Synovus Financial Corp (SNV) 2007 Q3 法說會逐字稿

Good afternoon ladies and gentlemen, and welcome to the third quarter earnings 2007 conference call for Synovus.

(OPERATOR INSTRUCTIONS).

It is now my pleasure to turn the floor over to your hose, Richard Anthony.

Sir, you may begin.

Thank you very much and I want to welcome each person on the line to our third quarter conference call.

We have distributed just in the last half hour two news releases.

One covering our performance for the third quarter, the other having to do with our announcement that we are spinning off our thesis, our 80% owned subsidiary company and I want to say a little about each of those press releases.

I do apologize for the short lead time you have had to, I guess, review the information but given the schedule of events today, this was the best way that we felt we should communicate with the public and we do welcome you into this call.

In performance, you'll hear a little bit more in a few minutes from Tommy Prescott and Fred Green but without a doubt the challenging credit environment has affected our performance.

You'll see we have announced excluding spin costs, earnings per share of $0.45 cents in the quarter which would be a 5.1% decline in that particular measure.

And we'll talk about the impact of several issues on that, one of which is the market down in Florida, concentrated in the Fort Myers, Cape Coral, Lehigh Acres territory there.

The impact of credit cost in those markets really which came from one of our banks, really impacted our charge off numbers by about 50%, so we'll come back to that in a few minutes.

I do want to say this about our spin decision.

We have been talking publicly about there potential event for over a year-and-a-half.

We've certainly taken quite a bit of time to analyze the issues and to involve our board in recent months in the decision-making process.

I'm confident that we have arrived at the right decision.

I'm excited about it, our team is excite, really on both sides of the company, TSYS as well as Synovus.

The primary benefit is going to be the strategic flexibility that comes from TSYS having access to its capital structure and to its currency to make acquisitions, but the two primary tests that we used all along had to do with strategic flexibility and creation of long-term shareholder value.

You can do I don't your -- your own calculations.

But the banking part of our business is clearly undervalued right now, if you break the numbers down and look at the TSYS market value and the resulting banking and the resulting baking only market cap.

So we see some opportunity for this to correct itself over time.

There was a $600 million dividend, special dividend payment from TSYS that was announced, $485 million of which will come to Synovus as the 80.8% owner of that company.

We've got a great leadership team at TSYS they have proven themselves over many years.

They continue to prove themselves in a positive way with excellent third quarter results, and having managed their way through their own challenges over the past year to year-and-a-half, as I said, they are energized by the prospects of being able to tackle a more diversified approach, expansion and growth in the future.

Those are my thoughts on performance and the spin decision.

We will come back to both of these subjects later.

We will have a question-and-answer session following the presentations that will come next.

Tommy Prescott will now go over the financial results.

He will be followed by Fred Green and then Phil Tomlinson will talk about TSYS and recent financial results there.

Tommy.

Thank you, Richard, and good afternoon to everyone.

I will remind you that we'll be making forward-looking statements today that are subject to risks and uncertainties.

Factors that could cause those results to differ materially from these forward-looking statements are set forth in our public reports and our file with SEC.

Richard mentioned the third quarters earnings briefly but on a consolidated basis, the earnings were $142 million down $12 million from last year.

That represents $0.45 cents per share before the spin cost and that compare to $0.47 cents in the third quarter of 2006.

We'll be talking today about these results and we'll generally exclude the spin costs from the consolidated results.

Just a reminder there, to date, we have spent about $6 million between TSYS and Synovus on the spin costs, primarily to the third party advisors.

For the year so far, we have reported earnings before the spin cost of $457.6 million.

That is up 3.7% over last year with earnings per share of $1.39 for the first nine months of this year.

I'm going to now go into some of the financial services highlights and you'll hear more from Fred later before he turns it over to Phil to review TSYS.

The financial service story is really about the credit costs.

Those were the key driver for the quarter with a low loss provision of $59 million pressuring our third quarter performance.

The provision was fueled by higher charge offs of 51 basis points and higher reserves that were necessitated by the negative migration of credit risk rates and also specific reserves on certain loans.

And you'll hear more later about the large part of this credit story was centered around several specific developments in the West Florida markets.

That interest income was $294.2 million for the quarter, unchanged from last year.

Of course, this was lifted by the year over year earning asset growth that we've had but pressured by the 28 basis point margin decline from a year ago.

The margin for the third quarter was 402, that's down three basis points from second quarter.

That was exclusively due to the higher level of interest charge offs and higher nonperforming asset levels and the pressure that comes on the margin from those elements.

Otherwise, we were able to stabilize the margin during the quarter as we pushed really hard on the price and primarily our funding costs.

Loans end of the quarter at $25.8 billion up 6.5% over last year with late quarter growth of $32 million or 3.6% on an annualized basis.

On a sequential quarter basis, commercial real estate loans declined about $8 million or 0.3%, and then C&I loans up $100 million or 3.8% and retail loans growing $138 million or 14% helped fueled the modest loan growth that we had during the quarter.

Core deposits into the quarter of $21.5 billion, up 3.3% over last year and down $270 million against last quarter driven by lower overall funding needs, seasonal weakness and run off of the higher-priced CDs.

Non-interest income was $106.2 million, up 18.9% over last year.

And was $290 million for the year so far at 10.8%.

The third quarter includes an almost $11 million pre-tax gain from our venture capital line of business and a $3 million pre-tax gain from the sale of our MasterCard stock holdings.

Service charges on deposits remained relatively flat versus last year.

Financial management service revenues grew by 12.3% for the quarter.

The growth was led by a $1.6 million or 25% increase in brokerage revenues and $1.4 million increase in our customer swap activities.

Mortgage revenues has shown stress in the current environment, declining by $2.5 million or 29% compared to the same quarter a year ago.

But in spite of these challenges, our mortgage company has recorded a net profit for the year of $1 million and has really been able to keep some traction going on, even against this harsh environment, because of continuing to better operate the company and to -- to really integrate the distribution channels in a better way with all our banks.

Expenses have grown modestly and excluding the spin-related costs that are 4.8% over last year and for the quarter - I'm sorry, 4.8% for the quarter, 5.7% for the year to date.

The cost that relate to the 20 new branches that have come online since one year ago have added expenses, obviously but some of that has been offset by tight management of head count otherwise and also lower performance-based pay.

The results for the quarter include a $3 million reduction in income tax reserves within the financial services segment incident to a settlement of a routine audit.

Just an update on our outlook for the remaining quarter and for 2007, based on the credit events that occurred during the third quarter, we currently believe our 2000 earnings per share before the costs related to the TSYS spinoff will be approximately $1.85.

This assumes a 4.04% annual margin, net charge off ratio for the year of approximately 34 basis points and mid single digit loan growth and of course is $1.85 of those exclude the spin costs, just to be sure you remember that.

So I'm now going to turn it over to Fred Green for his comments.

Thank you, Tommy.

We began this year knowing the challenges we would face would be balance sheet, growth margin and credit.

Tommy discussed the numbers but let me share a little more background on how we faired in these three challenges.

Loan growth this quarter is lower than historical standards but given our strategies and the current economic climate, we feel the growth rates are appropriate.

The hallmark of both our retail and commercial strategies was to have more diversity in our portfolio and we are accomplishing that, the growth we had in the retail, and C&I portfolio is more than offset the intentional reduction in our CRE portfolio.

On margin, even with a greater than expected rate reduction by the Fed, it did stabilize this quarter.

We achieved the stabilization by implementing market-by-market, product-by-product, price changes on deposits.

We sacrificed core deposit growth primarily through reducing the higher priced promotional type deposits.

The area that we've not done well on is the credit challenge.

Tommy just shared some of the numbers and I want to take a few minutes going into those in more detail.

Historically, we've never discussed any of our banks but, because of its impact on our company and the unique situation, I'm going to stray from our normal approach.

Eighteen months ago, we closed on the acquisition of First Florida Bank in Naples, Florida.

We liked the bank, we liked the market, we liked the people but we wanted to reduce their significant concentration in single-family construction loans.

We began liquidated that portfolio upon acquisition and reduced the numbers and the dollars from around $900 million when we acquired - excuse me $900 loans in $220 million in commitments when we acquired the bank to 500 loans and around $125 million in commitments at year end, to around 300 loans and $62 million in commitments at this quarter end.

Since year end and more dramatically this quarter, home prices started falling, mortgage markets dried up, and we have aggressively recognized the softness and the deterioration in that market.

Of the slightly over 300 individual construction loans to individual borrowers who had prequalified for mortgages upon the completion of the house, we conducted a 100% audit, focusing on each home's current value and each borrower's ability and desire to repay the construction loan with the permanent mortgage.

Taking the most aggressive approach possible this quarter in our first Florida subsidiary, we took a provision expense of $21.3 million and we increased our reserves in that bank about $12.4 million.

We moved $42.6 million to nonperforming, nonaccrual status, and we charged off $17 million.

I singled First Florida out not only because of its significant impact this quarter but also because of the markets's price depreciation, and that is the only bank in our system with this concentration of single family construction loans to second home speculative buyers.

To speak to its impact on Synovus without the moves that we have taken in First Florida in Naples, the rest of our banking organization charged off around $16 million or of 0.25% of loans, our NPAs would have been around 1% and the provision expense would have been $21 million less.

As to the rest of our banking operation as an ongoing practice, we stressed our portfolio by periodically evaluating loans compared to their original underwriting assumptions.

Because of the slow down in housing in general, we have looked at our residential construction and development loans over a million dollars and compared current absorption rates, price points, and borrowers's liquidity to the original underwriting assumption.

Our risk grades migrate and as they migrate, we adjust reserves accordingly.

As an example of our aggressive approach of recognizing and working through credits, this past quarter we moved three large credits.

All three were three were 30 days and less past due to nonperforming status.

One was in the panhandle of Florida, two were in south Atlanta, all were residential construction and development loans.

In the aggregate, these three loans again that were 30 days or less past due totaled $37.5 million and we reserved appropriately for these loans.

Going forward, our approach is to continue to aggressively identify any problems in the portfolio to assess the risk and exposure of these problems, to account for and reserve for the risk, and to very quickly resolve the problems.

During the Q & A section, Mark Holladay and I will be happy to answer any questions on these issues or any others, and with that let me now turn it over to Phil.

Thank you, Fred.

We had our earnings call Tuesday morning.

We did our turnout release loose Monday night and frankly, we had a great quarter.

Our revenues before reimbursables increased 4.9% for the quarter and up 5.

1% year to date.

Our net income increased 26.7% for the quarter and we are up 18.3% year to date.

Our operating income increased to 26.2% for the quarter and 19.2% year to date.

I think the big story is the operating income has increased in the last 9 months 300 basis points and that adds about $30 million in operating income to TSYS, and it's just shows I think that we really do have a good handle on our expense and we are doing well there.

Our earnings per share increased 26.5% from 26.5% to 35% for the quart and 18.4% to $0.97 year to date.

Internal revenue growth rate, organic growth rate as we call it, hit an all-time high of 15% and it's really been growing well.

So we - we are right on track as to where we expect it to be and I want to give you a couple of highlights on some new business and some things that happened to be going on in our business.

As you know, Royal Bank of Scotland is one of our largest customers and their acquisition of ABM-Amro, both of them are customers of ours and frankly we think that will be a good thing for us.

We think that as a result of that, we'll have the opportunity to pick up some more business from the new organization.

We also announced that we had signed nationwide, the world's largest building society in London, to manage their credit card portfolio and we're doing something a little different there that we have not quite done for anybody in our history.

We are really going to manage that portfolio from Ato Z.

We are going to manage credit, collections, customer service, settlement accounting, and based on the scope of services nationwide, we will rank among our top ten customers once they get converted.

We are very excited about that.

If you recall, we acquired Card&Check 18 months ago or so and as a result of that, we have recently inked a deal with Tinkoff Credit Systems in Moscow.

This is our first foray into Russia and we are excited about that.

We're going to supply the card management and authorization system for them.

They want to become the first monoline card issuer in Russia and focus exclusively on issuing credit cards.

We also in the UK launched a new money transfer card for Lloyds Bank.

It's called the Silver Account and it is a - it's really an innovative money transfer product primarily aimed at the growing number of immigrants living and working in the UK.

We also inked a deal with Commerce Bank in New Jersey.

They selected us to handle all their collections and recovery systems in the - for the entire bank.

We think that might turn into something new for us.

That's also an area that we have not ventured into before and something new for us.

I think there is a lot of possibilities there.

Our merchant processing companies signed an agreement with Veracity Payment Solutions head quartered in Atlanta to do merchant processing for them.

Our international business continues to form extremely well in the third quarter.

There was no exception.

International revenues increased 28% in the third quarter and 38% year to date.

Cup Data, our joint venture in China, continues to do very well.

We have now signed contracts with 38 banks or issuers in China.

In the last month, we have signed two letters of intent and hopefully, I can tell you who those are the next time we chat.

So we're feeling very good about what -- our momentum.

Obviously this time last year, we were struggling a bit but we think we are back on track and rolling again.

I'll speak just a minute on the spin.

We are - you know, I don't think we could have had a better parent over these years than Synovus.

From January, we've been together in this processing business for 25 years and it has been a -- it has been one of those partnerships that was frankly made in heaven.

We've learned a lot from each other and they've been a wonderful partner, and certainly we want to continue to have a wonderful and long-term relationship with them.

I think the spin, though, will certainly solidify our reputation and our perception in the market as a global leader in the industry.

I think it will help generate more interest in our vision and future opportunities.

We are -- I think that you have to look at this on a long-term basis.

We are certainly proud of our past but appreciate Synovus allowing us to be an independent company, and we think that we will provide an awful lot more strategic flexibility in all areas.

As I said earlier, we are working on our future and our strategies, and we feel like we are in pretty good shape.

We will have a conference call in the morning at 8:30 to kind of give you some more color on this and I would assume that all of you have probably gotten that e-mail by now for the telephone call.

Richard, I mean, that kind of concludes my report.

I'm happy to answer any questions later.

Phil, thank you very much.

I think at this time, we would all like to open the call up for questions and we invite them from the group.

(OPERATOR INSTRUCTIONS) First question from Nancy Bush.

Your line is live.

Good afternoon, guys.

Hey, Nancy.

Could you just tell us, give us a little bit more detail on the dividend that will be paid to you.

The $485 million.

Is that a pre-tax figure?

And you know, what are the thoughts about putting that to use?

Does that get paid out as a special dividend from the Synovus side?

Or is it, you know, going to be something else?

Nancy, let me say a little about that.

And perhaps Tommy will add to it.

I know he will.

$600million of course with the percentage of ownership takes our share to $485 million.

Right.

Basically, within our multi-bank holding company structure with our bank here, CBNT, being a clearing bank in so many ways for other affiliates, uses and operates with a high level of capital.

So initially, all of that capital will be injected into CBNT.

This will take our capital ratios up to a nice level and Tommy will give that to you in a minute.

But longer term, I'd say this well-capitalized position will give us the ability to engage in stock buy back activities at some point.

It will give us more flexibility in making acquisitions, using some cash in those situations.

Obviously, this particular issue is one that had to be negotiated between the TSYS special committee and the Synovus special committee and those deliberations went on for awhile here in recent times.

We think we arrived in exactly the right place.

The ability for TSYS to operate with this level of distribution, I think is clearly there.

So I'm confident that where we ended up was about right.

I'm going to get Tommy to share more specifics on those capital ratio as they will stand at the end of the year upon receipt of that dividend.

The tax piece you asked about, it's nontaxable of course to us, internally in Synovus.

Yes, that's correct.

Nancy just a little more color on the rational and what that does to capital.

As Richard said, the decision was about balance and we have not walk thesis to be overleveraged coming out of the chute.

We wanted them to have the capacity to accomplish their mission and we think they will.

And on the Synovus side, what we really trying to do was to steer, tier 1 capital to the right level and then once you look inside our capital mix, you'll see that we, over the years, have not had to do like the other banks and engage in hybrid offerings.

But you know, in the future, we'll certainly have the capacity to engage in hybrid instruments off of this capital account, and undertake whatever activities we need to do.

What's its acquisitions, share repurchases in the future or the like.

The tier one ratio coming out of the chute we estimate to be about 9.4%.

That is a level that we think is very healthy.

It's slightly above peers the way we viewed it but just likely, but we think it's appropriate as we consider the current banking environment and feel very good about the landing place on capital.

Okay.

Question for Mark.

I mean, you've got two projects in south Atlanta that went on nonperforming this quarter.

Can you just kind of give us your sort of best view of that market right now?

Getting worse?

Getting better?

You know, what's your view?

Nancy, I'll be glad to do that.

Really southwest Florida of the Naples area is the area that we see as being the weakest of all of our markets.

We got -- if you look at the top 285 MSA's, we've got 30 markets, 7 in the bottom third and they are all in West Florida.

But the worst is Cape Coral.

If you look at single family home sales, year over year, they are down 37%.

You know I think in the month of June sales were about 558 units.

Home prices year over year are 5.3.

But from the peak, you know, they are down 40%.

Did you ask for, I'm sorry.

You asked Atlanta?

Yes, I mean that's fine.

If you want to give us just kind of a, you know, a high view, but the one I was most specifically interested in was Atlanta.

Okay.

Well I'll talk about Atlanta.

I'll apologize.

I missed the question.

That's all right.

If you look if you go to Atlanta the market data there what we're seeing the third quarter single family starts were 37,869 units.

The closings were 42,683 units.

Closings year over year are down 19.4% in Atlanta.

The average single family sales price is now up 1.5%.

We have been seeing, you know, mid single digit appreciation that has come down.

The inventories are actually the physical units are coming down, Nancy.

They've come down from, they were at 41,510 units a year ago.

They are at 36,912 units now.

That is a function of the closings exceed the starts.

We got 10.3 months of housing inventory on the ground.

It hasn't really changed significantly since the last quarter.

About 10 months in south Atlanta and about 10.6 months in North Atlanta.The developed lot inventory, we really need to see sales rebound there.

Absorption rates are you know, continuing to rise because of the lowest sales.

Developed lot inventory is about 44 months in Atlanta.

And but one indicator we do see is that the future lot inventory is actually coming down now.

So that is a good indicator.

I think again the builders are doing the right things.

They are restricting growth.

You know we are still seeing net job growth for Atlanta at about 54,800 new jobs, year over year.

You know, I would tell you that the sales have not bounced back yet.

We are lacking for that.

You know, some of our bankers think that will be in the middle of the year.

Well we are just going to have to see.

But we are you know on the ground, talking to our customers, you know, keeping track and keeping a close eye on it.

Right.

This may seem kind of a farfetched question when it's applied to Atlanta but, I mean, they don't have any water, essentially.

That has been you know an issue that has been brought up there for many years and the governing structures more or less ignored it.

Do you see, Mark, any kind of you know greater strictures on development there that might come out of this?

Well that's, you know, there is always at risk Nancy.

I think, you know, obviously with the Atlanta being so important to the state, that would be worked out with, you know, water flow from Tennessee.

You know, there is always long term.

You know, we can do what the Saudi Arabians do with -- and use the salination but, you know, this drought has not been a good thing for Georgia.

It's obviously brought the water tables down.

Hopefully we'll see that rebound as well.

But, it's an infrastructure resource issue that Georgia is grappling with, especially Atlanta.

I think it will be resolved.

Okay.

Thanks.

All right.

Thank you.

Next question is coming from Bob [Patton].

Your line is live.

Hey, guys.

Congratulations.

Thank you, Bob.

Can you give us a little color on the Florida markets?

You know, you talked about where the big issues were in the Naples, from the Naple Bank.

What are your secondaries of concern and maybe a little more color on the scope and degree of the audit you have done on your existing portfolio.

I'm just going to say a thing or two and that is, that, over on the east coast of Florida we have very few if any issues to deal with.

In fact, the markets specifically that we are continuing with outside of this Fort Myers Cape Coral Lehigh Acres area would be around Sarasota and in the Tampa Bay region, and then in the Panhandle.

(inaudible) really in those two areas and I'll let mark take that and give more particulars on it.

Okay.

Just from the market standpoint, I talked about Cape Coral, Tampa St.

Pete, and we are really focused on single family.

That's -- we don't have a lot of condo exposure down there.

We exited out two years ago, and the C&I activity has been healthy, obviously in Naples.

You would think the C&I business would be tight but the rest of the markets were not really seeing any deterioration in C&I.

Tampa St.

Pete, you know, prices year over year are down 6%.

But you know the change from the maximum there has only been 7%.

So we are not seeing that kind of hit in some of these other markets obviously Sarasota, we got a very small presence.

This had a little larger price depreciation 10.4%, and their change from the maximum has been about 17% over time.

I think as of January 2006 price down there.

Sales are down everywhere.

They're up a little in year over year in Sarasota Bradenton.

They are up about 4.6%.

In Tampa, they are down 35.3%.

You know we have talked to our bankers on the ground, visited obviously a lot of these.

Our CEO in the Tampa region has said that he is not concerned about the homes.

I mean the issues that they're seeing down there or in the condos and there are bigger drops down there.

But that's not an area that we're out there having to worry about right now.

The lot inventories, if you look at those, Sarasota Bradenton's got a lot of inventory down there.

About 120 months of supply.

Again, we're not invested in residential down there.

Tampa's got 31 months.

Fort Myers has got about 28 months.

So all those areas are seeing certainly some weakness.

The things that we're doing down there is we're updating appraisals continuously.

I mean all of our CEOs down there are updating on the residential side.

We have had as many as four new appraisals done on properties this year, we are watching the market, making sure that, you know, our loans are holding up.

Land prices are doing well.

We are not really seeing any significant deterioration in terms of our values to our loan.

We've had a few, few loans in Pensacola land loans in Pensacola that we've have gone on nonaccrual this year and we've gotten now was zero losses.

But overall that is one of the things we're doing.

The second is our loan review teams are down there on the ground looking hard at our loan.

The third thing is, we're pulling all the A&D loans.

We've got about $450 million invested in that market the west Florida market.

About half of it is residential and half of it is 1 to 4 construction.

And we are looking at every one of those loans, talking to our bankers and getting updates and I think we're doing a pretty good job of that.

Okay.

Then one last number.

When you guys are talking about the exposure with the first Florida bank in Naples, where it is today.

I got the first two segments of data up to year end 06.

I did not get what it currently is in terms of numbers of commitments to loans.

Bob this is Fred Green.

We've taken our medicine in Naples.

We don't expect any more write downs or problems there.

The balances less write downs and reserves are in the $40 million range.

$47million.

A number of committed relationships?

A number of commitments?

300

Okay.

Thanks, guys

Thank you.

Thank you, Bob.

Our next question is up from Tony Davis.

Your line is live.

Congratulations on the spin, gentlemen.

Thank you, Tony.

I just thought, I want to make sure Fred and Mark, it sounds like then first Florida and the Atlanta markets accounted for is it 80% of the increase in NPA is after the writeoffs?

Is that right?

Yes, that would be right.

Outside of those two markets, the Carolina and Georgia coastal markets, places like sea island, what are you seeing in those areas?

What's happening in risk classifications in C&I?

You are seeing it spill over I guess outside of the development part?

Tony I'll ask Mark to go into more detail.

But the markets by state that we really have not had any problems with will be South Carolina, Tennessee and Alabama.

And Georgia, outside of the ones we just mentioned in Atlanta.

And he can go over the details by state if that would be.

Thanks.

Tony, I heard you ask about sea island.

I can tell you that area is, believe it or not, doing very well.

Their, you know, sales are on target, their occupancies in the resorts are high.

And we have really not seen anything that gives us any lack of confidence there.

We are also seeing that in Savannah and Augusta.

And again, I think the reason for that is, you know, again we got 30 markets in the top 285 MSA's.

They are in the top third of the market.

So that gives us confidence that they're -- they'll hold up.

South Carolina, most of their markets are in the top third, as well as the Alabama markets.

And as Richard said, there are even some Florida markets that are in the top one-third MSA.

Jacksonville and Tallahassee are two of those that are still performing pretty well.

If you look at non-- just nonperforming by state, and break that down, our nonperforming assets in Georgia are 118.

In South Carolina they are 0.46.

In Alabama they are 0.57.

And in Florida they are 2.54.

And as Fred said, a huge chunk of that is in - is in Naples.

So that's kind of where we are today.

I didn't mention Tennessee.

They are at 0.95.

We did have an issue with one of our banks in Memphis that pushed our MPA's up.

It is not a housing-related issue.

Okay.

Fred, you folks have been pursuing 10% loan growth, 12% commercial deposit growth bogey I guess.

You talked about the appropriateness of growing the balance sheet.

I wonder if you could talk a little bit about your C&I and back logs and kind of what we should expect in balance sheet growth here going next several quarters?

Tony, let me start even though what part of your question, complimenting our retail strategy.

Because we did have great growth there.

Don't want to lose that in the conversation.

Going back to C&I, as we have ramped up, our commercial strategy we've got greater levels of commitments, more closing, more activity, not only on the loans but on the deposits and some of the fee-based items that come with it.

Commercial real estate, again by design we are letting run off and as I said earlier not just brief open comments.

The solid growth we have had in retail in C&I have more than offset the reductions in commercial real estate.

Looking forward, I don't think over the next several quarters we'll be back to that double digit range that we have had for so long and I do think that is appropriate, given the current economy we're in, we'll see the C&I side and the retail side continue to grow at nice levels and probably would continue to see run off in commercial real estate.

One final question.

Put Mark back on the hot seat.

Just if you could give us your thoughts, Mark, on a comfort level, if you can put it that way in terms of what we could expect for the charge off rate for the next several quarters.

Yes, we have looked at our migration, we have looked at the different markets.

as tommy stated, our forecast for year end is a 34 basis point charge off ratio.

as Fred had mentioned earlier, we did beef up the reserves a little bit this quarter on some of those loans, we grow and reached down in the portfolio to get ahead of.

and we are looking at about a 43/44 kind of charge off for the fourth quarter.

and I would expect for the first few quarters of 08 you are going to see something -- something in that ballpark.

Anywhere from the 30 to the 40 kind of basis point range.

Right, you know year to date, our real estate losses are 35 basis points.

i think we are about 22 basis points on C&I.

and about 35 for consumer and of course you know, the (inaudible) are running i think 15 basis points.

mortgages are running about 12 basis points and I really don't expect to see a big change in those.

we got really good high credit scores, reasonable utilization on the line and (inaudible), and the C&I, we are really looking at all of our industries.

we are looking hard at construction-related industries, but we're not seeing trends that indicate that we are having problems there.

so, you know, if you ask me today, West Florida, we'll have some more, you know, if this thing sustains itself through '08, there will be some more issues that pop up.

but think losses in Atlanta I have not been large at all is the evaluations they are holding up pretty well.

so that is kind of where we are seeing potential loss.

Thank you much.

Thank you, Tony.

Our next question is from Adam Barkstrom.

Your line is live.

Hey, gentlemen.

Good afternoon.

Adam.

Can you hear me all right?

Yes, we can.

I'm sorry, phone speaker.

How's that?

Is that little better?

That is better.

Sorry gentlemen.

Hey Fred, I just want to circle back if I heard you right, you kind of made a pretty strong statement with your Naples market that you felt like you kind of took your medicine this quarter and at least this is what I heard.

That you feel like losses are pretty contained there going forward.

Is that, am I understanding that correctly?

That is correct.

The bank right now is around $400 million.

We talked about this portfolio where we've had the problems.

And again, we looked at Adam 100% of the loans in it.

They were all single family construction loans to individuals.

We have written down or reserved an amount that would put the loan at par with market values.

I would hope and I'm going to underline hope and not make a commitment that we'll end up getting some recoveries as we work through this, b But we have taken our medicine there.

Okay.

And Tommy, you had mentioned and I just didn't quite get it down.

But there are couple of items in noninterest income.

I believe one was a VC gain of I think you said $11 million?

Yes.

We had $11 million from the venture capital line of business, and in addition to that, we had a $3 million pre-tax gain on our Mastercard stock sale.

Okay.

Thank you.

Thank you, Adam.

[Casey]

Thanks for taking my question.

Congrats for (inaudible) our TSYS.

It is a good way to reward the journalists.

I guess now, today, I don't really know of any other banks we are trading at eight times, kind of an 08 number that Synovus is now trading, especially considering you guys have almost 10% capital.

So, going forward how do you plan on improving this evaluation of your company?

It looks like the dividend might trend down as you kind of reset that, but what do you do with your stocks at eight times earning.

Should you sell this company?

What are you guys going to do from here?

Well, first of all, I think performance takes care of evaluation over time but admittedly, it is a surprise to us, right now that the embedded value for the bank is at 2 times discount to our peers.

I would anticipate perhaps that with the spin decision having now been announced and the separation of the two companies with really more clarity coming and total transparency from those two separate units, that this might start to be reset.

But I don't know how the market will handle that in the near term.

I frankly think that the quality of our franchise, the presence we have in good markets throughout the southeast, the shifting emphasis that we have now placed on a commercial strategy, which really fits our responsive model will lead to a premium evaluation.

I mean, we don't aspire to get back up to average levels.

We expect to have a premium now.

Over time, what tools will we use other than just basically aggressive sales and business development and adding customers one at a time in all of our banks.

I mean, we will have the ability to enter into the stock buyback programs.

Certainly, the dividend policy is one that needs to be right.

We have had a good history for our retail shareholders of increasing dividends.

Leveraging this capital through acquisitions is going to be a part of our expansion plan.

We have had a history of making community bank acquisitions in good markets, and we continue to state that we would like to enter new markets in the southeast.

And we believe that we can take a billion dollars community banks and have good strong double-digit growth rates in these key markets that we would like to enter.

So, the growth plan would be a combination of factors.

I think, at the top of the list would be our commercial strategy, which will lead to a better balance in our customer mix and in our loan portfolio away from the concentration that we have had in recent years in real estate, particularly the residential development piece.

Okay, great.

What about perhaps joining a larger organization now that your bank is kind of cleaned up from the TSYS business?

About what?

What about joining a larger bank?

A sale of the company or a merger of equals?

Yes.

Well, we all know that our responsibility is to create value for the shareholders.

We believe because we've done it consistently in the past, that we can accomplish this on our own.

But we do have the overriding responsibility to create this value.

We think we've got a business plan in place.

We don't think we have to do this by consolidating our company with one that is larger or even by doing a merger of equals but strategic options will always be out there and we'll have to pick the one that creates the best value for the shareholders.

But I like our plan.

I like the ability that we have to grow in these key markets with the community bank delivery backed by large bank expertise, product array, legal lending limits, all of which support this commercial strategy.

So, our aspiration, and the team joins me in this, is to show that we can be the premiere regional banking franchise in the southeast.

I see no reason that we can't achieve that.

Okay.

Thanks very much.

I think so.

Thank you.

Our next question comes from Jeff Davis.

Your line is live.

Good afternoon, Richard, any plans to tweak the Synovus model by consolidating charters?

We've done a little of that, Jeff.

We've most recently consolidated a couple of our Atlanta area banks into our flagship bank there, the Bank of North Georgia.

And we will continue consistently look at the right opportunities we have, particularly when we have a small presence in a large market.

Certainly, when we have a large market like our Tampa Bay area or like in Atlanta metro area where there's a blur between one community extending into the next.

So we'll pick our spots.

We won't do -- we're not going to change the personality of the company but if we can do some of these things to attract better talent as sometimes you can do in a bigger organization like the Bank of North Georgia, we'll capitalize on those opportunities.

Let me ask you just a little different then.

No plans to go from 37 down to 15 for 16?

No like that, no.

It wouldn't be like that.

Okay.

And if I could ask a followup, please, of Mark.

Mark, it sounds like you are expecting chargeoffs to, at least for the time being, to crest somewhere near here over the next couple of quarters if we average amount around 40 [bits].

What about NPAs?

Big jump this quarter out of Naples and then downgrading the stuff that is not nonperforming technically, yet.

What are your thoughts there over the next two or three quarters of when the nonperformers crest?

Well, again, I think one of the things we are looking for is some rebound in sales.

But you know, if you were to pin me downright now, and you know, looking at our migration changes, you know, we are looking for some increase in NPAs over the next couple of quarters.

We've done it loan by loan and we've done it through risk migration.

And you know, if you pin me down today, I would say there is a potential for an increase up to the 120 level.

The other thing we are doing, that I think is going to be meaningful to us, is we typically have not outsourced you know, some of our collections duties, those kinds of things.

We are in Atlanta, we are signing up with all the utilization of our ORE, with company that [Sun Trust] uses.

They have had good success, turning in about 17.5% of the inventory a month.

So we think we can exit properties quicker if we are smart about it, if we're smart about, we've sold some loans, we may pick that up a little bit, and we again built our reserve to 1/38 of loans.

We, I think, factored the chargeoffs into that so the provision expense we don't think will be as meaningful but, you know, the chargeoff ratio might be up a little bit.

Again, we are very aggressive in looking at our past dues, our 90-day loans.

We did see some of the bank reports where 90-day loans were moving way up.

Ours have not done that.

You know, and we look closely at those every single quarter and justify why they're still there.

So you know if you ask me, I would say, for the first few quarters of the year, there is still pressure.

We think by mid-year that that pressure will lighten.

But at this point, I can't give you an absolute number.

Okay.

That's fine.

And Tommy, so at Columbus Bank and Trust capital, the tier one capital is going to be what?

About 11%, 12%?

Tier one at CB&T, just remember, they are coming off of a tier one number that's been 28% roughly.

At least that would be our year-end estimate without a spin.

Post-spin, the tier one out of the chute at CB&T, you are looking at something in the 17 range.

And as Richard mentioned a while ago, CB&T does have some unique activities as sort of the center of Synovus and also some of the unique businesses therein do require some more capital.

We believe we can tune that capital utilization, something they really haven't l to do much of because of the TSYS ownership.

But we think we can tune that and free some up over time.

Thank you very much.

Thank you.

Our next questions are from Kevin St.

Pierre.

Your line is live.

Good afternoon gentlemen.

Mark, i just like you to clarify and maybe even restate what you touched on in the last answer in that the tone of the press release as well as some of the call here is that you put some of these issues behind you.

I guess what I'm having trouble looking at the rate of increase of the NPAs and then some guidance about sequential declines and chargeoffs and moving into the 40 basis point range from 50.

Would you actually, can you actually envision a scenario over the next few quarters where nonperformers are continuing to rise?

And yet the provision expense is lagging net chargeoffs?

Well, I think what we've talked about is we do not believe there is another Naples in our portfolio.

And this 51 basis point charge, half the charges came from that.

If you back that out, our loss rates were 25 basis points.

So what we think -- what I think I'm trying to say is do I expect those losses to go up some?

Yes, from 25, I do.

But I don't expect a 51 basis point rate going forward over the next few quarters.

In terms of the nonperforming assets.

You know, it is really a function of, we've looked at every potential loan.

And in the higher risk classification, we've got about $45 million there in residential that's accruing, that you know, they have some weaknesses, but they don't deserve nonaccrual.

That is kind of what we are looking at.

What if you know these loans go to nonaccrual?

An example of that is we got a loan an $87 million loan in South Carolina.

We have got a new appraisal worth $12 million.

We've got a borrower who is not performing like we want him to.

We have buyers in line ready to buy property.

We are pursuing a foreclosure on that property.

If we succeed in acquiring the property, the property will be sold and there will be no issues.

If the borrower resists us and files for bankruptcy, then we've got longer delay on turning that property.

So there are things like that in the portfolio that makes it very difficult to give you a prediction.

Right.

That particular loan is reserved, even though it's we have got a $12 million appraisal and an $8 million loan, we've got a 22.5% reserve, again.

Right.

And as we see some of these flow through to chargeoff, can we see that reserve to loans drift down and provisions lag?

Yes.

I think that's what we're I think that's what we're trying to say.

Right.

Is that have we've gotten ahead of these things.

We have added to reserves and it's very possible for the reserves to actually draw.

Right.

I think just to get back to Casey's point.

I think if you demonstrate to the market that 40 basis point range in '08 and that this dramatic year-over-year rise in one to four family of non performers, it's going to translate into extraordinary chargeoffs, then I think that's when you move from eight times to your premium.

We understand that.

Thank you.

Thank you.

Next question from Kevin Fitzsimmons.

Your line is live.

Good afternoon, everyone.

Hey, Kevin.

Richard, could you just remind us some of the markets that are kind of at the top of your list in terms of where you would like to enter?

I know you have mentioned Carolina in the past.

North Carolina.

Could you also talk about I know you mentioned the size of an acquisition.

You talked about a billion dollars size.

But what about the pace of acquisitions?

I know one thing that's always been con strange acquisitions for Synovus is that you wanted to limit or not dilute the contribution of TSYS.

But without that constraint now, do you feel more freed up in a sense to do acquisitions?

Thanks.

Oh, I don't -- I don't necessarily feel that way.

We -- a couple of years ago we began to sort of mentally get away from this percentage of bottom line constraint that we used to talk about with TSYS.

I don't, I don't expect to deliver a high pace of acquisitions right now.

I mean, we've got to make sure we've got the right currency, which leads to the right economics and fundamentals in these deals but I would say for now, the size of acquisitions that we would want to target would be about the same that you mentioned.

You know, plus or minus a billion dollars.

Maybe a little less but not down in that $300 or $400 million range.

I think that Florida for now would be out.

I think that Florida for now would be out.

We'll return with an appetite to fill out more in Florida.

But for obvious reasons, we would not have that on our list.

We do expect to have a clearer Tennessee strategy.

Not that there are many opportunities but there are some in Tennessee and we've got Don Howard, who is one of our great leaders in this company, taking over that market and he is working on a Tennessee strategy for us.

North Carolina clearly is on the list.

We are definitely interested in it.

I can see Virginia being a state although we have not looked at anything there that would fit our company.

But we are still we still like our positioning term community banking power for the connected which means that we like well-run community banks that can benefit from having this additional product set in areas of expertise like capital markets and corporate cash management and wealth management that we would bring to them.

So the strategy for expansion is still the same.

Those would be examples of some of the markets that we would want to enter.

And the pace would continue about where it's been in recent years.

Okay.

Great.

Just one clarifying point.

When you talk about $1.85 for full year 07, I assume first quarter was $0.45 cents.

The second quarter, I'm assuming you are talking about just income from continuing operations.

That was $0.48 cents.

And then you are probably including $0.45 cents per third quarter which is (inaudible) call

That would be correct Tommy, is that?

Okay.

Great.

Thank you, everyone.

Thank you.

Our next question is from [Doug].

Your line is live.

Congratulations on the spin.

I think it will do wonders for shareholders.

I just want to confirm your dividend proforma for Synovus after the spin.

From what I read (inaudible) it's $0.68 cents.

By my math that is over a 6% dividend yield for the bank only?

Am I doing that right?

Tommy, do you have those numbers?

Yes.

If you, I guess very simply back out the current TSYS value out of today's market cap and (inaudible) the number, in the 5.5% range on the yield.

And I think that come back to the evaluation issue we were discussing earlier.

Okay.

Yes, that does sound like a very high yield.

I just want to confirm those doing the math right.

Thank you.

The rationale on the dividend was to keep the Synovus shareholder from, you know, looking in two baskets now to keep them whole from where they were before when you add that to the $0.68 cents to the amount that they'll receive based on the just under half a share TSYS, then they'll come back to where they were on the previous basis of $0.82 cents

Okay.

Thank you.

Thank you, Doug.

Follow-up call from Adam Barkstrom.

Your line is live.

Hey, gentlemen.

Just a quick follow-up.

You I guess when the dividends, in thinking about sort of penciling out proforma tangibles equity levels, what you missed in share and purchase and secures.

If you could give us some I'm just curious if you could give us some timing there.

I was kind of expecting to see a fairly aggressive share repurchase plan perhaps announced with the spinoff.

Any thoughts on that?

Especially given the fact that, you know, from an acquisition perspective, I guess you could still do cash deals but, you know, from a currency deal, given where the current share price as you may be somewhat limited, you know, from a delusion perspective going forward.

What are sort of the thoughts and the timing of the share repurchase from here?

Adam, as you know, it's been very difficult in our history to acquire our own shares for a couple of reasons.

One was the really building the financial service capital to the right level to prepare for this transaction that was announced today.

And the other issue was I guess by nature of TSYS, business and the large customer news that was always out there, the windows were narrow for us to operate in.

Described awhile ago, getting the tier 1 capital right, being very willing to remix the components of tier 1 capital and to you know go to the marketplace with hybrid securities to create the capacity for the share buy backs or acquisitions or other purposes.

And all that's on the table right in front of us.

We do not have an authorization out there.

But it certainly is something that now where the decks have been cleared and we can certainly do that and move forward as we see appropriate.

Okay and then we going to see any further spinoff costs in 4 Q?

You will.

You know this -- there are some fees associated with success that cannot and should not have been accounted for.

Since they were unknown in the third quarter.

In addition to some continued advisory work that goes on.

So there will be some more of that.

Do you think we're through the lion's share of that or will it be?

I mean, any sense of magnitude?

It will be larger than what you saw in the third quarter.

Okay.

Thank you.

Our next question is from Heather Wolf.

Your line is live.

Hi, there.

Hello Heather.

Tommy, did you say yet what you're potential common equity that's ratio will be supposed to have been.

We are estimating that to be about 8.8%.

Okay and do you have a target out there?

No, I think our focus would be more on the tier 1 ratio.

Obviously our tangible common equity ratio stands out a little higher than other ratios because of the mix of our business.

The tier 1 capital ratio, we think appropriately deals with that element.

You know, I described awhile ago we feel like that 9.4% stands out a couple of notches, basis points at least above the peers.

We think that that's appropriate right now in this banking environment.

Sort of a dynamic answer to that will evolve I guess as the credit environment changes.

But we like it where we're headed for the moment.

Okay.

And mark, I wanted to ask you a question that a lot of investors ask me sometimes.

And that is you know, you guys I think came on last quarter and said that you know everything was pretty much under control and that you thought thinks are going to improve from here and obviously that wasn't the case.

So, looking forward, where do you think, if there are going to be further problems.

Where do you think you put this wrong in your assessment that they should stabilize from here?

Well again but for Naples and I hate to say that, you know, we would have, things would h ave been relatively normal.

But, you know, again if you are asking me where are the stocks there and there in Southwest Florida, you know Allanta is the other area that we continue to watch if you look at our nonperforming assets.

West Florida is the area we got again about $500 million, $460 million in residential activity in that area and that's the one that if you were to say you know, could you have higher loss ratios obviously if that market continues to deteriorate further, we could.

But I would say that's really in terms of our target of loss ratios, that's what we factored in.

Okay.

So it sounds like you are more worried about loss content in Florida than more nonperformers in other geographies?

That's right.

Okay.

Did I calculate right that your loss severity assumption for Naples was about 40%?

Yes.

And it's a function of the couple things.

Part of it was the two locations we are and one Cape Coral Lehigh Acres severity is different in those two markets.

The other is, there was some lot loans that we had down there, that we did not, we told our bars, we couldn't go forward on construction.

We are not contractually obligated to.

And the lot prices have been really hit hard, I mean, there, if you look at the beef prices down there they have been running $82,000.

We're seeing lot prices down there in the 15 to $30,000 range, depending on whether they are in Cape Coral or Lehighm and that was about half of our loss.

Okay.

And then in your sort of rough commentary about losses and sort of folding in and somewhere in the, sounded like in the 40 basis point area through the first half of '08.

Have you assumed that the C&I and other loan categories told where they are?

Heather, we have because they continue to do so.

Obviously, you know, if there is a recession in the country, if things really change there, then we come back to you and change our motto.

But we're not seeing it right now.

Okay.

All right.

Great.

Thanks so much.

Thank you, Heather.

Follow-up coming from Nancy Bush.

Your line is live.

Guys, just one or a couple of quick follow-ups here.

Richard, in sort of looking down the line and trying to value the stock going forward, could you just tell me what you think your perfect balance of sort of balance sheet balance, C&I loans, CRE and retail would be?

I mean, what's the target there?

Well, you would have to go I guess five years out or thereabouts.

And you know, Mark, you are going to have to help me with the all right including on occupied and C&I, we are at 41.

And you know, five years out, I really would like to see that over 45, you know, closer to 50.

And I don't see retail percentages increasing a lot.

Maybe -- maybe just a little.

A tick or two.

So the difference would come out of the C.R.

E investor properties.

So you would still be looking at sort of a, you know, 35% or so being C.

R.

E?

We are not yet -- I understand your question.

And that basically has to do with whether we're going to sort of exit the commercial real estate lending business.

And we -- we talked about that particular issue.

But we feel like first of all this is an area of strength traditionally for us.

Now this is an unusual but sort of painful point in the cycle.

I do think that some of what we are experiencing, as you can tell, is within our control.

I mean, I think we can in that residential piece, we can be better underwriters.

And I do think we will clearly shrink that exposure.

The rest of CRE we like.

Our appetite will varies from time-to-time, but the income produced in properties and (inaudible) you know, the hotel, motel sector, the shopping centers, the retail centers, we'll continue to be active there.

So, the bulk of the shrinkage will come from that residential component, but I don't see us totally exiting that.

We think that with the right kind of underwriting that we can be active in that business.

My other question would be perhaps aimed as much at Tommy but just one of the issues I think in devaluation of the bank side has been is the trends in margin, not so much to downward trend which many in the industry of experienced, but just sort of the variability and the difficulty predicting market trends this year.

Do you guys feel you got a handle now on where your margin is going and, you know, is there is a sort of more of, you know, more of validity in the outlook now than there has been perhaps, you know, earlier in the year?

Nancy, I think the third quarter results indicated an affirmative answer to what you just said.

The -- you know, the ability to predict that obviously is, you know, has a, you know, five or six key movements parts, some you control, some you don't left.

I think, a huge part of the issues that we've had in 2007 have been the (inaudible) the execution all the way to the front line and I feel very good where that is, and I think that's all a key of indicator to give us some confidence in the future.

Okay.

And Richard just one final question for you.

The TSYS and Synovus have, you know, a lot of interlocking parts, board of directors, representation, etc.

Do those remain or will they be separated or does these are have to be some, you know, sort of separation of governance?

I mean, what - how does that play out?

Because it's hard for me -- I mean I can sort of get my hands around the math, I can't get my hands around that psychology between the two companies, which have always been so intertwined.Okay.And Richard just one final question for you.

The TSYS and Synovus have, you know, a lot of interlocking parts, board of directors, representation, etc.

Do those remain or will they be separated or does these are have to be some, you know, sort of separation of governance?

I mean, what - how does that play out?

Because it's hard for me -- I mean I can sort of get my hands around the math, I can't get my hands around that psychology between the two companies, which have always been so intertwined.

Well, they have, and really, as you heard Phil say, I think intertwined in a positive way.

I think it has led to opportunities in advantages of somewhere on both sides.

The answer to your question about directors is we do have, I think, interlocking directors and we have no plans to change that.

It was cleared out as it should have been at the board level and we concluded that those directors, add value to both companies.

They're good leaders.

They have a great history and knowledge of our company.

So, we have elected not to change that.

The question becomes, well is that, is there a perception problem there?

We don't really think so.

We viewed it more as a positive than anything else.

So, that's where we stand on that subject.

No change in the boards.

Thank you.

Our next question is a followup from Jeff Davis.

Your line is live.

I'm fine.

Thank you.

Okay

Next question is coming from [Bob Patton].

Your line is live.

Hey guys, just a followup.

After what happened with the Naples Bank, I guess some time ago, what lessons do you learn?

You guys now have a (inaudible) capital and acquisitions are probably part of your growth tragedy going forward.

In this environment, obviously buying somebody else's problem is everybody's risk.

What do you do today, that you have learned from the Naples acquisition?

Let me just talk about their diligence and acquisitions as you know this can add to it, Bob, but we have learned not just from Naples but from our acquisition history that first of all, the idea of just doing a sampling of the loan portfolio to feel comfortable about credit quality is not nearly, are not their diligence and certainly, we've done more than that but there historically has been a temptation just to view their diligence as credit related.

We have learned even in the credit, their diligence, that being on the ground, seeing the properties traveling into the neighborhoods understanding all of the underwriting approach is mandatory today.

So, higher sampling of physical inspection of (inaudible) and just more hours involved in interacting with the bank officers would be essential.

Secondly, would be what I would call the importance of strategic diligence.

Understanding the growth plan and how likely it is to be achieved is essential, to be honest, but we've got a couple of banks that we have acquired in recent years that have fallen short of their growth plan and if we were to do them again because they still have a lot of potential for us, we would reach tighter understandings about the strategies that we got enabled and achieve the growth because as what we are requiring is that growing income strength.

So, we will have a lot more strategic diligence.

And in a followup point is that banking has been a good business for the last 10 or 15 years and there had been entrepreneurs in banking that have created perceived value and naturally you credited when you buy a bank.

What you can lose if you are not careful is the engagement of the people who are the beneficiary of the money you are paying in the currency you are issuing, so making sure you've got commitment, engagement, further skin in game from that group has got to make, the growth happened and is not be taken for granted, and we understand that.

Actually, we have had a much better track record in that regard than many of our peers.

I am aware of many situations where regional banks have acquired community banks and ended up competing with those bankers.

That is not at all acceptable situation and we have been fortunate in that respect but it does happen.

So, you have to have good chemistry, good fit with the culture and the people, those are my thoughts.

Thank you Richard.

One last question --the capital levels.

I have 9.4 on capital is -- can somebody clarify that for me in terms of coming out of the shoot?

Yes Bob, I'll be glad to.

The 9.4 is the proform of tier 1 ratio for Synovus.

The 17% is of the CBNT ratio.

Thank you Tommy.

Gentleman, there appeared to be no further questions in queue.

Have any closing comments that you can finish with?

I want to thank everybody for their interest.

We are excited about this stand announcement.

It's been a long time coming.

A lot of great work has been done and we had an opportunity to thank those who participated in it earlier today.

I will say one last thing and that is this current pressure with meeting and performance creates opportunity for us in the company perhaps to address what -- definitely to address any weak area.

Rest assured that we're reviewing every operating unit of our company, any level of expense management, credit oversight and talent very thoroughly, and we will come out of this current downturn in a stronger position than we've ever had before.

So, the management team is excited about this opportunity.

Thanks for being with us.

Thank you ladies and gentlemen, this conclude today's teleconference.

You may disconnect the phone at this time and have a wonderful day.