Fifth Third Bancorp (FITB) Earnings Call Transcript & Summary

All right. Good morning, and welcome to day 3 of the 14th Annual Morgan Stanley U.S. Financials Conference. I'm Manan Gosalia the mid-cap banks analyst. Before we start, our standard disclosures apply. For important disclosures, please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures, the taking of photographs and use of recording devices is not allowed. If you have any questions, please reach out to your Morgan Stanley sales representative. So with that out of the way, I'm delighted to have with us today from Fifth Third, Tim Spence, President and CEO; and Jamie Leonard, CFO. Tim is going to start with some prepared remarks, and then we'll move into Q&A.

Great. Thanks, Manan. Good morning, everybody. We published a slide presentation last night on our Investor Relations page, which I will refer to throughout my prepared remarks. And then after that, Jamie Leonard and I are happy to take your questions. Fifth Third, we have long believed that the best banks differentiate themselves, not by how they perform when markets are constructive, but rather how well they navigate more challenging environments. Our operating priorities, stability, profitability and growth in that order are the lens through which we make strategic decisions and are reflected in the discipline with which we run the business. We create stability by focusing on stable core deposit funding, a consistently strong credit profile and diversified revenue streams. We deliver profitability through an unwavering commitment to operating efficiency and a focus on unit economics throughout the company. Our return metrics have steadily improved over the course of the past decade and are now at the upper end of our peer group. We produced growth through establishing leading positions in the markets where we compete, delivering innovative products and providing excellent customer service. We believe deliberate multiyear investments are the only path to sustainable competitive advantages. For us, these include our high-growth Southeast markets, our differentiated momentum banking and treasury management products, our tech platform modernization and our fintech platforms dividend and provide. This also includes the launch of our embedded payments business, Newline which I will expand upon in a moment. Turning to Slide 4. Our strong deposit franchise is the byproduct of our consistent multiyear investment in the company. We've discussed our brand strategies several times with you in the past. A healthy branch network remains critically important for growing primary consumer relationships. Newer branches provide superior household growth and legacy branches provide the connective tissue for long-standing customer relationships. We've added 80 de novo branches over the past 5 years, the second most in our footprint at a time when most banks are simply closing branches. We've also frequently discussed Momentum Banking, our flagship mass market, non-interest-bearing checking offering launched in 2021. Momentum was the first fintech equivalent everyday banking solution offered by traditional banks. Momentum customers benefit from ongoing product upgrades roughly every 6 months like what we have come to expect from the operating systems on our mobile phones. Our winter release included the ability to get your tax refund up to 5 days early. And later this year, we will launch a simplified account switching experience and SmartShield, a suite of services designed to help customers protect against fraud. We've also heavily invested in decision science capabilities over the past decade to enhance internal decision-making and provide a more tailored customer experience. For instance, we leverage our award-winning geospatial models to inform our de novo strategy. Also, our customer recommendation engine, which shapes customer interactions across our channels is powered by over 75 artificial neuro intelligence algorithms. These capabilities have been instrumental in producing strong deposit outcomes, particularly over the past 3 months. We believe our multiyear investment discipline results in a sustainable competitive advantage over peers, we've successfully grown noninterest-bearing deposit accounts and consumer led by momentum and in commercial led by our treasury management business. This gives us confidence in our ability to maintain a noninterest-bearing deposit concentration significantly higher than what we had before the great financial crisis. Turning to Slide 5. Our deposit franchise stands out amongst peers. Including the trillionaire banks, we are the only large cap bank to grow deposits since the middle of last year when the Fed accelerated its interest rate increases and began reducing liquidity in the system. The result is the byproduct of a multiyear effort to grow core operating accounts in both the consumer and commercial segments. On the right side of the slide, we provided you with the scatter plot leveraging publicly available information from NACHA, which publishes the top 50 ACH originators and receivers on an annual basis. The X-axis represents the ACH credit received transactions, which are dominated by direct deposits divided by consumer deposit balances. This provides the best proxy for primary consumer relationships. The Y-axis represents ACH debit send transactions divided by commercial deposit balances, which represents commercial operating relationships. Combined this provides you with a good view of how Fifth Third stands out among peers. Our strong core deposit franchise will remain a key differentiator for Fifth Third in this environment. We expect average and period-end deposits to be stable in the second quarter compared to the first quarter. Slide 6 highlights areas in our Consumer business where we consistently grown our deposit franchise. Our consumer strategy is focused on a strong local presence, innovative products and excellent customer service. We maintain a #4 deposit share in markets in which we compete with the top 3 being trillionaire banks. We are #2 overall in our Midwest markets and #6 in our Southeast markets. We continue to gain market share, having achieved a consistent annual organic household growth rate of 3% over the past 5 years across the entire footprint, including 7% plus growth in the Southeast last year. From a service standpoint, our MyDay portal gives our retail employees an easy-to-follow dashboard with the top 15 actions they should take every day. These are personalized recommendations tailored to customers' needs. MyDay helped improve retail banker productivity by 25% since it was launched and is the same analytic engine, which drives customized content for customers in our digital channels. Slide 7 highlights our commercial deposit franchise, led by our peer-leading treasury management business. We rank in the top 10 nationally in nearly all commercial payment types, as shown in EY's recent cash management survey. We are also among the leaders in driving adoption of real-time payments ranking #7 nationally. We've made investments in our treasury management business over many years to generate sustainable revenue and deposit growth. Central among these are our investments in building payment software automation around our core payment processing activities, which we refer to as managed services. The managed services ecosystem is now more than 35% of our total treasury management top line revenue and will continue to grow with the advent of our Big Data health care acquisition. Slide 8 provides more information on our embedded payments business, which we recently rebranded as Newline, a homage to the Python coding character representing a new line of code and to the fact that payments are a new product line for the software companies we serve. NewLine's origins date back to the spin out of Vantiv, our legacy card processing business, and represent a decade of embedded payments expertise inside the company. We focus on serving the largest, best established firms in their respective vertical markets and help them build launch and scale compliant payment products. To be clear, this is a payments business and not a Rent-a-Charter Fintech lending business. We offer the full suite of payment types, including debit, ACH, real-time payments and wire and allow clients to customize more than 20 APIs with functionality for more than 70 different product features. We project our risk protocols to clients, showing the value of our first-class risk and compliance infrastructure, including AML, BSA requirements. The business has grown rapidly over the past several years, and our recent Rize Money acquisition accelerates investments we've been making to continue to enhance our developer tools and tech infrastructure. We expect to continue to grow revenue and deposits at a strong pace for the next several years. Moving to Slide 9. Our conservative consumer loan portfolio continues to be highly concentrated in loans represented by super prime borrowers and homeowners. We think these 2 attributes will be key differentiators for us, mounting inflationary pressures are disproportionately affecting lower FICO borrowers and those who have not been able to lock in their single largest monthly expense at low historically fixed rates. We see that corroborated in our deposit data. Depositors with the 720-plus FICO still have 25% more in deposit balances compared to 3 years ago, while sub 720 borrowers have 5% less today compared to where they were 3 years ago. Similarly, homeowners have 20% more in deposit balances while renters have 20% less in deposit balances than they did 3 years ago today. Slide 10 highlights our commercial portfolio. We continue to believe our disciplined client selection and well-diversified portfolio with strict concentration limits, including in CRE will be a key differentiator for us going forward. As many of you know, we have maintained a cautious outlook for several years and have become increasingly cautious through the first half of 2023. We tightened underwriting standards during COVID, including stressing credits to an up 200 basis point scenario off of the forward curve, which limited our growth but improved the stability of our balance sheet. Since we began tightening underwriting standards, roughly 90% of our commercial portfolio has been re-underwritten. Our criticized assets have been stable to down over the past several quarters. We've also provided some statistics on our office CRE portfolio. We continue to watch it closely, but believe the overall impact for Fifth Third will be limited given that we have maintained the lowest CRE concentration among our peers for many years and had deemphasized office even before the pandemic. We are not currently pursuing any new office CRE originations. Moving to our outlook for the second quarter. We now expect -- as I mentioned earlier, we expect deposits to be stable. However, we are not immune to the competitive landscape. We've seen a sharp increase in competitive rate offers this quarter, and we have defended our deposit book, but that comes at a cost. As we discussed in April, we were cautious on the market dynamics and therefore, provided a range of potential deposit beta outcomes of 43% to 49% for the full year based on peer commentary and our own experience. We now expect our cumulative deposit beta to increase to 46% in the second quarter and to finish the year in the low 50s. That impact, combined with additional DDA migration to interest-bearing products, will result in second quarter NII being down 4% to 5% from the first quarter. We continue to expect net charge-offs to be in the 25 to 35 basis point range. And we also continue to expect fees and expenses to be within the range of guidance we provided in April. In summary, even against a more challenging backdrop, we believe we can sustain our returns better than any other regional bank. Our strategic and operational priorities remain consistent with a focus of stability, profitability and growth, to generate strong returns through the full economic cycle. With that, Jamie and I are now happy to take your questions.

Perfect. Thanks so much.

Thank you.

So Tim, maybe if you can set the stage in terms of what you're seeing in the environment overall? And then if we can just take a step back before we get into the quarter and the recent trends. Can you talk about just the returns for the industry overall. A lot of people are pushing back, saying that the returns are going to be a lot lower as we go into the next couple of years or the next 3 years, given what's happened? What's your take on that?

Yes. So it's a difficult environment at the moment, and I think it will continue to be a difficult environment because the Fed has been clear that they want to suppress inflation, and they're either going to do that by suppressing demand with high interest rates or suppressing supply by tightening liquidity. I think those of us who have run our businesses defensively and who have not predicated our strategies on the belief that we were going to get a lot of balance sheet growth, are going to do better than those of us who came into the year expecting to be able to grow our way through accelerating deposit betas and are now going to have to do the wrenching work to restructure our expense plans and to cut back on investments and otherwise. And -- and you see that, right? We -- I think you all see that as you're seeing the impact of the increase in pressure on deposits, making their way through bank -- the outlook for banks of all different sizes. And as it relates to the intermediate term, I think the thing I would caution everybody is, if you look back over time, what you will find is we tend to overestimate the degree to which changes permanent when there's a new issue that materializes in the industry and then underestimate our ability as a sector to restructure and to return to what is an appropriate return profile given our cost of equity. So the easiest example of that would be COVID. I mean, think about how many billions of dollars got spent on building data centers and otherwise on the belief that people would never want to shop in physical retail stores again than the last 1.5 years. We've had 1 large retailer after the next come out and say, "Well, we really misthought this, and we've got 10 years' worth of capacity now, and we thought we were going to absorb it into and otherwise". And I think we're going to see the same thing in the sector. There's no question that there will be a regulatory policy response to what we just witnessed in Silicon Valley's case, and that we will need to adapt. But as I mentioned in our first quarter earnings call, if you pull the quarterly banking profile from the FDIC, you can get data back to the 30s. Just tax adjust the returns there in different periods. And you'll see that despite many changes to the regulatory regime, the industry has been remarkably resilient in terms of getting back to an ROE that is north of its cost of equity.

Got it. And then, Jamie, maybe you want to touch on the NII guide. Clearly, deposits is a major focus. Fifth Third was 1 of the better performing banks in our coverage in the first quarter with deposit balances largely stable, you have another quarter of stable deposits here. So can you talk about the trends you're seeing on the deposit side, whether it's the mix or the deposit betas and how that feeds into NII?

Sure. As you said, first quarter, we performed very well, being stable. And as Tim mentioned in his prepared remarks, 1 of -- the only banks to actually grow deposits over the past 9 months. We continue to target stable deposits, both second quarter. We are stable quarter-to-date and stable deposit balances over the back half of the year. The challenge comes in with the environment as well as then the competitive behaviors where deposits are getting more expensive. And so when we were coming out of the April earnings season, we were thinking deposit betas would be 47%, maybe 48% by the end of the year. And I guess, as 1 point of clarification. When we talk about deposit betas, I know different banks calculate it differently. Some include DDA, we do not. Some exclude CDs. We do not. So I think ours is a very straightforward approach, but we were thinking 47%, 48%. But given the guidance we were hearing across the industry said, okay, choose your own adventure, 43% to 49%. As we sit here today, given some of the rate offers that you're seeing from competitors and our goal of maintaining stable balances, we've been very defensive -- defending the deposit book. The most interesting thing, I think, will be how does all of this play out because I believe we have, if not the best, 1 of the best retail franchises in banking, and we have an incredibly strong treasury management business. So when you have those 2 factors, we ought to perform at or better than the industry average when it comes to pricing. But yet, we're modeling a number that is higher than what we're hearing from peers at this conference. So ultimately, time will tell how this plays out. But when you then transition to the NII guide, the NII guide down from up 7% to 10% to up 3% to 5% on a full year basis. We're still growing NII. We're still doing well, but the factors driving the revision, I'll take -- there are 3 factors, and I'll take them least to most. So one, Tim mentioned in the lending environment, we have pulled back in certain areas as well as customer demand is lower. Line utilization is actually down 1 point this quarter from 37% to 36%. We expect that to continue as the year progresses. But that's about 10% of the change in the NII guide. The betas that we just discussed, call it, 30% change to the NII guide. And then the biggest factor, about 60% change has been faster DDA migration into either the Reg Q hybrid account, interest-bearing account or into other interest-bearing activities such that we started the year at a 34% DDA level, we thought we would finish the year at 30%. We're now forecasting that, that DDA percentage of total deposits will end the year at up 27%. So we're seeing that erosion. Now -- with that said, June has actually been a very healthy month and that erosion has stopped. So we're beating our forecast a little bit thus far in June, but too early to tell how all of this plays out. And there's -- we can spend the next 15 minutes talking about all the factors on what's driving that DDA change. But ultimately, we feel good about our ability to counteract that over time. It's just you can't fight the tape and the headwind in any 1 quarter, any 2 quarters. So it does take time to build and sell through that from a treasury management perspective.

I know it can be a long discussion, but maybe if you just want to touch on that, what gives you the confidence that, okay, DDA should go down from 30% to 27% and 27% is the right level. Can you talk a little bit more about that in the terms we're seeing?

So if you look at the guardrails on the DDA percentage of total deposits, you have fourth quarter 2006, we were at a 20% level. And that was several quarters after the Fed had reached the 5.25 peak rate level. You go back at fourth quarter 2016 and we were at 30% DDA mix. So I'd put those as the guidepost. And right now, we're saying at the end of this year, fourth quarter 2023 will be between the goalpost but at 27%. Part of the reason why it's not drifting lower to 20% is that our consumer DDA proportion of our total DDAs is up significantly because of all of the investments we've made in the de novos in Momentum Banking, which is a noninterest-bearing checking account that supports that consumer DDA balances. Consumer DDAs represent 1/3 of our total DDAs. And so that book is going to be stable. It will grow slightly with new households, but we expect it to decrease a little bit as consumer spending in those excess deposits erode, but fairly stable $16 billion portfolio. So that helps relative to that 2006, 20% level. But then what's happening as we talked about the hybrid account we have on the commercial side, faster migration into those other products. And so what we've looked at is the amount -- the dollar amount of our excess earnings credit sitting in our analyzed commercial DDAs and we are modeling those excess earnings credits on a dollar basis to actually be at record low levels at the end of this year, which means that there's not a whole lot of flexibility for that erosion to go further, barring further increases in the velocity of money movement, which I think we've already absorbed that impact now. So given our excess earnings credit modeling and the other factors, we feel good at the 27% but there's the challenging environment and ultimately, we see how this plays out, but we feel good about our ability to defend the deposit book this year.

And what do you think about the DDA refill do you think that's going to have an impact on bank deposits? .

Yes. Our view and may not be the popular one, is that the back half of 2023 is going to be a very challenging 6 months from a liquidity perspective. There's the well advertised $1 trillion, $1.5 trillion of funding that the treasury will execute on, but you also have $80 billion a month in QT, you've got deficit spending. You've got student loan repayments perhaps kicking back in. And then you have very competitive offers from banks that are challenged because they lack the retail scale and product and therefore, they want to compete on price. So ultimately, we are positioning the balance sheet very defensively. We're sitting on $9 billion, $10 billion of excess cash every day because we believe the next 6 months will be a very difficult liquidity environment.

And Tim, I think you noted on the first quarter call that you were active in adding a lot of commercial deposit accounts as well during the quarter. I think with the beneficiary of some of the stress that was going on in the system, can you talk about the stickiness of those deposits and whether you're actually seeing some more funding going on in some of those new accounts?

Yes, absolutely. So if you were to look at the deposits we added in -- at the end of the first quarter in the wake of March Madness, probably about half, a little more than half came from existing clients where we had -- we were the beneficiary of a high level of confidence in our stability. People move more money onto our platform. The other, call it, 40% to 45% of it came from new clients. And there, most of what we were doing was accelerating the existing sales pipeline. So the TM implementation [ queue ] went from being a 35-day process because clients typically when they agree to move TM, try to time movement to quarter end to being, can we get this done over the weekend sort of a process. And the embedded payments business, in particular, the pipeline there really surged because you have clients in our -- some of our focus verticals, like payroll, as an example, who had direct exposure to the banks who were either failing or perceived to be at risk, and who needed to find a different home. So because these were activities we were already working on, they weren't a lifeline or let me spread my money out to the broadest possible portfolio of banks. The stickiness of the deposit has actually been very good and the funding rate was excellent.

And Tim, I do want to get into regulation because that's clearly a big topic for banks of [ fit ] that size. But maybe if we can just round out the discussion on guidance. Is there anything more that you want to update us on in addition to the revenue deposits and...

I guess the silver lining of this fees, credit expenses, everything is as advertised. This just literally comes down to the cost of deposits in a challenging environment. Yes. .

All right. Perfect. So on regulation, we've seen the reports on Silicon Valley Bank a signature from the regulators. Clearly, there is some momentum to getting new regulation, whether it's on the AOCI opt-out going away, LCR, TLAC, what's your view on what we could get here?

And I'll let Jamie talk a little bit about specifics here. But I think from my point of view, the thing that the market is getting wrong right now is the process through which the regulators are going to make changes to policy and the speed with which they're going to be adopted. The bank group has been very active and has a very constructive dialogue with every 1 of the regulators in D.C. And in every case, they recognize that rash decisions here where they don't think through the second order of consequences will create more problems than they will solve. So I think as investors, while you should expect the rules to be rewritten in different areas, you should have confidence that the folks in D.C. are going to be deliberative about the way that they do it that there will be an opportunity for the industry to comment and to help tailor the regulations appropriately as we did with Dodd-Frank. If you look back on what the initial proposals were relative to where the final rule making came out and that they will provide a multiyear phase-in period, the same way that they did for CECL as an example, when we had to adopt CECL and otherwise. I just think we're expecting right now that there's going to be a notice of proposed rule-making in June and that we're all going to be required to comply with that by the end of September. I just don't believe that's the case. Do you want to talk specifics?

Sure. Even though we lack specifics, but what we would expect to happen would be the AOCI opt-out for available for sale goes away. So all of us are then going to have to react to that. And we've suspended our buybacks in the second quarter if that is indeed how the rule comes out, then you would expect buybacks to continue to be halted until we get to the appropriate CET1 level. I think the follow-on issue to that is then how do you manage balance sheet and investment portfolio when you have to absorb that hit, especially if on top of that, then HTM gets either caps or hopefully, ultimately, HTM is put in the same AOCI bucket as AFS because economically, it's the exact same rate risk. So I don't know why the accounting would be -- an accounting determination at the time of purchase would impact capital, but we'd probably lose that argument. But what it does mean is then you're going to have to be holding shorter duration and either cash or T bills, a different construct for your portfolio, which ultimately has an earnings impact and has a heightened rate risk impact in a falling rate environment because we view our investment portfolio as the buffer to help protect NII in a falling rate environment, along with the swap program that we've executed on. So I think the go-forward management of the balance sheet gets more challenging given that regulation, and we perhaps take a little bit more duration in the lending side in key areas. And for us, the benefit of the nice auto business plus provide plus dividend as it gives you that ability to have intermediate duration fixed rate assets if you're not able to accomplish that in your investment portfolio. So then beyond the AOCI, TLAC for us would be a very manageable item. We're 1 of the lowest, if not the lowest regional banks from a TLAC shortfall perspective, call it, $4 billion or so. So that would be fine. And then you have the liquidity regime, whether it's LCR or whether it's supervision and the Reg Y buffer with your internal stress testing. And that is where we've talked about different businesses within our company will have to be put on an RWA diet to free up that liquidity. So that has a business impact. But when you add it all up, the higher liquidity levels, higher capital levels, but you do have time in order to meet those requirements and still deliver healthy returns to our shareholders.

So just to follow up on that, do you say higher liquidity levels in both the cash and security side, but you could take a little bit more duration on the loan side? Is that how the balance...

That's how we're viewing it now, but the details will matter based on all of the rules and how they come out.

Got it. And then on TLAC, I think you mentioned on the earnings call that you would probably have to issue somewhere in the range of $4 billion of long-term debt over time. Given that the fixed income markets have been fairly quiet for regional banks at this stage, you're seeing some of the other banks not to come out now. What are you hearing from fixed income investors? How do you think about issuance as you go through this year? .

Fortunately, our spreads have been 1 of the best performing spreads since March 8. So I think there's high demand for Fifth Third paper, but I believe the rules will give us several years to meet that. So from an issuance perspective, there's no need to rush to the market in a challenging time. But we'll be opportunistic. And if there's a window, and we'll execute and we'll just keep chipping away on it.

So quick question on capital return before I check in with the audience. At earnings, you mentioned, like other banks are unlikely to do buybacks in the near term. I guess, what do you need to see change before you restart? Or how are you thinking about capital return in general?

Certainty around the capital rules.

So you need to see that certainly before you restart buybacks? Got it. Are there any questions in the room? All right. Maybe let's move on to credit. You noted that you've been increasingly cautious on CRE. You deemphasized office even before COVID. So maybe talk about credit, what you're seeing there, what are the risks? What are you worried about?

So the thing, whether it's credit or if it's even deposits. the analogy of if I got to go to the doctor and get my lab test done, I can't just fast the night before and hope for good results, I actually have to be healthy for a long time before I get to the doctor. And that's the same way we feel about with credit and the quality of the deposit book. As you need to have done those things years ago, and that is what we have been focused on from the time that Greg took over in 2015 and then under Tim's leadership, we have been very disciplined on credit. You see that in the numbers, our guide hasn't changed. Whether it's CRE or some of the other consumer categories. This is a very solid credit portfolio. We expect losses 25 to 35 basis points. NPAs may bounce around in this kind of environment and coming off low levels. But ultimately, the loss content where you feel very good about 25 to 35 basis points this year.

And then as we think about loan growth in general, lending standards, especially as you think about dividend finance, that is driving most of your loan growth in 2023. And I think in earnings, you talked about balances reaching $5 billion by year-end. Is that still the goal? And how are you thinking about lending standards in general?

Yes. Dividend continues to do very well. Given the liquidity environment, we'll dial back some of the volume so that instead of doing $4.5 billion of production this year, we're targeting $4 billion, but still 90% plus weighted to solar. Solar credit continues to do very well, loss rates, call it, 50 basis points or so right now versus our modeled 125 basis points. So that is a very high returning asset class. We like the asset class. There's certainly a lot of customer demand there. But we've dialed back to that $4 billion level. So whether we finish at $4.5 billion or $5 billion, it will be in that ballpark. .

All right. Perfect. This has been great. But before I let you go, stocks of all regional bank stocks, all mid-cap bank stocks pulled back a lot. What do you think -- any part of the Fifth Third story that investors are missing? .

Sure. Right. I think nearly it's the same name, but a totally different bank than we were 15 years ago, right? Jamie used 2006 as a point of comparison. If you look at the way we ran the business in the 2000 to 2010 time frame, the priorities were really growth, profitability and then stability. We had a higher growth, higher volatility return profile. We've inverted that in terms of the priorities, right? We did a deal a year at a minimum during that decade, we did 1 deal in total in the last decade, which meant that the growth we were generating was what we wanted and not a portion of what we wanted and then other stuff. We ran the bank as a federation of 20 different community banks a decade ago. It's run as a single organization with strong national business lines and good local delivery today. We have the [indiscernible] highest concentration of CRE to capital, I believe, in our peer group at that time, we have the lowest concentration, the CRE to total capital today, and we had a deposit business, which at that time, you got the value out of by opening an account, right? We gave you a beer cozy or a cooler or a lawn chair or something like that. And today, you get the value out of the accounts by using them the way that we've talked about over and over again on Momentum banking and on treasury management. So you have a business that while it has the same basic outline in terms of its geographic footprint, is just a totally different business today. And the byproduct of that is I think it surprised people that Fifth Third among all the large cap banks is the 1 that has been able to hold deposit balances stable, right? I think it surprised people because we had the issues we had during the financial crisis and commercial real estate. I think we have the lowest creep rate in terms of the commercial real estate portfolio of any of our peers today. And the byproduct of that is, I think as the rate cycle peaks here and turns into a credit cycle, it's going to surprise investors that the same sort of stable performance that we have been getting out of deposit balances should materialize in the return profile and in the credit performance in the business.

All right. Perfect. On that note, Tim and Jamie, thanks so much for your time.

Thank you.

Thank you.