KeyCorp (KEY) 2009 Q2 法說會逐字稿

Good morning and welcome to KeyCorp's second quarter 2009 earnings results conference call.

This call is being recorded.

At this time I would like to turn the call over to the Chairman and Chief Executive Officer, Mr.

Henry Meyer.

Mr.

Meyer, please go ahead.

Thank you, operator.

Good morning and welcome to KeyCorp's second quarter 2009 earnings conference call.

Joining me for today's presentation is our CFO, Jeff Weeden, and also available for the Q&A portion of our call are: our Vice Chairs, Beth Mooney and Peter Hancock, Chief Risk Officer, Chuck Hyle, and our Treasurer, Joe Vayda.

Slide two is our forward-looking disclosure statement, it covers presentation materials and comments as well as the question-and-answer segment of our call today.

Now if you'd turn to slide three.

Today we announced a net loss from continuing operations of $236 million or $0.69 per common share.

These results reflect an extremely weak operating environment and continuation of the credit cycle.

Jeff will comment more on the earnings in a minute, but before he does, I want to make a few comments about the measures we are taking here at Key to address this challenging environment, which we believe will then put Key in a position to compete and win with our clients and for our shareholders.

First, we have raised over $1.8 billion of Tier 1 common equity to address the SCAP requirement.

We believe Key has always maintained a strong capital position and with these most recent actions along with the update we provided in today's earnings release with respect to the pending exchange of new common shares for our existing retail capital securities, we will further fortify this position.

At June 30, 2009, our Tier 1 common equity ratio was a strong 7.27% and our Tier 1 risk-based capital ratio was 12.42%.

In light of the prevailing weak economic environment, we have continued to build our reserve for loan losses.

For the second quarter, our provision exceeded our net charge-offs by $311 million.

In addition, we continued to work down the exit loan portfolio balances.

The combination of building reserve balances and a smaller loan portfolio resulted in a reserve for loan loss coverage ratio of 3.53% at June 30, 2009.

We have also continued to strengthen our funding and liquidity positions which have benefited from deposit growth in both our community banking and national banking organizations.

In our community bank, average deposit balances were up $2.7 billion or 5.5% compared to the year-ago period and in our national banking group, average deposit balances increased $1 billion or 7.9% compared to the second quarter of last year.

Focusing on our client relationship business model and maintaining our expense discipline to deliver value have remained our top strategic priorities.

We continue to look for ways to serve our clients better by streamlining our operations to eliminate lower valued activities and capitalize on investments we've made to improve the client experience.

As we discussed previously, we have a corporate-wide initiative called Keyvolution underway that is designed to simplify processes and improve both client service and speed to market.

Over the past 15 months, we have been reviewing our business mix and evaluating our processes throughout the company.

As a result, we have eliminated certain business activities and installed new technology to improve the client experience.

We have also reduced employee head count by approximately 8% or 1,500 positions.

As highlighted in our earnings release, in the second quarter, we entered into extensions of credit with clients representing approximately $8.2 billion in new or renewed loans and commitments.

Now if you'd turn to slide four.

Slide four provides a summary of the company's previously announced second quarter 2009 capital initiatives.

We believe this additional capital, along with the current offer to exchange common stock for up to $500 million of our outstanding retail capital securities, which we expect to complete on August 4th, will provide us with even greater flexibility to benefit from new business opportunities over the next several years.

Slide five shows our progress through June 30, 2009, and the future expectation with respect to Keyvolution over the next two and a half years for process improvements here at Key.

Initiatives that have already been implemented will result in an annualized cost savings run rate of $63 million with an additional $72 million in flight.

There are approximately $58 million in one-time costs and investments including severance associated with these savings opportunities.

We've also identified additional targeted benefits with Keyvolution of $165 million to $240 million, which along with our implemented or in-flight initiatives, will produce total annualized run rate cost savings of $300 million to $375 million with a significant portion captured over the next two years and the full run rate to be achieved in 2012.

Actions taken this year include reducing and realigning our sales force and management infrastructure in community banking and national banking.

We have rebalanced relationship manager client loads and refocused RMs towards client segments that offer the greatest risk adjusted earnings potential.

We are also realigning our sales service roles so Key is better positioned to attract new clients and serve existing relationships.

In addition, we optimized our virtual call center operations and moved resources to our Cleveland and Buffalo operations centers.

This allowed us to capture additional scale benefits and improve client service and response times.

Combined, these two initiatives will contribute over $40 million on an annualized basis to the reduction of costs that I mentioned earlier.

We believe that Keyvolution will benefit our clients and our shareholders by streamlining our processes to improve responsiveness and efficiency.

Now I'll turn the call over to Jeff Weeden for a review of our financial results.

Jeff.

Thank you, Henry.

Slide six provides a summary of the company's second quarter 2009 results.

As Henry mentioned, we incurred a net loss of $0.69 per common share for the quarter.

Earnings per common share were impacted by elevated credit costs, including building the reserve for loan losses by $311 million or $0.34 per common share.

The deemed dividend of $114 million or $0.20 per common share on the exchange of common shares for [367 million] of our outstanding Series A preferred shares.

The FDIC special assessment of $44 million or $0.05 per common share, security gains of $125 million or $0.13 per common share and gains related to the exchange of common shares for certain institutional capital securities in the amount of $95 million or $0.10 per common share.

We have included a more extensive list of the items impacting our second quarter results on page three of today's earnings release.

Turning to slide seven, for the second quarter of 2009, the company's tax equivalent net interest income adjusted for early terminations of certain leverage lease financing arrangements was $614 million compared with $620 million in the previous quarter.

The adjusted net interest margin was 2.74% for the second quarter, down three basis points from the first quarter of 2009.

The company continues to benefit from improved pricing for new and renewed loans, however sequential quarterly change is somewhat muted, given the size of the existing loan portfolio and the negative impact of carrying higher levels of nonperforming loans.

Also keeping pressure on the margin in the second quarter were higher average balances of short-term investments.

In May, 2009, we repositioned part of our investment portfolio by selling $2.8 million of our available for sale portfolio.

The proceeds from this sale were reinvested in new issue CMOs backed by Fannie Mae, Freddie Mac or Ginnie Mae.

These replacement security purchases did not settle until the end of June, which resulted in higher average balances in lower yielding short-term investments for the quarter.

With the redeployment of these short-term investments, along with investing additional sums from the positive deposit flows we have been experiencing and deposit pricing moderating some in our markets, we expect to experience an improvement in the net interest margin in the second half of the year.

Turning to slide eight, the loan categories on this slide have been adjusted for the exit portfolio shown.

For example, the marine RB floor plan loans on this slide have been removed from the commercial, financial and agricultural loans, the CF&A totals, for all periods and are reflected in the exit portfolio details.

During the second quarter, the company experienced a $2.9 billion decrease in average total loan balances compared to the first quarter of 2009 and a $4.3 billion or 5.6% decline compared to the second quarter of 2008.

The decline in average balances reflects the soft demand for credit on the part of commercial customers due to the weak economic conditions, paydowns on the exit portfolio and elevated net charge-offs.

In our community banking operations, the home equity portfolio remained relatively unchanged from the first quarter level and was up 5.4% compared to the second quarter of 2008.

Turning to slide nine, average deposits increased $2.8 billion or 17.3% annualized from the first quarter.

Average deposits are up $5.9 billion or 9.7% from the same period one year ago.

Deposit flows have remained very strong for both community banking and national banking.

This, along with soft loan demand, has significantly improved the loan to deposit ratio over the last two quarters.

Given the low rate environment and the safety offered by FDIC insured demand deposit accounts, businesses have significantly increased their deposits over the past two quarters.

Compared to the second quarter of 2008, demand deposit accounts are up $2.0 billion or 18.4%.

These higher balances in commercial demand deposit accounts also offset transaction service charges in annualized deposit accounts.

Slide 10 shows a number of asset quality measures and the trends that we have experienced over the past five quarters.

Net charge-offs in the second quarter were $539 million or 2.99% of average total loans which was up from $492 million or 2.65% experienced in the first quarter of 2009.

The increase was largely due to continued weakness in the commercial real estate mortgage and construction portfolios.

We also experienced an increase in nonperforming loans and nonperforming assets in the current quarter.

Nonperforming assets were up $554 million and nonperforming loans were up $450 million in the second quarter when compared to the first quarter of 2009.

The increases are primarily due to the CF&A and commercial real estate portfolios.

As of June 30, 2009, nonperforming assets represented 3.58% of total loans, other real estate owned and other nonperforming assets.

As we discussed earlier, we continued to build reserves during the second quarter.

At June 30, 2009, our reserve balance stood at approximately $2.5 billion and represented 3.53% of total loans and 114% of nonperforming loans.

In the last year, reserve balances for loan losses has been increased by approximately $1.1 billion.

Slide 11 provides a breakdown of our credit statistics by portfolio for the second quarter.

This slide provides additional information with respect to our various portfolios by classification type.

Net charge-offs in our CF&A portfolio remained elevated during the second quarter at 2.75% of average balances.

However, they are down $64 million from the first quarter of 2009.

As we discussed in our first quarter earnings call, CF&A net charge-offs were significantly impacted in the first quarter by commercial real estate related credits in our real estate capital division and certain net charge-offs in the institutional bank related to technology clients.

Both of these areas experienced improvement in net charge-offs in the second quarter.

All other major loan categories experienced an increase in net charge-offs in the second quarter compared to the first quarter of 2009, except the marine exit portfolio which experienced a seasonal improvement.

We also continue to see increases in nonperforming loans across all major asset categories and business lines in the second quarter.

This should result in net charge-offs remaining elevated for the next several quarters.

We have included in the appendix section of our materials additional information with respect to our commercial portfolios by line of business and a breakdown of the residential property segment and the retail property segment within the commercial real estate portfolio.

In addition, we have provided additional detail on our home equity portfolio as of June 30, 2009.

Slide 12 provides an updated view of our commercial real estate portfolio at June 30, 2009, by property type and by geographic location.

As mentioned on the previous slide, we have additional details included in the appendix on the retail and residential property segments of this portfolio.

Overall we continued to see an increase in nonperforming loans and 90 day plus past due loans in this portfolio when compared to the first quarter of 2009 levels.

However, 30 to 89 day past due loans showed some improvement during the second quarter compared to March 31, 2009.

Slide 13 is an update on the activity during the past quarter within the exit portfolios.

Progress continued at a relatively modest pace due to the limited refinancing opportunities in these areas for businesses and consumers.

These portfolios which totaled $8.5 billion at the end of the second quarter represented 11.8% of total loans and loans held for sale, 28.9% of second quarter net charge-offs and 21.9% of total nonperforming assets.

And finally, turning to our capital ratios on slide 14, with the capital initiatives completed during the second quarter and the reduction in the risk weighted assets we have experienced, our capital levels have increased significantly from the first quarter of this year.

At June 30, 2009, our tangible common equity to tangible asset ratio was 7.35%.

Our Tier 1 common equity ratio was 7.27%, and our Tier 1 risk-based capital ratio was 12.42%.

Based on the approximately $534 million of early tenders we have received with respect to the exchange offer for the retail capital securities for common stock of Key, management has made the determination to limit the total aggregate liquidation preference of the securities the company will accept to $500 million.

Assuming this exchange is completed at this level on a pro forma basis, the exchange will add approximately 50 basis points to our Tier 1 equity ratio.

That concludes our remarks, and now I'll turn the call back to the operator to provide instructions for the Q&A segment of our call.

Operator.

Thank you.

A brief reminder, the question-and-answer session will be conducted electronically today.

(Operator Instructions) We'll pause just a moment to allow everyone a chance to queue up.

(Operator Instructions) All right.

and we'll take our first question from Craig Siegenthaler with Credit Suisse.

Thanks and good morning.

Good morning.

First, we just want to see if you could provide some of your prospects for the net interest margin over the next few quarters, especially in light of probably some weaker competition on the deposit and CD side from some of your regional peers.

This is Jeff Weeden.

We don't provide specific guidance with respect to the margin, but we will provide and we did provide guidance with respect to the direction.

We believe that the margin will improve based upon, again, things that we said earlier.

We are receiving better spreads on our loans and we are seeing competition for deposits moderate and also the redeployment of our short-term investments into longer-term investments will also have a positive impact on the margin.

Got it.

And then maybe secondly, looks like your CRE or commercial real estate charge-offs, which really didn't pick up last quarter picked up this quarter.

I'm wondering if you could discuss some of the drivers behind that?

Maybe was it kind of a one off large charge or is this part of the national seasoning of the CRE loss curves?

This is Chuck Hyle.

I think it's really more of the latter.

Clearly the fundamentals in real estate haven't changed or improved very much.

And so timing of the charge-offs, I think, is not necessarily quarter by quarter.

I would say that the rate of migration in the CRE portfolio, which was not good in January, February, March and into April, has shown some deceleration, particularly in the second half of this particular quarter.

So we're seeing a little bit of better news there.

But I think it's very fair to say that fundamentals in the business are still not very good and show no particular signs of improving.

Great.

Thanks for taking my questions.

And next we'll go to Gerard Cassidy with RBC Capital Markets.

Thank you.

Good morning.

You mentioned that the retail trough, you're going to limit it to about $500 million, I think you said, and it's going to obviously increase the Tier 1 common equity ratio up by about 50 basis points.

What would the pro forma book value be if it was completed by the end of the second quarter when you convert those troughs into common equity?

Gerard, this is Jeff Weeden.

Well, it obviously depends on the price of the exchange and the number of shares --

Right.

-- that are issued, so we're still in that pricing period.

So -- but if we assume that, similar to yesterday's levels going on out, it would have an impact on the tangible, I'll refer to the tangible book value per share would be in the $8.60 range.

Thank you.

And then regarding credit quality, you're one of the few banks that gives us the in-flow of nonaccrual loans from the accrual category, and I noticed this quarter there seem to be less of an increase in that line.

Can you give us any color on what you saw?

And maybe it was alluding to Chuck's comment about the migration slow down in commercial real estate, but if you look at the migration, if you would, of the new nonaccrual loans in Q2 versus Q1, it was much lower than what Q1 was to the fourth quarter of last year.

Yes, Gerard, this is Chuck.

I think you're right in picking up on that comment.

I would say, also, that the residential side, because we've brought that portfolio down, I think we peaked almost three years ago at something like $5.2 billion, somewhere in that range and we're down to about $1.6 billion, so we've brought that portfolio down pretty dramatically, and clearly that is the portfolio with the biggest issues and the highest loss content.

So as that gets down to a smaller number, I think that is certainly a trend that would influence your earlier comment.

So I think that's probably the best way to frame it.

Okay.

And then finally, I know you guys have the exit loan portfolio, which is going to be constantly worked down.

Do you have any sense of when you think you could actually see net growth in the loan portfolio, total consolidated loan portfolio?

Well, consolidated loan portfolio growth is also going to be dependent upon the recovery of the US economy.

So we have these particular exit portfolios, as you referred to, that are a negative vector, but also I think what we're seeing here too, our customers are continuing to deleverage on their own, and so we've had the positive deposit flows, and loan demand remains very, very soft.

We're in the business of making loans, Gerard, as you know, and -- but it does take the demand on the other side, too.

Thank you.

We'll go next to Terry McEvoy with Oppenheimer.

Thanks for taking my call.

Good morning.

Good morning.

Looking at the $87 million of commercial real estate charge-offs, could you break out the residential properties and the retail segment from page 27 and 28, just to get a sense for how much those two buckets contributed to CRE charge-offs?

I don't think we have that right off the top of our -- of our head right now, unless you have it, Chuck.

I don't have it in front of me, no.

Okay.

And then you mentioned the sequential improvement in C&I charge-offs and some of the items in the first quarter that made that number higher.

If you exclude those two items, the technology credits and some of the CRE related credits, what was the car apples to apples comparison in C&I charge-offs?

Did that actually go up?

We saw in the portfolios, I think if you look at -- probably the best place to look, again, is going to be in the appendix section at the slide that has the commercial portfolios on it.

I'm flipping to that.

It's slide 26.

If you look at that, in the first quarter, within the institutional bank, there are approximately about $35 million of the $44 million that were really related to two credits, so if you look at it from that perspective, the [$12 million] is more of a normal type of a range excluding that particular bump up that we had.

And with respect to what was in the commercial real estate, so if you look at that particular group, the $108 million of net charge-offs that was in that commercial book in the first quarter that's listed there, that's primarily related all to commercial real estate related clients within that particular division, they just happen to be not secured "by real estate." So that's a large piece of it.

And then if you look at the other particular areas, you'll see just normal migration within regional banking which is going to include your business banking clients, and commercial banking, while it's up in the second quarter, is still at a very modest level and it was coming off of a very low level in the first quarter.

So the rest of the portfolios, equipment finance showed some improvement in that C&I book and within the consumer finance, it's primarily dealer floor plan.

Dealer floor plan losses and charge-offs still remain elevated, but they're down slightly from the first quarter levels.

And just one last question on your outlook for charge-offs, you said they'll remain elevated given the increase in Q2 in nonperforming assets.

Would you characterize the $535 million of charge-offs this quarter as elevated or is that extremely elevated?

And just trying to get a sense for the second half of this year.

I think we would refer to the level that we've experienced, if you look at the first quarter and the second quarter of this year as being an elevated level, and that we would expect charge-offs to remain at an elevated level for the next two quarters.

Okay.

Thanks for your time.

Appreciate it.

We'll move next to [Maklovia] Pena, Morning Star Equity Research.

Your line is open, please go ahead.

[Maklovia], you may have your line muted.

I am awfully sorry.

Thanks for taking my call.

Looking at your recurring loans past due 90 days or more, they increased by $153 million or so and past due 30 to 89 decreased by nearly twice that amount, which leads me to think that there was actually some improvement in that segment.

And I'm wondering if that improvement was a -- fairly spread out throughout the quarter or if you saw like a more pronounced in one of the two ends of the quarter?

Yes, this is Chuck Hyle.

It's hard to know, to pinpoint it in the quarter, but as I said earlier, I think the general tone of migration improved in the second half of the quarter.

I would say in the 90 day plus bucket, most of the increase was in commercial real estate and a goodly portion of that was in the income property subset.

We are seeing some delinquency and some payment issues in multi-family, largely in western and southern states, high correlation to the difficulties in the residential portfolio, but having said that, I -- our general view is that while lease up is slower in some of these markets, loss content over time will not be nearly as problematic as the residential side.

But we are certainly seeing some increase in delinquencies in that particular sector.

Most of the rest of the categories have been relatively good and certainly we are seeing in the early stage delinquency side across almost all parts of our business some modest improvement.

Okay.

Thank you.

(Operator Instructions) We'll go next to Jeff Davis with FTN Equity Capital.

Hi.

Good morning.

So, Chuck, just following on your comments and we saw the similar trends with early stage delinquencies improving, largely across all portfolios, but maybe not everyone at SunTrust and a couple of other reporters thus far.

If you had to handicap it, are we in the sixth, seventh inning of this credit cycle or is it just unknown?

Jeff, I'm not very good on the baseball analogies.

It's really hard to figure these things out.

I think that we have seen, as I said earlier, a modest level of improvement, whether we're approaching an inflection point is I think anybody's guess.

We take a pretty conservative view on that.

As I said, fundamentals are still not very strong.

I think another point of sort of modest positive would be we are seeing a little bit more liquidity in selling assets.

The first quarter was abysmal, I think for everybody, the second quarter, again, in line with earlier comments started slow, but it's starting to pick up a bit and it's pretty much improving, I think, more on the commercial, and anything that has either current cash flow or the prospect of cash flow is beginning to attract some attention.

So I think we sold $12 million worth of loans or something in the first quarter.

It's up in the second quarter to sort of mid-[$50 million] and the activity continues.

So I think that is at least an early sign that there is a bit of thawing going on.

But this is off a very low base.

So we're sort of taking it one day and one deal at a time and trying to find where those pockets of liquidity might be.

And then just thematically from an improvement in 30 to 89 days, whether for you all or someone else in the industry, is it -- and Chuck, maybe, is it a function of the banks being a little bit more aggressive in calling a nonperformer a nonperformer and clearing them out sooner, and/or the marginal borrower who got credit in the late stage of the cycle has been cleaned out and -- or is this something that's going to stick and ultimately translate into this thing's turning?

Well, again, very hard to predict and there are lots of sort of anecdotes hitting all of your --

Yes.

-- there, but I would say that given the length of the problems, in particularly the residential real estate side, those developers who didn't have a lot of staying power are clearly not doing well and are probably already in the NPL category.

We are doing lots of negotiating.

I would say that we've probably renegotiated across the commercial real estate book with stronger borrowers, something like $2.3 billion in commitments in the first half of the year with another very large number currently under negotiation with very strong prospects of successful renegotiation, and those are renegotiations where we have a brand new appraisal, we often get a pay down or more equity or additional collateral, and, indeed, even raise -- are able to raise the spread on that loan.

So we're not talking about basket cases here, we are talking about commercial real estate that is viable, we just need to get all the way through the cycle and get some liquidity back in the market and things of that nature.

So we're doing a lot of that work and as a result I think the weaker borrowers are clearly not in the 30 to 89 day bucket anymore, they're well past that.

And if I could ask one follow-up, is just from a regional perspective, and I may have missed it on the call, if I did, don't comment.

The core footprint of Ohio, what's your feelings there whether we're looking at ready mortgage or typical C&I credit say versus earlier in the year?

Well, I think that it's fair to say that it hasn't changed that dramatically, Ohio.

I mean it clearly went down earlier in terms of home equity portfolio.

Certainly some of the manufacturing middle market companies got hit earlier in the downturn.

I would say that is -- hasn't changed very dramatically second quarter over first quarter.

Thank you.

We'll move next to David Konrad with KBW.

Good morning.

The expense level even on a core basis seemed a little bit elevated relative to my expectations and it brought down preprovision earnings.

I was wondering if you could give a little bit more color on the expense run rate in the back half of the year given the expense initiatives and what we should look for there.

Yes.

This is Jeff Weeden.

I think in terms of we're continuing to remain very focused obviously on our expenses and managing those.

The initiative that we have underway that Henry talked about earlier, the Keyvolution initiatives will start to show more benefits as we get further into 2010 and 2011.

The costs associated with achieving those particular reductions and realignments that we have in the organization obviously hit right up front.

You'll see that in the higher professional fees that we incurred during the current quarter.

We also had costs associated with ORE, and then I think the other item that obviously is hitting everybody in the industry is the FDIC assessment.

So those particular items we're not planning on an additional assessment, but that's obviously something that is not directly within our control from the FDIC.

I think in terms of professional fees, we'll remain elevated as we're going through just from collection and business related costs that we are incurring there and ORE expenses as you see other real estate, other assets were up in the current quarter, and there's a cost associated with that in addition to just regular collection and repossession expenses that we're incurring.

But we're very focused on it.

I think a number of items outside of those particular ones were very well controlled.

Personnel costs bounced back a little bit in the current quarter as we had income that went up in some of our trusted investment management areas and you'll see that that was driven by some higher brokerage related revenues that we've broken out in our press release.

So -- and then we also had obviously in the first quarter we had some reversals of accruals just simply due to the TARP provisions on compensation.

Okay.

Thank you.

And we'll go next to Charlie [Ernst] with Diamond Back Capital.

Good morning.

Good morning.

Back on the margin, so I think you guys say in the press release that the margin suffered seven basis points because of the charge.

That's right, right?

Correct.

And then the short-term earning assets increase of about $2.7 billion, I'm calculating, if you just strip that out and assume that there's no negative carry on there, that clipped the margin another eight basis points, does that sound about right?

I think that's a fair assessment, Charlie.

Okay.

And then could you just say again what you're reinvesting those short-term earning assets in?

Yes.

We're going into CMOs, basically CMO packs.

They will -- new issuance primarily from Fannie, Freddie and Ginnie.

Duration on them would be the -- call it the three and a half year level.

What kind of yield do those carry?

You can look, we're getting whatever the market is providing for those and of course we'll have more that will settle as we go into the third quarter here.

But I think it's -- you can assume that somewhere around the 3% to 3.5% range.

So -- and the increase that was about $2.7 billion in the quarter, was pretty much all that increased in these packs, these CMO packs?

No.

What we had -- you mean at the end -- which increase are you referring to?

I'm looking at the average balance sheet, the short-term earning asset position was up about $2.7 billion in the quarter.

That's all in fed funds for the short-term investments.

You can see that the yield on that I think was about .26%.

So it was a pretty low yielding asset that we had for the quarter on an average balance, and we've had strong flows of deposits and with loans that have been paying down, that's also added to that short-term liquidity, bearing in mind we'll probably just handle and carry more short-term liquidity in the future.

Okay.

Great.

Thank you.

And at this time we have no further questions.

Gentlemen, I'll turn the conference back over to you for any concluding remarks.

Thank you, operator.

Again, thank you for taking the time from your schedule to participate in our call today.

If you have any follow-up questions on the items we've discussed, please don't hesitate to call Vern Patterson, head of our investor relations group, at 216-689-0520.

Operator, that concludes our remarks.

Hope everyone has a good day.

Thank you.

And again, that does conclude today's conference.

Thank you for your participation.