Tim Laney - Chairman, President and CEO Brian Lilly - CFO Rick Newfield - Chief Risk Management Officer.

Riley Stormont - D.A. Davidson Chris McGratty - KBW Brian Zabora - Hovde Group Tim O'Brien - Sandler O'Neill Matt Olney - Stephens.

Good morning, everyone, and welcome to the National Bank Holdings Corporation 2017 First Quarter Earnings Call. My name is Mike and I will be your conference operator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session following the presentation.

As a reminder, this conference is being recorded for replay purposes. I would like to remind you that this conference call will contain forward-looking statements, including statements regarding the Company's loans and loan growth, deposits, strategic capital, potential income streams, gross margins, taxes, and non-interest expense.

Actual results could differ materially from those discussed today. These forward-looking statements are subject to risks, uncertainties and other factors which are disclosed in more detail in the Company's most recent filings with the US Securities and Exchange Commission.

These statements speak only as of the date of this call and National Bank Holdings Corporation undertakes no obligation to update or revise these statements. It is now my pleasure to turn the call over and introduce National Bank Holdings Corporation's Chairman, President and CEO, Mr. Tim Laney..

Thanks Mike, good morning and thank you for joining National Bank Holdings' first quarter earnings call. As usual, I have with me our Chief Financial Officer, Brian Lilly; and Rick Newfield, our Chief Risk Management Officer.

I am pleased to share that our pretax earnings were in line with our expectations and you'll also see that we realized a meaningful tax benefit during the quarter. Loan production was solid with our teams delivering a 20% increase in production over first quarter of 2016.

Our growth in deposits was primarily driven by a 6.3% increase in annualized growth in our low cost deposits. Non-interest income was in line with guidance, and expenses were flat to the fourth quarter. I’ll add that we feel very good about our momentum going into the second quarter.

Finally, as I turn the call to Rick, I’ll encourage you to pay particular attention to his comments on the diversity and granularity of our portfolio. While there is no doubt that our commitment to diversification makes growth more difficult, we continue to believe that this discipline will translate into more reliable returns over time.

Rick?.

Yeah thanks Tim and good morning everyone. I’ll jump right into covering our credit metrics and trends during the first quarter. Classified loans decreased from year-end 2016 and our outlook remains positive in the coming quarters for further problem loan resolution. Net charge-offs for the quarter were only $117,000 or 2 basis points annualized.

30 day past dues remain well contained at only 11 basis points with immaterial past dues of 90 days or greater. Non-accrual loans did increase somewhat with the non-accrual ratio moving from 1.13% as of December 31, 2016 to 1.2% as of March 31, 2017.

We are executing our resolution strategies on each non-accrual loan, and I expect that ratio to improve over the next several quarters. We are off to a good start relative to provision expense.

We recorded $1.8 million in the first quarter driven by loan growth, very low net charge-offs, and impairment taken on one of our three existing energy non-accrual loans. As Tim said, we delivered $197 million of loan originations during the traditionally slower first quarter, an increase of 20% over first quarter 2016.

Commercial loans represented 65% of the first quarter originations, non-owner occupied commercial estate was 19% and well diversified across a number of property types. And consumer, principally single-family residential loans was at 16%. Consistent with prior quarters, our new production was granular in nature.

Our outlook for asset quality remains favorable, driven by our disciplined adherence to our self-imposed concentration limits across industry sector and real estate property type.

Non-owner occupied commercial real estate is only 18% of our total loan portfolio and only 102% of our company’s risk-based capital, and no individual property type exceeds 4.1% of total loans.

With retail properties under pressure from store closings by major chains, I'll note that we have only 1.3% of our loans in retail properties with no exposure to malls.

Multifamily continues to be low at less of 1% of our loans, and we're well diversified across commercial industry sectors with most industry concentrations at 5% or less of total loans and all concentration levels remain well below our self-imposed limits.

Another example of how our concentration limits mitigate risk is evidenced by the agriculture industry, which remains stressed by low commodity prices. Our agricultural portfolio is only 4.6% of total loans and is well diversified across crop and livestock types.

Our experienced food and agro business, specialty team has maintained prudent client selectivity, leading to agricultural clients possessing low leverage and correspondingly low bank debt to assets minimizing any potential credit losses in the future.

With respect to provision expense, I'll say again that we are off to a good start with our first quarter results. And I will reaffirm the guidance I shared during our last earnings call relative to provision expense for the year.

Provision expense for the remainder of 2017 will cover net loan growth at about 1% of the net increase in balances with the net charge-offs for the full year in the 10 to 20 basis point range.

I remain confident that we'll continue to reduce our problem loans in the coming quarters as we work to exit or otherwise resolve those loans quickly as has been our practice. I’ll now turn the call over to Brian..

Great, thank you Rick and good morning everyone. As you saw yesterday's release, we delivered $0.30 earnings per share with return on tangible assets of 81 basis points and a return of tangible equity of 7.7%. We continued to make progress towards our financial goals of 1% return on tangible assets and a double-digit return on tangible equity.

There is a lot to like in the first quarter as we realized solid trends in loans and deposits, fee income, credit quality and expense control. In fact, we are delivering on our 2017 guidance provided last quarter and as a general rule we are reaffirming that guidance.

Included in the results was a tax benefit of 2.8 million or $0.10 per share from the realization of previously issued performance based equity awards. Recall that prior accounting reported these tax benefits directly to capital. Partially offsetting this benefit was almost $0.02 of net problem asset workout and OREO expense in the quarter.

I point this out as we've guided these expenses to a net zero for the year, and we see this as simply a timing difference and fully expect the net zero to even a net positive impact for the year from OREO gains more than offsetting the problem asset and OREO expense.

I should mention the economic assumptions inherent in the 2017 guidance, our markets continue to outperform the national averages and we see nothing to disrupt this trend. With regard to interest rates, recall that we included just 125 basis point move in June in the prior guidance. We got that one move in March.

The current consensus is for additional rate increases going forward. Given our asset sensitive balance sheet, we would continue to benefit from increasing interest rates. However, reflecting a level of conservatism in our forecasting, we’ve not included any additional rate hikes.

Loan growth has gotten off to an excellent start growing 13.1% annualized. The first quarter has been historically slower, so we are pleased with the start to the year. It’s worth noting that our originated loan book grew 17% annualized, led by the commercial portfolio growing a very strong annualized rate of 22.3%.

Our pipelines continued to be robust and we are reaffirming the full-year total loan growth guidance of around 20%. Turning to deposits, we had a good linked quarter-to-quarter average deposit annualized growth of 5.5%. This growth was led by 6.3% annualized growth of low cost transaction deposits.

Just as noteworthy is the fact that we grew average transaction deposits on a year-over-year basis 3.4%, while consolidating eight of our banking centers over the last 12 months representing an 8% reduction of our banking center footprint. In the second quarter, we are on pace to complete the four banking center sales that we mentioned last quarter.

These banking centers represent approximately 100 million in total deposits with half in time deposits and about 14 million in total loans.

We are reiterating our prior guidance of delivering total deposit growth for the year led by a mid-single digit transaction deposit growth while keeping time deposits flat after the reduction for the banking center sales. Fully taxable equivalent net interest income totaled 36 million with a net interest margin of 3.44%.

We are right on target with the guidance we’ve provided last quarter. We also guided that we expected to reach a linked quarter net interest income growth inflection point for the year. As interest income from loan growth is expected to more than offset the decreasing high yield 310-30 accretion income.

We are very pleased to be forecasting linked quarter growth for the second quarter and for the remainder of the year. We are increasing the net interest margin guidance range to 3.4% to 3.5% and keeping the earning asset guidance at 4.4 billion to 4.6 billion at year end.

Given the prospects for increasing interest rates, let me share a few comments on interest rate sensitivity. We continue to be about 4% asset sensitive given a 100 basis points parallel shift in the rate curve. We model a weighted mid 30% deposit data which continues to show a very conservative given actual deposit rate moves over the past year.

Given that the rate curve has not been moving up in an orderly fashion, we often get asked about the loan portfolio sensitivity. About half of the originated book or about the mid 40s percent of the total loan book will move with changes in short-term rate indexes such as the one in three month LIBOR, prime rate and others.

We’re beginning to realize the benefits of March's rate move and would welcome additional rate increases going forward. Rick provided the credit quality overview and our outlook for the rest of the year. Adding in our loan growth guidance results expected full-year provision for loan losses in the range of 10 to 13 million.

Non-interest income totaled 8.7 million, coming in at the middle of the first quarter guidance of 8.5 to 9 million. We reiterated our guidance of mid-single digit growth collectively for banking fees. In addition, we are on track to realize the second quarter estimated gain of 3 million on the previously mentioned banking center sales.

We continued good trends in non-interest expenses as they totaled 34.6 million in the first quarter basically flat with the fourth quarter. As I mentioned, the quarter did include netted expense of 760,000 related to problem asset workout and OREO.

We reiterate our full-year guidance of 136 million including the net zero impact if not better from the OREO and problem asset workout expenses. Regarding the tax rate, we are repeating prior year guidance with the forecasted 2017 effective tax rate in the range of 22% to 24% and a fully taxable equivalent tax rate in the range of 29% to 31%.

Capital ratios remain strong with 55 million in excess capital at quarter end using a 9% average ratio. One final comment would be that we have forecasted average fully diluted shares to be in a tight range of 27.7 to 28 million. And that concludes my comments..

Great, Brian thank you. Mike, why don't we go ahead and open up the call for Q&A..

[Operator Instructions] Your first question comes from the line of Gary Tenner with D.A. Davidson. Your line is open..

Hey good morning guys, it’s actually Riley Stormont on for Gary. Just wanted to get a little more clarity on loan growth maybe in terms of geographic breakdown and then sort of what competition you're seeing each market..

The good news is we continue to have solid growth in our core markets of Colorado and that Kansas City, Overland Park market of Missouri.

Texas has been a little slow in our markets of Dallas and Austin to ramp up this year a little slower than even we expected given the quality of those markets, but we're very excited about what we're seeing developed in the pipeline there.

In terms of competition, so many of the independent banks, community banks that are in our markets continue to be heavily focused on CRE, and that’s evidenced if you look at their balance sheets. That I would tell you in Kansas City Overland Park, the real competitors there are UMB and Commerce.

They both do a great job, obviously well entrenched banks in that market and yet tend to be rational, which we lag. They're smart when it comes to credit and they're rational on pricing.

In Colorado, it's a little bit of a mix, but we have been benefited in particularly over the last six months, and we see that trend continuing from some fallout of one of the larger national banks..

And then maybe just one more, I know last quarter you guys really highlighted in ATM rollout that you guys are planning in some markets, particularly the front range, just any commentary around that how that's going so far?.

I’ll tell you our expectation in terms of impact on the income statement is really neutral this year.

Having said that, I'm a little disappointed with the pace of our partner on that effort, they've run into a few roadblocks on their side, but they remain confident that we're going to be able to deliver and have those additional network points delivered here this year, and we're still pressing for this summer, so I think from a financial standpoint, neutral this year; from a timing standpoint, not moving at the pace that we were initially promised..

Your next question comes from the line of Chris McGratty with KBW. Your line is open..

Brian, a question for you.

Your loan yield of 401, I'm interested in where new loan production is coming on given the mix, I think it was on two thirds commercial, is new production accretive or is it still a bit of a drag to existing book yields?.

It’s actually right on top of it, Chris. I'm glad you asked that question as you've heard us talk before we’ve consistently been in at 60% variable in our production range, and this past quarter was actually 66% for weighted average yield of 4% EBIT.

And that you might recall it wasn’t that long ago we were talking about 3.6 [ph] as a new loan yield, so to your point, dilutive to that particular category. So we're real pleased that we are seeing in the details, the new production coming on that’s becoming equal to and we expect shortly to see it be accretive to that yield..

And if I could on the margin guys, it sounds like no more rate hikes are in your estimates. Can you remind us, Brian, the sensitivity if we do get a June hike? What each [ph] 25 means to spread based on your model..

It's a little difficult to do that on so many assumptions that get into it. So what I did play - so what I did repeat to you, we’re 4% asset sensitive. Now that’s a little over $6 million when you think about it on an annual basis. And inherent in those assumptions are certainly the asset sensitivity that we have plus about a mid 30s deposit data.

Looking as you look historically - at least recent historically, it's fun to look at our deposit costs, our interest bearing deposit costs only increased 6 basis points, while rates have moved 50 basis points, but actually 75 basis points most recently, but 50 in the last 12 months for practical purposes.

So I think we're a little conservative on the deposit side.

I think as you look at your guesses as to that 25 coming or not, I’ll try to give you the loan specific that you can model in our total loan portfolio would move about 40% and [indiscernible] short-term rate movements and so as LIBOR moves,c certainly prime rate gets very quickly in treasuries and other indexes we might have, but as LIBOR moves, you'll see that come through our loan yield first before anywhere else..

Hey Chris, I'm going to lever your question and Brian's response to thank our team mates for their continued focus on expanding our client relationships. We feel very good about the growth in our low cost transaction account business, and that's just part of a good relationship building with our clients.

And if you think about that growth in light of reducing our distribution network by 10%, it's even more meaningful, but more important than that I would tell you is we're seeing very nice momentum on that front, so to Brian’s point as you think about the influence of those low cost deposits, which come with core operating accounts that's just the nature of that business.

That's an attribute that we're going to get whether we see those interest rate hikes or not..

And Chris, just one last piece.

So I did provide some guidance of 3.4 to 3.5 on the net interest margin, as we currently model out with no rate hikes, we'd be in that type range through the rest of the year on a quarterly basis as our loan book, as our originated loan book yield is going to go up, but we're still running against some of that 31030 [ph] yield burning off..

Okay. If I could ask a question on the balance sheet in terms of leverage. You're still above 10% on the tangible ratio, and obviously it's going to be, I think if I heard you right, going to be funded -- used to fund 20% loan road.

Is there any change in terms of capital priorities, given I guess the environment we're in post-election and where your stock is trading..

Hey, Chris. Really nothing from our side. I think you’ve heard us consistently for four or five years here that we are very focused on the use of capital and the best return for that. We're certainly projecting a great use in our relationship banking and growing those, but there will be additional capital as excess there.

We've taken full advantage of buying in our shares and look, the market has given us at least the start of a reasonable share price from our perspective that becomes a little bit more attractive and expanded our own footprint. So, we will continue to focus on opportunities that best leverage that for returns..

Okay. Great. If I could ask one for Rick, I missed the number.

The CRE concentration, it was, I forgot the number as a proportion of capital, 165?.

No, Chris, 102% of our company’s capital..

Your next question comes from Brian Zabora from Hovde Group..

One question on the C&I loan growth.

How much of that is line utilization versus new credits?.

I can tell you the vast majority is new relationship expansion..

Okay. A question on the loan floors.

When you talked about that 40% reprising, does that go any higher with your -- as rates continue to go -- increase or do you have very little floors at this point on your loans?.

We’ve moved through a number of those floors, so that's pretty much our book. Yeah..

Okay. Right.

And just lastly, you've got a few sales as far as the branches, how are you looking at your branch network today and could we see additional trimming in later this year?.

Look, we're constantly looking at the performance of each of our banking centers, each of our profit centers for that matter and we look at the contribution of that banking center or those each banking center and each profit center, relative to the potential or the opportunity in the market it serves.

And so you can imagine our focus is on those lower performing profit centers, where there's lower potential. We think we've identified the group that really, in our operating model, didn't have the opportunity or the potential to contribute within our expected timeframe and we’ll continue to monitor the rest of the profit centers on the same basis.

So I would tell you it's very dynamic and we're going to continue to have accountability and that accountability will drive further actions..

Your next question is from Tim O'Brien from Sandler O'Neill..

Hi. Good morning, Tim. Good morning, guys. Hey, just a follow up quickly for Rick.

Rick, you said 1.2% of CRE was retail or did you say 1% -- 1.3% of total loans was retail CRE?.

Yeah. Tim to clarify, 1.3% of loans would be --.

Total loans, do you have the dollar amount of that retail?.

It’s just a little over 30 million -- between $30 million and $40 million..

Is any of it on watchlist or classified?.

Actually no..

Okay. And I’m sure -- how often do you kind of look at that and stress it and evaluate it..

We conduct quarterly portfolio reviews really across our entire loan portfolio, Tim. So we're looking at each of those loans on a quarterly basis..

Rick, on maybe opening up a box here that Brian will want to close quickly, but because we’re not in a position in this meeting to share details, but you want to talk about, while we’re not required to conduct stress tests, you ought to explain to the group how we do internally stress our own portfolio..

Sure, Tim. And as you say, it’s not a regulatory requirement. The guidance is simply, do what you believe is best, given your loan portfolio and characteristics.

We started doing semiannual stress tests where we look at a very adverse scenario where default rates are very high, driven by unemployment, lowering housing price index, GDP actually falling back versus any kind of growth along with just a stress on the underlying assets.

We did leverage the guidance as provided for the CCAR stress testing and actually are a bit more conservative on our asset values when we conduct that. And we think that's just a good practice as part of our capital planning..

And the bottom line is when we do that work and factor in those very severe loss levels, we still operate as a well-capitalized bank post that kind of an experience and Tim, I know that's a lot more than you’ve asked for, but I'd like to get to a point where we could even provide more transparency around that testing and what we do.

Again, it's not a regulatory requirement, but we think it speaks to the quality and the importance of the diversity of the portfolio..

It can hurt you to talk about your credit outlook and what you do to manage that part of your business, so that's all good stuff. Speaking of which, sticking with credit, did not hear the word energy mentioned even once on the call.

Can you give a little bit of color in terms of that segment of your business and what opportunity and focus is going to be here through the remainder of the year I guess?.

Sure, Tim. I actually -- I hate to correct you [Technical Difficulty] energy only in the context of one of our existing non-accrual loans..

Oh, that's right, Rick. I heard, yeah..

But we continue to be at roughly 86% pass rated on our energy book. We’re not expanding that book currently, but as we’ve mentioned before, we certainly did see opportunities with existing clients that see the need to better utilize their unused commitments.

With respect to three non-accruals, I just point out that we’ve had no new non-accruals over the last year, really since first quarter of 2016 and those three are the residual from problems that we identified back in 2015..

Are you guys actively lending in the space again and can grow that part of your business?.

Tim, it’s really a focus on a set of very high quality clients with deeper relationships.

The challenge we have is that almost all of them were able to successfully raise large tranches of equity in the downturn and if anything we've seen our senior bank debt come down, many of them are sitting on the sidelines waiting for opportunity to acquire assets at the right values and until that happens, I would expect our exposure in that space to either maintain current levels or even to climb slightly..

The next question is from Matt Olney from Stephens..

I want to go back to the discussion of the core loan yields. I think I appreciate that the new yields are coming on similar to the overall book around 4%. It sounds like there's a few floors out there, the floors are pretty moss at this point.

I guess I would have guessed that there would have been more of a lift in the core loan yields in the first quarter from the December rate hike.

Any more color you can share as to why the core loan yields only lap a few basis points and what would the outlook be on just that loan yield in the second quarter?.

Yeah. Look, that's a good insight Matt. It is happening underneath. And what you see in the 398, specifically, you're talking about a non-310 30 loan yield going from 3.98 to 4.01. And say unless it's three basis points and maybe you'd expect given the guidance I gave that we would be closer to the 6, 7, 8, 10. We are seeing that in our coupon rates.

Just to be clear, there are the coupon rates, but as you know there's a number of other things that happen in fee income. And I'd also point out, it’s not fee income, but fees. I’d also point out that within that non-310 30, there is still a, I’d use the old terminology, the [indiscernible] portfolio of a couple of hundred million dollars.

That continues to throw off some accelerated discount pick-ups. I mentioned that because we didn't get much in the first quarter, but we did get a chunk of that in the fourth quarter.

So the 398 that you saw in the fourth quarter was a little bit higher, because of that and it's dilutive the quarter to quarter change that you would have expected from the 25 basis points. But as we project out on the quarters coming up that coupon underneath is increasing and we expect that we'll see that in that yield..

So by this point, would you consider the 1Q level of fees more of a normalized level and it should increase or was it unusually low at this point?.

No. Probably more normal, where the fourth quarter was a little higher. Yes..

All right.

So are you saying that the core loan yield that those should expand more in 2Q than in 1Q?.

Yeah. We're going to see a benefit from the March move..

Okay. Thanks for that. And then on the security side, it looked like we saw a little modest increase on the end of period securities balance, didn't quite see on the average piece.

I think this is the first time we've seen this in a while, any color you can share as far as the securities book outlook?.

Yeah.

Look and maybe I'll point out a couple things on that spot versus the average, you'll also note that our loan deposits or excuse me our loan growth, which grew at 13% on a spot basis grew less than 1% on an average and so the average earning assets are going to see a nice pickup as we go from the first to the second quarter, which will help a number of that guys on that net interest income.

Now back to the investment portfolio, we saw an opportunity with a deposit of activity that Tim has mentioned in our book to go ahead and place some investment securities on the book. And not a lot, we haven't done anything in four years.

But we had just under $100 million of MBS because we still like the cash flowing from that and we’re able to pick up the yield of 2.6%.

We saw that as an opportunity here in the first quarter and as I guided last time, we didn't see that we were going to recur doing that as the quarter goes on, probably see that book continue to come down in our forecasting for the second, third and fourth as we fund the 20%, around the 20% loan growth that we've guided..

Okay. That's helpful.

And then finally Brian, I'm sure you mentioned and I just can't find in my notes, the outlook for core fee income in 2017, what was what outlook?.

Yeah. We were looking for the mid-single digits on a year-over-year growth and look, we were really pleased that we had the first quarter, you might recall like we gave specific guidance of $8.5 million to $9 million, we get to that 8.7 in the first quarter was right on top of that.

But on the full year, look at it as a year-over-year on the mid-single digits..

And specifically what was the interest rate swap impact in the first quarter?.

We picked up a little bit on our commercial clients back to back, not as much as we're expecting. We certainly have a lot more conversations in that. So, it was a couple of hundred thousand dollars and not much in the marks for the ineffectiveness that you have to take on those things.

But, so really a pretty quiet quarter there versus last quarter, you saw a big pick up that's going to reverse the number of the rate moves for 2016 in total..

The next question is from Chris McGratty from KBW..

Yeah. Thanks for taking the follow-up.

Brian, just on the tax guidance, given the noise in the first quarter, I can probably do the math offline, what should we be thinking about just for the individual quarters for the back half of the year, just adjusting for the noise in the first, I know you gave full year guidance?.

Yeah. Look, the effective tax rate without the fully tax effective, we feel pretty good on a quarterly basis to be at 22% to 24%.

And then when you grossed it up for the fully tax equivalent, that 29, 31%, I will tell you that this new accounting standard for divesting of share based compensation will move -- continue to move that around a little bit..

The next question is from Tim O'Brien from Sandler O'Neill..

Hey, one quick follow-up. You guys ended the quarter with a loan to deposit ratio of just under 75%.

Does that give you an advantage in this rising rate environment? Looking out at some of your peers that have much tighter loan to deposit ratios, does that -- is that something you can leverage and how do you see that opportunity to leverage that core deposit base and that funding base in the marketplace to the maximum advantage of shareholders..

Well, Tim, it’s a great question. We absolutely hold ourselves accountable for leveraging that advantage. Said another way, we clearly see it as an advantage.

And I would say certainly coupled with the fact that we see a number of competitors that have over concentrated in certain specialty, certainly we all have seen a number of banks that have broken 300% of capital in the CRE space.

We think to the extent that we're willing to work with clients and with CRE space, our capacity gives us the ability to be very selective as it relates to the credit structure and pricing. And again, to take advantage of situations in the market where other banks are having to retreat.

So it's a topic we spend a lot of time internally focused on and I don't know if there's anything Brian or Rick you would add. That's the best answer I can give you..

No. Look, we like that. It's a source of how we’re going to drive to that 1% of ROAs, getting that loan to deposit ratio up to closer to 90% and you can see there's a lot of runway and with the success we're having with deposits, that creates even more.

So we're excited to have that opportunity and that will continue to move the net interest margin and offset the 310 30 to grow from here as we've talked about. So it's obviously a part of that strategy for cash flowing out of the investment securities to allow that to happen. So it's a good point too..

Tim, the other point I would add, it really relates to safety and soundness. I think I look probably as many failed banks or troubled banks during the Great Recession is anyone and if there were two common denominators, one is, they tended to be over concentrated in one loan type often outside of their own footprint.

And secondarily, they were dependent on non-core deposits for funding.

So you'll continue to see this intense focus on holding ourselves accountable for capturing the full relationship of our clients, focusing as much on that treasury or cash management business and serving the operating account needs of both small and medium sized businesses as we focus on the other side of the balance sheet.

So we are big believers in the importance of having that core component of the business and reward our bankers accordingly..

Thank you. And I am showing we have no further questions at this time. I will now turn the call back to you Mr. Laney for his closing remarks..

Thank you, Mike. I just want to thank everyone for joining us today. Please don't hesitate to follow up if you have any additional questions. Good day..

And this concludes today's conference call. If you would like to listen to the telephone replay of this call, it will be available beginning in approximately two hours and will run through May 5, 2017 by dialing 855-859-2056 or 404-537-3406 and referencing the conference ID of 92242744.

The earnings release and an online replay of this call will also be available on the company's website on the Investor Relations page. Thank you very much and have a great day. You may now disconnect..