Comerica Inc (CMA) 2002 Q2 法說會逐字稿

Good morning. I will be your conference facilitator today. At this time, I would like to welcome everyone to the Comerica second quarter earnings call. All lines have been placed on mute to prevent background noise. After the speaker's remarks there will be a question and answer period. Simply press * and then the number 1 on your telephone keypad to ask a question. To withdraw, press the pound. Our host is Beth Acton. You may begin your conference.

Good morning and welcome to the second quarter conference call. I'm Judy Love, senior vice president of finance. I am here with Beth Acton, who will review second quarter earnings for you. I would like to mention in addition to our press release, we have included slides at our website. The slides provide information we will cover during the conference call. For those who have access to the website, you may want to reference the slides during review. Before we get started, I would like to remind you this conference call contains forward-looking statements. You should be mindful of the risks and uncertainties that can cause future results to vary from expectations. I refer you to the safe harbor statement, which is incorporated in other calls. I will turn over to Beth.

Good morning. This morning we reported second quarter net income of $184 million for $1.03 per share. We included pre-tax charge or 20 cents per share in response to U.S. bank directive regarding Argentina. Excluding this charge, net income for the quarter was 220 million or $1.23 per share, increase on per share basis of 3% over last quarter. The charge for Argentine exposure was announced in May, up to $63 million, based on risk at that time. Due to reduction in exposure since that time, the charge is less than the maximum amount originally anticipated. Earnings assets were up 2% relative to the first quarter. The decline of 21 basis points in the net interest margin to 4.56% f 4.77% resulted in reduction in net income to $531 million. The march was driven by three items: increase this fully secured low rate loans to title and escrow companies. Lower contributions from interest rate risk management hedging equated 6 basis points. (inaudible) accrual loans equating to 4 basis points. Due to the recent high level of home refinancing activity, deposits from title and escrow companies have increased, resulting in higher levels of earnings credit. Consistent with industry practice, when earnings credits cannot be utilized through customer service expenses, loans are provided to companies at low rates, fully secured by deposits. Offsetting the impact of loans was reduction of $7 million in customer service fees in noninterest expenses. We expect the volume of title and escrow loans to remain high throughout the remainder of 2002. Noninterest income rose to $222 million, up 7% from last quarter and 5% over second quarter last year, resulting primarily from strong commercial lending fees. Market-related fees, combination of brokerage fees were flat from last quarter and down $9 million versus second quarter of 2001. Preliminary assets under management and capital management totaled $31.5 billion, versus 33 billion at March 31 and 36.8 billion at June 30, 2001. Bank own life insurance income reflects $9 million of death benefits in the quarter. Securities losses of 9 million included the write-off of the argentine securities. Increase in foreign exchange fees of 4 million accounted for the largest portion of the increase in other noninterest income of 6 million. Noninterest spences at $348 million were flat, compared to first quarter and efficiency ratio continued to improve to 46%. Average loan growth was modest from the first to second quarter, about $800 million. Increase in the California market reflects higher loan to title and escrow companies. Growth in the middle market, national dealer, small business and private banking loans in the quarter were offset partially by reduction in large corporate borrowing. Compared with the second quarter of last year, small business and private banking loans were up 14% and 12% respectively. Large corporate loans declined 19% over the same period. Nonperforming assets were down slightly $8 million from last quarter to $659 million or 1.60% of loans and other real estate. Five credits over $10 million were added in the quarter. The largest new mpa is 16 million in the automotive industry. The concentration of nonperforming assets is Michigan and national businesses 46%; California, 29%, international 21% and Texas 4%. Looking at industry concentrations of nonperforming loans, entertainment represented 11%, automotive processors 8% and technology 6%. During the quarter, 3 nonperforming totals totaling 60 million were sold at a loss of 2 million. In aggregate nonperforming loans have been charged down to 75% of the original contractual value. Net charge-offs for the quarter were 59 million, similar to last quarter and represented 57 basis points of loans. 54% of the charge-offs were Michigan and national businesses, 45% in California and 1% f the international portfolio. In terms of line business, large corporate loans accounted for 34% of charge-offs, middle market 28% and technology and life science represented 22%. The reserve for loan office increased 74 million to $744 million and now totals 1.81% of loans, up from 1.64% in the first quarter. Excluding 45 million additional provision for argentine loan, the loan loss reserve increased 29 million, representing 1.70% of loans. 83%, 617 million, of the reserve is allocated and 17% is unallocated, compared to 86% allocated and 46% unallocated in the first quarter. Nonperforming assets decreased 8 million to 659 million, despite increase of 23 million related to Argentina. Nonperforming assets are 160 basis points below other real estate. We expect nonperforming assets to be in the range of 150 to 180 basis points for the remainder of the year. Net charge-offs were 59 million or 57 basis points, virtually unchanged from the first quarter. Charge-offs are expected to be at high end of 50 to 60 basis point range. Given the provision related to Argentina, I thought I would update the portfolio. Our total exposure is 150 million, down 26 million since our May announcement and 104 million from year-end. The exposure consists of 90 million of loans, 60 million of securities and 9 million of unfunded commitments. Our largest single exposure is 18 million. During the second quarter, three argentine loans were classified as nonperforming, bringing total Argentina nonperforming loans to 24 million. These loans are in the process of being restructured. We do not expect material losses at this time. In addition, there are 4 million of Argentina securities in nonperforming assets. Given the recent questions about the effect of the situation in Argentina on neighboring countries, I thought I would update our strategy and present exposure in Brazil. Our strategy is to focus on trade finance and foreign direct investments of well rated U.S. and international companies, which should perform relatively well in an environment of currency evaluation. 74% of exposure is trade related and 55% of our exposure is the banks. Our exposure to Brazil was 675 million, net of 76 million supported by entities outside of the country. 521 million of loans, 103 million of unfunded commitments and 51 million of securities. Our largest single exposure is 40 million. The average maturity of the portfolio is 1.5 years. We are planning to reduce exposure over time. There is only one loan in the amount of 5 million that is non-performing. Moving to the funding side of balance sheet, average deposits were up 500 million or 1% f last quarter and up 4% over last year's second quarter. The mix of deposits change relative to first quarter, as growth in title and escrow replaced 500 million of wholesale out of market deposits. Small business deposits grew 200 million from last quarter and technology was up 100 million. We used excess capital to purchase 1.4 million shares during the second quarter, bringing total shares purchased to 3 million. Remaining authority for stock buyback is approximately 6 million shares. We continually assess capital position with targeted tier one ratio of 7%. At June 30, the preliminary tier 1 common capital ratio was 7.5 percent, the same level as the first quarter. I would like to update our current economic outlook. The recession watch index continues to indicate expansion over the next 6 to 12 months. Average annual GEP growth in calendar year 2002 is likely to be 3%. This would enable the federal reserve to begin monitoring before year end creating a rising interest rate environment through 2003. The fed funds rate is likely to reach 4% by year end 2003. We continue to project light vehicle sales for automatic sector to be 16.5 million units, a strong year. Michigan's economy, adjusted for inflation, expanded 7.4% in the first half, compared to 2001. Real expansion will range between 4 and 5% for the year. Texas leading economic index points to considerable acceleration over the balance of 2002 and throughout 2003, following the nine-month contraction that happened from July of 2001 through March of 2002. Northern California economy continues to struggle. In southern California, however, employment is strong and media home prices are soaring. The current recoveries continue to be slower than expected economic recovery, a continued decline in the stock market and its impact on consumer confidence, international stability, as in the middle East or Latin America. Based on projected economic scenario, which assumes accelerating loan growth and improved market returns in the second half of the year and subject to the risks outlined, we expect earnings to be in the range of 470 to 485, including the 20 cent Argentina charge this quarter. Before I open up to questions, I will like to comment a subject in the news. That is stock option accounting. We are undertaking review of stock option accounting and will share our position with you in the future. With that, I will open it up to questions.

At this time, I would like to remind everyone in order to ask a question, press * 1 on your telephone keypad. Your first question comes from the line of John McDonald, UBS Warburg.

Good morning, Beth. Couple of quick questions. Terms of loan growth, floor plan ending (inaudible), can you give us color on that? Also, in terms of lease finance, seems like you had sizable increase charge-off there, especially relative to the size of the portfolio, could you comment on how you are feeling about that portfolio?

On the dealer's side of things we continue to make good progress with large dealers across the nation and I think it just continues to be a lot of the efforts we have put in to date. So, there is a lot of focus on it. It is very good business. We continue to be successful there. In the leasing side, we are watching, obviously all of our portfolios carefully. On the leasing side, I would say we are making sure that we are keeping things under control there and there will be, as you saw - if you look over the last several quarters, some quarters had higher levels than others regarding leasing. I think there is nothing fundamently we are overly concerned about. We are monitoring the rest of the portfolios. I don't see big issues.

This is Judy. John, the largest portion of the lease off - and you saw it a while back, relates to the tax and life science portfolio and so that is in cleaning out of items that were in there. It is not a part of the other normal leasing portfolio. So, it is centered there.

Okay. In terms of noninterest income, you had a good increase in the bank on life science. Can you give us color on that?

There were frankly unexpected death proceeds basically from executives that have had coverage. So, it was what I would characterize as unusual. As I mentioned in the comments that I made, we view it as incremental 9 million that resulted there

Okay.

Our next question is from the line of Jennifer Thompson, Putnam Lovell.

Good morning. Question, given your guidance that you're basically reconfirming what is your assumption for market growth? We have seen pressure in the markets and it has been pressuring markets on revenues?

From our vantage point we would obviously have assumption around stabilization where we are presently, not with any big assumption about growth. It is also very dependent and more so on loan growth and improvement in the economic overall demand by our customers and loan growth. I think our outlook for longer growth in the second half is perhaps not as strong as we had expected earlier in the year. So, in that sense, I think we would be probably on the low end of the range I gave you.

In terms of loan growth you mean?

I think our expectations for loan growth compared to a quarter ago, are not as strong as we thought a few months ago.

Middle market seems to be especially stronger than expected this quarter. Can you give color on where you are seeing that, if anywhere specifically?

I think we continue to find opportunities to pick up market share in this environment. We are a lendor who are both positive and sticking with our customers and continuing to pursue business during these times. Also, if you look at the middle market category, it includes the low rate loans I mentioned earlier to title and escrow companies. Those are housed in that number.

Okay. Great. Thank you.

Our next question comes from the line of Ross Demmerle, Hilliard Lyons.

Good morning. The warning in your press release regarding the charge-off for Argentina or the incremental charge from really - suggests that the bank regulators pushed you into that. I am wondering if they hadn't done that whether or not that charge may have been higher or lower? I guess they are traditionally more conservative. I might take the assumption is there could be recoveries coming from that going forward. Secondly, I am wondering if the regulators have had a chance to take a look at your Brazilian exposure and whether or not there could be a charge coming down the road from that based on U.S. regulators taking a closer look at that?

First, related to Argentina, what we have said is that we reported the charge in response to a U.S. bank regulatory directive. We have not indicated anything further than that. I think in terms - think about Argentina, we did put - we have 28 million in nonperforming assets, up from 5 million in the first quarter. We are in the process of working with those companies and getting them restructured. We don't have expectations of any material loss at this time. In terms of the Brazil situation, I - the Federal regulators review is not something we comment on publicly. I mentioned to the group, we are monitoring that exposure closely. A lot of the exposure is trade related, about three quarters of it. About 55% is to banks. It has a short average life of one and a half years. We feel comfortable we can monitor it closely and continue to work it down over time.

Okay. Thanks.

Our next question comes from the line of Jeff Davis, Midwest Research.

Good morning. Beth, I am sorry, I didn't get the details. With regards to clarification, on the guidance 470 to 485, what is the loan growth assumption for the second half of the year? Secondly, the margin assumption?

Couple of comments. On the loan growth, we do have expectation we will see more growth than we have seen in the second quarter. It is very difficult to predict what that is going to be because of the economic recovery and how it's impacting the business. We do have expectation inherent in the guidance that there will be growth. It is hard for me to tell you broadly. It is certainly more than we saw in the second quarter. I think we feel pretty good there is in the pipeline, there is loan demand that will be coming on in the third quarter and into the fourth. It will not be - I think our expectation will not be as much as we thought perhaps a quarter ago. In terms of margin, if you look at the margin in the second quarter, while it was down 21 basis points from the first quarter, if you look at the second quarter in the context of really the last 2 and a half years, it looks pretty consistent with the kind of 450 to 460 kind of interest margins, net interest margin. The rate of 477 in the first quarter was higher than that and looks more of a positive,.

Right. I have a 13 delta on the hedging impact. Is there anything in particular going on in the swap book that caused that to shift? I know we moved up a fair bit last quarter or 1Q versus 4Q. Was there movement in the swap book?

The effect related to the swap book on the margin was 6 basis points.

Okay. And then last question, any preliminary results from the - that you could share with us, reflected in the asset quality numbers from the exam?

We are presently awaiting those results. I can't comment.

Okay. Thank you.

Our next question is from the line of Fred Cummings, McDonald Investments.

Good morning Beth and Judged. It is surprising that in light of your forecast for stable nonperforming assets and relatively stable charge-offs, you all continue to build the loan loss reserve even ex the Argentina increase. What is the rational behind that?

I think if you step back from it and look at how the year has developed and where we stand in the year, I would say we did see progress obviously in the second quarter in terms of MPAs. They are down, especially excluding Argentina, they are down from a domestic standpoint, further than that. Having said that, though, there is a lot of uncertainty still in the market and we chose, as we have with our capital position, to err on the side of being conservative. We talked about the capital side, we targeted lower tier 1 ratios than we are maintaining. We think it is a positive to be a little more conservative. We had the opportunity because of the uncertainty around how progress was going and perhaps not at the pace we would like to see, to err on the side of conservatism and put additional provision.

Okay. All right. And secondly, with respect to the deposit growth slide, I am looking at the Other category, it seems to be primarily the retail piece of business. I don't know if you can give us some sense for how you are doing with respect to transaction account growth within the retail segment, although small business might be included in retail deposits. Can you give us some sense for what is going on? What transaction account growth on the retail side would demand interest bearing checking now?

I will make two comments. I agree with your comment on small business. It is an integral part of our strategy on that front. On the retail side of the business, I would say we are growing at low single digits.

Okay. With the low single digits linked, Beth or year over year?

Year over year.

Okay. Thank you.

Once again, I would like to remind everyone in order to ask a question, please press * 1 on your keypad. Your next question is from the line of Roger Lister, Morgan Stanley Dean Witter.

Take a look at trends on nonperformance. Can you give us a (inaudible) in terms of what is going out and what is coming in and how you are doing in terms of sort of the recovery levels and what is going on with commercial real estate values?

Let me take the commercial real estate values to start with. Let me comment on that because we have important position in the commercial real estate area. We are obviously keeping a close eye on the market. About close to half of our total commercial mortgage and construction portfolio is owner-occupied. It is very granular portfolio, 81% have balances less than a million. That is on the commercial mortgages and on the construction portfolio. 42% have balances less than a million. There is a lot of granularity. We do very little spec lending and stay within Michigan, Texas and California footprint. If you look at the data on nonperforming on the commercial real estate sector, as well as charge-offs, it has been a positive story. If you look at nonperformers over the last quarter to quarter and year over year, they are essentially unchanged. And in terms of charge-offs, there haven't been any. I think that is a positive. Of the 50% of the construction loans are residential related. There is not a concern about issues related to office buildings and things going on. I am sorry, the first part of the question was -

Sort of the issue that flows through the MPLs, why you are getting new nonperformers, you are working the ones out. That is perhaps another way of asking the question of how the economy is going? You are accumulating problems or are you able to work out problems in general in terms of middle-market size?

We are seeing signs of stabilization in credit quality, including better credit migration trends. Obviously it is lower MPAs. If you look at sheer numbers, we are seeing it flat and coming down.

And maybe I can - the slight fall-off on this. When you look at nonperformers to what extent you look at the financial health of the borrower and how do you think about - do you have a sense of the proportion of your nonperformers that are still current and paying as agreed, versus those who are not paying and the extent of the companies still paying, but you are worried about their financial health, you put them on nonaccrual?

Yeah, I would say a portion of nonperformers are currently paying a small portion.

So most of them are actually nonpaying, is the answer?

That is correct.

Thank you.

Our next question comes from the line of Henry Dickson, Lehman Brothers.

Good morning, Beth. Couple of follows. One is the (inaudible) program progressing? Two, in the margin, it appears loan spreads narrowed and I would like you to comment on that. And on the shared national credit exam, most companies have been commenting on at least how their end of it has been going. Generally it has been with no surprise. So, just how you have been affected would be of interest?

Okay. The first one on activity, we are making good progress in putting in the - what I will call the infrastructure to maximize the potential from Con activity. That includes information systems to training to knowledge about products to incentives and how people are incented to work on things outside their areas to bring the total relationship and value to the customer. So, I think we are making good progress on Connectivity. There is a lot of enthusiasm about it here. In terms of margin, I think there are a lot of different factors that go into analyzing the margin. It is very difficult to characterize all the different pieces. I guess I would put it in the context I mentioned earlier, the margin we have in the second quarter is probably pretty representative of more normalized, if you will, kinds of margins. I think it will be impacted in the second half because we do have expectations, one of loan growth and two of continuing high levels of loans to low - low-rate loans to title and escrow companies. The last is on our side of the shared national credit review was fine. Can't comment on obviously the balance of it. It went fine. The review, we don't have concerns.

Okay. Just when do you think we will start to see - or talking about the impact of Connectivity in terms of results?

I think we should begin to talk about that next year. We will have, as I said, the systems in place, the training, and the incentive plans aligned with those. I think next year.

Thanks a lot.

Our next question comes from the line of Jim Aga, Millennium Partners.

Actually this can (inaudible). Two questions for you. Can you briefly discuss how comfortable you are with the current reserve levels mandated by ikirk? I guess at the end of the first quarter, you had 5 million in MPAs and you did not expect that to get worse. Basically it is five times larger, 25 million. What is to say you will not have to take another 50 million dollar reserve as other banks have recently had reserve down to zero?

Couple of comments. Related to Argentina, I think our expectation that the nonperformers could rise further from here, perhaps up to 40 or 50 million in total. If you put it in context, if the balance of our Argentina exposure became MPA, nonperforming asset, so the total amount would be nonperforming. We would be adding the difference between the 115 and 28, so 87 million to nonperforming, for this example. If you add that to the current nonperformers, we get to about 746 million dollar MPA. That is about the same as our reserve, 744 million. It would be up, even in the extreme, which we don't think is our expectation. We would be 100% covered by reserve. I think we feel overall, especially given the addition to reserves in the second quarter, that we feel comfortable. We also have comfort, we believe we can work through a lot of the issues we have in Argentina without suffering a material loss. There will be a time value, but in terms of ultimate loss, we think we are not as pessimistic as it may sound.

Does that put a floor on reserve for MPAs? I mean, could they go under 1%?

I think they could. There are a lot of different factors that would have to come together with the economic climate and where we are in the cycle. There are a lot of different cycles. Never say never.

Okay. Secondly, if you had to handicap current loan growth outlook, it has tempered twice in the last two quarters. Can you give us color as to why the outlook changed slightly?

From a few months ago to now? It is just the development of - I think it is two things. One is that the business recovery, while the GDP, the actual investment by businesses has been slow to come back. I think it will be. The second is there is a new element related to the stock market, which has an impact on consumer confidence and their spending habits and also in business people's feeling, frankly, there is emotionalism around capital investment. Both of those factors, not seeing it materialize as much, and this extra, if you will, overlay from the equity market effect is tempering us a bit, to be cautiously optimistic, but cautious.

Okay. Thank you.

Our next comes from the line of Denis Laplante, Fox-Pitt Kelton.

Good morning. On the Argentina exposure, could you help us differentiate between the performers that are nonperforming and not. Specifically, are they getting multinational support and that is what is being restructured?

Uh, I would say generally the ones that are nonperforming have some multi-national support. I think if you look at our portfolio in general in Argentina, about over 80% of our exposure of the company that we do business with have some foreign percentage of ownership. In fact, about 50% of that exposure has foreign ownership that extends beyond 50%. I think we have seen in the pay down you saw from year-end, to the first quarter to where we are now, we have seen evidence of multinational parent stepping up and helping through the situation and repaying and allowing exposures to come down. So, we are seeing people come to the party.

Of remaining 90 million in loans, how much is to financial institutions down in Argentina?

A fair amount of it.

Over 50%?

It is about. It is about.

About half of that? 80, about half.

Those financial institutions basically I assume are indigenous nonforeign institutions or including institutions that are multinational owned, as well?

If you actually look at the banking situation in Argentina, many of the banks that we do business with, almost all of them, have some form of foreign ownership. It is a different situation than Brazil, in the sense Brazil has a strong indigenous strong baking system relative to Argentina. In all of them, there is some form of ownership outside the country.

I assume, if we are grading this, looking at the exposures, I assume that exposures to financial institutions with foreign ownership with strong parents is roughly half. That would be the stuff you do not expect to go MPA. The remaining could go and might get restructured and is part of the reason? Is that fair in breaking this down?

I think that is fair. I think I mentioned earlier that we do see a risk that MPAs could be higher, up to 50 million dollar level. What the losses are is not clear at this point. As I mentioned earlier, we are hopeful through restructuring and other actions, that we will not see material losses on the portfolio.

On the nonperformers, are you still getting payments on any of them?

Yes.

And that is being applied to the principle?

Correct.

Good. Small technicalities and you may have talked about this. On the tax rate, it looked lower. Did you talk about that? Could you explain it?

I didn't talk about it. It relates to the - we talked about incremental 9 million of bank owned life insurance. That is what is driving the tax rate lower. It is tax-free proceeds.

All tax-free proceeds. That rate will go back up where it was?

Correct.

And related to the loan growth discussions, having been in recently and talking to Joe Buttigieg, talk being a pipeline, that was a quarter ago. I am assuming the discussion about pipeline you are talking about, you are looking for second half growth in the core business. That part has not changed?

That has not changed. We have expectation of growth in the second half in the core business.

Thank you.

Once again, I would like to remind everyone to ask a question please press * 1 on your telephone keypad. The next question is from the line of Ken Puglisi, Sandler O'Neill and Partners.

Could you comment on the outlook for possible additional impairment charge on deferred distribution cost? I was also wondering and may have missed this, was there a gain or loss on the sale of Opay and if so, how much was that?

We have not closed that. That will be third-quarter transaction. There will be 11 million dollar estimated gain on that.

Thanks. And -

I am sorry. Thank you. Sorry. If the net asset value related to the shares deteriorates more than 13% from the second quarter, then impairment would be 3 and a half million dollars. For every 5 percentage point decline from there, potential increment of 1.4 million dollars. Obviously the market has gone down a fair amount since June 30. We are not anywhere close at this point in triggering an impairment.

Thank you very much.

Our next question comes from the line of Michael Granger, KBW.

Good morning. Couple of questions. Could you talk about the balances on in terms of averages for second quarter versus first quarter on the title and escrow loans, as well as deposits? And second question is when you talk about the hedging coming down, is that the same as the wind down in the average balance sheet that says business loans income? If it is, and even if it isn't, why did the hedging go down from quarter to quarter?

The - yes, a lot of the hedging related impacts are in that one line item. There are also other hedges that we do related to deposits and debt issuance that are all been through it elsewhere in the income statement. So, that is one comment I would make. That is not the only place you will find it. Just, depending on the swaps that are coming on and coming off during the quarter, there can be timing, calendarization issues and I think that is what we are talking about in the [S-BGTD] quarter.

Okay. I guess I am not clear on that.

Depending on if you compare second quarter with first quarter and look at hedges rolling off. There is hedge income related to it and hedging being put on because of the balance sheet in the next 12 months, what that pace was in the second quarter was different from the pace in the first quarter. Mean, there were more hedges that rolled off in the second quarter, relative to the first quarter. the hedge income was less.

Okay. The balances on the title escrow?

You asked for both loans and deposits if you look at the quarter. In the - this is loans for the title and escrow business. There were about half billion dollars of loans. These are average loans.

Which quarter?

First quarter. More like a billion 1 in the second quarter. Up 600 million on average. These are average numbers. On the deposit side, in the first quarter from title escrow - this is all deposits 5.1 billion in the first quarter and 5.6 billion in the second.

Okay. Can you just give us a sense of the average yield on the loans?

That can vary by customer. I will leave it they are low rates.

Okay. Thank you.

Your final question comes from the line of Denis Laplante, Fox-Pitt Kelton.

Yes. One follow-up, related to other income. That number was up, was there nonrecurring?

In the other noninterest? Other noninterest income, no.

Went from 46 to 54?

Right. A big portion is foreign related. Not trading but customer- initiatated business. We earn margin on that business. It is not us taking position and trading it. It is driven by efforts by foreign exchange activity working with the lending officers to do - it is connectivity to do more business with customers in foreign exchange.

Thank you.

This concludes the question- and-answer session. I would like to turn back over to Ms. Beth Acton.

I want to thank you all for listening today and for all your questions and look forward to meeting those I haven't met yet. Thank you very much.

Thank you for participating 00:59:07 in today's conference call. You may now disconnect.