Home BancShares Inc (HOMB) 2007 Q3 法說會逐字稿

Greetings, ladies and gentlemen, and welcome to the Home BancShares, Incorporated third quarter 2007 earnings call. At this time, all participants are on a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone key pad. As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host. Mr. Brian Davis, Director of Financial Reporting for Home BancShares. Thank you, Mr. Davis, you may begin.

Thanks, Anthony. I want to welcome everybody to the Home BancShares' third quarter earnings conference call and webcast. Here with me today is John Allison, our CEO, Ron Strother, our Chief Operating Officer and Randy Mayor, our Chief Financial Officer. The purpose of this call is to discuss the information and data provided in our quarterly earnings release issued this morning. We'll begin with our discussion with an overview from the group and then we'll entertain questions. I want to remind everybody to refer to our cautionary note regarding forward-looking statements, which was included on page three of our form 10K which was filed with the SEC this past March.

With that said I'll turn the call over to John.

Thank you, Brian. Good afternoon, ladies and gentlemen. Thank you for your interest in our company and we appreciate you joining our third quarter conference call. I hope all of you have read our press release. We're very proud to report record third quarter earnings up 21.9% over the third quarter of last year. For the first 9 months of this year net income totaled 15.1 million, a 31.6% increase over the 11.4 million that we did the first 9 months of '06. GAAP EPS for the first 9 months of '06 was $0.74 and GAAP EPS of the first 9 months of '07 was $0.86, up $0.12, and we're proud of that. We pay a lot of attention, as I'm sure you investors do, to cash EPS and '06 was $0.79 on the cash side and $0.90, record $0.90 on the '07 side.

The third quarter just really could not have gone any better. While enjoying record earnings the Company had good strong loan growth, improved margins, improving asset quality and improving net interest income, and we'll elaborate more on on that as we go. After my remarks we'll go to Ron Strother for some additional color on the loan side, and let Ron bring you up to date on what we're seeing out there and what we're -- how the mix is operating for us right now. And then we'll go do Randy Mayor for a little discussion on some color on the finance side and what's happening with the margin.

Let's go to the numbers. Net income was a record if 5.2 million, up 21.9% year-over-year from 9/30 '06 to 9/30 '07 and earnings were up $0.05 a share from $0.25 last year to $0.30 this year up $0.20. On the cash side we had record earnings there also of 5.5 million, up 20.6%, up $940,000, or $0.31 cash diluted EPS versus $0.26, also up $0.05. Excuse me, on a linked quarter basis we earned $5.2 million for the quarter up 13.1% and dilute EPS was up $0.01, 13.1% from $0.29 to $0.30. On on the cash side, as I said, we earned 5.5 versus 5.3 on a linked quarter basis, up 12.4 and cash diluted EPS was up $0.01 or 13.2%. Net interest income for the first -- for the 9/30 '07 versus 9/30 '06 we earned 17.3 million on net interest income versus 16.4 up 5.4%. We put a little less [roll off] provision for loan loss for this quarter than we did a year ago was about 100,000. And non-interest income was up 34.4% year-over-year from 4.7 million to 6.3 million up 1.6 million.

While non-interest expense was up 9.6% as we continue to try to keep our foot on that non-interest expense. Interest margin, even though we're fighting a pretty tough market out there, year-over-year margins were down, only down from 357, 355 down 2 basis points year-over-year. On a linked quarter basis, our net interest income was up 575,000 or 13.6% and in the 2nd quarter we put about 680 in loss loan and in this quarter we put 547 in loan loss, down about 130,000. Non-interest income was for this quarter was 6.3 versus 6.6 last quarter, but if you remember, we had two one time gains probably primarily resulted from the hurricane recovery in Florida in the second quarter. So actually core non-interest income was up. Non-interest expense was 15.6 versus 15.5. It was an increase of $82,000 which primarily is made up of advertising and FDIC insurance. Advertising was up about 60 and FDIC insurance was up about 30, as that continues to ramp up on everybody over a period of time.

I think I told you that we felt like we were fully staffed before. The first quarter we had 575 full-time employees. As the end of the second quarter we had 589 and -- excuse me, at the end of the first quarter we had 574, at the end of the second quarter we had 589, and at the end of the third quarter we have 575. And Randy will give you a little more color on the margin after I finish my presentation. But for the linked quarter basis we went from 351 to 355, so we improved margin by four basis points and we're proud of that.

ROA year-over-year was 0.83 in '06 and 0.92 in '07 up 9 basis points. Cash ROA likewise from 0.90 to 0.99. We're pushing at the 1%. We just haven't quite gotten there but we're getting awfully close to it. Cash trends with ROE year-over-year from 1061 to 1116 up 55 basis points, and year-over-year improvement in efficiency ratio went from 6372 down to this year of 6247, down 125 basis points. On a linked quarter basis GAAP ROA remained flat, 0.92, 0.92, no change. In spite of the credit bubble that we thought we had during the quarter it turned out to be a really pretty good quarter. Cash ROA went from also remained flat 0.99 to 0.99 as our goal heads toward 1%, and we improved cash trends with ROE from 1114 slightly to 1116.

Efficiency ratio dropped a little bit, about 48 basis points from 6295 to 6247 as we continue to expand our de novo branching and we'll talk more about that in a minute. On the loan side year-over-year we grew $173 million, up about a little less than 13% from 1.39 to 1.56. Total assets grew from, excuse me, total assets grew from 2.11 billion last year to 2.27 billion, this year up $154 million, and deposits grew $41 million year-over-year from 1.56 to 1.60. Big jump in shareholders equity up $21 million from $225 million last year to just short of $250 million in shareholders equity, 246.6 million. Loan deposit ratio continues to move in the direction want it to run, up to a 97.61.

On a linked quarter basis pretty good quarter. Ron will talk more about this, as I said, in a minute but we're up 35.4 million in loans for the quarter. Total assets increased 27.8 million up 4.9% and deposits which is really a snapshot of those deposits was down 44 million, on the average deposit side it was only down 4 million. We had a large 1031 exchange that came in with about $10 million that resulted in about a $12 million loan. We had about 12 million in school funds that went out. So primarily big customers and public funds moving around at end of the quarter.

Total stockholders equity on a linked quarter basis jumped 8.2 million or 13.6%, and I'd talk to you about loan deposit ratio. We're not concerned about the deposit side, as we have shortly -- we have a little less than 100 million rolling off in investment securities this year. We have over $200 million in federal home loan borrowings, lines available, and if we don't get another deposit from a customer, we only have $53 million in total brokerage deposits, and we could run that to 250 if we needed to. So, as we've said in the past, we've stayed out of the fray in these -- we had a competitor run money up in '06. We got another one trying to play out in that game right now, but I think that will come -- I think that will go away before too long.

On a loan loss reserve, let's talk about asset quality, which improves substantially for the quarter. A reserve September 30th of '06 was 1.87. It remained basically flat for this quarter to 1.84. Allowance to nonperforming improved substantially. We had 417% coverage September last year and we're at 1,052% coverage to nonperforming loans this year. Nonperforming loans to loans dropped from last year at 0.45 to 0.17. I think that's the best in the Company's history. And nonperforming assets remained flat from 0.33 to 0.34. Loans and leases past due 30 days, including past due non-accrual loans and leases to total loans, was a record 0.48 down from 0.92 a year ago, down 44 basis points.

Allowance on a linked quarter basis at the end of the June quarter of '07 we were 1.84. We remained at 1.84 this quarter. Our allowance to nonperforming at the end of June, if you remember we had that large $11 million credit on there, our coverage was only 147%. That is now risen to 1,052% coverage to nonperforming. And nonperforming loans to loans at the June quarter were 1.25 and they've been reduced, as I said, to a record low of 0.17. Nonperforming assets to assets dropped from the June quarter at 0.86 to a 0.34.

Past dues at the June quarter were 1.44 and past dues at the end of the September quarter just closed was [448]. We finished the first quarter with about $3,000 in recoveries versus charge-offs. In the second quarter we had about a $500,000 worth of recoveries versus charge-offs. For the first time we had some charge-offs we had $23,000 worth of charge-off total in the third quarter. We added $547,000 to the loan loss reserve bringing our total loan loss reserve to 28.636 million. We've added over $2.5 million this year as we continue to build that loan loss reserve.

On the branch expansion we're opening Key West, key Largo, we've opened in Quitman, Arkansas which is a play into [Fayetteville] Shale market. We've opened two more new branches in Searcy, Arkansas as we liked that market, moving even deeper into the Fayetteville play. That will give us a total of three branches in Searcy. And we've opened our first branch in Bryant, Arkansas, that's part of the Little Rock MSA that we have not had a branch in. Pending branches presently for '07, I don't know if these 2 will be completed, if they do, that with will give us 8, we have 6 open at this time. Morrilton, Arkansas which is another play into the play, will be opening in one of our -- in a grocery store sometime maybe later this year, and then we're under construction for a new one out by the Grey Stone Country Club in Cabot, Arkansas.

That concludes most of my prepared remarks right now. I'm going to turn it over to Ron Strother, who is our President and Chief Operating Officer, Ron will give us some color on our loans. Then Randy will talk about margins and we'll go to Q&A. Ron, would you take it from there.

Thank you, Johnny. As John indicated, Q3 '07 was another good strong quarter for HBI in terms of loan growth. What you see in the financials, although it showed a $35 million increase for the quarter, we actually had about $22 million in payoffs in just the last few days of Q3. There's a substantial agricultural loan that we had. Our borrower was successful in moving about $14 million to long term nonrecourse, and we had a C&I revolver that saw about $8 million of that credit relaxed on the very last day of the quarter. So we really had very, very good numbers, but it abated a little bit in the last week. Our pipeline remains strong. Hopefully Q4 will show similar volume that we had in Q3.

Let me turn to the loan mix for just a second. We had a little bit of movement in categories. Total real estate loans moved up slightly, about 30 BP leaving us at about 81.2% of the portfolio. Within the real estate category, nonfarm, nonresidential was the winner. We had a couple of large projects. Johnny referenced one on some tax deferred exchange money of about 12. We had a healthcare opportunity at about 6.4 million. We saw a decrease in farmland, which was the long term fixed rate loan. Interestingly, and something that we've been talking about lately, we're starting to get opportunity in the one-to-fours parked in the bank, we're closing on one-to-four loans. It moved up about 11 million in the quarter as we seized on the opportunity to book good, single family credits. That gives us this opportunity because of the disruption in the subprime market, and that messes up the whole mortgage pipeline. Non-real estate categories were essentially unchanged for the quarter.

Let me address one issue that is kind of a recurring theme that we've heard, and let me touch on our "exposure" in northwest Arkansas. We're pleased to announce that our exposure in northwest Arkansas is defined to two credits. They are very well secured. They have substantial guarantors committed to these loans with a loan portfolio of 1.56 billion at 9/30, we have only $23 million in northwest Arkansas and we anticipate no weakness in either of those credits.

John, do you want me to touch on the liquor store or do you want to handle that?

You might update them on our liquor store. If you remember, we reported to you that we had owner occupied strip center with a liquor store in it in Florida, and I think we get possession of that hopefully through the court November 19th, is that correct? Go ahead, Ron, and report on that.

Well, it's an interesting situation. We got 76,000 items of liquor, so, if you need Christmas gifts, let us know. We're going to have a sale. We're going to have an auction down there, but the good news is the space that the liquor store occupied, 9,200 square feet, we have a lease in hand at 21.65 a foot triple net. The rest of the center is basically occupied. That will throw off about 25,000 monthly. It will give us return of about 7.6%. We will then offer the center for sale. At this point there's little or no loss anticipated in the credit, so we're very, very pleased. You will have seen about 4.7 million move from nonperforming loans over to nonperforming assets, as Johnny indicated, as we take it into [REO]. John, that concludes my remarks until the Q&A.

Okay, Ron, thanks. Randy, why don't you give us a little color on what's going on on the finance side and margin and what you're seeing there.

As Johnny mentioned, on the margin we were up 4 basis points for the quarter and from an investor's perspective a lot of people are wanting to know what the 50 basis point decline is going to have impact wise on our margin. It's a little bit early to tell that. If you recall, last quarter we were about a little over 2% or negatively GAAP'd. We've moved a little bit more negative direction, about 4.5%, which would show that we're inclined to take advantage of the lower rates of the rate decline. However, that's a 12 month GAAP position that we're looking at, and if we actually break it down and look at it quarter by quarter, we're actually going to be in a positive position over the next two quarters before that starts to turn and that would be expected, as you see that the maturities of time deposits will kind of lag what has basically happened to the variable rate loans, which have been basically immediately repriced. So, we do expect to have a little pressure on the margin for the next couple quarters before we hopefully see an impact to the positive for us for the decline in rates of the 50 basis points.

Randy, thank you. Anthony, that concludes our prepared remarks other than a summary, but Anthony, we'd be open for Q&A if you have any questions.

Thank you. (OPERATOR INSTRUCTIONS) Our first question comes from the line of Jon Arfstrom from RBC Capital Markets. Please, state your question.

Thanks. Good afternoon, guys.

Hey, Jon, how are you doing?

Doing well. Thanks for the call, just got a couple of questions. In your press release you talked about the easing of competitive pressures in '07 is one of the aids to your loan growth. Can you talk a little bit about what the environment is like today and whether or not it's changed over the last two or three months?

I think the reference to the press release was the easing on the deposit side. On the liability side we're seeing a little of that. Is that what you're referencing, Jon?

Yes, it is. It says easing of competitive pressures, and it doesn't necessarily talk about liabilities or assets, and I'm just curious if you could clarify that a bit?

Yes. Randy, you want to talk about the liabilities side?

Sure. As Johnny's mentioned several times, we've had different competitors in the market running up very aggressive advertising campaigns for cost of funds and we've seen that kind of decline somewhat, and then we have another competitor that will step in and do that again, but overall we've seen some more, I would call it reasonableness, to the pricing that's been in the market and also the incremental pricing that's there. We have basically repriced our portfolio. It's been about a year and four months or a year and a half since we started that process. So incrementally the pricing on our portfolio on the CDs and stuff is a little bit less pressure than it had been in the past.

Jon, I think that's continuing on and with the 50 basis point drop we didn't see the competitors drop 50 basis point. We saw them drop part of the way but I think that will be coming on down before too much longer.

Okay. Ron, could you just comment on watch list trend, what that looks like.

Yes. We are enjoying right now just excellent credit quality. Of course, you always have credits. As Johnny has indicated in the past, it's that you look at, but the housing market other than Florida is really not showing much abatement right now. So we're looking at our construction projects. We're looking at the unsold lots. We're monitoring all that, but if there is a weakness, Jon, anywhere, we are certainly watching housing at this point.

We're spending a lot more time on asset quality than we have in the past to be out in front. I think I referred to our largest builder had 12 houses at the last conference call or had 12 under construction. I think he's down to 8 or 9 right now. So that's positive. Arkansas appears to really be in pretty good shape. I still have my concerns about Florida as the wheels have come off that market, as you know. So it's even impacting the Keys some. So if we have anything that pops up, it could be in Florida.

Okay. Okay. The REO balance, is that entirely the liquor store? Is there anything else in there?

Yes. The increase would be about 4.7 million I think, Randy, isn't it?

It's 95 plus% of the number.

Okay.

There's a couple of very, very small, a couple $100,000 amounts at the most in there.

Okay.

Jon, we have multiple pieces of collateral that will be liquidated and applied to that. so hopefully by year-end that will be appreciably lower.

Okay. How do you value liquor, by the way, just out of curiosity?

Well, we have $971,000 worth of wholesale liquor there that's bar coded that's a 1.360 million retail. So I'd rather not say what we value that on the phone because we have lots of people interested in buying that liquor right now, Jon, and hopefully by mid-november we might have it all sold. So if Royal Bank -- RBC Capital needs any Christmas presents, please call us because we have lots of inventory. We found if you sample it first to make sure it's not spoiled, it's better.

I was going say we could take it for next year's conference.

That would be great. That would be great. (laughter) That way we could do some damage to it.

Just one last question, on the Fayetteville Shale, we have an analyst internally that covers oil and gas, and he's all over trends, and it seems like over the last three months or so there's been more positive news out of there, and obviously I'm not in Arkansas. I'm just curious if you can give us an update as to how things have changed there? And if you are changing your plans at all as this thing seems to be accelerating a bit?

Well, so far as the plans we have not changed our plans. As you can see we moved two more branches into the black county, which is really in the play and up into Quitman Arkansas, which is in the play and we'll be moving into Morrilton Arkansas which is also in the play. So we're going to continue with our plan of easing up into those plays pretty inexpensively. We're leasing and we're taking manufactured homes that we've converted, and one of our customers has the large grocery stores and we're operating within that market. So we're trying to do it as inexpensive as we can, but, Ron, you want to update on what's going on in the play.

Jon, it's really, really interesting, and I assume this happened down in Texas. They're getting much, much better at the size of the play, and where we thought it was a certain size, the seismographic testing going on right now is really pinpointing where the heart of the gas is. So the big winner is Southwestern Energy. They got about 1 million acres right in the middle of the play. Chesapeake got in early enough and they're doing well. For some people that got outside the play they're going to get hurt. They leased a bunch of acreage and it has defined limits, but we're right in the heart of that play. They're optimistic. There's certainly gas there. There's a tremendous amount of gas. Obviously the value of natural gas, or what it's selling for, will have a function of how fast they harvest that gas, but we are absolutely in the heart of the play.

Jon, it was reported to us by one of our directors at our Cabot bank who, at Beebe Arkansas, that the most, I don't know what the correct terminology, is the most --

Strongest pressure.

Strongest pressure yet was at Beebe Arkansas, and that's due east of us about 20 miles where we have a couple branches. So they had some problems capping this one because they were blowing off whatever they were putting on the well head they were putting on it, but they're still finding gas there, finding lots of it.

Okay. Great. Thank you.

Thank you.

Our next question comes from the line of Barry McCarver from Stephens, Inc. Please state your question.

Hey, great afternoon, guys, great quarter.

Thank you, Barry.

All this discussion about the liquor store I've lost my composure. Give me a second here. (laughter)

Barry, just get your order in.

I should help you value it. I know exactly how to do that. (laughter) Going back to your original comments on the loan to deposit ratio, and kind of your game plan there for deposit growth, if you did have to go tap the federal advances or look at broker deposits for to fund your loan growth, have you thought about what that could do to the margin and could you share that with us or is that already included in your comment about margin pressure?

Barry, this is Randy. Some of that is factored in there a little bit. One of the reasons we haven't really gone back out to the broker versus the borrowings is that the market seems to be holding up better, I guess, in the broker and the pricing is a little bit more on the borrowing side. So we've elected to stay very short in the borrowings because of the spread differential. So if we are forced to go out and do some of the brokering, which we're not at this point, as Johnny said, we have over 200 million still left on our federal home loan bank line, I keep waiting for the borrowing rates and the brokered rates to get in sync with each other again. If that happens, then we'd be more inclined to go out and get some longer term brokers, but right now we're kind of hanging onto the extra 25 basis points or so that's built into that spread, but if we are forced to do that, that could affect the margin a little bit more.

Okay.

We're seeing some national competitors that are in the mortgage business that are out there probably putting the pressure on that broker deposit rate right now. They've been very aggressive.

Okay. And then just secondly, Ron touched on the loan pipeline and kind of where some of your areas of growth. Could you just give us a little bit more color on your expectations going into the fourth quarter? We're seeing you put up really good numbers on loan growth compared to your peers, but still a little bit less than your historical run rate. I know part of that's got to be just protecting asset quality, but could you give us some color there?

Well, I'll comment and let Ron comment. Actually we would have had about almost a $60 million quarter had we not had the paydowns this quarter. We had two large customers that came in, came in right at the end, and it's primarily driven -- Arkansas driven, primarily Twin Cities has been really the big leader and Ron --

Yes, sir. Yes, Barry, there's some movement in the Little Rock market with a couple banks that you know of that the signs have changed and we have had just excellent opportunity with customers that we've worked on for two and three and four years and these are seven and eight figure credits. They're 100-year-old relationships and they're now moving our way. So we have such a small share of that market that the opportunity in central Arkansas is unbelievable, with existing customers, existing projects and it's just really nice right now. All the banks in the central Arkansas area are doing really well with it and particularly Twin City Bank.

Okay. That's very helpful, and then just lastly, John, could you just comment on your potential for additional acquisitions and kind of the pricing and what you're seeing out there?

There's still a spread between in the private institution between the bidding half. We may just kind of stick our hands in the pocket for a little bit. We want to watch this credit [double]. We'd liked, as we said in the past, we'd like to pick up a little more in the Little Rock market, but we may just stick our hands in our pocket for a little bit. We have a fortress balance sheet, as you know, with a lot of equity. We have some excess equity that we haven't deployed plus the strong loan loss reserves.

I think you know we rank eighth in the nation of 445 banks in percentage of loan loss. But, I -- we're looking. We have some opportunities as you can imagine. We have lots of opportunities. They come to us and talk to us. We're just not real aggressive today. We're just kind of laying back and looking for opportunities and those may arise over the next year or two. It may be Florida. It may be Arkansas or it may be Texas. It may be somewhere else that we're looking, but there's going to be some opportunities out there and we think we're in a position, as you well know, we have a great group of shareholders. Our stock's held up pretty well in this tough, tough market. So we could use our currency, along with some cash that we have to make some transactions in the future, and we're constantly looking, but they've got to come to our terms a little better.

Okay. That's it, guys. Thanks a lot.

Thank you very much. Anthony, is there any other questions?

There are no further questions in the queue at this time.

Let me just summarize as where we think we are with our company today. We're proud to report record earnings. We are a good loan -- we talked about the good loan growth. We talked about the good strong pipeline. The growth core -- the growth in the core non-interest income, stabilizing non-interest expense, good asset quality. As we've talked about loan loss reserves, we continue to maintain those strong loan loss reserves, improve loan deposit ratio, improve net interest margin, improving ROA and improving earnings and EPS.

I think maybe most of the bad news is out right now as we speak. I think it could be out. We saw the big banks reporting today. If there is a credit bubble, they're going to have to build their loan loss reserves and that's what was reported today on some of the big banks that their earnings went down. We've been projecting that for a period of time, as we've talked about 37% of the increase to big bank earnings over the last four years coming from bleeding their loan loss reserves. We continue to build ours. We are not immune to taking a hit, but we think we've taken a conservative approach and we'll continue with that approach. We thank you for our -- for the interest in our company and we look forward to talking to you in 90 days. And, Anthony, if there's no more questions, then we'll close the conference call. Are there any more questions?

Yes, there is. There's one question from David Scharf from FTN Midwest Securities. Please state your question.

Okay, guys. Apologize for the delay there. I just wanted to follow-up on what you were touching on, Johnny. Given that your reserve -- loan loss reserve has been as strong as it has, and credit certainly has improved greatly, do you expect to sort of bleed it off a little further?

Well, we haven't bled it, as you know. We've maintained that reserve and I think it's the time, David, to err on caution. No, we don't anticipate bleeding that loan loss reserve. The drop from last year was basically because the acquisitions in bringing other banks in, but we've continued to maintain that. We don't anticipate dropping it. However, our book value is about $14.50, if we dropped our loan loss reserve to peer, we'd have about a $15 book because it would add about $0.60 or $0.70 to the book. But I think, particularly right now, David, in uncertain times, with the market repricing real estate in some markets, that we probably should continue to do just what we've done and we plan on maintaining that. If in the next couple years we see asset quality countrywide improve, then we always have the ability to bleed some of that off, but that's not our approach.

Okay. And then what's your thought process? You mentioned that you are kind of on the sideline now, the Company is generating fairly solid returns, what about increasing the dividend payout ratio or possibly instituting a buyback program?

Well, as you notice, we increase our dividend every quarter. We plan to, if our board approves it, to continue to increase our dividends, we can't do it overnight, but where we came from we increased dividends every year for 15 years straight in a row, and we hope to be able to continue to do that here. The only reason that we would look at a buyback opportunity at this point in time, I wish we'd had one in place, David, when the stock got hammered due to the subprime mortgages because we would have bought some, and had we not been on the Centennial deal, you would have seen me buying, but we were excluded from the market. But that is a consideration. We've decided that if we need to buy back some stock, as a result of some crisis in the market that gives us a great opportunity, then we could call a board meeting in 10 minutes and get authorization from our board to do that. So we have sufficient capital to do that, but thus far we've been able to grind out the increased earnings without either bleeding our loan loss reserve or buying back stock. And we always have those options, but -- and if we ever need those tools, I guess we can use those, but right now we're just grinding it out.

Okay. To reiterate Barry's thoughts that the quarter was very good. Thanks for your time.

Thank you. Thank you very much.

There are no further questions in the queue at this time.

Again, thank you very much for your consideration on the call and we'll continue to work hard and we'll talk to you in 90 days. Thank you.

Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.