Broadmark Realty Capital Inc.

Good afternoon. Thank you for joining us today for Broadmark Realty Capital's fourth quarter 2019 earnings conference call.

In addition to the press release distributed this afternoon, we have filed a supplemental package with additional detail on our results which is available in the Investor section on our website at www.broadmark.com. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements.

Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. A number of factors could cause actual results to differ materially from those anticipated.

Forward-looking statements are based on current expectations, assumptions, and beliefs, as well as information available to us at this time and speak only as of the date they are made and management undertakes no obligation to update publicly any of them in light of new information or future events. During this call, we will discuss certain non-GAAP financial measures.

More information about these non-GAAP financial measures and reconciliations the comparable GAAP financial measures is contained in our earnings release and filings with the SEC. This conference call is hosted by Broadmark's Chief Executive Officer, Jeff Pyatt and Chief Financial Officer, David Schneider.

Management will make some prepared comments after which we'll open up the call to your questions. Now, I'll turn the call over to Jeff.

Thank you, Steve and welcome to our fourth quarter and full year 2019 earnings call. Our first earnings call since Broadmark went public in November.

This afternoon I'll begin with a brief overview of our company and strategy. I will then outline certain key operating metrics, provide a summary of market conditions and discuss our view on growth for Broadmark as we look ahead.

And I'll turn the call over to David to provide additional detail on our financial results and performance, loan portfolio, and balance sheet. When David is finished, we'll open up the call for your questions.

Let me begin by acknowledging the turbulence we are seeing in the markets and the unfortunate impact it is having throughout so many of our daily lives. That said our team at Broadmark remains focused and committed to serving our customers and working through these challenges.

The great news is that we have a fortress balance sheet with zero debt and we have built our pipeline of loans to its highest level in the past 10 years. With that backdrop, let me thank our investors for the tremendous support that they've given us throughout our transition and welcome our new shareholders.

Since we founded Broadmark in 2010, even as we have grown our platform considerably, we've committed ourselves to be an exceptional stewards of capital. And we believe that as a public company we are better positioned than ever to grow our platform and drive shareholder value in the coming years.

We started Broadmark nearly 10 years ago when we recognized that significant unmet demand existed for short-term construction financing. This opportunity resulted from certain structural changes in the lending market.

One, the community banks that had historically provided these loans had meaningfully decreased in number over the past decade due to consolidation. And second, the regulatory environment in the wake of the financial crisis made it prohibitive for most banks to engage in construction lending activities.

Broadmark filled this void, providing attractive flexible capital to support the growth of these active builders, we're building to meet the massive undersupply of residential housing we see in the U.S. today.

Now, with the completion of our formation transactions in November 2019, Broadmark is the only internally managed commercial mortgage REIT focused primarily on short-term real estate-backed senior loans. These short-term financing loans range in size from $500,000 to $30 million or more and our typical borrowers are local private builders who use this capital to fund residential housing construction, lot preparation, land acquisition, or renovation of residential and commercial properties.

The loans that we originated are short-term fixed rate and are secured by first liens. All are underwritten with conservative loan-to-value ratios, which at the time of origination, are always at or below 65% and are backed by personal guarantees.

This means that each of our borrowers has meaningful equity in their loans. Therefore, if there is a problem, they have a strong incentive to fix it first.

This helps to further reduce our risk for losses. One of Broadmark's unique competitive advantages besides our internal management structure and completely unlevered balance sheet is that we provide borrowers with significantly faster funding than banks can as few as five days from receipt of application to wiring out the funds compared to the 30 to 120 days that it typically takes a bank to approve and fund a loan.

Further, we provide certainty of execution for our borrowers and flexibility around timing which means we can command premium pricing. As a result of these competitive advantages, we have originated over $2.1 billion of loans since 2010 with minimal losses, paid attractive monthly distributions to our investors, and significantly grown both the size and geographic scope of our lending platform.

Furthermore, as you can see on slide three of our earnings presentation, our portfolio of loans is concentrated in the residential sector. We are certainly excited to be able to say that we see plenty of opportunities for future growth within our existing base of customers.

Approximately two-thirds of whom are repeat borrowers as well as growth in new markets. Turning to slide four, we currently operate in 14 states and the Pacific Northwest, Mountain West, Southeast and mid-Atlantic regions plus the District of Columbia.

We chose these states primarily for two reasons. First, they have favorable demographic trends with net population growth driven by better affordability, job growth, and lower taxes.

This leads to greater demand for housing, steady construction activity, and more demand for our loans. Second, we operate primarily in states with non-judicial foreclosure laws.

This means that if we need to foreclose on and then sell a property, we can do so through a quicker legal process. Looking ahead, we see opportunities to capture double-digit growth in all of our regions with more growth on a relative basis in the southeast and Mid-Atlantic regions where we have more recently expanded.

With regard to our loan performance, we've had extremely low default rates over the years. Additionally, we have a remarkably strong history of resolving defaults and men minimizing capital losses.

Of the $2.1 billion of loans we've originated, we've had only $1.1 million of principal losses. These losses exclude the more than $7 million earned on those loans during the life of the loans.

Our minimal loss history is the result of our diligent underwriting and local market leadership. Our regional Directors and their teams know their markets and their borrowers and every loan they underwrite is reviewed by a central loan review committee for approval.

After a loan is approved, our in-house servicing procedures tie construction draws to a specific timeline which minimizes risk. Prior to approval, we work with the borrower to put together construction budget and determined specific project milestones.

At each milestone, we conduct an in-person inspection of the site. We hire third-party inspectors to ensure that the work for which funds are being requested has been completed in a satisfactory manner.

We make sure any necessary city or county inspections are completed and we collect lien releases so that we know our borrowers are current on paying their subcontractors. Only then do we disburse the funds and we are usually able to do all of this within two business days from the time of the draw request which keeps our borrowers projects moving along.

Again this is one of our main competitive advantages and the reason that we have so many repeat borrowers. Other construction lenders typically take several weeks to process draws.

We provide funding to an underserved market, we do so significantly faster than our competitors and with underwriting standards that have resulted in minimal losses over our nine plus year history. Now, let me outline some of the key performance metrics that are most important to understanding our business.

First is the interest income earned on our loans. All of our loans are held for investment and are underwritten with the intention of holding them to maturity.

The interest rates on our loans are generally between 12 and 13 percent. These are fixed rates on short-term loans, so in the current interest rate environment, it's worth emphasizing that we are not exposed to the same kind of interest rate risk as other lenders who originate floating rate debt.

Second, we also own origination fees on our loans. These are generally between 4% and 5% of the committed loan amount on an annualized basis.

If the loan is extended in cases where the loan is not in default and continues to satisfy our underwriting criteria, we will continue to collect extension fees with a similar annualized yield. Finally, an additional performance metric is the credit quality of our portfolio.

As I described earlier, we've had minimal losses over our nine year history, approximately 0.05% on the $2.1 billion of loans we have originated on our platform and we believe our underwriting standards will support our exceptional loan performance going forward. Since our formation transactions were completed in mid-November, we've been focused on executing our strategy and preparing for accelerated growth.

Certainly, our fourth quarter 2019 origination volumes reflected some of the natural seasonality inherent in our business. While we originate loans year round, we make more disbursements in the spring, summer, and fall when the weather is more favorable for construction.

More impactful, however, to our fourth quarter origination volumes were the restrictions placed on us for most of the quarter related to our formation transactions that required us to essentially pause our ability to raise capital, and in turn, originations for several months. We were also required to ensure we had additional liquidity to address any legacy investor redemptions in connection with the merger transaction.

As a result, when we started 2020, we needed to rebuild our pipeline which took longer than anticipated. While the month of January was most impacted, the good news is that in February and to-date in March, we've begun to see an uptick in lending as we head into the spring construction season.

Through March 11th, origination volumes included 17 new loans totaling $100.6 million with the potential to close on another $60 million prior to quarter end. While we won't typically provide mid-quarter updates in the future, we felt this color was important to provide given that we are now in the second week of March.

Additionally, in the first quarter 2020, we successfully launched our private REIT which will pay management fees to Broadmark. We are pleased to offer this additional vehicle to investors for whom a private fund better suits their investment objectives.

We believe this is a unique offering which will unlock an additional source of income for Broadmark. Now that the fund is active and raising capital, we expect to ramp at a radical pace throughout 2020 and over time work our way up to our target run rate of $20 million per month.

Finally, I'd like to briefly comment on the culture we've created here at Broadmark. As a newly public company, we know that environmental, social, and governance or ESG initiatives will be a metric by which we are measured.

From a governance perspective, being internally managed fully aligns management with our investors. We have also adopted many shareholder-friendly measures and have a diverse Board of Directors.

Additionally, over the past 10 years, we believe the very nature of our business which has increased access to construction lending and therefore access to housing for underserved markets has helped us drive healthier economic results in many of our core markets. Internally, we have a strong culture of volunteerism and charity, supporting our employee employees' diverse passions, we match their monetary donations and we contribute to charities in which our employees volunteer their time.

We will continue to look for ways to measure and communicate our progress on these important initiatives as we move ahead. Now, let me turn the call over to David to review our financial results in more detail.

Thanks Jeff and good afternoon everyone. As a reminder, our financial results for the fourth quarter and full year 2019 are presented on a pro forma basis and include the financials prior to November 15th of the four Broadmark lending funds that combine to form Broadmark Realty Capital.

Starting with our operating results, which are detailed on slide five of our earnings presentation, for the fourth quarter of 2019, we reported total revenue of $30.1 million and a net loss of $6.8 million. On a per share basis, this reflects the GAAP net loss of approximately $0.05 per common share.

Adjusting for the impact of transaction fees and other one-time items, our core earnings for the fourth quarter were $27.7 million or approximately $0.21 per common share. Interest income on our loans in the fourth quarter was $26.1 million and fee income was $4 million.

For the full year 2019, we reported total revenue of $131 million and net income of $75.2 million or $0.57 per common share. Adjusting for the impact of transaction fees and other one-time items, our core earnings for the full year 2019 were $113.3 million or $0.86 per common share.

Interest income on our loans for the full year 2019 was $95.4 million and fee income with $35.6 million. With regard to origination volumes which are presented on page six of the earnings presentation, in the fourth quarter, we originated nine loans with a total face value of $37.8 million.

For the full year 2019, originations were $479.7 million as compared to $644.7 million for the full year 2018. Clearly, originations were muted in the fourth quarter due to the timing of our formation transaction as our registration filing required that we stop accepting additional capital in our private funds which in addition to loan repayments is historically how we have funded new originations.

We also were required to retain excess cash for potential redemptions. We recognized that this is a slower pace than we originally anticipated.

With that being said, we expect to start to ramp up our origination volumes as we move through the first half of 2020 as we deploy the proceeds from the transaction. As Jeff mentioned, we have already originated 17 loans with a total face value of $100.6 million in the first quarter-to-date as we enter the busy spring construction season.

Further, we currently have a pipeline of opportunities that ranges from $250 million to $300 million. As these and additional loans close in the upcoming quarters, the current headwind is notwithstanding.

We will start to realize the full benefit to earnings from the deployment of this capital in the second half of the year. Now, turning to our balance sheet, as detailed on slide seven, in the earnings presentation, we have zero debt at this time.

At December 31st, 2019, we had $238.2 million of cash on our balance sheet which we believe positions as well as we work through our current pipeline. We expect to complete the deployment of our cash proceeds from the transaction in the second quarter of 2020.

While we have historically operated without debt and funded our unfunded commitments from payoffs our finance team spends a great amount of time watching the residential housing markets and analyzing our pipeline of loans and our unfunded commitments relative to anticipated payoffs. As a result, we may consider adding a working capital credit facility to help us manage cash demands as we grow our business.

And we believe this additional source of capital will enhance our liquidity and flexibility. Finally, let me comment on our dividend.

On December 9th, our Board of Directors declared a cash dividend of $0.12 per common share for the approximately six week period of November 15th to December 31st of 2019. For the month of January, February, and March of 2020, we declared dividend of $0.08 per common share or $0.24 for the quarter.

As we look ahead, our Board continues to evaluate and set a monthly dividend rate that incorporates assumptions regarding originations and the deployment of transaction proceeds as well as the ramp up of the fee income for our recently launched private REIT. Our goal is to continue to grow our business and therefore our dividend should grow over time toward our target level.

Now, I'd like to turn the call back to Jeff for a few closing comments.

Thanks David. We're thrilled to start this new chapter for Broadmark as a public company.

For nearly 10 years, we've run our business with prudent underwriting, zero leverage, while consistently paying out attractive dividends to our shareholders. We provide capital that is in steady demand and utilize a unique and proven approach to maximize performance in today's market are short-term fixed rate loans offer us protection from a volatile interest rate environment and we have a substantial cash balance to deploy into our healthy pipeline.

Longer term, we see many avenues for growth as we expand our platform, continue to support demand in our current markets, and begin to benefit from the fee income from our private fund. Finally, our formidable balance sheet with zero debt and the internal management structure provides for the best possible alignment of management and shareholder interests.

Taken together, we expect this strategy will allow us to grow our dividend over time and continue to create shareholder value. This completes our prepared remarks.

We will now open up the line for questions. Operator?

Hey. Good afternoon, Jeff and David.

Thanks for taking my questions. My first one here I appreciate the 1Q origination update, can you just clarify how much of that is funded and how much of that is currently earning interest?

Sure. Absolutely.

I believe the number that we quoted in our prepared remarks was about $100 million. I would say about 75% of that was funded between January and early February.

So, that would be earning interest and then as we mentioned we expect there's the potential for another $60 million before the end of March that we'll fund.

Okay, got it. That's helpful.

And then just from a higher level, the pipeline clearly seems strong and you seem pretty optimistic, but are you seeing any waning in demand from borrowers given all the uncertainty around the coronavirus and potential economic impacts there. Have there been any shifts in behavior or slowdown in new construction activity yet.

And maybe if you could just touch on Seattle specifically, February data points seem pretty positive there, but are you starting to see any weakness in that market given the severity of the outbreak?

Hi Tim. This is Jeff.

So far we haven't seen any downturn in volume as a result of the coronavirus or the volatility in the market. Since you asked about Seattle, specifically, there was a homebuilder up here -- a national homebuilder, so not one of our customers, who was excuse me, contemplating a big grand opening at a plant of theirs and opted to cancel that as most public things have been canceled in Seattle and instead just is reaching out to individuals who have expressed interest and they have said there's been very little downturn in interest.

All the data that we see and obviously Thursday is different from Wednesday which is different from Tuesday that there still remains strong demand. Mortgage rates being what they are, I think anyone who can buy a house is still trying to buy a house.

On the builder side, we have not seen a decrease in in interest for loans. And in fact, as we pointed out when we were on our roadshow, being unlevered with no debt on our balance sheet, we have always believed as one of our separating factors from our competition that we have heard of at least two of our more aggressive competitors this week who are pulling way back because their lines of credit have been restricted.

And so we've gotten referrals from them and so we really see this as an opportunity. And having said that, we're monitoring the situation closely.

That's helpful. I appreciate the comments there and I agree that being unlevered is a great asset right now.

Maybe just humor me though in a draconian scenario where maybe your pipeline dries up and houses down the market longer and people are less willing to attend open houses and buy homes. How are you positioned?

Would you do anything different in terms of how you handle extending loans and are charging higher interest in the case of default? And what resources do you have to potentially take over projects if defaults were to pick up?

Those are a lot of questions.

I'm sorry I packed a lot into one question there.

That's okay. Let me start at the end.

Assuming there are defaults and we have to take projects back, I'll remind you that because our maximum loan to value ratio is 65%, that our borrowers have some -- come into these projects with some real equity. And so the vast majority of them work hard when there is a -- when they have a hiccup to solve those problems, so that they don't lose their equity.

That said, guys get tired, they do whatever they do and they walk away. We have a stable of third-party contractors and other resources that we use whenever these kinds of things occur.

We're set up so that we can take a project over. We discussed foreclosures.

We have the ability to foreclose and get a project finished and get it sold. Again, I'm going to hammer on the fact that we don't have any debt.

We aren't going to have -- if a project goes into default, it's not going to be removed from our borrowing base like it would be if we were levered with another lender. And so we're not going to be forced to dispose of assets simply to get them out -- get our borrowing base back, get our lender happy, so we can we can dispose of them in an orderly fashion.

Your draconian comment, if our pipeline dries up, remember, we've got a little over $1 billion in loans out there among 14 states in the District of Columbia. And so for the market to get that bad, what I think happens is that banks have stopped lending, our competitors have had their lines of credit called in, so they are a quarter or a third of the size they are today.

And over Washington, Oregon, Texas, Colorado, Utah, Georgia, the Carolinas, Florida, Maryland, Virginia, I've forgotten a couple, we only have to deploy about $700,000 to $800,000 a year at our current size among all those states and all those cities and so builders still have to build. There are still going to be projects that have to get done.

And so again this has historically been a countercyclical business. We've done really well in an up cycle.

I'd just assume not have to test it in a down market because none of us wants one of those, but we are set up no debt, good pipeline, good penetration that I think we're going to weather any downturn that's either imminent or coming someday well.

Okay, got it. That's helpful.

And then I'll ask one more and hop back in the queue. Seeing as you gave 1Q origination activity updates, would you mind doing the same for the private REIT?

Can you just give us an update of how much capital is been raised so far? And what appetite for investors looks like if you're seeing any hesitation or fall in the pipeline there from the uncertainty?

Yes, sure Tim, we can speak a little bit about that. We mentioned in our prepared comments, we're working towards the run rate of $20 million.

To-date, March was our kind of kickoff month. We did take in funds of about $10 million from the private REIT for March.

We think there's an opportunity to continue to grow that. Obviously, the last -- we'll call it 72 hours, probably gave everyone a little bit scared, but we're still confident that there's plenty of appetite and interest from both legacy investors and new investors who happen to prefer the private fund as opposed to investing in the public companies.

So, we feel confident that we'll still be able to ramp that up. And it's just one more of our tools.

I think that's one of the messages we're trying to send out there. We've got plenty of tools to manage our capital and we're going to continue to explore that to make sure we're as efficient as possible and just be as accretive as we can be and pay a good dividend to our shareholders.

Okay, got it. Thanks again for taking my questions.

Thanks Tim.

Hi. Good afternoon.

Good afternoon Stephen.

Hey guys. A couple of different topics I want to hit on, but I want to follow-up on one of Tim's questions there on the private REIT, but can you maybe give us a little color in the type of investor you typically see that would prefer the private REIT over the public, is it risk-averse investors that don't like mark-to-market losses, so this volatility makes those funds more attractive.

What kind of investor you're targeting what the private REIT?

Yes. So, we typically see high net-worth customers come very well may be hesitant about the variability of owning shares in the public company.

But it's generally to-date the most demand is in legacy investors that really like the Broadmark theme and like the structure of the legacy private funding. So, that's where the demand is primarily come from.

There's also -- pardon me, David, there's not an insignificant number of legacy investors Stephen who had to redeem out before they -- before the public transaction because the bucket of funds that had invested with us were specifically targeted toward private funds. And so that's an area where we see a lot of growth opportunity.

Great. Moving to the pipeline and following up on the questioning there.

But Jeff you -- in the last few weeks as you've looked at real-time data that that's constantly evolving as we've seen the last few days, but if you guys changed your underwriting guidelines or pricing or how have you reacted on the underwriting side to this current environment?

Well, that's always a tough question because we don't -- there's -- and I'm not saying that you're implying this, but there is an implication there that that we are underwriting more carefully than we have in the past and I will tell you we aren't. We are underwriting as we have always underwritten, paying attention to loan-to-value to markets to asset class, the budgets, to the borrowers' resume, the guarantors' financial strength.

We certainly will -- if somebody brought us a restaurant project today, I would probably look at that a little differently than I would another apartment project. So, we look at all those things.

But we've had consistent underwriting that we've had a five hundredths of a percent loss ratio over 10 years. And yes that's been in a market that we've had a nice tailwind.

But that said, it's all the same fundamentals. And so we will continue to do that pricing-wise.

We -- when things get tough, we don't lower our price -- when there's more competition, we don't lower our prices as if we see a greater pipeline than we have the ability to fund, we're not going to gouge our customers. But two-thirds of them are repeat borrowers.

We'd like them to know exactly what they're going to get. So, I think that is the best approach.

Great. I appreciate the color there.

And there's two more questions. One is just can you talk about duration risk as we think about these projects or talk about your typical projects, how many workers going to take in an average duration 11 months.

If we see issues with local transportation or public transportation, how do we think about the duration risk around your current portfolio?

That's something that we're contemplating. And we haven't heard of any of our projects being shut down for -- I assume we're talking about the COVID-19.

We haven't heard of any projects been shut down. It would certainly -- it could certainly happen.

We're planning for what if that happened at our office. So, we all should be planning for that.

We have the ability to extend loans and we do that on a regular basis. And the construction business by its very nature is -- has problems right.

The city slow in getting you an inspection or this happens or all the things that happen in the construction trade. And so we work with our borrowers to maintain flexibility.

If they're working to solve problems, we work with them to solve problems. Could it make a loan go out longer?

Yes. Would that then eat into their into their profits?

Yes, because we're going to get paid back everything we're owed. And if they're having to make extra interest payments because a project goes three or six months longer, that's going to have an effect on them.

But I don't I don't see it going much beyond that.

Right. Thanks for the color on that Jeff.

And David my last question, can you talk to CECL or impacts around CECL that you've identified at this point, I know it doesn't impact until Q1 results?

Actually in under -- an emerging growth company where you actually are required to adopt until 2023. With that being said, we've already done our own analysis and generally, we don't expect much of an impact.

Given that the short-term nature of our loans -- if our loans are generally 12 months, we're already analyzing generally the lifelong credit losses on those loans on a quarterly basis. So, adopting CECL and looking lifetime is not going to have a significant impact.

If anything it could actually give us a potential small benefit because we've probably been more conservative historically on those loans.

Great. I know duration is a big input there and thanks for the clarification.

Thanks for taking my questions.

You're welcome.

Thanks Stephen.

Hey guys. Just a couple more follow ups here.

I know you made some comments around the dividend and I know ultimately it's a Board decision, but can you just maybe talk about the trajectory there given what you've put to work so far this quarter and the pipeline and your expectations for largely deploying that capital through the second quarter. When do you think that you'd be in a position to maybe see growth in the dividend and/or maybe a stronger dividend coverage?

Sure. Yes, I mean we can't get too much into the forward-looking guidance, but what we can say Tim is that we fully expect growth.

We think this story for 2020 for Broadmark is growth. That includes earnings which inherently then includes dividend.

So, I think in our prepared remarks, we talked a little bit about that the slowdown in Q4 which definitely impacted our ability to make loans in Q4 and even through January. Now, that we're up and running, the machine is back up and running and we're putting out good loans that are accretive to our shareholders.

It doesn't happen overnight where it immediately hits earnings the way our earnings work with interest income that will come as we grow the portfolio. Fee income under U.S.

GAAP accounting is deferred and advertised over the life of the loan. So, it will take a little bit of time to ramp up.

But we really are looking at what we foresee as an impressive second half to 2020 where we start to look for those target earnings and dividend levels.

I see. Okay.

Understood. And then even with the robust capital deployment so far, you still a lot of dry powder left and just wondering how you think about stock buybacks potentially here as a use of capital given and you're trading well south of tangible book at a near 15% current dividend yield?

Yes. So, I think that question is going to come up given where we're trading right now.

We haven't contemplated stock buybacks and frankly, what I can say is we've obviously been in a dark period. But one of the things I want to just point out is Jeff and I over the last 48 hours have had basically every employee that works at this company come to us and say when can we start buying the company stock because we know that we're trading well below book value and our company is going to grow and eventually reap the benefits.

So, we don't have a stock buyback program in place right now, it's not something that we're currently considering, but I will say there's hunger to buy our stock just from people that know how good this company is. So, I think that speak alone to us.

But we're always going to think about what's best for our shareholders at the end of the day. And if someday in the future a buyback program is what makes sense for us and that's in the best interests of our shareholders, then we would obviously consider it.

And Tim remember we -- so, we can't do a ATM, right, for a while. We have our private REIT which is access to capital and we've got loan payoffs and so we and we have a $300-ish million pipeline.

And so for us to do a stock buyback which then eliminates or reduces our ability to write new loans, I think from a -- as David said every decision we make is going to be in the best interest of all the shareholders. And I am a large shareholder, we're internally managed, so your and my interests are well aligned and I believe today that the best thing for us to do is to keep that dry powder and turn it into new loans so that we can keep growing this business and growing revenue.

I hear you. Yes, I just figured I'd ask given that ROEs are approaching that of that are similar to the loan originations, but completely hear you there.

It's an obvious question.

Thank you all for participating today. This is our first call and I hope you felt it when as well as we did.

We look forward to talking to you again in the next quarter. Thank you.