First Midwest Bancorp, Inc.
Q3 2018 Earnings Call Transcript

Published: 24 Oct 2018

[Operator:]

Good morning ladies and gentlemen, and welcome to the First Midwest Bancorp, 2018 Third Quarter Earnings Conference Call. At this time I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the company, we will open the conference up for questions-and-answers for analysts only after the presentation. It is now my pleasure to turn the floor over to Nick Chulos, Executive Vice President, General Counsel and Corporate Secretary of First Midwest Bancorp. Sir, you may begin.

[Nick Chulos:]

Good morning everyone, and thank you for joining us today. Following the close of the market yesterday, we released our earnings results for the third quarter of this year and also issued presentation materials that we will refer to during our call today. These provide both historical financial information and our outlook for the remainder of 2018. If you would like a copy of our Earnings Release or the presentation deck, they are available on our website in the Investor Relations section or you may obtain them by calling us at 708-831-7483. During the course of the discussion today, our comments and presentation materials may include forward-looking statements. These statements are based upon our current beliefs, but are not historical facts or guarantees of future performance or outcomes. The risks, uncertainties and Safe Harbor information contained in our most recent 10-K and other filings with the SEC, as well as the forward-looking statement, non-GAAP and other legends included in our materials today should be considered for this call. Lastly, I’d like to mention that we will not be updating any forward-looking statements following this call. Here this morning to discuss our third quarter results and outlook are Mike Scudder, Chairman of the Board, President and Chief Executive Officer, First Midwest; Mark Sander, our Senior Executive Vice President and Chief Operating Officer; and Pat Barrett, our Executive Vice President and Chief Financial Officer. With that, I will now turn the floor over to Mike Scudder.

[Mike Scudder:]

Great! Thanks Nick. Good morning, everyone. We really appreciate you being here with us today, and it’s great to be with you. As a reminder and in continuation of a practice that we started earlier this year, we’ve got a supplemental presentation for you to follow along with as we move through our remarks and as is typically our practice, I’ll cover the highlights and let Mark and Pat do the heavy lifting and walk you through the components. For us it was a strong and very active quarter. We are very pleased with the results that we saw for the quarter overall, and we were equally pleased to see continued execution on multiple business fronts that we talked about before. Net income for the quarter was a record $53.4 million for us as compared to $29.6 million last quarter and $38.2 million for the same quarter a year ago. Putting that in terms of EPS, EPS was $0.52 per share compared to $0.29 and $0.37 for again the second quarter of this year and the third quarter a year ago. The quarter was positively impacted by a net $0.06 per share, which saw $0.08 contributed from certain tax benefits and those were modestly offset by an anticipated $0.02 due to our delivering excellence implementation costs. When you adjust both periods consistently, we saw an underlying increase in EPS of 15% from the second quarter in 2018 and 39% in the third quarter a year ago. On the same basis, returns on average tangible common equity rose to 16.5% for the third quarter; that’s up 170 basis points and 410 basis points again from last quarter and the same quarter a year ago. When you look at the underlying performance within the quarter, we saw some positive results overall. Loans were up about 6% annualized from last quarter and the like amount from a year ago with particularly strong commercial lending which we were really pleased with and that helped to offset what’s been an ongoing headwind of what Mark will refer to periodically as good news, commercial real-estate pay downs, which are just reflective of today’s environment. We also reinforcement of reviews on the strength of our overall deposit base. We are very pleased to not only maintain our deposit costs at reasonable levels, but also to grow average deposits by 2% from the prior quarter and 4% year-over-year, while retaining our core transactional mix at about the same level of 85%. Net interest income extended by 4% from the prior quarter and 10% from the prior years, while our margins were up slightly comparatively. Credit provisioning was down linked quarter due to lower charge offs, but a little higher than a year ago reflecting the desperate timing of remediation and loan growth. Our fee businesses came in a little bit softer than we expected for the quarter for a variety of reasons that Mark can cover, some of which were offset by lower commission expenses. They were in some of our commission related categories. Importantly, our controlled overhead and our efforts here saw our efficiency ratio improve to 56% as we reflected earlier benefits of delivering excellence, but also reflected to just some timing and spending. Separately when you go through and focus on that, delivering excellence remains on track and our expectations for performance improvement into next year really remain unchanged. And then lastly we were very pleased to see our acquisition of North States Bank close on October 12 and we have a December Systems Conversion planned. This will add about $465 million of deposits of which some $350 million are core and additional $305 million in loans. Equally important, we were also pleased to welcome a very talented group of colleagues to First Midwest and look forward to building on longstanding client relationships they have established. So as I began, all-in-all a very busy quarter. Now with that, I’ll turn it over to Mark and Pat for additional color.

[Mark Sander:]

Thanks Mike and good morning everyone. Beginning with loans on page three of the presentation, as Mike alluded to we grew 6% annualized in the quarter as expected and a little more than 6% from a year ago as well. We generated strong C&I and consumer loan growth in Q3, which more than offset continuing pressure from payoffs in our commercial real-estate book resulting from property sales in a strong market. C&I growth was particularly robust at 16% annualized. Again this quarter well dispersed across middle-market, business banking and specialty teams. Our investments in talent the last few years, both strategic hires and additions through M&A are paying dividends and we remain optimistic about our future growth prospects in the next year. Commercial real-estate remain pressured as our steadied levels of production continue to face the headwinds of episodic repayments, which is the first nine months were about $100 million higher than the same prior year period. Consumer loans grew 11% annualized in the quarter, mostly from solid organic growth, as well as some small transactional purchases of high quality installment loans given their attractive risk return profile. Yields moved up in-line with our guidance and Pat will elaborate on that in a couple of minutes. We expect modest organic loan growth again this quarter as pipelines remain solid, which should lead the full year increase very close to the 6% level we posted for the first three quarters. Turning to the next page on asset quality, our metrics were all in line with our expectations and guidance. Charge offs of 29 basis points are at normalized levels, which we expect to continue for the foreseeable future. Non-performing assets and adversely rated loans were relatively stable at favorable long term level. We did provide a little extra allowance this quarter to support loan growth and a modest expansion of specific reserves due to normal migration, but our guidance for Q4 is unchanged. Looking at the deposits, deposits have always been a key strength of our franchise. While we have increasingly leaned into CD’s to support loan growth this year, core deposits remain high at nearly 85% of our total. This results in the cost of funds that leads the industry as Pat will detail further as he takes us through net interest income and margin.

[Pat Barrett:]

Thanks Mark and good morning to everyone on the call or listening in. Turning to net interest income and margin on slide six. Net interest income was up $5 million or 4% compared to the prior quarter and up $12 million or 10% compared to the same period in 2017, consistent with our overall expectations. Compared to both prior periods, the third quarter benefited from higher yields reflecting higher interest rates and growth in both loans and securities, partially offset by higher funding costs. Compared to the same period in 2017, net interest income was impacted by lower accretion from acquired loans. Acquired loan accretion contributed $5 million to the quarter consistent with the prior quarter and down from $8 million for the same period in 2017. Of the $18 million of scheduled accretion we have for 2018, we have reported $14 million year-to-date combined with $1 million of unscheduled accretion. We expect accretion to remain at $5 million for the fourth quarter, including $1 million from the NorStates acquisition. As always, some volatility should be expected. Moving to net interest margin, tax equivalent NIM for the current quarter of 3.92% was up 1 basis point linked quarter and 6 basis points from the prior year. Excluding accretion, margin was 3.79% for the quarter, up 2 basis points linked quarter and 17 basis points from the same period a year ago. Compared to both prior periods, the benefit of higher rates and interest earning asset growth drove the increases more than offsetting the rise in funding costs. Turning to earning assets and funding sources, average earning assets were up nearly $300 million linked quarter and up more than $900 million compared to the prior year due to both loan growth and net securities purchases. Average funding sources increase by nearly $250 million linked quarter and $750 million from a year ago, driven by increases in time deposits and FHLB advances. Moving to our outlook, we continue to expect full-year earning asset growth excluding the acquisition of NorStates in the mid-single digit range. We expect GAAP net interest income growth of 3% to 4% in the fourth quarter compared to the third quarter. Net interest margin excluding accretion is expected to be flat or modestly lower in the fourth quarter as the mix of assets, liabilities and relative yields from NorStates could bring modest pressure on our margin. Once again I want to remind you that projections are subject to volatility due to movements in interest rates, pace of loan growth and seasonal municipal deposits growth. Mark, with that I’ll turn it over to you to discuss non-interest income on slide seven.

[Mark Sander:]

Thanks Pat. Non-interest income was below guidance as capital markets, which is very lumpy, and mortgage reflecting industry trends suffered from unfavorable year-over-year comparisons in Q3. In addition, our overdraft fee revenue fell further than we anticipated, given favorable economic conditions and more people opting out this year, as well as the expanse of tools available to help consumers avoid these charges. While year-over-year NSF comparisons will be challenging for the next couple of quarters, elsewhere the fee income picture is much brighter. We expect overall fee income growth going forward given continuing strength in treasury management and wealth management, as well as steady low single digit increases in card income. As a result, fee income should be up about $1 million in Q4, in line with previous guidance, albeit off a slightly lower base. Back to you Pat.

[Pat Barrett:]

Moving on to expenses on slide eight, several items to note that affect our quarterly expense run right. First, the current quarter includes $2 million of Delivering Excellence implementation costs, primarily driven by branch closure, employee severance costs combined with general restructuring and advisory expenses. As mentioned in previous quarters, card and merchant revenues and expenses for each quarter of 2018 were impacted by a $4 million quarterly re-class of these expenses relating to these areas to non-interest income. Our prior period financial statements were not adjusted. We continue to present this change for you through additional disclosure in both the earnings release and on slide seven and eight. Keep in mind this is just a reclassification. There is not impact to net income. Away from these items, quarterly expenses were tightly controlled and decreased by $4 million, including $2 million of recurring benefits from Delivering Excellence efforts. The expense run rate was in line with the low end of our previous guidance of $94 million to $96 million per quarter and resulted in efficiency ratio of 56%, down from 60% in the first quarter, 59% a year ago. Our outlook on fourth quarter ongoing expenses is $94 million to $96 million, plus an additional $2 million for NorStates, with the recurring benefits from Delivering Excellence growing to $3 million. Also note that the remaining Delivering Excellence implementation costs are expected to approximate to $5 million in the fourth quarter, that's remaining for 2018, while the Northern States acquisition is expected to result in approximately $12 million of non-recurring acquisition and integration costs. Last note on taxes before I leave this slide, our effective tax rate for the quarter was 11% and included $8 million of benefits for the lines of federal income tax reforms. Excluding this benefit our effective tax rate would have been 24% compared to 37% a year ago, which reflects our lower corporate tax rate. For the fourth quarter, our expected effective tax rate continues to be approximately 25%. Moving on to capital on side nine, we continue to maintain capital at strong levels. Our capital ratios increased from the prior quarter reflecting retained earnings, partially offset by the impact of loan growth on risk weighted assets. As a reminder, during the fourth quarter you'll see a shift of approximately $60 million from Tier 1 to Tier 2 capital, which reflects the loss of Tier 1 treatment for our TRPS our Trust Preferred Securities as we cross over the $15 billion total asset mark. Also keep in mind that on January 1, 2019 you'll see approximately a $50 million increase to both the Tier 1 and total capital levels on adoption of the new lease accounting rules. This reflects the reclassification directly to retained earnings of all remaining deferred gains from our past sale leaseback transaction. This will be in conjunction with the $1.5 million quarterly increase of occupancy expense, also related to the adoption of lease accounting. We continue to be pleased with how rapidly we’ve earned back the capital we deployed in recent acquisitions. Mark has a few comments on Delivering Excellence on the next slides.

[Mark Sander:]

Relative to the Delivering Excellence initiatives, our views mirror the comments I made last quarter. We are on track and remain highly confident we will meet or beat the targets established around client service levels, deepening relationships and financial impact. We implemented our cost savings early, so the 2018 benefit was increased slightly, but our future targets are unchanged at levels we will achieve. Our longer term focus remains on leveraging our processes and systems to build upon our client experience and service commitment and our teams are adapting well to the culture of continuous improvement that this requires. Pat will now talk a little bit about NorStates.

[Pat Barrett:]

Turning to slide 12 is a recap on the details of the recently completed NorStates transaction. As a reminder, we expected to generate around $0.05 of earnings in 2020. Today our best estimate is that we'll see minimal bottom line benefit in the fourth quarter of 2018, approximately 75% of this in 2019 and 100% in 2020. On a quarterly basis we’d expect to be getting a full run rate by the middle of 2019. The economics of the transaction remain favorable with the relatively tangible book value earned back in less than 2.5 years. And finally consistent with our usual practice, we’ve summarized both our outlook and current quarter's earnings on slides 13 and 14 of the deck. Now, I’ll turn it back over to Mike for final remarks.

[Mike Scudder:]

Thanks Pat, thanks Mark. As you heard and as I started, it was certainly a busy and active quarter. Just before we open it up for questions, a few comments. As we look ahead, we remain excited about our positioning. We feel good about where we’re at. Our balance sheet is holding up well. We have a solid capital foundation. As Mark described, production has been solid and we feel good about where we are there. Our core deposit base remains the strength, but we recognize competition for deposits will continue to grow across all business lines. We are pleased on our progress on delivering excellence as it continues to move forward and combine with the NorStates acquisition, all of those things will serve to add momentum to 2019 as we continue to move forward against a fairly strong, economic backdrop and the navigation of the realities of a rising interest rate environment. So with that, happy to open it up for questions that you may have.

[Operator:]

Thank you, Sir [Operator Instructions]. The first question will come from Michael Young of SunTrust. Please state your question.

[Michael Young:]

Hey, good morning.

[Mike Scudder:]

Good morning Michael.

[Michael Young:]

I wanted to start on just the loan growth and CRE outlook kind of as a whole – you know everybody's kind of experiencing that CRE pay down pressure, but can you give any outlook as to whether or not this appears to be kind of the new normal and/or you know how much of the book you think might be susceptible to continue to pay down over the next year or so.

[Mark Sander:]

I’ll answer two ways Michael. This is Mark. Is this the new normal? I think we have to prepare as if it is and candidly we don't see an end in sight over the short horizon I would say. So I think we have to think of it as a new normal. That says, activity is still – in terms of production it’s still solid and it’s hard to believe that you know outsized payoffs are going to continue forever. Again, most of them have been because of property sales and so on one hand that's reflective of the strong market like I alluded to and portends good things in terms of the monies that are going into the sector. But yeah, I think for the foreseeable future we have to assume this is kind of the new normal. Fortunately we've been able to grow through it for several quarters here in a row.

[Michael Young:]

Would you characterize you know a good portion of the theory book is being susceptible to that or is there a kind of a carve out that’s more granular kind of a smaller dollar CRE properties that might not experience the same pay off?

[Mike Scudder:]

It's a great question. You know more of what we’ve seen have been in the larger transactions I will say, so it hasn't really hit the smaller end as much, but the fundamental reasons I would think would apply across the portfolio candidly. There is a little element of we don't do as long a term of fanciness some other people do. So there’s a small portion of it that is insurance companies and the like taking us out past the maturities that we would normally do. But most of it again has been property sales and it's hard to pinpoint a portion of the portfolio that it does and does not apply to candidly.

[Michael Young:]

Okay thanks, and Pat maybe one for you just on the NIM outlook and I guess the amount of CD growth this quarter was maybe a little higher than I would have guessed. Can you maybe just talk about what you guys are seeing in kind of the deposit pricing environment and you know why is the increase in CD so much this quarter.

[Pat Barrett:]

Hey Michael. So yeah, so we are funding a big part of our loan growth needs with CD growth. We’ve talked about this all year. This has actually been a multi-year kind of delivery effort for us to rebalance rather than being the driver of competition. We are in – the markets where we are in, you know we are more of a price taker on deposits and we remain competitive and will continue to remain competitive and so we're definitely seeing increased and more widespread marketing promotions and competition for deposits across Chicago and I think that's probably consistent with most markets now; larger banks are starting to pick that up. So we anticipate you know our funding costs are going to continue to increase. We are going to keep running promotions on one and two year CD's in an effort to term out these liabilities, but we will expect to continue to see higher costs across our interest bearing platform as we go forward. Having said all that, we think with our mix which continues to be a pretty solid you know 60% retail across our deposit base, that the ultimate outcome will be lower costs than what we see for most.

[Michael Young:]

Okay, thanks.

[Operator:]

The next question will come from Terry McEvoy of Stephens. Please state your question.

[Terry McEvoy:]

Hey, good morning everyone.

[Mike Scudder:]

Hey Terry.

[Terry McEvoy:]

Maybe I’ll just start the – how should we think about capital markets revenue going forward. I know it bounces around and I guess is there much of an expense offset when revenue is soft?

[Mike Scudder:]

It does bounce around, it is fairly lumpy. It gets tied to production and most notably commercial real-estate production more than anything else, but even there you know clients want floating rate loans. We don't try to push them into fixed rates and talk them out if they don’t want to do that. And clients have a way of waiting until the last minute to – until the yield curve starts to shift before they decide they want fixed rate. So the second part of your question is, no there really is – there is some offset to expense, but not a lot in terms of when capital markets revenue is down. So it’s not an even split if you will. We’ll take a hit when its down, but there is some upside.

[Mark Sander:]

I’d add to that and it was pretty good linkage with current CRE production or middle to larger denominated deals. So to the extent that production slows and in that space which it did a bit this quarter and there is just less demand and fewer opportunities for the swap business.

[Terry McEvoy:]

And then just, could you talk about the strategy around the purchase consumer loans, just the size of that portfolio? Is there geographic diversity that you are looking to achieve and then I guess yield, are they above the portfolio yield?

[Mike Scudder:]

The geographic diversity does occur although we tend to stay more Midwest oriented, but it's wider than what our normal footprint would be that we would generate. The mix, the yield is not higher I would say, because we tend – when we buy stuff we like to – we’ll stretch a little bit more. If we stretch, we’re going to stretch with people that we know and that are in our footprint as opposed to outside, which is another way of saying the average FICO we put on the books in transactional purchases is higher than what FICO we would put on the books that we would generate ourselves, which is also quite high by the way. So it's not really – to us it’s a good use of liquidity and a good risk return as opposed to a chasing of yield. Every year we look at what we budget and think about at the beginning of the year and how much transactional activity we want to do and what we have done this year in keeping with the plan that we laid out at the beginning of the year.

[Terry McEvoy:]

Okay, I appreciate that. Thank you.

[Operator:]

The next question comes from Chris McGratty of KBW. Please state your question.

[Kelly Motta:]

Hi, good morning. This is actually Kelly Motta on for Chris today. I thought maybe I would circle back to deposits. You mentioned that you have been running one into your CD promotions. I was wondering what rates you are running them at and if they are still ongoing? Thanks.

[Pat Barrett:]

Sure. Hey Kelly, its Pat. So I just saw a rate sheet on that, either yesterday or it might have been Friday and I think we moved those up to 251 to 260 respectively for 13 month and 23 month specials. We generally will automatically move those out each time there's a rate hike and that continues to be really successful, attracting both new money and existing rollovers. I think we're still at more than, at least half new money coming in from the promotions.

[Mike Scudder:]

I think it was about 60% actually with new money.

[Kelly Motta:]

Great! And where did you move them up from?

[Pat Barrett:]

We were at 235 and 250 I think.

[Mike Scudder:]

That’s exactly right.

[Pat Barrett:]

Is that right Mark?

[Mike Scudder:]

That’s exactly right.

[Pat Barrett:]

We are looking at each other. There will be sometimes a 5 to 10 basis points move depending on where kind of longer rates are, but they generally are going to stay in lockstep. Whenever we get a rate increase we’ll pick it up and again as I said earlier, we really look at staying competitive with rates that we see in the market and so with data watching what are the CD rates, promotion and non-promotion for about 100 banks, that’s in market and national.

[Mike Scudder:]

Let me add to that. As you are all aware, we are not running this for the quarter, we are running this for the long term. So as we go through that, the commitment that we make to our clients is we'll remain competitive and we’ll be out there working and for our sales folks working hard in the market, continue to grow and expand. So that will always be the case.

[Kelly Motta:]

Thanks, and then just a clarification on your deposit outlook in 4Q ’18. When you say stable away from Northern States, what do you mean by that? I am looking at 5-5.

[Mike Scudder:]

Right. So one of the reasons we buy banks like NorStates is because of the funding base and our deposit growth has not been as strong as our loan growth going back now for – I guess into last year, early last year and so away from NorStates we would expect deposit balances to be relatively flat, which reflects the continued kind of seasonal runoff from our municipal accounts which are at end of third quarter, kind of hit their annual highs with inflows second, third quarter and the outflows fourth and first each year. And so that activity will bring balances down obviously by a couple of $100 million in the fourth quarter versus third quarter averages.

[Kelly Motta:]

Thanks.

[Operator:]

[Operator Instructions]. The next question will come from Nathan Race of Piper Jaffray. Please state your question.

[Nathan Race:]

Hey guys, good morning.

[Mike Scudder:]

Good morning Nate.

[Nathan Race:]

I got on late, so I apologize if you touched on this, but can you just help us kind of think about the expense progression into early ‘19 as you get cost base from NorStates, and also wondering if you know when we’re thinking about 2019 expenses, if that contemplates any relief that we may get in the FDIC insurance assessments and so forth.

[Pat Barrett:]

Hey Nate, its Pat. So we haven't put out our outlook for 2019 yet, so I'll have to caveat what I'm saying in those terms, so not really giving full guidance on that. But as we’re exiting the fourth quarter with NorStates, we see our expense run rate staying where it is now, plus $2 million a quarter for NorStates. And then again keep in mind I mentioned earlier we're going to have about $6 million or $1.5 million a quarter increase due to the lease accounting adoption with the sale leaseback transaction coming back on the books, which in broad brush terms if you think about Delivering Excellence, we're going to be out of $3 million a quarter of run rate of expense, recurring benefits in the fourth quarter with a $20 million guide for the full year of next year. So we got another $2 million a quarter, so we’re doing excellent. So in broad brush terms, delivering excellent benefits in 2019 will offset the higher occupancy from the sale lease back. Again, without giving guidance for 2019 there will be merits and inflation increases across the board. You know I think 2% to 3% is reasonable, although I would caveat that by saying that the competition for talent is picking up and you know there’s expected to be you know more pressure on wages and salaries because of that.

[Nathan Race:]

Okay, got it, that's helpful. Thanks Pat. And then Mark, the question on loan prices and yields, you know just curious as we've seen base rates move higher with each rate hike. Just curious if you're seeing any spread erosion at this point and maybe just any color on what you know the weighted average rate on new loan pricing is relative to kind of the portfolio yield.

[Mark Sander:]

Sure. I would say that the spread – new spreads have been stable the last couple of quarters, but also the lower – we saw some compression early in the year and that’s like the level compression has remained for this year. So again stable in the last couple of quarters, but off of a lower base as we started the year. Our yields, our portfolio yields have increased you know across the board, you know 5 to 15 basis points in terms of the note rate. As rates have gone up keep in mind about half of our book, a little bit, about 60% of the book on a non-swapped basis is floating and off that you know a certain amount is tied to LIBOR and a certain amount is not. So you know we don’t give the full basis points of 25 every time rates go up is the point of all that. Pat, anything you would add?

[Pat Barrett:]

I’ll just add that you know pricing competition continues to ratchet up. It's super tight, so the production yields in the third quarter did tip down across most of the commercial segments by a few basis points, but are still in general at or around the 5% range, so continued pressure on pricing.

[Nathan Race:]

Okay, got it. And then just on credit, the relationship has moved to non-accrual. I guess I just want to clarify, there was already a specific reserve established previously outside the third quarter or that reserve was allocated here in 3Q?

[Mark Sander:]

That reserve was established in Q3.

[Nathan Race:]

Yeah, got it. Was this a transaction with other banks or was it syndicated or was this kind of a newer issue that popped up recently?

[Mark Sander:]

It was a of a multibank deal that yeah, I would say has been on our radar screen for some time, but have shown some deterioration in the last quarter.

[Nathan Race:]

Okay, I appreciate all the color. Thanks guys.

[Operator:]

[Operator Instructions] There are no further questions. I will now turn the call back over to Mr. Scudder for any closing remarks.

[Mike Scudder:]

Great! Let me just kind of reiterate you know what I had said before I opened it up. This was a good quarter. You know a number of the activities as we look through and think about it, we feel good about where we’re positioned; we feel good about our production levels; we feel good about our deposit base and our capital levels and the sales momentum that we have going forward. Delivering Excellence is doing well. NorStates is a nice addition, both in terms of talent and in terms of overall deposit strength and you know we remain focused on our business and our promise to our clients, which is to help them be successful financially, and we're doing that through a superior service experience that’s well recognized in the market and that they've come to expect. So before I leave all of that, I think I would be remiss and I want to take the opportunity to thank all of our colleagues who listened to our call for their contributions too and in their investment in our performance. So they continue to be the face of our company and they deliver on our promise every day. So with that, I'll close. Thank you for your interest in First Midwest and wish everyone a great day.

[Operator:]

Ladies and gentlemen, this concludes the conference for today. Thank you all for participating and have a nice day! All parties may now disconnect.