NBT Bancorp - Q4 2023

Transcript

Operator (participant)

Good day, everyone, and welcome to the conference call covering NBT Bancorp's fQ4 and Full Year 2023 Financial Results. This call is being recorded and has been made accessible to the public in accordance with the SEC's Regulation FD. Corresponding presentation slides may be found on the company's website at nbtbancorp.com. Before the call begins, NBT's management would like to remind listeners that, as noted on slide 2, today's presentation may contain forward-looking statements as defined by the Securities and Exchange Commission. Actual results may differ from those projected. In addition, certain non-GAAP measures will be discussed. Reconciliations for those numbers are contained within the appendix of today's presentation. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this call is being recorded.

I would now like to turn the conference over to NBT Bancorp's President and Chief Executive Officer, John H. Watt, Jr., for the opening remarks. Mr. Watt, you're... Please begin.

John H. Watt, Jr. (President and CEO)

Good morning. Thank you, Norma, and thank you all for participating in this earnings call covering NBT Bancorp's Q4 and full year 2023 results. Joining me today are NBT's Chief Financial Officer, Scott Kingsley, our Chief Accounting Officer, Annette Burns, our Treasurer, Joe Ondesko, as well as our President of Retail Banking, Joe Stagliano. It was a very active quarter at NBT. While navigating the volatile interest rate environment, we observed that the consumer is still spending and that small businesses are still investing. At the same time, we continue to experience movement to a normalized pre-pandemic credit environment. I will note that the successful integration of our August acquisition of Salisbury Bancorp positions NBT well for growth in adjacent markets and for future strategic growth. Let me take a moment to highlight activity across our businesses.

First, our operating results include earnings per share of $0.72 for the Q4 and $3.23 for the year. Return on tangible equity was 15.78% for the full year, and the year-end tangible equity ratio grew 11% to 7.93%. Excluding the Salisbury acquisition, we achieved commercial and consumer loan growth of 4%. That growth was diverse with our core commercial lending, business banking, residential mortgage, and indirect auto businesses all participated. As noted, in 2023, we experienced a resilient consumer and business owner. Our indirect auto business had a productive quarter, with originations of over $141 million and $575 million for the full year. Small business originations were up 9% year over year. Credit quality at NBT is normalizing.

Although each of our core credit portfolios continues to perform at levels better than those we experienced prior to the pandemic, we have seen some migration into the criticized category in our commercial lending business from a historically low base. Like the rest of our industry, our cost of funds has risen as our customers continue to seek out higher-yielding deposit products. Our full cycle deposit beta at year-end was 28%. We continue to enjoy high account retention levels. Our funding sources are robust, and we have the headroom we need to continue to execute on our organic growth plans in 2024. Our fee-based businesses continued their solid performance in Q4 and for the full year. For the year, our combined benefits administration, wealth management, and insurance businesses generated revenues of almost $100 million.

Total non-interest income was 29% of total revenue for the full year. Activity along the Upstate New York CHIP Corridor was positive in Q4, with large public and private investments being announced. Most significantly, the Albany Nanotech Complex, called NY CREATES, received $10 billion in investment commitments from large semiconductor manufacturers and the federal government. The activity generated along the CHIP Corridor will drive long-term transformational economic growth across our core markets and promote long-term success at NBT. On Monday, our board approved a $0.32 dividend payable in March, which represents a 6.7% increase over the dividend paid in the Q1 of 2023. It's also notable that we marked 11 consecutive years of annual dividend increases in 2023.

Going into 2024, NBT is positioned with strong liquidity and capital levels, a diversified business mix, highly effective risk management practices, and an expanded team of experienced professionals. I will turn the call over to Scott and Annette to talk in greater detail about the outcomes associated with our financial performance for the Q4 and the full year. Following their remarks, we'll take your questions. Annette, over to you.

Annette L. Burns (SVP and Chief Accounting Officer)

Thank you, John, and good morning, everyone. Turning to the results overview page of our earnings presentation, our Q4 earnings per share were $0.64. Operating earnings per share were $0.72, which excludes $0.08 per share of acquisition expenses, securities gains, and an impairment of a minority interest equity investment we incurred in the quarter. The Q4 had the full impact of the Salisbury acquisition, which was completed in August 2023. The Q4 operating results were $0.14 and $0.12 lower than the Q4 of last year and linked Q3, respectively. We continued to experience increases in funding costs that have exceeded the improvements in earning asset yields, which have challenged net interest income growth.

Tangible book value per share of $21.72 at December 31, was up $1.33 per share from the end of the Q3 and up $1.07 from the Q4 of 2022. The next page shows trends in outstanding loans. Total loans were up $1.5 billion from the Q4 of 2022 and included $1.18 billion of loans acquired from Salisbury. Despite productive growth in our indirect auto, residential mortgage, and commercial real estate portfolios, quarter-end loans were down $17 million from the end of the Q3 and reflected lower commercial line utilization, the continued planned run-off of our other consumer loan portfolio, and principal amortization of our solar residential loans.

Q4 loan yields were up 11 basis points from the Q3 of 2023, reflective of continued higher new origination yields. Our total loan portfolio of $9.65 billion remains very well-diversified and is comprised of 52% commercial relationships and 48% consumer loans. On page six, total deposits of $11 billion were up $1.5 billion in 2023 and included $1.3 billion of deposits acquired from Salisbury. At the end of the Q4, deposits were down from the end of the Q3, as expected. Municipal deposits declined $225 million from the seasonally high Q3. Generally, in most of our markets, municipal tax collections are concentrated in the first and third quarters of each year.

In addition, following the industry-wide liquidity challenges, which arose near the end of the Q1 of 2023, the company proactively added over $250 million of incremental wholesale deposits. NBT's liquidity profile has continued to remain very stable, and as such, in the Q4, we allowed $132 million of those balances to contractually run off. The company continued to experience remixing from its no interest and low interest checking and savings accounts into higher-yielding money market and time deposit instruments again in the Q4. Our quarterly cost of total deposits increased to 151 basis points, compared to 118 basis points in the linked Q3, and total cost of funds increased 22 basis points from the prior quarter.

We have included a summary of our deposit mix by type, which illustrates the diversification and deep granularity of our customer base. The next slide looks at the detailed changes in our net interest income and margin. The Q4 net interest income was $4.3 million above the linked third quarter results, primarily from the full quarter impact of the Salisbury acquisition, which was partially offset by a six basis point decline in our net interest margin. During most of the Q4, NBT maintained a Fed Funds sold position, which created incremental interest income given robust short-term yields. Although we experienced a slower rate of growth in cost of funds late in the Q4, we continue to expect modest additional funding pressures to persist in 2024. I will now turn it over to Scott to review the rest of the results.

Scott A. Kingsley (Executive VP and CFO)

Thank you, Annette, and good morning, everyone. The trends in non-interest income are summarized on page 8. Excluding securities gains, our fee income was up $3.7 million, or 11%, from the Q4 of 2022 to $38 million and down 6% from the linked Q3, as expected. Revenues from our retirement plan administration business were down $1.6 million from the Q3 and included certain actuarial and compliance services, which are seasonally concentrated in the Q3. Our insurance agency revenues were $700,000 lower than the prior quarter, reflecting higher commercial policy renewals in the Q3. The Q4 wealth management services included a full quarter contribution from the Salisbury Trust and advisory businesses, but comparatively offset by certain Q3 tax preparation fees.

The diversification of our revenue generation sources continues to be a core strength of the company. The annualized run rate of our combined third and Q4 non-interest income generation was over $155 million. Turning now to non-interest expense, our total operating expenses, excluding acquisition expenses and an impairment charge, were $87.7 million for the quarter, which was $5 million or 6% above the linked quarter and 11.7% above the Q4 of 2022. Quarter-over-quarter increases in salaries and employee benefits, technology services, occupancy, advertising, and FDIC assessment costs included a full quarter of Salisbury expenses. As indicated in our earnings release, we did record a full $4.8 million impairment to our minority interest investment in a provider of financial and technology services to residential solar equipment installers.

Although we believe their technology platform and broad network of installers has demonstrated market acceptance, significant challenges and constraints in capital markets has resulted in uncertainties related to their ability to continue ongoing operations. On the next slide, we provide an overview of key asset quality metrics. We recorded a loan loss provision expense of $5.1 million in the Q4, which was $1.2 million, or 2 cents a share, higher than the $3.9 million provision recorded in the linked Q3, excluding the Salisbury day one acquisition-related provision recorded in the Q3. Net charge-offs were 22 basis points in the Q4 of 2023, compared to 18 basis points in the prior quarter.

Reserve coverage of 1.19% of total loans was consistent with the linked Q3 and 5 basis points lower than the Q4 of 2022, reflective of continued portfolio mix changes. We believe that charge-off activity will continue to return to more historical norms, and expected balance sheet growth and continued mix changes will likely be the drivers of future provisioning needs. Non-performing loans increased $13.6 million from the end of the Q3, attributable to a single diversified multi-tenant commercial real estate development relationship in which we are a participant, which was placed into non-accrual status during the quarter. The relationship is being actively managed and recent appraised values continue to support its carrying value. As I wrap up prepared remarks, some closing thoughts.

The market volatility and uncertainty that arose in early March accelerated our funding cost pressures, which has resulted in lower net interest margins. Our well-balanced organic loan growth, constructive results from our recurring fee income lines and solid credit quality outcomes have allowed us to productively offset a portion of the challenges on net interest income generation. Lastly, our post-acquisition capital levels continue to put us in a favorable position as we consider future growth and deployment opportunities. With that, we're happy to answer any questions you may have at this time. Norma?

Operator (participant)

Thank you. As a reminder, to ask a question, you'll need to press star one one on your telephone. To withdraw your question, please press star one one again. Please wait for your name to be announced. Please stand by while we compile the Q&A roster. One moment for our first question, please. Our first question comes from the line of Steve Moss with Raymond James. Your line is now open.

Steve Moss (Managing Director)

Hi, good morning.

Scott A. Kingsley (Executive VP and CFO)

Morning, Steve.

John H. Watt, Jr. (President and CEO)

Morning, Steve.

Steve Moss (Managing Director)

Maybe just starting off here with, on the funding side of the equation, you know, just curious to, you know, where deposit costs ended up—ended the quarter and just kind of how you're thinking about the first half of funding costs ahead of potential rate hikes here.

Scott A. Kingsley (Executive VP and CFO)

Yeah. So thanks, Steve. You know, pertinent question, obviously. We ended the year at about a 155 total deposit cost. You know, we, we've watched that scoot up a little bit here as we've started the new year, but not a lot. You know, the pressure that seems more pronounced through the mid-October, mid-November time frame appears to be dissipating. And, you know, so we're holding much closer to stability, both from a rate standpoint and a balances standpoint.

Steve Moss (Managing Director)

Okay. Got it. And then just as we think about rate cuts here, you know, if we get, you know, Fed starts cutting rates, just kind of curious as to, you know, how you're thinking about the margin and, you know, maybe how quickly you might pivot on, on the funding costs going forward?

Scott A. Kingsley (Executive VP and CFO)

Again, Steve, really, you know, the important thing for us, you know, from a pricing standpoint, you know, we have-- on a forward look, we've presumed that there are Fed rate declines in 2024. You know, the forward curve suggests 6 or 7, dot plot suggests half of that. You know, we're probably forecasting somewhere in the middle. So for us, you know, if those rate cuts start, it gives us an opportunity to have a dialogue with our customers relative to lowering funding costs. We can get out in front of that on time deposits. You know, so for expiring time deposits, short-term CDs, we can set different rates upon expiration, and we're in the process of doing that.

The opportunity for us to lower costs truly comes from our money market portfolio. You know, a little over $3 billion of funds that have a high 3% cost attached to them currently, that once we start to get some momentum on the downside, that's the group that we can discretionarily start to move and simultaneously have really logical discussions with our customer.

Steve Moss (Managing Director)

No, that's helpful, Scott. Appreciate that. And on the lending side, just curious where, you know, how you're feeling about the loan pipeline and, you know, the thoughts around the outlook for growth here. I realize, you know, it looks like the solar piece is gonna be in a bit of a runoff mode, so that might be a little bit of a headwind. But just kind of curious on how to think about all that.

John H. Watt, Jr. (President and CEO)

Steve, here, here's how we're thinking about the year. Mid-single-digit growth still very achievable. The year-over-year pipelines slightly lower going into first Q, but traditionally in the markets we serve, first Q is lower than the rest of the year, so we would expect they'll pick up. On the business banking side, you know, they, they had a really strong year last year. That we fully expect that's gonna carry over into 2024. So for the core business, mid-single digits is how we're thinking about it.

Steve Moss (Managing Director)

... Okay, great. Thank you very much. I appreciate all the color.

Scott A. Kingsley (Executive VP and CFO)

Thanks, Steve. Appreciate the question.

Operator (participant)

Thank you. One moment for our next question, please. Our next question comes from the line of Chris O'Connell with KBW. Your line is now open.

Chris O'Connell (Director of Equity Research)

Hey, good morning, and congratulations-

Scott A. Kingsley (Executive VP and CFO)

Good morning, Chris.

Chris O'Connell (Director of Equity Research)

John, on the retirement announcement, and Scott, Annette, and Joe on the promotions.

Scott A. Kingsley (Executive VP and CFO)

Thank you, Chris.

Operator (participant)

Thanks, Chris.

Chris O'Connell (Director of Equity Research)

So just wanted to start off on the fee side. I know that you guys mentioned, you know, some seasonality that occurred in the Q4 on the insurance and benefit plan. Just hoping to get, you know, where you think those could rebound to as a starting point for 1Q.

Annette L. Burns (SVP and Chief Accounting Officer)

So we like to think about 2024's run rate by starting with combining the third and Q4 averages, third and Q4 together as kind of the base run rate. And then kind of think about a mid-single-digit growth rate off of that base, and that's kinda how we're thinking about the 2024 run rate.

Chris O'Connell (Director of Equity Research)

Okay, got it. And then as far as the expenses go, I mean, I know that there was some cleanup and some expenses mentioned, you know, post the Salisbury acquisition, that brought some things up in the Q4. Can you just remind us as to, like, how much of that maybe comes out and, you know, whether there's some offsets and where we could start off the year on the expense side?

Scott A. Kingsley (Executive VP and CFO)

Sure, Chris, I'll take a run at that one. So yes, historically, and you know, similar to our Q4 this year, we're a little seasonally higher in operating expenses in the Q4. Some of that relates to, you know, finishing out certain initiatives. It was probably a little bit more pronounced this year, because some of the things that we were working on internally, you know, we put aside as we finished the Salisbury transaction.

A couple things to think about, you know, as it relates to customer retention and branding activities, those were a little higher for us in the Q4 than they would have been, otherwise, you know, because we were focused on the Salisbury customer as well, both from a retention standpoint and growing in some additional new markets that we previously had not had access to. So as we think about that quarter end, you know, $87.5-$88 million run rate, when we roll into the Q1, with the exception of reminding everyone again, you know, usually for us in the Q1, we pick up a couple cents a share, additional costs associated with payroll taxes in the Q1 and stock-based compensation.

We usually have another $0.01 per share in incremental seasonal utility costs. Yes, it has started to snow in Upstate New York, so you know, the plows are out and the heat is on. We also expect, Chris, a 2.5% merit change for our people, and we usually do that toward the tail end of the Q1, usually the month of March. So we'd expect that on a going-forward basis. You know, in terms of how we'll think about, you know, incremental hiring for the organization, given there are some headwinds relative to revenue generation, very opportunistic and structural support only.

Otherwise, we will be thinking about, you know, replacement of the folks that we need within our structure, but in terms of adding people to the organization, opportunistic and again, necessary structural adds.

Chris O'Connell (Director of Equity Research)

Great, that's helpful. And do you guys have an overall expense growth target, either ex or including Salisbury for the full year?

Scott A. Kingsley (Executive VP and CFO)

Yeah, you know, Chris, on a full year basis, probably have to come back to you with that one. I think if we looked at it from a growth off a Q4, full quarter, inclusion of Salisbury, you know, if we think about a 2.5% or so change on the salaries and benefits line, and then maybe something a little smaller than that for the rest of our non-operating expenses.

Chris O'Connell (Director of Equity Research)

Yep.

Scott A. Kingsley (Executive VP and CFO)

remembering that, you know, we think we got a full quarter worth of of Salisbury costs in there, and honestly, we think we got a full quarter worth of the cost savings that we thought we would get in the Salisbury acquisition.

Chris O'Connell (Director of Equity Research)

Great. And then on the seasonal muni decline, you know, given the environment and, you know, just how, how difficult it is, I mean, what's the confidence level that that volume is able to come back in, into the Q1 and rebound? And if so, do you think it'll come back in the same types of products, or will it be, you know, higher, higher yielding types of products?

Scott A. Kingsley (Executive VP and CFO)

Yeah. So Chris, a really good question. So I think as, as you know, we don't bank very, very large municipalities. You know, we, we, we tend to bank counties, towns, villages, school districts. So as, as tax collections start to roll in for them, we would expect that they would be using a product mix similar to what they had, you know, in the second half of 2023. That being said, most treasury functions are very aware of interest-earning opportunities, whether it's on our balance sheet or someplace else. So I, I think that goes across our base, not even just the municipal base. So I think we're always wary of that.

But that being said, I think the pattern of utilization of how organizations have to cash flow themselves is likely to stay very similar. So, you know, after people get done making their real estate payments, you know, toward the end of January, we would expect those levels to kind of move back to where we were in the Q4. As it relates to the commercial side of our customer base, and maybe even the consumer side, we think we saw instances of people using their own money to pay back their debt obligations in the Q4. You know, so people just look, thinking about balance sheet efficiency, despite the fact that there were still short-term yield opportunities out there that were so much more robust than they enjoyed for the last 5 or 10 years.

But I think, again, it's just a line of, you know, how do our customers handle their treasury efficiency? And obviously, we provide tools for them to do that and give them good advice along the lines of what's the most productive thing for them to do. As the cycle starts to evolve and maybe we get into a lower rate cycle, I think that's why we can actually go to our customer and say, "You know what's happening in the market," because we've been having so much dialogue with them about what's happening on the way up.

Chris O'Connell (Director of Equity Research)

Great, really helpful. And last one for me. I know you guys give the, you know, fixed and floating breakdown of loans. I think it's 39% adjustable or floating. But do you have the percentage of loans that would immediately reprice after a Fed Funds cut?

Scott A. Kingsley (Executive VP and CFO)

Sure. I think in, you know, for modeling purposes, I'd use $2 billion of, of loans that would reprice immediately with a change in Fed Funds, which presumes an immediate and correlation down in SOFR, you know, in term SOFR. So it's mostly commercial loans for us. There's probably some, you know, home equity type instruments that are out there, but for us, relatively small.

Chris O'Connell (Director of Equity Research)

Great. Thanks for taking my questions.

Scott A. Kingsley (Executive VP and CFO)

Appreciate it, Chris. Thank you.

John H. Watt, Jr. (President and CEO)

Thanks, Chris.

Operator (participant)

Thank you. As a reminder, to ask a question, you'll need to press star one one on your telephone. One moment for our next question. Our next question comes from Alex Twerdahl from Piper Sandler. Your line is now open.

Alex Twerdahl (Managing Director of Equity Research)

Hey, good morning, all.

Scott A. Kingsley (Executive VP and CFO)

Morning, Alex.

John H. Watt, Jr. (President and CEO)

Good morning.

Alex Twerdahl (Managing Director of Equity Research)

Just back to the, sort of the NIM, the NIM conversation. I appreciate all the color you've given so far, but, you know, maybe just kind of your thoughts for the NIM in the first couple of quarters of the year, assuming we don't get any rate cuts until kind of that May timeframe, which I think is what the forward curve says today.

Scott A. Kingsley (Executive VP and CFO)

Yeah. So Alex, I think if we were framing it this way, we would say that we have, I think, a much better chance of thinking that our improvement in asset yields with the repricing of new product has a chance to catch back up to where the funding cost increases are. Whether we get there in the Q1 or not, you know, jury's still out on that. But I think that, you know, the fact that we've been losing 6-9 basis points a quarter on that net change, in other words, asset yields have been falling, you know, new asset yields just haven't kept up with where funding needs have needed to be. I think we've reached a point where stability could be the outcome.

So if we were handicapping, you know, net interest margin, you know, somewhere around where we finished in the Q4, you know, plus or minus 3 or 4 basis points.

Alex Twerdahl (Managing Director of Equity Research)

Okay. And then, you know, just kind of given the commentary on deposits, and, you know, sort of trying to reprice them as quickly as possible, I guess, you know, given we get, like, 1 or 2 rate cuts in May, you know, for like the third, Q4 of the year, do you, do you think you have enough pricing power on the deposits to actually offset that $2 billion of loans that reprice and all the cash that would reprice lower?

Scott A. Kingsley (Executive VP and CFO)

I think if we have an orderly step down at 25 basis points a quarter or at 25 basis points in, you know, 1 or 2 or 3 times, we could be close to that, Alex. I think if we get 6 or 7 cuts and they go much faster, it's much harder to accomplish that, you know, because now you're out there, you know, multiple times with your deposit customer changing that outcome. Remember, we don't have to have any dialogue with our variable rate, asset customer. They just get the new rate. So I think it just takes more, shepherding in the field.

Alex Twerdahl (Managing Director of Equity Research)

Okay. And, and maybe just a little bit of commentary on sort of the loan growth and sort of what you're seeing out there. You know, is lower loan growth this quarter more reflective of a little bit more competition coming in, saying, you know, rates are going to go down, we'll give you a better rate, and you guys not chasing after that? Or is it just less demand in the market, or, you know, I guess, sort of what do you think sort of happened in the Q4 that kind of kept that, overall loan growth subdued?

John H. Watt, Jr. (President and CEO)

A couple of things come to mind, Alex. You know, I've been focusing on line of credit usage, and it's historically low, and Scott indicated, and I agree that smart customers are using their excess cash to pay down debt. So we see that. You know, eventually, that's going to come back. You know, we had a couple of payoffs in Q4 that we did not anticipate. You know, I think that's episodic, not added to the loan growth story in Q4. You know, I say this all the time, it's brutally competitive out there all the time. So do we see pricing challenges on the loan side that are any different than they have been forever?

No, but it's brutally competitive, and from a risk management perspective, we're very thoughtful about what we want to do and what we don't want to do, and what other products and services we can also offer our customer at the same time to ensure a robust profitability with all of our relationships. So, you know, mid-single digit for NBT in these markets, you know, that's not an unusual year, sometimes a little higher than that. But what I do know is the team that is on the ground across all seven states is ready to and has identified the opportunities that are attractive to us, and we'll be there at the table when they're offered.

Alex Twerdahl (Managing Director of Equity Research)

... Got it. That's helpful. I mean, would you say that spreads in general, you know, with, with the five-year coming down on commercial deals, has, has the pricing kind of remained sort of sticky, even though, even though the five years come down, or is it, you know, are customers saying, "Wait, wait a second, you know, rates have come down. You guys got to do a little bit better?

Scott A. Kingsley (Executive VP and CFO)

Yeah. You know, Alex, it's a great question. In our customer's mind, right, we, you know, we've spent the last 15 years with the customer being coached into a spread off the 5, 3 or 7-year point of the curve, the midpoint of the curve. And what did we have to do during part of last year is we had to say, we're not sure we're capable of actually living with that outcome for certain of our credits, because of where short-term pricing was, from a funding standpoint. So, you know, and remind— you know, sometimes we have to remind ourselves, higher for longer was the tenant out there through the first of December.

It wasn't until the first of December where people said, "Oh, we're going to have this naturally, you know, substantial walk down in rates." So if you think about what that was, even if we were making commitments under that premise, those loans probably haven't closed in anyways.

Alex Twerdahl (Managing Director of Equity Research)

Got it. And then just, last one for me, just, remaining outlook for the Springstone wind down in terms of charge-offs. As that portfolio gets lower, should charge-offs go down, or you think they stay in that $2.5-$3 million a quarter range they've been for the last year or so?

Scott A. Kingsley (Executive VP and CFO)

I think we probably expect a couple more quarters and similar to what we incurred in the Q4. But you're right, as the asset numbers go down, you know, hopefully, the amount of things that we end up charging off keeps coming down with it. Needless to say, you're at the back end or at the tail end of that portfolio, so people that have not extinguished their instruments are probably, you know, have some additional credit constraints that maybe some of our, you know, broad section customers do not have. So, you know, we think by the time we get to the end of the year, that will be a subject matter we're not spending a lot of time talking about anyways.

Alex Twerdahl (Managing Director of Equity Research)

Great. Thanks for taking all my questions.

John H. Watt, Jr. (President and CEO)

Thanks, Alex.

Operator (participant)

Thank you. I'm not showing any further questions at this time. I'll turn the call back over to Mr. John Watt for closing remarks.

John H. Watt, Jr. (President and CEO)

Thank you, Norma, and thank you all for your interest in NBT, and we appreciate the opportunity to talk about our story in 2023, 4Q and going forward. Look forward to having the same opportunity in April. Please all have a good day. Thanks.

Operator (participant)

This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day!