Signature Bank (SBNY) 2008 Q1 法說會逐字稿

Good morning ladies and gentlemen and thank you for standing by. Welcome to Signature Bank's 2008 first-quarter results conference call. (OPERATOR INSTRUCTIONS). This conference is being recorded Thursday, May 1, 2008.

Our hosts today will be Joseph J. DePaolo, President and Chief Executive Officer; and Eric R. Howell, Chief Financial Officer for Signature Bank. I would now like to turn the conference over to Joseph J. DePaolo. Please go ahead, sir.

Good morning and thank you for joining us today for the Signature Bank 2008 first-quarter results conference call. Before I begin my formal remarks, Susan Lewis will read the forward-looking disclaimer. Please go ahead, Susan.

This conference call and oral statements made from time to time by our representatives contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. Forward-looking statements include information concerning our future results, interest rates and the interest rate environment, loan and deposit growth, loan performance, operations, new private client team hires, new office openings and business strategy. These statements often include words such as may, believe, expect, anticipate, intend, plan, estimate or other similar expressions.

As you consider forward-looking statements, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions that could cause results to differ materially from those in the forward-looking statements. These factors include but are not limited to -- one, prevailing economic conditions; two, changes in interest rates, loan demand, real estate values and competition which can materially affect origination levels and gain on sale results in our business as well as other aspects of our financial performance; three, the level of defaults, losses and prepayments on loans made by us whether held in portfolio or sold in the whole loan secondary markets which can materially affect charge-offs levels and required credit loss reserve levels; and four, competition for qualified personnel in desirable office locations. Additional risks are described in our quarterly and Annual Reports filed with the FDIC.

You should keep in mind any forward-looking statements made by Signature Bank speak only as of the date on which they were made. New risks and uncertainties come up from time to time and we cannot predict these events or how they may affect the bank. Signature Bank has no duty to and does not intend to update or revise the forward-looking statements after the date on which they are made. In light of these risks and uncertainties, you should keep in mind any forward-looking statement made in this conference call or elsewhere might not reflect actual results.

Now, I would like to turn the call back to Joe.

I will provide some overview and then Eric Howell, our Chief Financial Officer, will review the bank's financial results in greater detail. Eric and I will address your questions at the end of our remarks.

The results again reveal the foundation on which Signature Bank is built remains strong and well positioned for growth. We continue to execute resulting in another quarter of improved financial performance. During the first quarter, we showed increases in core deposits which grew $125 million, loans which were up $194 million nearly 10%, net interest margin which expanded 24 basis points, earnings despite the increase in the provision rose 6% and teams where we added two teams and were at 54 in total at quarter end.

First, let's look at the deposit results. Deposits increased $76 million totaling $4.59 billion at the end of the first quarter. This includes core deposit growth of $125 million and a decrease of $49 million in short-term escrow deposits which as expected were released during the quarter. At quarter end, short-term escrow deposits totaled $97 million.

Deposits for the last year increased $621 million or 16%. And more importantly, average total deposits increased $859 million over the past year to $4.54 billion for the quarter. Remember, this is the deposit metric we focus on because of fluctuations in short-term escrow deposits.

Non-interest-bearing deposits were at $1.27 billion representing 28% of total deposits. Additionally, we saw a significant increase in our off-balance sheet money market deposits of $661 million to $2.45 billion. That is 37% in just this quarter alone, which clearly drove our growth in commission income for the quarter. Total assets were at $5.8 billion versus $5.2 billion in the first quarter over last year.

Looking at loans, loans in the first quarter were up $194 million or nearly 10% reaching $2.2 billion. Loans as a percentage of total assets reached 38% at the end of the first quarter. As a reminder, in the fourth quarter of 2007, we hired a seasoned team of banking and real estate professionals which we believe is the premier commercial real estate relationship team in the New York marketplace. The loan growth during the first quarter was driven in large part by our commercial real estate activities. The current market conditions have afforded balance sheet lenders, like Signature Bank, with experienced real estate professionals, such as the seasoned team we recently hired, a significant opportunity to add quality commercial real estate loans.

Let's take a moment to discuss nonperforming loans which increased to $40 million and contributed to the increased provision for the quarter. Right now, we have four loans totaling $36.6 million that comprised the bulk of our non-accrual number. Plain and simple, each of these loans has a story to them and they went non-accrual because of specific events to the companies and not due to the overall economic environment. We are aggressively working through these loans and we are close to resolution on several of them.

One non-accrual loan this quarter made up the majority of the increase. This loan for approximately $16.5 million is a traditional C&I loan to a media-related company. The company obtained financing subordinate to ours to acquire and develop new product lines. This did not work out for the Company and they filed for bankruptcy to relieve them of the debt related to these ventures. This loan was current as to contractual payments due at March 31.

We are working with the client through the bankruptcy as its core business remains intact. The client has obtained commitments for additional equity and debt financing that should take us out of the credit once bankruptcy proceedings are complete. This loan is secured by all assets of the client including receivables and equipment as well as a personal guarantee.

We remain cognizant of the current overall economic environment and the potential for further impact in our marketplace. As a result, we have increased our provision. Now let's turn to earnings.

Net income for the quarter was $9.9 million or $0.33 diluted earnings per share up 6% over the same period a year ago. The growth in net income was due to our expanding net interest margin which was driven by a significant decrease in our deposit costs. Additionally, we had a solid increase of 44% or $3 million in noninterest income.

During the quarter, we continued to focus on team growth and added two new teams. One of these teams joined from North Fork Bank marking our sixth team from there. This team is comprised of two group directors, is based out of our Jericho office which opened during the first quarter. This is our 21st office in the metro New York area. The pipeline remains strong for continued recruitment of talented banking professionals.

Now I would like to turn the call over to Eric Howell, our CFO, who will review the financial results in greater detail.

Good morning everyone. I will start by just quickly reviewing the net income results for the quarter. As Joe mentioned, net income for the quarter was $9.9 million or $0.33 diluted earnings per share up 6% over the first quarter of last year. This is a result of first our expansion in net interest margin which essentially was driven by a decrease in deposit costs and second increased non-interest income. Net interest income in the quarter rose to $41.2 million, an increase of $7.5 million or 22% from the 2007 first quarter.

Now, focusing on net interest margin. Net interest margin on a tax equivalent basis grew 23 basis points surpassing 3%. This is predominately due to the repricing of our deposit base following the significant decrease in fed funds in the fourth and first quarters as well as the decrease in LIBOR in the first quarter.

Turning to asset yields and funding costs this quarter, yields on investment securities decreased 30 basis points during the quarter to 4.88%. This is a result of downward adjustments of floating-rate securities and reinvestment of cash flow in a lower rate environment. Overall, the portfolio quality remains strong with a stable average duration of 2.06 years and continues to provide consistent cash flow for reinvestment in higher yielding loans.

Turning to our loan portfolio, yields on average commercial loans and commercial mortgages decreased 67 basis points to 6.40% for the quarter. This decrease was primarily driven by a reduction in prime and LIBOR rates.

Now if you look at liabilities, cost of deposits for the quarter decreased 70 basis points. As discussed last quarter, there is a natural lag effect of deposit repricing in a declining interest rate environment. During the first quarter, we were able to pass along many of the fourth quarter's decrease in rates as well as the first quarter's decrease. The decline in LIBOR costs in the first quarter really helped this effort along. As always for us, the key drivers for margin expansion are raising core deposits and increasing loans as a percentage of our balance sheet and we were able to achieve both this quarter.

Now to non-interest income and expense. Noninterest income for the first quarter was $9.9 million up $3 million compared with the $6.8 million reported in the first quarter of 2007. We again had solid growth for the quarter in commissions and fees and service charges. Commissions increased $1.4 million or 47% for the quarter mainly due to the increase in off-balance sheet money market deposits as well as an increase in our brokerage-related activities.

The rise in fees and service charges of $880,000 or 32% for the quarter are reflective of client expansion and activity. Also included in noninterest income is $2 million in net gains on sales of securities and loans. Approximately $500,000 of these gains are from our regular SBA activities and $1.5 million is from gains on sales of available for sale securities. There were particular securities that experienced an increase in value as interest rates declined. We were able to sell these securities for gains and replace them with accretive yielding investments.

We also had additional write-downs for other than temporary impairment of securities on two securities that we wrote down in the fourth quarter. One was a small ABS security that we wrote down to zero that was previously carried at a value of $68,000. The other security was a CDO that was downgraded to below investment grade. We wrote the security down by an additional $635,000 in recognition of the weakening underlying credits in the structure. We'd like to point out that we received all principal and interest payments to date in accordance with the terms of each security for the 12 impaired securities from the fourth quarter including these two.

Let's look at noninterest expense now. Noninterest expense for the 2008 first quarter was $28.6 million versus $23.3 million for the comparable period last year. The increase of $5.2 million or 22% was mostly due to the addition of seven private client banking teams including two very large teams and three offices along with the expansion of six of our established offices. Looking at our efficiency ratio for the quarter, we saw an improvement to 55.9% from 57.5% for the first quarter of 2007. The improvement was predominately driven by the growth in interest and noninterest income.

Now I will turn the call back to Joe.

In closing, I just want to point out that while the current investment landscape and credit markets are challenging for any financial services organization, Signature Bank has built a strong foundation and established a solid reputation. We remain focused on achieving continued growth just as we did this quarter where we added two new private client banking teams, grew core deposits by $125 million and loans by $194 million.

With our strong capital base, we are well positioned to take advantage of dislocation in our marketplace. Bottom line is that we will continue to do what we do best and deliver on our proven model which includes hiring teams and growing core deposits and loans.

I would be remiss if I did not take a moment to recognize that today, May 1, is the seven-year anniversary of the opening of Signature Bank. The accomplishments achieved to date have been truly remarkable. I want to take this opportunity to thank our committed clients, dedicated employees and valued shareholders and directors for their continued support of the bank.

And now, we would be happy to answer any questions you might have.

(OPERATOR INSTRUCTIONS). Dave Rochester, Friedman, Billings, Ramsey.

Just a general credit question to start off. It sounds like you're not seeing any systemic weakness in your commercial business portfolio. Is that a fair assessment?

Yes.

You mentioned you're close to a resolution on a couple of those larger credits. Do you expect any of them to be gone by the end of the second quarter?

The way I would judge it, we believe that one absolutely, two a strong possibility and three an outside chance that is how I would gauge it.

Do you happen to have a sense for what portion of the provision came from the $16.5 million credit?

Since it is a bankruptcy and it's public, if we gave that information out, it would kind of tip our hand as to what we believe the shortfall could be in any payment we would get. So therefore, we would rather not disclose that.

Just turning to the watch list, could you quantify that this quarter and perhaps the growth you saw over last quarter?

I think the growth in the watch list is really in line with the growth we have seen in our overall portfolio as Dave said. On a trend, I don't think it's -- on a percentage basis, I don't see it being significant.

Would you happen to have just a percentage of total loans that is right now?

I don't have that. I would have to get back to you on that.

In terms of a granularity question on the watch list. Do you happen to have a sense for what portion of the watch list consists of larger loans, say larger than 15 or $20 million?

Just the one.

Just one? And 90-day delinquencies for the quarter, do you happen to have the number for that?

I don't but the 90-day delinquency number came down from the prior quarter.

And in terms of the charge-offs, any color as to what the charge-offs were?

It was really a cleanup of a lot of smaller more granular credits, Dave.

It primarily a commercial credit?

It's primarily business revolving lines, personal revolving lines. It was really smaller, smaller lower lines.

And in terms of the granularity of the loan growth, could you give us any color on that? The loan growth was outstanding this quarter, just trying to figure out if there were any large pieces in there.

A significant portion of the loan growth came from the commercial real estate area. As I mentioned a few moments ago, we hired a very large, significant, premier team from North Fork and they have been enable to bring over just quality clients, significant quality clients. And a large part if not half of the business that they have been doing have been multifamily in the Burroughs, which are great, great credits because you have cash flow and then you have the property supporting the loan as well. And there is some real opportunities for a balance sheet lender like Signature Bank with this high-quality team to do some significant businesses in this area. We're very happy what that growth.

Gary Townsend, Hill-Townsend Capital.

You had an impressive improvement in your net interest margin in the quarter. Any benefit from the securities that you took an impairment charge on?

There was a very slight benefit. I would say one to two at most basis points.

So it was primarily a reduction in funding costs?

That was definitely the primary driver plus the pickup in the loans.

And any recent change in LIBOR pricing having impact on the current quarter?

Really, it will help somewhat on the asset side with some of the loans on a (technical difficulties) debt to LIBOR.

Tom Alonso, Fox-Pitt Kelton.

Just a real quick one. I just wanted to sort of circle back to the guidance you gave for loan and deposit growth in the fourth quarter. Any sort of update or changes to that?

No, we're pretty confident in the numbers still.

Lana Chan, BMO Capital Markets.

Just one quick question for me too. What are your expectations for getting back some of the negative marks you've taken on the securities book?

On the ABS securities that we wrote down, I think we wrote down about $4 million on the ABS securities. We expect to get a substantial amount of that back in the fourth quarter and first quarter of this year and next year. So between the third quarter, fourth quarter and first quarter of '09, I would say we'll receive about 2 million of the 4 million that we wrote down coming back as. Remember that goes into the margin, doesn't come back through the noninterest income. It comes back through our margin.

And how about on the CDO book?

The CDOs are a little bit longer duration, so it will take time before we start seeing principal repayments on those. So we don't expect to see that for some time. If we see price appreciation to a level and for a period of time where we're comfortable that this chaotic market is behind us, then we can start to recognize that back into income as well but I don't see that happening anytime soon.

Justin Maurer, Lord Abbett.

Eric just on the LIBOR question, given its stickiness relative to Fed funds and prime, any sense -- I mean did that benefit you guys in a meaningful way in the first quarter that maybe those numbers start to come closer together that there's less of that going forward?

It certainly benefited us on the positive side in the first quarter, Justin. We have several of our depositors that are tied to that and [mirror] the LIBOR rate. With the decline, it definitely helped us to reduce deposit costs. I don't know if it will meaningfully affect that this quarter.

Then secondly on the North Fork on the multifamily business, does that tend to be a little bit less margin can all things equal? So to the extent that presumably with the team coming and putting a lot of that stuff on which is great, do you guys think about that from a margin mix perspective in the loan portfolio or is it just it's not going to be big enough over time to [tend]?

We absolutely think about it. What's great is the teams from North Fork also bring over deposits, significant deposits along with the loans. So with each of the loans, you get the operating accounts and then you get some of the escrows that go along with the loans and you get some of the rent security. And those have a tendency to be lower cost deposits. So that is a positive for the margin and but no we absolutely look at it.

So you're seeing as you mentioned maybe half of their growth coming from that product? Are they seeing the deposit flows or does that tend to lag a little bit that we'll start to see that pick up?

I would say it lags but it is picking up.

Avi Barak, Sandler O'Neill.

Just one follow-up question, I was just wondering if you could tell us when your last safety and soundness exam was and if you noticed any particular attitude change on their part? And what asset classes they seem to be particularly concerned versus your previous year's exam?

With the safety and soundness exams, it is confidential. I will say the last one was done as of 3/31/07. That was the last one. So expect another one some time late summer. But I will basically say it, we haven't seen any issues. And I will just leave it at that. You're not allowed to discuss CAMELS ratings and the like.

John Pancari, JPMorgan.

This is [Polly Sung] on behalf of John Pancari. I was just wondering if you could remind us what the runoff of the securities book is in terms of cash flows and what percentage you're currently reinvesting back into securities.

The runoff is approximately $50 million per month in cash flows coming back off the portfolio. For the most part, we are reinvesting that back into the portfolio. Our deposit growth is more or less in line with our loan growth. Our loan growth outstripped it a little bit in the first quarter but I don't know if we're going to expect that throughout the course of the year.

And are you going to be more aggressive in selling some of these securities again in coming orders or was this quarter more of a onetime event?

I would not say we're going to be more aggressive this quarter. It certainly presented us with some opportunities that made sense for us to take some gains and then replace it with some accretive yielding investments. So obviously you're going to do that when you have those opportunities. With treasury securities trading in the basis points, we had opportunities in treasury securities just to sell them at significant gains and replace them with higher investments. I don't know if we're going to see that in future quarters or not.

Alper Sungur, Sidoti & Company.

I was wondering if you have the margin available for the month of March.

I don't have monthly margin breakdown.

Also, in terms of the --

It was pretty strong though.

Like the repricing of the assets versus liabilities, the 1 to 90 days GAAP, was it positive or negative?

I do not have the 1 to 90-day GAAP number.

Justin Maurer.

Sorry, I should have asked this before. On the NIM, to Alper's question there too, just so we are all kind of on the same page, what is your expectation, Eric kind of going forward all things equal now that the Feds is on the latter tail it seems? Is there still a little catch-up you need to play maybe the first part of the quarter but then things start to get a little bit better?

I would expect that we would be able to have a pretty stable NIM through the course of the quarter. The Fed just moved 25 basis points so we just had all of our prime base loans reset down so we will have to catch up to that to some extent. But 25 basis points is a more manageable number than 50 of the 75 basis point moves that we have seen. So we will spend the rest of this quarter catching up that. Hopefully, we can maintain the levels that we're at. We feel pretty comfortable with the levels we're at. And over the long-term, again, we will look to grow margins with the shift to loans.

(OPERATOR INSTRUCTIONS). Michael Cohen, SuNOVA.

Certainly you address this in your opening remarks but maybe you could provide a little more comfortable or I guess sort of in the middle last year, we started to see some of the NPA start to creep up. And it's all kind of been this one-off stuff. But what kind of comfort can you give us that maybe that is going to stop? I know you talked about some of one, two, maybe three coming back off of NPA. But why shouldn't we be really worried?

We have not seen our $2.2 billion overall portfolio any trends that alarm us. I think NPAs were unrealistically low when we were at the 2 and $3 million level in 2007. The fact that $36.6 million of the $40 million are in these four loans. I couldn't give you any assurance that if three of them go away, another one would not be added on.

But the one thing that gives us comfort is they all have been very specific. And also, two other things, we risk weight all of the loans. The weighted average risk rating throughout the past several years including most recently this quarter have remained pretty stable and that weighted average risk rating is reviewed by a credit review group independent of our credit officers and then is also reviewed by the regulators. And we have gotten comfort there that there have been no real negative trends. Other than that, we're weary about what's going on in the market. Because of the current market, we're trying to be a little more cautious in things we do.

That makes sense. Would any of these four loans have scored out at the higher end of the risk rating? A lot of times you have talked about specifically like with this media company or another -- I believe in past calls, you've talked about companies that have made business decisions that were different from where they were when you originally underwrote the loan.

These loans were in all likelihood risk graded a 5 which is a strong passing loan when it is done. Then, we had one we talked about earlier in 2007 that back in 2003, 2004 there was a client of ours that did an acquisition. And nine months from the date of the acquisition they had to declare bankruptcy because it was a total mess. They did a poor job on due diligence. But it was a strong company prior to it today.

The more recent one was again a strong 5-rated credit. It had one line of business that they wanted to expand on, had an investor come in, invest significant dollars subordinate to us and it went bad rather quickly.

Now their core business has remained stable. They had positive EBITDA and the cash flow has been there. But to deal with an investor that they could not come to a settlement on forced them into a bankruptcy position that we have been working with them on because we're the secured creditor.

I don't know if you can say that you can foresee that happening as part of doing the due diligence and doing the loan. We have another one that we believe it's close to $6 million that is part of the four loans that we talked about last quarter that got into a major lawsuit that kind of went bad on them. That is the loan where we actually think we're going to be coming to closure on because we are comforted by the commercial real estate that backs that loan.

Again, it was a functioning company with cash flow, lost this lawsuit and put them in a very bad position. What helps us on that lawsuit is we are the secured creditor. In each of the cases, we have been the secured creditor. We always do a Monday morning quarter back would we have done anything type different? And luckily, we feel that we would not have done anything differently except for maybe in certain circumstances once things go bad being more aggressive. And that is what we will do going forward. But in each case, it was a 5-rated credit when we did them.

Sure. I mean I guess given the nature of the relationship business and the way the teams work, is there a way to sort of be ahead of some of these -- when these acquisitions happen presumably you're aware of them. They're discussing them with you even though you may not be the lender on the second piece to it if you will. Is there anything you can do differently there? Or are you guys thinking about are you guys not really aware of these things as they are in motion?

No, we usually are. I will say usually because I never try to say absolute. In all those cases, we are aware of what is going on and are cognizant because of the relationship the teams have and the lenders have with the client. One of them which was very difficult was it is one of the staples. It is in the business of one of the staples and they were not able to import a product because of a -- between the U.S. government and another foreign government they were not able to import their product for several months and it affected their revenues by $7 million.

We talked about that in the last quarter. That was something that there was nothing we could do. There was nothing they could do. But we were aware of it. We have been aware. I guess in that particular case, I would say we would have acted a little bit more aggressively on our part of one of the four credits but I don't think we would've done anything differently.

Particularly with these last two credits, we have everybody at the highest levels actively involved. We get comfort -- one of the things we do is in particular this last $16.5 million credit, we actually review the request. We got comfort from the sub-debt holder that they were investing in the company. So here we are, we were the secured lender and then someone came in behind us and invested a lot of money and their due diligence and that line of product did not work out. That gave us comfort that someone was willing to invest -- I won't get into particulars -- but significant millions of dollars behind us. So we take comfort in those things.

But on the other hand, the other comfort we get is that we are working them through. In three of the four cases, the client is very amenable to working with us. In one of the four cases, it has gotten a little sticky. But the good news is that we have a judgment and we are working that judgment through and we are secure.

Gary Townsend.

You have been adding loans at a rapid pace. Can you talk about changes to your credit standards and your credit administration in the past six -- let's say two quarters? Also, you brought on new teams from North Fork, just be interested too in how your approach to lending in the commercial real estate space compared to theirs.

I will take the latter one first. I believe that the standards that we have on the commercial real estate side are very similar if not exact to what North Fork did in their commercial real estate. We take a lot of comfort in the fact that the team that was primarily responsible for the growth in the North Fork commercial real estate portfolio and prior to that in the M&T portfolio is the team that is leading the charge for us.

If there is a difference between what we are doing here at Signature and what they did at North Fork is that on occasion at North Fork they had the chance to do a loan at a much larger dollar amount. With us being a $6 billion institution and I believe when North Fork was acquired by Capital One, they were above $50 billion. There was an opportunity for them to do larger credits on occasion where here we would not be able to do those larger credits.

But when you look at the statistics of North Fork and what they were doing in commercial real estate, a large portion of the commercial real estate population are loans under $5 million, are multifamily, are in the New York area. That is another difference as well. At North Fork on occasion, they had the opportunity to do loans in Chicago and other states where we right now are sticking with our 75 mile from headquarters geographic boundary or radius.

Getting back to the first part of your question, we have added a number of lenders on for the growth of the portfolio. With the commercial real estate team coming onboard, we added about I will say five to six people in the support and administrative areas to support the growth of the portfolio. We upgraded significantly the person or the employee in charge of risk management particularly as it relates to credit review. That was a significant upgrade for us again all in anticipation of the growth in the loan portfolio.

Alper Sungar.

Eric, I was wondering what was the number of deposit accounts at the end of the first quarter?

I will have to get back to you on that one.

And also do you still expect the expense base to grow at a 20% clip in 2008?

To be conservative, I would stick with that number.

Lastly, you have a total of 54 teams. How many of those have matured so far?

Certainly the seven teams we hired in the last year, we wouldn't consider mature by any means.

And the two teams this year. So I would say somewhere around the 35 number out of 54.

Lana Chan.

Just a follow-up on the commercial loan portfolio. Of the $1billion you have in C&I loans, how much of that would you say is secured by either a commercial real estate, cash and marketable securities or has a personal guarantee?

It would be a pretty substantial portion of that. But I don't think we have an exact number on it. But most of our loans come along with some form of collateral or personal guarantees attached to them.

You're usually getting a lien on the assets of the Company including receivables, inventory, equipment. And then if the company also has ownership of the land and/or buildings where their operations are housed, we usually get a cross corporate guarantee from the real estate company because they usually keep that separate from the operating business. A C&I loan is not done on an unsecured basis.

(OPERATOR INSTRUCTIONS). At this time, I'm showing no additional questions in the queue. I would like to turn the call back over to management for any concluding remarks they may have.

Thank you for joining us today. We appreciate your interest in Signature Bank. And as always, we look forward to keeping you apprised of our developments. Thank you and have a good day.

Ladies and gentlemen, this does conclude Signature Bank's 2008 first-quarter results conference call. Thank you for participating. As a reminder, a Web replay of this conference can be accessed through Signature Bank's website at www.SignatureNY.com by clicking on the Investor Relations tab and then selecting Company News followed by Conference Calls. You may now disconnect.