Hanmi Financial Corp (HAFC) 2008 Q4 法說會逐字稿

Good morning and welcome to the Hanmi Financial Corporation's 2008 Fourth Quarter and Fiscal Year End Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. (Operator Instructions). This conference call is being recorded today, January 29th, 2009.

This call may contain forward-looking statements, which are made under the SEC Safe Harbor rules for forward-looking statements. Forward-looking statements related to the Company's future operations, prospects and business are identified by words such as will, should, could, expect, intend, anticipates, believes, estimates, predicts, potential or continue, or the negative of such terms. Although we believe that expectations reflected in the forward-looking statements are reasonable, based upon our current judgment, we cannot guarantee future results, level of activity, performance or achievements.

These statements involve known and unknown risks and uncertainties and other factors that may cause our actual results, level of activity, performance or achievements to differ from those expressed or implied by the forward-looking statements. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Hanmi Financial.

Accordingly, actual results may differ materially from those expressed in or implied or projected by the forward-looking information and statements. Hanmi undertakes no obligation to update any forward-looking statements in the future. For additional information on factors that could cause actual results to differ materially from the anticipated results or other expectations expressed in forward-looking statements, please see the Company's filings with the SEC.

Presenting the Company today are Jay S. Yoo, Hanmi President and Chief Executive Officer, Brian Cho, Executive Vice President and Chief Financial Officer, and John Park, Executive Vice President and Chief Credit Officer.

I would now turn the call over to Mr. Yoo. Please go ahead, sir.

Thank you, Michelle. Good morning, everyone, and thank you for joining us today. In today's press release, we noted that Hanmi Bank, like its competitors, continues to operate in a difficult environment. The challenges we faced in 2008 are reflected in our income statement and the balance sheet. Brian and John will address them in more detail later.

In brief, we reported a fourth quarter loss of $3.8 million, or $0.08 per share, largely as a result of a substantial increase in the provision for the credit losses. Fourth quarter 2007 reported a net loss of $100 million, or $2.15 per share, which was a reflection of a non-cash goodwill impairment charge of $102.9 million.

For the full year 2008, we reported a net loss of $102.1 million, or $2.23 per share, compared to a net loss of $60.8 million, or $1.27 per share in 2007. The 2008 net loss includes a second quarter non-cash goodwill impairment charge of $107.4 million, whereas the 2007 net loss includes a non-cash goodwill impairment charge of $102.9 million.

Without the impairment charges, non-GAAP net income for 2008 would have been $5.3 million, or $0.12 per diluted share, compared to a non-GAAP net income of $42.1 million, or $0.88 per diluted share in 2007. Suffice it to say, all indications are that 2009 will be another challenging year, as well.

During this economic downturn, our focus is on the improvement of our credit quality and the soundness of our business, not on balance sheet growth. That said, credit monitoring and risk management continue to be our highest priorities. Since we last spoke three months ago, we believe that we have made significant progress in identifying and appropriately classifying problems [in loans]. Moreover, we have been diligent in provisioning for credit losses where appropriate.

Equally important, we are likewise working closely with borrowers to address and resolve weaknesses in potential problem loans before they become unmanageable. This is especially true with regard to small businesses, which are being particularly hard hit in the current recession.

Second only to credit monitoring and risk management is liquidity and the need to strengthen our deposit base. Core deposits are the foundation of our business. Accordingly, we are working hard to reestablish Hanmi as southern California's preeminent community bank, appealing to small and mid-sized businesses.

Third, we continue to work on further streamlining our operations, to achieve greater operating efficiencies and reduce costs.

Community banking is built on relationships and trust, which go hand in hand. Customer relationships and trust have been Hanmi Bank's management philosophy from day one.

However, with the recent rapid growth of the bank, we may have lost sight of these roots on occasion. We must reaffirm our commitment to providing the very best in customer service to regain their confidence. Likewise, we must demonstrate that credit issues are under control and that the future of the bank is secure. This is our mandate for 2009.

I will now turn the call over to Brian to review our financial highlights.

Thank you, Mr. Yoo. Good morning, everyone. Let's start with the liquidity issue, a hot topic in the banking industry. In the fourth quarter, the situation was even worse in our niche markets due to the fund outflow to Korea. This outflow was triggered by depositors' currency speculation of a potential future appreciation of the Korean currency.

According to our contingency funding plans [executed] in the fourth quarter, we continued to take broker deposits as a main source of wholesale funding. The broker deposits therefore increased to $818 million at December 31st, from $266 million three months earlier. With the additional broker deposits, our total deposits increased by roughly 10% to $3.1 billion, from $2.8 billion at the third quarter end.

We therefore reduced our borrowings from Federal Home Loan Bank by 28% to $422 million at year end, from $583 million three months earlier. As a result, the future availability of Federal Home Loan Bank borrowings increased to $261 million as of December 31, 2008, and we were able to lower our net loan to deposit ratio to 107% from the prior quarter end's 117%.

Our [most] product in 2009 is to replace these broker deposits with customer core deposits to the maximum extent. We believe we can rebuild our core deposit foundation this year through our deposit-gathering programs, helped with enhanced products and service offerings.

Starting in January, we have already observed some increase in customer deposits with the stabilization of the Korean currency valuation and our broker deposits has now been reduced to $728 million, and the future availability of Federal Home Loan Bank borrowings has been increased to around $340 million.

In addition to this FHLB borrowing capacity, we have secured over a $1 billion line with a Fed discount window, and these contingency lines together are sufficient enough to address potential liquidity situations in the time of financial turmoil.

On the asset side, we have closely monitored our lending activity on a daily basis. New loans were strongly discouraged and even [liens] were selectively made to quality borrowers only.

To reduce pressure on net interest margin in this low interest rate environment, we are putting the most attention to maximize pricing on every single credit extension. As a result, at the last year end, total assets and gross loans were $3.87 billion and $3.36 billion respectively, essentially unchanged since the third quarter end.

Now, I will share with you our income statement, starting with the net interest income and margin. During the fourth quarter, the Federal Reserve Board cut the rate three times for a total of 175 basis points. Our average earning asset yield decreased by 59 basis points to 5.92%. On the other hand, given the serious deposit competition in the current economy, we were not able to lower as much the interest rates on our deposits. The average fund cost therefore decreased only by 12 basis points, to 3.22% in the fourth quarter. As a result, our margin was compressed by 56 bps to 3.34% from the prior quarter's 3.9%.

With the drop in the margin and the negligible balance sheet changes, our fourth quarter net interest income decreased by $5.1 million to $30.4 million, as compared with the prior quarter's $35.6 million. We expect further margin compression in the first quarter this year because of the anticipated full impact of the fourth quarter rate cuts. However, with the Fed Funds Rate now close to zero, we expect to see margin expansions in the latter part of this year as our highly-prized time deposits re-price.

Let's turn to non-interest income components next. In the third quarter, we reported unusually low non-interest income, brought about by other than temporary impairment losses on Lehman corporate bonds and a CRA equity investment. Another OTTI loss on the same CRA equity investment again reduced the fourth quarter non-interest income by $490,000 to $7.4 million. In the full year 2008, our non-interest income decreased to $32.2 million, compared with $40 million in 2007, due mainly to the said OTTI losses and the reduction of a loan sales gain.

The depressed secondary market for SBA loans substantially decreased our gain on sale of loans to $765,000 in 2008, as compared with $5.5 million for the year 2007. We expect a meaningful recovery in non-interest income this year, since all securities with a significant valuation risk are now, we believe, properly reserved. We also believe the SBA secondary market will be better this year, as the Fed's term asset-backed security loan facility, TARP, takes action, takes effect in this year.

Non-interest expense was $20.8 million in the fourth quarter, compared to $22.2 million in the third quarter. This sequential improvement of $1.4 million is largely attributable to our $2.2 million reduction in [customer] expenses which resulted from the third quarter Fed reduction and a decrease of $430,000 in data processing expenses, partially offset by some increases of other pricing expenses.

For the full year 2008, non-interest expense, excluding non-cash goodwill impairment charges, slightly decreased to $86.4 million, as compared with $87 million in 2007. We expect increases in some expenses [for this business by the month], such as FDIC assessments. However, we are confident that the cost savings coming from our ongoing cost reduction efforts, including the downsizing of unprofitable business lines, will more than offset such increase.

I will now turn the call over to John Park, who will consider various metrics dealing with credit quality and provide an overview of our loan portfolio.

Thank you, Brian. As I did last quarter, let me turn first to the subject of non-performing loans and delinquent loans. It is apparent that the deteriorating economy contributed to a further deterioration in the loan portfolio during the fourth quarter. Non-performing loans were $121.9 million, or 3.62% of gross loans at December 31st, compared to non-performing loans of $111.9 million, or 3.34% of gross loans at September 30th.

The breakdown on NPL is as follows. 31% were construction loans, 48% were C&I loans, 7% were CRE loans and 13% were SBA loans. Delinquent loans were $128.5 million, or 3.82% of gross loans at September 31st, compared to delinquent loans of $112.9 million, or 3.08% of total gross loans at September 30th. The largest contributor here was an $8.5 million loan to a private golf course near San Diego. In addition, one out-of-state motel loan in the amount of $2.4 million and one commercial property loan in the amount of $2.5 million contributed to this increase.

The fourth quarter provision for loan losses was $25.7 million, compared to $13.2 million for the third quarter. The majority of this increase is just attributable to the golf course loan I have previously mentioned, a newly identified trading company loan, an additional reserve for open condominium projects and other newly identified commercial term loans.

Charge-offs, net of recoveries at December 31st, were $19.5 million, compared to $11.8 million at the end of third quarter. With the exception of two non-performing CRE loans, which I will discuss in a moment, the bulk of fourth quarter charge-offs were in a number of loans to small businesses, which continued to be hit hard in this deepening recession. The allowance for the loan losses at December 31st was $75 million, or 2.11% of total loans, compared to $63.9 million, or 1.91% of total loans at September 30th.

The largest contributors to fourth quarter charge-offs were two non-performing loans, which we have spoken in the past. First is a condominium project in northern California. The project is now complete, and whereas we had at one time contemplated allowing the builder to convert it to a rental property, pending a recovery in the market, we have now decided that this would not be an appropriate position for the bank to take.

Rather, we are looking to sell it and hope to find a buyer within the first or second quarter. To date, we have charged off $8.9 million against the project, including $6.5 million in the fourth quarter, bringing our cost basis down to approximately $25 million, and we have reserved another $1 million.

Second is the low-income housing project here in Los Angeles, which is still tied up in involuntary bankruptcy. Following a $4.8 million charge-off in the fourth quarter, our carrying value is now $12 million. Unfortunately, because there are a number of entities involved in the bankruptcy proceedings, we are unlikely to see a quick resolution.

Another loan of which we have spoken in the past is a C&I loan secured by five car washes in California, with a carrying value of approximately $24 million. Following a third quarter restructuring, the loan is no longer delinquent, and with another two months of satisfactory performance, it will no longer be classified as non-performing.

2009 is of course very young, but despite the likelihood of further deterioration in the loan portfolio as a whole, our current expectation is that in 2009, the loan loss reserve as a percentage of total loans would not be appreciably higher than the 2.11% experienced in the fourth quarter of 2008. With a few exceptions, our commercial real estate portfolio appears to be holding up reasonably well.

For example, we recently conducted a stress test on 244 of the largest CRE loans, with a combined loan exposure of approximately $740 million, and a current value of collateral of approximately $1.2 billion, for a loan to value of approximately 60%. For some loans, of course, have higher LTVs than others.

Nonetheless, we have determined that in a moderate scenario, overall values decrease to $987 million, for an LTV of 75%. Only 11 loans would be underwater or a net collateral shortfall of less than $5 million. Moreover, despite continuing weakness in the retail sector in 2008, we were, we believe, thorough in charging off small business loans where such action was called for, especially in cases where there was no collateral to support the loan.

Put another way, although we anticipate an increase in delinquencies in 2009, we do not anticipate this increase will place any undue strain on the future estimated reserves, as we feel that we have increased needed reserves in a timely manner. In addition, we continue to work assiduously to accommodate customers' needs, on occasion, for example, negotiating a reduction in monthly payments to help ensure that they will survive the current downturn.

In summary, the guarded optimism we expressed in the October conference call has been hampered by the further weakening of the economy during the fourth quarter. It is now clear that the recession will not be short lived, that it will almost surely persist through most, if not all, of 2009. That being the case, it is likely that a measurable improvement in the credit quality of the loan portfolio will have to await an improvement in the economy as a whole.

This completes our prepared remarks. Michelle, we are now ready for the Q&A.

(Operator Instructions) And your first question comes from the line of Don Worthington. Please proceed.

Thank you. Good morning.

Good morning.

Good morning.

One question. In terms of the increase in brokered deposits, what rate are you paying and what's the term of those accounts?

The rate difference depends on the [counsel] costs, and we are [let] the maturity from three months to one year, around, so average rate I may say about 2.75%.

Okay, great. And then, in terms of access to TARP funds, do you have an update on your application status?

Well, like many other banks that applied, we haven't yet heard from Treasury regarding TARP funds. Although we are hopeful at this point, we simply do not have enough information to gauge the likelihood that our application will be approved. However, at this time, we are expecting to receive good news in a few weeks.

Okay, thank you.

Thank you.

Your next question comes from the line of Julianna Balicka. Please proceed.

Good morning. I wanted to find out what is the reason behind the decrease in FHLB advances? I see that they went down from $584 million to $422 million.

I am talking about future availability of Federal Home Loan Bank line, so total availability still remains same. And our borrowing ability, because of the usage was very heavy at the end of the third quarter, so our future availability was -- I don't remember exact number, but around $100 million only. But at the end of the year, we reduced our usage of FHLB borrowing. So as a result, our future availability has been increased to $226 million; and then in January, we further reduced our usage of FHLB borrowings, so future availabilities again increased up to $340 million level.

And what kind of funding did you replace this with in the January when you reduced the funding?

Well, in January, as I said, we actually experienced deposit increase.

Great. And on the Oakland condo project, the $6.5 million charge-off, can you refresh my memory on what the remaining book value is on this loan?

The remaining book balance is $25 million.

And what's going on in terms of the resolution of that loan?

Yes, we're looking to sell that property. Previously, with anticipation of some recovery in this current situation -- at one time, we did contemplate converting that to a rental property, but I don't think that makes sense for the bank at this time, so we are looking to sell that, hopefully in the first or second quarter of this year.

Very good. And then finally, I'm sorry if you said this on the call. Is there a brokered CD limit that you may take on?

Well, there is no limit imposed by regulation, so as long as the money is available, we can play with the brokered deposits. But -- anyway, the core deposit is our core foundation of the banking, so, as I said, our priority in 2009 is to replace that brokered deposit with our core deposits, and we actually experienced deposit increase in this year, starting this year.

Very good, thank you very much.

You're welcome.

(Operator Instructions) And your next question comes from the line of [Bill Chen]. Please proceed.

Great. Thanks for taking my question. Just to kind of come back to the FHLB question, you guys have been taking the balance of the advance down, correct?

Yes.

And so, I'm looking at the average interest rates on the cost of your capital and FHLB is showing 2.01%. Is that correct?

It depends on the terms, again.

Okay, but on average?

On average, I may say around 2.5%. We have some long-term borrowings, about two or three years, tops, we made only last year.

When I look at your CDs and other deposits above, they look like they're all being priced above the FHLB loans, the cost of capital.

Yes, that is true.

So, if that's the case, why are you paying down the FHLB loans?

Well, as I said, the core deposit is our basic foundation to the banking business. And if we are only concerned with the cost and income statement, you are definitely right. We don't have to get the deposits from our customers, which is much more expensive.

But we need core deposits because our deposit customers is going to bring in fee income and also lending opportunities. So, our depositor is our backbone in our business, so although the cost we have to pay is higher than borrowings, we have to build up our relationship further.

Right, and that makes sense, but at the same time you're taking on more brokered CDs, which are not part of your core deposit and you don't have the same relationship.

So, it's in brokered deposit and Federal Home Loan Bank borrowing is -- brokered deposit, there is no guarantee the money is available forever. But holding company, the borrowing is more stable as compared to your brokered deposits. That's one reason.

And the second reason is Federal Home Loan Bank borrowing is much more flexible and they offer from overnight to 10 years, and also it's available right away, when you need the money.

Right, but that would make an argument for why you should be taking down more Federal Home Loan Bank advances, rather than taking on brokered CDs. But it seems to have been flipped backwards.

So, to secure our future funding plan, we tried to secure the Federal Home Loan Bank borrowing line. And brokered deposit money is now currently available, so when it is available, we are using that money. And then, regarding Federal HLB borrowings as our contingency lines in the future, for the future use.

Right, so what that indicates is that at least in the fourth quarter, you were having some liquidity issues, I guess, is the way to put that.

Yes. We had liquidity issues, the same as other banks. That's why we activate our contingency funding plan.

Okay. And in terms of -- how much of off-balance sheet line of credit, whatever the case may be, do you have that you need to make available to your customers?

Well, I don't even [have] a number, but total amount off-balance sheet items was about $300 million. I will get back to you the real number, but one thing I am sure it was -- the [community] lines was reduced during the fourth quarter by $70 million and from $300 million to $230 million. I don't remember exactly.

I don't have that breakdown.

That's all right, I may now be clear now. -

Yes, anyway, this decreased by $70 million during the fourth quarter.

Right. Just to make sure I'm being clear, I apologize, I might not have been. I'm thinking more of line of credit and other monies available to your customers.

You're talking about undisbursed commitments.

Exactly, that's what I'm wondering about.

That number has been decreased by $70 million.

That's right, yes.

We are continuing to monitor that portion of it. I do apologize that I don't have an exact number on hand. I will have that ready, that explanation available at a later time.

Okay, all right, I'll just follow-up offline.

Thank you.

In terms of the deposits, both the non-interest-bearing deposits and the money market and NOW deposits, have they just mainly been coming down just because of the situation with the cash moving back to Korea as you guys have been talking about --?

That's one reason, and another reason is the same situation all banking industry has suffered, where depositors lost some confidence in banking system. So, that's what happened, too, in the fourth quarter.

And that would have hit your non-interest-bearing deposits more?

Yes.

Is that a fair statement? Okay. So, that isn't so much customers leaving your company or people having to draw down money because they're having issues, personal issues?

Well, yes, that's right. Personal interest, they are losing appetite for the banking system worldwide, after the Lehman situation, Lehman bankruptcy.

Okay, so that's what it is. I guess what I'm asking, the reason I'm asking this is as you probably understand a lot of us are looking for the canary in the coal mine, so to speak. And so, you do a lot of banking with your customers, and so when I start seeing that many deposits leaving the bank, if the reason that the deposits are leaving the bank is because they're having financial issues, then it makes us a little bit concerned about the loans, of course.

So -- the main reason was pure speculation for currency valuation. I don't know if I understand your question correctly. In October, December, October, November, the Korean currency won has been depreciated a lot, almost a full 45%, 40%. So, they expect the currency will be back so, they send the money for their investments in Korea. So, their financial interests triggers such an outflow.

Right, and that makes sense for the money market and the NOW deposits. That's a pretty good explanation for that. But I'm trying to understand what happened in the non-interest-bearing deposits.

Well, non-interest-bearing is a different one, actually. This was obviously affected by recession we experienced. So, the business is quite slow, so the average balance of individual accounts is a lot lower than before, so that's the main reason.

Okay, so does that imply that they're having -- some of your customers are having financial situations?

That's right. Their business is slow.

So, how many of the loans that you're making, especially on the C&I side, are to those same customers that have the non-interest-bearing deposits who then are having these financial issues?

Well, currently, our lending activity is not that active. I have not had that many requests from existing customers, but indicated by our loan volume, there has not been any significant increase in the fourth quarter.

Okay, that makes sense. And in terms of the situation, how are you guys planning to attract customers? Excuse me, customer deposits, because I'm looking at the situation with the brokered CDs, and when -- the $800 million of brokered CDs is basically about 26.6% of your total deposits, and so I'm watching your total risk weighted capital ratio approaching that 10% mark.

Okay.

And so, you guys need to be bringing in a lot of deposits really quickly, and so how do you do that?

Well, so, as I said, in January, we already experienced deposit increase. So basically, lots of money, about $200 million in December alone, was flown out to Korea for currency speculation, so once the currency stabilized, the money is coming back. And in January, we already experienced about -- we almost were a $200 million increase in deposits, okay.

So in January, $70 million -- no, $90 million are over [$800 million] brokered deposits, $90 million has matured, and we did not renew, so our brokered deposit has already reduced to $728 million, okay. And we have a good size of cash stop-loss position now, so in the February and March, we are waiting another $200 million brokered deposits will mature.

And with our current cash position, we don't have to renew those brokered deposits, and this continuing deposit increase is going to help further to handle the other brokered deposits to mature after the quarter, after the first quarter.

And it sounds as if your FHLB line, and also the line to the Fed will probably help you --

Yes, it is the contingency line.

Okay, that makes sense. And in terms of the golf course, I'm sure you guys are well aware there was a San Diego Union Tribune article on it?

Yes.

It's the Fallbrook Golf Course, right?

Yes.

And so, how big was the loan to the Fallbrook Golf Course?

$8.6 million.

So, it was $8.6 million to Hanmi?

Well, from -- we made the loan in the amount of -- current outstanding exposure is $8.6 million.

Okay, because this article was suggesting that it's $18.1 million of the total loan, and so I'm just trying to figure out where that number comes from.

Where'd you get that number?

That's in the article.

No, our -- oh, I did read that article, and I think when they did title search, they doubled it. I don't know how that doubled, but our exposure is $8.6 million. I did read that article, also.

Is there any other exposure to other folks that you're going to have to fight with over that situation?

Right now, the latest information I have is there is a buyer for the golf course, so as it stands now, I think that will be resolved in the next 60 to 90 days. That's what I anticipate. I am waiting for the documentation of that sale at this time, but that's the latest I have on that, the golf course.

Okay, great. And in terms of the construction loans, can you guys give any visibility on what's in there? Is it land loans, is it construction loans, geography? Anything that gives us color would be great.

All the land loans are in California, and as you know, some projects are being delayed. Some of our borrowers who acquired these lands in anticipation of construction, some of those are being delayed, and as renewal requests do come up, we re-appraise the property and we request for principal reduction and such.

Okay, so they're not speculators, they are --?

No.

-- who may have not gone vertical yet on that?

No, not yet.

Okay, so that's not so bad then. And in terms of the C&I loans, the same thing. Could you just give me any kind of color whatsoever on that geography, size of the companies, industries, anything?

Well, our business is concentrated in California. Our out-of-state loans, through our loan production offices we do have -- there is loans out of state, but over 80% of our loans are located in California.

Okay, but, as you well know, I'm in Los Angeles.

Yes.

And there's quite a bit of discrepancy, depending on where those loans are, whether it's west LA versus Riverside, Inland Empire, versus Merced, so are they mainly in the Korean community, west LA?

It's in LA County, Orange County. We do not have any exposure in Inland Empire.

Okay. And anything in terms of industries, any other color besides what you gave?

Well, we do have significant loans in gas station and car wash business, and also hotel industry. So, as you know, the car wash business has been impacted by current downturn, so we are seeing some weaknesses in that industry.

Well, I really appreciate your clarity, guys. Thank you.

Okay. Before you go, you asked undisbursed commitments. That amount is $336 million as of December 31st.

It sounds like you guys have more than enough on the line then to deal with that. Great.

Thank you.

And your next question is a follow-up from the line of Julianna Balicka. Please proceed.

Thank you for letting me come back to the queue. Quick question, your FDIC base insurance assessment rate for next year, what that's going to be?

Oh, it will be $0.17 per $100.

17 basis points?

That's right.

That's your base assessment, right?

Right, 17 bps.

That's the new one for 2009, or that's the old 2008 that's going to be increasing?

No, I'm talking about 2009.

2009, okay. Very good. Thank you very much.

And that concludes the question-and-answer session. Now, I'll turn it back to Mr. Yoo for closing remarks.

Thank you, Michelle. When we last spoke, it was clear that the credit contraction that dominated the news during that time was beginning to have a negative impact on the economy as a whole. Today, we can see that the results of that contraction have extended far beyond just the credit market. We are now well into what is clearly one of the most severe economic downturns in memory, with little reason to believe that it will end soon.

As today's quarterly release makes clear, the positive trends in delinquencies and NPLs that we saw in the third quarter did not hold. Moreover, historically low interest rates and the fierce competition among Korean American banks have put pressure on core deposits.

However, although the slowing economy has had an impact on both our balance sheet and income statement, we believe that the risk inherent in the bank's loan portfolio is manageable, and that liquidity needs can readily be met. Today's economic environment does indeed present enormous challenges, but they are challenges that Hanmi is well prepared to meet.

Again, thank you for joining us today. We look forward to speaking with you when we report our first quarter results in April. Thank you, everyone and goodbye.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a great day.