Hancock Whitney Corp (HWC) 2013 Q2 法說會逐字稿

Good morning, and welcome to Hancock Holding Company's second-quarter 2013 earnings conference call. Participating in today's call are Carl Chaney, President and CEO; Mike Achary, CFO; Sam Kendricks, Chief Credit Officer; Steve Barker, Chief Accounting Officer; and Trisha Carlson, Investor Relations Manager. As a reminder, this call is being recorded. I would now like to turn the call over to Trisha Carlson. You may begin.

Thank you and good morning. During today's call, we may make forward-looking statements. We would like to remind everyone to review the Safe Harbor language that was published with yesterday's release and presentation and in the Company's most recent 10-K and 10-Q. Hancock's ability to accurately project results or predict the effects of future plans or strategy is inherently limited. We believe that the expectations reflected or implied by any forward-looking statements are based on reasonable assumptions, but actual results and performance could differ materially from those set forth in the forward-looking statements.

Hancock undertakes no obligation to update or revise any forward-looking statements, and you are cautioned not to place undue reliance on such forward-looking statements. The presentation slides included in our 8-K are also posted with the conference call webcast link on the Investor Relation's website. We will reference some of these slides in today's call.

I will new turn the call over to Carl Chaney, President and CEO.

Good morning. Thank you for joining us today. Yesterday, we reported second quarter earnings in line with the Street's expectations of $46.9 million or $0.55 per diluted share. Highlights from the quarter included approximately $245 million linked quarter net loan growth or 9% annualized and $760 million or 7% year-over-year loan growth, excluding the FDIC covered portfolio. Loan growth was solid across the Company's footprint with all markets contributing to the overall growth in the quarter. The quarter's solid performance reflected an improvement in our core results, a trend we expect to build on in the future.

As we have noted in the past, our core results are our reported results less the impact of net purchase accounting adjustments. Our reported core revenue improved for the quarter with core net interest income and net interest margin relatively stable and growth in our fee income lines of business. Our results reflect a continued improvement in overall asset quality metrics, and we initiated a 5% common stock repurchase in May.

In conjunction with the expense and efficiency initiative we announced with last quarter's results, we also previously announced the expected closure of approximately 40 branches across our footprint. Earlier this week, we announced that we have signed agreements to sell 10 of those 40 retail locations along with the loans and deposits in those branches. Three of the branches are in Alexandria, or Central Louisiana, and seven are small retail branches in Houston. These transactions continue our local commitment to the communities by keeping both jobs and business opportunities in these markets.

At this time, I will turn the call to our CFO, Mike Achary, who will review some of the quarter's results in more detail.

Thanks, Carl, and good morning, everyone. As Carl noted, net income for the second quarter was $46.9 million or $0.55 per diluted common share. That was down slightly from $48.6 million or $0.56 last quarter. The biggest driver of the decline in earnings on a linked quarter basis is related to accretion. In the first quarter, we had $7.5 million pre-tax or about $0.06 per share of excess cash recoveries in our accretion numbers. For the second quarter, we had $3.1 million pre-tax or $0.02 per share of similar accretion levels. That is about a $4.4 million negative impact to reported net interest income and a good example of the volatility inherent in our numbers, which we have talked a lot about over the last few quarters.

As Carl mentioned, we did have success in growing the Company's net loan portfolio during the quarter. Total loans at June 30 were $11.7 billion, up almost $200 million from March 31. If we back out the FDIC covered loan portfolio, which did decline $46 million during the quarter, total loans increased $245 million or about 2.2% linked quarter with 9% annualized. The largest component of net loan growth during the quarter was in the CNI period with a small increase in residential mortgage loans. Net interest income for the second quarter was $172 million, down almost $5 million linked quarter. Average earning asset levels were virtually unchanged. As mentioned, $4.4 million of the decline was related to a lower level of purchase accounting related accretion mainly related to the volatility of excess cash recoveries.

In the slide presentation on our website, we have added detailed information on the purchase accounting items in our quarterly results. The schedule on slide 11 details accretion on both the Whitney and People's First acquired portfolios, the excess cash recoveries in each quarter and finally the premium on the bond amortization related to the Whitney bond portfolio. This will help reconcile reported and core results and hopefully help everyone understand the dynamics in these numbers.

The net interest margin was 4.17% for the second quarter, down 15 basis points from 4.32% in the first quarter. The core margin of 3.38% was relatively stable during the quarter and compressed only 3 basis points while core net interest income was down slightly. We hope that with the initiatives currently in place on loan volume, pricing, and mix, we will see a tradeoff of margin for core net interest income in the near-term. This will help position us well for an eventual rise in interest rates.

Helping drive the improvement in core revenue was the additional $4 million of fee income generated in the quarter. The increase reflects some seasonality in lines of business, such as trust and insurance, but also includes healthy levels of new business. Additionally higher stock market values did help some fee-generating lines. We talked a lot about expenses last quarter and the Company's efficiency initiative. We are very focused on this initiative and have a clear line of sight to deliver the first $25 million in expense reductions by the first quarter of 2014.

In coming quarters, we will begin to discuss additional specifics of the overall plan. Meanwhile, non-interest expense for the second quarter was up $2.6 million or about 2% from last quarter. The driver of that increase was mainly related to a $2.6 million increase in ORE expense to a total of $3.4 million in the second quarter. This expense category can be somewhat volatile from period-to-period, and we expect to operate in a range somewhere between the first and second quarter levels in the near-term.

At the Gulf South Bank Conference in May, we announced plans to close about 40 branch locations across our five-state footprint as part of the expense reduction initiative. Early this week, as Carl noted, we reached agreements to sell 10 of those retail branch locations. A significant portion of the cost savings targeted for the first quarter of 2014 will be derived from the closures and resulting sales. We plan to close a majority of the branches on or about August 30, 2013 with the remaining branches scheduled to close or be sold by year-end. We expect the one-time cost associated with the branch closures and sales to be booked in the third quarter. These costs are expected to be lower than the previous guidance of between $18 million and $22 million. The branch sales will be reflected in our fourth quarter results.

And, finally, before I turn the call over to Sam, I would like to quickly remind everyone of the ASR transaction Carl mentioned earlier. The ASR, or accelerated share repurchase, was initiated on May 9 with Morgan Stanley. We received 2.8 million shares or 70% of the amount projected to be repurchased based on the Company's stock prices at that time. As of today, we expect to receive about 1 million additional shares associated with this transaction. We will receive these shares no earlier than November and no later than next May. At that point, we'll be able to determine the average repurchase price.

I will now turn the call over to Sam Kendricks, our Chief Credit Officer.

Thank you, Mike. As Carl mentioned earlier, we're seeing continued improvement in our asset quality metrics. Non-performing assets total $216 million at June 30. That's down $13 million from March 31. The non-performing asset ratio was 184 basis points June 30, compared to 198 basis points last quarter. The decrease in overall NPAs reflects our continued success in selling ORE properties during the quarter with a net reduction of $7 million. The reduction in non-performing loans of $5 million was mainly related to payoffs and paydowns in the NPL categories.

The level of ORE may be volatile in the near-term as problem credits from the People's First covered portfolio work their way through the foreclosure process. Additionally, we will see an increase as the branched closed in connection with the efficiency initiative move into surplus bank property. Net chargeoffs from the non-covered loan portfolio were $7 million. That's 24 basis points of average loans in this quarter. That is up slightly from $6.6 million or 23 basis points in the first quarter. During the second quarter, we recorded a total provision for loan losses of $8.3 million. That's down from $9.6 million in the first quarter. The provision for non-covered loans was $7.9 million, and that compares to $3 million in the first quarter of 2013. The increase was mainly related to the increased volume of new loans originated during the second quarter.

During the second quarter, the net provision from the covered portfolio was $400,000, and that compares to $6.6 million in the first quarter. As a reminder, the first quarter provision for covered loans included approximately $6.5 million of impairment related to changes in the estimated timing of cash flows, which does not have an offsetting impact on the loss share receivable. The alliance for loan losses was $138 million at the end of the second quarter, and that is virtually unchanged from March 31. The ratio of the allowance to period-end loans was 118 basis points down slightly from 120 basis points at March 31.

The allowance maintained on the originated portion of the portfolio totals $76.4 million or 93 basis points of related loans at June 30, up from $75.5 million or 102 basis points at the end of the first quarter. Finally, as noted on slide 7, we have seen a reduction of over $600 million in criticized loans excluding the FDIC covered portfolio over the past two years. Our staff has worked very hard to either move these credits off the balance sheet or rehab and upgrade them to performing credits, and we will continue our efforts to work through the problem credits that remain in our portfolio today.

I will new turn the call back over to Carl.

Thanks, Sam. As you can see, we had a very solid quarter, and our underlying trends and fundamentals are positive, such as -- loan growth in the high single-digits annualized level, improved asset quality, improvements in feed generation, goals are in place for expense cuts and for becoming a more efficient organization, strategic deployment of excess capital for the current buyback program and continuing to build on that strong capitol to allow us to take advantage of future strategic opportunities, including additional buybacks, organic growth, dividends, or acquisitions. We are better positioned to succeed in today's economic environment and thrive when there is eventual, sustained, positive turn in the overall economy. We will now open the call for questions.

Thank you.

(Operator Instructions)

Michael Rose, Raymond James.

I wanted to get your thoughts outside of the share repurchase program, what you would view as the order of priority or magnitude for capital employment opportunities.

Outside of the buyback, of course, we want to make sure we maintain sufficient capital for the growth in our earning assets that we see coming in the future quarters, as we did this quarter. And then, of course, you know, we think there will be some strategic opportunities for acquisitions as well. And then we're always looking at our dividend payout ratio and when those -- when changes are warranted in the payout, then we'll certainly entertain those as well.

And then, Carl, certainly once this repurchase is complete, the door is certainly open to considering an additional repurchase.

Yes, that makes sense.

Sure.

Okay, that is helpful. Secondarily on the -- once you achieve the cost saved, where are you taking those savings and redeploying the savings into revenue production? Are you trying to hire more teams in select markets? Are you trying to build out certain lines of business, any color there will be helpful. Thanks.

Yes, Michael, this is Mike. Certainly those are things that we will be doing as we go through this initiative, that is, redeploying those resources into certainly revenue-based lines as well as other investments throughout the Company's footprint. This is about making the Company more efficient, but it's also about improving our opportunities to generate revenue.

Okay, thanks.

Kevin Fitzsimmons, Sandler O'Neill.

The loan growth in C&I seemed like it was definitely a strength this quarter. I was wondering if you could dig in a little further to that. What markets you were seeing strength and whether you think that kind of growth is something that would continue or was something unusual about this quarter that caused it to jump? Thanks.

Kevin, the loan growth was spread across the footprint, which is a good thing from our perspective. And, as far as being able to look out, we don't think -- it certainly was not tied to any unusual activity that took place during the quarter. When we look at the pipeline, we see a very strong pipeline. And so we feel very confident in our ability to continue to post strong loan growth for the foreseeable future in the quarters coming.

Kevin, this is Mike. Just to reiterate Carl's point, the growth was pretty sustained across the footprint. I think that is one of the big positives. If we look at, again, where that growth came from, probably was a little bit more weighted toward the west side of the franchise -- that would be southeast Louisiana, of course, into Texas. But we're very pleased with the growth that we experienced also in Florida, Alabama, and even decent production levels in Mississippi. It was pretty broad based.

Okay. Great. Thank you. That is helpful. And maybe if you could just touch on -- I think you alluded to it in your comments, but generally how you would characterize your impact to rising rates, both what we have seen recently with the rise in short-term rates -- or long-term rates, rather, but then longer term when we see a pickup in short-term rates. Thanks.

Sure. Absolutely. And again, as you know, we're asset sensitive in a pretty significant way. Rising rates will certainly benefit our Company going forward, especially when you consider the deposit mix that we have. The high level of non-interest bearing deposits, which are not worth a whole lot right now in this environment but take on, obviously, added value as rates began to rise. So, that is something that obviously we're looking forward to.

How about just with -- in the near-term, with what has happened with the tenure. Any -- does it at least alleviate a little bit the reinvestment situation that we had before a couple of quarters ago?

Yes, it certainly helps. Any time the yield curve steepens, that is a good thing, a good thing for banking. That is something we believe we'll be able to take advantage of, assuming that continues into the future. On a very short-term basis, it hasn't had a whole lot of impact yet, but we believe that is yet to come.

Okay. Thank you very much.

Matthew Clark, Credit Suisse.

Just as a follow-up to that last question. I think new production, you guys were putting on an average 3% to 3.4%. I think your core yield is 423. Any -- doesn't sound like there's much of a change there on pricing, or has there been?

A little bit of a change. Yes, we talked about last quarter the new production came on at about 335. This quarter, it was probably in the 320 to 325 range. So, that compressed just a little bit. Again, that was due more than anything else to the weighting of -- the way the growth came on the balance sheet, that is mostly in the C&I portfolio. Again, going forward, like we have talked about so many times, we have initiatives in place that will hopefully help us deliver a little bit fuller mix of loans going forward. By that we mean more investor real estate and other forms of real estate that will give us a little bit fuller yield.

Okay. What portion of the C&I came from [snicks] in the growth?

We had an increase in snicks of about $130 million or so from last quarter.

Okay. And then lastly, with the branch sales, I guess a two-part question. You have 10 locked up, ready to go, and sounds like you have $55 million, $60 million of loans and deposits going with that. Any sense for the other 30? How much -- I am just trying to get a sense for what you need to overcome to still grow here with what might be sold in the other 30?

At this point, Matt, we have no impending announcements related to the other 30, and there is nothing that we're at this point in time working on. But we're still going through the marketing effort, and it still certainly is possible that we could have some success in selling some of the other branches that are scheduled for closure.

Okay. And then just with this, I think you -- you're fine tuning the business model and the strategy and approach in each of your markets. Can you give us a sense, as you fine tune, commercial versus retail or both, how that's going so far and maybe what kind of underlying attrition you're assuming?

We have had great success in redeploying. One of the earlier questions was about how are we going to redeploy these expense savings. It really comes down to fine tuning these markets, particularly those markets where we don't have a significant market share at the time, but they're large markets that are growing. Houston is a perfect example. Tampa is a good example, Jacksonville is a good example, where we have a reasonable presence but not an enormous market share like we do in New Orleans or south Louisiana, Baton Rouge, or the Gulf Coast.

Those markets would have a small market share. It allows us to really redeploy the expense base that previously was attributable to the retail branch network that we inherited or acquired and redeploy that into a very specific commercial focused effort, which, obviously, we have been very successful in the past. And, again as you can see, in this quarter, and we feel very comfortable with the pipeline being able to continue to generate that strong C&I growth.

Thank you.

Emlen Harmon, Jefferies.

The core margin down 3 basis points quarter over quarter, below your kind of guided decline of 5 to 10 basis points, can you give us a sense of where that's -- what the underlying trends that are helping that out are? And do you feel like, if loan growth continues at the current pace and with the rise in rates, you would be in the lower end of that compression guidance over the next few quarters here?

Yes. Hi, Emlen, it's Mike. Related to the quarter, obviously we were helped out by the change in earning asset mix, the deployment of that excess liquidity that we effected toward the end of last quarter. We were able to push our cost-of-funds down 3 basis points. And then, finally, the loan growth certainly was a big help. Although, I will point out that the vast majority of that loan growth did occur, really, in the second half of the quarter, so we'll see a little bit fuller impact on the margin this quarter related to that quarter's late loan growth. Certainly going forward we believe that we'll be able to continue to show these kinds of levels of loan growth.

So, with that all said, the guidance that we gave last quarter, around 5 to 10 basis points of NIM compression on a near-term basis, really still holds true. We were down 3 basis points this quarter, and we still have, obviously, some downward pressure on our NIM. Once we get to the sustained levels of loan growth and have a fuller mix of loan growth, we think those pressures will lessen. That make sense?

That does make sense. That's helpful. Thank you. Then the excess cash recovery in the quarter -- you guys have given us some pretty good guidance on when you expect some purchase accretion in kind of '13, '14, and '15. How much excess cash recovery is assumed in those estimates that you laid out in the slide deck?

Really none. Really none. Again, that speaks to the volatility of that particular line item. And really, how unpredictable it is. So what that means is to the extent that we get a good deal of these excess cash recoveries, then those bars on slide 12 will move to the left in terms of the accretion.

And it also reflects our conservative approach to this. It is very difficult to forecast that. So we just assume zero, but when you look at previous quarters and look at the amount that's come in, it has been significant at times. Because there is absolutely no way to be able to forecast that, we take the conservative approach, any type of forecasting assumes zero. I know that is not realistic, but there is no way to beat any type of specificity around that forecasted amount.

Got it. And then just last one for me, on the expense stage, you guys are obviously maintaining your efficiency planned guidance for by the time we get to 2014, but it seems like some of those [stages] may be a little slower in developing in '13. Could you give us kind of the background there?

I think as we said in the call a little bit earlier, we have a pretty defined pathway to get to the achievement of those goals. There really wasn't an expectation that we would show a lot of progress this past quarter. I think you will see some progress in the coming quarter and certainly more by the time we get to the fourth quarter again, as we effect these branch closures. Then our guidance and, we're re-emphasizing this, this morning is that, you know, we'll hit those targets for the first quarter of '14.

The branch closures are expected to occur by August 30, so, you know, we feel very confident in our ability to hit our goals that we have laid out.

Okay. Thanks for taking the questions.

Peyton Green, Sterne Agee.

Thank you. Good morning. Carl, Mike, I was wondering if you could comment a little bit on the loan pipeline as to the volume and maybe how it compared to year-end and the quarter ago and also, what the mix looked like. Have you seen any initial signs of mix change that might be more encouraging for a broadening out of the mix?

Hey, Peyton, this is Sam. We're very encouraged by the pipeline. We're seeing -- as opposed to some quarters, where there might be a concentration relative to the components of growth, we're seeing more broad based opportunities there. And, we're obviously encouraged by the fact that, throughout the enterprise east to west, that we're seeing growth opportunities. So, I would characterize it as more broad based than concentrated. We have some opportunities in C&I and CRE.

You will have noticed that, over the last six to eight quarters, we have continued to manage down our CRE concentrations. But we have, we think, managed down in the categories that we wanted to manage down in, and we have some opportunities for growth. So, we think we will likely see some growth in some of the CRE categories, particularly in commitments that have already made it on the books as those fundings come on line. We think it's going to be broad based, and we're pretty encouraged by the pipeline momentum we have.

Okay. Then volume wise, I mean how -- what kind of order of magnitude?

I think what we saw this quarter -- this past quarter, I think, is reasonable. We don't see significant dropoffs from those levels at all. We look, Peyton, at the pipeline -- it's pretty strong. And so, as I mentioned -- or as I responded to an earlier question, there really was nothing unusual that was driving the strong loan growth this quarter. We expect that to continue, that trend.

If you have that kind of volume in the third quarter, Mike, what is the willingness to let earning assets actually grow dollar for dollar? Or is it still -- there's -- I guess, maybe where would you like the securities portfolio to be in a perfect world? How much smaller from the current level?

In a perfect world, I mean, we're very comfortable with letting the level that bond portfolio continue to trek down and let that be the primary source for funding loan growth. So, I think on a very short-term basis, I think what you will see is probably more of the same in terms of balance sheet management. You can see not much of an increase in average earning assets. But, again, a -- hopefully, a pretty significant change in that mix.

Okay.

More loans, less bonds.

Okay, great. And then, with regard to the branch closures and the process improvement that is going on, how much of the branches -- I mean, how much -- closing 40 branches, is it a pro rata move on occupancy, or are these lower-cost branches, or higher-cost? What -- in terms of going through the line items, as we recognize these things, is there any disproportionate weighted to personnel versus occupancy versus other?

No, not really. As far as the impact on our income statement related to closing the facilities, you know, it is -- will go a long way to helping us achieve that first set of goals. So without doing the math there, you can see that it has a significant impact. I wouldn't say the branches that we're closing necessarily are the ones that have the higher cost, although that probably is the case in some selected branches. It more is what we talked about last quarter. And that is our desire to be efficient as possible in terms of delivering our products and services to customers and doing that in a matter that makes sense for the Company.

Okay. Great. Thank you very much for taking my questions.

Christopher Marinac, FIG Partners.

Mike and Carl, if we look at the disclosures the last several quarters on originated loans versus acquired loans, and add those two together and compare with where you were two years ago, right after the closing of the merger, it looks like you are ahead 6%, 7% from the time you closed. Is that a fair way of kind of judging if we step back and look at the integration of the two banks two years later? And is that something that should continue to expand as time passes?

Again, when you look at those various columns, the acquired loan portfolios are going to go down simply because of maturities, loans moving off the balance sheet, and other things that are going on. So, I don't know that it's a perfect way of looking at or judging the integration. I think the integration and success really is better judged on the things that we're doing now to grow our balance sheet and grow our customer base. Again, with the loan growth we achieved this quarter and the prospects of the future, I think that, certainly, the results are evident.

Okay. Very well. And then, a separate followup is, if you were to find an acquisition, do the efficiency improvements that you're doing, does any of that impact the back office or that there's sort of any integration of an acquisition, even if it's small, sort of be separate from the efficiency movements beyond the branch sales?

Yes, I think the things that we have done, the things that we will do as we go through the rest of this exercise, put us in a position to be that much more efficient from a back office point of view, such that if we are able to take advantage of future acquisition opportunities, those efficiencies will already be in place.

Yes. This is Carl. The efficiency initiatives, they certainly won't have any negative impact in our ability to be able to do future acquisitions and fold those in. And in fact it actually allows us to be even more efficient in the assimilation and integration of any future acquisition.

Very good. Thanks, guys.

Jennifer Demba, SunTrust Robinson.

Just a question on the Texas branches you are selling. Just curious how many branches that leaves you with in Texas. I know it's more of a commercial banking focus there, but just curious what that leaves you with in terms of a small retail presence, if any.

We had a total of 16, Jennifer, in Texas, and we have slated 8 of those 16 for closure. And, of course, we're selling 7 of the 8.

And those were very -- the seven that we're selling are very small, retail-focused branches. That allows us to reposition the remaining branches and even look at growth of additional facilities that are very much specifically focused on commercial opportunities, as opposed to (technical difficulties) retail. (technical difficulties) what we inherited.

Jennifer, let me correct that number. We had a total of 14 in Houston, not 16.

Okay. Another question on the energy portfolio, just curious as to what the size of that is now, and what you feel like the potential is for growth there?

Jennifer, this is Sam. Our energy portfolio at the -- for second quarter is just over $1 billion. When we say energy, that is across several segments of the energy spectrum, not just reserved base lending but also includes support industries that are very important to that segment of the economy. That includes industry and businesses throughout south Louisiana and into Texas as well. I think that is on slide 4 of the deck as well as the presentation on that. In terms of potential, there are continuing potential opportunities there. The oil and gas industry continues to show some strength, and so we obviously want to continue to participate in that important segment of the economy for this part of the country. But it is not the singular source of loan growth in our portfolio strategically. It is part of the balance that we will be seeking. But we do see additional opportunities in that segment.

Thank you.

Matthew Clark, Credit Suisse.

Hey, just a couple of followups. On the cost savings did you quantify how much you extracted this quarter? I know it was not a lot, but curious what the number was.

No, we did not, Matt. We did not quantify that number.

Okay. And on M&A, I think in the past you expressed interest in wanting to have a larger presence in Houston and I think Tampa to Jacksonville. Are you guys willing to consider opportunities outside those markets on the M&A front?

If you look at the five states that we operate in, those are very attractive markets for us. We would certainly look at opportunities within those five states. When you look at some of the markets in which we have a presence in, there are some real opportunities for future growth, and these markets that I am referring to have great growth prospects economically. I think there is plenty of room in our existing footprint by state for us to have some significant growth opportunities through acquisition when the right deals present themselves.

Okay. Thanks.

Matt Olney, Stephens.

I want to circle back on the core net interest income, kind of exit PAA that you have on slide 12. It was down sequentially again in the second quarter. But the level of decrease seems to be slowing down quite a bit, I think it was just down $700,000 this quarter. Is it fair to say that core NII could hit the inflection point in 3Q, or could we still be a few quarters away from that inflection point?

Yes, Matt, I would tell you that the inflection point is maybe a quarter or two away, for the reasons we talked about a little bit earlier. A lot of the loan growth we experienced this quarter, again, was back ended. And a lot of the core of margin improvement was certainly related to our ability to deploy some of those excess liquidity we had from earlier in the year. So the momentum related to continuing loan growth, and then getting a fuller mix of loan growth, will be the things that will really help with us that inflection.

Thanks, Mike.

Thank you. That concludes the Q&A portion of our call. I would like to turn the conference back to Mr. Carl Chaney for closing remarks.

Okay. Thank you again for joining us. As you see, we are pleased at the strong quarter we were able to post, and we're confident about the next couple of quarters as far as what we see in our pipeline. So, again, we thank you for participating in today's call.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may all disconnect at this time.