Trinity Capital Inc (TRIN) 2021 Q3 法說會逐字稿

Good afternoon. My name is Ashley, and I will be your conference operator today. At this time, I would like to welcome everyone to Trinity Capital's Third Quarter 2021 Earnings Conference Call.

Our hosts for today's call are Steve Brown, Chairman and Chief Executive Officer; Kyle Brown, President and Chief Investment Officer; David Lund, Chief Financial Officer; and Sarah Stanton, General Counsel. Gerry Harder, Chief Credit Officer and Michael Testa, Chief Accounting Officer are also present. Today's call is being recorded and will be made available for replay at 8 p.m. Eastern Time. The replay dial in number is (800)-839-5685 and no call ID is required for access. (Operator Instructions)

It is now my pleasure to turn the call over to Sarah Stanton. Please go ahead.

Thank you, Ashley, and welcome everyone to Trinity Capital's Earnings Conference Call for the Third Quarter of 2021. Trinity's third quarter 2021 financial results were released just after today's market closed and can be accessed from Trinity's Investor Relations website at ir.trincapinvestments.com. A replay of the call is available at Trinity's webpage or by using the telephone number provided in today's earnings release.

Before we begin, I would like to remind everyone that certain statements that are not based on historical fact made during this call, including any statements relating to financial guidance may be deemed forward-looking statements under Federal Securities laws. Because these forward-looking statements involve known and unknown risks and uncertainties. There are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. We encourage you to refer to our most recent SEC filings for information on some of these risk factors. Trinity Capital assumes no obligation or responsibility to update any forward-looking statements. Please note that the information reported on this call speaks only as of today, November 4, 2021. Therefore, you are advised that time-sensitive information may no longer be accurate at the time of any replay listening or transcript reading.

With that, allow me to introduce Trinity Capital's Chairman and CEO, Steve Brown.

Thank you, Sarah, and thank you to everyone joining us today. The third quarter of 2021 saw accelerated momentum for Trinity as we continue to execute our plan and delivered on all key financial and operating metrics.

These results were highlighted by net investment income of $0.42 per share and growing our NAV by $0.37 from Q2 to $14.70. From an origination perspective, we set out a new record with more than $151 million in gross fundings leading to net portfolio growth of $64 million on a cost basis and expanding our investment portfolio to $638.7 million on a cost basis.

As Kyle will expand on later in this presentation, Trinity is benefiting from the overall vitality of the thriving VC operating environment while acknowledging the macro tailwind in our industry, we do want to underscore our successful execution since entering the public markets. In short, we're doing what we said we would do. By building a best-in-class team, we're leveraging relationships and networks with top VCs around the country and beyond to capture market share and benefit from unprecedented VC industry growth. Trinity has emerged as a partner of choice and we have no plans to slow down.

I'd like to touch on just a few highlights from the third quarter. Our growing portfolio contributed to the strong operating performance in Q3, allowing us to declare a dividend of $0.33 per share, an increase over our prior quarter and in line with our goal of increasing our dividend as we grow our platform. We originated $258.2 million in new loan and equity commitments, and more importantly, funded $151.2 million in gross deployments across 25 portfolio companies. Q3 net investment income was $11.1 million or $0.42 per share. This compares to net investment income of $10.1 million or $0.38 per share in Q2 of 2021. Our credit quality and the portfolio remained strong with 99% of our debt investments performing. As of September 30, total liquidity including cash, cash, equivalents and availability under our credit facility was over $206 million.

We've been working hard on enhancing our capital structure and leveraging the balance sheet to increase financial flexibility in support of our continued portfolio growth. In August, we issued $125 million in 4.375% bonds lowering our overall borrowing cost as we raised our leverage levels to 0.8 from 0.6x at the end of the second quarter. We will continue to manage our overall cost of funding to drive improved returns for our shareholders. Further, on October 27, we completed a new 5 year $300 million credit facility led by KeyBank.

Looking to the end of the year and beyond, we are confident about Trinity and our unique venture lending and equipment financing platform's ability to continue to grow and scale. We remain well positioned to continue deploying the capital raised and building a portfolio of senior and subordinated secured loans and equipment financings to emerging growth companies. We have been able to continue growing the portfolio even with unexpected payoffs while enjoying the additional income from prepayment fees and accelerated final payment fees.

As we mentioned on our last call, we have filed an application with the SEC for exemptive relief to a former registered investment adviser. If approved, we believe the RIA will provide financial flexibility to fund larger transactions that are synergistic to the public BDC. As a reminder, we expect this process to take between 9 and 12 months to complete. So to recap, we're performing at record levels, we've strengthened our team to further that performance, and we've enhanced our financial profile to support accelerated portfolio growth.

Before I turn it over to Kyle to share more about the encouraging macro backdrop, I want to thank our most valuable asset at Trinity, our team. It is their diligence, their relationships, their experience that have made our record performance possible. We believe that Trinity is unique among both venture lenders and the overall BDC landscape. We have the right team and the right strategy to continue to capitalize on a thriving operating environment offering capital solutions to growth stage companies across a broad technology sector.

With that, I'll now turn the call over to Kyle Brown, our President and Chief Investment Officer for some further thoughts on our progress and more detail on the market. Kyle?

Great. Thanks, Steve, and good afternoon, everyone.

We continue to accelerate growth in Q3, which has allowed us to make notable progress toward our strategic goals and growth initiatives. We've built upon momentum from the first half of the year, capitalizing on strong market tailwinds from an increasingly robust VC environment, and continued execution from our growing and seasoned team. Our people at Trinity played an important role in the company's success. Investing in the current individuals and teams that have proven to be the company's backbone as well as strategically expanding our bench of investment professionals will create a flywheel effect for the company, enabling increased deal flow and optionality in the quarters to come. We continue to add to our back office here in Phoenix, Arizona, as well as key additions to our originations team in major markets.

Turning now to the investment portfolio. The composition of our portfolio remained consistent with manufacturing once again making up over 1/4 of our total portfolio, which is primarily our equipment finance business. Professional, scientific, and technical services made up 18%, followed by information making up 9%. Our portfolio's geographic footprint remained weighted toward domestic opportunities in both the West and Northeast. We expect to grow this footprint, both in terms of depth and breadth through our investments in key markets on the East Coast, South and other regions.

To that end, we continue to invest in our originations team. In the third quarter, we brought on Ryan Thompson as Managing Director of our Originations in Austin, Texas. Ryan is a seasoned finance professional and joins us from Silicon Valley Bank. In addition, earlier this week, we announced the appointment of Phil Gager as Managing Director out of Boston. Phil is an experienced venture lender with extensive contacts throughout the Northeast region. With these additions, we have now expanded our originations team to 13 professionals with deep and established high-quality networks among executives and sponsors of emerging growth stage companies. Having boots on the ground in 2 key innovation markets of Austin and Boston, and so it position us to drive our originations for both lending and equipment financial opportunities going forward.

Diving deeper into our portfolio composition. At fair value, approximately 81% of our debt portfolio over $469 million is comprised of secured loans and 19% or $109 million is invested in equipment financing. This represents a slight sequential decrease in equipment financing, primarily due to early repayments from 2 equipment portfolio companies. This vertical remains a focus of growth for us, and we expect its percentage of overall mix to increase in the fourth quarter due to record commitments in Q3. As a reminder, equipment loans generally fund over subsequent periods to the commitment as the portfolio companies put equipment into their operations. The balance of our portfolio, approximately $99 million is comprised of equity and warrants.

Structurally, gross deployments during the quarter were $151 million across 25 portfolio companies. This included $77 million in gross deployments across 9 new portfolio companies and $74 million in gross deployments to 16 existing portfolio companies. Gross deployments were partially offset by $92.4 million in debt repayments, of which $74 million was from early repayments. We finished the quarter with $204 million of unfunded commitments of which only $400,000 was contractually committed to one portfolio company.

We've continued our record origination space. Trinity has accomplished its fourth consecutive quarter of net portfolio growth since becoming a BDC in Q1 of 2020. With strong visibility into the fourth quarter already, we continue to accelerate. We expect the new additions to the originations team to support our growing pipeline of lending and equipment financing opportunities. Our record commitments and fundings in Q3 are a direct result of our team's ability to grow and expand our pipeline activity for the first 9 months of the year.

In addition to liquidity opportunities we mentioned on our last call, both Matterport and Lucid Motors' listing on the NASDAQ in July, 2 more of our portfolio companies have announced business combinations with SPACs and one portfolio company has publicly registered for an IPO. On August 10, Greenlight Bioscience announced a merger with Environmental Impact Acquisition Corp. Subsequent to quarter end, Rigetti & Co announced a business combination with Supernova Partners Acquisition Company too. And on October 18, Backblaze filed a registration statement on Form S-1 with the SEC for its IPO.

Lastly, in July, our portfolio company, Birchbox was acquired by FemTec Health. This transaction resulted in the assumption of our loan to Birchbox and the issuance of Trinity to -- of approximately 1.1 million shares of common stock in FemTec. All 4 of these announcements demonstrate the strength of our overall portfolio, both in desired verticals and financing arrangements, spanning debt and equity financings. We will periodically provide updates on these companies as they move forward with their eventual listing plans.

As we've mentioned previously, the lockups on our common shares in Lucid and Matterport expire in January. We are not long-term equity investors and more prudently and methodically divest our equity positions in these companies to maximize the capital returns on these investments for our stockholders. As capital continues to flow into technology and specifically the venture capital market, we expect more growth stage companies to seek liquidity events and exit opportunities. That's why we've taken every possible step to optimize our capital structure and further strengthen our pipeline propensity to underwrite and eventually deploy capital. We are built for scale and building Trinity for the long term, assembling a world-class team to execute across various economic cycles. That said, we are encouraged by the continued strength of the venture capital market even amidst the prolonged pandemic and see an exciting opportunity to build our momentum and start fast in 2022.

Now with that, I'll turn the call over to David Lund, our Chief Financial Officer, to discuss our financial performance in more detail. David?

Thank you, Kyle, and thank you, everyone, for joining us on today's call. As you've heard today, we continue to execute against our long-term strategy, building a best-in-class venture lending platform, and diversifying our balance sheet to optimize our ability to further grow our portfolio in the active venture capital market. In addition to our strong investment activity and operating results, we bolstered our balance sheet and improved our liquidity profile.

Once again, our portfolio grew at a record pace. During Q3, we entered into $258 million of new commitments and deployed $151 million across 25 portfolio companies. This more than doubles our year-to-date commitments to $509 million, which is well ahead of plan in our first year as a public company. We funded $119.2 million in secured loans to 15 portfolio companies. We funded $28.8 million in equipment loans to 7 companies, and we made $3.3 million of equity investments in 5 portfolio companies.

Gross deployments were partially offset by approximately $92.4 million in debt principal repayments, of which $73.6 million was from early principal repayments and $18.8 million was from normal amortization. In addition, we received $800,000 in principal proceeds from sales of our warrant and equity investments. Of the early repayments, $32.7 million was from equipment financings and $40.9 million was unsecured loans. Levels of early repayments, both in our portfolio and industry-wide continue to remain high, reflecting an active year in equity and debt capital markets. We remain encouraged that so many of our portfolio companies are finding new sources of funding, allowing them to continue to grow while paying back our capital and generating returns on our investments.

As a result of the $58 million of net investment activity and approximately $6.2 million of accretion of OID and $0.7 million of net realized gain, our portfolio grew at cost by approximately $64 million or 11.2% to $639 million compared to $575 million at the end of Q2. On a fair value basis, our portfolio increased from $598 million to $677 million attributed to net deployments and other activity I just mentioned plus $15.4 million of net unrealized appreciation. This $15.4 million increase was attributed to $18.4 million of unrealized appreciation in our equity and warrant portfolio offset by $3 million of depreciation in our loan and equipment finance investments.

The unrealized appreciation in the warrant and equity portfolio was driven by a reversal of $10.5 million in unrealized losses, primarily in connection with the sale of one portfolio company and net unrealized appreciation of $7.9 million. The unrealized depreciation in our loan portfolio was attributed to the flip of $1.2 million of unrealized appreciation to realized gains and net unrealized appreciation of $1.8 million related to mark-to-market adjustments in our loan and equipment finance investments. Approximately 60% of our loan portfolio is in floating rate securities, up from 49% at the end of Q2 as we continue to reposition our portfolio to have a higher concentration of floating rate securities.

Now let's dig deeper into Q3 operating results. On a GAAP basis, we recorded total investment income of $21.8 million comprised of approximately $20.7 million in interest income and $1.1 million in fee income. This represents a $2.3 million or 11.7% increase over the $19.5 million of total investment income recorded during the second quarter and a year-over-year increase of 61% over the $13.5 million recorded in Q3 2020.

Looking at the year-to-date period, total investment income increased by 48% to $58.6 million from $39.6 million in the first 3 quarters of 2020. This increase was primarily related to the record growth in our outstanding debt portfolio, income derived from early repayments, and our work to increase the yield of our investments across the board. Our effective yield on the portfolio for Q3 was 15.8%, which was in line with the prior quarter. For the year-to-date period, effective yields were 15.8% as compared to 14.6% in the prior year period. We incurred a total of $5.1 million of total interest expense and amortization of deferred financing costs on our various debt facilities as compared to $4.4 million in Q2.

As we have mentioned, we took definitive steps in the third quarter to strengthen our balance sheet, closing an offering of $125 million and 4.375% notes due in 2026. These notes were the primary contributor to the increase in interest expense for the quarter. Our ongoing growth and success as a company have allowed us to lower our overall cost of debt and will help us drive incremental returns to our shareholders in the quarters ahead. For Q3, our weighted average cost of debt including interest and fee amortization was 7.1%, which was a decrease from 7.6% in the previous quarter. The decrease in the weighted average cost of debt was primarily due to the issuance of 2026 notes and a lower average balance outstanding under our credit facility.

Our SG&A expenses were approximately $5.6 million during Q3 as compared to approximately $5 million during Q2. The increase of approximately $600,000 or 11.8% was primarily driven by higher variable compensation expense, higher consulting fees, and slightly higher expense related to our new Phoenix headquarters. During the quarter, our Board of Directors approved the issuance of restricted stock awards to employees and awards to directors under the non-employee plan. A total of approximately 593,000 shares were issued, and we incurred approximately $149,000 of expense during Q3. We estimate the ongoing quarterly expense related to these awards to be approximately $800,000 per quarter.

As a result of this operating activity, net investment income for the third quarter was $11.1 million or $0.42 per share on a basic basis and an increase of 2.3% as compared to $10.1 million or $0.38 per share in the preceding quarter on a basic basis. As I noted earlier, we recorded net unrealized appreciation of $15.4 million in our investment portfolio. During the third quarter, we recognized net realized gains of $666,000 primarily related to the realized gains of $2.7 million from early repayments of equipment loans and $679,000 in connection with 2 warrant transactions offset by a $2.7 million loss on the sale of one portfolio company.

Net assets increased by approximately 5.1% to $399 million or NAV of $14.70 per share compared to Q2 net assets of $379.7 million or an NAV of $14.33 per share. The quarter-over-quarter increase of $0.37 per share in NAV was primarily the result of the unrealized depreciation as well as net investment income that exceeded our declared dividend of $0.09 per share -- by $0.09 per share.

Our investment portfolio continues to perform strong with approximately 99% of our portfolio performing. We currently have 2 portfolio companies on non-accrual with a carrying cost of $13 million and a fair value of $7.6 million, representing just 1.3% of the fair value of the debt investment portfolio. Our average risk rating for the quarter was 3.1 based on our 1 to 5 risk rating scale with 5 indicating very strong performance. This rating was steady with 3.1 in the prior quarter.

Moving to liquidity. Available liquidity at September 30, 2021, was approximately $206 million including approximately $25 million in cash and cash equivalents at a borrowing capacity of $181 million under our credit facility subject to existing terms and conditions. Our leverage increased to 78% from 65% in the prior quarter driven by our additional borrowing during the third quarter as we target a long-term leverage ranging between 115% and 135%.

In addition, as we announced this week, we closed a $300 million credit facility with KeyBank. KeyBank is leading the facility with a $75 million commitment and the facility can accordion to $300 million as we add banks to the lending syndicate. Rates under the facility range from LIBOR plus 2.85% to 3.35% with variable advance rates depending on the characteristics of the loans in the portfolio.

Finally, regarding our dividend, on September 13, 2021, our Board of Directors declared a cash dividend of $0.33 per share for the third quarter of 2021 that was paid on October 15, and which generated coverage of 127% by our GAAP NII earnings for the quarter. We anticipate declaring a dividend for the fourth quarter of 2021 during December subject to our Board of Directors' approval.

And with that, I'll now open the line for questions. Operator?

(Operator Instructions) And we will take our first question from Ryan Lynch with KBW.

Congrats on a nice quarter, guys. I wanted to first talk about your guys' originations this quarter. Obviously, it was a record quarter. I wanted to know if you could kind of give some commentary on how much of the record quarter was driven by just the overall strong activity that we've been seeing broadly in the venture capital ecosystem versus the investments that you guys have made and continue to make in growing your platform? And what I'm hitting at is if there is a slowdown in the overall venture capital system, how confident are you, you can still put up strong quarters like this in that scenario?

Thanks, Ryan. This is Steve. I think that the growth that you're seeing is mainly a result of the investment that we're making in the team. You've seen the folks that we've added sort of quarter-over-quarter. We've had 2 recent announcements. You know that we have made a commitment to grow our team, build out the origination platform. There's no question there's tailwinds in the market, and everybody is experiencing that right now. But I believe that we at Trinity have planned for this growth and are building the team forward. And I think what you're seeing is mainly a result of that because our underwriting hasn't changed. In fact, it probably continues to get tighter as we move along. So I would attribute it to the growth of the team.

Okay. Fair enough. The other one that I had was, can you remind us and give us an update on what is the Board's sort of policy from a dividend standpoint? Obviously, your earnings continues to go up substantially, it was significantly above the dividend this quarter. Obviously, there's some variability on a quarter-to-quarter basis depending on accelerated fee income. So can you just remind us what is your -- what are the Board's sort of philosophy on dividend payout relative to operating earnings?

Yes. Let me start that, and then David, you can jump in at any time here. The way that we're -- so first, we've been saying from the start, we want to grow earnings, and we want to grow our dividend. We've continued to do that, and we plan to continue to do that. When we think about at the Board level setting that dividend, we look at what we think our sort of base income is notwithstanding I would say capital gain income and fee income. And when we look to set the dividend, we're thinking about that as we set the dividend, and we think about that relative to whether or not we can continue to grow it. So generally speaking, we've grown the income. We've grown our dividend. We plan to continue that. And as we set the dividend each quarter, we're thinking about that recurring or base income from our interest versus one-time fees. David, any thoughts on that or?

No, I think that's right. We're looking to get to a stable platform in terms of our dividend with the potential to pay out special dividends through the course of the year or at the end of the year as needed to make sure that we distribute 98% of our earnings for the year.

Okay. And then just one last one, if I can, and I'll hop back in the queue. On Slide 20, you guys provide the NAV bridge. You guys had a decline or negative impact of $0.32 from the effect of the shares. I'm assuming that's related to the 593,000 of restricted stock issue. I'm just wondering if you can provide -- was this a one-time? Obviously, you guys are going to continue to pay a restricted stock, but is it -- was this kind of a pull forward of future quarters or could we expect this to happen sort of on an annual basis? I know you guys are going to be recording about $800,000 from an expense standpoint, but any color on forward quarters of how this restricted stock is going to affect NAV?

This is Dave. We will be issuing restricted stock awards in the future years as well probably on an annualized basis with our Board, and all of that subject to Board approval and Compensation Committee approval. So you will see expenses in the forward years as well related to stock awards. But we don't have a specific number planned at this point that we've put in front of the Board.

We'll take our next question from Casey Alexander with Compass Point.

I want to double check what I heard. You said you had $32 million worth of equipment finance loans that prepaid during the quarter. Is it that -- I mean, that seems like an unusual occurrence because doesn't that pull forward all of the scheduled payments out to the end of the loan? And does that mean that there's a one-time bulge in your income in the quarter from those equipment finance loans being prepaid?

So Casey, this is Steve. The answer is yes. We had 2 equipment financings prepay. They were unexpected, and that's a great occurrence. It happened, and you do pull all of the payments forward when that occurs. Relative to how much that added to the income, we could get that number -- is it $2.7 million? Yes, $2.7 million in realized gains. And then equating that to sense, maybe $0.10 or thereabouts. So yes. But yes, it was unexpected, and it's great because we don't lose any income. We get it all right now. We have the cash, and we can, and will redeploy it.

It's worth noting that we retain those customers as well.

Yes. That's an important point.

We retain those customers as well and expect future deployments to them as they grow in the future.

Yes. Right.

Yes. No, I was actually, those came in as realized gains, that was the part that I missed because I would have thought that they would have come in as income.

For GAAP accounting purposes, some of the acceleration gets treated as long-term capital gains below the line as opposed to above the line investment income.

Okay. And secondly, there was some migration into your lowest credit bucket, which was about $6.9 million. There was a de minimis amount there last quarter. Can you give us some color on what you're doing on that particular situation?

I'll let Gerry take that one for you, Casey.

Sure. Thanks, Casey. So yes, we did -- so on the non-accrual, we had 2 companies at Q2, we have 2 companies at Q3. One of them is a very small unsecured financing that is a performing company, but we're not recognizing the income along the way because it's an unsecured note. The second, so we actually had a promotion out of non-accrual, one of our portfolio companies. We're rehabilitating that loan and it's now performing. So we're pleased with that. Another company from our watch list did slip in the non-accrual in Q3. And we're actively working with that management team to find a home for that business or a plan that allows them to continue to operate and get back to profitability. In particular, business is specifically impacted by supply chain issues in semiconductors. And so they're weathering it, and we think they're going to get through it.

We'll take our next question from Christopher Nolan with Ladenburg and Thalmann (sic) [Ladenburg Thalmann].

On the new credit facility, how are asset-based loan -- the advance rate for asset-based loans treated compared to the normal venture debt loans you guys do?

Yes. So Chris, this is Dave. So the -- both assets pools, the secured loans and the equipment loans can go into the facility. We are actually getting a higher advance rate up to 64% on our equipment-based loans as opposed to a borrowing up to 60% on our secured loans.

Great. And then I guess, on the issue of supply chain disruption given that you have such an exposure to asset based loans, how does that affect the companies that you lend to? I would think they'd be more susceptible to supply chain disruptions in service companies.

Gerry, what would you say in general to that?

Yes. I mean, if you look at the portfolio, we're very diverse across different industry sectors. So even within our equipment financings and manufacturing, we've got semiconductor, we've got wireless Internet, sustainable packaging. So our portfolio is really very diverse across industries. And so, we don't feel we've got any particular exposure. Some portfolio companies are a little bit more challenged than others. But in general, we're getting through it. And I think we're starting to see some of those issues ease a bit as we get toward the end of this year. So we think we've got the portfolio risks properly accounted for, and we're optimistic about the performance of our portfolio companies.

(Operator Instructions) And we'll go next to Sarkis Sherbetchyan with B. Riley Securities.

Strong quarter, guys. I think Kyle mentioned pretty good visibility in the fourth quarter already. I just want to get a sense if you expect strong net origination activity here in the fourth quarter, just kind of in light of the backdrop for elevated prepayments. It seems like that's going to continue.

Yes. I don't know that we can predict again what's going to happen on the prepayment side of the world. It's very difficult to do so and don't want to do that. We have been talking about growth. We've been talking about record levels of opportunities, which is the top of our funnel quarter-over-quarter, and that continues. And as we've said each quarter, that's the best indicator of what originations will look like. And so far, we've been able to outpace the levels of payoffs that have occurred meaningfully and add to the portfolio on a quarter-over-quarter basis, and we expect that to continue.

Understood. Any kind of help or comments around dollar figure to the pipeline you're looking at today?

Pipeline size?

Well, I don't know that we can give out specific numbers on exactly what the pipeline numbers are, although I can't tell you they are and have been growing. And I mentioned in the prepared remarks, but we had a record deployment, but we also had record commitments this quarter. And so, we believe that we will just continue to perform and do well. Hopefully, close those transactions, which would lead the great results if we can continue to execute.

Yes. Just a reminder too. I mean, Kyle mentioned in the prepared remarks, we had over $200 million, I think $250 million of commitments, and close to half of that was in the equipment side of the world. And those equipment fundings happen over time, and they're sort of planned out, and we know what's going to happen. So there is good visibility with some of those commitments to actual funding, so.

No, that's helpful. And just one last one for me. I guess, as we kind of sit here, just wondering if you can maybe provide some real-time color on loan pricing trends and if spreads are stable, tightening, or widening for the investments you're looking to underwrite?

We've seen a lot of competition. We have not to date seen our pricing trend downward notably. And we've not seen the amount of accepted term sheets to the amount of term sheets we're issuing depart. So it's competitive. We're having to make sure we add value above and beyond just pricing, which is something that we -- is something we are unique, and we focus on the relationship side of our business, but that seems to be holding and working for us. We've not had the pressure on pricing.

There are no further questions at this time. I will turn the call back over to Chairman and Chief Executive Officer, Steve Brown, for any additional or closing remarks.

Thanks so much. Just want to say to the investors, thank you so much for your support -- continued support. We're just excited about what we've accomplished this year, and we are going to continue to work hard on your behalf to drive returns for all of us. So we appreciate your support, and we look forward to talking with you again next quarter. Thank you.

Thank you and this does conclude today's program. Thank you for your participation. You may disconnect at any time.