Alerus Financial (NASDAQ:ALRS) Q2 2026 Earnings Call

0:00 Good morning and welcome to the Alerus Financial Corporation Earnings Conference Call. All participants are in a listen only mode. Today's call will reference slides that can be found on Alerus Investor Relations website. You can also view the presentation slides directly within the website platform. After today's presentation, there will be an opportunity to ask questions for analysts and institutional investors. To ask a question during the session, you will need to press 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please note this event is being recorded. This call may contain forward looking statements and the company's actual results may differ materially from those indicated in any forward looking statements.

0:54 Important factors that could cause actual results to differ materially from those indicated in the forward looking statements are listed in the earnings release and the company's SEC filings. I would now like to turn the conference over to Alerus Financial Corporation President and CEO, Katie O'Neil Lawrenson. Please go ahead.

1:16 Thank you. Good morning, everyone, and thank you for joining us. Joining me today on the call and in The Twin Cities is Forrest Wilson, Retirement Services Officer Al Villalon, Chief Financial Officer Jim Collins, Chief Banking and Revenue Officer and Karin Taylor, our Chief Operating Officer. We are pleased with our second quarter performance and believe the results further demonstrate the strength of the Alerus franchise and the benefits of the diversified business model we have purposely built over many years. Our second quarter results reflect disciplined execution across the organization with continued net interest margin expansion, solid performance from our fee based businesses, and a significant improvement in credit quality. We generated earnings per diluted share of $0.81 delivered a return on assets of 1.6% and a return on tangible common equity of nearly 20%, underscoring the earnings power of our company.

2:09 The most significant highlight was the favorable resolution of the largest non performing loan and significantly improved credit quality metrics. Criticized loans have decreased over 60% from a year ago, with non performing loans now less than 20 basis points. In addition, we maintained robust reserves at 1.2%, strong capital levels with TCE exceeding 9%, and continued to return capital to shareholders through buybacks and dividends. Importantly, this quarter highlights the advantages of a business model designed to generate balanced, sustainable growth with non interest income again representing more than 40% of total revenue. Our commercial banking, wealth advisory, and retirement and benefits services businesses continued to work together to create value for clients while producing recurring revenue to allow for consistent returns to shareholders.

2:57 While Al will provide additional detail on the quarterly financial results, we continue to measure our progress through the lens of long term value creation and strategic execution. We are seeing the benefits of our shift towards full relationship commercial and private banking. We grew commercial relationships by more than 20%, expanded our core deposit franchise, increased fee based revenues, and retirement and wealth assets reached record levels exceeding 50,000,000,000. We also continue to reduce commercial real estate concentrations and improve the overall quality of the balance sheet. Most importantly, we see evidence that the evolution of our strategy is working. Since the launch of our IPO, we are increasingly gaining awareness from stakeholders that we are much more than just a traditional bank and instead a highly diversified financial institution with multiple engines for capital accretion and client growth.

3:44 The performance demonstrates the durability of our earnings profile, the quality of our revenue streams and the advantages of a strategy designed to create long term value. The driver behind our performance is the talented team we have assembled across Alerus. We are fortunate to have hundreds of dedicated long tenured team members alongside exceptional new talent that continues to strengthen our organization. Together, they have played a critical role in the evolution of our company and execution of our strategic plan. During the quarter, we continued to invest in leadership, growth markets, client facing talent, and technology capabilities. We announced the appointment of Dan Schrader as our permanent chief credit officer. We expanded our commercial banking leadership and production talent in Arizona. We added new wealth management advisors in the Twin Cities and welcomed another class of interns.

4:30 Lastly, we landed an experienced technology leader from FIS to help accelerate the overhaul of our retirement platform. These additions are not isolated hires. They reflect our continued ability to attract and retain the best in the business professionals and support our belief that talent, leadership, and culture are among the most sustainable competitive advantages in our industry.

4:51 As we look ahead, our priorities remain unchanged. We continue to position Alerus as a leading commercial wealth bank and a national retirement plan provider. Our improved balance sheet profile, reduced CRE concentrations, strong capital position, and diversified earnings streams provide flexibility to pursue organic growth while maintaining our disciplined approach to risk management. Investments in talent and technology will continue to drive operational efficiency, automation, and scalability throughout our enterprise. Within our retirement division, we believe the technology transformation currently underway will further strengthen our position as a consolidator of choice for subscale operators across the industry. At the same time, our commercial and private banking teams continue to see attractive opportunities to deepen middle market relationships, grow treasury management, expose opportunities for wealth and retirement, and add HSA and other synergistic deposits.

5:42 We remain confident in our efforts and believe Alerus is uniquely positioned as very few organizations of our size operate with the same level of diversification, recurring revenue, and relationship driven growth. We believe those advantages will continue to differentiate Alerus' clients, future acquisition targets, and investors. Thank you again for your continued trust and support. And with that, I'll turn the call over to Al to review the quarter in more detail. Thanks, Katie. Let's start on page nine of our investor deck, which is posted on the Investor Relations section of our website. Before I begin, I want to emphasize three themes that define the quarter: durable earnings, significant credit improvement, and continued shareholder value creation. In the second quarter, we delivered another exceptionally strong quarter highlighted by strong profitability, improving balance sheet quality, stable core margin performance, and continued capital generation.

6:35 We generated adjusted diluted EPS of $0.80 and reported EPS of $0.81 while repurchasing $6,800,000 of common stock during the quarter. Profitability remains strong a return on average tangible common equity of 19.33%, and a return on average assets of 1.6%. Adjusted pre provision net revenue continued to improve. Also grew tangible book value per share of 3.2% from the prior quarter to $18.73 and improved tangible common equity to tangible assets to 9.05%. These are high quality results and we believe the quarter demonstrates the strength of the franchise. While earnings remain strong, the most important financial takeaway was balance sheet quality.

7:24 Reduced non performing assets by 68.3%, increased tangible book value per share, and returned meaningful capital to shareholders through dividend increases and share repurchases. We are proud of our over forty year history of returning capital to our shareholders, especially in the form of dividends. Let's turn to page 16 to talk about earning assets. Loans were stable during the quarter, as new production offset planned balance sheet actions and reductions in non performing loans. We continue to see healthy client activity and pipelines remain robust. The investment portfolio increased $5,900,000 or 0.8% from the prior quarter as pay downs and maturities were replaced with new investments. We continue to benefit from reinvesting pay downs at higher front book yields. Our balance sheet is positioned neutrally for interest rates due to strategic loan and investment portfolio repositioning.

8:15 In a 100 basis point increase or decrease scenario, we do not expect NII to be significantly impacted. While future rates remain uncertain, we believe that the balance sheet is positioned appropriately across a range of rate scenarios. Turning to deposits on page 17. Total deposits decreased 156,000,000 or 3.6% from 03/31/2026. Decrease was primarily driven by seasonal outflows of public deposit or funds. Despite the seasonal outflows, our loan to deposit ratio was 96.2. Deposit costs remained stable and the mix of relationship based deposits remains a key strength of the franchise. Synergistic deposits now represent 22.6% of total deposits and continue to provide a meaningful funding advantage.

9:04 Those synergistic deposits grew 3.3% over the prior year, primarily from low cost HSA deposits. Their continued contribution reinforces the strategic value of our integrated banking, wealth, retirement and benefits services model. Our synergistic deposit franchise remains one of the strongest competitive differentiators in our business model and continues to provide a funding advantage that is difficult for many peers to replicate. This matters in the current environment where deposit quality, stability and cost discipline remain top priorities. Turning to page 18, net interest income increased 6.2% to $47,700,000 and reported net interest margin increased three nine seven percent. Core margin remained stable from the prior quarter, which we view as a strong outcome given the current operating environment.

9:52 Reported results benefit from purchase accounting accretion and the resolution of a non performing loan. But overall, we continue to feel good about the positioning of the balance sheet and our margin outlook. Turning to page 19, adjusted non interest income increased to $32,300,000 up 4.6% from the prior quarter and up 8.6% from the second quarter of last year. Adjusted banking fees and other income increased 16.3% linked quarter, primarily driven by higher swap fee income and mutual fund investment gains related to deferred compensation plan assets, partially offset by lower mortgage banking revenue. Retirement and benefits service revenue was essentially stable, while wealth revenue increased 6.5% due to higher asset based fees tied to equity markets and an increase in transaction based fees.

10:41 These businesses continue to demonstrate the strategic value of the Alerus model by generating stable, recurring fee income and attracting low cost relationship deposits and diversifying earnings. That diversification continues to lower dependence on spread income and remains a meaningful differentiator for our company. On page 20, banking services non interest income increased $1,700,000 or 27.2% from the first quarter. Other income increased meaningfully, primarily due to higher swap fee income, totaled 7 and $38,000 in the quarter. As we noted before, swap fee revenue can be variable based on client timing and activity. Mortgage revenue decreased $300,000 or 9.6% from the first quarter, primarily driven by lower gain on sale margins from product mix changes and increased competition.

11:32 Turning to page 21, retirement and benefits services continues to be one of Alerus' most significant differentiators. It generates recurring fee income, low cost deposits, and long term client relationships, while supporting more stable performance across economic cycles. During the quarter, market appreciation supported high retirement assets and continued growth in our HSA deposit

11:52 base, which remains an attractive source of funding. On page 22, our wealth business continues to produce strong results while supporting broader client relationships across the organization. Wealth contributes meaningful recurring fee income and relationship based deposits while helping diversify earnings beyond traditional spread revenue. Alerus' wealth business is differentiated with nearly 90% of the revenue coming from advisory services.

12:19 Turning to page 23, adjusted non interest expense increased $2,400,000 or 4.8% compared to the first quarter. The increase was primarily driven by compensation and benefits, including annual merit increases, talent additions, and deferred compensation plan liabilities tied to market gains. Other expense increased due to higher other real estate owned balances and related holding costs, as well as higher corporate insurance costs. Business services, software and technology expense declined due to lower core processing expenses and lower IT hardware expense. We continue to manage expenses carefully while investing in growth areas that support long term scalability. Turning to page 24, asset quality is one of the strongest parts of the quarter. Credit quality improved significantly during the quarter. Non performing assets declined over 68%, criticized loans declined meaningfully, and charge offs were substantially lower than the first quarter.

13:13 Overall, we made significant progress improving balance sheet quality and reducing risk.

13:20 On page 25, capital and liquidity remained strong. Tangible book value per share increased to $18.73 and tangible common equity to tangible assets improved to 9.05%. CET1 increased to 10.81% and total risk based capital remained comfortably above regulatory requirements. Total liquidity was approximately $2,600,000,000 at the end of June thirtieth, or approximately $1,500,000,000 excluding brokered CD capacity. During the quarter, we repurchased $6,800,000 of common stock at an average price of $27.10 per share, reducing common shares outstanding by 250,000 shares at the end of the quarter. We also increased the quarterly dividend by 4.76% to $0.22 per share. Through the first six months of twenty twenty six, we returned $23,600,000 to shareholders through dividends and repurchases.

14:10 We are pleased to simultaneously increase tangible book value, repurchase shares, increase the dividend and strengthen regulatory capital ratios during the quarter. The increase in tangible book value per share combined with share repurchase and dividend growth demonstrates our continued focus on disciplined shareholder value creation. Our capital allocation priorities remain consistent, support organic growth, return capital opportunistically when it creates value, and maintain flexibility for strategic opportunities. Turning to page 26, our 2026 guidance framework has improved and reflects continued disciplined growth, stable core margin trends and positive operating leverage. As we enter the second half of the year, remain encouraged by our performance in the first six months and believe Alerus is well positioned to achieve our full year objectives.

14:57 We continue to expect mid single digit loan growth and low single digit deposit growth. We now expect full year reported net interest margin of approximately 3.7% to 3.8%.

15:08 Our confidence in that outlook is supported by stable core margin trends, favorable loan and investment repricing, and the overall positioning of the balance sheet. We expect revenues to be up mid single digits. Within that guide, we do anticipate lower mortgage originations with the market currently pricing in potential rate hikes.

15:26 Non interest expenses will increase low to mid single digits as we anticipate more strategic hirings. Lastly, we continue to expect full year ROA to be above 1.25%. In summary, the second quarter reinforced what makes Alerus unique. We generate strong returns, credit quality improved, we grew tangible book value, strengthened capital and leveraged a diversified business model that continues to differentiate us from many of our peers. We entered the second half of twenty twenty six with strong momentum, strong capital and confidence in our ability to continue creating long term value for shareholders. With that, let's go to Q and A.

16:08 Thank you. We will now begin our Q and A session. One moment while we compile the Q and A roster.

16:19 And the first question is coming from the line of Jeff Rulis of D. A. Davidson. Please go ahead. Thanks. Appreciate it. Al, I guess on the margin, the full year guide, I guess, would reflect or imply a pullback of reported in the $3.60 range. Do you have the sorry, hopping at loan yields a little bit, $6.24. Do you have that ex recovery for the quarter?

16:54 And as well as do you have the spot loan yields at quarter end?

17:03 Jeff, So can you just help me understand the question a little bit further? Our guidance has the recovery. It's the full year guide with the recovery already in there. Right. And I talked then to loan yields. Sorry for the transition. Well, one, was just I guess, the first question is implying that the reported $3.60 range in the back half of the year is would get you in that midpoint of the range for the year. Is that fair?

17:34 If I'm understanding the question correctly, yes. I mean, we're looking I mean, core margins have remained stable at the end of June. We're in the mid threes right now. That's helpful. Gotcha. Maybe switch gears, Al, on the

17:53 expected accretion in the second half of this year and '27, if you have that. Yes, I have that. The expected accretion is gonna decrease to roughly a couple $100,000 in each quarter. So last quarter we had, that's anticipated pay downs. This quarter we had over $3,000,000 of total accretion, but on contractual basis, we're expecting around $1,900,000 for 3Q.

18:24 Okay. Appreciate it. Well, you've got enough guide there that we can get back into a couple of those. Maybe on the switching gears to the just the loan pace, given, I guess, the full year, we'd assume that net growth really gained some steam ahead and maybe that the assumptions behind that, do you expect sort of payoffs to slow and begin to show a little bit more net growth in second half?

18:59 Yeah, I would say this is Jim Collins. The pipeline right now is the largest and most robust since I've been here in four years. Like we discussed in the first quarter, the growth would really happen in the back half of this year. We worked really hard the last eight months with credit and the line working through some credit issues, kind of cleaning up the portfolio and really building that C and I pipeline. Second quarter we put on 30 full mid market C and I relationships.

19:36 One of those was a regional nonprofit that is bringing 40 accounts with an average

19:44 collected balance of about $30,000,000 Once all those deposits flow in, which hasn't happened yet, about half of those have come in. Know, just this week we approved a loan package of $28,000,000 for a new client and that client will walk in with $30,000,000 in deposits. So just a couple examples of what we are doing. So the strategy is working. We're staying the course.

20:11 We're working on full C and I relationships. We brought in a team that is focused on C and I relationships. They're a little harder. It's a longer lead time for C and I. But as you'll see, we are bringing down the CRE, growing C and I. That was the plan. That's the strategy. It is working. But I will tell you that that was the plan, and we will have more growth in the back half of this year. Thanks, Jim. And just one follow on is just the, I guess, earning asset balance.

20:44 Do we expect that to match really loan growth? I thought I heard some expects to reinvest in the securities portfolio. But the I guess the growth of the earning asset base, do we think that's going to match the loan growth pace for the second half? Thanks. Yes, we do believe that. This is Al. Okay. Thanks, Al. Thank you. One moment for the next question.

21:13 The next question is coming from the line of Brendan Nossela of Hovde Group. Please go ahead. Hey, good morning, everybody. Hope you're doing well. Maybe to start off here on kind of capital and M and A. Stock as a currency again, capital is a lot stronger than it had been a year ago. Can you just update us on your appetite for whole bank M and A at this point and perhaps walk through what would be of interest in terms of size, geography, business characteristics, anything like that? Sure, I'll take that. As we have talked about, the capital priorities remain the same. We are very focused on organic growth, client selection, reinvesting in ourselves in terms of talent, technology and capabilities that really strengthen our franchise for the long term.

22:05 Capital commitments are returning to shareholders, been very clearly demonstrated over many decades of this franchise.

22:13 But strategic acquisitions are also a very enterprise strength of ours and we remain committed to pursuing those that fit our culture, enhance our capabilities and meet our return thresholds. And so when we look strategically for acquisitions, those are the three buckets. And again, retirement, we're agnostic to location because it's a national business. And we believe we are viewed as a consolidator of choice for those subscale operators. From a banking franchise standpoint,

22:47 we look for, again, middle of the country is kind of our geographic focus. From a size standpoint, we're more so looking at the client base and what it can bring to us in terms of enhancing our franchise. Okay, thanks for the thoughts there, Katie. Maybe turning back to the outlook. This is on a little bit more top level. So you're adding 15 basis points to the full year margin outlook. You maintain the other components of revenue, including loan growth and fee income, but you're keeping the same revenue outlook. So help us understand why the margin outlook is better, but the revenue outlook is unchanged.

23:27 Yeah, that's pretty simple, Brendan. Basically, we're forecasting lower originations from our mortgage business, given there's a higher probability of a rate hike coming in September, we are seeing a slowdown in our pipelines right now. So that's kind of the offset that we're anticipating for the back half of the year. Hopefully it'll be better than that. But right now we're just trying to be, given the market prediction with more rate hikes in September, we're just wanting to give more cautious guidance on that. Okay, all right, thanks Al. No problem. Thank you. The next question is coming from the line of Damon DelMonte of KBW.

24:13 Please go ahead. Hey, everyone. Hope you're all doing well and thanks for taking my questions. I just had a question on the pay downs that occurred this quarter. How much of that was just normal CRE pay downs like we're seeing across the industry? And how much of it was sort of like Alerus specific targeted, where you're looking to maybe exit some credits that you weren't comfortable with? So what I can tell you right now, we had a total pay downs, Damon, of overall the total purchase accounting accretion was about $3,800,000 And 2,100,000 of it was base. The regular payoffs, the accelerated payoffs of 1,800,000 I would say, which is a broad mix. Okay.

25:02 Then, like a little bit more specifically, are you guys, kind of going through the portfolio and exiting certain credits that maybe aren't meeting your standards today versus when they were originated? Did that also contribute to the pay downs in the quarter? Yeah, Damon, this is Karin. It did. As Jim mentioned, our teams in credit and banking have worked very hard to identify credits that either had deteriorated or just weren't core to our business going forward. And we feel really good about the progress those teams have made. That will be a standard culture of ours going forward for the portfolio. Got it, okay. And then the loan guidance for mid single digit, mean, pretty much flat for the first half of the year. So that would kind of imply close to 10% linked quarter annualized for each of the next two quarters.

25:55 Is that a reasonable way to look at it? Or do you think that it's maybe a little less than the third quarter and then a really strong finish to year end? Yeah, I think that's a way to look at it. We have a pretty good solid pipeline, but we'll have a good solid push at the end of the third quarter, and we should have a good push into fourth quarter. Got it. Okay. And then I guess just lastly on the provision outlook, Al, any guidance on kind of what you think a normalized provision level would be? I don't want to step on Karin's toes, I'll let you take that one. The provision is going to be driven by loan growth at this point. And I think you know the level that we're at now is probably reasonably where we're going to be.

26:47 Got it, okay great. That's all that I had. Thank you. Thanks Damon. Thank you. One moment for the next question. Our next question is coming from the line of Nathan Race of Piper Sandler. Please go ahead. Hi, everyone. Good morning. Thanks for taking the questions. While Karen has the microphone, curious how you're thinking about kind of the normalized charge off trajectory for Alerus going forward. Obviously, some meaningful credit cleanup occurred in the quarter. So, you know, just curious, you know, how you are looking at kind of, you know, what loss content could look like just given all the enhancements across the franchise over the last several years and particularly just given the cleanup here in 2Q? Sure. You know, certainly the back half of this year, we'll see reduced levels.

27:38 You know, I think back to our long history, probably twenty five years plus, our average charge off rate was in that twenty five to twenty seven basis points range. And I think ultimately, that's where we're gonna end up going into the future. Okay, great. And then just going back to the margin, Al, just hoping to unpack some of the moving pieces on the right side of the balance sheet that you expect in the back half of the year. It looked like borrowings were up on both an average and a period basis in the quarter. Just curious what you guys are seeing in terms of kind of the core deposit gathering pipeline to fund that growth? Or do you anticipate kind of on wholesale funding, which maybe kind of aligns with kind of your margin guide of kind of in the mid-350s for the back half of the year, which is kind of consistent with what we saw here in 2Q when you strip out the recoveries and accretion.

28:30 So I just want to make sure I'm thinking about those moving pieces properly. Yep. Thanks for that question, Nate. I'll take the first part, I'll Jim can comment on the pipelines. In terms of what we're seeing in back half of the year, we are anticipating a little bit more rising cost in our deposit costs given the rate hikes. We're hoping to lag at some, but we know that deposit competition is pretty intense right now. With that being said too, we did refinance our sub debt recently too, which put a little bit more pressure on our funding costs, but we do not anticipate too much use of wholesale funding to fund our loan growth here, because we do believe that our deposits, we should have deposit growth to offset it, but we have plenty of liquidity to fund that growth if we need to tap into it. Yeah, and getting to the deposit pipeline, as I said, the full pipeline is pretty robust. That does still include the deposit pipeline, so that still goes to the forecast of deposit growth in the low single digits.

29:22 Our government nonprofit group is certainly trucking along really nicely on deposits. But again, those mid market clients carry some decent deposits to fund part of that loan growth as well. Okay, got it. And then maybe I can stick one last one in for Katie. You know, you guys have and Alerus have always been quite proactive investing in technology, of course, You know, with all the AI, you know, chatter out there these days, you know, I imagine that's going to create some incremental opportunities going forward. So just curious kind of where you're seeing some early applications for AI and maybe what that can mean for, you know, some improvement in terms of just the optimization of some areas of the franchise going forward?

30:09 Yeah, great question. And that has been a huge focus of us and particularly one of our top priorities in 2026. We are making investments and we're making them in some very targeted areas where we have a really long term high conviction future returns, particularly as we've discussed in modernizing the retirement platform. And so, as I mentioned in my opening remarks, the technology is great, but it's all about the talent leading the technology. And so a big win for us to land one of the professionals from FIS who will be instrumental in that modernization of retirement platform, which we think is one of the areas that has the most opportunity in terms of AI automation, scalability, and all of which we believe results in improving margins and improving scalability in every one of our divisions.

31:07 So those investments are ongoing and we are running pretty fast and hard and I'm really pleased with the success that I'm seeing the teams have early on. Okay, that's really helpful. Thanks for that Katie. I'm sorry, if I could just sneak one more in on expenses. The other line was up about $900,000 quarter over quarter. Anything to call out there? Yeah. Part of that other line on expenses that we have a deferred comp plan where there's an increase in liabilities that gets booked as an expense, but also offsetting other revenues that also flows through too. Okay, got it. So there's an offsetting fees. Really helpful. I appreciate all the color. Thanks everyone. Thanks.

31:53 Thank you. One moment for the next question. Next question is coming from the line of Ken Kuhut of Raymond James. Please go ahead. Hi. Good morning, everybody. Thanks for taking my questions. Maybe starting out with asset quality. I'm just wondering if they do you expect any more charge offs related to that one C and I credit that drove the elevated charge offs in 1Q and a little bit more in 2Q? Or do you think you have a good handle on that one right now? Well, we could see some. I think they're gonna be at a much lower level. We do have continue to have about a million dollar reserve on that. So as I said earlier, the charge off level in the back half of the year is gonna be quite a bit lower.

32:41 Okay, great. And then regarding the residential property and apartment complex that was moved to OREO during the quarter, How long do you expect these assets to remain on the balance sheet? And then what are the associated costs with managing these properties in the meantime? I believe you called that out in the press release regarding the increase in other expenses, but any color there would be great. Thank you. Sure. The residential property we expect to resolve by the end of the year. And some of the holding costs associated with that were just some minor improvements that needed to be made, so I don't expect that to be ongoing. The apartment building is actually in receivership, so there are costs related to the receiver with that building, and that one will more likely be resolved in the first half of twenty seven.

33:34 All right, great. Thanks for taking my questions. Thanks, Ken. Thank you. This concludes today's Q and A session. I would now like to turn the call back over to Katie for closing remarks. Thank you. Thank you to our shareholders, our analysts, our Board of Directors for your ongoing confidence and support. Most importantly, thank you to all of our team members across Alerus. The results that we discussed today are direct reflection of their commitment to our clients, our strategy and to one another. And while we are proud of our performance, we also recognize success is never final. We remain committed to balancing strong financial performance today with thoughtful investments in talent, technology and growth opportunities that will strengthen Alerus for the future. That discipline has helped us to build a more diversified resilient company and we believe positions us well continue creating long term value for our shareholders.

34:23 Thank you again for joining us today. This now concludes today's presentation. Thank you so much for joining and you may now disconnect.