Good morning, ladies and gentlemen, and welcome to the Fulton Financial's 2nd Quarter 2021 Results Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call may be recorded. I would now like to turn the conference over to your host, Mr.
Matt Jozwiak, Director of Investor Relations.
Good morning, and thanks for joining us for Fulton Financial's conference call and webcast to discuss our earnings for the Q2 of 2021. Your host for today's conference call is Phil Wenger, Chairman and Chief Executive Officer. Joining Phil are Curt Meyers, President and Chief Operating Officer and Mark McCollum, Chief Financial Officer. Our comments today will refer to the financial information and related slide presentation included with our earnings announcements, which we released yesterday afternoon. These documents can be found on our website at fult.com by clicking on Investor Relations and then on News.
The slides can also be found on the Presentations page under our Investor Relations website. On this call, representatives of Fulton may make forward looking statements with respect to Fulton's financial condition, results of operations and business. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, and actual results could differ materially. Please refer to the Safe Harbor statement on forward looking statements in our earnings release and on Slide 2 of today's presentation for additional information regarding these risks, uncertainties and other factors. Fulton undertakes no obligation other than as required by law to update or revise any forward looking statements.
In discussing Fulton's performance, representatives of Fulton may refer to certain non GAAP financial measures. Please refer to the supplemental financial information included with Fulton's earnings announcement released yesterday and Slides 10 and 11 of today's presentation for a reconciliation of those non GAAP financial measures to the most comparable GAAP measures. Now I would like to turn the call over to your host, Phil Wenger.
Well, thanks, Matt. Good morning, everyone. I'll begin today's call by making a few high level remarks about our performance for the quarter and factors affecting the markets we serve. And then Kurt will discuss our business performance, and Mark will share the details of our financial performance. And after that, we'll answer any questions you may have.
Fulton's performance continued to be solid in the Q2 of 2021. Following our record setting earnings per share of $0.43 in the 1st quarter, our 2nd quarter earnings per share of $0.38 tied our previous record high. And we saw growth in certain segments of our business, as Kurt and Mark will discuss, and asset quality remains stable. The economy and the markets we serve are showing improvement, unemployment is in decline, and the communities are reopening. In fact, as of July 4, the governments in the 5 states in which we operate have lifted mask requirements for everyone.
As the economy continues to open and business activity moves closer to normal, we are increasingly optimistic about the future. In recent months, we have seen several mergers and acquisitions in and around our market. Fulton has taken a look at a few of these opportunities, and we remain interested in supporting our growth through M and A. We will continue to evaluate future opportunities to identify those which would be a good fit for our strategy and our community oriented style of banking. As always, we remain focused on our shareholders and we'll remain disciplined on pricing.
Through the end of the Q2, we have not repurchased any shares under the $75,000,000 share repurchase authorization approved by the Board in February, but we continue to assess share repurchase opportunities. Throughout the past year, I've referenced the challenges brought about by COVID-nineteen. I'm extremely proud of how our entire team adapted to these challenges. Through their efforts, we were able to support our customers through the most challenging of times. Now, more than a year after the pandemic began, we are pleased to see more people becoming fully vaccinated, our our communities reopening and life starting to return to some sense of normalcy.
Given this improvement, we are now looking forward to bringing more of our own team back to on-site work in early September. While some employees will be permanently remote, most will return to some level of on-site or hybrid work. The ability to connect in person strengthens relationships and our culture, which quite frankly sustained us during the pandemic and allowed us to continue to focus on our customers. Now I'll turn things over to Curt to discuss our financial performance.
Well, thank you, Phil, and good morning. As Phil noted, our 2nd quarter performance produced solid results, and I'd like to share some detail on several key areas. Loan growth for the quarter was approximately 170,000,000 dollars or about 4% annualized, excluding the impact of PPP loan forgiveness and originations. We benefited from the diversity of our business model as strong loan growth from residential mortgage lending offset declines in our commercial business. First, let me talk about the PPP program.
PPP originations for Wave 3 ended up at $750,000,000 beyond our original expectations with $60,000,000 originated in the 2nd quarter $690,000,000 originated in the Q1. Our average Wave 3 processing fee was 4.5%, which was also well above what we had originally anticipated. While the PPP program has ended for new originations, we continue to focus on loan forgiveness needs of our small business customers. In the Q2, we processed $639,000,000 of PPP forgiveness requests and have remaining Wave 1 and 2 outstanding balances of approximately $360,000,000 In total, we have $1,100,000,000 in outstanding PPP loans as of June 30 and $35,000,000 in processing fees yet to be earned. Turning to commercial loans.
Commercial real estate showed modest growth, while other commercial categories declined, resulting in an overall decline in the commercial balances of $127,000,000 on a linked quarter basis. When excluding PPP loans, we continue to experience commercial loan headwinds due to persistent low line utilization and prepayment activity. Our commercial loan pipeline is down linked quarter but consistent with year end levels. Recent weeks, we have experienced growth in the pipeline consistent with all of our markets reopening. We remain cautiously optimistic that commercial loan demand will improve as business activity and customer confidence increase.
In consumer lending, our loan balances grew 284,000,000 dollars or 5.8 percent linked quarter on an ending balance basis. This growth was driven primarily by residential mortgages. As noted in prior quarters, our asset sensitive balance sheet provides room to continue growing this segment of high quality in market residential mortgage loans. Overall, we anticipate loan origination levels to continue at a rate that is adequate to support the annual net interest income guidance in our outlook. Turning to deposits.
Growth for the quarter was modest. However, total deposit balances were up $4,300,000,000 or 25% since pre pandemic levels. During the quarter, we continued to actively manage our deposit costs down, and we are encouraged by the work of our team and the loyalty of our customer base. Our total cost of deposits for the quarter was down to 15 basis points. Moving on to fee income.
Wealth Management, Commercial Banking and Consumer Banking fee based businesses all delivered growth in revenue on a linked quarter and year over year basis. Our wealth management business continues to perform very well. During the quarter, we purchased a small investment advisory firm, which helped support the growth of our wealth business. Our assets under management and administration grew to $13,700,000,000 atquarterend, up from $13,100,000,000 last quarter and $11,100,000,000 at the end of the Q2 of 2020. These trends drove record quarterly wealth management income for the Q3 in a row.
Turning to mortgage banking business. Originations were $875,000,000 for the quarter, an increase of 22% from the Q1. However, a significant decline in gain on sale spreads combined with continuing to hold an elevated amount of loans on the balance sheet, led to an overall decline in mortgage banking revenue linked quarter. In addition, the decline in longer term rates also led to a $2,000,000 increase to our mortgage servicing rights valuation allowance, further reducing overall mortgage banking income. Overall, the mortgage banking business remains strong as we continue to experience solid origination activity and opportunities to either sell our conforming loans in the secondary market or increase our balance sheet with this product.
Purchase activity represents approximately 60% of total originations and has steadily increased in recent quarters. The mortgage pipeline sits at $620,000,000 remaining more than 2x our pre pandemic levels. Capital markets revenue, which are primarily commercial loan interest rates swap fees, declined in the Q2. This decline was partially driven by our willingness to provide longer term balance sheet fixed rates. We expect swap revenue to return to more historical levels as we move forward.
However, this is dependent on customer preferences, commercial loan demand and interest rate expectations. Moving to credit, asset quality remains stable. Delinquency remains low. Non performing loans were flat linked quarter and remain relatively stable since prior to the beginning of the pandemic. Net charge offs were $6,900,000 or 15 basis points for the quarter.
This compares to $6,200,000 or 13 basis points of net charge offs in the Q1. On Slide 13, we have again provided updated loan deferral trends through June 30, 2021. Commercial deferrals further declined to approximately $122,000,000 and stand at 0.9 percent of the commercial portfolio. Consumer loans on deferral and forbearance also declined and are now at 57,000,000 dollars or 1.1 percent of the consumer loan portfolio. In previous calls, we noted selected industries we believe may be at more risk due to COVID-nineteen.
Slide 15 provides an updated summary of these selected industries. Overall, our credit outlook remains cautiously optimistic for the remainder of 2021. And as a result, we have further reduced our 2021 provision for credit loss outlook. Now I'll turn the call over to Mark to discuss our financial results in more detail.
Thank you, Kurt, and good morning to everyone on the call. Unless I knew it otherwise, the quarterly comparisons I will discuss with the Q1 of 2021. Starting on Slide 3. Earnings per diluted share this quarter were $0.38 on net income available to common shareholders of $62,400,000 This represents a decline of $0.05 per share versus the Q1 of 2021. Our Q2 performance included a slightly lower net interest income as well as lower non interest income offset by negative provision expense and lower operating expenses, which I'll cover in more detail later in my comments.
Moving to Slide 4, our net interest income was $162,000,000 a $2,000,000 decline linked quarter, mainly due to less fees earned on PPP loans forgiven during the Q2 as compared to the Q1. Forgiveness for the quarter was $639,000,000 and this represents only waves 12. Wave 3 is not expected to begin requesting forgiveness until late in Q3 and into the Q4 of 2021. The latest wave of PPP loans also have a larger average fee, 4.5 percent due to a smaller average loan size for this wave of funding. As of June 30, we have approximately $35,000,000 of PPP loan fees yet to be recognized, dollars 4,000,000 coming from the 2020 originations and $31,000,000 from our 1st and second quarter originations this year.
Turning to the investment portfolio, we selectively redeployed some of our excess cash into mortgage backed securities and short term money market instruments. As a result, investments grew $308,000,000 during the Q2. As Curt noted, we saw deposits grow by approximately $90,000,000 on an ending balance basis, and our cost of deposits for the quarter was only 15 basis points, a decline of 3 basis points linked quarter. We would expect our deposit cost to still migrate moderately lower in future quarters as we have approximately $660,000,000 of CDs maturing over the next two quarters at a cost of approximately 80 basis points, which is significantly higher than current market replacement costs. Our average loan to deposit ratio declined during the quarter from 89.9 percent in the 1st quarter to 86.9% in the 2nd quarter.
As I discussed last quarter, Fulton completed a balance sheet restructuring, which reduced our interest rate risk and improved several of our performance metrics going forward. This restructuring was fully reflected in the Q2 and is incorporated into the updated guidance I will provide at the end of my remarks. Our net interest margin for the Q2 was 2.73% versus 2.79% in the Q1. The 6 basis point decline linked quarter was largely a result from lower PPP loan fee recognition as well as additional cash on our balance sheet. Turning to credit.
On Slide 5, our 2nd quarter provision for credit losses was a negative $3,500,000 versus a negative $5,500,000 for the 1st quarter and a positive $20,000,000 a year ago. Compared to the year ago period, the initial impact of COVID had a significant impact on our allowance for credit losses in the first half of twenty twenty. But as the economic outlook continues to improve, the amount required in our allowance for credit losses has declined. As always, this could change in future periods based on new loan origination volumes, loan mix, net charge off activity and economic projections. Slide 5 also shows our normal quarterly credit metrics.
Our allowance for credit losses, excluding PPP loans, has declined 14 basis points since the end of last year and currently stands at 1.46%. Moving to Slide 6. Non interest income, excluding securities gains, was $52,000,000 down $10,000,000 from last quarter and down $1,000,000 from a year ago. Our fee based revenues showed modest increases in wealth management, commercial banking and consumer banking, but were outweighed by a decline in mortgage banking revenues. Mortgage banking revenues were by a decline in gain on sales spreads of 114 basis points linked quarter, down to 1.85% after spending much of the past year at approximately 3%.
We also elected to portfolio about $230,000,000 of salable mortgages onto our balance sheet thus far this year. This has impacted our short term mortgage banking revenues, but may provide a significant long term benefit to net interest income versus the purchase of investment securities. Lastly, our MSR asset was $36,000,000 on the balance sheet at June 30. This balance is net of a $6,500,000 mortgage servicing rights valuation allowance. As Curt noted, during the quarter, we recorded an addition to the valuation allowance of $2,200,000 due to a decline in longer term interest rates.
Wealth Management revenues were $17,600,000 for the quarter, an increase of 1.7% from the Q1 and an increase of 31% from the prior year. Moving to Slide 7. Non interest expenses were approximately $141,000,000 in the 2nd quarter, down $38,000,000 linked quarter. This decline was largely due to $32,000,000 of debt extinguishment costs we recorded in the Q1 related to our balance sheet restructuring. Excluding those items, our remaining expenses declined approximately $5,000,000 primarily due to lower salaries and benefits expenses compared to the prior quarter.
This was due to lower bonus accruals, the full quarter impact of our cost reductions and the absence of a onetime COVID bonus paid to frontline personnel in the Q1 of 2021. We also saw seasonal declines in occupancy expense of approximately $1,500,000 Our effective tax rate was 16% for the quarter consistent with the Q1. Slide 8 gives you more detail on our capital ratios. As of June 30, 2021, we maintained strong cushions over the regulatory minimums and our bank and parent company liquidity remain very strong. On Slide 9, we provide our updated guidance for 2021.
We expect our net interest income to be in the range of $640,000,000 to 660,000,000 dollars We expect our provision for credit losses to be in the range of $10,000,000 to $20,000,000 We expect our non interest income to be in the range of $220,000,000 to $230,000,000 And we expect operating expenses, excluding charges related to the balance sheet restructuring to be in the range of $560,000,000 to $570,000,000 for the year. Lastly, we are aware that many of you look at pre provision net revenue or PPNR as a key metric to assess the profitability of core operations. We also know that many of you calculate this metric differently. We've included our version of this metric in the financial tables of our press release. We would also like to point out a couple of additional items to consider as you assess our PPNR results.
First, our PPP fees earned have declined $7,500,000 from the Q1 to the 2nd quarter. Also, MSR valuation allowance adjustments resulted in an $8,300,000 swing from a $6,100,000 decrease in the valuation allowance in the 1st quarter to a $2,200,000 increase to the valuation allowance in the 2nd quarter. When considering these additional items, we believe our PPNR has shown marked improvement from the Q1 to the 2nd quarter as a result of our Q1 balance sheet restructuring, earning asset growth and better cost containment. With that, we'll now turn the call over to the operator for questions. Ashley?
And your first question comes from Frank Schiraldi with Piper Sandler.
Good morning. Good morning, Frank.
Good morning, Frank. Good morning, Frank. Good morning, Frank.
Just wondered, I realize that there hasn't been any change to NII guide. Just wondering about some of the moving parts there. And I wondered if you could talk a little bit about outlook for loan growth and within that commercial loan growth in the back half of the year.
Yes, Frank. For the NII guide, there is as you've seen so far this year, we've recognized $19,500,000 $11,500,000 in PPP fees in the 1st two quarters of the year. We still have $35,000,000 to go. And the timing of that, I mean, we have our own estimates as to when that will be recognized, which may differ from yours. But we would anticipate to possibly see a slight decrease in PPP fees in the Q3 and then have that step back up again in the Q4 just based on the timing of this 3rd wave of PPP recognition.
And then we've seen results now through the first half of the year. We would expect business results to improve in the back half of the year and Kurt can give you more color on that.
Yes, Frank. So we look at originations commercial originations in the 1st 2 quarters. They were pretty consistent. The second quarter, we saw elevated prepayment activity. So I think the growth as we look forward would be based on what prepayment activity is.
The pipelines have been building over the last 6 weeks. And as things reopen and business activity we do think pipelines will continue to grow. So we think we have more momentum in the second half. I think the growth will depend though on those prepayment factors. Just as an additional information, car dealers, our floor plan portfolio linked quarter was down $70,000,000 because car dealers can't get cars.
So floor plans are not as utilized as they were. So things like that can provide us some momentum in the second half.
Okay. And then you mentioned, Phil, you looked at some of the deals in terms of M and A that have taken place in market. Is it fair to say that you feel you can more actively pursue deals in the back half of the year given your confidence level now in macro environment? And I wondered if you could just remind us of what's sort of too small in terms of asset size to pursue in terms of whole bank deals? Thanks.
Yes. I mean, I think we'll be as active as there are opportunities, Frank. And I think they'll continue in the second half of the year. We'd like to be looking at banks over $1,000,000,000 but it wouldn't be impossible that we could look at something smaller that was really strategically positioned well within our footprint.
Great. Okay. Thank you.
Your next question comes from Daniel Camacho with Raymond James.
Good morning, guys.
Good morning, Dan.
Good morning, Dan.
Good morning, Dan.
Maybe if I could dig into the NII from the NIM side a little bit. What is your assumption for excess cash levels? It sounds like they increased again in the Q2. What is your assumption for those levels within the guidance for the rest of the year?
This is Dan. And our guidance is that they tick up a little bit again during the Q3 because that's when we tend to see our muni business at its high watermark for the year and then coming back down a little bit in the back half. But candidly, we don't see much decline in the excess cash levels because I think as an industry, we've been wrong as an industry as to deposit levels. And deposit levels continue to stick around longer than we anticipate. So while we'd like to run with a lower level of cash than we currently have, I think the expectation is going to remain elevated certainly through the end of the year.
Okay. Thanks for that. And then switching over to fee income. I heard the comment you made about the interest rate swaps within capital market income going back to normal. What kind of environment do you need for that?
Do you need rates to go up from here? Do you think this level of swaps would be kind of the run rate assuming we don't get an interest in rates? Or even without that you think that this was a depressed level in the Q2?
Yes, Dan, it's Kurt. Just a little more color there. The Q2 was a light quarter for us. We were putting more fixed rate loans on the balance sheet. We are continuing to offer that.
It really comes up comes down to loan origination mix and larger deal mix and types of loans. So we do think linked quarter as we look at the Q3 will be stronger. And again, just to remind you, we're coming off the high watermark. I think we did $16,800,000 last year, which was our best year ever from that. We do expect it to moderate from there.
But again, the 2nd quarter was light.
Light. Great. I appreciate the color. Thanks for answering the questions, guys.
You bet.
Your next question comes from Russell Gunther with D. A. Davidson.
Hey, good morning, guys.
Hi, Russell.
I wanted to
hey, I saw
a follow-up on the expense comments earlier, let's see if I caught this right. So you guys have done a really nice job keeping a lid on that and the recent initiatives. Can you just remind us of those previously announced, are they fully in the run rate now as of the Q2? Or is there more to come?
Yes, they are. They're fully in the run rate. But remember, Russell, when we announced that $25,000,000 we did say that we were going to invest a portion of that into some of our digital technology initiatives. So if you look at our income statement, you can see on the category for data processing and software, you can see the 1st 2 quarters of this year, that's been running anywhere from $1,000,000 to $2,000,000 higher per quarter than what our run rate was in the prior year. So that's going to be the one offset to those cost savings.
But other than that, yes, you should expect them to be fully in the run rate.
Okay. That's helpful, Mark. And then I guess as you look out and start thinking about 2022, do you contemplate additional initiatives to continue to keep a tight lid on expenses? Are there opportunities to do something similar going forward?
I think there will be constant reinvestment in our franchise, but I don't anticipate there being investment in the franchise that's going to change the trajectory of our expense levels. I would expect at this point that there would be nominal increases in certain categories, but nothing materially off the run rate that you've seen.
Okay. That's great. And then just switching gears, Phil, you touched on the buyback a bit in prepared remarks and with the discussion around M and A. I mean, how should we think about you guys being active or not with repurchases? Is it more a hope to land a deal and so we shouldn't expect to see in the market?
Or how are you guys contemplating that?
I'd say, Russell, it would be driven more by the price of our stock. So we do think we have enough capital to do a deal and buyback, but we want to do both of them at the right price.
Okay, understood. And so thanks for that. And then just a reminder as to sort of what that price to tangible book multiple or earn back is for repurchases for you guys?
Yes. So if you look at kind of current levels for us right now, that ends up being a buy a TPV dilution earn back of about 2 point 2 to 2.5 years, if you're kind of in the mid-15s right now, which is fairly attractive relative to certain M and A transactions. So it'd be kind of equivalent to buying a bank that's
Good morning, guys.
Good morning, Eric.
First question, I guess, for Mark maybe on your comments about the gain on sale margins declining for the residential mortgage. I think you said from kind of the 3% range down to about 185% or so now. Curious, is that largely just market dynamics or has there just been a change with you holding more of those loans on your balance sheet and what you're putting into the secondary market? Curious what's impacted that? And then I guess second part would just be, do you think those gain on sale margins settle out here in this range or is there more downward pressure as we move through the year?
Yes. I think it's more been I mean, while we have shifted the mix a little bit in terms of our originations, have shifted a little bit from last quarter. They're about 49% purchased, 51% refi. To this quarter, they were 60% purchased, 40% refi. So there's been a little bit of a shift in terms of product type.
But I would say it's more just demand for product has driven down gain on sale margins. And if you look back to where we were sort of Q1 of 'twenty and earlier, so going back to pre pandemic, you had a 4 or 5 quarter stretch there where our gain on sale spreads were fairly tightly banded between about 135 basis points and 155 basis points. We would expect in our original expectations internally what was that it was going to migrate back to that by the end of the year. I think things came down a little bit more quickly than we anticipated in the second quarter, But I think where we're going to end up by the end of the year is still going to be in line with our expectations for spreads.
That's great detail. Thank you. And then the second question for me. Phil, I believe in your prepared remarks, you mentioned that you're bringing more of your workforce back to the office starting in September, but there'll still be a component that works remotely. Curious what that ultimate kind of percentage of employees that will work remotely will be kind of compared to pre pandemic levels and how that just makes you think about your real estate needs going forward over the mid to long term?
Yes. So pre pandemic, I'd say we had a few people who worked remotely. As we are moving forward, I'd say 6% to 10% of our staff will be fully remote. A big chunk will be hybrid. So we will be looking at all our real estate, and I would suspect over time, it would decrease.
Great. Thanks for taking my questions today.
And your next question comes from Matthew Preiss with Stephens Inc.
Good morning. Good morning. Hi Matt. Hey, I
was hoping for a little bit of more detail on the interest rate sensitivity loan portfolio. So last quarter you provided that I think you had $12,600,000,000 of loans either tied to prime or LIBOR. How much of that is subject to floors where you wouldn't benefit from higher rates until rate hike 2 or 3? And maybe talk a little bit about the last rate cycle where we really didn't see loan yields inflect until the second or third hike along the way. Any differences this time you expect?
Yes. So Matt, we have about $2,500,000,000 of loans that are currently at their floors. We have total loans with floors is about 4,800,000,000 dollars But we have no loans that are below their floor. So your question really gets to if there's a rate increase, would we need to see 2 before rate impact? The answer is really no.
On that, we would see sort of the full reset of that with rate increases.
Okay. So we wouldn't see the same delays last time?
We would not.
And then the other question I had is residential loans continue to drive or a big portion of the recent loan growth. Balance is there up to 19% of total loans. At what point do we start to see you take your foot off the gas pedal where exposure is enough and where you sell more of the production versus retaining?
Yes. So we continue to be asset sensitive, one of the more asset sensitive banks that we track in our peer group. So we think there's still room to continue putting high quality customer based mortgages on our balance sheet. We have based on our current origination levels, I mean, I think there's capacity to at least through the balance of this year to continue to do that. And your trade off is that again, right now, if you're year to date, we've taken $230,000,000 of production that we haven't sold.
We just said in the Q2, our average gain on sales spread was 185 basis points. So there's a real short term impact right there about $3,500,000 to $4,000,000 in mortgage banking gains. When you put those loans on your books, you have a year 1 reserve that you have to put on one of those residential loans under CECL. But then if you assume that those loans are going to stick around on your books for 5 or 7 years, then there's going to be a very material positive impact to your NII having those mortgages on the books versus say, the alternative right now with that $1,400,000,000 $1,500,000,000 of cash we have and deploying that into MBS, let's just say, versus those residential mortgages.
Okay. And could you talk a bit about the securities portfolio outlook for the balance of the year?
Yes. I think I would expect it to stay pretty range bound from where we ended up in the Q2. We did I mean a lot of that depends on obviously where the tenure goes and the last couple of days it's been going out of the opposite direction. But we as I said in my prepared comments, I mean we selectively redeploy some of that excess cash in MBS as longer term rates went up. We'll continue to be opportunistic to maybe put some of it there.
But we don't want to extend duration too much in the investment portfolio because our investment portfolio is primarily there as a liquidity tool. And ultimately, we want that excess cash balance to be redeployed into loans as opposed to investment securities.
Understood. Okay. Last one for me. As I exclude commercial swap fees, the other commercial fee income line items, so merchant card income, cash management, other commercial banking, all really nice quarters, up sequentially. What were the drivers behind those type of fee income improvements?
Yes. I would just point to increased business activity and underlying transactional activity as well as effectively managing the earnings credit that would offset any of those fees on the treasury business. But we're seeing increased activity in business in all those categories.
Do you feel like these kinds of levels are sustainable or levels you can grow off of from here?
Yes. We expect them to continue to grow. We'll see what pace they grow and it will really be tied to kind of underlying business activity of our customers, but we do anticipate them continuing to grow.
Okay. That's all I had. Thanks for taking my questions.
Thanks.
At this time, there are no further questions. I will hand the call back for closing remarks.
Well, thanks everyone again for joining us today. We hope you'll be able to be with us when we discuss Q3 results in October.
That concludes today's conference. Thank you for your participation. You may now disconnect.