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spk00: Hello and welcome to the NMI Holdings, Inc. Third Quarter 2022 Earnings Conference Call. All participants will be in 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 conference over to John Swenson. Please go ahead, John.
spk07: Thank you. Good afternoon, and welcome to the 2022 Third Quarter Conference Call for National MI. I'm John Swenson, Vice President of Investor Relations and Treasury. Joining us on the call today are Brad Schuster, Executive Chairman, Adam Politzer, President and Chief Executive Officer, Ravi Malela, Chief Financial Officer, and Nick RealMuto, our Controller. Financial results for the quarter were released after the close today. The press release may be accessed on NMI's website, located at nationalmi.com under the Investors tab. During the course of this call, we may make comments about our expectations for the future. Actual results could differ materially from those contained in these forward-looking statements. Additional information about the factors that cause actual results or trends to differ materially from those discussed on the call can be found on our website or through our regulatory filings with the SEC. If and to the extent the company makes forward-looking statements, we do not undertake any obligation to update those statements in the future in light of subsequent developments. Further, no one should rely on the fact that the guidance of such statements is current at any time other than the time of this call. Also note that on this call, we refer to certain non-GAAP measures. In today's press release and on our website, we've provided a reconciliation of these measures to the most comparable measures under GAAP. Now I'll turn the call over to Brad.
spk09: Thank you, John, and good afternoon, everyone. We had a terrific third quarter with strong operating performance, significant growth in our insured portfolio, and record financial results. Through the course of today's call, we'll share with you the details behind our numbers and the implications for the periods ahead. I'd like to focus, however, on the macroeconomic environment. I've been in this business for almost 30 years. I have seen a number of economic cycles over that time. And importantly, I've seen how the mortgage insurance industry overall, and National MI specifically, have learned from and been transformed by past experience. We do see a growing set of macro headwinds. However, we do not expect the economy or housing market to deteriorate as they did during the financial crisis. For more than a decade now, underwriting standards have been disciplined and responsible across the mortgage markets. Regulatory guardrails have been enacted and the toolkit to assist borrowers through stress has grown meaningfully. Our existing borrowers have strong credit profiles, significant embedded equity in their homes, and benefit from having locked in record low 30-year fixed rate mortgages with manageable debt service obligations. From the start, we have focused on building National MI in a durable, risk-responsible manner. We've worked hard to establish a comprehensive credit risk management framework, and in doing so, we have built an exceptionally high-quality insured portfolio and have secured comprehensive reinsurance protection for nearly the entirety of our book. I'm confident in our ability to perform across all market cycles, and we expect to continue to invest in our employees, support our customers and their borrowers, and deliver for our shareholders, no matter how the macroeconomic environment develops. With that, let me turn it over to Adam.
spk06: Thank you, Brad, and good afternoon, everyone. National MI continued to outperform in the third quarter, delivering significant new business production strong growth in our high-quality insured portfolio, continued success in the reinsurance market, and record financial results. We generated $17.2 billion of NIW volume and ended the quarter with a record $179.2 billion of high-quality, high-performing insurance in force. We achieved record net income of $76.8 million, or 90 cents per diluted share, and our return on equity was 20.1 percent in the quarter. Overall, we had an exceptionally strong quarter and are optimistic as we progress towards year end. We do, however, continue to see developing risks in the macro environment and have already begun to see an impact in the U.S. housing market. Mortgage rates are at a 20-year high, straining affordability for many prospective buyers and driving existing homeowners to reevaluate planned moves. We see new tension in the negotiation between buyers and sellers across many local markets, and house prices have begun to trend down sequentially from their pandemic peaks. And while the labor market currently stands as a bright spot, and existing homeowners are well positioned with strong credit profiles, record levels of home equity, and sustainable fixed payment obligations at record low mortgage rates, we would expect unemployment to rise, and an increasing number of households to face stress in the event of a recession. While we can't control how the economy or housing market develop, we can control how we're positioned to navigate through a period of stress. And we're confident, as we've taken action and made investments from day one to secure our performance across all cycles. We've prioritized discipline and risk responsibility as we've grown our in-force books. building an exceptionally high-quality insured portfolio. We've led with innovation in the risk transfer markets, securing comprehensive reinsurance coverage on nearly all of the policies we've ever originated. And we've established a strong balance sheet with a conservative investment portfolio, robust liquidity profile, and sizable regulatory capital buffer, all supported by the significant earnings power of our franchise. We've been proactive, doing even more through the year as the risk environment has evolved, and took further steps to bolster our business in the third quarter and months since. We continued to increase policy pricing to reflect the evolving risk environment. We've made additional changes to further manage our mix of new business by risk cohort and geography, and we've secured additional reinsurance protection and strengthened our PMIR's position. In August, we announced that we'd entered into an excess of loss reinsurance agreement covering policies originated during the second quarter. And this week, we entered into an additional XOL treaty, securing layered risk protection on our third quarter NIW production and incremental PMIRs funding capacity. With the completion of both deals, approximately 97% of our insured portfolio is now covered by a comprehensive reinsurance solution. More broadly, we've been encouraged by the discipline that we've seen across the private MI market. Underwriting standards remain rigorous and pricing has hardened in response to emerging risks. This is a time when rate GPS and the broader adoption of rate engines across the mortgage insurance industry proves even more valuable. We have the ability to dynamically set our credit box and define our risk appetite. and the flexibility to make the rate adjustments that we believe are appropriate in real time. Overall, we had a terrific quarter, delivering strong operating performance, significant growth in our insured portfolio, and record financial results. At the same time, we're taking appropriate steps to prepare for a potential downturn and are well positioned to continue to serve our customers and their borrowers, invest in our employees and their success, and deliver through the cycle performance for our shareholders. With that, I'll turn it over to Ravi. Thank you, Adam. We delivered record financial results in the third quarter with strong new business volume, significant growth in our insured portfolio, continued resiliency in our credit performance, and expense efficiency driving record profitability. Net income was a record $76.8 million, or $0.90 per diluted share, and our return on equity was 20.1%. We generated $17.2 billion of NIW in the third quarter, and our primary insurance and force grew to $179.2 billion, up 6% from the end of the second quarter and 25% compared to the third quarter of 2021. Twelve-month persistency in our primary portfolio improved again, reaching 80.1% compared to 76% in the second quarter. We expect persistency will continue to trend higher through the end of the year. Net premiums earned were 118.3 million in the third quarter compared to 120.9 million in the second quarter. We earned 1.8 million from the cancellation of single premium policies in the third quarter. compared to $2.2 million in the second quarter. Net premiums earned in the third quarter reflect a $5.5 million impact from the introduction of the season quota share agreement we announced alongside our second quarter earnings release. As we mentioned at the time, we recapture a significant majority of this top-line cost through a seating commission, which serves to offset our operating expenses. Reported yield for the third quarter, which also reflects the introduction of the new season quota share, was 27.2 basis points, compared to 29.5 basis points in the second quarter. Our core yield, which is calculated excluding the impact of our reinsurance treaties and cancellation earnings, was 35 basis points, unchanged from the second quarter. Investment income was $11.9 million in the third quarter compared to $10.9 million in the second quarter. We saw an acceleration in investment income during the quarter as we deployed new cash flows and reinvested rolling maturities at significantly higher new money rates. Underwriting and operating expenses were $27.1 million in the third quarter compared to $30.7 million in the second quarter. and our expense ratio was a record low of 22.9%. Our credit performance continues to trend in a favorable direction. We had 4,096 defaults in our primary portfolio at September 30th, compared to 4,271 at June 30th, and our default rate declined to 71 basis points at quarter end. Cure activity during the quarter remained strong. And we again released a portion of the reserves we previously established for potential claims outcomes on our early COVID default population, recognizing a $3.4 million net claims benefit in the third quarter. At the same time, we continue to take a conservative stance when setting reserves across our remaining default population in light of the evolving risk environment. Interest expense in the quarter was $8 million. Net income was a record $76.8 million, or $0.90 per diluted share for the quarter, compared to $0.86 per diluted share in the second quarter and $0.69 per diluted share in the third quarter of 2021. Total cash and investments were $2.1 billion at quarter end, including $97 million of cash and investments at the holding company. We have $400 million of outstanding senior notes, and our $250 million revolving credit facility remains undrawn and fully available. Shareholders' equity as of September 30th was $1.5 billion, and book value per share was $18.21. Book value per share, excluding the impact of net unrealized gains and losses in the investment portfolio, was $20.85. up 5% compared to the second quarter, and 19% compared to the third quarter of last year. In the third quarter, we repurchased $21 million of our common stock, retiring 1 million shares at an average price of $20.94. In August, we announced that we had entered into an excess of loss reinsurance agreement, covering policies originated during the second quarter, from a 2.25 percent attachment point up to a 6.65 maximum detachment point at an estimated 5.4 percent weighted average lifetime pre-tax cost. This week, we had entered into an additional XOL treaty securing protection on our third quarter NIW production from a 2.9 percent attachment point up to a 6.9 percent maximum detachment. This most recent transaction carries an estimated 6.5% weighted average lifetime pre-tax cost. Our ability to compress the cycle time between transactions and secure coverage for our most recent quarterly production is particularly valuable as it serves to minimize our warehouse exposure and limit the credit risk retained on our high-quality insured portfolio. during a period of increased macro volatility. At quarter end, we reported total available assets under PMIRs of $2.3 billion and risk-based required assets of $1.2 billion. Excess available assets were $1.1 billion. In summary, we achieved record financial results during the quarter. Our credit performance continues to stand out in a positive way. We continue to execute in the reinsurance market on constructive terms, and we have an exceptionally strong and well-protected balance sheet. With that, let me turn it back to Adam. Thank you, Ravi. Overall, we had a terrific quarter, once again delivering significant new business production, strong growth in our high-quality insured portfolio, and record financial results. Looking forward, We do expect the macro environment will continue to evolve with potential implications for the housing market. We're confident, however, that the disciplined approach we've taken to managing our business from day one will carry our performance through a period of stress. We have a strong customer franchise, a talented team driving us forward every day, an exceptionally high-quality book covered by a comprehensive set of risk transfer solutions, and a robust balance sheet. And we've been proactive, doing even more from a pricing, risk selection, and reinsurance standpoint as the macro environment has evolved. Thank you for joining us today. I'll now ask the operator to come back on so we can take your questions.
spk00: Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. 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 two. At this time, we will pause momentarily to assemble our roster. Today's first question comes from Mark DeVries with Barclays. Please go ahead.
spk08: Yeah, thanks. I was glad to hear that you've been taking up pricing in response to kind of the changing risks. Are you observing your competitors doing the same thing? And also, are you seeing kind of growing disparities in kind of pricing across different buckets? If so, as they kind of layer in maybe different assumptions about how the risks are changing?
spk06: Yeah, Mark, it's a good question. We absolutely are. I'd say broadly speaking, we've been encouraged by the discipline that we're seeing across the market. And what we would characterize as a deliberate approach from the industry broadly around price as the risk environment is shifting. Rates that we observe have been hardening. They've really been laddering higher, we'll call it, as macro volatility has increased. And importantly, within that context, we've been able to achieve incremental price where we believe it's necessary and appropriate And to your second question, absolutely, not all changes either that we make or that we observe more broadly across the industry have been uniform. We continue to make more significant changes for higher risk loans, higher risk geographies that we expect would be more severely impacted by a downturn. At the same time, what I'd say is the pricing changes that we're now seeing are more broad-based in nature, and while they're not uniform, they're spanning far more of the pricing spectrum than we saw in the second quarter.
spk08: Okay, that's really helpful. And then on a separate question, have you had a chance yet to assess the potential impact of these recently announced targeted pricing changes to the enterprise pricing frameworks and what that could mean for your business?
spk06: Yeah. We've thought for a while now that the FHFA and GSEs should review and reform their loan level pricing adjustments. And we view the elimination of upfront fees for lower income borrowers that were announced as a constructive step. Look, it's still early, but in terms of a market impact, some of these are actually fairly significant moves. For some borrowers, it will amount to more than a three-point upfront pricing change. And we expect that that will tilt the line towards GFC execution for many high LTV borrowers. Our best sense at this point is that approximately 15% of current FHA VA volume could migrate to the conforming market following the LTA change.
spk08: Okay, great. Thank you.
spk00: The next question comes from Rick Shane with JP Morgan. Please go ahead.
spk05: Hey, guys, thanks for taking my question. It's a little bit conceptual, but I'm curious when you think about lifetime losses and originations, are you able to, through your underwriting, solve back to your target lifetime cumulative loss targets, or do you have to adjust price?
spk06: Yeah, it's a good question. It really has to be through price. We use underwriting as a tool to pressure test to ensure that the loans that are coming onto our books align with our expectations and our initial view of their risk profile. But the risk profile itself and the anticipated loss cost have to be covered through price. Got it.
spk05: And so in an environment like we're in now, you realize up front if your assumptions are correct that you will incur higher cumulative losses. And so the way you achieve your hurdle rate is by resetting price to get there.
spk06: That's right. Look, for us, it's really about when we're making price changes, we're not looking to take from the market by any stretch. In fact, this is a time where we want to make sure that we're doing everything we can to be balanced to continue to support our customers, and importantly, support borrowers who are facing higher costs day in and day out. What we're really focused on, though, is making sure that we maintain rate adequacy. And rate adequacy for us in this environment and the need to capture incremental price is because our expectation of lost costs grows as the economy develops.
spk05: Adam, that's perfect. And it actually segues into sort of my more macro question. which is in an environment where, again, who knows what's going to happen, but we're all sitting here saying, okay, well, things are as good as they can get. There are reasons to believe the macro environment will deteriorate. We should, to some extent, look at the industry as utility, that you were there and, to some extent, the PMI industry generally has a responsibility to be in the marketplace and the way more broadly, because I'm just trying to think about how the industry expands or contracts and how that would impact originations if collectively the industry became uncomfortable with risks that they didn't feel they could price.
spk06: Yeah, look, I think it's an interesting perspective. First and foremost, what drives our volume as an industry is what's happening on the origination side, right? And in particular, where purchase origination activity goes. And purchase activity is going to slow most likely, right? We've had rates more than double through the course of this year, and with prevailing 30-year note rates sitting north of 7%, it strains affordability for many prospective buyers, and it also causes existing homeowners who had otherwise perhaps planned to move to change course. And so those things will weigh on purchase activity. At the same time, there absolutely is a very large group of individuals who will still purchase a home, who will still need support from us or support from other pockets of the market. At the same time, when we think about, I'll call it the utility aspect, we have a goal, a goal of making sure that we can consistently support our customers and their borrowers through all market cycles. One of the ways that we achieve that is by applying price to ensure rate adequacy. It is also our balance sheet, right? It is our shareholders' balance sheet, and we have a responsibility to them to manage it appropriately through periods of stress. And so that's really what we try to balance as we look at an environment like the one we're in today, where none of us knows exactly where things will land, but we do have an expectation that on balance, things will probably get more challenging from a macro standpoint than better as we roll forward over the next 12 to 18 months.
spk05: Terrific. Hey, Adam, thank you for taking the questions. I really appreciate it. Thanks, Rick.
spk00: The next question comes from Doug Harder with Credit Suisse. Please go ahead.
spk04: Thanks. Can you talk about your, you know, your reserving expectations on kind of new defaults today and how that, you know, compared to kind of the past several quarters?
spk06: Yeah, I mean, you know, this is Ravi. I just say that, you know, with respect to credit and default trends, we're not really seeing anything of note at this point that's different. Look, our cure rates are holding constant. You know, NODs are trending down. We saw our NODs trend down from 4,271 to a little bit less than 4,100 in the quarter. Our default rate declined from 77 basis points to 71 basis points. Our D30s have been flat quarter over quarter. And so as we parse things out and we look for reasons to make major changes, we've been pretty steady and consistent with respect to how credit trends have been evolving. Now look, we continue to monitor and we look at today and we're constantly looking at the story going forward, but right now the story is really strong. And in terms of the, you know, some of the underlying macro assumptions and perspective and general conservatism that we embedded in Q3, we do reassess our reserving assumptions each quarter. And we had shifted in the second quarter to a meaningfully more conservative posture for reserve setting purposes than we had carried in Q1. We've maintained that conservative posture with some incremental adjustments there that further bolstered the reserves we're carrying for remaining NODs as of September 30th.
spk04: Great. And then just on the COVID vintage NODs and the reserving, You know, I guess how much reserve is left now, you know, to the extent that there's still favorable development or, you know, just how should we think about where you are in that process, Sir Danny?
spk06: Yeah, a significant majority of our carried reserves today still relates to loans that went into default that we would identify as a COVID-related default. And so we'll see how that population continues to develop as we roll forward. And maybe just to add there, you know, those early COVID default populations have cured out for the most part. Almost 97, 98% of those defaults have cured out over the course of the last two years.
spk02: Got it. Thank you.
spk00: The next question comes from Bose George with KBW. Please go ahead.
spk03: Hey guys, good afternoon. Just given your comments on price hardening, are there any updated thoughts on the trend in the premium margin?
spk06: Yeah, look, in terms of a view on premium yield, we expect that our core yield is going to be generally stable with perhaps a modest decline. through the end of the year. We'll get some support from improving persistency and some support from the pricing on new business. We expect the trend in our net yield will be a bit more pronounced, which is really due to the introduction of the most recent XOL transaction that we announced today. And we'll see where things develop as we roll into next year. You know, loss performance does, in fact, impact our yield because of the profit commission dynamic under our quota share agreements. And so we'll see where things develop through next year. But through the end of this year, we expect core yield stability and, you know, just some impact from the introduction of our most recent XOL.
spk03: Okay, great. Thanks. And then actually just on persistency, can you talk about, you know, where you think that could get to?
spk06: Look, persistency in Q3 was just a hair over 80%. And the trend has been above 80%. And I think we're coming to our long-term levels. And we expect it to normalize by year end. And Bo's persistency has just been a big positive to us. We really work hard to generate that business, underwrite it, and then put it under reinsurance. And credit performance has been strong. And so lifetime premium revenue increases. And frankly, at the margin, we don't really see additional administrative costs to manage them going forward. So right now, we see, you know, persistency normalizing by year-end and continuing to trend slightly up.
spk03: Okay, great. Thanks.
spk00: The next question comes from Mark Hughes with Truist. Please go ahead.
spk02: Yeah, thank you. Good afternoon.
spk10: I'm not sure whether you gave any detail on this, but anything unusual in the expenses this quarter, and how do we think about the expense ratio on a go-forward basis?
spk06: Yeah, I'll touch on that. Certainly, it's nice to see a record low expense ratio, 22.9% in the quarter, down from 25.4% in Q2. The overwhelming majority of the quarter-over-quarter difference came from the seeding commission that we had from our seasoned QSR, about 3.8 million in the quarter. And I just say that overall, we're very happy where our expense ratio is right now. From a long-term perspective, we've been setting a goal of being somewhere between low and mid-20s, and we're happy to deliver that in Q3. And we're optimistic about looking for opportunities to manage expenses, driving efficiency, and continuing to have that expense ratio continue to trend down over time.
spk10: Correct me if I'm not thinking about this the right way, but how much of the hardening comes from just the uptick in broader interest rates more broadly, which is obviously impacting the cost of your reinsurance and presumably the XOL, versus macro factors, just concerns about the consumer and what happens with default? Can you disaggregate that?
spk06: Yeah, it's a pretty easy one. 100% of it relates to our view of the go-forward economic environment. None of it relates to what's happening on the reinsurance side. You know, reinsurance costs are migrating higher. It's a market where risk-takers need to set their appetite and define their goals also from a risk-adjusted return standpoint, just as we do on the primary side. But most importantly, whenever we price our business, we price on a gross line basis, which is to say we don't factor for reinsurance costs, reinsurance opportunities on the back end. We want to make sure that the rate we're capturing for the risks we're taking in the front door is adequate if we have to maintain that risk and hold it on our balance sheet without the benefit of risk transfer. That's the approach we've always taken. It's the approach we take today. And so all of the rate changes that we're making across the risk spectrum are are driven by our view of the macro, not by what's evolving in the reinsurance market.
spk10: I guess I'm thinking about your cost for the transactions. You mentioned the 5.4%, up to 6.5% for this recent XOL. How much of that is just influenced by broader interest rates? And again, I apologize if that's a bad question.
spk06: No, not a bad question at all. I think the majority of that is driven by the same dynamic that's causing us to raise premium rate on the primary side, right? Our reinsurance partners are looking at the macro environment and the possibility for dislocation to develop in the housing market, and they want incremental rate to account for perhaps a widened view of potential loss outcomes. and that's coming through in the pricing. At the same time, we just achieved coverage at a 6.5% pre-tax lifetime cost of capital. And it's not just the cost that grows. There's also, I would say, the benefit grows as well. As the risk environment evolves, the value of that protection, the potential for it to absorb loss, also increases. And so when we look at it, it doesn't influence how we price on the primary side. But we also aren't changing course, and we still find value as both a risk transfer and a capital efficiency matter from continuing to execute in the reinsurance market. And Adam, I would just add that what we've seen, at least with respect to the reinsurance market, is that capacity has evolved over the course of the year. And so we've seen, as the ILN market experienced some dislocation in the early part of the year, many MI folks pivoted to the XOL market, and a lot of capacity was used up over the course of the year, and that had an influence on where pricing and availability landed.
spk02: Interesting. Thank you very much.
spk00: The next question comes from Jeffrey Dunn with Dowling and Partners. Please go ahead.
spk01: Thanks. Good afternoon. Adam, I wanted to ask, about capital strategy. I believe NMI is still a capital consumer. You're going into a hard market or harder market, yet riskier potential market. And in a world where your capital, you know, you could have delays in XOL or anything like that. Do you have a strategy for pulling back, entering the market? This quarter looks like you gained share. in order to really capitalize on the opportunities that might be presented in the quarters ahead? And then also, how do you balance that with a return on buying stock right now, which is probably approaching the returns on new business? Do you take any money out of the opco over an 18, 24-month outlook, or do you take a more conservative approach and put that money to new business? So how do you think about the overall capital strategy heading into the environment it looks like we're going into?
spk06: Yeah, Jeff, it's a very good question. I'll say we think about all of those things, right? Capital for us is key, and that's true candidly at all times. Today, certainly against an evolving macro backdrop, but equally so last year, for example, when the environment was much stronger. Our general philosophy about how we want to manage our balance sheet doesn't change. We generally take a conservative stance. We want to make sure that we're prudently managing our needs, We're working hard to build access across as many markets as possible, and we want to minimize our cost of capital wherever possible. We are in a terrific position today as a balance sheet and funding matter, and we've been really pleased with the success of our repurchase activity since we launched the program earlier this year. As we look forward, Now is the time, I think, it should be expected where we would say an additional amount of excess capital, carrying an additional amount of excess capital is valuable given the macro environment. And so we're going to be balanced, right, in how we make all of those decisions, how we think about the return on potential capital deployment either organically or through distributions, and how we think about the pacing of that activity as we roll forward. A lot of it's going to depend on how everything develops from where we are today. We know what our balance sheet looks like today. We know the size of our funding profile today. We can run calculations and stress tests, but we're all gonna have a lot more information that emerges over the next few quarters, we believe, as to really where the market, the macro, and housing are going, and that will influence our decisioning.
spk01: Okay, and then a follow-up on credit. It's a challenging environment because you're facing seasoning pressure on your new notices, whether or not we see any kind of recessionary pressure. But you also still have a lot of home price built into the existing book of business, not necessarily the more recent stuff, but, you know, the past book. So how do you think about or how can you frame for us how to think about an economic impact on the existing book? You know, do we worry about six percent unemployment with where the built up equity is in the portfolio? Or are we in a scenario where we need something much more severe to really move the number on ultimate claim experience because of how the back book looks?
spk06: Yeah, a very good question. Look, we estimate today that the mark-to-market LTV on our insured portfolio is a touch under 75%. And so the borrowers that we've insured to date have, generally speaking, an exceptionally strong position with a significant amount of equity buffer that sits in front of our exposure. And so a move in unemployment in isolation is something we monitor, right? We would expect that if the labor market were to deteriorate, an increasing number of households would face stress. The consequences of that stress, though, for our credit performance, our claims experience, also need to account for where house prices go. And so if house prices hold and that equity position remains robust, then we may see an increase in default experience that doesn't necessarily translate through to ultimate claims outcomes. If house prices deteriorate alongside a rise in unemployment, we would expect to see an increased impact from a claim standpoint.
spk01: But as the book stands now, does 6% unemployment worry you?
spk06: I mean, yes, we're at 3.5% today, so it's nearly doubling of the unemployment rate nationally. We run a lot of stress tests, though, and does a 6% unemployment rate in isolation have a material impact on our expected performance and where we go? No.
spk01: Okay, thanks.
spk00: This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.
spk06: Thank you again for joining us. We'll be hosting our annual Investor Day on Thursday, November 17th in New York, and we'll be participating in the Goldman Sachs Financial Services Conference on December 7th. We look forward to speaking with you again soon.
spk00: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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