Press Release - Golub Capital

NEW YORK, September 5, 2023/ SEOUL, September 6, 2023 – Golub Capital today announced that Sean Chung has joined as a Managing Director and will be based in the Firm’s Seoul office, further expanding the Korea-focused team.

The Korea-focused team will now include:

Sean Chung, Managing Director, Korea. Prior to Golub Capital, Sean held positions as Managing Partner at OSR Holdings and Head of Global Alternative Investment Team at Shinhan Investment.
Anthony Yum, Managing Director in the Business Development group based in New York, will continue to focus on managing existing and new client relationships in Korea for the Firm. Prior to Golub Capital, Anthony was a Managing Director at Shinhan Investment America.
BoMee Chu, Managing Director and Co-Head of the Product Specialist team, based in New York. Prior to Golub Capital, BoMee worked at Antares Capital and J.P. Morgan.

“Over the past 7 years, we have built strategic relationships with Korean institutional investors, as LPs continue to diversify their portfolios with resilient private credit strategies,” said David Golub, President of Golub Capital. “We are excited about how our exceptionally talented Korea-focused team, now including Sean, will enable us to further expand and deepen our relationships with Korean investors.”

Sean Chung, Managing Director, Korea at Golub Capital added, “I am delighted to be joining a market leader like Golub Capital. Having partnered with the Firm over the years, becoming part of this growing team was a natural next step.”

This latest news builds on the Firm’s commitment to the Korean market and its recently expanded strategic partnership with the Korea Investment Corporation (“KIC”).

KIC CEO Mr. Seoungho Jin said, “We welcome Golub Capital’s expansion in Korea. Golub Capital’s growing business and presence in Korea will contribute to the more dynamic growth of the Korean finance industry and its institutional investors. With its continued commitment to the Korean market, we are pleased to further strengthen our established partnership going forward.”

About Golub Capital

Golub Capital is a market-leading, award-winning direct lender and experienced credit asset manager. We specialize in delivering reliable, creative and compelling financing solutions to companies backed by private equity sponsors. Our sponsor finance expertise also forms the foundation of our Broadly Syndicated Loan and Credit Opportunities investment programs. We nurture long-term, win-win partnerships that inspire repeat business from private equity sponsors and investors.

As of July 1, 2023, Golub Capital had over 825 employees and over $60 billion of capital under management, a gross measure of invested capital including leverage. The firm has lending offices in Chicago, New York, San Francisco and London. For more information, please visit golubcapital.com.

The latest $700 million incremental financing marks Golub Capital’s 13th transaction with Risk Strategies since 2015

NEW YORK, August 22, 2023 — Golub Capital acted as Administrative Agent, Lead Arranger and Joint Bookrunner on a $700 million delayed draw term loan for Risk Strategies, increasing the company’s unitranche facility to $4.45 billion. Risk Strategies, a leading U.S. insurance broker, is a portfolio company of North American-focused middle market private equity firm, Kelso & Company.

Golub Capital helped the borrower achieve an optimal result by agreeing to hold a meaningful portion of the incremental loan, adding to its already significant position in the credit, and leading a robust syndication process for the remainder. The Firm generated an oversubscribed book, allowing the transaction to be upsized from $500 million to $700 million while also tightening terms from initial talk.

“The unitranche market is open and private equity players value the scalability offered by unitranche facilities for their buy-and-build strategies,” said Chip Cushman, Managing Director at Golub Capital. “We are proud to lead one of the largest unitranche facilities in the market today and to offer flexible financing solutions that support the long-term growth of high-quality borrowers.”

Golub Capital started its relationship with Risk Strategies in 2015, when it was a $30 million EBITDA business. In 2019, the market-leading direct lender acted as Administrative Agent on a $1.64 billion unitranche facility to refinance Risk Strategies’ existing debt facilities. Since then, the unitranche has more than doubled in size.

“Golub Capital has consistently been a reliable financing partner, providing the balance sheet capabilities and capital markets expertise that continues to support Risk Strategies’ growth,” said Michael Nichols, Partner and Managing Director at Kelso & Company.

About Golub Capital Sponsor Finance

Golub Capital is a market-leading, award-winning direct lender and experienced credit asset manager. We specialize in delivering reliable, creative and compelling financing solutions to companies backed by private equity sponsors. The firm’s Direct Lending group provides buy-and-hold financing for sponsor-backed transactions with hold positions up to $700 million and arranges syndicated credit facilities up to $2 billion.

About Risk Strategies

Risk Strategies is the 9th largest privately held US brokerage firm offering comprehensive risk management advice, insurance and reinsurance placement for property & casualty, employee benefits, private client services, as well as consulting services and financial & wealth solutions. With more than 30 specialty practices, Risk Strategies serves commercial companies, nonprofits, public entities, and individuals, and has access to all major insurance markets. Risk Strategies has over 100 offices including Boston, New York City, Chicago, Toronto, Montreal, Grand Cayman, Miami, Atlanta, Dallas, Nashville, Washington DC, Los Angeles and San Francisco.

About Kelso & Company

Kelso & Company is one of the oldest and most established firms specializing in private equity investing. Since 1980, Kelso has invested approximately $19 billion of equity capital in 140 transactions. Kelso was founded by the inventor of the Employee Stock Ownership Plan (ESOP), and as a result, the principles of partnership and alignment of interest serve as the foundation of the firm’s investment philosophy. Kelso benefits from a successful investment track record, deep sector expertise, a long-tenured investing team, and a reputation as a preferred partner to management teams and corporates. Kelso has significant experience investing in healthcare and financial services. For more information, please visit kelso.com.

The Golub Capital Altman Index can provide early insight into financial performance of public companies and GDP in advance of earnings season.

NEW YORK, July 13, 2023 – Middle market private companies in the Golub Capital Altman Index experienced year-over-year earnings growth of 5% and revenue growth of 4% during the first two months of the second quarter of 2023.

Lawrence E. Golub, CEO of Golub Capital, said, “Revenue and profit growth in Q2 remained consistent with our expectation of continued muddling economic growth. Despite much talk in recent months of an economic slowdown, our data suggests that the U.S. middle market remains resilient and companies continue to adapt to the uncertain environment. Although the pace of revenue and earnings growth in Q2 was slower than in prior quarters, profit margins remained stable in aggregate. Muddling growth and stable profitability are welcome signs that Main Street largely shrugged off the impact of March’s bank failures.”

Dr. Edward I. Altman said, “While our Q2 data shows revenue and earnings growth in aggregate, there are notable differences in performance by sector. Revenue in the Industrials sector declined 4% year-over-year at the same time as profits grew 9%. It’s uncommon to see revenue fall while margins expand. In our view, this highlights the importance of pricing power. Industrial companies that were able to pass through price increases in prior quarters are now capturing the benefit of falling input costs. By contrast, labor market tightness weighed on margins in the Consumer and Healthcare sectors. The Technology sector had the best of both worlds: robust demand for productivity-enhancing software solutions and high operating leverage. In short, while our aggregate data supports an outlook of continued positive growth for the middle market, the trends are somewhat inconsistent across sectors.”

The Golub Capital Altman Index (“GCAI”), which is produced by Golub Capital in collaboration with credit expert Dr. Edward I. Altman, is the first and longest-running index based on actual revenue and earnings (defined as earnings before interest, taxes, depreciation and amortization, or “EBITDA”) for middle market companies. It measures the median revenue and earnings growth of approximately 110–150 private U.S. companies in the loan portfolio of Golub Capital, a leading middle market lender. Reported shortly before public company quarterly earnings season, the GCAI has served as a reliable indicator of the overall growth rates in revenue and earnings of public companies in market indexes such as the S&P 500 and S&P SmallCap 600 (“S&P 600”), as well as quarterly Gross Domestic Product (“GDP”), according to statistical back-testing dating back to 2012, when data began to be tracked.

The size and diversity of the Golub Capital loan portfolio ensure that the confidentiality of all company-specific information used in the index is maintained in both the aggregate and industry segment data.

We believe the results (1) are representative of the general performance of middle market companies, which are a major contributor to U.S. private sector employment; (2) can be easily compared to the performance of the public companies that make up major stock indexes; (3) are relevant to the aggregate economic performance of the U.S. economy and (4) provide timely information for the investment community.

The companies in the GCAI operate in a wide range of industries. Results are provided for the total universe of GCAI constituents and by industry segment. Given the index’s limited exposure to Financials, Utilities, Energy and Materials, comparisons are made to the S&P 500 and S&P 600 as well as to “adjusted” versions of those indexes that exclude the aforementioned sectors.

About the Golub Capital Middle Market Report
The Golub Capital Middle Market Report analyzes the results of the Golub Capital Altman Index (“GCAI”), which measures the median revenue and earnings growth of approximately 110–150 privately owned companies in the Golub Capital loan portfolio for the first two months of each calendar quarter. It compares these results to the financial performance of well-known market indexes, including the S&P 500 and S&P SmallCap 600. The GCAI is produced by Golub Capital in collaboration with credit expert Dr. Edward I. Altman. Effective Q2 2022, the Golub Capital Altman Index (GCAI) excludes Golub Capital portfolio companies that have recurring revenue-based credit facilities. The data referenced herein may not reflect all companies in the loan portfolio of Golub Capital during the time periods indicated.

About Golub Capital
Golub Capital is a market-leading, award-winning direct lender and experienced credit asset manager. We specialize in delivering reliable, creative and compelling financing solutions to companies backed by private equity sponsors. Our sponsor finance expertise also forms the foundation of our Broadly Syndicated Loan and Credit Opportunities investment programs. We nurture long-term, win-win partnerships that inspire repeat business from private equity sponsors and investors.

As of April 1, 2023, Golub Capital had over 800 employees and over $60 billion of capital under management, a gross measure of invested capital including leverage. The firm has lending offices in Chicago, New York, San Francisco and London. For more information, please visit golubcapital.com.

About Dr. Edward I. Altman
A leading expert on credit markets, Dr. Edward I. Altman is the Max L. Heine Professor of Finance, Emeritus at the NYU Stern School of Business, and Director of Research in Credit and Debt Markets at the NYU Salomon Center for the Study of Financial Institutions. He is currently an advisor to several foreign central banks. Professor Altman has published or edited two-dozen books and over 150 articles in scholarly finance, accounting and economic journals. He has been inducted into the Fixed Income Analysts Society Hall of Fame, served as President of the Financial Management Association, was an FMA Fellow, and was amongst the inaugural inductees into the Turnaround Management Association Hall of Fame. He received his MBA and Ph.D. in Finance from the University of California, Los Angeles.

Important Disclosure
The Golub Capital Altman Index is provided as an indicator only and does not constitute investment advice or the offer to sell or a solicitation to buy any security. Some of these statements constitute forward-looking statements, which may be predictions about future events, future performance, or future financial conditions. Some of these statements reflect opinions based upon the data presented in the Index, and these opinions may be incorrect. Actual results could vary materially from those implied or expressed in such forward-looking statements for any reason. The Golub Capital Altman Index has been created on the basis of information provided by third-party sources that are believed to be reliable, but the information has not been verified independently by Golub Capital. Golub Capital makes no warranty or representation as to the accuracy or completeness of such third-party information.

NEW YORK, July 10, 2023 – Golub Capital announced several promotions within its Direct Lending team, positioning the Firm for continued growth of its market-leading sponsor finance platform.

Spyro Alexopoulos has been promoted to Co-Head of Direct Lending, a role he will share with the team’s current leader, Gregory Cashman. Spyro joined Golub Capital in 2007 and was previously Head of Originations. He is a member of the Firm’s Investment Committee.

Matthew Fulk has been promoted to Senior Managing Director, Head of Originations, overseeing the Firm’s team of originators and managing overall sponsor coverage. Matt joined Golub Capital in 2004.

Jason Van Dussen, Marc Robinson, Robert Tuchscherer, Joseph Capasso and Gail Carmody will also be taking on additional responsibilities as part of the Firm’s Direct Lending leadership expansion.

“Our mission is to be best in sponsor finance, and we see significant opportunity ahead to further build our Direct Lending business,” said David Golub, President of Golub Capital. “These expanded leadership roles in Direct Lending will enhance our ability to deliver for all our stakeholders as the business continues to grow.”

“Each of these individuals has been an outstanding contributor to the success of our Direct Lending business for many years,” said Gregory Cashman, Co-Head of Direct Lending. “Together, we look forward to providing the reliable, compelling and creative financing solutions that make Golub Capital a preferred financing partner for sponsors.”

GCRED makes Golub Capital’s middle market direct lending franchise accessible to a broader client base across the private wealth market

NEW YORK, July 6, 2023 – Golub Capital today announced that the Golub Capital Private Credit Fund (“GCRED” or the “Fund”), a non-traded business development company, broke escrow with approximately $650 million in net proceeds on June 30, 2023.

Golub Capital, founded in 1994, is a leading lender to middle market companies with over $60 billion of capital under management as of April 1, 2023.¹ GCRED will access Golub Capital’s leading U.S. debt platform, proprietary deal flow, disciplined underwriting process and experienced management team. The Fund seeks to generate current income and capital appreciation by investing primarily in privately originated and privately negotiated investments, predominantly through direct lending to U.S. private companies in the middle market and upper middle market in the form of one stop and other senior secured loans.

“Golub Capital has a 20-year track record of investing in loans to middle market companies and building long-term partnerships with leading private equity sponsors,” said David Golub, President of Golub Capital. “We are pleased to provide private wealth investors greater access to what we believe is a differentiated offering from an experienced manager with a specialized focus on private credit.”

Golub Capital’s Intermediary Wealth Solutions business is a dedicated team focused on delivering compelling investment solutions and gold-standard client service to the private wealth market via wirehouses, regional broker-dealers, private banks, registered investment advisors and other intermediaries.

“We are seeing tremendous interest from private wealth investors in accessing Golub Capital’s private credit expertise and the success of the GCRED private offering reflects that,” said Tom Burt, Managing Director and Head of Intermediary Wealth Solutions at Golub Capital. “Our team looks forward to working with our existing and new partners to continue to provide compelling solutions suited to the needs of the private wealth market.”

Tom Burt joined Golub Capital in June 2022 and the Intermediary Wealth Solutions team has since expanded to 7 people across the United States.

As part of Golub Capital’s continued expansion into the private wealth market, the Firm announced a partnership with fintech platform iCapital in 2022, which would extend access to Golub Capital’s private credit strategies to the wealth managers on the iCapital platform.

Forward-Looking Statements
This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those expressed or implied in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the U.S. Securities and Exchange Commission. Golub Capital Private Credit Fund undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.

Disclaimer
This press release does not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of the shares referred to in this press release in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state or jurisdiction. A registration statement relating to these securities was filed and has been declared effective by the U.S. Securities and Exchange Commission. This offering is being made solely by means of a written prospectus forming part of the effective registration statement. A copy of the final prospectus relating to the offering must be made available to you prior to making a purchase of shares in connection with this offering and may be obtained from the Fund’s website, when available, at  www.gcredbdc.com.

Capital under management is a gross measure of invested capital including leverage.

NEW YORK, June 30, 2023 — Golub Capital acted as Administrative Agent and Lead Left Arranger to finance Cinven’s acquisition of Archer from RSA Security, a portfolio company of Clearlake Capital Group, L.P. and Symphony Technology Group.

The financing will help support the long-term strategic growth of Archer’s integrated software platform as a standalone business following the initial carve-out from RSA Security. Cinven will work in close partnership with management to expand Archer’s presence in key markets and verticals across both North America and Europe.

“We are pleased to deepen our relationship with Cinven and support their investment in Archer, a leading provider of mission critical software,” said Hyun Chang, Managing Director at Golub Capital. “We look forward to seeing what Cinven and Archer achieve as they embark on this next phase of growth.”

Golub Capital has been a partner to Cinven since 2019. The Archer acquisition is the Firm’s first direct lending deal with the sponsor.

About Golub Capital Sponsor Finance
Golub Capital is a market-leading, award-winning direct lender and experienced credit asset manager. We specialize in delivering reliable, creative and compelling financing solutions to companies backed by private equity sponsors. The firm’s Direct Lending group provides buy-and-hold financing for sponsor-backed transactions with hold positions up to $700 million and arranges syndicated credit facilities up to $2 billion.

About Archer
Archer is a leading provider of integrated risk management (IRM) solutions that enables customers to improve strategic decision-making and operational resilience with a modern technology platform that supports qualitative and quantitative analysis driven by both business and IT impacts. As a true pioneer in GRC software, Archer remains solely dedicated to helping customers manage risk and compliance domains, from traditional operational risk to ESG. With more than 20 years in the risk management industry, Archer’s customer base represents one of the largest pure risk management communities globally, with more than 1,200 customers, including more than 50% of the Fortune 500.

About Cinven
Cinven is a leading international private equity firm focused on building world-class global and European companies. Its funds invest in six key sectors: Business Services, Consumer, Financial Services, Healthcare, Industrials and Technology, Media and Telecommunications (TMT). Cinven has offices in London, New York, Frankfurt, Paris, Milan, Madrid, Guernsey and Luxembourg.

Cinven takes a responsible approach towards its portfolio companies, their employees, suppliers, local communities, the environment and society.

Cinven Limited is authorised and regulated by the UK Financial Conduct Authority. In this press release ‘Cinven’ means, depending on the context, any of or collectively, Cinven Holdings Guernsey Limited, Cinven Partnership LLP, and their respective Associates (as defined in the Companies Act 2006) and/or funds managed or advised by any of the foregoing.

For additional information on Cinven please visit www.cinven.com and www.linkedin.com/company/cinven/.

David Golub, President of Golub Capital was also Named a Changemaker in Private Debt

NEW YORK, June 20, 2023 – Golub Capital has been named Private Debt Investor (PDI) Lender of the Decade, Americas and Senior Lender of the Decade, Americas. Additionally, David Golub, President of Golub Capital, was chosen as one of 30 top changemakers driving the evolution and growth of the private credit asset class.

“We are honored to be recognized in these prestigious awards and thank our partners for their support,” said David Golub, President of Golub Capital. “We pride ourselves on being a partner of choice for investors and private equity sponsors, with a focus on delivering consistent, premium returns and market-leading financing solutions.”

Recipients of Lender of the Decade, Americas and Senior Lender of the Decade, Americas awards were determined by which firm received the most awards in each category since 2013. Including these latest accolades, Golub Capital has won 21 PDI awards in that time. The annual PDI Awards are voted on by thousands of the publication’s industry readers, making them the only rankings determined solely by the industry for the industry.

NEW YORK, June 13, 2023 — Golub Capital acted as Administrative Agent, Joint Lead Arranger and Joint Bookrunner on a unitranche facility in support of Warburg Pincus’s strategic investment in ParetoHealth. Great Hill Partners, which invested in ParetoHealth in 2019, will retain an equal stake to Warburg Pincus, alongside a significant continuing investment from the current management team. Terms of the deal were not disclosed.

ParetoHealth provides employer healthcare benefits solutions that enable small and midsized businesses to self-fund their health benefits.

Chip Cushman, Managing Director at Golub Capital, said, “We are thrilled to continue supporting ParetoHealth backed by two top tier sponsors with whom we have longstanding, valued partnerships.”

Golub Capital has been a lender to ParetoHealth since July 2021. This is the Firm’s ninth transaction with Warburg Pincus since 2020.

About ParetoHealth
ParetoHealth forms and manages employee benefit group captives that mitigate the year-to-year volatility and risk inherent in self-insurance, thereby allowing employers to focus on reducing healthcare costs. Members of ParetoHealth captives gain access to an exclusive platform of risk management and cost-containment initiatives to help them provide high-quality and affordable healthcare to their employees. For more information, visit www.paretohealth.com.

About Great Hill
Founded in 1998, Great Hill Partners is a private equity firm targeting investments of $100 million to $500 million in high-growth companies across the software, digital commerce, financial technology, healthcare, and digital infrastructure sectors. With offices in Boston and London, Great Hill has raised over $12 billion of commitments and invested in more than 95 companies, establishing an extensive track record of building long-term partnerships with entrepreneurs and providing flexible resources to help middle-market companies scale. Great Hill has been recognized for its industry leadership, being ranked #3 on March 9, 2023 in the 2022 HEC Paris-Dow Jones Mid-Market Buyout Performance Ranking (published on March 9, 2023), which evaluated fund performance of 563 leading private equity firms between 2009-2018. In addition to ParetoHealth, Great Hill’s portfolio of healthcare companies includes Clearwave, IVX Health, Quantum Health, RetireeFirst, RxBenefits, and Vatica Health. Prior healthcare investments include bswift, PartsSource, Passport Health Communications, PlanSource, Qualifacts, and SterilMed.

For more information, including a list of all Great Hill investments, please visit www.greathillpartners.com, and follow us on LinkedIn.

About Warburg Pincus
Warburg Pincus LLC is a leading global growth investor. Founded in 1966, Warburg Pincus has raised 21 private equity and 2 real estate funds, which have invested more than $109 billion in over 1,000 companies in more than 40 countries. The firm has more than $80 billion in assets under management. Since inception, Warburg Pincus has invested over $16 billion in more than 180 healthcare companies and over $21 billion in more than 150 financial services companies. Notable healthcare investments include Alignment Healthcare, Ensemble Health Partners, Global Healthcare Exchange, Modernizing Medicine, Norstella, Quantum Health, Sotera Health, and Summit Health, and notable financial services investments include Aeolus Re, Arch Capital, Edelman Financial Engines, Fetch by The Dodo, Foundation Risk Partners, IntraFi Network, Kestra Holdings, K2 Insurance Services, McGill and Partners, and RenaissanceRe. The firm is headquartered in New York with offices in Amsterdam, Beijing, Berlin, Hong Kong, Houston, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo, Shanghai, and Singapore. For more information, please visit www.warburgpincus.com. Follow us on LinkedIn.

NEW YORK, May 18, 2023 – Golub Capital has been named Middle Market CLO Manager of the Year at DealCatalyst’s inaugural U.S. CLO Awards. The winners were selected by members of the LSTA, the premiere trading association for all participants in the U.S. loan market. The Firm was honored at the Annual CLO Industry Conference held in New York City this week.

“We are delighted to have won this award,” said Alan George, Managing Director, Head of Structured Products at Golub Capital. “One of the Firm’s key differentiators is our ability to deliver consistent investment performance, even in challenging markets.”

DealCatalyst launched the CLO Industry Awards in partnership with LSTA to accurately reflect the opinions held by CLO Managers, Investors and the many service providers in the CLO market while also highlighting the excellence in the industry over the past year. Once finalists in each category were selected, DealCatalyst was able to collect 550+ votes from over 200 institutions, making this the largest survey of opinion of the US CLO market.

About Golub Capital
Golub Capital is a market-leading, award-winning direct lender and experienced credit asset manager. We specialize in delivering reliable, creative and compelling financing solutions to companies backed by private equity sponsors. The firm manages 49 CLOs as of January 1, 2023. We nurture long-term, win-win partnerships that inspire repeat business from private equity sponsors and investors.

As of January 1, 2023, Golub Capital had over 775 employees and over $60 billion of capital under management, a gross measure of invested capital including leverage. The firm has lending offices in Chicago, New York, San Francisco and London. For more information, please visit golubcapital.com.

The Golub Capital Altman Index can provide early insight into financial performance of public companies and GDP in advance of earnings season.

NEW YORK, April 13, 2023 – Middle market private companies in the Golub Capital Altman Index experienced year-over-year earnings growth of 11% and revenue growth of 11% during the first two months of the first quarter of 2023.

Lawrence E. Golub, CEO of Golub Capital, said, “Revenue and profit growth again were positive surprises, building on the strength we highlighted in last quarter’s report. Our data suggests that many analysts continue to underestimate the health of the U.S. economy and the resilience of private equity-owned businesses. Profit margins on average expanded as our sample of companies continued to adapt to a challenging operating environment. Although the data in this report doesn’t capture the impact of banking system stress in March 2023, we believe the strength of our January and February data is encouraging for the upcoming earnings season.”

Dr. Edward I. Altman said, “Growth exceeded our expectations across all four sectors we track. The acceleration of revenue growth in the Consumer sector suggests that the tailwind of falling energy prices more than offset the headwind of rising interest rates on mortgage and credit card debt. While Consumer Revenue continued its strong growth, we do observe some softness in consumer profit and cash flow growth compared to prior quarters. Moreover, profit margins expanded even as the labor market remained strong, which suggests that cost-control measures are having an effect. That said, we’d advise caution in extrapolating from our data given the uncertainty about the potential economic impact of recent bank failures.”