Primis Financial - Q4 2023
January 26, 2024
Transcript
Operator (participant)
Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Primis Financial Corp Q4 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press Star, then the number one on your telephone keypad. If you'd like to withdraw your question, press Star one again. I would now like to turn the conference over to Matt Switzer, Chief Financial Officer. Please go ahead.
Matt Switzer (EVP and CFO)
Good morning, and thank you for joining the conference call. Before we begin, please note that many of our comments during this call will be forward-looking statements, which involve risk and uncertainty. There are many factors that could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements. Further discussion of the company's risk factors and other important information regarding our forward-looking statements are part of our recent filings with the Securities and Exchange Commission, including our recently filed earnings release, which has also been posted to the investor relations section of our corporate site, primisbank.com. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events, or changes to future operating results over time. In addition, some of the financial measures that we may discuss this morning are non-GAAP financial measures.
A reconciliation of the non-GAAP measures to the most comparable GAAP measures can be found in our earnings release. With that, I will now turn the call over to our President and Chief Executive Officer, Dennis Zember.
Dennis Zember (President and CEO)
Thank you, Matt, and thank you to all of you that have joined our Q4 conference call. Before I get into our results for the quarter and the year, I wanted to let the investing public know that our company CIO, Cody Sheflett, passed away suddenly on the afternoon of January 16th. Cody was one of the most visionary CIOs I've had the good fortune of being around. Cody could unquestionably out-dream me and Matt, but he had all the engineering and technical skills to make all of it come to life. On top of that, he pastored our company staff with love and humble attention that drove the unique culture we aspired to build. Fortunately, Cody mentored his staff incessantly for many years to always be prepared, and while I'm confident in the future, our company is reeling from his departure. Now, about our results.
For the quarter, what I think is important is that these results include a pre-tax loss in mortgage of about $730,000, which obviously is timing related and about $1.4 million lower than where we were in the Q3. And while I don't want to steal all of Matt's good news, which I've been known to do, in the quarter, our margin was up, our expenses were down, NPAs down to very low levels, liquidity and capital, strong and getting stronger. Nobody at Primis thinks that we can even see land yet on this journey to top quartile operating ratios, but it's nice to know that we have a lot more wind in our sails.
We took advantage of all the chaos in the industry in 2023 and built momentum that can be clearly seen in improving margins, operating expense control that has us close to 2022 levels going into the new year, and impressive growth in core deposits at levels that drive results. Without any noise in the quarter, our margin was up about 10 basis points, resulting from hard management of all the important factors. We controlled deposit costs, we increased loan yields. Our incremental activity was very accretive. There's more information in Matt's details that are shortly coming, but for the quarter, we opened about $75 million in new deposit accounts, costing only 2.69%, and that funded new loan production of $86 million, with yields of 8.38.
With this kind of activity, the momentum on margins and net interest income is clearly on our side going into 2024, which is critical to continued quarterly improvement in our ratios. Cost controls are equally important, especially in a year when revenue was so pressured. We delivered an impressive second half of 2023 with the changes that we made earlier in the year. We've restructured almost every division, consolidated 8 branches, and leveraged technology to absorb even more of the jobs and tasks that were previously pushing comp levels. This restructuring mindset continued through the Q4 and honestly, into today. And while the improvements we are making are smaller individually, they are large enough to offset growth levels and allow more of the anticipated revenue to make it to the bottom line.
In 2023, we grew deposits a touch better than 20%, with a substantial amount coming through digital channels. A year later, we still have over 90% of the deposit accounts we opened originally, and with virtually no advertising expense, we continue to open accounts almost solely through referrals from existing customers. We are live with business accounts now and focusing that activity really only on referrals for the time being, but the promise of lower cost deposits on this platform is starting to take shape. Our core bank as well outperformed in 2023, with our retail franchise driving substantial deposit activity amidst branch consolidation and major industry headwinds. We've taken Vibe to new levels that we didn't think were possible, and we're starting to see customer referrals for new accounts that need the convenience and the technology we're bringing to the table.
Over the last two quarters, we've opened 4,400 new non-CD deposit accounts with approximately $147 million of balancing, of balances, costing a remarkably low 2.25%. I don't want to convey to anybody that we've cracked this nut or, or that this effort is on autopilot. Moving deposit balances, even with noticeably better tools and technology is through sheer force and grit. But the momentum and success that we've had so far builds confidence in our staff, and we're determined to continue this trend. A few other notable and, and I think important factors for, for our 2023. Our two national divisions, Panacea and Life Premium Finance, had outstanding years.
Panacea was just named the exclusive banking partner of the American Dental Association, and shortly thereafter closed its Series B round, rightly establishing an impressive market value for this concept. Our ownership in Panacea is worth about $20 million, which of course, at this point is unrealized while that entity is consolidated. We anticipate being able to deconsolidate and recognize this gain in the near future, which would give us substantial flexibility to either ramp up share repurchases or increase our growth rate by a touch across the bank. Life Premium had an amazing year, bringing substantial diversification and quality on our balance sheet at yields that are substantially better than CRE. On top of that, they've built remarkable technology to drive efficiency and speed, and they operate with one of the lowest expense burdens imaginable.
Lastly, despite an expected slowdown, despite the expected slowdown in activity and profitability, our mortgage division finished the year profitable with just $600 million in total production. We have recruited all year without big sign-on bonuses, using culture and great technology to build our stable of producers. Looking at the current month, January 2024, our pipeline is up over 25% from a year ago, and so we feel like the revenue opportunity here is much brighter. Turning this over to Matt, I'm pretty excited about what 2024 could bring. Our core bank's never been this strong on expense control or management on core deposit growth and loan quality.
Our divisions are past the concept stage and in places where they will drive the boost to operating ratios that we expect, and our capital and liquidity levels give us all the flexibility we need to be nimble with uncertain economic and rate conditions. So with that, Matt, turn it to you.
Matt Switzer (EVP and CFO)
Thank you, Dennis. I'll provide a brief overview of our results so that we can get to Q&A. But as a reminder, a full description of the Q4 results can be found in our earnings release and investor presentation, both of which are on our website and on our 8-K with the SEC. As Dennis just discussed, our results this quarter include the consolidation of Panacea Financial Holdings or PFH. Results will be discussed relative to common shares unless otherwise noted. Operating earnings per share for the fourth quarter were $8.6 million, or $0.35 per diluted share, versus $7.8 million or $0.32 in the linked quarter, and up substantially from $0.03 in the year ago period. Total assets were $3.9 billion, essentially up a little bit versus September 30.
Excluding PPP loans, which are de minimis at this point, and loans held for sale, loan balances increased 1.5% linked quarter, and that's after selling roughly $31 million, or selling or participating out of roughly $31 million of loans, in the Q4. Deposits were essentially flat. As we discussed previously, we manage excess liquidity by sweeping off excess deposits, of which we had approximately $113 million swept off the balance sheet at December 31. Impressively, and as noted in our press release, average non-interest-bearing deposits were essentially flat for the Q3 in a row, which we think is exciting in the current environment.
Net interest income, excluding accounting noise from a third-party managed portfolio, increased almost $1 million to $27.7 million in the Q4, as funding cost pressures were offset with higher earning asset yields. Core net interest margin, as Dennis alluded to, increased 10 basis points to 3.09% in the Q4. We continue to believe we have a unique advantage due to our two-pronged deposit funding strategy. As a result, in the Q4, core bank cost of deposits increased only 3 basis points versus the Q3. Excluding accounting adjustments, non-interest income was $5.9 million in the Q4 versus $7.9 million in the Q3, largely due to reduced mortgage activity, which we think will is seasonal and will improve in the Q1.
Core non-interest expense, excluding accounting adjustments, non-recurring item, and mortgage, was $18.7 million for the Q4 versus $20.5 million in the Q3. As we discussed in the press release, the Q4 includes expense reimbursement from Panacea Financial Holdings related to division expenses. But in addition to that, the decline is reflective of administrative cost saves that we announced earlier in the year and the consolidation of eight branches in October. The provision for credit losses was $3.1 million in the Q4 versus $1.6 million in the Q3, $3 million of that was due to accounting for a third-party managed portfolio, which is offset by non-interest income gains. Core net charge-offs were $2 million, the majority of which was charge-off related to specific reserves from credits impaired in previous quarters.
Non-performing assets were down substantially to $7.7 million, or 20 basis points of assets at the end of the year. The allowance for credit losses to gross loans was 1.06% at December 31, versus 113 basis points last quarter. Lastly, as Dennis indicated, operating ROA improved 89 basis points in the Q4, the highest level since the Q2 of 2021. We have right-sized the expense base and are confident we can keep grinding net interest income higher with a healthy margin. Combined with additional mortgage activity that we expect in 2024, we believe we still have opportunity to improve profitability even in a tough environment, and are optimistic about our prospects in the near term. With that, we can now open the line to Q&A.
Operator (participant)
At this time, I'd like to remind everyone, in order to ask a question, press Star, followed by the number one on your telephone keypad. Our first question will come from the line of Casey Whitman with Piper Sandler. Please go ahead.
Casey Whitman (Managing Director)
Hey, good morning.
Matt Switzer (EVP and CFO)
Morning, Casey.
Dennis Zember (President and CEO)
Good morning.
Casey Whitman (Managing Director)
Just looking at that core operating expense burden table you have in the release, just coming off, I think it's $18.7 million. Do you still have room to bring that down a bit in the Q1, just with full cost saves coming off, or is this, you know, a pretty good run rate?
Matt Switzer (EVP and CFO)
No. I mean, it's a little artificially low, Casey. I think our guidance previously of $19-$19.5 is still the better run rate. That $18.7 in the Q1 does include some excess expense reimbursement from Panacea Holdings that won't be there in the Q1, even though they will still be reimbursing us for expenses in the division. And it also had some other accrual noise that would offset some of that. So I would say that $19 million-$19.5 million is still the best run rate in the near term.
Casey Whitman (Managing Director)
Okay. But that $2.8 million you referenced in the expenses for the effect of consolidating Panacea, that's just the reimbursement cost?
Matt Switzer (EVP and CFO)
Largely. While they're consolidated, all of their expenses are added to our expenses. But their, the vast majority of their expenses, outside of a couple small things, were related to the, our expense reimbursement.
Casey Whitman (Managing Director)
Okay. And just, I mean, looking at the Panacea relationship, just in the near term, I guess, how does the investment affect the PNL for you guys going forward, or does it not here in the near term? Or just sort of dumb down how it's going to work.
Dennis Zember (President and CEO)
I mean, the incremental profitability from Panacea, what's sort of been hitting the bottom line, you know, spread income, you know, minus their operating expenses, plus a little bit of fee income lately from loan sales and all that. Going forward, especially now that the capital is at the parent, the bottom line is basically our operating hurdle rate times their average outstanding times their total assets. So, you know, I would probably expect—I'd probably expect somewhere $1.7 million, $1.7 million, $1.8 million to be hitting the bottom line pretty consistently until- and increasing obviously as assets increase. Whereas in the past, you know, it might fluctuate.
If they had a big loan growth quarter, we might post, you know, a zero just because we're funding the provision or if we did some recruiting or something like that. The expense reimbursement was basically to establish that, a little bit lower operating hurdle. The operating hurdle going forward is higher. So the expense reimbursement that Matt's talking about was basically just to catch us up for 2023. Going forward, our operating results from Panacea will be higher, and they will be more consistent.
Casey Whitman (Managing Director)
Okay. All right, thank you.
Matt Switzer (EVP and CFO)
And just given-
Casey Whitman (Managing Director)
Just given... Go ahead.
Matt Switzer (EVP and CFO)
I was just going to say, I know this is very confusing. What we tried to do is put things on a as much as possible and allow you to get back to an apple-to-apples comparison for to the last couple of quarters. So if you the consolidation, I mean, right now they only have expenses and most of it is expense reimbursement to us. So if you take all of the line items other than non-interest expense, there's very essentially no impact from the consolidation in those line items. It's still the Panacea division line items, which we've had in our run rate for the last three years. The change is really on the non-interest expense line, and then a lot of that is also offset down below in the non-controlling interest because we only own 19% of it.
So if you're trying to get back to apples-to-apples, start with those revenue line items, basically use the non-interest expense that you and I just talked about as you think about going forward, and that'll get you back to kind of how we have been prior to the consolidation.
Casey Whitman (Managing Director)
Got it. And the $19 million you referenced would include the effect of Panacea, correct? And then you'd add mortgage on top of it?
Matt Switzer (EVP and CFO)
It would include the effect of the future level of reimbursement from Panacea. Yeah.
Casey Whitman (Managing Director)
Okay.
Matt Switzer (EVP and CFO)
As if they weren't consolidated.
Casey Whitman (Managing Director)
Okay. Appreciate that. And then just given where capital is today and the potential to keep growing, I guess just how are you thinking about overall balance sheet going forward, could you potentially start to portfolio more, or sort of how should we think about that?
Matt Switzer (EVP and CFO)
Yeah, I know we've talked, the last couple quarters about mid-single digits growth. I think for 2024, we're targeting more towards, around 10%, overall balance sheet growth.
Casey Whitman (Managing Director)
Okay. Thank you. Last thing I'll ask, just appreciate there's some seasonality within mortgage this quarter, but what's a reasonable outlook for those revenues next year, to, to the extent you can share?
Dennis Zember (President and CEO)
And, you know, we made $700,000-$800,000, $700,000-$800,000 or so in the Q2 and Q3. I think we'd be probably 25% higher than that in the second and Q3. I don't think we normally would have broke even- I mean, excuse me, lost money in the Q4. So I think a little bit of that has to do with some rate fluctuations and, and the Q4 seasonality. But, I mean, we made- I think altogether we made, like, $300,000 in mortgage for the year.
Matt Switzer (EVP and CFO)
On $600 million.
Dennis Zember (President and CEO)
On $600 million. And I, you know, the incremental, I think we probably could be somewhere $900 million, maybe even $1 billion, and it's going to be incrementally much more profitable just given the fixed expense burden there is not expected to grow. If we made $300,000 this year, I, and we were able to increase volume to $900 million, which it looks like we're going to be able to do, probably $3 million.
Matt Switzer (EVP and CFO)
Yeah, that's what I would say, pre-tax.
Casey Whitman (Managing Director)
Sounds good.
Dennis Zember (President and CEO)
Pretty-
Casey Whitman (Managing Director)
Thank you.
Matt Switzer (EVP and CFO)
Yeah.
Dennis Zember (President and CEO)
Yeah. Thank you.
Operator (participant)
Your next question comes from the line of Russell Gunther with Stephens. Please go ahead.
Russell Gunther (Managing Director and Equity Research Analyst)
Hey, good morning, guys.
Matt Switzer (EVP and CFO)
Hey, Russell.
Russell Gunther (Managing Director and Equity Research Analyst)
Just wanted to start, hey, on the loan growth commentary, about 10% for 2024. Can you guys just spend a minute touch on the mix, maybe particularly address the Life Premium Finance and Panacea as well?
Dennis Zember (President and CEO)
I mean, I think Life Premium and Panacea both could. You know, if we let them out of the barn, I think they could probably get good enough growth to move the needle for a much larger bank. So some of what I tell you here is muted relative to what their real opportunity could be. But, you know, Tyler's got great production capabilities, but he's also working on flow agreements and loan sale opportunities. So I don't know that as much of that will hit the balance sheet, probably $100-$150 on our balance sheet for Tyler, for Panacea. I think Life Premium Finance probably, you know, in the 100-150 range, probably. Life Premium's getting yields that are just remarkable.
The expense burden is just unimaginably low. And then I think the core bank probably could do the same as either of those divisions. I just think the- I don't know for sure that the market is there. So I'd kind of what gets us back, it's probably 150 in each of the divisions and probably somewhere around 75-100 in the core bank.
Russell Gunther (Managing Director and Equity Research Analyst)
Okay.
Dennis Zember (President and CEO)
Long term-
Russell Gunther (Managing Director and Equity Research Analyst)
That's very helpful.
Dennis Zember (President and CEO)
Yeah, long term, I'll just make sure everybody knows. Long term, we would love to be driving more activity through the core bank, and there is the potential there, and we've got the horses. I think we're all just realistic. I don't know that the market or the economy is going to be there for that.
Russell Gunther (Managing Director and Equity Research Analyst)
That's really helpful color, Dennis. And then maybe just switching gears to the margin. So again, you guys talked about the success you have with new deposits at a much lower rate than where the loan yields are coming on, and we're looking at 10% loan growth. So could you spend a second just thinking through how that core margin trends in 2024? Maybe set expectations for us, what you're thinking with regard to Fed funds in that expectation as well.
Matt Switzer (EVP and CFO)
I don't know that we have a core Fed. There's a heated debate internally over the path of Fed funds, Russell.
Dennis Zember (President and CEO)
Matt's laughing because he won the bet last year.
Matt Switzer (EVP and CFO)
Yeah, I won the bet. Feel like I'm going to win it this year. I mean, I'll give you a scenario. If rates were flat, we think margin would continue to grind higher from repricing, and we think we could continue to moderate deposit costs. And on the balance sheet growth that Dennis just alluded to, I mean, we've already got $100 million of that essentially funded. So we think margin will continue to grind up probably by the end of the year to the mid-3.30s, 3.35 range.
A couple rate cuts, depending on when they came in the year, you know, arguably may cost us a couple basis points. And I think that's going to be true for the whole industry. Yeah, I don't think we get, as an industry, a whole lot of benefit from 2 rate cuts because of the shape of the curve.
Dennis Zember (President and CEO)
Yeah.
Matt Switzer (EVP and CFO)
So, you know, maybe we're, you know, 3.25-3.30 if we get a couple rate cuts. But that's all, you know, it's hard to predict, but that's kind of what we're thinking.
Dennis Zember (President and CEO)
I think overall, we're. I wrote this in my comments, and then I deleted it because it was just cumbersome the way I wrote it, but I think we're positioned really well. Rates going up, rates going down. Matt and I both believe that a couple rate cuts is not going to bring any relief. I mean, a 5% Fed funds is not going to bring relief on deposit costs. I mean, because deposit costs for the industry are still in the twos, mostly. So I just don't think that deposit costs are going to start drifting lower dollar for dollar. I don't think we're going to have a pretty high beta on the first couple rate cuts anyway. So-
Russell Gunther (Managing Director and Equity Research Analyst)
Well, that's, that's helpful, guys. I appreciate just framing that narrative. The follow-up would be that margin guide is relative to, to that core 309 from this quarter?
Matt Switzer (EVP and CFO)
Yes. Yeah.
Russell Gunther (Managing Director and Equity Research Analyst)
Okay, great. Thanks, Matt. Then, just last one. Seems like you're getting increased capital flexibility here. Just love some comments on buyback expectations and, you know, hurdles to getting that done.
Dennis Zember (President and CEO)
That Matt, Matt and I, I mean, you know, we, we, we come on these calls, and obviously, we've built some engines that, that can grow the balance sheet. And so we're real, real cognizant of capital, and capital levels, and capital opportunities, and especially when the stock is trading at, or, you know, even for a lot of 23 below tangible book, we are even more determined to, to see capital levels moving higher. We just don't have the flexibility to go grab new capital. So that being said, if, you know, Matt and I are pretty confident in where operating ratios are going, where earnings per share is going, where our capital build is, you know, about to start coming in.
So if, if, you know, we were to be able to deconsolidate and get the gain, we... and the stock has not moved off of tangible book. We anticipate getting pretty active with that capital.
Russell Gunther (Managing Director and Equity Research Analyst)
Okay.
Dennis Zember (President and CEO)
I think our story is starting to get a little bit of obvious legs to it. So Matt and I are thinking that it might end up being capital that lets us grow a little more, Russell.
Russell Gunther (Managing Director and Equity Research Analyst)
Yep.
Dennis Zember (President and CEO)
But if not, we're prepared to own a lot more of our stock.
Russell Gunther (Managing Director and Equity Research Analyst)
Understood. All right, Dennis, thanks for the thoughts. Thank you both for taking my questions.
Dennis Zember (President and CEO)
All right.
Operator (participant)
Again, for any questions, press star one, and your next question will come from the line of Christopher Marinac with Janney Montgomery Scott. Please go ahead.
Christopher Marinac (Director of Research)
Hey, thanks. Good morning. Dennis and Matt, you may have kind of partially answered this in a previous call, but what I wanted to understand is the pre-tax, pre-provision that we talk about on an operating basis this quarter. Can we further adjust that back for the operating expenses, you know, the $18.7 that you called out? You know, is the PPNR kind of higher than it appears because of that operating expense change?
Dennis Zember (President and CEO)
Yeah. It is a touch higher, given what Matt was saying. So you'd probably need to add, Matt was saying 19-19.5. And I would guide to the lower end of that range. Matt might guide to the higher end. But, so yeah, you probably could add, you know, $300,000-$400,000 to that, Chris.
Christopher Marinac (Director of Research)
Okay. That's on expenses. Would there be any adjustments on the revenue side to kind of get a true apples and apples?
Matt Switzer (EVP and CFO)
No.
Christopher Marinac (Director of Research)
Because all the third party is netting against each other, so we don't have to be too concerned about that.
Matt Switzer (EVP and CFO)
On the pre-tax pre-provision. Well, I can take that back. In pre-tax pre-provision, there is a third-party effect through non-interest income, that if you wanted to take all the third-party out, would come out. And there's a line on-
Christopher Marinac (Director of Research)
So that would-
Matt Switzer (EVP and CFO)
Yes.
Christopher Marinac (Director of Research)
Okay. So use that to kind of net that, which would therefore be a reduction to get to kind of a run rate.
Matt Switzer (EVP and CFO)
Yeah.
Christopher Marinac (Director of Research)
Got it.
Matt Switzer (EVP and CFO)
But if you're using the non-interest expense above the line, obviously that's got the Panacea consolidated expenses in there, so you got to adjust that out as well. Because if you use the table for our non-interest expense, that's adjusting out the consolidated expenses from Panacea.
Christopher Marinac (Director of Research)
Yep, understood. Okay, thank you for walking me through that. And then when we talk about deposit costs, and I appreciate the angles that you've got in the release, what is the most important one that you're focusing on as you manage this business quarter-to-quarter?
Dennis Zember (President and CEO)
On incremental deposit costs as a whole or
Christopher Marinac (Director of Research)
Correct. I mean, so yeah, thinking going forward, should we be focused on that core bank number, or are you looking at all three and trying to turn dials on each of them?
Dennis Zember (President and CEO)
We- all three- all three, for sure. I mean, the fact that our, you know, I mean, we, I think coming into this rate cycle, this inverted yield curve, Chris, no, people did not think about Primis as having the strongest, core bank deposit portfolio. So it's remarkable that we've moved all the way through this, and really, in our region, we have one of the lower core bank deposit costs. And part of the reason is, I mean, we're, we're just not as desperate for every single dollar because we have so much flexibility on the digital platform. I mean, I remember the digital platform, it was, for like 30 days, it seemed like pretty expensive money, and then for the next 11 months, it seemed different.
I think some of the things that we're doing now on the platform, whereas we had a lot of sort of rapid growth, I feel like right now we're really getting into a sweet spot where the growth on the digital platform is really at the right level for, say, a $4 billion balance sheet. It's not anything that's really accelerated by remarkable rates. It's really leveraging the technology and leveraging referrals. And so I think the growth there is a little muted, and it really is letting the core bank's advantages shine through. That's really why and how we get to such a remarkable level on incremental deposit costs.
Christopher Marinac (Director of Research)
Got it. And then incrementally, would we expect, just all things being equal, that the digital cost would come down quarter-over-quarter again in Q1?
Dennis Zember (President and CEO)
I mean, I think the costs, you know, probably 90% of the balances on the digital platform, I think, are probably have a pretty high beta to Fed Funds versus our core bank that, you know, Matt and I were saying probably has a pretty low beta on the first couple rate moves. So I think falling rates might affect the digital platform faster, which you'd expect given the higher costs. I think what's going to bring the weighted average cost on the digital platform down are some of the new incremental products that we're selling have lower betas, or excuse me, lower spreads to Fed Funds, and/or are just non-interest-bearing, so on the business side.
Christopher Marinac (Director of Research)
Got it, and that makes sense. Great. Thank you for taking the questions and all the information today.
Dennis Zember (President and CEO)
All right. Thanks, Chris.
Operator (participant)
We have no further questions at this time. I'll turn the call back over to Dennis Zember for closing remarks.
Dennis Zember (President and CEO)
Thank you again for joining our call. Matt and I are available all day, if you have any more questions or comments. With that, I hope you have a great weekend. Talk to you soon.
Operator (participant)
That will conclude today's meeting. We thank you all for joining, and you may now disconnect.