Thanks, everybody. We'll kick off the afternoon sessions on the Mid-Cap track. Excited to have Old National with us today. We're joined by Jim Ryan, Chairman and CEO, and John Moran, the new CFO. Congrats on the new role. It's a exciting opportunity. But yeah, so you know, you've had a lot going on over the last few years. Maybe to kick it off, just give us a little update on the state of the bank.
Sure. Well, let me just start with congratulations, John. We're super excited to have John on the team leading us forward. I really could not think of a better partner to have, and so this is John's, I guess, first conference as permanent CFO, but he clearly has been acting in that capacity now since April, so we're really grateful for all of his contributions, and obviously done an excellent job continuing to have great relationships with our investors and all of our stakeholders, and thank you for the opportunity to be here today, by the way. I really appreciate the opportunity to speak this afternoon, but also for all of our one-on-ones and just appreciate the support.
For those of you who don't know that much about Old National, Old National is a 190-year-old institution, headquartered in Evansville, Indiana. You know, we have approximately 300 locations spread across the Midwest. Chicago would be our biggest market, followed by Minneapolis. We recently closed and converted an acquisition in the state of Tennessee. We've got 23-24 locations now in the state of Tennessee. We've been really blessed. We've had a great organic growth from a couple different factors. We've had just an excellent opportunity to attract new talent that was leaving some of the banks that are here at the conference.
Some of the large banks and some of the super regional banks have contributed to our excellent workforce, and we've built that both in our legacy markets across wealth and commercial businesses, which has been great contributors to, I think, our above kind of market growth in the last handful of years. We've done a handful of acquisitions that have also allowed us to think, to change our growth trajectory. Obviously, most recently in Tennessee and specifically in Nashville, we're super excited about what we think Tennessee can bring to our franchise.
I've used this analogy with respect to what Tennessee, while it's a relatively small percentage of our total footings today, around 5% of our total assets today, there's so much growth opportunities, and it's kind of falling off trucks there, and you just got to be there to scoop it up. And so we're excited to have a team there to take advantage of that. But really, you know, we've been really blessed for a hundred and ninety years to have an exceptionally strong community-focused organization. We believe in culture. Culture is a huge driver of our success, and I think that's what allows us to attract just some amazing talent to join the organization, to be a part of something maybe a little bit bigger than they're coming from.
Great. That's a great overview. Thanks. You know, maybe drilling down on the growth topic a little bit, you know, you've seen really strong growth for a number of years. You've mentioned some of these newer markets. Where are you seeing the most opportunity, whether it's geographically or by vertical and product line, and how are you attracting these new clients to the bank, you know, coming from some of the, you know, other competitors really wide?
Excellent question. I would just start with, when I first started the organization twenty some years ago, we really had to have just some home run quarters and a handful of key markets, and those were legacy, more rural markets in Indiana and Western Kentucky. And today, we're really blessed to have really strong markets. And even if the markets aren't necessarily growing as fast in these traditional Midwestern large cities like Chicago and Minneapolis and Indianapolis, I mean, there's growth there and these are great places to be, but we have relatively low share, so it's really opportunities for us to pick up share. But today, I tell everybody, if we go out and hit singles and doubles in all of our good markets, we're going to have a great quarter.
And so, I think that allows us to be choosy when it comes to client selection. We really want to have the best clients to do business with, and I think that affords us an opportunity to grow, but grow at a responsible, you know, rate, particularly given the environment we find ourselves in in today's world. And because of that, I think that growth, you know, we get noticed, we get on the radar screen pretty quickly, particularly from some of our competitors. And so we've been able to attract that growth, you know, brings attraction of new talent that wants to be a part of that opportunity. And so I think today we sit in a really enviable position that, you know, maybe ten years ago, organic growth was a challenge for our organization.
Today, that's not our challenge. Today it's you know I was sharing a story earlier today. Somebody had reached out to us, and this has happened a few times this year from a different larger market that wasn't a market we're in today. And they said, "We've heard your story. We want to be a part of your team." And we said, "You know, appreciate that, and maybe someday, but not today. Let's focus in on the markets we've got, the opportunities we have in front of us, and continue to serve those communities.
You know, in addition to the strong organic growth, you have used M&A in the past. What's your thoughts in terms of, you know, going forward from here? Is there enough on your plate with organic opportunities that you're just going to stay busy, you know, taking that share, or is there still an opportunity to, you know, take that expertise in doing deals and look to expand?
Certainly, I think we have expertise in M&A. Having said that, and I made a comment on our second quarter call as well, that, you know, and I think there's going to be plenty of opportunities in M&A to come, you know, in, in, you know, maybe the back half of the year. Maybe people wait for the elections. certainly in 2025 . I think the best path for shareholder value creation for Old National, as I see the markets today, is to continue to concentrate on growing organically, executing on the markets and the, and the offices that we started. You know, we started a few LPOs up. Continue to make sure that we take advantage of Tennessee and, you know, our LPO in North Carolina that came along with the CapStar acquisition.
And you know, just be really focused on serving our clients, growing organically, and growing tangible book value per share. I think that's probably the best path for us in the near term here. Obviously, we're sensitive to the $100 billion. You know, things change pretty quick, and we want to stay far enough away from that that nobody believes we're going to cross $100 billion anytime soon, whether they be a regulator or an investor, and start imposing you know, the potential costs and changes that are required as a result of that.
You maybe spent a little time speaking about CapStar. You know, how has that integration gone? You did the systems conversion in July. How's the broader cultural integration going on and success with some of the synergies that you've identified earlier in the announcement?
Yeah, the great news, I'll let maybe John comment on the synergies themselves, but the great news is, from a cultural perspective, very early on, you know, it's hard when you do due diligence to ensure that, you know, this is an organization that will align with you culturally. You have a pretty good guess, but you have limited optics into the franchise, and what I would say is every single time I'm down there, I have been impressed with the people that came to us as a part of the partnership. Also, we had a team that we had in place.
We had about nine folks that already worked for us in Tennessee, that came from different organizations, a really big, strong wealth presence there. That team, along with the CapStar team, has come together really nicely and really looking forward to taking advantage. In fact, we had our board dinner down there, I guess it was maybe three weeks ago now. Once a year, we take our board, we travel to one of our markets, and we were able to bring our board to Nashville this year, and we had a client event with 150+ clients show up for dinner at the Country Music Hall of Fame, and it was a fantastic event.
Warm reception, former board members, clients, all coming out to support us, and so I have been really surprised. Obviously, there's a lot of great banks that bank in Nashville and Tennessee broadly, but I've been surprised about the receptivity that our team has felt for the opportunities. I think there's just so much growth there. I think that will, you know, again, if we're there and we're in the right place with the right people.
I'm convinced, as much as our business wants to talk about, I don't have my phone in front of me, but as much as our business wants to talk about, you know, that phone and mobile technology and things that are required to do banking today, and many of the clients we do business with, you know, we have to be competitive with technology, but more importantly, we got to have strong relationship managers who can build deep and long-lasting relationships, and so I think that's a key to success for us. You know, John, you want to comment on the synergies?
Yeah, so on track for the cost savings that we outlined when we announced the deal. We'll hit the run rate on those by the end of the fourth quarter of this year. So that sets up 2025 with a little bit of a tailwind on the operating expense side of things. Revenue synergies were never modeled, and we don't put those into our M&A model, ever, but are fairly obvious, and I think the easiest one would be that wealth team that Jim mentioned. That's a high-performing group, and cross-selling into the existing CapStar client base should be a good opportunity for us.
You know, when you're speaking with your borrowers, especially commercial borrowers, what's been the sentiment from them? And, you know, what's needed to sort of spur organic demand on their part? You know, we've heard from some other banks that it's rates, some that it's more certainty around the political environment or the economic environment. As you're talking to clients, you know, what's the sort of sentiment, the broad sentiment now?
You know, it's interesting. So many of our clients are coming off some record years, and certainly an uncertain, less than clear political environment doesn't help, you know, make long-term decisions, and so I think the economics have kind of followed where it's a little bit weaker than it has been in the past. So I think the clients are still in a strong position by and large. They're just down from or flat from, you know, some pretty strong years in the past year. So I'm not sure it's so much interest rates as it is around clarity around, you know, the political environment and clarity around.
I guess, if anything, you know, a rate cut here in September could be a confidence signal to the market that, you know, the Fed is prepared and willing to take action as is the benefit from lower rates. I think it's more of a confidence signal than anything, but you know, I think our clients feel pretty good about the world. Certainly, you know, the real estate environment is more challenging, you know, given the cost of labor and materials and the absolute level of interest rates to start new things. And so clearly, I think having some rate cuts will help existing clients, but also help new projects get off the ground a little bit faster.
You know, maybe shifting over to the deposits and funding side. It seems like deposit costs have really plateaued in advance of rate cuts. Can you talk a little bit about how competition on the funding side has been and how you're expecting trends, especially in DDA, to be progressing?
Well, since I'm blessed to have John up here with me, I'm going to throw this one to John.
Yeah. Yeah. So look, I'd say deposit competition is still fairly intense. It's starting to mellow out a little bit and abate, especially as we've got more clarity around what the path of Fed action might be here later this year. You know, we've been unapologetically on our front foot. We are really focused on continuing to fund what's better than average loan growth with core deposits.
You know, but I do think that there's an ability to kind of start to ratchet things down here as we get into the back half of the year. For us, where we'll do that is mostly in our exception price book, 31% of total deposits, 38% of our transaction accounts. A good chunk of those are actually indexed contractually, and so they start to move kind of right away, and the balance of them, I think, will be able to move pretty quick.
And we have almost $7 billion in deposits that are coming due in the next 12 months. So really an opportunity to look at those costs. And so we've been really deliberate on managing that duration into relatively short maturities.
You know, when you look at the CD book, what are your thoughts around CD pricing? Is that, you know, still going to be a lower duration portfolio as rates go lower? And do you still need a 5% rate to really be bringing in new dollars in deposits here?
So, duration in the CD book, we've intentionally brought in meaningfully over the last twelve months or so. And so every special in the bank over the last, particularly the last six months, kind of targeted at the five, seven, and nine-month duration. And so those will start to spin. And the answer is no, I don't think we're going to need a 5% to bring in new CD funding here in the not-too-distant future.
So between the new rates and the roll rates, we should see some pretty high beta, or relatively high beta on that time deposit side. I guess, you know, as you look over the last few years, it does feel like you've seen a little bit of a disintermediation of the deposit relationship in banking, the way you saw it on the asset side, maybe over the prior twenty years. You know, what have you learned about your deposit base over the last few years?
Let me start at the high level. I don't think this was always appreciated, but it became pretty acute, you know, in early 2023. You know, our granular approach to banking, whether that be on the deposit side or loan side, I think has served us incredibly well, and we've also always had a really balanced business mix, if you look at our loan portfolio, you look at our deposit portfolio.
You know, the fact that we have these, you know, almost 300 stores, it's a costly model to run, but it really allows you to attract, you know, community banking, retail, checking and savings accounts, which gives you a lot of diversity, in times of liquidity, you know, scares, but also in terms of your ability to kind of hold your deposit costs in check because of the relatively low dollar balances that exist in kind of traditional, you know, checking accounts. So I think from that perspective, I think that got lost a little bit in our industry when money was so cheap and so easy. You know, I think our industry saw that industry concentration can hurt you in a significant way.
John, you want to add on to that?
Yeah, I think granularity is part of the secret sauce at Old National. I think our top 20 depositors are 6.5% of the total deposits. That's a little bit different, I would argue, than most banks that are kind of in the $50 billion to $100 billion asset range. You know, and I think, you know, we feel good about where our transaction account balances are today. That's kind of bottoming out. The last of the cash sorting is kind of, we think, behind us. It'll be a battle for primacy, right? I mean, we absolutely want to bring in non-interest-bearing operating accounts, both in commercial and in community, and a long track record of doing that.
On the commercial DDA side, how active are you with ECRs, and how much of a part of the negotiation for relationships is that? I mean, should we expect to see some sort of rapid decline in that as we go forward?
We haven't really done much with ECR. Where we've managed that more is on exception pricing on rate.
Okay.
You know, it might be a good lead-in to, you know, kind of our broader treasury management strategy for our commercial client base, and that's an area we continue to invest in. We recently appointed a new leader who joined us from CIBC in Chicago, and so we're making significant investments in both leadership and team members, as well as product capabilities to really serve that, you know, middle market client base, and so hopefully that will allow us to both grow, you know, non-interest-bearing deposits in a meaningful way, but also the fee income associated with that set of product capabilities, and so really pleased. That's an investment that will pay long-term dividends for us, along with some other fee income businesses we can talk about, but.
Yeah, I mean, that's a good starting point. You know, you do have a diverse fee income business segment. Which areas are you most focused on sort of investing in here, expanding capabilities, that you feel is going to drive better profitability?
Yeah, I'll maybe start. I've been really passionate about the wealth management business at our organization. We built out a new leadership team. Many of those leaders came from, you know, larger super regional organization. He's been able to attract talent. In fact, the team we started with in Nashville really came out of a relationship that they had with each other. So he's been able to attract talent to the organization, both at a leadership level, but also at a relationship management level. We've invested in new product sets to serve that client base. We've really made an attempt at really integrating the wealth management business with our banking business, so it's not siloed.
Particularly, if you think about loan and deposit opportunities on the private banking side, that's been an important part, I think, of the early success we've had there. I said, organically, you know, we're growing in the kind of mid-plus single digit rate in that business. I'd like to see it even go faster. I think there's opportunities to go faster because of our operating model. I think we can provide a level of personalized service for both, you know, retail, you know, brokerage-type accounts all the way to high-net-worth. We recently created a new high-net-worth division called 1834, which happens to be the year we were actually founded. There's nice tie-in to our 190 years here of being around.
But we've had some great success early on in attracting some high net worth. We built out robust financial planning capabilities in that business, and that's, I think, allowed us to grow assets. We're just taking a little bit more hands-on relationship and management approach than historically we've taken, and I think it's separating ourselves from some of our peers as well. John, do you want to comment on maybe a couple of other fee income businesses?
Yeah, I think we touch on treasury management a little bit. That's clearly an area of investment for us. And then the other one, capital markets, has been a small but I think good grower for us. Most of that business is customer swap related, so a little bit of FX. And then, obviously, the other fee line for us that can be meaningful is mortgage. A couple of years back, that was a $40 million line of business for us.
We're half that. We're kind of roughly half that right now.
Yeah.
So that could be meaningful upside for us.
Yeah, on the mortgage side, where do you see rates having to go to really spur that demand? You know, that may be one of the questions we ask you to answer a little later on, but.
Yeah, you know, I think today our posted rate is around 6% for a 30-year and 5.625% for a 15-year. So I don't think we're that far from. You know, these are places that hopefully make long-term sense for people. And then, you know, if rates do get materially better from here, there's opportunities to refinance. I think some of the biggest constraints continue to be availability, housing stock. I mean, that's across the country, right? Continuing to be probably the biggest challenge we have into getting more people into homes, especially affordable homes, is our ability to do that.
We've created special programs to make sure that we're doing our part to help with the affordability side. So I don't know if it's so much rate driven as it is, you know, just general and probably some confidence, like we saw when we talked about on the commercial side. You know, what's going to happen in the next twelve months? You know, I think that will be important, for us to see that uptick in that business.
You know, you talk about how, when you look at some of these other fee income businesses, like you mentioned, capital markets and cards, integrating that with the rest of the business, what's needed to expand that? Do you have to make some more investments in technology? Is it really just culturally getting people to be, you know, selling the full products and services? And, you know, when could you see sort of an acceleration of growth in some of those lines?
Yeah, I think part of it is selling the whole relationship. I think there's opportunity inside the bank to do that better. I think we're pretty good at it today, but I think we could always be better there. And, you know, in terms of investment, I think we've made some significant investment on the wealth side. There's probably a little bit of investment yet to go in treasury management, some of the other things that we're talking about. But, you know, for a very long period of time, Old National Bank is sort of a 2%-3% annual OpEx per year kind of increase, and so we try hard to self-fund those investments.
Yeah, John made a great point. You know, for our average small business, lower middle market client, we have all the product capabilities that we need and really don't need a lot of new technology. Where the new technology really comes into play, I think, is now, because we're a larger organization, we have the opportunity to serve larger clients. And so, some of the product suites that we need, some of the technology we need, it is not. We don't see it having a meaningful impact on our non-interest expenses, but it is an opportunity that will grow deposits and fee income along the way.
You know, on the expense side, I think, John, you mentioned, you know, you've been seeing some good progress on the identified cost savings from CapStar. You know, just in general, how have you been able to find more cost savings after you've done some of these deals? And you know, how successful have you been in terms of really maximizing the opportunity on the expense side?
Yeah, I think if you look at our track record, we kind of put out targets that we're going to achieve and kind of know that we're going to get them. Things could come in a little bit better from time to time, but I don't think that's going to be our experience in Nashville. We're focused on hanging on to talent down there.
You know, on the cost-saving side, and just efficiency and client experience side, we've been really focused in on building out, you know, stronger, more scalable back room to support the organization. That's been a critical part of our success, and I think that's where we really allow ourselves, whether it be the IT space or, you know, the processing side, we've been able to kind of self-fund some of these improvements, and it really allowed us to keep expense growth in pretty reasonable check over the last handful of years. And really keep our efficiency ratio, despite, you know, what has been a challenging environment to keep our efficiency ratio in kind of that low fifties range.
Hopefully, you know, whether it be investments in wealth or investments in treasury management, we'll continue to find dollars to do that.
Yeah, I was going to say, you know, as you look at the expanded asset size and your growth plan, where do you think you need to make some incremental investments on the tech side? Or is it just building out that wealth and.
Yeah, I think it's more product specific, you know, wealth and treasury management, just to make sure that we have. We'll continue to invest in the infrastructure of the organization. As we get bigger, we'll continue to invest, but again, nothing from an outsized perspective that's just not consistent with kind of normal growth. You know, and so, those will come, but it won't come. You know, our ideal environment is where we have that kind of 2%-3% kind of year-in, year-out kind of cap on expense growth.
Great. We have a couple questions from the audience. Maybe we can shift over to those. So let's see, we'll get those up. So our first question was asking the audience, "What's your current position in Old National? Overweight, market weight, underweight, or not involved?" Give a few minutes, few seconds here to. So, you know, you have a couple owners and a couple people that could be potential and some on the short side. You know, it feels like what we've seen so far over the last few days is a relatively large portion of people not yet invested. So it feels like, you know, we are seeing more people looking at the group, which is good, but 57% overweight, so we can do it.
Thank you. Thank you for those, and those of you not involved, we'll be happy to talk with you afterwards.
All right, second question: How many basis points in rate cuts do we need to see for commercial loan demand to be impacted by Fed action? 25, 50 basis points, a 100 basis points, or a 105 or more basis points? Yeah.
All right.
Everybody with 100 basis points, that feels like a trend as well.
The question is, how long does it take to go to a 100?
Yeah, yeah. And what's driving it down to 100? Third question: Where will CD prime rates be by mid-2025? Less than 4, 4.5, 4-4.5, 4.5-5, or greater than 5. So most people in the 4-4.5 range. You know, it sounds like you may think that was on the higher end or right around there?
Okay. I think I'd probably have voted one, but
And then our last question: which would have the most impact on improving Old National's valuation? Above peer loan growth, better relative margin performance, stronger fee growth, better expense control, credit quality outperformance, more active share repurchase, or an accretive bank acquisition. Let's see, so like we've seen with a lot, you know, it's top line growth, better margin performance, combined with loan growth and fee income growth. Let's see if there's any questions in the audience. Happy to pass the mic. No? Well, yeah, maybe we can speak a little bit about the margin and some of the trends we're seeing there.
You know, as we look out over the next year and we're in our model, assuming three twenty-five basis point rate cuts, you know, I guess, how do you feel about the margin dynamic and, you know, especially the loan yield dynamic with that type of a backdrop?
Yeah, we feel pretty good about where we positioned the balance sheet. You know, roughly eighteen months ago, we were pretty asset sensitive. We by design targeted the middle of this year to get to neutral, and we feel good about where we're positioned. We actually got there a quarter early. CapStar closing a quarter early helped us out a little bit. You know, when you go through the puts and takes here, I really do feel, you know, the asset side is going to reprice pretty quickly. 53% of our book is floating.
But that exception price book at 31% of total, 38% of transaction, the CD repricing that we already talked about, and then what we've done on the borrowing side of things, we really feel like we've positioned ourselves to have liabilities dropping pretty much lockstep with assets. And so we feel good about where we are. You know, for this year, whether we get one cut or three cuts or zero cuts, frankly, it's not going to be a big difference to NII dollars. Next year, as we look out, I think it's all about our ability to continue to generate quality assets, and a little bit of a steepness in the curve would be beneficial for us.
If we saw a fifty basis points cut in September, would that give you a little more air cover to be more aggressive on the funding negotiations, or would that send a caution sign to clients?
I think fifty basis points could give us a little bit more air cover to be dropping rate a little bit quicker. Yeah. I think fifty basis points, followed by another fifty basis points, maybe people start to say, like, you know, "What, what's going on?" I think fifty basis points in September would be okay.
And then with that backdrop, as we look at NII, sort of the longer the trajectory through next year, you know, how, you know, do you feel like we're in a spot for strong growth coming off of, you know, maybe a 12/ 31 level, with that rate backdrop?
I think a little bit of steepness in curve, fixed asset repricing as a tailwind. I think 2025 could set up pretty good.
You know, we switched over to credit. You know, historically, you've run with a relatively high level of criticized loans, but haven't really seen much flow through to charge-offs. Can you give a little discussion around your grading criteria? Are you just a tougher grader and you're quicker to move things to criticize? Or, you know, how are you handling the migration, the credit migration to limit losses?
Yeah, great, great question. And that, that has absolutely been our history, where we've just been really tough graders.
Quick to call any credit migration, and as a result, you know, we recognize, and there's a couple of us out there in the industry that run a little bit higher than our peer levels, and the analogy I use, which is kind of a crude analogy, is that, you know, we really want to get them to the hospital so they can walk out on their own two feet, you know, and get them cured, and so we believe that's the right philosophy for a bank like ourselves. It's also, I think, we've been more patient, you know, to allow the least cost resolution for both them and us. You know, as levels increase here and, you know, as an industry, I think we're seeing increasing levels here.
I think, you know, patience, you know, we're probably a little bit more aggressive in terms of how we think about how much patience we give. But if the borrowers are working with us, we're working with them. We want to ensure the best possible resolution for everybody involved. But you know, rest assured, we'll continue to have that discipline of staying on top of because we think ultimately that's best served for our shareholders, is to be aggressive in calling the grades accurately, you know, when there is credit migration.
Yeah. As we've gone through this quarter, and as you look at towards the end of the year, do you feel like you're going to have more accommodations for those credits? Or does the rate environment give a little bit of natural protection on that?
Certainly, anything that might happen in the rate environment would be helpful, I think, you know, for borrowers, right? So that's a good thing, but we'll actively continue to work with our borrowers and make sure we have an active plan for all those that fall in that bucket, and ultimately, you know, we want to make sure that we manage those levels to the right spot.
How has the accuracy of your credit marks been on recent deals? You know, and how much protection do you still have on balances that you've acquired?
Yeah. So there's a $190 million discount against the acquired book. There's a 4% allowance against the PCD loans. So we think we've got plenty of cushion. Actually, one of the things that comes up sometimes is when you're just running screens on us, our reserve to loans looks kind of lighter versus peers at 108. But if you pro forma it for the accounting noise that's in the deals, we're actually closer to 161 basis points on that measure. We feel really, really well reserved. Historically, those marks have been, I would say, pretty conservative, and they tend to work out a little bit better than how we have them modeled when we close the deal.
Yeah. You know, maybe on capital, you know, you've continued to accrete capital after the deal. Your capital ratios are, you know, certainly strong by any measure. How sure are you thinking about capital management from here? What your targets for midterm and long-term required internal capital levels are?
Let me start out at a 50,000 foot level and have John dive a little bit deeper, but from my perspective, I think the industry is still trying to figure out what are the right capital levels for this environment, and you know, we've got a lot, obviously, a lot of talk about Basel III and what that means, and how that might potentially impact banks like Old National. I think it's to be determined. You've got Moody's, who has a view. You know, what does Moody's think of, and the other rating agencies think of the right capital levels for this environment?
You have the regulatory view. So, I mean, I think continuing to let capital grow in this environment is the right spot to be in. Obviously, helps tangible book value, you know, per share growth. That's the plan for the near term here until maybe things get sorted out. We're in no rush to do anything different than what we've been doing, you know, this last year.
Yeah. And so, you know, CET1 at 11% feels behind, left unchecked. We'll tack on about 100 basis points to that ratio every year. The other ratio that we're sensitive to, and sometimes we get picked on for it, but we're sensitive to TCE, and it wouldn't be a bad thing to let that grow a little bit at these levels. And, you know, after that, we'll kind of continue to think about other options on capital.
Do you think an 11% is a long-term or midterm need to stay there?
I think we'll hit there by the end of the year.
Yeah. We actually have a question. There's a microphone. If you just wait one second, so. Thanks. Question on your. Moody's having an upgrade or?
We were on review for downgrade, and we came off review.
You came off watch list? You came off review?
Unchanged with the rating.
Yep, changed that.
Good. Yep, good question. Any other questions?