Independent Bank Corporation — Earnings Call Q3 2026

Operator: Good day, and thank you for standing by. Welcome to the Independent Bank Corporation Third Quarter 26 Earnings Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press 1-1 on your telephone. You will then need to hear an automated message advising your hand is raised. To withdraw your question, please press 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Brad Kessel, President and CEO. William Bradford Kessel: Good morning. And welcome to today's call. Thank you for joining us for Independent Bank Corporation's conference call. And webcast to discuss the company's results for the third quarter of 26. I am Brad Kessel, president and chief executive officer, and joining me is Gavin A. Mohr, executive vice president and chief financial officer, and Joel Rahn, executive vice president and head of commercial banking. Before we begin today's call, I would like to direct you to the important information on page 2 of our presentation, specifically the cautionary note regarding forward looking statements. If anyone does not already have a copy of the press release issued by us today, can access it at the company's website, independentbank.com. The agenda for today's call will include prepared remarks followed by a question and answer session and then closing remarks. Earlier this morning, Independent Bank Corporation reported third quarter 2 thousand 26 net income of $17.9 million or $0.80 per diluted share versus net income of $17.5 million or $0.84 per diluted share in the prior year period. Excluding $2.7 million of after tax merger related expenses, Adjusted net income was $20.6 million or $0.92 per diluted share. Highlights for the third quarter of 26 include net loan growth of $116.6 million or 10.5% annualized from 06/30/2026. That excludes the loans of HighPoint Community Bank. Net growth in total deposits of $115.8 million or 9.4% annualized from the second quarter also excluding HighPoint deposits. A tax equivalent net interest margin of 3.82%, an 11 basis point increase from the linked quarter or 3.76%, up 5 basis points excluding purchase accounting accretion. Another highlight was an increase in net interest income of $7.4 million or 15.4% over the second quarter, This is our thirteenth consecutive quarter of net interest income growth. Our pretax pre provision net revenue was $26.3 million up 13.5% from the prior year quarter. A return on average assets and return on average equity of 1.14%, 12.17% respectively. Or 1.32%, 14.08%, excluding merger related expenses. A tangible common equity ratio of 8.2% as of 09/30/2026 and also a highlight of the payment of our $0.28 per share quarterly dividend in common stock on 08/14/2026. Our third quarter performance demonstrates the strength of Independent Bank's community banking model and the continued benefits of disciplined balance sheet management. Relationship based lending, and a stable, locally focused deposit franchise. We saw strong organic momentum with commercial loan growth of nearly 21% annualized. Solid deposit growth from our business and municipal customers, and improved earning asset yields. Net charge offs remained very low, and our liquidity and capital levels position us well in the current operating environment. The quarter also reinforced the value of our strategy, serving attractive Michigan markets, local decision making, deep customer relationships, and consistent credit discipline. We believe that approach continues to differentiate Independent Bank and supports durable performance through changing rate and economic cycles. We were pleased to complete our acquisition of HCB Financial Corp, parent company of High Point Community Bank, on 07/01/2026. And this quarter reflects our first results as a combined company. Integration work is well underway, and we remain on track for the HighPoint system conversion on November 9. Continue to believe the combination strengthens our presence in complementary markets, and enhances our ability to serve customers, employees, communities, and the shareholders and our shareholders over the long term. A few other highlights during the third quarter. We celebrated the grand opening of our new Grand Rapids headquarters. And we transitioned the broker dealer partner of our wealth management business to Raymond James. Moving to Page 5 of our presentation, deposits totaled $5.5 billion at 09/30/2026. An increase of $659.3 million from the second quarter, which includes $543.5 million of HighPoint deposits. Excluding HighPoint, deposits grew $115.8 million or 9% annualized. Non maturity deposits totaled $4.77 billion, or 86.4% of total deposits. And increased $571.4 million during the quarter which includes HighPoint. The liquidity HighPoint brought, we paid down other borrowings, which declined to just $4 million from $127 million at 06/30/2026. Broker deposits are just $0.5 million at the end of the third quarter. The deposit base is comprised of 46% retail, 39% commercial and 15% municipal. On page 6, we have included in our presentation a historical view of our cost of funds. As compared to the Fed funds spot rate and Fed effective rate. For the quarter, our total cost of deposits increased by just 2 basis points to 1.55%. Primarily reflecting modestly higher time deposit costs. While our cost of savings and interest bearing checking accounts were unchanged at 1.6%. This time, I would like to turn the presentation over to Joel Rahn, to share a few comments on our loan growth and provide an update on our credit metrics. Joel F. Rahn: Thanks Brad, and good morning everyone. Page 7 summarizes our loan activity for the quarter. Loans increased $483.1 million in the quarter including addition of the HighPoint loan portfolio. Excluding HighPoint, commercial loan generation was very strong, as Brad mentioned, $123 million quarterly growth nearly 21% annualized. We continued our strategic investment in commercial banking talent to supplement our loan growth adding 3 experienced bankers in the quarter. Year to date, we have added 11 experienced commercial bankers, bringing total to 55 bankers comprising 8 commercial loan teams across our statewide footprint. Compared to a year ago, we have added a net of 9 experienced commercial banks. To the team. Looking forward, our pipeline remains strong, but given the significant production late in Q3, it is down from where it was in. At 06:30. However, we feel that we can continue to grow our loan portfolio at a low double digit rate as market disruption is creating market share opportunity for us. Looking at commercial loan production through ninethirty, the mix of C&I lending versus investment real estate has been split evenly. And for our commercial portfolio, the mix is 66% C&I and 34% investment real estate. Including the addition of the $280 million HighPoint commercial loan portfolio. Page 8 provides detail on our commercial loan portfolio concentrations, which remain consistent with prior quarters. Our largest segment of the C&I category continues to be manufacturing, $222 million or 8% of the total portfolio. In the investment real estate segment of the portfolio, the largest concentration is industrial, $257 million or 9.3%. We outlined key credit quality metrics and trends on page 9. Overall, we continue to demonstrate strong credit quality. However, we have experienced an increase in our nonperforming loan category. Total nonperforming loans were $39.2 million or 80 basis points of total loans at quarter end, up slightly from 74 basis points at sixthirty. it is worth noting that $30 million of this total is commercial, and 2/3 of the commercial nonperforming loans continues to be 1 commercial development exposure that we have discussed in previous quarters. We continue to work through the challenges of this particular project, are appropriately reserved for any loss exposure. Past due loans totaled $6.1 million or 12 basis points consistent with 36. it is not reflected on this slide, but worth noting that we realized net charge offs of $847 thousand or 3 basis points of average loans on an annualized basis in the first 3 quarters of the year. This compares to $1.2 million or 4 basis points through Q3 of 25. At this time, I would like to turn the presentation over to Gavin for his comments, including the outlook for the remainder of 2020 Thanks, Joel, and good morning, everyone. Gavin A. Mohr: I am starting on Page 10 of our presentation. Page 10 highlights our strong route to our capital position. The change in capital ratios on a linked quarter basis is primarily due to the acquisition of HCB Financial Corp. On 07/01/2026. At 09/30/2026, our consolidated Tier 1 leverage ratio is 9.9%. Our common equity tier 1 ratio is 11.1%, and our total risk based capital ratio is 13.1 Our tangible common equity ratio was 8.2%, or 9.2% excluding accumulated other comprehensive loss. Tangible book value per share was $23.10 compared to $24.24 at June 30 primarily reflect. Reflecting $39.1 million of goodwill and other intangible recorded in the acquisition Turning to Page 11. Net interest income increased $9.9 million or 21.8% from the year ago period and $7.4 million from the second quarter. Our tax equivalent net interest margin was 3.82 during the third quarter of 26 compared to 3.54% in the third quarter of 25 and up 11 basis points from the second quarter of 26 Excluding purchase accounting accretion, our margin was 3.76%, up 5 basis points from the linked quarter. Average interest earning assets were $5.82 billion in the third quarter of 26, compared to $5.16 billion in the year ago quarter and $5.22 billion in the second quarter of 26. HighPoint added approximately $557 million of average earning assets. Page 12 contains a more detailed analysis of the linked quarter increase in net interest income, and the net interest margin. Our linked quarter. On a linked quarter basis, our third quarter 26 net interest margin was positively impacted by 3 factors. Purchase accounting discount accretion, and added 6 basis points. An increase in earning asset yield added 5 basis points and change in the earning asset mix added 2 basis points. These were partially offset by an interest charge off on a commercial loan. The equated to 1 basis point and higher funding costs that equated to 1 basis point I would note that the accretion this quarter was $932 thousand on loans and securities. Page 13 is a new slide that shows the contractual cash flows from our fixed rate loans and securities over the next 6 quarters. Over that period, approximately $737 million in loans and securities are scheduled to mature or reprice at a weighted average yield of 4.74%. That includes $197 million in securities at 2.84 percent and $539 million in loans at 5.44%. With new commercial and mortgage loan production coming in at yields above 6.5%, this re-- repricing provides a meaningful tailwind to our asset yields. On page 14, we provide details on the institution's interest rate risk position, the comparative simulation analysis for the second for the third quarter 26 and the second quarter 26 calculates a change in net interest income over the next 12 months under 5 rate scenarios. All scenarios assume a static balance sheet. The base rate scenario applies the spot yield curve from the valuation date Shock scenarios consider immediate permanent parallel rate changes. Base case modeled net interest income increased to $233.8 million from $204.2 million at June 30 with $23.3 million of the increase attributable to High Point along with improvement in the model margin Our position remains modestly asset sensitive, a 100 basis point increase in rates would increase net interest income by 1.97%. While a 100 basis point decline would reduce it by point 64%. We continue to manage expose-- exposure to lower rates through $50 million notional floor purchases and the termination of $25 million pay fixed swap. Currently, 37% of assets repriced in 1 month, and 48.5% repriced in the next 12 months. Moving on to page 15, noninterest income totaled $15.8 million in the third quarter 26, compared to $11.9 million in the year ago quarter and $15.3 million in the second quarter 26. Third quarter, 2026 net gains on mortgage loans totaled $1 million. Compared to $1.5 million in the prior year quarter. The decrease was primarily due to unfavorable fair value adjustments reflecting higher interest rates at quarter end, including a mark on a construction of permanent loans transferred to our portfolio. Mortgage loan servicing net was a gain of $4.1 million in quarter 26 compared to a gain of $100 thousand in the prior year quarter. The change due to price was a gain of $3.4 million or $0.12 per diluted share after tax in the third quarter 26 compared to a loss of $600 thousand or $0.02 per diluted share after tax in the prior year quarter. As detailed on page 16, our noninterest expense totaled $44.8 million in the third quarter of 26 compared $34.1 million in the year ago quarter and $37.8 million in the second quarter of 26, The increase reflects the addition of HighPoint's operating expenses and $3.5 million of merger related expenses Compensation employee benefits increased $3.4 million from the prior year quarter primarily due to the addition of HighPoint staff. South-- and salary increases effective 01/01/2026. As well as higher performance based compensation. This was partially offset by lower health insurance cost. Data processing expense increased $1 million and amortization of intangible assets was $900 thousand compared to $100 thousand in the second quarter reflecting the core deposit intangible recorded in the HighPoint acquisition. Our efficiency ratio was 61.3%. Turning to page 17, this is our update for our 2026 outlook. Showing our actual performance during the third quarter compared to the original outlook we provided in January 2026. As a reminder, that outlook did not include HighPoint. Our outlook estimates full year loan growth of 4.5% to 5.5%. Excluding HighPoint, loans increased $116.6 million in the third quarter or 10.5% annualized, which is above our forecasted range. Commercial loans increased $124.1 million, and mortgage loans increased $1.1 million, while installment loans decreased $8.6 million. Third quarter 26 net interest income increased by 21.8% over 2025 or 8.7% excluding HighPoint, which is above our forecasted range of 7% to 8%. I would highlight that this is our thirteenth consecutive quarter of increasing net interest income. Net interest margin was 3.82% for the current quarter and 3.54% from the prior year quarter and up 11 basis points from the linked quarter The third quarter 26 provision for credit losses was an expense of $4.8 million or approximately 0.4% of loans annualized. Which was above our forecasted range of 0.2% to 0.25%. that is primarily due to specific reserve on the 1 commercial relationship Joel discussed. The initial allowance on the acquired HighPoint loans was established through the purchase accounting rather than through the provision. Moving on to page 18. Noninterest income totaled $15.8 million in third quarter 26 or $15.2 million excluding HighPoint, which is above our forecasted range of $11.3 million to $12.3 million. Third quarter 26 mortgage loan originations sales and gains totaled $136 million, $102.3 million, and $1 million, respectively. Mortgage loan servicing net generated a gain of $4.1 million in 2026, third quarter of 26, which is above our forecasted target. Noninterest expense was $44.8 million in the third quarter, including $3.5 million of merger related costs Excluding HighPoint, our merger-related costs, noninterest expense was $37.3 million, slightly above our forecast range at 36 to 37 million dollars. Our effective income tax rate was 17% for the third quarter of 26. Additionally, we repurchased 104 thousand shares of common stock for $4.2 million during the first 9 months of 26. Was related to the liquidation of a HighPoint Community Bank's ESOP program. Looking to the fourth quarter, we expect our net interest margin to continue to benefit from asset repricing in the September fed rate increase partially offset by competitive deposit pricing Following November 9 conversion, we expect to begin to realize the cost savings from HighPoint-- the HighPoint combination with savings largely reflected in our 2027 expense run rate. We expect remaining merger and conversion related expenses of approximately $3 million primarily realized in the fourth quarter of 26. We continue to expect our provision for credit losses to track loan growth and credit migration. Year to date provision is about 0.23% of average loans annualized, which is within our forecasted range. That concludes my prepared remarks. I would now like to turn the call back over to Brad. William Bradford Kessel: Thanks, Gavin. We have built a strong community bank franchise. Which positions us well to effectively manage through a variety of economic environments and continue delivering strong and consistent results for our shareholders. As we move through the remainder of 2026, our focus will be continuing to invest in our team, investing in and leveraging our technology, and completing the successful integration and November 9 conversion of HighPoint Community Bank. While always working to be Michigan's most people focused bank At this point, we would now like to turn the line over to the operator to open up the call for questions. Operator: At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press 1-1 on your telephone and wait for your name to be announced. Again. Please stand by while we could. While we compile the question and answers. And our first question comes from Brendan Nosal at Hovde Group. Airline is now open. Brendan Nosal: Good morning, folks. Thanks for taking the question. Joel F. Rahn: Morning. Brendan Nosal: Maybe starting off here on asset quality. Can you just update us on that large nonperforming waterfront condo nonaccrual in Western Michigan? Just kind of remind us what the balance is where you are in the resolution process, and where reserves specific reserves stand on the credit. Yeah. Joel F. Rahn: The frustratingly, the balances are still the same as they were prior quarter. It is still wrapped up in a in the bankruptcy court. And the borrower has until 12:31 to file their plan of reorganization. And that total credit is right around $30 million but then you net out about approximately. I think these are round numbers. We have about $8 million that is backed with government guarantees, USDA. So it is. The net exposure on that is about $21 million and I do not think that we specifically disclosed the amount that we have reserved, but we feel like we are fully reserved for any potential loss exposure. there. Brendan Nosal: Okay. Thanks, Joel. Maybe just kind of keeping on the theme of credit. If I look at problem assets. I think they are up for, like, 10 quarters in a row. And, like, granted, like, the increases have been small. You closed the deal this quarter, and then there is kind of that large, chunky 1 that is in that balance as well. But just kind of given the trend over the past 2.5 years, is there a point at which you kind of look at that and say, like, you need to either, like, work the book a little bit or kinda change how you think about kind of the commercial underwriting process, or is this just kind of normal-ish churn in your view? Joel F. Rahn: Yeah. No. it is a very fair question. it is we all got very used to and liked when we had, you know, no nonaccrual assets. So I do think that we are. You know, as we have migrated up, we look hard at our own portfolio constantly. And, you know, feel very confident to say there is no systemic issue here. We have 4 credits. The biggest 1 that we just discussed Excuse me. 3 credits that are really driving that. And 1 that we added this quarter is included in that 3. And so I. You know, I will not disclose particular details about that 1, but the 1 that we added this quarter, we basically fully reserve, you know, from a very conservative standpoint, basically reserve the entire loan amount because it involved bankruptcy. And it was primarily a cash flow related loan. We still think there is there is a reason to be optimistic that the borrower will come out of that Chapter 11. But yet to be determined, and we have to on the side of caution with our reserve So that is what we did this quarter. So I. Yeah. It. We are just watching very closely. Economically, though, we do not see a lot of signs of stress in the portfolio. Our overall watch list percentages are very flat. is a good sign. So it is not that we continue to migrate a lot of things into the watch category. it is just been migration of those few credits within the watch category to non accrual that is really helpful color, Joel. Brendan Nosal: Thanks for taking the question. Yeah. Thank you. Operator: Our next question comes from Adam Kroll from Piper Sandler. Your line is now open. Adam Kroll: Hey. I am on for Nathan Race. Good morning, and thanks for taking my questions. William Bradford Kessel: Good morning, Adam. Yeah. Adam Kroll: So maybe a question for Gavin to start. Really appreciate the slide in the deck with the loan and security repricing data and, obviously, some tailwinds still to come there. But would just be curious how you are thinking about the margin trajectory from here particularly as you continue to remix the loan portfolio in the commercial. And maybe just unpack how you are thinking about deposit betas through the hiking cycle? Gavin A. Mohr: Yeah. So starting with kind of the margin. I am not. Have any change to what we have communicated in prior quarters in terms of the margin and the continual grind higher All else, you know, assuming there is no macro level shock in the system. So, you know, we provided that slide for. To give you guys more clarity into, what is driving that momentum. So I anticipate the coming quarters to trend to continue in terms of margin expansion. In terms of beta, you know, we think about beta. If we if we can manage in that 35% to 40% range through the cycle, Adam, we would be we would be really happy, and that is where we are we are really targeting. Adam Kroll: And, Gavin, that is on a total deposit beta? Or interest bearing? Gavin A. Mohr: Right. Yeah. Cost of funds. Yes. Okay. Got it. Adam Kroll: And then I believe the conversions target for early November. So maybe Gavin, just curious if you could update us on operating expense expectations for the fourth quarter and maybe just cadence of cost saves there and as you head into 2027? Gavin A. Mohr: Yes. So the fourth quarter will close on November 9. That weekend, we will convert the organization. But much of the expense will run through December 1 of the things here, Adam, that we the cost saves have not come as fast as I had originally modeled. Because we have chosen to run the banks fully staffed and in terms of support. Through this period between July 1 and November 9. For, you know, just because we believe that is the right thing to do for customers and for the execution of the overall integration. So the fourth quarter, I think you see. As I mentioned, we are estimating about $3 million of additional merger related costs coming in the fourth quarter. And then we will provide there following, you know, the fourth quarter or 2027. Forecast, and that will. That run rate will include the fully loaded HCB normalized and normalized expense. So I do not have a number for you today. We are in the process of second round of the 2027 budget, but, it gives you kind of the timing. William Bradford Kessel: Yeah. And we had in the original pro forma of about a 40% cost save. Gavin A. Mohr: Yeah. We feel like we are We are on target for that. Yeah. it is just that we had we communicated we would get 50% in 2026 for half a year. We are not we are not quite there. We are not there. So. But. Yes. Yep. Adam Kroll: Got it. I appreciate all the color there. And then last 1 for me. Question for Brad. I know you are probably still focused on the integration, but would appreciate to hear your thoughts on potential for additional M&A and any additional opportunities you are seeing across your footprint? William Bradford Kessel: Yeah. You know, like you said, we are focused on what is right in front of us. I am very optimistic about how well this has gone up to this point and how well it will go through conversion weekend. And you know, part of my outcomes there is for the bank to have a good reputation and being a good partner as we go forward. And so I do believe there will be other opportunities Gavin said that, as we have said quarter after quarter, year after year, the primary growth vehicle Independent Bank will be organic growth. And that is worked out really, really well for us. Each 1 of these individual talent additions, I would call sort of a mini merger, if you will, And that is worked out really well for us. So that. That will be the path for us. Adam Kroll: Got it. I appreciate the color there, and thanks for taking my questions. Thank you. Thank you. Operator: Our next question comes from Damon DelMonte from KBW. KBW. Your line is now open. Damon DelMonte: Hi, good morning guys. Hope everybody is doing well and thanks for taking my questions. First question is on loan growth. Just curious, do you guys have any expectations of like a attrition or targeted exits on some of the acquired credits which could kind of damper the growth outlook in the next couple of quarters? Joel F. Rahn: No. HighPoint has a really solid loan portfolio, and their underwriting and their risk appetite mirrors ours. So, no, nothing that we are looking at to say that we are not comfortable with or want to migrate out of. it is very straightforward and blends in very well with our portfolio team. Great. Damon DelMonte: Joel, can you just remind us of your overall outlook for growth just kind of given the pipelines and some of the investments that you made? Joel F. Rahn: Yeah. I think you know, we said at the beginning of the year, we want to grow it at a low double digit rate on the commercial side. We are doing that, and I fully expect that we can continue to do that into 2027. Damon DelMonte: Okay. Great. And then I guess for Gavin here. As far as the projected fair value accretion in the coming quarters, I think this quarter I think you noted it was like $900 thousand-ish or so. that is a little higher than we had been modeling. So do you have a kind of a schedule of what you expect over the coming quarters? Gavin A. Mohr: Yeah. So I have a great question. That was based. that is in a-- that was all an estimate, Damon, based off of the modeling from the third party fair value evaluation. So it all connects. But next quarter, we will see at the loan level detail what the accretion is. I think it is reasonable, but did you know that will that-- that can-- that will move up and down just based on prepayment speeds. So it is. It is. it is in the ballpark. Yeah. Damon DelMonte: Okay. Okay. Great. And then, I guess, lastly, on fee income, you know, obviously, the mortgage market remains pretty challenging right now. Just kind of curious how the pipelines are heading into the end of the year and if you would expect a similar level to what you saw in the third quarter? Or do you think the combo of seasonality and the challenging market would kind of take that number down? Gavin A. Mohr: Yeah. So, you know, production app wise, we did see a slowdown late in the quarter just due to the sharp increase specifically when the conforming went over 7%. Apps pulled back. I wanna make it. I wanna. You know, and there is a lot going on this quarter. Fee income, area was did come. Was a mess. But when I look at the margin, what we are modeling is margin, gain on sale. The margin was strong where the gains on mortgages got hit was in the fair value marks. And so we had some loans that were originated and saleable. Ended up on our portfolio. That mark was about $300 thousand negative and working against the gain on sale. So just to say there is some things going on there. But overall, when we think about going forward, if rates stay elevated, production will come down. Yes. Damon DelMonte: Okay. Great. that is all that I had. Thank you. Thank you. Thank you. Operator: And our next question comes from Peter Winter from D. A. Davidson. Your line is now open. Peter Winter: Can you hear me? Gavin A. Mohr: Yes. Okay. Peter Winter: Good morning. You guys have had a lot of success recruiting bankers. I am just wondering, can you talk about the recruitment pipeline? Joel F. Rahn: We continue to recruit. Peter, and still feel there is opportunity out there. For us, primarily with talent coming from the larger organizations. And, so we are. We continue to be active, and we are we are having ongoing conversations. Peter Winter: Got it. And then Gavin, you talked about that the continued expansion on the margin grinding higher Last quarter, you talked about maybe 2 to 4 basis points per quarter over the next 12 months. I am just wondering if that outlook changed at all, maybe a little bit more towards the higher end, just given the rate environment is different. Gavin A. Mohr: Yeah. I think that certainly is a benefit, Peter. I think that forecast is. Though, is still very reasonable, and maybe it does move us to the higher end, but that. I would not change the range. Today. Got it. Peter Winter: And then just my last question. You have the decline in capital ratios from the acquisition, but they are still strong. Just curious, Brad, what your thoughts are buying back stock. You had the buyback this quarter, but that was more for the HighPoint's ESOP. Just thoughts on buybacks. William Bradford Kessel: You know, would say this. You know, when we think about capital, Number 1 is supporting the organic growth number 2, having a consistent and upward trending dividend Number 3 would be considering for share repurchases But a lot of that depends on items 1 and 2, and also where we are trading at. And then number 4, of course, having the capability of some other, merger opportunity became available. So those-- that priority list remains the same. And I would say when I look at where we are today, the current markets, and where we see it going forward, I am very optimistic about the direction for IBC. So yeah, I think we are in a good spot. Okay. Thanks, Brad. Operator: This concludes the question and answer session. I would now like to turn it back to Brad Kessel for closing remarks. William Bradford Kessel: In closing, I would like to thank our board of directors and our senior management for support and leadership. I also want to thank all our associates, and I want to continue to welcome our new colleagues from High Point Community Bank We continue to be so proud of the job being done by each member of our team, each team member in his or her own way continues to do their part towards our common goal of guiding our customers to be independent. Finally, I would like to thank each of you for your interest in IBC and for joining us on today's call. Have a great day. Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.