Earnings Call Transcript - RITM Q1 2021

Operator, Operator

Good day and welcome to the New Residential First Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. I would now like to turn the conference over to Kaitlyn Mauritz, Head of Investor Relations. Please go ahead.

Kaitlyn Mauritz, Head of Investor Relations

Great. Thank you, Paul. And good morning, everyone. I'd like to thank you for joining us today for New Residential's First Quarter 2021 Earnings Call. Joining me here today are Michael Nierenberg, our Chairman, CEO, and President; Nick Santoro, our Chief Financial Officer; Bruce Williams, CEO of NewRez; and Baron Silverstein, President of NewRez.

Michael Nierenberg, Chairman, CEO and President

Thanks, Kaitlyn. Good morning, everyone. And thanks for joining us. As I look back, what a year it's been. I am extremely excited about our future and what lies ahead. One year ago, our stock was trading around $6.50. We were raising a pool of capital at 11%, and the world continued to feel uncertain. Today, we have more vaccines than demand, the US is healing, and NRZ just announced an acquisition of Caliber at $1.675 billion. What a difference a year makes. Our investment and operating business lines had good quarters. Looking ahead, we feel that we are poised to grow earnings and create a world-class financial services company with Caliber. As the competitive landscape grows more difficult on the operating side, the environment will play into our strengths with our capital base, balance sheet, and outstanding leadership team. The combination of the Caliber and NewRez teams, with the exceptional talent in both organizations, will create a company to be reckoned with. The possibilities for us are endless. We will focus on rolling out other products to our homeowners and building on the great retail presence that Caliber has created. With refinancing volumes significantly lower and the purchase markets for housing expected to remain robust, there is nobody better positioned to take advantage of this scenario than us. As we look ahead, our investment business is well positioned to take advantage of higher rates, with MSRs leading the way. They will increase as rates rise, leading to more cash flow and higher earnings. The addition of Caliber and the significant strides we have made around recapture at NewRez will offset the lower expected earnings we will see in the origination business as gain on sale margins continue to shrink. The potential for higher capital charges will lead to more consolidation in the mortgage industry and more MSR sales.

Baron Silverstein, President of NewRez

All right. Thanks, Mike. Good morning, everyone. I'll turn on slide 17 and just echo Mike's sentiment. We're also really excited about the opportunity to combine the NewRez and Caliber platforms. While we are early in our integration discussions, we believe the two companies will have significant upside that will accelerate our objectives and goals for our origination and servicing efforts. This slide shows we feel the combination of the platforms will provide a strong alignment in both our business models and long-term strategies. Whether that's in direct-to-consumer by increasing our recapture rates over 50%, leveraging Caliber's distributed retail channels to improve our JV franchise, or in wholesale, further penetration in the direct-to-broker channel while expanding our non-QM platform, growing our correspondent footprint, and expanding our servicing franchise. As Mike mentioned, the talent, scale, and capacity support our growth along with our transformational mortgage technology. The transaction is going to be great for both companies, and we're looking forward to providing more details in the months ahead. Turning to slide 18, I want to provide a little color on the NewRez operating results. The first quarter of 2021 was a fantastic quarter for our origination platform, including record quarterly fundings and record quarterly pull-through adjusted lock volumes. For the division, we ended the first quarter with $191 million of pretax income, a 23% decline quarter-over-quarter. The primary reason for the decline is peak margin compression, as we saw margins compress with the rate move in February. However, in April, we've seen a stabilization of margins in all channels, other than wholesale, which has remained under competitive pressure due to moves from larger players in the sector. When I look at the performance of each channel during the quarter, we made progress on many key goals and initiatives we discussed on our last earnings call. Direct-to-consumer remains a huge focus for NewRez and NRZ and represents a long-term opportunity for our company. We've continued to grow this channel by 30% every quarter, and in March we had our largest funding month, closing $2.3 billion in loans. This is something we're proud of as our added capacity is beginning to meet demand and the previous changes in sales and operational efficiencies are taking effect. In the JV business, the first quarter is typically slower than the rest of the year, given the seasonal volume slowdown in December and January. Our JV channel has also historically been purchase-driven, and we're seeing more purchase volume as refinances slow. Regarding our wholesale channel, we've continued to grow our platform by adding new customers, broker relationships, and building our branches. While margins have compressed, the relaunch of our non-QM channel has begun to gain momentum, and we're now out with all of our product offerings. Our sales teams have picked up speed as well, with locks of $35 million in April and a goal to recover to our pre-COVID levels of $125 million per month. In our correspondent channel, we achieved another record quarter, purchasing over $17 billion in mortgage loans, with March being our largest funding month ever at over $6.5 billion. We will continue to evaluate the market dynamics in our correspondent channel, opportunistically buying MSRs and adding to our customer base. When considering our performance for the first quarter, both in terms of funding units and other metrics we use to evaluate our performance, we saw great progress. Moving to slide 19, I want to highlight the growth in market share. This continues to be agnostic to market conditions as all mortgage companies have grown origination production and profitability in 2020, meaning a rising tide lifts all boats. We've demonstrated our ability to successfully grow not only our origination volumes but also our market share, which has grown 2.5%, representing 30% growth quarter-over-quarter. Small changes in market share can have a significant impact on our overall profitability. We also have one of the largest servicing portfolios, with over 1.7 million homeowners that we want to retain as NewRez customers. As we continue to build our brand and improve recapture, our plan is to execute on that goal. The right side of the page reflects our recapture performance in the first quarter. I mentioned earlier the process changes that have taken effect, which can be seen in the quarterly refinance recapture statistics, showing a 27% increase quarter-over-quarter. This proves our brand awareness and recognition are crucial to further building customer loyalty. As we connect better with our consumers, our direct-to-consumer platform will continue to grow. Moving to slide 20, I've already highlighted the performance of our direct-to-consumer channel, but I’ll reiterate that we've done an excellent job growing this segment. You can see this in the top left chart regarding increased volume, with quarterly fundings up to $5.7 billion and pull-through adjusted lock volume of $6.4 billion driving our recapture performance. We continue to see margin compression quarter-over-quarter. The DTC margins did increase slightly in April, so expectations are that margins may flatten for the remainder of the quarter. We had our largest funding month again in March of 2021, achieving this every month in the quarter. As previously mentioned, changes in our tech and processing structure are helping improve efficiencies. We’ve also entered the new customer acquisition business, and we expect this expansion will offset some of the reduction in refinance volumes in the coming months. Turning to slide 21, for the servicing division, we ended the first quarter with $31.6 million in pretax income, a 34% decline. The primary reason for the decline in PTI is largely related to seasonal adjustments to accruals released at the end of last year and a reduction in expenses. For context, our third quarter 2020 PTI was $30 million, aligning more closely with the normalization of our servicing P&L. We ended the first quarter with an aggregate servicing portfolio of approximately $305 billion UPB and around 1.7 million customers, representing modest growth quarter-over-quarter. On the bottom right, you’ll see a slight pickup in cost per loan to service, reflecting efforts to assist COVID-impacted homeowners achieve loss mitigation solutions to retain their homes. We expect these costs to persist through the end of the foreclosure moratorium. On slide 22, we provide this summary as it is significant to showcase the strength of our best-in-class special servicer and our special servicing team. Jack Navarro and our special Shellpoint Mortgage Servicing team do an outstanding job and are well recognized in the industry. It is one of the best special services in the business. The recognition from both Moody's and Fitch to upgrade our platform after the substantial growth and challenges from COVID are further testament to our strength in special servicing. On this last slide, slide 23, it's worth highlighting the continued progress we've made in helping borrowers with forbearance. Since the CARES Act was announced, we've assisted over 234,000 homeowners navigate the COVID pandemic. Of those, 142,000 have resolved their forbearance, and 40,000 homeowners have resolved their forbearance and either refinanced or paid their loans in full. Our numbers are in line with the industry and signify good work so far, but there is still more we need to do to assist homeowners. Now, with that, I'll turn it back over to Mike.

Michael Nierenberg, Chairman, CEO and President

Operator, why don't we turn it back over to you and open up the lines for Q&A?

Operator, Operator

Our first question today will come from Kenneth Lee with RBC Capital Markets.

Kenneth Lee, Analyst

Just one on the funded origination volumes, wondering if you could provide a bit more color around what you saw in the quarter. Also, could you share some key factors that are driving the expected origination volumes in the second quarter? Thanks.

Baron Silverstein, President of NewRez

Just keep in mind the context of our funded volumes. There is a lag from locked to closing depending on the channel of origination, which can take between 30 to 60 days or more in certain cases. We have seen a decline in our overall refinance volume as rates have risen. Our refinance numbers are down about 20% to 25%. In April, we noticed a bit of stabilization in what I would call a hopefully more normalized market, depending on the interest rate environment.

Kenneth Lee, Analyst

Very helpful. And just one follow-up if I may, around the call rights. Could you discuss some key factors driving the favorable environment right now?

Michael Nierenberg, Chairman, CEO and President

In the call right business, many factors relate to spread and where assets are trading, quite frankly. When examining the loan markets and the non-agency bond markets, we've been clear that we are not deploying a lot of capital for non-agency mortgage securities as we consider the risk-reward ratio unfavorable. However, regarding the call business and looking at asset pricing and what's happened with forbearance rates, we expect our call business, which has $70 billion to $80 billion in call rights, to remain robust going forward. Those are the primary drivers.

Operator, Operator

And our next question will come from Trevor Cranston with JMP Securities.

Trevor Cranston, Analyst

You mentioned normalization of gain on sale margins a couple of times. I'd like to get more context on that and perhaps where you're seeing margins today versus where they were in the first quarter, or what you would consider a normalized margin for the origination business?

Baron Silverstein, President of NewRez

It really depends on the channel, and we assess each channel under a different framework. I would tell you that in the direct-to-consumer channel, we're seeing margins in the low to mid 300s. For our JV and retail channels, we're seeing margins around the mid 400s. The TPO margins have been somewhat volatile; we've been trading under 100 basis points. Month over month, there's been a notable decline in margins overall within the wholesale channel. That's why focusing on alternative products is crucial, as Michael continues to emphasize our non-QM franchise. For the correspondent side, we are seeing a little more of a flattening of margins, currently around 35 basis points. This really depends on how your splits are and how those attach to the channel overall. There has indeed been a steep overall decline in margins.

Michael Nierenberg, Chairman, CEO and President

One further comment on that. As we move forward, you would expect margins to return to what would be considered normalized, likely akin to 2019 levels, I think for the industry as a whole. When considering where we are now and Baron refers to what he calls the channels, with the combination of Caliber and NewRez in mind and the transition away from retail and refinancing markets, the retail networks prove essential for us. The direct-to-consumer channel is vital to our success, along with our JV channel. This does not mean we are exiting any channel; this is simply to emphasize how the profitability from these three areas tends to be very consistent.

Baron Silverstein, President of NewRez

I believe the channels will perform differently based on the market. Implementing a multi-channel strategy can be beneficial, allowing you to outperform in some channels even if one underperforms.

Trevor Cranston, Analyst

Last quarter, you published a table showing the earnings benefit from rising rates. Notably, there were two significant factors at play: reduced amortization of MSRs and lower income from the origination business. Given that we've seen interest rates rise to the extent illustrated in that chart, are there any changes in your estimates for the overall earnings impact on either the MSR side or the origination side?

Michael Nierenberg, Chairman, CEO and President

We haven't seen the benefits from an amortization standpoint thus far in the first quarter. While we have seen gain on sale margins contract, overall origination profitability is expected to decline as we proceed; this is our present estimate. However, the MSR assets should climb, leading to higher cash flow. Considering that refinancing markets are down 30% or more, it's notable that Baron mentioned we are down 20-25%. However, the broader industry context shows that refinancing activity has declined, leading to higher valuations and returns on MSRs. One aspect where we differ today from a few years ago is that we now possess more agency securities. While rates have increased, the actual value of mortgage assets on the agency side has decreased slightly, impacting our overall book value. However, we anticipate that once amortization decelerates, you'll see a significant lift. We expect amortization to slow by roughly 30% moving forward.

Operator, Operator

And our next question will come from Henry Coffey with Wedbush.

Henry Coffey, Analyst

Continuing with what Trevor was saying - when it comes to monitoring your amortization rates, is it straightforward to track the pull factors monthly and observe agency speeds, or should we consider additional factors?

Michael Nierenberg, Chairman, CEO and President

We've previously communicated our stance on our credit impaired portfolio. We estimate that out of a $515 billion portfolio of MSRs, approximately 30% of that population is eligible for refinancing. We are in a favorable position. The government has introduced new programs aiming to assist those unable to refinance previously. We'll see how this plays out. However, we assess that the impact will not be substantial overall. So, this is part of the analysis. Currently, around 30% of the market is in consideration, and we’ll keep refining our understanding of those rates and mortgage rates. Additionally, with the NewRez team improving their recapture percentages, now reaching the mid-20s compared to being in the teens previously, and given the success of Sanjeev and his team at Caliber achieving recapture percentages above 50%, we are optimistic that amortization will slow down. We anticipate higher evaluations for our MSR portfolios, leading to higher book values and earnings as we progress through 2021.

Henry Coffey, Analyst

In many respects, you are hedging the MSRs with agency securities. Should we see the real contribution driven primarily by amortization, or how should we evaluate this?

Michael Nierenberg, Chairman, CEO and President

It's a combination of both. We carry roughly $14 billion to $15 billion in agency mortgage positions. Much of that involves compliance from a REIT perspective. We've also taken a substantial number of swaps with payers to hedge out our agency book. Consequently, the net effect is we’re effectively short. An increase in rates will lead to elevated MSR values, which in turn will enhance the P&L on our swap book, while simultaneously lowering P&L on our specified book. You observed this dynamic in the first quarter, where swap P&L was up, agency mortgage P&L was down, and then MSR P&L was up as well.

Henry Coffey, Analyst

You haven't shown much enthusiasm regarding investment opportunities lately. It seems the bargains became available back in March, but that hardly mattered at the time. How much of the recently raised capital will be used for new investment opportunities, such as single-family rentals, versus being reserved for the Caliber transaction?

Michael Nierenberg, Chairman, CEO and President

As a group, we've expressed intentions to maintain higher capital levels on our balance sheet consistently. As you pointed out, Henry, we have been clear about our view that current investment opportunities remain scarce and unappealing. Regarding the engine we have in place, especially working with Caliber, we have the capacity to produce significant product. With GSC footprints constricting, we anticipate interesting opportunities ahead. We've already begun noticing these possibilities. While we’re not major players in the Ginnie market, our peers have demonstrated stronger performance in that area. We will remain patient, keeping plenty of capital on hand to seize what we believe will be advantageous opportunities in a higher-rate environment. Furthermore, as for the MSR business, we expect heightened capital requirements will be placed on all mortgage originators moving forward. This will likely lead to the sale of MSRs, presenting the REIT with potential benefits given the higher rates and capital requirements alongside the lower gains on sale. The single-family rental business is still small for us. We're managing around 1,100 homes, much of which is funded. We collaborate with a third-party operator. Currently, we are in 15 markets, with our key markets being Atlanta, Houston, and Florida, along with some developments in Mississippi. The business is currently small, but we will closely monitor home prices. This is not merely about acquiring homes for the sake of it; our initial acquisitions performed well. Presently, our average cap rate on this investment without leverage is around 5.5%, and the financing is favorable. We aim for this to develop into a legitimate business as we progress.

Operator, Operator

And our next question will come from Bose George with KBW.

Bose George, Analyst

I wanted to revisit the gain on sale margins question. Baron, you mentioned the TPO margin is now below 100 basis points. Where did that stand last quarter and at the end of Q4?

Baron Silverstein, President of NewRez

Last quarter, we ended close to 200 basis points, effectively double the current margin. Near the end of the third quarter, we were almost 100 basis points above that, which highlights a consistent drop of about 100 basis points per quarter throughout this period.

Bose George, Analyst

Could I get an update on the book value quarter-to-date? Additionally, regarding the MSR marks, we’ve seen other companies take significant MSR marks. Does the lack of or reduced prepayability for a portion of your portfolio contribute to a more subdued market outlook compared to peers?

Michael Nierenberg, Chairman, CEO and President

To begin with the mark, we expect to see substantial increases in that portfolio moving forward. In March, prepayments were around 18% higher than anticipated, which may be attributable to a date count factor. However, as speeds decrease — which we project will slow by 30% — this will significantly benefit us, promoting higher core earnings as we progress into the future. Accordingly, we will see marks appreciate, which will positively influence our book value. We anticipate core earnings to begin ascending in the third to fourth quarters of 2021.

Nick Santoro, CFO

Bose, from a performance standpoint, book value remains relatively stable since quarter-end. It’s important to factor in the recent share issuance, which will lead to a decrease in book value by roughly $0.15.

Operator, Operator

And our next question will come from Eric Hagen with BTIG.

Eric Hagen, Analyst

I’d like to revisit the MSR and evaluate the valuation framework. If we refer to the MSR value at the end of 2018 as a proxy when speeds were at their lows, the MSR carried a multiple of around 4. Considering how we should view sensitivity going forward and the overall upside noted in your presentation, is it reasonable to anticipate returning to that valuation quickly, or even exceed it, as you now have a more robust recapture framework?

Michael Nierenberg, Chairman, CEO and President

That's a great question. Comparing us to 2018, the product mix on our balance sheet looks very different now. As we look at the first quarter, our gross rate was approximately 2.79, indicative of a newer production MSR today possibly seeing multiple between 4.25 and 4.5. Back in 2018, we had more legacy MSRs at a 4 multiple level. Going forward, as production incorporates more lower-rate mortgages originated in the fourth quarter and the first quarter of respectively 2020 and 2021, these should rise above that 4 multiple. The legacy MSRs will also increase but at a slower pace due to the seasoning. Is a return to that 4 multiple achievable? Absolutely. Do I think that will happen right away? No. Will it unfold over the year? I believe so. Regarding Caliber, we didn't specify volumes last quarter. However, I have spoken with Sanjeev. I would suspect their origination volumes for the year will be similar to those in 2020, about $70 billion to $80 billion. In terms of warehouse financing, I’ll have Baron elaborate further.

Baron Silverstein, President of NewRez

The key takeaway for us is that we secured three-year committed warehouse financing at a cost-effective rate, which is cheaper than our bank alternative. My experience emphasizes the attractiveness and growth potential of our platform. While bank financing is still fundamental, obtaining three-year committed financing will be our clear goal.

Operator, Operator

And our next question will come from Kevin Barker with Piper Sandler.

Kevin Barker, Analyst

You indicated that funded volume is expected to decrease slightly quarter-over-quarter and in the second quarter due to the decline in refinance demand for direct-to-consumer. Are there other channels where you're noticing a dip in volume, given that pull-through adjusted locks were only up 4% from the previous quarter?

Baron Silverstein, President of NewRez

We evaluate each channel based on overall return instead of merely focusing on volume. In our direct-to-consumer business, we're eager to optimize recapture at this time. There remain numerous consumers that are still positioned to save; at today’s rates, we estimate around a million consumers could be in the money. Our JVs will face a decline in refinance activity, which we've already observed; however, this is a purchase business, strengthened through our realtor partnerships across the U.S. It's about how we maximize our ROE through various channels, including wholesale and correspondent. We still believe our correspondent business positively contributes to our franchise, and we will continue to explore opportunities in TPO and non-QM.

Michael Nierenberg, Chairman, CEO and President

Additionally, from a volume perspective, we acknowledge that volumes matter; however, profitability is our priority. If we achieve less volume and increased profitability, that’s where we’ll stand. Regarding spread compression occurring in the correspondent business, historically, that has functioned as a solid MSR creation vehicle for us, especially if we foresee rising rates. Consequently, the volume we pursue there will be monitored both for profit and market direction.

Kevin Barker, Analyst

With several non-bank competitors still expanding capacity and attempting to capture market share amidst declining demand, what gives you assurance that the direct-to-consumer channel can preserve gain on sale margins at 2019 levels under such circumstances?

Michael Nierenberg, Chairman, CEO and President

The rationale behind the Caliber transaction serves multiple purposes — it's an excellent company with a remarkable leadership team and a significant presence referred to as the 'thundering herd.' This purchase market will be crucial for us. Concerning real volumes and actual profit margins, there will likely be considerable efficiencies around technology moving forward. We currently have many initiatives to expedite loan closure processes. To illustrate sheer scale, the mortgage business will continue to thrive. Though the volumes we engage in may decrease, it doesn’t imply the mortgage field will decline — it’s a substantial, multi-trillion dollar market. Thus, while we may see reductions in volumes and P&L, long-term, we’re optimistic about the mortgage landscape and believe that increased capacity will prove beneficial.

Operator, Operator

And our next question will come from Guiliano Bologna with Compass Point.

Guiliano Bologna, Analyst

From a starting point, I’m curious about the Caliber transaction; they reported slightly over $1.4 billion in MSRs towards the end of February, compared to over $1.1 billion as of December 31. Could you clarify if these figures include any recapture assumptions or if they reflect numbers before recapture? Additionally, merging both entities should enhance Caliber’s impressive recapture performance, potentially boosting your recapture rates over time, maybe not immediately, but it could yield substantial upside. By my calculations, this might lead to over $150 million in additional upside for the Caliber portfolio alone, before accounting for any potential benefits to your core portfolio. Does that align with your thought process?

Michael Nierenberg, Chairman, CEO and President

To clarify, the Caliber portfolio, when referencing the $140 billion, reflects figures as of 12/31. The transaction operates as a closed box — upon finalization, we gain all associated assets on the balance sheet. The $140 billion figure does not include a formula for recapture percentages. Assuming Caliber achieves production levels of $75 billion to $85 billion, after accounting for amortization and recapture, this estimate will reflect our MSR portfolio. Integrating both companies will boost our overall earnings due to the uplift we will gain from improved recapture rates. Although I cannot indicate a precise figure, I can affirm our desire to maximize returns for our shareholders through this accretive transaction.

Guiliano Bologna, Analyst

I’m also interested in understanding any potential boost to book value and its relation to increased recapture assumptions, which may push your MSR fair value up. Likewise, how might the Caliber MSRs experience a similar increase?

Michael Nierenberg, Chairman, CEO and President

Currently, we’ve not altered our book value projections due to any anticipated increases from Caliber’s recapture framework. As Nick previously noted, regarding our second-quarter outlook, we anticipate approximately $0.15 dilution due to share issuance, alongside expected core earnings dilution of about $0.03. As Michael highlighted previously, in terms of expected book value, we haven’t incorporated a potential lift from Caliber’s recapture.

Operator, Operator

And our next question will come from Mark DeVries with Barclays.

Mark DeVries, Analyst

You referenced opportunities within non-QM originations. The development of that market has been stagnant since the creation of the QM framework. Can you discuss the factors limiting that market's growth, what changes may bring about larger opportunities, and how significant you think this could be for you? Furthermore, how do the returns from that market compare to QM loan origination?

Michael Nierenberg, Chairman, CEO and President

The industry has long suffered from limited processing capacity, which has hindered non-QM growth. The merger of the two companies equips us with the needed capacity. Additionally, in 2020, the origination landscape was heavily focused on agency production, which further strained resources for processing non-QM loans. With refinancing activity decreasing, a heightened demand for non-QM products — specifically non-government guaranteed products — is likely to become a vital segment of our business. Caliber has experience in this area, and our strategy includes growing prudently. We would aim for $125 million monthly output, although that figure appears low. We intend to leverage our existing infrastructure to capture this business efficiently. From a profitability perspective, it’s a lucrative venture. Our previous asset sales yielded notable prices, averaging 106 to 107, compared to a drop to around 90 during the COVID crisis. Therefore, a considerable price recovery is expected, which will benefit production once we have appropriate capacity and technology to deploy products quickly.

Guiliano Bologna, Analyst

Do you view this as an opportunity to create some credit assets for the REIT to hold?

Michael Nierenberg, Chairman, CEO and President

Absolutely. Reflecting on Sanjeev and his team's consumer banking expertise, we believe we can explore new products for the market through both the Caliber retail network and NewRez. We have a strong sales force capable of facilitating this initiative.

Guiliano Bologna, Analyst

One last question; do you anticipate that bulk MSR acquisitions might reemerge as gain on sale margins compress? What expected returns are you targeting for those acquisitions?

Michael Nierenberg, Chairman, CEO and President

We will be cautious. Following our acquisition, we will maintain substantial production capabilities. Our long-standing target is around 8% unlevered returns; with suitable financing, we could achieve double digits. As always, we must remain prudent, keeping in mind our balance sheet constraints and regulatory requirements. Our approach will involve a balanced strategy, supporting industry trends while preparing to exploit any opportunities related to MSR sales.

Operator, Operator

This will conclude our question-and-answer session. I'd like to turn the conference back over to Michael Nierenberg for any closing remarks.

Michael Nierenberg, Chairman, CEO and President

That's all I have. We appreciate everybody's time this morning on the call and the questions. If you have any follow-up, feel free to reach out. We look forward to delivering excellent results for our shareholders as we progress. Stay well, have a great spring, and I will talk to you soon. Thanks.

Operator, Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.