管理層發言
Good morning, and welcome to Bread Financial's Second Quarter 2026 Earnings Conference Call. My name is Shannon, and I will be coordinating your call today. It is now my pleasure to introduce Mr. Brian Vereb, Head of Investor Relations at Bread Financial. The floor is yours.
Thank you. A copy of the slides we will be reviewing and the earnings release can be found on the Investor Relations section of our website at breadfinancial.com. On the call today, we have Ralph Andretta, President and Chief Executive Officer; and Perry Beberman, Executive Vice President and Chief Financial Officer. Before we begin, I would like to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward-looking statements. These statements are based on management's current expectations and assumptions and are subject to the risks and uncertainties described in the company's earnings release and other filings with the SEC. Also on today's call, our speakers will reference certain non-GAAP financial measures, which we believe will provide useful information for investors. Reconciliation of those measures to GAAP are included in our quarterly earnings materials posted on our Investor Relations website. With that, I would like to turn the call over to Ralph Andretta.
Thank you, Brian, and good morning to everyone joining us today. We are pleased with the strong financial results Bread Financial delivered in the second quarter. We saw accelerating credit sales, continued loan and deposit growth, increased revenue and PPNR, and improving credit performance. These results demonstrate the strength of our business model and the benefits of our continued emphasis on responsible growth and operational excellence, positioning Bread Financial for sustained positive long-term performance. For the quarter, net income was $146 million, and tangible book value per common share increased 22% year-over-year to $63.66. Adjusted PPNR grew 11% year-over-year, supported by 7% revenue growth and ongoing disciplined expense management. Our strong execution across product mix and industry verticals is reflected in our second quarter credit sales growth of 11% year-over-year and 5% end-of-period loan growth. Our growth in the quarter was broad. Our existing co-brand partnerships, especially in travel and sporting goods, continue to see healthy growth. In addition, we continue to expand our reach with our Ford program launch, a new home partnership with Raymour & Flanigan, Furniture First, and Ethan Allen, and our Bread Pay partnership with Vivint. These relationships reinforce the value we deliver through flexible payment solutions, disciplined underwriting, and a strong partner focus. End-of-period direct-to-consumer deposits grew 16% year-over-year to $9.4 billion. This marks our second strongest quarter of growth since the program began in 2019. Our direct-to-consumer deposits now comprise 50% of our funding mix, achieving an important milestone for the company and a target we set during our initial Investor Day. I am pleased with the growth and see further opportunity to build on this success. Also during the second quarter, we continued to optimize our capital stack, issuing a second round of preferred stock and repurchasing 7% of our outstanding common shares. We will remain disciplined in our capital allocation strategy, prioritizing responsible, profitable loan growth and strategic investments in our business. Our results underscore our success in executing our priorities despite ongoing macroeconomic uncertainty. Persistent inflation continues to influence household decision-making. Even so, our consumers' financial health remains resilient, as evidenced by continued sales growth, a stable payment rate, and improving credit performance. We saw improvement in both our net loss rate and delinquency rate, reflecting the benefits of proactive credit risk management, disciplined underwriting, and the quality of our customer base. We will remain appropriately cautious given the broader macroeconomic environment. These trends reinforce our confidence in our business outlook and the effectiveness of the actions we have taken. Finally, turning to our investment priorities. We continue to make targeted investments that support growth for Bread Financial and our partners. These efforts span digital and technology enhancements across the enterprise, including the responsible use of AI. We are strategically integrating AI in ways that advance operational excellence by improving productivity and efficiency, enabling innovation, and enhancing risk management. Additionally, we are collaborating with our partners to develop use cases in agentic commerce and servicing, further advancing innovation across the customer experience. We prioritize AI outcomes that remove friction and drive results so ideas can turn into measurable progress for our brand partners and customers. As I highlighted, this was another strong quarter for our company. Our success is a result of the efforts of our associates and leadership team. As we transformed Bread Financial over the past six years, we focused on building a resilient business through strengthening our balance sheet, investing in areas that drive responsible, profitable growth, and efficiencies. The transformation of our company is now evident in our results. Investors are increasingly recognizing the value our business model creates and the remaining catalysts to drive further improvement in our financial results. We are proud of the progress, and we remain focused on delivering sustainable shareholder returns over the long term. Now I'll pass it over to Perry.
Thank you, Ralph. Slide 3 highlights our second quarter performance. We delivered a solid quarter. Average loans increased 3% to $18.2 billion, while end-of-period loans increased 5% to $18.5 billion, reflecting the new partner and credit sales momentum that Ralph mentioned, as well as improving credit performance. Revenue increased $64 million, or 7% year-over-year. The increase was primarily driven by average loan growth, impacts from previously implemented pricing changes, lower interest expense, and higher interchange and merchant discount fees related to higher credit sales. These benefits were partially offset by higher retailer share arrangements and lower billed late fees. We generated net income of $146 million and diluted EPS of $3.55. Net income increased $7 million, or 5%, primarily due to loan growth resulting in higher revenue, partially offset by higher provisions for credit losses and income taxes. The higher provision for credit losses reflects a reserve release of $3 million this year, compared to a release of $74 million last year, with the variance primarily driven by the strong sequential period-end loan growth in the second quarter of this year. Looking at the financials in more detail on Slide 4. Second quarter net interest income increased 7% year-over-year, driven by the gradual build of our pricing changes and lower interest expense. Noninterest income was lower year-over-year by $1 million, or 4%, driven by higher retailer share arrangements, or RSAs, which includes both higher credit sales-related partner payments and increased profit share driven by improved loan yields and credit losses. Sequentially, while payments under our retailer share arrangements were higher, the impact was offset by stronger-than-expected interchange revenue, merchant discount, and other fees. We expect the RSA payments to increase in the third quarter as a result of our continued expected growth as well as timing. To be clear, these higher payments are a positive indicator, reflecting stronger credit sales, growing loan balances, and the benefits of our pricing actions, all of which have driven revenue growth. Additionally, these payments are impacted by an improving net loss rate, stronger partner retention, and new partner additions. Total noninterest expenses were nearly flat year-over-year, as higher employee compensation and benefit costs were offset by the prior year impacts from debt purchases. Excluding the impacts from debt repurchases, expenses were up $15 million, or 3%. Looking at the expense line item variances, which can be seen in the appendix, employee compensation and benefits costs increased primarily due to higher wages related to annual merit increases and incentive compensation, as well as increased medical claims, partially offset by operational excellence initiatives. Given our expectation for continued loan growth and strong seasonal sales activity in the second half of the year, we anticipate expenses will increase sequentially in the third and fourth quarters. These increases reflect higher growth-related variable expenses as well as continued investments in growth, efficiencies and new capabilities. Finally, PPNR was strong, increasing $62 million or 14% year-over-year, while adjusted PPNR, which excludes impacts from debt repurchases, increased $49 million, or 11%. These results were driven by growth in our loan portfolio and ongoing pricing and expense discipline. Turning to Slide 5. Net interest margin of 18.5% increased year-over-year, while sequential movement reflected normal seasonal trends. Billed late fees continued to move lower sequentially and pressured NIM as delinquency rates improved. We are also seeing interest expense decrease as our cost of funds benefits from the funding actions we have taken over the past year. As Ralph highlighted, our direct-to-consumer deposit platform continues to grow, reinforcing a cost-effective and steady, reliable funding source. Average direct-to-consumer deposits represented 50% of total funding, up from 45% a year ago. We continue to see value in this program, with a goal of increasing our DTC deposits as a percent of our overall funding mix. Moving to Slide 6. Our liquidity position remains strong. Total liquid assets and undrawn credit facilities were $6.7 billion at the end of the quarter, representing nearly 30% of total assets. At quarter end, deposits comprised 80% of our total funding with the majority being FDIC insured direct-to-consumer deposits. Shifting to capital, we ended the quarter with a CET1 ratio of 12.9%, down 10 basis points compared to last year. As shown in the upper right table, our CET1 ratio benefited by 340 basis points from core earnings. Common stock repurchases and preferred and common stock dividends reduced our capital ratios by 320 basis points, while the impact from costs related to debt repurchases accounted for approximately 30 basis points impact to CET1 since the second quarter of 2025. Adding some detail to the capital items Ralph mentioned. In the quarter, we further optimized our capital structure by issuing $135 million of 8.875% preferred stock. This successful issuance, combined with continued strong earnings, positioned Bread Financial to return value to shareholders through share repurchases, buying back 2.8 million shares or $241 million of common stock. We ended the second quarter with $449 million remaining under our current stock repurchase authorization. The pace of our share repurchase activity will slow in the third quarter compared to the second quarter as loan growth is anticipated to increase for the remainder of the year. For context, in the month of July, we plan to repurchase $25 million of common stock. Additionally, the timing of a potential additional preferred share issuance will likely occur no sooner than the fourth quarter of this year, depending on market conditions. Finally, looking at the bottom right of the slide, our total loss absorption capacity, comprising total company tangible common equity plus credit reserves, ended the quarter at 24.6% of total loans, demonstrating a strong margin of safety should economic conditions deteriorate. We have a proven track record of building capital and generating strong cash flow, and we remain well positioned across capital, liquidity, and reserves. This foundation provides the stability and financial flexibility needed to navigate an ever-evolving economic environment while continuing to create value for our shareholders. We continue to maintain our commitment to disciplined capital allocation. First and foremost, support responsible, profitable loan growth with the right returns that will regenerate capital for years to come. As we are experiencing faster loan growth this year, it will become a more important and prevalent use of capital. Invest in core technology and AI capabilities to support existing and new partners, improve customer experience, and increase risk management, allowing us to remain competitive and more efficient over time. Lastly, return unused capital back to shareholders in the form of dividends and share buybacks while maintaining appropriate capital levels. Moving to credit on Slide 7. Our delinquency rate for the second quarter was 5.25%, down 48 basis points from last year and down 34 basis points sequentially. Our net loss rate was 6.98%, down 90 basis points from last year and down 35 basis points sequentially. These results reflect the benefits of our disciplined credit risk management, sophisticated underwriting, and the continued maturation of higher-quality new accounts. We anticipate that the third quarter net loss rate will be approximately 30 basis points better than the second quarter. Overall, consumers managed well throughout the quarter. The tailwind of tax season, along with generally healthy employment and wage growth, helped blunt inflationary pressure, inclusive of elevated fuel prices, resulting in strong sales and payments with an improving credit risk score mix. The second quarter reserve rate improved 66 basis points year-over-year to 11.23%, driven by our improving credit metrics, higher credit quality new vintages and stronger credit risk distribution, with 65% of cardholders having a prime score above 650. Regarding our credit reserve modeling, we continue to apply prudent weightings on downside economic scenarios given the wide range of potential macroeconomic dynamics, including ongoing uncertainty related to global conflicts and their downstream impacts, including on inflation. These weightings remained unchanged from the prior quarter. Turning to Slide 8. Our revised 2026 outlook is based on the strong results we delivered in the first half of the year and a macroeconomic forecast that assumes continued consumer resilience, inflation remaining above the Federal Reserve's target rate of 2% and a generally stable labor market. We are pleased with the solid loan growth we produced in the second quarter. Given our results to date, we now expect full year 2026 average credit card and other loan growth to be up low to mid-single digits compared to 2025 versus our prior guidance of low single digits. Growth will continue to be supported by our stable partner base and new business launches, resulting in strong credit sales coupled with continued gross credit loss improvements. Total revenue growth is now also anticipated to be up low to mid-single digits, primarily driven by average loan growth. We anticipate full year net interest margin to be flat to slightly higher than 2025 as a result of ongoing benefits, albeit slowing, from previously implemented pricing changes and improved funding costs. These NIM tailwinds will be partially offset by lower billed late fees from improving delinquency trends and continued product mix shift with better credit risk. As I mentioned previously, for noninterest income, we expect higher retailer share arrangements going forward as a result of both higher credit sales-related partner payments and increased profit share driven by improved loan yields and credit losses. We manage expense growth based on revenue generation and ongoing investment in our business, and we anticipate delivering positive operating leverage in 2026, excluding the pretax impacts from debt repurchases. As I mentioned, we will continue to invest in our business to drive growth, build new capabilities for our partners and customers, and deliver future efficiencies. Given the continued improvement in our credit metrics, we have improved our full year net loss rate guidance to an expected range of 7.0% to 7.1%, versus our prior guidance of the low end of 7.2% to 7.4%. This updated guidance contemplates our visibility into the current delinquency pipeline, combined with stable macroeconomic conditions, continued risk and product mix shifts, and a resilient consumer. We continue to expect our full year normalized effective tax rate to be in the range of 25% to 27% with quarter-to-quarter variability due to timing of certain discrete items. Overall, we delivered impressive financial performance in the second quarter, continued to generate capital, and demonstrated our ability to manage effectively through an uncertain operating environment. As we move to the second half of the year, we remain confident in our ability to deliver on our revised 2026 financial targets. Finally, Slide 9 highlights the financial targets initially discussed during our Investor Day in June of 2024. Given the progress we have made executing on our initiatives over the past few years, we are well positioned to deliver on our updated near-term targets. With continued PPNR growth momentum driven by responsible loan growth and operating efficiency, along with progress optimizing our capital stack and achieving our targeted credit metrics, we have a clear path to achieving our long-term mid-20s percent ROTCE target in the coming years. Delivering these returns, combined with business growth, should provide significant value to Bread Financial shareholders. Operator, we are now ready to open the lines for questions.
分析師問答
Our first question comes from the line of Moshe Orenbuch with TD Cowen.
Great. Thanks. Thanks very much. Maybe, Ralph and Perry, the period-end loan growth already is kind of in the mid-single digits as of this quarter. As you look at both credit sales growth and its impact on loan growth and everything else that's out there, how do you think about the possibility of that accelerating during the second half of the year?
Thanks, Moshe. Appreciate the question. Yes, we're really pleased with the performance of loan growth and credit sales growth so far this year. As you look towards the back half of the year, there is a little bit of uncertainty across the industry. The month of June was a stronger-than-usual month, and July is already showing signs of pulling back, and that's industry-wide, not just unique to us. For us, particularly in the back part of the year, we're going to start comping and growing over some product launches or new partner launches that we had in our furniture vertical in the fourth quarter, and that will slow the growth comparison considering those programs were ramping up throughout the end of last year and through the first half of this year. Overall, when you look at the guide, it's an average loan guide. You'd expect the end-of-period loans to be higher than that average, probably more than mid-singles. But holiday spend has a lot to do with the variability of the end loans.
Got it. Makes a lot of sense. Thanks, Perry. Maybe could you talk a little more about how to think about your relationship with the retailers and the RSA as you go forward and what to expect in a better growth environment and potentially better profitability as well?
Appreciate that question. RSA is part of noninterest income and is a challenging line because of all the elements that net into it. Higher credit sales drive more interchange, more merchant discount fees, and more activity. Conversely, it means you're paying more to retailers in terms of share agreements, customer rewards, and profit share. Those arrangements vary by partner and the mix of compensation constructs. As we continue to improve overall performance, revenue through RSA will increase over time, and that's a positive indicator. When we bring in newer partners, they have different constructs, and renewals occur. All these things together mean you should expect RSA payments to increase.
Our next question comes from the line of Sanjay Sakhrani with KBW.
I want to follow up on Moshe's question on credit sales specifically, Perry. I understand the comp gets a little more difficult for credit sales, but it still seems relatively low a year ago. We shouldn't see a significant step down in sales growth unless there's seasonality, correct? As we think about how to factor in the RSAs, we tend to look at that revenue line relative to sales. Is that the right way to think about it? And should we assume that compression stabilizes here? Maybe give a little color on how to model that line given higher RSAs.
Thank you, Sanjay. On credit sales, we believe we're hitting an inflection point with good momentum. Our business development and client partnership teams are making great progress with partners and new additions. Some of this sales growth is comping off a lower first half of 2025, and towards the back end of 2025 we started ramping new partners. So comps will get tougher. I'm not suggesting we won't have strong credit sales growth, but it may not look like 11% the rest of the way because June was an exceptionally strong month across the industry. Regarding RSA, you can look at that as a percent of credit sales, which is likely the best approach. Over time, I expect that percent to increase due to competitive markets, better P&L performance, and profit share as credit losses decline and risk-adjusted margins widen. Some pricing changes were intended to result in more sharing back to partners, and that will play through as well.
I'll follow up with Brian after the call. On credit quality, delinquency dropped below the five-year average and mix is moving toward higher credit quality loans. Should we expect that to continue to track down or inflect at some point because of growth and seasoning? Also, how should we think about the reserve rate on a go-forward basis relative to what the new normal of CECL day one could be?
I'll take both questions. On credit, we're pleased with the performance across the portfolio, including new vintages. Entry rates and roll rates are improving. Some improvement is due to growth, but not materially. We aim to book new vintages around a 6% net loss target and underwrite for profit. Seasoning is less of a worry. Given our guide for low- to mid-single-digit average loan growth, we have runway before seasoning would slow expected improvements toward a 6% loss rate. Regarding CECL, it's largely macro-dependent. Our current macro assumptions allow a path toward that 6% target without significant macro improvement. CECL typically moves down in line with credit quality improvements. Over time we expect the CECL rate closer to 10% as we approach that 6% net loss target.
Our next question comes from the line of Terry Ma with Barclays.
Maybe to start with credit sales. It accelerated meaningfully this quarter. Any color on how much of that acceleration was from new partners versus existing partners? You noted a slowdown in July thus far. Can you talk about what verticals you're seeing those slowdowns in?
Terry, the growth was broad. If I had to isolate it, travel and entertainment and sporting goods were strong drivers. New partners such as Raymour & Flanigan, Ethan Allen, and Furniture First drove a lot of the growth. Bread Pay also had a very good quarter, particularly with a new partner called Vivint. So the growth was broad, but those were the primary contributors.
On the deceleration thus far in July, where are you seeing that?
It's broad. As Perry said, we still expect spending growth, but it may not be as robust as the second quarter. We've seen deceleration across the board.
That's helpful. On NIM, you touched on it a bit. NIM was strong in the first half and your full-year guide is flat to slightly up. Can you talk through the moving pieces in the second half? Does that imply lower year-over-year NIM?
Not necessarily. NIM will move seasonally. The second quarter was down from the first quarter, then it goes back up and then down again. There are many moving parts: credit sales originations, product mix, pricing actions, and funding costs. Private label has a much higher loan yield than some other products like certain Bread Pay or big-ticket items. Better credit reduces late fees, which pressures NIM, but improving gross losses provide a partial benefit. Overall, there's seasonal movement and offsets; if NIM were to slightly come down, it could reflect better credit performance as well.
Our next question comes from the line of Jeff Adelson with Morgan Stanley.
Following up on the long-term targets you put in the slides. You said you have a path to get there. On ROTCE, you've been in the low 20% range and stepped up recently. What are the chances you overshoot mid-20% in the near term as credit metrics continue to improve and you execute? Help us understand the moving pieces to reach mid-20% and why you might not overshoot in the near to medium term.
ROTCE will move around. If you strip out the CECL build or release, that gives a view of underlying core ROTCE. To reach long-term mid-20% ROTCE while excluding a mid- to high single-digit loan growth assumption and a 10% CECL rate, you'd expect a higher-than-mid-20% core ROTCE. Each year looks different depending on growth. In years where end-of-period loan growth accelerates, provision build will drag on ROTCE, which could limit overshoot potential. The path to mid-20s% relies on three elements: continued improvement in credit losses, further optimization of our capital stack — we've made progress there and may have preferred issuance left to fully optimize — and continuing to scale and drive operating efficiency.
Okay, great. That's clear. A follow-up on noninterest income and RSA. You mentioned outperformance of interchange this quarter. Why didn't that interchange flow through to a higher RSA payment this quarter? What specifically led to RSA being more muted, and why should we expect a step-up next quarter?
Broadly, noninterest income benefited from stronger other fees and merchant discount fees due to higher originations. Interchange came through as well. Some RSA timing effects meant payments did not fully increase in the quarter; we expect profit share and partner payments to rise as margins improve and partner programs come online. Over time, RSA as a percent of credit sales is likely to increase.
Our next question comes from the line of John Hecht with Jefferies.
On the increase in the growth guide, can you break down how much is from new customers versus increased spend and borrowing from the current book?
A couple of points. The existing partner base is very strong and showing improvement. As gross losses improve, less is leaking out the back door, so existing programs are stabilizing and growing. New programs launched late last year and ramping this year are also contributing. Bread Pay is contributing good growth from new partners on that platform. We expect continued growth and will add more partners later in the year.
Where are you seeing momentum in spend — traditional retail counterparties, platform programs like the NFL, or a specific product category seeing green shoots?
We've seen spend across the board, particularly on our co-brand products with general-purpose spend. Travel and entertainment has been strong, sporting goods too, and the furniture vertical has performed very well. Bread Pay also performed strongly, particularly with two or three partners, including Vivint.
Our next question comes from the line of Mihir Bhatia with Bank of America.
On expenses: you said expenses will increase sequentially in 3Q and 4Q as you invest in growth-related expenses and AI capabilities. Can you help distinguish variable growth expenses versus discrete and discretionary spend? With that cadence, should we still expect positive operating leverage for the full year, or is that dependent on revenue getting closer to the high end of the guide?
Thanks, Mihir. As volumes increase — more accounts and more customer service activity — variable costs rise, such as technology costs and card processing. We have consistently focused on transforming the company and investing in technology; AI investment is ramping. Operational excellence drives efficiencies that help self-fund investments. The expense ramp in the back half is not a major step function; we remain committed to positive operating leverage for the year, excluding pretax impacts from debt repurchases, and we're confident in that given our start to the year. That doesn't mean we wouldn't make an important investment if necessary, but we can fund these investments because operational excellence has generated tens of millions of dollars to reinvest.
On credit, you reiterated the 6% net loss target and said you don't want to force it by over-tightening. Given the improvement in new vintages and delinquency trends, any thoughts on timing to reach that target? Do you need a better macro, or is the current macro sufficient?
If the current macro environment holds — unemployment below 5% and inflation drifting back toward 2% over time — we have a path toward 6% over the next couple of years. The pace depends on macro and the quality of new vintages, which are coming on larger and with better risk mix. We underwrite for profit and won't force our way to 6% by over-tightening since enabling sales for brand partners is core to the business. We expect continued improvement into 2027 and potentially 2028 to achieve the target, but macro weakness could push the timeline out. I wouldn't expect us to reach a full-year 6% next year.
Our next question comes from the line of John Pancari with Evercore.
This is Russ Anderson on for John Pancari. On buyback cadence and CET1, CET1 fell to 12.9% despite solid buybacks. Your near-term target is 13% to 14%. You mentioned a slowdown in buybacks as loan growth accelerates and a July repurchase plan of $25 million. Is $25 million per month a good way to model the second half, or how should we think about cadence?
We're not going to give specific guidance on a particular month or quarter. Loan growth will primarily dictate available capital. Fourth quarter typically has a significant seasonal uplift in loans, which requires capital to fund and usually a CECL build that pressures earnings. That will slow repurchases. The pace also depends on whether we opportunistically issue additional preferred stock in the fourth quarter; if markets aren't favorable, that could push issuance into next year. Keep in mind we had preferred issuance in the first half and slower loan growth earlier in the year, but loan growth ramps toward the back part of the year and seasonally increases end-of-period loans, which will slow repurchase pace.
On credit, DQs and NCOs improved materially. You said 3Q NCO should be about 30 basis points better than 2Q. That implies 4Q may reflect normalization to reach the midpoint of your guide. Can you discuss DQ roll rates and the drivers for the second half and 4Q?
We remain watchful of uncertainty, including fuel price variability, which can affect consumer behavior. We take a middle view and account for some uncertainty. If fuel prices fall quickly, we'd be more optimistic; if they rise, it puts pressure on consumers. That's why we provide ranges and remain cautious. Roll rates have improved and overall trends are positive, but macro swings can influence the pace.
Our last question comes from the line of Dominick Gabriele with Loop Capital.
Good results. Ralph, looking at medium- to long-term guidance and the transformation over recent years, tell us why Bread is not a low double-digit EPS growth engine?
A lot of this is macro-dependent. I believe we are a low double-digit growth engine, and I'm confident we will be. That said, performance depends on the macroeconomic environment and consumer sentiment, so we remain cautiously optimistic as we move forward.
Perry, you talked about NIM being flattish to slightly better and noted growth in cash and investment securities as a percentage of average earning assets. Can you discuss expectations for that bucket so we can better understand what matters most, which is loan yields versus funding costs?
The cash we hold will normalize over time. There may be periods with a bit more cash, but we won't hold more than we need. Our expectation is to put cash to work as we have good loan growth and fund incoming loans. The yield on loans versus funding costs will be the primary drivers for NIM over time.
I'll now pass it back to Ralph Andretta for closing remarks.
Thank you very much. We were very pleased with the quarter, and we want to thank you all for your continued interest in Bread Financial. Everyone, have a terrific day.
This concludes today's conference. Thank you for your participation. You may now disconnect.