Earnings Call Transcript - FCNCA Q1 2024

Operator, Operator

Ladies and gentlemen, thank you for standing by, and welcome to the First Citizens BancShares First Quarter 2024 Earnings Conference Call. As a reminder, today's conference is being recorded. I would now like to introduce the host of this conference call, Ms. Deanna Hart Senior Vice President of Investor Relations. You may begin.

Deanna Hart, Senior Vice President of Investor Relations

Good morning. Welcome to First Citizens first quarter earnings call. Joining me on the call today are our Chairman and Chief Executive Officer, Frank Holding; and Chief Financial Officer, Craig Nix. They will provide first course business and financial update referencing our earnings call presentation, which you can find on our website. Our comments today will include forward-looking statements, which are subject to risks and uncertainties that may cause actual results to differ materially from expectations. We assume no obligation to update such statements. These risks are outlined on Page 3. We will also reference non-GAAP financial measures. Reconciliations of these measures against the most directly comparable GAAP measures can be found in Section 5 of the presentation. Finally, First Citizens does not respond for and does not edit nor guarantee the accuracy of earnings transcripts provided by third parties. I'll now turn it over to Frank.

Frank Holding, Chairman and Chief Executive Officer

Thank you, Deanna, and good morning, everyone. Let's start on Page 6. Over the last 12 months, we've successfully focused on our SVB integration efforts, regulatory readiness, strategic priorities, and financial performance. During the first quarter, we delivered earnings per share of $52.92 adjusting for notable items that are on Page 51. Return metrics were strong, reflecting a peer-leading net interest margin, an adjusted efficiency ratio of 50%, and lower net charge-offs. These results exceeded our expectations, with earnings increasing approximately 14% over the sequential quarter. We're pleased that all our segments, including SVB Commercial, grew loans during the quarter and our liquidity and capital position strengthened due to core deposits and earnings growth. We successfully submitted our capital plan to the Federal Reserve on April 5th. The process included a full stress test, including the acquired SVB portfolios. The mission of this plan was an important milestone in our regulatory journey, and I'd like to thank all our associates for their hard work in submitting a quality plan. Turning to Page 7, it's been a year since Silicon Valley Bank became part of First Citizens, which has introduced a lot of change, but most of all, opportunity. I want to thank our associates for their hard work over the past year, stabilizing the business and taking care of our clients. I also want to thank our clients for their confidence in us as we remain committed to them and the innovation economy. The SVB team continues to deliver exceptional service to our clients, demonstrated by the fact that 80% of the VC firms on the Forbes Midas list are served by our company, and our ability to onboard over 1,000 new clients in the first year of our acquisition. SVB has more experience serving the innovation economy than any other financial services provider, thanks to our dedicated teams of sector experts. Their essential insights come from over 40 years of dedicated focus on innovators and investors with an average leadership tenure of over 20 years with SVB and the deepest and most experienced bench of over 1,500 innovation bankers and relationship advisers. Our team is well-positioned despite some of the continued economic headwinds facing the innovation economy. Last year, VC fundraising hit its lowest level since 2017. The drawback in fundraising we witnessed in 2023 continued into the first quarter, despite there being plenty of dry powder to invest. Despite the current environment, we are encouraged by the number of exit-ready companies poised to exit once the IPO market fully reopens. In fact, there is a record backlog of companies ready to exit given current market conditions. There is fundamental demand from investors, but only at the right price and for companies with good stories. We are beginning to see activity improve and signs that IPO activity may pick up this year. On Page 8, we show that the SVB franchise has been stabilizing in terms of loans and client funds since the second quarter of last year, reflecting continued support of our innovation clients. Moving to Page 9, our integration efforts helped us retain clients, stabilize deposit balances, and develop strategic priorities for the combined organization. We continue to make meaningful progress on integration and remain committed to achieving our post-merger potential. While we have always focused on compliance with regulatory requirements, our growth has moved us to a significantly increased level of regulatory oversight, and we are investing in being proactive in enhancing our regulatory readiness. While there is more work to be done, we have made meaningful progress in maturing and refining our processes to support the change in our size and complexity. A few of these accomplishments include: First, implementing expanded risk management capabilities based on feedback from third-party GAAP assessment; second, creating a dedicated regulatory remediation oversight team to manage and enhance regulatory responses as well as provide oversight, monitoring, and reporting of remediation efforts; third, enhancing our dedicated regulatory affairs team to manage heightened regulatory activity and relationships with new examiners; and fourth, completing our first-time large financial institution regulatory filings on time. In addition, with our strong risk management culture, we will continue to invest in our capabilities here and we're confident that over time we will effectively transform our program in accordance with new and changing regulatory requirements. Now let's look at Page 10. We continue to invest in our wealth business, one of our primary key income drivers. We believe there are significant opportunities and we've achieved remarkable organic growth here since 2013. In the third quarter, we announced the alignment of SVB Private and First Citizens Wealth under one leadership team to improve coordination and enhance services available to clients. Wealth is beginning to see the benefits of bringing our capabilities together under one umbrella, creating a premier private banking and wealth business. Most recently, we rebranded all of our wealth services to First Citizens Wealth. The combined First Citizens Wealth organization can help any client, business, or institution regardless of size or complexity. We remain focused on maintaining deep client relationships, providing a boutique experience with big bank capabilities. Moving forward, we believe our combined product set, dedicated and experienced wealth professionals, and client-centric engaged model will continue to accelerate the growth of our wealth franchise. Finally, turning to Page 11. We're happy to be recognized and honored as a top 20 financial institution on Forbes list of America's Best Banks and by other organizations and publications listed on the page. This recognition reflects our solid track record taking care of our clients and our customers. To conclude, the positive momentum we started in 2023 continues. Despite the uncertainty in the current environment and the hard work ahead of us, we continue to protect and grow customer relationships, stabilize the SVB franchise, grow core deposits and loans, and strengthen our balance sheet. Given our position of strength and dedicated associates, I'm excited about the opportunities ahead of us.

Craig Nix, Chief Financial Officer

Thank you, Frank. Appreciate everyone joining us today. I'm going to anchor my comments to the key themes outlined in the takeaways on Page 14. Pages 15 through 35 provide more detail supporting our first quarter results. As Frank mentioned, our return metrics were strong and above our expectations. ROE and ROA adjusted for notable items were 15.01% and 1.46%, respectively. Compared to the fourth quarter, these metrics benefited from a 13% increase in net income, driven by lower net charge-offs and higher noninterest income, partially offset by lower accretion income and higher deposit costs. While net interest income declined from the linked quarter by 5%, it was above our expectations. The decline was related to lower accretion income and higher deposit costs. These impacts were somewhat mitigated by securities and loan portfolio repricing to higher rates during the quarter. NIM contracted by 19 basis points to 3.67% mostly due to the same factors affecting the decline in net interest income. Ex accretion, NIM declined by 12 basis points to 3.35%. Adjusted noninterest income increased by 5% over the fourth quarter. A majority of the increase consisted of higher net rental income on rail operating lease equipment. Net rental income was aided by strong utilization rates that surpassed 99%, the highest level since the second quarter of 2015, along with positive repricing trends as well as lower maintenance costs. As you will recall, we pulled forward maintenance qualification activity during the fourth quarter, which positions us to handle the uptick in customer volume this quarter while front-loading some of the expenses. Maintenance costs also benefited from unanticipated delays in getting railcars to maintenance facilities. As a result, we project higher maintenance costs for the remainder of the year as service levels return to normal. Noninterest income also benefited from an increase in the fair value of customer derivative positions due to higher interest rates. These increases were partially offset by lower capital markets income related to seasonality as well as increased competition as regional banks continued to return to normal activity following last year's pullback. Stripping out some of the seasonality and focusing on a year-over-year comparison, capital markets income was up roughly $5 million from syndicated deals. Adjusted noninterest expense slightly beat our expectations, increasing sequentially by less than 2%. Expense growth was concentrated in salaries and benefits and seasonal adjustments associated with our 401(k), higher payroll taxes, and annual merit adjustments took effect. First quarter expenses also reflected higher FDIC insurance expense. Effectively managing expenses remains a top priority for us given headwinds to net interest income. We are on track to achieve the low end of our 25% to 30% synergies target for SVB by the end of this year. Focusing on credit, net charge-offs declined by $74 million from the sequential quarter to $103 million. This represents a net charge-off ratio of 0.31%, below our previous guidance of 50 to 60 basis points. Losses were largely in the same portfolio as previous quarters, although at a lower rate. The largest decline was in the innovation portfolio, where net charge-offs were down $30 million sequentially, led by a $19 million drop in the investor-dependent portfolio. The remainder was spread between equipment finance, general office, and other loan portfolios. At quarter end, the allowance plus purchase discount on the investor-dependent portfolio was 8.2%, covering first quarter annualized net charge-offs 2.9 times, and for the last 4 quarters, 1.9 times. Consistent with prior quarters, net charge-offs within the commercial bank were concentrated in the general office and small ticket equipment leasing portfolios. As a reminder, while our total general office portfolio was $2.8 billion at the end of the quarter, the portfolio where we have seen stress in charge-offs is in Class B, repositioned bridge loans within the commercial bank, which totaled $1 billion at quarter end. Portfolio net charge-offs were down sequentially, but we continue to monitor the risks here. The allowance on this portfolio was 11.1%, covering first quarter annualized net charge-offs 1.6x in the last 4 quarter net charge-offs 1.4x. Overall, the allowance decreased 3 basis points sequentially to 1.28% due to improvement in macroeconomic forecasts, a mix shift to higher credit quality segments, and lower specific reserves, all partially offset by increased volume and mild credit quality deterioration. While the allowance did decline this quarter, we feel good about our overall reserve coverage on the portfolios where we continue to see stress. Our credit team continually monitors our loan portfolios by reviewing delinquency trends and grading migration by industry and/or geography to identify areas of potential stress, and at this time, we are not aware of other significant pockets of deterioration. Moving to the balance sheet. Loans grew by more than $2 billion over the linked quarter, representing an annualized growth rate of 6.2%. The General and Commercial segments grew loans by $900 million and $794 million, respectively, and the SVB Commercial segment was up by $335 million. General Bank growth was concentrated in small business and commercial loans generated in our branch network. In the Commercial Bank, growth was driven by strong production in our industry verticals, particularly in TMT, healthcare, and energy. Growth in our TMT vertical continues to be driven by strong demand for new data centers, while our energy vertical benefits from the energy transition, driving activity in financing renewable energy projects. Finally, the increase in SVB commercial loans related to global fund banking growth. Despite increased competition in this space, we continue to win business. To that end, our team closed more than $5 billion in deals in the first quarter. While we are excited by the positive trends in global fund banking, we recognize that the macroeconomic environment still presents headwinds. In the first quarter, VC investment came in lower than expected amid macroeconomic uncertainty and geopolitical tensions. While VC dry powder remains elevated despite ongoing fundraising sluggishness, we expect it to take time to gradually deploy those investments. However, we remain well-positioned to ramp up both loans and deposits quickly when the macroeconomic environment improves, given we have the largest fund finance team in the market. Within the SVB Commercial segment, growth in global fund banking was partially offset by expected declines in our technology and healthcare banking business, as paydowns outpaced new fundings due to continued headwinds in the private investment landscape. While we've seen some encouraging activity in the IPO market, we do not expect an immediate reset given continued fundraising and valuation mismatches. We are well-positioned to capture business as the pendulum swings back. The technology and healthcare banking team has a focused approach, and our track record and expertise in the innovation economy will continue to help us win deals. We are encouraged by our progress in growing the new SVB commercial brand, winning new clients and bringing back those who left. Turning to the right-hand side of the balance sheet, deposits grew at an annualized rate of 10.4%, or by $3.8 billion in the first quarter, due to strong core deposit growth in the General and Direct Banks. In the General Bank, we continue to focus on growing customer deposits, and we're pleased to see these grew by $2.4 billion due to our continued emphasis on expanding relationships with current customers and attracting new accounts. Direct bank deposits increased by over $2 billion, despite a decrease in marketing expense during the quarter. While the Direct Bank channel is higher cost and now accounts for 27% of our deposit base, it is an additional lever we've used to remain resilient through a turbulent environment and is a strong source of insured consumer deposits funding our earnings base. Growth in this channel enabled us to continue to redeem some of our smaller subordinated debt issuances this quarter, given our excess capital and liquidity positions. These increases were partially offset by expected declines in the SVB Commercial segment. Deposits were down $760 million from the linked quarter, driven by continued client cash burn and muted fundraising activity. Moving to capital, our CET1 ratio increased by 8 basis points sequentially, ending the quarter at 13.44%. Our shared loss agreement added approximately 107 basis points to the ratio, down from approximately 120 basis points last quarter. We continue to use capital to support organic growth but acknowledge that we are operating with elevated capital levels. In addition to supporting organic growth, share repurchases are part of our capital distribution strategy. We assessed share repurchase as part of our capital plan that was approved by our Board during the first quarter and was submitted to our regulators earlier this month. While we have not yet received feedback from our regulators on the plan, we remain confident that a share repurchase plan will be an option for us in the second half of this year. While we don't have an approved share repurchase plan at this time, I will share some general information about how we intend to manage capital moving forward. We manage our capital ratios, excluding any benefit from the loss share agreement, which we refer to internally as adjusted CET1. All planned activities and capital levels are assessed in this context as the RWA benefit continues to run off at a rate of $1 billion to $2 billion per quarter and is expected to be mostly gone by the end of 2025. In addition to supporting organic growth and paying dividends, we intend to supplement that capital use with methodical share repurchases over time to get our adjusted CET1 ratio down to the 10.5% range by the end of 2025, which is the level it was following the acquisition of SVB. We do not intend to immediately manage capital down to this level. Instead, we intend to do it methodically and continually assess capital needs based on balance sheet growth expectations, earnings trajectories, and the economic and regulatory environments over the next couple of years. We will reassess our capital management priorities regularly, including annual updates to our capital plan.

Operator, Operator

The first question comes from Chris McGratty with KBW.

Christopher McGratty, Analyst

Craig, given the market's indication of sustained higher rates, can you explain how you're managing cash levels and security purchases over the next few quarters? How should we view the normalization process? Has there been any change since the last quarter?

Craig Nix, Chief Financial Officer

I would say that right now, we're intentionally maintaining a cash level that is a bit high, at around 15%. We aim to see that normalize to between 10% and 15% over time. While we are slightly under in investments, you have seen us deploy cash into the investment portfolio over the last three quarters, and we expect to continue this trend, potentially deploying $3 million to $4 billion before the end of the year. We are close to optimizing our cash levels, but we are intentionally keeping them high due to our purchase money related to the FDIC. Tom, do you have anything to add or expand on?

Tom Eklund, Executive

No, I think you hit it. I mean if you look at the last 3 quarters, we've grown in that $4-ish billion range. And I think you can expect that to continue in the short-term. And to Craig's point, as cash comes down, we will eventually normalize and sort of slow down that investment portfolio.

Christopher McGratty, Analyst

Okay. Great. And then as my follow-up, the improvement in credit, totally understand not wanting to declare victory yet. But given the marks that you have on the acquired portfolios and how stable credit was, how do we think about the reserve level? I mean, you released about $10 million in the quarter. How do we think in light of the charge-off guidance where reserves are trending?

Craig Nix, Chief Financial Officer

Are you asking about the overall reserve coverage? I will address it from both angles. Regarding overall coverage, we feel very positive about our reserves. This quarter, we covered our quarter-to-date net charge-offs four times, compared to about 2.5 times last quarter. The allowance now covers the 2023 charge-offs nearly 2.9 times and nonaccrual loans 1.6 times. We are also reassured about nonaccrual loans since we have individually analyzed over 70% of them for impairment, and our reserve ratio stands at around 30%. As for our stress portfolios, we've covered first-quarter net charge-offs 2.8 times compared to 1.8 times last quarter. This portfolio constitutes about 8% of our loans, with charge-offs at 61%. Therefore, we believe we are prudently and conservatively reserved for both the specific loan portfolios under stress and the overall allowance for credit losses.

Operator, Operator

The next question comes from Brian Foran with Autonomous.

Brian Foran, Analyst

Regarding the NII outlook this quarter compared to your previous guidance, is the increase in the range solely due to the shift toward 0 to 3 rate cuts? Or are there other factors contributing to the improvement?

Craig Nix, Chief Financial Officer

It is the shift in the rate cuts.

Brian Foran, Analyst

Okay. And on the capital commentary, and I apologize because at least my line cut slightly as you were talking; a, I just want to clarify the go-to capital ratio, did you say 10; and then b, I was trying to compare what you said now versus last time, was the spirit just kind of reiterating what you've said before? Or was there any more caution implied with the methodically comment and the ex FDIC as the core ratio you're managing?

Craig Nix, Chief Financial Officer

No. I think we're just reinforcing what we've said previously for share repurchases. And I would point out that over this 2-year period, we would intend to manage the CET1 down to the 10.5% range.

Brian Foran, Analyst

Okay. Is 9% to 10% still a long-term target? Or has the shift in the world changed the landing point to 10.5% beyond 2025?

Craig Nix, Chief Financial Officer

Well, the 9% to 10% was our previous target. We have proposed a new target range that we're not going to disclose today in our capital plan. But I can tell you that you shouldn't expect it to change significantly from the previous one. I want to give our regulators time to give us feedback on our capital plan that we just submitted a couple of weeks ago. But I would not expect a significant change.

Brian Foran, Analyst

Okay. Great. The last one just very quickly. I'm looking at Page 44 in your deck. Definitely here, I appreciate all the commentary on the SVB credit. A lot of the decline in provision dollars really came from the commercial legacy CIT book, can you just kind of give us the next round of color? I know there's a couple of comments on the slide as well. But what drove the provision expense on legacy CIT down so much?

Craig Nix, Chief Financial Officer

Well, their charge-off ratio has declined in the same way as the other portfolio. The biggest move, and 80% of the variance in our charge-offs, was in the investor-dependent portfolio. There are four major factors driving that. We had no real large dollar charge-offs during the quarter. The fact that charge-offs on smaller loans were down and the number of charge-offs were also down, we had a good recovery quarter. So most of the drop in at least the net charge-off guidance and consequently the provision really related to that investor-dependent portfolio.

Operator, Operator

The next question comes from Steven Alexopoulos with JPMorgan.

Steven Alexopoulos, Analyst

I don't know if Marc is on the line, but I want to start on the SVB side. The 1Q VC investment was very weak, and I thought we would see deposits decline at SVB. And also, I thought capital calls might come down a bit. Could you give some color on how you're able to maintain stable balances just given this not great backdrop?

Craig Nix, Chief Financial Officer

Well, I'll let Marc provide more details, but is Marc on the line?

Marc Cadieux, Executive

I can hear you. Go ahead and start, Craig.

Craig Nix, Chief Financial Officer

Yes. I was just going to set the backdrop, Marc, and let you amplify, but we were encouraged in the first quarter new money coming into SVB did increase over the first quarter. While cash burn and losses to competitors remain fairly consistent, new cash flows came in and went disproportionately off-balance sheet, but this was the first quarter since the acquisition where the cash position remained neutral. It is the first time it has not been negative since we merged last year. And Marc, I'll let you give some color around how we're doing that. But again, we're pretty encouraged by what we're seeing there.

Marc Cadieux, Executive

Yes. So Steve, it's Marc. And we'll follow-up. I think that was a great overview. Ultimately, what sounds like better-than-expected deposits in the quarter compared to what you would have expected is a function of our continued momentum in the marketplace, the continued success we're having both in winning new business and bringing back clients. That is really helping and bodes well for the future if we can keep it up.

Steven Alexopoulos, Analyst

Got it. That's good color. For a follow-up, there's a lot of excitement at your talk about the potential for you guys to buy back stock. But I'm curious, given that tangible book value growth is a key performance metric for you guys, how price sensitive are you as it relates to buybacks moving forward? Is there a certain valuation where you're unlikely to buy back stock? Or are you pretty much committed to get down to the 10.5% range?

Craig Nix, Chief Financial Officer

We don't buy it back blindly. So we do approach it similar to an open market acquisition, although there are obvious differences with respect to risk. We don't just blindly buy. Right now, we do see the stock at an attractive price, so we would anticipate repurchasing at that price. I'm not going to share at what levels we would trigger where we wouldn't, but we do consider that in our internal model. It is our goal to manage down to that 10.5% range over the next 2 years on CET1.

Tom Eklund, Executive

No, I mean, obviously, from a buyback and capital perspective, keeping the stock makes even more sense. But to Craig's point, if you look at it similarly to open market transactions, we need to ensure that we can align payback periods and everything for us.

Operator, Operator

The next question comes from Stephen Scouten with Piper Sandler.

Stephen Scouten, Analyst

And just a follow-up kind of around that repurchase. I just want to make sure I'm thinking about this excess capital correctly. So if I think about the 107 basis points you're kind of adjusting for the loss here. We're talking about like 12.37, I guess, on CET1. So about 190...

Craig Nix, Chief Financial Officer

That's correct.

Stephen Scouten, Analyst

Okay. Great. Perfect. Going back to SVB, it seems like you have really stabilized that brand and footprint. Is it now time for you to be more proactive? How do you view the long-term growth in those segments today?

Craig Nix, Chief Financial Officer

Marc, why don't you take that one?

Marc Cadieux, Executive

Yes. So I think the environment is the challenge here. As noted earlier in our discussion, our target markets remain challenged. We expect those challenges to continue through '24, allowing for some optimism around IPOs coming back and potentially deposits picking up in the second half as we've talked about. The trick is as long as venture investment remains diminished, there is only so much you can step on it, similarly on the lending side. The tech and healthcare banking sectors, in particular, require us to manage the loans we have carefully, given the heightened asset quality concerns that arise from a market downturn like this where investors aren't investing as much. With all that for context, I think we will continue to focus on executing as best we can. Trying to accelerate now would be something we might consider when we have more confidence that our target markets are coming back and we see that pickup in venture investment. Until then, we will continue to compete effectively but carefully.

Operator, Operator

The next question comes from Christopher Marinac with Janney Montgomery Scott.

Christopher Marinac, Analyst

I wanted to ask about originating loans kind of in the legacy for Citizens footprint from the perspective of possibly having lower charge-offs there. And therefore, the guide on charge-offs could even be better down the road. I mean Craig, is that a plausible scenario that you may originate less in some of the CIT and SVB areas and more at the old for Citizens and that drives different charge-off outcomes?

Craig Nix, Chief Financial Officer

No, I don't think that's the case. I'll let Elliot talk about our forecast for the business segment.

Elliot Howard, Executive

Yes. We really see good growth across the segments. For the General Bank, our branch network continues to drive good growth there. I mean, I think it's a testament to a solid market strategy and the tenure of our sales team. We've seen that up significantly this quarter. You're right that that book has really got sub 15 basis points type charge-offs. So we see that being beneficial. As for the capital call business, that's really shown no charge-off history, and we expect continued growth in that area for the rest of the year as some of the recent originations come through. I don't see us pulling back on any segments, but the extent we keep seeing good growth in the General Bank, that will certainly help the charge-off ratio.

Christopher Marinac, Analyst

Got it. I appreciate it. And any other criticized trends for the General Bank outside of what was called out in the slides this morning?

Craig Nix, Chief Financial Officer

No. We don't see any rise there. We anticipate it will be fairly stable.

Operator, Operator

The next question is from Zach Westerlind with UBS.

Zachary C. Westerlind, Analyst

My question is just around the trajectory of loan yields. I saw that it ticked down quarter-over-quarter. Is that just a function of lower accretion income? Or is there another driver there? And any color you could provide on the trajectory going forward would be great.

Craig Nix, Chief Financial Officer

Yes. There was a decline due to accretion declining in the quarter; we were down about $40 million on a sequential basis in accretion income, so that had an impact. As far as trajectory, it really depends on the rate cut scenarios. If we look at just no cuts, we would expect the headline yield to remain fairly stable in the first quarter. If we anticipate three rate cuts, we would start to see some decline in the yield to the low sevens in the second quarter and to the mid-seventies at the end of the fourth quarter. We would certainly start to feel that impact going forward if we had three rate cuts. The accretion income added 45 basis points to the margin last year, and we expect that to be down 24% this year, representing a substantial reduction in accretion income.

Operator, Operator

We have a follow-up question from Brian Foran with Autonomous.

Brian Foran, Analyst

Just two quick ones. Can you remind us where you want to get the loan-to-deposit ratio or range over time or on a normalized basis?

Tom Eklund, Executive

Yes. On a more normalized basis, we see that loan-to-deposit ratio getting back to the mid-80s.

Brian Foran, Analyst

Perfect. And then as we start thinking about '25 and maybe putting the rate cuts in '25 as opposed to '24, if the Fed is cutting a few times in '25, would kind of the sensitivities be similar to what we're seeing now?

Craig Nix, Chief Financial Officer

It would be similar; it would just push the trough out further. But yes, similar trends. We would expect similar trends at this setting.

Operator, Operator

I'm not showing any further questions at this time. I'd like to turn the call back over to you, host Deanna Hart for any closing remarks.

Deanna Hart, Senior Vice President of Investor Relations

Great. Thank you. And thank you, everyone, for joining our earnings call today. We appreciate your ongoing interest in our company. If you have further questions or need additional information, please feel free to reach out to our Investor Relations team. We hope you have a great rest of your day.

Operator, Operator

Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Have a wonderful day.