First Financial Bancorp (FFBC) 2010 Q2 法說會逐字稿

Good day, and welcome to the First Financial Bancorp's second quarter 2010 earnings conference call and webcast. (Operator instructions.)

I would now like to turn the conference over to Ken Lovik. Mr. Lovik, the floor is yours, sir.

Thank you, Mike.

Good morning, everyone, and thank you for joining us on today's conference call to discuss First Financial Bancorp's second quarter 2010 financial results.

Discussing our operating and financial results today will be Claude Davis, President and Chief Executive Officer, and Frank Hall, Executive Vice President and Chief Financial Officer.

Before we get started, I would like to mention that both the press release we issued yesterday announcing our financial results for the quarter and the accompanying supplemental presentation are available on our website at www.bankatfirst.com under the Investor Relations section.

Please refer to the forward-looking statement disclosure contained in the second quarter 2010 earnings release as well as our SEC filings for a full discussion of the Company's risk factors. The information we provide today is accurate as of June 30th, 2010 and we will not be updating any forward-looking statements to reflect facts or circumstances after this call.

I will now turn the call over to Claude Davis.

Thank you, Ken, and thank you to those joining the call today.

Second quarter net income of $17.8 million, or $0.30 per diluted common share, an increase of over 75% from the first quarter. Return on average assets for the quarter was 1.07%, and return on average shareholder's equity was 10.24%, representing strong performance despite the continued challenging operating environment.

Before Frank provides more color on our financial results and specific drivers behind our performance, I would like to take a couple of minutes to highlight some key themes that contributed to our results and, I believe, leave us well positioned to continue to be a high-performing institution. In addition, I will also provide some commentary on our credit performance.

First, we have an extremely strong but low-risk balance sheet. 38% of our loan portfolio consists of loans acquired as part of our 2009 acquisitions that feature loss-share coverage from the FDIC. Our non-performing assets to total assets ratio, excluding covered assets, is 1.46%. This measure of asset quality compares favorably to our peers, including other Midwestern banks. Additionally, our capital ratios are among the strongest in the industry.

Second, even with our low-risk balance sheet, our earnings capacity remains robust, driven by strong contributions from both our strategic operations and income generated as a result of the 2009 acquisitions. Our strategic operations provided over 80% of our total revenue for the quarter, and we continue to reap the benefits from other aspects of the 2009 transactions, even as we continue to incur certain acquisition- and transition-related costs. With regard to our strategic ongoing operations, we experienced solid growth in fee revenue, managed our day-to-day expenses and continue to invest in our business.

Third, our strong liquidity position provides additional protection and opportunity in a time of economic uncertainty. As loan demand remains sluggish, we've experienced a buildup of cash in our balance sheet which obviously impacted our net interest margin for the quarter. We are evaluating a number of ways this excess liquidity can be redeployed that would add to our already profitable operations while minimizing future risk.

And fourth, we continue to build our strategic core deposit franchise, as evidenced by the 5.4% linked quarter increase in our strategic transaction and savings accounts and our overall low cost of funding.

As we have said, acquiring low-cost core deposits and customer relationships is central to the Company's long-term operating strategy. Loan demand does remain sluggish. However, we continue to actively pursue new loan growth in our commercial and consumer businesses as evidenced by our new loan originations and renewals in the second quarter of $216 million.

I will now make a few comments regarding our overall credit quality and provide some specifics on our credit performance for the quarter. Industry-wide, credit quality remains challenging, although we are beginning to see early signs of stabilization. The economic environment within our strategic markets is showing some signs of improvement and stabilization as well. However, with a consistently high unemployment rate and continuing commercial real estate stress, we expect the environment to be challenging for several quarters.

Our 30- to 89-day total loan delinquency levels remained relatively stable, and total nonaccrual loans remained flat for the quarter at approximately $67 million. Our level of OREO declined modestly during the quarter, and our most recent appraisals on the properties indicate we are fully secured, although where land is involved, until liquidation occurs, the actual value realization may differ.

As we have mentioned on previous calls, our credit results have the potential to experience quarterly volatility due to loan size of individual commercial credits.

Net charge offs for the quarter declined to $5 million, or 71 basis points of average loans, on an annual basis, down [64%] compared to the first quarter and 39% compared to the year-over-year quarter.

Our provision expense for the quarter decreased as compared to both the linked quarter and year-over-year quarter as well. However, note that at $6.2 million, the provision exceeded our net charge offs.

And briefly, with regard to covered loans, we continue to dedicate considerable resources across several disciplines on a scalable platform to support this significant component of our franchise. As you would expect, we manage these credits in the same manner as our legacy portfolio, which is to maximize value.

Before I wrap up and turn it over to Frank, I would like to give you an update of where we are with Reg E. We began reaching out to our client base in May and June and are encouraged by the responses thus far. We are not yet ready to publish an estimate of the related impact of the various changes but are exploring several product changes that should help to offset the reduced overdraft income that is likely to result.

We are also in the process of analyzing the impact of financial regulatory reform, but as with the rest of the industry, the impact will not be clear until the final rules and regulations are written.

And finally, as mentioned on last quarter's call, we completed the operational and core technology integration of Irwin during the first quarter. Customer and deposit retention has exceed expectations, and we feel that we have built an exceptional platform for continued organic growth and if an opportunity is available and meets our well-defined criteria, growth through FDIC-assisted deals and/or traditional M&A transactions.

I will now turn the call over to Frank for further discussion on our financial performance.

Thank you, Claude.

I will provide a few comments on some of the operating results of the quarter and then discuss the supplemental information that was furnished separately and is available both on our website, bankatfirst.com, in the Investor Relations section, and as part of the SNL webcast support and also in an 8-K filed this morning. This supplement is crucial to establishing a clear understanding of our reported results and an understanding of the concepts that have a material effect on our current and future performance.

Second quarter 2010 earnings per diluted common share were $0.30. Our net interest margin decreased by approximately 36 basis points over the linked quarter. The decline was due primarily to the planned runoff of the covered loan portfolio and the resulting shift of higher yielding loan balances to cash. Our liquidity position remains strong but is contributing to the downward pressure on our net interest margin. We will continue to evaluate strategies during the third quarter to utilize our liquidity in a prudent and risk-appropriate manner.

As noted in our first quarter release, the materiality of the non-strategic transition items and acquired assets accounted for under the current accounting framework are significant and will be detailed in this and future earnings releases. I will point out that some revenue- and expense-related components of the acquisition are expected to continue for some time, some as long as we have covered loans on our balance sheet.

The expected recurrence of these items is noted on the tables in their respective sections. Acquisition-related items are noted in Tables 1, 2, 6, 8 and 9 in the earning s release and the supplement.

One new element of note in this quarter is related to the impact of our periodic valuation of acquired loans. The accounting guidance requires a periodic valuation of the acquired portfolios with any resulting impairment in value recognized through an allowance for loan loss partially offset by an increase in the FDIC indemnification asset. The net of the two amounts is recorded as provision expense. Any improvement in the valuation is recognized prospectively over time as a yield adjustment. The timing inherent in this accounting treatment may result in GAAP earnings volatility in future periods. This volatility, however, may or may not be indicative of the economic value of the transaction.

In the second quarter, First Financial recognized a slight impairment in its acquired residential real estate portfolio of approximately $1.3 million for which an allowance for loan losses was established. Of this allowance, $300,000, or 20%, was recognized as provision expense, and the remaining $1 million, or 80%, was recorded as an increase to the FDIC indemnification asset.

I would now like to direct your attention to the supplemental information furnished with our earnings release to emphasize a few items. On Slide 3 of the supplement is an illustration of what I believe are two often overlooked points of distinction in our balance sheet. First, the absolute level of capital we have, and second, the low-risk composition of our earnings assets relative to the industry. On this slide, we have illustrated the result of a highly unlikely and hypothetical scenario whereby all covered loans and all non-performing loans are charged off.

Let me state again that this is highly unlikely and hypothetical to illustrate a point.

Even after this hypothetical extreme level of stress, our capital ratios remain above our peers with a pro forma risk-based capital ratio of 17.41%, well ahead of the peer 13.06%, and our pro forma tangible common equity to tangible assets would be 8.35% relative to peers of 6.04%, or over 200 basis points higher, which is sufficient capital to support future growth.

The second point of distinction is that the risk profile of our earning assets is low, as you would expect with 38% of our loan balances covered by FDIC loss-sharing agreements. Our overall risk-weighted assets to total assets is very loan at approximately 55% compared to peer levels of approximately 75%. Only 43% of our total assets are 100% risk-weighted, compared to peers at 57.5%.

While we certainly expect these numbers to change over time due to the declining nature of the covered loan portfolio, during this time of coverage, the absolute level of our earnings relative to the risk inherent in the balance sheet is significantly better than our peers, with a return on risk-weighted assets at 1.96% versus a peer level of 1.18%.

We note these items simply to clarify that while our GAAP earnings are typically compared to others within our peer group, the relative risk of our balance sheet that produces these earnings is substantially different.

On Slide 4, we have continued to illustrate our revenue by source -- strategic, acquired non-strategic and the accelerated discount on loan prepayments and dispositions.

The strategic portion is the part of our franchise that we intend to support and grow and includes both our legacy business and a portion of the acquired business. This represents approximately 81% of our total second quarter revenue.

Second is the acquired non-strategic. This represents the portion of the acquired businesses that we will manage for maximum value but will not seek to replace. This represents approximately 11% of our second quarter revenue.

And lastly, the accelerated discount on loan prepayments and dispositions. This represents approximately 8% of our second quarter revenue.

Illustrated on Slide 5 are the non-interest income components related to the accelerated discount recognition and the components of non-interest expense. The additional non-interest income from better-than-expected credit performance was $2.9 million, and the rate-based valuation adjustment was $4.5 million for the second quarter of 2010.

Our overall operating expenses are flat on a linked-quarter basis and represent approximately 80% of our period GAAP expenses. This is consistent with our expectations, and we remain committed to managing the efficiency ratio in a range of 55% to 60% for our strategic business.

Slide 6 is an updated percentage of our loan and deposit portfolios that we currently consider strategic versus acquired non-strategic. Approximately $410 million, or 8% of our total deposits, are considered non-strategic and are expected to run off during 2010. We continue to see strong growth in our strategic portfolios. Approximately $681 million, or 15% of our total loan portfolio, is considered non-strategic. These acquired non-strategic loans may be on our balance sheet for several years and the pace of run off at this point is not easily predictable.

Remaining in the supplemental information are reprints of the tables from our earnings release.

I will now turn the call back over to Claude for some closing comments.

Thanks, Frank.

In closing, I would just like to remind our shareholders of some important points about our performance and our strategy, and then we'll open up the call for questions.

We understand that the acquisitions that we have made and the related purchase accounting as well as the economic environment creates the potential for volatility or noise in our quarterly results. However, we would like to point out that we've been profitable every quarter during the current recession, and in the last 12 months we've earned $269 million. Our tangible book value has increased $4.55 or 69%, and while the purchase accounting issues create complexity, the economic value yet to be realized we think is significant. Our balance sheet is low risk, as we have described, with a high level of cash, loss-share loans and the conservative investment portfolio that we maintain. Our capital ratios are among the highest in the industry and provide us flexibility to pursue risk-appropriate growth.

At a management level, we continue to be focused on improving our risk-management infrastructure to manage the larger organization and prepare for future growth, retain or immediately grow our core deposit base, increase our revenue in all business lines -- including risk-appropriate loan growth, manage our expenses prudently, build a scalable infrastructure to be prepared for future growth opportunities and patiently look for opportunities to deploy our capital effectively.

With that, Mike, we'd be happy to open up the call for questions.

Yes, sir. We will now begin the question-and-answer session. (Operator instructions).

The first question we have comes from Jon Arfstrom of RBC Capital Markets. Please go ahead.

Hi, Jon.

Good morning, guys.

Good morning, Jon.

A couple quick questions for you. In terms of, Frank, you just said it's difficult to project the prepayment pace, but I'm going to ask about it anyway. Any surprises with you in terms of the pace of the prepayments on the covered loan portfolio in either the unscheduled prepayments or the contractual prepayments? And is that a pace that feels about right, or is it just really too difficult to even try to put a framework around that?

Jon, I would say that certainly due to the materiality of the portfolio that we're dealing with, I would really hesitate to put any type of an estimate out there. I think you can see that there has been a pace established, if you will, over the last three quarters, but I wouldn't want to suggest that that is the pace for future quarters. It really is situation specific and really is just too difficult to predict.

Okay. It didn't seem like there was anything unusual or really sizeable in the quarter, though? Is that a fair assessment?

Yes, there were no sales or other items that was company-initiated.

Okay, good. That's helpful.

And then, a couple of other questions. I just want to make sure I understand this. It's maybe a little bit technical, but you're saying in your comments that credit experience on covered loans to date is nominally better than your expectations. Then on the other hand, you have this proportionate share of losses in excess of the credit-based valuation mark of $3.5 million, which is up from the last quarter and the quarter before that. Looks like it's C&I driven. I'm just wondering if you can provide any color on that. Is that something that was out of the ordinary, or just maybe a little color on that one.

Sure. There are a few metrics that you can look at, or a few components that we've disclosed in our release that can help you see the support for the conclusion that we're reaching about the overall credit performance.

The first is when you look at in the non-interest income the credit-based valuation mark recovery or acceleration that we're seeing. So you'll see those that have credit performance better than expected appearing in the non-interest income. Those that have credit performance worse than expected will show up in non-interest expense. And then over time -- and we'll share this information in the next quarter in all likelihood -- and that is what the overall valuation on the acquired loans looks like in an impairment versus improvement type analysis. So all three of those pieces put together are what lead us to the conclusion that our credit performance on the covered loans in nominally better than original expectations.

Okay. Okay, good. That's helpful. And then the last question -- I understand it's a challenge in terms of reinvesting your liquidity, but can you talk a little bit more about your approach? Obviously you have a lot of capital, and you've demonstrated that, particularly on the risk-based ratios. And I guess I was pleased to see that relative stability in core loans, but obviously you're going to have those prepayments come in. And just talk a little bit about your approach on the securities portfolio, Frank, and how you plan to put that money to work.

Sure. Well, I think as you know, the opportunity for any type of utilization in the investment portfolio, especially given our conservative position, is somewhat limited in this environment. We are selectively making purchases, but we're going to evaluate really the three ways that you can utilize or deploy that liquidity. We're going to look at our funding mix, our borrowings in particular. We're going to continue to look for opportunities in the investment portfolio, and we're going to continue to look for opportunities for good, solid loan opportunities as well.

So those three possibilities are what we are evaluating and will continue to explore.

Okay, thank you.

And the next question we have comes from Scott Siefers with Sandler O'Neill.

Good morning, guys.

Hi, Scott.

Good morning, Scott.

I guess I just wanted to ask -- Claude, you alluded to things a little, but I just wanted to get an idea for a sense of urgency to deploy the excess capital because while it's, on one hand, an underappreciated piece of the story, it's not really earning much right now, right? So I just wanted to get a fresh sense for your priorities, whether it's having a buyback. When and how would you like to utilize that? And then if you can, part and parcel with that, just expand upon your thoughts on M&A. There's been a sea change in the way people perceive FDIC deals over the last call it 90-days or so. Have you guys changed the way you're thinking about FDIC deals from your standpoint? And just any additional color would be helpful.

Sure, yes. And we certainly understand the question and the point. The only clarifying point I'd make before I get into the deployment question is that while our capital is one of the highest in the industry, I think if you look at our return on capital over the last year, last quarter, it's probably also been one of the best in the industry. So while it's excess, we certainly have been returning on it better than most that we compete with.

But that said, we know it's high, and what we're doing, Scott, I think, is trying to do the same things that put us in the good position in the middle of '09 and what we followed the previous 3 or 4 years prior to that, when we were getting lots of pressure, "Why aren't you doing a deal? Why aren't you doing a deal?" We stuck to our three criteria of, "Is it strategic? Can we handle it operationally? And is it priced right?" And we stuck to that, passed several deals during that timeframe and ultimately were in a great position to take advantage of the opportunities that presented themselves in 2009.

We're going to follow that same discipline as we go forward. So while there's a lot of capital there today, a lot of liquidity, we're not going to stretch on the risk front. We're going to make sure it hits those three criteria. And if that causes us an opportunity to be looked at next quarter or next year, we're not going to push it. But we think following that same strategy we did from '05 to '09 served us extremely well. So on the holistic side and the broad level, that's the approach we take.

As it relates specifically to our view of FDIC deals versus traditional M&A, I follow the same stats that you do, and FDIC deals have certainly been priced richer than what they were in mid- and in the fall of '09. Honestly, that doesn't really impact our thinking. We'll still approach any details that we would look at from the FDIC in the same way we did those in '09, and if we chose to bid, if we get it, great. If we don't, we feel like we're in a great spot.

Traditional M&A is one that we're always willing to consider and look at, especially if it's in one of our strategic markets, and we expect the pace of that to increase over the next year or so. I think some of those banks that are more challenged but won't fail look for partners and will certainly be aware of what's happening in our space and look for any opportunities that make sense.

Other than that, we really are just focused on, again, building the right infrastructure and growing organically and, quite honestly, view -- while we have a responsibility to put that capital to work, we view our current position as a great one to be in.

Okay, perfect. I appreciate that. I should probably clarify. I probably worded the question poorly, and I didn't mean to say that capital's not earning or anything. It's not earning what it could, and it seems, just given the amount of noise that's been introduced into the numbers, particularly the $10 million of non-strategic net interest income, it seems to make it easy to make the negative case for where that earnings goes. But it's just a little more difficult to quantify where the positive earnings from the excess capital comes from. So that's the only reason I ask.

Sure, I understand.

Okay, great. Well, thank you very much for the color.

You bet.

The next question we have comes from Steve [Moss] with Janney Montgomery Scott.

All right. Good morning, guys.

Good morning.

Good morning.

Just wanted to follow up with Scott's question here but in a little different way. What are you guys seeing in general in terms of M&A activity on the traditional bank side and the FDIC side.

Steve, we don't comment on any conversations that we would have or any deals that would be marketed through the FDIC. My comments would be the same as I responded to Scott in terms of the broader environment, that we follow just as all of you follow, which seems there is a change happening between the pace of FDIC versus the pace of traditional. We're following that similar to what everyone else is, but we don't make any specific comments about our specific conversations.

And on the traditional side, are you seeing more willing sellers, or is that still people want to work through their problems?

Again, we don't comment on any individual conversations that we might be having. And actually, many of you would probably be in a better place because you're having broader conversations probably than we are with the broader population, but any specific conversations we're having, we just don't comment on.

Okay, thank you very much.

All right, thank you.

(Operator instructions).

The next question we have comes from Bryce Rowe with R.W. Baird.

Thanks. Good morning.

Hi, Bryce.

Good morning.

Just a couple questions here. The branch sales that you expect from the Western market in the third quarter, I assume you'll be selling both loans and deposits?

We are not conducting branch sales. We are simply closing those offices, and the strategy that we're utilizing there is to find financial institutions out there that would be interested in hiring our staff. And if they choose, they may purchase loans from us. But as you think about a traditional branch sale, we are not conducting those in the West.

Okay, okay. Thank you very much. And then a couple more questions. The $200 million plus of loan originations and renewals you mentioned in the prepared comments, any specific geographies associated with that? Or is that just across your several different markets?

Yes, it really is across our footprint, Bryce, and as I said in my comments as well, we view that as still sluggish, but we are actively looking for good loan opportunities and making loans. It's just not at a pace yet that causes the portfolio to grow.

Right. And I assume a good chunk of those are coming from market share takeaway from other lenders not quite as well positioned?

I would say there's some of that occurring. We are starting to see some of our current clients make new investments, especially on the C&I side. So it's a little bit of both as well as a little bit of consumer growth.

Okay, okay. And then the last question -- Frank, you mentioned opportunities for the excess liquidity on the balance sheet, and you mentioned borrowings as a potential opportunity. Any thoughts as to decreasing the level of borrowings here in the future?

Yes, we're exploring a wide range of options, and that certainly is one of the options that we'll be evaluating.

Okay. All right. Well, thank you, guys. Appreciate it.

You bet. Thank you.

The next question we have comes from Daniel Cardenas with Howe Barnes.

Good morning, guys. How are you?

Good.

Good morning.

Just a quick question going back to the loan growth side. Given the slowness of potential organic loan growth, what is your willingness to engage in participations either in market, our of market or shared national credits?

No interest on the shared national credit side. On the participation side of things, the only thing we pursue there is where we have a mutual relationship with another bank where they may buy some of our clients assets and vice versa to help each manage either loan limits or risk concentrations. So it's not a material item for us in terms of loan growth possibility.

And it really goes back to my earlier comment of staying patient as we think about excess liquidity and high levels of capital and not feeling pressure to put money to work at a higher risk than what we feel comfortable with.

All right. And then looking at the deposit side, we're seeing some improvement on the core deposits. Do you have any goals that you can state in terms of how big you want to grow the core deposits in terms of either number of accounts or dollar amounts?

We don't publish goals, but I can tell you we are aggressively pursuing core deposit growth, and we view that as what builds the ultimate value of the franchise. And even though we may have excess liquidity today, if we can get a core deposit account, we're going to try to grow those as fast as we possibly can.

What's competition like right now for the core deposits?

I would say it's rational, and it certainly isn't the 2006, 2007 days of people paying ridiculous prices. So I think the amount of liquidity in the industry has caused a more rational pricing, as well as the risk of revenue related to Reg E, overdraft income, interchange income and the Durbin Amendment and other things like that have caused everybody to make sure that the pricing on deposit accounts is profitable. So we view it's a rational pricing market and one that we can compete well in.

Then are the opportunities more within the city markets or within the smaller community markets along the Indiana-Ohio border?

It's interesting. We have seen good growth in almost all of our markets this year and take a market, for us, or region, as an example, northern Ohio in our market area, which is mainly rural, smaller markets. They've had one of their best years ever, and it's been because of the efforts of that staff and how hard they've worked.

We think long term we'll see good growth in all of our markets, but certainly because of our market share, our greatest absolute growth will come out of the greater Cincinnati as well as the greater Indianapolis market areas.

Thank you.

The next question we have comes from Jon Arfstrom with RBC Capital Markets.

Good morning, again. You guys are tough to track down, so I thought I'd just ask a couple more.

Sure.

Frank, on the trend in the non-recurring acquisition-related costs, I know you've got a couple more branches to take care of, but has that been coming down nicely? Is that something that you feel will drop off a cliff here after this quarter? Or what are your thoughts on that?

Sure. As you think about the types of cost associated with it, the support costs related to non-strategic loans, that's probably the component that will have the longest tail on it. All of the other things related to transition should -- we should have experienced, for the most part, the bulk of those costs here in the second quarter. There will be some that will trail a bit, so I wouldn't describe it quite as a cliff. But there's a pretty steep slope to it.

Not to get too far in the weeds, but there's two numbers. There's the $2.2 million that are described as acquisition-related costs and then the $2.4 million other items not expected to recur. Which is which so that I can understand them?

I'm sorry. What was the question?

Yes, which one is related to -- the $2.2 million or the $2.4 million, which one would be related to the branches that you expect to be gone this quarter?

Yes, that would be the $2.2 million.

Okay.

And that would not be just the branches, in terms of cost.

That's correct.

But those branch costs would be in that.

Right. And Jon, if you flip back to Table 8, there's further detail on what those items are.

Yes, okay. Yes, I see that. Okay, good. And then the other question is on Reg E, I know it's difficult to size all this, but can you talk about your opt-in approach and maybe percentages and then size how much of that service charge line is related to overdraft.

We -- as Claude mentioned in his opening comments, we're not ready to speak to any estimate or specific strategies, but suffice it to say that we're looking for every opportunity to help offset that expected decline there.

And Jon, I would say our opt-in strategy is really one of both our website as well as personal contact with clients, really to present what the change is and what the options are and then let them make their choice about whether they opt in or not. We don't want it to be a hard pursuit, but yet we want to make sure that they understand what changes have occurred and what their options are. And we've been pleased with the response. What we mean by response is that we've had positive identification of what that client wants to do, either to continue to be opted out or to opt in. And then by next quarter, I think we'll be able to give a better sense of what the impact might be.

Yes, okay. I understand you may not want to put too fine of a point on it, but is it safe to assume that the majority of that service charge line is related to overdraft? Or is there something else in there that's material?

No, that's safe to say, that the bulk of that is overdraft charges, and I think we may have published a rough percentage in an investor deck probably a year or so ago. But as we update that this quarter, we'll try to include that information.

Okay, great. Thanks for the time, guys.

You bet, Jon. Thank you.

Showing no further questions at this time. I would like to turn the conference back over to Mr. Claude Davis. Mr. Davis?

Great. Thank you, Mike. And again, we appreciate everyone's interest in First Financial, and we appreciate your participation on the call today. Thank you.

And we thank you, gentlemen, for your time. And we thank you all for attending today's conference call. At this time, you may disconnect your lines. Thank you and take care.