SoFi Technologies, Inc.
Q1 2024 Earnings Call Transcript

Published: 29 Apr 2024

[Operator:]

Good morning. My name is Jordan and I will be your conference operator today. At this time, I'd like to welcome everyone to the SoFi Technologies Q1 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there'll be a question-and-answer session. [Operator Instructions] With that, you may begin your conference.

[Maura Cyr:]

Thank you and good morning. Welcome to SoFi's first quarter of 2024 earnings conference call. Joining me today to talk about our results and recent events are Anthony Noto, CEO; and Christopher Lapointe, CFO. You can find the presentation accompanying our earnings release on the Investor Relations section of our website. Our remarks today will include forward-looking statements that are based on our current expectations and forecasts and involve risks and uncertainties. These statements include, but are not limited to, our competitive advantage and strategy, macroeconomic conditions and outlook, future products and services, and future business and financial performance. Our actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are described in today's press release and our subsequent filings made with the SEC, including our upcoming Form 10-Q. Any forward-looking statements that we make on this call are based on assumptions as of today. We undertake no obligation to update these statements as a result of new information or future events. And now, I'd like to turn the call over to Anthony.

[Anthony Noto:]

Thank you, and good morning, everyone. Q1 was another exceptionally strong quarter for SoFi. We continue to successfully execute on our strategy of making SoFi the one-stop shop for digital financial services. We expected that 2024 would be an important year of transition. Heading into this year, we had a conservative outlook given interest rate volatility, industry liquidity, inflation and macroeconomic environment concerns. We planned for continued strong growth from our Financial Services and Technology Platform segments, up 50% year-over-year, offsetting our plan for lending to be 92% to 95% of 2023 revenue. And we set out to strengthen our balance sheet and capital ratios by continuing to grow our tangible book value. I'm proud to report that our team delivered across each of these fronts and more in the first quarter of 2024. First, we responsibly grew revenue, while further diversifying our business. We grew adjusted net revenue in Q1 to $581 million, up 26% year-over-year. This marks the 12th consecutive quarter of greater than 25% growth. We grew adjusted EBITDA to $144 million, up 91% year-over-year. This represents a 25% margin compared to 16% a year ago. I'm pleased to report that our Financial Services and Technology Platform segments make up a growing portion of our revenue quarter-over-quarter, contributing 42% of adjusted net revenue in Q1. This is up from 40% last quarter and 33% a year ago, and we remain on track to finish 2024 with our revenue mix near 50

[Christopher Lapointe:]

Thanks, Anthony. The first quarter demonstrates strong evidence of how our increasingly diversified and differentiated business model drives SoFi's durability and long-term growth potential. I'm going to walk through key financial highlights and our financial outlook. Unless otherwise stated, I'll be referring to adjusted results for the first quarter of 2024 versus first quarter of 2023. Our GAAP consolidated income statement and all reconciliations can be found in today's earnings release and the subsequent 10-Q filing, which will be made available next month. For the quarter, we delivered adjusted net revenue of $581 million with growth of 26% year-over-year. Adjusted EBITDA was $144 million at a 25% margin. This represented over 8 points of year-over-year margin improvement, demonstrating significant operating leverage across all functional expense lines. In fact, sales and marketing declined as a percentage of adjusted net revenue by 9 points relative to the year-ago quarter, while total non-interest operating expenses declined 16 points year-over-year. We delivered our second quarter of GAAP profitability, with GAAP net income reaching $88 million, a $122 million improvement year-over-year. Net income included the benefit of a $59 million net gain associated with the exchange of a portion of our 2026 convertible notes at a discount for equity during the quarter. We reported GAAP diluted EPS of $0.02, which was not impacted by the gain from the convertible note exchange. Now onto the segment level performance. Starting with Financial Services, where net revenue of $151 million increased 86% year-over-year, with new all-time high revenue for SoFi Money and lending as a service, as well as continued contributions from SoFi Invest and Credit Card. Overall monetization continues to improve with annualized revenue per product of $59, up 31% year-over-year versus $45 in Q1 2023. This is driven by higher deposits and member spending levels in SoFi Money, greater AUM and monetizable features in SoFi Invest, and robust growth within SoFi Credit Card spend. Net interest income increased 106% year-over-year, primarily driven by $11.5 billion growth in deposits year-over-year. Our non-interest income increased 34% year-over-year, primarily driven by two factors

[Operator:]

[Operator Instructions] Your first question comes from the line of John Hecht of Jefferies. John, please go ahead.

[John Hecht:]

Good morning, guys. Excuse me -- Good morning. Thanks for taking my question. Chris, you gave some of the metrics in the personal lending book on charge-offs and so forth. I'm wondering what you're looking at this point in terms of payment trends and kind of the underwriting factors that informs your credit outlook, and maybe if you could give us your thoughts on that as well.

[Christopher Lapointe:]

Sure. I'll start and Anthony can chime in. So, we feel really good about our credit and the underlying performance of our loans, and everything is performing in line with expectations while we continue to see the underlying signs of improvement. In Q1, our net charge-off rate was 3.45%, which was down from 4.0% in Q4, which included the impact of asset sales, new originations, as well as the delinquency sale that we did in the quarter. In terms of our outlook, we anticipate ongoing normalization in credit performance towards pre-pandemic levels of 7% to 8% life of loan losses, which is in line with what we said last quarter. Historically, life of loan losses could reasonably be approximated by the weighted average life of the portfolio multiplied by a given quarter's annualized net charge-offs. However, while our life of loan loss trends and our outlook are unchanged, the relationship to any given quarter's NCOs has changed. In fact, what we're now seeing, particularly with how recent vintages are playing out, is a more rapid factoring down of loan principal as a result of increasing prepayment spades and demand for shorter-term loans. What that means is that we're starting to see a greater proportion of losses happening sooner, and as a result, we're seeing an outsized impact on NCO rates that are not directly correlated to the life of loan losses when applying the normal 1.5 times weighted average life to them. In other words, for any specific recent vintage, you can expect to see losses lower in the latter stages than before and higher in the earlier stages. However, our life of loan losses will remain in line with our 7% to 8% outlook. What gives us confidence in that 7% to 8% outlook is that, we have a decade of experience of underwriting high-quality credit, and as we've been talking about for quite some time, optimizing the credit profile of those we underwrite to is part of our DNA. We underwrite to cash flow, we have very robust analytics, detailed vintage-based models and forecasts which are managed by our second line of defense. And all of our outlooks are data-driven, resulting in the strong performance and outcomes that we've been able to achieve. Now, when looking at some of the specific numbers and trends that we're observing today, we've seen a material improvement in performance since we started tightening credit in mid-2022. When looking at recent vintages and their loss rates at comparable points in time to our Q3, 2022 vintage, we've observed the following

[Operator:]

Our next question comes from Mark Devries of Deutsche Bank. Your line is open.

[Mark Devries:]

Yes, thanks for taking the question. I was curious whether just kind of given where you are now with the equity capital levels. Whether you feel you have enough sources to support future growth or do you potentially see yourself having to raise additional outside equity?

[Anthony Noto:]

Thanks for the question. We had significant excess capital prior to the transactions that occurred in the quarter. Our risk-based capital level was over 15%. It's now over 17%, well, well, well above our regulatory requirement. And given our outlook on lending, there's no reason for us to change our stance on that business. We have -- we went into 2024 with a view that our growth would be driven by the combined impact of Tech Platform and Financial Services business. Those businesses are now big enough in terms of total scale and profitable enough that we could put our resources behind them, still grow as we did this quarter over 26% year-over-year, while the lending business was essentially flat year-over-year. So our decision to make that transition in 2024 wasn't driven by capital. We had excess capital and could grow it much faster. We have even more excess capital now, but our stance hasn't changed because that wasn't the reason for keeping it relatively conservative. We feel great about the trends in Tech Platforms and Financial Services. I think it's quite remarkable the growth rate that we're achieving there and the level of -- the level of profitability. If you had asked me six years ago could we deliver in the first quarter of 2024, 25% revenue growth, 25% EBITDA margin, growth intangible book about 16% sequentially, in addition to record deposits and strong member growth of 44% with lending being flat, I would have said not a chance. So it's a real testament to diversification of our business and the optionality we have to drive growth and different environments. But we started in October talking about higher for longer. And while the market and different government officials led people to believe there'd be six rate cuts at one point, now we're down to one to two rate cuts. We think we took the appropriate stance and we're well positioned to play where the economy goes in 2024.

[Operator:]

Our next question comes from Dan Dolev of Mizuho. Please go ahead.

[Dan Dolev:]

Hey, guys, really strong results. Congrats. I have a question about the NIM, really stable NIM trends. Can you, Chris, comment on the future NIM trends, how you're seeing them? I would appreciate it. Thank you.

[Christopher Lapointe:]

Sure. Thanks, Dan. So, yes, we've been very successful in maintaining healthy net interest margins and continuing to expand them over time. In Q1, our net interest margin was 5.9%, which was up 43 basis points year-over-year. And more importantly, what we've seen is year-over-year net interest margin expansion in every single quarter throughout 2022 and 2023. Our ability to constantly expand NIM was a function of maintaining loan pricing betas that are above 100% in a rising rate environment, scaling our high-quality deposits and maintaining betas below 100% in a rising rate environment for our loans business, as well as capital structure optimization moves that provide us with a lower cost of funding. We do expect to maintain healthy margins for the foreseeable future, breaking it down between the asset side and the liability side. On the asset side of the equation, in a higher for a longer rate environment, we do expect to maintain strong yields north of 9%, which is consistent with what we've observed over the course of the last several quarters even in light of seeing a mix shift away from personal loans on the balance sheet. And then on the liability side, we expect to be able to maintain a healthy cost of funding even while maintaining a highly competitive APY on our SoFi Money product. That's a function of a few things. First, we recently issued the $862.5 million of convertible notes at a rate of 1.25%, which was used to displace much higher cost of funding. Second, we still have room to fund more of our balance sheet with lower cost deposits. We have $2.6 billion of higher-cost brokered CDs, $800 million of warehouse lines that are outstanding, and about $500 million of a corporate revolver outstanding. So net-net, we're really confident in being able to maintain net interest margins above 5% for the foreseeable future.

[Operator:]

Our next question comes from Kyle Peterson of Needham & Company. Your line is open.

[Kyle Peterson:]

Great. Thanks, guys. Good morning and appreciate you taking the question. I just wanted to dive a bit more into deposit growth and pricing. Obviously been really strong growth on that front, but if you could give a little more detail specifically on deposit betas and what the biggest drivers of growth will be, particularly if we are in a higher for longer environment, that would be great.

[Anthony Noto:]

Yes. Chris can comment on the betas. What I'd say is we raised our 2024 revenue outlook in terms of the range by more than we'd be in Q1. And that's because of the positive tailwinds we're seeing in both Tech Platform as well as Financial Services. We had record growth in deposits in Q1 of $3 billion. We've seen really strong debit spending trends. We're annualizing more than $8 billion now, so that will definitely continue to have a tailwind. We're uniquely positioned to be able to provide an attractive APY on the deposit business given the fact that we're an originator and we can match up what we're lending at versus what we're paying out from a depository standpoint. In addition to that, we've really seen strong trends from the underlying existing customers for the Tech Platform business, in addition to uptake of new products such as payment risk platform as well as the connectivity chatbot product. So we feel good about the largest components of our revenue going to the back half of the year. And then we have the additional contributions from businesses like SoFi Invest, as well as our Credit Card business and efforts that we have with Lantern and small and medium business lead generation. Those are all contributing smaller dollar amounts, but moving quite strongly in a direction of continued tailwind as well. And then from a beta perspective, we ended up exiting the quarter with $21.6 billion of deposits, that was up $3 billion quarter-over-quarter with more than 90% of the deposits coming from direct deposit members. We ended up launching the checking and savings product back in February of 2022 with an APY of 1%. And then at the end of Q1, our APY was 4.6%. So our overall beta over the course of time has been in the 65% to 70% range.

[Operator:]

Our next question comes from Reggie Smith of JP Morgan. Please go ahead.

[Reginald Smith:]

Hey, good morning. Thanks for taking the question. I wanted to kind of dig into the Financial Services segment a little bit. One of the disclosures you guys given in the press release is the FICO score of some of your new depositors. I guess my question is, what's your appetite for really growing the Credit Card business? And maybe talk about like what that looks like, ultimately growing that. And then my second question, still related to Financial Services is, at what point would, I guess, interest from credit card outweigh maybe some of the transfer pricing that you're getting from the lending segment? Is that an ultimate goal where that business is driven more by the actual lending of the credit card business if that makes sense? Thanks a lot.

[Anthony Noto:]

We're really excited about where we are with Credit Card. We've had a great journey in launching a credit card, learning quite a bit about our go-to-market strategy, how we're marketing and targeting potential new members with credit card in addition to understanding the underlying credit trends and what the right credit model is, in addition to other factors like fraud and risk overall. We brought in significant subject matter expertise in the Credit Card business that have actually built near prime cards in the past. Our product remains a prime product. It will continue to be a prime product. But we felt like coming out of 2023 that we had the learnings that allow us to be more aggressive in 2024 in that business as things unfold. So expect us to invest more in the business and see some good innovation in the back half of the year based on the learnings that we've had from the last three years. It's a great product, it has a high ROE product, but there is a J-curve that you have to go through. I think one of the things that may often be missed by the broader investment community is that now we have 8.1 million members, we can market our credit card to known members with known credit profiles, known spending capabilities, cash flow, capacity, etcetera. And so we're at that point now where we would really like to put more resources behind a strategy that we think is really working to our benefit. As it relates to the interest rate and in relationship to the rest of our funding costs, I'll let Chris answer that.

[Christopher Lapointe:]

Yes. So right now, this is a super high ROE business, and in terms of the mix shift towards the Lending Product, we still have significant low cost of funding through our deposit base. And as Anthony mentioned, we're going to start scaling this business more rapidly. We have started to see some good green shoots in terms of early-stage delinquencies and losses that are performing materially better than historical vintages. So we can start investing more heavily in this business.

[Operator:]

Our next question comes from Peter Christiansen of Citigroup. Your line is open.

[Peter Christiansen:]

Good morning. Thanks for the question. Great to be on the call. I'm curious about network fees in the Financial Services segment which were down quarter-over-quarter. I'm just -- I think the expectation there was that they would rise sequentially, just if you can give a little bit of color there. Thank you so much.

[Christopher Lapointe:]

Yes, absolutely. So, we are seeing really good spend behavior. We had about $1.9 billion of overall spend in the quarter. That was up from $1.5 billion in Q4 and $1.2 billion in Q3 of last year. We did benefit from a small one-time benefit from a partner on the network fee side. But what you can expect going forward is relatively linear growth with spend behavior over the course of 2024. So there was a one-timer in Q4 that made for a tough comp. But going forward you can think of linear growth for -- relative to spend.

[Operator:]

Our next question comes from Jeff Adelson of Morgan Stanley. The line is yours.

[Jeffrey Adelson:]

Hey, good morning, guys. Thank you for taking my question, Chris, maybe just to circle back on the improvement in the charge-off rate for personal loans. It seems like we saw a 15% sequential decline there sort of in line with the comments you've made about the 15% of credits coming out of the system in -- over the last quarter and this quarter. How long should we maybe expect that to persist? I know you're still talking about the charge-off rates normalizing towards your life of loan targets. Just kind of curious how that short-term dynamic might play out. And then, I guess, the comments on keeping your excess capital this year in light of the macro uncertainty. Are you hearing anything from your regulators on there about -- any sort of buffer you might need to keep? Have you tried to run an excess capital drawdown scenario from an internal stress test or have you ever tried to size that? Just kind of curious because it seems like the macro uncertainty is a bit at odds with what we're hearing from other lenders, which are pointing to a little bit more of a stable to improving macro. Just trying to understand why maybe you wouldn't lean in a little bit more on the personal loan side here.

[Christopher Lapointe:]

Yes, sure. I'll take some of the losses. Anthony can hit on some of the excess capital. On the losses front, we did see a decline in net charge-offs. But what's important is the net charge-off rate is a function of a number of factors. It's originations in the period, it's pay downs, it's a term of the loans that we're underwriting too. We did benefit in this period from the late-stage delinquency sale that we did, which helped drive the overall losses down sequentially. What I would guide you to is that 7% to 8% life of loan loss outlook, which we feel extremely confident in given some of the loss trends and delinquency trends that we're seeing in our more recent 2023 vintages. On the excess capital point --

[Anthony Noto:]

Yes. So what I'd say is we 100% have the option to drive the Lending business faster if we'd like. We do stress tests, as you would imagine, internally and externally for others across the entire ecosystem in which we operate. And starting the year at the risk-based capital that we had at 15%, even with stress test gave us ample opportunity to invest in that business at a rate that we wanted to. I would say our outlook for the Lending business is more reflective of uncertainty as opposed to whether or not there are great trends. As you see in our Lending business, it's actually performing quite well. We're driving great returns there, good steady credit performance as expected. It's not that we're expecting a huge drop off the cliff or huge deterioration. It's that we've gone from, in the last six months, the market anticipating six rate cuts. As you got into the sort of October time period to then, now you're down to one to two rate cuts. And prior to the six rate cuts, people were talking about higher for longer in October. And so there's been a complete swing of the interest rate environment. As you just saw in the banking industry, that creates liquidity issues for different banks. We're concerned about others not being able to manage the liquidity issues. Last year, at this time, we were experiencing first Republic going under that was not anticipated. I don't know what's around the next quarter. I do know that we have a great member base. We have excess capital well above. We started the year with that 17%. So we have the option to grow the business much faster if we choose to. And one of the things we haven't talked about is we're now selling a significant amount of loans. We sold $1.9 billion of loans in the quarter. That demand remains strong. And so to the extent that that demand continues to increase and remain strong and the environment remains sort of stable and more predictable. Could we be more aggressive in the lending business? 100%. We have the capital, we have the go-to-market strategy, we have the flexibility on the balance sheet, and we have the aptitude to be able to do it. We're just taking a very conservative view to make sure we don't go into an environment that we're completely unprepared for. Taking a conservative stance gives us the most optionality to do more, but not necessarily to have to do less.

[Christopher Lapointe:]

Yes, and the only other thing I would add to quantify some of those numbers in terms of our overall capacity is that, we have more than $20 billion in capacity to originate loans. And even though we're -- even if we were to originate at that level, we would remain well above all regulatory minimums. In terms of what's driving the overall $20 billion, first, we expect to generate $800 million to $1 billion of tangible book value in 2024, which translates to about $6.5 billion to $8 billion of incremental capacity. Second, loans are amortizing or paying down at the annual rate of $9.5 billion. Third, we have our previously announced $2 billion forward flow agreement, in addition to a number of on the run transactions that we're doing in the capital markets front. Demand is extremely strong. We did $1.9 billion of sales this past quarter. And then lastly, we have incremental headroom in our overall capital ratio. So having said that, we have sufficient capacity, but we are taking a conservative approach.

[Operator:]

Our next question comes from Mihir Bhatia of Bank of America. Your line is open.

[Mihir Bhatia:]

Hi, good morning, and thank you for taking my question. I wanted to switch to the Tech segment for a second. You had 20% account growth this quarter. I was wondering if you could comment on a couple of things there. One is, can you just comment on what’s driving that? Maybe talk about some of the key customers you may be added in the quarter. Also, just curious if you could provide some examples of the larger clients you have won since transitioning the sales strategy to focus on these large clients. And then just relatedly on the segment, margins improved nicely. And I think you've talked about this being a margin expansion year, but can you just comment on the margin trajectory from here? Thank you.

[Anthony Noto:]

Yes. In terms of Tech platform, we saw good consistent trends there. The Tech platform grew 21%, which was an acceleration in year-over-year growth compared to Q4 and Q3, and Q4 also accelerated. We expect the trends there to continue. We have a really sizable client base with growing underlying users in that client base in addition to driving additional product attachments to our existing clients. We're also seeing a greater contribution from new clients over the last nine months. As it relates to the broader macro-environment for Technology platform segment, the demand and interest in the -- in using our technology platform, our modern Gen-3 core, as well as our API-based payment platform [issuing] (ph) platform is as high as it's ever been. And we continue to sign-up new partners. I'd say those new partners fall into a couple of buckets. We are converting people from other competitive processing sites to Galileo. In addition to that, there's a lot of demand still from partners that haven't historically used an issuing platform or processing platform like Galileo that are transitioning to that platform from a sector standpoint. And then in the large funds institutions, the demand for modern cores and processing continues to be really robust. The timing on those deals is really driven by those end-customers. We haven't lost any of the RFPs. We continued to be down selected as big [indiscernible] institutions go from a large RFP to a few select partners. So we feel good about our chances there. We're not expecting to win 100% of those deals, but we feel like we can win our fair share. Those deals will take longer to not only sign-up, but to also implement. And so, the contribution from that is quarters, not months after they're announced, but we feel great about the current trends there and that's why the acceleration happened in the quarter. Q2 is a seasonally weaker quarter for the Technology platform business, but the year-over-year growth rate is what people should focus on because that eliminates the impact of seasonality and that accelerates.

[Operator:]

Our next question comes from Terry Ma of Barclays. Your line is open.

[Terry Ma:]

Hey, thanks. I just wanted to dig in a little bit more on the late-stage personnel loans,-- delinquency personnel loan sales. Can you maybe just talk about the structure and execution around that and whether or not you plan on selling more?

[Christopher Lapointe:]

Yes, absolutely. So in Q1, we ended-up selling $62.5 million of late-stage delinquent personal loans in the quarter. Typically, we do not sell delinquent loans until they're charged-off. But we were able to generate an opportunity where we're able to generate positive value relative to letting the loans charge-off and sell after the fact. So typically how it works at a high-level is, we would normally let a loan charge-off and then sell and release servicing to a debt settlement company or another investor for low double-digit pennies on the dollar. In this late-stage delinquency sales structure, we were able to retain servicing and portions of the recovery, which will result in nearly double the returns we would have otherwise been able to achieve.

[Operator:]

Thank you. Our final question comes from Jill Shea of UBS. Jill, please go-ahead.

[Jill Shea:]

Thanks, good morning. So I just wanted to touch on operating expenses. I'm just wondering if you could highlight any opportunities there in the largest efficiency gain areas? And then also how does continued brand awareness improvement impact your sales and marketing spend?

[Christopher Lapointe:]

Yes. So I'll hit on some of the operating expense lines. I'll let Anthony hit on the brand awareness. But overall, we saw meaningful improvements across all functional expense line items. Sales and marketing specifically was down about 900 basis-points year-over-year as a result of, obviously, improvements in overall brand awareness, continued and elevated cross-buy. We're close to 40% of all new products that were taken out in the period of work coming from existing members on the platform. And then we're just getting much more efficient at being able to market it. In terms of other efficiencies, we continue to see efficiencies in R&D as a result of the migration from being on-prem to the cloud in our Tech platform business, as well as other investments that we've made over the course of the years that are starting to play-out. On the operations side, we're seeing meaningful leverage as a result of some of the automation efforts that we've invested in over the course of the last 24 months, which, again, are starting to play-out as we're seeing better funnel conversion and improvement. And then in G&A, as you would expect, there's meaningful operating leverage in the system as we continue to scale. We made significant investments as we became a public company and got our bank charter and also invested heavily in risk and second and third lines of defense and as those investments were made over the course of the last 12 to 24 months at scale. I'll turn it over to Anthony to hit on the brand piece.

[Anthony Noto:]

Yes, on the brand awareness side, we're really pleased with just the continued improvement we have in unaided brand awareness. Our marketing team and our businesses have done a great job of putting together a very integrated multimedia strategy that leverages partnerships with big well-known brands that help us achieve unaided brand awareness to become a household brand name. That helps improve our overall performance marketing as well. The more people that know us, the more people that trust us, the better reaction we get from every offer we have in the marketplace are other ways that we connect with potential new members in addition to building their awareness of new products beyond their initial product. Our cross buying continues to remain really strong and we're seeing good financial service productivity leverage in our customer acquisition costs. So it's been a great year and 2024 is off to a great start as it relates to the impact of unaided brand awareness from things like our recent partnership with the NBA the Official Bank of the National Basketball Association. With that, let me add some concluding remarks. I want to thank everyone for joining us today. We're proud to kick-off 2024 with an exceptionally strong first quarter. Our 26% revenue growth driven by 54% growth in revenue from the combined tech platform and financial services, which now constitutes 42% of revenue, while no growth in lending gives us a very strong outlook for the year with 25% EBITDA margins in the quarter and for the full year. Record $3 billion of deposit growth and 16% growth in tangible book-value and 44% growth in members now totaling $8.1 million in total are a great testament to the success of our [Bold] (ph) strategy and ability to execute across an unprecedented set of financial conditions over the last six years. Although we live in an unpredictable world, our team at SoFi is resolved to serve the needs of more than 8 million members and clients, while sustaining the growth, profitability and increasing the shareholder value that we've done so far. We thank you for your interest and look-forward to talking to you next quarter.

[Maura Cyr:]

Good-bye.

[Operator:]

This concludes today's call. You may now disconnect.