Wells Fargo & Company (WFC) Earnings Call Transcript & Summary

All right. We're ready to kick off on day 2. At least, I'm ready to kick off. I know there was a session before me. We are delighted to have with us today, Mike Santomassimo, Chief Financial Officer of Wells Fargo. Mike, so thankful that you were able to come back to our conference this year.

Yes. Thanks for having me.

All right. My pleasure. The way we see it, there's 3 main levers for EPS. One is that you are an asset-sensitive beneficiary. So higher for longer, I would think, is good. You've got expense ratio improvement on the horizon and capital deployment opportunities. So I did want to tick through those 3 key themes and then get into some more details.

Great.

So let's talk a little bit about higher for longer. I know today is Fed Day, very exciting. Another day, another new rate curve. And I guess the question we had is, how are you thinking about your NII outlook of down 7% to 9% year-on-year now that the forward curve has only 1 rate cut in 2024?

Yes. So again, thanks for having us. Always good to come and talk to everybody. Look, I think rates obviously have been pretty -- expectations around rates have been pretty volatile now for -- I don't know -- I feel like I keep saying that year after year. But -- and so in isolation, obviously, rates staying higher for longer is positive, but there are a whole lot of other factors you need to think about as you look at the overall picture for NII. First being deposits. I know we'll talk a lot more about those in a little bit. But really sort of the level, the mix and sort of what's going to -- and the pricing on deposits is going to sort of be the -- probably the biggest driver sort of near term as you look at sort of NII. And obviously, loan growth and all the other factors that go into kind of the asset repricing that's there. And so I know everybody likes to focus on like every small move in interest rates. The 10 years up, 10 years down. The Fed is moving this, Fed is moving that way. But I think you really have to keep it in perspective and sort of look through whatever they're going to announce at 2:00 today and sort of look at the overall picture. And all of that stuff is embedded in the guidance we gave. And a lot of the things that we've talked about now in January and April, the trends are still the same types of trends that we've been seeing across each of those levers.

Okay. So down 7% to 9% still in play.

No change.

Got it. And then can we dig in then to the deposit side? So can you give us a sense as to what you're seeing in deposit pricing and mix shift. So far this quarter, 1Q had deposit yields up a little bit Q-Q. Just wondering how that's trending as well?

Yes. I mean what you're seeing in each of the -- I'll take through each of the deposit buckets. And so on the commercial side, we've seen stable to growing slightly deposits now for a few quarters. And so that's a good thing. And we're really focused on growing operational deposits across our commercial clients, both in the corporate investment bank and the commercial bank. And so it's good to see those stable and growing over the last 3 or 4 quarters. Pricing there has been competitive now for a while. It's not getting worse, not getting better. It's just competitive, which is kind of what we expected it to be. And so that's fine. And those deposits over a cycle are very valuable deposits. And so we're very comfortable with where that is. We're not seeing more pressure there in any way. On the consumer side, you're seeing a little bit more of the same trends that we've seen. People are spending their money in their checking accounts. So we've seen a tremendous consistency in the activity levels across debit and credit spend and we can all see it in our own personal lives as you look at what's happening around us, very active -- people have been very active driving sort of the economy there. You see some checking account balances coming down. That's being replaced by CDs and savings in some cases. So the underlying consumer deposits have been pretty stable. And then you see a little bit more declines in the small business side as people continue to spend their money. But the overall migration that's happening in the book has slowed over the last number of months, call it, 5, 6 months, it has slowed from what we saw prior to that. So that's a good thing. And we'll see how it goes. But as I said in April, we still expect to see more migration happen. I think you should expect that in this kind of environment. We've been living in this higher-for-longer environment now for a while, and I think you'll see more of that migration happening even though at a smaller -- at a slower pace than what we saw as rates really started to rise a couple of years ago.

Got it. Okay. Let's dig into the asset side of the equation. I'm going to mix it up a little bit here. Just going to deposits obviously give you that opportunity to lean into loans, and can you give us a sense as to how the loan side of the book is going?

Yes. I mean, look, you can see it in the H8 data on the Fed, loan demand has been pretty muted. Now I'll remind you back in January, we were -- we didn't expect much coming into the year in terms of loan growth based on what we were seeing and hearing from our commercial bank and corporate investment bank clients in that side of it. We just haven't seen that demand. I think people are still being very cautious about inventory builds. They're being cautious about big capital investments, and you're seeing less utilization of revolvers because of that. Price obviously matters too, right, in terms of where rates are. And so that demand has been pretty muted, and that's what you see on the commercial side, I think, across the industry. But that's kind of what we expected to see for the year. So it's not deviating that much. As I said in April, it's a little lower than what we had modeled, but not tremendously on the commercial side. And I think that's -- so that's what you're seeing there. Now will we see more growth at some point? Maybe. But I think there isn't -- it's not going to happen overnight if that starts to happen. So I think I wouldn't expect too much growth in loans over the rest of the year. Now you said sort of lean into or chase and so that's come up a lot. I think our credit underwriting has been very consistent on the commercial side. We haven't tightened much over the last couple of years. We haven't loosened. And I think that consistency has served us well over a very long period of time as we look at the credit risk that we have in that commercial book. And I think trying to chase or lean into things at this point in the cycle, I'm not sure is the best strategy. I think really sort of being consistent about the credit box on the commercial side is super. It's going to serve us well and it's important to us. On the consumer side, in the mortgage market, there's really no refinance volume. And so you see that coming down a little bit each quarter. On the auto side, we tightened credit 18 months, 2 years ago. And so you're seeing a little bit of that come through. Now part of that was credit tightening. Part of that was returns, where returns were just not at the level we wanted to see to grow the book. And so we'll see how that progresses. I think those spreads are a little bit better in parts of that market. And so we'll see how that goes over the coming quarters. And then we've seen good growth in the card side from a lot of the work that we've been doing over the last 4 years to kind of rebuild that business.

Right. So just digging into it a little bit on the loan side, to your point, auto has been in runoff for a while and we should just keep that going for a bit?

Well, I wouldn't say it's in runoff, but I think you've seen it come down as spreads tighten into type of credit box. And I think you will see that won't go on forever. And so we'll see how that goes. And I think we've been -- overall used car prices have hung in there much better than people expected. Credit is performing very well given the actions we took a couple of years ago. And so I think hopefully, you'll start to see that trough at some point.

Okay. And then we've got card where, clearly, you've been leaning in developing Wells Fargo branded credit card business, right? And as with Ray Fischer running it, I think...

Right. Yes, Ray is running it.

Yes. And so you've got a great growth trajectory there for, I would think, several years to come?

Yes. Look, on the card business, we -- the new team came in back in the end of 2019 and just systematically started improving every aspect of that business, service, the operations, line assignments, credit underwriting and go on and on. And we've now since launched 9 products, including a couple of co-brands and a small business card. The most recent was just a week ago that we launched another one. And so we're in the process of rebuilding that. We've got a couple of more cards at some point to come. And the first vintages that we put out there on the active Cash Card started in, I think, July or August 3 years ago. So you're starting to see the maturity of the earliest vintages, and that will sort of build over the next few years. And so -- and we feel good about the credit box that we've originated those cards in. And so that should start to really be a more meaningful contributor to the P&L over the coming years. But we're happy with the way that team has executed on it so far.

And what portion of those cardholders would you say are new to the bank?

It's the majority, so call it, 60-40 kind of rough math, but the majority are still bank customers. And so the minority is new customers. And so we've seen really good traction in both. And I think in the -- for the bank customers, we were underpenetrated in the card business. And so it's good to see as we launch better products and really good products. It's been a while since you've seen sort of a Wells Fargo card be top of the list when you sort of look for best cash back cards as an example. And so it's good to see that we're seeing both clients and existing clients and new clients pick it.

And then how many more products are in the pipeline here?

A couple, 2.

Okay. All right. So that's industry-leading -- well, at least my industry-leading growth rates should continue for a bit?

Well, we'll see. I mean, I think we're certainly growing faster than the overall industry because of the new products that we've launched, and so we'll see how that goes.

And how are you thinking about how the vintages are performing?

Yes. I mean we look at each of the products, each vintage all the time. And for the most part, they're right on top of what we would have projected with very small variance, plus or minus, as you sort of look back 3 years, which is quite remarkable given sort of the environment we've been in. And so overall, performing as we would have expected.

Okay. I do want to dig in a little bit on the commercial side because you indicated, look, at this point in the cycle, lean in, does that make sense, not really. I think that's my summary of what you said is that fair.

Well, I think you need to have a consistent credit box over the cycle. And I think that will -- that has served us well over a long period of time.

Okay. And part of the reason I'm just digging in here is, we have what looks like by the number is a strong economy and very low losses in commercial. So I realize that this cycle is very different from others. But given the returns that you could get with losses being so de minimis, is there more that's fitting into your credit box than normal, I guess, the question?

No. Look, it's a competitive environment, too, right? I mean I think as you look at what's happening out there, I think you're right, credit performance has been really good, particularly coming out of COVID, I think everybody would have predicted some more deterioration in the overall economy, but also sort of in how that filtered through the credit book, but it hasn't happened. And so like I said, I think our goal is to be there for our clients and be very consistent with them. I think we're very focused on continuing to expand the commercial bank and expand what we do across the corporate investment bank, but we're going to do it within the risk appetite that we have. And I think that, again, that served us quite well. And I think as clients start to have more demand for credit, we'll be there and it will work out. But I think a lot of clients are being very prudent about it, if you think about the risks that they're thinking about across the economy. And so we'll be there when the demand is there.

And how should we be thinking about private credit and how that intersects with what you do? Obviously, you've got a very meaningful asset-based lending platform and you do a tremendous amount in the middle market, which seems to be where private credit is targeting. So can you help us understand that intersection for you?

Yes. I've heard that's a topic of interest for people. So a couple of people write about it every once in a while. I think so far, private credit -- what private credit providers have been doing mostly so far is stuff we likely wouldn't be putting on our balance sheet anyway. And so whether it's higher leverage points or structural considerations around some of these transactions and so. So I'd say it hasn't sort of taken away yet a lot of what is kind of our core business. As we look at the client base, there's obviously a role to play for in certain circumstances for credit that we might not be comfortable with or putting on our balance sheet. And so that's partly why we partnered with Centerbridge. We created something called Overland. It gives us an ability to have a really fulsome conversation with clients to say, "Okay, you've got a whole range of requirements across your credit stack, you need an ABL, you need some other lending, you need," and so we can offer all of the pieces for our clients and still be relevant for folks versus saying, "Oh, we can't do that or move over to this bucket." And so it's actually been -- it served us quite well in a number of situations so far, where we've been able to sort of provide different solutions for clients, which I think will be really good. And there's places where we will -- where some of the private credit providers complement what we do. So you could have a -- you could have some -- a kind of personal sports equipment, snowmobile, those types of things where we're very comfortable providing dealer financing for those things, but we don't want to be the front end for the consumer and so other providers might do that. And so there's ways to partner with people to complement the things we do for some of our clients. And so I think we'll continue to look for ways to do that as we go forward.

Well, that's helpful. You answered my follow-up question, which was when you have a particular client that fits your credit box, but they want to do -- they want to have access to this higher leverage, how do you handle it? So that's great. And this Centerbridge part and Overland, when was that established, again?

Yes. It's just operational in the last number of months. So it's still very, very early. And so it will ramp up over time.

And so with this, you're able to service your clients holistically. And if it's a credit that you don't want for your own balance sheet, Centerbridge is there to service?

Yes, if it makes sense for Overland, they'll do it. And again, we've got some situations where we've been doing that -- we did the ABL. There's another sleeve of credit they needed. And so we're able to provide the full solution and stay relevant for clients. And that was really the goal with Overland is to not have to say no, but say, okay, let's talk about the range of options you need. And if you need this option, go to Overland, if you need this option come to our balance sheet. And so it gives us a good opportunity to do that with clients.

Okay. And then the asset class we haven't talked about yet, commercial real estate. So can we get a little color from you on what's going on there in your book. Yes, you have a long history of successfully investing in commercial real estate going back many, many decades, many, right? And you've got a great team there. And commercial real estate is currently running, I think, at about 16% of total loans. And look, I get a lot of questions about the credit quality and how are you underwriting and -- help us understand how the 2.5% reserve ratio against the CRE book is adequate, given what you're seeing in the price action going on in the various asset classes there?

Yes. It's -- as you said, we've had a -- we have a very experienced team in the commercial real estate space, and they're doing a great job kind of working through a difficult environment. But when you look at the portfolio, I'll come back to office at the end. Most of the portfolio is performing pretty well. Multifamily is the biggest piece of the portfolio, a little over $40 billion of outstandings; very, very low delinquencies, almost nil. And so we feel really good about that. Now you're seeing some NOI -- some net operating income compression there as expenses are up and rents have stabilized, but you're seeing the capital markets are wide open for multifamily. You're seeing a lot of deals -- more deals get done. A decent amount of deals get done in the multifamily space. People are putting equity in, they're able to get financing at reasonable spreads. And so that's all operating quite well for our portfolio. I think as you go down the rest of the asset classes, it's a similar theme, whether you look at data centers, logistics, industrial even our hotel and retail portfolios are doing well overall. So I think that's good. On the office space, you really have to break it into a couple of chunks. The first is what we see primarily in our commercial bank, which are kind of the side of the highway type office buildings, smaller buildings, many have recourse, many are owner-occupied and those are performing well, much smaller sized loans there as well. And that's going really, really well. Where the issues are really institutional office space. And it's a wide range of outcomes now. Some office buildings are doing really well. You go to Hudson Yards in New York City, they're doing really well. You go to Times Square in New York City, not doing as well, right? And so older office buildings that are not renovated in certain areas of different cities are the places that you're seeing the most stress. And we've had some charge-off. We have an 11% coverage ratio against that part of the portfolio. So we feel like we're appropriately reserved for a range of outcomes there. And it's going to take some time to play out as we go.

And 11% against that portfolio...

The institutional office portfolio has about a -- has 11% coverage ratio. So that's the place where you're seeing the stress.

And just to lean in a little bit on this, Criticized and Classified was up in 1Q. Maybe you could give us a sense as to what drove those changes and how is that tracking now?

Yes, not a big story there. It's a few things across different portfolios, but there's not a huge story in terms of Criticized and Classified. And by the way, on Criticized loans, it doesn't mean there's going to be a loss, right? So as you go through the process, right, you may mark something it's criticized and you may take it out of that bucket in a couple of quarters. And so it's a natural process you go through as you sort of look at places where you might be a little more concerned versus not. But again, it doesn't mean there's going to be a loss there.

Right. And I suppose the last question here is, any loans we haven't talked about yet, resi?

Mortgage, resi mortgage. I mean, the residential mortgage portfolio is fine, right? I mean we have -- we're sort of net recoveries in most quarters. And so I think that's been performing well. And I think we've got a long way to go before you see -- a long way to go in terms of price declines before you would see any kind of stress.

Right. And we had, what, resi, I think average home prices up 5.5% last year.

Yes. So for the little supply that's out there, there's quite a big bid. So...

What about the growth side of resi? How should we think about that?

Yes. For -- well, in terms of the market, I mean, there really is no refinance market at the moment. So generally, in a normal year, you'll have a decent amount of the origination market be refinanced and it's very, very little at this point. And for us, we sort of -- we've narrowed our focus on the mortgage business about 18 months ago. We're focused on our bank, our wealth management and some low and moderate income community as sort of the primary focus for the mortgage business. And that's been going well so far in terms of the originations we're seeing there.

All right. So just to round it off on loan growth, it sounds like you're in the camp of, look, when the Fed starts cutting rates, maybe there'll be a little more demand, but until then, it's...

Well, I think clients need to have more certainty. Rates are certainly part of it, and they need to also be confident that the base case economic scenario is what's going to play out over a longer period of time, but rates are certainly part of it.

So when the asset cap does come off, and I'm not going to ask you when that is because I know we're not in control of that, but when it does come off, where can you lean into growth?

Yes. Look, I think many of the investments we're making today, still -- don't require the asset cap to come off, whether on the fee side, whether it's wealth or investment banking and a whole bunch of other places which I know we'll talk about. I think the 2 places that were most impacted by the asset cap was our -- one was our markets business, where we took the capital markets balance sheet down by a lot to -- during COVID. And the other place was in some -- in commercial deposits where we took the deposit base down a bunch there as well. And so those will be likely areas that you'll see some growth at some point when the asset cap comes off, but we'll see.

Got it. Okay. So yes, because I've been getting the question of, "Hey, asset cap coming off for Wells, is this something they can utilize given loan growth at the industry level is basically flat?" And to your point, leaning into capital markets is an opportunity set. Let's talk a little bit about that side. I think in investment banking, there's been over 50 new hires since 2019, many at the senior leadership level. So do you feel that this revenue benefit from these hires is already in the run rate or is there more to come?

Short answer is no. I think there's more to come. And when you look at -- so we've always had an investment banking business. And so we started putting more focus on it back in early 2021. And I think, as you said, we brought in a new leader. We've been hiring people in very targeted sectors and targeted areas across the product set. And I think that's been happening over the last couple of years. And so many of those folks haven't been in their seat that long and are still coming up to speed from a productivity point of view. And so I think there's more to come. Now we've seen some good green shoots and some individual deals and some -- we've been able to take advantage of some of the activity that we saw in the early part of this year in the first quarter, and so that's all positive. But I think there's more to come. And as you know, the market needs to cooperate a little bit there, too, in terms of activity levels, but we've got more to do there.

Okay. Great. So there's a trajectory of acceleration continuing at least for the next foreseeable future. Well, you can decide what foreseeable means. Okay. What about on the trading side? In 1Q, you had a record quarter, I think it was $1.4 billion in trading, supported by a better market, also reflecting the investments you've made. Can you give us a sense as to where you see that puck going? And is it something that you need to invest to drive or do you have the folks in the seats and the tech architecture and investment spend to support that type of activity accelerating from here?

No, we have been investing over the last few years, and that's all in the context of our overall expense trajectory. And I don't see the investments we're making in this space changing that trajectory overall and so it's all in the context of that. But we have been making investments in some people in terms of upgrades. We've been investing in technology across some of our trading capabilities in our FX business and our rates business and you can go on and on through each of the asset classes. But we're being very methodical about how we go about it. And we're not looking to change the overall risk appetite of the place. But I think you'll see us continue to make -- be systematic about making the investments there. We've been very focused on getting paid for the exposures that we have across the company. Markets is a good example of that, where we're able to leverage the relationships in the commercial real estate business, in the investment banking side of the house, in the commercial banking side of the house. And you've seen that come through in the market's results without a significant increase in risk-weighted assets on the market risk side. And so we're pleased with what we've seen over the last -- it's been, I guess, 5 quarters where we've had solid fee performance there, but we've got to do that over a long period of time. And we think there's -- we do think there's some more growth that we can get there.

So again, on fees, investment banking has some upside, trading we just went through. What about Wealth and Investment Management, I think you've got over $2 trillion of client assets today. And I know you're still focused on growing. Can you give us a sense of your strategies for growth and where you expect this $2 trillion to go?

Yes. So there's 3 or 4 buckets within the Wealth and Management business that we've been focused on. First is the core adviser business that we've had. We're one of a few that has a pretty sizable business in that space. And the team has been focused on, first, stemming some of the attrition that we saw a few years ago, which they've done a good job at; two, starting to grow the adviser space and then continue to sort of build out some of the capabilities, which we largely have everything we need there. And so that's -- that will be a good story as we start to see more adviser growth over time. The second piece is providing more investment advice to our bank customers. We launched, a couple of years ago now, the first iteration of Wells Fargo Premier, that will be an area that we continue to focus on. We've got millions of customers that are affluent in the bank system where we have very little of their investment wallet today. And if we're successful at bringing -- servicing them, they'll bring more banking with us. I think industry data would say you service them on the investment side, they bring a lot more deposits and lending to you as well. And so that's -- that we're in the very, very early stages of taking advantage of that opportunity there. And the third piece, which is a bit unique to us, which is at least across our big peers is we have a channel that services the independent advisers' world, and so that's one of the fastest-growing pieces of the wealth management market. It leverages the platform that we have for the rest of the other channels that we've got. And so that's an area that we'll continue to focus on growing not only attracting people, saving people that are leaving our adviser channel into that -- in the -- when they go independent, but also recruiting from others. And so again, early stages in terms of really seeing some growth there, but we're excited about what the opportunity should be across each of those channels going forward.

Yes. You started that independent adviser channel how long ago?

It has been a while. Yes, we've had it for a while, a long time, but historically, hadn't put a lot of focus on it.

Okay. And now there's more focus?

Yes.

Okay. Got it. I do have 2 topics to go through in our 5 minutes left, expenses and capital, 2 big levers of the EPS opportunity. So I think Charlie mentioned recently that your operating committee thinks Wells can run more efficiently. Those are obviously the folks that are running the businesses saying, "Yes, I'm in for more efficiency." Can you give us some context around how much more efficiently you guys think you can make this organization run?

Yes. Well, first, we're very happy with like what we've been able to accomplish over the last few years, 3.5 years now where we laid out some goals, initially $8 billion, then $10 billion of gross saves. And so we executed on that, and we're quite happy. We've seen big headcount reductions. We've seen a number of things happen across the company to get more efficient. But as you look at the place, and as Charlie mentioned, we still have a lot of opportunity, and it's -- we still have more excess real estate to get -- to take care of in our office space. We still have a number of processes across the businesses and the functions that are more manual than they should be. And so it's just -- it's hundreds of different projects that are ongoing at any point in time across the company that will drive that. And so it's just consistent execution on that in a long period of time, will get us where we want to get to. But we've got a lot still to do [indiscernible].

Within every commercial and CIB, the expense ratios or so...

Everywhere.

Good. Okay, everybody can contribute.

Everybody has something to do, some more than others.

Okay. And where does technology fit into all of this? I don't know if you've given your tech budgets recently, but...

No. I mean technology is a -- certainly a part of it, right? And I think technology can be more efficient in how they deliver, but technology is an enabler for some of that efficiency as well, depending on what project it is.

And within this year, I think you've identified, what, $2.7 billion of efficiency initiatives with all of that being reinvested in the business. Is that fair?

Close.

Okay. And is that the kind of level that you think you can keep running at?

We'll see. We'll give you guidance every year in terms of breaking out the gross and the net each year, but we still think there's more to do, and we'll break it out each year.

Okay. All right. Excellent. And then I guess just lastly, could you give us a sense of where those investments are going?

It's really across the board. It's people in each of the businesses that face-off clients, it's digital capabilities, it's -- there's a whole range of things that across each of the businesses that we're investing. New product capabilities like card that we talked about, so every single one of our businesses have investments that we're making to grow.

All right. And pulling it all together in 2023, the expense ratio clocked in at about 63%. So there's opportunity to pull that down?

It should be better over time.

Okay. And then the other piece of the expenses that people focus on or ask about, I shouldn't say we can't really -- we don't have too much in the way of numbers to focus on, but the question is around the risk and control expenses. And you've been clear that, look, since you and Charlie joined in 2019, is it, risk and control expenses did increase for good reason, $2 billion. And so the question I get all time is, "Hey, consent orders are coming down. And so as these are continuing to roll off, are there opportunities to optimize this?"

Yes. I mean, our first priority is getting all the work done and getting it implemented in a way that satisfies us and our regulators. And I think any optimization of it will come after that. So we're not that focused on optimizing today. And so there'll be some opportunity, but that's a way off.

All right. On to capital, CCAR looks pretty similar to last year. Are there any nuances that we should be aware of for you?

No. I mean, look, it looks similar. It's a black box. And so we'll find out in -- on the 26th.

And then based on current rules, it does look like you have a nice amount of excess capital. We estimate $28 billion, 21% of your CET1. And this brings me to the buyback question, which is on buybacks, you did, what, $12 billion last year. You've already done $11 billion this year. And I know you indicated that you'd have more buybacks this year than last year, but maybe you could give us a sense as to how you're thinking about that excess capital utilization in the context of what we discussed on loan growth and what the opportunity set is here for you?

Yes. Look, we go into every quarter the same way, thinking about what the opportunity is to serve clients. We've got an asset cap in place, too. And so we still have -- we generate a lot of -- we generate capital each quarter. And so we'll make a decision of the quantum that we'll give back. I think we feel good about where the capital levels are today. And so to deal with whatever comes with Basel III and what opportunities there, and so we'll make decisions each quarter around the buybacks. And I'd just point to remind you, like we did buy -- since 2020, we bought back $47 billion of stock. And so we'll focus on it. It is important to us. We've done a lot, and we'll see how it goes.

Excellent. So as a final question on the outlook here for the ROTCE, we know you have your goal in the medium term, bringing everything together in your -- from your perspective, what's the most important drivers that you're focused on for delivering on that ROTCE goal?

Yes. Look, we've got to continue to execute on the work that we're doing in the card and the home lending space. We've got a -- we're focused on optimizing capital levels and continuing to work there. And then we've got to get some -- we got to focus on efficiencies and continue to see a little bit of return from the investments we're making. But we feel really good about getting to the 15% return, and it will be a little bit of a number of those things that I mentioned that get us there.

Super. Mike, thanks so much for joining us this morning.

Thank you.