Independent Bank Corporation (IBCP) Q3 2016 Earnings Report, Transcript and Summary

Good morning and welcome to the Independent Bank Corporation's third quarter 2016 earnings conference call. All participants today will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. Now I'd like to turn the conference over to Brad Kessel, President and CEO. Please go ahead, sir.

Good morning. Thank you for joining Independent Bank Corporation's conference call and webcast to discuss the Company's 2016 third quarter results. I am Brad Kessel, President and Chief Executive Officer; and joining me is Rob Shuster, Executive Vice President and Chief Financial Officer. Before we begin today's call, it is my responsibility to direct you to the cautionary note regarding forward-looking statements. This is slide 2 in our presentation. If anyone does not already have a copy of the press release issued by Independent today, you can access it at the Company's website, www.independentbank.com. The agenda for today's call will include prepared remarks followed by a question-and-answer session and then closing remarks. We are pleased to report solid overall results for the third quarter of 2016. Net loan growth and mortgage loan originations and sales contributed to a 26.3% year-over-year increase in our quarterly net income. Quarterly earnings per share grew by 36.4% year-over-year reflecting both the increase in net income and the benefit of our share repurchase activity. Further, despite continued pressure from low interest rates, we did achieve growth in net interest income on both a year-over-year and sequential quarterly comparative basis. Turning to page 5. This quarter we are reporting net income of $6.4 million or $0.30 per diluted share versus net income of $5 million or $0.22 per diluted share in the prior-year period. For the nine months ended September 30, 2016 the Company is reporting net income of $16.9 million or $0.78 per diluted share compared to net income of $14.4 million or $0.62 per diluted share in the prior-year period. The third quarter's results were driven by net interest income of $20 million, up $1.2 million or 6.1% from the year-ago quarter and up $400,000 or 1.9% from the second quarter of 2016; and $11.7 million in non-interest income fueled by gains on mortgage loans of $3.6 million compared to $1.8 million in the year-ago quarter. The fundamentals of our balance sheet including capital, liquidity, and asset quality; all continue to be strong while we continue to grow loans and optimize our earning asset mix. During the third quarter, our loan portfolio grew $25.2 million or 6.3% annualized. Our loan to deposit ratio at 73% holds further opportunity for growth in net interest income. Today, Independent Bank is the fourth largest bank headquartered in Michigan and operates 63 branch locations in 21 counties and 11 MSAs as seen on page 6 of our presentation. Through the nine months of 2016, Michigan market conditions continued to be good as measured by labor, housing, and commercial real estate. The state unemployment rate is at 4.6% versus the national rate of 5%. Michigan payroll jobs totaled 4.329 million in September, 92,000 higher than one year ago. In September of 2015, Michigan's job gains have occurred in almost every major industry. The largest year-over-year increases have been in professional and business services, plus 23,400; education and health, plus 19,000; leisure and hospitality, plus 8,800; and manufacturing, plus 7,700 jobs. Michigan housing conditions also continue to exhibit positive trends as measured by total housing sales, housing starts, and the median sales price of single-family homes. The Detroit housing prices were up 5.34% year-over-year according to the Case-Shiller Home Price Index. Occupancy rates for multi-family, office, light industrial, and retail continue to trend positively in each of our markets. The favorable economic conditions are seen in our loan origination and deposit gathering results. Page 7 contains a good summary of our loans and deposits by region. While our West Michigan market has led both our loan and deposit growth, we have seen year-over-year loan and deposit growth in each of our four markets. Total deposits as seen on page 8 were $2.21 billion at September 30, 2016, an increase of $146 million or 7.1% since September 30, 2015. The increase in deposits in addition to being spread across our markets has also been in both retail and commercial public fund portfolios. The Company's deposit base is substantially all core funding with $1.74 billion or 79% in transaction accounts. Consistent with industry trends, we continue to see increases in usage of our digital platforms and call center while at the same time seeing declines in branch transactional traffic. Accordingly, we continue to expand our digital product offering and call center hours. We also continue to emphasize with all our associates the importance of growing our deposit base and related fee income services. I have mentioned on previous calls our efforts and results to improve the overall efficiency and productivity of our branch network. These efforts have included reducing our branch delivery channel from 106 locations to the present 63 through a combination of sales, consolidations, and closures. In doing so, we have improved the overall profitability of our branches and increased the average deposits per branch from $20.2 million at the end of 2011 to the current average of $33 million per branch. As seen on page 9, loans including loans held for sale increased to $1.65 billion at September 30, 2016. This represents the 10th consecutive quarter of net loan growth for our Company. Total portfolio loans grew by $25.2 million or 6.3% annualized. Adjusting loan growth to remove impacts of a 06/30/2016 commercial customer overdraft of $6.7 million and a third quarter 2016 bulk mortgage loan purchase of $14.9 million results in net loan growth of $17 million or 4.3% annualized. Our mortgage team originated $123.1 million and sold $89.3 million during the third quarter. This compares very favorably to the second quarter's $92 million in originations and $70.5 million in sales. Independent Bank generally sells all its 15-year and 30-year fixed-rate mortgage originations. The bulk loan purchase during the third quarter was of conforming 15-year and 30-year fixed rate first mortgages generally conforming seasoned paper with Michigan collateral, a little different from our bulk purchase in the fourth quarter of ‘15 where that paper was jumbo product. We will continue to consider this strategy going forward as we look to improve our net interest income through investing in higher yielding loans as compared to lower yielding securities. That said, I am hopeful we will grow our mortgage category organically in future quarters. Our consumer installment category grew by $12.5 million in the third quarter or 19.5% annualized. Included within this production are originations from our branch channel of $9.5 million and $23 million from our indirect channel. The mix for the indirect originations included $15 million in powersport and $8 million in recreational vehicle loans. The commercial team generated $56 million in new and renewed production for the quarter. When adjusting out a commercial customer overdraft at the end of the second quarter, the commercial category was flat on a linked quarter basis. However, within the commercial category, we saw an increase in line commitments of $13.9 million while line usage increased just $3.1 million over the quarter. Unplanned payoffs were up over quarter one and quarter two. Overall the commercial pipeline continues to be very healthy and supportive of our targeted annual growth rates. The risk profile continued to improve with large credits now making up just 3.2% of the portfolio. The portfolio continues to be diversified by loan type and by size. Page 10 provides some information on our capital as well as four quarter rolling averages for return on assets and return on equity. We are targeting tangible common equity to range between 8.5% and 9.5%. Our plan is to retain capital for organic loan growth and return capital through a consistent dividend payout plan and share repurchase plan. Tangible common equity totaled $248.9 million or 9.81% of tangible assets at September 30, 2016 as compared to 10.48% for the same quarter one-year ago. Over the last year, we had deployed capital organically with $142.4 million or 9.7% growth in average loans and $159.9 million or 6.9% growth in total assets. Over the same period, we have returned capital through dividends and share repurchases. This includes our recently announced $0.02 or 25% increase in our quarterly dividend to the current rate of $0.10 per share effective with our November 15, 2016 dividend. And since the start of 2015, we have repurchased 2.12 million shares of IBCP. At September 30, 2016, our tangible book value per share is $11.72 per share, up from last quarter's $11.49 per share. I will make a few more comments on the subject in my closing remarks. But at this time, I would like to turn the presentation over to Rob Schuster to share a few comments on our financials, credit quality, and management's outlook for the remainder of 2016.

Thanks, Brad, and good morning, everyone. I am starting at page 11 of our presentation. Our net interest income totaled $20 million during the third quarter 2016, an increase of $1.2 million or 6.1% from the year-ago period and an increase of $368,000 or 1.9% on a linked quarter basis. Our tax equivalent net interest margin was 3.51% during the third quarter of ‘16 compared to 3.58% in the year-ago period and 3.52% in the second quarter of 2016. As I stated in last quarter's call although the net interest margin remains under some stress due to the prolonged low interest rate environment that has pressured yields on the Company's loan portfolio, we remain optimistic that we can offset this stress by a remix of our earning asset base largely through loan growth. Average interest earning assets were $2.29 billion in the third quarter of ‘16 compared to $2.11 billion in the year-ago quarter and $2.26 billion in the second quarter of 2016. Page 12 contains a more detailed analysis of the linked quarter increase in net interest income. This increase was primarily due to increases in interest income on loans and on securities and investments that was partially offset by an increase in interest expense on deposits and borrowings. We will comment more specifically on our outlook for net interest income for the remainder of 2016 later in the presentation. Moving on to page 13, non-interest income totaled $11.7 million in the third quarter of 2016 as compared to $10.1 million in the year-ago quarter and $9.6 million in the second quarter of 2016. Our mortgage banking operations caused much of the quarterly comparative variability in non-interest income. In the third quarter of ‘16, gains on mortgage loans increased to $3.6 million due to both improved profit margins on loan sales and higher levels of mortgage loan originations and sales. We expect the mortgage loan sales profit margin to return to more normalized levels in the fourth quarter of 2016 due to competitive factors. In addition, we recorded a recovery of previously recorded impairment charges of $0.62 million on our capitalized mortgage servicing rights in the third quarter of 2016, however offsetting this was higher levels of amortization of servicing rights. If you normalize amortization and eliminate this recovery, the overall net impact was about $0.01 benefit to diluted earnings per share in the third quarter of 2016. Interchange income declined on a year-over-year basis. Although we experienced 1.8% increase in transaction volume, this was offset by a 5.3% decline in interchange revenue per transaction. As I have previously stated, we are seeing merchants direct more transactions through as pin-based, which has a lower level of revenue than signature based transactions. In addition, the third quarter of ‘15 had about $200,000 of volume-based incentive revenue. We moved from a quarterly to an annual volume-based incentive calculation in 2016 under our debit card brand agreement and we've elected not to record any accrual for volume-based incentive revenue thus far in 2016 due to uncertainty as to where the year will end up. As detailed on page 14, our non-interest expenses increased to $22.5 million in the third quarter of 2016 as compared to $21.9 million in the year-ago quarter and $20.9 million in the second quarter of 2016. The $1.6 million linked quarter increase in non-interest expense was concentrated in two areas, compensation and employee benefits and credit related costs. Compensation and employee benefits increased $1 million on a linked quarter basis. Compensation increased about $380,000, about one-third of which was due to one additional work day in the third quarter of 2016 and the balance of which was primarily attributable to increased compensation in several lending areas particularly mortgage lending due to higher loan volumes and increased overtime. Performance based compensation increased about $490,000, due to a higher accrual for our management incentive plan. Through the first six months of 2016, we are accruing at a level based on 75% attainment of our target goals. Due to our further improved financial metrics through the first nine months of 2016, the incentive accrual was increased to a level equating to attainment of just over 100% of our target goals. Finally, payroll taxes and employee benefits increased about $160,000 due to increased healthcare insurance costs and increased employee training costs. Collectively net gain or loss on other real estate, provision for loss reimbursement on sold loans, and costs related to unfunded lending commitments increased by about $600,000 on a linked quarter basis. In particular, we swung from a $159,000 net gain on the sale of other real estate in the second quarter of 2016 to a $263,000 net loss in the third quarter of 2016 representing an adverse change of $422,000. We recorded a $360,000 write-down on a group of commercial ORE properties in the third quarter of 2016 based on the result of an auction subsequent to quarter-end. The good news is that we expect to close on the sale of these commercial ORE properties prior to year-end. These properties had a remaining netbook balance of approximately $3 million at September 30, 2016 representing about 60% of our total quarter-end ORE balance. I will have comments on our outlook for non-interest expenses for the remainder of 2016 later in my presentation. Page 15 provides an overview of our investments at September 30, 2016. 30% of the portfolio is variable rate and much of the fixed rate portion of the portfolio is in maturities of five years or less. The estimated average duration of the portfolio is about 2.1 years with the weighted average tax equivalent book yield of 2.18% at September 30, 2016. This compares to an estimated average duration of two years and a weighted average tax equivalent book yield of 1.71% at September 30, 2015. So, we have been able to move the yield up by about 47 basis points while keeping the duration of the portfolio at about two years. Page 16 provides data on non-performing loans, other real estate non-performing assets, and early stage delinquencies. We made further progress on improving asset quality. Non-performing loans declined by 4.1% during the third quarter of ‘16 and were down to 0.62% of total assets at quarter-end. Moving on to page 17. We recorded a credit provision for loan losses of approximately $200,000 in both the third quarters of 2016 and 2015. The allowance for loan losses totaled $22 million or 1.37% of portfolio loans at September 30, 2016. Page 18 provides some additional asset quality data including information on new loan defaults and on classified assets. New loan defaults totaled $3.1 million in the third quarter of 2016 and stand at $7.6 million for the first nine months of 2016. Page 19 provides information on our TDR portfolio that totaled $80.7 million at September 30, 2016. This portfolio continues to perform very well with 90% of these loans being current at September 30, 2016. On page 20, we provide a summary of our actual year-to-date 2016 performance as compared to our original outlook. Overall, we believe our performance in the third quarter and first nine months of 2016 was generally in line with or somewhat better than our original outlook. We continue to target high single-digit percentage growth for loans as we move forward in 2016. For the first nine months of 2016, our adjusted annualized net portfolio loan growth was 6.8%. We indicated an expectation for mid-single digit growth in net interest income for 2016 and we believe we remain on track to achieve this through general stability in our net interest margin and the aforementioned loan growth. Asset quality metrics generally improved across the board in the third quarter of 2016, which led to the credit provision that I discussed previously. As we look ahead to the remainder of 2016, the level of loan net charge-offs, loan defaults, watch credits, and the performance of the TDR portfolio will be the key factors influencing our provision levels. We are optimistic that our asset quality metrics will continue to be stable or improve. Non-interest income of $11.7 million in the third quarter of 2016 was well above our expected range of $9.5 million to $10 million. As I already mentioned, the strength of our mortgage banking operations significantly benefitted our third quarter 2016 results. We expect fourth quarter non-interest income to move back into our expected range due primarily to a more normalized level of gains on mortgage loans. However, on a longer-term basis, we are focused on significantly expanding the scale of our mortgage banking operations. We expect this expansion to drive net interest income, gains on mortgage loans, and mortgage loan servicing income higher in the future. Non-interest expenses of $22.5 million in the third quarter of 2016 were above the higher end of our forecasted range and certainly higher than the levels I outlined in last quarter's call. This was due to the increases in compensation and benefits and in certain credit costs that I outlined earlier. We expect fourth quarter non-interest expenses to move down to the higher end of the forecasted range. We expect to be at the higher end of the forecasted range largely due to expenses associated with the addition of mortgage loan originators and support staff over the next few months as we expand our mortgage banking operations. Our effective income tax rate of 31.9% in the third quarter of 2016 was in line with our forecast. That concludes my prepared remarks and I would now like to turn the call back over to Brad.

Thanks, Rob. As we look ahead to the remainder of 2016 and beyond, we are focused on building on the momentum generated in the first nine months of 2016. We are pleased to report solid results year-to-date in 2016 with growth in earnings and earnings per share as compared to last year. The improvement is directly related to the successful execution of our strategy to migrate earning assets from lower yielding investments to higher yielding loans in order to grow net interest income. Our quarterly return on average assets was 1.02% compared to 0.86% for the same quarter one year ago. In our four quarter moving average, return on assets improved to 0.92% from 0.8% one year ago. Our quarterly return on average common shareholders' equity was 10.2% compared to 7.84% for the same quarter one year ago and our four quarter moving average return on equity improved to 9.09% from 7.24% one year ago. Our management team recognizes we need to continue to grow revenue and control expenses, stay disciplined on credit, and leverage our team's risk management best practices as we work towards sustained performance milestones of 1% or better return on assets and 10% or better return on equity. At this point, we would now like to open up the call for questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Damon DelMonte of KBW. Please go ahead.

My first question is could you just revisit the discussion on loan growth for the quarter and then kind of just take us back to the adjusted commercial loans and what happened there?

If you recall at the end of the second quarter, we had an inadvertent commercial overdraft of $6.7 million in a commercial deposit account. Overdrafts get reclassified from deposits to loans. So, included in the balance of commercial loans at June 30 was that $6.7 million that get cleared the next day. So really what we're saying is the balance at the end of June really should have been more along the lines of $785 million and then if you compare it to where it is at the end of September, basically on an adjusted basis commercial loans are flat. Now having said that, our pipeline is very strong and we expect good fourth quarter loan growth. So, it's really just some timing of closings and a couple of unplanned payoffs, but we expect good fourth quarter growth on commercial loans. Brad, I don't know if you want to add anything.

And then with regards to kind of the commentary, Rob, at the end of year and your part about the expansion of the mortgage banking operations; could you talk a little bit about that? Are you adding new vendors in your current footprint or are you looking to expand out of your footprint? What's the plan of attack for that?

Our primary focus is Southeast Michigan. We feel like that's the market that holds the greatest benefit or potential for us. If you look at where the primary focus of our originations historically has been, it's really been outside of Southeast Michigan. And if you look at the population of Michigan within sort of the five counties representing a lot of Southeast Michigan, you have half the population of about 4.5 million and we have branches there, we just haven't had a lot of traction at growing our mortgage banking operations. So, that's really our focus and we think it does a number of things. One is I know as you can appreciate, mortgage banking is a scaled business so we feel we can get more efficient by getting bigger and right now our sort of historic run rate has been more in the $350 million to $400 million a year level of mortgage loan originations and we're hoping over time to significantly expand that, ideally double that type of volume. The second thing is we've sort of been flat on our mortgage servicing at about $1.65 billion and again that's a business that lends itself to economies of scale. And we feel with that growth in mortgage origination, we could start to grow our mortgage servicing asset and mortgage servicing operations as well and contribute additional revenue in the mortgage servicing line. And then finally, we think where we see the potential growth in these markets, we're going to get more portfolio loan product. And as Brad mentioned, we would look to accelerate our organic growth rate in mortgage loans and contribute to an accelerated rate of growth of net interest income. So, it's those three items that we're really focused in on and so it's a combination of adding commission based loan originators and related support staff with the primary focus being Southeast Michigan. Brad, I don't know if you want to add anything.

My last question is did you guys say that you acquired or you purchased some residential mortgage loans this quarter?

Yes, we had a small purchase of about $15 million of seasoned 30-year and 15-year product. As Brad mentioned, we had done about a $30 some odd million package in the fourth quarter of last year. That was all jumbo product and all located in Michigan. This was non-jumbo product. So, it was just conforming product that was seasoned roughly about three years and it was just an opportunity with another financial institution located in Southwest Michigan to buy some what we consider to be very high quality loans and they were looking at in terms of their balance sheet to do a small sale. So, it just came together in the third quarter.

Our next question comes from Matthew Forgotson of Sandler O'Neill & Partners. Please go ahead.

I was just wondering if you could remind us about the dynamic. You got a really strong mortgage origination capability right now and Brad, I think you alluded to this in your comments just forgive me if I missed it. But why would you go out and purchase residential mortgage loans from a third-party as opposed to just booking what's coming to you through your own organic channel?

So, historically everything that we originate today is predominantly 15-year and 30-year fixed rate mortgages and really for balance sheet management purposes and risk management purposes, we made the decision to sell those types of loans. So in late 2015 and then here again in the third quarter of 2016, we were successful in looking for these bulk loan purchases that would help us move the needle on the loan to deposit ratio and so it's really on top of all of our in-house originations. And sort of dovetailing on Rob's comments earlier, I'm hopeful that as we expand our efforts in the Southeast Michigan market that there will be more opportunity for jumbo mortgage loans and that will actually facilitate us to grow that category on balance sheet and then we won't necessarily have to go and seek these bulk purchases.

Matt, I'd just add one other thing. The other benefit is with the sale, we get the gain on sale and we still retain the servicing and the customer relationship. So, that's a reason to continue to sell most of our conforming fixed rate product and then by buying, we still get the portfolio loan growth and we're able to select very carefully from a credit perspective what we're adding to the balance sheet. So, we're not giving up the gain on sale yet. We're still getting growth in earning assets so it kind of helps us on both channels.

Okay. And then shifting over to loan growth, I know you're saying within the commercial segment you're expecting significant growth in the fourth quarter. I believe in the past that the indirect desk has slowed a little bit in the fourth quarter of the year. So, what are your expectations as you marry kind of strong pullthrough from the commercial channel with slower seasonal growth out of indirect in the fourth quarter? Should we expect loan growth to accelerate linked quarter or do you think it steps down, but still remains in that mid-single digit range annualized?

I would think in the commercial category, I'd be disappointed if we weren't up. I think we'll probably be relative flat on consumer and we may actually be a little up on mortgage.

But I think when you mix it altogether, Matt, that we'd still expect even with consumer installment being somewhat flat to still be in that mid-single digit overall loan growth and end the year in the mid to high single-digit growth because we were at 6.8% adjusted through first nine months and not really fall off much from that level.

And then lastly just a high level question. The way I've been thinking about your expense base, the way you've been talking about it is kind of that path to the 1% ROA required your expenses to be at or below that $21 million level. Is that target still in place or are you revisiting it in light of the buildout within the mortgage segment?

I think that we're going to continue to work real hard and control expenses and I'd like to see us moving down to that $21 million or less. However, it could be a trade-off, maybe we give a little bit on the expense to further grow on the non-interest income side. So, we're still targeting the $21 million per quarter on a longer-term basis. But I think the other thing there too, Matthew, is we are just in the early stages or middle stages of our budgeting process for 2017 and obviously we roll these up quarterly. But I think on an annual basis, the budget enables you, that process enables you to sort of start from scratch and see where things are going to fall out. So, I think in the next several weeks obviously during this quarter, we'll have a better feel for sort of what that longer-term run rate's going to be on non-interest expense.

Matt, the other thing I'd add on that with the focus on the expansion of the mortgage banking operations is a lot of those expenses end up getting deferred. So, your direct costs of origination which includes commissions paid to your loan originators which is probably your largest direct origination cost; those if the loan is sold, they get netted against gains and so they're sort of coming out of your expense area. And if the loan is put into the portfolio, then those direct origination costs get sort of set aside and amortized over the expected life of the loan. So, you don't necessarily get a one for one flowing through the expense side. So, that's why I don't think you necessarily get the kind of buildup that you might expect with adding a lot of personnel there. So, I think that's one positive note. We may see a quarter or so where we see some of the expenses. But because when someone comes aboard it might take 60, 90 days before they're out producing new mortgage loans so there might be a quarter or so where you do have some of the expense build. And that's partially why if you look at the one slide, I kind of said on compensation when you look at the fourth quarter, that is not going to go all the way back down to the $12 million where we were in the second quarter because we're going to probably have some expenses in the fourth quarter that relate to the growth of that mortgage banking operation yet we're not deferring them because we sort of got this start-up phase for call it 60 to 90 days. So, I guess the accounting a little bit on mortgage banking and selling loans kind of helps you because you're netting a decent amount of your costs against either gain on sale or they're getting capitalized on the balance sheet and amortized against the yield on the loans you're putting in the portfolio.

[Operator Instructions] Our next question comes from Brian Zabora of Hovde Group. Please go ahead.

A question on loan purchases. You talked about the bulk purchases that you made this quarter on the mortgage side. I was just curious if you think about making purchases via your CRE, your multi-family, in that area?

We've done participations with other lenders in our markets on the commercial side, both outgoing where we were the lead originator and incoming. I think that wouldn't necessarily be a focus unless there was some opportunity directly in our markets. Brad, I don't know if you want to add anything.

I'm not going to say no, but that's really not in our sweet spot. I think what we liked on the mortgage side obviously both these bulk purchases, the underlying collateral was all Michigan and so we felt like we were staying within our overall strategy of being a Michigan based community bank. When Rob talks about the participation side, really I think on our entire portfolio we have probably participated out sales as much as we participated in on purchases and that's more of just a risk management towards not so much an effort to grow the loan portfolio. Bottom line I think we like the growth that we're getting today and if for some reason it starts to level off, we'll look at different channels. But it's a good question, Brian.

And then just last question on that expansion of the mortgage group. I get the sense it sounds like it was going to be fairly near-term expansion where maybe the next couple months or over the next quarter or two that that expansion will be complete. Is that fair or could we see maybe you adding people throughout 2017?

I think it would be concentrated in the next couple of quarters, but I think longer term we would continue to look at opportunities to build the scale of it. Again we think it's a business that fits well with our community bank philosophy and we think it lends itself to economies of scale and lastly I would say I think we have a high level of confidence in mortgage banking. So I think we are good at servicing loans, I think we're good at originating loans, I think we're good at selling loans. So, it's something we feel we do well that fits with the community banking. We view the mortgage as sort of a core product for the consumer like the checking account so we also feel it's a good vehicle to expand our customer relationships.

This concludes our question-and-answer session. I'd like to turn the conference back over to Brad Kessel for closing remarks.

I would like to thank each of you for your interest in Independent Bank Corporation and for joining us on today's call. We wish everybody a great day.