Greetings, ladies and gentlemen, and welcome to the BB&T Corporation October the 17th third quarter 2019 quarterly earnings conference. Currently, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If you wish to queue for a question, please signal by pressing star, then one. As a reminder, this event is being recorded. It is now my pleasure to introduce your host, Mr. Richard Baytosh, Director of Investor Relations for BB&T Corporation. Please go ahead.
Thank you, Johnny. Good morning, everyone. Thanks to all of our listeners for joining us today. On today's call, we have Kelly King, our Chairman and Chief Executive Officer, Chris Henson, our President and Chief Operating Officer, and Daryl Bible, our Chief Financial Officer, who will review the results for the third quarter and provide some thoughts for the fourth quarter of 2019. We also have Clarke Starnes, our Chief Risk Officer, participating in the Q&A session. We will be referencing a slide presentation during the call. A copy of the presentation, as well as our earnings release and supplemental financial information, are available on the BB&T website. Before we begin, let me remind you, BB&T does not provide public earnings predictions or forecasts. There may be statements made during the course of this presentation that express management's intentions, beliefs, or expectations.
BB&T's actual results may differ materially from those contemplated by these forward-looking statements. In addition, in connection with the proposed merger with SunTrust, BB&T has filed with the SEC a registration statement on Form S-4 to register the shares of BB&T's capital stock to be issued in connection with the merger, which contains a joint proxy statement prospectus that has been sent to the shareholders of BB&T and SunTrust. Please refer to the cautionary statements on page two regarding forward-looking information in our presentation, our SEC filings, and the legends on page three that relate to additional information and participants in the solicitation. Please also note that our presentation includes certain non-GAAP disclosures. Please refer to page two and the appendix of our presentation for the appropriate reconciliations to GAAP. Now I'll turn it over to Kelly.
Thank you, Rich. Good morning, everybody, and thanks for joining our call. This is really a very strong quarter for BB&T, especially when you look at the amount of work and effort that is going into preparing for our MOE with SunTrust, which is going very well, and I'll talk about in a bit. It was a quarter that was driven primarily by our non-interest income. Loan growth is very strong, ex a $4.3 billion mortgage sale, which we'll talk about a little bit later. We're making excellent progress on our MOE with SunTrust, and I'll talk more about that in a bit. Just looking at some of the numbers, our adjusted net income was $832 million, up 3.7% versus comparable quarter. Diluted EPS on an adjusted basis was $1.07, up 3.9% versus comparable quarter.
Very respectable returns on adjusted basis, ROE, ROCE, and ROTCE, respectively, were 1.5%, 11.36%, and 18.07%. Excuse me. Our taxable equivalent revenue was at $3 billion, up 2.5% versus third quarter. Our fee income was very good, $1.3 billion, up $64 million or 5.2%, which is a good bit better than our earlier guidance. It was driven by mortgage banking, which was up 42%. Insurance is really outperforming, up organically 8.7% versus third quarter of 2018. Chris is going to give you more color on that in a bit. Also investment banking and brokerage were up 12% on a like quarter basis. Loans held for investments were actually down 4.8%, but again, if you exclude this $4.3 billion mortgage sale, we're up 6.5%, which was over our guidance.
Daryl can give you more detail if you have questions. The $4.3 billion mortgage sale was simply purchase loans that we had purchased at a premium. They were paying off at an accelerated rate. It made sense for us to effectively redeem those or sell those. It improved our rate positioning going forward. Our reported NIM decreased five basis points to 3.37. Core NIM decreased also five basis points. If you exclude the loans sale reported and core NIM only decreased two basis points. Again, Daryl will give you a lot of color with regard to that. Our adjusted efficiency ratio was 57.1, down slightly from 57.3 on a common quarter. Expenses reflect higher incentives and commissions versus third quarter 2018 due to the improved performance in insurance, mortgage banking, and investment banking and brokerage. Credit quality was just really strong.
We'll answer questions about that, but across the board, credit quality continues to be very strong. We did have some strategic activity during the quarter. We redeemed $1.7 billion of preferred stock and replaced it with a like amount at a lower cost. It was just a really good economic transaction. We did sell the $4.3 billion I just talked about. We did increase our dividend 11.1% at the July meeting, which is a very healthy three-plus % dividend yield. We also did receive shareholder approval, which is nearly unanimous, BB&T and SunTrust, on the merger and on the name. We have named 75% of our Truist leaders.
I'm going to give you a little more detail in just a minute about the overall really positive progress that we've made with regard to the upcoming merger. If you follow along on page five on the selected items, just to call these out, as I said, we had the preferred stock redemption, where we were covering the expense of the capitalized insurance cost. That was $46 million pre and after-tax, a $0.06 a share negative hit. Incremental operating expenses relating to the merger was $40 million after-tax. That was a $0.05 negative hit. Merger-related restructuring charges, $26 million after, which is $0.03. On the positive side, we did have a gain on the impact of the mortgage sale. That was a positive $0.02. When you net that out, we had a negative impact on EPS of $0.12 for the quarter.
If you want to take a look at the next slide six on loan growth. I feel really good about loan growth. If you look at the underlying performance, again, ex the mortgage sale, we had 6.5% annualized. It was very strong, I think, relative to what's going on in the marketplace and what's happening with a lot of our competitors. Very pleased with C&I. Was up 7.6% third quarter to second quarter annualized. We did have a very low performance in CRE, very much by design, because we talked to you the last couple of quarters, we've been dialing back because we see some fluffiness in some of the CRE categories, and so we're being careful about that. If you look on the table, I won't go through all of them.
If you look on the table on page six, you'll see that the C&I performance is really broad-based across eight or 10 different categories. It's not just a one-off type of loan category performance. It's really, really broad-based, and that's very, very good. Mortgage loan, by the way, did do very well. They were up 7.4% versus second quarter once you exclude the sale. Just talking a little about what's going on in the marketplace. As all of you, I'm sure know, it's difficult to figure out what's going on with all of the conversation, much of it rhetoric. What I try to do is just talk to our people, talk to clients, and see what's going on. The fact is today, as I just indicated, our clients are still borrowing. They still feel basically confident. Our production and our pipelines are very strong.
I will tell you that there is more conversation going on today about concerns about the trade wars. It's beginning to create a level of uncertainty. Even though the economy is still strong today, over time, uncertainty will begin to enter way in terms of negatively impacting the economy. We saw some negative retail sales yesterday. Is that a one-off? We just don't know. I personally think it's challenging for all of us to be calm right now and not try to draw huge conclusions over individual anecdotes that pop up every day or sometimes multiple times during the day. It's better, in my view, to back away and take a long view. The truth is, the long view of the U.S. economy today is very strong.
We do have these clouds around the globe in terms of Brexit, although there was some potential positive good news out of that this morning. I personally think we'll have a reasonable trade deal with China by the end of the year. I personally think we'll have the new NAFTA approved, and we'll head into 2020 with substantially better sense of feeling of confidence than we have today. I could be wrong, and that's why we're being very cautious in terms of everything we do, in terms of capital liquidity and diversification, because we simply are in an environment where to place a high bet on any one scenario, up or down, is not a smart bet. We're being cautious. We're basically guiding to neutral with a slight psychological tint towards the upside, which we think will serve us well.
If you look at tab, page seven on deposits, I was very pleased with deposits. This is kind of the big story today. How do we all react to the substantial decline in the long end, the potentially inverted yield curve with back and forth kind of every day? It's very challenging for everybody. We're doing very well. Our total deposits, third to second, are up 5.2%. We are managing the categories. For example, our non-interest bearing deposits are down 1.4%. That's kind of the normal kind of disintermediation that's going on across the industry today. 1.4% is really pretty low in that environment. Our money market and savings are up 9.6%. That's looking very good. We've seen some movement in the categories. When you get through that, 5.2% is very, very strong.
We're seeing a little movement in our mix, but our non-interest bearing deposits are holding strong. Client deposits relative to national market funding actually increased 3.6% annualized versus to the second quarter of 2019. Our cost of interest-bearing deposits was 0.99, down three basis points versus second quarter, and cost of total deposits was 0.67, down one basis point. Really good management of that by Daryl and Don and all of our people in treasury. I feel very good about that. It'll be problematic as we go forward if we have some substantial spike down or up, we're not expecting that. We're planning to be relatively neutral going forward, with a psychological little bent up. With that, let me pass it over to Daryl.
Thank you, Kelly. Good morning, everyone. Today, I'm going to talk about our excellent asset quality, margin dynamics, solid fee income, expenses, and provide guidance for the fourth quarter. Turning to slide eight. Asset quality remains excellent. Net charge-offs were $153 million, up three basis points as a percentage of average loans. This is largely due to indirect loan seasonality and the resolution of a commercial credit. Our non-performing asset ratio was 22 basis points and is better than the previous low seen in 2006. Continuing on slide nine, our allowance coverage ratios remain strong. The allowance ratio was primarily impacted by the sale of 4.3 billion of residential mortgage loans and the resolution of a commercial credit, which lowered the reserve for unfunded commitments. Including these one-time items, the allowance to loan ratio remained at 1.05%. The provision was $117 million below net charge-offs of $153 million.
Turning to slide 10. The reported net interest margin decreased two basis points after adjusting for the sale of residential mortgage loans and related reinvestments. You might recall that the timing differences between the settlement of the mortgage sale and the securities reinvestment temporarily increased earning assets by about $2 billion and impacted the margin by three basis points. Excluding these items, core margin was also decreased two basis points. Net interest margin was impacted by lower rates, which reduced annualized yields by seven basis points on the loan portfolio and two basis points on the securities portfolio. The cost of interest-bearing deposits decreased three basis points, which partially offset the drop in asset yields. We pre-invested $5 billion in securities late in the third quarter to build liquidity for the merger. That reduced our asset sensitivity.
This also creates negative pressure on our stand-alone margin in the fourth quarter. In addition, we are evaluating opportunities to restructure our balance sheet as we wait for the merger close. Continuing on slide 11. Non-interest income was $1.3 billion, up 5.2% versus like quarter. Our fee income ratio was 43.4%, down seasonally from 44.4%. Insurance income was down $79 million due to seasonality, but increased 8.7% from a year ago on firming market pricing and organic growth. Mortgage banking income was stable as higher production and servicing-related revenues of $24 million were offset by a decline of $25 million in net MSR valuation. Investment banking and brokerage commissions were relatively flat, but up 12% versus last year. This was primarily due to higher managed fee accounts. Service charges on deposits increased $7 million, partly reflecting more days in the quarter.
Other income increased $35 million, primarily due to a $23 million increase in income related to assets for certain post-employment benefits and $17 million for client derivatives. Turning to slide 12. Non-interest expense was $1.8 billion, an increase of $89 million. The increase was largely driven by MERCs and MOE expenses, which are up a combined $54 million. MERCs totaled $34 million, which included relocation expenses, legal fees, project management costs, and professional services. MOE expenses were $52 million, which included $39 million for personnel and $12 million for professional services. You can see the details on page 16 in our quarterly performance summary.
Core expenses were up $35 million, including $9 million increase for professional services, $6 million increase in personnel expense, which includes $23 million increase for certain post-employment benefit expense that was offset by decreased incentives and equity-based comp, and a $19-million increase in other expense due to higher advertising and marketing costs and other items. Expenses increased 1.7%, or $30 million from last year, excluding MERCs and MOE expenses. Year-over-year increase in adjusted non-interest expense was primarily driven by an $18 million increase in personnel expense due to higher incentives, $34 million increase in expense reflecting higher non-service related pension expense, higher operating charge-offs, higher advertising and marketing costs, which is partially offset by a $17 million decrease in regulatory charges. FTEs were essentially flat versus second quarter, but down approximately 1,500 from a year ago. Turning to slide 13. Capital and liquidity remain strong.
The CET ratio was 10.6%, up 20 basis points due to strong earnings and the mortgage loan sale. The dividend payout and total payout ratios were 46.9%. We issued $1.7 billion of preferred stock and redeemed a similar amount of higher cost issuances, which will save $4 million per quarter and have an earn back of 2.8 years. Our modified average LCR ratio was 139%. To build liquidity for the merger, we pre-invested high quality liquid assets at the end of the third quarter to facilitate compliance with the LCR ratio for Truist. We issued debt to build parent company cash, which now exceeds $10 billion. These actions will provide negative pressure to BB&T's net interest margin but is prudent for Truist starting out with very strong liquidity. Let's turn to slide 14 to review cycles.
Community Bank Retail and Consumer Finance net income increased slightly to $446 million. Fee income decreased $15 million, primarily due to the decline in the net MSR valuation, partially offset by increased production revenue. Average loans and leases decreased $2.5 billion, reflecting the mortgage loan sale. Loan yields increased 12 basis points, while interest-bearing deposit costs were down four basis points. Non-interest-bearing deposits were about flat. In residential mortgage, originations were up 11% from second quarter. Production mix was 68% purchase and 32% refi. Excluding the mortgage loan sale, again, our sale margins declined 28 basis points due to a mix change to higher correspondent production. Continuing on slide 15. Community Bank Commercial net income increased $19 million to $338 million. Loan production increased 22% as higher C&I and CRE production offset lower dealer floor plan production.
Loan yields were down 17 basis points versus interest-bearing costs down only one basis point. Non-interest-bearing deposits were essentially flat. Turning to slide 16. Financial Services and Commercial Finance net income was $185 million, an increase of $16 million. Total revenue increased $26 million, primarily due to higher Grandbridge income, capital markets, and client derivative revenue. Average loan balances grew 7.6% annualized, helped by equipment finance and corporate banking. Loan yields were down 15 basis points, and interest-bearing deposit costs were down 13 basis points. Non-interest-bearing deposits were flat from last quarter. Additionally, invested assets increased $2.7 billion versus linked quarter and $5.3 billion versus last year. Turning to slide 17. Insurance Holdings net income decreased $50 million to $61 million, primarily due to seasonality. Now, I'll turn it over to Chris to provide more perspective on our performance this quarter.
Thanks, Daryl. If you turn to page 18, the purpose of these two slides really is to reinforce our transformation plan that we call IHOP. It's Insurance Holdings Operating Plan. Continues to gain momentum. This is the plan John Howard shared with you last fall at Investor Day, and it's really built with assistance from BCG a little more than one year ago, about 15 months or so, and built around 32 initiatives that we're working to execute over the next three years. As I said, we're about one year in. It includes implementation of new operating models, both in retail and wholesale, and a myriad of other revenue growth and expense synergy initiatives. If you look at the upper left-hand chart there on page 18, you can see revenue for the segment is up 9.3% or $44 million like quarter.
As I've pointed out a number of times in the past, really three drivers to strong organic growth. First is good client retention. In retail, we're up about 91%, wholesale, about 76%. New business volume, not renewals, totally new business volume is up 17% like quarter. That's the best number that I ever remember seeing. What's more impressive is it has built each quarter throughout the year. The third driver really is pricing. On the heels of the two largest insurable loss years in 2017 and 2018, we're continuing to see price lift because of tightening capacity in the market. For example, second quarter was up about 3.5%, this quarter up about 4%. Retention, new business, and pricing is really driving the result you see in the lower left-hand corner of organic growth.
Our organic growth is up 200 basis points to 8.7% in the quarter, which is about double what we would expect to see in the industry. We expect probably mid-fours in the industry. We believe the backdrop allows for additional tightening in capacity and continued lift in pricing as we go through 2019. You flip over on page 19, I would say that IHOP was really designed to help us drive, be laser-focused on enhancing the margin, and then using the dollars of EBITDA production to reinvest in the business. We have, I'll just point out, in almost every business, new technology implementations, which will help both revenue and cost in the future. You look at the chart in the upper left there at EBITDA, you can see absolute EBITDA is up $24 million like quarter of 27.6%.
The strong organic growth that I've shared with you on the prior page combined with good solid cost control. Then the third leg was really, you would remember we acquired Regions July of last year. We're now 15 months into that, and we have exceeded all of our expense and revenue synergies. The combination of those three things have really helped us drive the result in the lower left chart on page 19, which is EBITDA margin. You can see our margin like quarter is up 310 basis points to 21.4%. Now, this is the lowest quarter of the year for us. If you look at what our year-to-date margin would be, it would be in the 25% range. A lot of improvements have been made in margin enhancement.
Lastly, I'd just leave you with a lot of focus on using data and analytics to really help our underwriters better understand the true risk of the client, which helps them long term, keep their rates down. I would say that's especially in wholesale. In summary, just continue to be very pleased with the progress that we have made in insurance. I'll turn it back to Daryl.
Thank you, Chris. Continuing on slide 20, you will see our outlook. The following guidance is based on BB&T standalone. We continue to expect the merger with SunTrust will close in the fourth quarter. We expect total loans held for investment to be flat versus third quarter, mainly due to seasonality. Excluding this, loans will be up one to 3% versus linked quarter. We expect net charge-offs to be in the range of 35 to 45 basis points. The provision is expected to match net charge-offs plus loan growth. We also expect GAAP and core net interest margin to be down seven to nine basis points. As we discussed earlier, we are building liquidity for the merger for LCR, our liquid asset buffer and parent company cash. This will negatively impact net interest margin by approximately three to five basis points in the fourth quarter.
Adjusted for the liquidity build, we expect net interest margin to decrease three to five basis points. We anticipate fee income to be up 2% to 4% versus like quarter, driven by insurance and mortgage banking. We expect expenses, excluding merger-related expenses, to be flat versus like quarter. We expect one-time expenses for the MOE to be about $60 million-$80 million in the fourth quarter, mainly driven by personnel and professional costs. We anticipate an effective tax rate of 20%-21%. Finally, BB&T's full year guidance remains intact. In a challenging rate environment, we will continue to grow our revenues faster than expenses, driving positive operating leverage, which will be more pronounced once we close the MOE. In summary, the quality of our core earnings this quarter was excellent, resulting in strong loan growth, solid fee income versus last year, and excellent asset quality.
Let me turn it back to Kelly for updates on the merger of equals and closing Q&A.
Thanks, Daryl. As you can see, it really was a great quarter. I particularly highlight the work that's been done in the loan area and the expense area and the insurance area. All very, very good. Let me just give you a few comments with regard to the merger update, which is going extremely well. Our executive management team, which is the 14, out of the seven have been staff, continues to meet weekly. The team is working extremely well together. I cannot be more pleased. If you were a fly on the wall watching us meet, you would have thought we'd been working together for years and years and years. Bill and I are working together extremely well. The whole team is working together well, and I must tell you, I really appreciate the focus of the team.
The focus is working together, and we're focused on the goal of making Truist number one best financial institution that we possibly can. Making great progress in terms of naming the key leadership. Recently, we've named 8,000 positions, which is about 75% of the leadership roles. We believe that by legal day one of close, virtually all positions will be named, and everybody will be ready to go. We've been very successful in meeting our diversity goals, which is one of our primary focuses. We've done a really good job of picking our benefits programs going forward for Truist. One of the great things about an MOE is you really get a chance to look at both companies and pick the best of each side. That's what we've done with regard to benefits. We're going to have a world standard benefit program.
Remember, for it to work for our clients, communities, and shareholders, it really must work for our teammates and associates. We feel really good about that. We've had some marks in terms of activity. July 30th, SunTrust and BB&T shareholders both almost unanimously approved the deal and the name. With regard to the regulatory process, it has been approved by the North Carolina Commissioner of Banks, which is very important. The next step is approval of our divestiture plan by the Department of Justice, and then we believe that the remaining regulatory approvals will follow. We feel good about where things stand with the regulators. They are being deliberate given the size and significance of this deal, as they should be, and as we are being.
Everybody has the same goal, making sure that when we move forward with this, that we've dotted all the i's and crossed the t's. Given all of that, we believe that we are still on track for a closing in the fourth quarter. We can't guarantee that. We believe that we are based on all of the information that we have at this time. We've made really good progress in the last several months with regard to merging the technology of the two companies. During September, we finalized the vast majority of the technology ecosystems. Remember, what we try to do there is we pick the best of breed. If SunTrust has the best teller program, we pick that program. If we have the best loan system, we pick that system.
The end result is you get really first-class systems across the board, which is fantastic. We did recently complete a dress rehearsal for legal day one close. There were about 100 merger-related work streams that had to be tested, and they all passed very well. We're absolutely ready for the legal day one close. Very importantly, we have had two off-site several day meetings, working on developing the Truist culture. This has not been a process of throwing out BB&T and throwing out SunTrust. It's been a process of taking the best of each one. I've been extremely excited about how this has worked. The culture, as we define it, is our purpose, our mission, and our values. The various activity approaches, kind of the way we do things around here. We've already agreed to our purpose, our mission, and our values.
I'll tell you that Bill and I are very passionate about this process. We believe it's the most important part of the entire journey, and we could not feel better. The teams had a complete meeting of the minds. Good discussion, but no aggravated interaction, no real divergent views, just really fine-tuning wording in terms of how we present this to the world. Frankly, it has gone extraordinarily well. We could not feel better. Our teams are 100% aligned. I will tell you, as we roll this out later, that our purpose, mission, and values are engaging and very exciting. As we go forward, once we have legal day one, there'll be a number of things that'll happen.
The first thing is we have to affirm to the board all the various committees and policies and practices, all of which are being worked on now by various groups, so that we're ready to go day one to present all of that to the new company board, Truist Board, to be able to approve all of that. We will share shortly after that our purpose, mission, and values with all teammates. We think that's our number one job, is to get out. We plan kind of a roadshow, if you will, to get out and talk to our teams across the entire enterprise about our culture. We are working into our marketing area on our branding plan, closing in on that, making really good progress. That's very exciting. As that rolls out, it will be more excitement.
We remain importantly very confident in achieving our $1.6 billion in net cost saves. I would simply point out to you that we have not included in any of the numbers any revenue opportunities, but we're doing a lot of work on that. Bill and Chris are leading the effort with regard to focusing on revenue opportunities. There are, I don't know, 20 different work streams right now, in terms of pretty low fruit. We wanted to be conservative in our projections. I'll just tell you, there are huge opportunities when you combine these two companies, because there's virtually no overlap. There's just opportunity to take what SunTrust does and bring it over to BB&T, and take what BB&T does and take it over to SunTrust. We know how to do that. We're very excited about that.
I'll tell you that when we announced this deal back in February, I was very excited. Today, I'm even more excited. I'm more confident than before. Here's why. The deal is basically the same. The synergies are as good as they were. The economic opportunity is good. The transformative nature of this, in terms of making the world better, is as good. Now, nine months into the process, I feel even better because our executive team is deep, it's strong, it's committed. Our teammates are excited. They see that world the same. They see the opportunity the same. We truly believe that we can help our clients have a brighter financial future. We can create a place where our teammates will enjoy and have a long and fulfilling career. We believe our communities need help today. The world is changing really fast.
We are having a dramatic increase in the gap in terms of economic inequality. We don't feel good about that. We want to do our part. I can tell you that legal day one, Truist will be ready to be a leader in finding solutions to making life better. Of course, we will, through all of these efforts, optimize the long-term return to our shareholders, which we feel very confident about. I want to thank Bill and the SunTrust team and all of my fellow BB&T associates. I want to thank you for all the hard work that has gone into it. Very soon, we will be one team, and I will tell you all, we are ready to go. Back to you, Richard.
Thank you, Kelly. John, at this time, if you would come back on the line and explain how our listeners can participate in the Q&A session.
Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for. We will now take our first question from John McDonald of Autonomous Research. Please go ahead, sir. Your line is open.
Hi. Good morning. I wanted to ask Daryl just a question on the fourth quarter outlook. When we kind of combine the outlook for loans to be relatively flat and NIM to be down, if we add in, and I guess average securities are probably up given the liquidity build, how does the dollars of NII look? How should we think about that for the fourth quarter?
I would say, John, that if you look at it linked quarter, it'll probably be down a touch, just because of the drop that we have in margin and flat earning the assets for the most part linked quarter. A lot of that is just due to seasonality on the loan side, like I said in the prepared remarks. The margin decline, core margin's really down 3-5 basis points. The rest of it is just due to building up excess liquidity for the combination with SunTrust so that we can have strong liquidity, LCR ratios, and just strong overall cash on hand. How we're going to run our company.
Got it. That's great. Just a bigger picture question in terms of the Truist MOE. With the environment's changed since February, and you've also had a chance to fine-tune your assumptions with the third-party review. Do you have any updates on kind of the financial targets that you set out for the 51% cash efficiency and the ROTCE of 2022? Obviously, there's a lot that's changed and it's further out, but any updates on that?
John, this is Kelly. The market is substantially different than it was back in February. The most difficult thing to zero in on today is efficiency ratio because the denominator is under a lot of pressure. We believe with regard to our efficiency ratio, whether we hit 51 or not, we believe we will be top in class in terms of our efficiency ratio. I would say I feel more confident in the 22% return on tangible common equity. Regardless of whether the numbers are exactly what we said nine months ago, because the world has changed, we think we'll be a top performer. Daryl, any comment on that?
The only thing I would say, John, is we still don't have 100% clarity between both companies. We have high-level estimates. I would say once we close this quarter, if you give us a little bit of time, a month or so, we'll come out with more clear guidance on a go-forward basis on the timing of our cost saves and how we're going to get the cost saves. We know you guys need that information, and we will provide it for you. We got to get the deal closed, and we have to make sure we understand where all the savings dollars are coming from first.
Totally understand. Thanks very much, guys.
Yep.
Excellent.
We will now move on to our next question from John Pancari of Evercore. Please go ahead. Your line is open.
John?
Sorry about that. Yes. Just back to the deal close discussion. I know, Kelly, you mentioned that you're confident in a fourth quarter close of the deal, but you also indicated you can't guarantee it. Is there anything that's leading you to believe that it could be after 4Q? Any change in your thinking as you're going through the process where you're thinking it could be into next year?
Well, as I said, John, we're focusing on the fourth quarter. Obviously, we are aware that it possibly could slip to the first quarter, and we're doing some thought of that, but most of our focus is on the fourth quarter. We are not aware of any reason today to expect it to go into the first quarter. I only say that today this is beyond our control. This is in the regulatory framework, and they move at their own pace. All we can do is give you our best information based on what we know. Based on what I now know, I still expect a fourth quarter close.
Okay. All right, got it. Thank you. Separately, Daryl, I know you mentioned in your remarks that you're evaluating additional opportunities to further restructure the balance sheet. I know you've already pre-funded the merger as well as sold some of the residential mortgage portfolio, but just want to get if you can elaborate possibly on what incremental actions you could evaluate for the balance sheet. Thanks.
Yeah. John, both companies are looking at their balance sheets very thoroughly right now. As Kelly said earlier, one of the things we want to do when we combine is we want to make sure that our interest rate sensitivity is relatively neutral to slightly biased up a little bit. Try to get it to be more neutral so we don't have a huge impact to NII as rates continue to change. We also, as I said earlier, want to have strong liquidity. From a credit perspective, if there are certain portfolios or loans that can be sold that Clarke and Ellen Koebler want to get off their balance sheet, we will take advantage and do that as well.
Lastly, we will look at assets, not so much a decision on the business, but if there's assets on the books that might be marginally not the best performance from a capital return perspective, we might key off shed some of those as well. All that's coming together. We'll have more color on that later in the quarter as we close.
Okay, great. Thanks, Daryl.
We'll now move on to our next question from Mike Mayo of Wells Fargo Securities. Please go ahead. Your line is open.
Hi. It's another question on the merger. You say you have 75% of the leadership roles named. When do you get to 100%? You say you have most of the tech ecosystems identified. What do you have left there? Most importantly, I know you've been asked twice already, but can you put more meat on the bones on the technology-related savings? That was the number one reason for merging so that you can make more tech investments and get more out of tech. What have you learned over these last nine months? Thanks.
With regard to the staffing, I fully expect virtually 100% of all the staffing to be agreed to by around the 1st of November. We're very close. There won't be many that will be hanging out there by the 1st of November. In terms of ecosystems, we've covered all of them. I said there was 100 and that's all of them. We've gone through that very thoroughly. We feel really, really good. That's the first step, by the way, in the whole conversion process. You simply have to decide which ecosystems, and then all the various systems within those ecosystems. All of that is going along really, really well. We are completely on track with regard to that. In terms of the technology savings, it has multiple facets. The first thing is you have redundant hardware, which of course goes away.
You have redundant programmers with regard to because you're operating two different hardware systems and two different software systems. When you pick one system over another system, that necessarily frees up expenses with regard to that. Then, of course, you're thinking in terms of reinvesting for the technology of the future. You're right. When we announced this deal, we said this was really about putting together two companies that, of course, would become more economically sound. Really leaning into the future by investing in technology that will allow us to be a leader with regard to meeting our clients' needs. That's a process that's not as easy, to be honest, as hooking the computers up on the existing systems, because we're having to look at what's available today out there that we don't have.
To be honest, there's not a lot out there today that we don't have. We're in really good shape. If you look at our digital platform, we're constantly rated as number 1, 2, or 3 in the entire system, including all the big banks. In spite of what some people say, we are extremely well-positioned with regard to that. The world's changing really fast. We have to invest a lot to be sure we stay at the top. We're already beginning to do work in terms of thinking about what's the next step? What's the new frontier? What is the next investment that we can make that will substantially improve the lives of our clients? That's what this whole innovation center is all about, is creating a group of teams.
We'll have 20 to 40 agile teams that'll be focusing on improving existing products and services and approaches, but creating new products and services in small business and retail across the board. We are canvassing the world in terms of what's out there. We don't believe in recreating a wheel. If there's something out there around the world that we can bring to our clients, we want to do that. We also recognize that this world is changing so fast that there is opportunity for us to create the new wheel. Innovation is at the heart of this whole process. The mechanics of all that is very complicated. It's really a bifurcated process of hooking the existing computers up, as I say, which I think you kind of chuckle when I say it, but it really is that simple.
It's hooking the computers up, making sure we operate efficiently from day one, and then making sure we're layering on top of that improvements that will make our clients' lives better.
Just one follow-up. November 1st, you have all the leadership identified. That would be good. Culturally, you gave a presentation recently talking about the cultural similarities, and you gave some data, and I didn't really understand that data. It seemed kind of pie in the sky to me. Look, you're close to the situation. You're dealing with the employees. You're saying, "Hey, culturally, we're similar." Many people on the outside who've followed you for a decade or two say, "You know what? You guys really aren't similar, BB&T and SunTrust." I guess, where's the disconnect in the perceptions about the difference in cultures and what you're finding out? Where there are differences, how are those resolved?
Well, I'm not sure which meeting you were talking about, but I don't much believe.
I think it was the Barclays conference.
Oh, Barclays. I don't much believe in pie in the sky. Let's just put that out there. I try to be straightforward and honest about everything I say. That'd be always right. I tell you the truth. What I was referring to is that we've had a number of statistically valid feedback sessions from 20-plus thousand of SunTrust and BB&T clients that have.
Associates
associates, employer associates, that have validated what I said. For example, early on when we were doing the main research, we had 20,000-plus responses to about 10,000 from each side. We gave them a list of 16 words to describe the companies and all groups on both sides picked the exact same four words, which was pretty incredible. Then we did a more sophisticated study in terms of kind of how we do business around here, kind of the behavioral aspects of culture. We were shown by the research people statistically-driven graphs that showed BB&T associate responses and SunTrust associate responses, and it was a virtual complete overlap. Meaning, you go to the masses of our employees, and you ask them, "How do you feel about this or that or the other?" They give you the exact same response.
I get that anecdotally when I'm out traveling around in the field and talking to our people and when I run into SunTrust people. I ask them, "How's it going?" They say, "It's going great. We work together. We have lunch together." Not competitively, but they know each other. They're all friends. They talk about each other just very positively and affirmatively. When you put all that together, I'm quite certain there are no material differences. There's always some differences when these are big companies. I'm sure you'd find something that's different about other companies. Where there are what I call minor differences, they will just fade as we come together as Truist and operate under our new purpose, mission, and values. They will just fade away.
If we were to encounter any material, which we've not, we would deal with it straight up in the executive team, we would reach a consensus and move forward. We've covered a lot of issues at this point. It's been nine months. We have covered a lot of waterfront, and the teams are working great, as I said. We've not discovered material issues that I could say you was a real culture crack. Bill Rogers and I have this working arrangement together where we talk about no light between us. We've committed to each other very deeply that if either one of us sees any light, we get on the phone immediately to talk about it. We haven't found any light there. I'm not saying we won't, but I don't think we will.
We have the mechanism and the commitment and the trust between Bill and I, and all the way through the teams, that if we do have issues, we deal with them promptly, quickly, and decisively.
All right. Thank you.
We will now move on to our next question from Betsy Graseck of Morgan Stanley. Please go ahead. Your line is now open.
Hey, good morning.
Morning.
A couple questions. First, just a clarification, Daryl, on kind of the LCR and the commentary you gave around HQLA and retooling the balance sheet a little bit for post-merger. On page 10, when we look at the change in NII scenarios, and you've got this negative sensitivity both down 100 and down and up 200, I just want to get how you're thinking about what that looks like post-merger, because I don't think you would set yourself up like this on a standalone basis. Just want to understand where this is going and whether or not you had to get ready for LCR even if the tailoring rule didn't go through. In other words, are you carrying a little bit too much HQLA at this stage post-tailoring rule or not? If you could speak to that a little bit.
We're still working on our numbers, at the 85% number. Both companies operate at 70, so we will have to have one form or another higher high-quality assets on our balance sheet. We'll take some form. We started to build that at the end of this past quarter. That's it. From an interest rate sensitivity, by us purchasing those securities, we also did unwind some pay fixed swaps, put on some receive fixed swaps. It did create us so that we improved our sensitivity on the downside, but hard on the upside. Ideally, when we close or shortly thereafter, we would want it to be somewhat symmetrical in that we would still probably lose a little bit on the downside, but benefit on the upside as we work on that.
Donna and her team are working together, and they are coming up with strategies post-legal day one such that we will try to get into that position. You're right, we're kind of caught in the middle of what we're trying to do right now is what you saw at the end of this quarter. We will work towards that, and we'll see how that all comes together. I feel confident we'll get into a position where we need to be post-close.
That's in part because STI is a little more asset sensitive than you, I'm guessing, is part of that answer.
That is true. That will help some. Exactly. I think there will be some other adjustments we might make as well.
Just separately, Daryl, could you speak, and Kelly, could you speak a little bit to how you are thinking about the buybacks as you get to close and then beyond close? I think last time we spoke, there was an expectation that the CET1 might be closer to 10%, but then there was some mid-quarter release that seemed like maybe you would be a little bit below 10% at close. Can you tell us where the parts are moving there and how it impacts your outlook for the buyback?
Betsy, just as a general level, you'll recall that we said that we would target 10% CET1 at close. We really are not going to consider buybacks until after we hit that level. Now, I recognize that many investors, since you have already asked me, "Well, why do you need such a hefty CET1 level? Because that's got a lot of cushion in it," which it does. The reason is because we're going through a whopping big merger, which has got a lot of uncertainty. The economic environment has uncertainty. Geopolitical events have uncertainty. For all those reasons, we're conservatively still stuck on 10%. Daryl will give you a little color in just a second about kind of where we are. From my point of view, it's hard to know. It kind of depends on what rates are.
These marks have a huge impact in terms of our capital position, but it's going to be close to 10, which means it's not going to be too far past legal day one that we're going to be back in the buyback business. The specific dates, Daryl can give you a better feel for.
Where we stand right now, we'll probably touch under 10. As Kelly King said, we don't really know the exact date we're going to close when interest rates are up. We're still working with Deloitte, our third party, on the actual mark for SunTrust. All that is coming together nicely. My guess is we'll be close to 10. We may not be at 10 right now. It also depends on what assets we decide to shed or whatever could have an RWA lift, potentially. You never know of how you get there right now. We're in the hunt, there's no guarantee that we'll be over 10 at close. This company combined generates a lot of capital, a lot of earnings, and we will get to 10%, I think, in a relatively short amount of time.
It's still a wild card because you don't really know because rates are so volatile right now where you're going to be. I just know that we have a lot of flexibility, and we're working to try to do what we can to maximize and optimize the balance sheet.
Okay, got it. All right. Kelly, your point is that 10 is a high number anyway?
Right. It's all right.
All right. Thank you.
Thank you.
We will now move on to our next question from Ken Usdin of Jefferies. Please go ahead. Your line is open.
Thanks. Good morning, everyone. A follow-up on just things that are going to be potentially slipping time-wise, depending on the close date. Daryl, any understanding, at least on the BB&T side, of what the expected CECL day one looks like? Then just any considerations in terms of any changes with regards to how you think the credit mark looks and the potential breakdown of that credit mark? Thanks.
Yeah. For BB&T, our CECL reserves are going to be higher than where we operate or be incurred right now, but we're probably up in the neighborhood of 30%-50%, in that range. All that could be a moot point if we close this quarter in the fourth quarter. Clarke and Daryl Bible and our teams have been working on the combined Truist number. We aren't at a point now where we can disclose that number yet. We're still working on that, the teams are working together and just coming up with it. As far as the purchase accounting marks go, I would say when we announced this transaction in February, we were saying the credit mark would be at 2%. We believe the marks are coming in close to that level, that's not final yet.
Could be a little give or take, plus or minus on that, but I think we're in the ballpark of that. The other marks on the liquidity and interest rate marks right now, it is at a slight discount, but that's also volatile to what happens in the marketplace. Hopefully that's helpful.
Yep, thank you. A follow-up just on the insurance side, you talked a lot about how the current business trends are going from a growth perspective. Can you talk about how insurance is expected to grow within the outlook you'd given for total fees, just in terms of the ballpark of the type of growth rate that you think could be sustained in the insurance business? Thank you.
Sure. For fourth quarter, this is our lowest quarter of the year, so fourth quarter would be our second lowest. We would expect from here commissions to step up in the 3% range. Sort of looking out further and forth and into maybe the first half of 2020, what you have really is post the two large years of insurable loss in 2017 and 2018, as I mentioned earlier. You have tightening of capacity in the market such that there's still upward pressure on pricing. It's hard to know exactly how long that lasts, but certainly fourth quarter, we expect it to hold, possibly even push up a bit. Depending on how the reinsurance renewals go in January, I think you also could see some further commitment to that pressure.
When we look at the balance of the year, we're expecting full year organic growth to come in, at least for us, in the 6%-7% kind of range. Year to date, we're at 9.1 right now. Possibly we can beat those numbers, and we expect the industry to probably be in the mid fours. I think feeling very strong about the backdrop of the market as a result of that. Also, I would say because of the IHOP approach we started over a year ago, we feel really good about our teams. As I said, our new business growth has built upon itself every quarter throughout this year, and we've got technology going in just about every business, which is helping us be more efficient, more effective.
I think the prospects for us to outperform the market as we look forward are very solid, both in margin and overall growth.
Thank you.
Sure.
We will now move on to our next question from Matt O'Connor of Deutsche Bank. Please go ahead. Your line is open.
Good morning.
Morning.
Morning. I first just wanted to follow up on the capital discussion. As you think kind of post-integration or once you're confident in the execution of the integration, and we see the 10% CET1 is really kind of well above where some of your direct peers are pointing to. You might have seen yesterday, a very similar bank to you in size, talked about bringing it down to 9%. Another one's in the 8.5%-9% range. I'm just wondering if you could give some thoughts on kind of medium term, post some of the deal integration, what you think an ongoing CET1 target might be.
I think predicting what your capital level needs to be out into the future is a bit of a guessing game because you really can't predetermine what your capital levels will be unless you can predetermine what the vintage and circumstances are going to be. It always has to be a hedge. The best way to think about us is relative to the environment. If the environment is relatively risky, you will see us be relatively more conservative in terms of capital liquidity, and we'll always have strong diversification. Capital and liquidity vary depending on the circumstances at the time and the forecast that we make.
As I said earlier today, from a conservative point of view, you just have to recognize that doing a large deal, there are just lots of issues. While we feel extraordinarily confident about the conversion and all of that, there's still things that I can't guarantee. My prediction is about end of the year, we'll have a trade war reconciliation and a new NAFTA approval, et cetera. I can't guarantee that. When you get through all that anchors you back to the 10. Now to your point about others moving to nine or so, when we get to a more tranquil or predictable environment, I don't think 9% is inappropriate at all. I think pushing down to 8.5 will still give you 150 basis points over the minimum requirement of seven. Remember, seven is a really hard seven.
You don't ever want to get close to seven. There's some pretty bad stuff that happens when you get there. The debate is really between 8.5 and nine on an ongoing, more stable environment position, in my view. As things stabilize, I will be recommending to the board that we consider a lower target capital level. Based on the work that Daryl and his team does, we'll come up with whatever that number looks like. We're not going to be rushed, and I want to be fair for our shareholders. There's opportunity here, but we're going to be conservative, and I want the market to understand that. I'm not going to overpromise. I'd rather overdeliver.
That's helpful. Just separately, any early signs of, call it either client attrition or clients kind of taking a wait-and-see approach from doing business with you? I know you can't talk to SunTrust, but is there any kind of wait and see? On the flip side, are there discussions with clients saying, "Hey, now that you're going to be a lot bigger, can you do more for us?" Whether it's, say, taking bigger positions in lending or you've got a broader product set, there's more we can do with you there. Talk about those kind of gives and takes, if you're seeing any so far. Thank you.
Yeah. Well, it's a great question, and you're right. We have limited insight into that because we've been very clear to our people. We are outright competitors today, as we have since day one. We're not going to walk anywhere close to that line of not being competitive. Therefore, we have very limited information. We do pick up little bits of anecdotal feedback. Certainly, there are clients out there talking about, "Hey, this would be great when you guys get together. You'll have more expanded lending capacity. You'll have more products and services." If they were BB&T or SunTrust, they would both say the same thing, which is true. I think everybody recognizes the opportunity out there by us combining. In terms of any attrition materially that I've heard with regard to the BB&T side, there has not been.
I know there's been a lot of conversation out in the market about everybody saying they're taking all of our business. That's not true. You just saw our growth numbers. We grew loans 6.5%. Deposits grew 5%. I don't know how to be clearer than that. There's not any material attrition. Our turnover rate is about the same or lower than it has been. I would say to you that this is extraordinarily successful to this point. There's no indication of any decay, and there's no expectation of any decay. Rather, the expectation is a rather positive, optimistic opportunity as we come together.
Hey, John, can you take our next caller, please?
Yes, sir. We will now move on to our next question from Michael Rose of Raymond James. Please go ahead. Your line is now open.
Hey. Thanks for taking my questions. Just going back to the merger. I think when you guys announced this, you talked about $2 billion in one-time charges. Just wanted to see if there were any adjustments to that and any adjustments to the timeline. I think you talked about a conversion somewhere 12-18 months after close. Should we expect the majority of the one-time cost to come around that timeframe? Thanks.
Michael, it's Daryl. The numbers are still coming together. Year to date, between BB&T and SunTrust, if you look at our charges to date, we're about $250 million between marks and MOE-related expenses. We got some more information on the IT conversions. That's getting finalized. That's going to be a really large number. I don't have all the numbers in yet, but I'm pretty sure that we're going to probably utilize the bulk of the $2 billion. We'll give you more color as we close because we still don't have all the information that we really need between each of ourselves until we close the transaction. What I'm seeing right now, and there's some very complicated integration as Kelly talks about hooking these computers together. That's going to take a lot of need for outside assistance to help that all come together.
I would say it's going to be the bulk of the $2 billion from what we're seeing right now, but we'll give you better information. As far as timing goes, we're trying to get majority of all the systems put together by the end of 2021, if that's possible. The teams are working really hard to work out those plans and feel very comfortable that that can be done in that timeframe. We'll give you more specifics
As we get more clarity, probably over the next couple of months. Things are coming in as expected, and I think we're going to have a really robust combination of IT systems when it's all said and done.
Okay. That's great colo r. Maybe just as a follow-up, now that you've had some time to dig into their side, can you just explain where you think the greatest opportunities could be for revenue synergies and maybe what areas you're working on as you prepare for the close? Thanks.
Yeah. Mike, this is Chris. Bill and I have been working together, as Kelly alluded to earlier, on a number of fronts. I'll just maybe hit the highlights. Certainly, they have a much more built-out capital markets business to bring strategic advice down segment, if you will. We have a very strong community bank that from, I call it revenue companies down to $25 million, that need those type of services, many of which we did not offer prior. We see a great opportunity to bring strategic value to those commercial clients on many fronts from a fee perspective to really build out their overall needs and planning for their future. The flip of that would be, so that's a big one. The flip of that would be, we have a substantial insurance business, I think a best-in-class insurance business.
There's really not much we don't offer that we can take to their entire commercial business up and down small business, all the way up to the largest corporate clients they handle. We also have the largest life insurance distributor in the country with Crump Life that we have built a business within our company of offering to our clients. We will extend that naturally to the SunTrust clients on both the commercial and the individual side. If you think about the connectivity with wealth and the broker-dealer and the strong wealth business they have, the estate planning need to fund buy-sell plans, buy-sell agreements, that kind of thing. We have a tremendous opportunity to offer life into the wealth business and also into key man insurance on the commercial side. Tremendous opportunity there.
A third that's kind of common sense is we have a very strong business we call BB&T@Work, where we provide sort of turnkey deposit programs to our commercial clients for their employees. SunTrust has a plan. It has not been as effective, and it's one thing that we think we can turn on day 1 to help grow deposits in that sector. That's just a handful of three that I think are high potential, but we've got another 15 to 18 behind that, of kind of all sizes and shapes that were not modeled in the MOE that we're very excited about.
That's great, Collier. Thanks for taking my questions.
Sure.
We will now move on to our final question from Stephen Scouten of Sandler O'Neill. Please go ahead. Your line is open.
Yeah. Good morning, everyone.
Morning.
I was curious how you guys are thinking about the move to Charlotte and kind of protecting the legacy brands and the standings that you guys have in Winston-Salem for BB&T and obviously Atlanta for SunTrust, and particularly as that pertains to Atlanta and it continues to grow and look like kind of the capital of the Southeast, and how you think about protecting that as you move the headquarters to Charlotte and not letting somebody else take that position over time?
Stephen, we're very excited about the move for all three markets, Charlotte, Atlanta and Winston-Salem. Charlotte is a super dynamic market. It's growing extremely fast. It's gotten to be a real kind of a major focus for young professionals to be attracted. A lot of technology people there, a lot of technology companies there. A lot of companies moving their technology operations there. When this merger is done, Charlotte will be the second largest financial district in the country. Charlotte is going to be a mega place for us to do business. Atlanta is fantastic as well. Atlanta, you could say, is clearly the dominant city in the Southeast. It's a fantastic place. We love Atlanta. We will continue to love Atlanta. We're not moving out of Atlanta.
We will have a superstar leader in Atlanta from SunTrust who is one of the most accomplished bankers in the country today. She is extraordinarily plugged in. We won't miss a beat in Atlanta. Our commitment will be increased in terms of our community support. Our commitment in terms of marketing and execution will be increased. We would expect our execution of business attraction in Atlanta to be greater going forward than it has been in the past. Keep in mind that our commitment was and is that we will have kind of domiciled our headquarters for capital markets, investment banking, wealth management in Atlanta. Likewise, in Winston-Salem, our retail community bank will be headquartered in the Winston-Salem triad area. Neither market loses.
It's just that we happen to be blessed by having three fantastic markets that are now the kind of the foundational anchor
Geographical locations of Truist. Don't think about it as Truist being anchored to Charlotte, think about it as Truist being anchored to the three. We still have a toehold in markets that we generated from, in Wilson, North Carolina, and Orlando. We are a community bank. We don't think in terms of one market driving everything. We think of it being a coalition of a group of community banks coming together under the advantages of a holding company. Nobody loses, everybody wins.
Perfect. Helpful. Maybe just one follow-up. You spoke to kind of seeing long-term strength in the economy, and obviously your growth remains solid ex the mortgage sale. We've seen some mixed economic numbers, manufacturing, et cetera. Can you talk a little bit about what you're seeing from your customer base in terms of incremental investment and overall market demand? Thanks.
Yeah, I'll make a comment, and then we'll have Clarke to make a comment. The feedback that I get primarily is from our regional presidents, but also talking directly to clients when I'm traveling around. For 10 years, Main Street America really kind of suffered as the biggest companies were doing more robust international business, and Main Street was still recovering from the recession. Main Street has recovered from the recession. After 10 years of not investing, Main Street is now needing to invest, wanting to invest, and they are investing. Main Street is kind of a broad-based business activity that we see across the array of our business activities. Of course, we don't participate as much in the larger global international businesses.
As they're seeing more of the impact of the trade wars, that's not impacting us as much as it would some of the mega banks. All I was saying earlier was, we are beginning to hear some conversation from our local Main Street clients around uncertainties around trade wars. After a while, it drifts down to Main Street and everybody talks about it. If that persists for a long time, it will affect Main Street, but it's not having a material impact today. Clarke, any color on that?
Yeah, I would just echo what Kelly is saying, that while there's more conversation about the headline news and maybe some more cautious tones in some conversations, our opportunities continue to be very robust across the board. We have good pipelines. Really, I think one of the benefits that Kelly brought out earlier is just the diversification in the various platforms we have. While there is more conversation, I'd say it's more on the higher end than it is at this point on Main Street or the retail side. People are conscious and thinking about it, and we're trying to respond appropriately. We still think there's plenty of opportunities with all the different levers that we have to pull.
Great. Thank you guys so much.
Sure.
That concludes today's question and answer session. At this time, I'll turn the conference back to Mr. Richard Baytosh for any additional or closing remarks.
Okay, thank you, John. Thank you, everyone for joining us. I apologize for those we didn't have time to get to today, and we'll call you later. I hope everyone has a good day. Thank you very much.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.