Bancorp Inc (TBBK) 2018 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Third Quarter 2018 The Bancorp, Inc.

Earnings Conference Call.

(Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Mr. Andres Viroslav.

Sir, you may begin.

Thank you, Jolie.

Good morning, and thank you for joining us today for The Bancorp's Third Quarter 2018 Financial Results Conference Call.

On the call with me today are Damian Kozlowski, Chief Executive Officer; and Paul Frenkiel, our Chief Financial Officer.

This morning's call is being webcast on our website at www.thebancorp.com.

There will be a replay of the call beginning at approximately 12:00 p.m.

Eastern Time today.

The dial-in for the replay is (855) 859-2056 with a confirmation code of 906-1088.

Before I turn the call over to Damian, I would like to remind everyone that when used in this conference call, the words believes, anticipates, expects and similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Such statements are subject to risks and uncertainties which could cause actual results to differ materially from those anticipated or suggested by such statements.

For further discussion of these risks and uncertainties, please see The Bancorp's filings with the SEC.

Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

The Bancorp undertakes no obligation to publicly release results of any revisions of forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Now I'd like to turn the call over to The Bancorp's Chief Executive Officer, Damian Kozlowski.

Damian?

Thank you, Andres.

Good morning, and thank you for joining us today.

My name is Damian Kozlowski, I am CEO of The Bancorp and the President of The Bancorp Bank.

I've been in these positions since June 2016, and I welcome you to our third quarter earnings call.

This quarter was very important in the continuing process of improving our performance and running our enterprise in a safe and sound manner while boosting our value to shareholders.

Bancorp earned $1.07 a share on net revenue of $122 million and expenses of $37 million.

Exclusive of the $65 million gain of sale of the Safe Harbor IRA portfolio, net revenues amounted to $57 million.

As previously announced, we sold our Safe Harbor IRA portfolio that generated $6 million in 2017 fees.

The sale price was $65 million and added $0.84 a share to book value.

The sale of our Safe Harbor IRA portfolio concludes our divestiture of noncore assets starting when our new business plan was approved by our board in the third quarter 2016.

Like our European and HSA franchises, our Safe Harbor portfolio was subscale, carried regulatory risks and was unlikely to deliver longer-term growth or innovation to our business model.

Therefore, its sale for $65 million, or over 10x 2017 fees, allowed us to complete the process of focusing on our primary payments and lending businesses and derisking our institution.

The sale also enhanced our capital position without diluting the equity ownership of our shareholders.

In the third quarter of 2018, The Bancorp grew revenue, controlled expenses and accreted capital from non-Safe-Harbor-related sources.

These increases more than offset the third quarter loss of most of the revenue from the exit of the Safe Harbor portfolio and higher funding costs partly due to the increased cost of Safe Harbor deposits temporarily held for the acquirer.

Core revenue increased 10% from net interest income and payment fees.

This revenue growth year-over-year was led by increases in SBA and SBLOC loans, up 19% and 8%, respectively.

Our payments business grew revenue 10% year-over-year, reflecting increase in GDV of 14%.

We also continue to invest in new revenue-producing capabilities that will helps drive sustainable organic revenue growth.

Here are just a few examples of these critical initiatives.

The first example is a rapid funds payment capability that utilizes the credit card network rails of Visa and MasterCard to facilitate disbursements.

It allows money to be transferred in minutes, debit to debit, rather than through bank ACH.

Volumes in the third quarter of 2018 were $9.1 billion compared to $750 million in the third quarter of 2017, an increase of 1,100%.

We anticipate continued strong growth throughout 2019 and beyond as programs with partners, such as PayPal's Venmo, show significant commercial progress and as new companies adopt the capability.

Another example is Talea, an automated lending portal being rolled out to our partners on our nonpurpose securities platform that reduces loan origination from over 20 days to less than 3 by automating underwriting collateral management.

This will have a significant impact on our ability to grow our volume beginning in 2019 when the platform is fully implemented with each of our partners.

These investments in new revenue opportunities, along with investments in compliance and other infrastructure, such as our financial crimes center of excellence in Wilmington, Delaware, have been self-funded through cost saves and productivity enhancements.

Thus reallocating our expense base to be squarely focused on making us more productive, a more efficient, and thus, a more profitable company.

As we continue to grow our revenue base, pretax margin should consistently show improvement, boosting our ROE and ROA into the future.

I now turn the call over to Paul Frenkiel, our CFO, who will detail more about the first quarter.

Thank you, Damian.

In the third quarter of 2018, exclusive of the $65 million gain on IRA sale, Bancorp increased its pretax income by 49% to $18.2 million compared to $12.2 million in the third quarter of 2017.

That increase resulted, notwithstanding a $2.4 million reduction in gain on sale of loans and reflected a $2.7 million increase in net interest income, with a $6.6 million decrease in noninterest expense.

That $6.6 million decrease included the impact of a $2.5 million civil money penalty in third quarter 2017.

Quarterly results reflected continuing revenue growth in Bancorp's major lending lines.

The $2.7 million or 10% increase in net interest income compared to third quarter 2017 reflected double-digit growth in SBA period-end balances and 8% growth in SBLOC balances.

Interest income on SBLOC increased $1.8 million or 30% between those respective quarters to $7.7 million, while interest on loans held for sale and securitizations remained constant at approximately $4.7 million.

Because the last securitization closed at the end of the quarter, related interest income will decrease in the fourth quarter.

The next sale is expected to be in first quarter 2018.

In addition to loan growth, the increases in SBLOC, SBA and other loan interest income reflected the impact of the Federal Reserve rate increases in 2017 and 2018.

There was also a 25 basis point increase in September, the positive impact of which should be realized in future quarters.

Our largest percentage increase in loan balances was in SBA loans and SBLOCs, which, respectively, grew 19% and 8% year-over-year.

On an annualized linked-quarter basis, SBA grew 18%, while leasing grew 7%.

Approximate yields on the loan portfolio are 4.1% for SBLOC, 5.4% for SBA and 6.2% for leasing.

Period-end loan totals, excluding loans held for sale and securitization, grew 9% year-over-year.

The lines of business comprising those totals have historically had low charge-offs.

Overall cost of funds grew 40 basis points to 83 basis points in third quarter 2018 compared to 43 basis points in third quarter 2017.

Prepaid card deposits are our largest funding source and should continue to adjust to only a portion of future increases in market rates.

The net interest margin was 3.22% for the quarter compared to 3.26% in third quarter 2017 and 3.11% for third quarter -- for second quarter 2018.

Compared to third quarter of 2017, the yield on interest-earning assets on -- in continuing operations increased 34 basis points, while as noted, the cost of funds increased 40 basis points.

The margin in third quarter 2018 was also impacted by the timing of the securitization of higher-rate loans at the end of September 2018.

Those loans yield in excess of 5.5%, and accordingly, have a positive impact on net interest margins, with loan totals peaking immediately before the securitization.

The net interest margin was negatively impacted by the interest paid on Safe Harbor IRAs to their acquirer prior to the transfer.

Noninterest income on all payments-related fees increased 10% to $15.5 million.

Prepaid card accounts, our largest funding source, are also the primary driver of noninterest income.

The income on prepaid cards increased to $13.2 million or 5.7% in third quarter 2018 compared to third quarter 2017.

Card payment and ACH processing fees, including the rapid transfer revenue, which Damian discussed earlier, increased 46% to $2.3 million, which increased the overall payment revenue growth to 10%.

Noninterest expense of $37.3 million was $4.1 million lower than third quarter 2017 after excluding a $2.5 million civil money penalty in 2017.

The $4.1 million reduction reflected a $2.5 million reduction in salary (technical difficulty) reflected lower quarterly incentive-related expense.

Legal expenses were $1.1 million lower, while data processing expenses were $546,000 lower than third quarter 2017.

Additional expense reduction opportunities in other categories continue to be pursued.

Year-to-date, noninterest expense was 5% lower than 2017.

As a result of third quarter earnings and the gain on IRA sale, both the bank and consolidated leverage ratios exceed 9%, and book value per share has increased to $6.95.

That concludes my comments, and I will return the call back to Damian for questions.

Okay, operator, if you would please open the line for questions.

(Operator Instructions) Our first question comes from William Wallace with Raymond James.

Maybe starting on net interest margin.

There were some commentary in the prepared remarks about some pressure on cost of funds related to funds that you were holding for the purchaser of the Safe Harbor IRA.

Can you talk a little bit more about that and maybe what the impact was?

It was about $1 million.

And so what happened was the sale concluded pretty early in the quarter and we were holding the majority of the deposits.

We negotiated a more market rate for when we held those deposits until we transferred them to a new bank that they had selected.

We didn't want to keep those deposits because they were actually being priced higher in the marketplace.

We have other alternative sources of funding.

So it was about $1 million in our interest expense from that.

And these deposits, they're now all out of the bank?

They were transferred, I think, on the second day of the fourth quarter.

Okay.

And if I look -- so I can see that if I'm looking at the cost of the savings and money market accounts, that was up close to 100 basis points quarter-over-quarter.

Correct.

Okay, okay.

Great.

Okay.

That's helpful.

On the loan growth, I think you were maybe speaking to average balances.

When I look at the period-end balances, they were down quarter-over-quarter, and the SBLOC looks like it shows the biggest decline.

Maybe just talk a little bit about what you're seeing in that business.

I know you're rolling out the truly -- I can't remember how you say it, but...

Talea.

The Talea.

Can you maybe talk about what you saw in that line, and what you're seeing now with that rollout of the software underwriting package?

So the full rollout will be in the -- will be pretty much the end of the first quarter.

Some will lag to the midyear for the rollout of that portfolio -- I think, excuse me, platform.

The -- we just saw more people repaying.

We had the same -- we have a great pipeline in the business.

It would suggest the same type of growth that we've experienced, but we just had more pay downs.

This happens sometimes when you see a rise in the interest rate.

As you can see, that our coupon on the portfolio, it's variable and it's risen because of interest rate increases.

And so you get some payoffs, but people realize after a little while that it is the -- probably the cheapest source of funding, so you get a little bit more payoffs, but your originations continue to be in line with your past history.

So it should rebuild fairly quickly and show growth again.

So kind of holistically, excluding the loans held for sale, what do you think is a fair kind of target for loan growth and still be annualized?

So for -- well, we want to do 10%, right?

So we want to do 10% on both sides.

So if we get 10% -- there are some areas where we think we will grow higher.

SBA, we've been growing higher.

We may, in the future, look for leasing opportunities that are inorganic; to buy portfolios, which we have done in the past.

The SBLOC business, hopefully, will get greater than 10% growth as we implement the Talea platform.

But 10%, we don't -- could we get higher?

Yes, we can fund it, obviously.

So if we got 15%, I don't want to grow it too aggressively.

I don't want our balance sheet -- or our fee income to be much less than 40% of the bank's revenue.

I want it to be balanced.

I think that's part of the attractiveness of our portfolio, so I want those 2 things to grow in tandem.

So we have a target of 10% we'd like to see.

And obviously, for growing our revenue 10%, we're still thinking of fairly flat expenses.

We're expecting significant increases in margin.

Okay, okay, good.

And sticking to the balance sheet.

In the discontinued portfolio, it looks like that Orlando property is still on the balance sheet.

Can you just update us on the status of that property?

Yes, we're still operating the mall on a profit.

What happened is, it's fairly complicated, but there's a ground lease under the property.

So we're still in the process of negotiating the finalized [bill].

There's multiple buyers involved.

We did have -- after 18 months, we did have the mall reappraised, and it's good to announce that, that appraisal fully supports the value on our balance sheet.

We also ultimately will get it off our balance sheet, I believe.

It has a lot of twists and turns, but it is not a drag on economics of the company and we continue to produce positive income from the mall.

Okay.

Moving on to the expenses.

Expenses came in better than I was anticipating, given the loan sale, especially with the loan sale generating more revenue than I was anticipating.

So is that to assume that the kind of base run rate expense is coming in better than what you had maybe been speaking about these past couple of quarters?

We're -- it goes up and down.

So we were still saying that we're at that $12 million to $13 million a month on run rate expenses.

So $150 million to $160 million if -- it's variable, depending on revenue.

Part of the reason was that we've been much more productive and profitable this year.

Last year, we didn't know at the beginning of the year whether or not we would be paying bonuses and other incentive comps.

So we didn't have great visibility.

So we had a greater expense accrual for bonus payments in the third quarter of last year than we did this year, partly because we've been eating those costs all the way through the year, because now we have much greater visibility on the fact that we will pay those incentive comps.

So that's part of the reason.

But obviously, that payment is in the numbers from the other quarters.

Okay, okay.

All right.

That's helpful.

Maybe my last question, just kind of bigger picture.

You highlighted the rapid funds business.

We see the -- on the ACH fee line that, that line is up 45% year-over-year, it's up over 10% quarter-over-quarter.

Could you -- I mean, I know it's early, and I know that Venmo, the number of transactions of that continues to grow.

But how do you think about the opportunity, the revenue opportunity from that one product?

And how we might see that flow through in this ACH fee line?

Well, we'll see.

It will have continued -- that's part of it -- there's 2 parts to it.

One is the indirect business.

So we're -- there's people on our platform, like Venmo, and there are others that want the capability also.

We also work with other partners I can't disclose, but they're third parties that are working with other third parties.

And that is -- the explosive growth is just the adoption from people who don't want to wait 3 to 4 days for their money and they can have it in a couple of minutes.

And this is the same thing as Zelle, obviously, so these type of platforms are gaining more acceptance.

So you can expect -- we don't know what the growth will be, but we're seeing growth every month.

And obviously, if the base growth, the growth will slow down on an absolute basis, but we should consider that, that volume will continue to explode.

I mean, just look at year-over-year, we virtually had no -- we only had $750 million in transactions last year, I mean, now we're already up to $9 billion.

And we expect the trajectory to be very sizable from that indirect business.

But there's another business that is -- we're looking at, is the direct business, where you look -- work with merchants and stuff and give them the capability with vendors in order so they can get their money paid more quickly.

And so that's a whole 'nother type of transaction that's not going through a network, through consumers, but through businesses.

And we're -- and that's another initiative we have.

We don't have any revenue from it yet, but we expect sizable revenue from that.

The difference is pricing.

If you do it the direct model, the pricing can be significant.

So it could be 10, 20, 30x higher than the transactional fees that we get from the indirect business.

But we don't have any guidance on that.

We don't have any revenue on that, but that's clearly the second opportunity.

As we've now established this product in the market, the second opportunity now is a higher spread opportunity that's a direct relationship.

Maybe do you have the volume in the second quarter?

The volume in the second quarter?

I don't think we have it on us.

We can -- we haven't announced it.

Do you have the percentage?

We only have the third quarter.

No, we only have the third quarter, Wally, with us right now.

As a guide, you can look at that income category and the increase over the prior year and just do a proportionate...

Because the pricing doesn't change.

Our next question comes from Frank Schiraldi with Sandler O'Neill.

Just a couple of follow-ups, I guess.

On the deposit cost, Paul, I understand the money market bucket.

And just thinking about the larger prepaid bucket, it looks to me like just betas were, like, 60% in the quarter.

And I'm just wondering, is that just a timing thing?

And should we still expect sort of 40% of Fed funds to kind of roll into deposit costs?

Is that sort of the most reasonable estimate?

Historically, it's been closer to 40%.

I think it's gone up a little bit now.

So I think closer to the 50% range of future Fed increases is more realistic.

Okay.

And does that -- as the Fed funds rate has moved higher, there's something in the contracts that increases the percentage payment?

So some of the contracts, yes.

So we have a fair number of contracts and each of them is unique and they have different triggers.

And it really depends on the cost involved with the -- the fixed cost involved in terms of how we structure the contract.

And there's a -- there's some rollover in new contracts and in old contracts.

So it's somewhat of a moving target, but if you use 50% rather than -- it's very difficult to model every contract.

In fact, it's impossible.

So I think if you use 50% for now, that's closer than 40%.

Yes, and there's obviously more pressure.

There's things built in at higher rates in some of these contracts.

And as we renegotiate, obviously, interest in the -- interest expense is higher than it has been previously, but there's still -- there's not -- remember, it's a step function.

Once the rate happens, it reprices immediately.

We don't have to lag like other banks.

So we don't get future increases in the funding cost because our CDs reprice, et cetera, et cetera.

So it's a step function.

Once the interest rate increase happens, our funding expense grows and then it waits for the next interest rate increase.

Okay.

And so do you think 50%?

I mean, because we got a couple of Fed Fund hikes expected over the next, I don't know, 6 months or so.

Do you think that we should consider a step up from that 50% for every rate hike?

Or 50% probably makes the most sense here?

How would you think of that in terms of modeling?

50%, and it may creep -- as the rate hikes continue, it might creep a little bit higher than that.

But then I think at 50%, you're not too far away from the top.

Okay, all right, great.

And then just thinking about, Damian, talking about the -- thinking about the 10% growth on both sides of the balance sheet, and if you can get -- maybe that can accelerate on the SBLOC side -- or through SBLOC growth.

Remind me, I think, I believe that you just keep the whole SBA loan on balance sheet, right?

So as growth perhaps starts to pick up, are you considering starting to securitize that off as well?

No.

We like to keep the guaranteed portion for liquidity reasons.

Also, it's a great -- it's a guaranteed thing that's earning incredible rates of interest, so we like to keep it on the balance sheet.

We -- people sell it because they have funding issues, generally, and we don't have those issues.

So if you want to create a lot of fees, you can monetize those guaranteed portions for -- if the market fluctuates, but 6%, 7%, 8%, 9%, even 10% premiums.

We don't need to do that.

So we like to keep the asset.

We think it's a great asset, we keep it on our balance sheet, and we have no funding issues.

All right, okay, I guess I'm just -- so you're feeling that 10% to 15% growth on the loan book is a pretty good expectation?

I mean, you -- I'm just trying to think, if at some point, you do get funding issues, right?

I mean, if loan growth gets high enough, so -- okay.

No, I don't think we -- well, I don't think we do.

So we already have 40% loan-to-deposit ratio.

That would be -- and we -- and our deposits have been growing on the prepaid side, so I don't think we would -- and we -- our structure of our balance sheet, I don't think we would run into issues for a very long period of time, if ever.

I think the bigger issue is that maybe 10 years from now, we'll be less -- we'll be hitting against that $10 billion interchange Dodd-Frank limit.

But on the funding side, I really don't -- I think we got -- remember, we have almost $1.8 billion in bonds, too, so -- and a lot of our loans are liquid, variable rate loans that we've actually pledged to the Fed for liquidity reasons.

So I think we've got a very strong asset side of the balance sheet.

That's fair, okay.

And just wondering, just more sort of bigger picture in terms of conversations, comments you made in the past about credit sponsorship.

I'm just wondering, obviously, you talked about that being something for the future.

And wondering if you still -- how you think about that here, if you've changed your thinking at all.

Just given some have pulled back a little bit.

There's been some talk of maybe it's getting a bit frothy in some areas.

So just wanted to see if you had any updated commentary on them -- on that.

No, we still want to participate.

We're waiting to finally conclude our regulatory remediation, which I believe we're doing really well on.

I think we're making the progress we need to do.

Not only to resolve the issues, but to set ourselves up for 2 or 3x the volume.

We have almost $600 billion of transactional volume, that's an immense amount of volume for any bank, even a large bank.

And we're a $5 billion bank, $4.5 billion bank.

So we're building something that's very robust in order for us to grow the business.

So we're waiting to participate in that part of the market for a couple of things: One, for it to be fully secure in our BSA envelope and compliance envelope, focusing on consumer compliance; but also to make sure that we have any other credit risk disposed of.

Obviously, we've done a tremendous job on the discontinued Walnut Street portfolios.

So I think going into whether it's next year or even early in the year after, we definitely want to participate in that space.

But we're going to be very selective.

We're not doing subprime.

We're not doing -- we're going to focus on corporate, we're going to focus on higher-end consumer.

But that market is still exploding and there's a real need for a safe and sound bank with a robust platform to participate.

Our next question comes from Matthew Breese with Piper Jaffray.

I guess I wanted to focus on really just one area, which is the prepaid business.

I wanted your outlook for how the fees and gross dollar volumes are going.

And then also wanted to just understand, how much of the business is still tied to the tax providers?

Well, the -- the industry is growing.

The envelope of activities are still growing double-digit.

I've said this before, we'd be happy with high single-digit fee growth and a couple percent higher in volume GDV growth.

It does look like we have some product areas that will exceed that, so I think we feel comfortable that we can grow the envelope around 10% in fees.

The prepaid area is a little bit slower growth than some of the other areas that we're now participating in, so you might see lower single-digit prepaid growth.

And we had some headwinds.

We lost some programs in that area previously, and these were because of acquisitions and other reasons.

I know our pipeline for the foreseeable future.

We've got some major contracts that are recently finalized and other programs that we're looking to participate in.

So I think we've got some -- we've got some headwinds.

I think we have some tailwinds to meet that target.

So we should see pretty good growth in 2019 on that side, in that range.

Depending on the adaption of the rapid funds product or the instant transfer product, I think the applicability through the direct channel is something that is enticing to us and could add significant growth.

But once again, we don't have a guidance on that and we don't have any estimate at this point.

Paul, you want to -- second part was the what percentage?

Do we have it?

We don't really -- we're not really predictive, but I think you can go with what Damian just reviewed for you.

And really, the best indicator is what we've done quarter over prior year quarter for the tax refund in terms of how important that is to the business.

The best way to look at that is to compare.

As Damian mentioned, we -- several relationships exited, and that was already reflected in last year's first quarter.

So if you go to last year's first quarter GDV and prepaid fees and compare it to the prior and then the prior one to that, you'll see -- that's where you see the impact.

So that differential between those quarters largely reflects the reduced impact of the tax program.

So it's not nearly as significant as it used to be.

Right.

I guess my follow-up question to that is the tax laws have changed.

A lot of single filers, married filers are going to be getting better, higher standard deductions, which I would assume, flow through to your prepaid business.

And I want to get a sense for the positive impact from that going into next year.

Well, it's still based on -- the deposits -- I think your question is more or less directed at the deposit element of it.

The deposit element of it, are our deposits do increase in the first quarter and the second quarter as a result of tax refunds.

They reduce in the same way, the fees were impacted in the first quarter last year and second quarter.

Similarly, the balances were.

But the balances also are not a significant impact because they're relatively short term.

Got it.

Okay.

So you don't -- you think we're -- as it currently stands, we should not expect any sort of material change, given the new tax laws.

That's my read here.

I don't see how they would specifically impact tax refunds.

I suppose, if certain higher-wage earners lose some of the deductions and so forth, then the refunds would be decreased.

But that shouldn't have a material impact.

Will offset a bit.

The lower end will have an increase.

We don't have a prediction for that.

I don't think it'll be much different.

And there are other variables that have resulted in fluctuations in the past, given the timing of how long it takes the IRS to process.

They've had delays at certain times because they're increasing their fraud protections and so forth.

So that actually has the potential of affecting it more, I think.

Right.

And Damian, I just want to clarify, so your expectations are that gross dollar volume can continue to increase at a high single, low double-digit rate, but the fees themselves will be a little bit lower than that.

Is that what your message was?

Yes, yes, because when you have -- it's a Boeing-Airbus.

There's only a few banks left in this space that are the primary supporters.

If you looked at us and Meta, we're kind of concentrating the market.

And there's a few other players, there's not a lot of new entrants just because of the cost of being able to do the compliance part of it.

So you do see, in those cases, slow erosion of fees and higher growth.

Like the securities industry just experienced 25, 30 years ago with purging in State Street.

And so -- but there's new areas that show extreme high growth, like that rapid funding product.

So I think any slowdown will be offset by those new areas.

So I think we can -- I'd love to see 10%, I mean, growth in fees in that business.

Obviously, that would be -- if you can marry that with 10% growth, of minimum of revenue growth on the balance sheet side and hold your expenses relatively flat, that's a -- has a huge impact, obviously, on your ability to generate net income.

So with -- that's our general -- what we'd like to see.

I think we might see higher lending growth next year, based on the Talea thing and based on the rapid funds product going from both indirect, but direct growth might also add substantial fees to it, but it might not.

So that's the areas of opportunity, and we kind of would like to -- we'd be happy to grow the -- grow in a safe and sound manner and add volume in the -- because we're talking not a few billion dollars, we're talking of billions of millions of dollars of transactions here.

So we already do $600 billion, practically.

So we have room to grow, obviously, but there's just so much growth in the overall market, and we have a big proportion of it already.

Thank you.

I'm not showing any further questions at this time.

I would now like to turn the call back over to Damian Kozlowski for any further remarks.

Okay, thank you, everyone, for joining us today.

We appreciate it.

We'll keep on working to build a successful company.

And I think we've made progress this quarter.

And I'd like just to thank everybody in The Bancorp community, including our shareholders, for having the trust in us to safeguard their investment and produce positive returns.

Thank you, everyone.

Ladies and gentlemen, thank you for participating in today's conference.

This does conclude today's program, and you may all disconnect.

Everyone, have a great day.