Ladies and gentlemen, thank you for standing by. Welcome to the Heritage Financial Earnings Conference Call. [Operator Instructions] As a reminder, the conference is being recorded. I'd now like to turn our conference over to our host, CEO, Jeff Deuel. Please go ahead.

Thank you, William. Welcome, and good morning to everyone who called in or those who may listen later. This is Jeff Deuel, CEO of Heritage. Attending with me are Don Hinson, Chief Financial Officer; Bryan McDonald, Chief Operating Officer; and Tony Chalfant, Chief Credit Officer. Our earnings release went out this morning premarket. And hopefully, you've had an opportunity to review it prior to the call. We have also posted an updated second quarter investor presentation on the Investor Relations portion of our website, which can be found at heritagebanknw.com. We will reference the presentation during the call. I'd like to point out that we have a new format for the investor presentation that includes more granular detail on a variety of topics. I hope you find it useful, and we welcome feedback on it. Please refer to the forward-looking statements in the press release. We're very pleased with our financial performance for the second quarter. We continued our focus on carefully managing expenses with good success, including lower noninterest expense and improving expense ratios. Additionally, our long-standing focus on credit quality and managing loan concentrations continues to play out well for us as the pandemic recedes, and that discipline has enabled us to report more favorable credit trends and recapture some of our reserve build from last year. The combination of these factors has allowed us to report EPS of $0.90 for Q2 as well as an ROA of 1.85%. While overall loan volume was soft in the second quarter, our team is fully focused on developing new business opportunities. And we continue to bring in new customers, including many prospects we helped with PPP round 1. With the recent elimination of COVID restrictions in our region, our teams have been focused on more traditional outreach to customers and prospects. We are already seeing the results in a rapidly expanding number of opportunities for deposits and loans, which positions us well for the balance of the year and into 2022. I also want to add that we would continue to focus on completing important technology initiatives during the past year, which we have highlighted on Page 6 of the investor deck. Our CL 360 initiative provides us with a fully automated commercial underwriting platform, and Heritage 360 provides us with a fully automated customer relationship management platform, all of which will be fully functional as we roll into 2022. These undertakings, together with future enhancements, will enable us to be more efficient, will enhance capacity on the team and allow us to provide a more seamless customer experience. It's very exciting for our team to have the initiatives fully deployed across the bank now. We'll move on to Don Hinson, who will take a few minutes to cover our financial results.

Thank you, Jeff. As Jeff mentioned, overall profitability was very positive in Q2. I will be reviewing some of the main drivers of our performance. As I walk through our financial results, unless otherwise noted, all of the prior period comparisons will be with the first quarter of 2021. Starting with net interest income, there was an increase of $2 million due mostly to an increase in income from PPP loans and the recovery of interest from payoffs of nonaccrual loans. Another factor affecting this line item was the increase of $121 million in average investment balances. The net interest margin decreased due mostly to lower core loan yields and a higher percentage of excess liquidity. Over -- interest-earning deposits increased to 15.2% of average earning assets compared to 11.8% in the prior quarter. This increase in the percentage of overnight cash was offset by a similar decrease in the percentage of loans through average earning assets. Trends in the composition of average earning assets is shown on Page 26 of the investor presentation. Removing the impacts of discount accretion and PPP loans, the yield on loans increased 9 basis points. This increase was due mostly to an 18 basis point positive impact from the payoff of nonaccrual loans during Q2 compared to a 5 basis point impact in Q1. Bryan will discuss loan production and balances, including PPP lending, in a few minutes. We continue to work down the cost of our deposits with interest-bearing deposits decreasing 3 basis points. Our cost of total deposits decreased to 10 basis points in Q2, down 2 basis points from Q1 levels. More information regarding deposit growth and cost deposits can be found on Page 24 of the investor presentation. All of our regulatory capital ratios remain strongly above well-capitalized threshold, and…

Thank you, Don. In the second quarter, we continue to see improving credit quality across our loan portfolio. The ending of many COVID-related restrictions in both Washington and Oregon has allowed many of our borrowers to move back towards a more normalized level of operations. For the second quarter, nonaccrual loans declined by $17.5 million or 33% from the prior quarter end. As of June 30, nonaccrual loans totaled $35.3 million or 0.84% of total loans. $10.7 million of the decline was the result of the full payoff of an agricultural lending relationship that was originally placed on nonaccrual status in the third quarter of 2019. The remainder of the decrease was due to various paydowns and payoffs of multiple loans that have been subject to long-term workout strategies and were not pandemic related. The addition of new loans to nonaccrual status in the second quarter was $401,000, which is consistent with the low level that we experienced in the first quarter of 2021. Other than nonaccrual loans, the bank has no other nonperforming assets. Criticized loans, those risk-rated, special mention and substandard declined by 12.5% or approximately $34 million from the total at the end of the first quarter and 19% from December 31, 2020. While improving, criticized loans remain elevated when compared to pre-pandemic levels. At $235.7 million, criticized loans are approximately $93 million higher than December 31, 2019, which we consider to be representative of our pre-pandemic or normal levels. It is important to note that criticized loans in the hotel and restaurant industries, our most heavily COVID-impacted industries, currently totaled $89 million. This seems to indicate that absent the COVID-19 impact on our loan portfolio, credit risk has remained relatively stable when compared to pre-pandemic levels. For more information on loans in the industry categories most…

Thanks, Tony. I'm going to provide detail on our second quarter production results, starting with our commercial lending group. For the quarter, our commercial teams closed $152 million in new loan commitments, down from $226 million last quarter and down from $212 million closed in the second quarter of 2020. The commercial loan pipeline ended the second quarter at $492 million, down from $540 million last quarter and up from $421 million at the end of the second quarter of 2020. We are continuing to see an elevated level of new loan requests from customers and prospects, similar to the first quarter, and remain optimistic this will continue to grow with most restrictions in Washington and Oregon being lifted by the governors at the end of June and our bankers out actively meeting with customers in person, in some cases, for the first time in over a year. Loans, excluding SBA PPP balances, decreased $46 million during the second quarter due to an elevated $168 million of prepayments and payoffs. This included $16 million of nonaccrual loans and is in addition to the continued runoff of the indirect consumer loan portfolio, which declined $24 million during the quarter. Consumer production, the majority of which are home equity lines of credit, was $23 million for the second quarter, up from $16 million last quarter and up from $19 million in the second quarter of 2020. Moving to interest rates. Our average second quarter interest rate for new commercial loans, excluding PPP loans, was 3.47%, which is down 6 basis points from 3.53% last quarter. In addition, the average second quarter rate for all new loans, excluding PPP loans, was 3.45%, down 21 basis points from 3.66% last quarter. The mortgage team closed $49 million of new loans in the second quarter of 2021 compared to $43 million closed in the first quarter of 2021 and $53 million closed in the second quarter of 2020. The mortgage pipeline ended the quarter at $41 million versus $36 million in Q1 and $51 million in the second quarter of 2020. Refinances made up 63% of the pipeline at quarter end. Moving on to SBA PPP forgiveness. The SBA PPP forgiveness process continues to progress smoothly. As of last week, all but 275 of our 4,642 round 1 PPP customers have submitted an application for forgiveness. We also opened for forgiveness for round 2 PPP customers in May, and as of Monday, had received 469 applications out of 2,542 total round 2 PPP customers. Please go to Page 20 in the investor presentation for more detail on PPP loans. I'll now turn the call back to Jeff.

Thank you, Bryan. As I mentioned earlier, we're very pleased with our performance to date. We're also delighted to be pivoting back away from our defensive posture over the last 15 months. In June, we began bringing back remote employees, and we expect most of our remote employees will return to the office over the summer with substantially all of our employees settled into their go-forward working environment by Labor Day. As Bryan mentioned earlier, we're seeing nice upswing in activity across the bank with deals coming from existing customers and new high-quality prospects. We remain cautiously optimistic that we will see medium to high single-digit growth as the year progresses. We also expect to continue our focus on expenses with the consolidation of 4 more branches in October, which, together with the 9 branches consolidated in earlier this year, is a 21% reduction in our branch footprint. As Don mentioned earlier, our capital levels and our robust liquidity provides us with a strong foundation to address challenges and to take advantage of opportunities. Our focus is on growth, supported by efficient operations, that will allow us to continue to deliver consistent long-term performance. That is the conclusion of our prepared comments, William, so we are ready to open up the call to any questions callers may have.

[Operator Instructions] And we'll go to our first question from the line of Jackie Bohlen.

Just wanted to dial into loan growth just a little bit more and see if there were any factors in the quarter that resulted in -- sounds like fewer commitments this quarter than last.

Yes. I think, Bryan, you want to jump in on this, too. But I think there's a couple of things, Jackie. This last quarter, we saw the pipeline kind of stretch out. We tend to focus on a pipeline of what we can see coming at us in 90 days. So that was a factor. And I think part of that may have been the slowness of our region to open up. People were putting things off and moving it forward. Bryan, do you want to join with some comments?

Yes. Just to pick up on Jeff's first point, we did see the closing percentages a little lower than normal in the pipeline. And then the over 90-day pipeline, which we don't report on, is actually up to close to $120 million. So some of the opportunities have been building in there but not reported in the -- within the 90-day pipeline. The -- with the reopening at the end of June, Jeff and I have been out more, and our bankers have been out on a number of calls. And it's only been 3 weeks, but it appears there is a number of new opportunities coming out of just our bankers meeting once again in person with customers and prospects. And watching that activity, we're -- we continue to think there's reasonable loan demand out there. And as the summer progresses, hoping to see it translate into a bigger pipeline and higher closings as we get later in the year.

Jackie, Bryan has reminded me a couple of times in the last couple of weeks that -- or the last couple of days that he'll say what he just said. It's only been 3 weeks, where we've had full range of activities for us and for our team. We have mentioned a couple of times how we're still seeing the benefits of our hard work around PPP round 2 continue to come to us. And anecdotally, I was on a call last week with a prospective customer. And the notion of what we did for them with PPP when their large bank couldn't get it for them is still very fresh in their minds, and they are anxious to do business with us. And we're happy to know that, that line of thinking is still very fresh in the minds of many of our PPP prospects that came across, which you'll recall, there were something like 900 that we brought across that were not customers and are new to the bank. And we, individually, Bryan and I've talked about it a number of times. Is the bloom off the rose with regard to PPP and the goodwill that we created? And it is not. So I think we've got that tailwind for the balance of the year as well as the fact that the openness in our region is only 3 weeks old, so there's a lot of room for things to happen.

Got it. So it sounds like maybe there's some timing at play here, correct me if I'm wrong on that, just with customer demand maybe is a little more pushed out than I would have anticipated...

I think we -- sorry. Well, I think we feel the same way. It is somewhat about the timing. While we would have been delighted to have -- and we did have our relationship managers doing outreach as best they could when they couldn't be in person using the phone and Zoom and Webex, et cetera, it really is way more meaningful when you're sitting in front of the customer. And I think that while we were in lockdown, there was a lot of economic activity around us and things were getting done. But it was hard to convince a lot of these prospective customers to make the move in that environment. And I think they're feeling more emboldened and comfortable now starting to think in terms of moving their accounts. So I think there's a lot to work with there.

Is there possibly any effect because you had such a strong participation in the PPP program that some of the -- your customers and potential customers, at least outside of PPP, were kind of taken care of with the program? And just with the economy reopening, it's going to increase their demand. Is that at play at all?

Well, we clearly helped many of our customers because we were able to accommodate anyone who wanted PPP from us as well as the prospects, and I think it played out in the report that Tony did. It helped many of our customers survive and live to fight another day, and many of them also did quite well and have a pretty nice cushion to move forward with. And I think that, that cushion which you see embedded in our balance sheet in the form of deposits is there for now. But as we talk with people who are actively thinking of how they're going to grow or develop their business, a customer that we met with a few weeks ago made the comment, "I'm going to wait for forgiveness. And as soon as I have it, I'm going to start shopping for a headquarters building, and I want to buy another company that add on to the footprint of the one I already have." So I think it helped the people that were impacted most negatively, and I think it also -- it helped the customers who got through it just fine.

Okay. Just one quick follow-up on an earlier comment you made, and then I'll step back. You mentioned that the closing percentage was a little bit lower than normal. Is that -- to the extent you're able to quantify that, does that reflect customer preference, interest rates or credit?

I think it's just timing, Jackie. It wasn't wildly off. It's just looking at what the pipeline is and then what the closing dollars are, it was just a little lower than what you might think. And some of that is just more of a timing issue. I still think the deals will close. It will just be maybe a month later than what might have previously, just with everything else going on.

And Jackie, as you can see in the slide, in our deck that talks through loan production quarter end to quarter end, we were impacted by higher than payoffs or prepays that we've seen in a long -- in several quarters. So that was a little bit of a new phenomenon. And I think it was -- some of it was paydowns coming from proceeds of PPP, people having flushed with cash and just paying off buildings, that kind of thing. And you recall, you would have heard us saying that back in '18 and into middle of '19, too.

Next, we'll go to the line of Matthew Clark.

Maybe just first on the 4 additional branch closures. I think in discussions we've had in the past that savings you can generate from closing a branch is roughly $500,000 annually. Is that about right? I'm just trying to get a sense for the overall cost save opportunity here.

Yes. Don, I think you need to answer that because I think that number is a little high.

Yes. It's more like $250,000. So like we did in the -- once at the beginning of the year, we did 8 in January, and we saved about $2 million. So we run overall fairly inexpensive branches, but still there are some savings there to be had. So it might be a little over $1 million for these 4, but I would go with that, about $250,000 per branch overall.

Okay. And in terms of timing?

Timing is Q4. And so we'll have some exit costs related to that, probably about -- we're guessing about $300,000 is our current estimate. But we also -- these are loans that were only 1 of the 4 leased, and so we have some buildings and some gains in them. So at some point, we expect to more than offset those exit costs and gains on sale of buildings going forward, but it won't probably happen in Q4 [ by ] this time next year.

Okay. And then just shifting gears to the NIM. I know you had a little bit of a benefit from a recovery, I think, this quarter. And you gave your new money yields. Curves kind of gone against you, though, on the securities portfolio. I'm just trying to get a sense for the inflection point in the margin, when you think that might be and knowing you guys have excess liquidity to help defend that.

I think we're still looking, as I mentioned last quarter. I don't think it's changed. I think we still look at the end of the year as kind of the inflection point as far as when we'll bottom out on NIM.

Okay. Got it. And then on PPP, Slide 20. I just -- I see the fundings. I'm just curious what the outstanding balances were for round 1 and then also the balance for round 2. If you had...

In the -- I think it's on the slide there.

Not funded, Matt?

Not funded, just the outstanding balance for you.

If you look at graph at the bottom there, so it's [indiscernible]

Oh, I see it now. Yes. Got it. Never mind. Got it. And then last one, just on M&A and capital return, buyback as well. Any updated comments around your discussions with potential partners and whether or not those conversations are picking up or not? And also on the buyback, how active you might be, given where the stock is trading today.

Yes. Don, I'll take the first part, and you can take the second part. With regard to M&A, Matt, we were saying that things were pretty quiet through the pandemic and leading up until the end of the -- this last quarter. But we kept up conversations. And I guess I'd characterize that now that things are opening up, those conversations are becoming more -- there's more of them, which would indicate to me that there's potential for us maybe later this year or potentially early next year.

Yes. And then, Matt, regarding buybacks, we have $1.64 million remaining in our current repurchase plan. So we've got a lot we can do this year. We will -- at these prices, we will be active. How much will depend on the movement of the stock price and other opportunities that we have for the capital.

Next, we'll go to the line of Tim Coffey.

Jeff, the -- can you kind of talk about the -- I mean, let's start with the technology projects. You're looking at your noninterest expenses as a percentage of average assets. I mean, you're definitely trending lower. Is there a range that you think you'll likely settle in?

Yes. I think that's a good question, Don, for you to answer.

Tim, can you repeat that, please, for the noninterest?

Yes. I'm looking at your noninterest expenses as a percentage of average assets. And if you look beyond the other side of this technology project, where do you see that settling out at? Because it seems like you're definitely coming off of a higher plateau.

Right. I think that we're -- obviously, we had different goals before the pandemic. I think our goals have elevated as far as our wanting to be efficient and using technology and other means. I think we want to stay in the low 2s for the overhead ratio long term. I think this year, we might see the next couple of quarters a little bump in the overall expense levels compared to where we were in Q2 because of trying to get through some technology initiatives this year, in addition to things like exit costs on branches. So it might be a little elevated for the next 2 quarters. But we do want to keep the overhead ratio itself, again, it might not be quite as low as it is like this last quarter, but again, in the low 2s.

Okay, okay. That's helpful. And then forgive me for asking this question. But if the excess liquidity stays on the balance sheet longer, there's obviously a number of levers you can pull to reduce that. Which ones are you most focused on?

Well, I think we mentioned this earlier in the call that we're focused on organic growth right now. And we just talked a lot about that. We'd love to do further M&A to flesh out our footprint as well. And Don, you may have some comments that you want to add to it. I know that the opportunity to buy investments is kind of rigorous territory right now given the rate environment.

We bumped up our purchases in the last 2 quarters, even Q2 over Q1. I would say that when the rates come down as much as they have, we slowed down a little bit. We still want to keep buying but maybe not as rapid of a pace as we were. So I think the -- lending it out and those type of opportunities is our first choice. But we're going to continue [indiscernible]. Did that answer your question, Tim?

Yes, you did. And then I'm just curious on the originations -- loan originations in the quarter. Was there specific geographic areas you're seeing the highest win rates?

Jeff, you want me to take that one?

Yes, please do, Bryan.

Yes. We're still seeing really strong originations out of King County and then our other metro markets to the north of Seattle, Snohomish, Pierce County and then in Portland. Although I would say looking at the pipeline, going forward, King County continues to be really strong. And then we're seeing building in, in all the other geographies.

And next, we'll go to the line of Jeff Rulis.

I wanted -- yes. I just want to follow-up on the -- you had the conversation on the pipeline and a little stretching on. Just in terms of the net growth discussion, wanted to check in. Jeff, you've mentioned in your prepared remarks about taking a less defensive stance. And Bryan, I think you itemized about $16 million of your payoffs out of nonaccruals. I'm wondering a piece of the net growth factor is -- and I wanted to confirm this is, do you feel less -- as credit improves, do you feel like a part of that is letting some credits go that you didn't feel great about? And as you get through those, the opportunity for better net growth is a product of that? Or is that ongoing?

Yes. No, that's part of it, Jeff. And as Tony pointed out, a lot of what we saw get straightened out on the nonaccrual side in the last quarter was really stuff that's been around for a while. It was not PPP-related. So we're going to continue to actively manage the portfolio like we normally do, and that could potentially have a little bit of an impact on our net loan growth. The indirect portfolio running off doesn't help, but we've talked about that before, too. So -- and then the payoffs that we talked about earlier. So we're hoping that when our teams get their legs under them and get moving, we're going to start to see the net improve. And I think that's why we're kind of cautiously optimistic for the rest of the year because we can see the activity. It might not even be on the pipeline yet, but we know it's coming our way, and it's going to come our way between now and a good portion of it now in the end of the year. Bryan, anything you want to add to that?

Yes. I've been watching really the activity pick up really February on. And then since we opened, as Jeff said, lots of activity. And so that's -- those are the positives. The market is competitive, and we are seeing some increasing payoffs. So I think over the next couple of months, we're really going to see it play out. And then we didn't talk about utilization rates. But with all the liquidity, those also continue to be pretty low. You can see on Slide 18, which has the change in loans, there's just a tiny amount of net advances. But on our commercial lines, the utilization rate is still down at 24%. But really, we're looking at the activity since February. And then since the governors raised the restrictions, we've got more staff in the office and more meetings going on, a lot of economic activity in the markets as well. So where exactly that -- those factors balance out, a little unclear, but we are happy to see the activity and our customers looking at doing things.

Okay. Got you. Yes. I was just trying to -- sounds positive and turning the right way. I just didn't know if it was the internal messaging of defensive stance is softened to some degree. Anyway, and I understood that you guys had some preexisting credit things that were non-pandemic that got cleaned up, so all good.

Don, I wanted to just nail down the, if you had it, kind of the core margin sequentially. If we were to kind of -- a lot of recoveries, PPP, any sort of other impact, but do you have a Q1 to Q2 what you would assign a core margin that we could track?

Well, core is -- start -- subtracting too many things, and you kind of make a lot of assumptions. I mean, PPP is going to be around for a while. So the numbers are in there. I think if they did come down, I think if you looked at -- especially if you look at the impact of the nonaccrual, which I would think is you might consider a noncore item versus 18 basis points impact on the loans compared to 5 basis points in the prior quarter. But we do hope to continue to work down our nonaccrual balances, probably not to the same extent, but we do plan to continue to work those down. And then we do list what the PPP impact is. It's -- you can strip all that out, but we are going to have PPP for a while. And it's going to -- it is in the low 3s, right? It's -- if you strip all that out, we're probably just above 3%. But I would say by the time we -- the PPP loans go around, we expect to have more leverage. And we expect to -- I'm hoping the rates increase. We don't know that's going to happen. But if nothing else, I think we'll have more leverage by the time all the PPP loans go away. So I hope that helps you.

Okay. Yes. No, just trying to ask a different question of -- I think you've alluded to kind of margin bottoming by year-end and knowing that PPP, we identify a balance there. We could kind of track that separately, and recoveries kind of go. But just trying to get what you were alluding to in terms of your margin bottoming trend and that may just be everything running, PPP running out and others. So we're just confirming that but sounds like it's all in the same. So that's it for me.

[Operator Instructions] The next question is from Andrew Terrell.

So maybe just sticking on margin, and I think you mentioned potential rate increases a second ago. Just thinking about should we get to that point, I think about 55% of the total loan book is variable rate or adjustable rate. Can you just remind us within that -- those 2 buckets, how much of those loans are currently at their kind of floor rate? And then as a follow-up, just on average, how many rate hikes would we need -- 25 basis point rate hikes would we need to move off of the average kind of loan floor?

Yes. Don, you want to take that?

Well, the second one, I'd have to look up some more information on that, Andrew. We don't have -- we're not expecting too many loans to reprice further down this year. I think we had about $65 million that don't have floors or are not on their state of floor, so there's not too much there. But the biggest risk and I guess to the overall loan yield is the fact that we're, again, continue to put on new loans at rates lower than the current portfolio yield. So that's the biggest risk there. Going the other direction, I think we're pretty asset-sensitive. So if we can get rate hikes, and again, there's starting to be some indications we might have even some short-term rate hikes by the end of next year. And I would hope that the long end would go before that. So we are pretty asset-sensitive. And so that will hopefully help us in the coming year.

Okay. That's helpful. And then maybe just kind of ticky-tacky on modeling out loan yields. So the nonaccrual interest recovery was $2 million this quarter. $1.5 million of that was one specific credit. As we think about kind of normalizing the interest recovery moving forward, should $1.5 million fall out of the run rate? Or is it the full kind of $2 million?

Well, I -- and maybe Tony can talk about what our prospects are as far as nonaccrual loans, but I think that we do continue to hope to work that down. I think it will be, you might call, lumpy. Some quarters will be higher than others. I think even 5 basis points might be high overall. But I think we're going to see some of it maybe every quarter, but some quarters will be more than others. So that was obviously a really big one. I don't expect to have that big one again, but we could have other quarters of 5 basis points. I don't know, Tony, if you have any other thoughts on the working out of nonaccrual loans.

Yes, yes. Thanks, Andrew. We're -- we do expect to see some continued move -- maybe not payoffs on some of the nonaccruals. We may have some of that, but we also are looking more at moving some back to accrual status. If you look at Page 21, you can see -- about 2/3 of the way down, you can see the nonaccrual loans that are in some of these impacted industries. As those continue to improve and get back to a more normal payment structure, we might be able to move some of those back into accruing status. That won't necessarily result in a recovery of the interest like a payoff would, but we could see some continued improvement in that area. But there's also some long-term workouts that have been in place for a long time that could resolve. But I don't think we'll see the magnitude of the drop like we did this quarter in the next couple of quarters. Some of the recovery on that COVID-related stuff could move more out into 2022 before we feel comfortable with putting it back into accrual status.

Got it. Okay. And then sorry if I missed this, but for the 4 branches you're intending to consolidate in October, are you modeling any kind of deposit attrition? Or do you expect any deposit attrition? Or are some of the kind of actions you're taking on technology investment -- on the technology investment side kind of able to offset any kind of expected attrition?

Yes. We typically do model some level of attrition, Andrew, when we consolidate branches. It really depends on how close they are to another branch and typically model 10% or 20% for a close consolidation and maybe up to 50% for a distant consolidation. And if we just use the last 9 as indicators of how things are going these days, they have -- none of them have really come close to what we budgeted for the attrition. And I think it goes to the point that you just had in your question, which is the technology has made the customers a lot stickier than they used to be. And I think that's playing to our advantage. And it's also -- as we've watched how customers manage through the pandemic, it gave us a bit more confidence to take the actions we are because we're seeing a pretty significant uptick in the consumer and the commercial side with customer usage of our technology. So that's helping as well. So we don't expect significant runoff in any of the 4 that we are talking about. William, are there any other callers?

There are no additional questions at this time.

Okay. Well, we'll call that a wrap. And we'll -- thank you all for your time and your support and your interest in our ongoing performance. And hopefully, we'll be talking with many of you in the coming weeks. So thank you, and goodbye.

That does conclude our conference for today. Thank you for your participation and using AT&T conferencing services. You may now disconnect.