Synovus Financial Corp (SNV) 2002 Q2 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the Synovus second-quarter year 2002 earnings conference call.

At this time, all participants have been placed on a listen-only mode and we will open the floor for your questions and comments following the presentation.

I would now like to turn the floor over to Mr. Jim Blanchard, chairman and chief executive officer of Synovus.

Sir, please begin.

Thank you very much, and good afternoon, everybody.

We're delighted to have you here, and again, we have a room full of our executive team that are here for the call and prepared to be a participant in the questions that you might have.

I thought I might start with a telephone conversation I had about 15 minutes ago.

Steve Bartlett, the head of the financial services roundtable, was calling around just checking with executives on the economy and the [Sarbanes] bill and a lot of the issues that are floating around, and he finally asked me what I thought, and I said, "You know, one of the things that I've noticed in the past 60 days that I haven't heard anybody say anything good about anybody or anything."

And if you think about it, we got an economy that is suspect, we have terrorism and war and corporate confidence, and I don't know where the cheerleaders are, but they're really quiet right knew and I think everybody is afraid to stick their head up out of the hole.

That was - I was encouraged because he thinks the [Sarbanes] bill will be passed before August, and that the president will sign it immediately, and I frankly think that that will be a good thing.

It will - it will get that behind us and maybe even then the president can maybe be a little bit of a cheerleader for the country.

If you think about it, we always got at least somebody out there, and right now I think it's - it is noticeably absent.

I don't intend to be a cheerleader today for Synovus, but I'm going to break that mold because we got too many good things happening, too many good things to report.

I hope you have seen our news release, and I thought maybe the best place to start prior to getting into the normal highlights that we would have would be just to hit on what I would call the good things that happened in the second quarter and in the first half of 2002.

The first good thing is that our second-quarter earnings hit our target of 29 cents, up 13.6% in net income and 12% in EPS, and very much on target for us to accomplish our aspiration for the entire year, and that's at least a 15% increase in EPS.

In addition to that, return on assets for the quarter was 205, and our return on equity was 19.4.

Our return on assets was up from 2% last year in the second quarter.

Our return on equity was just a little bit down, but our equity account, our shareholders' equity, is a million - a billion eight now, and that represents about 10-and-a-half percent of quarter-end assets.

Which is an extremely strong capital account.

The list goes on.

Our loans up 13.8% in the quarter compared to a year ago second quarter, and on a linked quarter basis, they're up 15.9% annualized, and that's the second highest dollar increase in our loans in the history of Synovus.

And all with continued strong quality indicators in every category, and we'll get into that in some detail.

24 of our 38 banks have reported loan growth rates in excess of 10%.

Core deposits growth was up 11.8%.

Our net interest margin was 4.71%.

That's up 10 basis points over the second quarter of last year.

Financial management services revenues were up 13.9% in the quarter, and on a year-to-year basis, up 16.3%.

We continue to make what I consider to be extremely good progress in our expense management.

Our normalized efficiency ratio, for example, in the second quarter was 52%.

The actual was even less than that, and I'll go into some detail on that as well.

Our fundamental G and A expense growth in this company is 5%.

On the total systems side of the house, we also had a lot of good news in yesterday's announcement and in their conference call yesterday afternoon.

I think it's right incredible, but our consumer and our commercial accounts on file at TSYS grew 16.4% and 14.4%, respectively.

We improved our profit margin for the first six months to 16.4%, up from 15.3% a year ago.

Rick also announced that we had a signed letter of intent to process 500,000 card accounts from Barclay card, which of course is one of Europe's largest consumer credit card issuers.

This is a great breakthrough for us, and we're excited about that new relationship.

Our international accounts, by the way, on file grew 25.4% during the second quarter, and we're expanding our international sales efforts as he announced yesterday by opening an office in Italy.

Let me go into some more detail now on your normal highlights that we would - that we'll cover in this call, to clarify some of the data you received and certainly subject to your questions.

Financial services, which we formerly referred to as banking - it includes everything that's not total system - for the quarter, the net income there was 61.5 million, up 14% over the prior year.

On the banking side of the house, return on assets was 1.52%.

That's up from 1.48 last year.

And return on equity was 18.6% compared to 18.7 a year ago.

Again, due to the increased strength of the capital account.

On the margin, our net interest margin was fundamentally very strong during the second quarter at 471.

That's up from 461 in the second quarter last year.

And that improvement was primarily driven by a continued decline in our effective cost of funds.

The second quarter margin of 471 was a six basis point decline from the first quarter of 2002, when it was 477, and that decline is primarily the result of earning asset growth consisting mostly of prime rate lending, prime rate based floating rate loans, and this is a phenomenon I assume you're seeing in other places, but normally in this part of the cycle, people are looking to lock in lower - the fixed rate loan at these historical low levels, but we get the impression people are really enamored with these current low rates and are really opting for floating-rate loans.

I might add - and this is a great, I think, strength going forward - that these floating-rate loans will really serve us well when short-term rates do begin to increase from these historically low levels.

At the current prime rate, and under the current set of facts, we expect our margin to continue to be strong throughout the remainder of this year, and we're - we're talking about approximately in the 4.7% range, and that's still mighty strong, even by our standards.

We frankly, in our forecasting for the year, had anticipated at least a rate increase or so before this year is over, and I think that would have strengthened this number, but we're not expecting that prime rate increase at this point.

It looks like the economic conditions are such that these low rates are going to continue.

On the deposit side of the house, our growth rate continued very solid, as it has been now since the middle of 2000.

Compared to a year ago, core deposits grew by 11.8%, and that was led primarily by money market accounts which grew 32.8%.

On a linked quarter basis, core deposits increased 13.8% on an annualized basis, and that was led, again, by robust growth in money market and demand deposit balances.

On the loan side, we think the news is equally good.

Loans increased by 1.6 billion, or 13.8% over the prior year.

On a linked quarter basis, they increased 502 million, and that's an annualized growth rate of 15.9%.

I mentioned that a year ago - compared to a year ago, 24 of our 38 banks have reported loan growth over 10%, and on a sequential quarter basis, that was the case with 27 of our banks.

We continue to benefit from a strong real estate sector in our larger markets, as well as strength in the coastal regions of Georgia and Florida.

As all of you are very well aware, these loans that are growing are very diversified by geography, by industry, and by loan type.

On asset quality, our charge-offs for the quarter were higher than they have been for the last several quarters, but our asset quality remains extremely strong during the second quarter.

Non-performing assets were .57 at quarter end.

That's down one basis point from the .58 in the previous quarter.

We basically had one significant charge-off of a trucking company in the quarter, and one significant addition to the non-performers that ended up with non-performers at .57, down a basis point from the previous quarter.

Our provision expense was $20 million for the quarter.

That's up 51.7% from a year ago.

And that covered net charge-offs by 1.38 times, and the increase in the provision expense was primarily due to, of course, the higher charge-offs as well as the robust loan growth.

Year-to-date, net charge-offs were .37 compared to .26 a year ago, and the provision expense year-to-date is - was 33 million.

That's up 37% from a year ago, and it covers net charge-offs by 1.41 times.

The alliance for loan losses was 137 at quarter end, and that covered 336% of non-performing loans.

Our coverage in the first quarter of '02 was 313%, and in the fourth quarter of '01, it was 331%.

So a higher coverage rate at the end of this quarter than in the previous two quarters.

Now, past dues over 90 days were .26 at quarter end.

They were .17 at the end of the first quarter, and they were .34 at the end of the first half - the end of the second quarter last year.

So up a little from the first quarter, down from the second quarter of a year ago.

That was on 90-day past dues.

And on 30-day past dues, 121 - 1.21 at June 30th, 1.02 at March 31st, and 1.23 at the end of June a year ago.

So the same phenomenon.

Up a little from the first quarter, down from the second quarter of last year.

Our current outlook indicates to us strongly that charge-offs will be lower during the second half of this year and that all of our credit qualities will remain strong.

That's important to us, as you know, and important to everybody, and I think these numbers certainly represent great strength as far as quality.

Fee income for the quarter in financial services or formerly - you know, the whole banking operation, non-interest income was actually down 7.1% as compared to the second quarter last year, and that's due, primarily, to a $8.4 million impairment loss in a private equity investment.

Excluding that impairment loss, non-interest income is up 6.7% over the prior year.

Our mortgage revenues were down 17% compared to the second quarter.

That's after being up 83% last year.

We think that sort of continuation of strength in the mortgage revenue is incredible, in spite of the fact that they're certainly down.

And financial management services and insurance revenues increased 13.9% over the second quarter last year, and service charges on deposits increased 8.9%.

Financial services fee income as a percentage of total revenues - and that's excluding securities gains and losses, as well as this impairment loss - was 26.68% for the quarter.

Let me touch on this as a year-to-date, too, because there's another moving part in the year-to-date numbers that you may remember and I want to make sure you do.

On a year-to-date basis, financial services reported non-interest income was down 5.2%, as compared to the prior year.

Now, keep in mind that in the first six months of 2001, we had a $10 million pretax gain from the sale of our ownership in the star system ATM network.

Slugged that gain and excluding the impairment loss, non-interest income is up 10.7% over the prior year.

I think pro formas and "but for's" maybe aren't as popular today as they have been in the past, but I think it's important for you to know that on a fundamental basis, we consider that strong double-digit growth in the first half.

For the first half, mortgage revenues were down 7.9 compared to the prior year, and that's after being up 90% in 2001 for the first half.

Financial management services and insurance revenues were up 16.3% over the same period last year, and service charges on deposits increased 9.8 for the year-to-date look.

So let's talk about G and A expenses.

For the quarter, we reported expenses were down 1.3% compared to the same period last year, and the reported efficiency ratio for the quarter is 49.97%.

Many of you will know that, of course, we've been saying we were heading to 50.

This is the first time we've broken below 50.

I've already, of course, indicated that on a normalized basis, it's a little higher than that, but let me break it down into some more detail.

By the way, the 49.97 is compared to 54.43 for the second quarter of last year.

For year-to-date G and A expenses are up 4.3 compared to the same period a year ago, and the efficiency ratio year-to-date is 51.82% compared to 54.46.

Any way you cut it, our efficiency ratio is showing continued improvement, as it has for the last decade.

The current quarter results also reflect a reduction in incentive compensation expense.

As you know, from a couple of years ago, our philosophy is to make our numbers before we make incentive payments, and that is reduced in the second quarter primarily as a result of this extraordinary charge-off, the extraordinary provision, and the write-down in the investment.

I think we continue to make incredible progress in expense management.

Again, normalized efficiency ratio, assuming normal incentive pay levels, is 52%.

Without it, just below 50.

Another indicator, I think, in our success in expense control is our head count trend.

This may be more detail than you want to know, but it's very important to us and I think it's important to understanding the success in our efficiency ratio.

Since year-end 1999, our total financial services assets have grown by over 30%, while head count has grown only 3%.

The back-office support group has remained flat.

No growth.

The modest head count increase that we have experienced since '99 has been in areas where we've experienced significant growth, such as our banks in high-growth markets, as well as our financial management services unit, and that's, of course, where we've been adding talent to make this unit our third pillar of strength.

There's no question in my mind that that notion is validated now in our company, and we will see the fruits of revenue growth and profitability contribution from financial management services for a long, long time to come.

I'll touch very briefly on TSYS again.

Some of the highlights, I've given you, but TSYS reported net income of 29 million, a 13-cent increase over the same period last year.

Diluted earnings for the quarter were 15 cents, up 11.9, and revenues excluding reimbursable items increased 9.8% compared to a year ago.

Again, the accomplishments were significant.

Accounts on file growing, both commercial and consumer, and the profit margin increasing from 16.4 - or to 16.4, a signed letter of intent from Barclay card, the opening of an office in Italy, and I thought it was worth reading in case you didn't see it, the last paragraph of Rick's report, where he - I think in a very upbeat mode - said, "We have the best technology, the best people and service in the industry to grow our core business in North America and abroad.

Our prospect list is the best it's ever been, and this is an exciting time at TSYS."

Lastly, let me say again that we certainly expect at least 15% growth in earnings per share in 2002, and we expect to be in the 15 to 18% range of earnings growth in 2003.

I hope that if you feel like that you haven't heard any good news in a while, that maybe some of that will be considered good news for you.

I think the moving parts are - I primarily think in terms of one significant charge-off and one significant addition to the non-performing list.

Think of the write-down in the investment.

Think of a reduction in incentive pay.

And think of a merchant fraud that I think I've mentioned that would have contributed extraordinary expense to the quarter that is now basically resolved.

Other than those few moving parts that primarily kind of net out, it was a strong fundamental quarter with strong growth and strong quality.

And I'm going to stop there and hopefully we'll be able to field the questions that you would have.

Thank you, Mr. Blanchard.

Ladies and gentlemen, the floor is now open for questions.

If you have any questions or comments, please press the numbers 1, followed by 4, on your touch-tone telephone at this time.

Pressing 14 a second time will remove you from the queue, should your question be answered.

Lastly, we do ask that while posing your question, that you please pick up your handset if listening on a speakerphone for optimum sound quality.

Please hold one moment while we poll for questions.

Mr. Blanchard, your first question is coming from Andrea Yow of Lehman Brothers.

Ma'am, your line is live.

Thank you.

It's actually Jason Goldberg.

Good afternoon, guys.

Hi, Jason.

Can you maybe just give us more terms in terms of your venture capital portfolio?

You know, how large is it, and, you know, do you kind of expect future write-downs, at least in the year term?

It's - Jason - modestly small.

About 25% of this write-down was actually in the venture capital company that we formed.

The other was in the Synovus portfolio.

It represented a financial services company, an internet-type, represented a customer of TSYS.

I obviously won't name the name, but I think Tommy Prescott's color to the board today is probably the best way to say it.

This probably ought to be just considered one of the smallest signing bonuses we've ever had to pay for a significant total system customer, both now and for the future.

But I think at this point in time, it shouldn't concern you that you could expect to hear further write-downs in the venture capital portfolio.

And then - okay.

Thank you.

And then secondly, can you give us more color in terms of just, you know, the increase in net charge-offs and just why you have confidence that credit quality is going to improve in the second half?

Yes.

We basically are constantly on top of our loan portfolio.

We are constantly reviewing it by not just loan administration and credit people, but top executives in the company.

Obviously, in the kind of time you're in, everybody stays on their toes about credit quality.

I think even with the increased charge-off that we experienced in the second quarter, you'd probably say - I hope you'd agree that's still a good number.

For us, it's - it's historically higher, but we fully expect that based on everything we know, that the third quarter and the fourth quarter will represent more nearly the charge-off level that we saw in the first quarter and the quarters of last year in 2001.

And again, you're talking about one charge-off, one addition to the non-performers that made these numbers move, and we're not expecting that to recur in the third and the fourth quarter.

Great.

Thank you.

Yes, sir.

Thank you for the question.

Jason, let me add one thing.

Sure.

And these numbers may not impress anybody, but I think it's pretty significant that our net - our non-performing asset right now is .57 and of course expecting it to go lower.

It is the lowest peak - and I'm going to declare to you that we believe it's our peak - in any recession that we've ever experienced in our careers here among the active executives.

For example, that number in '90/'91 was over 1-and-a-half percent.

That number in 1982 was over 2%.

And I just - I think what that says to us is, as we've gotten bigger, then I think we've gotten more professional, we've gotten better at what we do, we have a better grip on our credit quality, and I think if you look historically from the decade of the '90s right on up to today's number, it would represent the kind of quality that would indicate that this is not typical and not a trend.

But I mean I think it's fair for you and others to kind of stay tuned to what that number is in the third quarter and the fourth quarter and beyond, and I think you'll be satisfied that we've assessed it properly at this point in time.

Good point.

Thank you.

Thank you.

Thank you.

Your next question is coming from Dick Paulson of Paulson securities.

Sir, your line is live.

Mr. Paulson, do you have a question, sir?

Yes.

I was taking a look at the personnel expenses net of the TSYS personnel expenses, and it looks like they declined 20% since the fourth quarter of last year and about 9% since the quarter - same quarter last year.

How is that possible, given your loans and deposits have been increasing at a pretty good clip?

Well, as I indicated earlier, the base head count has remained almost flat, but the reduction that you're referring to is the incentive comp that we basically have not accrued because of our policy of we're going to meet our numbers before we pay incentives, and that is what we did in 2000.

We were - we were able to pay full incentives last year to those that made - individual companies that made their numbers, and I'm optimistic about the strength we'll have in the second quarter of this year to make our 15% EPS.

But that's the explanation for the decline in the expense.

And has retention been a problem, given that pay has gone down 20%?

Well, actually, I mean that's a phenomenon that is ongoing and basically you settle up there at year-end.

The answer, though, is no.

Retention is not a problem.

I think we're considered to be a great place to work, and our turnover is very low.

Thank you.

Thank you.

Thank you.

Your next question is coming from Christopher [Moniak] of SunTrust Robinson Humphrey.

Sir, your line is live.

Hi, Jim.

Hey, how you doing.

Good.

Thanks.

Just wanted to get some additional information on the trust business.

Can you talk about how your fees are booked in terms of timing in the quarter and then also a little drill-down on assets under management and perhaps the positive inflows the last 90 days?

Sonny, you want to deal with that question?

Yes.

This is Sonny vice chairman, Chris.

Chris, in terms of booking the of the fees.

Yes.

We generally do not book them until we have received them, and if - while we'd like to be able to book them, we generally don't accrue those until we know we're going to receive them.

So in terms - was it what specifically about trust did you want - were you addressing?

I was curious if you're pricing off of the last quarter's value, if you're pricing them every month or sort of as the market goes up and down how that impacts your booking of fees.

It's actually both.

Okay.

So is there any lag in terms of when you would see a decline on fees, just because the market comes down 15% in the last several weeks?

No, there wouldn't be any lag.

Okay.

Fair enough.

And how about new business inflows over the last quarter?

New assets inflows?

Is that what you're asking.

Yes, sir.

Okay.

We have - we have increased - again, the assets under management number will vary as the market goes down.

As you know, we have some concentrations of stock that would - that would vary, but the assets under management are about the same as they were at the end of the last quarter.

Year-to-date, they're up about over a million dollars.

I mean a billion dollars.

But in terms of quarter-to-quarter, they're about the same simply because the variations in the market.

Okay.

How about the pipeline for new business in terms of things you have in the works for new flows from customers?

Right.

The pipeline is very significant.

That's one of the things that is so encouraging about what we're doing.

You know, and you're familiar with this, Chris, that we have made some significant inroads into the Atlanta market.

We have made some significant inroads in some of our larger markets where there are opportunities in South Carolina and Alabama and in Florida, and especially in our family asset management area, which deals with some of the larger clients that we would have, the pipeline is - is very good and it's very full, and what we are optimistic about - and this is really where we have based our projections for the year - is the second half of the year should bring a number of those clients on board.

We have signed some significant clients in the Atlanta area in the last few months, and we have - we expect a number more of those, and that's both at the [inaudible] level and at the trust level, and we have brought in some additional trust folks in our Atlanta market which, again, should help our presence there.

But in terms of pipeline, it - it looks very good and we are - we're very encouraged.

Some of that is coming from our affiliate banks, some of it coming from our folks in the financial management services area.

Also, the addition of [Globe Alt] which we announced recently will bring us additional opportunities and so we're looking for some good performance from [Globe Alt] in the second half of the year.

Great.

And the billion dollars of new assets from the last six months excludes [Globe Alt], correct.

Correct.

Super.

Great.

Thank you.

Thank you, Chris.

Thank you.

Your next question comes is coming from Jackie Reeves of Putnam.

Ma'am, your line is live.

Thank you.

Jim, I wanted to ask you about your comments on the beginning of the call about really not hearing anything too good in the general market versus, obviously, your strong loan growth and then maybe you can give us some color on the business commentary coming from your markets with respect to the future pipeline.

Thank you, Jackie.

How are you today?

I'm fine, thanks.

You know, I think it's - in the four states we're in, the economy hasn't been as bad as it has been in other places.

I don't think it's improving any greater here than it is in other places, but I don't think there's any question, Jackie, that the secret to our strong loan growth is, one, we're in good markets, but, two, we're able to win in the marketplace.

And I know there are other competitors in this same part of the region that have bemoaned the lack of growth.

That's not our experience and I think we're getting more than our share and I think it's clearly because of our decentralized approach.

We have presidents in banks and boards of directors, and we have units that have their own identity and people aren't lost in the crowd and they feel like they can make a difference and there's a high level of energy and excitement and enthusiasm and I believe our people have the empowerment to make deals and to serve customers and respond quickly.

And so we don't have to reach for loans.

We don't have to stretch.

We don't have to cut the rates.

And we don't have to drop the terms and conditions.

We're able to get out there and get more than our share because we have professional bankers who are equipped to do business.

And that's a great strength, and, you know, I think it's the color on why - why we've got a good news story in the midst of a lot of pretty mediocre stories.

Thanks, Jim.

Could you also comment on the pipeline expectations with respect to TSYS?

I wish I could do it specifically, but I - I can do it generally.

I think - you know, I - let me just give you a personal opinion that in my opinion, the market viewed way more negatively the TSYS news yesterday than they should have, but that's the market and there's nothing I can do about that.

We never can be specific about specific prospects and customers.

We're excited about Barclay as a great name.

We obviously are not opening an office in Italy just to hang out our hat and hope that something good happens.

We're still pursuing primarily the major issuers domestically and internationally, and I think the bottom line - this is just my take - we're optimistic about signing major issuers and I think the market must be more skeptical, and as I've told you and others for two years now, it's up to us to do it.

We got to sign them.

We got to convince them.

We got to announce it.

We got to get on with the conversion, enjoy the incredible fruits of that kind of renewed growth rate.

Thank you, Jim.

Thank you, Jackie.

And thank you.

Your next question is coming from Jefferson Harrell son of SunTrust Robertson Humphries.

Your line is now live.

Thanks.

My question has been answered.

I appreciate it.

Thank you.

Okay.

Your next question is coming from David George of A. G. Edwards.

Mr. George, your line is live.

Good afternoon, Jim.

How are you?

Fine, David.

How are you?

I'm doing just fine.

I was wondering if you could comment on the current rate sensitivity of your balance sheet as of quarter end and to what extent are you exposed to higher rates, should rates rise in the second half?

Well, we are practically neutral.

We are not betting on the rate movements.

Obviously, as I indicated, the - seems like the market direction is for people to want these floating rate loans at these very low levels, and that has nudged us down just ever so slightly on margin, will really be a favorable factor for us when rates begin to move up again, but we are - we are about as neutral as you can possibly be, and I think that's why, David, in that incredibly falling market last year, we were able to slightly improve our margin every quarter.

Now, we have slightly dropped in the two quarters of this year so far, and yet dropped only modestly and any further drop would be even lesser impact, but probably it will stabilize here and we'll finish the year about where we are.

And Jim, just a quick follow-up.

Sure.

On the - I guess in that vein, would you say that incrementally new loans being put on the books, are the majority of those floating rate or are you getting borrowers wanting to fix in, for example, commercial real estate deals on a five-year fixed type of a term basis?

Well, as I have mentioned David, we keep expecting people to want to take advantage of these low rates and lock in a longer-term fixed rate, but that's not what we're seeing.

And, you know, these are the lowest floating rates we've seen in 40 years and so it is - it must be just an intoxication by the borrower with the attractiveness of these rates that causing them to gravitate toward the floating rate.

It's not distorting our balanced position, but it's leaning that way.

The lean causes us to have a slightly less margin than we had modeled for the year, only slightly, but again, as - as win rates move up, it will have an even - an even better beneficial effect.

Thank you very much, Jim.

Thank you.

Thank you.

And if there will be any remaining questions or comments, please press the numbers 1, then 4, on your touch-tone telephone at this time, please.

Mr. Blanchard, I'm not showing any further questions in the queue.

Do you have any closing comments you'd like to finish with, sir?

Ever so briefly, I thank you again for your questions, your interest, your continued outlooks that we share with you.

I know this is a strenuous and difficult time for all of you in your assignments, as well as they are for everybody.

But we're committed here at this company to be at least one company, and there will be others, but we're committed to be a company that keeps giving you good news.

The good news in the second half will be even better than the first half.

We're certain of that.

We're as positive as you can be.

The events of the country, the economy, the incredible circumstances that exist around all of the corporate announcements that have occurred recently, and not to mention the war and the terrorism, continued concern about homeland security, I mean it creates an atmosphere and an environment that I think is - can be oppressive, but our people are upbeat, they're optimistic, they're out on the street, they're bringing in new customers.

I think we're improving the quality of our company every day.

We got the best talent on the field with the - at the executive level and out at the customer level than we've ever had in our history, and we - I don't mean this trite, but we're not going to join in all this gloom and pessimism.

We going to keep our chin up and do good and try to make you and everybody that looks to us excited and proud of what we've done for them.

So that's where we are.

We're excited about you being on the call today.

We'll look forward to talking to you over the next day or two or three for more details, and just stay in touch and thanks again for being our friend.

Thank you, Mr. Blanchard, and thank you, ladies and gentlemen.

That does conclude Synovus' second quarter year 2002 earnings release conference call.

You may disconnect your phone lines at this time and have a great day.

Thank you for your participation.