Triumph Financial Inc (TFIN) 2017 Q3 法說會逐字稿

Good day, and welcome to the Triumph Bancorp Inc. third quarter earnings conference call. (Operator Instructions) Please note this event is being recorded.

I would now like to turn the conference over to Mr. Luke Wyse, Senior Vice President of Finance and Investor Relations. Please go ahead.

Good morning. Welcome to the Triumph Bancorp's conference call to discuss our third quarter 2017 financial results. Before we get started, I'd like to remind you that this presentation may include forward-looking statements. Those statements are subject to risks and uncertainties that could cause actual and anticipated results to differ. The company undertakes no obligation to publicly revise any forward-looking statement.

If you're logged into our webcast, please refer to the slide presentation available online, including our safe harbor statement on Slide 2. For those joining by phone, please note that the safe harbor statement and presentation are available on our website at www.triumphbancorp.com. All comments made during today's call are subject to that safe harbor statement.

I'm joined this morning by Triumph's Vice Chairman and CEO, Aaron Graft; our Chief Financial Officer, Bryce Fowler; and Dan Karas, our Chief Lending Officer. After the presentation, we'll be happy to address any questions you may have.

At this time, I would like to turn the call over to Aaron. Aaron?

Thank you, Luke. We have been busy since the end of the second quarter, and I am very pleased with what our team has accomplished. We completed a successful public offering of our common stock, raising $65.5 million of capital. We completed our acquisition and conversion of 9 Independent Bank Colorado branches on October 6, adding to our core deposit base in our Western Division. And we are progressing as expected toward a fourth quarter closing on our pending acquisition of Valley Bancorp.

Despite all of this activity, we continued to generate solid core earnings, strong loan growth and improved asset quality in the third quarter. Our total loan portfolio grew organically by $130 million or 6% in Q3. This growth continues to be well diversified across many lending products.

Our Commercial Finance portfolio, which includes our ABL, equipment finance and premium finance lending, in addition to our factored receivables, comprised the majority of the increase. This portfolio is now at $887 million, an increase of $85 million or 11% for the quarter, and comprises 37% of our overall loan portfolio.

We also experienced solid growth in CRE and real estate lending of over $42 million.

Triumph Business Capital, our factoring subsidiary, contributed approximately $47 million of loan growth for the quarter. TBC again achieved record highs in the number of invoices purchased, the dollar value of invoices purchased and the number of clients served in the third quarter. Specifically, TBC purchased 476,000 invoices or a dollar value of $732.4 million, and added 235 net new clients in the third quarter to reach 2,925 clients at September 30.

Average net funds employed were $260 million during the third quarter and the average invoice size purchased this quarter increased to $1,537 versus $1,433 in the prior quarter. The dollar value of invoices purchased this quarter over the same quarter last year are up 50%. These team members deserve a hearty congratulations for their continuing exceptional performance.

I am pleased to see that the investment we have made in this business is producing above-market return for our shareholders. We are also excited about the prospects of TriumphPay, our technology-driven reverse factoring platform. While TriumphPay does not contribute to our earnings currently, early market adoption has exceeded our expectations and we believe we are building a technology and a platform that could have great promise for the future.

With respect to asset quality, our third quarter metrics continue to reflect improvements. In the third quarter, we recorded a provision for loan loss of only $572,000, primarily to provide for the quarter's loan growth.

Net charge-offs were negligible at only $2,000, which was aided by $1.2 million of recoveries in the quarter. Our past due nonperforming loan and nonperforming asset ratios all experienced improvements during the third quarter.

Over a year ago, I stated on an earnings call that our goal was to achieve a $0.50 per share run rate by the end of 2017, which was approximately a 100% improvement over our current run rate at the time. We achieved that goal ahead of schedule last quarter. But for the issuance of additional shares to support our announced acquisitions, we would've achieved it again this quarter. More importantly, with our core loan growth and the closing of our previously announced acquisitions, I expect we will continue to meet and exceed that mark into the future as our operating leverage improves.

I point this out to investors and potential investors to illustrate to them what our management and Board have believed all along, that we had front-loaded the expense of building a platform that could take us to the next level. We are not done building yet. Not even close. But with our current core return on average assets running around 1.3%, I think we have proven the business case for our strategy.

At this point, I'd like to turn the call over to Bryce to provide some additional color on our financial performance for the third quarter. Bryce?

Thank you, Aaron. For the third quarter, we earned net income to common stockholders of $9.6 million or $0.47 per diluted share.

Earnings per share for the quarter were impacted by our public offering of 2,530,000 shares on August 1. All things being equal, the increased share count was a reduction of approximately $0.04 per share.

Net interest income for the third quarter increased $955,000 or 2.5% over the prior quarter. This increase was driven primarily by the $160 million increase in the average balance of loans outstanding over the prior quarter. The GAAP yield on total loans, including loan discount accretion, decreased 35 basis points from the prior quarter to 7.44%. GAAP net interest margin decreased 26 basis points to 5.90%. Excluding the impact of purchased loan discount accretion, the adjusted yield on loans was only down 5 basis points to 7.2% for the third quarter. And our adjusted net interest margin decreased only 1 basis point to 5.69%.

The third quarter included $1.4 million of loan discount accretion, a decrease of $1.5 million. The prior quarter included accelerated accretion associated with our prepayment of certain loans, which contributed a higher GAAP loan yield and net interest margin. As of September 30, we had $10.8 million of remaining loan purchase discount, of which we currently expect $9.4 million to accrete into income for the remaining lives of the acquired loans. Of this accretable amount, approximately $1 million is expected to accrete by the end of 2017.

Total deposits for the quarter were down $60 million from the prior quarter, primarily due to our intentional plan to reduce public funds. Due to the nature of our asset portfolio being primarily in loans rather than securities and continuing strong loan demand, the pledging requirements associated with public funds make many of these accounts noneconomical for us to continue. Our loan-to-deposit ratio was 121% as of September 30. Our use of Federal Home Loan Bank advances, driven by most of our mortgage warehouse portfolio, inflates this ratio about 10%.

We would also like to note that our third quarter results do not yet incorporate the $162 million in deposits and net liquidity provided from the Independent Bank branch acquisition or the $296 million of deposits and net liquidity we expect to acquire in the pending Valley Bank acquisition. On a static basis, these 2 acquisitions will reduce the loan-to-deposit ratio about 10%. We remain confident in our ability to continue funding profitable loan growth, given our ability to pay competitive deposit rates as our loan portfolio yield remains above 7%.

Noninterest income decreased $1 million from the second quarter to $4.2 million. As discussed in our last earnings call, the primary driver of this decrease is due to $990,000 of earnings we realized in the prior quarter on our investment in a CLO warehouse, which was repaid to us in late June.

Noninterest expenses in the second quarter were $28.2 million, which is in line with our expectation of approximately $28 million we communicated during the last quarter's call. Total noninterest expense increased about $900,000 over the prior quarter. Most of this was attributable to increased bonus and incentive compensation as our core earnings performance continues to improve since the first quarter of this year. Our FTEs were up only about 5 positions from the prior quarter to 711 as of September 30.

With that, I'd like to turn the call back to Aaron.

Thank you, Bryce. A couple of final things to mention regarding expenses and future plans before we turn the call over to the operator for questions. First, investors should expect to see expense growth in Q4 beyond our normal growth due to the completion of our acquisition of the 9 branches from Independent Bank and our acquisition of Valley Bank and Trust. We estimate that the cumulative impact of these transactions will increase our expense run rate in Q4 to approximately $30.5 million. Q4 will include the Independent Bank Branches for nearly the full 3 months and Valley Bank and Trust for one month.

As most of you know, TBK has been a bank headquartered in Dallas, but not really a full-service Dallas bank since the current management group led the recapitalization of the bank in 2010. We expect this will change in 2018. Our Board and Senior Management have deep roots in North Texas. As a result, we have built a significant loan book in our local market. Many of our borrowers have expressed an interest in moving their entire relationship to TBK, but have been unwilling to do so for lack of a full-service branch. We expect to open a full-service branch in Dallas in 2018. And like most things TBK does, we won't do it quite like other banks. More details on this to come, but know that we are excited about building a true commercial full-service presence in North Texas. We view this as a very strategic investment into the future growth of our company. As part of this, we are scoping a significant upgrade to systems such as our Treasury Management solutions. We expect to deliver significant deposit and loan growth through the presence of this branch and these upgraded solutions.

With that, I'd like to turn the call over to the operator for any questions.

(Operator Instructions) Our first question will come from Jared Shaw of Wells Fargo Securities.

This is actually Timur Braziler filling in for Jared. I guess, my first question is on the deposit side. Can we talk a little bit about what you saw there for trends this quarter? How much of that linked quarter decline was driven solely by the pending acquisitions? Or is there some sort of strategic shift taking place?

This is Bryce. I'll take -- try to take that one. I think, as far as the change overall, we saw a decline in our public fund deposits of about $100 million during the quarter. That was a result of a conscious decision on our part to kind of rejigger our funding mix and eliminating those over time to its overall. So -- otherwise, I would say that our -- we were anticipating the closing of the branch acquisitions close as well as Valley. So we were running a little lean and publicly not pushing on liquidity, and probably not pushing as hard on deposit growth, knowing that those 2 transactions were on the way.

And then just maybe looking at the Colorado franchise, I know many of those deals were done for the deposit aspect. But what have you seen on the lending side thus far? And then, once you roll in these 2 deals, one closed and one's expecting to close in the fourth quarter, how will that landscape potentially change or what's the expectation there?

It's Dan Karas. We're pretty excited about the opportunities in Colorado. We pick up or have picked up in the branch acquisition about $100 million in loans, about $75 million of that is ag. So we're pretty comfortable with the people and the types of businesses that we serve in those markets. In the Valley acquisition, that's about $170 million in loans, mostly commercial, a little bit of ag mixed in, but that's primarily commercial. We don't look, as we said before, in our community bank franchise for the same growth level that we expect in commercial finance. So if we're in the 3% to 5% range organically, we're pretty comfortable with that and then let commercial finance continue to drive the overall growth in margin.

Okay. And then maybe just one more for me. There's been a lot of deal activity recently. What's the deal appetite currently? And from just a back office standpoint, when are you guys able to kind of get back in the market and then look for incremental M&A opportunities?

Well, Timur, this is Aaron. So the Valley Bank acquisition, legal day 1, is scheduled for December 8. And of course, that involves the merger and conversion. As you would expect, there's an integration process that has already begun but really picks up at that time. Of course, as you also might expect, there's a few of us at the organization who spend our time not only helping with that but looking out towards what the next opportunity set is. And I don't think it's a surprise to anyone, if you step back and just look at Triumph holistically and you think about how do we do M&A that creates value for our shareholders, not just asset growth. That M&A is going to be focused on the opportunity to grow or capture core deposits. And so there are many of those dialogues going on right now from branch deals to full bank deals, end markets we're in, adjacent to markets we're in. And so I mean, I would be hopeful much like we did in 2017 where we were able to announce and close multiple deals, that we could do the same in 2018. But you won't hear anything from us as far as an announcement goes until after the 1st of the year just because of where we are in the process with Valley. And as far as what we're capable of doing in our back office and -- we are so much better than we were a year ago. We have a lot of things we still want to get better at. I mentioned those in the call. We want to improve technology-related treasury management and many other things. But huge upgrades behind the scenes have been made and there are more to go, but we certainly are better equipped to do multiple deals in 2018 than we were even in 2017. So we expect M&A to be part of our future.

Okay, great. And then just -- I guess lastly, was the expectation of North Texas becoming a bigger component of the overall bank, is it safe to assume that we can see the potential for either branch transactions or whole bank M&A to be centered around that area? Or is this more broadly looking than that?

I guess more broadly looking than that. I don't -- nothing in North Texas -- what we -- just to be clear, what we wanted to tell everyone we are doing is establishing a branch in North Texas. And of course, that physical branch will already have prewired around it a lot of loans and a lot of deposit potential. Just because if you look at our Board of Directors and our management and our relationships here, we just needed to create a physical location where we can direct all this potential traffic to. So it's going to grow far faster than any, just -- if we were to already have 5 branches here, it's just the adding a sixth. You're going to push a lot of volume there. So excited about that. As far as on the M&A in North Texas, should an opportunity present itself, we certainly will look at it but I would not put that at the top of the list of at least sitting here today where I expect we would do M&A in 2018.

Our next question will come from Nick Grant of KBW.

All right. So you had another really clean quarter from a credit perspective. Are there any pockets of concern at all right now? Or is it pretty clean across the board? And was any of the provision related -- like Hurricane Harvey or anything like that you can note on?

Nick, it's Dan. Let me start with the hurricanes first and we're pleased that both the people and our clients overall have been relatively lightly impacted. We have made a few equipment finance extensions but really nothing significant as it relates to that. Our largest exposure was in mortgage warehouse and I'm happy to say that, that exposure is all but then repurchased at this point. So really there's no impact that the hurricane had on us institutionally. As I think about -- I'm sorry. As I think about trends in asset quality, nothing really stands out at this point. We had one equipment finance issue in Q3 that we dealt with on the charge-off side. On the recovery side, we had 2 legacy loans that we're able to work through and fortunately have recoveries with one healthcare credit that we took a charge on in the first quarter. We've had a small recovery on it. So as I look at it today, really no meaningful negative trends on the horizon.

Nick, just to add on to that. I would say where we're sitting out, the bulk of our nonperforming assets are concentrated in a few large relationships that have been around for some acquired, some made that we continue to progress further onto resolution. Unknowable, whether that will happen in Q4 or Q1, but you get to a point where 4 or 5 significant assets where they could complete resolution could lower our nonperforming asset ratio to something that's extremely miniscule, that's exciting to us.

Okay, great. And then can you kind of touch on the decrease in commercial finance loan yields? I mean, I realize it's coming off a very high level, but it is primarily driven by more premium finance kind of lowering that or is there something else going on we should think about going forward?

This is Bryce. I think there's a mix of things, which have been happening there. Some of it is a little bit of change in the mix of the portfolio but really that I don't think is the driver quarter-over-quarter as much as we did have kind of not a -- I wouldn't call it unusual. We had within the range of normal. We had higher level of fee income in the prior quarter versus this quarter and that drove a big piece of that. I think the growth in the premium finance is probably a little bit of drag in that quarter-over-quarter, but even their portfolio yields are improving for us overall. So -- I mean, we're really not seeing yield compression in the commercial finance portfolio, kind of, on a trend basis. Yes, we chatter from quarter-to-quarter as [beam] as the things happen.

Okay, great. And then one last one for me. Can you kind of just touch on your outlook for loan growth? Are there any segments you expect to pullback as this is a sustainable pace going forward on a core basis? I get you'll be growing off a larger base. But how do you feel on the future?

We talked about Q2 was an anomaly. We're happy to have that level of success. And Q1 this summer -- or Q3 rather this summer was a bit slow for us, but really picked up substantially post-Labor Day. So overall, we were happy with that mix of commercial finance and commercial real estate growth. The outlook at this point looks similar for Q4. I think we'll see a mix of commercial finance driven in large part by Triumph Business Capital as well as we've got some real estate projects in the works, and I think we'll close, perhaps, a similar Q4 quarter.

And Nick, as I look out, just beyond Q4 and into the future, one of the things that excites me for TBK is, first of all, it's not lost on us what is going on in the economy and that we've got some tailwinds there. But when we look at the pipeline, I mean, yes, Triumph Business Capital has exceeded expectations. Invoice sizes continue to grow even after this quarter ended, which just is going to go straight to the bottom line. That's great. TriumphPay could be tremendous opportunity. But it's not just a forward-looking pipeline of factoring or commercial finance growth. I see what we're doing in our CRE business. We have a 175% concentration in CRE. We've purposely been judicious in how we wanted to grow there. So we're excited about the opportunity there with some larger projects, lower loan-to-value projects with good sponsors because we have the balance sheet room and the ability to do that without becoming overly concentrated. So -- in commercial finance as a whole, in our ABL and equipment finance group, I think, there's growth opportunities. And not to mention just in our traditional community bank platform, which is now a bigger platform. So I think we're pretty optimistic maintaining a loan growth percentage relative to where we were certainly this quarter and excited really about the diversification within that loan growth pipeline for the future.

Our next question will come from Brett Rabatin with Piper Jaffray.

Wanted to ask, first, Aaron, can you -- I know you're talking about wait for the details, but this development in Dallas and you're going to do it differently. Does that mean we're going to look at '18 and see a much higher spending rate on a commercial physical bank build-out? And can you talk maybe about how much you might be spending on technology and the Treasury Management in new platform?

Yes, I'm not prepared right now to give you specific numbers. Look, it's a branch. Right? So on the whole of our entire expense base, I don't think it's not going to be a game changer. I mean, directionally, it will certainly be increased expenditure but we think that will pretty quickly because like I said of the pent-up demand, the premarketing we will have done pay off. As far as on the Treasury Management, we're not building -- this is not something like TriumphPay, for example, where there has been millions of dollars spend over time in developing that technology. When we do that, that'll be the top-of-the-line, off-the-shelf product from our current provider. So it's an incremental expense rate. So -- I mean, I think the story is, you should expect to see absolute expense growth in 2018 as we make these investments but I don't think it's a sudden leg up. I mean, you'll see it start to come into earnings -- into the expense run rate and it probably -- you won't see much of it in Q1. It'll grow as the year goes on.

Okay. This isn't the next stairstep at the next growth phase of your company, so to speak.

Yes, sir.

Okay. And then the other thing, just on the margin, it seems like if you have some continued mix shift change towards the commercial financial margin could actually move higher and rates maybe could help. But then, I guess, everyone's focused on deposit betas. And I guess, I'm curious as you're thinking about your funding over the next few quarters, just I'm curious on your thoughts on the margin and how you it playing out?

I'll answer generally and then let Bryce correct or explain anything I get wrong. But -- look, our incremental cost of funding right now is certainly higher like everybody, I'm sure, than what our average cost is today. We could absolutely go out and turn on the deposit engine and bring in a lot of deposits in 90 days or 180 days. Our sensitivity is we don't think doing that and repricing our entire existing deposit customer base is good for the long-term value creation for our investors. So we've instead chosen to be judicious. If there are markets where we can maintain time deposit rates that are at a discount to more -- especially in rural markets to more urban markets, then we think that's what we're supposed to do. That's the smart way to grow rather than just blast out a nationwide CD rate that just makes people lined up out at the front of your bank. We can certainly do that. So -- I mean, as I sit here and look at things today I expect, and I don't have a crystal ball and I'm not an economist, but in 2018 we certainly expect our cost of funds is going to go up. I'd be shocked if it didn't. We think we'll generate core deposit growth undoubtedly through what we talked about in Dallas through better marketing, better technology. We certainly would be surprised if we were able to do that at the rate at which we grow assets. That's just the nature of our business. So M&A will help. Again, we have a very specific focus when we do M&A about what we're after. So that could certainly help. But just the trend lines, overall, to support the continued growth of our organization, our cost of funds should go up. As far as where we're on assets, as you look at -- it seems fairly stable. And certainly to the extent that we have tailwinds and factoring which, by a large margin, is our highest yielding loan product, then that would hopefully offset that and continue to maintain sort of the similar NIM profile that we've had in the last few quarters.

I might just clarify whole thing on -- if you don't mind, on deposit and beta, I mean just to make it clearer in our retail branch system, we've not had to and we have not adjusted our rates up in response to market or competitive pressure. So the rise you're seeing in deposit costs this quarter are really a mix shift in the growth that we're creating net-net as we turn the portfolio underneath and reprice it on more the national pricing scale.

Our next question will come from Steve Moss of FBR.

You guys had really good growth here in your commercial portfolio. But I was a bit surprised that the loan loss reserve actually went down 2 basis points quarter-over-quarter. I was kind of wondering if you could help us on the underlying dynamics and how we should think about the reserve ratio going forward.

Sure. I mean, I think, clearly, we pointed out, I think, on the call that this quarter in particular that we had net charge-offs of basically 0. It was aided a little bit by some nice recoveries in here, net-net in there. So that was a benefit for this particular quarter. I mean, if I just kind of play with the math on provision expense going forward on future loan growth, of course, it will be dependent on the mix of that, but it's probably going to be on average something like 80 to 90 basis points that we'd be providing on net loan growth on kind of what we have calibrated today on the provision.

Okay, that’s helpful. And then, with regard to factored receivables, good growth this quarter. I'm assuming some of the growth may have been due to higher gas prices in part of the quarter. I was just kind of wondering how should we think about fourth quarter growth and trends there?

Yes. So there are a lot of things going on in transportation and the market moves fast. I certainly think you're correct that diesel prices have had some effect, although our analysis is just demand in the spot market has been driven to some very high levels. If we sit here today and look at where our average invoice purchase price is today versus what's reported for this past quarter, it is again significantly higher. So we see a lot of tailwinds in that business because, as you know, I mean, the invoice size doesn't create any more or less work for us. And so it's incredibly profitable incremental growth when those invoice sizes stay high, which it feels like to us and if you read the literature in the industry is going to happen. Something I'd point out to you that we do control that affects growth in that line of business. In Q3 of 2017, we added 235 net new clients. That's more new -- net new clients than we added the entire period of Q1 to Q3 of 2016. And we think that is a result of all the investments we've made in that business of superior technology, superior marketing, name recognition. Because as long as we're generating net new client growth, then we're going to have -- I mean, it's just academic, we'll have exposure to more invoices. And you're operating that on the framework, the infrastructure we've built out there. So all those things considered, I would expect another pretty outstanding quarter from Triumph Business Capital in Q4 and I think it can certainly continue for the foreseeable future.

Our next question will come from Gary Tenner with D.A. Davidson.

I have a couple of more questions on the factoring business. The yield in that business in third quarter came down a bit. Is there any -- is that just a function of timing of clutching on the invoices or anything structural in terms of maybe penetrating into some larger clients that maybe the discounts are a little bit skinnier on the (inaudible)?

I think it's both. But they're clearly -- we've, I think, picked up more fleet clients, which you're going to pick up more invoices per client at slightly lower rates.

Okay, great. And then you've alluded to this a bit, but certainly the pickup in the average invoice price up over $1,500 this quarter. I imagine that September number was quite a bit higher just given the spot rate impacts post hurricane. Is that fair?

I think we're running -- I think month-to-date right now, we're running around $1,650. So yes, significantly.

Great. And just wondering if you have any sort of updated thoughts on what the impact of ELD coming at the end of the year would do to average invoice prices or just to your overall portfolio ex any additional growth?

We still -- it's a same thing. As I said before, we just don't know. I mean, I know there's a big push right now to get the implementation of ELD delayed for a year. I have no idea whether that will gain traction or not. I know that President Trump spoke to a bunch of truckers and I enjoyed reading the hashtags about ELD or me as the independent truckers pointed out. Rightfully so, I happen to think how the hours of service rules are negative for them. So -- look, what we know is that the day after this gets implemented, freight's still going to have to move. And if you look at, say, for example, Warren Buffett's investment in Flying J, right? We don't know about autonomous trucking. We don't know about battery-powered trucks. We don't know about ELDs. But what we do know is a lot of freight has to get from the coasts to all across the United States and the only way I know it moves is through truckers. And I don't see that -- I think that actually increases in 2018, and so we think we're as well equipped as anybody to participate in that market. Whatever volatility comes from ELD or not, we still think it's -- the future is pretty bright for us.

(Operator Instructions) Our next question will come from Matt Olney with Stephens Inc.

You've already addressed all my questions on the factoring, so appreciate that. But I want to circle back on commercial real estate and it sounds like there're some nice opportunities there. Can you just kind of speak to the pricing, the terms you're seeing right now within CRE? And then, by geography, is this growth going to be in footprint? And if so, which markets do you think a lot of CRE growth will come from?

Matt, it's Dan. Most of the growth is coming in 2 pockets. It's either the higher quality, lower LTV, I think of that as 60%, 65%, a bit lower yielding, multifamily or office out of our Dallas office. Most of that is in this geography. The other component of real estate growth is construction and development, and we're seeing that growth in the Midwest market. Those terms likewise are similar, relatively modest LTVs were in that 70%, 75% range. Yields are pretty consistent across the board. We are going to see, and as we saw in Q3, more draws under existing C&D facilities, not necessarily new commitments in that process. So those are really the 2 areas where we've seen growth over the last quarter.

Okay, that's helpful, Dan. And on the expenses, in the prepared remarks, I believe you mentioned the fourth quarter outlook all for operating expenses at $30.5 million. Did I get that correct? And is there anything nonoperating in that number? Or is that the clean run rate kind of a core number going forward?

This is Bryce. You got the number right. $30.5 million. I mean that's our estimate of kind of a clean run rate number for that quarter, but that also includes again like Valley not being in there for the full quarter as a reminder.

And ladies and gentlemen, this will conclude our question-and-answer session. I would like to turn the conference back over to Mr. Aaron Graft for any closing remarks.

Thank you all for joining us today. We look forward to seeing you down the road.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.