Good afternoon, and welcome to the Alerus Financial Corporation earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an open opportunity to ask questions. Please note this event is being recorded. This call may include forward-looking statements, and the company's actual results may differ materially from those indicated in any forward-looking statements. Important factors that could cause actual results to differ from those indicated in the forward-looking statements are listed in the earnings release and the company's SEC filings. I would now like to turn the conference over to Alerus Financial Corporation President and CEO, Katie Lorenson. Please go ahead.
Thank you. Good morning, everyone, and thank you for dialing into our call today. Joining me today in Minneapolis is Karin Taylor, our Chief Risk Officer, and Al Villalon, our CFO. I am proud to announce that during the quarter, we added Jim Collins, a seasoned bank leader in the Twin Cities, to our executive team as our Chief Banking and Revenue Officer. Jim will lead and support the continued new client growth and existing client expansion while building on our recent successes in adding talented bankers and advisors in the Twin Cities and throughout our footprint. On July first, we closed on the acquisition of Metro Phoenix Bank, the 25th acquisition in the company's history. We are pleased to have Metro Phoenix join the Alerus franchise. The Phoenix-Scottsdale MSA is one of the fastest-growing areas in the country over the past five years.
Metro Phoenix Bank, started by Steve Haggard, is a well-established, high-growth, and highly efficient bank with a strong commercial presence. With the approval and closing, Steve has now assumed leadership over the entire market as the Arizona President. Together, our combined organizations are one of the largest community banks and SBA lenders serving the market. This acquisition significantly increases our presence in Phoenix-Scottsdale and demonstrates our commitment to growth and client expansion in Arizona. Looking back on the quarter, we reported EPS of $0.53, which included a $0.05 negative impact related to merger expenses. We continued to experience good loan growth as loans grew 17.3% on an annualized basis ex PPP. Growth was across our products, but highlighted by additions to our commercial client base, a proven catalyst for growing our retirement business.
Year-to-date, new plan sales in the retirement division are nearly 50% higher than last year, while lost plans have remained at stable levels. Our wealth management division produced at record levels of new revenue, which drove a linked quarter increase in revenue despite the quarter being the worst mid-year market results in over 50 years. We experienced outflows in deposits, which were largely linked to seasonal declines in core operating accounts of public entities. Excluding PPP, our underlying core NIM expanded 9 basis points to 2.96. Our mortgage originations on a year-over-year basis declined at a level greater than originally anticipated, as 30-year mortgage rates quickly rose from 3%-6%.
While we are coming off peak originations of $1.8 billion in 2021, we never overbuilt on an infrastructure, and we channeled our one Alerus culture and shared resources across business units to get that level of business done. While the mortgage industry is rapidly changing, our focus has always been on the purchase market due to our long-standing relationships with realtors and builders, especially in the Twin Cities. As our competitors reposition and downsize, this will present opportunities for our top-tier producers to pick up more market share in the purchase market. Despite the headwinds in mortgage, we continue to execute on our one Alerus strategy as we continue to grow the number of plans and participants in retirement and wealth management. We continue to deepen our relationships within our large client base on our platform.
Today, we remain uniquely positioned in the banking sector as we continue to generate over 50% of our revenues from fee income, the majority of which is recurring annuitized revenue with minimal capital allocation and no credit risk. Our loan portfolio remains well-diversified, and credit is very strong as we continue to experience minimal past dues, low levels of classified loans, and negligible charge-offs. In addition, as a non-CECL bank, we stand with a healthy allowance for loan losses at 1.66% of total loans. Expense management remains a key focus, with core expenses flat to the previous quarter and down nearly 6.5% compared to the second quarter of 2021. I wanna thank all of our employees for their hard work and dedication and welcome the Metro Phoenix Bank employees to our company.
Our momentum in attracting and retaining talent, as well as client growth opportunities across our diverse product offerings, supported by strong common Tier 1 capital levels of 14.19%, has Alerus well positioned to continue to grow, expand, and deliver strong returns to our shareholders. With that, I will hand it off to Al to discuss the financial details of the quarter. Take it away, Al.
Thanks, Katie. I will start my commentary on page 14 of our investor deck that is posted in the investor relations part of our website. For the second quarter of 2022, reported average loans increased 4.0% on a linked quarter basis. Excluding the impact of PPP, average core loans increased 4.6% on a linked quarter basis. The increase in core average loans was driven by a 9.2% growth in C&I and a 5.4% growth in consumer. Within C&I, we saw a pickup in loan production along with an uptick in utilization rates as clients continued to tap into their existing lines. C&I utilization increased from 28% to 32% during the quarter. At the end of the first quarter, we had approximately $6.9 million of PPP loans outstanding.
Average deposits declined 2.7% on a linked quarter basis due to seasonal decline in interest-bearing deposits. The decrease in interest-bearing deposits was due to seasonal decrease under our public funds. We typically see a drawdown of these public funds in the summer with an increase happening during the fall usually. Turning to page 15. Credit continues to remain very strong. We had net charge-offs of 7 basis points in the first quarter compared to 3 basis points of net recoveries in the prior quarter. Our non-performing assets percentage was 16 basis points compared to 15 basis points in the prior quarter, while our allowance is 1.66% of period-end loans. On page 16 are some key revenue metrics. On a reported basis, net interest income decreased 5.1% on a linked quarter basis.
Excluding the impact of PPP, net interest income increased 6.9% due to higher loan growth and higher net interest margin. Non-interest income declined 0.8% on a linked quarter basis due to lower retirement revenues offset by improved mortgage and wealth management. I will go into detail about those segments in later slides. Turning to page 17. Net interest margin was 2.98% in the first quarter, an increase of 15 basis points from the prior quarter. Excluding the impact of PPP, our core net interest margin was 2.96%, an increase of 19 basis points from the prior quarter. Core net interest margin benefited from higher investment portfolio yields along with higher loan yields from our commercial real estate portfolio, offset by lower yields from our C&I portfolio. Turning to page 18.
$706 million, or 37% of our loans are floating, as you can see at the top of the slide. As you see, almost all our variable loans are above their stated floors or have no floors. On the bottom left, you can see a waterfall of our net interest income and net interest margin that our volumes and rate, as previously mentioned, positively typically impacted our results. On page 19, our core funding mix remains very strong. We saw a small increase in our deposit costs due to rising interest rates. Given the recent rise in interest rates, we do anticipate our deposit costs to rise now. We are currently anticipating our deposit beta to be between 25%-30% in the quarter, which is still lower than we previously anticipated. On page 20, I'll provide some highlights on our retirement business.
AUM declined 10.1% due to mainly to market volatility, with S&P being down over 16% in the quarter and the aggregate bond index down 5%. While AUM declined, we did see the number of participants increase to approximately 450,000 versus 445,000 in the prior quarter. Revenues declined 7.7% from the prior quarter, mainly due to lower asset amounts. Turning to page 21, you can see highlights for our wealth management. Similar to what we saw in retirement, AUM declined 9.5%, mainly due to the market again. Despite the decline in AUM, revenues increased 4.1% from prior quarter, mainly due to a custody deal that was won at the end of the prior quarter. Strong new production by advisory business and higher transactional revenues.
Turning to page 22, I'll talk about our mortgage business. Mortgage originations increased approximately 44% from prior quarter as we rebounded from record low housing inventories in our main markets. Despite the challenging market, our current volumes are over 22% higher than similar time period in 2019. Lastly, turning to page 23 is an overview of our non-interest expense. During the quarter, non-interest expense increased 5.0%, mainly due to higher incentive compensation related to revenue-related activities, mainly an improvement in mortgage. We also saw an increase in professional fees due to higher M&A expenses in the quarter. Other expenses decreased as a result of lower provision for unfunded commitments as we saw a pickup in commercial utilization. Marketing expenses increased quarterly due to a typical seasonal pickup. Now I'll provide some forward-looking guidance.
First, I'll comment on the Metro Phoenix Bank, which we closed on the acquisition July first. As of June thirtieth, Metro had the following balances. They had $84 million of cash, $38.5 million of investments, and $277.6 million of loans. We are assuming $354.5 million of deposits. We issued 2.68 million shares of total stock for consideration of $63.8 million for the purchase of Metro. After the purchase of Metro, we do not anticipate a material impact on our tangible common equity or capital ratios as a result of the transaction. Now I'll provide guidance for the third quarter. On a standalone basis, we're expecting average loan growth to be in the high single digits% on a linked-quarter basis.
For Metro, we're expecting double-digit loan growth on a linked quarter basis in that loan book. Overall, we expect some net interest margin expansion, but expansion will be limited as we anticipate rising deposit costs given rising interest rates. Again, we are currently expecting our deposit beta to be between 25%-30%. With Metro, we expect net interest income to grow in excess of 20% from the prior quarter. We expect overall fee income to be down low single digits, mainly driven by continued decline as we expect overall originations to be under pressure due to seasonality. Given no market growth, we expect wealth to be up similar as the second quarter and retirement to be flattish. On a standalone basis, we're expecting expenses to be up mid-single digits, mainly due to the merger-related costs.
Excluding those merger-related costs, we expect core expenses to be flattish. With Metro, we expect Metro to increase our core expense base by mid-single digits. Lastly, we expect credit to remain strong and continue to expect net charge-offs to be below historic levels. With that, I'll now open it up to Q&A.
Absolutely. We will now begin the question-and-answer session. To ask a question, you may press star followed by one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from the line of Ben Gerlinger with Hovde Group. You may proceed.
Hey, Ben.
You know, the offset of this, I think there's been a lot of rumor and a little bit of speculation, and hopefully we can put anything to bed here. I hate to start the Q&A off on this somewhat somber tone, but Al, after you threw out the first pitch, did you cheer for the Twins or for the Yankees?
I cheer for baseball in general, Ben. I appreciate the question there. I am, my roots are from New York, but I've been in the Twin Cities for a long time. I support baseball in general. Whoever won that game, I'll support them.
Yeah, of course you cheered for whoever won. That would be an issue. Anyway, when you guys think about the market as it is today, obviously there are different segments within the company and they're pulled at different market forces. The core bank should have higher rates coming forward. You should have a stronger revenue. With that, it gives you an opportunity to reinvest within the broader business overall. When you think about priorities and internal investment, where would you put that next incremental dollar? Is it or in one segment, that technology investment priority or anything to that degree that would allow Alerus to be better set up for the next decade?
Mm-hmm.
Great question.
I think, Katie, yeah. I think Katie can take that one for sure.
I'll take it, Al. Thank you. Good question. You know, I referenced in my opening comments the commercial banking being the catalyst for many components of our company. As we focus and laser in on where we bring the most value to clients, we are very much bringing obviously Jim Collins on board, who is a proven leader and grower in commercial banking. That is where we're focusing on growing our franchise because it does give us the opportunity to expand on the fee income at a very high level of success.
Got you. Okay. It's a bit of a lead into a broader relationship if I'm kind of squaring that circle a bit here. My follow-up really kind of stems to the next kind of bigger picture question going forward. Is there any opportunity that you can trim out more expenses throughout the franchise overall, assuming that kind of mortgage doesn't move? Or is it really dependent upon kind of spending rates don't change much, mortgage shouldn't change much, i.e., compensation doesn't change much. Is there anything from a structural perspective from an expense within that that could improve overall profitability?
Yes.
I can take that one. Go ahead.
Sure. Go ahead, Al.
You know, Jim's been on board here now for about 60 days, and he and I have been syncing up on various things, and I've been here for about a little over six months. You know, as we kind of look at the structure, you know, we do see that there's opportunity to kind of rightsize some expenses, but also too, we're dealing with an inflationary environment right now is that you know, we are dealing with some of those inflationary pressures that are you know, everybody else is dealing with too. You know, for us right now, trying to keep expense flattish in this core, high inflation environment is you know, our goal right now.
As we look to the long term though, you know, I think Katie's going to comment here as well, you know, and probably build on this, is that, you know, we're trying to build a structure too that's going to allow us the community to grow for the long term because there's so much opportunity for us as a you know, as I'm kind of keep working every day and kind of understanding the potential of this, Alerus story. You know, Jim and I and everybody here see that there's so much runway for us to grow and some of that growth is require investment as well.
That's what we're kind of trying to work on right now is that what is the investment we're gonna make to help support that growth for not just the short term but for the very long term.
Yeah. I would say that.
Katie, you wanna add anything to that?
Yeah. Thank you. A key focus for us the past three to five years has been on a couple of things. It's been on developing the credit infrastructure as well as bringing on technologies that allow us to be more efficient to grow. Our opportunity to scale without adding overhead is impressive. Under Jim's leadership and our ability, as you can see by our past recent successes in bringing on talent, we think is the real catalyst to support that growth going forward at a higher level than what we've been with the right credit and operating infrastructure behind it.
Gotcha. That's helpful. If I can just sneak one more in. I know that kind of the core bank is a bit of the gateway to a full encompassing relationship. I don't think that you guys are on the hunt for necessarily a full bank acquisition today. But if you were to think about any incremental lender or any type of lending, whether it be a banker or a team of banks or a team of bankers, is there any geography or any lending class that kind of is top of the list? I know it looks like much of anything is for high caliber talent, but if you could kind of write the script on who the next incremental banking hire would be, what would be that characteristic?
Sure. Absolutely. C&I bankers, mid-market, strong treasury management, and we think we've got great opportunities here to do so in the Twin Cities. In regards to full bank acquisitions, you know, we continue to look, and we keep that funnel pretty wide at the top as we look at, you know, businesses that can add scale or just bring a client base that gives us that opportunity to expand relationships. Certainly talent acquisitions, which we've done a number of, continue to be one of our highest priorities.
Gotcha. I appreciate all the answers. I'll step back. Thank you. Thanks, Ben.
Thanks.
Thanks, Ben.
Thank you. The next question comes from the line of Jeff Rulis with D.A. Davidson. You may proceed.
Thanks. Good morning. Question on the deposit flows. You know, I think the pandemic clearly disrupted kind of seasonality and as you guys spoke to, I think you mentioned that I just wanna check in on the confidence that, you know, you do see those public inflows. Maybe you've seen some quarter to date, but wanna get a sense for the other part of that is there's seasonality, but there's also some changing deposit behavior and deposit retention. We're seeing some outflows for the industry. Just kind of your take on confidence and seasonality as well as are you seeing some kind of rate chasing activity as well? Thanks.
Yeah, thanks for the question, Jeff. You know, we actually just did a study on the seasonality approach, and it has been over the last, you know, several years, pretty much tried and true that those public funds, you know, go from us in the summer. That's why I felt comfortable talking about that on the call today because, you know, we're starting to see again the slight pickup in the deposits, you know, from the public funds because it's just that, you know, the 2 Q, you know, a lot of those public funds are being used to pay for, you know, teachers. You know, they're being paid out during the summer, and then they start building back in, you know, coming the fall. We feel comfortable about that.
You're right, though, that there is some seasonality and we're watching it very closely. Especially, you know, with the Fed hike that just happened, you know, we're just gonna be watching behavior very closely. You know, that is definitely on our, you know, on our radar.
Outside of that public fund movement, are you seeing some of the other regular way customers kind of chasing rates? Or is there any piece of the deposit mix that you've seen that change quarter-over-quarter?
No. No, Jeff, we actually haven't. I mean, the thing that's been really impressive here is how sticky our customer base is right now. You know, we've been able to, you know, lag our deposit costs right now, and it's been. There hasn't been a lot of movement out there, and that's why, you know, when I said that we're expecting our deposit beta to pick up, it's still below what I would have anticipated to be in a rising rate environment like this. It's been a pleasant surprise for us about to see how, you know, for me, I should tell you, because I've only been here for six months, how sticky our customer base is.
Got it. I want to circle back on the expenses. I know you tackled kind of some structural big picture efficiency type questions. Could you remind us of the timing now of where you think Metro Phoenix Bank that the conversion of that occurs and what maybe could be carved out on the you know targeted cost saves with that and timing?
We're targeting conversion in the later part of third quarter this year. Sometime late this third quarter, we're gonna conversion. You know, we are still anticipating the cost saves that we've originally disclosed, but you know, it's gonna be. There might be just a little bit, you know, plus or minus in that range, I'd say just a little bit.
Okay. Lastly, just maybe housekeeping related to the deal. Any kind of adjustment on goodwill or tangible book dilution, given sort of rate movement we've had? I don't know if the marks change, but basically at announcement, is there any update on goodwill or tangible book impact?
Yeah, actually, we just got those in just recently, and I'd say that there's really no change to that, you know, and that's why I put that highlighted in the guidance that we still don't anticipate, you know, any material impact to our tangible common equity or capital ratios. You know, we just got those marks in.
Okay. I'll step back. Thank you.
Yeah. Thank you, Jeff.
Thank you. The next question comes from the line of Nathan Race with Piper Sandler. You may proceed.
Yeah, hi. Good morning, everyone.
Hey, Nathan.
I appreciate the
I appreciate the guidance for you know retirement and benefit services revenue in 2Q. But thinking in longer term, I'd love to get kind of an update just in terms of just with the natural attrition within you know our AUM, AUA, how you guys are kind of thinking about the opportunity to add clients organically with your sales efforts. Then also just given how you guys have kind of increased the capture rate as plan participants enter retirement, you guys onboard those assets into wealth management, and kind of how that translates to you know future growth you know after 3Q, assuming you know equity markets kind of stabilize from here?
Katie, you want me to take that one or you wanna take that one?
No, I'll start, and then you can fill in, Al.
Yeah.
Good morning, Nate. Thank you for the question. In regards to retirement, as I mentioned in my opening comments, we are seeing a higher level of new plan sales than we have in previous years, as well as reduced levels of attrition. Many of those plans are not asset-based, the new plans. Many of them are on a per plan, per participant base. We've got a couple of tailwinds, I believe, certainly the market on the asset-based fees, as well as on the new plan basis. As those plans grow, our fee income naturally increases as participation in the plan increases. That, that's one catalyst of the growth. Commercial plan expansion.
As we grow our commercial banking client base, our typical success rate with commercial clients is about 50%. Also, getting the retirement plan over time, it doesn't always come day one. Certainly as the relationship develops, we absolutely get a chance to talk to that client about the services that we can offer, and half the time we end up getting that plan to transition to us. Again, the retirement business is a significant feeder system to our wealth management business, and more than it has ever been in the past. We've always been good at capturing rollovers on a reactive basis.
Over the course of the past year or two, we've been much more focused on being proactive with that participant base, engaging with those individuals that are potentially nearing retirement or are just in a place where financial planning is something that they're thinking about and something that they're in need of. That opportunity within that division is significant for building out the rest of our fee income opportunities in the future.
Yeah. I think, as Katie summed it up, gave a great overview there. The only thing I can do to add to that is that, you know, our leader in the retirement business, Forrest Wilson, he's really, you know, stepped in and really done a great job in that commercial client expansion story there. You know, he's identified opportunities for us to really kind of get that overlap and kind of synergies of, in terms of deeper penetration with our clients. You know, we've already seen some initial success in that commercial expansion strategy. You know, he's targeted some opportunities for us, and we're gonna continue executing on that, you know, probably, you know, for foreseeable future.
Mm-hmm. Got it. Just going back to what Katie said initially in terms of kind of the mix of change and clients being added. Just, I imagine that also reduces kind of the market sensitivity of this revenue source going forward, if I'm kind of hearing you guys correctly.
Right. It does. Most of the new business is not all tied to asset base. Some components of it is. Trust and custody, of course, would be. Advisory services would be. But the administrative and record keeping tend to be more tied to just per plan fees and per participant fees.
Okay. Great. Then if I could just kind of switch gears and kind of think about overall balance sheet dynamics. You know, with Metro Phoenix adding, you know, roughly $450 million or so in earning assets during the third quarter, how are you guys kind of thinking about overall deposit flows from here? It sounds like you guys are, you know, going to compete on deposit pricing going forward. But is it kind of fair to expect kind of the earning asset base kind of stabilizes around $3.5 billion from here? Or how are you guys kind of thinking? That would, you know, in turn kind of support margin expansion just given kind of the assets and sort of nature of your balance sheet?
How are you guys kind of just thinking about the overall balance sheet, flow and just level going forward?
Yeah. Thanks for that, Nate. This is, you know, as we think about the balance sheet right now, I mean, we, you know, I highlighted in there, I mean, we are seeing really strong loan growth. You know, just on a stand-alone basis, you know, we're thinking high single digits there on a linked quarter basis. Metro, you know, talking to that Steve Haggard down there, you know, we are really excited about the opportunity he, you know, and we're expecting that book to grow in the double-digit range, as well. You know, our preference is loan growth right now. You know, we have that 14.19% Tier 1 capital, common Tier 1 capital.
You know, we have a lot of dry powder to support loan growth and, you know, we'd like to, you know, keep supporting that loan growth. Right now from an investment portfolio side though, you know, we're kind of letting some of that stuff mature and, you know, help continue to support the loan growth there and remixing the balance sheet just a little bit. You know, with that loan growth we're putting on to, you know, we're gonna have, you know, we're expecting deposits to come and help support that as well from a funding standpoint.
Okay. Yeah. Just given the ongoing earning asset mix optimization with, you know, loan growth-
Yeah.
Remaining strong here into the third quarter and just given kind of the growth in assets and the nature of the balance sheet, is it kind of fair to expect the margin to get kind of north of 3.20% and perhaps even north of 3.50% in both the third quarter and fourth quarter respectively this year?
You know, on that we, you know, NIM is always kind of an output function for us. You know, we are expecting growth in that right now. The question right now as we are, you know, we're pretty much having pretty frequent discussions on deposit pricing because we'll monitor it given the rapid rise in rates. You know, it's hard for us to really say where it's gonna pinpoint. You know, the one thing I can say is that with Metro coming on board, though, you know, there's gonna be an uplift to our NIM, especially because, you know, their margins are definitely higher than us, you know, probably in the tune of, I wanna say 40-50 basis points.
You know, if you look at their year-to-date performance for us and stripping out PPP for both companies, you know, so they definitely have a lot higher margin for us and that's gonna help our margin as well. Again, one thing, you know, what I'm tempering is just a little bit now that, you know, given what Jeff had asked about previous questions that, you know, we have a lot of rise in rates. There's, you know, we're just watching the deposit dynamic right now.
Gotcha. Makes sense. If I could just ask one more. You know, credit's always been kind of a non-issue for you guys historically, and that remained the case in the same quarter, by and large. Just kind of thinking about, you know, the SBA team that you guys added in the Twin Cities fairly recently, and then I believe you guys are picking up an SBA team in Phoenix as well. You know, I guess generally that asset class is looked at as kind of higher risk reward.
I'm just curious if, just given all the rate pressures that's impacting, you know, small businesses these days, if, you know, your plans to continue portfolio production is still intact and kind of how you guys shift, if at all, kind of your underwriting approach to SBA relative to kind of conventional commercial loans.
Karin, do you wanna take that one?
Yeah, sure, Nate. You know, I think in this environment, we're certainly looking to continue to grow SBA from a relationship perspective, but we'll also look at the potential to sell some of those on the secondary market. I think we're open to both approaches. You know, I don't see us changing our underwriting standards. I think we've got strong standards in place, and certainly the guarantee that affords us a level of protection.
Mm-hmm. Okay, great. Sorry, perhaps, one more for Katie. Just, you touched on whole bank acquisition opportunities, but curious to maybe get an update in terms of what you're seeing in the retirement and benefit services space for additional deals there.
We continue to increase our sources in regards to partnering with advisors across the country who are in the business of finding these businesses and positioning them to sell within, you know, one, two, three, four years. That's helped us grow our pipeline and get into a higher levels and volume of conversations. We're very pleased with that activity. There continues to be competition in this space, which I think just speaks to the value of the business of retirement and the annuitized fees and the lack of capital that has to be allocated to those fees.
We like where we're at from a conversation from a pipeline standpoint, and we like even more what we've got, because clearly there's tremendous value within that business unit.
Okay, great. I appreciate you guys taking all the questions. Thank you.
Thanks, Nate.
Thank you. Again, if you have a question, please press star then one. This concludes our question and answer session. I would like to turn the conference back over to Katie Lorenson for closing remarks.
Perfect. Thank you. Thank you everyone for joining our call this morning. We thank you for listening. We thank you for the great questions. I'll close with just a few comments regarding clearly our industry is facing some headwinds. Our company has historically outperformed, and we remain well positioned for future success because of our diversified business model and the momentum we're seeing in building our pipelines for new business, our client expansion across all products, and the high level of engagement we have within our team and our leaders is very special. We are very proud to be where we are. We remain focused on working together to grow our company.
The steady and strong foundation that we have is allowing us again to differentiate ourselves as we go out to the market and invest in recruits and retain top talent, as well as serve in the best interest of our clients and deliver long-term value for our shareholders. We thank our shareholders for their investment. We thank our team members for bringing value to our clients each and every day, and we thank all of you for your continued support and interest in our company. Have a great day, everyone.
The conference call has now concluded. Thank you for attending today's presentation. You may now disconnect.