M&T Bank Corporation (MTB) Earnings Call Transcript & Summary

So rounding out the conference for regional banks, we are excited to have M&T joining us in person for the first time in many years. M&T spent 2022 successfully executing on the People's acquisition, improved loan growth, accelerated capital return and, of course, is benefiting from rising interest rates. The combination of these has positioned it as one of the best performing bank stocks in our coverage this year. Joining us for the first time ever in person, I hope for the first of many is CFO, Darren King. Today's presentation is going to be a fireside chat. So Darren, welcome. Great to have you here.

All right. Thanks for having us.

So as you think about the last year, I don't think anybody would have expected, the Fed's hike as many times it did, but the yield curve to be inverted for most of the year. Yet, M&T has been among the best-performing bank stocks in the group. The bank had a few milestones this year having closed the People's deal, and you've obviously been focusing on optimizing the balance sheet. So talk about some of the key things that you did to navigate the environment and how is this positioning you to succeed into next year?

Yes, sure. Happy to talk about all of that stuff. I think the start point or the place I want to start is by remembering where we come from. And so if you look at where we ended 2021, we were a bit of an outlier with the percentage of cash on our balance sheet and our patience and starting to deploy that. Obviously, the rate environment was low and had been for such a long period of time and inflation was a question mark. We had the People's deal that we were waiting for. And we've been doing our work to reposition the commercial part of our balance sheet to have a little bit better mix between C&I and CRE. And as we set forward this year, with rates starting to move, our objective has been to slowly put M&T's balance sheet back into what I would consider a more normal mix of earning assets. And so that's bringing down the asset sensitivity, take the cash and put it to work, continue the work we're doing with the CRE book and obviously have a smooth and successful conversion of People's United. And all of those things have been happening and one of the other ones, obviously, is we start the buyback and manage the capital that has been in an excess position. And so we've been doing all of those things all year. As we exit the year, you can see our net interest margin is on a path to something north of 4%. Our asset sensitivity should be down towards 1% or 2%. In fact, depending on deposit betas, which is the big story of the day in the quarter, you could even be close to liability sensitive, either intra-quarter or as we go through next year for a couple of quarters. But we're locking that in at that rate versus where we were last year, which sets us up to have a PPNR to risk-weighted assets that we think will be top quartile, if not top amongst our peers, which allows us to generate capital and make the investments that we need to make in the franchise. And so we will continue to take advantage of the People's franchise and the growth opportunities that exist in New England, the balance sheet, as I mentioned, is in a better place. And the capital, we still have our capital ratios are still really strong to support loan growth or to return it to shareholders. And so when I look at the start point of the -- as we leave this year and go into next year, I feel really good about the position of the balance sheet and the strength of it as well as how much of the volatility we've experienced this year has kind of come out.

So you mentioned People's. You guys obviously closed the deal and spent the last several months focusing on integrating, you've done the system conversion. How has the deal gone relative to your expectations, whether it's gone better than expected? And where does it present opportunities across the customer base? I mean you had some stuff on this in the slides, but how is the cultural integration going at this point?

I'll go in a reverse order because culturally, when you look at People's United, there's probably not a better cultural fit for M&T than People's United. We look at their approach to community banking, being a top player in the markets that they operate in, #1 or 2 from an SBA perspective or from a deposit share perspective. If you look at their credit culture, we kind of joke, we've always talked about how great our credit culture is and our loss rates are the lowest in the industry. I think actually, sheepishly theirs might even be lower than ours. And so from that perspective, the way they think about credit and underwrite, we're a good match. And so for those reasons, it's been a very, very good start to the cultural integration. One of the biggest upsides we see is in small business banking. And that's where I think the next piece of the cultural integration happens. Our model for doing small business is to have dedicated business banking RMs, partner with branch managers to make calls. That's not a model that's used a lot in the industry and having branch managers who weren't business callers becoming a business caller, that takes time to build that confidence and understanding, but that's something that we'll be working on and there's a lot of upside there. We see upside in the credit card portfolios since People's didn't own their card. We do both our consumer and our small business card and so we see some of the upside there. And conversely, we like the opportunity to grow the leasing portfolio in the commercial equipment finance as well as mortgage warehouse lending once mortgage rates come back a little bit, yes, exactly. And so -- and then finally, financially, the deal is going as we expected. The cost saves are -- will be mostly realized by the end of the year. Some will straggle into the first quarter, but that's happening as expected. From a net interest income perspective, it's actually a little bit better than we thought because when we did the deal, rates were low, they were an asset-sensitive organization like we were. And so as rates have gone up, the NII and the capital generation from People's is actually a little bit better than we thought it was going to be. So did we have some challenges during the conversion? Yes that happens pretty much any time you do a large 2 bank integration. There's going to be issues that are going to come up. We think those are mostly behind us, and we look forward to moving from defense to offense in 2023 there.

Makes a lot of sense. And maybe just to build on that, so I'm assuming going with the long-standing tradition, we'll get guidance on the January earnings call. However, as investors think about next year, what do you think are the key areas of focus for M&T, both strategically and financially?

Yes. Well, strategically, continuing to build the franchise in New England is priority 1, 2 and 3. That was a $8.3 billion investment of your money. And so we got to put that to work and get the outcomes that we expected. As we think about 2023, and we think about what's been happening this quarter, where we think we end up in 2023 really isn't materially different, right? It's just the pace in which we're getting there, right? We've always believed that deposit betas were going to start to move. This quarter, we've seen a little bit more of an acceleration for a bunch of reasons than what we might have thought at the end of the third quarter. But ultimately, the long-term margin of the bank is a function of the mix of the assets and liabilities that you have, and that hasn't really fundamentally changed. And so the path that we're on and where we thought we would exit 2023 really hasn't changed. And so when we look at next year, we look at a very strong margin that should be less volatile because of the asset sensitivity, which we don't see a reason to have crazy expense growth, although compared to our long-term history of 2% to 3%, it's probably higher. And I think it's higher for the industry just because of where inflation has been and where expense growth is going to be. But there's nothing that's different for M&T than you would see it anyone else. And so despite that, you've got really strong growth in NII, which allows you to generate capital or support loan growth or to continue to return capital to shareholders. And so when I look at the returns whether it's return on assets or PPNR to risk-weighted assets, I think the bank is very well positioned to have a really strong 2023.

So Darren, a little bit more near term, you obviously put out an updated fourth quarter outlook in the slide deck and here's anybody in the room missed it last night. Maybe can you just talk a little bit about the change in the short-term NII guidance? What drove the outcome on the higher betas? Maybe just digging a little bit and maybe just talk about the need to use wholesale fund in the short run?

Yes, sure. I think we produced 42 pages, but I guess only one mattered. You skipped one. So on the NII guide, a couple of things. The biggest headline is really deposit betas and what's happening. And it's something that we've signaled for a long time at some point, deposit -- people are going to wake up and want to get paid for their money. In history, we've always talked about there's some magic about 3%. One of my colleagues at the bank, Rich, who's retiring has been a deposit product manager forever, has always talked about 3%. And we thought that just given all the excess liquidity in the system that may be that 3%, yes, it would be less magic this year. But guess what, Rich is right. And so as we got through Fed funds through 3%, we've seen a lot more interest in getting paid. And probably the biggest shift that's been the most pronounced has been in the commercial client base. And what you're seeing is you're seeing 2 things that are driving betas faster. One is you're seeing more shift from either off balance sheet to on sweep and/or commercial DDA into commercial on-balance sheet sweep. And so you've got a higher percentage of the portfolio that's in those sweep products and the yield, the rate that we're paying on those is moving up faster because of competition. And so that's what's caused the beta to start to accelerate a little bit compared to where we've been. You've seen a little bit of it also in the consumer space. The consumer space tends to be always CD oriented at this point in the cycle, and we're seeing that. We're seeing some real growth in the CD portfolio. A lot of it is maturing CDs, renewing like at 100%, which we weren't seeing. We're seeing some money market move into CD. And so on the consumer side, you're starting to see more balances shift into CDs and the rates are higher there as well, right? And so that's driving up the funding cost. The other piece, you're talking about wholesale funding. We talked a little bit about some of the activity that's happening in the capital markets. And in our Wilmington Trust business, we do institutional trust. And so we're a little bit the backbone of debt capital markets and equity capital markets. And as you see a slowdown in the activity, you're seeing less deals, there's less dollars that sit in our trust demand accounts through the quarter. We were anticipating you'd see it both in the fee guide as well as a little bit here in the NII guide. But there'll be more activity this quarter, which is pretty typical. Fourth quarter, you usually see a bit of an uptick, and that hasn't materialized. And so there's a little bit less of those trust demand deposits, which are funding source. And with those not being at the level we thought they would be, we needed to offset that with some wholesale funding. We did some FHLB advances. And we didn't know -- we did the $500 million bank debt. And those are driving up some of the funding costs. And so it's the biggest story is the deposit betas, but there are some of the funding costs as well. If you look on the loan side, we're not seeing as much payoff and paydown activity so far this quarter in the nonaccrual book. And so nonaccrual interest is a little bit lower than what it had been in the prior quarter. We didn't see a reason to expect that to change, but it's changed. And so you put all those things together, and that's really what is the difference.

I guess, NII is sort of the topic of the day. So maybe to stick with this. In the slides, you noted you're on the high end of the kind of the 20 to 30 on beta that you've been talking about. Can you just remind everyone what your expectations are through the cycle? And then second, the comment that the destination hasn't really changed, can you clarify what you mean for that in terms of what that means for the trajectory of NII over the course of the cycle?

Yes. I mean it's -- I guess the start point is it's not a straight line, right, as you've seen here. And as much as I'd like to be able to lay out exactly what it's going to look like, the crystal ball, it's looking okay. It's a little easier on loans because they're contractual, but deposits is a function of what competition is doing, right? And so, I guess when I think about the destination, what I think about is a balance sheet that has a mix of earning assets that looks a lot like it did pre-pandemic. In fact, I actually think you got to go back further in time and think about a balance sheet that looks like a bank balance sheet pre the great financial crisis. And the reason I say that is you've got to look back to that time period to find Fed funds at the rate they're at now. And when you look at -- and so don't write this down, I know you guys are going to go crazy. This is just an example that if you look back at the percentage of bank balance sheets that had CDs, what the balances were in CDs pre the great financial crisis, it was probably up in the 15% to 20% range. I'm not saying we're going there tomorrow, but that was what that mix looked like. And so you're going to see bank balance sheet, you're going to see probably more cash and more securities because of liquidity stress requirements. And for us, more than we've traditionally run at because we're a larger institution now, right? And that matters a little bit more. And from a loan portfolio, for us, it's generally been kind of 1/3, 1/3, 1/3. 1/3 commercial C&I, 1/3 CRE, 1/3 consumer, and that mix produces a certain yield, right? And for us, we've always tried to not have a higher percentage of our earning assets in cash or securities because they're lower margin. And then on the funding side, it's still primarily operating accounts and core funded. I think you'll see CDs be a larger percentage of our balance sheet and most banks than you have in the last 10 years. It might not happen overnight, but that's the path that it's on. And then more bank debt and wholesale funding just because it's -- no one needed it when there was all the excess liquidity. But over time, you do want some of them on your balance sheet because it's a stable source of funds. And that also is helpful from an FDIC cost perspective as well as from a liquidity stress perspective. And so you start to see balance sheet start to look like that. And what that produces, this is -- it's that thought process of where that goes that has led to the comments that have gotten lots of notoriety about margins over 4%, probably don't stick around for a long time. What happens in 2023 will depend on where the rates go. Do we stay above for the whole year? Hopefully. But this move just told us that that might not be a guarantee, right? Well, the average for the year to be over 4% might be, should be. But the path is to a more normal and air quotes environment, where you've got that mix of a balance sheet that I talked about, pricing where competition always leaves us relative to one another. And that gets you to a margin over the long term that we've talked about probably in that 360 to 390. For us, we try to focus less on what the absolute number is and more what do we look relative to peers. And so if you look at M&T and how we think about it, we try to have a funding mix that gives us a little bit of a margin advantage. And our net interest margin tends to be a little bit better than the peers. We try to -- because of that, we can take on a little less credit risk that gives us a little better charge-offs than the peers. We try to run with a little bit lower efficiency ratio than the peers. When you put all that stuff together, you get a nice PPNR and a nice net income. And that produces low volatility earnings, which means you can run with a little less capital than the peers. And so all of that is designed to have top quartile return on tangible common, top quartile return on assets, above median EPS growth over long periods of time. And that got disrupted during the pandemic because of all the stuff that was going on. That's the path we're on. That's the bank that we are and that we're creating or bringing back. And that's the path we set off on at the beginning of this year. That's where we feel really good about the progress we've made and where we exit '22 and where we'll continue on in '23. So the takeaway is the NIM could be above 4% for this year. We'll have to see when we get beyond this, a lot of uncertainty in the world. I think fourth quarter, you end up above 4%. We talked about that, we put 4% or 5%. We've got another hike coming, but we're seeing more beta, right? And so the thing to keep in mind, right, is we've talked about how we're reducing our asset sensitivity and where it sits today. And so for kind of plus 1%, it tells you that the margin can't go up that much because that's the whole point of sensitivity, right? But the flip is it shouldn't go down either, right? And so we're trying to get to that point where we have an above peer margin, which we think we're there, and it's locked in. And that's the place we've been trying to get to, and we're pretty much there.

Can you expand on that point and talk about the strategies that you put in place to manage the asset sensitivity? I know that last cycle, you had a big hedging program. This cycle, you had started to put in place, you had done some stuff. I think that you were doing more, adding some forward starting swaps. But maybe just talk about what you've done to protect and so that you're protected once the Fed does start eventually easing?

Yes. It's important to keep in mind that we're managing asset sensitivity and protecting the margin. Over the long term, the best hedge is deposit pricing, right? And so that if your deposit rates come up and you say you've got a margin of 4%, if yields drop, you can drop deposit rate and still protect 4%, right? And so the other things that you're doing is you're adding on the securities and you're adding on the hedges such that when the Fed starts reducing rates, your deposit rates get to a point where they hit the floor, but loans can keep coming down. That's the benefit of the hedge portfolio in the securities. And so when the cycle is going the other direction, when rates are rising, it's the reverse, right? And so because deposits don't reprice on the first move, you earn a lot of extra net interest income that could go away. And so the way to protect that is you use the hedge portfolio and you use the securities to protect that. But over time, the betas move and deposits become the way to manage down your asset sensitivity. And so we're just always thinking about what is the mix of securities, deposit pricing and the hedge portfolio to protect asset sensitivity, to make sure you're set up nicely for PPNR and consistency in the stress test and how you run your bank and not over-hedging such that deposit betas could move and you end up liability sensitive, right? And so it's not exact, but that's what you're trying to work through to use all of those tools to get asset sensitivity close to neutral.

Darren, obviously, a challenging environment to grow deposits. You guys are one of the biggest deposit gatherers during the pandemic. We obviously have [indiscernible] now rates are going up. Can you maybe just what are the strategies you have in place to grow deposits? And where do you see deposits going over the intermediate time?

Yes. Well, we think about deposits, I think about deposits in 2 forms. So there's operating accounts, which is our primary focus, and then there's rate based. And so for us, #1, 2 and 3 mission is operating accounts, whether it's consumers, we want to be the bank where they have their check deposited. If you're a small business, it's where you run your business out of it and you pay your payroll, if it's a commercial or real estate client, same thing. Once you have that operating account, you get the first and last look at the loans and at the rate-based deposits. And so our primary mission to grow the bank and to grow households and to grow deposits is really operating accounts, full stop. Then when you get to the rate based, we can choose to play in the rate depending on what our funding alternatives are. And generally, if we've got to pay rate to get brokered CDs or money market or to get wholesale funding, I'd rather pay to my customer than pay to the capital markets. But if the capital markets are giving me money for less than my customers need, then I'll go get it from them. And so you're looking at the breadth of the relationship and if someone has that operating account and they've got a loan with you, then you're probably going to give them the rate that they're looking for on their interest-oriented money. And so we think about more customer growth than deposit growth per se because what we're really interested is those operating accounts. And that's our primary focus. And so the reason I'm saying that is bigger balances tend to sit in those interest-oriented accounts. And so you might not grow deposits as fast, but that's also a part of managing your funding costs, right, and managing that interest sensitivity and managing your total margin so that you've got less volatility through time.

Let me switch to us on the balance sheet for a little bit. And obviously, there's a lot of uncertainty in the environment. You talked a little bit about 1/3, 1/3, 1/3 in commercial C&I, CRE and consumer. Maybe just broadly speaking across your business, how are your customers feeling about borrowing into next year? Are they more in a wait-and-see mode? And what is your risk appetite look like?

Well, our risk appetite in our credit box doesn't really change much. And that's one of the things our customers value is that they know when they're going to come to M&T and they want a loan that they know what the credit window looks like and what requirements we have to make the loan. And so availability and consistency is a huge value for clients, especially in tough markets, right? And so we've always run the bank so that we're available in tough markets, and we tend to actually grow a little bit more when times are bad, then when times are good. And so as we look at what's been going on this year, we've talked a little bit about this in some of the one-on-one sessions. But what it looks like to us is that you've seen over the course of this year, really strong C&I growth for us and for the industry. And you kind of say, well, what's different this year? And maybe it's optimism. But one of the things that I think you're seeing is we've also seen a slowdown in the capital markets and the debt capital markets. And you've seen some hung deals, some larger deals that are ending up on some of the larger banks' balance sheets. It feels like there's a little -- the activity at the bigger banks because the capital markets are shut down, is bringing some other lending down through the super regionals or the regionals and that's driving the growth. And so will that continue? I don't know, but over the long run, right? And so we always think about things over the long run as opposed to the next few quarters. It's hard to really grow your bank faster than GDP in the markets that you're at. Generally, if you end up growing faster than GDP like double or something, you're probably going to have losses that are growing faster than GDP in a couple of years down the road, right? And so you're trying to make sure that you're serving clients. You're helping them expand their business when it makes sense, structuring loans so that it's good for them and it's good for you, right? Because the last thing we want is in the communities that we operate in, putting people out of business, right, that's just not good business. And so you're trying to make sure that you're supporting their growth and doing it in a way that works for both.

Makes a lot of sense. M&T historically has been a very strong underwriter and has had very good credit performance, Markets are obviously worried about recession into next year. Maybe talk a little bit about some of the trends you're experiencing. I know that with the discussion at fab about you're not seeing -- you haven't seen as much improvement on the consumer side. You guys have been highlighting senior housing, office, CRE has been a big talking point in -- over the course of the conference. Maybe spend a minute or so just talking about what you're seeing within the portfolio? And what are some of the higher risk areas that you're monitoring right now?

Yes. So we'll start with consumer. Consumer is generally in really good shape still. The thing that's interesting and what we're starting to look a little bit at is if you look at mortgages that have been on the books for a while or auto loans or recfi loans that have been on the books for a while, there's been enough uptick in home prices and used vehicle prices that the collateral is in really good shape. If you look at loans that have been written in the last 12 months, it could actually be in the opposite direction, right? The home values have come down. You're seeing used car prices come down. And so the value of the collateral on loans that have been newly underwritten, it's not as strong. And so we're just watching that and paying attention to that and delinquency rates. So far, we haven't seen any material change in delinquency rates. What we noted at BAAB it's not going down anymore, right, and so maybe starting to turn. In the commercial world, when we look at -- go back through the pandemic, it was all about retail and hotel. We're here in New York. I think if you look around at hotel occupancy rates and certainly room rates, the hotel industry is doing okay. And we've seen the criticized levels come down, and we expect to see them continue to come down this quarter and into next quarter. And retail has done really well. To your point, our focus has been on health care, particularly in senior housing and in office. And so the health care space doesn't seem to be getting worse. It just doesn't seem to be getting better yet. Their challenge is less getting people to come to take up occupancy. It's more in their ability to get staffing to be able to take care of the folks when they're there. And so that's constraining their occupancy rates, which is constraining their cash flow a little bit. In the office space, lots going on there. Still, I think lots of work being done across all of the industry to figure out work arrangements, what's remote, what's hybrid, what have you. But when we look at our office portfolio, we're stressing it for a couple of things. One is for what will be the lease renewal rate, meaning what percentage of them will renew and then at what price per square foot will they renew at? And what does that do for cash flow? And if you think about those cash flows, what does that ultimately do for asset values, right, to keep cap rates within a reasonable range? And so we're looking at debt service coverage ratios and loan to values to see who -- which clients might be at risk. And then part 2 is, when does their loan renew and what outside sources do they have? Because someone may have a -- if you got a loan renewal that's still 5 or 10 years out, this could sort itself out before you get there. If it's shorter term, then you're kind of asking, well, what's the loan to value? How do we feel like the loan-to-value looks at current asset prices? Are we underwater or not? What outside resources do they have a renewal, you might look for an equity injection in that case and many clients have that. Or maybe you have a 2 note structure at renewal, [indiscernible] kind of thing to manage the risk. And so it's something we're watching. We're trying to think about what loss content might be in the portfolio. Nothing that we think is going to go haywire in the short term, but it's a risk, and we're watching it.

Got it. Darren, earlier in your remarks, you said we're not going to be thinking about 2% to 3% expense growth. It's higher given the environment. Can you maybe just talk a little bit about -- I know we don't have a number we'll get to that next year, but how much of that is offensive, you guys out there hiring banking, building out consumer-facing technology versus defensive wage pressure, cost of becoming a bigger bank? How would you characterize the need to make investments into '23 and sort of that vein?

Yes. I guess I would describe it as some mix shift. So salaries and benefits are 55% or more of our expense base. And this year, it's probably been as much defensive as retaining staff and reacting to wage inflation that we've all been watching. And so part of the growth, which is a little bit abnormal is we made some midyear adjustments. And because of that, you've got growth in expenses on an annualized basis just baked into the math. And then we're still seeing some pressures on employment costs in certain sectors. I think it's early, but I think you can see that there might be a little relief in tech employee cost, we'll see. And then the other places where we continue to invest is just upgrading the financial systems, right, the tools and technology. And if you look through time at our P&L, we call out software and data processing. And if you look at growth rates, that's one of the highest growth rates. And as you upgrade systems, what's different today from what it was 10 and 15 years ago, is you're buying more, again, air quotes packaged software and that comes with an annual maintenance cost and annual licensing costs and those companies are publicly traded too, right? And so when they need to hit their EPS numbers, guess what, the rates go up, right? And so you see that as a driver for us. One of the offsets is we've talked about moving our IT staff to be more in-house than professional services. And so you can manage those -- you're basically -- the reason you're paying the maintenance cost is because you're outsourcing some of the break fix to those organizations. And so you see a little bit of an offset there. And then you probably continue to see some uptick in marketing costs, right, that as we go into New England and we introduce ourselves to that market and reestablish or establish the M&T brand versus the People's brand, some investment in that, which is on offense. But those will be the kind of things that are driving it. But really, probably the biggest thing is you just got almost like a double increase in comp costs because you made one in the middle of the year and you're making another one again at the start of the year.

So I want to spend the last few minutes talking about capital, capital allocation. You're one of the few banks out there with excess capital over 150 basis points. You're buying back at a pretty robust base, $600 million a quarter. A 2-part question. One, how are you approaching capital returns? And I know that you have to go through DFAS again this year, but what is the path to getting you to a below peer capital level where you think about all the things that you had outlined imply that you should be able to run below peers?

Right. I know there's a few things. Ideally, it would be loan growth, and customer growth will be the biggest driver there, and that's our objective. But we don't want to think about making loans that are marginal return just because we have excess capital because the penalty of doing that is those loans are on your books and are part of your stress test. And the thinner the loan margin in the stress test, the less PPNR produces, which means you got a lot more capital, right. So it almost feeds the purpose of what you're trying to solve for. And so to get down to a lower level, I mean, first, we need a different outcome in the stress test, and we're taking steps to make that happen, right, lowering the cash flow help, lowering the CRE concentration will help, the margin going up will help, once we get through having the People's onetime costs in our expense run rate will help. Not all that will come out in '23, probably going to take a couple of years. But that will help us be able to reduce the capital ratios. And then in the meantime, it's returning the capital to shareholders. And for better or for worse, it's becoming more of a challenge because as rates have gone up, when our margins improved, we're generating more capital than we were when we did it, right? Yes, it's [indiscernible] because it is that, but it's -- you know what, we're fortunate. We're fortunate to be in the position that we're in that we have these options and it's all the path that we've been trying to go all year with the bank is to put ourselves in that position, right? And as we wind down here and I talk about where we sit today, with the margin where it is, fees will come back as the markets pick up and the equity markets come back, the expenses, we still got opportunity to take advantage of the cost saves that we had from People's on a full year run rate basis. PPNR to risk-weighted assets looks really good, and the capital ratios give us a lot of protection. We can bring those down. So when I think about where we started the year and our dry powder, we started in a good place. We took care of a lot of it. We still got a bunch of it in front of us, and we're set employees to have a good year. So excited for 2023.

Fantastic. Well, on that note, we are out of time. So please join me in thanking Darren.