Civista Bancshares, Inc. (CIVB) Q4 2021 Earnings Report, Transcript and Summary

Good day, and welcome to Civista Bancshares Incorporated 2021 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I'd now like to turn the call over to Dennis Shaffer, CEO and President. Please go ahead.

Good afternoon. This is Dennis Shaffer, CEO and President of Civista Bancshares, and I would like to thank you for joining us for our fourth quarter and full year 2021 earnings call. I’m joined today remotely by Rich Dutton, Senior Vice President of the company and Chief Operating Officer of the bank; Chuck Parcher, Senior Vice President of the company and Chief Lending Officer of the bank; and other members of our executive team. Before we begin, I would like to remind you that this conference call contains forward-looking statements with respect to the future performance and financial condition of Civista Bancshares, Inc. that involves risks and uncertainties. Various factors could cause actual results to be materially different from any future results expressed or implied by such forward-looking statements. These factors are discussed in the company’s SEC filings, which are available on the company’s website. The company disclaims any obligation to update any forward-looking statements made during the call. Additionally, management may refer to non-GAAP measures, which are intended to supplement, but not substitute the most directly comparable GAAP measures. The press release available on the website contains the financial and other quantitative information to be discussed today, as well as the reconciliation of the GAAP and non-GAAP measures. We will record this call and make it available on Civista Bancshares’ website at www.civb.com. Again, welcome to Civista Bancshares fourth quarter and full year 2021 earnings call. I would like to begin by discussing our results, which were issued this morning. At the conclusion of my remarks, we will take any questions you may have. Let me start by noting several significant accomplishments and transactions that occurred during the fourth quarter. This morning, we reported earnings for the fourth quarter 2021 of nearly $11 million or $0.73 per diluted share, which represents an 8% increase over the prior year's fourth quarter. Net income totaled $40.5 million or $2.63 per diluted share for the full year ending December 31st, 2021, which is an increase of $8.4 million or 26% compared to 2020. Our pretax pre-provision earnings for 2021 were $48.4 million compared to $47.2 million compared to $47.2 million for 2020 and represented the highest pretax pre-provision earnings our company has ever achieved. Our return on average assets was 1.47% for the quarter and 1.34% for the year, while our return on average equity was 12.49% for the quarter and 11.61% for the year. During the final quarter of 2021, our net loans exclusive of PPP grew by $33.1 million or at an annualized growth rate of 6.9%. This gave us $114.5 million in net loan growth, exclusive of PPP for the year and an annual growth rate of 6.2%. In November, we announced the completion of a private placement of $75 million of 3.25% subordinated notes due in 2031 with the proceeds being used for general corporate purposes. We did push a portion of the proceeds down to the bank, and we anticipate using some of these proceeds to fund the cash portion of our recently announced transaction with Comunibanc Corp. We were pleased to announce the recent signing of the definitive agreement to purchase Comunibanc Corp and its subsidiary, the Henry County Bank. We view this as a low-risk transaction with a significant upside that will open the door to business in Northwest Ohio and the Toledo MSA. And we look forward to welcoming our new employees and customers into the Civista family. We continued to be active in repurchasing common shares. During the fourth quarter, we repurchased 73,541 shares at an average price of $23.83 per share. During the year we repurchased 983,400 shares or approximately 6.2% of the outstanding shares at December 31st, 2020 at an average price of $22.59 per share. We view share repurchases as an integral part of our capital management strategy. As of December 31st, we have $9.3 million available from our repurchase authorization, which was approved by our Board of Directors last August. While we ceased repurchases since announcing the transaction with Comunibanc Corp, we expect to resume our repurchase program now that we have announced earnings. Now, let's turn our attention to our performance for the quarter and for the year. As I stated, we were extremely pleased with our loan growth for the quarter and the year. Excluding the impact of PPP loans, our loan portfolio grew by an annualized rate of 6.9% for the quarter in 6.2% for the year, despite having $93.8 million in loan payoffs during the quarter and $236.3 million in loan payoffs during the year. At year-end 43.2 million in PPP loans remained. All first round loans have been processed and all, but seven of those loans totaling $622,900 were forgiven. Additionally, 67% of our second round loans have been forgiven. We have $1.8 million in PPP fees remaining at year-end, and we anticipate the forgiveness process to be essentially treated by the end of the second quarter. Net interest income for the quarter declined by $1.1 million or 4.5% compared to our linked quarter and was consistent with the prior year. Our margin for the quarter contracted 20 basis points from our linked quarter, primarily on less PPP fee accretion. Net interest income for the year increased $5.7 million or 6.4% compared to our prior year. The margin for the year contracted 23 basis points to 3.47% compared to the prior year. As we have shared on previous calls, the increased liquidity we experience as a result of the federal government stimulus program and our tax processing program, both continue to have a negative impact on our year-to-date margin. Our non-interest income remains strong, increasing $385,000 over the linked quarter. While the quarter included $187,400 gain from life insurance proceeds related to a policy acquired through one of our acquisitions, increases in service charges and increases in wealth management fees more than compensated for a decline in our gains on the sale of mortgage loans. We can to be pleased with the strength and diversity of our non-interest income streams. Similarly, if we back out the impact of the $1.8 million gain on the sale of our VISA B stock that occurred in the second quarter, our non-interest income still increased $1.5 million or 5.3% year-over-year, as we experience increases in all nine interest income categories, except for anticipated declines in our gain on sale of mortgage loans and swap fees. Fourth quarter gains on the sale of mortgage loans, totaled $1.5 million or 9% less than the linked quarter and $1.6 million or 52.1% less than the fourth quarter of the previous year. Although, production has slowed, mortgage banking was our largest driver of non-interest income during the year. The year-to-date gain a on the sale of mortgage loans was $8 million compared to $8.6 million the previous year. During the quarter we sold $54.8 million in residential mortgage loans and an average premium of 268 basis points compared to $56.9 million in the linked order and $91.8 million in the prior year. Year-to-date, we sold $260.3 million in mortgages compared to $304 million in the previous year as we head into 2022, our mortgage pipelines remained solid. Service charges continued to be a strong contributor to income, increasing $294,000 compared to the linked quarter and $617,000 over 2020. Interchange revenue remained consistent with our linked quarter and increased $866,000 or 21.8% compared to the prior year, as consumers seem to be maintaining their cashless buying habits that began during the economic shutdown. Our Wealth Management group continues its strong contribution to non-interest income. While Wealth Management fees were consistent with the linked quarter, they increased $876,000 or 22% when compared to the prior year. We continue to bring in new accounts and benefited from strong financial markets, ending the year with $683 million in assets under management on our trust and brokerage platforms combined. As we discussed during our call last quarter, the year-over-year reduction in swap fees is the result of our decision earlier this year to book select five-and-seven-year fixed rate commercial loans on our balance sheet. Non-interest expense declined $2.3 million or 11.7% in comparison to the linked quarter. Our compensation expense was down $1.3 million on lower commissions as mortgage production declined. After adjusting for the $3.8 million federal home loan bank prepayment penalty we incurred during the second quarter, non-interest expense would've increased $4.1 million or 5.8% year-over-year. The increase is primarily attributable to a $2.2 million or 5.2% increase in compensation expense and a $922,000 increase in software maintenance, which was primarily the result of the digital banking platform we implemented earlier this year. Our efficiency ratio for the year was very respectable 59% after adjusting for the prepayment penalty compared to 59.1% for the prior year. Turning our focus to the balance sheet. Year-to-date, our total loans declined by $59.6 million. However, excluding the impact of PPP loans, our loan portfolio increased $33.1 million during fourth quarter and $114.5 million for the year. That equates to an annualized growth rate of 6.9% and 6.2%, respectfully. We are pleased with our loan production, which occurred in every market across our footprint. Our loan pipelines remain solid, and we have $108.7 million in approved undrawn construction loans at December 31st. While we continue to battle loan payoffs on completed projects, reduced outstandings on operating lines of credit and increase liquidity of our customers, we continue to expect that we will grow our loan portfolio at a similar pace in 2022. On the funding side, we experienced growth in every category except time deposits. Total deposits increased $227.3 million or 10.4% since the beginning of the year. Non-interest bearing demand accounts, which made up 32.6% of our total deposits at December 31st, grew by $68.1 million compared to December 31st, 2020. $36.3 million of this growth came from the non-interest bearing business accounts and $23.6 million from public entities. We also experienced $127.4 million increase in our interest bearing demand accounts driven by a $60.1 million increase in consumer savings and $28.2 million in consumer MMDAs. While we were talking about deposits, I would like to note that we successfully implemented online account opening through our digital banking service in December. This was the next in a series of initiatives we set out to accomplish when we introduced our new digital banking platform earlier this year. These initiatives are focused on improving efficiency and ultimately to provide a better customer experience for our retail and business customers. During the pandemic, we automatically downgraded commercial loans that requested concessions beyond the initial 90-day modification period, our total criticized loan portfolio, which includes all classified and substandard loans declined from $148.1 million at December 31st, 2020 to $78 million at December 31st, 2021. The segment with the largest number of criticized loans remains hotels and lodging, totaling $49.2 million at the end of the year. Many of these operators have experienced increased occupancy from leisure travel during 2021. Despite the lingering effects of COVID on travel, we anticipate increased demand going forward, resulting in further reduction in our criticized portfolio. While uncertainties continue to be associated with the economy, there is improvement throughout our footprint in our customer's financial positions. In addition, we realize $782,000 in net recoveries during 2021. As a result, it was not necessary to record a provision during the quarter. The ratio of our allowance for loan losses to loans increased to 1.33% at year-end 2021 from 1.22% at year-end 2020. Exclusive of the PPP loans, the 2021 ratio would've been 1.36%. Our allowance for loan losses to non-performing loans also increased to 496.1% at the end of the year from 343.05% at the end of 2020. As a reminder, we did meet the guidelines for the delayed implementation of CECIL and will not be required to adopt it until 2023. We ended the corner with tangible common equity ratio of 9.33% compared to 9.98% at December 31st, 2020. We successfully completed the private placement of $75 million in 3.25% subordinated notes that will be due in November, 2031. We pushed $50 million of the proceeds down to the bank, which lowered our CER to risk based capital ratio to 291.5% at December 31st, 2021. In addition to raising sub debt, we continue to create capital through earnings. Our overall goal is to have adequate capital to support our organic growth and potential acquisitions. Two important parts of our capital management strategy continue to be dividend payments and share repurchases. We continue to believe our stock is a value and remained active in repurchasing our shares until just prior to announcing the transaction with Comunibanc Corps. Now that we have announced earnings, we will be free to resume our repurchase program. During the quarter we repurchased 73,541 shares of our stock at an average price of $23.83 per share. Year-to-date, we repurchased 983,400 shares at an average price of $22.59 per share. This represented the repurchase of 6.2% of the shares that were outstanding at December 31st, 2020. We have approximately $9.3 million remaining to be off repurchased under the current repurchase program. We have shared our desire to grow through acquisition on past calls, and we were pleased to announce the defendant agreement with Comunibanc Corp., the parent company of Henry County Bank headquartered in Napoleon, Ohio. At September 30th, Comunibanc Bank had total assets of $329 million with total loans of $165 million and $276 million in low cost deposits. The transactional add seven branches in Henry and Wood Counties in Northwest Ohio. The acquisition significantly accelerates our presence in Northwest, Ohio and will put us well on our way to have a significant in presence in each of Ohio's time top five MSAs. Their strong core customer base fits well with our relationship banking philosophy and their nearly 60% loan to deposit ratio will provide liquidity to accelerate our loan growth throughout Northwest Ohio and the greater Toledo area. We anticipate closing the transaction during the second quarter and converting their core banking systems during the fourth quarter. In summary, we are pleased with another quarter and year-end of solid earnings, continued loan growth and solid credit quality. While the economy improved during 2021 labor shortages, supply chain issues, and inflationary pressures are affecting many of our customers. Despite these challenges, we remain optimistic. Our loan pipelines are solid, and we are looking forward to the successful integration of the Henry County Bank into the Civista family. Thank you for your attention this afternoon and now we'll be happy to address any questions that you may have.

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Terry McEvoy from Stephens. Please go ahead.

Hi. Good afternoon guys.

Hi, Terry.

There was the step down in operating expenses in the fourth quarter, which I think you addressed in the press release. Anything beyond what was said there. And then maybe looking ahead, could you help us maybe understand what your thoughts are about expense growth, given inflation and all the things we're hearing on that topic? Thank you.

I'll ask Rich Dutton to elaborate. Rich, do you want to elaborate on that?

Yeah. And Terry, I think like we talked about in the earnings release, primary reduction in non-interest expense was a compensation expense related to commissions on mortgage banking. I think there was also an accrual adjustment related to health insurance that reduced our health insurance expense in the fourth quarter. So, now we're starting a new year in the first quarter. So we're going to ramp up the accrual again for health insurance. You'll recall, we don't give merit increases for what I want to say on Saturday until April 1st. So when we look at Q1 non-interest expense, probably a $19.6 million number is a good number. And then post that, it’s probably a $20.7 million or $20.8 million non-interest expense number is what we've modeled for the rest of the year. I don't know in terms of inflation. Again, I think we kind of modeled in what we think going to happen for merit increases and whatnot. But I suppose the farther we get into the year, the less confident I am in those numbers of that.

Great. Thank you, Rich. And then as a follow-up, there's a lot of buzz on the new Intel factory outside of Columbus. Maybe just remind me what's your kind of current footprint in and around Columbus. And do you think you can capitalize on what that factory could do to the economy down there?

Sure. I think, our footprint -- in fact, we had right before that announcement actually bought a branch from a credit union. That's about a mile and a half from the site that they'll be developing. It's 3,200 acres that they're developing, and bringing 3000 initial jobs, pretty well paying jobs, the average -- salary is going to be somewhere around $138,000. But there's 7,000 construction jobs. There's talk that they may build additional plant and it could be close to 10,000 employees that they'll be bringing. I think the opportunity's going to be great. Our boutique banking model fits in very well. We have a presence in Dublin, Ohio. We also have a presence right outside of Dublin, Ohio, in Plain City, and will have this branch there. But I think it'll also benefit the entire state, Terry. I think, there are 150 Intel suppliers in the state of Ohio. And there's talk that some of those suppliers are already seeing increased sales and that's really throughout our footprint, because our footprint covers most of Ohio. So, we think that there's going to be tremendous opportunity to capitalize on that investment into central Ohio for the -- and that I think we'll capitalize for the whole state.

Good stuff. Thanks. Thanks Dennis.

Okay. Thanks, Terry.

The next question comes from Bryce Rowe from Hovde Group. Please go ahead.

Thanks. Maybe just a quick cleanup question there from Terry's questioning. Rich, the $20.7 million, $20.8 million kind of guide, so to speak for the second quarter. Does that include the -- is that a standalone basis or does that also include what you're kind of expecting with Henry County?

That's standalone. Yeah. We've not modeled any Henry County stuff I guess in that number yet. That's a good cleanup question.

All right. Good. All right. That's helpful. And then, maybe you guys could speak to, how you're thinking about the rate picture. Maybe just some background around your asset sensitivity at this point. And then what kind of deposit betas you're baking into the asset sensitivity analysis that you project in your Qs in case.

Rich, I'll have you go ahead. And if you want to answer that.

I'll answer it in reverse order. And that probably means I'll forget the first question you asked. But I guess we've modeled two rate increases, again, back in loaded in 2022, 25 basis points each, which I think is party standard with what I've heard everybody else doing. Again, we're very asset sensitive, like you pointed out. So, rate increases help us. The deposit that we're using it blended. So all non-maturing accounts. The beta is 12 basis points, and that's held pretty steady, gosh, for the last two cycles. Anyway. I mean, it's not changed much. You call we're already 3% of our deposits, our deposits are non-bearing at all. So that's not even in that number. And I'm not sure what other questions you asked? I answered two or three. What I miss?

No. You nailed them. I appreciate it. I think I just stepped back.

Hey, Bryce, I would add. A third of our deposits repriced every 30 days. So -- and then another 6% reprises within one year. So 39% of our portfolio will reprise within a year, but a third of it basically reprises every 30 days.

And Dennis, you meant to say loans, right?

Deposits. I think you meant.

Yeah. He meant to say loans.

Loans. Yes. Loans.

Right. Okay. All right. I'll step back out and let somebody else take it away.

The next question comes from Tim Switzer from KBW. Please go ahead.

Hi. Thanks for taking my question. I'm on Mike Perito. You guys mentioned in your press. Hey, good morning, or good afternoon. You guys mentioned in the press release, you had about $100 million of excess liquidity. You wanted to redeploy into the investment portfolio. I was curious how much of that you already did in Q4, and that was kind of in run rate and then what you expect for Q1 and then I guess how much excess liquidity you'll still have after that, if any once factoring in the bank deal.

Rich, you want answer that?

Yeah. And forgive me, was it Tim? Is that right?

Yeah, Tim.

Yeah, Tim. So, I think what we had done at the end of the year was about -- I think we had another $20 million of that $100 million to redeploy yet. And I'm not sure we're at in that process even as of today. At the end of the year, we still had a fair number of -- the munies that are looking for, we hadn't purchased those yet. What was the rest of your question? Forgive me.

Okay. Well, if you've already purchased, I guess $80 million of that, you only have $20 million left. Looking at your end to period balance sheet, you still have quite a bit of excess cash. So, I'm curious on what your strategy will be with that -- with the rate purchase or the rate increases coming, what is the pace of purchases you want to maintain on the securities portfolio?

I think, we'll catch our breath. As you pointed out, we redeploy all that liquidity and we ended up, I think, with more cash at the end of the year than we did at the beginning of the fourth quarter. And also, I guess, I'd point out that we're coming into our tax season. And so sometime, probably mid to late February, we'll again start to process income tax refunds and we'll generate on average, I think about $300 million in extra cash that'll be on balance sheet for the first half of the year. So that's another kind of pressure on the margin. It doesn't impact our net interest income, but it does kind of play a little havoc with our margin. To answer your question, if we'll get more aggressive and redeployment of liquid assets, I think we'll probably kind of sit and wait, we were pretty aggressive early last year. I think we benefited from moving maybe sooner than some of our other bank brothers did. But again, you kind of like where we're at. We'd love to make more loans and it looks like maybe we're going to start making some loans, more loans this year than we did last year. I'll let Chuck talk to that, but that's where we would rather deploy it as opposed to the securities.

Okay. Thank you. And along with the excess capital that you guys have right now, even with the Comunibanc deal once that closes, you still have pretty solid capital ratio. Do you have a target TCE ratio or anything like that? That would kind of help us give a -- put some parameters around what kind of share buyback we could see for 2022.

Yeah. We always kind of target somewhere that 9% to 9.25% range we think -- we're creating excess capital. So we think that we'll continue -- the repurchase program is a great way to deploy some of that excess capital, but I would say that's where we -- that nine and a quarter TCE ratio is probably a good target.

All right. Awesome. Thank you guys.

[Operator Instructions] Our next question comes from Russell Gunther from D.A. Davidson. Please go ahead.

Hey, good afternoon guys.

Hey, Russell.

Hello, Russell.

Hey, guys. I want to follow-up on the margin discussion if I could. Maybe get a sense for where you expect the margin to trend near term, given some of the balance sheet dynamics just discussed. And then if you could help sign up for us, how you're thinking about what each 25 basis point move can fed funds means to you guys.

Rich, you want tackle that one as well?

I got to get drink water. I'm answering too many questions. So, Russell, the way we modeled it was, I think for each 25 basis point increase in fed funds, we think that's probably seven basis points of expansion in our margin. And help me remember, what was the first part of your question.

No, that's really good. I was just -- prior to the fed beginning to raise whatever that maybe, how you would expect your margin to trend given the step down this quarter, but also some of the dynamics we discussed around access liquidity deployment, the seasonality around the tax business.

And the tax business certainly put some downward pressure on it. And I guess the counter to that is, we've only got about $1.5 million PPP fees left to accrete that will have at least for this year kind bolstered the margin. So, I suppose maybe it floats along a few basis points up or down from there, but I think again, like everybody else, we're waiting very asset sensitive, waiting for the fed to make whatever moves they're going to make. And again, those will be helpful to us.

Understood. No, that's very helpful guys. And then just my last question would go back to the loan growth discussion, you guys put out order of magnitude similar to what you were able to do this year on a core basis and would just be helpful to get a sense in terms of what you think the drivers of that'll be from a mix, asset class perspective, as well as the growth this year, you called out as being very broad based geographically. Just wonder if that would sustain well or any pockets of strength there.

I'll ask Chuck Parcher to answer that question, Russell.

Yeah. Russell, we feel like that projection of the mid to high single digits looking forward to is pretty good, kind of one of the secrets behind the sauce of this year, I guess, was, we grew $117 million, but at the bank, we track payoff -- loan payoffs over $75,000 for the year. And in 2021, we had $236 million of payoffs in that category. The give you an idea where that stands as compared to the three previous years averaged $119 million payoffs. So, felt like we had a really successful year against those headwinds of all those payoffs. Now we are doing -- as we get bigger, we are doing bigger deals and doing a lot of development deals, but we feel like that one of the things that's going to help is some of that payoff number will fall back we believe here in 2022. And for -- I guess, a little bit more clarification, those payoffs are not bad payoffs. They're just the -- they're the result of very successful projects being completed and moving on to the perm market. You had a secondary question. I can't remember what it was though, Russell.

No. That's a great guidepost. I guess the other follow-up would be, the mix of the -- the kind of mid to high single digits. And if you think that's going to be a similar composition to what you got done this year? And whether there are any …

I would tell you it is probably going to be somewhat similar, but obviously we're heavily a commercial real estate bank, but I do believe we've hired some more C&I people with some C&I focus. And I do think that we've got to focus on trying to move that C&I portion of the book larger obviously. And with the investment that Dennis has alluded to in his speech, the Q2 investment, it was really ramped up our treasury capabilities for commercial customers. And once now that we've got that ramped up, we really feel like we've got all the products and services necessary to bring those middle market companies on board.

That's great. Well, that's it for me guys. Thanks for taking my questions.

I would just add, as we grow the bank, we constantly look at our lending limits and things and growth does help us make larger loans and stuff. So that'll help us deploy some of the excess liquidity on the balance sheet as well.

Our next question comes from Daniel Cardenas from Boenning & Scattergood. Please go ahead.

Hi. Good afternoon guys.

Good afternoon.

Good afternoon.

Just a couple of housekeeping questions here. How should we be thinking about your tax rate on a go-forward basis? A little bit lower than what I was looking for the quarter, but can give us maybe a little bit of directional guidance as to how we should be looking at it?

I am sorry. I jumped again, yeah. We've been bouncing around at about 15%, I think, an effective rate and that -- I don't see anything that's changed in the tax preference items that we have or the make the balance sheet that's going to change that at least over the next number of quarters, Daniel. So, I think that's a good -- would be a good number, kind of what we've done is what I would use going forward.

Okay. Great. And then on the fee income side, absent contributions from the tax business, what's kind of $6.8 million that we saw this quarter, is that kind of a good run rate to build off of?

Am I answering that one, Dennis, or you?

Yeah. Go ahead, Rich.

I would say yes. And again, I think we've kind of modeling all before Chuck, maybe a little slow down in mortgage fee income, but I think we also like Dennis said, I think during his comments, or maybe Chuck said it earlier, we anticipate a little pickup in the loan swap fee income to kind of offset that. And certainly that the momentum that our treasury management folks have gained over the past year, I won't see that slowing down. So, that ought to be, again, another kind of bright spot for, and as long as the markets hold, wealth management was a strong, generator of fee income force. Again like, I like Dennis said during his comments, I we're kind of hitting on all cylinders. And I would guess again, ex the tax business, that'll be very similar to what we saw last year, we feel pretty good. I would think that the fourth quarter would be a decent proxy for the first quarter in terms of non-interest income with the addition of the tax money too.

And the tax money comes in what months, Rich? Would comes some in the first quarter, some in the second?

Exactly. I would model the exact same cash flows that we had last year -- this year, and I'll bet you'll be pretty accurate.

Good. Thank you. And then, just quickly, what was your CRE to total risk based capital ratio at the end of the year?

It was 291.5%. We pushed down about $50 million of that $75 million we raised to the bank and then we had a little bit of growth and ended up at the 291% and 291.5%.

Any acquisition is supposed to hopefully bring that number down a little bit.

The Comunibanc acquisition will just slightly move that. We'll bring it down a whole lot, but it will go down maybe -- without any growth would go down some. Just looking at the number today and if we added them, might go down just slightly, but not significantly.

All right. I'll step back for right now. Thank you.

Right. This concludes our question-and-answer session. I would like to turn the conference back over to Dennis Shaffer for any closing remarks.

Well, in closing, I just want to thank everyone for listening and thank those that participated on the call. Again, while we are pleased with the results of our fourth quarter and the year, we think that 2022 will be full of new challenges for us. So, we look forward to meeting those challenges and look forward to talking to you all again in a few months to share our first quarter results. So, thank you for your time today.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.