Ryan Specialty Holdings, Inc. Class A

Good afternoon, and thank you for joining us today for Ryan Specialty Holdings' first quarter 2024 earnings conference call. In addition to this call, the company filed a press release with the SEC earlier this afternoon, which has also been posted to its website at ryanspecialty.com. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements. Investors should not place undue reliance on any forward-looking statement. These statements are based on management's current expectations and beliefs and are subject to risks and uncertainties that could cause actual results different from those discussed today. Listeners are encouraged to review the more detailed discussion of these risk factors contained in the company's filings with the SEC. The company assumes no duty to update such forward-looking statements in the future, except as required by law. Additionally, certain non-GAAP financial measures will be discussed on this call. and should not be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most closely comparable measures prepared in accordance with GAAP are included in the earnings release, which is filed with the SEC and available on the company website. With that, I'd now like to turn the call over to the founder, chairman, and chief executive officer of Ryan Specialty, Pat Ryan.

Good afternoon. And thank you for joining us to discuss our first quarter results. With me on today's call is our President, Tim Turner, our CFO, Jeremiah Bickham, and our CEO of Underwriting Managers, Myles Wooler. Also with us is our Director of Investor Relations, Nick Messick. The first quarter represents a very strong start to the year. Our momentum throughout 2023 carried right into our excellent first quarter. We generated excellent top and bottom line results and made long-term sustainable investments in our business to fortify our competitive position. Revenue of $552 million represents growth of 20.6% year over year, driven by organic growth of 13.7% on top of the strong growth we posted in the first quarter of 2023. Growth was broad-based across our specialty. a significant new business production, and a meaningful contribution from our recent acquisitions. We grew adjusted EBITDA 25.8% to 157 million. Adjusted EBITDA margin expanded 120 basis points to 28.5%, reflecting the benefits of our Accelerate 2025 program and underlining margin improvement. Adjusted diluted EPS grew 34.6%, of 35 cents per share. Our results clearly reflect our formidable value proposition of differentiated talent and niche specialization. We continue to outperform the competition as reflected in our strong new business growth. We captured broader ENS tailwinds and capitalized on specific areas of accelerated growth. Property continued to be very strong, even on top of a great prior year. Casualty was also a significant contributor, and we saw a strong acceleration in growth year over year. Overall, I'm very pleased with our performance in the quarter. Our industry-leading team's dedication to delivering better value and service for our clients is unmatched. Turning to the market, trends remain positive. We continue to believe the E&S market will consistently outpace growth in the admitted market, overshadowing any cyclical shifts in certain lines with respect to submission, flow, and pricing. We continue to believe secular changes are driving most of the growth that we're seeing in the E&S market. Now turning to M&A. We've completed our acquisition of Castell Underwriting Agencies. Through this transaction, we bolstered our delegated authority offering by adding top talent and differentiated intellectual capital. We also significantly enhanced our UK and European footprint and set the stage to accelerate our international expansion. We're pleased to have the Castel team on board, and we look forward to integrating this great business into Ryan's specialty. Further on the M&A front, our outlook remains ambitious. Our pipeline continues to be robust, including both tuck-ins and large deals. As we previously noted, our overall strategy is aligned around the evolving and growing needs of our clients and our trading partners to continue providing a dynamic value proposition. We are committed to expanding our total addressable market within specialty insurance, particularly with targeted investments in delegated authority, benefits, and alternative risks, as well as deepening our considerable moat by enhancing our scale, scope, and intellectual capital. We only move forward when all of our criteria for M&A are met. Each acquisition must be a strong cultural fit, strategic, and accretive. Turning to talent, our people remain our greatest asset. We successfully onboarded new colleagues, adding to our world-class team through the first quarter. We believe that these important investments across our specialties will drive our firm's future prospects and will position us to grow for decades. We believe our commitment to constant innovation and ongoing investment in talent has enabled us to consistently achieve industry-leading organic growth. Now turning to Accelerate 2025. As we continue to execute on the program, we identified additional opportunities to drive continued growth and innovation deliver sustainable productivity increases over the longer term and accelerate margin improvement. We now expect to generate annual savings of approximately $60 million in 2025, with cumulative special charges of approximately $110 million through the end of 2024. These investments will both enhance and scale up our operating model, enabling us to move faster, resulting in lasting benefits to our clients. We are creating platforms and systems that are capable of handling significant future organic and inorganic growth. Looking ahead, the second quarter is off to a strong start, and we are encouraged by continued momentum across each of our specialties. I'm confident that 2024 will be an outstanding year for our firm. We believe our growth will continue to be driven by secular factors, such as increasing risk and complexity. retail brokers becoming larger through solid organic growth and M&A, as well as panel consolidation. Adding to this is our unique competitive position with strategies in high-growth businesses, our ability to innovate with new product development, and the expansion of our total addressable market. We remain confident these trends are sustainable and supportive of our growth for the foreseeable future. As always, I want to thank our entire team for their dedication in once again delivering excellent performance and adding value for our clients, trading partners, and ultimately our shareholders. I'm pleased to turn it over to Tim. Tim.

Thank you very much, Pat. We had a very strong start to 2024 across our specialties. Our entire team remains determined to sustain that momentum throughout the year. Diving into our specialties, Our wholesale brokerage specialty generated strong growth. Our property practice had a great quarter, even on top of a great prior year. The property market continues to be impacted by elevated levels of attritional and secondary perils, including severe convective storms, more retention of risk, and moderating yet persistent inflation driving up loss costs. With expectations for a year of an above average number of hurricanes and other named storms, we expect concerns for large loss events to be top of mind for the industry. Add to this growing property exposures in both high value concentrations and areas of higher catastrophe risk, like flood plains, coasts, and wildfire prone areas, we believe we will continue to see an increase in the frequency and severity of losses. And all of these factors are driving continued flow of new business into the ENS market and high retention as risks remain in our channel. At the same time, our deep bench of talented professionals is successfully navigating this dynamic environment. Through our laser focus on continuously providing value to our clients, we believe we continue to win market share from our competitors. We continue to believe property will be a strong driver of growth for Ryan's specialty in the quarters ahead. Even as we lapped last year's excellent quarter, our casualty practice had a fantastic quarter. More broadly, the market has seen an increasing number of casualty classes face higher loss costs, notably an acceleration of social inflation marked by increased frequency and more prolonged cases. higher settlements, judgments, and nuclear verdicts amplified by litigation finance, a protracted impact from recent reserve charges on the 2015 to 2019 accident years, as well as rising uncertainty in reserve adequacy of more recent years, and the continued pullback in risk appetite from the admitted market in certain ENS lines like construction, This unpredictability requires specific industry and product level knowledge. Thanks to our world-class technical expertise and deep bench, we are perfectly positioned to execute and deliver value for our clients. We are confident that Casualty will be a strong contributor to our 2024 performance. Overall, our wholesale brokerage specialty team remains committed to delivering innovative strategies and products to meet the ever-changing needs of our clients. Now turning to our delegated authority specialties, which include both binding and underwriting management, our binding authority specialty had an excellent quarter. Through our high-caliber talent and new proprietary products, we offer a seamless experience for our clients who have small but tough-to-place commercial P&C risks. We continue to believe the consolidation of panels and binding authority remains a long-term growth opportunity, and we are well positioned to capitalize. Our underwriting management specialty also performed well in the quarter, led by property and casualty and meaningful contributions from our recent acquisitions. As Pat noted, we are excited to officially onboard Castell to the Ryan Specialty family which adds to our top decile talent, expands our international footprint, makes us stronger in the UK and Europe, and positions us well to accelerate our international expansion. Turning to price, while we continue to experience various micro-cycles across insurance lines, more broadly, we see two important trends. Property is seeing a period of pricing stabilization after years of large increases. And casualty, due to the trends mentioned earlier, is seeing an acceleration in pricing across an increasing number of classes. Across both of these major industry classes, there remains heightened uncertainty in the loss environment. This is driving more risks into the ENS marketplace, as it offers significantly more freedom of rate and form, and the ability for insurers and underwriters to adjust pricing and the terms and conditions of coverage more quickly. As we've noted consistently in any cycle, as certain lines are perceived to reach pricing adequacy, admitted markets tend to step back in on certain placements. However, this is still not playing out, and the standard market has not meaningfully impacted rate or flow in the aggregate. We are well positioned to assist all our trading partners navigate and ever-changing insurance landscape. We continue to expect the flow of business into the non-admitted market to be a significant driver of Ryan Specialty's growth, more so than rate. With that, I will now turn the call over to our Chief Financial Officer, Jeremiah Bickham, who will give you more detail on the financial results of our first quarter. Thank you.

Thank you, Tim. Before getting into our results for the quarter, I want to discuss a change highlighted in our press release. Beginning this quarter, the company is modifying its method of calculating organic revenue growth. This revised calculation methodology is an improved representation of our core business performance, as it now completely removes fiduciary investment income and contingent commissions from the current and prior year period. Whereas before, we only excluded the change in fiduciary income and contingent commissions between periods. Of course, the new calculation continues to exclude the impact of M&A and FX from the current year. This formulation is a more widely used calculation methodology, and as a result, we are providing additional revenue disclosure that we believe investors will find very useful. Now, turning to the quarter. In Q1, we grew total revenue 20.6% period over period to $552 million. fueled by another very strong quarter of organic revenue growth at 13.7%, and contributions from M&A, which added nearly seven percentage points to our top line. Growth was once again driven by very strong renewal retention, ongoing tailwinds in much of the E&S market, and our ability to win substantial amounts of new business. Adjusted EBITDA for the first quarter grew 25.8% period over period to 157 million. Adjusted EBITDA margin improved 120 basis points to 28.5%, driven by another strong quarter of revenue growth, partial savings from Accelerate 2025, and underlying margin improvement in the business. Adjusted diluted EPS grew 34.6% to 35 cents per share. In the quarter, we returned capital to shareholders through our first dividend, including both a special and a regular quarterly dividend. Earlier today, our board declared a regular quarterly dividend of 11 cents, payable later this month. Turning to our Accelerate 2025 program, we had approximately 29 million in charges for the quarter, bringing our total to date to 77 million. As Pat noted, we found additional opportunities to drive more efficiencies and greater savings. We now expect cumulative special charges for the program of approximately 110 million through the end of 2024, and expect annual savings of approximately 60 million in 2025. We expect approximately half of these savings will be realized in 2024, with the majority of those savings falling to our bottom line. Those savings will be paired with an underlying margin expansion in our business that we expect in most years, including 2024. Based on our current forecast, we expect to record gap interest expense which is net of interest income on our operating funds, of approximately $32 million in Q2 and $123 million in 2024. Our adjusted effective tax rate was 26.1% for the quarter. Based on the current environment, we expect a similar tax rate for the remainder of 2024. Now turning to guidance. Under the legacy method for calculating organic revenue growth, we are maintaining our full-year 2024 guidance for organic revenue growth. Now, adjusting solely for the modified methodology, which we will be reporting under going forward, our revised guidance for the full year 2024 is now between 12.5 and 14.0%. In addition, we are maintaining our adjusted EBITDAQ margin guidance of 31.0 and 31.5%. In summary, we are pleased with our very strong first quarter performance. as we grew market share in several of our businesses, invested in talent, products, and technology, all while expanding margin. Moving forward, we will continue to organically invest in our business to support sustainable and profitable growth. We will continue to execute on our disciplined M&A strategy with high-quality acquisitions. And we will maintain our strong balance sheet while returning excess cash, all of which should create long-term, sustainable value for shareholders. Our dynamic and differentiated business model continues to position us well to serve our clients and deliver the innovative solutions that our clients have come to expect as a hallmark of Ryan's specialty. With that, we thank you for your time and would like to open up the call for Q&A. Operator?

Thank you. At this time, we will be conducting. We'll be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. If you wish to remove your question from the queue, please press star 2. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is from Elise Greenspan with Wells Fargo. Please proceed with your question.

Hi, thanks. Good evening. You know, my first question, just, I guess, you know, your organic growth view, right, it sounds like it's similar, you know, to last quarter minus, you know, the accounting change that you highlighted. You know, over the past couple months, we've seen, you know, some volatility within, you know, some stamping data that comes out from some of the largest ENS states, you know, went down in March, and then we saw some growth in In April, can you just help us triangulate what we see within the stamping data and what that means for the overall strength of the ENS market?

Sure, Elise. We fielded several questions about the monthly stamping office numbers in prior quarters, and the stamping office data is very helpful over a full calendar year, and the flow remains very strong, as we can see. But on a month or even a quarter, it could be misleading and have timing issues. And that's really what we saw here. Our growth trends through the stamping office data are better measured over a full year. But again, they remain very strong double-digit growth flow.

Thanks. And then my second question, you guys raised the savings program, right, and also raised the amount that you expect to see this year. But there wasn't a change in to the margin guide. So can you, you know, is it just that there's some offsets relative to the guidance, or you're just, and I know there's obviously a range around margin, and that could be it, too.

No, hi, Elise. Fair question. So the 10 million of additional saves from Accelerate, remember that only about half of them, like the rest of the saves from the program, are going to come through this year. And we've said the majority, but not all will fall to the bottom line. And Also, I mean, I'm sure you know that there's the possibility of fewer interest rates cuts this year, too, which would present a benefit to margin as well. These are just a few variables at play, though, and while they're positive, there's still a long way to go in the year, and what we think that both of these two variables represent is just a higher likelihood that we hit the high end of the range on our margin guide.

Okay, and then you guys seem pretty positive on the casualty market, right, that property is stabilizing. Is there anything we should be paying attention to just in terms of your mix and what quarters, I guess, of the remaining three could see higher versus maybe slightly lower organic growth? I know I think Q2 and Q4 are heavier from a property perspective, but anything that you would highlight in terms of the cadence of growth in the back three quarters?

No, nothing that stands out, Elise. Casualty, our casualty practice had a fantastic quarter. We're seeing an acceleration in pricing across an increasing number of classes. Higher loss trends are really driving pricing. We can see a significant increase in flow into the channel in some of the classes we've talked about before, transportation, habitational. And in property, we've mentioned before, It continues to be a very strong driver for us in 24. However, we're seeing some pricing stabilization after years of large increases. But the data is mixed because so much of it is slanted towards admitted standard lines property business. What we're seeing in the non-admitted market is more volatility, more difficult risks being layered. We see growth opportunities. throughout the market. As you know, it's a wind buying season in the second quarter, and we're very excited about that. We see it as a growth opportunity this year.

And Elise, I want to add to that and try to be helpful. There's seasonality to our business. So we've said Q2 is our biggest in terms of dollars, but there's not seasonality, predictable seasonality anyway, to our organic growth. And if you look at any two quarters and you infer a trend from that, you're just as likely to get a wrong answer as you are a right answer. So please don't make the mistake of inferring a trend just because one quarter follows higher or lower than the other. That's why we give guidance in the first place is to give people the best possible view of how the year will turn out versus an individual quarter.

Thank you.

Our next question is from Mike Zaremski with BMO Capital Markets.

Thanks. Good afternoon. I was kind of hoping being later in the queue because we don't have a lot of time to figure out the new improved organic guide in a good way. So under the 12.5 The organic guide used to be 12 to 13.5 last quarter. What would it have been under the new definition? The new definition is 12.5 to 14. The old guide range was 12 to 13.5.

And the reason we changed it is because our expectation is that just changing the calculation methodology could improve organic by about 50 basis points this year. So we're trying to be transparent and really just give you an apples to apples guide range. We're definitely more confident, even more confident than we were the last time we spoke in our ability to deliver in this guide range, but we're just reiterating the guide range on an apples to apples basis. Oh, okay. So maybe I'm on.

But if we just went back to the last quarter when you gave your original 12 to 13.5, what would have been under your new definition? Or am I not thinking about it correctly? Oh, no.

If we had made the change last quarter, we would have come out with an annual guide range of 12.5 to 14.

Okay, just make, so 50 BIPs is what, okay, just want to.

Yeah, it's expected to be worth 50 BIPs this year. And it's more pronounced in, the difference is more pronounced in Q1 because Q1 is typically when there's actually more profit commissions that hit.

Okay, bearing with me on that. Okay, my follow-up is, you know, if we look at where the business mix is heading, and I know you don't, break out organic by the three business lines, but it's, you know, underwriting management and bonding authorities are, you know, growing disproportionately, you know, whereas, you know, obviously wholesale is still growing at a very healthy rate. But anything incremental you'd want to add? I know you've given us a lot of color about these segments in the past, but anything changing, anything incremental that you can kind of I feel like us and maybe Southside and maybe some investors, we focus a little too much on the largest segments. Anything more you want to add on kind of what's driving this and maybe other seasonality patterns too? Thanks.

Well, I'll give some color, Mike, on the numbers you're probably looking at, like a 30-plus percent in underwriting management. Remember, that's total revenue growth. And there's a significant impact this quarter. I mean, the growth numbers from – Both the delegated authority businesses were terrific, but it's even more gaudy in underwriting management because of M&A last year. That's where the benefits business is being housed until it's material enough to be broken out on its own. So if that's the number you're reacting to, that's a big part of the story. But longer-term growth prospects, Miles can give you a much more fulsome color on that.

Well, look, we appreciate the question. So I think at the heart of it, yes, underwriting is definitely contributing to the double-digit organic trajectory. I think we highlighted each quarter a lot of the ingredients that we delivered on last year. And structurally, they're all in place to continue into this year. Last year, we brought several new MGUs to life. We've already launched one in Q1 of this year. Last year, we launched several tangential lines to existing MGUs, and now we're seeing the benefit of that coming into the earnings statement as organic revenue. And then lastly, we're able to include our carrier capital under management with the greater majority of our partners last year, and that was through incremental lines of business as well as increased capital being deployed And so again, those increases of capital under management we're seeing flow into organic this year. So that's specific to the underwriting line. And I'll let Tim comment on binding.

Our binding authority had a tremendous first quarter. We're seeing just great expansion and market share being taken there. We're capitalizing on on the consolidation of the use of binding authority intermediaries by the retailers. We're winning a lot of RFPs and the outlook for 24 looks fantastic.

Thank you.

Our next question is from Rob Cox with Goldman Sachs.

Hey, thanks. Just in regards to you know, organic growth pacing and how to think about it for the balance of the year. I know there's a lot of property business next quarter and it seems like property is still strong, but there's also a lot of property cat. And I think that's an area where we've heard there's some more meaningful price deceleration there. So I'm just curious if you think that's a headwind next quarter, if you could give any color on sort of the pacing of organic growth throughout the remainder of the year.

We don't see it as a headwind. We see the pricing stabilization. We're not seeing dramatic cuts at all. We're not seeing a shift in the migration of the non-admitted business. We're seeing a continued heavy flow. into the channel. We're seeing a little bit more competition in London, but again, the flow remains very strong, and we're optimistic to have a great year in property.

Yeah, and Rob, building on the response that I chimed in with to Elise's question, you know, growth for the year doesn't follow a straight line. I'm sorry we can't be more helpful, but there's nothing significant in any of the quarters this year that's worth calling out to guide you to something, to a big shift. Like Tim said, the growth we expect is really balanced across property and casualty this year.

Okay, thanks. That's really helpful. And then maybe just as a follow-up, I'm just curious on some of the you know, specific areas, you guys have called it out in the past, like the DNO headwinds, M&A headwinds, how did those shape up in the quarter? And I was also curious on, you know, the construction projects, which I think you guys have previously called out, seems like it might have been a material tailwind for some of your peers. Did you also see that in the quarter?

Yeah, we've seen the construction market have a real strong rebound. Our project opportunities increased. Our quote to bind ratios increased. We're capturing a lot more construction business across the board. Residential construction in particular. Infrastructure projects picked up. And that lag time from quote to bind has has decreased, so we're very optimistic to have a great year in construction. D&O would be where the tailwinds have slowed. I think we're through the pain phase. We see some moderation there on the tougher D&O. Our E&O book continues to grow in areas like healthcare and social service. We're getting opportunities things like architect and engineers E&O, lawyers E&O. The headwinds on that pro-executive book have clearly slowed, and we see growth opportunities in 24. And then Pat could address the M&A.

Yeah, the M&A is strong, as I said in my opening comments, a very robust pipeline. There's no seasonality to the M&A calendar. We'll often have periods of time that are quiet, and then periods where we announce multiple deals in a short period. But to answer your question, the outlook is very strong. We've been engaged in several discussions. We've encountered more opportunities, made pretty encouraging progress on most of the open dialogues. The flow of deals are all high strategic value deals. that we're working on. And the theme of sellers preferring Ryan's specialty as a destination of choice is very exciting for us because historically, well over half of the short of 60 acquisitions that we've done, we were the destination of choice. And in the discussions that we're engaged in, that's being sustained.

Robin, this is Miles. I'll just jump in. On transactional liability as it pertains to like a rep and warranty and tax practice, so there are tailwinds. So global M&A deal volumes are ticking back up. We believe our transactional liability practice is materially outpacing the industry. I think everybody will recall we highlighted several times during 2023 that we had been investing heavily in transactional liability talent. and geographic reach as the market was contracting and all those decisions are bearing fruit and we expect to be great contributors to 2024. Thanks for the color.

As a reminder, to ask a question, please press star 1. Our next question is from Meyer Shields with KBW.

Thanks so much and good afternoon. Tim, I was hoping you could go maybe one level deeper in terms of the property business that's still migrating to ENS. Because I guess the mental model I had was that last year you had primary companies just dealing with much higher reinsurance attachment points. So the cat-exposed business kind of moved over. And I'm wondering, maybe overly simplistically, what's left to go to ENS now?

We see opportunities to get market share and just head-to-head competition. That's always a big factor. As you know, there's competition on all this business. We don't see any sign of migration of the business going back. So there's still very strong flow of opportunities that move around in the marketplace. The only real competition in terms of taking business away from the US E&S market, Meyer, would be London. And that's hardly measurable, but we did notice it and we did mention it in our last call. But in terms of opportunities, we see a very strong flow coming our way. There's no standard carrier making an impact on taking E&S business back. We just don't see it. In fact, we're having to layer and have more shared and layered opportunities on these towers. It's still very, very robust out there.

Okay, fantastic. That's very helpful. I think this is probably for Jeremiah. When we look at the adjusted ratios, so Compendent on one hand and G&A on the other, so Compendent went down year over year and G&A went up. Should we expect that trend to accelerate or decelerate as we start seeing the $60 million of savings start to hit the bottom line this year and next year?

So we are going to see additional scaling in comp for sure. And over time, we'll see scaling in G&A too. But this quarter in particular, there were some timing issues related to some of our planned spend, even on like the T&E side events. change between quarters year over year and we also have some new revenue lines that are coming on that we will incur third-party expenses to on some of the upfront work so overall I would say you're going to see trending in the you're going to see scaling in both but it's probably going to come a little it's going to be a little bit more pronounced and be quicker on the comp side call it over the next seven quarters.

Okay, perfect. Thank you so much.

Yep.

Our next question is from Allison Jacobowitz with UBS.

Hi. I was just wondering, you touched on what you're seeing, you know, that you're seeing great opportunities internationally. I was wondering if you could dive a little deeper into that and where are you most focused what you're seeing there and maybe highlight some of the dramatic differences you might be seeing there, if there are any, versus domestic.

We appreciate that. I want to highlight with the Castell acquisition, we benefited from several levers there. First, it brought 135 like-minded individuals based in the UK and the Benelux region. all like-minded builders, entrepreneurs, great track record of underwriting profitability and building businesses. It brought 10 new lines to the company, and it actually allowed us to double down in a few capabilities that we believe deeply in, renewables, SME rep and warranty. But on top of those facilities, It also brought us some local leadership in those jurisdictions that are going to be great resources in identifying talent, essentially getting city to city. It's not going to surprise you that a lot of distributors want to deal with a local presence, and it's going to take an on-the-ground approach to meet those folks. This team will be a force multiplier in helping us identify M&A opportunities, as well as increase the speed to market of international startups.

I'd like to add that we see international, particularly Europe and the UK, as not fertile ground for a wholesale broking, but very fertile ground for delegated authority There's been a lot of consolidation of carriers in those countries. There are great companies in each one of the various European countries, including the UK, but there are far fewer. And it allows an opportunity for delegated authority for us to bring in new capital providers or work with some of the existing over there with innovative ideas on product. innovative ideas on servicing different parts of the insurance industry. So as we look at international, particularly Europe and UK, it's really a delegated authority. But we think it's quite wide open. It requires, as Miles said, attracting the right talent. And that's why the Castell acquisition was so exciting, plus a great underwriting record. There's a lot of talent that we We know over there from other experiences, and we believe that we can do de novos and possibly some M&A opportunities.

Thank you very much.

Once again, if you would like to ask a question, please press star, then 1. Ladies and gentlemen, there are no further questions at this time, and I will turn the call back to Pat Ryan for closing remarks.

Well, thank you for your very good questions and for your continued interest and support of our program. We look forward to speaking with you again soon, and have a good evening. Thank you.

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.