Q4 2024 The Bank of N.T. Butterfield & Son Ltd Earnings Call
Good morning. My name is Michael and I will be your conference operator today. At this time, I would like to welcome everyone to the fourth quarter and full year 2024 earnings call for the Bank of N.T. Butterfield and Sun Ltd.
At this time, all participants will be in a listen-only mode.
Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
After today's presentation, there will be an opportunity to ask questions.
To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the call over to Noah Fields, Butterfield's Head of Investor Relations.
Noah Fields: Thank you. Good morning, everyone, and thank you for joining us. Today we will be reviewing Butterfield's fourth quarter and full year 2024 financial results.
Speaker Change: On the call, I'm joined by Michael Collins, Butterfield's Chairman and Chief Executive Officer, Craig Bridgewater, Group Chief Financial Officer, and Michael Schrum, President and Group Chief Risk Officer.
Speaker Change: Following their prepared remarks, we will open the call for a question and answer session.
Speaker Change: Yesterday afternoon we issued a press release announcing our fourth quarter and full year 2024 results. The press release along with a slide presentation that we will refer to during our remarks on this call are available on the investor relations section of our website at www.butterfieldgroup.com
Speaker Change: Before I turn the call over to Michael Collins, I would like to remind everyone that today's discussions will refer to certain non-GAAP measures, which we believe are important in evaluating the company's performance.
Speaker Change: For reconciliation of these measures to U.S. GAAP, please refer to the earnings press release and slide presentation.
Speaker Change: Today's call and associated materials may also contain certain forward-looking statements which are subject to risks, uncertainties, and other factors that may call its actual results different materially from those contemplated by these statements.
Speaker Change: Additional information regarding these risks can be found in our SEC filings. I will now turn the call over to Michael Collins.
Michael Collins: Thank you, Noah, and thanks to everyone joining the call today. Butterfield had strong financial and operating performance in 2024 as we improved our customer propositions and increased shareholder value through our diversified fee income, low risk density balance sheet, and effective capital management.
Michael Collins: We finished the year with excellent fourth quarter results that were supported by higher non-interest income, lower funding costs, and a stable net interest margin.
Michael Collins: Butterfield benefits from its long-standing market-leading banking businesses in Bermuda and the Cayman Islands with a growing retail banking presence in the Channel Islands.
Michael Collins: Our comprehensive wealth management offerings include trust services, private banking, asset management, and custody in Bermuda, the Cayman Islands, and the Channel Islands.
Michael Collins: The bank also provides specialized financial services in the Bahamas, Switzerland, Singapore and the UK, where we cater to high net worth clients with mortgages on properties in prime central London.
Michael Collins: I will now turn to the full year highlights on page 5.
Speaker Change: Barfield's strong performance in 2024 produced net income of 216.3 million dollars and core net income of 218.9 million dollars.
Speaker Change: This resulted in a core return on average tangible common equity of 24% for 2024.
Speaker Change: During the year, net interest margin decreased to 2.64% from 2.80% in 2023, with the cost of deposits rising to 183 basis points from 140 basis points in 2023.
Speaker Change: However, on a quarterly basis, we have recently seen net interest margins stabilize as market rates and deposit costs decrease.
Speaker Change: Tangible book value for Common Share grew, increasing 12.5 percent to end the year at $21.70.
Speaker Change: Active capital management remains a priority with total quarterly cash dividends declared representing 37% of earnings for the year in addition to the repurchase of approximately 4.5 million shares at a total value of 155.3 million dollars.
Speaker Change: On December 9th, the board approved a new share repurchase authorization for 2025 of up to 2.7 million common shares.
Speaker Change: Romita and Cayman have experienced improved visitor numbers as travelers continue to see both locations as premier destinations.
Speaker Change: Bermuda's tourism high season finished in October and will recommence in May while Cayman is busiest during the winter and spring months.
in addition, international financial services business.
primarily reinsurance in Bermuda and asset management in Cayman.
Speaker Change: continue to grow in 2024 as measured by incorporations, jobs created, and assets under management.
Speaker Change: Tourism and international financial services continue to drive economic development for both jurisdictions, and we expect growth to continue in 2025 and beyond.
Craig Bridgewater: I will now turn the call over to Craig for details on the fourth quarter.
Thank you, Michael, and good morning, everyone.
Craig Bridgewater: I will begin with the fourth quarter highlights on page six.
Craig Bridgewater: Butterfield reported strong financial results in the fourth quarter of 2024 with net income and core net income of fifty nine point six million dollars
Craig Bridgewater: We achieved core earnings per share of $1.34 with a core return on average tangible common equity of 25.2% for the fourth quarter of 2024, an increase of 270 basis points over the third quarter.
Craig Bridgewater: Net interest margin was 2.61%, stable from the prior quarter, driven primarily by a decrease in the cost of deposits, which dropped to 173 basis points from 191 basis points in the prior quarter.
Craig Bridgewater: and an increase in the yield on investments from 2.39% from 2.51%.
Craig Bridgewater: Deposit costs decreased across all of our banking jurisdictions as fixed-term deposits rolled into lower rates.
Craig Bridgewater: The board has again approved a quarterly cash dividend of 44 cents per share whilst we continue to repurchase shares during the quarter with buybacks totaling 1.3 million shares at an average price of 37.42 cents per share.
Craig Bridgewater: On slide seven here we provide a summary of net interest income and net interest margin.
Craig Bridgewater: In the fourth quarter, we reported net interest income before provision for credit losses of $88.6 million, an increase over the $88.1 million in the prior quarter.
Craig Bridgewater: Lower deposit costs, high investment yields, and increased interest earning assets benefited net interest income this quarter, which was partially offset by the impact of lower loan and treasury rates following central bank rate cuts.
Craig Bridgewater: Average interest earning assets in the fourth quarter of 13.5 billion dollars was up compared to the previous quarter driven by higher deposit volumes.
Craig Bridgewater: Investment volumes expanded by 218.1 million dollars or 4.2 percent to 5.5 billion dollars as excess liquidity in the form of cash and short-term securities and maturities and paydowns were deployed into medium-term U.S. Treasury and agency MBS securities.
Craig Bridgewater: Average loan balances saw a slight increase overall due to growth in the Channel Islands and UK segments.
Craig Bridgewater: which was partially offset by the impact of mortgage amortization outpacing new originations in Bermuda and the Cayman Islands.
Craig Bridgewater: The yield on interest-earning assets decreased 17 basis points to 4.28% from 4.45% in the prior quarter due to lower yields on cash and short-term securities as well as loans.
Craig Bridgewater: The yield on treasury assets during the quarter was 4.25% versus 4.66% in the prior quarter, and the yield on loan balances was 6.43% versus 6.22% in Q3.
Craig Bridgewater: The investment portfolio yielded 2.51% in the quarter, which was 12 business points higher than the prior quarter.
Craig Bridgewater: Slide 8 provides a summary of non-interest income, which totaled $63.2 million for Q4, up 12.9% versus the prior quarter due to the expected fourth quarter seasonal increases in card services, incentive revenues, and transaction volumes.
Craig Bridgewater: Higher foreign exchange volumes as well as the strength of the tourism activity in the Cayman Islands.
Craig Bridgewater: Banker fee income also benefited from receipt of increased cross-border card volume incentives.
Craig Bridgewater: Non-interest income continues to be a stable and capital-efficient source of revenue, with a fee-income ratio of 41.7% for the quarter.
Craig Bridgewater: Excluding seasonal factors, we would expect non-interest income to stabilize around the mid-50s, million dollars per quarter.
On slide nine, we present core non-interest expenses.
Craig Bridgewater: Total core non-interest expenses were $19.6 million, a 2.2% increase compared to $88.6 million in the prior quarter.
Craig Bridgewater: The higher core non-interest expense are primarily attributable to increased marketing expenditures related to events and sponsorships for credit card products and professional and outside services costs.
Craig Bridgewater: Looking into 2025, we expect expenses to be slightly elevated versus last year due to inflationary pressures on salaries and the continued investment and support for technological systems and specialist roles.
Craig Bridgewater: We expect to continue to position appropriate non-client facing staff in lower cost service centers.
Craig Bridgewater: Technology expenses are now accelerated as cloud IT solutions now amortize typically over short of five-year license terms.
Craig Bridgewater: Overall, we expect quarterly core expenses to run rate of between $90 million to $92 million in 2025.
Craig Bridgewater: I will now turn the call over to Michael Schrum to review the balance sheet.
Michael Schrum: Thank you, Craig. On slide 10, it shows that Butterfield's balance sheet remains liquid and conservatively managed.
Michael Schrum: Period end deposit balance is held steady at 12.7 billion dollars versus the prior quarter.
Michael Schrum: We continue to see elevated period end balances, and the average deposit balance of $12.5 billion versus $12.4 billion in the prior quarter demonstrates this.
Michael Schrum: We continue to hold some deposits marked to flow out over the coming quarters and as a result, the expectation continues to be for the average deposits to settle into a range of around $11.5 billion to $12 billion.
Michael Schrum: Butterfield's low risk density of 32% continues to reflect the regulatory capital efficiency of the balance sheet.
Michael Schrum: with the lower risk rated residential mortgage loan portfolio, which now represents 68% of our total loan assets.
Michael Schrum: On slide 11, we show that Butterfield continues to have strong asset quality with low credit risk in the investment portfolio, which is comprised of 99% AA rated U.S. government guaranteed agency securities.
Michael Schrum: Credit quality in the loan book improved and remained strong with non-accrual of 1.7% of gross loans. We also continue to see a low charge-off ratio of four basis points.
Michael Schrum: On slide 12, we present the average cash and securities balances with a summary interest rate sensitivity analysis.
Michael Schrum: Passive sensitivity remains modest and unrealized losses in the AFS portfolio included in the OCI
Michael Schrum: increased during the quarter to $163.3 million, up from $117.1 million at the end of the third quarter, but consistent with the $163.9 million as at the end of the fourth quarter of 2023.
Michael Schrum: We continue to estimate OCI burndown of 25% over the coming 12 months and 45% over the coming 24 months.
Slide 13 summarizes regulatory and leverage capital levels.
Butterfield's capital levels continue to be conservatively above regulatory requirements.
Michael Schrum: We also expect to transition to the updated Basel IV capital guidance in 2025 for the group, which will likely improve capital adequacy ratios further due principally to the low loan-to-value ratios in our residential mortgage book.
I will now turn the call back to Michael Collins.
Thank you, Michael.
Speaker Change: I'm very pleased with Butterfield's performance throughout 2024. We have continued to position the bank for success with a secure and conservatively managed balance sheet, a strong culture around operating efficiency.
Thank you very much.
Speaker Change: Our efforts to find the right deal are ongoing. We continue our focus on growing organically where possible, given market share opportunities in the Channel Islands retail banking business and the continued build-out of the Singapore trust business, as well as continued market growth in the Cayman Islands.
Speaker Change: In 2025, we continue to pursue sustainable growth and remain well-positioned to benefit from the anticipated higher-for-longer interest rate environment.
Speaker Change: We are closely managing expenses with continued emphasis on our Canadian Service Centre, in addition to our sustained focus on improving operational efficiency and returning excess capital to shareholders.
Speaker Change: I would also like to thank all of our customers and colleagues for their continued support which has led to a successful 2024. And with that, we would be happy to take your questions. Operator?
Speaker Change: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster.
Speaker Change: The first question comes from David Feaster with Raymond James. Please go ahead.
Alright, good morning everybody.
Morning, David. Morning, David.
Speaker Change: Maybe just start on the deposit side. You guys have done a great job. You know, we've been expecting some of these transitional deposits to flow out, but that doesn't seem like it's been occurring. And, you know, exclusive of currency, I mean, you continue to grow deposits. I mean, could you just talk about what you're seeing on the deposit front?
Speaker Change: and maybe the timeline that you are expecting to get back to that 11 and a half and the 12 billion asset or deposit range. And then just any commentary on the deposit cost side. You guys have done a great job. So just wanted a broad question on deposits.
Yeah, David, thanks. It's Michael Schrum, so I'll kick off.
Speaker Change: I mean, it's really a BAU kind of story here. Obviously, we're subject a little bit to exchange fluctuations. We've seen a strengthening dollar during the fourth quarter, and so I think we put that in our appendix as well.
Speaker Change: In terms of the sort of temporary deposits or what we call contractual funding, really, is, you know, a couple of clients.
Speaker Change: and then we have one in Bermuda, a couple hundred million dollars of sort of liquidation money that's been sitting around pending the court's direction and then that will be distributed sometime probably in the first first half of this year.
I mean, the overall deposit level have remained elevated.
Speaker Change: I would say even more recently, we've seen that much closer to the 12 level, so we continue to expect that range, obviously, at stable FX rates, which can also impact, but that gives you a little bit of a flavor for it. But it's really a BAU story. It's just these...
Speaker Change: 23 weren't a bad thing so I think it's a little less concentrated and we feel like it's stickier but yeah I think we still feel like 12 is about the right number.
Okay.
media.
Speaker Change: I'm just going to say, David, a good reference point also is looking at the average deposits during the quarter as well. So we do see quite a bit of fluctuation, again, kind of normal business flows during the quarter. At the period end, it was kind of – it was back to similar levels that it was in Q3.
Speaker Change: but if you look at the average deposit levels, it's very similar quarter to quarter, which kind of tells more of the story in regards to deposit levels and also some seasonal.
Okay.
Speaker Change: I was hoping you could maybe touch on the margin trajectory. Obviously, there's some pretty material repricing tailwind in the securities book. You guys got some opportunity to deploy some excess equity. You did that a bit in the quarter. Some opportunity to further reduce deposit costs for some of those more floating rate deposits. I'm just curious.
Speaker Change: You know, the levers you're pulling to help defend the margin and drive expansion. How do you think about the margin trajectory going forward? You've done a great job, you know, keeping it stable, you know, in spite of the asset sensitivity. So, just wanted to get a sense of what you're thinking.
Speaker Change: Yeah, David, I guess if we consider again kind of the existing interest rate environment, so kind of assuming rates are where they are now,
Speaker Change: We would expect to, over the next couple of quarters, start to see kind of a slow expansion of NIM.
Speaker Change: As you've seen during the quarter, we've been able to kind of get the cost of deposits kind of down. And that's really through active management in each jurisdiction, looking at deposit rates, we've benefited from the changes in base rates.
Speaker Change: in the UK as well as in the US as well. So that's been some benefit.
Speaker Change: And as you said, you know, we'll continue to deploy paydowns and maturities as well as excess liquidity into the investment portfolio. And we're investing at rates that are kind of, you know, around 480 to 500 basis points.
Speaker Change: which is a significant pickup from the existing kind of portfolio yield, so we're at $250,000-$251,000 now.
Speaker Change: And if you continue on, you know, just kind of, again, in the BAU way, just kind of laddering back into the portfolio at higher rates.
Speaker Change: Assuming that rates stay stable and the 10-year has been pretty stable over the last two quarters, we seem to stay elevated, and that's going to be to our benefit.
Speaker Change: Assuming that, again, we stay where they are, we can continue to control the cost of deposits, let it back into the portfolio, then I think we will start to see some slow expansion over the next couple of quarters.
Terrific.
Speaker Change: Terrific. And then I just wanted to touch on capital priorities. Obviously, you guys have been really active with the buyback. You've got the new program you just announced.
Speaker Change: We've got a nice pop in the stock, some catch up I think in the share price. How price sensitive are you on the buybacks and then just on M&A conversations, you know, how are those going coming out of the analyst day that we had and you know with maybe some
Speaker Change: increased appetite and willingness to compete on pricing to some degree. Just kind of curious how those M&A conversations are going.
Speaker Change: Thanks, David. It's Michael Schrum. So, I mean, a couple of priorities are still, number one, obviously retaining the dividend rate that we have today and keeping that secure. And then over time, we can hopefully find the right deal that will expand our fee income and provide sort of a base level of earnings that would
Thank you very much.
and then, you know,
Speaker Change: Secondly, obviously, we are a domestically, systemically important bank, both in Cayman and Bermuda, so we need to make sure that we're able to
any deal that we've looked at so far.
Speaker Change: So, you know, but we're not sort of hoarding capital for an imminent deal. And then, fourthly, the buyback and the way we think about that is your normal regression, obviously.
Speaker Change: We've been trading below two times PERC and a pretty modest P-E ratio, so we feel pretty good. It's a risk-free trade for us. But we do look at earn-back, obviously, and TBD dilution as part of that equation as well.
Speaker Change: So that's really how the capital priorities is kind of stacking up.
Perfect. Thanks everybody. Great quarter.
Thanks, everybody.
Speaker Change: The next question comes from Timur Braziller with Wells Fargo. Please go ahead.
Hi, good morning.
All right, you're on.
Speaker Change: Maybe just following up on that line of questioning around the capital basis, the buyback announced for $25,000,
Speaker Change: a higher likelihood or greater possibility of maybe, you know, an M&A transaction hitting in 25. Are those two related or maybe just talk through why the buyback authorization was ratcheted down at 25, if not?
Speaker Change: Yeah, hi Timo, it's Michael Schrum again. So I would just say we've just had our board meetings. The board is extremely supportive of the current capital strategy that we're deploying and we have obviously, as always, very good conversations about
Speaker Change: You shouldn't correlate that to other uses of capital, the board is very supportive. If we don't find a deal to...
Speaker Change: and these squared sums, you know, from that regression line to kind of come up with something reasonable. And obviously, if we start trading, you know, at a higher level, then we would expect to kind of pare that back a little bit, and that's...
Yeah, I think Michael's right in terms of the board.
Speaker Change: support for returning excess capital. We're completely focused on getting it back to shareholders and, you know, if we need to do a new authorization mid-year or later in the year, we'll do the same thing we did in the last year. So, as Michael said, it doesn't really mean anything at this point. But we will, you know, if we do have, you know, good M&A discussions, and we are.
Speaker Change: in dialogue with a lot of different parties. If we see something that starts to become likely, we would start to pare it back, but that's not the case right now.
Got it.
Okay, and then...
Speaker Change: I think the highlight of 24 was just your ability to defend the top line given the asset sensitive balance sheet. I'm just wondering as we go into 25...
Speaker Change: I'm just looking at net interest income, does that follow suit with margin? Were you getting a little bit of stability and maybe some expansion as the year goes on?
Speaker Change: or the fact that maybe the balance sheet is still a little bit bloated from some of these...
Speaker Change: deposits that might migrate away. There could be some interim pressure on the top line. How are you guys thinking about NII versus NIM here?
Speaker Change: Yeah, so I think in, well actually in quarter four, we were the beneficiaries of not any changes in yield as I talked about earlier.
Speaker Change: But as you said, the continued volume of the balance sheet, the size of the balance sheet as well, which is a bit inflated. So again, we're expecting some outflows and deposits, which is going to obviously fund the assets and what we have to invest.
Speaker Change: and get yield on. So if the deposits do settle around $12 billion as we expect them to, you know, that would have some downward pressure on net interest income as well. So
Speaker Change: Yeah, to your point, we have benefited from kind of both kind of changes in yield on the assets or the investable assets that we do have, as well as the kind of elevated volume or size of the balance sheet.
Speaker Change: And Timo, I would just add, sorry, it's Michael Schrum, just as you've seen the quarter over quarter, NI obviously, you know, is suffering a little bit from the front end of the curve, but, you know, generally speaking, we haven't seen too much movement or pull through to the long end.
Speaker Change: So that's still benefiting from asset repricing. But the short end, obviously, the short term treasuries is going to be a bit of a headwind for NII.
Speaker Change: Okay, and then just last for me if you could just remind me what the remaining impact is for the Bermuda Resi book from the rate cuts is that fully baked into the those yields and hours There's still some pull through that's going to hit in the first quarter
Speaker Change: Yeah, so in the first quarter we would expect the impact of that, so we last kind of adjusted the permitted base rate in September, when we fed
Speaker Change: Adjusted rate for the event. We decreased our base rate by 25 basis points and as you know that's got a 90-day lag on it so we would actually see that putting through in this quarter.
Speaker Change: And obviously on the UK book, even though we have a significant amount of fixed rate loans on the books, which wouldn't be expected to move as part of this, but you've just seen the Bank of England reducing rates, which is our reference rate for the UK loan book.
Great. Thanks for the call, Eric.
Thanks.
Speaker Change: Again, if you have a question, please press star, then 1.
Speaker Change: Our next question comes from Tim Switzer with KBW. Please go ahead.
Hey, good morning guys. Thank you for taking my question.
Morning, Tim.
Speaker Change: My first question is on the expense trajectory with your guide of 90 to 92 million dollars quarterly expenses. Does it kind of move up to the higher end of the range over the course of year and you know maybe like above that in the back half of the year? Do you expect to be in that range every quarter?
Speaker Change: The expectation is that we'll be in that range every quarter.
as was said in the formal comments.
Speaker Change: We are facing inflationary pressures when it comes to salaries. We are very focused on continued expense management, I guess where we can move non-client facing roles. We'll do that to our service center in Halifax. But I guess...
Speaker Change: against that is also looking out and looking for specialist roles in technology and you know risk management etc that we think is important for the business to manage our risk and the kind of measure our client offering.
and, you know, as you can imagine, there's...
Speaker Change: So we're very focused on having the right people in the right places, and kind of, you know, where necessary, you know, we're going to have to incur additional expense because of inflation as well as specialist roles to make sure that we're attracting, you know, good talent that's beneficial to the bank.
Speaker Change: Yeah, I would just add to that, we are continuing to assess the focus of the United Nations Committee on Human Rights.
Speaker Change: and updated functionality for our customers, as well as a new ATM estate for people to be able to access their cash and some various other enhancements that we'll be rolling out on the new platform.
Speaker Change: So I think that should be good from a client experience point of view. Yeah, so we think that range is right. I mean, we are looking at some tactical...
Speaker Change: reductions in the short term but the bigger bang for the buck is the movement of roles to Halifax and we're up to about 250 positions in Halifax it's been a very successful service center for us but it does take time to
Speaker Change: reorganize how we we process things and and then move the function to Halifax. So over time that will continue to keep expenses you know with a lid but it takes some time.
Speaker Change: Okay, got it. Thank you. And I have a similar question on the non-interest income guide that you guys gave for the mid $50 million range. That kind of implies for the full year, you know, stable to slightly lower fee income year to year. Is that kind of a guide more for the first three quarters than you're above that Q4? How should we think about that?
Yeah, so, as...
Speaker Change: And as was again was said in the comments, that's really around seasonal factors. So, you know, Christmas shopping, et cetera, is a higher credit card volume, kind of volume incentives, kind of being crystallized, et cetera. But on a kind of quarter to quarter basis, we think around 55 is the right number.
We don't...
Speaker Change: anticipate significant increases in fee income. We kind of normally plan, you know, around kind of rates of inflation on fee income, so around 2%.
Speaker Change: We already have, last year we had baked in the additional revenue from Credit Credit Suisse assets that we acquired. So that's kind of now, you know, kind of BAU level. So that kind of came through over the last two years as we.
Speaker Change: and the revenue coming through. So we think that line item is pretty much stable at this point at that level.
Speaker Change: Channel Islands, and then any update you have on that Legacy Hospitality Facility. I believe that was...
There's a sail that's about to go astray.
Speaker Change: Yeah, thanks, Tim. It's Michael Schrum. Great question. The, you know, slightly lower...
Speaker Change: was that had gone over the 90 days and so that was a satisfactory outcome they they actually sold the property and paid us back so that's how it should work
Speaker Change: So we, as I think I mentioned last couple of quarters, we're sort of half...
Speaker Change: The London market kind of freezing up before the election, and then there was a number of new rules announced, or changes to rules in the UK, so that created quite a lot of...
Speaker Change: Money on the side even though it's a stored wealth market And we've seen that sort of starting to pick up now with some Hallmark transactions You know just closer closer to year-end
Speaker Change: So I think that's a good sign for the underlying valuations that we have on the book there.
Speaker Change: And in terms of the Bermuda Legacy Hospitality, which is going through a liquidation process, we had originally anticipated that would resolve either in Q4 or into Q1. It's on track to get resolved.
Speaker Change: you know, then the liquidators have to go through that process before we can distribute proceeds etc. But we're hoping to close that certainly here in the first quarter. So that should be a very positive story as well for
Speaker Change: for that, and then we have a couple of other sort of commercial loans that are in various stages of getting resolution. So, but we're highly focused on ensuring that our credit metrics are pristine and will continue to to work hard at that.
Great. Thank you. Appreciate all the colors. Thanks.
Speaker Change: This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.
Speaker Change: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.