Below is transcript of the Community Bank System, Inc. (NYSE:CBU)’s Fourth Quarter and Year End 2014 Earnings Conference Call, held on January 22, 2015, at 11:00 a.m. EST. Forward Management, Pdt Partners and Tudor Investment Corp was among Community Bank System, Inc. (NYSE:CBU) shareholders at the end of the third quarter.
Community Bank System, Inc. (NYSE:CBU) is a single bank holding company. The Company with its wholly own subsidiaries includes Community Bank, N.A. (CBNA), Benefit Plans Administrative Services, Inc., CFSI Closeout Corp., First of Jermyn Realty Company, Inc. and Town & Country Agency LLC. The Company operates in three segments: banking, employee benefit services and wealth management services.
Company Representatives:
Mark Tryniski – President & Chief Executive Officer
Scott Kingsley – Executive Vice President & Chief Financial Officer.
Analysts:
Alexander Twerdahl – Sandler O’Neill
Collyn Gilbert – KBW
Matthew Breese – Sterne Agee.
Operator
Please stand by, we’re about to begin. Welcome to the Community Bank System Fourth Quarter and Year End 2014 Earnings Conference Call. Please note that this presentation contains forward-looking statements within the provisions of the Private Securities Litigation Reform Act of 1995 that are based on current expectations, estimates and projections about the industry, markets and economic environment, in which the Company operates. Such statements involve risks and uncertainties that could cause actual results to differ materially from the results discussed in these statements. These risks are detailed in the Company’s Annual Report and form 10-K filed with the Securities and Exchange Commission. Today’s call presenters are Mark Tryniski, President and Chief Executive Officer; and Scott Kingsley, Executive Vice President and Chief Financial Officer. Gentlemen, you may begin.
Mark Tryniski – President & Chief Executive Officer
Thank you, Jennifer. Good morning and thank you all for joining our fourth quarter and year end conference call. The quarter was a good one and above as we expected with EPS of 6% over 2013. Margin was holding in, positive but modest loan growth with particular strength in business lending and 6% growth in core non-interest income.
Overall was a good and steady and clean quarter. With respect to full year 2014 it was the most productive year in the company’s history including record earnings per share which were up 9% over 2013, loan growth across all portfolios were $140 million, expect their home equity which was down slightly.
Core deposit growth of over a $190 million, 7% growth in banking fee income, revenue growth of 12% from our benefits administration and wealth management businesses with pretax earnings up 36%. Lower credit costs, improvement in our operating expense efficiency from 59.3% to 57.9%. Both in the tier 1 capital ratio from 9.29% to 9.96% and we increased the dividend for the 22nd consecutive year.
Looking ahead to 2015 we have very good operating momentum much of which is a result of the progress in growth initiatives in the past two years. We also have right now the best balance sheet we’ve ever had in terms of asset mix, funding, credit quality and capital. Our capital accumulation over the past several years has been considerable which creates particularly favorable opportunity. We are tremendously well positioned as we enter 2015 and we’ll be disciplined and work hard to deploy capital to continue to grow earnings and grow dividends for the benefit of our shareholders. Scott.
Scott Kingsley – Executive Vice President & Chief Financial Officer
Thank you, Mark, and good morning everyone. As Mark mentioned, the fourth quarter of 2014 was a very strong operating quarter for us, but the year over year operating improvement trends consistent with those generated in the first three quarters of the year. As a reminder, for comparative purposes, our acquisition of eight former Bank of America branches in Northeast Pennsylvania was completed in mid-December 2013.
I’ll first discuss some balance sheet items. Average earning assets of $6.69 billion for the fourth quarter were up less than one half of 1% from the third quarter of 2014, and were up 1.6% from the fourth quarter of 2013. However, all of the growth in earning assets was loans, a very positive mixed development, meaning that average loans grew organically $154 million or 3.8%.
Average deposits were up 5.0% from the fourth quarter of last year, principally from the branch acquisition completed last December. The multiyear trends away from timed deposits and into core checking, savings and money market accounts, continued in 2014, resulting in a further decline in overall funding costs.
Outstandings in our business lending portfolio were almost 1% higher than the end of the third quarter a positive trend in year of modest net growth, but consistent with our market demand characteristics. Asset quality results in this portfolio continue to be stable and favorable to peers with 2014 net charge-offs of under 10 basis points of average loans.
Our total consumer real estate portfolios of $1.96 billion comprised of $1.61 billion of consumer mortgages, and $342 million of home equity instruments, were also up almost 1% on a linked quarter basis. We continue to retain in portfolio most of our short and mid-duration mortgage production, while selling secondary eligible 30 year instruments. Asset quality results continue to be very favorable in these portfolios, with total net charge-offs in 2014 of just 8 basis points of average loans.
Our consumer indirect portfolio of $834 million was down $8 million from the end of the third quarter in line with seasonal demand characteristics. Despite improving new car sales, used car valuations where the largest majority of our lending is concentrated, continued to be stable and favorable. 2014 net charge-offs in this portfolio were 38 basis points of average loans, although we consider it very productive. With our continued bias toward A&B paper grades and very competitive market conditions in this asset class, yields have continued to trend lower over the last several quarters. We have continued to report very favorable net charge-off results with 2014 results at just 0.15% of total loans being of stellar performance.
Non-performing loans comprised of both legacy and acquired loans, ended the fourth quarter at $23.8 million or 0.56% of total loans. Our reserves for loan losses represent 1.14% of our legacy loans and 1.07% of total outstandings and based on the trailing four quarter’s results, represent over seven years of annualized net charge-offs. As of December 31st, our investment portfolio stood at $2.51 billion and was comprised of $277 million of U.S. agency and agency backed mortgage obligations or 11% of the total, $672 million of municipal bonds or 27%, and $1.5 billion of U.S. treasury securities or 60% of the total. The remaining 2% was incorporate debt securities. The portfolio contains net unrealized gains of $75 million as of year end.
Our capital levels in the fourth quarter of 2014 continued to grow. The tier 1 leverage ratio rose to 9.96% at fourth quarter end, and tangible equity to net tangible assets ended December at 8.92%. As mentioned previously these higher capital levels and our strong operating income generation allowed us to again raise our quarterly dividend to shareholders in 2014 to $0.30 per quarter, or 7.1% increase. Tangible book value per share increased to $15.63 per share at quarter end, and includes $35.8 million of deferred tax liabilities generated from tax deductible goodwill or $0.88 per share.
Shifting now to the income statement, our reported net interest margin for the fourth quarter was 3.89%, which was even with the third quarter of this year and up one basis point in the fourth quarter of 2014. Consistent with historical results the second and fourth quarters of each year include our semi-annual dividend from the Federal Reserve Bank of approximately a half a million dollars, which adds three basis points of net interest margins to fourth quarter results compared to the linked third quarter.
Proactive and disciplined management of deposit funding costs continue to have a positive effect on margin results, but have generally not been able to fully offset declining asset yields. Fourth quarter non-interest income was up 6% from last years fourth quarter excluding the $6.9 million of net losses incurred on sales of investment securities and debt extinguishments in last year’s fourth quarter. The company’s employee benefits, administration and consulting businesses posted a 9% increase in revenues from new customer additions, favorable equity market conditions, and additional service offerings.
Our wealth management group also generated 9% revenue improvement from last year’s fourth quarter, and included solid organic growth in trust and asset advisory services, while also benefiting from favorable market conditions. Seasonally, our fourth quarter revenues from banking non-interest income sources were down slightly from the levels reported in the third quarter, but were 2.9% higher than the fourth quarter of 2014. Consistent with prior years, the third quarter included the annual distribution from our participation in certain pools, retail and insurance programs which approximated $900,000 or $1.05 cents per share this year.
Quarterly operating expenses of $56.7 million increased $1.5 million or 2.7% over the fourth quarter of 2013 excluding acquisition costs and included the operating cost associated with the additional branches acquired in December 2013.
Merit based personnel cost increases in 2014 were partially offset by lower retirement planning costs related to the combination of strong plan asset performance and slightly higher pension discount rates. Fourth quarter salaries and benefits costs were consistent with the third quarter of this year reflective of equivalent number of payroll days in each quarter.
Seasonally, as expected, our facilities related costs in the fourth quarter began to tickup from the warmer months of the third quarter but were still almost $1.5 cents per share lower than the winter dominated first quarter of this year. In addition, we did record approximately $300,000 of expenses in the fourth quarter related to certain branch efficiency initiatives.
Our effective tax rate in the fourth quarter of 2014 was 28.8% versus 28.2% in last year’s fourth quarter, on a full year basis our effective tax rate was 29.6% in 2014 up from 29.0% in 2013. We continue to expect net interest margin challenges going forward into 2015 as most of our existing assets are still being replaced by assets with modestly lower yields.
Our funding mix and costs are at very favorable levels today, from which we do not expect significant improvement. Our growth in all sources of non-interest revenues has been very positive and we believe we’re favorably positioned to continue to expand in all areas. While operating expenses will continue to be managed in a disciplined fashion, we do expect to continue to consistently invest in all of our businesses.
We expect the first quarter 2015 compensation increase its averaging 3% across our organization in are projecting almost $0.02 of share of additional retirement plan cost in 2015, a direct effect of lower discount rates at the end of 2014 compared to those at the end of 2013. Our asset quality has continued to remain a differentiating feature of our business model and we don’t expect that to change going forward.
Tax rate management will continue to be subject to the successful reinvestment of cash flows into high quality municipal securities, as it has been for last several years and in fact that it has become seemingly more difficult each quarter. We also expect to be net negatively impacted from certain statutory tax code changes enacted in the past year in New York and Pennsylvania and are currently forecasting an increase in our combined effective tax rate to approximately 31% in 2015.
Despite certain of these apparent headwinds, we have faced similar market conditions in characteristics and dynamics in the last few years in this interest rate environment and expect to execute on our business model in a consistent manner in order to create growing and sustainable value for our shareholders. I’ll now turn it back over to Jennifer to open the line for some questions.
Operator
Thank you. If you would like to ask a question, please signal by pressing *1 on your telephone keypad. If you are using a speaker phone, please be sure your mute option is turned off to allow your signal to reach our equipment. Again, that is *1 if you’d like to ask a question. We’ll first hear form Alex Twerdahl with Sandler O’Neill.
Alexander Twerdahl – Sandler O’Neill
Hey, good morning guys.
Mark Tryniski – President & Chief Executive Officer
Good morning Al.
Scott Kingsley – Executive Vice President & Chief Financial Officer
Good morning Alex.
Alexander Twerdahl – Sandler O’Neill
I’m just wondering do you have much ability as we head into 2015 here to continue this mix shift that you have had in the balance sheet replacing securities with loans. I was under the impression that allow your securities with more bullets and they didn’t really, wouldn’t roll until maybe like 2016 or 2017 and that maybe those opportunities might be harder to come by. Is that fair or do they still exist?
Mark Tryniski – President & Chief Executive Officer
Alex, I think they do still exist. We have about $120 million of expected cash flows off our existing portfolio in 2015. The lion share of those are municipal based and unfortunately in a market today, replacing high quality municipal securities has been a challenge as there has been some yield compression of the net yield characteristics, but that’s still our plan, we would like to replace expiring municipal cash flows and to your point, there still is that opportunity to allow a mix change between certain expiring investment cash flows just being put back into investment securities, I’m sorry into loans.
Now, certainly we do expect, Alex to continue to chase deposit growth, new account growth so we do think that from a funding standpoint we’ll continue to be successful gaining core accounts. So it will certainly be dependant on loan growth characteristics being able to stop off that kind of liquidity.
Alexander Twerdahl – Sandler O’Neill
Ok, great and then do you have any commentary on the price of natural gas having fallen, price of oil falling and even though fracking is now officially banned in New York state, I know there is a lot of infrastructure especially in more Southern part of the state where you guys have some branches and into Pennsylvania. Is there any, have you seen anything to sort of or any discussion around the potential impact of the economy in some of those areas?
Mark Tryniski – President & Chief Executive Officer
There has been I think there hasn’t to date we haven’t seen any reduction in that investment. I think a lot of the big the national companies and the big companies that are drilling in our areas are Marcellus Shale is not yet been public about lots of lay-offs and sensation of drilling. With that said, we have some more in the neighborhood of $70 million of credit exposure in that general area related to gas. The majority of that is pipeline related which is still very active, all of it’s within our footprint as well, so we’re not lending to these investors outside of our footprint.
So, it’s not a reason to assume to assume that there will be a reduction in drilling activity in Marcellus possibly, but you know that something that we’re monitoring closely, we’re monitoring the receivables and the operating cash flows of those companies that do have exposure to the national drillers in the Marcellus area that we’re in principally cabin.
We understand that we keep an eye on it, we are familiar with it, and we monitor it. As far as New York, there has been oil and gas drilling in New York for a long time and it continues to be relatively active which just isn’t fracking. So, that continues and the volume and activity moves up and down over time as to be extracted with the price of oil and gas, but it’s something that, you know it’s an area we’ve been lending into for quite sometime and are staying close to it to monitor our exposure.
Alexander Twerdahl – Sandler O’Neill
Ok, thanks. And then just final question, I know that you’ve been pretty vocal about an acquisition being your most preferred use of excess capital, but does the special dividend sit on that stack of potential uses as well or is it just raising your regular dividend as you have been doing really the only option for dividend?
Mark Tryniski – President & Chief Executive Officer
We looked at one time dividend and we looked at other companies that have done it. We looked at other uses of that capital which we think over time would be more productive. Frankly, we just talked to a lot of our largest institutional investors and other investors and had those conversions with them and it’s almost universal that they’re opposed or not in favor of a large one-time dividend. So we will monitor our opportunities to deploy that capital, we are in the banking business so we would prefer to deploy the capital through M&A other thing that help us to grow our business over time.
We look at buybacks, we did buyback some shares in the fourth quarter, but there was kind of a runoff there in the market and we decided to step back for the time being, but I think that if you look at the rate of capital accumulation it runs about after the dividend $45 million a year. So, I’d say it’s a good problem to have Alex in one which we spend a lot of time evaluating again in terms of priorities M&A would certainly be first, share buybacks we would not exclude given the substantial level of what we view is excess free capital right now are unlikely be considered in the near-term one-time dividend.
Alexander Twerdahl – Sandler O’Neill
Okay, great. Thanks for taking my questions.
Mark Tryniski – President & Chief Executive Officer
Sure, Alex.
Scott Kingsley – Executive Vice President & Chief Financial Officer
Thanks Alex.
Operator
And next we will hear from Collyn Gilbert with KBW.
Collyn Gilbert – KBW
Thanks, good morning guys.
Mark Tryniski – President & Chief Executive Officer
Good morning Collyn.
Scott Kingsley – Executive Vice President & Chief Financial Officer
Good morning Collyn.
Collyn Gilbert – KBW
I was just curious given your comments on indirect and I know that you would kind of indicated obviously that it was getting more competitive last quarter too. Is there a point or you will pull back some growth in that segment or how you are guys thinking about that kind of longer term and then that leads to my kind of part B of that question is just how you’re thinking about loan growth in general for the rest of 15?
Scott Kingsley – Executive Vice President & Chief Financial Officer
Sure, we’ve been in the indirect auto lending business for quite some time more than half of our business is used autos and we like the risk reward profile of the used business better, we’ve made some investments to grow that business over the last couple of years actually before had coming out of recession we knew that there was going to be a growth opportunity in that line of business.
I think it’s still very strong business in terms of demand for automobiles, the risk just starting to grow a little bit, you are seeing the used car values come down somewhat which creates a little bit more risk, if you’re seeing other generally what we see is smaller banks who haven’t been in this before looking to grow loans and get into that business and so we’ve seen a slight deterioration in the credit quality of the applications flow.
So, we’re going to stick to our disciplined underwriting, 70% plus of our origination or A&B paper and it’s been for long period of time. Loss rates continue to be very acceptable; the only thing I would suggest at this point that would slow us down would be further deterioration in the credit quality of the applications.
So, I guess one of the bright spots if you will in terms of the spread in the indirect business which you know really ebbs and flows of interest rates. When interest rates are low the ROE of that business is low, when interest rates are higher the ROE is higher. So, right now the ROE on that business is not very strong, it’s not in the brighter. Now, we have hit the point where the yields on originated product are almost exactly what the overall yield on the portfolio is. So we don’t expect to see any further declines in spreads on the indirect business going forward.
Collyn Gilbert – KBW
Ok. Ok that’s helpful. And then just in general, how are you thinking about loan growth sort of for the remainder of the year [inaudible] portfolio?
Mark Tryniski – President & Chief Executive Officer
Yes, the last couple of years have been good, for us in our markets, we are in stable but lower growth markets and if we can get 3% plus we can do well by our shareholders with that level of growth in the loan portfolio, which we’ve managed to achieve the last couple of years. Most of that’s been consumer oriented to a much lesser degree commercial oriented, we did have a very strong quarter in the Commercial Banking business in the fourth quarter.
I think the mortgage business will be stable and will likely grow modestly in 2015, I think the auto business will also grow but at a lesser pace, our prediction for the last couple years have been double digit growth, we don’t think that’s going to happen again in 2015. So I think we would hope to put another 3% or greater, achieve that in 2015 as well and I think we can perform well with that kind of organic loan growth.
Collyn Gilbert – KBW
Ok. Ok, that’s helpful and then just back to the securities discussion. The yield increase in the quarter and I know its been in probably kind of range what it was you purchased, but just trying to understand you know is your objective to try to maintain that yield or how should we think about that securities yield now obviously with what the dip in rates have done here as we look into the first quarter?
Scott Kingsley – Executive Vice President & Chief Financial Officer
It’s a good question Collyn. I think its always our aspiration to maintain what we think is an above peer yield and so we’re still very comfortable with what we have in our portfolio, our only purchases in the portfolio in the fourth quarter were some small amounts of municipal securities to replace expiring cash flows, they came on at lower yield than what expired for sure. And that handful of assets in mortgage backed securities which are primarily CRA based outcomes for us.
So, I think if you look at where the rates for today Collyn and we were left with only knowing where the rate structure is on January 22nd, we would say that we’re not buying a lot of stuff as durations that are beyond five years, because the risk reward still doesn’t appear to be there today. Since we are a short term overnight borrower to the tune of about $300 million in night right now, you know we can have the patience and the diligence to path on replacing those until a better point than a market actually implies.
Collyn Gilbert – KBW
Ok, that’s helpful. And then just my final question, just on your just general outlook for fee income, I mean you guys have done such a great a job in building out the benefits business and a lot of those areas of your business. How are you thinking about the growth rates there as we again look forward to this year?
Mark Tryniski – President & Chief Executive Officer
I think we will continue to invest in our benefits administration business, we will continue to invest in our wealth management business, we expect continued strong growth going forward in both of those businesses. On the banking side its going to be a challenge, I mean you are starting to see and have seen through the last couple of years a moderation of the overdraft line which has been offset by an increase in the interchange line. So, in terms of opportunities to significantly grow the non-banking fee income line that’s going to be a much greater challenge, but we think overall in 2015 we will continue to grow non-interest income.
Collyn Gilbert – KBW
Ok, that’s great. Just one question on the pickup in net charge-off for the quarter, what was driving that?
Scott Kingsley – Executive Vice President & Chief Financial Officer
You know its interesting Collyn, its really, it was sort of across the board, across all of our portfolios and its not the first occurrence where our fourth quarter net charge-offs were larger than every quarter of the year that was the same pattern in 13, same pattern in 12, same pattern in 11. So, my guess is that we’ve been bringing something along in a productive fashion throughout the year and we have not reached our conclusion in the fourth quarter, we’re very active relative to these charge-offs.
Collyn Gilbert – KBW
Great, ok, that’s it. That’s all I had. Thanks, guys.
Mark Tryniski – President & Chief Executive Officer
Thank you, Collyn.
Operator
And once again, if you’d like to ask a question please press *1 at this time. Next we’ll move to a question from Matthew Breese with Sterne Agee.
Matthew Breese – Sterne Agee
Good morning, guys.
Scott Kingsley – Executive Vice President & Chief Financial Officer
Good morning, Matt.
Mark Tryniski – President & Chief Executive Officer
Good morning.
Matthew Breese – Sterne Agee
Scott, you had mentioned earlier that you are expecting for 15 some margin compression and I was hoping you could give a bit more color around that and maybe provide, what extent you would expect the margin to compress given the current yield curve?
Scott Kingsley – Executive Vice President & Chief Financial Officer
Yes, great, question Matt. I try to frame a little bit just using the third and the fourth quarter together, so understanding these will expect a better reserve and better dividend towards the year, but if you remove that from the third quarter versus the fourth quarter where we had a very similar mix of assets, we actually had an organic drop in net interest margin of three basis points. We’ve been giving that kind of two to four basis points a quarter guidance over the course of the last say 12 to 15 months or maybe a little bit longer than that.
And I’ll acknowledge that in some cases we’ve done better than that, so we’ve been able to actually leak a little bit out of our funding costs or productively add some cash flows to the investment portfolio that have offset some of that. That being said on the surface from just as your modeling standpoint I would look at that sort of two to three basis points a quarter going forward in the net interest margin. And really it’s a function of us being productive at redeploying cash flows in the investment portfolio to take off what we don’t use in the mix change to loans.
And again, back to Collyn’s question if you just use sort of January 22nd as your date to look at that there is really kind of a lot of attractive securities out there for us today. So I would argue at least for the first part of year here we are probably going to pass and use expired cash flows to just payoff short term debts, which again, we’ll have the risk of pushing down net interest income in the margin a little bit, but it’s probably the productive outcomes based on the choices of the market.
Matthew Breese – Sterne Agee
Right, so given that kind of margin outlook and the loan growth outlook along with that, we should expect lower net interest income 2015 versus 2014. Is that correct?
Scott Kingsley – Executive Vice President & Chief Financial Officer
Yes, I think from a modeling standpoint Matt, that’s not out of, that’s not out of the realm of possibility. I have to admit I think this is our fourth consecutive January call saying that, it hasn’t happened yet, but certainly from a modeling standpoint, you could see that in 2015.
Mark Tryniski – President & Chief Executive Officer
Well, I think the other point Scott is, if you look at the funding costs, the decline in the funding cost has got into the point where it’s almost zero. So we’ve been able in the last couple of years to continue to bring down funding cost as asset yields have come down and we have essentially, what we’re just about is the bottom there, so.
Matthew Breese – Sterne Agee
Maybe thinking ahead about the eventual increase in interest rates and your interest rate sensitivity. What kind of deposit data are you assuming for your interest bearing account?
Scott Kingsley – Executive Vice President & Chief Financial Officer
Matt, ask that one more time, I couldn’t hear the end of your question.
Matthew Breese – Sterne Agee
Looking ahead towards when the eventual increase in interest rate actually occurs. What kind of deposit beta are you assuming for your interest bearing accounts?
Mark Tryniski – President & Chief Executive Officer
What we’ve actually done from a modeling standpoint and what we disclose on a quarterly basis Matt is we’re using what happened in actual changes in account structure and the variability from a rate standpoint in that period of 2004 to late 2006. I’m not saying that that’s the perfect representative period of time to think about sort of this is the 15, 16 timeframe or 17 timeframe, but it’s the only one we’ve got that actually had an interest rate increase and we can actually look back and say how did our deposits, our products react to that.
The difference gap today is in 2004, you still had a meaningful part of our population in time deposit instruments. That piece has gone away, so we are always a little bit conservative we think or a little bit hesitant to look at what’s going to happen to deposits in accounts like money market accounts. We just have never had this kind of proportional outcome in our existing deposit portfolio to know exactly what that frustrated CB customer is going to do at what rate change will they actually make some kind of a duration commitment.
So we’ve modeled it off at 2004 to 2006 where our variation was some thing like 11% to 30% of the Fed funds rate change during that period of time, I would say that this cycle probably takes longer Matt, if you asked me to prognosticate that today and I think we like our position in being sort of the last guys to the table because of our loans deposit ratio right now.
Matthew Breese – Sterne Agee
Very helpful. My last question around M&A, a bit more of the deal activity this year versus last. You guys did not participate in that and I just wanted to maybe get some thoughts around that and is that an indication of how you feel about bank valuations and take-out valuations?
Scott Kingsley – Executive Vice President & Chief Financial Officer
No, I think you are right, the deal activity was up in 2014 and I think it’s assumed that it’s going to be even higher than that in 2015 and we have seen some cutting off to a good start based on recent activities. I think we continue to look for those high value M&A opportunities that are accretive to our franchise and we continue to be active, we continue to be engaged, we continue to have looks at opportunities across our footprint and beyond and it’s a function in our minds being disciplined and in terms of pricing and in terms of the quality of the franchises and the opportunity for our shareholders.
And so we did look at a number of things, had a number of opportunities in 2014 that didn’t play out and I would hope and expect that we’ll get the same opportunities or more in 2015, but we’ll continue to be active and engaged and we’ll also continue to be disciplined in how we view those opportunities and the threshold for creating transaction that will be additive to a long term and sustainable shareholder value.
Matthew Breese – Sterne Agee
Appreciate it. Thank you.
Mark Tryniski – President & Chief Executive Officer
Thank you, Matt.
Scott Kingsley – Executive Vice President & Chief Financial Officer
Thanks Matt.
Operator
No further questions at this time.
Mark Tryniski – President & Chief Executive Officer
Very good. Thank you all, we will talk again at the end of the next quarter. Thank you.
Operator
Thank you. That does conclude today’s call. We do thank you all for your participation.
