ArrowMark Financial Corp (BANX) 2018 Q4 法說會逐字稿

Welcome to StoneCastle Financial Corp. Fourth Quarter 2018 Investor Conference Call. (Operator Instructions) Please note, this conference is being recorded. Now I would like to turn the call over to Rachel Schatten, General Counsel of StoneCastle Financial.

Good afternoon. Before we begin this conference call, I'd like to remind everyone that certain statements made during the call may be considered forward-looking statements, based on current management expectations that involve substantial risks and uncertainties. Actual results may differ materially from the results stated in or implied by these forward-looking statements. This could depend on numerous factors, such as changes in securities or financial markets or general economic conditions; the volume of sales and purchases of shares of common stock; the continuation of investment advisory, administrative and service contracts; and other risks discussed from time to time in the company's filings with the SEC, including annual and semi-annual reports of the company. StoneCastle Financial has based the forward-looking statements included in this presentation on information available to us as of December 31, 2018. The company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of today, February 28, 2019.

Now I will turn the call over to StoneCastle Financial's Chairman and Chief Executive Officer, Josh Siegel.

Thank you, Rachel. Good afternoon, and welcome to StoneCastle Financial's Fourth Quarter 2018 Investor Call. In addition to Rachel, joining me today is George Shilowitz, President; and Pat Farrell, our Chief Financial Officer.

I would like to start the call today with a review of StoneCastle Financial's quarterly results, with brief comments on the market environment as well as updates on the company. Then I will turn the call over to Pat, who'll provide you with greater detail on our financial results, before I open up the call for questions.

Net investment income for the quarter was $2.7 million or $0.42 per share. Total assets were approximately $196.2 million, and the value of the invested portfolio was approximately $189.1 million. The net asset value at the end of the quarter was $21.43, down $0.61 from the prior quarter. This decline was predominantly due to unrealized appreciation in the quarter, decreasing by $3.4 million or $0.51 per share. We believe no meaningful credit issues currently exist within the portfolio, and the majority of the underlying bank continues to be scored investment grade by Kroll Bond Rating Agency.

Now let me turn to the portfolio review. This was another quiet quarter within the community banking industry. As published by SNL, there were 10 reported sub-debt deals closed during the quarter, raising under -- just under $500 million of capital with coupons ranging from 5.9% to 7%. With a weighted average coupon of 6.1%. One, $300 million issuance, with a coupon of 5.9%, accounted for approximately 60% of this total. These statistics put in perspective the strength of StoneCastle's ability to originate bespoke investment opportunities, even in slow and/or volatile markets.

During Q4, StoneCastle's management was able to originate the unique investment in a secured loan issued by Young Partners. With the yield to maturity of 10.5%. Young Partners is a holding company of Citizens Bancshares company of Kansas City, Missouri, which owns Citizens Bank & Trust Company.

Another transaction in the quarter was a small investment in Tulsa Valley Bancshares, a fixed term loan with coupon rate of 6.375%. Working with an institutional investor, we were able to utilize a version of the pooled investment structure we used previously. As a result, StoneCastle was able to structure an attractive investment, resulting in an effective yield closer to 9.6%.

We believe our ability to execute this type of transaction will open up new opportunities going forward. These type of transactions in a relatively quite market have resulted in the company maintaining a strong portfolio yield. At the end of the quarter, the portfolio's estimated annualized current yield of 9.32% is a continued testament to shareholder value created by the company.

The estimated yield is subject to fluctuations as the mix of portfolio investments and their values will change. But it has been consistently above 9% in 8 of the last 10 reported quarters.

I also want to remind our shareholders that StoneCastle benefits from the range of investments the company generally pursues within a bank's capital structure. Our scheduled investment is predominantly a fixed income portfolio, within a public common equity vehicle. As the company typically invest in securities that rank senior to bank equity.

As such, a little understood aspect of the portfolio of construction is that a bank common equity insulates StoneCastle's income stream by absorbing the economic impact of credit and/or other losses sustained by an individual bank, before affecting the company's more senior security. The quarter end scheduled investments can be found in the company's SEC filings and on the company's website.

Now let me make some comments on the general landscape of banking and the investment environment going into 2019. As I pointed out last quarter, the market remained slow, with bank demand for capital below historic norms, due to the high equity capitalization within the banking industry and tepid economic growth. Variables will be the federal reserves continued unwinding of its balance sheet, their outlook and decisions on interest rates as well as the overall growth of the economy.

As the interest rate environment continues in transition, we believe the best course of action is that of patient capital and prudently utilizing our line of credit for additional asset growth. Therefore, we continue to focus on credit quality as a priority in the portfolio. The yield on new issues subordinated debt issued by community banks compressed significantly over the past several years. And we believe this has been largely driven by the reduction in issuance as well as the market's perception of the improved credit quality of banks.

For these reasons, we believe the community banks need for capital will continue to be relatively low in the immediate future. Although there may be a cyclical decline in demand for capital. We believe the multitrillion dollar community bank sector is the rife with opportunity for us, as we survey a broad landscape of bank and banking-related investments.

We believe the company is well positioned to participate in expanded opportunities, consistent with our investment objectives. StoneCastle's reputation in the market and its industry expertise allows us unique reach in the community banks and banking-related companies. We have proprietary and early knowledge of front, mid and back-office services available to automate and digitize banks. Along with the opportunity to understand the trends and adoption rates of these banking-related businesses.

An example of this is technology and its impact on consumer behavior. Banks are seeing the first generation of customers who can't remember a time before the Internet or digital banking. In general, we believe that the impact of technology will be favorable for community banks and many other companies will continue to grow rapidly to service this multitrillion dollar industry.

Banks are increasingly developing digital solutions for their customers and streamlining operations to reduce noninterest expenses. Another example of banking-related services are specialized companies performing time-consuming administrative functions, such as know your customer, OFAC and third-party risk assessments, for example.

Banks are outsourcing these functions in increased regularity to emerging service companies, many of which directly offer us opportunities to invest. The vast majority of banks in the U.S. are of a size that allow for cost-efficient outsource technology solutions, and a number of companies has emerged to serve the needs of these approximately 5,400 banks.

We are not willing to sacrifice credit quality to chase yield. If we can find more attractive risk return profiles elsewhere in the banking-related scope of opportunities, we prefer to focus on those alternative. Banking has historically been profitable and most banks, at their core, are lenders, providing commercial and/or consumer credit.

As such, we believe that bank performance is highly correlated with the credit performance of these underlying assets. A term we called community risk. The current lack of demand for capital by bank is creating compressed spreads. And therefore, we are seeking to increase our exposure to other bank-related credit products and bank-related services and software businesses. We believe that the inclusion of such investments complement our overall strategy and enhance the diversity of our holdings.

Let me conclude my remarks by commenting on StoneCastle as an investment. Given the current market volatility and uncertain microenvironment, I want to emphasize that an investment in StoneCastle Financial is a pure domestic play on local market economies across the United States. With approximately 60% of our dollar-weighted underlying bank investments in the heartland of the country, BANX offers a strong geographical diversification across 34 states.

StoneCastle targets investments in small community banks. The majority of which have less than $1 billion in assets. These banks for the most parts serve their local markets, which is a differentiating factor from regional and money center banks. Finally, we continue to believe that an investment in StoneCastle Financial afford shareholders, a greater opportunity for capital preservation relative to the market.

Now I want to turn the call over to Pat to discuss the financial results, and provide details on the underlying value of the company.

Thank you, Josh. As I do each quarter, I will present the financials by going through the detailed components to help you understand the value of the company.

The net asset value at December 31 was $21.43, down $0.61 from the prior quarter. The NAV is comprised of 4 components: net investment income; realized capital gains and losses; the change in the value of the portfolio's investment; and finally, distributions paid during the period. Let's walk through these components.

Gross income for the quarter was $4.7 million or $0.72 per share. Net operating expenses for the quarter were $1.9 million or $0.30 per share. Net investment income for the quarter was $2.8 million or $0.42 per share.

The second component affecting the change in NAV for the quarter is realized capital gains and losses. The net realized capital loss for the quarter was nominal at just over $7,000.

The third component, changes in unrealized appreciation or depreciation of the portfolio, relates to how the value of the entire investment portfolio has changed from the previous quarter end to the current quarter end. For the fourth quarter, the unrealized appreciation of the portfolio decreased by approximately $3.4 million or $0.51 per share.

This was due to the market values reflecting the negative environment in the fourth quarter. We believe the market environments in 2019 will remain volatile. But are pleased with the overall market rebound subsequent to the end of the quarter.

As I note each quarter, the vast majority of the portfolio continues to be independently marked from broker-dealer quotes. For the quarter, approximately 94% of the portfolio prices or marks reflect a minimum of 2 quotations or actual closing exchange prices.

These quotations represent an independent third-party assessment of the current value of the portfolio. At quarter end, the closing stock price of StoneCastle traded at nearly a 10% discount to the actual market value of the net assets of the company.

The fourth component affecting the change in net asset value is distributions. Cash distribution for the quarter was $0.52 per share, which was comprised of the regular quarterly cash distribution of $0.38 per share and a special distribution of $0.14 per share.

The special distribution was calculated in accordance with the distribution requirement as a regulated investment company or RIC. The total distribution was paid on January 2 this year to shareholders of record on December 24, 2018.

In summary, we began the quarter with a net asset value of $22.04 per share. During the quarter, generated net income of $2.8 million, a net realized capital loss of approximately $7,000 and the unrealized value of the portfolio investments decreased by $3.4 million.

The sum of these components, offset by a distribution of $0.52 per share, resulted in a net asset value of $21.43 per share at December 31, down $0.61 from the prior quarter.

At quarter end, the company had total assets of approximately $196.2 million, consisting of total investments of $189.1 million, cash of approximately $2.8 million, interest and dividends receivable of $3.1 million, receivable for securities redeemed of $428,000 and other assets of approximately $828,000, representing prepaid assets.

Our dividend yield at the end of the year, including the fourth quarter special dividend was 8.6% and is currently a little over 7%. Even at that rate, StoneCastle's dividend is still nearly 3x higher than that of the average community bank. For the 2018 tax year, approximately 32.5% of distributions were designated as qualified dividend income or QDI treatment. As a result, a portion of your ordinary income dividend may be taxed at a reduced capital gains rate, rather than the higher marginal tax rate applicable to your ordinary income.

Depending on your tax situation, this can be advantageous versus unqualified or ordinary dividend and had a significant impact on overall after-tax return. StoneCastle Financial does not give tax advice, so please discuss the QDI advantage with your tax accountant and/or financial adviser.

Now let me update you on the balance of our current credit facility. At December 31, the company had $51 million drawn from the facility. Based on regulated investment company rules, our leverage percentage at the end of the quarter was 26%. We may only borrow up to 33.3% of our total assets.

Now I want to turn the call back over to Josh Siegel.

Thank you, Pat. Now operator, we would like to open up the call for questions.

(Operator Instructions) Our first question is from Devin Ryan with JMP Securities.

Great. But maybe just to start, so on the Young Partners deal, it seems pretty interesting and creative, I think, as you mentioned. And then I heard some of the prepared remarks, but I am curious, if you can, how you sourced the transaction, was it an existing relationship? And whether you see more demand in the market for similar structures or whether you expect to be able to do similar structures or was this pretty idiosyncratic?

So the way we source is the way we've always sourced. It's is just from our network of referrals, whether it's ABA. This one was a direct inquiry as we already had a relationship with Citizens itself. And this was a very large shareholder, who is a bank holding company for the bank. And wanted to get some liquidity for their current position. So we basically took a wildly overcollateralized position and made him a loan to get him to liquidity in the short term. So we are looking for more situations like that. It has to be a bank we're very comfortable with. It has to be something where we can get significant overcollateralization. But yes, those types of investments is what we're looking for, where we can extract additional value without taking really much different bank risk. George, do you have any thoughts?

Yes, we think it's an interesting dynamic. We like it a lot. And we've liked this in the past, but bank multiples were extremely high. So it's actually a very good dynamic right now, because bank equities have traded off and there are bank executives out there who would actually like to buy personally back some of the shares, if they get offered. So it's very accretive for them, they're willing to pay rate, because they really -- we don't have to compete with other people financing that asset class. So our advanced rate that we can give on it as well as the -- we're not subject to regulatory triggers, we can really put any covenant we want. So we like that profile and the dynamic forward is good right now, given that multiples are up.

Got it. Okay. Very interesting. And so you mentioned in the prepared remarks, kind of looking to increase exposure to other bank-related products. And then, I think, you also mentioned something on the digital side as well. Can you maybe just be a little more clear around what that is? Is that kind of comprehensive of this type of investment or? I just want to make sure, I understand the remarks.

Sure. So if you remember back to our [entry] from 2014, when we did the secondary, we clarified a couple of things. One is that we have a 20% basket for anything. I mean, technically if you want to buy a rubber dog toy company, we can. We're not going to do that, but we could. But it's just a 20% bucket for whatever. But still the 80% basket was bank and bank-related, it's always been that way. We've found enough opportunities, and even today we're still finding opportunities to deploy at accretive rates, it's not enough to really grow our assets, but to at least maintain our assets. But we're also recognizing that we're in a protractive period of tighter spreads that we'd like to see on bank deals. And to the extent, we see interesting opportunities, which we do from time to time, either in bank-related assets or let's say, for example, a firm maybe it's a private equity firm that wanted to make an investment in the bank, and it wants to get some financing for its investment to stretch its dollars further, fine. We'll take the fixed income side of that, right? Our financing cost, even at 8, 9, 10 is a lot cheaper than what they're expecting to earn in their rate of return for an investment. So we're looking for and keeping our eyes open for a lot of these things that tend to come through our door. So they could be investments in the assets of the bank. They could be investments in companies that are servicing. I mean, we get calls every other week of some company who says, "Hey, could we partner up and sell our stuff?" Whether it's services or -- I want to buy assets from banks, through your network of a thousand institutions. And our answer is almost, always, no. We don't hock people's goods. But if we had some kind of a strategic partnership and that where we were making an investment, maybe it would be worthwhile. So we're going to sort of put a bit more effort into looking through those. And if we find an accretive transaction that we think the risk return profile is better, then what we could -- are seeing at that given point in time on a bank investment, then we're going to allocate dollars more to that. Even though we haven't done it in the past, it's not a change of our strategy, it's just utilizing the breadth of our strategy that we've always had. George, any follow-on thoughts?

I think that covers it. I think that we are definitely noticing that banks -- yes, the good news is while bank spreads have compressed it means theoretically, our portfolio is more valuable. But we've recognized that we're an income-focused vehicle and that is what we want to go and do. So we look for those opportunities. We do think banks are actually getting more efficient, they are looking at these, like Josh is focused on these service companies, because banks we're seeing are doing it more and more. They're becoming more and more efficient and more and more profitable. So I think the credit investors have actually got it right with those spreads compressing because we do think they're better. It's actually a little dysfunctional, because the equity market is sold off. So we just want to be in the better part of that dynamic. That's why, for example, we thought the Young loan was super interesting and there's a lot more to do.

Got it. Yes, that's great color. I think being opportunistic is the key. And yes, I think that would be rewarded. So I appreciate that. So last one here, so the borrowing on the credit facility increased a bit sequentially in conjunction with the step-up in assets during the quarter. And you look at the balance sheet, there's still -- when I look at the amount of cash in EPS and some other short-term investments and maybe placeholders. So I don't want to over read into it, but curious around kind of the drawdown on the facility. And then whether we should think about the kind of timing of maybe deploying some of those placeholders or redeploying sooner than later or -- is there anything else to read into that -- the movement in credit facility?

Yes. I wish, I had something more exciting to say. I mean, it's sort of the same as it's been for the last couple of quarters. The calls of underlying assets have generally flowed. So we don't need to put as much back out. We were still handily generating $0.42 a share in the last quarter, well above our dividend of $0.38. So we don't feel any need or pressure, even to supports the dividend because we're covering it. And because we don't have our asset -- underlying assets change all that much, the predictability, at least, in the medium -- short medium term is reasonably high. I mean, we could be surprised, if something calls out. But it's a pretty steady portfolio. And we still have a lot of assets that are noncall from the community funding transaction and things we've done recently. So when we think about on the go forward, we're looking for more of these interesting situations. I mentioned in the call, the Tulsa one. That was one where we actually didn't do a senior sub, we actually are parry on that, but we were able to extract some value in a structure that I don't want to give away, so that our competitors try to copy. But a way that we were able to enhance that, so we're up in the 9s. We're going to keep being creative that's what we're paid to do, is be focused on the community bank space and find value that other people can't easily harness on their own. And we're going to keep focused on that, so we keep covering this dividend.

I'd just add to that, that Josh pointed out that the redemptions haven't been -- not redemptions, but the calls have been very low. And looking back, I mean, for all of 2018, only $4.4 million. And you may recall that in prior years, for example, in 2017, $61 million over the course of the year. $46 million in '16, $80 million in '15. So things have really quieted down a lot there, which has benefited us so that we're not seeking to replace things constantly like we did back then. It's a lot more calm. And I think, it gives you guys more time to select really good high-quality investments.

Exactly.

Our next question is from Christopher Testa with National Securities Corporation.

So Josh, I appreciated the color on the deals only about $0.5 billion and 1 deal comprising a lot of that. What have you seen to the extent that you're able to discuss it in terms of quarter to date so far for the [3 31] quarter with sub-debt deals getting done and if there's been any incremental pickup in yield?

Yields have backed out a little bit in our favor. Still not a ton, but the deal flow has been extremely slow. I don't know the number off the top of my head, but I can't think of more than a -- like 1 deal, that I saw come across the [channel] and maybe 2. And they were quite small. Now, again, I haven't sort of kept my ear to the ground on the Citis, BfAs and JPMorgan issuances that, of course, could always skew things, but we tend to disregard that as a completely different market. It's as George had mentioned, it's been quiet, because banks are kind of flushed with capital, which is good. That means the value of our portfolio is stronger because the credit quality obviously has improved in the overall industry. But until we see what plays out over the next sort of 18 months of the CECL. It depends on what happens on the credit cycles, the Fed saying, "Yes, maybe in '21, we're looking at some kind of recession." Who knows, right? But the fact they're even saying that gives you some kind of an interesting view. As we sort of predicted internally here. We figured the Fed would have been done at the end of '18 with the interest rate rises. It seems like that's likely going to be the case for this year. So that's being stabilized a bit. In fact, you've seen bank deposit pricing back off a little bit, which is a good sign, right? In terms of the banks being able to push back a bit now that the Fed is done and get some expansion in NIM again.

So across the industry, we're not seeing any hotbeds of credit issues. You know we still worry about the consumer. The individual consumer debt ex mortgages is the highest it's been in a while, so that's a little concerning, but the mortgage debt is down so much. The overall level is actually not as high as it looks. But we still worry about consumer. Outside of that, I'm just not hearing any issues from regulators or banks about any particular asset category or geography. So it's benign. Now that means that we have to get more creative on where we find opportunities. As George said, it's a very large universe. When you're talking about, let's say a $3 trillion asset market, order of magnitude 10%, common equity Tier 1, you're talking $300 billion of equity, most of it private, right? In these community banks with very little equity for those individual shareholders, we don't want to own the equity, but we don't mind financing it, if we're covered 2, 3x to 1. So we're going to keep an eye out for more of those opportunities. And then again we're finding opportunities where we can make a fixed income investment, maybe extract some warrants or convertible debt, to have both the rates and maybe a little upside in opportunities that are in the bank space. So yes, we feel okay about where we are, we don't feel any pressure that, "Oh! My goodness, our earnings are under pressure." We have low turnover in the portfolio and we're just going to keep filling the deals that we see coming down the pipe, but it is quiet right now.

Got it. Okay, that's helpful. And kind of segues into a few others things I want to ask you about. So you'd mentioned, Josh, obviously with the Fed sort of backpedaling here, it seems like [deposits-wise] isn't really at the top of the banks worry list. I mean, are majority of the banks that you speak to and deal with, are they still concerned about it, but less concerned? Or are they now just sort of taking that perceived risk off the table pretty much for the foreseeable future?

No, I think, it's still very much a bifurcated market, Chris. You have a large -- Chris, again we have this insight because it's more deposit side at StoneCastle Partners not StoneCastle Financial. You have a pretty bifurcated market of banks that are growing and have opportunities and are tight on liquidity. And so they're trying to get more creative and resourceful about how can I tap into different deposit market, that I haven't tapped into in the past. We're seeing a number of midsize banks kind of that $1 billion to $5 billion or $10 billion, looking and copying sort of the JPMorgan Fin or the markets from Goldman approach of creating an all-digital brand to appeal to a specific segment. You're seeing banks get more creative about affinity groups. So no, I think there's still pressure out there. At the ABA conference a few weeks ago where I was speaking on cleanup, they asked me to speak on weathering the next recession. So I'm glad they're at least thinking ahead. I'd say you still saw 40%, 50% of the topics were deposit-related on sessions. So that's still very much front and center. But you still have a problem on the other side with sort of slower economic growth around the heartland of the country. You have still a fair amount of banks that are running on average high 60% to 70% loan-to-deposit. They just don't have a need and luckily, knock on wood they're being prudent. And they're not sort of rushing out to go put loans to work, they're just batting down the hatches and making a 7%, 8%, 9%, 10% ROE, which frankly, is perfectly fine. So I mean that's sort of the landscape of how people are looking at the liquidity side. I don't see any fear of deposits just vanishing. And of course, I really don't worry about our banks, because we have a pretty big $15 billion pocket book of deposits that we could place at a bank, so that's not going to affect us individually. But no, I don't see that as a real risk in the market.

Okay. All right. That's a good color. And with regards to the type of loan growth, is that confined to any areas? And I don't know mean, geography, I mean, are C&I loans lagging more than like, say, owner-occupied CRE or is this just really broad-based?

I'm going to say from what I've seen it's pretty broad-based. You are seeing a very small minority, which we've been always sensitive to and have talked about it in calls, of banks [straying] in their more consumer or marketplace loans, and we avoid those pretty much like the plague. And that's really, it may be 2 handfuls, it's really a tiny number of banks out of the 5,400. But we do see a little of that. Beyond that, banks are just trying to be very judicious, right. Trying to find good C&I when they can find it. They're looking for less owner-occupied CRE. I'd say, the construction and development percent of balance sheet is up a little, not so much that we're nervous, but it's up a little. So that's sort of an indication that banks are tapping out on what they can find. Obviously, if we see a bank significantly increasing its exposure to construction and development, that's a big flag for us. So we wouldn't be investing along that kind of a profile. But it's pretty much across the sector. I mean, there just isn't as much economic growth as Washington would like to have us believe. It's not shrinking, but it's not growing at any wild pace.

Right. Yes, I certainly agree with that sense, I mean a lot of the management teams I speak with also echo that sentiment. And I think last time, last earnings call -- excuse me. We had discussed that the FDIC or some other regulators were saying that banks were really not prepared for CECL, which, of course, we all know they're not at the current time. Do you think there's going to be any push from the FDIC or any of the other regulators to get the banks to start thinking about this more that can possibly pull forward some Tier 2 capital needs for banks?

It's hard to read the minds of the regulators. But if past is any predicter of the future, as the deadline gets closer and closer, the regulators put it more on their to-do list further up when they do an on-site review of a bank. And given the cycle for bank review is under H.R.2155 has been extended a bit, right. So it's less frequent now. I would think that in the next cycles of field exams, mid-'19, end of '19, I would have to imagine, because there's a chance they won't be back in that bank for 12 or 18 months, that they're going to push a little bit harder on that. I think what -- like anything in the bank space, when you start seeing 1, 2, 4, 5 banks get put under an MOU saying, you need to present to us within 6 months your CECL plan. Then you'll start seeing banks jump to it. But unfortunately, too many banks are going to wait way too long.

Yes, no that's not surprising. And last one from me, if I may. It seems that aside from a lower amount of deals getting, there are deals that might be good from a credit perspective, but where the yields are just not there in terms of your sweet spot. Is there an inclination to set up a JV, so something that's a different structure than the securitization you currently have or you enter with the partner and then you're able to put more financial leverage on a lower yielding, say, term loan or sub-debt that you know is money-good, you're not worried about the credit, but where the yield doesn't make sense, but you could get a very good ROE to your portion of the equity in that vehicle?

Well, you're literally describing the Tulsa Valley deal, that's exactly what we did. That was a much larger deal, where we took a smaller piece, but we were able to extract economics to kind of, like you said, juicing up our piece. In this case though we didn't do with more leverage, we just did it with a more creative structure that, obviously, I don't want to give away the tips. But we are going to -- I mean, I can say right now, we're looking at 2 more of those transactions. So that seems to have some merit. We have a few partners who've been interested to work with us on those. So more to come. I wouldn't say there's no magic surprise here, but we're going to be pursuing more of those go forward.

Ladies and gentlemen, this concludes the question-and-answer session. I would like to turn the call over to management for closing remarks.

Thank you, operator. Well, thank you, as always for listening. And as always, we appreciate your support, and the time you take to understand our company. And we look forward to speaking with you soon.

This concludes today's conference. You may disconnect your lines at this time. And thank you for your participation.