Alerus Financial Corporation (NASDAQ:ALRS) Q2 2022 Earnings Conference Call July 28, 2022 12:00 PM ET
Company Participants
Katie Lorenson – President & Chief Executive Officer
Alan Villalon – Executive Vice President & Chief Financial Officer
Karin Taylor – Executive Vice President & Chief Risk Management Officer
Conference Call Participants
Ben Gerlinger – Hovde Group
Jeff Rulis – D.A. Davidson
Nathan Race – Piper Sandler
Operator
Good afternoon and welcome to the Alerus Financial Corporation Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.
This call may include forward-looking statements, and the company’s actual results may differ materially from these indicated in any forward-looking statements. Important factors that could cause actual results to differ from those indicated in the forward-looking statements are listed in the earnings release and company’s SEC filings.
I would now like to turn the conference over to Alerus Financial Corporation President and CEO, Katie Lorenson. Please go ahead.
Katie Lorenson
Thank you. Good morning, everyone, and thank you for dialing into our call today. Joining me today in Minneapolis is Karin Taylor, our Chief Risk Officer; and Al Villalon, our CFO. I am proud to announce that during the quarter, we added Jim Collins, a seasoned bank leader in the Twin Cities to our executive team as our Chief Banking and Revenue Officer.
Jim will lead and support the continued new client growth and existing client expansion, while building on our recent successes in adding talented bankers and advisers in the Twin Cities and throughout our footprint.
On July 1, we closed on the acquisition of Metro Phoenix Bank, the 25th acquisition in the company’s history. We are pleased to have Metro Phoenix join the Alerus franchise. The Phoenix-Scottsdale-Mesa is one of the fastest-growing areas in the country over the past five years. Metro Phoenix Bank started by Steve Haggard, is a well-established, high-growth and highly efficient bank with a strong commercial presence.
With the approval and closing, Steve has now assumed leadership over the entire market as the Arizona President. Together, our combined organizations are one of the largest community banks and SBA lenders serving the market. This acquisition significantly increases our presence in Phoenix, Scottsdale and demonstrates our commitment to growth and client expansion in Arizona.
Looking back on the quarter, we reported EPS of $0.53, which included a $0.05 negative impact related to merger expenses. We continue to experience good loan growth as loans grew 17.3% on an annualized basis ex PPP. Growth was across products, but highlighted by additions to our commercial client base, a proven catalyst for growing our retirement business.
Year-to-date, new plan sales in the retirement division are nearly 50% higher than last year, while loss plans have remained at stable levels. Our wealth management division produced at record levels of new revenue, which drove a linked quarter increase in revenue despite the quarter being the worst midyear market results in over 50 years. We experienced outflows in deposits which were largely linked to seasonal declines in core operating accounts of public entities. And excluding PPP, our underlying core NIM expanded 9 basis points to $2.96. Our mortgage originations on a year-over-year basis declined at a level greater than originally anticipated as 30-year mortgage rates quickly rose from 3% to 6%.
While we are coming off peak originations of $1.8 billion in 2021, we never overbuilt on an infrastructure, and we channeled our One Alerus culture and shared resources across business units to get that level of business done. While the mortgage industry is rapidly changing, our focus has always been on the purchase market due to our long-standing relationships with realtors and builders, especially in the Twin Cities. As our competitors reposition and downsize, this will present opportunities for our top-tier producers to pick up more market share in the purchase market.
Despite the headwinds in mortgage, we continue to execute on our One Alerus strategy as we continue to grow the number of plans and participants in retirement and wealth management. We continue to deepen our relationships within our large client base on our platform.
Today, we remain uniquely positioned in the banking sector as we continue to generate over 50% of our revenues from fee income, the majority of which is recurring annuitized revenue with minimal capital allocation and no credit risk.
Our loan portfolio remains well diversified and credit is very strong as we continue to experience minimal past dues, low levels of classified loans and negligible charge-offs. In addition, as a non-CECL bank, we stand with a healthy allowance for loan losses at 1.66% of total loans.
Expense management remains a key focus with core expenses flat to the previous quarter and down nearly 6.5% compared to the second quarter of 2021. I want to thank all of our employees for their hard work and dedication and welcome the Metro Phoenix Bank employees to our company. Our momentum in attracting and retaining talent as well as client growth opportunities across our diverse product offering, supported by strong common Tier 1 capital levels of 14.19% has Alerus well positioned to continue to grow, expand and deliver strong returns to our shareholders.
With that, I will hand it off to Al to discuss the financial details of the quarter. Take it away, Al.
Alan Villalon
Thanks, Katie. I will start my commentary on Page 14 of our investor deck that is posted in the Investor Relations part of our website. For the second quarter of 2022, reported average loans increased 4.0% on a linked quarter basis. Excluding the impact of PPP, average core loans increased 4.6% on a linked quarter basis.
The increase in core average loans was driven by a 9.2% growth in C&I and a 5.4% growth consumer. Within C&I, we saw a pickup in loan production, along with an uptick in utilization rates as clients continue to tap into their existing lines. C&I utilization increased from 28% to 32% during the quarter. At the end of the first quarter, we had approximately $6.9 million of PPP loans outstanding. Average deposits declined 2.7% on a linked quarter basis due to a seasonal decline in interest-bearing deposits. The decrease in interest-bearing deposits was due to a seasonal decrease in our public unit funds.
We typically see a drawdown in these public funds in the summer with an increase happening during the fall usually. Turning to Page 15. Credit continues to remain very strong. We had net charge-offs of 7 basis points in the first quarter compared to 3 basis points of net recoveries in the prior quarter. Our nonperforming assets percentage was 16 basis points compared to 15 basis points in the prior quarter.
While our allowance is 1.66% of period-end loans. On Page 16 are some key revenue metrics. On a reported basis, net interest income decreased 5.1% on a linked quarter basis. Excluding the impact of PPP, net interest income increased 6.9% due to higher loan growth and higher net interest margin.
Noninterest income declined 0.8% on a linked-quarter basis due to lower retirement revenues offset by improved mortgage and wealth management. I will go into detail about those segments in later slides.
Turning to Page 17. Net interest margin was 2.98% in the first quarter, an increase of 15 basis points from the prior quarter. Excluding the impact of PPP, our core net interest margin was 2.96%, an increase of 19 basis points from the prior quarter. Core net interest margin benefited from higher investment portfolio yields along with higher loan yields from our commercial real estate profile offset by lower yields from our C&I portfolio.
Turning to Page 18. $706 million or 37% of our loans are floating, as you can see at the top of the slide. As you see, almost all variable loans are above their stated floors or have no floors. On the bottom left, you can see a waterfall of net interest income and net interest margin that our volumes and rate as previously mentioned, positively impacted our results.
On Page 19, our core funding mix remains very strong. We saw a small increase in our deposit costs due to rising interest rates. Given the recent rise in interest rates, we do anticipate our deposit costs to rise now. We are currently anticipating our deposit beta to be between 25% to 30% in the quarter, which is still lower than we previously anticipated.
On Page 20, I’ll provide some highlights on our retirement business. AUM declined 10.1% due to mainly to market volatility with S&P being down over 16% in the quarter and the Aggregate Bond Index down 5%. While AUM decline, we did see the number of participants increased approximately 450,000 versus 445,000 in the prior quarter. Revenues declined 7.7% from the prior quarter, mainly due to lower asset loans.
Turning to Page 21. You can see highlights for our wealth management business. Similar to what we saw in retirement, AUM declined 9.5%, mainly due to market volatility again. Despite the decline in AUM, revenues increased 4.1% from prior quarter, mainly to a custody deal that was won at the end of the prior quarter, strong new production by advisory business and higher transactional revenues.
Turning to Page 22. I’ll talk about our mortgage business. Mortgage originations increased approximately 45% for prior quarter as we rebounded from record low housing inventories in our main markets. Despite the challenging market, the current volumes are over 22% higher than a similar time period in 2019.
Lastly, turning to Page 23, is an overview of our noninterest expense. During the quarter, noninterest expense increased 5.0%, mainly due to higher incentive compensation related to revenue-related activities, mainly an improvement in mortgage. We also saw an increase in professional fees due to higher M&A expenses in the quarter. Other expenses decreased as a result of lower provision for unfunded commitments as we saw a pickup in commercial utilization. And marketing expenses increased quarterly due to a typical seasonal pickup.
Now, I’ll provide some forward-looking guidance. First, I’ll comment on the Metro Phoenix Bank, which we closed on the acquisition on July 1. As of June 30, Metro had the following balances. They had $84 million of cash, $38.5 million of investments and $277.6 million of loans. We are assuming $354.5 million of deposits. We issued 2.68 million shares of total stock for a consideration of $63.8 million for the purchase of Metro. After the purchase of Metro, we do not anticipate a material impact on our tangible common equity or capital ratios as a result of the transaction.
Now, I’ll provide guidance for the third quarter. On a stand-alone basis, we are expecting average loan growth to be in the high single digits on a linked-quarter basis. For Metro, we’re expecting double-digit loan growth on a linked quarter basis in that loan book.
Overall, we expect some interest margin expansion, but the expansion will be limited as we expect — as we anticipate rising deposit costs given rising interest rates. Again, we are currently expecting a deposit beta to be between 25% to 30%.
With Metro, we expect net interest income to grow in excess of 20% from the prior quarter. We expect overall fee income to be down low single digits, mainly driven by continued decline as we expect overall originations to be under pressure due to seasonality. Given no market growth, we expect well to be up similar as the second quarter and return to be flattish. On a stand-alone basis, we’re expecting expenses to be up mid-single digits, mainly due to merger-related costs. Excluding those merger-related costs, we expect core expenses to be flattish.
With Metro, we expect Metro to increase our core expense base by mid-single digits. And lastly, we expect credit to remain strong and continue to expect net charge-offs to be below historic levels.
With that, I’ll now open it up to Q&A.
Question-and-Answer Session
Operator
[Operator Instructions] The first question comes from the line of Ben Gerlinger with Hovde Group.
Ben Gerlinger
Offset of this, I think there’s been a lot of rumor and a little bit of speculation. And hopefully, we can put anything to [indiscernible]. And I hate to start the Q&A off on this somewhat, somber tone, but Al, after you — throughout the first pitch, did you cheer [indiscernible] or for the further Yankees?
Alan Villalon
I cheer for baseball in general, but I appreciate the question there. I am — my roots are from New York, but I’ve been in the Twin Cities for a long time. I support baseball in general, I love. So whoever win that game, I’ll support off of.
Ben Gerlinger
Yes, of course, you cheer for whatever going that will be the Yankee. But anyway, so when you guys think about the market as it is today, obviously, of the different segments within the company and they’re hold a different market forces. So the core bank should have higher rates coming forward used to have a stronger revenue. And with that, it gives you an opportunity to reinvest within the broader business overall. When you think about priorities and internal investment, where would you put that next incremental dollar? Is it there any one segment, that technology investment priority or anything to that degree that would allow Alerus to be better set up for the next decade?
Alan Villalon
I think Katie, take that one for sure.
Katie Lorenson
Sure. Good question. And I referenced in my opening comments, the commercial banking being the catalyst for many components of our company. And so as we focus and laser in on where we bring the most value to clients, we are very much bringing. Obviously, Jim Collins on board, who is a proven leader and grower in commercial banking. That is where we’re focusing on and growing our franchise because it does give us the opportunity to expand on the fee income at a very high level of success.
Ben Gerlinger
Got you. Okay. So it’s a bit of a lead into a broader relationship, if I’m kind of squaring that circle a bit here. So — and then my follow-up really kind of stems to the next kind of bigger picture question going forward. Is there any opportunity that you can trim out more expenses with throughout the franchise overall, assuming that kind of mortgage doesn’t move? Or is it really dependent upon kind of — I mean, if rates don’t change much from mortgage, shouldn’t change much, i.e. compensation doesn’t change much. Is there anything from a structural perspective from an expense within that, that could improve overall profitability?
Katie Lorenson
Yes. Absolutely.
Alan Villalon
I could take that one. Go ahead.
Katie Lorenson
Sorry. Go ahead, Al.
Alan Villalon
Yes. So Jim has been on board here now for about 60 days, and he and I have been sinking up on various things, and I’ve been here for about a little over six months. As we kind of look at the structure, we do see that there’s opportunity to kind of rightsize some expenses, but also, too, we’re dealing with an inflationary environment right now is that we are dealing some of those inflationary pressures that are — everybody else is dealing with what too. So for us right now, trying to keep expenses flattish in this high inflationary environment is, is our goal right now. But as we look for the long term, though as Katie is going to comment here as well and probably build on this is that we’re trying to build a structure to that’s going to allow us to grow for the long term because there’s so much opportunity for us as we’re — as I kind of keep working every day and kind of understanding the potential of this Alerus story, Jim and I and everybody here see that there’s so much runway for us to grow, and some of that growth has required investment as well.
And that’s what we’re kind of trying to work on now that what is the investment and growth that we’re going to make — investments we’re going to make to help support that growth for not just the short term, but for the very long term. Katie, do you want to add anything to that?
Katie Lorenson
Yes. I would add. Yes, a key focus for us in the past three to five years has been on a couple of things. It’s been on developing the credit infrastructure as well as bringing on technologies that allow us to be more efficient to grow. And so our opportunity to scale without adding overhead is impressive. And under Jim’s leadership and our ability, as you can see by our past recent successes in bringing on talent, we think is the real catalyst to support that growth going forward at a higher level than what we’ve been with the right credit and operating infrastructure behind it.
Ben Gerlinger
Got you. That’s helpful. If I can just sneak one more in. I know that the kind of the core bank is a bit of the gateway to all-encompassing relationship. And I don’t think that you guys are on the hunt for necessarily a full bank acquisition today, but if you were to think about any incremental lender or any type of lending would be a banker or a team of banks or a team of bankers, is there any geography or any lending class that kind of is top list? I know don’t think much of anything for high-caliber talent, but if you could kind of write the script on who the next incremental banking hire would be or would be that characteristic?
Katie Lorenson
Sure, Absolutely. So C&I bankers, mid-market, strong treasury management, and we think we’ve got great opportunities here to do so in the Twin Cities. In regards to full bank acquisitions, we continue to look and we keep that funnel pretty wide at the top as we look at businesses that could add scale or just bring a client base that gives us that opportunity to expand relationships. But certainly, talent acquisitions, which we’ve done a number of continue to be our highest or one of our highest priorities.
Operator
The next question comes from the line of Jeff Rulis with D.A. Davidson.
Jeff Rulis
Question on the deposit flows. Yes, I think the pandemic clearly disrupted kind of seasonality. And as you guys spoke to, I think you mentioned that I just want to check in on the confidence that you do see those public inflows, maybe you’ve seen some quarter-to-date, but I want to get a sense for — the other part of that is there’s seasonality, but there’s also some changing deposit behavior and deposit retention. We’re seeing some outflows for the industry. So just kind of your take on confidence and seasonality as well as are you seeing some kind of rate chasing activity as well?
Alan Villalon
Thanks for the question, Jeff. We actually just did a study on a seasonality approach, and it has been over the last several years, pretty much tried and true that those public funds go from us in the summer, and that’s a couple of talking about them on the call today because — and we’re starting to see again a slight pickup again in the deposits from the public funds because it’s just that the 2Q, a lot of those public funds are being used, a, for features, they’ve been paid out there in the summer and then they start building back in coming to fall. So we feel comfortable about that. But you’re right, though, there is some seasonality that we’re watching it very closely and especially with the Fed hike that just happened, we’re just going to be watching behavior very closely. So that is definitely on our radar.
Jeff Rulis
Outside of that public fund movement, do you — are you seeing some of the other regular way customers kind of chasing raise? Or is there any piece of the deposit mix that you’ve seen that change quarter-over-quarter?
Alan Villalon
No, Jeff. We actually haven’t. I mean the thing that’s been really impressive here is how sticky our customer base is right now. We’ve been able to lag our deposit costs right now. And it’s been — there hasn’t been a lot of movement out there. And that’s why our — when I said that we’re expecting our deposit beta pick up, it’s still below what I would have anticipated to be in a rising rate environment like this. So it’s been a pleasant surprise for us to see how — for me, I should say, because I’ve only been here for six months, how sticky our customer base is.
Jeff Rulis
Got it. I want to circle back on the expenses. I know you tackled kind of some structural big picture efficiency-type questions. But the — could you remind us of the timing now of where you think Metro Phoenix, the conversion of that occurs and what maybe could be carved out on the targeted cost saves with that and timing?
Alan Villalon
Yes. So we’re targeting conversion in later part of third quarter this year — I’m sorry, third quarter of this — so sometime late in the third quarter, we [indiscernible] in a conversion. We are still anticipating the cost saves that we’ve originally disclosed, but it’s going to be — there might be just a little bit plus or minus in that range, I’d say, just a little bit.
Jeff Rulis
Okay. And then lastly, just maybe housekeeping related to the deal. Any kind of adjustment on goodwill or tangible book dilution, given sort of rate movement we’ve had. I don’t know if the marks change, but basically at announcement, are those — any update on goodwill or tangible book impact?
Alan Villalon
Yes. Actually, we just got those in not just recently, and I’d say that there’s really no change to that. And that’s why I put that highlighted in the guidance that we still don’t anticipate a material impact to our tangible common equity or capital ratio. So we just got those marks in.
Operator
The next question comes from the line of Nathan Race with Piper Sandler.
Nathan Race
Yes. I appreciate the guidance for retirement and benefit services revenue in 2Q. But I think in longer term, love to get an update just in terms of just with the natural attrition within [indiscernible]. How you guys are kind of thinking about the opportunity to add clients organically with your sales efforts and also just given how you guys have kind of increased the capture rate as plan participants and to return when you guys onboard those assets into wealth management and kind of how that translates to future growth after 3Q, assuming equity markets kind of stabilize from here?
Alan Villalon
Katie, do you want to take that one or do you want to take that one?
Katie Lorenson
So I’ll start and then you can fill in, Al. Nate, thank you for the question. In regards to retirement, as I mentioned in my opening comments, we are seeing a higher level of new plan sales than we have in previous years as well as reduced levels of attrition. And so many of those plans are not asset based, the new plans, many of them are on a per plan, per participant base. And so we’ve got a couple of tailwinds, I believe, certainly the market on the asset-based fees as well as on the new plan basis. And as those plans grow, our fee income naturally increases at participation in the plan increases. So that’s one catalyst of the growth and then commercial client expansion.
So as we grow our commercial banking client base, our typical success rate with commercial clients is about 50% and also getting the retirement plan over time. It doesn’t always come day 1. But certainly, as the relationship develops, we absolutely get a chance to talk to the clients about the services that we can offer. And half the time, we end up getting that plan to transition to us. And again, the retirement business is a significant feeder system to our wealth management business and more than it has ever been in the past.
We’ve always been good at capturing rollovers on a reactive basis. And over the course of the past year or two, we’ve been much more focused on being proactive with that participant base, engaging with those individuals that are potentially nearing retirement or are just in a place where financial planning is something that they’re thinking about and something that they’re in need of.
And so that opportunity within that division is significant for building out the rest of our fee income opportunities in the future.
Alan Villalon
Yes. I think Katie gave a great overview. The only thing I could add to that is that our leader in the retirement business, Rob Woytassek. He’s really stepped in and really done a great job in that commercial client expansion story there. And he’s identified opportunities for us to really kind of get that overlap and synergies in terms of deeper penetration with our clients. So we’ve already seen some initial success in that commercial expansion strategy, and he’s targeted some opportunities for us, and we’re going to continue executing on that probably for foreseeable future.
Nathan Race
Got it. And just going back to what Katie said initially in terms of kind of the mix shift change in clients being added. I imagine that also reduces kind of the market sensitivity of this revenue source going forward, if I’m kind of hearing you guys correctly?
Katie Lorenson
Right. It does. Most of the new business is not all tied to asset base. Some components of it, trust and custody, of course, would be advisory services, would be that the administrative and recordkeeping tend to be more tied to just a per plan fees and per participant fees.
Nathan Race
Okay, great. And then, if I could just kind of switch gears and kind of think about overall balance sheet dynamics. With Metro Phoenix adding roughly $450 million or so in earning assets here in the third quarter, how do you guys kind of think about overall deposit flows from here? It sounds like you guys are going to compete on deposit pricing going forward? Is it kind of fair to expect kind of the earning asset base kind of stabilizes around $3.5 billion from here? Or how do you guys kind of think and that would in turn kind of support margin expansion just given kind of the asset-sensitive nature of your balance sheet? Or how are you guys kind of just thinking about the overall balance sheet flow and just level going forward?
Alan Villalon
Yes. Thanks for that, Nate. This is — as we think about the balance sheet right now, I mean, I highlighted in there. I mean, we are seeing really strong loan growth. And on our — just on a lower stand-alone basis, we’re thinking high single digits there on a linked quarter basis. But Metro, talking to that Steve Haggard down there, we are really excited about the opportunity and we’re expecting that book to grow in the double-digit range as well. Our preference is loan growth right now with a 14.19% Tier 1 capital, common Tier 1 capital. We have a lot of dry powder to support loan growth and we’d like to keep supporting that loan growth. So right now from an investment portfolio side, though, we’re kind of letting some of that stuff mature and to help continue to support the loan growth there and remixing the balance sheet just a little bit. But with that loan growth we’re putting on to, we’re going to have — we’re expecting deposits to come and help support that as well from a funding standpoint.
Nathan Race
Okay. Yes. And so just given the ongoing earning asset mix optimization with loan growth remaining strong year in the third quarter. And just given kind of the asset sensitive nature of the balance sheet, is it kind of fair to expect the margin to get kind of north of $3.20 and perhaps even north of $3.50 in both the third quarter and fourth quarter, respectively, of this year?
Alan Villalon
Yes, so on that, we — NIM is always kind of an output function for us, but we are expecting growth in that right now. The question right now as we’re pretty much having pretty frequent discussions on deposit pricing because we don’t monitor it, given that the rapid raise in rates. It’s hard for us to really say where it’s going to pinpoint. But the one thing I could do say is that with Metro coming on board, though, there’s going to be an uplift to our NIM, especially because their margins are definitely higher than us, probably in the tune of, I want to say, 40 to 50 basis points. If you look at their year-to-date performance for us and you’re stripping up PPP for both companies, so they definitely have — they have a lot higher margin for us, and that’s going to help our margin as well. But again, one thing what I’m tempering it just a little bit now is that given what Jeff asked about previously question that we have a lot of rise in rates. There’s — we’re just watching the deposit dynamic right now.
Nathan Race
Got you. Makes sense. And if I could just ask one more. Credit has always been kind of a nonissue for you guys historically. And that remained the case in the second quarter. By and large. So just kind of thinking about the SBA team that you guys added in the Twin Cities fairly recently. And then I believe you guys are picking up an SBA team in Phoenix as well. And I guess, generally, that asset class has looked at higher — looked at as kind of higher risk reward. So I guess I’m just curious if just given all the rate pressures that’s impacting small businesses these days, if your plans to continue portfolio production, is still intact and kind of how you guys shift, if at all, kind of your underwriting approach to SBA relative to kind of conventional commercial loans?
Alan Villalon
Karin, do you want to take that?
Karin Taylor
I think in this environment, we’re certainly looking to continue to grow SBA from a relationship perspective, but we’ll also look at the potential to sell some of those on the secondary market. I think we’re open to both approaches. I don’t see us changing our underwriting standards. I think we’ve got strong standards in place and certainly with the guarantee that affords us a level of protection.
Nathan Race
Okay, great. And sorry, perhaps one more for Katie. Just you touched on whole bank acquisition opportunities. But curious to maybe get an update in terms of what you’re seeing in the retirement and benefit services space for additional deals there?
Katie Lorenson
Yes. We continue to increase our sources in regards to partnering with advisers across the country who are in the business, finding these businesses and positioning them to sell within one, two, three, four years. And so that helped us grow our pipeline and get into a higher levels and volume of conversations. And so that’s — we’re very pleased with that activity. There continues to be competition in the space, which I think just speaks to the value of the business of retirement and the annuitized fees and the lack of capital that has to be allocated to those fees. And so we like where we’re at from a conversation from a pipeline standpoint, and we like even more, what we’ve got because clearly, there’s tremendous value within that business unit.
Operator
[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back over to Katie Lorenson for closing remarks.
Katie Lorenson
Perfect. Thank you. And thank you, everyone, for joining our call this morning. We thank you for listening. We thank you for the great questions. I’ll close with just a few comments regarding clearly, our industry is facing some headwinds. Our company has historically outperformed, and we remain well positioned for future success because of our diversified business model and the momentum we’re seeing in building our pipeline for new business, our client expansion across all products and the high level of engagement we have within our team and our leaders is very special. So we are very proud to be where we are. We remain focused on working together to grow our company and the steady and strong foundation that we have is allowing us, again, to differentiate ourselves as we go out to the market and invest and recruit and retain top talent as well as serving the best interest of our clients and deliver long-term value for our shareholders.
So, we thank our shareholders for their investment. We thank our team members for bringing value to our clients each and every day, and we thank all of you for your continued support and interest in our company. Have a great day, everyone.
Operator
The conference call has now concluded. Thank you for attending today’s presentation. You may now disconnect.
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