Good day and welcome to the HealthEquity's Fourth Quarter 2015 Results Conference Call. Please note that this event is being recorded. I would now like to turn the conference over to Frode Jensen, General Counsel. Go ahead, Mr. Jensen.

Thank you, Angela. Good afternoon and welcome. My name is Frode Jensen and I'm the General Counsel of HealthEquity. Please be advised that today's discussion includes forward-looking statements, including predictions, expectations, estimates or other information that might be considered forward-looking. Throughout today's discussion, we will present some important factors relating to our business, which could affect those forward-looking statements. These forward-looking statements are also subject to risks and uncertainties that may cause actual results to differ materially from statements made today. As a result, we caution you against placing undue reliance on these forward-looking statements. We encourage you to review the risk factors detailed in our final prospectus filed with the SEC on August 1, 2014 and our most recent quarterly report on Form 10-Q and any subsequent periodic or current reports for a discussion of these factors and other risks that may affect our future results or the market price of our stock. Finally, we are not obligating ourselves to revise our results or publicly release any updates to these forward-looking statements in light of new information or future events. With that, I'll turn the call over to Jon. Jon?

Thank you, Frode, and thanks everyone for joining us on today's call. My remarks are going to focus on the full year results, and Darcy will provide detail on Q4. Throughout fiscal 2015, HealthEquity made solid progress on the four key metrics that drive the business; revenues, adjusted EBITDA, HSA members, and assets under management or AUM. The annual revenue was 87.9 million, an increase of 42% compared to fiscal '14. Adjusted EBITDA was 25.2 million for the year, an increase of 60% compared to a year ago, and EBITDA growth exceeding top line growth as a result of the strong operating leverage in HealthEquity’s model. Adjusted EBITDA margin increased from 25% to 29% this year. As we announced in February, HSA membership grew 47% in fiscal '15 and HealthEquity ended the year with 1.4 million HSAs. AUM was 45% in fiscal 2015 and HealthEquity HSA members ended the year with 2.4 billion in assets under our management. Note that HSA membership continues to grow faster than AUM balance. This in management’s opinion speaks to the large future growth and margin expansion opportunity that is embedded in HealthEquity’s base of members. As of January 31, 55% of our HSAs were less than two years old and we have found that on average, account balances, which run about $800 the first year will nearly triple over the subsequent five years. Higher account balances fuel custodial revenue growth with attractive incremental margins to HealthEquity. Most importantly, growing balances over time mean that HealthEquity HSA members are building life-long health savings, while benefiting from the lower premium that HSA style plans generate and that provide over traditional plans, and the high level of visibility the HealthEquity platform provides to day-to-day medical bills, real world ways to spend less, and other tools our network…

Thank you, Jon. I’m pleased to be here. HealthEquity sales growth in fiscal 2015, the key metrics of which Jon just discussed, was in our view driven by a number of common themes repeated across the national market. I want to highlight four of them. First, growth was diverse and broad based. New HSA members added during the fiscal year are widely distributed across our 340 employer and health plan network partners. No single network partner accounted for more than 7% of this year’s new HSA members. As a result of this diversity, HSA member concentration among network partners remains low. As of January 31, 2015, no network partner is associated with more than 4% of HSA members. Growth was also spread across large employers, small employers, and the emerging individual exchange segment, our approach to which our Founder, Dr. Stephen Neeleman talked about last quarter. Second, customers turn to firms like HealthEquity that offer knowledgeable and experienced specialists in the field. Our sales team members have an average tenure of nearly six years at HealthEquity as of January 31, 2015. We firmly believe that promoting from within the organization particularly from the member and partner service groups has created a field team that is extremely knowledgeable about the solutions we offer and able to speak from experience to the impact of partnering with HealthEquity. Third, FY '15 growth was the result of an expansion in the number of our employer and health plan network partners. During FY '15, HealthEquity increased its number of network partners from 197 to 340. Employer network partners increased 140 to 270. Health plan network partners increased 57 to 70. Notable additions include diversity partners such as Health Alliance Plan in Michigan, Blue Cross at Idaho, U.S. Roche, Advance Auto Parts, Boston Scientific, Reebok, Adidas,…

Thanks, Matt. Today, I will discuss our results on both a GAAP and a non-GAAP basis. Our non-GAAP operating metrics include adjusted EBITDA and pro forma non-GAAP earnings loss per diluted share. We define adjusted EBITDA as adjusted earnings before interest, taxes, appreciation and amortization, non-cash, stock-based compensation expense and other certain non-cash statement of operations items. We define pro forma non-GAAP earnings loss per diluted share as net income per diluted share calculated on a pro forma basis after adding back to net income, non-cash, stock compensation expense net of tax associated with performance-based stock options granted on and after our IPO and also giving effect to the conversion of all of our outstanding preferred stock into common stock, which occurred on August 4, 2014 in connection with our IPO, as this such conversion occurred at the beginning of each period presented. I’d like to use my time today to review our fiscal 2015 full year and Q4 results and to discuss our initial fiscal 2016 guidance. As Jon mentioned, revenue for fiscal year 2015 was $87.9 million, an increase of 42% compared to fiscal 2014. At HealthEquity, we report our revenue in three categories; account fees, custodial fees and card fees. Revenue grew substantially across all three categories. Account fee revenue for fiscal 2015 represented 51% of total revenue at $45 million, an increase of 47% compared to fiscal 2014. Custodial fee revenue for 2015 represented 28% of total revenue at $24.4 million. This represented an increase of 29% compared to fiscal 2014 even as average cash AUM increased by 37% over the same period. The difference is due to an average yield on cash AUM in fiscal 2015 of 1.52% compared to 1.64% in fiscal 2014. Investment AUM as a percentage of total AUM continues to increase…

Thanks, Darcy. We’re incredibly grateful for the partnership of so many people in our organizations including organizations that we very much look up to that made fiscal 2015 a solid year for HealthEquity. Fiscal 2016 is in full swing now and we’re focused on all opportunities to improve, to learn from our customers, from our members, our partners and from you and to deliver on our long-term commitments to you and to investors. With that, let’s open the call up to questions.

[Operator Instructions]. We’ll take our first question from Lisa Gill with JPMorgan.

Hi. It’s actually Gavin in for Lisa tonight. I appreciate all the color you guys gave on the drivers of growth in fiscal 2015. I just wanted to get some update on the competitive environment. There’s always been a few changes over the past year. I want to see sort of how that’s impacted your sales,if at all, and are you seeing more customers particularly on the employer side switching from competitors or is it really still more of a greenfield opportunity in terms of employers implementing an HSA for the first time?

Thanks, Gavin. It’s great to hear your voice. A way to think about it is that out in the field what makes HealthEquity competitive relative to others in the market and what has allowed us to over the last number of years see growth rates that are significantly in excess of whatever the market’s doing really boils down to the fact that our technology and our ecosystem and our commitment to service really work with the way that we take our products to market with our partners and health plans, and employers and their objectives, and ultimately that is where accounts are being opened. So, that’s our competitive advantage, and I don’t think fundamentally anything has changed in fiscal 2015 or even as we begin to ramp up fiscal 2016 about that competitive advantage except that perhaps it’s widened a bit as we’ve continued to widen our footprint. So there’s been a little bit of shuffling of the deck chairs among competitors and we have good competitors and solid competitors, but I don’t perceive that the fundamentals that make our business very competitive for our partners and our members have really changed. The second part of your question was really about whether the bulk of our business is sort of greenfield or is it a takeaway business, and I’ll say it’s always been a little bit of both, which I think surprises some people but that continues to be the case. Certainly, we saw this year more what we refer to as transfers or bulk transfers from other custodians than we’ve ever seen before buy a significant margin. So that means people who had an HSA somewhere else and chose – and remember, the individual has to make this choice. An employer can’t move your money for you and health plan can’t move your money for you, it’s your money – chose to move their money to HealthEquity in the context of an individual choice or an employer switching or perhaps a health plan switching. So that suggests that takeaway activity is a growing component of the business as you would expect since there is more to takeaway. But at the end of the day, most of our growth is today and will continue to be driven by employers and individuals making the decision to opt for HSA style plans as an alternative to traditional health plans due to lower premiums, the opportunity for life-long savings, and the value that HealthEquity offers uniquely.

Okay, that’s very helpful. And then as I sort of think about M&A opportunities that you’ve talked about in the past, obviously you’ve continued to have strong organic growth. You talked about the increased level of takeaways. Do you think you’ll continue down on more of an organic path and perhaps focus M&A potentially on more technology or do you still see a lot of opportunity in over 2,000 banks, for example, that are offering HSAs in the U.S.?

Yes, another great question and certainly the fact that organic growth has been so healthy, it does give us the luxury to be very thoughtful about how we deploy the capital that investors have trusted us with and as well as the capacity on our balance sheet. And that having been said, we’re going to continue to go down all three paths to growth, the first obviously being continuing to grow the organic business we have, the second being continuing to explore as we do everyday, opportunities to bring competitive portfolios on to the HealthEquity platform through acquisition, and the third being capability or technology-oriented acquisitions that help us meet the needs of the emerging healthcare consumer, and there are a lot of those needs. So that’s a rich area for work as well.

Okay, got it. And just a quick one for Darcy. How should we think about the tax rate in fiscal '16?

So, we are modeling a tax rate of 38.6%.

Okay, very helpful. Thank you.

We will now go to Peter Costa of Wells Fargo Securities.

Hi, guys. I hate to ignore the quarter but it was so good, I didn’t want to spend too much time drilling down on it, congratulations. Can you talk a little bit more about the competitive environment again sort of adding on to Gavin’s question? In particular, one of your competitors has gotten substantially larger recently with its acquisitions of JPMorgan’s business. Can you talk to if there’s been any changes in their behavior in how the marketplace perceives them at this point in time or is it sort of going all along same as it was before?

Well, we’d invite you to talk about the quarter all you want, Pete, don’t worry. No, I’m teasing. I think in short, the answer to your question is that we have not seen a substantial change. What we expect is that Webster’s HSA Bank will, as it has been in the past, will be a good competitor, and I would leave it to them to describe their strategy. I think, however, as we observed in the context of evaluating the Chase portfolio as they did, they have a complex endeavor in front of them in terms of bringing that portfolio fully onboard their platform both commercially and operationally. I am confident that they will do well, because Jim Smith and the team at Webster are highly capable and very strong performers. But my sense is that that will be their focus and should be their focus for some time, but meanwhile they will be in the market as they have been and they’ll be a good competitor. But I don’t perceive – I guess I’d say I think that the market looks at HealthEquity and I would invite Matt actually to comment further on this if he’d like to. I think that the marketplace perceives HealthEquity as the technology leader, as driving and shaping the marketplace in terms of functionality, capability. If you look at the amount of growth that we have this year, it’s fair to say that that growth is comparable in size in terms of accounts to the number of accounts that were acquired in the transaction you referenced. So I think it’s hard for the market not to look at HealthEquity as not just a leader but the leader in terms of where this market is headed. Matt, would you want to add any color to that?

Yes, I tend to agree. I think that the market looks at HealthEquity both in concept and delivery, leading thought and leading execution of products and services around and support around the health savings accounts themselves. I think as Jon mentioned, I haven’t seen a lot of change in the marketplace in the last year as it relates to that particular acquisition. He is correct. They will figure it out very quickly. They are a very capable group. But what we’re noticing in the marketplace is HealthEquity has become not only a leader in terms of the accounts in AUM but also a leader in terms of thought leadership in terms of tying ourselves into our health plan partners, our employer network partners in new and different interesting ways, leveraging our ecosystem.

Matt, maybe I’ll add one more thing to that which is we have to earn that. In other words, while it’s nice for us to sit here and make sort of pronouncements about market leadership, this is a market that is still in its early innings if not at first inning and opening day coming up. And as a result, today’s leaders will have to work very, very hard in terms of innovation, execution and so forth to maintain those positions, to maintain and grow the trust of consumers, to meet needs of consumers that as I said earlier are still very substantial. So we’re not close to taking these points for granted.

Moving on to private exchanges a little bit, they didn’t really accelerate the way some people thought they would this past year but there’s some expectation that maybe that’s going to happen still going forward here. You going through the network partners that you’re using, the health plans or employers, you still have access to that but you don’t have really private exchanges bringing you to the table themselves. Is that something you think you should pursue going forward? And if not, why not?

We made a deliberate decision not to go that route at the outset. We certainly evaluated it and talked to some of the nascent exchanges but frankly I’m feeling more comfortable with that decision today than I was a year ago, and I’ll tell you why. I think that the issue with the exchanges is that it’s a metaphor that can meet any number of things in specific situations. But maybe the thing that is often in common particularly with the ones that are sort of most often discussed in the market that we play in, which is active employees and active individuals under 65. The exchange may be the supermarket but a supermarket without products and customers is not – maybe that’s like soviet style but outside of that it’s not terribly valuable. And in order to attract customers, you need to have the best products available and you don’t get to set the rules about what customers want, the customers do. And similarly in order to attract product, you need customers. And the symbiotic relationship is between product and customer, right, and it can be circumstances and that was our view and that’s why we focused on the product and the customer rather than the store shelf. Might that game change some day, it may and certainly we feel like we’ll be in great position to deal with that, but that’s the decision we made. We stuck with it. I will say we’re active on a number of these exchanges. It’s just that we’re active in a way that from our perspective really meets the needs of our partners, our employer and health plan partners who – they turned outsourcers for flexibility. They’re not turning to outsourcers for fewer choices and I think you see that. So I guess in short, Pete, we feel real comfortable with where we are. It’s also a strategy that we may change and want to change over time. One thing I do see with private exchanges and others have commented on this is that where they have gained traction – again, speaking about private exchanges it’s primarily been obviously the retiree space but beyond that with kind of more seasonal workers or folks where there’s a lot of work turnover and the like, there’s some underlying actuarial reasons why this might be more appealing in those environments. But those aren’t the most conducive environments to what we do. And so, look, I think that like a lot of firms we will continue to participate in that market and watch and develop, but we didn’t feel like it was a good market to bet the store on and that continues to be our view.

Okay. And the last question for Darcy. With the thought about interest rates potentially rising going forward, are you thinking about changing sort of your investment partners and style the way you invest money like may be keeping it shorter term and maybe [indiscernible] interest rates go up so that you can put it back to work again at higher rates or are you keeping it fairly steady and the flow continuing?

We’re maintaining the same approach that we have. We have rate agreements with our custodial bank partners, some of those are fixed in those durations. I think about 40% of our portfolio is fixed today and those are in a three to five-year range. And then the rest of our portfolio was floating as interest rates go up. So, we’re not going to go out very long on this but we’ll maintain the same posture that we have and we’ll see what happens. We’re very comfortable with the rates that they are today. We’ve mentioned before that we felt that this year they kind of bottomed out and as we’ve entered into new rate agreements going into next year for capacity, we’re comfortable with the 152 that we yielded in this year that we can maintain that going forward. So kind of same strategy we’ve had and then we’ll see what happens in the rate environment, but we’re pretty flexible.

Thanks.

We will now go to Greg Peters with Raymond James.

Good afternoon and congratulations really on a great year for you guys. I wanted to just follow-up regarding your commentary on your partners whether it’s your employer partners or your health plan partners and put it in the context of the guidance. To go from 197 to 340 partners is just spectacular and I’m wondering just as we split that apart and look at the employer partner growth, was there more growth coming from smaller employers or was it more large employer wins? And can you give us a sense of the penetration rates as they stand today? Obviously, with all the on-boarding and new partners, I expect the penetration rates are still relatively really low. So that’s two questions embedded in that. The third would just be what kind of expectation should we be thinking about in the context of the revenue and all the other guidelines that you’ve hypothesized for 2016, what should we be thinking about how that number might expand in this coming year?

Yes. Let me try and answer a number of those questions as the bases for my answer talking about an example. This is one of the firms that Matt mentioned in his discussion that presented was Eastern Chemical out in Tennessee and Eastern in its presentation described its own adoption curve, which was typical of what we see among new adopting larger employers where a few percent, then 20, then kind of in the 30s, then 40s and as Matt said has now gone to a full replace strategy for 2015. And that’s a very typical adoption curve, and so you’re quite correct. If you kind of put all of our large employers in a blender, I’m not sure they want to be in a blender, but some of them make blenders, then the aggregate adoption rate among those is still in the mid-teens. But you have now a mix of more employers in the full replace as well as some much earlier in the cycle. And our guidance kind of reflects that. Well, obviously, we saw great growth in the employer business and again these are larger employers. It’s still the case that typically these are multiyear adoption cycles and as we said before, there are not driven by our sales and marketing expenditures. They are driven by first and foremost plan design decisions that the employers themselves make as well as the health plans make and by the educational efforts that we work on in cooperation with our plans, with our ecosystem partners, with our employers, et cetera. But plan design play is an absolute critical role, so these things move as fast as the employers themselves want them to move. And I think that sort of is the connection between those two numbers, that is the very rapid growth in our number of employer partners and the growth in our guidance. Let me say one other thing, which is I think this should be apparent but it’s always worth repeating is that a new partner in any given year will really typically, especially in new, new employer partner will produce revenue in subsequent year and a new heath plan partner as we’ve discussed before can take quite a bit of time to ramp up. And that thought is reflected in our guidance too. And so, look, what I think you should take out of all of those comments is something that we said in the comments upfront, which is that the growth of the footprint and if you think about the network partners as the footprint, it really represents the revenue and earnings potential in the business along with the growth in the individual account balances we saw. So I think that’s the way it looks. Clearly, we’re going to realize some of that potential in fiscal 2016, but I expect that we will be seeing the benefits of the just completed sales cycle for years to come.

So just sort of a two-part follow-up, just among the 170 employer partners, what approximately percentage of those are in the full replacement mode relative to the spectrum you described? And then I know we’ve talked in the past about the changing nature or dynamics of account holders and how they might use the account going from a transactional based structure to more of a savings based structure and how it might go flow through in terms of card fee revenue, et cetera. And so now that you’ve had a couple of these full replacements under your belt, I’m just curious if you could comment on the trends you’re seeing there as well?

So, we don’t have the first number you’re asking for in front of us, so if you wouldn’t mind, allow us to get back to folks on that one though I would say generally the vast majority of our employers are not yet in full replace mode but I would also say that I’m heartfelt [ph] to think of an example where an employer’s penetration has moved backwards.

That’s an acceptable answer. And then what about just the changing – is there any update on just the changing nature of the usage of account holders?

It’s a really important question. We’ve included in the 10-K some data with regard to the percentage of our assets that are invested as well as the percentage of our account holders who invested. I actually think while that data showed some – those data showed some growth, in a way they understated because so many new accounts come into the business in January. And obviously the month in which they come in, and they all come in as cash and so in many cases there hasn’t been sufficient time for those individuals in cumulative balance or to come in and begin investing and what have you at least based on past experience. That will change over the course of the year. But I guess, Greg, the way I think about it is that if you sort of for a moment ignore the wobbling that occurs each January, the percentage of our members who invest as well as the total number of our members invest obviously continues to steadily grow month after month after month. It’s a small percentage but it grows every month. And I think the evidence that at a sort of social level, people are beginning to understand that the HSA will always be a mix of a highly transactional account but also with an investment potential that’s very valuable. Really in some of the press reel that you see on HSA, like you we certainly all get Google Alerts. I can say Google because they are our client, I’m allowed to say they are our client and they won’t mind me promoting them. They don’t need my promotion apparently, but nonetheless when increasingly the articles and press particularly in the consumer finance press that you see about HSAs use phases like, oh, it’s a hidden investment opportunity. And that’s part of the education process just as surely as the efforts that we make with our partners. So I think there is no question that the trend is moving towards the use of these accounts as both a valuable transaction mechanism and a valuable investment mechanism and of course the implication for HealthEquity is that the margin – the higher the balance of an account, the more profitable it is but also it really gives us an opportunity to show our stuff in terms of things like our advisory service, which remains really unique within the industry and something that is very much appreciated by our members as well as the fact that we’ve gone to the trouble of organizing within the company an IRA so that the funds we pick are carefully bought through with an eye towards the interest of our members not just to help equity.

Great. Thank you for your answers.

Thank you.

We’ll take our next question from Mark Marcon with R.W. Baird.

Good afternoon. Let me add my congratulations for a great year and a great quarter. With regards to the guidance that you’ve provided, how should we think about the HSA membership growth over this next year? You just came off a year with adding 459,000. You’re existing base is going to continue to grow. Do you anticipate having a significant ramp in terms of the number of new HSA members that come in relative to a year ago?

Hi, Mark. Thank you. This is Darcy. As we’ve talked to many of you before when we build out our models, we have two major channels that we derive our HSAs from; health plans and new employers. And our health plans as they come on board, they establish a pattern month-in and month-out and so we build a model out based on the health plan growth what they did last year month by month and what we expect in January. And so that one is pretty easy for us to build out and we’re going to be pretty conservative on that January number next year. As you know, it doesn’t have a huge impact on the revenue for the fiscal '16 as much as it would for the next fiscal year. With respect to new employers, we look at what we did this year. Most new employer HSAs come on in January. We’ll get a little bit of a bump maybe from an employer end of July or something like that. But generally a new employer is going to do it with an open enrollment decision that they make and so that we get that impact in January. So we intentionally do not give HSA account growth guidance. We feel that the way that we’ve built it out that we’re fairly conservative and it’s not going to change the needle too much on FY '16 revenue or results of operations but Matt and his sales team will be very aggressive out there to drive business for new HSA account growth next January. And so as we give our guidance, we do not get too aggressive on the January account growth number next year intentionally. Jon, do you have anything to add on that?

Nope.

Okay. And can you give us some of the other underlying metrics in terms of assumptions with regards to the yield on the float or your PCAPM, how should we think about those?

Yes. As we said in the past, the yields that we have achieved this year, we intend that we should achieve that same yield this next year. We haven’t built any increase into that yield but we feel that we can sustain the yield that we had in FY '15. With respect to accounting, they’ve always been pretty steady. We’ve talked in recent times about the inner-play that happens between AUM and account fees as we bring on new employers particularly where we know that there are making a healthy contribution to the HSA member’s account, then we will give a little bit more on the account fee that we’ll be willing to share. So you may see if there is any decrease because people are getting to a higher tier and a lower price for their account fees, that can be somewhat offset by AUM and custodial fees. And so we’d expect that there may be a little bit of shrinkage in the rate not in our overall growth of the account fees because we’re growing so many accounts, but we also expect that AUM will continue to grow. We did note that as employers begin to adopt these and as Jon mentioned, everything about a plan design is really what determines how many of their employees adopt the HSA or some health plan. As they make that more attractive for their employees and they put more money into the account, that fuels the middle bucket of our revenue, the custodial fees, and like I said, we’re obviously incented to make sure that relationship is healthy and so we’ll negotiate those account fees lower in the case where they’re making more of a contribution.

Okay, great. And then from a margin perspective, just your EBITDA guidance, is that inclusive or exclusive of stock comp?

It’s exclusive of all stock comp.

Okay. And are there any areas where you would anticipate that expenses are going to grow at a more rapid rate than revenue?

There may be some specific departmental buckets where they are, but generally when we go through our budget and process, we’re pretty watchful about making sure that we grow the business profitably and that we have budget targets by department. And so generally speaking, I’d say no.

Okay.

I’d just comment in that regard that look, when we budget internally and complete our annual plan, we’re doing it on the denominator of HSAs and each day members. And so the practical effect of that is that we’re looking for efficiencies across every department in every year. In some cases, we may choose to spend those efficiencies and invest in somewhere else but we sort of start out from the perspective that we’ve had an increase in the base and another year to learn and the result of that should be some incremental operating efficiency and thus far that’s been the case and certainly it’s our expectation that that will be the case this year. So, you certainly see that below the gross margin line and I think if you actually broke down the operations above the gross margin line where we certainly chose to certainly to continue investing in service and so forth, but nonetheless as you get down to the departments, it’s pretty clear that the business is scaling in terms of if one defines scale as a reduction in unit cost as the number of units gross.

Mark, I would just add – I want to reiterate what we said on our third quarter call is that in fiscal '16 we will have a full year public company G&A expenses versus last year we only had half a year. And so that’s been built into our modeling also. As we all know, public company costs are higher than private company costs.

Absolutely. I appreciate the color. Thank you.

We’ll take our last question from Steven Wardell with Leerink Partners.

Hi. Great quarter, guys. Your average account fee per user per month seems to be up in the fourth quarter. What’s driving that and how do you expect that to trend over time?

The average account fee on any given quarter can be impacted by not only our account fees per custodial account but we also supplement that with ancillary fees that we may get that sometimes they may spike a little bit in a particular quarter. We also include our reimbursement account fees in that numerator. And so on a quarter-to-quarter basis you may see even some dips and spikes, but we expect that over time that our account fees that they will grow because of the account growth and that we’ll see a slight decrease in the average account fee per custodial account. But we think it’s pretty steady. It’s been pretty steady for the last three years and the blend between the ancillary fees and the account fees from HSA, et cetera, kind of blend together. But we don’t see any dramatic changes. If anything, they may be down. As I mentioned earlier, the account fee per custodial account may go down slightly but we expect that the AUM related to those accounts will go up.

I’ll add only to that – first of all, Steve, welcome to the family.

Thank you.

And then secondly, in the field while we’ve been very effective at deploying cash to FDIC member institutions that can make use of it, that’s not true across the spectrum. And so there are competitors of ours where we’ve seen especially more so as we turn the corner into this year where we’ve seen a few price increases here and there on the fee side from competitors, because those competitors simply are not able to sustain whatever internal hurdle rate they were using as cash. Again, from our perspective, one of the advantages of our model is that we’re going to deploy our trust assets in institutions that can use it whereas more typically if I’m a midsized bank in a particular part of the country, the benefit of that capital to me to some extent is going to be a function of my ability to generate loans. And so we kind of see the steadiness of that as being a real advantage of the model. On the one hand, we’re not going to overreact when – as in this case, you see some price increases on the fee side, because we know that won’t be true of everybody and it really does give I think our customers some steadiness. And I’ve heard that comment over and over again where some will say, geez, four years ago so and so was telling me it was all free and now they’re charging me $5 a month or vice-versa. And our response is, look, we have the ability to be steady about this and not to have to react to every change and wiggle in the yield curve in terms of our fee pricing.

Great, thank you. And another question is can you give us a little more color on adoption? You said that adoption is often driven by plan design. So what is it about plan design? Is it employer matching say or contributions that’s part of the plan design? And also from the members perspective, would you say members are becoming generally more aware and more educated in a more favorable toward HSAs? Is that moving?

Let me answer the first question. The key variables from a plan design perspective are the premium to the member of the HSA plan relative to other premiums, the contribution to the account whether it’s matching or bulk for the moment – that’s sort of a secondary factor, but the amount of the matching and the relevant deductibles and then of course any network differences. So, obviously, when an employer decides to go full replace and all of their plan options are HSA compatible, well obviously that plan design decision has a huge impact. But before you get there what you tend to see is that where an employer will start and in some ways the health plans with regard to the fully insured business are in the same place. Where the employer will start is with an HSA plan option that is not terribly competitively priced relative to its actuarial value, and so adoption will be really limited to those folks who are really in it solely for the tax advantage of the ability to save on triple tax-advantaged basis. Today that’s a very limited group. So that’s kind of where people start and where they migrate to over time is a couple of things happen. First of all, the deductibles on their traditional plans are raised to the point where, as I said earlier and we’re not supposed to make this observation, the average deductible for a PPO plan this year is above the HSA minimum. Now they have other features like pharmacy co-pays and some other things, but my point is that the features of the traditional plans will be skinny down and in many cases their adjustments made to the HSA plans to make them more attractive such as enhancing employer contribution or adding a match,…

Great. Thank you.

Ladies and gentlemen, with no other questions, we’ll go ahead and end today’s conference call. We appreciate your participation and please disconnect.