Stifel Financial Corp. (SF) Earnings Call Transcript & Summary

Good afternoon to everybody in the room as well as those of you on the webcast. I'm Steve Chubak. I cover diversified financials here at Wolfe Research. Really excited to introduce our next 2 presenters, Ron Kruszewski, the Chairman and CEO of Stifel Financial as well as Jim Marischen. Look, Stifel has had a really exciting year in terms of wealth momentum that they're seeing, and that's certainly going to be the primary focus given this is a wealth conference. But at the same time, there's a lot of exciting growth that's happening on the capital market side, particularly within financial services. So certainly no shortage of topics to cover, but really excited to delve into each of those, Ron. So thank you so much for being here.

Glad to be here. Thanks for having us.

Yes, of course. So look, you always have interesting perspective around the macro. So I was hoping you can provide just an update in terms of what you're seeing...

Excuse me, I know you have a bunch of -- wait, I'm getting a call here. Hello? No, we're not for sale. Thank you. So we put that together [indiscernible]

I was going to cover that later.

Yes, I know you are, but...

[indiscernible] early.

Everyone is here to hear me say that, right?

I was going to talk about what you're going to buy.

What?

I was going to inquire about what you're going to buy. Forget about sales.

Well, yes, that's how I've answered the question. Anyway, sorry.

No, you have to inject a little bit of [indiscernible]. I really enjoyed that.

Exactly. Sorry, your question again?

[indiscernible] the operating environment given the macro backdrop across both wealth as well as capital markets and what you're seeing.

And I've been talking, I said that many people talk about normalization and normalization is like this. Well, normalization at Stifel is an upward sloping curve. It has been for my 28 years as CEO. We're a growth company, it's like this. The question is where you are relative to that curve. You're either below normalization, which we were in '22 and '23. And today, we're kind of running above what I would call normalized things. So we can talk and I can tell you for the next -- I don't know how long we have here or I can tell you in the next 2 minutes across all of our businesses, wealth, banking, trading, both equities and fixed income, investment banking, advisory, I mean, business is good. And the business is good because the environment, the macro environment. I was in Washington last night for the dinner with financial services, and we're all talking between rates, credit spreads, activity, the need for sponsors to return money to limited, a regulatory environment that is encouraging M&A, not discouraging it. Business is good, and it's really running above trend. Now you're going to ask me how long that's going to continue. I don't know. But right now, business is good.

What's your crystal ball telling you?

My crystal ball is not -- it's telling me that we've had a -- we also had a longer time where we were below normalization, all right, both for the same reasons, an inverted yield curve, capital markets that were -- credit spreads that were too wide with rates, et cetera, and a regulatory environment that was not conducive to M&A activity. And that went on for almost 3 years. So if the pendulum swings back, I would say that absent some real geopolitical something or another. But in terms of just the economic activity, we've got a little bit of runway here.

Great. I did want to spend some time just digging into the wealth business in particular. So you certainly sounded more sanguine on the last call about the recruiting pipeline, what you're seeing just in terms of inbound interest. Look, Ron, you've always prided yourself on scoring quite well in terms of J.D. Power, always getting really good feedback from your advisers, how is that resonating in the marketplace? And are you seeing any uptick in inbound and recruiting backlogs relative to, say, where we were 12 months ago?

The environment is -- it ebbs and flows. I said sort of like the ocean and you're trying to predict the size of the waves tomorrow versus the size of the waves today or whether there'll be a tsunami or something. What I say to our investors, and I will say is that what you have to look at who are the net winners and losers in the overall situation of recruiting. And there's a number of winners and losers. I won't name them, although I'm -- I can tell you, Stifel is a winner and you just look at our past results. And we have been for almost 30 years, 28 years, we've grown consistently. That framework has not changed at all. So the only thing that will change sometime is the competitive environment, will we pay more or less and we regulate our activity that way. We -- in very good markets, we tend not to be as active, both in M&A and in recruiting. So our recruiting pipelines right now are as good as they've ever been. We're getting as much engagement. The one thing that has changed for Stifel is that 10 years ago, we would hire in a quarter, we could do -- I'll just pick the numbers so I can do the math. We'd hire 10 advisers doing $7 million. So we're doing $700,000 each. Now we're hiring 1 adviser team doing $7 million. We -- our ability to attract higher teams that are doing more holistic and bigger business relative to our platform is as good as it's ever been.

And do you feel like that's the recruiting pool at the moment that's currently the most attractive? Because we've actually heard that from a number of folks that have been here, Ron, that given some of the challenges at the wires, in particular, that, that's provided a unique opportunity to recruit or attract some of those advisers to the platform.

I don't think it's really any different today than it was 5 years ago. I think our ability -- our ability now to recruit is much better than it was 5 years ago. But I think the opportunity set is relatively the same. I hear about all having trouble this or that or whatever. This is a long, long business, a long runway to this business, and we're well positioned for it. So the real question you need -- the analyst need to be figuring out is who's crossing the threshold of being a net winner versus being a net loser. And then yes, those reasons as to why. But right now, we're still on the right side of that line.

Well, I mean the beauty of that is we do have an adviser on the move tracker, so we can certainly track all these trends, at least in real time to the best of our ability. I suppose technically, the data is slightly lagged from the U5 filings. But the one thing that we have noticed, Ron, is that you've been attracting, as you know, larger adviser teams that are also much more productive. I know historically, you talked about delivering mid-single-digit type organic growth, slightly better than the industry, certainly. But is the focus more on same-store and driving just more productive teams to the platform versus necessarily new store and just growing the sheer number of advisers?

All of the above. I mean, all of the above. Look, when you get to the large -- I've always like when people talk about some productivity as if we have some magic pixel dust that we're going to put on clients and they're suddenly going to do more business with us or anyone. I'm telling you that if you took 1,000 advisers from X, Y, Z and 1,000 advisers from Stifel, all productive, and you put them in the pool and then you took 1,000 out randomly, okay, the NNA growth to be about the same. It just -- we're dealing with large numbers. And so what does move that is net recruiting, right? And what you don't track, which is why sometimes you'll say, oh, your recruiting appears to be lagging, is -- you should also track, if you could, the cost of those acquisitions. What's the cost of recruiting? And you don't. You can see the gross numbers and then you see it later in profitability, you see it later in comp ratios if you overpay for a team. That -- there's no free lunch. We think we're one of the best of net profitable ROI recruiting, hard for you to measure.

No, it is. I mean we could always ask the other folks on the other side.

You can look at profit margins and growth and growth in profitability and growth in EPS, and that will also tell you.

You do have best-in-class margins in the wealth segment. So that's a good opportunity to highlight that for folks.

It sounds like we have some new disclosures coming in.

Yes, yes. The other piece though, too...

I talk and he has to do all the work.

Yes, that works.

It's pretty terrible gig, Jim. Sorry about that. The IBD channel is certainly one where when you've done a couple of deals in the recent past, you've got like a small independent business, and it's ultimately something that you decided not to scale and to offload. And you've also talked about that decision in the context of focusing more on profitable growth. Just curious, Ron, if you can just contextualize why you haven't opted to lean into the independent channel. And given there continues to be the migration towards independents, whether your thinking around this has evolved?

Whether my thinking has evolved. Well, let me answer that question first, and then I'll come to the channel question second. So I think that history, as always, will tell the story if you want to look at it. So people say, "Oh, you have a false start, you do that -- no, we have not had a false start. We've had an independent channel since I joined the firm in 1997. There was -- it was called Century Securities. It was Stifel's independent channel. And to provide some context to that, at the time, Stifel's revenues were about $100 million, and the independent channels revenues were close to $20 million, okay? So fast forward 25, 26 years, Stifel's revenues are $5.5 billion, and our independent revenues are, let's just say, maybe slightly doubled since '97, okay? And so maybe there's just -- weren't just that focused on it. And when you get around to your second question, which is the channel, what we decided that from the investing public, there's 2 things I would say. One is advisers, investors. Investors, you have to look at them. You're going to -- you have the first decision tree for investors, are you do-it-yourself or do you want advice. And we, as a firm, have decided that if you're a do-it-yourself or well, then that's not our market. We're not going to focus on it. We're not going to do that. We're going to go after the advice channel. That's the same on the adviser side. There are many advisers who will say, I want to be independent, and they'll say the other will be, I want to be affiliated with a more -- a firm that provides all of the tools, which is what we think the W-2 channel does. So we've just decided we're going to focus on the ones that want to be -- which is our fully -- that you call it W-2 channel. That's where our focus is. That's nothing against the independent channel. Many, many people want to do that. We're much better at what we do, and we weren't as good at the independent channel. It was a channel conflict. I had a tough time managing it and how we didn't grow it. So that's it. And our independents will be much happier in the new situation with a great company, and we will focus on what we do best.

Makes all the sense in the world. Well, the other piece I wanted to touch on is NII. And certainly, in anticipation of some incremental rate cuts, you've taken some actions to at least mitigate your sensitivity in this interest rate cycle. I was hoping you could speak to your outlook for NII growth given even in the face of rate cuts, you have some deposit pricing flex, you're growing loans nicely at the same time. And the hope is that with lower rates, we should get some incremental deposit growth. So hoping you could speak to some of those building blocks and how it informs your NII outlook.

I'm going to answer quickly, but then Jim, I'm going to let you weigh in on what you just said up here and not have anything to say. But I will say this, okay, because I anticipate -- I don't know where you are in this, but I anticipate like 5 questions in a row about the bank, all right. NII credit, this is...

I've got just one more.

Okay. Well, good, then I did. But let me start by saying this. Stifel is not a regional bank or a bank. We're a bank holding company. We have $40 billion of the bank. However, most banks, our size banks will derive 85% to 90% of their revenue from NII and then the other from fee. At Stifel, we derive 20% of our revenue from NII and 80% from wealth and banking. So the bank is an integrated part of a bigger business, not the bank. And the reason I say that is because of that, we are not -- feel compelled to take extra credit risk, feel compelled to grow, to try to worry about loan demand. Our loan demand is off the charts relative to the size of our 2 funnels feeding that business. So I just -- I want to say that. But I hate getting into the details of NII and deposit betas, and so I'm going to let Jim answer that question.

Happy to chime in here. So the first thing I'd say is we are relatively rate agnostic. Everyone talks about deposit betas, and we've talked about the prominence that the Smart Rate product has taken in terms of the total stack of the deposits. And that is essentially going to have 100% deposit beta. So that's going to be instant repricing as rates come down. I think the thing that people talk about less is the fact that our deposit beta kind of on a blended basis is very similar to what we see on the asset side. So whether rates go up or rates go down, we're really not taking any interest rate risk bets, as Ron talked about. I think the other important thing to think about is the growing balance of deposits with the investments we've made with our venture team. We've been growing deposits at a clip of over $1 billion a quarter and just made some fairly significant investments with some, I think, 15 new hires within the venture group. And that balance of deposits continue to grow. And then you think about the fact that typically, in the venture space, you're talking about 4, 5, 6:1 deposits to loans, you're able to reinvest that back into the fund banking space, which is a relatively low-risk asset class, which has a lot of demand. And so we're able to put those deposits to work, earn a very nice spread to maintain kind of a rate-neutral posture in our balance sheet and puts us in a pretty good position.

And let me -- what he just said, but I want to go back to your first question about recruiting, okay? The reason we're winning at recruiting is the way we approach the bank, right? And what you will see and what -- even though we say this, we're not -- our shareholders are not paying us to take interest rate risk bets. They're not paying us to get our NIM extra wide because we're taking too much credit risk. At Stifel, and the reason we went at this is that we integrate the bank into wealth where many of the large firms integrate wealth into the bank. And that is the hugest difference in the world. Which are you doing? Our bank is integrated into our business. We're not integrating our business into the bank.

And the other benefit we could see is if rates keep coming down on the front end of the curve, I think we have over $20 million -- maybe $23 billion in short-term treasuries and money market mutual funds today. That money could come back into the market, would be great for the wealth management business, comes back into sweep or smart rate, we can utilize it in the bank. So that's another funding source that I think is a little underappreciated as well.

That's a really good point. And I did want to just get a sense as how you're thinking about loan growth. And that's going to be my last question about the bank, Ron, rest assured. But you've seen some really nice growth in lending over the years. And admittedly, there's a lot more sensitivity around things like NDFI risk and the like, but you're comfort at least leaning in from a credit perspective, recognizing that we've been in a benign environment for an extended period of time.

I'll let Jim talk about what we do, but our funnel to choose from because, again, the bank is a small part of our -- we have $550 billion of wealth assets. We've got a trading business. We have institutional corporate finance, we have leverage. We have all these capabilities. So our challenge is choosing wisely as to our opportunities, not worrying about where we're going to get loan demand from. We have plenty of loan demand. So anyway...

So I've touched on fund banking, and that's probably one of the biggest opportunities we have today. But again, we're still generating at a very nice clip, 1 to 4 family residential mortgages, securities-based lending and other areas. That's probably 70%, 75% of our retained loan portfolio and where you're going to see the most growth going forward. And I think as we sit here today, we continue to evaluate the portfolio. And if we think we see an area that doesn't meet the risk-adjusted returns or if we're taking too much risk in one area, we'll exit that book. I think a good example of that is earlier this year, we sold nearly $500 million of kind of lower EBITDA leverage lending book and just derisk from that position. I think it was a well-timed sale...

Exited the business.

And exited the business. And so it all goes back to the strategy Ron was talking about. We're not getting paid to take credit risk and so be very conservative in the loan book.

That all makes sense. And maybe just switching gears to the capital markets side because, again, I don't want to talk about the bank much longer, but we are going to talk about bank M&A, if that's all right, if you don't hold me.

I would love to talk about bank M&A. All right, that one, that's fun.

Okay. I'm glad that we're aligned in that regard. So you were talking about the fact that at least within wealth, it's really about taking market share of the available advisers in motion. Similarly here, we know that the capital markets are inflecting positively. There's a lot of good momentum there. You've actually been taking share. And a big part of that is the strength of your financial services franchise. I was hoping you could speak to the outlook for bank M&A consolidation activity, what you're seeing in terms of the backlog and the durability of those trends given some of the deregulation that we've seen.

Yes. Well, first of all, I do want to say because I'm remembering this is podcast, I want to reiterate to all my banking partners out there. Stifel Bank & Trust is a great business, okay? I want you to know that. You can pull our separate P&Ls, one of the top-performing banks in the country, all right? And so integral to what we're doing, but it's integral, not overriding. And that's -- I just keep making that point. Now we'll get to some of the fun stuff. I mean, bank M&A, think about the environment, think about what happened. It's sort of -- we've gone from an inverted yield curve, uncertainty, uncertain credit and starting in the year with uncertainty as to tariffs, uncertainty as to tax policy, not quite sure who the new regulatory heads were going to be of the various agencies, which used to be in bank, you had to worry about the FDIC and the OCC and the head of the Fed. And then you had to add to that mix recently, the DOJ, the Department of -- every department weighed in on M&A. And quickly, that shifted and that the yield curve normalized, the [ AOIC ], whatever thank you, that's narrowed. So now the environment has gotten good and you have an administration that has taken the risk. I used to sit with management teams, and we talked about the biggest risk of doing a bank merger was the time to approval. That's a risky time, as you know, from some banks that either never got approved or took a year to 2 years for approval, that's a risky time. That's gotten shrunk down. So the short answer is that the environment is very conducive. And I think we're in the early innings, both because of delayed deals and the environment. And then frankly, if you look forward, people say, well, can the midterms impact anything. But the only thing the midterms could do is maybe have -- give you a view towards administration that would not be as favorable to M&A, which probably would accelerate business. So that's all good. The good news is that we did the KBW deal back 11, 12 years ago now. And everyone, those of you that deal with KBW, all the traders research, the whole franchise is still part of it. And that investment and that great integration has led to a point now where our market share is really high on all these deals, and we've done well. So that bodes well. And as I look forward, I'm bullish on that.

Year-to-date, we've had roughly 80% market share on bank M&A. It's pretty impressive.

When we looked at the historical trend, that's multiples in excess of what you guys have captured before. So that's really quite extraordinary. And Ron, I recognize you're talking about normalization being this moving target because it's going to be on this upward trajectory. I know in the recent past, you had talked about $1.8 billion of revenues on the institutional side, which, frankly, you acknowledged on the most recent call, it is likely to prove quite conservative given some of the bank M&A tailwinds, combined with the fact that you've also added quite a few bankers to the platform. I was hoping you can contextualize relative to where you are today, how much upside there is from some of these tailwinds and how you think about what the revenue generation or power is in a more normal backdrop?

Again, we -- just to put context to this and how much the market changed. In 2021 total institution, not just equities, okay, but our total institutional business did about $2.2 billion in revenue and dropped to $1.2 billion of revenue, 20% plus margins to 0 margins in 1.5 years. And we then talked about -- we said, hey, you cannot think this is the new normal. I would talk to you. I would say, let's talk about a normalized rate, which would be at $1.8 billion. 2021 was overperforming any kind of trend line. So let's not say that we're going to do that, but we talked about $1.8 billion. But we didn't talk about how many MDs we've hired since 2021, the other capabilities we've done since 2021 that would suggest that the line from $1.2 billion to $2.2 billion has changed. It'd be $1.2 billion to something higher. I'm not going to give you that number, but it is. And that normalization line has also moved up, which was my whole point about that's always a funny line to talk about. Today, we're overperforming that normalization line across the board. And so now in terms of margins, we -- for the quarter, year-to-date 9 months, 13%. And that on -- if you want to $1.8 billion to $2 billion, I'm not giving any guidance. I just -- I can do math easier in my head around numbers. But that should be 10 points normalized for us, we should be in, call it, 20%, 22% margins, not 12%. And some of the reason that we're there is we've done some restructuring in Europe that is going to bear fruit on the margin line. But if you want to talk about that, we still see a rather significant pickup in our pretax numbers from the institutional business.

Given some of the restructuring actions you talked about on the international side, I was hoping you could just speak to how your strategy could evolve abroad? And where are you focused more in terms of growth opportunities domestically?

I think we've said this, okay? We've said that as it relates to primarily Europe, although -- we're doing a lot of business in Canada right now. It's kind of a risk on trade in Canada. But our view primarily is when I visit clients, let me digress them. When I visit clients abroad, I am always stunned and I think the United States has to remember this. I'm always stunned when I say what is your objective? What do you want to do? What do you want to do when you grow up, okay? I don't mean it majority, I just mean small company. what they want? They want to list on the NASDAQ or the New York. They want to list in the U.S. They want to be in the U.S. And so maybe that speaks to some of the issues that they have in their capital markets. But for us, that means to me that what our European operation should be as a bridge to our U.S. research, U.S. sales and trading and the U.S. listing. And that bridge is best navigated through advisory. So when we look at it, we'll focus on advisory both within the continent and outside, but also with an eye toward the objective a lot of people have, which is to do more business in the U.S.

Well said. The other opportunity that's gotten a lot of airplane certainly at the conference is really focused on AI deployment. And I imagine the 10 points of incremental margin did not necessarily contemplate those efficiency gains and the timing there is still uncertain. But maybe just speak to the AI deployment strategy, how it informs your expectation around what efficiency gains that you can drive over time?

The -- when you look at -- I look at the AI deployment almost in 2 segments, one being the easy stuff. And the easy stuff has a tremendous amount of productivity enhancements. The risk that we have as a firm is when we -- we believe that our people are great, and we don't need to lay off, but we -- do we -- we don't need to have people doing the same things. They can do other things. The AI agents can do so much in a regulated industry from account onboarding to credit memos to analysis to approving advertising. There are so many things, and we've seen this, and we will deploy that, and that's going to be highly productive. And on the banking side, we've already rolled out the virtual junior banker. And what it will do is make our junior bankers more productive, and we think we'll be able to gain market share by being more productive. So AI is tremendous. I worry about -- the one thing I always say about AI a little bit is I worry about some of the recordkeeping and some of the risks that come with -- you can record everything.

You [indiscernible] that all the time.

Well, you -- I have to. I always said if you're getting an argument with your spouse, as a guy, you can always say, I never said that. But if your wife can say, yes, you did May 20 at 2:22 and it's time stamped on cloud over there, that's not good from some of the things we deal with. And so we're really going to have to triangulate the record-keeping rules and the fact that when we're contemplating trying to do something, that's not necessarily determinative to what we actually did. And that's a real challenge for the industry. But Jim, you've talked to me about all the things you can do in your vision with all these AI agents are going to transform, not 5 years from now, if I sit in this chair next year, I should do this and tell you what we did between now and when I come back here, it would be more than you even imagine now in the next year.

We're always going to have a slot available for you.

I don't know. Not only did I hear we're selling the company, I heard I'm retiring, too. There have been a lot of rumours flying around here, yes.

Well, I'm not going to ask you about selling. I'm going to ask you about buying potentially. So you do have quite a bit of excess capital. What are some of the properties you're potentially exploring? Is it interesting new capability plays? Are there interesting scale plays that you're looking at? And if there isn't much of interest in the M&A side, how are you thinking about buyback in the context of what was a relatively light share repurchase in 3Q?

Well, I'll take your second question first, okay? I got to ask this question. I kind of came up with a different answer for the first time, okay, in your conference today. And so I'll just share it with the group here. And the answer was I had a very nice question from a gentleman who said -- who was asking about our strategy, and he looked at our stock price chart. And he said, "Wait a minute", and goes that "in 1997, your stock was $1, and it's $1.25." And I said, well then you answered your own question, meaning that we're a growth company, and we can grow it in equity value. But then he asked me the next thing about buybacks. And I said, well, think about it, what if we have taken all that excess capital, which wasn't much, but had we bought back our stock, then it appeared that, that would have been one of the most tremendous investments of all time from a stock buyback perspective. We have bought back stock at $1. But it wouldn't be worth $1.25 today, no chance because we would not have invested in our business. So we look, first and foremost, at deploying capital to build the franchise and toward a growth strategy, and we're opportunistic on stock repurchases. You know that. And if we see something and we'll buy stock to manage dilution, but we do not view stock buybacks as a driver of EPS growth. We see the driver of EPS growth as building this business from $5 billion to $10 billion of revenue and get $1 trillion of client AUM, that will drive, not stock buybacks. Now we buy back stock, so.

I think from just overall capital deployment, I think we're also interested in growing the balance sheet. I think one of the things we talked about before, not to get back to the bank too quickly here, but that is an attractive risk-adjusted return as well. And so I think it's a strategy of kind of all of the above of ways to deploy capital. And at the same time, if we're not overly aggressive from an M&A perspective, we'd be comfortable seeing the ratios increase a little bit. We're totally comfortable with that.

Ron, this is actually a question that an investor strongly urged me to ask, and it relates to what you were just alluding to around earnings growth trajectory, is you've delivered very consistently a mid-teens earnings growth algorithm, and you've expressed conviction that you can sustain that, say, into perpetuity for an extended period of time. At the same time, you also do trade at a discount relative to the peer group. So I was hoping to get some thoughts as to how you might potentially look to solve for at least what's been a persistent challenge where you've traded at some sort of conglomerate discount and your conviction around the sustainability of that earnings trajectory.

Well, look, that's our job, okay? I mean our job to shareholders is to build shareholder value and to build earnings per share. And so that's what we do. And I think we have almost 30-year track record of doing it and doing it smart and being -- and understanding. For me, it's much more important to see the share price go up than to see my pay somehow -- it's not other people's money, I'm a large shareholder, and I own almost 1/3 of the company. So Stifel is highly incented to grow. What was the first part of the question?

Well, I wanted to understand just the mid-teens.

We're going to do that. That's what we do, okay? So I can't predict. I can't say that without someone saying, oh, you put that out there. But it pass prologue, why can't it be? That's what we do.

Well, the nice thing is that we can anchor to it because you also have some longer-term targets. You've talked about $10 billion in revenues. You've talked about $1 trillion in client assets. It might be helpful if you can just contextualize like over what time period do you think you can achieve that? And that would represent a doubling of both of those metrics.

Right. And of course, I won't give you a time frame.

There's a Rule of 72, so...

You know what, though, here's the thing. In my career, all right, in my career, I said that when we had $100 million in revenue, I forget what AUM was, I said, we'll have $200 million. They said that's a double. They said, yes. Then we had $200 million, I said we'd have $400 million. We went to $400 million, then $800 million, then $1.6 billion, then $3.2 billion. That's 5x. We doubled. So when I say that we're going to double again, we are, given normal markets. We are in a phenomenal position. So actually, when I'm taking as a compliment, I hear these rumors about Stifel and what. I see that as a complement. Why? Because we are so well positioned that anyone that's not saying it isn't recognizing our value. But we're executing great. And there is no reason that we can't continue to grow like we have in the past. And now the other thing I will say, though, is you say how, I can tell you, we've done almost 35 acquisitions. At any point in time, at the beginning of the year, I had no idea that we would do Legg Mason or Ryan Beck or KBW or Thomas Weisel, never an idea. Those were opportunities that presented themselves to this management team, and then we executed on them. So today, I don't know what the drivers will be to get there, but I know this company is well positioned to take advantage of opportunities when they present themselves and do so in a manner that's accretive to shareholders.

With the track record to support it. Ron, that's a perfect way to close. Thank you so much for being here, and Jim you as well.

Thank you for [indiscernible] Thank you.