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BankUnited Inc. (NYSE:BKU)

Q4 2012 Earnings Call

January 29, 2013 9:00 am ET

Executives

John Kanas – Chairman, President, Chief Executive Officer

Douglas Pauls – Chief Financial Officer

Mary Harris – Senior Vice President, Marketing and Public Relations

Analysts

Ken Zerbe – Morgan Stanley

Robert Placet – Deutsche Bank

Brady Gailey – KBW

Gerard Cassidy – RBC Capital Markets

Russell Gunther – Bank of America Merrill Lynch

Joe Fenech – Deutsche Bank

Michael Rosato (sp) – (unknown)

Operator

Good day ladies and gentlemen. Welcome to the BankUnited Fourth Quarter Earnings call. My name is Steve and I will be your operator for today. At this time, all participants are in a listen-only mode. We will conduct a question and answer session towards the end of the conference. If at any time during the call you require assistance, please press star, zero and an operator will happy to assist you. As a reminder, this call is being recorded for replay purposes.

I would now like to turn the call over to Ms. Mary Harris, Senior Vice President of Marketing and Public Relations. Please proceed, ma’am.

Mary Harris

Good morning and welcome. It’s my pleasure to introduce John Kanas, BankUnited’s Chairman, President and CEO.

But first I’d like to remind everyone that this call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the company’s current views with respect to, among other things, future events and financial performance. The company generally identifies forward-looking statements by terminology such as outlook, believes, expects, potential, continues, may, will, could, should, seeks, approximately, predicts, intends, plans, estimates, anticipates, or the negative version of those words or other comparable words. Any forward-looking statements contained in this call are based on the historical performance of the company and its subsidiaries or in the company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the company that the future plans, estimates or expectations contemplated by the company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to the company’s operations, financial results, financial condition, business prospects, growth strategy, and liquidity. If one or more of these or other risks or uncertainties materializes, or if the company’s underlying assumptions prove to be incorrect, the company’s actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive.

The company does not undertake any obligation to publicly update or review any forward-looking statement whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the company’s annual report on Form 10-K for the year ended December 31, 2012, available at the SEC’s website, www.sec.gov.

Now I’ll turn it over to John. John?

John Kanas

Do you have that memorized?

Mary Harris

I do!

John Kanas

Good morning everybody. Clearly we’re pleased and we’re anxious to talk with you all this morning. The quarter was extraordinary and it topped off an extraordinary year for us. I’m going to speak to you only briefly about the high points as I see them looking back over 2012, a couple comments about the future. With me is Doug and Leslie and Raj and John Bohlsen, and between us we will answer any questions that you have.

The quarter was driven by principally three things: obviously the better results in the sale of loans than we had been accustomed to in the past had an impact on the quarter, a pretty big impact on the quarter, and on the net interest margin. Doug will be happy to fill you in on the details of that. I remind you that in past years, we’d always sustained a significant loss on the sale of these assets in the fourth quarter, and we could see that as the economy is improving we’re getting a lot more action in these auctions. You can see that we got almost 40% of the UPB on these loans this time compared to less than 30% in the three years before—an average of less than 30% in the three years before, so we expect that those kind of numbers will continue as the underlying economy continues to harden.

New loan growth is obviously a big driver and a marker for the success of our strategy down here in Florida, including loans we purchased. The annualized growth rate of loans in the quarter was 55%. We continued to see improvement in that area, and we continue to gain market share on our competitors down here in Florida. A year ago, if you would have asked me where the loan growth was coming from, I would have said essentially 100% of it was coming from pirating away market share from competitor banks. We are now beginning to see – and it’s really two quarters old – we’re beginning to see a noticeable improvement in the south Florida economy, which is contributing to that loan growth as well. If I had to guess, I’d say it’s still 75% market share gain but 25% of it is coming from a growing economy, particularly in south Florida.

We opened nine new branches this year and are almost done with our expansion in physical branches in Florida. We’ve got seven to go this year ahead of us, but only one of those will be a new location. Six of them are clean-ups of old branches.

We obviously did a rearranging of the balance sheet which Doug and Leslie will talk about, having extinguished over half a billion dollars worth of federal home loan borrowings that—and terminating those that had a borrowing cost of almost 3.5%. We’re pleased to be able to do that for two reasons: one is that it made sense in today’s interest rate environment, but even more importantly it has the impact of helping us out earnings-wise in 2013.

So all in all, a spectacular quarter for us. We feel good about the momentum that continues to build at BankUnited, and we look forward with great enthusiasm. We did find a way to return some capital this year by increasing our dividends by 24% to $0.21 a quarter. You also should note that as we predicted, the cost of deposits continues to decline, although it is at BankUnited still high in comparison to the broader market of commercial banks at 73 basis points, which actually net of hedge accounting is truly 68 basis points; but we still have a significant way to go in terms of reducing deposit costs if market interest rates continue to stay where they are on into ’13. So we are poised for a good year ahead of us here in Florida.

I should remind you that Friday is February 1. It is the date that all of the encumbrances on John and I fall away with regard to our non-compete in New York. We do expect this quarter to open three branches in Manhattan and one on Long Island and to begin expanding the franchise in New York. We’ve hired a number of people already that are beginning to help us lay out our strategy in New York, and you should look forward to seeing press releases on those issues coming up in the next few weeks.

I will stop now and take any questions that you have.

Question and Answer Session

Operator

[Operator instructions]

Your first question is from the line of Ken Zerbe. Please go ahead, Ken.

Ken Zerbe – Morgan Stanley

Great, thanks. Yes – Ken Zerbe from Morgan Stanley. I guess the first question I had – in terms of the loan sale on the loans that had the zero carrying value, can you just quantify how much actually relates just to that that actually fell to the bottom line? I know that most of it went to the NII, but was there other components of that that went to the FDIC reimbursement line? I’m just trying to get a sense of the geography and impact of that sale. And then if you also don’t mind, when you think about over the course of 2013, should you sort of pull from that same loan pool to offset additional losses over the course of the year?

Douglas Pauls

So Ken, this is Doug. How are you this morning? We’ve had several discussions about the accounting for this, and I won’t go into great detail here; but let me just emphasize that we expected a benefit in the margin from the fourth quarter from the loan sale, and when we gave people guidance at the end of the third quarter, we expected the margin for the year to be in the 570s. That was based on what we expected to get from the sale.

Obviously, as John mentioned, the prices that we got from the sale were significantly higher than we were projecting. The proceeds from the sale of the loans in the delinquent pool, all of that goes through the margin. So although we were projecting some benefit to the margin from that sale, the benefit to the margin was obviously much greater which is why we did some of the other things we did to pay down debt and some other things.

The second part of your question, we think that bodes very well for 2013 should we decide to sell more loans out of that pool. I mean, we’re very encouraged by the pricing, and if the pricing stays at these levels or even increases, it’s very beneficial to us. So all of the proceeds go through margin; however, because the loss in terms of what we can expect the reimbursements from the FDIC, that loss is calculated on UPB. It was a benefit that went through the gain on FDIC asset line.

Long story short, that’s what resulted in the impact of non-interest income being basically break-even, which is what we kind of told people we thought it was going to be for the fourth quarter.

Ken Zerbe – Morgan Stanley

Okay, that does help. Another question I had – when you think about the additional accretion, I guess you reclassified some of the non-accretable to accretable this quarter – a fair amount, it looks like. When you layer in that plus the FHOB repayment, do you guys have any guidance or thoughts in terms of net interest income for 2013?

Douglas Pauls

So consistent with what we’ve always—what we’ve said for the last three or four calls, we would expect our margin percentage to decrease in 2013; however, as we sit here today, the advantage that we have over other banks is because of the growth that we expect, we actually are projecting our net interest income dollars to increase in 2013. So the margin percentage will go down consistent with what we’ve told you in the past, but we expect more dollars, which frankly I like to spend dollars – I can’t spend percentages.

Ken Zerbe – Morgan Stanley

Understood. But we should see some of that increase in dollars offset through lower FDIC accretion, correct?

Douglas Pauls

Correct, and I think we have a statement in there that indicates that we expect the quote-unquote yield on the FDIC asset to turn negative next year, so you will see lower non-interest income as a result of that.

Ken Zerbe – Morgan Stanley

All right, thank you very much.

Operator

Thank you. Your next call is from the line of Robert Placet. Please go ahead, Robert.

Robert Placet – Deutsche Bank

Good morning. First question – in the past, you talked about commercial real estate being a smaller component of overall loans than you had expected. Just given you were being a bit cautious in this area, any update on your appetite to grow CRE?

John Bohlsen

This is John. As the Florida market has improved, we are getting more and more comfortable with commercial real estate down here; and in fact, it is a growing component of our loan growth. We will also be impacted significantly in that category as we move to New York because commercial real estate – and by commercial real estate, that encompasses traditional commercial real estate and multi-family lending – is expected to be a large part of our asset growth in New York City. So the answer is more of it in Florida and certainly more of it coming out of New York.

Robert Placet – Deutsche Bank

Okay, great. And then just with the continued challenging rate environment, I was curious if you just give your latest thoughts on any build-out of any fee businesses, whether it be a mortgage platform or what have you.

John Bohlsen

Over the past year, we’ve looked at any number of potential fee businesses. Unfortunately we haven’t found anything that makes a great deal of sense, although Raj and John have been busy in the last month interviewing some people. I guess the short answer is we expect that we’ll do more residential mortgage loan origination out of this franchise this coming year, which will have an impact on fee income, but we don’t see a magic bullet here that anyone else hasn’t already tried. We’ve looked at all of the obvious categories that are associated with banking and don’t think that there’s anything magic here.

Robert Placet – Deutsche Bank

Okay, thanks.

Operator

Thank you. Your next question is from the line of Brady Gailey. Please go ahead, Brady.

Brady Gailey – KBW

Thanks, good morning. So when you look at loan growth, you’re not fully back online in New York yet; but was there a lot of loan balances that were added in the quarter from the New York geography?

John Kanas

No, none.

Brady Gailey – KBW

Okay. And last quarter—

John Kanas

And by the way, to say that we’re not fully online, we’re not online at all in New York.

Brady Gailey – KBW

Okay. And last quarter, I think the new loan yield was around 365. Did that change a lot in 4Q?

Douglas Pauls

The stuff that we’ve put on, Brady, weighted average was right around 350.

Brady Gailey – KBW

I remember talking on the 3Q conference call and you seemed a little more upbeat on the conversations you were having with potential targets as far as the bid ask tightening a little bit. Can you just give us an update on how that’s progressed over the last few months?

John Kanas

Or the last three years, I guess? Those conversations continue and you’ve been reading about some companies that are actually coming to market to try to get sold in the near future. We continue to have conversations with banks that are of interest to us, both in the northeast and in the southeast; but to be frank with you, we have such a growth experience here in Florida and the results of our de novo expansion are so good that frankly everything we look at is more dilutive than any of us want to take on, and introduces levels of risk into the company that I don’t think make any sense.

Having said all of that, I suspect that something will happen at some point. It’s clear that there are more incoming phone calls from people who would like to take part in a transaction, and we’ve had more conversations this quarter, I guess, than we’ve had in the last couple of years. But there is nothing burning out there, and I don’t—while we’ve all walked around for the last couple of years predicting this massive consolidation in the banking industry, essentially nothing’s happened. I really don’t see, unless regulators get a lot more ambitious, and I don’t think they will, I don’t really see the catalyst to getting people encouraged in this area except for the uncertainty they have toward future earnings. We’re dealing with a number of institutions who are at that juncture and know they have to do something.

I hate to keep saying this every quarter, but not yet.

Brady Gailey – KBW

Okay. And this is Doug’s last conference call, right?

John Kanas

Yeah, actually I was going to mention that later, although we’re going to get him back here to sit and help us get through conference calls. Doug has made a very meaningful contribution to this company. Professionally and personally, we are going to miss him. He’s really become a very important part of our success story down here, and we send him back to South Carolina reluctantly. I can assure you he’s going to be around a fair amount. Leslie will take over as CFO at the end of February, beginning of March; but Doug will be around for the balance of the year to give us a hand and hopefully on into the future.

Brady Gailey – KBW

Well hey Doug, it’s been great working with you, and good luck in life after BankUnited.

Douglas Pauls

Thanks, Brady. I appreciate that.

Operator

Thank you. Your next question is from the line of Herman Chan. Please go ahead, Herman.

Herman Chan – Wells Fargo

Thanks. The 350 yield you are getting on new loans, how would you compare that to yields expected on the New York loan portfolio once they come online?

John Kanas

From what we can tell, depending upon the mix of loans that we do in New York, there’s not going to be a material difference in pricing in the New York market. Florida is very, very competitive right now for obvious reasons, and so is New York; and I think that our expectation is about the same.

Herman Chan – Wells Fargo

Got it. And you mentioned that you’ve put in place some people already in the New York operations. Can you discuss some of the hiring activities that you guys have done prior to the expiration of the non-compete? Thanks.

John Kanas

We’re about to put out a press release, I guess in the next couple of days. The biggest hire or the most prominent hire that we’ve made is a gentleman who will head up our real estate lending activities in New York. His name is Sam Giarrusso. He was—yeah, how long was he with M&T? Twenty years running the real estate lending division in New York for M&T Bank. He was our biggest competitor in North Fork, so now he’s—we’ve got a new badge on Sam. We’re going to make that announcement—I guess we just did, huh? We’re going to make that announcement formally sometime in the next few days.

Sam has been well known to John and I for probably 30 years or more. He’s a very strong addition to our bank. He knows the New York market like the back of his hand. He knows every one of the borrowers and has had lots of experience with them all and can identify any location, any physical location or building in New York. So Sam will make a very big contribution very quickly when you combine his market experience with that of John Bohlsen’s and mine. Sam brought two or three of his underlings with him who worked with him before in the New York market, and then we’ve hired some of the back office folks from other institutions. Obviously no one’s been hired from Capital One, and we are beginning—actually, we were hopeful to open our Melville office in a few days, which will be the first office. We’ll kind of have a soft opening up there to get things organized and then move on with the new staff to open Manhattan in the next few weeks.

Herman Chan – Wells Fargo

Great, thank you.

Operator

Thank you. Your next question is from the line of Gerard Cassidy. Please go ahead, Gerard.

Gerard Cassidy – RBC Capital Markets

Hi John. Can you guys give us some color on the unwinding of the hedge that you did, what the thinking was behind it?

Douglas Pauls

Sure. Gerard, it’s Doug. As I mentioned previously, we had better than expected results from the loan sale, and so we took a look and we decided we had some longer term FHOB advances that went out to 2014 and 2015 at high rates in today’s environment, and we also had several swap transactions out there. We decided to terminate one of those swaps, pay off the longer term advances. All that stuff had a combined borrowing cost of roughly 3.5%, and we decided to do that because it positions us for 2013 and beyond. If in fact we feel that we need to replace that longer term funding, we have a significant amount of federal home loan bank advances maturing in 2013, so we believe when they mature that we’ll be able to look at those and probably extend them out for a fairly long period of time in an environment where costs are historically low.

So that was the thinking behind that.

John Kanas

Gerard, you shouldn’t be left with the impression that we’ve decided to go all short on borrowing – quite the contrary, actually, because it is our belief that at some point here, maybe this year, we’re going to see interest rates move up in the marketplace, and we think primarily about protecting the balance sheet in that environment. So as Doug said, we paid off borrowings that cost 3.5% to put on like duration today- what is it, about—even longer duration than we paid off, Gerard. It will go from 3.5 down to 1.

Gerard Cassidy – RBC Capital Markets

Very good. The mortgage insurance income line was quite low this quarter. Was there anything—is it a seasonal issue or there was some business you just decided not to do in the fee revenue area?

Douglas Pauls

No, most of that, Gerard, actually pertains to legacy residential loans, and as that portfolio is winding down that income is winding down. So nothing – not seasonal, not a decision on our part not to offer it or anything like that.

Gerard Cassidy – RBC Capital Markets

I see. And then John, can you remind us once New York gets up and running, you pointed out you guys did about 2 billion of loans in Florida this year. What kind of run rate do you expect New York to kind of kick in on your loan originations, and when do you think you can reach that run rate?

John Kanas

What we’ve said in the past and we still feel good about repeating is that after we’ve been in New York for two full quarters, so let’s say by the end of the third quarter of this year, we’d be disappointed if the run rate of loan growth coming out of Florida. It’s another way of saying we hope to double our run rate of loan growth.

Gerard Cassidy – RBC Capital Markets

Great. And then just finally to come back to your comments on the funding costs on deposits, some of it I gather is legacy issues. But what’s interesting is interest-bearing demand deposits at 56 basis points seems on the high side. Have you guys been able to—because of the strength of your loan loss sharing agreement with the FDIC, been able to maybe use slightly higher rates to attract more customers, but at the same time you’re making so much money from the loan loss sharing agreement you’re able to do that?

Raj Singh

Gerard, this is Raj. We are playing with price leverage on the deposit side and we—there is still some legacy deposits which are very price sensitive and we’re careful with them. But those are being replaced with the new commercial and small business deposits, so we do expect that 56 basis points to keep coming down. It is already down this quarter. It’s hard for me to say exactly what it will come to and how fast, but we do expect that number to come down and get more in line with average for Florida banks.

John Kanas

Yeah, a view into our strategy is the growth of demand deposits for the year. While we didn’t do much for the fourth quarter because that tends to ebb and flow, but demand deposits grew by about 50% for the year, and that is clearly our emphasis on the liability side as we grow loans.

Gerard Cassidy – RBC Capital Markets

I guess finally on that, John, what do you guys think demand deposits as a percentage of total deposits could reach, or what’s a level you guys would be satisfied with?

Raj Singh

Transaction deposits, Gerard, there’s no reason why it shouldn’t be 30%. Demand interest and non-interest bearing combined, I’m saying you should be 30% if not even better, and we’re not there yet, so.

John Kanas

I think that’s easily achievable over the next periods.

Gerard Cassidy – RBC Capital Markets

Great. Thank you very much.

Operator

Thank you. Your next question is from the line of Erika Penala. Please go ahead, Erika.

Russell Gunther – Bank of America Merrill Lynch

Good morning, guys. It’s Russell Gunther for Erika.

John Kanas

Your voice has changed dramatically!

Russell Gunther – Bank of America Merrill Lynch

Yeah, sorry to disappoint! Appreciate the color on expectations for NII growth. I’m wondering if you could give us a hand on expectations for the margin, just given the unique dynamics to your NIM and the opportunities you see on the liability side. Do you have a sense for how that could trend in ’13?

Douglas Pauls

Well Russell, I think we have been saying for the last couple of quarters as we looked out that we would expect it to be roughly 70 basis points lower year of 2013 compared to year of 2012 on a margin percentage basis. And as we sit here today, I think that’s still a pretty good approximation.

Russell Gunther – Bank of America Merrill Lynch

Okay, just off a higher base NIM than maybe some of us were looking for, given the quarter?

Douglas Pauls

Actually I should have said that myself – thanks for pointing that out. We’re starting from a much higher base than we had expected to be. We expected to start from a base of 570, give or take, and we’re starting from a base of 604. So it’s better than we would have projected on last quarter’s call.

Russell Gunther – Bank of America Merrill Lynch

Okay, great. Appreciate that. And then just on the expenses, given you mentioned the hirings that you’ve done, some more announcements to make, branches opening in the first quarter. Has that investment already been reflected in the 4Q run rate, or what could we expect on the expense side going forward?

Douglas Pauls

Well, a certain amount of the expenses are in the fourth quarter. These branches that haven’t opened yet, we do have leases and we’ve picked up a fair amount of that in the fourth quarter. Obviously people costs are not in the fourth quarter run rate. Anybody we hired in New York was very recent, so that’s not in the fourth quarter run rate.

Cutting through it, Russell, as we look at next year, we expect our non-interest expenses to go up a little bit – occupancy and people costs. All the other non-interest expenses, there will be pluses or minuses but they’re basically flat.

Russell Gunther – Bank of America Merrill Lynch

Okay, great. That helps. And then last question – just how we should be thinking about provision expense going forward, given expectations for loan growth to really accelerate here in the back half. I guess where are you guys providing for new originations and just expectations for that going forward?

Douglas Pauls

Yeah, that’s a good question, Russell, because probably our provision for the fourth quarter was lower than what you might have had in your model. We’ve been saying all along that we’re providing at this point based on loss factors from a peer group of institutions because as a new institution ourselves, we don’t have enough of our own loss history, and we’ve been saying that we expected over time that that provision would go down as we started to migrate to our own loss factors. We haven’t migrated yet, but what we saw in the fourth quarter was those loss rates for the peer group went down.

Unfortunately it’s a little hard for me to predict what those loss rates might do, but if they stay at these levels, then we’re going to have significant growth but our provision probably will be a tad lower than what you have in your models if you’ve got your growth numbers right. But again, that’s as we sit here today, and there could be some volatility in those peer group loss factors.

Russell Gunther – Bank of America Merrill Lynch

Understood. All right, thanks for the color, guys. Appreciate it.

Operator

Thank you. Your next question is from the line of Joe Fenech. Please go ahead, Joe.

Joe Fenech – Deutsche Bank

Good morning. Just first, wanted to echo Brady’s comments wishing Doug well. It’s been good working with you, Doug, and looking forward to working with Leslie also. My question is there is any way for you guys to segment out for us as best you can what you think the contribution from what I’ll call the traditional bank was in the quarter? In other words, the bank you’ve been building ex all the noise, and then what the trajectory of the growth in earnings in the traditional bank has been over, say, the past year or so? And if you haven’t gone through that exercise per se, maybe just help us out a little bit conceptually with some of the components or how you think about it; in other words, core NIM ex all the noise, things like that, and then in rough terms what you think that trajectory can be, say, end of this year to next year?

Douglas Pauls

You know, Joe, that’s a question we’ve been asked for the last couple of years, and we have consistently said – and I’m going to say again – that to try and pull that apart, we think is a not impossible exercise but kind of a fruitless exercise because it’s all tied together. We service these legacy loans so we have servicing costs associated with those, so we don’t do that. I mean, this is our business model and this is what we do.

So if you’re talking long-term, we have said that we would expect our margin will start to get closer to what other banks are, but I can sit here and tell you today that if we look out three years, we still expect – as we sit here today, not having a crystal ball to what rates will do – we still expect our margin to be over 4%, and as we get out two or three years, it starts to stabilize. So maybe that’s the best way to look at it in terms of what the long term core business could be, because obviously the impact of the legacy stuff will get less and less each year.

Joe Fenech – Deutsche Bank

Okay, fair enough. I guess just conceptually, if you just were to say, okay, when do we expect the traditional bank to overtake sort of the earnings from the loss share? I know that’s really hard to pick apart, but just conceptually, is that something you guys think about at all? Like say, okay, by 2015 the traditional bank will be 51% of the earnings stream. Not to that preciseness, but just conceptually is there any way to pinpoint when you expect to cross that threshold?

Douglas Pauls

Not exactly, but I would say, Joe, if you said to me gee, you think by 2013 that traditional bank earnings will have surpassed the legacy? I would say yes.

Joe Fenech – Deutsche Bank

Okay. All right, fair enough. Thank you.

John Kanas

And Joe, so much of that is a function of the underlying economy, interest rates in the market place, our success and growth in New York, and anything that may come along that’s of the nature of inorganic growth. So we try not to spend too much time thinking about that but rather thinking about putting one quarter in front of the next.

Operator

Thank you. Your next question is from the line of Michael Rosato.

Michael Rosato

Good morning guys. Just on the cover loan sales, I apologize if you’ve already answered this, but are you going to start selling loans on a quarterly basis or should we expect maybe a large loan sale in 4Q13?

John Kanas

So Michael, we didn’t talk about it today. We talked about it probably last quarter, so it’s still a valid question. We’re still evaluating that. Our concern is if we wait and do it all in the fourth quarter, it makes it very hard for you folks, frankly, to analyze us and really follow us. So our thinking is that we’re going to evaluate doing that several times throughout the year.

Michael Rosato

Okay. And then as a follow up the maturing FHOB advances throughout the year, I don’t know if you could provide any detail on the amount coming due in the first and second quarter.

Douglas Pauls

We have just under $700 million maturing in the first quarter and another roughly 350 million throughout the rest of the year. Not all of that 680 million is at a very high cost. I don’t want you to get the impression that if we extend that, we’re going to see a huge benefit from a pure cost basis, but what it would allow us to do is extend the liability side of our balance sheet at a very favorable rate.

Michael Rosato

All right, great. You guys answered the rest of my questions already. Appreciate it.

Operator

Thank you. Sir, I have no questions at this time; but again ladies and gentlemen, if you do wish to ask a question, please key star then one on your telephone.

John Kanas

Hearing none, I want to thank you all for calling in this morning. I want to thank you for the interest in our company. We’re obviously very excited about the upcoming year for a number of reasons, and the results this year certainly getting us off to a strong head start going into whatever may come in 2013. I’ll repeat that we’re encouraged greatly by what we’re seeing here in the south Florida market and in the overall market in the United States, and we think that that’s going to bode well for us and other institutions into the future.

So thank you again and look forward to talking to you in 90 days.

Operator

Thank you. Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Thank you and have a good day.

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