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US Bancorp
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Welcome to U.S. Bancorp’s Fourth Quarter 2017 Earnings conference call. Following a review of the results by Andy Cecere, President and Chief Executive Officer, and Terry Dolan, U.S. Bancorp’s Vice Chairman and Chief Financial Officer, there will be a formal question and answer session. If you would like to ask a question, please press star, one on your touchtone phone, and press the pound key to withdraw. This call will be recorded and available for replay beginning today at approximately noon Eastern time through Wednesday, January 24 at 12:00 midnight Eastern time.
I will now turn the conference call over to Jenn Thompson of Investor Relations for U.S. Bancorp.
Thank you, Jamie, and good morning to everyone who has joined our call. Andy Cecere, Terry Dolan, and Bill Parker are here with me today to review U.S. Bancorp’s fourth quarter results and to answer your questions. Andy and Terry will be referencing a slide presentation during their prepared remarks. A copy of the slide presentation, as well as our earnings release and supplemental analyst schedules are available on our website at usbank.com.
I would like to remind you that any forward-looking statements made during today’s call are subject to risks and uncertainties. Factors that could materially change our current forward-looking assumptions are described on Page 2 of today’s presentation, in our press release, and in our Form 10-K and subsequent reports on file with the SEC.
I will now turn the call over to Andy.
Thanks Jenn, and good morning everyone, and thank you for joining our call. We have a lot to talk about this morning, and as usual we’ll take your questions at the conclusion of our prepared remarks. I’ll start with Slide 3.
In the fourth quarter, we reported earnings per share of $0.97, which included several notable items amounting to $0.09 per share. Let me take a minute to talk about these notable items.
The tax reform legislation that was passed a few weeks ago is a very positive development that will provide immediate and ongoing benefit to our employees, customers, communities and our shareholders as we invest a portion of our tax savings in each of these important constituencies. As a result of the signing of the legislation, the company recognized a one-time fourth quarter benefit related to the revaluation of our tax-related assets and liabilities of $910 million. In connection with this event, we took the opportunity to make $150 million contribution to our charitable foundation and we accrued $67 million for a special one-time bonus to certain eligible employees. The impact of these two items was approximately $152 million net of tax.
We also recognized an accrual of $608 million for costs associated with legal and regulatory matters and an investigation discussed in previous filings related to our legacy bank secrecy, anti-money laundering compliance program, and a legacy banking relationship between U.S. Bank and a former customer’s business. U.S. Bank has worked diligently over the past several years to improve and strengthen its AML controls, processes and staff, including increasing compliance staff and making significant investments in systems.
U.S. Bank embraces the highest standards of integrity, risk management and compliance, and we remain committed to continually improving our controls and processes across the enterprise to protect all of our stakeholders. The 8-K we filed this morning provides additional information on this topic.
Our earnings per share were $0.88, excluding the notable items. Slide 4 provides highlights of our results. Loan growth was in line with our expectation at 0.8%, credit quality was stable, and our book value increased by 6.9% from a year earlier. We returned 72% of our earnings to shareholders through dividends and share buybacks.
Slide 5 highlights key performance metrics. Our performance, excluding notable items, in the fourth quarter was highlighted by a 13.4% return on average common equity, a 17% return on tangible common equity, and a 1.33% return on average assets. We delivered positive operating leverage on a year-over-year basis in the fourth quarter and our efficiency ratio, excluding notable items, was 55.3%.
Now let me turn the call over to Terry to provide more detail on the quarter as well as forward-looking guidance.
Thanks Andy, and good morning. If you turn to Slide 6, I’ll start with a balance sheet review and follow up with a discussion of fourth quarter earnings trends. My remarks will be referencing results excluding the notable items.
In the fourth quarter, average loans increased by 0.8% on a linked quarter basis and grew 2.6% from a year ago. Commercial loans increased 1.0% sequentially. We continued to gain market share across our commercial lending businesses. Commitment levels increased in the fourth quarter; however; line utilization rates continue at historical low levels and pay down activity remained elevated in the quarter as some borrowers tapped capital markets to fund long-term funding needs. Pay downs also continued to negatively impact our commercial real estate portfolio. We remain prudent in our lending activity in both our construction and commercial mortgage lines, continuing to forego loan opportunities that do not fit our return and risk appetite.
Primarily as a result of the pay down activity and our prudent view in lending in commercial real estate in general at this time, average total commercial real estate loans declined by 1.5% in the fourth quarter, which contributed to a 40 basis point drag to our total average loan growth for the quarter. Retail loan growth of 1.9% was supported by strong growth in installment loans and retail leasing. During the quarter, credit card loans increased 1.4% sequentially, partly reflecting seasonality, and mortgage loans increased 1.0%.
Turning to Slide 7, average total deposits increased 1.2% on a linked quarter basis and 3.0% year-over-year. Compared with the third quarter, non-interest bearing deposits increased slightly and saving deposits grew 1.4%, reflecting growth in consumer and business banking and wealth management and investment services. Our interest-bearing deposit betas continue to perform consistently with past experience. We expect the total interest bearing deposit beta following the most recent rate hike will end up between about 30 to 35%. As future rate hikes occur, we continue to expect our deposit beta will gradually trend toward a 50% level; however, the pace toward that level continues to be somewhat slower than we initially anticipated primarily due to lower than expected betas in our consumer deposits.
On Slide 8, you can see that credit quality was relatively stable compared to the third quarter. Net charge-offs as a percentage of average loans declined one basis point on both a linked quarter basis and year-over-year. Non-performing assets declined by 4.0% on a linked quarter basis and were 25% lower than a year ago.
I will now move onto earnings results. Slide 9 provides highlights of fourth quarter results versus comparable periods. Record fourth quarter net revenue of $5.6 billion was up 0.5% compared with the third quarter and up 3.7% versus the fourth quarter of 2016. On Slide 10, net interest income on a fully taxable equivalent basis was $3.2 billion in the fourth quarter, up modestly compared with the third quarter and up 6.4% year over year. Linked quarter and year-over-year growth were both supported by growth in loans and higher loan yields.
In the fourth quarter, the net interest margin decreased two basis points to 3.08% as expected. Excluding interest recoveries that contributed approximately two basis points to the third quarter margin, the net interest margin would have been unchanged. Slide 11 highlights trends in non-interest income, which increased by 0.8% on a linked quarter basis and 0.4% year-over-year.
On a year-over-year basis, corporate payments systems revenue grew 10.5% and credit and debit card revenue grew 5.4%, both driven by higher sales volumes. Trust and investment management fees increased 7.1% mainly due to favorable market conditions and net asset and account growth. Somewhat offsetting this strong fee performance was a 15.8% decrease in mortgage banking revenue driven by lower refinancing activity which impacted production margins for the industry, as well as slightly lower merchant revenue. In line with our previous guidance, merchant processing revenue declined 1% from a year earlier mainly due to the exiting of certain joint ventures in the second quarter of 2017 and the impact of weather events that occurred late in the third quarter of 2017.
Turning to Slide 12, non-interest expense increased 2.5% compared with the third quarter of 2017. The increase in expenses was primarily due to seasonally higher costs related to investments in tax advantaged projects. On a year-over-year basis, expenses grew by 3.6%, reflecting higher compensation and employee benefits expense mainly related to hiring to support business growth and compliance programs. Regulatory and compliance expense growth has slowed in recent quarters and continues to moderate towards the company’s overall expense rate. It’s worth noting that in the fourth quarter, professional services expense decreased 27% versus a year ago, reflecting fewer consulting services as compliance programs near maturity.
Slide 13 highlights our capital position. At December 31, our common equity Tier 1 capital ratio estimated using the Basel III standardized approach as if fully implemented was 9.1%. This compares to our capital target of 8.5%.
I’ll now provide some forward-looking guidance. Let me start with a discussion of how our earnings will be positively impacted by tax reform on a go-forward basis.
Our effective rate in 2018 is expected to be approximately 16% for federal tax purposes plus 3 to 4% for state taxes, or approximately 9% in total. We expect our taxable equivalent to tax rates to decline to about 21.5%. This compares with our taxable equivalent tax rate, excluding notable items, of about 29.8% in the fourth quarter of 2017. Consistent with our capital management policies, we plan to reinvest approximately 25% of the tax benefit we expect to realize in business growth initiatives, including technology, innovation and business automation, as well as in our employees. Inclusive of these accelerated investments, we expect to deliver positive operating leverage for the full year of 2018.
Now let me shift to first quarter 2018 guidance. We expect net interest income to increase at a mid-single digit pace on a year-over-year basis. Due to the impact of day count, we expect net interest income to be modestly lower on a linked quarter basis as is typically the case in the first quarter. We expect fee income to increase at a low single digit pace on a year-over-year basis. On a linked quarter basis, fee income is typically lower in the first quarter due to seasonally lower credit card and merchant processing sales volumes and seasonally lower deposit service charges. We expect expense growth on a year-over-year basis to be in the mid-single digit range. On a linked quarter basis, non-interest expense is typically seasonally higher in the first quarter due to higher compensation costs reflecting the timing of merit increases, employee benefits, employee incentive programs, and marketing activities. This is somewhat offset by seasonally lower tax credit amortization and professional service costs. We expect non-interest expense to increase slightly on a linked quarter basis. We expect credit quality to remain relatively stable compared to the fourth quarter.
I’ll hand it back to Andy for closing remarks.
Thanks Terry. We are now 10 years past what, in hindsight, was the beginning of a national crisis. By almost any account, the banking industry has re-emerged stronger, safer, and more nimble. Today the economy appears to be on firm footing. The regulatory environment is becoming more supportive of growth and tax reform will arguable promote job growth, consumer spending, and prolong the growth base of this business cycle.
Against this backdrop, U.S. Bank is well positioned to win market share in our lending and fee businesses and deliver improving returns on equity while operating with the same risk discipline that has served us well through many credit environments. The delivery of predictable, industry-leading profitability and returns has been a constant over the years, but recently the pace of improvement in these metrics has been limited by headwinds we have faced, some within our control, some out of our control. However, there is reason to believe that these headwinds are starting to abate.
First, expenses have been higher than we considered normalized primarily due to costs related to addressing our consent order with the OCC. However, the heavy lifting is completed and we expect compliance and regulatory costs to continue to revert towards our overall expense growth trajectory.
Fee headwinds are starting to shift in our favor. Mortgage refinance activity, which has been a headwind for the industry, is declining at a diminishing pace, and home sales continue to strengthen. Strategic decisions and market challenges depressed our merchant processing in revenue in 2017; however, we remain confident that merchant processing revenue will return to a mid-single digit growth trajectory by the third quarter.
While diminishing headwinds are beneficial, what we are most optimistic about is the potential for investments that we have previously made in our businesses, as well as investments we plan to make in the future, to increasingly manifest in the form of improving top line revenue growth and profitability. Our corporate payments services business is firing on all cylinders heading into 2018. For the first time in many years, both the commercial business sector, which is benefiting from higher T&E spend, and the government sector are showing good momentum. In our wealth management and investment services businesses, market share gains are being driven by new client growth. In our traditional banking businesses, we are up-tiering our clients in corporate bank and moving up the lead tables in our capital markets businesses.
On the consumer side, investments over the past several years aimed at enhancing our auto relationships are driving strong market share growth. We are well positioned as one of the few remaining non-captive lessors in the industry and as one of the few financers to offer both a lending and leasing option to our dealers.
It is clear that past investment spending is delivering the intended results, and we expect to reap those benefits for years to come. Now, because of tax reform, we have the opportunity to accelerate our investment spending. We will target additional technology and innovation spending on the initiatives aimed at enhancing the customer experience and leveraging our competitive positioning, with a particular focus on payments, digital and mobile banking, and B2B capabilities. Technology and innovation are core to our long-term strategy for growth, and we’re excited about the opportunity to advance key initiatives that will support both top line revenue and improved operating efficiencies.
To wrap up, I believe that 2018 will prove to be a very good year for U.S. Bank, and by that I mean for the entirety of what makes us U.S. Bank - our employees, our customers, our communities, and of course our shareholders.
That concludes our formal remarks. Terry, Bill and I will now be happy to answer your questions.
[Operator instructions]
Your first question comes from Ken Usdin with Jefferies. Your line is open.
Hi, it’s Amanda Larsen on for Ken.
Hi Amanda.
Did you all say that your effective tax rate is going to be 19%? Can you go over that again?
Yes, it was 19%.
Okay, great. Then the expense outlook, you noted that you’re planning on reinvesting approximately 25% of the benefit, and you noted that there would be an expense growth rate in 1Q18 of mid single digits. Should we expect that for the full year ’18, we’re going to move to the mid-single digit range in lieu of that 3 to 5% you guys had previously discussed?
Yes. When we end up looking at expenses for the full year of 2018, because of the reinvestment that we plan on making, you would expect us to be in that mid-single digits and the high end of that range.
Okay, thanks. Then also, can you touch upon the growth outlook for ’18, particularly in deposit service charges area and treasury management? A couple of your competitors have announced some changes - overdraft, making more customer friendly, and then on treasury management, just if you are moving that earnings credit rate yet. Thank you.
Yes, and thanks for the question. From a fee standpoint, so if you think about deposit service charges, we made a lot of those types of changes a while back, and so I wouldn’t see us making any further changes with respect to our fee structure at this particular point in time. We have seen good growth with respect to deposit service charges, and that is really tied to both deposit balance and just growth in terms of consumer accounts.
In terms of treasury management, treasury management has been a real success story for us this year. We’ve seen good core growth in terms of client relationships throughout the year, and we would continue to expect that that will have a positive impact going into 2018. As deposit rates do rise, though, we would expect that we would be making some adjustment to the earnings credit rate, and that would dampen it a bit.
I’d add, Terry, as we think about treasury management, we think about it in combination with corporate payments because they’re really two parts of the same component, and corporate payments in particular has had a wonderful year - 11% growth, both on the government as well as the corporate side. Our virtual pay product is growing 22%, and as we think about the future, there’s going to be that combination of thinking about treasury management together with corporate payments.
Your next question comes from John Pancari with Evercore ISI. Your line is open.
Good morning.
Morning.
On the merchant processing side, Andy, I know you indicated that you’re confident you can get back to that mid-single digit growth rate by third quarter. What are you seeing that’s giving you that confidence in the rebound?
I’ll ask Terry to add on, but I think the principle reason is two of the impacts this year and this quarter were weather related as well as the exit of the joint ventures that we’ve talked about in the past. The weather related will diminish greatly in the first quarter and going forward, and we lap the exit of the joint ventures starting in the second half of ’18.
Yes, so the impact of those two is about 2.5 to 3%, and again the weather events diminish pretty significantly in the first quarter and then by the end of the second quarter, as Andy said. The other thing we’re seeing is that sales volumes in our merchant acquiring business have been particularly strong. We’re 4%-plus in terms of same store sales, which was good - we saw some nice lift in the fourth quarter, and then our overall sales were about 7.3%, kind of in that ballpark, and that’s because we’re seeing nice growth in terms of new business. We believe that that momentum that we started to create in the merchant acquiring business is going to help us generate that mid single digits by the end of the--by the second half of 2018.
Okay. All right, that’s good. Then on the loan growth side, just wanted to get a little bit more color in terms of what you’re thinking about for 2018. Is it fair to assume still around GDP, GDP plus, so 2 to 3% growth in loans as you look at ’18; and on that front, on commercial real estate, just want to get your updated thoughts on when we could see some stabilization and possibly some growth in that line. Thanks.
Yes, so let me take it first and then I’ll hand it off to Bill. If you think about loan growth, in the near term there is certainly going to be impacts of tax performance. It’s a little bit difficult to forecast, but quite honestly loan growth in the near term is going to be dependent upon the level of pay downs that we see and that sort of activity in the capital markets as corporate customers realign or rebalance their debt structure, the capital structure if you will.
I think your expectation of GDP, kind of in that range or a little plus of that is a good or reasonable estimate as you think about the full year, but in the near term it’s going to be impacted by some of the things that we see in terms of customer behavior.
I’ll pick up on your question on commercial real estate. The commercial mortgage line, which has seen decreases for the last several quarters, I think that’s a function of the interest rate environment. Once we get through this rate increase environment, see more stabilization there, I think we’ll be more able to build that book. On the construction side, we are seeing some positive growth on our residential construction area. We’ve been expanding that into the southeast and we’re hopeful with the tax bill that perhaps multi-family should come back, so we’re looking forward to being aggressive in that area in ’18.
Then John, maybe the last thing I would just add in terms of loan growth is that in the latter half of 2017, and I think with tax reform, we are seeing momentum in terms of consumer spend and consumer activity, and I think that that bodes well with respect to loan growth on the retail side.
Okay, great. Thank you.
Your next question comes from Scott Siefers with Sandler O’Neill. Your line is open.
Morning guys.
Morning Scott.
A quick question just on the mid-single digit expense growth for ’18. Just so I’m clear, can you give maybe the dollar amount off which--for 2017 off which you’re basing the mid-single digit growth expectation?
Yes, I think if you end up looking at our growth rate this year, it was a little bit above 5% on a year-over-year basis, and we expected that to continue to improve excluding the tax reform and some of the reinvestment that we end up making. With that tax reform, that really is kind of what causes us to think we’re going to be at the high end of that range, or in the mid-single digits.
I think, Terry, when we’re talking about the base for that, it is off of the numbers excluding notable items, which I think is about $12.1 billion of expense.
Yes, yes.
Okay, perfect. Yes, that clarifies it. I appreciate it. Then I think you guys said in the prepared remarks that you would expect positive operating leverage excluding the investments. I guess that implies revenue growth somewhere at or below the mid-single digits?
No Scott, we expect positive operating leverage including the investments - including the investments.
Oh, including - okay. All right, good. I appreciate that clarification. Just wanted to make sure I heard it correctly, and I did not, so. That’s it for me, so I appreciate it.
Thank you, Scott.
Your next question comes from Kevin Barker with Piper Jaffray. Your line is open.
Thanks for taking my questions. I just wanted to get a little bit more detail on the innovation spending that you’re making, and when you think about the range of mid-single digit growth rates, can you put some parameters around that?
Our focus is going to be on the things I talked about, which is digital, mobile banking, B2B, brand, continuing our expansion of our customer base and our customer experience, and as well as our employees, and we talked about the increased $15 minimum wage. But those are all the things we’re talking about, and as you think about what we’ve been doing, our success is really dependent on continuing to innovate and continuing to deliver the very best customer experience, so those are the things we’re focused on that, over time, will continue to drive the growth that we’ve been experiencing.
Then Terry, in that mid-single digits, we’re talking around 5% or so in terms of expenses, right?
Yes, that’s right.
Okay, and then in regards to the flow through into 2019, 2020, will you start to return back to your longer term target 3 to 5% expense growth rate, or do you feel like that will continue for the next couple years?
Yes Kevin, maybe let me take that. If you think about incremental investments that you’re making, there’s kind of an arc, and I think about it over kind of a two or three-year time frame, making the investments today and you start to see the revenue benefit in that second half of the second year and then into the third year. So when we think about 2019 and 2020, we have to kind of think about that arc, if you will. I do believe that as you get down to the 2020 time horizon, you’re going to see that incremental revenue that’s going to be impacting the business positively, but the double benefit of that is that with the digital initiatives that we have going on, we also would expect to see efficiencies come from those investments as well, following that sort of time horizon.
And importantly, Terry, as you said, we’re looking at this from both a revenue and an expense perspective, and we’re making the additional investments to grow the revenue, and to simply say that we’re going to manage both sides of that equation, the positive operating leverage in ’18,’19, ’20 and going forward.
Okay, thanks for taking my questions.
Thanks Kevin.
Your next question comes from Matt O’Connor with Deutsche Bank. Your line is open.
Hi, this is actually Ricky from Matt’s team. Sorry if I missed this, but I’m wondering if you could touch a bit on NIM outlook for the year, both with and without additional hikes, and the puts and takes there.
Yes, given all the moving parts, Ricky, I think one of the things we’re going to focus really on is giving guidance with respect to net interest income, so when we think about net interest income going into next year, we would expect growth pretty similar to what we see this year, fee income growth being a little bit stronger. That net interest income growth is going to be driven by our expectations around loan growth and just the rising rate environment.
Got it, and then maybe one follow-up. It looks like securities ticked up a bit this quarter. Wondering if you could talk a bit about that and what the trajectory for the securities book should look like in 2018. Is that going to track overall balance sheet growth, or what’s the thinking there?
Yes, the way that we end up managing our investment portfolio is really from a liquidity management standpoint, and that will track very consistently with the growth in average earning assets.
Okay, thank you.
Your next question comes from Erika Najarian with Bank of America. Your line is open.
Yes, good morning. Thank you for taking my questions.
Hey Erika.
Morning.
Good morning. My first question is just on the regulatory backdrop. It seems like there is bipartisan momentum to pass some amendments to Dodd-Frank, and obviously the Senate version has a dollar threshold of $250 billion. I’m wondering if you could sort of share some feedback - does that simply mean if the new threshold for SIFI is $250 billion that nothing changes for U.S. Bank, or does that put you in a different tier in terms of SIFI rules?
My expectation, Erika, is that we would see limited changes to the U.S. Bank. As a reminder, we’re above $250 billion but we don’t have a SIFI buffer on the capital component. We’re already at the capital levels. We have the processes in place for CCAR and stress testing, so I expect limited change or impact to our company.
Got it. Just as a follow up to Ricky’s question, could you share embedded in your positive operating leverage guidance how many rate hikes you presume for 2018, and also the shape of the curve for 2018?
Yes, so when we’re thinking about 2018, we expect that we’re going to see rate hikes, probably a couple rate hikes, and then one in December, so we’ll see two kind of midyear, and then in terms of the yield curve, we kind of established our plan or our forecast based upon where the yield curve was in that mid-December time frame, and as you know, recently it’s steepened a little bit but I think there’s probably going to be movement up and down in terms of where that yield curve is. There’s going to be pressure, and I think it’s probably going to flatten a bit as rates rise during the year as well.
Got it, thank you.
Thanks Erika.
Our next question comes from David Long with Raymond James. Your line is open.
Morning everyone.
Hey David.
Just wanted to get your thoughts on any potential competing away of any of the tax benefits, whether that happens in 2018 or further on down the road.
Yes, so this is Terry. When you think about tax reform, I think how it ends up getting utilized, we talked about the reinvestment; but the competition in terms of pricing, we obviously live in a pretty dynamic environment. I do think that there is going to be some bleed that will take place because of competitive pricing, but I also expect that that’s going to take place over time and it’s probably going to be a little bit different, depending upon the product and the service and the customer segment that you have. Obviously, we operate in a pretty competitive environment, so ultimately how much gets competed away will be dependent upon that competition.
I would say that if you think about the last 10 years, though, the industry has run at lower return levels because it’s been real difficult to price in things like regulatory costs and the cost of capital and liquidity, and all sorts of things. So I do think that especially for some period of time, the banking industry is going to try to recapture some of that in terms of its returns, and as a result from a competitive standpoint I think that will be a little bit delayed.
Got it, appreciate the color. Thanks.
Again if you would like to ask a question, press star, one on your telephone keypad. Your next question comes from Brian Klock with KBW. Your line is open.
Good morning everyone.
Hi Brian.
I have a question, I guess probably for Bill. Talking about the CRE pay downs, I noticed that there was a tick-up in charge-offs after being in a net recovery position in the CRE book for a while. Can you talk about that? I think the note was related to enclosed malls that were written down, so can you give us a little bit of color on that?
Sure. Well, obviously at this point in the cycle, you eventually run out of the recovery, so we’re pretty much there on the CRE book. On the enclosed malls, we do have a smaller portfolio of what I’d call small market enclosed malls, and I think some of those were more harder hit with this shift to online, so that’s where we saw that. The overall portfolio is about $700 million, but we don’t expect that to continue each quarter. We just had a couple of deals this quarter that we had to deal with.
All right, great. Thanks, that’s helpful. A follow-up question for Andy, I guess - thinking about the legal settlement or the legal accrual that you had in the quarter related to BSA AML, and I know you guys have spent a lot of money and a lot of effort to remediate that, can you give us an update on where you stand, or where you think you stand with that regulatory order?
Yes, that hasn’t changed, Brian. We completed most of the--all of the systems integration and process and build, as well as the people and process at the end of 2017, and we’re now on a sustainability phase of it and we will continue to be in there for the first half of ’18, which is really ensuring that the processes we’ve put in place are acting and performing as expected.
Okay, so it’s possible maybe back half of ’18, you could be looking or being able to pursue bank acquisitions again? Is that reasonable, or is this something we should think about for ’19?
You know, that’s dependent upon the regulator, certainly, but we are doing everything on our end to make sure we’re performing as well as we can. As I said, I think we have all the processes and systems and people in place, now it’s just a matter of going through it and ensuring that they’re working appropriately.
I would also remind you that the M&A activity that we’ve been focused on has been not related to the AML consent order of things, like card portfolios, payments, and trust activities. We’ll continue to look at those items.
Right. Helpful, and thanks for your time.
Thank you, Brian.
There are no further questions at this time. I will turn the call back over to the presenters.
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