Bank of Marin Bancorp ($BMRC)

Good morning. Thank you for joining Bank of Marin Bancorp's earnings call for the first quarter ended March 31, 2026. I'm Krissy Meyer, Corporate Secretary for the Bank of Marin Bancorp. [Operator Instructions] Joining us on the call today are Bank of Marin, President and CEO, Tim Myers; and Chief Financial Officer, Dave Bonaccorso, Our earnings news release and supplementary presentation which were issued this morning can be found in the Investor Relations section of our website at bankofmarin.com, where this call is also being webcast. Closed captioning is available during the live webcast as well as on the webcast replay. Before we get started, I want to note that we will be discussing some non-GAAP financial measures. Please refer to the reconciliation table in our earnings news release for both GAAP and non-GAAP measures. Additionally, the discussion on the call is based on information we knew as of Friday, April 24, 2026, and may contain forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, please review the forward-looking statements disclosure in our earnings news release as well as our SEC filings. Following our prepared remarks, Tim, Dave and our Chief Credit Officer, Misako Stewart will be available to answer your questions. And now I'd like to turn the call over to Tim Myers.

Thank you, Krissy. Good morning, everyone, and welcome to our quarterly earnings call. We are very pleased that are executing in the first quarter across a number of key areas resulted in continued improvement in year-over-year profitability metrics, loan production, net interest margin expansion and improved credit quality. I'd like to discuss our first highlights. Compared to the first quarter of 2025 net income and earnings per share grew by 75% and 77%, respectively, in the first quarter of this year, largely due to the repositioning of our balance sheet our net interest margin increased 6 basis points on a sequential quarter basis to 47 basis points over the prior year's period. During the quarter, we originated $81 million in new loans [ $61 million ] of which was funded an almost 30% increase over the prior year's period. While the first quarter is a seasonally slower [indiscernible] production, the additional hires we made to our banking team the generally favorable economic conditions we continue to see in our markets and a healthy increase in commercial real estate loan demand led to our strongest first quarter in a number of years. New loan product allocation was roughly in line with our existing portfolio with a slight skewing towards C&I. During the quarter, we worked diligently to improve our credit quality. We sold our longest tenure classified and nonaccrual loans totaling $16.3 million, which were downgraded to substandard in 2021 and moved to nonaccrual in 2024. At that time, we took specific reserves to $7.3 million based on property valuations. The no sale proceeds validated our reserve assumptions with the charge-offs equaling the specific amounts reserved. While other workouts were offset by new downgrades, the impact of the no sales on credit metric was substantial. Nonaccrual loans declined from 1.27% of assets to 0.41% and the ratio of classified to total loans decreased from 1.51% to 0.85%. Notably, following the no sales, virtually all of the remaining nonaccrual balances are comprised of one nonowner-occupied commercial real estate loan that has no loss expectations based on underlying valuation and cash flow. Despite strong seasonal loan originations, Q1 loan growth was negatively impacted by our nonaccrual loan resolutions. Excluding these purposeful exits, loan paths were roughly in line with the prior year's period and were generally driven by asset sales and cash payoffs. We continue to experience elevated payoffs in consumer-related loans primarily within acquired portfolios, including auto and mortgage loans. Despite these dynamics, our net interest margin benefited as new loans came on to the books at an average rate that was 40 basis points higher than the average rate on payoffs. The Q4 interest recovery of $667,000 not repeated in Q1 and the decreased number of days in the first quarter [indiscernible] benefit. Excluding other unique transactions, we believe our loan portfolio will positively impact the net interest margin in 2026 going forward. Our banking team continues its relationship-based approach to attract lending opportunities and drive to cultivate new deeply rooted relationships with particularly strong momentum in the first quarter in the Greater Sacramento area. While we continue to navigate a competitive market environment on pricing and structure, we have attracted a significant amount of new client relationships while maintaining our disciplined underwriting and pricing criteria. Our total deposits increased in the first quarter due to a combination of increased balances from long-time clients as well as continued activity bringing in new relationships. The rate environment remains competitive and clients remain rate sensitive. However, they continue to bank with us for our service levels, accessibility and commitment to our communities allowing us to continue reducing our cost of deposits while growing our deposit base. With that, I'll turn the call over to Dave Bonaccorso to discuss our financial results in greater detail.

Thanks, Tim, and good morning, everyone. Our net income was $8.5 million or $0.53 per share. Our net interest income increased from the prior quarter to $30.3 million due to average balance sheet growth and higher investment security yields and reduce deposit costs as well as the positive churn in the loan portfolio that Tim discussed, resulting in a 6 basis point increase in our net interest margin. Adjusting for the fourth quarter recovery of interest and fees on a paid off nonaccrual loan relationship our sequential quarter net interest margin growth would have been even more impressive than 14 basis points. During the quarter, the expansion of the deposit relationship with a relatively high cost was a headwind to net interest margin. At quarter end, we moved a portion of these funds off balance sheet to take advantage of a relatively high one-way sale rate, which boosts our overall net income and contributes to noninterest income. This opportunity has persisted into Q2, and we will continue to look for opportunities like these to actively manage our balance sheet to improve shareholder returns. Moving to noninterest income. Most areas of fee income were relatively consistent with the prior quarter, although we did receive a special dividend on FHLB stock as well as [ bowling death ] benefit, which positively impacted our total noninterest income in the first quarter. Our noninterest expense increased by $2.5 million in the prior quarter, primarily due to higher salaries and employee benefits related to seasonal salary and benefit accrual resets, including payroll taxes, incentive compensation accruals, profit sharing, insurance and 401(k) matching. The first quarter also included a higher level of our annual charitable giving, which we expect will comprise almost 70% of total for 2026. Overall, Q1 noninterest expense was broadly in line with our expectations. Though charitable giving is expected to return to more normalized levels. During the coming quarters, we otherwise expect noninterest expense to continue near current levels as we continue to invest in people and technology, which we believe will fuel our growth and ultimately drive shareholder returns. Due to the improvement in asset quality in our loan portfolio and a substantial level of reserves we have already built, we did not require a provision for credit losses in the first quarter, and our allowance for credit losses remained strong at 1.08% of total loans which we believe is an appropriate level following the sale of our nonperforming loans. Given the continued strength of our capital ratios, our Board of Directors declared a cash dividend of $0.25 per share on April 23, the 84th consecutive quarterly dividend paid by the company. With that, I'll turn it back over to you, Tim, to share some final comments.

Thank you, Dave. We continue to see stable economic conditions in our markets. Our credit quality continues to improve. Our loan pipeline remains strong and had healthy demand, and we continue to expect to generate solid loan growth in 2026, while also continuing to grow deposits through the addition of new relationships and expansion of existing client relationships. Given the positive trends we are seeing in many key metrics, we expect to continue to deliver strong financial performance for our shareholders as we move through the year. With that, I want to thank everyone on today's call for your interest and your support. We will now open the call to questions.

[Operator Instructions] Our first question will come from Matthew Clark with Piper Sandler.

How much was the interest reversal that negatively impacted the loan yield on a dollar basis?

That was a -- it was, I believe, $667,000.

Okay. I'm sorry. I think I misheard you. I thought there was another one here in 1Q.

There's not...

[indiscernible] over quarter. And part of the decline was impacted by that $670,000 interest accrual reversal in Q4.

Got it. Okay. Okay. And then I saw the spot rate on deposits. How are you thinking about deposit costs kind of beyond that spot rate with the fit on hold? And what would you suggest is your marginal cost of new deposits these days?

So I think similar to what we've done in recent quarters, we'll continue to look at targeted adjustments away from Fed cuts. Obviously, probably fewer Fed cuts. expected than compared to what the market was expecting to start the year. So that's how we'll continue to address that. We also have time deposit repricing happening in the background. I believe that was a 24 basis point decline sequential quarter. So those are a couple of data points. Anything else you want to add, Tim?

No. I think some of the total -- or the pressure on total deposits continues to be just large existing clients that have relationship rates that continue to go up. Some of that's -- we're managing with one-way cells, et cetera. But now overall, we continue to look for off-cycle reductions. And as you noted, the spot rate is 4 bps lower than the total deposit rate at the end of the quarter -- or sorry, end of the year.

Yes. Okay. Great. And then you haven't bought back stock for the last couple of quarters. You've got credit. A lot of your credit pretty much resolved here? How do you think about -- how should we think about the buyback here going forward?

So as we described when we did the balance sheet restructure, given that we got support from the regulators and all our constituents to do without any equity raises with sub debt. we had said we were going to earn our way back into a median leverage ratio or CET1 ratio coming back towards peer level. And certainly, at the time, that was -- the perception was holding more capital is better in the event that the credit situation with those loans worsen. As you noted, taking that off the table, brings us closer to having a comfort level to do that. So it's a conversation we're going to start having, but we still want to earn our way back into a bit of a higher ratio before maybe embarking on that. But certainly not needing to keep capital for the risk inherent in those deals we shed during the quarter, we'll feel better about having that conversation. So I don't want to overpromise, but that did remove a big hurdle for sure.

Your next question will come from Jeff Rulis with D.A. Davidson.

I guess kind of following the restatement you had during the quarter, trying to get my bearings on the margin and expense levels. I think you kind of outline the expense expectation sounds like pretty flat from here, a pretty front-end loaded Q1 and then leveling off. But I guess if I try to get into NII and the margin I think we had sort of had discussions of a terminal margin level in the high 3s given kind of the adjusted number is sort of mid-3 figure. I'm trying to get a sense for -- you've had a lot of restructuring and repositioning. It sounds like still an upward bias to the margin but kind of all in whether specific or not kind of a margin level you think that's indicative of the balance sheet today?

I think on a full year basis, mid-3s is probably still appropriate or appropriate in line with the comment you just made, obviously, adjusted downward given the restructuring. And we covered deposit costs a little bit, but we still think there are decent tailwinds with regard to loan repricing.

So Dave, the step-up this quarter linked quarter I guess, or the jump off rate of March is $26 million and you so to say, by the end of the year, a mid-3s is doable. I guess that would put the kind of the linked quarter margin increase. Is that give or take a pretty good proxy?

Yes. I guess I would look at it a different way. I mean you're probably looking at a handful of basis points a quarter. I mean there's some movements comparing off the prior quarter with that nonaccrual loan payoff, et cetera. But that's how I would think about it moving ahead is with the benefits to loan repricing, that's probably worth a few basis points and then any other deposit repricing benefits we have along the way would add to that, such that you get to potentially up to a mid-3s number for the year.

That's great. And then maybe just one other question on the credit side. The timing of the large loan resolution, is that its own independent path? Or do you find that's indicative or something moving in the market that you feel like you can move forward on this other larger $8 million owner occupied CRE or do you view them really independently, that's something that you are chasing down separately? And this remaining loan you expect the workout base to continue for quarters to come?

Yes. So they're completely different animals, Jeff. The notes we sold were the ones we downgraded. That was our endemic special that we've been talking about ad [ nauseam ] for a number of years. The market just wasn't going to recover in time for that to be properly restructured. We're not going to maintain a book -- a loan on our books where we need to take a charge off. So we elected to sell the note and [indiscernible] done a really good job of estimating value and negotiating that sales such that we didn't have any further provisioning impact. The other loan we've mentioned on the call is something where, again, the loan-to-value, the debt service coverage ratio, all the metrics are adequate. We're in a dispute over terms of an extension or renewal -- I'm sorry, extension. And so that's really what's keeping it. So we're in the middle of a legal process on that. And so there really isn't -- they're not -- it's not apples-to-apples. And so we will look to -- continue to look to resolve that, but we don't have any loss expectations on that credit, whereas the other one had a serious valuation impact, as you know.

Appreciate it. Tim, maybe most importantly, interested in your view of the -- just the general market and on the CRE side. And as you view vacancy rates and the general kind of broader Bay Area sort of firming up? Or how would you characterize kind of recent CRE trends in the area?

Yes. So I would continue to bifurcate Bay Area between San Francisco, particularly for office and the rest of Bay Area. We never saw the significant value degradation or lease rate declines in the outer markets that we saw in San Francisco, which, as you know, plummeted. The trends continue to be very positive. Certainly, a lot of that driven by AI-related investments. And even on the property on the note we sold, we were looking at 20% to 30% a year of improving NOI. So the market is rebounding. There's news about retail coming back in the retail areas. It has to hit a bottom. You see people being opportunistic now for those of us that had assets at prior valuations, that was going to take a long time. But we certainly see more opportunism in the market. Some of our activity over the last couple of quarters has been related to people taking advantage and making purchases. And so I view all of that as a positive. Again, I would bifurcate between dealing with an asset that was on the book before the value degradation and what's happening now. But overall, the trends remain very positive in San Francisco.

Your next question will come from Woody Lay with KBW.

I was just hoping that you could sort of walk through the higher expenses in the first quarter, the jump from 1Q to 4Q. And then it sounds like the forecast, excluding the charitable contribution should remain relatively flat. Does that embed any additional hiring from here?

Sure. I'll start that one off. So just zooming out a little bit, I think the company has a long-standing history of very strong expense management. If you go back the last 10 years or so, our noninterest expense to average assets has been in the favorable top 30% of peers. So it's important to what we do. I think we're pretty thoughtful around it, and that's despite operating in some pretty expensive markets. I think where the deviation may have happened is if an estimate was jumping off of Q4 for personnel expense, keep in mind, we did have some incentive bonus reversals in Q4. And I think historically Q3 has probably been a better predictor of Q1 than Q4 has. And so our Q3 actually looks -- relative to Q3, our Q1 looks similar to where it has been in the last couple of years. And then you put on top of that the annual resets that we discussed in our earnings materials like payroll taxes, profit sharing, et cetera. That's how we get to the key driver of our overall number this quarter, which is in personnel. And then you hit on charitable contributions. We expect that to normalize. I think one other area that was a little bit of an outlier this quarter was the FDIC insurance expense. And due to the repositioning, we had a lower leverage revenue and negative earnings in our last assessment because of those losses. That was applied to a higher assessment base and given the balance sheet growth and also lower tangible equity. So that, I think, explains some of the expenses you're seeing in Q1, and we expect that to normalize as more of the benefits of the repositioning flow through.

Got it. That's helpful. And then maybe just last for me, sort of putting some of the moving pieces together. I mean, it sounds like there's continued tailwind to the margin. You've got a slightly higher expense base, but it should be relatively stable versus 1Q. So I mean the expectation is still for positive operating leverage throughout the year.

Yes, I agree with that.

Yes. I believe that's the case. Whether we are looking to be opportunistic, though, and continue to add higher [indiscernible] that can help us drive the growth. I can't really predict the timing for that. But we are looking to make strategic growth efforts in some of the markets that maybe have been lesser performing for us to kind of round out, get more pistons firing. And so if we can make some hires that can help drive the growth. Certainly, we'll be doing that with a mind towards adding interest-bearing assets to the books, but that could impact the run rate over the year. But as Dave said, I think when you take all the noise out, starts to flatten out, minus any adds.

Your next question will come from Andrew Terrell with Stephens.

Maybe going back to the margin. I was hoping we could maybe get a finer point on some of the loan repricing dynamics and maybe -- just curious where new origination yields are coming in today, how that compares to what's rolling off. And if you have kind of the cadence of what you expect to reprice or turn over on the loan book throughout the year?

Sure. So the usual statistic we gave us a 12-month look at monthly loan yields and that number is probably 15 to 20 basis points comparing the monthly loan yield in March 2027 to March 2026. That's interest rates flat and flat balance sheet. So there's that. And then I think you asked about yields on new loans. Those were [ 591 ] most in Q1, which compares to [ 551 ] for paid off loans. We have about 17% of the portfolio repricing in the next year and 34% over the next 3 years, and that is on Page 25 of the deck. Not much change in those numbers and then still a relatively low level of rate 8%.

One of the headwinds is obviously naives because I think for the prior couple of quarters, it was a pretty flat trend on new asset yields versus -- or loan yields versus those paying off. As we continue to have headwinds in the payoff of some of the acquired mortgage or auto loans that we've talked about. And that was one of the larger payoff categories in the quarter again, and those are at higher yields. And so getting a 40 basis point lift in -- despite that is encouraging, but that has been a headwind because those are some of our better yielding loans and the payoffs on that because of the rates have been slightly higher.

Yes. Okay. Great. I appreciate it. And then if I could shift over to -- I know you talked about a little bit on the question on the buyback. But your CET1 and capital ratios have normalized post the restructure last year. It seems like you're relatively in line with peer levels. I guess can you just reframe post restructure now that the credit picture looks a lot cleaner right now post this quarter. Where would you like to be from a CET1 or leverage ratio standpoint? I guess, can you remind us kind of the north stars there, the binding of strange?

We really haven't established a level where we need to be. It's all relative to the risk on your balance sheet, obviously. And so as I mentioned before, that's a conversation we're going to be more willing to have now that we have less risk within our loan book and less of a chance of large surprising provisioning or charge-offs. So I'm reluctant to give a target there, but I would say a conversation we're going to be more willing to have as a management board.

And I'll just add because I think a lot of the intention gets paid to holding company capital ratios, an important consideration for us is our bank level capital ratios and relative to peers there. And I think that's where we have probably more to do in terms of rebuilding those.

Got it. Okay. Makes sense. And I guess just last question for me. your earnings, your profitability is up quite a lot since the restructure, but the ROTCE on an operating basis, still kind of around that 10%-ish level. I'm just curious, your thoughts -- will obviously improve as the margin continues to move higher throughout the year. But as you step back and kind of look at your forecast, where do you see the kind of incremental levers to pull to improve profitability closer to peer levels?

So I mean the 2 we're most internally focused is building loan activity and particularly while yields are where they are and also driving more fee income. And we have some strategic initiatives around that. And so I can't remember if it was you earlier in this or someone else mentioned building more operating leverage into the model. That's really what we're looking to do. So if we make ads, it will be mainly around -- the staff story, mainly around driving loan growth. If that happens quickly enough and you get that almost immediate positive operating leverage, and again, some strategies around driving fee income that we'd rather not give any color on, but nothing overly dramatic, but things that we think can add meaningfully to the bottom line. So we'll continue in that area. I don't see any big cost reduction activity. The goal at this point is not to cut our way into more profitability.

[Operator Instructions] Our next question will come from David Feaster with Raymond James.

On the growth side for a minute, there's some really encouraging trends there with the originations and the pipeline growth. I was hoping you could maybe elaborate a bit on some of the drivers behind this, right? You've alluded to new hires, that makes obvious sense as to increasing productivity, but you also discussed in the deck, you talked about comp program enhancements, updates to calling programs. So maybe you can elaborate on what you did there and how much of the growth in originations you're seeing in this quarter is from the new hires versus increasing productivity from existing hires just as we think of the success on some of those adjustments that you've made.

Yes. Thanks, David. I would say the majority of the production came from those hires we've been referencing over the last year. The top people continue to be the top people. We've made some leadership changes in our Sacramento market that certainly realizing we need to better post the American River Bank acquisition to capture the opportunities out there, and that is paying dividends. I would say the Sacramento market overall because a good portion of the growth that was booked in other offices are loans to borrowers that are in Sacramento just other people's relationships. So I think it's doing a better job in Sacramento is doing a better job with the hiring. It's having an incentive plan that pays people fairly without so many caps so that you're incenting a more of a hockey stake approach. I think, was key to that. So maybe people have to do more enter into the incentive component. But if accelerate or exceed their higher hurdles, then the payouts get bigger. And I think you combine good people with a better plan and you're going to get results. And that's what we're seeing. We're starting to see strength in the construction market. Our construction group has gotten a lot more active, going back to my comments earlier. I think Jeff Rulis question about activity in San Francisco, a lot more people stepping in to buy properties for development for condos and/or single-family residences. So we're starting to see that come back as well. So it's not any one thing. It's a combination of all those things.

Maybe just touch on the credit side. credit cleanup exclusive of that, with that in the rearview, I mean, things look pretty benign, at least on your balance sheet. I'm curious what -- if you could touch on what you're seeing on credit broadly. I know the wine industry is under a bit of pressure. You've done a deep dive into kind of some upcoming CRE maturities. Curious if you could just talk away some of the takeaways from that high-level credit commentary and just whether you're seeing more pressure on underwriting just -- or credit broadly just given increasing industry competition.

Well, I'll start at your end there. I think competition has picked up, loan-to-value, debt coverage, recourse versus nonrecourse. We certainly see the market getting frothy at times, particularly in certain asset classes like multifamily Wine is a big weak spot I think we're a gigaton our exposure is not all that big there anymore. But in terms of headwinds to part of the North Bay economy, yes, that industry is struggling. We don't see a lot of impact within our customer base or prospects of things that are making the national news like tariffs or cost of oil transportation, not that it's not out there, but we're generally seeing stable and healthy economic trends with what we're looking at. So I would say we feel good about our commercial real estate and minus some ups and downs and individual performance. I don't see any trends that caused me to worry that we're going to see -- revert back to some of these larger downgrades into substandard or nonaccrual. And again, if you -- if you take out the legal aspect of what we're dealing with -- with pretty much the singular nonaccrual loan we have, we'd be back to almost 0, which, as you know, is where we love to be.

That's helpful. And then just looking at your slide deck, on Slide 6, you got those 4 top priorities for you all that are to drive long-term value. But #3, scaling through efficiency gains in M&A. We've already talked a bit about #4 and #1, and you said you're not going to talk about #2. So I was hoping you could talk a bit about #3, where you're seeing opportunities for efficiency gains and any thoughts that you might have on M&A?

Yes. So I will talk about #2. It's not that I won't. It's just giving guidance is something that we are very reluctant to do. But we do have specific initiatives around treasury management, fee income, wealth management, trust income. There's a number of components to that that will add up to a meaningful increase in that component, but no one thing that's overly dramatic to discuss, all part of getting better. M&A, obviously, getting our valuation back and continuing to build on that. opens more doors for us. So it's certainly something we remain open to and haven't shut the door on that at all just for a while. It was challenging on deal metrics or deal economics with where we were trading. But again, we're hoping that continues to make improvements and we can -- that can become a more realistic opportunity for us. We are looking at efficiency over the last couple of years. We have done some staff adjustments. We've closed some branches, and now we have a -- well, going on the second year now, pretty significant efficiency strategies within the technology or back office world and now going forward around AI, using that intelligently to build efficiencies into the system and more operating leverage. So again, it's lots of arrows in the quiver as opposed to any 1 or 2 big things. But those are the main things we mean in that #3.

Your next question will come from Tim Coffey with Brean Capital.

Okay. So I got a couple of questions on kind of the loan side. When it comes to the spreads in the market right now, are you at all concerned about some of that starting to -- those spreads starting to compress given one general love competition, but also some of the new entrants to the market?

There's no question. There's been pretty incredible compression in pricing. We really try to stick hard to an approach that meets our ROA hurdles. Generally, loans priced in the 200 over treasury depending on the type alone or above are going to meet that. We regularly see people bidding at the 1.5 to 1.75 level. And so our job is to parse through or what we've been doing is parsing through those really attractive opportunities, get as much as we can, not race to the bottom to get high-quality credit as high as we can. But there is no question the market is very aggressive on pricing.

And as you grow loans this year, book new loans, are you agnostic to the type? Or do you prefer one or the other, like commercial or commercial real estate for instance?

Well, I've been saying for a while, I would love to do a higher proportion of C&I. That's not -- that's a slow ship to turn, in terms of more aggressively building that, but we are seeing a higher proportion. If you look at the breakdown of loans we booked this quarter, pretty much mirrors that of the overall portfolio. But within that breakdown, there was a skewing towards C&I as a percentage. So we're hoping to have almost $9 million of unfunded commitments within that C&I bucket for the quarter. So we'd love to continue to drive that. We are seeing a higher mix over the last few quarters of multifamily, I think all of which has been CRA qualified. And so that accomplishes a number of things. So if we can win a multifamily deal at a good spread and get that. That's something worth being moderately aggressive over I expect construction to pick back up. Obviously, there's always risk in that book, you have to manage, but that's been a piece or a piston that wasn't firing given the kind of construction projects we did in the geographies as we did them, it's nice to see that coming back as well. So you're right, we are generally agnostic, but I think if we continue those trends, it will help from both a concentration standpoint, but also just the growth aspect of. But I think where we're doing a good job and what the growth in the market is right now seem to align pretty well.

Okay. Further growth in C&I and construction all else equal, would probably put upward pressure on your allowance ratio. Is that about right?

Say that last part again, put upward pressure on what?

If you see more production in C&I and construction, that would probably put an upward bias on your allowance ratio?

Well, I guess possibly, yes. I guess it depends on the individual credits. But yes, it depends is almost always the answer. But that's possible, yes.

Okay. And then one for you, Dave. What's the appropriate tax rate to use?

What we experienced this quarter, I think it's pretty indicative for the full year. As you hear from a tax perspective than last year.

We have no further questions at this time. I will hand back to Tim Myers for closing remarks.

Thank you again to everybody. If you need any follow-up information, by all means, please reach out to Dave and or myself, and we will get you answers. Looking forward to seeing you guys on the next quarterly call.