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spk01: Welcome, everyone, to the Ocean First Corp Earnings Conference Call. My name is Victoria, and I'll be coordinating your call today. If you would like to ask a question during the presentation, you may do so by pressing star 1 on your telephone keypads. I will now hand over to your host, Jill Hewitt, from Ocean First, to begin.
spk00: Jill, please go ahead. Thank you, Victoria. Good morning, all, and thank you for joining us. I'm Jill Hewitt, Senior Vice President and Investor Relations Officer at Ocean First Financial Corp. We will begin this morning's call with our forward-looking statement disclosure. Please remember that many of our remarks today contain forward-looking statements based on current expectations. Refer to our press release and other public filings, including the risk factors in our 10-K, where you will find factors that could cause actual results to differ materially from these forward-looking statements. Thank you, and now I will turn the call over to our host, Chairman and Chief Executive Officer Christopher Marr. Christopher Marr Thank you, Jill.
spk10: good morning to all been able to join our third quarter 2021 earnings conference call today this morning i'm joined by our president joe labelle and chief financial officer mike fitzpatrick as always we appreciate your interest in our performance and are pleased to be able to discuss our operating results with you this morning we'll cover our financial and operating performance for the quarter and provide some color regarding the outlook for our business please note that our earnings release was accompanied by an investor presentation that is available on the company's website. We may refer to these slides during the call. After our discussion, we look forward to taking your questions. In terms of financial results for the third quarter, GAAP-diluted earnings per share were 39 cents. Earnings reflect a continuing economic recovery with the bank demonstrating material loan growth, a pickup in net interest income, and a committed loan pipeline that indicates that our commercial banking expansion continues to gain traction. Credit quality improved again, with the company posting exceptional non-performing asset and delinquency figures, which drove a $3.2 million negative provision for the quarter. Core earnings were somewhat stronger than gap earnings at 45 cents per share, as branch consolidation expenses totaled approximately $4 million on a pre-tax basis. The branch consolidation plan, announced as part of our Investor Day in August, remains on track, with 10 locations scheduled for consolidation in December – and the remaining locations scheduled for January of 2022. In addition, the sale of two branches has received regulatory approval and should settle in early December. Regarding capital management, the Board declared a quarterly cash dividend of 17 cents per common share and approximately 44 cents per depository share of preferred stock. The common share dividend is the company's 99th consecutive quarterly cash dividend. The 17-cent common share dividend represents just 38% of core earnings. Given the robust outlook for loan growth, which will be discussed later in the call, we elected to maintain the current dividend level as we evaluate our ability to deploy internally generated capital. Over the past year, maintaining a conservative dividend payout ratio has allowed tangible book value per share to increase by $1.20, an increase of 8.2%. Tangible stockholders' equity to tangible assets decreased slightly to 8.78% as deposit growth of $359 million increased the balance sheet to $11.8 billion. Our balance sheet remains inflated as we carried approximately $1 billion of cash at quarter end, but the cash is now trending down as loan and securities growth increases. The deployment of cash accelerated through the quarter, with the majority of loan growth occurring in September. The fourth quarter will benefit from a full quarter of elevated earning assets. The company's share repurchase activities continued during the third quarter, with approximately 460,000 shares repurchased. On a year-to-date basis, the company has repurchased 1,460,000 shares at a weighted average price of $20.98. There are 3,559,000 shares available under the current repurchase program, or 6% of the total shares outstanding. Operating expenses were elevated during the quarter as we completed two significant core systems conversions, the conversion of our main core banking platform and the systems integration of the former country bank operation in New York. We also had additional work related to the sale of two branches and the ongoing branch consolidation project. These activities and a few other unusual items added approximately $1.5 million of expenses in the third quarter. As we move into the fourth quarter, these expenses should moderate. The sale of two branches and the consolidation of 10 additional locations in December will also provide a tailwind for operating expenses this quarter. Before I turn it over to Joe, I will note the company's preparations for an inflationary period and the potential impact of interest rate movements. Our expanded investor presentation, which was filed with our earnings release last night, provides detailed information regarding several important areas, including credit quality and interest rate risk positions. Among the disclosures is a quantitative comparison of the bank's asset sensitivity versus national banks with more than $10 billion in assets. As the charts demonstrate, in a rising rate environment, our balance sheet is well protected against rising interest rates should they materialize. One key factor is that our deposit beta in the last rising rate cycle was just 50% of our peers. In addition, our emphasis on the origination of floating rate loans foregoes short-term income in favor of a better protected balance sheet. Joe will discuss that in more detail. At this point, I'll turn the call over to Joe for a discussion regarding progress this past quarter, including an update on the expansion of our commercial bank.
spk02: Thanks, Chris. Loan originations of $772 million were the highest on record for the company, and commercial originations of $585 million also set a record. More importantly, we saw loan closings from our new geographic regions of Baltimore and Boston, with continued strength in our core markets of New Jersey, Philadelphia, and New York. Even after record originations, we entered Q4 with a committed pipeline of $651 million, an all-time high. and fully expect momentum to continue as we are just hitting our stride in our new markets as we build brand awareness through the lending teams. Excluding PPP forgiveness of $31 million, record origination has led to loan growth of $392 million, which included $179 million in organic commercial growth and a residential pool purchase of $220 million. The remaining PPP portfolio totals just $53 million as of September 30th. so it won't drag against loan growth in the coming quarters. The residential pool purchase occurred on the last day of August, and the bulk of the commercial growth in late September, so we will see the benefit of the added interest income in Q4 and beyond. We closed over $100 million in construction projects year to date in our newly created construction vertical, and initial fundings were less than $13 million, or 12% of originations. As these projects mature, we will see the benefit of stronger interest income from larger outstanding loan balances. We remain bullish on our core residential business, which continues to hum along and is only restricted by limited housing inventory in the market. The liquidity on the balance sheet fueled by continued deposit growth influenced our decision to buy a residential pool. This pool is comprised of residential loans dispersed throughout the country. We bought pools in the past and will continue to look for supplemental purchases to soak up some of our excess liquidity, diversify credit risk, and build interest income. While our preference is to use our liquidity to fund commercial activity, as evidenced by the loan originations, our focus is putting the cash to work in rapid fashion. Our asset sensitivity, which will bode well in a rising rate environment, gives us some flexibility to purchase some fixed rate residential paper putting our liquidity in play. The pool purchase of $221 million only resets our residential loan portfolio size to where it was back in September 2020. And I'll note that $396 million of our commercial originations in the quarter were floating rate loans, which should carry some upside in mid to late 2022 and beyond. Our deposit increase of $359 million for the quarter is low yielding, and had the effect of reducing our cost of deposits. Core deposits, excluding CDs, grew 460 million, which reflects continuing improving deposit quality. As a result, our cost of deposits sit at 22 basis points, almost a record low for the company. We still see the cost of deposits trending lower, as we have over 125 million in CDs maturing in Q4, and another $176 million in the first quarter of 2022. I do expect some deposit runoff in Q4 due to seasonality, but nothing meaningful. Core NIM improved quarter over quarter by four basis points, and we see modest continued improvement moving forward. On the expense line, exclusive of the branch consolidation expenses, we had elevated professional and data processing expenses partly related to the core conversion, which should reverse and improve the Q4 run rate, as will the branch consolidation savings in 2022. The branch consolidations and the two branch sales remain on track, with regulatory notice requirements and approvals for the sale of the branches impacting the timing of the process. The ultimate expense saves will be seen beginning in Q4 and Q1 2022 as branches sell or close. With that, I'll turn it back to Chris.
spk10: Thank you, Joe. At this point, we'll move to the question and answer portion of the call.
spk01: Thank you, Chris. We will now start the Q&A session. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypads now. If you do change your mind, please press star followed by two to withdraw your question. Please ensure that you are unmuted locally. Our first question comes from Frank Giraudi from Piper Sandler. Frank, please go ahead.
spk08: Good morning. Good morning, Frank. I wanted to ask specifically on some of the expansion markets like Boston and Baltimore, if you could provide where you are in footings in those areas and what the pipeline looks like.
spk02: So we're happy Boston and Baltimore footings are in the $50 million range each year to date. And pipelines for those are pretty substantial. They're changing every day, Frank. I can get back to you with a number specifically. But we're just really touching the fringes here. I think the momentum has been significant, especially for the new market. So we're pretty bullish.
spk08: Okay. And then just given where you're seeing paydowns, obviously pretty elevated, it sounds like you anticipate, you know, some of the excess cash could get sopped up by additional resi loan purchases. Is that somewhat more likely than billed in the securities book? Or how should we look at that from a modeling standpoint?
spk10: I think that's right, Frank. The residential portfolio has not typically been a growth portfolio for us, but we do like the way that it moderates our risk position across the balance sheet. So the purchases we made in the third quarter, as Joe mentioned, brought us back to where we were about a year ago. I think we might try and engineer some modest growth in the residential book, but it won't be growing anywhere near as quickly as the commercial loan book. The other thing is, as you point out, although we did deploy some liquidity into securities in the third quarter, we may do a little more in the fourth quarter. Ultimately, we'd like most of the liquidity to go into the loan book.
spk08: Gotcha. Okay. And then just finally, if I could, just on expenses, you know, you talked a bit about the elevated levels and the tailwinds going forward. I just wondered if you could remind us of, you know, thoughts on – expense base on a quarterly run rate, you know, as we get into, say, 2Q22 after branch consolidation, or at least this round is completed.
spk10: You're absolutely right, Frank. We had, at the investor day in August, we talked about the fact that expenses were coming up in the third and fourth quarter, but then they would moderate and decrease at an absolute level going into 2022. It's not a significant decrease, but I don't know, Mike, if you give a better sense of that for the full year.
spk09: Yes, so we have a few things going on. First of all, we did the country conversion, core conversion in September. We finished that, so we took out some data processing costs from country, and we reduced headcount as of the end of the quarter, so those will flow into the fourth quarter. Chris talked about our core conversion for the bank overall. There were elevated costs related to that, data processing, professional fees, some others. We have the sale of the two branches coming in December. We have the branch consolidation, 10 branches in December and another 10 branches in January. And those cost savings were identified in our investor day last month. So all of those will reduce expenses going forward.
spk10: And we're not producing a quarter-by-quarter projections on expenses that we'll be releasing, but I think we gave you some full-year guidance, which we're still comfortable with.
spk08: Okay, got it. Thank you very much.
spk10: Thanks, Frank.
spk01: Thank you, Frank. Our next question comes from Michael Perizzo from KBW.
spk03: Hey, guys. Good morning. Thanks for taking my questions. I wanted to stick on the expense team for a second. I mean, it sounds like, based on your last comment there, Chris, that this is the case but you know obviously there's been a lot of wage pressure out there and and competition for for talent and it seems like you guys actually kind of timed it really well right when most of your hires haven't taken place already before this is kind of manifested but i guess just wanted to confirm that that's the case and you know that's not really a threat to maybe knock you off your your expense outlook for next year doesn't sound like it is but just like to confirm that if possible you know i i can confirm that for you uh mike so the
spk10: The way we're looking at it is that the wages that are under the most pressure that we've seen are obviously the more entry-level wages and branches and things like that. So the transition to digital will really help there. There will be some wage pressure. So I think the average salary increase will be a little higher than in years past. But the total number of headcount will be coming down to offset that. So we still feel pretty comfortable. And the items that were a little bit elevated in the third quarter, were non-compensation related. So these were professional fees and technology fees. So they were not driven by compensation issues. Although there is a lot of compensation pressure in the market, we're still comfortable with the guidance we gave for the full year expenses for 2022.
spk03: Great. Helpful. Thank you. And then just on the margin, so it sounds like you guys have a couple chunks of higher cost funding that will run off, you know, the resi loan purchase was later in the quarter i mean that would seem i guess putting all those pieces together i mean does it is the margin you know kind of continue to the core margin rather to kind of continue to inflect upward from here you know i mean do you guys have any line to cite on kind of how you expect liquidity position to to act near term and and i guess are there any other kind of um inputs that we should be mindful of as we kind of think of the core name trajectory, because it seems like there's more tailwinds than headwinds coming off the low figure that we're at in the last couple quarters.
spk10: I think that's definitely the case. So we're coming kind of bouncing off the bottom here. You're correct that in the third quarter, although NIM expanded, we really didn't get the full benefit of the loans that were brought on in September or even the pool purchase that was in late August, nor we did deploy about $50 million into securities as well. So So I think in the fourth quarter, when you have the full quarter impact of that growth, you're going to see expanded margins. The other outlook item is we're feeling very bullish about the teams we've brought on board. They're doing great building pipelines. It's too early to be able to really fine-tune how productive they may be, but it's possible we may be able to deploy all of our excess liquidity as early as mid-year next year, which would be one or two quarters earlier than we thought. And that bodes well for margin as well as net interest income.
spk03: And just lastly, then I'll step back just on that point. Can you remind us how you think about – I realize it's kind of a hard question in the current environment, but how we should think about the normalized liquidity cash and the bond book for you guys moving forward? I mean, is this level of securities – um probably fairly steady state or or do you think it could move down or is it really just when you say kind of deploy liquidity you mean just getting this cash kind of back down to 100 million or plus or minus more normalized level and and not necessarily any kind of compression on the securities portfolio yeah the primary thing i was referring to is deploying the cash getting that down to historically we've got a very strong liquidity position core deposit funded no um
spk10: wholesale advances at the Federal Home Owned Bank. So we have the ability to run that liquidity down as, you know, plus or minus $100 million. And that's where we'd like to operate. So that would be the primary thing. But I would share that we've got a healthy cash flow coming off the securities portfolio. And once we deploy the cash, we would probably redirect the redemption cash flows coming off the securities book into loans as well. So traditionally we've had a pretty high – a percentage of loans in the balance sheet, and we'd like to build ourselves back to that position. We think that, you know, that kind of drives our core profitability. So if you think of the next, say, by mid-second, third quarter of 2022, it may be possible to deploy the cash. After that, we'll begin a mix shift of letting the securities cash flows come off. But as early as 2023, we might be looking at true balance sheet growth as well, which would be, if we're in that position, that would be a terrific thing.
spk09: Just to add a couple things to that, Michael. So loans at quarter end, quarter end balance was $274 million above the average, and securities at quarter end were $52 million above the average for the quarter. So both of those, so just if you roll that into the fourth quarter, it's going to be probably an extra four or five basis points in terms of margin. So that's the biggest tailwind. And the securities book, actually, if you look year over year, it's up $600 million in in the last year, that's about a 60% increase, and that's soaking up the liquidity. So we've built that book in light of liquidity, but there's a lot of cash flow coming off of it because a lot of it's an MBS with monthly cash flow, and then you have maturity. So that will be redirected to the loan book eventually, maybe not in the near term, but eventually it will rotate into loans.
spk03: Got it. Awesome. Thank you, guys, for taking my questions. Very helpful. Thanks, Mike.
spk01: Thank you, Michael. The next question comes from Dave Bishop from Seaport Research Partners.
spk06: Yeah, good morning, gentlemen. Good morning, Dave. Hey, Chris, just curious, you know, some headwinds out there in the market. We hear a lot of banks talking about, you know, supply chain issues, inventory issues. Just curious if that's forcing you or driving you to to maybe reset your expectations in terms of longer-term growth outlook as enumerated at the analyst stage? Maybe any update in terms of how you're thinking about loan growth into 2022 relative to what we spoke about up in New Jersey?
spk10: There's no question that supply chain issues are being felt throughout our client base and I'm sure the whole economy. And what it's doing is it's taking the opportunity for even better earnings or expansion to take place. So At the end of the day, if you can't deliver a product, whatever your product is, whether that's a car or a building or whatever, you can't record the revenue and you're not showing that kind of progress. Fortunately, we haven't seen a change in core demand. So although we're not seeing some of these projects complete or customers ramping up as quickly as they'd like, their order backlogs remain strong. If anything, they're growing. I also think that because of the supply chain issues, We're seeing a continued very strong demand in the logistics world around warehousing. So to a certain degree, people are going to be keeping a little higher inventories when they're able to get their hands on things. So that higher level of inventories, we look towards probably more line draws. Our line draws are very low right now. So we think there's opportunity there. So as we go into next year, I think we're still very comfortable with the projections we talked about in August. So I'm pretty comfortable. That said, if the supply chain doesn't start coming, say, back online in Q1 or Q2 of next year, the more persistent it is, it's possible it could destroy demand, meaning that people that just can't get stuff stop trying. And we're not at that point yet, but we're watching it closely.
spk06: Got it. And then in terms of the the newer markets, the Boston and Baltimore markets, and apologize if you have enumerated this before, but as you look out into maybe the end of 2022, I don't know if the right way to think about it, the dollar of loans and deposits outstanding or percent of loans, just curious maybe where you foresee those potentially getting to.
spk10: I think it starts with what we expect before we hire anyone. It doesn't matter whether it's a new market or an existing market. And if you're bringing on teams of producers, you're expecting several hundred million dollars worth of growth over time. And I will say that we will not enter a market if we don't think it has the potential to get to a billion dollars or more in outstanding over several years, right? It could take a number of years to get there. So we're not interested in being in a market that might top out at, say, 200 million or 400 million. So I think in terms of expectations – We're seeing a lot of good progress, and Joe can talk more to that, but we feel we have the right people in the right place. We're being well-received in the market. The fact that transactions are happening already I think is a little proof of that. And based on the pipelines, I think we're right on track. But to reiterate, we're not launching a team unless we think we can produce several hundred million dollars of outstandings, and we're not getting into a market unless we think that market has the potential to grow to a billion dollars. Joe, anything you'd add on that?
spk02: As I mentioned earlier, Dave, we've closed over $100 million in totality in both of the regions so far. And the pipelines are strong, and I think we're really just starting to hit stride. Just the activity in the last week and what I've seen from both teams is really bullish. And I get back to Chris's comment about the supply chain. interestingly we do have a variety of our larger cni clients that have starting with the pandemic been pretty well prepared in in inventory management and i have the opposite problem chris mentioned earlier you know i have a 870 million in unused lines because a lot of these folks have actually done fairly well and have paid us down or paid us off so i'd actually like them to work through some of that inventory that's a good problem for some of them to have and maybe borrow some money
spk06: I appreciate the pillar.
spk04: Thanks, Dave.
spk01: Thank you, Dave. As a reminder, in order to ask a question, please press star 5.1, your telephone keypad. And our next question comes from Russell Gunther from DA Davidson. Russell, please go ahead.
spk07: Hey, good morning, guys. Good morning, Russell. I just wanted to ask if you're able to share what the level of paydowns were this quarter versus last, and just any line of sight into that headwind near term.
spk10: We really didn't have them. We had the ordinary course paydowns, Russell. It didn't increase or decrease. One of the advantages of having sold off the majority of our PPP loans last year is that PPP wasn't that much of a headwind. It was $30 million. As Joe said, there's not a lot left on the balance sheet, so I don't think that's kind of a barrier for us growing the loan book.
spk09: It was a little elevated. Payoffs were $440 million, and then paydowns and prepayment were $170 million. So we had the rich nations were heavy, but it's partly offset by sales and payoffs. Not sales, payoffs and other paydowns.
spk07: Great. Thanks, Mike. Thanks, Chris. And then I appreciate the disclosure you called out and spoke about in the prepared remarks with regard to positioning for higher rates. You guys have put out in the past, I think, a 320 to 340 margin guide. Does that guidance contemplate any of that benefit from rates or not?
spk10: I think that that's within that range that you're talking about. Let's say we get fully deployed. Remember, there are two things here. We want to deploy the cash and And as Mike pointed out, we have $600 million in securities, more than we were holding just about a year and a half ago. So between the cash being deployed in the first several quarters of next year, the securities mix going on maybe another two or three quarters after that, that should normalize our balance sheet so that we've got kind of the earning asset mix that we think is optimal for us. At that point, I think you're probably in the historical margin range of $325 to could be as high as $350. To get to 350, though, I think you're going to have to have movement in the yield curve. But even without movement in the yield curve, we can make a lot of progress towards that 325 in today's kind of flattish yield curve.
spk07: That's very helpful. Thank you. And then just last one for me, you know, fees are not a big part of the story here. But I did just want to ask, given service charges were a bit lower than expected, gate on sale as well. So Any color on the dynamic this quarter and going forward?
spk10: I'll take them into two separate topics there. In terms of gain on sale, as long as we have this protracted cash position and we have a very strong asset sensitivity position, we're going to take advantage of whatever residential origination we can and put that in the balance sheet. So I wouldn't be looking for much in gain on sale for a while. In terms of deposit fees, those are cyclical. So it was nice to see some of the Interchange fees came up, but with this level of liquidity out there in the market, things like overdraft fees are going to be down, even minimum balance fees. You're not collecting them when people have so much cash in their accounts.
spk02: We also took advantage of really supporting clients during the conversion process. I think there are times during conversion you just want to make sure you rebate the appropriate fees to get people through the new systems.
spk07: Okay, great. Thanks, Chris. Thanks, Joe. That's it for me, guys. Thanks, Russell.
spk01: Thank you, Russell. Our next question comes from Matthew Breeze from Stevens, Inc. Matthew, please go ahead.
spk05: Good morning. Real quick on the share repurchases. It's been pretty consistent year-to-date, about 500,000 shares a quarter. Should we expect that pace to continue for at least the near term?
spk10: That pace may pick up, Matt. Some of the challenge we've had is more logistical about the rules about when you can buy and how much you can buy and blackout periods. And we may try and be a little more proactive on that. So I think given the authorization that's out and our level of earnings, we have the capacity to do between a half a million and a million shares a quarter. And at the current values, we think it's a good move for our shareholders.
spk05: Okay. And then going to the portfolio purchase, you know, so given the expansion through markets and hires, the read last quarter was that there was going to be a swell of organic origination sufficient to achieve that $250 million in net growth per quarter that we've discussed. And the first solid indication was the 2Q pipeline was $628 million. I guess my question is, should we look at the portfolio purchase as an indication that your confidence in achieving the $250 million in organic growth has changed? Maybe I'm reading too much into it, but curious your thoughts on the matter.
spk10: We're still very comfortable with that $250 million target. I think, as Joe pointed out, some of the loans we put on, especially in that new construction vertical, they withdraw over time, so you get a little tailwind from that, where you're booking the loans, but you're not getting the dollars out in the portfolio quite as fast. But based on the pipelines we have now, the pipeline is even a little larger than it was in Q2. and continues to grow. We don't do intra-quarter updates, but I will generally say that October's had a nice level of closings. Nice to see that early in the fourth quarter. So the pipelines look good. If anything, they're larger than they were at quarter end. Teams are productive. The residential play was really, as the housing inventory dried up, our residential side is really a purchase business, right? We're not doing a lot of refinances. So as the residential inventory dried up, unit sales dropped, and we started to see attrition in the residential book. And we said, you know what, let's try and bring that residential book back up. But commercial has been strong. I think it will remain strong. And if from time to time residential is not as strong, we may supplement it with asset purchases. But we're very pleased to see the primary earning asset business for us, commercial banking, is growing nicely.
spk02: Matt, deposits continue to grow for us? So we want to put stuff to work with the asset sensitivity we have. Residential pool purchases do provide us with a little bit of a credit diversity play, and it's fully funded dollars, and we're looking at bi-season pools typically. So we just want to put cash to work.
spk10: There may be periods where net loan growth is more than $250 million because we're opting to do things like that in a quarter.
spk05: Got it. So we stick with the $250 million per quarter with upside depending on portfolio purchases. Is that the right read?
spk09: Yep.
spk05: Okay. I guess where I come off as skeptical is if I take the $625 or $630 million pipeline last quarter, which resulted in like $140, $145 million of organic net growth this quarter, we're looking at a $650 million pipeline this quarter. but a materially higher amount of organic growth. Maybe I'm looking at those ratios the wrong way, but maybe I'll be connected to that.
spk10: Yeah, I would point, you know, look, at any given quarter, what you originate, what actually goes into growth in the balance sheet are always a little bit off. But, you know, net of the PPP, which would be less of a drag going forward, is about $170 million of growth. So there's not a big delta between $170 million and $250 million. That could be five or ten extra deals in a quarter. So we feel pretty good that the 250, and I think the way we guided in August, that that would be a pretty consistent thing in 2022, when these, especially the new teams, have gotten maturity. We're very happy with what they've done, but until you establish your reputation in a market like Baltimore or Boston, you've got to do a few deals to be credible to do a few more, and then it kind of starts to build more strongly. So We think Q4 is going to be good, and we continue to expect in 2022 that that kind of consistent $250 million a quarter should be achievable with the teams we have put on so far.
spk02: We have, Matt, in the quarter in the commercial bank, we had over $160 million of undrawn, whether it's construction or undrawn commercial lines in the closings. So you put $585 million on, but you've got outstandings of $400 million and change. So you're going to see some of that, and that's okay. We're going to have that activity, and that money will be drawn over time. Great. Okay. That's all I had. Thanks for taking it.
spk05: Thanks, Matt.
spk01: Thank you for your question, Matthew. And as a reminder, in order to ask a question, please press star followed by 1 on your telephone keypad. That is star followed by 1 on your telephone keypads. We currently have no further questions. I will now pass over to Chris for final remarks.
spk10: Thank you. With that, I'd like to thank everyone for participating on the call this morning. We remain focused on building the business, deploying cash, and improving earnings. We look forward to speaking with you following our year-end results in January. Until then, we hope you have the opportunity to enjoy a slightly more normal holiday season this year. Thank you.
spk01: Thank you everybody for joining today's call. You may now disconnect your lines.
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