MGIC Investment Corporation (MTG) Earnings Call Transcript & Summary

Good morning, everyone, and thank you for joining us for this fireside chat with MGIC's CEO, Tim Mattke; and Head of IR, Mike Zimmerman. [Operator Instructions]. We'll do our best to address the questions in the time we have today. We've also prepared a number of audience polling questions that we would encourage you to answer during the presentation, and we'll be publishing the results in our report summarizing the takeaways from the conference.

With that out of the way, let's get to the discussion, Tim and Mike, thanks for joining us. Let's just lead off with kind of where you're seeing the origination environment? And how it's shaping up for high LTV loans relative to the broader strength across the mortgage market?

Yes. Thanks, Mark. And first off, thanks for having us. Really appreciate this opportunity. High LTV space, I think from an origination market standpoint, still looks really strong and sort of comparable to the overall origination market. I think the one thing, though, that we anticipated that you'd see the second half this year, and we started to see already in the second quarter was a little bit of drop in the refi activity from an origination standpoint. We have been running out of our new insurance written probably somewhere around in the 30%, 40% for most of the last year as far as percent being refi activity. That dropped down to, I think, somewhere closer to 20% in Q2. And again, we would expect that -- again, it's hard to anticipate interest rates because we've all been wrong for the last few years. But I think it's safe to assume that there's been some burn out on refi activity. So -- but the purchase volume, quite frankly, is where -- what helps us grow the book. The refi activity is normally a churn of our book, meaning that we're -- we probably have a loan that's getting originated, but it's probably refying out of MI back into MI. And in some cases, maybe with the refis just refying out of MI totally. So really, for us, it's about the purchase volume to help us grow the insurance in force and we view that as continuing to remain strong in second half of the year and quite frankly, going into next year as well.

Yes. That's helpful. I mean I'm not sure everyone fully appreciates how important the purchase market, in particular, is to your business. Could you talk a little bit more -- and you alluded to the fact that I think you're optimistic about that continuing to grow. Can you talk a little bit more about the drivers there? And what gives you the optimism that, that's going to continue to expand?

I think ultimately, it comes down to, I think, some of the demographics when you think about the millennial generation. Quite frankly, we've been talking about this for the last, pretty frankly, going back a decade, that you could sort of see this sort of millennial generation and just the sheer volume, that even if you got a potentially a lower homeownership percentage out of the millennial cohort, that you'd ultimately end up with more homes being purchased just because of the sheer size of them. And what we've seen in the last couple of years is those millennial generations coming into the peak home buying years for them, the biggest cohort, we've always viewed that they would probably purchase homes on average close to what prior generations had, but we also view that they might be delayed from a timing standpoint compared to prior generations because we've always view homeownership is normally being tied to life events. Whether that's from a job progression, but more likely from a family progression, married, kids, those things are things that drive sort of first-time home purchases, which is a huge chunk of our business. And so we think that those demographics remain strong, not just this year, we're going into next year. And quite frankly, for a number of years ahead of us.

Okay. Great. MTG has picked up NIW market share each over the last 4 quarters. What are you seeing from a competitive standpoint that's allowed you to pick up this incremental share?

I think from my viewpoint, there's a consistency in how we do business and how we approach the market. Market share is not always going to go up. But we've always prided ourselves on doing business with just about everybody getting a lot of long-term customer relationships. That -- our belief is that if we find sort of where the market is from a pricing standpoint, which is a dynamic, obviously, that is important to our customers. But if we can be in the market on pricing, we should probably do better than our fair share from a market share standpoint. And I think what you've seen over the last few quarters, is that happening is we don't have to discount our price to get below others to get business. But as long as we're competitive from a marketplace standpoint with a sheer volume of customers that we have and we have a broader customer base, and I think a lot of our competition does. That can get us to a market share that is sort of higher than 1/6 of the market.

Okay. Any -- I think prior to that, one of these also enabled as I think there was some share loss kind of in the year leading up to that. Any kind of insight what drove that?

I mean, I think from our standpoint, it's a -- it could be competition from a pricing standpoint. I don't think there's anything from a major customer loss. But I think for us, early on, as we got used to risk-based pricing and us using our risk-based pricing engine, it probably took us a quarter or 2 to sort of get that fully off the ground and also be comfortable with our analytical work over where the market is from a pricing standpoint. So I think you put those things together, I think that's why you've seen sort of the consistency in the growth. And generally, we've had less volatility, I think, than most of the industry on market share over the last -- probably for the last year. Once we've got that, I think sort of -- again, you never have it perfected by any means. So this is going to continue to evolve. But we feel really good about where we are as far as our enablement approach on that.

Okay. Understood. Can you discuss the current competitive landscape between private mortgage insurance and the FHA?

Yes. I think a high level. The percentage there, while it can move a little bit based upon where the origination market is. I don't view the private MI industry is looking to be overly competitive with FHA right now. For the most part, I think our view has been that where sort of the FICO sort of barriers based upon our pricing exists. Business starts to flow at FHA and that gets around 700, 720 FICO. I think that's been pretty sort of static, I'd say, over the last couple of years. So I think that is always subject to change. I think that's probably more subject to change if FHA wants to do something different with their pricing. I don't think it's the BMIs we are looking to -- at least, firstly, I don't think we're looking to gain a lot more volume back from FHA. There's pockets of business that we wouldn't mind having there. But for the most part, I think we've been pretty comfortable, at least from MGIC standpoint of where the market sort of has settled out between where it's split between private MI and FHA.

Okay. And anything new to report on what you're hearing around the potential for FHA price cut?

It's funny, Mark. I have not heard many rumors recently. But I would say I would be surprised if I don't start to hear more rumors as we go into the fall. There's a lot of rumors right with it after the election, with the change in the new administration going back last year at FHA. One of the first things that might happen under the new Biden administration would be an FHA premium reduction. Quite frankly, I think as an industry, we were a little bit surprised that they didn't reduce it, but we didn't view that if they did it, but it was going to be a significant loss in share from the private MIs to FHA. And again, it would have probably been at some of the lower FICO sores where we might have lost some of the business. So I'd expect, especially with this administration's focus on affordability, being able to get more individuals into homes, trying to think about equity and housing, that there will be some more pressure on FHA to do what they can do. And I think sometimes that manifests in pressure to reduce their premium. I think they normally put out the actual report sometime in the fall, normally October. I think you can see that as being a period where they might look at this. But again, with COVID still being something that's in the news, and I think with their delinquency still being relatively elevated, especially compared to the private mortgage insurance industry, it's something that I think they were thoughtful about in the spring of not reducing premiums because of those factors. It remains to be seen how they look at them going forward.

Okay.

And Mark, just to add on to that real quick, too, when you think about it, there's recognition in Washington, certainly, that demand is not the issue for housing. So I think with the focus is going to be on more of the underserved segments of the market where we're really not competing much from there. So I don't see -- if there is a premium reduction, it may be more targeted to help more of the -- again, that's speculation, but versus a broad cut where it really would just help the masses and just increase demand, and that's really not solving the issue for housing.

Any thoughts on whether if they were to do a less targeted FHA price cut, whether there's a thought that we'll -- maybe we should also reduce loan level pricing adjustments in such a way that maybe would be net neutral to demand for private mortgage insurance?

Mark, I think that's a great point. I would say that we think just like there may be pressure on FHA to potentially drop premium, I think there could be pressure on the GSEs to look at their loan level pricing and their adjustments and whether those should be reexamined. I think that's a fair point. The concern I have would be that sometimes that's not always well coordinated. But I think the sort of outside sort of influence that would -- that from the administration that would say, look at these things, could come at the same time, even though they might not try to do them like right on top of each other. I think it's a very fair point that if FHA is going to get pressure on their premium because of those reasons, I think it's reasonable to think that FHFA might be talking to GSEs about loan level pricing adjustments and what barriers there might be because of those to those groups that they're trying to help.

Okay. Great. Yes, turning back to NIW today. What are your expectations for the remainder of the year, just given some of the declining refinance activity and which should boost persistency a little bit, along with kind of the strong purchase market that you're seeing. Should we see some accelerating insurance in force growth with that kind of dynamic?

I think -- I don't know if I'd say accelerating insurance in force growth, not for us. I mean we've been at pretty strong growth over the last year. I would say, though, going back to my initial comments, I think less churn, which is generally is a good thing for us. So persistency, I think will -- you'll start to see it tick up. I think last quarter for us, our annual persistency was around 57%. That was up slightly from 56% the quarter prior. A lot of times, over longer periods of time, we'd probably tell people to look around at 80% persistency rate as a good long-term metric. So I think with less refi volume, you'll see persistency tick up. Again, that prevents the churn from happening. But I think from an in force growth rate, I think we've been seeing pretty strong growth the last year. And so I wouldn't see accelerating from there just because of the lack of churn.

Okay. And what are your views on how far we are from seeing persistency really get back to that 80% level that you think is more normalized?

Yes. I think it's going to take -- that's an annual number. So it's going to take another few quarters of seeing refis being closer to 10% of the origination volume, a little bit moderation on home prices, right, because people can cancel out of MI, if they have home price appreciation and ultimately go and get an appraisal, although that's not where most of our churns come from this last year, it's really been, I think the refi activity has been causing the majority of the churn. So I think if you see the refi volumes start to tick down, which again, we expect it's going to, home prices moderating will help that. Again, from the standpoint of people not being able to phase out of having MI. I think all of those factors, we, quite frankly, expect over the next year on both accounts.

Okay. Got it. I recognize it may be a little early to tell, but any signs that recent hurricane activity is impacting delinquency trends, any kind of conversations with servicers that they're seeing issues there that could ultimately filter through and [Technical Difficulty] your delinquencies and reserves?

I'll take that one. All right. So you're right. It is early on. But I'd say right now, we're pretty optimistic about what the impacts that happened from Ida down in Louisiana, where it's a small portion of the book, but we did do some overlays with some different third-party services as far as storm surge and different things. And we see very little -- the infrastructure, quite frankly, post Katrina that we put in place helped a lot, at least so it seems. So we don't see much of any impact there coming. But we won't -- we wouldn't see those delinquencies probably until next month as they come in because of that delayed reporting. And I would say the same thing we did a preliminary analysis up along the Northeast and the [indiscernible] Mark and also didn't see much in the way -- obviously, a little bit more concentration of our portfolio there. But relative to what's at risk from these storm surges and such, we didn't see much that we worry about. So low level of impact is expected.

Okay. That's helpful. Same with credit, cures have far outpacing the defaults in the first half of the year. Any update you can provide on how that's trending so far this quarter? And for how long do you think this dynamic could be sustainable as delinquencies normalize?

Sure. Yes. Well, so we -- we -- in August, when we did the earnings release, we put out the July statistics and said -- because the numbers are -- so they're beginning pretty immaterial level of activity. We're back to kind of pre -- well below, almost below pre-COVID levels of new notice activity. So we stopped posting out for August going forward. But the trend has been very favorable to your point. So we continue through July, saw the delinquency, number of delinquent loans come down. This next 2 or 3 months is going to be -- probably it's pretty -- going to be pretty significant in the terms of resolutions, right? That's kind of when the peak of these -- the loans that are in forbearance are going to be coming to their end. September seems -- at least from the servicers perspective, September is the peak month. But for us, that's going to be a lag reporting, right? Because we're not going to get that reporting maybe until October -- of November. So they have been playing out favorably on the resolutions of the cures. Still no [ change ]. We don't update much during the quarter relative to reserves. We're watching those trends. I think at the end of June, when we looked at the delinquent cohort from the second quarter of '20, it was close to 75% -- 70% 75% had already resolved. Very few -- some had redefaulted, but a small cohort. So it still leaves us a little about 25% that had to be resolved. We pegged 7% of those going through. So we'll see. But at this point, no updates, but the backdrop to HPA, with home prices, income and et cetera, it seems to be favorable, but not enough yet to make probably a fourth quarter, probably adjustment or reassessment, probably most likely.

Okay. Have you got any intelligence from servicers on those borrowers who have yet to cure and kind of what their situations are and what the odds are for kind of a favorable resolution?

Not much. I mean a lot of anecdotal, right? I mean -- but the longer you -- I mean it's just the longer you stay in forbearance, I mean, there's a reason, right? We saw a lot of -- I mean say, 70% of that cohort, 75% had already cured and early -- resolved early on. So I think the longer these borrowers probably have a little bit more economic struggle that they're facing within their own balance sheet and income statements and then it will really reside back to what's the equity level of that house and how do we dispose of that. So I wouldn't think anything -- one thing that's driving there that's causing people. But just like everything else, the longer you stay delinquent, probably the higher likelihood you have of an ultimate default or a foreclosure or some type of involuntary action coming.

Yes. Yes. Any sense for those borrowers, how much equity is embedded and how likely there is ability to other than without there being any kind of MI claim being made?

Well, yes, I mean, we run the mark-to-market LTVs and when you look at it on a current basis, I mean the vast majority of delinquents have equity when you look at it at that level, but kind of a dangerous game to play, right, because it's at the CBSA level, and we have seen foreclosures take place for vacant properties, various reasons, and we're paying claims on those. So not all properties have well appreciated value. It certainly will mitigate some of the loss that is coming out. And then we also look at it at down [ 10% ], down [ 25% ]. What's the LT -- potential LTV, should there be a market correction on home prices. It's not that we're expecting one, but you've got to look at it not just the current side of things, but it's a factor, but we would over rely on that just because it's all about the location of the property and the condition of that particular property.

That makes sense. Turning to the cures on -- due to the COVID-related delinquencies you've gotten, how have those compared to kind of your expectations at the outset of the pandemic when you set the reserve levels?

Well, we expected the vast majority to cure and the vast majority are curing. But to the ultimate outcome, we said around the 6%, 7% claim rate on those 60-some thousand notices. And so we haven't made any adjustments to that. But the error rate is considerably less, right, because there's only, let's call it, 25% remaining of that population that we thought 7-ish would go. So next few months, again, that will really play out into whether we were overly optimistic or too pessimistic in that assumption.

Okay. Are you feeling like you were too pessimistic? Or is there any kind of [indiscernible]?

We're feeling that we could be one way or the other. I mean clearly, the environment has been favorable, right? I mean -- but there's still a big cohort to play out.

Okay. And so one of the questions is what will I take to reassess previous preserving, but there's probably no point, right? Because you're going to know one way or the other. And that is, of course, unless there are other potential extensions. Is there anything -- is it your view that this is it in terms of like the forbearance extensions?

It seems like it, but we thought it. So it seems like, yes, that is the case that we don't expect more extensions to come. But that raises out. So that is our working expectation that these will -- that 18 months is the max for -- and then shortens the 15 months for the ones that came after, the few that went into forbearance this year.

Yes. And so assuming there are no more extensions. I mean, is there a lot of inventory of still delinquent loans for the servicers to work through such that it could still take several quarters to ultimately resolve these and figure out whether they're going to be claims or not?

Well, yes, I think at the end of the quarter, we had 60%, so call it, 20-some-thousand of our loans in forbearance. So when they hit that 18 month, they've got to make a contact with the borrower to figure out the plan, most when you look at a lot of the data that's come out from, we don't get a lot of that real loan level detail. But when you look at like some of the Black Knight Data and others, a lot of them are being resolved with the extensions and of the deferral -- loan deferral program. So we'd expect similar types of outcomes for those. But yes, that's going to take -- I mean their services are ramping up. I mean they know this is coming. I think they expect the CFPB and others are going to be watching them more closely. Are very -- maybe not more closely, but certainly very closely on their behavior. So yes, that could take a couple of months to make sure they get all the right party contacts and the right resolution. That's why I say kind of through the end of the year from a reporting perspective, it seems to be the right time line before we could get better assuming no extensions.

Okay. Great. Shifting to reinsurance, could you give us some sense of what we should expect for future reinsurance transactions? And how those will impact the premium yields? And also, how ILN pricing compares today to pre-COVID levels?

Sure. No, I'll take that, Mark. I think for us, we've tried to be programmatic with reinsurance. We've used quota share going back to 2013, pretty much used a 30% quota share on all our new business. We tried to add different features along the way, whether it is the ability to terminate after a certain number of years, the ability to ratchet it down depending upon our capital levels and upon the pricing to be really constructive and really like the forward nature of those commitments, right? Do we -- last year at this time, but I think we're finalizing our reinsurance for '21 and sort of also had some portion of '22 covered at that point. I think that really served us well as we went through sort of this year. And then when you think about sort of the ILN activity, we like the features of that, obviously, from a loss absorption standpoint as well, capital relief and have found the pricing to be really attractive there. I think from a pricing standpoint, after -- if the onset of pandemic that market dried up for, let's say, that's 1 or 2 quarters maybe you could see people coming back to market maybe after a little after quarter where pricing was elevated, probably still constructive to be looking at it. We were able to take our time a little bit as far as coming back to market because we didn't need the capital at that point. But I think with where you see prices right now, it's pretty comparable to where you were prior to sort of the beginning of the pandemic, at least on the order of magnitude, that's sort of material feel like it's back in line with that. And again, so that's why we've been active in looking at ILN activity. Again, we continue to think about being programmatic really, that's somewhat dependent upon the volume we're writing. But if we're able to issue ILNs in sort of the $400 million bond area, sometimes that leads you probably a couple of years and still being able to do the quota share on top of that. From a premium perspective, I think we've sort of settled into the spot where the amount of reinsurance that we're putting on is really replacing reinsurance that's falling off to a large aspect. So if you look at the -- if you want, the drag on our premium and sort of reconciling from a direct premium to sort of net after reinsurance, if you look at the last couple of quarters, we've been in that probably 6.5, 7 bps sort of area. With us sort of now in the spot where we're pretty much replacing sort of is having a steady level of reinsurance, I'd expect that to be sort of in that range if we sort of continue to be programmatic in that regard.

Okay. How do you think about the right percentage of your book to reinsure going forward when you -- I mean the world is obviously different today than it was just a couple of years ago, right, or it's -- it's still cheap, right? It's still a very attractive form of kind of removing tail risk, but you're giving up earnings in an environment where you're -- if anything you're overcapitalized, you're theoretically early business cycle. Does it make sense to kind of dial that up and down based on where you think you are in housing cycles and kind of where your capital levels are?

I think we like the flexibility of being able to do that, which we're able to do much more easily with the quota shares and say, if you've got 2 or 3 years of seasoning on a book of business and you say, we just don't see the losses emerging from this book based on home price appreciation, so you can sort of recalculate ratchet that down or totally cancel that. But our view, quite frankly, has been that we're trying to replace sort of balance sheet capital to a large respect. So I think you should look at it as a lot of what we're trying to do around reinsurance is hopefully allowing us dividend capacity up from our writing company at FGIC to ultimately get to sort of cash at the holding company, which allows us to be able to give dividends back to shareholders and think about share repurchases. And so we're really thinking about that what the right level is. I think it's fair to say you want to be thoughtful about not getting over reliant on reinsurance, you still balance your capital, has a tremendous amount of value and utility. But with the way that the reinsurance is treated from a PMIER standpoint, in particular, we still find a very attractive sort of, I guess, replacement for some amount of our balance sheet capital in allowing us to hopefully free up for dividend capacity up to the holding company.

Okay. That's helpful. What's your view of the likelihood of consolidation in the industry over the next couple of years? What was your appetite to participate?

It's a question that I think comes up. There's not a year that goes by that we don't talk about consolidation in the industry. I think what's true is sometimes it's difficult to make the math work. Because in our industry with 6 players if you consolidate, go down to 5, I think as you hear us and others talk about sort of market share and where that could be. You really have to -- you're not going to take one market share, add another market share and sort of sustain that. I think we've seen instances of consolidation in the industry that have happened in the last few years where that played out, where you didn't have sort of the market share didn't sustain at the level it was prior to a consolidation. So then it's really got to be an expense savings on the other end. And so I think it's something that's always in play, I think the fact that there's been a lot of volume out there the last couple of years has probably made a less of an issue, quite frankly, right, because people are able to write a good amount of business write it at, I think, for the most part -- most of the industry have a scale to write and sustain where they are. So it's one of those where I think it's always going to be something that each one of us has asked. We're always going to be thinking about it. We're going to be looking at opportunities. But to a certain extent, there sometimes has to be almost a dislocation in valuation, I think, between some of the participants in the industry to make it worthwhile. I don't think that's existed in the last few years. but that's not to say we won't exist in the future. And then it's obviously subject to your regulatory GSE approval, all those different types of things ultimately to get it across the finish line as well. But it's something we look at, and I'd be surprised if the industry don't think about it on a regular basis, but just haven't find a spot where the math works.

Okay. And how do you think about becoming less model line and potentially acquiring something that's more complementary to the business?

Yes. I think the way we think about that, especially when we're generating the capital we are right now, those are logical questions for us to think about and talk about with our Board. Right now, I think we felt comfortable with our approach of being a model line returning capital. I think for us, it would take something that we would view as something that would be additive to what we're doing that we think it would probably not be helpful in us from a monoline MI standpoint as well. I don't think you'd see us going and doing something that's not adjacent. But I don't think we found anything compelling. And again, we've been approached by a number of parties consistently, quite frankly, over the last decade of looking at different opportunities. But really I think for us, we know what we know. So we'd look for things that would be beneficial, helpful, maybe diversifying in nature, but there hasn't been a compelling reason for us to go in that direction. And thus far, it helped that returning the capital is a better alternative for our shareholders than exploring anything alternative.

Okay. It's a good transition to the next question. With the stock trading close to book value, can you just discuss your view of buybacks and how aggressive you might be willing to be at these levels?

Yes. Mark, we suspended our share repurchase program at the onset of COVID and sort of just put it to the side and said it was probably the prudent thing to do to maintain capital, see how things played out. The good thing is things have played out, I think, better than expected in housing, right? We didn't have the stress scenarios that we thought we'd have from a need of capital. So that's why, on our last call, we talked about resuming share repurchase program. Our expectation, we had, I think, just short of $300 million, it's about $290 million, remaining on our share repurchase authorization through the end of the year. We said on that call, our expectation is that we would utilize that within the time frame. And I'd say that's still our expectation.

Okay. Great. Just bringing it back before we conclude to Washington, what are your thoughts on the prospects of more comprehensive GSE reform and what it could mean for your business?

Yes, it's a good question. I think it's -- our view was with the presidential election last year that would probably change the course of any GSE reform. I don't think we've seen the current administration play its full hand as to what they fully believe GSE reform will look like. Obviously, the rumors about potential changes at FHFA from a full-time director standpoint about having acting director and Director Thompson, who we know and who's been around. And I think that the administration, I think, is comfortable with sitting in that chair. I think to a large extent, the conversations about what utility can the GSEs provide, to think about helping underserved minorities with housing, that's the more of the discussion as opposed to what is the ultimate sort of end state of the GSEs. I think as we get sort of a year into the administration, I wouldn't be surprised if more things start to come up as far as what the administration thinks the GSE should ultimately look like. But I guess my -- if I was to wager on it, I would think they would start to talk more about what is the utility of the GSEs, and they should be sort of treating more like utility serving the market, which is a departure from sort of where we were in the prior administration, which was sort of a recap release and let them sort of compete. So it's tough, too, I would say, quite frankly, with the Supreme Court ruling that came down and looking at the FHFA director is a spot that's at the will of the President, knowing that, that could switch every 4 years. It gets very difficult, I think, to make a lot of headway momentum on full GSE reform, when you know that the regulator could change every 4 years. I think that throws a little bit of a wrench in any momentum, quite frankly. Not that there won't be discussions, I just -- we haven't seen it obviously over the last decade as far as getting real strong momentum in one direction that could get all the way there. And with that ruling, I think it's -- to me, it's even more difficult to get there to coalesce around a view and know that it would be sustainable.

Okay. Are there any other issues that you're tracking in Washington that we haven't discussed that could affect your business that investors should be aware of?

I mean, one headline -- one probably would be corporate tax rate, right, which I think everybody is thinking about. I think the most recent proposal as you hear is 26.5% for corporate, up from the 21%. That obviously is not net positive to us nor to most others. But I think from a competition standpoint, it doesn't put into a spot where we feel like any more disadvantaged from a pricing standpoint or other standpoint. It's really something where we'd have to look at from our returns and say, what do we do with pricing to reflect that? Are there changes overnight? I don't know if there's changes overnight, does it sort of factor in more over the long run as far as what changes can happen pricing in individual sort of sells and different sort of dynamic? I think that's the reality of it because I think we're all -- at least from MGIC's standpoint, we're going to stay very true to what our returns need to be and part of that return equation is what the tax is.

Okay. And is it still kind of your expectation that corporate tax rates were raised that hopefully the industry would raise pricing just is it lower pricing when the corporate tax rate was cut?

It's really tough to say what would happen, right, competitive marketplace, where rates have been going down. I don't know if I'm 100% confident that the industry raise rates overnight. But I think from our perspective, we're focused on returns. And that's part of our equation. I assume it's part of others in the industry as well. So I don't know if it's an overnight change as much as it's something that factors into the competitive landscape.

Okay. Great. Well, we're about out of time. So we'll end on that note. We really appreciate your time and insights today. Thank you very much.

Thanks, Mark. Really appreciate the opportunity.

Thanks a lot, Mark.