BankUnited Inc (BKU) 2003 Q1 法說會逐字稿

At this time I would like to inform you that this conference is being recorded and that all participants are in listen-only mode. At the request of the company we will open the conference all for questions and answers at the conclusion of the call. This call contains forward-looking statements that could cause future results to vary materially from current management expectations, include but aren't limited to general economic conditions, change in interest rates, deposit flows, loan demand, real estate values and competition.

Changes in accounting principals, policies or guidelines, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological facts affecting the company's operations, pricing, product and service. I will now turn the call over to Alfred Camner chief executive officer. Sir the floor is years.

Good afternoon. Thank you all for joining us on this first quarter fiscal 2003 earnings conference call. With me on this call are Ramiro Ortiz, president and chief operating officer, and Bert Lopez, chief financial officer. I'm very pleased to report that this quarter yielded our 8th consecutive period of earnings for the company with a high of 8.8 million, which translated to basic and diluted earnings per share of 34 and 32 cent respectively. Net income results are up 28% from the first quarter of last year. There have been several drivers that contributed to the strong performance this quarter and they will discuss those in a few moments.

As I mentioned this is our eighth consecutive third quarter and we are pleased with the results we have achieved over that two year period. In the quarterly press release we released this morning, we tailed some of that process and I invite you to visit our website and view this information. As you know, Ramiro Ortiz joined us just prior to the start of this quarter and already we have a significant impact. With a string of record quarters under our belts, we are well poised to capitalize on our successes and seize the opportunities that lie ahead of us.

He will discuss some of those opportunities shortly. One key impact he has had on the organization that I want to bring to your attention is expense management and efficiency. In only three months, the measures he has ever implemented to control our expenses while maintaining strong growth in all areas have truly taken effect. This resulted in an expense reduction of 2.4% compared to the September-ended quarter in improvement in our efficiency ratio to 54.7% down from 56.6 for the same time frame. I will now turn the call over to Ramiro to discuss some of the highlights for this quarter.

Thank you, Fred. Let me review some of our results that we've produced during this last quarter. Our loan production continues to be strong with total loan originations having reached $ 707 million this quarter and that is up 14% over the same quarter last year. Total wholesale and correspondence presidential originations reached 508 million for the quarter and that's up 24% compared to this period last year. Also our consumer lending, which includes consumer mortgages we market and originate at the branch level grew to 130 million this quarter and that is up 17% from the same quarter last year. We have done that maintaining our traditional credit quality which continues to be high.

Net charge-offs, fiscal year to date, as a percentage of average total loans, decreased to 7 basis points versus 12 basis points in the corresponding period last year. Non-performing loans is a percentage of total loans remained low at 73 basis points which is relatively flat compared to the same period last year. Total deposits have grown to $3 billion and that's up 7% from this time last year. Our core deposits which we focused on were up 17% over the first quarter of last year, reaching a billion two. Those were -- of those we're particularly pleased with the non-interest bearing deposits which are up 23% from this time last year to 130 million.

Compared to the September quarter or our previous quarter, non-interest bearing deposits are up 11%. And I can tell you that the focus on DDA is strong throughout the entire organization whether it's through our commercial division or retail division. Finally, we opened our 40th branch location this quarter located in coral springs. This is our second office in that market.

On the first call that I shared with you all, one of you asked me what I had observed and I told you this is opportunity, opportunity, opportunity. I can tell you now after having been here a quarter, I would underline that. We're positioned right and we're the largest bank in the state of Florida and the clients we're meeting with are asking for the local service and commitments this region deserves and that we're poised to deliver. I will now turn the call over to Bert Lopez to further discuss our quarterly results and to provide some key ratios.

Thanks, Ramiro. As Fred and Ramiro indicated, this quarter's results are outstanding and margin compression is occurring in the financial industry. We experienced margin compression this quarter by 7 basis points to 204 basis points last year. There were several factors but primarily, a result of 105 million dollar increase in prepayments on residential mortgages. This prepayment figure is up 44% from last year's first quarter and includes prepayment of deferred costs such as FAS 91 fees.

We don't have the benefit of capitalizing these fees through the margin in the current quarter. In addition to the effect these prepays had on margin is another industry-wide issue, being competitive pressure he to keep higher deposit rates given the generally low interest rate environment much this pressure has to some extent thwarted our effort for the higher rate liabilities at the same time as our assets have repriced. By combating this effect, we used a number of strategies to secure lower rate liabilities through alternative sources. For example this quarter we participated in two product placement offerings of trust preferred securities resulting in an influx of 35 million and more favorable rates.

We anticipate using some or all these proceeds in the near future to call some of our outstanding issues. We plan to continue to pursue lower rate liabilities for these and other methods and we will take advantage of any abatement in the competitive pricing pressure whenever possible. Our non-interest income continues to grow and reach 5.7 million this quarter. This is an increase of 1.2 million or 27% from the corresponding period last year. Government fee income is up 27% from the first quarter last year to reach a little over a million dollars this quarter.

As evidence of our focus on developing the transaction accounts that Ramiro mentioned earlier. We continue to gain additional revenue from the sale of non-credit products we have developed and are aggressively selling. Another significant contributor to our overall growth in our non-interest income came from the mortgage banking operations. This area produced gains of $1.2 million this quarter through the sale of $182 million of mortgage assets. These gains are more than 110% as compared to this time last year. Indicating our growing strength in the mortgage banking business. In terms of other key results in the quarter, assets reached 6.4 billion, up 15% from this time last year. Book value per common share up 15 percent also at this time last year at $ 13.74. Foreign risk base capital ratios are 7.5 and 16.2% respectively, an excess of regulatory requirements. Ramiro?

Well, as you can tell, we're confident that we're on track and executing our strategies that will take us to the next level. But I suspect that some of you have some questions about what is next for the bank, and I would like to share with you some areas of focus that we will be rolling out shortly. And as a matter of fact, these strategies are being finalized as we're speaking.

The first one is one of a micromarket strategy. As I look around the tri-county area, Dade (ph), Broward (ph) and Palm Beach county, you do not bank somebody in High Alia (ph) in the same way in Aventura (ph) and that may not be at important as in Coral Springs. As we look at the try county area, we have been able to identify 11 specific micromarkets where each will have a different strategy pertinent to what is important to that particular market.

We think that this strategy will differentiate us from our competitors. There's also a strong focus on middle market lending. We're defining "middle market lending companies" in the 5 to 40 $40 million sales range. We think there's a tremendous profit margin in that business. It's a business we can price well and it's a business in addition to the credit products there are a loft deposit products we can sell the clients and I'm happy to tell you already we have several new relationships and we haven't even begun yet to execute our strategy there.

We're also going to lever off the foreign national residential mortgage portfolio that we have developed over the years. And we're going to implement international private banking. International private banking will be a unit that will focus on handling the deposits in the investment needs of some of the foreign nationals and, again, we have already brought in some nice new business on that front and we're just beginning to execute that strategy.

Our fourth strategy, one of implementing a wealth management capacity, and my suspicion is that we will be partnering up with somebody to do the trust piece of that, and rolling out a very specific private banking strategy and investment banking strategy. The fourth one is probably the one that we have made the least amount of progress in but I would envision over the next quarter that we're going to spend a lot more time on that. Clearly, we have got some great opportunities. This is a wonderful market. We're already taking steps. We're moving forward with a force of eight consecutive record quarters. The results of this two year period are truthful outstanding and I will now turn the call back over to Fred to go through some of those results.

Thanks Ramiro. As I mentioned earlier we have posted a presentation to our website that illustrates some of our two-year highlights. Please take a moment to visit www.buexpress.com to have a look at the presentation. We're proud of our two-year progress as it shows our progress on track. We have made significant progress as an organization as you will see and have turned the corner from being a wholesale thrift just a few years ago. We have expanded our product array to be competitive with any financial institution in our market and have grown to become the largest Bank headquartered in Florida and increased the overall value of our organization significantly. Ramiro has touched on some of the areas that will take us on to the next levels. And with his leadership and our strong team, we have significant momentum in that regard. We look forward to a very exciting year.

Just as an example of our progress over this last two years, I make note of the fact that, for example, core deposits and net income have each doubled in that two-year period. Another example perhaps for some of you to know is our consumer loan portfolio balance has actually grown more than five times in the last two years. These are just a few of the examples we have posted. With this and our progress, I hope now to turn the call over for questions related to this quarter or otherwise. And moderator would you please open the call for questions. Thank you.

At this time we will now open the phone call for investment banking professionals and analyst questions only to create the (inaudible) BankUnited wants to always all questions. Bunt has established a share line where you can ask Bert Lopez, Ramiro, any additional questions they may have. Shareholders are invited to call starting 10 minutes after this conference call ends on 1-800-915-4836 up until 5:30 eastern time if you have any additional questions that have not yet been answered. The question-and-answer session will begin at this time .

If you're using a speaker phone, please pick up the hand set before picking up any numbers. Should you have any questions, please press star one. If you wish to withdraw your question, please press star 2. It questions will be taken in the order they are received. Please stand by for your first question. Our first question is from Terry Maltese of Sandler O'Neill. Please ask your question.

Guys. Two quick questions. The first one is, can you comment a little bit about -- there was a little bit of balance sheet shift. Obviously you raised, it looks like, from looking at your balance sheet, ability 35 or $36 million in trust prefers, ran down some cash. And it looks like the bulk of that went into mortgage back and other securities. Can you give us little more detail on what went on and what we should expect going forward?

Well, this is Fred Camner talking. In general, with respect to the capital raising side we're looking to reduce our costs of capital long run and to some degree our capital base. We anticipate that we will have some calls periodically going forward of some of the higher trust prefer errors that are reaching call date or have most recently reached call date. We also periodically over the last six months have acquired some of those trust-preferred in the secondary market as well in repurchases.

So that's the strategy from that viewpoint. From the viewpoint of building up on the mortgage-backed securities, we felt very specifically that from a treasury viewpoint, attic moments in the market, we had opportunities to take some fairly attractive spreads. Frankly, spreads we haven't seen in quite some time. And we determined that it made sense for us to gather in a sense that profit. All the securities are quite short-term in their duration.

OK. Could you -- what would you say is sort of the average duration of the securities you bought?

I'm going to ask Bert that one.

The new purchases are average life of about two to two 1/2 years.

OK. And could you quantify, the trust preferrers that you have that are callable now, how much of it is there and what is the current price of them?

The current price meaning the market?

I'm sorry. Your current cost, the actual --

The yield is on the -- we have approximately 100 million that trade on the New York stock exchange and that's at a 9% coupon, and we have approximately $50 million additional that are callable, that trade at the 9.6 coupon -- we have here and there, and if you go to our site you can look at swaps. There are -- we have done some swaps but most of those are, the way we arrange the sites, pollable by us on an option basis. So we have a fairly significant amount of trust prefers that are available to ultimately call in which we hope to replace with lower cost funding.

And what was the rate on the trust prefers you issued?

Without going into slops that we didn't regard to those, generally it was somewhere between 325 to 340 over LIBOR. Now, some of those we may have swapped to six so it would have been an effective cost a little higher.

On a straight note, you commented, just to make sure I'm understanding, you're adding -- you're adding the private banking function to short of that nonresident alien or the international banking. But later in the call, Ramiro mentioned another private banking and sort of added on investment banking. I understand what you're doing in the international, but is there is another private banking and what do you mean when you say investment banking?

We're really making reference -- and Ramiro can go into this in a moment. We have part and parcel of the same thing. We expect to expand the feed for that in our market area. But the international private banking is an important additional component that we don't really have in any significant way now. Something that Ramiro had an extraordinarily successful area at SunTrust before he came over here, we believe it can be extremely profitable for the type of situation that we want to do. I think when he was referring to investment banking he was not referring to -- to your kinds of investment banking. We were talking about doing investor services for people. If you want to call directly into Ramiro, he would tell you more about the business areas.

That answers my question. I just wanted to make sure you meant private banking, not investment banking --

If I said investment banking, that is not what I meant. No. We are not in the investment banking business and that is not one of our strategies. We don't want to take up the position of any of our good people in this telephone call.

The next question is from James Abbott from Friedman Billings Ramsey.

Good morning, or good afternoon the case is. I was wondering if you can talk about middle market lending, what your orange nations are per month, how many commercial lenders you plan to add over the next year. Just give us some color on that. I notice the value went down and I was trying to get a feel for what that might be a year from now. Balances have gone -- with large participation.

With participations, you know, it's hard to predict them. Right now, our lending team is made up of four corporate bankers and 10 bankers that I've got in the small business lending.

There will be a reallocation of these bankers and there's some other bankers that are being brought in. As we're speaking, we're finalizing the strategic plan that will have the specifics of the questions that you're asking, and I don't have those answers now but I can tell you that very specifically over the next week 24 we will have those questions answered and with some very specific, strategic plans. Can I tell you, though, although the plan has not been finalized, the reception in the market to the fact that we want to do this and we've been talking about the already. We have several new significant relationships that are part of our portfolio now.

Thank you for that. Can you elaborate -- do you have idea what the originations are per month on your commercial side?

No, I don't have that number.

We would have to furnish you that separately. I don't have that right here in front of us. This is Alfred Camner again. I wanted to add to what Ramiro was discussing, one of the reasons we're leaking at the middle market and in fact on some of what I would call -- that occurred on our balance sheet, what we're looking to do is retain a much prior profit level about, much higher margin with respect to the types of loans that we're putting on the books in the commercial area.

So what will probably become more significant as we go forward and perhaps Bert can work up some reporting on that as we get down the road, the concept that you will see as we develop more in the middle market area information that will give you a better concept that those will be at a much higher profit level and really start adding as we get down this year to have a positive margin impact.

OK, thanks. Do you guys anticipate releasing an AKA or something of that nature when that plan is done?

We have general strategic plans that Ramiro made reference to that each area in the bank has been asked to complete. These actually are under review now in terms of having received those. Obviously some of it contains (ph) a bit of competitive information. We will have to review that but we will generally have to announce some of our initiatives.

One more thing and I just had a page handed to me by our CFO where we have 22 and a half million dollars for the quarter in new originations. That's just talking about strategy - we haven't implemented it yet.

Nothing commercial or industrial real estate stuff?

Commercial loans and small business loans.

I have other questions but I'll let other people go first and maybe hey will be answered at that point. Thank you.

Next question is from Arielle Whitman from Sandler O'Neill.

Hi, guys. Good quarter. Just wanted to ask a few questions, one with respect to the net interest margin. It came down maybe because of prepayments but what you can sec what with the market going forward and how are prepayments trending -- on that topic.

The prepayment rate the same times overall have been at a higher level this last quarter. For us, some time degree of the overall refinancing. I think our actual rate of repayment is still quite a built lower than some other experiences but never did have it's impact. There will be some in-flow in our production. But we continue to see market participation from the residential side. I think you will be seeing us making some announcements very shortly in some additional areas that we think we have opportunity on the residential retail side to increase our production. So we feel very good about that area going toward on the production side. On the other hand, on the prepayment side, we would anticipate some slow down. We continue, by the way, to have a very good emphasis on attracting borrowers who are purchasing homes and that still will be a strong emphasis with us.

OK. Then the other question was regarding the servicing rates valuation. Last quarter you took an impairment charge. This quarter you didn't but yet you're having excessive prepayments. Is this something we should expect in the next quarter or what is your feeling on the valuation.

We feel comfortable with our valuation. We don't think -- while we're higher than some in the industry, we're not compared to others. And, again, I noted recently country wide came out with theirs and ours is about in the same position. Some of my statements are the same as theirs. We've had it on a tremendous amount of area surfacing and very low coupons and as a result, we feel quite comfortable with our position. And also, likewise, even though we have had our prepayments up over last year, they're at a much lower prepayment rate than a lot of other people have experienced. So we felt -- we feel pretty comfortable about it.

Just as a point of reference -- this is Bert Lopez. If you look at our servicing asset a year ago to now we have added 48% of our servicing asset last year. That has come in as pretty low income rates. Overall we're at 1.25 basis points. As Fred mentioned, that sits in well with the comfortable -- comfortable with right now.

Next question is Jim Ackor of RBC Capital Markets. Please ask your question.

Good afternoon, guys. I was wondering if I could ask a follow up. Sounded like $150 worth of paper at 9.6% coupon. When or what time period do these securities become callable?

There's approximately 50 million callable. There's another hundred million that will be callable within the next two months. And how and what we go about doing in terms of taking care of that is under review now. But I would not be surprised if we do not call something or a piece of something, we should say, sooner than later. But we haven't finalized exactly what we're going to do with regard to all of that.

OK. And if I could ask one more question, sort of a 30,000 foot question, I guess. Seems that all the basic pieces of the puzzle being put in place as we speak to take this company to the quote unquote next level which to my way of thinking would suggest getting that retail bank completely on track and getting that margin to move from low 2's up into the 3% range which would presumably drive returns on equity of 15% or better. How long a time period are you giving yourselves to get there or to those levels and what are the key hurdles that you to overcome in order to get there, in your opinion?

I will give my general statement and if you have anything to add, we have given ourselves two years to get there. I think we originally said three years. We hoped to be in the teens in a sense. I guess it depends on where you think we are in that regard. But this last period, we hit on tangible equity about 11. We have a ways together.

A lot of what Ramiro described, if I looked at anything such as the hurdles, I mentioned one of the things that was happening was that we were expanding all of the franchise opportunity we had in the market and our expenses were going up some degree in tandem and we needed to gain from the Inn extra structure we belt and building what should have been more -- in there and make sure the expense doesn't go in the same direction as the revenue side. That is being worked on. We already had progress just in the first quarter. And we're going to look to keep emphasizing that. That's halls one of the most difficult things to do in any organization. Ramiro has a very good term for it. It's called reallocation of resources. And we've just begun the process of that.

To get the real benefit out of that. Other things is really addressing market concerns. We think we have an extraordinary opportunity right now. The dissatisfaction of the big industries in our market and in Florida in general is enormous. And we have people who are potentials. Ramiro described potential corporate customers, we have some -- to community. Very prominent independent south Florida community.

And frankly all of us stopped at any event that we go to with people talking to us about, please, you know, you guys get going, because we need to have some kind of global decision making and somebody to talk to because so much has happen in the centralization of the buts, that there's growing frustration with that type of banking. It's really getting that up. I would to get it going not to do anything so fast that we do anything to our country. Credit is extremely important to the bank. Ramiro, did you want to add anything?

I'm comfortable with the two-year horizon like Fred mentioned. We're now finalizing our strategic plan where the case to get us there will be very carefully delineated. But I would ask in addition to the retail network we need to get to all of the numbers that we need to get to. The success in this commercial middle market that I spoke about also is going to be key. As you know, that is a business that is laden with opportunities and feeding opportunity, and we think we're you uniquely (ph) poised to do that. If we implement the -- have been able to find a way to do that, that will differentiate us vis-a-vis the competition.

Thanks a lot.

Next question is from Jefferson Harrelson (ph) of Keith, Boyette and Woods (ph). Please pose your question.

If I could follow up on the MSR. You mentioned the valuation. Can you tell me what it is in a dollar amount and what's your amount of loan service for others?

Sure. We have D.681000000 in loan for others and our asserts stands about $8.5 million.

OK. And within your own portfolio this quarter, can you comment own the NRA portfolio, where it stands this quarter and what the growth rate was in the fiscal first quarter?

I don't know if I have that. Do you have that with you?

Right now our international loans are just over a billion dollars and that is up about $150 million from this time last quarter.

And have you been calculating the prepayment rates on the NRA's versus the normal regular mortgages? I guess, how much less likely is it to prepay?

I have to get Bert to get you that because he would have to go through a bunch of papers right now. But general LIBOR (ph) has maintained a significantly lower rate than the portfolios as a whole. All of art, in a portfolio has been lower than loans serviced by others which has been very rapid. As you know, we made a decision that we would just as soon that run off.

So when you all look at our loan situation this quarter versus last and etc., if that's running off, we are replacing it with our own loans. So it's a little deceiving. We have a lot of loan production going on and ultimately, we look down the road at -- we will be adding more and more of our own loans in. The loans serviced by others, which we bought a number of years ago, will have pretty well been prepaid off the balance sheet, and then, likewise, you will be seeing more and more loans on the books versus mortgage-backed securities as well.

But given that loan service by others picked up quite a bit and they're more than double the prepaid levels of our own portfolio. We look and that's good for us. Maybe a short-term downside in the sense that you don't have immediately more loans on your books but they will be on and we will have built our own portfolio.

Lastly, you mentioned the FASB fees hurt you; that the premium on the securities or what is the FASB-41? Do you want to 41.

Do you want to take this? I think it's the worst accounting determination. I never understood it. But it's with respect to lease payments and has the same kind of nonsense -- they've used that as their basis for how you treat preferred tock dividends, if you can ever figure that one out. But in any case, on FAS B91, what we're doing is the cost involved in the origination of the loan and as you know get immediate deductions to quote your expenses but they are then deferred into an account for the purpose of determining your yield and they're taken off against your yield.

If you have prepays, the prepay immediately is deducted against your yield, your income on the loans, as opposed to going back to the FASB 91 account and doing a contra-entry. That to me never made any sense. This is the way FASB has done it and therefore, to the sentence our prepays picked up, we suffered in it treatment of our margin this last quarter and to some degree in the prior quarter. And I imagine we will have still some effecting going into this quarter, but the prepays will be, I think, tapering off as you go through this quarter.

That's very helpful. Thanks.

Thank you. The floor is still open for investment professionals and analysts' questions. Should you have a question, please press star 1 on your push button telephone. If you wish to withdraw your question, please press star 2. Our next question comes from Jefferson Harrelson.

One last question, did you guys get guidance for 2003? I thought I recalled at one of the conferences that you spoke at last year, you talked about 138 to 222 range?

Yes. That is the figure we have. Some people might say this quarter would indicate we might be running ahead of that. But we would like just to stick to that guidance at the moment. That's technically our guidance for right now.

OK, thank you.

Our next question compress James Abbott. Please pose your question.

I want to -- I have a follow up on the expenses. Are there numbers or ratios you're managing that to or how are you guiding that number down over time as you grow the bank?

We've not had a formal project to reduce expenses. What we've spent a lot of time on is we've got X number of resources to do Y amount of work. And what we're constantly doing is reallocating expenses and resources in terms of where do we get the most -- where do we get the most bang for our dollar. But that has not been part of a specific initiative to reduce expenses. It's just been tighter management and wherever a reallocation makes sense, applying that reallocation.

That's also, I should say, against a budget that we completed. Ramiro was on board only a couple of months when we were own the budget process but the reality on the budget is that we tightened the expense areas in addition to directing everyone with the concept of reallocation of their resources. And ultimately on a performance basis, going forward, we expect that the senior management and people below their (ph) ability to accomplish that allocation of resource will have an impact also on how well they're compensated.

OK. How many branches do you expect to open over the coerce of the next year as well?

They're anticipating that we will have somewhere around eight new offices opening within a year from call it today. It's very possible they will be open before December. They may even be open earlier. It's hard to believe but we found a few that were dragging because the developers have been so slow about getting their permits and --

We just opened our 40th a few weeks ago and we will be opening up our 41st in about another 30 to 45 days and then the value (ph) for the eighth, that Fred mentioned, sometime by year end.

The cost per branch as far as staffing goes and operating composite and so forth, 300,000 maybe or something like that per branch?

Are you saying total capitalized costs or are you thinking annual?

The annual increase. It's just a little bit north of that, 400,000, including amortization and personnel costs.

That's depends on if it's a complete service branch. Some store branches would run around it.

Thanks very much.

Next question is from Arielle Whitman. Please ask your question.

Two questions, the guidance that you gave to Jefferson; that for fiscal?

That's for fiscal, yeah.

And the branches -- are you -- what are you thinking about in terms of collateral (ph).

We absent that an additional office will be opened in the next 90 to 100 delays.

So you're going to expand that at equity of the bank?

To some degree. There's a more complicated discussion which we're happy to have with everybody but we expect to do additional fill in which is really -- everybody signed up for Dade, Broward (ph) and Palm beach. We have not think it will be -- this week. We're now tending away from doing any major expansion on the west coast, which, on a number of areas, we think, has gotten extremely overbanked, and we're looking at some other areas where there have been much higher returns.

Contiguous expansion on the East Coast of Florida might be in the works.

OK. In terms of going up the coast versus filling in?

Possibly, yes.

Where are you targeting by the end of December 2003, how many branches you will have in.

We should be at somewhere around 47. We will be somewhere plus or minus to it at that point depending on how fast certain offices get opened. I would be surprise fire department we don't hit 47.

OK. Thank you.

As a reminder, shareholders are invited to call starting 10 minutes after this conference call ends to 1-800-915-4836, up until 5:30 eastern time if have you any additional questions that have not yet been answered. If there are no further questions I will turn the call back to Mr. Alfred Camner.

Thank you. We appreciate everybody being on this call. I think everyone is well aware that there are some uncertainties in the economy, that all of us face. Clearly I think the odds are quite great that the country could very well be at war in the next several months. All of this and we have to keep at mind and maybe require adjustments ahead. But we've been very fortunate here in south Florida. Our economy has been doing very well. The latest discussions, Ramiro and I had a discussion for this area and we can expect south Florida to do well all this year and the next. The numbers seem to be pointed in that direction. And we're very optimistic that we're going to be able to take advantage of that. We appreciate very greatly all of you listening in. If there's any other questions we can answer for any of you, please give us call. Thank you very much. Good take.

Ladies and gentlemen, if you wish to access the replay for this call, you may do so by dialing 1-800-428-6261. This concludes our conference for today. Thank you for participating and have a nice day. All parties may now disconnect.