All right, we're gonna get things going here. Very happy to welcome Jon Witter, CEO of Sallie Mae, to our conference. Thanks for joining us, Jon. Before we get started, just wanna read across some important disclosure. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. The taking of photographs and use of recording devices is also not allowed. If you have any questions, please reach out to your Morgan Stanley sales representative. Jon, welcome to the conference.
Jeff, great to be here. Thank you.
Yep, thanks for coming. Why don't we just get things kicked off right away? You put out some slides last week.
Yeah.
Maybe we could just dive right in. Anything to update us on the quarter? I know you talked a little bit about the credit consolidation activity. Anything you're seeing on originations either?
Sure. Obviously, it's a, you know, a little bit of a tweener period, not yet at the end of the quarter. I think as we put out on Friday evening, we continue to be, you know, I think, hopeful regarding and optimistic regarding credit trends. You know, we obviously had a very nice first quarter. I think, April and May are tracking modestly ahead of our expectations, recognizing that credit in April is always elevated, just given the normal seasonality of the business. We also put out some data on consolidations, and I think we've seen, through, sort of our vantage point and in our portfolio, a pretty dramatic change in the consolidation environment. If memory serves me right, consolidations are down, you know, roughly 72%, 74% versus a similar period last year.
Obviously, you know, that's an attractive tailwind for us in terms of assets staying on the balance sheet longer. As we announced during the first quarter, you know, very strong start to the origination season. While our peak season doesn't really start till the early part of July, I think we continue to be, you know, optimistic and encouraged by what we're seeing sort of in the trends to date. In a time where there's a lot of tailwinds in the industry at large, I think we feel pretty good about, you know, some of the tailwinds that we're feeling in our business right now.
What do you think is driving that lower consolidation activity? What do you think the outlook is from here? Is there potentially a rebound to come of, you know, consolidation away or?
Let me, you know, preface this as I always do when I get this question. You know, consolidations is not our core business. Obviously, we see it through the vantage point of our portfolio, but I'm sure there's others who have, you know, deeper and different views than I do. I think our analysis suggests that the primary driver of the change in consolidations is really predominantly rate related. We've seen that play out here over a number of quarters. As we've done our reverse engineering of the likely or anticipated margins on different consolidation deals out there, you know, it feels like the margins are getting squeezed pretty dramatically.
you know, I think on top of that, you know, most of the consolidation activity that we see is what I would describe as Federal loan first lead. you know, that's where the big balances typically sit for most of our customers, and the private student loans sort of come along as a part of the deal. I do think customers are probably recognizing that, you know, there are inherent advantages to the Federal Student Loan program. whether that's the potential for loan forgiveness, and I'm sure we can, we can talk about that more. whether it is, sort of the payment pause holiday during the pandemic, you know, or whether it's the promise of, you know, even better going forward, income-driven repayment or income-based repayment programs.
Those are real benefits that I'm sure, a lot of customers feel and might lead them to think differently about refinancing those or consolidating those loans.
Definitely wanna get into the Moratorium, but let's put that off for a little bit later.
Yeah.
Just to follow up on the credit performance, I think you talked about the 2.38% year- to- date.
Yeah
For the first five months of the year, tracking better than, or in line, or better, I think.
Yeah
You said, with your expectations. I think this implies something more like the 2.7, 2.8 for this quarter so far. Can you just remind us why that's going on right now? I think you talked about the grace period impact.
Yeah. You know, the biggest thing that we see is, you know, there's obviously a level of charge-offs that are uniform and sort of consistent throughout the year, and they're really the results of just the normal things that happen in people's lives, which of course are kind of evenly distributed, if you wanna think about it in those terms. What we also know is, you know, one of the very largest single cohorts of defaults is what we think of as sort of the zero payment, sort of default cohort. In every consumer credit business that I've been a part of, there's always a group of customers, no matter how well you underwrite, who, you know, once they have the credit, literally never make a payment and flow straight through to default.
If you think about our P&I wave, you know, our biggest P&I wave really happens in the November timeframe. You know, therefore, April just tends to be a seasonally high month for us, all things being equal in terms of charge-offs. There's always that degree of seasonality. There's other factors as well. You know, things like the timing of loan sales can have, you know, a small impact. There's some other, you know, features and functions as well. I think it's always a little bit difficult to annualize a single month or even, you know, a couple of months of performance. You know, quarterly is sort of the least I would wanna do, and I think it's really more important to look at those through the guidance for the entire year.
Got it. It sounds like maybe we should see some of that unwind in the coming quarters beyond 2Q?
Yeah, I think, you know, the thing I would feel comfortable saying is, you know, every quarter will be a little bit different going forward for idiosyncratic reasons. You know, we'll do our best during upcoming earnings calls of, you know, giving folks a good sense of where we see the world going and, you know, what they could expect to be different on a quarter-by-quarter basis.
You know, you talked about some of the credit issues you had last year. I think there were a myriad of items going on there that impacted you. I think one of the things that I wanted to ask you about, though, was the collection staffing and training. I think that was one key area you highlighted as, you know, you were maybe understaffed and undertrained for a bit of a period there. How is that going? Do you feel like you're at the place you need to be? Are they performing above your expectations, et cetera?
Yeah, a great question. Just as a reminder, you know, for anyone who's never run, you know, sort of a big gearing ratio-oriented operation shop, you know, seemingly small differences in expected volume can actually have a pretty big impact in overall performance. That's just, you know, the math of, I can take so many calls in an hour, and I have so many people. You know, even, you know, 5% and 10% variances can obviously have a big impact there. Since last year, we've done three or four things, and I'm pleased with sort of the operational performance that we've made. Number one, we've really gone very hard to make sure that we are at and remain at sort of full staffing and maybe even slightly rich staffing relative to expected volumes.
We feel like that's the right place to be. Secondly, we've made real changes to how we are training and onboarding, this new staff. I think when you've had the luxury of sort of a large installed base of staff for a long period of time, you know, sometimes you don't recognize all the opportunities around training. So we've made changes there, from everything from how we train our staff to where we train them, bringing many more back in the office for longer periods of time. We've seen real performance, differences in terms of how quickly people are coming up to speed.
We've made technology changes to how our staff are accessing customers, and whether it's, you know, sort of how we text and, you know, sort of how calls are identified and how we're doing the outreach or how we're helping to support our agents as they work through some of the very difficult conversations and complex conversations they need to have around needs identification and sort of program matching. We've put in place much better workflow tools to be able to help with all of that. You know, I think, you know, the final piece is we've started thinking, you know, even more expansively about the programs that we have to offer our customers. You know, our previous credit administration programs were, you know, very broad. They were very flexible.
We've changed those for some important reasons. I think we did a good job of anticipating kind of a first set of programs that would help fill some of those gaps. Over the last, six to nine months, we've also identified some places where some new or optimized programs will be, really, really helpful and beneficial to our customers as well. Across all those dimensions, I think we've made great operational progress, I think still more to come.
I'm curious, are there any examples of programs you're finding you're doing more now, or anything you could tangibly highlight on how you're actually helping your borrowers today?
You know, to give you a broad sense, 'cause not everyone will have, you know, sort of studied our loss programs and our credit administration programs thoroughly. You know, we do a whole host of different things. We do graduated repayment programs. When you're just coming out of school, and maybe you haven't fully grown into your new payment, you know, sort of stepped-up programs to help you sort of wade your way into your full responsibilities. We do principal reduction, we do term extension, we do rate reduction. Like, all of those programs are out there, and they're all part of our arsenal. I think, you know, what we're really focused on, and this is where technology comes into play, is how do you balance complexity, efficiency, and effectiveness?
You know, at the extreme, you'd love to give every customer their own unique, individualized plan. You'd blow the place up in terms of complexity. You could never administer that number of programs. By the very same token, if you gave everyone one plan, it'd be really simple, it wouldn't be terribly effective, and it wouldn't be terribly efficient. You'd be giving people a lot more benefit in some cases than they really needed. You know, rather than a new program, I think what you should expect is greater optimization to really not come up with dozens and dozens, but the right number of those programs to really balance efficiency, effectiveness, you know, and complexity. I do think the one place that I'm especially excited is, you know, we are adding some additional programs, in particular, in the graduated repayment space.
This is a place where we know most of the customers that we have who experience financial difficulty do so within the first, you know, one to three years of entering P&I. By the way, this makes sense. If you think about what it was like to be 22 or 23 years old, you know, you probably weren't making as much as you wanted. You probably had a lot of other financial obligations. I don't know, maybe like me, you weren't quite as prudent in managing your affairs as you would be later in life. I think, you know, graduated repayment for those, you know, new to repayment borrowers is the one that I'm most excited about, but I think you should expect to see optimization across all those different programs.
Yeah, I think a lot of these, you know, 21 to 22, 23-year-olds today are also realizing, maybe not realizing, that the moratorium is about to come to an end pretty soon. I'm just curious, have you assessed what kind of impact that's gonna have on your business, maybe your borrower's cash flow? You mentioned the newer technology you're kind of deploying in your collections department. Have they been able to start getting a sense for how borrowers are thinking about that coming up?
Yeah, we've started that, I'll give a couple facts and details, but I think there will be more work to be done as the sort of Federal programs are fully defined and rolled out. I think that's just starting now, but we don't have full information. Maybe just as background, you know, about 86% of all of our customers, all of our borrowers, have a Federal loan, so it's certainly the majority. You know, to put that in context, the average Federal loan amount is about $40,000, the median is about $25,000. That's a healthy balance, but it's not, you know, some of the levels that, you know, some have suggested before, sort of knowing the facts.
While we don't have this specific data on a per borrower basis, you know, if you go back and you look at the program as a whole, federal program as a whole, you know, between, call it 2011 and 2021 or 2022, like, the prevailing interest rate, fixed rate, you know, tended to be somewhere between 3.4% and 5%. I think the number was actually 5.05%. You know, the standard term in a federal loan is 10 years, but in practice, most people term that out significantly longer. It's not uncommon to see loans termed out to 20 years through the use of different programs.
As of the second quarter of 2021, somewhere between 30%-35% of all federal loan borrowers were already in an income-driven or income-based repayment program. We actually expect that number to go up with the rulemaking that the Biden administration is proposing around, you know, the new IDR sort of programs out there today. You know, you can do, or one can do, you know, whatever sensitivities you want on that. I think what's important to note is when you sort of term out, like, what's that payment? You know, that payment ends up, for most borrowers, being measured in the hundreds of dollars a month, you know, which is, you know, meaningful and important, but it's not the sort of eye-popping number that I think some people, you know, sort of instinctively fear.
Now, of course, you know, you can have those averages, and you can have, you know, people who are in more extreme positions. The real question is not, does this pose sort of a broad risk? What are the sort of pockets of exposure where there's really a greater need? I think, you know, our view is a couplefold on this. One, this is where the traditional income-based or income-driven repayment programs are so important, and I think the new federal rulemaking is so important. Because the very same customers that would likely be more impacted are the very same ones who are likely to qualify for, you know, some of these new programs or better benefits under these newer programs. That's, you know, I think, thought number one. Secondly, we're giving a lot of thought to this.
You know, we are actively assessing and analyzing the outstanding balances of our customers and adopting outreach and sort of proactive strategies to help those customers understand the implications, understand their options. By the way, beyond just what Sallie Mae does. That's something that we will start to kick off here, this fall, especially as the rulemaking and the specific timing and patterns come more into focus. Obviously, with the debt bill last week, we got a lot more interest or a lot more information on when precisely the loan moratorium and the payment moratorium would end, so we can begin to plan appropriately for that.
I think at the end of the day, you know, our view has always been and continues to be, you know, that this has been a, you know, a, you know, a modest benefit to our customers. We suspect, you know, the impact will be, you know, sort of, you know, a modest headwind to some customers, but probably largely offset by some of the enhanced Income-Based Repayment options that are out there. It's something we're watching, we're monitoring, but, you know, at the end of the day, we think it's, you know, it is a manageable risk for us going forward.
Is there anything we should be looking out for? I think you just mentioned some of the outreach you're gonna be doing. Is there anything we should be thinking about in terms of impacts or benefits to the business, or?
You know, I think we will have a lot more to say about that when we get into sort of the end of the second quarter and early third quarter. Again, I'm not trying to sidestep the issue, but the truth is, we don't even know exactly what the new income-based repayment program is going to be. There's a lot of talk right now from the administration around phase-in and, you know, sort of, various programs to help mute the impact of the start of repayment. Those haven't been fully defined yet. You know, I think we look forward to greater information coming out of the administration on the exact nature of these impacts, and I think from there, it will be easier for us to set up some specific operational and outcomes-based milestones.
Yeah, I mean, there's still a lot of complexity to the issue, right? We still have to see what the Supreme Court says on forgiveness. We have to see whether the proposal comes out. You have all these borrowers who haven't, you know, reset their current IDRs yet, so, still a lot to be looking out for there.
Yeah, I think, Jeff, you know, the other thing I would add is it also gets to, you know, your best, you know, your best safeguard during times like this is a well underwritten loan in the first place.
Yeah.
You know, you know, we continue to have a lot of confidence in our underwriting standards. We continue to have a lot of confidence in the prevalence of, you know, cosigner rates, among our borrowers. We continue to have a lot of confidence in the programs we've developed and will continue to develop. I think, you know, lastly, we continue to have a lot of confidence in the payment hierarchy that we've created with our customers. You know, it was not an accident that, you know, our payments, our customers have been back in full payment, since effectively August of 2020, approximately. We think reestablishing that payment hierarchy early is also another thing that will bode well for us going forward.
We spent a lot of time on credit. Maybe we switch it up a little bit here, competition.
Yeah.
Can you talk a little bit about what you're seeing out there from your peers? You know, you obviously have a pretty dominant share of the market right now, 58%. I think there's been a few other companies out there that are starting to make inroads. Just talk a little bit about what you're seeing on that front.
Yeah, sure. Look, I think overall, I would describe the sort of competitive nature of the private student lending space as, you know, kind of appropriately and modestly competitive. There are really good competitors out there, and we have, you know, we have a lot of respect for the likes of Discover and Citizens and, you know, College Ave and others. They've had great, you know, in-school businesses and built great in-school businesses for a lot of years. There's a lot we can learn from, you know, a number of the startups out there that are, you know, employing new tactics and new strategies. You know, interestingly, we consider the aggregators to be, you know, both a partner, but also to a certain extent, a, you know, a competitor in this space.
You know, at the end of the day, we work closely with them. We've bought one of them recently, and we expect we will continue to have, you know, to use an overused expression, a little bit of a, you know, sort of a frenemy relationship with many of them as our interests are aligned, but not perfectly aligned. You know, I think in that overall context, you know, we would expect the competitive intensity to, you know, probably stay about where it is. You know, it's a hard business to get into for smaller scale players. You know, if you think about it's a long, you know, number of years where people are not making full P&I payments 'cause they're in school.
It's therefore, a long time to really prove the validity of your underwriting models and sort of the strength of the assets that you're generating. That creates, I think, real funding and sort of growth challenges for new entrants. I think, you know, for our existing incumbent competitors, you know, the likes of Citizens and Discover, they continue to do a great job. I think, we love the fact that, you know, we're a monoline, and we wake up every day thinking about nothing but how do we take great care of our customers and, you know, earn profits for our investors in the student lending space. You know, I sense from time to time that that gives us, that focus gives us a little bit of an advantage.
You know, I think at the end of the day, you know, we sort of expect that intensity to continue. You know, we run our business every day as if it's going to be, you know, more competitive next year than it is this year. You know, we do that through a focus on unit costs and, you know, continuing to build incredibly strong relationships with schools and take great care of our customers.
One of the things that's unique about your model as an in-school originator, is you've also got the hybrid gain-on-sale model.
Mm-hmm.
Can you talk a little bit about the $2 billion you did recently, some color on that, other than what you've already said, and what we should be thinking about as you look to finish up that $3 billion guide for the year?
Yeah, maybe I'll even take, sort of, you know, a half a step, even further back. You know, since I became CEO three years ago, we've been very enthusiastic about, you know, sort of this hybrid model, but we've always described it as sort of a medium-term model. I think what we realized a long time ago was for us to grow our balance sheet, fully fund our CECL obligations, and return capital to shareholders, we couldn't do as much of all three of those things as we wanted. We didn't have a choice but to fund CECL, and I made the choice that we didn't have a choice but to return, you know, capital aggressively to shareholders.
The whole idea of every year selling a representative sample of our loans, maintaining a flat-ish balance sheet, I think is the technical term we've used over the last few years, and really taking advantage of this arbitrage program, like, that has been a great strategy for us. If you haven't done it already, what I would encourage you to do is to actually start to model out what Sallie Mae looks like post January of 2025. Because that's the point where we make our last CECL catch-up payment. You know, if you start to even assume, you know, sort of just the continuation of historic norms, the patterns of what the business can do from a balance sheet growth and/or probably both, a capital return perspective is pretty interesting, and at least for me, pretty exciting.
I would put that all into context, and I would, you know, sort of say our commitment to strong capital allocation and capital return is, you know, going to be a forever thing while I'm the CEO of this company. I can't commit multi-years out on exactly how we'll do that. It's a key part of what we think makes us a really interesting place. In that context, we were thrilled to sell $2 billion already this year of loans. That was a well-subscribed auction. I closed, I think, May 1st or May 2nd. As I think we've previously announced, it was at prices that was highly consistent with what we had put into our guidance, we felt great about that.
Our plan is to sell another $1 billion in the third quarter of this year. As we continue to look at the sort of market conditions, you know, there's some that are a smidge better, there's some that are a smidge worse. You know, we haven't seen anything that would lead us to believe that the market conditions aren't, you know, sort of comparably receptive to, you know, doing another $1 billion in the third quarter. I think we were delighted with the quality of the auction we saw, and really knowledgeable, and thoughtful, and rigorous market participants who came in to be a part of that. I hope to see many of those same faces and more come the third quarter.
Sounds like everything's on track at this point in.
Yeah. Again, I'll never try to predict the outcome of an auction. I think my general counsel would come up here on stage and drag me off if I did. Certainly, you know, when we look at the things that tend to drive, you know, results, what's going on with rates, what's going on with macro credit spreads, what's going on with sort of Sallie Mae specific factors, things like our credit performance or consolidation performance, you know, and then just what's the overall demand for fixed income type, you know, product in the marketplace. I think certainly as you go down the list there's no reason to believe that, you know, collectively, those things aren't as healthy or healthier than they were, you know, a month ago when we did the last deal.
We have less than 10 minutes left. Just want to make sure the audience has an opportunity to ask any questions. If you have any questions, feel free to ask. If not, I will continue on. In terms of the buybacks.
Yeah
That you're also talking about this year, has the shift in your share price of late, I know it's been pretty volatile.
Yeah.
Has that shifted your preference or, you know, still on the plan?
Yeah. A great question. Just as background, and I think we've covered this in a couple of forums, but, you know, we tend to sort of look at the decision to buy back or not buy back through a couple of lenses. First of all, we look, you know, in almost a grid kind of way at the relationship between, you know, equity price and really sort of growth multiple, you know, EPS multiple, you know, and prevailing loan premium. We make, you know, sort of through that grid analytics, you know, a determination of, you know, does the arbitrage exist, right? Do we believe that the debt buyers, the loan buyers, are valuing the assets more than the equity buyers? That's sort of kind of consideration number one.
We have literally on that grid, green, yellow, and red zones. What Steve and I have said a couple of times is every deal that we've done has been well within that green zone, including the most recent one. We also, every sale, look at the premium, and we compare it to our own internal cash flow models for the loans that we're selling. Because the external arbitrage may exist, but we would think twice if we felt like we were selling a loan at an inherent discount to our estimate of economic value. I will tell you, every loan sale that we've done has been at a premium that is north of sort of our internal estimates of that as well. That's the way that we will continue to look at that.
You know, again, could there be a case where, you know, stock price got so high that it no longer made sense? Absolutely. That's a, that's a spot on the grid. We were not close to that with the last loan sale. If we did get to that point, just understand, we would think creatively about other ways to return capital in that moment. You know, return of capital is a core part of our strategy, even if the exact form and mechanism by which we do it would change.
Got it. Just switching to NIM. NIM has been very robust recently. How are you positioning yourself for the rate outlook from here?
Yeah.
What happens if rates stay higher for longer, or, you know, the Fed actually comes through and cuts more aggressively?
Yeah, this is a really easy question for me, and it's probably a boring answer for all of you, which is we work hard to be as match funded and as balanced as we can at originations. We do, you know, a full, you know, sort of, you know, equity discussion in our various disclosures. I think we walk through, you know, sort of our asset liability sensitivity positions. I think what we've shown really consistently for all the quarters that I've been here is, you know, there may be periods where we're slightly asset sensitive, there may be periods where we're slightly liability sensitive, but it's always within a very, very, very narrow band.
Especially when you add on top of it expected future loan sales, which we can't commit to, but, you know, I think are a reasonable part of our strategy, that tends to bring it even more back into sort of straight down the middle alignment. You know, with an asset that has a six-year average life, we actually can match fund pretty well, both through securitizations, but also through, you know, the retail deposit in other markets, and we work hard for that. At the end of the day, you know, my view is our core competency is originating, and booking, and servicing really high ROE loans that help our students, you know, our customers fulfill the dream of higher education.
You know, our core competency is not taking a proprietary position on interest rate movements and sort of adjusting our balance sheet or funding strategy as a result. We would expect to continue to be match funded, and as a result, I think you should expect, you know, NIM to be, you know, on an annualized basis, pretty consistent. There is, you know, sort of what I'll call quarter-to-quarter, month-to-month volatility in our NIM, but it's not typically driven by investment decision. It's typically driven by us building liquidity for a big disbursement period, you know, and/or the immediate after-effects of a loan sale where we haven't fully deployed that capital. It's not so much on the rate as it is on the sort of quantity of dollars that we're managing.
Related to the NIM, can you give us an update on your funding? Anything you've been seeing on deposit flows. I know you guys were able to grow, and you had some stable deposits in April. Just maybe a quick update there.
Yeah, look, we've again, really enjoyed being boring over the course of the last, you know, two or three months. I think when we started this little, sort of mini financial crisis, we were 3% uninsured deposits. We're now 2% uninsured deposits. We've had, you know, a little bit of runoff on the uninsured side, as you would expect. You know, people are optimizing and rightsizing their titling and, you know, sort of disbursements of funds. Actually, as you said, during that time, we actually modestly grew our deposit book, as more dollars came in than went out through that kind of reoptimization.
Over the last couple of months, we've seen a small decline in our deposit, base, all very much tied to, you know, loan sale and an expected runoff of, some maturing brokered CDs and, you know, a new securitization deal. Like, all of that was a part of that liquidity plan. I would describe our overall deposit position as really quite stable.
How should we be thinking about your private education loan yield trajectory from here? Is there any kind of natural cap we should be thinking about before you start to see maybe some impact to your origination demand or the credit quality of that underlying consumer over time?
Yeah, you're talking about originations here?
Yeah, the yield on your origination.
Oh, the yield on originations.
Yeah.
You know, look, this comes back to first of all, I think sort of the competitive marketplace. You know, we do not set price. We're part of, you know, a reasonably competitive set. You know, every day we've got to think about what our competitors are doing, and if we're dramatically outside the market, pricing-wise, you know, we will absolutely see within bounds, you know, volume move away from us. While we have really nice share, you know, there's enough really strong competitors out there that, you know, that sort of pricing competition is a, you know, is a real part of what we do. With that said, you know, I think there's a whole bunch of different ways that we seek to stretch margin and profitability.
You know, we are a 60%-70% fixed cost business. Obviously there's the potential for huge operating leverage, especially during non-inflationary times, to, you know, to drive outsized margin growth and earnings growth with, you know, something that's less than that in terms of originations growth. You know, anything that we can do to, you know, enhance our overall credit performance is, you know, a net positive. You know, and then on the margin, anything that we can do to drive broader efficiency. I'm not sure it would come from the pricing side, but I think as a scale player, there's always the opportunity, but I would not expect margins to blow out from here.
You know, I would certainly hope we can, at the very least, maintain and, you know, maybe slightly on the margin, enhance, margins just through greater efficiency going forward.
Not to put you on the spot with about a minute left, but anything you feel like maybe you're missing from the Sallie Mae offering today? I know you recently exited credit card, but any opportunities or more small bolt-on opportunities?
Yeah, less from the Sallie Mae offering. Like, I, you know, if you think about what we've said of our strategy, we want to really, you know, innovate to drive the performance of our core business. You know, we did a small acquisition last year with Nitro College. That was really successful in terms of giving us a bunch of new, sort of marketing capabilities in our arsenal. By the way, it also dramatically increased the number of customers that we had a relationship with. We're up to now 50% or so of all college-bound families have a customer-initiated relationship with the combined franchise. That's a great thing. I think we would look for other opportunities for us to do that kind of very small-scale acquisition that's highly accretive to our core business.
If it gives us greater customer connection that we might be able to monetize at some point down the road through other means, great. People should really expect for the, for the near term, we're focused on driving every bit of profitability out of the core as we can.
All right, that's all the time we have. Thanks, Jon, for joining us.
Yeah, thank you. Appreciate it, Jeff.
Take care.
Yeah.