Atlantic Union Bankshares Corp (AUB) 2009 Q4 法說會逐字稿

Good day, everyone, and welcome to today's StellarOne earnings conference call. As a reminder, today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Ms. Linda Caldwell. Please go ahead, ma'am.

Thank you, Elizabeth. Today we have with us O.R. "Ed" Barham, Jr., President and Chief Executive Officer of StellarOne Corporation, and Jeffrey W. Farrar, Executive Vice President and Chief Financial Officer. Mr. Barham and Mr. Farrell will review results for the fourth quarter of 2009, and after we hear comments from Ed and Jeff, we will take questions from those listening.

Please note StellarOne Corporation does not offer guidance. However, there may be statements made during the course of this call that express management's intentions, beliefs or expectations. Actual results may differ from those contemplated by these forward-looking statements.

Now, may I introduce our President and Chief Executive Officer, Ed Barham.

Thank you, Linda. Good morning to everyone. Today's call will follow our typical format. I will first provide some comment on the Company's fourth-quarter and year-end results, followed by further detail and comment around our current asset quality and market conditions and future outlook for our Company.

I will then be followed by Jeff Farrar, Executive Vice President and CFO for StellarOne Corporation, who will share detail on some further underlying financial data and comparisons. Once we have concluded our remarks, as Linda has indicated, we will be happy to take questions.

For the fourth quarter of 2009, StellarOne earned net income of $546,000. On a per-share basis to our common shareholders, which deducts from net income, dividends and the discount accretion of preferred stock, this was a breakeven.

This compares favorably to our 2009 third-quarter loss of $9.4 million and fourth quarter 2008's loss of $845,000. As you will recall, third quarter 2009's results was impacted by $20.1 million in provisioning, as management took aggressive steps to write off a significant level of nonaccrual loans, approximately $13.9 million, and to build our loan-loss allowance for estimated losses in the portfolio.

Fourth quarter 2009's charge-off levels were $4.4 million and required provisioning amounted to $3.5 million for the same quarter. There were some significant one-time charges in the fourth quarter, which Jeff will detail later.

Our allowance coverage ended at 1.84% versus third quarter 2009's level of 1.85%. Our coverage of all nonperforming loans at year-end was essentially unchanged from third quarter '09 at 66%.

For the year, StellarOne Corporation posted a loss before preferred dividends of $8.5 million. On a common per-share basis, the loss was $0.46 compared, to a $9.4 million net income for fiscal year-end 2008, or $0.45 per share -- average share. The loss for the year was within management's estimates.

Fourth quarter's results do not -- excuse me -- fourth-quarter results do provide for some guarded optimism that the rate of loan deterioration and corresponding loan provisioning may be slowing. If there is a reason for continued optimism over the next few quarters, much of this can be attributed to the poor underwritten credits washing through in the early part of this recessionary cycle.

The ongoing concern as we look to the new year is how will a continuing sluggish economy affect previously strong credits. The economy is the single biggest determinate to a sustained improvement for our Company, and all banking, for that matter.

While Virginia still enjoys one of the lowest rates of unemployment, with a statewide average at 6.9%, which I believe is perhaps the ninth best in the nation, this unemployment rate is slightly up from several months ago. An improvement in our operating results will likely not be charted by a straight upward line quarter to quarter, but an overall improvement if measured at year-end. The recovery appears to be slow, and we will continue to operate with that mindset.

On the asset quality front, there was some good news for the quarter ended. StellarOne finished the year with nonperforming loans to total assets of 2.18% compared with 2.27% as of September 30, 2009. While an improvement, it was higher than the 1.66% as of December 31, 2008.

Nonperforming loans totaled $59.3 million at 12-31-09, up from September 30, 2009's level of $59.1 million. But as you can see, just barely. Nonperforming assets totaled $66.3 million at December 31, 2009 compared to $67.7 million at September 30, 2009. Foreclosed assets totaled $4.5 million at 2009 year-end, which also was an improvement from September 30, 2009 level of $5.4 million.

OREO ended the year at essentially the same level where we started in 2009. The reduction in OREO is a credit to our workout group. We anticipate more future reductions of OREO as our workout team has become more effective at this task and as we increase resources in this area. Increasing our efforts at an accelerated reduction of OREO properties is consistent with our plans to shrink the holding period on these foreclosed assets.

Overall, our pass-due levels ended the year at 2.46%, only slightly higher than our average for the year of 2.35%, but also slightly higher than September's overall past-due level of 1.59%. Some of the higher year-end past-due levels can be explained because of the higher historical nature of past dues for this time of year or for the fourth-quarter holiday season, and a 30-day month quarter end versus a 31-day month quarter end.

There also were approximately $10 million of A&D past dues that were administrative past dues. A large part of these administrative past dues result from management's extended attempts to restructure and renegotiate, which lengthens the renewal periods. Even given these facts, we continue to be concerned that past-due levels are still too elevated for where we would like to see them.

Commercial real estate continued to have the best payment history for the quarter and for the year, ending at 1.41%, followed by consumer at 1.78% and commercial at 2.13%. Real estate construction was the worst at 4.53%, and averaged 4.92% for the year.

Our accruing TDRs have grown throughout the year and now stand at $20.7 million, of which $19 million are a result of our in-house mortgage modification plan. We began this program in earnest in April 2009 as a way to help homeowners that had been hurt by the economy and the economic turndown. Our experience with this program has been very good, with only $2 million of these reworked mortgages defaulting and moving to nonaccrual, and now will be moved to foreclosure at this time.

Of the remaining $18 million in performing TDRs, it is hoped that the majority of these will ultimately be moved back to normal performing status after some period of successful payment history. Some positive movement in this should be seen in the coming quarters.

Some additional comparative data relative to asset quality. As we have said for some time now, our Achilles' heel during this recessionary period has been the A&D loans made in an area known as Smith Mountain Lake. As of 12-31-09, we had charged off $8.5 million of A&D loans in this area.

To date, this particular market still accounts for $18.6 million of the current total of $59.3 million of NPLs, or roughly 31%. Over $10 million of this $18.6 million is to one developer, but several different projects. We have written these projects down to what we believe to be solid carrying values, and additional $10.2 million of the total $59.3 million of our NPLs are A&D loans scattered throughout the remaining part of our franchise. But no one credit for geographic concentration exists the size and magnitude of the Smith Mountain Lake exposure.

Again, we believe we have been conservative in our carrying values on these Smith Mountain Lake problem credits and feel well-positioned to move these properties at some future date, once we are in a position to do so.

It is also important to note we have seen few to any addition to our problem loans from the Smith Mountain area since first quarter of 2009.

As we move forward, we will continue to reduce our exposure to A&D lending and have, in fact, reduced our portfolio exposure by roughly $90 million over the last year. We are repositioning our lenders to seek more commercial and industrial type credits, and are supplementing this effort by adding new C&I lenders that have come to us in-market from some of the larger banks, most notably in the Richmond market and Charlottesville.

Our capital and liquidity levels remain strong, and I will leave details of this topic to Jeff to discuss with you in a moment. And we are feeling very good about our position to move forward and take advantage of revenue and growth opportunities.

I know the question on TARP repayment will be of interest, so let me close with our Company's position relative to TARP. Given the depressed price of our stock, the capital raised would be seriously dilutive. We do not desire any additional capital at this time. Our goal is to continue to improve our earnings, while also cleaning up our balance sheet to minimize the need to raise capital as a condition of repaying TARP. We have no set time to do this. We just want to ensure that when we are ready to pull the TARP repayment trigger, all parties are comfortable in doing this.

I will now stop, and I will now ask Jeff to offer his comments.

Thank you, Ed, and good morning, everyone. Thank you for joining us today. I have several topics I would like to cover, and will start with a review of earnings results for the quarter.

Certainly, it was encouraging for us to see a swing to profitability in the fourth quarter, albeit still very much compressed from what we would like to be. Earnings of $545,000, or $0.02, a share essentially covered the dividends and discount accretion associated with the preferred stock investment, and also held our 2009 year-end loss to $10.4 million to common shareholders, or $0.46 per common share.

Certainly a contributing factor to the earnings improvement for the quarter was the reduction in loan-loss provisioning on the strength of significantly reduced net charge-offs and a modest reduction in nonperforming assets. Ed, I think, has covered that topic pretty well.

Another highlight for the quarter was the return of some core revenue growth. From a revenue perspective, operating revenues amounted to $31.2 million for the quarter, up from $30.4 million last quarter.

As noted in our release, we saw net interest income grow over 3.5% for the quarter on the strength of a 15 basis point improvement in net interest margin. This improvement was driven by a 21 basis point improvement in cost of funds, with the largest component representing that of the CD portfolio. This improvement in the CD funding costs will slow somewhat in first quarter, but we still have over $150 million of CDs repricing in the first quarter, with a blended cost of [243], which should represent some additional lift on our overall cost of funds.

That, coupled with some improvement in money market costs, should allow some additional lift, as well. In addition, margin improvement for the quarter would have been approximately 5 basis points higher if not for the interest reversals on some new NPLs coming on, as well as the impact of the accruing TDRs for the period.

Noninterest revenues on an operating basis were $7.7 million, essentially flat to that of the third quarter. Growth in mortgage banking revenue of 12.5% was certainly positive and offsets some contraction in our wealth management and retail banking lines of business.

We also had some improvement in other operating income sequentially, associated with some pass-through investments and tax credit partnerships and a couple other partnerships we account for under the equity method of accounting.

Full-year losses of $1.8 million for the quarter reflect our continuing efforts to aggressively move nonperforming assets off the books. While over half of those losses represented writedowns, we were able to move approximately six individual properties during the period and have another $2.2 million under contract. Many of those writedowns were directly associated with those contracts. The largest single loss was associated with a fair value adjustment of $300,000 associated with the Smith Mountain Lake property, consisting of land and building lots.

The securities impairment of $655,000 for the quarter reflected continuing devaluation of our equity portfolio and community bank stocks. You may recall we took a large OTTI charge on that in the third quarter, as well. The good news is that we have now written this portfolio down to an aggregate basis of $500,000, or, on a per-share basis, $2.00 a share for the shares we have outstanding. So we would certainly hope for some cost recovery and gain potential on these stocks as valuations begin to recover.

Let's now address noninterest expense or overhead. It was a tough quarter for us from an efficiency standpoint, with noninterest expenses amounting to $24.9 million, or $2.1 million or a 9.4% increase over third quarter. The primary drivers for this increase included compensation and benefits cost, as well as professional fees.

We have replaced much of our recent FTE reductions with higher-cost staffing in the areas of regulatory compliance, loan review and mortgage operations. However, a good portion of the increase this quarter compared to last quarter was timing in nature, and reflects some higher than normal and year-end related adjustments associated with severance payments, hiring costs, mortgage commissions and production bonuses. I would estimate that approximately $1.1 million or 9% of the increase in compensation and benefits as compared to last quarter is nonrecurring in nature.

On professional fees, it was an unusual quarter for consulting fees associated with regulatory compliance as we tried to shore up some processes and some underlying documentation. We also had a continuation of exceedingly high legal costs associated with our loan workouts.

Our FTE number came in at 823 versus 825 on a linked-quarter basis, reflecting a net reduction in FTE associated with one branch closing and one sale. It should also be noted for a year-to-year comparison, the total compensation and benefits for 2009 was actually slightly less than that of 2008.

We essentially completed the first phase of a branch consolidation initiative in the fourth quarter, as well, having closed, consolidated or sold a total of eight branches over the past 15 months, generating net annualized cost savings of $2.1 million and pretax gains of $1.2 million. A good portion of this gain will actually be realized in first quarter.

We completed and overlaid on our 2010 budget a companywide cost-save initiative that will result in another $2.6 million in annualized cost saves, as well as revenue enhancements annually.

In spite of additional resource needs for credit administration, compliance and growth in mortgage operations, we reduced FTE levels as compared to 2008 by over 2%, and are now down approximately 25% from premerger levels in early 2008. These initiatives will begin to reflect improvement in our efficiency ratio as revenues stabilize.

If we could kind of shift gears here and talk about the balance sheet, despite the economic challenges, capital levels remain strong. Tier 1 capital came in at 13.21%, or 12.01% without the TARP investment. Tangible common equity was 9.23% at quarter-end, with tangible book value per common share of $11.86.

We had some expected average deposit contraction for the fourth quarter related directly to the amount of CD repricing that occurred during the period. Average deposits amounted to $2.41 billion versus $2.43 billion for the third quarter.

For the year, we experienced period-end deposit growth of $113 million, or 4.9% growth. We also noted some mix improvement during the course of the year.

Average securities grew $344.2 million -- grew to $344.2 million for the quarter, representing an increase of $17 million, or roughly 5%, while cash and cash equivalents at quarter-end amounted to $148.4 million.

We continue to have modest contraction on the loan portfolio, with much of the contraction involving real estate, and in particular, the acquisition and construction portfolio. As Ed mentioned, we saw annual shrinkage in that component of our portfolio, representing almost 23.5% from a percentage standpoint. The portfolio itself now stands at $274.2 million, and that represents 12.6% of the total loan portfolio.

We have added some seasoned lenders and will continue to do so, because it is going to be important for us to get some lift in this loan portfolio to support our revenue expectations and support our margin.

In conclusion, our primary goal for 2010 will be to return the Company to an acceptable level of profitability. As previously stated, we are cautiously optimistic for recent trends and will renew our focus on improving results for each of our lines of business. While we will continue to have challenges on the asset quality front, we are determined to improve performance.

I will now turn it back over to Linda for the Q&A discussion.

Thank you, gentlemen. Now we will move to the question-and-answer portion of this conference call, so at this time, I will ask our operator, Elizabeth, to open the call for your questions.

(Operator Instructions) Allan Bach, Davenport & Company.

Thanks for all the good detail. Do you mind chatting a little bit about the mortgage banking effort and perhaps any trends that you are seeing there through the first part of the first quarter?

Sure. It continues to be a very strong market for us. The numbers are actually down a little bit from January of last year, but if you look at it sequentially to what we experienced in fourth quarter, still seeing real good volumes. The mix of purchase and refi has slipped a little bit back to refi, given the most recent drop in interest rates.

But we are encouraged. We have a lot of good things going on there. We've got a good leader of the troops and are really, just to be honest with you, focused on trying to generate a little more profitability out of the unit as we move forward into 2010.

Very good. That's it for now. Thank you.

Catherine Mealor, Keefe, Bruyette & Woods.

Your NPLs came down or were basically flat this quarter, which was really great to see. Do you think that we've seen a peak in the NPLs, or do you think that it is too early to tell? I know past-dues being up, that may be an early indication that NPLs have not peaked. But if you think they haven't peaked, when do you think in 2010 you might start to see a peak in the NPLs? Thanks.

I think it is too early for us to tell.

And in the increase in your past dues, were most of those from your residential mortgage portfolio or are you seeing some increase in past dues in your commercial real estate?

Most of the past dues, I think, are the administrative past dues really that I would -- that I referred to. There were about $10 million worth there. And part of that is a function of our lenders working with credits that they are trying to reposition and better position the bank relative to these credits. A lot of them are real estate related.

And so the negotiation period, if you would, almost becomes a tactic to improve our position. And so that is part of the drag. And again, year-end being what it is, 31-day end of the quarter versus 30-day doesn't sound like a lot, but it typically is a lot, especially when you get into mortgage payments on residential.

So we didn't really see -- even though the number might have been up slightly, we didn't see anything there that I would say out of the ordinary. But certainly, again, way higher than we want it to be. But we are mindful of it. We are watching it. But it is just too early to tell.

Catherine, I would add that there is, I guess, an emphasis on residential within that past-due number. There's a little over $21 million in residential paper past due on a total of almost $52 million. And I'm looking at the 30-to-89 day bucket. That obviously is a fairly large portion of what is past due in the portfolio.

Okay, great. Thank you so much.

Avi Barak, Sandler O'Neill.

A few quick questions for you. First, Ed, in your comments, you had mentioned that of the $18.6 million of nonperformers at Smith Mountain Lake, about $10 million was to one developer. Is that the biggest exposure you have in nonperformers, or could you just give us some perspective on how big that is compared to other concentrations in the total construction bucket?

Yes, that is the biggest non-performer, Avi. And I would say it is probably -- and I'm just going to make a guess here, but I don't think I'm wrong -- it is probably darn near twice the size of anything else we've got -- close to that anyway.

Okay, thanks. And then also you had mentioned in previous conference calls that there were some auctions of properties down at Smith Mountain Lake. Are those still ongoing, and could you give us some color on the results of those auctions?

There haven't been many of those of recent. We are in the middle of, if you would, some legal wranglings as we try to deal with some of the larger exposure we've got. And what you will see, I think eventually, is probably some of the NPLs dropping to foreclosure, so that we can at that point deal with them.

And as I alluded to earlier, I think we've written them down fairly well, so that -- and the properties themselves are of quality nature. I think that hopefully, cautiously optimistic that once we can dictate the outcome and market these properties, I think we'll get some interest in them.

So you would say it is more of a legal thing, not a seasonal issue or just wintertime (multiple speakers)?

Yes, it is seasonal, too. Right now is not -- it is a slow time and people aren't out looking. And then it's a combination too is -- current borrowers have different opinions of what values are and what we think values are. And their targets, their goals are different than ours. Ours are to clean up the project and move on. Theirs are to continue to try to get top dollar for what is going on. So there is a natural tension there, friction, that is going to come to a head at some point.

Sure. And then lastly, Ed, on your comments about your mortgage modification program, could you provide us some data on redefault rates in that portfolio for borrowers that have entered the modification program, and then what the trigger is to eventually just move to foreclosure, that this person is just not going to get their act together?

What I will do is I will have Jeff circle back with you on the specifics. But let me just tell you that our history has been good, has been much better than the average in the industry for refi -- for modification programs. But I just don't have those numbers off the top of my head. But we will get them to you.

And I think what you will see is a good response and a good history we've had with them so far. So it's been a good program and we've been able to help borrowers that unfortunately are under some bad times.

Fair enough. Thank you.

(Operator Instructions) Michael Rose, Raymond James.

Can you speak to your potential appetite for FDIC-assisted acquisitions?

I would say low. We are focused to clean up balance sheet and return to profitability right now, so I'm not really focused on any kind of acquisition activity.

Okay. And secondarily, when I look at the margin, you guys did a good discussion of how -- on the liabilities side, on the deposit side. But on the loan side, your loan yields continue to decline. Are we getting close to a trough in loan yields?

Month to month, we are seeing 1 to 2 basis points of yield contraction in the portfolio. So there is still some contraction occurring, albeit fairly modest. The biggest issue for us, frankly, is turning the growth engine and getting some additional leverage in the balance sheet. As you can see, we've lost some leverage through this downcycle relative to the loan portfolio and its percentage of average earning assets. So what we are trying to focus on, quite honestly, is getting some loan growth.

Okay. Can you disclose where the margin ended the quarter?

Where it ended the quarter?

Yes.

You mean for the month --?

For December.

You know, I would rather not do that, Michael, because you get some distortion because of the nonaccrual interest, and I just don't think that is a good indicator. So I would rather not do that.

Fair enough. Finally, I think last quarter you stated that you were getting about $0.50 on the dollar for your dispositions at Smith Mountain Lakes. A lot of other banks have reported slight increases in realization rates. Can you kind of speak to what you are seeing there now?

Really haven't had enough activity over the last quarter to speak to that. It has been kind of quiet, because again, we've kind of gotten down to the, if you would, the bottom of the barrel on those assets. So there has been very little activity.

I think if we move to some foreclosure activity second quarter or so, I think we will then have a better feel for what the dollars are. But our indications are there is some activity improving at the Lake. But our personal -- we can't speak to that personally. We haven't had a lot of activity over the last quarter.

Okay. Thanks, guys.

Bryce Rowe, Robert W. Baird.

Jeff, can you -- just kind of a balance sheet item -- the goodwill looked to have moved up by almost $40 million quarter-over-quarter -- or sequentially. Am I reading that wrong?

No, you're reading it right. Let me tell you the story. During the quarter, we were approached by our external audit firm, Grant Thornton. They had -- were, I guess, undergoing an inspection from a public accounting oversight board, and had questioned the way we calculated the purchase price and the transaction with FNB and VFG.

And to boil it down, we had used a purchase price assumption using a stock price at the date of closing. And we did that with good intention. There was a feeling that because of the noise associated with the transaction, particularly on the FNB side, that the value -- and there is some literature that supported that -- that the valuation date would have been better or more fairly stated if we used it as of closing versus as of announcement date. Which, at the time, the literature -- pretty much most transactions were recorded at announcement date.

So we went through some discussion with [peek-a-boo] and ultimately reached the decision that they were right, that we needed to go back and use the announcement date, which would have been July of the previous year, to value, if you will, the transaction. So the difference in stock price times the number of shares outstanding ended up being about a $38 million adjustment to goodwill. We increased goodwill, we increased equity.

It doesn't impact any of the risk-based capital ratios. It doesn't impact tangible book value. We will restate prior periods for consistency when you see our year-end financials. So that's pretty much the story.

The good news -- I guess the other thing that I should mention is that where it does impact us potentially is on impairment, because we now have another $38 million in goodwill that we have to justify on the balance sheet. Fortunately, we were able to do that through our impairment testing for the fourth quarter, and that was no small task in light of where market caps are right now.

And just to kind of go back to the discussion about loan yields, Jeff, with Michael, you mentioned loan yields coming down on a basis point or two every month. Is it purchase accounting adjustment for the quarter? I think you had told us earlier that it was going to be about $275,000 for the fourth quarter. Is that right?

That seems to sound about right, but I would tell you that it is pretty much a non-event now. There really isn't anything left there, Bryce.

Okay. And then from a -- can you remind us from a branch sale perspective, you sold one here in the fourth quarter and then you have one coming up in the first quarter. Is that correct?

That is correct. We sold one in the fourth quarter, had a net gain of about $250,000, and then we'll have one in the first quarter. And the gain -- I think the gain is going to be between $700,000 and $800,000 after expenses. Gross premium was a little over $900,000. And that closed on or about January 15.

Okay, last question. You guys talked about having success in hiring lenders in Richmond and in Charlottesville. Do you expect to be able to offset some of the loan paydowns and shrinkage in some portions of the portfolio in 2010 with some, I guess, gross loan growth from those new lenders and from other efforts?

That is the intent, clearly the intent. We are just needing to look at high-growth markets and take advantage of those.

Okay. Thanks, guys.

Carter Bundy, Stifel Nicolaus.

Most of my questions have been asked, but I might have a few questions on the margin side. Jeff, do you have a schedule of what you have repricing on the CD portfolio in the first quarter?

Yes.

What is the approximate amount, and what do you think it is going to reprice into, assuming you all keep it?

Well, I think what I quoted was $150 million repricing at a cost -- a blended cost of 243. Linda, I may ask for some help here -- average CD prices right now -- a little over 1%, I guess.

Exactly.

So we've got 125 basis points roughly to work with.

Okay. So it looks like you might still have some room here to continue to move lower on the deposit side?

Yes.

For the margin. Okay.

(multiple speakers) Obviously, that is going to be impacted to some degree by just competitive pressures. We may have to pay a little more. And certainly on our better relationships, we will pay up to keep the deposits (inaudible).

Okay. Are you generally seeing competition pick up a little bit for the deposit side right now?

No.

No what?

It's still pretty rational.

Okay.

With a few outliers.

Okay. And then just a final detail question. The FDIC estimated costs going forward, would this be a decent run rate in the fourth quarter, of about $1 million?

Yes.

Okay. Thank you all very much.

(Operator Instructions) Steve Moss, Janney.

Most of my questions here have been answered. I did want to follow up on the construction portfolio. What is the mix between land, resi construction and commercial construction?

(multiple speakers) Let us check some numbers here, see if we can give you that.

Okay. And I guess my one follow-up on that would be is what's your remaining exposure to Smith Mountain Lake in total?

18. -- excuse me -- yes, $18.6 million.

Is the total exposure?

Yes.

Okay, I misread that.

$10 million of that is to one borrower. Multiple projects.

Steve, all I've got on the construction breakout is what we do for call purposes. So the one-to-four-family residential construction would be $85.8 million. All other construction loans, land development, land loans, $189.1 million. And then farmland -- secured by farmland, $22.3 million.

Okay, thank you very much, guys.

[Bryce] Rowe.

A quick follow-up, Jeff, just on the branch gain for the quarter, $250,000. I'm looking on the income statement. It looks like gain on the sale of premises and equipment was $30,000. What was offsetting that $250,000 gain?

A component of it is embedded in Other. The piece, the real estate piece that we sold, we took the gain on and embedded that in property and equipment. The largest part of the gain is sitting in Other.

We are most likely going to break that out, just given the significance of the dollars in the first quarter. So you will be able to see the aggregate gain in one line item as we go forward.

Okay, thanks. Appreciate it.

With no questions remaining, I would like to turn the call back over to your speakers for any additional or closing remarks.

Everyone, thank you for joining us and for your questions today. We appreciate your participation, and this concludes today's teleconference.

Thank you. Once again, that does conclude today's conference, and we thank you for your participation.