Earnings Call Transcript - NEWT Q2 2022

Operator, Operator

Good day. Thank you for standing by. Welcome to the Newtek Business Services Corporation Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Please be advised that this conference is being recorded. I would now like to turn the call over to your speaker today, Barry Sloane, President and CEO. Please go ahead.

Barry Sloane, President and CEO

Good morning, everybody, and I greatly appreciate everyone attending our Q2 second quarter financial results conference call. I'd also like to welcome Nick Leger this morning to the call, who will be joining me. Nick is our Executive Vice President and Chief Accounting Officer. In addition, we have invited several Newtek executives to the call today in a listen-only mode. I'd like to introduce Nick Young, who was hired over a year ago as Chief Risk Officer of Newtek Business Services Corp; John McCaffery, Executive Vice President of Finance; Kelvin Lui, Senior Vice President of Operations; and John Vivona, who just joined us this week as SVP of Risk Management. I point these four individuals out primarily because they will all be executives that will be joining the Newtek Bank, subject to regulatory approval. Once we complete the acquisition of National Bank of New York City, Nick Young will become the President and Chief Operating Officer. John McCaffery will be the Chief Financial Officer of Newtek Bank. Kelvin Lui will be the Chief Digital Officer, and John Vivona will be joining us as Chief Compliance Officer. In addition, many of you are familiar with Peter Downs, who has been with Newtek for over 19 years and will maintain his position as Chief Lending Officer. Peter is also President of Newtek Small Business Finance, and he'll be joining the bank. Jared Mills, the President of Newtek Technology Solutions, will transition to Chief Technology Officer of the bank as well. The purpose of introducing all these people is to give everyone a very strong indication that we are prepared for this acquisition, subject to approval. Many of these executives are already part of our budget for the existing business going forward and have been involved in our expense structure in Q1 and Q2. We are very excited about our future and look forward to presenting to you today. I'd like to call everyone's attention to Slide 1 on the deck. For those of you that are following on our website, it's in the Investor Relations section in Presentations. There are two decks there today that we will be looking at. The first is the financial results conference call, and the other deck is the update on the pending acquisition of National Bank of New York City. For those of you that are online, you can follow the deck through the Internet connection that you currently have. So please call your attention to the forward-looking statement on Slide number 1. Slide number 2, we always start off with our returns, which are as of July 29. As many of you are fully aware, the company has had a stellar track record of producing results over the long-term. Our 10, five, and three results are real strong. This has been a tough year for us. Obviously, when we announced the bank deal, we were transitioning over with the expectation that we would get all of our approvals, which we will talk about today. Though we've done well paying our earnings in the form of a dividend as a BDC, the stock price has had a difficult run, which does eat into total rate of return. Part of that is due to the difficulty in providing long-term guidance as a BDC or as a bank. Our analyst coverage, which we have for primarily BDC analysts, has also done a stellar job in this transition, but it does make it more challenging to report as well as a shareholder transition from shareholders that have been very much focused on the dividend only, being concerned that as we become a taxable entity that dividend perspective will decline. With that said, let's move to Slide number 3. Let's talk a little bit about the potential transition into a bank. We'll be covering that on this call as well as our specific results in the quarter. On June 1, we had a Special Meeting of the shareholders, and Newtek shareholders overwhelmingly approved the authorization of the Board to withdraw its application. It's a 40s Act Company with 89% of the votes cast voting for the opportunity to withdraw that particular election. In the Proxy Statement, we described the rationale that the management team and the Board believe as well as 89% of the shareholders that this is in the shareholders' best interest, which relates to a) lowering our cost of capital over the long-term, b) having less of a reluctance to issue high-cost equity to continue to fund growth, because we are clearly a growth company—this can be seen in the delivery of growth in dividends and earnings historically, particularly as a BDC. Going forward, we will be able to grow the business using more core deposits and debt than having to rely upon equity, based on the fact that BDCs have a 2:1 leverage cap, of which we've been conservative with a much lower number. So we've been able to grow our earnings and dividends historically as a BDC without excessive leverage, and we believe we will benefit from that going forward. Also importantly, we will talk about this a lot on the call; in a bank holding company structure, owning a bank, we are extremely excited about unlocking value in the technologies that Newtek has built over the course of 20 years. We will be discussing the Newtek Advantage, our trademark product, which will be offered to clients through our dashboard, giving the business owners we deal with every single day a tremendous asset for their business. We are very excited about the potential to consummate our transaction with National Bank of New York City and become a bank holding company. Let's move to Slide number 4. Obviously, we will talk a lot about the benefit of our homegrown technology, which has delivered fantastic financial results in the marketplace. However, we will now be able to feature and showcase that technology through the NewtekOne Dashboard, which we position as the Newtek Advantage. We hope to position ourselves as the one company that our business clients will ever need to help them grow their business and become more successful. We are excited about the Newtek Advantage. I'd like to call everyone's attention to Slide number 5, where we really highlight what is the advantage in the Newtek Advantage. Through the Newtek Advantage, and obviously a bank holding company and a banking structure, we are going to give our client base—approximately 30 million clients in the United States that the SBA defines as independent business owners or small to medium sized businesses—a huge demographic representing about 50% of non-farm GDP. We are going to provide those clients personal banking relationships. We will illustrate that in the next slide, number six. We are going to give our clients analytics, frictionless software, and transactional capability. We are going to provide them with four things that other banks simply do not. I use the expression that our competitors go to our client base, take their money and may only make them a loan. In most cases, they push the client into their retail system with retail products. That's not what Newtek Bank will be doing for its client base. Let's go to Slide number 6. Therein lies the Newtek Advantage. The most important thing about the Newtek Advantage is our competitors have relationships with their customers, where they may or may not know a single person at the institution—maybe only one banker attached to the relationship. With Newtek and the Newtek Advantage, you will get six to seven relationships almost instantly. You will meet a licensed insurance agent, a payroll person, a tech solutions person to help with your website or domain names, a payment specialist, a lending specialist, a depository specialist, and a relationship manager overseeing the entire account. These individuals will be available online, allowing you to see and communicate with them directly. It's the new concept of relationship banking in 2022 and 2023—no bankers, no brokers, no branches, just solution specialists. So with Newtek, you get relationships through the advantage. You will receive analytics, comparing your payroll this time this year to last year, your web traffic statistics, and receive assistance in growing your website's effectiveness, all through our solutions specialists and analytics in addition to transactional capabilities. We will discuss the advantage further as we proceed through the presentation. Importantly, we believe that the advantage will be similar to an iPhone or smartphone; people don’t buy them just to make better calls. They buy them for all the other features. That’s what the Newtek Advantage will provide. You will have the ability to open a high-yield savings account, CD, or business checking account. But consider all the additional benefits you will gain through the Dashboard and the Newtek Advantage. Let’s move to Slide number 7, which reemphasizes most of the points previously mentioned and importantly notes that we also expect to offer Newtek tax and digital bookkeeping services in the future. Our clients want integration of general ledger, payroll, payments, and deposits. These will be key focuses for us in 2023. Slide number 8 segues back to quarterly highlights while refocusing on the acquisition and our future. We had a very strong quarter for metrics, particularly in the area of 7(a) fundings, which is one of Newtek's flagship programs. We funded a record $200 million worth of SBA 7(a) loans, representing a 112% increase over the year prior in that particular quarter. We are very excited about this unit growth. We funded 330 units in the quarter ended June 30, 2022, an increase of 154% in that period. For the first six months of the year, we reached $363 million, another record funding of 83% increase. It's important to note that our competitors in the SBA space are flat this year, while we have risen. Importantly, we are achieving this without reducing credit quality for our borrowers—in fact, we've tightened credit standards, which reduced our approval rate compared to our loan committee. Notably, in July, which is typically a difficult funding month, we funded $62 million of 7(a) loans. We are forecasting $750 million for the full year, representing a 33% increase compared to $560 million last year. Additionally, it's vital to highlight the inflated comparisons in income due to PPP in 2021. In the second quarter of 2021, we recorded $25.5 million of PPP fee income, which contributed to approximately $1 per share. In the first six months, it was $49.7 million—around $2 per share. If you analyze our calendar year last year of $3.47 adjusted net investment income, taking away the $2 PPP, you arrive at a $1.47. We’ve nearly matched that in the first six months with the same cost structure while returning to our core business. We are pleased with the metrics, the plan we are on, and the progress we're making. Moving to Slide number 9, there are operational drivers creating substantial outperformance against our industry competitors. We've implemented changes to our NewTracker platform, enabling us to seamlessly transfer data from borrowers to our lending process—again, without bankers, brokers, or BDOs. It’s crucial to note that many competitors in the 7(a) sector are reducing lending activity due to shrinking gain on sale premiums we will discuss, which puts them in a position where they struggle to maintain profitability based on high origination costs. Our technological advancements allow us to enhance efficiencies even when market forces disfavor our positions, ensuring we continue to deliver results that our investors expect. We've made major technological upgrades. We continue to receive about 100,000 referrals per quarter on average, not only for 7(a), but also for 504 loans, lines of credit, and non-conforming conventional loans, especially post-acquisition of National Bank of New York City. Those referrals will integrate into our conforming C&I and CRE books. We made significant changes at the senior management level, with Peter Downs instilling great efforts and overseeing a capable team including Anna Pablo, Justin Gavin, Virginia Wiley, and their supporting staff. It's vital to note that we are not static; we continuously innovate, providing business owners with the benefits of our innovative strategies and offering tremendous value in assets via the Newtek infrastructure. On Slide number 10, you can see our pipeline growth. It is evident that we have strong tailwinds for the second half of the year with significant growth in our pipeline, especially in the 7(a) space. While 504 is a bit more challenging, the approved pending closings are crucial for achieving our target of $150 million in closings by year end. We anticipate a very productive second half of the year, with solid loan demand. Is loan demand down overall? Yes, in a tougher economy, you're tightening guidelines, but our referrals are up; we are being more selective and outperforming the market in all facets of lending by identifying higher-quality credits, offering a frictionless environment, processing applications efficiently, and ensuring loans hit the books. Moving to Slide number 11, aggregated data reveals our pipeline remains robust, and we expect good performance in the latter half of the year. Overall, the loan demand remains strong. On Slide number 12, we emphasize what we believe constitutes our secret sauce: maintaining focus on growth and loan referrals while extending to payment processing, payroll, tax solutions, and other areas. We have nearly 20 years of experience utilizing our NewTracker system in a bankerless, BDO-less environment. We continually improve our technological lending applications. Upgrading NewTracker enables better data analytics, which will help improve our business. Let's transition to Slide 12. It's also worth emphasizing on Slide number 13 that we are not engaged in outsourcing. Currently, we have 480 employees on the Newtek payroll, and we expect to exceed 500 after the bank acquisition. While others are reducing their staff, we are adding employees. This context highlights management's expectations and optimism towards our positioning amidst headwinds. Moving to Slide number 14, we discussed the differences in 7(a) lending and how changes in the program would impact income. We didn’t anticipate these changes would significantly affect gain on sale prices, which we’ll discuss on Slide number 15. We will wait to be more patient about that discussion. It is crucial to point out that our gain on sale numbers significantly decreased in Q2, yet we managed to meet our quarterly adjusted net investment income projection and even exceeded the six-month projection while also surpassing street consensus for adjusted net investment income in Q2, arriving at $0.75. We have demonstrated resilience in our 24-year journey, navigating market realities from 2008-2009 through the pandemic—staying nimble and ensuring we position ourselves correctly. Moving forward to Slide number 15, let's delve into dividend performance, with a $0.75 dividend in Q2 representing a 7% increase over the previous year’s quarter. We paid $1.40 for Q1. Comparatively, at the current price, that yield is attractive for shareholders. We’re forecasting dividends cumulatively for Q3 and Q4; however, accurate guidance is challenging as we’re uncertain about the exact conversion timing. Today's focus is on potential approval timelines and subsequent closure of the bank deal. We aim to provide investors with guidance and expect to pay a BDC dividend in the latter half of the year within a range of $1 to $1.50. At the lower end, that represents $2.40 for the year, while the upper end results in $2.90 for the year. Since we announced the deal in August 2021, we have paid out $3.35 in dividends to date. Adding another $1 to $1.50 on top of that would bring total dividends close to $4.40 to $4.60 for those who were worried about dividend reductions moving forward. We believe we have executed well in generating cash over the past four quarters since the bank announcement and remain optimistic about our projected dividends, offering attractive yields to shareholders in the coming months. Slide number 16 outlines comparative financials. We acknowledge these are difficult due to the differential of PPP income, which we do not enjoy this year. However, we believe we've transitioned effectively back into our core business with solid growth prospects identified in the pipeline. We are pleased with our reported financial results for Q1 and Q2. Moving to Slide number 17, our adjusted net investment income for the first half of the year stood at $1.46, exceeding our midpoint expectation of $1.45. As we progress towards the year's end, we are optimistic regarding closing the bank transaction final approval from the Fed and the OCC, facilitating a shift towards a new financial structure. Regarding Slide number 18, this has been used for pro forma debt-to-equity reconciliation. We sell several government guarantees by quarter-end, resulting in substantial broker receivables. Once settled, our debt-to-equity ratio rests at a low 1.15. This indicates our capacity to generate attractive yields with minimal financial leverage. Owning a bank allows us to leverage up to 10:1, which should yield significant benefits for earnings per share. Slide number 19 pertains to the average unguaranteed retained balance, which continues to lessen—a critical detail since smaller balances lead to greater diversification across our portfolios. We have conducted 11 securitizations to date, with one or two anticipated between now and year-end. On prime plus 2.75, our maximum rate allows us to maintain competitive pricing; we've not conceded this in 12 years and continue to do so. Notably, as the prime rate recently adjusted from 4.75% to 5.5%, we anticipate increases in interest margins benefiting our bank environment. Slide number 20 addresses gain on sale. Our figures reveal substantial reductions in gain on sale prices in Q2, dropping from 12.05% in Q1 to 9.2%. The lagging prime rate, alongside the Fed’s actions, contributed to yield discrepancies. Slide number 21 provides further insight regarding the diminishing trend in our gain on sale price—historically, our gains have not dropped below Q2 levels in seven years. Expectations regarding rebound prices in Q3 or Q4 are hopeful yet subject to market adjustments. We take pride in meeting financial projections despite the challenges posed by the declining gain on sale premiums. As seen on Slide number 22, gross income from Q2 2022 is nearly $2 million higher than Q2 2021, with net interest income rising from $4.6 million to $5.1 million. The lagged adjustment of loans will bolster interest income monthly based on our lines of credit. Slide number 23 reveals the seasoning of our portfolio, and we believe defaults are largely behind us, as indicated by a current 98% currency rate. This reflects our proactive approach with clients, ensuring they take advantage of PPP, IDR loans, and other supports, unlike during 2008 and 2009. We have clients who are liquid both personally and professionally, contributing to a high currency rate. Slide number 25 displays a decrease in non-accrual loans from approximately $30 million on December 31 to $25 million on June 30—an encouraging trend. Slides 26 and 27 showcase classic data that will transition regularly. Now let's move to the portfolio company review, starting with Slide number 29 regarding our SBA 504 loan program, with a forecast of $150 million. This is a significant business for us, boosted by our solid partnerships with banks like Deutsche and Capital One. We anticipate a productive second half. Slide number 30 details the 504 business: traditionally, entire loans shift off our books, supported by SBA debentures and typically sold within secondary markets for a premium. Slide number 31 shows return on equity, both 504 and 7(a) business exceeding 30%, enabling high returns as a BDC. Thus, we are well-positioned for success, especially in lowering costs of funds by leveraging our strong history in this sector. Slide number 32 outlines the non-conforming conventional loan program, which began in 2019 for loans that don’t meet SBA 7(a) standards and have no government guarantees. The balance for this program stood at $84.2 million as of June 30. We securitized our first batch in January 2022 and continue to anticipate positive outcomes in partnership funding. Moving to Slide 33, we are negotiating additional joint venture agreements with an institutional investor for $100 million equity capital, which can help fund $200 million in non-conforming loans. Slide 34 underscores the benefits of our non-conforming conventional loan initiative—yielding additional origination fees and servicing income while enhancing operating leverage. We expect within the next two years, we can fund loans in the range of $400 million to $1 billion. Slide 35 reflects our January 2022 securitization, $56.3 million rated A by Morningstar, featuring an attractive net interest margin for our equity partners, offering appealing returns on investment. Additionally, it provides Newtek with pertinent servicing income and origination fees. Slide 36 emphasizes Newtek Merchant Solutions, holding a combined fair market value of $120 million as of June 30. A comparison to EVO, which underwent a recent acquisition, illustrates favorable valuations and the significant importance of this segment as we aim for bank status. For Slide number 37, we focus on Newtek Technology Solutions, revealing difficulties we faced in the first half due to supply chain issues. However, run rates are expected to improve in the latter half, reducing our full-year EBITDA forecast to $4.2 million, but looking forward to a steady $3 million run rate in the second half. We remain enthusiastic about our cloud services trajectory. Slide 38 exhibits our diverse offerings about cloud solutions available through Newtek Technology Solutions. On Slide number 39, we also reflect on our POS provider capabilities; we hold a 51% interest with robust competition, showcasing an all-encompassing payment system that can facilitate various integrations. We look forward to growth opportunities in that sector. In Slide number 40, we touch on our payroll and benefits services, where we anticipate profitability in 2022, expecting to provide consolidated information moving forward. To conclude on Slide number 41, regarding our Q2 performance, we are excited about our results thus far and optimistic about obtaining regulatory approvals from the Fed and OCC in the third quarter of 2022. Before passing the call over to Nick, I request everyone to explore the deck on our website, newtekone.com, regarding the pending acquisition of the National Bank of New York City. We have been one year into this process of pre-filing applications and discussions with the Fed and OCC for bank holding company approval, and we feel strongly this acquisition is in the best interest of shareholders. Important details will be outlined in the slides for your review.

Nicholas Leger, Chief Accounting Officer

Thank you, Barry, and good morning, everyone. You can find a summary of our second quarter 2022 results on Slide number 43, as well as a reconciliation of our adjusted net investment income or adjusted NII on Slide number 45. For the second quarter 2022, we had a net investment loss of $2.25 million or a loss of $0.09 per share as compared to a net investment income of $15.5 million or $0.69 per share in the second quarter of 2021. Please note that the income related to the PPP of $25.5 million is included in the second quarter 2021 investment income. Adjusted NII, which is defined on Slide number 44, was $18.1 million or $0.75 per share in the second quarter of 2022, compared to $27 million or $1.20 per share for the second quarter of 2021. Focusing on second quarter 2022 highlights, we recognized $19.2 million in total investment income, a 47.6% decrease over the second quarter of 2021. The primary driver for this decrease was due to the $25.5 million fees from the PPP in 2021. Dividends from portfolio companies totaled $5 million in Q2 2022, which helped offset the decrease in PPP fees. Additionally, interest income increased by $1.8 million due to a year-over-year rise in the accrual loan portfolio, and other income saw a $1.1 million increase in Q2 2022 compared to Q2 2021, primarily driven by a year-over-year increase in SBA 7(a) loan origination volume. Servicing income rose 14.4% to $3.2 million in Q2 2022 versus $2.8 million in the same quarter of 2021. Dividends from portfolio companies totaled $5 million, with $3.1 million from NMS, $1.35 million from NBL (our 504 business), $360,000 from NCL (our conventional loan joint venture), and $150,000 from mobile money. In comparison to the second quarter of 2021, there were no distributions from portfolio companies. Total expenses for Q2 2022 increased slightly by $400,000 compared to Q2 2021, primarily driven by higher interest-related costs. Realized gains recognized from the sale of guaranteed portions of SBA loans totaled $21.3 million in Q2, versus $14.1 million during the same quarter in 2021. In Q2 2022, NSBF sold 338 loans for $190.3 million at an average premium of 9.2%, compared to 142 loans sold during the same quarter of 2021, at an average premium of 14%. The increase in realized gains was attributed to higher SBA 7(a) loan origination volume in Q2 2022 compared to the previous year. As mentioned, income related to the PPP is included in investment income, not in realized gain. Overall, our operating results for Q2 2022 led to a net increase in net assets of $13.5 million, or $0.56 per share, and we ended the quarter with a NAV per share of $16.31. I would now like to turn the call back to Barry.

Barry Sloane, President and CEO

Thank you, Nick. Operator, let's open up to Q&A.

Operator, Operator

Thank you so much. Your first question comes from the line of Paul Johnson from KBW. Please go ahead and ask the question.

Paul Johnson, Analyst

Thank you for taking my questions. Good morning, everyone on the call. You mentioned a lot of names there earlier, and I was hoping to quantify the potential impact quarter-over-quarter on what earnings would have been this quarter, or what the benefit might be next quarter just from the increase in the prime rate during the second quarter?

Barry Sloane, President and CEO

Yes, Paul, it’s a tough one because that requires forecasting bond prices and capital market conditions, which are challenging to predict. I believe in the roll forward, you're likely to experience a lag on that coupon. There should be partial adjustments between the two recent rate hikes, but the full effect of the three-quarters point hike will manifest in the quarter following the hike—but we do see movements in expenses; however, full benefits from the portfolio might not be realized just yet. Regarding gain on sale, our portfolio mix shows that we haven’t seen a lower gain on sale in seven years. Is it fair to suggest that will be the floor? I can’t claim that, but I’m optimistic that we should be able to exceed that. Hopefully, that information is helpful.

Paul Johnson, Analyst

Yes, that’s very helpful. I appreciate it. My next question is about risk assessment during underwriting. Is there a point during the cycle where you would shift your origination strategy to focus on a higher-quality subset of the 7(a) market, especially in light of increasing risks stemming from ongoing quantitative tightening and the potential for recession?

Barry Sloane, President and CEO

One way to evaluate this is by noting that businesses are adapting to the changing environment, meaning some are actually in a stronger position post-pandemic than they were before. During the underwriting process, it's vital to ask clients how they have adjusted to rising rates. How liquid are they? What are their plans concerning labor costs and operating expenses? Monitoring their capacity to sustain cash flow if revenues decline is also important. Given the current situation, we're pleased with the opportunities available to select higher-quality credits. We've tightened our underwriting, focusing on smaller loans for better diversification, which is a risk reducer.

Paul Johnson, Analyst

That makes sense, and that's a great answer. I appreciate that. Lastly, as we are possibly nearing the final quarters as a BDC, can we expect to pay out 100% of NII? I'm looking at the dividend forecast of $1 to $1.50 for the second half of this year, and it seems that should approximate what you expect for earnings.

Barry Sloane, President and CEO

Yes, Paul, we will be close to the top end. At this point, we won't retain as it doesn't make sense—you have to eventually distribute the funds when the election is withdrawn. The dividend range you mentioned will likely be close to the full payout.

Paul Johnson, Analyst

Got it. My last question pertains to the bank and how much you are able to answer at this point. What about the legacy SBA portfolio that will reside outside the bank? As it runs off, how do you intend to use the proceeds from this? Will these just drop down as funding into the bank, or will they sit on the parent company balance sheet along with JVs and other investments?

Barry Sloane, President and CEO

What's been challenging to communicate is that we've historically had to fund SBA 7(a) and 504 growth by selling stock, diluting EPS as shares increased. Now, these businesses can be funded primarily from the bank using retail deposits, which is beneficial. The legacy portfolio will run off up at the bank holding company, allowing us to harvest potential value over time. We believe utilizing core deposits over securitizations will be measurably beneficial.

Paul Johnson, Analyst

That makes sense. Those are all my questions this morning, and I appreciate your time.

Barry Sloane, President and CEO

Thank you.

Operator, Operator

Thank you so much, and we have our next question from the line of Adam Morton of RBC. Please go ahead.

Adam Morton, Analyst

Congrats on the quarter. As we find ourselves in this new paradigm with the Fed, could you summarize how unlocking value as a bank will benefit shareholders?

Barry Sloane, President and CEO

Absolutely, Adam, and thank you for the question. Newtek operates five lines of business that have operated primarily independently. By centralizing our client interaction through our Newtek Advantage dashboard, we believe we will present all these functionalities seamlessly, improving value for our shareholders. Clients will obtain analytical tools that they typically might visit multiple vendors for. Our current clients often have deposits elsewhere, hence we aim to leverage our existing businesses into one platform that enhances both the client and our product offerings—fostering retention and growth. There’s potential to white label our capabilities for small community banks, thereby creating mutually beneficial partnerships. Ultimately, integrating and delivering our technologies into one cohesive offering is expected to significantly benefit shareholders.

Adam Morton, Analyst

That makes sense. Thank you so much.

Barry Sloane, President and CEO

Thank you. I appreciate everyone being on the call. We know it was a mouthful and thank you for sticking through it in an hour. We are thankful for your attendance and to all the analysts joining. Two analysts published reports on us today, and we appreciate the support as we look forward to our next report freight. Have a great day, everyone. Thank you.

Operator, Operator

Thank you, presenters, and this concludes today's conference call. Thank you for participating, and you may now disconnect.