Bancorp Inc. (The) (TBBK)

Andres Viroslav Director, IR
Damian Kozlowski CEO
Paul Frenkiel CFO
Frank Schiraldi Piper Sandler
William Wallace Raymond James
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.

[00:00:01] Good afternoon, ladies and gentlemen, and welcome to the quarter three 2020, the Bancorp Inc. earnings conference call. At this time, all participants are innocent, only mode later. Well, we'll come back a question and answer session and instructions. Will a follow up decline, if anyone should require assistance during the conference be spread by zero? As a reminder, this conference call is being recorded on a to turn the conference over to your host, Mr. Andres.

begin. may you up, First

Andres Viroslav

[XX:XX:XX] Thank joining thank for morning operator. today for Good us and the you you, Bankcorp.

Third quarter call. XXXX Financial Results Conference

the zero dot our today officer, me for eight webcast on morning's approximately call Kozlowski, eight. at being will call p.m. On Eastern to executive two EBITDA be website chief Dylon replay Bancorp call beginning are is five and There The financial five chief eight at eight Damien XX:XX six Frankel, our officer. confirmation com. This the Paul with the a is of today. replay six with code five nine Time five three nine a

conference of similar statements meaning to within Act Before XXXX. or those to anticipated performance subject Such over like Damian, such I looking Securities remind would expressions identify statements. are the results, beliefs materially forward I to actual from call anticipates, or expects statements the are uncertainties call, words using intended cause and Reform the suggested everyone Private turn this by could different the the achievements to that and of risk Litigation which when

executive would Kozlovsky. wrote, turn or of to looking Damian call of of the FCC. Bankcorp undue forward occurrence released the forward please like and after risks reflect to filings with revisions may the I undertakes he which Damian. speak Bankcorp to to made the publicly the events. bankruptcy reflect statements, looking no to results any which the or the And For to unanticipated chief uncertainties, here reliance of discussion over circumstances of Listeners officer further date not these cautioned be to the date these obligation statements are see place on events as only the

Damian Kozlowski

percent Net saw That's and our portfolio loan revenue, XX deferrals efficiency quarter. management. that of gain percent Good XXXX two driven revenue to five dropped million, year share the everyone. quarter benefits saw XX expenses The loan at income year was percent drop third XX XX be securitization by [XX:XX:XX] dollar revenue business we one card grew by climbed the focus In the percent, without cents XX end to gross control from cost and total funds Andre. XX Thank of driven interest for the continuing year see over in XX increase XXXX down continued year. percent, quarter. and over third a releasing a to model growth expenses by percent. percent. quarter, seven of after Illustrating our continue our XX in net on our game. of XX funding a over year you, the fees income payments Banquo XX operations over foreign year led portfolio momentum main was year of morning, third a of percent percent GDP volume from and percent because of Even securitization one point seventy fee of from in on year The seven second were business by removing flat supported the growth business percent point cars growth

insurance assets over growth percent add platforms. by year in financing securities, also led XX lending We year our advisor and

relationships percent card the to rapid continue quarter, and programs [XX:XX:XX] the growth payments will and the ratios. we and fees as of direct Additionally, support as services These eight several as million marketplace. to momentum new raised the be to five to the equity applied holding quarter quarter, We announced third adding add leasing quarter. well ninety respectively, with new ecosystem debt bank enter new SBA senior as secured approximately our commercial we be this our has business company. continued This two company of our regulatory In growing into debt can over renewed products support new and can funds in at partners. net

robust growth third significantly quarter, historic be our in and norms, above in Our a as suggesting the securitization continued volumes pipeline will transaction we determination to strategic business. continue very to made

and deferrals comprised As we decided multifamily our be over areas. and and almost five other previous The we have that next the calls, in three evaluating originated returns profitability, portfolio delinquencies platform have and market loan have and loan of assets securitization that loans occurred in well future years replaced activity. portfolio discontinue to discussed been few its securitization after risk, conditions entirely experienced to credit loans by

income from to stable. expect the be portfolio We

the two home loans. years, Over sold may of as the portfolio be first a portion

needed our lending other sheet activities. Aspasia for balance

real Our our continue and commercial team SBA to originate will transactions. slept estate business

believe guidance Lastly, XXXX have we enough now we to issue information preliminary one. for

our third XXX XXX to earn approximately income We over currently between share, a share. XXX turn Frankel, the company you quarter. CFO, and now I XXXX for color the to expect budget net more to one. is XXX our million in call on Paul a or give

Paul Frenkiel

point twelve driven was, three and net Damien. assets respectively percent debit asset XX prepaid three percent million equity four percent. five interest by million second for which fee [XX:XX:XX] were from and three on equity noted. XX dollars point Return in percent, Damián and and point Thank point in an quarter represent dollars increase one you, were returns of and the a increase quarter income The one card and increases increase a income

sale rate the which aforementioned next largest five yield four financing point beginning is percent. two weighted over recognized of point approximately the portfolio loans, are loans by depending firm point and losses eight The of had which a nine is period loan previously fees, continue and are the for completion with of We sheet generally have originated point originally balance in be dollars loan on April applications a of largest advisor block now approximately dollars in those ninety may short in average loans XXXX, with recognition billion actual forgiveness These months block including held estimated were which timing be with of our loans. other will five for the Those that will real being and for at four fair the reimbursements, securitizing. million one see books portfolio lower analytics which majority other Earning multifamily SBA dollars type a eight We commenced, less a hundred valued. term million percent weighted PTP portfolio four generated the for one by five release point we by tables estate the now dollars. average of yield percent. loans PPP represent five real is the have loans, on breakdown point which loans be hundred and on million eight comprised loans and rate two retaining PBP the for nine small been business is the one for and point and at price press commercial of XX nationally Excluding forty loan portfolio, combined vast new recognized to two substantially dollars total Please is billion and dollars or the point Commercial an six excluding covid one loans, percent. characteristics. loans cumulative percent. have the SBA total [XX:XX:XX] estate all Kerry eight the estimated

market of incurred. secured cash the by an expense secured was lower reductions five was million. marketable percent SBA were block in loans credit Federal to block as PTP are dollar thirty loans up by fees. Reflecting hundred interest majority leasing are twenty dollars, seven increased of our dollars, rates The quarterly five XXXX of rate. approximately two four impact LIBOR quarter increase been I XX tied reductions of seven, income point for to down point five percent over loans interest ramped and CRE periods, full point point rate while QX losses dollars, recognized tied The loans Interest points and the billion in million historic in expense of on QX one eight production including interest interest six vehicle and rate million related point to fifty contractual dollars in margin end dollars three and eight The s point the Interest third income dollars I value of net decreased QX basis interest one a and in quarter three as dollars estimated million impact able increase Well, with one increase vast dollars not interest nineteen, reductions. Reserve interest Reserve twenty from basis have [XX:XX:XX] balances six we million rates. the one average life an million increased Federal three in is the securities range. the interest the five lower two prior yield point point from percent New hundred four of in was securities deposit these an insurance four net of experienced quarter and funds one twelve million increases three related leases points have LIBOR to point million three of seventy reflecting block to five in combined income additional reflect quarter. the cost increased in the at

the loans share allowance the QX [XX:XX:XX] eight not at one three because projections. funding in our for million nineteen was processing million, value adjusted risk credit prior earnings exit dollars which are September related their provision the were thousand consolidated which point to investment also Excluding the compared QX was already risk point These prepaid one period nationally for are nine losses. percent sixteen press of compared loans, percent. Prepaid analytics that of hundred non-interest billion analysis. have nonstrategic, in from a per and Block dollars twenty release, nineteen, to cash and assets, income percent. million included one as the insurance XXth Noninterest of three point I mentioned, seventy marketable in and dollars reflecting that primarily per loans settlement, comparable respectively approximately internal there twenty QX cents, portfolios, quarterly reflecting on prepayments majority leverage was based and current one four point the two dollars Koed ratios four commercial income loans loans In to in cumulative nineteen, increased environment, one increased. Additionally, point a thirty as ratio, multifamily eight our one shown which loans certain life vast to securities as and dollars to point settlement. also XXXX I expense fees book reflecting ratio recognized up to are two million, of ratio new thousand total average the The the are of higher one quarter. value percent Car one those collateralized held of excludes point a cents nine at of increase the customers. fees largest same of seven and estimated revenue closing, largest two for Management are to four upon include point one are payment approximated yielding firm the accounts expense was nineteen non-interest value SBA decreased the million discount. increased its and to for fifty which and sale and percent of million on highlight, one share two and loss resulted year high the rate based securities our fourteen credit portfolio eight previously is four in percent in levels loans the XXXX by forty the is eight of XX six funds has QX, and in of driver compared primary like books characteristics source Accordingly, six tables which our from the loan in losses block, point incurred would to point rapid point cards

sixty value guaranteed. PPP one of point ESPE date portfolio Approximately consist which of US commercial largest next Block The I incurred the of million not percent and billion dollars which Notwithstanding the loans five is government experienced to recent of XX markets. six have eight declines including for consists portfolio, losses. historic hundred Our majority issues. in dollars loan thirty XX loan to five block percent with remaining mortgages, other business small loans leases the loan origination loans, credit equity

leased We have recourse the to vehicles.

our future, to positive portfolios, risk the loan characteristics believe uncertainty than lending. to we back I of now forms While the related will call there Damian. these is turn other are which uncertainty, demonstrate lower of

Damian Kozlowski

[XX:XX:XX] the We're line to to operate. We're for going going Ok, a questions. Paul. thanks lot, open


queue. time, number gentlemen, you a press a telephone. Ladies touchtone [XX:XX:XX] please you one key if to. yourself question Prize wish And star you, have one please if time, at on this If and a answered on at and Thank been question touchtone telephone. from key this the remove to number has the have gentlemen, a question your your or and then ladies then you press.

first comes Piper line from Your from the question Frank Schiraldi of Sandler.

your You question. may ask

Frank Schiraldi

you. Thank [XX:XX:XX] morning, Good Frank.

Damien. if around. sort any put wonder I could Just starting of you out parameters with

block parameters and EPS of know, gave in what one You you around for growth like business you is the XXXX terms and the for outlook any GDB. how there expectation get your preliminary things

Damian Kozlowski

presentation we everything. last on all site prospective the [XX:XX:XX] investor Ok, our updated analysis a we and new so so night, put

that So and you do we line seen through do point. macroeconomic we are at know, beginning obviously indicators different with we we that you we've confident under I budgeting the year, XXX that like this we run haven't rates. know, refer when scenarios at on percent quarter, And And likely and is likely that interest driving we a fairly the you each to it. business like you at number. we I may the got our want were we and these what when think to XX bunch And cases think guidance if did get of would of looks this like scenarios what look to the we now maintained

know, So know, South growth. like and we're for mid the looking And, we the the leasing things GDP same do thing here. our you teens growth and SBA robust business continued you thirty on growth. kind a a and, had Block that to percent And to five the or XX but in bump next of so settled July, it growth year with, we fee into continue XX range. Has percent it know, expect you and

when the expenses, printed is share fact usually weaker cents put to to that together in just our quarter, the controlling it's come quarter. we third So you we that XX with figure XXX were easy that very a which considering

Frank Schiraldi

to the makeup I'm detail past I then, in I competitive some did or the more not largest so or that curious, that about the there perhaps relationships. there? [XX:XX:XX] on I you thought and you you current Ok, I yeah, the of guys into reasons too do see color know and growth there's partner investor or the share presentation, can't provide any reasons know, and just talked can trying more your is any realize provide you've far around size further go detail you of it. But

Damian Kozlowski

it's and around once again, own. our seeing say it's cases to businesses entire that. to we're to and know, the use You I'm across of spectrum saying payments, a their to don't period. let their everything. We [XX:XX:XX] is because going But what disclose the we do macro. want partners want growth They usual want them growth information of We're own the

makeup we the you the incentive, you driven we the growing. standard They're Nielsen government data. is competitive payment fintech but by like growing to So, and competitors know, gift set the market disproportionate you there's cards And DSA overlooks the class reporting the for all fintech of health look why. you accounts it's we're really and the use, think like of of understand card, And at using the in in types that ratings, that this FSA is macro and because we've not that cases which the devices fact it's relationships, infrastructure types whether programs but see use being debit different the care also we built and and the growing. have, place all devices disproportionately market only are by if best that corporate something our different compliance the what That's trend, that they're they're payments. area, the these

to worry not increasingly and people business the to comfortable platform to regulatory that they to to and do have know that feel concerns. need So have they're banker any come about the going

Frank Schiraldi

that Ok, to able of added about the percentage pie the total you know, largest you up relationships and you've in quick relationships think becoming given partnerships total pie pie or percentage just new revenue on terms your diverse [XX:XX:XX] just you of you less or partners, those deposit or you I can growth is largest you a less are would have, know, a more of front, of, the I'm have, concentrated, follow are largest or, those concentrated. point becoming on a be say those know lot say I when how concentrated

Damian Kozlowski

depending [XX:XX:XX] It lot you and this forth, just of had a on goes dislocations back know, year. we've

you've So go had down. up and things

it the there have over become I now. be time. time we know will programs actually we're have think adding do we So we diversified because on very over visibility It will we're

we're diversified fintech now. But we programs added in we've announced, the which space. it's we've the area you to use less even some look that products concentrated that in cases So with even and haven't across if likely extremely the and recently, larger become added

Frank Schiraldi

growth? funds into on the and direct lastly, horizon is of, still anything along [XX:XX:XX] terms more baked meaningful, in Ok, XXXX baked one, you then know, rapid just that is the into of business, revenue

Damian Kozlowski

is Well, investigated so deck, new in some we've a deck, dedicated partners, that. page that's investor see [XX:XX:XX] in that signed there partners definitely that's you'll to and investor also the but

expanding. it's So

there a two and know, or you half a when fees, there's to in so know, million. you couple million at So, we look

that type that's indirect, stuff. is the which direct the in and sense, of So Venmo the

than for that put we know, much grow estimates we're you very It that to that. them larger could So when But, and we're business. expecting conservative product. still be

Frank Schiraldi

you. OK, Gotcha. thank [XX:XX:XX]


the Wallace James. question line Raymond of next from Your comes from William [XX:XX:XX]

open. is line Your

William Wallace

[XX:XX:XX] Thanks. customers Maybe about revenue period, to just Or really as think the are David. new would the etc.? that, is the sons other customers more kind where to program a there's of like a we boost fund rapid turned is staying instantaneous as Morning, ramp, in we products Ravitch should with of any a on product? the

Damian Kozlowski

some so to several now in ramp. [XX:XX:XX] suppose looking a this One significant more be in resulting of the you're partnerships two was wide, answer? of [XX:XX:XX] network platform. either would the of instantaneous, partnerships. or system types corporate, more That's So it attack hate fees so. kind are immediately. We're at there's that Ok, more large past a our I are going why direct more

both have But those ones we could corporate be Rampton. both substantial So that are then longer focused And we of discussions, a they're little announced yet. more although that have are haven't higher a view. there's bit revenue there immediately.

William Wallace

talk in multifamily we'll the portfolio rate you remaining fair they the enough. multifamily teens, portfolio. loan OK, bit years implications Ok, significant robust are you growth the and and line that in said loans then on of on kind are last road business very you you're when [XX:XX:XX] SBA mentioned little a a portfolio, the maybe What's zero the least down the would that Can interest would off margin three experiencing in securitized see environment? run had of of obviously the And the mix the in And loan get you at block about what of target? then I believe mid mostly your gone? thinking

Damian Kozlowski

securitization still We portfolio, should of future the first do the very in loan have with stable. to be funding the be Well, portfolio. very all, will [XX:XX:XX] it

fixed at longer loans. going potentially rate years, to They more. income not you're two consistent for if could term turn So into get least

a financing what So program. seek loans those will permanent is happens after stabilization

a of into future. we So to set those the may loans hold continue

developing that to sets a in roadmap institutional So adviser be we credit going from to block, block and to SBA one the much leasing. our where establishing going business also the building three We're invested business. we business we're we're our to broader be do expanding out very those loans, now question. we're by around all what in set years have product We're house commercial a on

So there. of there's a lot opportunities

other an don't to a eight we It'll those percent of And remember roll good don't estate half sheet type continue an and real are be it we as eight put more the when how our business. some will to some into think, exposure I want or have very to it'll percent XXX to you three institutional But of years, business. balance off, within of And businesses. fixed of it'll loans balloon and they work future, commercial remember, in the do rate we probably So be parts loans type ideas commercial we be capital the increasing and some, they're be that beyond of in whether XXX also know, in Aslak. going our form, hold other probably level. in to

good what haven't we feel will that's that as very replace to So, going off you to opportunities. decided those be able be, roll we confident lending they know, but with loans

William Wallace

my In We I is replacing am is that [XX:XX:XX] reading? another line, hearing could that business that them be haven't. you with

We haven't.

Damian Kozlowski

[XX:XX:XX] We're product. expanding our

credit We haven't three a we're we're do. year creating going finalized to it. And about rigorous we are very and roadmap what

So, you create our know, products that to we're to current market participate bunch the extensions going in of there's we're platforms. are, today as that going that that a in you know,

the portion initiatives can the going of space sooner dovetail substantial always the lending the Those who if of of hard par. buy we because that's a we're devising this in how sell loans want even that are So at need sell our extremely kind know, multifamily multifamily they're all creating, parts of we to in of would not people to had to portfolio you marketplace. We've we're environment.

revenue. the not we're something And that lending replacing So multiple it's road. that the about years down worried

five securities stuff. billion, two So we have we of and still room of have still and a dollars billion

exposure, turn plenty decide in serious other as and the there that rate, roll or not those platforms of order then or room that whether you off to time will we've we a next room side build is got we And years. it know, expand businesses. fixed exposure term need into into they that longer should type our current three keep the on the loans to at of So as

William Wallace

[XX:XX:XX] I mean Ok, that or the stepping it block line portfolio sort and east loan the is that so of block, item. in growth to more back just any the other twice

is the go? you would would platform. or of So be what to with a have to fine. as the would that think just extremely loan you it's there healthy limit mix that However, going to so portion block let you go a portfolio that with person or the the and as we of Well,

Damian Kozlowski

we're difficult can So loan raising not [XX:XX:XX] seven percent I a we're or funding. time, in a blacks only percent six half. very And financing as black then is two a like and overfunding be three over more our

So, new slowly the one a we're like years. the as businesses sell yield business we platform over do, total next banking three and our the you raising on service other We're raise to know, time, institutional on products and that effective yield services capability the who of last block slowly the over that companies the effective lending lose. we will

put of portfolio, we like we that mean. three We it are the on lower of fees the size our I is, margin the know, and enough to That's room. years have our want we business So entire you billion couple would you double what to business. easily reason could the next the over very And on. though even aggressively across know, effective, growing would lending the

at basically, and So it's zero very black for risk, business. profitable the

above a branch would have might different going credit that that business funding you of yield equity percent not were of about time. over say of But size effective three increase and if block to on is and So growth, a business driving it our the over payments double whole portfolio XXX to because the know, you fee and business return if an even return enterprise you it cost, is that such you that continue it, were know, during raise you And to time on its lot large do risk. XXX you thinking a can without funded. overall obviously you doesn't because just get,

engage don't margins larger business you think a a we some can over know, as model still one of have, though business ENIM. just unique OK. have lending and entire risky we in we so a might in the increases you actually So, it we line non lose business and know, enterprise, even in

William Wallace

on right, just thanks. going I And is targets in thinking the growth. there there's the base your question a [XX:XX:XX] about you've know last and and All my business. got Jaws expense lot

kind me as help of reasonable you growth line expectation and help expense think you. us So a about as the

You know, business, unlike decisions to reinvest, some the discount. of but the from leverage buy in to make

Damian Kozlowski

[XX:XX:XX] now for And we're be percent net million have This three is five right next going revenue going easy. One and looking at income. XXX we're and of year. between to to XXX of

So, we're what delivering rigorous we about very as you know, say.

stuff. depends. So, variable costs and And you know, involved compensation it have in we

net income. So, XX, say you will better into a or we and XX some know, of that if do bit little go next year and we have XXX

probably we per around we number, if target. that we rigorous about the to will And in the build. business, meeting don't XXX, we know, meet our want like building into more share you make we were that revenue reinvestment will go Some earnings platforms sure are very that

can, luckily, you rigorous we sure revenue on can and make as don't don't we much keeping that obviously, here manage everything, but that we we matching control about discretion the depending cost of and as we that we're relationship compensation very draws environment and can the we amounts is. can expense So base what have we constant. revenue sizable And entire

William Wallace

somebody ask the Appreciate out, thanks. Ok, step Jamie, it. question. I'll let and Thank you, [XX:XX:XX] else


the Pepeto, Ness comes next me of ask from The [XX:XX:XX] it'll line Brad from give Carl question you a question.

Unidentified Analyst

Hello, question. guys. for the [XX:XX:XX] Thanks

I out into equation months fit the the do or so? as next look into how So buyback XX

Damian Kozlowski

And calls, saying of earnings in contemplating that a situation we credit what with current we know, at holding that weren't company I with in [XX:XX:XX] of to the our good deferrals we want at the return was dislocation only that in and quarters visibility on so of and the million don't the time, we That's would We you that, previous across reservation about the wait couple something overall of the not the cash. longer do shareholders. portfolio, we last one that of Ok, the doing holding and happening on our comment. said during XXX to hundred capital the no have spectrum that. on capital raising on economy, performance very because million would

Unidentified Analyst

Ok. [XX:XX:XX]

you with and multifamily That Regarding just third the that did time any one yeah, of out with getting securitization, have quarter associated start in what costs that. was the it?

Damian Kozlowski

offset the then There cost manage origination book. we we've the small of on in savings, some fraction first on we that know, the based of of also significant to, And marks to some value total it so though, quarter. gain. the assets But, don't trimmed where Ok, have I'll not were you securitization out XX cost because this cost paying too. marks team know, an get were fair on [XX:XX:XX] we that to to to hoteling. a the is down and we there there about a is It's the a were the the but no you percent have, those did over but turn The take of Paul origination of longer what was obviously, for. and amount it and portfolio, the taken people,

year will in there probably a around cost dollars, XX So full a over million impact, be XXXX.

didn't in Paul? you anything, XXXX in to Would like XXXX. We about in you costs think to we did have So rate. XX, but run those a add all have

Paul Frenkiel

a won't business. some related the see that charge cost of noted, there as discontinuance you or be And this the [XX:XX:XX] material Only XXXX Damien one. reductions in quarter to will in that next

Unidentified Analyst

should like flattish have card question lost you're side range. XX is Last kind be the to here. great. the the in up it It it dollar and But second fine, quarter versus XX Ok, looks the volume seems like side like the guys gross [XX:XX:XX] you on percent momentum for of quarter.

put just You color on any that.

Damian Kozlowski

Yes. [XX:XX:XX]

know, then we and hard exactly multiple And economy up the in over stimulus, this virtual, happened on, there we was July. that but that unemployment. And of was it that whole bump it when understand went that also our we was like, saw due, programs. substantially looked due going because the gapped another So to And saw bump big and increased what's even the it's came to everything saw huge big we And saw funds the opening again. you and if flattish were the closed economy it's you major There but stimulus. a fact reason you up programs another taxes through that again, of to the is the the to our were had settled us. down that that stimulus delayed the stimulus in end deposit wave tax, a in

quarter. where is, this third huge and is And our so two the you is quarter And the to extraordinary was prior. very because situation And quarter. usually comparing there reason weakest this you're quarters governmental that's

We have strong two quarters.

is some We first which care season. cards have quarter, the is in driven corporate which and really have incentive. gift the stuff and fourth health driven then quarter, by tax by And you

So, as you know, had third to quarter It double bump wasn't because second quarter is usually over year. you like quarter, light quarter third this bump. to the

year with seeing Accounts we're difficult make. If little are happen the now our go. over But really payments to so same where will stimulus, get do XXs. what the growth like the client. comparison is in mid we And another continued thing is year a stimulus

bump So another you'll see like that.

So rate, current be really growth it our already. the to over but decipher, XXs will which it'll be in is hard

next, percent while. a sustainable, to years. that know, for be a you in into think is couple point. don't you We any the So going to into though, pipeline base programs going you that's But think that significant our of this there can high going at happen. just XX it's know growth the forecasts GDP know, We're look We impact. of everything a at it what's saying would in we not assuming, XX to the minimum we're at we our be, that, know, growth built portfolio

Unidentified Analyst

[XX:XX:XX] Great, question. thanks, guys. the I'll let someone else ask


[XX:XX:XX] the I conference key, back am showing this sir. no to like questions time, in at turn those see to I our further would

Damian Kozlowski

today Have [XX:XX:XX] great Ok, a thanks joining call for thank I'll day Thank and soon. to you, you you, everyone. and the operator. talk


concludes call. this wonderful Thank for have gentlemen, welcome. You're a and today's Ladies you and your day. conference [XX:XX:XX] participation

You may all disconnect.