News About Overdraft Fees and Other Banking Notes

In this podcast, Motley Fool contributor Matt Frankel and host Deidre Woollard talk about:

• How new guidelines might change what you pay in overdraft charges.
• Why banks are socking away cash for credit score losses.
• The potential benefit for regional banks.

Motley Fool analyst Asit Sharma and host Mary Long take a medium dive into Paycom and talk about a product that may very well be too good for its personal good.

To catch full episodes of all The Motley Fool’s free podcasts, try our podcast middle. To get began investing, try our quick-start information to investing in shares. A full transcript follows the video.

This video was recorded on January 18, 2024.

Deidre Woollard: Paid overdraft charges. Good information forward. Motley Fool Money begins now. Welcome to Motley Fool Money, I’m Deidre Woollard right here with Motley Fool Analyst, Matt Frankel. Matt, how’s it going right this moment?

Matt Frankel: Pretty good. It’s been some time since I’ve executed considered one of these with you. I’m completely satisfied to be right here.

Deidre Woollard: Well, I at all times wish to faucet you if we will discuss banking and financials since you’re one of many individuals who research that. You get it in a manner that I do not assume I fairly do. We’re going to speak about some regional financial institution earnings. But earlier than we do, I wish to discuss one thing the Consumer Financial Protection Bureau introduced yesterday that I’m making an attempt to make sense of that’s round overdraft safety. It appears like what they are going after is these giant overdraft charges that no person likes. They say they’ll save folks about 3.5 billion. What is that this and, how a lot of an influence is it going to have on banks?

Matt Frankel: First of all, sure, I’m a financial institution investor, however I’m additionally a human being first, so I believe it is a good factor. Yes, banks become profitable off charges and this can assist folks. But you bought to understand that the common one who takes an overdraft are just like the financial institution’s most weak prospects, and the banks are actually taking cash from individuals who haven’t any cash. It’s one thing that is wanted to be mounted for some time now. But simply trying via the numbers, this can have an effect on banks for certain, banks make about $9 billion a yr on overdraft charges, and naturally, the banks are pushing again on this rule. They’re a enterprise, on the finish of the day, they usually’re arguing that that is going to make it tougher for banks to supply overdraft safety to prospects if they don’t seem to be allowed to cost for it. But however, the CFPB proposal clearly provides banks permission to recoup their prices, so they don’t seem to be going to lose cash by extending overdraft safety. They can cost an affordable rate of interest in the event that they wish to give an overdraft mortgage, or they’ll cost an affordable charge, which is $35, if I overdraft my checking account by $10, is that basically an affordable charge?

Deidre Woollard: No.

Matt Frankel: No, that is 350% curiosity and most overdrafts are paid again inside three days. This is one thing that wanted to be reformed for some time. Loads of banks make some huge cash off these, however it’s an earnings stream that I’ve to say I’m completely satisfied to take the hit on as a financial institution investor.

Deidre Woollard: Yeah, I’d agree with that. It’s attention-grabbing since you’ve bought the 2 pathways there the place they’ll both do the mortgage or they’ll do this cost. If they do the mortgage, it appears like then it type of capabilities as another conventional mortgage and will get topic to a complete bunch of laws that manner.

Matt Frankel: Yeah. They should disclose the rates of interest and issues to that impact. I discussed that banks make $9 billion on overdraft charges. That’s between 175 largest banks. That’s not that a lot. It appears like an enormous sum of money and it’s, however JPMorgan Chase might afford to soak up that and nonetheless be worthwhile. It’s not a large sum of money within the grand scheme of issues, this isn’t a large income middle for the banks. At the tip of the day, banks nonetheless make the majority of their cash on issues like charging curiosity on loans, funding banking charges, mortgage origination charges. This is just not a large charge earnings stream for many banks. It shall be a success, however it’s not going to decimate their quarterly earnings or something like that.

Deidre Woollard: Yeah. It’s only for the massive banks with, I believe, it is about over 10 billion, so it is 175 establishments complete.

Matt Frankel: Yeah. This is just not going to harm, your native banks can nonetheless cost just about no matter they need for overdrafts, underneath this proposal, they are going to should decrease their charges to compete. But yeah, this solely impacts banks which have over 10 billion in belongings and I imply, just about each financial institution that could be a family identify in America.

Deidre Woollard: Yeah. Well, let’s discuss somewhat bit about these regional banks as a result of final week we had the massive banks reporting. It appeared to me to be a combined bag. If the quarter earlier than was a really massive quarter for them, this one was somewhat totally different, however now we’re smaller and regional banks. What questions are you asking your self as you have a look at a few of these earnings coming in?

Matt Frankel: Like you mentioned, it is a combined bag so it is type of undoubtedly on a case-by-case foundation what I wish to see. Net charge-off charges are an enormous factor proper now. It’s trying like we will get the so-called gentle touchdown within the economic system. A recession can be horrible for banks. Recessions result in larger defaults, not solely that, however a lot decrease mortgage demand, so they don’t seem to be originating many new loans, and internet charge-off charges in the meanwhile aren’t uncontrolled. I’m certain we will discuss this somewhat bit extra later, however that is one massive factor I’m watching. Deposit bases, quite a lot of financial institution prospects, myself included, have moved quite a lot of their balances away from the massive banks and even the massive regional banks that do not pay very a lot on checking and financial savings accounts in favor of upper yield on-line banks, CDs, and banks are realizing somewhat too late that they should elevate their deposit yields to compete. Some banks have executed an important job of this. Capital One is one instance that is been very proactive with competing with the web banks with high-yield CDs and issues like that. But banks like Bank of America and Wells Fargo, not a lot.

One factor I’m watching is how a lot of the deposits are nonetheless flying out the door, and the reply is kind of a bit. Net curiosity margins are one other factor. One factor that individuals do not understand is, sure, larger rates of interest are good for financial institution loans within the sense that, now, as a substitute of a 5% common price on auto loans, you are getting a couple of 10% common price on new auto loans. But the loans on the financial institution’s steadiness sheets, for probably the most half, nearly all of them have been originated in pre-high rate of interest instances. Most of their loans aren’t high-yielding, however 100% of their deposits have gotten higher-yielding. The larger rates of interest are literally being extra of a detrimental on the financial institution by way of curiosity margins than quite a lot of buyers would count on. Finally, I’ll cease rambling after this. The FDIC’s particular assessments, talking of regional banks, are hitting the entire larger banks, together with quite a lot of the massive regional banks, like those we will discuss, due to these financial institution failures we had in 2023. Think of this as like when you’re HOA, if it has to exchange the pool, you would possibly get a particular evaluation that yr that helps them cowl the price of it. The FDIC needed to substitute lots of people’s cash with financial institution failures, so quite a lot of the banks are getting hit with particular assessments with a view to cowl it.

Deidre Woollard: Yeah, I’ve been watching that within the earnings and it is like a shorthand to see how massive the financial institution is relying on how a lot they needed to pay as a part of this particular evaluation.

Matt Frankel: Yeah, and a few of them are fairly excessive. [laughs]

Deidre Woollard: Some of them are very excessive, particularly JPMorgan. You talked about credit score provisions. I wish to discuss shortly about Discover Financial, which, not a financial institution but in addition not a financial institution, as a result of like AMEX, it takes on the loans itself, they usually added a billion to their credit score loss provisions. Like you mentioned, the banks are nonetheless rising these provisions and a lot of the internet losses up to now, that we have seen, they’re under pre-pandemic ranges, however they’re rising. Should we be nervous but? I’m on the level the place I’m like, a yr is up. I’m somewhat nervous.

Matt Frankel: Like I mentioned earlier than, it is type of on a case-by-case foundation. Some banks it appears to be progressing higher than others, and also you’re proper, the banks are usually rising their provisions, which suggests they’ve sufficient in reserves to cowl what they count on to lose after which somewhat bit extra. Wells Fargo, for instance, raised their provision by 34% yr over yr within the fourth quarter, fueled by bank cards and business actual property loans, shock. I do know we’ll discuss business actual property somewhat bit later. But when you have a look at the 2 massive regional banks that reported this week, US Bancorp and Truist Financial, one is considerably decrease than pre-pandemic charges. That can be US Bancorp, and their charge-off price is three foundation factors decrease than in comparable 2019. Remember, in 2019 the economic system was doing very properly, in order that’s a powerful pre-pandemic time. But however, Truist is about 10 foundation factors larger than it was in comparable 2019 instances, and never solely that, proper now their internet charge-off price is 0.5%. They’re anticipating that to rise to 0.65% in 2024. That can be considerably larger than pre-pandemic ranges. Like I mentioned, it is type of a combined bag. Truist is likely one of the few banks that truly provides ahead steering on that, so it is actually powerful to, know what administration’s considering with regards to internet charge-offs in quite a lot of circumstances. But yeah, it is making me take discover, and it is making me somewhat bit cautious and quite a lot of banks are projecting income to say no somewhat bit yr over yr in 2024, and that is an enormous cause earnings to say no.

Deidre Woollard: Well, you simply talked about US Bancorp. I used to be listening to their earnings name. One of the issues they talked about was the price of retaining buyer deposits, and that they are actually having to to go on the market and spend more cash than they used to. Is this one thing that is impacting quite a lot of the regional banks?

Matt Frankel: Absolutely. US Bank Corp talked about it. Truist really gave some actually nice figures on that. That curiosity margin fell by 27 foundation factors right here yearly. Here are the stats. This is what I used to be speaking about with, quite a lot of the loans on their steadiness sheet are nonetheless paying low yields from years in the past whereas all of their deposits are actually larger yielding. The yields on Truist incomes portfolio are up by 95 foundation factors right here yearly. Meaning that their common mortgage is paying 0.95% larger of an rate of interest than it was a yr in the past. The common value of its interest-bearing liabilities, which primarily means its deposit base, is up by 164 foundation factors right here yearly, so 1.64%. It’s not solely the deposits are at larger yields, the price of banks to, say challenge long-term debt, is quite a bit larger than it was. The value to borrow, that is what the federal funds price is all about. The Feds benchmark rates of interest are, the inter-bank lending charges, these are much more. Banks are paying much more on capital than they’re making on loans, however they’re nonetheless not paying as a lot as quite a lot of the higher-yielding choices like on-line CDs and issues like that. The value of retaining buyer deposits is a priority, and never solely is it a priority, sure, it is costing extra, however it’s not terribly efficient. If I’m their deposit foundation, sure, banks are retaining their deposits, however Truist misplaced a complete of $23 billion of deposits over the previous yr, 23 billion, and it is a regional financial institution, this is not one of many big ones, they usually’re a regional financial institution that operates in fairly engaging market environments within the Sun Belt area. Yes, they should pay extra to retain their deposits, however prospects are nonetheless seeking to maximize yield and you are not going to do this with branch-based banks for probably the most half.

Deidre Woollard: Truist is attention-grabbing as a result of they reported their earnings, they’d a loss, they usually’re forecasting a income drop of about 1-3% for the fiscal 2024.

Deidre Woollard: But in addition they talked about that regional benefit that you simply simply talked about. They’re within the Sun Belt space. I used to be fascinated about this as an general look. Last yr we had after the banking disaster, we had that flight to security to the massive banks. Then we had what you talked about proper now, the speed chasing. All of a sudden all people realized, if I put my cash over in a CD or in one of many on-line banks, possibly I can get a greater price. Now I’m unsure what the monetary story is, and Truist is that regional benefit, they see it as an enormous factor. I do not know. What do you assume?

Matt Frankel: I’d say sure, I’m in Truist nation. I do not know if there are Truist branches up the place you might be.

Deidre Woollard: Yeah.

Matt Frankel: I’m undoubtedly in Truist nation. If everybody is aware of they got here from BB and T and SunBelief, and if he did not know that, you recognize that now. SunBelief was an enormous financial institution in Florida. That’s the place I had my checking account once I lived down in Florida. It’s usually market environments, not all of their markets, however most of their markets have above common wage progress, above common job progress, optimistic internet migration, which has been an enormous pattern because the pandemic began into the Sun Belt area. Relatively reasonably priced housing prices, which may be very engaging. People might nonetheless afford a mortgage there. I believe it is a bonus, it is going to be extra of a protracted tailed benefit, nevertheless. I believe I might see it fueling progress higher than, versus a financial institution that is based mostly primarily in New York and New Jersey, the place you are seeing inhabitants outflows over time or a minimum of slower internet migration. I’m from New Jersey and most of my associates have gotten out of there. No offense to New Jersey. But I do see it as a bonus, however not a large enough differentiator that that’s the funding thesis all by itself.

Deidre Woollard: Well, with regional banks, we have additionally bought business actual property as an even bigger portion of issues, you and I can not get collectively with out speaking about actual property. I’m fairly certain that is in our contract. Let’s do this. With Truist, you have bought a good quantity of business actual property loans. We each control this. Last yr the massive concern was workplace. But I’m additionally beginning to take a look at multifamily for indicators of weak point. This is historically a very secure space. It’s round 33% of Truist loans. There’s not a emptiness downside with multifamily the way in which there may be with workplace, however there’s a hire progress slowing downside. What are you fascinated about business mortgage legal responsibility for regionals proper now?

Matt Frankel: It’s actually attention-grabbing you talked about multifamily. Like you mentioned, everybody at all times talks about different property varieties, particularly workplace. When you hear concerning the business actual property disaster, it is often referring to workplace. There’s quite a lot of empty workplace buildings in my city, I’m certain there is a bunch close to you. But multifamily, it is a actually attention-grabbing factor in that there is quite a lot of refinancing threat that is going to occur within the subsequent few years. I just lately interviewed Willy Walker, the CEO of Walker and Dunlop. They’re the most important multifamily targeted business actual property finance firm within the US. He identified that over the subsequent three years, 2024 via 2026, there are over thrice as a lot multifamily mortgage quantity that may must be refinanced as within the final three years. Loads of these loans, multifamily loans aren’t the mortgages that you simply and I’d get to purchase a home in that you simply simply pay your mortgage, the steadiness goes down over time. They’re usually curiosity solely loans that must be refinanced on occasion, and quite a lot of them are coming due inside the subsequent few years. I’d be curious to see what number of of these are Truist loans. I solely know the information for Walker and Dunlop’s loans as a result of banks do not get away particular person mortgage knowledge often. But I must say that that refinancing proportion might be in line with what you are going to discover in Truist’s portfolio. That’s an enormous threat, particularly if rates of interest keep elevated.

That’s an enormous if proper now most consultants count on rates of interest to fall over the subsequent yr or two. The query, it is going to be an actual balancing act between how a lot refinancing quantity is coming due and the rates of interest you may get as a result of you recognize in addition to I do, business actual property belongings derive most of their worth from how a lot they earn their homeowners over and above the price of possession. There’s not a emptiness downside in multifamily, there may be nonetheless a housing disaster within the United States. So there’s quite a lot of demand. The US economic system has the power to soak up, relying on who you ask, about three million new housing items. Most of that might be multifamily housing, not single household. There is quite a lot of demand, that is the great factor that there’s that refinancing threat and that is what I’d be keeping track of.

Deidre Woollard: Me too, particularly. The rates of interest stay this unknowable query for the longer term. Well, thanks for breaking it down with me right this moment, Matt.

Matt Frankel: Of course, glad to be right here.

Deidre Woollard: We discuss quite a lot of shares on the present, however it’s only a peek on the Motley Fool’s investing universe. This yr we’re rolling out a brand new providing, it is referred to as Epic Bundle. The service contains seven inventory suggestions each month, mannequin portfolios and inventory rankings, all based mostly in your investor sort. We are providing Epic Bundle to Motley Fool Money listeners at a lowered price, as a thanks for listening to the share. For extra info, head to www.idiot.com/epic198. We’ll additionally embody a hyperlink within the present notes for you. Up subsequent. Asit Sharma joins Mary Long for a more in-depth have a look at an organization that may simply enable you receives a commission.

Mary Long: So Paycom is a software program as a service, a SAAS firm that gives human capital administration options. Basically what which means is it is an organization that helps different firms maintain observe of their staff, they use this phrase, from recruitment via retirement. There are a handful of different firms that provide related providers, many additionally occur to begin with pay. But from the person, the employer perspective, what differentiates Paycom from its rivals?

Asit Sharma: Mary, in case you are a person of Paycom, to illustrate that you simply administer human capital administration options in your organization, it is bought a little bit of a nifty edge over another software program providers you possibly can have a look at. For instance, this firm takes info from the background examine of a possible worker throughout employment. They occur to be one of many greatest background examine firms within the US, it is a part of their income stream. But from the start, Paycom determined that it wished to tug info ahead so that companies did not should maintain reentering bits of data, and one other attention-grabbing factor that they do is that they develop most all of their providers in home, they like to develop software program internally. If you are utilizing their system, you get a pleasant dashboard, you possibly can transfer round fairly simply from one a part of the service to a different, from the payroll administration, to advantages to your staff, to tax filings, which occur to be automated, it is likely one of the nice providers they provide, they’ll automate that complete worrisome means of submitting quarterly returns to your firm via the software program. I believe that it attracts on the premise of usability for companies which might be it and performance. We’ll get somewhat bit into its automation creds in only a bit, however these are the foremost causes that entice customers to the platform.

Mary Long: From an investor perspective, one of many issues that stands out once I have a look at Paycom are its gross margins. They’ve been hovering at about 84% since 2016. That’s larger than quite a lot of its rivals like ADP, Oracle paychecks, Paylocity. What’s the story there?

Asit Sharma: One of the issues that you could do in case you are on this enterprise is to strike a steadiness between payroll administration after which providing all these different providers that line up underneath that human capital administration banner that you simply and I have been each mentioning. How staff can save for retirement, what sorts of advantages they’re eligible for, working with wage garnishments, there’s an innumerable quantity of providers that you must provide. The method of massive payroll suppliers just like the ADPs and paychecks and the oracles of the world has been to accumulate smaller firms elements and items to have the ability to provide every part to the companies that they take care of. But this turns into somewhat little bit of a clunky train from a person interface expertise, and it additionally results in, I believe, a bit of a better gross margin for Paycom since they develop every part, as I mentioned earlier than, internally. If you are not making an attempt to purchase smaller firms after which spend cash to combine the providers after which spend cash on the help when issues do not work out, you even have a smoother gross sales to value of income relationship. I believe that leaves you extra or an even bigger chunk, I ought to say, to then have your mounted value run towards, which ends up in hopefully, a greater working margin as properly.

Mary Long: There are all these totally different components and segments of the options that Paycom gives. Are all of them or nothing? Do firms have to purchase into every part or are there sure segments that garner quite a lot of consideration and traction and others that not a lot?

Asit Sharma: This is a superb query. Paycom is somewhat totally different than a lot of the firms you will have a look at, be they actually massive or simply small entrants into the area, and that their pricing is opaque. You cannot go browsing and attempt to Google up a chart of Paycom providers versus ADP’s. We do not have a really clear image on precisely how the providers are supplied up, however what we do know is that Paycom desires to promote its prospects every part in a single place resolution, that is the default, however they’ll provide companies the power to decide on a la carte bits from their menu. You can go both route, however what they are going to attempt to do upfront is to say, look within the single pane of glass, a single dashboard, you get all our options for X Price.

Mary Long: You teased out that automation piece. I really feel like right this moment you possibly can’t have a look at Paycom with out catching wind of this factor referred to as Betty. It’s not an individual, it is a service. Maybe let’s begin with what’s Betty.

Asit Sharma: Betty is principally an app that enables an worker to enter his or her personal info on advantages and in addition time throughout a payroll interval. This cuts down errors for the corporate that is working the payroll. This is a very good thing for firms as a result of it is notoriously tough to get a payroll proper particularly when you have got, to illustrate, a flux of staff coming and going. For companies that have that payroll is absolutely tough. It’s a price middle. What Betty does is permits the information supply, that is the worker, to enter the knowledge. When you chop down these errors, you chop down the reruns of payroll. What we heard from Paycom final quarter is sure, Betty is getting somewhat bit too good for its personal good as a result of with this discount in error, these are fewer additional payrolls run. That really cannibalizes a little bit of income. Now, Chad Richison, the CEO, has been fairly adamant his complete profession that he desires one of the best outcomes for patrons. He is keen to take somewhat bit much less income. If the person expertise is best for the client, he’ll promote them extra value-added merchandise down the road. I believe we have got a very momentary blip right here with the corporate. There’s one different a part of that puzzle that buyers ought to take note of. There is a gaggle that upsells providers inside this firm. They have been rising yr after yr. Last yr was the primary right here that they pulled again somewhat bit and mentioned, as a substitute of making an attempt to upsell, we will spend extra time on shopper premises with prospects serving to them get worth for the merchandise that they’ve. Richison was somewhat involved that they have been doing an excessive amount of upselling, in order that additionally hit the highest line and the projections for this yr. Just a little kink there, however I consider it is a blip in a longer-term story that appears fairly shiny.

Mary Long: Paycom is a software program firm; it is also worthwhile, it is also shortly rising. It additionally pays a dividend. All of this feels uncommon for a software program firm, and but largely due to these cannibalization and worries related to Betty that we talked about, the inventory has slumped quite a bit after its newest earnings name, which occurred in November of final yr. The inventory is now buying and selling at underneath 35 instances earnings. That’s principally half of what it was in 2022, and it is down from over 180 in 2020. How are you fascinated about valuation proper now? Do you are feeling that that is only a large shopping for alternative that others are lacking?

Asit Sharma: I do not assume it is large. I believe it’s a shopping for alternative. But buyers who put money into the payroll trade, I believe are in search of just a few extra issues out of this firm. Number one, their customer support actually is not as much as par. They spent a lot time investing in actually a seamless expertise with out integrating a bunch of third-party instruments that they’ve under-invested in areas the place their larger rivals have been actually on the ball. One fast instance, paychecks since like 2018 has been utilizing AI to put money into customer-facing bots, so folks can get fast solutions after they have points with their payrolls, and thus far we do not see that out of this firm. I believe additionally there are just a few different friction factors as a result of they’re, so let’s do every part in-house. They do not have an important API or an API that I’ve seen that simply connects to profit suppliers. There’s this complete interchange between profit suppliers that could be a little simpler with the larger platforms that this firm would not have. They must work on that as properly. Thirdly, I believe persons are questioning if there’s one other firm which builds one thing from the bottom up as properly. Is this extra of an concept or a aggressive mode? Mary, possibly you and I, if we have been actually technically expert, might attempt to construct one thing related with the concept let’s get the information first off when somebody comes via the door and let that observe them via the group and in addition provide an app the place they’ll put this info in and have these seamless perils. That itself is not one thing that is unassailable, however for his or her larger rivals, they actually do not wish to pull their prospects out of their fashions that at present exist. It’s actually, actually laborious to inform an organization, we will do one thing much like this course of you have heard about. But it will take 4 weeks of implementation and the perils shall be guide throughout that point. This is one edge that Paycom has. It’s actually tough to recreate it on an enterprise stage, however I believe buyers are simply weighing the places and takes of this and saying, yeah, it is most likely a shopping for alternative, however it’s not that the entire market has missed this story right here, they see it realistically.

Mary Long: Chad Richison is the CEO of Paycom. He based the corporate in 1998 and once more stays on the helm to today. We love a founder-led firm right here. Do you have got any significantly sturdy takes on Richison, his imaginative and prescient, his management, or how he is executed that imaginative and prescient?

Asit Sharma: Sure, let’s get the elephant out of the room first. I imply, Richison has some of the profitable pay packages in all of Wall Street. He bought, I believe, $200 million value of inventory incentives just a few years in the past that if Paycom inventory performs may very well be value into the billions in just a few years. He’s gotten quite a lot of push again from that. Now however, what I like about him is he is carried out, it is a firm that is actually outperformed since they have been public. As you level out, very money circulate optimistic. They are considering extra share buybacks. They have initiated a dividend, and I like Richison’s lean perspective towards working his enterprise. He would not like debt, so that they’ve paid down all their debt. I believe apart from possibly $29 million. They wish to generate the money after which make investments it. There’s not quite a lot of waste within the group and he is been fairly good at inspiring his staff to go and battle towards the larger gamers by growing their very own stuff. I believe he is saved the R&D engineers very completely satisfied at Paycom. They wish to innovate and I believe they’ll proceed to. I believe by way of imaginative and prescient management execution, he is bought all that. The firm has traditionally deserved the multiples, the wealthy multiples the market has given it. It’s simply with this bump, with Betty beginning to seem like it could be too good for its personal stuff. You do have this crossroads for the enterprise and the inventory. But we’ll see, we’ll monitor it this yr, quarter by quarter, possibly you and I can chat once more later this yr and see how they’re doing.

Mary Long: Yeah, we will do a check-in. If issues do not go in keeping with plan, then that facet hustle that you simply talked about of us beginning our personal model of Paycom appears like a promising alternative.

Deidre Woollard: As at all times, folks on this system might have curiosity within the shares they discuss and the Motley Fool might have formal suggestions for or towards, so do not buy or promote shares based mostly solely on what you hear. I’m Deidre Woollard. Thanks for listening. We’ll see you tomorrow.