管理層發言
Greetings, and welcome to the Axos Bank Third Quarter 2026 Earnings Conference Call and Webcast. Operator Instructions. As a reminder, this conference is being recorded. It is now my pleasure to introduce Johnny Lai, Senior Vice President, Corporate Development and Investor Relations. Thank you. You may begin.
Thank you, Diego. Good afternoon, everyone, and thank you for your interest in Axos. Joining us today for Axos Financial, Inc.'s Third Quarter 2026 Financial Results Conference Call are the company's President and Chief Executive Officer, Greg Garrabrants; and Executive Vice President and Chief Financial Officer, Derrick Walsh. Greg and Derrick will provide prepared remarks on the financial and operational results for the quarter ended March 31, 2026, then open up the call to a Q&A. Before I begin, I'd like to remind listeners that prepared remarks made on this call may contain forward-looking statements that are subject to risks and uncertainties and that management may make additional forward-looking statements in response to your questions. Please refer to the safe harbor statement found in today's earnings press release and in our investor presentation for additional details. This call is being webcast, and there will be an audio replay available in the Investor Relations section of the company's website located at axosfinancial.com for 30 days. Details for this call were provided on the conference call announcement and in today's earnings press release. Before handing over the call to Greg, I'd like to remind listeners that in addition to the earnings press release, we also issued an earnings supplement and 10-Q for this call. All of these documents can be found on axosfinancial.com. With that, I'd like to turn the call over to Greg.
Thank you, Johnny. Good afternoon, everyone, and thank you for joining us. I'd like to welcome everyone to Axos Financial's conference call for the third quarter of fiscal 2026 ended March 31, 2026. I thank you for your interest in Axos Financial. We generated another quarter of double-digit year-over-year growth in net interest income, ending loan and deposit balances, earnings per share and book value. We generated almost $700 million in net loan growth linked quarter, resulting in an 11.2% year-over-year increase in net interest income. Excluding the interest income impact of FDIC-purchased loans and 2 fewer days in the March 31, 2026 quarter compared to December 31, 2025 quarter, net interest income increased by $5.7 million on that linked quarter basis. We continue to generate high returns as evidenced by the over 16% return on average common equity and 1.8% return on assets in the 3 months ended March 31, 2026. Other highlights in the quarter include: noninterest income was $86 million for the quarter ended March 31, 2026, up from $53 million in the prior quarter and $33.4 million in the corresponding quarter a year ago. Excluding the benefit of the $22 million legal settlement this quarter, noninterest income was up approximately $10 million linked quarter due to higher mortgage banking income, advisory fee and the addition of rental income from the commercial office building we purchased in January of 2026 that will be used as our future headquarters. Net interest margin was 4.57% for the quarter ended March 31, 2026, compared to 4.94% in the prior quarter. Excluding the impact from the prepayments of FDIC-purchased loans and 2 fewer days in the quarter ended March 31, our net interest margin was down in line with last quarter's guidance of around 10 basis points. We continue to maintain a strong net interest margin with and without the benefit of the accretion from loans purchased from the FDIC, which has now dwindled to around 5 basis points of positive impact. Noninterest expenses were up $1.4 million linked quarter to $186 million. We are seeing some of the benefits from our operational efficiency initiatives and artificial intelligence on our salaries and benefits, data processing and other G&A expenses. The pending completion of the Jenius Bank deposit acquisition also allowed us to moderate growth in advertising and promotional expenses in the March quarter. Net income was approximately $124.7 million in the quarter ended March 31, up 18.5% from $105.2 million in the prior year's third quarter. Diluted EPS was $2.15 for the quarter ended March 31 compared to $1.81 in the third quarter of 2025, representing an 18.7% year-over-year increase. Total originations for investment, excluding single-family warehouse lending, were $5.1 billion for the 3 months ended March 31. Loan growth was strong across a number of lending businesses, including capital calls, real estate lender finance and equipment finance. Jumbo single-family loan balances were up slightly, while single-family warehouse had a seasonal decline of approximately $123 million. Ending loan balances grew by approximately $800 million linked quarter, excluding single-family warehouse. Average loan yields from non-purchased loans for the 3 months ended March 31 were 7.23%, down from 7.63% in the prior quarter. The sequential decline was driven primarily by the full impact from the two 25 basis point rate cuts in the calendar Q4 2025. Average loan yields for purchased loans were 12.39% compared to 23.32% in the December 31 quarter. Purchased loan yields from the quarter ended December 31 benefited from one FDIC-purchased loan paying off, resulting in approximately $17 million of purchase discount accretion that was recognized in interest income. The FDIC-purchased loans continue to perform and all the loans in that portfolio remain current. New loan interest rates for the March quarter were 6.9% in both the single-family and C&I portfolios, 6.7% in the multifamily portfolio and 7.8% in our auto portfolio. Ending deposit balances were $22.4 billion, up 11.2% year-over-year. Demand, money market and savings accounts represent 97% of total deposits at March 31, increased by 13% year-over-year. We have a diverse mix of funding across a variety of business verticals with consumer and small business representing 52% of total deposits, commercial cash, treasury management and institutional representing 22%, commercial specialty representing 14%, Axos Fiduciary Services representing 5%, Axos Securities, 5% and distribution partners representing 1%. Ending noninterest-bearing deposits were approximately $3.4 billion in the quarter ended March 31, an increase of $143 million from the $3.25 billion in the prior quarter. We deliberately reduced higher cost savings and time deposits and temporarily increased Federal Home Loan Bank advances in anticipation of the roughly $2.3 billion of Jenius Bank deposits coming in the June quarter. Client cash sorting deposits ended the quarter around $1.1 billion. In addition to our Axos Securities deposits on our balance sheet, we had approximately $415 million of deposits off balance sheet at partner banks. We remain focused on adding noninterest-bearing deposits from small business, custody clearing, fiduciary services and commercial cash and treasury management verticals. Our consolidated net interest margin was 4.57% for the quarter ended March 31 compared to 4.94% in the quarter ended December 31. The early payoff of an FDIC-purchased loan in that second quarter increased net interest margin by approximately 25 basis points. Excluding the early loan payoffs, the purchased loan yield was 14.2% in the quarter ended December 31 compared to 12.4% in the quarter ended March 31. With the diminishing impact of the FDIC-purchased loans, we expect reported net interest margin to stay roughly flat on an organic basis, excluding the impact of the deposit purchase premium from the acquired deposits, which we estimate to be around 5 basis points. The diversity of our lending channels provide us with flexibility to maintain strong loan and deposit growth while maintaining our net interest margin. Verdant had another strong quarter, contributing approximately $200 million of new loans and operating leases in the March quarter. We continue to identify opportunities to deepen our relationships with existing Verdant vendors and dealers as well as accelerate growth in a few existing verticals that were previously constrained by capital and size limitations when Verdant was under private ownership. The synergy between the Verdant and non-marine floor plan lending teams is starting to gain traction. We believe that our ability to provide a comprehensive retail and wholesale lending solution to top-tier original equipment manufacturers is a strategic advantage that we can leverage to win more deals. Demand in our commercial specialty real estate, fund finance, real estate lender finance and asset-based lending programs remain strong. Pipelines in the jumbo single-family and multifamily areas are rebounding. We are making steady progress growing our loan pipelines in newer lending verticals such as floor plan and retail marine lending. Taking all these factors into consideration, we are confident that we will generate loan growth in the low to mid-teens on an annual basis this year. We had a strong increase in noninterest income as a result of several recurring and nonrecurring items. Mortgage banking income was $3.7 million in the quarter ended March 31, up $2.2 million year-over-year due to a favorable servicing rights fair value adjustment. Advisory fee income was $9.4 million, up $1.3 million year-over-year. Banking and service fees in the quarter included a $22 million one-time favorable legal settlement and the addition of rental income from commercial office properties we purchased in January. Verdant contributed approximately $23.7 million in noninterest income in the March quarter compared to $18.9 million in the December quarter. The credit quality of our loan book remains strong and our historic and current charge-offs remain low. Net charge-offs were 31 basis points in the quarter ended March 31 compared to 9 basis points in the year ago quarter. We charged off $14 million of our principal balance in the C&I cash flow loan that was put on nonaccrual over a year ago when we allocated a specific loan loss reserve. The remaining principal balance is approximately $17 million at March 31 on that loan, and we maintain a $10 million specific loan reserve on this balance. Excluding the charge-off related to that loan, total net charge-offs were $5.1 million in the 3 months ended March 31 or 8 basis points of annualized net charge-offs to average loans. Total nonperforming assets were $180.4 million at the end of the quarter, down approximately $5 million from $185 million at the March 31, 2025 quarter. Nonperforming assets declined by approximately $27 million in the multifamily group and commercial mortgages down by $19 million. One syndicated C&I shared national credit became delinquent this quarter, accounting for a $33 million sequential increase in our nonperforming assets in the C&I loan area. We have taken over as agent in the syndicated loan and are actively working to resolve this nonperforming loan. Total nonperforming assets was 62 basis points at the March 31, 2026 time, down from 71 basis points at June 30, 2025. We remain well reserved for our low levels of credit losses with our allowance for credit losses to nonaccrual loans equal to 192.2% at March 31, 2026. In Axos Clearing, advisory and broker-dealer fees were up sequentially due to higher asset and transaction-based income. Total assets under custody administration were flat at $44 billion. Net new asset growth of approximately $140 million were offset by a decline in the stock market in the first 3 months of 2026. Cash sorting deposit balances were roughly flat quarter-over-quarter despite significant market volatility. We continue to expand the scope and scale of artificial intelligence across the firm to a wide range of businesses and functional units. Having established the governance framework and infrastructure to educate, train and deploy AI tools to all Axos team members, we are now focused on scaling the usage of artificial intelligence across more use cases. We have over 500 team members using Claude Enterprise to improve the speed, quality and productivity of various workflows. Since the beginning of calendar 2026, the number of technical users of artificial intelligence tools has increased by 37%, increasing artificial intelligence's share of committed code to 90%. We are adding specialized agents to test, automate and QC various work products. We continue to evaluate M&A opportunities to augment growth from existing businesses and team lift-outs. The Verdant Equipment Leasing acquisition continues to perform well with good progress across a variety of strategic and operational initiatives. Loan growth remains healthy and profitability continues to improve. We announced the acquisition of approximately $2.3 billion of online saving deposits from Jenius Bank in February of 2026. These deposits are a perfect fit for us, and we're excited to offer additional banking, lending and securities products to the roughly 60,000 individual Jenius Bank digital banking clients. We received regulatory approval last month and expect to complete the deposit conversion and client onboarding next month. Last week, we announced a separate deposit acquisition of approximately $3.2 billion of IRA savings and CDs from Capital One. These are granular retirement savings accounts sourced through digital channels. We submitted our bank merger application for this transaction last week and are actively working with Capital One to determine the exact timing and mechanisms of a conversion and close in the second half of calendar 2026. These two opportunistic acquisitions help us with incremental liquidity and funding for future organic and inorganic loan growth opportunities. Our disciplined growth and strong capital allows us to capitalize on organic and inorganic growth. The regulatory environment and dynamics within the banking and fintech landscape have created a wealth of M&A opportunities that we intend to fully review. We continue to invest capital in areas where we see the best risk-adjusted returns and in tools, people and processes that will help us scale. Now I'll turn the call over to Derrick, who will have additional details on our financial results.
Thanks, Greg. A quick reminder that in addition to our press release, our 10-Q was filed with the SEC today and is available online through EDGAR or through our website at axosfinancial.com. I will provide some brief comments on a few topics. Please refer to our press release and our SEC filings for additional details. Noninterest expenses were approximately $186 million for the 3 months ended March 31, 2026, up by $1.4 million from the $184.6 million in the 3 months ended December 31, 2025. Salaries and benefit expenses were down $0.6 million on a linked quarter basis and professional services fees were up $1.6 million. FDIC and regulatory fees increased $1.6 million quarter-over-quarter, driven primarily by the fiscal year-to-date loan and deposit growth. Across our noninterest expense categories, we are seeing some of the benefits from operational productivity initiatives, including the increased leverage of our AI tools that we have implemented over the past 12 months. Our income tax rate was 24.6% in the 3 months ended March 31, 2026, compared to the 26.8% in the prior quarter. The primary reason for the sequential decline in our income tax rate was the benefit of RSU vestings and benefits derived from certain tax credits in the current quarter. While we continue to explore tax credit opportunities that could provide future tax rate benefits, our expectation is to maintain an annual tax rate of approximately 26% to 27%, excluding these potential benefits. Provision for credit losses was $41 million in Q3 '26 compared to $25 million in Q2 '26. The primary driver of the quarter-over-quarter increase in the provision for credit losses was a specific reserve of approximately $20 million for a C&I loan. We expect to maintain a loan loss reserve of approximately 1.3% to 1.4% of total loans and leases going forward. I'll wrap up with our loan pipeline and growth outlook. Our loan pipeline is robust at approximately $2.6 billion as of April 24, 2026, consisting of $611 million of SFR jumbo mortgage, $82 million of gain on sale agency mortgage, $103 million of multifamily and small balance commercial, $83 million of auto and consumer loans and $1.7 billion across the commercial portfolio. We expect broad-based growth across several lending businesses to drive low to mid-teens organic loan growth in the next year, excluding any potential acquisitions. We will deploy some of the Jenius Bank deposits to reduce the temporary increase in borrowings in the March quarter and plan to use the remaining Jenius Bank deposits in combination with growth in our consumer and commercial banking deposits to fund our strong loan growth. With that, I'll turn the call back over to Johnny.
Thanks, Derrick. Diego, we're ready to take questions.
分析師問答
Operator Instructions. Your first question comes from Kyle Peterson with Needham & Company.
I want to start off on some of the balance sheet moving pieces. I know there's a decent amount of stuff going on with the FHLB stuff and Jenius coming on board. But I guess I noticed the securities balances also went up a decent amount this quarter. So I guess like how much of that is managing some of the liquidity before the Jenius deal closes? Or I guess, do you guys anticipate running at a bit higher securities book in the near term? I just want to think about how we should think about the mix over the next few quarters here.
Yes. If you'll notice, cash went down as well. So we have internal policy minimums for the level of cash or liquid assets that we hold. And what we identified in the marketplace back in October, November was kind of a dislocation where if we bought some treasuries in 3-, 5-, 7-year tenures and were able to hedge them with a SOFR swap, we could actually generate a 30 basis point improvement over holding that cash at the Federal Reserve, which is what we would be doing anyway as part of that liquidity requirement. So that was something. It was the widest that spread had gotten other than on the day of the dislocation. And so there was a pretty rare dislocation in the marketplace. So we took that opportunity and acquired some of those treasuries. We still can actually flip them and borrow against them and they remain liquid since they're swapped. So that's why you see that increase in the securities portfolio and that decrease in the cash. So that was around $750 million that we moved into those securities.
Okay. That's helpful. I appreciate all the color there. And then maybe just a follow-up, particularly on capital call, it looks like it had a really nice quarter on the growth front there. So I guess I wanted to see if you guys could give any more color what is either on bigger draws with existing customers? Or how much are you adding new accounts and kind of teams adding the pipeline? Just want to think more about new accounts and clients versus bigger drawdowns and utilization and how sustainable this kind of growth can be at least in the near term?
Yes. Quite a few new clients. I wouldn't say there's any significantly greater drawdowns, although these tend to take a few quarters, the lines we bring on tend to take a few quarters to reach where they tend to be, but bringing on a lot of new clients mostly. With respect to sustainability, I think that given the diversity of the loan book, it's often the case that different segments will outperform in any one quarter. So I don't expect the capital call side growth will be as big as it was in the next quarter, but I still think it will be pretty decent.
Operator Instructions. Your next question comes from Gary Tenner with D.A. Davidson.
Just wanted to ask on the credit front. Just looking at the allowance quarter-over-quarter and the increase there, was that pretty exclusively driven by the C&I nonaccrual add in the quarter? Or what other dynamics were at play in terms of the model on the allowance?
The C&I was the biggest aspect of it. There is maybe a little bit tied to obviously the broader economic events or the geopolitical events that flow through the Moody's variables and into the quantitative model, but that C&I addition was the biggest piece of it.
Okay. I appreciate that. And then just in terms of that credit in particular, could you provide any additional color on the type of credit and timing of resolution, et cetera?
Yes. It was a syndicated shared national credit. We were not the bank syndicated credit agent initially. A lot of times with these agents, I think they've made concessions early on that they probably should have been a little bit tougher on. We're now the agent, and we're working with the sponsor, and we'll see where it goes, but we felt it was obviously prudent to put it on nonaccrual and also to take a significant reserve against it. I think over the next several quarters, we'll know exactly how that's going to turn out.
Okay. And just related to, Derrick, was there any material impact in terms of reversing interest on that in the quarter?
Not significant.
Operator Instructions. Your next question comes from Jefferies.
Brooks Dutton on for Dave this afternoon. Can you guys help us quantify the impact that temporary borrowings had on NIM this quarter and whether that pressure should reverse as these borrowings roll off given the pending Jenius acquisition?
Sure. So it was maybe a basis point or two, but for the most part, it was—we swapped out or allowed a lot of our higher cost deposits to outflow and replace those with deposits. So it really wasn't anything too meaningful from an impact on NIM.
On the Jenius side, that book has been priced at a higher price to some extent than some of our other deposits, but we're probably not going to adjust pricing immediately. I think that although the Jenius acquisition is very helpful from a volume perspective, we don't really intend to try to optimize a few basis points here or there on NIM just to win a few bps. We feel pretty good about where NIM is being flattish going forward other than that roughly 5 basis points of amortization of the premium. I think eventually, we'll normalize that. But I don't want to introduce all those clients to the bank with a rate cut. So we'll probably keep pricing where it is. That's kind of the dynamic.
Operator Instructions. Your next question comes from Kelly Motta with KBW.
Maybe it's really nice how these two deposit acquisitions help provide avenues to fuel what's been really outstanding growth on your part. I'm wondering with—as we've seen with the Jenius deposits allowing you to maybe be a little more aggressive with repricing your own deposits—I'm wondering how you're viewing the Capital One deposits, maybe average cost of those? And if similarly, that's going to help you further price down funding or it should be kind of a net add to deposits, just as we think through both the margin and overall size of the balance sheet?
No, those are great questions, Kelly. Thank you. I think that we're kind of looking at these as being absolutely ensuring that we're able to have the funding for the level of loan growth that we're looking forward to. I think certainly, it does ensure that we don't have to price up deposits or increase marketing budgets in order to fund ourselves, which is obviously very helpful. But I wouldn't really model in any significant sort of increase in NIM from our ability to say, well, now we're going to try to price down other deposits just based on having that excess. I think we feel pretty good—I know I do, and I think Derrick does, too—about the fact that we've been able to manage this rate cycle really well and that we were able to have NIM expansion on the way up and essentially, for the most part, maintain our net interest margin on the way down. That is obviously assisted by this. We probably would have had to increase marketing expense somewhat otherwise or be a little more aggressive on pricing. So I think it will help on balance, but I would say our guidance on NIM incorporates those acquisitions and how we're thinking about pricing with respect to them.
Got it. So as those come on, just as we kind of think through the balance sheet in order to fund your growth, could we see a build in liquidity just as you kind of have the dry powder to deploy? And just trying to properly handicap if there's a bigger balance sheet, but a little pressure from the liquidity build there.
Yes. I think we've strategically positioned the balance sheet for this quarter and this coming quarter's growth. There might be a little overhang potentially for this fiscal Q4 with relation to the Jenius deposits. But generally speaking, I think we've lined ourselves up well not to have much that's worth modeling out. From the Capital One, it will somewhat depend on the timing of that and, of course, on some of our own organic growth and opportunities. But I would expect that there might be a little bit more of a balance sheet gross up in that later portion of calendar year 2026 that might roll over into early 2027. But again, at that point, with the expectations being greater than $30 billion of assets, it won't be anything that will be overly significant.
Got it. That's helpful. Maybe a last question for me is in regards to the Verdant acquisition. You've had some really nice boost in your fee income related to that. As you kind of think ahead, given your really strong pipelines across your businesses, how are you thinking through the operating leases versus on balance sheet? And fair to say some additional fee income growth from that? Or should we see more of that added to the loan portfolio here just as you think through your appetite for that?
It's kind of tough to tell. I referenced last quarter that the operating leases are about one of every six of all the originations roughly. And that could fluctuate up or down depending on opportunities and the nuances of the accounting around specific leases. Obviously, the objective—both the management team from an incentive standpoint and our business operations back office support—are incented to help support and grow that business. So overall it will be in line with our forecasted loan growth and is incorporated into that. I can't give you a specific number as to how that fee income will grow, but it should generally grow. I wouldn't model it too significantly given it's only about one-sixth of the origination volume.
Operator Instructions. Your next question comes from Liam Coohill with Raymond James.
Liam on for David. On your securities business, it sounds like client acquisition trends remain pretty positive despite the market volatility in the quarter. And we've talked about the opportunity to cross-sell potentially to Jenius customers, but do you maybe see similar opportunity with those Capital One clients? And could you maybe talk about some offerings that could be attractive to them?
Yes. I think over time, the Capital One clients were a little sensitive in some periods to certain kinds of cross-sell. They were not sensitive to securities cross-sell. I do think that there would be opportunities there on the Capital One clients with respect to some of those offerings just because these are retirement accounts. Right now, they're very limited in their product types that they have offered and we'll obviously offer them greater product types. We have no restrictions on our ability to cross-sell securities products to those clients. I think over time, as that develops, they can become more general banking clients as well. So I do think there's those opportunities.
That's helpful. And Kelly touched on the operating leases a minute ago, but I was also curious to hear about other core noninterest income trends. Could you discuss where you're seeing success and maybe how you expect core fees to move going forward?
Sure. One of the other items was roughly $4 million of rental income from our future headquarters as that building is larger than what we would plan to move into. There's a good amount of space already leased out, so we have some rental income and then corresponding depreciation and other expense that was roughly $2 million to $3 million in noninterest expense this quarter. On the fee income side, that is one of the other major items that impacted fee income this quarter besides the Verdant piece and the one-time legal settlement. The growth across that category was driven predominantly by the mortgage banking increase—there was a positive movement on the valuation of the MSRs at the end of the quarter. Other fees—advisory, broker-dealer and some general banking service fees—had more modest increases. As we grow each of these businesses, we expect those fees to also increase.
Last one for me. Where do you think there is the most opportunity for M&A today? And where are you seeing valuations that are rational? Is that tending to be more lending teams or larger portfolios?
We're really looking at some of each. In our portfolio, we've done team acquisitions. We've spoken with fintechs that have elements of their business model that they're really good at but need components that we have. We have banks that we're talking with, large and small. There's always the specialty finance side too. It's teams and businesses. We're very disciplined—we talk to people for a long time. We don't rush into things. We make sure it fits and that we're able to digest it. There's a lot of idiosyncrasy and individual circumstances with respect to people funding and lifecycle that fuel different opportunities. We're always very active; we talk to a lot of people and build relationships over long periods. Sometimes transactions appear quick, but they're often the result of long, deliberate relationship building.
Operator Instructions. Your next question comes from Edward Hemmelgarn with Shaker Investments.
Could you walk me through the balance of loans throughout the quarter? I mean if I'm looking at it correctly, your average balances barely grew from—if at all—from the ending balance at December 31. Was there something else going on?
There were some early prepayments during the quarter. So that's what counteracted some of the ending quarter growth. In January, balances were down at the end of that month from December. I think that had the biggest impact. We did grow the average balance by $1.15 billion of loans. You might be looking at assets; assets did stay relatively flat because we reduced some excess cash. We reduced cash and moved some into investment securities as discussed earlier, but average cash still came down about $800 million.
Yes. We had a couple of prepayments that we didn't expect. Average balance still grew, but it's important because you only earn net interest income on what you're putting out. If you're growing only at the end of the quarter, that gets reflected next quarter, not in the current quarter. So I agree with your observation.
We kind of just find it surprising because it's the first time I really noticed that there was this much of an adjustment within the quarter. Generally, you have—unless something obviously is explaining—your average balances grow similar to what the ending balances were the prior quarter?
There were a number of prepayments in January. Some of which we didn't expect. But yes, average balance still grew. I think everyone should stop using the quarter end as a mechanism of governing the speed at which they get things done. I'll convey that message to everyone in the organization immediately.
Operator Instructions. Your next question comes from Kelly Motta with KBW.
I just had a real quick one. Just wondering, given the really strong loan growth we're seeing, how the competition is faring and spreads are holding up. I understand there's quite a bit of difference between businesses, but just trying to get a sense of the direction of loan yields from here.
I feel that spreads are generally stable from where we are. To the extent there was compression, I'd say that compression has stopped. In some instances, outflows in private credit and similar dynamics have resulted in a slightly different competitive environment, but it's not enough to reverse much of the compression that happened over the prior year. I don't predict further spread compression. There will be individual credits where there's negotiation, but we have a good mix that allows us to keep spreads where they are. Verdant lending tends to have slightly higher spreads, which helps our overall mix.
There appears to be no additional questions at this time. So I'll hand the floor back to Johnny Lai for closing remarks.
Great. Thanks for everyone for joining us, and we'll talk to you next quarter.
This concludes today's call. All parties may disconnect. Have a good day.