AFC Gamma, Inc. [AFCG] Conference call transcript for 2022 q2
2022-08-09 13:47:03
Fiscal: 2022 q2
Operator: Good day, and thank you for standing by. Welcome to the AFC Gamma Second Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Gabriel Katz, Chief Legal Officer. Please go ahead.
Gabriel Katz: Good morning, and thank you all for joining AFC Gamma's earnings call for the second quarter of 2022. I am joined this morning by Leonard Tannenbaum, our Chief Executive Officer; Jonathan Kalikow, our Head of Real Estate; Robyn Tannenbaum, our Head of Originations and Investor Relations; and Brett Kaufman, our Chief Financial Officer. Before we begin, I would like to note that this call is being recorded. Replay information is included in our July 19, 2022 press release and is posted on the Investor Relations section of AFC Gamma's website at afcgamma.com, along with our second quarter earnings release and investor presentation. Today's call includes forward-looking statements and projections that reflect the Company's current views with respect to, among other things, future market growth and developments, anticipated portfolio yield and financial performance and projections in 2022. These statements are subject to the inherent uncertainties in predicting future results and conditions, and certain factors could cause actual results to differ materially from those projected in these forward-looking statements. New risks and uncertainties arise over time, and it is not possible for the Company to predict those events or how they may affect these statements. Therefore, you should not place undue reliance on these forward-looking statements. Please refer to AFC Gamma's most recent periodic filings with the SEC for certain significant factors that could cause actual results to differ materially from these forward-looking statements and projections. During this call, we will refer to distributable earnings, which is a non-GAAP financial measure. Reconciliations of net income, the most comparable GAAP measure to distributable earnings, can be found in AFC Gamma's earnings release and investor presentation available on AFC Gamma's website. The format for today's call is as follows; Len will provide introductory remarks, an overview of our second quarter performance and strategic commentary; Jon, will discuss AFC Gamma's portfolio; Robyn will discuss the origination pipeline, Brett will summarize our financial results. And we will then open the line for Q&A. With that, I'll now turn the call over to our Chief Executive Officer, Leonard Tannenbaum.
Leonard Tannenbaum: Thank you, Gabriel. Good morning, and welcome to AFC Gamma's earnings call for the second quarter of 2022. I'd like to thank our analysts and investors for joining us today to discuss our results. Before turning to our second quarter results, I'd like to touch upon the broader cannabis market. The sector has been under pressure due to the uncertainty of regulatory change, pricing compression, especially the unlimited licenses and long lead times to raise equity. As a result of the difficult capital markets environment, many cannabis operators are focused on operations that are currently built and generating earnings versus additional capital expenditures in new states. Additionally, the cannabis M&A boom that we saw occur last year has slowed down in part due to the difficult capital markets environment. This has caused many operators to utilize their limited resources to digest and integrate previously acquisitions into their existing businesses. Although operators still need capital to finance their growth, the velocity of that demand for capital has slowed over the course of this year, while rates have increased. This has enabled AFC Gamma to maintain its high level of selectivity while maintaining our interest margins. Turning to interest rates. There has been a substantial rise in interest rates in the broader markets, as well as cannabis market. We have noticed that the existing debt of leading multi-state operators is now trading at approximately 350 basis points wider from the yields that they were issued. These operators have multi-billion dollar market caps and are perceived to be the best credits in cannabis. At AFC Gamma, we also have adjusted pricing to reflect the increased cost of capital in the industry. Now turning to our earnings. In the second quarter of 2022 AFC Gamma generated distributable earnings of $0.69 per weighted average share of common stock. As we have discussed in the past, one of the drivers of quarterly earnings is repayment, sales and refinancing velocity within the portfolio as we have seen evidence of this in every quarter since going public. Distributable earnings is the primary metric that the Board considers when declaring AMC Gamma's quarterly dividend. As a reminder, the Board of Directors declared a $0.56 dividend per share for the June quarter, which was paid on July 15, 2022 to shareholders of record as of June 30, 2022. This was the fourth consecutive quarterly increase to the dividend paid to our public shareholders. Since going public, we have generated distributable earnings in excess of our dividend in each quarter, and currently have rollover income of approximately $5.7 million or $0.29 per share outstanding. During the second quarter, we closed on new commitments of a $107.8 million and had gross fundings of $82.1 million. We continue to remain disciplined in our approach to lending and implement stringent underwriting criteria to make prudent investment decisions. Although, we have not yet closed any new deals in the third quarter, AFC Gamma has additional capacity to complete transactions. Deals that we expected would have closed by now have not closed due to the borrowersâ longer lead time to raise equity in this environment. We continue to work with these potential borrowers to close transactions, and we still expect to close potentially one to two deals this quarter. As a lender, our first priority is to protect shareholder capital. We actively manage our portfolio, having regular dialogue with many of our borrowers, and we are pleased with the coverage of our loans on an enterprise value basis. It is a challenging environment for many cannabis operators due to pricing pressures as well as increased cost for expansion due to supply chain storages and inflation, which in some cases have led us to tighten covenants or require infusions of equity capital, which our borrowers have been able to satisfy to date. We believe that our portfolio, which focuses on targeting operators in limited license states is set up to mitigate risk and generate strong risk adjusted returns. All of our borrowers are current with their interest payments and no loans on a non-accrual. As of August 1, 2022, the weighted average yield of the portfolio was approximately 18%. Given the lack of capital in the market and the increase in benchmark interest rates, we believe the pricing is firming. As we stated last quarter, we believe the weighted average yield to maturity will generally remain consistent for the foreseeable future. Just to remind our investors, as we stated last quarter, we do not intend to sell stock below book value. Looking ahead, I am excited about our market positioning, portfolio composition and our opportunity set. I'll now turn the call over to Jon.
Jonathan Kalikow: Thank you, Len. As of August 1, 2022, AFC Gamma has 13 loans outstanding with $483.2 million in commitments and $423.1 million funded. We have looked at over $15 billion worth of deals since 2020 to construct our current portfolio. As risk management is our first priority, we exhibited a high degree of selectivity in constructing our portfolio with a rigorous bottoms up review of each borrower. We are focused on borrowers with operational knowledge, proven cultivation experience in cannabis and sufficient equity invested in their enterprise. So while our borrower cohort maybe small in number, we are very confident in these borrowers and the asset value of our collateral. Len previously spoke of many challenges that the cannabis industry and broader markets are facing, including labor shortages, inflationary forces, rising interest rates, and cannabis specific factors, such as pricing compression and lack of federal reform. As a result, we have seen our borrowers shoring up their businesses, turning from growth mode to instead focusing on operational efficiency and quality product production. We believe that is the correct mindset in this market. Looking ahead, we believe the market will shake out and reward strong operators and continue to enable AFC Gamma to generate strong risk adjusted returns. Going forward, we believe that there will be opportunities for companies to purchase assets at distress levels and when that happens, we want to make sure we can support our borrowers with requisite capital when they are able to snap up these quality assets at low prices. I will now turn the call over to Robyn.
Robyn Tannenbaum: Thank you, Jon. Our origination platform is focused on both expanding loans with a variety of our existing borrowers and continually sourcing new borrowers. From January, 2020 through August 1, 2022, we have sourced over $15 billion of transactions, which represents over 600 deals. As of August 1, for the same time period, our selectivity ratio was approximately 4%. The pipeline remains strong with an active pipeline of $734 million. Yet it remains difficult to predict both the timing of converting and closing those deals. As Len described earlier, many deals have been delayed due to longer lead times by borrowers to raise equity. Additionally, we are being prudent with our capital commitments and exhibiting a higher degree of selectivity as the market environment has been challenged. In early 2022, after coming off a successful 2021, we believed that we would generate between $500 million and $700 million of gross originations with anticipated repayments between $100 million and $200 million, bringing us to a net originations target range of $300 million to $600 million. Those targets were predicated on the cannabis market being similar to 2021, and also predicated on AFC Gamma's ability to raise additional capital over the course of the year. Given the headwinds that the market has faced, difficult capital markets environment and lack of meaningful reform, we have less certainty to our origination targets. Over the course of the year, we expect repayments or refinancing from a number of our borrowers. Depending on the timing of these refinancing and repayments, we have a strong pipeline of loans to execute on. It is difficult to predict how much of these repayments and refinancing will be in this calendar year or early next year. As a result, currently, our best estimate is that we will generate between $300 million and $500 million of gross originations. With anticipated repayments between $100 million and $200 million bringing us to a net originations target range of $200 million to $300 million. Before turning the call over to Brett, as President of AFC Foundation, I am excited to highlight another deserving organization that AFC Foundation donated to, Yo Soy Ella. Based in Chicago, Yo Soy Ella is a non-profit organization providing therapy, social enrichment, professional development, and domestic violence prevention and education services to women from marginalized groups. AFC Foundation was pleased to make this donation in honor of the organization's tenures of service, which should allow for the creation of more spaces dedicated to the mental and emotional healing for women in Chicago. I will now turn the call over to Brett to discuss our financials.
Brett Kaufman: Thank you, Robyn. For the quarter ended June 30, 2022, we recorded GAAP net income of $11.4 million or earnings of $0.58 per basic weighted average common share an increase of 145% as compared to the second quarter of 2021, where we had GAAP net income of $4.6 million or earnings of $0.34 per basic weighted average common share. For the second quarter of 2022, we generated net interest income of $19.9 million and distributable earnings of $13.6 million or $0.69 per basic weighted average common share compared to net interest income of $8.7 million and distributable earnings of $5.8 million or $0.43 per basic weighted average common share during the second quarter of 2021. As of June 30, 2022, our total assets were $459.3 million as compared to $464.8 million at December 31, 2021 and $278.5 million at June 30, 2021. As of August 1, 2022, AFC Gammaâs portfolio consisted of $483.2 million of current commitments with $423.1 million funded across 13 loans. During the second quarter, we closed an additional $107.8 million of new commitments to existing borrowers. We were repaid on $44.8 million from three investments and we funded $82.1 million of new and existing commitments. Year-to-date, we have closed on new commitments of $154.7 million, we were repaid on $65.8 million from four investments, and we sold $25 million from two investments. The weighted average portfolio yield to maturity, which is measured for each loan over the life of such loan was approximately 18% as of June 30, 2022. As previously mentioned, we believe providing distributable earnings is helpful to stockholders in assessing the overall performance of AFC Gammaâs business. Distributable earnings represents the net income computed in accordance with GAAP, excluding non-cash items, such as equity compensation expense, and the unrealized gains or losses, provision for current expected credit losses also known as CECL or other non-cash items recorded in net income or loss for the period. As of June 30, 2022, the CECL reserve of our loans at carrying value represents approximately 1.76% compared to approximately 1.5% at March 31, 2022. During the second quarter, we increased the CECL reserve by $1.6 million in addition to the $905,000 increase in the first quarter of 2022. We continuously evaluate the credit quality of each loan by assessing the risk factors of each loan. The increase in the reserve during the current quarter is primarily due to the macroeconomic factors, the changes in the loan portfolio, including new commitments and repayments, as well as changes in other data points we use in estimating the reserve. On July 15, 2022, AFC Gamma paid dividend of $0.56 per common share for the second quarter to shareholders of record as of June 30, 2022, our fourth consecutive dividend increase. As a reminder, on an annual basis, our dividend policy is to pay between 85% and a 100% of distributable earnings over the year. As of June 30, 2022, our total stockholders equity was $338.2 million and our book value per share was $17.03 as compared to $16.61 as of December 31, 2021. We ended the quarter with cash and cash equivalents of $45.6 million and our credit facility of $60 million remains undrawn. With that, I will now turn it back over to the operator to start the Q&A. Operator?
Operator: Thank you. As a reminder, at this time, we will conduct a question-and-answer portion of our session. Our first question comes from the line of Gaurav Mehta with EF Hutton Group. Your line is now open.
Gaurav Mehta: Yes. Thank you. Good morning, guys. Going back to your remarks about the challenges that cannabis operators are facing, and I think you commented on cannabis operators turning from growth more to operational efficiencies. Can you maybe talk about how that's impacting the demand for the loans if the cannabis operators are not growing at this time?
Leonard Tannenbaum: I think actually there's a lot of demand for loans, especially from other providers of capital who don't have money to satisfy those loans. The problem is our underwriting criteria are quite stringent in this environment because we want to see the path to operating cash flow and operating efficiencies. So we're being very discerning in the ones that we're doing. We're definitely supporting our borrowers and we believe there's going to be a lot of opportunity for them to get to expand.
Gaurav Mehta: Okay. And I think you said that you guys are planning to do $300 million to $500 million of gross originations this year and year-to-date, you guys have done $150 million of new commitments. So I guess for the remaining part of the year, what your sort of expectations on achieving that number and then I guess, how do you expect to fund that?
Leonard Tannenbaum: Well, the good news is we're going to get some velocity this year, as well as we still have capacity. We have undrawn credit line and cash on our balance sheet. So we've got the capacity to do more deals. We were selective about doing them and we're excited to â during the year, we expect to have continued velocity. As I said on the call, I think, we've had one of the three categories every single quarter, sales, refinancings or paybacks. So we have a good visibility into more of them this year, which should generate some additional earnings, but also the additional capital to put to work.
Gaurav Mehta: Okay. Thank you.
Operator: Thank you. Our next question comes from Harrison Vivas with Cowen. Your line is now open.
Harrison Vivas: Great. Thanks so much for taking my questions and congratulations on continued execution in the quarter. First one for me, just understanding year-to-date, you've had roughly $70 million in prepayments, at the midpoint that would imply maybe $80 million for the rest of the year. You said you have one to two loans in the pipeline for 3Q, I guess, how should we think about â I guess, internally, how are you thinking about timing of prepayments and I guess, if not â if you don't expect to fund those prepayments, how do you think about the timing of drawing down on your credit facility?
Leonard Tannenbaum: That's really hard to answer because it's cannabis. We never really know when things close and things get delayed all the time. So for me to start predicting exact timing is difficult. But â so that's what we try to give you a view into the six months at the end of the year. It's very difficult to do it quarter-by-quarter. But the goal of the credit, the credit facility is to be temporarily drawn, right. I like to have lots of ample capacity to take advantage of market environments, but also to make sure that our existing customers always have more money when they come up with great ideas.
Harrison Vivas: Okay. That's helpful. Historically, I think you've talked about seeing some seasonality in terms of just the general loaning activity. So I guess, did you expect to see kind of the same level seasonality this year and in 4Q, given the macro backdrop?
Leonard Tannenbaum: It's amazing having done middle market loans for 20 years. It's amazing how the fourth quarter is always the busiest quarter, even when you don't think it's going to be â or different dynamics. So yes, I continue to believe the fourth quarter will be extremely busy for cannabis. We know a number of companies â and one of the drivers of that by the way is a number of the companies have to put out audits on December 31. And if they have debt coming due in the six months past that they may have some issues with their audit, if they don't refinance that debt or extend it. So that may lead for them to consider refinancing in the fourth quarters. And so there's a lot of dynamics that drive the seasonality, including a slower August, the summer months, the sort of pick up after Labor Day, people wanting to get things done at the end of the year, bankers wanting to earn some fees at the end of the year. So there's a lot of dynamics that drive it, but I do expect the fourth quarter to be quite busy.
Harrison Vivas: Good. That's very helpful. Last one for me, just given what we're seeing on Capitol Hill, any thoughts to offer on potential passage of the SAFE Act or SAFE Plus?
Leonard Tannenbaum: I fortunately so far haven't been wrong yet because I've said it's going to pass bare bones and lame duck. I think that's â it's last shot at passing. I think there's been a lot of lobbyists focused on it. I do hope it passes as I've continued to say. I seriously doubt it passes during normal session because has been commented on committee. More importantly is sort of watching the different states and state dynamics and state supply and demand dynamics. I mean, I think Michigan is absolutely terrible. You've seen £10,000 been auctioned at the market, prices are smashed, absolutely smashed. The only people making money in Michigan are the dispensaries, nobody producing that mediocre flowers making money. We do support one high end producer. High end across the country is where you'd want to be because there's very few good high end brands and production. And regardless of state actually, you can cross into any state with a top high end brand and it sells well. But if you're producing mediocre greenhouse or modified greenhouse product in Michigan, Oklahoma, California, Oregon, Washington, and now all of these â and Colorado you are right now, I can't imagine you're making money. So we are fortunate to stay out of all of those states except for we â we do have this one borrower that we really like in Michigan, that produces extremely high end flower with a great brand. But we're very fortunate that we've underwritten to stay in the good states.
Harrison Vivas: That makes a lot of sense. Thanks for the color. I'll jump back in the queue.
Operator: Thank you. Our next question comes from John Hecht with Jefferies. Your line is now open.
John Hecht: Hey guys. Actually the last question was consistent with what I was going to ask. But maybe turning to kind of spreads or yields, I think your yields has come down a little bit over time, that was well telecasted by you guys just as the industry became more institutionalized. But at the same time, we've got rising rates and I think rising credit spreads in the market. And I guess the question is, what do you anticipate with the overall yield picture in the portfolio number one, number two, what's the competitive â are you able to ask for more? Are you able to get more in terms of structure and covenants just given that this disruption in the overall markets?
Leonard Tannenbaum: Absolutely. I mean, I think people expect yields to â that back up a lot. I don't think there's a lot of providers of capital in this market. In fact, we've seen banks retrench again, which is terrific. So look as one of the very few capital providers, we're able to pick our good credits, support them, make sure that we have enough capital to support them and charge for it. Look, when you have a â what I view as a top credit like GTI trading at 11.5%, and that doesn't include the fee they pay for the bankers. That's not the cost to them, but that's â you can go buy that loan on the market. And I view them as one of the best top-tier providers, low leverage, good operations, great operator, diversified, everything benchmarks off of there. And so for us to really rotate to the higher yields to move that 18% up, you need to see velocity and turnover in the portfolio. As you see velocity and turnover in the portfolio, if the current market continues, which is a higher yielding market, you'll see our rates start going higher. And the other thing I'll mention is look, even at this 18%, 19%, 20% IRR type yield, it's still much cheaper to borrow for these companies than raise equity, because equity is even â is far more costly. And so it's a good symbiotic relationship. We do require some equity, but leverage benefits them. And we're happy to support our clients.
John Hecht: Right. Thanks very much for the color, Len.
Leonard Tannenbaum: Sure.
Operator: Thank you. Our next question comes from the line of Aaron Hecht with JMP Securities. Your line is now open.
Aaron Hecht: Good morning. Thanks for taking my questions. In your prepared remarks when you're discussing the headwinds in the industry, I assume that revolved around cash burns as many of the operators are experiencing. Can you give us any insight on the scope of that issue on the private side? And then in terms of your portfolio, do many of the borrowers have cash burns and how do you underwrite that risk?
Leonard Tannenbaum: Good questions. Look, with margin compression, those operators that have signed up to long-term things like sale leasebacks of escalators that are now escalating to a lot of money. With margin compression, it makes it very difficult and they happen to be really good operators within the people. It makes it difficult for us to underwrite and lend to them even if they had some real estate coverage, which is pretty frustrating because there are a number of operators that love â when they finally restructure their leases, which is coming up, I believe because I don't see how it's sustainable. Then we're excited to do that to lend to those operators. For other operators that we lend to, they typically don't have those types of compressed sale leasebacks. They own their real estate. Obviously, we're resecured by real estate. And so that's allowing them to weather the storm of margin compression a little bit better, and they're more â and be more efficient in their operations. These companies are not over levered, which is good. But also â but as I said in my prepared remarks, we're making sure that the liquidity exists for them, their working capital because you start getting working capital constraints, you'll hurt your business. So we're very liquidity focused and when necessary, we've asked them to raise more equity and to their absolute credit, they've raised it. So we're very pleased with that the communication and coordination with our borrowers and we really do treat as a partnership.
Aaron Hecht: Right. That makes sense. And in terms of vertical integration, how important do you think that is to profitability and the ability to scale and sustain functional operations and what percentage of your portfolio as borrowers that are vertically integrated?
Leonard Tannenbaum: Okay. So I believe in this environment you just have to be vertical and those that are not fully vertical are quickly getting there. I mean, Nature's Medicines is a good example where they purchase an additional two Arizona dispensaries to almost go fully vertical. They still have some compression from wholesale and it hurts, in Arizona because Arizona prices are down like many others, but the dispensary businesses continues to be a great business. And so that's really preserved their margins and profitability in Arizona. So if you really take a look across work and thinking about it, everybody's pretty â Robyn?
Robyn Tannenbaum: which is small.
Leonard Tannenbaum: Pepper flower one, which is now â and you guys saw that with last quarter. I think we talked about that being paid. I mean, just a couple of million dollars left in that loan. That was my first loan. Here everybody really is focused on being vertical and being not necessarily fully vertical, but to some degree it is. And that's also really important for 280E mitigation because if you're vertical, there's lots of ways to avoid this 280E problem, especially if you're a private company. And we work with our clients on making sure that they're paying the right amount of taxes, not overpaying taxes and we have some very good legal teams that we recommend to them to help them.
Aaron Hecht: Thanks for the thoughts. I'll jump back in the queue.
Operator: Thank you. Our final question comes from Mark Smith with Lake Street Capital Markets. Your line is now open.
Mark Smith: Hi, guys. As we look at repayments coming â outlook for more refinancing, can you talk about volatility in the model just as we think about maybe prepayment penalties or anything else that, maybe talk about maybe how that's impacted and maybe your outlook for that in second half?
Leonard Tannenbaum: It's so difficult to predict, and I know that you and analysts have a hard time figuring out our model and it's just almost impossible to do timing. We have not yet taken exit fees into income. That's still out there. If we keep experiencing that, we may have to, that's going to change, but we don't know when that's going to happen. The volatility includes â just to remind everyone on the call, right, when the company repays its debt, whatever the remaining OID is written up, there could be a prepayment penalty, maybe not. There could be an exit fee, maybe not. There's a lot of things that can drive and earnings that would be taken into that quarter. And then you would â maybe do a new loan or they may exit or sell the company or something like that. So it's very difficult to determine. But every quarter â as I keep saying, every quarter is pretty lumpy. We're very focused on the year. We're not focused on each quarter. And so far since inception, we've really delivered and we hope to continue to deliver for our shareholders.
Mark Smith: That's fair.
Leonard Tannenbaum: We're excited to do that.
Mark Smith: Okay. And kind of similarly as we think about refinancing loans here, thoughts just on floating in the mix there on floating rate loans?
Leonard Tannenbaum: So I think all of the loans that we're proposing today are floating. And with different floors, we haven't closed any this quarter. But anything that we proposed and worked on is floating.
Mark Smith: Perfect. And last one for me, just Len. If you look into your crystal ball at all here, just broadly on the industry and I know that you're not exposed there, but as you look at some of these Western states that are having supply issues, are you seeing a bottom there yet? Do you think that we continue to see this maybe bleed into other markets maybe just kind of your big picture thoughts on the industry would be great.
Leonard Tannenbaum: Yes. So I think our states that we don't operate and thankfully are California, Oregon, Washington, Oklahoma, Colorado and now Michigan and because Michigan is a mess. And so the states I'm excited about are Missouri. I think Missouri Rec is going to be great. I think it's going to hurt Illinois a little bit. I think there's too many dispensaries in Illinois. We saw two deals break for the sale of some dispensaries. I'm still excited about Maryland. I think New Jersey is amazing. I have a big question mark on New York where we'll see, how New York controls, what are the biggest cannabis markets in the world, which is currently full of illicit, but you're seeing more and more press of cease-and-desist orders. If you guys Google it, you're seeing a bunch of cease-and-desist orders in you're seeing a bunch of cease-and-desist orders in other counties with the illegal dispensary saying it's not legal to do that. And so they're starting to crack down. I hope they do. I think Connecticut's actually going to be quite exciting. I think Virginia is going to be trouble when they â I don't know, would 300 new licenses issued. That's crazy. Florida who knows how long these 19 licenses will take to go, but truly has such a dominant position in the market. And then some of the other bigger RSOs have the capital to really expand. It's a market where you need the capital to expand. And so it's a great market, but you just donât need the capital, but it's slowing, right. The new patient ads are slowing. We're watching every single market with supply and demand dynamics, the politics. But what I will say is, I think these unlimited license states it's going to get worse before it gets better. You can see bankruptcies and liquidations in those states. And it may â my current guess is bottoms first quarter next year. And then I'm actually pretty excited because after you wash out all of the weaker players, you may get supply and demand and balance in the limited license states for sure and you may see prices rise. And so that could really set up for a very good mid next year opportunity for us and we look forward to taking advantage of it.
Mark Smith: Sounds great. Thank you.
Operator: Thank you. Since there are no more questions, I'd like to turn it over to AFC Gamma, Len Tannenbaum, CEO for closing remarks.
Leonard Tannenbaum: Thank you all for attending. Look, I think you've taken it from our comments and remarks. We're very excited to be providing capital in this industry and to work with our partners, and we look forward to continuing to build with it and grow with it. So thank you all for listening.
Operator: Thank you for your participation in today's conference. This concludes the program. You may now disconnect.
