Earnings Call Transcript - ESNT Q4 2024

Operator, Operator

Thank you for standing by. At this time, I would like to welcome everyone to today's Essent Group Limited Fourth Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. I would now like to turn the call over to Phil Stefano with Investor Relations. Phil, please go ahead.

Phil Stefano, Investor Relations

Thank you, Greg. Good morning everyone and welcome to our call. Joining me today are Mark Casale, Chairman and CEO; and David Weinstock, Chief Financial Officer. Also on hand for the Q&A portion of the call is Chris Curran, President of Essent Guaranty. Our press release, which contains Essent's financial results for the fourth quarter and full year 2024, was issued earlier today and is available on our website at essentgroup.com. Our press release includes non-GAAP financial measures that may be discussed during today's call. A complete description of these measures and the reconciliation to GAAP may be found in Exhibit O of our press release. Prior to getting started, I would like to remind participants that today's discussions are being recorded and will include the use of forward-looking statements. These statements are based on current expectations, estimates, projections, and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially. For a discussion of these risks and uncertainties, please review the cautionary language regarding forward-looking statements in today's press release, the risk factors included in our Form 10-K filed with the SEC on February 16, 2024, and any other reports and registration statements filed with the SEC, which are also available on our website. Now let me turn the call over to Mark.

Mark Casale, Chairman and CEO

Thanks, Phil, and good morning everyone. Earlier today we released our fourth quarter and full year 2024 financial results. Strong credit quality and resilience in the housing and labor markets continue to drive credit performance, while interest rates remain a tailwind for persistency and investment income. Although mortgage origination activity remains below historical levels, we anticipate that home buying demand is merely being postponed given the level of rates and affordability. While there is always uncertainty in the economic environment, given the strength of our balance sheet and our Buy, Manage & Distribute operating model, we believe Essent is well positioned for a range of economic scenarios. And now for our results. For the fourth quarter of 2024, we reported net income of $168 million compared to $175 million a year ago. On a diluted per share basis, we earned $1.58 for the fourth quarter compared to $1.64 a year ago. For the full year, we earned $729 million or $6.85 per diluted share, while our return on average equity was 14%. As of December 31, our book value per share was $53.36, an increase of 11% from a year ago. As of December 31, our US mortgage insurance in force was $244 billion, a 2% increase versus a year ago. Our 12-month persistency on December 31 was 86%, down about 1 point from last quarter, while nearly 60% of our in-force portfolio has a note rate of 5.5% or lower. Although persistency has likely peaked, we continue to expect that the current level of mortgage rates will support elevated persistency in the near term. Credit quality of our insurance in force remains strong, with a weighted average FICO of 746 and a weighted average original LTV of 93%. Credit performance in the fourth quarter primarily reflected both the aging of our portfolio and the typical seasonality of default behavior. Note, however, that credit performance for the fourth quarter were also impacted by approximately 2,000 defaults in areas affected by Hurricanes Helene and Milton. In addition, we are monitoring the potential impact to defaults from the California wildfires. Dave will discuss defaults and reserves in more detail in a few moments. On the mortgage insurance front, our industry remains competitive and strong credit guardrails remain in place, driven by the underpinnings established by the GSEs after the global financial crisis. These guardrails combined with our EssentEDGE credit engine enable us to selectively grow our high credit quality insurance in force while generating strong returns. We are pleased with our position in the marketplace and the unit economics that we are achieving on new business. As a reminder, we price for new business assuming a combined ratio of roughly 35% to 45%. In the first quarter of 2025, we entered into two quota share transactions with a panel of highly rated reinsurers to provide forward protection for our 2025 and 2026 business. We are pleased with the strong execution and remain committed to a programmatic reinsurance strategy, which helps to diversify our capital resources while ceding a meaningful portion of our mezzanine credit risk. At year-end 2024, approximately 97% of our portfolio is covered by some form of reinsurance. Essent Re had another strong year of performance writing high-quality GSE risk-share business while leveraging its fee-based MGA services. Essent Re ended the year with annual third-party revenues of approximately $80 million, while our third-party risk in force was $2.2 billion. Since 2014, Essent Re has earned over $450 million of net income from its third-party business and has contributed approximately $800 million to Essent's book value. Our title operations incurred a pre-tax loss of approximately $21 million in the prior year, prior to corporate allocations. We continue to maintain a long-term view for this business. However, given it is levered to rates, we do not expect title to have any material impact on earnings over the near term. Cash and investments as of December 31 were $6.3 billion and our new money yield in the fourth quarter remained over 5%. For the full-year 2024, our investment yield was 3.7% compared to 3.5% in 2023. Net investment income was $222 million in 2024, up nearly 20% from 2023. As of December 31, the carrying value of other invested assets is $304 million and ever to date these investments have created $81 million of value. As of December 31, we are in a position of strength with $5.6 billion in GAAP equity, access to $1.6 billion in excess of loss reinsurance, and a PMIERs sufficiency ratio of 178%. With a full year 2024 operating cash flow of $852 million, our franchise remains well positioned from an earnings, cash flow and balance sheet perspective. As a result of our strong financial performance and capital position, I am pleased to announce that our Board has approved an 11% increase in our quarterly dividend to $0.31 per share. At the same time, our Board also approved a $500 million share repurchase authorization that runs through year-end 2026. Now let me turn the call over to Dave.

David Weinstock, Chief Financial Officer

Thanks, Mark, and good morning, everyone. Let me review our results for the quarter in a little more detail. For the fourth quarter, we earned $1.58 per diluted share compared to $1.65 last quarter and $1.64 in the fourth quarter a year ago. Our U.S. mortgage insurance portfolio ended 2024 with insurance in force of $243.6 billion, an increase of $669 million from September 30th and an increase of $4.6 billion or 2% compared to $239.1 billion at December 31st, 2023. Persistency at December 31st, 2024 decreased to 85.7% compared to 86.6% at the end of the third quarter. Net premium earned for the fourth quarter 2024 was $244 million and includes $16.2 million of premiums earned by Essent Re on our third-party business and $16.6 million of premiums earned by the title operations. The average base premium rate for the U.S. mortgage insurance portfolio for the fourth quarter was 41 basis points and the average net premium rate was 35 basis points in the fourth quarter of 2024, both consistent with last quarter. We expect that the average base premium rate for the full year 2025 will be largely unchanged from the fourth quarter rate of 41 basis points. Consolidated net investment income for full year 2024 was $222.1 million compared to $186.1 million for the full year 2023, due to growth in the investment portfolio and investing at higher yields than the book yield of our existing portfolio. Net investment income for the fourth quarter was relatively flat to the prior quarter. Credit performance for the fourth quarter was affected by defaults in areas impacted by Hurricanes Helene and Milton. The provision for losses and loss adjustment expense on the U.S. mortgage insurance portfolio was $37.2 million in the fourth quarter of 2024 compared to $29.8 million in the third quarter of 2024 and $19 million in the fourth quarter a year ago. During the fourth quarter, total defaults increased by 2,533, which includes 2,119 defaults that we identified as hurricane-related defaults. Based on prior industry experience, we expect the ultimate number of hurricane-related defaults that will result in claims will be less than the default-to-claim experience of non-hurricane-related defaults. Our provision for losses on these hurricane defaults does reflect a higher cure rate assumption than the estimates used on non-hurricane defaults. The provision for losses in the fourth quarter includes $8 million pertaining to the hurricane defaults, representing our best estimate of the ultimate loss to be incurred for claims associated with these defaults. Looking forward, we will continue to gather information on this population of defaults and update our reserves if needed. At December 31, the default rate on the U.S. mortgage insurance portfolio was 2.27%, up 32 basis points from 1.95% at September 30, 2024. For the full year 2024, we recorded a net provision on the U.S. mortgage insurance portfolio of approximately $75 million, with higher defaults reflecting aging of the portfolio and the impact of the hurricanes. Other underwriting and operating expenses in the fourth quarter were $71 million and include $26.7 million of total title expenses, of which $8.5 million are premiums retained by agents. Our consolidated expense ratio was 28.7% this quarter. Our expense ratio, excluding title, which is a non-GAAP measure, was 19.4% this quarter. The description of our expense ratio excluding title and the reconciliation to GAAP can be found in Exhibit O of our press release. Consolidated effective tax rate for full year 2024 was 14.7%, including the impact of $2 million of favorable discrete tax items. For 2025, we estimate that the annual effective tax rate will be approximately 15.5%, excluding the impact of any discrete items. As Mark noted, our holding company liquidity remains strong and includes $500 million of undrawn revolver capacity under our committed credit facility. At December 31, we had $500 million of senior unsecured notes outstanding and our debt-to-capital ratio was 8%. At December 31, Essent Guaranty PMIER sufficiency ratio was strong at 178%, with $1.6 billion in excess available assets. At quarter end, Essent Guaranty statutory capital was $3.6 billion, with a risk-to-capital ratio of 9.8 to 1. Note that statutory capital includes $2.5 billion of contingency reserves at December 31. During the full year 2024, Essent Guaranty paid dividends of $165 million to its U.S. holding company. As of January 1, Essent Guaranty can pay ordinary dividends of $397 million in 2025. At quarter end, Essent Guaranty of PA, which provided reinsurance to Essent Guaranty on certain policies originated prior to April 1, 2019, entered into a commutation and release agreement under which all of the outstanding risk in force was commuted back to Essent Guaranty. Essent Guaranty of PA then surrendered its insurance license effective, December 31, 2024, freeing up $93 million of cash and investments at Essent Guaranty of PA as liquidity to the U.S. holding company. As a result, there were no dividends from the insurance subsidiaries to the U.S. holding company during the fourth quarter 2024. During the fourth quarter, Essent Re paid a dividend of $87.5 million to Essent Group. Also in the quarter, Essent Group paid cash dividends totaling $29.4 million to shareholders, and we repurchased 1.2 million shares for $66 million under the authorization approved by our Board in October 2023. In January 2025, we repurchased nearly 1 million shares for $52 million, taking advantage of the volatility in Essent's share price. As we have previously discussed, we are patient and value-sensitive when it comes to buying back shares. Believing this strategy will support our long-term goal of compounding book value per share growth over time. Now let me turn the call back over to Mark.

Mark Casale, Chairman and CEO

Thanks, Dave. In closing, we are pleased with our full-year 2024 financial results, which continue to reflect the strength of our franchise. Our high-quality portfolio combined with resilience in housing and employment continues to translate to strong credit performance, while our business continues to benefit from the impact of rates on persistency and investment income. Our strong operating performance continues to generate excess capital, which we will approach in a balanced manner by maintaining balance sheet strength, preserving optionality for strategic growth opportunities, and optimizing shareholder returns over the longer term. Looking forward, we remain committed to our Buy, Manage and Distribute operating model and believe that Essent remains well positioned to deliver attractive returns for our shareholders. Now let's get to your questions.

Operator, Operator

Thanks, Mark. Okay, looks like our first question comes from the line of Bose George with KBW. Bose, please go ahead.

Bose George, Analyst

Hey, everyone. Good morning. Actually, first on title, is your expectation for 2025 that title results will be similar to '24? And was there anything unusual in title this quarter, just, you know, the provision was up and the OpEx was up?

Mark Casale, Chairman and CEO

Good morning, Bose. For 2025, I anticipate similar results to 2024. Our cost structure is in place and, as mentioned earlier, it takes 12 to 18 months to establish. We are nearing that 18-month mark, and it's holding up well. Currently, part of the costs we're facing can be viewed as an option cost for refinancing, as interest rates have not receded as I mentioned in the script. However, we did engage a significant lender last year, which has led to increased capacity for that lender and associated costs. I expect to see more of the same in this regard. Long term, this situation acts as a call option, and we believe it will contribute to additional earnings in relation to Essent Re as we continue making progress. We should see improved results when interest rates decline. In the fourth quarter, the situation was largely due to an excess provision from our usual practices, mainly related to some cleanup from the acquisition of the underwriter and additional claims that became due, leading to some necessary adjustments at quarter-end.

Bose George, Analyst

Okay, great. Thanks. And then actually the hurricane-related default count that you gave, the 2,219, was that the default set in the inventory at quarter end or had some of those cured by quarter end?

Mark Casale, Chairman and CEO

Yes, they were in there at quarter end. So like we said in the script, I think most of the increase of defaults were the hurricane. So if you take out 2.25 or 2.27 default rate, you take out the default, it is probably closer to 2%.

Bose George, Analyst

Okay, great. Thanks.

Mark Casale, Chairman and CEO

Sure.

Operator, Operator

All right. Thank you, Bose. And our next question comes from the line of Terry Ma with Barclays. Terry, please go ahead.

Terry Ma, Analyst

Hey, thank you. Good morning, everyone. Maybe just a follow-up on the defaults. So I kind of strip that the 2,000 or so added new notices in the quarter. New notices are actually down sequentially, which is kind of counter to typical seasonality. So kind of any color on kind of what's going on there?

David Weinstock, Chief Financial Officer

Hey, Terry, it's Dave Weinstock. Yes, there are definitely some fluctuations in the fall patterns. You are right that we typically see an increase in the second half of the year, especially in the fourth quarter. There wasn't anything specific that we noticed about it. Overall, looking ahead to 2024, the default pattern appears to be somewhat more favorable in almost every quarter compared to historical trends. So, what we observed in the fourth quarter was likely just a continuation of that trend.

Terry Ma, Analyst

I understand. Regarding the default rate, excluding hurricanes, the 2% you mentioned reflected a year-over-year change that slowed compared to the last quarter. I'm wondering if we've reached a point with the vintage seasoning where we can expect a more consistent increase in the default rate, or if it’s still too early to determine that.

Mark Casale, Chairman and CEO

Yes, I believe it’s too soon to determine. Looking at the overall situation, Terry, historically, before COVID, the average age of the book was around 18 months and it continued to turnover. After the initial COVID cycle, during which we experienced low rates and significant origination and refinancing, we saw a slowdown in the middle of 2022 when rates increased sharply. As a result, the turnover period has lengthened to about 32 or 33 months. We're benefiting from an extended period of premiums over the past couple of years. However, with borrowers remaining longer, it's likely that some will eventually default. This aligns with our expectations, and I wouldn’t be surprised if the default rate continues to rise slightly in 2025. I think it’s possible that the entire industry may experience this trend, and I wouldn’t be shocked to see the default rates approach the 2% to 3% range.

Terry Ma, Analyst

Got it. Okay. Helpful. Thank you.

Mark Casale, Chairman and CEO

Thank you, Terry.

Operator, Operator

And our next question comes from the line of Rick Shane with JP Morgan. Rick, please go ahead.

Rick Shane, Analyst

Thank you for taking my questions this morning. There have been numerous inquiries about hurricanes, and I anticipate we may receive questions next quarter regarding fires. Clearly, there are short-term effects on the model. Mark, in many of the high-cost regions of the country, insurance is becoming quite expensive or not readily available. I’d like to know how you monitor whether borrowers have insurance. Additionally, if insurance becomes more problematic, how do you approach pricing for risk while also considering affordability?

Mark Casale, Chairman and CEO

Yes, that's a great question and it's been a discussion point internally for some time. If borrowers have a mortgage, they're required to maintain homeowners insurance. If they lose it, we would arrange for force-placed insurance, so we're not concerned about them lacking coverage in case of an incident. Additionally, we're not financially responsible until the home is repaired, which adds another layer of protection for us. Historically, defaults in hurricane-affected regions have had a high recovery rate. While past performance is not always indicative of future trends, this has been our experience with previous hurricanes. Looking at the long-term impact of homeowners insurance, I believe it will remain a concern in specific areas of the country, particularly the high-cost coastal regions and places affected by wildfires. These areas often don't have a lot of mortgage insurance, so our exposure is relatively modest. However, those most vulnerable to significant increases in homeowners insurance will face challenges. Even for average borrowers, insurance costs can double, which is substantial. From the perspective of mortgage insurance, this increase might impact debt-to-income ratios slightly. In general, with rising affordability, we expect borrowers to allocate more of their income towards housing costs. This trend has long been evident in California, where borrowers have consistently designated a larger portion of disposable income to housing over the last 30 years. This hasn't been as pronounced in other regions of the country, but I predict homeownership rates will stabilize in the mid to upper 60s. Borrowers will likely need to dedicate more of their disposable income if they want to own homes. I hope this provides some broader context.

Rick Shane, Analyst

It does. And again, I know you think in five and 10-year horizons. Are you concerned that it has a chilling effect on HPA, which more broadly impacts you?

Mark Casale, Chairman and CEO

HPA has increased significantly over the past five years, so I believe it's reasonable for it to stabilize for a while. This could allow incomes to catch up, which aligns with my long-term vision for Essent. Previously, we experienced the COVID cycle with exceptionally low rates and high origination, an unusual situation. Rates have now risen since mid-2022, marking a new phase. Current high rates and HPA have affected affordability, which has been a challenge for some time. Typically, around 4 million people move each year, but last year only 2.7 million did, indicating we are in a sluggish housing market. However, I believe we will eventually emerge from this phase. If rates don't drop significantly, a flat HPA could give incomes the chance to rise, leading to natural movements in the housing market as families grow and job changes occur. This transition can foster renewed growth for our business. While I can't predict an exact timeline, it may take time to unfold. The overall insurance market is around 1 trillion with modest growth, suggesting we are currently in a pause. When the right factors come together, this could provide a boost for our business.

Rick Shane, Analyst

Got it. Hey, Mark, I always appreciate the answers. Thank you so much.

Mark Casale, Chairman and CEO

Welcome.

Operator, Operator

Thanks, Rick. And our next question comes from the line of Doug Harter with UBS. Excuse me. Doug, please go ahead.

Doug Harter, Analyst

Thanks. Mark, you guys increased the dividend, increased the share repurchase. And given what you just said that we might be in kind of a pause for industry insurance in forced growth, how are you thinking about the pacing of capital return in the near term versus opportunities either in mortgage insurance or elsewhere to deploy capital?

Mark Casale, Chairman and CEO

Yes, that's a great question, Doug. As we enter this year, we see a decent opportunity to return capital and improve our capital efficiency. Despite high rates, credit conditions have been stable, persistency has been strong, and we've benefited from increased investment income, with about $850 million in cash coming in. Our operating performance has been robust, and we've significantly built up our capital levels. We feel confident about credit in the near term. While it's important to consider default rates, we anticipate that they could rise to around 3%, which we would expect and not be overly concerned about, especially with our PMIERs cushion in mind. Our primary concern remains the potential for significant macroeconomic events, as we essentially operate as an insurance company, even though we fall under specialty finance related to mortgages. Liquidity risk for us mainly involves the PMIERs calculations, and our business largely resembles a catastrophe business, focusing on severe economic downturns. These major events are rare but impactful, such as those we saw in the early '80s and during the great financial crisis. Although we experienced a brief peak during COVID, it was short-lived. We've conducted stress tests, and feel confident in our PMIERs capital sufficiency ratio by ensuring we run our numbers through various scenarios. As for investment opportunities, we haven't identified any appealing options yet, so we believe it is a good time for us to return capital. The pause affecting the entire business— including the core segments—provides us with timing considerations. Title insurance has slowed, and we are seeing a similar pause within Essent Re due to limited GSE issuance. Given these factors and the price sensitivity regarding repurchases, we see this as a fantastic opportunity since our last call. We will continue executing our strategy and keep in mind the special dividend tool, which we haven't used yet. Our objective is to grow book value per share while maintaining strong ROEs and avoiding excess capital that could hinder performance. Although it's a good challenge to have, I expect to see more activity in capital returns by 2025.

Doug Harter, Analyst

Great. Appreciate it, Mark.

Operator, Operator

Thank you, Doug. And our next question comes from the line of Geoff Dunn with Dowling & Partners. Geoff, please go ahead.

Geoff Dunn, Analyst

Thanks. Good morning, guys. Dave, just confirm, you said a 15.5% tax rate for this year?

David Weinstock, Chief Financial Officer

Yes, that is our current estimate for 2025.

Geoff Dunn, Analyst

I'm surprised at how low it is with the new minimum tax. Can you explain the mechanics of that and what kind of credits you might be assuming to reach that level?

David Weinstock, Chief Financial Officer

Yes, it's actually up a little bit from what our full year was for 2024. With regards to Bermuda tax, there have been some developments that may impact us. Some Bermuda-based companies have recorded an economic transition adjustment, which is being evaluated for its deductibility. However, we don't have one of those adjustments. We did not record an economic transition adjustment. Our international presence is quite limited, and there is an exemption related to the Bermuda income tax that keeps us exempt from tax until 2030. This is why we are basically saying that for 2025, we'll be around the same place we were in 2024.

Geoff Dunn, Analyst

Got you, okay. And then do you have the account for the Q3 new notices of hurricane affective notices that came in?

David Weinstock, Chief Financial Officer

Yes, Geoff, the hurricanes impacted us late in September and early October. We didn't believe that any of the defaults we experienced in the third quarter were related to the hurricanes; we thought those issues would emerge in the fourth quarter.

Geoff Dunn, Analyst

Got you. And then lastly, could you repeat the buyback info for the quarter? I just missed that when you ran through the numbers.

David Weinstock, Chief Financial Officer

Yes, in the quarter, we repurchased 1.2 million shares for $66 million in the fourth quarter. And in January, we repurchased nearly 1 million shares for $52 million.

Geoff Dunn, Analyst

Perfect. Thank you.

David Weinstock, Chief Financial Officer

Sure. Great.

Operator, Operator

Thanks, Geoff. And our next question comes from the line of Eric Hagen with BTIG. Eric, please go ahead.

Eric Hagen, Analyst

Hey, thanks. Good morning, I appreciate you guys taking my question. Right, so it feels like the non-bank lenders are laser-focused on bringing down origination and servicing costs, managing their own prepayment risk through strong recapture and a lot of that improvement in cost and scale already seem to be showing up in the refi behavior when rates are dropping? Do you guys have any perspective on how further growth of these non-banks and the lower cost of capital could drive prepay behavior, specifically for the high LTV cohort of borrowers out there? And then how that kind of dynamic maybe traces back to how you guys price risk?

Mark Casale, Chairman and CEO

Yes, it's tied to our duration assumptions. When we evaluate risk pricing on the front end, it's an interesting observation, and it's great to have you back on the calls. You are right about how efficient the larger originators have become regarding refinancing. With potential advances in AI tools, their efficiency could further increase, but they are already extremely efficient. This has been the case for some time, and it's important to remember that. Our perspective is that this remains rate dependent. If rates do decrease, we could see more MI rolling off the books, and importantly, this might initiate a new cycle more quickly as it would likely stimulate additional purchase activity. While I believe this addresses your question, it emphasizes that the situation is indeed contingent on rates. Their efficiency is evident, but lower rates are still necessary. We observed this phenomenon during the refinancing spike in October, which is reflected in our numbers, showing our refinance percentage around 14% in the fourth quarter, indicating a notable increase. We noted some activity in title as well, even though we couldn't fully capitalize on it due to its short duration. However, I agree that they respond very swiftly when opportunities arise.

Eric Hagen, Analyst

Great perspective. I appreciate you guys. Thank you.

Operator, Operator

Thank you, Eric. And it looks like our final question today comes from the line of Bose George with KBW, he's back. Bose, please go ahead.

Bose George, Analyst

Great. Thanks. Just had a couple of modeling related questions. Did you guys give guidance for expenses for 2025?

Mark Casale, Chairman and CEO

No, we didn't provide that, as we're transitioning to segment reporting, which you will see in the K disclosure. It will include more MI and other segments. Once you see the numbers, we might be able to offer some MI type guidance. Generally speaking, if you compare it to last year's numbers, it will appear relatively flat overall, but we wanted to wait until the K was released so that you all could take the time to review it.

Bose George, Analyst

Okay, great. And then actually just one more on the investment portfolio. Like what's the incremental yield versus the current yield and actually just a decline quarter-over-quarter is a little surprising. So kind of what drove that?

Mark Casale, Chairman and CEO

Yes, I understand it might be a bit surprising, but we have significantly repositioned the investment portfolio. We've been implementing this change over the last few months, moving from shorter-term cash investments back into more asset-backed securities and corporate credit. We're essentially returning to our previous portfolio strategy. As a result, we're seeing some of the older investments maturing, particularly the two-year treasuries that had high rates. I expect that the rates will stay in a similar range over the long term. If the yield curve remains stable, we might see rates above 4, but I don't believe that will occur in 2025.

Bose George, Analyst

Okay, great. Thanks a lot.

Mark Casale, Chairman and CEO

Sure.

Operator, Operator

Thanks, Bose. And there are no further questions. So I will now hand it back to management for closing remarks.

Mark Casale, Chairman and CEO

I'd like to thank everyone for joining us. And again, for the second time in seven years, I'd like to congratulate our Philadelphia Eagles for winning the Super Bowl and have a great weekend and go birds.