First Interstate BancSystem, Inc.
Q1 2016 Earnings Call Transcript

Published: 23 Nov 2016

[Operator:]

Good afternoon and welcome to the First Interstate BancSystem Conference and Webcast to discuss Expansion into the Northwest. All participants will be in listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the call over to over to Kenzie Lawson. Please go ahead.

[Kenzie Lawson:]

Thank you, Gary. Good morning and thank you for joining us today to discuss First Interstate's merger with Cascade Bancorp that was announced yesterday afternoon. We hope you've had a chance to review our press release that was posted on our website at www.FIBK.com. In addition, we also published an investor presentation yesterday afternoon to our website that we are currently webcasting and will reference on this call. Before we begin I would like to direct all listeners to the cautionary note regarding forward-looking statements included on the second and third pages of the presentation. We do not intend to correct or update any of the forward-looking statements made today, and investors are urged to read the Proxy statements and other relevant materials related to the merger when they become available as they will contain important information about Cascade, First Interstate, and the merger. Joining us from management this morning is Kevin Riley, our President and Chief Executive Officer, as well as Marcy Mutch, our Chief Financial Officer. Also joining us from Cascade are Terry Zink, Chief Executive Officer, Chip Reeves, President and Chief Operating Officer, as well as Greg Newton, Chief Financial Officer. Kevin, I will turn the call over to you.

[Kevin P. Riley:]

Thank you, Kenzie. And thank you to everyone for joining us on this important call. I am thrilled that Terry, Chip and Greg are here with us today. The Cascade management team has carried themselves with class and integrity since we started the process of getting to know one another over the past six months. We have met many of the very talented employees at Cascade, and are excited about the opportunity to partner with them. If you're following along with the slide deck, I'm going to start on slide number four. But before we discuss the transaction, I want to take a couple of minutes to set the context for the deal we announced yesterday. Over the past couple of years we have been focused on putting in a foundation in place that will allow us to support a transformational deal that would significantly increase the scale, profitability and future growth opportunities for our company. We recognize the areas that we need to invest, to enable us to effectively manage our growth as we evolve from a local community bank to a larger regional community bank with a broad, multi-state footprint. For those of you that have been following First Interstate for a while, you've heard us speak about -- often about our focus on people, processes and technology. This has been our mantra as we have built this foundation, and I want to quickly remind everyone of some of the key actions we've taken. First, our people. We made a number of enhancements to our senior management team by bringing in experienced banking professionals with successful track records from larger institutions. Just to highlight a few of the additions we've made; our Chief Credit Officer, Steve Yose, was Head of Credit Administration for the Northwest and Rocky Mountain regions for KeyBanc. Our General Counsel, Kurt Jensen [ph], came to us from a major law firm in Washington, DC where he focused on bank regulatory and compliance matters. Our Chief Banking Officer, Bill Gottwals, came to us from US Bank, where he oversaw the Montana and Northern Wyoming markets. And our Head of Human Resources, Mike Cherwin, was previously with Wintrust and helped build their HR department when they were $2 billion institution to a $25 billion institution. Additionally, we have spent time over the last two years developing some of our internal talented employees who are now key members of our Executive team, like

[Marcy D. Mutch:]

Thanks, Kevin. I'm going to start on slide 10 with a summary of the deal terms. This transaction is structured as a cash and stock merger with each share of Cascade being exchanged for $1.91 in cash and 0.14864 shares of Class A common stock of First Interstate. Based on Wednesday's closing price of $38.30 per First Interstate share, this implies a value to Cascade shareholders of $7.60 per share and an aggregate value of $589 million, including restricted stock awards as well as options and restricted stock units that will be cashed out at closing. We've already discussed how this transaction is strategically compelling for First Interstate but it is also financially attractive. The implied price of $7.60 per Cascade share is 21.15 times Cascade's September 30 tangible book value per share, and 12.9 times Cascade's 2017 earnings, including our estimate of fully phased-in cost savings. This is a big part of the strong earnings accretion that this transaction will generate. It is notable that when we first established the basis for our exchange ratio, the implied price was 1.9 times Cascade's tangible book value per share, but due to the recent appreciation in our stock price, this multiple has increased. Based on this exchange ratio, Cascade shareholders will be issued 11.3 million Class A shares of First Interstate at closing, which is equivalent to 20% ownership of First Interstate at closing. This increase in the number of Class A shares will result in First Interstate Class B shareholders owning 42% of the company, down from today's 52% share. Our Board of Directors will add two Board members from Cascade. This will help us maintain continuity in the Cascade markets. The transaction is expected to close in mid-2017, subject to customary regulatory approvals. Due to the large insider ownership of Cascade, a majority of the Cascade shareholders have already entered into a voting agreements to vote in favor of the transaction. All members of our board have also signed voting agreements to vote in favor of the transaction. Turning to slide 11, the earnings from Cascade, once fully integrated, will be a powerful addition to our franchise and we believe the transaction will increase our earnings per share by 10% per year once cost savings are fully realized. In 2018, we expect earnings per share accretion will be a little lower, due to the loss of interchange revenue that will occur once we cross over the $10 billion regulatory threshold. So we project about an 8.5% accretion in that year. In the event regulatory relief includes Durbin amendment changes, obviously our absolute earnings-per-share as well as our deal accretion metrics would markedly benefit. The initial tangible book value dilution at closing will be 8.8%, which will be earned back over five years using a crossover method. A key financial assumption is that we've identified $24.7 million of cost savings resulting from this transaction, which approximates 28% of Cascade's run rate expenses. Because Cascade is a market expansion opportunity, cost savings are a lower percentage than in First Interstate's prior deals. As Kevin mentioned, it is strategically important that this expansion will diversify our footprint into strong growth markets in the Northwest. With this expansion, we plan to retain all branches and virtually all production-related human resources, which we view as the foundation of a strong community bank. On the flip side, and as you would expect, the majority of the projected savings are found in overhead and duplicative back-office activities. The savings we identified in due diligence are comfortably realizable as a result of the investments we've already made in our infrastructure, including streamlining and centralizing our processes, and pursuing the technology enhancements that Kevin mentioned earlier. As a reminder, we've been able to achieve or exceed announced cost savings expectations on each of the last three acquisitions, and we believe that targeted cost savings with Cascade will be realized within six months after closing. As I just mentioned, a portion of these savings will be in personnel, and to the extent that some individuals do not become part of our combined company, we will provide them with a generous severance package along with out-placement services to assist in finding future employment. We've also identified restructuring costs and fair value adjustments to Cascade's balance sheet at closing, which we've incorporated into our estimate of the tangible book value impact of the transaction. Some of these estimates will also accrete back in to our income over time. Our total assets will be over $12 billion at closing. As I mentioned earlier, our financial impact analysis includes the full impact of crossing over the $10 billion threshold. This additional scale will help us offset the cost and revenue loss impact of crossing the $10 billion in assets, which includes an acceleration of the impact of the Durbin amendment, which will reduce our combined debit interchange income by $11.5 million on a pro forma basis. Moving to slide 12, First Interstate is already a high-performing bank, and this transaction further solidifies our strong profitability. Our operating metrics after fully integrating the transaction will be better than our standalone metrics, with our efficiency ratio expected to fall 260 to 330 basis points, our return on average tangible assets to increase by two to four basis points, and our return on average tangible common equity to increase 150 to 220 basis points, as measured against our September 30, 2016 financial results. Equally important, the strong deposit franchise of Cascade, and favorable demographic outlook, position us even better for the future. Looking at slide 13, the management of both companies have considered this combination for a while, and First Interstate has performed extensive due diligence using both internal teams and external vendors, which covered every material facet of Cascade's business. Our team has proven to be very good at performing due diligence, and I'm incredibly thankful to all of them for the focus and commitment through this due diligence process. Our credit diligence reviewed over 75% of Cascade's commercial and commercial real estate loans, including all of their criticized loans over $250,000, and all of their other real estate owned. It's important to highlight that this diligence was led by Steve Yose, our Chief Credit Officer, who as was mentioned earlier, served for approximately 15 years as credit executive overseeing the Pacific Northwest and Rocky Mountain regions for Key. Steve has seen credits in nearly all of Cascade's markets from his prior experience. We have had ample time to conduct our credit review, and deployed a team of our most experienced credit professionals to evaluate and re-underwrite the Cascade portfolio. Our $25 million credit mark represents 1.2% of the gross loan portfolio. Through the course of our diligence, we've been impressed by the great cultural fit between our businesses. We are remarkably similar in our conservative credit cultures, strong values, consistent business practices, and commitment to quality. We believe this stems from the nature of Cascade's strong presence in smaller markets, and the commitment to community and relationship banking models that we both embrace. This similarity in cultures is an added benefit that we believe reduces our execution risk in the transaction. The last thing I'd like to point out related to our diligence is that from the earliest days of evaluating this transaction we have been conservative in our expectation of Cascade's earnings relative to what is possible. We continue to believe that our expectations are conservative and are excited about the future of our combined organization. At this point we would like to have Terry to say a few words about the transaction. Terry?

[Terry E. Zink:]

Thanks, Marcy. As Kevin and Marcy have discussed, this transaction hits all the criteria that you look for in a transformational deal. It makes sense strategically, it makes sense financially, and it makes sense culturally. From the perspective of Cascade, we feel very confident that this combination will be good for all of our stakeholders. Certainly customers will benefit from the broader capabilities of First Interstate, but at the core and because of the similar approach that First Interstate and Cascade have, we will be very much a community bank deeply invested in our customer relationship and always working in the best interest of the people that are our friends and neighbors. As transformational deals go, this one stands out as a combination where both organizations will stay largely intact. There are meaningful levels of cost savings, but those can be achieved without touching the branch network or any customers facing employees. In fact, First Interstate made it clear to us that one of the reasons they were interested in this combination was due to their respect and appreciation for the level of experienced banking talent that we have in the Cascade organization. We are very happy that by being a part of a larger bank, our employees will have a better opportunity to advance their careers in banking. I've had a chance to get to know Kevin and Marcy and other members of First Interstate team very well, and I am very impressed with the similarities between our two organizations. Ultimately, I believe that the shared cultural values and a similar approach to community banking will make for a very smooth integration and help us achieve the synergies that will result in a high performing bank that all of us can be proud of. Now I'd like to turn the call back over to Kevin.

[Kevin P. Riley:]

Thanks, Terry. I'll wrap up with slide number 14, with a brief summary. As all of you can see, as you can tell, we are excited about announcing this transformational event in the history of our company, and believe it strengthens the foundation of First Interstate and our outlook for the future. This is a combination that is strategically, financially, and culturally compelling. First Interstate's vision is to be a premier financial service provider in the communities we serve, and our company values support that vision. Culturally, our combined organization also supports this vision. We both recognize the importance of the value chain, which is that engaged employees result in satisfied customers and a vibrant community. All these lead to increased returns to our shareholders. We will be the third largest community bank headquartered in our six-state footprint, while remaining committed to the relationship banking model, that is the foundation of both First Interstate and Cascade. The size of Cascade provides positive operating leverage and attractive financial metrics that benefit from both people, processes and technologies that we've been investing in for several years. Their markets enhance our growth profile, and play to our strengths while diversifying our balance sheet. Lastly, this transaction helped us overcome the hurdle of crossing $10 billion in assets threshold. As we look ahead to the integration of our companies post-closing, it is our shared belief that it is important to support the communities in which we work, live, and play, that will make this combination successful. Our very foundation is rooted in our identity as a community bank. We look forward to welcoming the Cascade employees into the First Interstate family over the next several months, and working together to complete this merger with a common goal of building the strongest bank in our region. Operator, you can open up for questions.

[Operator:]

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Jared Shaw with Wells Fargo Securities. Please go ahead.

[Jared Shaw:]

Hi, good morning.

[Kevin P. Riley:]

Good morning, Jared.

[Jared Shaw:]

First, just a couple questions here -- on the cost savings, are those, so is that when you're looking at the franchise now being over $10 billion net, we should be able to see those cost saves? Are those just the straight cost saves from integrating the operations? And then there could be some additional expenses as a result of going over $10 billion that we should be factoring in for the core franchise? I know you broke out the revenue impact of Durbin, but what about on the expense side of what we should be expecting, looking at [indiscernible] and things like that?

[Kevin P. Riley:]

With regards to cost saves, those are directly in the combined company. Additional costs regarding going over $10 billion, we have already borne most of those costs as a standalone institution, and those are already in our forecast going forward. So we don't perceive any additional costs because we already were planning on taking care of those costs in our forecast of First Interstate standalone.

[Marcy D. Mutch:]

We did factor into this, so Jared the FDIC surcharge, which is about $1.7 million annually, but it terminates at the end of 2018.

[Jared Shaw:]

Okay, and that is factored into your earn-back period estimates?

[Marcy D. Mutch:]

It is.

[Jared Shaw:]

Okay. And then looking at the credit mark, so is it, the right way to look at this, basically the credit mark equals the reserves, and there's no, nothing additional beyond that?

[Marcy D. Mutch:]

No, there is an additional interest rate mark up, about $8.5 million.

[Jared Shaw:]

But just from the credit side, it's we are just taking out the reserve?

[Marcy D. Mutch:]

That's right.

[Jared Shaw:]

Okay. And then just on our model here, we're trying to reconcile everything, can you -- what's at this point the dollar amount of goodwill in addition to the CDI that we should be looking at?

[Marcy D. Mutch:]

Goodwill is about $274 million and the CDI is $41 million.

[Jared Shaw:]

Okay, great. Thanks, I guess just my final question -- in the new markets, are you going to keep the Cascade name? Or will we be expecting to see First Interstate as the primary marketing name?

[Kevin P. Riley:]

Cascade is a very strong brand. We are working with Wells to acquire the rights to our names, but if we have to use Cascade, we'll use it. And we plan to use Cascade right now, but we are hoping that we will acquire the First Interstate name before this acquisition closes.

[Jared Shaw:]

Okay great. Thanks, that's all I had.

[Operator:]

The next question comes from Matt Forgotson with Sandler O'Neill & Partners. Please go ahead.

[Matthew Forgotson:]

Hi, good morning.

[Kevin P. Riley:]

Good morning, Matt.

[Matthew Forgotson:]

So just tightening up a little bit here on the earnings accretion expectation, you're saying 8% accretive to 2018? Are you using the street 2018 EPS estimate of $2.45 as the base?

[Kevin P. Riley:]

For us, yes.

[Matthew Forgotson:]

Yes. Okay, so just to be clear, all else equal, you're penciling in roughly $0.20 of accretion from the transaction in 2018?

[Kevin P. Riley:]

Yes.

[Marcy D. Mutch:]

Yes.

[Matthew Forgotson:]

Okay. What's the tax rate that you're using for the pro forma company?

[Marcy D. Mutch:]

35%

[Matthew Forgotson:]

Okay, thank you. And then lastly, I'm penciling your pro forma TC ratio at close at about 7.5% -- just trying to get a sense of capacity for further acquisitions, between now and then? Or should we expect a pause until capital replenishes?

[Kevin P. Riley:]

Ours is a little bit higher, so I think it's like 7.65%. But you're pretty close with your calculation, Matt. Right now we got to focus on this acquisition and integrating it to make sure that we get everything we need to make it right. But we believe our capital levels, the tangible common equity as well as our total risk-based capital, to get back to a nice level within 12 to 18 months since acquisition. So we'll look at what we can do but as you know, this we had a lot of cash deal, if we did an all-stock deal that would actually be accretive to probably our tangible book as well as other capital ratios.

[Matthew Forgotson:]

Okay, thank you very much.

[Operator:]

Next question comes from Matthew Clark with Piper Jaffray. Please go ahead.

[Matthew Clark:]

Hey, good morning.

[Kevin P. Riley:]

Good morning, Matt.

[Matthew Clark:]

So just on the core run rate of expenses that you're using for Cascade, and I think you had a little bit of noise in the third quarter, just curious what you're using on a dollar basis?

[Marcy D. Mutch:]

We are using a little over $87 million.

[Kevin P. Riley:]

For the year.

[Marcy D. Mutch:]

For the year.

[Matthew Clark:]

$87 million?

[Marcy D. Mutch:]

Yes.

[Matthew Clark:]

Got it, okay, and then how should we think about the growth, the underlying growth rate for the Cascade franchise? I would think it would be able to grow at a faster pace than legacy First Interstate? Just curious how we should think about the growth prospects there?

[Marcy D. Mutch:]

We look at 8% to 9% within their footprint, and overall pro forma at about 5.5%

[Matthew Clark:]

Got it, okay, and then thinking through some of the fee-related products that Cascade has, are there any products that they have that you might rollout across your own footprint?

[Marcy D. Mutch:]

We haven't built any of that into the model.

[Kevin P. Riley:]

Well, they don't have any really unique products. Actually, we have probably some things we can roll into their markets that they don't have, but we didn't add any of those actual improvements into our forecasting.

[Matthew Clark:]

Okay, understood, thanks.

[Kevin P. Riley:]

You bet.

[Operator:]

The next question comes from Jeff Rulis with DA Davidson. Please go ahead.

[Jeff Rulis:]

Thanks, good morning.

[Kevin P. Riley:]

Good morning, Jeff.

[Jeff Rulis:]

On the operating markets, you touched a little on Seattle and Portland, and I know that had been a big expansion focus for Cascade. Maybe just add a little more color about your intention in those markets? And then additionally, looks like the notable hole would be eastern Washington, and that's got some very similar characteristics to the legacy First Interstate markets, maybe just a quick touch on those three markets, if you could?

[Kevin P. Riley:]

You said Eastern Washington, well, Eastern Washington could be a future expansion. But right now, when we look at Portland and Seattle, Cascade has invested some time and energy in that to grow those markets which are nice markets. But what we don't want to do with regards to First Interstate and Cascade in some of their communities, is to just focus on Portland and Seattle. As you know, they have about $500 million in loans right now in those two markets, and we're going to be an over $12 billion institution. So yes, we will focus a little bit in that area, but we have to focus on maintaining the majority of what we are. We are small business, middle and small middle market lender, and we are a community bank, and we'll focus on that. We will do some growth in those markets, but we're not going to lose the focus on who we are.

[Jeff Rulis:]

Okay. And then maybe a question on how you came about the consideration mix? Just the thoughts behind kind of the 75% stock versus 25% cash, and the thoughts behind that?

[Kevin P. Riley:]

Well part of it is we had some excess capital, so we wanted to utilize some of that to make this thing more attractive to our shareholders. Plus, the seller always dictates how much cash they want in a deal. So they really wanted a little more cash in the deal so we were able to comply with that. So that's kind of how, between the two of us, came up with that split.

[Jeff Rulis:]

Sure, and then maybe one last one for the folks at Cascade, just the process of looking at potential other suitors, with other bidders, and why you think First Interstate's the right fit, versus other conversations you had?

[Terry E. Zink:]

Yes, Jeff, this is Terry. I think that as we talked before at a lot of our investor conferences, one of the things that we looked for was something that would be not only a strategic fit but a cultural fit. And when we looked at various opportunities out there, and we had significant conversations with several different organizations, and the one thing that really jumped out at us with First Interstate was the cultural fit. The fact that they run their business very similar to how we run our business. The employee retention factor was a big thing for us, and we genuinely like the management structure that existed at First Interstate and the opportunity to see the legacy that had been built at Cascade to be able to continue on in a very similar fashion. And so I think it was really trying to do what was right for shareholders, and at the same time what would be right for customers and employees and this certainly is the best possible fit.

[Charles “Chip” Reeves:]

And Jeff, this is Chip. Just adding on, a couple other business lines that we looked at, some of the other conversations, didn't necessarily expand actually what we'd be able to offer our customers. And with First Interstate and the wealth management group that they have that Cascade's never been able to invest in, and bringing that across our entire footprint is going to be an extreme positive. And it also, as you know, FIBK has a large indirect auto portfolio at the same time, bringing that across our footprint. And none of the other suitors were able to actually bring that to our customer base, so we're excited about it.

[Jeff Rulis:]

Great, thank you.

[Operator:]

The next question comes from Jacqui Boland with KBW. Please go ahead.

[Jacqui Boland:]

Hi, good morning everyone.

[Kevin P. Riley:]

Good morning Jacqui.

[Jacqui Boland:]

Is it fair to say that based on the 75% expected realization of cost savings in the second half of 2017 that you're looking at more of a 3Q close than a 2Q close?

[Kevin P. Riley:]

We are looking for a Q3 close.

[Marcy D. Mutch:]

Early, early Q3.

[Kevin P. Riley:]

Yeah, I am sorry.

[Jacqui Boland:]

So then I would guess, based on the six-month timeframe and the success you've had in other transactions with them, just a rapid integration and cost save realization, that it's probably fairly early in to 2018, you'd have 100% realization?

[Kevin P. Riley:]

We will have it all done by the end of 2017. Normally, as you know, Jacqui, when we do the system conversion, the day or shortly thereafter the system conversation, we pretty much do our cost saves -- we finalize them. So we don't carry it on. I would say with the way we scheduled it out, that those actually will be all done before the fourth quarter ends.

[Jacqui Boland:]

Okay. So I know is very preliminary, but probably an early Q3 close with a 4Q conversion and then we start off 2018 nice and clean?

[Kevin P. Riley:]

Yes.

[Jacqui Boland:]

Okay. And what type of a rate outlook did you look at when you were calculating your accretion?

[Marcy D. Mutch:]

We left their margin pretty flat through the whole, through our model. I think we have a 25 basis point increase in December projected into their estimates, and we've kind of just left ours. We haven't considered that in our future forecast.

[Kevin P. Riley:]

So really no real rate increases in our forecast.

[Jacqui Boland:]

Okay, that's helpful, thank you. And just one last one, more for Cascade management, either Terry or Chip, in the past I knew that some small loan purchases have been part of the liquidity deployment from some of the deposits you brought on earlier in the year. Does that, given the change in events, does that still remain part of the strategy or has any of that shifted?

[Charles “Chip” Reeves:]

Well, I don't think that any of that shifted. Right now we are continuing on the same path, Jacqui, that we've been on. I would say that, as you and I talked before, we had set a limit on where we wanted to hold that SNC [ph] portfolio, and we don't plan on growing that any more. We are going to continue to hold that where it is. And so we pretty much deployed the BofA deposits that we got. And so I would say that right now, you're not going to see much change in that. But the strategy is still same, just to hold what we have and mitigate any interest rate risk we might have.

[Jacqui Boland:]

Okay, thank you, that's helpful. Thanks everyone.

[Kevin P. Riley:]

Thanks Jacqui.

[Charles “Chip” Reeves:]

Thanks Jacqui.

[Operator:]

[Operator Instructions] The next question comes from Tim Coffey with FIG Partners. Please go ahead.

[Timothy Coffey:]

Thank you. Good morning everyone.

[Kevin P. Riley:]

Good morning Tim.

[Timothy Coffey:]

Kevin, Cascade's been making some inroads in investments in lending in Seattle and Portland. With that company under your umbrella, are you more inclined to allow those kind of opportunities or initiatives to mature? Or do you think you will add some more people in those markets?

[Kevin P. Riley:]

Well, I think we will let it mature, but we're okay if we needed to add. And I am going to look to Steve Yose to kind of see exactly how we need to capture what we want to capture in those markets. I think there's some great opportunity, but I don't want to turn all our focus to just those two cities. So we are going to pick and choose how we want to grow in those markets.

[Timothy Coffey:]

Okay. And as you look forward, and this is kind of a far-forward question for you, Kevin -- in terms of First Interstate becoming a $15 billion, $20 billion institution, do you think you can accomplish that by just growing through acquisition or organic growth through the Cascade-First Interstate footprint? Or do you think we need to go outside of that?

[Kevin P. Riley:]

It was an interesting note, we read your thing about going to $20 billion. So I don't know if I've ever said that. But we're going to continue to grow and as I stated many times before, Tim, big is not better. Better is better. So we will continue to monitor how we grow the institution if it's through organic growth and we accomplish what we need to accomplish in regards to the performance, that's great. If we have to enhance that with an acquisition here and there to make it beneficial for our shareholders, we will do that. So our whole thing is that we want to maintain and continue to be a high-performing financial institution, giving our shareholders the returns they expect. So we are going to look at all the opportunities, as I said earlier on. We will look at all the tools in our toolbox. And that could be dividends, and share buybacks, acquisitions, organic growth. So our job is to continue to maintain our high performance, so we will be looking at everything.

[Timothy Coffey:]

Okay. Those are my questions thank you very much.

[Operator:]

This concludes our question-and-answer session. I would like to turn the conference back over to Kevin Riley for any closing remarks.

[Kevin P. Riley:]

Well, we'd like to thank everyone for participating in our call. Please note that this call has been recorded and will be available on our website at www.fibk.com beginning this afternoon. For those of you who have questions following the call, you're welcome to call or contact Marcy or myself at 406-255-5312. Otherwise, we look forward to catching up with you over the next few months. Thank you.

[Operator:]

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.