away. So, that's the period of time that we are going to begin to build today to then hopefully hold that as steady as we can for that period of time. It will be challenging, because it's a pretty big number.

Right. Got it. Really helpful. I appreciate that, Jeff. And perhaps just turning to capital, would love to just get some updated commentary just in terms of the priorities. Obviously, you guys were active on the buyback in the quarter, which makes sense, just given the decline in evaluations during the quarter. But as you kind of sit here today, based on what you're seeing in terms of acquisition opportunities, either on the whole bank side of things or on additional platforms to supplement what you guys have, perhaps on the wealth side of things, would just love to get some updated commentary in terms of how you guys are thinking about excess capital, which I imagine should continue to build over the next few quarters here, at least, and kind of where the priorities shake out today?

Yes. I mean, our priority is to build our capital ratios, with the caveat that, if our stocks trade at evaluation where we can get one or less than a one year earn back, we are going to use some of our current quarter earnings to buy some stock back, sort of what we did in the sort of third quarter, make roughly $20 million, with dividend out 6, we bought 5 back. We retained 10. If our stock starts to trade at a better evaluation, we will not be buying our stock back. We'll retain all. And then we’ll continue to look for, I'll say, smaller sort of easy integration opportunities, such as ATG, right? And maybe it's not in the wealth space, maybe it’s in another business of ours. But really sort of small, sort of add-ons that are nice little add-ons, they don’t create a lot of disruption in the company. I'll say, over the last two years, not having M&A on the table has really helped us focus on running, I think, a better business, building pipelines and building a company that can grow organically, not just through M&A. And so, if we can get that done, which I think we're through, we're through all the building now it's sort of, let's continue building and watch some of the fruits of the labor and a company that has a lot of expertise on the buying side, I think it's a great combination as we get into like '23.

Definitely. And I apologize if you guys touched on this, but in terms of the outlook for having to provide for some growth as the GreenSky book runs off, starting in the middle part of next year, I guess what's kind of the outlook for charge-offs within that context in terms of the reserve trajectory going forward?

I mean, I think we would expect charge-offs to be anywhere from 10 basis points to 20 basis points is sort of where I would project charge-offs in, right? That's hard to do. And we're trending -- that number is trending in the right direction.

I’m showing no further questions at this time. I’d like to turn the call back to management for any closing remarks.

Thanks for joining everyone. We had a really, really solid quarter and look forward to speaking with everybody next quarter. Thanks.