Rayonier Inc. (RYN) Earnings Call Transcript & Summary

Welcome to Citi's 2026 Global Property CEO Conference. I'm Anthony Pettinari with Citi Research, and we're very pleased to have with us Rayonier and CEO, Mark McHugh; and CFO, Wayne Wasechek. This session is for Citi clients, and disclosures have been made available at the corporate access desk. To ask a question, you can raise your hand or go liveqa.com and enter code GPC '26 to submit questions. Mark, I want to turn it over to you to introduce Rayonier, and we'll get into Q&A.

Yes. Thanks, Anthony, and thank you to Citi for hosting us today. I'm going to start by providing a high-level overview of Rayonier for those that are less familiar with the story, including some highlights of our recent merger with PotlatchDeltic and then we'll make sure we leave plenty of time for Q&A. Just for reference, I'm going to be speaking to the presentation that was posted to our website on Monday, under the heading Featured Presentation. All right. So let's start on Page 4, which lays out the rationale for our recent merger of equals with PotlatchDeltic. And really, the key theme here is that we believe that this combination creates a stronger organization that will allow the combined company to realize benefits that either of us could have achieved independently. In terms of the strategic benefits, the deal significantly expands our Timberland portfolio, which now comprises about 4.1 million acres. It also enhances our platform to realize value from both Land-based Solutions as well as HBU real estate. And lastly, it offers exposure to an efficient and scalable Wood Products manufacturing business, which really gives us another lever with which to optimize our overall portfolio value. In terms of the financial benefits, first and foremost, we're targeting annual run rate synergies of $40 million, which should translate to significant value upside. We also believe that the larger scale and better trading liquidity of the combined company will translate to an improved cost of capital over time. And lastly, from a balance sheet standpoint, the combined company is very well positioned with conservative leverage profile and significant capital allocation flexibility. So again, putting that all together, we really believe that this merger creates a much stronger competitor in the space. We think this is going to enhance our strategic optionality going forward. Skipping ahead to Slide 6. Here, we provide an overview of the asset profile of the combined company. Again, we now own approximately 4.1 million acres of timberland, including roughly 3.2 million acres across the U.S. South and about 930,000 acres in the Northwest, primarily in Idaho and Washington. In addition, we own 6 sawmills with total capacity of 1.2 billion board feet annually as well as on plywood facility. On the real estate side, we now have 3 real estate development projects with the addition of Chenal Valley from the PotlatchDeltic portfolio. And we now also have an opportunity to really leverage a leading rural HBU platform over a much larger footprint of land. And lastly, within Land-based Solutions, the combined company now has 80,000 acres under option for solar development as well as 154,000 acres under lease for carbon capture and storage. And notably, over 3/4 of the combined company's portfolio is in the U.S. South, and that's really the area where we see the most long-term upside potential from Land-based Solutions. On Slide 7, we've highlighted some of the key trends that are driving really future value creation opportunities within the portfolio. And they all generally center around transitioning land use towards a higher-value purpose, such as rural HBU, real estate development or Land-based Solutions. Rural HBU is a business that's been part of our strategy for a long time. We generally sell 1% to 1.5% of our land base into HBU markets, typically at premiums ranging from 50% to over 100% above timberland value. That's a business that's been very consistent for us over time. The Land-based Solutions and real estate development, that's really where we see the significant growth opportunity for the company longer term. Our Land-based Solutions business includes activities such as leasing land for solar development, leasing land or really subsurface poor space rights for carbon capture and storage or monetizing carbon stored and standing timber inventory into the carbon offset market. Our Real Estate Development business involves investing in entitlements and horizontal infrastructure improvements, really with a view towards enhancing the value of those lands and establishing a catalyst for growth in those areas. We only do this in very select market areas, really where we stand to benefit -- our portfolio stands to benefit from those investments in the adjacent portfolio. And this next slide illustrates why we're so excited about these new growth opportunities. What this chart shows is the potential value uplift per acre that we believe can be achieved by transitioning land use into some of these alternative land uses. So for example, if you take a 1 acre of U.S. South timberland that has a value of, say, $2,000 to $3,000 an acre, and you're able to transition that acre into a carbon capture and storage lease. That has the potential to increase the value of that acre by up to 5x. If you're able to transition that acre into a solar land lease or an unimproved development use, that has the potential to increase the value of that acre by up to 10x. And if we're able to transition that acre into an improved development use like our projects at Wildlight, Heartwood and Chenal Valley, we believe that has the potential to increase the value of that acre by up to 15x. So we really see significant value creation potential from optimizing land use especially as we grow the number of acres within the portfolio that we believe are suitable for these alternative land uses. Slide 9 provides an overview of the combined company's Timberland portfolio, again, roughly 3.2 million acres in the U.S. South and about 930,000 acres in the Northwest. As you can see from this visual, the portfolio is very well diversified in both regions. As we discussed in the past, timber supply demand dynamics are highly localized in nature. So we really see the benefit -- we really think there's a benefit in the diversification of this merger from our shareholders' perspective. Skipping ahead to Slide 11, we provide a snapshot of the company's wood products manufacturing operations. Again, as I noted earlier, we have rough 1.2 billion board feet of lumber capacity across 6 sawmills, which positions the combined company as a top 10 lumber producer in the United States. And while Rayonier didn't historically own manufacturing assets prior to the merger, we're certainly excited about the opportunity to integrate what we see as a very low-cost and large-scale lumber platform into the portfolio going forward. Skipping ahead to Slide 14. I'll just touch briefly on our Real Estate business and some of the trends that we've been seeing there. Over the last decade, both Rayonier and PotlatchDeltic have seen significant increases in our HBU value realizations. Both companies have also seen a shift in our sales mix towards these higher-value development sales. So we're certainly encouraged by the fact that land values continue to appreciate, despite some challenges that we've seen in timber markets here of late. And again, we're very excited about the prospect of combining these operations and leveraging that HBU platform over a much larger land bases merger. Skipping ahead to Slide 16. Here we provide an overview of some of our focus areas within Land-based Solutions. Now we've been working very hard over the last few years to build up a pipeline of opportunities in Land-based Solutions. This pipeline should translate to meaningful cash flow growth in the coming years. As I noted earlier, we have roughly 80,000 acres under option for solar development and over 150,000 acres under lease for CCS. So, as we start to see some of these solar options convert into long-term leases and as some of those CCS leases ultimately convert over to injection royalties, this really should drive significant growth in cash flow per acre relative to what we're able to generate on those lands currently through our timber operations. So you also see a lot of upside in carbon markets long term. Key buyers of carbon offsets are increasingly looking for very large-scale projects to meet their net zero ambitions. We feel like the combined company is going to be much better positioned to be that potential supplier of choice into the carbon offset market. So lastly, I'll just wrap up with some of our capital allocation priorities on Slide 18. One of the key factors that really allowed this merger to come together is the fact that both companies shared very similar philosophy around capital allocation. Our mantra around capital allocation has always been to be nimble and opportunistic with a view towards building long-term value per share. And that's absolutely going to remain our focus going forward. More specifically, just to touch on some of those priorities, we plan on maintaining our investment-grade credit rating, returning capital to shareholders through sustainable dividends, repurchasing our shares opportunistically and longer term, investing in value-accretive growth opportunities when it makes sense to do so. With all that said, we certainly see buybacks as one of the more compelling capital allocation alternatives available to us today. And I note that we have been active in the buyback market here recently. So in closing, I'll just reiterate, we believe we're very well positioned post merger to create value for shareholders, and we're looking forward to getting through the merger integration. And with that, Anthony, happy to open up to questions.

Great. Great. Thanks, Mark. That was extremely helpful introduction. Maybe if we can go into the individual businesses in a little more detail, and I'd encourage people to jump in with questions. But maybe if we can just start off with Timberlands and in the South, can you talk about market conditions in terms of pricing activity, maybe broad thoughts on '26 for your core Timberlands business, what you're seeing?

Yes. Sure, 2025 was certainly a tough year in the Southern Timber business. It was kind of a perfect storm of hurricane salvage volume in one of our larger market areas in the wake of Hurricane Helene late 2024, coupled with really dry weather conditions that just kind of exacerbated that supply imbalance. And then you couple that with some mill shutdowns we saw in the area. It was certainly a challenging year. We certainly saw some pricing headwinds. We feel as though that, that's largely settled out. We have guided toward modest uptick in pricing in 2026 relative to 2025. So again, it kind of feel like we're bouncing off the bottom a little bit here. But overall, we think we're through some of the more challenging elements of what we've seen in the last 12 months.

Great. And is there any kind of distinction you'd make between kind of sawlog market conditions and pulpwood market conditions? And then within the South, are you seeing any kind of variation between maybe coastal markets, inland markets, any comments there?

Yes, sure. I mean in terms of sawlogs, I mean we certainly saw a greater stability in sawlog pricing in 2025 relative to pulpwood pricing. And again, we talked about kind of what the factors driving some of those declines that we saw in pulpwood pricing. The longer-term story or set up for sawlog markets, I think, is more constructive. We have seen a fair amount of capacity come out of Canada. We have seen U.S. mills ramping up production in response to that. And so even in a relatively flat demand environment, we would expect to see some momentum in sawtimber prices in 2026. And then just in terms of the geographic differences between inland and coastal, look, the coastal markets historically have been our strongest markets from a pricing standpoint, particularly pulpwood pricing there has historically been very strong. That's also where we've seen some of the greater weakness here of late in terms of those price declines. I will say that those markets remain some of the strongest markets in the U.S. South, the pulpwood pricing in those areas, even with these declines is still among the best in the U.S. South, but it's really been the area where we've seen some of these stiffer headwinds in the last 12 months.

Great. And I'm wondering if you can give us the same walk through for the Northwest and maybe touch upon the Idaho index pricing, which is a little unique.

Yes. I'll maybe turn it over to Wayne to touch on that.

Yes. Our Northwest region, the price data is a little bit different than the U.S. South, where especially in Idaho, we're the largest private land owner in the state of Idaho. We own over 625,000 acres. And in that market, because of our large presence, we're able to have an indexing arrangement in that market. And what that does is we're indexed to the price of lumber. So approximately 75% of our sawlogs are indexed the price of lumber. And certainly, that provides a benefit to us and where markets trend upwards. But it also provides benefits to our customers as well because they have a dedicated supply of logs that they need to run their mills. So it benefits both sides, but certainly on our Timberland business where we've -- especially during that kind of COVID, post-COVID era, we saw a significant upside in log prices because of that indexing arrangement as compared to what we've experienced and what we experienced in the South.

Just given the product mix in the Northwest, we're upwards of 85%, you saw timber relative to pulpwood, where that mix in the U.S. South tends to be more kind of a 50-50 balance. You certainly have more direct exposure to what's going on in lumber markets and you tend to see kind of a tighter correlation to what's happening in lumber pricing and log markets in the Northwest relative to the south.

Great, great. I'm wondering if you could talk about -- we talked about logs. I wonder if you talk about the market for timberlands themselves in terms of trends you're seeing dollar per acre valuations, sales activity, how you compare that versus the last couple of years?

Yes. Like we talked about on our last quarter earnings call, Timberland values continue to be very strong in the private market. By our account, there's around $10 billion of capital available for Timberland M&A. We typically see $2 billion to $3 billion of Timberland assets trade hands on an annual basis. There's not a lot in the market right now, but valuations have certainly held up very well. And again, we talked about how that impacts our HBU business as well. We've seen a very strong trajectory in land prices and HBU values. We certainly haven't seen it in the stock price. But again, we've been catalyzing on that from a buyback standpoint here recently.

Great. In terms of Timberland returns, can you kind of level set us in terms of maybe what level of returns Southernland timberland owners are targeting and maybe the components of those returns, how that's changed? Or if there's a way to think about cap rate for timber?

Yes. Recognize that Timberland is generally underwritten on a discounted cash flow basis using real discount rates. And those real discount rates are generally kind of in the 4% to 5% range. And so kind of, call it, 4% to 5% real on a nominal basis, assuming kind of 2% to 2.5% inflation, probably call it 6% to 7%. I guess the way the Timberland generates return is quite different than other asset classes in the sense that your timber harvest cash flow is one component of that return, but then you have these other components of returns such as productivity enhancements. The fact that stands that we're harvesting today were planted 25 years ago using then current tree genetics, then current silviculture applications, the stands that we're planting today, we expect to get greater productivity off of over time. Obviously, HBU is also incremental to that. The fact that within our Southern portfolio, we're typically selling 1% to 1.5% of that portfolio annually, again, at premiums, 100-plus percent above timberland value. So that's additive to that return as well. And then really, the new component of growth that we've talked a lot about is Land-based Solutions. Again, that ability to convert land that as timber is generating, call it, $75, $80 per acre of EBITDA into these alternative uses that can generate 5, 10, 15x that. And so again, it's a little bit -- if you look at a pure EBITDA multiple on private market timberland transactions based on harvest cash flows, those multiples are typically 40x. But again, that doesn't really tell the whole story around what people are underwriting from a return standpoint.

I don't know if there's any questions. But if we can move to Wood Products and before we talk about kind of market conditions within Wood Products and lumber. Just wondering, PotlatchDeltic had the most sensitivity to lumber prices or leverage to lumber prices of the timber REITs, Rayonier didn't have a Wood Products business. As the 2 come together, I'm just wondering if you kind of philosophically how you think about the place of Wood Products within the portfolio maybe over the cycle?

Yes. Again, we find the addition of this manufacturing platform into the portfolio, we find that to be appealingly long term. I think our thinking, Rayonier's thinking over the years has certainly shifted a bit in terms of openness to owning manufacturing assets. And some of that is just around our ability to control our own destiny in markets that are important to us. We've talked a lot about growth drain ratios and how those can impact timber economics in local markets. Historically, Rayonier didn't really have an ability to influence the drain or the consumption of timber in any given market area. And particularly as we've seen some headwinds and some mill shuts in some market areas that are important to us, suffice it to say, I think we see some value in the ability to control our own destiny. Rayonier was never going to go out and build a greenfield mill or buy a mill on a one-off basis. We just -- that wasn't a core competency of the company. But now with this very efficient, low-cost, scalable with products manufacturing platform, that's at least something that we can look at on a go-forward basis. That's not to suggest that we have ambitions to meaningfully grow that business, but we kind of look at it as another tool in the capital allocation tool kit with which we can optimize the overall portfolio value of the company.

Great. Great. And then just moving to Wood Products, kind of market conditions, you guided to kind of 1Q EBITDA modest recovery. I think random lengths prices are up maybe 15% year-to-date. So we've seen this kind of a lumber recovery. Just wondering if you could talk about current market conditions and any kind of read-throughs as we get into kind of the spring building season.

Yes. I mean we saw a nice lift in lumber prices early in the year. It's kind of flattened off here in the last few weeks, but still kind of meaningfully higher than what we saw call it, 4 to 6 months ago. And so overall, I'd say a positive backdrop, certainly relative to the second half of 2025. But really, what I think is going to drive potential incremental price improvement is really some incremental relief in mortgage rates. Some incremental demand on new home construction and R&R activity. Again, we talked a lot about the mortgage locking effect, the impact that, that's had on resale activity and that certainly hampered R&R demand. People tend to remodel home, either right after they buy it, or just before they're about to split. And so the fact that there's been this sort of dearth of resale activity here of late, certainly been a headwind for R&R spend. But again, if we see some incremental mortgage rates kind of briefly drop below 6% and so it's kind of a big headline that was sort of a psychological hurdle for a lot of people. I think we're modestly above that right now, but trending in the right direction. So again, overall, a more constructive backdrop, we think, than kind of where we were sitting 6, 9 months ago.

Great. Great. And then, I mean, last year, we saw tariffs, import duties, Section 232. I mean, Canadian lumber, I think it went to 35%, but we didn't necessarily see big improvement in U.S. lumber prices. And I'm just wondering if you could talk about the dynamic with Canadian lumber and the tariffs or the import duties if you're seeing maybe a lagged impact or how you think about that? And I don't know if there's a way to think about sort of cash cost for maybe some of these higher cost producers.

Yes. I mean we didn't see the immediate impact that perhaps some had anticipated. But I do think the more recent lumber price response that we've seen has been largely supply driven. I mean, demand has been relatively flattish. And so we have seen some lumber price growth here in the last few months. And I think that, that was supply driven. I do think that, that was related to the duties -- increase in the duties as well as the Section 232 tariffs. So again, overall, Canadian mills are generally not profitable today with the duties and the impact of the tariffs. That has really accrued to the benefit of U.S. mills. And again, that's translated to some lumber price improvements. We ultimately think that, that will translate to some sawtimber price improvements as well.

Great. And you talked about Real Estate, but I'm wondering, I guess, 2 questions here. First, the guide that you gave for, I think, $180 million to $200 million of EBITDA, if there's any sort of finer point that you can put on mix, property types, sort of HBU values that are embedded in that guidance.

Yes. We generally don't provide a breakdown within our Real Estate guidance. As we talked about extensively in the past, Real Estate results tend to be pretty lumpy. They tend to be driven by a handful of larger transactions. We're always kind of generally managing to kind of an overall annual target. There is some cadence to this business. When you own millions of acres, some portion of it invariably falls out into this HBU market. And so there is some level of predictability there. But again, when we're trying to kind of guide to what is a kind of reasonable expectation of what the next year looks like, we generally point to the historical averages. And that's we're going to sell 1%, 1.5% of our land base in the U.S. South and generally targeting 50-plus percent premiums above timberland value. But like I said on the earnings call, those have more recently been trending well higher than that. I mean for the Rayonier portfolio, we've been realizing premiums well in excess of 100%. So that business has really been a bright spot in the portfolio. Like I said, land values have continued to appreciate, which makes sense kind of in the environment that we're in, kind of fluff by quality, hard asset value. Again, it's logical that land values have continued to move up, and we're really trying to capitalize on that through our HBU business. But no real kind of color on the specific breakdown within that Real Estate guidance.

Maybe sticking with Real Estate. I mean you have these unique development properties with Wildlight, Heartwood, Chenal Valley. Can you just talk a little bit more about those and sort of Rayonier's role like what you're doing, what the earnings contribution?

Yes. Our role is really to get entitlements on the land and to make investments in horizontal infrastructure improvement. So we're not doing any vertical development. We're not looking to produce income generating assets through that business. We're really creating that catalyst for growth, investing in those horizontal improvements and then meaningfully enhance the values in that area. And just to be clear, our strategy here has always been about really enhance value of our larger footprint of land. When we initiated that Wildlight project, we said, look, if we own 1,000 acres here, we would never undertake this project. We don't aspire to be real estate developers. Candidly, at the time, it wasn't really a core competency of the company. I think it has become a core competency of the company over the last decade. But really, the play for us was always, we own this very unique high-value portfolio of land. But importantly, we own 50,000 acres within a 10-mile radius of Wildlight. And so the play for us has always been to have those investments stand on their own from a competitive return standpoint. But really, the broader play for us is enhance the all of that surrounding land that we own in that area. And so if you look at -- you go north from downtown Jacksonville, 20 miles, you get to A1A -- intersects of A1A and 995, Rayonier essentially owns the vast majority of the land in the Northeast and Northwest quadrant of that intersection of A1A 995. So it's a very unique portfolio of land. It's an area where it really was poised to benefit from these types of investments, and we've been really pleased with the momentum that we've seen in that project. And again, Heartwood was a very similar story, proximate to Savannah, Georgia. Chenal Valley is a bit of a different play in the sense that, that project started back in, I believe, in the mid-80s. And so it's in the relatively late stages of its life cycle. But it pretty consistently generates 100 to 130 finished lot sales annually. And so it's a pretty steady contributor to earnings at this point, but relatively stable, whereas Wildlight and Heartwood are certainly kind of more early innings, and we're anticipating a pretty meaningful growth trajectory from where we are currently.

Great. Great. And then Land-based Solutions, can you talk more about solar, CCS, I guess, mineral land resources and carbon markets. If you were to frame those opportunities from kind of a near-term perspective and then a long-term perspective, can you just walk us through your exposure and where you may be the kind of the most upside?

Yes. I mean from a -- I'll start with the near-term perspective, I think solar probably has the most kind of visible growth opportunities as we sit here today. As I noted in the presentation, we have roughly 80,000 acres under option for solar development. We currently only have 600 acres that are actually in a solar lease. And so really, the opportunity is that as those options mature and the -- some portion of those options are ultimately converted into sold our land leases that will translate to a very meaningful lift in cash flow. Again, generated, call it, $75, $80 per acre of EBITDA last year in our Southern Timber business. The rents that we're seeing on the solar land leases are upwards of $800 or even $1,000 an acre. So a very meaningful lift in cash flow, and we're solely acting as a land lessor. So it's essentially 100% EBITDA free cash flow conversion for us. We don't have any capital obligations associated with those leases and they generally have some form of a CPI-type escalator in them, typically with 25-plus year terms with multiple extension options. So we view it very high quality and probably high multiple cash flow. So that's a very meaningful opportunity for us. And given all the work that we put into building up that option portfolio really in the last 3 years, we expect that that's going to start to turn over and start to materialize in leases here over the course of the next couple of years. So again, that's probably the most visible, tangible near-term opportunity. In terms of carbon markets, I'd say that's an area where we've probably gotten more bullish in the last couple of years. Candidly, for Rayonier, economics of selling carbon credits just hadn't ever really worked for our portfolio just given the relative price point that we could sell timber for in most of the markets that we're in. You recognize you have to do something different on the land base to generate carbon credits. You can't just continue to harvest timber and sell carbon credits on top of that. You need some form of harvest deferral or investment in incremental carbon stocking on the land in order to merit the carbon credits. We're now seeing with some of these large-scale buyers coming into the market and again, really wanting these large-scale projects, they're willing to pay for quality projects. And that pricing and that sort of relative to NPV math, I'd say it's getting much more compelling relative to what we saw even just 2, 3 years ago. So doing a lot of work on that front right now and again, pretty optimistic about the long-term prospects for that business. And again, also optimistic about our ability to be a meaningful supplier into that market with the combined company. Again, the large-scale buyers, they want very large-scale projects, and that necessitates a large land base to support that. So again, we think the merger really positions us as well in that market. Carbon capture and storage, that's one that we're, again, likewise, very optimistic about, but it's taking longer to materialize. These classics injection well permits, just take a long time to kind of work through. Again, we have 150,000 -- 154,000 acres under lease for CCS currently, but we're working through the process of getting those sites with the counterparties to get those sites ultimately permitted. And where we see the big lift on those or potentially the big lift on those is when those lease payments convert over to injection royalties. But again, there's a long process to get to that point. So probably longer dated as we kind of think about how that might contribute to cash flow, but very optimistic about the pipeline we have currently to support that over the long term.

Great. Have policy changes with the administration have change the opportunity set for solar CCS or credits or has not been impactful? Or how would you characterize it?

I don't think that it's been significantly impactful. I mean, certainly, all else being equal, the rollback of some of those economic incentives, particularly around solar development has necessitated some kind of reanalysis of NPV and kind of IRR expectations. But overall, solar is still very competitive with pretty much any other form of electricity generation. And so we're still -- we haven't seen kind of these option agreements get canceled at scale. We're still seeing a lot of momentum behind that business by most estimates or something like 30 to 40 gigawatts of new solar capacity additions are expected to come online annually for the foreseeable future. And just to put that in context, it requires about 7 acres of solar panels per megawatt of generation capacity. And so again, that annual estimate of utility solar additions of 30 to 40 gigawatts implies a land need of about 210,000 to 280,000 acres per year. So again, a very significant land need for these -- for the build-out of these solar projects.

Great. Great. And maybe kind of saving the best for last. On capital allocation, I mean you do have balance sheet capacity. Can you just talk a little bit more about optimal leverage maybe the opportunity buybacks? And then on dividend, Wood Products profitability historically is kind of volatile? Like how do you think about dividend in -- given potential volatility in Wood Products pricing?

Yes. I mean starting with leverage, we've been pretty clear around our leverage target of wanting to maintain net leverage at less than or equal to 3x net debt to EBITDA. And so -- and we stated that on mid-cycle EBITDA. So recognizing that we'd characterize Wood Products contribution is being more of a trough in the cycle currently. We'll kind of measure that long-term leverage target more around our view of mid-cycle EBITDA. In terms of dividend funding, we feel pretty comfortable with where the dividend sits today, certainly from funding standpoint, and that's with the lumber business lead at a trough point in the cycle. We're going to have some organic cash flow growth around the synergies realization through the merger. And obviously, long term, we want to grow the dividend. We want to grow cash flow to support the dividend, but some of that is going to have to kind of come from pricing growth in sawtimber in lumber, which we think will come over time, but we are very comfortable with where the dividend level is today.

Great. Well, we're coming up on time, but I'm wondering if there's any kind of final take-home messages that you'd leave folks with on Rayonier and the opportunity of the combined company?

Yes. Again, I think we feel really good about the recent merger with PotlatchDeltic. We think there are some pretty meaningful synergies opportunities there, really optimistic about just the prospect about improved cost of capital over time with the larger platform. We feel really good about where the balance sheet is at in terms of capital allocation flexibility. Like I said earlier, we have been buying back stock here of late and really try to capitalize on that disconnect that we see between private market values and where the stock is trading. So still a lot of work to do around the merger integration, but we think we're off to a very good start here.

Great. Great. Well, Mark, Wayne. Thank you.

Thank you, Anthony.