Associated Banc-Corp (ASB) Earnings Call Transcript & Summary

Hi. I'm Matt Kesselhaut, and I cover the large-cap banks at Barclays on Jason Goldberg's team. Next up, we're excited to welcome back Associated Bank. Unfortunately, their flight got canceled last night due to weather, and we're going to attempt to do it virtually. Andy, we see you. From the company, we have Andy Harmening, President and CEO. With that, I'll hand it off to ASB for prepared remarks.

Well, thank you, Matt. Hopefully, everyone can hear me. And it is good to be kind of back. We did a virtual tour of New York City on the way there. We flew halfway there. And they brought it back, brought us back. So kind of flights canceled and I couldn't be there in person. It was 2 years ago at the Barclays Conference that we launched our initial strategic plan and it is going pretty well. I'm going to talk about what that looks like for us. But we believe it will form the foundation of what we want to do next as we head to the end of 2023 and into 2024. Now as excited as I am about the strategic initiatives and what Phase 2 of that will look like. I also think it's important to talk about credit a little bit with the potential risk of a downturn on the horizon, what does Associated Bank look like. And what I would say is we have spent as a company 10 to 15 years derisking the portfolio. It's not a new occurrence. We've gotten largely away from high risk speculative deals. We've moved to high quality low risk dual-rated C&I, and then we have a large prime and super prime consumer portfolio. As a reminder, the majority of our franchise is also located in the Upper Midwest, a less volatile marketplace, not prone to significant increases and decreases in valuation. And then finally, I would touch on commercial real estate. And I would say we are dealing with customers of names that we know. It has not been a new acquisition strategy. We have a concentration in multifamily and industrial. We have roughly 3.5% of our portfolio in office. And in those -- in a little less volatile, risky markets and primarily Class A properties. So getting back to initiatives and quickly going through what that means for us now and going forward, a lot has happened since the fall of 2021. We've had a focus on positive operating leverage, improving our efficiency, closing profitability gaps to our peers, but at the same time, making sure our foundation was on credit and expense management. So the goal has been to establish a pattern of execution, and we have done that, we believe, over the last 2 years and believe that will serve us well into the next phase. But -- what I would highlight in that is we've increased in September of 2021. We've increased our commercial relationship managers 21%. We have brought these folks in from national players, all the national, regional players within our footprint. But the focus has also changed to holistic relationships, balanced scorecards we've added 57% increase last year in new commercial names to the bank. But we've also had a double-digit increase in Treasury Management services. The reason I mentioned that is we knew that we would need to fund both sides of the balance sheet through the start of these initiatives, and that's an important piece. We launch 3 new lending verticals in that time asset-based lending, equipment finance, and auto. Again, the idea is to decrease the reliance on some of the lower-yielding portfolios that we have. To that end, that's allowed us to exit third-party origination on the mortgage side. And to put that in context for our $41 billion asset bank, third-party loan origination in 2022 was a just right at $1 billion in production, and it is the lowest yielding asset. So while the rate of growth has slowed for the company in 2023 we're still forecasting a 6% to 8% full year increase in loan growth. So while we are driving solid growth on the loan side, the question becomes, how are you going to fund it? And the second part of our original plan was exactly focused on how we are going to fund, how we're going to grow deposits, How are we going to get lower cost funding sources. So part of that is the attraction of new relationships, whether that's on the commercial side, but also on the consumer side. And we did have growth on both consumer and business households in the second quarter. The second piece of that is deepening existing relationships. And then because the goal was to attract and deepen, which sounds pretty basic, there are a lot of initiatives that go behind that. So first, I would focus on our digital banking platform. We introduced an entirely new digital banking platform. And since that launch in the fall of '22, we've actually had 9 upgrades to that platform. We've launched an AI-based personal finance insights capability, with debit controls additional products within that -- and as we've done that, being about 10 to 11 months in, we've actually seen the highest mobile banking satisfaction scores we've seen over the last 3 years. This is important because it's the most highly traffic channel that we have. and it's driving down our attrition number. So with digital upgrades in place, then we've launched our mass affluent strategy in 2023, the mass affluent segment strategy is a focus on deposits. And we had hit through July, our annual target number on this, and it's an initiative that we think will serve us well as we go upstream to our wealth strategy. We've seen a double-digit increase in acquisition from the same time prior year, a double-digit decrease in attrition, and record customer satisfaction. So as we close out 2023, probably the most exciting news to me and many of my peers in the regional banking space is that deposit flows have stabilized. We have reaffirmed our growth for the second half of the year in core customer deposits and may then shown that number to be 2%. We have build a culture of execution, and we feel very good about the first part of our strategic plan, but our expectation is that we will launch the second part of that strategic plan at the end of 2023. And then finally, with regards to credit risk management, our credit risk metrics remain benign, even intra-quarter. And then secondly, expense management -- that has been a focus for us since I arrived with the initiatives we launched at the beginning, end of every year going into the next fiscal year, we have cut the spend. And so that we can control our expenses while continue to drive our revenue number. For this year, we've given guidance of 4% to 6% on expenses. But as we clearly saw pressure on earnings, we back that down to 3% to 4% growth for 2023. What I'll end with, Matt, is to say that we are certainly not a static company. And I think in banking right now and over the past decade, it is important that you are changing and evolving with what the markets look like and what is needed for our bank. We have an initial plan, we will build on that. We will not look the same as we look today in 12 months, nor do we look the same today as we did 12 months ago. So sorry that we couldn't be there in person. We tried. We had a long flight to get right back to where we started, but we'd love to open it up to questions that you have.

Thanks, Andy. Clearly, a lot of progress in your initiatives since the initial launch of your strategic plan 2 years ago. What would you point to as the biggest factors for your progress?

Well, it sounds simple, but it's not. And I would say that is we are listening to our colleagues. The first part of our strategic plan, I probably would have 400 to 500 small group sessions. And they told us what we needed to do, be bold, give us a reason of work here, to bank here, build this, consolidate digital. They literally laid out the road map. We listened to our customers. They told us what products they want. We've either launched them or plan to launch them in the near future. Then we listen to the community when we ask how they want us involved. We went out to our advisory board members and top customers and said, what do you want us to invest in. As we've done those things, we've gotten buy-in from our colleagues, and we see that in colleague's surveys. We've gotten buy-in from our customers, and we see that in customer satisfaction. And we've gotten buy-in from the community, and we see that in the commercial business in particular. So -- and then as you execute, I think, success, great success. So we -- it's hard to get too much confidence after what we came through in the second quarter, but we have -- we do have to -- I do have the confidence in our team to come up with initiatives and execute on those initiatives.

Helpful. In your prepared remarks, you touched on that loan pipelines are down. Is that an intentional slowdown on your part, given the current environment? Or is it more of a function of reduced demand?

It's not an intentional slowdown. We -- well, I guess the third-party origination is intentional. We definitely stop that origination. I would say commercial real estate is slowing down on its -- on its own volition. We had interest rate buffers already built in. We had very disciplined underwriting, but that, that market has definitely slowed down. What I would say is -- there is clearly a more cautious approach from the commercial customer out there right now. [ Rate ] impacted that a little bit. We've seen a dip in pipeline for 12 months ago when it's at its peak. And they're really trying to understand mixed messages in the economy. We have seen some early indicators that, that maybe that pipeline is starting too early, application pipeline is starting to grow again. It's too early to call it a trend. There are also some industries that we see that we believe are early indicators of potential increase because what we think happened also is inventories were so high and people work those down at some point, you need to buy again and you need to invest in the business. So definitely a slowdown in lending. Will we see that creep up in the next 90 days, 180 days. There are some indications that it will, but it certainly doesn't look like it did a year ago.

Helpful. We also continue to see and hear stories about banks pulling out of auto lending, but you've continued to grow at a solid clip. Are you finding that there's opportunities there to take market share?

I don't really think of it in terms of taking market share on the auto side. We're a pretty small player. However, it's been a good business for us. We deal in the prime and super prime business. We are a low-risk bank. We have a large portfolio on the mortgage side that is prime, super prime, averaging FICOs above 780, our FICOs on [indiscernible] high, what we see is over the course of the past 3, 6, 12 months. We've been able to expand the margins on the auto business. So we never pulled out. It's a steady business for us. It is a bit of a opportunity as we decrease our lowest-yielding portfolio in TPO to add some on the auto part as we continue to look at investing in our commercial business. So auto has been very good for us. We believe that it has opportunity for us the rest of this year. We just want to make sure that we look at and manage what overall exposure is for the bank.

Helpful. You've announced several enhancements to your digital strategy last fall, but there's still a notion out there that regional banks can't compete against big banks due to scale and other factors. How are you thinking about that?

Well, I'll first say that notion was not quoted by me. I believe we can absolutely compete in. And again, I come back to the simplest hard thing to do, and that is listening to your customers. When they say, I don't like this feature, stop doing it. When they say I do like this feature, build it and put it out there. When you see them get stuck on a page or stop on a page, you might have a problem. So our satisfaction in mobile banking, and we compare ourselves with all the players in the industry, big and small, continues to go up. And so we look at account opening process, and we can -- now because of the new platform and the open architecture, we'll be able to speed up that process and increased the pull-through on new account openings that we can deepen. And so we've a huge opportunity on the digital front. The beautiful thing is when you open up the architecture and you have agile developments, you can execute more quickly, and you can bring in trusted partners to help with that, that you can put into that. but you also have to have the ability to kind of paint the canvas, if you will, which we do. And so we like where we are. We'll have to make sure we continue to focus on the data portion of this. So we deliver what people want. But the digital piece matters, what products you put into digital matters, the experience and how quick it is. And then finally, I'd say something that's often overlooked is what's your uptime. And we've had 99.99%. I want to say 100%, but I'm afraid our General Counsel will be upset. We've had 99.99% uptime, and when you're getting on your phone looking at, the number one thing you want to see is what's my balance? And so when you have virtually 100% uptime on that, that typically leads to a good customer experience. So we feel like we are big enough to compete, we've spent significantly in this space, we've offset some of that expense with some branch actions that we've taken on the consolidation front. And you kind of have to meet the customer where they want to do business.

Helpful. Then back to loans for a second. While loan growth trends have slowed, it looks like growth still, you expect to outpace your core customer deposit growth. The deposit growth proves to be more of a struggle for the remainder of the year. Do you think about hitting the brakes on the loan side?

Well, you have to take everything into account, but we also look at what's happening right now. And so -- if you think of the first quarter beginning in the second quarter as an anomaly, which I think we could argue seeing 2 of the 3 biggest bank failures in our company's history in the span of 30-ish [ days ] creates an anomaly. I think when you look at the third quarter, you'll start to see some normalization. We've been able to outpace the market on deposit growth in '22. We are seeing a return to customer -- a return to core customer deposit growth in the third quarter of [ 2023 ]. And this is not a we hope it happens strategy. It is an investment in product, it's investment in marketing, it's investment in digital leading to customer satisfaction, leading to decreased attrition increased acquisitions. So we believe there's an opportunity there. We think we can add a few more commercial bankers. We think that their focus can be on the deposit side. We think that when you establish your mass affluent, then you have a natural streaming to wealth. We haven't pulled that lever, but we announced a new President of our Private Wealth division, Jayne Hladio, who's going to come us, starting on October 2. She has lot of experience working on that transition from mass affluent [ to wealth ]. So we've more levers we're going to pull. We believe the ones that we're pulling are working now again in the third quarter, after that, a brief -- a period that we went through. So we're seeing the deposit and then the market is stabilizing a little bit on deposits overall where you've seen some bigger industry decreases in the last 12 months. We think that dissipates over time. So the playing field changed a little there. That also being said, when you exit a business that has $1 billion in production, you will see some natural runoff there. So that demand is [indiscernible] growth while we put on a little higher yielding asset on the other side. So -- so we think that we'll be able to moderate the loan growth in an appropriate way and the deposits right now, it sure looks like we're going to be able to fund a great deal of our loan growth with that.

Helpful. And then you touched on it a little bit, but you grew the deposit base pretty significantly in the first half of 2023, but most of that growth came from wholesale and network sources, while core customer deposits saw some volatility. Can you talk a bit more about the puts and takes and why you still expect to see core growth in the back half of 2023?

Well, I'll first say I think the entire industry saw some volatility in that second quarter, I'd say, outside of maybe the 3 or 4 largest banks in the country. With regards to wholesale funding, brokered deposits, we certainly use that as a lever for a few reasons. One, we thought it gave us the opportunity to bring in some wholesale funding, broker deposits, and offset and pay down some of our Federal Home Loan Bank borrowings. The idea is that -- that gives us additional liquidity to work with. The idea during that crisis was to make sure that you had 1-day liquidity. That's what our focus was. So over the course of 2.5 weeks, we improved our liquidity position by, I think it's roughly $4 billion. And then we got to a 1-day liquidity coverage of over 100%. So meaning that every uninsured and uncollateralized deposit or collateralized or insured deposit in your bank left in 1 day, you could cover the entirety of that. We think that is not a likely scenario for us based on the fact that we have a low percentage of uncollateralized uninsured deposits. But we thought that, that was a means of getting those in into our bank turns out we can actually do that in a more cost-effective way than using the FHLB. So you gain liquidity. You did it at a little lesser of cost. And then by the way, these broker deposits were insured deposits as well. So a little bit more safe from the perception of the general public. And so for many reasons, we thought at the time, it was a good move to make. We don't expect that, that is going to be something that will replicate. We sure hope we don't go through a scenario like we saw in the second quarter. Our available liquidity is significant today versus 12 months ago versus 6 months ago. Our goal is to fund our growth through core customer deposits. It's a less expensive way to do it. Our goal, as long as I'm here, is going to be having deposit plays and start to bring down that wholesale funding over time.

Helpful. And then with elevated competition for deposits, are you expecting to see more growth come from rate-sensitive categories like CDs and [indiscernible] Or expect to be more broad-based?

Well, the goal, excuse me, is to grow the customer base. When you grow the customer base you're growing that in checking, savings, CDs, money markets. But we have experienced a mix shift in our industry -- where -- excuse me, people had excess cash, at very, very low rates. They left it in very low instruments that mix shift has allowed them to move it to more of the money market to the CD. But the mix shift is slowing down as excess liquidity dissipates, there's a level of that. So that mix shift will become less and less each quarter as we go throughout this year. as we head into 2024. So today, certainly, there is more on the high rate side and the front book is costing more than it has in quite some time. And then the question is what are repricing rates on some of the instruments that you have out there. And that, that is yet to be determined. Will it be higher? I don't think so. Will be the payment -- will be a little bit lower, it could be. But I don't think that it goes higher. And for that reason, I think you start to see the extreme deposit betas abate. I think you'd start to see margin, margin compression start to abate. In fact, we gave guidance on our margin at 2.7%, 2.8%. And for the rest of the year. Having ended the last quarter at 2.8. You can see it's a very modest decrease for us in a place where it was much more severe in the prior quarters.

Helpful. And do you still expect it to be in that range?

We do. I mean the key to it is, can you grow deposits and your funding source, and we've reaffirmed the outlook and -- we're in the 2.5 months in a 3 months quarter. So we feel pretty comfortable with that forecast.

Great. And then your loan-to-deposit ratio has come down slightly over the past couple of quarters. It remains towards the top of your peer group. Are you comfortable where it sits today? Or are you planning to bring it down over time?

Well, it seems like all roads lead to loan-to-deposit ratio, liquidity and deposits. And I'd say the answer of the question is very similar to what I've said before. Our franchise needs a focus on deposit growth as long as we can continue to have that, that deposit growth, it will lead to value for our shareholders, for our company. Being at 95% is fine, but you have to have that funding source on the ongoing basis. We'd be lucky to get that in the [ 93 to 98.5 ] over time. And as we do that, that replaces more [indiscernible] earning sources for us. So in the instance that we have a decrease in loan growth for us because of our situation having, let's say, we get a 3% to 5% deposit growth and it's 2% to 3% above your loan growth that can pay down a more expensive source for us. So having started with a little bit lower margin and a little bit more reliance on wholesale funding. But having strategies that are 2 years in focused on deposit growth and granular deposit growth, even having brought in a new head of marketing and product whose expertise is on deposit acquisition. Bryan Carson came to us just over a year ago. The investments we've made are squarely in the space that are most important to us.

Helpful. You've highlighted the stability of your markets in recent months, but broader concerns remain about the economy at macro levels. Have you -- have it you -- any concerns developed about the resiliency of your customers in the Midwest?

Well, I mean, any concerns. We are in the risk business. So we certainly have to be aware that risk that emerge in the macro economy. And there are indicators, if loan growth isn't there, that there may be a contraction of the economy. The question then becomes us versus peers, and I would say a couple of things on that, front. The unemployment rate in the state of Wisconsin is a remarkably low, 2.6%. I believe it's under 3% in Minnesota, a little bit higher in Illinois. We have a very resilient manufacturing base. We have very strong employment. So yes, we have to be aware of the macro environment. And you can see some indicators that show that there may be a downturn. You can see some indicators that say the economy is pretty strong. Unemployment is one that, that we look at very closely. It's one that it will be a leading indicator typically to the consumer. And our book right now with the strength of our footprint has shown no deterioration if I have had to speak of in any category yet. It doesn't mean that we can say, okay, we're in a good shape. We understand the potential risk to office for instance. And we've done a deep dive on that portfolio. And when we get done with that deep dive, we're going to go back and we're going to do it again. And it will be repetitive because in this environment, you have to have some you have to make sure you don't get surprised in C&I, don't get surprised in commercial real estate. But so far, the indicators that we've seen even upon deep dive, even upon getting rent rolls from our customers that are current, show that -- so that's so far so good in across our portfolios.

Helpful. Associated as a reputation of expense discipline. You've taken down your expense guide a couple of times this year. With that said, we're continuing to hear about expense pressures from other banks in the back half of 2023. Are you seeing any of those pressures as you think about the remainder of this year or look into 2024?

I feel very similar to how it felt going into -- in terms of expenses. The plan is -- and the message to our leadership team is we want to have positive operating leverage. Now there are a lot of puts and takes out in the marketplace right now to try to determine what has to be done to get to positive operating leverage. The good news is we've seen some stabilization in the market. We've gotten some more certainty on the regulatory front. We're starting to see what is going to happen on the lending side of the business. So -- it's a long way of saying each year we go into the cycle, we say what can we cut that is not as crucial for our success, and what should we invest in. Right now, because we expect to start to move towards higher-yielding assets on the commercial side versus lower yielding on third-party mortgages. The question is what do we invest in, in commercial, and we'll need to make some investments. But then we'll also -- we've also dissected the portfolio to see what is there. So when I think about expenses, I think can -- do we have the ability to grow revenue? And do we have the ability to create cost of operating leverage? So going into 2024, we've managed expenses well, we'll be in the 3% to 4% range coming down from that 4% to 6%. And the challenge to the leadership team is where do we [indiscernible] where do we invest? We've been working on that over the last 60 days. And we expect that we'll start to talk a bit more about that, that this year with the Phase 2 of our strategies. And then typically, we gave guidance for 2024 in January.

Helpful. And then moving on to credit, things look pretty clean throughout the industry and Associated has been no different, but recession continues to be a worry, a major discussion point. Are you seeing any early warning signs within your portfolios? If not, where would you expect to see them?

Yes. So there's not necessarily a canary in the coal mine. It is not for lack of looking. What I would say is when I look at the pipelines and see that those are down year-over-year when I see HA data and I see the industry slightly down on the lending side. To me, it's more -- that's the only indicator that I've seen as opposed to portfolio. On like consumer side it's very clean, it's very little risk on the commercial side. Those are commercial, and C&I, are where we're doing the deep dives, and we've not seen that. We had one charge-off on a syndicated credit last quarter. We don't see that as a recurring pattern heading into -- as we go through the third quarter. So for us, I think that we can get a sense of calm when it comes to credit risk. It's macro indicators that are going to be subject that. So for us, we need to keep a very close view and not be surprised. And what we see and make sure we're grading our portfolios appropriately and making sure we're providing appropriately. But so far, we haven't seen that. If I had to say an area that I will keep a very close eye on for us is it's going to be office because that whole hybrid model in office model is yet to be determined what it looks like for the country. So we'll continue to keep a very close eye there. And then we'll look at unemployment trends typically for our consumer book.

Helpful. Then following the bank failures of the spring, several of the major rating agencies have issued reports highlighting risks for the banking industry, and announcing downgrades to a number of banks, including Associated. What has the response been? And does this change your approach as a bank?

The response in the last wave where there are several banks mentioned, it's not been a major talking point for our customer base at this point. There are a lot of lagging indicators in there that was not a good news. What I would say is we know where our opportunity is. We know where it is on the deposit side. We feel very good about our relative [ credit quality ] as a bank. The rating agencies have a job to do. And that's what they're doing. They're indicating that the market has additional risk. We have to understand that. We're in regular communication with them. They understand what our plans are, just as any other key constituents, whether that's a regulator, whether that's in analysts, whether that's an investor. And so -- what I'd say now is when we look at our capital position, our liquidity position, we feel like we're in a pretty good position. When we look at credit risk, we strongly believe that we are a low-risk bank located in the Upper Midwest. So they have a job to do. They've done that. They've been impacted. They've done that across the industry. But we feel like we're in pretty good position from our credit quality from a risk standpoint.

And then on the regulatory front, there's been a lot of headlines recently about proposed changes to capital requirements and other measures meant to bolster the system. It looks like most of the conversations are focused around banks at or above $100 billion threshold. But how does that impact your approach as a $41 billion bank?

Well, I mean I think any time there is a crisis or many crisis, you kind of have to double-click and make sure that, that there is an appropriate approach to business, whether that is an increase in view of liquidity. Our liquidity has already increased, and that is a decrease in the risk measurement in my view. So there already have been impacts from that, that we felt as a company, as an industry. My understanding, there is a significant focus over -- be over $100 billion banks, but that's not necessarily a bad thing because with that becomes more certainty, and the market needs, I think, more certainty in what is happening. Will there be a trickle effect to the banks under $100 billion? There certainly could be, and nobody wants to get surprised at this point. But I believe we entered this, this time with maybe a little more regulatory scrutiny. I don't think it materially changes our expense base. And I think we enter in a good place from an operational risk standpoint, and from a credit risk standpoint. So the foundation, start point is good for us. And I think the fundamentals are good for us. We will be proactive in addressing what increased risks might be, and the first one of those was liquidity, and we've addressed that in a significant way.

Great. We have a few minutes left. Does anyone in the audience have any questions. Well, while I think -- I have a few more questions I can ask you. With regional bank stocks continue to struggle, our share buybacks on the table in 2023?

Our goal has been to focus on, first, on dividend and then on organic growth. We think those are the best uses of capital for us right now. So share buyback is not -- has not been one of our planned strategies. I believe we have approval for a tranche, but it's not. It is not on the horizon in my view, in 2023.

And then any update on where you guys stand in terms of M&A?

When I think of M&A, first, I think we, I'm sure glad deposits have stabilized, and we can get back to the business of banking versus what occurred in the second quarter, which was a lot more volatile. For us, I think we have a good runway. I mean we can change the mix shift on the asset side. We can improve our funding source on the deposit side. And with that, that's the best way to increase value to our shareholder and to the bank. So -- those are the 2 primary focuses for us. If we execute on that in the next 12 months, we'll see. I mean that, that is to me a distraction today. But in the future, if we perform, the market stabilizes and there's opportunity, we're in a position where we could benefit from that at that point. But today, it's about organic growth.

Great. And now 2 years removed from the announcement of your initial plan. strategic plan, most of your initiatives are well underway. You touched upon those in your prepared remarks. Have you started to talk about what's next for your strategic plan?

I'll just say, yes, we've had a great deal of discussion about that. We do intend by the end of the year to kind of roll out what does that look like. And I think what you should expect is nothing fancy. I think it's a little bit more of what we've done. It's a -- we have a great opportunity to optimize the balance sheet on the asset, liability side. And it's beyond the third-party originated mortgages. We've spent 6 months going deal by deal, segment by segment, understanding what we have as a bank. As the profile of our bank has changed to having a few more boots on the ground on the commercial side, for instance, we probably have fewer low-margin non-relationship loans on the books over time. So we think even within the commercial book and other books, we have opportunity. As you shift away from one, you have to continue to expand on another because of the way our RMs are going after the business holistically, we think we'll have the ability to add some relationship managers. We're certainly not saturated in some of the major markets we serve in Minneapolis and Chicago and Milwaukee. And we've selectively added RMs in Wisconsin as well. And so right now versus 2 years ago, we've expanded the size of the group. People now have recognized the folks that have come, and they've seen they've had some success. So when we build on to it, that will be one of the opportunities. But the other one is clearly going to be deposit growth. And so when you look at those 2 pieces of it, we have several initiatives in progress that we can either expand on or develop or I don't think it necessarily means launching several new verticals that we're unfamiliar with. But maybe changing that, the mix of the balance sheet a little bit.

Thank you, Andy. And with that, we're out of time. Really appreciate Associated in making this work, and hopefully, we'll see you next year in person.

Well, thank you, we tried like have to be there. I appreciate it. Thanks, Matt.