Arbor Realty Trust

Good morning, ladies and gentlemen, and welcome to the fourth quarter 2021 Arbor Realty Trust Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during that period, you will need to press star 1 on your telephone. If you want to remove yourself from the queue, please press the pound key. Please be advised that today's conference call is being recorded. If you should need operator assistance, please press star 0. I would now like to turn the call over to your speaker today, Paul Alenio, Chief Financial Officer. Please go ahead.

Okay, thank you, Ashley. Good morning, everyone, and welcome to the quarterly earnings call for Arbor Realty Trust. This morning, we'll discuss the results for the fourth quarter and year-end of December 31, 2021. With me on the call today is Ivan Kaufman, our President and Chief Executive Officer. Before we begin, I need to inform you that statements made in this earnings call may be deemed forward-looking statements that are subject to risk and uncertainties, including information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans, and objectives. These statements are based on our beliefs, assumptions, and expectations of our future performance, taking into account the information currently available to us. Factors that could cause actual results to differ materially from our risk expectations in these forward-looking statements are detailed in our SEC reports. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today. Arbor undertakes no obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after today or the occurrences of unanticipated events. I'll now turn the call over to Arbor's President and CEO, Ivan Kaufman.

Thank you, Paul, and thanks to everyone for joining us on today's call. We are very excited today to discuss the significant success of We have been closing out what was an exceptional 2021, as well as our plans and outlook for 2022, which we are confident will be another outstanding year. As you can see from this morning's press release, we had another record quarter, and 2021's results reflect one of our best years as a public company. It is very important to continue to emphasize the value of having multiple products with diverse income streams. which has allowed us to consistently grow our earnings and dividends in all cycles while maintaining a very low dividend payout ratio. We strategically built an annuity-based business model, creating multiple income streams from a single investment. As a result, not only do we generate strong risk-adjusted returns on our capital, which positively affect our current earnings, more importantly, we are also building a much higher quality future earnings and dividend growth story by ensuring that our assets will provide us with multiple other products in the future. And this is one of the major differentiators of our business platform, which is why we strongly believe we should consistently trade at a substantial premium and much lower dividend yield than anyone in our peer group. In fact, with the recent pullback in the market, we are now trading at a dividend yield of approximately 8.8%, which is actually higher than the yield of our peer group for the first time in several years. This is despite the significant advantages of our business model and a long track record of consistent dividend increases compared to our peers, most of which have been unable to grow their dividends. We feel strongly that our current stock price in no way reflects the true value of our franchise, presenting investors with an unparalleled buying opportunity. As described in this morning's press release, our record fourth quarter results combined with a very positive outlook on the long-term growth of our platform has allowed us to once again increase our dividend to 37 cents a share. This is our seventh consecutive quarterly dividend increase and our tenth consecutive year with consistent dividend growth, putting us in a very elite class of companies, all while continuing to maintain the lowest dividend payout ratio in the industry. We built a premium operating platform that is focused on the right asset classes and a very stable liability structures. We have a thriving balance sheet, GSE agency, private label, single family rental, as well as an industry leader securitization platform that allowed us to produce a long track record of exceptional performance with consistent earnings and dividend growth. As a result, we've been the top performing REIT in our space for five consecutive years now in all the major performance metrics, including earnings and dividend growth, ROE, and total shareholder return. And again, we are very well positioned to succeed in every market cycle, which gives us great confidence in our ability to continue to have tremendous success going forward. Before we discuss the details of our quarterly results, I want to highlight some of our more notable 2021 accomplishments, which include generating substantial growth in our earnings, allowing us to increase our dividend four times, or 12%, to an annual run rate of $1.48 a share, delivering total shareholder return of 39% in 2021 and 221% cumulatively for the last five years, with an annualized return of 26%, achieving industry-leading ROEs of 90% for each of the last two years, producing record originations of 16 billion, a 76% increase over last year, originating 10 billion of new balance sheet business, increasing our portfolio 122% in 2021 to 12.2 billion, producing private label originations of 1.4 billion, a 276% increase over the last year, growing our servicing portfolio to $27 billion, a 10% increase from 2020, and a 34% increase over the last three years, closing four non-recourse CLO securitizations, totaling $5.2 billion, and two private label securitizations for $1 billion for our industry-leading securitization platform, and raising $1.7 billion of accretive capital to fund our balance sheet growth and increase our market cap to over $3 billion. Turning now to our fourth quarter performance, as Paul will discuss in more detail, our quarterly financial results were once again remarkable. We produced distributable earnings of $0.62 per share, which is well in excess of our current dividend, representing a payout ratio of around 60% for the fourth quarter and 70% for the full year 2021. In our balance sheet lending business, we have another outstanding quarter producing record volumes of $4.3 billion. We're a top balance sheet lender in the industry and are seeing tremendous growth and efficiencies as we continue to scale our platform. As a result, we grew our balance sheet book 122% in 2021, to $12.2 billion on record originations of $9.7 billion. And we have a very large pipeline, which gives us great confidence in our ability to continue to meaningfully grow our loan book in 2022. And again, these balance sheet loans create significant value for our platform. They're not only accretive to our current earnings and dividends, but also allow us to build a pipeline for two to three years of new GSE agency and private label loans that produce additional long-dated income streams, ensuring the long-term growth of our platform and creating high-quality earnings and dividends for the future. We have consistently been a leader in the CLO securitization market as financing our high-quality balance sheet portfolio with the appropriate liability structures continues to be one of our key business strategies. We are very successful in continuing to access the CLO securitization market in 2021 including closing our largest CLO to date, totaling $2.1 billion in the fourth quarter, as well as closing another $2 billion CLO just last week. The utilization of these vehicles has contributed greatly to our success by allowing us to appropriately match fund our assets with non-recourse, non-mark-to-market, long-dated debt, and generate attractive levered returns on our capital. We continue to experience strong growth in our GFC agency and private label business programs as well. We originated approximately $1.6 billion in agency loans in the fourth quarter and $1.9 billion including our private label business. Equally as important, we have a robust pipeline giving us confidence in our ability to continue to produce consistent agency volume in 2022. Our GFC agency platform continues to offer premium value as it requires limited capital and generates significant long-dated predictable income streams and produces significant annual cash flow. Additionally, our $27 billion GSE agency servicing portfolio, which has grown 10% in the last year, is mostly prepayment protected and generates approximately $121 million a year and growing in reoccurring cash flow, which is up 8%, from $112 million annually last year. This is in addition to the strong gain on sale margins we continue to generate from our originations platform, which combined with new and increasing servicing revenues will continue to contribute greatly to our earnings and dividends. And early this week, we were pleased to have closed our fourth private label securitization, totaling $490 million. which continues to demonstrate the strength and diversity of our versatile lending platform and tremendous securitization expertise. We also had a great year in our single-family rental platform. We produced approximately $900 million of volume in 2021, including approximately $400 million in the fourth quarter. Additionally, we currently have over $1 billion of additional deals in our pipeline making us optimistic about the growth opportunities in this segment of our business going forward. We are a leader in the built-to-rent space, which provides us with the opportunity to originate construction, bridge, and permanent loans on the same transactions. And again, similar to our balance sheet business, this platform provides us yet with a path to future transactions that will produce additional long-dated income streams. In reflecting on 2021, we had an exceptional year and clearly outperformed our peer group. We are the best performing REIT five years in a row, delivering a 26% annualized return over the same time period. We're also well positioned for continued success in 2022 through our unique multi-tiered annuity-based operating platform that provides us with a future annuity of high-quality, long-dated income streams, making us confident in our ability to continue to grow our earnings and dividends and significantly outperform our peers. I will now turn the call over to Paul to take you through the financial results.

Okay, thank you, Ivan. As Ivan mentioned, we had another exceptional quarter, producing distributable earnings of $94 million, or $0.57 per share. and 62 cents per share, excluding a one-time realized loss of $8 million on a non-multifamily asset that we were taking a reserve on during the height of the pandemic. We also had a record year with distributable earnings of $2.01 per share in 2021, a 15% increase over our 2020 results. And these results translated into industry-high ROEs again of approximately 19% in 2021, allowing us to increase our dividend to an annual run rate of $1.48 a share, reflecting four increases in 2021 and seven consecutive quarterly increases, representing a 23% increase over that time span. Our financial results continue to benefit greatly from many aspects of our diverse annuity-based business model, including significant growth in our agency, private label, and balance sheet business platforms that produce substantial gain on sale margins, long-dated servicing income, and strong levered returns on our capital. Additionally, as we've mentioned in the past, the credit quality of our portfolio has been outstanding. We have very few specific reserves left on a handful of non-multifamily assets that we took in the beginning of the pandemic, and we also made significant progress over the last few quarters in our non-performing loans as trends continue to improve. We received another $32 million in payoffs and paydowns in the fourth quarter related to three loans, leaving us with effectively only one remaining non-performing loan for $20 million. We have always prided ourselves on investing heavily in our asset management function, and the success we're having in working out these assets further demonstrates the value of our unique franchise. Looking at the results from our GSE agency business, we originated $1.6 billion in GSE loans and recorded $1.5 billion in GSE loan sales in the fourth quarter. We also continue to produce consistently strong margins in our GSE loan sales, generating a margin of 1.52% in the fourth quarter, compared to 1.60% in the third quarter. Additionally, as Ivan mentioned, we remain very active in our private label program, originating $282 million of new loans in the fourth quarter, as well as completing our third private label securitization, totaling $535 million in October, and our fourth securitization totaling $490 million earlier this week. And in the fourth quarter, we also recorded $35 million of mortgage servicing rights income, related to $1.8 billion of committed loans, representing an average MSR rate of around 1.88% compared to 1.75% last quarter, mainly due to a greater mix of Fannie Mae loans in the fourth quarter that contain higher servicing fees. Our servicing portfolio also grew 9.5% in 2021 to $27 billion, with a weighted average servicing fee of 45 basis points and an estimated remaining life of nine years. This portfolio will continue to generate a predictable annuity of income going forward of around $121 million gross annually, which is up approximately $9 million, or 8%, on an annual basis from the same time last year. Additionally, prepayment fees related to certain loans that have yield maintenance protection increased again substantially in the fourth quarter to $20 million compared to $11 million in the third quarter, mainly due to significantly more runoff this quarter as a result of the continued increase in real estate values. In our balance sheet lending operation, we grew our portfolio another 33% this quarter to $12.2 billion on record quarterly volume of $4.3 billion. Our $12.2 billion investment portfolio had an all-in yield of 4.62% at December 31st compared to 4.97% at September 30th, mainly due to higher rates on runoff as compared to new originations during the quarter. The average balance in our core investments increased substantially to $10.5 billion this quarter from $8.2 billion last quarter, mainly due to the significant growth we experienced in both the third and fourth quarters. The average yield in these investments was 5.03% for the fourth quarter compared to 5.55% for the third quarter, mainly due to higher interest rates on runoff as compared to originations in the third and fourth quarters, combined with $3 million in back interest collected in the third quarter from the payoff of a non-performing loan. Total debt on our core assets was approximately $11.2 billion at December 31st, with an all-in debt cost of approximately 2.61%. which was down slightly from a debt cost of around 2.64% at September 30th, mainly due to a reduction in the cost of funds from our new CLO vehicles and reduced rates on warehouse and repurchase agreements during the fourth quarter. The average balance on our debt facilities was up to approximately 9.4 billion for the fourth quarter from 7.3 billion for the third quarter, mostly due to financing the growth in our portfolio and issuing 180 million of new unsecured notes during the fourth quarter. And the average cost of funds in our debt facilities also decreased to 2.65% for the fourth quarter from 2.76% for the third quarter, again, mainly due to reduced pricing in our CLO vehicles and warehouse facilities. Our overall net interest spreads in our core assets decreased to 2.38% this quarter compared to 2.79% last quarter. And our overall spot net interest spreads were also down to 2.01% at December 31st from 2.33% at September 30th. due to yield compression on new originations as compared to runoff. That completes our prepared remarks for this morning, and I'll now turn it back to the operator to take any questions you may have. Ashley?

Thank you, and as a reminder, to ask a question, please press star 1 on your telephone keypad. To withdraw your question, please press the pound key. We ask that you do please pick up your handset to allow optimal sound quality. We'll take our first question. From Steve Delaney with J&P Securities, please go ahead.

Thanks. Well, hello, Ivan and Paul. Congratulations on an excellent close to last year. I think the thing that jumped off the page the most to me, it's a lot of good things in the report and in the year, but the dramatic growth in your structured business in terms of origination volume, you did $9.7 billion, but 6.8% or 70% of that came in the second half of the year. So my question is this strong demand that you're seeing for multifamily bridge loans in the market, do you expect that to carry over into 2022? And is it possible that 2022 could set a new record for origination volume in the structured business? Thank you.

Yeah, thanks, Steve. Clearly there was a little bit of a shift in the environment, and I'll give you some of the reasons for it and why we're so well positioned and so dominant in that space. And if we had more personnel and more ability, we could probably have done more. We limited what we could do, and we're still limiting what we could do. I think with the huge jump in numbers, rates of rental rates um and is between 10 to 25 you know increase in in rent from people buying properties they're not going for permanent financing so they're going for more transitional financing before they get to the permanent financing so it's a very very big shift um through the covet period rents were fairly flat and then right after you know the initial periods of covet rents really accelerated. So people are buying multifamily properties, taking a year to two years to turn those rents, and then getting the benefit of an increased NLY and then going for permanent. That's been the shift in the market. We are the best balance sheet lender in the business when it comes to multifamily. We do a great job, and that business has grown just dramatically. We've probably turned away just a huge amount of business. In terms of the outlook for 2022, we are running at about a billion dollars a month on our books for closings for the first quarter. We're still turning down a significant amount of business. We have restrictions. Human capital is a very, very big restriction today. As we all know, hiring people, retaining people is a big task. We're doing a good job with retention, but hiring new people is very difficult. So right now, the outlook on the balance sheet is still very strong, and we still are a market leader in that place in the market.

That's very helpful, and thanks for the color on sort of the mindset of these borrowers, that it's not buy it, take three or four years, renovate it completely. I mean, they're seeing a near-term opportunity, and I can understand how that is boosting the your demand for Bridge, so thank you for that. And then one follow-on question, your SFR business, still relatively small, but strategic for sure. So 57 million in originations in the fourth quarter, and I see you're servicing about 190. What I was trying to reconcile, because the numbers weren't really adding up, you're showing that you have 729 million in total commitments? And I'm just trying to understand, kind of rationalize, like, where do we see the, or have we seen the origination volume that would have contributed to the $700 million of total commitments?

So there are various segments of that business. One is providing fixed-rate production, which is a part of what we're doing, and I think we're running that side of the business, ramping it up to about $20 million a month, which is our goal, where we originate fixed-rate product and we sell them as fixed-rate loans. We don't hold them for securitization, but we do sell them into the market, and we do very well with those. The second element of our business is providing floating-rate product for people buying scattered-site single-family rentals, either from builders, or scattered sites, developing them. That part of our balance sheet is growing. Paul could tell you how much is on that balance sheet and how much is in the pipeline. And the third piece of the business, which we love, which we are the market leader in, I believe we are, is in the build-to-rent communities where people are building build-to-rent communities. We provide them a construction loan. It stabilizes. We provide them a bridge loan, and then we do a takeout loan. That's where we put a lot of work, put a lot of energy, spent a lot of money, and that's where there's going to be an exponential amount of return on that capital in 2022, 2023, and 2024. Paul, you want to give some color on the numbers?

Yeah, I think, you know, Ivan's laid out the different components of the business, Steve. It's a little complicated from a financial modeling perspective, I get. What we're trying to do for you guys is give you a sense of the breadth of the platform when we disclose the committed volumes that we've committed to during the year so you know the transactions we've committed to, the size. But as Ivan said, there's different components, and some of those bill-to-rent and scattered site commitments aren't funded right up front, right? They're funded over time. So the commitments could be large and the fundings could be small over a period of time. So the first thing we did was try to disclose to you in the press release what we've committed to to give you a sense of where that business is going. When you look at the numbers that hit the balance sheet, you're right. $57 million was what we funded in permanent fixed-rate loans that hit the agency side, and we're selling those in the market at pretty high margin without retaining any risk. And then we've got the build to rent fundings, and then we've got the bridge loans funding. So, when I look at the quarter, we probably funded 115Million of prior commitments on build to rent commitments. We funded, maybe even more than that, probably 150Million. And then we had about 60Million of, as you said, permanent loans. But to date, year to date through December 2021, We originated about $170 million of permanent product. $136 of that was fixed rate that we're selling through the market and booking a profit on, not retaining any risk. The other $35 is sitting on our balance sheet. Total on our balance sheet right now is about $450 million, and that consists of the balance sheet part of the small amount of fixed-rate loans we have in our balance sheet, and then all the fundings we've done between bridge loans and fundings we've done on commitments for scattered site and built-to-rent products. So we're just trying to give you – it's a little complicated, but we're trying to give you a sense of where the business is going with committed volume, but the funded volumes trail, as Ivan said, and those are the numbers that are in the balance sheet.

Got it. And that's a very helpful color.

Go ahead, Adam. I do want to reiterate. just as I did before, that we are resource constrained. We could be doing significantly more, but we just don't have the bodies to process the business, and we're at our capacity, which is the first time that's ever happened in my career where you can't hire people to manage, you know, new business and you're turning away business. Crazy. Well, high-quality problem, I think.

The last thing I just wanted to add to Ivan's commentary before about our bridge run rate, just to give you some numbers. We did originate, I think, just about $850 million in January, had $150 million to run off. So as Ivan said, we're running in that $800 to $1 billion per month, and we've got some constraints, but obviously that business is – we have a large pipeline in that business. It's still very active.

Thank you both for the comments. Helpful.

We'll take our next question from Rick Shane with JP Morgan. Please go ahead. Your line is open.

Hey, guys. Thanks for taking my questions this morning. Can you hear me? Yes, Rick. How are you? I'm doing well, thanks. A couple things. So I think implicit in the comments about labor markets and growth opportunity, that's a signal to all of us to think about expense structure going forward. What type of expense growth do you think we should anticipate in 2022 just so we can sort of level set there given the language around employees?

Before Paul gets into that detail, you know, we deal with retention and things of that nature consistently over the course of different cycles. And We have a lot of flexibility in the way we do compensate people, and even having to pay off for people, we do it on a long-term basis with a lot of retention aspects to it. So we have the benefit of people who have been with us for 5, 10, 15, 20 years who are loyal to the company. We do have to recognize that they do have to be adjusted to where the market currently is, But we're able to do that with long-term incentives rather than annual payouts and get the benefit of having long-term retention. But with that, I'll turn that over to you, Paul.

Sure. So it's a very good question, Rick. And when I look at our numbers for 21 versus 20, you know, 20 was a COVID year, so less travel, less conferences, things of that nature. So it's a hard comparison. But when I look at 21 versus 20, we're up about, I'd say, 20%. year-over-year in comp and G&A, that's without commissions, which is, you know, a variable based on our margins. And I'd say when I look at the model, I think of it similarly. Fifteen to 20 percent growth in that number is probably reasonable given the human capital constraints we have and the way we have to retain people. It's hard to totally predict the number, but I would say consistent with last year's growth is probably similar to the way I look at the future model.

Great. And I know no one's got a crystal ball, and I appreciate both of your willingness to embrace the question and think forward on it. So thank you. The second thing is that when we think about the structured business, I kind of think of that as potential energy ultimately for the agency business. And when we look at the terms of those loans, that's clearly the business model. I am curious when you underwrite loans and think about business plans, are you starting to contemplate higher interest rates or exits as you're taking on those loans within the structured product business with the idea that it may be more expensive for managers, owners to get financing?

We're constantly readjusting our models based on different economics, and we always underwrite our bridge loans to where the takeout's going to be, and we use a certain constant. So that's something that's different about the way we do our business. Back in November, we actually took a look at where the market is. We took a look at where rents have increased to readjusted our forecast on rent growth a little bit. While we have exorbitant rent growth we readjusted our rent growth because people are starting to think that 10 and 20 percent rent growth is going to last forever we think that level of rent growth is going to subside this year as they turn their units and the market adjusts and then we readjusted our rent growth back to a three percent normalized rate so that's a very big adjustment um in terms of increasing the constant that we're using We're constantly adjusting to where the market is. It's something that we do traditionally. We've also reallocated our pricing to be more aggressive on lower loan-to-value in primary markets starting in November. So we've adjusted our portfolio lending programs as well on a credit basis. So we're sensitized to all of those different factors in our underwriting.

Great. And, again, I appreciate the specificity of the answer. Thank you guys very much.

We'll take our next question from Steven Moss with Raymond James.

Please go ahead. Your line is open.

Good morning. I'm Paul. Thoughts around the repayment outlook, obviously some significant benefits and recent results from the early repayments. How do you see that playing out over the 22 and the levels we should expect contribution from that?

Sure. So I think we've had this conversation a few times, Steve, and it continues to blow me away how much prepayment income we've been able to receive. I think on the outlook, I think when I look at the numbers, we do have January's numbers. I think we've got $3 million already in the door in January. And while I do expect it to slow over time, it may be slightly elevated in the first and second quarter. But certainly, as you know, when rates rise, the yield maintenance protection changes. So we are modeling ourselves to a much more normalized number. We did $38 million in prepayment penalties in 2021. Comparatively, in 2020, we had $13 million. We're modeling somewhere in between that, given where we think rates could go and what that will do to the yield maintenance provisions. However, having said that, intuitively, if rates rise, then we should see less runoff. And although you won't get the one-time fees like you did last year, you'll retain the servicing strip, which is more long-dated, and you have that annuity. So I guess that's the kind of way we look at where prepayments could go based on where we think rates to go and what that does to the yield maintenance portion of your portfolio. Great.

Thanks for the detail there, Paul. And, you know, gain on sale outlook, as we think about that, you know, kind of, you know, range as we think about moving to the year. I know you mentioned in your prepared remarks, you know, benefited this quarter from a higher mix of Fannie. You know, can you give us some commentary around that as we think about our model for the next couple, you know, next year, 2023?

Yes. So I think what I've said many times on calls is we try to guide to anywhere between 101 and 101.50. Clearly, in 2021, we had some tailwinds, and we were able to get a significant margin above that. I think we came in at 101.90. Some of that had to do with high-margin business. We did more FHA business, which was up substantially, which was great.

I do think we still have a strong pipeline of FHA business.

And I think we'll be able to even beat our number last year, which will help that margin, because that's 104 business. The APL business, I think Ivan can comment, but I think the way we look at that and the agency business is we look at modeling between a 101, 101.5. If you go back and look at 2020, we came in at 101.40. This year we came in at 101.90. But I'm comfortable even with rates rising that we'll be between that 101 and 101.5, Steve, and that's kind of how we put our models together going forward. Great. That's helpful. Thanks, Paul.

We'll take our next question from Jade Romani with KVW. Please go ahead.

Hey, guys. This is actually Mike Smith. I'm for Jade. Just a couple of round breaks. You know, are you seeing any changes in sentiment, behavior, or underwriting on the part of investors?

I don't think we've seen, you know, much of a change. I mean, clearly, loan proceeds are going to be cut, you know, with rates going up. There's been a Very significant rise in the 10-year from a range of 150, now a range of 190 to two and a quarter in my book. And that's definitely affecting loan proceeds for people. And it's pretty consistent. Underwriting guidelines haven't changed that much. I think just the amount of proceeds people are taking out or the amount of equity that has to go in is going to be changing on a go-forward basis. I think you'll see a little bit of a shift, maybe the 5- and 7-year product, so people can get a little more proceeds. So there may be a shift a little bit from a 10-year product down to a 5- and 7-year. You'll have to see a little bit more equitization. in transactions today in order to qualify for long-term fixed rate financing.

Great. That's helpful, Collin. And then just as a follow-up, do you have any idea of what level of rate increases would you kind of start to impact the market, both in terms of investment trends and credit performance?

So, you know, right now there's been no adjustment in cap rates on multifamily properties, despite the fact that rates are up 50 basis points. My feeling is cap rates should mathematically adjust, but the multifamily asset class is still so attractive, and there is some rent growth left in there. I do believe that there has to be a catch-up along the way, and that will come if this continues and if the tenure continues to widen out. But we haven't seen an adjustment yet. But I believe it's a little bit of a lag. But we'll see what happens. People are looking at the multifamily asset classes that attractive, and they're willing to get a low return on their money at the current time. So either it's lagging or there's an adjustment in investor sentiment returns.

Great. Thanks a lot for taking the questions, and congrats on a strong quarter.

Thanks. Ashley, I believe Lee Cooperman is in the queue. I'm trying to get his questions asked, but I don't... Can you pull him through?

And Lee, if you are connected, if you would, please press star 1 on your touch-tone phone.

Again, that's star 1 for questions.

And unfortunately, at this time, I do not have anyone in queue at the moment. Okay.

All right. Well, thank you, everybody, for your participation. And throughout the year, it was a phenomenal year. Our outlook for the first quarter is very strong, and our pipeline is very significant, and we look forward to continued participation. Have a great day, everybody, and a good weekend. Take care. Thanks, everyone.

Thank you, and this does conclude today's program. Thank you for your participation. You may disconnect at any time.