Ladies and gentlemen, thank you for standing by and welcome to the First Citizens BancShares third quarter earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you need to press star one on your telephone. If you require operator assistance during the program, please press star, then zero. As a reminder, today's conference is being recorded. I would now like to introduce the host of this conference call, Miss Deanna Hart, Senior Vice President of Investor Relations. You may begin.
Thank you, Julie. Good morning and thank you for joining us today. It is my pleasure to introduce our Chairman and Chief Executive Officer, Frank Holding, as well as our Chief Financial Officer, Craig Nix, who will provide an overview of our third quarter results and will be referencing our investor presentation, which you can find on our investor relations website. We are pleased to have several other members of our leadership team here with us today who will be available for questions if needed. After the presentation, we'll be happy to take any questions you may have. As we have not yet closed the transaction with CIT Group, we will be speaking today on First Citizens BancShares standalone performance only and will provide an update of our planned merger with CIT.
Our comments will include forward-looking statements, which are subject to risks and uncertainties that may cause our results to differ materially from expectations. These risks are outlined for your review on page two of the presentation. We will also reference non-GAAP financial measures in the presentation. Reconciliations of these measures against the most directly comparable GAAP measures are available in the appendix. With that, I'll turn it over to Frank.
Thank you, Deanna, and good morning, everyone. We appreciate you joining us today. This morning, we reported third quarter net income of $124.1 million, or $12.17 per share, delivering another quarter of strong financial results to our shareholders. We continue to see positive trends in net interest income despite continued pressure on margins from our growing level of excess liquidity and the sustained low-rate environment. Non-interest income from our core fee income-producing lines of business also remained robust during the quarter and was up over the prior quarter. Additionally, credit quality remained solid, resulting in another net provision benefit, albeit smaller than the previous quarter's benefit.
We achieved another consecutive quarter of loan and deposit growth, both of which continue to be bright spots for our company as we remain focused on building long-term relationships with our customers. Total loans, adjusted for SBA PPP runoff, grew $437 million during the third quarter or by 5.6% on an annualized basis. We saw strong growth in both our consumer and commercial lines of business. Deposits were up $1.7 billion during the third quarter, representing an annualized growth rate of 13.6%. I'm sure many of you are looking for an update on our planned merger with CIT Group.
On September 30th, we announced that First Citizens and CIT agreed to amend our merger agreement to extend the original outside date in the merger agreement from October 15th, 2021, to March 1, 2022, as we wait for the remaining regulatory approval from the Federal Reserve Board. Not much has changed since that time, and our understanding is that the application remains at the governor level. As we noted in the last announcement, we stay in regular touch with the Federal Reserve Board, and we have responded to all their questions. We have not been provided a timeframe for their decision. We understand and share the frustration regarding the length of time that has been required to obtain the necessary approvals for this merger, but this process can require patience.
As we noted last quarter, we have not been made aware of any regulatory problems with our application, and we're confident in our ability to close this deal as soon as practical following approval. Our goal has always been to build value for our shareholders, and we remain committed to this goal and our merger with CIT. When we announced this merger, we stated that it was financially compelling and that it would create a premier nationwide commercial and consumer bank with enhanced scale to drive growth, improve profitability, and enhance shareholder value. We believe this remains the case, and our collective teams are excited about the opportunities that lie ahead for the combined company. As we've said before, we continue to work on integration planning with our CIT counterparts and leaders from both organizations remain actively engaged in and committed to a successful combination of our companies.
In addition to merger and integration planning, we continue to leverage our digital investments to drive revenue and accelerate our digital transformation. We're now in the final phase of transitioning business and treasury commercial clients to our new commercial platform, which has been well received by these clients, these important clients. We've also been working to implement process improvements to support our back office and recently completed an upgrade to our branch platform. This change to a state-of-the-art digital system allows for more efficient transaction processing and positions us to adapt quickly to changing customer needs. As you can see by the growth in our wealth management income, we're focusing on deepening client relationships to grow this line of business.
We continue to grow our wealth business by both expanding into new markets and by enhancing the products and services available to help our wealth clients meet their financial goals. Our people are our top priority. We continue to focus on talent development and retention of our associates. Our objective here is to ensure we attract, retain, and develop associates to create a high-performing, sustainable company that will meet the strategic, financial, and operational goals of the organization. As with many of our peers, our ability to attract and retain talent has been tested this year as the number of people leaving the workforce and the competition for top talent is putting pressure on teams to retain their talent.
While the current environment for attracting talent is challenging, we believe that First Citizens is a desirable place to work, and we have a lot to offer recruits as well as existing associates. I'll now turn it over to Craig for a closer look at our financial results, and then we'll open the line for questions.
Okay, thank you, Frank, and good morning, everyone. I'll start with page four of the investor presentation, and I'll cover our third quarter earnings highlights. Earnings for the third quarter, as Frank mentioned, were $124.1 million, down $28.7 million from the linked quarter and down $18.6 million from the same quarter a year ago. While earnings were down compared to both periods, we are pleased with our core earnings performance. Earnings for the third quarter translated into a return on average assets of 0.88% and a return on average equity of 11.29%. Net income per common share was $12.17, down from $15.09 in the second quarter and $14.03 in the comparable quarter a year ago.
For the linked quarter, the most significant impacts leading to lower earnings were a decline in the benefit from provision for credit losses, lower positive fair market value adjustments on our equity portfolio, a decline in gain on sales of securities, and higher non-interest expense. Lower earnings from the comparable quarter a year ago were due to the same factors, except for the provision benefit and the impact of fair market value adjustments. Compared to the second quarter, pre-provision net revenue declined by $22 million, driven by decreases in SBA PPP income, securities gains, fair market value adjustments, and higher non-interest expense. The first three factors contributed to a $23.2 million dollar decline in pre-provision net revenue from the second quarter, so they were mostly responsible for the decline in PPNR during the quarter.
Net interest income was slightly up over the second quarter, despite a $7.1 million decline in SBA PPP income and continued interest rate headwinds. Another bright spot was a $4.8 million increase in core non-interest income. Higher non-interest expense during the quarter was driven by higher personnel costs, occupancy and equipment expense, and merger costs. We continue to experience strong credit quality and low net charge-offs. In addition, macroeconomic factors continue to improve, resulting in a further reserve release, albeit a smaller one than in the second quarter, resulting in an $18.5 million decline in net benefit from the provision for credit losses.
For the year, as macroeconomic factors have improved and we have sustained good credit quality, we have released $41.1 million in reserves compared to a reserve build of $36.1 million last year related to the uncertainty surrounding COVID-19. Turning to pages five and six, I will cover trends in net interest income and net interest margin. Given another quarter of strong deposit growth, our cash balance with the Fed increased. Consistent with prior quarters, we continue to monitor rates closely and look for opportunities to redeploy excess liquidity into loans and investments to grow net interest income despite lower reinvestment yields. Despite a decline in SBA PPP income and continued low interest rates, net interest income was up slightly over the linked quarter.
Higher investment yields and average balances, loan growth ex-PPP, and slightly lower deposit costs more than offset rate pressure on loans and a decline in SBA PPP income. While SBA PPP loans continue to support overall net interest income, the contribution from these loans is declining as forgiveness activity continues. SBA PPP loans contributed $20 million in interest and fee income during the third quarter, compared to $27.2 million in the second quarter. Net interest income declined by $6.8 million compared to the same quarter in 2020. This was primarily due to an $8.9 million decline in SBA PPP income and lower earning asset yields, partially offset by higher average loans and investments, as well as lower rates paid on interest-bearing deposits.
While we were pleased with the increase in the absolute level of net interest income during the quarter, as expected, net interest margin declined by seven basis points from the linked quarter. As discussed in prior quarters, we continue to operate with liquidity above normal operating ranges, which puts downward pressure on net interest margin. We have been pleased by the level of loan growth in the second and third quarters, which has helped to somewhat protect net interest margin from the impacts of low interest rates. In addition, we have opportunistically deployed money out of cash into the investment portfolio since last year. Our investment portfolio grew by $985 million or just over 10% since September 30th, 2020.
Consistent with the prior quarter, the decline in margin was mostly attributable to earning asset mix as our cash balance with the Fed continued to grow. One bright spot during the quarter was the investment portfolio yield was accretive to margin by three basis points. We expect that net interest margin will continue to remain a headwind, mostly due to continued excess liquidity, the low-rate environment, and a reduction in SBA PPP loan income. Quarter-over-quarter declines in net interest margin have moderated from the declines we experienced in 2020 and earlier this year, and we will continue to seek opportunities to grow absolute levels of net interest income to offset declines in margins, or in margin through organic loan growth and opportunistic additions to our investment portfolio.
Turning to page seven, I will cover non-interest income, which totaled $122.9 million for the third quarter. Non-interest income decreased by $11.2 million compared to the linked quarter. The decline was mostly attributable to a decline in securities gains and fair market value adjustments totaling $16.1 million. Core non-interest income increased $4.8 million when compared to the linked quarter due primarily to higher net service charges on deposits. While linked quarterly income did not increase for wealth, card, and merchant taken collectively, we continue to see momentum in these businesses supporting our bottom line. Non-interest income increased $2.4 million when compared to the third quarter of 2020.
Taken together, securities gains and fair market value adjustments were down $7.3 million, so core non-interest income was up by $9.7 million. The most significant factor in the increase was in wealth income as we continue to grow assets under management, driving higher advisory and brokerage fees, as well as additional trust income. We also saw increases in service charges and income from card and merchant services. These improvements were partially offset by a decline in mortgage income, driven by lower production volume. For the remainder of 2021, we expect continued momentum in the wealth and payments related businesses. We expect mortgage income growth will be a challenge as refinance activity slows, as mortgage rates have risen.
We do expect core non-interest income to be in the $109 million-$110 million range in the fourth quarter. Turning to page eight, I will cover non-interest expense. Non-interest expense increased by $11.2 million over the linked quarter. The largest increase was in personnel expense, which was up $4.2 million over the second quarter. The increase was driven by increases in temporary personnel costs, revenue driven incentives, and net staff additions, partially offset by lower insurance health insurance costs. Outside of merger related expenses, other increases in expense were spread among various categories and were mostly due to our continued investment in supporting revenue generating businesses and improving internal processes.
We expect core non-interest expense ex merger related costs to remain in line with the recent run rate of approximately $300 million-$305 million per quarter. Turning to page nine, we provide balance sheet highlights and key ratios. I will cover the significant components of the balance sheet on subsequent pages. On page ten, I will cover loan growth for the linked quarter and year-over-year periods. Loans decreased by $174 million or by 2.1% on an annualized basis this quarter, primarily due to a $611 million net decrease in SBA PPP loans. Excluding PPP loans, we experienced solid annualized organic growth of 5.6% over the second quarter.
The largest components were commercial and industrial, owner-occupied commercial real estate, and consumer loans. On a year-over-year basis, loans were relatively stable as PPP forgiveness almost completely offset a 5.7% increase in organic loans. Overall, we are pleased with organic loan growth this year, and we believe that it will be a mid-single digit percentage growth range moving forward. The ultimate level of loan growth will be dependent upon continued economic expansion in our markets. Turning to pages 11 and 12, I will cover our credit quality trends and allowance for credit losses. Credit quality continues to be a source of strength. The net charge-off ratio was six basis points during the quarter. One charge-off was primarily responsible for the increase from three basis points in the prior quarter.
The non-performing assets to total loans and other real estate ratio was 0.65 at quarter end, the lowest level since the second quarter of 2019. Given these trends and improvement in macroeconomic factors, we released $41.4 million in reserves to date, compared to a $36.1 million reserve build last year, as I mentioned earlier. Our allowance ratio ex PPP loans declined modestly from 0.61% in the second quarter to 0.58% in the third, covering net charge-offs during the current quarter almost 10 x compared to a loan book with an average life of approximately four years. We are now operating with an allowance ratio just below where it was when we adopted CECL on January 1, 2020. Looking at it another way, near the pre-pandemic level.
We remain comfortable with our allowance level, and while we do not expect that net charge-offs will remain at these historically low levels perpetually, we have seen little indication that charge-offs going forward will have a significant impact on the level of our allowance. Moving to pages 13 and 14, I will cover deposit trends and our funding mix. We continued to experience strong deposit growth during the third quarter, with money market accounts and demand deposits leading the way. Deposits grew at an annualized rate of 13.6% since the end of the second quarter, and by 18.5% on a year-over-year basis. Our balance sheet continues to be funded predominantly by core deposits, with deposits representing over 96% of our funding base at the end of the quarter.
We are pleased that most of our deposit growth occurred in core checking accounts, and at the end of the third quarter, non-interest-bearing deposits accounted for approximately 43% of total deposits. Consistent with the second quarter, the total deposit cost was seven basis points, which was down six basis points from the same quarter a year ago. Looking forward, we expect that deposits will remain elevated and low deposit costs will continue to be a source of strength with respect to our net interest margin. Okay, turning to page 15, our capital position remains strong with all ratios above or within our target ranges. As of the end of the third quarter, our CET1 ratio was 11.34% and our total risk-based capital ratio was 14.3%.
Most of the growth in our risk-based capital ratios was attributable to strong earnings during the year, partially offset by growth in total risk-weighted assets. As we noted in prior quarters, our Tier one leverage ratio continues to be impacted by significant deposit growth, but it remains above internal thresholds as earnings are mostly mitigating the impact of increased average assets. We are comfortable operating at the level. This concludes my comments. Thank you for joining us today, and I will now open it up for Q&A.
Ladies and gentlemen, if you have a question or a comment at this time, please press the star, then the one key on your touch tone telephone. As a courtesy to others on the call, we ask that you limit yourself to one question and one follow-up and then return to the call queue if you have additional questions. If your question has been answered and wish to remove yourself from the queue, please press the pound key. We'll pause for one moment to compile our Q&A roster. Our first question comes from Brady Gailey with KBW.
Hey, thanks. Good morning, guys.
Morning.
I wanted to start on the expense base. You know, compensation was up about $7 million linked quarter, I think was a little more than we had expected. I know in the slides you call out some kind of temporary increase in personnel costs. I wonder if you could just talk a little bit more about that and how we should think about that comp line going forward, legacy FCNCA.
Okay. Thank you for the question. I would say that the third quarter was a little lumpy with some episodic expenses in there. I'll hit the expectation would be for quarterly expenses to be between $300 million and $305 million ex merger-related costs. The third quarter was a little lumpy. We were up $11.2 million. Approximately 40% of that increase was related to personnel costs. If you break those components down, we had an increase in temporary personnel costs, primarily related to our business online banking platform replacement that Frank mentioned in his comments. That was followed very closely by revenue-driven incentives, and primarily that is in the wealth area. That wealth income is up approximately 28% on a year-over-year basis.
They're really tied into revenue or temporary, given a technology-related project. Processing fees with third parties increased, and they're pretty much volume related, primarily in wealth as well. That really tracks with the increase in assets under management. Those expenses were up with our digital account opening efforts. Consulting and advertising costs were up a bit to support our digital banking efforts. Those are both in line with our budget expectations. Some of those just hit in the third quarter. We also replaced some branch equipment teller stations, and those were below our capitalization limit in the third quarter. We wouldn't expect a lot of those expenses to repeat every quarter.
Hopefully, the revenue-driven expenses do repeat because that means we're doing well in wealth and our other income producing lines of business. We do expect expenses to be in that $300 million-$305 million range in future quarters ex merger-related costs. Also, we had an increase in merger-related costs during the quarter as well, I didn't mention that increase.
Yep. All right. That's helpful. My second question is on accretable yield. You know, year -to -date, you guys have kind of been in that, you know, $11 million-$13 million per quarter, legacy FCNCA yield accretion. How much is left in that bucket going forward, you know, excluding anything that is going to be realized from CIT?
I do not have the actual remaining deferred or accretable yield number in front of me, but we do expect that line item will continue to decrease in line with what you see in linked quarters. I don't know if anybody has that number here available. It doesn't look like we have that number available, but we would expect that line item to continue to decrease as that portfolio runs off.
Craig, actually one more on that same topic. I mean, I know when you announced CIT, you know, you kind of called out about $63 million of kind of net purchase accounting accretion. I know the marks have changed a lot over the last year, but it feels like that 63 number could come down pretty notably. Any idea, you know, how much purchase accounting accretion we should expect from CIT next year?
We will be updating that when we close. We're in the process of doing those valuations now. We don't have that information at this time.
Okay. All right. Thank you, guys.
Thank you.
Our next question comes from the line of Kevin Fitzsimmons with D.A. Davidson.
Hey, good morning, everyone.
Good morning.
Morning, Kevin.
Morning, Kevin.
I just had a question about, you know, the excess liquidity is obviously a drag for all banks, and it seems like it was an increased drag this quarter for you all. Some banks are kind of reaching the point where, you know, they had been hesitating from being more aggressive and putting that money to work, you know, in the bond portfolio. We've heard some banks this quarter really, you know, kind of change their tune on that and indicate they're going to be stepping up more aggressively.
Can you, I know there's a lot of different variables here between maybe what your outlook for legacy loan growth is, what your outlook for rates are for closer to rising rates, and then obviously the opportunities from the merger, in terms of what you can do to the balance sheet. Can you kind of stack rank those, or maybe there's other variables I'm not thinking of in terms of why you're opting maybe not to be more aggressive, on that front? Thanks.
Thank you, Kevin. I would tell you that we are trying to be opportunistic in redeploying this excess liquidity. As I mentioned in my comments, we have increased our investment portfolio year-over-year by approximately $1 billion, which is about a 10% increase. I can tell you that we are closely monitoring rates. Just to give you some idea of the challenge, at the beginning of the third quarter in July, the five-, seven-, and 10-year Treasury fell by 17, 24, and 26 basis points respectively, and it took the entire quarter for those to reverse versus the end of the second quarter. While we added during the second quarter, we didn't think it was prudent to add during the third quarter given where rates were.
Now we think we may have some opportunities going in the fourth quarter as those rates have rebounded. We'll continue to try to invest opportunistically there, but we didn't think it was very prudent to invest into a lower rate environment when implied yields appear to be up as we move towards the end of the year. We would prefer to operate with cash somewhere around the 4% of earning assets level. As you can look at our balance sheet and see, we're operating at around 19%. That's really due to the fact that deposits remain elevated, and we don't really see that changing in the short term. I'm glad you pointed out this is not unique to First Citizens. I think it's an industry-wide issue.
It is a priority for us to grow organically, loan growth or invest, to protect our net interest margin as much as possible. I also think that having some excess liquidity, and this is intentional, to some degree, will help us optimize our balance sheet when we do ultimately merge with CIT. We may be a little more elevated due to that than we would have been otherwise had we not contemplated a merger or this transaction. I hope that makes sense, but I think the punchline is we're trying to be opportunistic, but we don't want to make short-term decisions that will pose us to interest rate risk as we move forward.
No, thanks, Craig. That's very helpful. One other question. I completely understand the sensitivity to it that you can't really comment with the merger application at the board level. Maybe you can help us in terms of how to look at this. There was a recent media report that disclosed a few complaint letters that were issued, which, listen, I guesstimate that those kind of letters come with every deal. I don't know how much weight a regulator would put on an unsigned letter. Is there any way to help us gauge how to view those? Because on the one hand, I think everyone is scratching their head thinking on trying to come up with a reason why it's taking this long.
On the other hand, I wonder if these letters, I would suspect you would know it's an issue if it was a real issue, and you've made it clear that you're not getting questions from them. Secondly, the FDIC has approved the merger already. I would suspect that they see these letters as well. Given just a few of those factors, is there any way to help us how we should view those kind of storylines when they come out?
Well, Kevin, the first thing I'd say about the letter is that it was dated in mid-February, and that was during the normal public comment period. Since then and before then, we have been in constant communication with our regulators, two of which have approved the transaction while this letter was out there. In terms of the Fed, I'm not gonna speculate on how they view it, but we have addressed any issues they've had in general, not necessarily specific to that letter, since that time, and we're unaware of any problems out there, issues with our application. That's the best answer I can provide about that letter.
That's great.
about the approval process.
Yeah, that's great. I really appreciate that. One last one for me, just on loan growth. When you say mid-single digit, you know, I know payoffs are an issue for the industry, but with your footprint and economies reopening and rebounding, could we be, you know, more on the march toward high single digit, but maybe it's just payoffs that are keeping you conservative right now?
I would say it probably would not be prudent for us to project high single-digit loan growth. I think we, just based on our pipeline, which we feel like are pretty strong right now, we expect mid-single digit loan growth going forward.
Okay. Great, guys. Thanks very much.
Thank you, Kevin.
Thank you. Your next question comes from Brian Foran with Autonomous.
You know, maybe on interest rates, as we think about, you know, maybe the Fed raising rates in 2022, 2023, whatever year it ends up being. You know, I mean, it seems like there should be pretty decent upside for both you and CIT's side, but there's a lot of moving parts about, you know, do some deposits go away, do you deploy excess cash? How the rate sensitivities we get kind of match reality. You know, I was hoping you could just give us, you know, whether you want to do it qualitatively or quantitatively, like when you think of rates going up 100 basis points, as a standard scenario, how do you
You know, clearly there is earnings upside, but how do you think about how much or how big that earnings upside could be, you know, either for First Citizens or ideally the pro forma?
This is a rule of thumb, and I think this comment will be directional, but every 10 basis points parallel shift in the yield curve up or down for us is equal to about a 1% annualized increase in net interest income. Think $15 million of pre-tax income for every 10 basis points parallel shift in the curve. Obviously, 100 basis points would add around 10% growth to net interest income. We're asset sensitive, so we definitely would benefit from rising rates.
Then maybe sticking with the same topic, on prior calls, you've given some good front book versus back book pricing color. You know, can you just kind of give us the mark to market on what that looks like now? You know, is there still a little bit of a gap there or are they starting to converge?
If you look at the second quarter, new rates were about 47 basis points lower than the runoff. New rates were around 3.28. Runoff was around 3.75, so 47 basis points gap there. That narrowed to 43 basis points in the third quarter. New rates came on while at lower rates. Loans ran off at lower rates as well. That gap stayed fairly stable, 47 down to 45, and that's on the commercial loans. But that's where the bulk of the production is. We're still facing that interest rate headwind on loans from a perspective of loan yield. Fortunately, during the quarter though, investment yields increased enough to overcome that drag on margin.
If I could sneak in the last one. The deposit growth has obviously been kind of lights out. I mean, you've gone from $35 billion pre-pandemic to $50 billion now. You know, I wonder if you could speak to kind of two issues. You know, one on the negative side, do you still think there's surplus deposits and client excess liquidity that you kind of mentally have to haircut or do you think $50 billion is kind of a full base you can work off of going forward? On the positive side, you know, kind of just remind us or update us on the kind of key strategies and opportunities to continue to grow.
Well, I think our go-to-market strategy is relationship focused, so that's sort of inherent in what we do. That's. I attribute a lot of that growth to that. We do believe some of the growth in deposits are transitory in nature. For instance, since the end of last year, we try to trace what's coming in from government stimulus and what remains. Since the end of last year, we had about approximately $1.2 billion in government stimulus deposits in the base, and we think that's somewhere around $400 million now. Despite that decline, deposits grew from in first quarter, 6.4% annualized, second quarter, 9.1% annualized, and this quarter, 13.6% annualized.
We do think some of its transitory, but we also think, given that we've established relationships with customers, that these, some of these deposits are going to stick. We really can't quantify what that will be, but we're pleased with the deposit growth and somewhat in awe of it, that it just keeps growing at these double-digit annualized rates on a quarter-on-quarter basis. Most of its coming from our commercial customers. You know, I think looking at earnings releases for other banks, we're not alone in this. We do believe some of this will stick. Some of its transitory, as exhibited by the fact we had a $1.2 billion increase this year or earlier this year, and those deposits are around $400 million now.
Its core growth is sort of overcoming the transitory deposits.
That's great. Thank you for all the.
Yeah. Thank you for your questions.
Your next question comes from Christopher Marinac.
Yes, thanks. Good morning. I wanted to ask Frank or you about the idea of attracting new hires within your markets, whether it's in your home state of North Carolina or in other parts of the footprint. Do you see new commercial lenders and other staff coming on in this timeframe, even before the merger is closed?
Christopher, this is Frank Holding. We continue to hire new associates and we're doing all we can to do that. We've been reasonably successful in that space. The orientation process for new associates continues. We have a strong, robust process there that helps our associates become productive in a reasonable timeframe. While the competition for talent is very strong, we're holding our own in that space. Our story, you know, whether it's pay and benefits and work environment, we think we have a strong story in that space. There's no major other than just being more challenging, we are getting the job done.
Great, Frank. Thank you for that. I appreciate it. Just to follow up, I guess, on the impact of the tech spending that you outlined earlier in the call. Does that drop overall per transaction costs in the future? And do you see a material kind of change in efficiency? Again, just thinking for First Citizens standalone, you know, prior to the merger, savings.
That certainly is the goal. I mentioned, you know, process improvement related technology investment, and the reason to make that investment is to get a payback in terms of transaction costs over time.
Great. Thanks very much for taking the questions.
Thank you.
I'm not showing any further questions at this time. I'd like to turn the call back over to our host for any closing remarks.
Great. Thank you. Thank you everyone for joining this morning. As always, we're appreciative of your ongoing interest in our company. If you have any further questions or need additional information, please feel free to reach out. I hope everyone has a great day. Thank you.
Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Have a wonderful day.