Trisura Group Ltd.

Good morning. Welcome to Trishura's Group Limited's fourth quarter and full year 2022 earnings conference call. On the call today are David Clare, Chief Executive Officer, and David Scotland, Chief Financial Officer. David Clare will begin by providing a business and strategic update, followed by David Scotland, who will discuss financial results for the quarter and year. Following formal comments, lines will be open for analyst questions. I'd like to remind participants that in today's comments, including in responding to questions and in discussing new initiatives related to financial and operating performance, forward-looking statements may be made, including forward-looking statements within the meaning applicable of Canadian and U.S. securities law. These statements reflect predictions of future events and trends and do not relate to historic events. They're subject to known and unknown risk, and future events and results may differ materially from such statements. For further information on these risks and their potential impacts, please see Shura's filings with security regulators. Thank you. I'll now turn the call over to David Clare.

Thank you, Operator. Good morning, everyone, and welcome. Despite strong earnings and operating performance, Results were impacted by a one-time write-down of reinsurance recoverables in our U.S.-fronted business in the fourth quarter. Notwithstanding the impact of this write-down, Tresure is a larger, more diversified entity than at any stage in our history. We believe firmly that this write-down is an isolated event, and we remain confident in the rest of the portfolio and in our ability to scale the platform profitably in the long term. Our specialty P&C operations delivered strong performance in 2022, with $2.4 billion in gross premiums written, a 56% increase following growth from 2019 to 2021. In the context of significant top line growth, expansion of our capital base in uncertain operating environments, we are proud to have generated a 20% adjusted return on equity, although I acknowledge a lower 6% reported return on equity taking into account non-recurring items. The write-down in the fourth quarter was related to a disagreement over obligations under a quota share reinsurance contract. The program was unique in our portfolio. It included captive participation, which means a reinsurer associated with the MGA, and required catastrophe reinsurance. This year, the prices of catastrophe reinsurance increased dramatically, which reduced the amount of collateral available and contributed to the write-down. It is important to note that the driver of the write-down was not claims experience, but these higher catastrophe costs. This program had a multi-year history with Trishura when it had performed as expected. However, a unique mix of factors drove the experience this year. The reinsurer does not participate on any other programs, and the program is now in runoff. We are confident in our remaining reinsurance recoverables, with 83% represented by rated reinsurers and holding collateral for unrated reinsurers. This experience has informed the infrastructure development that was already underway at Trishura. We introduced a dedicated in-house chief risk officer in the middle of 2022 who oversees an actuarial team and a group monitoring collateral. This event has been highlighted to these groups, and although we have reviewed our remaining portfolio and believe that there are no comparable situations, it is critical to acknowledge these experiences as we continue to grow. It is important to note that although this issue caused a delay in our financial statements, Treasurer's own team highlighted the situation to our auditors, who reviewed the situation alongside us. Unfortunately, at this stage, we can't share many more details about the situation as we explore our options with Council. What I would reiterate is the unique and isolated nature of this event. Results across the rest of the operations were strong, and particularly so in Canada, with 30% premium growth in the year, supported by profitable underwriting, and an 82% combined ratio. Momentum was sustained in the U.S. as premiums again hit an annual record, increased 70% over 2021. In Canada, all three business lines contributed to growth, with fronting to standout, growing 61% compared to 2021. corporate insurance continues to benefit from strong market conditions, growth in programs, and momentum with distribution partners, producing 33% growth over the prior period. Surety growth of 22% in the year was strong, as the business benefits from tailwinds and established lines, expansion of a U.S. practice, and a new home warranty segment began to mature. We also saw the benefits of a recent sovereign acquisition and the growth of Surety in Q4. Importantly, Loss ratio of 17% for the year, improved versus 21% in the prior period, driven by strong experience in corporate insurance and risk solutions. Combined ratio for the year was 82%, comparable to the 81% in 2021. The slight increase was driven by an increase in expense ratio, given by a shift in the business mix towards fronting, and mitigated by an improvement in our loss ratio. Despite a higher combined ratio, net underwriting income actually increased by 36% in the year, driven by growth in the business. With growing investment income, the Canadian platform maintained a strong 30% return on equity. Our Canadian entity now generates attractive fee-based earnings to complement a heritage of profitable underwriting. We have made important progress in our U.S. surety platform, adding experienced team members in Connecticut, Denver, Philadelphia, and Chicago. We are excited at the potential of this platform, expanding a product line where we have demonstrated expertise in a geography with promising infrastructure tailwinds. For the year, we wrote $17 million in surety premiums from our U.S. platform. U.S. fronting grew 70% over 2021, with maturation of existing programs and new relationships driving top line. U.S. fronting generated $1.7 billion in gross premiums written and $67 million in fronting fees. We recorded $40 million of deferred fee income at the end of the year, indicative of future fees to be earned. I apologize. We recorded $35 million in deferred fee income at the end of the year, indicative of future fees to be earned. Loss ratio in the year decreased as a result of comparably higher weather events in the prior period. Fronting operational ratio increased as a result of the write-down in the fourth quarter and the cost of reinsurance of non-scaled programs. Despite the market driving opportunities to excess and surplus lines, we wrote $165 million in admitted premiums in the year, mitigated by slower approvals by state regulators and the longer ramp times of admitted programs. I have already received questions about our premiums to capital ratio, which has been quoted at about seven times. In fact, in the fourth quarter, we injected $25 million of surplus notes into the entity that is effectively equity and takes our account or takes our target ratio closer to our target range. Interest and dividend income increased significantly in the year and by over 100% in the quarter, the result of growth and higher yields impact in our portfolio. We continue to allocate conservatively, acknowledging an uncertain environment as central banks navigate inflation and a tight labor market. We are steadfast in our approach on achieving profitable growth in specialty P&C markets. We continue to expand our reach in Canada and the U.S., supported by a history of disciplined underwriting, growing investment returns, and newly enhanced risk management infrastructure. The hardening market in certain corporate lines sustained through 2022, And although we don't anticipate surplus capacity to drive a soft market in the near term, we do not expect the level of rate increases demonstrated in 2022 to be repeated. The majority of our growth was achieved through enhanced distribution relationships and new volume. And as such, we expect to navigate any change in rate or pricing smoothly. With the continued maturation of fronting, development of a U.S. surety strategy, and ongoing expansion of our core lines, we have ample and attractive opportunities to grow. Our platforms continue to act as complementary sources of revenue for one another, and distribution partners have increasingly recognized our broader offering. As we gain market share in one geography, our presence and capabilities elsewhere offer opportunities to generate new business. As we look to 2023, environmental, social, and governance considerations are front of mind, an important part of Trishura's development. In the last year, we enhanced our governance framework, welcoming a new director to the board. We anticipate further progress here in the near future. We continue our focus on better communicating ESG initiatives, identifying opportunities for enhancement, and working diligently to improve. In closing, despite an impactful experience in the fourth quarter, we are optimistic for the years ahead. The operational trends that we've been excited about for years are intact and demonstrating progress. We are keen to build on the strengths of the organization and learn through our evolution. Tresura maintains financial flexibility through a 13% debt-to-capital ratio and capital available at the holding companies. I would like to again thank our employees, partners, and shareholders for their support. As we continue to grow and mature, we look forward to demonstrating progress on our way to building a North American specialty insurance provider of scale. With that, I would like to turn it over to Dave Scotland for a more detailed review of financial results.

Thanks, David. I'll now provide a brief walkthrough of some financial results for the quarter. First written premium was $664 million for the quarter and $2.4 billion for the year, which reflects growth of 37% and 56% respectively. Net claims expense in the quarter and full year were greater than the prior year, primarily as a result of growth in the business. We also experienced elevated claims expense in the fourth quarter of 2021 and a claims recovery for the full year of 2021 associated with our life annuity reserves, which have since been novated and which increased claims expense in the quarter and reduced claims expense for the full year of 2021, affecting the comparatives. Net commission expense increased by 43% in the quarter and 65% for the full year, reflecting growth in the business in both Canada and the U.S. operations, as well as a shift in this business mix towards certain lines of higher commissions. In the quarter, there was a write-down of reinsurance recoverables of $81.5 million as a result of a determination that these recoverables were no longer collectible. This had a significant impact on net income for the quarter and full year. Operating expense grew by 29% in the quarter and 31% for the full year, reflecting growth in both the Canadian and U.S. operations. Net underwriting income in Canada for Q4 and the full year were both greater than the prior year as a result of growth in the business and consistently strong underwriting. that underwriting income in the U.S. for Q4 and the full year was lower than the prior year as a result of the write-down. Without the impact of the write-down, that underwriting income was greater than the prior year as a result of growth in the business, but mitigated by certain reinsurance purchases during the quarter. In Q4 2022, the combined ratio in Canada was 84%, and for the full year, it was 82%. In Q4 2022, the fronting operational ratio in the U.S. was over 100% as a result of the write-down. Without the impact of the write-down, it was 82% for the quarter and 81% for the full year. Net investment income was greater in Q4 and for the full year of 2022 than 2021 as a result of an increase in interest and dividend income. The increase was primarily related to an increase in the size of the investment portfolio, but also benefited from higher yields. Net investment income for Q4 2021 was positively impacted as a result of the movement in investments supporting life annuity reserves, which was offset by the corresponding movement in claims expense in that quarter. But the full year 2021 movement in the investment supporting the life annuity reserves was negative. Net gains were $4.1 million in the quarter, primarily as a result of real-life gains on investments disposed of during the period, as well as movement on swap agreements used to hedge share-based compensation. Net gains were $8.8 million for the year, primarily as a result of real-life gains on investments disposed of during the year and foreign exchange movements. Income tax expense in Q4 was in a recovery position as a result of the loss in the U.S. operations in the quarter, and for the full year 2022, income tax expense was lower than the prior year as a result of the lower net income before tax. Net income for the group was a loss of $40 million for the quarter and a gain of $25 million for the full year. Without the impact of the write-down, net income would have been $23 million for the quarter and $83 million for the full year, which would have been greater than 2021 as a result of growth in the business and the strong underwriting results. Diluted earnings per share was a loss of $0.86 in Q4 2022 and a gain of $0.56 a share for the full year, which are lower than the prior year as a result of the write-down. Consolidated ROE on a rolling 12-month basis was 5.9% at the end of 2022, which was lower than the rolling 12-month basis of the prior year. However, without the impact of the write-down, ROE would have been 20%, which was greater than the prior year. Assets year-to-date grew by $1.3 billion. Passion period increased as a result of the equity offering. Investments also increased as a result of the equity offering, though were offset by unrealized losses incurred in the year. Premiums and accounts receivable in other assets has grown as a result of growth in GPW, particularly in the U.S. Recoverables from reinsurers have increased, primarily as a result of growth in the U.S. front-end business, as well as certain front-end programs in Canada, where claims liabilities are largely offset by expected recoveries from the reinsurers to whom we see the business. Liabilities in the year to date grew by $1.2 billion, primarily as a result of growth in unearned premiums and unpaid claims and loss adjustment expenses, which have grown as a result of growth in both Canada and the U.S. As discussed, growth in these balances is largely offset by growth in reinsurance recoverables. Accounts payable accrued and other liabilities have decreased in the period as a result of the settlement of assets from the novation in 2021, as well as a number of large payments in the year. Equity is greater than the prior year end. than the prior year end, reflecting the impact of the equity offering and growth in net income, offset by a reduction in other comprehensive income. Other comprehensive income decreased in 2022, primarily as a result of unrealized losses on the bond portfolio due to rising interest rates, though it was mitigated by strengthening of the US dollar, which drove higher Canadian dollar valuations of the capital we hold outside of Canada. Book value per share was 10.53. at December 31st, 2022, and is greater than December 31st, 2021, as a result of the equity offering, as well as profit generated year to date, and mitigated by unrealized losses in the investor portfolio in the quarter. Sorry, in the year. As of December 31st, 2022, debt to capital was 13.4%, which was lower than December 31st, 2021, as a result of the equity offering. The company remains well capitalized, and we expect to have sufficient capital to meet our regulatory capital requirements.

David, I'll now turn things back over to you. Thanks, David. Operator, we take questions now.

Thank you. Ladies and gentlemen, we'll now conduct the question and answer session. If you'd like to ask a question, please press star, fold by one on your telephone keypad, If you'd like to withdraw your question, please press star, followed by two. If you're using a speakerphone, please lift the handset before pressing any keys. And also, we ask that you limit yourself to one question, followed by one follow-up. If you'd like to ask further questions, you're free to re-queue for questions. And one moment for your first question. And that comes from Nick Preeve from CIBC Capital Markets. Nick, please go ahead.

Okay, thanks. As you think through the impact of higher reinsurance costs more broadly in the U.S. entity, is this something that could put underwriting margins at risk for other programs in the portfolio where there could be a risk of non-renewal, even in the case of larger counterparties with rated platforms?

Hey, Nick. Thanks for the question. We've talked about this a little bit in the past and seen the impact of some of these higher reinsurance rates. in Q3 and Q4 as we navigated this environment. I think generally what you're talking about would pertain to a small part of the market. So parts of the market that would be struggling to find reinsurance at this stage would be mostly cat-exposed programs, so southeast wind-exposed programs or wildfire-exposed programs in California. We don't have a lot of exposure to those programs, and in fact, Our property programs that we do participate in have been renewed so far this year, but that is a risk as the environment continues to navigate this tougher reinsurance landscape. For us, certainly we're not expecting our property programs to grow significantly this year. This reinsurance market and sort of our caution in this space has changed a little bit the expectation around those property programs, but we don't see a broader systemic issue in the in the ability to navigate capacity for those entities.

Does this experience change your strategy or your approach with respect to the way that you engage with or select reinsurance counterparties in the U.S.?

I think we've certainly made a lot of observations through this process, and we've got a pretty defined appetite of who our counterparties are and will be. I think there's going to be some observations we make through this process about the relative size of certain types of counterparties that we'll take on our programs. But I would highlight outside of this experience, which I don't want to shy away from was impactful, we've got a large amount of partners who have been very strong, good partners to us across the entity, and we would continue to believe that they'll be that case. So certainly I don't want to imply that we're not making observations and taking notes about this experience, but we're feeling very good about the remainder of our partners across our portfolio.

Okay, those are my two. Thank you.

Your next question comes from Jeff Benwick from Cormark Securities. Jeff, please go ahead.

Hi, good morning, everyone. Hey, Jeff. So, David, I just wanted to touch on the investment portfolio. I mean, dividend and interest income obviously are taking a nice step up here just on growth and higher yields. What's the outlook going forward from here? There's some thinking on maybe rebalancing a little bit as well. I notice you've got about a third of your assets that are in cash and short-term. Does the mix change at all? I think you've been adding a little bit of alternative product as well. How should we think about that and in the context of the dividend and interest income?

I appreciate it, Jeff. It's a good question. We were happy to see the step up in investment income in the quarter. Investment income rose about 102% in Q4. As you know, that's driven by a combination of factors. So we've been deploying new capital that we've raised. We've been deploying new capital as a result of growth, and that's been deployed into a relatively healthy market. I think going forward, the pace of that increase quarter over quarter and sequentially is will likely slow down, but you still do have a healthy amount of reinvestment opportunities in the market. As you've noted, in the past, we have changed a little bit our posture, including things like alternatives, including a broader mix of portfolio assets. I will say, interestingly, in this environment, we found ourselves more often deploying into investment grade bonds. And that's a healthy evolution of our portfolio because essentially what's happened is we've high graded our portfolio and also benefited from higher yields at the same time. So when we think about the quality of our balance sheet, when we think about the segmentation of our portfolio, we've never had a higher quality portfolio in terms of our allocation to investment grade bonds. And we've also never had a higher level of interest in dividend income. So that combination is powerful. As portfolio continues to mature, as we turn over the maturing bonds in our portfolio, we would continue to expect to allocate those to higher yielding opportunities, which should be a positive lift for us going forward.

Okay, great. Thank you. I'll pass it along.

Your next question comes from Stephen Boland from Raymond James. Stephen, please go ahead.

Yeah, if I just follow up with that on the fixed income credit quality, you know, you're still at, you know, when I look at your supplement, 9% double B and lower. I mean, is that a number that should substantially come down, you think, over the next, you know, 6 to 12 months? Like, is there a need to be in, you know, non-investment grade bonds at all at this point with yields so strong on the investment grade side?

Yeah, it's important to note, Stephen, that that 9% you're quoting is as a percentage of our fixed income portfolio, not as a percentage of our entire portfolio. So the actual allocation there is quite a bit lower. What I would say is we have not deployed into new high yield securities in recent past. So I think your observation is absolutely correct. As we continue to deploy in the portfolio, there are better opportunities on a risk adjusted basis right now in investment grade bonds. then we would be in high yield. And I would not expect us to be increasing those allocations in that high yield section or even maintaining them as the portfolio grows. So I think it's a good point to raise. We haven't deployed incremental capacity into either high yield bonds or equity in recent past. All of this new deployment has been going into relatively short duration investment grade bonds, which has had a very healthy impact on the portfolio. We're positioned pretty defensively today in the investment portfolio. As you know, it's a pretty volatile market. And with the yield that we can get right now on relatively short duration bonds, we think that's a safer place to sit.

Okay. Okay. And then maybe the second question, if I can go back to the premiums to capital, you know, obviously you mentioned you've dumped another $25 million into the U.S. sub, but Thinking back, you raised over $140 million of equity on a certain growth plan that was evident last year. You've written off $80 million. Despite the fact that you put $25 million in, is there going to be a need or does this impact your growth plan that you had for the next couple of years in terms of what's going to happen in the U.S.? ?

Yeah, at this stage, we don't think there's a change in the near term to our growth plan. That 25 that you're referencing was specifically a surplus note. We also put another 25 in the quarter in as equity. So there's $50 million dropped into the entity in Q4. That effectively takes our premiums to capital ratio down to our target range. And what's going to be a benefit this year in that U.S. entity is obviously those reinvested earnings come in and support that vehicle's growth trajectory on a six times leverage basis. So every dollar earning that you have in the U.S. produces about six times or six dollars of premium capacity. So we think that given the profitability of the entity, given the trajectory of the vehicle, you've got a lot of opportunity to fund that internally. Beyond that, we've obviously got a relatively healthy debt-to-capital ratio, and we've got a bit of surplus capital still sitting at the holding company. So So there are opportunities to fund this entity internally, both through reinvested earnings as well as capacity available elsewhere.

Okay, that's great.

Your next question comes from Tom McKinnon, or McKinnon, sorry, from BMO Capital Markets. Tom, please go ahead.

Yeah, thanks. Good morning. Just a question with respect to stepping back looking at the fronting model in the U.S., you know, as I understand it, an MGA would originate a program and you would bind it with like a third party reinsurer, like a Swiss Re or a Munich Re. I mean, in some cases here, though, you're having an MGA originate a program and then you go and bind it with a captive reinsurance company that is actually related to the MG&A or spun out of the MG&A. So I'm wondering, what role do you really play in transferring or in binding that contract between an MGA and a captive of the MGA. And what are the margins like on that business versus the ones that you bind with third-party reinsurers? And has this experience that you had with this one program influenced your thinking about dealing with MGA captives going forward?

Yes, so on the economics question, Tom, the economics of these relationships are comparable to traditional reinsurance relationships. The value-add that Tresher brings to any vehicle or any structure that includes either third-party relationships or captive relationships is consistent. So economically, they look very similar. Traditionally, when you have captive participation, so participation by an entity related to the originator of those premiums, it's something that's a positive, right, because you want to see that MGA, that producer, participate in the profitability of its business. And we have other versions of captive participation on other programs, although on a much smaller basis than was on the program that we're referencing on this write-down. So it's not, I don't think, an indictment of a model that includes captive participation, but it does highlight some of the risks of situations where those captive participations get a bit larger.

I mean, in the first example with the third parties, you're bringing two parties together. And in this one, the MGA really has its own captive. So why doesn't the MGA just deal with the captive? And what value do you bring by fronting it between these two related parties?

there's a bunch of there's a bunch of nuance to these situations but at a high level often for an entity to be able to write reinsurance in a certain state or a certain business line they require a certain level of licensing and a certain sometimes a certain level of rating and so those captives are often unrated vehicles and they often don't have licenses in the states that they are looking to operate in and so a fronting vehicle is Both provides a lot of infrastructure, a lot of monitoring, a lot of systems around those programs. But critically, we have balance sheets that are rated and licenses in all the states of the U.S.

And to what extent do you have... Programs with MGA captives that would be in any kind of property-related business going forward. Is this just one of the 69 programs that you have that was the culprit here?

Yeah, we don't have any other material captive participation on property programs. So this was very much a unique situation.

Okay, thanks.

Your next question comes from Jamie Gloin from National Bank Financial. Please go ahead.

Yeah, thanks. Good morning. First question, just want to dig in a little bit more on the lessons learned. What sort of policy changes, what sort of monitoring changes, reporting, What kind of changes or lessons have you learned, or I guess what lessons have you learned and what changes are you expected to implement to avoid this situation recurring?

It's important to note, James, that in the context of this experience, which I don't want to shy away from, this experience is something that has been highlighted at every level of our organization. We've talked a lot about the infrastructure build-out that's already existing in the U.S., and we talked a lot about that Last year we were making investments into that platform. So we do have a lot more people now in the U.S. We do have dedicated risk management groups, dedicated collateral collection groups. All of those processes, all of those systems that were already in place, and in fact working to monitor the other 68 programs that we have that we feel there's no issue with, all of those programs and processes and people are looking at this situation as a real informative one to watch out for signs of a risk going forward. So it's very much a program and a situation that was unique that we don't think is present in other parts of the portfolio, but it's not one that we're shying away from. I think Tresure as an entity has grown a lot in the past five years. We've learned a lot as we've grown, as we've evolved our structure. And this experience is going to be one that certainly we benefit from in discussing and learning about the risks of the business. I don't want to say that in any way this risk process, this infrastructure changes dramatically as a result of this experience. We have a lot of established processes that we continue to invest in, but certainly the learnings of this process highlight some of the areas that can be a risk in this model.

Ladies and gentlemen, as a reminder, if you'd like to ask a question, please press star followed by one. Your next question comes from Marcel McLean from TD Securities. Marcel, please go ahead.

Okay, thanks. Good morning. So, sorry, I had to jump off. So if you've already gone over this, just let me know. I'll go to the transcript after. But just curious, on the U.S. entity, now that this mature program is in runoff, and you have a number of programs still ramping. How should we be thinking about premium growth in the U.S. for 2023?

At this stage, Marcel, we're still feeling confident in achieving growth in the U.S. platform for 2023. There's going to be a bit of an impact as this program rolls off, obviously, but we do have other opportunities that we expect to come on. So I think in the past, We've talked about the U.S. as having kind of high teens levels of growth, maybe low 20s level of growth. We think at this stage that's a fair range to model it for the business, and we'll update you sort of quarter to quarter as we see that evolving.

Okay, that's even with this netted out of the premiums that you're going to be losing from this program.

Yeah, that would be with an assumption of this rolling off. Now, the timing of some of the ramp-ups is obviously going to affect what the ultimate level is, but as a base, that's our starting point for the year.

Okay, thanks. And then secondly, I wanted just the capital. So you're down through $25 million. Just curious, so at the hold call, I know the corporate level can go to sort of negative equity. I'm just curious, what level of capital do you still have at the hold call that could be downstreamed if it's required?

Yeah, so at the end of the year, Marcel, we had probably about $50 million of capital at the holding company. It can be downstream. We've actually already downstream some of that in the first quarter to the entity. So there is capital sitting at the holding company for these initiatives, and some of that's already been sent down to the U.S.

Okay. All right. That's it for me. Thank you.

We have a follow-up question from Jamie Gloin from National Bank Financial. Jamie, please go ahead.

Yeah, thanks. Realized I was on mute there. So wanted to touch on the Canadian platform and not miss out on the still very, very strong growth there. You know, maybe similar to Marcel's question around what you're thinking about for the U.S. business. Can this Canadian business continue to post this rapid growth rate? Maybe separate Frontank from the rest of the platforms in your commentary.

Yeah, I appreciate the question, Jane, because the one item that I think was worth highlighting this quarter is the strength of the Canadian business. From a performance perspective, the Canadian entity had its best year ever. If you look at the growth in the business, the profitability of the business, the execution the team had in expanding their platforms, it was an incredibly strong year. And I would say our assumptions of growth for the Canadian platform are obviously not to produce these levels of growth annually, but we still do feel confident about achieving growth in these lines. And we've talked a little bit about those expectations by business line and insurity. We're thinking that's a low teens level of growth in corporate insurance, sort of high teens level of growth. As you know, fronting is a little bit tougher to predict, but we think that business, again, is kind of between the mid to high teens and low 20s. We're feeling very good about the setup for the Canadian business in 2023. And I think despite the impact of this write-down in Q4, one of the best narratives that we had in the quarter and in the year is the strength of that Canadian franchise. And we're very proud of the team for achieving that this year.

Okay, great. Thank you.

There are no further questions at this time. I'll turn it back to David Clare for closing remarks.

Thank you. I appreciate everyone joining today and would note that to the extent you have further questions, we are always available to connect to address those. Don't hesitate to reach out to us or any of your bank contacts and we'll be happy to expand on anything we've talked about today. Thanks very much, operator, and we'll end the call there.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.