United Community Banks Inc (UCBIO) 2005 Q1 法說會逐字稿

Good morning, and welcome to the United Community Banks first quarter 2005 conference call. Hosting the call today is Jimmy Tallent, President and Chief Executive Officer of the United Community Banks, and Rex Schuette, United's Chief Financial Officer. Rex Schuette will begin the conference call by reviewing United's forward looking statements. Mr. Schuette.

Thank you. During this call, we may make certain forward looking statements. These include all statements that are not statements of historical fact, or that are statements regarding the intent, belief or expectation of United Community Banks and it's management with respect to trends effecting the company's operations, it's financial, economic, and market conditions, and it's growth in operating strategies.

Specifically, of course, earnings expectations and estimates are forward looking statements. During this call, we may refer to non gap financial measures which we provide because we believe they are helpful in analyzing core performance trends at United Community Banks.

Our new release explains the difference between non gap earnings measures, and measures calculated under gap. We filed a news release on form 8-K this morning, and we encourage you to review the sections of our most recent form 10-K that describes the factors that may affect the future results of our operations.

Any forward looking statements made today are contained in other public statements of United Community Banks, or made by its management should be considered in light of those factors.

And now we'll begin our call with Jimmy Tallent, President and Chief Executive Officer of United Community Banks. Jimmy?

Thanks, Rex and good morning ladies and gentlemen. Thank you for joining United Community Banks first quarter Conference Call. Once again, I'm pleased to report that our team of community bankers delivered another successful quarter for our company and its shareholders.

The first quarter of 2005 was another record performance; one that tracks very well with our long term goals of achieving sustained double digit growth in earnings per share, and a return on tangible equity in excess of 18%. Later, Rex will provide more detail on our financial performance, but first, I will take a moment to review some of those highlights.

For the quarter total, revenue grew 24% from the same period a year ago. Net income rose 23%. Diluted earnings per share increased 13%, and return on tangible equity was 20%. During the first quarter, we added $143 million in loans, and $157 million in deposits which included $115 million of core deposits.

Our loan growth accelerated late in the quarter, so we are carrying some very good momentum into the second quarter.

We achieved this growth by treating our customers right. They let us know how we are doing every quarter, not just through our customer satisfaction surveys, but also in their willingness to do more business with us, and to refer their friends and family to us. We launched our core deposit program in January of 2004, and since that time the program has helped us add 47,000 new accounts. In growth, core deposits by more than $300 million.

We are off to a strong start this year. Included in those overall numbers were 13,000 accounts, and $100 million added in the first quarter of 2005. I'm very proud of our first quarter's performance, but I'm more proud of the men and women of United Community Banks who have helped drive the consistent, steady growth and profitability quarter after quarter, year in and year out. In fact, for the 10 year period, from 1994 through 2004, United Community Banks has provided shareholders with a 24% compounded annual growth rate in total returns which is the price appreciation of the stock including dividends.

Our record first quarter performance and our track record of steady, sustained progress is driven by our unrelenting focus on a simple but effective growth strategy, which we call our balanced-growth strategy. This is the same strategy we have implemented for the past decade and although I've explained it on previous calls, I want to briefly comment on the positive impacts this quarter, because it is central to understanding the valiant creating potential of our business model.

Our balanced-growth strategy has 2 basic elements. First and most important is organic growth. For the past 10 years about two-thirds of our overall growth has been organic, which we define as internal growth as well as growth through de novo offices.

Our first quarter performance illustrates the success of our organic-growth strategy; evidenced by over 14% increase in core loans from a year ago and a 15% annualized growth on a consecutive quarter basis.

The second element of our growth strategy is selective mergers and I do mean selective. We operate as a community bank and we believe that leveraging our community banking business model provides a significant, competitive advantage in the markets in which we serve. So in selecting our partners, we consider a lot of "ifs."

If we find a bank and bankers that share our passion for customer service and our commitment to community banking and if adding that bank to United Community Banks strengthens this company, its footprint and its competitiveness, and if it will be acquitted to earnings in a relatively short period of time, usually within the first full year after joining with United, then and only then will we use an acquisition to grow our company.

Both the organic and selective growth elements are driven by people; the right people that fit our community banking model and have a passion for customer service. This quarter is about organic growth and about people. We were able to add 7 senior bankers this quarter; experienced professionals who are attracted to our community banking model and customer service philosophy.

These bankers average over 25 years of service and came from other regional bank competitors in our markets. We think they will be able to contribute immediately by generating new business for our bank. Again, this is just another example of how our business model and growth strategies attract not just customers, but other bankers in our markets; bankers who appreciate the way that we do business.

And the last element of our balanced-growth strategy is built on a foundation of discipline expense controls and on an uncompromising focus on credit quality. I'll talk more about our credit quality after Rex reviews our financial performance for the first quarter. With that, let me turn the call over to Rex.

Thank you, Jimmy. For the first quarter of 2005, United Community Banks achieved record results. That included a 23% rise in net income, a 13% gain in diluted earnings per share and a 24% increase in total revenue compared with the first quarter a year ago.

For the quarter, net income rose $2.5 million to a record $13.4 million, up from $10.9 million a year ago. Diluted earnings per share totaled $0.34 compared with $0.30 for the same period last year.

And total revenue, on a tax equivalent basis was $56.1 million compared with $45.3 million for the first quarter of 2004. First quarter return on tangible equity was 19.86% compared with 19.87% a year ago and return on assets was 1.06% for the quarter compared with 1.08% last year. Now let's look more closely at earnings and the other key elements of our performance for the first quarter.

Taxable equivalent net interest revenue up $48.3 million grossed $10.5 million or 28% from the same period a year ago. Acquisitions completed in 2004 are counted for about $3.9 million of the total increase, resulting in a core growth rate of 17% and on a consecutive quarter basis, excluding contributions from these acquisitions, net interest revenue was up approximately $1.4 million or 14% on an annualized basis.

Interest margin for the quarter increased to 4.05% from 3.99% a year ago and was unchanged from the fourth quarter of 2004. That said, we have maintained a net interest margin near the 4% level for the past 10 quarters and we expect it will remain at or slightly above this level through 2005.

Now, let's turn to loan growth. At the end of the first quarter, loans totaled $3.9 billion, up $730.0 million or 23% from a year ago. Our acquisitions accounted for approximately $285.0 million of this increase year over year; therefore core growth was $455.0 million or 14%.

That strong performance came across all of our markets and we believe these excellent growth opportunities will continue in the future. I will now provide some additional detail on the $730.0 million increase in loans compared to a year ago; first by geographic region.

North Georgia had growth of a $121.0 million. The metropolitan of Atlanta increased $447.0 million which includes the $285.0 million from the recent acquisitions. Western North Carolina had growth of $59.0 million. The coast of Georgia was up $61.0 million and east Tennessee increased $42.0 million.

Looking on a consecutive quarter basis, loans increased by a $143.0 million or 15% on an annualized basis. Here's the breakdown of growth by market. $38.0 million in north Georgia, $61.0 million in metro Atlanta, $11.0 million in western North Carolina, $22.0 million in coastal Georgia, and $11.0 million in east Tennessee. Again, this broad based contribution to loan growth clearly reaffirms the strength of United Community Banks unique footprints, as well as the economic strength of our markets.

Looking at our growth by loan categories, let's first review the year over year comparisons. Construction and land development loans grew by $383.0 million, bringing the total to $1.4 billion. Commercial loans increased by $171.0 million to $1.2 billion and residential mortgages increased by $160.0 million to $1.2 billion.

Looking at these same categories on a consecutive quarter basis, construction and land development loans increased by $72.0 million, and the balance was primarily from residential mortgages which increased by $69.0 million.

Next, let me update you on the interest rate sensitivity of our balance sheet. Our interest rate sensitivity at quarter end was 2.3% net interest revenue based on a 200 basis point ramp up of interest rates. Compared to a year ago, we were down 120 basis points and we were down 40 basis points from last quarter.

During the quarter, we entered into received fixed rate swaps, with a total notional value of approximately $60.0 million. Primarily, that heads the growth in prime based floating rate loans. Additionally, we purchased about $50.0 million of fixed rate investment securities that were funded primarily with floating rate liabilities to further neutralize our exposure to changing interest rates. At quarter end, we are in a position to benefit slightly from further expected FED rate and we will continue to manage towards a neutral to slightly asset sensitive position.

Moving to fee revenue; for the first quarter total fee revenue at $10.2 million was up $922,000 from a year ago due primarily to growth in service charges, fees on deposit accounts and higher consulting fees. Mortgage loan and related fees were $1.5 million up 14% from last year. Service charges and fees on deposit accounts were $5.6 million for the quarter up $591,000 from a year ago.

This increase largely reflects the growth added by our acquisitions and the continued success of our core deposit program. Consulting fees totaled $1.5 million up $355,000 or 32% from a year earlier, primarily due to the growth in new business practices for risk management, and financial services, as well as the growth in our existing consulting services.

Next, I will comment on operating expenses. Total operating expenses for the first quarter were $34.8 million up $6.6 million or 23% from the first quarter of 2004. $2.8 million of this increase was related to operating expenses of the 3 banks we acquired in 2004. Let's review the key components of first quarter's operating expenses.

Salary and employee benefit costs totaled $22.2 million up $4.1 million or 23%. Approximately $2.0 million of this increase resulted from 2004's acquisitions and de novo offices. The balance was due to an increase in staff to support business growth and merit increases.

At March 31, 2005, total staff was 1,558; an increase of 188 compared with last year. More than 60% of that increase or 119 staff were added through last year's acquisitions and the de novo offices. That leaves our core staff growth rate year over year about 5%. Communications and equipment expenses totaled $3.0 million up $435,000 or 17%, due to acquisitions as well as investments in technology equipment to support business growth and enhance operating efficiencies.

Advertising and marketing totaled $1.4 million up $599,000 reflecting business growth and program costs of a very successful initiative to raise core deposits. Occupancy expense totaled $2.7 million up $386,000 primarily reflecting costs of 14 banking offices added through acquisitions and de novos. And professional fees totaled $1.0 million up $200,000 approximately half associated with the acquisitions.

The increases in other operating expense categories were due to higher business volumes and the recent acquisitions. Our operating efficiency ratio was 59.47% for the quarter. And now let's look at credit quality. The first quarter's provision for loan losses was $2.4 million up $600,000 from last year and up $400,000 from the fourth quarter of 2004. The allowance to loans ratio was 1.25% compared to 1.27% a year ago, and 1.26% the last quarter.

Net charge offs for the quarter were $1.1 million compared to $635,000 for the first quarter of 2004, and $1.2 million for last quarter. Net charge offs to average loans were 12 basis points compared to 8 basis points for the first quarter 2004, and 13 basis points for the fourth quarter of 2004.

00000Non performing assets at quarter end totaled $13.7 million, compared with $7.3 million a year ago, and $8.7 million at the end of 2004. The first quarter's non performing assets included $12.9 million of non performing loans, and $740,000 of oreo(ph) loans. Historically, we turn over non performing loans and oreo loans quickly; generally under 6 months.

Non performing assets at the percentage of total assets for 26 basis points at quarter end compared to 18 basis points at March 31, 2004 and 17 basis points at December 31, 2004. I'd like to make a few, key points about the strength of our credit quality numbers. First, our overall credit quality remains excellent. Our proven strategy of securing loans with hard assets primarily real estate remains critical to our credit quality success.

Second, we have continued to maintain strong credit quality while generating significant loan growth. And finally I'll reiterate a point we've made on previous calls. Because United Community Banks have such low levels of non performing assets, net charge offs and other credit quality indicators, we are susceptible to some volatility between reporting periods.

Despite this volatility, first quarter's non performing assets as a percentage of total assets remained at a reasonably low level and well within our internal guidance of 20 to 35 basis points and compares favorably to our peers.

Turning to capital at quarter end; all of our capital ratios for regulatory purposes are above the well capitalized level. Our internal guideline is to be 100 basis points above these regulatory well capitalized levels. We monitor and actively manage our capital levels and ratios and we are comfortable with our capital ratios at the current level.

This concludes my comments on our first quarter's performance. Now I'll turn the call back to Jimmy.

Thanks, Rex. Before we open the call to your questions, let me summarize the quarter. We have completed another very successful quarter at United Community Banks. There is no magic in our performance, just a focused team of bankers doing what they do best; treating our customers the way we as individuals would like to be treated.

Our strategy remains simple; balance, loan and core deposit growth achieved one step at a time organically and through selective mergers accompanied by diligent expense controls and a business culture that demands strong credit quality.

Our overall excellent credit quality remains intact and compare very favorably with our peer group of high performing banks as well as the banking industry and we do not see any negative trends. What we do see and what we have discussed in the past is that based on these very low levels, we expect occasionally some lumpiness.

Our overall credit quality remains and will remain a bedrock priority for us and I think we have demonstrated in this quarter as well as in past quarters, ours is a strategy that when executed well, delivers value across the board. Value can be measured in many ways; from asset growth, revenue growth, credit quality and record earnings to building franchise value and increasing shareholder equity.

Achieving value creation is based on one thing and one thing only; execution by people who know their markets and are passionate about their business and it starts very simply. At the point of contact between the employee and the customer; that is where the seeds of success are planted. That is where we start cultivating growth and that is why through execution by dedicated people, we have been able to achieve sustained record financial performance.

Looking at the remainder of 2005, United Community Banks is on target to deliver double digit growth in operating earnings per share within our long term goal of 12 to 15%. We believe that core loan growth will continue in the range of 10 to 14% and that our net interest margin will remain near or slightly the 4% level. This outlook is based on a continued, stable, economic environment in our market combined with continued strong credit quality.

We are well positioned for additional increases in short term interest rates and should benefit slightly if and when they occur. With that, let me thank you for your continued interest in United Community Banks and open the call to your questions.

Thank you sir.

[Operator Instructions]

First question is from Scott Alaniz of Sandler O'Neill.

Good morning.

Good morning, Scott.

Good morning, Scott.

I've got a couple of house keeping questions first. Rex, do you have the figure for loans 90 days past due?

That's zero, Scott at quarter end.

Zero? That's good to hear. And do you have a break out between your good will and other intangible assets?

Scott, I'll get back to you on that. We don't have that right handed here.

Okay.

Okay?

And then of the 7 senior bankers that were hired this quarter, could you provide a little color commentary; what market area, lending specialty, etc.?

Scott, I'll answer that. Principally would be in the metro Atlanta area. We did add a couple of bankers on the coast of Georgia. These were guys that actually had been working for a number of years at some of the large regional banks. These are specialized either in real estate lending and/or we also strengthened our underwriting process by adding an additional regional officer. These people average really 25 years of banking experience and again we were honored and humbled that they chose us because they had a number of opportunities, but they like the template in which we operate the company.

Jimmy, do any of these folks come as a group or were they just placed by an acquisition or how did this come about?

I don't recall any of these people being actually displaced. They did not come as a group. Three came from the same regional bank in different locations, but these were people again that we have had conversation with over the last year or so and they decided they wanted to be on the United team.

I see. And then finally, you've been very successful in core deposit generation. What are your expectations for core deposit growth this year?

Well, we are very optimistic. We had a very strong first quarter; again, our initiative in growing core deposits, which includes incentive programs to the employees, direct mail, the refer-a-friend. It continues to achieve exactly what we had been hoping for. Another dynamic of that program is - and some of our newer markets; acquisitions that were made in 2004 - we've really been able to implement that very strongly in the first quarter and I think that's the results of our core deposit growth in the first quarter which as you look at the numbers will show $100 million of increase, but really it's $157 million when you deduct the broker deposit that actually matured and ran off.

Got it. Thank you very much.

Scott, as a follow up to your question you had on tangibles at quarter end. It's $120 million and $104 million of that is good will and $16 million is primarily core deposit and other intangibles.

Thank you, Rex.

Okay.

Okay, we'll take our next question from John Pandtle, of Raymond James. Please go ahead.

Hey, good morning guys; a couple of questions. First, Rex, if you could provide a little more color on your decision to add some securities this quarter? It sounded like it was a bit of a hedging transaction. And then the second question related to recent de novo banks; I guess I'm thinking about Savannah, east Tennessee. Maybe you could update us on the size of those operations and the relative profitability?

Alright, John. I'll take on the first question and then have Jimmy respond to the de novos. As I mentioned in our interest rate sensitivity, we reduced that by about 40 basis points this quarter; again trying to pull our sensitivity down in the 2% range and we brought it down from about 2.7 down to 2.3 at quarter end, and that was done primarily through adding a small amount of swaps as well as adding investment securities this quarter. We have actually increased our prime daily loans from about a billion nine to two billion one at quarter end from the fourth quarter to the first quarter so we're off setting some of that sensitivity.

Okay and did that have any material effect on the duration of the securities portfolio?

No, it really doesn't have any significant impact on the duration. We basically were at about 3.4% at year end and we're at 3.5% right now.

And do you know how much that affected your margin in the quarter?

It probably had a couple of basis points possibly in impact on the margin of compression a little bit, because you're adding the securities at a lower rate.

Okay.

John, to answer your question in regards to the de novos. We did 5 last year and if you look at those in aggregate, just past quarter we basically have broken even with all 5. So that's within that 12 to 18 month that we talked about. Now, 3 of those are making money; a couple of those have got just a little ways to go, so we are excited about the fact that we are able to open 5 locations and it's having today a zero impact on profitability.

Going forward, of course that should engage and start dropping to the bottom line. As far as the growth, of course the Savannah market has been very, very good for us. Our loans there are about $62.0 million; deposits about $22.0 million and of course in North Carolina, those 2 operations there, if you add those 2 together would be loans about $41.0 million; deposits about $23.0 million.

Cartersville is $12.0 million in loans; about $10.0 million in deposits. Athens, Tennessee we have loans of $6.5 million; deposits about $16.0 million.

Okay, thanks for the detail.

Thank you.

We'll take a question from Terry Maltee (ph) of Sandler O'Neill Asset Management.

Can you guys hear me?

Hi, Terry.

Hi, good morning. How are you?

Good morning, Terry.

Just a quick question regarding the new hires. I want to make sure first that I heard right. You hired 7 new lenders in the first quarter; is that right?

Yes, that's right.

Were they sort of hired throughout the quarter and is it safe to assume we've seen little to no production from them yet?

That is correct. They were hired throughout the quarter and in no specific order. The production people hopefully we will see the results of that going forward. A couple of the 7 were also to help strengthen our loan underwriting and approval process that we have been looking for particularly on the coast since that market continues to grow and we're pretty excited about the potential there.

Okay. And Jimmy, I know there is no exact answer to this, but if you had to guess based on what you are seeing in the market, how many more lenders would you guess we would see you hire over the next few quarters?

Well, we are opportunistic on that, Terry. As we find those type of people that fit all of the criteria that we have talked about, that can bring business to us, we look at that as a true opportunity that is only going to exist for a very short period of time. I wish I could give you a specific number. I would say this. We are seeing probably as many opportunities today as we've ever seen to bring on solid, very experienced, quality bankers that have good, solid relationships to bring with them. That's been a large part of how we have built this company and we certainly have no plans of slowing that process down.

And when you say as good an opportunity as you've seen, you're talking about spanning the whole time you've been doing this?

That's correct.

Okay, great. Thank you guys; good quarter.

We will take a question from Brett Young (ph); FIG Partners.

Hello. I wanted to ask you about - well, the first thing is - in non interest income, I've seen a down trend in general in the market in service charges. Also I wanted to find out what you not only thought about that going forward to 2005, but also your other specifics; some of the other categories, if I could get some more color on that?

Sure, Brett. When you look at it year over year, we're up about 10%, about $900,000 on a year of year basis and if you look at consecutive quarter, we're actually down $600,000 from the fourth quarter of 2004, primarily in 2 areas. As I mentioned last quarter, we had a record fourth quarter with our consulting firm and we're down $300,000 from that record high they had last quarter which again is still above the run rate that they had all during '04 so they're still starting out strong this first quarter into 2005.

The other big piece would be of $200,000 lower fee revenue on our mortgage refinancing income. On a consecutive quarter basis, it's actually up $200,000 on a year over year basis. So I think the 10% that we have on a year over year probably should continue until we get the quarters growing throughout 2005. Service charges are basically up about $100,000 on a consecutive quarter, and it's up about $400,000 year over year.

And then one other question about this modeling it's - about your NKL's, and whether or not there was any one big 1 or 2 to cause the NTA (ph) increase?

Yes, Brett. Basically that was the results of 2 credits that's been on our books - 1 for a little over 3 years and also let me say this, one of the largest credits, the NPA's actually has been sold - well, we've sold $1.3 million of that since quarter end and it's under contract, the balance of it is about $700,000, which will actually produce a recovery.

But both of those credits -- we're pretty decisive - once we feel that a loan is in the ditch and we feel that it will possibly weaken, we want to go ahead and draw that to a conclusion. The largest credit is $3.4 million. It's secured by real estate. It's 2 restaurants. One of the 2 loans has a SPA 504 behind that credit. Actually the owner is working with us today, trying to sell both of those, and basically his change that I think led to where we are today is his over aggressiveness to expand.

He's very successful, but sometimes the expansion will get a person into trouble. These are in 2 very high traffic locations, and hopefully we'll be able to get those concluded in the very, very near future.

Okay. If I could ask 1 more question; where do you see pricing on acquisitions in 2005 on a relative basis?

Well, pricing - certainly the banks that we have an interest in selective markets, I feel sure they'll feel very expensive. Again, these are very strong growth markets and will always command a pretty strong premium, but again our discipline and what we focus on has not changed. We are looking at a market that we've already identified. If it is too expensive, we will walk away.

We have walked away already this year a number of times. Secondly, another thing that we look for is within the composition of the balance sheet. Today, there are a lot of new banks that are maybe 4 or 5 years old and they have a large amount of broker deposits, supporting a high octane - lending operation and we don't see that real solid core bank. So we're very disciplined; we're very exact in what we're looking for, but I think the pricing again will continue to be pretty strong though banks have - most of our stock has retracted some - it's going to make it more difficult for deals to be done, in my opinion.

Okay. Thank you gentlemen.

Thank you, Brett.

We'll take our next question from Jefferson Harralson (ph)of KB & W. Please go ahead.

Thank you. You guys seem to have a lot of unusual number of start up dates in your market area and just from seeing some of the rates they are putting out - they're putting out pretty high rates like 3.0 and 3.5% now in money market accounts. How can you guys combat that and keep your margin relatively flat as we go through 2005?

I think Jefferson that's a great question and we are seeing some of that. We are seeing really I think the rates pick up more in the Certificate of deposit area. We have what I think is a wonderful and balanced company in some very selective markets which also allows us to do some of those things in new markets.

For example, in south Atlanta, with the 3 acquisitions last year we have been able to actually pay up a little bit on the deposits of core deposits to gather those because we think they are probably cheaper today than they will be. But at the same time in these stable markets people again, because of our relationships with them continue to stay with our company.

Certainly you have the pricing pressure on the loan side. A lot of these start up banks continue to create a little bit of a credit spread compression because they don't - maybe they just don't understand the curve - and they are wanting to price out 2 and 3 and 4 years at just give away prices and we see that and that's where many times we have to just walk away unless it's an extended relationship. We will continue to see the pressures, the pricing pressures. With the tools that we have available to us, we feel today that we still will be able to hold our margin in that 4% range.

Okay. Thanks a lot.

[Operator Instructions] We'll take a question from Peyton Green at FTN Midwest. Please go ahead.

Yes. Good morning. Jimmy, I was wondering if I could get your perspective on where you think we are in the cycle and given your customer feedback and business development efforts, what the next 1 to 2 years look like.

Peyton, I'm not sure I'm qualified to answer that but I will give you a stab. I think we'll continue to see rates probably increase. Certainly that appears to be the indication. Whether it reaches the upper range as we've all been told 2 or 3 months ago, I don't know.

I think there is a real delicate balance there because of the importance of the housing industry and the mortgage business and I'm hoping that the FED will keep that in perspective over that period of time. But also too, I think we'll see in our markets where we will continue to have very strong loan growth because of the area, the location, so many people want to locate in these markets.

And we also continue to see pretty good momentum in that metro Atlanta area. So, as we look out over the next 2 to 3 years, we continue to see pretty solid loan growth in all of the markets. I think the challenge that we continue to have today and certainly into the future is the funding side and I think that's where those banks that are going to have a good, solid margin that can produce consistent, dependable earnings has got to be at the top of their game going forward in managing the margin.

Okay. So, if rates went up 100 or 200 basis points, do you think that limits what your commercial customers would do or what your real estate customers would do necessarily or is the local economy strong enough that that's not going to really matter much?

Well, it will definitely have some impact and I don't know -- until the rates rise another 150 basis points, I don't think we'll know for sure, but I do feel pretty confident. Certainly that's going to take some business out of the market, but it's not going to stop dead in its tracks and again, we have a lot of very strong wealthy people that are locating particularly in these retirement areas; north Georgia, western North Carolina, east Tennessee, coast of Georgia.

They are coming, I think, regardless to what rates do; that baby boomer generation. And I think also with metro Atlanta and the dynamics that that market offers will continue to grow; maybe a little slower pace, but given the increased interest rate environment that would follow, all we're looking at - and I don't think anyone would know that answer - I can't think of a better part of our geography to be located than where United Community Banks is located.

Okay, great. Thank you.

There are no questions at this time. I'd like to turn the call back over to the presenters for closing remarks.

Thank you so much and we want to thank all of you for joining us this morning. We look forward to reporting our results next quarter and again, we hope all of you have a great day. Thank you.

Ladies and gentlemen, thank you for joining us on the call. You may now disconnect.