The financial industry is in a familiar place: Legacy banks are being challenged by technologically savvy, disruptive upstarts. Is the banking world about to be turned upside down?

Veteran banking analyst and writer John Maxfield doesn’t think so. Maxfield is the executive director of the Wilmers Integrity Prize, named after Robert Wilmers, the longtime CEO of MMT Bank. He was formerly the editor-in-chief for Bank Director magazine.

Maxfield joined 7investing lead advisor Matthew Cochrane to take a tour of the financial industry, starting with a look at whether neobanks, such as Chime, are a product of VC-backed cheap capital or a legitimate threat to legacy banks. While acknowledging technology is playing a disruptive role in the banking industry overall, Maxfield believes big banks especially have the firepower to keep pace in the rapidly changing industry while wondering if the smaller upstarts can even achieve profitability.

Next, Maxfield and Cochrane explore the recent explosion in M&A activity in the banking space. In 2019, SunTrust came together with BB&T in a merger of equals, creating Truist Financial Corp (NYSE:TFC), the 6th largest bank in the U.S. by assets. This was followed last June by PNC Financial Services Group (NYSE:PNC) completing its $11.5B acquisition of BBVA USA, making it one of the largest U.S. commercial banks. Banking consolidation is a phenomenon that Maxfield traces back to the early 1980s when Congress allowed banks to acquire financial institutions in other states. While Maxfield believes this trend will stay intact, he questions whether the majority of such deals create value for shareholders.

Of course, no discussion about the banking space is complete without a tour of the big four banks dominating the domestic landscape: Bank of America (NYSE:BAC), Citigroup (NYSE:C), JPMorgan Chase (NYSE:JPM), and Wells Fargo (NYSE:WFC).

Finally, Maxfield explains why Triumph Bancorp (NASDAQ:TBK) is a hidden gem, an under-the-radar community bank based in Dallas, TX, attempting an ambitious project in a big industry!

Transcript

Matt Cochrane  00:00

Greetings fellow investors. I’m Matthew Cochrane, a lead advisor at 7investing where it is our mission to empower you to invest in your future. We do that by providing monthly stock recommendations to our premium members and educational content that is freely available to everyone.

Matt Cochrane  00:16

Listeners. Today I am very excited to introduce John Maxfield. Mr. Maxfield is a long time writer in the banking space. He used to be the editor in chief for bank director magazine and he’s currently the Executive Director of the Wilmers Integrity Prize. Named after Robert Wilmers, the longtime CEO of M&T Bank (NYSE: MTB).

Matt Cochrane  00:35

His work has been widely syndicated to national publications. And maybe the best way to frame this conversation is that when I was a younger lad, not young, but younger, and starting out in my writing career, one of my editors said, Oh, if you’re interested in covering financials and fintech, you should follow John Maxfield. And that was excellent advice. John is one of the best banking analyst I know. And I’m very excited for our conversation today. We’re gonna talk about banks, investing in banks, and financials and FinTech companies. John, welcome to the show.

John Maxfield  01:08

Thanks so much Matt, that was too kind. But it’s a pleasure, we’ve worked together for so long and we go back. Our investing, or like our writing and kind of analysis journeys kind of started the same place with the Motley Fool. So it’s so fun that now you’ve kind of gone off, you’re doing different stuff. I’ve gone off and doing different stuff, and it’s great to reconnect.

Matt Cochrane  01:28

It really is, it really is, yeah. And I’m always excited to reconnect with people my career like intersected with earlier on. But I’m really excited to talk about today’s conversation because I consider myself probably more of a generalist when it comes to investing. But if I had to pick a space where I really started, it is financial and FinTech, financial technology. So I’m really excited about this conversation.

Matt Cochrane  01:57

So let’s just start there, are banks facing threats from disruptive upstarts in banking? Last year, JPMorgan Chase CEO, Jamie Dimon (NYSE: JPM) when he released his annual letter, it’s always a good read. But he had, some specific things to say about FinTech and banks. And one, the regulatory landscape is unfair to big banks, it just gives an advantage to FinTech and I don’t want to go through all of them. But banks have higher capital requirements, they are much more expensive liquidity retirement requirements. And they can’t lend out all the deposits they take in, they have to deposit, and banks must be FDIC insured, and all that costs banks a lot of money.

Matt Cochrane  02:44

And Dimon was saying like this is, this is an unfair advantage for FinTechs. And he also said Fintech is here to stay. And he’s like, banks are going to have to invest heavily in technology, and he called out the big tech companies, like the the Apple’s (NASDAQ: AAPL), the Facebook’s (NASDAQ: FB) the Googles (NASDAQ: GOOGL) of the world, and Walmart (NYSE: WMT), too. And, and of course, all the other smaller, disruptive upstarts. So, let’s just big picture, John, what’s going on?

John Maxfield  03:13

Okay, so let me answer that question like this. It’s a threat. But it’s always been a threat. And that doesn’t necessarily mean the banks are going away. And let me illustrate that with a story. So in the 1930’s, there was a bank out in California. California had. Because California is such a big and thriving state economically, it’s always had a number of really big, important banks. And there was a bank called Union Bank. And Union Bank came out with this like revolutionary technology, I can’t remember exactly what year it was, I think was like 1934, or something like that, 1935.

John Maxfield  03:51

And that revolutionary technology was called banking by mail. And what banking by mail allowed their customers to do was basically put a deposit in the US Postal Service. The Postal Service would deliver it to Union Bank, and by the 1950’s 50% of its deposits were being made that way. And so if you think about, you’re in the middle of 1950s, you’re an analyst or something like that, or a commentator, and you say, Oh my God, like this revolutionary new technology, there’s going to be no room for traditional banks in the future.

John Maxfield  04:25

Well, now, if you go and you look at. Certainly not branch banking, Right? Well, then if you go and you look at the trend in branch proliferation in the United States since 1954, it’s gone from 6000 to 80,000. Now it’s coming back down. But the point is that this is something that we know because this is just kind of like ingrained in us in terms of our investment philosophy. You just have to take everything into consideration and be humble about knowing, and what you do and cannot know about the future. So that’s one kind of caveat around all this.

John Maxfield  05:00

Now what’s important to appreciate, though, is that is not to say that technology is not important, okay? But technology is important in banking for a reason that a lot of people miss. A lot of people when you go around to these FinTechs, and you talk to them. It’s just all about technology, banks are slow to evolve and all that. It’s all technology, technology technology.

John Maxfield  05:20

But if you actually dig into the facts and kind of the story of banking over the past 40 years, what you realize is that technology is an answer to something, not to something itself. So the something itself is that we have this crisis in the 1970’s. This interest rate crisis that spilled over into the 1980’s that led to a whole bunch of regulatory changes. One of the regulatory changes that happened in that period was that banks were allowed to have branches and bank over interstate lines. So that allowed all this consolidation to happen.

Matt Cochrane  05:53

And explosion, right? I mean, since then, like just an explosion, right?

John Maxfield  05:57

An explosion of consolidation, Right? So you have like 15,000-16,000 banks in 1984 was the peak. We have like less than 5000 commercial banks today. So it’s like two thirds of the banks have gone. And it’s that trend is still going. Right. So what happened was you go into the financial crisis, so this consolidation cycle is going going, going, going going. It goes into the financial crisis, you have Wells Fargo (NYSE: WFC), buy Wachovia, you have Bank of America (NYSE: BAC) makes some acquisitions right before the financial crisis, you have JP Morgan buy Washington Mutual, which had failed.

John Maxfield  06:27

That’s important, because that put all three of those banks at or above the 10% deposit threshold where they’re controlling 10% of the nation’s deposits. Okay. So they go back to that regulation that was passed, that allowed banks to expand over interstate lines and grow. In that regulation, in that law, it says any bank that gets over 10% of market share of domestic deposits can no longer make acquisitions.

John Maxfield  06:49

And so what you found is that after the financial crisis, you have these three humongous banks that can no longer grow through acquisition. So they’re looking around saying Oh, my God, well, how are we going to grow? They went to technology, because it was right around the same time that the iPhone came out, right? So these banks, they started pouring all this money into that. Not because like they’re just enamored with technology, but because technology is the only way these big ones can grow.

John Maxfield  07:15

And in an industry that is so heavily competitive, and so heavily commoditized. Because a dollar is a dollar is a dollar is a dollar, right? Doesn’t matter. A dollar is the ultimate commodity. In an industry like that, when you have 30% of the industry that’s investing heavily in this new stuff that has a ripple effect across the entire industry. And so technology is important, but as a solution to a problem, not the problem itself. But it’s just banks have to adopt to this and banks are adopting to this.

Matt Cochrane  07:48

So you mentioned in the 70’s, or since the 70’s, we’ve had this explosion of bank branches. And now you have these big banks at the top who cannot make any more acquisitions because of these new regulations that have been put in place. And so they’re investing heavily in technology. Are the regional banks. I mean, we have dozens and dozens of regional banks. You would know more than I would. But are these regional banks now in trouble? Maybe I’m wrong, so correct me, but I don’t know if expanding your your branch footprint right now is like the best strategy for growth. In fact, I would say that’s probably not the best strategy for growth. And these big banks have a lot of firepower. Is that putting a pinch on these regional banks?

John Maxfield  08:43

So let me start to answer that by starting here. So I was talking to Andy Sisir. Andy is the chairman and CEO of US Bancorp (NYSE: USB) US Bancorp is one of the finest financial institutions in this country.

Matt Cochrane  08:57

Great reputation

John Maxfield  08:58

Great reputation, totally consistent performance, great stock performance, great financial performance, all that kind of stuff. And this was a couple years ago, and he was telling me. Yeah, I think it was two years ago. And Andy was telling me that. So every year they do a retreat with their board members and their executive team. And typically, on one of the slides, they would show Bancorp vis-a-vis its competitors. And there’s competitors JP Morgan, PNC (NYSE: PNC), Bank of America, Wells, M&T Bank, those types of banks. He says, two or three years ago, they started adding a new slide. And on that new slide, they put Google, Amazon (NASDAQ: AMZN), Facebook.

John Maxfield  09:37

And so when a guy like Andy Sisir, who’s been there and done that in banking, and he’s just a phenomenally intelligent guy, is saying that that’s kind of where the threat lies. Certainly there’s a threat, but US Bank, the thing that you have to keep in mind is that the head of. This guy named Bill Demchak,  Bill Demchak is the Chairman and CEO of PNC.  PNC Financial is another financial fantastic institution.

John Maxfield  10:06

And somebody asked him. Somebody brought up on a conference call, Oh, do you think that like banks gonna go by the wayside because of FinTechs. And Demchak, he said look like, we have enough money to make anything that any FinTech company is making, and we could do it in two weeks.

John Maxfield  10:22

So you think like Jamie Dimon, he’s pouring $12 billion in the FinTech space. I mean, they’re so far out and so much better funded than all these. So these banks have the opportunity. What you’ll find, my guess is that, these banks will bring these FinTechs into the fold, and it will stop looking like an adversary. In fact, we’re already seeing that. The kind of narrative and the language that the FinTechs are using, the banks are using relative to each other is already changing.

John Maxfield  10:48

Where now the FinTechs are saying okay, these guys aren’t a big threat. Now they’re our customer. Now we’re kind of we’re all allies. Because the thing that banks control, and this is kind of to get back to the point of the question, is that they control a bank charter. If you look at all the FinTechs, unless your picks and shovels type of situation, helping banks decipher data and analyze data and doing that kind of stuff. Unless your picks and shovels, all those business models of the neobanks and stuff like that. There is no glide, there is no possible, there’s no path to profitability.

John Maxfield  11:20

You have your Chime’s and stuff like that, they’re getting a lot of attention. But like you can’t, a business model predicated exclusively on interchange income just doesn’t work in the financial space. You need to be able to own the deposits. And to own the deposits, you gotta have a charter. And so the charter is still incredibly important. And it does put these big competitive barriers around the banking industry, that still the bankers really benefit from.

Matt Cochrane  11:48

So let’s double down on that for a second. Because we’ve seen a lot of FinTech companies are going for charters. We see Square (NYSE: SQ) has done this. SoFi (NASDAQ: SOFI) I think they just got approved for their charter a couple weeks ago. Why are bank charters? You said like it owns the deposit, can you explain that more? Like why those bank charters are so important?

John Maxfield  12:11

Okay, so like the Holy Grail in finance, okay. Are a funding source that is guaranteed by the federal government of the United States of America. Imagine having a hedge fund, where you have to pay 0% on your funds, right? And the government backs them up, and you can invest those in something that earns four, five, six, seven percent in assets.

Matt Cochrane  12:39

It’s the good business model.

John Maxfield  12:42

Yeah, it’s a great business model, exactly.

Matt Cochrane  12:46

Now is that, when you say the US government guarantees it, is that what we just commonly call FDIC insured? Is that what we’re talking about?

John Maxfield  12:52

Exactly

Matt Cochrane  12:52

Okay. All right. So like if Square and SoFi, like winning these bank charters, so now, when they take deposits. By getting a bank charter now that money is FDIC insured?

John Maxfield  13:07

That’s exactly right. That’s right.

John Maxfield  13:09

Now, what’s important to appreciate is that not all deposits are treated equally. You have demand deposits, that’s like the stuff that’s in your checking account. Okay, so there’s no restrictions around that. You can pull out that money, 100 transactions a month, 200 transactions a month, 10 transactions, whatever you want.

John Maxfield  13:25

Then you have savings deposits, typically, there are restrictions around savings deposits, so you can only pull, maybe make 10 withdrawals a month, five withdrawals a month account. But you earn a higher interest rate, because it’s a stabler source of funds for banks. So they’ll pay a little bit more for that.

John Maxfield  13:39

Then you have time deposits. So those are certificates of deposits. fYou pay a lot more. You’re basically locking that money away. So the bank knows, okay, Matt put $100,000 in a CD for five years, we know we have access to that money for five years, he can’t pull it out. So there’s all these different layers.

John Maxfield  13:57

And then there’s broker deposits. So broker deposits are where a bank will go out and buy deposits from another bank, or from another entity. And so what you’ll see is that the deposit insurance is important, but the true, true Holy Grail are those demand deposits where you’re not paying any interest on it.

John Maxfield  14:16

And so when you have these. The issue that the FinTechs run into is that on the liability side of the balance sheet, which is where your deposits sit if you’re a bank. They’re going to have to pay more because they don’t have a bunch of branches. So they’re just going to have to pay a higher interest rate. So they’re gonna be like out basically, paying a 1.5%, 2% right now, stuff like that, right? High for deposits, right? Because that’s the only way they can set these deposits in. Okay. The other problem is that on the asset side of the balance sheet for bank, that’s where their loan sits. A loan as an asset to a bank. Right.

John Maxfield  14:54

And so what a bank can do is, they know their borrowers in their in their area, they know all the commercial buildings, they know all the business people, they know the neighborhoods for the mortgages and stuff like that. So you can say, oh, that’s a good asset, that’s a good asset, that’s a good commercial real estate loan, that’s a good business to get behind with a loan, that’s a good neighborhood to like make a mortgage in. So you can control the quality of your assets.

John Maxfield  15:16

The problem with, if you don’t have that kind of exposure, you don’t have control over the quality of your assets on the asset side your balance sheet. And because banks are leveraged 10 to 1 on average, your margin for error is really, really, really small. And so you really have to control the asset side of your balance sheet to make sure you’re not doing something even marginally stupid that could bring your institution under.

John Maxfield  15:40

And let me just give you a number on that to drive this home. So Washington Mutual was the largest bank failure in the history of United States. It failed, it was seized by the FDIC, or seized by regulators, in October of 2008. A $300 billion institution, okay? If you look at its non-performing loan ratio, or its non-performing asset ratio. So you take all of its assets, and you look at the ones that we’re not, people weren’t making their monthly payments on. Where businesses weren’t making the monthly payments on, it was only 2.6%. That means that they got a 96.4% on their test, and they still failed. That’s how slim the margin for error is in the banking space.

Matt Cochrane  16:24

Now, isn’t that always the knock? Or one of the knocks I hear against banks, John, is that they can do well, for a long time. But eventually they get in trouble by doing stupid things, because their margin of error is so slim. How do you, when you buy a bank, especially for individual investors, how can you foresee this? It seems to me like management might be more important in banking than almost any other industry? But I mean, how do you see that? How can individual investors know, if this if the margin of error is that slim? How can they avoid, like being caught up in like that boom, bust cycle?

John Maxfield  17:04

Okay, so the cliche that like past performance is no guarantee of future results, right? That’s true. But if you’re going to make a decision, you got to make a decision on something, right? So what you want to do is you want to look at past performance, but you don’t want to just look at past performance. You want to look at past performance through a cycle. You want to say, the litmus test when I go, cause I spend a lot of time with the folks who run these banks. And so I do a lot of preparation before I go and meet up with them. And one of the first things, one of my litmus tests is, how did they perform in the 2008 financial crisis? Like what was their return on assets? What was their return on equity?

John Maxfield  17:47

And what you’ll find is that the really good banks actually did a lot better because the crisis. And so then once you figure out okay, do these people know what, do these people know how to deal with a situation where things get hairy? But then you got to make sure that the management, that lineage, still holds true. That there hasn’t been a break in the lineage for some reason. Like a BB&T. BB&T is this incredible bank, SunTrust comes in, they do this merger of equals (NYSE: TFC) now it’s being run by the former SunTrust CEO. SunTrust didn’t do very well in the financial crisis. So that’s a break in the lineage. Right?

John Maxfield  18:18

Let me tell you, let me even tell you a better story that will kind of bring it home, Okay. There’s a bank in Abilene, Texas. Have you been to Abilene Texas ever?

Matt Cochrane  18:28

I have not.

John Maxfield  18:29

Let’s just say that one of the biggest events in that part of, its West Texas. One of the biggest events in that part of the country is the Sweetwater Rattlesnake Roundup. It’s like 50,000 rattlesnakes every year. Sweetwater is like 10 or 15, or it is close to Abilene. So that gives you a sense.

Matt Cochrane  18:48

I’m not sure what you’re selling John.

John Maxfield  18:59

The KBW regional banking index, which is, I can’t remember what the exact bounds are, it’s like maybe $6 to $60 billion in assets or something like that. And you rank them by their valuation, their price to book value, their price to tangible book value. What you’ll see is that there’s one that is like way out there, like two, three standard deviations out from everybody else. And that’s First Financial Bankshares (NASDAQ: FFIN).

John Maxfield  19:24

First Financial is based in Abilene, Texas. Okay. And you say, why is it so highly valued? And so you say, well, it must be so highly valued because it earns the highest return on assets. Right? Because isn’t valuation a function of earnings? The issue is that you rank First Financial based on its profitability, and it doesn’t rank first, it ranks like fourth.

John Maxfield  19:48

Well, maybe it’s because it’s the most efficient, same situation. It’s efficient, but it ranks like fourth out of 50 or something, third out of 50, if you’re looking at like three to five year averages, okay. What you find is that if you take the standard deviation of its return on equity. So how much return on equity goes up and down on a yearly basis through a full cycle? So if you take it all the way back to 2005, First Financial ranks number one.

John Maxfield  20:15

And so there’s this theory in finance called variance strain. And variance strain is this idea that if you have two similarly situated portfolios that earn the same annual average return. Okay, so let’s say they both average a 5% return a year, the one with less variation, on a year to year basis, will earn a higher return.

John Maxfield  20:39

And so when I think of, if you want to find a really good bank, you want to find one that is just a rock solid, consistent performance. And so that’s why you want to look at how did they perform? Or did they lose money in the last crisis? Because that’s where you really get into trouble.

Matt Cochrane  20:58

Gotcha. So we talked we talked a little about M&A activity. And you you brought up SunTrust and BB&T merging. So let’s talk about that. Last June, PNC completed a $11.5 billion dollar acquisition of BBVA USA, I think that made it like the fifth or sixth largest US commercial bank. And in 2019, the year before, like we talked about SunTrust and BB&T came together in a merger of equals. And that created one of the top banks in the in the US by assets. Why are we seeing this consolidation in the banking industry? And should we expect to see more M&A deals in the years to come?

John Maxfield  21:42

So we’ve been seeing this, and we talked about this the beginning, Matt. I mean, we’ve been seeing this consolidation, since the regulator’s and legislators opened that up. And we will continue to see consolidation. And you see that consolidation because this is a highly commoditized industry. And so scale matters. Right? And, but let me be a cynic. I don’t like a lot of the deals that have been announced recently. Two thirds of bank deals erode value, as opposed to create it, as a general rule.

Matt Cochrane  22:19

That’s interesting, because it seems like scale is so important in this industry. So why why is that?

John Maxfield  22:27

So scale is important. But it’s also not necessarily totally. I mean, there’s two ways to look at it. But here’s the thing. It’s not. All scale isn’t equal. Right? If you gain scale, by buying a competitor at half of book value, that’s not the same as gaining scale by buying a competitor two times book value.

John Maxfield  22:48

You want the people who have the patience to sit and wait, and then make a killing when the opportunity presents itself. And so when you look at. If you rank every publicly traded bank in the United States by all time total shareholder return, going back to when all these banks went public, their IPOs. For a long time, there were these two banks that stood out among all the others. They’re like drafts among Shetland ponies. They’re so far out so far above in terms of how much value they have created. The first is M&T Bank, a regional bank based in Buffalo, New York. The second is a bank called Glacier Bancorp (NYSE: GBCI), which is a relatively small regional bank based in Kalispell, Montana. Which I don’t know, have you ever been to Glacier National Park ever, Matt?

Matt Cochrane  23:34

We’re actually, well no, I’ve never been to Glacier but we’re actually going to Yellowstone as a family this summer. So that’s about as close as I can get.

John Maxfield  23:41

Well, yeah, Yellowstone is amazing. Tetons are amazing. Glacier is like on the same par. I mean, Glacier, like you go to this valley and Glacier and you’re Oh, my God. It’s like I had no idea this thing was here. And I grew up in like Wyoming and Colorado. I was like this is place is amazing. Well, that’s where Kalispell is. It’s the gateway, it promotes itself as the gateway to Glacier National Park.

John Maxfield  24:01

So then you say, why did these two banks do so well? And what you find is that first, they run really good operations. And so what I mean by running a really good operation is that they lead with efficiency. Because if you’re running an efficient operation, that leaves more room for you to be competitive on the asset side of your balance sheet by making loans. You can make loans at better terms and then get better customers. So then when the downturn happens you’re not having the loss, you’re not taking those losses on your loan portfolio. Okay?

John Maxfield  24:30

So they’re running these really good operations, but then what they’re really good at is. Have you read the book, The Outsiders about capital allocation?

Matt Cochrane  24:38

Yes, I have. Yes.

John Maxfield  24:40

That’s what they’re really good at. There’s this guy named Robert Wilmers, and a guy named Mick Blodnick. Mick was at Glacier, Bob Wilmers was at M&T. They were just, they were so phenomenal at buying other institutions. So they would just. The way Wilmers did it was, he would run this really good operation. Wait till something happened typically in the market, and then go in and buy a bank for like nothing. Maybe even pick them up from the FDIC, they buy for nothing.

John Maxfield  25:08

So you’d get all this additional growth basically for free. And the other. What Nick did is he would go in and buy a bank. But then he had this model, where he would then just allow them, he’d give them all these additional resources, all these additional banks he bought throughout the Rocky Mountain region. He’d give them all these additional resources, all this additional support, and then that would allow their revenue to to shoot way higher. So what you want is that. The ideal situation with a bank is you want a bank that is efficient, that has a history of making consistent good loans, and then is making an acquisitions, but doing it for shareholders purpose, not just to increase the salary of the CEO, which is the rule, not the exception.

Matt Cochrane  25:56

All right. So let’s talk about the big banks, right? Because these are the ones that by far, I feel like, get the most attention from individual investors. And so I’m talking about like JP Morgan Chase, I’m talking about Bank of America, Wells Fargo and Citibank (NYSE: C). And, I don’t know, if you want, if we should do an overview, or just tackle them one by one kind of quickly. But I do think there’s interesting nuance here between these banks. So should we go through them one by one, or do an overview, what’s the best way to tackle that?

John Maxfield  26:35

However, you want to do it.

Matt Cochrane  26:36

On the fly, folks!

Matt Cochrane  26:39

So let’s talk about JP Morgan. I’m not invested in any big banks, but if I were, I’ve had investments, I’ve had a position at JPMorgan in the past. Now, if I were, I think this is the one I would still go with. We were talking about big banks spending on technology. JP Morgan spent like $12 billion on technology this year. They said, how I interpreted it is like they spent half on defense, which is like regulatory requirements, modernization, cloud migration, and cybersecurity, all that kind of thing.

Matt Cochrane  27:10

And the other half is what I would call offence. So they have Chase MyHome, which is like an app where people can apply for mortgages and manage your existing mortgages, and even explored buying homes. They launched a cloud native digital bank in the UK. They’re building out real time payment technologies. They’re involved with Onyx to commercialize blockchain. So they’ve built, like basically, their own private cloud, like they have data centers all around the world to make the bank a lot more efficient? How do you see JPMorgan Chase? How do they stack up?

John Maxfield  27:47

I mean, JP Morgan Chase is just big, sophisticated, well diversified. Incredibly well run. Jamie Dimon is like, if you go back through JP Morgan’s history, and Chase’s history and all the banks. I mean, they’ve had some amazing leaders in that lineage. It goes back. It really goes back to. It depends on what lineage you trace it back to. But it’ll go back to kind of the Gilded Age, and they’ve had some just phenomenal leaders.

John Maxfield  28:14

Jamie Dimon is with them, he is so good. I love, I mean, it’s just like a big stable bank. So nothing wrong with buying and owning JPMorgan Chase, okay. But its growth and its returns are going to be a function largely, because it’s so big, it’s largest bank in the country by assets. Because it’s so big, its growth and return profile is going to be somewhat near your GDP performance. You know what I mean? But ain’t nobody going to come in and disrupt JP Morgan Chase, rest assured. Because the can buy whatever they want, they can make, they can make whatever they want inside. Technology is not an issue with JP Morgan Chase. Technology is an asset for them, not a liability, because they can do whatever they want.

Matt Cochrane  28:59

They have almost 50 million mobile users too. Which, people talk about like Cash App. I mean, they have like 40 million, but JPMorgan Chase, like just, they’re almost at 50 million mobile active users.

John Maxfield  29:10

Exactly. And it sucks up deposits all over the country. It bought Bank One so sucking all those deposits out of the middle part of the country. It bought Washington Mutual, so sucking all deposits out of this, a lot of deposits out of this part of country. And then on top of that amazing funding base, they have this incredibly sophisticated wholesale bank, consumer bank, all this kind of stuff. It’s phenomenal. The only downside is that they take a lot of risk, because they’re big market makers. They’re big in the markets. And you got a brilliant guy like Jamie Dimon who’s got like a 10,050 IQ. You know what I mean? Right? You say, who in the world could run this thing the way Jamie Dimon does, and I don’t know the answer to that.

Matt Cochrane  29:52

So Bank of America is another big bank that invest heavily in technology. 33 million mobile active users. 20 almost 25 million Erica users, and that’s their virtual finance personal assistant that’s pretty capable. They were, like when when they just announced their like fiscal year end, they said Erica interactions were up 418% year over year. Digital channels now make up 50% of their total sales. In 2019 that was just 32%. Zelle volume on their platform was up like 45% year over year. And 85% of their private banking relationships, which they define as accounts that are worth more than $3 million are digitally active. How does Bank of America look?

John Maxfield  30:38

So I’m a huge fan of Brian Moynihan. Again, brilliant guy. I really, really like Brian. He’s just a terrific guy. And when he talk to him, you can just tell, you can see the processing power working in front of your eyes. I mean, he’s like an amazing guy. He’s a great leader. He’s relatively young. So we still probably got 10 years in that position. So that’s great. They will make the same. They’ll make the right decisions in technology and all that kind of stuff. They too are pouring $10 billion, $11 billion into technology, just like JPMorgan Chase is. It is a good bank, a good brand, but again, because it’s so big, there’s a limit, you’re just not going to get, parabolic return profile. So that’s the only downside to Bank of America.

Matt Cochrane  31:22

Okay, so let’s talk about Wells Fargo. So earlier, you talked about a track record, right? And so I think this might be the one where you could like throw out and say, well, look, Wells Fargo had a great track record for a long time, and people would throw it up as, hey, this is the example of just a great bank always do things the right way. And then, I mean, I don’t know, five to six years ago, it just seems like the wheels came off.

Matt Cochrane  31:45

I mean, they they obviously had the cross selling scandals, where people were, they would open accounts with existing customers and different kinds of products without even those customers knowing about it. They bring in Charlie Scharf, who was the former CEO of Visa (NYSE: V). But then he went to, I forget where, he was, CEO at another bank, but they brought him in, and I thought he was gonna turn the ship around. And I don’t know, is he doing that, John, like how’s Wells Fargo looking?

John Maxfield  32:20

Okay, and here’s another thing about Scharf and his background, he was a Dimon protege.

Matt Cochrane  32:25

Okay

John Maxfield  32:26

Charlie Scharf is a smart cookie.

Matt Cochrane  32:29

He’s great. Yeah.

John Maxfield  32:32

The problem with Wells, your point about Wells Fargo. I thought Wells Fargo was amazing. Before, you looked at all their numbers, you look at their past performance, and you’re Oh, my God. Warren Buffett thought they were amazing.

Matt Cochrane  32:40

No, they were the gold standard for a. When I came in, and started following the space. I mean, they were the gold standard. People would always say well, just go with Wells Fargo. I mean, they do things the right way, and just consistent. And then just the wheels came off.

John Maxfield  32:58

Yeah. I mean, it’s like one of those moments where there’s an exception to every rule. You know what I mean? And you can be fooled. You know what I mean? It’s like that can happen. And we all know that, in investing. You can think something is amazing and be wrong. You know what I mean? But underlying that is still a really good franchise, okay? Underlying the reputational damage that was caused is still a really good franchise. Scharf  is turning around. What you have to realize, though, is that working through the banking regulators is really hard. It’s really, really hard.

John Maxfield  33:32

But just, I can’t remember if it last week, but just recently, the OCC took its consent decree, said that it was, it had completed its consent decree with Wells Fargo. But the big, which was like it’s, that’s like a written order that the regulator’s will issue against a bank and say you need to fix these things. And until they’re fixed, you’re kind of in like regulatory purgatory. So there’s a lot of different things you can’t do.

John Maxfield  33:55

But it still has some other consent decrees out there. And one of which is with the Federal Reserve that has put a cap on how big, on their growth. So they basically can’t grow. I think the cap is just shy of, I think it’s just shy, of $2 trillion. So they can’t grow beyond that point. So for the past, like five years, they’ve just been sitting there, sitting there, sitting there, sitting there. And that was a big problem last year through this whole PPP stuff, because the PPC stuff just caused these banks to go grow like crazy. 

John Maxfield  34:26

So that’s a problem. Once that now, let me be clear, I have large, and me and my wife, we have large investments in both Bank of America and Wells Fargo. Six figures as well, I mean each, like these are large positions. And we laid those positions in, in March of 2020. Because the thing you have to appreciate about buying a bank is that, a bank, this is, you had alluded to this at the beginning that you’re like, most of you are growth folks. But as a general rule in the banking space, it’s a value investing space. And the reason for that is just because the business model of a bank, you’re typically bank will only earn 10% to 12% on their equity.

John Maxfield  35:04

So if you’re paying two times book for that, that means you’re only earning 6% on that. But if you’re paying half of that, it means you can earn 20% to 24% on that. And that’s why the price that you pay for the typical bank stock really, really, really, really matters. Because it influences, the slope of that curve. And so, Wells Fargo, you pick it up at a good price, it ain’t going anywhere, it makes a ton of money, it can invest in technology. And once that asset cap comes off, it’s an opportunity. I can’t help but imagine that once that asset cap comes off, you’ll see some movement there. But it could be two years could be one year could be five years. You don’t know.

Matt Cochrane  35:49

Gotcha. And so and then finally, Citibank, this is probably of all the big banks, this is one I know the least about. It just always appears cheap, but it never seems like it’s. Is it ever going to be not cheap? Is it ever, like what is going on with Citibank? What should investors know?

John Maxfield  36:10

Okay. Real super simple on Citibank. Citibank has never seen a crisis that it didn’t want to be right in the middle of. I’m talking about going back 150 years Okay. It’s lost so much value in the financial crisis, it could take 60 years to make that up. Now. What happened back then and what’s happening today is different. It’s business model is almost complete. This my opinion. Okay. And I think it’s been borne out by the facts. I think the business model is completely unmanageable. It’s just too sophisticated, too much cross-country exposure, it is just so complicated and sophisticated, that they have just, whenever there is disruption in financial markets Citi Group is on the frontlines feeling that.

Matt Cochrane  36:56

All right. All right. Fair enough. Fair enough. So let me ask you about this. So one thing that Wells Fargo is doing, it said it was going to be eliminating insufficient funds fees by the end of this quarter. And it also was, it’s gonna include early access to direct deposits, for qualifying deposits, like 24 hour grace periods for overdrafts, and like a new short term credit product, which I mean, I think means Buy Now Pay Later. We see FinTech bring up a lot of these types of products. And I feel like it’s good for the overall consumer, because eventually it’s adopted by these legacy financials. But is this the way the industry is going. Like when a bank like Wells Fargo makes a move like this. Are the other banks going to have to follow?

John Maxfield  37:53

So Ally Financial (NYSE: ALLY), I can’t remember when that was, that must have been last year sometime. Ally Financial, which is more of a traditional bank, but it’s also a digital bank.

Matt Cochrane  38:03

I think it’s the largest, isn’t it? The largest online bank John?

John Maxfield  38:07

I think, I think that you’re, I think that it is, but don’t quote me on that. I think that you would probably know better than I would. But when they came out and eliminated overdraft fees last year, that same day, after the press release came out, I was talking to Mick Blodnick, that banker who was running, that ran Glacier, and created all this value, Mick is now retired. And Mick says, just watch. Now that Ally has done this, all these other banks are gonna fall in line. And that’s basically what we’ve seen. All these banks are now saying, we’re gonna get rid of overdrafts and go in that direction.

John Maxfield  38:40

But then the question is, banks made money from overdrafts, it’s not like they’re earning an insane amount on their capital, like an excess amount on their capital, because it’s such a competitive commoditized industry. So they’re gonna have to make that up somewhere.

Matt Cochrane  38:55

That’s the undertone of question. Yeah. How does that affect their business model? Because these are very, these are pretty profitable for the banks, right? I mean, these kinds of revenue streams, and is obviously not consumer friendly, I guess is the way to put it, but how much is this gonna impact their top and bottom lines.

John Maxfield  39:17

So the problem is that the customers who are hit with overdrafts are not profitable customers for the banks. Because the way a bank makes money again, it takes all this free money. So let’s say you put $250 grand into a bank account. They’re making good money on you. But if you’ve got a bank account, where you’re constantly going into overdrafts, they’re not making any money on you, because they’re not lending that money out. And so that’s really the only way that they make money from those customers. And so, the question is, what happens to those customers? Do they go to FinTech land? Right? Do they go to the Chime’s and stuff like that? And I think that that’s where they’re going.

John Maxfield  39:59

But the problem with that is that those business models are not sustainable. Like the Chime’s, those are not long term sustainable. They’re sustainable right now, because we’re in this VC tech-induced euphoria, right? Everybody thinks it’s gonna work. But you just look at how they’re not making money. They don’t know, they don’t, they don’t have profitable ways to invest all those deposits they’re taking in.

John Maxfield  40:23

So the question is, after this next wave, which we don’t know, when that’s gonna end, it could be next year, could be this year, it could be five years from now. Then if these customers have migrated from these banks to these FinTechs that don’t charge you things. Then once these FinTechs, because there will be a washing out of the industry, there’s got to be a washing out, okay. Mark my word, there will be a washing out, there always is.  There will be a washing out when the cycle turns down. And those companies doing this stuff will be victims of that. And the question is then where do these? Do those folks go back to traditional banking space? And I don’t know, I don’t know the answer to that. So it’s a good question.

Matt Cochrane  40:57

Gotcha. So let’s talk about the Chime’s of the world. How do you think, I mean, you said, with the cycle turning, you don’t think they have sustainable business models? Are they going to be, are their assets going to be acquired for 50 cents on the dollar? Or are they just going to go away and be completely washed out? What happens to all these new banks coming up?

John Maxfield  41:23

Okay, that is a really good question. No one’s gonna want to acquire their assets. I want to be clear about.

Matt Cochrane  41:33

Not even for their account holder base?

John Maxfield  41:38

They might sniff around their deposits. The deposits or liabilities. But the reason that most banks won’t be interested in those deposits, is because the nature of the depositor, right? These are not, typically, these are not profitable depositors. And so a bank is going to, if you live in a world where there are no overdraft fees, banks are going to be reluctant to bring a bunch of customers in who are always operating on the margin. The paycheck-to-paycheck folks. And that sounds really insensitive. But it just is what it is.

John Maxfield  42:11

I mean, a bank is a business, a bank owes fiduciary duties to its shareholders. It owes fiduciary duties to employees. And they’ve got to make money so they can inject money into communities. They’ve got to make money so they can support their employees. They gotta make money so their shareholders are comfortable supporting these things.

John Maxfield  42:28

And so, but the assets, nobody will be interested in the assets. And I don’t think there’ll be a ton of interest in the deposits. I think some of them will just go away. And some of them, maybe will be picked up for nothing by a bank just to bring them on the platform, that’d be my guess. I have no idea, that’s just exclusively my guess.

Matt Cochrane  42:51

Sure. Sure. Sure. Let me ask you a question. I didn’t tell you I was gonna ask you this, but when we’re talking about FinTech companies, and a lot of them you don’t think, but I mean, there’s obviously more than FinTech, than just these new banks coming up. Are there any FinTech companies that interest you? That you think are interesting and that you think have sustainable business models?

John Maxfield  43:12

Yeah, there are a few. nCino, NCNO (NASDAQ: NCNO)

Matt Cochrane  43:19

I’m familiar with it. Yes.

John Maxfield  43:21

So nCino provides a cloud bank operating system to banks. There’s a lot of promise there. There’s a lot of promise in the non-public FinTech space still. You have a company in Utah called MX that does kind of data cleansing and data stuff for banks. They’ve just seen huge growth. There’s a company out east called Numerated. Numerated does automated account opening, that kind of stuff. They’re really good. I mean, there are a lot, there’s a lot of promising stuff in the FinTech world. But Fintech is inflated in the same way that all of it is right now.

Matt Cochrane  43:59

Yeah, absolutely. Absolutely. What about in the banking world? Are there any small banks that you think might be under the radar for investors that that are worth watching?

John Maxfield  44:09

Okay, so I know what you’re doing here Matt. You’re teeing me up to talk about Triumph (NASDAQ: TBK).

Matt Cochrane  44:14

Absolutely, absolutely. Tell people about, tell people about our favorite small bank. Well, I don’t know if it’s your favorite, but I think it’s mine now. So let’s tell people about this.

John Maxfield  44:26

Okay, so I’m totally captivated with the story. And I went down and talked to their CEO and all their top executives a few months ago, and it just reconfirmed that I think there’s something here. So Triumph is this bank based in Dallas, Texas, okay. It’s a relatively small bank, like $6 billion in assets or something like that. Run by this young guy, I think he’s 43-44 years old right now. Which, doesn’t that kind of date us to say, that’s kind of a young guy, Matt?

Matt Cochrane  44:59

It might, it might. [laughter]

John Maxfield  45:00

Anyway, so this guy, he’s running a real estate company back in 2005-2006, doing really well. Buying apartment complexes out of CMO’s. So commercial mortgage. Now, the acronym is like escaping me. But these securities that own commercial real estate. He’s buying these non-performing apartment complexes out of these securities, fixing them up and selling them and just making a killing. He does this three or four times, makes like a million bucks each, million or $2 million bucks each, does really well.

John Maxfield  45:33

Financial crisis hits. All the markets for that kind of stuff, freeze. He’s got all these employees, he didn’t know what to do. He can’t get capital. He’s like, Well, you know what I’m going to do, I’m going to buy a bank, I’m going to buy a troubled bank. So he goes, and he’s got some really well backed. He’s got people that have a lot of money behind him. Okay, so he can draw on capital. I mean, not everybody can do that. But he can draw on some capital. So he goes and buys this bank in Dallas. It’s like a one unit bank. It’s kind of, it’s just garbage, it was garbage. He buys it for like nothing. He buys it for like 19% tangible book or something like that. He buys this thing for nothing. But he’s like 33-34 years old or something like that. He’s young.

Matt Cochrane  46:14

Isn’t that what you were doing when you’re 33? Like buying banks in the middle of the financial crisis?

John Maxfield  46:22

Exactly. Exactly. Your point well put. Yeah, that’s my point. He buys this thing. He fixes it up. He then goes, and he buys, he meets this guy randomly. Who runs a factoring company in Chicago. It’s a factoring company that serves the trucking industry.

Matt Cochrane  46:39

So well, so let’s take a break. Can you explain what factoring is? Because this was something like. You wrote a great write up on this bank, and you really broke it down, where people like me can understand. But do that for the audience now, what is factoring when you say that?

John Maxfield  46:58

Okay, so this is super, super interesting, I think, Okay. So if you look at the trucking industry in the United States. Believe it or not the payments, what it costs to move stuff around this country equates to something like 8% or 9% of GDP. Just the payments to the truckers, not the value of the cargo, just the payments to move stuff around this country on trucks? So it’s a huge market.

John Maxfield  47:25

Well, the way that works is, when a trucker delivers a product, he or she isn’t paid when they pick up the load, they’re paid after they drop the load off. And not only after they drop the load off, but 30 days after that load is dropped off, typically. Okay. And so that is a problem for these truckers, okay. Because they’re incurring gas costs, or they’re buying food along the way. And these aren’t people who are like loaded, you know what I mean?

John Maxfield  47:52

So what they do is, well, how do I get paid up front? In order to get paid up front, what they do is they go to a factor. What a factor does is say, We’ll buy this invoice from you, we’ll pay you 95% on your invoice. And then 30 days, 35 days from now, after you’ve dropped off the load and that period has expired, we’ll collect 100% on that invoice. Right. So the trucker gets paid up front, the factor gets that spread between what they pay and what they get paid. And so that’s the factoring business.

John Maxfield  48:21

Well, roughly 50% of truck loads in the country are factored. So backed up, 8% to 9% of GDP is trucking. Half of that roughly is factored. This is a huge market is my point, this a huge market. If you dig into that market, and you look at what’s going on in that market, what you find is that you have these truckers who get a physical invoice and they go and they drive that invoice with a truck over to a loading dock. And they pick up the load and the guy the loading dock signs that invoice. The trucker takes a picture that invoice, emails that invoice to the broker, whoever it is that’s setting this whole thing up. That person has to look at this and authenticate that this trucker is the person that they hired, and all that, there’s the authentication, there’s a lot there.

John Maxfield  49:09

The trucker then drives that, they get it signed again on another piece paper. Takes another picture, emails it. Like it’s this incredibly antiquated process similar to how checks used to be. And now how the payment system is now today, it’s like fast and streamlined, right? Incredibly inefficient market. Okay, that’s huge, huge, huge, huge, huge, huge. Well, so this bank, Triumph Bancorp buys this small factor in Chicago. And the benefit is that, that spread between if you’re buying an invoice at 96% and 35 days later you’re recovering 100% on it, it creates a huge yield. There’s like 25%-26% yield, whereas your typical loan nowadays is yielding 4% or 5%. So you can really make a ton of money if you have insured deposits that you’re paying nothing on sitting underneath that. Your spread is huge.

Matt Cochrane  50:00

And they’re very low risk, too, because I mean, these are, if you’re receiving truck shiploads of something, if you want the next month’s truck shipload, well, you better be paying the people bringing you the shiploads.

John Maxfield  50:13

That’s exactly right, super, it’s low risk, if you can get the fraud out. If you can get the authentication it’s super low risk. And so, Triumph is seeing this and saying, Oh, my God, no banks want to deal with this because it’s so labor intensive. But Triumph is looking at this saying, Oh, my God, we have these cheap deposits. And we can buy this thing that’s yielding 24%-25%. We could make a killing here.

John Maxfield  50:39

So what Triumph does it then, it goes and buys this thing. It then goes out and buys a bunch of little banks in like Colorado, Kansas, Oklahoma, New Mexico. It buys all these little banks just for their cheap deposits. So now its got that big cheap deposit base, and it’s got this factor. So now this factor, it allows this factor to start growing, growing, growing, growing. And now they’re eating up. They’re eating up share in the factory market. Okay. But it’s huge. And they’re starting very small. Right? So I mean, it was steep growth, but they’re not like taking 100% share. I mean, they’re grabbing, like half a percent, but it’s still a lot of money.

John Maxfield  51:12

So what they decided was they say, Well, hey, look, what about if we create a payment system? So there’s a working group within the trucking industry that was looking at blockchain and saying, Oh my God, if we can like get everybody on a blockchain, where we can like, the broker, the shipper, the trucker, all these people can all see, and the factor. If they can all see what everybody else is doing. And it’s all right there, you take care of the authentication issue. Which means you can get rid of all that paperwork, because the authentication is all right there digitized right in front of you, Okay.

John Maxfield  51:49

So that trucking company couldn’t get it together on the blockchain, they just couldn’t work together for whatever reason. Well Triumph had somebody that was on that, dealing with that. And they say the trucking industry may not do this, but we will. So they create this closed loop payments network, where all these truckers, all these brokers, all these factors, for all the people in the trucking ecosystem, can see where the shipments are, and where the payments are, who’s legit, who’s not legit.

John Maxfield  52:16

So they’ve created this thing. And they’ve just released this thing over the past year. And they’re just gobbling up the payment space. The factoring space in trucking is very, very fragmented, just a ton of the tiny little operators. And so they’ve set this payment system up. They’re now putting all these people on all these, all these different individuals and entities onto this system. And they’re just, they are just going gangbusters. And it’s just an incredible story.

John Maxfield  52:43

And so the last piece of the puzzle was that they come in and last year, they buy this company called HubTran. HubTran did authentication work for, I believe it was brokers, and maybe the factors. Where they kind of like, they helped with that auditing process. The behind the scenes stuff, they weren’t in the financial space, they were more in like in the consulting, technology space. But they had a whole bunch of these factors, brokers, a whole bunch of these folks, were customers of HubTran. Well Triumph buys this company. So it now has all of those customers within its ecosystem. And now the question is can they put all these folks onto this closed loop payments network?

John Maxfield  53:27

And as you sit and you look at it from the outside, you think the logic is so compelling. It takes, I can’t remember what, Aaron Graft is the CEO, I can’t remember what he said it cuts out of the cost from this, it cuts out like 85% of cost. Some ridiculous amount of cost out of this process. The logic is so compelling, you’re looking at this thinking this thing might actually work. It’s audacious, but it might actually work. This little bank in Texas may take, may revolutionize the payment space, in the US trucking industry, which equates to like I said, 8% to 9% of US GDP. So it’s an incredible story.

Matt Cochrane  54:03

It really is. And it has all that like the factors of an industry ripe for disruption. I mean, a fragmented space that has this manual tedious process, like nobody has a better way. Like I was trying to explain this to someone. And they were like, well, when the truckers ship a truckload to wherever they’re going to, why don’t they just get paid in Venmo there. It’s not, they’re not getting paid. Like this whole factoring thing, it’s like a loan. You can deliver a truck of cabbages to a Walmart. The guy in the back of the garage at Walmart is not paying that trucker. I mean all of these companies taking on these truckloads have these intense account receivables, and account payable processes they have to go through for things like fraud and things like that. And it’s just, it’s just tedious. It’s manual, intensive, labor intensive, paper intensive processes. And it just does, it just seems ripe for disruption?

John Maxfield  55:05

Yeah, yeah, I mean you can immediately make those payments if the authentication is there for everyone to see. If the company that’s shipping the product, the broker who lined up the shipment, the shipper themselves, and the factor, the person who’s doing the factoring, can all see all points. They can say, this is a legit transaction, we can just pay immediately right now. And so it’s like. Here’s the caveat, right? It trades for like an insane valuation, because it doesn’t trade like a bank.

John Maxfield  55:38

The people in the banking industry, there’s a small world of folks in the banking industry, hedge fund people, analysts, who really, really understand the industry. I mean, on a deep kind of visceral level. And all of those people know what Triumph is doing. And all of those people are captivated by it. And so what has happened is it’s driven its valuation way up, because it’s not trading like a bank, it’s trading, because it’s no longer. Going forward, its return profile isn’t tied to the size of its asset portfolio.

Matt Cochrane  56:09

Right, you’re not getting this for book value.

John Maxfield  56:11

Exactly. It’s projection is tied to the size of the trucking industry payments. It’s a tiny sliver of payments because it’s a huge industry. And so if that thing works, this thing is gonna fly. You know what I mean? It’s no guarantee, and ain’t cheap. And so what I’m thinking about it, I buy banks, because I know that that industry, I’m sitting in waiting, because there’s gonna, we all know, we’ve already seen a correction right, in the tech space. We all know there could still be more correction because of the interest rate situation. You don’t I mean? Triumph will be my next large purchase in the banking space once that opportunity presents itself to really buy it at a good price.

Matt Cochrane  56:51

Well, excellent John. Thanks so much for joining us today. If people are interested in following you, where can they find you?

John Maxfield  56:59

The best place is on Twitter, @MaxfieldOnBanks.

Matt Cochrane  57:02

And he’s an excellent follow. I wish John, I wish you would post more often. But definitely follow John on Twitter. Again, one of the best banking analysts I know. John, thanks for coming on today.

John Maxfield  57:16

Appreciate it, Matt. You’re the best.

Matt Cochrane  57:19

Again, I’m Matthew Cochrane. We’re 7investing and we’re here to empower you to invest in your future. Have a great day, everyone.