Signature Bank (SBNY) 2010 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Signature Bank's fiscal 2010 second-quarter results conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator Instructions). This conference is being recorded today, Tuesday, July 27, 2010. I would now like to turn the conference over to Joseph J. DePaolo, President and CEO and Eric R. Howell, CFO of Signature Bank. Mr. DePaolo, please go ahead.

Thank you, Mitch. Good morning and thank you for joining us today for the Signature Bank 2010 second-quarter results conference call. Before I begin my formal remarks, Susan Lewis will read the forward-looking disclaimer. Please go ahead, Susan.

Thank you, Joe. 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, operation, competition, capitalization, new private client team hires, new office openings, the regulatory environment 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 actual results to differ materially from those in the forward-looking statements.

These factors include, but are not limited to one, prevailing economic and regulatory 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 levels of default, losses, and prepayments on loans made by us whether held in portfolio or sold in the whole loan secondary market, which can materially affect charge-off levels and required credit loss reserve levels; four, competition for clients, loans, deposits, qualified personnel, and desirable office locations.

Additional risks are described in our quarterly and annual reports filed with the FDIC. You should keep in mind that 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 that 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.

Thank you, Susan. I will provide some overview into the quarterly results, and then Eric Howell, our Chief Financial Officer will review the Bank's financial performance in greater detail. Eric and I will address your questions at the end of our remarks.

Signature Bank posted another quarter of solid financial performance, highlighted by crossing $10 billion in total assets, exceeding $8 billion in deposits, increasing loans by $195 million and approaching $900 million in capital while maintaining stable credit quality. I'll jump right into the results, starting with deposits.

Deposits increased $571 million, reaching nearly $8.5 billion. This includes quarterly core deposit growth of $508 million or 7%. Since the second quarter of last year, total deposits grew $2.4 billion or 39% during the past 12 months. Also in the quarter, short-term relationship-based escrow deposits rose $63 million, now totaling $523 million. Average deposits in the 2010 second quarter were $8.14 billion, an increase of $2.3 billion or 39% compared with $5.88 billion reported in the 2009 second quarter. Remember, this is a key deposit metric which we closely monitor due to fluctuations in short-term escrow deposits.

Non-interest-bearing deposits of $1.94 billion represented 23% of total deposits. With the significant deposit growth, total assets reached $10.4 billion, up $2.5 billion or 32% since the 2009 second quarter. We achieved this milestone in assets organically in just a little over nine years after commencing operations with only $42.5 million in initial capital.

Moving on to loans, loans during the 2010 second quarter rose $195 million or 4%, reaching $4.69 billion, which represented 45% of total assets at quarter end. The increases in loans during the quarter were primarily driven by growth in commercial real estate and multifamily loans with continued conservative underwriting standards.

Nonperforming loans remained stable this quarter at 0.95% of total loans and only 0.43% of total assets, or $44.6 million. This compares with 0.99% of total loans or $44.4 million at the end of the 2010 first quarter and 1.27% of total loans or $47.9 million in the 2009 second quarter.

The provision for loan losses in the second quarter of 2010 was $11.1 million compared with $11.2 million for the 2010 first quarter, and $9.4 million for the 2009 second quarter. This is now the 11th consecutive quarter where our provisions significantly exceeded charge-offs.

Continued elevated level of provisioning was primarily driven by the potential effect of the current economic environment. This provisioning lead to a further increase in our allowance for loan losses, which were 1.38% of loans compared with 1.33% in the 2010 first quarter. Additionally, the coverage ratio, or the ratio of allowance for loan losses to nonperforming loans, improved again 145%.

Net charge-offs for the 2010 second quarter were $6.3 million, or an annualized 55 basis points compared with $6.4 million or 59 basis points in the 2010 first quarter and $4.4 million or 48 basis points for the 2009 second quarter.

During the 2010 second quarter, we saw a decrease in our 30 to 89-day past due loans of $5.9 million to $35.2 million, and an increase in the 90-day-plus past-due category of $5.2 million to $13.5 million. To put this in perspective, the 90-day plus past-due category is actually down from $15.1 million at June 30, 2009.

Although our credit metrics remain stable, and we see credit as manageable, we remain mindful of the uncertainty in the economic environment; therefore, we continue to prudently build our reserves. Let's look at earnings.

Net income for the second quarter of 2010 reached a record $22.3 million or $0.54 diluted earnings per share, an increase of $10.3 million or 86% versus $12 million or $0.32 diluted earnings per share reported in the second quarter of last year.

The considerable improvement in net income when compared with the second quarter of last year is mostly the result of an increase in net interest income fueled by significant core deposit growth and continued loan growth. These factors were partially offset by increases in the provision for loan losses and non-interest expenses.

Just to review team expansion for a moment, we added four teams during the first half of 2010. We now have 72 teams headed by 92 group directors, and we remain focused on identifying opportunities for attracting new talented banking professionals.

At this point, I'll turn the call over to Eric, and he will review the quarter's financial results in greater detail.

Thank you, Joe, and good morning, everyone. I'll start by reviewing net interest income and margin. Net interest income for the second quarter reached $81.1 million, up $20.5 million or 34% when compared with the 2009 second quarter, and an increase of 3% or $2.3 million from the 2010 first quarter.

Net interest margin decreased 1 basis point in the quarter versus the comparable period a year ago and declined 13 basis points on a linked quarter basis to 3.38%. The linked quarter decrease is mostly due to a significantly higher than normal level of cash this quarter. Cash on hand was driven by deposit flows and our focus on our prudent long-term deployment strategy. In June, we invested a considerable amount of cash into loans and securities, which will prove beneficial for our margin in the third quarter.

Let's turn to asset yields and funding costs for a moment. Overall, interest-earning asset yields declined 16 basis points this quarter to 4.69% due to the continued low interest rate environment and the unusually high levels of cash. In keeping with our conservative investment philosophy, we are selectively deploying cash while maintaining our high-quality short-duration investment portfolio. As a result, yields on investment securities decreased 26 basis points to 4.09% this quarter versus the first quarter of 2010.

Turning to our loan portfolio, yields on average commercial loans and commercial mortgages increased 6 basis points to 5.62% this quarter from the first quarter of 2010 as we continued to selectively identify quality lending opportunities at appropriate pricing.

Now looking at liabilities, costs of deposits for the quarter further decreased 2 basis points to 1.1% as we further adjust deposit costs given the abnormally low interest rate environment.

Our borrowings remained stable this quarter. However, it should be noted that in August, $122 million in long-term borrowings at an average rate of 4.73% rolls off. This too will be beneficial for the margin.

On to non-interest income and expense, non-interest income for the 2010 second quarter was $10.3 million, up $2.9 million versus the 2009 second quarter. The increase was mostly the result of an increase in net gains on sale of securities and loans. This was partially offset by a decrease in commissions, as well as an increase in other than temporary impairment losses on securities.

Further explained, given the volatile market conditions, we again capitalized on the opportunity to sell securities resulting in gains of $5.2 million. Conversely during the quarter, we recognized OTTI of $1.9 million primarily on CDOs and bank-pooled trust preferred securities.

Commission income further declined by $624,000 versus the 2009 second quarter as deposits and off-balance sheet money market funds decreased $723 million. Commissions we earn on off-balance sheet money markets continue to be significantly reduced or even eliminated to maintain positive yields on the funds in this unusually low interest rate environment.

Now looking at non-interest expense for the 2010 second quarter of $41.7 million versus $38.9 million for the same period last year, $2.8 million or 7% increase, was principally due to the addition of new private client banking teams and growth in client activity. As a reminder, the 2009 second quarter included an FDIC special assessment fee of $3.5 million.

The Bank's efficiency ratio improved to 45.7% for the 2010 second quarter compared with 57.4% for the same period last year. Excluding the FDIC special assessment fee, the efficiency ratio for the 2009 second quarter was 52.2%. The improvement was primarily due to growth in net interest income coupled with expense containment.

And turning to capital, our capital levels remained strong with a tangible common equity ratio of 8.54%; Tier 1 risk base of 13.55%; total risk-based ratio of 14.54%; and leverage capital ratio of 8.98% as of June 30, 2010. Our regulatory capital ratios were all well in excess of regulatory requirements and augments the relatively low risk profile of the balance sheet.

Now I'll turn the call back to Joe. Thank you.

Thanks, Eric. We continue to demonstrate that our focus and deposit as safety first and adherence to our business model allowed us to deliver strong results this quarter with significant core deposit growth, strong loan growth, stable credit quality, and record net income.

I just want to address another key point. As financial reform takes shape, our deposit-focused model and emphasis on serving privately-owned businesses is largely unaffected by the new legislation. In fact, Signature Bank is already prepared to meet potentially more stringent capital requirements and is isolated from many of the issues at hand, such as, among others, consumer financial protection, derivatives regulations and proprietary trading rules. Therefore, the industry's current focus on financial reform will not be a distraction for us in our ability to serve our clients. Now, we're happy to answer any questions you might have. Mitch, I'll turn it back to you.

(Operator Instructions). Bob Ramsey, FBR Capital Markets.

You mentioned deploying the excess liquidity in the month of June. Could you talk about -- sort of quantify the impact to margin that that has? And then talk a little bit about the quarterly cash flows that are coming off the securities book and where you are reinvesting today?

To give you an idea about the margins during the quarter and the effect that we had on deployment, the net interest margin the month of April -- I'm sorry, the net interest margin for the month of May was 3.30%. And the net interest margin for the month of June was 3.48%. You can tell by that increase the effect that some of the deployment had on the net interest margin.

Also, before -- I'm going to have Eric get into the details on the cash flows, let me just point out two other things while we're on the subject of the margin, which Eric mentioned during the call. I just want to re-emphasize, we have $122 million of borrowings rolling off in mid to late August, at an average rate of 4.73%. So that bodes well for the margin for the third quarter.

Another point I would like to bring out is during the first half of the year, we thought where we were with our deposit costs that we were going to have some movement downward for our clients in reducing deposit interest rate. We're more encouraged now that we can be a little bit more aggressive in reducing interest rates because our expectation in the earlier part of this year that interest rates were going to plateau and they were going to start to rise.

Now we can see that they will not rise in the remainder of this year and certainly going into 2011. But we feel that that bodes well for us as well, that we will have the ability to reduce -- as an example, our money market went from 1.62% to 1.47% in the first quarter to 1.41% in the second quarter, we'll be able to continue to drop the interest rates on the money market accounts even further. So we are encouraged by all those to help the margin. And I'll have Eric get into the cash flows.

Yes, Bob, on the cash flows, we have approximately $100 million to $125 million rolling off the securities portfolio a month at an average yield I would say in the mid-4's. We're redeploying that now back into the securities portfolio in mid-3% range.

What we did in the second quarter was we had delayed deploying cash into the securities portfolio with the hope that as quantitative easing was ending, we would get wider credit spreads and better investment opportunities. Unfortunately, Greece and the events of Europe and Goldman Sachs and a few things threw that off course. And we decided to deploy cash late in the second quarter, which will certainly prove beneficial to the margins in the third quarter. But that's why you saw the drag in the margin really in the second quarter is that we deliberately held off for a little while in investing in the securities portfolio.

Okay, thank you. And then, with the money market rate that you talked about, is the 1.41%, is that still sort of where rates are today? Or have you already begun to sort of take those rates lower?

We -- actually, on July 15 for a portion of our population, we dropped the rate on the money market accounts. And on August 2, for another portion of the population, will be dropping.

One thing to keep in mind, we're not a mass-market retail player, so with the mass-market retail banks, where clients may keep $10,000 in an account, they can pretty much dictate where they're going to drop their rates and drop them very steep.

We happen to have a higher-quality clientele that -- when we bring them over from other institutions, they are the quality clients with the balances in the millions of dollars, so they have a tendency to get the higher rates. As we're bringing them over, we have to maintain that higher rate for a period of time and then gradually drop them. So we are encouraged by the fact that we will have some movement down from that 1.40%, from that 1.41%. So we've already started in the middle of July, and we will begin next Monday, the beginning of August, start dropping the rates even further.

Okay. And roughly how much is the adjustment that you all have done into July and are planning early August?

Because the clients are -- each of them have their special deals. It's hard for me to give you a range of the drop in rates. But, I think that the money market rates will probably drop anywhere -- they went down 15 basis points in the first quarter, 6 basis points in the second quarter. Probably somewhere in between that for the third quarter.

Okay. Thank you, guys, very much.

Christopher Nolan, Maxim Group.

Good morning, guys. Thanks for taking my call. Is there any particular target that you guys have discussed publicly in terms for the loan loss reserve ratio?

No, we don't have a target in mind. What we're seeing is that the environment continues to be -- as we like to say, cloudy. And so we don't -- right now, we may slow down as you see, we've had a little less provisioning this quarter than last, and from the previous fourth quarter. We may slow down on the speed at which we're building reserves.

We don't believe right now is the time to stop building reserves. There's too much uncertainty out there, although our credit metrics are very good. It's the environment that continues to give us some pause. So we don't have a particular target in mind. It will just be dictated by the environment.

Great. And a strategic question, are you giving any consideration to broadening out your teams geographically possibly to markets such as Florida and so forth? Talking to various people who own businesses in New York and it seems more and more of them are talking about possibly doing a geographic move for various reasons.

Not on the near-term horizon. If anything, the geographics would be just contiguous growth in Connecticut and New Jersey. We've always been asked the question about Florida. They tell us that a lot of our clients are in Florida, but not their businesses. Our clients' businesses are here, and that's where we want to be. And if they have a tendency to spend time in Florida, they can easily do their banking here in New York.

Great. Thank you very much.

Lana Chan, BMO Capital Markets.

You've hired four teams year to date. Could you just give us thoughts about potential additional team hires for the rest of the year?

We have a potential to open up a new office, our 24th office, possibly, in the fourth quarter. And if that does happen, it would be at least one and possibly two teams. That's pretty much our pipeline at the moment.

Okay. Thanks, Joe.

Tom Alonso, Macquarie.

Just curious -- this new potential $30 billion SBA lending program, do you guys see any potential benefit to you in what you do in that market if that comes to fruition?

We haven't really dug into that too much, but I don't think we see it as being much of a benefit to us.

Yes, in fact, we believe that there may be some TARP-like restrictions on it, and we don't believe that it would benefit us, so we wouldn't be participating.

I don't mean as a participant; I mean as -- it would increase the volume of SBA loans, and you guys tend to sort of -- you buy and kind of trade in those --

Our business in Texas.

Yes.

The SBA -- so the pool assembling business.

Yes.

I think potentially, that could help that business line out. We'll have to see how it works its way through. There have been several initiatives that have helped that business activity out on the small business side over the last year -- had some pretty good quarters the last two or three in that arena. So hopefully, it will prove beneficial, but we will have to see how it plays out, Tom.

Okay, fair enough. And then, just on the big swing in the ALCI this quarter, is that all just gains on the AFS portfolio?

We saw significant improvements in the AFS portfolio this quarter.

Okay. That's what I figured. All right. Thanks, guys.

[Casey Hair], Bank of America Merrill Lynch.

Good morning, guys. Just a question on the deposit growth and how the teams are -- at what level of capacity they are operating at. The deposit growth was obviously strong again this quarter. Is that a function of the teams that you guys have brought on operating or becoming more efficient? Or is there still some upside there? And is there room to improve upon this deposit growth in the second quarter?

Pleasantly being able to tell you that the deposit growth is across the board. We are seeing -- usually from a percentage basis, the growth from the newer teams is going to be there because they had a lower base. But in terms of real dollars, we're pleasantly surprised -- I shouldn't say surprised. We're pleasantly happy to report that the growth has been across the board on -- we have 72 teams, the newer ones and the ones from the beginning.

So, our -- not that we're making any projections, but we expect to continue to have deposit growth for the remainder of this year into 2011. It's hard to predict where we will end up because the first six months of this year, we had $1.25 billion in growth. And last year, we had $1.8 billion. So we had, in a year and a half, 18 months, $3 billion from deposit growth. Not sure I could ever promise you that we would be duplicating that over the next 18 months, but we're still seeing quite a bit of opportunity.

What we would like to see more of is the DDA growth. What we've been seeing is that a lot of the interest-bearing comes before the DDA, the operating accounts. So, what we would like to see in the mix certainly helps the net interest margin, there would be more DDA growth. So that's what we're looking forward to in the next two quarters.

Okay, great. Thank you.

(Operator Instructions). Jeff Bernstein, AH Lisanti Capital Growth.

It's a nice quarter. I like the loan growth. Can you give us a little bit of color on that? I guess Bob [Knackelson] is expecting 40% growth in transactions in the New York market in the second half of the year. And it's off a low base, but a little activity perking up there. So, can you talk about that a little bit?

Yes, most of the loan growth we continue to see coming out of the CRE arena in the (technical difficulty) family loans (technical difficulty) continue to bring the loans over that are [rolling] off of the book predecessor banks.

We're starting to see C&I open up a little bit this quarter. We're starting to see some C&I opportunities. But the first six months of this year it's been choppy on that front still. It doesn't seem like our clients are looking to pull down their lines and grow their inventories and produce product quite yet, given the environment that we're operating in. But we are starting to see some opportunities on that front.

Great. Thanks.

Just -- if we look at the rest of the year, it's difficult to predict. Early on, I think actually in the first -- with the first quarter's conference call, we had said that we would have loan growth in excess of, in the second quarter of what we had in the first quarter. That went well for a little while in the second quarter and then it seemed to slow down. And we had some paydowns and some other loans that paid us back.

And then, loan growth started to pick up again really in June, and that's why we're looking for some benefit in the margin there, where we grew $100 million out of the $195 million in June. So, it's a choppy environment right now on the loan front and it's difficult to predict.

Looking at the third quarter, we've had good growth so far. However, the month of August is typically very dead for loan growth. So we don't expect much coming out of there. So we really don't want to get into predicting what the level of growth will be this quarter, but we will have growth.

And, you guys have talked about potentially working with some of your larger clients to finance them buying discounted notes. Has that gotten any traction at all?

Probably less than a handful at the moment, but they know that we're out there should something -- an opportunity arise. Within our space of what we do, in dollars up to around the $25 million, $30 million level, we believe we will get opportunities because they know that we're in the market.

That's great. Thanks very much.

Peyton Green, Sterne Agee.

Actually my question has been asked and answered. Thank you very much.

Tom Alonso, Macquarie.

Thanks for taking the follow-up, guys. Just real quick, just a couple I guess of numbers questions. What percentage of your portfolio is floating rate?

About 31%.

Okay. And of that, what has floors? Do you know off the top of your head? (multiple speakers). Excuse me?

Roughly half of the 31%.

Okay, great. Okay. That's all I had. Thanks, guys.

Christopher Nolan, Maxim Group.

Any update to the deposit growth guides that you gave earlier in the year? I wasn't quite sure if you mentioned it earlier.

No; we actually essentially blew away the projections that we gave. So, we're not at this moment giving any projections on the growth. What I had said earlier is we didn't expect that we would have $3 billion growth in an 18-month period. It's very hard, Jack, because we have a few factors.

We have the interest rates being so low or nonexistent in treasury funds and treasury bills, and you are getting an overflow from that because clients are looking for some rates. So you get some excess deposits from your existing clients.

Those that are in the real estate market are flush with cash, so they are not investing at the moment. You have some excess dollars there.

Now, what will be good news is if they decide to invest and they seek projects that they want to buy or buildings that they want to buy, hopefully for us, even though they will use some of the deposit money for their equity piece, they will be doing a loan with us. So that will help us on the asset side.

So there's too many factors that are unknown to try to project the remainder of the year. We just -- all we will say is we will continue to have growth.

Also, are you getting any pushback from clients who are seeking longer terms? I know you guys are typically five-year lenders, to getting clients who --

Yes, we are -- I wouldn't say a lot of pushback, but we have been asked about doing ten-year deals and seven-year deals, and we are avoiding that as much as we can.

Great. And on the operating expenses, as I recall, you guys were guiding for around 18% to 20% year over year. Is that still a range to work with?

I think that's a conservative range to work with. Because if you back out the one-time FDIC special assessment that happened in the second quarter of last year, we're up about 16.5% second quarter over second quarter. So I think it will be in that arena going forward.

Great. Thanks for taking my follow-up.

(Operator Instructions). Gary Townsend, Hill-Townsend Capital.

Good morning. How are you? Have you noticed any noteworthy changes in competitive behavior in the past quarter, either on the loan or deposit side?

Interestingly enough, on the loan side, we've seen -- on commercial real estate, some competitors, particularly savings banks, going sub 5% on five-year deals, which is something we would not want to do.

On the C&I side, we've seen some of the bigger institutions having rates in the 3% range, things tied to LIBOR, and that's something we don't want to participate in. Not a lot of, but I'm just kind of giving you some anecdotal things that we have seen.

On the deposit side, we've seen the main -- the big institutions, the too big to fail, really dropping their rates, which -- but the banks that we're taking the deposit from, the deposits from, like a Capital One or a TD Bank, where we've hired a number of people from more recently, they are keeping their rates for their quality clients at a higher level, which makes it a little bit more difficult for us.

But, on the whole, we're seeing service levels really deteriorate at some of the other institutions, which is allowing our bankers, which really thrive on (technical difficulty) service that they give to take away business, hence a $3 billion growth in a year and a half.

And the service declines are due to reduction in personnel levels at competitors? Or are they giving up products or services? Or how are they approaching it?

That's a great question. And I'm not so sure what the answer is. I will tell you, anecdotally, the things we're hearing is that some of the bigger institutions are flush with deposits, and they're not always treating their higher-deposit-level clients the way they need to be treated, and clearly the way we treat them. And that has certainly driven some of the newer business that we're getting.

I'm not quite sure. I haven't -- I don't think the reductions in personnel have occurred at the competitors that we're taking business from for those types of clients.

Thank you, Joe.

(Operator Instructions). Bruce Harting, Barclays.

Do you have any sense of the addressable market? Your growth has been great. And in the New York metro area, is there any data on the market segment that you target to suggest -- or do you sense any slowdown in the growth rate coming in a year or two? Or is it a pretty deep well of the kind of customers you are tapping?

I mean playing off the comment you made that you're in the sweet spot relative to the legislation, it really doesn't touch you and that you are not in the mass market for retail deposits. And Joe, if you did -- if, say, in a year or two you saw the competition level for that market segment getting such that you felt you tapped out a pretty big part of it, would you move geographically? Or I doubt you would change strategy in terms of your target market, but maybe you can just address that. Thanks.

Yes; okay, Bruce. The well is very deep. The New York market, including New York Westchester, and then also on Long Island, both Nassau and Suffolk counties, is by far, by far, are the largest market in the country for businesses that employ less than 500 people, which are primarily privately owned businesses. It's also, by far, the largest deposit market in the country. That includes all deposits -- all segments by 3 times the number two market. So, for us, it's a matter of whether we execute.

The market is there. Our market share is less than 1%, so we really can grow the business if we properly execute. Should, at some point, that dry up, well, we have an opportunity to expand in New Jersey and in Connecticut because those markets are fairly large; at least geographically, those that are close to the New York metropolitan area. So, we don't see a change at least in our business plan in the foreseeable future. Thanks, Bruce.

It would seem that -- I'm trying to get off my speaker here, but I don't know if I'm -- but it would seem as though none of the CARD Act or overdraft rule changes from the Fed really impact the kind of relationship you have with your customers. Is that what you're saying?

We truly believe we're largely unaffected by the legislation, and we hope that while others are concentrating on it, that will be an opportunity for us to continue to take some more business.

Okay.

(Operator Instructions). We have no further audio questions at this time. I would like to turn the conference back over to Mr. DePaolo for any closing statements.

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. Mitch, I'll turn it back to you for closing.

Thank you, sir. Ladies and gentlemen, this concludes the Signature Bank's fiscal 2010 second-quarter results conference call. A replay of this conference is available via phone or Signature Bank's website at www.SignatureNY.com. Thank you for using ACT Conferencing, and you may now disconnect.