Byline Bancorp, Inc. (BY) Q1 2022 Earnings Report, Transcript and Summary

Good morning and welcome to the Byline Bancorp’s First Quarter 2022 Earnings Call. My name is Emily and I will be your conference operator today. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer period. [Operator Instructions] Please note the conference call is being recorded. At this time, I would like to introduce Brooks Rennie, Head of Investor Relations for Byline Bancorp to begin the conference call. Please go ahead.

Thank you, Emily. Good morning everyone, and thank you for joining us today for the Byline Bancorp first quarter 2022 earnings call. In accordance with Regulation FD, this call is being recorded, and is available via webcast on our Investor Relations website along with our earnings release in the corresponding presentation slides. Management would like to remind everyone that certain statements made on today’s call involve projections or other forward-looking statements regarding future events or the future financial performance of the company. We caution that such statements are subject to certain risks, uncertainties, and other factors that could cause actual results to differ materially from those discussed. The company’s risk factors are disclosed and discussed in its SEC filings. In addition, certain slides contain and we may – remain refer to non-GAAP measures, which are intended to supplement, but not substitute for the most directly comparable GAAP measures. Reconciliation for these numbers can be found within the appendix of the earnings release. For additional information about risks and uncertainties, please see the forward-looking statements and non-GAAP financial measures disclosures in the earnings release. I would now like to turn the conference call over to Alberto Paracchini, President of Byline Bancorp.

Thank you, Brooks, good morning, and welcome everyone to our first quarter earnings call. We appreciate all of you joining us this morning with me on the call today are Chairman and CEO, Roberto Herencia; Lindsay Corby, our CFO; and Mark Fucinato, our Chief Credit Officer. As this our normal practice, I’ll start by walking you through the highlights for the quarter, and then pass the call over to Lindsay who provide you more detail on our quarterly results before opening up the call for questions. Turning over to Slide 3 of the deck. During last quarter’s call, we mentioned that the momentum we had in 2021 would carry-forward into the first quarter 2022. And we were correct on that assessment. Notwithstanding the fact that the first quarter turned out to be one of the most volatile periods we’ve seen driven by continued elevated inflation, a more aggressive response from the Fed than expected and the challenging situation in Ukraine, we delivered excellent first quarter results. The results were driven by positive trends in several key areas. First, we had terrific loan growth during the quarter, which was in part aided by lower pay of activity and higher line utilization. Second, deposit growth continued to be strong. And third, we continued to experience outstanding credit quality, which when combined with strong capital generation allowed us to continue to grow the business and return capital to shareholders. All that said, we’ve been in this business too long to think the credit and or operating environment will always be so benign. We don’t take this for granted and continue to proactively monitor our portfolio and business lines for any sign of stress. Net income for the quarter came in at $22.3 million or $0.58 per diluted share. This was an increase when compared to a previous quarter and year ago period. Profitability and return metrics were solid across the board. ROAA [ph] came in at 135 basis points while ROTCE was 14.4%. Pre-tax pre-provision revenue was at $33.6 million, which puts our pre-tax pre-provision ROAA at a robust 203 basis points, up 74 basis points from the previous quarter and essentially flat on a year-over-year basis. Revenue for the quarter came in at $78.2 million, which was a bit lower linked quarter, but up 8% from the year ago period. Moving on to the balance sheet. The first quarter saw continued growth in both loans and deposits. Loans ex. PPP increased by $339 million or 31% annualized and stood at $4.8 billion as of quarter end. This was the fourth consecutive quarter or very solid loan growth that culminated with loans, again excluding PPP growing by $915 million or 24% on a year-over-year basis. The first quarter for us tends to be seasonally slower. Notwithstanding overall business activity were strong and we saw well balanced growth across all our lending businesses. We originated $325 million in loans for the quarter up from $280 million the prior quarter, and benefited from lower than expected payoffs, strong lease originations and solid customer activity. On this latter point, we continued to benefit from customers increasing their use of their lines. As we saw utilization tick up by one percentage point to 54% from 53% last quarter, which contributed to commercial loan growth. Our government guaranteed lending business had another quarter of strong production with $129 million in closed loans, which as expected was lower than the fourth quarter, but up 16% on a year-over-year basis. Deposit trends continued to be favorable during the quarter. Total deposits grew by $375 million or 30% annualized and stood at $5.5 billion as of quarter end a record level for the company with the growth coming primarily from money market accounts. The mix remained strong with DDAs representing 41% of balances. Deposit costs were flat on a quarter-over-quarter basis and remained at a cycle low of 8 basis points. With respect to profitability, our margin contracted 15 basis points to 3.81% from 3.96% last quarter. This decline was driven primarily by lower loan fees and PPP fees. That said our margin remains strong both in absolute terms and relative to peers. If we exclude accretion and PPP fees, which are both not material for us at this stage are margin declined by five to 6 basis points, and remains in the top decile for banks our size. The combination of an asset sensitive balance sheet and high quality deposit based positions us well over the next several quarters for the expected pricing rate environment. Net interest income came in at $19.4 million up 2% from last quarter and 23% over last year. Of note, this quarter was a nice pickup in our wealth management fee income, which increased by 36% on a year-over-year basis. The balance between revenue and expenses remained well managed with our efficiency ratio coming in at just under 55% for the quarter and improving both against last quarter and the prior year, asset quality results were very strong for the quarter. Credit metrics were solid across the board with NPLs, NPAs and charge-offs continuing to decline quarter-over-quarter in both dollar and percentage terms. Capital remained strong with a CET1 and total capital ratios of just under 11% and 14% respectively. Our financial performance and strong capital base allowed us to continue to return capital to shareholders with the repurchases of approximately 283,000 shares of common stock. And the redemption of our Series B preferred stock on March 31. This being in addition to our quarterly common dividend of $0.09 per share. Given the strength of the balance sheet, we believe we’re well positioned to continue support organic growth and best in the franchise and return capital to shareholders. And with that, I’d like to turn the call over to Lindsay who provide you more detail on our results.

Thanks Alberto. Good morning, everyone. I’ll start with some additional information on our loan and lease portfolio on Slide 4. Our total loans and leases were $4.8 billion at March 31, an increase of $227 million or 20% annualized from the end of the prior quarter. Excluding PPP loans and leases increased by $339.4 million from the prior quarter. We saw payoffs moderate for the quarter down $180 million to $127 million. Our originated portfolio increased by $387 million when PPP loans are excluded for the quarter. Each commercial lending area of the portfolio increased from the prior quarter. While macroeconomic conditions may pose a heightened level of uncertainty, we are reaffirming our loan and lease guidance towards the higher end of our range with projected high single-digit growth for the year assuming normalized payoff activity. Turning to Slide 5. We’ll look at our government guaranteed lending business. At March 31, the on balance sheet SBA 7(a) exposure was $478 million approximately $15 million higher than at the end of the prior quarter with $92 million being guaranteed by the SBA. The USDA on balance sheet exposure with $65 million, flat from the end of the prior quarter of which $26 million is guaranteed. We continue to see improving trends in this portfolio. As a result, we’ve slightly decreased our allowance as a percentage of the unguaranteed loan balance to 7.4% from 7.8% at the end of the prior quarter. Moving over to deposits on Slide 6. We continue to benefit from our strong core deposit trends. Growth continues to be concentrated in commercial transaction deposits that are replacing higher cost of funds. As expected our total cost of deposits remain flat at 8 basis points, with rates expected to rise we would anticipate deposit pricing pressure at some point later this year. Commercial deposits represent about half of our total deposits and 77% of non-interest bearing deposits. Time deposits represent a 11% of total deposits. Our deposit composition continues to be a core strength of our franchise. Moving on to net interest income and margin on Slide 7. Our net interest income was $58.7 million for the quarter, a decrease of 4.8% from the prior quarter. This was primarily due to lower loan fees and lower volume of PPP forgiveness. Net interest income on a year-over-year basis increased 12.3%, as a result of replacing PPP loans with organic loan growth. On a GAAP basis, our net interest margin was 3.81% for the first quarter down 15 basis points from the last quarter, but up 4 basis points from year ago period. Accretion income on acquired loans contributed 10 basis points to the margin for the first quarter up from 9 basis points in the last quarter. PPP interest and net fee income combined contributed $2.7 million to net interest income for the first quarter, compared to $4.5 million from last quarter. Looking forward, our GAAP margin will be impacted by the $1.3 million of remaining net processing fees from PPP, which we expect to be recognized over the remainder of the year. As a result of the rising rate environment, our asset sensitive profile and our organic growth we believe our net interest margin, excluding accretion and PPP will begin to expand during 2022. Moving on to Slide 8, we have intentionally maintained a balance sheet, a balance sheet that is balanced and approach to managing of interest rate risk. We believe our asset sensitive balance sheet positions us well for rising rates. And we estimate that an instant, 100 basis point increase in the interest rates will result in an additional 8.5% increase in net interest income and to break it down further every 25 basis point increase would result in approximately $4 million to $5 million of additional net interest income on an annualized basis. Approximately 65% of our asset sensitivity stems from the short end of the curve. The asset sensitivity is principally driven by our loan portfolio of which 60% of loans excluding PPP are variable rates. Turning to non-interest income on Slide 9. In the first quarter, our non-interest income increased 2.2% from the prior quarter. The increase was primarily attributed to other non-interest income due to higher swap income and a small change in our loan servicing asset revaluation this quarter. We sold a $102.3 million of government guaranteed loans in the first quarter, an increase of 38% from the year ago period. The net average premium continued to be strong at 11.6% during the quarter, which was as expected lower than the fourth quarter. Our pipeline for government guaranteed loans remained strong, and we anticipate premiums decreasing throughout 2022 and returning to pre-pandemic averages. Moving to non-interest expense trends on Slide 10. Our non-interest expense was $44.6 million in the first quarter, a decrease of $14.4 million or 24.4% from $59 million in the prior quarter. The decrease was primarily attributed to two factors. First, we saw a decrease of $12.4 million in asset impairment charges, which were taken during the prior quarter due to branch consolidations and our real estate strategy. And second, we saw a decrease of $3.2 million in loans and leases related expenses, mainly related to the recapture of government guaranteed loan expenses of approximately a $1 million. As a reminder that previously announced branch consolidations have occurred in the second quarter. And the cost associated with that will be realized at the beginning of the second half of 2022. We continue to focus on our expense run rates and look for opportunities to gain efficiencies. We believe the quarterly non-interest expense run rate will trend between $45 million and $47 million. Turning to Slide 11. Asset quality remains strong. We reflect our prudent risk culture, diverse portfolio, and current economic conditions. Our nonperforming assets declined 5 basis points to 33 basis points of total assets. Our nonperforming loans declined nine basis points to 42 basis points of total loans and leases. Net charge-offs decreased 5 basis points from 37 basis points on average loans and leases in the prior quarter. Our provision expense was $5 million for the first quarter, an increase of 37 basis points compared to the prior quarter. The increase in the provision during the quarter was mainly driven by growth in the loan and lease portfolio and changes in qualitative factors due to the macroeconomic environment. We believe we continue to have a high level of total loss observancy, as measured by allowance plus acquisition accounting adjustments, which represented 132 basis points of total loans and leases excluding PPP loans at March 31. We believe our reserve levels reflect current credit conditions, but also take into account uncertainty associated with inflation, rising rates and geopolitical events. As a reminder, we are still accounting for our reserve under the incurred loss model, and we will be adopting CECL at the end of 2022. Turning to slide 12. Our capital liquidity levels remain strong. Of note, the rapid rise and rates resulted in an unrealized loss on an available for sales securities that combined with share repurchases, common and preferred dividends, net of the bank’s earnings resulted in a $0.99 reduction in tangible book value, a 5.6% decline. Our total common equity to tangible assets remains above our peers at 9.36%. And we believe our capital ratios position us well to pursue both organic and strategic opportunities. Through the first three months of the year, we return 50% of our earnings to stockholders through the common stock dividend in our share purchase program. We will seek to continue to opportunistically manage our capital through share repurchases. With that, Alberto back to you.

Thank you, Lindsay. Moving on to Slide 13, as you can see, our strategy remains consistent and we remain laser focused on executing it. While the outlook is complicated by geopolitical uncertainty, high inflation and the corresponding forecast for aggressive tightening by the Fed, we’re well positioned to tackle both the challenges and opportunities this environment creates. Despite the potential macro headwinds, we’re optimistic on the outlook for the rest of the year. Our pipelines remain strong. Our business is well diversified and our bankers are focused on growing new and existing relationships, which should translate into growth in loans and deposits. We also remain optimistic about opportunities for growth in front of us, both organically and through M&A while continuing to create value for shareholders. In closing, I’d like to shout out to our employees who once again, enable our strong performance through their commitment to clients, dedication, and hard work. And with that, Emily let’s open the call up for questions.

Thank you very much. [Operator Instructions] Our first question today comes from the line of Nathan Race from Piper Sandler. Nathan, your line is open.

Yes. Hi everyone. Good morning.

Good morning.

Good morning, Nate.

Maybe just start off just on the deposit growth in the quarter, obviously super impressive to see that conjunction with a really strong loan growth as well. So just curious, kind of digging to the drivers of the deposit growth in the quarter, with just a function of share gains maybe clients holding onto additional excess liquidity with all the uncertainty and supply chain issues out there, perhaps delayed projects or other – or are there other dynamics definitely that we should be thinking about?

Yes, Nate, I think it’s fair to say. It’s probably a combination of all of the points that you just mentioned. So, I mean, share gains, growth in existing relationships, new relationships liquidity in the system. So, I think it’s a fair statement to say is probably a combination of all.

Okay, great. And then just maybe think about the margin outlook going forward ex. PPP, and accretion, I appreciate all the additional disclosures in the deck around the floating rate nature of the book and just the impact the floors as well. So just kind of unpacking the NII sensitivity to rates up a 100 bps, assuming we get at least that over the course of this year, Lindsay’s fair to assume kind of the margin or maybe a 360 level exit accretion in PPP in the quarter is maybe closer to 380 by the fourth quarter of this year?

So Nate, I don’t typically give guidance on exact percentages that the NIMs really an outcome more so than anything else, but we do think it’s going to expand. And so we do – we did give guidance in my prepared remarks around every 25 basis points, reflecting $4 million to $5 million of additional NII. So, I think that should help get you there, but we do think it will expand as I did say. So the next quarter it’ll be a little slower and then it’ll pick up because as you could see in the disclosures on that new slide that we added in the deck, you can see that really, that the bulk of the portfolio does reprice after the 100 basis points there. So, I think that there’s enough there to give you a good sense on a core basis, what it should look like.

Nate, and to add to what Lindsay said, we also obviously the tightening that happened in the first quarter came very late in the quarter. So obviously we didn’t benefit hardly, but we saw any type of hardly a benefit this quarter from rising rates. So, we feel pretty good about where the margin is today, and as you know relative to our peer group our margin is pretty strong and we think we’re well positioned for pricing rates.

Yes. Understood. That’s helpful. And then just maybe turning to the government guaranteed lending segment, volumes were up nicely last year, they’re up year-over-year versus the first quarter of last year. So, I guess how you guys kind of think about the origination capabilities of your team, just given all the market dynamics out there. Obviously you guys are a big seven day lender and, those are floating rate loans. So, I’m not sure if there’s any kind of constraints on origination capabilities and bar demand just given what rates have done and are likely to, do going forward in terms of impacting volumes in 2022?

Yes. That’s a great question, Nate. And we really think that the team’s doing an excellent job. The volume’s been great here to four and you did point out how it increased quarter over last year. And so we really think that the pipeline’s very robust right now, and it looks good. Obviously the interest rate environment will play into the overall outcomes for the year. So we’ll see, but right now, the pipeline’s robust and we feel really good about our team’s ability to execute and continue producing.

Okay. That’s great. I appreciate you guys taking the questions and all the color. Thank you.

Thanks, Nate.

Our next question comes from Ben Gerlinger from Hovde Group. Ben, please go ahead.

Hey, good morning everyone.

Good morning, Ben.

Yes, I’m curious if we could take a minute to hear and talk about loan growth in general. I think when you said you’re going to keep the guidance of kind of high single digits, is there anything in you’re seeing that maybe people tapering expectations a little bit for their own growth from your clients? I’m just trying to think about loan growth in general here like, you achieved basically half of your annual outlook. So, are you seeing something that could potentially slow it down dramatically in the next three quarters? Or is it just conservatism because we live in a pretty volatile world?

Well, I think the first quarter we have very muted payoffs Ben, so I think you got to take that into effects, in terms of our guidance. So again, yes, it was a fantastic quarter and sometimes the ball bounces our way with payoffs being muted for a quarter. So again, assuming normalized payoffs, as I said, in my remarks, we think it’ll be at that high single digit number for the year.

I think Ben also just to also add to that, I think in terms of kind of, we don’t know yet the impact that rising rates. I think it’s our sense is that there’s going to be an adjustment here at, over the course of the year as borrowers, particularly on the real estate side is where we kind of see probably more potential in the short run as borrowers just adjust to higher rates. The environment has been one which has been very conducive to folks getting used to operating with a rate environment that a very extremely low rate. So, I think the market will adjust. We don’t really have a good sense of, we don’t have any view on that. We just, it’s just our expectation. And as Lindsay said, we had a phenomenal quarter in terms of payoff activity. It was lower than what we expected. And also remember we’re benefiting too from customer activity in the form of line utilization. So every percentage point increase in line utilization certainly helps as it pertains to loan growth. We are not yet at the levels of line utilization that we were at prior to COVID. We’re probably five points below that at this point it’s been trending up nicely and that has certainly contributed to the growth that we’ve been seeing here over the last four quarters.

Got it. Okay. Yes, that is helpful. And then my other question had to do more with key expense guidance $45 million to $47 million or so, does that include any outsized hires or, I mean, obviously includes some hires for any sort of normal course of business with the Chicago market, continuing to see a lot of resumes changing hands from past deals and disruptions, does that a better sense of a cushion to allow for additional team members added to Byline?

Yes, that’s a great question, Ben. It does. So it does include some newer hires and some, that are on the horizon. So as you pointed out, it is active out there and lots of resumes being exchanged. So yes, that does give us some room for additional hires.

Okay. Sounds good. Thanks guys.

Thank you.

Our next question comes from Terry McEvoy from Stephens. Terry, please go ahead with your question.

Hi, good morning everyone. First off, I’ll just reiterate what Nate said. Thank you for Page 8 and all the incremental disclosures. Very, very helpful from our side of the table. Maybe my first question Lindsay, I think you just said you expect higher deposit costs later this year, which I think we all on the call would agree with. Maybe you just talk about are the larger banks in your market? Have they moved rates higher? Have you had to adjust rates and I guess, the underlying kind of thesis, but behind your comments was just expectations that rates go higher and at some point the market will change in Byline will need to react.

Yes. Great question, Terry. In terms of the market right now, we’re not really seeing a lot of competition and price adjustments going on at this point in time. My comments are really obviously with the increased rate environment and things that are to come. I think that you’ll see loan to deposit ratios really play into that and what ultimately happens. And I think, the higher, the loan to deposit ratio, the faster the deposits will start moving up. But right now we’re definitely seeing that lag and we anticipate seeing the lag here for the near future as we head into the remainder of 2022, that’s where we think we’re going to see some pressure.

Okay. And then back on the lending side, I’m just wondering, how do you – how was any, was any of the increase in C&I line utilization, call it a temporary building of inventory levels given the world that we live in, or do you think your clients were making, serious investments in their business? I’m just trying to get a sense of the sustainability of the commercial loan growth we just saw last quarter.

I think it’s a combination of both Terry, I think certainly the environment you have cost of raw materials going up I mean even, with inflation and a lot of our customers being able to pass on to customers in the form of higher prices, ultimately finish goods that translates into ultimately higher receivables, right, for the same number of units. So there’s no question that higher inflation plays part in the sense that inventories are rising as a result of that, receivables rise as a result of that. But also to the second point that you bring up, it’s also driven by customer activities. So, I think it’s a combination of both.

Thanks. And then maybe just one last question. Could you just talk about the returns today between M&A and team lift outs? I’m just trying to interpret that second to last bullet on Slide 13 just based on M&A pricing expectations, as well as just the cost to bring on new teams.

Team lift outs are, our view as team lift outs are always and I think in the past and I think this is a question that was asked just now is anytime that we have an opportunity to really attract talented bankers to the organization, we are going to take advantage of it. It’s just, and we think we have a great platform. We think we have a great home for talented bankers to serve clients. And so I think the answer to that theory is that’s something that we would pursue always not necessarily in lieu of one versus the other. So we always want to drive organic growth and team lift out is something, that we’ve been able to prove in the past that, that has translated well for us and for our shareholders.

Great. Thank you both.

Thank you, Terry.

Our next question is from Damon DelMonte with KBW. Damon, go ahead.

Hey, good morning everyone. Thanks for taking my question. Congrats on a great quarter by the way. Just wanted to get your thoughts on the outlook on credit and kind of how we should be thinking about provision going forward and kind of expectations for net charge-offs. So Lindsay hoping you could provide a little color on that.

Sure. Damon and in terms of the outlook, we remain vigilant. So, we really saw great credit quality this quarter. And as you can see by our numbers charge-offs went down drastically here during the quarter. So right now the credit environment is great. As we said, in our prepared remarks, we don’t think that this is something that will stay forever. And so we remain vigilant and we’re looking out into the future. Alberto pointed out in his remarks, Damon, that we continue to look at the portfolio for any signs of stress. And that’s something that we’re looking at and on top of, but I do think that the provisioning going forward, Damon’s going to be a function of loan growth here in the near term. So as we continue to grow, we need to provide for that. And then we’ll keep an eye on asset quality in any signs of weakness and make sure that we’re well covered there. So, I do think that, we’ll continue to provision here as we go forward and grow. And then in terms of charge-offs, I do think you can look back historically at some point they are going to go back to those historical averages. And so we’re, obviously didn’t see a whole lot this quarter and the credit outlook right now is great, but we don’t anticipate that lasting forever.

Got it. Great. That’s great color. Thank and then just a, kind of a technical question here. What’s your projected effective tax rate going forward?

Great question. It was down this quarter, so we do think it’ll go back up to the 25% to 27% range as we’ve guided historically.

Perfect. Okay, great. Every else has been asked and answered, so thanks a lot. Appreciate it.

Great. Thank you.

[Operator Instructions] Our next question comes from Brian Martin from Janney. Brian, your line is open.

Hi, good more morning guys.

Good morning, Brian.

Yes, just maybe one, one follow up on the loan outlook. And maybe just, it sounds like, obviously the great quarter on the loan growth side and just, it sounds like the pipelines are still really strong even though, all the production this quarter. Can you just give any, a little bit more granularity on where your, where the optimism in that – in the pipeline today is, what do you expect the growth over the next couple quarters here based on what the pipeline showing today. I understand the comment Lindsay about the payoffs potentially coming, but just sounds like there’s still, a lot to be optimistic about on the loan growth front.

Yes, I think Brian, I think that the pipelines on the whole are good. Very good. In terms of, what areas, I mean, maybe just to give you some color and commercial remains strong. I think our SBA pipeline government guaranteed pipeline remains very strong. Our leasing business has shown this quarter, grew very nicely. The pipeline there remains very strong, real estate has a good pipeline in relative terms. Probably real estate is one that’s, I think the market as a whole is going through an adjustment, you’re seeing projects have to grapple with not only higher interest rates, but also much higher material costs for projects. And I think sponsors are adjusting to that. And I think ultimately I think the market will adjust, but that’s probably where I would, in relative terms expect some weakness relative to the other. So hopefully that gives you some color.

Yes, no that’s helpful. I appreciate Alberto. And maybe just one just on the comments about the sensitivity Lindsay, just the deposit betas you guys are thinking about. Can you give any sense for how your certainly it sounds like for the near term, it’s not much factor at all, but just as you get a little further down the road, how you’re thinking about the deposit betas and that kind of the guidance you gave as far as the impact of the rate increases?

Yes. Brian, in terms of betas currently they’re lagging in near term, I think they’ll still lag. Historically we were kind of between 30% to 35% call depending on what you’re looking at any timeframe, but we look back over the history and we think that it’ll be a little slower this time, just given the liquidity that’s out there. But I did provide in my remarks to an earlier question that I do think it’s a functional loan to deposit ratios and as we see those creep up, then I think it could speed up. So it’s all those factors at play right now Brian, so we’ll see what happens, but we do think it’ll be a little slower.

Got it. Okay. And given the deposit flows and how strong they’ve been, I guess with rates going up, I mean, is your expectation that the balance sheet still grows from here? Or is that a do you expect some slowing on the deposit side perspectively?

Now, I mean, we’re always looking to grow deposits. We had a great quarter and showed great growth. And so now the goal is to continue growing deposits and self-funding whenever possible.

Right. I just didn’t know if you’re expecting much in the way brought up. Maybe mute some of that growth, your organic growth you typically get.

Yes, I mean, you’re always going to have some ebbs and flows, especially with some larger commercial customers, but nothing that I foresee that’ll swing it one way or another.

Yes. Okay. I appreciate it. And just one last one, just some, I think earlier, call on a question on the M&A has, would you say that the M&A environment has slowed it all from a dialogue standpoint? I understand, the comments in there in your, certainly your model going forward, but just the dialogue itself. Has it, have you seen this slow down?

Dialogue I think is very good Brian, I think it’s – a lot has changed in the quarter from where we were early January to all of the things that have transpired. Again, we seem to say this at least once a year, where we have expectations and then sure enough, things change materially, but I think dialogue is good. It’s just, I think the market in general and M&A is not any different. It’s just adjusting to all of the things that are impacting in the case of M&A impacting stock prices for financials and just the environment as a whole in terms of the outlook for the business.

Yes. Okay. Perfect. Well, thank you for taking the questions and nice quarter guys.

Thank you, Brian.

Those are all the questions we have for today. So, I’ll now turn the call back to Alberto to conclude.

Thank you, Emily. So that concludes our call for this morning on behalf of all of us here. Thank you for your time today, your interest in Byline and we look forward again to speaking to you next quarter. Thank you.

Thank you everyone for joining us today. This concludes our call. You may now disconnect your lines.