Greystone Housing Impact Investors LP (GHI) 2021 Q1 法說會逐字稿

I would like to welcome everyone to America First Multifamily Investors, L.P.'s, NASDAQ Ticker Symbol ATAX, First Quarter 2021 Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded. On behalf of ATAX and its management team, thank you, and welcome to ATAX' First Quarter 2021 Earnings Conference Call.

During this conference call, comments made regarding ATAX which are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause the actual future events or results to differ materially from these statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words like may, could, should, expect, plan, intend, focus and other similar terms.

You are cautioned that these forward-looking statements speak only as of today's date. Changes in economic, business, competitive, regulatory and other factors, including the impact of the COVID-19 pandemic could cause ATAX' actual results to differ materially from those expressed or implied by the projections or forward-looking statements made today. For more detailed information about these factors and other risks that may impact ATAX' business, please review the periodic reports and other documents filed from time to time by ATAX with the Securities and Exchange Commission.

Internal projections and beliefs which -- upon which ATAX based its expectations may change, but if they do, you will not necessarily be informed. Today's discussion will include non-GAAP measures and will be explained during the call. We want to make you aware that ATAX is operating under the SEC Regulation FD and encourage you to take full advantage of the question-and-answer session. Thank you for your participation and interest in ATAX.

I would now like to turn the call over to Ken Rogozinski, Chief Executive Officer of ATAX.

Thank you, Michelle, and good afternoon, everyone. Welcome to America First Multifamily Investors, L.P.'s First Quarter 2021 Investor Call. Thank you for joining. I will give an overview of our business and the markets and then Jesse Coury, our Chief Financial Officer, will present the Partnership's financial results. Following that, we look forward to taking your questions.

For the first quarter of 2021, the Partnership reported net income of $0.09 per Beneficial Unit Certificate, or BUC, $0.11 of cash available for distribution per BUC, a book value of $5.65 per BUC and -- on $1.2 billion of assets and a leverage ratio as defined by ATAX of 67%. The Partnership is current and in good standing with all of our lenders and leverage providers.

In terms of the Partnership's investment portfolio, we have received no request for forbearance on our multifamily mortgage revenue bonds and all multifamily MRBs are current on principal and interest payments. The collections rate at properties that serve as collateral for our multifamily MRBs has averaged approximately 91% from January 2021 through April 2021. Physical occupancy averaged 93% for the portfolio as of March 31, 2021.

Our current Vantage portfolio consists of 12 projects. Seven where construction is 100% complete, one at 95% construction completion and 4 others where construction or planning is still underway. For the 7 properties where construction is 100% complete, we continue to see good leasing activity with 2 of the 7 having achieved over 90% physical occupancy and another one having achieved over 85% physical occupancy. We continue to see no material supply chain or labor disruptions on the Vantage projects still under construction. As we have seen in the past the Vantage Group as the managing member of each project owning entity will position a project for sale upon stabilization.

Our 2 student housing properties have continued to perform consistently with 2020. Both are covering all of their obligations from project cash flow including operating expenses and in the case of the 50-50 at University of Nebraska debt service. Both University of Nebraska and San Diego state have announced their intentions for the fall of 2021 semester to be primarily in-person, on-campus learning. Our 2 property managers are actively pre-leasing units for the fall semester.

Our 2 non-multifamily MRBs continue to have issues as a result of the COVID-19 pandemic. We previously entered into a forbearance of principal amortization agreement with the borrower on the Live 929 student housing MRB through the end of 2021. Like University of Nebraska and San Diego state, Johns Hopkins University has announced that they expect a broad resumption of in-person classes this fall. They will also require students returning to campus to have received the COVID-19 vaccination.

The borrower on the Provision proton therapy center MRB filed for Chapter 11 bankruptcy in the fourth quarter of 2020, and we are working with the other bondholders and the bond trustee to protect our rights and maximize the value of our investment.

Turning to the markets. The first quarter of 2021 has been a mixed bag in the market for municipal bonds. Municipal bond mutual fund inflows have continued their strong performance since March of last year. So far in 2021, all but 2 weeks have seen positive fund flows and there have been 6 weeks where fund inflows have exceeded $2 billion. Year-to-date total inflows have been approximately $25 billion according to Refinitiv Lipper data.

Municipal market data's high-grade muni bond scale reached all-time low yields in mid-August of 2020, with a 10-year index at 0.59% and the 30-year index at 1.28%. Those levels had widened some at the start of this year on the heels of wider U.S. treasury bond and LIBOR swap levels. 10-year MMD is currently at 0.99% and 30-year MMD is currently at 1.60%, roughly 30 to 40 basis points higher than their all-time lows. Since we are still on a relatively low interest rate environment, we continue to be mindful of the absolute level of rates where we can originate new fixed income investments. We have continued our focus on shorter duration investments where matched funding is more readily available and hedging is less costly.

In terms of our debt investment activity during the first quarter, I had previously mentioned during February's call, the January 2021 closing of 4 shorter-term construction financing transactions. In early April, we closed on a longer-term financing on an acquisition rehab LIHTC project in Mississippi. We continue to see lending opportunities in both market segments.

In March 2021, the Vantage at Germantown property located in Memphis, Tennessee was sold. The Partnership recognized $0.05 of net income and CAD per BUC in conjunction with the redemption of our membership interest that resulted from the sale of the property. In April 2021, we closed on one new Vantage equity investment for a project located in Loveland, Colorado. This is our first investment in the Colorado front range market with Vantage and continues our diversification of the Vantage portfolio locations. We will continue to look to strategically work with our strongest sponsors on new investment opportunities where traditional sources of capital may not currently be available.

With that, I'll turn things over to Jesse Coury, our CFO, to discuss the financial data for the first quarter of 2021.

Thank you, Ken. For the first quarter of 2021, ATAX reported total revenues of approximately $14.4 million. Net income per Beneficial Unit Certificate, or BUC, basic and diluted of $0.09, and cash available for distribution, or CAD for short, of $0.11 per BUC. In terms of our investments, ATAX reported approximately $1.2 billion in assets. Such assets are comprised of our 3 main investment classes. The first being our MRB and GIL portfolio, which is a collection of mortgage revenue bonds and construction type lending programs, the second being our investments in unconsolidated entities or the Vantage investments and the third being our owned MF properties.

The mortgage revenue bond and governmental issuer loan portfolio consists of MRBs for short and GILs for short of approximately $772 million of MRBs and $104 million of governmental issuer loans. These MRBs and GILs represent approximately 73% of our total assets. We currently own 75 mortgage revenue bonds across 13 states. We hold significant amounts of such bonds related to properties in 3 states based on outstanding principal with Texas representing 44% of total MRBs and California and South Carolina each representing 17%.

As Ken mentioned to date, we have received no request for forbearance of principal and interest payments for MRBs or governmental issuer loans associated with multifamily properties. In 2020, we granted forbearance to the Live 929 MRB property in the form of a deferral of contractual principal payments through 2021, while the property works to recover from the effects of the COVID-19 pandemic.

In addition, the borrower of our Provision Center mortgage revenue bond, a proton therapy cancer treatment center in Knoxville, Tennessee declared Chapter 11 bankruptcy in December 2020 and is working through the bankruptcy process. The outstanding principal balance of the Provision Center MRB was approximately $10 million as of March 31 or approximately 9% of the senior mortgage revenue bonds issued by the borrower, and we are accessing forbearance and restructuring options with our other senior bondholders.

As of March 31, we had investments in 7 governmental issuer loans to finance the construction, lease up and stabilization of affordable multifamily properties in 4 states and representing a total of approximately 1,260 units. The governmental issuer loans are functionally equivalent to our mortgage revenue bonds and that they are non-recourse obligations issued by governmental authorities secured by a mortgage on real and personal property of affordable multifamily properties, and we expect and believe the interest earned on such governmental issuer loans is exempt from federal income tax.

In most instances, we also commit to fund property loans that share our first mortgage lien with the governmental issuer loan and are typically funded after all governmental issuer loan -- funds have been advanced. As of March 31, we had outstanding commitments to fund additional proceeds for governmental issuer loans and related property loans totaling approximately $219 million with such funding commitments to be advanced during construction of their respective properties.

We have 11 investments in unconsolidated entities or Vantage projects as of March 31. In addition, we closed one additional investment in April 2021 for a project in Loveland, Colorado. All entities are for the construction of market rate multifamily properties that as of March 31 represent, in the aggregate, over 3,400 rental units. The carrying value of our Vantage investments was approximately $95 million. Of the 11 projects as of March 31, plus the Loveland, Colorado project closed in April, 7 are located in Texas, 2 in Nebraska and one each in Tennessee, South Carolina and Colorado. Eight projects are complete or nearing completion and then lease-up and 4 are -- remain under construction.

Leasing activity of the properties with available units have faced challenges due to social distancing measures imposed because of the COVID-19 pandemic. However, through March 2021, the properties have experienced an overall increase in occupancy though at a slightly slower rate than before COVID-19. There have been no material delays or disruptions for projects currently under construction due to COVID.

As Ken mentioned, the Vantage at Germantown property was sold in March 2021, and our equity investment was redeemed. Upon redemption, our $10.4 million of initial capital was returned, and we recognized investment income of $862,000 and a gain on sale of $2.8 million in Q1. This is our seventh Vantage investment that has been redeemed. In the aggregate, our Vantage investments have generated approximately $30 million total gains on sales and contingent interest to date.

As of March 31, we own 2 MF properties with a total of 859 student housing units and a net carrying value of approximately $58 million. Both properties provide housing primarily for university students, which have been more significantly impacted by COVID-19 than the general multifamily housing market. The 50-50 MF property primarily serves students of the University of Nebraska in Lincoln, Nebraska, which is currently holding on-campus, in-person classes. The property is 90% occupied as of March 31 and is meeting all mortgage and operating obligations with cash flows from operations.

The Suites on Paseo MF Property primarily serves students of San Diego State University, which suspended on-campus, in-person classes for the spring 2021 semester, but has announced its intent to resume on-campus, in-person classes for the fall 2021 semester. The property was 77% occupied as of March 31, which is up from 68% as of December 31, 2020, and is meeting all operating obligations with cash flows from operations, and the property has no debt obligations at this time.

Moving to the liability side of our balance sheet. Our debt financing associated with mortgage revenue bonds and governmental issuer loans totaled approximately $712 million as of March 31. In the first quarter of 2021, we entered into 3 new tender option bond trust debt financing facilities related to our new governmental issuer loan and property loan investments, which generated gross proceeds of $24 million. Of our $712 million of debt financing as of March 31, approximately 42% is fixed rate and 58% is variable rate.

Of the $412 million of variable interest debt financings, approximately $105 million or roughly 1/4 is secured by investments with variable interest rates such that they are at least partially hedged against rising interest rates without the need for separate hedging instruments such as interest rate caps or swaps.

We regularly monitor our exposure to potential increases in interest rates through our interest rate sensitivity, which we report quarterly and is included on Page 58 of our Q1 2021 Form 10-Q. The interest rate sensitivity table shows the impact to our net interest income given various scenarios of changes in market interest rates. These scenarios assume that there is an immediate rise in interest rates and that ATAX does nothing in response for 12 months. The analysis based on those assumptions shows that an immediate 200 basis point increase in rates that is sustained for a 12-month period will result in a decrease of approximately $5.5 million in our net interest income and CAD or approximately $0.09 per BUC.

Lastly, we regularly provide our net book value per BUC, which as of March 31 was $5.65 per BUC. This is down from $5.93 as of December 31, 2020, primarily due to rising market interest rates and the corresponding impact on the fair value of our MRB portfolio. At March 31, 2021, our closing market price on the NASDAQ was $5.53 per BUC, which is a discount to our book value of approximately 2%.

Ken and I are now happy to answer questions from the audience.

(Operator Instructions) Our first question comes from the line of Jason Stewart with JonesTrading.

I wanted to start with credit exposure and the expense line item there. Ken, is it fair to say that given that we're back to 0, you're pretty comfortable with the valuation and the marks on the portfolio vis-à-vis the couple of credit issues that you have?

Thanks for your question, Jason. Yes, I think, given the performance of the core MRB portfolio and still being in a position where there have been no requests for forbearance, and we've seen continued strong levels of both collections and occupancy. We have not seen a need over the past 12 months to make any sort of adjustments or impairments at all on the core MRB portfolio.

With regard to the assets that -- where we have taken charges over the past year, the Live 929 and the proton therapy center, I think, at this point in time with the proton therapy center, with that working its way through Chapter 11, that's a bit of a lengthy process. We don't see a lot happening there on a day-to-day basis at least at this point in time in the bankruptcy case that would lead us to make any additional adjustments on that side.

On the 929 with the process that's going on there with Johns Hopkins making the announcement about the return to in-person learning for the fall 2021 semester and the requirement for students to have vaccination. We're monitoring the borrower's activities there in terms of leasing and project positioning for the new academic year that starts in August and we'll continue to monitor that process and we'll make a judgment as we see that unfold over the past -- over the next few months.

Okay. Got it. And how is -- what is your opinion in terms of when you do see some sort of outcome out of the bankruptcy process for the proton therapy center, will we see a recovery in that line item or is it more likely you just leave a little bit of conservatism in the balance sheet?

I think, Jason, it depends on what the ultimate resolution to it is. The only real benchmark that I have is what we've seen on some of the other proton therapy bond deal restructurings that have happened in the past. There, there has usually been some sort of refunding bond transaction occur where the existing debt is refunded, a new set of bonds is sold out in the marketplace and so, there is a cash recovery from the existing holders there. And in some circumstances in connection with that, the existing debtors take back some series of either subordinate debt or capital appreciation bonds. So I think it's too early to tell still based on what's going on in the bankruptcy case, but if this happens to follow the same method that the other cases have in the past, I think you'll see some combination of recovery, and then with us ending up with some kind of certificate or security on our books that will then value.

Okay. Fair enough. It seems to me like you're in a pretty conservative position, which I think everybody appreciates. Moving to Vantage, when we think about the cap rate progression I mean, sunbelt, southeastern markets and where the Vantage properties are located, how should we think about the progression of sale activity and potential gains in terms of just a lag between when you enter a contract and when it gets recorded into the financials?

From our perspective, Jason, when we evaluate transactions for investments on the Vantage side, we tend to be conservative in the assumptions that we make there. And so the wind to certainly been in the -- at the back of multifamily asset acquisitions over the past 3 to 6 months just broadly based on what we're hearing from the parent Greystone team in terms of the activity that they're seeing both on the lending side and on the asset sale side. There has been strong demand for the multifamily asset class in general and compressions of cap rates still in a lot of different markets.

So the Vantage team does a great job of positioning these projects for sale. They are very active in terms of managing the rent roll once the project has been listed for sale in order to demonstrate the top earnings potential and generate the best results from that competitive sale process. So we don't think that, that strategy is really going to change going forward. I think we will rely on their expertise and their success in the past in terms of managing that process and making those decisions about accessing the market when they see occupancy and rent roll hit the targets that they want to achieve.

Okay. Do you have a sense of what cap rate you're exiting these projects at?

That's really hard to say, Jason, because from everybody's perspective you can all determine what an NOI is, definitely. Is it a T12, is it a T1, is it some forecast of what NOI is? So depending on what your NOI assumption is when you benchmark that against the actual sales price, you can come up with a wide variety of cap rate. So that's why, from our perspective, we don't tend to be that focused on cap rate as a metric per se. It's really the gross sales price and then the return to the Partnership through the waterfall and what sort of IRRs we achieve there.

Fair enough. Those -- and those have been pretty nice returns. You alluded to some commentary in terms of what plus 200 looks like in terms of rates, but I'm more curious globally, maybe if you pull up a little bit your view on the Fed's involvement in the mortgage market on an aggregate basis, inflation and rates overall, not necessarily the impact on the ATAX balance sheet but just your view globally?

It's been an interesting quarter from that perspective. I was looking at just the 10-year itself in terms of what happened during the first quarter of the year. And I think it's easy to forget that the first trading day of January in 2021 the 10-year was still at 91 basis points, and then 3 months later on March 31 at the end of the quarter the 10-year was at 173. That's a move of over 80 basis points in the 10-year during that short 3 months’ time horizon.

I know that there has been a lot going on in the economy and in Washington in terms of delivering additional levels of stimulus and the feds and treasuries desire to see the economy move and grow at a faster clip as I think is seen by the first quarter GDP growth number at over 6%. So at some point, the continued stimulus that we see out of Washington I think is going to be felt in the market. The 10-year and swaps that simmer down some from that end of the quarter level seem to be more in this kind of 155 to 160-ish type trading range.

I think a lot is really going to depend on both how aggressive Washington continues to be on the stimulus front, whether or not these 2 new announced plans that have come out of the administration how they make their way through Congress and what they end up looking. But I think more to home from our portfolio, the dynamic has been interesting to me to see the amount of money that continues to move into the mutual -- the muni mutual fund complex, particularly as you hear a lot of these plans to pay for some of the proposed spending programs coming out of Washington with higher marginal tax rates, and I think more significantly recently, the higher capital gains taxes that have been being proposed.

I think people will look at that and the kind of the old school new e-coupon clipping strategy with its tax advantages, I think will pique a lot more investors' curiosity than it has over the past couple of years with rates at low levels and other attractive options out in the marketplace.

And our next question comes from the line of [Ron Lane] with ValueForum.

Can you hear me? That's first question.

Yes. We can, [Ron].

Great. I have 3 brief questions. Number one, we have owned ATAX since February of 2014. And I looked at my old notes, which are difficult to read and the older years prior to 2018. I had a big note written down 92% to 95% tax rate from the CPA who does our taxes. And I noticed on a report that came out from I think Jesse's office '18, '19 and '20 that rate has come way down to where it is expected to be now which have told many times to expect something in the rate of about 60% tax rate. So something happened in the way you run your business or the way you do the accounting to effect that kind of a dramatic change and I was wondering if you, Ken, like to tell me what it was?

Yes, [Ron]. The -- I believe the table you're referring to is the last page of our quarterly supplemental report in which we summarize the breakout between taxable income versus tax-exempt income as reported on the schedule K-1s for individual investors, and you are correct. In '18 and '19, we reported between 60% to 65% taxable income and that was a result of a couple of different factors.

One was the sale of owned real estate that the Partnership had either taken back through mortgage revenue bond defaults during the credit crisis or through an investment opportunity in Florida, where they can position the asset for sale with a mortgage revenue bond property and get excess proceeds, which did come to pass.

Probably the more larger impact was the addition of the Vantage investment portfolio, which is a taxable investment for ATAX, and this began with the consent solicitation that was completed back in 2015 in an effort to capture opportunities that we're seeing in the market rates and taxable space, and to diversify the ATAX's operations to take advantage of opportunities that were outside of the tax-exempt space. Ken, anything to add?

That I think was really the genesis of that shift you're referring to [Ron] was as Jesse referred to the consent solicitation. I think that the Vantage investments have been a great diversifier for us in our portfolio, and that's helped even out some of the origination ups and downs that we see periodically on the traditional tax-exempt MRB portfolio. So I understand that there is a difference on a year-to-year basis between what's generating that income. But I think on the whole, that the benefit of that additional asset class in our portfolio has outweighed any potential additional cost by that income being taxable as opposed to tax-exempt.

Yes, the problem as you can imagine with people in the slightly higher tax brackets it's created a real quick conundrum. I mean, I always -- it was a no-brainer. You always hold it in the taxable account, and now the big question, which I'm discussing with our CPA firm and the fiduciary that takes care of our family is whether we should continue with it in the taxable account or move it into an IRA where duly taxation really would be on the RMD area. And if you have other things to liquidate to come up with the RMD, it would be tax free. So it's a real -- it's creating a real problem and lot of meetings.

Let me move on to number two. Back in November of '03, I was one of the folks who started a large investment group called ValueForum. We have 633 members today. I know a lot of them because we used to have annual conventions. We would have speakers from the group and outside speakers, CEOs of companies and folks like you all that would make presentations. Most of our members are retirees or folks that are getting ready to retire, prepare for it financially. There is a general consensus, which surprises me quite frankly because I could care less that most all folks that are retired in our group prefer to get paid monthly rather than quarterly, significant change where they are for one investment over another one.

And I think my concern is when you pay quarterly, and it's happened today because I can look at all the shared portfolios what people are doing, would you pay -- when you pay quarterly or anyone pays quarterly you can open up the door for trading in between. And we have some very, very skilled day traders that can sell down their ATAX holdings for some quick opportunities especially with all the craziness going on with cryptocurrencies, Robinhood. you name it, they're doing it. I just stay away from the whole thing. But a lot of people are doing it and some people are doing very well with it.

So I've made my pitch once already to members -- a member of your management team, and I know it's difficult to change, but I can tell you another firm that was one of my largest holdings up until spring of 2020 switched from quarterly to monthly, which is awkward. Sometimes, it's easy if you -- it's like $0.09 that you've just paid for the first quarter, you'd be paying $0.03 for the 3 -- each of the 3 months. But they had to go to like $0.03856, but it can be done. And I didn't know was that something you would even consider but I can tell you, you would get a lot more people investing in ATAX. I know that. That's a given.

So I wanted to at least run that value, if you will. I've done it with one of these people individually but -- and Andy Grier -- Andy also in Investor Relations, so 2 of the people. And I don't know whether that's something you've ever spoken about at all in your meetings moving to monthly.

[Ron], that's a topic that we haven't discussed. This is, at least from my perspective, the first time we're hearing that kind of feedback from people that there is an important distinction between a monthly and a quarterly distribution. I wouldn't say that there is certainly a larger administrative burden to doing a monthly distribution, and while I think it sort may be more attractive to income-oriented investors I think there also has to be consideration of the fact that you I think become sort of an outlier or off-the-run security by doing something that's kind of contrary to -- it's a market standard. But as I say, I think this is the first time that I'm hearing of kind of this concept from people. So it's certainly something that we'll take a look at here on our side and have a discussion of that.

You said exactly what I expected and I can't challenge it. All I can tell you is what people are thinking and saying because I always run by the group that I'm going to be calling in, and that was overwhelmingly the number one issue, see if you can get them to pay monthly, so I've done that. Lastly, number three, I should be able to answer this myself, but I'm not that good in accounting. I know you had $0.11 -- I'm sorry $0.09 CAD for the first quarter and you earned $0.11 CAD, does that extra $0.02 get reflected anywhere in the future numbers, I mean I know your Board meets every month to declare what the dividend will be but you earned $0.02 more than you thought you'd earn?

I'll let Jesse talk about the accounting, [Ron]. I think the one point that I'll make for you there is with the individual Vantage sales, they do tend to be lumpy that -- as for example the Germantown sale this quarter generated $0.05 of our $0.11 of CAD and timing on that can be, I'm certain, project buyers have rights under their contracts to extend and things of that nature.

So trying to line up exactly when we think a sale is going to close, when we're going to receive our distribution from the Vantage entity, and do all the final accounting of that versus when the Board has to make a decision under the NASDAQ rules for declaration of a dividend. Sometimes those dates don't all align together, so you could have a situation like we had this quarter where the sale didn't close until a little over a week after we had to declare what the dividend distribution was for the first quarter.

So I think that's just the nature of the execution here is that there may be situations where closing is still uncertain or there may be some kind of time lag. But I think as the data has historically shown if you look at on average where the CAD has been versus where the dividend distribution has been on an annual basis, there is a very tight correlation on average. Not necessarily quarter-to-quarter but on average when you look at it over either a year or an extended period of time. I'll let Jesse talk about the accounting piece of that.

Yes. And [Ron], in terms of the cash available for distribution metric that we report in our filings, it is a non-GAAP operating measure that management and the Board consider as a factor in determining the distribution. The Board has the discretion to consider various factors, one of which is the CAD metric as well as net income per BUC. And so I will echo a lot of what Ken said and that the Board has historically taken a long-term view of distribution, net income and cash available or distributions trying to keep a consistency in the distribution hopefully for the benefit of the unit holders rather than responding to spikes in operating results due to discrete events over time.

Okay. Let me sneak back real quickly to the previous question. If someone was thinking of buying ATAX today and they were successful and they had a good taxable account and they had a couple of IRAs, say, of equal value, it was a relative, a brother, would you recommend putting it in an IRA or in a taxable account?

Yes. [Ron], we really can't give that kind of financial advice to people. I would make a recommendation that you rely on your individual accountant or tax planner or attorney as you evaluate those opportunities. We really can't give any kind of general guidance on that front.

Yes. We're -- obviously, we're doing that. I just keep putting the numbers together and I say, wait a minute, if the IRAs are large enough and you don't have to sell them off with the RMDs, it's a larger -- it's more income coming in and so you have to start it cutting back with RMDs because there are no tax consequences where the other way it's about 60% tax-free and 40% is taxable. But again, it's a tough call. I wouldn't know how to recommend it either except I think if I were starting afresh, which I have not, I probably would. That's what we're talking about whether we should put it into the IRAs or not or maybe just keep buying more and put it in both places, so we'll see.

(Operator Instructions) I'm showing no further questions at this time, and I would like to turn the conference back over to Ken Rogozinski for any further remarks.

Thank you very much, Michelle. No further remarks. We appreciate everyone's participation today, and we look forward to speaking with everyone again next quarter.

This does conclude today's presentation. Thank you for participating. You may now all disconnect. Everyone, have a great day.